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Hostility to IMF, World Bank reforms
Reportedly, the government has been advised by the IMF to explain the
rationale behind the IMF-mandated 'reform' programme to the general
public so as to enlist its support (Dawn, 17-11-02).
One wonders whether public support is a function of suave explanations
or whether it is a function of the outcomes which should be visible to
the naked eye.
We are a public that is getting increasingly restive with the passage of
time as it is not just the past three years when these 'reforms' were
introduced.
The country took off in this direction around late-1980s which direction
was maintained overall by both the PPP and PML governments as a
compulsion of the beggars who could not be the choosers or so it was
explained by the apologists in defense of a route that has been disputed
strongly by many independent economists.
These opinion makers require no fresh explanation to be convinced or
otherwise of the policy path we have been treading since late-1980s and
more ardently since October 1999 with the induction of a private sector
counterpart soul mate of the IFIs as our finance minister.
As for the general public, it is not the intricacies of the policies
that interest them as much as the outcomes that they have been waiting
for since the grey Ayubian decade of the 1960s when they were first
promised the trickle which has not reached them ever since. Nor does the
trickle appear to be anywhere nearer even after the turn of the century
when it is unfortunately being promised again after considerable
developments in development theory and practice in the last half century
that turned the trickle-down model on the head.
Instead of discarding it into the dustbin of history, our finance
minister keeps reviving this archaic concept much to our collective
embarrassment. Against this irrational backdrop, is it at all possible
to explain the rationale of current policy direction to a general public
that has been bitten several times over and is, therefore, exceedingly
shy? An exercise in winning the public over should, therefore,
demonstrate a visible break from a past policy route and a faster
response to their pent-up needs for whose satisfaction the current
generation of the deprived is not willing to wait even half as long as
their previous generation did.
There is a need for swift action and speedy delivery. We, therefore,
need to determine if there are developments in the offing that would
satisfy the basic requirements of the exceedingly bright but equally
deprived and, therefore, an impetuous fire-brand upcoming poor
generation.
We also need to figure out if there are any silver linings on our policy
front that would engage the enormous talent amongst the poor youth that
would otherwise be wasted due to our collective indifference, neglect,
and selfishness.
Unless our policy direction is tested on the above touchstones, we will
have no new rationale to give to either our general or special publics.
On the contrary, we should be preparing for crisis management of a
situation that is likely to explode sooner rather than later if it has
not started exploding already.
Discerning minds ought to see eruptions taking place already from a
rumbling volcano on which we seem to be sitting tight and pretty
oblivious of the reality which the privileged view only as "negativism,"
if presented in its stark form. Should our 'reform' effort then try to
merely keep the sea of discontent contained?
Or, should a definite thrust be made in the direction of reversing the
tide of discontent that might otherwise trivialize all effort made in
the name of 'reform'? Given the state of affairs, it is in the latter
direction that visionaries ought to be moving and fast.
This is no longer a wish horse that we beggars would like to ride. The
World Bank has already recognized the need for meaningful land reforms
as a sure way to take a jab at the root cause of poverty and deprivation
in the country.
It is reportedly working on an agenda for land reforms in Pakistan to
raise agricultural productivity, reduce rural poverty, and realize the
full potential of economic growth (Dawn, 13-11-02).
The key issues of land ownership inequality, crop sharing pattern, and
low farm yields have been recognized by the World Bank. During the
1990s, land concentration has increased in the hands of big farmers.
This has implications not just for agricultural productivity, farm
output growth, and poverty but also for the pattern of demand for
industrial goods, industrial growth, and thereby overall economic growth
of the country that the finance minister wishes to hit with a strategy
that remains mostly unrealized due to the absence of underlying
necessary conditions that should also be sufficient.
The naive reformers in the country have proposed corporate farming for
Pakistan to address some of the above issues which too has been strongly
disputed as it is akin to eating cakes if no bread is available. As
already explained extensively before, corporate farming suits the
conditions of development in the developed world and is by no means
suited to our conditions of underdevelopment which require solutions
specific to our needs.
A cornerstone of our much sought-after-solution is meaningful land
reforms which dire need appears to have been seen in the quarters of the
World Bank. If the World Bank is able to throw it up visibly on the
national reform agenda, it will indeed be a very welcome development.
Needless to add that a one-time land reform effort will not be like
hitting a home run as relentless follow-up in the form of 'continued
reform' will be required to achieve the goals of land reform as are
being articulated already by the World Bank. While the World Bank's
intended direction as above is welcome, one wonders if the timing is
appropriate politically. For, it was in the past three years when the
country experienced a relative freedom or so it appeared from the
influence of interest groups from the big farming community in the
policy arena. At that time, land reforms remained a deferred item as the
policy elite claimed preoccupation with a host of battles on other
fronts and preferred not to open this front in agriculture. On the
contrary, they have come close to succumbing on the issue of corporate
farming which will be a devastating route to follow, as cautioned
before.
Although better late than never, the World Bank has kicked up the issue
of land reforms around a time when big farmers or their scions have
returned to the assembly halls and will soon make way also into the
executive branches of the governments at the national and provincial
levels. How the land reform proposal will flow past these barriers that
are the negative spillover effects of Pakistan's democratic process will
remain to be seen.
Suffice it to assume that it should flow as smoothly or as forcibly as
the IMF-WB-mandated free market agenda has been moving for the past over
a decade irrespective of the party in office or the type of government
and regardless of public opinion. If "beggars have not been choosers"
thus far, then will the right to choose be given now? If the right to
choose has been denied all these years and will be given now, then it
will be safe to conclude that the land reform effort, even at the behest
of the World Bank, was half-baked and half-hearted. And, that the
elite-elite alliance of the world is all too pervasive to allow a
meaningful change in the lives of those on the peripheries of the third
world.
That this has implications for the issue of terrorism occupying the
centre-stage of the world should be seen by the IFIs before they give in
to the persuasions of our landed gentry. Land reforms should then be
pushed through as an integral component of the anti-terrorism strategy
of the developed world.
The marginalization and displacement of the peasant and farm workers
should be pre-empted through effective land reforms so as to also
prevent their induction into informal armies in the name of religion
which have been providing alternate forms of sustenance and livelihood,
of late. Only then will we move towards a win-win situation required
essentially to make the world a safe place for all its inhabitants, the
importance of the resolution of the disputes in Palestine, Chechnya, and
Kashmir notwithstanding.
It will be through the above route that a mutuality of interests will be
struck between Pakistan's general public and the IFIs'. Otherwise, the
sovereignty issue will remain valid and will be trumpeted by those
political segments that do not have much to offer by way of feasible
alternatives.
Sovereignty issue comes up whenever there is a divergence of interests.
So, of those who raised the issue of sovereignty, there is a group of
professionals that offers many alternatives, a part of which is now
being heard from the World Bank in the form of land reforms. The
politicians who raised the issue of sovereignty could find their way
into the legislative halls although without popular alternatives that
one might still like to hear from them as well. The sovereignty issue
will be taken care of if consensus emerges on the direction of economic
strategy that requires a radical turn.
While the World Bank may now attempt to push this new policy line, it
will need to brace itself for formidable resistance from not just the
powerful big farm lobbies but also from those policy elite who remain
propped up in the policy corridors with the help of elite influence. It
is this latter group that would much rather have a lot of breath and
energy consumed in once again trying to explain the rationale behind a
market reform process that has given more grief than bliss to the people
of the country.
People do want to know how the problem of shortfalls in revenue
generation and high fiscal deficits can be addressed meaningfully in an
iniquitous taxation structure and a growth-averse environment which has
backward and lateral linkages as briefly reviewed herein. While CBR does
need a reform, is it possible to do so very effectively for an
organization caught in a web of national and cultural influences? And,
while micro-level reform is certainly the need of the hour, how
meaningful might it be unless reform is also initiated in parallel at
the macro economic level (as discussed here) with reform process flowing
in all directions and then getting ironed out at the centre?
These are not issues that can be compartmentalized as either issues in
macroeconomics or development economics or organizational management or
political economy. These issues cut across fields and disciplines and
require inter-disciplinary approaches. Better still, according to Gunnar
Myrdal who depicted the famous Asian Drama in 1968, there are no
economic, political, social, anthropological, or psychological problems;
they are just 'problems' which should be studied not in isolation but in
their mutual relationships due to their inter-linkages and complexity.
If this approach is taken, then there would be little need to privatize
a turned around bank with all its negative spillovers of staff
retrenchments and unemployment especially after the bank has been turned
around.
There will also be little need to keep the utilities viable by jacking
up the tariffs. May be there has been development on this front which is
why IMF's planned focus is now on turning the utilities around instead
of increasing the tariff indiscriminately. But if a bank or a utility
can be turned around in the public sector, why can it not continue to
function effectively in the public sector? It is good management that is
needed both in the public as well as in the private sector. To put up a
turned around organization for sale just because it is a part of a
financing package betrays an absence of a rationale that no amount of
explanation can make up for.
To say that it is a way of inducing investment and thereby output,
growth, jobs, and poverty alleviation is that long-winded trickle-down
route which is disputed strongly in development theory and refuted in
practice. Notwithstanding the importance of investment, it is a
departure from sole reliance on this outmoded route that we need to make
in order to hit that home run for which the nation has been waiting for
over half a century. That the World Bank has almost seen the need for a
radical change to strike at the root cause through meaningful land
reforms is a silver lining indeed.
So, it is not the general public that requires explanations of a path
treaded in vain repeatedly before. Rather, it is the rationale behind
the new light now beginning to emanate from the World Bank that needs to
be explained to the domestic policy makers instead.
Dawn
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