'They appointed Manmohan Singh': Top economist praises India, blasts Pakistan leaders for default crisis

A top Pakistani-American economist has advised Islamabad to appoint competent people like India to avoid the default crisis in the cash-strapped country. He praised India for taking such steps when it was in a similar crisis decades ago. "The most important duty of a political leadership is to appoint competent people and the team at the helm of affairs to deal with the most important issues of the day," Atif Mian, Professor of Economics at Princeton University, said in a panel discussion organised by Brookings Institution.

"But if you are making those decisions, you choose to bring family over competence, if for all important positions, you choose to appoint your brother, your brother-in-law, daughter, and nephews - you can not run a country of 220 million people like that," he said during the discussion with Pakistan's former finance minister Miftah Ismail.

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Pakistan has been involved in tough negotiations to secure a much-needed tranche of $1.1 billion from the International Monetary Fund (IMF) to ward off the specter of default. Its forex reserves have plunged below $3 dollar, the currency has fallen to a record low, and inflation has soared to a 48-year high of 27 per cent. Forex reserves are sufficient only for three weeks of import, pushing the country to the brink of collapse.

Mian also blasted the previous government headed by former Prime Minister Imran Khan for the current debt crisis. He said the responsibility for all the mess was on the hands of the previous government. "Because they also refused to do what was their primary responsibility which again was to appoint competent people in the team who understood the issues, and could speak credibly with the international world so they actually believe in what they say." Instead, he said, for the previous government, the only requirement was - "how boisterous you can be, how good you are in name-calling".

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Mian, who is also the Director of the Julis-Rabinowitz Center at the Princeton School of Public and International Affairs, praised India for appointing competent people during the balance of payments crisis in the 1990s. He said the Indian leadership understood that to turn the country around, in the 1990s, they needed competent people. "Who do they bring in - they bring in people like Manmohan Singh - a very accomplished and respectable person. He did not even share the religion of the main people. They didn't care, they appointed him," he said.

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The professor further said that for appointing people as Reserve Bank Governor, India picked people of the caliber of Raghuram Rajan. "You can't get any better than that," he said, emphasising that this is how countries are turned around. Mian said a similar practice was in Bangladesh, where none of the family members of Sheikh Hasina was in the government. 
"The only country I can think of with this level of incompetency at the top is Sri Lanka," he said, suggesting that incompetent leaders at the helm in Pakistan are the short and long-term cause that pushed the country into the current economic crisis.      
The noted economist also said that Pakistan's debt was much more than the figures often quoted like  $100 billion of debt. "The debt that we have is much more than that. Because debt means the liability you have on your head - those are the fixed liabilities you must pay back because of the obligations that you have and you just don't have enough revenue to pay for those," he said. 

Mian also raised the question of massive subsidies offered by the government and faltering productivity. He said Pakistan has been selling petrol cheaper than the average price in the world. "Despite selling cheaper fuel, why is it that Pakistan still had shortages and power breakdowns? Pakistan has the capacity to produce power but why can't it produce it? The reason is that it can't afford it," the professor said.