The economy after 9/11

by Zubeida Mustafa

AS Americans focused on remembering those who died 10 years ago on Sept 11 at the World Trade Centre in New York and debated how this momentous event had changed their lives, it was an excellent idea by Dawn’s business pages to devote space to analysing the post-9/11 changes in the lives of Pakistanis.

Needless to say there have been many. People have had to suffer the agony of living a life that is killing with a thousand cuts, all because of the follies of uncaring governments and their policies as well as the misguided strategies of Islamist militants. As Afshan Subohi, the business editor, wrote in her insightful introductory article: “The collateral damage of the war was not limited to the loss of life and property. The war economy pushed the social sector on the back burner…. The crowding out of development spending because of the rising budget to cover security concerns weighed heavily and the key economic indicators nosedived.”

She supports her contentions with statistics. What they convincingly prove is the inability of our leaders — both military and civilian — to understand what exactly is the key element in the national security of a country. More effective than the conventional approach to defence with its emphasis on large armies and hi-tech weapons of destruction is the dimension of human security that focuses on strengthening human resources and social capital.

The world has all but forgotten the endgame played out in the USSR in the twilight years of its existence. It was not the war in Afghanistan per se that led to that superpower’s demise, though it paved the way. It was the economic devastation caused by a bloated defence budget that caused the Soviet Union to implode from within. The remaining superpower appears to be heading the same way if the massive defence spending on the war on terror, the huge debts accumulated and the tailspin into which the American economy is going are any indicators.

Can Pakistan win the multi-front war it is waging against so many enemies? There are the wars to fight against terrorists as militants of all shades are called — Al Qaeda, Afghan Taliban, Pakistani Taliban, Punjabi Taliban (at least five groups come to mind immediately), the Baloch ‘insurgents’, Sindhi ‘nationalists’, our Enemy # 1 India and its intelligence wing known as RAW.

Although they are not recognised as such and never defined clearly the wars against hunger, malnutrition, ignorance, disease, obscurantism, homelessness are the real challenge. They undermine our security more than anything else. It is human security that needs to be addressed if a country is to be made safe.

Although providing for these securities requires funding as military security does, it is equally important to chalk out correct strategies. Pakistan has been wanting in both aspects. Not only have the education, healthcare, housing, agriculture and population sectors been grossly starved of funds. We still do not know what is the best approach to address the challenges faced by the masses. That is because there is a disconnect between the policymakers/disbursers of funds and the consumers, that is the masses who are supposedly the beneficiaries. Hence resources are wasted or embezzled and no benefits accrue to the people.

Perhaps the worst enemy of human security is the growing gap between the rich and the poor. This is a phenomenon very common in many other countries as neo-liberalism (a respectable name for capitalism and market economics) displaces social democracy. This gap is to be expected as the statistics cited by Afshan Subohi show how difficult it is for the poor to survive in times when GDP growth has dropped from eight per cent in 2001 to two per cent today.

Inflation has risen from 4.4 per cent a decade ago to 16 per cent in 2011. External debt has doubled to $60bn today from $30bn in 2001. Is it then surprising that 60.3 per cent of Pakistanis live on less than two dollars a day as estimated by UNDP and 10 per cent of the population is obscenely wealthy and earns 27 per cent of the country’s total national income.

This inequity has been compounded by all-pervasive corruption which is highest in the upper echelons of society and government. The social impact of this economic inequality is the real problem. It has split the country horizontally into two unequal parts with the haves enjoying all the privileges and the have-nots being accorded the status of secondary citizens.

This is creating alienation between the classes that can be deadly.

It is a pity that the risks inherent in policies that lead to these inequities are not widely recognised. The failure to understand what is going wrong is best evident from an advertisement carried by this newspaper with a picture of President Zardari who appeals to “all religious and political parties, religious scholars, and the public to seek repentance from Allah after their zuhr prayers” in view of the recent natural disasters including dengue. They are also requested to pray for an end to these catastrophes and demonstrate a fraternal spirit and perform their civic responsibility in this hour of calamity by “stepping forward to assist their flood-affected brothers and sisters”. Doesn’t the government have a role to play? It after all helped create many of these problems in large measure.

Source: Dawn

7 thoughts on “The economy after 9/11

  1. “[A]ll religious and political parties, religious scholars, and the public to seek repentance from Allah after their zuhr prayers” says Mr Zardari, but he (and other opinion leaders) ought to know that intercessory prayers and the like have been shown to NOT work. See the following two articles selected at random from a vast literature:

    The solution on the other hand lies with the politicos, bureaucracy and the military, i.e. the Establishment and the Deep State. Pakistanis will need to snatch power away from incompetent and corrupt leaders and end disputes with neighboring countries (thereby reducing military expenditure) to release money for equitable development. Having done this we can say NO to foreign loans and handouts from the donors.

    We have seen the Arab Spring. Are we ready for a transformational Pakistani Winter?

  2. This is a good analysis of what are the real issues… a disenfranchised (in practical terms) young population suffering from rising inequalities is the ticking time bomb that can implode one day. Pity that the elites and the media are obsessed with fighting "wars" that can only lead to greater distress and upheaval in years to come. But wars are good business for military and civil elites.

  3. dear Zubeida,
    wars have always been made in history to benefit the benefactors of class rule and to quell social issues and unrest; your most laudable question then is rooted in a humanism and rationality which are always enemies to class rule.
    badri raina,

  4. Zubeida has tried her best painting the picture of economics after 9/11. She never mentioned in her writing that 9/11 episode was even FAKED phenomenon as USA as everyone knows had some precaculated plans of stealing natural resources in Iraq and Afghanistan. In Iraq USA and its corporations already made close to 15 billion dollars while in Afghanistan they plan to get on hands on all resources some of which are even precious than uranium. But one thing is certain USA is trying to dream all valuables in Abghanistan but they should also know NO ONE AS YET COULD ABLE TO TAME AFGHNIS. USA SHOULD KNOW WHAT HAPPENED TO SOVEITS NOT TOO FAR.

  5. zubeida mustafa is rite on dot when she laments the military security state vs the social security state, unless pakistan changes its long term policy vis a vis india and phobic obsession with war , things are likely to go in a tailspin and final countdown. god know whether we shall survive the final cataclysm that is being unfolded. but the words of caution and restraint need to heard in this jingoistic world post 9/11

    adil zareef

  6. You have rightly said that "It was the economic devastation caused by a bloated defence budget that caused the Soviet Union to implode from within". Visualizing this 'implode' too many economic expert journalistic over the world cautioned the WORLD about the weak economy of USSR. I have already posted comments ECONOMIC as the major arm to fight and win any war. Let us see as till when IRAN faces the ECONOMIC KNIFE flanked by USA and Co.

    The same theory applies at all levels whether it is home or business. The poor person cannot fight any legal war with the Mighty in spite of the fact that he is not at fault. The poor worker cannot think of even walking up to LABOUR COURT for getting his employment restored or to get his legitimate dues but would wait for the mercy of Mighty Employer.

    Switzerland (though other country like Japan are also there) is also a WINNER and a CHAMPION of ECONOMIC. All bad and corrupt politicians, babus and business has parked their unaccounted money in Banks of Switzerland. Switzerland in turn gives protection and privacy of such funds and rotating for the social uplift of her citizen. Income from tourists have become their major source of Income. Whereas these bad depositors are so bad as they have preferred to strengthen the ECONOMY of Switzerland at the cost of their own country.

    Really ECONOMIC ARM must be a secure and strong to win all other wars.

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