After a decade of being free of the IMF, Pakistan has had to go back for a loan. It has the usual ‘free market’ conditions such as increasing the level and coverage of General Sales Tax, GST (VAT). The World Bank estimates that over $1bn of tax is evaded each year by the rich. Hilary Clinton has criticised them for paying too little tax. The finance minister talks of helping the poor and no one believes him. He has a point when he says that cutting subsidies on the hugely loss making PIA won’t hurt the poor as they never fly but who believes him when he argues that subsidising electricity helps the rich heat their swimming pools? The federal interior minister promises ‘jihad’ on corruption. The ‘Newsline’ magazine questions his credibility, pointing out that ministers, the prime minister, the president himself, all have big houses in London, Swiss bank accounts together with modest official incomes and tax bills.
The Consumer Price Index now stands at 15.48% and rising, it’s more for many basic food items. There are some organised protests about the price of sugar and cooking oil. In Peshawar, twenty five bakers were arrested recently for going on strike. Their demand was that supplies of subsidised flour are restored or they be allowed to increase the price of a roti. A few days later it was reported they were baking again, now producing smaller roti at the regulated price.
The budget deficit is 6% of GDP. Many businesses, large and small and the government are all are short of cash, causing lots of crises such as the cancellation of the national water purification programme and a 50% R 150 billion ($1.5bn) reduction in the development budget. $2bn a year goes to service foreign debts and this will increase with the latest loan from the IMF. There is again a debate on whether to default on debt. ‘Dawn’ has an editorial against default, arguing that it would remove the only discipline there is on an otherwise financially irresponsible government.
The political parties are manoeuvring on the GST vote that is due shortly, trying to avoid the unpopularity that approving the increase will bring. The government coalition appears to be breaking up. Two ministers, for religious affairs and for science, have publicly attacked each other for corrupt dealings over the Haj arrangements, ripping off the thousands of pilgrims from Pakistan who go every year. Eventually Gilani, the prime minister, sacks them both and the small islamist party of the religious affairs minister, JUI-F, leaves the coalition. It doesn’t bring the government down but there are plenty of people who think this is just an elaborate charade to delay putting the IMF conditions through parliament.
Parties accuse each other viciously. The PPP Sindh interior minister, speaking at the Karachi Chamber of Commerce, attacks the MQM, Karachi’s largest party:
“When they want to kill any Pashtun, Sindhi, Punjab or Baloch, they go about executing their plan methodically.”
In the absence of political parties with manifestos for real change, the slogan raised by Zulfiqar Bhutto, founder of the PPP, in Pakistan’s first national election in 1970 ‘roti, kapra aur makan’ – bread, clothing, shelter, remains what people want. It is the total failure to deliver this, together with military occupation that creates the conditions in which the Taliban can recruit.
The chief minister of the Punjab, Shahbaz Sharif, suddenly announces a plan to halve the price of vegetables in three months, using empty state land in parks, schools and colleges. It’s hard to see this as a cheap and even cruel PR stunt, exploiting the misery of the poor.
Not only the corruption but also the arrogance of the elite is boundless. The managing director of PIA, flying from Manchester has the plane he and hundreds of others are on diverted mid flight from Lahore to Karachi, 750 miles distant.
In Lahore, 10,000 gas based plants have had their gas supplies stopped. The gas has been diverted to domestic consumers in other cities in the Punjab, Gujranwala, Sialkot and others because of the strength of local protests. The manufacturers claim that two years ago they predicted a crisis in supplies and proposed investment in equipment to enable liquid natural gas imports. If this has been done then there would now be no crisis.
The papers and giant billboards in the city are carrying a message:
“On behalf of honest and regularly paying customers of Karachi Electricity Supply Company – KESC. Only 20 days left – pay all your outstanding bills and voluntarily report your tampered meters within the next 20 days or face disconnection, public defamation, up to 3 years imprisonment and up to 50 lakhs fines.”
Load shedding (power cuts) is now being imposed more in areas judged to have a higher proportion of non payers. This is in effect collective punishment. In some poorer areas, effectively no one pays their bills. They are judged too dangerous for the meter readers to work in. There are other areas where payment approaches 100%.
Just 2% of GDP is spent on education (in Britain it is 6%). Where parents can afford it, they pay for private education. Much of the education budget is stolen or wasted. There a ghost teachers who don’t exist, though someone collects their salary, village schools which are empty or used as warehouses by local landlords. Students and lecturers in Lahore are protesting the appointment of 20 boards of governors who will take over if and when the government hands over control. This is part of the on going privatisation drive that for twenty years has been pushed by the IMF and World Bank.
Welfare is being cut. The Benazir Income Support Programme (BISP) which gives 1000 rupees a month to each family is being cut back from R70bn in 2009 to R50bn. To do the job properly would require R150bn. This in a country where 75% of the population are living on less than £2 a day. In 2003 unemployment was under 8%. Now it is over 15%.
There is violence, mainly targeted killings between the parties and between gangs and sometimes both. The most recent large bomb in Karachi targeted a CID building, notorious for using torture in its interrogations. Interestingly, the attackers spent some time before detonating a huge bomb, firing in such a way as to clear the area. No one was killed at this point. The city isn’t shutting down as it did when there were bombs put in mosques. The government and the state bureaucracy have surrounded all their buildings with walls and concrete blocks. Not knowing who he can trust, Zardari, the president, leaves his palace as rarely as possible.
Nevertheless, there is enormous tension in the run up to the 9th and 10th day of Muharram, the days of the Shia processions, security is everywhere. Exactly a year ago a bomb exploded on a procession in Karachi, killing 25.
It is becoming clearer and clearer that the super flood was a man made disaster, not a natural one. Not just a chronic failure to maintain the system properly together with building on floodplains, deforestation but the most hideous crimes carried out by big landowners, as in the case of the breach at Tori Bund:
‘The mysterious breach on the right bank of the Indus on 7 August at Tori Bund. The accused include Kursheed Ahmed Shah, federal minister of Labour and Manpower. Others accused include senior military personnel. The breach led to floods causing 50 deaths and the displacement of half a million people’
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