Political Economy of Pakistan

Topics: Pervez Musharraf, Pakistan, Muhammad Zia-ul-Haq Pages: 9 (3012 words) Published: May 28, 2013

Title: The Political Economy of Pakistan

Submitted By: Ali Gohar Jamali

Reg no: 0917104

Class: BS (SS)-7

Submitted to: Mr. Akbar Saeed Awan

Subject: South Asian Studies

Dated: 8th October, 2012

Economic and social outcomes in Pakistan have been a mixture of paradoxes since the country came into being. Pakistan, once a regional economic power in 1960’s could not realize its potential and fell behind its East Asian fellow countries. Politically, religious fundamentalism, sectarian violence, ethnic differences, terrorism and regional economic disparities have made country unstable which contributed toward the unsatisfactory economic condition. It is usually believed that economy grows in presence of political solidity but in the case of Pakistan it rejects the conventional wisdom. Much of countries economic growth has been witnessed in the military regimes which ruled country for nearly three decades. The reasons for this will also be discussed later. Pakistan has been ruled for 29 years by four Military Governments .Army has a significant role in Pakistan’s politics, foreign affairs and supporting individuals. Moreover, the growing economic and corporate interests of the Pakistan army, makes it an important stake holder in decisions regarding trade, investment and issues of property rights .No doubt, Pakistan’s military is the most power institute of the country. The fact that military dominates Pakistan’s political, domestic, regional and global scene, is reflection of power of military but it also show the failure of civil society and political institutions. In order to examine the nature of Pakistan’s economic and political past, a history can be divided into seven different periods which are chronologically discussed below. Civilian Bureaucracy and Industrialization: 1947-58

Pakistan came in to being as a devastated country after partition of united India. The geographic location of East Pakistan with India separating West Pakistan put the country at a serious disadvantage. The country started with meager resources. The old remnants of British regime were the bureaucracy which became powerful and started running the state and they were responsible to ensure the survival of the country in hard time with their policies. The political entities included landowners, feudal and a number of tribal leaders. Since there was no industry, there was no industry related individual class and this led to the domination of bureaucracy in politics. The political equation consisted of bureaucracy, land owning politicians and tribal leaders. After making unexampled gains from Korean War bonanza, the mercantile capitalists emerged and strengthened their economic position in the society. Many traders who earned money and made profits in 1950 started investing in industry and later emerged as industrialists in 1960.The industrial process which took place in mid and late 1950’s was encouraged by the bureaucracy which played an important role in establishing industrial units in the country. State owned institutions like PICIC and PIDC encouraged the development and growth of industry. The import substitution industrialization policy was adopted by the government institutions and bureaucracy and it acted as an impetus to the nature and direction of industry. The first decade seem to bureaucracy led and assisted industrialization. The bureaucracy led the political settlement and determined the outcomes of policy and purpose. Industry became the subordinate partner in that process. Other political groups had very little to offer at that time because of being nascent. The landlords and tribal leaders have little to say in politics and the economic policy was not directed toward well being of them. The growth rates in agriculture were poor and industry was prioritized over agriculture which was the livelihood of 80% of country’s population which dwelled in rural areas. Since much of bureaucracy...
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