Academic journal article Harvard International Review
The Harvard International Review is to be commended for interviewing Pakistan's Finance Minister, as the country's economical and societal issues are generally under-reported in the media. However, non-specific questions, and statements of the Minister that were left unchallenged allowed him to present an impressive, yet inaccurate and one-sided spin on Pakistan's economy and the plans of his government.
Abdul Hafeez Shaikh is a capable and qualified technocrat, and there is much good sense in his prescriptions for more spending on education and training, and reform of the popular but inefficient and unaffordable program of targeted subsidies. Yet his account of Pakistan's economic challenges wholly obscures the three obstacles that most impede its development.
The first such obstacle is state effectiveness. Mr Shaikh alludes to low tax revenues and inefficient public sector, but then goes on to promise higher revenues and more efficiency with no credible outline of how this is to be achieved. Counting all levels of government, Pakistan's tax revenues amount to a mere 10% of GDP. As the political scientist Anatol Lieven has shown, most Pakistanis prefer to rely on kinship networks and informal economic structures, such as money-lenders, rather than the state. There are many areas to which the rule of law and revenue collection simply does not extend. Mr Shaikh's plans for greater enforcement appear overly optimistic.
Secondly, and most crucially, Mr Shaikh makes no mention of Pakistan's military. …