Political market

THIS story is about a country where the elites completely control politics and the economy. The elites are disproportionately overrepresented in parliament as money literally buys votes. The elites also dominate the economy as even though they are less than 0.5 per cent of the population, they hold almost 30pc of all private wealth. Predictably, this country is the poorest place in the wider region forcing many of its young to emigrate to greener pastures. In case you are wondering, this is the story of Sweden before 1921. Sweden has come a long way from being a poor country to now dominating the top positions of the Global Human Development Index. How can Pakistan follow suit? A lot of people seem to think that the answer lies in consistent economic growth. In a recent report, the World Bank looked at how Pakistan can achieve higher and sustained economic growth. Pakistan’s economic growth, the report points out, is held back by the inability to allocate resources to most productive uses. This inability is driven by various “distortions” that are introduced by policy decisions, or left unaddressed by them. One such distortion is high import duties that make firms that only sell domestically as opposed to exporting, more profitable. Specifically, every 10pc increase in import duty increases profits of firms that only sell domestically by 40pc.