Dr. Shahida Wizarat Dean CESD, IOBM & President Independent Economists and Policy Practitioners.
The end of the 2nd World War was followed by the decolonization process when European colonialists were forced to grant independence to the colonies. And this process continued for several decades afterwards and led to the birth of a large number of countries. The period from 1945 to 1991 was a very favourable time for these new countries to undertake economic development as the world order was bipolar. The presence of the United States of America and the Soviet Union and the rivalry between them ensured that the kind of obstacles to development we witness today was not present. Both the camps tried to solicit the interest of the newborn countries towards themselves. This was the time when the Asian Tigers were born and the late-arriving Asian Tigers followed soon after. This is also when Pakistan made some success with industrialization, but couldn’t take off. But with the disintegration of the Soviet Union on 26 December 1991 a unipolar world order arrived, as the Peoples Republic of China had not yet become a global power and the Soviet Union had disintegrated. Thus the US reigned supreme.
For ten years from 26 December 1991 to 11 September 2001 (when the attack on the Twin Towers and the Pentagon occurred), we were in a unipolar world and the arrival of the New World Order occurred. This order envisaged taking developing counties back to the colonial world order, which they fought very hard to get out of after paying a heavy price in terms of lives and resources. This is being attempted both through liberalization and privatization policies that were introduced by the US, Europe and the International Financial Institutions in the late 1970s and the so-called “war against terror” unleashed in the aftermath of 9/11. While liberalization was draining these countries of their resources, the “war against terror” helped to reinforce the impact. Afghanistan was the first target of the war against terror when NATO attacked it in December 2001. The loot and plunder of Afghan natural resources continued for the next 20 years. Iraq was attacked earlier during the First Gulf War in 1990, but again in 2003 in the aftermath of 9/11. This led to a scramble for Iraqi resources by US-UK troops. Pictures of these troops looting Iraq’s gold reserves are available.
In the post-2008-9 recession, the Rand Corporation made the suggestion that only two wars i.e. Afghanistan and Iraq will not be sufficient to get the western world out of the recession. Soon afterwards in December 2010, the Arab Springs started with an incident in Tunisia spreading to Egypt in January 2011, Syria in March 2011, Libya in 2011, Yemen in 2014 and onwards. With the ongoing conflicts in Africa especially in South Sudan, Ethiopia, the Central African Republic, Northern Mozambique, and Cameroon’s northwest and south-west regions, the entire developing world has been converted into a war theatre. The economic difficulties faced in Iran due to the sanctions, and the present economic crisis in Sri Lanka, Turkey and Pakistan bring to the fore the turmoil and serious crises enveloping Third World countries. And it is not just the Third World countries but even big and powerful countries like the Russian Federation are facing sanctions to weaken them economically.
Such a large number of developing countries facing serious economic crises, and the possibility of a default becoming imminent reinforces my theory that these countries are being taken to the colonial world order that existed prior to 1945 under a well thought out strategy. The colonial powers who are still reaping benefits from their past colonial rule have gotten used to living beyond their means, and are “civilized” but are always eyeing what does not belong to them. So these “civilized” resort to begging, borrowing or stealing to give a higher standard of living to their people which their own resources cannot do. It is against this scenario that I will discuss Pakistan’s present economic, social and political crises.
The economic crisis on account of massive corruption by those in the corridors of power, taking huge loans for budgetary support which have been recycled back to rich countries on account of corruption, with an increase in prices of gas, electricity and petrol, increase in inflation particularly food inflation as a result of IMF conditional ties, non-availability of water and electricity due to no investments in these sectors due to IMF conditionality on reduction in government expenditures for the last three decades. The economic crisis is really tough both individually for the people as well as for the state. Add to this the constitutional and political crises creating political instability, the constant bickering between the politicians, politicians and the establishment leading to people losing hope, resulting in the flight of capital, uncertainty, loss of institutional credibility, etc. This bickering also resulted in diverting attention from the serious issues afflicting the state. The deteriorating law and order situation resulting in killings of Pakistan armed forces, Chinese citizens, bomb explosions, etc. are adding to the scary situation developing in the country.
Is the present Government of Pakistan competent to resolve the serious crises afflicting the state of Pakistan? This necessitates that we examine the constitution of the past and the present Governments of Pakistan. These governments are composed of US-UK nationals, Pakistani nationals on the payroll of foreign agencies, those that have leaked Pakistan’s state secrets, economists who have been pushing economic policies that have failed to deliver for the last 30 years, totally incompetent and those with serious corruption charges levelled against them. Can such a cabinet take the country out of its present predicament?
Do they have the willpower and the ability to resolve Pakistan’s economic, constitutional, political and social crises now afflicting the state of Pakistan? Even though the present government has been there for more than six weeks, there are rumours that a new government is being installed. But the proposed names convince me that those who are installing governments are not serious about resolving Pakistan’s serious crises. The names that are floating around are of dual nationals, those close to western agencies, who have been involved in corruption and Economic Hitmen (EHM). Their strategies have worsened the crises in Pakistan in the past. Bearing in mind what Einstein said that if you continue to do something which did not deliver in the past, but you expect it to yield different results this time then you are insane. Are we looking up to these insane people to resolve our crises?
Pakistan’s economic managers who have been running the economic affairs of the country for the last 30 years have strong links with International Financial Institutions and foreign agencies. They are in total connivance with the countries that are pushing Pakistan towards economic collapse. The economic team including the Governor State Bank of Pakistan are playing with the data and economic variables which are totally incomprehensible to the Government of Pakistan. For example, they have got the government to reduce vital expenditures in order to reduce the budget deficit and then with one stroke of the pen the SBP raised the lending rate. An increase in the interest rate is likely to swell the budget deficit substantially. The SBP has been increasing the lending rate as an anti-inflationary measure in Pakistan, where inflation is not due to demand-pull factors but is on account of cost-push factors and cartelization of the economy.
Similarly, the Government of Pakistan’s only preoccupation during the last four years has been servicing of debts. Food and medicines have been snatched from the people of Pakistan to service debts, but the devaluation of the Rupee increases indebtedness. This is despite the fact that we have not been able to increase our exports through devaluation, and what reduction in import demand was achieved has increased the cost of production, resulting in deindustrialization. But devaluation raises our debt burden, making our exports available at low prices and increasing the incomes of those drawing their salaries and pensions in $s. Even understanding the dynamics of these economic variables is beyond the capability of those running the affairs of the State and the Government of Pakistan, to talk about managing and controlling them.
I formulated an alternative to the IMF and informed those in the corridors of power not only that alternatives are available, but they are superior to the IMF model because instead of being recessionary like the IMF strategy, they are expansionary. My alternative is also more equitable as it lays the cost of adjustment on wealthy people, unlike the IMF strategy which is laying the entire burden on the poor and the lower middle classes. In spite of my loud and clear message that superior alternatives are available, there is no interest in the corridors of power for my alternative. Why is there no interest? This is because there is no political will on the part of those who are brought to power by the US-UK to opt for superior alternatives. They want one that has a US stamp of approval. The US will never allow them to go for a better alternative because the present economic crisis has been very cleverly crafted. It has the potential to cause an economic implosion in Pakistan. Moreover, negotiations between world powers and Pakistan on giving and take between nuclear assets and $s require that there should be no alternatives. How can Pakistan be allowed another route which is safer, can bring prosperity and which does not entail the exchange of nuclear assets with $s.
Turning now to the political crisis. No one will disagree with the narrative of breaking the shackles of slavery. This narrative is very close to my heart and I have been fighting against it like a one-woman army since 1993. How can we allow 22 crore people armed with nuclear power to be treated like a “caged bird”, subjected to the worst economic exploitation for the last 75 years. The narrative is, therefore, based on a factual situation and is very close to the hearts of the people of Pakistan. My reservations are not on the narrative, but on the capability of Pakistani leadership to sail us through safely. Second, it appears that getting close to Russia and China occurred a little late, i.e. after three and a half years of the previous government. Third, for the last few years, we have been hearing of a US-UK strategy of starting a civil war in Pakistan. Therefore, there is a lurking fear that US and UK might themselves be waging a war against their own domination. Fourth, the PTI government and General Bajwa were on one page on the safe with-drawl of NATO forces from Afghanistan, not recognizing the Taleban regime and not attending the funeral of Pakistan’s hero Dr. Abdul Qadeer Khan. The point I am making is that General Bajwa and Imran Khan were on their best behaviour towards the US, and Imran Khan rebelled only when Joe Biden kept ignoring Imran Khan and maintained his liaison with General Bajwa.
Even if the present attempt is a genuine attempt to get rid of US-UK domination how can we ensure that it doesn’t go the same path as the Arab Springs? The Arab Springs were also based on genuine grievances of the people due to high prices, poor governance and clamour for democracy. But it resulted in protracted civil wars in Tunisia, Iraq, Libya, Yemen and Syria. In Egypt, it helped to bring about a short-lived revolution to be replaced by strengthening of the very forces that the revolution had tried to displace. How can we ensure that our political struggle does not result in a protracted civil war in Pakistan? How can we ensure that even if it is a genuine movement it doesn’t get hijacked by the US and UK? These powers will try to infiltrate the movement and the Government of Pakistan. Touts on both sides of the divide will try to take the situation to the scripted scenario. The US and UK have in the past penetrated movements very successfully to manage and control them towards their goals and objectives.
What can we do to prevent the US and UK from using the movement to hurt Pakistan as they have been doing by giving asylum to Pakistani politicians and separatists? How can we ensure that we use this movement to get rid of subservience to the US and UK, instead of strengthening their control and economic exploitation? This entails that the movement is managed and controlled to ensure that it doesn’t go haywire, and doesn’t lead to bloodshed and civil war. That patriotic and genuine leadership heads the movement. Will our agencies be able to manage and monitor such a venture? Bearing in mind that the stakes of failure are very high and the fact that successive Pakistani governments have succeeded in isolating Pakistan. While US and UK never stood by Pakistan but used us for serving their interests and exploiting us economically, politically and strategically.
And the touts brought on leadership positions did not allow strategic and economic ties to be strengthened with the Peoples Republic of China and the Russian Federation. This will have a serious bearing on our security as western powers isolate a country before taking punitive action against that country. On the other hand, the Indian government has used its diplomatic skills to establish strategic relations with the US, UK, Australia, and Japan as well as maintain its past relationship with the Russian Federation to get cheap petrol and pass on the benefit to the Indian people. Compare this with the polarization in Pakistani corridors of power with Imran Khan openly condemning the US and General Bajwa openly condemning Russia. How undiplomatic, lacking finesse and professionalism.
In view of the incompetence, corruption, ties to foreign institutions and agencies and their inability to understand the actions of the economic managers taking Pakistan toward economic meltdown, the only way to save Pakistan is to establish a national government that is composed of competent technocrats that are not affiliated to the International Financial Institutions, are not on the payroll of foreign governments, are not dual nationals, don’t have corruption charges against them and have not disclosed Pakistan’s state secrets. Such a government will be able to get us out of the present economic, political and social crises. Only such a government can save Pakistan. Email address: drshahidawizarat@gmail.com
