Stability without legitimacy?

“Pakistani governments have adopted revenge-seeking habits” — Malaysian PM Dr Mahathir Mohammad said this to the prime minister of Pakistan in early 1997 in a small bilateral meeting in which I was also present.

Dr Mahathir continued: “Changes in governments have become like earthquakes where policies and personnel are frequently turned upside down. Such instability will scare away capital, and people with marketable skills will leave your country. Developing human resources is expensive and time-consuming and Pakistan cannot develop without investment and quality human resources. Governance of a country is a serious responsibility, particularly of a developing country with scarce human and financial resources and instead of arbitrariness, must be guided by a proper code of conduct”.

A similar observation on our governance and advice to abide by the established code of conduct was made by another Asian leader: “Tell me… why has Pakistan not realised its potential?” This question was asked by former prime minister Lee Kuan Yew of Singapore when I presented investment proposals for Pakistan and Singapore to pool their strengths and jointly enter Central Asian markets. As head of the Board of Investment, I used to market investment opportunities in Pakistan to government and business leaders of various countries in Europe, North America and Asia.

While discussions with relevant ministries of Singapore went well about these Joint Venture (JV) proposals, they advised to get the green signal from the former PM who was then working as the senior minister and had the final say on such matters.

I put in a request for a meeting with Lee Kuan Yew and was called to Istana the next day to meet him. I presented these proposals which he must have also been briefed about by his ministries.

But instead of responding to these, he, in his usual blunt style said, “Tell me, why has Pakistan not realised its potential?” Before I could reply, he went on to answer his own question. “In Pakistan, people play politics 365 days of the year. Those in power are always looking over their shoulder to see who might be trying to stab them in the back. And those outside, are always intriguing how to gatecrash into power. In such an environment where no code of conduct is observed, where survival is a constant issue, how can any attention be paid to the country or the wellbeing of people?”

As regards the JV proposals, he regretted saying “When there is continuity in your systems of governance and end of the stab-in-the-back politics, you would be durable partners. Then you don’t have to come to me; I will be in Pakistan wanting to do business with your country”!

Two of the most successful leaders of 20th century Asia tendered the same advice, over a quarter century ago. As subsequent events show, it has all been water over the duck’s back and business as usual has continued. Two of the most important foreign direct investment (FDI) projects addressing Pakistan’s chronic problems — the five-component Keti Bandar Complex and Underground Karachi Mass Transit — fell victim to the same political earthquake and were summarily cancelled without assigning any reason, even after all finances were secured, and work had started on both.

This has become an incorrigible system with fault lines that repeatedly keep pushing Pakistan back, ultimately leading to economic stagnation.

Neither has there been continuity in the system of governance, nor abiding by the code of conduct laid down in the laws and constitution nor has the exodus of educated and skilled people been stopped.

Talking of the critical importance of human resources in the development processes as Dr Mahathir highlighted and as the success of resourceless but high-quality human resources of Japan and Singapore have shown, prioritising education and skill development pays the highest dividend and is more important than the capital and natural resources.

While Cuba spends 12 per cent of its GDP on education, Namibia 10 per cent and Iran 7.0 per cent, Pakistan spends less than 2.0 per cent of its GDP on education which shows that with exploding population growth this pittance on education would ensure that the country is not expected to take off in the foreseeable future.

Let me also share the lesson learned on the importance of an educated and skilled workforce by a well-known revolutionary. In 1979, while at MIT, I had an opportunity to hear Jamaican prime minister Micheal Manley who was a close friend of Cuban leader Fidel Castro.

In the meeting, Manley talked about his interview with Castro in which he asked the latter: If you were to do the Cuban Revolution again, what mistakes you would avoid that you committed last time? Castro replied “We made the mistake of removing most of the experts and skilled workforce of the previous Batista government. This created a huge vacuum and government working and service delivery to people suffered. We realised that recreating that qualified workforce is time-consuming and expensive. If I were to do the revolution again, we would not repeat this mistake.”

On the importance of the code of conduct, Cambridge University Press last year published the Journal of Institutional Economics issue which carried a research study of 72 countries titled ‘Legitimacy of government and governance’.

The study collected data on the legitimacy of governance from 72 countries covering 83 per cent of the world population. It took several variables into account including the consent of the governed, rule of law, equal treatment, accountability, nepotism, peace and absence of conflicts to determine where countries stand on the legitimacy of governance.

The data on the legitimacy of governance of 72 countries shows that while Denmark scores the highest, Pakistan scores the lowest on the legitimacy of governance.

Running any system by flouting human nature cannot succeed. People are rational creatures and driven by self-interest. It is obedience to the code of conduct – the laws and constitution — that forces individuals to align their self-interest with the common good of the community or the country. And gives legitimacy to governance.

After the French Revolution (1789) put an end to the un-representative rule by anybody at painful costs, legitimacy is conferred by the consent of the governed coupled with rule of law to hold the powerful accountable.

Because “Power corrupts” as Lord Action said, “and absolute power corrupts absolutely”. Human nature being what it is, it is accountable governance and legitimacy to rule that provides a check to abuse of power and ends the stab-in-the-back politics that Lee Kuan Yew talked about.

There is a difference between politics and governance. Playing politics with everything and all the time provides fuel to the stab-in-the-back culture and violates the code of conduct which requires obedience to the laws and constitution of the country.

Pakistan must concentrate on improving the legitimacy of its governance from the bottom position among 72 countries to put it on the path of stability and continuity of policies for the peaceful development of the country. Neither of these is possible without legitimacy.

The writer designed the Board of Investment and the First Women Bank. He is the author of ‘Struggle between State & Society’, and can be reached at: smshah@alum.mit.edu