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March 29, 2019

Reforming the economy


March 29, 2019

The recent World Bank report (discussed in the first part of this series) points out that “there exist at least four influential groups that gained power through historic events and continue to leverage their influence on the political system for personal gain. While each group affects development differently, they share the common trait of having gained and retained influence throughout Pakistan’s history.”

These groups include the civil-military bureaucracy, landlords, industrialists and big capitalists. These groups are the dominating sections of the Pakistani ruling class. They dictate the economic policies and decisions. These forces of the status quo are supported by the upper middle class and middle class layers of professionals, traders and petty capitalists. Despite some small differences, the fundamental interest of these groups is to maintain their monopoly and hegemony over state, economy and society.

The main reason behind the domination and power that the elite enjoys are the capitalist neo-liberal policies and semi-capitalist and feudal structures of the state and the economy. These groups took power from the British imperialists and continue to maintain it with the courtesy of imperialist powers and their institutions.

The problem is that these imperialist international financial institutions impose – on the behest of imperialist powers – policies and neoliberal reforms that help the same influential groups to not only maintain the status quo but also increase their domination and monopoly.

They are continuing with the same policies that create conditions of extreme poverty, inequality, super exploitation and underdevelopment. The remedies they offer and the sort of structural reforms they propose will not help change the conditions.

The report also correctly points out that “Pakistan can boost its growth by investing in people, improving productivity, reforming institutions and protecting the natural environment.” Pakistan has paid a heavy price for not investing on the capacity and skill development of its people. The failure to reform the colonial state structure has resulted in the gap between the state and the people widening. Pakistan needs to increase productivity through the introduction of modern techniques, technology, innovation, skills, scientific research and education in both industry and agriculture.

But the question is: can we on the basis of the existing state, economic and social colonial structure develop our productive forces to the level needed to improve the living standards of the people, and to take decisive steps towards industrialisation and to modernise agriculture? Radical reforms and transformation of the existing social and economic system are needed to achieve this goal and target.

There are three main reasons that contributed in the underdevelopment and backwardness of productive forces of the former colonial world. First, the imperialist powers super exploited their colonies. They used their colonies as a mean of cheap source of raw material.

They developed their own economies at the cost of occupied lands in Africa, Latin America and Asia, whose indigenous industries and manufacturing bases were destroyed by the colonisers. The colonial powers intervened and cut across the indigenous process of economic development and the emergence of an indigenous capitalist class.

British imperialism destroyed the established local Indian industries, mainly targeting the weaving and cotton industry. And then they delayed the process of developing the modern textile industry. They did not establish heavy industry in India as it was against their imperialist interests.

[Our ruling class continued the same policy after Independence. They concentrated on developing agro-based industries and never seriously tried to undo and reverse imperialist policies.]

United India under British colonial rule converted into a consumer market for manufactured goods of Britain. They introduced a retrogressive tax system to discourage local manufacturing and industrialisation in India.

They establish colonial state structures in India and impose feudalism to repress, exploit and enslave the working classes. The colonial state structure and economic and social system developed by British imperialism served the imperialist interests of British imperialism.

Second, the decision of British imperialism to impose and strengthen feudalism and give big landholdings to loyalists of the British Raj played a retrogressive role. Feudal repression and exploitation forced millions of landless peasants into extreme poverty and slave-like conditions. They still lives under the same conditions even after 71 years of independence. The British established this system to buy the support of local feudal lords to get a social base in India. To free the millions of landless peasants from slave-like conditions and extreme poverty, it is necessary to introduce land reforms and redistribute land.

The Pakistani ruling class failed to complete the tasks of a National Democratic Revolution to undertake the project of national reconstruction after Independence. They failed to decisively break with colonial tradition, policies and legacy. They failed to abolish the colonial structure and develop a modern capitalist nation-state. They failed to abolish feudalism and introduce land reforms to solve the agrarian question. They failed to develop modern industrial infrastructure to carry out industrialisation.

They failed to solve the national question and to satisfy the aspirations and demands of small nationalities. And they failed to democratise the state and the economy to strengthen constitutional rule and the democratic order.

To be continued

The writer is a freelance journalist.

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