A recent online poll voted Asad Umar as the best finance minister. This, IBA Dean Akbar Zaidi said on a Think Fest panel in Lahore (Jan 15, 2023) with former finance minister Miftah Ismail, indicated just how deep our problem is.

According to Miftah Ismail, the economic situation worsened in Pakistan as the IMF reintroduced the conditionalities on its loans. If governments focus on increasing growth, it would automatically increase the current account deficit, so Pakistan is now a no-growth country. The government spent millions on the power sector but the industry could never make a profit because we have a very poor power distribution system. Hence circular debt and the tariffs enforced to make up for that investment had to be paid by consumers through their electricity bills.

Akbar Zaidi said that certain people in Pakistan were not giving up on their privileges and we can’t keep going back to the IMF again and again. This there is no solution and he doesn’t see the economy getting better at all.

Ismail replied that Bangladesh and India were not perfect democracies but they have surpassed Pakistan economically. Pakistan is elite-dominated and this has completely choked economic growth. He said people assume the PTI is the only non-dynastic party but it is actually a monarchy as long as Imran Khan is chairman; he does not have children. Miftah said that the rent-seeking behavior of the elites has made the situation worse. Foreign exchange remittances sent by overseas Pakistanis are higher than the total exports of Pakistan.

Akbar Zaidi recommend that the only solution was to get rid of the elite. For Miftah Ismail, the provinces have become fiefdoms. The federal government should ask the provinces to collect more taxes.

He suggested that the role of the Army in governance needed to decline, which would be the most substantial change we can ask for. Political parties also need modification; parties have become outdated. Miftah Ismail said, people vote with their feet so divide the Punjab up. We need smaller provinces to compete with each other, to establish competition because the Army does not interfere in local bodies or in provincial government. “Right now only one province has a complete monopoly, we need to divide this monopoly.”

He ended the talk by saying that change can only happen through a democratic route so we need political actors who can form coalitions and thus represent segments of society not currently represented in the political leadership.