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Business Recorder
4 days ago
- Business
- Business Recorder
Policy issues in EFF programme — I
Pakistan's Extended Fund Facility (EFF) programme with International Monetary Fund (IMF), which as per one of its benchmarks also forms the basis of the upcoming federal budget, suffers serious flaws in terms of prescribed policy, and objectives. Together with the other recently negotiated Resilience and Sustainability Facility (RSF) programme, the EFF programme targets putting the country on a sustainable macroeconomic, economic growth, and green economy-based resilience against climate change and 'Pandemicene' phenomenon path. The problem is that for achieving these three objectives, it prescribes neoliberal and over-board monetary and fiscal austerity policies, which during the last four decades or so, have not only proved to be counter-productive to achieving the goals that have been stated above, but have also increased income inequality, and poverty, and diminished political voice, and overall weakened the quality of democracy. Moreover, as indicated, the upcoming federal budget, and provincial economic policies and budgets under the overall 'National Fiscal Pact' all need to continue to get aligned with these policy prescriptions under the EFF programme. While analysing the recently released 'IMF Country Report No. 25/109' there are a number of policy prescriptions that need to be pointed out to highlight the alignment of policies with neoliberal, over-board austerity framework, and how they are counter-productive to achieving the much-needed stated goals, especially in a world strongly punctuated by polycrisis, in particular the fast-unfolding climate change crisis, and the likely, and related 'Pandemicene' phenomenon. To start with, serious ongoing geopolitical tensions in the Middle East, Ukraine-Russia conflict, and heightened tensions between two nuclear-armed countries Pakistan and India, and the fast-increasing global warming, and likely risks of another pandemic are significant, posing significant downward risks to the EFF programme. For instance, with regard to global warming, according to the recently released 'WMO [World Meteorological Organization] global annual to decadal climate update 2025-2029' report, 'It is likely (86% chance) that global mean near-surface temperature will exceed 1.5°C above the 1850-1900 average levels for at least one year between 2025 and 2029. It is also likely (70% chance) that the 2025-2029 five-year mean will exceed 1.5°C above the 1850-1900 average.' Moreover, while global warming at the back of fast-unfolding climate change crisis continues to increase, with it the probability of the related 'Pandemicene' phenomenon likely also continues to rise. It is important to note that not much has improved in terms of preparedness mainly in terms of public health, making resilient aggregate supply chains, and making meaningfully supportive patent law/intellectual property rights (IPRs) under the current World Trade Organization (WTO) regime for better preparing against these existential threats. A significant cause of all of this continues to be neoliberal, and over-board austerity policies, which is shocking, given the lack of preparedness this policy had caused, as revealed by Covid-19 pandemic, and the global aggregate supply shock that struck in the wake of the pandemic. An August 15, 2024 'Foreign Affairs' magazine published article 'The world is not ready for the next pandemic' indicated – and the findings of which unfortunately still hold strong after almost a year since its publication, as not much has changed in terms of policy response where, for instance, no significant effort has been made by IMF in terms of its policy prescriptions in its programmes with recipient countries, including Pakistan –as follows: 'Less than five years after the outbreak of COVID-19, the world remains vulnerable to another pandemic. Over the past five months, a mutated strain of the H5N1 influenza virus detected in dairy cattle poses a potential risk for a pandemic-causing virus. Yet governments and international organizations have done far too little to prepare for such a scenario, despite the lessons they should have learned from the global battle with Covid-19.' Two more economic trends globally need to be understood to bring proper context to whatever little semblance of most probably short-term natured macroeconomic stability achieved domestically under the EFF programme, and that is, firstly, the negative impact of tariffs, geopolitical tensions, and climate change crisis on one hand, and the over-board monetary-, and fiscal austerity policies coming through their respective transmission pathways, and resulting in lower aggregate demand, reduced aggregate supply correspondingly, and overall low growth globally. For instance, the June 2025 report titled 'OECD [Organization of Economic Co-operation and Development] Economic Outlook: tackling uncertainty, reviving growth' highlighted the likely negative impact of tariffs imposed by US on global economic growth as 'The global outlook is becoming increasingly challenging. Substantial increases in barriers to trade, tighter financial conditions, weaker business and consumer confidence and heightened policy uncertainty will all have marked adverse effects on growth prospects if they persist. Higher trade costs, especially in countries raising tariffs, will also push up inflation, although their impact will be offset partially by weaker commodity prices. Global GDP growth is projected to slow from 3.3% in 2024 to 2.9% this year and in 2026…There are substantial risks to these projections, with the scale and duration of the expected downturn remaining highly uncertain.' Secondly, the windfall gains from a very low price of oil internationally – crude oil falling from the usual highs traditionally of around $100 per barrel to around $60 per barrel – in terms of producing positive impacts for balance of payments, in particular import payments, and imported-, and in turn, cost-push inflation all receiving a dent. A June 5, Bloomberg published article 'Oil stalls as traders weigh Saudi output push, summer demand' pointed out in this regard: 'Oil remained stuck near $65 a barrel as signs Saudi Arabia is seeking another big production increase at next month's OPEC+ meeting offset the outlook for summer demand.' Hence, macroeconomic stability achieved under the EFF programme has significant attribution from low oil prices, which is at best a transitory influence because it does not suit the interests of oil producers beyond the short-term like reportedly punishing certain members of OPEC+. A May 31, Bloomberg published article 'OPEC+ agrees on third oil supply surge despite Russia's qualms' pointed out in this regard: 'OPEC+ agreed to surge oil output for the third month in a row despite reservations from key member Russia, doubling down on a historic policy shift that has sent crude prices sinking.…Officials say the supply hikes reflect Saudi Arabia's desire to punish over-producing members like Kazakhstan and Iraq, recoup market share lost to US shale drillers and other rivals, and satisfy President Donald Trump's desire for cheaper oil. …Oil briefly crashed to a four-year low under $60 a barrel in April after the Organization of the Petroleum Exporting Countries and its allies first announced that they would bolster output by triple the scheduled amount. …While Brent futures have since recovered to trade near $64 a barrel, the International Monetary Fund estimates the Saudis need prices above $90 to cover the lavish spending plans of Crown Prince Mohammed bin Salman. The kingdom is contending with a soaring budget deficit, and has been forced to cut investment on flagship projects such as the futuristic city, Neom.' Sustained macroeconomic stability and economic growth on the contrary require strong non-neoliberal, non-austerity based institutional, organizational, and market reforms. Structural reforms being suggested – in line with the traditional neoliberal, and over-board austerity-based outlook of the IMF – like seeing government as mainly reacting to market failures, and regulating loosely and, in turn, the direction of reforms pushing towards reducing government's footprint, rather than rationalizing its role, which could mean overall increasing its footprint if need be. While there are arguments on both sides of greater role of private sector in running the economy, that view has continued to sideline, especially in the wake of the misgivings that were exposed by the Global Financial Crisis 2007/08, and then in the wake of the Covid pandemic in the shape of lack of resilience created over decades under the neoliberal assault, along with little institutional provisions being placed under trade rules; for instance, to push for provision of vaccines as a global public good. Quite shockingly, such lessons have not been reflected through EFF programme thinking that continues to be the flagbearer of neoliberal thinking. Also, it is no hidden fact that the success of the Scandinavian countries or China for instance has been at the back of a strong state sector protecting the rights of its demos from the profit-motive excesses of the private sector by public sector playing a significant role in market creation, through adopting counter-cyclical policy framework, and in pushing towards greater productive and allocative efficiencies. Yet, without making anywhere near similar effort by the public sector, both in terms of improved institutional capacity, and providing needed levels of investment, there is a strong emphasis under the EFF programme to push for greater privatization, whereby the demos will be left virtually at the whims of private sector, given lack of capacity of the government to regulate private sector, at the back of years of under capacitation through lack of investment in education in general, and by following an ever-increasing practice of outsourcing more technical aspects of service delivery. Hence, this begs the question as to how can a government that has not properly run a certain affair like railways, or steel mills, has the capacity, and knowledge to regulate the private sector intoboth efficiently running these affairs, and also not jeopardize public welfare aspects by over-emphasizing profit interests? —To be continued Copyright Business Recorder, 2025
Business Recorder
15-05-2025
- Business
- Business Recorder
Mission-oriented economic policy
There seems to be a lot of focus on the working of ministry of finance, which is not to say that its role is in any way less important than other sectors of the economy, yet given a world of polycrisis, including unwarranted belligerence from the country's eastern neighbour – which was met with overpowering but justifiably measured force by Pakistan – the role of economic policy, especially towards improving economic institutional quality – or ministries at the federal, and departments at the provincial level for subjects totally in provincial domain and underlying organizational, and market development, in particular in terms of governance and incentive structures, should serve as a much more strengthened second line of defense. Hence, economic policy-making on these lines is approached to provide much-needed enhanced support to further augment otherwise sound efforts of armed forces for ensuring national territorial independence. In addition, such economic policy is needed to improve protection against the existential threat of climate change crisis, and the related 'Pandemicene' phenomenon, the attainment of sustainable development goals, sustainably managing the debt distress, building-up ample foreign exchange reserves, managing inflation, reducing poverty and inequality, and strengthening democracy. Moreover, economic policy needs to be approached in a mission-oriented, purpose-driven way, where the best minds in economics globally, especially those who have a grip on the misgivings of neoliberal economics of the past four decades– for instance, but not limited to names like Mariana Mazzucato, Isabella M. Weber, Joseph E. Stiglitz, Clara Mattei – need to be brought together, and along with local policymakers a certain multi-year economic policy, and supportive budgetary framework needs to be developed. That such plans have required level of inclusivity for greater acumen, indigenous knowledge, international best practices, and ownership, all major political parties, all provinces, and multilateral/bilateral development partners are taken on board in these discussions. The fast-unfolding nature of climate change crisis, the related presence of high likelihood of the 'Pandemicene' phenomenon, and strengthening economy as a power house in support of national defense – which despite the economic weaknesses is very strong, something that speaks volumes of its excellent potential, and provides great opportunity to develop it further to heights that can propel it as second to none – is important to be done as a second defense to nation's territorial independence, for wellbeing of its citizens, for enhancing the quality of its democracy, and for improving its standing among economies globally. For one, a project-based approach needs to be nested in an overall programme-based approached with sector-level economic policy is formulated, and budgets – federal, and provincial – are evolved in an aligned way. Second, the civil service is replaced with 'one' public service, which represents all the economic sectors, and where performance-based streams are distinguished along the lines of 'fast-stream' and 'regular streams'. Underlying educational systems improved for better quality of labour-, and entrepreneurial segments, together with merit-, and qualitatively improved screening processes put in place for better graduation of human capital to decision-making hierarchy, and innovation-led economy. Third, broad economic policy contours thus reached as a consequence of this mission-oriented economic policy should see the interconnectedness of economic policy, with environmental, and epidemiological policy; not to mention a document reached on these lines, with profound consensus behind it will most likely, and at least in terms of its broad framework, have enough strong status as a convention to safeguard against decisions made on whims by changing political regimes over time. To illustrate some important motivational, and inspirational streaks that perhaps should define the manifestation of the mission-oriented nature of such a policy framework, the purpose-driven, mission-oriented spirit could be understood further from the herculean task of landing man on the moon in just one decade taken upon by former US President John F. Kennedy. Speaking at the Rice University on September 12, 1962, he said in this regard 'We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too.' We saw the success of the 'all of state' approach while fighting against India recently, and it is this approach that should be taken in economic policymaking with high ambitions, and strict timelines – small dents will not make needed headway, when what is needed is a one big push, and within-it number of small pushes from all sides are made, and all that is done in a challenging timeframe. The burden of past sub-optimal decisions with regard to economy, for instance, requires this. We need to challenge ourselves, because the economic problem at hand is a really challenging, made all the worse by lack of course correction – for instance, and very importantly not moving away enough from neoliberal policy mindset, and in many ways sadly, such policy framework continues to get perpetuated because it serves the extractive politico-economic institutional designs of the elites. That economic policy will need to imbibe the spirit of Franklin Delano Roosevelt's 'New Deal Policies' of a more responsible financial system, and a meaningfully caring, welfare-natured government, which will also have a strong grip in terms of its own capacity – and not majorly reliant on 'outsourcing', neither just there to fix market failures, or only exist as only a facilitator of private sector – to deliver safeguard the interests of its demos, through playing a significant role in regulation, and market creation as an equal partner to private sector. After more than four decades of rein of Neoliberalism, there is some shift away from it, and which includes pushing towards bringing protectionism in the US – with consensus on this policy on both sides of the political spectrum, and the only difference is the degree of intensity – for enhancing productivity of the agricultural and industrial sector. Pakistan should learn from this approach, and move away from Neoliberalism. That mission-oriented economic policy needs to be established as 'Green New Deal Policies' in view of the fast-unfolding of climate change crisis. In this, it has a lot to learn from China as a leader in renewable energy. Like Nordic countries, it has a meaningfully strong government sector on the lines indicated above. Among other important things to learn from China in the field of mission-oriented economic policy – given its exceptional path to success in reducing poverty in just a few decades – is its strong emphasis on escaping the price shock therapy, and instead adopting the 'dual-track' pricing framework for achieving sustainable macroeconomic stability, including efficiently-managing inflation, and laying an important basis for bringing fast-paced development of especially heavy industry, and enhancing the productivity of the agricultural sector in overall improving domestic production, and export competitiveness. So, while it is important to carry forward the projects under the China-Pakistan Economic Corridor (CPEC), it is also important to learn from the economic policy approach of China. Moreover, it needs to be pointed out that while India has excelled in terms of economic growth for a number of years now overall, that growth nonetheless has strong elements of neoliberal policy, which means that it has enhanced the gap between rich and poor, and has also weakened democracy in the process. On the contrary, China has adopted non-neoliberal policies – for instance, not going for outright privatization, and instead in most cases adopted innovative ways to keep government's check through coming up with mixed-ownership model for running state-owned enterprises, and also did not follow price 'shock therapy' policies, and also has meaningful capital controls, and reasonable level of significant protectionist policy – to make unprecedented dent to poverty as not seen before at least in recent human history, which should serve as important learning for Pakistan economic policy framework. Copyright Business Recorder, 2025
Business Recorder
09-05-2025
- Business
- Business Recorder
Rationalizing priorities for federal and provincial budgets
For a country to be among the top ten countries in the world in terms of population, and with more than 60 percent of its population below 30 years of age, to have such a low GDP per capita, or average income per person, and where one-third of the country falls below the poverty line, along with weak economic institutional quality is a strong reason for concern. In addition, the country is also among the top ten climate challenged countries, not to mention the high association of climate change with the 'Pandemicene' phenomenon. At the same time, the fast-unfolding climate change crisis has been producing strong negative consequences in the shape of heat waves, crop patterns and yields, and most importantly inducing poor air quality in terms of creating serious smog related issue all year long in many parts of the country, especially in winters, and where poor quality of petroleum, along with little forest cover being the main reasons for accentuating climate change in the first place. Also, overboard application of austerity – both in terms of fiscal- and monetary austerity – policies has been employed to curtail aggregate demand excessively, rather than removing the supply-side bottlenecks to control inflation, and also increase domestic production, exports, and employment levels. Higher exports, and better import-side administrative controls, in turn, help keep current account sustainable. Moreover, reined-in austerity policies enable better debt management, leave larger fiscal space mainly due to lower interest payments, which brings greater margin for government to introduce counter-cyclical policies. In an environment of low economic growth situation, which has been the case for Pakistan for some years now, means lowering taxes, and enhancing expenditures that overall help increase economic growth. Also, lower interest payment would also generate lesser need for downward revision of development expenditure in an overall effort to reach primary surplus, which being one of the conditionalities under the ongoing International Monetary Fund (IMF) programme. At the same time, foreign portfolio investment (FPI) is not lured with keeping interest rates on the higher side, but rather better focus is placed for improving aggregate supply, along with introducing reforms to improve economic institutional quality all providing greater positive impetus to exports, and enhancing attractiveness for more reliable, and employment-enhancing foreign direct investment (FDI). Hence, as a consequence of non-austerity and counter-cyclical policies on one hand, and greater administrative controls on imports, improved exports, and FDI levels on the other hand, produce strong positive impact on current account, enable bringing down tax burden and overall help reach higher, and more sustainable economic growth. In addition, higher tariffs situation feeding into an already difficult world of polycrisis call for adoption of a well-focused policy for protectionism so that essential-natured domestic industrial base is established on a strong footing. This needs to be done to improve aggregate supply so as to safeguard against both the supply chain related disruptions, and the increase in imported inflation at the back of price gouging as was seen in the wake of Covid pandemic, where likelihood of more pandemics is significant due to strong influence of climate change in enhancing likelihood of zoonotic diseases and, in turn, pandemics in the future. An August 15, 2024 Foreign Affairs article 'The World is not ready for the next pandemic' pointed out with regard to possible future pandemics as 'Less than five years after the outbreak of COVID-19, the world remains vulnerable to another pandemic. Over the past five months, a mutated strain of the H5N1 influenza virus detected in dairy cattle poses a potential risk for a pandemic-causing virus. Yet governments and international organizations have done far too little to prepare for such a scenario, despite the lessons they should have learned from the global battle with the COVID-19 crisis revealed the shortcomings of the global public health response system, many assumed that governments and international organizations would strive to fix the most obvious problems. Given the catastrophic human and economic costs of the pandemic, countries had a strong incentive to start spending heavily on developing new generations of more protective influenza and coronavirus vaccines, as well as to greatly expand global manufacturing and distribution networks. But this has not happened. At current funding levels, it will likely take a decade or longer to develop more effective and longer-lasting vaccines.' It is in this broader context that federal and provincial budgets are to be shaped. This whole budget context requires a consensus-based approach of both the levels of government, given many important subjects like health, education, environment, and agriculture stand transferred to the provinces under the 18th Constitutional amendment, along with meaningful enhancement of provincial share – which is close to 60 percent – in the divisible pool of resources going to provinces in the wake of the 7th National Finance Commission (NFC) award. The federal and provincial budgets need better focus and alignment with regard to the three fundamental pillars – economy, environment, and epidemiology. Moreover, budgets need to internalize a connected role of all three pillars in an era of polycrisis, a situation that also demands creating domestic resilience in terms of developing local industry in an overall effort to create a green, and resilient economy. Hence, for instance, smog is an important issue, and one of the main contributors to smog is consumption of low-grade petroleum products in the country. Hence, a budgeting needs to be made for replacing low-grade petroleum products with better grade oil. Moreover, changing the composition and orientation of public transport is important for the smog crisis, which means purchasing electronic buses, for instance, and improving the rail system. Moreover, better rationalized priorities of budgets require bringing overall improvement in the rail system for instance – and not making disproportionately high budgetary allocations for limited-natured projects like establishing high-speed rail, and bullet trains as announced recently by government of Punjab – for greater route coverage, catering for much more population, and creating needed support for transporting goods is much more consequential in dealing with climate change crisis, and also for instance, providing much-needed support for farmers in terms of transportation from farm to market. Similarly, budgets should be rationalized in catering to the financial needs of the organizational reform strategy of state-owned enterprises (SOEs) in an overall effort to improve upon the quality, and quantity of heavy industrial base, including the import substituting industry. Moreover, budgets should be formulated in a mission-oriented way for improving the educational, and health sectors both in terms of improving the lagging performance with regard to Sustainable Development Goals (SDGs), and also for creating better preparedness, and resilience of these sectors in an overall environment of climate change crisis, and 'Pandemicene' phenomenon. For example, preparedness of schools in terms of remote learning, in case of lockdown if another pandemic comes, and enhancing capacity to produce vaccines domestically, and creating depth in production capacity to better tailor research for a specific disease on which the pandemic is based. Another important focus of the budgets has to be on creating a basis for starting and sustaining a 'dual track' pricing framework, where just like China in the 1980s, and 1990s – when it was at a similar stage of economic development as Pakistan currently –prices of essential natured commodities of agriculture, and industrial intermediaries, for instance, and which are also in scarce supply, are kept at a level that allows better management of inflation, and also keeping exports competitive. Hence, a significant amount of subsidy allocation needs to be made in federal, and provincial budgets to sustain this much-needed 'dual track' pricing framework, coupled with a well-focused reform strategy, with adequate level of governance, and incentive structures for increasing the productive efficiency of these sectors, so that over time less support is needed to be provided in subsidy at the back of greater efficiency gains and better price discovery of such commodities. It also needs to be pointed out here that the current level of climate finance for instance is much lower than what is needed to dent the climate change crisis, especially much needed financial augmentation of budgets of developing countries, in particular of the highly climate change vulnerable countries like Pakistan. Copyright Business Recorder, 2025
Business Recorder
02-05-2025
- Business
- Business Recorder
Uncertainty, protectionism, and resilience
In the wake of the pandemic, and the fast-unfolding of the climate change crisis has basically brought into focus the cracks in the supply chains globally. Such cracks have been created at the back of neoliberal policy, which made a comeback over the last four decades or so. Previously, similar policies were being practiced before the Bretton Woods system, and the New Deal policies, as so-called 'sound economics'. Under both 'sound economics' and neoliberal policies, division of labour, and comparative advantage have been practiced by the powerful countries to unduly gain the advantage of trade in their favour. In doing so, they have made the world firstly divided into the 'first world', and the rest, not to mention the particular coming into being of the 'third world', which was non-existent before the era of colonization, since countries in terms of per capita income were not significantly different from each other as such. To maintain this order after colonization, neoliberal policies were introduced, although after some delay caused by New Deal policies. Hence, policies were sugar-coated in a way that efficiency was increasing in global trade, while lack of regulation of markets under neoliberal policies meant rising inequalities, since higher living standards were only for the rich few. That stoked uncertainty over the years, especially under largely free movement of capital that played havoc with any long-term planning for increasing resilience, as it mostly worked on the principle of short-term profit signals. Moreover, lack of any deep domestic industrial base, including import substituting industry in developing countries in particular, meant that increasing frequency of financial crises – which was a rarity before the perpetuation of the neoliberal-minded globalization, and domestic policy, which favoured largely unregulated capital – and the existential threat of climate change crisis, and the associated 'Pandemicene' phenomenon lay bare the fragility of global supply chains in a world of polycrisis and highly sub-optimal preparedness of countries during these times, as was highlighted amply during the Covid pandemic. From agricultural commodities to medical equipment to vaccines, the neoliberal model of globalization came down crashing, especially as the application of 'disaster capitalism' saw price gouging. Hence, neoliberalism has increased uncertainty, both on account of lack of market creation that had a lot more profit fairness, and one that internalized the need for creating resilience, and not just mainly follow profit signals. In addition, practice of ultra-nationalism, for instance, as evidenced from deep practice of 'vaccine nationalism', has exposed the underlying fragile nature of globalization that propounded division of labour, and comparative advantage as the most important principle to be upheld. Hence, practice of neoliberal policies as a miscalculation at best – although economic history of the last few centuries glaringly brings out intentional practice of these so called 'sound economics' policies to make a few countries, and some vested groups within countries rich while the rest were pushed to sub-optimal economic development – has continued to perpetuate uncertainty. While it is important as a sufficient condition to shift domestic policy focus away from Neoliberalism, it is necessary to create some reasonable level of protectionism by countries to bring down uncertainty, especially in these times of polycrisis, and also to safeguard against the lopsided practice of globalization that makes it difficult for the 'third world' to decrease the distance between countries in terms of per capita income on one hand, and also to create much-needed greater sustainable macroeconomic stability, and economic growth, by reducing the impact of external shocks. Hence, the recent drastic steps of US President Donald Trump with regard to increasing tariffs could have been taken in terms of nuanced, and much more focused policy, which were more in line with the tariff enhancement related policies of the Biden administration. Barring the pace and scope of application of greater tariffs to build local industry this, in turn, highlights a virtual across-the-board consensus in US political parties – that is both on the left, and right – for the need to have more protectionist policies. An April 10, 'The Boston Globe' published article 'Tariffs are dumb… right?' pointed out in this regard the following: 'One of the most important developments in American politics over the last decade – easy to forget amid all the outrage over Trump's trade war – is the bipartisan turn to last president, Democrat Joe Biden, made substantial use of tariffs. And while he wasn't out to remake the global economic order – his levies were far more targeted than what we're seeing now – he did share Trump's desire to revive American a desire that animates much of Washington. And it would be a mistake to discount its staying power.' Moreover, the same article rightly pointed out a much-needed case in favour of practice of carefully planned, well-targeted protectionism, which should all the more be a reference point of the developing countries, given the colonizers, the developed world of today, has already drawn a lot of advantage in terms of economic development by protectionism on steroids, and lopsidedness by mainly unilaterally adopting protectionism for themselves, and principles of so-called 'sound economics' for the colonizers. There is a need to bring in sensible level of protectionism, one that allows creating a much more sustainable environment for domestic production, labour conditions, and reaping the advantages of trade for everyone globally. The article highlighted in this regard: 'Tariffs may look ill-advised today. But they could very well be with us question is: Can they be deployed intelligently – or are they always a bad idea?…First, you levy tariffs on imports from the Americans and the Brits in a bid to carve out a domestic market for your own burgeoning automakers and steel mills. Then you subsidize these up-and-coming firms in the hope of turning them into genuine competitors on the world American policy makers, this sort of meddling in the free market long felt unfair — artificial support, they said, for foreign competitors aiming to grab some of our global market in recent years, they've started to see a place for industrial policy right here in the United States. …The pandemic demonstrated how fragile global supply chains can be. And with climate change upon us, large-scale disruptions will only be more frequent. Building up some industrial muscle is an important hedge against instability.' Also, there is a lot more hue and cry being raised at the negative consequences of tariffs on trade volumes and economic growth, which are not well-founded, as it is important to correct the basis for trade and growth, by putting them on more resilient, and equality creating tendencies for the world, especially in a world of polycrisis. This, in turn, will lower the level of uncertainty, which apart from addressing economic issues in both developing and developed world, will also help check the rising tendency of 'economic migrants' in developed countries, and not by whipping up Xenophobia by ultra-nationalist parties in developed countries, which leads to hate mongering, and also wrongly mainstreams fringe political parties, lowering, in turn, the overall level of democracy. Yet, all the above seems to have been missed by multilateral institution like International Monetary Fund (IMF), when in its most recent April edition of its flagship report 'World Economic Outlook' (WEO), its economic counsellor, Pierre-Olivier Gourinchas in the foreword to the Report – although same message overall flows throughout the Report –apparently does not see on one hand the positive role a focused level of protectionism can play in reducing uncertainty and in enhancing resilience in countries, and, on the other hand, that the neoliberal-minded economic context has been unravelled by sub-optimal outcomes it has produced in creating frequent boom-bust cycles in developing countries in particular, and justified disgruntlement of labour almost everywhere, more specifically. Also missed is the likely positive impact of focused practice of protectionism in reducing inequality, both within and among countries, and the further advantageous consequence it can have in reducing economic migration, and Xenophobia, and in overall strengthening democracy. Sadly, the thought process of the economic counsellor is something which is in line with the thinking of the multilateral institutions in general, including the IMF, not to mention the 'Chicago boys'-styled policymakers in many countries, who also uphold the same thinking. In this regard, the economic counsellor indicated in the foreword to the Report that 'Shortly after the January 2025 WEO Update, the United States announced multiple waves of tariffs on major trading partners and critical sectors, culminating on April 2 with a set of nearly universal tariffs. While many of the scheduled tariff increases are on hold for now, the combination of measures and countermeasures has hiked US and global tariff rates to centennial highs. However, the context for such increases is very different. Unlike in the previous century, the global economy is now characterized by a high degree of economic and financial integration, with supply chains and financial flows crisscrossing the world, whose potential unwinding could constitute a major source of economic common denominator, however, is that tariffs are a negative supply shock for the economy imposing them, as resources are reallocated toward the production of noncompetitive goods, with a resulting loss of aggregate productivity, lower activity, and higher production costs and prices. Moreover, in the medium term, by reducing competition, tariffs increase the market power of domestic producers, decrease incentives to innovate, and create multiple opportunities for rent seeking. For trading partners, tariffs constitute mostly a negative external demand shock, driving foreign customers away from their products, even if some countries could benefit from the rerouting of trade flows. These effects are magnified in the presence of modern complex global supply chains. Most traded goods are intermediate inputs that traverse countries multiple times before their transformation into final products. Sectoral disruptions could propagate up and down the global input-output network in ways with potentially large multiplier effects, just as we saw during the pandemic.' Hence, it can be seen that the thinking above is virtually reflective of that of an ostrich mentality – head in the sand, as for instance can be seen through the poor and rigid contextualization, and very limited understanding of protectionism, not to mention lack of internalization of an otherwise increasingly negative fallout of neoliberal policies during the last few decades, especially in the wake of Global Financial Crisis 2007-08, and the Covid pandemic. This is because instead of increasing competition, upholding principles of comparative advantage, division of labour, efficiency, and market fundamentalism have virtually out-competed developing countries, and not allowed them to close the gap of economic development with developed countries, and has kept supply chains fragile, suffering also from sub-optimal allocation efficiencies; for instance, more investments went into face creams and the likes, instead of needed investments going into making vaccines during the last two decades before the pandemic, during which time coronavirus reappeared a number of times as an epidemic. Also, frequent balance of payments issues – at the back of mainly developing countries suffering from an environment of increasing external shocks due to practice of neoliberal economics that upheld market fundamentalism, and unwarranted extent of neoliberal-minded globalization – have been witnessed by developing countries, which has also contributed to significantly increasing global debt, along with greater economic migration from developing countries to developed countries in search of better working conditions. All this has increased uncertainty and diminished resilience, not to mention stoking ultra-nationalism in developed countries in particular. Also, what good is the rule-based system of world trade when it is not creating a balanced environment, since the underlying rules are sub-optimal to start with, favouring supply chains for instance, which are very fragile in the shape of highly spread out production process globally, is not much mindful of working conditions, and is not ready for a world of polycrisis, especially given such crises include existential threats of climate change, and related 'Pandemicene' phenomenon. Moreover, it needs to be understood by developed countries and multilateral institutions that relying on developing countries to continue to produce labour-intensive intermediaries for developed countries primarily – to overall achieve so-called efficiency but at the cost of paying labour cheaply, and in getting production for low-level labour working conditions, especially as the existential threat of climate change crisis continues to unfold rather quickly in a dramatic sense in terms of more frequency and greater intensity of climate disasters – is increasingly becoming unreliable. This is because, developing countries having a low share in overall global trade, and being stuck with neoliberal policies – under the influence of 'Chicago boys'-styled domestic policymakers, and brow-beating multilateral institutions through their loan/programme conditionalities – their economies are becoming all the more vulnerable, given their low level of economic institutional quality traditionally, overall low level of climate financing, and neoliberal-minded global trade policy. Also, this has further lowered the overall working conditions of labour, and which has become one of the main reasons behind increase in 'economic migrants' in developed countries, as more and more of the labour force heads for developed countries for better working conditions. While they bridge the gaps in the labour force of developed countries, where domestic labour is mostly into service sectors, this nonetheless creates disgruntlement among domestic labour, which generally are crowded out in the face of more efficient migrating labour. There is no fault of the migrating labour, but rather it has to do with the neoliberal institutional design, being perpetuated by the already rich and powerful that have oriented domestic, and global economy only for greater profits. In that sense, shifting away from neoliberal policies, including bringing back reasonable level of protectionism is needed for reducing uncertainty, for instance by creating greater manufacturing at home that absorbs local labour in both developed and developing countries and, in turn, also helps create greater resilience in the face of external shocks, especially in a world of polycrisis. Copyright Business Recorder, 2025
Yahoo
11-03-2025
- Health
- Yahoo
You don't want to throw a measles party
Five years after COVID-19 was declared a pandemic, we seem to have a lot more contagious disease, not less. Some have called it the "Plague Years," or as journalist Ed Yong once described it, we might be living in the Pandemicene, 'an era defined by viruses' power over us.' The various conquered or almost conquered diseases making a comeback in these late years of COVID include tuberculosis, polio, syphilis, even dysentery. Also back is the world's most infectious disease: measles. In the first decade of tracking measles cases and deaths after it became a reportable disease in 1912, an average of 6,000 Americans died from the disease each year. But a vaccine for measles (now given as MMR, a three-in-one shot that also protects against rubella and mumps), has been available in the U.S. since 1963, when it was received with joy and relief. Measles was declared eliminated (meaning no local spread in a 12-month period) from the United States as of 2000. It was the largest country to have achieved this milestone. Worldwide, vaccination has prevented an estimated 57 million deaths since 2000. But cases have surged since the COVID pandemic. Some 107,500 people around the world died from measles in 2023 (and it was worse the year before); most of them were children under five. As the Centers for Disease Control and Prevention reports, 'Because measles is highly infectious, failures of routine immunization services to reach children are rapidly revealed by the occurrence of outbreaks primarily affecting unvaccinated children.' And indeed, in some areas, vaccination is becoming less fashionable. In a recent outbreak, lack of vaccination resulted in more than 200 cases so far, most concentrated in West Texas and New Mexico, with two deaths: a Texas child and a New Mexico adult, marking the first measles deaths in the U.S. in a decade. Neither victim had the vaccine (and, mind you, even vaccinated people still have a small risk of infection: the vaccine protects 95 percent of children who receive one dose of it and in 99 percent of those who receive the second dose, but this means breakthrough infections are still possible). The outbreak is still expanding. If not shots, why not host a version of the 1970s chicken pox party? These social gatherings were designed to deliberately sicken children to "get it over with" in the days before vaccines existed. Though there has been no confirmed cases of this happening in the recent outbreak, Texas health officials have warned against the practice (which was documented in New York during a 2018-19 outbreak, contributing to rapid spread) and urged patients to get vaccinated. Some folks are definitely listening, with some Texas cities running out of MMR vaccines due to sudden increased demand. While those behind the anti-vaccine movement have been busy reminding us that only a few children die of measles — tell that to their bereaved parents — they fail to point out a few vital things: One, that death is far from the only bad outcome to worry about. Two, that the claim that 'I had measles as a kid and I'm fine' is a flagrant example of survivorship bias. Sadly, dead men, and dead children, tell no tales. 'It's kind of a challenge working on measles,' Dr. Natasha Crowcroft told Salon in a video interview from Geneva, where she works as senior technical adviser (specializing in measles and rubella control) at the World Health Organization. 'Because everyone thinks 'it's just measles'. And there's that 'oh, I had it and I was fine' kind of narrative you hear.' Crowcroft says one of the reasons it's difficult is because "actually, most people are fine. It's a bit like driving a car compared to flying in a plane. Most people who drive a car are fine, and most people who fly in a plane are fine. But everyone worries about the plane, because if something goes wrong, it goes really wrong … So everyone gets measles if you don't have the vaccine, and most people are fine. But because everyone gets measles these rarer effects actually end up being quite common.' And indeed, in order to keep measles out of a community the vaccination rate in that community needs to stay above 95%. We're not there anymore. Of all human-infecting pathogens, measles has the highest basic reproduction number; that is, the average number of people who will be infected by a single case in a freely circulating population. For every measles case, 12-18 other people will be infected with the disease. About enough for a party. 'The reality is, we were in a much better place in 2019 than we are today,' Dr. Maimuna Majumder, a computational epidemiologist and faculty member at Harvard Medical School and Boston Children's Hospital, told Salon in an email. 'Even nationally, our vaccination rates have dropped below what is required for herd immunity against measles. This means that we have even more pockets of undervaccinated kids than we did in 2019 — and where people are unvaccinated, disease can spread. We're seeing it happen right now as the Texas outbreak spreads beyond state lines. Given this, vaccine clinics (including mobile units that meet people where they are and make it easy to get vaccinated) are urgently needed.' Our lack of preparedness is striking. Sofi Papamarko, now in her forties, is a rare person to have gotten measles in the 1980s, but before a late resurgence in the disease that hit the United States, quickly infecting 55,622 Americans between 1989 and 1991. At the age of 14, then, Papamarko contracted measles from a spell at summer camp north of Toronto. No one thought much of the mysterious rash she came down with a week or two after returning home. So she attended a wedding and her brother's graduation. 'We didn't know what it was until getting a letter from public health that said I may have been exposed to red measles from X date to X date at the name of the camp I attended,' Papamarko told Salon. "So it was pretty obvious at that point and when we went back to the doctor, he said I was a textbook case and he just had no idea because he'd never seen a case of measles in his entire career." In fact, while there must be many older survivors of childhood measles around, most people with expertise in the disease in North America would have been much older than the children of the '40s and '50s… meaning that there are virtually no doctors practicing exclusively in the United States who have direct experience with measles at all. They'll all have plenty of experience giving MMR vaccines, though — and that's the happy reason for their lack of measles recognition skills. 'I'm lucky in that I didn't suffer any long-term ill effects,' Papamarko said. 'But I also don't think we were at all knowledgeable about how potentially dangerous the illness is. The internet didn't exist back then and the doctors we saw were pretty uninformed about it.' So let's talk about what happens after you send your kid to their measles party. The first dose of a measles vaccine is usually given after your baby is one year of age. So while you may have chosen to let your unvaccinated child get measles, you may be choosing for others as well, including families who have children too young to get vaccinated even if they desperately want the shot. It's worth noting, if you live in an area with known outbreaks or if you are traveling with your baby, that the vaccine can be given as young as six months, so you should talk to your pediatrician about whether early vaccination might be wise. Some research suggests that it works but that its effectiveness, or perhaps effectiveness of some of the multiple ways in which children are protected following vaccination, may not last as long in kids who are vaccinated earlier than normal. Pneumonia is what most often sends a child with measles to hospital. One in 20 children with measles may get pneumonia, so the odds are high that someone at that measles party will get it. Pneumonia can be mild or it can be severe, and it can have long-term effects for a child, such as chronic lung disease, lung function deficits, and increased risk of adult asthma, chronic obstructive pulmonary disease unrelated to smoking, and bronchiectasis. And it can result in death: in fact, it's the most common way measles kills young children. But it is far from the only threat. 'Blindness is a very real threat to children with measles,' writes the American Academy of Ophthalmology. Measles was once the leading cause of childhood blindness, and there are several different ways in which it can harm vision. It can also cause temporary or partial but long-term vision loss. And retinitis, which can cause temporary or permanent vision loss during infection, can also appear years after the measles infection. You may have heard anti-vaccine claims that treatment with vitamin A is all you really need. This might come from official medical recommendations to provide a specific dose of vitamin A in cases of severe measles to reduce the risk of vision loss, which can be greater if the patient is malnourished or has a vitamin A deficiency. But a 2021 study, perhaps the first to look at whether there's any reason to supplement vitamin A in young, hospitalized measles patients in higher-income countries where deficiency and malnutrition are less likely, found that it didn't help reduce the risk of any complications of measles and it didn't change the clinical course of the disease. Given that, and given the variety of risks measles infection poses for your sight, it would be far wiser not to get it in the first place. Vitamin A is also not effective at preventing measles infection, and it can be dangerous to take in large amounts. One in ten measles infections results in an ear infection, often accompanied by bacterial sepsis, and can result in hearing loss. Most children infected with measles are under the age of five. This coincides with the key developmental period for acquiring speech and language. As a result, of some 112 children with measles-induced hearing loss in one retrospective study, about 84% were not capable of speech. We've been here before, sort of. From 1989 to 1991, there was a resurgence of measles in the United States. During that time, 55,622 Americans came down with the disease. (For a variety of reasons, there used to be major disparities between vaccination rates of white vs non-white children, with rates 18% higher in white children in 1970. As a result, during that epidemic, non-white children were at four to seven times higher risk of infection and so at higher risk of long-term effects. Major targeted as well as universal policy initiatives were required to narrow that gap, and censoring words or banning concepts relating to race or ethnicity from epidemiological analyses and funding applications risks widening it again.) The 1989 to '91 resurgence unfortunately gave us an opportunity to remember the terrible pain measles causes to families and communities. Swelling of the brain, resulting in death or damage that could involve any part of it, is perhaps the most frightening thing that measles can do to your child. It can occur as part of the initial disease, it can be an immune reaction that occurs just afterwards, or it can occur years down the line. Famously, Olivia, the daughter of author Roald Dahl, died of encephalitis that occurred after she seemed to have almost recovered from a bout with the disease. He has written movingly of the way a bright and active child lost her faculties, becoming drowsy and then unable to do basic things: 'I was sitting on her bed showing her how to fashion little animals out of colored pipe-cleaners, and when it came to her turn to make one herself, I noticed that her fingers and her mind were not working together and she couldn't do anything.' Within an hour she was unconscious, and 12 hours later she was dead. Although Olivia died, other children may survive encephalitis, ending up with brain damage that can be severe or quite subtle, but life-changing for all that. 'The person may seem like they function relatively normally, but they can really struggle with everyday activities,' Crowcroft explained to Salon. 'I'm speaking to somebody who, for example, was still having trouble figuring out the order that you had to do things in. So she knew that to brush her teeth, you need a toothbrush and toothpaste and water, and you go to the bathroom, and you'd have the sequence of events. But she was having trouble figuring out what to do in what order.' Issues child survivors of measles can carry into adult life range from similar difficulties with executive function and organizing daily life to personality problems, aggression or complete inability to function. 'It may be less obvious, but still it can change the trajectory of where their life is going to end up,' Crowcroft said. The worst long-term complication of measles is a form of delayed encephalitis called subacute sclerosing panencephalitis (SSPE). It's a central nervous system disorder that only strikes seven to ten years after a measles infection, especially when the child was under two years old when they had that infection. It's almost always fatal. 'Often it's hard to diagnose because it comes on as a progressive neurological problem,' Crowcroft explained. "A child who has seizures, has trouble walking, seems to be losing concentration, and no one's really sure what's going on, and it's not until they do a spinal tap and find the evidence of measles infection in the cerebrospinal fluid that the diagnosis is made. So that can take some time because — well, again, it goes back to where we don't have any measles around and everyone's vaccinated and everyone's forgotten about it.' So the child gets measles (perhaps at the local measles party), gets red spots, recovers … and after seven years or perhaps a decade of loving and caring for and living with that child, they begin to lose their faculties and, other than a small percentage of cases in which spontaneous remission occurs, the vast majority die in a particularly cruel way. Families may never recover from the suffering of watching their child die from SPPE. There seems to be no relationship between how bad the initial case of measles is and whether the child later gets SSPE, making survival and "being fine" afterwards a poor measure of whether that measles party is a good idea. And disturbingly, a 2017 California study suggests that SSPE is far more common than was previously believed. Of the cases reported following the measles resurgence that ended in 1991, one in every 609 children under the age of 12 months at the time they contracted measles eventually came down with SSPE. As the authors of that study conclude, 'SSPE cases in California occurred at a high rate among unvaccinated children, particularly those infected during infancy … SSPE demonstrates the high human cost of 'natural' measles immunity.' There's also an adult-onset form of the disease that is again usually fatal, although more spontaneous remission seems to occur, especially if the adult was unusually young when they contracted measles. Like other measles complications, SSPE cannot be caused by the MMR or measles vaccine. 'Events promoting intentional exposure to measles, such as 'measles parties,' can overwhelm local public health and medical services while endangering the lives and health of many community members,' warned Dr. Theresa Chapple-McGruder, associate professor of health policy and management at the University of Pittsburgh School of Public Health. In an email interview with Salon, she noted that the extreme infectiousness and long infectious period of the disease means isolation periods are necessary and are very long: 21 days for someone who's just been exposed to measles but who lacks immunity. The alternative is returning to the days when one in 4 children was hospitalized every year due to measles. Chapple-McGruder says that Americans have forgotten to celebrate successes, like the roughly 12,500 children's lives saved in the past 25 years thanks to vaccination. The result: 'Many have no frame of reference as to what measles can do to a child, family or community. We are seeing this firsthand with what is happening in Texas. I saw it firsthand during the Chicagoland measles outbreak of 2024,' Chapple-McGruder recalled. And then there's another long-term effect of measles: it can wipe out your immune system's memory, putting kids who've survived even a mild case at risk of far more frequent and severe cases of the entire Petri dish of infections in which kids are immersed at daycare and school by wiping out the antibodies they've previously acquired. Perhaps it should be obvious that if more people get more infections because measles has caused their immune systems to lose their memory of the pathogens they need to fight, some proportion of that greater number of people will eventually get really sick. But even if you are aware of that, abstractly, it can be hard to really grasp the implications. So yet another long-term effect might come as a surprise: you're more likely to die of infection — any infection — if you've previously had measles. Getting vaccinated has long been known to reduce the amount of other infections a child gets. But looking at mortality data, it looks like the immune system is significantly disabled against other infections for up to three and perhaps up to five years, a period in which your child is more likely to die. So once you've been to your measles party, it might be wise to hold off on that chicken pox party. Or any party, really. Or at least wear a mask. Mind you, there's another possible reason for lowered child death rates among vaccinated children, and that's if the measles vaccine gives your child some kind of protection that goes beyond its goal of preventing measles infection. This is called a non-specific beneficial effect. There's significant evidence to support this: for example, a generally lowered death rate (what the experts call a child survival benefit) from measles vaccination even in places where measles doesn't exist. And children who are vaccinated with the MMR vaccine are less likely to be hospitalized with any infection. This effect is stronger in kids who are vaccinated at younger ages. Who wouldn't line up to get this child survival benefit for their kids?
