The Role of Politics in Pakistan's Economy

Economic and social outcomes in Pakistan over the last sixty years are a mixture of paradoxes. The economic growth rate has averaged 5 percent annually since 1947--a feat achieved by very few countries. Politically, however, the interplay of religious fundamentalism, sectarianism, ethnic cleavages and regional economic disparities has made the country volatile and unstable. Various East Asian countries that were behind Pakistan in the 1960s have surged far ahead in most economic and social indicators. Pakistan has thus been unable to realize its potential. It is usually believed that economic growth can take place only in the presence of political stability, but the Pakistani case contradicts conventional wisdom. In order to explain these paradoxes and contradictions, this article attempts to address the following questions: How can a country that has suffered from political volatility and instability for such a long period achieve high economic growth? * Have periods characterized by stable authoritarian regimes in Pakistan provided the means for long term economic performance? * Have external influences, particularly the United States, played a constructive role? Despite sharing a common historical, cultural and social milieu, Pakistan and India have pursued different paths since independence in 1947. Both countries have done reasonably well in improving their economies and reducing absolute poverty levels. India has, however, emerged as a stable and vibrant democracy while Pakistan has spent half of its post-independence years under military dictatorships and is currently struggling to quell an Islamic insurgency in the northwest part of the country. The democracy-development nexus appears to be well entrenched in the case of India, while it is faltering in Pakistan. A great deal of recent literature has suggested that China and India are the typical representatives of authoritarian and democratic regimes, but fewer attempts have been made to resolve this puzzle in the case of India and Pakistan, two countries that are more akin to each other and share a common legacy. In order to address these questions it is useful to revisit the essential dimensions of Pakistan's economic and political history, a history which can be divided into six distinct periods: * The Flat Fifties, 1947 to 1958 * The Golden Sixties, 1958 to 1969 * The Socialist Seventies, 1971 to 1977 * The Revivalist Eighties, 1977 to 1988 * The Muddling Nineties, 1988 to 1999 * The Reforming Hundreds, 1999 to 2007 PERIOD h THE FLAT FIFTIES, 1947 TO 1958 (1) Pakistan came into existence as a moth-ridden country at the time of the partition of India. The British-controlled provinces of Punjab and Bengal were each divided into two parts. East Punjab and West Bengal formed part of modern-day India; West Punjab and East Bengal, along with three other provinces, together formed Pakistan. The physical separation between eastern and western Pakistan, with Indian territory in between, put Pakistan at a serious disadvantage from its inception. The foundation of an authoritarian streak in the polity was laid fairly early in Pakistan's history. After the death of the first prime minister, Liaquat All Khan, and the ascent of bureaucrat Ghulam Mohammed to the office of Governor-General, the supremacy of politicians in the political order was lost. (2) In February 1953, martial law was imposed in Lahore to quell the anti-Qadiani movement. (3) Prime Minister Khwaja Nazimuddin was dismissed by the governor general. Scholar Keith Callard termed this a "governor-general's coup. (4) He observed that three major conventions--the impartiality of the governor general, cabinet and party solidarity and the role of legislature as the maker and sustainer of government--had been destroyed or gravely weakened. Pakistan's ambassador to the United States, Mohammed Ali Bogra, was foisted as the new prime minister and six of the nine ministers of the dismissed cabinet joined the new government. …