The decade-long theorizing of the disastrous consequences of rising relative inequality and poverty in the global capitalist system by concerned intellectuals like Thomas Piketty, Joseph Stiglitz, et al hasn’t been able to drive the point home as much as COVID-19 has done in the span of a few months. The poorest nations, classes and races have been hit the hardest by COVID-19, overwhelming health facilities, social security systems and national budgets, pointing to the fatal flaws of accumulation and distribution in the capitalist system that have brought it to the edge of the worst humanitarian disaster and economic recession in 150 years. The guns vs butter debate pooh pooed by neo-liberal apologists can no longer be shrugged away at the altar of cold or hot wars in the interest of “national security”.
The revival and reconstruction of the post-COVID-19 world order will therefore depend very much on the willingness and ability of the leading capitalist powers to address, as Noam Chomsky, the greatest living public intellectual of our times, puts it, the central issue facing humankind: inequality. A measure of how this message has been soaked up in the public imagination can be ascertained by the riots that have rocked leading capitals of the world, encompassing protests against inequalities of race, gender, class, ethnicity, and incomes in the global capitalist system.
In Pakistan we have been imperiled by a blundering, incompetent and hypocritical government backed by grubby, uncaring organs of the state. This is manifest in the lack of an effective and grounded anti-COVID national strategy that is expressing itself, four agonizing months after the first outbreak last February, in the steeply rising curve of infections, fatalities and unemployment amid shortages of life saving medicines and hospital facilities.
Prime Minister Imran Khan has veered dangerously between full lockdowns, semi-lockdowns, hot spot lockdowns and no lockdowns, between announcing budgetary relief to alleviate the hardships of the worst affected and inability or unwillingness to spread it around quickly and efficiently. By his own admission, no more than PKR 200 B has so far been spent on COVID-19 income relief via the Ehsaas/Benazir Income Support Program and Utility Stores and only a paltry sum of PKR 70B has been allocated for the same in the new budget for 2020-21. Indeed, the federal government has palmed off necessary expenditures on health to the provinces which, true to their equally profound limitations, have scarcely bothered to increase them significantly. On top of it, artificial shortages and resultant price hikes in sugar and flour owing to lack of government planning and regulation have eaten into whatever incomes were afforded to the poor and needy by the miserly “relief packages”.
Meanwhile, the poor and unemployed are daily assaulted by the rising burden of defense expenditures on national security. That is reflected in the singular expenditure item in the national budget that has risen in the midst of a plunging economy, a ballooning fiscal deficit and looming balance of payments crisis. All such items put together, this amounts to nearly PKR 2000B, which is 40% of the total budgeted tax revenue measures of PKR 5000B. After accounting for external and internal debt service payments and handouts to provincial governments under the National Finance Commission award, the federal government is obliged to borrow more debt for administration and development. And thus the vicious cycle continues. The national debt in 2008 stood at PKR 6500B; it rose under the PPP regime to PKR 13,000B in 2013, to PKR 24,000B in 2018 under the PMLN government and is now, two years later, about to peak under the PTI government at over PKR 42,000B. Meanwhile, the burden of subsidizing loss making state enterprises has increased to nearly PKR 2000B and the government is still dragging its feet over whether to privatise and cut losses or retain the white elephants that are sucking the nation dry.
Debt, by itself, isn’t a bad thing. Indeed, it is the very engine that spurs economic growth in capitalism. But for that to happen it must be used for productive investment purposes to achieve high GDP growths. In Pakistan, unfortunately, the rising debt has mainly been consumed by unproductive priorities, wasteful projects and corruption. Worse, the prospects ahead for economic growth are negative or zero, which means that we will incur even greater indebtedness, poverty and inequality just to keep our head above water.
The lesson of COVID-19 is ringing loud and clear in Pakistan. The ruling elites of state and society must relinquish their stranglehold over civil society and give it a chance to breathe, grow and replenish the nation. Priorities in borrowing, spending and budget making must radically change. It is criminal for state and government functionaries to blame the people for not following anti-COVID-19 SOPs when they are ill-educated, unemployed, depressed and alienated from their rulers. The alternative is to prepare, as Noam Chomsky reminds us, for the approaching storm of the peasants with pitchforks.
The revival and reconstruction of the post-COVID-19 world order will therefore depend very much on the willingness and ability of the leading capitalist powers to address, as Noam Chomsky, the greatest living public intellectual of our times, puts it, the central issue facing humankind: inequality. A measure of how this message has been soaked up in the public imagination can be ascertained by the riots that have rocked leading capitals of the world, encompassing protests against inequalities of race, gender, class, ethnicity, and incomes in the global capitalist system.
In Pakistan we have been imperiled by a blundering, incompetent and hypocritical government backed by grubby, uncaring organs of the state. This is manifest in the lack of an effective and grounded anti-COVID national strategy that is expressing itself, four agonizing months after the first outbreak last February, in the steeply rising curve of infections, fatalities and unemployment amid shortages of life saving medicines and hospital facilities.
Prime Minister Imran Khan has veered dangerously between full lockdowns, semi-lockdowns, hot spot lockdowns and no lockdowns, between announcing budgetary relief to alleviate the hardships of the worst affected and inability or unwillingness to spread it around quickly and efficiently. By his own admission, no more than PKR 200 B has so far been spent on COVID-19 income relief via the Ehsaas/Benazir Income Support Program and Utility Stores and only a paltry sum of PKR 70B has been allocated for the same in the new budget for 2020-21. Indeed, the federal government has palmed off necessary expenditures on health to the provinces which, true to their equally profound limitations, have scarcely bothered to increase them significantly. On top of it, artificial shortages and resultant price hikes in sugar and flour owing to lack of government planning and regulation have eaten into whatever incomes were afforded to the poor and needy by the miserly “relief packages”.
Meanwhile, the poor and unemployed are daily assaulted by the rising burden of defense expenditures on national security. That is reflected in the singular expenditure item in the national budget that has risen in the midst of a plunging economy, a ballooning fiscal deficit and looming balance of payments crisis. All such items put together, this amounts to nearly PKR 2000B, which is 40% of the total budgeted tax revenue measures of PKR 5000B. After accounting for external and internal debt service payments and handouts to provincial governments under the National Finance Commission award, the federal government is obliged to borrow more debt for administration and development. And thus the vicious cycle continues. The national debt in 2008 stood at PKR 6500B; it rose under the PPP regime to PKR 13,000B in 2013, to PKR 24,000B in 2018 under the PMLN government and is now, two years later, about to peak under the PTI government at over PKR 42,000B. Meanwhile, the burden of subsidizing loss making state enterprises has increased to nearly PKR 2000B and the government is still dragging its feet over whether to privatise and cut losses or retain the white elephants that are sucking the nation dry.
Debt, by itself, isn’t a bad thing. Indeed, it is the very engine that spurs economic growth in capitalism. But for that to happen it must be used for productive investment purposes to achieve high GDP growths. In Pakistan, unfortunately, the rising debt has mainly been consumed by unproductive priorities, wasteful projects and corruption. Worse, the prospects ahead for economic growth are negative or zero, which means that we will incur even greater indebtedness, poverty and inequality just to keep our head above water.
The lesson of COVID-19 is ringing loud and clear in Pakistan. The ruling elites of state and society must relinquish their stranglehold over civil society and give it a chance to breathe, grow and replenish the nation. Priorities in borrowing, spending and budget making must radically change. It is criminal for state and government functionaries to blame the people for not following anti-COVID-19 SOPs when they are ill-educated, unemployed, depressed and alienated from their rulers. The alternative is to prepare, as Noam Chomsky reminds us, for the approaching storm of the peasants with pitchforks.