Is Pakistan dubbed “Plotistan”? The recent uproar over plot allotments to officials and judges has reintroduced a shadowy facet of Pakistani administration — the practice of transferring valuable land at subsidized rates. Although the budget has been canceled, it is unlikely to end a practice that has already cost Pakistan a fortune since the program’s inception.
More critical than sporadic outbreaks of rage is the need to comprehend the source of this unwarranted generosity. Unfortunately, little knowledge and research have been conducted on the antecedents of land giveaways and related issues. That is expected to change with future PIDE research co-authored by the institution’s vice-chancellor Dr. Nadeem, who coined the term ‘Plotistan.’ While the subject is public wealth, land-related concerns have gotten substantial discussion, as land is Pakistan’s most valuable asset. The next section summarises the findings.
To begin, a word on the critical nature of this topic. From a purely social justice standpoint, it is revolting that in a country where the majority of the population struggles to purchase their piece of land for housing, incredibly valuable land is donated to a tiny group of individuals at absurdly low costs. Additionally, if assets such as public land are maintained professionally and effectively, there may be no need for extractive taxation or the use of expensive loans to finance development initiatives.
Let us return to the issue of historical antecedents, which necessitates a journey back to the era of British administration. The Empire had its priorities and ambitions, and gifting ‘royal’ land at extremely low prices (or free) was an effective method of ensuring that realized official objectives. For example, canal colonies like Lyallpur (Faisalabad) would provide cash and assist in earning allegiance and develop denser settlements on British India’s western frontier. They reasoned that the best way to accomplish this would be to give land (and private entitlements) at rock-bottom prices or as an incentive. Moreover, policies such as the gifting of land to military martyrs go back to a time when military people died in the service of the Empire.
Land giveaways have evolved in certain respects
In Pakistan’s example, land giveaways have evolved from being a need in difficult conditions to providing a constitutional and legal basis (in 1973) for the government to engage in this imprudent largesse. In 1947, as waves of migrants came on the new country, the government was forced to establish settlements on its territory. With little or no experience managing land or housing, it turned to numerous cooperatives founded during colonial periods to address these concerns. For example, the Karachi Cooperative Housing Society Union leased 1,200 acres of public property.
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Briefly, the public sector assumed responsibility for housing provision, owing to donor funding (donors developed master plans’ for cities such Pakistan, Karachi, Lahore, and Islamabad) and court rulings establishing housing as a fundamental right. By the 1970s, however, there was an unspoken acknowledgment even within ruling circles that the government needed to withdraw from this domain due to the outcomes of previous excursions, which included corrupt activities and rent-seeking.
Regrettably, the conspiracy culture had grown firmly ingrained in the public sector by that time. The 1973 Constitution put any questions to rest. Article 24 sub-clause 3 ‘e’ ‘ii’ requires the government to provide housing and related services to all citizens or “any specified class of citizens.” Legally, the only need is that the “public interest” is served! Regrettably, this legislative authorization for public-sector indulgence in land and homes merely served to reinforce the already-established culture of plots and privileges.
Except for a few random studies, there has been no aggregate assessment of the loss caused by subsidized land grants. For example, according to a 1991 study, Punjab’s provincial officials distributed 318,952 plots at a ‘DC’ (subsidized) rate over four decades, earning a meager Rs6.9 billion total. However, the market price was Rs63.9bn, implying a massive subsidy of Rs57bn, roughly similar to the federal government’s total revenue that year. Consider the amount that would surface if ever assessed Pakistan-wide losses.
The PIDE research elucidates the numerous novel strategies used to obtain these subsidized goods. For example, government agencies are littered with ‘housing societies’ comprised of personnel who have successfully carved up valuable land among themselves. Over time, cooperatives have been another preferred method of obtaining this subsidized favor. As a result, it is past time to demolish this colonial structure and avert Pakistan’s devolution into ‘Plotistan.’
This endemic culture of subsidized plots has harmed Pakistan in numerous ways. In the twenty-first century, investing in land remains Pakistan’s primary focus, mostly because public laws have ensured it is scarce and thus expensive. It partially explains why alternative wealth-creating routes (such as the stock exchange) account for a negligible portion of the economy. Additionally, we see millions of intelligent, brilliant young people enlisting in the civil service and military forces rather than pursuing careers as entrepreneurs and businesses. A significant motivation is a potential for perks and privileges (subsidized plots are a key draw). In other words, the plots and perks culture has become a self-imposed, binding constraint on Pakistan’s capacity for wealth development. As a result, it is past time to dismantle this colonial structure and avert Pakistan’s devolution into ‘Plotistan.’
Poor management of public assets (particularly land) has incurred enormous costs for Pakistan’s exchequer. Moreover, managing land and allocating subsidized plots has resulted in a slew of difficulties for the country, ranging from ever-expanding, unmanageable towns to rent-seeking and massive wealth disparities.
Therefore, it is time to dismantle this colonial construct and prevent Pakistan from devolving into ‘Plotistan.’ The public sector must relinquish its more-than-active involvement in this field.
An author is a research fellow and economist at the Pakistan Institute of Development Economics.
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