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Pakistan Economic Crisis – Lessons for India

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Pakistan Economic Crisis – Lessons for India
Wheat flour crisis in Pakistan -

“Tum Bilkul Hum Jaise Nikle” – India going down path of Pakistan, Sri Lanka – Fundamentalism is a common factor in the economic downslide of these three nations.

Prof. Dr. Ram Puniyani

Pakistan is in the grip of a massive economic crisis. Wheat flour costs Rs.150 per kg. Staple diet roti (type of bread) costs Rs.30 in a country where the average daily earning is Pakistani Rs.500 with an average household needing around 10 rotis daily. The US dollar is close to Rs.230.

Summing up the economic plight of Pakistan, John Ciorciari, professor at Michigan’s School of Public Policy, says, “Pakistan faces a severe economic crisis and clearly requires external support. Foreign exchange reserves are at dangerously low levels—enough to pay for only a few weeks of imports. Inflation is at its highest levels in decades, growth is sagging and the central bank has raised interest rates sharply to address a weak currency.”

Undoubtedly, the worsening situation has been partly precipitated by the massive floods. Besides, the economy’s basic structure has been on a weaker wicket with military dominance, ‘Islam in politics’ and the US influence.

At the time of Independence, Pakistan’s first governor general Mohammad Ali Jinnah gave one of the best definitions of a secular state during his August 11 Constituent Assembly speech. “If you change your past and work together in a spirit that every one of you, no matter to what community he belongs, no matter what relations he had with you in the past, no matter what his color, caste or creed is first, second and last a citizen of this State with equal rights, privileges and obligations, there will be no end to the progress you will make,” he said.

Undoubtedly, the worsening situation has been partly precipitated by the massive floods. Besides, the economy’s basic structure has been on a weaker wicket with military dominance, ‘Islam in politics’ and the US influence.

This principle was not to last long, and the fundamentalist elements around him took over after his death. Persecution of Hindus, Christians, and Shias and Kadianis (sects of Islam) began over a period of time. ‘Religion in politics’ dominated the scene, the basic infrastructure of agriculture and industry remained on the margins, and health and education were accorded a low priority.

Roughly, the domination of the military and fundamentalism in politics had different priorities and it seems that they are one of the major factors in the State’s inability to cope with the economic challenges.

No two cases are exactly similar; still, some generalizations can be drawn. In the case of Sri Lanka, ethnic and Sinhala-Buddhist politics were in the driving seat. Hindu Tamils were the first target, followed by the persecution of Muslims and Christians. The military was in a dominating position and the autocracy’s high-handed decisions like spending the nation’s fortune on the Rajapaksa Airport, near Hambantota Port, and stopping the import of fertilizers led to the big disaster eight months ago.

The food crisis and the rising prices led to the uprising. Sri Lanka did begin as a democracy, but the pressure of ethnic (also overlapping religious) issues dominated the scene to disenfranchise the Hindus (Tamils) and others in due course.

Roughly, the domination of the military and fundamentalism in politics had different priorities and it seems that they are one of the major factors in the State’s inability to cope with the economic challenges.

Rohini Hensman, a scholar-activist of Sri Lankan origin, gives a comprehensive account of the roots of the ethnic-religious divide on which major political parties harped. In due course, this gave rise to the anti-people, autocratic regime of Mahinda Rajapaksa and Gotabaya in particular. (Rohini Hensman, Nightmare’s End, June 13, 2022, New Left Review). Interestingly, Sri Lanka also went in to trace the ancestry of its poverty-stricken citizens through documentary proof.

In India, communal elements boast that the country is not facing such a crisis due to the leadership of Narendra Modi. Surely, the crisis in India is not of the same proportion as in Pakistan or Sri Lanka.

Still, the rising prices of commodities are breaking the back of the poor and even the middle class—to which the Union finance minister also claims to belong. The Indian rupee has seen a free fall against the dollar and stands at Rs.83 against the greenback.

Unemployment is at an all-time high and GDP is on the lower side. Oxfam’s report ‘Survival of the Richest: The India Supplement’ shows the widening gulf between the rich and poor.

Muslims and Christians are under constant intimidation and marginalization, best reflected in what India’s outstanding former police officer Julio Ribeiro said, “Today, in my 86th year, I feel threatened, not wanted, reduced to a stranger in my own country.  The same category of citizens who had put their trust in me to rescue them from a force they could not comprehend has now come out of the woodwork to condemn me for practicing a religion that is different from theirs. I am not an Indian anymore, at least, in the eyes of the proponents of the Hindu Rashtra.”

In the 80s, communalism reared its head in a powerful way. Now, it has become the most dominating political factor

In contrast to its two neighbors, India began on the solid wicket of secularism and focused on industries, irrigation, fertilizers, health facilities (primary health centers) and education. It also endeavored to set up premier institutes of higher education, IITs, IIMs along with research institutions which could compete globally—BARC (1954), DRDO (1958) and INCOSPAR [later ISRO] (1962), among others.

Undoubtedly, there were some flaws in the initial planning like an overemphasis on heavy industries and higher education; still, solid infrastructure was laid. Scientific temper was mandated even through the Constitution.

In the 80s, communalism reared its head in a powerful way. Now, it has become the most dominating political factor, leading to a downslide in most areas irrespective of the claims about Achche Din and Sabka Saath Sabka Vikas.

In the last eight years, GDP tanked from 7.29% to 4.72%, average unemployment rose from 5.5% to 7.1%, cumulative NPAs increased from Rs.5 lakh crore to Rs.18.2 lakh crore and the rupee drastically weakened from 59 to 83. The attack on scientific temper is becoming stronger.

In post-colonial South Asia, the British, who ruled and plundered the region, also sowed the seeds of ‘divide and rule’ by dividing the Hindus and Muslims or Sinhalese and Tamilians. Partition was the result of this policy.

India embarked on the path of a modern nation-state while Pakistan soon fell into the grip of divisive politics. While earlier many Pakistanis looked up to India as a role model, India seems to be following its path for the last three decades. As the late Pakistani poetess Fahmida Riaz in the aftermath of the Babri Majid demolition so aptly put, “Tum Bilkul Hum Jaise Nikle (You turned out to be like us)”.

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The author is a human rights activist and taught at IIT Bombay. The views are personal.

(Article shared by the author on Jan 23, 2023 through Jan Vikalp, a bilingual (Hindi-English) Online Forum of writers, academicians, editors, intellectuals and social workers)

(First published by News Click on Jan 21, 2023)

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