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Pakistan’s Economy as Envisaged by the Quaid-e-Azam

Though preoccupied with constitutional, political and organizational issues the Quaid-e-Azam gave clear indications of how he envisaged Pakistan’s economy. When put together, his views on the economy make a coherent pro-poor economic program with a vision, a strategy and policy guidelines for the uplift of the poor people that have much current relevance.
The Quaid’s main concern were the poor people and not the nobility and landed elite on whom he relied for the struggle for Pakistan. He emphasized “equality and brotherhood of man … and equal opportunities for all.” That is also how he understood the struggle for Pakistan as the uplift of the poor people. On March 26, 1948 in Chittagong he said: “we fought for Pakistan because there was a danger of denial of these human rights in this sub-continent.” Therefore, he said: “You are only voicing my sentiments and the sentiments of millions of Musalmans when you say that Pakistan should be based on the sure foundation of justice and Islamic socialism.”
The Quaid’s foremost concern for the poor people is reflected in his speech to the Constituent Assembly on August 11, 1947 in which he described his vision of a “happy and prosperous” Pakistan. And said that to achieve this, it is important to “wholly and solely concentrate on the well-being of the people, and especially of the masses and the poor.”
The Quaid believed that the foremost duty of the government, as “of every civilized government” is to “educate the masses” (from his speech before the Viceroy’s Council in 1911). He condemned the ruthless exploitation of the working people. He rejected the Western economic theory and system. He favored an industrial policy to “decrease our dependence on the outside world for necessities… give more employment to our people and …increase the resources of the state,” while reserving a key role for individual initiative, but with “essential key industries (including public utilities)…controlled and managed by the State.” The Quaid’s latter view is at odds with the “principled ideology” of the Privatization Commission that “the government has no business being in business” (as declared on its website)!
The Quaid’s focus on uplifting the poor people could not have been welcomed by landlords and capitalists who depend on exploiting the working people. Exploitation of the working people was ruthless. According to S.M.Akhtar, more than three fifths of the peasants’ harvest and often ninety percent was taken by the landlords on various pretexts. The tenants were practically slaves of the money-lending landlords. The Quaid was compelled to say at the All-India Muslim League Council on April 24, 1943: “Here I should like to give a warning to the landlords and capitalists who have flourished at our expense by a system which makes them so selfish that it is difficult to reason with them. The exploitation of working people has gone into their blood.”
About his rich associates the Quaid advised Governor Mudie thus: “wash your hands of them, as I am going to do.” Meanwhile, the Quaid encouraged Mian Iftikharuddin to publish the Pakistan Times which became a vehicle for progressive views in Pakistan until it was strangled by Gen Ayub Khan
What followed after the Quaid is the nemesis of the Quaid’s vision of Pakistan—a setup for cronyism, a system of the rich, by the rich and for the rich with unbridled militarism that drains our fiscal resources and cripples essential public functions. The situation is well described in a study by Callard published in 1957: “Jagirdars and Zamindars, Pirs and Mirs, Makhdooms, Khans and Nawabs retain vast political influence,” which is as true now as then. “A small, well-defined group of men monopolized political office throughout the country.”
Quickly forgotten by this ‘group of men’ were the Quaid’s alluring promises to the poor people of emancipation. An Act was even passed in 1950 in Punjab to eject a tenant if “he is guilty of reading out at a public or private meeting the Punjab Muslim League Manifesto of 1944,” which advocated land reforms.
According to the Land Reforms Commission report of 1959 over six thousand landlords had acquired more land than 3.3 million peasant households and about a hundred Jagirdars of Sind owned 1.1 million acres. By means mostly foul, they grabbed even more land from impoverished peasants and the land abandoned by the Hindus, including 800 thousand acres of over 1.3 million acres in Sind that were intended for distribution to destitute refugees from India, one acre per person.
The capitalists acquired more capital: 49 percent shares of the State Bank were distributed to them, the tax on super profits was reduced, a public corporation was setup to provide finance to them, and in 1952 the PIDC was setup by the government that constructed industrial enterprises and handed them over to the businessmen.
Meanwhile the exploitation of workers worsened. Even the colonial Factory Act 1934 was ignored and 10-12 hour working days were routine. As a result, the Pakistan Times reported on August 14, 1950 that over two hundred thousand workers died yearly from tb and 125,000 from malaria. Sixty five percent of workers’ children had tb and 90 percent had rickets.
Instead of concentrating on the well-being of the poor as directed by the Quaid, dictators from Ayub to Zia to Musharraf imposed a western free market system, which has nothing to do with uplifting the poor but everything to do with imposing a harsh, unequal and less democratic society. And this, despite the Quaid’s warning on July 1, 1948 at the opening ceremony of the State Bank: “The adoption of Western economic theory and practice will not help us in achieving our goal of creating a happy and contented people. It has failed to do justice… It is largely responsible for the two world wars.”
Yet, the free market approach that hails unemployment as part of the law of supply and demand has several devotees in the country: “If the birth rate is high,” argued one Lahore-based English newspaper in May, “the economy will lag behind in education… unskilled workers are cheap and unprotected because of excess supply.” Such approach contradicts the Quaid’s fundamental principle of equal opportunities for all. Starvation is not a legitimate weapon to use against labor. Poverty and inequality rationalized as inevitable by-products of the rule of supply and demand—are not inevitable at all!
Political choices, in particular, consciously adopted pro-rich economic policies, not economic laws, led us away from an egalitarian economy. They worsened inequality leaving millions of poor people suffering hunger and malnutrition. When there are “millions upon millions of our people who hardly get one meal a day,” the Quaid asked the All India Muslim League session on April 24, 1943: “Is this civilization? Is this the aim of Pakistan? If this is the idea of Pakistan, I would not have it.”
Revisiting the Quaid’s views on Pakistan’s economy is a reminder of how far we have strayed from his dream of eradicating poverty and class distinctions from the country. It is a reminder of how different things could be without right-wing dictators. It is a reminder that a seismic shift in government strategy and policy to concentrate on the well-being of the poor people is long overdue.

Gentleman sorry to say NOTHING has grown except INFLATION, CORRUPTION, LAWLESNESS and Bad Governance of this Century. I may while respecting others views would say its corruption Rule. Every thing is Burning yet NERON is Singing.

Dear friends

Long Live the King........Long Live our Corrupt Democracy.

The Real GDP is estimated to grow at 2.4 percent on the back of strong performance of services sector as against actual growth of 3.8 percent last year and target of 4.5 percent.

.. The growth in the agriculture is estimated at 1.2 percent on the back of 3.7 percent growth in the livestock sector.  .. Output in the manufacturing sector has witnessed expansion of 3 percent in 2010-11 as compared to expansion of 5.5 percent last year on the back of strong performance from small and medium manufacturing sector.
.. Large-scale manufacturing grew 1.7 percent in July-March (2010-11) as against 4.9 percent as comparing to last year.
.. The services sector grew by 4.1 percent against the target of 4.7 percent and actual outcome of 2.9 percent.  .. Pakistan’s per capita real income has risen by 0.7 percent in 2010-11 as against 2.9 percent last year.
.. Per capita income in dollar term rose from $ 1073 last year to $ 1254 in 2010-11, thereby showing tremendous increase of 16.9 percent.
.. Real private consumption rose by 7.0 percent as against 4.0 percent attained last year.
.. Revenue collections of FBR stood at Rs 1,156 billion during July-April 2010-11, thereby reflecting 12.6 percent growth  over Rs 1,026.5 billion collected during the corresponding period last year.
.. Total expenditure of Rs. 3,257 billion was estimated for the full year, comprising of Rs. 2,641 billion of current expenditure (81.1% of total), and Rs. 617 billion of development expenditure (18.9% of total).
.. SBP has raised the discount rate to 14 percent on November 30, 2010, and decided to keep the rate unchanged at 14 percent.  .. The government borrowing from the banking system for budgetary support and commodity operations stood at Rs 342.2 billion during July-April, 2011.  
.. Government has borrowed Rs 196.3 billion from the State Bank of Pakistan (SBP) while Rs 275.9 billion has been borrowed from the scheduled banks.  
.. Net inflow of foreign investment in Pakistan from July-March 2010-11 was US$ 301.5 million which as compared to US$431.9 million in the last corresponding period.
.. The inflation rate as measured by the changes in Consumer Price Index (CPI) stood at 14.1 percent during July-April (2010-11), as against 11.5 percent in the comparable period of last year.
.. Overall exports recorded a positive growth of 27.8 percent during the first ten months (July-April) of the current fiscal year. Exports increased from $15,773.2 million to $20,154.2 million in the period.
.. Imports during the first ten months July-April (2010-11) increased by 14.7, raching to $32.3 billion.  .. Workers’ Remittances totaled $ 9.1 billion in July-April (2010-11) as against $ 7.3 billion in the comparable period of last year, depicting an increase of 23.8 percent.  .. Current Account Balance improved significantly during the last two years or so. Current account recorded a broad-based surplus of $ 748 million in July-April 2010-11 as against deficit of $3456 million in the comparable period of last year.  .. Exchange rate remained more or less stable as rupee depreciated by just 2.2 percent in July-April 2010-11, however, Real Effective Exchange Rate (REER) appreciated by 0.8 percent in the period.
.. Foreign direct investment (private) stood at $1232 million during the first ten months (July-April) of the current fiscal year as against $1725 million in the same period last year thereby showing a decline of 29 percent.
.. Foreign Exchange Reserves amounted to $ 17.1 billion by the end of April, 2011. Of which, reserves held by State Bank of Pakistan stood at $ 13.7 billion and by banks stood at $ 3.4 billion.  .. During the first nine months of the current fiscal year 2010-11, Pakistan’s total external debt increased from $55.9 billion at end-June 2010 to $ 59.5 billion by end-March 2011, an increase of US $ 3.6 billion or 6.4 percent.
.. The overall literacy rate (10 years & above) which was 57.4 percent in 2008-09 has increased to 57.7 percent in 2009-10, indicating 0.5 percent increase over the same period last year.  .. There are 972 hospitals, 4842 dispensaries, 5344 basic health units and 909 maternity and child health centres in Pakistan.  .. With availability of 144,901 doctors, 10,508 dentists, 73,244 nurses and 104,137 hospital beds in the country by 2010-11, the population and health facilities ratio works out at 1222 persons per doctors, 16,854 persons per dentist and 1701 persons per hospital bed which compares well with the other developing countries.
.. According to the latest estimates population of Pakistan stood at 177.10 in 2011 and is sixth most populous country of the world.  If the existing trend remained unchanged, it will reach 191.7 million by the year 2015 and 242.1 million by 2030 (Estimates and projection by Sub-Group II for the 10th five year People’s Plan 2010-15).
.. Growth Rate is 2.05 percent and total Fertility Rate (TFR) is 3.5 per woman.
.. Life expectancy in Pakistan is 64.18 for male and 67.9 for female.
.. Pakistan has the total labour force of 54.92 million and is the 9th largest country in the world with respect of the size of its labor force in 2010.
.. About 3.05 million labour force is estimated as unemployed in 2009-10, with an unemployment rate of 5.6%.  .. The floods of 2010 have caused a significant loss to poverty reduction efforts.
..10 percent rise in domestic food prices in Pakistan for one year could push an additional 3.47 million people below the $1.25-a-day poverty line or worsen poverty situation by 2.2 percentage points.
.. Food inflation in Pakistan has averaged 18 percent for the last four years which implies significant deterioration of purchasing power of the poor.  
.. The Government has prioritized the 17 pro-poor sectors for budgetary intervention through the Medium Term Expenditure Framework (MTEF) from 2008-09 to 2010-11 in the PRSP-II.
An amount of Rs.482.6 has been spent on these areas during July-December 2010 which is 15.8 percent higher than in the comparable period of last year.
.. The social safety nets are major initiatives to reinforce the government’s efforts to reduce the adverse effects of poverty on the poor.  
..Pakistan has a road network covering 259,463 kilometers including 180,866 KMof high type roads and 78,597 km of low type roads.  .. Since March 2008, NHA has launched/awarder 36 development projects covering a length of above 1000 km inclusive of a number of bridges, flyovers and interchanges.  .. During the year 2010-11 (July-March), in railway, there has been fall in growth rate of passenger traffic by 17.6 percent but freight traffic grows at the rate of 17.7 percent.  .. During the calendar year 2010, PIA earned the revenue of around Rs. 107 billion as compared to last year of Rs. 94.6 billion.  .. Karachi Port Trust handled a total of 20.2 million tones of cargo during 2010-11 (July-Dec).
.. Port Qasim Authority handled 13.1 million tones cargo during the current financial year 2010-11 (July-Dec).  .. Production of crude oil per day has increased to 65,996.50 barrels during July-March 2010-11 from 65,245.69 barrels per day during the same period last year, showing an increase of 1.15 percent.  .. The average production of natural gas per day stood at 4050.84 million cubic feet during July-March 2010-11, as compared to 4,048.76 million cubic feet over the same period last year showing an increase of 0.05 percent.  .. The total installed capacity of PEPCO system is 20,681 MW as of March 2011, compared to 20,190 MW in first nine months of the last fiscal year.
.. Total installed capacity of WAPDA stood at 11,439 MW during July-March 2010-11 of which hydel accounts 57.30 percent or 6,555 MW, thermal accounts for 42.70 percent or 4,884 MW.  .. During the first nine month of current fiscal year 66,928 GWh of electricity has been generated by WAPDA as against 64,935 GWh in the same period last year showing an increase of 3.07 percent.  .. The number of villages electrified increased to 160,110 by March 2011 from 147,038 recorded in March 2010.  .. Presently there are 3329 CNG stations operating throughout the country. By March 2011 about 2.5 millions have been converted to CNG Coal .. Supply of coal during July-March 2010-11 has been recorded at 5.85 million tonnes compared to 5.304 million tonnes in the first nine months of last fiscal year.
.. Brick kilns and cement industry consumed 56.6 percent and 42.7 percent respectively of the supplied coal.  .. The government is developing Thar Coalfield in order to increase the share of coal in energy mix and to reduce dependency on expensive imported fuel.
.. Rapid urbanization is putting the available insufficient infrastructure under enormous pressure and causing environmental debacles of great magnitude.  .. Serious risks of irreversible damages are present due to air and water pollution, mismanagement of solid waste and destruction of fragile ecosystems.
.. Implementation of the climate change program under Tenth Five Years Plan will be carried out through coordinated efforts