Pakistan is one of the largest countries in South Asia. Ever since its formation in 1947 it has been politically dominated by a coalition of landed and military elites who rule over millions of impoverished citizens mainly by force. Attempts to break this dominance and establish a truly popular and independent government have mostly failed. Meanwhile, the ruling classes in Pakistan have been unable to industrialize and democratize the state. Their deep dependence on rent and the interests of the imperialists are in complete opposition to the popular aspirations and sentiments of the people.
Throughout most of its history, Pakistan has been a close junior ally of the US. Carrying out its proxy wars in Afghanistan while maintaining little to no relations with its neighbors, India and Iran. Though Pakistan developed close economic relations with China, that relationship has also been subjected to the fluctuations and pressures of US imperialism.
Ammar Ali Jan, member of the left-wing Haqooq-e-Khalq Party and a well known historian, spoke to Peoples Dispatch in detail about the overall political and economic situation of Pakistan.
The following is the first of the two-part interview of Ammar Ali Jan. Diving deep into Pakistan’s current politics, Jan addresses the lack of a social agenda among mainstream parties in the country, the impact of the IMF deal on the people and the effects of climate change.
Peoples Dispatch: There is a political convulsion in Pakistan at the moment. There is repression. There are attempts to undermine the PTI [Pakistan Tehreek-e-Insaf, the largest party in Pakistan’s parliament], Imran Khan [former prime minister and the leader of the PTI] is in jail. There is a new government.
What is your overall assessment of the current situation in Pakistan?
Ammar Ali Jan: The overall situation has to be seen in a slightly historical context in the sense that Pakistan’s political economy is closely tied to American interests in the region. Particularly to America’s military and geostrategic interests. This has been the case since the 1950s. Pakistan has participated in multiple proxy wars of the US, particularly in Afghanistan. The economy is a consumption-based economy based on the cheap dollars coming in because of the wars in the region.
You have an elite that has a very luxurious lifestyle. Some of the biggest property owners in Dubai and London are Pakistani nationals. These are usually generals and politicians. All this money has been made by Pakistan’s participation in America’s War. This is not an elite that is invested in building productive capital, in building industries. Whenever the wars end, as was the case in the 1980s and after America’s withdrawal from Afghanistan recently, the economy starts collapsing. It is almost like a heroin addict who can’t get heroin so they have these hallucinations. The political turmoil which we see: bring Imran Khan into power and throw him out and bring someone else into power and throw him out again. These are all like withdrawal symptoms that the Pakistani state is facing because there is no war in the region [now] from which it can make money.
At the same time, in order to repay the debt that the Pakistani state accumulated during these wars they go to the IMF but the IMF wants the money back and that gap between Pakistan’s current budgetary situation and its debt, that gap is covered by imposing exorbitant taxes on ordinary people.
So literally they are pushing 25 million children out of school. There are 25 million children out of school in Pakistan now. 40% of the people are malnourished. People have been forced to sacrifice the future of their children and the life of their elderly to repay the debts of elites, to pay for their luxurious lifestyle so that they can continue to party in Dubai and elsewhere. It is very much like serfdom in capitalism.
On the other hand we are also becoming a central part of the new cold war. China is bringing in these development projects. But the Pakistani elite, instead of planning a long term industrial policy which is what the CPEC [China-Pakistan Economic Corridor] and the BRI [Belt and Road Initiative] was supposed to be, they see it as another opportunity of rent seeking, short term rent seeking. And now since they haven’t industrialized, the Chinese debts have also accumulated. At the same time America is increasingly putting pressure on the Pakistani state to withdraw their alliance with China and to once again become a base for the US in the new cold war. Large sections of the military and political elite in Pakistan want to go back to the US and rent out Pakistan’s geostrategic location to serve US interests so that their bonanza can resume through the war-fueled dollar. That is the kind of structural crisis which we are seeing in the failure of successive governments in Pakistan.
PD: The mainstream political parties are currently in government. What is their agenda with regards to the issues facing the working class? You already mentioned the increasing poverty, children forced out of school, malnutrition. How are these mainstream parties, which, as you mentioned, largely represent the elites, able to appeal to the working class and gain support?
AAJ: These parties [Pakistan Muslim League- Nawaz and Peoples Party of Pakistan are currently in power running a coalition government] that are historically organized through landed elites in Pakistan who had exorbitant power in their areas. These are basically a political coalition of influential families. Although that is falling apart with the kind of urbanization we see today in Pakistan. There is no social agenda and that’s part of the reason why when Imran Khan came to power he came on a very revolutionary rhetoric but had no clue what to do and ended up giving the State Bank of Pakistan, our central bank, to IMF and also did one of the worst austerity measures including high budget cuts to the education sector.
When Imran Khan was removed there was relief. The people thought these parties would give them relief but the situation has even worsened since then. Inflation has more than doubled since then. So it is not an issue of an individual. It is basically an issue of social conflict, a structural crisis which is inflicting Pakistan. And anybody who comes to power right now in Pakistan without a social agenda would face the same crisis. Even if Nelson Mandela was to come to power today in Pakistan he would be unpopular in six months. Because the crisis is so punishing, the status quo cannot be sustained without sacrificing our children, millions of Pakistani children. That’s how bad it is at the moment. Because all these parties have elites who are the beneficiaries of this system it becomes very difficult to offer an alternative.
So in the long run I don’t think there would be any party. PML and PPP have already been crushed. Imran Khan’s popularity has gone up. But once he comes back to power, the world knows, and everyone in Pakistan knows, that in six months to a year he would be extremely unpopular, just like what happened to Keir Starmer in the UK. This is a crisis. This is a structural crisis. It is a crisis of legitimacy of the state and without a plan for reindustrializing Pakistan, without a plan for fighting the parasitic kind of capital that we have, without a plan for reorienting ourselves from a Washington-based state to one that is anchored within our region, within the global south, within Asia, these crises cannot be overcome. We have to do demilitarization, accept diversity in our fight against religious fundamentalism and do developmentalism, pro-people development, and that cannot happen within this same structure.
PD: You mentioned the IMF deal. Can you go into some more detail? What were some of the concessions made by the Imran Khan government and what are the current restrictions weighing on this government? What has been the biggest impact on the working class in Pakistan?
AAJ: One of Imran Khan’s earlier mistakes was to share BRI details with the IMF. This was IMF’s long standing demand and he gave in. The Chinese were, understandably, pissed off about that. The three year plan he signed with the IMF included severe budget cuts, it included ending subsidies to the poor particularly in the energy sector which led to an overall inflation and eventually he passed a legislation which handed over power, basically it made the central bank autonomous. It was no longer answerable to the government. It was done in the name of fighting inflation but it’s actually a way of decreasing wages and making sure Pakistan’s obligations to the financial creditors across the world are fulfilled. Interestingly, to fulfill this task he brought in an employee from the IMF, Reza Baqir, and made him the governor of the SBP. The finance ministry was given to another IMF official Hafeez Sheikh. So the finance minister and the state bank under Imran Khan were run by the people from Washington. That was part of the reason why the Chinese investments completely dried up in 2021 in the last year in office.
When he was removed [through a no confidence motion passed in the Pakistani parliament in April 2022, allegedly under pressure from abroad] there was this feeling that these old politicians, because they had these networks, would be able to mobilize to bring back the investments. However, the crisis was not about personal liking or disliking. The war had ended in Afghanistan. We had no access to cheap credit and the new government, the PDM [Pakistan Democratic Movement, an alliance of PPP and PML-N which replaced the PTI government in 2022] government, had to go back to the IMF and do an even more punishing deal which included ending subsidies on oil. Petrol prices almost doubled, which led to an inflation of about 45 to 50% on a monthly basis for a number of months.
Similarly, the energy bills. That’s the huge scam in Pakistan. When they privatized the energy sector in the 1990s under the auspices of the World Bank. It was pushed by Hillary Clinton, who was the first lady at the time. She oversaw the deal and since then our energy bills are going up and these energy companies have made billions of rupees of profit. An investigation by the Pakistani senate confirmed that these companies needed to pay the Pakistani state at least 400 to 600 billion rupees in tax evasion. Very powerful families are involved in the scam of course they did not have to pay a single penny to the Pakistani state. The massive gap in state expenditure was being filled by the ordinary people, working class people who have to give up large, say your minimum wage is $120 per month you will end up paying 80% to 90% of that money to repay the debts of the elites which they have all consumed to fuel their luxurious lifestyle. That leaves very little for the working class families which is why about 60-70% working class families are in debt now. This process was aggravated even more in 2022 with the floods.
There were massive unprecedented floods in Pakistan. It is also a victim of climate change. The world promised around USD 30-35 billion. It is said, we did not receive even 10% of that. On top of that, the IMF at the time was pushing for the severest austerity measures we have ever faced. Right when about 20 million people were homeless in Pakistan the IMF was saying we must cut all subsidies to anyone and we must cut down on the budget, we must balance the budget. That meant that even if there was a will in the Pakistani state to help the citizens the capacity was stripped off. Actually the prime minister and the opposition, in a rare moment of unity, all protested asking the West to give the country some relief but it never arrived. Even if you go to the flood affected areas right now the community is totally devastated. Poverty levels, according to one report, have reached over 60% in those districts.
PD: Can you expand a little bit on the impact of climate change over the last several years. Of course we know something about the floods but there have been other instances since then as well. What is your perspective on that?
AAJ: Pakistan has been declared as the fifth most vulnerable country for climate change in the world. Our contribution to climate change or global warming is almost negligible because we have been prematurely deindustrialized. We are actually carrying the burden of the global north and the consumption pattern and production pattern in the global north. That has been very devastating to see because of these floods, the way they destroyed the agricultural land and the way they displaced peasants and farmers. It is leading to the emergence of a “surplus population.” The population which has nowhere to go. They can not go back to their fields, their villages and cities have no capacity to observe them. There is anger in the cities. The situation is very precarious. They have practically become climate refugees, immigrants. There is ethnic tension in the cities, there is a pressure on wages because of that. So there is an expanding pool of unemployed or precariously employed which makes organizing around the trade union or factory more difficult.
Now we are forced to import our food. We were almost a food sovereignty society but now because of the two things which have happened; destruction caused by climate change including the changing weather pattern and floods and the real estate mafia, the land mafia. There is speculation in land. This again is linked to the wars. The cheap dollars that arrived during the wars have been invested in land by our elites. That is a way of making quick money. That has swallowed up the best, the prime agricultural land in Punjab where I come from. Now in Sindh the same thing is happening.
This entire development model is causing a lot of destruction. Lahore and Delhi [India’s capital] as you know, both cities are choking right now because of the smog. That again is part of the way we have planned the cities for elites, for these landed elites, for these big housing societies, for those who drive the cars. The 83% AQI comes from transport. We haven’t invested in public transport. We haven’t invested in public housing. These cities are growing horizontally. We want to create the American suburbs, that is what the elites want. That is just ecologically unsustainable and disastrous. It is a failure of the capitalist economic model of development both internally and globally whose pernicious effects can be seen in various parts of the world.
