Punjab’s endowments and economic development

Today’s Punjab, from perspective of its initial endowments, suggests the province could have made better use of them.

Shahid Javed Burki January 06, 2013
The writer is a former caretaker finance minister and served as vice-president at the World Bank

I will begin by first defining what the term ‘endowments’ implies. Does it mean the various inheritances by the provinces from the century-long British rule of the Indian subcontinent? If that is one of the meanings then Punjab — and to a lesser extent Sindh — came to Pakistan with richly endowed surface irrigation infrastructures. If endowments mean the minerals that lie under the surface waiting to be exploited then Sindh and Balochistan are particularly rich and Punjab relatively poor. Should we stretch the word endowments to include the human resource? If that is the case then each of the four provinces have different kinds of human endowments, each with a different potential.

The word endowments should also perhaps include geographic location. If that is the case then each of the four provinces have different positional advantages. In that case, it is interesting to note that all the four provinces have international borders — the Punjab and Sindh with India, Balochistan with Iran and Afghanistan, and Khyber-Pakhtunkhawa (KP) with Afghanistan and China. Two provinces — Sindh and Balochistan — border the sea. The two other — Punjab and KP are landlocked.  I will discuss below what each of the four provinces possess by way of endowments, how these have affected their economic and social development, how they have influenced their view of the world, and how their future could be shaped by their use.

Punjab inherited a vast and intricate system of surface irrigation that had turned its vast virgin plane into the granary of British India. It was in the potential embedded in the vast amount of water that flowed though the six major rivers of the Indus system that the colonial administration in India found a solution to a major problem it faced. The northeastern parts of the Indian colony had suffered from several severe famines that took the lives of millions of people. The British had just recovered from the mutiny of 1857 and they did not want another series of events to agitate the citizens of their expanding Indian empire. Having tried several different approaches, they settled on the one that involved huge investments aimed at turning the Punjab plane into a large food surplus area.

Water brought by well engineered works on the Indus and its tributaries quickly increased the output of food in the newly colonised lands. Since these surpluses had to be transported to the food-deficit areas, the British also invested large sums of money in building a network of railways and roads. The strategy worked and for several decades northeast India received large amounts of food from the Punjab.

The partition of the subcontinent need not have disrupted Punjab’s economic links with India’s food-deficit provinces and its industrial belt. But that happened largely because of the actions taken by the new government in India. The Indians, through a series of actions, sought to show Pakistan that it was a mistake for a significant number of Muslims to leave India. The Pakistani reaction was based on the assertion of the rights of a newly formed state and to convince India and its own citizens that the pursuit of the demand for a separate state for the Muslims of British India was the right way to proceed.

These were not the right choices to make. The series of actions and reactions led to the severance of the Pakistani economy from that of India. Most of the fault lay with India that took a number of aggressive steps in the area of trade. These led to the detachment of Punjab from the Indian economy. Had that not happened, what is now Pakistan’s Punjab would have remained primarily an agricultural economy supplying various items of food to the Indian population and industrial and various raw materials to the industries in India. An economy based largely on agriculture is not necessarily inferior to the one that draws its strength from manufacturing or from modern services. Denmark and the Netherlands, for instance, are more economically and socially developed than many parts of industrial Europe.

The Punjab’s other endowment was the skill base of its population. The small towns and medium-sized cities situated along the famed Grand Trunk Road had well-established small metal working industries at the time of independence. These supplied manufactured products for everyday use, as well as parts and components for large industries. The area that has come to be called the ‘Golden Triangle’ — it includes the cities of Gujranwala, Gujrat and Sialkot — could have played a much more important role than it did in developing the Pakistani industry. The small manufacturing concerns located in the triangle could have created supply chains for large industries in East and South Asia.

Looking at today’s Punjab from the perspective of its initial endowments suggests that the province could have made better use of them than it did. Sometimes it was forced into other directions by the circumstances over which its policymakers did not have any control. At other times, it took a different route by choice. The results would have been more satisfying if the province’s rich endowments had become part of a well thought-out development strategy.

Published in The Express Tribune, January 7th, 2013.


Raj Kafir | 9 years ago | Reply

@Sajjad Ashraf: I doubt Jhansi Ki Rani came to Bahadur Shah Zafar in 1857. If this is taught in your country, then you have a point.

Sajjad Ashraf | 9 years ago | Reply

Mr. Kafir, I am referring to Bahadur Shah Zafar. Didn't the soldiers who rebelled against the British come to the Red Fort asking the king to lead them and he finally did.

Let us not move away from the topic for now.

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