Pakistan’s urgent problems and challenges are all governance related. Dr Husain’s builds a strong case for understanding and confronting the crisis of governance in Pakistan in his new book
Pakistan’s main issue has been its crisis of governance as manifested by a weak institutional framework. In nearly seventy one years of existence, Pakistan has been ruled by four governor generals, twelve presidents (including four military dictators) and twenty five prime ministers (including seven caretaker prime ministers entrusted with the job of holding elections).
It has witnessed thirty two years of military dictatorship and thirty eight years of civilian rule (although military establishment called the shots behind most of civilian facades). It has experimented with both presidential and parliamentary forms of governments. The crisis of governance, however, has continued to persist — thus eroding the capacity of the state, impacting citizens’ quality of life and affecting the development trajectory.
In the last decade and a half, three important books analysing Pakistan’s crisis of governance have appeared: Stephen Cohen’s The Idea of Pakistan, Anatol Lieven’s Pakistan — A Hard Country, and Christophe Jaffrelot’s The Pakistan Paradox. Former governor of State Bank of Pakistan Dr Ishrat Husain’s Governing the Ungovernable — Institutional Reforms for Democratic Governance is a timely and significant addition to the aforementioned list of noteworthy books; more importantly, it is the first to be written by a prominent economist who has extensive experience of public administration and public policy.
Starting his career as a government servant in Pakistan, Dr Husain rose to a high level in the World Bank hierarchy covering East Asia region, became governor State Bank of Pakistan and also served as Chairman National Commission for Government Reforms during General Musharraf’s tenure, and later headed Institute of Business Administration in Karachi. Author of several books on Pakistan’s economy, Dr. Ishrat’s latest offering, divided into eighteen enlightening chapters, is a comprehensive and compelling analysis of the landscape and history of governance in Pakistan.
Covering a wide array of topics — history, economy, polity, society, federal and provincial governments, the civil service, the judiciary, the military and the private sector — the book challenges many widely held assumptions, busts many myths, questions multiple misconceptions, and prescribes solutions to different problems. Given the vast range of topics covered, the most insightful chapters are on economic issues or political economy while those on non-economic subjects rely a lot on excerpts from newspaper articles and literature review of books on that subject.
Dr Ishrat Husain sounds more optimistic than realistic when he argues that an urbanised, politically aware, and growing middle class will be the catalyst for demanding progressive governance reforms.
Ishrat Husain’s key thesis is that the economic history of Pakistan can be divided into two distinct phases: 1947 to 1990 and 1990 to 2017. During the first four decades after independence, Pakistan’s economic and social indicators ranked among those of top ten developing countries (ahead of India). After 1990, Pakistan’s economic performance has been so poor that both social and economic indicators have fallen behind those of its South Asian neighbours such as India and Bangladesh. Since the 1980s IMF has been approached by Pakistan (twelve times), India (just once), Bangladesh (three times) and Sri Lanka (twice).
Pakistan displayed stellar economic performance (growing annually at the average rate of six per cent) during the first four decades despite numerous challenges and serious crisis-rehabilitation of eight million refugees in the first decade; military dictatorship for twelve years leading to dismemberment of the country in 1971; nationalisation of key economic sectors by Bhutto in the 1970s; Islamisation of society and economy under Zia in the 1980s while waging Afghan jihad in partnership with Washington and Riyadh.
Husain believes that an independent and politically neutral bureaucracy was the main reason for Pakistan’s impressive economic performance and efficient service delivery till late 1980s. It was Bhutto’s bureaucratic reforms — most importantly withdrawal of security of service provision — which set the country’s governance on the road to ruin due to weakening of civil institutions, politicisation of government service, and thriving of mega-corruption amidst institutional atrophy.
This diagnosis is correct and well-known; even Bhutto’s successors did not reverse his reforms as all political and military governments found it politically expedient to keep the civil service subservient. However, one important point unexplained by this systematic decline of bureaucracy after 1973 argument is that an impartial and efficient civil service could not check unequal economic growth in West and East Pakistan in the first two decades, which ultimately resulted in secession of Bangladesh from Pakistan.
The book busts many myths and challenges well-entrenched assumptions: Despite military’s domination of Pakistan as expressed in the “garrison state” hypothesis, defence spending, as a proportion of Gross Domestic Product (GDP), has been declining since the 1990s. Lowest budget allocation for military took place during Musharraf’s time. Currently, the combined budgetary allocation of education and health is higher than that of defence and internal security. However, as pointed out by the author, defence spending figure since 2000 does not include numbers for military pensions which are considered part of civilian pension account, thus bringing down the overall defence spending figure. Moreover, most of the expensive defence spending on nuclear programme took place before 1990.
The topic of military’s expanding corporate influence is also discussed and it is shown that military owned-corporations accounted for just 4.5 per cent of the corporate sector’s total market value in 2016. Two monopolistic army related organisations — Frontier Works Organisation and National Logistics Cell — are singled out for lack of transparency while bidding for civilian contracts. Military’s presence in urban real estate sector in the form of housing societies and allotment of agricultural lands to senior army generals is not discussed in detail although Defence Housing Societies projects have been criticised as elitist and example of poor public policy.
Pakistan’s economic adrift has often been attributed to the increasing religious extremism and terrorism since 9/11. Ishrat points out economic decline started in the 1990s, well before Pakistan got into the war against terror, as economic growth declined to an average rate of 4.5 per cent and incidence of poverty rose during comparatively tranquil but politically unstable 1990s. He observes that economic growth rose to 6 to 7 per cent, investment/GDP ratio peaked at 23 per cent and foreign investment jumped US $5 billion during Musharraf years (2002-2008) when Pakistan was fully involved in the war against terror.
The security deficit hypothesis does not pass the test even in recent years as economic performance during 2013-16 period improved despite Zarb-e-Azab launched against terrorists. There is, however, no denying the fact that the growth would have been even higher if Pakistan had not been beset by law and order situation arising out of frequent terrorist attacks.
One of the oft-repeated arguments is that Washington has always supported military dictators with generous aid in the 1960s, 1980s and 2000s, which has translated into high economic growth during the tenure of military dictatorships. Ishrat Husain reveals that even civilian governments have been recipients of huge external inflow from friendly Gulf countries or international financial organisations whether it was Bhutto’s government or Nawaz Sharif’s government or even Zardari government (which was recipient of generous US Aid under Kerry Lugar Bill). He argues that it is the quality of governance, not external funding, which is the key determinant of better economic performance.
Washington calibrates its policy according to its own interests and has also cut-off aid to military dictators such as Ayub Khan and Yahya Khan during 1965 and 1971 wars. Condoleezza Rice admitted in her book about the role that Washington played in brokering a deal between military dictatorGeneral Musharraf and Benazir Bhutto in 2007, which ultimately led to Musharraf’s ouster after PPP was voted into power following Benazir’s assassination.
Along with the quality of leadership at the top, it is the better maintenance of the rule of law and political stability that affect economic growth. A study by the World Economic Forum concludes that a slight improvement in governance leads to a threefold increase in per-capita income in the long-run — pointing to the potential gain to be accrued from improving civilian institutions of governance in Pakistan.
Although military governments seem to have outperformed civilian governments in economic performance and governance, the book makes a very forceful argument for continuation of democratic process in Pakistan without any interruption as all military interventions have resulted in transient gains due to reforms which are immediately rolled back once the democratic parties are back in power. Military government initiated reforms, no matter how well-intentioned and technically robust, suffer from lack of legitimacy. Frequent episodes of martial law have resulted in political instability which negatively impacts economic growth in the long run.
After the eighteenth amendment, provinces have become powerful due to transfer of many subjects from the federation to provinces, which unfortunately suffer from lack of capacity and expertise. Moreover, true decentralisation will only take place when provinces devolve power, with financial and administrative powers, to the local government.
Ironically, the most meaningful devolution experiments have been undertaken by military governments as civilian governments prefer local bodies system (performing just municipality functions) instead of local governments enjoying devolved and delegated powers. The future of local government, after eighteenth amendment, does not look bright as MNAs/MPAs do not want development functions performed by local governments and authoritarian provincial chief ministers prefer local bodies, headed by bureaucrats, who can be kept on a tight leash.
Military has played a dominant role in the country for most of its history — undermining the development of democracy. Judiciary, apart from the last decade of independence and activism, has mostly been subservient to both military and civilian governments. Political parties have been dynastic and dysfunctional with an unimpressive record of governance tainted with corruption.
Civilian-military relationship has also been discussed in the context of an activist judiciary, strong executive and weak parliament. The onus is on civilian leadership to make parliament an effective forum which can exercise its supervisory powers on the executive and exert civilian supremacy. Election Commission has to be made independent so that it can play its due role in strengthening democracy through proper screening of electoral candidates and organising free and fair elections as is the case in neighbouring India, where there is no need for caretaker governments in presence of an independent and effective Election Commission. Political parties should hold meaningful and periodic internal elections as the current dynastic model has weakened the political system, patronised poor quality of loyalty based political candidates and promoted corrupt practices.
Absence of a sizeable, significant and committed reform constituency in the country is a major hurdle in the path of reform. Political parties eschew reforms as it involves pain and adjustments and the dividends might take long to accrue — after the election cycle. Donor-driven reform efforts have been unsuccessful, weak and half-hearted. Dr Ishrat Husain sounds more optimistic than realistic when he argues that an urbanised, politically aware, and growing middle class will be the catalyst for demanding progressive governance reforms.
Pakistan’s urgent problems and challenges — tackling extremism, urbanisation, population growth, water scarcity, federal decentralisation, and climate change — are all governance related. Dr Husain’s highly readable book should be compulsory reading for politicians and policy-makers for understanding and confronting crisis of governance in Pakistan.
By: Ammar Ali Qureshi