Indigenous Capital for MankindOctober 30, 2009
MS & Haris Mumtaz – PKKH Editorial Team
“I shall watch with keenness the work of your Research Organization in evolving banking practices compatible with Islamic ideas of social and economic life. The economic system of the West has created almost insoluble problems for humanity and to many of us it appears that only a miracle can save it from disaster that is not facing the world. It has failed to do justice between man and man and to eradicate friction from the international field. On the contrary, it was largely responsible for the two world wars in the last half century. The Western world, in spite of its advantages, of mechanization and industrial efficiency is today in a worse mess than ever before in history. The adoption of Western economic theory and practice will not help us in achieving our goal of creating happy and contended people. We must work our destiny in our own way and present to the world an economic system based on true Islamic concept of equality of manhood and social justice. We will thereby be fulfilling our mission as Muslims and giving to humanity the message of peace which alone can save it and secure the welfare, happiness and prosperity of mankind”.
Quaid-e-Azam Muhammad Ali Jinnah’s speech on the inauguration of State Bank of Pakistan: 1st July, 1948
We the generation of the 20th century, are by-products of man made theories and models. We have grown up in a global society where survival is a matter of submitting to socialism and materialism. The history of the world as we know it, were the fearsome days of fascism and nazism that ended up taking many innocent lives. The only solution that has been given to us on the basis of history of world wars, current man-made challenges of economic recession and global terrorist threats is to accept “totalitarianism government” which is also known as “The New World Order”. Our minds have been carefully seasoned to believe that materialism is the only way to total satisfaction and hence people are just running madly after getting to the ‘financially-settled’, ‘socially-acceptable’ status. This is not the story of Pakistan or people of Pakistan only. This is a worldwide dilemma, where a handful of powerful elite who have somehow taken over the decision-making authority of the world are deciding our needs and wants and having a good laugh over it.
While this plan for taking over the world was in motion, somewhere in South Asia, a nation was blessed by the Almighty, where a so-called ‘secular’ and ‘non religious’ leader founded a piece of land for his people. A miraculous foundation it was and purely on the basis of a sound and historic religious ideology. He made it clear that the future structural composition of the country had to be built on exactly the same principles.
Quaid-e-Azam Muhammad Ali Jinnah, since independence, kept telling his people to follow religious laws in developing the economic structure of the country. How fortunate we were to have a leader like him warning us about the brutality of western economic model when majority of the world was happily complying and how unfortunate we became to not gain out of what he said and also to lose him just after a year from independence.
We now have a USD based economy, which is of course based on paper having no real wealth or value at its back. Money here is often created out of thin air since it subsequently gave foundations to fractional reserve system. The gold standard was some how made to vanish or more appropriately confiscated, because the elite doesn’t value paper pieces, they keep real wealth i.e. gold or simply natural resources.
The point to ponder here is that we had such a great start and today we are at the brink of an economic disaster. The Bloomberg article yesterday states; Pakistan’s central bank has brashly claimed once again that “The economy is showing a “gradual recovery”. The article further acknowledges that this recovery is due to the reliance on aid pledged by foreign institutions. The same story, different narrators.
So what is the Economic model of Pakistan? A few of you will be shocked but basically there is no concrete economic model in place to date! Its not just the illusory cycle that various governments repeat – make policies that benefit them in one way or the other, the policies made are only destined to be thrown in the bin by the next government coming up in five years who will then make new ones which benefit them. Has our country economics ever been for the betterment of the people or just an ego war between political parties?
Economics or ‘Deception’?
Economic concepts as we know them or learned in college or universities, i.e. the demand supply curve, the concept of GDP, GNP, per capita income etc. have fascinated many of us where we have always thought about them as very powerful indicators of life because they are directly linked with the wealth of a country. Now this is no surprise at all that these indicators are self made by humans to complicate things and present them in front of the public in such a way that they eventually end up blaming themselves for the economic breakdown. The real players of the game can create great economic depressions like 1907 or 1929, where they rob people from their money and fill their pockets and celebrate their success away. Who is the beneficiary of this all? We certainly are not the beneficiaries, but then who is?
After challenging the basis of economics as a subject, it’s essential now to come up with a reason for this claim. For this, lets discuss another important economic indicator, which is inflation. The definition of this familiar term “inflation” is:
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the price level rises, each unit of currency buys fewer goods and services; consequently, inflation is also an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy. A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.
If we look closely, the most important factor of inflation is not even mentioned in this definition in the first place. The decisive factor, which is hidden in this magical spell type definition of inflation, is “money supply”. On a simple terminology, those who control the money supply control inflation. According to their concept money should be injected in a society according to demand of the people. By injecting more money, its demand creates an opportunity for market forces (which are also in the control of money suppliers) to raise the prices of goods and services. Similarly by restricting the money supply suddenly people find themselves in a position where goods and services are expensive and they have not enough money to buy them. It’s a common practice of the market forces worldwide that they always keep the prices high, so if there is a short fall in money supply, the market forces are keen to keep their prices high, which results in inflating a society.
Furthermore, this inflation can end once the money supplier starts injecting money again in the society but this leads to another disaster. Since the market forces had kept the prices high for the masses to afford, money supply should be more than the previous attempt. As a result, money gets devalued and society finds itself in a position for another inflation attack. It’s a vicious cycle, an evil game of money manipulation which is a never-ending story, like a dark tunnel where there is no white dot at the end.
According to the official statement of Pakistan’s finance ministry, the inflation rate in 2009 is 21.1%, which has bounced back from 25.3% in 2008. Since this is an official statement so we all know that these figures will be relatively higher in reality. Our government is putting blame on us for this higher inflation rate as this is common practice elsewhere too. We hear, it is because of people who don’t pay taxes, those who don’t invest in PKR, the ever-growing population that is disastrous for the limited resources we have so on and so forth. It’s nothing but excuses since we have nothing to do with this planned current crisis.
Our leaders whose assets worth billion of dollars and are invested outside Pakistan are the real problem creators and such pity that the problem creators of this country have been named the solution providers. Our so-called democratically elected political party, which has given this country chaos in the name of hope and despotism in the name of democracy, is the one that’s been carefully placed to support this system.
We like every nation in the world where these fake economic models are implemented, support economy without even getting noticed or rewarded. There was a time when in the previous government our economy was supposedly booming. We were happy that our per capita income has increased and our spending power has expanded. It was a time of creating sub classes in middle class (like lower middle class and upper middle class). Yes those were the times when money was flowing smoothly in the society and with the help of FRS (Fractional Reserve System) fake money was getting created infinitely. Recall the time when banks had so much money that they were offering loans like donations in reality all they were offering were just a few numbers here and just a few there, not real money. The whole plan was at that time to increase the number of middle class families to support the economy and benefit the money suppliers and corporations. Now you must be wondering that what middle class families like us have to do with the economic stability and the answer lies in understanding the concept of “living an American Dream”.
The life of middle class families in U.S. is known as an American Dream. The middle class families are considered, money spenders or the ultimate buyers and same technique of increasing money supply has been used in Pakistan to make us spenders or the ultimate buyers in the society. In order to keep the economy running, money circulation is important and that can easily be achieved by increasing the spending power of the middle class economy so that instead on buying 100,000 air-conditioners in a fiscal year they end up buying 500,000. This particular example was quoted by the last president of Pakistan while addressing the nation and many of us believed it since we really had no other last resort to try.
Just recall those days of our fake economic boom where loan/lease was so much in practice that those who couldn’t afford a single car were enjoying two of the latest models, credit card sales were increased where a limit of 0.5 M was offered even on the first attempt. Notice that how many varieties of products are present in the market which are targeting the middle class economy from small items like tooth paste, shampoo, tea to the bigger items like air-conditioners, refrigerators, automobiles etc and just like money suppliers, the corporations are also taking advantage of the middle class economy’s money circulation. It’s a known fact that upper class or higher class will be investing outside Pakistan or will be spending money on international imported brands and items. Hence more middle class families, more benefit and control elite will ever have. More control of our lives in their hands meaning lesser in ours.
In reality what we witness nothing but beginning of a world wide economic collapse which is now inevitable and since we are used to this lifestyle which is dependent on fake money and loans everyone is concluding that these are just testing times for us and it will get better soon may be in 2010 or later but the point is simple and should be understandable by now. It can only get better with the increase in money supply which now we know has a limited effect in the short term and a bigger side-effect in the longer run.
Who’s to blame?
By now most of you reading these facts for the first time will be worried and thinking that there is no hope. Anyone would be, when gotten introduced to these realities for the first time. But this is just one small part of this evil economic system. There are other evil aspects of this system as well like the involvement of interest in economic model and institutes (Banks) and the concept of FRS (Fractional Reserve System) where fake money is created which results in devaluation and more inflation.
With this understanding it is clear that these factors are self-created by the global banking cartels and they are imposed on us through political governments where the ultimate goal will be to gain complete control over the world financially. This should not be a shock for you however that they have nearly achieved this goal and we ourselves have allowed it. Sitting in our comfortable homes being slaves to materialism, gaining temporary pleasures from it, is what our lives revolve around. And we have no one else to blame other than ourselves.
Firstly, because we have been ignorant all along to these realities, never digging in, never questioning but just accepting what is given to us.
Secondly, we are even ignorant to our religion or our Quaid’s ideology which gives the ideal alternate with an economic system that is perfect in fulfilling the dream of a happy and prosperous nation.
Like other developing countries, we are also dependent on IMF and World Bank for monetary injections for country’s development and other projects where the money supplier provides us money on interest and then the private companies from west again controlled by the same global elite enter our market, set themselves up to seize that money and take it out of our economy to complete the cycle. We end up with more debt and more financial crisis. This has been the story of Pakistan since 70s and there is no end to it as far as vision blurs.
Pakistan’s current external debt is over 50 Billion USD now and our government is still asking for more. Our current Finance minister congratulates the nation whenever a new loan approves from IMF or World Bank giving us an impression that this is the only way out. As a result we end up saying that Pakistan is a failed nation we are bound to live on the injections of IMF and World Bank. We really have forgotten to trust ourselves, our blessed land and our competencies and since we are forced to believe that we don’t have any. Let us ask ourselves once again, whose the Culprit? Yes its us as a nation! Cant we simply identify and rectify?
In these hard times its necessary to categorize these people and their evil plans. They are declaring it openly that their secret agenda of humanity-dominance is in final stages yet we are still not trying hard enough to classify the bad apples. Instead we have allowed the already identified bad apples of our political parties to sit on the most powerful positions of the country to take self benefiting decisions and to play with the dignity and honor of the country. All in front of our eyes.
Time is running out and there is no one who can make us understand that we have to revert back to our basic fundamentals and indigenous wealth taught to us by our religion. More depressing is that the people who are identifying these problems and providing solutions are getting banned on national news channels and they are now limited to the independent news sources over the internet. They grip us in petty issues to limit our minds and thoughts, confining them to the basic necessities of life, in turn ignoring the darkest future coming up if things don’t change.
These were the times about which our Quaid warned us some 60 odd years ago, such visionary man he was and such vague nation we have grown into. Yes there seems no hope because even now we are indifferent. Going to foreign embassies brazenly getting our immigrations ready so as to flee away when the real game plan starts without thinking about those that will be left behind, cursing the government but cursing us first to never really shout out when we could.
Today we at PKKH want to give you a reality check on who is to blame. Its no one but us. We request you to ask yourself why and start searching for answers because in order to get ourselves out of this muddle, someday despite of being so materialistic or individualistic we have to think as a nation, as Pakistanis.
A collective step is required to identify the culprits on ground, remove them from the positions they possess, construct a positive solution as a nation we repeat, implement it and secure it for the betterment of Pakistan and our upcoming generations. This is the only ultimate solution.