Our 'Chicago boys'
Hamzah Khan Published October 16, 2022
Updated about 2 hours ago
IN 1973, Chilean military dictator Augusto Pinochet rolled out neoliberal economic policies with the promise of reforming the economy. Backed by top minds from the influential University of Chicago’s School of Economics and their patriarch, Milton Friedman, Pinochet began ‘opening’ the economy by removing duties on imports, dismantling labour unions, eliminating price controls and privatising SOEs.
While international organisations hailed the aporophobic reforms as a miracle, the proletariat suffered due to historically high inflation and unemployment rates and worsening inequality. Thirty per cent of Chile’s wealth accumulated in the hands of 1pc while the masses were told that their suffering was a necessary evil to cure the ‘economic disease’. Friedman’s students who led the reforms and held key government positions were dubbed ‘the Chicago Boys’ and their methods described as ‘Shock Therapy’.
For Pakistanis, this sounds familiar. After the 1999 coup, Musharraf used the nation’s shock to carry out similar reforms. Backed by neoliberal international organisations, he attempted to ‘open’ Pakistan’s economy to the rest of the world by imposing a harsher ban on unions, lowering import duties, increasing incentives for foreign investors and privatising SOEs.
The economic reforms were led by Shaukat Aziz, a Citi Group executive in the US who came to Pakistan with 40 ‘financial experts’ to help revive the economy. Pakistan too had its own Chicago boys. While some outcomes of Musharraf’s economic policies may be debated, few can deny that the economy grew on the back of the working class while the rewards were reaped by the capitalists. Further, the methods of privatisation of SOEs opened doors for large-scale corruption as the state’s favourite investors plucked large enterprises at fire sale rates.
More:
https://www.dawn.com/news/1715294/our-chicago-boys
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