When Pakistan was Pakistan — I

Wednesday, August 04, 2010 - After over coming the dark days of 47-48 contrary to the general belief now, Pakistan soon built a balanced economy, our currency was strong for at least four decades, cost of living was low and we used to boast that whatever happens our people will never have to sleep without bread and butter, as our agriculture was very productive Pakistan’s birth was attended with extreme difficulties. It was a miracle that it survived despite those problems. We created a state from the scratch. No industry, no state infrastructure, not even tables and chairs or buildings for its offices, settling seven million Muslim utter destitutes refugees expelled from India was a problem. There was no UN Refugees Rehabilitation organization. Pakistan had no currency of its own, it was to receive its share from division of the Indian State Bank. Indian Dy. PM Patel stopped these funds from going to Pakistan, it was then using Indian currency not having its own State Bank Pak Government had no money to pay its employees. It was in this desperate it was claimed that the Quid, according to Mir Laiq Ali, asked him ”Pakistan, is .. in urgent need of finances, .internally and foreign exchange “ Mir Laiq Ali claimed that the Quaid asked him to go to US and Europe .and prepare ground for a substantial loan and aid ” Mir Laiq Ali said , the Quaid told him “ Pakistan would accept any reasonable term short of affecting its hard earned sovereignty.” However there is no evidence that any negotiations took place with US on this suggestion.I also doubt that Quaid could have asked him to seek laons from an utterly WWII devastated bankrupt Europe which was already being reconstructed by US $ 2.5 billion Marshal aid. However, Mir Laiq Ali says on next page “ Soon after that Nizam sanctioned a loan of Rs 20 crores. Mr Jinnah lost no time in announcing that Pakistan had received a loan of that sum from Hyderabad and that Pakistan had no further financial problem “ ( P 70, Mir Laiq Ali: M A Jinnah). I might comment on this statement. It was not Nizam who gave the money to Pakistan but Qasim Rizvi, Chief of Ittihad ul Muslimin who was in de facto control of Hyderabad State then, even its army with Nizam blessing.

With Pakistan getting Nizam’s help and its share of Rs 55 crores from division of the assets of Indian State Bank, Pakistan got out of the desparate financial situation in which it had found in 1947-48. Right from its birth, Pakistan adopted self reliance for solving all its problems like rehabilitation of 7-million destitute refugees from India and its economy rehabilitation. With extraordinary sense of nation-hood the locals came forward to help the seven million destitutes to set up their new homes and start their new life in Pakistan otherwise they would have perished .There were many other challenges like twice India massed its Army against Pakistan on the borders, India’s armed intervention in Kashmir but it is astonishing how Pakistan’s economy recovered rapidly. This theme recurs in Liaquat’s speeches during his tour to US in May 1950. He says “Well … within three years our import and export trade revived so quickly that our internal economy and foreign exchange position was rehabilitated with surprising ease , year after year our budget has been balanced and when Govt. floated loans, their success was phenomenal” ” Its economy is sound ; its successive budgets have been balanced ; it has a favourable trade balance with dollar area. Two items published in the Dawn’s “ Look Back” “ Fifty years ago Today” – in its issues of 14 June 2001 & 17th June 2001 say Pakistan had in its blocked sterling balances account Ls 165 million as against India’s Ls 160 million, the next item quoted Ghulam Mohammed that Pakistan had nearly Ls 25 million in “ free Sterling account…He went to London to negotiate with Hugh Gateskell , who said “ .. Any out right release of sterling balances was not possible.. It will mean Pakistan would fritter away its resources and Britain will be saddled with unbearable burden” . Sense of national pride was so ingrained in every Pakistani in those days of utter poverty that they were not prepared to degrade themselves by begging from any foreign power This pride is reflected in Liaquat’s statement to Chicago council on foreign relations on 11 May 1950 . “ We realize that the under developed countries must themselves organize their own initiative and utilize their won resources , material and spiritual, to the fullest. If there are any countries that subscribe to this view half heartedly Pakistan is not among them”. During his US tour, Liaquat clarified that what he was seeking from the west was only technical expertise for Pakistanis in various fields and NOT monetary aid.. Speaking at

M I T, on 30 May 1950 , Liaquat said :“ With monotonous reiteration during my days in America I have appealed for international co-operation. Some may have thought that I was asking for charity. I do not ask for charity, I only ask the help for help of more experienced countries of the world to put our own men to work and make our own resources to yield their wealth”

Daily Star an American paper in a pre-visit commentary on Liaquat’s visit on 1st May wrote” “ Mr Liaquat does not come to Washington with hands out for American largess. He is on no mission appealing for American dollars or American supplies” On . 23 May 1950 in address to New Orleans branch of Foreign Policy Association he explained the purpose of his “mission” to US : “ I have been (often) asked what is the purpose of my mission? . Well I am here on your invitation…my visit is a mission of peace”, ( I have come to understand your view on international situation and to explain what Pakistan is”.

The these quotations have been taken from the book “ Pakistan Heart of Asia” a compilation of Liaquat’s speeches in US , published by the Harvard University Press, in 1951. When the Quaid died Pakistan’s foreign loans were nil, when Liaquat died Pakistan’s foreign loans were nil, uptil 1953 Pakistan had no foreign loans/laid.The question arises who took us into Foreign Aid? And why? And now we have reached such a mental condition that we cannot survive without American aid. The “credit” to take Pakistan into foreign aid goes to the trio Ghulam Mohammed- Bogra and “General” Ayub . Suffice to say that if I am not mistaken the aid burden at the end of 1960 was $ 7 billion , when Ayub Era ended both for East and West Pakistan it was $ 12 billion ( half for West ) when $ was Rs 5,30 and now in 2010 it is about $ 58 billion (when $ is = to Rs 85.90 ) Upto early 80s Foreign Aid was for specific development project , thereafter it is used for “budgetary support” or political purposes and NOT for a development project. This is literally living on charity.

Value of the currency is a good indication of the country’s standing abroad. - Dollar was equal to Rs five and annas four during Liaquat to Ayub regimes . Now anna does not exit any more . For long time Dollar remained at this position According to Daily Jung of 17 February 1997, in ZAB’s regime 1972 dollar started at Rs 4.70 and went up to Rs 9.90 . In Zia regime it started at Rs 13.17 and went up to Rs 17.17 . In Benazir’s time, 1990, dollar Rupee parity was Rs 24 ; in 1991 (Nawaz Sharif days) Rs 25; in 1997 Nawaz Sharif regime dollar was Rs 40.90 . Now in 2010 dollar equivalence is touching Rs 86 or two times . Incidentally now Indian Rupees 47 is equal to a dollar.

During all the years upto 1990 Pak Rupee vis-à-vis Indian Rupee had been almost the same value little up little down. Now Pak Rs 2 is equal to Ind. Rs One. Pak Rupee is thus ½ of Ind Rs.. Would one believe that in 1949 when Pound Sterling was devalued , India followed suit and Pakistan did not , “ Indo-Pak disharmony surfaced in Sept 1949 , the pound was devalued India devalued her Rupee in consonance , but Pakistan did not then a Rs 100 were equal to 150 Indian Rupee. Writes Rajmohan Gandhi at p 271 of his book Understanding Muslim Mind . In unmentionable President’s time, or Zia’s, Pakistan crossed the bracket of poor countries to become a low income group country while India was still in the bracket of poor countries. It is not necessary to compare the prices of consumer items of that era with today’s. The differences would be in hundred times. Now we cannot say that no Pakistani will sleep hungry as our agriculture is extraordinarily productive. In the next installment of this topic, we will have a look at Pakistan’s assertive foreign policy when Pakistan was Pakistan. —To be continued