An Outlook of Pakistan’s Economic History: 1947-2021
Since independence, the economy of Pakistan has always been in vicissitudes situations. If we look at it from the economic perspective, the historical background of the country seems so satisfying, as compared to the current situations. Even though during initial years of the partition the country faced lot of hardships. But during Gen. Ayyub Khan’s era the country has managed 5.82% average growth rate from 1958-1969. However, signing a major benchmark in the history, this period was followed by a bad luck decade of Bhutto’s government and Gen. Zia’s liberal government. The post Zia’s period has faced lot of political turmoil which resulted the military dictate of Gen. Musharraf. Though the economy had shown some remarkable trends in Gen. Musharraf’s period, but it did not work out for the shrinking economic situations of Pakistan.
Soon after the partition Pakistan had started to lay its foundations. Meanwhile, the country did not get the proper distribution of resources the assets were divided in the ration of 17 to India and 5 to Pakistan, bulk of the irrigated land was in Pakistan and major canal system, the military division was 65 to 35 percent in the favor of India. During that time, Pakistan was a dominant underdeveloped agrarian with a little share of services, manufacturing, and infrastructure, backed with millions of refuges. Therefore, it was not possible to attain a higher level of growth in that period. However, the Korean war of 1952 made mercantile class to raise, which helped to attain higher gains and attempts were made to structure the structure of bureaucracy.
Meanwhile, from 1958/68 Pakistan had laid a major benchmark in its history of development. In this period the reigns of the country were in the hands of General Ayyub. The economy was growing 3 times faster than other countries of the South Asia. The growth rates exceeded 20 percent per annum and the agricultural and industrial sector was developing significantly. There was massive growth in the industrial and agriculture sector experienced first time after the partition. The manufacturing sector grew by 17% and agriculture grew by 6%. This decade of development applied a bureaucratic supported capitalism. However, some people criticize that his non- liberal policies of bureaucratic capitalism model has increased income inequality and this rapid development with the exploitation of east Pakistan and labor class ended with a political disability during the initial years of 1970’s, which resulted the partition of east Pakistan.
In 1970’s, Zulifqar Ali Bhutto came into power with his slogan of “Rotti, Kapra and Makaan”. This decade is often stated as the decade of bed luck, which is mainly supported by the worldwide recession in exports, the partition of East Pakistan and floods of 1974 and locust attacks. Moreover, Bhutto was mainly devoted to the socialist economy, and just because of that this period is critics by his failure. In his period, he nationalized the financial institutions- like banks and insurance sector and some basic industries. His nationalization policies became the major reason for the loss of industrial units and the confidence of investors to invest in Pakistan. Meanwhile, his polices created misallocation of resources and the overall growth was declined, form 6.8% per annum in 1960’s to 4.8% per annum in 1970’s. Also, even though he introduced the land reforms, some criticize that his nationalization policies were feudal led, which were introduced to clip the wings of industrialist class that has grown tremendously in 1960’s.
General Zia took the reins of the country in 1977. During that time, the USA was trying to pull Soviet-Union back from Afghanistan. Pakistan had taken a part in that, which ended up with the Islamization of Zia, which he done to increase his political support. At the same time, bulk of foreign aid was received by standing on the front line against the Soviet Union. Moreover, the increasing trends of industrial growth can be seen in his period, which were the result of investment in Bhutto’s era. Hence, GDP grew at the average rate of 6.6% per annum in General Zia’s period.
The post Zia’s era led to the structural adjustment programs. In this era most of the policies were supported by IMF programs. Pakistan was first introduced to the structural adjustment programs during General Zia’s regime in 1982. However, after receiving the first SAP loan, the military government discontinued these foreign loans when Pakistan received 3.2 billion US dollars owing to Afghan-Soviet war. But in the late 1980’s because of decline in the industrial sector, which was a major source of income, the country faced twin fiscal and exchange deficit accompanied with the reduction foreign aid. This compelled the government to look forward to the Bretton Wood Institutions for support. As a result, the World Bank and IMF impelled Pakistan to decrease the public spending and increase taxes, which eventually resulted in the cuts of developmental projects.
Moreover, in 1998 Pakistan has tested its first successful nuclear device. Soon G-8 had imposed numerous sanctions on it -like many counties have cut foreign aid, remittances were slowed down and defense sales were terminated. This made devastating effects on economy. Later, on 9th of September 2001, two planes hit the World Trade Center. Because Pakistan was a best possible strategic location in the South Asia and US felt a dire need of it for the war on terrorism.
No doubt that the post 9/11 developments became possible on the account of 9/11. The post 9/11 period had shown some remarkable trends in Musharraf’s regime. The rate of investment grew by 17.2% of GDP to 23.0% from 2001-2007, domestic debt was decreased from 17.8% to 16.1% of GDP in the same period, which is almost 30% of the total GDP, much of bilateral and unilateral foreign aid were sent to Pakistan, i.e., in 2002 $11 billion were sent to Pakistan. In 2003-4 it was claimed that Pakistan has finally ended up from calamitous decade of 1990s. However, Pakistan has seen some tremendous growth in Musharraf’s era. But it can be criticized that his roaring era was based on the deceptive foundations of investment and consumer-led growth. No doubt, it was a sort-term growth, and the thing lacking was a long-run strategy to send that foreign aid into the productive sectors.
Furthermore, the post Musharraf period was recorded as a dire period for Pakistan. In 2007/8 growth rate started shrinking by 37%, which was hit by numerous factors like the Lawyers’ movement which was the outcome of lawyers, when Musharraf ousted the chief justice of Pakistan, the death of Benazir Bhutto, the care takers government’s role was also critical, the global financial crisis and the Laal masjid incident. Meanwhile, it was PPP’s govt. from 2008/13, which is often criticized as a worst government in the history, because of its management. So, for that, Pakistan had already faced lot turmoil, but it was again hit by disastrous floods of 2010, which swept much of the infrastructure and agricultural land. As a result, the growth rates fell; inflation rate went to double digits, FDI fell and so did the tax to GDP ratio.
Many claim that the PML-N’s government 2013/18 left the economy stronger, bigger and batter. However, it was exclusively based on only growth rates, which seems quite satisfying if we look at statistics and are supported by IMF loan schemes. In this period, the country has faced massive current account deficit, a sharp decline in exports while imports remained flat, the agriculture sector was ignored, large public debt and there was lack of public sector reforms.
PTI came into power in 2018. The growth rate in FY18 was 5.84. In a mean time just after a year the whole world was hit by a catastrophe –COVID-19, which has put the world economy into its knees. It has also largely hit the Pakistan and made its economy to shrink. The growth rates started to decline. In FY19 the growth rate declined to 0.99 and in FY20 it was recorded 0.38.
Is the Western Moral Triumph still possible? Of Jeffrey Sachs and Edges of Globalization
“It feels like I imagine 1912 to feel” stated US Columbia Professor Jeffrey Sachs during an extraordinary zoom conference on the 8th of March. The discussion about the current geopolitical state with Geneva participants, concepted and hosted by professor Anis H. Bajrektarevic, was held on an emblematic day, the International Women’s Day, celebrating female achievements in social, cultural and political fields. As Professor Sachs reminded, to remember this occasion is of the highly importance to maintain human rights at the core of our engagements in a froth and difficult geopolitical situation.
Jeffrey David Sachs, born November 5, 1954 is a US economist, academic, public policy analyst, and former director of the Columbia’s Earth Institute, where he holds the title of university professor. He is known for his work on sustainable development, economic development, and the fight to end poverty.
Currently, Sachs is Director of the Centre for Sustainable Development at Columbia University and President of the UN SD Solutions Network. He is an SDG Advocate for UN Sec-General Antonio Guterres on the Sustainable Development Goals (SDGs), a set of 17 global goals adopted at a UN summit meeting in September 2015. Previously, from 2001 to 2018, Sachs served as Special Advisor to the UN Secretary General, and held the same position under the previous UN Secretary-General Ban Ki-moon and prior to 2016 a similar advisory position related to the earlier Millennium Development Goals (MDGs), eight internationally sanctioned objectives to reduce extreme poverty, hunger and disease by 2015. In connection with the MDGs, he had first been appointed special adviser to the UN Secretary-General in 2002 during the term of Kofi Annan.
Sachs is co-founder and chief strategist of Millennium Promise Alliance, a nonprofit organization dedicated to ending extreme poverty and hunger. From 2002 to 2006, he was director of the UN Millennium Projects network on MDGs. He is co-editor of the World Happiness Report (co-authored with Helliwell and Layard). In 2010, he became a commissioner for the Broadband Commission for Sustainable Development (developmental effects of broadband in international policy).
For the past three decades, Sachs extensively advised numerous governments in Europe, MENA, and Afro-Asia. He has written number of books and received several awards. He has been criticized for his views on economics, the origin of Covid-19, war in Ukraine and decoupling from China.
During his mesmerizing talk and exchange with the participants, professor Sachs evoked the biased diametrically opposed media information conveyed by the West and Russia, reinforcing the dangerous and froth environment of an escalating and unpredictable war. The honorable guest spoke about the conflict’s real debuts, “33 years ago at the cold war’s sundown under Gorbachev’s leadership and the promise by the US and Germany that NATO would not expand east, as well as the rise of the US as the ultimate superpower”. Giving the admiring audience anecdotes of his career, Jeffrey Sachs explained how the conflict is wrongly portrayed aiming for an Orwellian amnesia, and how things could have been handled strategically differently and with more honesty and empathy, ending in a dissimilar outcome. His principal host, prof. Anis asked him: “Jeff, is the moral triumph of the (political) west still possible?”
He lankly criticized the change of US policy towards China since 2015, labeling the country as an enemy as its economy rose, creating a dangerous environment that leaves no place for diplomacy. Professor shared his worries towards the tensions and the fear of an escalating hot war that could easily lead to a nuclear conflict. To Professor Sachs the aggressive US’ hegemonic policy towards China is senseless and dangerous and weakening diplomacy. “All China wants is to be respected and all America wants is to be told how smart they are”- he stated. He insisted on the fact that we need an open new world where there is no US or Europe leading but a world of acknowledgement, history, justice, appreciation and hope.
Throughout the discussions, the esteemed Professor criticized the lack of communication between Biden and Putin and the huge irresponsibility that he places mostly on the US side. He insisted on the importance of communicating in diplomacy as well as with each other in day to day lives. Further on, distinguished guest engaged audience in a constructive critic of the western positions in contemporary world of slobalisation and attempts of decoupling from the Sino world through the accelerated spiral of violent rhetoric’s and wargames. Finally, he made a reference on the recent hearing at the UN Security Council related to the so-called North Stream issue.
The inspiring yet easy-going talk evolved in a friendly exchange of questions and remarks between Professor Sachs and the participants. Content intensive, inspiring reflective and farsighted, yet amicable and family-like atmosphere with a direct, personal access to the notable guest deeply impressed all. As the event came to an end, with the univocal wish of organizing global teaching, a global seminar to educate people and especially young people on important topics (including human rights and liberties), Professor Anis Bajrektarevic closed the meeting by inviting Professor Sachs to make time on his very busy agenda to visit Geneva soon to continue the discussion, proposition that was kindly welcomed and agreed to.
The Impact of Crypto-Assets on Governments and the International Community: A Forecast for 2035
As the financial and technological sphere rapidly develops, it will increasingly impact the entire globe, including global governance structures, and the traditional system of international law. Particularly pressing is in the domain of crypto-assets, which contain huge resources and is simultaneously developing with a disregard for state borders. Hence, this sphere will inevitably place the international community in a position where adequate and exhaustive international regulation for this new phenomenon and its processes will be required. With this, a new financial landscape may prove to be a starting point for such significant changes. Thus, it seems imperative to consider the coming financial transformations that will shape the global agenda by 2035. This will also further bolster the need for effective crypto-asset regulation, which can inspire the world to alter the traditional system of international law.
Realities of International Law
In his book, “World Order”, Henry A. Kissinger, an American diplomat, Nobel Peace Prize laureate, and Honorary Doctor of the Diplomatic Academy of the Russian Foreign Ministry noted that “the political and the economic organizations of the world are at odds with each other. The international economic system has become global, while the political structure of the world has remained based on the nation-state” . Today, this quote appears to be at odds with the reality of the world’s situation; the global environmental agenda has been comprehensively promoted, and many economic restrictions, including sanctions, have already been imposed. Additionally, a possible conflict scenario has been looming in the Asia-Pacific region. Certainly, all of these factors may negatively impact global economic growth. So, what exactly makes the world economic system truly be of “global character”?
At the same time, economic globalization has acquired new forms and has not ceased. Among other things, this is associated with the widespread use of cryptocurrencies and other crypto-assets, that completely disregard the notion of state borders, and function without any proper regulation. Moreover, the development of crypto-assets is not harmful to the environment. The only exception here are PoW- cryptocurrency mining schemes which generally use a lot of electricity, and tend be of “dirty” origin. This, however, is not because of a lack of technology, but rather because of human greed. If we prioritize the global environmental agenda, and omit certain harmful points in crypto-assets, then this new trend has great prospects.
There are two factors for why current international regulation on crypto-assets is often characterized by its legal flexibility. The first reason points to the dominance of “soft” law as a source for crypto-regulation. Some features of “soft” law include accepted formalities during the law-making process, its consultive nature, and special legal techniques, all of which enables the international community not only to develop regulations on a fundamentally new phenomena, but also to do so in a quick manner. However, “soft” regulation is far from comprehensive, as it is developed exclusively in the most concerning and troubling areas. The reason for such legal flexibility is due to the specificities of the international bodies that essentially shape the global financial landscape. For instance, the Financial Stability Board (FSB), the Bank for International Settlements (BIS), the Basel Committee on Banking Supervision (BCBS), the Financial Action Task Force (FATF), the Wolfsberg Group and others all have a hand in the global finance system. How? These groups focus on developing global “standards” with an atypical composition of representatives (or members): central banks (normally, not public authorities), finance ministries, financial intelligence units, global financial institutions, etc.
If to discuss the current international regulation on crypto-assets, G20 leaders appear to show their support for some “soft-law” approaches. This additionally ensures the implementation of these “soft-law” norms into a national legal space as well as predetermines the direction of the further development of international regulation. For example, the commitment to the Financial Action Task Force (FAFT) approaches in the G20 Osaka Leaders’ Declaration was consolidated as of June 29, 2019. In other words, the fundamentally new model of shaping international regulation through “soft” laws have become less consultative — not only de facto but also de jure.
Evolution of the Financial Sovereignty
The World Economic Forum predicts that by 2025, 10 per cent of the world’s GDP will be saved through blockchain technology . Simultaneously, as calculated by the Financial Stability Board in early 2022, the capitalization of the crypto-assets’ market was $2.6 trillion. However, the economic data here is secondary. The emergence of crypto-assets, mainly cryptocurrencies, coincided with the crystallization of the “New Man”, and other social factors. Society and business communities are simply tired of excessive financial controls and the constant need to abide by unprecedented sanctions regimes. In the end, these artificial restrictions directly affect the speed of transactions and the amount of fees.
Today, the spread of cryptocurrencies poses a challenge to the monopoly of central banks (or in some cases governments) on money emissions, thus challenging individual and state financial sovereignty. Although it is hard to see a breach of sovereign state equality formulated by the norms of international law, these processes make us seriously reconsider the role of the state (as we understand the concept of “state” today) in the emerging world order. Traditional ideas that claim central banks (or governments) have the exclusive right to issue money are not only entrenched in national laws; with a few caveats, it is adopted as an axiom in international law. On the one hand, only central bank digital currencies (CBDC) are viewed as digital money that holds direct liability with central banks [the liability has exclusively legal content, but not economic — author’s note]. On the other hand, national currencies are recognized by the Bank for International Settlements as being more reliable than, for example, stablecoins. Notably, the rule applies regardless of real economic properties of national currencies.
The abovementioned provisions may also be viewed in a different light. Under international law, “non-state” currencies have been recognized, whatever they may be, even without the same legal guarantees and with high-risk coefficients (when used by financial institutions).
By 2035, the formation of the global digital currency market will be completed. Despite the legal status of the national currency as the only legal tender, within the horizon of this forecast, central banks will enter into a real competition with other “issuers”, including non-state ones. Therefore, central banks will be additionally obliged to improve the attractiveness of national currencies. For instance, states may reduce regulatory costs and market commissions, increase the speed, and improve the quality of transactions. Perhaps some central banks will take more drastic measures, such as establishing mathematically sound emission mechanisms.
Prologue to the Supranational Financial Market Governance
Conceptual incompleteness of international crypto-asset regulation is also associated with the absence of adequate protections from fraud and other forms of unfair behavior in emerging financial markets. Although the concern has been directly expressed by the international community, the issue is currently in a legal void. As practice demonstrates, the real legal, intelligence, and investigative capabilities of states in combating crypto-asset scams are severely limited. This due to the fact that crypto-asset scams are often committed by transnational organized crime, making investigations very complicated, and attempts to find stolen property not always successful. Unfortunately, the issue does not lie solely in the theory of law; it has a great practical impact on many people around the world. Of course, there are forensic groups of global consulting companies that can assist in finding stolen assets. However, it does not diminish the vulnerability of states and the international community to transnational organized crime.
By 2035, humanity will realize the need to form a fundamentally new architecture for financial market governance, particularly by setting up supranational bodies with a special legal status. A body, such as a global “crypto-financial police” can be established, which will have the legal capacity to search for and return stolen crypto-assets and to bring perpetrators to justice. The organization may have representative offices in the most vital states and financial centers, cooperate with bar associations, financial institutions, professionals and global players in the market of forensic solutions. Procedurally, the organization’s findings may be assimilated to documents prepared by national law enforcement agencies.
Presumably by 2027–2030, another body may be set up within the Bank for International Settlements. Driven by macroprudential objectives, the body would be in charge of ongoing and exhaustive analyses of financial indicators related to stablecoins. Perhaps in the future, the body’s expertise may be broadened by other crypto-assets and particular cryptocurrencies. The results would be derived from “soft law” structures and provisions, including the legal methodology for classification of crypto-assets with different risk ratios. Today, if an international financial institution (i.e. a bank) carries out transactions with stablecoins then risk ratio should be determined based on an assessment of stabilization mechanism of the coin. The assessment should be carried out by the bank in relation to each stablecoin. Moreover, criteria for the assessment have yet to be legally adopted (and the newest version is open for discussion). On the contrary, the risk ratio for a tokenized form of traditional assets is at least equivalent to the baseline. In the case of other crypto-assets (i.e. Bitcoin), transactions are allowed but with a high-risk level (the fixed weight is an astronomical amount of 1.250 %).
Potentially, the approach for other crypto-assets will be amended in an analogous manner with stablecoins. Each significant crypto-asset will be analyzed in detail, and the level of risk will be assigned in accordance with the chosen economic indicators. Probably, in order to ensure a uniform application of standards, financial institutions will find it more efficient to transfer analytical functions or parts thereof to a supranational level. As opposed to a “crypto-financial police”, the set-up of a prudential body may not be widely announced. For example, it may take the form of an experts’ association — without formally representing states. Nevertheless, the recommendations and conclusions of the body will have a high standing in the world of finance.
Sustainability of the State-Centric Model of Financial Security
The absolute consensus point, with respect to crypto-assets, is the concern about anti-money laundering (AML) risks. Moreover, there is a somewhat unusual approach to this area in international practice. The assessment is not solely linked to the failure of finding any effective solutions to global problems at the national level. It would derive from the provisions of international law.
In developing AML/KYC regulations on crypto-assets, the international community has used a model that works successfully in terms of traditional types of assets, yet fails to account for “virtual” property features. To ensure financial security, the international community believed that a “virtual asset” could be identified as an anchor point. Simultaneously, in accordance to FATF, the concept of a “virtual asset” includes completely different types of assets: for instance, this includes cryptocurrencies (used mainly for payment purposes), some non-fungible tokens, or NFT (used for investment and hedonistic purposes), or ICO-tokens (used exclusively for investment purposes). Clearly, the purpose of transactions directly influences its frequency and nature, the number of intermediaries, actual asset values, validity of the value, etc.
Currently, FATF experts themselves have realized that their approach is not fully adapted to the new types of property. There are a number of practical issues that are impossible to resolve at this point. We might see the consequences of these problems in calls for a broader interpretation of international regulations at the discretion of states; one example is FATF’s legal position on decentralized finance (DeFi). FATF points out that “a DeFi application (i.e. the software program) is not a Virtual Asset Service Provider [a VASP is an analogue of the conventional financial institution for the application of AML/KYC standards in the crypto-sphere — author’s note] under the FATF standards… however, creators, owners and operators or some other persons who maintain control or sufficient influence in the DeFi arrangements, even if those arrangements seem decentralized, may fall under the FATF definition of a VASP where they are providing or actively facilitating VASP services”. Although there are clear VASP criteria in international law, FATF calls on states to shape their own vision of the concept. These new standards call for at least a certain number of concepts to be established at the national legal level (including “maintenance of control”, “sufficient influence”, and “semblance of being decentralized”, and so on). It is clear that this provision infringes upon the universal spirit of international law and significantly reduces its effectiveness.
Meanwhile, according to the Financial Times, US$100 billion was locked up in DeFi-mechanisms globally (by the end of 2021). This figure is an economic confirmation of the foregoing conclusions.
Furthermore, by 2027–2030, a new DeFi-mechanisms will emerge with artificial intelligence being a key player in them. This phenomenon may be referred to as the dark DeFi, the deep DeFi, or the AI-DeFi. The mechanism will continuously analyze financial institutions’ and VASP’s compliance policies, suspicious transactions’ methodology, market data, and sanctions’ lists. Therefore, it will allow transactions to circumvent restraints on a modest fee. It is difficult for the author to speculate on how the Deep DeFi may be regulated under the current legal paradigm.
By 2035, the current architecture of international financial security based on national financial intelligence units, or national FIUs (FinCEN in US, UK FIU (NCA) in UK, FIA in BVI, TRACFIN in France, MROS in Switzerland, SICCFIN in Monaco, Rosfinmonitoring in Russia, JFIU in Hong Kong, AMLB (PBC) in China, and so on) may be transformed into something unprecedented and new. While national FIUs will undoubtedly continue to develop key functions, their international importance as a basis of the global AML/KYC system could be significantly diminished.
There is an extremely low probability that in 2035 humanity will enter a state of “worldwide financial anarchy”. In the scenario, humanity would reflect on inefficiencies in the traditional structure of international law, including many standards related to AML/KYC and sanctions. Even today, these restrictions have an adverse effect on the cost and speed of transactions and, consequently, on the professional and personal capacities of human beings. Thus, this can lead humankind to massively reject “state” money in favor of decentralized currencies. If we develop this idea, AML/KYC requirements will be drastically reduced, and the powers of national FIUs will mainly be transferred to global companies.
To Adapt or to Fall in Oblivion?
Without a doubt, international law is at the heart of international relations today. It reflects the consensus of international powers, and in this sense, constitutes the future agenda. Disregarding the profound changes taking place in today’s international law seems unacceptable. Furthermore, this indifference can encourage individuals to reconsider the effectiveness and timeliness of some institutions.
As global processes become more complicated and the epicenter of international tension moves towards its climax, for future reasons, states should be interested in adhering to all international obligations, including non-conventional obligations. It would be in the interest of states to complete the national legal regime on crypto-assets and synchronize it with the spirit of the time.
If we assume this article proves accurate, all these tendencies are twofold in nature. Aforementioned tendencies present both existential threats and unparalleled opportunities, not only for Russia but also its allies. In this sense, the development of the global digital market will adversely affect the dominance of certain global currencies (particularly taking into account the burden of mass sanctions). On the other hand, it will offer tremendous opportunities to states that have yet to obtain their optimal preferences from the previous wave of globalization.
From our partner RIAC
1. Kissinger, Henry. World Order. L.: Penguin Books. 2015.
2. Schwab, Klaus. The Fourth Industrial Revolution. World Economic Forum. 2016.
Yanis Varoufakis in Geneva:Blowing the Cloud Capitalism
“First time in history we all contribute to accumulation of a cloud capitalism, which became the production of a behavioral modification.” Yanis Varoufakis, Geneva, February 2023
His Excellency Yanis Varoufakis is a world renewed academic economist and politician, former finance minister of Greece, who was trying to renegotiate national depth within EU. He was a cofounder of an international grassroots movement, DiEM25, campaigning for the revival of democracy in Europe. He is an author of the international bestsellers, such as Adults in the Room, And the Weak Suffer What They Must?, The Global Minotaur and others. After teaching for many years in United States, Great Britain, and Australia, he is currently a professor of economics at the University of Athens and Member of the Hellenic Parliament. He is also an ideologist with millions of fans worldwide, and passionate free time motorbiker.
He is one of the contemporary masterminds, writing a history on contemporary global financial and economic issues. Issues tackled are de-dollarization, (non)sustainable deficit, cloud capitalism, modern colonialism, behavioral modification, techno-feudalism, financialization, moral hazard, global austerity, etc.
Ioannis “Yanis” Varoufakis was born in Athens in Greece. As a son of revolutionary successful father Georgios and a beautiful activist for women’s rights and politician Eleni, this boy was growing into a thoughtful young man. He was only six years old when the military coup d’état of April 1967 took place. Varoufakis later said that the military junta showed him a “sense of what it means to be both unfree and, at once, convinced that the possibilities for progress and improvement are endless”.
Later on an “initial urge was to study physics” but he decided that “the lingua franca of political discourse was economics”. He studied mathematics and economics at the University of Birmingham and the University of Essex, where he obtained a PhD. He then taught economics in the United Kingdom and at the University of Sydney, before returning to Greece in 2000 to teach at the University of Athens.
As a Greek economist, politician and academic, he led Greek Ministry of Finance from January to July 2015 under Prime Minister Alexis Cipras and negotiations with Greece’s creditors during the government-debt crisis. However, he failed to reach an agreement with the European troika (European Commission, European Central Bank, and International Monetary Fund) leading to the bailout referendum. The referendum rejected the troika bailout terms and the day afterwards Varoufakis resigned as Minister of Finance.
In February 2016, he launched the Democracy in Europe Movement 2025(DiEM25) and subsequently backed a Remain vote in the 2016 United Kingdom European Union membership referendum. In March 2018, as a former member of Syriza, he founded MeRA25, the “electoral wing” of DiEM25 in Greece, a left-wing political party. In the next legislative elections it was the sixth most voted-for party, amassing nine parliamentary seats, with Varoufakis himself returning to the Hellenic Parliament.
Since the beginning of his political career, Varoufakis appears in numerous debates, lectures and interviews worldwide, describing himself as a “libertarian Marxist”.
His collection of excellent and world popular Books is something to be admired: Talking to My Daughter is The Sunday Times Bestseller, in which Varoufakis writes to his daughter to teach her the hazards of capitalism. ‘Why is there so much inequality?’ asked Xenia to her father. Taking from memories of her childhood and a variety of well-known tales – from Oedipus and Faust to Frankenstein and The Matrix – Varoufakis turns Talking To My Daughter into an enjoyable and engaging read, without ever shying from the harder truths. He explains everything you need to know to understand why economics is the most important drama of our times. In answering his daughter’s simple questions, he disentangles our troubling world with remarkable clarity and child-like honesty, as well as inspiring us to make it a better one. His expression is a beginning of a new language that everyone can understand, where punctures myth after myth.
So, as in our Chatham house debates under the auspices of the Executive Program so uniquely designed and concepted by professor Anis H. Bajrektarevic the format is very simply: Professor adds the flair to the cradle of diplomacy, city of Geneva, and its historic chateau as our exclusive venue place – the top format of guests to discuss the top topics of the day, for one whole day.
Among thoroughly elaborated and explained items on that special day were: financial crisis (global minotaur, origins and cyclicality), techno-feudalism and regression of human society, economic and political architecture of Europe and the world, preventing the collapse of a contemporary global society as the last historical civilization. Excellency Vroufakis remaked what is an alternative history of our future and what can and should be done better.
Humanity is facing multiple crises, we are driving towards de-globalization, poverty and debts are back to developing societies, a new cold war between the biggest powers is on the way, climate changes are irreversible, international institutions and relations shall be reinvented, some societies are recently facing natural disasters – our speaker stated.
Is the EU construct still relevant and prevalent within its original role? What about the crises such as Ukraine war, life in post-pandemic local societies, depending on eurozone economic centers, digitalization and cyber terrorism? And America’s hegemony and a new cold war with China on the other side? How to prevent corporations cannibalizing the political sphere and turn your dreams – in which capital and labor no longer struggle against each other – into reality? Why the West is taking Democracy for granted…while capitalism is obviously eating it? Are we intellectually and spiritually developed enough to accept the so-called authentic democracy in an extremely unauthentic modern world? And start investing into much needed green transition? And at last but not least, what is your view about the importance of a gender balance in 21st Century?
It was immensely beneficial to learn first-hand about the 2023 world vision, and further in the next decades to prevent collapse of a contemporary global society as the last historical civilization? What is an alternative history of our future, that we can do better? The floor was his. And the rest could be our vision.
Attacked, but sharper
During last weeks his excellency Yanis Varoufakis was campaigning against poverty, inequality, armament. Thus, he has obviously again provoked more fanatism and intolerance from his opponents, reported as five masked assailants. A short while ago, he was the victim of a cowardly attack. He was at an Athens restaurant with DiEM25 members from all over Europe, when a small group of thugs stormed the place and got attacked.
Being a worldwide exposed fighter for human rights and recovering from the recent riot he sent his gratitude with a clear message: “We are not afraid, we will not retreat, and we will not flinch in the face of intimidation. MERA25 Greece and DiEM25 will continue to face up to lies and speak up for common people in Greece. Let us please stay focused: We are mourning the 57 victims of rail privatization. We support the spontaneous youth rallies, the greatest hope that Greece can change. See you at the demonstrations.”
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Air Balloon and U.S.-China Relations
The story of the Chinese Automatic Drifting Balloon (ADB) violating the U.S. airspace in late January–early February 2023 will be...
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