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SITUATION PF PAKISTAN: The Situation in Pakistan is that of increasing economic and political instability and the destabilized government

is losing control. The biggest threat confronting Pakistan is the growing hegemony of the Taliban and allies of Al Qaeda. The situation in Pakistan is really dangerous as the Taliban could take over the rule of Pakistan, and, hence, possess nuclear weapons which can be a threat the security of the entire world. Regarding what you need to know current situation of Pakistan. Political situation of Pakistan seems to be in trouble because of foreign bombings in Northern areas, Security situation is still worse with fear of bombings, Social problems include increasing street crimes, abuses against women, child labor, increasing inflation with people bearing still low income. Well the election had decided Pakistan peoples party with heavy mandate and Muslim league nawaz got the 2nd position, the Pakistan peoples party in collision with Muslim league nawaz made the government. The government is not trying to solve issues but creating problems for the president musharaf and forcing him to resign for the job. Fighting for the restoration of judges and nowadays submitted a bill for the restoration of judges in parliament house, but they do not have 2/3rd majority in senate... So these issues are not going to solve, but his will create a chaos in Pakistan politics. In the span of the last three years, since 2004, there has been a flurry of foreign funded projects, one after the other in various provinces of Pakistan. On a statistical front, almost dozen projects are launched in Sindh while Punjab has beheld the inception of more than 18 foreign-funded projects. As for Balochistan, almost 15-16 mega projects have been launched. These projects involve both the federal government as well as the respective provincial governments. It is a common pattern among almost all projects that are funded by foreign sources, that they are still in their most initial stages of implementation. The pace is so slow that that the planners in Karachi conjecture a trepidation of a massive cost over runs in attribution to the extremely slow generation of funds. Moreover the menace of inflation is also lurking over, which the planners consider another vital threat to the future course of profitability of all these projects. ECONOMIC INDICATORS: 16, Apr 2011, CEST. Welcome to the Pakistan economic statistics pages provided by the beta version of EconomyWatch.com's Econ Stats database. Economic Indicators For: Pakistan National or Regional Currency: Pakistani Rupee, PKR

Year of data: 2010 Number of Indicators Listed: 28 Full Dataset: From Year 1980 to 2015 Date of Last Update: 28 February 2011 Population: 174,578,558 (July 2009 est.) Area: total: 796,095 sq km Natural Resources: land, extensive natural gas reserves, limited petroleum, poor quality coal, iron ore, copper, salt, limestone Capital: name: Islamabad Data Sources: IMF, World Bank, UN, OECD, CIA World Factbook, Internet World Statistics, The Heritage Foundation Pakistan, an impoverished and underdeveloped country, has suffered from ten yearss of internal political conflicts, depressed levels of Foreign Direct Investment (FDI), and declining exports of manufactures. Faced with untenable budgetary deficits, high inflation rates, and hemorrhaging foreign currency exchange national reserves, the state agreed to an international Monetary Fund Standby Arrangement in November 2008. Between 2004-07, Gross Domestic Product (GDP) growth in the 6-8 per cent range was spurred by gains in the industrial and service sectors, despite severe electric power shortfalls. Poverty levels decreased by 10 per cent since 2001, and Islamabad steadily raised development spending in recent years. In 2008 the financial deficit - a result of chronically depressed taxation collection and increased spending - exceeded Islamabad's target of 4 per cent of Gross Domestic Product (GDP). Inflation rates remains the top concern among the public, jumping from 7.7 per cent in 2007 to 24.4 per cent in 2008, primarily because of rising world fuel and commodity prices or pricing. In addition, the Pakistani rupee has depreciated markedly as a result of political and economic instability.

Pakistan Economy
Pakistan is a South Asian country that was established in 1947. Its neighboring regions include India, Iran, Tajikistan, Afghanistan, and China. It is located along the Arabian Sea and has a coastline spanning 1,046-kilometre (650 mi). The mountain ranges of Karakoram and Pamir in the northern and western highlands of the country include K2 and Nanga Parbat which are counted among the highest peaks in the world. The major by-air gateways to Pakistan are Islamabad, Karachi and Lahore. It can also be reached by train from India and Iran. Pakistans main cities are Quetta, Gawadar, Peshawar, Sialkot, Multan and Faisalabad.

Pakistan Economy: Profile


Pakistan is a developing country and its economy is the worlds 27th largest economy based on its purchasing power. However, the country remained impoverished due to internal political disturbances and negligible foreign investment, since independence. With rise in development spending by Islamabad, the countrys poverty levels reduced by 10% from the year 2001 to 2007. The economy grew between 2004-07 due to rise in GDP from 5 to 8%. This was largely due to development in industrial and services sector irrespective of severe electricity shortfalls. However, the year 2007 witnessed a lot of political and economic instability leading to depreciation of Pakistani rupee. The growth of the economy was affected once again during the 2008 global economic recession.

Pakistan Economy: Statistics

GDP (purchasing power parity):

GDP - real growth rate:

GDP (official exchange rate): $166.5 billion (2009 est.) GDP - per capita (PPP):
o o o

$2,600 (2009 est.) $2,500 (2008 est.) $2,500 (2007 est.)

Inflation rate (consumer prices): o 14.2% (2009 est.) o 20.3% (2008 est.) Population: 168,976,500 (2010 estimate)

The Pakistan economy faces several long term challenges such as curbing inflation and expanding investment in healthcare, education, and electricity production.

Pakistan Economic Structure


Characterized as semi-industrialized, Pakistans economy has grown tremendously since its independence in 1947. Punjab and Karachi states constitute the major share in the economic growth of the country. During the 1990s, the growth became slower due to imprudent policies and internal

instability that has always been a part of the country. The first decade of the 21st century has experienced wide-ranging economic reforms particularly in manufacturing and financial services sector, leading to improvement in the countrys economic outlook.

Pakistan Economic Structure: Primary Sector


Pakistans primary sector plays a major role in the countrys economy. Primarily an agrarian economy, Pakistan produces a range of agricultural products. Around 43% of the countrys labor is engaged in the primary sector, which in turn contributes 20.8% to the countrys economy in 2009. Pakistan is the second largest producer of Chickpea and the third largest producer of mango in the world according to the 2005 Food and Agriculture Organization of the United Nations. Some other major agricultural products of Pakistan include onion, cotton, rice, tangerines, oranges, apricot, sugarcane, date palm, Clementine and wheat. Dairy farming is also a large industry in Pakistan. In fact, Pakistan is the fifth largest milk producer in the world. Although Pakistan has a considerable livestock population, it spends around $40 million a year on formula milk import.

Pakistan Economic Structure: Secondary Sector


Pakistans manufacturing sector provides employment to 20.3% of the countrys labor force (est. 2005). Some major manufacturing industries include cotton textile and apparel manufacturing, carpets, rugs, rice, chemicals, sports goods and leather goods. Some other popular industries are construction materials, mineral, paper products, food processing and beverages. Around 51.4% of countrys exports include textile and apparel. The secondary sector experienced a growth of 5.4% in 2007-08. However, electricity shortage remains the biggest challenge in ensuring development of Pakistans secondary sector.

Pakistan Economic Structure: Tertiary Sector


The services sector of Pakistan mainly includes industries such as finance, insurance, transport, communications and storage that account for 24% of the countrys GDP. Wholesale and retail trade has 30% share in the GDP. With increase in the countrys software exports, the IT industry is emerging as a flourishing service industry. Despite union unrest, the Pakistani government is actively engaged in privatization of banking, telecommunications and utilities to produce more jobs in the country.

Pakistan Economic Review


Pakistan economic review projects that because of strong economic policies taken up by Pakistan government manufacturing and financial services sectors have flourished in fiscal 2008. Economic review of Pakistan shows that there has been a growth rate of 7 percent per year for four successive years till 2007. Though Pakistan is a poor country, yet its growth rate has been better than global average growth rate. As per economic review in Pakistan several economic reforms that have been taken up in recent years helped in its economic growth. Economic review at Pakistan shows that there has been improvement in currency reserves and foreign exchange reserves of Pakistan have developed. In present situation of recession, however, growth in economy of Pakistan has been held back a little bit. Economic review of Pakistan has been focusing in recent times on how to deal with economic recession. Syed Yousaf Raza Gilani who is Prime Minister of Pakistan has initiated a number of procedures to address regional economic imbalances. Economic indicators look positive in present situation. Discount rate of central bank has been improved to 1.5 percentage points. This will help in dealing with high inflation rate in Pakistan. Pakistan economic review projects that government encourages foreign investments in various fields of real estate, telecommunications, software, energy, fertilizer, aerospace, textiles, steel, ship building, arms manufacturing, cement and automotives. Reduction of poverty from Pakistan is a major issue for economic department of government. In present analysis, plans have been made to develop roads, dams and power generating plants to generate more job openings and increase development. According to new plan, 541 billion rupees will be used for economic development of country. Export of goods is a major concern for Pakistan economy. From 1999, exports of Pakistan have increased from $7.5 billion to $18 billion in financial year 20072008. Major items for exports include cotton fiber, vegetables, rice, electrical appliances, furniture, cement, tiles, marble, textiles, clothing, sports goods, powdered milk, livestock meat, software, seafood, leather goods, surgical instruments, carpets, rugs, ice cream, chicken, wheat, processed food items, Pakistani assembled Suzuki cars, salt, defense equipment, onyx, marble and engineering goods to mention a few.

Some important import items of Pakistan are petroleum and petroleum products, automobiles, medicines, industrial machinery, construction machinery, trucks, electronics, civilian aircraft, computers, pharmaceutical products, computer parts, food items, toys, defense equipment, iron and steel. 60 YEARS OF THE ECONOMY OF PAKISTAN:

Economy
Moving ahead slowly but steadily
In the initial years of its formation, the country was bogged down by the massive displacement of people. Pakistan was completely ill-equipped to handle the situation. To make matters worse, the economy was largely dependent on agriculture, which could not provide Post-independence, Pakistan's economy was based on employment on a large agriculture and controlled by feudal elites. The country scale. However, the was left with only 17.5% of the British colonial country soon got back government's financial reserves after partition to tackle on its feet to post with the dislocation of the population and to build a new decent economic country. growth decade after decade. Its average growth rate was 6.8% in the 60s, 4.5% in the 70s, 6.5% in the 80s, and 4.8% in the 90s. Growth picked up momentum in the 21st Century, and today Pakistan is the third fastest growing economy in Asia after

China and India.

As of 2006, the countrys Gross Domestic Product (GDP) was $128.8 billion. Agriculture contributed 20.5% of the GDP, industry 26.7%, and services the lions share of 52.9%. The Pakistani economys average growth in the period 2003-2007 has been an impressive 7.5%. Domestic demand has largely driven this broad-based growth. Moving ahead, the major speed bumps in the countrys growth path are likely to be high inflation, which was around 17.2% in April 2008, and a significant tightening in the monetary policy.

On the agricultural front, the nations main exports are raw cotton, cotton yarn, cotton cloth, and rice. Agriculture is mainly rain-fed and output varies greatly year-on-year because of inadequate irrigation facilities. The fertile basin along the river Indus has a lot of potential for robust cultivation. The only hurdle is lack of irrigation facilities. However, the good news is that in 2007, irrigation facilities improved, expanding output 5%. The economys reliance on the agricultural sector has been decreasing gradually, though the land under cultivation has been going up.

The manufacturing sector contributes a quarter of the GDP. The largest industries are apparel manufacturing and cotton textile Due to a decline in Pakistani textile exports, production. Textile exports, which the Government of Pakistan has doled out typically account for 60% of total subsidies of $367 million to this sector to exports, dropped to 3.3% in 2007 effectively combat competition from India, from an impressive 14.9% in Bangladesh and Vietnam. 2006. Quality issues, lack of diversification, and production inefficiencies led to the slowdown.

Other major industries revolve around construction materials, paper products, food processing, fertilizer, sugar, electric goods, shipbuilding, and beverages. The Government of Pakistan is taking steps to encourage privatization

of public sector industries through the Privatization Committee it formed in 1990. Though slow, the committee has privatized as many as 143 public sector enterprises, including seven banks, one major telecommunication corporation, one major power utility, 12 energy sector units, five newspapers, five hotels, one advertising agency, and about 100 industrial units.

The services sector, which has been the chief contributor to GDP in recent years, is comprised of construction, trade, transportation and communications, as well as other services. This sector expanded 8% in 2007. The main subsectors, financial services and telecommunications, have been witnessing substantial growth and flow of Foreign Direct Investment (FDI). The telecommunications segment, which was largely a regulated and monopolized market until some time back, has turned into a more competitive and liberalized sector. Further, there has been a sea change in the financial system of the country. The problem of inadequate supervisory standards and governance, which plagued the system for a long time, has been corrected through a series of government-backed reforms.

The total FDI inflow into the country stood at $5.1 billion in 2007, reflecting an increase of 45.6% year-on-year. FDI has largely been flowing into sectors such as telecommunications, financial services, oil and gas, tobacco, and cigarettes. Sectors like manufacturing attract hardly any FDI.

The U.S. is the largest trading partner of Pakistan. Others are Japan, the UK, India, China, Germany, Persian Gulf states, and Iran. The country has a trade deficit, which means its imports exceed its exports.

Largely due to consolidation in the banking sector, Pakistans financial industry was the second largest FDI recipient amounting to $897 million between July 2006 and May 2007.

Stock markets in the country mirror the progress of the economy as a whole. The Karachi Stock Exchange (KSE)s 100-share index is the national benchmark. The countrys stock markets underwent a drastic transformation after reforms to achieve macro-economic stability were introduced. On the back of these reforms, the KSE-100 has surged. The countrys equity markets attracted inflows of around $1 billion in 2006. To make the stock exchanges more competitive and to ensure better corporate governance, the government is mulling demutualization. Political instability has largely kept investors out of the stock markets.

If the situation improves, as is expected after the recent Parliamentary elections, the stock markets are bound to pick up steam.

Quite a bit to be done


The progress on the economic front notwithstanding, Pakistan has many challenges on the social development front. It is ranked 136 among 177 countries on the Human Development Index. The countrys population is 159 million and annual growth rate 2.1%. Poverty remains a serious concern. As much as 47.8% of the population is still under the poverty line. A literacy rate of just about 50% and a wide literacy gender gap, especially in the rural areas, convey that social development in Pakistan is far behind countries with comparable per capita incomes. However, there has been some significant progress in terms of an increase in life expectancy (59 years in 1990 to 64.9 years in 2005), a decrease in infant immortality, and an improvement in health and education services.

Marching ahead, but problems aplenty


Fueled by strong domestic demand, the economy is chugging along nicely on the growth track. Inflation and the possibility of a slowdown in exports, however, remain a concern. Nevertheless, improved agricultural output could ease supplyside constraints and bring down food prices. Non-food inflation could be tackled through a tighter monetary policy. Skyrocketing crude oil prices are another big challenge. Further, FDI inflow is mostly concentrated in only some sectors of the economy. Therefore, the government needs to take steps to make the manufacturing sector more efficient. It can bring in better technology and processes to attract FDI. Exports remain sector dependent and, therefore, theres a drastic need for diversification. The slowdown in the U.S. economy could prove to be a significant challenge as the superpower is Pakistans main trading partner and chief ally on the foreign relations front.

After the recent parliamentary elections, the country is on the threshold of democracy and peace. The new government should concentrate on bringing about all-round development in the country. Poverty alleviation, literacy promotion, and provision of accessible health care, drinking water, and sanitation facilities should be given high priority. Improvements on the social development front, a stable political environment as well steady economic growth should see Pakistan emerge a force to reckon with in Asia.

Pakistan independence: 60 years of shattered dreams


Pakistan celebrates its 60th anniversary on 14 August 2007. Those years have been dominated by right-wing military rule, a parasitic capitalist class and feudal landlords in rural areas. The working class and poor face grinding poverty. KHALID BHATTI, of the Socialist Movement Pakistan, reports from Lahore. MILLIONS OF POOR Muslims from all over India rushed to the new homeland of dreams when British imperialism announced the partition of India in August 1947. The Indian subcontinent was divided on a religious basis, which paved the way for hatred and communal violence between Hindus, Sikhs and Muslims in which around two million people were killed. This laid the basis for the hostility

and long-term enmity between the newly independent neighbouring states of India and Pakistan. Millions of people migrated to Pakistan for a better life for them and future generations. But their dreams have been shattered by the parasitic ruling class and successive governments. Chronic poverty, unemployment, hunger, superexploitation, repression, injustice, police brutality, religious extremism, military domination, and the rotten capitalist and feudal system, are the everyday realities faced by the masses after 60 years of independence. The majority of the population is still living without proper healthcare, education, sanitation, clean drinking water, housing and transport. The masses feel betrayed by the ruling elite, the majority seeing no future. Feelings of disappointment and desperation are running high. The whole history of Pakistan is full of crises, wars, military interventions, betrayals, experiments, working-class movements, and social and political explosions. The weak indigenous ruling class, the colonial state structure, the strong establishment and imperialist domination, created many problems for the new state which not only still exist but have become bigger and more complicated. To understand the present situation, it is important to see how the Pakistani state, ruling classes, working class, economy, political movements and society in general have developed over the last 60 years.

A weak ruling class


PAKISTAN INHERITED A weak ruling class mainly consisting of Muslim feudal lords, ex-officials of different small states called rajs (there were many small states in British India with limited sovereignty), Muslim traders, a few capitalists and former civil servants. A mass Pakistan movement did not develop until the 1940s. The leadership of the Muslim League (the political party which started the campaign for a separate Muslim state) was mainly from the aristocracy and Muslim elite. They developed this party to protect their class interests against the rising Congress Party. Quide-Azam Muhammad Ali Jinnah (the official founder of the nation) was the only leading figure in the Muslim League to have authority amongst the masses. He died in 1948 after just one year of independence. He left behind a bunch of opportunists and power hungry politicians with little mass support. They failed to finalise a constitution for the country or hold general elections (the first general elections were held in 1970 after 23 years of independence). The ruling Muslim League did organize provincial elections in Punjab and East Bengal (now Bangladesh) in the early 1950s. But the results were a nightmare for the ruling elite. They lost miserably in East Bengal and

succeeded in Punjab only after widespread rigging. The majority of the ruling class were feudal lords from Punjab and Sindh, as well as tribal chiefs from Baluchistan and North West Frontier Province. They were frightened of the masses and the consequences of general elections. The lack of public support forced them to form an alliance with the civil bureaucracy and military establishment. This alliance led to the intervention of this establishment into politics. Alienated from the masses, the ruling elite become more and more dependent on the establishment to maintain power. The already very strong civil bureaucracy became more powerful. Nearly a dozen prime ministers were appointed and removed in just ten years.

Military domination
THE CIVIL ESTABLISHMENT took full advantage of the weakness of the politicians and became a dominating factor in politics. The judiciary also sided with the bureaucracy, and a powerful nexus developed which was to play an important role in the future. The constituent assembly finally agreed a constitution in 1956 and general elections were planned for 1958. But it was clear that the ruling Muslim League would be routed in elections and that the radical left nationalist National Awami Party (NAP) would win a majority. NAP was a mixture of communists, radical reformists, intellectuals, nationalists and left-wing individuals. It was a pro-Soviet Union party and considered to be anti-imperialist. This was a nightmare situation for US imperialism because Pakistan was its key ally in the region against Stalinist Russia. The US encouraged the military senior command to impose martial law and cancel the planned elections in 1958. Political activities were banned. General Ayub Khan became the country? first s military dictator, fully backed by US imperialism with all sorts of financial aid and easy loans. This dictatorship lasted for more than ten years, the beginning of a long period of military interventions and domination which is still continuing (the only exception was the period of the early 1970s). Now, Pakistan is experiencing its fourth military government since 1958. During the dictatorship of General Zia-ul-Haq in the 1980s, the generals became the most powerful factor in politics. The military not only increased its political influence but also developed its own industrial and commercial business empire. Generals and intelligence agencies became so dominant in politics that they started to decide who would form the next government even before elections. All the major political, foreign policy and important decisions since the 1980s have been taking by GHQ. The military generals have become the ruling class or,

at least, the most powerful and dominant section in the ruling elite. The main capitalist political parties and politicians accepted this domination and fully capitulated to GHQ. The generals and intelligence agencies have been running the affairs of the country with comfort for 25 years. There is a deadly nexus between generals, feudal lords, capitalists and big business, and the mullahs ? the generals being the senior partners supported by reactionary mullahs and feudal lords. Religious political leaders joined the ruling class in the early 1980s and have further strengthened their position since. Today, the situation has started to change again as resistance and opposition to military domination is on the rise. People have begun questioning the military? s intervention into politics. The generals have directly ruled this country for 31 years and failed to solve a single problem faced by the working masses. It is becoming increasingly difficult for the army generals to justify their rule and political domination.

State in crisis
THE INCREASED POLITICAL, social and economic crisis has developed serious tensions within the state institutions. The crushing military domination over all the other state institutions has created a situation in which different sections have started taking on each other, fighting to control the state apparatus. There is a very strong reaction from some sections of the civil bureaucracy and politicians against military domination. Former and serving senior military officers occupy almost all the key posts in the administration, as well as public-sector departments and corporations. The most attractive civilian posts also go to military officers. The regime of General Pervez Musharraf was forced to change the decades-old policies of the Pakistani state after the 9/11 events in the US. Pakistan was forced to change its long-held Afghan policy. There was a dramatic policy shift on many issues. The Pakistani state was forced to act against the Islamic fundamentalist groups which it created and developed in the 1980s and 1990s. Musharraf also made some changes in Kashmir policy and started dialogue with India. He started speaking against the jihadi culture and banned some Islamist organisations. But these policies have not only enraged Islamic fundamentalist elements in the state apparatus but also hurt the feelings and interests of conservative and nationalist elements. The recent removal of the Chief Justice has brought a change in the attitude of the judiciary. It has reacted strongly against the removal and started to take independent decisions against the executive. There are members of the higher judiciary who still side with the executive, but they are isolated. It is the first time that these two old and traditional partners are standing face to face.

Most state institutions have already lost their credibility with working-class people. The people have no respect for the police, the most hated state institution. The army was the most respected in many parts of the country and among many sections of the population, but now even the army has started to lose that credibility. There is a massive fall in support for the army because of its political role. The state has practically lost control over many parts of the country, to Islamist groups or nationalist militias. Feudal lords and criminal gangs have developed their own respective states within the state. The national question is becoming a very explosive issue in Baluchistan and Sindh. The rising tide of Islamic extremism, including armed groups, is directly challenging the writ of the state as they run parallel administrations in many areas. The rising social and political polarisation along with increased class tensions are further increasing the state crisis. Sections of the ruling class and state officials are becoming increasingly concerned about the situation.

Distorted economic growth


THERE HAS BEEN high economic growth for the last four years, averaging more than 7%. But this high growth has failed to decrease poverty or improve living conditions of the poor and working-class people. This is not a new phenomenon in Pakistan as history shows. The 1960s were called the decade of development and economic growth, the so-called ? golden decade? averaging 6.7%. It was , also the era of industrialisation. On the one hand, this gave rise to the famous 22 richest families in Pakistan controlling most of industry and the economy. On the other hand, it created the sea of poverty in which 46% of the population was living. This high economic growth and accumulation of wealth laid the basis for the biggest revolutionary uprising of the working class in the history of Pakistan, in 1968-69. The economy had been developed to benefit the elite. Pakistan was an agricultural economy at the time of independence with more than 85% of the population living in rural areas. Agriculture was the main contributor to GDP. In the industrialisation of the 1960s and 1970s, the rural population started to move to the industrial cities. Now, nearly 40% of the population lives in the cities and towns. A few hundred feudal families dominate the rural economy (industry is also owned by a few dozen families), with agriculture employing 43% of the workforce and contributing 23% of GDP. Nearly 60% of the population is still dependent on agriculture which is in severe crisis. Feudalism, water shortages, highly expensive electricity, fertilizer and seeds, decreasing land for cultivation, very low output and yield, and old methods of farming, are the main reasons for this crisis.

The textile industry is the main industry in Pakistan, and is also in crisis. More than 300 textile units have been closed down in the last two years. Textile exports are falling as competition from China, India and Bangladesh intensifies. There has been growth in automobile, IT and electronics, and the services sector is also booming, especially banking. Bank profits have surged from $130 million in 2002 to $1.8bn in 2006. Pakistan stands third for bank profits, only behind Colombia and Venezuela. Pakistan? economy is largely dependent on foreign aid and loans. In the 1960s s and 1980s Pakistan received aid, assistance and loans worth $40bn. In the 1990s economic growth was around 4%, but fell to 3% in last two years of that decade. In the first three years of 2000, the growth rate was around 3.5%. This was the period when the US imposed some sanctions and the IMF and World Bank attached hard conditions for loans.

Super-rich, desperate poor


THE PAKISTAN ECONOMY kick-started after 9/11. In the last four years, it received aid and loans worth $12bn. Annual remittances of Pakistani migrant workers in the US, Europe and Middle East have crossed the $5bn mark, with nearly $21bn in the last four years. This flow of money has pumped new life into the financial and banking system. Stock market shares are at a record high, real estate is booming. The banks are offering generous loans for consumer spending. Consumer loans stand at $6bn, when total bank deposits are around $20bn. It is not sustainable in the long run. These loans and increased remittances have developed and maintained a layer of the middle class. But this layer cannot be maintained in the long run. There is no doubt that the present economic growth has benefited the ruling elite, creating a new layer of arrogant super-rich. But it has left behind the majority of the people. The poor have become poorer: 88% of the population live on less than $2 a day; 63% live below the poverty line (less than a dollar); and 72% have no access to clean drinking water or proper sanitation. Inflation and price hikes badly hurt the working masses. The prices of food items and everyday essentials have doubled in the last few months. There are 200% to 300% increases in the cost of food items and other commodities. There was an increase of six rupees in the price of flour from 1947 to 1997 but, in the last ten years, the increase has been eleven rupees. The price of cooking oil has doubled in recent months. These unprecedented price hikes have made life even more miserable for the working class. There are 35,000 primary schools in the country without proper facilities like running water, sanitation, boundary walls and proper seating arrangements.

Seventeen thousand schools are without proper buildings, and 12,000 middle and high schools are without laboratories and scientific instruments. There is an acute shortage of power, with breakdowns becoming part of everyday life. Karachi, the largest city and industrial hub of Pakistan, faces power cuts lasting for hours. Unemployment is rising. Living standards are falling. The neo-liberal economic policies of counter-reforms, privatisation, deregulation, structural adjustments and trade liberalisation began in the late 1980s and early 1990s, known as the era of the ? free-market economy? giving rise to price hikes, , unemployment and poverty. Seventeen percent of the population was living below the poverty line in 1988, increasing to 34% in 1999 and increasing again in the last eight years. This shows the brutality and super-exploitation of the capitalist system, coexisting with feudalism, in Pakistan.

Trade union movement


THERE WERE A dozen trade unions in Pakistan at the time of independence. The rail union was the largest and most militant, and played an important role in the development of a strong trade union movement. There were other unions in Karachi? port and shipyard, the post office and a few industries. The trade union s movement flourished and gained strength in the last years of the 1960s. Industrialisation gave birth to the proletariat and this ? virgin proletariat? played the leading role in the revolutionary uprising of 1968-69. From 1967 to 1974 can be called the golden era of the Pakistani trade union movement. Thousands of new trade unions were formed and hundreds of strikes, occupations and protest movements were organised in this period. Before 1968, politics and political parties were all about the ruling class. There was no mention of the working class and its political role, in the media or among the intelligentsia. But that all changed. The working class rose onto the political scene with an exceptional revolutionary movement, which started as protests against the regime of Ayub Khan led by students in November 1968, growing to a general strike led by the working class within a few months. Workers started to occupy factories and peasants took over lands from feudal lords. In some areas, the peasantry organised armed struggle against the landlords. Tenants refused to pay rents. The working class took control of the cities and started to run the administration. A few cities remained under workers? control for more than two weeks. Socialist revolution could be smelt in the air. Socialism was the main slogan in the movement. The ruling class was terrified. The founder of the Pakistan People? Party (PPP), Zulifqar Ali Bhutto, came to its s rescue. There was no revolutionary party and leadership able to carry through the revolution and overthrow capitalism and feudalism to establish a workers?

state. Bhutto took advantage of the situation and derailed the potential socialist revolution into a reformist democratic movement. The working class lost this opportunity and later paid the price for this failure. Respective regimes viciously attacked the most militant and conscious layers of the working class, introducing laws to prevent strikes and the formation of unions, and banning trade union activities in many sectors of the economy. The trade union movement started to decline in the 1980s and has weakened significantly since, the last 15 years being the most difficult time. The collapse of Stalinist Russia and the Stalinist states of Eastern Europe also affected the trade union movement. Many left-wing unions, federations and their leaders fully capitulated to capitalism and started preaching free-market economy to their ranks. Leaders betrayed many struggles against privatisation and neo-liberalism. The main trade union leaderships also adopted the policy of compromise and opportunism against government attacks on workers and trade unions. Now, only 3% of workers are affiliated with trade unions. The trade union movement is at a crossroad. Compromise and capitulation will lead to further weakness and decline. But struggle and organised resistance can provide strength and much needed confidence to the labour movement. And the numbers of trade unions have begun to increase as new sections of the working class have started to organise. Some important struggles and strikes have emerged in last few years, including the historic strike of PTCL (telecommunications) and textile workers. Teachers are also fighting for their rights, and industrial workers have won some important battles. In next few years, there will be a resurgence of workers? struggles and strikes.

Rise & fall of the PPP


THE PAKISTAN PEOPLE? Party was founded in 1967 with just 35 people. S Zulifqar Ali Bhutto was the founding chairman. He was a big feudal lord from Sindh and served as minister in the military government of Ayub Khan. He was a clever politician. He correctly understood the mood of the masses and put forward a radical programme with socialist slogans. He put forward demands for bread, houses and clothes for everyone. He also talked about a socialist planned economy and a classless society. In the absence of an organised left party and movement, he came forward with radical anti-capitalist and anti-feudal slogans. The PPP became the largest political party in Pakistan in just a few months, in the aftermath of the revolutionary movement of the working class. It became the largest party in West Pakistan, while the Awami League trounced the other parties to win a landslide in East Pakistan in the first ever elections in 1970. The military and civil establishment refused to hand over power to the Awami League and this resulted in a civil war and then the separation of East Pakistan (now

called Bangladesh) in 1971. Bhutto became the leader of the rest of Pakistan. He came to power with popular support, introducing a few reforms in the early period of his rule, and nationalising more than 70% of the economy. But he was frightened of a strong working class and used repressive measures against the trade unions. He betrayed the working class and started attacking its advanced layers. His support started to decrease in the last years of his rule. The military organised a coup against him in 1977 after a violent right-wing movement against him. He was later hanged by the military government. His hanging again made him popular with the masses, because it showed he had refused to compromise with the military dictator. His daughter, Benazir Bhutto, became PPP leader in 1979. The PPP organized a movement for the restoration of democracy (MRD) in 1983 against the military dictatorship of General Zia-ul-Haq. Benazir compromised with the establishment and became prime minister after the 1988 general elections. It was a new beginning for Benazir and the PPP. She betrayed the millions of poor working people and party activists who had spent years in prison. She completely capitulated to the ruling class and US imperialism. The PPP government introduced neo-liberal economic policies and led the way for privatisation and counter-reforms. The PPP started to lose its support from 1993. Thousands of die-hard workers have left, emptying out the party. It is no more seen as a party of the poor and working class, but is still an electoral force which can win elections ? though only with the support of the establishment. The PPP leadership consists of feudal lords and big capitalists. It was never a traditional working-class party, but a party with a leadership from the upper and middle classes with solid support in the masses. The present day PPP is not even a shadow of the old party. It cannot be ruled out that in the absence of an alternative some sections of the working class might vote for the PPP again. But it would be a critical and protest vote that cannot be compared with the vote it received in 1970 or even 1988. The PPP is finished as a party of the masses and working-class people. The betrayal of the PPP was and still is a big blow to working-class politics. No working-class party exists in Pakistan at the moment.

What future for Pakistan?


MANY WESTERN AND US think-tanks and commentators are raising serious doubts about the future of this country. They raise the possibilities of Talibanisaton, disintegration and civil wars, but not the idea of a possible working-class uprising and revolution. There is no doubt that Pakistan is facing

many serious problems, including the rise of right-wing political Islam, an explosive national question, crisis in the state, and a possible economic meltdown. But under capitalism and feudalism there will be no future for working-class people. The ruling class has failed to solve the basic problems faced by the people. The ruling class has failed to establish a functioning democracy. There is no prosperity, social and economic justice or political freedom. There will be no change in the lives of the masses on this basis. The only class which can bring change and transform the lives of the working masses is the working class. Socialism is the only viable system to replace capitalism. The working class has not yet started to move but once it starts the whole political scenario will be different. There is a 43 million strong working class, one third of the total population. The Pakistani working class and masses have showed again and again that they have the potential, courage and capability to conduct a revolutionary struggle against the rotten rulers. The working class needs its own revolutionary party and leadership to organise the struggle. Such a party, with a clear programme, strategy and tactics, and mass support, can win the future for the masses. Pakistan is heading towards another showdown between the ruling and working classes. The outcome of this showdown will determine the future of this country and for the masses. The working class cannot take full advantage of independence and cannot enjoy real freedom without the overthrow of capitalism and feudalism.

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