No, it’s not only the economy, stupid!

During the 1992 United States presidential contest Bill Clinton’s campaign team coined the slogan “It’s the economy, stupid!” to emphasize the idea that the economy was the key issue for the electorate in deciding whom to vote for. It’s crucial to recall that this took place within a democratic system, where alternative economic priorities, among various other considerations, were vigorously contested by political opponents.

Recently, in the cacophony of Pakistani politics, the economy here has also taken center stage. Reviving the economy is seen by many pundits and policymakers as the panacea for all the nation’s ills, including national security. Traditional power centers, those keen on maintaining the political status quo, as well as proponents of a technocratic dispensation, seek to develop a consensus on economic issues through the adoption of constructs such as “The Charter of Economy,” “National Security Policy,” “Special Investment Facilitation Council (SIFC),” and “Geo-economics.” These are promoted as alternatives to the seemingly chaotic democratic process of seeking a public mandate to bring about change. Their purpose appears to be to place key economic decisions beyond the realm of supposedly ‘messy’ political discourse and public scrutiny.

While the economy is undoubtedly important, not only is it not the sole determinant of a nation’s health, but it is also dependent on various dimensions that contribute to the vitality of a society beyond economic metrics. A myopically reductionist focus on economic indicators, especially when attempting to separate it from political discourse, obscures the intricate tapestry of factors that collectively shape the well-being of people and the destiny of nations.

Pull-quote: While the economy is undoubtedly important, not only is it not the sole determinant of a nation’s health, but it is also dependent on various dimensions that contribute to the vitality of a society beyond economic metrics. 

- Javed Hassan

To begin with, social cohesion and inclusivity play a pivotal role in shaping a nation. The strength of a society lies not only in its economic prosperity but also in how it nurtures a sense of community and belonging among its citizens. The well-being of a nation can be measured by the level of social trust, the quality of interpersonal relationships, and the inclusivity of its institutions. Concentrating solely on the economy while neglecting these aspects can result in a fragmented society. Disparities widen and social bonds weaken.

Moreover, freedom of expression, assembly, and the nurturing of critical thought are not only vital components of social and political progress but also integral to a dynamic economy. The free exchange of ideas cultivates heterogeneous communities, fostering an environment ripe for creativity and innovation. In this context, Joseph Schumpeter’s concept of “creative destruction” becomes particularly relevant. Democratic processes extend beyond the political arena, allowing for the contestation of prevailing ideas and practices. They also influence entrenched commercial ventures and established institutions. This perpetual challenge compels existing entities within industries and the broader economy to enhance efficiency continually.

Innovation and progress arise from the dismantling of existing structures and the emergence of new, more relevant ones that better address the contemporary needs of society. In a democratic dispensation, unceasing competition acts as a catalyst for new ideas and structures to emerge, and accordingly force reallocation of resources toward their most efficient usage. This dynamic environment not only opens avenues for diverse aspirations but also allows for the harnessing of the best talent.

Pakistan has struggled to achieve sustainable inclusive development. In large part, this has been due to a lack of political stability that only a healthy democracy can ensure. Policymakers need only study the country’s history in order to grasp how deceptive an over-reliance on economic metrics can be for measuring progress. The decade of development in the 1960s came to naught because the period of dictatorship failed to accommodate political aspirations. The attempt to suppress the people’s yearning for representative government led to the rise of militancy in the eastern half of the country. Eventually, this resulted in the creation of Bangladesh. This was not only one of the most painful episodes in Pakistan’s history but also proved that the much-trumpeted development gains of the so-called golden era of the economy could easily reverse if not built on solid democratic foundations.

Today, Pakistan stands out as the sick man of South Asia, lagging behind its regional peers on almost every measure of governance and well-being. The governing institutions lack popular mandate and hence the confidence to undertake the necessary reforms. Policymakers’ attention is diverted from foundational issues that ail the country. There is a misplaced belief that the multiple crises can be addressed through a singular focus on the economy, putting the cart before the horse. As the economist Sakib Sherani recently stated, “No, it’s not only the economy, stupid! Rather than primarily focusing on economic indicators to tackle the perma-crises facing Pakistan and making people’s lives worth living, the governance model has to embrace constitutional democracy, the rule of law, and ensure the representation of every Pakistani. Then there may be a chance that we get the economy right.”

- Javed Hassan is an investment banker who has worked in London, Hong Kong, and Karachi. He tweets as @javedhassan. The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Arab News.