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GDP and the quality of life – Newspaper

IT is that time again — the usual boom-and-bust cycle of Pakistan’s endless economic cycle — when we begin to hear increasing murmurs of higher GDP growth. The monks in the power halls of the country zealously sing hymns of ‘high growth’ and ‘stability’, and those who govern us promise dizzying heights for the umpteenth time.

Did past instances of GDP growth solve our pressing matters? Let us contemplate.

Pakistan’s economic growth trajectory contains numerous instances of a high growth rate. In the 21st century, we’ve had several touching six and eight per cent. Between fiscal years 2000 and 2024, the gross national income increased from Rs17 trillion to Rs45tr (State Bank)), respectable by any standard. Additionally, the federal and provincial governments have been expanding their footprint under the guise of ‘welfare’ and enhancing economic growth, estimated to be around 67pc or more of the aggregate economic activity (‘Size of government footprint in the economy’ by Nadeem Haq & Raja Rafi).

In FY00-01, the total expense of the federal government stood at Rs732 billion and 511 million (including transfers to provinces) of which development spending stood at Rs72bn. At the end of the first half of FY2024-25 (December 2024), the total expense had leapfrogged to Rs11tr and 301bn (set to cross Rs17tr by the fiscal year’s end), of which development spending stood at Rs743bn.

Any way you look at it, these are quantum leaps in expenses. Yet, despite all this, we observe something strange going on. The denizens of this country are leaving in droves, even the ones who enjoy a decent quality of life thanks to their wealth. Across the length and breadth of the country, whether in cities or far-flung areas, there is palpable despair and hopelessness, captured aptly by the BASICS Survey led by my senior colleague, Dr Durre Nayab.

Across the length and breadth of the country there is palpable despair and hopelessness.

How does one reconcile all this? To understand this conundrum, it would perhaps be wise to look beyond chosen macro statistics and peer into other, lesser discussed numbers that matter.

How about property rights, a fundamental component of economic growth and human rights, and the justice system that upholds these rights? Both are almost non-existent. Clean air? Cities like Lahore and Peshawar now frequently top the list of the most polluted cities, decreasing the life expectancy of their denizens. Intellectual discourse, freedom of expression and religious tolerance? Non-existent, to the extent that citizens vanish without a trace, minorities fear for their lives, and organised gangs now openly conduct business in the name of blasphemy, murdering citizens and extorting money from their families.

Equal opportunity and a dynamic economy creating jobs? You wish. The level of basic services like water, gas, electricity, sewerage, libraries, etc? Poor and mediocre. Quality of education? Poor, with over 200 universities failing to produce anything that can compete with the top-tier universities around the globe, and all the while being cesspools of politics, intrigues and factionalism.

Security of life and property? The whole country, especially cities, are rife with crime and criminal activity. Even the capital, Islamabad, merely 906 square kilometres, and with 2,200 security cameras, 72 pickets at entry and exit points, 23 mobile cars with cameras, and the Dolphin Squad (besides the regular police and other security presence), is now infested with crime (there were 900 abductions in 2024). And of course, two provinces are in the throes of a full-blown insurgency.

Last, but not the least, any chance of accountability of those who did this to Pakistan and enacting a turnaround for good? Zero.

Before some folks accuse me of ‘spreading negativity’, whether they like it or not, what I have stated here is the reality, and only a small fraction of the circumstances that citizens have to endure every day.

The gist is that merely counting on GDP growth as an end in itself is illogical and counterproductive. Growth brings challenges of its own, which if not handled properly, can become a binding constraint upon our lives, making it more cumbersome and challenging than before, a fact that flies in the face of the ‘paisa phaink, tamasha dekh’ (throw money at a problem and it will be solved) philosophy of our economic managers. The ongoing concretisation of Islamabad at an unprecedented pace via overpasses, underpasses and signal-free corridors serves as an apt example. It is a recipe for environmental disaster (just like Lahore), yet it would register as an increase in GDP in national accounts.

Our economic managers — politicians, bureaucracy and the military establishment — are still stuck in a growth time warp in which there is room for only a single, outdated philosophy: pour more steel, bricks and cement into the ground, and that will do the trick (also called brick-and-mortar growth). They get their fair share in between, but at the expense of the hapless citizens who are left with more bills to foot.

The needed shift involves consideration of quality over quantity. Life and the economic health of a nation are more than taxpayer finance-cemented monstrosities. The GDP can even be, say, 10pc or more, but if citizens still feel insecure and that their life, hard work and contributions have little meaning, and where they are not stakeholders, then all growth would come to naught.

Let me leave you with a stunning remark posted by a resident of Karachi, replying to criticism of why fans did not fill the Karachi cricket stadium for the opening match of the Champions Trophy: “I think people … really have no clue about how bad Karachi has gotten. The constant rejection of the residents of this city comes down to the dire situation of the actual metropolitan area. The road blocks, traffic, crime, generally extreme dissatisfaction, feeling of being forgotten as a city … all this and more makes any entertainment like cricket feel like a circus that people will rather avoid.”

If a resident can understand the dissatisfaction at hand, why can’t those in the high pulpit of governance?

The writer is an economist. His current research focuses upon cost-benefit analysis of foreign funded PSDP projects, economic reforms and the history of economic thought.

shahid.mohmand@gmail.com