It was revealed in a testimony before the Supreme Court last week that in 1990 the then president of Pakistan, Mr Ghulam Ishaq Khan and the army chief General Aslam Baig forced the head of Mehran Bank to provide to the Inter Services Intelligence a sum of Rs345 million in the ‘supreme national interest’, out of which Rs140 million was used to bribe a raft of politicians to form an alliance to oppose Mohtarma Benazir Bhutto in the elections of 1990.
This exposure comes close on the heels of a rather more public transfer of hundreds of millions of rupees by the incumbent government, to individual members of the National Assembly, as development funds for their constituencies, days before they were to vote in the Senate elections. These are manifestations of the prevailing model of governance and the associated social order.
Power in Pakistan is constituted by appropriating state resources legally or illegally, for sharing with other factions within the elite coalition to retain their support, or with personalised dependents to build individual domains of power.
This patron-client model of governance is integral to a social order that, through its institutional structure, systematically generates rents or unearned income. This is done by restricting competition and excluding the majority of people from the process of investment, high wage employment and equitable access over markets, basic services and participation in governance.
The prevailing rent-based model of governance originated in the British colonial period. It had emerged following the peasant revolts in 18th century-Punjab, whereby the old Mughal elite was overthrown and replaced by the upper strata of the peasantry.
The colonial government consolidated the position of the new peasant lineages through revenue settlements which formalised the proprietorship of the new ‘zamindars’ over land. Furthermore, a resource gratification for the new agrarian-elite which was unprecedented in Indian history emerged: the development of the canal irrigation system by the British and the associated process of appropriating irrigated land as ‘crown waste’ to be utilised and granted to selected loyal ‘zamindars’ at the political discretion of the government.
Two organisations of the state that were particularly strengthened by the new institutional arrangements, were the army and bureaucracy as they were given control over a significant proportion of state resources, training and positions within the power structure.
These economic and social processes led to the emergence of a coalition of the military, landed-elite, bureaucracy and state-nurtured capitalists, who began to exercise state power in the post-independence period. Within the power structure, the military had a dominant position and the lion’s share of resources.
Each of the political regimes in Pakistan’s history used available opportunities to devise their own characteristic forms of rents. In the early 1950s, ‘evacuee property’ was granted to favoured immigrants from India. In the 1960s, the Ayub government’s policy of commercial licenses, cheap credit, import protection and subsidies constituted rents for selected families. In the 1970s, the nationalisation and expansion of the state apparatus enabled lucrative appointments in the state sector to party loyalists of the prime minister ZA Bhutto regime. In the 1980s, Ziaul Haq’s government provided opportunities to his supporters to skim off foreign aid and weapons meant for the Afghan Jihad. In the 1990s, rents were mainly generated through milking the banking sector. In the Musharraf period, it was allegedly done by using public sector entities to manipulate the stock market for windfall gains for the rulers. In the present period we have seen development funds being used to gain political support. Thus, while the model of governance remains, the forms of rent vary.
Those who talk of ‘change’ may wish to consider that it involves changing the very model of governance and the underlying social order: this means the coalition of elites, the educational system, the religious and ideological apparatus and the entire set of formal rules and informal norms which serve to generate rents for the rulers.
Published in The Express Tribune, March 13th, 2012.
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