A certain viewpoint pervades which propagates that an economy can grow out of its quagmire by promoting consumerism. Our immediate neighbour, India, and many other countries are given as examples of following such a policy to maintain and sustain growth patterns. With a rise in the number of people shifting up the ladder to middle income status an economy sustains a mechanism of growth. Consumerism, it is further argued, helps people achieve better standards of living. From an economic and political perspective this phenomenon is also conducive to bringing stability in political matters and this would effectively help boost the economy.
Then there is a theory which is the anti-thesis of consumerism. Economic theories of economic development cite opinions linking economic development to savings and investments. This side of the argument puts emphasis on increasing the rate of savings and investment to achieve economic growth in real terms. Consumer-led growth is considered more of a fiction to create an imaginary sense of prosperity and economic development. Low interest rates can help enhance market liquidity and make people buy goods they may not necessarily need. This may not make their lives more productive or happier.
But the question remains whether there is such a thing as good consumerism that can be distinguished from bad consumerism. There is this example of countries like Germany and Japan who practiced great austerity to rebuild their economies ravaged almost completely during the war. Of course Japanese and Germans are highly disciplined nations and can stay focused on their national objectives over a long period of time. But in recent times countries like Brazil, India, the Asean states, and more importantly China, are examples of nations surging to the fore-front of the world economic scenario. It must be remembered that all these countries have followed very different patterns of economic growth. To mention statistics from the present state of economic affairs would not reflect the myriad patterns of economic growth these nations have followed in different time-periods.
For a country like China the real thing to consider and study is the historical perspective in which it succeeded to transform its socialist based economy into a market based economy. This is a near miracle and is being studied by experts around the world. For instance, in case of India a similar approach to transform a socialist based economy into a market based economy has not been achieved with a similar effectiveness. In case of India the problems of social and political behaviourism has worked as a roadblock to hamper economic growth. The kind of homogeneity that China has achieved generally is still a far cry for countries like India facing a diverse population pulling itself politically in different directions. To achieve economic growth it is necessary that some benefits trickle down to raise standards of living of the people.
Pakistan is a nation that shares history and social patterns with other nations in the SAARC region. It has a golden opportunity to study the history of economic development followed by each nation in this economic zone. Economic development without passing some benefits to the people is going to be counter-productive for a variety of reasons. For Pakistan the so-called growth patterns visible in large metropolitan areas may be misleading as they can be in any other economy. If a democracy is to run smoothly it needs to run and follow some pattern of a sagacious and practical frame of mind. Here we are stuck in petty issues relating to imaginary and ethnic clashes that have no link with the real issues facing the nation. The literature on the subject of consumerism is now quite vast and has been reasonably studied in the last fifty years or so. The development of global economy in the post-war era showed patterns of growth that were based on the Keynesian thesis. The debate is still on in the developed economies and Keynes is still the basis on which the later theories are developed. It is abundantly clear that consumer behavior in each nation differs from the others and no general rule can be made. Pakistan must seek and follow its own priorities.
The writer has served as consultant to the United Nations and other developed economies on the issues of trade and development and can be reached at [email protected]