Features | Economy | South Asia

Dying Legacy

This is Pakistan 2008, after eight years of military rule and fancy economic growth figures: under-heated and under-fed in its coldest winter in two decades.

By Bronwyn Curran for

The images in Pakistan’s daily newspapers are medieval, more befitting a famine-hit state like North Korea: people jostling for bread and cooking oil, dying of cold in enforced power blackouts, getting thrashed by police for protesting the flour shortage, troops surrounding flourmills and escorting flour trucks, cars queueing for hours at the dwindling number of gas stations that still have supplies.

This is Pakistan 2008, after eight years of military rule and fancy economic growth figures: under-heated and under-fed in its coldest winter in two decades. The profoundly unpopular President, Pervez Musharraf, on the defensive over his increasing despotism, often resorts to boasting of growth averaging 7 per cent over the past four years. But this past winter his government has been unable to supply 24 hour electricity and gas, and has allegedly run out of the national staple: flour. Some factories have had to close down after power blackouts of up to 15 hours a day. Even affluent neighbourhoods are without electricity for at least four hours a day. Shop-owners either fork out extra cash for generators or lose customers. “My customers can’t see in the dark, so why would they come shopping?” says a garment trader in Rawalpindi.

Glittering growth figures belie the reality of 100 million people earning under two dollars a day, a deepening trade deficit which now exceeds the state’s foreign reserves, and a fiscal deficit expected to hit 6.5 per cent at the end of financial year 2007-08, 50 per cent higher than the target of 4.2 per cent.

Pakistan’s robust GDP growth has benefited a handful of its 165 million people and a handful of sectors like IT, telcoms, oil and gas, and banking. Agriculture-related sectors are not among them – and, with two-thirds of the population living in rural areas, the majority are reaping no rewards.

The price of a “roti” (the flat bread at the centre of most people’s meals) has doubled, bakers are raising prices of even non-wheat goods, and the cost of candles has more than doubled as demand soars in this era of “load shedding”, the local term for daily rationed power cuts. On the edge of the capital, residents still waiting for authorities to connect the gas forage in the forest for wood to warm their homes.

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The dire shortage of essential commodities – flour, power, gas, water – is symptomatic of underlying structural imbalances which the Musharraf government has failed to address despite official prosperity. The major parties’ historic shyness for taking unpopular decisions merely deepens the misery.

The PPP’s populist ideology could stop them again from advocating the tough decisions needed to address, for one, the power shortage. The blackouts crippling industry and small business stem from a power deficit of 3,600 megawatts. Yet Pakistan has an untapped potential of an estimated 50,000 to 60,000 megawatts of hydro-electric power.

Tapping into the hydro potential means building controversial dams, some of which have been on hold for 20 years. One of them is the proposed Kalabagh Dam in northwestern Punjab, which stands to provide up to 5,000 megawatts of power and millions of acres of water storage.

“The PPP is unwilling to take such decisions because it is populist,” says
Rasul Bakhsh Rais, Professor of Political Science at the Lahore University of Management Studies.

“In fact it’s an unsavoury option for any of the major parties. There is this notion in Pakistan that unless you have a national consensus, you can’t do anything.”

National unity is pushed by the PPP as one of their strong-points; never more so than in the wake of Benazir’s assassination on December 27. The outpouring of grief has been laden with lament for the loss of the most potent symbol of “Federation” – the unity of Pakistan’s four ethnically-distinct provinces plus the Northern Areas and part of divided Kashmir. The post-Benazir political discourse has focused heavily on her unifying effect of the varied ethnic groups from the Punjab, Sindh, Balochistan and North West Frontier Province (NWFP), who only became a nation 61 years ago in the post-colonial subcontinental carve-up. The PPP would have everyone believe that they are the only party that represents all of Pakistan. When Bilawal Bhutto gave his first address, angry and grief-stricken just three days after his mother’s murder, he vowed to preserve the “Federation”. “Like all chairmen of the PPP, I will stand as a symbol of the Federation . I stand committed to the stability of the Federation.”

At the same press conference, in the Bhutto ancestral home on the plains of interior Sindh province, her vengeful widower Asif Ali Zardari placated inter-provincial sniping from sob-wracked Sindhi devotees who had begun hurling slogans against the Punjab – the most-populated province seen as dominating politics and commerce.

“Punjabis have died in Punjab with your leader. Please respect them,” he implored, and upbraided others who raised questions about Pakistan’s survival.

The party is beset with rumours and speculation of division over the Maharaja-like inheritance of the party leadership by Bilawal, and Zardari’s assumption of a stewardship role. It has also come under surprisingly strong attack from the Western press accusing it of undemocratic leadership appointments, in contradiction to the party’s pronounced pursuit of democratic government.

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In retort the party again invokes the Federation and threats to it, presenting the Bhutto clan as the guardians of national unity. It’s an effective ploy as electioneering politicians and overseas pundits talk up prospects of Balkan-esque disintegration in Pakistan along provincial and ethnic lines.

Such talk is over-done, says political analyst Rais.

“It’s alarmist. It’s based on general ignorance. There is actually a marble pattern to our ethnic patchworks,” he points out.

“The provincial boundaries are not ethnic boundaries. Each province has an inter-woven pattern of ethnic groups. Internal migration been going on not just since 1947 but for thousands of years. People outside don’t understand, nor do many Pakistanis, that the constituent components of Pakistan, that is, the four provinces, form the core of the Indus Valley region. They are integrationist rather than separatist.

“Using ethnic break-up examples from other situations and applying them to Pakistan is self-illusory.”

More Balochis live outside Balochistan than in it. Even in Balochistan they are a minority among Pashtun and Punjabi immigrants. “Similarly in the Punjab and Sindh, the communities are all multi-ethnic. The patchworks are within provinces,” says Rais. Zardari himself is Baloch born and bred in Sindh.

Another analyst, however, believes that growing economic divisions may intensify provincial and ethnic fissures.

“The benefits of our robust growth are very geographical. North and central Punjab, Karachi, and parts of NWFP have done well, but interior Sindh, southern Punjab, all of Balochistan, and most of the Frontier have not benefitted from growth,” says Lahore-based economist Faisal Bari.

“Our increasing economic inequality
is showing increasing patterns of geographical disparity. Given the history of strong geographical and ethnic identification, and non-representative government, this increasing inequality will be perceived as the Punjab taking over and benefitting more than other areas and sectors.”

Long-needed reforms have not happened under Musharraf, Bari points out.

“The most pressing economic problems are because basic reforms have not been achieved even in times of prosperity under Musharraf. We have seen robust growth since 2003, we’ve seen fiscal space, but nothing has been achieved in reforming property rights, the police system, judicial system, the military’s role in the economy let alone in politics, and the non-representative nature of decision-making. All those reforms which we really needed to restore the economy never took place.”

Economic slowdown is inevitable, Bari cautions, once the bubble of growth is over.

“We’re back to a 1998-99 situation where we have a fiscal deficit, a trade deficit, and we are managing external payments largely because we get funds from overseas. But that can change.”

Whoever takes power in the forthcoming general elections will not have the luxury of a post-election honeymoon, or be buoyed by the fruits of previous economic reform.

The PPP has not issued a detailed economic policy in its campaign manifesto.

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“I don’t think they have any more radical plan on the economy than what we’ve seen over the past few years. The question is, can they take difficult decisions – that’s what matters,” says Rais.

Nor have other major parties offered a detailed economic rescue plan.

“Unfortunately the ideological template on the economy is the same when you look at all the political parties,” says Bari.

“They started the early-1990s with policies of privatisation, de-nationalisation, which offered a lot of opportunities for making money, and those kinds of policies are likely to continue. But all past governments have been handicapped in taking difficult decisions.”

The legacy of PPP’s founder Zulfikar Ali Bhutto, the prime minister toppled in 1977 and then hung by Islamist military ruler General Zia ul-Haq in 1979, is the creation of a network of the country’s landowning elite and espousal of the needs of the common man. He connected landowning rulers to the masses.

“He bridged the gap between the common people and the traditional elites. He eliminated the question of the legitimacy of traditional ruling classes,” says Rais. “Generally people saw Zulfikar Ali Bhutto as a leader with great passion for the common people.”

But the PPP must get serious about poverty alleviation and infrastruture reform if they are to keep that legacy alive.

Massive volumes of foreign aid have poured into Pakistan since it signed on to the War on Terror after 9-11, including 10 billion dollars from the US. There has been little trickle-down effect, and little transparency of how it’s been spent.

“The 10 billion from the US was military aid. There were no dividends for growth and economic performance. There is no accountability of army accounts,” says Bari.

Much larger income has come from foreign direct investment and remittances by overseas Pakistanis.

“It all went somewhere that produced some growth, but no sustainability, and no hope for people in terms of seeing where the economy is going,” says Bari.

“When Musharraf is on the defensive, apart from becoming obnoxious he also becomes confused because he can’t really point out where the economy is heading or from where growth is coming. That’s the main challenge for the incoming government: finding out the engines of growth, in what direction the economy is going, and how they place themselves in the global economy. Pakistan has opened up the economy but it hasn’t figured out what it will do in the

global economy.”

Bronwyn Curran is a freelance journalist based in Islamabad.