This is not the first time. Like now, Pakistan in late 90s was in an alarming economic situation as also in 2007-8. In 1999, apart from international sanctions, the country was gripped by Structural Adjustment Programmes of IMF, massive corruption by Sharifs and bureaucracy/judiciary loaded with cronies. Critics were thumbs down on the handling of economic affairs in the country. To add insult to injury, Pakistan was under a spell of drought for three years. At Qaide Azam University, I questioned the Professor of Political Economy and Futures to explain a ‘Bottoms-Up Approach’ to a sinking economy. He came up with the example of water wheel lifting water from deep below to a parched surface and arid climate.
He explained that IMF and World Bank supported economies are figure fudging and a bubble. They are agents of neo colonialism and neo imperialism. Sustainable economies are like a spinning water wheel. Cans lift and discharge water to the surface for consumption by living beings and crops. When the cycle goes ‘on and on’ the grassroots economy starts moving towards more trade, commerce and production. Ultimately it affects everyone’s lives. Technological intervention gives a boost to agrarian outputs and leads the way for value addition. Pakistan being an agrarian country can never ignore the agriculture sectors.
He maintained that IMF interventions smother local economies, lay off production manpower, lead to high discount and interest rates, and give rise to artificial inflation culminating in stagflation also called recession inflation. In simple words IMF packages intended to lower inflation, exacerbate unemployment. High interest rates are introduced to offset devaluation for elites. Rather than be attracted to banks, people start trading commodities or resort to subsistence living. As the Top-Down creates a counter flow to the spinning wheel, it slows down creating a heat that makes people restive. Ultimately the country surrenders the incidental inflationary growth rate linked to population growth as also its stability. Latin American economies are a case in point.
Top-down economy unlike a vertical water wheel is a horizontal tempest howling overhead. Like a hurricane or a twister, it is a frantic frenzy. With time it becomes super charged with high discount and interest rates, inflation and stagflation. Corporate interests of cartels that exercise influence over decision making and high energy costs create a piercing needle that points down below. What follows is the eye of the hurricane, or the vortex that acts like a vacuum to suck out blood from stones. The bubble, loot and plunder then fly away leaving behind mess and mayhem. Then they wait for the next cycle.
Isn’t this what is happening in Pakistan? Evaluate the correlation of discount and interest rates, devaluation, shutdowns and unemployment? Basic commodities have become too expensive, the low middle class is becoming poor and the poor, poorer? Small and medium enterprises are shut down and agriculture facing criminal neglect. The current wheat crisis is a lust generated issue. Cartels are exploiting market elasticity to hike prices to make exponential profits. The socio-economic fabric is tearing at the seams.
In 1999, Pakistan faced similar and according to some exerts far worse situation. Pakistan was under international sanctions. Democracy was taking revenge and cartels were about to intervene with a bite on the juggler. But a bureaucrat who loved Pakistan was not going to allow it.
Dr. Zafar Altaf had already embarked on an ambitious programme despite fierce resistance. Pakistan’s flagship Canola project was halted in tracks by the 1996 interim government. Oilseeds Development Corporation was aiding the Palm, BT Cotton and Soya Lobbies. The PMLN government wanted the Idara e Kissan projects to be stopped forever. Despite such resistance Dr Zafar Altaf had tricks up his sleeves and he fought back as a one man army.
In October, he floated a tentative order worth 40 Million Dollars for import of wheat. Bureaucracy and businessmen wanted him to be removed. The Chief Executive office was flooded against him. An inquiry against him was to soon commence.
But before ordering an inquiry against him, I decided to visit him to ascertain his side of the story. It was a very uncomfortable sight coming across a very defiant and controversial bureaucrat. His lament was that he must be given six months and after that the government could put him to gallows. He also requested that school summer vacations in 2000 should be advanced as Pakistan could be short of storage for high quality wheat. Thus I embraced a mentor and dervish who. General Musharraf agreed to give six months.
That year the federal agriculture ministry ensured early sowing of wheat. The Military through dredging ensured water to tails. To avoid vegetative growth, farmers were instructed to prune their wheat saplings at a certain height. By March, despite a prolonged drought, surveys indicated a bumper harvest. Schools were closed in May instead of Junes to be converted into temporarily granaries. Pakistan’s wheat in a single season grew from minus 4.47% to 18.04%, an astounding jump of over 22%. From 17.8 million tons, it shot to over 21 million tonnes.
I asked Dr Zafar why he placed an order of 40 million dollars. His reply was to discourage smuggling of Pakistani wheat and create domestic market elasticity. Consequently, no wheat was imported.
Alas! Dr Zafar Altaf became an OSD six months later. 2001 was hit by very poor agriculture output. In fall 2019, the agriculture department did the opposite.
The economic hitmen succeeded. Canola project was not revived. If left to his edible oil planning Pakistan today would have been an exporter of edible oils from Canola and cotton. Today, hazardous GM Canola and rapeseed are being imported.
Another initiative! I went with him to Olive nurseries of Chakwal and Attock. Today those saplings have landed Pakistan in the olive producing countries of the world. Reports suggest that Pakistani Olive oil is amongst the choicest in content and quality.
He also pioneered strawberry for Pakistan’s small land holding farmers for poverty alleviation. Despite closure of Idara e Kissan this project is sustaining poor. His experimentation of growing oranges in the arid areas, Abbotabad, Dir, Swat, Khanpur and Tarbela now produces the choicest fruits in Pakistan.
In 2008, Dr Zafar Altaf became the Chairman of National Agriculture Research Centre. His love of producing a Pakistani high yield cotton seed restarted. Dr. Zar Quraish developed three very high yield all season hybrids. Together, we grew cotton near Simli Dam, Attock and Mardan. Results were far beyond expectations. Agriculture cartels were against him. PMLN government removed him and confiscated Idara e Kissan. Cotton Research Institute at Multan mulled the cotton seed project for good. They now advocate GM Cotton.
There is a lesson for all of us on how Dr Zafar Altaf operated. A single man took on all the enemies to produce for Pakistan what we enjoy today. This lesson must be quickly grasped by the government. Left to IMF, Cartels and civil servants, nothing will happen.
Unfortunately the same powers that created the 199 and 2007 economic crises are active once again. Circular debt and wheat crises are only the tip of what they are doing. The horizontal spiral of IMF directed economy is destroying the grassroots economies. The government has to take notice. IMF indices are artificial. The solution lies in the water wheel and its effect on downstream and upstream industry. Kick start the grassroots economies.