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Saturday, June 8, 2024

Learning from Asia’s extraordinary policymakers

Regrettably, we have remained bystanders as this epic tale of wealth creation and poverty reduction has played out around us.

My last article was an ode to Mahbub ul Haq. His untimely death at the turn of the century robbed our country of a rare visionary intellect. It also set in motion a damaging decline in ideas and imagination that has since beset economic policymakers in Pakistan.

Had he lived just a few years longer, Mahbub could well have been our Manmohan Singh, the mild-mannered technocrat who, as a surprise Finance Minister in the early 1990s, dismantled India’s notorious License Raj and unleashed an era of rapid private-sector led growth that transformed his country.

Read more: Pakistan: The economic focus

Manmohan was one of a series of remarkable personalities across Asia. This article is about these men and the tremendous good that they did. It was their ambition, courage and perseverance that enabled country after country in our neighbourhood to achieve economic take-off — starting from Japan in the 1950s, Hong Kong, Singapore, South Korea and Taiwan in the 1960s, Indonesia, Malaysia and Thailand in the 1970s, China in the 1980s, India in the 1990s, and, to a lesser extent, Bangladesh and Vietnam more recently.

Regrettably, we have remained bystanders as this epic tale of wealth creation and poverty reduction has played out around us. Nevertheless, one can draw much hope from the remarkable rise of these countries within a single generation. At the start of their journeys, they were among the poorest countries in the world, with their people surviving on subsistence diets on desolate farmlands and their children struggling to even get primary education.

What enabled these Asian nations to ascend to the forefront of the world economy and what can Pakistan learn from them?

The foundational ingredient of Asia’s miracle was a development bargain under which those with power to shape politics, economics and society embraced the primacy of striving for economic development. In particular, the elite gambled on increasing the size of the economic pie. Their nations were emerging either from war or colonial rule and faced serious national security challenges and severe human deprivation. In response, their elite realised that they had no choice but to make rapid growth a priority in order to ensure the survival of their nations and legitimise their own rule. “With the country on the verge of ruin, my conscience would not allow me to remain concerned with the duty of national defense only,” noted General Park Chung Hee at the beginning of South Korea’s take-off.

Once they accepted this bargain, the elite also successfully convinced their people that economic growth was a national effort worth rallying around, sometimes even at the expense of civil liberties. A new social contract centred on economic development captured the popular imagination and galvanised a sense of national purpose. “Poverty is not socialism” and “to get rich is glorious”, declared Deng Xiaoping, arguably the most remarkable man of the 20th century, in brave defiance of the previous mantra of the Gang of Four that it was “better to be poor under socialism than to be rich under capitalism”. Across Asia, breaking the shackles of poverty while elevating the country to a position of respect and power in the global economy rang like a clarion call. This new orientation helped energise and knit together previously polarised and rudderless societies.

To deliver this sustained economic growth, all of these countries enabled strong, devoted and innovative leaders to rise to positions of influence in both government and business. The top leadership bravely provided cover to technocrats, as vividly illustrated in India and Indonesia. Together, they were not afraid to take on vested interests that threatened to block the reform agenda, often through death threats. They realised the critical importance of unleashing private enterprise through deregulation and targeted subsidies. In return for this support, however, the state held to feet of entrepreneurs to the fire by demanding high quality products and exports, and subjecting them to foreign competition. Japan and South Korea were masters of this game.

Asia’s leaders included a diverse cast of characters — technocrats and bureaucrats, politicians and generals, dictators and democrats, capitalists and communists, as well as economists, entrepreneurs and engineers — united by a common objective. Importantly, all of them were convinced that their own success was tied to their country’s economic achievements, and they strove unceasingly towards this goal. These leaders were not as ideological as those of developing nations in Africa and Latin America. Recognising that their poor populations could not support industry on their own, they turned to the international economy and became obsessed with exports and foreign investment. They were also more pragmatic in adapting policies to the needs of their economies. “By nature and experience, we are not enamoured of theories. What we are interested in are real solutions to our problems,” announced Singapore’s first prime minister, Lee Kuan Yew. Crucially, these leaders were incredibly hard-working, dedicated and open to constant experimentation. “Development is a fierce struggle. At home I think about it; in the office I act upon it. Even when I am at leisure, I am always pondering new means and ways,” said Suharto, who had risen to power in Indonesia through a military coup.

At its heart, the story of the Asian miracle is about people and the importance of aligning individual vision with collective endeavour. This is important since theories of economic development ignore the human element, a flaw that Mahbub ul Haq so brilliantly exposed many years ago. Ultimately, economies are shaped not by policies but by the individuals who conceive and design them. Production and exports are only outcomes. They rely on entrepreneurs who take risks and build factories, and ordinary people who spend long hours on the assembly line.

“Our emergence as a major economic powerhouse is an idea whose time has come. Let the whole world hear it loud and clear. We are now wide awake. We shall prevail. We shall overcome,” proclaimed Manmohan Singh in his first address to Parliament. It is this spirit that we must channel. In the final analysis, the Asian odyssey teaches us that to achieve its economic take-off, Pakistan first needs a brave elite bargain and a narrative anchored on economic development that captures the popular imagination. But most of all, it could do with a few good men.

Source: APP