Pak Economy: Default — over my dead body?

Ali Ashraf Khan

When Shaukat Tarin, another Citi banker and economic maverick was named advisor to P.M on Finance, the message was loud and clear that Pakistan’s economic prescription will continue in the shoes of Shaukat Aziz and Dr Salman Shah style, though Shaukat Tarin claimed and announced that all is not lost and that he has a plan A and a plan B and to the IMF Pakistan will go only “over his dead body.” This was a couple of weeks ago. Now the newspapers are writing that the deal with the IMF is almost done. Interestingly, Shaukat Tarin is very much alive and kicking. People have also forgotten Tiger General Niazi, who first uttered these words to betray the Pakistani nation and we lost half of our country in the 1971 debacle.

The history of Pakistan’s relationship with the IMF is a checkered one. Never has any “democratically” elected government, be it PPP or PML(N), been able to bring an IMF programme to a successful end keeping in view the interest of the country and the nation at top. The only exception was the so-called success story during the regime of General Musharraf between 2000 and 2002, when an IMF programme was finished successfully when money of Pakistanis living in USA started flowing into Pakistan as a result of the 9/11 episode. Not all the blame for this failure comes to Pakistan; the IMF is sharing the blame by trying to impose reforms and changes into the country and tries to brain wash and eye wash the Pakistani society, who are still made to believe that these donors and their stooges at the helm of affairs will ever be honest to their heart once in life. Their plans used to be counterproductive and caused more harm than good because they did not take into consideration the ground realities of Pakistan.

Today we know that IMF does not only disregard the ground realities of our country, their own neo-liberal economic strategy has been seen failing everywhere in the world. IMF policies are more synonymous to those of the “Iron Lady Margret Thatcher (who was shamefully dubbed as “Milk Snatcher”, which no woman would like to be) which had caused a popular uprising once in UK. The U.S which is controlling the IMF has brought its own economy into recession by their blind faith in the market forces and by failing in the frenzy of becoming sole super power of the world, to put checks and balances into their own financial system, which is the root cause of the present financial and economic turmoil. Economic liberalism is lying on its death bed and Pakistan obviously wants to join it there!

What are the reasons for the many efforts to keep Pakistan depending on the IMF? The IMF which is representing American interests wants to make sure that Pakistan who is their most important help in the war on terror will not be allowed to slip out of their grip because it is not in there own interest as well. That is why they have been trying hard to keep us dependent politically and economically. Politically they have managed to bring PPP into power, first with concluding a deal with BB and later by doing the same with her widower. Americans are highly unpopular in Pakistan among the common people as much as among considerable parts of the political community. The new tool of formation of a club of “friends of Pakistan” has been exposed within few months as a rough for Pakistan.

The continuing US attacks on Pakistani soil killing hundreds of Pakistani civilians including women and children and the ill-conceived “war on terror” – in fact an American proxy war – is the main reason for this. Many common people, analysts and politicians have demanded to change the foreign policy of the previous government and keep a distance to the US by turning towards new partners who are more conducive to our present situation. That was why in the beginning Shaukat Tareen was so eager to assure the nation that he will not go to the IMF. But the US did all they could to not let Pakistan escape its grip. The so-called “friends of Pakistan” after including Saudi Arabia and China into this club were persuaded to hold back any support until the IMF deal was done, the World Bank was made to withdraw an already approved loan to Pakistan – all this just to make sure the unwilling bride can not escape!

Now what is the way out? The IMF is no solution to the problems of Pakistan because their economic concept is outdated and their intention is contrary to Pakistan’s national interest. This fact has been highlighted during the last couple of days in many newspaper articles, TV discussions, even by the politicians in ruling elite and opposition alike, and most recently even in the Senate where not only opposition members were rejecting a new engagement with the IMF but even members of the ruling coalition joined this demand. The government who has come into power by the voice and vote of the people should listen to the voice of their voters this time also and not sign the deal with IMF or World Bank. What then will happen if Pakistan will default? So what, let’s default to build our nation afresh! The last chance to build this country as an independent strong nation standing on its own two legs was lost when General Musharraf conceded to American demands “you are either with us or against us” conveyed on phone by Colin Powel in a minute or so, which even surprised President Bush at first. This is another life time opportunity Pakistan has been blessed with to refuse to any rescheduling or extension of liabilities on account of debt burden, which has been loaded on the back of our nation with no hands or purpose to live with it, the fact is all these loans and aids are given to rope in the developing nations to derail in their proposed plans for development and create a lobby of corrupt Mafia who join hands in looting and plundering the national resources, which we in Pakistan have seen in its best colours and NRO is the sacred gift of USA in this direction.

Therefore we should not fall into the trap of those who think default as a bad option, because we would be not the first country in the world to default. South Korea, Thailand and many more have defaulted, what happened to them? If we take a stand on our own terms and do not look towards American prescriptions we can surely make it, and all this would mean to tell that any new borrowing on very hard conditions would be much more difficult. But should we really borrow more with these strings? The nation will be ready to pay the price for this once the leaders rise to the call of time and stare in the eyes of donors and their supporters, leaders will have to give big sacrifice. Only then the nation will trust them and their credibility will be established. Announce to reduce half the budget allocations from the perks and development grants to politicians, and their cohorts, which has never been useful in the past. Then give a call to the nation to cut the household expenses by stopping the import of luxury items, by bringing down the salaries of the heads of state corporations and institutions and the perks and privileges of the ministers, advisers and others. It is shocking to learn that at a time when we are near to default we are expanding the Cabinet and there are more then hundreds of people who are drawing millions as their monthly salary. We have to justify our call vis-à-vis the challenge, only than the rich will bring back their money and assets which they keep outside the country and invest it in infrastructural projects like alternative power production road construction and in the development of education. Its time to stand on our own legs; the legs being of our own people who have to be educated as soon as possible and provided with suitable jobs and fed well.

If not in Pakistan with education they will find jobs in Saudi Arabia, the golf region and other places and send money back which will help our foreign exchange balance. Therefore this chance should not be allowed to go waste take a decision of time and let it default, and do not accept new terms and conditions of donors in which we sign a deal for US $ 5.5 billion and they pay us less then 1.75 billion and keep the rest towards adjustments of previous liabilities, costs and interest and increase our future liabilities more. Do we need that or we can still live without it? This might be a difficult path for our survival, but we should not miss it.

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