Pakistan — a political economy
IS Pakistan’s economy in danger? This question looms large yet the query remains what is the economy of Pakistan.
What constitutes Pakistan’s economy and what factors shape its trajectory. Pakistan inherited a handful of industrial units at partition.
Unfortunately, Pakistan lost its founding fathers including Quaid-i-Azam right after its inception.
After World War II and leaning of India towards the Soviet Bloc pushed Pakistan towards the United States which was a natural consequence.
In order to counter Russia, United States provided enormous financial and military assistance to Pakistan.
Our geographical location turned Pakistan into a “Political Economy”. Just a decade past independence General Ayub Khan sabotaged democracy in Pakistan and clamped martial law which suited the Americans.
A military dictator was more likely to implement their orders and wishes in true letter and spirit than a political leader.
That is why United States always backed dictators, luring Pakistan through grants, aids and monetary benefits into signing SEATO & CENTO.
It is generally believed that Pakistan saw rapid development under Ayub Khan however, in reality, it was merely a compensation from United States for forwarding the Western agenda.
Ayub Khan cashed in on the opportunity and clamped notorious laws such as ABDO and banned 6000 upright political leaders like Mohtarma Fatima Jinnah, Sheikh Mujeeb-ur-Rehman and Hussain Shaheed Suharwardi.
Although United States preferred dictators yet needed politically elected democratic governments was a technical necessity for approval of funds from their senate hence Ayub Khan and subsequent dictators installed rubber stamp and manage weak political governments as an eye wash for the West.
Pakistan focused on expanding military might to counter a bitter longstanding enemy India and obtaining latest equipment for warfare caused chronic neglect of the economy.
The weak economy was totally dependent upon the whims of the superpower. American aid and debt drifted us away from becoming a manufacturing economy and placed reliance on imports.
Meanwhile two wars with India made matters worse which led to the catastrophic loss of East Pakistan.
The desire to place a selected political system, unwanted politicians were removed from the national canvas.
Politicians with strong democratic mandate and support of the people were suppressed through collusion, corruption and nepotism.
At the same time whenever needed for their own interest, the superpower loaded Pakistan with aid and debt.
But as soon as their priorities changed, they abandoned Pakistan altogether. The weak political economy dwindled between crest and troughs seeming booming at one time and slumping at another.
In reality the economy never developed on strong foundations. Pakistan could never become an export or manufacturing economy.
The bureaucracy and military leadership could never escape the American clutches. The military in turn harboured weak hybrid democracies.
A militarily strong Pakistan was more useful for United States rather than an economically liberated one to counter Russia.
Hence United States was never interested in consolidating Pakistan’s economy. Ayub Khan gave a semi-military government in Pakistan the status of an accepted norm.
After Ayub Khan, Zia Ul Haq took up the task of defeating the Russians at the strength of American dollars and weapons and reaped its benefits to the fullest.
As Zia Ul Haq was acting on the mission of the Americans and they needed him, he covertly advanced the nuclear program.
It was a time when the Americans could not afford jeopardizing its relations with Pakistan. Zia Ul Haq did everything under the sun to suppress his opponents and installing democratic government of his liking.
The economy continued to dwindle at the mercy of the Superpower, stabilizing it when it was needed otherwise left at the mercy of the Almighty.
Meanwhile under the rubber stamp weak democratic governments, bureaucrats, army officers, judiciary, prominent businessmen and politicians ran amuck.
As financial independence did not serve the purpose of the Americans, therefore, they did not let the economy flourish, however their facilitators made a fortune.
Politicians and establishment made policies driven by personal interests rather than mutual benefits.
They filled their pockets and when their interest was served, they altered those policies. Pakistan was entrapped in external and internal conflicts by design so that we remain petrified for our existence rather than to strive for economic growth and continue to reinforce our defence.
The fear of India was stamped in our minds. It is really unfortunate that this political economy could not be normalized and no one gave it a serious thought or action.
Three precious decades were lost in dictatorial rule while remaining also endured in the hands of incompetent ineffective frail governments.
In these conditions no economist or planner can transform a political economy into a normal one.
Pakistan is in depression due to the worst political and economic crisis. Such depression has not been witnessed in the past 75 years.
Foreign currency reserves are at its lowest level. LCs are not being opened and the risk of default is looming large. In such torrid conditions external factors are a blessing.
Fortunately, our neighbouring China is a rising superpower that depends on us due to our strategic geographical location.
These factors can salvage us.
At this time it is not likely that China, Saudi Arabia and the US itself will not let Pakistan default. China will help Pakistan transform from a political economy into a normal economy.
The economic growth and development of Pakistan is in China’s interest. China can make Pakistan a role model and convince the world to join its BRI project.
Although it’s against the interest of United States which would never agree and will go to any extent to impede this, however, considering the Pak-China relations it does not seem possible.
China will support Pakistan in Industrial development technology transfer and technical education along with economic development.
By making Pakistan economically viable, China can make it a role model for 150 countries that help realize China’s dream of becoming an International Economic Superpower.
We wish that Pakistan’s political leadership and establishment join hands which seems unlikely knowing that their interests are in conflict.
We pray to the Allah Almighty that their interests become harmonious and congruent to interests of Pakistan.
Fortunately, nature had aligned the interests of a superpower with interest of Pakistan. We must cash in on this opportunity because China’s technical, commercial and economic experience can transform our political economy to an emerging economy.
—The writer is Chairman, Jinnah Rafi Foundation, based in Lahore.
