Posts Tagged ‘Development’

Pro-People Policies are Possible in Poor Polities

May 16, 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 geography, i.e., that the U5MR in Bangladesh was always less than that of Pakistan for climatic reasons. Here are the values in 1990 for the three countries in the same order: 138, 126, and 144. They are roughly in the same range with Bangladesh actually being worse than Pakistan.

Is it the case that Bangladesh is a much richer country compared to Pakistan and has been able to allocate its greater wealth to the improvement of the life chances of the majority? Here are the figures for the Gross National Income per capita in 2012 (in US $) for the three counties in the same order: 1260, 1530, 840. Bangladesh is roughly two-thirds as affluent as Pakistan and yet has a U5MR of less than half.

So what is the explanation for the rapid improvement in the survival rate of children in Bangladesh between 1990 and 2012? A scientifically acceptable answer to this question requires a statistical analysis that controls for all the possible factors that might be relevant. Notwithstanding that, it seems reasonable to assert that the difference does not stem from locational advantage or greater affluence. In all likelihood it is related to some variations of policy. That is the rationale for the claim that pro-people policies that make a difference to the lives of the impoverished majority are possible at low levels of income.

Let us look at one such policy without definitively claiming that it is the causative factor in the observed difference. By way of a speculative hypothesis I have selected the percentage of households forced to resort to open-air defecation, i.e., without access to any form of latrine: In 2015, the percentages for Pakistan, India, and Bangladesh were 21, 50, and 1, respectively. Even accounting for the imprecision of such numbers that is a stunning difference. And to ascribe it very clearly to policy it helps to refer to the fact that the corresponding percentage for Bangladesh in 2003 was 42, i.e., in the same league as the other two countries.

I have selected open-air defecation for a reason. It is well known that it leads to fecal transmission of preventable diseases like diarrhea. But diarrhea has other negative health impacts even when it does not kill directly. For example, chronic diarrhea undermines almost entirely the utility of nutrition programs like school meals. Addressing malnourishment requires meeting physiological needs with sufficient calories and nutritional needs with a balanced diet but it is usually forgotten that these work only when the diet is retained. Persistent diarrhea weakens the retention of food leading to death by other causes.

This observation alone should highlight the importance of a sound public health system. It is only when most people are healthy that a curative care system can function. If most people are exposed to systemic causes of disease the curative system would be overwhelmed as it is in Pakistan.

An analogy should make this clear. In a polluted river one would expect unhealthy fish. Taking all the fish out, nourishing them back to good health, and releasing them back in the same river would be an exercise in futility. Yet, that is the very thing we are doing with human beings.

The fact that public health does not seem to be in the news in developed countries is because they have long ago ensured a healthy base by eliminating systemic preventable diseases. What we see now are the incredible advances in curative care. But, as should be obvious, one cannot put the cart before the horse. The explosion in the number of hospitals and hospital-based physicians in Pakistan is yet another example of misplaced priorities.

The essential pillars of sound public health are safe drinking water and sanitation. If we really care for our people that is where we should be directing our attention and resources. Bangladesh has shown that it is possible to do so in a poor country.

References:

http://www.unicef.org/infobycountry/bangladesh_bangladesh_statistics.html

http://www.unicef.org/infobycountry/india_statistics.html

http://www.unicef.org/infobycountry/pakistan_pakistan_statistics.html

http://scroll.in/article/804518/open-defecation-ends-in-bangladesh-almost

http://www.sacosanvi.gov.bd/data/frontImages/Bangladesh_Country_Paper.pdf

This opinion was published in Dawn on 15 May, 2016 and is reproduced here with permission of the author.

For a remarkable piece written almost exclusively in words beginning with the letter ‘p’, see: PPP Prattle

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Privatization and its Conundrums

March 28, 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 between these two extremes, almost all services beyond a minimum scale can be provided equally well by both public and private sectors – ownership matters less than arrangements for management. It might surprise some that the most efficient utilities in the world are in Singapore, all operated by SOEs. The example of airlines itself proves the point – readers can easily look up public and private airlines that are equally successful. In fact, if PIA were to be sold it would most likely be to one of the state-owned Middle East airlines demolishing immediately the argument that an airline cannot be run efficiently by the public sector.

This should bring us to the crux of the issue – it is not that an airline cannot be run efficiently by the state; what is being implied is that it cannot be run by the state in Pakistan. This should immediately raise the question WHY? Why is the Pakistani state unable to run an airline efficiently?

Here one should not be distracted by the argument that has become the implicit rationale for privatization of SOEs in Pakistan – that the public sector is dishonest. This is an invalid basis for deciding how a service is to be provided – one cannot legitimately compare the reality of one sector with the ideal of another. The private sector has an equal share of dishonesty – from the local milkman who mixes water in milk to the shady pharmaceutical companies marketing adulterated drugs, to the global corporations regularly charged with fraud.

This opens up a set of issues. Once the airline is privatized what would be our position on the provision of ancillary services like airport facilities and traffic control and allocation of routes? Wouldn’t these also need to be privatized because otherwise they would remain in incompetent hands and negatively affect the efficiency of the privatized airline?

And if our governments are actually dishonest or incompetent, or both, as alleged, how can we be sure that they would be honest or competent in the process of privatizing a SOE? Isn’t it a fact that almost every attempt at privatization in Pakistan has been dogged by scams? And how wisely would it use the proceeds?

We also know that all services involving human safety need to be regulated. How can we expect a dishonest and incompetent state to regulate efficiently when it is not able to operate efficiently? Wouldn’t powerful private interests subvert the regulatory apparatus to further their interests just as private firms buy out state agents to jigger their electricity bills? Should regulation also be privatized?

We reach a dead end if there are no credible answers to these questions. The logical implications of using the argument of state dishonesty and incompetence for privatization are momentous leading straight to the conclusion, absurd as it might sound, that the state itself ought to be privatized. It would be much more efficient to give the management of Pakistan to the state of Singapore.

Having identified the big question at issue we can return to the relatively minor one of PIA. Airlines operate in a market open to competition and therefore the service can be offered privately without difficulty. Networked services like railways, electricity, gas, and water, on the other hand, are natural monopolies and much more difficult to privatize although examples exist where this has been managed.

At the level of pure theory and in an ideal world, the private sector maximizes profits within a set of externally imposed rules that prevent it from cheating; the public sector maximizes public welfare at least cost in a framework of accountability that prevents it from abuse of power.

Without honest regulation and public accountability neither sector will deliver – we are at best indulging in a second-order debate. Even if PIA is privatized, the state will retain control over huge assets that it would continue to mismanage. The problem that motivated the privatization of PIA will not go away unless we face up to the real conundrum of the incompetent state and do something about it.

This opinion appeared in Dawn on March 27, 2016 and is reproduced here with permission of the authors.

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Taj Mahal and the Planning Commission

March 25, 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 Planning Commission? In addressing these questions both sides have lost sight of the most crucial ingredient in any debate – the context.

I suppose what one would like to see across time is the avoidance of outlandish projects. In the context of its time, that of the age of monarchy, the Taj Mahal was not at all outlandish. In fact, it was quite the norm – from the time of the Pharaohs, kings and emperors built mausoleums for themselves. The only difference as far as the Taj Mahal was concerned was that it was particularly elegant – truly a marvel of aesthetics and architecture.

It is also misleading to say that there was no planning commission in the age of monarchy – the advisory body just assumed different forms. In fact, the caliber of the nauratans in Akbar’s court far exceeded that of those who pass as ministers these days. There is little doubt that emperors sought the guidance of their advisors but it is more relevant to recall that in those times all wealth and property belonged to the monarch who ruled by divine right – the monarch was not answerable to anyone for his or her choices.

Under the norms of monarchy, it was perfectly acceptable to build the Taj Mahal. Ironically, even if a Planning Commission had been present, it would have congratulated itself for approving the construction. Over its lifetime, it has generated far more in tourism revenues than its cost – something a Planning Commission is intended to ensure. Not just that, it has become an iconic symbol of India, making the country known in the farthest corners of the world. The payoff to the project has been huge.

In that light, similar investments in pyramids, cathedrals, mosques, palaces, and forts during the age of monarchy are what constitute the cultural heritage that is a huge draw for modern-day pride and pleasure. To write them off as whimsical is to be both ahistorical and short-sighted.

The above notwithstanding, we have moved on to the era of representative governance in which the wealth of the nation belongs not to the state but to the people to whom the state is accountable. So, contrary to what Khawaja Asif implies, the state is not entitled to build a Taj Mahal today without the consent of the taxpayers.

This is not to say that a Taj Mahal cannot be built in our time. It can, as long as the builder is using his or her own money to do so. For example, Donald Trump can quite lawfully build the Trump Taj Mahal (note the value of the name) in Atlantic City, Ahsanullah Moni can build one in Sonargaon, Mukesh Ambani can build an Antilia in Mumbai, and our own rulers can construct palaces with gold-plated faucets in various places. No one can object except to question the taste and the sources of wealth in some instances.

But the state or representatives of the state cannot make such edifices using the money of taxpayer. In our times, these would be outlandish projects and the Planning Commission is intended to prevent them by keeping the monarchical proclivities of our rulers under control.

And that brings us to the real issue – the fact that under a representative cloak our rulers continue to harbor monarchical tendencies and ambitions. It is very hard for them to submit to the control and accountability of citizens or of institutions designed to act as watchdogs on behalf of citizens.

The fact that the state controls the appointment of officials to such institutions renders the latter ineffectual. The further fact that most officials appointed to such institutions themselves aspire to become part of the darbar puts paid to any remaining institutional effectiveness. Given this contextual reality, there is really no point in having the kind of hobbled and crippled planning commission that we have today.

Dr. Haque is also quite right in his observations about the foreign donors who are supposed to assist with projects in Pakistan. Most of their representatives assume the mentality of colonial governors who know better than the natives what the natives should get. They are just as impatient with watchdog institutions as the native rulers.

In order to keep in check the anachronistic tendencies of our native rulers and foreign benefactors, a planning commission acting on behalf of citizens is essential. However, expecting the one we have to fulfil that function is to be completely unrealistic. What we need is a People’s Planning Commission, a set of experts appointed by civil society, to rigorously evaluate and critique all projects proposed by the state. In our neo-monarchical era citizens have to strive for creative ways to protect their interests.

This opinion appeared in The News on March 25, 2016 and is reproduced here with the author’s permission.

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Depicting Tragedy Humorously: Foreign Aid Without Development

February 7, 2016

By Ishtiaq Ahmed

So Much Aid, So Little Development: Stories from Pakistan
By Samia Altaf
Lahore: ILQA Publication, 2015, 204 pages, Rs. 895

William Shakespeare was the past master of the art of depicting tragedy humorously. That such a skill can be employed by a medical doctor to illustrate something as removed from the world of fiction as the relationship between foreign aid and development in Pakistan, is quite an extra-ordinary achievement. Academic works and technical reports on foreign aid and its impact on third world countries are legion. The very nature of such writings makes them reading-worthy for experts and for students who take courses on that subject. Dr Samia Waheed Altaf’s book can be read almost as a novel or a play, but it is with hard, ugly facts that she puts together a range of stories, which shed light on what goes on from the time a development plan is formulated till it is “implemented” in the field.

The general public relies largely on experts or journalists who ventilate their opinion in the press. On the whole, interested people know that foreign aid achieves little in stimulating genuine development. Billions of foreign aid has poured into Pakistan but poverty, illiteracy, bad health and other such egregious indicators of underdevelopment remain constant and may even have worsened over the years. That corruption permeates throughout our society and the higher you are placed in the bureaucratic and political hierarchy the greater your vantage point to partake in that corruption, including in the misuse of foreign aid, is a commonplace. Then of course there is no dearth of grand conspiracy theories about foreign aid being a devious trap through which alien powers control the destiny of developing and dependent states.

The author shows that the relationship between foreign aid and economic and social development in third world countries in general and Pakistan in particular is much more complex and multifaceted. It needs to be evaluated in the backdrop of the asymmetries of power that exist between the donors and the recipients, the information and knowledge gap and concomitant culture clashes which are attendant in the donor-recipient equation, and in the behaviour of the various structures that mediate development aid in the implementation process. All these different levels have to be included in a holistic framework to understand what goes on. This, the author manages to capture in her very readable book which is rich in vivid descriptions of meetings and visits.

Altaf declares at the outset that her book ‘is about one participant’s understanding of why international development projects fail in Pakistan – and by analogy, why they fail in other developing countries’. She does this by presenting a range of stories from her experience in the delivery process pertaining to the Social Action Plan (SAP) during 1993-2003, when the Government of Pakistan and the World Bank cooperated to provide access to social services, ‘including primary education, with a particular focus on girls; primary health; family planning; the rural water supply; and sanitation – and to improve their coverage and quality’. She does this by presenting a spectrum of stories about the bureaucracies involved in the donor-recipient interaction. She also asserts that her book is about Pakistani women; their vulnerabilities in a society that, despite its rhetoric of inclusion of women in the development process, refuses to accept them as equals. The author was hired on the project as a technical expert by the Government of Pakistan to work on SAP as an external consultant (which means she was not a regular civil servant) to propose incentives to attract more women to work within the rural health delivery system.

I shall present some central characters (whose real names have been changed but who represent actual happenings). From the donor end the typical foreign staff hired by the World is usually narrowly-trained technicians from Europe or the United States who lack an understanding of the social conditions and institutions of a developing country but who arrogate themselves the role of experts and exploit them to the maximum. Lucymemsahib, a Canadian nurse, epitomizes such a character. We find her running away to buy clothes, jewellery, carpets and rugs during her working hours. Not surprisingly Punjabi male bureaucrats are only too pleased to please her. A peculiar blend of sensuality, exaggerated gallantry and colonial mentality place her on a high pedestal as Punjabi men from the higher echelons of the bureaucracy interact with her to discuss different aspects of the development aid. Lower down the order the admiration remains very visible and is represented in great willingness to render small services to her. Interestingly, the author notes that Lucymemsahib does not get the same sort of attention when she visits officers in Khyber-Pakhtunkawa or from men in the streets. She thinks this derives from the fact that in that province because light eyes and fair skins are more common than in Punjab. More substantively, we learn that Lucymemsahib is poorly informed on many matters but has strong opinions which she does not hesitate to express.

Both meet a number of female Pakistani officers as well, educationists, doctors and head nurses.   Some look unapprovingly at the author wearing a sari instead of shalwar kameez since the national narrative has classified it with India and Hindus. She and Lucymemsahib have to listen to self-righteous sermons on the great purpose of creating a separate Muslim state, which with the grace of Allah was bound to succeed as an exemplary Muslim state. The funniest story is about a senior female officer demonstrating pedagogic originality by suddenly displaying an oversized male phallus, which she tells she uses to show women how the condom should be worn properly. It turns out that such demonstration attracts the attention of people around, even peons and clerks, but the lady is oblivious to the excitement her novel method has generated.

Then there is the interaction with the provincial director (PD) of the Provincial Health Department of Punjab on Cooper Road in Lahore. He is an orthopaedic surgeon, who simultaneously continues to be a professor and deputy medical superintendent at one of the government hospitals while me maintains a thriving private practice through various private clinics throughout the city. He tells the author that thousands of female staff would be used to deliver health services in the rural areas. When asked if they would be paid adequate salaries he tells her that they would be volunteers who would be working in their own communities and therefore get the moral satisfaction of doing something for their own people – while he himself draws three government salaries and runs his private practice!

In her extended conversations she realizes that an exhibition of Islamic piety permeates the conduct of the bureaucrats who ‘say things that sound so right but mean nothing’. Some of them blame conservative culture and values as obstructive to education, including family planning. One of them frankly told her that the purdah system is the biggest hindrance to progress and equal rights and status of women. However, the whole system, from top to bottom, is geared to convincing the World Bank to continue pouring in money. One bureaucrat tells her that the dollars are needed to finance the bomb.

All such stories are interspersed with funny remarks of the author, but a limit to such humour ultimately arises when she depicts the sadness and helplessness of young Pakistani women who are part of the SAP implementation chain at the ground level.  She talks to a number of young women vaccinators working in the rural sector. They are given a small to go around and vaccinate children and others in the villages. The social and cultural systems circumscribing their lives are portrayed in sharp relief. Some express the desire to get an education and adopt a career but are told by their families that the proper role of women is to get married and raise families and obey their husbands.

With regard to her own role in SAP we learn that the Punjab bureaucracy reacts harshly to her independent and critical approach, which is treated as intrusive and presumptuous. They make it clear that any intrusion by an outsider like her into their domain is unwelcome. It finally ends with a report which describes Dr Sabiha ‘incapable of handling a task of this magnitude and seriousness’ and recommends that she be ‘relieved of any further  duties related to  the SAP’.

The British man-of-letters, historian, novelist and liberal politician, Horatio Walpole once remarked, ‘life is a comedy to those who think and a tragedy to those who feel’.  Reading Dr Samia Waheed Altaf’s book convinced me that she is battling to maintain some balance between her thinking and her feeling selves. We learn that SAP cost the Government of Pakistan $8 billion, of which $450 million was in loans. She does not categorically say that foreign aid should not be solicited at all by Pakistan, but one is nevertheless led to conclude that such an inference from her book can be drawn. In a way, it is perhaps wiser not to take an absolute stand on it. We do have examples of foreign aid playing a positive role in some sectors. I was thinking of polytechnics which were established with Swedish development aid and some NGOs such as the Human Rights Commission of Pakistan do an excellent job too. But on the whole, foreign aid has failed to deliver development in Pakistan. I do very much hope Dr Altaf’s book will be used in courses on development theory and practice, not only in Pakistan but worldwide.

This review appeared in the January 2016 issue of Herald magazine. Dr. Ishtiaq Ahmed is Professor Emeritus of Political Science, Stockholm University and Honorary Senior Fellow, Institute of South Asian Studies, National University of Singapore. His book, The Punjab Bloodied, Partitioned and Cleansed, (OUP, 2012), won the Best Non-Fiction Book Prize at the 2013 Karachi Literature Festival and the 2013 UBL-Jang Group Best Non-Fiction Book Prize at the Lahore Literary Festival. His latest book is Pakistan: The Garrison State, Origins, Evolution, Consequences (1947-2011), OUP, 2013.

So Much Aid

The book is available online from Readings in Pakistan (at a special price), Buyhatke in India and Amazon elsewhere.

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Just Do It

November 21, 2015

By Anjum Altaf

Let me explain.

Imagine a number of you are in a boat out at sea and a hole opens up in the bottom. If everyone waits for another to do something, everyone will drown. Someone will have to do something for a chance of survival. Right?

Now extend the metaphor to your community or your country where a number of big holes have opened up in the bottom. And there is no one plugging the holes. In fact, there are a lot of people enlarging them instead. All of you are intelligent. What do you see as the likely outcome?

The point I am making is the following. Most societies have their share of activists motivated by all sorts of reasons. Their presence makes it possible for the majority to go on with their day to day engagements confident that even if they do nothing the boat would be taken care of and steered to safety

Pakistan, unfortunately, is not in that happy predicament which is why we cannot afford to be a community of consumers. A sufficient number of us have to take on a more active role to ensure we have the kind of future in which normal lives with friends and families can be lived and enjoyed.

You can, of course, choose the domain of your activism but let me be specific about what I am looking for at this time so as to provide a concrete possibility for consideration.

As some of you know, I have been interested in cities, especially small cities, for a long time (1, 2). There are two major reasons for this interest. First, more than half the world’s population now lives in urban locations and half of that urban population lives in medium and small-sized cities. So, from an economic perspective, small cities should have a major role to play in national development. What exactly is that role?

Second, a significant amount of extremist sentiments is coming out of small cities. So, from a sociological perspective, something is going on there that we need to understand. At this time, small cities are so little studied in South Asia that we cannot even hazard intelligent guesses without doing a lot more investigative work (3).

But what kind of work do we need to do? I realized quite some time back that we cannot follow the traditional modality of top-down studies carried out to publish papers or submit reports to government departments. In Pakistan, these can help one obtain academic promotions or earn consulting fee but they do not lead to any meaningful policy interventions in the small cities themselves.

So, while we have done some work (4), our approach has been very different. We have engaged with residents of small cities to listen to their narratives, we have visited the small cities to understand the context of those narratives, we have identified issues that are common to many of the cities, and we have tried to form an association of small cities that could articulate their needs and demands from a common platform.

At the same time, we hope to create an information and communication exchange that would connect activists in each of these cities so that they could learn from each other and mobilize together. In short, we aim to energize an urban movement from below that would highlight the importance of small cities, articulate their social and developmental needs, and give them political clout by facilitating a collective voice and platform for their residents.

We have completed quite a lot of the essential work and we now have the structure to move to the next stage of linking the residents of the cities in which we have carried out the pilot phase of our work. What we need now is a core set of lead metropolitan activists who would help to trigger the movement in the cities.

As part of the launch apparatus we have two websites (5, 6) that are designed to advance the movement. While I am very pleased that the membership of these sites has continued to grow, I am disappointed that most members have opted for the role of consumers of the type I mentioned at the outset. They passively read what is added to the sites and hopefully add to their knowledge.

But that is not what we expect of them at this stage. We need at least some of the members to be our lead metropolitan activists. So, for example, if we have a member from Jhang we expect that member to identify a few dynamic residents of Jhang, say a student, a college teacher, a lawyer, a labor representative, and a health worker. We expect the member to communicate to this group what we are trying to do, to familiarize them with the instruments we have developed, and to instruct them in how to become active participants in the information exchange as representatives of their cities.

Once the association of small cities becomes reasonably active we can think of hosting a physical get-together so the activists can get to know each other better and decide for themselves where next to take the movement. At that time, we will step back from our pro-active role and just become an advisory body that would provide the technical or research input the association might require for the advocacy of its interests.

This is an ambitious and exciting agenda but without this kind of an inclusive and collective effort we cannot hope to inject some much-needed dynamism in our society. And, for this to happen, we need some people to put up their hands and assume the role of activists for a limited period of time.

I hope you will agree with me that we are not in the position of all being a community of information consumers only. Some of us have to act on that information if we are to ensure the future that we desire.

Hence, this appeal to you to contribute a few volunteers. There are enough of you to take turns so that this does not become overly onerous. In fact, it can become a very exciting opportunity to learn about the economy and sociology of the country to which we belong and to contribute to a positive transformation of its future.

Please identify yourself as a volunteer and get in touch.

References:

  1. What Is Happening in Small Towns? – Original
  2. What Is Happening in Small Towns? – Update
  3. Perspectives on Small Cities: Part 1 and Part 2 – Presentation at Cornell University
  4. Small Cities Initiative: Listen and Learn Phase. – Study
  5. Small Cities Initiative – Facebook Page
  6. Small Cities – Website

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Why Labour Needs Help

February 5, 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 to hazards. There were virtually no mechanisms of redress and no collective bargaining. One outcome of limited incomes was little or no investment in human capital improvement and sustained poverty over generations.

The balance of power among the three key agents – workers, factory owners, and government regulators – was found to be completely one-sided with the latter two holding all the cards and employing a strategy of extensive collusion. This collusion allowed gross violations of all labour laws with various subterfuges and mechanisms, the most egregious being the outsourcing of worker hiring to contractors less subject to the application of laws. This significantly diluted the legal accountability of factory owners.

The situation in the small-scale industry in Sheikhupura could be characterized as a low-level equilibrium trap sustained by a competitive market in which no individual firm by itself could afford to change the terms of engagement with either the workers or the regulators without going out of business. Charitable intentions were not enough to change the plight of workers.

In such a scenario, market forces alone would not prove sufficient to provide a dynamic leading out of the low-level equilibrium trap although escaping the trap would actually be in the long-run interest of both factory owners and workers. The existence of so many people at survival level keeps purchasing power low which negatively impacts the prospects for consumer-driven growth. As a result the development of local industries catering to the demand of the majority of the population is stifled. At the same time there is no incentive or ability to invest in human capital improvements for the future.

The study concluded that only federal action can change market conditions creating a new level playing field forcing all factory owners to equitably comply with higher standards in their own long-term interest. An example of such federal action was witnessed in the American South in the 1960s with the promulgation of the Civil Rights legislation that altered the negative equilibrium resulting from pervasive racial discrimination leading to with win-win outcomes for all stakeholders. Business was forced to act in its long-term interest against its will and contrary to its perceptions of short-term competitive advantage gained by exploiting labour. In retrospect the federal intervention was deemed to be the best thing that happened to American South.

Federal governments in Pakistan have been unable to initiate such legislative action and present trends in South Asia are actually in the opposite direction owing to pressures generated by the forces of globalization to create business-friendly markets.

In such a scenario of weak support, grassroots political mobilization and consumer activism are necessary to advance the cause of labour. In developed countries such initiatives have often succeeded in convincing governments and employers to curb harmful labor practices at home and abroad and they have been lauded for the contribution. Recent public interest litigation in the Punjab on behalf of workers employed in unregistered stone crushing factories and dying of silicosis is a case in point. Such activism illustrates both the need and the possibilities of proactive lobbying on behalf of labour rights in developing countries.

Many innovative policy responses are possible to improve the conditions of labour to spur demand-driven economic growth in Pakistan. In addition to strengthening existing penalties, a new dynamic can be triggered by measures that incentivize companies to voluntarily improve working conditions and standards. A calibrated carrot and stick regime supported by public disclosure and citizen labor boards can yield sustained progress towards greater social justice and workplace democracy.

There are no fundamental reasons that prevent governments from adopting some or all of the measures that could improve the livelihoods of workers. Continued failure to act is contrary to national interest. Governments and citizens committed to economic growth ought not to allow conditions to deteriorate to the point of a demand deficit that can have uncertain outcomes.

Anjum Altaf is the provost at Habib University and was formerly dean of the School of Humanities and Social Sciences at LUMS. This op-ed appeared in Dawn on January 23, 2015 and is reproduced here with the author’s permission. The complete report is available at http://www.theigc.org/wp-content/uploads/2015/01/Altaf-2014-Working-Paper1.pdf

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Mr. Modi

May 4, 2014

It was the late Richard Holbrooke who said: “Suppose elections are free and fair and those elected are racists, fascists, separatists — that is the dilemma.”

That, indeed, is a dilemma. For the Americans, even the election of a remotely anti-American government was a dilemma and they spared little effort in overturning the verdict of electorates whenever such an ugly possibility reared its fearful head.

So, it could have been an occasion of smug satisfaction for the rest when the American electorate voted in Bush except that he inflicted incalculable harm on the world while driving the US deep into the hole.

That highlights the other dilemma – whether those freely and fairly elected are racists, fascists, separatists, or just megalomaniacal fools and simpletons, the damage they end up doing to themselves and others is serious business.

Enter Mr. Modi.

Mr. Modi has not been elected yet but it seems almost all opinion-makers have conceded that he will. If he is, it would force us to come to terms with Richard Holbrooke’s painful dilemma.

No matter what you say about him, Mr. Modi is not a nice man. Indeed, that is part of his attraction. If one is to believe what one is being told, the Indian electorate is tired of nice men and women. It craves the savior who gets things done, no matter what it takes. It wants the train to run on time and if it has to mow down some obstacles in the way, so be it.

Development at any cost is what the electorate wants, a desire that brings together the poor despairing of the promise of democracy, the rich impatient with its constraints, and the young unburdened with a sense of history. Let us use the opportunity provided by democracy to vote in the authoritarianism that would deliver development. Quite akin to the thinking of the Muslim Brotherhood in Egypt, it would seem.

Governance in India has been so abysmal that one can sympathize with the desire for quick development. Except for the fact that almost all serious analyses of the experience of Gujarat call into question the fact of development under Modi and almost none question the lagging indicators of human well-being. (As examples, see the following: http://www.epw.in/insight/have-gujarat-and-bihar-outperformed-rest-india.html and this old post on this blog.) And yet, just repeating the myth often enough has turned into reality for the voters something that has little basis in fact. Yes, Iraq does have weapons of mass destruction because Mr. Bush said so.

The more astounding aspect is that it is not just poorly educated voters who have had the wool pulled over their eyes. Here are two former directors of the World Bank pinning their hopes on Mr. Modi’s “solid record in Gujarat.” For them, even secularism is to be demonstrated via development: “Indeed, the best way to neutralise his critics would be for Mr. Modi to show that secularism thrives, not through public arguments and abuse, but through development. As he has demonstrated in Gujarat, he is serious about making a difference by delivering results, and does not get distracted by playing the blame game.”

Thinking how a myth like this can assume such proportions that it can take in the entire spectrum of voters from the very poor to the very influential brings us face to face with yet another dilemma of modern democracies – campaign finance. We know the Supreme Court in the US has ruled (in Citizens United vs. Federal Election Commission) that corporations cannot be restricted from contributing to electoral campaigns. In India, the failure to limit what parties can spend on general propaganda, as opposed to on individual candidates, essentially means big money can pretty much drive the narrative it wishes to promote.

And that is what it seems to be doing. “One estimate pegs the BJP’s advertising spend across all media including hoardings at a staggering Rs 5,000 crore. That’s just a bit less than the Rs 6,000 crore — roughly $1 billion the Obama campaign spent under all heads in the 2012 US presidential election! Once other expenses are added, the overall BJP budget will exceed that.” (http://www.alterinter.org/spip.php?article4185)

Where is all that money coming from and why? What will it ask for in return? Development, of course – but for whom, and at whose cost?

There will be time enough to answer these questions if the electorate does indeed vote in Mr. Modi. Ironically, democracy in India has survived thus far because of its incredibly fractured polity and a continuation of that pattern might help keep Mr. Modi under check. It would indeed open up a new and unprecedented chapter if the voters overcome those fractures and are swept up behind the myth of Mr. Modi.

That would really bring us face to face with the dilemma of democracy. And it would be left to Indians to work through its consequences given that India is much too big for America to undo the verdict of its voters. Indeed, the Welcome to the US mat is out, dusted, and ready for Mr. Modi.

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Social Services: Asking the Right Questions

August 19, 2013

By Anjum Altaf

It is remarkable that the governments of Pakistan and India have not been able to ensure essential social services for citizens – public health and education are in shambles. As a consequence, ill health and illiteracy mar the lives of millions – a human capital deficiency that diminishes the potential of all. The resources diverted to sustaining an ailing population are no longer available for productive investment.

This is not a far-fetched claim. Think of individuals who have to spend a good part of their income to buy treatment – they would have that much less left to invest in their own nourishment or in their children’s education.

What holds for individuals holds for countries as well. A recent study examines what has been termed the calorie consumption puzzle in India – real rural household incomes and expenditures have risen but malnutrition remains higher than in most sub-Saharan African countries that are poorer and slower growing.

Empirical analysis reveals that rapidly rising expenditures on essentials like health care, education, and transport absorb all the increases in total expenditures leaving money available for food unchanged. And expenditures on non-food essentials are rising because of declining supply of social services by the state – private substitutes being more expensive.

The consequences are visible – over 40 percent of children born in the Subcontinent suffer from stunting.

This gross negligence of the state prompts two questions. The first asks why the state has failed to ensure essential services. Many explanations do the rounds – incompetence, absence of political will, and lack of resources being the most popular. Any serious examination renders these implausible. A simpler explanation is that the provision of services remains a low priority for the state and the absence of effective political action has failed to raise the priority – in effect, ‘don’t ask, don’t get.’ We remain trapped in an equilibrium marked by empty state rhetoric and ineffective political action from or on behalf of citizens.

Take as an example the provision of clean water, something everyone knows is vital for good health and whose self-provision diverts household time and income from more productive uses. For years the state has promised clean water and for years citizens have acquiesced in the status quo.

Those who ignore the first question jump immediately to the second – How could services be better provided? Given the disillusion with the state, the answer almost inevitably is the private sector. The debate then gets hopelessly entangled in the ideological pros and cons of privatization.

Asking who should provide social services is misleading because it is an incomplete question. An example should help grasp the point. We often hear the question ‘What is the best diet?’ Any competent dietitian would caution that the appropriate question is ‘What is the best diet for each unique person?’

The same holds for privatization. The wrong question is ‘Who should provide a particular service?’ The right question is ‘How a service might best be provided under existing conditions?’ It is the context that is central – as it varies, so should the answer.

It is here that we run into a major problem that plagues our public policy – borrowing the ‘best practice’ of the day from the West and expecting the same results free from contextual constraints.

A brief history of the provision of water in London should illustrate the importance of context. Till the end of the 19th century, multiple private companies served various parts of the city. They were nationalized at the beginning of the 20th century and the state assumed responsibility for service provision. Towards the last quarter of the century the service was privatized again.

At the very least, one could conclude that there was no single solution deemed best for all times. Each alternative provided a solution good for the moment but gave rise eventually to issues that could not be resolved within the system itself. There were objective conditions that dictated changes in the modes of service delivery.

Summarizing drastically and emphasizing just one dimension for illustrative purposes, the evolution was as follows: There was local private response to localized heterogeneous demand; inevitably private providers cut corners to maximize profit leading to consumer complaints; the inability to regulate forced the state to take over operations; after an interval, bureaucratic inefficiencies led to deteriorating service, higher tariffs, and investment needs; privatization was the solution to overcome these. The major differences between stages one and three were that private firms had grown into global corporations, technological advances had made effective regulation possible, and the state had developed the competence to regulate the private sector.

We can ask the obvious question: Does the state in Pakistan and India that is unable to provide services itself have the wherewithal or the incentives to regulate effectively a profit-oriented private sector not comprised of angels? If not, would the cure not be worse than the disease?

It is not that there are no solutions; there are just no off-the-shelf ones that can be borrowed readily from other places. The bottom line is that the public needs to demand good service and policy makers need to comprehend the realities on the ground. They need to know the local conditions – social, economic, political, legal – to determine what is likely to work or not and they need to be faced with real consequences for poor performance.

Ideological hopes and preferences are not enough; neither are technological fixes. The political process needs to drive demand, educated analysis is required to respond to it, and accountability is necessary to provide the impetus for improvement. All three are weak at this point.

Anjum Altaf is Dean of the School of Humanities and Social Sciences at the Lahore University of Management Sciences. This op-ed appeared in Dawn on August 18, 2013 and is reproduced here with permission of the author.

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Wanted: A Real People’s Party

July 31, 2013

By Anjum Altaf

It would be hard to find citizens in Pakistan or India who believe their governments really care for the people.

The Nobel laureate, Amartya Sen, has repeatedly termed India a disaster zone in which pockets of California exist amidst a sea of sub-Saharan Africa; where millions of lives are crushed by lack of food, health, education and justice. Sen wants India to “hang its head in shame” contrasting its performance with China where massive investments in health and education in the 1970s laid the foundation for sustained economic growth.

Sen points out that even within South Asia, barring Pakistan, India is at the bottom in terms of social indicators. Bangladesh is doing better with half the per capita income of India.

This juxtaposition of India, Pakistan, Bangladesh and China allows some myths to be laid to rest in explaining this outrageous neglect of people.

First, Pakistan’s social problems are not due to the bogey of over-population. Bangladesh has a similar sized population and China’s is over five times larger.

Second, Pakistan’s problems are not due to its interrupted democracy. India, with uninterrupted democracy since 1947, is socially speaking an embarrassment of colossal proportions with some of the worst human development indicators in the world.

Third, China’s success is not just due to its authoritarianism. Decades of authoritarianism in Pakistan made things worse not better.

Fourth, Pakistan’s problems do not stem from a lack of money. Bangladesh has forged ahead with fewer resources.

What then is the answer and where is the source of optimism for a better future?

Sen believes India suffers from the absence of vision and the political will to implement it. He puts his faith in the middle class and wants to shame it into shedding its indifference to the wretchedness of its fellow citizens. Pointing to the response to the recent rape in Delhi, he believes the middle class can be moved and once it is positive political action would follow.

Many in Pakistan subscribe to the same perspective but this begs a number of questions.

First, how does one explain the lack of vision? Why does China, or Bangladesh for that matter, have a better vision than India and Pakistan? Sen himself expresses befuddlement as to how governments and the middle classes can’t see the economic and ethical costs of not investing in people.

Second, what is the basis for reposing faith in the middle class? Sure, there will always be members of the middle class who would align themselves with the people in the struggle for rights. But would the middle class really be a part of the political vanguard?

The evidence is not convincing by any means. Arundhati Roy seems more on the mark when she observes that the upper and middle classes are seceding from the rest of the country. Her characterization of this secession as vertical and not lateral is particularly evocative – “They’re fighting for the right to merge with the world’s elite somewhere up there in the stratosphere.”

This trenchant observation ties in quite seamlessly with Sen’s characterization of India as pockets of California amid a sea of sub-Saharan Africa. The middle class wants more pockets of California – without load-shedding and low pressure gas supply, with clean water and secure perimeters – and it doesn’t really mind if that comes at the expense of the people. If the latter’s habitats need to be razed for development, so be it.

History seems to validate Arundhati Roy and not Amartya Sen on this count. People have never been given their rights by a benevolent and visionary upper or middle class. On the contrary, people have extracted their rights through protracted struggle with the assistance of committed members of the upper and middle class.

Whether one looks at the French Revolution, where extended dissemination of ideas about human equality, liberty and fraternity paved the way to an end to the rule of privilege, or Brazil today, where citizens are in the streets demanding better services, the lesson is the same – people have to mobilize for effective political action.

It is that kind of a mass movement which changes the orientation of society, realigning it from a vertical patron-client axis to a horizontal one, in which all citizens are politically equal. In fact, it is that kind of movement that transforms a subject into a citizen which could well be considered amongst the most profound transformations in human history.

Only on that foundation of political equality can be built the edifice of representative governance in which representatives are accountable to citizens. Without that equality, governments would revert, in one way or another, into caricatures of the monarchies that they never outgrew.

The transformation from subject to citizen has yet to occur in India and Pakistan where the old privileged elites remain in dynastic control. To some degree, and with all its peculiarities, it has transpired in China with the People’s Revolution and in other countries in East Asia that were forced to undertake extensive land reforms to forestall the threats of popular insurrection.

Sen concedes this reality. In his latest book, An Uncertain Glory: India and its Contradictions, the last chapter is poignantly titled ‘The Need for Impatience.’ And there is a telling quote in the book: “Patience is a minor form of despair, disguised as a virtue.”

It is said that the only photograph in Sen’s study in Cambridge is that of Rabindranath Tagore who named him Amartya. But now, towards the end of his incredible intellectual journey marked by an exemplary gentility, he expresses a grudging admiration for Kazi Nazrul Islam.

Tagore was too patient, he says; Nazrul Islam urged action.

The author is indebted for anecdotes and quotes to Madeleine Bunting’s review of An Uncertain Glory in the Guardian.

Sen and Dreze have held these positions for a considerable length of time. See the reference here to California and sub-Saharan Africa in Ramachandra Guha’s 2007 book.

Sen and Dreze provide a comparative table of human indicators for South Asia and China here. This article is archived in The Best from Elsewhere section of the blog (#80).

For two comments on Sen’s earlier book, The Idea of Justice, see here and here.

Anjum Altaf is Dean of the School of Humanities and Social Sciences at the Lahore University of Management Sciences. This op-ed appeared in Dawn on July 30, 2013 and is reproduced here with permission of the author.

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The Curious Case of Hyderabad Sindh

July 17, 2013

By Anjum Altaf

Peshawar is by no means the busiest airport in the world but compared to Hyderabad it is a monster.

I mentioned in an earlier post (Anchoring Khyber-Pakhtunkhwa Province) that the number of flights per week into Peshawar airport was 79 of which 56 were from the Middle East. I used the information to venture that the KP economy was anchored in the Middle East and that this was not due to the flow of investment into KP but the export of manpower from it.

A reader commented that what I had mentioned for Peshawar was true of every big city in Pakistan. This may well be established and, if so, it would suggest that Pakistan as a whole is a manpower exporting economy – statistics indicate that almost the only positive number in recent years has been remittances from workers overseas.

Still, it is my guess that Peshawar is an outlier amongst cities in Pakistan and that extending the comparison to every city is not warranted. I make my point by referring to the curious case of Hyderabad which in terms of population size is of the same order as Peshawar.

In extending the research to Hyderabad, I was, much to my annoyance, surprised again. I had not expected to find that Hyderabad airport had actually remained inoperative for ten years till 2008 and just this year has been closed to commercial traffic again.

My memory of earlier years recalls flights to Hyderabad from Lahore and Islamabad via Nawabshah but clearly something had changed. This warrants investigation given that in the normal course one would expect more economic integration not less over time.

A number of scenarios could be postulated. First, Hyderabad might really have declined economically over the years and is not any more a viable destination for air traffic. I would be skeptical of this explanation given that there are still flights into smaller cities like Sukkur.

Second, it could be the case that there is real economic demand for service which is not being met for reasons we are unaware of. If so, it would signal a failure of the political process through which the needs of a community are articulated and met.

Third, it could be that Hyderabad can do without air service because of the proximity of Karachi. I am not convinced of this argument which could be made just as plausibly for Peshawar. One could ask why Islamabad airport does not serve the same purpose for Peshawar.

The answer to the last question should be obvious: Enough passengers wish to fly directly to Peshawar which makes the supply of air service a viable proposition. There is clearly not the same magnitude of passenger demand into Hyderabad.

This brings me back to the study of relative labor flows from and to Pakistan that was mentioned in the post on Peshawar. The district-level study summarized its findings as follows: “The general pattern seems to suggest that the less developed districts have high out-migration and low return-migration, whereas the more developed districts… have low out-migration and high return-migration.”

It then highlighted the exceptions: “The only districts that do not fit into this pattern are the less developed districts of Sindh and lower Punjab, which are characterised by both low out- and return-migration.”

The puzzle was that while both the erstwhile NWFP and Sindh were characterized by similar indices of rural poverty, the relative outmigration of labor from the former was much higher than from the latter. One of the joys of research is stumbling upon the unexpected – I realized for myself the importance of the dog that does not bark. While we were focused on studying the causes of migration, the lack of migration from some areas was an equally important phenomenon to explore and explain.

It was my inference at that time that the explanation of the puzzle pertaining to the very different individual responses to rural poverty resided in the nature of the land tenure systems in the two provinces – one tied its labor to the land in much more coercive ways than the other. The why and how of it are fascinating topics to explore but I leave them here to the imagination of the reader.

It was natural to extend this insight to the movement of labor from rural Sindh within Pakistan. The immobility hypothesis explains why, for example, Karachi is the largest Pakhtun and not Sindhi city in the world despite the fact it is located in Sindh and over a 1000 kilometres from Peshawar.

The internal movement of labor in Sindh also threw up an interesting contrast with the Punjab. The ethnic homogeneity in the latter meant that both labor and capital circulated freely between rural and urban locations in the province. The ethnic heterogeneity in Sindh, with rural and urban areas dominated by different groups growing increasingly alienated from each other, meant that the corresponding circulation of labor and capital was much more restricted if not severed altogether.

The deprivation of modernizing capital investments from urban areas had obvious negative implications for the prospects of rural development in Sindh. For our limited hypothesis related to demand for air service, it meant that both international and national flows of labor from rural Sindh were severely constrained.

To some extent, this provides a partial explanation for the curious case of Hyderabad whose airport has remained barely functional over the years. Of course, it highlights a number of larger questions about local variations in political economy and their implications for the nature of economic change that would bear more careful analysis.

Anjum Altaf is Dean of the School of Humanities, Social Sciences and Law at the Lahore University of Management Sciences. This op-ed appeared in Dawn on July 16, 2013 and is reproduced here with permission of the author.

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