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A worrisome build-up

Last week, the Vatican released an “apostolic exhortation” authored by His holiness Pope Francis, which faults unfettered capitalism as “a new tyranny”, and calls on political leaders everywhere to fight poverty and inequality to revamp the current mode of sharing of wealth so that the disadvantaged lot can access “dignified work, education, and healthcare”.

According to him, the commandment “Thou shalt not kill” must now include “thou shalt not submit to an economy of exclusion and inequality because such an economy kills” – a fair criticism that prompted immediate negative media responses. CNN’s senior international correspondent Ben Vedamann lost no time in faulting the Pope for indulging in politics.

According to Vedamann, the Pope’s view amounts to building a political platform for the papacy. This flawed stance also betrays another reason for criticism of the Pope view – Pope Francis is the first non-European to become the pontiff in 1300 years, and ever since, in his sermons and remarks, has aired strong views on the pathetic profile of the governance of the state.

To the embarrassment of politicians, Pope Francis has also set an example of austerity in the church by living in a Vatican guest house rather than the ornate Apostolic Palace, and travels in a Ford Focus car, manifesting thereby that he means what he says – a tradition that has become a thing of the past among today’s politicians. No wonder they are targeting the Pope.

Blindly and vehemently denying their governance failures is the politicians’ strategy everywhere although each economic recession owes itself to this dumb strategy. All that the politicians do is to enact a few “reforms” whose integrity and efficacy is exposed by the next recession while poverty keeps rising, and is now at alarming levels almost everywhere.

These “reforms” have one key consideration – saving capitalism – although they all end up smearing capitalism even more. Despite “strengthened” regulations (courtesy Basle Accords), at the outset of the current economic recession, banks in Europe had asset-deposit ratios as high 136 percent, and in the US, fraudulent asset-backed securities openly deceived investors into buying over-priced assets.

In Pakistan an example of regulatory blindness was set by allowing commercial banks to indulge in speculative stock-trading and employing CEOs on contract. What is the quality of the critical organisational loyalty that such contacts infuse is amply reflected in the consequences the financial services sector has struggled with in the post-2007 era.

The Pope is right in blasting the overly vested interest and profit-oriented profile of capitalism. Politicians are blind even to stark realities; they can’t see the rise in the number of billionaires while poverty line is steadily rising everywhere. A recent survey suggests that one in every five children in New York – the global capital of “capitalism” – is undernourished.

Joseph Goebbels – Hitler’s evil genius – had warned that lying will deliver results as long as the state shields the masses from political and economic fallout of lying, and it is crucial that the state uses all its powers to repress dissent because truth is the mortal enemy of lie, and thus of the state. But as with Hitler, lying never succeeded. Yet politicians learned no lessons.

In the last decade, annual GDP growth of the US averaged 3.68 percent while in Communist China it was in double digits. Yet the US focused on surveillance – foreign and domestic – to destabilise other countries and locate and suppress dissent, not remedy its causes. In Pakistan the approach was to flatly deny or simply ignore dissent caused by bad governance of the state.

The US claims that drone attacks are launched with the consent of Pakistan’s government while governments in Pakistan insist that these are unilateral US actions. God alone knows who is telling the truth. No surprisingly, what is common between them is that both are democracies – a dispensation wherein governments vow to share the truth with their masses.

Scarcity of oil courtesy economic sanctions on Iran is the biggest single contributor to rising poverty globally. The Geneva accord between P5 plus 1 and Iran says that both sides agreed to suspend sanctions on Iran’s oil exports, but President Obama insists that these sanctions (and profiteering by oil-rich US protégées in the Middle East) will continue.

Pakistan’s politicians turned the IP project into a “drama” although it is undeniable that, given the rise in oil prices and ocean freight, for Pakistan, economically, the best and most logical option is to share in laying pipelines that transport oil and gas from Iran. Sadly, however, Pakistani governments showed ceremonial interest this is crucial project.

The reason there for was pressure from the country’s “strategic ally” that offered no alternatives. Yet, we accepted the US dictate that worsened the energy crisis and made miserable the lives of the ordinary Pakistanis. Instead of admitting US pressure as the reason for not fulfilling its part of obligations under the IP project, politicians kept confusing the masses.

While Iran laid the pipeline up to Pakistan’s border, we kept asking Iran to also fund the cost of laying the pipeline inside Pakistan. The advantage of IP pipeline is its direct access to Pakistan, not via a strife-ridden Afghanistan. Completion of the project by end-2014 could provide 21.5 million cubic feet of gas per day to generate 4,500MW of badly-needed electricity.

But, on November 25, the Foreign Office announced that during the visit of the PM’s Advisor on Foreign Affairs to Tehran (to participate in the ECO Ministers’ meeting) there will be no bilateral talks on the IP project. Instead, Pakistan chose the US-backed – Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline – that will face huge challenges to its completion.

The delay in laying the TAPI pipeline will stretch indefinitely the miseries of Pakistanis, although on November 27, the Foreign Office disclosed that Sartaj Aziz, and Iran’s Foreign Minister agreed to fast-track the project but press reports suggest that Iran has again rejected the odd Pakistani demand that Iran should finance laying of the pipeline in Pakistan.

These are examples of how politicians deny their obligations and fault those who point to this apathy. Peoples’ anger is rising steadily, not just in under-developed and developing countries but also in the developed Western countries as well. The media report massive public protests being staged against corrupt and incompetent regimes in countries in every continent.

The worrying part is that few politicians seem bothered about this horrifying build-up that could eventually lead to bloody revolutions (the Russian and Chinese-type) – the least desirable and the most expensive mode of order change – as proved by history. As proposed by Goebbels, governments are focused more on repression than on reforming their economies.

A B Shahid, "A worrisome build-up," Business recorder. 2013-12-03.
Keywords: Economics , Economic issues , Economic system , Economic growth , Capitalism , Economy-Pakistan , Poverty , Politicians , President Obama