Pervez Musharraf
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Musharraf regime’s economic failure
A case of Musharraf regime’s economic failure
By Izzud-Din Pal
GENERAL Musharraf is preparing himself for a second term as president of Pakistan for the next five years. Since the military coup, he will have completed eight years as military ruler of the country, first by authority of martial law and then on the basis of the referendum which endorsed him as the head of the state and the 17th amendment which legitimised his position as General-President.
What have the people gained under his rule? According to his claim, he has successfully coped with extremism in the country, has worked for establishing democracy, and that his government has achieved a record economic growth during his rule. On the question of extremism, I have recently dealt with the question in my “No institutions built to promote ‘enlightened moderation’ (Encounter, August 25, 2007). The central point of my argument is that by running with the hares and hunting with the hounds, General Musharraf has not succeeded in his objectives. About the second point, how has democracy faired during his rule demands a separate discussion at a future date.
In this essay, I plan to deal with the issue of economic growth. In order to make a meaningful assessment of this question, it would be useful to briefly study the issue in the context of the claims made, and not by invoking comparisons with previous governments, which belongs to the realm of historical analysis. We could use a recent assertion made by a government spokesman suggesting that the country has experienced an unprecedented growth during the last six years as a focal point. According to him the important factor which promoted this growth was the beneficence of General Musharraf’s authoritarian rule over the country. Would the general agree, to be identified as an authoritarian ruler? The spokesman nevertheless emphasised that this was in fact a necessary condition to establish suitable environment for growth. This matter needs to be examined.
It is well known that economic growth refers to a change in the national product from one period to the next. It reflects the total expenditure on goods and services incurred (consumption+investment+net trade balance) and it is calculated on a quarterly and annual basis. The foundation of the economy then is its capacity to produce and it expands as its capacity to produce increases. The crucial factor is related to the issue of capacity which is ascribed directly to increase in fixed investment (net addition in machinery and equipment) in a given period of time. This is how the process of economic growth is sustained.
In all official reports, it is stated that under the leadership of General Musharraf and that of the prime minister, the economy has moved through a steady growth, reaching 7.0-7.5 per cent per annum in 2006-2007. Is the economy then on its path to emerge as another tiger, as the prime minister has said in several of his statements? A quick response, and an appropriate one, would suggest that the country has experienced some growth and a lot of Great Bubble on top of it. Great Bubbles have many common characteristics in economic history, including high consumption, inflation, stock exchange boom and real estate bonanza. Often they remain insipid over a long period of time but get out of control if not corrected through appropriate measures in monetary and fiscal policy.
Of course, a Great Bubble can turn into a real achievement, if a good part of the windfall incomes received is channelled into saving. Propensity to save, however, is not a habit among rich Pakistanis, according to available data. In fact, Pakistan’s saving rate is quite low, even by Asian standards.
The official reports admit that for the last five years, consumption has been the leading force in the economy. There has also been timely rainfall, bringing increase in agricultural output, not in productivity. What are the sources of finance which have encouraged the spurt in consumption? It seems that the flow of family remittances has not really much changed in its usual trend. Also, foreign assistance may have caused some statistical boost in the consumer value-added. Not all of this spurt can be then explained by these two factors. The issue, therefore, remains a mystery. It has, however, put a lot of pressure on price level. What is the real purchasing power, for example, of the suggested $925 per capita income is not difficult to calculate.
And the fundamental condition to turn the Great Bubble into economic growth is that there should be a significant net increase in real fixed investment in the country, as mentioned above. The high level of consumption can only deter the realisation of this objective. With the exception of foreign investment (made available in gross figures only) in highly capital-intensive sectors in utilities and natural resource exploration, there has not been a change in the situation in this regard.
Another consequence of this phenomenon has been that the gap between the upper and lower classes has been increasing. By itself this income inequality is unacceptable for a country where the standard of living is quite low. The available data also seems to indicate that the threshold of income at the middle and lower levels is quite frozen, unlike many other countries. And how much has poverty been reduced in the country is a controversial issue with not many national and international observers agreeing with the official position.
What is missing then in the story of Pakistan’s achievement in regard to economic growth is the lack of focus on the pre-requisites for achieving a sustained increase in income and output. The productive capacity, for example, was substantially increased in the Ayub Khan period, but the history has never repeated itself since. It was not because he offered stability to the economy by virtue of his authoritarian rule. The new international emphasis on development in the sixties had provided a challenge to which there was a suitable response, against the background of the new country’s potential for utilisation of its raw materials and manpower.
A policy of economic growth without emphasis on distribution was followed and openly admitted by economic advisors to General Ayub Khan. And under the authoritarian rule, the atmosphere was emendable for pursuing this objective, and it was facilitated by transfer of saving from agricultural sectors, in both East and West Pakistan, to the industry mainly situated in West Pakistan. With authoritarian rule and with no representative government in Karachi, a strong sense of alienation gradually developed in East Pakistan. The results are now well known.
During the Ayub Khan period, a policy to promote economic growth in its narrow sense (net addition in productive capacity) was pursued, as mentioned above. The state of under-development in the country, however, would have called for a comprehensive policy for economic development (the paradigm of development connoting a broader spectrum than growth) in the country. There is rich scholarly material on the subject available in the literature, known as the prerequisites of growth. Their list is long but I would focus briefly on one of them for reasons of space, the role of education in the economy.
Education at all three levels –– primary, secondary, and tertiary –– is intimately related to each other. In fact, the specialists agree that the skill for reading and writing acquired at the primary level is of fundamental importance. Education has several backward and forward linkages with productive capacity. In a production process many jobs, for example, call for basic skill which can be provided mainly by primary-secondary level education; and at the tertiary level, there is a role for innovation, to acquire, to create, or to do both.
This economic reality is well known and it was the secret of success for the 19th century development of Japanese economy. It has also been the secret of success for Taiwan and South Korea in the post-Second World War period. In the early fifties, according to a fad prevalent among social scientists, especially in the US, prospects for economic development in the Pacific region would be hampered seriously by Confucian teachings. This fad was soon etiolated by the changing reality. Shortly after the founding of the People’s Republic, the Chinese government took education as matter of priority and today 91 per cent of the country is under compulsory primary education.
In contrast, the officially claimed rate of 54 per cent in Pakistan is considered grossly inflated by many observers in the country. Besides, “literacy” is usually defined in a highly loose manner. Universal primary education in Pakistan is a myth. More than half of the children from age five to nine are not enrolled in schools, and either many of these schools do not exist or are counted in the figures but are in fact phantom institutions.
I would end my observations with the following excerpts from an address to the nation delivered by General Musharraf on March 5, 2002: “….I come to education…you know human resource development is one of our top priorities. We cannot progress unless we improve the quality of education….We want to improve our literacy level. We want to bring about a qualitative improvement in our education…..”
2008: Political crisis
From the archives of "The Times of India": 2008
Musharraf vows to fight it out
A combative Pervez Musharraf vowed to slug it out in Pakistan parliament which began its crucial session as the ruling coalition got ready to impeach him for alleged misconduct, violation of the constitution and financial irregularities.
Ignoring mounting pressure from both friends and foes to quit before the National Assembly initiates the impeachment process, Musharraf said he would prove “false before the nation” all the allegations levelled against him by the ruling coalition.
The session of the 342-member assembly commenced this evening as the PPP-led coalition said it has drawn up an “unimpeachable” chargesheet listing allegations of misconduct, violation of constitution and financial irregularities against Musharraf.
“It will be an unimpeachable document supported by documentary evidence of all the acts of omission and commission committed by Musharraf that make him liable to impeachment several times,” PPP spokesman Farhatullah Babar said.
The panel drafting the chargesheet has made “significant progress” in listing the charges against Musharraf, he said. Officials said the charges against the president are likely to be filed later in the week amid a rising clamour in the ruling coalition that he step down.
Presidential spokesman Gen Rashid Qureshi said Musharraf will not resign “in any situation” and battle it out. Musharraf will have the right to defend himself after the impeachment motion is moved. Ahead of the National Assembly session, Musharraf held talks with his supporters in the opposition PML-Q during which he vowed to prove “false before the nation” all charges against him, the local Geo TV reported. After the four provincial assemblies pass separate resolutions asking Musharraf to seek a vote of confidence, the PPP-led coalition will submit an impeachment motion and chargesheet against Musharraf in the National Assembly.
Babar said the coalition had uncovered evidence of “horrendous” crimes allegedly committed during the beleaguered president’s rule. He did not elaborate.
“We are in the government now and have access to many previously confidential documents. After going through these documents, we are surprised over the horrendous nature of the crimes committed by President Musharraf during his almost nine-year rule,” he said without commenting on reports that the charges included those of corruption and murder. While there have been questions as to whether the coalition had the numbers in the two houses — the National Assembly and the Senate, Zardari said he was “110% sure” of the success of impeachment motion.
Both houses of parliament have a combined strength of 442, and the motion will have to be passed by a twothirds majority or 295 members. Anti-Musharraf parties have a total of 274 members 235 in the assembly and 39 in the Senate which is short of the magic number.
Meanwhile the spokesman for Musharraf Gen Qureshi denied that the embattled leader had “misappropriated” millions of dollars of military aid provided to Pakistan by the United States since the September 11, 2001 al-Qaida terrorist attacks. AGENCIES
Embattled Pervez seeked Saudi Arabia’s help
Disappointed by his American friends, President Pervez Musharraf, who faces impeachment by the ruling coalition, has sent an “SOS message” to the Saudi authorities, a source said on Monday. “The message was sent through a senior Saudi diplomat based in Islamabad,” the source said, adding the president has received a response that is “not very positive”. The source said the Saudi authorities, however, are sending a senior government official to gain a first hand view of the situation arising out of the impeachment move. The source said that Saudi ambassador to Pakistan Ali Awadh Asseri would also be soon returning home after cutting short his private visit to his homeland. Musharraf, when he seized power in October 1999 after overthrowing prime minister Nawaz Sharif, had sent him into exile in Saudi Arabia.
US position
US fights for giving Mush safe passage
Chidanand Rajghatta | TNN
FROM THE ARCHIVES OF ‘‘THE TIMES OF INDIA’’: 2008
Washington: The Bush administration, for long a patron of Pakistan’s military strongman Pervez Musharraf, has decided to let go of its ward amid growing momentum for the civilian democratic government’s move to impeach the fading “president” who derived much of his strength from the army and Washington.
Washington has discreetly made it known, through key officials, that the impeachment proceedings are the “internal affairs” of Pakistan and the US will respect due process, but has also conveyed that Musharraf should be given immunity and/or safe exit from the political lynch mob should he decide to step down before lawmakers formally move against him.
There is growing expectation that Musharraf will step down after a farewell address to nation on August 14, Pakistan’s independence day, although his aides are contesting reports to that effect. But Washington has already signalled a hands-off approach.
“Our expectation is that any action will be consistent with the rule of law and the Pakistani constitution,” was all a state department official would say last week after the White House decided not to back Musharraf in his scrap with the new civilian rulers, having ascertained that the Pakistani army is also not willing to interfere in the process.
However, both players —America and army — have conveyed that they would like the civilian dispensation to abjure the politics of vendetta and allow the retired general to defend himself. US interlocutors, including Washington’s envoy to Islamabad, Anne Patterson, are said to be in consultations with Musharraf, his successor army chief, Gen Ashfaq Kayani, and the new civilian leadership, to arrange for a climb down and a possible safe passage for Musharraf should he decide not to go down the path of confrontation.
With more and more Pakistani lawmakers, including prominent politicians who thrived under his dispensation, ditching Musharraf in the last few days, his days seem numbered. Some of the political players, including Musharraf’s current nemesis Nawaz Sharif and the scions of the Bugti clan, whose paterfamilias Nawab Akbar Khan Bugti was killed on Musharraf’s orders, are playing hardball and insisting that Musharraf will be tried. There are fears that such sentiments might generate a lynch mob.
While the US is ready to sideline Musharraf, it does not want humiliation for the man who served its cause initially and earned warm praise from its president before he fell foul of the White House. Speculation is rife in Pakistan about how Bush has avoided phone calls from Musharraf even as Washington is busy arranging exile for the fallen military ruler.
The US position on Musharraf changed followed a growing body of evidence that he may have played a double game in not only the war on terror, but also in the carefully crafted US plans to bring about a rapproachment between him and Benazir Bhutto and push Pakistan towards a quasi-civilian form of government with a strong military influence. A stunning disclosure based on communication intercepts by US intelligence in American journalist Ron Suskind’s new book ‘The Way of the World’ shows Musharraf literally toyed with Benazir Bhutto’s life before she was snuffed out by an assassin.
“You should understand something,” Musharraf tells Bhutto in one conversation. “Your security is based on the state of our relationship.” The conversation takes place during Bhutto’s meeting with US lawmakers at Capitol Hill, including John Kerry, and state department officials, Suskind says, at a time when she was insisting on the repeal of the provision prohibiting a third term for prime ministers.
Musharraf derived his backing from Washington mainly on account of the Pentagon’s and CIA’s long institutional relationship with their counterparts in Pakistan and political support from the vicepresident Dick Cheney’s office. But increasingly, both the US military and intelligence began to provide evidence of Pakistani malfeasance in the war on terror, including Islamabad’s covert support for Taliban, forcing the political players in Washington to fall in line.
