Pakistan Observer | 17 August 2009
Rizwan Ghani
Due to failed economic policies, cash starved opulent Islamabad is planning to sell agriculture land to foreign investors. Reportedly, one million acres are being offered for farmlands. Any materialization of the plan is going to force-relocate hundreds and thousands into cities for sustenance, which will bring complex social, economic and security problems in ‘revolving door' cycles for individuals and government. Majority of the displaced individuals unable to find alternate jobs are going to end up in ghettos where they will be exposed to organized crime, illiteracy, poverty, disease and psychological problems. The government will end up spending more on policing, health care, unemployment and utility services on this relocated population. Since agriculture is the mainstay of country's population, therefore government should say no to farmlands and instead work on an indigenous Pakistan first economic plan to rid the nation from the menace of foreign investors.
There is already global outcry over foreign acquisition of agriculture land and Islamabad should avoid the trap to protect food security, which is going to be as important as energy security. Reportedly, 30m acres of land-equal to half the size of Europe- acquired in poor countries by rich countries to secure food supply has been termed as "Neo-colonialism". Lands with good water supply and proximity to ports are choice targets for the investors. According to UN the accelerating trend could severely impair the ability of poor countries to feed themselves and deny locals access to resources on which they depend for food security. Outsourcing food production would leave behind a trail of hunger, starvation and food scarcities for local populations. The environmental tab of highly intensive farming - devastated soils, dry aquifer, and ruined ecology from chemical infestation - will be left for the host country to pick up (The Guardian, July 3). G8s $15 bn pledge to boost agriculture in poorer nations has been criticized by antipoverty groups because states and individuals owning vast stretches of lands in developing countries block land reforms in those states with adverse effects on local politics, food security and rural livelihoods. In addition, foreign investors are unwilling to abide by regulations. Reportedly, Japanese PM Taro Aso said a regulatory approach is not desirable as it may deter "benign investment" (Arab News, July 10).
Farmlands are lucrative business. Reportedly, a Gulf based investor with help of Islamic Development Bank is launching a seven-year 7x7 plan worth $1 bn in Africa (Arab News, August 4) in which 700,000 hectares of farmlands in four countries will be used to produce 7 million tons of rice in seven years to reduce dependency on rice imports and supply the ME region. Islamabad instead of allowing foreigners control of local agri-land should use twenty million acres of government land to settle 2 million families by allotting ten acres land to each family through act of parliament in accordance to country's constitution on lines US Homestead Law. The Homestead Law allows farmers and their future generations to continue using land for agri-purposes as long as they stay there. An article, Can G8 Help Poor Farmers, (Pakistan Observer, July 17) clearly shows that small farms are more productive and cost effective than big farms.
In agri-sector, Islamabad by helping half a million families associated with fisheries, eight million families directly associated with dairy sector can help reduce unemployment, minimize number of ghettos, eradicate poverty, crime, sickness and end exploitation of unskilled jobless people and their dependents. Government funds for Public Development, Poverty Alleviation, Human Resource and Agriculture can be used for the needful. It will be productive and transparent use of tax money. Next, Islamabad should replace debt-driven, consumerism-based, pro-privatization failed Washington Economic Model (WEM) with economic model based on domestic demand. Reportedly, under economic sanctions Iran has been identified as an emerging economic power in "the next eleven" countries by BRIC experts (Wall Street Journal, Aug.2). BRIC experts are of the opinion that Iran has used its large population (80 million) to develop a broad based economy that will grow steadily in coming years. Islamabad should use its population and agriculture on similar lines to generate employment and kick start economy. Reportedly, the size of US domestic consumption in 2008 was around $400 bn. Pakistan can revive its economy thorough domestic consumption based on value addition of local agriculture produces, fruit and meat, poultry and fish produces allowing year long uninterrupted availability of food from all seasons as part of food security; maintain a cycle of healthy domestic consumption and exports. Rice exports alone earned $1.8 bn in 2008.
In return it will cut import bill, reduce unemployment and ensure year round availability of food basket items. President Zardari also opined that Pakistan can be region's ‘food basket'. However, dissolution of dairy ministry under IMF instructions shows challenges for Islamabad.
Reportedly, Patrick Low, WTO chief economist said world is now looking at long-term de-globalization in world economy as economic power shifts to Asia (Arab News, Aug. 11). It could support Pakistan's "food basket policy" backed by savings based economy on lines of Chinese and Indian economies. However, pro-consumerism and trickle-down economy finance ministry headed by Shaukat Tareen is steering national economy towards global market economy. It speaks volumes about PPP's 5D election slogans, promise of change and (its) indifference to debt to GDP ratio with ever growing debts. Pakistan despite earning billions through exports, remittances and having sufficient agri-land, water and manpower is dependent on loans. It reflects deeply flawed economic planning. Nawaz Sharif has already said that economy can be sustained without foreign debt. Islamabad needs to re-peg rupee to gold, instead of transferring inflation to by public by printing money.
Islamabad should nationalize banking sector in line with China, and most western states and abandon global banking rules because these rules violate Pakistan's constitution, undermine human rights and have been adopted without explicit approval of the parliament. The failures of central banks, treasuries and securities and exchange commissions'(SEC) to self-regulate has resulted in global meltdown. Pakistan should nationalize its financial institutions and stock exchanges to protect its economy. Financial institutions should be run according to local laws because they use public money. Next, restore national pay scale in all the public sector institutions including financial institutions. In private sector, implement 7:1 salary ratio between employer and employee. Then, clear bank inventories and adopt savings based banking. Based on the bank inventories, Islamabad should bring bank managements to book for colluding with politicians to write off hundreds of billions of rupee loans for individual gains, justifying bonuses and clearing bank inventories. West is already recovering bonuses from the management of financial institutions'. Furthermore, investigations should be held against SECP and KSE for 2005 tragedy that reportedly resulted in loss of life savings of 25,000 people.
Finally, Islamabad should reject foreign owned farmland in public and national interest. In addition, it needs to nationalize banking sector, implement national pay scale in public sector and employer-employee salary ratio. Promote savings culture by giving incentives to avoid selling national silver and use local bank reserves to finance national economy and development. Furthermore, Islamabad should brace for de-globalization starting with replacing of pro-globalization mindset in finance ministry with broad based domestic agri-based economy experts. A stitch in time saves nine.
