Micro-macro dilemma

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The science, if science it be of economics is divided firmly into micro and macroeconomics. Of late, there has been a considerable amount of action on the macroeconomics aspect and the IMF and the World Bank as well as the ADB are all rooting for the variables that constitute that aspect of our economic life.

To say the least these variables that are to be modified are growth, inflation and employment with deficit finances thrown in for the containment of two out of three variables listed above. The view is that all three cannot go in one direction. Then to add to the woes of the developing world the international agencies add conditionalities that are difficult to implement. Not only difficult to implement but in the disastrous zone. So far as the internal morality and equity in these international agencies is concerned, the recent case of the IMF chief is a clear indication of the low level of morality not only of the sexual kind but of all kinds, for one cannot be a cheat in one thing and honest in anything.

One of the representatives in Pakistan for a long time was having a concubine for eight long years till he was exposed by a friend of mine for he was giving out loans and making sure that the concubine was provided consultancy. Guess no names. So what can one expect from victorious nations of the Second World War who demand that the IMF chief be either from Europe or from the US. All they have done is to get Pakistan and the rest of the developing world into penury and dependence. Samir Amin s Dependency Theory is a tipof that iceberg.

The macro aspect of an economy can never be managed. The management of the micro economics is what matters. The micro policies eventually end up in the correction of the macroeconomics. Et al those who talk of macroeconomics make themselves available to the country s eminence so that they can be questioned on the reasons for doing what they did. I tell you they will say because the IMF or the WB or the ADB said so. They play the defunct economists role so well that they play on the fears of the policy-makers. I was witness to the times in 1994-96 when every penny that could be brought in was hailed a major victory. It has been done since then. No government wants to have its hands tied because of money resource weaknesses. That is the fallacy that has to be rethought. Money became a fetish with modern governments because of the nature of economic activities followed.

Before the international agencies came in to all this development was more satisfactory and there was none of this hiatus about development funds majority of which are wasted. Let me give you some of the examples that have been glorified by these agencies only because it gives them more authority over countries like ours. It is a funny ploy. The machinery is over-invoiced to the extent that the entrepreneur does not have to pay anything. The legacy of Papanek and the legacy of cheating that he started by saying that all Pakistan needs is a hundred robber barons. Those robber barons have become thieves of all kinds. You can see it in the working of the industrial sector.

I have been scouring the newspapers for the investment decisions that have taken place in an economy that does not deserve this kind of cleverness. The over-invoicing is horrendous. The policy requirements were different. We have gone into devolution to the provinces but we have not devolved anything to the public, to the entrepreneurs of this country. We have all kinds of supercilious ministers - past and present - who will not work enough in their respective sector and are merely there for siphoning off resources. Want me to give you a scorecard.

Smoke will emerge from your ears. Micro is easier to handle. Macro is all hay wire and hairy fairy. The industrial sector and the services sector constitute the importance that they deserve and nothing more and nothing less. So how will all this end if steps are not taken to control measures. The LPG is a victim for a long time. Today a former federal minister and his son were sentenced by the courts in Balochistan on charges of abduction and given along with others sentence for life. Other ministers will not agree but are all of them honest? Have they taken their responsibility seriously and made no money or have not used the resources unfairly. Want me to give you a check-list?

As I made my way to the corridors of power recently I saw suave gentlemen walking the same route. While I waited they despite an appointment these people just entered the room here I was supposed to go. I was in my national dress while they were in Armani suits and probably Bali shoes. Why cannot they go to the ordinary Pakistani tailor and an ordinary Pakistani shoe shop and purchase the local produce. Had they done it on their own money fine but these were spoils of corrupt practices. Little episodes provide a considerable amount of information. On the motorway I was checking on the tea when in swept an oldish woman trying to look young and a younger woman trying to look old but both expensively dressed.

Their tone was vulgar and they announced what they wanted and the loudness of their voices could have travelled half a kilometer. What followed was unbelievable and not possible to state. Words escape me. I looked out and these ladies [for want of a better word] were travelling in a Merck 500 and shiny and brand new. The number plate was of Sindh [Karachi number] and the personal were also from the same area but with a distinctive toe of a particular ethnic group. How could they have the money that kind of money?

Micro economists must have spun off more social welfare than macro economists. The social corporate responsibility is missing. How does one incorporate social responsibility in the micro sector? If the selection has been immoral then how is morality and sensitivity to be brought in? Economists, pseudo economists and vulgar economists will tell the politicians all kinds of fibs and make-believe game will continue. The ego of the politician will be played. The desire levels will be enhanced. Sociologists and psychologists in the developing countries do not play any part but in the developed countries these are part and parcel of the entire system of analysis. In micro terms what will be the effect on the psyche of the ids where all this bombardment is taking place?

Courtesy: Business Recorder

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