Modi’s challenge

In a speech last week in Kerala on the ongoing India-Pakistan spat on Kashmir, Narendra Modi hurled several challenges involving nation building and poverty alleviation at the people of Pakistan. Even though no Pakistani Leader has seen it fit to respond to this challenge, it behooves the people of Pakistan particularly the youth to accept this challenge. It is not only our national imperative and requirement but also critical for redemption of our self esteem and confidence. Pakistanis need to show the world that we have ‘what it takes’ and can beat India even in this contest. Speaking directly to the people of Pakistan Modi had said.

— “I want to tell the people, if you have what it takes, lets compete to end poverty in our countries Lets see who gets there first. People of Pakistan and India will like this competition.”

— “Youth of Pakistan, come let’s fight. Let’s see who ends unemployment first – India or Pakistan”.

— “Let’s fight against illiteracy. New-borns and pregnant mothers die in both India and Pakistan. Let’s see who can save them first”.

In his message to the people of India, he painted Pakistan as the evil empire and threatened it with dire physical consequences and isolation in the comity of nations. He then tempered his message to his compatriots (excluding the Kashmiris, Dalits, Muslims and minorities it seems), with a promise of plenty and justice for the impoverished multitudes, he said:

— “In the 21st century, our goal should be that India should be free from poverty, full of prosperity.”

— “India should aim to be- Free from injustice, and be land of justice, Free from filth and be land of cleanliness, free from corruption, and be land of transparency, free from unemployment and be land of employment”

As pointed out in my article of last week, Modi’s Achilles’ heel (Business Recorder September 29) the contradiction between Modi’s war mongering embedded in the Hindutva agenda and his goal of making India the top three economies of the world is a direct result of Mr Modi’s Jekyll and Hyde personality. This contradiction gives Pakistan the opportunity to beat India in this Race of Nations.

If we the people of Pakistan decide to take on the challenge posed by India, then we must understand where the two countries stand today in this competition and what would be needed to win this race over say the next ten years. First, Modi’s arrogance and overconfidence stems from the fact that India has surged ahead of Pakistan in the last decade primarily due to the massive mis-governance by Asif Zardari’s PPP government and then the three years of Nawaz Sharif’s style of Kleptocratic economic management devoid of an economic reforms agenda.

My earlier articles The gravy trains of Pakistan, The corruption challenge and the Profundity of brain power (all in Business Recorder) have highlighted the issues facing us as Pakistanis. In summary these relate to an emergence of a dysfunctional governance system that is autocratic, corruption ridden and lacking merit in any manner whatsoever. Therefore, if we decide to take on the challenge of Modi we will have to totally revamp the entire governance systems by reforming it and converting it into a highly efficient and optimal system that works for us and that can make us the winners. It is a matter of existence for us and hence there is no option other than success. As a nation we have to rise to the occasion.

At the start of this race, the benchmarks are not very encouraging. In the most recent global competitiveness index 2016-17 World rankings, India is ranked 39th and Pakistan is ranked 83 positions lower at 122. While India has dramatically improved its rankings under Modi, Pakistan has largely deteriorated under the substandard management of Zardari and not recovered under an equally inept Nawaz.

It is clear that the challenges to Pakistan are much larger than the challenges to India but Modi’s current preoccupation with suppressing the Kashmiris and teaching Pakistan a lesson will slow down both India and Pakistan. However, India has much more to lose as a consequence and that provides us a window of opportunity to catch up. Furthermore, our problems are solvable as they are internal and require home grown solutions that don’t need enormous financial resources but instead need large doses of dexterity.

When the goals are ambitiously clear cut and the competition is severe than the system has to operate at its optimal. In this sub-continental national competition, it has to be Pakistan Inc competing against India Inc. When the country functions as a team, leadership plays a pivotal role. It is the leadership that has to put in place the systems needed for success.

Every nation that has featured in the Winners’ Hall of Fame had strong leadership with clear vision and exceptional goals. Adapting from the corporate world, dynamic leaders set national goals, create the national organisations that excel in strategy formulations and create national capabilities for implementation through governance structures and processes that are in line with the strategies. They create systems and capacities for flawless monitoring, transparency, accountability and feedback.

In this globalized world countries and their institutions compete for product and services markets, for finance, for investments, for know-how, for skills and technology. While the private sector is the engine of global competition the government is the great facilitator. The facilitation requires the creation of a competitive environment in which the best of private entrepreneurship can flourish and can compete globally. Countries that are able to establish the environment and governance structures that work become the leaders In the Race of Nations.

Just like in sports competition the team that emerges the winner not only outclasses the others in each area of the game but also plays as a cohesive team to win under superb coaching and management. If Pakistan Inc has to win against India Inc then our leadership comprising the prime minister and his cabinet has to outclass the Indian prime minister and his cabinet in vision, focus, capabilities, innovation and management. The structures we create have to be better than the competition, the governance processes we adopt have to be state of the art and our monitoring and controls have to be second to none. Man for Man our team has to be better. This effort has to be clearly driven by a motivated leader.

In the context of competitiveness of our economy we have to be at par or ahead of India in our rankings of the 12 enablers of global competitiveness (spelled out by the global competitiveness index) comprising the following:

1. Institutions

2. Infrastructure

3. Macroeconomic Stability

4. Health and Primary Education

5. Higher Education and Training

6. Goods Market Efficiency

7. Labor Market Efficiency

8. Financial Market Sophistication

9. Technological Readiness

10. Market Size

11. Business Sophistication

12. Innovation

We have to simultaneously excel in all twelve areas listed abovebut currently most global indicators of our state of development, either of our human capacities or business environments or legal systems, all are at rock bottom. Our financial markets have become the hand maiden of a profligate Government, the goods markets are dominated by cartels and government monopolies, business sophistication is giving way to informality, and innovation is being replaced by stagnation. Yet in the next ten years we have to go from the worst to the best. Other countries have done it and so can we, provided we can build the systems for excellence. But who will create such systems that achieve mastery over these enablers is the missing link.

The Government has failed, Ministries have failed, the multitudes of entities ranging from Board of Investment, to Trade Development Authority of Pakistan, to Privatization Commission, to State Bank of Pakistan, to Securities and Exchange Commission etc, have all shown lackluster performance and lack appetite for reforms. The Panama stricken and distracted Prime Minister along with his cabinet has shown little inclination for a systematic approach to nation building. It is clear if we have to meet Modi’s challenge, the biggest fly in the ointment is lack of visionary and capable leadership.

It is time our elders and the youth of this country quickly address the million dollar question tormenting our minds. In the dysfunctional system prevalent in Pakistan, how in the world, will we get our Lee Kuan Yew, to chart a course for us to be a winner? Our problem of leadership cannot be solved through All Parties Conferences or Charters of Economy or Committees of Parliamentarians. The problem of system failure is colossal. So where do we go from here? Can we find a solution from amongst our current Parliamentarians? Or do we need a new election? In recent history, three models have been employed elsewhere:

1. Election of a reformer in a new election (Margaret Thatcher model)_

2. Induction of a reformer by a political Party (Manmohan Singh induction by Narasimha Rao/Sonia Gandhi)

3. Induction of a reformer by the Establishment (A corrupt Berlusconi midterm replacement by Mario Monti in Italy)

Which route we will take, only time will tell but sooner the better, as we are running out of time in this race. (The writer is a former Finance Minister)