zaidi, issues in pakistan's economy (2005)

(x): both the Ayub and Zia eras, high-growth though they were, confronted their internal contradictions in the popular movements that brought them down

(x): 'middle-class consolidation' [again, though, this is so nebulous as to be unhelpful]

(xi): important--two comprehensive IMF programs of 1988 and 1993-4 were agreed by caretaker gov'ts -- and had to be ratified by Bhutto's incoming gov't [Pakistan didn't need the first, he's noting]. Pakistan goes to the IMF because it is incapable of pushing through those structural reforms that the economy needs (due, explicitly, to its lack of autonomy from its own elites)

(2-3): Pakistan no longer an agricultural country

(4): Pakistan stopped being a feudal country after the Green Revolution of the 1960s, he's arguing--power has shifted from a so-called feudal class towards the urban and rural middle-classes [here, presumably, he means capitalists--"middle-classes" is just a catch-all]

(5): the windfall gains made by the mercantile class in the aftermath of the Korean war laid the groundwork for industrialization--but here, anyway, the State sector was very prominent

(5):important--Ayub's decade of development brought impressive growth in manufacturing, etc.; but no growth in real wages (this, he's saying, was entirely expected--"inherent, inbuilt, inevitable."). Reminding us, also, that this was not, at all, a 'liberal' period. Bureaucracy gave birth to the capitalist [this is not an example of autonomy, but the opposite, in effect]

(6): important--calling for re-evaluation of the Bhutto years--"the bad luck years" (economic loss of E. Pakistan, OPEC price increases and deterioration of balance of payments, worldwide recession, domestic cotton crop failures, nationalized sector did better than most believe)

(6): Zia's period was most liberal yet, brought on by remittances and aid in particular. private sector emerged in the stable post-Bhutto era.

(7): important--post-1988 period was an "era of structural adjustment" more than it was the rebirth of democracy. a blind adherence to Washington; "almost every decision of any consequence was predetermined by Washington" (main focus of fiscal deficit--expansion of indirect taxes, cuts to development expenditure, reduction in tariff rates, increasing in price of utilities, privatization, devaluation of the currency). All has resulted in a serious economic crisis.

(7): increased prices, devalued currency and higher taxes resulted in higher inflation [why would the IMF have wanted higher inflation?]

(8): Musharraf gov't on board with IMF agreements, as well (2001 agreement, for example)--but 9/11 gave him more fiscal space

(31): green revolution as elite-farmer strategy (for Burki, this is the middle-classes, who benefit; for Alavi, it was the large landowners). for both, GR does mean the entrenchment of capitalism in rural areas. [we can infer from this what we will]

(32): important--the 'structure of technology' and 'distribution of credit' reflected the influence of large landowners over public policy [i.e., State hardly autonomous in this regard]

(32): PPP prayed on the contradictions that the GR wrought in rural areas [analagous case to be made for the rural areas]

(33-34): important--Central Council of the Muslim League in 1947 consisted, in the main, of very large landowners (50% of those from Punjab; 60% of those from Sindh). Or, in 1953, won 90% of the seats in the provincial election in Sindh [important to think through this, for the nature of the State--this is a Milibandian style problem, where feudals staff the State apparatus of an aspiring capitalist State. Speaks also to the weakness of the elite's political roots, that they had to depend on landlords].

(34): All this ensured that land reforms were off the agenda during the early part of Pakistani history.

(34-35): question of the nature of Ayub's land reforms -- only Burki seems to think that it made inroads on power of the landed elite [remember Ayub had to lean on the ML for political support]. Damning verdict by Khan.

(36): and Bhutto's reforms weren't very different, of course, though the rhetoric was more radical (no compensation, for example)

(36): Zaidi ends by arguing that the daily work of capitalism may do some of the work of land reforms (small landholdings are emerging, etc.)

(51): tenancy and sharecropping have fallen drastically, both in the number of farms and in the area farmed.

(75): indirect taxes constitute 85% of the total revenues of the federal gov't

(73-75): the issue of the agricultural tax is clearly a testing ground for questions of fractions of capital, etc.

(76): rural elite has a disproportionate political influence, it is being argued [they are not feudal, but constitute an important fraction of the ruling class in Pakistan]

(77): Musharraf's gov't has said repeatedly that it was unwilling to embark on land reforms

(98): important--Ayub's regime pushed through limited 'liberalization' in 1959, which acted as a spurt to further growth, it is argued. this was made possible only because of an increase in the availability of foreign aid. this was set back in 1965, once foreign aid was curtailed and foreign exchange difficulties were encountered, as a result [question, here, of the importance of foreign aid in explaining gov't policy, then]

(99): b/c of the changed trade policies, none of the growth during the second five-year plan, it is being said here, was ISI.

(105): important--radical PPP manifesto, demanding nationalization of banking, insurance and of basic industries. the gov't pushed through labor and land reforms, devalued the rupee (which wiped away the subsidy to industrialists), increased procurement prices, abandoned EBS [evidence of significant autonomy, though limited]

(107): important--at the height of Bhutto's nationalizations, private sector investment had dropped to 15 per cent of its late 60's level [can be thought of as investment strike, or as simple crowding out?], public sector investment had become 75% of the total. "there is no doubt that the anti-industrialist policies..." were responsible. [partly, at least, an investment strike--revealing the limits to State autonomy, in short--"Bhutto had broken his promises"]

(111): since 1988, total capitulation to the IMF

(111-112): phenomenal growth rate of 6.5% (including real wages growing at 6.2%) from 1980-1988 (but productivity doesn't increase significantly, nor do employment opportunities)

(113-114): key--policy periods under Zia--first concern was to restore business confidence--denationalization of some agro-based industriees, and others, as well as further incentives given to the private sector, ease regulations, etc.

(114): story of the five-year plans

(116): important to note, though, that Zia couldn't demolish the public sector in toto (it employed 50,000 people, many firms were in the red)--handing this back to the private sector would have meant chaos. Zaidi making the additional point that it didn't want to alienate the middle-classes that had benefited from nationalization.

(116): nonetheless, public sector share of investment fell--from 72% in 1978-79 to 18 percent in 1988

(117): 1983-1988 was marked by further deregulation and liberalization--including the removal of the peg to the dollar in 1982

(118): the World Bank was particularly happy--the 'private sector's' share in total fixed investment increased to 42%, and to 83% in the manufacturing sector

(118-119): evaluation of the reasons for the high level of growth--for our purposes, it is important to note that all are agreed on renewed private sector confidence (we can say, quite clearly, that this was functional for capitalists).

(122-123): private investment as a percentage of GDP dropped through the 90s, so one wants to be careful in using this as an index of 'business confidence.' [this has to do, though, with the hiking of the interest rate--so maybe there is something to be said about financial capital? regardless--it would be foolish to read too much into this]

(146): Privatization really began under Nawaz Sharif, in November 1990, on the principle that the gov't should not be involved in the production of industrial goods--Bhutto had made noises, but not much progress was made.

(147): why privatization? partly to raise revenue. partly also to stimulate private investment in the economy [here, then, is a clear example of the limits to the autonomy of a State operating in capitalism--nationalizations induce wariness in the private sector]

(148): corruption in the selling process

(242): IMF/World Bank fuzziness on Pakistan's fiscal deficit

(244, 247): while Ayub was in power, development spending exceeded defence expenditure; with the democratic interregnum, this was decisively reversed! [at the very least, this offers little evidence for 'institutional' arguments--or that institutional argument that suggests the military intervenes in order to give itself a bigger piece of the pie]

(245): debt crisis was particularly acute when Musharraf first took over--this has eased, since, giving the State some fiscal space

(247): the interest rate was allowed to soar in the late 90s (up to 20% under Moeen Qureshi!), which obviously had the effect of exacerbating the debt problem (promoted low growth, etc.)

(247): damning facts about development and defence spending--almost all the increase in interest payments came at the expense of development spending.

(293): inflation is low in the 80s, high in the 90s (this is where IMF/WB see a problem to be solved)

(297-298): inflation has not been connected, empirically, to the money supply in Pakistan's history

(344): again, decline in private gross fixed capital formation in the 90's -- capitalists investing less, despite SAP.

(345): Bhutto tried to discontinue a standby loan, but was forced to go back to the IMF for a loan a few months later. Sharif came in and willingly pursued reforms they would like--and then in October 1997 became the first elected gov't to make a new agreement with them. Gen Musharraf has continued the proud tradition.

(365-367): the debt crisis that plagued Pakistan through the 90s was resolved by 2002ish. how? Thanks largely to phenomenal rescheduling of debt in December 2001, as payback to Musharraf for backing the WoT.

(368-369): what is the implication for Th. of the State, that relation with the US has been a key determinant of the ease with which the State gets credit?

(369): remittances rose in the 80s, fell in the 90s, rose dramatically after 9/11 (enormous explosion from the US, in particular)

(491): democratic regimes more likely to receive aid from abroad

(491): arguing that the 'threat' of India is critical for the military's continued survival--this is the reason the peace process doesn't move forward (example, here, of independent interest, qua institution)

(500): policy in the first decade geared toward industrialists--not toward landlords

(502): Bhutto antagonized capital

(502): [again, ludicrous arguments here about the middle-classes backing and then turning on Bhutto]

(503): main reason that Zia had a trouble-free decade was massive remittances from abroad ($20 billion over the decade)

(503): three local body elections, under Zia: 1979, 1983, and 1987

(504): Bhutto, even when she first came to gov't in 1988, had to agree to an IMF package that was signed hours before her accession.

(506): a 'middle-class revolution' [but this is all fly-by observation--not rigorous, at all]

(506): a decline in the importance of the 'national question'?