Monday, December 24, 2007

Who Owns Pakistan?

A friend of mine recently sent me a book titled "Who Owns Pakistan?" by Mr. Shahid-ur-Rahman. My first impressions and commentary after scanning this book are as follows:

First Impressions:
This seems to be a well-researched work by the author on a subject that has received very little independent scholarly attention. While it singles out Z.A. Bhutto's nationalization in the 1970s as the biggest culprit, it also includes a good description of how industrialization was stymied in Pakistan by successive governments while feudal rulers continued to take their toll on any middle class growth essential for civil society and democracy. The author argues that the Bhutto era nationalization has left such "deep scars on the psyche" of Pakistani industrialists that, to this day, these industrialists are not willing to make long-term investments in big industrial projects with long gestation periods. The military governments have, in fact, been more pro-industrialization because the military elite benefits from the manufacturing sector as much much as it does from real estate and agriculture sectors.

Comparisons with India:
Whenever we discuss Pakistan, comparisons with India are inevitable because we have such a long shared history and both countries became independent at the same time. Looking at the Indian experience, the Indian Congress governments were not particularly friendly to industries as depicted well in the Bollywood movie "Guru" based on the life of Dhirubhai Ambani. The semi-literate Ambani built a multi-billion dollar empire called Reliance Industries in India. However, Congress and Nehru were really hostile to the feudal system and brought it down almost immediately after independence in 1947 through
real and extensive land reform that reduced individual and family land
holdings to a few acres each. In spite of his deeply held socialist beliefs, Nehru was a pragmatic leader and believed in industrialization. He recognized that India needed a strong higher education system to support industrialization. The renowned IIT system was, therefore, started in 1951 by Prime Minister Jawaharlal Nehru and Education Minister Maulana Abul Kalam Azad with the first IIT in Kharagpur inaugurated by Maulana Azad on Aug 18, 1951. Maulana Azad was also the person who brought Birla and Nehru together after Liaquat Ali Khan as Finance Minister in 1938 started investigating Birla for his cash contributions to the Congress party. Recognizing the contributions of Birla and Tata to Congress in the struggle for India's independence, Nehru gave special treatment to both of the industrialists and asked them to help in India's industrialization.

Actions by Nehru and Congress in India were in sharp contrast to the policies pursued in Pakistan. There was no strategic thinking or vision to start anything like the IIT system in India or to reach out to the industrialists who chose to come to Pakistan. Instead, these policies allowed thousands of acres of land in the hands of a few Pakistani feudal families such as the Jatois and the military elite while Pakistan's leader ZA Bhutto presided over the destruction of the nascent industrial sector that had just started to take off under President Ayub in the 1960s. Like Tata & Birla, some of the Pakistani industrialists such as the Habibs and the Haroons helped in Pakistan's independence movement and, immediately after independence, Habib Bank had bailed out Pakistan Government with a huge loan in its early days to cover its budget deficit. However, Bhutto showed no recognition of their help during his nationalization campaign in the 1970s. All of Bhutto's favors were reserved for his feudal colleagues who assumed leadership positions in his administration. These are the conditions under which Pakistan could not move from feudal to industrial society and the middle class could not grow to sufficient strength to demand real democracy based on rule of law.

Privatization in Pakistan:
Nationalization had finally been recognized as a failure in Pakistan when Benazir Bhutto became prime minister in the early 1990s. During the two terms each of Benazir and Sharif, each embarked on rolling back ZA Bhutto-era nationalization by privatizing hundreds of industrial units. However, the privatization efforts by both have now been documented by author Shahid-ur-Rahman to be marred by massive corruption involving a giveaway of multi-million rupee units for the token prices of a few rupees. The sales of these units did not make even a small dent in the national debt.

Pakistan Under Gen Musharraf:
Since "Who Owns Pakistan" was published in 1999, the last eight years under Gen Musharraf have seen the return to annual economic growth of 6-8% with significant new domestic and foreign investment in industries, particularly telecommunications, financial services and infrastructure development. Pakistan's GDP has more than doubled. The number of telephones has soared to 50 million from a mere 600,000 six years ago. The privatization of banks has led to a huge increase in the production and sales of cars, motorcycles and, perhaps most important, TV sets. From a strictly economic standpoint, military rule in Pakistan appears to have been a lesser evil. But, regardless of what one might think about the merits of military rule, Pakistan has seen significant growth under General Musharraf and his hand-picked Prime Minister Mr. Shaukat Aziz. By all accounts, the ranks of the middle class have been swelling in Pakistan during Gen Musharraf's rule. According to Tara Vishwanath, the World Bank's lead economist for South Asia, about 5% of Pakistanis have moved from the poor to the middle class in three years from 2001-2004, the most recent figures available. As expected, the prospering middle class has demanded more than just economic benefits. The middle class is now demanding democratic reform that bodes well for Pakistan in the long run. However, this class is still small relative to the population in Pakistan. It just needs to be cognizant that impatience on its part can roll back the gains made in the last eight years.
The Higher Education Commission under Dr. Ata-ur-Rahman Khan has seen a tremendous increase in HEC budgets with the opening of dozens of new universities and large number of scholarships to study abroad. My hope is that, if the economic, education and industrial growth continues at the current pace for another decade, we can expect a much larger, more powerful middle class to emerge that will successfully challenge the feudal and military rule in the not-too-distant future in Pakistan. We might even see real land reform at some point to free the unwashed masses in rural and tribal Pakistan. Feudal system might even fizzle out by itself as the vast landholdings get distributed among the feudal offsprings over the next couple of generations.

The Indian Exception:
Among the less-developed nations in Asia and Africa such as India and Pakistan, India remains a unique example of a country that has only partially industrialized but it remains largely democratic in spite of the majority of its people not being served well by its successive governments. There seems to be only one plausible explanation for the Indian exception as a democracy: India's sheer size and diversity make it very difficult for any military to govern it but I think the early and effective land reform in India has been one of the key factors in its ability to free the average people who chose to sustain democratic institutions over other alternatives. With the recent emergence of a powerful middle class in India, India's democracy has been further strengthened.

Conclusion:
Pakistan remains decades behind India in establishing democratic institutions by failing to limit the power of the feudal lords,the military generals and the clerics.
The recent economic growth has helped propel the middle class as evidenced by the growth of the media and the powerful resistance to military rule by the civil society including the lawyers, the media and various NGOs. However, the Pakistani middle class is still relatively small to bring about a fundamental change. It needs to grow at the current pace for at least another decade. The challenge for India is to enable sharing of its new-found wealth and opportunities with the rural folks who have not yet participated in India’s progress.

15 comments:

Revolutionary Republican said...

Your analysis seems to be pretty impressive.Congress not only brought land reforms in the country, it made several other efforts which were needed for an independent country. Education system was improved and modernized under the first education minister Molana Abul Kalam Azad who was himself an eminent writer and educated politician.Hindi was encouraged throughout the country to develop language harmony.Large industrial projects were established by the government with Russain and foriegn cooperation.Atomic research was highly encouraged.All this has resulted in social growth and progress.In 1947, there were few industrial centers like Calcutta, now there are several like Hyderabad,Bangalore,Jamshedpoor etc.It is not right to say that Congress discouraged industrialization because Congress leaders had very close relations with groups like TATA and BIRLA which had major industrual share in Indian economy.Another advantage in India has been a continual stay of democratic government which has led to foriegn investment.Congress also adopted an approach of simplicity in government spendings and discouraged foriegn items of luxury.

Riaz Haq said...

Dear Revolutionary Republican:
You are right on both counts re India: Education and Tata/Birla. The renowned IIT system was started in 1951 by Nehru/Azad with the first IIT in Kharagpur inaugurated by Maulana Azad on Aug 18, 1951.
Maulana Azad is also the person who brought Birla and Nehru together after Liaquat Ali Khan as Finance Minister in 1938 started investigating Birla for his cash contributions to the Congress party. Recognizing the contributions of Birla and Tata to Congress in the struggle for India's independence, Nehru did special treatment to both and asked them to help industrialize India.

KHWAJA AFTA ALI said...

FACTS ON THE GROUND IN PAKISTAN.Reference to the Islamic history and Pakistan’s independance period, I want to go a step further and will recomend to select/elect every Chief of Army staff as president after retirement and the present Army chief should be be given extra time for his oustanding services at national and international level and all other Corps. Commanders of the Army and COS of Airforce and Navy should be apponited Governors and Deputy Governors of the provinces and regions ( by creating regional governments in all four provinces, 2 in Punjab 1 in each province- these regions already exist based on language, culture and history , such as Saraiki, Potahari, Upper Sind-Sukkar, Dera Ismail Khan in NWFP and Gawadar- Balouch Area. And all additional bureaucrates who love to live in provincial capitals should be trasfered to these remote areas of the country. These new regions should invite and attrect the foreigner and Pakistani origin people to invest in the area to creat jobs and eliminate poverty.) This is the only way we can stop further intereption/ coup in Pakistan . After all armed forces personnel are wel diciplined and organized . And above all represent Pakistan’s divercified population.And it;s leadership do not transfer within family but earned by hardwork and talents only. Every second family in Pakistan is represented in the army one way or the other and the Pakistan Army is the only ever lasting popular party-yes it’s an important ruling party other than Bhuttos and anti-Bhuttos, Sharif brothers. With this arrangement no one is loser except few feudals and industrialists, who reprent non of the masses in Pakistan. We already have a quota system applied for superior services since 30 years and had killed thousands of innocent talented young people, why not try this arrangement for the welfare of the country which will effect none but very few so called politicians who after all deal with generals, behind the curtains.And it’s good to know that supporters of these politician are 500/600 Mafia families who live in 125 districts in Pakistan and provide so called public leadership for national, provincial and local levels. Any restriction to stop them is useless. Recent example of education condition brought their unseen educated women forward in politics. All 8000/9000 candidates in recent elections were from the same mafia group who are the biggest law breakers and around 1000 leading law breakers have been elected as new law makers who will take care of themselves but none. They all are involved in worst kind of crimes on this earth against humanity with the colaboration of junior police officials.An enquiry by a nuetral agency may prove my claim.WOULD THE EDITOR PUBLISH THIS LETTER in the larger interest of the nation. KHWAJA AFTAB ALI,(a former Secretary Iranian Embassy, Saudi Arabia,1975-88), first and only post graduate of Intellectual Property Laws on scholarship from USA. Residing in Orlando, Florida.U.S.A. email.all_languages@ hotmail.com phone 4077293983
Posted by Khwaja Aftab Ali, Advocate & I.P. Attorney, Pakistan

Anonymous said...

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Sikander Hayat said...

To read more about Pakistan please visit

http://real-politique.blogspot.com

Riaz Haq said...

Here's report on water related corruption in Pakistan:

"Pakistan’s irrigation network has always served the privileged elite at the expense of the poor. World Bank and government programs have consistently favored feudal landowners. When the irrigation system was established, the government failed to recognize the land rights of the original inhabitants and allotted irrigated plots to rich landowners and military personnel. While large and very large farmers control 66% of all agricultural land in Pakistan, almost half of all rural households own no land. A World Bank evaluation noted in 1996 that the bank’s projects "provided large and unnecessary transfers of public resources to some of the rural elite."9

The top–down engineering approach to Pakistan’s water sector has also caused massive collateral damage downstream. The Indus Basin Irrigation System starves areas of Sindh province – and particularly the Indus Delta – of water and sediment. And because the sediment trapped in the reservoirs does not replenish the delta, close to 5,000 square kilometers of farm land have already been lost to the sea. Meanwhile salt water is intruding 100 kilometers upstream in the Indus. The lack of water and sediment is destroying flood plain forests that are home to hundreds of thousands of people and mangrove forests that help protect the coast against storms.

While the downstream areas suffer from a water shortage, wasteful water use is wreaking environmental and economic havoc in the command area. Over–irrigation and inadequate drainage have caused the water table to rise across a large area. As a result, about 60% of all farm plots in Sindh are plagued by water logging and salinity."


Please read here for more details.

Riaz Haq said...

Here's an interesting analysis of how Pakistan has changed in this decade by a Ahsan, a blogger on Five Rupees:

In the last decade, this picture has changed dramatically due to three central factors.

The first and most important factor is the explosion of private electronic media. In the 1990s, it was difficult for most Pakistanis -- the vast majority of which cannot or do not read newspapers -- to get information that was not government-sponsored or, less mildly, propagandistic. ....

This picture has changed drastically, as anyone with even a cursory interest in Pakistan will be able to tell you. There are now dozens of news channels in Pakistan, each with their own ideological and partisan bent. Some are national-level, others more regionally and ethnically focused. The trend began in the early part of this decade and has plateaued only recently, as the market gets sated. And while few of these channels will win awards for calm understatement or presciently sedate analysis, the fact remains that the media -- if it can be spoken of as a collective -- has given voice to a mass of the population previously unheard from. It has become a player of truly monumental importance for its ability to shape, mold, and excite the public. It is, at once, sensationalistic, blood-thirsty, xenophobic, conspiratorial, humorous, investigative, and anti-government. And yet its arrival on the scene is more than welcome, first for providing the venue for disenfranchised interests to make themselves known and second because the alternative is much worse.

The second significant factor, related to but distinct from the first, is the rise of communication technologies in Pakistan, particularly cellular phones. In 2002, there were 1.2 million cell-phone subscriptions in the country. By 2008, this number had risen to 88 million -- an increase of more than seven thousand percent. In addition, more than one in ten Pakistanis had access to the internet by the end of the decade; low by advanced countries' standards but an astronomical rise by Pakistan's. These developments in communications meant that political narratives became congealed and disseminated at speeds never heard of before, and that information and the wider "war" for public opinion became incredibly hard to win if a battle was lost at any stage.

The third major factor is the economic growth that took place in Pakistan in the first half of the 2000s. Pakistan's GDP doubled between 1999 and 2007, and more than kept pace with population growth, as GDP per capita increased by almost sixty percent between 2000 and 2008. More to the point, this growth was overwhelmingly powered by expansion of the service sector, which is concentrated, quite naturally, in the urban centers of the country. For the first time since independence, the term "Pakistani urban middle class" was not a contradiction in terms.

This development had two effects. First, and more trivially, the urban middle class did what urban middle classes do: they bought televisions and computers. In turn, that allowed them to plug into the private media explosion in ways simply unimaginable previously. Second, it shattered the elite-only edifice of Pakistani politics, and made challenges to government based on Main Street issues -- the price of flour, the lack of electricity, the selective application of the rule of law -- a viable process. Fifty years ago, Seymour Lipset wrote one of the canonical articles in Political Science on the process of democratization, its relationship to urbanized middle classes, and how the demands and values of the latter lead almost inexorably to support for the former. Here was living proof of Lipset's analysis.

Riaz Haq said...

According to Forbes, Mian Muhammad Mansha is “worth USD 1 billion" after selling half his shares in Pakistan's Muslim Commercial Bank.

He is Pakistan’s first billionaire. His Nishat Group is now his country’s largest private employer and the biggest exporter of cotton clothes (for brands like Gap). He sold more than half his shares in MCB for USD 900 million in 2008.”

Mansha has probably been a billionaire (US$1,000,000,000+) for a while now. But he has finally been ‘officially’ recognized for being one in the latest Forbes magazine “Billionaires’ list” for 2010. He becomes the first Pakistani to make it to the Forbes list.

Mian Mohammad Mansha, from Pakistan, is ranked as being #937 on the Forbes list of billionaires (with a total of 1011 billionaires listed), with an estimated net worth of US1.0 billion (Pak. Rs. 85,000,000,000+ or Pak. Rs. 85 arab!).

Riaz Haq said...

Here is a list of richest Pakistanis, as reported by Pak Tribune:

1 - Mian Muhammad Mansha Yaha Pakistan

Ranking: 1 Worth: £1.25b ($2.5billion)Industry: Businessman

2 - Asif Ali Zardari Pakistan

Ranking: 2 Worth: £900m ($1.8billion) Industry: Politics

3 - Sir Anwar Pervaiz UK

Ranking: 3 Worth: £750m ($1.5billion) Industry: Businessman

4 - Nawaz Sharif & Shahbaz Sharif family Saudi Arabia/Pakistan

Ranking: 4 Worth: £700m ($1.4billion) Industry: Politics/Businessman

5 - Saddaruddin Hashwani Pakistan

Ranking: 5 Worth: £550m ($1.1billion) Industry: Businessman

6 - Nasir Schon & family U.A.E/Pakistan

Ranking: 6 (tied at 6) Worth: £500m ($1billion) Industry: Businessman

7 - Abdul Razzaq Yakoub & family U.A.E

Ranking: 6 (tied at 6) Worth: £500m ($1billion) Industry: Businessman

8 - Rafiq Habib & Rasheed Habib Pakistan

Ranking: 7 Worth: £450m ($900) Industry: Businessman

9 - Tariq Saigol & Nasim Saigol Pakistan

Ranking: 8 Worth: £425m ($850) Industry: Businessman

10 - Dewan Yousaf Farooqui Pakistan

Ranking: 9 (tied at 9) Worth: £400m ($800) Industry: Businessman

11 - Sultan Ali Lakhani & family Pakistan

Ranking: 9 (tied at 9) Worth: £400m ($800) Industry: Businessman

12 - Malik Riaz Hussain Pakistan

Ranking: 9 (tied at 9) Worth: £400m ($800) Industry: Businessman

Ranking: 10 Worth: £390m ($780) Industry: Businessman

14 - Mian Mohammed Latif Pakistan

Ranking:11 Worth: £350m ($700) Industry: Businessman

15 - Haji Abdul Ghafoor & Haji Bashir Ahmed Pakistan

Ranking: 12 Worth: £330m ($660) Industry: Businessman

16 - Sheikhani Family Pakistan

Ranking: 13 Worth: £300m ($600) Industry: Businessman

17 - Razzaq Dawood Pakistan/UAE

Ranking: 14 (tied at 14) Worth: £250m ($500) Industry: Businessman

18 - Byram Dinshawji Avari Pakistan

Ranking: 14 (tied at 14) Worth: £250m ($500) Industry: Businessman

19 - Rafiq Rangoonwala Pakistan

Ranking: 15 (tied at 14) Worth: £240m ($480) Industry: Businessman

20 - Shimmy Querishi USA

Ranking: 15 (tied at 15) Worth: £240m ($480) Industry: Businessman

Riaz Haq said...

21 - Faruque Khan Pakistan

Ranking:15 (tied at 15) Worth: £240m ($480) Industry: Businessman

22 - Shahid Luqman UK

Ranking: 16 (tied at 16) Worth: £230m ($460) Industry: Businessman

23 - Mukhtar Ahmed Pakistan

Ranking: 16 (tied at 16) Worth: £230m ($460) Industry: Businessman

24 - Aqeel Karim Dhedi Pakistan

Ranking: 16 (tied at 16) Worth: £230m ($460) Industry: Businessman

25 - Syed Family Pakistan

Ranking: 17 (tied at 17) Worth: £220m ($440) Industry: Businessman

26 - Saif Family Pakistan

Ranking: 17 (tied at 17) Worth: £220m ($440) Industry: Businessman

27 - Jehangir Elahi Pakistan

Ranking: 18 (tied at 18) Worth: £200m ($400) Industry: Businessman

28 - Sherazi Family Pakistan

Ranking: 18 (tied at 18) Worth: £200m ($400) Industry: Businessman

29 - Noon family Pakistan

Ranking: 19 Worth: £190m ($380m) Industry: Businessman

30 - Mian Abdullah Pakistan

Ranking: 19 Worth: £190m ($380m) Industry: Businessman

31 - Shahzad Family Pakistan

Ranking: 20 (tied at 20) Worth: £170m ($340m) Industry: Businessman

32 - Nazir Family Pakistan

Ranking: 20 (tied at 20) Worth: £170m ($340m) Industry: Businessman

33 - Abdul Bhati UK

Ranking: 21 (tied at 21) Worth: £150m ($300m) Industry: Businessman

34 - Adalat Chaudhary UK

Ranking: 21 (tied at 21) Worth: £150m ($300m) Industry: Businessman

35 - Younis Sheikh UK

Ranking: 21 (tied at 21) Worth: £150m ($300m) Industry: Businessman

Bestway director Sheikh, 70, London cash-and-carry business Bestway continues to thrive.

36 - Chaudrey Zameer UK

Ranking: 21 (tied at 21) Worth: £150m ($300m) Industry: Businessman

37 - Zafar Iqbal Khwaja Pakistan

Ranking: 21 (tied at 21) Worth: £150m ($300m) Industry: Businessman

38 - Shahid Hussain Pakistan

Ranking: 22 (tied at 22) Worth: £130m ($260m) Industry: Businessman

39 - Younis Brothers Pakistan

Ranking: 22 (tied at 22) Worth: £130m ($260m) Industry: Businessman

40 - Ghani Family Pakistan

Ranking: 22 (tied at 22) Worth: £130m ($260m) Industry: Businessman

41 - Saddiq & Sons Pakistan

Ranking: 22 (tied at 22) Worth: £130m ($260m) Industry: Businessman

42 - Afzal Kushi UK

Ranking: 23 (tied at 23) Worth: £120m ($240m) Industry: Businessman

43 - Ghulam Hassan Khan Pakistan

Ranking: 23 (tied at 23) Worth: £120m ($240m) Industry: Businessman

44 - Kasim Dada Pakistan

Ranking: 24 Worth: £100m ($200m) Industry: Businessman

http://www.paktribune.com/pforums/posts.php?t=5936&start=1

Riaz Haq said...

Here is an excerpt fom an interesting Op Ed by a Korean commentator Ha-Joon Chang published in the Guadian that exposes the hypocisy of "Washington Consensus" pushed by the West and IFIs like the IMF on developing nations:

An obvious place to look for inspiration is the recent history of the host country. In my lifetime Korea has lived through one of the greatest development miracles – half a century ago, its annual per capita income was around £50, less than half that of Ghana at the time. Today, it stands at £12,000, putting it on a par with Portugal and Slovenia. How was this possible?

Korea of course did things that most people agree are important for economic development, such as investment in infrastructure, health and education. But on top of that, it also practised many policies that are now supposed to be bad for economic development: extensive use of selective industrial policy, combining protectionism with export subsidies; tough regulations on foreign direct investment; active, if not particularly extensive, use of state-owned enterprises; lax protection of patents and other intellectual property rights; heavy regulation of both domestic and international finance.

The G7 was always remarkably reluctant to recommend these "heterodox" policies and insisted that the "Washington consensus" package of opening up, deregulation and privatisation was the right recipe for everyone. When confronted with the Korean case, Washington consensus supporters tried to brush it off as an exception. However, the history of take-offs in most of the G7 countries – especially Britain, the US, Germany, France and Japan – is far closer to the Korean model than is commonly thought. The "unorthodox" policies used by Korea and almost all of today's rich countries need to be seriously considered in any discussion on development options.

Will things change with the launch of the G20 development agenda? An examination of the Korean government's proposals suggests we can only muster cautious optimism. Korea today wants the G20 to focus on a lengthy shopping list of development issues: infrastructure; private investment and job creation; education; greater access to rich country markets by poor countries; more inclusive finance; building resilience to financial or weather shocks; food security; governance. That is a pretty good start. The Koreans reject the "one size fits all" approach of previous decades in favour of what they call a "dynamic iPhone model" – a set of development apps for every occasion, drawn from successful approaches in different countries.

Anonymous said...

FIVE REGIONAL CITIES should be upgraded with in the provinces in Pakistan. Regional cities of Dera Ismail Khan in NWFP, Gawadar/ Qalat in Balouchistan, Sukkar/ Larkana in Upper Sind, Jehlam/ Rawalpindi and Multan in Punjab province. These regional cities have been ignored by the federal and provincial governments although these cities have their own history, culture and languages.Dera Ismail Khan in south of Pakhtun khwa/MWFP is under seige, Multan/DG Khan in south of Punjab is next target of religious extremists,Sukkar/ Larkana is being rule by criminals, Gawadar/ Qalat is trouble some. The people of these regions have to travel to provincial capitals for every small issue and requirement of the daily life which should be provided in nearby cities. A good number of population travel to big cities for their survival to earn livelihood as the local feudal own majority land and keep the common man as their slaves. Creation of regional government and upgrading of the regional cities will save a lot of money and time of the poor people of these regions. Circuit benches of the High Courts are already working in these areas and only requirement is the additional staff of different departments involved in additional work at the provincial capitals. The concern authorities should immediately consider to upgrade the regional cities. And immediate attention should be given upgrade/build the airports,TV station, civic center, libraries,hospitals, educational institutes and investment opportunities for Pakistanis living abroad and foreign firms to create jobs in the area as majority population in rural Pakistan do not have enough resources to survive. It remind me the condition of pre Islamic revolution of Iran in Shah time when the rural Iran was ignored and the capital Tehran was developed in a way to call it Paris of Middle East with modern life style. Couple of other big cities like Isfahan and Caspian sea was taken care of because of foreign tourists but rural area was ruled by cruel police and intelligence. Then what happen rural population supported the Islamic revolution and moved to Tehran and other big cities later on. The new government after revolution developed, built and upgraded the rural areas of Iran accordingly. A fund to upgrade/build these regional cities in Pakistan should be intoduced by public and private sector and Pakistani government, our foreign friends and Pakistanis living abroad may be asked to participate in this development mission in the country..KHWAJA AFTAB ALI,( former secretary, Iranian embassy, Saudi Arabia,1975-88) Advocate High Court & I.P. Attorney-first & the only Pakistani lawyer who earned Intellectual Property laws scholarship in USA,presently residing in Florida, USA. pip.law@hotmail.com

Riaz Haq said...

Here's an excerpt on Pakistan from a recent piece by Indian journalist Akar Patel:

Why is Pakistan such a mess? Some would blame Islam, but they’d be wrong. The problem isn’t religion at all. The problem is lack of caste balance. There aren’t enough traders to press for restraint and there are too many peasants. Too many people concerned about national honour, and not enough people concerned about national economy. Put simply: Pakistan has too many Punjabis and not enough Gujaratis. The majority of Pakistanis live in Punjab, but well over 50% of government revenue comes from just one city in Sindh: Karachi. Why? That is where the Gujarati is.

Gujaratis are less than 1% of Pakistan’s population, but they dominate its economy because they are from trading communities. Colgate-Palmolive in Pakistan is run by the Lakhani Memons, the Dawood group is run by Memons from Bantva in Saurashtra (the great Abdus Sattar Edhi is also a Memon from Bantva). The Adamjee group, advertisers on BBC, are from Gujarat’s Jetpur village and founded Muslim Commercial Bank. The Khoja businessman Sadruddin Hashwani owns hotels including Islamabad’s bombed-out Marriott. Khojas founded Habib Bank, whose boards are familiar to Indians who watched cricket on television in the 1980s. The Habibs also manufacture Toyota cars through Indus Motors. Pakistan’s only beer is made by Murree Brewery, owned by a Parsi family, the Bhandaras. Also owned by Parsis is Karachi’s Avari Hotels.

People talk of the difference between Karachi and Lahore. I find that the rational view in Pakistani newspapers is put forward by letter-writers from Karachi. Often they have names like Gheewala, a Sunni Vohra name (same caste as Deoband’s rector from Surat, Ghulam Vastanvi), or Parekh, also a Surat name.

Today capital is fleeing Pakistan because of terrorism and poor governance. To convince investors things will get better, the Pakistani government has appointed as minister for investment a Gujarati, Saleem Mandviwalla. The Mandviwallas own Pakistan’s multiplexes, which now show Bollywood. The place where Gujaratis dominate totally, as they do also in India, is Pakistan’s capital market. Going through the list of members of the Karachi Stock Exchange (www.kse.com.pk) this becomes clear. However, few Pakistanis will understand this because as Muslims they have little knowledge of caste.

The Gujarati tries to hold up the Pakistani economy, but the peasant Punjabi (Jat) runs over his effort with his militant stupidity. Why cannot the Pakistani Punjabi also think like a trader? Simple. He’s not converted from the mercantile castes. There are some Khatris, like Najam Sethi, South Asia’s best editor, but they are frustrated because few other Pakistanis think like them. Are they an intellectual minority? Yes, but that is because they are a minority by caste. One great community of Pakistani Punjabi Khatris is called Chinioti. They are excellent at doing business but in a martial society they are the butt of jokes. I once heard Zia Mohyeddin tell a funny story about the cowardice of Chiniotis and I thought of how differently a Gujarati would look at the same story.

Riaz Haq said...

Here are some excerpts from Salman Taseer's book "Bhutto: A Political Biography", as quoted by Dawn columnist Ardeshir Cowasjee:

"After the conflict was over, Bhutto commissioned a report on the entire Bangladesh episode from Mr Justice Hamoodur Rahman, Chief Justice of Pakistan, and himself a Bengali. Bhutto testified before the commission whose sessions were held in camera throughout, but he never published the final report, arguing some parts of it could embarrass Pakistan in its conduct of foreign that some parts of it could embarrass Pakistan in the conduct of foreign relations. His detractors preferred to suggest that Bhutto never dated issue the report because he was so heavily implicated in the political chicanery and blundering that preceded the country's break-up. That may be so. But it is equally likely that the Hamoodur Rahman commission report was by no means the final word on political responsibility for the catastrophe that overcame Pakistan. Considering the circumstances in which the commission worked, its final report may even have erred in Bhutto's favour.

"Blame can never be satisfactorily or finally apportioned to the major players in this grisly drama, but that Bhutto, Mujibur Rahman and Yahya Khan share responsibility there can be no doubt. Many, indeed, are inclined to the view that Bhutto, as the most sure-footed politician of the three and thus the best equipped to assess the consequences of his actions, must accept the lion's share of the blame. Argument on this point will remain one of the central themes of Pakistani politics, perhaps for decades."

Comments on Bhutto's political nature:

"After the election the situation changed drastically. Bhutto now saw that Mujibur Rahman with his majority of seats could form a government even without support from West Pakistan. And yet he was not the man to play second fiddle. With control of only two provincial governments out of five, he saw his position as far from assured." [As for playing second fiddle, I myself have heard him say: 'I'd rather be the top dog of half of Pakistan than an underdog of the whole of Pakistan.']

"Perhaps another politician with more moral scruple and with greater respect for democracy would have bowed before the will of the majority and quietly entered the Constituent Assembly to debate the future of Pakistan. Bhutto, however, possessed none of these gentle characteristics. He never had much faith in the parliamentary process."

"There was another danger in convening the Assembly. It was quite possible that a number of elected members from West Pakistan would give way to the Awami League's dominant position and compromise with them, enabling Mujibur Rahman to get the two-thirds majority needed to pass the constitution. Bhutto could not trust his own party, which consisted of a motley group of individuals, some of whom he barely knew and who had been swept into power on a wave of pro-Bhutto feeling."

On Bhutto's speech made on February 28, 1971, at public meeting at Lahore, where he offered Mujibur Rahman a carrot in the form of three alternatives - agreement on three of the Six Points, or postponement of the National Assembly meeting, or a waiving of the Legislative Framework Order.

"After the carrot, he them threatened the stick. The latter part of his speech was possibly the most belligerent he had ever made. He threatened a strike from the Khyber Pass to Karachi - 'not a single shop would be allowed to remain open.' He promised that the people of Pakistan would take full revenge from anybody who attended the Assembly session when they returned from Dacca, or, as he expressed himself, he 'would break their legs'. In spite of Bhutto's three alternative conditions, Sheikh mujibur Rahman refused to budge."

Riaz Haq said...

Here's a News story on increasing private wealth in Pakistan:

KARACHI: Pakistan has seen significant increase in the number of wealthy people as compared to a total of approximately 22 families during the era of Field Marshal General Ayub Khan in 60s, experts told The News.

According to a study of a financial think-tank from Switzerland, there are 415 people in Pakistan, who own more than $30 million each as compared to 310 last year, registering an increase of 33.9 percent, which is a record in Asia. Collective income of these people remained around $50 billion, the study revealed.

Only seven to eight business groups of the 22 families continue to operate their businesses significantly and the remaining families have either closed their businesses or have shifted abroad.

Dr Ishrat Husain, former governor of the State Bank of Pakistan (SBP), and a renowned economist, said only Dawoods, Adamjees, Sehgals, Shaikhs, Nishats and a few others have survived the economic ups and downs during this period, while Haroons, Batlas, Valikas, Isfahanis, Noons, and Rangoonwalas, have disappeared from the economic scene.

The nationalisation process in 70s also affected their economic position, he said, adding that some of the families went abroad and later shut their businesses due to one reason or the other. “Disputes and rivalries within the family and group also forced them to wind up their businesses,” Dr Husain said.

In 1947, the first budget projected a revenue of Rs150 million and the government had to borrow Rs80 million from the Habib Bank Limited to pay salaries to its employees and meeting other contingencies.

Likewise, Dentonic tooth powder was the first industrial project launched in the country followed by the inauguration of the first soft drink, Pakola, which was launched by the then prime minister.

Dr Riaz Shaikh, head of Social Sciences at Shaheed Zulfikar Ali Bhutto Institute of Science and Technology (SZABIST), said that several well-established individuals and families had emerged after the nationalisation process initiated by Zulfikar Ali Bhutto. “Now the number of such individuals and families has increased to hundreds, if not thousands,” he said.

Families of Agha Khan, Kasuri that owns a school chain, Patel family that owns hospitals and Malik Riaz, top real estate developer, along with several others are some of them.
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A few top families in the list included Sehgals, Habibs, Dawoods, Adamjees, Crescent and Valikas.
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(Shahid) Rahman wrote that nationalisation retarded Pakistan’s growth in many ways but its worst consequence was the scars inflicted on the psyche of the big businesses, which were flourishing even after passage of two decades. “It alienated the industrialists from the economic mainstream and, as if by a collective decision, several of the original 22 families who pioneered development in Pakistan switched off investment in the long gestation projects,” he wrote.

The Pakistani businessmen who were planning mega projects in 1971 and are still capable of setting up mega projects resigned to remain spinners, sugar manufacturers or at best cement manufacturers.

Field Marshal Ayub Khan’s decade of development (1958-68) divided the society into two categories, privileged and underprivileged, which led to the explosive situation of the 1970’s, culminating in the severance of Pakistan and induction into power of a socialist government of Bhutto.

The second phase, (1971-77) under Pakistan People’s Party was the era of dismantling monopolies, nationalisation, hitting at the power base of industrial barons and clipping their wings, while 11 years rule of General Zia-ul-Haq was the period of status quo for the economy....


http://www.thenews.com.pk/Todays-News-3-217083-Record-increase-in-number-of-wealthy-people-in-Pakistan