Paradox of Development in Pakistan

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EPW Book Review August 31, 2002
Paradox of Development
Issues in Pakistan's Economy by S Akbar Zaidi; Oxford University Press, Karachi, 1999; pp 462, Rs 595.
Mahmood Hasan Khan
Akbar Zaidi has done himself great credit by giving us this book. For one thing, it is so different from almost all others written on this topic in terms of its scope, treatment of each major theme and the author’s style. It reflects the author’s commitment, critical mind and hard work. The book has a large canvas – with rich data and critical review of literature – and the author’s engagingly provocative style should tease most minds in the right way. I am sure it will attract the attention of researchers, academics and policy-makers alike. I would love to see it used in classrooms at the graduate (MA) level in all Pakistani universities. The book is divided into six parts, each of which focuses on a major theme, including agriculture, industry and trade, fiscal and monetary policies, structural adjustment programmes, social sectors and governance and political economics. Each of these themes, except the last one, is discussed in two to four chapters. Each chapter has a mass of relevant data supplemented by appendices that contain authoritative but competing opinions on important and controversial issues. They are based on a comprehensive review of literature and reflect the author’s concern with intellectual pluralism. The bibliography and index at the end should be helpful to the reader for further reading and research. The somewhat esoteric discourse on whether Pakistan’s agriculture (or economy) is ‘feudal’ or ‘capitalist’ is perhaps not as valuable as its sources of (erratic) growth and its beneficiaries. There is no harm in using the term feudal (‘darbari’) as a cultural metaphor for Pakistani society since it is ruled by men and not laws. The important point is that the agrarian structure in Pakistan has undergone significant changes in the last 40 years. The author has identified rightly the major sources of agricultural growth – I wish he had used the total factory productivity approach – but without linking its effects on the well-being of different groups (classes) in rural areas. In this he may have been constrained by lack of good statistics and facts on changes in land ownership, tenancy, etc. Zaidi has, however, provided rich and well-argued evidence of wrongly directed public policy and its bad effects on agricultural growth and equity. In the four chapters on industry and trade, the author has quite persuasively argued, with supporting evidence, that conventional wisdom about the structure of industrial growth in Pakistan should be regarded with great scepticism if not entirely rejected. However, his treatment of the trade issues leaves the reader unsatisfied since he does not explain well the failure of successive governments to adopt the right mix of policies to improve the balance of payments, diversify exports, provide more competitive environment for import substitutes and attract foreign investment. The author’s treatment of fiscal and monetary issues – covered in chapters 10 to 13 – is as vast in scope and it is provocatively ingenious. He is unconventional in his view of budget deficit and causes of inflation, leaving much room for controversy and debate. The chapter on resource mobilisation (chapter 10) is by far the best in this part of the book since it has voluminous data and information and focuses on some of the central issues of fiscal governance in Pakistan. It clearly exposes serious flaws in the tax system and its administration as well as in the distribution of government revenues between provinces and different levels of governments. In Part four of the book, Akbar Zaidi has presented a critical review of the structural adjustment programmes in general and in the context of Pakistan since 1988. He is highly sceptical of the standard (neo-classical) approach implied in these programmes by the International Monetary Fund (IMF) and World Bank. Undoubtedly these programmes are controversial both in their design and effects. But a large part of the blame should be placed with the political elite in underdeveloped countries. In the case of Pakistan, a knowledgeable reader would agree with him that successive governments since the early 1980s – not merely from 1988 – have used these programmes to borrow and spend with little to show in return in terms of improved economic performance and people’s well-being. I do not think that Pakistan ‘presents a development paradox’ unless one assumes that economic growth and social development must always go together. I prefer to call Pakistan’s experience as distorted development as indeed has been the case in many other countries. This part of the book, comprising three chapters, has too many very interesting and important issues but compressed without detailed and critical analysis. I wish Zaidi had focused on three issues separately: poverty and inequalities (income, gender and regional); depletion of and degradation of resources and the environment; and investment in and quality of social sectors (education, health, housing, etc). I hope in the next edition of the book he will give more space and conduct a deeper analysis of these issues since they lie at the core of sustainable development. The last part of the book covers probably the most important issue in economic development: the structure (elite and institutions) and use of political and economic power (governance) for economic development. Zaidi will probably agree that much more needs to be done to do justice to this important issue than he has been able to cover in one relatively brief chapter. I would have liked to see the analysis include (a) the society’s order and its elite and (b) institutions of governance, including the government (civil and military bureaucracy and judiciary), profit-making organisations (businesses) and non-profit organisations (civil society). I can conclude with three comments. First, I have learned much from this book in terms of both facts and perspectives. Second, I am so pleased that Oxford University Press has published it in paperback and without many typos, etc. My hope is that it is reasonably priced for Pakistani readers, particularly students. Finally, I hope that Akbar Zaidi can come back with a revised edition of the book every two to three years.