The growing literature on how politics interacts with economics places particular emphasis on the development of political parties within political systems. The parties serve several economic functions. They bring together those in society who share ideologies, values and views about the direction that should be taken by the state that governs the society. Well-organised parties can influence the making of public policy. A good example of this in the context of Pakistan is the rise of the All-India Muslim League (AIML), founded in 1906 in Dhaka. There was some anxiety on the part of the Muslims in British India that a Hindu-dominated independent country that would be the consequence of the British departure would be less than fair to them. The AIML, therefore, was motivated by economic interests of the community it represented. Over time, it focused on only one demand: the creation of an independent state for the Muslims of British India. Once that demand was met, the rechristened AIML as the Pakistan Muslim League (PML) lost its raison d’être and morphed into a number of different organisations.
Pakistan’s political landscape was transformed in 1968 when Zulfikar Ali Bhutto founded the Pakistan Peoples’ Party (PPP) as a national organisation with a socialist agenda. It won the most seats in the National Assembly allocated to West Pakistan in the elections held in December 1970. A year later, it formed the first PPP-dominated government in the part of the country that was left after the separation of East Pakistan. But the success of the separatist movement in what was once Pakistan’s eastern wing encouraged the establishment of political organisations promoting narrow regional interests. For a number of years, Pakistan’s political landscape was dominated by national parties — the PML, the PPP and the Jamaat-e-Islami. However, the rise of regional parties complicated the making of economic policies especially when regional interests could not be reconciled with national priorities.
The PML’s political monopoly was broken when in the election of 1954 in East Bengal, the Muslim League was trounced by a coalition of parties that had assembled under the banner of the United Front. The name given to the coalition was suggestive of its Marxist orientation and combined religion with a socialist orientation. The group included Fazlul Haq who had joined hands with Mohammad Ali Jinnah and campaigned for the establishment of Pakistan. The success of regionalism as reflected in the lopsided victory of the United Front when it won 300 seats versus the 10 secured by the PML became the inspiration for the development of a number of narrowly focused regional parties. The most successful of these efforts was the Muttahida Qaumi Movement (MQM) as well as the Awami National Party (ANP). The names of these parties signified national aspirations rather than purely regional interests and were to have profound impact on the formulation of national economic strategies.
One example of this was the position taken by the MQM with reference to the design of fiscal policy. The MQM represented the Sindh urban middle class, which was reluctant to see its tax burden increase while the landed community was mostly spared. In 1973, when Bhutto was engaged in drafting the Constitution, he won support of the powerful landed interests by excluding agricultural incomes from the tax base. This provision had serious economic consequences. For most of the time, value added in agriculture increased impressively but this growth could not be captured in tax revenues. The attempt by the IMF to increase the tax-to-GDP ratio as a part of the programme it negotiated with Islamabad in 2008 did not succeed. The Fund’s proposal to levy a tax on consumption was resisted by the MQM. Its opposition resulted in the collapse of the IMF programme in 2011.
We may be witnessing another shake-up in the institutional structure of politics in Pakistan. The rise of Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) may bring another national force in play that will focus on the country rather than on narrow regional interests. The coming electoral competition between three or four national groupings — the PPP, the two Muslim Leagues and the PTI — will have significant economic consequences. If they score big victories in both the central and provincial elections, they may be able to swamp the regional parties. That will make the formulation of economic strategies that keep national interests in their sight become somewhat easier and practical.
Published in The Express Tribune, August 20th, 2012.
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Unless current climate of corrruptness ,financial misappropriatiion ,misgovernance can be improved ,talk of making more resources available by cutting down army budget seems nonsense. No one is willing to throw their money in dysfunctional financial envoinment,People are not willing to pay taxes ,businessmen are not willing to invest;poltical governments need to get their act right before they can have any credibility asking for army budget cuts.
@Dr. Salim Haidrani: There is miracle called Google - use it doctor sahib
1.Pakistan has to pay 10b$ per year as debt servicing which is double than defence budget 5b$. This is performance of political parties 2.Dr sheikh world bank man has failed to adress economic issues 3.Pakistan faces 6000mw power shortage which is a big hurdle in economic development 4. 80% electricity is produced from furnace oil which is very expensive although hydel is cheapest source no dam built in the last 30 years
Anxiously waiting for PTI economic policy on 24 August.
Burki sab!!..I really enjoyed your Institute of Public policy (IPP) report on the condition of punjab economy.. It is truly an eyeopening report and I want everyone, especially PMLn supporters, to go over that report and read the recommendations that Mr Burki and Dr Hafeez pasha has given to CM punjab to pace up the economic growth of the province!!!!!!
@::Contradictions,contradictions,contradictions and all the internal contradictions boil-down to where we stand today.btw.why only political parties alone,what about the 'innocent' general public?
Regional parties like MQM and ANP have been a curse as they stifle national water and power projects .
Water and power needs central management .
But I strongly disagree with Burki in calling PPP a federal party . PPP's anti Punjab bias is evident for all to see and they are now trying to divide Punjab ( a federating unit ) through no other but the ppp chairman ( presently the federal President of Pskistan ).
PPP government in last 4 odd years has ruined the institutions and run down the country due to bad governance. I hope one political party sweeps the election and focuses on Pakistan
Before expansion of tax net...austerity, equal and fair utilization of already available resources should be the first priority. But, is there any political force which can promise austerity, equal and fair utilization of revenue the state receives from its subjects? In current situation and in presence of uncontrolled State organs, no political force is in a position to move one penny from one pocket to another. These uncontrolled organs have given only one choice to elected bodies and that choice is to arrange more for them and those who voted them into office, anticipate to pay less or nothing.
A political party that does not focus on fiscal reforms as its top most priority can't pull Pakistan out of its current economic quagmire. And the key to fiscal reforms is dramatic expansion of tax net and austerity. While austerity might be difficult to achieve in the midst of high defense spending in the near future, at the least we can increase the state revenues through taxation. This is where I have the highest hopes from PTI of all the political parties since its leaders from Imran Khan to Asad Umar keep referring to it as their top priority. Just so that you know, PTI's economic policy is due on 24th of August. Let's hope for the best!
PPP has lost it's raison d'^etre.Slogan of "Roti kapra makaan" is no where in sight and socio economic policies and or its implementation are not one of it's strengths. It may have come into existence for equal distribution of resources (Socialism),however in all it's government tenures ,it came to be known for it's hallmark of plunder and misappropriation of resources.Inspite of or perhaps due to,it's Farce of BISP ,Poverty continues to rise with people living under 2dollars a day in excess of 60 %,literacy rate remains abysmal,and Health indicators are one of the worst in the third world. With such track record another term in offfice for this dynastic party can only furthur Plummet Pakistan's economy.