The November 3rd imposition of emergency rule and the suspension of the 1973 Constitution in Pakistan is one of the most significant events to occur in South Asia since the launch of this blog. While much is being (and will be) written about the politics of the situation, any analysis of the implications of this event for poverty reduction (the objective of this blog) will have to consider the following facts. Since 1999, the Pakistan government has undertaken a series of macroeconomic and structural reforms and Pakistan's GDP growth rate has accelerated. It has been averaging well over 7 percent a year over the last three years. Poverty has been declining steadily at about one percentage point a year during this period. Despite rising world oil prices, inflation has largely been kept under control. Nevertheless, there are two sources of concern on the macroeconomic front. The current account has gone from a surplus of one percent of GDP four years ago to a deficit of 4.9 percent of GDP today. And export growth has declined sharply from 14 percent a year two years ago to 3 percent this year.
Moreover, Pakistan suffers from a huge "human development deficit." In 1997, child mortality rates in Pakistan and Bangladesh were the same, at about 114 child deaths per 1000 births. Today, Bangladesh's rate is 77 and Pakistan's 101. In addition to low enrolment rates, especially for girls, there is evidence that the quality of education is extremely poor. In a sample of (better off) Punjabi villages, the share of 10-year-olds who could do single-digit addition and subtraction was 29 percent. These problems of basic service delivery cannot be solved without the active participation of communities and parents. In fact, the number of private schools has risen dramatically--from 32,000 in 2001 and 47,000 in 2005.
Finally, in the discussion about the rise of fundamentalism in Pakistan, two statistics are worth bearing in mind. Of the total number of enrolled children, the percentage enrolled in madrassahs is between 1-3 percent. And the maximum percentage of the vote won by fundamentalist Islamic parties in elections is 11 percent.
Mariam Claeson
Wed, 11/07/2007 - 09:36
Continued from my previous comment:
Right now, Pakistanis have a government that shaped up b/c the previous ones has rotted internally. We can agree or disagree with any of those, but currently we have a reality at hand. There are tangible issues to deal with, such as poverty - and then there are other issues to handle, such as safeguarding the country from being "taken over" - a real or imagined threat. It's "too much" going on at the same time. An internally weak person finds harder to resist flu - and may indeed find flu where a healthy person does not.
I reckon that above all, Pakistan needs to sit down quietly, disengage from unproductive matters, catch its breath, and then move on. This may mean Pakistan is apparently involved in some apparently useless activities for some time - but it's beneficial in the long run. The priority for the government, above all, is to catch its breath. The indicators you mention show improvement.
Having said that, some of the policies of the government are arguable - obviously the products of an older socio-economic mindset. As a comment went, today, rural development WITHIN the villages is a priority. "Bottom of the Pyramid" is the contemporary way as opposed to "Trickle Down". The education system is failing the world over for its inanity, and Pakistan indeed has a unique advantage in that it can create a more flexible system, b/c we don't have institutions that we'd need to destroy in order to take a fresh approach. For this, it's required that communities take action in their own sphere.
Pakistan needs civic institutions, and self-regulation by individuals and institutions. The current unfortunate crisis is the result of delusions of grandeur of institutions which thought the weight of the world is now upon their shoulders - and hence forgot their function. As a society, we need to re-draft our ways, and follow them without being policed.
Wed, 11/07/2007 - 09:33
Life is simple, it's about living and realizing the human potential - in the light of some rules which some believe are divine, others say are from an internal human ethical system, and yet others philosophize about. Any way we reach it, the end is nearly the same. As of 2007, human societies are largely aware of concepts of freedom, the right to eat, be free, manifest one's potential.
Governments are either created deliberately, or they simply emerge from the chaos. Observers of self-organizing systems can see how governments are formed. There is the process of cause & effect, and the duration of time that is involved in the evolution of an entity (and for it to develop its function).
If an ecosystem or a group fails to organize itself, and create a system of governance, there will be one created anyhow, for there cannot be a vaccum of government. So, the long and short of it is, that Pakistan has somehow ended up with a government.
There is no excuse to be lazy, and will is a great creator... but 60 years is a small time in the history of nations. The first and the second generations in Pakistan had to understand that they will be on the early part of the development/ progress/ achievement curve - and that they will need to work hard, and to create institutions.... above all civic institutions. Such a role is ASSUMED, it's not given or taken by anyone. Meanwhile, the eclectic mix of tribes and people in Pakistan also had to let go of their feudalistic mindset - it's a process that has taken it's good sweet time. Some nations could do it quicker, we didn't, and that's that.
Tue, 11/06/2007 - 20:03
Shanta,
It seems that GDP can go up when there's economic reform, but not necessarily political reform. Your blog has provided such examples. China, and now Vietnam, are even more compelling examples than Sri Lanka and Pakistan. So how much importance should be given to voice and participation and all the other features of what is called good governance in developing nations? Should we assume that the Pakistans and Chinas would, by and large, continue to progress economically if they became democracies that met all the criteria of good governance?
Tue, 11/06/2007 - 04:28
Thank you Shanta for bringing on this debate. I am a Pakistani female and am quite dishearted by this act of a dictator. When we talk about the poverty reduction, I believe in the long run, it is going to be a big issue for Pakistan. Basically because of some very simple reasons; 1) Lack of accountability: As the group in power would not let themselves accountable, so there will be many irregulairites unnoticed and unaccountable. Proof: Curbs on media & judiciary, and ban on fundamental human rights of freedom of speech etc. 2) Corruption: It should have been point number 1, but I made it second as it is always there but lack of accountability will be much higher. Corrupt people will be encouraged as they go unnoticed yet, and as a result of this, poverty would rise as money would go into corrupt people's pocket. 3) Lack of support from West to restore Democaracy: I can see that West would just lip sync but would not pressurise Musharraf to restore democracy, therefore, all policies announced and (un-)implemented by this dictator goverment would sustain, hence no improvement in poverty reduction can be seen.
Tue, 11/06/2007 - 00:02
I agree with Shanta to the extend that there is some visible growth in last five years. However, this growth is for a short period or we can say its an eye wash. Most of the growth has resulted from foreign economic aid and deferred repayments rescheduling. Future government may not be able to sustain this pressure. Pakistan may claim that it has accumulated lot of foriegn exchange but that too is at the expense of utilization of its own resources. They had utilized major part of their natural gas and oil reserves by cutting down on imports. This may have cut the fiscal deficit but for future governments this is going to be major issue as import bill will be much more hogher.
Education level is going down. Extremism is spreading and may result in more schools being closed. Pakistan created frankastein and now it is going to suffer for what it created.
Agriculture is not showing any sign of improvement. The population growth is not sustain. Water scarcity in next years may also cut agriculture production.
Poverty in terms of GDP may have come down but realistically it is increasing. The major part of government spending is utilized in Defence and related industry. Major part of budget is utized in non development and development budget is not spend wisely and major part of it goes in to the pockets of different people and associates.
I would say that it is going be very difficult period ahead for Pakistan. Poverty is going increase and that would create more extremist. Inequality and poverty mostly give advantage to those who exploit such situation to their advantage and brain wash people to blame west and others for there condition. THis is the main reason for increase in extremism and this menance cannot be control without power going to real people not military and feudal lords. Today this may only be dream as there is no political party which does not have feudal lords and military people in it. And these groups have become so strong that it will not let the power go to the masses.
Mon, 11/05/2007 - 22:19
I think the questions posed by Anonymous at 14:54 are critical. It would be interesting to see what others think. Can we really not include in the analysis the billions of aid that the US has been giving Pakistan [$9.6 billion since 2001, according to the Washington Post]? True, policies have been on the right track, but being in the axis of the war against terror must have definitely helped Pakistan get an extra push. And most importantly, can there really be long-term gains against poverty in an environment in which the voice of the people is ignored? What incentives do political leaders have to improve service delivery to poor people, for example, if people are voiceless? Without true democracy, everything is held hostage to the shortcomings of the dictator. The fight against poverty, or sustained economic growth are unfortunately, included in this category.
Mon, 11/05/2007 - 22:18
"Does Pakistan benefit from a benevolent dictatorship?"...
I believe there is nothing as "benevolent dictatorship" in the long run because the tendency to acquire more power and not brook opposition increases as benevolent dictator rules a country for a long time. Obviously, under Musharrf Pakistan has shown some pretty good results in economic front but we have to be cautious in interpreting the growth figures. Growth in Pakistan has been aided by huge financial aid and has not come from any major industrial or economic activity. And, this growth has not made significant dent in poverty and changed the views of the fanatics!
Musharraf promised to return back democracy almost seven years back but his quasi-democracy enveloped by dictatorial interest lengthened his rule. Why does he have to hold the two most important positions? Is it that Pakistan lacks able, patriotic, and trustworthy leaders at the top?
The seeds of fanaticism deep rooted in the tribal areas will persist and can’t be wiped away by any magical wand. This means that Musharrf is going to cling to power in this pretext. This essentially increases his lust for more power because he cannot withstand challenge and defeat bred out of democratic system.
It is high time the education system in madarsas is changed because this, and only this, can change the fanatic perception of the public, especially in the tribal areas. No military force can win over fanaticism. Also, no benevolent dictator, if there is any such thing in the short run, can overpower this with power.
I fear the whole economic activities, whatever is going on in real sense, and poverty reduction initiatives would be under cloud due to the new anti-democratic move by Musharrf.
Mon, 11/05/2007 - 17:50
Your blog talks about service delivery in Pakistan. I was involved in a project that dealt with social accountability in this sector in a small Pakistani city. We found that most agencies have no accountability mechanisms in place. The World Bank and other similar IDOs involved in creating a measure of social accountability, are dealing with a one step forwad, five steps back situation.
I think that any piece of writing that talks about poverty reduction in Pakistan needs to address the citizens voice, or its lack thereof, in the country. People have no say in the way services such as water, sanitation, health, and education, etc are being supplied to them. They have no way of fixing existing gaps or finding appropriate people to talk to about their issues. This is one of the reasons that poverty is perpetuated in the country.
The current emergency will further damage the budding social accountability movement. So this would be the five back-steps for the one that took us forward last couple of years, when projects that attempted to provide a voice to the citizens of Pakistan were initiated.
Mon, 11/05/2007 - 14:54
After reading one has to wonder, what does Shanta want us to take from this entry? Is he in favor of Musharraf government or believes that macro/micro/human development indicators would have done better with a democratic government?
While it is indeed very daring to read such a blog in a development site, the author’s argument, non-argument to be precise, fails to stand up to the reality.
The questions that should be answered are as follows:How did Musharrf run Pakistan do as compared to his predecessors - democratically elected leaders?
If the answer is better in all accounts except at the democracy front then does Pakistan benefit from a benevolent dictatorship?
How much of these macro indicators benefited from the billions that Pakistan had received for its alignment with the West on so called War on Terrorism?
If Pakistan did benefit because of these inflows, how did its economy do during 1999-2001?
Shanta picks one indicator, child mortality rate, to draw our attention to oncoming huge “human development deficit.” Is it really?
Thank you.
Mon, 11/05/2007 - 07:56
Why is it so difficult to foster scientific education in madrassas in Pakistan? Is it that these madrassas tightly controlled by fundamentalists and the government cannot impose their course syllabus in madrassas?
Also, is school enrollement a good indicator of human capital in a country? There are cases where school enrollement has increased for a year two. But after that drop outs rate have nullified the positive gain education. There must be something wrong in incentive mechanism that works in an economy, especially at the grass root levels. Simply trying to increase enrollement rates in our region is not going to produce intended results because the possibility of equally high drop out rate. Moreover, increasing enrollment will have a very weak correlation with the stock of usuable, high-end human capital because quality of education counts a lot. And it is evident what kind of education system we have in our region! What could be the best combination of policies that can increase enrollment rates, decrease drop outs, and enhance quality of education? A case in point is the conditional loan transfer programs in Brazil, Colombia, and Mexico. How effective would conditional load transfer programs in our region?
Regarding Pakistan and emergency rule, it should be noted that there is hardly any country which has benefited through such form of tight governance. We have seen it recently in Nepal, where real GDP per capital was in the negative terrain under dictatorial regime. Democracy and freedom are the best incentives to consumers, donors, investors and to all economic agents! I wonder how Hayek would have reacted to Musharaff's claim that he is doing this to save democracy!
Mon, 11/05/2007 - 14:08
Whatever aid Pakistan receives from the donars. Goes into the pockets of these officials. I have written many times to US and EU officials and pointed out these irregularities. I did not receive any response.
People want to change their lives. But the rulers wants to keep them in perpetual subjugation.
Mon, 11/05/2007 - 17:55
Shanta,
I must say that overall growth rate of a country doesn't make a lot of sense for the poor, ignorant and miserable folks. I am believer of overall rural economy growth which makes lot of difference to overall livelihood of poor living in rural and urban center in South Asian nation.
The development opportunities lies with the rural enterprizing and new opportunity linked with South Asian agrarian society. This is very unfortunate that people of connection at the upper strata has all the priviledges and immunities and the poor remain poorer. I donot see any recession due to post emergency era of Pakistan because it won't effect the growth regime of business and Industry.
Poverty reduction of South Asian nation ineeds a linkage of villages with better market system and new hi-tech cultivation methods. There is no need that every one should do the farming, there is a population shift is required to make village as a mini enetrprizing center may be creating ancilliary or agro-based industries.
Untill and unless we bring a hope to village, the paradox of rural and urban economic growth will exist.