Famed economist Daron Acemoglu says: “Nations are not like children; they are not born rich or poor. Their governments make them that way”.
The government is a critical variable in a nation’s economic development. Over time, many underdeveloped countries have followed prudent policies to emerge from poverty. Pakistan is reaping the bitter fruits of dismal governance besotted with a borrowing syndrome.
The government had sought IMF augmentation of its $7.6 billion loan to $11.3 billion. However the IMF has refused even to release the last tranche of the original loan suspended since May 2010. The reason given is the failure to implement crunching levies and taxes by our desensitised government committing the same.
Bereft of sanity, we are caught in a borrowing vortex. Debts have soared to $59 billion from $47 billion two years ago. The debt-to-GDP ratio has shot up from 64 to 74 percent in one year. An annual Rs46 billion is being spent to service our energy sector circular debt alone. Youth unemployment has soared to almost 50 percent. Public sector development has seen less than five percent investment whereas the energy starved private sector has grinded to a standstill.
Our present economic predicament, partially part of a global down-slide, has its roots in the economic policies followed over the years. Our socio-political environment, plagued with corruption and inefficient governance, has never been conducive for sustainable development.
Shakespeare’s Shylock just wanted a pound of flesh; the policies of our affluent politicos have reduced the masses to a mere skeleton. The result poses a greater threat; ideological motivation with economic deprivation has become a lethal mix.
As a final nail in the proverbial coffin, we have taken upon ourselves to fight an alien war. It has cost us thousands of lives and more than $35 billion. It has also ruined the country. The exorbitant cost in life and money is ‘rewarded’ with pittance and political assistance. This is not for the multitude that bear the brutal brunt but for a handful that thrive on it.
Proponents of the borrowing syndrome draw parallels with the Marshall Plan of post WW2 Europe. It provided $13 billion to Western European economies to restore physical infrastructure destroyed during the war. The Marshall Plan intervention was short, quick, finite and above all well spent. However, it too was strongly motivated by political reasons.
Coming back to the present, Ambassador Munter minced no words when he said that his country had the right to influence (manage) our internal affairs given the aid they were providing. Today, loans and grants from the US and donor agencies, inevitably under its control, are merely a tool of exploitation. Contrary to given arguments, corrupt governments receive more aid. No wonder nothing is left after it passes through this clogged sieve of unlimited corruption. The aim is not to alleviate suffering of the common man but to reward toadies towing their master’s line.
In the late 1990s a $4.8 billion IMF loan to Russia never made it to the treasury. Billions were deposited directly into the offshore accounts of Russian politicians, bankers and mafia. The nation never saw a single ruble, yet was responsible for paying it back with interest. President Clinton’s Treasury Secretary Robert Rubin, testified before a congressional panel that much of the Russian loan “may have been siphoned off improperly”. This is only one example where monetary aid, enslaving a nation, simply helped a kleptocracy move billions to personal coffers. Our saga is the same.
Joseph Stiglitz was a member of Bill Clinton’s cabinet. He was chairman of the president’s council of economic advisors, a former chief economist of the World Bank and winner of the 2001 Nobel Prize for economics. He was also fired from the World Bank in 1999 for resisting globalisation World Bank (American) style. His assertion was that an IMF/World Bank “Country Assistance and Austerity Plan” often led to the dissolution of a crippled society.
Stiglitz’s explosive book “Globalisation and its discontents” is a scathing indictment of the IMF and World Bank. He accuses them of preaching austerity and economic reform, yet imposing crippling conditions on third world countries. According to him, the modus operandi is to conduct “economic raids on debtor nations” and “fire sale of national assets to the benefit of foreign corporations”. “It has condemned people to death,” he said.
A state’s sovereignty and road to prosperity depends on its ability to make decisions independent of external authorities and its capacity to govern. Aid dependency is a yoke that inhibits both. It is a shot that gives an addictive economy a temporary high. Touted as an antidote, it is a major cause of our present asphyxiation. With an ideologically bankrupt leadership being the custodian of a non tax paying privileged class, the solution does not lie in austerity IMF style and taxing the poor further. Benjamin Disraeli said “To tax the community for the advantage of a class is not protection, it is plunder”.
The merciful rejection by the IMF may have been precipitated not by our inability to meet the performance bench marks but the post Raymond Davis ISI-CIA cold war. All was not well in the recent meeting between Lt General Pasha and Director CIA, Leon Panetta. Scheduled for three days (April 11-13) the DG ISI made an abrupt departure on April 12 after a two and a half hours meeting with Leon Panetta. Lt General Pasha also did not meet any other Pentagon official as is the norm in these visits.
Pakistan today epitomises the private opulence of our political elite; as a beggared and battered country sinks ever deeper under debt and diktat. At this critical juncture the “national reconciliation government” is yet another act of shame. The PPP wants to ensure passage of the budget whereas the ‘Qatil’ League’s politics has been reduced to ensure the freedom of just one man – Moonis Elahi. The survival circus continues; the nation, from Fata to Karachi, may “rest in peace”.
Lord Acton said: “When a rich man becomes poor it is a misfortune. When a poor man becomes destitute, it is a moral evil”. Our rags to riches politicians could do with a bit of poverty and a thought for Pakistan. This may allow a semblance of life and dignity to this betrayed land and the poor made destitute within.
The writer is a freelance contributor.
Email: miradnanaziz@gmail.com
Source : http://thenews.com.pk/TodaysPrintDetail.aspx?ID=43024&Cat=9
The government is a critical variable in a nation’s economic development. Over time, many underdeveloped countries have followed prudent policies to emerge from poverty. Pakistan is reaping the bitter fruits of dismal governance besotted with a borrowing syndrome.
The government had sought IMF augmentation of its $7.6 billion loan to $11.3 billion. However the IMF has refused even to release the last tranche of the original loan suspended since May 2010. The reason given is the failure to implement crunching levies and taxes by our desensitised government committing the same.
Bereft of sanity, we are caught in a borrowing vortex. Debts have soared to $59 billion from $47 billion two years ago. The debt-to-GDP ratio has shot up from 64 to 74 percent in one year. An annual Rs46 billion is being spent to service our energy sector circular debt alone. Youth unemployment has soared to almost 50 percent. Public sector development has seen less than five percent investment whereas the energy starved private sector has grinded to a standstill.
Our present economic predicament, partially part of a global down-slide, has its roots in the economic policies followed over the years. Our socio-political environment, plagued with corruption and inefficient governance, has never been conducive for sustainable development.
Shakespeare’s Shylock just wanted a pound of flesh; the policies of our affluent politicos have reduced the masses to a mere skeleton. The result poses a greater threat; ideological motivation with economic deprivation has become a lethal mix.
As a final nail in the proverbial coffin, we have taken upon ourselves to fight an alien war. It has cost us thousands of lives and more than $35 billion. It has also ruined the country. The exorbitant cost in life and money is ‘rewarded’ with pittance and political assistance. This is not for the multitude that bear the brutal brunt but for a handful that thrive on it.
Proponents of the borrowing syndrome draw parallels with the Marshall Plan of post WW2 Europe. It provided $13 billion to Western European economies to restore physical infrastructure destroyed during the war. The Marshall Plan intervention was short, quick, finite and above all well spent. However, it too was strongly motivated by political reasons.
Coming back to the present, Ambassador Munter minced no words when he said that his country had the right to influence (manage) our internal affairs given the aid they were providing. Today, loans and grants from the US and donor agencies, inevitably under its control, are merely a tool of exploitation. Contrary to given arguments, corrupt governments receive more aid. No wonder nothing is left after it passes through this clogged sieve of unlimited corruption. The aim is not to alleviate suffering of the common man but to reward toadies towing their master’s line.
In the late 1990s a $4.8 billion IMF loan to Russia never made it to the treasury. Billions were deposited directly into the offshore accounts of Russian politicians, bankers and mafia. The nation never saw a single ruble, yet was responsible for paying it back with interest. President Clinton’s Treasury Secretary Robert Rubin, testified before a congressional panel that much of the Russian loan “may have been siphoned off improperly”. This is only one example where monetary aid, enslaving a nation, simply helped a kleptocracy move billions to personal coffers. Our saga is the same.
Joseph Stiglitz was a member of Bill Clinton’s cabinet. He was chairman of the president’s council of economic advisors, a former chief economist of the World Bank and winner of the 2001 Nobel Prize for economics. He was also fired from the World Bank in 1999 for resisting globalisation World Bank (American) style. His assertion was that an IMF/World Bank “Country Assistance and Austerity Plan” often led to the dissolution of a crippled society.
Stiglitz’s explosive book “Globalisation and its discontents” is a scathing indictment of the IMF and World Bank. He accuses them of preaching austerity and economic reform, yet imposing crippling conditions on third world countries. According to him, the modus operandi is to conduct “economic raids on debtor nations” and “fire sale of national assets to the benefit of foreign corporations”. “It has condemned people to death,” he said.
A state’s sovereignty and road to prosperity depends on its ability to make decisions independent of external authorities and its capacity to govern. Aid dependency is a yoke that inhibits both. It is a shot that gives an addictive economy a temporary high. Touted as an antidote, it is a major cause of our present asphyxiation. With an ideologically bankrupt leadership being the custodian of a non tax paying privileged class, the solution does not lie in austerity IMF style and taxing the poor further. Benjamin Disraeli said “To tax the community for the advantage of a class is not protection, it is plunder”.
The merciful rejection by the IMF may have been precipitated not by our inability to meet the performance bench marks but the post Raymond Davis ISI-CIA cold war. All was not well in the recent meeting between Lt General Pasha and Director CIA, Leon Panetta. Scheduled for three days (April 11-13) the DG ISI made an abrupt departure on April 12 after a two and a half hours meeting with Leon Panetta. Lt General Pasha also did not meet any other Pentagon official as is the norm in these visits.
Pakistan today epitomises the private opulence of our political elite; as a beggared and battered country sinks ever deeper under debt and diktat. At this critical juncture the “national reconciliation government” is yet another act of shame. The PPP wants to ensure passage of the budget whereas the ‘Qatil’ League’s politics has been reduced to ensure the freedom of just one man – Moonis Elahi. The survival circus continues; the nation, from Fata to Karachi, may “rest in peace”.
Lord Acton said: “When a rich man becomes poor it is a misfortune. When a poor man becomes destitute, it is a moral evil”. Our rags to riches politicians could do with a bit of poverty and a thought for Pakistan. This may allow a semblance of life and dignity to this betrayed land and the poor made destitute within.
The writer is a freelance contributor.
Email: miradnanaziz@gmail.com
Source : http://thenews.com.pk/TodaysPrintDetail.aspx?ID=43024&Cat=9
No comments:
Post a Comment