Pakistan: Privatization: The road to ruin

As Pakistan plunges into even greater economic decline, the custodians of this system in its terminal decay call for measures that instead of retrieving will further exasperate 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 privatization, deregulation, liberalization, restructuring and downsizing is being parroted by the leading lights of the opinion makers of our ruling classes. Their ideas and solutions are a poor imitation of those of the 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. The former chief of the US Fed during the years of the “unending” and “everlasting” boom of the 1990’s and the first years of this millennium, Alan Green 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 crisis”. (Time, 21 September 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 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 so called “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 the 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 don’t have a clue about what they are faced with and how to avert the impending economic disaster. Since the late1970’s all regimes have continued to follow slavishly the dictates of the imperialist financial institutions. The incumbent regime has gone the farthest in this discourse. The Muslim League and the right-wing parties are demanding the privatization of the 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 privatized and still the debt continues to soar, what would be the solution then?

The only way that this crisis-ridden Pakistani capitalism can survive is to borrow more to service the debt. This will be accompanied by ever more stringent conditions of new taxes on the poor and an even greater exploitation of the working class and the peasantry. This is a never ending 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 through 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 Zulfiqar Ali Bhutto’s nationalizations, when they embarked upon the policy of privatization in the 1980’s. The present regime has announced the privatization of almost all the major state enterprises. However, 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 capital intensive rather than being labour intensive even in poor countries.

This means that instead of generating new jobs these privatizations and investments will massively cut jobs and indulge in technology as profits rise with the decrease in the variable capital employed in production. What is worse is the method they are employing. By announcing that twelve percent of the “shares” are to go to the workers they are using monstrous deception and deceit in an attempt to kill the class instinct of the workers and dupe them into thinking that they will be “partners” in the ownership of these enterprises. The truth is that they will lose their jobs from their “own” industries to reduce the deficits while the vulture speculators on the stock markets will fleece them into destitution.

The only outcome of these privatization and other “neo- liberal” economic policies will be to further increase unemployment, poverty and deprivation. All methods to prop up capitalism in Pakistan have been tried and tested. The masses have been deceived time and again by every ideology that does not threaten the existence of this exploitative system. Leon Trotsky wrote in his epic work, ‘The History of the Russian Revolution’, “Neither bourgeois nor socialist but ‘democratic’. They substituted a political formula for a social content….” The toiling masses cannot be deceived forever. Conditions of existence for them have become intolerable. They have no option but to overthrow this system which in Lenin’s words “is a horror without an end.” After all, as Marx said, “they have nothing to lose but their chains”.

Wednesday 8 December, 2010