Pakistan's Political and Economic Development

The Pakistan Peoples Party won free election in 1970 and formed the government as the ruling party. This was the first taste of a civilian government since 1958. His socialist agenda was intended to nationalize the industries that had achieved tremendous growth rates in the period of Ayub Khan, and close the income gap between class structures and change the economic structure of Pakistan which had increasingly become elitist. He was not very successful in implementing many of his policies and the country as a whole did worse than it did in the epoch of Ayub Khan. He tried to radicalize the capitalist orientated development of the previous decade, while trying to maintain the integrity and power of the feudal aristocracy, and at the same time appealing to the peasants and workers. He tried to balance all sections of society, which resulted in poor economic performance. Public sector invest grew from 5% in 1971 to 74% in 1977, leading to a decrease in private investment. Large scale manufacturing declined during his time, it grew at a rate of less than 2% compared to rates of 10% during the ‘decade of development’ in Ayub Khan’s time. ‘Pakistan’s performance during 1970s remained unsatisfactory compared to the 1960s’.  Zulfiqar Bhutto’s lackluster performance can be attributed to his unstable political decisions and his mismanagement of the economy and his changing approach to manage the political and economic development. He started as a socialist and tried to maintain a moderate imagine by the end of his era as leader of the governing party, the PPP.

The end of the PPP rule was followed by another military coup, this time by Chief of Army Staff General Zia Ul Haq. He took control in July 1977. The new military leader instigated a change. Institutions were denationalized as the experiment with nationalized had only aggravated the private industrialist. New innovations were introduced in banking and taxation under the name of Islamization. This regime re emphasized some policies of the Ayub Era, such as ISI, which illustrates the good management of the economy during the previous General’s time. This showed in figures; the Gross Domestic Product grew at 6.3% during 1978-1983. The growth of the manufacturing industry was at 9% compared to the 3.8% during 1972-1978. The growth in the later half was even better. GDP grew at an annual rate of 6.6% from 1983 to 1988 and large scale manufacturing grew at an average rate of 16.6%. Zia Ul Haq had some good fortune. Pakistan benefited from external remittances from the workers in the Middle East from 1975 to 1985 and he was a close ally of the US during the Afghan War. Pakistan received assistance worth $5Billion in the 1980s making it the third largest recipient of U.S aid. Political structures were not changed during his time; the feudal aristocracy still exercised considerable power. This was a trend that carried forward in the next decade. With the death of Zia Pakistan entered a precarious politic situation.

        By 1993 the political situation of Pakistan was an unusual one. From the death of Zia in 1988 till 1993, the country had survived 5 governments, four prime ministers, three presidents, and two chiefs of army staff. This would clearly suggest to any reader the fragmentation of political and economic development. A strong government is essential for political and economic development and these years not surprisingly signify the worsening of economic growth and increased political instability. Benazir Bhutto assumed power for the first time in 1988. Her government ignited yet again the debate regarding the balance of power among the President and the Prime Minister. This power struggle led to the failure of her government and eventual dismal of parliament. GDP growth in her tenure declined. There was unprecedented corruption during this time, and it has been estimated that it cost the government 10-15% in the banking sector alone. Benazir after just 20months in office gave way to Nawaz Sharif. In his first tenure from 1990-1993 he followed a policy of privatization and the average per capita GDP growth rate during his tenure was more than 13%. A large percentage of the GDP went to debt financing, thus not helping the economic situation of Pakistan. He did not complete a full term in office and his eventual downfall was the result of the ignition of the balance of power between the Prime Minister and the President. History has a tendency to repeat itself and the President dissolved parliament calling for new electing, resulting in the end of his reign as Prime Minister.

        By 1993 Benazir returned as Prime Minister once again. The political and economic situation had not changed much; there was political violence, tensions between ethnic groups, secretarian violence was on the rise and a growing burden of international debt financing. The economic record of Benazir in her second was mixed. The target growth rate of 6.5% was not achieved. The inflation rate remained at 14%. She did not last very long in office yet again and Nawaz Sharif took power again in 1997 by securing a heavy majority in parliament. His second tenure was insecure; he went to war over Kargil and made successive attempts to secure power for himself, by limiting the powers of the President. He made the fatal mistake of securing power over the military, which eventually led to the bloodless coup in 1999 by General Musharaff who is currently the President of Pakistan. The 1990s were unprecedented in the history of instable political and economic development in Pakistan. There was an increasing pressure on the economy to do well; majority of the budget went towards debt financing and the military, all the civilian governments tried to vest more power in the Prime Minister as opposed to the President resulting in the short span of governance by the same political party. The short occupancy of a single democratic administration meant that reforms could not be carried out effectively; no significant change resulted, and they only accentuated the political and economic instability that have been the benchmark of civilian governments in post independence Pakistan.

        It is important to analyze the current military government to show if military governments have been more effective in managing the economy and providing political stability. When General Musharaff took control, there had been a decline in foreign direct investment and domestic investment. On the political side Nawaz Sharif had restricted the press in their views. Musharaff has moved away from that line and has allowed immense press freedom, the most Pakistani media has ever enjoyed. He restricted political participation by not holding elections till 2 years after his military coup. He still holds dual offices; he is the president of Pakistan and the Chief of Army staff. This was not allowed in the constitution until amendments were made in order to legitimize his position within the eyes of the people. In terms of economic development, his record speaks for itself.

        Before mentioning his economic record it is important to establish that Musharaff has had the good fortune of having the backing of the U.S after September 11th. He has received aid, Pakistan’s external debt has gone down and the economy has grown in the last few years. The growth in large scale manufacturing picked up averaging 4.7% in the last 3 years of his government, from 1999-2002. GDP after being adjusted for drought in the same period has grown at 4.6% annually as compared to 3.2% in 1996 to 1999. Inflation has been kept to 3.8% in the last years 1999-2002 as compared to 8.4% from 1996-1999.  Large scale manufacturing in the year 2004 grew by 18.1%, an increase from the first years of his government. Growth in Real GDP was up to 6.4%, an increase from the previous year when it took at 5.1%. Pakistan continues to attract foreign direct investment, indicating the attraction of Pakistani markets to foreign investors. The Karachi Stock Exchange has the highest rate of return anywhere in the world currently. All of these figures would show that the military regime at the turn of the century has done much better economically as compared to the civilian governments of the 1990’s.

        It is interesting to analyze the role of civilian and military regimes and how they have done in terms of political and economic development. Looking at historical figures statistically it would suggest that during the rule of the military Pakistan has been able to achieve sustainable economic growth has been healthier when compared to the civilian governments in retrospect. But this in no way suggests that military regimes are better for economic growth than civilian governments, but does indicate that to have sustainable economic growth you need a stable political system, and surprisingly enough in the case of Pakistan it has been provided by the military organization rather than elected chosen governments of the people. Why has this trend carried on for so much for the history of Pakistan?

        There is no simple answer to this question, but it can be traced back to the partition and gaining independence from direct British colonial rule. From the very beginning the military was an important part of the political setup, it was an internal rather than an exogenous factor in the political apparatus of post independence Pakistan. This is evident from protecting the homeland and the constant military agreements Pakistan had entered as a U.S ally during the cold war period. The military itself was able to over throw civilian regimes with ease and establish itself as the ruling party for years. There was an inherent incapability on part of the civilian regimes to carry forward the tradition of democracy. The failures of civilian regimes automatically paved the way for the military, thus the four times military men have ruled Pakistan. The military regimes have tried to make them democratic through the constitution and gain legitimacy through the political apparatus.

        In conclusion it would be right to say that economic record of military regimes have done better than those of civilian government, which is evident from the economic indicators over the last 58years of independence. The democratic setup was weak at independence and constant interference by the military in policy and political matters did not allow the process of democratization, and certainly did not pave the way for steady democratic governments. The civilian governments were involved in a balance of power struggle between the Prime and President which effectively carved the way for the military to take over. These internal strife, power struggle and political instability led to poor economic management and the military was able to capitalize on these situations to provide a change, a better change. The current military government has followed the trend and shown a better economic record than the civilian governments of the 1990s. It would be wise to say military governments in Pakistan provided economic and political stability that was missing in civilian governments.

         

Bibliography

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