Pakistan’s Economy under Musharraf 1999-2006

BOOK REVIEW: Living in ‘The Age of Burki’ by Khaled Ahmed
Changing Perceptions, Altered Reality: Pakistan’s Economy under Musharraf 1999-2006; Oxford University Press 2007

If the education sector is with the provinces, and the provinces don’t know how to collect and spend money, making big allocations for education could be an extravagance, as happened in Sindh in 2007 when the chief minister left office, like his predecessor, without meeting primary education targets

No other economist has responded to the challenge of interpreting Pakistan’s economic life the way Shahid Javed Burki has. If you read his column in Dawn on the latest crisis and marvel at the depth of his knowledge about anything to do with Pakistan, you should know that you are living in The Age of Burki, so alone does he stand in the field of comment on the country’s economic health. Don’t compare him with columnists. He has written too many books to deserve the evanescent title of those who flourish only on the newsprint.

His books on Pakistan validate his credentials: Pakistan Under Bhutto, 1980; Pakistan under the Military: Eleven Years of Zia-ul-Haq (with Craig Baxter), 1991; Pakistan: Fifty Years of Nationhood, 1999; A Historical Dictionary of Pakistan, 1999. The book under review was first conceived as Stepping Back from the Abyss: Pakistan under Pervez Musharraf, but his recurring Rostowian hope of another ‘take-off’ stage in the life of Pakistan’s economy was somewhat dampened by the reaction he received from prime minister Shaukat Aziz when he delivered him his first warning on Islamabad’s laissez-faire treatment of the consumer economy.

The reaction was in fact a threat. Shocked, Burki changed the title to Changing Perceptions, Altered Reality of what became a book on the trot to coincide with the events that unfolded towards the end of 2007. The conclusion of the book under review was written in the winter of 2006-2007, which should give you the depth of Burki’s predictive grasp of the events that unfolded twelve months later.

At a seminar in Washington in 2006 he had told Pakistan’s governor of the State Bank, Ms Shamshad Akhtar, that Pakistan’s was a ‘casino economy’ where ‘inflation had increased, trade deficit had grown to a point where balance of payments was becoming a burden on the health of the economy; a number of commercial banks exposed to a wide variety of consumer loans had a weak and weakening asset base; and investments were being made in the more speculative parts of the economy’ (p.31).

The epithet ‘casino economy’ he had first employed when telling Mexico in 1994 that its economy was being reared on the sands of a gigantic trade deficit and foreign borrowings. Casino would mean people strolling in, putting in their money for short term gains at the stock exchange, and then taking it out quickly as if walking out of a night club. But that doesn’t mean that Burki was blind to the achievements under Musharraf; even after being the Cassandra that riled Shaukat Aziz into issuing a threat, his verdict is that the glass of the national economy is half full, not half empty.

Days before the 2008 elections, Pakistan’s political parties ended up giving top priority to the education sector in their election manifestoes, promising to lavish astronomical amounts of the national wealth on educating the people of Pakistan, without any experience in the past of handling national education. Burki goes to the crux of the problem, saying education is a Muslim problem because the sector is backward in the entire Islamic world, and pinpointing that ‘the study of Islam was introduced as a compulsory part of the curriculum in Pakistan in the 1970s and the 1980s...in order to placate a small but influential segment of society’ (p.177).

Throwing money at education therefore will not solve Pakistan’s crisis of the quality of homo pakistanicus. As John Dewey said, what you think is education could be something that human society could be better off not having. And if the education sector is with the provinces, and the provinces don’t know how to collect and spend money, making big allocations for education could be an extravagance, as happened in Sindh in 2007 when the chief minister left office, like his predecessor, without meeting primary education targets. Education budgets are usually returned unspent, which may be just as well because the poisoned ‘curriculum wing’ at Islamabad was not changed even by an enlightened Musharraf riding the reluctant mule of the ‘chaudhry’ PML.

(A speaker at Burki’s book launch in Lahore this month spoke critically about there being three systems of education in operation in Pakistan — the same as in India, the rising Muslim madrassa included - that produced three different minds. He seemed to recommend the cultivation of uniformity in the national psyche, little realising that levelling the three systems in operation through an ideological state’s apriorism would produce nothing but indoctrinated mediocrity. It is remarkable how threateningly uniform the Pakistani students’ mind already is today, thanks to Islamabad’s ‘curriculum wing’, while the infamous ‘three systems’ are in operation. According to linguist-scholar Dr Tariq Rehman, the most pluralist mind is being produced by the market-driven English medium system through an undermining of the ideological state.)

Burki calls in question Musharraf’s sincerity in insisting on the primacy of the economy when he blames him for not moving on the question of trade with India, not granting it the Most Favoured Nation (MFN) status under WTO, and perversely not ratifying the free trade agreement with India by attaching the impossible conditionality of Kashmir issue to it (p.130). Pakistan understands geopolitics as politics of obstruction of trade lest it convert Pakistanis from warriors to a nation of traders. Burki believes that free trade with India would benefit Pakistan more than India.

Although a confessed advocate of the ‘two-nation theory’ - which has done so much harm to Pakistan’s human rights map - he thinks Pakistan should free-trade with India, and let Kashmir wither on the bough, through his internationally financed $25 billion economic uplift programme in the two Kashmirs. Musharraf, by using trade as an instrument of pressure on India, displayed his ignorance of what had really happened during jihad. Burki writes: ‘The Kashmir problem continues to create uncertainty about Pakistan’s future and adversely affects its ability to attract foreign capital and foreign businesses into the country’ (p.290).

There are arguments that Pakistanis just don’t pay attention to and one is that of poverty reduction. Burki calls it the problem of ‘relative deprivation’ where comparisons with India become irrelevant. He quotes Samuel Huntington from Political Order in Changing Societies (1968): ‘Increase in inequality, even if it is perceived and not real, can be politically and socially destabilising’ (p.46). He talks again about his statistical analysis proving that there was poverty reduction under military rulers simply because they removed the political instability that the politicians tended to bring in with democracy.

In the case of Kalabagh Dam, he thinks Musharraf should have realised that the universally admired Indus Basin Treaty of 1960 with India was signed by General Ayub against the wishes of the people of Pakistan; Musharraf was simply not tough enough on Kalabagh Dam on which two World Bank studies were ignored by the anti-dam sub-nationalists of the smaller provinces. Musharraf doesn’t know what harm his backing off in the case of the dam - as also his misplaced bravado vis-à-vis India on the question of free trade - has done to Pakistan. Unfortunately, Shaukat Aziz was no Burki, but had he been, he could have at least tried to persuade Musharraf to do the right thing by Pakistan. *