Political parties and economic policymaking
By Shahid Javed Burki
Published: February 13, 2012
At this stage in our political development it is useful to provide a brief overview of the structure of politics and identify a number of divergent interests that are embedded in today’s political system. They will have to be reconciled in order to formulate a coherent set of policies aimed at finding appropriate solutions to the many economic problems the country currently faces. At play are half a dozen political interests each of which is represented either by political parties or by people’s movements. I will begin with the political parties and the ideologies they represent.
The two major political parties — the Pakistan People’s Party (PPP) and the Pakistan Muslim League (N) (PML-N) are committed to a significant presence of private enterprise in managing the economy. For the PPP, this is a major departure from the days of its founding. In the ‘foundation documents’ issued in 1967 and 1968 when the party was developing its approach to economic management, it adopted an economic ideology described as ‘Islamic socialism’. The Islamic part of the slogan was mostly for optical purposes; it had little relevance for policymaking once the party gained power. But the party was serious about socialism. Once in power, the party went ahead and expropriated a significant part of the privately owned economic assets.
The PML-N on the other hand inherited the private sector orientation of the original party. Under Muhammad Ali Jinnah, the long-serving president of the party and the founding father of the state of Pakistan, there was a strong preference for encouraging private entrepreneurship. Being a member of the trading community, private enterprise and private initiative were in Jinnah’s DNA. In fact, once the British had agreed to create Pakistan, Jinnah encouraged some of the well-established business houses to move from India to Pakistan. Among them was the Habib family. Under Nawaz Sharif the party has simply reverted to its original preferences.
While it is helpful that the two mainstream political parties are no longer far apart in their economic preferences, there is major difference in the way they look at governance. That said, I would argue that the PPP has been less concerned than PML-N about the appropriateness of using government finance for personal use or for the benefit of the constituencies that support it. The League’s traditions go back to the days of Jinnah and Liaquat Ali Khan. The former was a rich man before he assumed the reins of power in Muslim politics. He did not add to his wealth when he became Pakistan’s chief executive and gave much of it away when he died. Liaquat Ali Khan, who stepped in his shoes, is said to have died a near-pauper. Several other leaders of early Pakistan, Iskander Mirza and General Yahya Khan among them did not have large assets on which they could live after they left office.
Moving down from the national to the subnational parties, the economic interests of the MQM, and ANP, are focused on bettering the economic interests of the communities they represent. The former has been more diligent in pursuing the economic interests of its constituents. The latter, while representing the Pashtun communities of the province of Khyber-Pakhtunkhwa (K-P), has been less active. Given their support base, both parties are in favour of putting more power in the hands of the provinces. The MQM would like to go a step further since its political and economic interests are not entirely served by devolving power to the provinces. It would like to see authority devolve to local government institutions since its power base is concentrated in Sindh provinces large cities of the province of Sindh. While the MQM has been more successful in working for the welfare of its constituencies, the ANP’s record is much less attractive in this context.
There are also several regional parties operating in Balochistan. Most of these are convinced that the federal government has not acted to promote the development of this large and resource-rich province. Dominated by tribal leaders, the sociocultural attributes of this province are different from those of K-P, the other small province in the Pakistani federation. Even when an attempt was made to provide financial compensation to the province for the exploitation of its ample mineral wealth for national use, much of this amount was expropriated by the powerful tribal maaliks and very little trickled down to the very poor. Even when the distribution of income is deteriorating in the country as a whole, it is getting even worse in this province. Given Balochistan’s geopolitical position, with long borders with Afghanistan and Iran, and with Pakistan’s longest coast line, it is not surprising that there is growing foreign interest in the area. Some of the smaller political parties operating in the province are reported to be receiving foreign funding.
For a country in which Islam, in particular its extremist version, has become such a visible and often destructive force, parties functioning in the domain of religion have had little political consequence. Islamic groups in the country can be divided into two categories. There are those like the Jamaat-e-Islami and Jamiatul-Islam that have always functioned in the formal political space, accepting the norms of political behaviour. It was only when they coalesced and came under one banner as they did when they created a coalition called the Muttahida Majlis-e-Amal that they became influential in the policymaking arena. More often than not, they operated from the margins of the political space. However, political organisations such as the Lashkar-e-Taiba have a very different political agenda — a radical make-up of the Pakistani society and its political and economic aspects. They are willing to resort to the use of violence rather than operate within the political system.
Reflecting all these divergent political interests in shaping a common approach to formulating economic policy will require clever and dedicated leadership. This is not present on the scene at this stage. The next set of elections may bring a new group of people into the political space and put them in policymaking positions to rescue the country out of its difficult economic situation. Until then, Pakistan will have to muddle along, costing a great deal in terms of lost growth and increased levels of poverty.
Source: Political parties and Economic Policy Making