Pakistan Social Council organised a discussion on the impact of IMF and World Bank on the economy of Pakistan, here on Friday. Reading her keynote paper, a research fellow of the Quaid-i-Azam University, Dr Noor Fatima, said that in recent past the country received some good news that we had broken off with the IMF.
However, looking at the balance of payments situation, she finds our balance of payment situation so bad that she feared we might have to invite the IMF again. The IMF advises Pakistan to reduce public expenditure and concentrate on investment but the rate of savings in Pakistan (10 to 15 percent) is so low that we could not find enough money to do so, and coupled with bad management to finance development schemes and because of this paramount reason the country must find foreign donors.
Be that as it may, she proposed the theory that both the IMF and the World Bank had been interfering in our economic governance. The scholar said Pakistan had no source of revenue, and therefore, it had to find external donor sources to run day to day business.
However, with the passage of time the aid factor also increased due to political expediency of former governments. Later, seemingly to ameliorate the economic condition of the developing world, the USA taking a lead role as well as the developed world, introduced a number of plans such as the Washington Consensus (out of which emerged the WTO), neo-liberalism and Millennium Development Goals, transformed international financial institutions as agents of 'Free Market Economy' concept.
In her assessment, during the last decades, neo-liberalism emerged as a powerful modern ideology during the last two decades when the economic, political and sociological debates showed increased pre-occupation with ideological foundation, theoretical basis, and practical orientation as a world-wide phenomenon and these theories and concept affected many nations, and Pakistan found itself included in this ideological fix.
These economic aims were also buttressed by a number of other ideological formulations such as the end of history, clash of civilisations as well as neo-liberalism, and begin to have profound effect on the economies of second world countries (labelled as the South).
According to Noor Fatima, Pakistan lost many economic opportunities in 1990s, always appearing to rely on foreign aid for economic development. She said this was basically a short-sighted policy, and could not bring about the prosperity which was promised to the nation.
Further, in her view, the country had been victim of the scheming role of the compradors and bourgeoisie who did not allow the capital goods industry to grow since they were profiteering from imports of the developing nations.
After accepting the dictates of the IMF macro-economic indicators of poor countries, such as Pakistan, registered better performance but this was a false view.
What was true was the fact that bogey of economic failure and rapid change of the governments made it easy for economic pundits of former governments to ask for more loans when in fact major macro-economic indicators of 1990s, such as GDP, inflation, balance of payments were registering downward trends.
The scholar opined that the economic development of Pakistan could have been significantly better if an alternative policy to pay greater attention to capital industries had been initiated instead of adopting a policy aimed at promoting consumerism.