TERRORISM AND PAKISTAN

This article has been published in Pakistan Today.

In the age of information, ignorance is a choice and we as a nation have chosen to remain ignorant. Dumbed down to the lowest common denominator, devoid of any aspiration, we are swallowing the dominant myths and mindlessly repeating the mantras inserted into our skulls, derived from a generation of cleverly crafted propaganda. Why else would we allow our country to be destroyed? Why else would we be rewarding its destroyers? The fact often disavowed that we are being directed, controlled, censured, commanded, preached at and indoctrinated by the creatures who neither have the rights, nor the objective merits to do so. The country that was created for the people to enjoy their freedom, failed to serve the purpose, because people surrendered their personal authority and moral integrity to a group of oligarchs, having no religion, class, creed or race, but vested interests. The ruling class, the British trained bureaucracy, the military establishment and the elite civilians were profoundly selfish, having lack of vision and in-depth analysis, to deal with defense related matters and foreign policy. They turned the nation’s image as beggars asking for aid and mercenaries fighting proxy wars for global powers.

Here is a glimpse of our myopic and hedonistic leadership’s mindset;

Governor General Ghulam Muhammad during his conversation with Vice President Nixon, pleading for military aid stated that, “… were the US not grant aid now, especially in view of all publicity, it would like taking a poor girl for a walk and then walking out on her, leaving her only with bad name”. (Ref: Memorandum of conversation of Ghulam Muhammad and Vice President of the United States, December 7, 1953 in Karachi. Foreign Relations of the United States (FRUS) 1952-1954, Volume XI, p. 1832).

Foreign Minister Zafrullah Khan, during a meeting with Governor Stassen in 1953 said; “It was Pakistan’s belief that the beggar’s bowl should never be concealed”. (Ref: Memorandum of conversation June 22, 1954 in Washington. FRUS No 9281, Volume XI, p. 1849).

Dennis Kux, a former US ambassador to Pakistan, in his book Disenchanted Allies, quotes Ayub Khan, who, getting frustrated with slow pace of negotiations with US during his visit to Washington, went to Henry Byroad’s office and told him, “I didn’t come here to look at barracks. Our army can be your army if you want us. But let’s make a decision”. What about the people of Pakistan, Mr. Ayub Khan?

Right from the beginning, Pakistan’s apprehension about the designs of a hostile large neighbor, India prompted it to try to develop friendly defense relations with large powers such as US and later on China. Americans knew it well that Pakistani rulers cannot live without dollars and they took full advantage. The policy makers went too far in relationship with Americans, getting Pakistan unnecessarily involved into US led alliances of SEATO, CENTO and Baghdad pact against Soviet Union. This alliance with US and unnecessary acts of obedience brought the anger of Soviet Union, whose early neutral stand on Kashmir quickly changed to a pro-India stance.  A factor often ignored by the historians that during the period of 1951 to 1953, several high level meetings were held between Pakistanis and Indians, at highest levels on Kashmir Issue. India accepted Kashmir as central issue between the two countries and during a meeting between two Prime ministers in 1953, India agreed in principle, about plebiscite. It was decided that the plebiscite administrator would be appointed by the end of 1954, Pakistan’s association with US sponsored pacts and consequent pro-India stance by Soviet Union on Kashmir, provided a golden opportunity for Nehru to renege completely on all assurances.

Ayub Khan who came into power in 1958, through a military coup, was obsessed with modernization of the armed forces in shortest possible time. He saw the relationship with US the only way to achieve his organizational and personal objectives. He allowed Americans to use Peshawar airbase for spying activities against Soviets and establish a communication center for electronic espionage at Badaber. In 1960, Soviet army shot down the U2 Spy plane that took off from Peshawar air base. Soviet Union demanded Pakistan to dismantle Peshawar based espionage facilities and threatened to attack, if the demand is not met. This is one example of military’s superiority complex with respect to civilians, where the soldiers while considering themselves to be the soul of the nation and ultimate guaranteer of its security turned ambivalent in their relationship with rest of the citizenry. The falsified sense of moral superiority over the civilians, despite having no training, knowledge and analytical vision to deal with the complexity of economic and foreign affairs, developed gradually from Ayub Khan’s era and got transferred to next generation of officer corps under Gen. Zia, who took the relationship with US to a new level by turning the country into a frontline state fighting America’s war against Soviet Union, at the detriment of its people.

In an appearance before a subcommittee of the House Appropriations Committee on April 24, 2009 secretary of state Hilary Clinton officially admitted that the United States, in its zeal to beat the Soviet Union, has aligned itself with forces that today have grown into an existential threat to the world. She said; “But the problems we face now to some extent we have to take responsibility for, having contributed to it. Let’s remember here … the people we are fighting today, we funded them twenty years ago … and we did it because we were locked in a struggle with the Soviet Union. We did not want to see them control Central Asia and we went to work … and it was President Reagan in partnership with Congress led by Democrats who said you know what it sounds like a pretty good idea … let’s deal with the ISI and the Pakistan military and let’s go recruit these mujahideen. And great, let them come from Saudi Arabia and other countries, importing their Wahabi brand of Islam so that we can go beat the Soviet Union.

How did this happen?

In his memoir published in 1996, the former CIA director Robert Gates made it clear that the American intelligence services began to aid the mujahidin guerrillas not after the Soviet invasion, but six months before it. In an interview two years later with Le Nouvel Observateur, President Carter’s national security adviser Zbigniew Brzezinski proudly confirmed Gates’s assertion. According to the official version of history,” Brzezinski said; “CIA aid to the mujahidin began during 1980, that’s to say, after the Soviet army invaded Afghanistan. But the reality, kept secret until now, is completely different: on 3 July 1979 President Carter signed the first directive for secret aid to the opponents of the pro-Soviet regime in Kabul. And on the same day, I wrote a note to the president in which I explained that in my opinion this aid would lead to a Soviet military intervention.”

George Crile, a renowned American journalist wrote Charlie Wilson’s War (best-selling book 2003), which tells the story of how the United States funded the only successful jihad in modern history, the CIA’s secret war in Afghanistan that gave the Soviet Union their own Vietnam. Congressman Charlie Wilson is best known for leading Congress into supporting Operation Cyclone, the largest-ever Central Intelligence Agency (CIA) covert operation under the Carter and Reagan administration. In his book Crile writes about Charlie Wilson; “He told Zia about his experience the previous year when the Israelis had shown him the vast stores of Soviet weapons they had captured from the PLO in Lebanon. The weapons were perfect for the Mujahideen, he told Zia. If Wilson could convince the CIA to buy them, would Zia have any problems passing them on to the Afghans? Zia, ever the pragmatist, smiled on the proposal, adding, “Just don’t put any Stars of David on the boxes” {Page 131-132}. 

Gen. Zia-Ul Haq, DG-ISI Akhtar Abdur Rahman, CIA Director William Casey, Prince Turki Bin Faisal (Director of Saudi General Intelligence) and Prince Bandar Bin Sultan (Saudi Ambassador at US) were the main architects behind creation of Taliban. Bin Laden was hired by Prince Turki Al Faisal in the late 70s to do the dirty work of Afghan Jihad. From the moment agency money and weapons started to flow to the mujahidin in late 1979, Saudi Arabia matched the U.S. payments dollar for dollar. They also bypassed the ISI and supplied funds directly to the groups in Afghanistan they favored, including the one led by their own pious young millionaire, Osama bin Laden. According to Milton Bearden (A former CIA Official, stationed in Pakistan during Zia’s regime); “private Saudi and Arab funding of up to $25 million a month flowed to Afghan Islamist armies since 1979. Pakistan trained approximately 16000 to 18000 fresh Muslim recruits on the Afghan frontier every year, with the help of various religious groups, funded by Saudis and CIA.”

Pulitzer Prize-winning journalist Steve Coll has written a book Ghost Wars, an inside story based on extensive firsthand accounts. What makes his book especially interesting is how he came to know what he claims to know. He has read everything on the Afghan insurgency and the civil wars that followed, and has been given access to the original manuscript of Robert Gates’s memoir (Gates was CIA director from 1991 to 1993), but his main source is some two hundred interviews conducted between the autumn of 2001 and the summer of 2003 with numerous CIA officials as well as politicians, military officers, and spies from all the countries involved except Russia. In his book, Coll has identified the culprits who created the monster. He writes; ‘’Carter, Brzezinski and their successors in the Reagan and first Bush administrations, including Gates, Dick Cheney, Donald Rumsfeld, Condoleezza Rice, Paul Wolfowitz, Richard Armitage, and Colin Powell, all bear some responsibility for the 1.8 million Afghan casualties, 2.6 million refugees, and 10 million unexploded land-mines that followed from their decisions. They must also share the blame for the blowback that struck New York and Washington on September 11, 2001. After all, al-Qaida was an organization they helped create and arm”. He also writes;The CIA’s director William Casey, knew next to nothing about Islamic fundamentalism or the grievances of Middle Eastern nations against Western imperialism. He saw political Islam and the Catholic Church as natural allies in the counter-strategy of covert action to thwart Soviet imperialism. The Muslim Brotherhood’s branch in Pakistan, the Jamaat-e-Islami, was strongly backed by the Pakistani army, and that Casey, more than any other American, was responsible for welding the alliance of the CIA, Saudi intelligence, and the army of General Mohammed Zia-ul-Haq, Pakistan’s military dictator from 1977 to 1988.” 

Gen. Zia formed an alliance with religious organizations in Pakistan, establishing Madrassas all over Punjab and NWFP to recruit the fighters. The religious leaders, saw it as an opportunity to press the military dictator and introduce sharia, the Islamic Law in Pakistan and Zia fully complied. Gen. Zia allowed CIA to establish the bases in Baluchistan to keep a check on Iran. He also supported the Saudi vision of creating a Sunni-Wahabi force of Mujahideen to counter Shia Islam of Iran. Brigadier. Muhammad Yusaf (Former Head of Afghan Bureau at ISI) came up with some interesting remarks in his book Silent Soldier: The Man Behind The Afghan Jihad. He writes; “General Zia and DG-ISI Akhtar Abdur Rahman had very cordial relations with CIA director William Casey. To offset that uncomfortable closeness with Americans, Zia and Akhtar were portrayed as holy warriors of Islam and modern day Saladins. According to one close associate of Akhtar, ‘They (Casey and Akhtar) worked together in harmony, and in an atmosphere of mutual trust’. The most interesting remarks about the death of CIA Director, William Casey were made by Brigadier Yusuf. He states that, “It was a great blow to the Jihad when Casey died”. He did not elaborate whether by this definition one should count Casey as Shaheed.

In 80s, when the ruling group was basking in the glory of unlimited gifts from around the world and flurry of foreign visitors (including military personnel, spies, arms dealers, journalists, academics, diplomats, aid workers), the myopic leadership never thought of a day when they will be running mad from one corner to another to try to avoid being declared as ‘rogue’ and ‘terrorist’ country.  They failed to recognize the limitations of relationship between two unequal partners.  They conveniently forgot that Kashmir and India were problems of Pakistan, not of US and there will be very limited if any support by US on this issue.

Even after the Soviet Union’s withdrawal from Afghanistan in 1988, the CIA continued to follow Pakistani initiatives, such as aiding Hekmatyar’s successor, Mullah Omar, leader of the Taliban. What was the Pakistani initiative? According to Steve Coll; “Every Pakistani general, liberal or religious, believed in the jihadists by 1999, not from personal Islamic conviction, in most cases, but because the jihadists had proved themselves over many years as the one force able to frighten, flummox and bog down the Hindu-dominated Indian army. About a dozen Indian divisions had been tied up in Kashmir during the late 1990s to suppress a few thousand well-trained, paradise-seeking Islamist guerrillas. What more could Pakistan ask? The jihadist guerrillas were a more practical day-to-day strategic defense against Indian hegemony than even a nuclear bomb. To the west, in Afghanistan, the Taliban provided geopolitical” strategic depth” against India and protection from rebellion by Pakistan’s own restive Pashtun population.” Where is Common man in this picture and what about his welfare and security?

After Zia’s death, Benazir Bhutto took charge of the office as civilian Prime Minister. Pakistan’s military intelligence officers didn’t like Benazir Bhutto, but she supported Taliban in pursuit of Zia’s dream of loyal Pashtun-led Islamist government in Kabul. She formed the Afghan cell and assigned ISI Chief Gen. Hamid Gul, as in-charge. US ambassador regularly attended the Afghan cell meetings and Benazir Bhutto lied to American officials for two years about Pakistan’s aid to the Taliban, which she admitted in her interview to Steve Coll. Nawaz Shareef who succeeded Benazir as prime minister, was a creation of Gen. Zia and knew everything inside out. He had a special relationship with Saudis and he supported the Saudi vision of creating a force to counter the shia Islam of Iran and guard the Saudi interests in the region. Saudis in pursuit of dominance of the Wahabi ideology and their hatred for Iran, turned Pakistan into a battleground for sectarian wars. All post-Zia regimes supported Taliban, provided them financial aid and manpower till September 2001 when 9-11 happened. Gen, Musharraf, in his obedience to US, went even further and turned everything upside down after 9-11 incident. He created the dominant myth of “Pakistan First”, and turned the country into a frontline state once again, this time for US war against Al-Qaida. ‘Pakistan first’, sounds good enough but what about Pakistanis, their welfare and security, Mr. Musharraf?

Lt. Gen Shahid Aziz (Former Chief of General Staff, during Musharraf regime) In his live interviews on several media channels on 6th and 8th December 2009, has revealed that the Army as an institution was kept in complete dark about what was going on between Washington and Islamabad after 9 / 11 and on ‘war on terror’ deals. He said; “Gen Musharraf had also allowed the US drones to use the Pakistani airspace for intelligence sharing besides permitting the American intelligence agencies, the CIA and the FBI, to recruit their agents in the tribal belt of Pakistan. Despite strong opposition from the GHQ, Gen Musharraf granted this permission in the name of intelligence sharing. The same drones had then carried out strikes inside Pakistan, killing hundreds of people, including innocent women and children”. Lt Gen Shahid Aziz felt no hesitation to disclose that when initially consulted after 9/11, the top commanders had decided to stay out of the conflict. However, later because of compromises by Gen Musharraf, the Army was dragged in that odd situation. He also told the media that while Pakistan Army used to catch the targeted foreigners and locals, handing them over to the ISI for interrogation, they were passed on to the Americans without the knowledge of the Army. It caused a lot of resentment in the top echelons of the Pakistan Army when they found this was happening. Gen Musharraf kept the ISI engaged to collaborate with American CIA without the knowledge of other commanders.

And then some wonder where the terrorists are coming from? Professor Ghafoor Ahmed former head of JI said; “You pick four or five retired ISI generals and you will come to know who these terrorists are.” This monster has been created by our own myopic establishment which still continues its support to the terrorist organizations. In their obedience to US and Saudis, they have turned Pakistan into safe haven for religious extremists and terrorists. A country where elites are well protected in their bomb proof vehicles and houses guarded by security forces, while common man has become vulnerable to all sorts of terrorism, including sectarian killing and suicide bombing. A society where intellectuals look for low paid jobs but couldn’t find any, while leaders of extremist organizations, backed by establishment and politicians, travel in SUVs with protocols.

Asif Zardari succeeded Gen. Musharraf as president of Pakistan. After joining the office, the first thing he did was to Issue a moratorium for terrorists on death row. The ban expired on 30th June 2013 but death sentences were not carried out until the recent attack on Army Public School in Peshawar. On what moral or legal grounds, this moratorium was issued? Public as always, has been duped into believing the dominant myths and contradictory dogma. The questions, quite relevant to the situation but never asked. Are we really a free nation? What about the freedom, welfare and security of common man? Perhaps the ignorant people, unaware of their rights, deserves to be ruled by the least meritorious, taken hostage by the extremists and looked upon as rogue nation.

Human Rights Watch has conducted a systematic Investigation on History of Afghan War and Human rights violations during post Soviet Invasion era. The report was published in 2005 with the title; Blood-Stained Hands: Past Atrocities in Kabul and Afghanistan’s Legacy of Impunity. 

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CORRUPTION IN PAKISTAN

The Article has been published in Pakistan Today.

To be in harmony with a nefarious and unscrupulous system: this is not a plausible desideratum. It can be achieved only through disavowal of what surrounds us. Sadly, we are in complete harmony with our surroundings and ‘denial’ has become the most abundant renewable resource in our country. Denial of corruption being a nom rather than exception and the impunity of ruling elites from all sorts of accountability. Whatever could be legally gotten away with, is being tolerated through a passionate spinning of erroneous narrative, blaming someone for something and then everyone for everything. Repudiating our own contribution and moral inconsistencies, we are in a cognitive dissonance between political idealism and hard wired evolutionary psychology that sways man’s mind to be awed by the rich and powerful. We are overwhelmed with a presumptuous desire for being like them. Consequently we follow their footsteps.

We lie, cheat, intimidate and exploit others for personal gains. Those with particular advantages such as contacts and political connections are able to move more effectively within the system, trampling everyone else in their pursuit of happiness. Honesty and integrity are gone extinct. Morality requires authentication from some sort of superior authority. Ignorance gets celebrated and honored. As a result, we have insane idiots talking for us, while stealing everything from us. We are being lied to, cheated and intimidated. The three branches of control which includes government, establishment and bureaucracy. We are told that we are directing this insane three ring circus, an illusion that keeps us voting for a change that never comes. Voting simply placates, pacifies and preserves the illusion of choice, while transferring the guilt and responsibility onto the people. Until the reality impacts us to a point of extreme discomfort, we defend our fantasy of a benevolent government, run by altruistic public servants and true representatives of people.

It is the paradoxical nature of our co-creative ‘reality consensus’, which makes it nearly impossible to discuss the current conditions we’re existing within, without sounding insane, to the majority of dumbed down and trance induced people, who aren’t firing on all cylinders. The fact is, that we never had the choice to decide who will run the system and how. Initially it was British trained bureaucracy then dictatorship and eventually a civilian, chosen and promoted by the dictator. People were given the right to choose for the first time in 1970 and the results created serious problems. Out of 320 seats, 160 were won by a party belonging to East Pakistan, but the government was formed by a party winning 80 seats in West Pakistan. And then we blame external interference for 1971 incident. The only lesson learned by the powers behind the scene was, that people should not be allowed to choose, rather given an illusion of choice.

In retrospect, Pakistan has always been the case of elite adjustment and plutocracy. One administration got replaced by the other, while plunderers and blunderers came out with clean chit every time. Politicians and dictators have always been each other’s creation. Ayub Khan created Bhutto who then created Zia Ul Haq. Zia created Sharif brothers who in turn created Pervez Musharraf, who then created Chaudhary’s of Gujrat and few others. Creations had their differences with creators, but things remained strictly within the closed loop, revolving door politics of too much blame but no accountability. Everyone having dirty hands is ostensibly the reason. The ruling class, particularly the military and civil bureaucracy has no religion, caste, ethnicity or tribe, instead they have vested Interests that promotes the unsustainable plundering of social surplus.

This process of theft is unsustainable and it has severely limited qualitative development in exploited masses. A reality often disavowed, as we are in a comfortable complacency and not willing to face it. But the fact remains that we, have adapted to this unscrupulous paradigm, instead of resisting it. The latest report by Transparency International ranked Pakistan among the top most countries where corruption has gone rampant. We are moving on a path towards self-immolation without even realizing it, and will find ourselves in the dustbin of history in less than a century.

The question is, are we really aware of what’s actually going on in the country? How the oligarchs, schooled in the mechanisms of manipulation, subtle and overt repression and exploitation to protect their wealth and power at the expense of common man, are suppressing the qualitative development in exploited masses? Let’s have a look;

Professor Anatol Lieven of King’s College in his book Pakistan: A Hard Country quoted Dr. Mahbub ul-Haq (the renowned Pakistani economist who is credited with the idea of UNDP’s human development index –HDI); “every time a new political government comes in, they have to distribute huge amounts of state money and jobs as rewards to politicians who have supported them, and short term populist measures to try to convince the people that their election promises meant something, which leaves nothing for long-term development. As far as development is concerned, our system has all the worst features of oligarchy and democracy put together.” 

Dr. Mahbub also said; “we have not been able to deregulate the economy, despite several years of trying, because the politicians and officials both like the system, Bhutto put in place. It suits them both very well, because it gave them lots of lucrative state-sponsored jobs in industry and banking to take for themselves or distribute to their relatives and supporters.”

Individuals belonging to the exclusive elite club, obtain loans to set up businesses and have their loans written off to get more. Loans waived off in Pakistan are far greater than anywhere else in the world. For the first time in history of Pakistan, a major crackdown was launched against the loan defaulters in November 1999 and government estimated the default amount at around PKR. 146 Billion. According to the figures provided by Governor SBP, Mukhtar Nabi Qureshi, 325 defaulters owe more than PKR. 100 million each amounting to PKR. 72 billion. About 590 legislators were defaulters of PKR. 9.64 billion, mostly of Agricultural Development Bank of Pakistan (ADBP). National Accountability Bureau (NAB) was entrusted to recover the loans from the defaulters but only 3% of the default amount was recovered during the campaign. Remaining 97% left unrecovered due to compromises, nepotism, deals and negotiations.

Lt Gen Shahid Aziz, a former Chairman NAB, while speaking to news media (referring to 6th & 8th Dec 2009) after expiry of two year’s mandatory period that prevented him to discuss service matters, said; “I was appointed as the NAB chairman with a pre-condition that I would not open old cases against politicians and other prominent people and was pressurized into formally closing down cases against politicians supporting Gen Musharraf. I was told repeatedly not to create problems and not to destabilize the government, otherwise the system would collapse. They (the president and his team) gave a strange logic that corruption and economic development goes hand in hand”. He quoted Lt Gen Khalid Maqbool, a former NAB Chairman, as saying while trying to convince him that: “If you stop corruption, there will be no development. If ministers and politicians are not given personal benefits in contracts, why would they pursue development schemes? They have to be given personal incentives such as awarding contracts to their sons and kinship.” Try to read the mindset of Oligarchy.

Ten years later, the loan defaulter’s list was placed before the Supreme Court but deferred because Shareef family was also among the defaulters and CJP Iftikhar Chaudhary, being the part of their feudal legion, had to protect them. Instead of taking action, he ordered constituting a commission for loan recovery. Till today, not a single loan has been recovered, not a single property confiscated and not a single man is jailed or convicted. In Pakistan it is very old and tested technique that if the government or the court wants to thin out some issue or to detract people’s attention, or to make the fools forget corruption; make out a commission or committee. The poor people having short memory will forget everything including the fact that Pakistan owes approximately $ 65 billion to IMF, its people owe $ 75 billion as internal debt and the current government has signed another $ 35 billion as external debt from China. They will not even remember that London financial market indicators have already contemplated a default-like scenario for Pakistan recently.

It is an open secret that over the past few decades, Pakistan’s ruling elite has transferred huge amounts of money to Swiss and other banks. This money, generated through illegal activities by rapacious politicians, avaricious bureaucrats, terrorist and drug-for-arms networks and greedy businessmen, was never declared for tax purposes. Pakistan’s black economy is said to be three times its regular economy. In 1996, a lawyer Javed Iqbal Jafree filed a petition against political leaders holding assets abroad and requested the court to issue notices named in the petition. The petitioner alleged that the respondent politicians transferred at least 300 billion US dollars to foreign countries through money laundering. He said by doing this the politicians caused a huge loss to the national exchequer. Subsequently, court notices were issued but for lack of any follow-up measures, the case has remained pending.

On October 1, 2010, the Swiss Parliament passed the historic “Return of Illicit Assets Act” (RIAA) to make it possible for developing countries to recover billions of dollars shifted to Swiss banks by their unscrupulous ruling elites. In October 2011, then Senator Muhammad Ali Durrani filed a writ petition in the Supreme Court for the recovery of about “500 billion dollars looted from Pakistan and kept abroad in unnamed bank accounts in the West and also in the shape of unnamed properties operated through agents and the front-men for the corrupt Pakistani politicians, civil and military bureaucrats and businessmen. Once again no serious action taken by courts and no serious attempts have been ever made by the NAB, FBR, FIA, Anti-Narcotics Force and other government agencies to conduct an in-depth study to quantify the magnitude of black money and the amounts shifted abroad.

It is to be noted that Pakistan is a resource rich country and its natural resources including Gold, Copper and Concrete at Riko Diq alone are estimated at a value of around $300 billion. Who is extracting these resources and who is benefiting from the deals? BHP Billiton initially signed the exploration license with the Balochistan government in 1993, forming Tethyan Copper Company (TCC) later in Australia, having 75 per cent and 25 per cent stake respectively. With gold and copper established in substantial quantity, BHP sold its stake, 37.5 per cent each to the Chilean conglomerate, Antofagasta Minerals and Canadian company Barrick Gold. Why the agreement was signed so secretly and not debated with people? Who gave the waiver to BHP Billiton to transfer its 75 per cent share in the TCC? Was the agreement in accordance to the local laws? Apparently not, because when PPP government was trying to renew the agreement with TCC, a three-judge bench of Supreme Court, headed by Chief Justice Iftikhar Muhammad Chaudhry gave its ruling that the agreement of July 1993 was in conflict with the laws of the country. TCC then filed compensatory claims in the international arbitration court.

Interestingly, soon after the change of government, Iftikhar Chaudhary got his son Arsalan Chaudhary, appointed as vice-chairman of the Balochistan Investment Board and this appointment was Reko Diq-specific. Spokesperson of PML(N) Mushahidullah Khan defended this appointment, stating it as a reward for Iftikhar Chaudhry’s services to the nation. Services to the nation or services for Sharif Family? Arsalan Iftikhar later announced an open global tender for Riko Diq, attracting widespread criticism, and was forced to resign. Meanwhile Arsalan also got involved in a scandal with Malik Riaz and both parties were found guilty of massive tax evasion. Surprisingly no action was taken against either of the two. Malik Riaz Hussain, a former military contractor, turned billionaire within a short span, has been involved in quite a few controversies. A former Chairman NAB in his interview to Dawn on 8th Dec 2009 pointed out that once Gen Musharraf personally called him and said; “drop the name of Malik Riaz Hussain from the exit control list. As President of Pakistan, I give my personal guarantee that he would not run away. Isn’t a personal guarantee of the President of Pakistan sufficient to satisfy you?” Malik Riaz was one of prime accused in a multi-million-forest land scam and his name was subsequently removed from ECL. Ironically, the jails of our country are filled with petty thieves and poor people under long pre-trial detentions, while the robber barons are getting saluted and honored for their atrocities and malfeasance.

Currently, the PML (N) Government is trying to get an out-of-court settlement with TCC on Riko Diq, in an attempt to plunder whatever they can, just like its predecessor, the PPP government. As usual the oligarchs are doing their dirty work, all in the name of people, while people are being kept occupied with the dominant myths like Indian threat, Kashmir’s liberation, Islamization vs secularization, war against terrorism and democracy vs dictatorship.

The three ring circus has always been backed by various elite groups. Whether it was the stock market barons minting money from an artificially stable economy and a fictitious boom during Musharraf’s regime, whether it was real estate barons and commodity speculators making fortunes during Zardari’s era, all followed the same pattern of defending each other’s plunders and blunders. The current regime of PML (N) is on its way to break all the previous records of corruption. What trickles down is being grabbed by the opportunists such as political activists, bureaucrats, contractors, media anchors, journalists, members of academia and civil society, lawyers and businessmen, leaving 99 percent of the population deprived, clueless and completely out of the picture.

A question that is never asked. What are we paying them for?

As Lawrence Ferlinghetti said; “Pity the nation that raises not its voice, except to praise conquerors and acclaim the bully as hero … pity the people who allow their rights to erode and their freedoms to be washed away.”

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PAKISTANIS AND THEIR DELUSION OF GRANDEUR

Published in Pakistan Today.

It is better to embrace an ugly truth than to find comfort in a beautiful lie. Regrettably, our case is upside down. We dwell in delusions of grandeur, primarily based on rhetoric and contradictory dogma. Collectively we have created a functional niche, where ignorance seems to be a key prerequisite, along with denial. We have surrendered our discernment, free will, personal authority and moral integrity to a group of plunderers. The paradigm has become a nepotistic, closed loop, revolving door, three ring circus where nothing but corruption trickles down and only scum can rise. From one administration to the next, no matter what it is called, we are being led towards totalitarian dystopia, but we are in a state of normalcy bias, underestimating the probability as well as the possible effects of the disaster. Ironically, the academia and the civil society are indulged in intellectually dishonest attempts to justify the unjustifiable, while the corporate media, the tricksters, through effective trance induction, are constantly humanising the elite villains, blowing off steam, winning them sympathy of masses and justifying the status-quo. Within this process, our aggregate consciousness has become erroneously attached to, and vicariously identified with, our abusers, while completely dissociated from reality.

Let’s be realistic, putting aside the delusion of inflated self-significance, and think for a moment. Being the citizens of this country and a part of this society, we hold a collective identity, through which we are recognised in the global community. This identity is not just limited to a few thousand elite oligarchs or few hundred thousand well settled, well off opportunists or the diminishing middle class, rather it includes all 180 million people who live in this country. The global community sees us as a rogue nation in a state of decline, being led by the most unmeritorious, devoid of any aspiration, and we have provided them every reason to believe so. Some of us may feel offended by this statement but let’s ignore the resent for a while and check out the facts and figures.

Economic Cooperation and Development (OECD) has placed Pakistan among fragile states due to extreme level of inequality, conflict of interest and rapid growth of the shadow economy, which has increased three times in size as compared to regular economy. According to UNDP-Human Development report (2013), we have successfully managed to orchestrate the largest income inequality gap in the country, where 49.4 percent Pakistanis live in multidimensional poverty while 11 percent are at risk of being pushed into the category. 27.4 percent Pakistanis live in severe poverty while 21 percent are below the poverty line. Intensity of deprivation is 53.4 percent and half of the country’s population has no access to basic sanitation, healthcare and education.

The UNICEF Annual report 2013 has provided some stunning and heart rending figures. It says; 15 percent of children under five suffer from acute malnutrition, which is above the international emergency threshold. Nearly half of children suffer from chronic under-nutrition which leads to stunted growth. Pakistan is one of nine countries globally lagging behind in terms of access to education. An estimated seven million children of primary age and 25 million of secondary age (lower and upper) are out-of-school. Pakistan is also on top in child and maternal mortality.

According to the World Health Organisation (WHO) report 2013, 460 children died in Punjab and 300 children died in Sind due to measles, a virus which is said to have spread rapidly due to unhygienic and unhealthy living conditions in rural areas. Recent reports from international media have confirmed at least 250 child deaths in Tharparkar due to malnutrition and several children died in various hospitals of Punjab due to non-availability of health facilities. Super floods hit the rural areas of Pakistan, year after year, leaving behind millions of shelter-less people, deprived of basic amenities while nothing has been done so far to prevent this from happening in future.

The situation is beyond alarming, it is surreal. While oligarchs are living in palatial mansions and travelling in their shiny SUVs, accompanied by police squad cars, the deprived people, their entire families along with kids are committing suicides due to poverty, hunger and joblessness. According to newspaper and media reports, government had to ban rat-killer pills because many people, particularly household women, were using those pills as easy and cheap way to end their life due to poverty. During past years, liberty tower (Minar-e-Pakistan) in Lahore became favourite place for suicide committers and considering it an embarrassment, the government had to stop the electric lift service of the tower to decelerate this flow. This is a clear example of shameless denial by the ruling elites as well as the society. Recently, quite a few people have committed suicides, being unable to pay the utility bills. The most alarming aspect of extreme inequality and rising poverty is that people living below the poverty line, insecure, devoid of all means and hope, become targets for recruitment by Taliban and other jihadi elements. After all, this concept of recruitment is nothing new for the country and its myopic ruling elites who, with their ill-thought policies, have contributed the most in creating this ghost of terrorism that haunts the world today.

It is ironic that inequality is not just limited to income and wealth, rather it’s rampant in terms of human rights, law and security too. Extreme level of insecurity and discrimination is apparent in our society, which has become highly vulnerable to street crimes, extortion, illegal occupation, random shooting, sectarian violence and terrorist activities. The poor citizens, being the victims of street crimes, often fail even to get the FIR registered. Law enforcement agencies, instead of protecting citizens, are acting as a hired mercenary force for the ruling elites, riding in their squad cars or standing outside their palatial mansions. Recruitment of police has always been the prerogative for the ruling class. Criminals and unmeritorious individuals, hired on the basis of political affiliations, are usually involved in criminal activities and the dirty work of harassing and humiliating the opposition or at times in extra judicial killings. In this country, common citizens get stopped, checked, inspected, humiliated, arrested, beaten, and sometimes kidnapped by law enforcement agencies, while the oligarchs break laws and get saluted for it. Courts and judiciary, under extreme political pressure, have become more or less ineffective in defending people’s civil and human rights.

According to Human Rights Report 2013 by the US Department of State, the most serious human rights problems in Pakistan are extrajudicial and targeted killings, sectarian violence, disappearances, and torture. Other human rights problems included poor prison conditions, arbitrary detention, lengthy pre-trial detention, a weak criminal justice system, lack of judicial independence in the lower courts, and infringement on citizens’ privacy rights. Freedom of expression is restricted and right to information unavailable in Pakistan.World Human Rights Watch Report 2013 has pointed to attacks on civilians by militant groups, atrocities against minorities, growing electricity shortages, rising food and fuel prices, and continued political dominance of the military as major human rights Issues in Pakistan. The report particularly focused on abuses by the Pakistani police, including extrajudicial killings throughout the country, target killing of Shi’a Muslims, especially the Hazara community, by Islamist militant groups and the most serious human rights violation in Baluchistan including continued abuses, ongoing torture and ill-treatment of criminal suspects, not to mention unresolved enforced disappearances of terrorism suspects and opponents. As per the 2014 Global Slavery Index, our country is ranked third in terms of proportion of the population that is enslaved.

The other side of the coin displays a completely different picture. While more than two-thirds of the population is living in extreme deprivation, Pakistan is considered one of the best clients by IMF and other international creditors. The country has never disappointed its creditors, never stopped the debt servicing and never requested any debt relief, even during the worst crises.

According to period-wise figures released by the Economic Affairs Division (EAD) and the Ministry of Finance at 2013 briefing to Special Committee on Debt; in last 28 years Pakistan economy has relied on reckless borrowing, which could not solve the economic problems of the country. The current foreign debt stands at $63 billion (as of June 2013) and the domestic debt is about $75 billion. During Gen Zia’s regime, from 1985-88, the total foreign assistance received by the country was $6.37 billion. During Benazir Bhutto’s first regime, $4 billion was received from IMF. During the first regime of Nawaz Sharif 1990-93, a total of $7.5 billion was received. In Pervez Musharraf’s regime 1999-2008, a record total of $23 billion loans were received by the country. During 2008-2013 the previous PPP government received total foreign assistance of $14 billion. Public debt figures quoted by EAD are quite shocking. Public debt is government debt generated through borrowing from banks and issuing bonds/bills; in short; printing money. According to the figures, successive governments over the last 60 years accumulated Rs 6,040 billion of public debts while the previous PPP regime alone added Rs 8,215 billion in just five years. Where did all that money go?

In September 2013 the International Monetary Fund (IMF) approved the latest bailout loan of $6.64 billion under the Extended Fund Facility. In exchange, strict austerity measures were demanded from the PML (N) regime, through IMF’s Structural Adjustment Program (SAP). Those measures were bound to further deteriorate the living conditions of workers and the poor. The conditions imposed by IMF were; cut down in subsidies causing increase in utility prices, devaluation of currency causing subsequent expansion in volume of debt, and privatisation of public assets. The government has agreed to; increase electricity and gas prices for domestic users by 30 percent, devalue Rupee at an average of 110 rupees to one US dollar and privatisation of additional 30 state-run enterprises, apart from 35 already chosen.

The more our governments borrow on our behalf, the more indebted we get. Why are objectives and terms of loans taken in the name of the people, not debated with the people, so secretive? And where has all this money gone? A nuclear power whose natural resources including gold, copper and concrete at Riko Diq alone are estimated at a value of around $300 billion, which owns gold and copper at Saindak and boasts 185 billion tonnes of coal reserves at Sind, is borrowing from IMF in the name of the people while imposing strict conditions on the same people, forcing them to die of hunger, diseases or suicide.

Who is responsible for this situation? The answer is simple. We are responsible. As Walter Kelly said; “We have met the enemy and he is us”. We have become our own enemy. We are confined within a comfortable complacency and swallowing dominant myths under the influence of intimidated brainwashing by the worst of the worst; insatiable opportunists, with no objective merits to lead. Corruption has become a norm in our consensus. Whatever could be “legally” gotten away with, has been tolerated. The latest report by Transparency International ranked Pakistan among the top most countries where corruption has gone rampant and right to information doesn’t exist. The report expresses concern over how unaware citizens are of their rights.

We need awareness. We need to examine reality and understand that representation by a crime syndicate can never be an honest representation for the victims of its malfeasances and atrocities. We will have to rebuke intimidation from criminal regimes and quit subservience to ideologies, demanding our rights as humans, citizens and individuals. The problem isn’t the politicians or bureaucrats or establishment, the problem is the system itself. A system that doesn’t value life, dignity, self-respect and well-being of the common man, a system that doesn’t provide justice, equality, equity, peace and security, cannot last for long and get sobliterated.

There is no short term solution to the multidimensional problems we are facing. Education and awareness are key prerequisites for the change, which can only be achieved through a long term process. Instead of being selfish we will have to revive our faith in self-sacrifice for the common good. Instead of accepting an unequal educational system, we will have to educate all the children, the next generation in this country, without discrimination. Education doesn’t mean reading, writing or getting a degree and finding a job. It means learning to see through the façade of pretence. It means attaining knowledge and wisdom; knowledge to understand what’s going on and wisdom to change it. Let’s give it a try and hope that our next generation, once educated and enlightened, will stand against injustice and inequality, showing the oligarchy the exit door and replacing it with capable individuals in the decision-making process.

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IMF AND WORLD BANK’S RESTRUCTURING AGREEMENT FOR PAKISTAN

Published in Pakistan Today.

The ideology of neoliberalism imposed on poor nations demanding them to lower the living standards of their people. Enforcing Structural Adjustment Policies (SAPs) to ensure debt repayment and economic restructuring. These are the general demands by IMF and World Bank, requiring poor countries to reduce spending on things like health, education and development, while focusing on repayment and other economic policies as priority. The IMF and World Bank Restructuring programs have been heavily criticized for elevated poverty in developing third world countries and increased dependency on the richer nations.

Impact of IMF and World Bank Core Principles

Resource extraction/export-oriented open markets, minimized role of state, privatization, reduced protection of domestic industries, currency devaluation, increased interest rates, unstable exchange rates, flexibility of the labor market, elimination of subsidies, reduced financial regulations and forced increase in cheaper exports to keep currencies stable and earn foreign exchange to pay off debts.

According to Joseph Stiglitz (Ex-Chief Economist at IMF); the Bank’s ‘investigation’ involves little more than close inspection of five-star hotels. It concludes with a meeting with a begging finance minister, who is handed a ‘restructuring agreement’ pre-drafted for ‘voluntary’ signature.

In 1988, Davison Budhoo (Ex-Economist at IMF, who worked there for 12 years, designing SAP’s for third world countries) revealed in his 22-page resignation letter;
“When we went on a mission, we did not even have the scope to innovate, to look at the country and make projections, that you thought were reasonable… there was already a briefing paper before we entered the country. We were told what we were expected to do, and give conditionality in terms of what the fiscal deficit was and how much it should be reduced; even before we entered the mission… we were expected to structure our findings in relation to the figures in the briefing paper, which were put there without any research, and were predetermined. So the conditionality was also predetermined… In this sense, every IMF mission is fraudulent even today…”

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IMF and World Banks’s Structural Readjustment Program for Pakistan

World Bank assistance for Pakistan traces back to 1971, when the country received $25 million IDA assistance for cyclone-devastated East Pakistan. World Bank’s Resident Mission in Pakistan started in 1979 whereas Pakistan became the member of IMF in 1988. IMF’s restructuring agreement for Pakistan was introduced in 1991 when Privatization commission was formally established. It is to be noted that the ruling authorities, the politicians, bureaucracy as well as the establishment were not well versed with the tricks of trade and major role was played by SBP Governors (the chosen individuals) who were either former World Bank employees or directly associated with IMF in the past.

IMF’s control on monetary and economic policies

In order to understand how IMF directly controlled the monetary and economic policies, it’s necessary to know how the money policy works in Pakistan. The country’s currency i.e Pakistani Rupee was pegged to the Pound sterling until 1982, when the government of General Zia-ul-Haq, changed it to managed float. This regime is the current international financial environment in which exchange rates fluctuate from day to day, but central bank attempt to influence the country’s exchange rate by buying and selling currencies. The Central bank also controls the money supply through open market operations, targeting interest rate in order to expand or contract the monetary base (the expansionary and contractionary monetary policy), influencing the economic growth. A careful analysis of Fluctuation of interest rates, market-based pricing and periodic interventions by SBP in the past makes it clearly evident that the monetary policies are under direct control of IMF and World bank, through their representatives governing the central bank.

It is really important to note that all the Central Bank SBP governors who worked at their posts during the period starting from 1988 till 2009, were direct employees of either IMF or World Bank in the past, and have played key roles in defining the economic, financial and monetary policies for the country for more than two decades. It is a matter of common sense to question why Dr. Yaqub, Dr. Ishrat Hussain and Dr. Shamshad Akhtar left their lucrative jobs at IMF or World Bank and joined the Central Bank of Pakistan as governors. This question can also be rephrased as why these Governors were imported from IMF or World Bank to run the financial affairs of Pakistan. A careful analysis of country’s monetary and economic policies in last 20 years, will answer the question.

During last two decades, IMF loans have been an important source to manage the financial problems of Pakistan such as balance of payment deficits, stabilization of currency, rebuilding international reserves, managing liquidity problems along with enabling the country to meet it’s short term needs by providing various types of loans which IMF calls as its lending ‘facility’. These loans followed some very strict conditions imposed on the country in the name of “IMF’s Assistance policy”, raising prices on food, water, oil, electricity and cooking gas etc. in the name of market-based pricing bringing the nation ‘down and out’ squeezing last drop of blood out of poor people. However the politicians during the regimes of Benazir Bhutto, Nawaz Sharif, Perwez Musharraf and Asif Zardari have earned great fortunes in form of commissions received on account of privatization and liberalization. Cash flight and reserve drainage has also been observed during these regimes, followed by interest rate adjustments as per IMF’s demand. On the other hand, the country is struggled to maintain it’s currency exchange rate against US$ by throwing it’s products in open competitive export market. It is the same restructuring agreement that has deprived the nation of it’s precious resources located at Reko Diq, which is owned by Foreign mining companies and not the people of Pakistan.

IMF’s Restructuring Program;

Imtiaz Alam Hanfi (Governor SBP 1988-1993) initiated the restructuring program by privatizing financial institutions in Pakistan. Mr. Hanfi was not a former IMF or World Bank employee, however he attended the World Bank training based on managing various World Bank tasks for different countries in a simulated environment. Unfortunately the short training didn’t prove sufficient enough and he ended up getting into various conflicts with political governments of PPP and PML in 1988 and 1993 due to his Treasury Bill and Foreign Exchange reforms. In addition to that, he failed to comply with the demands of IMF to increase the interest rate to a desired level. Being somewhat dissatisfied with Imtiaz Hanfi, IMF recommended it’s employee Dr. Muhammad Yaqub who was appointed as Special Secretary/Principal Economic Adviser in the Ministry of Finance by PML Government in 1992. Later on He took charge as Governor SBP in 1993. He was an Economist by Profession and held several important positions in the IMF, which he joined in 1972 and left in 1992. Dr. Yaqub remained as SBP Governor till 1999. During this period he paved way for “IMF’s Four Steps to Damnation” by implementing the assistance strategy.

The four step program became fully effective in 1999 when Dr. Ishrat Hussain was appointed as Governor State Bank. Dr. Ishrat was a former World Bank Employee who joined World Bank in 1979 and held key positions there. As Governor SBP, Dr. Ishrat implemented a major program of restructuring of the Central Bank and steered the reforms of the banking sector, which were highly applauded by IMF and World Bank. He held the post till 2005 and then he was appointed as Chairman, National Commission for Government Reforms. In 2006, Dr. Shamshad Akhtar took charge as Governor State Bank, succeeding Dr. Ishrat Hussain. Interestingly, Dr. Akhtar was also a former World Bank employee who joined the bank in 1979 and has worked for 10 years as an Economist in the World Bank’s Resident Mission in Pakistan, starting from 1980. She served as Governor state bank till 2009, then she re-joined the World bank as Vice president and remained at the position till she became Assistant Secretary-General for Economic and Social Affairs at UN. Dr. Shamshad was followed by Syed Salim Raza a British national and a former Citi Bank employee who took charge as Governor SBP in 2009. He resigned in 2010 due to the pressure from the IMF to make painful reforms. After the sudden ouster of Salim Raza, Shahid Hafeez Kardar took the charge as Governor State Bank. Mr. Kardar was a member of National Commission for Government Reform under chairmanship of Dr. Ishrat Hussain. Hafeez Kardar resigned from his post in 2011 due to his differences with Finance Ministry. He was under pressure due to excessive government borrowing by PPP Government under the leadership of Asif Zardari. The next one to join the office was Yaseen Anwar, a US citizen with JP Morgan, Bank of America and Merrill Lynch on his resume. Mr. Yaseen successfully covered the financial discrepancies by Zardari’s Government and resigned in 2014 when Nawaz Shareef’s Finance ministry demanded the same favor from him.

Impact of IMF directed restructuring on Pakistan

It is totally unnecessary to know which puppet was sitting at the seat of president, prime minister or finance minister during that period (1988 to 2014) and which puppet replaced the former one. Whats more important to see is that the national assets have been stripped away in the name of privatization and our politicians have made billions out of it in form of commissions received for selling those assets at cheaper prices. Market liberalization is already in place and a selective group has the control on broad money supply. This group is bringing in cash for real estate and currency speculation and sending it out without any restriction whatsoever. These two factors have triggered the third step i.e. market pricing or steep rise in prices of oil, electricity, gas, water and other utilities. Riots (peaceful demonstrations dispersed by bullets, tanks and tear gas) are now quite prominent in the country. Violent mobs protesting against electricity and gas shortage, excessive billing and rising prices of commodities can be seen throughout the country and these protests are becoming a routine. Recent sit-in protests in country’s capital Islamabad by two opposition parties, is linked with the same factors. Flight of Capital due to liberal market policies is in progress and the nation is almost on the verge of getting dragged into free trade by the rules of the World Trade Organisation and the World Bank. Already deprived of our resources which are owned and controlled by outsiders, exporting our resources at cheaper rates in a competitive open market, in order to maintain the currency exchange rate which is dropping fast against US$, we are moving towards a fate similar to Nigeria, a country having US$ 80 billion of annual oil exports, yet unable to do anything for it’s economy struck by extreme poverty and inequality.

Question is, What maybe a conceivable solution to all this? Can this nation avoid this fate of getting stripped away of it’s resources, it’s economic freedom and ending up in the list of failed states?

The answer is quite clear. Yes it can. Take the example of Botswana. That country did it by telling IMF to go packing. We can do that too. All we need is a sincere government capable of steering the nation through this carefully planned and manufactured storm. It’s not simple though. It’s like someone asking his attorney to pack the bags and leave during a court hearing. It can only be done by having everything carefully sorted out before making a decision.

The primary issue, the major factor that has played a dominant role in dragging the country to this stage is lack of political will to resist. Those who can comprehend are being kept away from decision making positions while same faces are being rotated on the seats of power, with no alternate choices for public to chose their representatives. Whether it’s impression management with the help of media campaigns, whether it’s involvement of money to influence and change voter’s perception, may it be illiteracy and lack of education, whether it’s pre-poll rigging, the consequences are to be faced collectively by all.

One of the leaders of the opposition parties protesting in the Capital, has boldly taken a firm stance against incapable, greedy and selfish group of people holding on to the seats of power, using all possible means to persuade a decisive majority of uneducated people and use their votes to gain the favorable results. The leader of PTI, Imran khan has shown a strong commitment to it’s followers and has tried to expose the real picture to general public. The protest is in progress and the outcome is yet unclear. Lets hope that the results go in favor of the real positive change, bringing in capable people at the decision making positions. Those having the ability to identify, analyse and understand the real issues and then act accordingly to resolve them.

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INSIDE WORKINGS OF IMF AND WORLD BANK

IMF: An organization that claims to to promote international economic cooperation, international trade, employment, and exchange rate stability.

World Bank: An international financial institution stating poverty reduction through foreign investment, international trade and facilitating capital investment, as it’s goal

An organization and a financial institution, created under the disguise of helping the poor nations, while in reality, these entities are causing nothing but crisis, failures and suffering, stripping away the national assets and destroying the economies in the name of privatization and liberalization.

The information provided in this article, is based on investigation conducted by Gregory Palast ( a renowned journalist and a top investigator who obtained documents marked, ‘confidential’ and ‘restricted’ from an unidentified World bank employee), and a shocking inside story revealed by Joseph Stiglitz (Winner of Nobel prize in Economics) ex-chief economist of the World Bank.

Joseph Stiglitz was an insider, a whistle blower who was fired from World Bank in 1999. He was not allowed quiet retirement, while US Treasury Secretary Larry Summers demanded a public excommunication for Stiglitz’ having expressed his first mild dissent from globalization World Bank style.

Please remember that Stiglitz cannot simply be dismissed as a conspiracy nutter. The man was inside the game – a member of Bill Clinton’s cabinet, chairman of the President’s council of economic advisers. In April 2001, Greg conducted an exclusive interview of Stiglitz and it was published as an article “The IMF’s Four Steps to Damnation” in The Observer (London) and another version in The Big Issue – that’s the magazine that the homeless flog on platforms in the London Underground.

Big Issue offered equal space to the IMF, whose “deputy chief media officer” wrote:
“… I find it impossible to respond given the depth and breadth of hearsay and misinformation in [Palast’s] report.”
Of course it was difficult for the Deputy Chief to respond. The information (and documents) came from the unhappy lot inside his agency and the World Bank.

The inside workings of the IMF, the World Bank, and the bank’s 51% owner, the US Treasury.

There’s an assistance strategy for every poorer nation, designed, says the World Bank, after careful in-country investigation. But according to insider Stiglitz, the Bank’s ‘investigation’ involves little more than close inspection of five-star hotels. It concludes with a meeting with a begging finance minister, who is handed a ‘restructuring agreement’ pre-drafted for ‘voluntary’ signature.

Each nation’s economy is analysed, then the Bank hands every minister the same four-step programme.

Step One is privatization. Instead of objecting to the sell-offs of state industries, some politicians, using the World Bank’s demands to silence local critics, happily floggs their electricity and water companies, because of the possibility of receiving heavy commissions for shaving a few billion off the sale price. Carefully selected individuals are promoted through impression management with the help of media campaigns and money to influence to change voter’s perception. The same faces keep on rotating, with no alternate choices for public to chose their Representatives. This happened in the case of the biggest privatisation of all, the 1995 Russian sell-off. The US-backed oligarchs stripped Russia’s industrial assets, with the effect that national output was cut nearly in half. ‘The US Treasury view was: “This was great, as we wanted Yeltsin re-elected. We DON’T CARE if it’s a corrupt election.”

Step Two is capital market liberalization. In theory this is a ‘hot money’ cycle that allows investment capital to flow in and out. Cash comes in for speculation in real estate and currency, then flees at the first whiff of trouble. A nation’s reserves can drain in days. A selective group, mainly the shareholders of major corporations and banks, controls the broad money supply, while chosen individuals are appointed for key positions at central banks. These individuals play key role in facilitating cash flow, following the specific guidelines dictated by IMF. For example in case of Indonesia and Brazil, the money simply flew out. And when that happens, to seduce speculators into returning a nation’s own capital funds, the IMF demands these nations raise interest rates to 30%, 50% and 80%. The result is predictable; Higher interest rates demolish property values, savage industrial production and drain national treasuries.

At this point, the IMF drags the gasping nation to Step Three: market-based pricing – a fancy term for raising prices on food, water, oil, electricity and cooking gas. This leads, predictably, to Step-Three-and-a-Half ‘the IMF riot’. The IMF riot is painfully predictable. When a nation is, ‘down and out, [the IMF] squeezes the last drop of blood out of them. They turn up the heat until, finally, the whole cauldron blows up,’ – as when the IMF eliminated food and fuel subsidies for the poor in Indonesia in 1998. Indonesia exploded into riots. There are other examples – the Bolivian riots over water prices and the riots in Ecuador over the rise in cooking gas prices imposed by the World Bank. These riots were totally expected.

According to several documents obtained from inside the World Bank, based on Interim Country Assistance Strategy for Ecuador, the Bank several times suggests – with cold accuracy – that the plans could be expected to spark ‘social unrest’. That’s not surprising. The secret report notes that the plan to make the US dollar Ecuador’s currency has pushed 51% of the population below the poverty line.

The IMF riots (means peaceful demonstrations dispersed by bullets, tanks and tear gas) cause new flights of capital and government bankruptcies This economic arson has its bright side – for foreigners, who can then pick off remaining assets at fire sale prices. A pattern emerges. There are lots of losers but the clear winners seem to be the western banks and US Treasury.

Finally arrives step four – free trade. This is free trade by the rules of the World Trade Organisation and the World Bank, like the Opium Wars in nineteenth century which too was about “opening markets”. As in the nineteenth century, Europeans and Americans today are kicking down barriers to sales in Asia, Latin American and Africa while barricading their own markets against the Third World ‘s agriculture. In the Opium Wars, the West used military blockades. Today, the World Bank can order a financial blockade, which is just as effective and sometimes just as deadly.

The two major concerns about IMF and World Bank plans;

Because the plans are devised in secrecy and driven by an absolutist ideology, never open for discourse or dissent, they ‘undermine democracy’
These plans usually don’t work. For example, under the guiding hand of IMF structural ‘assistance’ Africa’s income dropped by 23%.

Did any nation avoid this fate? Yes, Botswana, by telling IMF to go packing. This information was provided by Joseph Stiglitz who proposes radical land reform: an attack on the 50% crop rents charged by the propertied oligarchies worldwide.

Why didn’t the World Bank and IMF follow his advice?

Because if you challenge [land ownership], that would be a change in the power of the elites. That’s not high on their agenda.

What drove Joseph Stiglitz to put his job on the line was the failure of the banks and US Treasury to change course when confronted with the crises, failures, and suffering perpetrated by their four-step monetarist mambo.

‘It’s a little like the Middle Ages,’ says the economist, ‘When the patient died they would say well, we stopped the bloodletting too soon, he still had a little blood in him.’

Maybe it’s time to remove the bloodsuckers.

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