POINTS TO PONDER FEBRUARY 2023!
As was to be expected, the crises facing Pakistan, have not ushered good tidings! From food and water crisis, to climate change and economic crisis all have impacted agriculture and food production, the lives and livelihood of the farmers and of course the common people, tremendously.
There is escalating food inflation, ranking the country as one of the highest in the world. The blame cannot be attributed to natural calamities or/and climate change but to our State’s incompetency, that is unwilling to prioritize the economic and social needs of a self-reliant nation state and its people. The caretaker government’s pontification includes remarks such as ‘. . . reconstruction of the agriculture sector on scientific basis will not only utter (sic) a new era of export-led growth but also ensure food security in the country . . . .’ However, the daily rigor facing the common man and woman is far away from such hyperbole. Among other failures, the country also faces acute drinking and irrigation water supply; the impacts have been felt especially in Sindh, where the Indus Delta has suffered grievous harm, the people of Dadu suffering from both water and energy crisis. Petroleum price rises have also raised the cost of agricultural production sharply. The export scenario was also bleak – the country’ s exports shrank for the fifth month in a row dropping by 15.42 percent year-on-year – in January with fears about the closure of industrial units, especially textile and clothing across the country. This phenomenon cannot be separated from the IMF conditionalities; the National Assembly (despite lacking quorum) passed the IMF-dictated Finance (Supplementary) Bill 2023. On the behest of the IMF, the government has imposed PKR 170 billion worth of taxes, of which PKR 115 billion had already been imposed earlier. According to the Energy Minister, Dastgir Khurram, on further directions of the IMF, the government imposed additional surcharge of PKR 3.82 per unit on those using 300 units to fund power sector loans. On the opening day of the talks with the IMF, the government increased the price of liquified petroleum gas by 30 percent. The overwhelming need for the government to sign a deal with IMF must have been dictated by its very low level ($3 billion) of foreign exchange reserves, an amount not even sufficient to cover controlled imports for just three weeks. And even under such intense economic crisis, the state has allowed the import of $32 billion worth of agro-based commodities.
The continuous increase in petroleum prices puts intense pressure on the national industry, and therefore, it is no surprise that the country’s production capabilities are being severely challenged. There was a decline in rice as well textile exports. The country’s overall export during July-January 2022-23 was $16.49 billion (provisional) against $17.73 billion over the corresponding period of the last year, showing a decrease of 6.99 percent. Pakistan’s dependence on a handful of countries for exports, especially the US is of serious concern; it remains the largest export market for Pakistani products. According to the US State Department, a robust trade relationship between the United States and Pakistan is more important than ever to bolster Pakistan’s economic stability. It is also worth noting that the US-Pakistan Trade and Investment Framework Agreement (TIFA) ministerial meetings have resumed after a seven-year gap. TIFA, recognizing the critical key role of private sector is based on promoting trade and investment between the two countries; given the slump in our production, the inability to diversify our exports, as well export destinations, such trade agreements can only harbor further economic deterioration.
While TIFA, and in general neoliberalism concurs that foreign direct investment, meaning multinational corporations are beneficial for engaging parties, such beliefs are challenged. A key concern is the corporate sector’s priority of maximizing its profits, uncaring of the impacts it brings to the people, the economy, or the environment. For instance, in Pakistan, in face of more than 1,100 daily deaths from diabetes-related complications, as well hundreds of limb amputations, multinational companies are offering $200 million worth of investment in the country, to prevent authorities from raising taxes on sugary drinks. The FBR is under immense pressure from different political interest groups making an effort to stop the 17 percent Federal Excise Duty on sugary beverages. According to the International Diabetes Federation (IDF), the cost of diabetes management has increased by more than $2,640 million in Pakistan in 2021.
Another stark example of corporate sector’s criminal behaviour is the Reko Diq partnership that has been reinitiated. Barrick Gold Corporation, a Canadian mining corporation, has paid the first $3 million to the Balochistan government, as part of the new deal. However, the history is that Barrick had registered a case against government of Pakistan under the Investor-State Dispute Settlement (ISDS) system, when the Baloch government had resisted the former agreement with Barrick. In response, Barrick had claimed $US 8.5 billion in damages as part of the ISDS mechanism. According to sources, the project has been resumed after the new deal has been made, resolving some outstanding damages as claimed by the company. It should be pointed out that the government of Pakistan implements hunger-inducing IMF conditionalities for much less than the amount claimed by Barrick – so one can say that such terrible austerity measures as forced upon by the IMF are undertaken to pay back the corporate sector for its cut throat investment agreements, which most states swallow hoping to attract foreign direct investment.
Engro Fertilizer corporations was able to earn profits worth PKR 16 billion in 2022, a decrease in its profits by 24% last year, but however still very profitable. At the same time, the increased cost of fertilizers in the market has been borne by the peasantry, the small and landless farmers. A chemical fertilizer, DAP as well as urea were being sold in the black market; the fixed rate for urea under government directives were unavailable.
Similarly, FrieslandCampina, a dairy corporation from Netherlands that has bought 51% shares in the Engro dairy business, reported a PKR 2.4 billion profit for 2022. Therefore, while the country reels under a huge debt of US$126 billion dollars, the corporate sector, even under a heavy burden of taxes was still able to generate taxes.
Unethical practices of corporations are not limited to a particular country but is a global phenomenon. A particular example is of $55 billion infant baby formula industry, that promotes itself through misleading claims not backed by solid rigorous scientific evidence.
While the country reels under billions of dollars of bone-crushing debt, the collusion of bureaucrats, industrialists and academia continue to put emphasis on highly expensive modern imported technologies as the panacea for improving agricultural policies; while meetings and consultations with so called ‘progressive farmers’ have taken place the small and landless farmers as an entity find no place in policy formulation. It is indeed ironic that there have been demands from the Sindh Chamber of Agriculture to declare an agriculture emergency, and that the ‘government should not agree to the imposition of new taxes on farm sector on its negotiations with International Monetary Fund.’ Such statements provide much to be pondered up by the people of Pakistan; the common person is being buried alive under taxes and inflation but the richest segment of society, the intensely rich feudal class remains outside the ambit of state taxation, with the IMF hand in glove protecting the elite segments of Pakistani society, even though it does make statements that ask for taxing the rich.
One can also see the anomalies in the system where hundreds of Central Cotton Research Institute (CCRI) employees have not received salaries for eight months, while the textile private sector, namely the All Pakistan Textile Mills Association (APTMA) is financing PKR 100 crores to increase cotton production and for research. APTMA wants administrative control over CCRII, a government body, and while the power tussle continues, it has stopped its funding to CCRI. This is indeed quite a drastic manifestation of private sector imposing its political will over public institutions – in a sector which has and is the backbone of Pakistani foreign exchange earnings. And one needs to understand that while corporations are able to maintain their profit margins, the working class loses as closure of industry means intensification of joblessness.
It should be pointed out that cotton production estimates for this year indicate an alarming reduction of 2.6 million bales with total production being predicted to be 5 million bales, with 7 million bales to be imported. One needs to remember, the current crisis is a result of relying on genetically modified cotton seeds that are environmentally disastrous, highly expensive as well as unable to cope with the hot climate of Pakistan, which is heating up further based on global warming. At the same time, constant climate crises events have had a deleterious impact on cotton production. Unfortunately, there is still much faith in research and development of climate resilient varieties and technologies. There is much food for thought on what recourse should be taken by the government? Or is it really a moot point as the government is totally under the impositions of foreign entities that have overriding authority in making and implementing public and private sector policy?
International aid, in the name of climate change and women empowerment is also aimed toward promoting corporate interest. For instance, the European Union, as part of the post-flood rehabilitation and reconstruction aims to increase agricultural value chains. ‘Women-led’ livelihood programs have also been initiated by the Asian Development Bank that support climate-resilient rice seeds; though the report does not mention if the seeds are hybrid or GMO seeds, one way or another, these seeds are market-controlled and invariably based on promotion of agro-chemical corporations in the agriculture and food sector. It is not clear how the project is ‘women-led’ as the project grant stipulates only that it will provide women with durable farming tool kits for their farm activities, as well as protective footwear for safer rice transplanting; the role of these women in decision making for project development and implementation is unclear.
So on one hand, we see international organizations promoting neoliberal market-oriented policies in the name of helping communities suffering from climate change, while on the other hand the World Bank manages a Climate Warehouse, which is based on promoting trading carbon credits: meaning that corporations with ‘larger carbon footprint’ in rich industrial countries can continue with carbon emissions while supporting ‘protection’ of environment friendly initiatives in poor countries like Pakistan. However, it is entirely unethical because emissions are creating intense catastrophe in climate vulnerable countries like Pakistan which cannot be reversed by carbon trading. Major corporation and banks, such as Walt Disney and JP Morgan Bank have already been accused of purchasing carbon credits for forest protection that were not under threat; some in the US have been earning mega returns up to $53 million in similar projects. Oil and gas corporations continue with methane emissions despite high energy prices; they release the same amount of methane every single day that occurred based on the Nord Stream explosion.
About 127,000 acres of land in five districts of Punjab will be provided for corporate farming for a maximum of 30 years; however, the entities who receive land under this project will not be awarded proprietary rights over land; areas of focus will include research in forests and livestock. The word corporate farming in itself means highly chemical and capital-intensive agriculture production, a system that is viable only for rich farmers and the corporate sector. Nothing new in the fact, that the state apparatus remains blind to the demand of small and landless farmers for just and equitable distribution of land!
Government policies that are based on promoting neoliberalism and corporate interest disregard environmental pollution including water and air pollution. The Sukkur High Court has observed that Indus River is highly polluted. Industrial run-off, municipal wastewater, and hospitals’ waste all are being dumped in the river. Apart from rivers, globally, oceans and marine ecosystems face pollution; activists demand that existing and emerging industries that threaten deep ocean are unequivocally rejected. That something is seriously wrong is indicated by whales being washed up dead in different coastal areas such as Cyprus, and Sri Lanka.
The toll of environmental degradation and pollution is borne by society. According to the UN, one in three children worldwide do not have access to clean drinking water, one in three schools have no basic sanitation. Clean drinking water and handwashing facilities are key to protecting children against infectious diseases.
In urban areas, especially megacities like Karachi air quality is toxic, with the city ranking among the most polluted and unlive-able cities, globally. While there are no measures taken to check air or any other form of pollution, there is also negligence on part of government authorities in investigating harm caused to the public. For instance, the death of 19 people in Kemari, Karachi has not been scientifically investigating; initially it had been believed that the cause of death were toxic emissions from factories in the area.
PIMS administration points out that a company hired at PKR 1.4 million to incinerate medical waste has been unlawfully selling infectious material such as blood bags and syringes for use in further recycled production. All this in face of the fact PIMS itself has an incinerator that could burn 100 kg of waste per hour.
Nationally and internationally, there is a mounting debt crisis, inflation, and climate emergencies. The cumulative impact is seen through a number of indicators such as rising number of climate calamities from cyclones to snow storms, avalanches and flooding. In addition, there are also many different natural disaster events; the Earthquake in Turkiye and Syria are one such example, which has left thousands dead, and millions in unsafe situations facing stark weather conditions and hunger; the situation in Syria is exacerbated by the sanctions placed on it by the US.
Maternal mortality figures have been rising, with more than 287,000 maternal deaths in 2020.
Inflation and climate crisis go hand in hand resulting in global hunger. According to the World Food Program (WFP), there will be 345.2 million people food insecure in 2023, an increase of almost 200 million people since early 2020. Wars and conflicts in different regions of the world are the main drivers of hunger. With more than 240 million people in various countries such as Afghanistan, Haiti, Mali, Somalia, South Sudan and Yemen in need of humanitarian aid, many close to famine, the UN is unable to generate enough funds to reach all in need.
Food prices, such as for onion have escalated due to a combination of climate crisis and the Ukraine war. The level of economic crisis can be judged by the number of bailout programs being negotiated by the IMF with various countries including Sri Lanka, Bangladesh, and Argentina.
That the people globally are suffering is more than obvious. There have been massive demonstrations against inflation and price hikes for most essential public utilities and food items not only across Pakistan but in other countries. These include Sri Lanka as well as ongoing strikes and protests in France, Germany and the UK.
The national and global economic, social and environmental situation is indicative of a mass unrest, much of which of course can be attributed to the brutal exploitative, extractive mechanisms of Monopoly Capital.