The shrine of the revered saint, Hazrat Data Ganj Bakhsh, may now be located in one of the busiest part of Lahore, but it is still a holy shrine providing (on a 24/7 basis) food, shelter, spirituality and above all, an aura depicting ‘sanctity of life’ common to millions of Muslims and non-Muslims of the subcontinent. And it is mainly for this reason that the attack on it last year was extremely alarming; since in attacking the shrine, the terrorists in fact took a shot at the very symbol of peace and humanity, which has been the love and pride of Lahore for centuries!

When analysing this ghastly act many scholars opine that it cannot be looked at in isolation. The growing trend of intolerance and extremism cannot be simplistically attributed to an emerging religious militant phenomenon, but instead needs to be prudently linked to a growing economic divide within Pakistan - a case of major frustration amongst Pakistanis due to lack of political and economic opportunities, leading to an increased vulnerability of the mind that, in turn, falls victim to exploitation.

Some, on the other hand, argue that, perhaps, the true cause of this problem should really be attributed to the incomplete and immature nature of the Pak-style democracy presently in place. But even if this argument were to be accepted for a moment, it would merely be addressing only one side of the issue. The other side being the fundamental question of whether it is even possible to install a mature, stable Western-style democracy within a civilisation consisting of arguably one of the oldest feudalistic cum centric cultures?

Without going into the merits and demerits of democracy across our eastern border, the thing is that like many emerging countries, Pakistan has also transplanted saplings of democracy from elsewhere; and as in many of these countries, the Pakistani democracy is having trouble in acclimatising. The contradictions currently facing Pakistan are quite complicated on at least three levels and the complexities are such that it is difficult to provide clear or absolute solutions on what precise direction we should be adopting to overcome these problems.

The first contradiction is that of the balance of power. Like majority of the South and Southeast Asian countries, Pakistan faces the contradiction on who yields the real power in the country. And the confusion is not just confined to the institutions of the military, judiciary and the political parties, but in reality is spread over a much larger platform that entails a power struggle between the so-called nobility (feudal), the beneficiary middle class (a more recent phenomenon), clergy (now of late assuming a more assertive and aggressive role) and the poor at the very bottom of the social ladder.

In theory, to overcome this unhealthy tug of war, countries in a transitional phase such as ours need only to establish a more equitable distribution system in order to ensure stable development. In reality though, it is easier said than done, since the system of equitable distribution in these economies is not an old established norm and mostly gets introduced somewhere during their road to economic development. Whereas, the old beneficiary classes are instead well entrenched and strongly resist giving up their long held benefits.

And this is why we see in the recent economic development history of Pakistan that even when it has had a good deal of economic growth momentum (mostly under military governments), the distribution of the fruits of growth has been skewed. Meaning, bringing greater benefits to a select portion of individuals, who tend to hold sway over the direction of the nation and, at the same time, are able to limit any real reform in the wealth distribution system.

The second contradiction is inherent in the economic transition itself. Just like many other Asian countries, Pakistan’s transition from poverty into the ranks of the middle-income countries is best thought to be driven by cheap labour and exports. While this model may be our best option at present and needs to be continued, but, at the same time, it is important to remember that though it will certainly lift Pakistan out of poverty, it may not necessarily move us towards greater development. In the long-term, this model for growth could ironically become the primary factor generating polarisation in the society - we see Bangladesh slowly inching towards such a catastrophe!

To achieve sustainable and fair growth, we need to work side-by-side on improving our labour skills in order to become more competitive and move into the upper levels of the global industry. Again easier said than done, since such an endeavour entails further raising the workers’ incomes with the result being that the reliance on domestic demand will increase; and in a weak economic environment, this transition can both be tricky and risky.

Further, SMEs (small and medium sized enterprises) typically work with low wage payouts and informal work contracts, and unless there existed a sound programme to shift the workforce from lower level to upper level employment, the move can result in mass unemployment. This is why in a country like ours (lower to middle income at best) to stop inequality from spreading, the ‘primary distribution’ tends to be more important than ‘secondary distribution’.

With an exploding population, the government just cannot afford to take its eye off ‘employment growth’ and, therefore, needs to keep focusing on manufacturing that - more often than not - rests on being labour intensive, instead of being capital or technology or knowledge intensive.

The dichotomy or the contradiction, thus, remains that the more cheap labour is introduced in the manufacturing, commercial and service industries, the more unfair the distribution of national wealth becomes; and the whole notion of a fair economic transition instead becomes a political issue.

The third contradiction relates to the reform environment. The reforms that Pakistan requires must take place in an environment of stable, long-term social development. A strong ‘ethical’ government is, therefore, needed to establish a modern equitable distribution system, while competently tackling the possible negative impact of an economic transition, avoiding violent social conflict and minimising unrest. Regrettably, at least in the short-term and given our current political structure, such a government remains a distant reality.

Historically, in the modern-day developed countries, their leaders (regardless of the institution they represent) at some stage of their national economic histories have walked down this route of solving social contradictions at home.

Their resolve being to allocate more care and attention to the weaker members of society and to ensure that the democracy in place is a fair one - a democratic system that works towards strengthening the national institutions and core values, and not towards weakening them. The leadership challenge does not lie in knowing these contradictions or the explosive nature of the ideological danger they present, but in successfully managing them in a way that one segment of the society willingly transfers its benefits to the other underprivileged segment to avoid a situation where these contradictions can push the society to a breaking point.

From this very perspective, the economic and democratic transition presently underway in Pakistan needs to take place very carefully. If we continue to fool ourselves with the mere cosmetic of democracy without bringing about fundamental changes in our governance mechanism and priorities, both our social and economic graphs will continue to decline.

Finally, no institution can do it alone and the country will be better served by resorting to ‘truth and reconciliation’, and then just moving on with a consensus on vital national agendas. India changed course on its economic vision back in the early 90s and regardless of who influenced power since then, their economic priorities always remained constant. The result is there for everyone to see.

In our latest effort (with the upcoming elections) to positively affect our democratic and economic transition, all power centres in Pakistan will need to collectively deal with the above described three main contradictions in our society. Only by jointly moving away from these contradictions or by significantly reducing their influence, we will be able to achieve stable development and join the ranks of developed countries.

The writer is an entrepreneur and economic analyst. Email: