How to run the economy (for dummies)

Published: March 7, 2011
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One legislator said eating less sugar would help the sugar crisis.

Anyone can run the economy. Ask any lawmaker and he’ll point out exactly what is wrong with the economy, what is needed to fix it and what conspiracy has prevented a solution from being implemented.

But the economy is still alive and kicking and the country has not defaulted on its sovereign debt just yet.

The following is a collection of ‘winning’ arguments that have been presented by legislators.

It is important to note here that even monkeys have been known to run an economy quite efficiently. I’m sure we can do better.

Here’s what they said:

1. Eat less sugar – A legislator implored Pakistanis to reduce their consumption of sugar to decrease the price of the commodity and hence contribute to decreasing inflation.

He must be applauded for remembering that prices may decrease following either an increase in supply or a decrease in demand.

Convincing people to eat less sugar instead of dismantling a cartel is, by far, the easier and a more ethically correct option. Unlike a few of his colleagues, this legislator was not afraid of suggesting an unpopular measure either

2. Drink less tea – An extension of the above argument is as follows: Pakistan imports roughly Rs1.5 billion of tea per month. Therefore, if Pakistanis could cut down on their tea consumption, or grow and brew their tea in their backyard (for those lucky enough to have one), the country could save billions of rupees of foreign exchange every year.

That will lead to less reliance of foreign aid and give countries such as the US less of an opportunity to carry out their nefarious schemes on our territory. An added benefit is that drinking less tea will automatically decrease the consumption of sugar.

3. Interest-free weekends – In what can only be described as a Newtonian moment of epiphany, a notable businessman once asserted that banks should not be allowed to charge interest for days on which the country’s industry is shut down.

This would include weekends, public holidays, labour union strikes, city-wide or country-wise riots and electricity and gas outages.

In effect, interest rate payments should be halved. Apart from reducing the burden of interest payments on industry and spurring investment, the economy will be riba-free for close to half a year.

Thus, this proposal is supposed to finally unite businessmen, right-wing mullahs, labour unions and most legislators as they nobly sacrifice reason for morality.

4. Print more money – What could possibly go wrong with this? Economists have unanimously agreed that printing money is the easiest way to get rid of a deficit and keep the government from the edge of bankruptcy.

They have also agreed that printing money works a bit like cocaine; it snaps an economy from depression and causes feelings of false confidence. Eventually, the economy descends into anxiety and paranoia.  With sustained use or due to an overdose, the economy may suffer from convulsions, tremors and may be possibly life-threatening.

5. Long march – With a former prime minister and well-established businessman advocating a long march (destination: unknown) to cure the economy of its ailments, I consider myself too uninformed and inexperienced to understand the rationale behind such a measure.

According to my uneducated guess, the long march may lead to a rise in roadside begging and spur economic activity in the informal sector, which may in leak into the documented economy.

While reviewing the previous line, I discovered the ludicrousness of our argument and have decided that politicians/businessmen know best.

Having been through three wars, one fracture, countless military coups, botched democracies and statements such as the ones presented, the Pakistani economy has been remarkably resilient.

ozair.ali

Ozair Ali

A graduate of the Wharton School of Business who is interested in psychology and economics.

The views expressed by the writer and the reader comments do not necessarily reflect the views and policies of The Express Tribune.

  • http://tightdhoti.wordpress.com TightDhoti

    Actually we have defaulted on many sovereign debts, its just that we only consider defaulting to the IMF, WB or ADB as a serious default. Defaulting on the scores of government borrowing from local and international banks, oil payments etc, doesn’t get much coverage. Then again, if our legislators want to count that up as a success and no one is going to question them, then well more power to them. Recommend

  • Ali

    I like the long march idea. Perhaps we can set Nawaz Sharif and company off on a march to Timbaktu. (If Zardari and all the rest of our politicians could join them, so much the better). With a bit of luck he might get lost on the way or end up in the middle of a war zone!Recommend

  • sumaiya

    lol..nicely doneRecommend

  • John

    I have heard all in my life. The most ingenious is the “Interest free weekends”. Very creative.

    Long March.? Still trying to figure it out!Recommend

  • Ahmad Ali Latif

    Its written well but i would disagree on printing more money, i don’t know which economists you refer to but printing more money will cause more devaluation in the strength of currency, create inflation and risk of less backing but gold/foreign reserve for the currency in circulation.

    I would seriously suggest taxing the route for NATO supplies. Roads are constructed by the sweat of our countrymen and the revenue from tax collection, free passage for others doesn’t sit well with me.Recommend

  • Kashif

    @ Ali….excellent ideaRecommend

  • John

    @Ahmad Ali Latif:
    $10 billion / year is being given for NATO trucks passage plus military expenses. The money for infra structure projects for roads and others comes separately from US defense expenses plus Kerry-Lugar bill. All transit routes are being paid for. Nothing free, just in case you want to know.Recommend

  • parvez

    Entertaining stuff.
    If Getz Pharma could come up with a super “HONESTY” vaccine and this be administered
    to all politicians, government servants, the armed forces and law enforcers, our economy would do pretty well.Recommend

  • Ahmad Ali Latif

    @John:
    First off the 10 billion is not yearly, its the cumulative amount since early 2000s. Infrastructure projects are not under NATO passage of way. Further the KL bill you are referring to was based on something else, i have referred to NATO only.
    Coming to the financial impact the total amount till now over compensates for the opportunity cost of the passage.
    Since you are willing to provide justification, would you care to shed light on the civilian kills by drones?
    Further, Col Dave has said that there are alternative routes available, but since 2000 they found none except the currently used; Torkham.Recommend

  • John

    @Ahmad Ali Latif:
    Drone deaths of civilians are regrettable. It is up to PAK -US Govt to work it out. With regard to Money being spent. 10 billion should be read as For Yearly expenses, typo error. What Musharraf told is what quoted . He claimed 5 billion for military personnel alone. NATO passage, over flight rights, base rights and all those along with it are all covered. Besides KL bill discretionary money for infra structures are extra money given. Please check the accessories used by the Govt personnel. They are all non-cash transfers. PAK military
    non-personnel expenses extra.Recommend

  • Dilip (South Africa)

    @Parvez
    Wow!!!! The “Honesty” vaccine can be administered via the JOHNY WALKER bottles. Recommend