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Free Enterprise System

It is clear from the manifesto of the Pakistan Muslim League that free enterprise has pride of place in future economic planning. The PPP will also almost certainly give support to such a philosophy in its own manifesto (to be announced on Sept 1) though it may be modified somewhat in light of its more socialist penchant for a mixed economy. The thrust of both the major political groupings will be towards a liberalised economy, to continue the move away from the shackles of a public sector dominated version. If past experience is any measure the PML will proceed pell mell with their liberalising drive, the PPP would opt for the same substance but in a more gradualised form. Given that a vast majority of the populace now subscribes to the concept of free economy as is the fashion in the changing Third World, should we completely abandon the checks and balances that protect those of our citizens who are of underdeveloped and backward areas or should our initiatives be more gradual? While maximum weightage has to be given to a liberal economy, given the level of our literacy and the state of our backwardness of the rural areas and inner cities, some element of public sector involvement is necessary.

Merit is at the heart of a free economy system. The meaning of freedom in enterprise is self-explanatory with regard to merit, quality must prevail. The race for ultimate rewards in the field of commerce and industry ensures that there is upward mobility with respect to quality, the better mousetraps will attract the maximum customers. This is the essence of free enterprise, uninhibited competition with success going to whoever can prevail upon his/her competitors on the basis of merit and competitive pricing, whether it be a consumer product, commodity, machinery or even an individual. Centralized economies and public sector control takes the essence of competition out of the system, this cuts into quality. If the State has to produce toothpaste as a monopoly, why should they bother if it should taste like chalk to its citizenry. Without incentive, they have no ambition. In a free enterprise system, toothpaste manufacturers would go bankrupt if the citizens should turn away from their product/s and as such they have to be sensitive to the choice of the masses. Competition is necessary to ensure quality, without competition economies are destined to a socialistic doom. The collapse of COMECON is a living witness to the ineptitude of a system where reward was based on the selective interpretation of loyalty and personal preferences rather than giving preponderance to the qualifications of talent and merit. An interesting analogy in human relationship would be about a family that believes in inter-marriage i.e cousins marry among each other, the end result is degeneration, even the genes need to compete to produce a better product, in this case a human being. How many times have we come across villages full of the retarded because of inter-marriages generation after generation?
Both the political groupings talk about a free enterprise system but cannot get rid of the quota factor in education and government employment that militates against the concept of merit. When we cannot recognize that the merit of an individual should govern his selection and career success, why talk about correcting the economic structure to reflect merit in the form of quality? To support quotas in education and employment and talk about a free enterprise system in the same breath is sheer hypocrisy.

Pakistan is composed mainly of urban and rural population. To protect the interests of the rural population (and some urban areas) which were deemed to be neglected with respect to education and backward with respect to development, a quota system was levied, Constitutional cover being given in 1973 for 20 years during the PPP’s first regime, expiring in 1993. This system of quotas caused great frustration among the urban population and led to naked corruption as individuals got themselves domiciled in such areas that would permit upward mobility without being hampered by quota restrictions. In short, it left a lot of deserving youth by the wayside and allowed those without real merit to come to the top. This particularly affected the Mohajir youth and became the main bone of contention with ethnic Sindhis in Sindh. This was further compounded by the fact that this led to in-built inferiority complex being inculcated among those rewarded by circumstances of the location of their birth on the quota system rather than their merit. The presence of quality in those individuals who somehow managed to come through despite quotas became something to be stamped down upon, to be persecuted rather than rewarded, a cruel Catch-22 that has brought immense frustration and sorrow to the deserving in place of just rewards and deserving plaudits. The quality of our professionalism suffered as much as inter-marriage among cousins, it became retarded. The public sector performance was eroded by a lack of competition, the lack of merit among the individuals who manage the system became all-consuming, a major reason why Pakistan has failed to develop as much as other Asian countries on the Pacific Rim and South East Asia. Can you imagine where Singapore would have been placed today if it had kept to quotas and restricted merit? Malaysia has only managed to progress since it has toned down the “Bumiputra” angle and allowed the more competitive Chinese and South Asians their rightful place under the sun.

We tend to gloss over the reasons why the Pakistan Armed Forces remain a fine institution in contrast to the general state of the rest of the country. The reason is simple, merit has some value here. Among its officer corps merit is generally recognized to be the major factor towards upward mobility. It is true that because of extended periods of military dictatorship, merit faded in the background. The quality of generalship became intermittent and some individuals without professional calibre came into the top ranks because loyalty to the “Chief” was considered more important than loyalty to the Army and country. Some men made Lieutenant Generals on the strength of their tribal connections. For the most part the system remained merit-oriented, talent and performance being rewarded. The quality shows in the efficiency and performance of the Defence Services. This was never so apparent than in the quality of our Air Force pilots, second to none in the world with respect to their professionalism. The net result is that man for man, except for the brief period under Air Chief Marshal Shamim (during the Zia decade) where merit had little value, the general officers were of superior quality than their counterparts in the other Services where for that particular period competence became more likely to be exception rather than the rule. The lack of merit among some in the upper hierarchy meant that they remained nervous about the professionals coming up the ladder, this professional jealousy causing a lot of brilliant careers of the “upwardly mobile” to come to an end. The most frequent weapon used to destroy merit and talent was the classified “intelligence report” that denigrates individuals without a shred of evidence and casts aspersions without giving the individual a chance to defend himself. Whereas talent still remains suspect in the eyes of many, the system within the Armed Forces re-asserted itself after Aug 17, 1988 with quality gradually prevailing our nepotism. Now and then one does see a general officer or two slipping through the checks and balances because of their “connections” but some of them have been caught out in spectacular fashion, fate has its own way of showing up the fraudulent and the fake.

If Pakistan is to progress towards a middle income country by the turn of the century we must do away with the quota system or at least modify it to give maximum weightage to merit while keeping a small quota for the backward and underdeveloped areas of all Provinces. It does not matter whether the affected individual is Sindhi, Baloch, Punjabi, Pathan or Mohajir, the quota system militates against all on a pro-rata basis. Since Ms Benazir Bhutto’s PPP is anchored in interior Sindh for its power base, one does not expect her to make any bold moves against the quota system. One notes with great regret the lack of similar initiative on the part of Nawaz Sharif, who has no such compulsions, to do away/modify quotas. For a man committed to free enterprise not to give pride of place to merit is most surprising. The only reason seems to be that Nawaz Sharif expects a fair amount of votes within interior Sindh and does not want to upset his small but increasing vote bank there. This may be pragmatic politics to an extent, he is forgetting about the Mohajir swing vote in the urban constituencies of Punjab and Sarhad. It shows a lack of will in doing the right thing because of the apprehension of political backlash. What system are the major political groups trying to propagate if they cannot face upto the fact that merit is the real fuel of free enterprise and all systems must begin and end with justice to individuals. If individuals cannot benefit from their deserved merit, free enterprise will remain a paper pipedream and Pakistan will remain backward.

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