The IMF classifies Pakistan as its most obedient client that will obey its demands even against the wishes of the people
The power of people should always be more than the people in power. Rarely has this statement describing true democracy been more on display than in the recent referendum in Greece. A country on the verge of bankruptcy, a country where banks have shut down due to a liquidity crunch, a country whose membership in the Eurozone was at stake, decides that its independence and freedom of choice matters more than the dictates of outside stakeholders. This is not an easy decision; it will have multiple repercussions but in democracy the will of the people brings collective responsibility and ownership that eventually strengthens governments to plan better, choose better, bargain better and ultimately do better for their majority constituents.
Why talk of Greece? Believe it or not the country has many similarities to Pakistan. It has been a troubled child of the EU for the last decade and while other countries under pressure in Europe, like Spain and Portugal, have ridden over the crisis better, Greece has just managed to get out of one crisis to get into a deeper one. Like Pakistan, Greece has been dominated by dynastic politics that ousted army colonels. The head of the centre-left Papandreou clan, George, held power before a junta of army colonels ruled from 1967 to 1974. His son Andreas then took the flame, creating the political party Pasok and becoming the first Socialist head of government in 1981. Grandson George served as prime minister from October 2009 until November 2011.
On the right, the Karamanlis and Mitsotakis families stand out. Constantine Karamanlis led the first government after the colonels were ousted and served as Greek president from 1980 to 1985 and 1990 to 1995. His nephew, Costas Karamanlis, led the government from 2004 to 2009. That is the time recession hit the world and the global financial crisis exposed weak economies in Europe. As weak governments do, they resorted to debt bailouts without strengthening economic fundamentals. The result was that Greece’s financial crisis has grown steadily, with public debt climbing from 107 percent of national output in 2007 to 177 percent last year against a Eurozone limit of 60 percent. As in Pakistan, tax collection has been dismal and big industries like shipping have resisted tax measures. The IMF/ECB/EC thus imposed an austerity plan on Greece that has severely affected the socio-economic base of ordinary Greeks. Joblessness has grown as industrial growth lags and youth unemployment jumped from 21 percent to 60 percent.
With an angry population and restive youth, enter Alexis Tsipras as a change catalyst. He is young (only 40 years old) and against dynastic politics, and politics of debt for more debt. His party, Syriza, won almost a majority on its anti-bailout campaign in 2015 and the two non-traditionalists of these parties became the symbols of change, i.e. Tsipras and Finance Minister Yanis Varoufakis. Tsipras climbed a greasy pole from a life of leftist activism to lead his unlikely coalition while Varoufakis, an economics professor, was drafted into politics less than a year ago. They tried to negotiate a package with the hard-nosed combination of the IMF and ECB but could not come up with a win-win formula. When the government’s power could not break the shackles of these immensely powerful institutions, Tsipras went back to his public and announced that a referendum would take place to decide whether they wanted to accept the package or say no. The result was an astounding no despite the danger of being thrown out of the Eurozone.
Pakistan may not be in these dire straits but has become as entrapped in this debt for debt situation as Greece has. In Greece, the typical IMF formula of capping the budget deficit and reducing pensions and subsidies to the less well off created extreme hardship for the majority. In Pakistan, identical issues of keeping the budget deficit in control and not doing tax reforms have resulted in deficits in all economic targets like exports, manufacturing and agriculture. The PPP government went merrily to the IMF every time the exorbitant expenditures of the government had to be financed from borrowed sources. The PML-N government, despite all claims of breaking the begging bowl, has done the same. Like Greece, the debt percentage has increased to 63 percent in violation of the limits of 60 percent defined in the Constitution of Pakistan. What has happened in Greece is what has been happening in Pakistan for decades.
The IMF is a lending agency whose job is to find countries to whom they can lend and then get back their money on their terms. Their terms are notorious for making a borrower so dependent and so enslaved that it gets into a deeper and deeper financial hole. The present government has increased the electricity tariff by 80 percent in two years and, despite the 1,500 deaths in Karachi due to heat and load shedding, has asked K-Electric to increase prices again. The IMF classifies Pakistan as its most obedient client that will obey its demands even against the wishes of the people of the country.
Herein lies the difference between true democracies and sham democracies, the difference between bold leadership and cold leadership, the difference between an aware and vociferous public and an unaware and suppressed pubic. The Greek government, in the true spirit of democracy, has gone back to let the public decide whether the troika of lenders will dictate the terms or whether the will of the people of Greece will also be part of the negotiations deal. Pakistan, in its true spirit of sham democracy, does not even go back to parliament to debate and approve new taxes. Ishaq Dar has passed four increases in taxes on petroleum and electricity singlehandedly without even a debate in parliament. The most controversial budget was passed while the opposition was out of the National Assembly protesting against the Karachi deaths. This is the autocratic democracy being practiced in the country.
In Greece, the finance minister, Yanis Varoufakis, who wanted a no vote in the referendum, even after getting that vote, resigned as he felt that his abrasive style of negotiations may not get the Greek people the deal they wanted. This level of integrity only comes when you are obedient to the voter and not to those who give you money and positions. Even the image of how Yanis walked out of his office after resigning spoke volumes about what true representatives of the people are. A minister in our country would be surrounded by his followers and his security, and would be driven in bulletproof cars with black windows. But the finance minister of Greece, wearing his jeans and shirt, picked up his helmet, sat on his motorbike and sped away, one among many, returning home after the job.
The writer is secretary information PTI Punjab, an analyst, a columnist and can be reached at email@example.com