All these years it has been the working classes of the world who have been carrying on their fragile shoulders the ever mounting load of opulence of the rich. But the slowdown of the wheels of the national economies following lockdowns of varying degrees world-wide in the wake of Covid-19, has begun eating into even the hand-to-mouth daily keep of these working class millions living below and just above the poverty line. And as they seem to be keeling over from starvation the accumulating burden of the affluent rich on their weak shoulders is palpably lurching dangerously threatening to come down flopping along with the physically exhausted working classes and peasants.
Naturally, those currently occupying the commanding heights of the global economy, not countenancing such a fate are bending backwards to provide some kind of immediate relief to the working classes to allow them with just enough sustenance to continue doing what they have been doing for ages - carry on their fragile shoulders the mounting burden of opulence of the handful of rich.
However, in the devastating pandemic crisis one can clearly see an opportunity for the working classes in developing countries - an opportunity to regain their right to self-determine their bargaining powers. Meanwhile, the pandemic-induced circumstances are seemingly forcing the State back into Governance to replace the Market in which the rent seeking private sector has been thriving all these years, pilfering utilities, evading taxes, committing bank default as some kind of divine right and enjoying frequent official bail-outs at the cost of honest taxpayers.
As a consequence, the world seems to be slipping out of the debilitating grip of the neo liberals as the Covid-19 is visibly and fundamentally altering the way most of us live. Indeed, the global focus per force has turned to the working classes. Workers are on the move with newfound popular recognition and the State has been forced to act to support working people. And there seems to be no automatic return to neo-liberal normalcy after the virus has worked its way through world politics. In fact, there is a possibility that before long as the virus continues to devastate the world the working classes would revive the system of collective bargaining by re-establishing trade unions.
Looking to the future, Inderjeet Parmar, professor of international politics at City, University of London and Atul Bhardwaj an honorary research fellow in the department of international politics at the same University write (We can build a better world after Covid-19 by dragging the state back into public services, published in The Wire) that if there's one thing that the Covid-19 pandemic has illuminated with unerring clarity, it is that there is massive public support and sympathy for working classes everywhere.
"The starving of funds for our public services, especially healthcare, is revealed in all its horror - at both the rates of infection and mortality, and the sight of frontline health workers battling a deadly disease without masks, gloves and other protective equipment. The popularly-forced allocation of massive funding for the public sector has led to the definite 'return of the state'. The moral and material authority of the market, has seemingly disintegrated".
According to Ronald Rajah, Director, International Economy Programme of Lowy Institute, in the process, globalization will likely suffer greatly, even if it is not about to completely unravel. Many aspects are said to be too deep-rooted and the commercial logic too powerful for this to spell the end of globalization itself.
"But globalization was already heading in reverse before the crisis and this will only be reinforced by the virus experience. Businesses will rethink long and complex supply chains, governments will feel compelled to ensure domestic capacity in more areas deemed critical to the national interest, protectionists will feel empowered, and domestic politics will demand more barriers to people's ability to cross borders, whether temporarily or permanently.
On the other hand, Herve Lemahieu, Director, Asian Power and Diplomacy Program of Lowy Institute maintains (Multilateralism and the Nation State), that a counter current will reinforce the importance of nation states and self-sufficiency and above all, this crisis is a test of internal sovereignty and resilience as the coronavirus exposes the competence, and lack thereof, of governments and institutions.
The economic predicament that Pakistan has been facing since 2008 is similar to the one we had faced in the decade of the 1990s. And like then, the crisis, just before Covid-19 hit us, too was the direct result of the mismanagement of the dole-dependent economy during the preceding regimes. And like the regimes of the 1990s, during the pre-Covid-19 period, as well the governments, both the previous ones and the current one, seem to have continued with the policies formulated during the regimes that had preceded them. That is why our economy was crumbling just about the time Covid-19 had started rearing its head.
And even now, the dole dependence is continuing as the IMF has allocated to Pakistan on our request $1.4 billion from its low-cost, fast-disbursing loan under the fund's Rapid Financing Instrument (RFI) to deal with the adverse economic impact of COVID-19. Also a number of countries have rescheduled their bilateral debt until December this year but there has been no write-offs so far as desired by Prime Minister Imran Khan.
It is, therefore, time to do some candid appraisal of the ground realities. We don't have our own sources of energy; we do not own enough capital to provide even two square meals a day to our galloping population; and being too far behind in world ranking in education, our capacity to acquire knowledge-based technologies is too limited.
One way of overcoming these shortcomings is to go around the world with a hat in hand. This we have been doing since independence, but have done nothing with all the dole received so far, other than to create the impression of false affluence. More of the same is not going to make us behave differently. The other way of extricating ourselves from this impossible situation is to bring back the State in the affairs of governance and take to the road of self-sufficiency making use of our comparative advantages like the youth bulge and agriculture.
Governments in poor countries, especially those which are energy and capital deficient with very poor access to technology need to be excessively interventionist and business-minded to be able to rationalize and reduce the burden on the import bill by being experts of the global markets as are the international oil sharks who rake in millions on price fluctuations of as little as a minimal most fraction of a cent.
The problem to understand for the State is that not everything that is financially profitable is of social value and not everything of social value is profitable. Reality TV, fashion, sports and gambling casinos are all of questionable social value, but each is quite profitable and exists in the private sector. On the other hand, few would argue that the armed forces, coast guards, police, fire brigade, libraries, parks, public schools, government hospitals, public transport of all kinds and public housing carry immense social value yet couldn't exist if they were required to be financially profitable. The proper role of government is the latter.
A government has no business doing business. Sounds logical. But a government devoid of the necessary instincts of a businessman would find it almost impossible to frame socio-economic policies ensuring progress with equity. And a government without business know-how would hardly be able to maximize social benefits of a public-sector entity at a minimal monetary cost. Also, their burden on the budget could be significantly eased if the government were to collect taxes from all citizens who earn taxable incomes. Only a business-minded government would know the importance of enforcing tax laws strictly across the board without exception and exemption.
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