Yes, we have nurtured a pampered elite class, which is rent-oriented—never lets an opportunity go by to extract profits with a minimum of their investments. The elite class patronises each other with loans and then in an act of mutual benevolence writes off each other’s billions of rupees loans. These written-off loans have been used to set up pharmaceutical companies, auto plants, cement plants, and sugar plants, and then cartels were created to fleece the general public. The policymakers, for the establishment of afore-mentioned industries, were patronised by the elite and these sectors were declared manufacturing sectors, and accordingly, incentives were awarded to them. In return, these sectors were to indiginise the products/ components and promote local manufacturing and create local jobs, a condition which never materialised.
The political elite supported by ever pliant bureaucracy also enjoyed perks and privileges at the state’s expense. And to maintain their hegemony and keep their toadies happy, the political elite also indulged their grovelers with morsels of state money. However, the state was not making enough money to cover this style of profligacy. So what do the elite do? They borrow from international lenders and local banks at bloated interest rates. When one borrows, one has to agree to the lender’s terms. Thus, as more and more money was borrowed, more and more of the country’s sovereignty was compromised. Thus, after more than seven decades we have billions and billions of dollars of debt and a major portion of our budget goes to debt servicing.
And since 2000, when foreign currency accounts were frozen, the dollarisation of the economy happened, followed by the flight of dollars to Dubai. Strangely, whenever there is a dollar crisis in the country, there is a corresponding rise in the real-estate prices in Dubai. Moreover, dollarisation and loan mongering always translate into an increase in power, gas, and petrol prices for the general masses. Further, these increased prices directly impact the prices of daily items of use, thus further compounding the miseries of ordinary people. However, the general masses are always soothed with the promises of better days and a prosperous economy, which still have to materialise. On the other hand, the elite and their sycophants are insulated from this ever-vicious cycle of inflation since they live off the state resources.
All the above realities were somehow obscured from the general public till the present crisis. People have now come to know that precious foreign exchange remitted by the workers in Gulf countries is being wasted on indulgences of the elite: importing pet foods, foreign chocolates, clothes, and makeup kits. Further, people came to know that the auto sector is importing CKD and SKD kits from abroad at the cost of precious foreign exchange; and the auto sector is not capable enough to export its autos s to any country in the world! Similarly, instead of industrialisation, the rent-oriented elite promoted the real-estate sector and used it for parking black money. And yes, we have become good middlemen who have the inside story. So, whenever the government plans to increase the price of any imported commodity/product, the middlemen order them in advance resulting in windfall profits.
Thus, we have a rent-oriented elite supported by a servile bureaucracy, which has the country in a stranglehold, and resultantly the country is heading towards an economic meltdown. Now, the big question is: what mass of three hundred million people will do when the meltdown will happen and the elite and their serfs will flee to their adopted foreign lands?
The writer is a freelance columnist