Privatisation: the road to ruin
The rulers and their experts in Pakistan do not have a clue about what they are faced with and how to avert the impending economic disaster. Since the late1970s, all regimes have continued to slavishly follow the dictates of the imperialist financial institutions
As the country plunges into even greater economic decline, the custodians of this system in its terminal decay call for measures that, instead of retrieving, will further exacerbate the already adverse conditions society is afflicted with. Almost all the political parties and the domineering intelligentsia and experts are crying hoarse for the implementation of an austerity regime and the recipes of trickle-down or supply side economics.
The mantra of privatisation, deregulation, liberalisation, restructuring and downsizing is being parroted by the leading lights among opinion makers of the ruling classes. Their ideas and solutions are a poor imitation of those experts and economic strategists of the west that have proved to be a miserable failure with the economic collapse of the last period.
Although economics is not an exact science, the refutation of the predictions of these experts by concrete reality speaks volumes about their so-called expertise and exaggerated claims of the glorious future of capitalism. A former chief of the US Federal Reserve during the years of the 'unending' and 'everlasting' boom of the 1990s and the first years of this millennium, Alan Greenspan, had to say the following when the recent crash rattled the world economy: " Unless somebody can find a way to change human nature, we will have more crises" ( Time, September 21, 2009).
What this celebrated bourgeois economist, a onetime darling of the imperialists, fails to understand is that it is conditions that determine consciousness and not otherwise. The historically obsolete and redundant system that has failed to develop the means of production and hence society, needs to be overthrown. It is only through a socialist transformation of the socio-economic system that human nature will have a chance to surge ahead and change.
In a recent article, political theorist Alan Woods wrote, "The boom years were largely based on a vast expansion of credit, which was reflected in a huge increase in private debt levels before the crisis, and unprecedented levels of public debt after it. After a drunken binge comes a severe hangover."
This is one of the reasons why any recovery will be delayed and there will be one crisis after another. The recent boom was based on extensive borrowing, extended debts and credit financing. Economic growth was apparently defying the laws of gravity. Eventually the hyper-inflated bubbles burst and the 'boom' that had 'overcome' the boom-bust cycle crashed into the biggest slump since 1929. Now the present recovery is a jobless one and a new social norm, based on unprecedented cuts and austerity measures, is being established by regimes of all shades in the advanced countries. At the same time, we are at a turning point in Europe and elsewhere, as a fresh and resilient wave of class struggle begins to erupt against these draconian measures. Stormy events impend, as the proletariat in the advanced world wakes up to a new reality and begins to challenge the whole system.
In this background of the world economy, the rulers and their experts in Pakistan do not have a clue about what they are faced with and how to avert the impending economic disaster. Since the late1970s, all regimes have continued to slavishly follow the dictates of the imperialist financial institutions. The incumbent regime has gone the farthest down this path. The PML-N and other right-wing parties are demanding the privatisation of Pakistan Railways, PIA, Wapda and other state owned 'loss making' industries to foot the bill of the mammoth macroeconomic deficits. But the reality is that the selling of the family silver will not suffice to overcome the rapidly accumulating debt. And even if everything is privatised and still the debt continues to soar, what would be the solution then?
The only way that this crisisridden Pakistani capitalism can survive is to borrow more to service the debt. This will be accompanied by even more stringent conditions of new taxes on the poor and an even greater exploitation of the working class and peasantry. This is a neverending vicious cycle that will further crush the already impoverished masses. The comprador ruling classes and the state (army) will get their commissions and crumbs from their imperial masters and continue to serve them and perpetuate imperialist plunder.
This vicious cycle can only be broken by nothing less than a revolution. The irony is that there is no real difference of opinion in the ruling coalition on the issue. The PPP leaders betrayed the founding principles of the party long ago. They had foregone Zulfikar Ali Bhutto's nationalisations when they embarked upon the policy of privatisation in the 1990s. The present regime has announced the privatisation of almost all the major state enterprises. However, the real problem for them is that there are no buyers because of the world recession and the financial crunch that is throttling economic activity and industrial production. It is also a fact that in the last decade and a half, most investment has been capitalintensive rather than being labour-intensive, even in poor countries.
This means that instead of generating new jobs, these privatisations and investments will massively cut jobs and indulge in technology as profits rise with the decrease in the variable capital employed in production.