New Delhi, Feb 15 (NationPress) The economy of Pakistan cannot be remedied without addressing the political landscape first, as a government plagued by corruption obstructs economic progress, according to a report in the Pakistani press.

An economic framework is inherently a reflection of the political ecosystem. The political structure supersedes all other sub-systems; thus, any dysfunction there has repercussions on all elements. The deteriorating economic situation cannot be seen in isolation from the political economy. It is a manifestation of the political structure, designed to facilitate extraction and rent-seeking, the report notes. The two are inextricably linked, as highlighted by Sakib Sherani in the prominent daily Dawn.

"Any organization, whether an elite institution or a panel of experts, discussing 'significant' economic reform while neglecting or implicitly dismissing the need for reforming a corrupt and mismanaged political structure is deceiving itself and us. The crux is that economic reform necessitates political reform," it stated.

The report emphasizes that authentic new investments that foster innovation and efficiency, thereby enhancing the nation's overall competitiveness, will remain a distant dream until the exploitative, rent-seeking political system that underpins the current economic framework is dismantled.

Sherani, who has been part of various past economic advisory councils in Pakistan, dismisses the idea promoted by an elite panel that the "creative destruction" of businesses would catalyze economic advancement.

He highlighted that the fundamental assumption behind elite policy recommendations is that the inefficiency and lack of competitiveness in the economy are solely attributable to the operational choices of firms, independent of external circumstances. The belief is that firms have control over their environment, or that their operational context is neutral and does not impose adverse effects.

"This is an obviously unrealistic assumption in the context of Pakistan. Formal sector businesses face a bewildering array of challenges, including the most expensive electricity in the region (often with interruptions); the highest tax burden (up to 50% plus super tax); an overvalued currency; widespread smuggling and under-invoicing that contributes to a $68 billion ostensibly underground (but very much above-ground) parallel economy that undermines the formal sector," he stated in the report.

In addition to executive overreach and regulatory burdens, there are costs associated with corruption and bribery, a lack of skilled labor, the necessity of training an unskilled and semi-skilled workforce—resulting from chronic state under-investment—expenses for water, security, extortion from local gangs, forced hiring of political appointees, and dealing with frequent policy changes. This list of challenges is by no means exhaustive, the report further remarked.