China in the 1980s was quite similar to Pakistan in terms of economic orientation – mainly an agriculture sector, and one that was trying to industrialize, while keeping macroeconomic imbalance by relying more on domestic resources, and not taking much the route of going for aid, but rather enhancing exports, and by keeping inflation stable, low, and in check. In that sense, China is different from Pakistan, and Russia, for instance, was that unlike these countries, it did not take the route of price ‘shock therapy’.

Instead, it liberalized prices in a gradual manner, and with disaggregate approach towards commodities, by adopting ‘dual-track’ pricing mechanism, under which price control was loosened at the margins, whereby prices of commodities were left to market to decide, which were in excess supply, and were not that strategically important for either food security, or as raw materials for industry. On the other hand, commodities that were scarce in supply, or were strategically significant for domestic production, and exports, and for achieving food security, were kept under price controls.

This meant procuring commodities, for example, strategically important agricultural commodities for smooth, and predictable supply chain, for both controlling inflation by government increasing supply where, and when needed, and for achieving competitiveness in both local industry – as larger profits were virtually de-linked from exploitative market practices, and under a policy of good incentive structures were rightly made dependent on enhancing productivity, and efficiency techniques – and in exports.

Taking a loan from International Monetary Fund (IMF) is one thing, but it does not mean subscribing to price ‘shock therapy’ for commodities and markets that deal with essential commodities like wheat, both in terms of food security, and also for exports, something, which the government is unfortunately apparently doing. Policy under the influence of neoliberal-minded ‘Chicago boys’-styled policymakers even outside of the Neoliberalism-influenced IMF programmes has resulted in basically subscribing to shock therapy, and lack of price controls. Here, instead of improving the process, by refining the underlying institutional and organizational framework, the very importance of practicing procurement, and controlling prices for both agricultural, and non-agricultural commodities was wrongly blamed by seeing them as among main sources of the twin deficit.

Deep policy thinking by the country required – and still requires – adopting ‘non-shock therapy’ policy in the first place, like adopting ‘dual-track’ pricing, and taking a gradualist approach. For instance, one of the things China did was to liberalize prices along the coastal region in an overall effort to open up economy in a gradual way so that people go through minimum economic distress, and that too for commodities, which were in excess supply or strategically insignificant, or both.

This approach Pakistan could have tried, and can still move towards, instead of adopting virtually wholesale, price shock approach, which overall it remains committed to under the most vociferous neoliberal assault the country has gone through since the late 1980s, and that is both inside and outside of the IMF programmes. Hence, for instance, the government instead of increasing the sphere of price ‘shock therapy’ in agriculture sector, wherein it stopped procuring wheat from farmers, and not even announcing a price floor in this regard, should have gone the other way, and included in its policy of procuring wheat, many other agricultural commodities like rice,........

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