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The Political Economy of The FATF & IMF in Pakistan During 2019 (Part 1)
The Political Economy of The FATF & IMF in Pakistan During 2019 (Part 1)
Discussion Paper
Abstract: This paper presents a series of perspectives on the political economy of
the FATF and IMF in Pakistan for the calendar year 2019 (Vol. 1). It raises concerns
about the excess politicization of the financial task force and how this impedes the
fairness and efficiency of the international financial supervisory system. This then
draws attention to the endogenous limitations of developing countries in coping with
exogenous impositions of a political-economic nature.
This paper was prepared at the Centre for Aerospace and Security Studies (CASS) during
the calendar year 2019.
1
Centre for Aerospace and Security Studies (CASS)
2
Critical Blockchain Research Initiative (CBRI)
References 24
In its annual headlining report Fiscal Monitor, the IMF has projected that Pakistan’s
public debt-to-GDP ratio might exceed 84% of gross domestic product (GDP) by 2023,
which is 12 percentage points higher than the 72% level left by the previous PML-N
government. It projects a 77% public debt-to-GDP ratio at the end of the current fiscal
year and 79.1% by the following year. With respect to the fiscal rules that Pakistan has
set for itself under the Fiscal Responsibility and Debt Limitation Act, Pakistan’s debt
should not be more than 60% of GDP.
This has turned into a thorny issue for political wrangling in both parliamentary
debates and TV talk shows, but this tends to detract from a longer-term perspective
on Pakistan’s profile of indebtedness. I believe it helps to take a step back and consider
the debt problem of emerging markets more broadly, before looking at our debt
repayment schedule in a more dispassionate manner, so as not to confound the
long-term nature of indebtedness with the short-termism of government tenure.
Looking at the schedule of Pakistan’s debt, one should observe that a significant
portion of the debt that is maturing now was incurred as far back as the Musharraf
years (early 2000s). Pointing the finger at the current government belies the fact that
borrowings from past liabilities are the chickens that now come to roost, and that
To put it another way, the problem is more broadly one of different time horizons
(maturities) of political institutions versus government liabilities. Sovereign
borrowings occur on 10-year or 20-year horizons, while the governments over the
past 40 years would have considered themselves lucky to even approach the end of a
full five-year term. Time inconsistency leads to problems of expediency in shoring up
the short-term balance sheet rather than in biting the bitter pill of long-term
structural reform.
As such, governments (around the world, not just in Pakistan) tend to prefer “kicking
the can” down the road, until there are no more cans left to kick. The ballooning of
emerging market debts is in part a reflection of the phenomenon identified above.
It is not the specific number that matters, but rather the subjacent policy credibility
that has remained wanting regardless of the government in power. That credibility
deficit is in fact the greatest deficit Pakistan faces – and one that is much more searing
than the current account deficit that has perennially characterized our economic
situation.
This is in part a structural problem of producing less of what the world needs than
purchasing more of what the world offers, but it is also attributable to the institutional
tensions that excess politicization in the past has wrought upon the manner in which
business is conducted in the country.
As an example, various governments have put tacit if not overt pressure on the
independence of central banks, and this has left a bitter legacy on the nation’s
monetary and fiscal discipline. Similarly, the odious nature of at least a portion of
borrowings incurred in the name of the country has meant that little of what has been
taken has been channeled towards the appropriate objectives.
The key word in both debt management and governance, in my judgment, is maturity.
Maturity in governance requires a long-term approach that balances the expediencies
of the present with the challenges of the future. Maturity in debt management means
that short-term financing needs must consider the time-inconsistency of taking from
the savings of future generations to fuel consumption in the present. In either case,
what the country requires is a longer-term orientation that emphasizes above all
greater “maturity.”
The Financial Action Task Force (FATF) is an inter-ministerial body that aims to
curtail international money laundering and terrorist financing by setting standards for
national financial architectures. It is a voluntary body comprising 40-odd countries,
with affiliate regional groups including the Asia-Pacific Group (APG), which Pakistan
joined as a Senior Associate (but not full) Member.
Created in 1989, the FATF was a prescient idea in its recognition that the illegal flow of
money around the world would create havoc in an increasingly interconnected world,
particularly as the Cold War was ending and former Warsaw Pact countries would face
challenges (organized crime, money laundering, black money) of integration into the
global financial system. Over the years, the scope of the FATF has grown, from
anti-money laundering to terrorist financing, and from 30 standards two decades ago
to “40+9” today.
Given the lapse of thirty years, we can fast forward to today and examine its current
initiatives. Above all, the FATF poses a threat to move Pakistan, already on its ‘grey list’
of countries, towards full blacklisting. This would have significant impacts for the
Pakistani economy in terms of on the banking system, on the flow of remittances, on
philanthropic organizations, on individual accounts, on the flow of foreign investment,
and on our negotiations with international organizations such as the IMF.
As such, the FATF has a loaded gun pointed at the entire Pakistani financial
architecture under two violent premises: first, that economic sanctions against an
entire country can compel it to fix a complex and amorphous financial architecture
are short quarterly deadlines; second, that the entire Pakistani economy must assume
collective guilt for a triflingly small group of people or organizations that might pose “a
significant threat to the global financial system.”
This provides us with the right occasion to ask whether the FATF really is doing the
job it was intended to do. Is it really curtailing “significant threat to the global financial
system”? Has money laundering or terrorist financing gone down in the past 30 years
that the FATF has been around? Has the amount of black money slushing around the
world been controlled or reduced?
The answer is that, by any indication, the amount of black money floating around the
global shadow economy has exploded, both in absolute terms, as well as relative to the
total global money, in the past 30 years. Economists are reticent to provide exact
estimates, given the inherently shadowy nature of black money, but the scale of the
problem has expanded in to the trillions of dollars. The Panama Papers, the Paradise
Papers, and litany of other exposés have begun to paint a picture of a world that the
FATF, in misdirecting its violence towards Pakistan, seems largely oblivious to.
But whereas the FATF has failed on that account, the real question is why the FATF has
fallen so short of its stipulated objectives. Evidently, the FATF has been looking in all
the wrong places. Instead of focusing its fire on countries such as Iran and Myanmar,
if the FATF truly cared about international money laundering and dark money, it
would most certainly be waging a war against the Cayman Islands, the Bahamas,
Vanuatu, Guernsey, Gibraltar, the British Virgin Islands, and Delaware. Indeed, the
greatest centers of non-transparent financial gimmickry and suspect acts are not in
Third World nations. They are in fact right at the heart of Western capitalism: in
locations such as London, New York, Delaware, and Frankfurt.
This can be illustrated in countless ways, but a very recent example of Deutsche Bank,
the largest financial institution in the largest European country, is particularly
illuminating. It has been recently revealed that between 2011 and 2014, Deutsche Bank
had laundered more than 175 million euros (more than 28 billion rupees at the current
exchange rate) for Russian organized crime syndicates. Internally labelled the
“Russian Laundromat” scheme, the prestigious German bank was engaged in precisely
the sorts of activities which the clueless FATF, based not very far away in Paris, was
meant to stop. But instead of the extremely politicized FATF, it was in fact a proactive
consortium of journalists – civil society at its best – that forced these revelations into
the public and compelled Deutsche Bank to admit to its fraudulent money laundering
practices.
So while dirty money is flowing through the swankiest Western capitals, countries
such as Pakistan are being forced into impossible deadlines to transform their
financial systems at the risk of externally-imposed sanctions. A parallel can be drawn
between the FATF and the Western “human rights lobby” which shrills down to
developing countries how they should behave while turning a blind eye to serious
infractions in their own territories, or how their own industries (e.g. Western weapons
and arms industries) boil the pot of turmoil in the first place. The FATF similarly asks
countries such as Pakistan to “do more” without accepting due culpability of the OECD
countries which not only tolerate but in fact thrive on an international shadow
banking system.
In that context, it has been a cause of alarm in Pakistan, and a disgrace for the FATF,
that India has vied for co-chairmanship of the Asia-Pacific Group (APG), which is the
regional mirror body of the FATF. The underlying concern is that India’s subversion of
the FATF will compromise the integrity and impartiality of the body by distorting its
assessments. This would effectively turn the APG and FATF it into instruments of
economic violence in Pakistan, since blacklisting could have worrisome effects on
Pakistan’s banking system, on its flow of remittances, on its philanthropic
organizations, on the flow of foreign investment, and on the country’s negotiations
with international organizations such as the IMF.
There are two important arguments that must be advanced in rejecting India’s
legitimacy as co-chair of the APG. The first argument is about the massive conflict of
interest that it would create in international financial oversight if the venal Indian fox
watches the henhouse; while the second argument regards India’s own horrific record
of black money. India is by any measure one of the worst possible candidates for the
job, both in terms of the scale of India’s black money problem, as well as the failures of
the solutions it has tried (especially demonetization).
On the first point, it is not lost on Pakistani observers that putting India as
co-chairman of the APG would create a massive conflict of interest in the task force,
given the animosity that the Indian government has fomented through a litany of
aggression. At a time when India is instigating a standoff with Pakistan, is the world
really to think that India should co-chair financial oversight of Pakistan? India’s
chairmanship should be seen in light of a hybrid war, in usurping control of a financial
standard-setter towards a mercenary agenda.
A recent occurrence with the Standing Committee on the Interior (SSC-I) puts the
already dubious partisanship of the FATF in perspective. On March 12th 2019, the SSC-I
panel slammed the FATF for discriminating against Pakistan and according
preferential treatment to India by ignoring substantial evidence about New Delhi’s
involvement in terror financing. The SSC-I, chaired by Senator Rehman Malik,
regretted that India “continued enjoying an undeclared immunity as no action was
being taken against it despite all evidence of terror financing.”
Senator Malik explained that he had written a letter to FATF President Marshall
Billingslea on Feb 14th, seeking action against Indian Prime Minister Narendra Modi for
protecting international fugitives involved in the biggest-ever credit fraud and money
laundering. He said that he had sent the letter with all the evidence proving that Prime
Minister Modi was involved in money laundering and terror financing as he was
supporting the RSS (Rashtriya Swayamsevak Sangh) — “the biggest terrorist
organization.”
However, the weak response of Mr. Billingslea was that the FATF “was not an
investigative or prosecutorial body,” a point which Senator Malik contested, since if
the FATF could not open a case against PM Modi for terror financing and money
laundering, “then how was taking up a case against Pakistan and putting it on the ‘grey
list’”?
Senator Malik disclosed that he had written another letter to the FATF president,
explaining how it was legal to take stern action against PM Modi. In his letter to the
FATF president, Senator Malik reminded him that a formal inquiry against Pakistan
was initiated based on a complaint from the United States alleging Pakistan’s
involvement in terror funding and money laundering, and consequently the FATF
placed Pakistan on the ‘grey list’. “Therefore, the stance taken by the FATF vis-à-vis
my complaint against Indian Prime Minister Narendra Modi was not based on facts
and practice of the FATF,” the Senator appropriately noted. The Pakistani public must
recognize the double-standards in the FATF’s ploy.
On the second line of argument, the fact that India should be using the FATF is
incredible given its own horrific record of dark money and shadowy transactions.
According to the India Association of Chartered Certified Accountants (ACCA), India’s
shadow economy amounts to 17.22% of GDP, which would equate to $516 billion
dollars.[1] In other words, India’s shadow economy alone is larger than the entire
economy of the UAE, Malaysia, or Denmark. Are we really to think that such a country
is capable of overseeing black money elsewhere?
Given that India has massive black money problem, we might consider the solutions
they have tried to implement. In that regard, the BJP government’s shoddy and
sweeping attempts to supposedly counter the black economy have included a
demonetization campaign, which a consensus of economists and the Reserve Bank of
India alike have deemed an abject failure, not just in hurting economic growth and
decimating more than 1.5 million jobs, but also in growing the number of illicit
transactions (particularly counterfeit currency to replace the demonetization) by an
alarming 480%.[2] With so much dark money slushing around, including for illicit
activities and terrorist initiatives, the idea of India being a co-chair is absurd.
Both of these lines of argument, of hijacking the APG for political interests, or of
failing to curb their own black economy, are necessary to understand the dilemma
that Pakistan’s financial architecture faces. Pakistan must do its utmost to prevent
Indian subversion of the APG and the FATF, because given the consequences that
blacklisting entails, it may be very unpleasant to sit with the venal Indian fox guarding
our financial henhouse.
[1] Indian Express (2017). “Indian ‘shadow economy’ to shrink to 13.6 per cent of GDP by
2025: ACCA”
https://indianexpress.com/article/business/economy/indian-shadow-economy-to-shr
ink-to-13-6-per-cent-of-gdp-by-2025-acca-4731993/
[2] The Economic Times (2018). “Demonetisation led to highest fake currency,
The austerity mindset with which the budgetary measures have been announced looks
very good at first glance. After all, in a society where 99% of the population does not
contribute to the fiscal base, how can the economy run except through unsustainable
kashkol borrowing? This is the problem that, the IMF has correctly surmised, there is
no room for in the 21st century. The Pakistani masses, as well as the elites now being
brought to account by NAB, must get their collective act together. If they cannot do so
voluntarily, then a tough fiscal regime must be imposed from-on-high by the IMF.
But the dismal context in which the austerity-budget was presented leaves much for
the public to worry, particularly for those 20 lakh who have done their fiscal duty to
the nation. Above all, it is useful to take a step back and ask: What is austerity? And is
austerity really the way to fix an economy?
What the IMF is doing to Pakistan, the EU has already done to Greece, and from that
episode many academics and policy-makers have drawn important lessons which are
applicable to Pakistan today. The overriding consensus in the academic (if not in the
policy) circles now is that austerity for a macroeconomy is fundamentally illogical.
Belt-tightening works for households and for individuals, but for an economy overall,
belt-tightening means that I will get fewer haircuts, and so the barber has less to pay
the baker, who has less to pay the mechanic, and so forth. Put another way, the ripples
of economic stagnation emanate through the macroeconomy when all agents hold
back their consumption and slow the velocity of money circulation.
The devastation in Greece illustrates this vividly. From a society whose members three
decades ago nearly all owned their own homes, had virtually no debt, and led
autonomous economic lives, two problems arose. First, Greece’s elite began to
binge-borrow to fund lavish lifestyles at the exchequer’s expense (like ours); and
second, only 4 percent of the public paid any taxes (that is sadly still much better than
in Pakistan). So a similar situation to what Pakistan has begun to face in fact emerged
earlier in Greece, and culminated in an economic collapse by 2010-2011, after which
the EU imposed austerity measures across society so that workers, pensioners, civil
servants, private businesses, and civil society overall fell into a hellish morass from
which they have yet to recover.
Today, 25 percent of the working population of Greece does not have a job, while
household incomes have shrunk by nearly one-third, and one in every three
businesses has gone bankrupt. Horrifyingly for an OECD developed country, about 14
percent of Greece's children remain malnourished, and one-quarter of the nation’s
children live in poverty. Starvation has been a frighteningly regular occurrence (9
percent of children lack a daily, protein-based meal), with people rummaging through
the rubbish bins of local supermarkets looking for scraps to bring home to the family.
Teachers, in fact, have reported cases in which students have turned up at school
eating nothing more than rice and stale rusks for months at a time. The teachers
themselves haven’t received their proper (full) salaries in years. Pensions have been
cut 13 times since 2009, and this has left many families with dramatically less income,
deprived of even the bare essentials in many cases.
Because of this, the most vibrant Nazi-party in Europe is in fact in Greece; a violent
political movement known as the Golden Dawn. For the more than 50,000 Pakistanis,
not to mention other visible minorities living in Greece, the Golden Dawn has been a
vicious nightmare with regular attacks against migrants, a convenient scapegoat for
the desperate Greeks unable to confront the actual perpetrators of their tyranny who
reside in Brussels and Frankfurt.
In the case of the IMF, the most seething irony is that its own reports since 2016 have
come to frame austerity as the wrong approach to economic reforms, and the IMF
itself now believes that it massively understated the damage that spending cuts inflict
on a weak economy. As an IMF report by economists Ostry, Loungani and Furceri
admits in economist-speak, “episodes of fiscal consolidation have been followed, on
average, by drops rather than by expansions in output. On average, a consolidation of
1% of GDP increases the long-term unemployment rate by 0.6 percentage points.”
Countries that have refused externally-imposed austerity have in fact recovered faster
after crises. Portugal and Ireland are clear examples of this, and their economies
bounced back by deliberately refusing to tow the austerity line, in stark contrast to
Greece. The United States itself has used massive counter-cyclical stimuli in times of
crisis: after 9/11, Bush encouraged Americans to raise consumer spending to help civic
morale; and Obama authorized nearly $1 trillion dollars through the Troubled Asset
Relief Program (TARP) to grapple with the Global Financial Crisis of 2008. During that
period, Australia gave AUD$1500 to each household to spend immediately, and other
countries such as Japan also adopted measures that would be considered the opposite
of any austerity diktat.
However, it has been forcefully argued that Pakistan had no choice but to go to the
IMF. Assuming that is correct, and recognizing the limitations posed by a public of 19+
crores that refuses to shoulder its fiscal responsibility to the country, then Pakistan
must adeptly manage the impositions of austerity: just getting enough through for the
IMF board to sign-off on the bailout, and just going easy enough on the people that the
recent price hikes, tax jumps, and currency devaluation do not further compress at
least the 20 lakh that do contribute fiscally to society. This narrow band of society is
facing the disproportionate brunt of taxation measures, which is a double-punishment
and an incentive that runs counter to the government’s asset-amnesty schemes, since
it nudges non-filers to remain outside the fiscal net for fear of ever-greater squeezes.
The strong-arming by the IMF ultimately seeks to end the black-economy lifestyle that
an informal and illiterate mass has settled into, and for that they deserve credit. But
the actual notion of austerity must be more critically examined, as it will lay a
disproportionate burden on those who are not culpable (tax filers), while lowering the
general growth trajectory of the country. In sum, given that : (1) the IMF itself does not
buy into this politicized argument of austerity, (2) the IMF constitutes one of the main
pillars for economic violence against developing countries, and (3) economies that
have refused to allow austerity imposition have done much better; we should be wary
of sticking to an austerity-budgeting culture for too long.
Watchdog or Lapdog?
Usman W. Chohan
The FATF and its mirror-body APG have begun to tighten the noose around Pakistan,
and their most recently revealed report card (The Mutual Evaluation Report, MER),
presents a mixed opinion about the steps Pakistan has taken since its grey-listing last
year. In its own words, “competent authorities have varying levels of understanding of
the country’s money-laundering and terror-financing risks, and the private sector has
a mixed understanding of risks.”
On one hand, it finds that important steps have been taken, and many
recommendations have at least been partially fulfilled. But on the other hand, it notes
that much still needs to be done, and a major impediment is that key institutions do
not comprehend either the gravity of the situation or nuances around the key
concepts. In other words, according to the APG, many of Pakistan’s institutions seem
unfit or inept, given the magnitude of challenge.
Much of the mutual evaluation report is based on rich datasets displaying how
economic activity is undertaken in the country. If anything, the 228-page MER serves
as a useful guide to gleaning just how complex economic life is in the country, and how
daunting the task of regularizing it has become.
That said, much recent exploration, including my own [1], highlights the glaring
shortcomings of the FATF as a self-styled watchdog for international economies. One
of the most pertinent arguments (among several others) against the FATF’s practices is
just how much they have deviated from the body’s original goals at its inception in
1989. A recent example, known informally as the “Russian Laundromat,” illustrates this
perfectly.
To start, it should be noted that the FATF was originally conceived in anticipation of a
massive outflow of wealth from the dissolution of the USSR. The former Soviet Union
held all material assets with the state as a public trust, thereby abolishing private
ownership of the means of production.
Following the chaos of dissolution, the fear both within and beyond the former USSR’s
borders was that self-styled Mafioso oligarchs would use physical violence and
disarray to siphon funds formerly held in the public trust to personal accounts in
offshore jurisdictions.
The purpose of the FATF was largely confined to monitoring the flows of funds from
that side of the fizzling Iron Curtain during a period of upheaval. It was only after 9/11
that the guns became squarely-pointed at Muslim countries, since it was ever so
convenient for the powers-that-be to conflate the term “Muslim” with “terrorist”
exclusively; and Muslims worldwide have been living with the consequences ever
since.
As a result, not only have Mafiosos managed to move considerable amounts of wealth
out of Russia and her sister republics, but also that Western banks with their
finely-suited and (at best) amoral “financial experts” have acted as henchmen and
abettors to that process.
One of the most notorious incidents is the “Russian Laundromat” scheme, which
involved the mass-scale laundering of money from Russia, Moldova, and several other
countries, to the tune of between $20-80 billion dollars. It is in fact still not clear just
how much dirty money was moved out through the Laundromat scheme, but the
numbers dwarf anything remotely possible in the smaller and largely de-dollarized
economy such as Pakistan’s.
What is clear, however, is that the swanky Western banks had their corrupt hands
deeply sullied by deliberate involvement in this syndicate. The most prestigious bank
within the most prestigious financial center on the European mainland, the Deutsche
Bank for Frankfurt, Germany had its pockets 175 million Euros deep in the Laundromat
scheme. This is in addition to the Danske Bank scandal in which Deutsche Bank was
again implicated, which has worth more than 160 billion Euros, mostly of Russian
provenance.
Deutsche was not alone; Citibank, HSBC, Danske, and countless other banks from
ostensibly responsible financial jurisdictions were awash with dirty money which they
appear to have been more than happy to deal in over a prolonged harvest of black
money. And where was the FATF in all of this? Nowhere in sight.
Indeed it was not the FATF which uncovered any of these issues, since it was too busy
trying to financially disembowel smaller economies such as Pakistan’s. Rather, it was
civil society organizations, such as the journalists at the Organized Crime and
Corruption Reporting Project (OCCRP), which exposed the magnitude of the Russian
Laundomat money-laundering scheme.
The FATF totally missed the mark on this incident, a fact that is disappointing given
that this was its singular mission before its politicization by countries such as the US
and India began. In the FATF’s parlance, a “mutual evaluation” of the FATF would be
totally dismal for failing to stem rampant money-laundering and terrorist-financing
from the specific jurisdictions it was designed to monitor.
It is worth noting that the APG’s most recent MER of Pakistan goes as far as to say, on
its very first page, that the APG and the FATF are “non-political bodies.” This is a
notion they have begun to stress in recent publications, given that a more critical view
of these watchdogs is now becoming not just more evident, but also necessary.
The FATF and its mirror-bodies continue to go around bashing smaller economies
willy-nilly, while missing out on the elephant in the room which is capitalism’s bane of
tax havens stashing ill-gotten wealth from the developing world, not least from former
USSR republics, much to the glee in the crooked smiles of so-called “responsible”
Western jurisdictions.
It is high time countries such as Pakistan “mutually evaluate” the FATF itself, and
emphasize that it is in fact the FATF that needs to “do more.” This, naturally, will
involve the FATF acting as more of a watchdog and less of a lapdog.
Here is what the reporters are saying: the people have come on to the streets,
expressing their rage through marching, chanting, rioting, confronting the police,
demanding an end to the current government’s corruption, and above all, and end to
the austerity policies imposed by the IMF. The reporters say that “the city” has become
a ground-zero for public agitation, and unanimous cries for an end to the tyranny of
the IMF.
Which city are the reporters referring to: Santiago, Chile? Beirut, Lebanon? Quito,
Ecuador? Port-au-Prince, Haiti? Algiers, Algeria? Baghdad, Iraq? Tegucigalpa,
Honduras?
A tide of discontent has now swept cities across the developing world, with [mostly
young] people taking to the streets and mobilizing against the harsh realities of
subjugation through economic instruments and policies that are either directly
imposed or abetted by IMF.
The wretched of the earth, as the philosopher Fanon called them, today articulate their
contempt for brutal austerity policies though civil disobedience. Security forces are
struggling to dismount the public pressure, and many leaders are finding their careers
on the line.
We are seeing the results of the public agitation in many ways. In Ecuador, the
government has rescinded the austerity bill that the government had promulgated
under the IMF’s auspices. In Chile, the President has fired his entire cabinet and
promised all sorts of changes, but the million people on Santiago’s street want his
head and nothing less. In Lebanon, every major street is blockaded and Beirut is in
gridlock until the President and PM both resign.
The triggers, as usual, were trivial measures that were part of an austerity program. A
small metro ticket hike in Chile, a tobacco and “Whatsapp tax” proposal in Lebanon,
and some of other tax hike or public spending cut elsewhere. Yet the conflagrations
grow wider and are being observed in great similitude around the world.
It is in fact a “humanitarian crisis” that the IMF wreaks upon the wretched of the
earth, and that term is not being used lightly. The current head of the United Nations,
Antonio Guterres, actually expressed his vocal opposition to the IMF’s policies at the
fund’s most recent meeting, reproaching the IMF for the miseries that its policies have
wrought on the poor on the world.
Guteres urged world leaders “to listen to the real problems of real people,” and later
told reporters that “disquiet in peoples’ lives” has sparked demonstrations around the
world from the Middle East to Europe, Africa, Asia, Latin America and the Caribbean.
In other words, the man who usually speaks out for war crimes and breaches of the
Geneva Convention articulated his concern about what the IMF does. In a sense, that is
a very accurate message to send to the IMF. Their policies engender “structural
violence” which tyrannizes the disenfranchised without firing a shot.
“Even where people are not protesting, they are hurting and want to be heard,” he told
the IMF. This is pertinent for us to observe in the international uprising, because the
very same policies have been imposed on Pakistan. The IMF swooped in early this year
to throw down the gauntlet, for a paltry sum of $6 billion dollars, in exchange for
heavy structural changes that are very unlikely to be addressed in so short a span.
There is indeed a concentration of protesting elements in the capital at this time, but a
careful negotiation process and active engagement has meant that, for the moment,
Pakistan looks nothing like other countries that otherwise seem economically much
better off but are caught up in whirlwinds of agitation.
In the meantime, inflation is rising, job losses mounting, and a growing number of
people (albeit proportionately still small, thankfully) are reporting an overall
dissatisfaction with life. This is the disquiet that Guterres has warned the IMF of as a
generalizable experience of the third world.
Indeed, there is too large a disquiet pervades people’s lives, and the sorts of spending
cuts and austerity drives the IMF exacts from poor countries, often for paltry sum of
lending in return, exemplifies the problems that not just our country, but the world
must contend with.
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