By Ashfaq Yusufzai
PESHAWAR, May 15 2023 – The arrest of former Prime Minister Imran Khan on alleged corruption charges has led to the deterioration of law and order with attacks on army offices for the first time since the country came into being in 1947.

The 70-year-old former cricket star was taken into custody by paramilitary Rangers while appearing in Islamabad High Court for bail in multiple cases on May 9, 2023. His arrest triggered a spontaneous response from the activists of Imran Khan’s Pakistan Tehreek Insaf (Movement for Justice) party, who took to the streets in protest, during which buildings were burnt, vandalized and ransacked.

Imran Khan was released two days later by the Supreme Court of Pakistan on May 12, but only after the deaths of 40 PTI activists and several government and army offices were reduced to ashes. Not only were protests held across Pakistan, but PTI’s supporters also marched in New York, Washington DC, France, the UK, Germany, Australia and other European countries to show their anger over his arrest.

“The protesters set on fire a radio station in Peshawar and ransacked army installations in Lahore, Mianwali District and other districts of the country, which is unprecedented in Pakistan’s 75-year history,” political analyst Abdul Jabbar Shah told IPS.

Abdul Jabbar Shah, a political science professor at a private university, said that violent protests by PTI activists were unprecedented because no one had ever dared to touch the army’s offices or the replicas of former soldiers on display in garrison cities.

Writing in The Conversation, Ayesha Jalal, Professor of History at Tufts University, says Khan has a strong support base, “but the country is very fragmented politically. So it is a dangerous situation.

“My fear is that the arrest will only pour more fuel on a combustible situation. Pakistan has been simmering since Khan’s ouster in 2022, with the very real threat of political tensions giving way to widespread violence.

“What was needed was for all involved to try to lower the temperature, but the circumstances of Khan’s arrest have only served to heighten tensions.”

Imran Khan took to social media because the TV channels didn’t air his speech after his release demanding an independent probe into vandalism and violence during protests.

“I want an independent and complete investigation on the burning of state buildings and firing at unarmed youth protesters,” he said. “But I want the chief justice of Pakistan to make a panel under him for this probe.”

More than 1,400 PTI supporters, including male and female leaders, have been arrested.

Khan has alleged that the army chief was behind the end of his government, and his supporters targeted the military’s offices after his arrest.

Muhammad Suhail, an International Relations lecturer at an Islamabad-based university, told IPS that the storming of the General Headquarters and other sensitive installations was regarded as unimaginable before this.

“PTI seemed to be the first political party in the country to have directly challenged the powerful army,” he said. Suhail added that there could be political repercussions for the party in future, too.

For the time being, the PTI has emerged victorious, he said.

Jalal says this “may be a precursor for an attempt to disqualify Khan from public office – which I believe would be a very dangerous move in an election year.

“And this all comes while the incumbent government is facing severe challenges, having been unable to control soaring inflation or make progress on a crucial International Monetary Fund loan to dig the country out of its economic woes.”

Pakistan’s Army on May 13 warned that the armed forces “will not tolerate any further attempt of violating the sanctity and security of its installations or vandalism” as it resolved to bring to justice all the “planners, abettors, instigators and executors of vandalism on the Black Day of the 9th of May”.

The media reported that Chief of Army Staff Gen Asim Munir visited the Corps Headquarters in Peshawar and emphasized the evolving threats to national security. He condemned the PTI leaders for inciting its supporters against the armed forces.

Though Khan’s supporters consider this a victory, for many, taking the law into their hands had set a bad precedent in the country.

Analyst Muhammad Javid says that targeting government and army offices is undemocratic, and the PTI should have adopted a peaceful path to release their leader.

“It has sent out a message that PTI believes in violence, which isn’t a good omen for its political future. Opponents will exploit this against the PTI in the election, which is around the corner,” Javid says. Setting ablaze the army’s offices also suggests people were sick of their army, which isn’t correct as most people regard the army as the defender of the country’s frontiers against the enemy, especially neighbouring India.

PTI activists say that Imran Khan is their “red line”, and those crossing that line will result in protests.

“Because of our aggressive protests, the government released Imran Khan; otherwise, he could have been killed in custody,” said Naveed Shah, 31, in Peshawar. “Imran Khan is an honest leader, and his arrest on corruption charges isn’t acceptable.”

He claimed that PTI’s government was dismissed due to a no-confidence motion in the National Assembly in April 2022, that they had been asking for an election. “Since then, we have been holding agitations for a general election,” Naveed Shah said.

However, he claimed that PTI supporters aren’t involved in violence because they had been struggling for democracy for the past 27 years to establish the rule of law in the country. “How can a party (which is) demanding an election resort to violence,” he asked.

Interior Minister Rana Sanaullah told the media that those involved in acts of terrorism in the garb of democracy would be tried as per the law of the land.

Sanaullah said that Imran Khan had been holding protests to placate enemies of Pakistan.

“If PTI does not change its attitude, the government will be forced to ban it,” he told a press conference on May 13 in Islamabad.

Pakistan suspended internet services to disrupt PTI’s communication network for at least 72 hours. PTI has the largest social media network in the country.

Imran Khan has the largest Twitter following in Pakistan. When the internet resumed operations, PTI activists posted hundreds of videos and pictures to substantiate their claims of non-involvement in acts of burning the national installations.

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By Darini Rajasingham-Senanayake
COLOMBO, Sri Lanka, May 15 2023 – Asia is the fastest growing and most dynamic region of the world according to a recent IMF Report; “Recovery Unabated Amid Uncertainty”. ¹

Asia and the Pacific will contribute around 70 percent of global growth this year as expansion accelerates after Covid-19 supply chain disruptions, with ongoing geopolitical turmoil and war in Europe, as well as, various hybrid over the horizon cyber and kinetic attacks targeting Indian Ocean ports and shipping.

Global economic expansion would be significantly powered by the BRICS countries: Brazil, Russia, India, China and South Africa, as well as the Association for Southeast Asian Nations (ASEAN), group that includes Indonesia.

A series of Exogenous Economic Shocks over the past four years, from terror attacks to Covid-19, and ‘climate catastrophe’ policy-mistakes, such as an overnight switch to organic fertilizer, temporarily set back the rise of these ‘emerging economies’ of the Global South on the world stage.

They are now increasingly set to lead a rebound in a Multipolar ‘Asian 21st Century’ as Euro-American hegemony wanes.

Asian Giants, China and India, have huge populations, domestic markets, resources and the civilizational weight to lead global expansion. In the West, growth is poised to decelerate as rising interest rates, trillion-dollar deficits and military budgets weigh, with Inflation high, and banking strains in the United States and Europe.

Asia Pacific growth would increase to 4.6 percent despite the somber backdrop of war and economic weakness elsewhere in the world according to the IMF report.

Strategic Sri Lanka, which staged its first sovereign Default, loosing economic policy autonomy to the Washington Twins (IMF and World Bank), ironically on the eve of 75 years of Independence, clearly needs to look to Asia and the BRICS as Cold War and Colonialism once again roil the Indian Ocean World with nuclear submarines and military bases popping up a dime a dozen these days.

Four new US bases in the Philippines were announce just last month. The country after all is a bell weather for more than fifty other Global South countries caught in post-Covid-19 Eurobond debt traps, and the Washington Twins (World Bank and IMF) ‘bailout business’.

BRICS back on Track as Empires Rise and Fall

The BRICS was strengthened with the return of President Lula da Silva to the helm in Brazil in January. These powerhouse economies are increasingly trading in their own national currencies, promoting a trend to de-dollarization that has gathered steam in the context of US debt of $ 31 trillion and sanctions on Russia last year.

The search is on for alternatives to the US dollar as the global reserve currency as the BRICS economies had outstripped the traditional economic heavyweights – the G-7.

The New Development Bank (NDB) or BRICS bank which is a multilateral development bank established by the BRICS in 2014 to finance infrastructure and sustainable development projects in the developing world is expanding at this time with Iran and Saudi Arabia set to join amid a recent China brokered peace deal to stabilize Yemen and the Middle East and North Africa (MENA) region.

The NDB launched with $50 billion in seed money as an alternative to the IMF and WB. Additionally, a liquidity mechanism called the Contingent Reserve Arrangement to support members struggling with payments was created. In 2021, Egypt the United Arab Emirates, Uruguay and Bangladesh took up shares and membership of NDB while Egypt, Algeria, and Argentina, as well as, Mexico and Nigeria are in the pipeline. ²

Nineteen countries including Indonesia had expressed an interest in joining the BRICS group of nations as it prepares to hold an annual summit in June in South Africa, which is now struck by sabotage and power-cuts

De-dollarize to decolonize

Saudi Arabia’s petro-dollar linked oil reserves had stabilized the US dollar as the Global Reserve currency for decades, but this is changing with talk of the Petro Yuan and related geopolitical developments. In the wake of the Iran-Saudi peace agreement, Syria rejoined the Arab League after a 12-year long US led regime change operation failed against Bashar al Assad.

These movements perhaps explain some of the new Cold War proxy wars and turmoil in MENA and South Asia–from Sudan, to Palestine/Israel, to Afghanistan and Pakistan as the Euro-American empire wanes at this time.

Remarkably Argentina, South America’s 2nd largest economy after Brazil, seeking alternatives to the IMF has applied for membership of the NDB. Argentina, victim of the Monroe doctrine for decades is on its 22nd IMF bailout and 9th default, as Buenos Aires was again rocked by anti-IMF protests last month.

The NDB along with the Asia Infrastructure Investment Bank (AIIB), increasingly constitute a Global South alternative to the Washington Consensus and colonial Club de Paris dominated Bretton Woods International development and finance architecture.

Bankrupt by what metric? Beyond The myth of TINA to the IMF

Sri Lanka as an Asian country would best leverage the Asian 21st Century and the NDB, but Colombo’s Washington-backed Ranil Rajapakse regime that is responsible for the country’s first sovereign default had promoted two myths, that “Sri Lanka is Bankrupt” and “there is no alternative” (TINA) to the IMF agenda, of austerity and a Firesale of strategic assets!

Last year upon assuming office the President promised Famine and 15-hour power cuts, in a psychological operation to spread fear, and prepare the people for an IMF Firesale and the country’s asset stripping.

However, the famine and 15-hour power cuts did not materialize also given plentiful monsoon rains for hydro-power generation as the weather gods miffed the Cold War gods.

The question is: by what metric and on whose Data was the strategic county that sits on major energy, trade and undersea data cable routes deemed ‘bankrupt’? As one of South Asia’s (SAARC) wealthiest countries in terms of GDP per capita with the best social and human development indicators, Former US Ass. Secretary of South and Central Asia Alice G. Wells termed the lush and fertile tropical island, blessed with two monsoons and extensive marine and mineral resources “valuable real estate”! Others have called it an ‘unsinkable aircraft carrier.’

Whether a shortage of exorbitantly privileged US dollars is adequate to measure the ‘wealth of nations’ also given America’s 31 trillion debt is not a rhetorical or philosophical question to elicit yet another theory of value.

Rather, it flags here the failure by the Washington Consensus to make an elementary distinction between ‘illiquidity’ and ‘insolvency’ in determining the purported bankruptcy of Global South countries caught in the World Bank’s Middle Income Country (MIC) trap, to enable a Firesale of strategic assets. Does this not rather reflect great moral and intellectual bankruptcy?

Re-Orient to de-colonize in a Multipolar World

As the Asian 21st Century becomes a reality in a multipolar world where the BRICS economies have overtaken the traditional G-7 countries as the world’s engine of growth, Sri Lanka caught in a Eurobond US dollar denominated debt trap clearly needs to ReOrient as German sociologist and world systems theorist Andre Gunder Frank wrote in his acclaimed book; “ReORIENT: Global Economy in the Asian Age” (1998).

Much of Frank’s analysis finds resonance in a more recent book by Kishore Mahbubani, Former President of the United Nations Security Council, titled the Asian 21st Century.

In the context, Sri Lanka would best ban further borrowing on Eurobond markets, and engage bi-lateral lenders India and China to join hand with NDB, also to renew its Independence and sovereignty in its 75th year, and ensure calibrated exit from US dollar denominated Eurobond debt bondage.

Other countries may aid Sri Lanka’s, but only if the county leads in the search for alternatives to the IMF’s bankruptcy narratives– as Dr. Yanis Varoufakis, former Finance Minister of Greece who has extensive experience with IMF debt negotiations had noted.

Debt trapped countries the Global South and humanity are clearly at a turning point in an age of Artificial Intelligence (AI), big data mining, deep fakes, and drone surveillance by those with the technologies for global governance and control of populations.

Hence, following Elon Musk, Warren Buffet recently warned that ‘AI is a nuclear bomb’. As a genuinely multipolar world re-emerges after two hundred years of Euro-American hegemony, on the cusp of another World War, it is up to debt-trapped countries of the Global South to promote multi-polarity and respect for genuine cultural diversity.

Dr Darini Rajasingham-Senanayake is a Cultural Anthropologist with expertise in international development and political economic analysis. She was a member of the International Steering Group of the North-South Institute project “Southern Perspectives on Reform of the International Development Architecture.’ She had authored and co-edited several books, the most recent being “Multi-religiosity in Contemporary Sri Lanka: Innovation, Shared Spaces, Contestation’ Routledge (2022).

¹ https://www.imf.org/en/Publications/REO/APAC/Issues/2023/04/11/regional-economic-outlook-for-asia-and-pacific-april-2023
² https://www.youtube.com/watch?v=fm_y3w7x1qk
https://www.bloomberg.com/news/articles/2023-04-24/brics-draws-membership-requests-from-19-nations-before-summit#xj4y7vzkg

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By Anis Chowdhury
SYDNEY, May 15 2023 – The Reserve Bank of Australia (RBA)’s latest interest rate hike comes before the ink of the much-awaited review of the RBA, released on 20 April, has dried. The threat of more increases to come is a clear sign of an emboldened RBA as the government accepts all of the panel’s utterly disappointing 51 recommendations.

Anis Chowdhury

RBA Review
The Treasurer, Hon Dr Jim Chalmers, announced the Review in July 2022, designed to ensure that Australia’s monetary policy arrangements and the operations of the RBA continue to support strong macroeconomic outcomes for Australia in a complex and continuously evolving landscape.

The recommendations of the three-person panel, charged with reviewing the structure, governance, and effectiveness of the RBA, range from creating a separate board to make decisions on interest rates, to giving the Bank a simpler dual mandate to pursue both price stability and full employment.

Utter disappointment
The Review report fails to question the long-held taboos about inflation and Central Bank’s role in a social democracy. While the Review panel leaves the RBA’s 2-3% inflation target unchanged, it outrageously recommends dropping from the RBA’s mandate “economic prosperity and welfare of the people of Australia” and the removal of government’s power to intervene in the RBA’s decisions.

This will make the RBA more inflation hawkish, and more aggressive in its use of the blunt interest rate tool without much regard for the consequences on jobs, especially when the RBA’s full employment mandate is left vague.

Without the power to intervene in the RBA’s decisions, such hawkish interest rate hikes will force the government to cut its expenditure as it has to pay more on interest for its debts while its tax revenue shrinks when the economy slows.

Thus, the well-being of ordinary citizens, especially those who will lose jobs, will worsen as the government struggles to find money for targeted budget support. No wonder the Treasurer termed the latest RBA interest rate decision as “Pretty brutal”.

Voodoo of 2-3% inflation target
In accepting the RBA’s current 2-3% inflation target, the Review panel ignores the fact that the 2-3% inflation target has become a “global economic gospel” without any empirical or theoretical basis.

The 2-3% target was plucked out of the air and it became a universal mantra after a chance remark by the then Finance Minister of New Zealand in a television interview followed by relentless preaching.

The recommendation ignores the changed circumstance since the 2-3% inflation target was first adopted. In the wake of the 2008-2009 Global Financial Crisis, many, including the then IMF’s Chief Economist, Olivier Blanchard suggested a 4% inflation target would be more appropriate.

The inflation-unemployment trade-off relationship (i.e., the Phillips curve) has become flatter over the years due to labour market deregulations, off-shoring and other developments. This means trying to dogmatically achieve such a low inflation target would require a much higher unemployment rate as recognised by the former Fed Chair and current US Treasury Secretary Janet Yellen. That is, the interest rate must rise more steeply inflicting serious damages to the business finances, household spending and government budget.

Full employment, a poor cousin
The Review panel recommends “full employment” mandate along with inflation target. However, while the inflation target has a numerical figure (2-3%), there is no such specific target mentioned for unemployment that may be consistent with the concept of full employment. When asked during a press conference, the Treasurer said, “It’s a contested concept”.

The report mentions full employment 100 times! But does not say what it means; instead, the panel accepts the current RBA’s definition and measure of full employment based on a contestable concept of a “non-accelerating inflation rate of unemployment” (NAIRU). That is, full employment is consistent with an unemployment rate below which inflation will accelerate.

There is general consensus that models based on NAIRU are basically wrong. An article in the RBA Bulletin acknowledged, “Model estimates of the NAIRU are highly uncertain and can change quite a bit as new data become available”. Thus, James Galbraith argued for ditching the NAIRU. And an op-ed in The Financial Times concluded, “The sooner NAIRU is buried and forgotten, the better”.

Social democracy sacrificed
The panel thinks, there are too many factors that affect prosperity and welfare. So, it recommends removal of the RBA’s third mandate “economic prosperity and welfare of the people of Australia”, enshrined in the 1959 RBA Act.

Furthermore, the panel seeks to remove the government’s ability to overrule an RBA decision because it “undermines the independent operation of monetary policy”.

With these recommendations implemented, the RBA will not be bound to the commitment to build a fairer society, although economic prosperity and people’s welfare can remain as an “overarching purpose”.

The Winner
A super independent RBA will have all the power it needs to use its sole weapon, interest rate rises, to keep inflation at 2-3%. The emboldened RBA will declare the consequences to its actions on the job markets as consistent with a vaguely defined full employment, and economic prosperity and welfare of the people.

It can simply assert that job and income losses are short-term pains for long-term gains, without having to provide any evidence. There are no such things as short-term pains.

For many, job loss may cause permanent damages to their mental health, self-esteem and social life often leading to suicides. IMF research shows that the scarring effects of recessions can be permanent.

Thus, the clear winner of the recommended reforms, is the RBA, not the ordinary people struggling to find decent jobs to enable them to put a roof over their heads and two square meals on their tables.

Meanwhile, the RBA’s ideological anti-inflationary fight with a blunt interest rate tool benefits the big four banks. They are “tipped to rake in record $33 billion” in profits from rising interest rates when everyday Aussies and small businesses battle rising bankruptcies and job losses.

Anis Chowdhury is Adjunct Professor, School of Business, Western Sydney University. He held senior United Nations positions in the area of Economic and Social Affairs in New York and Bangkok.

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