Economic prosperity due to political stability in Pakistan

• Introduction
• The relationship between political stability and economic prosperity
• Is economic stability possible without political stability?
• Why is political stability mandatory for economic prosperity in Pakistan?
1. The Smooth Running of The State with Proper Implementation of Policies
2. Increase productivity and employment opportunities
3. Monitoring of institutional efficiencies
4. Making efficient long-term policies for the handling of resources
5. Creating an environment lucrative for investment

• How can Political Stability be attained in Pakistan?

• Critical Analysis
• Conclusion

Introduction:
Political stability, consistency in the smooth running of a state's political system is indispensable
for a country's economic prosperity. In fact, in a state where political instability has wreaked
havoc, economic growth rate indicators show miserable statistics in GDP development, private
investment, and inflation. According to an IMF report, data from 113 countries from 1950 to 1982
show that GDP growth is significantly lower in countries and periods with a high propensity for a
government collapse. Unfortunately, Pakistan is among those countries where political instability
has negatively impacted the country's economic life, increasing inflation, decreasing Foreign
Direct Investment (FDI), and enhancing corruption and poverty, among other factors. As a case in
point, starting from 1999, when the military regime ousted the civil government in Pakistan, the
country's economy was growing at a 4.2% rate. By the end of the military regime in 2008, the
economic growth stood at 1.7%. Therefore, it is obvious that the country's economic growth
remained low due to political volatility, increased corruption, and unemployment and low
production were also witnessed. Hence, political stability is a sine qua non to improve the
economic growth of Pakistan.

The relationship between political stability and economic prosperity:

Political stability is a condition where countries' political system continues without any
interruption from other actors. For instance, when there is the regular holding of elections,
strengthening of the legislature, executive and judiciary, and the non-interference of non-political
actors in the administrative machinery of a state, political stability can be achieved. On the other
hand, economic prosperity implies the improvement in the economic conditions of the people,
their living standards and jobs. In fact, a country with a strong and stable political structure can
experience stable economic growth. Indeed, a powerful, safe environment where a political
authority knows its duties and responsibilities also eliminates the uncertainty of the future. In the
same way, the economy in support of such a strong political environment will ensure steady
growth. In contrast, unstable structures in politics, of course, is the most important factor
affecting the economic stability of a state. Thus, there is an obvious link between political stability
and the economic stability of a country where the former is the precondition for the latter.

Is economic stability possible without political stability?

A politically unstable country cannot become economically stable because of a number of
reasons. To begin with, the political instability prevents the implementation and continuation of
policies. Besides, in a politically unstable country, the leader’s resort to populist projects and are
more interested in launching projects than introducing genuine reforms. The political instability
is eroding the trust of investors who fear that because of instability they might lose their
investment. So, they shy away from investing in Pakistan. As a result, the foreign direct investment
is almost drying up in the country. Even the native people avoid making investment. Another
manifestation of political instability is that leaders are launching populist projects and making
populist policies that lead to economic unsteadiness.

Why is political stability mandatory for economic prosperity in Pakistan?

Political stability is an important element for economic development as political instability has a
very acute problem of not only the developing countries but also in developed countries.
Unfortunately, political instability has caused multiple problems for Pakistan, including a lack of
foreign direct investment, vulnerable law and order situation, rampant corruption and nepotism,
and interference of military elites in the country's political system. All of these issues have
wreaked havoc on the country's economic development, increasing inflation and poverty and
decreasing the people's living standards. Therefore, it is an absolute need for political stability in
Pakistan so that economic prosperity can be the outcome. The following deals with the necessity
of political stability for economic development in Pakistan.

1. The Smooth Running of The State with Proper Implementation of Policies:

Political stability is the prerequisite for economic growth as it ensures the smooth running
of the state with efficient implementation of policies. Economic growth in Pakistan cannot
be achieved if the country's policies are not executed religiously; the gap in theory and
practice creates room for uncertainty. For example, under the current legal dispensation,
the exports of computer software, IT Services or IT-enabled services are exempt from tax
as provided under clause (133) of Part-1 of the Second Schedule to the Income Tax
Ordinance, 2001. However, if there is a violation of the policies, then the
exports of such items will be affected, impacting Pakistan's export volume. Thus, this
would lead to economic volatility.
2. Increase productivity and employment opportunities:
 The political stability in Pakistan can uplift its economy through increased productivity of
the industrial units and the creation of employment opportunities. If there is an improved
law and order situation due to political stability, the industrial units working in the country
can work efficiently. This would increase their productivity and yield, which would, in turn,
enhance the supply and exports of Pakistan. Moreover, such units will be able to expand
their industries or businesses, generating employment opportunities for the people.
Therefore, such positive impacts would help the economy of Pakistan to grow.
3. Monitoring of institutional efficiencies:
One of the most important aspects of political stability in Pakistan would be efficient
monitoring of institutions which can help its economy. It is a universally acknowledged
truth that the ineffective monitoring of the institutions can lead to rampant nepotism and
corruption, which hinders the economic growth of a country. Nevertheless, when there is
political stability in Pakistan, all the institutions, including governmental, private or semi-
government, would be efficiently observed, decreasing the chances of corrupt practices
and increasing their efficiencies.
4. Making efficient long-term policies for the handling of resources
Political stability implies the efficient handling of a country's natural resources due to the
government's long-term policies. However, in Pakistan, there is a lack of long-term policies
as the incumbent government discards the previous government's policies. So, the newly
elected government opted for short-term policies that proved futile in the long run. For
example, most of the policies adopted by the government revolve around infrastructure
development that is achieved in a short time. This decreases the chances of making
policies for social reforms, such as education or health, as they require more time to
execute. The lack of such policies hinders the development of human resources, which is
a sine qua non for the economic uplift of a country. Therefore, political stability is the need
of the hour for Pakistan, so the long-term policies would help economic prosperity.
5. Creating an environment lucrative for investment
The political stability in a country attracts foreign investment, paving the way for economic
development. In Pakistan, the lack of political stability and worsened law and order
situation has resulted in low FDI throughout its history. Moreover, due to continuous
political volatility, the economy of Pakistan has become aid driven. Nevertheless, the aid
is also not spent for the required purpose making the donors lose interest. Thus, political
stability is the need of hours to enhance the chances of investment in the country. As a
result, the economy of Pakistan will get the required boost and would grow.

How can Political Stability be attained in Pakistan?

As evident from the above-mentioned reasons, political stability in Pakistan would lead to
economic prosperity, so it is pertinent for Pakistan to take pragmatic steps to attain political
stability. First, the independence of the judiciary needs to be maintained as a non-biased and
neutral judicial system serves the country's constitution well. The judiciary in Pakistan needs to
be free from political meddling, which can endanger its integrity as an institution. For this
purpose, the separation of power among the pillars of the state in the constitution of Pakistan
needs to be followed in its true spirit. Second, for attaining political stability, the national interest
needs to be above the personal and vested interests of the political and military elites of the
country. For this purpose, any action proved to be against the integrity of the state needs to be
punished for setting an example. Third, there needs to be an effective monitoring system in the
government institutes to deal with the menace of corruption. Moreover, this would help to keep
a check on the efficiency and productivity of the institute in utilizing the given revenue or aid for
the development of the people. Fourth, the law-and-order situation of the country needs to be
managed well to deter the notorious elements in the society, such as extremist religious groups,
which decreases the chances of investment in the country. If these steps are followed religiously,
the menace of political instability will be managed in Pakistan.

Critical Analysis:
In a critical diagnosis, various elements in the country have remained responsible for the
worsened political scenario of the country. First and foremost is the role of military leadership in
interfering in the country's political affairs. Initially, it was directly involved in politics through
martial law, and recently, it stayed backstage but still maneuvers with the system. The continuous
military coups have not led a truly representative political culture to develop in Pakistan, thus,
impacting the political stability. Moreover, the power play between the opposition party and the
government has largely impacted the country's political system. The main objective to gain power
and seats has blinded them to the country's national interests. Therefore, their strategies to
weaken each other have negatively impacted the political stability of Pakistan, hindering
economic growth.

Conclusion:
In a nutshell, political stability is a prerequisite for the economic prosperity of a country. In
contrast, political instability shortens the policymakers' horizons leading to suboptimal short-term
macroeconomic policies. This leads to a more frequent switch of policies, creating volatility, thus,
negatively affecting the economic performance of a country. Unluckily, the political instability in
Pakistan has badly damaged its economy. Despite its enormous economic resources, the
economy has remained in the dark shadows during most of its historical discourse due to political
volatility. Moreover, political instability has flourished corruption and a lack of efficient
administration. Thus, the present and immediate need of the time is a stable political system,
which is incumbent to run the smooth affairs of the state and enhance the chances of investment,
employment and productivity.