In the backdrop of the deafening noise of accusations and counter accusations narratives; bordering on sleaze; the type, once penned by Harold Robbins and scientifically debated by D.H. Lawrence, many Pakistanis; surprisingly despite being hard-pressed, are not glued to the latest in avoiding default. Rather, they are lending their ears to what is being discussed and said on Twitter, YouTube or other social media platforms. Despite the fact that it is not their priority, the fact is the other way round.
Pakistan, after its 75 years of existence, has come full circle, to what is the defining moments of its success or failure or even its existence or otherwise in the end. For many cynical observers, Pakistan is to stay even in its current position, provided there are interested stakeholders to its strategic location in the region and its willingness to do odd jobs as and when required.
Moving forward, the default; already done technically; or the one expected as an avalanche, has the potential to change the dynamics of the polity and society. That aspect cannot be shrugged away as external shock or global impact. Decision makers need to look at the problems, which led to this state of affairs; though it is already time lapsed. The issues might be pushed beneath the rug for some time, however, any political government will continue to be haunted by the undercurrents beneath that proverbial ‘rug’. A truth and reconciliation approach by the decision-making stakeholders is necessary; more than getting on board a new geopolitical package; an IMF package on the back of the former. The state might need a big reset; avoiding which might land it into unmanageable chaos
Foremost amongst the problems has been its economic crunch, which unfortunately dates back to its formative years. The paradigms and policies adopted by the young republic as dictated by the usurping cliques were best suited for a client-state status. A state which is ready to do the strategic jobs and put back its welfare and economy-related duties. The basic difference between the two siblings, the outcome of the 1947 ‘cesarean birth’, India and Pakistan, has been precisely that. While Indians thought it opportune to court both the Americans and the Russians, our key civil and military policy-makers thought it was beneficial to have a package, complete with imports, foreign aid, investment as well as the way of life; capitalism without any shackles. Consequently, it choose the USA.
The results were high growth rates dependent upon certain assumptions. During that period, our key economists used to chide the Indian siblings as maintaining what they called the three- percent ‘Hindu growth rate’. At that point, our topnotch industrialists raced through Karachi lanes in Mercedes and Opel brands while their Indian counterparts had no inhibitions roaming about in locally manufactured ‘Ambassador’ vehicles.
Without going into the timelines, the Pakistani foreign trade was dependent eternally on IMF doses, while the Indians were tuned to first make their industrial base; followed by controlled liberalization and finally a well-timed transition into the capitalist economy. Pakistan has its first jolt when an ill-timed strategic venture, ‘Operation Gibraltar’, blew up into a full-scale 17-day war in 1965, which ‘broke the back’ of the Pakistani economy.
With military hardware sanctions and not-so-friendly IMF, Pakistan was to fend for itself in the economic and military spheres. The outcome was a failed economic takeoff during the 1966-1970 period. All these economic realities boiled down to firstly centrifugal tendencies, political unrest and finally political protest, which put the key policy makers on the defensive. That time was characterized by grabbing and proverbial ‘snatching’ by the West Pakistani political elite.
That was the time when Pakistan never recovered from the ill impact of its misplaced priorities. However, Pakistan did not review the policy and remained part of the pro-US military alliances. WikiLeaks in one of its file links states how Pakistan Air Force participation in the Mid Link 1974 exercises In the Indian Ocean irked the Indian Foreign Minister to issue a statement on the floor of Lok Sabha in November 1974.
The 1977 political crisis, military coup and the changes around Pakistan convinced the key policy-makers in Pakistan to again paste the ‘for hire’ notice for the West’s attention. Predictably, the USA employed the Pakistani military and society to wage its proxy war against the USSR in Afghanistan. How that war destroyed the Pakistani social fabric has been dealt with in detail by many analysts. The long-term outcome was that the Pakistani economy got addicted to what during Musharraf and Zardari period came to be known as “Coalition Support Fund’ factor or ‘budgetary support’ factor, also pointed out by US strategist Bruce Reidel in his writings; in terms of economic resources.
The Pakistani planners’ only concern was to appease the IMF for more SDRs to keep the military complex going in one way or another. The economy in fact never got the attention it merited. The IMF dictates made the economy gradually a high-cost one. To top it off, the hybrid experiment period central bank decision to leave the dollar to the market forces dealt a deadly blow to what was left of the Pakistani economy.
The Pakistan high-cost economy, addicted to a developed-world lifestyle, at war with its neighbours on one pretext or another, could only live comfortably, if it was given any geopolitical ‘Supari’. With such jobs being competitively contested, the only option could have been to push up the economy of a few sectors in a manner which could infuse growth all over.
However, again the priority was profits or spoils of war. The political instability, which in fact has been self-inflicted by the established order recently experienced by the country; that political unrest created out of an intimate pillow fight has left the country in economic shambles. Investors are in a state of indecisiveness, people are below the poverty line. Consumption patterns are below the average levels; levels which are necessary for revenue growth for the industry, trade and retail.
Coupled with that, the rising militancy has put the country in a quagmire, never earlier experienced. Today, stifling imports for keeping the reserves in a manageable state has become the imperative for the state and the central bank; not realizing that this one act of resource management has sent the industry into a tailspin, and consequently the society into one too.
In the backdrop of these developments; the recently announced and debated resource management order can best be called a repeat of what the French queen Marie-Antoinette saidwhen told the poor had no bread to eat; “Then let them eat cake.”
The cabinet proposal for dream projects like electric motor cycles, improvised geysers, when natural gas is short and import from Iran is banned under international commitments, changes in fan industry, and so on, can only be called a recipe for complete disaster. Pakistan’s fan industry might be among the few sectors of industry, which might have to its credit foreign exchange earnings. Regulating it in a haphazard manner, which is all much expected, can only push more people below the poverty line.
The reasons for these steps of the last resort planned and visualized that way, expose the elite thought processes of the political groups, who regretfully cannot think beyond their bellies. Their lack of imagination can trigger more crisis than relief. On top of that, unguarded remarks about the country’s population growth rates make a very bad profile of that very political elite; their statements and counter-statements, which show their seriousness of purpose.
Moving forward, the default; already done technically; or the one expected as an avalanche, has the potential to change the dynamics of the polity and society. That aspect cannot be shrugged away as external shock or global impact. Decision makers need to look at the problems, which led to this state of affairs; though it is already time lapsed. The issues might be pushed beneath the rug for some time, however, any political government will continue to be haunted by the undercurrents beneath that proverbial ‘rug’. A truth and reconciliation approach by the decision-making stakeholders is necessary; more than getting on board a new geopolitical package; an IMF package on the back of the former. The state might need a big reset; avoiding which might land it into unmanageable chaos.
