Economic Disparity and sovereignty of a country

70

After the global financial crisis and the Great Recession of 2007-08, egalitarian causes have moved to the centre stage of international economic discourse. Though views of different people contributing to this discourse differ sharply, they all question dominant policies and practices that tend to widen the gap between the rich and the poor. The book named Rich People, Poor Country by Syed Shabbar Zaidi, offers yet another ‘theoretical’ contribution to literature being produced on the subject of income inequality. A major argument that he makes is that “dominant economic philosophies” of the day were developed by the West after the Second World War in order to favour western economies over the rest of the world. These philosophies, according to Zaidi, have resulted in “universal guidelines” for fiscal policies that developing countries must follow in order to partake in the spoils of a Western-led economic system. These guidelines, the author argues, have resulted in low corporate taxes, declining import duties and a smaller government role in running and regulating business, finance and economy in many countries including Pakistan. Coupled with protections offered by offshore tax havens, these policies helped shift wealth from the East to the West. As a result there comes more economic disparity which exactly happened in Pakistan. Within this economic framework, Zaidi points out; consecutive governments in Pakistan have adopted some seriously disastrous policies. He strongly criticises misguided measures that led to the deregulation of the economy and the creation of a “free for all” foreign exchange regime in the post-1990 period. . The state of a nation’s economy is the single most important determinant in its ability to protect itself, to project power and its national security. Pakistan’s economy has remained weak during most political dispensations. The main liabilities are establishment costs, debt servicing, unfavorable ratio between exports and imports, paltry forex reserves and low tax base. There is another threat, somewhat mundane in nature so it does not catch the public’s attention. Yet the reality is that youth unemployment may well pose a bigger risk to our future than all other threats combined. All these monetry disparities can become a threat to the sovereignty of a country and can be avert by introducing polices beneficial for all segments of the society.

Comments are closed.

Subscribe to Newsletter
close-link