THEME

A stable socio-political and economic order, strong national

institutions together with selfless and able leadership are the main

pillars of effective governance. The quality of governance in a

country is reflected by the national cohesion and the freedom enjoyed

by the masses in various spheres of activity. Besides this, the

domestic stability also establishes the respect and credibility of a

country among the comity of nations.

Ever since the independence of Pakistan, our national scene

has been dominated by leadership crisis, political disharmony and

economic mismanagement, thereby seriously affecting the National

pride and cohesion. The inability of the leadership to circumvent the

persistent ills, speaks not only of the weak governance but also the

lack of resolve and capacity of the leadership to check the down ward

trends.

Foregoing in view, analyse the causes of weak governance in

Pakistan with a view to proposing a viable strategy to improve the

system of governance in the Country.

THESIS STATEMENT

Pakistan is gifted with tremendous resources which

unfortunately could not be harnessed primarily due to inept political

leadership characterized by self centered approach and weak

governance. Institutionalizing the political order with effective judiciary

steered by selfless and capable government can rescue the country

out of the crisis.

CHAPTER – I

INTRODUCTION

1. Governance, being a dynamic concept, can mean different things to

different people depending upon the vantage point from which you see it. For

instance for a common man it means the equality and rule of law, security and

stability, participatory form of government. To the decision-making elite,

governance is about the ability to exercise authority and enjoy legitimacy. Then

there is also a temporal dimension. For instance at a given point of time,

governance could concentrate only on maintenance of law and order function

and other more peaceful times, the demand might be for taking up welfare

activities. Thus the term 'governance' changes with time, space, context and the

referent object. It is an Omnibus concept that includes processes like interest

jockeying, grievance redressal, resource allocation, practices like norm setting,

rule making relationships between the state and civil society, ruler and the ruled

and structures like government, police, civil society, extra-governmental

organizations. It is important here to state that there exists a symbiotic

relationship between governance and security, which form the twin pillars on

which the state edifice stands. If one collapses the other cannot and will not

remain unaffected. For instance if governance fails, security cannot remain

unaffected. Similarly, when security is imperiled, one can invariably trace its roots

to governance.

3. “Government & Governance” are the two words which are often used

interchangeably, which is incorrect, because, governance does not mean just

government. Government is just a part of the entire process of governance,

though an important part but not the only one part, there are other agencies

involved like the State and the Civil Society. Government is the agency through

which the act governance is carried out. Government is the negotiating agency –

at best it can be termed as the 'captain of the ship'.

4. The process of governance in Pakistan has been flawed in many

respects– a centralized rule, weak political institutions, widespread corruption

and lacking in a tradition of political accountability. The implications have been

far reaching for the political-economic system. Bureaucrats, military and feudal

leaders continue to seek to control the political and economic institutions and

with the avowed purpose of governing the nation. Their attempts to seize and

hold power fails to recognize and establish the traditions of democracy and they

have paid very little attention to achieving peoples’ participation in national

decision making. This pattern of governance has seriously compromised the

principles on which the effective functioning of national institutions, formulation

and implementation of policies, quality of economic structures, and the

impartiality of the legal system depends.

5. Political intrigues and attempts at self-aggrandizement began with the

birth of Pakistan and paved the way for interventions in the political process.

After a decade of misrule prompted by many bureaucratic interventions, the

army, in the name of saving the country, declared the first martial law in 1958,

cancelled national elections and abrogated the constitution. The hallmark of this

new regime was the attempt to manipulate basic democracy. This attempt failed.

Yet another military regime came to power in 1969 and held the first and the last

free and fair election in 1970. Unfortunately it deemed the results unsatisfactory

and refused to transfer power to the properly elected representatives of the

people.

6. The elected successor government which assumed power in 1972 in the

wake of the national debacle of December 1971, tried to pursue populist policies.

It promised its people freedom and paved the way for still another period of

martial law. Another military regime overthrew the government elected in 1977

first suspending and later amending the 1973 constitution. The legacy of this

regime was a misuse of religion, mismanagement of the economy and the gross

violation of human rights. Moreover, under this regime many excesses took place

during attempts to silence political dissent.

7. Starting in 1988, the next two so-called democratic governments have

taken economic corruption to new heights. This new breed of leadership

emerging from a younger generation proved even more incompetent in

attempting to serve public interest and often indulged in mimicking the lifestyle of

the “rich and famous” as seen on western television. One government made

headlines in The New York Times on January 9, 1998 for leaving a trail of

corruption extending across the world while the other had become famous for its

financial scandals (The New York Times, 8 January 1998).

8. There has been systematic pattern of undermining of the existing political

and economic institutions-democratic system, constitution, judiciary, commercial

banking, labor unions, small business and small farm owners in particular. The

democratic system has not been given a chance to function. The constitution has

been tampered with so as to serve the needs of each successive ruler. The

judiciary has been seriously weakened. The banking sector after having been

nationalized is being used for politically driven loans, which are often non-

performing. Only big business and large-scale industry have received generous

support by the government in subsidies, tax relief, licensing privileges and

cheaper investment financing. Small businesses are left on their own. Labor

unions have been kept weak. Policies that led to declining real wages have

seldom been reviewed. Agriculture has remained subject to unfavorable pricing,

disinvestments, and an out-dated land tenure system. In the absence of real land

reforms rural life remains in tight feudal grip and remains the victim of share-

cropping. Economic institutions that underwrite and promote popular welfare

have come under frequent assault. Official irregularities in economic areas have

been rather widespread.

9. Corruption and bribery have become institutionalized and accepted as a

way of life in the Country. Economic policies and political activities are tied up in

a cycle, which evolves around the corrupt system of licenses, controls,

government approval for investments, imports, exports, employment, land

purchase, hiring and dismissals, and virtually every other aspect of economic

activity. Pervasive corruption greases the wheels of civil service at local state and

federal levels, and industry and commerce are badly affected by it. Red tape,

abuse of authority for personal gain, and widespread bribes undermine economic

efficiency. In the absence of a credible process of accountability and in total

disregard of adherence to minimum standards of economic management and

efficiency, public money is spent on projects, which have little social or economic

value. This culture of corruption discourages an inflow of foreign direct

investment (FDI).

10. Project-based development in Pakistan has adversely affected the

economy. The economic landscape is full of distortions and dislocation. It has

deprived the nation and its people of basic necessities. The existence of excess

capacity in industry and the concomitant shortfall in essential raw materials and

spare parts has increased the costs for private investors.

CHAPTER-2

DEMOCRACY AND GOVERNANCE IN PAKISTAN’S FRAGMENTED

SOCIETY

11. Democratic institutions, indeed, failed to function effectively and to take

root in Pakistan. Recent re-imposition of the military regime solicited little protests

from Pakistani citizens. This chapter will examine Pakistan’s democratic

experiment in the framework of governance defined as the process of exercising

power in the pursuit of common goals. Legitimacy, institutions and performance

are the three major elements in governance process. Legitimacy refers to the

consent of the governed and the rule of law. Institutions include deliberately

created legal frameworks, laws, legislatures, executives and judiciary. Informal

institutions emerge through practice, including unwritten conventions, values,

norms and ideologies. Effective governance requires congruence between the

formal and informal institutions. Performance refers to the accomplishment of

common objectives and judicious use and allocation of public resources. Good

governance assumes the existence of democratic institutions. Governance

occurs in a context and environment that not only shapes the process but over

time it is shaped by it. The civil society and the market institutions provide the

large part of the environment.

12. Elections and Legitimacy. Despite frequent recourse to martial law,

Pakistanis still regard the elections as the primary source of legitimacy. Pakistan

held four general elections during 1988-1999. The legitimacy they conferred on

victorious governments is a function of peoples’ participation in elections and

their perception about the fairness of the electoral process. The 1970 election

attained the highest turnout (64%) in Pakistan’s history. Since then the turnout

has spiraled downward, which is consistent in all the four provinces of Pakistan.

Evidently people have become cynical about the validity and utility of elections.

Elected governments have performed poorly and they have failed to live up to the

peoples’ expectations. Popular perception is that the democratic governments

are corrupt, wasteful, and inefficient. It is becoming clear that the people do not

feel that the ballot box is a sufficient condition for legitimacy. Four successive

elections tended to return many of the same discredited politicians time and

again. Three of the four elections resulted in weak coalition governments at the

Center. At the provincial level, elections resulted in either bickering coalitions or

strong government of a rival faction, leading to bitter center –province rivalry.

13. Executive: The Power Struggles. The country has never seen a

smooth transfer of power. Only two out of the 11 heads of the state since 1947

managed to complete their constitutional terms. Out of Pakistan’s 16 Prime

Ministers, only three of were elected. Ironically only Zulfiqar Ali Bhutto managed

to complete his term. In Pakistan’s early history, under an adapted vice-regal

system, the military and senior bureaucracy established the tradition of

supporting the Governor General or President. Prime Ministers were hired and

fired at whim. The 1973 Constitution postulated parliamentary form of

government, in which the president was intended to be a figurehead. A rubber

stamp Parliament under General Zia approved the Constitution (Eighth

Amendment) Bill 1985. The amendment gave the President the power to dissolve

the legislatures and provided a safeguard for army’s institutional interests. It not

only created an ambiguity in executive powers, but also bound the hands of the

Prime Minister. The 1988 transfer of power to the newly elected Peoples Party of

Pakistan (PPP) was conditional on a tacit agreement that the important decisions

were to be taken jointly by the Prime Minister, the President and the Chief of the

Army Staff (COAS). The basic parameters of foreign policy would remain intact.

The Acting President, Ghulam Ishaque Khan, would be elected the President. He

had successfully served two military regimes in the past. This unstable Troika

and the 8 th amendment set the stage for an insidious power struggle between

the President and the PM and the COAS. The Prime Ministers felt it necessary to

have control over the appointments of the COAS, Chairman of the Joint Chiefs of

Staff Committee (CJCSC) and the head of the Inter Services Intelligence

Directorate (ISI) to govern effectively. They believed that as the elected

representative of the people, they should be the appointing authority. Three

governments were successively sacked by the President on the charges of

corruption and misuse of power. The 1973 constitution of Pakistan copied the

British system, where all executive power is vested in the Monarch. The exercise

of this power, however, is subject to the advice of the Prime Minister, the political

head of the elected government. The Heads of the state in the Anglo Saxon

countries of the Commonwealth never complain about being kept out of the

political arena. This, however, is the result of the evolution of centuries of

tradition. Not only such traditions failed to emerge in post-colonial Pakistan, but

also Pakistani leadership established the opposite tradition. The written

constitution compromised the parliamentary tradition by providing discretionary

powers to the President. During Zia regime, the presidency had acquired a

pivotal position. The parliamentary and democratic norms had to be recreated.

The administrative chaos and ethnic strife that accompanied the democratic

change created an environment that was not conducive to creating such norms

and institution building.

14. Rubberstamp Legislature. The legislatures have traditionally played

minimal role in country’s governance. During 1948-58, they were dismissed at

executive’s whim. Ali Bhutto’s government assigned a limited role to the

legislature. He was used extensive patronage and coercion to control and

manipulate the legislators. Zia regime created a dummy legislature to emasculate

the 1973 Constitution and concentrate power in the office of the president. During

1988-1999, National Assembly was dissolved three times by the President and a

fourth time by a coup d’état. Repeated dissolution of elected legislatures eroded

their prestige. It created cynicism about the significance and power of the

institution. Parliament devoted little time to lawmaking. The governments ruled by

ordinance rather than by laws. Governments abused their power to issue

ordinances for a period of four months. Despite the Supreme Court ruling to the

contrary, the ordinances were blatantly re-promulgated. The notion of executive

accountability to the legislature, the corner stone of parliamentary government,

was destroyed. The Ministers and MNAs often used public funds for patronage.

The defense budget was presented as a line item and the Parliament refrained

from any discussion. The members of the Provincial and National Assemblies

(MPAs,MNAs) completely ignored the distinction between the legitimate service

to their constituents and illegitimate favors for their cronies.

15. Judiciary: The Creature of The Executive. By and large the judicial

structure left by the British still remains intact. Its norms, values and ethos have

undergone a radical change. In Pakistan’s conflict ridden polity, bitterly

contentious issues between political actors have frequently resulted in judicial

recourse. The failure of a weak political system to resolve these issues placed a

heavy burden on the superior judiciary. It introduced partisan politics into the

hallowed halls of the higher courts. Pakistani State’s penchant to use military and

Islam has led to the creation of parallel systems of judicial institutions. The latter

have constantly posed a challenge to the legitimacy and authority of the courts.

Pakistani Judges have tried to match their constitutional ideals and legal

language to the exigencies of the current politics. Their judgments have often

supported the government of the day. Early in its history, the Federal, later

Supreme Court created the ‘doctrine of necessity’ and ‘revolutionary legality’ to

justify the executive’s illegal dissolution of the Constitutional Assembly,

abrogation of the constitution and imposition of martial law. It declared military

intervention to be necessary and validated all actions pursuant to the military

take over, thus providing General Zia the legal basis to amend the constitution.

During the military regimes, politicians viewed the judiciary as the protector of

their rights. During the democratic decade the relations between the elected

Prime Ministers and the superior Judiciary were marked by constant conflict. Ms.

Bhutto’s relations with superior judiciary remained severely strained, particularly

in the second term. The superior judiciary endorsed the president’s decision to

dismiss the Prime Minister. Appointment of judges, often on the basis of

patronage and transfer of ‘uncooperative’ judges were the root cause of the

conflict. The apex court’s landmark ruling popularly known as the judges case

practically took away the PM’s power to appoint judges, thus ending the practice

of appointing temporary judges, acting Chief Justices and transferring judges.

Government publicly ridiculed the judiciary and even tried to intimidate the Chief

Justice. Ignoring the advice of the Chief Justice and the Law Commission, Sahrif

bulldozed his Anti Terrorism Act through the Parliament. He tried to block the

Chief Justice’s elevation of five judges to the Supreme Court by reducing the

total number of judges on the bench. The conflict resulted in a public rift in the

bench for the first time in country’s history. The Chief Justice went out of his way

to entertain any petition against the government. The PM led an unprecedented

campaign against the judiciary in the Parliament and the media. The Chief

Justice retaliated with a writ against the PM for contempt of court. Prime

Minister’s party mobbed the court chambers and interrupted the contempt

porceeding. The conflict escalated to a level that there were virtually two

governments under the President and the Prime Minister and two apex courts

issuing notifications countering each other. The conflict ended with the

resignation of the president and the Chief Justice. By now the President’s power

to dissolve the legislature had been taken away by a constitutional amendment in

1997. Many eminent lawyers and judges believe that the ordinary litigants have

lost faith in the legal system and are clamoring for justice to be carried out in the

streets rather than in the courts. Judiciary in Pakistan has rarely stood up to

defend the constitution and the rule of law. The appointment of judges at all

levels is tainted with nepotism and favoritism. Provincial governments remained

reluctant to separate the lower level judiciary from the executive because it gives

the administration a great deal of power. The lack of separation seriously

compromises the independence of lower courts and erodes the police

accountability. Traditionally magistracy and police have enjoyed a close working

relationship. This often works against the public interest. Magistrates tend to

favor the demands of the police in matters of bail and remand. The provincial

governments and politicians for their political ends have readily manipulated the

magistracy. Successive governments have used the police for harassing

opponents and winning elections. The 1973 Constitution had provided that the

judiciary and executive at the lower level are separated within 5 years. The

implementation of this directive was repeatedly postponed despite a government

decision in 1996 separation remains incomplete. Case disposal data indicate a

better disposal rate in Pakistan than other south Asian countries. Many legal

experts believe that the case disposal remains slow. In November 1997, Lahore

High court alone had 65,000 pending cases.

16. Political Culture. The institution of “Her Majesty’s Loyal Opposition”

remains unknown in Pakistan. Military regimes have destroyed the institution of

democratic opposition. Jailing and torturing of political opponents was

commonplace even under democratic regimes. The opposition did not recognize

the legitimacy of the party in power to govern. Election victories were rarely

conceded. The opposition would go to extremes to discredit the government and

was too impatient to wait for the incumbents to complete their term of office.

Instead of dialogue in the parliament, the opposition often took its issues the

courts or the streets. The ruling parties traditionally dealt harshly with the street

agitation. Most political parties do not have grassroots organization. Neither do

they hold regular elections to choose their officials. Even when elections are

held, they are unopposed. Leadership tends to be dynastic. Factionalism often

based on lineage or caste is commonplace. The governments were run by the

well-known kitchen cabinets – a coterie of non-elected and unaccountable

sycophants. The support base for most of the political parties remains narrow

and regional. Major political parties tend to be associated with one dominating

ethnic group. Some political parties are more like ethnic movements rather than

political parties. Ascriptive divisions characterized the political process and inhibit

political integration.

7. The Civil Society. The civil society is the network of ties and groups

through which people connect and are drawn into community and political affairs.

The number of NGOs is considered a good proxy for the degree of civic

engagement and good governance.39 Estimated number of NGOs in Pakistan

stands at about 10,000. Relative to its South Asian neighbors, Pakistan has the

lowest number of number of NGOs. Pakistan’s Civil Society reflects its ethnic and

religious fragmentation. It reflects the division between the traditional and modern

segments of society. Ironically a large number of Pakistan’s modern and

traditional NGOs owe their emergence to the Afghan war during the 1980s. The

“other” civil society in Pakistan works in the vernacular mode. Their leadership is

indigenous and from the grassroots. They have no linkages with the western

foreign aid donors. They do appear to have a broader base of support and

networks in the lower and lower-middle classes. Most of them are religious and

based in mosques and madrassahs. Some of them are sectarian and violent

militia-like organizations. The activities of the latter often verge on terrorism – in

the name of religion. Some allegedly are fronts for criminal organizations. The

activities of the militant sectarian organizations pose a serious threat to the rule

or law and justice in the country. They are a serious impediment in the

development of a relatively cohesive civil society and a potent threat to the work

of modern NGOs. They have a different worldview, a different agenda and a

radically different image of Pakistan’s future development. They do not win

elections. They have the street power. Governments and secular NGOs are

reluctant to challenge the traditional and religious institutions.

8. The Army and its Relations with Civilian Authorities. Weak political

institutions, corruption and perennial political instability paved the way for military

intervention. The exigencies of cold war politics facilitated military takeovers in

the past. (54-55) Pakistan’s Military became “state” within the state. Despite the

burgeoning defense expenditure limiting Pakistan’s policy options, the military

budget remains sacrosanct.43 The public opinion on military spending is divided.

A Herald poll indicated 49 % of the respondents for cutting military spending

while 51 % were against.44 The military has benefits enormously from the state.

All the three defense services – Navy, the Air Force and the Army—have created

trusts and foundations with large investments in industry. The Army’s Fauji

Foundation, an industrial conglomerate, neither pays taxes nor is subject to any

regulatory legislation.45

The army has become an “increasingly powerful vested interest in society

through its institutionalized business activities.”46 The military’s intelligence

agencies, particularly the Inter Services Intelligence Directorate (ISID) operates

like a parallel government. The army lost its overt role in governing the country

when democracy was restored. Nonetheless, the military leadership believed that

it must continue to have input in important political decisions and play a

mediating role.47 The army chiefs participated in the governing Troika, courtesy

of the notorious 8 th amendment until it was removed. Throughout the

democratic interlude, the Prime Ministers solicited army’s support in their

quarrels with the President and the judiciary. They called upon the army to

restore law and order. The army conducted and supervised the elections. The

army took over the.10 Water and Power Development Authority because the

civilian regimes failed to deal with its mismanagement and corruption. The

Punjab government invited the army to supervise the matriculation examinations

to curb cheating. The provincial government used the army to check out the

“ghost” schools and basic health units. This repeated resort to army to deal with

routine administrative problems not only strengthened army’s claim to intervene

in civilian matters but also underscored the administrative incapacity of the

civilian regimes. During 1997-98 in the wake of nuclear tests, Sharif’s removal of

the 8th Amendment and the looming fiscal crisis the army sought a more

institutional role in country’s governance. They warned that in a nuclear South

Asia the threat to national security arises is internal and not external. A well

defined, institutionalized role for the army was necessary to counter these

threats. The strained relations of the PM with COAS over a host of issues then

the former’s clumsy attempt to replace the COAS ended not surprisingly, in a

coup. Almost total lack of civilian control on country’s armed forces imposes a

major constraint on civic, political and economic governance. The limits on

initiating foreign policy, cutting the defense budget, control of the nuclear

program and over covert intelligence activities are awesome constraints on

civilian regimes. Pakistan’s democratically elected Prime Ministers have

repeatedly failed to live with this reality. Ironically the same leaders, when in

opposition, repeatedly appealed to the army to intervene and bring down an

elected government before completing its term.

9. Entrenced Bureaucracy. Pakistan’s bureaucracy remains largely bound

by the legacy of the vice-regal system. In this age of knowledge based, learning

organization the system still dominated by the generalist administrators. The

generalist bias is partially responsible for the relative lack of policy capacity and

policy analysis. Fifty two years after independence, the system still clings to the

top down “Governing Corporation” model based on the artificial policy /

administration dichotomy established in the 19 th century 51. During the last

decade, the public service has become more politicized. Grand scale corruption

required close collaboration between the politicians (Ministers) and the senior

bureaucrats. The use of district and local level administration during the elections

eroded their neutrality. Bureaucracy was involved in the President-PM conflicts

as well as the power struggle between the provinces and the federal government.

Finally in Pakistan’s traditional culture kinship and religious ties tended to

compromise the impartiality of the public service.11 Bureaucracy remains

bloated. The government employs 20 % of the non-agricultural work force 52 .

The huge cost of maintaining such a large civil service draws resources away

from the development sectors. During the last decade, governments filled

thousands of positions in the lower ranks of strategic departments on the basis of

patronage 53. On a scale of 0 (worse) to 10 (best) Mauro rates the efficiency of

Pakistani bureaucracy at 4.3, the lowest score among South Asian countries 54 .

11. Structural Constraints On Good Governance. The combination of

poverty, rapidly growing population and scarce resources make a lethal

combination against good governance. There are no examples of good

governance in low income, heavily populated, resource scarce countries. Penury

of resources and a very high demand for services imposes quasi-insurmountable

constraints on allocative efficiency In addition to these fundamental constraints

on good governance; Pakistan is burdened with awesome structural constraints.

Pakistan is a deeply divided society. Its five major ethnic groups – Punjabis,

Pushtoons, Balochis, Sindhis and Muhajirs – have defied national integration.

They have significant cultural and linguistic differences. Islam, a uniting factor in

pre-independence era is no more a sufficient condition for national integration.

The Islamization of the last two decades has brought dormant sectarian

differences to the surface. The emergence of militant sectarian organizations is

threatening the very fabric of social life. These ethnic and religious divisions are

reflected in the state and political institutions, thus creating a fragmented state

with little institutional or social cohesion. The ethnic and religious fragmentation

makes governance a formidable challenge.

12. Ethnic Diversity. The last four elections have consistently revealed the

regional character of political parties and their ethnically based support. This

ethnic and political fragmentation often results into relatively fragile coalition

governments which spend most of their time devising survival strategies rather

than constructive policy design and good governance. The demands from ethnic

minorities constantly challenge the legitimacy of the state apparatus. During the

democratic era a Punjabi or Sindhi Prime Minister found it extremely difficult to

govern the country if ethnically dominated regional parties controlled three out of

four provincial governments. Competition for political power took the form of

ethnic conflict leading to endemic violence. Sindh remained engulfed in ethnic

violence for almost two decades. During the operation Sindh (1992-95), the MQM

was practically engaged in a civil war against the army.56 The generous US

financing (including weapons) during the Afghan war led to the rise of militant

religious groups 57 . Zia’s politically expedient alliances with religious groups and

ban on secular political activity lead to the resurgence of religious groups.58.12.

There are about 8000 registered and about 25,000 unregistered such institutions

in Karachi alone. Out of 2512 religious educational institutions in Punjab, over

870 subscribe to violent sectarian philosophies 59. Madrassahs are producing a

large number of committed cadres. Majority turns to militant religious

organizations and political parties for work. Khan lists five major militias

functioning out of sectarian belt in central Punjab 60 . The sectarian

organizations remain a defiant challenge to the rule of law. Their leaders have

assumed the mantle of divine laws. Their followers believe they are carrying on a

divine mission, a holy war. They break the law of the land and get away with

murder. Weak coalition governments sometimes had to seek the support of the

religious parties in legislature. These linkages explain the ambivalence of the

elected governments in dealing with the religious parties.

13. The Rule Of Law And Corruption. The rule of law remains an

anathema to Pakistani culture. The inherent cultural propensity to take the law in

one’s own hands has been reinforced by feudalism, customs, sectarian creeds

and religious traditions. Police brutality and lack redress are also cited as

reasons to circumvent the due process of law. A parallel system of traditional

justice operates in defiance of the rule of law and judiciary in many regions of

Pakistan. Even though most of its verdicts may be diametrically opposed to the

norms of justice and codes of human rights.62 The Special Courts dealing with

heinous crimes and terrorism form yet another layer of legal institutions that pose

a challenge to the rule of law. In these situations, illegal actions are justified by a

“higher law” that bestows legitimacy on them. The overall effect, however, is a

condition of endemic lawlessness and a total disrespect for the rule of law and

judicial institutions. Violation of rules is commonplace in everyday life. Traffic

rules, customs and income declaration, school and university admissions, plane

reservations and excess baggage rule are rarely respected. Recovery of bank

loans, collection of taxes, telephone and utility bills remains problematic.63 The

idea of universal rules and laws that treat everybody equally is an anathema.

People, particularly elite and middle classes prefer to be treated as special

cases. Those who cannot have their way through influence, family connections,

sifarish (recommendation), would often resort to bribe. Normal services that

should be provided as a matter of course are allocated on the basis of ascriptive

criteria or bribes.13 Public is totally alienated from the police and the judicial

system. Use of police by politicians, fabrication of evidence and registration of

false cases against opponents is a common practice. During 1998-1999, some

50 people in Karachi and over 100 in Punjab died in police custody.64 The police

bitterly complain of shortage of personnel, weapons, transport, and forensic

capacity and above all of political interference. Their working conditions are

appalling and salaries are extremely low. The violation of the due process of law

by the Police appears to be a serious obstacle in establishing the rule of law in

the country.

14. Corruption. During the last decade, four democratic governments were

dismissed on charges of corruption. Two Prime Ministers have been personally

accused of corruption. Ms Bhutto has already been convicted for receiving

kickbacks from SGS and Cotecna. Stories of their legendary corruption have

been published in national and international press.65 Pakistan is considered to

be one of the most corrupt countries in the world. In 1996, the Transparency

International ranked Pakistan the second most corrupt among 53 countries

examined, second only to Nigeria. Corruption skews priorities, reduces allocative

efficiency, compromises the quality of programs, undermines accountability and

reduces transparency. Corruption in police and judiciary particularly leads to

gross injustice and violation of human rights.

CHAPTER-2b

The Governance and Democracy in Pakistan (by Syed Atiq ul Hassan)

CHAPTER-3

THE POLITICAL ECONOMY OF PAKISTAN

1. Economic Development in Pakistan since 1950s has used the framework

of a mixed economy. This concept combines the economic activities of both

public and private sectors. In this framework the government plays a dominant

role by regulating and guiding all economic activity. Management of the national

economy under a mixed economic system produces two potential effects: the

predominance of government in both national economic affairs and private sector

activities. These effects make it difficult to predict the course of the economy and

complicate economic management. The widespread failure of development

efforts especially in poor countries has created doubts about the effectiveness of

employing these mixed economy strategies.

2. During the post-World War II era, there was strong justification for an

active role of government and adopting the framework of mixed economy.

Development economists and the profession considered these factors critical for

economic growth. In the present environment of open competition in major parts

of the world, the strategy of free markets has become more popular. The

development experience of the past five decades (1950-2000) and the record of

performance in both social and economic areas in Pakistan make a strong case

for thorough re-examination of economic policy in both its formulation and

implementation. This chapter’s focus is on the identification of problems, their

impact on the economy, strategies for reform, and suggestions for possible

improvements in future endeavours.

3. The framework of mixed economy in Pakistan has remained strictly under

official authority. Government intervention has determined the pattern of

development, defined the roles of public and private activities, and entrusted the

bureaucracy with the tasks of implementation. This government control and

sponsorship of business monopolies has failed to create a competitive

environment in the free market. The mixed economy, instead of becoming an

instrument of balanced development and dynamic performance, has created an

administrative and bureaucratic economy. The overwhelming bureaucratic

involvement in economic affairs has affected the efficiency of economic

institutions. Over the years the availability of external resources has allowed the

Pakistan economy to make some economic gains, but the gains from these

efforts went mainly to those who held market power or were politically influential

and the bulk of the population felt little or no improvement.

5. Overall, the mixed economy has failed to produce people-friendly benefits

and trickle down gains in Pakistan. The control over economic institutions, by a

dominated market structure, the lop-sided distribution of income, its ignorance of

people’s potential and their needs, and economic inefficiency has failed to

achieve socially acceptable results. The nation and its people have paid a heavy

price; the dismemberment of their country in December 1971 may be attributable

at least in part to the denial of political participation and economic opportunity to

its people.

Problem Identification

6. In an international conference on economic development organized by the

Pakistan Institute of Development Economics in Islamabad in January 1997,

many bureaucrats and policy-makers (both former and current incumbents) made

presentations and participated in discussions during a public forum (PIDE, 1997).

They were able to arrive at a rare consensus on the many shortcomings that

have continued to haunt the economy of Pakistan. They acknowledged poor

governance, priority of projects over policies and fiscal imprudence as the three

main causes which led to this poor socio-economic performance.

7. Governance. The process of governance in Pakistan has been flawed in

many respects – a centralized rule, weak political institutions, widespread

corruption and lacking in a tradition of political accountability. The implications

have been far reaching for the political-economic system. Bureaucrats, military

and feudal leaders continue to seek to control the political and economic

institutions and with the avowed purpose of governing the nation. This pattern of

governance has seriously compromised the principles on which the effective

functioning of national institutions, formulation and implementation of policies,

quality of economic structures, and the impartiality of the legal system depends.

There is a legacy of politically directed lending of non-performing loans from the

nationalized banks. Special development funds and rural development programs

are clear examples of rent seeking behavior.

8. Priority of Projects Over Policy. Regarding the priority of projects over

policy the picture that emerges is even more dismal. Administrative decision

making and bureaucratic management have made the economy of Pakistan even

more tightly controlled. Foreign assistance and western advisors played a key

role in selecting and financing projects in industry, agriculture and infrastructure

development and investment in human capital. These have failed to meet the

criteria of long-term goals of industrialization, infrastructure building, and

agricultural modernization. The development projects that were undertaken were

of low national priority and of questionable merit. By and large, they have proven

to be expensive and of doubtful value.

14. Some of the high priced projects were at odds with national priority and

needs. For example, railway electrification in Punjab, development of urban

centers, and settlement of Punjabis on virgin lands in Sind. The latest is the

construction of a Lahore-Peshawar motorway. This on-again, off-again planning,

has cost the country dearly in terms of cost escalation, foregone commercial and

business activities, investment constraints and has failed to create employment

opportunities while reducing state revenues. Other white elephants, projects of a

non-developmental character, include the palatial President and Prime Minister

Houses, and several other status symbol government structures in Islamabad.

Their opportunity cost is high and can be measured in terms of forgone

investment in social programmes and other more productive sectors of the

economy.

15. Project-based development in Pakistan has adversely affected the

economy. The economic landscape is full of distortions and dislocation. It has

deprived the nation and its people of basic necessities. The existence of excess

capacity in industry and the concomitant shortfall in essential raw materials and

spare parts has increased the costs for private investors.

16. Fiscal Imprudence. Fiscal prudence in public finance is the key to

macroeconomic stability and sustained economic development. Shortfalls in

revenues and wasteful non-development expenditures emanate from poor fiscal

management. In a political system, which places few constraints of accountability

at any level of government, public borrowing and big budget deficits have

become the easy way out. Federal deficits exceed 7 percent of gross domestic

product (GDP), domestic debt outstanding and interest payments account for 45

percent and 8 percent of GDP. Besides, there is a huge external debt of $ 33

billion with financing charges absorbing 35 percent of the annual export earnings.

Currently, external debt stands at about 60 percent of the GDP.

17. Policies such as building a new capital city of Islamabad, the not so well

thought out programme of industry and banking nationalization, the phony

programmes of rural development and public works, run-away military defense

expenditures and so-called programmes of national pride have increased the

cost of capital, wasting and diverting it from more productive investments.

Socio-Economic Impact

18. The socio-economic impact of the above-mentioned problems has been in

the form of a lop-sided pattern of development, economic dislocations and social

inequalities. The economic costs can be defined in terms lost human capital and

wasteful use of capital. The social costs to Pakistani society are in the form of

unemployment, inflation, environmental degradation, violence and crime. The

burden of these costs on the people has reinforced social inequalities. Among

the following are a few illustrations of development-based social costs in

Pakistan and their implications.

a. Market distortions have created income disparities and apparently

free lunches-by taxing the poor and subsidizing the influential.

b. Involuntary unemployment has resulted in lost wages and output

causing the depreciation of human capital.

c. Development generated inflation has discouraged productive

investment and curtailed purchasing power and the social welfare

of the common people.

d. Environmental degradation has lowered the quality of life and

increased health costs.

e. Crime and social deprivation have adversely affected investment

and productivity environment in Pakistan.

19. A survey of the current socio-economic landscape in Pakistan reveals

glaring deprivations. Recent estimates indicate that seventy percent of its 40

million people are illiterate; 60 million people lack access to health services, safe

water and sanitation. The gross enrollment in elementary education is less than

24 percent and over 30 percent of population lives in poverty; only 35 percent of

the population is in the labor force (United Nation Development Program, 1997-

98). The future outlook is not optimistic either. Population growth is nearly 3.2

percent, one of the highest in the world. Annual public expenditure on education

and health is 2.7 and 1.8 percent of GDP, which is even lower than other

countries with lower incomes. Overall, the profile of human development is

dismal.

20. The irony is that while the wealthy and influential are being compensated

for social costs in a system of government welfare the poor have been forced to

pick up the tab.

21. The adoption of a mixed economy in Pakistan has affected adversely

performance levels in both private and public sectors. In the private sector, there

are striking examples of “market failure”. Agriculture is far from being modernized

and has not become a vibrant sector of the economy. A big segment of farm life

is affected by sharecropping and suffers from feudal culture. Public sectors

contribute to government failures. The economy is captive to bureaucratic

incompetence and inefficiency. The economic gains Pakistan has made in the

last five decades would have been made irrespective of role of the government

and its so-called planning and the costs could have been much smaller.

25. Examining the nature and scope of the problems and costs inflicted on the

economy and the people does not mean that the problems encountered and cost

inflicted have gone unchallenged. These issues are not new to national debate

and have been widely acknowledged in official, professional and national forums.

Reforms in the areas of governance, economic policymaking and fiscal

management have been instituted and tried but without much success precisely

due to the problems identified by the architects of failed development

approaches.

Reform Regimes

26. The nature and scope of economic problems reveals how flawed the

process of national policy-making has been in Pakistan. It is not only that projects

took precedence over policy making in the official decision-making but also the

policy making over the years was not adequately institutionalized and remained

an ad hoc process giving power and discretion to individuals rather then pursuing

the rules of institutions.

27. Other evidence also indicate that very few concerted efforts were made to

formulate a worthwhile industrial policy, modernize agriculture and develop

human capital. Policy decisions have largely responded to domestic political

expediencies and external influences and pressures. Reforms in four key areas

are worth mentioning: governance (1960s-80s), industrial reforms (1972), land

reform (1959, 1973), and economic reforms (1988-98).

28. Governance based reforms were introduced in the 1960s, 1970s and

1980s. These reforms amounted to introducing poor models of democracy,

arbitrary firing of civil servants charged with corruption, instituting numerous anti-

corruption programmes and expanding the security apparatus to maintain law

and order. But the root causes of poor governance such as tampering with the

constitution and the political process itself were rarely addressed. Frequent

interventions in the political process by the leadership coupled with the

bureaucratic, military, and feudal controls on the economy have been the real

stumbling blocks. The road to good governance and accountability is through a

stable and free democratic process, transparency and popular participation in

national governance.

29. Industrialization in Pakistan started in 1950s by establishing consumer

goods industries. The industrial reforms of 1972 focused on restructuring and

diversification. These strategies were aimed at expanding an industrial base by

building a steel mill in Karachi, a heavy tool factory in Taxila, capital goods

industries, and agro-based industries such as fertilizer and food processing at

various sites throughout the country. However, frequent disruptions in the

political process mismanaged the industrial reforms.

30. The commissioning of land reforms spread over two decades from 1958 to

1977. These reforms were aimed at changing the land tenure systems,

distributions of land and loosening the feudal grip and redistribution of land

among the landless tenants. But these attempts did not succeed. Land reform

programmes in each period were neither effectively designed nor efficiently

implemented. At the dawn of the 21st century, the country is still clinging to a

feudal dominated land tenure system whose dominant features are

sharecropping and backward relations of production subservience of tenants to

landowners.

31. The economic reforms of 1983-97 were based on supply-side

approaches– liberalization of the economy, trade, investments and privatization.

However, their success depended upon a concerted effort in implementation and

obedience to the “rules of the marketplace.” Due to half-hearted efforts, the

expected outcomes of the economic reforms such as rapid economic expansion,

export-led growth, higher incomes for all groups, expanded health and education

benefits, better housing, and building of “social safety net” have not been

adequately realized.

CHAPTER-4

Foreign Policy and Crisis of Governance

1. There exists a symbiotic relationship between the foreign policy of every

country and between two specific factors; the geo-strategic context (regional and

global) within which a country is located and the domestic compulsions of a

country which include governance issues and economic constraints that exists.

Depending on the economic strength, the military power and the leadership of a

country, a country's foreign policy to a varying degree impacts upon these two

elements and vice versa the foreign policy is influenced by these two elements. A

dynamic connectivity is in fact constantly at work between foreign policy,

governance and the geo-strategic environment. Autonomy, admittedly of varying

degrees, is therefore available to all states to make their choices on the foreign

policy. Their choices therefore define regional and global geo-strategic

environments. Today however the supra-state actors like the United Nations, the

IMF, World Bank, UNCTAD as well as sub-state actors including multi-nationals,

NGOs, various shades of liberation movements, transnational militant

movements and the media also define the geo-strategic environment.

2. Pakistan's foreign policy has been no exception to this rule. Ever since

1947 Pakistan's successive foreign policies have been defined by both

Pakistan's geo-strategic environment and by issues of governance, specifically

economic issues. Conversely, though to a lesser degree, Pakistan's foreign

policy too has had an impact on governance-related issues. Whatever the

content, orientation and conduct of Pakistan's foreign policy it has been a policy

that has been determined by successive governments who made autonomous

and calculated choices .

3. That their autonomy initially was circumscribed by the pressures that a

new born state, with a three front situation (India, Afghanistan and China) and an

ill-equipped newborn state, did not completely deny them independence of

choice. The nature of the choices made by successive governments can be

debated upon but not the fact that each government exercised, Pakistan's

sovereign right to opt and reject allies. A review of Pakistan's foreign policy

underscores the fact that foreign policy-making has been undertaken

autonomously by the state and in content has not been responsive to populist

pressures.

5. In a country whose political history has been marked by discontinuity and

upheaval, foreign policy-making has been perhaps the most professionally

handled arena. Foreign policy-making was conducted largely through an

institutionalized framework as opposed to other aspects of policy-making. Kargil

perhaps was an exception. That this professionally managed policy did not yield

positive benefits for the country's economy, points to broader issues of

governance that remained neglected over the decades. Now we are experiencing

their cumulative effect.

The Foreign Policy Yield

6. In the fifties prompted by the security and economic concerns Pakistan

adopted a foreign policy whose main pillar was an alliance with the United

States. Economic and military advantages accrued to the state from this alliance.

Concessional assistance, military training and equipment came. The domestic

fall-out of this alliance and other factors like a newborn state, confronted with

threats and therefore insecure, was that leftist leaning dissent was dealt out from

the political arena.

7. In the sixties too it was a continuation of the fifties policy. The opening up

with China took place in the late sixties and with it the initiation of a strategic

relationship with China which continues to be the central pillar of Pakistan's

foreign policy. However, sixties was a period of economic boom in the industrial

sector. Its exports were more than that of Turkey, Malaysia, Indonesia and

combined. In the sixties Pakistan's foreign policy however yielded rich dividends

in the form of large amounts of concessional flows.

8. In the seventies too the reorientation of a divided Pakistan by the brilliant

and flamboyant Zulfikar Ali Bhutto towards the Muslim world yielded multiple

advantages. The Middle East connection ensured flow of petrodollar, defence

alliances and a special stature for a divided and defeated Pakistan. By the mid-

eighties the flow of funds from around 3 million Pakistani workers amounted to

around 6 billion dollars. This largely covered the trade imbalances caused by the

increase in oil prices .

9. The period of the eighties was an aberration in Pakistan's history. More a

nightmare. The military dictator General Mohammad Zia-ul-Haq, the hangman of

an elected Prime Minister Zulfikar Ali Bhutto, military dictator and a domestically

isolated man ended up ruling the country for eleven long years. On the foreign

policy front he converted his foes into friends; he spent his eleven years

befriending the India, China, warring Iran and Iraq, the Arab states, China and

the United States. However, for the United States and especially the Reagan

administration Zia became the man who led the roll-back of the evil Soviet

empire.

10. Whatever Zia's successes on the foreign policy front otherwise his Afghan

policy which yielded the Washington-Rawalpindi nexus helped Pakistan to earn a

3.2 billion dollar aid and loan package. Together the CIA and Pakistan's ISI co-

authored and engineered the Afghan jihad.

13. In the eighties and nineties a fairly large part of the deficit was financed by

short-term borrowings at high rates. Earlier in the sixties the gap between the

gross domestic savings and investment was financed by highly concessional

assistance , mostly from the World Bank and the United States. By the middle of

the nineties Pakistan carried a very large debt burden of over 30 billion dollars.

14. In the nineties while policy on the security front remained on track, the

inept state and inept leadership steered the country from crisis to crisis. Against

the backdrop of sectarian and ethnic violence problems of corruption, nepotism

and inefficiency the country got deeply mired in the debt trap. Significantly as

economists like Shahid Javed Burki and others argued that it was less the

nuclear test and more the cardinal error of freezing the foreign currency accounts

adding to Pakistan's economic troubles.

15. Clearly until the eighties Pakistan's foreign policy continued to provide

easy cash injections and military windfall to the Pakistani state. However, the

state failed to convert this windfall into a lasting strength especially in the

economic arena. Domestic policy led to low domestic savings rates, also

prevented from us from capitalizing on our own potential, perpetuated inefficient

banking systems, retained a narrow tax base, minimal effort was made to

document the economy. Collapse of public sector began, the railways, WAPDA,

KESC etc, by 1997, 34% of Pakistan's population was living on the poverty line.

Issues of distributive justice were overlooked.

Where Do We Stand Today

16. On the military security front Pakistan has done well. A nuclear

deterrence, a professional army and a national will to defend the country inspires

confidence. However, on a broader, crucial level what is happening in the hearts

and minds of our people? What is the economic situation in the country? The

answer is evident: organized and armed hate and anger exists within our own

ranks; economic crisis we confront needs no elaboration as we are confronted by

a $40 billion worth of external debt and finally according to Washington and some

Arab countries those committing and planning acts of sabotage in the United

States are being tracked back to training camps functioning in Pakistan and

Afghanistan.

17. Today's economic crisis is the cumulative outcome of flawed policies and

a failure to make tough choices opt for documentation of the economy for

instance, because the Middle East remittances, the Afghan jihad money, petro-

dollars and the aid money came easy. It has been a ruling class that has been on

a perpetual picnic. On the internal security front too the situation has

continuously deteriorated. Pakistani commentators endlessly cautioned against

the fall-out of the klashnikov culture, the drug culture, the sectarian curse etc.

Until recently all this has continued to flourish because of the failure of

successive governments because of their own weaknesses and the lack of

consensus among different state institutions on a strategy to deal with the

problem.

What is the Solution

18. Principally more effective and rational governance. Foreign policy needs

to be contextualized in the broader framework of the failure of the state.

Pakistan's objective should be to construct a developmental state rather than a

predatory state. The need of the hour is to generate growth in the economy so

that conduct of foreign policy is not dictated by economic shortcomings.

19. Specifically on the governance front the state must take the following

actions:

a. Enforce rule of law within the country and undertake to de-weaponize

all non-state actors.

b. Establish a code of ethics for all opinion making forums including the

masjid, politician and the press banning all actions that spread hatred

against various sects and ethnic groups.

c. Ensure tighter controls at border check-points especially with China

and Iran.

d. Banning of political parties should be out, taking strict action against

those that incite hatred and preach violence against non-Pakistanis,

should be in.

e. Government should continuously reiterate that Islam cannot be used

for political opportunism.

f. Narrow the divide between the have and the have-nots and between

the western educated elite and the locally educated. Bridge-building

must replace the us versus them divide.

g. Advocate freedom of expression within the parameters of Pakistan's

Constitution. This must be at the core of a society dedicated to

progress and development. Because it is a rough and risky path we

should not abandon it. Thought cannot be suppressed. Freedom of

expression will enable logical and credible ideas to survive in the

marketplace of ideas. We must recognize that thought control breeds

resentment, bitterness and violence.

h. Address the genuine and reasonable concerns of other countries

which relate to our territory.

j. It is these credible moves that alone that will earn the Pakistani state

respect and peoples' confidence at home and credibility among other

states. There are, however, limits to state control. Given the broader

context , there exists a supra-national consciousness among the

Pakistanis of the problems of Kosovo, Chechnya, Kashmir, and

Bosnia. While the Pakistani state addresses these issues within a

statist realpolitik framework the non-state actors will continue their

support, political, moral , material and even maybe military, depending

on what avenues are available to them.

20. What is clear is that the current crisis of governance in Pakistan is not

linked to foreign policy and, therefore, the solution to this crisis does not lie in

altering the objectives and content of foreign policy .

21. There is no demonstrable connection between Pakistan's foreign policy

objectives and our current crisis of governance. Since the early nineties Pakistan

has demonstrably played an important role in trying to bring peace to

Afghanistan. Significantly the only negotiated instrument which ensured peaceful

transfer of power was the 1993 Islamabad Accord.

22. In the region, however, there continues a power play in which all of

Afghanistan's neighbours are involved. Pakistan's proposals for peace and call

for ceasefire, the 1997 shuttle diplomacy efforts at initiating an intra-Afghan

dialogue , its 1998 proposals for enforcing an arms embargo were as

unambiguously undertaken as the aborted attempt by a neighbouring state to

supply of 900 metric tons of weapons to the Northern Alliance. Pakistan has

facilitated the policy of constructive engagement between many regional states

including China, Iran, Turkmenistan, Kazakhistan and the Talibaan.

23. On issues like the Afghan Transit Trade, Pak-India relations, Pak-US

relations the nuclear issue, Kashmir Pakistan has adopted a wisely thought

through policy the Kargil episode being the exception.

Need to Alter Conduct of Foreign Policy

24. Pakistan's weakness lies in ineffective projection of Pakistan's foreign

policy. Unwarranted and counterproductive secrecy in a media context which

ensures complete transparency. Weakness on information management enables

others to define the story, the reality of Pakistan's policy. An excessively cautious

approach in managing foreign policy related information has contributed to

undermining what has arguably been a viable and valid policy on for example

Afghanistan, India, Gulf and the US.

25. Until recently populist rhetoric on key foreign policy issues became the

passport for public acceptance for corrupt and inept politicians and cabinet

members. A sobriety in the conduct of policy is therefore required.

26. Increased coordination among foreign policy-making institutions.

27. Restructuring of foreign policy setup to integrate economic agenda in the

mainstream of foreign policy-making and implementation.

Impact of the Crisis of Governance on Foreign Policy

28. Concrete Level . Minimal benefits that translate into peoples' prosperity

and a nation's progress have been harvested from Pakistan's foreign policy.

There has been a complete failure to capitalize on the economic front. For

example our special relations with countries like China, Malaysia, Iran, the Gulf

States and even South Africa have not been used. All these three countries have

continuously indicated specific interest in broadening trade and investment

relations. Yet because of the mess on the economic front on the home front, no

headway has been made with any of the three countries. Only under an

improved system of economic direction backed by efficiently functioning

institutions leading can radically alter the status quo on the trade and investment

front.

29. Living off cash windfalls over the years the Pakistani state acquired a

predatory non-productive character.

30. Psychological Level. A psychologically handicapped decision-making

elite; one with a somewhat dependant and derivative mindset.A commenting

class that judges itself through the eyes of others and that tends to become

overwhelmed by external criticisms, whether valid or invalid. This has taken away

from our own ability to dig our teeth into our own internal problems and instead

tempted us to look for external sources of sustenance.

Myths That Continue to Flourish

31. Reduced military budget will ensure social development.

32. Our Nuclear Policy has cost us foreign investment.

33. Signing the CTBT will help to end our so-called 'isolation.'

Patterns that Emerge

34. The state has consistently been able to take autonomous decisions in the

foreign policy arena on key security issues.

35. Pakistan's foreign policy has helped Pakistan to effectively deal with the

security threats it has confronted. The tragic breakup of 1971 however was

caused by the failure of the Pakistani state , weak governance and Indian

aggression.

36. Pakistan has never reconciled with the illegal occupation of Jammu and

Kashmir by India. As a party UN-acknowledged party to the Kashmir dispute

Pakistan will continue to support the Kashmiri struggle for self-determination.

Foreign policy was not able to 'deliver' on the economic front because of a

continuing crisis of governance. A proactive foreign policy conducted only on the

security front. On the economic front the focus has been on acquiring aid and

loans. Minimal effort was made to develop economic relations with our regional

and distant friends.

37. The economic benefits from successive foreign policy have fed the non-

productive predatory state.

38. Because of a weak state and a weak commercial activity operationally

Pakistan has pursued a one-dimensional relationship in which economic relations

have not been cultivated. Unidimensional relations have led to developing

tenuous and fragile relations with even our close friends. For example problems

with Iran over Afghanistan has led to a crisis in our relations.

Conclusion

39. Pakistan's current foreign policy is not responsible for the prevailing crisis

of governance. It is the character of the state and the character of those who

wielded state power has been responsible for the current crisis of governance.