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AFAKISS

The struggle for Marxism

Why the form of capitalism in Pakistan has miserablyfailed?

FAQIHA ABBAS11/10/2009

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Introduction:

Does GDP growth automatically transform into higher living standards for the people? Why the

form of capitalism in Pakistan has miserably failed in raising the living standard of the common

man? The only solution to this tyrannical exploitation of the people is a transition from the

capitalist to the socialist system.

"We approach every issue from the vantage point of people. Do they participate in

economic growth as well as benefit from it? Do they have full access to the opportunities of

expanded trade? Are their choices enlarged or narrowed by new technologies? Is economic

expansion leading to job-led growth or job-less growth? Are free markets open to all

people?[Dr Mahbub ul Haq, Human Development in South Asia 2001: Globalization and

Human Development.]

With trade liberalization, the removal of restriction on agricultural exports, and recent

global events favoring Pakistan, the country has seen an annual economic growth of about

4.5%.Its Industrial growth rate is 5.7%.The Government is thrilled about the success it has had in

increasing Pakistans foreign reserves and the increase in GDP. However, these figures havelittle to offer the common man. Pakistan has a national food poverty rate of 37% and a 39% food

poverty rate in rural areas. Furthermore, 40% of children under the age of five are underweight,

50% are stunted, and 9% are wasted. 40% of Pakistans people are below the poverty line and

the Human Development Index (HDI) is abnormally low by world standards.40% of the male

population, and 69% of the female population is illiterate.

In Pakistan the internal inequalities take the shape of economic inequality. This exists on

a large scale and on different levels in the society. There are many internal divisions based on

linguistic, ethnic, sectarian, religious, urban-rural, and gender differences. Almost all of these

translate into economic differences. With the capitalist system, industries, infrastructure and

development flow to areas where the capitalist will find Economies of Scale. This is evident in

Pakistan where the industrial growth in Baluchistan is miniscule compared to Karachi and

Punjab. This has created regional disparities amongst the four provinces. The variation in HDI

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between provinces and districts are indicative of regional disparities in both the level of

economic growth as well as in terms of health, education and the quality of life. There is

considerable variation across provinces with respect to literacy rates which vary from 51% in the

Sindh to 36% in the Baluchistan. As a consequence while the human development index for

Pakistan, as a whole, is 0.541 the provincial HDI varies from the highest in the Punjab, at 0.557,

to the lowest at 0.499 in Baluchistan. Islamabad (a federally administered territory), is Pakistans

capital city, and has a greater weight of affluent citizens in its population with a far better social

infrastructure than in any province of Pakistan. It is not surprising therefore that the human

development index of Islamabad is 0.612 which is higher than that of any of the provinces in the

country.

Due to inadequate access of the poor over institutionalized credit markets as many as

50.8% of extremely poor households borrow from the landlord. The resultant increase in

leverage and additional social control by the landlord, obliges many poor households to work for

the landlord without any wage at all. (57.4% of extremely poor households worked for the

landlord without wages). Access to land which is the basic factor of production is crucial to

reduce poverty in rural areas. Cultivated land is highly unequally distributed in Pakistan.

Furthermore, a large proportion of Pakistans farms are operated under tenancy agreements. The

form of the contract between the owner and the cultivator can vary considerably and is an

indicator of how equitable the agricultural production systems are. Unequal land tenure patterns

have serious implications for income distribution. Pervasive inequality in land ownership

intensifies the degree of vulnerability of the poorest sections of the rural society, because the

effects of an unequal land distribution are not limited to control over assets. The structure of

rural society, in areas where land ownership is highly unequal, tends to be highly hierarchical,

with large landowners or tribal chiefs exercising considerable control over the decisions,

personal and otherwise, of people living in their area, as well as over their access to social

infrastructure facilities.

The process of privatisation of state industries in Pakistan, as a result of the pressures of

imperialism, is having devastating effects for the workers: redundancies, decrease in wages and

longer working hours .The excuse they are using to justify privatisations is that they are running

in deficit. They are trying to convince the workers of these industrial units to buy the shares of

their factories to make them owners. They have already privatised electricity, cement factories,

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Millat tractors, Allied Bank of Pakistan and Muslim Commercial Bank (now UBL and HBL),

steel sector, engineering factories, cooking oil mills, and partially railways, buses and Pakistan

Telecommunications, among others. [ Asim Sajjad , Human Development Centre]

The only solution to this tyrannical exploitation of children (with over one million child

laborers in Pakistan), women, peasants and workers of Pakistan is a transition from the capitalist

to the socialist system. First and foremost is the need for an organized, disciplined, centralized,

and connected proletarian political representative party, which educates people on their rights,

and tells them how the capitalist system has exploited them. A socialist revolution is only

possible if it has mass support. The representatives of the people should aim to reverse the

ongoing privatization process and should nationalize key industries, the education and health

sector. Progressive taxation would lead to a fairer distribution of income. If globalization were

superimposed on a poorly educated and poorly trained labor force with poor systems of

governance and infrastructure, it would not lead to growth nor reduce poverty. In order to benefit

from globalization Pakistan must accelerate human development, improve governance and invest

in infrastructure. Extensive land reforms should be undertaken by seizing the right to own private

property, the right to use ones property for ones selfish gains without any regard to workers or

society should be seized if we were to reverse the economic inequality in Pakistan. Lands should

be taken away from Army men in places like Okara, and the fundamental question that "Whom

does the land belong to? Those who harvest it or those who hold the gun?" should be answered.

This is a fight between the landless peasants and biggest landowner in Pakistan, the Pakistani

army. This is a great burden on the moral conscience of the nation. Why are the sons and

daughters of Pakistan not allowed to get the bread they have harvested after so much hard work?

[PTUDC]

Conclusion:

Markets are not very friendly to the poor, to the weak or to the vulnerable, either

nationally or internationally. Nor are markets free. They are often the handmaidens of powerful

interest groups, and they are greatly affected by the prevailing distribution of income. Is

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everybody in a position to compete in the market, or will some people fall outside the market

place because they do not have enough education, health, and nutrition to compete on any

footing, let alone on equal footing? That is why much better distribution of income and assets, of

credit, of power structures and certainly of knowledge and skills are vital. Markets cannot

become neutral or competitive unless the playing field is even and playable.