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Have dictators achieved more?

July 05, 2010

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THE dismal situation today is feeding nostalgia for Musharraf. Was he worth it? Not for democracy-idealists like me! However, since many can tolerate dictatorships if they deliver, I consider this question pragmatically.

Even pragmatically, dictatorship cannot be a permanent feature in Pakistan — more polycentric than Africa where dictators rule forever — where it has a shelf life of 10 years due to external and internal pressures. But dictators do have greater powers as they control the intelligence agencies and can take decisions without worrying about vote banks or parliamentary strength.

Thus it is not enough if dictatorships outperform democracies during their tenure, as there are no structural changes of long-term benefit. This was the stated objective of all our dictators, and the actual contribution of Asian dictators, whose performance stokes much of our fondness for dictators.

I judge Musharraf by his legacies and not character, intentions, efforts or even immediate results, which may be better than those yielded by politicians. Viewed so, that things are so bad so soon after him is as much proof of his lack of positive legacies as of the incompetence of his successors. However, let us take a closer look to be fair to him.

Politically, some of his legislations have endured. However, his main political contribution on the one hand is an absence of what could have been positive legacies, as on Kashmir, or in increasing the capacity and independence of the bureaucracy through constitutional cover, or even in tackling crime. On the other hand, there are negative legacies, e.g. the Taliban insurgency due to his earlier support to them; the Balochistan insurgency; distortion of constitution; and attacks on the media and judiciary whom he should have strengthened to act as checks later on if he was serious about durable change.

Economic management improved. However, Pakistan also had a more favourable external environment under him. Long-standing US sanctions were dropped after 9/11, which led to significant economic inflows from the US, World Bank/IMF and western markets. These initially politically facilitated inflows helped improve foreign reserves, public debt and the current account.

Second, the global economy and developing countries overall performed better (until 2007) than during the 1990s. Thus, luck also contributed to an improved performance under Musharraf. However, even a democratic government would have achieved at least somewhat better results in the 1990s if the luck factor had been there. This reduces the credit due to Musharraf.

In terms of legacy criterion, since many indicators improve even otherwise, I look for structural changes in fiscal health, industrialisation, export-competitiveness and human capital. While the fiscal deficit-GDP ratio improved, the average tax-GDP ratio deteriorated.

Thus, fiscal balance improved by slower public expenses growth and external aid. The first is not desirable as we must spend more on education, social services, infrastructure etc. The second is not as sustainable as increasing tax-GDP ratio. An increase in the tax net with constitutional cover would have been a legacy difficult to reverse.

Similarly, the average manufacturing-GDP ratio barely increased while the average fixed investment-GDP (though it increased during 2005-07) and export-GDP ratios went down. The current account situation improved as imports grew more slowly than exports, but not because of greater export-orientation. Again, a major industrial and export expansion would have been difficult to reverse. However, many incoming resources went towards consumer loans, instead of export industries, in contrast to the stance adopted by the Asian Tigers who tightened consumption initially. Poor basic education fuels militancy and economic stagnancy. However, the education expenses-GDP ratio remained stagnant.

In summary, the only enduring economic legacy is contested reductions in poverty at the macro-level. True, micro-level analysis highlights worthwhile initiatives in higher education/infrastructure etc. However, they did not improve economic fundamentals even after nine years as there was no industrial strategy — which was behind the success of the Asian Tigers dictators.

In its absence, external resources created consumer credit, stocks and property bubbles that later burst. This failure to devise a strategy even over nine years is the biggest rebuttal to the 'if only he had more time' argument and a reality check for anyone imagining that Musharraf had put Pakistan on the path of the Tigers. Asian dictators, armed with strategies, effected structural change in five to 10 years. The absence of structural change despite greater external resources, powers and longer tenure than single democratic governments means that his performance on legacy criterion was poor.

More importantly, the dictatorships in Pakistan produced similar results. Being illegal, they distorted the political process. Realising that the army in a polycentric Pakistan cannot rule alone, they propped fringe politicians less popular but as dishonest as the ones dismissed.

Consequently, the quality of governance degenerated further. Even this arrangement didn't work and they finally had to bring back the mainstream parties. No dictatorship in Pakistan left behind significant economic legacies beyond temporary improvements achieved partly due to American support. However, even these were erased by the high cost of political strife induced by dictatorships.

None of this means that democracy brings immediate results. The current performance dispels that illusion, even after factoring in global recession and Musharraf's negative legacies. But it does mean that somewhat better non-structural economic performance — the maximum that dictatorships have achieved in Pakistan — is worth sacrificing for the long-term stability that democracy brings.

In fact, some political dividends are already apparent, e.g. the tiny steps towards reconciliation in Balochistan, and greater resolve on militants at least from a federal government that is not beholden to militants. But, overall incompetence shows how far we have to go.

Given all this, I prefer corrupt politicians to honest dictators, in the hope that decades of democracy will throw up better politicians. Fortunately, the external environment is less tolerant of dictatorships and future dictators will find it difficult to even produce economic mirages (budding dictators, beware). So my advice is to stop praying for dictatorships and pray for improved democracy.

The writer is a research associate on political economy issues at University of California at Berkeley.

murtazaniaz@yahoo.com