Amidst the current political circus, swirling around the fantasy of punishment for those who belatedly acknowledged their role in the Pakistani political play and those who directly benefited from it, we seem to have forgotten the pernicious effects this has had on Pakistan’s economy. This is not to blame people from a specific political creed but analyzing from a greater holistic level, we have only received teleological explanations, be it from the ex-finance ministers or other focal people for the economy – retrofitted with political biases. The truth, however, in its crudest form is that this was a policy failure at a very intrinsic level from both sides of the aisles where rather than playing ball, our politicians drew facile narratives to colour the public perception to further their hateful and emotional politics.
This habit of misusing and misconstruing financial data and economic statistics to get a one-up on their political opponents has resulted in the current climate of political polarization we see today. The Sharif government prides itself on keeping the dollar-to-rupee rate artificially stable throughout its tenure. They convinced voters this would make imports cheap – which in itself is a policy direction that wouldn’t be well received by other emerging economies. As many leading academics have pointed out that while “… all emerging economic giants depend on exports, people in Pakistan advocate imports”. This goes on to imply that gas, crude oil or even the tea we import from Sri Lanka should’ve gotten cheaper. Yet this insinuation never materialized; Pakistanis were stuck paying ever-increasing prices for the goods and services they needed to survive. Meanwhile, our exports, which were already struggling to match international standards of quality, found themselves uncompetitive price-wise. All because of our undeservingly and unnecessarily high dollar rate; something that many fervent N-League supporters are happily reminiscing about.
Our politicians drew facile narratives to colour the public perception to further their hateful and emotional politics.
On the other end is the PTI under Khan. Taking over a crumbling economy, he was forced to revise the dollar rate to what the free market deemed it to be. And you would never hear the end of it. Nearing his economic breaking point and political desperation to retain mass public support, he had to show the people something of value. Therefore, Khan slapped a subsidy on petrol and artificially slashed the price to unbelievably low levels. His cult-like followers put him on a pedestal for his “Economic Ingenuity”. But what the rest of the world saw was a bankrupt nation spending money it didn’t have. And for this same reason, the IMF refused to loan Pakistan any more money; knowing well this would be unpayable.
Finding himself ideologically bankrupt, Khan goaded the United States into Pakistan’s political impasse. He claimed that this was one of their old-fangled regime-change operations and that the opposition party was only an accessory too.
While this seems flimsier on the ground, Khan took this space to funnel up an anti-US narrative which resonated well with the masses. His fall from grace in April may have potentially averted a man-made crisis that would’ve seen a nation of 220 million people default. Naturally, Khan is a populist and one who failed miserably on the domestic front when he was in power. It is not the first time someone has scapegoated ‘foreign conspiracy’ as a reason for their ousting and won’t be the last. But to conflate these two, to trigger public hysteria wrapped up in lurid nationalism, will have far-reaching consequences for Pakistan – transcending party politics.
Using political antics for economic gains is not only a national phenomenon but an international one. It only takes a plunge down the rabbit hole to look at the mass manipulation of facts and figures by various leaders in recent history. For instance, Muammar Gaddafi. He served as the de facto ruler of Libya for over 40 years and was later overthrown by a NATO-backed civil war. Today, many fondly remember him as Libya’s saviour, praising him for instituting universal healthcare and passing out generous transfer payments for menial things like marriage and down payments on a new car. What many tend to conveniently forget is Gaddafi was brought down in popular revolts under the umbrella of the Arab Spring – when systemic corruption crippled Libya’s economy and left a third of the population unemployed. Across the waves, a similar story takes hold in Venezuela. Hugo Chavez rode a wave of populism to become the president, and interestingly, his rule coincided with record-breaking oil revenues from Venezuela’s oil reserves in the early 2000s. Chavez moved to nationalize key industries and provide the population with social safety nets like healthcare, education etc. While these could be applauded, there were dire long-term consequences. For one, he left the Venezuelan economy completely dependent on oil exports. And when oil prices came crashing down in the late 2010s, Chavez’s successor was left to pick up the pieces of a broken economy.
This begs the question: how long will we let the men in charge get away with toying with our future? No good has come of turning a blind eye to the truth laid bare. But this isn’t a problem as easily solved by passing a bill or signing a check. It requires a willingness by those being governed to hold those governing to a higher standard.
The writers are students at the London School of Economics (LSE)