Pakistan

My topic deals with Pakistan, its relationship with the IMF and World Bank, and
its internal problems that are causing unemployment, poverty, economic crisis
and hunger. I shall be analyzing the situation using the neo-classical theory,
as it is what the economists of the Pakistan government and the IMF are using to
alleviate the economic instability of the country. Situated in the
sub-continent, Pakistan is a low-income country, with great promise for growth.

Unfortunately, it is held back from reaching middle-income status by chronic
problems like a rapidly growing population, sizable government deficits, a heavy
dependence on foreign aid, recurrent governmental instability and large military
expenditures. It is to address these fundamental faults in Pakistan’s economy
that the IMF has initiated the Structural Adjustment Programs (SAPs) in the
country. This is discussed in further detail later in the paper. Like all
developing countries, Pakistan’s population is largely employed in the
agricultural sector, which accounts for about 48 percent of the labor force. In
today’s world the Industrial and Service sectors are the largest growing areas
of a developed county’s economy. Yet Pakistan only employs 39 percent of its
population in Service, and a minute 13 percent in Industry. This is a paltry
figure, compared to the employment statistics of a developed country. Pakistan
is also heavily dependent on a single export crop, cotton. Hence the country’s
fortunes rise and fall with the cotton market. It is no wonder that there are so
many poverty stricken people in Pakistan. When almost half the population is
involved in a very volatile market, a lot of the time, a lot of people will be
burnt by price fluctuations. The country is also subject to the mercy of the
weather. Focussing on a major cash crop means very little diversification. This
translates to mass hunger and hard times for the agricultural sector whenever
the agrarian lands are ravaged by floods, or conversely, by droughts. Even more
importantly, Pakistan’s agricultural sector is marked by large landowners,
controlling most of the production. Hence, only a minimal amount of the profit
from exports goes to the poor people working for the large farmers. It is these
people who constitute a large portion of Pakistan’s population. It is also
these people who are living in abject poverty in the rural regions of the
country, devoid of the right to feed their families. This is a great
illustration of a theme discussed in "World Hunger, Twelve Myths.’ Lappe,

Collins, Rosset and Esparza discuss the commonly believed myths about why hunger
and poverty exist. In it they clarify this very important point: hunger does not
exist due to a shortage of available food, but because of ‘fear’ and
‘powerlessness,’ resulting in the ‘anguish, grief and humiliation’ felt
by the hungry and poverty stricken. Pakistan is a classic example of this
theory. Based on a feudal system, especially in agriculture, Pakistani society
is primarily controlled by feudal overlords, (a.k.a. the politicians or
relatives of politicians), who own or oversee most of the agrarian land and
industrial base. Being above the law, due to their political influence, these
corrupt people can literally get away with murder. Thus, keeping their laborers
subdued and underpaid is no hard task. Anyone who dares to complain is used as
an ‘example’ for potential future unrest. As a result, the people in their
‘elakhas’, (controlled lands), remain destitute in the throes of poverty,
unable to help themselves due to their lack of power and the fear of the ‘thekedars’,
(large landowners). By a lack of power, I refer not to a dearth of physical
prowess but to a scarcity of basic human rights. These are the same rights that
people in developed countries take for granted. The right to vote for whomever
one feels like is missing. Instead a lot of villagers are forced to vote for the
local land owner due to a combination of fear and ignorance; a fear of the
repercussions of a potential loss by the feudal lord and the ignorance of any
means to escape this same overlord’s wrath. Very often there is also no choice
of candidates. There are very few people willing to risk their own and their
families’ safety by running against their subjugators. All this goes against
the very nature of the free market economy that Pakistan is supposed to be
running. While the IMF and World Bank are using Neo Classical theory to address
the nation’s problems in the capital, half the country is still being run
under the feudal system. Till this system is broken, and the immense lower
classes are empowered there