The missing things

LET me recall for my readers what I wrote for this page a couple of months ago. In an article published on July 22, I suggested that Pakistan should not approach the donor community with a begging bowl in hand and ask for help to resolve the economic crisis the country faces at this critical time in its history.

I did not advocate going to the IMF for support since that would compromise the effort to keep the economy on a trajectory of growth.

This is what the country did in 1999 and gave up growth in favour of stabilisation. It was in an effort to pick up growth that the Musharraf administration loosened fiscal and monetary controls over the economy, laying the ground for the current crisis. It is not good for the economy to go through such deceleration and acceleration in growth. It proves unsettling. It would not be prudent to send the economy through such a cycle again.

Instead, I suggested that the country should seek help on the basis of a well thought out programme of economic reform that should focus on bringing about structural changes that have long been postponed. An important part of the structural change would be to make the economy less dependent on external help for sustaining growth. This will take time but the process must begin.

I was of the view that by putting forward a programme of structural reform the country may be able to secure long-term finance, perhaps as much as $40bn to $50bn for a five-year period. Financing should be equally shared between the donor community and Pakistan with the donors requested to front-load the effort with $20bn to $25bn provided in the first couple of years. The Pakistan government should come up with an equal amount at the end of the programme period. However, Pakistani authorities should indicate clearly and persuasively how it would raise this amount of money.

I can’t tell whether my thinking influenced the policymakers in Islamabad. However, I am struck by two developments. One, the finance minister made a statement on Sept 19 that his government had no intention of going to the Fund for support. Instead it would develop its own package of reform. To reinforce that point he announced the withdrawal of a number of consumer subsidies that had weighed heavily on the federal budget.

Two, President Asif Ali Zardari, while on a visit to New York to attend the opening session of the United Nations General Assembly, met with a group of donors he called ‘Friends of Pakistan’. The group promised support but did not come up with a plan as to how it would be delivered. This is where the matter stands today while the country continues to run down the foreign currency reserves it had built up to a respectable level over the last eight years.

From my way of looking at the most effective way of solving the building crisis, this is only half the effort required. The other half needs to be focused on developing a strategy that will give confidence to the community of donors that the new leaders are up to the task of bringing the country out of the stiffest challenge it has faced in its history. Such an effort will need a great deal of thought, full commitment on the part of the leadership and public support. It will also need the development and creation of the institutional infrastructure that is needed to support the development and implementation of a far-reaching programme of economic and social restructuring.

A small step in that direction has been taken by the appointment of a panel by the Planning Commission to come up with a programme of change and reform. The panel is made up of the best economists available to the country. Having been put to the task they should be able to come up with a programme aimed at structural reform. The fact that the Planning Commission has taken this step suggests that the new government is giving the role of strategic thinking to the organisation that was created for this purpose more than half a century ago.

The Commission was overshadowed by the Ministry of Finance during the Musharraf period for the reason that the man who headed the ministry for the entire period did not have the self-confidence to ask for advice. During his tenure economic policymaking became ad hoc, subject to personal whims and pressures exerted by powerful groups of lobbyists.

What should the panel focus on in attempting to develop a programme? It must aim at three goals. It must convince those interested in the economy that the country is serious about reform and development. Two, it must come up with a plan to rescue the country from the economic meltdown it is currently experiencing. And, three, it must put the economy on a trajectory of growth that is not only sustainable but will increase national income at a rate comparable to that of other large Asian economies. A high rate of economic growth is needed to provide employment to those seeking work, bring women into the workforce, and reduce interpersonal and inter-regional income disparities.

It always helps to focus on the positives when thought is being given to the development of a medium-term growth strategy. All the talk about current economic stress has diverted attention away from the positive features of the Pakistan economy. I would like to mention at least three of these plus points.

The first is the agriculture sector, long neglected by public policy in favour of some other parts of the economy. I have held the view for a long time that Pakistan’s policymakers should give a very high priority to agriculture. The sector should lead the rest of the economy, provide jobs in both rural and urban areas, and increase exports. The second advantage resides in the country’s large population that should be educated and trained to become an asset rather than a burden for the economy. The third is Pakistan’s location in the middle of the most rapidly growing parts of the global economy.

Time is running out for the country. The approach to the donor community for help should be accompanied by a well-developed, carefully costed and implementable programme of economic change and reform. We need to dispense with the begging-bowl approach and adopt one that makes a selected number of countries Pakistan’s economic partners rather than providers of charity.

The ‘brainwash’ conspiracy

Insanity in individuals is something rare — but in groups, parties, nations and epochs, it is the rule.— Friedrich Nietzsche

THE word ‘brainwashing’ has been used loosely in our media for quite some time now.

It has been employed to describe how the West is trying to westernise us, to point to an Indian conspiracy to promote ‘Bollywoodisation’ and, more recently, to voice concern about the Talibanisation of our youth.

It is believed that the term was originally coined in 1950 and was later used indiscriminately in the western media to describe how communist regimes coercively persuaded their citizens or systematically instilled certain beliefs and attitudes in the masses. There were also reports during the Korean War of the 1950s of captors brainwashing American prisoners of wars. Apparently 21 such POWs refused to go back to the US after release.

There were also movies like The Manchurian Candidate (artificial thought control) and Conspiracy Theory (mind-control drugs) which depicted the use of such practices by the American secret services. But what exactly is brainwashing? Unfortunately, so much fiction abounds that it is hard to differentiate myth from reality.

Some psychologists refer to the phenomenon as ‘thought reform’ or‘re-education’. The three main principles of re-education are repetition, activity pedagogics, and criticism and self-criticism. To elaborate, this would involve repeating things until they have been stamped on the memory; not giving subjects any time to think on their own by keeping them engaged in various activities at all times; and making the person who is being re-educated feel that he or she is under constant threat of being disliked.

This is a contentious concept and even those who believe brainwashing is possible think it occurs in a less severe form than the media portrays it to be. There is no particular drug which can be used to control or brainwash people. However, there have been reports of some security agencies using certain drugs to get the truth out of captured subjects. Known as truth serums, they could include substances like ethanol, temazepam and various barbiturates but the most common drug alleged to be used is sodium thiopental, an anaesthetic induction agent. These are mainly sedatives that impair the individual’s judgment and higher cognitive functions. There is still a lack of true research evidence of whether such intrusive attempts are successful in obtaining the correct information.

Whereas the outright transformation of a person still remains fictional in nature, the possibility of drastic attitude change is something that is more common in our society. Attitude modification can be explained by certain psychological theories. A behaviour heightens or lessens depending on whether it is rewarded or punished, i.e. reinforced positively or negatively. We, and children in particular, also imitate observed behaviour, especially that of people held in high esteem such as pop stars, actors, parents, religious scholars, etc.

Society plays a very important role in shaping our personalities and behaviour towards others. We fear that some religious fanatic might brainwash our children into an extremist, but we forget that social influences are at play every minute of every day. When we try to justify atrocities such as the Wah or Marriott bombings or when we shout out in joy at dreadful events such as 9/11 or 7/7 in front of our children, we are as responsible for creating future suicide bombers as anyone else.

The role of the media in shaping our society cannot be ignored any longer in Pakistan. There are too many talk shows with loose-tongued presenters who should be held responsible for giving reckless statements. There is a particular talk show whose anchor usually tries to present lies as facts. The media also needs to be more responsible when reporting sensitive news or flashing images of terrorist attacks. By repeatedly exposing our children to such gruesome images we are desensitising them and increasing their threshold for tolerating violence and normalising such actions. Parents too should take more responsibility for decreasing their children’s exposure to violent and aggressive movies, TV shows and video games. It is through this combination of ways that we change other people’s attitudes, beliefs and behaviours, or in other words brainwash them.

Our nation also seems to be suffering from a syndrome called the ‘victim mentality’ where individuals believe that no matter what happens they are the victims. This seems to have reached epidemic proportions and is developing into a mass hysteria. We continue to blame others as a reflex, without introspection and an examination of our own fault lines. This has created a nihilist national psyche which is leading us down the road of self-destruction. Instead of blaming any one person, group or country for this mess, we need to stand up and take collective responsibility.

We as a nation can still make it through these turbulent times but we will need to put our house in order first. We need to understand that two wrongs do not make a right. If someone has mistreated us somewhere, retaliating in similar fashion is not the solution. If the American bombings are wrong then the Taliban bombings are wrong. Nothing and absolutely nothing justifies the killing of innocent civilians. We need to fight this fanatical mindset which is creeping slowly and gradually into our society and leaving it plagued. If we don’t teach our children what true justice is now, then there is no stopping them from acting unjustly when they grow up.

During a recent discussion on an internet forum, a friend mentioned 1984, the George Orwell novel about a totalitarian state. It seems that apart from the many similarities between that fictional state and the Taliban mindset, there was one particular thing which was most similar, the three slogans of Big Brother’s regime: “War is Peace, Freedom is Slavery, Ignorance is Strength”.

The writer is a psychiatrist based in the UK.

dryiabbasi@yahoo.com

Europe’s bleak economic outlook

WHEN the credit crunch exploded onto the world’s financial markets last summer, politicians and bankers in the eurozone found it hard to avoid feeling at least a little smug.

Apart from a couple of high-profile early casualties, most continental financial institutions appeared to have avoided the racy business practices that had endangered their Anglo-Saxon rivals; and while Ireland and Spain were in the grip of a painful housing crash, most other eurozone economies seemed to have got off relatively lightly.

But the longer the crisis has gone on, the more the economic outlook for Europe has darkened. And over the past fortnight, as US Treasury Secretary Hank Paulson has battled to win legislators’ approval for his bank rescue plan, any remaining confidence in the resilience of the European financial sector has drained away.

A clutch of heavy-hitting European economists, including Willem Buiter, a former member of the monetary policy committee, and Richard Baldwin, director of the Centre for Economic Policy Research, sent an open letter to leaders last week, exhorting them to take urgent action to underpin the banking sector. ‘If the turmoil produces credit market paralysis, jobs and businesses will be destroyed on a massive scale,’ they warned, evoking the spectre of the Great Depression of the Thirties.

Already, the Irish economy is technically in recession, having suffered two successive quarters of negative growth, after the rampant property boom that has seen swish apartment blocks rising up on every empty space on the outskirts of Dublin turned to bust. Spain, too, looks set for a sharp downturn as its property bubble bursts.

And while Germany, with its powerful manufacturing sector and prudent consumers, initially looked likely to escape the worst effects of the credit crunch, recent business surveys have shown optimism plummeting in the world’s biggest exporter. A recent poll by the French newspaper Le Figaro showed that 80 per cent of people believe the country is on the brink of a ‘grave economic crisis’.

The feeling that a storm brewed on the other side of the Atlantic has swept in to engulf Europe has sparked public outrage and strengthened the elbow of those politicians who have argued for some time that they would like to see, as Winston Churchill put it, ‘finance less proud and industry more content’.

French President Nicolas Sarkozy, who on Saturday chaired crisis talks in Paris, has made it quite clear where he lays the blame. In a blistering speech to the UN in September, he turned on the deregulated, laissez-faire model which he blames for allowing the credit bubble to run dangerously out of control.

‘A certain idea of globalisation is biting the dust with the end of a financial capitalism which had imposed its rationale on the whole economy and contributed to corrupting it,’ he said. ‘The idea of the all-powerful market which wasn’t to be impeded by rules or political intervention was mad.’ Politicians seeking to make the argument for further deregulation — as Gordon Brown did repeatedly in Brussels during his decade as Chancellor — are likely to get short shrift in the years ahead.

First, though, politicians must deal with the immediate financial crisis and its broader economic fallout. The European Central Bank (ECB) has acted decisively throughout to pump huge sums into the financial markets, helping banks to avoid the short-term liquidity problems that were initially the main focus of concern.

But over recent weeks, investors’ worries have switched to the more threatening issue of whether some banks will face a shortfall of capital and how hard the struggles of the financial sector could hit the rest of the economy.

Jean-Claude Trichet, president of the European Central Bank, left eurozone interest rates on hold at 4.25 per cent at its regular meeting on Thursday; but he stressed that there were ‘exceptionally high levels of uncertainty’ in financial markets and added that the risks for future growth in the 15-member zone were ‘on the down side’.

Jacques Cailloux, European economist at Royal Bank of Scotland, says Trichet’s comments suggest mounting fears at the ECB’s Frankfurt headquarters about the health of the economy. ‘The ECB has signalled today that it is prepared to cut rates any time, alone or in a co-ordinated fashion,’ he says.

There is also rising disquiet about the cost to Europe’s taxpayers of propping up one financial domino after another. So far, analysts say the bail-outs will not put too much strain on public finances.

— The Guardian, London