Pauperization of Pakistan

Reviewed By Zubeida Mustafa
Source: Dawn

A little over two decades ago, third world leaders were calling for a new international economic order. It was in the late seventies when the Algerian president, Houari Boumedienne, made his trail-blazing speech in the UN General Assembly in which he accused the industrialized countries of exploiting the developing world by laying down terms of trade unfavourable to the producers of basic commodities.

There followed demands for a North-South dialogue and the Brandt commission that was set up to look into the matter came up with an impressive report. But nothing emerged from these feeble moves. Today the crisis in the South has deepened.

The establishment of the World Trade Organization (WTO) in January 1995 and the ‘globalization of the world economy’ that has taken place in the nineties have compounded the miseries of the poorest of the poor. Those affected include not just the countries at the bottom of the heap but also those at the lower rung of the seemingly affluent countries.

The major development which has taken place is that the Third World governments have been coopted as silent partners in this game of the rich. The process of “entrapment by debt” having been completed in the last two decades. Today the South has a debt burden of $300 billion.

The three slim publications under review How ‘they’ rule the world, Debt by entrapment and How ‘they’ rule Pakistan state the case of the South. Very precisely and in simple language and lucid style, Najma Sadeque explains how the industrialized states, the successors of the colonial powers, have destroyed the indigenous strength of the Afro-Asian economies and trapped them in a morass from where they can never hope to extricate themselves.

Agriculture was the forte of the Third World which is located geographically in a region where the climate is conducive to farming. But colonization destroyed the traditional agricultural practices such as crop rotation, and encouraged the use of HYVs which demand a high input of pesticides, fertilizers, and master seeds. As a result, the third world countries, which had been self-sufficient in food, were reduced to importing grains from the West.

Another debilitating phenomenon for the third world has been the emergence of the MNCs, 80 per cent of which are based in the North. Their combined annual sales of $3,000 billion are equivalent to a third of the world’s GDP. These transnational corporations which transcend international boundaries have emerged as massive entities which at times have resources bigger than many states. According to the books under review, of the world’s largest hundred entities, 51 are MNCs. David Korten in his book When corporations rule the world has documented extensively the overwhelming reach of the MNCs.

Journalist-turned-researcher Sadeque also attributes the plight of the poor to the World Bank and the IMF, the two financial institutions which have since their inception in 1944 exercised a stranglehold on the economies of the borrowers. By stipulating structural adjustment programmes and demanding strict adherence to them, these two lending institutions have increased inequities within states. As a result more and more people have dropped below the poverty line. For instance, by demanding higher taxes on utilities, cuts in the spending in the social sector, reduction in the subsidies on agriculture, privatization of big government enterprizes, deregulation of labour markets and the lifting of price controls, the IMF/WB have boosted the cost of living in the third world making the basic essentials out of reach of the common man.

Another element in this conglomerate which now rules the world is the arms industry. It provides employment to 50 million people and conducts 40 per cent of the research being carried out worldwide. Most significantly, the arms manufacturers are concentrated mainly in the US. Before the cold war, ended the two superpowers had defence budgets which accounted for half the world’s military spending. They held sixty per cent of the share of the arms trade and 96 per cent of the nuclear armoury was in their control.

Sadeque focuses on the economic dimension of the arms trade. But there is a political and a strategic dimension too. The fact is that the arms industry has insidiously promoted conflict and has never encouraged conflict resolution processes. In fact some of the wars are known to have been fought to test new weapons. Thus the Patriot missiles were developed and tested by the United States for the first time in the war against Iraq in 1991.

Elaborating on these issues with reference to Pakistan, in her book How ‘they’ run Pakistan, Sadeque identifies the evils which plague the national economy today. The faulty irrigation system, depletion of the forest resources, chemical farming, opening the indigenous industries to foreign competition, the growing debt burden and pauperizing the workers, have played havoc with the country’s natural and human resources.

What solution does she have to offer? There is need to recognize realistically the capacity of our resources and adopt practical strategies which are equitable, affordable and locally appropriate. In the face of an indifferent government, it is up to an informed people to force the issue.

By preparing these tracts, Najma Sadeque has indeed made a valuable contribution towards creating an informed public opinion — what she calls a critical mass. The books are being translated into Urdu and Sindhi so that they reach out to a larger number of people.

How ‘they’ run the world
How ‘they’ run Pakistan
Debt by entrapment
By Najma Sadeque
Shirkat Gah Women’s Resource Centre, F-25/A Block 9, Clifton, Karachi. Email:
38pp. 51pp. 45pp.