New book considers the impact of economic crises (Dawn (Pakistan))

Adviser to the prime minister Sartaj Aziz, speaking at an event on Saturday attributed Pakistan’s limited economic growth over the years to the inadequacy of the country’s bureaucracy.

While the bureaucrats in South Korea, in the 1960s and 1970s, supported the growth of the private sector, Pakistani bureaucrats were more interested in following the colonial strategy of keeping all powers in their own hands, he said.

Mr Aziz was speaking at the launch of the book, ‘Why Economists Failed to Predict the Crises and How to Avoid the Next One, by Lord Meghnad Desai. Barron Desai is an Indian-born, naturalised British economist and Labour politician.

Mr Aziz highlighted several initiatives taken by Pakistan in the 1960 especially related to establishment of forums such as Economic Coordination Council and Executive Committee of National Economic Council (ECNEC) and others, which facilitated and streamlined the development budget.

He pointed out that all countries face cycles of growth and slumps but it is the governments’ job to borrow money in difficult times and create jobs.

Discussing the global economic situation, Mr Aziz said world foreign currency reserves were still dominated by the dollar and only 20-30 percent of this share has been taken over by the Euro.

However, he added, that new initiatives such as the BRICKS banks, Asian Infrastructure Development Bank, creating a Eurasian zone by Russian and China and other initiatives by China could help create a ‘global currency’.

Discussing the book by Lord Desai, Mr Aziz said that the author’s in-depth review of the Chinese economy was worth a read, as it discusses the reasons for the country’s steady growth.

The book is a detailed study of the global economic crises of 2007-08 and argues that currently recovery is only visible in the United States and a few European countries with most of the Eurozone still struggling to revive its economy.

Lord Desai points out that a global economic crises changes the economic hierarchies of the world.

At the beginning of the 20th century, Argentina was one of the top five economies of the world but is currently not doing so well. Similarly, after the collapse of the USSR many countries which were once rich were no longer so and others such as China and Vietnam emerged as healthy economies, he said at the event.

Lord Desai also said that in today’s changing world, there was no need for four or five global lending agencies such as the IMF and there was a need to develop cooperation among economies of the region.

Regarding China Pakistan Economic Corridor, he said Pakistan should move ahead with it and not let politics come in the way of this venture. Pakistan is a strong country with a large population of young people as well as adequate natural resources. I do not see a reason why it would not progress, he said.