25 July, 2014 / Ramazan 26, 1435

The worst era ever?

Published Apr 09, 2013 05:00am

THE last PPP government is frequently termed as Pakistan’s worst. Some use such assessments to merely lambast the PPP. Others argue that incompetence was so extraordinary that it proves that democracy is unsuitable for Pakistan.

The PPP’s performance was indeed disappointing. However, the assertion that incompetence was so acute that extra-constitutional steps are justified rests on spurious statistics and hyperbole.

Many claim that the PPP destroyed the economy.

Pundits report that it incurred more debt than all previous governments combined. This is an evocative and hair-raising but meaningless comparison.

Firstly, nominal debt values cannot be compared over time since inflation has reduced rupee values significantly since 1947. A small debt from 1950 equals a debt several times larger today in real terms.

Secondly, as the real size of economies increases, so do their debt-carrying capacities. Thus, anyone employing this comparison is a bad economist or a good politician.

Good economists compare debt ratios over time, eg, annual debt-servicing levels compared with exports and/or tax revenues. World Bank databases show that Pakistan’s external debt service-to-export ratio deteriorated from 10 per cent in 2006 to 15pc by 2010 but improved to 9pc in 2011. However, it was worse (26-40pc) in certain years under Musharraf, Sharif and Zia!

The Pakistan Economic Survey shows that the public debt-public revenue ratio deteriorated from 404pc in 2008 to 474pc in 2011 before improving to 419pc. It once touched 589pc under Musharraf!

Analysts portray the 2008-2013 GDP growth as Pakistan’s lowest. (World Bank databases show that growth was actually slightly lower during 1997-2002 under Sharif and Musharraf.)

If one takes a dozen critical indicators, the 2008-2013 performance may emerge as the worst. However, this period experienced Pakistan’s worst-ever combination of external threats, including the worst recession since 1929 globally and the worst floods since independence nationally.

Would the 2008-2013 performance still be the poorest, and that too poor enough to justify extra-constitutionalism, once the impact of these factors is removed? This determination requires rigorous econometric analysis which unfortunately is unavailable. Off-hand, the latter outcome is extremely unlikely.

Critics claim that this was Pakistan’s most corrupt government by spuriously highlighting Pakistan’s post-2008 deterioration on Transparency’s corruption perception index rankings. However, Pakistan’s rankings could deteriorate even because of decreased corruption perceptions in other countries.

Pakistan’s corruption trends can only be gauged through its own absolute scores over time on this index, which journalists rarely report. Pakistan’s scores have fluctuated between 2.1 and 2.6 (out of 10) since 1999.

The worst score within this narrow band occurred under Musharraf. Media reports about astronomical corruption increased after 2008, though without court convictions, they must be treated with caution. Transparency reports Rs18 trillion of post-2008 corruption, media headlines scream. However, reading further, one discovers questionable inclusions, which represent weak economic performance rather than corruption.

One hears repeated claims about unprecedented post-2008 insecurity. However, under Musharraf, the Taliban’s physical control extended close to Islamabad and even inside it if one counts their Lal Masjid fortress.

The Pakistan Institute of Peace Studies reports that suicide attacks/fatalities have decreased after 2009-2010. Baloch nationalists are now contesting elections unlike under Musharraf. However, Karachi violence, sectarian attacks and crime have increased recently.

In summary, PPP’s performance was the poorest on many immediate dimensions but also better than earlier periods on some, despite a tougher environment.

Most major immediate problems (energy-related, inflation and insecurity) were legacies inherited from Musharraf.

Despite inheriting these issues, it could have resolved them instead of making some of them worse eg, by initiating poor-friendly taxation given the persistent stagflation; holding early, credible elections in Balochistan; and tackling militants forcefully. However, this comparison with non-democratic eras is legitimate when comparing the virtues of democracy with non-democratic alternatives.

More importantly, there is no evidence of extraordinary incompetence which justifies extra-constitutionalism. To give a flavour of what extraordinary incompetence looks like, a quick global tour is helpful.

Governments in Liberia, Rwanda and Somalia completely collapsed faced with rebellions during the 1990s. Zimbabwe recently experienced inflation of trillion per cent (compared with Pakistan’s recent highest of 20pc plus under Musharraf). Argentinian and Indonesian GDPs contracted by 25-50pc over two years. Pakistan’s growth remained positive throughout 2008-13.

Ironically, most of these countries moved from autocracy towards democracy subsequently. To suggest the opposite for Pakistan despite its far better performance is nonsensical.

Turning to abstract issues, devolution, curtailment of presidential powers and institution of an independent election commission and judiciary represent major democratic advancement. While the debt comparison above is meaningless, it can be legitimately claimed that this era probably produced more democratic advancement than all previous eras combined.

Ironically, these previous eras include the 30 years of three dictators who promised “genuine” democracy. The credit for this advancement goes to all major parties in proportion to their parliamentary strength.

Many dismiss this advancement outright since immediate issues remained unaddressed.

Coming from those who suffered grievously during 2008-2013, e.g., the bottom 25pc or the Hazaras, such dismissal makes sense. Coming from the majority which escaped acute suffering, especially those who boast endlessly of having longer-term perspectives than illiterates, it reflects shocking short-sightedness.

Such advancement only will eventually produce the good governance that can resolve immediate issues effectively.

However, immediate performances and hyperbole ultimately determine electoral fates. Given the PPP’s poor immediate performance and failure to debunk hyperbole, it would be neither surprising nor unjust if voters seek change in May. But this will not represent democracy’s death-knell, rather its rejuvenation.

The writer is a political economist at the University of California, Berkeley.

murtazaniaz@yahoo.com

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Comments (15) (Closed)


Khalid
Apr 09, 2013 05:08am
You seem like you have literally ignored all the corruption, bad things, worst decisions, breaking laws, you have ignored everything. PPPP Govt was the worst no matter how much you portray it to be better.
umesh bhagwat
Apr 09, 2013 05:16am
gr8 article! its only achievement was lasting for 5 years!
Farhan
Apr 09, 2013 07:25am
The political economist should've lived couple of years in Pakistan to understand the situation.
Ali
Apr 09, 2013 07:31am
I am shocked by this analysis. External debt to exports ratios. Really!? The government astronomically increased the 'domestic debt' over the last five years. So the right ratio to use should be domestic debt to exports ratio. How about also looking at the budget deficits? Tax collection? Healthcare? The last government was a perfect example of how NOT to govern a country. Had it not been for the foreign remittances, Pakistan would have defaulted a long long time ago.
thecardinals
Apr 09, 2013 07:35am
The roots of every disease Pakistan is and has been suffering from can be traced to the military's involvement in the affairs of the state. 'Armed Forces' as they are truly called, militaries everywhere only know the use of these two things - arms and force. They only have one expertise: how to kill and how bend by force. Because force and weapons can never be used to correct things, to solve problems. To solve a problem, you need tact and tools, not force and arms. These bugger general are Pakistan's actual destroyers. Rein them in today and bring them under the rule of law and you will have a state with laws and rules. These buggers have no respect for the law - be it the constitution of the land, moral law or any other law. They only understand the language of force. They have to be controlled by force and this force can only be created by the people of Pakistan. Revolt folks, and remove these traitors and limit them to their barracks. Believe me, you will have a Pakistan to be proud of.
I. Ahmed
Apr 09, 2013 08:21am
This article is like looking for needle in the haystack to justify the poor performance of PPP government. Being a political economist, the writer should have carried out in-depth economic analysis. The reality is on the ground. People living in Pakistan are facing the challenges, numerical juggulary cannot make worse look better. It is potent to point that the democratic government had no short or long term economic strategy for the country and hence the state that we are in. The writer should also be aware that in 2011-12 the methodology of CPI Index and Inflation was changed in Pakistan. The mere fact that writer ended up comparing Pakistan with the countries like Rwanda, Somalia and Zimbabwe points to the fact how bad the state of economy and governance in Pakistan is! The writer has justified the performance compared to Argentina and Indonesia by stating ?GDP?s contracted by 25-50pc?, and conveniently ignored to provide the actual numbers of GDP. Contracted based on which base-line? [The GDP growth (annual %) for these two countries as per World Bank for 2008-11 is 6.8, 0.9, 9.2, 8.9 for Argentina and 6.0, 4.6, 6.2, 6.5 for Indonesia.] Surely, dictatorship is not the solution, but justifying bad governance by using concocted numbers is a bigger sin. And I am surprised that a newspaper like Dawn does not carry out scrutiny of the articles before publishing them.
irfan husain
Apr 09, 2013 09:48am
An excellent analysis. This is the most objective analysis of the PPP's performance over the last 5 years I have read anywhere.
Akram
Apr 09, 2013 09:54am
excellent analysis, if only more Pakistanis could follow such logic instead of charging headlong behind this media headline or that, or following one particular 'saviour'.
Ijaz
Apr 09, 2013 10:17am
It would be most 'non-political' for our political stuntmen to allow this political maturity to grow into our nation. So for the time being, most readers can either 'dislike' this analysis or consider this a 'ploy'. For people who suffer thinking capacity can only feel sorry for you and self. ;)
dab
Apr 09, 2013 10:38am
The word 'unemployment' is missing from the aritcle.
Mansoor Warraich
Apr 09, 2013 12:02pm
PPP govt could have dealt with power crisis on war footing by introducing coal powered plants but failed to adress the problem and kept lying to nation. The insurgency problem was inherited and so they cant be blamed but a counter insurgency could have been devised and implemented. Gas exploration and production could have been done on the fast track but people like Dr Asim Hussain and Tauqeer Sadiq were calling the shots. These people were completely incompetent and Mr Saqid was corrupt to the hilt. The national institutions like PIA, Railways , OGDC and Steel mills were allowed to rot where as any elected govt should have taken immediate steps to improve their working. I never saw any serious effort to correct the ailing institutions which could have created many more jobs. The author is comparing Pakistan with Somalia and Rwanda, which reflects his mind set. Couldnt he find any better country to compare? The elections will tell what the masses think about the PPP rule. lets wait till then.
Faraz
Apr 09, 2013 12:31pm
'Pain felt' by the general masses like me had no limits in that era.
Mystic
Apr 09, 2013 01:31pm
Almost everyone agrees that corruption is one of the biggest problems we are facing. How many people were arrested or convicted during the past few years on charges of corruption? 0. Does that mean we have a very clean society? Excellent analysis!!!
BRR
Apr 09, 2013 02:33pm
While the PPP Govt may not have been as bad as Zimbabwe's, it is no great achievement. The writer seems to have not factored in external funds from NATO / US that has helped stabilize the economy, and the the perilous drop in remittances in recent years that spells trouble in the short term. The writer has not acknowledged the IMF crutches which Pakistan will again have to seek.
Agha Ata (USA)
Apr 09, 2013 10:38pm
The entire period of five years PPP played games with other political parties, or did something for its better image, but the actual task was never done.