Thursday, December 14, 2006

Our Robber Baron Economy

Unlike many members of Pakistan’s so-called elite, your Blogger has not been particularly impressed by the ‘Economic Miracle’ that has been allegedly wrought in Pakistan.

Yes, many of the rich have become much richer – some astronomically so. Most noticeably, however, these new fortunes have not been created by the creation of new industry or by enhancing trade, which could have benefited the country’s overall economy. Instead these billions have been created simply by either manipulating the stock market or speculating in urban property or by grubbily indulging in both.

Recently I was told by a holidaying senior ex-pat banker that a Karachi stock broker who used to wheel around Chundrigar Road on a Honda motorbike some fifteen years ago is now purportedly worth a cool $ 2 billion (please note that I’m talking about dollars and not rupees).

Apart from these unscrupulous stock brokers, we have also had to contend with avaricious holders of black money who have prodigiously speculated on the urban property market. A property, for example, that had declined to Rs. 8 million just prior to 9/11 is currently worth more than Rs. 40 million.

While these rogues wallow in their extraordinary wealth spare a thought for 99% or so Pakistanis who have not profited from this fabulous economic windfall.

Expert opinion holds that there are some 50% of Pakistanis who still happen to live below the poverty line. One has to ignore concocted Ministry of Finance statistics which repeatedly ‘show’ reductions in poverty levels- Dr. Asad Saeed, a highly regarded economist, asserts that the current regime has beaten all its predecessors when it comes to the deliberate fiddling of economic data.


It was therefore heartening to come across someone else also raging about the wrongness of it all. According to The News Akbar Zaidi, a leading local economist, made the following noteworthy remarks while addressing a local gathering :

"The stock exchange should have no place in a developing country like Pakistan. It is not an institution to promote industrialization. In fact, it is more or less a gambling den where the savings of the middle class people are regularly siphoned off."

"No investment had been made in education, health, water and power sectors which could pull the country and its people out of abject misery while more than $20 billion had been received in foreign remittances”

"[The] large fiscal space gained due to 9/11 episode could have been used in enhancing trade and industry activity and creating employment but this money was used by the military regime for plots and stock exchange and to enrich the unscrupulous upper class, which ultimately increased the income gap in Pakistan.… [Now] property values had been pushed out of reach of even the upper middle class."

We need to hear more voices like these.


Brit-Asian said...

On a UK TV talkshow, I once saw an infamous Pak intellectual Ziauddin Sardar assert that 80% of Pakistan is owned by 20 families.

I wonder if you know where one may obtain a list of these?

Anonymous said...

I'm sure some of these were on that list:

Although the 22 families comment was initially made by Mahbub-ul-Haq, I think.

Onlooker said...

That 'infamous Pak intellectual' was right but three decades out of date. It is true that some 80% of Pakistan's economy was owned by 22 families - but that in the 1960s.

Today the richest lot in pakistan are those that are closely engaged with the Establishment. There is money to be made and they are making it, zillions of it.

Unfortunately in 'true' Pakistani style it is a case of ethics and morality be damned, but most of them pray five times a day, keep their fasts and attend taravihs, and regularly do their Haj. But somehow according to their mentality money comes first!

Unfortunately there is no list these days - but senior members of PML (Q) would top the list, along with a few retired and not-so retired generals, bureaucrats and the their usual avaricious businessmen collaborators.

Anonymous said...

Your excellent piece on the stockmarket................

I sent it to a brilliant and honest man in Karachi who had worked there and knows the market and its players well.....Here is his comment "Thanks for the BLOG.

Essential true and scandalous"

Well done...wish the papers were writing and printing such articles.

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