Dr. Manzur Ejaz questions the efficacy of neo-liberal economic policies in Pakistan.

From the day of his coronation, the emperor was naked. He had to be because his lineage never bothered to cover itself, even with thin, transparent cloth. However, after 9/11 when Americans entered the area with their night vision goggles, they distributed rose-tinted glasses. Now the emperor did not appear naked; he seemed to be clad in magnificent dress that could give Indian and Chinese imperial garb a run for its money. However, for some reason, in recent weeks, our foreign benefactors have started withdrawing these glasses and, in Washington, political bhands are queuing up in long lines. They hope to earn applause and some quick bucks by telling the world that the emperor is naked.

Before 9/11 there were all kinds of big mouths and deep throats working overtime to inform the world that Pakistan was a failed state that sheltered Taliban and Al Qaeda elements and was involved in nuclear proliferation. Pakistan’s foreign reserves were so low that national bankruptcy was always a few weeks away. After paying the instalments on foreign loans and the military misspending, there was hardly anything left for those who wanted bread and butter and if possible, education and health. However, they did get some bombs.

What happened after 9/11 is well known. The termination of the hundi system along with rescheduled foreign loans and sale of state-owned corporations helped add to the state coffers, particularly, the foreign currency reserves. Insecure Pakistani immigrants also directed more investment to Pakistan. And the US pumped in billions of dollars to buy all kinds of loyalties as it had during the Afghan-Soviet war. The Indo-Pak peace moves also helped lift the borrowed confidence of Pakistan’s ruling class. A wave of unprecedented speculation took hold of Pakistan and the millionaires from the classes with large assets became billionaires overnight.

It reminds me of the proverb “anhay daiy pair haith bataira aa gia” (The blind man stepped on a quail). He then declared to his wife that he always ate good quality meat. Pakistan’s imported and rehabilitated economists have stumbled upon the 9/11 quail like the proverbial blind man. Since then they have been all over the world, receiving honour for the great “break-through” in which they have not played any part. As a matter of fact Pakistan’s economy has never stood on its feet — it was always propped up by US-leased and -sanctioned support.

To trigger the domestic economic growth, the State Bank of Pakistan took the most dangerous turns of all — it boosted consumer spending by printing money. It hyped up the growth numbers for a few years to make Ishrat Husain look good. The prices of assets were inflated — about 1,300 percent in some cases. Acting as cheerleaders of the US treasury, the World Bank, IMF and other international institutions joined the chorus to praise Pakistan’s economic progress.

All this was meant to create an illusion in Washington, in a bid to convince the US elite to stand behind America’s saviour, General Pervez Musharraf. Even for Washington’s anti-Pakistani core, while Pakistanis were devils Musharraf was an angel. Or that is what they pretended for the time being.

But something has drastically gone wrong in the last few weeks. First “deep throats” have classified Pakistan as a failed state and “big mouth” experts and legislators at a Congress Committee hearing whipped Pakistan in a way that Washington journalists have not seen for a while. They declared that the Dr AQ Khan case was still open and that Pakistan should be forced to hand him over!

And at a recent gathering of bankers, participants were convinced that Pakistan’s economy was at the verge of collapse. Nonetheless, they were mystified about the manner in which Pakistan goes in cycles of boom and bust. What a surprise!

A few months ago, a good friend from the World Bank was up in arms when I pointed out that Pakistan’s economic growth was borrowed from US largess and consumerism. Now everyone is coming around to parrot the arguments they could not earlier bear to hear. This U-turn is not unexpected because they all prosper in their jobs by constantly changing their tinted glasses as prescribed/ordered by the US treasury.

On the contrary, if they had done an elementary statistics course — a tall order — they would have seen the correlation between the US’ use of Pakistan and the latter’s prosperity bubble. It has occurred again and again during the military regimes of Ayub Khan, Zia ul Haq and now General Pervez Musharraf.

Furthermore, has the so-called neo-liberal economic model, being followed in Pakistan by imported economic managers worked anywhere? Did it succeed in South America where the neo-liberal economists presided over the countries? If so, then why are the socialists coming to power with a vengeance in South and Latin America? But people who keep changing their tinted glasses will never learn, as says Shah Hussain:

Suchi gal suniway kewnkar, kachi haddan wich rachi (How can they ever hear the truth with half-truths in their bones?).