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A FRIEND sent me his greetings on New Year with this verse: “Apnay haathon say dastar sumbhaloon kaisay/ Donon haathon mein kashkol pakar rakha hai.” (How should I hold up my turban when I hold the begging bowl with both my hands?)
The truth of this verse hit me when a news item in this paper reported the proceedings of the Senate recently. The government had come under fire from a PTI member for piling up external and domestic debts to such proportions that servicing them was becoming impossible.
One should not dismiss this as political gimmickry to embarrass the ruling party. After all, which party in Pakistan has even attempted to be self-reliant by adopting austerity as a policy to reduce the government’s dependency on loans? With few parties remaining in office for too long, every ruler spends money with abandon knowing that the chickens will come home to roost when he will not be around to cope with the problem.
Aid tightens the stranglehold of the aid-giver.
The fact is that the issue of loans is a matter of serious concern not just in economic terms but also for its political implications. It also has a disastrous impact on the national psyche.
Whatever the law minister might have said in defence of his government’s policy, the statistics shared with the house were quite alarming. It was disclosed that the net domestic debt of the government had gone up from Rs9.49 trillion in 2013 to Rs13.17tr in 2016. External debt had shot up from $48.1bn in 2013 to $57.7bn in 2016. Thus the gross public debt stood at Rs 19.68tr in 2016 (66.5 per cent of GDP), a substantial jump from Rs14.3tr in 2013.
This is unpardonable, especially because the PML-N has nothing to show by way of achievement in terms of human resource development. The bulk of whatever revenues it has collected has gone in servicing earlier debts, building up the defence forces and the financing of an extravagant administration. A cursory look at the federal budget establishes the truth of the matter. Corruption stinks but ostentation burns the eye.
This kind of economic management has had two very negative consequences. First it has resulted in the government’s failure to boost human development in the country. The worst affected sectors primarily are health and education. The government has been spending under 1pc of the GDP on healthcare and barely 2pc on education. To neutralise to an extent the ill effects of its flawed health and education policies, the government has encouraged privatisation in these sectors. As a result, the service charges have been rising as is inevitable when private entrepreneurs enter the health and education fields. Inequity has also increased.
The impact of this failure of the state to strengthen its human resources has been felt in a big way in the economic and social development of the country. This is bad enough.
Then, with a flawed taxation system which doesn’t tax the wealthy elite, the country is compelled to literally beg for aid — military and economic — from foreign countries.
It is a well-known fact of life in international politics that a recipient state is expected to return the economic and military favour it accepts from an outside power. Big powers do not believe in giving free lunches to smaller states. It is important to understand that this does not simply amount to servicing the debt that has been incurred at high interest. It also calls for toeing the foreign policy line of the donor.
Hamza Alavi, the late scholar of world renown, long argued that the dynamics of Pakistan’s foreign policy were geared to the interests of the US because of the military alliances it had joined. According to him, Pakistan became a “servile retainer of American interests” by virtue of the aid it received.
It is absolutely naive on our part to believe that the aid we receive is in the interest of Pakistan. It is not. Many studies have shown how massive amounts of inflow into Pakistan have failed to bring about any development that was supposedly intended. They only create the culture of dependency. Moreover aid tightens the stranglehold of the aid-giver on the recipient.
We must be wary of this phenomenon which has unfailingly come to the fore when our dependence on any state has increased. We saw it happening in the case of Saudi Arabia and it is likely we will experience a similar equation with China. This reliance has given aid donors the leverage to blackmail us.
Worst of all, this culture of dependency seeps down from the highest to the lowest leading to a loss of dignity in all people, even in their personal life. It has affected the national psyche. As for the rulers who are the key beneficiaries of this inflow of aid — even in their personal lives — the absence of a sense of shame is shocking.
Published in Dawn, January 20th, 2017
