‘STABILISATION’ is the favourite word of mainstream economists. The IMF loves it, and has recently hinted that Pakistan’s economy has ‘stabilised’ enough for it to dole out another three-year handout close to the $6 billion that our finance czars have been craving.

I cannot understand what has been stabilised, except if a slight dip in inflation from over 30 per cent to something like 20pc is a sign of major progress. The economy is still mired in an endemic balance-of-payments crisis, which sucks up all foreign exchange reserves to regularly pay off the interest on our $135bn external debt burden.

And what is ‘stabilising’ about taking on even more debt from the IMF, Gulf emirs and other ‘friends’ via the fantastical SIFC, and an increasingly hollowed-out CPEC?

None of these basic facts about Pakistan’s political economy will be acknowledged during the upcoming budget announcement, scheduled for June 12. The largely meaningless exercise is being preceded by chaos as ministers engage in an internecine conflict and bureaucrats do their own bidding. They’ll get their act together in time for the budget performance and bandy about some numbers. But it doesn’t take a rocket scientist to see that nothing is about to change.

Blue-collar working and white-collar salaried classes will be burdened with even more regressive taxes, while public spending on anything other than yet more big infrastructure will decrease again. There will be no honest figures circulated about matters that actually affect the mass of the working people — (un)employment, the huge shortage of affordable housing in metropolitan Pakistan, and the multipronged deprivation of the almost 40 million landless people in the rural areas.

What is ‘stabilising’ about taking on even more debt?

Finance Minister Muhammad Aurangzeb said recently that fixing Pakistan’s economy does not require too many policy prescriptions, that established strategic objectives simply need to be executed. Among other things, the honourable minister has been very gung-ho about privatising all public assets, and inviting investors to develop (read: pillage) unexplored mineral and other resources. He need not mention real estate, because that is a sector in which investors and developers already enjoy windfall profits.

Pakistani officialdom and donors are on the same page about these strategic objectives. In fact, they’ve been saying more or less the same thing for decades in the name of ‘stabilisation’.

What’s remarkable is that there is so little critique of these now banal, straitjacket policies. I think it is a damning indictment of many purportedly independent voices that they continue to accede to such tired refrains.

In much of the Western world, the mantra of liberalising trade and finance while unabashedly privatising public assets has given way to talk of state-led industrial policy — the US is even explicitly engaging in protectionism vis-à-vis China. But in Pakistan, the ‘experts’ are unable to think beyond standard neoliberal speak.

It is no wonder that real estate moguls like Malik Riaz become powerful behemoths who cannot be tamed. Such figures are, as recent events show, deeply embroiled in the palace intrigues that constitute our establishment-centric political order. Which brings me to the role of the establishment in our crisis-ridden economy: will any of our ‘experts’ summon the courage to talk about the defence budget or hidden subsidies over the next few days?

We do require new policy proposals, Minister Sahib. Most of all, we need to talk about the redistribution of wealth. Our is a country where a small ruling class — including a khaki bourgeoisie — owns the vast majority of land, industrial and financial capital. This class is content to continue enriching itself, while the IMF and other donors are happy to allow such continuity so long as they get their interest payments back in the name of ‘stabilisation’.

The ruling class and its foreign patrons are also intent on pillaging nature and destroying local ecologies in the name of ‘development’, which equates to future generations of working people being left with an even bigger debt burden and more frequent climate breakdown events to contend with.

If the status quo remains intact, more and more of our rapidly expanding young, working population will seek out livelihoods, housing and other basic needs in what is passed off as the ‘informal’ economy.

If our ministers, donors and other experts had a finger on the pulse of the people, they would spend more time thinking about this than playing with macroeconomic numbers and budgeting chaos; not least because it is also in the ‘informal’ economy that the ruling class makes billions, extorting the working poor in Chaman, Taftan and so many other spaces. But our policy debate would rather live in the pretend world of ‘stabilisation’.

The writer teaches at Quaid-i-Azam University, Islamabad.

Published in Dawn, June 7th, 2024