There are a lot of rumours going around about the caretakers and the likely candidates. Before deciding on this, we need to be clear on what role do we expect them to play. Do we plan to use them to organise clean and transparent elections? Or do we want them to fight corruption and take the corrupt to the task? Indeed, the names of some economists affiliated with or those who have been affiliated with the international financial institutions are being proposed. In 1993, the caretaker government comprising of technocrats working for the IMF and World Bank including Moeen Qureshi, Hafiz Pasha, etc was installed.
Those who had served in the caretaker set up in 1993 were accommodated in permanent setups post-1993 as financial advisers, commerce ministers, deputy chairman planning commission, etc. During the 2000s, more technocrats like Ishrat Hussain, Nadeemul Haq and Shahid Kardar joined the bandwagon. There is a vast network of ‘technocrats’ who have been serving Pakistan during the last three decades. Some of them are serving the present government, but the moment they sense the government is nearing completion of its term or might be removed, they become very vocal against government’s economic policies and disassociate themselves from the government. They are playing on both sides of the wicket, not only batting and bowling but taking care of the duties of the umpire as well. Therefore, an evaluation of their economic policies for the last three decades is in order.
Till the 1980s, before handing over of the economy to the ‘technocrats’, Pakistan was a prosperous country with high rates of growth, with overall prosperity apparent from the lifestyles of the population. We were not borrowing from the international financial institutions for budgetary support during this period. The policies unleashed in 1993 by the caretakers were continued by elected governments whose economic ministries were taken over by the same ‘technocrats’. Increase in public debt and its servicing and the neo-liberal policies unleashed from 1993 onwards badly affected the rate of growth of the economy during the 1990s.
The standard IMF policy prescription for countries faced with balance of payment crisis is to devalue the currency which through a reduction in export prices is expected to expand the demand for exports. By making imports more expensive, the demand for imports is expected to be reduced. This narrative does not take low elasticity of demand and supply of our exports and imports into cognisance. With low demand and supply elasticities, the expansion in exports and the reduction in imports do not happen. As a result, the trade deficit, instead of declining, actually widens. Moreover, devaluation by increasing the price of imports unleashes inflation, which the IMF tries to curtail through monetary tightening, resulting in a decline in investments, output and employment. Although the fallout on the economy and the people is horrendous, the lenders and those drawing their salaries and pensions in foreign currencies stand to gain from devaluation.
Countries bring their best people forward to govern, especially in times of crisis and war. Why are we proposing technocrats whose performance has been so pathetic, who are corrupt, and whose loyalties are suspect?
The resulting decline in the growth rate had a decelerating effect on personal incomes, business profits and government revenues. Moreover, manufacturing value-added as a share of GDP and manufacturing employment as a share of total employment declined during the 1990s. This phenomenon referred to as de-industrialisation manifested itself in the form of closure of 5000 industrial units, downsizing and restructuring of State Owned Enterprises (SOEs), the decline in investments, migration of industrial units that became non-viable due to the escalation in their cost of production, rendering millions unemployed. The per capita income which was more or less stagnant during the first few years of the 1990s declined in 1994, 1997, 1998 and 1999. As a result of a decline in the growth rate, employment rate and per capita income, overall poverty increased to 50 percent and in rural Sindh to 85 percent according to the Asian Development Bank estimates. The ‘Durkheimian-Modernisation’ perspective linking economic structure to crime variables was substantiated by the increase in larceny, robberies, murders and suicides. These ugly manifestations were reflected in a manifold increase in cases of car snatchings, robberies, murders and two to three suicides daily reported in the newspapers during the 1990s. The country was engulfed in a socio-economic-political turmoil.
The decline that set in the 1990s has continued unabated till today, with minor aberrations from time to time. The rate of growth of the economy has not been restored to its 1980s level, what to talk about the golden age scenario of the 1960s. Twin deficits continue to worry everyone, while the government’s extravagant lifestyles continue. These failed technocrats are now trying to impose failed prescriptions that instead of resolving our crises are pitting us deeper into the quagmire. Their total preoccupation is with devaluation, which seems to be the panacea for all our woes. That devaluation has been tried for more than 25 years with no positive results, except for benefitting creditors and those getting their salaries and pensions in foreign currencies. So what these technocrats are advocating is in their own best interest. With one stroke of the pen they make the country poor and themselves rich.
Technocrats with links to foreign countries, whose names are floating around for the caretaker setup, have not only messed up our economy, but they have also disclosed state secrets to the USA. According to Rauf Klasara, Hafiz Pasha and Moeen Afzal disclosed Pakistan’s state secrets to the US during a visit to that country in 1997. According to Justice Jawad Khawaja, Ishrat Hussain’s name was tainted in a corruption scandal related to the privatisation of Muslim Commercial Bank (MCB). But in spite of their anti-state activities and corruption, their names are forwarded to for caretaker prime minister and finance minister’s slots. This reflects two important things: one, corruption is not the issue, and the current drive against corruption is politically motivated. Two, disclosing Pakistan’s state secrets is not a serious issue. You are welcome in the corridors of power as long as you are loyal to the US. We are an incorrigible nation as we cannot learn from our own recent experience related to the betrayal by Hussain Haqqani, whom we had elevated to the position of ambassador to the US.
Judgments by superior courts have given a verdict against appointing Pakistanis holding dual nationality on high positions as this involves a conflict of interest. But some technocrats whose names are floating around for appointment as caretaker prime minister and finance minister are foreign nationals. Why are institutions working in isolation unaware of the verdict passed by the superior court regarding the appointment of dual nationality holders on important positions? Different institutions should work in tandem on important national issues honouring the judgements passed by the honourable court.
In his recent book The New Confessions of An Economic Hitman, John Perkins discusses the role played by technocrats whom he calls ‘economic hitmen’ in colonising third-world countries on behalf of banks, corporations and the US government. ‘Economic hitmen are highly paid professionals who cheat countries around the globe out of trillions of dollars. They funnel money from the World Bank, the US Agency for International Development (USAID), and other foreign ‘aid’ organisations into the coffers of huge corporations and the pockets of a few wealthy families who control the planet’s natural resources. Their tools include fraudulent financial reports, rigged elections, payoffs, extortion, sex and murder. They play a game as old as empire, but one that has taken on new and terrifying dimensions during this time of globalisation.’
General Qamar Bajwa recently stated that Pakistan is facing a ‘hybrid war’. This implies that the cabinet we are choosing is a war cabinet. Countries bring their best people forward to govern them especially in times of crisis and war. Why are we proposing technocrats whose performance has been so pathetic, who are corrupt and whose loyalties are suspect? Pakistan deserves better than that. We should strive to bring the cream of the cream to the top. If we want to emerge victorious from this war, we should not appoint selectees of powers that are inflicting this hybrid war on us. We must select honest, competent and patriotic Pakistanis who do not have links with foreign countries/agencies so that they give a benefitting response to the hybrid war challenges staring us in the face.
The writer can be reached at email@example.com
Published in Daily Times, May 13th 2018.