The Case for Equitable Growth

This chapter starts with the claim that Pakistan was able to initiate high economic growth in the 1960s but it could not maintain the momentum contrary to the hope and assessments of some renowned economists and analysts like Rosen-Stein Rodan and Gustav Papanek. The uneven distribution of the growth dividends increased disparities and deprivations. According to Dr. Mahbub Ul Haq, just 22 families amassed most of the benefits of growth. The per capita GDP and human indicators hugely differed between the East Wing (now Bangladesh) and West Wing of the country. The result was socio-political instability and Pakistan was broken. The case is, however, not against economic growth as it is important for prosperity and poverty alleviation. Economic growth expands opportunities and choices for the people. It places revenue at the disposal of the government which it can spend on health and education of the people. And above all, growth gives hope and forges socio-political stability in the society which is a necessary condition for long-term sustainable growth. Pakistan has witnessed a boom-bust pattern of economic growth and since the 1990s, its growth trajectory seems to have plunged downward mainly due to low focus on human capital. Pakistan needs to grow above 7% at least for three decades to achieve the status of a middle-income country. Prioritizing HR development, equitable distribution of productive assets, and quality provision of public goods would be three important areas for maintaining high growth for a longer period of time. Focus on human resource creates a virtuous cycle where economic growth and development complement each other. People support the growth-enhancing policies only if they feel that they are the beneficiaries of growth.