State of the economy

Published: June 23, 2018
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The writer served as executive editor of The Express Tribune from 2009 to 2014

The writer served as executive editor of The Express Tribune from 2009 to 2014

For the third time in its history Pakistan is seeing off a seemingly lost decade in terms of the economy. The first time we had such experience was during the 1970s. Next was during the 1990s.

During each of the three lost decades our relations with the US had remained troubled. Not that a slowdown or a complete cutoff of US assistance as a consequence had contributed decisively to what had seemed, each time, like an imminent economic meltdown of the country. Nevertheless, during each of these three different decades it had appeared as if the days of ‘free lunches’ were over for good.

Coincidently, during the decades of generals’ rule, Pakistan had had the best of relations with the US. Midway through the Cold War we were described as the most allied ally of the US. During Ayub’s period, we managed to grow at an annual average rate of over 6 per cent.

During General Ziaul Haq’s rule, we fought an almost a decade-long war on behalf of the so-called free world the Soviets in Afghanistan and were generously compensated for our troubles. According to one rough estimate, we had received almost about $70 billion, all unencumbered, during this period with the money pouring in from the four corners of the world, including from the oil-rich countries, Japan and China. And our annual average growth rate during this period once again was over 6%.

And during Musharraf’s rule we were right there backing up the American troops with men and material when they landed in Afghanistan to liberate the war-torn country from the clutches of the Afghan Taliban. Once again we were generously rewarded, enabling the country’s economy to grow at an annual average rate of nearly 7%. During this period we were described as the Non-Nato ally.

The lost decade of the 1970s had begun with the culmination of a war with India resulting in the dismemberment of the country. The political seeds of this war were sown in the stalemated 1965 war with the same enemy.

The lost decade of the 1990s had started with Pakistan’s armed –to- teeth non-state jihadis joining in the on-going Intifada in the India-occupied Kashmir and had ended with retaliatory nuclear tests and a brief Kargil military misadventure.

The outgoing lost decade has seen our army fighting a three-front hot war — one at the Line of Control (LoC), escalating to new heights by Indian PM Narendra Modi who is also talking of conducting surgical strikes across the LoC; the other on the Durand Line following a falling out with the US because of the Salala incident and the American Seals’ ‘illegal’ raid on the Abbottabad hideout to capture and kill Osama and; the third against the TTP which has already taken a toll of thousands of Pakistani lives both civilians and soldiers and had also caused financial losses of an estimated $128 billion. These wars were waged through three highly effective military campaigns — Rah-e-Rast, Zarb-e-Azb and Radd-ul-Fasaad — costing presumably about $300 billion so far.

And it was during these three different periods of the lost decades that we went frequently to the IMF for short- and medium- term emergency bailout packages. In fact among the regular recipients of IMF’s assistance, Pakistan perhaps tops the list with the largest number of bailouts but we could complete just one and that too because the loan disbursement was conditioned on completing the programme first.

As opposed to the three decades of ‘free lunches’ the three lost decades have been periods of shortages of funds, as no ‘free lunches’ were available to finance our escalating development, defence, debt and non-development obligations.

However, when compared cursorily Pakistan under three generals seems to have managed the national economy more efficiently than during the three different lost decades which, it is generally believed, ended up lost because of the corruption allegedly indulged in by the elected civilian rulers who lack even rudimentary knowledge of the economy.

Published in The Express Tribune, June 23rd, 2018.

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