KARACHI: More than anything, it is the people’s sense of survival against heavy odds that sustains national economy and prevents it from sliding below a certain level.

In Pakistan, economic resilience, reflected partially in a robust retail-sector performance, does not seem to be policy-induced. Officially put at 11 per cent and unofficially at 20, the growth of the retail sector here is a powerful testament to the element of resilience in economy. That the sector has caught the attention of international retail chains is not without reason. Makro and Metro, for instance, have already opened their outlets at several spots in urban Pakistan despite all that is wrong in the country, and a few more giants are at different stages of making their entry into the market.

The least financially empowered people — petty farmers, homemakers, the self-employed, hands-on trained technicians, artisans, craftsmen and the toiling masses — seem to be collectively producing more wealth than that reported by the formal economy. Their productivity makes up for the low level of capital formation in the formal sector to sustain the 160-million-strong population. The official rate of capital formation at 20.4 per cent in 2007 is, indeed, too low to have sustained such a big chunk of people.

The outcome of an informal survey by Dawn suggests that the tensile strength of the economy is rooted in a combination of a set of varied tangibles and intangibles. These include strong survival instincts of the dispossessed, fertile land, strong family ties, business acumen, technological inclination of the uneducated mass (high density of mobile phones is an indicator), exposure to modern life (people residing not only in urban shanty townships, but even those in backwaters have this window to peep through electronic media, leading to higher aspiration levels) and the trait of personalised charity encouraged by the belief structure dominant in Pakistan. A study had put charity’s quantum at an estimated Rs700 billion some 10 years back which is projected to have more than doubled over this period.

There are understood to be more money transfers from abroad that supplement the locally-generated family income than indicated by the official remittance figures. This could be because of monetary transfers by Pakistani workers abroad through channels other than banks. There are reasons to believe that there are significant direct injections of liquidity in economy by certain overseas organisations working for certain causes.

The NGO sector in Pakistan is bigger and wealthier than perceived. And add to this the black economy, the ill-gotten wealth, say, generated from smuggling. That, after all, is also used in whatever way by whosoever largely within Pakistan.

Though there are no credible studies available on the subject, the informal economy in the country is believed to be twice as big as its formal counterpart.

Officials themselves doubt the quantity and quality of data that at best provide some pointers and trends, but not necessarily the whole reality of a transformational economy. The likes of Shaukat Aziz and Pervez Musharraf were probably referring to this dichotomy when they reportedly told various forums in the presence of foreign dignitaries in so many words that the per capita income in Pakistan was close to $1,000, but the per capita spending power was one-and-a-half times higher at $2,500. What they did not bother to do was to explain where the people were getting this extra money from over and above the reported average household income.

The government hierarchy accepts that data-collecting tools and organisations are outdated, but so far there is nothing to suggest that either the incumbent or the previous government treated it as a priority area or made an effort to reform it. This reflects the low commitment of the rulers towards economic planning.

Since the quality of planning depends on the quality of information it is based on, the absence of credible data makes all exercises done in the name of economic planning futile for all practical purposes.

Generally an economic meltdown is followed by social unrest and political chaos. One explanation that was forwarded for the remarkable level of patience displayed by the people in the country is that their interaction with sectors under strain is at best marginal. Yes, price hike is crippling and has driven people to do multiple jobs for as long as 12 to 14 hours a day, and has transformed the traditional single-earner household to multiple-earner ones, but a very narrow percentage of the population is actually banked or has invested in the capital market.

According to current SBP data, only 15 per cent Pakistanis are banked and less than one per cent invested in securities. The fact is that the majority is not bothered where the financial sector is headed and, for that matter, whether or not the capital market shall be bailed out because they do not have a direct stake in these sectors.

Pro-government segments find the absence of mass social unrest as an indication of political support, but they may well be stretching their case a bit too far.

There is, however, no denying the fact that the current Pakistan People’s Party government has succeeded in creating, if nothing else, an impression that it is more sensitive to demands of the rural economy than was the previous government. It has taken some steps to appease its support base in rural Pakistan. The revision of support prices of wheat and rice and extension of certain subsidies on agriculture inputs have created some goodwill for the government in its support base.

“The situation has actually improved for us since the last government was voted out. The benefits of pro-farm policies have yet to reach the farming community, but the mood is optimistic. We perceive the farming community to be a part of the current power equation in the country,” said Syed Zulfiqar, an educated progressive farmer who owns a medium-sized farm on alluvial belt in the fertile central Punjab.

Another important factor that seems to lend stability to the economy of Pakistan and saves it from experiencing more horrific poverty is the natural inclination of the illiterate people towards technology. It explains why the West is so wary of the ‘copy culture’ of the East. Those who cannot read or write make next-to-perfect replicas of advanced industrial machinery, such as home appliances, units used by industry and mechanical farm implements. The quick adoption of skills and new technology by the small-scale engineering sector in central Punjab and Karachi has not only supported several hundreds of thousand of families, but has actually improved the productivity of agriculture and industry by supplying low-cost equipment.

Rice harvesting, for example, used to take a month-and-a-half until the introduction of mechanical harvesters a few years back when some agriculturists had imported old used harvesters from Europe and given them to small engineering workshops in Gujrat. Within days they made them functional and within the next few months produced their home-made replicas of different sizes. The induction of these harvesters has reduced the harvesting time from 45 to nine days, and reduced the wastage remarkably. Today, these harvesters are used across the country.

An executive of an NGO, involved in developing skills of small-time self-made engineers, told Dawn a while back that western countries welcome Pakistani technicians in training institutes, but discourage on-shop training or even visits to their industries.

“They are truly afraid of Pakistanis who they refer to as ‘rugged smart-heads’. A German businessman once said they prefer not to take Pakistani batches to their units of disposable plastic syringes because they fear that they will copy their investment-intensive technology and blunt their edge in the market,” he said.

The ingenuity of the people to understand changes in the market identifies a business possibility and their response in time to tap that opportunity is amazing.

The absence of formal education and denial of access to the echelons of power for institutional support have only sharpened the instincts of the poor but enterprising Pakistanis. Their business instincts have developed under circumstances that for most have remained difficult, if not tricky. Their understanding of the market and willingness to work hard makes it work for them despite a disadvantage of being in the informal sector.

It, however, does not normally permit them to cross the glass barrier and make it big. “The lack of finesse because of limited resource base keeps such businesses at little above subsistence level, absorbing family members and some hired hands. It produces enough to sustain the establishment, but not to expand it beyond a certain level,” a Lahore-based expert on SMEs told the scribe some time back.

While experts puzzle over how to explain the sturdiness of the poorer segments, the Dawn survey suggests that in their struggle for economic survival, they have led a silent revolution that has used whatever little window of opportunity there was to build long-term resilience and development in their communities. They consciously strategise and develop their families accordingly. It is a subject in its own right how women in such households use the family income to make the most of it. “I can never understand how she manages. I work hard, but she feeds and clothes my eight-member family within the meagre budget. I could not have done it without her,” said Shabbir, praising his wife’s money-management skills. He told Dawn that the local saving and credit group compensates for the absence of a bank in their squatter settlement.

Economic pressure is forcing more and more people to let their women work despite social prejudices against the notion.

“I cannot finance the marriage of my daughters on my own. I saw it happen in my neighbourhood. The pampered, unmarried daughter met a horrific fate after the death of her mother when she was packed off to a home for the destitute by her own brothers. For me the choice was to either lose my daughters to such a shelter or let them work and settle down on their own. I opted for the latter,” a bearded middle-aged property dealer in Surjani Town area told Dawn.

As for the lack of inclination on the part of the people towards collective action against the government, a plausible explanation is provided by Adil Khan, a driver who works 13 hours a day for a contractor.

“Only people with resources to fall back on can afford to participate in trade union and political activities. Though I feel tempted all the time, every hour counts for me and my family. Had there been more energy in my body, probably I will have preferred to work an extra hour to make some more bucks to ease pressure on the family budget,” he explained to Dawn.

Not for the first time, Pakistan is on the brink economically. Forget perceptions: even the official data is disturbing. Over the course of a year, the double-digit inflation has shot through the roof, the rupee has lost 22 per cent in value against the dollar since the February 18 elections, stocks have seen free fall with as much as Rs2 trillion wiped out from market capitalisation from Rs4.8 trillion in April to Rs2.8 trillion today, real estate value has depleted by 20-30 per cent, foreign exchange reserves are down by 50 per cent, and the twin deficits are at record high.

No wonder, then, that the Standard & Poors last month downgraded the credit rating and shunted the country to ‘junk’ category. People are under immense economic stress and yet life goes on. Away from the sporadic incidents of parents selling children or young men committing suicide out of despair, the face of hunger and poverty in Pakistan is not as horrific as seen on the African continent or even in neighbouring India, where the national economy has been on a gallop for a long time. The retail, considered a valuable indicator of the strength of household economy, has not shrunk correspondingly in Pakistan. One wonders: