Economic interventionism

Pakistan experienced two earthquakes in 2005. One was in Kashmir and the other was the elevation of Iftikhar Muhammad Chaudhry as chief justice of Pakistan. Before the latter event, the economy was left largely in the hands of the executive. Until its suspension in 2007, the Chaudhry-led Supreme Court had made extensive inroads into the economic sphere during a dictatorial regime attempting to make a head start in economic liberalisation. It served to undermine the regime’s political legitimacy granted earlier by the bench, which included Chaudhry as a judge. The interference began with issues of local public interest, such as relief distribution to affectees of a high-rise building collapse in Islamabad and preventing the commercialisation of parks in Islamabad, Lahore and Karachi. Provincial governments were grilled on the damages to the social sector in the aftermath of the earthquake. Intervention in prices started, with those of commodities like oil and sugar. Federal ministries were shown to be failing in governance. Oil price fixation had been given to a private consortium called the Oil Companies Advisory Committee. When the international oil price shot up to $70 a barrel in 2005, the consortium promptly raised the domestic price, but failed to lower it when the international price fell to $62. Corruption in the petroleum ministry was found responsible for this inconsistency. During this point in time, the price of sugar also doubled. Government policy, many ministers and senior politicians like Nawaz Sharif and Asif Ali Zardari were implicated. Before long, the apex court was looking into the prime minister’s backyard. A crafty Shaukat Aziz with a Citibank background was personally leading the privatisation process, but the Supreme Court cancelled the deal to sell the Pakistan Steel Mills at a price lower than its land value and without accounting for plant and stocks. Before it could lay its hands on the dictator, the SC judges were suspended.

In its second coming, resulting from a popular movement in which Iftikhar Chaudhry was not exactly a sleeping partner, the court resumed its economic interventionism with greater vigour. Rental power agreements, CNG prices, general sales tax (GST) on petroleum and CNG, recovery of increased GST before parliamentary approval, are some of the major cases it took up.

In free market discourse, economies pursuing deregulation, liberalisation and privatisation require a judiciary that can protect the public interest against the excesses of exploitative profit seekers. In effect, the judiciary acts in aid of the market to enforce rules made by a liberalising executive. With a view to securing investments and effective enforcement of contracts, donor projects, like the Access to Justice programme, aim at preparing the judiciary for a deregulatory regime. The project added $330 million to our debt and took five years more than the initially agreed three years, without any impact on the delivery of justice to the common man.


Much has been written about the mutual back-scratching between the bar and the bench, but the objectives of the economic interventions have not been made clear or debated upon. Was the objective to right the pro-elite wrongs aimed at the genuine protection of public interest or was it an ‘offence-is-the-best defence’ strategy? Most cases picked up had a populist appeal, and therefore, were breaking news material for an equally hyperactive electronic media. None, however, came anywhere near the stated outcome. The most hyped-up case of former president Asif Ali Zardari never brought back the exaggerated amounts of allegedly stolen dollars. The cost of litigation and the time spent by the judiciary and the executive on this case perhaps exceeded the return, if any. There was also an urban and middle-class bias. The most important case concerning the rural poor, the appeal against the Shariat Bench judgment on land reform, is pending even after 13 hearings.

Published in The Express Tribune, December 20^th, 2013.