The News
September 14, 1997

At public forums evaluations of the economic conditions of India and Pakistan
on this Golden Jubilee celebration year are narrowly focusing on the statistical
interpolations and conjectures of random observations. In serious economic
research, most of the analysis is done within the strict confines of the neoclassical
paradigm of economics. This paradigm's validity is undermined because it is
adhered to as an ideology and not as a scientific research programme. This has
resulted in grave distortions and omissions.

In evaluating the evolution of the economic system in Pakistan, a historical and
culture-neutral or benign approach has been employed. Some of the major
historical facts that are ignored, from the perspective of the political economy, are
the following:

-- In delineating the earlier economic development in Pakistan, the
demographic realities are not taken into consideration. For example, exodus of the
indigenous commercial, trading and entrepreneurial class has not been factored in the
analysis. Further, the effect of replacement of these indigenous elite by the
educated classes from UP -- that filled the vacuum in the administrative
machinery but not in the economic spheres -- has not been examined. The socio-political
consequences of interfacing of this non-indigenous elite with the largely
indigenous agrarian population have not been analysed. Also, the long-term
implications of the impact of accelerated urbanisation of peasant populations
have been ignored.

-- Pakistani and Western economists have been pointing out that Pakistan's
growth rates have been higher than India's. Obviously these interpretations are
self-serving: Pakistani economists of nationalist persuasions are anxious to
show their national superiority while the Westerners are eager to congratulate
themselves to prove that Pakistan's alliance with the West, versus
Indo-Soviet cooperation, was the primary reason for this relative success.

It has been totally forgotten that at the time of the division of India,
Pakistani Punjab -- constituting the major portion of present Pakistan -- was a most
prosperous agrarian economy as compared with East Punjab and UP. Further, in
the first 20 years, the contribution of foreign exchange earnings from jute
exports from East Pakistan has been conveniently ignored. In the backdrop of these
factors, economic expansion, particularly the industrial expansion of the
fifties and the sixties, is not explained in the proper perspective.

-- The economic impact of separation of East Pakistan that showed in the
following decades is erroneously disregarded. More surprising is the absence
of any mention of the cost of two wars that Pakistan fought with India.

-- In analysing the economic downturn of the seventies, the entire emphasis
is placed on the nationalisation policy of the Bhutto regime. The negative
implications of nationalisation are obvious and conclusive. However, Bhutto's
decision of expansion of the armed forces and the hiking up of the military
budget

-- which could not prevent the country from breaking up -- is not even
mentioned in passing by most analysts. Further, the expansion of the industrial
infrastructure (steel mill, cement, fertilisers, etc.,) that occurred after nationalisation
is swept aside.

-- Prosperity during the 1980s has not been sufficiently explained either.
Again, due to political considerations -- though economists swear not to have any --
higher annual growth rates are touted without any mention of the budget
deficits that, during this period, were the highest (between 8-10 per cent of the GDP)
in the history of the country. Remittances of migrant labour, foreign aid due to
the Afghan war, and drug money are conveniently taken to be secondary instead of
primary factors in explaining higher growth rates. Furthermore, the way these
economic factors gave birth to a certain type of socio-political order,
casting its long shadow over the coming generations, has been seen with a benign eye.

Also, the effect of culture and language on the economic development has been
completely ignored. Even sociologists and anthropologists have not attempted
to quantify these variables while attempting to explain the evolution of
Pakistani society.

Most of the scholars, trained in the Western intellectual tradition (and
mostly in Western institutions) assume a culture-neutral universal 'economic person'
gleaned from the industrialised world. However, because of the lack of
historical perspective, the process of evolution of such an industrialised 'economic
person' is disregarded. For example, it is ignored that, for the industrialisation of
Western countries, many cultural and linguistic issues were settled during the 18th
and 19th centuries. For mass education most of the West European countries, like
England and France, abandoned the use of Latin and promoted their mother tongues
during the Renaissance. Descartes, one of the forefathers of modern Western
philosophy, pioneered the use of the French language. Even the late arrivals to the
industrialised club -- Japanese, Chinese or Koreans -- benefitted from the
use of their mother tongues.

In the parlance of development economics, such factors are assumed to be
elements of the human capital matrix. However, most of the development
economists (in international organisations), have adopted a narrow approach.
Simplistic and quantitative measures of education and health care are taken
to be main determinants of the level of human capital. The number of schools and
enrollment size is used to measure the literacy rate. Efficacy of education
and learning, as a process of augmentation of knowledge/skills at the societal
level, is not considered important.

One can show through socio-psychic dynamics of learning that societal
knowledge base (and mass literacy) can be only expanded through imparting education in
one's mother tongue. Higher literacy rates in Bangladesh and in West Bengal,
Kerala and many other South Indian states proves this point. In almost all
the East Asian countries (the industrial tigers) education up to high school is
imparted in the mother tongue. On the contrary, the language confusion in North India and
Pakistan has left the majority uneducated or literates with no real knowledge
base.

Many experts believe that Bangladesh is on the move and has a potential of
becoming the South Asian economic tiger. However, few have noticed that
Bangladesh is experiencing a cultural renaissance also. Their elite is
integrating with the masses on all levels because of commonality of language. For
example, in comparison to Pakistan's largely alienated elitist NGO movement,
Bangladeshis have been enthused by NGOs run by indigenous elite who have linguistic and
cultural bonds with them. Nonetheless, economists and all kinds of experts
have not tried to understand the differences between these two countries due to
their insensitivity to language and culture. Pakistan's political economy can be
understood only if major historical, social, cultural and linguistic factors
are brought into focus. Only then can a credible course of action be prescribed.

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