Zafar Iqbal
The relationship between the culture of a nation and its economy is complex and multifaceted. Culture influences economic outcomes in various ways, shaping attitudes towards work, entrepreneurship, risk-taking, and innovation. Social norms, values, and beliefs prevalent in society can impact economic behaviours and decision-making at individual, organizational, and institutional levels. For example, a culture that promotes hard work, honesty, and trust can contribute to a strong work ethic, efficient markets, and a conducive environment for business growth. Conversely, cultural factors such as corruption, nepotism, and lack of trust can hinder economic development and investment.
Additionally, cultural practices and traditions may guide consumer preferences, production methods, and market structures, influencing the overall economic landscape of a nation. Understanding and addressing the influence of culture on economic outcomes is essential for crafting effective policies and fostering sustainable economic development. By recognizing the interconnectedness of culture and the economy, nations can work towards shaping a cultural environment that supports positive economic growth, innovation, and prosperity.
An overlooked recent event that could have significant implications for Pakistan’s future economic path is the undisclosed decision by the UAE government to discourage Pakistani men over 40 from working in their country. This decision arose from issues related to Pakistan’s political culture, specifically the inability to tolerate opposition. What made this situation unique was that these differences manifested as rallies in the UAE, disrupting daily life and economic activities.
The implications of this decision are far-reaching and often underestimated. One immediate concern is the impact on remittances; Arab countries are a vital source of remittances that provide a financial lifeline for a country perpetually short of dollars. If the UAE actively discourages employing Pakistanis in the future, it could result in reduced remittance inflows and jeopardize the jobs of Pakistani workers already employed there. Moreover, there is a possibility that such actions could spread to other countries, exacerbating the situation.
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This scenario is not far-fetched. In the past, we witnessed the unseemly incident of leaders from the PDM government being heckled in the holy Kaaba by followers of PTI, which did not sit well with the Saudi authorities. This incident, which was a result of political differences, is a clear example of how culture, often overlooked in discussions about economic factors, plays a pivotal role in shaping economic outcomes.
In Pakistan, economic discourse tends to focus on macroeconomic indicators such as taxes, GDP, monetary policy, and expenditures, largely neglecting the influence of culture. However, in reality, culture has far-reaching implications that we need to recognize and understand.
The recent Econ Fest held by PIDE delved into the relationship between culture and economic outcomes. It is widely recognized that culture can shape economic outcomes, as exemplified by French theologian John Calvin’s philosophy, which postulated that an individual’s worldly endeavours could determine their position in the afterlife, ultimately driving work ethic. Max Weber, citing Calvin’s philosophy, argued that the Protestant Reformation had a significant impact on culture and led to the rise of modern capitalism.
In Pakistan, there is ample evidence to suggest that culture significantly influences economic outcomes across various levels. Recent incidents, such as Pakistan’s exclusion from major platforms like Amazon and PayPal due to fraudulent activity by some Pakistani businessmen, serve as compelling examples. The failure to take action against those involved in fraudulent activities resulted in adverse economic repercussions for the entire country, including loss of business opportunities and damage to the country’s reputation in the international market.
Furthermore, issues like lack of transparency, dishonesty, and religious extremism have deterred both domestic and foreign investment in Pakistan. The PIDE BASICS Survey well documents these aspects, which directly and indirectly impact economic outcomes.
Concludingly, various facets of Pakistan’s prevailing culture have adverse effects on its economic situation. However, understanding that culture is a man-made phenomenon implies that there is potential for change. This potential for change should inspire hope for more favourable economic outcomes in the future.
