Nascent Ideas

On Pakistan’s Political Economy

Posted on: December 1, 2014

Even after six decades of its existence, Pakistan has failed to realize the original promise of its creation. Founder of the nation, Muhammad Ali Jinnah, presumably envisioned Pakistan as a modern, democratic state which would provide welfare and security to all its citizens. Despite possessing world’s oldest and largest integrated canal system and one of the largest labor forces in the world, Pakistan’s governance record has remained abysmal. Commonsensical argument bearing considerable emotive appeal to the masses in Pakistan is that the political elite of Pakistan due to its inherently corrupt nature and collusion with foreign, anti-Pakistan (used almost synonymously with anti-Islam) elements ought to be blamed for Pakistan’s lack of development. While political actors in Pakistan certainly bear great chunk of responsibility, the above argument no matter how popular it happens to be, is reductionist.

Pakistan’s political economy remained deeply implanted in the interests of non-elected, non-representative institutes such as military and civil-bureaucracy. Non-productive expenditures on defense procurement as well as bureaucratic staffing prevented Pakistan to pursue a truly development-oriented economy. Pakistan’s political structure has been overshadowed by a feudal oligarchy and an emerging capitalist aristocracy. Genuine representation of professionals and workers in the echelons of power has remained unfulfilled. In this backdrop, Pakistan’s political economy remained influenced by feudal class which obstructed all attempts towards land-reforms and taxation of agricultural income. These politicians often extended their support to military dictators. In this way, the persisting inequities in country’s pre-dominantly agrarian economy continue even after six decades of decolonization. Political parties in Pakistan, for the most part, remained elitist with strong dynastical patterns and weak gross-root structures.

Pakistan has been intermittently ruled by powerful military dictators with politicians having little say in national affairs. Even during quasi-democratic phases, the security establishment has tended to monopolize country’s policies at least in the affairs of national security. Dispute with India over issues such as boundary settlement in Kashmir and access to water resources led the state to adopt what may be referred to as ‘the economy of defense.’ A significant portion of nation’s resources was thereon diverted towards the military. However, army further plunged Pakistan into an unnecessary struggle for strategic parity with India and created a discourse of territorial survival to legitimize its hegemonic position within the state apparatus. Besides, the military tended to maintain a veto over defense expenditures. Every year, defense expenses consume the major chunk of national budget leaving paltry sums for social development.

Furthermore, military started undertaking a wide array of corporate interests. In Pakistan of today, military operates thousands of businesses and undertakes massive investments in key economic sectors such as real state, banking, insurance, retail, higher education and manufacturing. Military’s unregulated accumulation of private wealth and unchecked acquisition of public resources certainly added to its influence in the socio-political sphere. Military in Pakistan almost always acted beyond its role as a professional service with its unabated political meddling and repetitive usurpation of civilian command. Besides that, dictatorial policies of military leaders prevented the consolidation of participatory institutions for political mobilization. This directly obstructed the path of the post-colonial state towards national integration and economic development.

Politicians and military leaders also saw it expedient to forge an alliance with the external US-led capitalist block so as to seek international patronage for their subservient domestic ambitions. Defense-centered economic framework made Pakistan’s social sector conspicuously dependent on foreign aid. Thereby, international actors were able to impose their conservative neoliberal agenda in the form of structural adjustment, deregulation and privatization programs. In 1960’s, Ayub Khan’s military regime sought to shape a populist perception that democracy was ill-suited to Pakistan due to high illiteracy rate and lack of political consciousness among its populace. Ayub regime vigorously pursued growth-oriented, hyper-industrialization policies patterned on the US-led neo-liberal model.  Despite impressive growth results, these polices did not translate into better quality of life for the poor masses. On the contrary, income differentials and regional disparities became greater. Unfortunately, the legacy of Ayub era continues to shape Pakistan’s development trajectory even in the twenty-first century. Pakistan’s dependency on US-led neo-liberal financial institutions has considerably increased. Development policy in Pakistan till date remains geared towards capital accumulation and industrialization at the cost of human development and social upliftment.

The country, right from its inception, has also faced multiple existential threats emanating from within its borders. It may even be argued that the very task of nation-building in Pakistan has not been fully actualized. Here again, the short-sided policies of the ruling political and military elite are to be held responsible. The ruling elite failed to realize that the challenges of economic development in Pakistan were closely related to the struggle for a constitutional political system. Given Pakistan’s immense diversity in terms of ethnicity, language and culture, it was imperative for the state to constitute an accommodative, all-inclusive governance system. However, the political and military elite in Pakistan chose to do the opposite. The ruling elite made voracious attempts to enforce a monolithic national identity at the expense of regional aspirations for ethnic autonomy. Pakistan’s national identity was constructed on a narrow frame of Islamic ideology which demanded unfaltering allegiance to the state. Consequently, the project of nation-building faced dissent from different ethnic groups who prioritized their centuries-old cultural consciousness over arbitrarily drawn and externally enforced Pakistani identity.

Pakistan for greater part of its history remained marred by political instability. State’s exclusionary policies in its nation-building project were ultimately reflected in its development strategy wherein a highly centralized, bureaucratic system was put in place. As a result, Pakistan’s development program focusing on high growth rate was never completely owned by its political units. Centralized development devoid of fiscal justice further complicated the question of federalism in the post-colonial scenario. Resultantly, the people in the marginalized peripheral regions became increasingly resentful. Arguably, state’s development project collapsed due to the policy of political non-accommodation adopted by the ruling politicians and generals.

To sum it up, my major contention is that the failure of development must be attributed to the ruling elite of Pakistan which not only includes politicians but also the military and civil-bureaucracy. Years of military dictatorships and continuing influence of colonial legacy have served to perpetuate authoritarian strains in public institutions. The only way-out for Pakistan is to redraw the fundamental contours of its development policy by pursuing uncompromising commitment to democratic governance and conceiving a pluralistic self-image. The role of military-bureaucracy oligarchy and feudal elite can only be curtailed if genuine participatory institutions are constituted. First-ever successful democratic transition in the country leaves hope that consolidation of democratic governance is not without possibilities. The locus of development has to be shifted to the people of Pakistan. To that end, envisaging an equitable federal arrangement between different political units would be of paramount importance.


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