gutto786
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What is Democracy ??
- Government of the people, by the people, by the people
- A system of government by the whole population or all the eligible members of a state, typically through elected representatives
- Control of an organization or group by the majority of its members
- The practice or principles of social equality
Lets discuss what do we have in Pakistan:
- Is it really democracy?
- Do we need democracy?
- Whats suites Pakistan better: Current Democracy or Marshal Law
- Suggestions for a system thats best for Pakistan
Let me share a report from history:
Pakistan Development Loan to West Germany in 1963
It is reported in Ummat newspaper of Pakistan that, “50 years ago Pakistan provided 120 million (rupee) loan to West Germany for development. After getting independence in 1947, the country (Pakistan) was making progress by leaps and bounds because of sincere leadership and bureaucracy. According to the old documents achieved from Ministry of Finance (Pakistan), 50 years ago, in 1963, Pakistan provided 120 million (rupee) development loan to West Germany, which was considered more prosperous compare to East Germany at that time, for 20 years.” [1]
This is extremely surprising not only for Pakistanis, who think that their country has always been on receiving side, but also for Germans and many other people who always claim that Pakistan has made no substantial progress since it got independence from British Raj. Ayub Khan was the President of Pakistan from 1958 to 1969. This was golden era for Pakistan in terms of economics.He came into power through military coup which caused many other problems for Pakistan including separation of East Pakistan (which became Bangaldesh), but economically Pakistan made progress by many folds.
Field Marshal Ayub Khan
The period from 1958 to 1969 during which President Ayub ruled and Mr. Shoaib served as Finance Minister for most of these years is considered as the golden era of Pakistan’s economic history. The period had strong macro economic management and the economic indicators were extremely impressive. Agriculture grew at a respectable 4 percent while remarkable rates were achieved in manufacturing (9 percent) and trade (7 percent) GNP growth rates exceeded 6 percent on average throughout the period. Economic growth was very strong on all fronts…Industrial policy was the hallmark of the 1960s and the overall policy mix was tailored to promote industrial investment…For its free and unfettered operation of the private sector the Government created a congenial investment climate. Fiscal concessions and tax holidays, foreign exchange allocations, increased foreign assistance, the introduction of the Export Bonus Scheme were incentives offered for rapid industrialization of the economy. Through state controlled financial institutions foreign aid was channeled into industry for long-term investment, distinct from short-term loans advanced by the commercial banks in local currency…One of the salient aspects of the policies in the 1960s was that although industrialization was vigorously pursued and actively promoted the neglect of the agriculture sector was reserved. The completion of the Indus Basin works including the Mangla Dam and laying the groundwork for Tarbela Dam that was completed in the early 1960s was a major breakthrough. The other two factors that contributed to the revival of Pakistani agriculture were the Green Revolution and the mechanization and diffusion of new technology among agriculture producers…The development effort was sustained in a much greater degree by domestic resources as the savings increased from 8.9 percent of GNP in 1960-61 to 12.6 percent in 1964-65…Fiscal discipline was observed and despite sharp rise in defense spending
during 1965-70 additional taxation helped to increase the ratio of taxes from 6.1 percent of GDP in 1959-60 to 7.6 percent in 1969-70. Current account deficit remained under control while it increased from 3.3 percent of GDP in 1959-60 to 6.8 percent in 1964-65 it reverted to 3.8 percent by 1969-70…The nascent financial sector was built through creation of new institutions, expansion and consolidation of the banking system throughout the country. Whereas in 1960 there was a bank branch for 176,000 persons by 1970 the number of persons served by a branch was 29,000. The volume of deposits of the banks increased almost five fold in this decade and the number of accounts multiplied by a factor of eleven. The expansion of the banking network facilitated the entry of the middle and lower middle income groups into the banking system. In 1960 there were 29 scheduled banks – 19 foreign and 10 domestic. Ten years later, out of 36 banks in the country 17 were domestic. Their share in deposits and advances had risen to about 90 percent. This remarkable achievement was made possible by private commercial banks such as Habib Bank, United Bank, MCB, etc. competing with each other fiercely in mobilizing deposits, expanding branches, extending credit to new businesses and improving their services…Capital market development in the 1960s also picked up pace as the market capitalization of Karachi Stock Exchange jumped from Rs.1.7 billion to Rs.5.2 billion by 1970. The number of companies listed increased from 81 to 282. [2]
Development in East Pakistan: Opposite to common believe that in Ayub Khan regime Bengalis of East Pakistan were kept deprived of economical development in Pakistan, Dr. Ishrat Husain says that, “In 1959-60, the total investment in East Pakistan was 6 percent of GDP with Public sector component contributing 4 percent of GDP. By the end of the decade, this level had almost doubled to 12.4 percent with corresponding increase in public sector investment to 8.4 percent. During the same period, the total investment in West Pakistan which was 11.5 percent of GDP in 1959-60 rose to only 14.3 percent by 1969-70 while public sector investment stagnated (7.2 percent and 7.3 percent respectively). But most of the media, politicians and the economists who propounded and popularized the thesis of the neglect of East Pakistan in the allocation of public sector resources ignored the above facts but resorted to rhetoric to advance their viewpoints. This tendency proved to be quite lethal for national integration and social cohesion between the two wings of the country. In this decade a number of large projects such as Khulna newsprint plant, the Fenchuganj Fertiliser factory, Kaptai Dam, Karnaphuli rayon mill, a steel mill at Chittagong, jute and paper mills, exploration and exploitation of gas fields in Sylhet and the second capital at Dacca were set up in the Eastern part of the country but the Government of the day never got any credit for them. This shows that whatever good intentions of the authoritarian regimes if the people do not have a sense of participation in the decision making process the feeling of alienation does persist.” [2]
Perhaps the single biggest reason people remember Ayub’s era fondly is because it was the time when Pakistan first acquired a relatively sizeable manufacturing base. And indeed, manufacturing growth in Pakistan during his time was 8.51%, far outpacing any other time in Pakistani history. It was the time when Pakistan first got an automobile industry, a cement industry and few other heavy manufacturing industries. [3]
Real investment reached as high as 21.5 per cent of GDP during 1960-65 and then dropped to 14.6 per cent (due to 1965 war with India) in 1969-70. Increase in investment accelerated the economic growth process. Through good economic management, inflation remained in checked and hovered around 3 per cent during the 1960s. Moreover, Pakistan's economy succeeded in registering its first ever budget surplus during the military rule of Ayub Khan. GNP and per capita GNP averaged 6.7 cent and 3.8 per cent respectively…As suggested by Dr. Pervez Hasan in his book, " Pakistan's Economy at the Crossroads ", the national savings rate rose significantly from the extremely low level of 2.5 per cent of GDP in 1949-50 to 10.5 per cent in 1964-65. It improved further in the 1980s, rising to a peak of 16 per cent of GDP in 1986-87 as large worker remittances came in. However, by the middle of fiscal year 1995-96, the national savings rate had fallen back to 12 per cent. The above statistics suggest that under the military rule the savings rate remained healthy, on account of healthy remittances though. Surprisingly, the highest rate of marginal savings of 20 per cent was recorded during 1960-65 (Ayub era)… Likewise, the economy again picks-up during the General Zia period and average growth rate reached as high as 6.6 percent per annum during 1977-88 period. During this period manufacturing grew by 9.2 per cent, other sectors grew by 7.9 per cent, and moderate growth in agriculture sector was also realized. The agriculture sector recovered from a dismal of 2 per cent in 1972-77 and reached to 4 percent on average during 1977-88. Per capita GNP remained healthy 3.3 per cent during 1977-88. The economic expansion continues during 1977-88. Price level again remained well in-checked. General Zia period could be well matched by General Ayub Khan period when the economy got into a healthy shape. [4]
I wish and hope that Pakistan will see its golden era again under the leadership of Mian Nawaz Sharif and he will set a new trend of economic development under democratic rule.
- Government of the people, by the people, by the people
- A system of government by the whole population or all the eligible members of a state, typically through elected representatives
- Control of an organization or group by the majority of its members
- The practice or principles of social equality
Lets discuss what do we have in Pakistan:
- Is it really democracy?
- Do we need democracy?
- Whats suites Pakistan better: Current Democracy or Marshal Law
- Suggestions for a system thats best for Pakistan
Let me share a report from history:
Pakistan Development Loan to West Germany in 1963
It is reported in Ummat newspaper of Pakistan that, “50 years ago Pakistan provided 120 million (rupee) loan to West Germany for development. After getting independence in 1947, the country (Pakistan) was making progress by leaps and bounds because of sincere leadership and bureaucracy. According to the old documents achieved from Ministry of Finance (Pakistan), 50 years ago, in 1963, Pakistan provided 120 million (rupee) development loan to West Germany, which was considered more prosperous compare to East Germany at that time, for 20 years.” [1]
This is extremely surprising not only for Pakistanis, who think that their country has always been on receiving side, but also for Germans and many other people who always claim that Pakistan has made no substantial progress since it got independence from British Raj. Ayub Khan was the President of Pakistan from 1958 to 1969. This was golden era for Pakistan in terms of economics.He came into power through military coup which caused many other problems for Pakistan including separation of East Pakistan (which became Bangaldesh), but economically Pakistan made progress by many folds.
Field Marshal Ayub Khan
The period from 1958 to 1969 during which President Ayub ruled and Mr. Shoaib served as Finance Minister for most of these years is considered as the golden era of Pakistan’s economic history. The period had strong macro economic management and the economic indicators were extremely impressive. Agriculture grew at a respectable 4 percent while remarkable rates were achieved in manufacturing (9 percent) and trade (7 percent) GNP growth rates exceeded 6 percent on average throughout the period. Economic growth was very strong on all fronts…Industrial policy was the hallmark of the 1960s and the overall policy mix was tailored to promote industrial investment…For its free and unfettered operation of the private sector the Government created a congenial investment climate. Fiscal concessions and tax holidays, foreign exchange allocations, increased foreign assistance, the introduction of the Export Bonus Scheme were incentives offered for rapid industrialization of the economy. Through state controlled financial institutions foreign aid was channeled into industry for long-term investment, distinct from short-term loans advanced by the commercial banks in local currency…One of the salient aspects of the policies in the 1960s was that although industrialization was vigorously pursued and actively promoted the neglect of the agriculture sector was reserved. The completion of the Indus Basin works including the Mangla Dam and laying the groundwork for Tarbela Dam that was completed in the early 1960s was a major breakthrough. The other two factors that contributed to the revival of Pakistani agriculture were the Green Revolution and the mechanization and diffusion of new technology among agriculture producers…The development effort was sustained in a much greater degree by domestic resources as the savings increased from 8.9 percent of GNP in 1960-61 to 12.6 percent in 1964-65…Fiscal discipline was observed and despite sharp rise in defense spending
during 1965-70 additional taxation helped to increase the ratio of taxes from 6.1 percent of GDP in 1959-60 to 7.6 percent in 1969-70. Current account deficit remained under control while it increased from 3.3 percent of GDP in 1959-60 to 6.8 percent in 1964-65 it reverted to 3.8 percent by 1969-70…The nascent financial sector was built through creation of new institutions, expansion and consolidation of the banking system throughout the country. Whereas in 1960 there was a bank branch for 176,000 persons by 1970 the number of persons served by a branch was 29,000. The volume of deposits of the banks increased almost five fold in this decade and the number of accounts multiplied by a factor of eleven. The expansion of the banking network facilitated the entry of the middle and lower middle income groups into the banking system. In 1960 there were 29 scheduled banks – 19 foreign and 10 domestic. Ten years later, out of 36 banks in the country 17 were domestic. Their share in deposits and advances had risen to about 90 percent. This remarkable achievement was made possible by private commercial banks such as Habib Bank, United Bank, MCB, etc. competing with each other fiercely in mobilizing deposits, expanding branches, extending credit to new businesses and improving their services…Capital market development in the 1960s also picked up pace as the market capitalization of Karachi Stock Exchange jumped from Rs.1.7 billion to Rs.5.2 billion by 1970. The number of companies listed increased from 81 to 282. [2]
Development in East Pakistan: Opposite to common believe that in Ayub Khan regime Bengalis of East Pakistan were kept deprived of economical development in Pakistan, Dr. Ishrat Husain says that, “In 1959-60, the total investment in East Pakistan was 6 percent of GDP with Public sector component contributing 4 percent of GDP. By the end of the decade, this level had almost doubled to 12.4 percent with corresponding increase in public sector investment to 8.4 percent. During the same period, the total investment in West Pakistan which was 11.5 percent of GDP in 1959-60 rose to only 14.3 percent by 1969-70 while public sector investment stagnated (7.2 percent and 7.3 percent respectively). But most of the media, politicians and the economists who propounded and popularized the thesis of the neglect of East Pakistan in the allocation of public sector resources ignored the above facts but resorted to rhetoric to advance their viewpoints. This tendency proved to be quite lethal for national integration and social cohesion between the two wings of the country. In this decade a number of large projects such as Khulna newsprint plant, the Fenchuganj Fertiliser factory, Kaptai Dam, Karnaphuli rayon mill, a steel mill at Chittagong, jute and paper mills, exploration and exploitation of gas fields in Sylhet and the second capital at Dacca were set up in the Eastern part of the country but the Government of the day never got any credit for them. This shows that whatever good intentions of the authoritarian regimes if the people do not have a sense of participation in the decision making process the feeling of alienation does persist.” [2]
Perhaps the single biggest reason people remember Ayub’s era fondly is because it was the time when Pakistan first acquired a relatively sizeable manufacturing base. And indeed, manufacturing growth in Pakistan during his time was 8.51%, far outpacing any other time in Pakistani history. It was the time when Pakistan first got an automobile industry, a cement industry and few other heavy manufacturing industries. [3]
Real investment reached as high as 21.5 per cent of GDP during 1960-65 and then dropped to 14.6 per cent (due to 1965 war with India) in 1969-70. Increase in investment accelerated the economic growth process. Through good economic management, inflation remained in checked and hovered around 3 per cent during the 1960s. Moreover, Pakistan's economy succeeded in registering its first ever budget surplus during the military rule of Ayub Khan. GNP and per capita GNP averaged 6.7 cent and 3.8 per cent respectively…As suggested by Dr. Pervez Hasan in his book, " Pakistan's Economy at the Crossroads ", the national savings rate rose significantly from the extremely low level of 2.5 per cent of GDP in 1949-50 to 10.5 per cent in 1964-65. It improved further in the 1980s, rising to a peak of 16 per cent of GDP in 1986-87 as large worker remittances came in. However, by the middle of fiscal year 1995-96, the national savings rate had fallen back to 12 per cent. The above statistics suggest that under the military rule the savings rate remained healthy, on account of healthy remittances though. Surprisingly, the highest rate of marginal savings of 20 per cent was recorded during 1960-65 (Ayub era)… Likewise, the economy again picks-up during the General Zia period and average growth rate reached as high as 6.6 percent per annum during 1977-88 period. During this period manufacturing grew by 9.2 per cent, other sectors grew by 7.9 per cent, and moderate growth in agriculture sector was also realized. The agriculture sector recovered from a dismal of 2 per cent in 1972-77 and reached to 4 percent on average during 1977-88. Per capita GNP remained healthy 3.3 per cent during 1977-88. The economic expansion continues during 1977-88. Price level again remained well in-checked. General Zia period could be well matched by General Ayub Khan period when the economy got into a healthy shape. [4]
I wish and hope that Pakistan will see its golden era again under the leadership of Mian Nawaz Sharif and he will set a new trend of economic development under democratic rule.
