Is there an effective economic argument for democracy?

Sadly, some of Pakistan’s best growth years have been in times of martial law.


Khurram Baig February 17, 2013
Sadly, some of Pakistan’s best growth years have been in times of martial law. PHOTO: EXPRESS/FILE

KARACHI:


Democracy and economic growth don’t go hand in hand. At least not in Pakistan. Throughout the more than 60 years that Pakistan has been in existence, the best growth years that we have seen, have predominantly been in the times of military rule.


I am not saying this to advocate martial law; rather, I am saying this to urge our political leadership to pay heed to their short-comings and count their blessings that we are not yet a true democracy where the people’s vote really is a harbinger of change, like it is in developed countries around the world.

For example after the country slipped into its first era of military rule, GDB growth rate jumped from an average of 2.5% in the 1950s to 6.8% in the 1960s. This is widely acknowledged as an era of unprecedented growth for the Pakistani economy. You can make many arguments for the political repercussions of this era, but I am just talking numbers here.

graph 03

Back to civilian rule

And once the country re-entered the democratic fold in 1971, which was a painful transition with tragic side-effects, the growth rate slumped to 4.8%. But democracy has always been short-lived in Pakistan. It wasn’t long before this fragile system once again got steam-rolled and Pakistan entered its most tumultuous era of all. Economic growth however in the 1980s once again went through the roof averaging 6.5%.

I do believe that the 1970s and the 1980s have been the two defining decades in Pakistan’s history. The 1970s ushered in an era of economic decay and mismanagement and bureaucratic stagnation the effects of which we have been unable to remove to this day.

In the same way the 1980s have forever left the dark shadow of war looming over Pakistan. It is no wonder that today we are mired in the clutches of both militancy and economic mismanagement.

In the 1990s, with the country once again under civilian rule, growth rate started to slide and by the time Pakistan entered its third and so far last military stint in 1999, it had fallen to historic lows, from an average of 6.5% in the 1980s to 2% in 2001. It was in Musharraf’s time that Pakistan saw some of its best growth years, with a high of 9% in 2004-5.

And one year into the present democratic setup, in 2008-9 the growth rate had slumped to 1.7%, the lowest in Pakistan’s history.

Dismal report card

The present government has had a dismal five years. The power crisis has gone from bad to worse. The circular debt has not been controlled.

The Debt Limitation Act has been breached every year and the debt to GDP ratio has surpassed all historic levels.

The rupee has set a record low of over 100 to the US dollar and Foreign Direct Investment has been on the decline. Sadly, the last year and subsequently the last budget prepared by this government was even more populist than ever. Subsidies have continued to rise and debt servicing has been eating a bigger and bigger slice of revenue every year.

graph 04

Martial law is not the answer, but unless democratic governments give up their populist agendas, they won’t be able to give credence to the mantra, ‘Democracy is the best revenge’ either.

Published in The Express Tribune, February 18th, 2013.

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COMMENTS (43)

Sarwat | 11 years ago | Reply

Democracy allows greater space to civil society and civilian institutions, we witness a greater assertion of vocal elements of civil society, the media and the bars, the judiciary — revived under democracy by democratic means — and the federating units by virtue of the NFC Award, to expand their spheres and spaces scuttled during military dictatorships. We also see a presidency bowing to the parliamentary spirit of the 1973 Constitution, rather than remaining an instrument of the powers-that-be to scuttle the mandate of the people. Most vibrant and inclusive is the politics of coalition making at the Centre and the provinces. We see unprecedented accountability of the elected representatives by the media — often bordering on ridicule. On top of all this, a very proactive judiciary is not letting any omission of the executive go unpunished to a point where, on occasions, the poor executive looks traumatised and squeezed. So do you think a dictator allows this all.Never, it is the only democracy that gives freedom of expression and offers itself for the accountability. so please let the democracy prevail.

Adnan Khan | 11 years ago | Reply

ISLAMABAD: This is with reference to Khurram Baig’s article “Is there an effective economic argument for democracy?” (February 17). My thoughts are that yes, there is. Political leaders depend on a group of individuals in society to gain and maintain power. These are their “selectorate” (Bruce Buenos de Mesquita: The Dictator’s Handbook). In a functioning democracy, these would consist of nearly all voters in the country, while in dictatorships, it is a narrower group. Pleasing all voters entails taking different actions than pleasing a few people. The former would mean building roads, funding education and health and ensuring law and order to make the lives of people safe. Corruption has lesser value and acceptance in such systems. Appeasing the few in a dictatorship requires a more focused license to plunder and is, therefore, more economical for leaders who get to keep more of the largesse for themselves. This is the context in which the question should be considered. The country has endured long periods of dictatorships with interrupted democracy. The current government seems likely to be the first in Pakistan’s history to complete its full term. Mismanagement is rife at a large-scale but at least it takes us one step towards a functioning democracy where the people can demand good governance. Let us not be naïve in anticipating that this will happen right away. Even after General Park Chung-hee ushered in regular elections, it took over two decades of repeated elections in South Korea before decent conditions started prevailing for the majority. The same has taken over five decades for India and over two decades for Malaysia. At least, we have begun our journey. Let us hold the course. Adnan Khan Published in The Express Tribune, February 20th, 2013.

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