Daily Times

True to its cause of serving the interests of rotten Pakistani capitalism, the current PML-N regime has unleashed aggressive neo-liberal policies stashing massive wealth into the coffers of the already obscenely rich. Paradoxically, a socioeconomic onslaught is wreaking havoc upon the oppressed classes. The imperialist institutions and rating agencies have never lauded a regime in Pakistan so generously. The IMF in its July statement wrote, “Despite its weak track record with previous programmes, Pakistan is making steady progress in meeting ‘reform’ benchmarks.”

The PML-N government depicts these as evidence of its superior handling of the economy. Security is returning, so we are told, and the economy is buoyant. However, Moody’s ratings report shows a different picture: “Institutional effectiveness has been hampered by factious relations between the executive, military and judicial branches of government and political event risks remain relatively high…Downward pressures on Pakistan’s credit rating come from very low fiscal strength, due to its high debt levels and weak debt affordability in light of a narrow revenue base. Meanwhile, ratings are held up by ‘support’ from multilateral and bilateral lenders alone, which raises several questions given the approaching end of the IMF programme next year, and the turbulent waters between Islamabad and Washington DC these days. Despite rising reserves, the level of external public debt poses a serious credit risk.” This analysis by Moody’s is in sharp contrast to the turnaround story being swanked by Ishaq Dar.

This so-called stability is more on the macroeconomic level. Figures are fudged so often that the finance ministry had to apologise to the IMF for giving spurious economic statistics last year. However, even macroeconomic realities are not that rosy. Newsweek recently reported: “Pakistan’s merchandise trade deficit has widened to $ 22 billion. In July, the monthly trade deficit surged to $ 1.77 billion, a 34 percent increase over the same period last year. Exports are declining. In the 2015 financial year, exports proceeds were three billion below target at $ 24 billion. Textile related exports, which account for almost 60 percent of all exports, will decline this year.”

The oppressed masses have been denied any economic benefits from the colossal fall in oil and commodity prices. Plunder by imperialist institutions in the form of debt servicing, the military’s exorbitant expenditures and corruption by the PML-N and other politicos continue unabated. Health, education and state enterprises are up for loot sale. In an environment with no political party representing the cause of the workers and the poor, mantras like privatisation have been inducted in the economic programme of all the mainstream political parties. Everybody seems to have capitulated to this vicious exercise, which makes products and services more expensive with massive redundancies adding to the ocean of the unemployed and brutal crushing of the working people by ‘market’ forces.

The ruling elites are jubilant, as the PML-N regime has showered them with unprecedented favours, bolstering their rates of profit. As in other sectors of the economy, the parasitic banking sector bosses have made enormous profits. The State Bank’s September 23 report points out: “The banking sector profit-after-tax surged by 52 percent year-on-year during the second quarter (April-June) of 2015, on the back of strong interest and non-interest income. The banking sector’s pre-tax profit stood at Rs 171 billion during the period. Though the reduction in policy rate during 2015 will impact the interest income of banks, the huge stock of long-term bonds accumulated prior to cut in policy rate and corresponding capital gain on such securities are expected to shield the profitability of the banking system.”

Millions of depositors mainly from middle and lower social layers such as widows, the elderly and other weaker sections of society who deposited their life long earnings in the banks and were literally surviving on those returns have had their incomes slashed by more than half. In the last three years, these rulers have cut the interest rates for depositors from around 12 percent to 5.5 percent. And lo and behold, every ‘economist’ and bourgeois expert is glorifying this heinous act as the greatest feat depicting the ‘economic turnaround’. Yet the private sector borrowing of this cheap credit has been minimal if any. The capitalist class refuses to invest in manufacturing or any productive sector with bleak profitability prospects. Only to indulge in gambling on the stock markets and speculation does the elite borrow this cheap money.

This reduction in rates is a reflection of the severity of capitalism’s crisis rather than its healthy growth. Bank of England Chief Economist Andy Haldane’s historical research shows, “Interest rates are lower today than they were when F D Roosevelt or Napoléon or Henry VII or Genghis Khan or Charlemagne or Julius Caesar or Alexander the Great or even Hammurabi were around.”A recent Washington Post article confessed: “Now, financial crises aren’t new, but global ones are. The only other time that has happened was in the 1930s. When everyone around the world becomes risk averse, you can’t even export your way out of trouble since there is nobody to export to. Interest rates fall to zero, and get stuck. It took the stimulus programme known as World War II, which nobody wants to repeat, to climb out of this economic trap as in the 1930s, but there isn’t anything to do so now.”

The misery of workers and the poor rapidly worsens with every passing day. The fragility and turmoil in the economy is reflected politically in the weakening of the incumbent regime. Nawaz Sharif is supposed to be the ‘democratic’ ruler of the country but it is Raheel Sharif who is calling the shots from foreign policy to the allocation of construction contracts. Economic stability is a myth, social development is a sham and poverty alleviation is a deception. Poverty and misery are on the rise with the crisis unravelling into an even bloodier conflagration. With economic decay, bourgeois democracy has floundered. Direct military rule is not on the agenda. The top military brass is enjoying more power perks than it could have gained under military dictatorship. All sections of the ruling classes are trampling each other in a stampede to plunder in the shortest possible period. They are ruling society with the sweltering volcanic lava of people’s wrath underneath the surface. Distractions and distortions of the corporate media and state repression cannot impose eternal bourgeois rule forever. The conditions for a revolutionary upsurge are ripe. The missing factor is the entrance of a revolutionary movement of the workers and youth in the arena of history to change their destiny. Once the class struggle erupts, these military and democratic edifices of capitalist coercion will crumble. In its revolutionary stride this movement of the workers and the youth will sculpt the Marxist leadership and party necessary to guide and accomplish a socialist victory for the toilers.

The writer is the editor of Asian Marxist Review and international secretary of Pakistan Trade Union Defence Campaign. He can be reached at lalkhan1956@gmail.com