Macro economic policies and reforms of ZULFIQAR ALI BHUTTO (19711977!INTRODUCTIONIn-equal distribution of wealth under Ayub reason behind success of BhuttoSocialist Ideology and emphasis on removal the inequalities and grievances of the urban/rural poorHuge support of poor and low income classBelieved in State-led growthREFORMS A series of reforms were introduced to achieve the obectives as given in party!s manifesto" #and reforms #abor reforms Industrial $ corporate reforms %conomic reforms order Ban&ing reforms Health reforms #aw reforms 'ivil service reforms PPP MANIFESTO IN 1967: (ur religion is Islam and democracy is our policy )oti* +apra and ,a&aanfor everyone in the country -Basic necessity. /ationali0ation of direct public related companiesLAND REFORMSLand reforms were n!rod"#ed !o:Brea& unfair concentration of wealth*)educe income disparities*Increase production* and)educe unemployment Accordingto Bhutto* to destroy the feudal landowners was a national necessity12e will not allow a few individuals to hold sway over enormous tracts of land34LAND REFORMS$ man fea!"reso5he individual holdings were restricted to 678 acres of irrigated and 988 acres of un-irrigated land o(rchards* livestoc& and game farms were no longer e:emptedo#and resumed from landowners under 6;7; reforms would not receive any compensation* and this land was to be distributed free to landless tenantso#andowners were allowed to retain an additional 78 acres above the ceiling if they invested in tractors and tube wellsLAND REFORMS$ man fea!"resoAll those peasants who had acquired land under the 6;7; reforms and had their dues outstanding* had their dues being written oa&istan- A?B>. became symptomatic of inustice and unequal treatmento#arge direct subsides on fertili0ers* pesticides and equipment to small farmers were giveno)eform was violated due to lea&age in implementation $ breaching the law by in@uential land lordsLAND REFORMS$ o"!#omes 5heBhuttoreformssuublic utilities $ power generationh. 5ransmission and distributioni. Gas $ oil re=neriesECONOMIC REFORMS ORDER>romulgated in Jan 6;CA removed the Bo? $ managing Agencies of A8 big industries3 #ater 66 industrial units were also added5o manage and control the ta&en over units* Board of Industrial ,anagement was constituted* which implemented the policy directives of the Government and had successfully put these industries on an even &eel3*AN7IN' REFORMS5he primary aim was to subect the commercial ban&s to a elaborate system of social control35hey aimed at bringing about equitable distribution of ban& credit and also ensure greater social accountability/ational 'redit 'onsultative 'ommittee was formed which formulated)s3 6*7K8m ban& credit plan for the private sector&EALT& REFORMS 5he most neglected sector /o health scheme could succeed because the common man did not have the means to meet the cost of drugs 5o achieve this goal ?rug act* 6;CA* was enacted which prohibited the manufacture and import of any drugs under brand names shift to generic drugs to avoid soaring prices of brand named medicines5he migration of doctors and nurses accelerated the decline in the physician population* which adversely in@uenced e. and introduced measures of Administrati"e #e$orm with the declared purpose of limiting the power of the bureaucracy3T2e 1978 reforms n#1"ded:Mni=cation of grading structure*Abolition of classes among servants* promotions* ob evaluation*Introduction of private sector individuals in speci=ed =elds* andA 'ommon 5raining >rogram -'5>. for all federal services3CI(IL SER(ICE REFORMS$ o"!#omes5hese reforms had positive and negative impact on the civil services of >a&istan35he ne+a!9e m%a#! istheimplementation of economic reforms without relying and involving bureaucrats caused civil service least interested in giving its best to the regime3 Hence* there always remain a gulf between Bhutto!s vision and actual outcome35he %os!9e m%a#! was the supremacy of the elected institution over the un-elected institution- the army and the bureaucracyCI(IL SER(ICE REFORMS O9er a11 !2e ne+a!9e m%a#! 1ooms 1ar+er"Niolation of merit*#ateral entry?ismissal of civil servants without due legal process*Mnwarranted political interference in postings and transfers3SOCIAL REFORMSBhutto!s socialistic reforms e:tended to the areas of education and health* with great implications for masses3Bhutto nationali0ed all the ed"#a!ona1 ns!!"!ons which adversely aa&istani )upee by 7K3CE - 5he e:change rate went from )s3 D3CK to a dollar to )s3 66 per MS O. ,onetary %:pansion Increase in Import 5ari>> rule was equal to the total borrowing in the previous A7 yearsPRI(ATE SECTOR PU*LIC SECTOR ?ue to nationali0ation the result was a drop of nearly 78 percent in private investment ?epend more on public sector 'on=dence eroded 5otal investment decreasing from 7639E in the Ayub years to 993BE in the Bhutto period3 %:panded greatly >lants and additional public companies were created ,anagers and technicians were scarce Set high minimum wages- increase in payroll cost 'orruption in the sector #ac& of accountability* mismanagement and bad governance prevailedDE(ALUATION OF RUPEE5hedevaluationwastheonlymeansof encouraginge:portsafterlossofthe%ast >a&istan ,ar&et/ewe:changerateservedasanincentive toremittheirearningsto>a&istanthrough proper ban&ing channels rather than hyundiIn ,ay 6;CA* >>> government abolished the multiplee:changeratesystemandthe >a&istani)upeewasdevaluedby7K3CE -5he e:change rate went from )s3 D3CK to a dollar to )s3 66 per MS O.3DE(ALUATION OF RUPEEAR'UMENT IN SUPPORT CRTICISIM 5oimprovethe agriculturaltermsof trade 5obooste:ports becauseoflossof %ast>a&istan!s mar&et Mnusti=eddevaluationon suchahighscalebecause domesticproductionof e:portablegoodscouldn!t beincreasedrapidlydueto the loss of %ast >a&istan ?evaluationincreasedthe cost of investment by about 696E Internalpricestructure adverselyaa&istan!s History -6;CK-CC. Mnavailability of loans* Suspension of foreign aid* Higher ta:es* Higher in@ation* And =scal de=cit* Increasing dependency on e:port and imports and on declining revenuesT#eend