It was the autumn of 2002. Walking into a meeting of the board of Prime Bank, I saw a smiling, sharply dressed gentleman who I recognized immediately from his photographs. I did not know him, but I had heard of him because only a handful of Pakistanis have acquired iconic status in agencies of global influence. Shahid Hussain, who died recently at the ripe old age of 83, was one of them.
From our first encounter, it became patently obvious why he was so widely respected. He signposted his formidable presence with searching questions on the bank’s vision and investment strategy, and asked why its lending portfolio was not concentrated in subsectors destined to grow faster in rapidly changing international markets and in response to technological evolutions.
Shahid’s academic career did not get off to an auspicious start. He enrolled in engineering but failed. He then left home, worked in a coalmine in Balochistan, ran out of money and returned home. Then his life changed. He registered for an economics degree and excelled in it. He obtained a Master’s degree from the London School of Economics, sat the civil service exam in 1956 and became deputy secretary at the Planning Department, West Pakistan, in 1961.
Hussain as a young district commissioner, 1960
He joined the World Bank as an economist in the Debt Division after completing a Master’s degree from Williams College in 1963 and was tasked to work on external debt and economic growth. Based on the quality of the modelling work he carried out in this capacity, he was asked to consider a regular position. Despite his training in economics, he always regarded himself as a generalist more than an economist because he did not fancy writing economic reports for the rest of his life.
Shahid’s first assignment took him to Brazil where he quickly became the Bank’s chief interlocutor, making a name for himself with the country reports he wrote on political and economic developments – not the institutional practice in those times. These became the basis of discussions on current issues with the country and he was soon recognised as the Bank’s expert on Brazil. He rose very quickly to become a division chief at the young age of 36. His stellar performance caught the attention of Robert McNamara who elevated him to vice president for East Africa – at 42, the Bank’s youngest VP.
He was a bit of a legend at the World Bank, always ready to take up a position in the trenches with his staff
Shahid was a no-nonsense man of ideas and solid principles. Having his own perspective on key issues, he was firm and assertive, anchored in a deep commitment to reform. His sheer grit and determination was active right to the last days of his life as he struggled with Parkinson’s, never allowing the disease to overwhelm him.
Of Shahid’s many accomplishments, several were pioneering in spirit, his substantive legacy being to wean the World Bank away from a pure investment project institution to one that would also support policy reform. When he was appointed as the first non-American VP of Latin America, he quickly earned the respect of all. He learned Spanish to gain a better understanding of the country and to establish his credibility with the client. He believed in working hands on to an extent that would not be expected of a VP. His work on Argentina in the late 1980s and early 1990s is considered a golden chapter in World Bank history because of the major contributions made there over a relatively short duration.
He was also an innovator and inventor, being instrumental in the World Bank opening up to China. By arranging a private visit to China, he laid the groundwork for McNamara’s visit there. Inducting China into the Bank’s lending system was going to be tricky since Taiwan was a borrower and could have reacted by defaulting on its loans, which would have contributed to a negative rating of the Bank’s bonds. The development of the Bank’s productive relationship with China was, in large measure, due to Shahid’s influence.
Shahid was never afraid of making difficult decisions. He took the kind of risks most others in his position wouldn’t – provided these gambles were consistent with his strategic objectives. His single-mindedness in this sense made him a bit of legend as a manager at the World Bank, especially among his junior colleagues. A high-calibre intellectual, he was always strategically focused, prioritizing Bank interventions in the borrower country, balancing his vision with pragmatism. Eager to get involved, he would roll up his sleeves to take up a position in the trenches with his staff, determined to find a constructive way forward on key issues.
With Deng Xiaopeng and the World Bank team to incorporate China into the Bank, 1980
He was highly regarded as a clear-headed mentor: decisive, excruciatingly hardworking and accessible to even the more junior staff members, engaging constructively with them, encouraging innovation and advising them never to give up if they believed in their own analysis and reform proposals. He made sure his staff were well taken care of and was well ahead of his time as a staunch supporter of women, persistently trying to carve out meaningful career paths for them.
When delegating responsibility, he would take full ownership of his team’s inputs, thereafter always standing by them. One such team member recalled an incident that typifies the mettle of the man. This gentleman had written a report on Indonesia that was rather critical of the government’s economic policies. This invited the ire of the Indonesian government, especially when the report was leaked to the Far Eastern Economic Review. When a key member of the government’s economic team came to register a protest, Shahid called the junior author to his room to introduce him to the complainant. Half expecting to be given his marching orders, he was shocked to hear Shahid defending the report and suggesting to the government representative that he not only read the report carefully, but also share it with other colleagues and consider adopting some of the recommendations.
Although he had left Pakistan back in the early 1960s, Shahid’s mind was always engaged with the country he felt passionately about. He followed developments at home and kept himself updated even at the micro level without the present-day advantages of access to the Internet and instant news. His commitment to Pakistan was such that, whenever the country beckoned him, he returned, mindful that his views might not be in sync with the leadership of the time. His first such sojourn came when Zulfikar Ali Bhutto wooed him assiduously to join his government as an advisor. He soon found that Bhutto wasn’t really interested in his advice and merely wanted to use Shahid as a cover to appease the international community. He left when Bhutto nationalized the agricultural industries without consulting him on this initiative. Next, he returned in 2000 when he was asked to lead a task force on tax administration reforms. That he failed to obtain traction for his ideas on both occasions was due to the political leadership’s lack of commitment to adjustments and reform.
In an interview conducted in 1994, he said: “The crisis of development is a manifestation of the crisis of the state which, in many developing countries, is untenable in its size, management burden and in terms of its role as a redistributive mechanism from the people to a handful of privileged groups – through subsides, regulations and transfer of wealth through inflation. Hence, the need for a smaller state and greater reliance on the private sector – a means for decentralization of authority and responsibility.”
When benchmarked against his conviction that a fair fiscal policy was central to the citizen–state relationship, the sentiments quoted above underlay his disappointment with Pakistan’s chronic underperformance. He was convinced that the inability of the domestic elite to tax itself was fundamentally compromising the country’s future. For him, an equitable tax structure and a fiscal regime that would rationally prioritize its spending to widen the base and value of human capital was the bedrock of any reform towards attaining economic sovereignty.
It is a great pity he didn’t write a book for posterity, sharing his wisdom and the lessons to be learned on policy and governance reforms from the variety and depth of his experience.
Rest in peace, Shahid. You have enough reason to be content with – if not justifiably proud of – the enormous impact you had on the agenda and processes of the World Bank, your professional home for more than 32 years.
