Even elites are losing due to ‘untenable’ economic status quo: UK expert

Stefan Dercon, professor of Economic Policy at Oxford University, has said that Pakistan’s economic status quo is ‘untenable’ and even elites are losing because of it. Talking to journalists on Friday, Prof Dercon expressed his views on the “elite bargain” and Pakistan’s economic policies. Discussing the economics of elite bargain, he said low tax collection, high subsidies, low savings, and investments are part of the equilibrium. “Too many unreasonable policy measures regularly led to macroeconomic and fiscal crisis and need for outside support.” He said politics and economic policies needed to be aligned for long-term growth and development. Talking about the requisite steps to achieve this objective, he said there were no shortcuts to building common ground among different organs of the state over economy. “Based on shared recognition, the status quo is untenable and hurts Pakistan, and even the elite is losing now.” According to Prof Dercon, economic policies need to understand political equilibrium. “There should be a set of incentives for the emergence of a better elite bargain for growth and development.”