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A Portrait of the Death of an Economy My topic deals with Pakistan, its relationship with the IMF and World Bank, and its internal problems that are causing unemployment, poverty, economic crisis and hunger. I shall be analyzing the situation using the neo-classical theory, as it is what the economists of the Pakistan government and the IMF are using to alleviate the economic instability of the country. Situated in the sub-continent, Pakistan is a low-income country, with great promise for growth. Unfortunately, it is held back from reaching middle-income status by chronic problems like a rapidly growing population, sizable government deficits, a heavy dependence on foreign aid, recurrent governmental instability and large military expenditures. It is to address these fundamental faults in Pakistan's economy that the IMF has initiated the Structural Adjustment Programs (SAPs) in the country. This is discussed in further detail later in the paper. Like all developing countries, Pakistan's population is largely employed in the agricultural sector, which accounts for about 48 percent of the labor force. In today's world the Industrial and Service sectors are the largest growing areas of a developed county's economy. Yet Pakistan only employs 39 percent of its population in Service, and a minute 13 percent in Industry. This is a paltry figure, compared to the employment statistics of a developed country. Pakistan is also heavily dependent on a single export crop, cotton. Hence the country's fortunes rise and fall with the cotton market. It is no wonder that there are so many poverty stricken people in Pakistan. When almost half the population is involved in a very volatile market, a lot of the time, a lot of people will be burnt by price fluctuations. The country is also subject to the mercy of the weather. Focussing on a major cash crop means very little diversification. This translates to mass hunger and hard times for the agricultural sector whenever the agrarian lands are ravaged by floods, or conversely, by droughts. Even more importantly, Pakistan's agricultural sector is marked by large landowners, controlling most of the production. Hence, only a minimal amount of the profit from exports goes to the poor people working for the large farmers. It is these people who constitute a large portion of Pakistan's population. It is also these people who are living in abject poverty in the rural regions of the country, devoid of the right to feed their families. This is a great illustration of a theme discussed in "World Hunger, Twelve Myths.' Lappe, Collins, Rosset and Esparza discuss the commonly believed myths about why hunger and poverty exist. In it they clarify this very important point: hunger does not exist due to a shortage of available food, but because of 'fear' and 'powerlessness,' resulting in the 'anguish, grief and humiliation' felt by the hungry and poverty stricken. Pakistan is a classic example of this theory. Based on a feudal system, especially in agriculture, Pakistani society is primarily controlled by feudal overlords, (a.k.a. the politicians or relatives of politicians), who own or oversee most of the agrarian land and industrial base. Being above the law, due to their political influence, these corrupt people can literally get away with murder. Thus, keeping their laborers subdued and underpaid is no hard task. Anyone who dares to complain is used as an 'example' for potential future unrest. As a result, the people in their 'elakhas', (controlled lands), remain destitute in the throes of poverty, unable to help themselves due to their lack of power and the fear of the 'thekedars', (large landowners). By a lack of power, I refer not to a dearth of physical prowess but to a scarcity of basic human rights. These are the same rights that people in developed countries take for granted. The right to vote for whomever one feels like is missing. Instead a lot of villagers are forced to vote for the local land owner due to a combination of fear and ignorance; a fear of the repercussions of a potential loss by the feudal lord and the ignorance of any means to escape this same overlord's wrath. Very often there is also no choice of candidates. There are very few people willing to risk their own and their families' safety by running against their subjugators. All this goes against the very nature of the free market economy that Pakistan is supposed to be running. While the IMF and World Bank are using Neo Classical theory to address the nation's problems in the capital, half the country is still being run under the feudal system. Till this system is broken, and the immense lower classes are empowered there is not a dent that can be made in the country's poverty and hunger issues. Rather the problem will continue to grow right under the economists' noses. Pakistan is also set back by ethnic problems, having numerous groups including Punjabis, Pakhtoons, Sindhis, Balochis and Mujahirs
Terminology mentioned in this term paper
Names referenced in this report
Organizations referenced in this report
Pakistani government, IMF, World Bank.,
Locations talked about in this research material
the provision, India, the existing capital, Karachi, Balochistan,
Facility referenced in this research material
Companies included in this research paper
Keywords talked about in this research paper
public sector, private sector, World Bank, expenditure, debt, exports, hunger, taxes, Pakistan government, interest rates, markets, agricultural sector, policies, Pakistani government, economic growth, investments, imports, social, Pakistan State Oil, energy sector, environmental protection, industrial sectors, feudal system, poor people, poverty stricken, privatization, exchange rate, Structural Adjustment Programs, government expenditure, large, public debt, economic crisis, tax reform, third world countries, pollution control, water sector, developmental, tariff reform, literacy rate, income tax, urban population, tax administration, free market economy, public enterprise, labor force, helpless poor, World Hunger, external debt, a single, developed country,