Pakistan: A competition-free zone for the elite

Pakistan’s governing class is fixated on achieving consensus, consistency, and continuity. The mantra of the three Cs is touted as the cure-all for political stability and economic prosperity. This fixation is evident in the much-lauded charter of democracy, which eschews the cut and thrust of debate on political ideas, each representing different interests and ideologies. Similarly, the call for a charter of economy, while not formally adopted by leading political parties, has manifested itself in the form of the Special Investment Facilitation Council (SIFC). The role of this powerful body seems tailored to avoid robust debate on economic objectives that could open up a pandora’s box of diverse perspectives.

Under the auspices of power brokers, the one C that policymakers strenuously endeavor to prevent from making its inconvenient presence felt, is Competition. While in most healthy societies, competition serves as the driving force for progress, motivating individuals and entities to differentiate themselves from others through education and innovation, in Pakistan, it is seen as an alien concept that must be minimized. This institutionalized reluctance to promote competition is reflected in Pakistan’s low ranking of 110 out of 141 countries on the Global Competitiveness Index compiled by the World Economic Forum (WEF) in 2019.

Yet, in the grand tapestry of human civilization, competition is a fundamental pillar upon which democratic societies and dynamic economies are built. Just as different species in nature compete for resources to ensure their survival and evolution, political and economic entities vie for dominance to thrive and progress. The historian Alexis de Tocqueville, in his magnum opus “Democracy in America,” underscored the vital role of political contestation in preserving liberty and preventing the concentration of power in the hands of a few. 

Continuity and consistency of policies that have failed to develop human capital, enrich the economy, and ultimately improve general welfare may be exactly what Pakistan does not need.

- Javed Hassan

The economist Friedrich Hayek, in his classic work “The Road to Serfdom,” elucidated how central planning and the suppression of competition inevitably lead to the erosion of individual freedom and the emergence of despotic regimes. There is a symbiotic relationship between political contestation and economic competition; the absence of one invariably undermines the other, resulting in the concentration of power and resources in the hands of the ruling elite.

Contrary to the notion of unanimity leading to societal harmony and progress, history demonstrates that it is the clash of competing ideas that propels societies forward. It is through beliefs and opinions being subjected to scrutiny and debate that societies sift through falsehoods and embrace truths. Similarly, competing products offered by rival firms being exposed to consumers’ preferences result in better quality and lower prices of goods and services. Competition also serves as a powerful driver of social mobility, providing individuals with the opportunity to rise through the ranks based on merit rather than birthright. The virtues of competition in economics and vibrant political contestation are innumerable and self-evident, bringing about not only economic prosperity but also helping foster individual empowerment and building trust and reciprocity among citizens.

An effective catalyst for increasing competitiveness would be the robust and independent functioning of institutional mechanisms that embed credible electoral accountability. Elected officials are incentivized to deliver results and respond to the needs of their constituents, knowing that their performance will be evaluated at the ballot box. This promotes competition among political parties and candidates for voter support by offering policy proposals and demonstrating responsiveness to public concerns. Citizens can hold their representatives accountable for their actions.

However, accountability needs the underpinning of the rule of law, where the fundamental rights of citizens are protected, contracts are enforced, property rights are respected, and disputes are resolved impartially. These are enshrined in Pakistan’s constitution and should have been the foundation for a thriving competitive society. Instead, as Supreme Court Justice Athar Minallah recently observed, there has been “a normalization of deviance (from the constitution) on the part of the state.” 

Where judicial independence is vulnerable and political plurality restricted, competition in the economic sphere is also curtailed. The Competition Commission of Pakistan (CCP) has struggled to enforce competition legislation to punish market power abuse by dominant players since its formation in October 2007.

In nature, competition among organisms fundamentally influences ecosystems, shaping population dynamics, species interactions, and the distribution of resources. When competition is prevented or significantly reduced, ecosystems lose resilience as they become more homogenized and less able to withstand disturbances or environmental changes. This increases the risk of ecosystem collapse with resultant detrimental effects. Similarly, by refusing to embrace competition as a guiding principle, Pakistan is atrophying the potential of individuals and society. The overall system is becoming less resilient to the changes taking place in an ever-evolving global landscape. Continuity and consistency of policies that have failed to develop human capital, enrich the economy, and ultimately improve general welfare may be exactly what Pakistan does not need.

– Javed Hassan has worked in senior executive positions both in the profit and non-profit sector in Pakistan and internationally. He’s an investment banker by training. Twitter: @javedhassan