More on Pakistan's Economy

Good post today by Nancy Birdsall, Wren Elhai, and Molly Kinder of the Center for Global Development on the challenges of Pakistani political economy:

U.S. policymakers should note well this series of events and remember a simple lesson. Billions of dollars of U.S. assistance-and a sustained diplomatic focus on the reform agenda-have not given the United States the ability to dictate the outcomes of Pakistan's political process. This is inconvenient for the United States, but not surprising. For the United States and for other major donors in Pakistan, money has never brought leverage.

They present some very good options for more effective ways the United States and the international community can use aid to force change. Our question from the other day still stands: what can we do now to promote and support entrepreneurship in Pakistan? Aid only takes you so far (or, in some cases, takes you backwards).

Comments

[Hameed Khan]

It has become increasingly evident that the causes or the link between poverty and terrorism is not linear but is just a manifestation or symptom of a complex problem. In a developed society like Britain, the July 2005 bombings informed us that the attacks were driven not due to poverty or a particular ideology; but due to the identity crisis that a majority of the British Muslims go through.

On the economic front, problems that impede economic growth in Pakistan are also entrenched in the society's general character that leads to tolerance for injustice, lack of accountability and illiteracy to name a few.

While the diagnosis of problems and the resulting strategy may be arguable, entrepreneurship seems to be a viable strategy for economic growth. The external environment is changing with an ever increasing pace in the country. Economic fundamentals are changing and shaking the societal norms; thereby, producing a market driven subtle bottom up change that has started to nudge the feudal and elitist grip on a country of more than 160 million. However, lack of resources, managerial skills and an unfriendly business environment obstruct new business creation and self employment. Thus, there is a need to build capacity among the youth and channelizing their energy in a conducive business environment.