History of Pakistan's Business and Industry

Pakistan's $1.1 trillion GDP ranks the country as the world's 24th largest economy in terms of purchasing power parity (PPP).  Pakistan has come a long way since independence in 1947 when it was a poor agrarian country struggling to survive. Business and industry sectors now account for more than half of Pakistan's economy while agriculture's contribution is down to 20% of GDP.

The story of the country's business and industry parallels the ups and downs in its national history. It is the story of business individuals and families dealing with uncertainties. It is also the story of how the captains of business and industry were impacted by major events in the nation's history, particularly the breakup of Pakistan and the creation of Bangladesh in 1971. It is the story of survival in the midst of political instability, policy discontinuities and the fight against terror in recent years. It is the story of how the businesses and industries thrived under pro-business rulers and suffered under anti-business governments. It is the story of how the country's economy has performed under pro and anti-business policies.

Pakistan Growth By Decades. Source: National Trade and Transport Facility

Captains of Industry:

The United States had Rockefellers, JP Morgans, Carnegies, Fords and others who built American business and industry. Japan has Hitachi, Honda, Mitsubishi and other big names credited with building its business and industry. South Korea is home to recognized global giants like Samsung, Hyundai and others. A handful of individuals and families, aided by their governments, have played outsized roles in industrialization and economic growth in most major economies.

Sitting L to R: Riaz Haq, Syed Babar Ali, Javed Patel, Sikandar Naqvi

The captains of business and industry neighboring India are also a few known large families including Ambanis, Birlas, Hindujas, Jindals, Mittals, Tatas, and a few others. They have contributed to economic growth in their country.

L to R:  Imran Qureshi, Nazim Kareemi, Husain Dawood, Riaz Haq, Farouk Ahmad

Pakistan had the so-called 22 families which began the process of industrialization in 1960s but they were devastated by the 1971 war.  What was left of their business and industry was nationalized by the PPP government led by Zulfikar Ali Bhutto  in 1970s. Many of these families have since recovered and rebuilt and several new ones have now emerged.  Their continued growth and Pakistan's economic progress depend largely on the continuity of business-friendly government policies in future.

Source: KASB Securities. Courtesy: Faseeh Mangi of Bloomberg News

Business and Industry in Pakistan:

Here are the top 11 publicly traded groups of companies listed on Karachi Stock Exchange. These groups make up a little over one-third of the total market capitalization of all the companies listed on the Karachi Stock Exchange.  The market caps here represent a snapshot and vary daily with stock trading:

 1. The IGI Group tops the KSE listed groups. Headed by Syed Babar Ali, it is a diversified conglomerate that includes IGI insurance, IGI Life, Packages Ltd and other businesses with a combined market cap of Rs. 677 billion making up 7.4% of KSE.

2. Dawood Group includes companies such as Engro Corp,  Engro Fertilizers, Engro Polymer, Engro PowerGen, Dawood Hercules, and Dawood Lawrencepur with a total combined market cap at Rs. 442 billion adding up to 4.8% of KSE.

3. Pakistani military's Fauji Foundation owns Fauji Fertilizer, Fauji Foods, Fauji Cement, Askari Bank, and Mari Petroleum. The Fauji Foundation Group has a total market cap of Rs432 billion, and a a total KSE share of 4.6%.

4. Mian Mansha’s Mansha Group includes MCB Bank, DG Khan Cement, Nishat Mills Adamjee Insurance, Nishat Chunian, Lalpir Power, and Nishat Power. It has total market cap of Rs. 408 billion, or 4.4% of KSE.

5. Habib Group includes Indus Motor Company, Thal Limited, Habib Insurance, Habib Sugar Mills, Bank Al-Habib, Habib Metro, and Shabbir Tiles. Total market cap for the group is Rs326 billion making up 3.6% of KSE.

 6. Bestway Group includes United Bank Limited (UBL) and Bestway Cement with total market cap of Rs. 310 billion, or 3.4% of KSE market cap.

7. Tabba Group has total market cap of Rs. 298 billion or 3.3% of KSE. The group includes Lucky Cement, ICI Pakistan and Gadoon Textiles.

8. The Atlas Group which includes companies such as Honda Atlas Cars, Atlas Honda, Atlas Battery, and Atlas Insurance has total market cap of Rs. 143 billion  or 1.6% of KSE.

9. Chinoy Group includes Pakistan Cables, International Industries, and International Steel. It has market cap of Rs. 90 billion or 1% of KSE.

10. The Saigol Group includes companies such as Pak-Elektron, Maple Leaf Cement, and Kohinoor Textile Mills.  It is worth Rs. 79 billion accounting for 0.9% of KSE.

11. JS Group includes Jahangir Siddiqui Company, JS Bank, Bank Islami, JS Investments, and JS Global. It is worth Rs. 43 billion or 0.5% of KSE.

In addition to publicly traded companies, there are several large highly valued privately held business and industry groups like Jang Group, Hashoo Group,  Bahria Town and others.

Dawood Group:

Dawood Group is the second largest among the top 11 publicly traded business groups which make up a third of the total market capitalization of the Karachi Stock Exchange.

In a keynote address at OPEN Forum 2018, the annual conference of Pakistani entrepreneurs in Silicon Valley, Husain Dawood of Dawood Group in Pakistan told the story of his family's business starting in 1947. This story is probably representative of most of the rest of business and industry groups in the country.

Seth Ahmad Dawood, the patriarch of the Dawood family, started his textile business in India before 1947. He lost everything when he fled to what became Pakistan after the partition of India. He rebuilt his business in both East and West Pakistan. The family lost half its business in what became Bangladesh in 1971. What was left of the business was confiscated by Zulfikar Ali Bhutto government in West Pakistan.

The Dawood family was able to rebuild its business under General Zia ul Haq's pro-business military government that followed after Zulfikar Ali Bhutto was deposed in a military coup.

The best days for Dawood Group came during General Musharraf's pro-business government in years 2000-2007 under Husain Dawood who took charge after his father Ahmad Dawood's death. He led the diversification drive from textiles into chemicals, foods, fertilizers, power and communications businesses.

Dawood Group invested $1 billion in world's largest fertilizer plant and took on a lot of debt. Musharraf government committed gas supply as incentive for the group to invest.  The PPP government led by Asif Zardari demanded payoff to deliver on the commitment to supply gas for the fertilizer plant. Dawood's refusal to pay off the PPP officials meant that the group's investment sat idle until 2013 when Nawaz Sharif's pro-business PMLN government came to their rescue.  Dawood group and other business and industry groups have thrived since 2013 with a pro-business government in charge.

Summary:

Growth of business and industry in major American, European and East Asian economies has been led by a few large families aided by pro-business government policies.  Ford, Hitachi, Honda and Samsung are now household names but they all started small and built up in stable environments favorable to business. Pakistan had the so-called 22 families which began the process of industrialization in 1960s but they were devastated by the 1971 war.  What was left of their business and industry was nationalized by the PPP government led by Zulfikar Ali Bhutto  in 1970s. Many of these families have since recovered and rebuilt and several new ones have now emerged. Their continued growth and Pakistan's economic progress depend largely on the continuity of business-friendly government policies in future.

Related Links:

Haq's Musings

South Asia Investor Review

Who Owns Pakistan?

Pakistan Military Industrial Complex

Brief History of Pakistan Economy

OPEN Forum Silicon Valley 2018

Asian Tiger Dictators Brought Prosperity

Democracy vs Dictatorship Debate in Pakistan

Musharraf's Legacy

Is This a 1971 Moment in Pakistan's History?

Pakistan's Lost Decade of 1990s

World Economic History: Was India Ever Rich?

When the British arrived in Mughal India, the country's share of the world GDP was 25%, about the same as the US share of the world GDP today. By 1947, undivided India's share of world GDP ($4 trillion in in 1990 Geary-Khamis dollars) had shrunk to about 6% (India: $216 billion, Pakistan: $24 billion). Since independence, India's contribution to world GDP has shrunk further to about 4%, according to British Economist Angus Maddison who died in 2010.

The colonization of India and many other nations in Asia and Africa began with the advent of the Industrial Revolution in Europe which resulted in a major power shift from East to West over the time-span of just a few decades. Prior to the Industrial Revolution, the world depended mainly on agriculture based on human and animal muscle power. Countries with large populations and farmlands had large share of the world GDP.  The per capita productivity differences among nations and regions were relatively small. The machine age changed it all. Those who used machines became much more productive and significantly richer than the rest.

In 1000 AD, according to British Economist Angus Maddison, China and India together accounted for more than half of the world GDP (calculated in 1990 dollars in terms of purchasing power parity). By 1600, that share was 51.4%, with China accounting for 29% and India 22.4% of world GDP. A hundred years later, China’s GDP had fallen but India’s went up to 24.4% of world output. By 1820, however, India’s share had fallen to 16.1%. By 1870, it went down to 12.2%. International Monetary Fund (IMF) projections indicate that India’s share of world GDP would be 6.1% in 2015.

While it is a fact that India's total GDP was at one point the highest in the world, does it mean that the average Indian was richer than his or her counterparts elsewhere in the world? To answer this question, let's look at Maddison's figures for per capita GDP in various parts of the world.

In 1 AD, India’s GDP per capita was $450, the same as China’s. But Italy under the Roman Empire had a per capita income of $809. In 1000 AD, India’s per capita income was $450 and China’s $466. But the average of the Islamic Caliphate in Baghdad which ruled West Asia (Turkey, Syria, Iran and Iraq) was much higher at $621. An average citizen of the Abbasid Caliphate was richer than an average Indian or Chinese. In fact, the per capita income in the Abbasid Caliphate was the highest in the world in 1000 AD.

As the European Renaissance began, new centers of prosperity emerged. Italy topped the table in 1500 AD, with per capita income of $1,100, the Netherlands following with a per capita income of $761. The UK was not far behind, with a per capita income of $714. All of these nations were richer than India and China which had per capita incomes of $550 and $600 respectively.

India Health-Wealth Indicators Source: Gapminder.com

While India today has the world's largest population of poor, it is still richer than it has ever been in terms of per capita incomes. Indians are also living longer than ever in the country's history; average life expectancy in India has risen from just 23 years in 1800 to 65.5 years now. However, India continues to significantly lag the rest of the world on both economic and social indicators.

Related Links:

Haq's Musings

Power Shift Since Industrial Revolution

Can Superpoor India Become a Superpower?

India: World's Largest Population of Poor, Hungry and Illiterates

Sri Lanka Leads South Asia in Economic and Social Indicators

Upwardly Mobile Pakistan

Brief History of Pakistan Economy

India Ranks Last on PISA, TIMSS

A Brief History of Pakistani Economy 1947-2010

Pakistani economy grew at a fairly impressive rate of 6 percent per year through the first four decades of the nation's existence. In spite of rapid population growth during this period, per capita incomes doubled, inflation remained low and poverty declined from 46% down to 18% by late 1980s, according to eminent Pakistani economist Dr. Ishrat Husain. This healthy economic performance was maintained through several wars and successive civilian and military governments in 1950s, 60s, 70s and 80s until the decade of 1990s, now appropriately remembered as the lost decade.

Pakistan Growth By Decades. Source: National Trade and Transport Facility

In the 1990s, economic growth plummeted to between 3% and 4%, poverty rose to 33%, inflation was in double digits and the foreign debt mounted to nearly the entire GDP of Pakistan as the governments of Benazir Bhutto (PPP) and Nawaz Sharif (PML) played musical chairs. Before Sharif was ousted in 1999, the two parties had presided over a decade of corruption and mismanagement. In 1999 Pakistan’s total public debt as percentage of GDP was the highest in South Asia – 99.3 percent of its GDP and 629 percent of its revenue receipts, compared to Sri Lanka (91.1% & 528.3% respectively in 1998) and India (47.2% & 384.9% respectively in 1998). Internal Debt of Pakistan in 1999 was 45.6 per cent of GDP and 289.1 per cent of its revenue receipts, as compared to Sri Lanka (45.7% & 264.8% respectively in 1998) and India (44.0% & 358.4% respectively in 1998).



After a relatively peaceful but economically stagnant decade of the 1990s, the year 1999 brought a bloodless coup led by General Pervez Musharraf, ushering in an era of accelerated economic growth that led to more than doubling of the national GDP, and dramatic expansion in Pakistan's urban middle class.

Per Capita PPP GDP



Pakistan became one of the four fastest growing economies in the Asian region during 2000-07 with its growth averaging 7.0 per cent per year for most of this period. As a result of strong economic growth, Pakistan succeeded in reducing poverty by one-half, creating almost 13 million jobs, halving the country's debt burden, raising foreign exchange reserves to a comfortable position and propping the country's exchange rate, restoring investors' confidence and most importantly, taking Pakistan out of the IMF Program.



The above facts were acknowledged by the current PPP government in a Memorandum of Economic and Financial Policies (MEFP) for 2008/09-2009/10, while signing agreement with the IMF on November 20, 2008. The document clearly (but grudgingly) acknowledged that "Pakistan's economy witnessed a major economic transformation in the last decade. The country's real GDP increased from $60 billion to $170 billion, with per capita income rising from under $500 to over $1000 during 2000-07". It further acknowledged that "the volume of international trade increased from $20 billion to nearly $60 billion. The improved macroeconomic performance enabled Pakistan to re-enter the international capital markets in the mid-2000s. Large capital inflows financed the current account deficit and contributed to an increase in gross official reserves to $14.3 billion at end-June 2007. Buoyant output growth, low inflation, and the government's social policies contributed to a reduction in poverty and improvement in many social indicators". (see MEFP, November 20, 2008, Para 1)

 
The decade also cast a huge shadow of the US "war on terror" on Pakistan, eventually turning the nation into a frontline state in the increasingly deadly conflict that shows no signs of abating. Along with the blood and gore and chaos on the streets, there are hopeful signs that rule of law and accountability is beginning to prevail in the country with the restoration of representative democracy and independent judiciary, largely in response to an increasingly assertive urban middle class, vibrant mass media and growing civil society.

The Zardari-Gilani government inherited a relatively sound economy on March 31, 2008. It inherited foreign exchange reserves of $13.3 billion, exchange rate at Rs62.76 per US dollar, the KSE index at 15,125 with market capitalization at $74 billion, inflation at 20.6 per cent and the country's debt burden on a declining path. The government itself acknowledged in the same document that "the macroeconomic situation deteriorated significantly in 2007/08 and the first four months of 2008/09 owing to adverse security developments, large exogenous price shocks (oil and food), global financial turmoil, and policy inaction during the political transition to the new government". (Para 3 of the MEFP, November 20, 2008.

Why is it that Pakistani economy has done well under military governments and performed poorly when led by politicians? To put it all in perspective, let's recall how late Dr. Mahbub ul-Haq, the renowned Pakistani economist who is credited with the idea of UNDP's human development index (HDI), explained the corrosive impact of political patronage on economic policy in Pakistan.

In a 10/12/1988 interview with Professor Anatol Lieven of King's College and quoted in a recent book "Pakistan-A Hard Country", here is what Dr. Haq said:

"..every time a new political government comes in they have to distribute huge amounts of state money and jobs as rewards to politicians who have supported them, and short term populist measures to try to convince the people that their election promises meant something, which leaves nothing for long-term development. As far as development is concerned, our system has all the worst features of oligarchy and democracy put together.

That is why only technocratic, non-political governments in Pakistan have ever been able to increase revenues. But they can not stay in power for long because they have no political support...For the same reason we have not been able to deregulate the economy as much as I wanted, despite seven years of trying, because the politicians and officials both like the system Bhutto (Late Prime Minister Zulfikar Ali Bhutto) put in place. It suits them both very well, because it gave them lots of lucrative state-sponsored jobs in industry and banking to take for themselves or distribute to their relatives and supporters."

Here is how Pakistani economist and NUST Professor Ashfaque Husain Khan explains the current situation:

What went wrong? Why one of the fastest growing economies in the Asian region until two years ago has been totally forgotten in the region? Firstly, the speed and dimension of exogenous price shocks (oil and food) were of extraordinary proportions. Secondly, the present government found itself totally ill-prepared and clueless in addressing the challenges arising out of the shocks. While rest of the world was taking corrective measures and adjusting to higher food and fuel prices, Pakistan lurched from one crisis to another.



Despite peaceful election and a smooth transition to a new government, political instability persisted. For a protracted period there were no finance, commerce, petroleum and natural resources and health ministers in the country. The government lost six precious months in finding its feet. It gave the impression of having little sense of direction and purpose. A crisis of confidence intensified as investors and development partners started to walk away. The stock market nosedived, capital flight set in, foreign exchange reserves plummeted and the Pakistani rupee lost one-third of its value. In short, Pakistan's macroeconomic vulnerability had grown unbearable. It had no option but to return to the IMF for a bailout package. There were no Plan A, B and C. There was only one plan, that is, to return to the IMF.

While the country was moving rapidly towards the IMF, the ministry of finance had prepared the plan to bring $4 billion by June 30, 2008 through four transactions. A kick-off meeting was scheduled on April 23, 2008 at the ministry to give a final touch to the various roadshows. These transactions were canceled on April 20, 2008. Who ordered the cancellation of $4 billion transaction? This cancellation prompted balance of payment crisis and the rest became history.

The economy continues to remain in intensive care unit and is barely breathing thanks to the injection of funds from the IMF, World Bank and Asian Development Bank. The economy is not on the radar screen of the government and as such the economic managers have no relevance in the current political set up. The exit of Shaukat Tarin is a classic example. At least he tried his best to inject financial discipline but paid the price of teaching prudent financial management.

Since Tarin's departure, Abdul Hafeez Shaikh has assumed the position of finance minister. It is still early to judge him, as the economy has suffered yet another major jolt from the widespread devastation caused by recent floods. This has added to the already extreme challenge Pakistan's leadership faces in bringing political and economic stability to the nation.

Here's a video titled "I Am Pakistan":



Related Links:

Haq's Musings
Ishrat Husain: Structural Reforms in Pakistan's Economy
Role of Politics in Pakistan Economy

Pakistan's Economic Performance 2008-2010

Incompetence Worse Than Corruption in Pakistan
Pakistan's Circular Debt and Load Shedding
US Fears Aid Will Feed Graft in Pakistan

Pakistan Swallows IMF's Bitter Medicine

Shaukat Aziz's Economic Legacy

Pakistan's Energy Crisis

Karachi Tops Mumbai in Stock Performance

India Pakistan Contrasted 2010
Pakistan's Foreign Visitors Pleasantly Surprised
After Partition: India, Pakistan and Bangladesh

The "Poor" Neighbor by William Dalrymple
Pakistan's Modern Infrastructure

Video: Who Says Pakistan Is a Failed State?
India Worse Than Pakistan, Bangladesh on Nutrition
UNDP Reports Pakistan Poverty Declined to 17 Percent

Pakistan's Choice: Talibanization or Globalization

Pakistan's Financial Services Sector

Pakistan's Decade 1999-2009

South Asia Slipping in Human Development
Asia Gains in Top Asian Universities

BSE-Key Statistics
Pakistan's Multi-Billion Dollar IT Industry

India-Pakistan Military Comparison

Food, Clothing and Shelter in India and Pakistan

Pakistan Energy Crisis

IMF-Pakistan Memorandum of Economic and Financial Policies

Hindutva Distortions Whitewash History in Indian Textbooks

Nations are relatively new and artificial constructs created by bringing disparate tribes, ethnicities and peoples together in the last two centuries.

History is used (or abused, depending on one's point of view) as one of the tools to justify such constructs, with each nation having its own narrative which it believes to be accurate. In fact, all these narratives embellish history to suit their needs. Pakistani history texts are not unique in this.

Here are a few obvious examples:

1. Israelis still do not acknowledge the violent and forced displacement and dispersal of Palestinians that created the state of Israel, instead relying on embellished accounts of Jewish persecution in Europe to justify the creation of state of Israel.

2. Indians still teach their kids that Aryans were locals, not foreign invaders who destroyed the Indus Valley Civilization and forced the horrible caste system and pervasive degradation of women on the natives.

3. Many American history textbooks still do not acknowledge the mass murder of native American population, nor are there any second thoughts or sense of remorse about the atomic bombing of Hiroshima and Nagasaki. Instead, there is constant lecturing to others about human rights and democracy by Americans.

I have heard it said often that history isn't what happened, but a story of what happened. And there are always different versions, different stories, about the same events. One version might revolve mainly around a specific set of facts while another version might minimize them or not include them at all.

There is a concerted global effort by Hindutva groups to distort and whitewash Indian history to suit their false narrative which denies foreign origins of Aryans and evils of the caste system and misogyny that still characterize life in India.

Not only have the BJP led governments in India fundamentally altered India's history textbooks, the BJP allies around the world are attempting to the same in textbooks as far as California.

Here are some excerpt from "HISTORY TEXTBOOKS IN INDIA: NARRATIVES OF RELIGIOUS NATIONALISM" by K.N.PANIKKAR:

"The introduction of new textbooks by the NCERT (under BJP) was inspired by the political purpose of seeking rationale from history for constructing India as a Hindu nation. The textbooks were, therefore, recast as narratives of Hindu religious nationalism. Claimed as an effort to retrieve the true nationalist history from the motivated distortions of colonial historiography they attribute to Indian nation an exclusively Hindu character."

"During this period the political climate in the country turned in favour of the Hindu fundamentalist forces, which enabled them in 1998 to lead a coalition government in which the Ministry of Human Resource Development which dealt with education was headed by a long standing cadre of the Hindu fundamentalist organization, Rashtriya Swayam Sevak Sangh( RSS). Under his stewardship the government spared no effort to change the content and character of education, of which the introduction of new textbooks, was perhaps the most prominent and indeed controversial."

"The idea of India being a Hindu civilisational state runs through all the texts, either directly expressed or indirectly suggested. The question of the indigenous origin of Aryans and the identity of Harappan civilization with the Vedic society has some bearing on this issue. The former is quite central to the fundamentalist agenda of claiming the nation as Hindu, as the migration theory would deprive the Hindus of indigenous lineage. Therefore, against the widely held scholarly opinion Aryans are credited with indigenous origins, subscribing in the bargain to the colonial view of Aryan race. In the former case the textbooks put forward the view that the Aryans were indigenous to India and that the opinion widely held by scholars about their migration dismissed as inconsequential. In defense of indigenous origin no substantial evidence is adduced, except negative reasoning. It is asserted that the ‘the oldest surviving records of the Aryans, the Rig Veda, does not give even an inkling of any migration. It does not have any knowledge even of the geography beyond the known boundaries of Ancient India.’ It further says: ‘Many scholars think that the Aryans were originally inhabitants of India and did not come from outside. It has been argued by such scholars that there is no archeological or biological evidence, which could establish the arrival of any new people from outside between 5000 B.C and 800 B.C. This means that if at all there was any migration of Aryans or for that matter of any other people in India, it may have taken place at least eight or nine thousand years ago or after 800 B.C. to both of which there is no evidence. Further, the skeletal remains found from various Harappan sites resemble the skeletons of the modern population of the same geographical area.'"

The fanatic Hindu nationalists tried to do in California what their Indian counterparts have already done in India. They attempted to pollute California history textbooks in 2006, when they argued unsuccessfully to include lies like the indigenous origins of Aryans and tried to deny the terrible impact on hundreds of millions of Indians of the caste system and misogyny prevalent in Hindu texts and Aryan culture.

Hundreds of history scholars from US and South Asia helped defeat this reprehensible attempt by Hindu American Foundation (HAF) and its allies in the United States.

While the biggest victims of Hindu fundamentalists are the women and the D alits of India, non-Hindu minorities and the neighboring states have not been spared either.

They are cowards and they prey upon unarmed Muslim, Christian and Sikh minorities in organized pogroms in what American scholar Paul Brass calls "production of violence" in India with many Indian intellectuals and some in the Indian press justifying the actions of the murderers.

The big brothers of these fanatic Hindutva terrorists occupy high positions in the Indian security establishment, according to former Maharashtra police chief SM Mushrif. These Hindutva allies in Indian government conduct covert warfare via terrorist actions in neighboring states including Pakistan through RAW.

All these people are a product of Indian education that teaches hatred against Muslims and Pakistanis, as evident by the following excerpts from Gujarat textbooks:

*Gujarat is a border state. Its land and sea boundaries touch the boundaries of Pakistan which is like a den of terrorism. Under such circumstances, it is absolutely necessary for us to understand the effects of terrorism and the role of citizens in the fight against it

*If every countryman becomes an ideal citizen and develops patriotism, the National Population Policy can definitely be achieved

*When people used to meet earlier, they wished each other saying Ram Ram and by shaking hands. Today, people enjoy their meeting by speaking Namaste. Is it not a change?

*Making full use of Muslim fanaticism, Osama Bin Laden organized die-hard Muslims and founded the International Jihad Organization in the name of the Jehedi movement*
[Excerpted from Social Science textbooks, standard nine (2005) and standard eight (2004)]

The Hindu fundamentalists are as serious a threat to peace in South Asia as their Muslim militant counterparts.

Earlier this year, Indian Occupied Kashmir's People's Democratic Party leader Mehbooba Mufti alleged that the recent Srinagar hotel attack was an attempt by "some government agency" to sabotage the efforts to withdraw troops from the state. “Maybe some militant groups don’t want the troop withdrawal, maybe somebody in the agencies don’t want the troop withdrawal. So I think for their interests, they become one at this point of time. But I would say that the withdrawal of troops is the best compliment that you can pay to the people of Jammu and Kashmir, who have voted in huge numbers,” she added.

Recently, India's Vice President Hamid Ansari has called for greater "oversight and accountability" of the operations of the nation's intelligence agencies by the Indian parliament. Ansari also said that, just like in other democracies like the US and the UK, the “concerned agencies should make public their mission statement, outlining periodically their strategic intent, vision, mission, core values and their goals”.

As India constantly highlights the terror of green variety, it must not ignore its own homegrown terror dressed in saffron. The terror of either hue has the potential to spark a deadly conflict in South Asia that can easily spin out of control, and completely devastate the region.

Related Links:

Haq's Musings

Who Killed Karkare?

Procrastinating on Hindutva Terror

India's Guantanamos and Abu Ghraibs
H indutva Government in Israeli Exile?

G rowing US-India Military Ties Worry Pakistan

Taliban or Rawliban?

The 21st Century Challenges For Resurgent India

What Irked Purohit?

Hindu Rashtra ideology was driving force for Malegaon conspirators

Hindutva Terror Strikes India
The Rise and Rise of Mangalore's Taliban

Malegaon Files
Hindu Nationalists Gang Up on Musharraf at Stanford

Can India "Do a Lebanon" in Pakistan?

Priest Survivor: Hindu Radicals are Terrorists

Dawn of Hindutva Terror in India

Ajmer Blasts: Revisiting Hindutva Terror

Hindu Militants Copying Jihadi Tactics

Introspection of Pakistan's Creation

Sixty-plus years after the end of the British Raj in the Indian subcontinent, a number of authors, historians and scholars are now speaking or writing about the circumstances of India's partition, and the reasons for the creation of Pakistan in 1947.

Several of them, including Pakistani historian Ayesha Jalal and former Indian Foreign Minister Jaswant Singh have offered their varying perspectives on the subject. Ayesha Jalal has called the creation of Pakistan a "mistake" and Jinnah a "great lawyer with feet of clay". Contrary to popular perception, Singh argues in his recent book "Jinnah - India, Partition, Independence", it was not Jinnah but Nehru's "highly centralized polity" that led to the Partition of India.

Ayesha Jalal has argued that the partition of India -- the event that created Pakistan -- was an accident, a huge miscalculation. Further, she has insisted that Jinnah never wanted a separate Muslim state; he was only using the threat of independence as a political bargaining chip to strengthen the voice of the Muslim minority in the soon-to-be sovereign India, a view shared by Jaswant Singh in his recent book on Jinnah and partition. Unlike Jalal, however, Singh lauds Jinnah as a "great Indian" and blames Jawaharlal Nehru and Sardar Patel for the partition. In his book "India Wins Freedom", Maulana Azad also singled out Patel as "the real flag bearer" of partition.

And now, veteran Pakistani writer Afzal Tauseef, who has been honored by Pakistan with "Pride of Performance" award for her service to the nation, has added her voice in a recent interview with Newsline. In her provocative style, she argues that Pakistan was created to preserve the interests of the big landowners in Punjab and Sind, and to serve the interests of the landowning class that would have been threatened by Nehru's insistence on land reform. Tauseef explains in the following words: "I personally think that if Nehru had not included land reforms in his program, Pakistan would never have been created. The country was made so that the jagirdari system could remain intact. The jagirdars, who were all protégées of the British, knew that if left in the Congress fold, they would be wiped out since at that time Marxist thought was moving into the subcontinent. The Muslim League was a product of the British and the land-owning Nawabs. On the other side was America, who wanted something in return for the money it had given to the British during the war. They wanted an area where a new imperialism could be let loose. And this is what continues to this day. Now we are paying for it dearly."

The fact that the quest for Pakistan by the Muslim League won the crucial support of the powerful Unionist Party in Punjab, representing the interests of the feudal Punjabi zamindars and jagirdars, lends support to Tauseef's contention that "the country was made so that the jagirdari (feudal) system could remain intact".

Each of these authors has challenged the widely accepted "Two Nation Theory" in Pakistan as the basis for partition, attributing the event to other causes. Each of them has come under attack from various quarters for his or her work and pronouncements on this highly emotionally-charged subject. Almost all of these views are continuing to generate considerable controversy in South Asia.

Here is the complete text of Afzal Tauseef's recent interview with Nyla Daud published by Newsline:

Having spurned the government of Pakistan’s first offer in recognition of your literary merit some years ago, you have once again been nominated for the prestigious Pride of Performance this year. Will you accept the honor this time?

When a senior police officer representing Zia-ul-Haq came to me offering a Pride of Performance with a prize of eight murabbas of cultivatable landholding, I had refused pointblank. Because, one, all my life I had written against the very system that was being perpetuated by Zia. Two, my acceptance would have led to the indictment of 41 other comrades in the Libya Conspiracy Case in which I had been named a party. So, my answer had been that to be remembered as a freedom fighter and revolutionary were far greater awards. That having been named as the best teacher by 25,000 students was a far greater honour. That I did not care for the bait of a landholding because my grandfather had owned three villages in undivided India. That my late father who had been the Quaid’s security officer in Ziarat had made no claims against his ancestral holdings, despite being in a position to do so, even while others were making fortunes. But yes, now I will accept the Pride of Performance because I have been convinced by friends that the award comes as an honour not from the establishment, but from the country that I have fought for. That it is my right.

What has been the single, most powerful factor in the development of your political ideology?

Growing up in Balochistan, reading the world’s literature with teachers who were book lovers with a progressive bent of mind and acquiring the feel for the Marxist revolution and for social injustice that had already taken seed. But when I moved to Lahore as a teacher at the Lady Maclagan College in the late ’60s, the contrasts in society became more glaring. I realised that the Punjab, with its vast population of honest folk, was a hotbed of oppression perpetuated by good-for-nothing land owners aided by bureaucrats. They had all the power, all the wealth; the awam led miserable lives. I awakened to the reality and joined the rank and file of the Peoples Party as it rose up against the Ayub regime.

Those were exciting times and it was a unique experience to teach younger people who were looking for direction. I had been selected by the Public Service Commission for my lecturer’s position and, although we were not activists in the real sense of the word, the generally suspicious environment forced us to attend party meetings in burqas so as not to be detected, because there were spies everywhere.

Along with Shaheen, Haneef Ramay’s wife – whom I knew from my Quetta days – we formed the underground wing of the PPP. There were about 25,000 female members with us at the time of the crackdown. Then later, during the Zia regime, I was in the forefront of the Bhutto Bachao Tehreek because we wanted to save him at any cost. But even as lakhs of people agitated for the cause and received public lashings, we could not save him. In fact, this has been one of the greatest defeats I have suffered in my life.

The fact remains that Bhutto, your ideological hero, too failed democracy. As did his daughter Benazir.

Yes, in a way, because even during Bhutto’s lifetime, the PPP was on the way to being derailed. All the pioneers, the real persons behind the ideology were so disillusioned that, but for Sheikh Rasheed, they all went their separate ways. Hanif Ramay, one of the original PPP members, was subjected to torture in the Lahore Fort when Bhutto was in power. Dr Mubashir Hasan walked out, giving up a ministry when Bhutto sacked the NAP government in Balochistan. But Bhutto realised his mistake because when asked for his last wish, he had said, “Give me a pistol with 32 bullets and my central committee.”

Benazir, like Bhutto, disappointed although she suffered a lot. We were all for her but as soon as she took oath as prime minister, we realised that the position had been won on the basis of compromises. Benazir compromised with the very people who had killed her father. But had she not acceded to the American point of view, she would have remained in exile all her life, which might have been better in the long run. Her worst mistake was that she compromised on ideology, at the cost of the masses and, that too, at the behest of an imperialist power.

Today, there is no Peoples Party and Zardari’s promotion of Bilawal without in-house party elections is child’s play. It is a game like so many other games that the people have been fooled into accepting.

The Baloch cause, with its apparently anti-federation, separatist viewpoint, has always won your sympathy. Why?

Because Balochistan took me in when I was homeless, when I had no identity. It nurtured me, gave me an awakening and maturity of thought. I have seen how the rights of the Baloch have been trampled upon. Under such conditions, what do you expect? That they will be appeased by being given a hospital or bags of atta? You have to first dress their wounds, which have been festering for so long. Treat them as a part of Pakistan. By the way, Balochistan came to Pakistan only by one vote and that belonged to Akbar Bugti, who was ultimately annihilated by bombs. You don’t bomb your own countrymen like that.

As for representing Balochistan, Bugti (now dead), Marri (who is too old now) and Attaullah Mengal were the only people who had a genuine feeling for the land. Just because they rose up for the rights of the Baloch, they were put into prison, some of them for 25 years at a stretch. All they wanted were their rights in a Pakistan where provincial autonomy does not exist. Balochistan, Sindh and the Frontier province, all have the same grouse.

So the Punjab would be the villain of the piece and, in that case, where does the federation figure?

There never has been a federation and even the Punjab would have been better off with autonomy because I believe that provincial autonomy would strengthen democracy. That was what the Quaid had planned. As for my loyalties, I am all for the awam irrespective of the province they belong to. Punjab is my birthplace and it is to Punjab I owe my identity as a thinker and writer for which I have received so many awards. In fact, if I had not moved here, I would never have learnt to speak my mother tongue nor developed the courage to write in it. Punjabi brought me the friendship of people like Amrita Pretam who has written a book about me, calling me “the child of a lesser God” for my sensitivity in portraying the sensibilities of the masses. My Punjabi writings got me invited to India for an award, thereby giving me the chance of a lifetime to visit the village of my forefathers and relive the tragic ironies of their lives for having sacrificed life over loyalty to the homeland at the time of Partition.

In spite of all this you went to India to accept an award from the very people who had murdered your family and rendered you homeless ?

The Millennium Award people had arranged a very big function in my honour. I was sitting on the stage when they came up, putting their hands together as a gesture of apology. But I said that if you do so then I will also have to apologise because the same sort of cruelties were perpetuated here against the Sikhs and Hindus. The only difference is that those stories have not been written about on the Pakistani side of the border.

How would you review the academic scene in view of your 35-year experience as an educationist?

Zia-ul-Haq’s period was the darkest. At a personal level, I was haunted by the agencies to the extent that once I escaped by jumping over the walls of neighbouring houses at two in the morning. This led to a long period of hide-and-seek, ending only when I myself surrendered to the ISI in Quetta in order to save my sympathisers.

At the public level, one of the first things Zia did was to get together a bunch of pseudo literateurs and publicly tell them that Progressive literature and thought were mere rubbish that would eat up the system. Waris Mir died of shock when he saw the treatment being meted to progressive thought. But the most direct fallout happened when they started scratching away at the history and literature syllabi. They redesigned courses with the express notion of introducing very warped versions of Islamiyat as a subject. I was a sitting member of the Senate Committee on syllabi planning and I told them explictly that while one could somehow compromise on the removal of Faiz from the syllabi, why had we suddenly taken affront to some very beautiful expressions of Iqbal when in the same breath they continued to maintain that Iqbal gave the idea of Pakistan. When I persisted, they told me that the order for the removal of Iqbal’s verses like “Uththo Meree Dunya Kay Ghareebon Ko Jaga Do” had come from above! I maintained that it was not a divine order. So their next excuse was that Iqbal was too difficult to teach. I offered my services to prepare teachers of Iqbal if that was the problem. The very next day I was informed that I was no longer on the Senate Committee.

Where would you pin the cause for the state of things in Pakistan today?

Jagirdari and the jagirdari mindset, especially as it grew to gather political backing. It cost us a wing of the country. This system is an enemy of those with socially-awakened intellect. Nowhere else in the entire world can you find such an oppressive system. India put an end to it at the very beginning but our leaders continue to nourish it. I personally think that if Nehru had not included land reforms in his programme, Pakistan would never have been created. The country was made so that the jagirdari system could remain intact. The jagirdars, who were all protégées of the British, knew that if left in the Congress fold, they would be wiped out since at that time Marxist thought was moving into the subcontinent. The Muslim League was a product of the British and the land-owning Nawabs. On the other side was America, who wanted something in return for the money it had given to the British during the war. They wanted an area where a new imperialism could be let loose. And this is what continues to this day. Now we are paying for it dearly.

But the initial thought behind Pakistan was La illa ha illallah.

That slogan came much later when Liaquat Ali Khan passed the Qarardad-i-Maqaasid. The Quaid had seen Pakistan as a secular state, but within a year-and-a-half he was almost a helpless prisoner in Ziarat. My father was very close to him and I remember him quoting the Quaid as telling a group of students who had come to visit him in Ziarat, “Where is the Muslim League? This typewriter and myself?” The Quaid had never envisioned the Muslim League as a party of landowners. In fact, he was against the allotment of property to people against claims of things left behind in India during Partition. For this reason the rift between him and Liaquat Ali Khan grew to the extent that they were not even on talking terms towards the end. We all know how he was treated on his final journey from Karachi Airport to the governor general’s house.

What is your greatest concern today?

That Pakistan survives. That it is able to weather all the malicious intent directed at it. That the murder and mayhem rampant across its length and breadth may come to an end. I have always been against military intervention but today, there is so much at stake – the country, the people, the very culture – that I believe the army must act.

I also maintain that along with the overall influence of the imperialist powers in the face of a weakened awam, Mullahism is the most significant threat. Pakistan was not made solely for Muslims. The very fact that Muslims are daily at each other’s throats proves the point that there is no such thing as the Muslim collective. Today, society is just a configuration of the different statuses enjoyed by Muslims … the poor, the rich, the oppressed, the oppressors, the powerful and the powerless.

Your hypothesis reeks of disillusionment, meaning that your life-long activism led nowhere.

No, I still believe that the people who came under our influence will eventually rise to recreate the system. I am proud today of the number of students who learnt to think with me. My generation may have failed but I still see light at the end of the tunnel.

It is interesting to see the conventional historical narratives being challenged and analyzed in more depth on both sides of the divide in South Asia.

A serious introspection of events which led to the partition of India can either reopen or help heal the wounds, depending on how the mainstream scholars and leaders in the two nations choose to deal with history.

In my view, Pakistan is a reality that must be accepted, and supported by all to make it a peaceful, stable and prosperous nation, and to ensure regional peace and prosperity. A healing process in the subcontinent can do a lot of good for all of the people of South Asia. It can bring lasting peace between India and Pakistan, and potentially move the region toward a successful common market similar to the European Union.

Related Links:

Jaswant Lauds Jinnah

Feudal Slavery Survives in Pakistan

Ode to Feudal Prince of Pakistan

Is Pakistan Too Big to Fail?

Global Firepower

Jinnah's Pakistan Booms Amidst Doom and Gloom

Quaid-e-Azam M.A. Jinnah's Vision of Pakistan

India Wins Freedom by Maulana Azad

Ayesha Jalal Taking On Pakistan's Hero

The Poor Neighbor by William Dalrymple

Iqbal and Jinnah

Two Nation Theory

Democracy in Pakistan

By Suhail Hamid

In the Musharraf period, one of the main reasons for the economic growth was a drastic reduction in bureaucratic controls in the economic sector, thereby increasing the participation of the business and service sectors. This in turn led to a rising middle class, increasing consumer spending leading to an economic progress spiral in the classical fashion. Any other country to have put this process in place would have striven to maintain it at all costs. Unfortunately this did not happen, primarily because of the self destructive mindset of some influential segments of our population and the naivete of our leadership.

Let me try to explain this viewpoint from a historical perspective.

Broadly, the global economy can be divided into two stages, a) pre industrial revolution and b) post industrial revolution.

The pre industrial revolution systems are natural resource based or traditional agriculture based. In both these systems the sustenance of human beings is mainly dependent on natural growth of food products.

The post industrial age economy is human resource based, where human sustenance has become dependent on the products of human effort. Essentially this means that manufacturing and services sectors become the primary source for people to get their food and shelter.

The main issue in Pakistan as well as in other third world countries is the transformation of a society from a pre-industrial revolution natural resource and agriculture based, to a post industrial revolution human resource based economy. This transformation becomes necessary when the population of a country increases to a level which exceeds the population support capacity of the traditional economic system. This transformation is generally not achievable through unbridled democracy as it is against the interests of the majority of the population in its earlier stages. Therefore, this change has to be put in place by the ruling establishment, provided they're a) conscious of this fact and b) willing to effect this change smoothly for the betterment of future generations. Once this transformation is achieved, then democracy becomes a sustainable system of governance.

Lets see how this transformation has been achieved in various parts of the world:
1- In the US this was achieved through the civil war of the 1860s. The resistance of the southern states to this transition was so strong that they declared independence and a war was needed to resolve the issue. To end that matter for ever, Gen. Sherman (the commander of the Union forces), totally burnt and destroyed a 50 mile wide strip of land all the way from Atlanta down to the Gulf of Mexico, to prevent the two sides of the Confederacy from ever regrouping. After that democracy has functioned smoothly.
2- In Western Europe, this was achieved over a longer period starting from the French Revolution and lasting till around the mid-19th century. After the French Revolution, the Western European monarchies developed working relationships with the emerging capitalist classes, gradually removing the aristocracy from positions of authority; this policy avoided revolutions elsewhere. As the capitalist economy consolidated, democracy took over as the system of governance.
3- In Eastern Europe, Russia and Central Asia, this transformation took place with the Russian Revolution in 1918. Although USSR finished off in the 1990s, but the transformation to the post industrial revolution human resource based system was completed. This is the real achievement of the Russian Revolution and the succeeding governments in the USSR. Democracy may now become and sustain as the system of governance in these countries.
4- Far East. All the countries achieved or are achieving this transformation through home grown leadership committed to this change. The most prominent example of course being China. The recent Thai developments indicate a growing awareness that democracy cannot achieve this change and in fact becomes an impediment. Countries like S. Korea and Singapore are past that phase and gradually adopting to democracy.

Now lets see some other examples which confirm the same principle:
1- Saudi Arabia, UAE, Qatar, Kuwait etc. Since their oil production generates the requisite funds to run the country, there is no imminent need for this transition. So the political system of kingdoms is pretty stable and surviving. Even then the kings are effecting a transformation of their countries to modern manufacturing and service sector based economies, with a view to future betterment.
2- India is trying to achieve this transition through democracy but the progress (if really there is any) is extremely slow and painful. This is not very evident to the world because Indians are very good at presenting a bright picture of themselves, but the fact is that they have a pitiably small industrial base and not being able to expand it to the needs of its populace. Their per capita GNP is much lower than Pakistan, a country with directionless politics and a total lack of awareness.

I think our civil society, media and political leadership should understand that elections is a means, not an end in itself. The end is governance through which the national objectives are achieved. In our case, like all third world countries, this objective is to achieve the transformation from agriculture or natural resource based systems (which cannot sustain the increased population), to a modern human resource based system to have a large enough manufacturing and service sector base to support the increased population. Any government (or form of government) which furthers this change is constructive for the society, and those retarding this change are destructive. Unfortunately our parliamentary form of governance invariable always ends up doing the latter function.

A couple of recent examples demonstrating this awareness in some parts of the world:
1- In China, the industrial base covers only about 30% of the population and is dominating the world economies. The Chinese are trying to expand it ruthlessly without any consideration to the immediate concerns of the rural population. However, this policy will benefit the next generations of the rural populace. Had the Chinese adopted democracy 20 years back, they'd probably still be in a quagmire like other third world nations.
2- In Thailand, the military coup of 2006 was supported by the King, a new constitution was adopted that reduced the power of the parliament, increased the power of bureaucracy (incl judiciary) which is now used by the King (aided by army) to keep the transformation on track even if the elected leaders representing the decadent economic classes try to stall it. As you can see various components of the establishment (the royalty, army, businessmen, professionals, bureaucracy, traders etc) collectively trying to steer the country towards its objective. Whether they succeed or fail is another issue that time will tell, but they're at least trying to do that. So I think the Thai case is a very practical demonstration of the limitations of democracy in a developing country.
In our country, except for the royalty, other sections are there similarly but fighting each other for the sake of elections, thereby always handing over power to the decadent classes who, to their credit I must say, are generally willing to adapt to the change when thrust upon them. PML-Q type politicians are typical of our rural establishment and have always been willing to adapt to the changing world, right from the 1960s era of industrialization to the Musharraf era economic growth. The biggest resistance comes from the urban middle classes who, in fact, would be the beneficiaries of this transformation. So I would call it a naive thinking to the extent of downright stupidity on their part. I think that's because the western media has hammered democracy into our heads as a matter of belief not to be questioned like religious belief systems. We should not blame them for doing so as that's the right system for the level of development of their society. Instead we should use try to understand things in a better way, and not get carried away by the herd mentality.

A powerful and aware middle class essential for true democratic governance in Pakistan or anywhere else, is the effect of this economic transformation, and cannot be its cause; the middle classes of our country, in particular, should understand this fact. A real participatory democracy to serve all Pakistanis with appropriate checks and balances, can only be expected after that.

Related Links:

Future of Democracy in South Asia

Middle Class Clout Rising in Pakistan

Is Pakistan a Democracy Now?

Khadim or Makhdoom? (Servant or Master?)