Security state and rentier economy

A security state is one which perceives a threat to its national survival or danger to its sovereign existence resulting in a preponderant diversion of national resources towards security versus economic and social development.

Survival is the paramount ideology of a security state. But such a state can only subsist if the dime is being paid for, as ‘growth rather than guns’ is the surest path to security. (Karamat; Harvard: 2005)

A security state dictates a rentier state and a rentier economy, in all its multifarious dimensions.

There is total state and societal ‘predatory occupation’. A rentier economy is the easiest option available since real economic growth is predicated upon democracy with its requirements of inclusivity, tolerance and compromise that a security state is averse to.

Geocomo Luciani and Hazem al Bablawi (The Rentier State: 1987) defined a rentier state, in the Arab context, as one gaining surpluses from sale of natural resources like oil and gas without adding to the productivity of the economy and taxing its citizens.

This status can also be obtained by a state bargaining its geo-strategic location in world politics with the caveat that changes in world affairs may impact a state’s rentier status as Pakistan is currently witnessing with foreign economic and military aid diminishing to a trickle.

Rentier states display a particular path to state-formation that by and large defies the European path of state-formation: natural resource dependence or use of geographical location as a geo-strategic asset to attract big power investments in the shape of military and economic assistance creates weak states that are divorced from societal demands and barely rely on domestic taxation. There is a lack of growth of democratic accountability. The state merely provides security, law and order and is least inclined to invest in education, health and social welfare.

In our case the feudal rentier class remains untaxed. Land reforms do not lay down ownership limits on the basis of family, as in many provinces in India. Resultantly, despite several land reforms, feudals still possess thousands of acres of land as unproductive absentee landlords.

Despite not possessing oil or rare minerals, Pakistan is a rentier state and economy. Since 1947 we have become dependent upon bargaining of our geographical location, leveraging ourselves to align or pose to promote great power geo-strategic goals.

On another level workers’ remittances are another form of rentierism since these gains are external to accretion to domestic productivity, most of it adding to consumption.

The property and estate sector is one of the main components of the economy despite adding minimally to real growth.

The security state has played a pivotal role, directly or indirectly, in shaping the course of democracy, managing civilian governments of choice and marginalising those perceived as a threat to military dominance. A mindset has been systematically engendered castigating civilian politicians as incurably corrupt and incompetent, although NAB and scandals like the Panama papers, Pandora papers and Creditte Swisse have revealed massive malfeasances by the unrepresentative powers in the country.

A disproportionately large, 67-73 %, of taxes accrue from imports and indirect taxes; income taxes provide only 27% of revenues, indicative of exemptions that the rich enjoy as compared to the massive gains they secure.

A protected, consumption orientation is a classic feature of a rentier economy. Investments are diverted into areas bringing unproductive rents like real estate, property, housing and speculative investments.

Inadequate land reforms have kept issues of landless wage and bonded labour unresolved. Pocket constituencies get entrenched with landlords wielding control over state services like local police, revenue and courts, schools, irrigation, etc.

All military dictators, encompassing 35 years of our national life, augmented and entrenched feudalism making it partners in political regimes in a game of musical chairs.

Devolution of powers to the grassroots through local government experiments in Ayub, Zia and Musharaf rules have aimed at creating a constituency for the dictators with a view to providing legitimacy to their rule. Instead of devolving real power, authority was rather concentrated by fortifying the very feudal aristocracy that was aimed to be downsized and curtailed.

Since the partition, two factors have been paramount shaping all our national policies: fear of India and irredentism vis a vis Kashmir.

Our joining Cento and Seato were dictated not so much out of fear of communism but to militarily bolster ourselves against India. During the first few years after independence, we were overwhelmed by the fear of being undone as a free country by a five time larger neighbour that had opposed the division of one united country into two.

This led to a desperate search for external help to shore up our defence capabilities. During the 1950s we joined Seato and Cento ostensibly as partners of the US-led containment of the Soviet-led ‘red threat’, but in actual fact we sought to buttress ourselves from any inimical threat to our existence from our West.

Defense and military assistance was followed by considerable economic and financial assistance from the USA , Europe and Bretton Wood financial institutions.

According to some estimates, Pakistan received no less than $15 billion as foreign aid during the 1960s which helped it to become a showcase of a developing country. During the two decades of Zia and Musharaf rule, it was our cozying up to the US for anti-Soviet and later anti-terrorism postures that allowed nearly $20 billion of assistance to create a semblance but not the kernel of economic growth.

West and East Pakistan relationship up to 1970 is a classic case of security state and domestic rentierism.

External bailouts during the Ayub, Zia and Musharaf periods provided $35 billion; South Korea received only $ 15 billion during its economic formative periods. Three and a half crucial decades were lost when external aid was not invested in increasing productivity but rentier protectionism and import substitution.

Is it due to some inexplicable phenomenon or factors that we have not become a normal productive economy? Is security state and rentierism in our stars? Why have some similarly placed economies that became independent from colonialism at about the same time that we did, perform much better? These are questions needing deep pondering and redressed.