On December 30, 2006, the Pakistan Muslim League (PML), formerly the All-India Muslim League, completes its one hundred years. The party, which was set up to look after the political interests of the Muslims of India, finally spearheaded the struggle for a separate homeland for them. Despite its success, the League suffered from two major weaknesses: lack of a well-defined social and economic programme, and lack of a strong party organisation. These two weaknesses have persisted to date and are mainly responsible for the League's pro-establishment stance since 1947.

To begin with, the League has never had a well-defined social and economic programme. Before the 1940 Pakistan resolution, the League sought to protect the interests of Indian Muslims through the mechanism of separate electorate, under which seats were to be reserved for Muslims for elections to legislative assemblies. But apart from the assertion that joint electorate were ill-suited to protecting the interests of Muslim minority in Hindu-majority India, the demand for separate electorate was not based on any socio-economic philosophy. By the same token, the demand for a separate homeland for Muslims did not spell out a socio-economic programme that would be introduced in what was to become Pakistan. Pakistan would be a Muslim majority state. But would it be an Islamic state? Would it be based on Islamic law? What kind of economic system would that state have? Would it be capitalism or socialism? The leadership of the Muslim League never seriously addressed these questions. To them it was sufficient that in the new state all resources would be at the disposal of Muslims.

Due to lack of any socio-economic philosophy, the League has always found it convenient to dance to the tune of the establishment. Under a religious minded Gen Ziaul Haq, the League was a most conservative party clamouring for the introduction of Islamic laws in Pakistan as the panacea for all ills with which the country was beset. Under a liberal Gen Musharraf, the League is a moderate, forward-looking party clamouring for 'enlightened moderation' as the panacea for all problems facing Pakistan.

The 1946 elections held on the basis of separate electorate were a watershed in the history of the League. The party won all the Muslim seats and accounted for three-fourths of the total Muslim votes. The victory of the League, however, owed more to the charismatic leadership of M.A. Jinnah and increasing demand for a separate homeland for Muslims which the party advocated than to a vibrant party organisation.

After the creation of Pakistan the League failed to maintain its popularity. For a multiethnic state like Pakistan, there was the need for a strong and stable political party with an across-the-nation base capable of holding all ethnic groups together. In India, the Congress did that. However, in Pakistan the League failed to do so. The absence of a strong organisation and a credible leadership after Jinnah weakened the party. Apprehensive of its defeat, the party shied away from seeking a popular mandate. The result was that by and by the party lost its popularity and strength. The party, if it was to hold on to power, had to seek the support of the establishment.

When the governor-general dismissed the central League government in 1953, the party bowed to the decision by accepting Muhammad Ali Bogra as the new prime minister. When the same governor-general dismissed the constituent assembly in 1954, the party again meekly surrendered. The League's failure to take a firm stand against the dismissals created the impression that it was an anti-people, pro-establishment party. Hence, in the 1954 provincial elections in East Pakistan, the party was routed by the United Front comprising mostly League dissidents. The League won only 10 out of 309 seats. In the western wing as well, the party cut a sorry figure. A process of disintegration set in the party from which it never fully recovered. The disintegration led to the birth of the Republican Party, fathered by none else than the president of the republic.

During the Ayub era, when the need for a political party to support the regime was felt, the obvious choice was the League, which was revived by the name of the Convention Muslim League. However, notwithstanding full official backing, the party failed to regain its popularity. The 1970 elections were contested by at least three Leagues with an utterly dismal performance by each.

Throughout the Bhutto period (1971-77), the League remained a virtual non-entity. The party was resurrected after the 1985 elections held by the Zia regime to create a semblance of democracy. Though the elections were held on non-party basis, it was soon felt that a representative set-up could not work without the participation of political parties. But which party should represent the regime? Once again, the League was chosen. Senators, MNAs, MPAs and heads of local bodies were enticed into joining the born again League.

The regime projected the League as a party stronger and popular than the main opposition force, the Pakistan People's Party (PPP). However, the League's strength and popularity were built on sand. The party remained united only as long as it remained in the saddle. After prime minister Junejo was sacked by the president in 1988, dissensions broke out in the party. The League however was cobbled by the establishment to face the PPP in the national elections. Despite the administration's backing, the party was unable to form the government at the centre. However, courtesy horse-trading, a League government was installed in the Punjab province.

With the support of the caretakers, the League won the 1990 elections and remained in power until its government was ousted by the president in 1993. Then history repeated itself. No sooner was the party government dismissed than the party fell apart and two main factions emerged: the one led by the ousted prime minister Nawaz Sharif named the PML-N and the other by Hamid Nasir Chattha called the PML-J. Of course, there were other factions like the PML-Qasim and PML-Functional each claiming to be the real League.

After prime minister Sharif was removed in 1999 by General Musharraf, many of his erstwhile party colleagues ditched him and formed another League faction called PML-Q. When the establishment looked for a king's arty, the PML- Q was the most convenient choice. The faction ever since has served as the political mouthpiece of the establishment. There was little surprise when after the 2002 elections the PML-Q emerged as the single largest party and formed the government.

The story of the League is thus a sad commentary on our politics. When there are political leaders willing to dance to the tune of the powers that be, even if it means rocking the very boat they are in, democracy can hardy flourish. It is not that divisions in their ranks necessarily sink political parties. In India, for example, the Congress has split up on more than one occasion. At any rate, a political party must be capable of managing the rise of factions in its ranks, just as the Congress has done. However, to cope with such problems a party must have its roots among the masses. Such parties do not need the help of the state to survive and thrive. On the contrary, political parties which do not have a popular base, can only derive sustenance from state support. For such parties, the only way to enter into the corridors of power is to seek the backing and blessings of the powers that be.

A recent conference in Lahore brings together leading economists and researchers from across the world to discuss governance and how it impacts political, legal and economic institutions

By Syed Faisal Shakeel

"Underdevelopment persists because the initial inequality in endowments and opportunities leads to self-interested constituencies that perpetuate the status quo. Each constituency prefers reforms that preserve only its rents and expand its opportunities, so no comprehensive reform path may command broad support," said Raghuram Ranjhan, Chief Economist of the International Monetary Fund (IMF).

"Though the initial conditions may well be a legacy of the colonial past, their persistence does not require the presence of coercive political institutions, Ranjhan said. "This may be why underdevelopment has survived independence and democratisation.

The roots of underdevelopment lie not so much in the lack of institutions but in the natural self-preservation of a rent-ridden society," Ranjhan said. But it is the adverse interactions between the 'exploited' constituencies, rather than the power of the exploiting constituency per se, might result in an underdevelopment trap, he said. Why reforms have been so difficult in Africa and Latin America, where a relatively small, educated urban middle class has often sided with a small ruling clique in opposing wider, deeper, reform, he explained.

He was speaking at the Second annual general meeting of Pakistan Society of Development Economics arranged by the Pakistan Institute of Development Economics last week in Lahore. The conference had brought together a large number of economists and other researchers from a wide range of disciplines and from across the world to discuss a variety of themes which ranged from underdevelopment to the role of the government in the running of the economy. Divided in a number of sessions and spread over three days, the conference provided ample opportunity to its participants to dilate on subjects that concern Pakistani economy in particular and those of other developing countries in general. The topics were mostly related to the political economy and covered subjects as diverse as justice system and devolution of power.

Hilton L Root, Professor of Public Policy at the George Mason University and Karen May, a graduate student of Claremont Graduate University in their research paper contended that autocrats may overlook or even encourage opacity, corruption or inadequate capacity of the commercial law system to motivate investors to depend on government officials for the protection of their investments.

Their paper was entitled 'Judicial Systems and Authoritarian Transitions'. Reading out from the paper, Hilton said: "All leaders eventually find that judicial function can be used as a tool to enhance political survival, and that judicial politics can exist within authoritarian regimes just as in democratic ones. In Indonesia, for example, Suharto had little interest in improving the outdated Dutch commercial codes because the ineptness of the court system made investors dependent on interventions by the head of state."

He added: "Court functions that we associate with facilitating economic growth -- attracting capital, enforcing contracts, helping to build a revenue base, and maintaining bureaucratic discipline -- are applied selectively in order to reward the wining coalition. Growth in autocratic regimes therefore has a very different effect than growth in democratic systems."

According to Hilton, democratic rulers have strong incentives to promote growth as a public good that was broadly distributed to the electorate and general population. "If a democratic leader fails to provide public goods, he or she may be removed from office," he said. "For the autocrat who has secured a solid base of support, the reciprocal arrangements between the state and the winning coalition do not require economic growth to be sustained. Sometimes better economic performance in certain sectors may work to the advantage of the wining coalitions, but often corruption and economic inefficiency increase as the autocrat becomes more politically entrenched," he added.

Hilton said first autocrats require investment and therefore must create a legal system to facilitate transactions. "Second, they need to enhance revenue collection and credit therefore they need a legal framework that holds financial intermediaries accountable for their private debts and for dealing equitably with citizens. Third, they need to ferret out disobedience and non-compliance by subordinates. A legal system that discloses the abuses of officials enhances the leader's reputation and ensures greater compliance from citizens."

Speaking on the subject 'Reorienting the Role of the Government in Pakistan', Dr Abdul Hafeez Shaikh said all efforts to reduce the size of the government and make it potentially more effective appear not to be working. The relentless march of the government to a bigger and more unmanageable size is continuing, he said. "The devolution programme has been one of the bold and potentially far-reaching of the current government's measures. However, while a third tier of the government has been added it has not been accompanied by a total stripping away of government at the other levels," he said.

"The trend for the government to grow was only temporarily halted in the first two-three years of the current government when efficiency consideration and fiscal prudence appeared important. However, after the first three years due to a combination of additional resources and other factors, the size has continued to grow," said Hafeez. "There has been a proliferation of regulatory bodies such as PTA (Pakistan Telecommunication Authority), NEPRA (National Electric Power Regulatory Authority), OGRA (Oil and Gas Regulatory Authority), PEMRA (Pakistan Electronic Media Regulatory Authority), etc. This is a welcome trend as high quality regulation is critical for the success of sector reforms for providing the right incentives for investors and comfort to the consumers. However, these agencies have proliferated and increased the size of the government without a corresponding decrease in the interventionist activities of the line ministries," he pointed out.

National Reconstruction Bureau chairman Daniyal Aziz, speaking on 'The Future Governance Agenda for Country Assistance Strategies', said critical institutions were necessary to identify and priorities for reform as it was not possible to take all institution into reform programme at once. "Therefore there was a selection requirement," he added.

Nadeemul Haq, Director Pakistan Institute of Development Economics (PIDE), while talking to The News on Sunday, said the objective of the conference had been to put life into an otherwise dying profession of economics. "People still refer to 1960s' research in economics and do not know about the latest research that is the lifeline of economy and policy-making, he added.

When asked how much impact can research and conferences like these have on policy making, Dr Haq said the gap between theory and practice was a misnomer being deliberately propagated by bureaucrats posing as economists for their own gains. "Can you expect a plumber to be an engineer or a steward to be a pilot?" Haq asked. "What I am trying to say is unless the latest research and theory is followed in economics, ills ailing the economy could not be remedied. We all operate according to a system. We think, plan and execute those plans. Similar is the case with economics, research and its application," he said.

Pointing to the problems he had faced in organising the conference, Haq said the World Bank officials had been so arrogant that they did not bother participating in the conference although they were invited. "They do not wish to do so because they don't wish to listen to what we need today. They have got their own agenda to toe."

He said the theme of the conference -- governance and institutions -- revolved around decentralisation, civil service reforms and law and economics with reference to property rights. Haq said decentralisation has a special significance in terms of understanding the needs of a particular constituency or an area and tailoring policies accordingly. "Policies made in Islamabad for Lahore may prove to be a wild goose chase if realities were not kept in mind. Devolution empowers a constituency to carve out policies best suited for it," he added.

In a recent press statement, Prime Minister Shaukat Aziz again reiterated the official claim that poverty has been reduced during the tenure of the present regime. He cited the famous 'trickle-down' theory as a means for having achieved that.

Under this theory, it is supposed that economic growth reduces the miseries of the common people to a great extent by increasing economic opportunities. In contrast, research reports and statistical findings by independent observers point out there has been rather a decline in the subsistence capacities of common people. These reports about the exponential rise in poverty are extremely alarming. One of the reasons for this state of affairs is the increase in the inaccessibility of items of common use in every day life. It is becoming increasingly evident that the low income groups -- irrespective of their precise definition -- are facing the problem of mere survival in all the areas and regions of the country. The chances of acquiring essential family assets such as a basic shelter/house for a decent existence and any other asset for income generation are dwindling very fast. This fact is in sharp contrast to the tall claims of gradual reduction in poverty that are often cited every now and then. Several background matters are crucial to be studied and analysed in an objective manner to inform the decision makers about the actual status of the people on this issue.

Food, clothing and shelter are considered as the fundamental physical requirements for human survival. Whether in urban or rural context, the significance of these items remains paramount. In the rural context, much of these inputs were easy to obtain through intra-communal social relations under the framework of a barter economy. The availability of commonly owned assets such as 'Shamlath' (community-owned) lands ensured the provision of building materials for house construction and maintenance for all village dwellers without distinction. Similarly, the 'Goucher' (grazing) lands enabled the villagers to access a source of fodder for household livestock/cattle. With no constraint on the availability of milk and its products, the nutritional status of a sizable population remained satisfactory. Artisan class that comprised blacksmiths, goldsmiths, cobblers, barbers and farm workers all received their due share in the produce according to a pre-determined formula between the landowner, the farmer and the artisan. These labourers and other classes of artisans, who were related to the respective village communities, could make use of village land for housing after seeking permission from the landowner. Since the services of these artisans were commonly needed, they mutually benefited from each others' existence and services. As such, economic transactions did not require cash which was only handled by landowners when they sold their produce in the market to procure luxury items or to pay taxes to the government from time to time. Till partition, this arrangement was fairly intact with few anomalies in certain locations.

Rural poverty began with the advent of 'Green Revolution'. Aimed at growth and technological upscaling in agriculture, the revolution failed to address the social and intra-stakeholder relationships. The revolution replaced many older inputs with new ones. Natural/organic manure was replaced by chemical fertilizers. Ploughing by oxen was taken over by tractors. Similarly manual irrigation management was set aside by tubewells and manual harvests by threshers and other machinery. While the scale of wealth of the landowners rose considerably, a substantial number of artisans/farm workers became jobless. In many cases, farm workers were also evicted from their houses as they were no more required by the landowners. A sizable number of such helpless people headed towards the cities for survival. Needless to say that the cities were also not prepared to shoulder this extraordinary burden of population. The large cities, which received the highest proportion of neo-urban dwellers, were most severely burdened. Devoid of any assets, the life style of these people drastically declined due to abject poverty.

Situation in the urban areas had its own set of constraints. Karachi, for example, was already grappling with a huge issue of re-settlement and rehabilitation of refugees that had come from various parts of the subcontinent. They were being housed in certain allocated schemes called as 'displaced peoples townships'. The few of the new urban dwellers who were fortunate to acquire this housing stock were able to stabilise their social and economic status over the period of time. A large majority of people had to resort to squatter settlements. As the state was not able to cope with rising need of housing, it looked the other way upon this informal development of housing. The squatter slums acted as a context for asset building for residential use as well as employment/economic opportunities. Depending upon the locational advantages, pattern of growth and communal orientations, various squatters were able to attain varying degrees of development. At least the phenomena of squatting offered an informal choice for survival.

With the advent of market economy, shrinking capacity of state to regulate negative market practices and reduction of benefits/subsidies towards lower income groups, the possibility of asset building has been greatly reduced for this section of population. For instance, land for housing is the most basic need. Currently available options of land or housing are so expensive that even middle income groups find them beyond their affordability. A parcel of land measuring 80 square yards in a peri-urban locality now costs anywhere between Rs 1.2 million to 1.4 million (with water supply and road connections). An unserviced plot in a planned scheme is now costing Rs 0.6 million to 0.8 million. Land in squatter slums without any legally valid title of the same size costs not less than Rs 0.5 million on an upfront basis. If the buyer wishes to acquire land on installments, the cost increases by 15 per cent to 20 percent. Given the absence of any capacity to generate domestic savings, the low and middle income groups find it impossible to buy even a land parcel of minimum standard size. A basic house structure with bare minimum provisions cannot be constructed in less than 1 million rupees. Thus the package of housing -- which constitutes the most fundamental requirement in life -- remains remote from access.

The possibility of generating any kind of commercial asset for productive purposes is also out of question. Those folks who are self-employed in any trade or service are unable to consolidate or upscale their operations. For instance, if a person is a skilled barber and wishes to open a shop, he is not able to match the rentals and overheads with his expected income. The same applies to plumbers, electricians, vendors, petty shop keepers and the like. The access to space for commerce is simply impossible to get. The outcome of this handicap affects the society in multiple ways. The chances of gainful employment are denied to the needy and deserving users/consumers. They have to pay higher prices for relatively inferior services which gives rise to a fall in the lifestyle. And it also generates social unrest and discontent which periodically erupts in the form of riots and disorders.

The banking sector, which has ample liquidity, has not been able to devise any socially and economically viable option for the vast majority of our population. Whether housing or commercial credit, the conventional conditions do not allow the real needy to benefit from the capitalistic boom. The few windows in micro-credit also have limited sphere of action. Whereas the few political favourites and rent seeker classes have been able to influence decision making in their favour, the vast majority of common people do not benefit from it. Besides, as several developmental approaches are detrimental to natural environment and commonly shared ecological assets, the people dependant on these are further marginalised. Destruction of marine environment and the rising unrest among fisherfolks is a case in point.

If the proponents of market economy intend to promote sustainable growth for their approaches/enterprises, few pre-requisites shall have to be followed. Mechanisms need to be introduced to combat market forces to create a niche for access to essential assets -- land for housing being one of them. Productive capacities of low income groups need to be enhanced to transform them into participating stakeholder groups in market enterprises. This can happen only when the strengths of low income groups are being built upon and their shortcomings are scientifically addressed. It must be understood that economically divided societies never offer a context for sustainable growth and development.

Over a period of five years between 1999-2004, the government of Pakistan spent Rs.1 trillion on poverty reduction. According to the Finance Ministry, Poverty Reduction Special Programme included budgetary and non-budgetary expenditures both by the federal and provincial governments.

Now, the 'Labour Force Survey 2005' (first two quarters) reports that over the last five years, the government has spent a hefty amount of Rs.1332 billion on poverty-related and social sector programmes to help the poor and vulnerable sections of the society. The PRSP expenditures -- budgetary and non-budgetary -- during 2001-05 stood at Rs.1124 billion; the budgetary expenditures averaged 4.1 per cent of the GDP for the period. Of this, the government spent Rs.316.2 billion on pro-poor sectors exceeding the targeted Rs.278 billion by Rs.38 billion. And, by the end of the third quarter of 2005-06, Rs.250 billion had been spent on pro-poor sectors.

Both reports count and boast of gains. For example, the writers of the first report claim that increased pro-poor expenditures appear to have contributed in employment generation. As a result, the unemployment rate that was 8.3 per cent in 2001-02 declined to 7.7 per cent in 2003-2004 and to 6.5 per cent during July- December 2005.

The report claims that since 2003-2004 and till the first half of 2005-2006, 5.82 million jobs were created while the average job creation stood at 1.0-1.2 million per annum. This is quite unfounded and doubtful. One must contend whether it is pro-poor expenditures that helped reduce the unemployment rate or something else: such as de-regulation and liberalisation of the economy. In the same breath, the writers of the report say that the IT sector alone generated 114,737 jobs in 2005-2006. Obviously, the amount spent on deregulation and liberalisation does not come under pro-poor expenditures.

Further evidence strengthens the doubts about the efficacy of pro-poor expenditures in reducing poverty. The report says two sectors, education and health, absorbed half of the pro-poor budgetary expenditures. Sure, how they could generate jobs and reduce unemployment rate to the tune of 1.8 per cent. The gains, according to the report, in education sector are improvement in literacy and enrolment rates; and in that of the health sector is immunisation.

The report also tells about other programmes such as Khushal Pakistan Programme-2 (KPP-2) and Khushal Pakistan Fund (KPF) started during 2005 for poverty alleviation. The KPP-2 is a special programme that aims at initiating small development schemes with an amount of Rs.20 billion to be spent during the current fiscal year under the Public Sector Development Programme (PSDP).

Another boast of the report needs to be checked. The report claims that the percentage of population living below the poverty line, which stood at 34.46 per cent in 2000-2001, declined to 23.9 per cent in 2004-2005. In rural areas it fell to 28.10 per cent from 39.26 per cent while in urban areas from 22.69 per cent to 14.9 per cent. At the same time, it is argued that 'strong economic growth' created employment opportunities. In other words, this implies that high economic growth is a result of pro-poor expenditures.

All this is surrounded by two controversies: i) whether high economic growth trickled down or not; and, ii) whether the number of people living below the poverty line declined or not. Under the circumstances, it may safely be assumed that the relation between poverty reduction expenditures and poverty alleviation gains is not a causal one. With careful research some other factors will be found responsible both for economic growth and poverty reduction. And, surely these factors are de-nationalisation, privatisation, de-regulation and liberalisation of the economy.

Let's look for some other evidence: a report that bases itself on third-party international sources such as IMF, World Bank, world Economic Forum, Global Competitiveness Report, International Country Risk Guide, in its latest edition (Economic Freedom of the World 2006 Annual Report that is actually based on the data for 2004), awards Pakistan the following scores (out of 10; the higher the score the higher the rank and the freer the country economically):

In the area of the size of government (that includes government consumption, transfer and subsidies, government enterprises and investment, and top marginal tax rate), Pakistan's score is both improving and fluctuating: in 2000 it was 6.6; in 2001, 7.3; in 2002, 7.7; in 2003, 7.3; and in 2004, 7.2.

In the area of legal Structure and security of property rights (that includes judicial independence, impartial courts, protection of intellectual property, military interference, and integrity of legal system), Pakistan's overall score is declining: in 2000 it was 4.6; in 2001, 3.4; in 2002, 2.7; in 2003, 2.3; and in 2004, 2.5.

In the area of access to sound money (that includes growth of money supply, inflation variability, recent annual inflation, and freedom to own foreign currency), Pakistan's score is generally on the rise: in 2000 it was 6.5; in 2001, 2002, 2003, 6.8; and in 2004 6.4.

In the area of freedom to exchange with foreigners (that includes taxes on international trade, regulatory trade barriers, size of trade sector, official versus black market exchange rates, and restrictions on capital markets), Pakistan's score is steadily improving: in 2000 it was 4.2; in 2001, 4.7; in 2002 5.9; and in 2003 and 2004, 5.8.

In the area of regulation of credit, labour and business (that includes regulation of credit and labour markets, and regulation of business), Pakistan's score on the whole is improving: in 2000 it was 5.2; in 2001, 5.6; in 2002, 6.0; in 2003, 5.8; and in 2004, 6.5.

This explains the whole economic picture of Pakistan. Every Pakistani with a little economic thinking knows for sure that since the regime of General Ziaul Haq, the government in Pakistan has been on the way to denationalising the nationalised entities, privatise the state enterprise, de-regulate the state monopolisations and liberalise the economic and business activities, though with a heavy heart. Indeed, it is this process that is responsible for the reduction in poverty, not the pro-poor expenditures whether budgetary or non-budgetary. The above scores testify to this opening of Pakistani economy.

A recent research by Goldwater Institute, USA, confirms that states with low-tax and low-spending (Arizona, Colorado, Florida, Georgia, Missouri, Nebraska, Nevada, South Dakota, Tennessee and Texas) enjoyed sizable decreases in poverty rates during the 1990s, while states with high-tax and high-spending (Alaska, California, Delaware, Hawaii, Massachusetts, New Mexico, New York, Rhode Island, Vermont and Wyoming) actually suffered an increase in their levels of poverty. It concludes that decline in poverty in the 'small government' states strongly confirms the hypothesis that reduced taxes and state spending encourage the emigration of people and businesses to areas where private-sector job growth is able to flourish and become a powerful and effective anti-poverty programme. However, while taxes and business climate alone are not the only factors in reducing poverty rates, they certainly help most in the war on poverty.

A few weeks back, President General Pervez Musharraf said that he had a deep desire to help the poor people of Pakistan. He should realise that it is not a Herculean task. What you need to do, first and foremost, is to improve the functioning of the legal structure and security of the property rights; reduce the size of the government; ensure the accessibility of sound money; assure the citizens of Pakistan freedom to exchange with foreigners; and impose minimum of regulations on markets of credit and labour, and business activity.

This will restore to the people of Pakistan that confidence without which they would never be able to pursue their economic ends on their own. In simple words, people need an environment in which they are free to start a business venture, in which their earnings are safe, their property secure, their freedoms taken care of and their choice is not limited. This will bring real prosperity to them which will last for generations.

Ever wonder what is common among Dera Bugti, North Waziristan, Musa Khel, Shangla, Kohistan, South Waziristan and Hangu? One possible answer is that all these districts suffer from some kind of political unrest. The second likely response can be the fact that most of these districts are under the scanner of international attention owing to their alleged links with 'terrorism'. But a joint research carried out in 2003 by the United Nations' World Food Programme and the Sustainable Development Policy Institute (SDPI) found another common element among these districts. The research findings titled, 'Food insecurity in rural Pakistan' ranked the above mentioned districts among the most food insecure areas of the country.

Despite the fact that this report was launched by the federal food minister, it could not get due recognition among official circles because it had not supported the official claims of development and poverty reduction. According to that report, 52 per cent of our rural population was food insecure. Food insecurity leads to a situation where livelihoods are contested. Looking at the alleged accusations of terrorism in these districts, it seems that food insecurity may lead to social disintegration and conflict between those who have and those who don't have. My hypothesis is that lack of distributive justice does result in unrest and it ultimately may force the deprived and the marginalised sections of the society to stand up for their rights.

Let us test the above mentioned hypothesis in the context of the government's claims of record economic growth during the recent years. Trade is thought to be one of the most important indicators of economic development. There is no doubt that percentage share of trade in the Gross Domestic Product (GDP) has increased. During the last six years, it rose from 28 per cent to 34 per cent. Growth in exports and imports is touching its record peaks. Likewise, average GDP growth rate during the six-year period was also quite robust and remained above 5 per cent for three consecutive years. Per capita income too has shot up from $ 503 in 2001 to $ 847 in 2005-06. Certainly, some macro-economic indicators have shown visible improvement. (Whether the achievement happened due to our role in the 'war on terror' or because of the success of our economic policies is entirely a different affair.)

Regardless of what the critics say, the government never wastes any opportunity to take credit for these economic achievements. This in itself may not be a negative thing but the way the official propaganda machine links it with development and poverty reduction is quite worrying. For good or bad, economic growth has become another word for development and poverty reduction in the official jargon. Sometimes these attempts to portray economic growth as a mantra for everything else seem to push all limits of decency and rational thinking. For instance, the official title of Pakistan Poverty Reduction Strategy Paper is 'Accelerating Economic Growth and Reducing Poverty: The Way ahead'.

The fact does not help the government cause at all that most of the economic gains that the government is so proud of has so far failed to benefit all, especially the man on the street. According to the Human Development Report 2006, an annual publication by the United Nations Development Programme (UNDP), Pakistan maintained its track record of being a perennial back bencher. Among the 177 nations ranked by the report, we were put at 134th position, hardly better than our standing during the previous years. In fact, on many counts we fared much worse than even our South Asian neighbours including strife-ridden Sri Lanka and Nepal as well as tiny and reclusive Bhutan.

Though the government is claiming that there has been 10 per cent poverty reduction (from 34 to 24 percent) during the recent years, independent analysts keep contesting the veracity and authenticity of these claims. The government may be able to conjure up some favourable figures on the basis of the innovative definition of poverty it has of late adopted which measures people's economic status in terms of their calory in-take. There, however, hangs a huge question mark on the ability of the official definition of poverty to encompass all dimensions of acute and chronic poverties in Pakistan.

All this is not to suggest that economic growth is something undesirable. The problem arises when economic growth becomes a part of the problem rather than being a part of the solution. To me it happens when economic growth is not accompanied by a corresponding growth in the mechanisms for ensuring distributive justice. Economic growth without fair and equitable governance gives way to rising inequalities. Problem arises when our economic managers perceive that growth will automatically take care of all and everyone through a much praised trickle-down mechanism. This may be theoretically correct but in real lives trickle-down is too slow a phenomenon to create visible difference in the life-time of a generation. People cannot wait indefinitely for the growth to benefit them at some distant point in future. Sooner rather than later, their impatience starts showing in various tensions as conflicts, both at the individual and collective level. The struggle between the Centre and the periphery and political and social unrest resulting from developmental disparities within and among various regions in the country are, but only a few examples of how the failure of the trickle-down theory is straining the very fabric of the society.

One can, therefore, safely assume that the biggest challenge that we face now is the crisis of governance. Even before we start thinking about the next kid on the Asian economic block we need to ensure good governance practices based on accountability, transparency, consultative culture and meritocracy so that we can ensure redistributive justice as a check against the negative consequences of a high but heavily skewed economic growth that favours a few and leaves the multitude to wait patiently for some trickle down to happen. These practices in 'functional' (not merely institutional) democracies have the potential to create conducive environments where affirmative actions for the poor and the marginalised are taken.

Why the lack of governance can be disastrous is not difficult to prove. For one, a disconnect among the makers, implementers and supposed beneficiaries of a policy is a must as a direct result of a week governance. In fact, under poor governance the lack of coordination goes much beyond these three principal actors. It happens among the policy makers themselves as well as among the policy makers and the implementers. It also takes place among various government departments and ministries, among public and private players and between the government and the civil society. This leads to the formulation and implementation of overlapping policies which result in the wastage of already scant and precious financial resources, further isolating the marginalised communities.

We don't need to go far in the search of this policy confusion and the disastrous consequences that it creates. A look at the agriculture sector is enough to prove this point. A radical change has taken place in the composition of our GDP. Three decades ago, the agriculture used to be our mainstay with a negligible share of the services sector. Today the contribution of the services sector in GDP has outweighed the combined contribution of the agriculture and the manufacturing sectors. Agriculture is no more a priority sector for the government. The share of the agriculture in the annual development plan that used to be 2.89 per cent in 1992-93 has gone down to less than half per cent now. Similarly, the public as well as private investment in this sector has declined over the years. To the proponents of economic growth this may make quite a lot of sense. They can argue that the reduction in the agriculture's share in GDP is an expression of the changing nature of the economy which, from being a largely agrarian, rural economy, has recently transformed into one heavily dominated by services as well as industry. But a look at the employment statistics shows that the agriculture sector is still the largest employer. Despite the lack of official interest in the sector, its share in employment is still as high as 43 per cent. Ignoring the agriculture sector under the excuse that its share in GDP is falling and that of the services sector is increasing is like comparing oranges with apples. It is based on a false dichotomy between the agriculture and the services sectors which seeks to develop the latter at the expense of the former. It's no surprise that there is no reduction in unemployment growth rate over the years despite historic GDP growth because the agriculture sector, the biggest employer, is not getting the investment it needs.

And this is just one instance of lack of governance leading to wrong economic priorities and policies. Another victim is the promotion of a consultative culture. Most of the decisions are taken at the will of either an individual or a group of individuals who may have a vested interest in maintaining the status quo.

This status quo strongly favours spending in sectors and areas which create few, if any at all, benefits for people at large. An analysis of the priorities in the public spending shows that only 0.7 per cent and 2.0 per cent of GDP are respectively spent on health and education. The major share of GDP is being spent on military expenditures and debt service (3.4 per cent and 4.5 percent respectively). Composition of our current expenditure reflects that half of it is consumed by defence expenses and and interest payments, 7.9 per cent of it is spent on current subsidies, 14 per cent on general administrative expenses and the rest on development. So, which are the sectors consuming a major chunk of our economic gains (if any)? The answer is simple, the two Ds -- defence and debt-repayment. Colonel rule has taken over colonial rule in our part of the world and in the absence of functional democracy most of the decisions (to borrow and to spend on defence) are historically being taken by a handful of persons who in the process are bound to marginalise the masses. This is one of the reasons that Transparency International rates us among the most corrupt countries and various think tanks declare us as a failed state.

A country with a proven track record of corruption and mal-governance is a heaven for international lenders. International financial institutes find it extremely easy to dictate terms and conditions of their own choosing in the absence of a system of good governance. It comes as no wonder that we are following a policy liberalisation agenda devised and advised by the donors, without enjoying a modicum of national sovereignty.

Understanding how the micro- and macro-levels of economy interact is of vital importance here. Our national policies are made in isolation under the influence of international and regional institutes by selected individuals in a non-consultative manner. These policies often do not take care of peoples' assets, capabilities and activities. In order to preserve their livelihood options, people (including policy implementers) are forced to find loopholes in institutionally shaped policies, sabotaging the policy implementation process. This lack of coherence gives rise to a win-loose situation, devoid of any distributive justice where one's gain happens only when there is someone else's loss.

In scenarios like these, people find themselves in a situation where only few get benefits and those left out are forced to raise voice for their rights. All governments have their own unique ways of dealing with these situations. The current government is also doing its bit in its own way: In order to reduce the number of food insecure people it has embarked on a war on its own people in places like Waziristan, Dera Bugti and Hangu, the most food insecure areas in the country. The strategy may be creating more problems than it is solving but so far it seems to be the only policy that the government has.

How wise do you have to be to make money: as wise as Aristotle or as wise as Bill Gates?

By all accounts, Aristotle never made any money. Bill Gates, on the other hand, is not just the richest man in the world but probably the richest man there has ever been. Who, then, is the wiser man: Aristotle or Bill Gates?

Students of philosophy would say it's no contest and would argue overwhelmingly in favour of Aristotle.

Aristotle (384-322 BC) was born in Stagira, Macedonia. He went to Athens and entered Plato's Academy at 18. He remained there until Plato's death in about 347 BC, when he left Athens to live for five years at Assos in Asia Minor and at Mytilene on the island of Lesbos, working on philosophy and biology.

In 342 BC Aristotle was invited to return to Macedonia to tutor the son of Philip II of Macedonia, the future Alexander the Great. This occupation lasted three or four years. Alexander, one of the greatest military commanders in history, said he owed everything he had achieved to Aristotle's teaching.

Alexander's retreat from India led him through Las Bela and Makran, in Balochistan, while a second division of his army under Crateros traversed the Mula Pass, and a third coasted along the shore under Nearchus. If you go to Makran even today, you could almost swear that the wind still carries echoes of the tramp of Alexander's legions.

After a further period at Stagira, Aristotle returned to Athens in about 335 BC and opened a philosophical school at the Lyceum or Peripatos. On the death of Alexander the Great in 323 BC there was anti-Macedonian feeling in Athens. To avoid the fate of Socrates (who in 399 BC was tried by the Athenian City State for not worshipping the gods whom the State worshipped and was sentenced to death), Aristotle fled to Chalsis on the island of Euboea, leaving the school in the charge of his pupil Theophrastos. He died in 322 BC.

Aristotle's writings comprise works published by Aristotle but now lost, as well as works (perhaps lecture notes) not meant for publication, but which were collected, edited and arranged by others and first made generally available in about 60 BC, more than 250 years after he died.

There was hardly any branch of knowledge to which Aristotle did not make a great contribution. Indeed his theories played a central role in European philosophical discourse for more than 2,000 years and continue to be studied and debated even today. Yet Aristotle died a pauper. The moral of the story, of course, is that worldly riches aren't everything.

But the British writer Richard Adams, author of the 1970s best seller 'Watership Downs', took a somewhat different view when he remarked: "Money is useful to keep the dogs at bay and the water out."

One of the most succinct arguments against giving too much importance to money came from the American boxer George Foreman, of all people. When he won the world heavyweight championship from Joe Frazier in 1973, Foreman said: "Money doesn't help you sleep. Money doesn't help your mother be well...Money don't help an argument when nobody knows what they're arguing about. Money don't help nothing...A man can lose everything, family, all your dreams, and still have a pocketful of money."

The irony is that after retiring from the ring, Foreman went into business and started manufacturing barbeque grills under the brand name 'George Foreman's Bar-B-Q Grill'. They became so popular in America that Foreman sold the brand to a US conglomerate in 2003 for a whopping $ 125 million -- more money than he made in his entire boxing career.

The American economist Edgar R Fiedler was quoted as saying back in 1978: "Once economists were asked 'If you're so smart, why ain't you rich?" Today they're asked 'Now you've proved you ain't so smart, how come you got so rich?'"

Which reminds me of what a Harvard Business School professor once told his class of freshman students. "I can't teach you how to make money," he said. "If I knew how to make money, I'd be out there in the marketplace making it instead of teaching in this stupid school."

In fact, everything high-priced business schools teach their students about business can be summed up in four words: buy cheap, sell expensive.

In a 1973 interview with Playboy magazine, the Nobel Prize-winning American economist Milton Friedman (who died last month) observed: "What kind of society isn't structured on greed? The problem of social organisation is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system."

But American economist John Kenneth Galbraith (ambassador to India in the Kennedy administration) took a different view in his best selling 1958 book 'The Affluent Society' in which he wrote: "The greater the wealth, the thicker will be the dirt."

Australian millionaire Laing Hancock made a pithy comment on the subject of money when he said back in 1977: "The best way to help the poor is not to become one of them."

British journalist George Gale would have vehemently disagreed with Hancock. In an article published in The Spectator in 1980, Gale wrote: "As the worth of money crumbles, so does the worthiness of men. Inflation undoubtedly corrupts." Inflation as a factor in corruption -- now there's a topic for a doctoral thesis!

The late American billionaire J Paul Getty, who knew a thing or two about making money, said: "Money is like manure. You have to spread it around or it smells."

Getty didn't always practice what he preached, however. Notoriously tight-fisted, he had a payphone installed in his country mansion in England for use by weekend guests. That's probably why he was a billionaire. All the money he would otherwise have had to spend paying for phone calls made by his houseguests must have added up to a tidy sum over the years.

C Northcoate Parkinson, who coined the famous Parkinson's Law, said in his 1962 book 'Inlaws and Outlaws': "Expenditure rises to meet income."

But there are some people, and some countries too for that matter, who, for years, have been living not off the interest of income but off the interest of anticipated income. Maybe there should be a separate law for them. "Not having to worry about money is like not having to worry about dying," said American novelist Mario Puzo, author of 'The Godfather'.

"A million today doesn't go very far," said Indian millionaire Nadkishore Ram back in 1979. If that was true in 1979, it's even truer today. Indeed, inflation has eroded the buying power of money to such an extent that some millionaires nowadays actually consider themselves 'poor'. That's why it is said that anyone who lives within his means these days suffers from a lack of imagination.

"Why do they call it a floating pound when all it does is sink?" Indian millionaire oil-tanker owner Ravi Tikkoo asked, somewhat plaintively, in a letter to the London Times in 1975.

This question could also be asked by us, in Pakistan, where the rupee was de-linked from a fixed rate of 9.90 to the dollar in January 1982 and floated against a so-called 'basket of currencies' by the then finance minister Ghulam Ishaq Khan. He called it a 'managed float.' Since then we have seen the rupee sink to as low as 64 to the dollar, before inching back to its current rate of about 60 to the dollar. Any more such 'management', and we can all go home.

Dr Nadeemul Haq is a known economist. He started his career with the Pakistan Institute of Developmental Economics (PIDE), an institution he now heads. He studied at the Atchison College and the Government College in Lahore before going to the London School of Economics.

Dr Nadeem did his doctoral degree in economics from Chicago University, in the United States. He then joined the International Monetary Fund (IMF). For the last 24 years he has been working with the Fund. Now on leave, he is working as the director of PIDE.

The News on Sunday recently had the opportunity to talk to him on a wide range of topics. The interview was interesting in the sense that Nadeemul Haq came up with a number of new theories and ideas regarding economic activity in Pakistan as well as elsewhere. Excerpts follow:

The News on Sunday: You head an organisation, specifically meant for studying development economics. What is meant by developmental economics?

Nadeemul Haq: Development economics is a concept that grew out of economic depression that pervaded in the early years of the 20th century. At that time, Marxist economics was very important (with its strong emphasis on collectivist, statist policies). Also, at that time there was a strong belief in the state's ability to plan and lead the way to prosperity. After World War II, when the developing countries were born, everybody felt that they knew how to run these economies and that prosperity was just round the corner only if they were able to pass their prescriptions on to the government. (This was development economics at its best.) Unfortunately, 50-60 years of development economics have proven that hypothesis to be false. I now think that the subject of development economics is in disarray. Fortunately roughly about 15 years ago Robert Lucas, one of my professors at the Chicago University and a Nobel prize winner, wrote a famous paper on the mechanisms of development. Another famous economist Paul Roma (a classfellow of mine at the same university) wrote another paper related to growth economics. Both these individuals started a whole literature on growth economics. A substantial amount of research has been done in the area in the last 20 years. This literature has taught us a lot about how economic growth takes place in a country. But it is very different from saying how I can make economic growth happen. Economists have studied episodes of economic growth over the last 1000 years to try to learn from those episodes what causes growth and what are the factors that have led to growth.

TNS: When we talk of growth economics, how important is it to develop human capital to achieve that end?

NH: Human capital is key to economic development. Development takes place when you are more productive than your father and your father was more productive than your grandfather. (It means) your child should be more productive than you. The only way it happens is that each succeeding generation is more educated than the previous one. This is the essential point which Robert Lucas made in 1988.

The question is that we have to be very careful in the way the term (human capital) is interpreted in the developing countries. (When we talk about human capital we should not just talk about having) more projects in education. It is not about projects in education. It is rather about the productivity of the individuals. It is about innovativeness of individuals. It is about research. This happens only when a country starts taking research very seriously. Countries like Finland and Sweden have achieved that and that too in a very short span of time.

So it's not just about setting up more universities, colleges and schools. It's about the quality of education, more importantly, the quality of research. It also means what incentives you offer to researchers. But if you take up lower grade researchers and give them grade 20 in universities, you obviously are not doing human capital development. It takes place there where Bill Gates becomes the richest man because his research is the best.

TNS: In countries like Pakistan, it is a huge struggle to make the best brains do research. People who are bright and talented prefer to study and work abroad. How do you think this phenomenon negatively impacts economic development?

NH: Let me put it this way. America is the richest country in the world and is still growing at a very rapid rate because it draws the best brains towards it. Go to any American university and you will find out that not even 50 per cent professors teaching there are Americans. Likewise, go to any hospital in America and you won't find even half of the doctors having been born in America. So, obviously human capital matters for development. Yes, if we keep losing human capital, it is to our detriment.

TNS: One major obstacle in the way of human development in Pakistan is the skewed nature of our economic expenditure. If we keep spending a large portion of our resources on defence, how can we even think of developing our human capital?

NH: I think you are absolutely right. But so long as we continue to live in a conflict-ridden environment, (defence spending) will remain high. But it is not just defence spending that is high in Pakistan, it is the role of the army which is also very visible in the country. The army is into education, it is into business, it is into civil service. It is everywhere. I think this whole situation stems from the fact that we don't have a professional approach to anything in this country. So, we feel that anybody who has any competence can fill in any slot. We have to change the whole culture of the country.

It is not just that defence spending is too high. I think the government is too big in this country. We have to make the government really much smaller.

The other day I saw a World Bank report and in this they were talking about the subject of fisheries and there were about 50 to 60 government organisations that are involved with fisheries in this country. The other day a report in the newspapers shocked me that we now have Pakistan Sporting Rifle Authority in this country. Why do we need an authority for making sporting rifles?

TNS: In Pakistan, distribution of resources among the federating units has always been a problem. In your scheme of things the federal government can never ensure a fair distribution of resources among the provinces. What do you think is the alternative?

NH: Of course it can be done. There are so many ways to consider the situation. It is another area where we can honestly do tons of research and inform the public. We also need to talk to the public explaining to them what these issues are. There are so many federations (in the world) and they have many different ways of distributing the cake. We can discuss all these approaches and see how best we can do it. But this needs an academic and professional environment in which to conduct the debate. We right now do not have it.

The whole issue of federal, provincial and local resource distribution is the one which needs a very serious debate and understanding from around the world. We need to have informed research to allow us to have a happy situation.

TNS: If the government needs to be small, then is it the private sector that needs to be encouraged? Has PIDE done any study on the role and potential of the private sector in Pakistan?

NH: I don't think there have been many studies of that sort. I think such studies are very important and you have made a very good point. But I think the private sector is fairly limited (in Pakistan). I have written a paper, in fact, about the issue. The problem with the private sector is that it has been dominated by the government too much for too long. The government control so much of the market -- for example in agriculture, in fertilizers, in airlines. At the same time, private sector is being created out of government licences. It has not come out of private entrepreneurship so that you invest your money, take some risk and come up with something new. Here private sector is being protected by the government. Therefore, it is not at a stage where the Chinese or the Indian private sectors are, which are far more entrepreneurial (than the private sector in Pakistan). We have to limit the role of the government and have to get the government out of the market.

TNS: There have been a lot of concerns about some private players becoming so strong that they start manipulating the market. For instance, big brokers control stock market in Pakistan for their own benefits...

NH: You are 100 per cent correct. That is why less the government intervention in the market, the less the government can influence it. Even if the government policies are well thought-out and created professionally, there is a chance -- though a small one -- that they influence the market the wrong way. But let us not be suspicious of the market and less suspicious of the government and let us not mix up the two. What is happening right now is that the government is trying to do more development projects than it can do justice with. That's not a good mix.

TNS: What do you think of the government intervention in terms of creating laws which can keep a tab on private sector manipulation, like anti-trust laws in the United States?

NH: The government should intervene, I am all for that. But the person implementing anti-trust laws must know what he is doing. Regulation is a very serious business. Our approach is that we set-up a regulatory body and then look up for any retired person to head it and in most such bodies there are people who never studied regulation. Very few economists are working in these bodies.

Regulator is like the cricket umpire. He must know the game, he must watch it. He only intervenes when it is necessary and never otherwise. To be a good umpire, first I must have played the game for many years.

TNS: But what do you think of the criticism that economic growth must be accompanied by redistributive justice in countries like Pakistan?

NH: When you use the term redistribution, you assume automatically that the government knows exactly how to redistribute the resources. History has shown us the government has always been very bad at redistributing the resources. Why should we assume that a bureaucrat sitting in Islamabad knows better on redistribution of resources. It is the market which is the best mechanism for doing so. I keep asking people whether a businessman knows better than a bureaucrat where to invest money? Let the market decide how to allocate resources. We have the examples of the Soviet Union, communist China and our own nationalisation falling through badly because the government alone called all the shots.

The government is capable of doing something and I am all for that. It should provide law and order, security and justice. But the government should not be in the marketplace. It is a specialisation. I am for pure and clear division of labour.

TNS: One question that should be in the mind of every Pakistani economist worth the title is how to develop our villages. At PIDE, have you developed any model of rural development?

NH: We have developed a lot of models of rural development. But I personally do not like the idea of rural development. The only way for the rural areas to develop is to become towns. I don't understand rural development because what is it that you can do in a village. A village by definition consists of a few houses. The only thing you do is to develop towns.

I think it is also a fallacy that every village should have electricity and roads etc. The point is that no country can do it because it has a huge fiscal cost. We have to be very careful what we mean by rural development. Too often we get carried away by slogans we do not mean much in terms of development. The cost of carrying electricity to a village in the mountains of the Himalayas is enormous. Even in a country like the United States they don't do it. Ideally, what must happen is to increase rural productivity. When you do that then rural areas supply people to urban areas. So it is the urban areas that drag the productivity of everybody. It is our cities, not the rural areas, which need to be developed as they are underdeveloped. Frankly my contention is that Pakistan does not have any real cities.

TNS: Still I would argue that a lot of poverty in Pakistan is concentrated in the rural areas. That's why every government that speaks of some strategy for poverty alleviation also focuses on rural development. How do you view various official policies to alleviate poverty?

NH: The only way poverty can be alleviated is to ensure rapid growth taking place over a number of decades. For instance, if you are the only breadwinner and your children multiply, nobody can guarantee your poverty will be alleviated. If all your family members get employed and your salaries increase by leaps and bounds, your poverty will be eliminated. It is the same story for every country. So, what we must do is to get growth growing, let our economy grow. We may have poverty alleviation programmes at the same time in place but in fact these themselves depend upon the kind of growth that is taking place. Then you have to be careful how to target the poor. Too often poverty alleviation is a huge overhead.

TNS: Are we talking about the much maligned trickle-down effect?

NH: I think people make too much of the trickle-down effect. Such effect only takes place when there are strong markets and economy. When there are no markets and the government is operating the economy, trickle down is slow.

TNS: Some economists argue that economic planning in Pakistan fails because it is highly centralised. They therefore advocate a participatory approach to policy planning which starts at the grassroots level. How do you view this approach?

NH: The only participatory approach I know is the market approach. The best participatory approach is when I am able to do what I want to do. Planning is no longer participatory. It was the approach in 1960s and 1970s. We should not even be thinking about it.

TNS: Your institute must be doing valuable research in various economic fields. Do you think this research is taken into account in policy formulation?

NH: Research is always thinking ahead, looking further out, to develop new ideas. Policy always takes research ideas after much debate and thinking. It is only when an idea is accepted by the market, it becomes ready for policy implementation. I would rather say that research has effected policy. Let's be fair. Unfortunately, due to bad quality of our research and the decreasing number of studies, donors are doing research for us. Yes, it was donors who came up with a solution for the energy crisis that we were facing. It is they who have come up with access to justice as a way to solve problems in the justice system. The government is only following these solutions. So, seen this way research is impacting policy. It is another question whose research. It is a different issue.

TNS: Why has Pakistan failed to produce economists of the stature of Nobel laureate Amartya Sen of India?

NH: There are many reasons for that. The most important is that Pakistan has let its quality of education to dwindle. Today the quality of education is extremely poor in most of the universities. Especially, economics being taught today is fairly outdated. Incentive to excel is not there. Don't forget that we are the only country that does not recognise its Noble prize winner (Dr Abdus Salam). By doing so what message do you send to your children?