Burki is a Pakistani professional economist and social scientist. A Harvard alumnus, he studied and applied Alexander Gerschenkron’s thesis on economic backwardness to the development of Pakistan. After having joined the country’s Civil Service, he moved to the World Bank in 1974 and worked with many regions including China and Latin America, analyzing the problems that cost their economies heavily.
The world is witnessing a rapidly changing global economy, one characterized by novel features. In this book, South Asia in the New World Order: The role of regional cooperation, Shahid Javed Burki discusses three of these developments: profound demographic changes, globalization, and a redefined role of the state. In this context, he elaborates upon the history, economy, and politics of present-day South Asia, and the role its countries could potentially play in the new world order. Burki also challenges the notion of a bipolar world dominated by the United States and China. He argues that the world will witness the emergence of multi-polarity with eight centers of economic activity, including India.
Reflecting the book’s subtitle, ‘The role of regional cooperation,’ Burki makes an interesting argument: this global system could be hugely beneficial to India, Pakistan and Bangladesh amongst others, provided they shape their respective public policies with a regional approach to economic development. He writes that only strong regional cooperation will enable them to occupy a prominent place in the world’s economy and utilize the opportunities of an increasingly globalized world.
Burki makes a detailed and coherent account of the world’s structural transformation and the “rise of the rest,” as coined by Indian-American journalist Fareed Zakaria. East Asian countries, dubbed as “miracle economies,” achieved previously unmatched economic growth rates and became industrial powerhouses. Some of these changes were a result of favorable demography and the espousal of new models of economic growth. An important aspect of the new paradigm was the intervention of governments in their respective economies – policy interventions meant to encourage development (both in general and for particular industries). The state has tried and often succeeded in achieving equitable distribution of income. However, this has not been implemented successfully in the past.
Deconstructing the role of the state concerning economic development in the present economic model is an important and recurring theme of the book. While the Western model of capitalism encourages risk-taking and the state being pushed to the economy’s margins, East Asian countries eager to play catch-up with the West have promoted active state intervention coupled with the development of external markets. Japan is a case in point – a country that has on its journey of development and supported the development of those around it, thereby creating a ripple effect. Burki notes how such countries (South Korea, Taiwan, Hong Kong and Singapore) have invested heavily in education, skills development, and health-care, thus creating human resources for any modernizing economy. He substantiates his claim that the East Asian economic model has emerged superior to the Western model by pointing out how minimally they were affected by the financial crisis of 2008-09, as opposed to countries that relied predominantly on free-market capitalism.
In contrast, Burki illustrates the South Asian scenario. Although endowed with considerable economic potential, the region bears the weight of a history marked by conflict and mutual suspicion. The relationship between India and Pakistan is an example of this; both countries have spent considerable public resources on military and defense. Burki claims that if it were not so, both would have had larger economies, higher per capita income and fewer people living in abysmal poverty. He adds that intra-regional strife needs to be resolved in the way that many other similar regions have done. The most prominent example of this is the European Union (EU), comprised of numerous nations that have repeatedly engaged in conflict over the previous centuries. Despite this, they have let go of narrow national interests and embraced a regional approach that has delivered many economic advantages. The European Union has expanded off late, not by conquest but merely the eagerness of other nations to join it.
Moreover, Burki comments on the South Asian effort at regional cooperation: the South Asian Association for Regional Cooperation (SAARC). The entity has aimed to promote and sustain mutual trade and economic cooperation amongst its members. The author once more sheds light on the deep-seated tension between India and Pakistan. The meeting of Indian and Pakistani Prime Ministers, are surrounded by sensationalism and media frenzy than substantial and consequential matters that the SAARC summit deals.
Pakistan, especially, needs to collaborate more with India to emerge from the state’s looming ‘existential threat’- unstable government, Islamic extremism, and burgeoning terrorism. While officials initially encouraged the Pakistani Taliban in attempts to foster anti-USSR and later anti-Indian sentiments, the state eventually came to terms with the fact that the organization itself was an enemy. Pakistan, now known as the continent’s “sick man,” faces bankruptcy without foreign aid, and is relatively underdeveloped and plagued by the constant threat of Islamic insurgents. It faces shortages of basic goods and services despite having a young and large population, well-endowed agricultural sector, well-honed skills and a strategic geographic location. Burki observes that accepting India’s role as the region’s anchor economy (accounting for 82% of the total regional product) and pursuing collaboration would ameliorate Pakistan’s current state of affairs. Keeping in mind the North American Free Trade Association (NAFTA), Burki stresses the enormous economic gains that Mexico made in a similar system of regional cooperation. With the help of India and Pakistan, there could arise an integrated system of highways, connected electrical grids and gas pipelines connecting to the Middle East, to list a few of the advantages he mentions.
By way of this book, Burki demonstrates how regional cooperation could and would create a new role for South Asia in the emerging global order. Through the book, he substantiates his argument by elaborating on the nature and characteristics of various relationships between South Asian countries, with India and Pakistan in particular. He bolsters his argument by providing instances where similar issues have been resolved. In the concluding pages, he enumerates the advantages of moving past the zero-sum game: more labor intensive activities and the grant of mutual transit rights, thereby helping to develop multiple industries. The intra-regional trade would also allow for the rectification of deficits by each other through the linkage of infrastructural networks such as electricity, gas and perhaps even water.
Burki actively endorses the view that the state ought to play an active role in every economy, especially when it comes to development. Otherwise, society or economy that grows quickly will inevitably leave behind many segments of the population. The Maoists in India operating from thick forests in Central and East India have been unable to voice their problems of inequality and had to resort to the insurgency. As a result, India faces instability within its borders. In an attempt to focus on economic growth, Pakistan has neglected poverty alleviation and income distribution improvement. It has allowed the private sector to space up incredibly until the mid-seventies. By illustrating the current situation in Pakistan, Burki proves that the instability that exists on India’s periphery will always hinder the growth of both countries as well as the entire region. Nevertheless, he manages to make an unbiased argument- one that examines the situation from all perspectives involved.
There has been a sharp decline in human fertility rates across the globe. Consequently, a window of opportunity will arise and last for some decades. Active workers outnumber their dependents. However, Pakistan and Afghanistan are two South Asian countries that have ignored education and skill development and are now lagging behind in preparation for the upcoming age of economic upliftment. Moreover, Burki explains that Pakistan’s Islamized model of education is unsuitable for the type of workforce any modernizing country would require and it needs to be altered over time to turn the region’s large, young populations into economic assets instead of socio-economic burdens.
In addressing the issues South Asia deals with, Burki also touches upon the parameters of location and geography. Politics often gets in the way of using the site for economic advantage. This is substantiated by Pakistan’s refusal to permit the flow of goods and commodities from India to Afghanistan, which is yet another outcome of history and nationalism.
To conclude, the author effectively illustrates the economic circumstances in South Asia and what each country must do regarding its public and foreign policy. Highlighting the importance of India’s economic size and leadership, Burki proposes a mutually beneficial system with one anchor economy and several smaller ones. This would entail a high degree of integration and cooperation. For this, each country must have a stable and viable political system. However, it is the absence of such a system in countries like Pakistan and Afghanistan that has stunted economic development.
The Author, Aditi Khemani, is a law student in O.P. Jindal Global University