ISN’T indulging in a bit of self-indictment a healthy activity for nations and individuals?
This question must be answered because most analysts writing on Pakistan’s economy tend to ignore geopolitical developments over which Pakistan had no control. These events militated against the growth of Pakistan’s economy — an economy that had the potential to make this country one of the Asian Tigers. In fact, during Ayub Khan’s ‘great decade of development’, this country was cited as a model of growth for all developing countries. With rare exceptions, most critics assume that it is the poor quality of political leadership and its inability to formulate and implement sound economic policies that stunted Pakistan’s economic progress.
Let us note that it is the other way around also, because sometimes world-shaking eve-nts abroad dramatically boosted Pakistan’s economic fortunes. Gen Ziaul Haq, for instance, was initially looked upon with contempt by Western powers for overthrowing a constitutionally elected government. How- ever, the Soviet invasion of Afghanistan in December 1979 changed his fortunes. American president Jimmy Carter, who died recently, had a strong human rights agenda and made his anger known to Zia. But all his ideals vanished when Babrak Karmal entered Afghanistan at the head of 30,000 Soviet troops and was installed as the ruler. In a letter dated Jan 11, 1980, Carter wrote to Zia: “The overthrow of the Afghan government and occupation of that country by Soviet military forces represent a profoundly disturbing threat to the stability of the region and, most directly, to the security of Pakistan. In these circumstances, it is essential that there be no misunderstanding as to the commitment of the United States to the security and territorial integrity of Pakistan.” Suddenly, economic and military aid started pouring in.
To what extent should Pakistan be blamed for its poor financial situation?
Two decades later, the attack, led by Egyptian architect and engineer Mohammad Atta, on New York’s Twin Towers on Sept 11, 2001, opened a new chapter in US-Pakistan ties, whose consequences would fluctuate to both help and hurt this country.
Gen Pervez Musharraf’s rule showed the negative and positive consequences of 9/11 as the attack’s mastermind, Osama bin Laden, was based in the mountains between Pakistan and Afghanistan. The ferocity of the US administration was epitomised by a threat to bomb Pakistan into the Stone Age. Afghanistan, ruled by Al Qaeda’s Taliban followers, paid a price by refusing to hand over OBL to America. As US air power unleashed its fury, there were 130,000 Nato troops on the ground as part of what president George Bush called Operation Enduring Freedom. In November, the Kabul regime was destroyed by US-backed forces that included the Iran-supported Northern Alliance and the ruthless Uzbek warlord, Rashid Dostum.
Briefly, Musharraf surrendered to what amounted to an American war ultimatum, his decision proving to be a boon as well as a curse. ‘Mush’, as some Americans called him fondly, received plenty of American aid, but Afghanistan would turn out to be a problem.
During Musharraf’s reign, the annual GDP growth rate was six per cent, poverty was down, 12 million jobs were created, the debt-to-GDP ratio dropped substantially, and Pakistan’s reserves increased from $1.9 billion to $11.4bn.
However, the negative results of his decision cost Pakistan dearly. More than one attempt was made to assassinate him, as fanatics loyal to the Taliban launched a terror campaign with suicide bombers blowing themselves up in mosques, universities, bazaars and public buses, killing thousands of people.
One example of the foreign causes of Pakistan’s economic misfortunes is the tragedy that afflicted Pakistan’s tourism industry. In fact, one can say with confidence that no country has what Pakistan possesses — three of the world’s highest mountain ranges: the Himalayas, Hindukush and Karakorams. There are snow-capped peaks which have not been scaled and named. Nestling in the mountainous territory is the legendary Hunza, with its breathtaking views mesmerising foreign tourists. The reason for the tourism boom was geography, because European tourists drove through Turkey, Iran and Afghanistan to enter Pakistan via the Khyber Pass, enjoying the scenic beauty along Grand Trunk Road as they reached the historic city of Lahore. This lucrative source of dollars and deutschemarks for Pakistan was cut off by the Islamic revolution in Iran and the Soviet occupation of Afghanistan. There was nothing Pakistan could do about it.
The question is, to what extent should Pakistan be accused of mismanaging its economy when foreign events beyond its control too have badly hurt economic growth?
The writer is Dawn’s External Ombudsman and an author.
Published in Dawn, January 20th, 2025
