Neo-liberalism and dictatorship

Sixty years after the emergence of aid as a strategic tool, its geo-political importance is undiminished. While there has been a renewal of more overt forms of capital accumulation in the post-9/11 dispensation, aid continues to stand out as the primary means of asserting imperialist control over entire regions of the world. Fully 50 years on from the historic Bandung Conference, some third world leaders may still be waxing lyrical about the unity of the oppressed peoples of the world but many of these leaders, major beneficiaries of strategic aid, are actually reinforcing neo-colonial dependency.

General Pervez Musharraf is one such example. While the general was in Bandung in April attending the African-Asian Unity Conference, a meeting of the Pakistan Development Forum (PDF) was being held in Islamabad. The PDF is an annual ritual where bilateral and multilateral donors meet with the country's economic managers to 'consult' on economic policy and to outline the parameters of future cooperation. For two years after the Musharraf coup in October 1999, there was no PDF or any other such gathering, a gentle hint that the general was in disfavour with the international financial elite. The situation changed after 9/11.

In April 2002, the PDF was held in Paris. Amidst the gala surroundings, the then finance minister (now prime minister) Shaukat Aziz committed to the donors that "democracy will not impede our economic reform process". The 'reform' process Aziz referred to was a typically orthodox set of neo-liberal policies based on further reducing the state's already meagre welfare responsibilities, selling off state assets, unbridled liberalisation of trade and financial markets, and initiating obsolete mega development projects. In Paris, the donors in turn welcomed Gen Musharraf's expected assumption of the presidency in the interest of 'continuity of reforms'. Only a few weeks after this consensus, Gen Musharraf 'managed' a successful presidential referendum for himself, securing 99 percent of all votes cast.

IFI mandate

Fast forward to the October 2002 general elections, which gave a token civilian face to the Musharraf regime, thereby addressing nominal demands of the international community that the general be seen to conform to some democratic norms. Although an ostensibly elected government was to come into power in October, the Asian Development Bank (ADB) and World Bank both had already signed multi-year, multi-billion dollar assistance packages with the government months earlier in June. While concerns have been expressed about the limited sovereignty of developing states vis-a-vis international financial institutions (IFI), seldom is the interference as blatant as in the case of Pakistan of late. The pliant civilian government we have today is as much a product of the IFI mandate as that of the people of Pakistan.

The 2003 and 2004 PDF meets reinforced the neo-liberal 'reform process' and further committed large aid injections to the government. Throughout this time, the donors have congratulated the regime for its numerous 'good governance' practices and for achieving an unprecedented level of macroeconomic stability. But they have been silent on the dismal and worsening situation of working-class Pakistanis. Unemployment continues to soar, and nearly 45 percent citizens are living under the poverty line.

Meanwhile the 'good governance' brigade conveniently overlooks the single most important governance problem in Pakistan — an army engaged in politics.

The donor community continues to laud the general's 'devolution of power' initiative. The 2005 PDF, held in April, pledged to wholeheartedly continue support for the local governments that were instituted in 2001. In fact, donor portfolios have been totally overhauled in recent years to accommodate huge funding packages for this not-so-unique 'decentralisaton' exercise. Gen Musharraf, like his predecessors Ayub Khan and Zia-ul Haq, has utilised a co-opted coterie of elected local councilors to create a mirage of legitimacy for military rule. There is little doubt that government agencies have perfected the art of political engineering, which was also used to 'good' effect in the second round of local government elections in August this year.

Economic sovereignty

There was a time when imperialist expansion could be disguised as a heroic struggle against communism. The discourse of anti-terrorism that came to replace its outdated anti-communist predecessor has already lost a great deal of credibility in the eyes of people across the world. So the neo-liberal agenda is propagated through the institutions of global governance that seek to introduce 'good governance' to the 'under developed', with the help of highly democratic governments such as those of Gen Musharraf.

For PDF 2005 in Islamabad, Pakistan's economic managers put together a proposal for USD 42 billion. This, coming from a government which claims to be well on the path to economic sovereignty, was but ironical. But it is unlikely that the ordinary Pakistani will be duped. If nothing else, the neo-liberal counter-revolution of the past two decades has produced an understanding that goes against the attempts of generals and donors alike to frame neo-liberalism as 'poverty reduction' and 'pro-poor growth'.

While the rumblings in Pakistan await metamorphosis into a coherent political challenge to dictatorship and neo-colonialism, we can expect more elaborate gatherings like the PDF, complete with back-slapping and self-congratulatory awards. The fact is that Pakistan is today on the path of unprecedented polarization. The neo-liberal fabrications will ultimately be exposed, as has already happened in parts of Latin America, even if it is a long haul.

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Himal Southasian