Pervez Musharraf: Butcher of democracy or architect of development? – Dr. Niaz Murtaza

The dismal situation today is feeding nostalgia for Musharraf. Was his rule worth it? Not for democracy-idealists like me! However, since many people can tolerate dictatorships if they deliver, I consider this question pragmatically. Even pragmatically, dictatorship cannot be a permanent feature in Pakistan—more polycentric than Africa where dictators rule forever— where it has a shelf life of 10 years due to external and internal pressures (even from army ranks). But dictators do have greater powers as they control ISI and can take decisions without worrying about vote banks or parliamentary strength. Thus, due to both reasons, it is not enough if dictatorships out-perform democracies during their tenure. They must effect structural changes which benefit the country in the long-term. This was the stated objective of all our dictators and actual contribution of Asian dictators, whose performance stokes much of our fondness for dictators. Thus, I judge Musharraf by his legacies and not character, intentions, efforts or even immediate results, which may be better than politicians. Viewed so, that things are so bad so soon after him is as much proof of his lack of legacies as of the incompetence of successors. However, let us take a deeper look to be fair to him.

Politically, some of his legislations have endured, such as neutral caretakers. However, his main political scoresheet on the one hand consists of an absence of legacies, as on Kashmir, in reforming politics despite tall promises, in increasing the capacity and independence of bureaucracy through constitutional cover, or even in tackling dacoities. On the other hand, it is in the form of negative legacies, e.g., Taliban insurgency due to his earlier support to them; Balochistan insurgency; distortion of constitution; and attacks on media and judiciary, whom he should have strengthened to act as checks later on if he was serious about durable change.

Economic management improved over the 1990s. The averages of GDP growth, foreign-reserves-GDP, FDI-GDP, current-account-deficit-GDP, fiscal-balance-GDP, and public-debt-GDP ratios improved and poverty reduced significantly (this last point is contested). However, Pakistan also faced a more favorable external environment under him. Long-standing US sanctions were dropped after 9/11, which led to significant economic inflows from US, World Bank/IMF and western markets. These initially politically-facilitated inflows helped improve foreign reserves, public debt and current account. Second, the global economy and developing countries overall performed better until 2007 than in 1990s. Thus, luck also contributed to improved performance under Musharraf. To gauge its contribution, it is instructive to look at indicators for the first two years of Musharraf before 9/11. However, even a democratic government would have achieved at least somewhat better results over the 1990s due to luck. This reduces the credit due to Musharraf even on the less stringent criterion of tenure to tenure comparisons.

In terms of legacy criterion, since many indicators above improve even otherwise, I look for structural changes in fiscal health, industrialization, export-competiveness and human capital. While the fiscal-deficit-GDP ratio improved, average tax-GDP ratio deteriorated. Thus, fiscal balance improved by slower public expenses growth and external aid. The first is not desirable as we must spend more on education, social services, infrastructure etc. The second is not as sustainable as increasing tax-GDP ratio. An increase in tax net with constitutional cover would have been a legacy difficult to reverse. Similarly, average manufacturing-GDP ratio barely increased while average fixed-investment-GDP (though increased during 2005-07) and export-GDP ratios went down. Thus, current account situation improved as imports grew slower than exports and not because of greater export-orientation. Again, a major industrial and export expansion would have been difficult to reverse. However, much incoming resources went to consumer loans, instead of export industries, unlike in Asian Tigers who tightened consumption initially. Poor basic education fuels militancy and economic stagnancy. However, the education-expense-GDP ratio remained stagnant (Analysis based on World Bank and SBP data).

In summary, the only enduring economic legacy is contested reductions in poverty at macro-level. True, micro-level analysis highlights worthwhile initiatives in higher education/infrastructure etc. However, they did not improve economic fundamentals even after 9 years as there was no industrial strategy—the recipe behind the success of Tiger dictators. In its absence, external resources created consumer credit, stocks and property bubbles that later burst. This failure to even devise a strategy in 9 years is the biggest rebuttal to the ‘if only he had more time’ argument and a reality check to anyone imaging that Musharraf put Pakistan on the path of Tigers. Asian dictators, armed with strategies, effected structural change in 5-10 years. The absence of structural change despite greater external resources, powers and longer tenure than single democratic governments means that his performance on legacy criterion was poorer.

More importantly, all three dictatorships produced similar results. Being illegal, they distorted political process to survive. Realizing that army in polycentric Pakistan cannot rule alone, they propped fringe politicians less popular but as dishonest as ones dismissed. Consequently, governance quality degenerated. Even this arrangement didn’t work and they finally had to bring back mainstream parties. None left behind significant economic legacies beyond temporary improvements achieved partly due to American support (for the first time USA is now heavily supporting a democratic regime in Pakistan). However, even these were erased by the high cost of political strife induced by dictatorships.

None of this means that democracy brings immediate results. The current performance dispels that illusion, even after factoring in global recession and Musharraf’s negative legacies. But it does mean that somewhat better non-structural economic performance—the maximum that dictatorships achieve in Pakistan–is worth sacrificing for the long-term stability that democracy brings. In fact, some political dividends are already apparent, e.g., the tiny steps towards reconciliation in Balochistan, and greater resolve on militants at least from a federal government unbeholden to militants (unlike Musharraf). However, the overall incompetence shows how far we have to go. Give all this, I prefer corrupt politicians to honest dictators—in the hope that decades of democracy will throw up better politicians. Fortunately, the external environment is less tolerant of dictatorships and future dictators will find it difficult to even produce economic mirages (budding dictators, beware). So my advice is to stop praying for dictatorships and pray for improved democracy.

Dr. Niaz Murtaza is a Research Associate on political economy issues at University of California at Berkeley. This article recently appeared in Dawn.



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