IFIs held responsible for economic decline

ISLAMABAD, Jan 25: Pakistan’s economy could have developed faster and would have made substantial gains had governments not invited world bodies to intervene in its development planning.
This was Dr Noor Fatima’s assessment in her lecture on “International economic agencies and Pakistan economic development”.

Speaking at the Pakistan Social Forum’s fortnightly meeting at TVO on Friday, she described the factors that led to intrusion of IMF and World Bank in economic governance of Pakistan.Tracing the economic history of the country from 1947 when Pakistan had no sources of revenue she said Pakistan had to find external donors to meet the basic needs but with the passage of time the aid factor magnified due to political expediency of the various governments. Later the developed countries led by the US introduced various plans and philosophies like the Washington Consensus, Neo-Liberalism and Millennium Development Goals (MDGs) transforming the International Financial Institutions into agents of “Free Market Economy”.

She said that Neo-Liberalism had emerged as a powerful modern ideology over the last two decades.

The economic, political and sociological debates are devoting increasing attention to its ideological foundation, theoretical basis, and practical orientation as a worldwide phenomenon affecting almost all nations including Pakistan, she said.

Not only that, she said, these purely economic aims were buttressed by ideologies like ‘end of history’, ‘clash of civilizations’ and ‘Neo-liberalism’ to subjugate the economies of the South. Relying on foreign aid for economic development was basically a shortsighted policy bringing what could be termed prosperity without any foundation.

Dr Fatima criticised the role of the comprador bourgeoisie who did not allow the capital goods industry to develop as they were profiteering from imports from developed countries.

She said most of the macro-economic indicators were performing well the IMF entered the arena. It was IMF which created the bogey of economic failure and rapid change of the government made it easy for the economic pundits of the then governments to ask for more loans.

It was then on when the major macro-economic indicators in the 1990s — GDP, inflation, balance of payments — started showing downward trends.

She was of the view that Pakistan’s economic development could have proceeded well if more attention had been paid to development of capital industries and recourse to consumerism had not been taken.

courtesy DAWN


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Filed under Economy, IFIs, Pakistan

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