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Old Tuesday, May 22, 2007
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Punjab’s Rich Inheritance

By Shahid Javed Burki

IN the first article of what I would like to call “the provincial series”, I suggested that the next big move in the development of the Pakistani economy must come from the provinces. For this to happen, Islamabad must grant greater autonomy in economic decision making to the provincial capitals, and the provinces, in turn, must permit greater space to the newly created local administrations.

These moves are needed to bring the government closer to the people and make it more accountable to the citizenry. No new laws and rules are required. The Constitution has provided for a reasonable amount of provincial autonomy and the Local Government Act of 2001 has provisions for transferring authority to local bodies to raise resources for economic development. What is missing is the political will to carry out the intent behind these constitutional and legal provisions.

Change is always difficult, especially in societies that have weak institutional foundations. It is resisted by those who see advantages for themselves in the maintenance of the status quo.
What I found particularly impressive was the move the administration has made from managing finance and development in a passive way to defining medium-term frameworks for development and fitting finance into it. This allows the provincial government to look at some of its financial liabilities in the context of development needs and plan for dealing with them.

Among those the administration is actively dealing with are pension and GP fund liabilities. The approach it is adopting will not only reduce the burden the government currently carries but it will also deepen the financial markets by creating new instruments of finance.

I have ideas for the 13-year period between now and 2020 which is the end point for the government’s programme. My vision factors in the province’s inheritance, its history since the partition of the province in 1947, and its endowments to a greater extent than the official approach. I will begin by discussing the province’s rich inheritance.

History is important not only to understand the past but also to prepare for the future. In focusing on some aspects of Punjab’s history — recent history, not history of the distant past — I will highlight only those aspects that have relevance for the present and are pertinent for discussing the future.

Several of these are important. They include the province’s demographic inheritance, skill endowments of some of its people, its irrigation system and the agriculture it supports, its system of governance, and the trading ties it once had with areas that are now part of India. Since these legacies will have a significant impact on the future development of the province, it is my suggestion that in designing public policy those responsible for taking decisions should remain fully cognisant of them.

The first of these legacies is concerned with demography — the movement of people into the province and from the province into many parts of the world. Punjab was formed by many waves of migration. These movements of people have a great deal to do with the character of the people who are now the citizens of the province; in particular with the way they view economic and social opportunities.

The two migrations that matter the most for today’s Punjab occurred at the mid-point of the British rule of the province and at the very end of the century-long colonial domination of the province. The first brought tens of thousands of small farmers from the eastern part of the provinces — the parts that are now the Indian states of Punjab and Haryana — to “colonise” the land the British had prepared for cultivation by bringing water for irrigation from the Indus River system.

One consequence of this wave of migration was to juxtapose small and medium scale farming with the large farms that were then common in the province. This positioning of small and medium farms alongside large farms is both a reason for the underdevelopment of the important sector of agriculture as well as the reason for hope for the future. I will return to this point later in this series of articles.

The second wave of migration was much larger and much more significant than the one before. It brought, by my estimate, millions of refugees from east Punjab to west Punjab after the British decided to leave their Indian empire in the hands of the successor states of India and Pakistan. It is possible to estimate the number of people involved in this wave of migration by using censuses for 1941 and 1951 for the various provinces of India and Pakistan.

I estimate that while five million people left Pakistan for India, about the same number of people came to Pakistan’s Punjab from India. In the late 1940s, more than one-quarter of Punjab’s population of about 19 million was made up of refugees. These refugees were settled in both the urban areas and the countryside. They brought with them skill sets and social and cultural outlook that were different from those that were prevalent in the province before it became a part of Pakistan.

While the question of the influence this migration had on Punjab’s social and cultural development is a subject for sociologists and anthropologists, it has also relevance for economists and for the economy. Much of the economic dynamism that has become the defining part of Punjab’s urban landscape — in particular of the dozens of small towns that straddle the roads connecting Lahore with Gujarat in one direction and Lahore with Faisalabad and Sahiwal in the other — is largely the consequence of the enterprise of the people who came from the eastern parts of the province and settled in these towns.

They were given the businesses, lands and houses the Hindus and Sikhs had left behind. They could have made greater contribution to the economy’s growth and to the direction of social change had the policymakers better understood their potential. The province’s second legacy, therefore, is the direct outcome of the wave of migration that accompanied the partition of Punjab in 1947.

In an article published several years ago in “Asian Survey”, a journal of the University of California, I suggested that the green revolution that brought considerable prosperity to some parts of the Punjab would not have been possible had it not been supported by the remarkable engineering skills on display in the province’s many small towns.

These towns supported the development of the tubewell technology and the mechanisation of agriculture, two of the many developments associated with the green revolution that brought profound economic and social change to Punjab’s countryside. It was these skills that were behind the remarkable development of the electric fan industry in the towns of Gujranwala and Gujarat. This industry later became the foundation of the electric appliances industry in the area which flourished before it was hit by competition from China.

A senior official from Islamabad, while speaking at the Punjab Development Forum the other day, told his audience that the Chinese had agreed to set up an industrial zone near Lahore of the type that energised China’s east coast and made it the work horse of the world’s industrial production system. Much of the consumer electronic goods sold in the West these days are made in the industrial zones strung along the eastern coast of China from the city of Dalian in the north to Shenzen in the south.

He said that that was the first time the Chinese were setting up such a zone outside their country and if the one in the vicinity of Lahore succeeds, they may repeat the experiment in other parts of the world, possibly also in Pakistan. He did not reveal what kind of industries will be established in this estate.

If the agreement with China allows Pakistan and the province of Punjab to influence what kind of enterprises get located in this zone, then it would be useful to build on the skills already available and the experience gained by the industries that are already operating in the area. The engineering skills that are available to the province need to be more fully exploited as a resource.

By focusing on two of Punjab’s legacies — the fact that this province was formed by people constantly on the move and that one set of the citizenry when it came to this province brought extraordinary engineering skills with it — the provincial government could accelerate the rate of economic growth and social change.

I have tried to illustrate how good knowledge of inheritance can make a difference to the content of public policy by suggesting that the engineering skills possessed by a segment of the population could underpin the development of a vibrant manufacturing sector.

Edited version from Dawn by Yasser
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