Pakistan - a state in economic crises - II

Political independence or governance: The creation of a separate political state has no direct relationship with the economic mindset of the common man and their inspiration. Lack of economic and political considerations and economic realities of common man in the pre and post-independence eras needs to be taken into account to understand the effect of a political change, and the manner in which it ended, effecting the lives of the common man living in this area. It was not as was anticipated.
One scion of a business family in Kathiawar Gujarat has narrated an interesting episode between Mohammad Ali Jinnah and the businessman of Bantva Gujarat about the economy during a visit of Jinnah to that area for fund collection. According to him the businessmen who were largely big traders, argued that with the limited geographical boundaries, which Jinnah was seeking as Pakistan, their sphere of operations would be curtailed and it would result in a loss for the community.
Jinnah answer was not how things ended after the partition. At this stage, we are not arguing about the political and social reasons for that division. The question before us is whether or not the question of actually limiting the hemisphere was thought through, at that time. The answer is in the negative. The purpose of narrating this episode is to identify the perception and the consequences of redefining the dividing lines drawn for trade and commerce, with other parts of India that did not form Pakistan. Was that the part of the economic agenda of the two nations' theory?
The answer is again in the negative. The primary purpose of this analysis is to identify the economic interdependency and comparative advantage that could have been explored, if drawing a political line had not halted the social, trade and commercial relations between the people living on either sides of the border. It would have solved our security issues and expenditure on that also.
We have to look for the answer to what Jinnah had in mind about his economic interests in Bombay on August 14, 1947. There was no concept of halting that economic relationship, however events in the subsequent period forced us to depart. The question here is not to undo history, but to identify the fact we have incurred substantial costs in losing that comparative advantage by losing a big market of around 50 million people at that time, which now consists of over 100 million people.
UNEXPECTED AND UNPLANNED MOVEMENT OF PEOPLE ACROSS THE BORDER IN 1947 The interdependence of the economies of this region and other parts of India was an economic reality. In addition to the same the economy and society prior to independence was not divided on religious lines. The political set up of the region, now consisting Pakistan was predominantly Muslim on account of their population, however the economic reality was different. Non-Muslims had very serious and well established economic interests in this region.
Take the case of Hindu business interests in Lahore and Sindhi Hindu dominance in economic fields throughout Sindh. Two major textile mills in Lyallpur (now Faisalabad) and Okara were owned by Hindus and the same was the case of a cement factory in Karachi. Almost the same was the case of Balochistan. In addition to the same, such non-Muslims had a significant role in other fields such as teaching, medical, engineering and others.
There was no planned migration on the either side, when the division of India was decided. Britishers, the Muslim League and Congress were unanimous on political division only. All of them and whole the population of united India were not ready for this established economic upheaval in society of this region. History reveals that the ultimate fate was different.
The effects of this mass migration on both sides of the border were different from the overall economic viewpoint. In India, which was a bigger state, having a well-established society it was a form of 'absorption'. In this part, Pakistan, the effect was different and the people who mostly migrated from East Punjab and the United Provinces filled the 'vacuum' that was created on account of political changes in 1947. That economic transformation of society is still in process. The whole economic structure in this region effectively came to a standstill and was actually recreated. One episode will clarify the issue being raised. When Partition happened in 1947, almost all the students of class of B.Com, Part-I, of Hailey College of Commerce, Lahore were non-Muslims. All of them migrated to India in 1947. Therefore in 1948, there was no class for B.Com Part-II as there were no students left in Part-I to be promoted to Part-II. The new principal, who was also a person who had migrated from another part of India had to persuade students to join commerce and they were provided incentives to do so.
This vacuum that occurred in 1947, had a deep effect on the socio-economic structure of present Pakistan. The position in Sindh was more serious. Mass migration of people, mostly from the United Provinces, effectively filled the vacuum that was created with a similar migration of non-Muslims from this area. We have instances of railway stations being closed for the reason that no trained station master was available. The purpose of this discussion is not to describe the history and political effects of such settlements. The objective is to identify the weak fragmented economic foundation on the economic front with which this state started. The political decision, which overtook economic considerations and lack of emphasis on economic well-being which was not the guiding force behind the movement. That trend still persists and the economic well-being is only a part-time subject not the 'object' of the policy framework of the state as a whole.
PRIMARY ECONOMIC FAULT LINES The first premise is that what happened in 1947 is not the result of any change in the economic structure of the society in the areas that formed Pakistan. This is the reason of a sense of maintaining a status quo in real terms. Furthermore, after August 14th 1947, a new state came into existence without any major industrial infrastructure, economic vision, economic planning, hostile relations with the eastern side, now Bharat, that used to be a part of an integrated economy of the area that is now Pakistan, since time immemorial.
In these circumstances, it was not possible to imagine an economic success story for the nation formed with so many fault lines. If ultimate results are tabulated now, there are clear successes in many fields. Nevertheless, there has been a complete failure in providing primary economic security, sovereignty and future to the common man that has lead to all other consequences.
THESE PRIMARY FAULT LINES MAY BE SUMMARISED AS FOLLOWS:
(i) Disconnect between government and the people in respect of economic planning;
(ii) Political movement for separation not supported by any economic agenda;
(iii) Inherent desire and interest in maintaining status quo;
(iv) Hostile relations with interdependent economic region;
(v) Trade imbalances; and;
(vi) Defence and security overriding economics since inception.
These six primary fault lines, which will be discussed in detail in the following paragraphs, that existed in 1947, are the main causes of present state of affairs of the state. In many cases, there are fault lines in socio-economic structures of states. However, the tragedy of the state of Pakistan is that if we sit down in 2012 and analyse, such fault lines have widened and been perpetuated rather than being resolved.
VACUUM IN THE GOVERNANCE STRUCTURE AND ECONOMIC PLANNING Areas, forming Pakistan were reasonably well managed by the Britishers till 1947. On their departure, there was a complete vacuum in governance, administrative and judicial structure. Unlike India, where the democratic process started just after partition, there came into being a link between the peoples' mandate and governance and economic structure. There was no such possibility for Pakistan.
The Britishers had designed the governance and administrative system t0 suit their own political and economic needs. The system was dictatorial in appearance, however looking at it from Westminster's eyes, in their interest, it was democratic. There were serious democratic debates in the British Parliament to ensure that the Indian government was run in their interest on merit. The rulers were accountable to their people for their action and in all circumstances, the economic interests of British Empire and the British population were supreme. Each budget of India was seriously debated to ensure that British economic interests were safeguarded.
At partition, there was a complete vacuum in terms of the common man's participation and accountability. The country had its first election on adult franchise in 1970 (almost 25 years after independence). The vacuum that had arose in 1947 was never filled as the domestic bureaucracy that effectively ruled from 1947 to 1970 and till now, justified their action through an alliance with unelected religious elements and notional ideas about defence. Nevertheless, since our scope is limited to economics, what happened in Pakistan is that since 1947 to date, all primary economic decisions for Pakistan were not taken with public participation and for the benefit of the common man. A vacuum existed at the beginning, which is till now constantly widening. That is the reason that whenever we talk about economics there is the notion they (government) and us the (common man) and there is an inherent 'disconnect' between the two. If we analyse all the economic policies since independence, it will be clear that the common man's inspirations were not the people in power. Therefore, when in 1970, the people were asked to give a mandate on an adult franchise basis, they voted for parties which were effectively taking care of economics. It is another issue that history proved that those parties (People's Party) were themselves not clear about their economic policies and the manner of their implementation.
Pakistan's economic planning and policies, if any, made since 1947, never had the people's mandate and the same was fully dedicated to the unelected people.
(Concluded. This was the second part of a two-part article "Pakistan - a state in economic crisis". The newspaper carried its first part on August 23, 2012)