PAKISTAN ECONOMICS

NCBA&E
(National College of Business
Administration & Economics WCC)

A Project On

Political instability in PAKISTAN

Project Advisor
Prof. SYED HASEEB ZAIDI
Department of Business Administration

NCBA&e

Page 1

Session 2013-2017

PAKISTAN ECONOMICS
This write-up has been prepared and submitted to
fulfill the partial requirement for the Bachelors Degree
Of Finance & Accounts.

Submitted by:
Student Id.

Student Name

SAUD ur
REHMAN

Bs-Fa-02-08

Approved by:

Prof. SYED HASEEB ZAIDI

NCBA&E

NCBA&e

JULY 26, 2016.

Page 2

Signature

PAKISTAN ECONOMICS

UNDERTAKING
The project has been carried outby SAUD UR REHMAN(BS-FA02-08) as a partial
fulfillment of the requirement for the Bachelors degree of Finance &
AccountsfromNATIONAL

COLLEGE OF BUSINESS ADMINISTRATION &

ECONOMICS, WEST CANAL CAMPUS.
COPYRIGHT
All copyright and privileges are reserved by the Department of Business
Administration.

ACKNOWLEDGMENT
First of all, we are grateful to ALMIGHTY ALLAH for grant of endurance and
patience required in carrying out the Project. We are also thankful to our respected
and capable teachers for their timely advice and cooperation. We are also grateful
to our loving parents, for the prayers and encouragement that helped us at every
stage of the Project.
The project was carried out under the able guidance of Prof.

SYED HASEEB

ZAIDI, a true professional who has excellent command over the subject. He helped
us to conceive the project to start with and later-on answered my numerous queries
and enabled us to complete the project. We owe him our thanks for his precious
time and attention.
NCBA&e

Page 3

PAKISTAN ECONOMICS

DEDICATION
We dedicate this project to our loving parents, whose prayers are always with us.
We dedicate this project to all the teachers in our entire educational tenure. Along
with all, we bestow our project to some special personalities, whose help led us
towards the completion of this project.

DECLARATION
This project is the result of indigenous efforts and this will not be presented in any
other University/Institute for any other degree or qualification.
SAUD UR REHMAN

NCBA&e

Page 4

PAKISTAN ECONOMICS
INTRODUCTION

Political regimes in Pakistan have strongly influenced the economic

outcomes. Whereas the autocratic regimes have tended to exhibit good
economic performance with low and stable inflation, robust growth, and
fiscal discipline helped by relatively high revenue generation and checks on
public expenditure, the democratic regimes have been marked by
macroeconomic instability and sluggish economic growth. In addition,
autocratic regimes also witnessed relatively stable external sector along with
low trade deficit and high capital inflows in the form of foreign direct
investments and portfolio investments, which indicates high level of
confidence of foreign investors in the domestic economy. On the other hand,
key economic indicators have generally deteriorated during different
episodes of democratic regimes.1 Table 1 summarises the relative
performance of selected macroeconomic variables across different political
regimes.

NCBA&e

Page 5

PAKISTAN ECONOMICS

Political instability
Political instability is used to describe political disorder or disturbance within
a certain country.
Political instability is described as loss of control of a countries territory,
inability to provide public service and loss of sincere authority.
Political instability hinders economic growth within a country.

The territorial issues and border conflicts with India, the socio-economic
differences within the country, the struggle for a share of power between the
provinces and the early death of the founder of Pakistan Mohammad Ali
Jinnah, are some of those realities which not only politicized the policy
making elites and their willingness in introducing the fair democratic
procedures but also encouraged the non-democratic elements in the country
including the army.
Even after 63 years, as a corollary, the country could not get cleaned from
feudal, tribal, punchayt system and sectarian segregation. In this grim
situation the public has been left untutored in the kind of vigilance usually
needed
to
hold
political
leaders
accountable.
Pakistan failed to establish a stable democratic government due to
constitutional conflict. Due to political instability, Pakistans economic and
social growth has been curtailed.
The root cause of Pakistan political woes lies in its feudal and the winnertake-all approach to governing that has been practiced by successive civilian
and military leaders. The Muslim League that brought independence to
Pakistan, lacked internal democracy. Once partition and statehood had been
achieved, provincial and local political parties confined Muslim League just a
paper-party. There were no opposition party to counter Muslim League
initially, but latter on, Muslim league itself was disappeared. Coupled with
the political legacy of Muslim League, the civil and military bureaucracy, that
was of much importance due to its scarce number, gained so much power
that they depressed the political institution. The constitution-less 10 yearshistory from 1947 to 1956-was an ill exercise of the political actors, which
invoked the military to interfere in the politics.
Absence of a complete constitution, allowed the peoples with power to
manipulate the political and constitutional institution, as they wanted.
Different powerful civil and military bureaucrats played blasphemy of
NCBA&e

Page 6

PAKISTAN ECONOMICS
constitution,
parliament
and
political
parties.
Political parties in Pakistan are not working fairly. The intra-party election is
no to be seen. The leaders, consequently, are autocrats. Political parties are
famous in the name of leader of the parties. Personification has harmed
extremely
the
true
essence
of
democracy.
The third pillar of the state, the judiciary has also dual strategies all over the
history. Mostly the role of the judiciary has been vulnerable. It has always
provided a so-called legal way to the dictators to assume the power. The
constitution has been abrogated many a time with the help of the judiciary.
Beside the judiciary and Armys role in politics, the intelligence agencies
have become a major actor on the national political scene. Military
intelligence and Inter-Services-Intelligence (ISI) are widely believed to have
had a major hand in shaping the candidates and the choices available to
voters at least since General Zias general election of 1985. In these situation
how a true democratic government would be formed to realized the dreams
of the great Quaid?
In addition to all above given anti-democracy factors, the dynamic structure
of the state is also not in the favour of democratic values to be flourished.
For most of its history Pakistan has been divided into provinces drawn
basically on ethnic lines. Political loyalties and attitude have a strong ethnic
dimension to them, and the central governments desires to manage
Pakistans ethnic diversity can have a major impact on resource allocation
foreign policy decision, and the game of politics.
Another elements which has vitiated the democracy in Pakistan is violance in
politics. The patience require for a democratic system is highly tacking in
almost all the parties and theirs drivers. Democracy accommodate the
presence of dissent party. Democracy is the product of wishes of the people
and not of the desires of an elite few. But political prayer of Pakistan could
not
do
so.
Illiterate voters, family ties a among politicians and feudalism has
constrained democracy in Pakistan

Types of government in Pakistan

Dictatorship

Democracy

Dictatorship
A dictatorship is defined as an autocratic form of government in
which the government is ruled by an individual: a dictator
NCBA&e

Page 7

PAKISTAN ECONOMICS
Democracy:
Government by the people;
A form of government in which the supreme power is vested in the people
and exercised directly by them or by their elected agents under a free
electoral system.

System of Conflicts since independence:

11 dissolved assemblies

3 Martial Laws

making, amending and abolishing 3 constitutions

Democracy can be revived in Pakistan by taking following

steps
1. Reform the judiciary.
2. Creation of an independent election commission.
3. Internal party elections.
4. Strengthen the free press.
5. Division of provinces.
6. Dont neglect provincial and local government.
7. Implementation of the constitutions.
8. Continuity of fair elections.
9. Protection of minorities and civil liberties.
The nation political parties should embrace a new spirit of co-operation and
constructive opposition, moving beyond out dated confrontational and selfdefeating street action and walk-outs and boycott politics to engage in
vigorous political debates free of violence
NCBA&e

Page 8

PAKISTAN ECONOMICS

Since independence:
1. Post-Independence era (1947-1958)
2. Military-led government era (1958-1971)
3. Elected governments era (1971-1977)
4. Military-led government era (1977-1988)
5. Elected governments era (1988- 1999)
6. Military-led government era (1999- 2008)
7. Elected governments era (2008 to present)

Regimes of Conflicts since independence:

1947-56 Absence of constitution, rise of regionalism in Bengal, no strong
political party, first 9 years and 11 prime ministers, 1955 dissolution of
constitution assembly and Black Doctrine of Necessity.
1956-58: First parliamentary constitution, abrogation of constitution and
Martial Law.
1958-69: Ayubs Martial Law, Presidential System and 1962 constitution,
making of Muslim League (Conventional) system of basic democracies,
media censorship, but also better economic growth.
1970-77: Fascist civilian rule under Bhutto, agreed 73 constitutions,
Bhutto tried to oust military from politics but failed, the poor friendly
regime but negative effects of nationalization, Pakistan National Alliance
(PNA) and movement against Bhutto derailed democracy. Opposition
invited Zia to take over.
1977-88: Zias martial law and ban on political activities, making of
Majlase Shoora (1982), 8th amendments with Powerful President non
party based election 1985, making of pressure groups like MQM, Anjuman
NCBA&e

Page 9

PAKISTAN ECONOMICS
Sipahe Sahaba. Restricted women participation in politics.
1988-99: The most corrupt regime of Benezir and dictatorial regime of
Nawaz Sharif, dissolution of assembly, rising poverty and decreasing
peoples interest in politics.

Political instability in Pakistan:

System of Conflicts since independence

American Influence

Role of Opposition

Role of Media

Bureaucracys role in bringing democracy to its knees

American Influence
Great powers have great designs Pakistan has resource rich area in the
north-west, people rich in the north-east. Pakistan is junction of South
Asia, West Asia and Central Asia. US interests in the regions to contain the
Growing China, nuclear Iran, terrorist Afghanistan, and to benefit from the
market of India.
Security and Business are two main US interests in the region while
Pakistan is playing a from line role against terrorism. Therefore Pakistani
governments, either military or civilian, always sought green signal from
Washington which supported dictators.

Role of opposition:
Opposition parties less worked for democracy and more for getting into
power-even with the support of undemocratic forces and illegal actions
Unfortunately, political parties always managed to reduce the objectives
of political movements downs to one a point agenda toppling of the
civil/military government. Instead of challenging the status quo, the
oppositional forces were more interested in the capturing state power to
reap the benefits for themselves. Consequently, every political movement
NCBA&e

Page 10

PAKISTAN ECONOMICS
that took the sacrifices of many people turns out to e no more than a
change of faces at the top level with continuity in social, economic and
foreign policies of the country.

Role of media:
The civilian and military dictators controlled media which
dishonored peoples voice, promoted every type of corruption,
kept the people ignorant and the judges weak.

Bureaucracys role in bringing democracy to its knees:

The founder of Pakistan Quaid-i-Azam Muhammad Ali Jinnah said on 25th
March 1948 in his address to the civil service officers at Chittagong:I know you are saddled with the old legacy, old mentality, old
psychology. Make the people feel that you are their servants and friends,
maintain the highest standard of honor, integrity, justice and fair play.
Liaquat Ali Khan was assassinated on Oct. 16th, 1951. senior bureaucrats
persuaded Nazimuddin to be a powerful prime minister on the lines of
Liaquat Ali Khan. This manipulation was engineered by, Iskander Mirza, to
make Ghulam Mohammad, a member of the Accounts Service as GG.
He was finally removed as PM by Ghulam Mohammad. Mohammad Ali
Bogra was handmpcked to replace Nazimuddin. With his close friend Gen
Mohammad Ayub Khan (who remained C-in-C) he joined the Bogra cabinet
as interior minister and defence minister respectively. For challenging
GGs despotic authority, Bogra was replaced by Ch. Mohammad Ali.
Making Ghulam Mohammad into a mental case, Mirza became acting GG
NCBA&e

Page 11

PAKISTAN ECONOMICS
and removed Ghulam Mohammad to become GG, Promoting himself from
major to the rank of major general.
In 1956, Pakistan became a Republic and Iskandar Murza its first
president. By 1958, he had installed and removed four PM,s Choudhry
Mohd. Ali, Hussain Shaheed Suhrawardy, II Chundrigar and Feroz Khan
Noon. Since there was no way he was ever going to be elected in his own
right, in the face of deteriorating political and economic conditions he
declared marital law on Oct. 7, 1958 and made the C-in-C of the Pakistan
Army, Gen. Ayub. Conspiring to oust the very armed forces officers who
had supported him, Mirza was himself removed by the army on Oct. 27,
1958.
Between 1960 and 1968, the bureaucracy was the dominant partner with
the technocrats and politicians. A popular democratic movement brought
Ayub down in 1968. he handed over power to Gen. Yahya Khan, the C-inC.
Yahya Khans military rule ended three and a half years later on Dec 20,
1971 after a violent civil war and the war with India and Pakistan got
dismembered Zulfikar Ali Bhuto became Pakistans president
and its civilian chief martial law (CMLA) administrator on Dec 20, 1971. He
remained president Aug 1973, under the 1973 Constitution he assumed
the office of a powerful PM and FAzal Elahi Chaudhry became president.
Bhutto must be given great credit for exhuming democracy from its grave
and resuscitating it after 20 years. Democracys downfall was
nationalization on Jan 1, 1974. this made bureaucrats all powerful again
by proxy, heading most of the state-owned enterprises and the
nationalized ones.
On July 5, 1977 Gen Ziaul Haq seized power and became CMLA, relieving
Fazal Elahi Chaudhry as president on 16 Sep 1978 and remaining so till his
death in the aircraft crash on Aug 17, 1988. an appointed Majlis in 1982
gave way to party-less elections in 1985, Mohammad Ali Khan Junejo
becoming PM. Zia removed Junejo in May 1988 and assumed day-to day
control. During the Zia period, Ghulam Ishaq Khan.
On Zias death, ghulam Ishaq Khan, who was made chairman of the
Senate by Zia, became acting president. He was elected president by the
NCBA&e

Page 12

PAKISTAN ECONOMICS
assemblies on Dec. 13, 1988. From Dec 2, 1988. As President till July 18,
1993, this bureaucrat sent two elected PMs home on flimsy grounds.
Farooq Laghari, another bureaucrat-turned-politician, was elected
President on No. 14, 1993. before being made to resign on Dec. 2, 1997,
he ousted his own party PM Ms Benzir, and was planning to send home
another PM, Mian Nawaz Sharif who had become all-powerful. Mohammad
Rafiq Tarar was elected president on Jan 1 1998, remaining so till Jan 20,
2002. instead of making democracy work, Mian Nawaz Sharif went on
binge of sacking all those he did not like. When he tried this with the
COAS, Musharraf and his close aides threw him out on Oct 8, 1999.

Factors behind terrible weaknesses:

The balance of power between the executive, judiciary and parliament is
the most fundamental prerequisite for a liberal democratic state.
However, the post-colonial state o Pakistan was never able to achieve this
balance due to the political role of the military, which we inherited as the
most organized institution in the post independence period. Furthermore,
the willingness of the mainstream political parties to work as the B team
of military and civil bureaucracy and the
Superior judiciary to compromise its independence by invoking the
doctrine of necessity compounded the situation.
Personalization of Politics:

NCBA&e

Page 13

PAKISTAN ECONOMICS
The military is more powerful and resourceful than all other civilian
institutions and organs of the state put together.
This enables the military to control civilian institutions, political processes
and democracy either directly or from behind the curtain.
When one institution of the state retains such unbridled power, it
becomes extremely tempting for other political forces to seek its
assistance in acquiring political office or dislodging others from political
office.

Personalization of Politics:

The military is more powerful and resourceful than all other civilian
institutions and organs of the state put together.

This enables the military to control civilian institutions, political

processes and democracy either directly or from behind the curtain.

When one institution of the state retains such unbridled power, it

becomes extremely tempting for other political forces to seek its
assistance in acquiring political office or dislodging others from political
office.

Effective Measures to strengthen the System:

To create physical asset by educating the masses, proper allocating the

land, credit, Zakat and Usher ensuring cost effective provisions of basic
needs. Improved efficiency in the public and Corporate sectors to
provide rule of Law.
Independence of Judiciary will strengthen democracy, restore trust
between Center and Provinces, and facilitate quick dispensation of
justice.
Depoliticizing of public departments to avoid unjust political pressures.

NCBA&e

Page 14

PAKISTAN ECONOMICS

Peace inside and outside the borders will provide sufficient resources,
skills and opportunities to focus on the national prosperity.

Accountability at all levels. Autonomy to the Provinces. Awakening of

Islamic ideology.
It becomes the social responsibility of the educated middle class and
the civil society to protect.
All politicians must be on board as Pakistan steers itself towards
genuine democracy and away from terrorism and violence that has
begun to take roots in society.
There is an urgent need for better networking and coordination among
various sections of society such as lawyers, journalists, human rights
activist and students.
Unless the Pakistani state craft is conducted within constitutional
parameters, Pakistan will remain vulnerable to external threats.
To create a moderate system of values that accommodates different
points of view, not just religious but also ethnic linguistic and regional.
It must develop strategy for economic growth, poverty alleviation, and
reduction of interpersonal and interregional income disparities. It must
allow the development of institutions that would work independently of
those who control politics.
The judiciary and the Election Commission are the two most important
institutional devices that need to be free of political influence. But
institutions such as the SECP and the State Bank also need to be set
free.
Media will its magical power can unite the warring factions by
minimizing the differences through open debates.

NCBA&e

Page 15