The Pakistani Spectator

Pakistanis are not mature enough with democracy regime; while most of the politicians are morally bankrupt! The country’s current misfortune is due to civil leadership, who has demonstrated no appetite for sustainable change, economic or social. The effect of the stronger economic performance during military regimes translated into something more meaningful for poor people of Pakistan and efficiency and organization of the government structure during military regimes brought good dividends to the country on the economic front. Contrarily in resource utilization a poorly-disciplined approach of civilian governments always led to higher non-development expenditures. Our political leaders are incapable of leading us out of the current multiple crises we face. The most conspicuous fact about Pakistan’s economy is that the corruption and mismanagement of its civilian governments has prevented the channeling of the country’s abundant natural and human resources—especially its wealth in mineral resources—into lasting improvements in infrastructure and the construction of a sound base for self-sustaining economic development. Thus, despite its abundant resources, Pakistan is poorer today than it was at independence in many senses.

Our political leadership has not lived upto the trust that its electorate had reposed in them. Major threats Pakistan is now facing are: creeping poverty and unemployment, poor literacy rate, high population growth rate, and poor health care facilities for Pakistanis. No political party has been interested dealing with Pakistan’s perennial problems of economic mismanagement, corruption, and law and order and much of this domestic agenda remains unfinished. Social inequalities have reached unprecedented heights. The deterioration of basic public services due to constant cuts in social spending has affected not only the poorest sectors of society, but also large segments of the middle class. Pent-up social problems had given rise to great expectations of reforms under this so called democratic government. Pakistani nation have also done a lot of nasty things that resulted in today’s drama. An incapable political system, corruption, nepotism, a political use of public sector, tax evasion, and a spirit of “making money with the less or even no effort” have been some of the characteristics of our society. Our political leaders represent corporations, not the people. Our political parties are also sick, and good people arguably do not join these parties.

Still one of the less developed and poorer countries of the world, it has the potential to become a major economic power if the civilian leaders resolve to learn from past mistakes and to harness the country’s rich natural and human resources for a productive and sustained effort to promote economic development. Falling productivity, soaring inflation, growing dependence on foreign loans, high unemployment, and a deteriorating balance of payments have all combined to create a deepening economic crisis. The Outside world has pat answers for Pakistan’s prolonged crisis. Everything comes back, again and again, to corruption and misrule of civilian leaders.

I personally have a firm belief that democracy is preferable to autocracy, but at the end of the day, some of the most successful leaders of all time were competent people who had autocratic power. I think it is time to take stock of what military regimes achieved in Pakistan as compared to civilian regimes. After a careful analysis it becomes crystal clear that all the military regimes demonstrated all time high growth rates as compared to so-called democratic set-ups. A quick glimpse at the economic performance of the different military and democratic arrangement is provided below:

The Ayub Khan era (October, 1958 to March, 1969) is regarded as one of the best periods of stability in Pakistan’s history. During this first Military Regime the status of the planning Board was raised to that of the planning commission and it was called a division in the Presidents Secretariat with the President of Pakistan as its Chairman. Ayub Khan Regime known as ‘Decade of Development’ and revolutionary regime witnessed staggering growth rates. The country was at the top in Asia in terms of industrial production because industrial production grew by 72 per cent over the period as compared to an average of 55 per cent for Asian countries. Real investment touched as high as 21.5 per cent of GDP. Increase in investment accelerated the economic growth process.

Through good economic management, inflation remained in checked and hovered around 3 per cent. Moreover, Pakistan’s economy succeeded in registering its first ever budget surplus during the military rule of Ayub Khan. GNP and per capita GNP averaged 6.7 cent and 3.8 per cent respectively. Infrastructure of roads and communication networks were constructed. Hydroelectric dams were built to generate electricity. Secondary industries and automobile assembly plants were established to create more employment opportunities. The performance in this area is regarded as the best far. Later Bhutto’s policy of nationalizing industries, banks, insurance companies, educational institutions and other organizations, derailed Pakistan’s journey toward modernization and faster economic development. This setback hit Pakistan so badly that the East Asian countries that were lagging behind Pakistan in growth and economic indicators in the late 1960s not only overtook it but also became huge success stories.

During first military regime the country was optimistic for entry in the comity of the developed nations in near future. In second military regime Pakistan stood at the threshold of graduating into the middle income group of countries’ on per capita income ($400) criterion. The overthrow of the Bhutto government by a military coup in July 1977 and the ascendancy of a right wing military leader, General Zia ul-Haq, halted the socialist experiment. The military government devised policies to boost the confidence of private investors and promote the welfare of Pakistani citizens. The economic expansion continued during 1977-88. Price level again remained well in-checked. General Zia period could be well matched by General Ayub Khan Period when the economy got into a healthy shape. During this regime the country’s economy grew an average rate of more than six percent annually. Zia’s rule fundamentally changed the Pakistan economy and society. The expansion of the industrial sector under Zia was equally impressive. Per capita income in the 1980s was about 25% higher than India (close to $500 per head compared to India’s $390). The average Pakistani was better fed and clothed than an Indian. While 52% of India’s population was below $1 a day income only 11% of Pakistan’s was below this poverty line. After 1988 the civilian politicians forced Pakistan to crawl before the IMF. Period after Zia’s death is analyzed to understand the eruption of the balance of payments and fiscal crisis.

In third military regime Pakistan pronounced as at take-off stage and witnessed about 7 per cent growth rate and joined Global Emerging Economies Club. One would wonder how three Generals made the economy healthy. Well, it seems that clear policies of the military rulers, commitments to their objectives, low level of corruption, healthy foreign aid, avoiding unnecessary interference in public institutions, strong technocratic management, and political stability mainly contributed to the rosy performance of the economy during military regimes. Pakistan’s inflation rates, under the military rulers remained well under control. It remained below 8.0 percent on average under General Ayub and General Zia periods. Whereas under democratic governments the inflation rate, most of the time, remained in double digit. During the Musharraf era, the economic conditions of that time appeared better – there were more jobs for the urban youth and business was better. I happen to meet many apolitical bankers and executives who all commend for the Musharraf era. However, The type of access allowed to the US after 9/11, Akbar Bugti`s killing, throwing the top judge of the country out of court, Lal Masjid incident, and issuance of  NRO were absolutely wrong acts of Musharraf .

The military regimes each time tightened belts and brought forward educated, talented, sincere people who were capable of putting the economy back on tracks. The most neglected areas, which needed immediate attention; education, growing unemployment, healthcare facilities, poverty; and physical infrastructure were always given priority. The military Governments, which came to power in Pakistan from time to time took revolutionary steps and announced plans for deep changes in government, including the denationalization of industries, workers welfare, and a sweeping agrarian reform designed to end unjust social and economic structures. In implementing these reforms, the military leaders challenged the incompetence and corruption of civilian politicians who were unable to implement badly needed reforms. They announced a “third way” of national development between capitalism and socialism. As a result of their reforms, food production increased, and peasants’ wages and quality of life improved. While military governments ruled in favor of the lower classes, implementing agrarian, labor, and other reforms, their ultimate aim was to undercut leftist organizing strategies. Providing agrarian reforms, even though they were partial, limited, and served to support the existing class structures.

However the first civilian set-up had seen a decade of economic stagnation, second civilian arrangement had been decade of disaster and the last one had been labeled as an economic and political debacle. The economy of Pakistan slowed to an average annual growth of 3.8 percent during after Zia regime. Factors contributing to the sluggish growth included rampant corruption and mismanagement at the highest levels of civilian government and the rise of ethnic and sectarian violence in Karachi and other urban centers. These factors shook investor confidence. Poverty continued to increase, healthcare facilities remained poor, standard of education kept on declining. Due to high unemployment crime rate badly escalated. Corruption spread like a cancer. The so called democratic governments openly used nationalized banks to disburse loans to their loved ones. Due to the country’s lax financial system most of these loans never returned to its source resulting in huge losses to the banks.

The decision to abandon the known—agriculture—for the unknown—rapid large-scale industrialization—was a fundamental error on the part of civilian Governments. The capital and the skill needed for rapid, large-scale industrialization were not sufficiently available. Thus, an unskilled workforce and insufficient funds severely handicapped the industrial sector. Also, Pakistan’s neglect of the agricultural sector aggravated already problematic food shortages. Pakistan had raised enough food to meet domestic needs during military regimes. However, it experienced food shortages after 1988, which necessitated the importation of food from foreign countries.

The economic performance of the 1990s was related to the structural adjustment programs (SAPs) imposed by the World Bank and the International Monetary Fund (IMF). Loans from these international lending agencies were subject to conditions on Pakistan’s national economic policies. Pakistan received its first formal loan in 1988. In Pakistan the primary focus of the IMF-sponsored program was to lower the budget and current-account deficits. These objectives were to be achieved by reducing public expenditures and broadening the tax base. However it is a common belief among ordinary Pakistanis that structural adjustment program prescribed by the IMF backfired and has worsened poverty and unemployment situation. In addition, in 1992-1993 the IMF further insisted that Pakistan reduce defense expenditures, impose an agricultural tax, and improve methods of tax collection. These reforms were never fully implemented. Inflation rose from 8 percent in the 1980s to 11 percent in the 1990s. Direct foreign investment did not improve and the export sector remained sluggish. External loans have now escalated Pakistan’s debts to US$62 billion and consuming external earnings in debt servicing.

As always, the civilian leadership failed us. Presently the Government has hijacked the legislature to serve its own ends. The fact is, Pakistan never got the intelligent civilian leadership, which could save the sinking ship. Poor governance of the civilian Governments is another chapter of this sad story.At present, Pakistani society is at the dead-end of development. Majority of Pakistanis are now grappling with the challenge of poverty and hunger and our institutions are not functioning properly. Economic reforms have slowed, infrastructure remains shambolic in large parts of the country and electricity supply remains as intermittent as it was six decades ago. The poorest say democracy has done nothing to change their standard of living. Corruption is pervasive and unemployment rate can not be quantified. The gap between the few rich and the majority poor is widening. Consequently, there is a loss of confidence of the people in the state. It is amazing to hear the Politicians talking about achievement in the last four years. The only change the Country has experienced is a backward change (for the worse). Infrastructures have rather gone from bad to worse. There are too many negative players who unfortunately are only interested in their selfish vested interests. There is no place for capable and talented people, till specific ruling class is fooling people of this country and then onwards their next generation is ruling again and again while they don’t pay taxes.

It may be appropriate for our country to create a power sharing structure where the military plays a constitutional role in government through participation in High Command of the National Security Council. It will support our weak civilian leadership and strengthen the democracy. Today if the US is doing what it wants in Pakistan, nobody else but it’s so-called ’servant leadership’ is to be blamed. If the US is attacking our land and people in the name of the so-called ‘war on terror’ it is only because of our feeble and weak civilian leadership. This war has devastated the economic foundations of our country: the Government should revisit it. Prioritizing the needs of the country is of course what politics is mostly about; our civilian leadership should heed to it. A nation needs the sincere love of its citizens as well as its leaders to be liberated from the clutches of foreign dictates.  The nationalism wouldn’t come if we wait our country attacked by the enemies. The nationalism comes from our heart.

Our freedoms and prosperity are in jeopardy because our civilian leadership have become uninformed and unaware of why our Founding Fathers gave us this independent  State. The people want a leadership who can love them; and provide them necessary services. And, truthfully, it is hard to find such leader in Pakistan today. The political leaders should respect the institutions. A propaganda campaign by the politicians and their paid TV anchors against Pak Army and ISI is going on in the media. The language of this propaganda campaign is the same what our enemies are speaking, which is very unfortunate. Everybody knows who is collaborating with the enemies and harming the country just for dollars. The people love Pak Army —They salute to Pak Army— they are the pillars of our country —The politicians do not see the sacrifices of the forces and their unholy tongue lashing against army in clever ways must be condemned. With the level of corruption, indiscipline, insecurity and failed system, the people are today tended to prefer the military regime.

I can still see some light at the end of the tunnel. Pakistani people, by which I mean ordinary Pakistanis like you and me, are hard-working, patriotic, understanding, intelligent and pretty smart people. Let all of us join hands with the government to improve the growth and development of Pakistan’s economy by also improving our roads, bridges, provision of electricity, water, education, security to the citizen and visitors when all these in fracture are in place and the country continued to record constant stability then many investors will be interested to invest in Pakistan. So that all of the members of the society enjoy a real equality of opportunities, it is required that all of the population is in conditions of satisfying their basic needs–like food, shelter, clothing, health, etc. But here the people work decades and decades and still have to live like slaves, they know what it’s like. And I think anyone who works hard, has a right to a good, productive life. Until this objective is reached, these people are unable to participate in the market and take advantage of its opportunities. In this case where there existing these periphery groups of extreme poverty, the State should enter to complete it subsidy role with direct intervention aiming to eliminate this unfavorable situation, improving the opportunities for these people so that they will better able to participate in the market and society in general. We have to realize that it is up to us to effect change in our own country by holding our so called democratic leaders accountable, and that those leaders would continue to steal billions and run the country to the ground if they believe that they can get away with it. If we Love our Country, then I’m sure, everything will just follow smoothly.