Development / 19.05.2017

By Anjum Altaf I am now less interested in CPEC, which is unstoppable, and more fascinated by how people think. Conventional wisdom has individuals using reason to objectively weigh the costs and benefits of an option and then choosing it if benefits exceed costs. More and more evidence on actual behavior suggests that individuals start with their minds already made up and then pick and choose arguments to support their positions. At this time PML supporters are convinced CPEC is a game-changer while those opposed to the party believe it is a recipe for disaster. The former claim Nawaz Sharif is an astute industrialist and China a trusted friend. The latter argue Nawaz Sharif is corrupt and is using hype to distract attention from his troubles. Supporters are not willing to consider that their party can make bad decisions; opponents are unwilling to concede the the PML...

Development / 05.04.2017

By Anjum Altaf The last shred of doubt regarding the reality of climate change should have been removed by the unnaturally early arrival of the silly season. One warming outcome has seen the hot-air balloon of the Pakistani economy lifting off into the stratosphere without anyone ever noticing what happened. First there was the upward draft in the Wall Street Journal and the Washington Post that removed the veil from the transformation we had failed to observe. Not wanting to leave anything to our blinkered visions, the WSJ blared it all out in one breathless headline: “Pakistan’s Middle Class Soars as Stability Returns: Consumer spending rockets as poverty shrinks, terrorism drops and democracy holds.” Before the excitement could die down and lest a couple of eyebrows be raised, the redoubtable Economist added the gravity of its authoritative voice with an article titled “Pakistan confronts something unfamiliar: optimism”...

Development / 20.03.2017

By Anjum Altaf Is there a fruitful line of inquiry regarding the China Pakistan Economic Corridor (CPEC)? That depends on the questions with which one initiates the inquiry. Would CPEC be a game-changer for Pakistan? This drawing-room question is particularly useless to begin with. With so much uncertainty and so many variables beyond human control no one except a clairvoyant can predict with any confidence. It is just as pointless, if not actually silly, to take sides. Enough hard information is not available for one side to convince the other on the basis of analysis - believers will continue to believe and doubters will continue to doubt for reasons having little to do with the intricacies of the initiative. The following questions pertaining to details of the deal are more useful: Under what conditions are the various components of the initiative being negotiated? What are the financial...

Development / 06.03.2017

By Anjum Altaf A lovely little book came out in 2005 titled On Bullshit. Written by a professor of philosophy at Princeton, it remained a bestseller for months. Its principal message was that “bullshit is a greater enemy of the truth than lies” because “Liars at least acknowledge that it matters what is true.” Bullshitters, on the other hand, convey impressions “without being concerned about whether anything at all is true. They quietly change the rules governing their end of the conversation so that claims about truth and falsity are irrelevant.” I recalled the book after reading two articles within a week talking up the Pakistani economy in the Wall Street Journal and the Washington Post. Both employed the classic bullshitter’s gambit of throwing out random facts to convey a favorable impression without caring in the least whether the inferences were in any way supported by...

Development / 18.01.2017

By Anjum Altaf How does one get a grip on the proposed China-Pakistan Economic Corridor (CPEC) and its associated investments without any hard information except for the hype? In the absence of any mechanism for credible evaluation I suggest we hold it up against a historical parallel and see what emerges by way of tentative conclusions. Some discussion grounded in real experience may be better than taking sides in the dark. Around the turn of the twentieth century the British invested vast sums of money in the part of the subcontinent that now comprises Pakistan. Amongst these investments were the network of canals and barrages, the post and telegraph, and roads and railways. All included it would have likely added up in real terms to be bigger than the $56 billion associated with the CPEC. What came of all that investment and what economic transformations did it sustain?...

Development / 16.05.2016

By Anjum Altaf How much of a useful story can be told with very few numbers? Look at just one indicator of public welfare, the Under-5 Mortality Rate, in Pakistan, India, and Bangladesh: 86, 56, and 41, respectively in 2012. The U5MR, which gives the number of children dying between birth and five years of age per 1,000 live births, is a very useful indicator because it captures the effect of many risks to life that occur during the crucial first five years of life – disease, poverty, malnutrition, etc. What should jump out at the reader is that the 2012 U5MR in Bangladesh is less than half that in Pakistan? Asides from asking how that is possible, this striking statistic should trigger a whole host of related questions. Let us examine a few obvious ones by way of example. Is it the case that this difference is related to...

Development / 03.04.2016

By Anjum Altaf I had proposed a civil society initiative to constitute a People’s Planning Commission as a possible check on wasteful expenditures of public money by the state (Taj Mahal and the Planning Commission, The News, March 25, 2016). The responses received suggest that readers are in agreement with my critique of the existing Planning Commission but skeptical of the recommendation for civil society activism. The reservations extend from questioning the very existence of civil society, to pointing out its fragmentation, to asking whether it has any way of choosing qualified individuals. These are legitimate questions, and given that I believe civil society activism to be virtually the only mechanism for moving forward in Pakistan, the onus of arguing the case is on me. The concept of civil society is simple. Subtract from our universe the spheres of the state and the market along with their associated...

Development / 28.03.2016

By Anjum Altaf and Nadeem ul Haque Should PIA, a State Owned Enterprise (SOE), be privatized or not? It is poorly run, losing a great deal of money, and a drain on the budget. But what does that have to do with PIA being a SOE? Therein lies the real question and some answers to our particular predicament in Pakistan. If one were to line up all potential services with the smallest in scale at one end to the biggest at the other, readers would likely agree that the smallest (say, tea stalls at a railway station) are better provided privately and the largest (say, national defense) by the public sector. The reasons are not hard to fathom – bureaucracies are not good at adapting to rapid changes in market conditions and consumer preferences; markets cannot exclude those unwilling to pay for a service like national defense. In...

Development / 25.03.2016

By Anjum Altaf The Taj Mahal was the nub of the argument in a recent opinion by Dr. Nadeem ul Haque on the Planning Commission (Should we have a planning commission? The News, November 3, 2015). I feel both sides of the argument were misplaced and am elaborating my view in keeping with the exhortation of the author to “let the debate go on.”   Dr. Haque quoted Khawaja Asif as saying that “If there had been a Planning Commission the Taj Mahal would not have been built!” He then retorted by writing: “First, let us tell Khawaja Asif that he is very right. Taj Mahal, an ageing emperor’s whim, should not have been built in any case. The Planning Commission was built to keep such whims in check.” There are two questions at issue: Should the Taj Mahal have been built? And: What is the role of the...

Development / 05.02.2015

By Anjum Altaf It may seem counter-intuitive but if we wish to spur economic growth in Pakistan both government and citizens would have to step in to help labour. This is the surprising conclusion of a study of the local economy carried out by students from the Lahore University of Management Sciences (LUMS) under my supervision. Initial discussions with representatives of several small cities around Lahore identified violations of labor laws as having a significant impact on both the welfare and productivity of industrial workers. As a result, the interactions between labor laws and economic growth were studied in Sheikhupura, a half-million sized industrial city about 30 miles from Lahore. Observations of small scale industry, employing the majority of the industrial labor force, revealed desperate, survival level, working conditions at compensations below the minimum wage. Workers had little or no protection from various forms of exploitation and exposure...