Some critical fault lines

By I.A. Rehman

WHILE stories of children being abandoned by their wretched parents do indicate the extreme point in despair that is seizing the poorest of the poor in Pakistan, they do not offer a fair idea of the size of the population rendered utterly destitute by the current economic crisis.

Experts everywhere agree that the economically weak segments of humankind are again going to be the worst victims of the profligacy of the privileged. Their plight is receiving little attention in the tomes that are being churned out by the hour across the globe by economists and laypersons alike. Nor do they figure in the discussion on the effects of the global turbulence on Pakistan’s fragile economy, although they could well account for a third of the country’s population or probably more. Worse, their number seems to be increasing and even the most recent estimates of the number of Pakistanis living below the poverty line have become irrelevant.

Regardless of what the experts tell us it is impossible to believe that the economic crisis has only one dimension, the stroke suffered by the market, and that the only possible cure is the Bush prescription — injection of huge cash resources into credit institutions. Whether Pakistan should blindly follow the western capitalist path to recovery, indeed to survival, is open to question.

In a country where the trickle-down theories have never provided the marginalised the means of bare existence, resuscitation of the market cannot be accepted as the only effective talisman for recovery. The impact of the economic crisis on the lives of the people, especially the underprivileged, must command as much attention, if not more, as the cash needs of banks and stock exchanges. The government’s efforts to deal with the situation seem flawed on quite a few counts but at the moment we are concerned with two main fault lines, one within the national jurisdiction and the other noticed at the regional level.

The essential question is: how is the economic crisis affecting the have-nots and are these matters being covered by the remedial efforts?

The principal problem faced by the poor is a sharp drop in employment opportunities and their increasing inability to provide for their substandard living. Their capacity to buy food has further declined, they cannot tend to the sick and they cannot send their children to school. Are these problems on the agenda of the beneficiaries of state resources? The assumption that the needs of the poor will be met when industry and trade grow, as said earlier, is not backed by historical evidence.

Once again Pakistan is under pressure to earmark resources for the social sector apart from investment in industry and the market. So far we have not heard of a meaningful plan to assure the poor of adequate food security or of any emergency plans to improve their access to health and educational facilities.

This is not to deny the creation of the Benazir Bhutto fund for the poor or efforts to subsidise the sale of bread. These initiatives were conceived in the pre-crisis environment and were not based on any assessment of the grim situation that is now unfolding. Besides an increase in the circulation of dole is not a good way to extend the poor relief without harming their productive capacity. Pakistan should be worrying not only about the day-to-day hardships of the underprivileged but also about the threat to its human resources.

Apparently a realisation of this aspect of the problem has persuaded Mr Obama to pledge the creation of millions of new jobs instead of confining himself to the meaningless chatter about market stabilisation. Pakistan must also give priority to a crash programme to provide gainful employment to the poor. At the same time steps need to be taken to ensure availability of medical and educational facilities at costs the economically weak can afford. This may be done through local bodies or in partnership within civil society organisations, depending on circumstances in the different parts of the country.

The second fault line is the absence of action at the regional level. All countries in the South Asian region are threatened by recession, and as a consequence millions of people are going to face indescribable hardships. While some pockets in South Asia may be able to meet the crisis with bearable discomfort, some other parts appear to be tottering on the edge of a precipice. No knowledgeable observer can deny that economic calamities befalling any member of the South Asian family will affect all its other members and may eventually disrupt the fragile political understanding the region’s leaders have reached after years of difficult negotiations.

Like Pakistan its South Asian neighbours also are, by and large, banking on the strategy borrowed from the country in whose financial extravagance the global crisis had its origin. Resources are being pumped into the same system that created whopping inequalities in national societies and condemned millions upon millions of people to impoverishment and dehumanised existence. Can South Asia as a whole view this prospect with equanimity?

Further, South Asia has not realised the need to contribute to the international rescue plans. The meetings of the G8, G20 and Asia-Pacific leaders have been held apparently to pursue the agenda already set by the US. It is doubtful if any other country has had possibilities of suggesting amendments or alternatives to the American assumptions. It is time South Asian leaders pondered whether they should for ever be stuck with plans in whose formulation they have had no role.

Even a little deliberation will reveal the possibilities of improving the region’s economic prospects by strengthening intra-region cooperation. For example South Asia could force some much-needed reform in the lending and aid policies of international finance institutions by confronting them unitedly instead of each of its states separately negotiating with them.

They can also ease each other’s problems by raising the level of regional trade and investment. If greater economic cooperation among South Asian states demands changes in the direction and substance of their national economic plans let their planning commissions meet and start devising measures for the common good of the subcontinent’s people. Pakistan should be able to garner considerable goodwill by making a move in this direction.

There should be little doubt about the urgency of moving towards a common South Asian strategy to overcome the current crisis and thereby lay the foundations of a better future for the region’s population, especially the poor hordes. What needs to be grasped is the stark reality that failure to work together now will destroy all South Asian nations, even if some national entities are destroyed to a lesser extent than others.