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Usman Riaz 15-10644 Prof. J. Austin 7th June 2012 English 103 (K) Economic Aspect of Zulfikar Ali Bhutto's regime Zulfikar Ali Bhutto was a socialist politician in the history of Pakistan who adopted the policy of nationalization in the constitution of Pakistan. He nationalized banks industrial sectors but in my point of view, the nationalization was a big political blunder. He raised the slogan of socialism which later on proved as flirtation of socialism as fact proves main lot of feudal lord, landlords, and aristocrat entered in the Pakistan Peoples Party and were also adjusted on the key post and stake holders in the state. Due to his policies Pakistan has suffered from economic loss and there was great decrease in GDP in time from 1971 to 1977 and he became controversial figure in Pakistan during his regime there was no single industrial project in 25 years in nationalization. The first research published on the economic policies of Bhutto was published by Oxford University Press, written by Lawrence Ziring, Pakistan in Twentieth Century. In the research paper he deals with Z.A. Bhuttos feudal attitude and his strategies to make Pakistan centralized state. Second research paper was published by the student of IBA Karachi which discussed the complete economic depression in the Bhutto regime. Moreover, there was a book published Pakistan economic issues by S. Akber Zaidi Bhutto was son of feudal and natured to rule. December 16, 1971 Bhutto condemned Yahiya for failing to protect Pakistan's unity and suppress political activities,

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due to this

disarray Yahiya resigned and Zulfikar Ali Bhutto was a first opportunist

democratic leader who drew strength from the circumstances from which Pakistan was suffering and became the first Chief Martial Law Administrator, the first civilian to hold such position among the new nation. His earlier actions had been predicated on that he would be one day assume the leader of Pakistan. Nation was despaired of its future due to civil war and breaking of Pakistan and Bhutto play a role for which he had prepared from the day he entered the Ayubs cabinet. He made decision to form Pakistan People's Party (PPP) but the PPP was not truly democratically organized or managed political party. As the president of Pakistan, Bhutto addressed the nation via radio television, saying My dear countrymen, my dear friend, my dear students, labours, peasants... those who fought for Pakistan... we are facing the worst the worst crisis in our country's life, a deadly crisis. We have to pick up the pieces, very small pieces, but we will make a new Pakistan, a prosperous and progressive Pakistan. (Ziring 371) Bhutto being a president used different political statements to attract wide an array of peoples for his succession to the presidency. Bhutto adapted socialist expressions and cast all such ideas to proceed a course that he believed strengthened the redesigned Pakistan state but in real Bhutto was intoxicated with power , Bhutto a Chief Martial Law Administrator not only dominated the civil bureaucracy but also cut down the power of Military. The civil bureaucracy was placed at his beck and call and leaders of armed forces served him. Zulifkar Ali Bhutto was ruler who enjoys the absolute power and all resources of Pakistan by exploiting the policy of socialism among the peoples of

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Pakistan. He merged Islamic values liberal democratic ideas with socialism. During launching the election campaign, he made public speech in Nishtar Park, Karachi in January 4, 1970 where he said, I would like to discuss the principles of the Peoples Party. As I have explained, Islam is our first principle, and then comes democracy. We shall lay down our lives for sake of Islam . We have struggled for democracy. The people of Pakistan have struggled for democracy. In democracy the people are represented and their opinion carries weight. That is why the people of Pakistan want democracy and we have struggled for it. This struggle was not against our religion. There is no conflict between our religion and the principles of democracy. There is no party in Pakistan which does not stand for democracy. If democracy is not against Islam, the principles of equality are also not against Islam. That is why we say that our economy should be based on socialism. My dear brothers and sisters, if there was any conflict between Islam and socialism, I swear that we would have rejected socialism. I am a Muslim first and need no certificate from any party to that effect. Has politics in Pakistan dropped to a level that a Muslim should dub another Muslim as a 'kafir'? If you want to look for 'infidels,' you may go to India. If you call a Muslim a kafir, you do a great disservice to Islam. (Panhwar 5) Combining Islamic tradition and values with secular socialist thought was Bhuttos nationalization. He adopted the term in the manifesto of PPP that he would concerned with the nations unbalanced economy and he would be translate into workable policy and claimed to serve the interest of masses not the captains of industries.

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During his public speech in Nishtar Park Karachi January 4, 1970 he stated in this speech, Pakistan was not made for 22 families to amass wealth. The peoples have fed on false promise for the last 22 years. After all there is an end to patience. It is now running out. We want change in economic system in order to improve the lot of peoples. A constitution or parliamentary system makes no difference unless the whole economic fabric is changed. Talking about democracy sounds good only in politics but for the progress of the Pakistan and the prosperity of peoples, it is imperative to end the exploitation by the 22 families. That is why we call for the setting up of system, with in the frame work of Islamic principles, which would benefit the masses. A country with economically backward people can never progress. Our opponents don't object to capitalism and feudalism, but they were averse to socialism. Is it because socialism provides some good for the millions of poor and oppressed peoples of Pakistan? Capitalism as you know has already devoured almost all banks, insurance companies and factories. This does not bother out friends when the poor talk of bread, shelter they reject it as un-Islamic. (Panhwar 22)

In 1972 Bhutto ordered to nationalize the industries of ten categories, including iron and steel, vehicles, tractors, basic chemicals, petrochemicals, cement, and public utilities. These industries came under state control and a Board of industrial Management was created chaired by Dr Mubsher Hassan, to oversee the implementation of the order, 31 industrial sectors, 13 banks, over dozens of insurance companies, 10 shipping companies

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and 2 petroleum companies were taken under the stated. In which 22 industries, 9 banks, 9 insurance companies, 3 shipping companies and 2 petroleum companies belonged to 22 leading families in Pakistan. This had bad effect on the psyche of big business man and Pakistan's industrial development was abolished. The projects that were related to automobile industries and fertilizers were employment generating and capital intensive were totally flopped and sponsors of these projects resigned themselves. Leading industrialists like Ahmed Dawood, Fakher ud Din Valika and Habib Ullah Khattakh were imprisoned; names of all leading industrialists were placed under exit control list. In 1974 Dawood managed to go abroad and not return to Pakistan till execution of Z.A Bhutto. While in that period of time Ahmed Dawood set up oil exploration of Oil Company in America. Five banks Memon Cooperative Bank, Lahore Commercial Bank, Punjab Cooperative Bank, Pakistan Bank Ltd, Bank of Bahawalpur, one shipping industry named as Central were taken under state control these were belong to Ahmed Dawood. It was very surprising and horrible fact that several leading families of the 1970 had not set up a single big industrial project in 25 years since nationalization and this thing created very bad effect on the economy of Pakistan. This trend in business community remained and most of them set their business in different country. The big businessman lost their assets due to policy of nationalization. The Sagol industrial state was the example of this elimination period this group last two third of their assets and they shifted in Saudi Arabia during Bhutto regime. In 1971 Bengali group of Industries was Rangoonwala representing 45 big companies in Pakistan when nationalization uprooted him he migrated to Malaysia and invested his money in edible oil industries. There was same story of another businessman late Chaudary Mahammad Latif who was founder and chairman of

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Batala Engineering company (BECO). This company was ranked as one of the top three machine company of subcontinent. Half of Wagner equipment was obtained by India, as a war reparation from Germany in 1933. In 1970 this industry was launching the domestic manufacturing of textile machinery. It was pride of Pakistan but Bhutto ruined it because in 1998 company was collapsed. If Bhutto did not take stupid decision of nationalization then this industry would not have flourished like Tata industry in India. There were two major factors which totally ruined the Pakistan's economy in 1971, 1st was Pakistan lost its East Wing which was major producer of jute and 2nd was Bhutto's decision to nationalize all major industrial sectors. In 1972 Pakistan GDP fell to just 1.2%. To overcome this economic crises Bhutto devalued the currency by 131% which boasted export to 153% and Bhutto increased several development projects to achieve the average growth rate of 7.5 till 1974. During 1974 to 1976 Pakistan saw worst floods, which devastated the large areas of cultivated land, cotton crop was totally destroyed and due to these factors the average GDP was just 3.6%. If we compare era of Ayub Khan Era which is assumed as golden period of economic history because decade of 1960's stands out the as the decade with best performance that throughout 60's Pakistan maintained the GDP of 6.2% which the reasons was extensive growth of industrialization and development. During the first five years of Ayub Khan average GDP was raise to 16.9% but in 1966 the GDP was fell to 3.1% because war with India and continued to grow to reach the height of 9.8% in 1970. During regime of Zia-ul-Haq, he distances the economy from state capitalism. This privatization was carried out gradually. The inflow of forign aid from US increased

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because of Pakistans role in war against USSR. This aid helped Zia to finance industrial sectors. This caused increase of GDP by average of 6.5%.

Table 1 Source; http.scribd.com/doc/13225438/Economic-History-of-Pakistan

Shahid Javid Burki is a professional economist and served as vice president of the World Bank he also said that Bhuttos nationalization policy had adverse effect on Pakistan economy. According to him the economy during 1970 poorer than the 1960 in which he also mentions that middle class also suffering from his policy of nationalization. He also concludes very strange effect of Bhutto's policy that beneficiaries were not poor class but they were PPP leaders, their family members and supporters. The PPP leaders made new industrial commercial states in regime of Bhutto and flourished themselves. (Bhutto Regime And Nationalization)

In my personal opinion nationalization is the good policy if leader really wants to apply it in the state because according to its theory nationalization means equal division of wealth and resources for all peoples of country where everyone can benefit from them but Bhutto's regime the condition was different Bhutto used policy of nationalization for

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his purpose he exploit the working class with philosophy of nationalization and demolish the big industrial families to make his industrial states. He benefited both sides from ruling class, and, working class. He increased the rights of workers to his promise of economic uplift was uplift in the slogan of Roti, Kapra and Makaan but his nationalization manifesto pledge the industries. The majority of peoples of Pakistan lived in villages and mostly nwere landless peasants. They lived for generations in extreme poverty oppression of landlords and unable to change their condition so they were greatly inspired by this slogan and young educated peoples who are unable to get employment, they were also resentful from this economic system and they also joined Bhutto revolutionary program. Bhutto was created the great compassion for deprived class to mobilize them but Bhutto used them to create his government.

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Works Cited
"Bhutto's Nationalization." Tripod. 1 June 2012 <richpak.tripod.com/bhutto.htm>. "Economic History of Pakistan." Scribd. 1 June 2012<www.scribd.com/doc/13225438/Economic-History-of-Pakistan>. Panhwar, Sani. "Marching Towards Democracy: A collection of articles, statement and speeches 1970-1971." Sang-E-Meel, n.d. 5. reviewessays. "Bhutto Regime And Nationalization." 26 October 2012. Review Essays. 1 June 2012 <reviewessays.com/print/Bhutto-Regime-Nationalization/27051.html>. "Legacy of Bhutto." Ziring, Lawrence. Pakistan in Tweentieth Century. Karachi: Oxford University Press, 1997. 371.