Setting the record straight: Not all dictators equal, nor all democrats incompetent

Published: May 20, 2012

2.62% is the economic growth achieved during President Asif Ali Zardari’s tenure, the lowest for any ruler.

KARACHI: 

When it comes to economic growth, the old Pakistani cliché that dictators are better than democrats – while broadly true – is too generalised a statement and hides some rather interesting variations.

The Express Tribune took the trouble to go through Pakistan’s historical GDP growth rates and compared various governments. We used GDP growth numbers from the Pakistan Bureau of Statistics records, which go all the way back to fiscal year 1952. We then calculated the geometric average (which calculates the compound average growth rate) rather than the simple arithmetic average to calculate the growth rates during the entire tenure of a government and then we ranked them. The results were somewhat surprising.

For instance, former President Ayub Khan – widely regarded as Pakistan’s best ruler when it comes to economic growth – is actually in second place. The number one spot is held by former President Ziaul Haq, who averaged 5.88% growth during his 11 years in office.

For fans of President Ayub who insist that his record before the 1965 war was better, we checked: it is not true. Pakistan’s growth rate during that period averaged 5.73% per year, which is actually lower than President Ayub’s own overall average of 5.82%. Having said that, industrial growth from the 1958 coup to the 1965 war averaged 9.21%, higher than any Pakistani ruler’s record, including Ayub’s own overall average of 8.51%.

Another surprising insight: if one ranks the ten rulers Pakistan has had since 1952 according to the average economic growth rate during their tenure, both the top five and the bottom five include three dictators and two democrats.

Yes, the top three slots are undoubtedly all taken up by the usual suspects: former Presidents Ziaul Haq, Ayub Khan and Pervez Musharraf, in that order. The next two are somewhat surprising: Benazir Bhutto comes in at fourth place and her father Zulfikar Ali Bhutto is not far behind. The supposedly pro-markets Nawaz Sharif comes in at seventh place.

Yet another surprise: Benazir Bhutto’s average was 5.08%, not far off from Pervez Musharraf’s 5.14%. She beat her rival Nawaz Sharif by a full percentage point: Pakistan’s economic growth averaged 4.06% during Nawaz Sharif’s both terms as prime minister.

Length of time in office appears to matter far more than whether the ruler was a dictator or a democrat. The top three were all in office for at least nine years, with the top two each in office for eleven years. Yahya Khan, Iskandar Mirza and Ghulam Muhammad – none of whom was democratically elected or subject to a popular mandate – all come in close to the bottom of the rankings. None of them had longer than four years in office.

But the more intriguing question to ask is why both the Bhuttos vastly outperform Nawaz Sharif.

The answer lies in the breakup of the GDP number: while Nawaz beat both Bhuttos on industrial growth, he was abysmal when it comes to agriculture. Benazir Bhutto was the best in Pakistani history for agriculture, which grew at an average of 6.65% during her five years in office.

Zulfikar Ali Bhutto, meanwhile, had blowout growth in services, averaging 10.63% during his only term in office, the highest of any Pakistani ruler. (Oddly enough, the elder Bhutto had a poor track record on agriculture, despite his family background. Agriculture grew at a paltry 2.12% per year during his tenure, worse even than Nawaz.)

For those who are currently pessimistic about Pakistan’s economic prospects, you may find some comfort in knowing that the numbers back you up: President Asif Ali Zardari ranks dead last in terms of economic growth, averaging a paltry 2.62% during his term in office so far.

Published in The Express Tribune, May 20th, 2012.

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Reader Comments (20)

  • Nadir
    May 20, 2012 - 6:03AM

    These comparisons are way to simplistic, and mask the fact that the growth/lack of growth has less to do with their policies but what was going on in the wider world. Ayubs period saw the Korean War increase the demand for raw materials, particularly jute. Zia’s period saw influx of US/Saudi Funds and the growth of remittances from migrants workers from the Middle East who had settled and some who had started enterprises. Musharaf led a consumption fueled period of growth, which was impressive for some, but poor quality growth that magnified inequality and caused long term problems. Both the end of the Musharaf era and Zardaris reign have been dampened by high global energy prices which were above the long term trend over the period. BB probably enjoyed the bump in GDP figures from baby steps towards privitization and the influx of IPP money. The qualifications and analysis are endless, just looking at GDP figures draws poor conclusions.

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  • JSM
    May 20, 2012 - 6:25AM

    Law of diminishing returns.

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  • May 20, 2012 - 6:30AM

    It appears to me that the author is understating growth during military regimes and overstating it for periods under civilian rulers. For example, most independent economists believe that 1990s was Pakistan’s “lost decade” and this piece does not bring out that fact clearly.

    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).

    http://www.riazhaq.com/2010/09/brief-history-of-pakistani-economy-1947.html

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  • ashar
    May 20, 2012 - 10:35AM

    Good analysis, however it should have been complemented with the anticipated figures or what was required.

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  • ammar
    May 20, 2012 - 10:56AM

    Keeping in the dollars and petro dollars that came during dictatorship…Bhuttos have done a decent job…

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  • faraz
    May 20, 2012 - 3:09PM

    If I’m not mistaken, high economic growth during Zia’s term was mainly due to US and other foreign aid.

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  • Meekal Ahmed
    May 20, 2012 - 3:39PM

    Farooq, this is interesting but raises so many questions. I realize that you could write a book on this but you are constrained for space here.

    You need to PROBE behind these figures. Short periods (BB, NS) are just too short to be meaningful.

    For longer periods of 10 years, you should have run regressions to estimate the growth rate.

    This was good as a first cut. But the story behind the numbers is more interesting that the numbers themselves.

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  • syed
    May 20, 2012 - 9:52PM

    My research indicates that macro economic indicators improved during military rules, however, socio-economic deteriorated. Contrary to that under the democratic lead govts socio indicators improved, and macro indicators worsen. The truth, however, is the current period is the worst period for both counts.

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  • truth will free you
    May 20, 2012 - 11:13PM

    It should be pertinent to mention that high economic growth coincides with injection of US aid usually when the Generals roll in. The generals have been canny, whenever they smelt the likely hood of US aid the 111 brigades rolled and garnered the kudos from higher economic aid. The only exception was Musharaf who wanted to save his own skin. He was fortunate though as the plummating economy under him was saved again by 9/11 and the aid taps opened full again.Recommend

  • Abdullah
    May 20, 2012 - 11:34PM

    military rule is good for Pakistan history proves

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  • May 21, 2012 - 1:03AM

    whats the truth….. they keep on changing the base… so.. now the drooling finance minister has one up on his sleeve to change and show it at over 3%,… reality is it is hovering around 2%,……. the truth is self ecomolation!!!!

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  • Fg
    May 22, 2012 - 1:18AM

    Tirmizi sahib, very informative and insightful article. Do the results change much when arithmetic mean is considered rather than geometric mean as used in your analysis?

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  • Ziaahmad
    May 22, 2012 - 2:17PM

    This expose Nawaz Sharif claim of economic growth as well

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  • Adeel
    May 22, 2012 - 4:13PM

    These numbers have no value. Look at Real GDP please. It is all wiped away by high inflation. Especially more recently.

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  • Adeel
    May 22, 2012 - 4:17PM

    These very simple numbers will just mislead the public that Zia Ul Haq was No 1. Economists around the world though don’t agree on much but at least they understand how GDP alone is such a flawed measure. Very disappointed that this has been published in the Tribune.

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  • May 23, 2012 - 7:08AM

    @Adeel: “These very simple numbers will just mislead the public that Zia Ul Haq was No 1. Economists..”

    No, Gen Zia was no economist, but he relied on a really good economist by the name of Dr. Mahbub ul Haq, the same economist who also advised Gen Ayub. Dr. Haq saw the corruption, waste and abuse in the system of political patronage under civilian leaders as the main culprit for their poor performance relative to military leaders.

    http://www.riazhaq.com/2011/07/political-patronage-trumps-public.html

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  • May 23, 2012 - 3:31PM

    Adeel,

    Nobody in the world is dumb enough to use nominal GDP numbers. All the numbers used here are real GDP numbers, which are derived AFTER taking into consideration the effects of inflation.

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  • Adeel
    May 27, 2012 - 3:46AM

    @ Farooq: okay good to know that inflation is at least taken into account. It makes sense to mention that as is the norm in high-quality research. However, since you seem like an educated person, please don’t forget several other important issues like population growth, conditions of health, education, etc. There is something called the HDI that could help with some more interesting analysis.

    On a related note, it is unfortunate but a well known amongst senior officials in the government that during dictatorships i.e. Zia/Musharraf’s time the numbers were freely fudged. Therefore, the ridiculously high inflation in General Musharraf’s time was underestimated.

    @ Riaz Haq: If you read my second para above, that is one issue I have with dictators. And secondly, even if if Zia led us to 100% GDP growth the Muhajideen and Shia/Sunni issues started in his time. He is responsible for starting the mess due to which Pakistanis have lost respect in the world!

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  • Nida
    May 27, 2012 - 4:43AM

    Taking into account real GDP is not enough. Economic growth is not always pro-poor. This is a very weak analysis. What needs to be taken into account is the sectoral composition of this growth, whether the growth reduces income inequalities or actually causes them, other non income dimensions such as gender inequalities, and the public spending pattern of the government. 5.88% of growth is meaningless if not analysed with the above points in mind.

    Also the same Mr. Mahbub ul Haq also developed the Human Development Index because again, I repeat, GDP is NOT an accurate measure of success. Economic development is increasingly being looked with a human dimension, and I’m sorry to point out but Pakistan falls at 145. Most of the countries below it are Sub-Saharan African countries. There are problems with the HDI that I won’t delve into, but the point is that forming such dangerous conclusions on the basis of GDP alone are misguided.

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  • Nida
    May 27, 2012 - 4:45AM

    Also by this logic, countries that have had longer dictatorships i.e Zimbabwe and the like should be topping the chart in terms of economic growth. See how that turned out.

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