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San José State University
Department of Economics |
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applet-magic.com Thayer Watkins Silicon Valley & Tornado Alley USA |
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Economic History of Pakistan |
Of all the major countries of the world it is only Pakistan that appears to be faced with insurmountable problems. Although put together as the predominately Muslim regions of British India it did not have ethnic-cultural coherence in addition to religious coherence. The northern and northwestern portion of Pakistan is Pushtun and closer ethnically to southern Afghanistan than to the west Punjab region or the Sindh region.
There have been major mistakes in policy starting from the very beginning with the formation of the country with two wings separated by 1600 miles of Indian territory and incompatible linguistic and cultural differences. The blighted policy choices continued with an early adoption of socialism as the political economic goal for Pakistan.
The reoccurrent military takeovers of the government may make Pakistan appear to be more unstable than it really is. Pakistan's stability is better perceived if one notes that:
Pakistan is not a country with an army; Pakistan is an army with a country.
(To be continued.)
The 165 million Pakistanis are divided ethnically, linguistically and religiously as follows:
| Religious Affiliation of Pakistanis | |
|---|---|
| Sunni Muslim | 77% |
| Shi'a Muslim | 20% |
| Hindu, Christian, Ahmadiyyas | 3% |
| Ethnic Affiliation of Pakistanis | |
|---|---|
| Punjabi | 66% |
| Sindhi | 13% |
| Pakhtan (Pathan) | 9% |
| Muhajir | 8% |
| Balochi | 3% |
| Other | 1% |
| Native Language of Pakistanis | |
|---|---|
| Punjabi | 48% |
| Siraiki (Punjabi dialect) | 10% |
| Sindhi | 12% |
| Urdu | 8% |
| Pakhtu (Pashto) | 8% |
| Balochi | 3% |
| Hindko | 2% |
| Brahui | 1% |
| Others | 8% |
Note that Urdu is the official language of Pakistan even though it is the native language of only 8 percent of the population. Brahui is a language in the Dravidian family spoken in southern Balochistan.
In addition to the great ethnic diversity of Pakistan there is the major political problem that most of the ethnic groups within Pakistan are fractions of those ethnic groups internationally. That is to say the Pushtans are divided between Pakistan and Afghanistan; the Balochis are divided between Pakistan, Iran and Afghanistan and the Punjabis are divided between Pakistan and India. This is shown in the following map.
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Jinnah was a staunch advocate for protecting the interests of the Muslims of British India as an ethnic population group but not as Muslims per se. On this matter Jinnah said in address to Pakistanis upon being elected leader,
You will find that in the course of time Hindus will ceased to be Hindus and Muslims cease to be Muslims, not in a religious sense, because that is the personal faith of each individual, but in the political sense as citizens of the State.
Muhammad Ali Jinnah was born on Christmas day in 1876 in Karachi. His family were merchants and reasonably well to do. Young Ali was tutored at home until he was about eleven. He thereafter attened secular school. Upon successful completion of secondary school his family sent him to England for advanced education and to develop contacts that would be useful in business later in life. Jinnah however disappointed his family hopes for him to pursue a career in business. Instead he choose a career in law. He completed his legal training at age 19.
(To be continued.)
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From 1951 to 1958 Ayub Khan continually increased the power and political prerogatives of the military. In 1954 Ayub Khan was the minister of defense in the government as well as commander of the army. Finally in 1958 he carried out a bloodless coup d'etat and ruled Pakistan for the next decade. His justification for his coup was that the politicians were inefficient and corrupt.
On his own Ayub Khan initiated major policy programs and shaped the direction of Pakistan politics permanently. The most important of these policy program was the development of alliances with the powerful neighboring countries of Pakistan and India; i.e., China and the Soviet Union. He also development a political alliance with the United States. These alliances were primarily to offset the imbalance between the power of India with respect to Pakistan.
Another major change for Pakistan initiated by Ayub Khan was the creation of a new capital. At independence Pakistan's capital was situated in Karachi. In 1959 Ayub Khan decided to build a new capital that could be better defended from possible attack by India. He chose a site near the Margalla Hills and near Pakistan's third largest city, Rawalpindi. The new capital was to be named Islamabad (home of Islam). By 1963 the transfer of the capital from Karachi to Islamabad was complete.
Within Pakistan Ayub Khan imposed martial law to suppress what he considered the evils of black marketeering and hoarding. He also carried out a campaign against the corruption of politicians and bureaucrats. One of the punishments he imposed upon politicians was a prohibition against anyone convicted of corruption from participating in politics for fifteen years. This was a very effective means of destroying his political opposition. Ayub Khan also amended the laws concerning newspapers thus giving himself the power to suppress or close down newspapers that opposed him or his policies.
Ayub Khan carried out a program of confiscation of land from the landed aristocracy and selling it. This had the effect of creating a class of land owners with medium sized holdings and reduced the power of the large land holders who opposed him. The peasants on the other hand participated very little in this land redistribution scheme.
Ayub Khan did carry out some programs of changes in social and political institutions which were beneficial to the lower classes. He created political representation at the local level in regional councils for groups of villages having a combined population of about ten thousand. He supported revisions in the more archaic elements of marriage and family law. He tried to rebalance the distribution of political power between the east and west wings of Pakistan by designating Dhaka in East Pakistan as the site of the legislature while the administrative capital remained at Islamabad in West Pakistan. He negotiated a resolution with India of the problems concerning the division of the waters of the Indus River Valley system. The negotiations culminated in the Indus Waters Treaty of 1960. These measures were enough to give Ayub Khan the reputation as being a statesman as well as a dictator.
By 1962 Ayub Khan was ready to lift martial law and allow the election of government officials under a new constitution. He formed a political party based upon the old Muslim League which was named the Pakistan Muslim League (PML). Opposition parties formed and showed some effectiveness in political organization. Ayub Khan and the PML won the election of 1962 but the result showed that his political opposition despite years of suppression and persecution was not dead.
As an elected leader Ayub Khan was able to strengthen Pakistan's alliance with the United States. This turned out to be important when war broke out with India in 1965 over Kashmir and border disputes elsewhere. The war changed little and a cease-fire was arranged through the United Nations. In 1966 Ayub Khan and the prime minister of India signed a treaty called the Tashkent Declaration. The Pakistan public, not being well informed about the relative imbalance of Pakistani military power with respect to that of India, treated the Tashkent Declaration as Ayub Khan's surrender to India.
Political protests to Ayub Khan's rule and by 1968 he was on the defensive. In 1969 it was necessary to declare martial law again. Ayub Khan resigned in 1969 turning the power in Pakistan to the administrator of the martial law, Yahya Khan.
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Ayub Khan had promised fair elections and Yahya Khan intended to fulfill that promise. In late 1969 Yahya Khan announced that elections were to held in October of 1970 to chose delegates to a National Assembly that would write a new constitution for civilian government.
Near that designated election time a tropical cyclone hit East Pakistan, a storm in North America would have been called a hurricane. Much of the devastation of a tropical cyclone comes from the storm surge, the rise in the water level due to the lower pressure in the cyclone center and the winds driving the water against a shore. East Pakistan with its low altitude throughout the country is particularly vulnerable to a storm surge. The cyclone of 1970 was terrible for East Pakistan and the government could do little to ameliorate the situation. Nevertheless the people of East Pakistan were resentful at how little the national government in West Pakistan was able to do.
Because of the cyclone the national election was postponed until December of 1970. There were to be 300 delegates selected for the National Assembly. In addition there were to be 13 places filled by appointment of women, seven from the East Wing and six from the West. In this election the seats were to be apportioned strictly on the basis of the population. East Pakistan would elect 162 delegates and West Pakistan 138. In the past elections the apportionment was equal numbers of delegaltes from the East and the West.
Since the creation of Pakistan the country had been dominated by politicians and military leaders from the West Wing despite the significantly larger population and economy in the East Wing.
The dominant political party in the East Wing was the Awami League headed by Mujibur Rahman. Rahman, popularly known as Mujib, and his Awami League had been campaigning for some years for a six point program that consisted of
Clearly the Awami League was promoting a political change of Pakistan to a confederation of nearly autonomous provinces. Such autonomy appealed not only to the East Wing but to the Northwest Frontier Province and to Balochistan as well.
In Punjab and Sindh provinces the dominant political party was the Pakistan People's Party (PPP) founded and led by Zulfiqar Ali Bhutto, a charismatic politician who had been minister of foreign affairs in the government of Ayub Khan. Bhutto's program was nationalistic democratic Islamic socialism. In the election campaign he promised bread, clothing and shelter for everyone but he also promised a thousand year war with India.
In the election held December 7, 1970 the Awami League won 160 out of the 162 seats allocated to East Pakistan. An affilate of the Awami League, the National Awami League was the most popular party in the Northwest Frontier province and Balochistan winning the most seats there. Thus Mujib had won an outright majority of the seats in the National Assembly and would have the right to form a government and dominate the writing of the new constitution.
Ali Bhutto's PPP won heavily in the provinces of Punjab and Sindh. The PPP had significant representation in the National Assembly but not enough to guarantee Bhutto and the PPP an important role in an Awami-led government. Most politicians acquieced to an Awami East Wing-oriented government. Yahya Khan referred to Mujib as the next prime minister of Pakistan. But Ali Bhutto was not willing to let the rules of parliamentary democracy prevail. He declared that Pakistan had two majorities. He found a ploy that would prevent the Awami League from forming a government. He announced that the PPP delegates would not join the National Assembly and thus deprive it of a quorum. In his intransigence Ali Bhutto destroyed the fragile ties between the East and West Wings of Pakistan.
Yahya Khan tried conscientiously to get Bhutto and Mujib to reach some compromise. Yahya Khan brought Ali Bhutto, Mujib Rahman and himself together in Dakha to try to resolve the impasse, to no avail. The tragic sequence of political chaos, death and destruction can be laid at the feet of Ali Bhutto.
The political impasse led to protests and demonstrations in the East Wing which were interpreted as rebellion against the martial law government of Yahya Khan. Mujib Rahman was arrested and flown to West Pakistan to be tried for treason. Yahya Khan then declared the Awami League illegal and and banned political activity. Censorship was imposed upon newspapers throughout Pakistan. This definitely escalated the protests into outright rebellion. The government in the West flew in troops to the East by way of Sri Lanka. The local militias and police units in the East joined actively in the rebellion.
The West Wing troops suppressed the rebellion at the cost of many thousands of casualties. The atrocities committed indicated that the West Pakistani troops had very little empathy for the culturally alien Bengalis despite the fact that they were fellow Muslims.
Refugees started pouring across the border to where the people were fellow Bengalis who had empathy for them. An army officer, Major Zizur Rahman, declared East Pakistan to be the independent nation of Bangladesh and a government in exile set up in Calcutta. The number of refugees in India soon reached ten million and the government of India announced support for the rebellion and the new nation of Bangladesh. Indian troops invaded the territory occupied by the West Pakistani troops and soon defeated them, capturing about ninety thousand. Other nations around the world besides India began to recognize the sovereignty of the new nation of Bangladesh. Pakistan, however, did not recognize Bangladesh until 1976, five year after its creation.
Bhutto, the agent of the debacle, blamed Yahya Khan for the military defeat of the Pakistani army by the Indian army and the loss of the East Wing. Yahya Khan resigned and Zulfiqar Ali Bhutto was declared president and chief martial law administrator of Pakistan in December of 1971.
Here is Pervez Musharraf's description of the events of that period of Pakistan history.
In 1970, before the elections could be held, there was a devastating cyclone in East Pakistan, with winds of 120 miles (190 kilometers) per hour. It was accompanied by a huge tidal wave, or tsunami, the worst of the twentieth century and left 200,000 people dead. The response of President Yahya Khan and his government was callous in the extreme. It took him quite sometime to react. He did not even visit the devastated province for many days, and then only under pressure. The people of East Pakistan felt angry, alienated, and badly let down, as if they were a colony instead of part of the country. I am convinced that the government's attitude during this disaster reinforced the impression among East Pakistanis that the western wing did not care for them, and that this brought many more voters behind Sheikh Mujibur Rahman's Awami League.Pakistan's elections of December 7, 1970, were among the most fateful in its history. The country still included East Pakistan (now Bangladesh), where more than half of the population lived. The actual winner of the voting was Sheikh Mujibur Rahman and his Awami League, with all its seats coming from East Pakistan. They got 160 of the 162 seats for the National Assembly from East Pakistan, out of a total of 307. The two largest provinces of Pakistan's western wing, Punjab and Sindh, voted for Zulfikar Ali Bhutto and his PPP (Pakistan People's Party), which got 82 out of the 138 allocated to four provinces in west Pakistan. Neither of them was represented in the other wing.
Immediately after the elections Bhutto more or less declared himself prime minister, suggesting such bizarre ideas as two constitutions, one for East Pakistan and the other for "West Pakistan," with a prime minister for each wing, forgetting that the latter was no longer one but four provinces and there was no such thing as "West Pakistan" except in a geographic sense. He played on the fears of the west Pakistanis that the Awami League would use its majority to foist a constitution on Pakistan on the basis of its campaign promise to give maximum autonomy to the provinces, leaving only defense, currency, and foreign affairs with the center. He conjured up fears of everlasting domination by the Bengalis, forgetting that they too were Pakistanis and the Awami League had won the elections perfectly legitimately through democratic means. Bhutto even threatened members elected to Constituent Assembly from west Pakistan that he would break their legs if they attended its inaugural session in Dhaka, East Pakistan and that if they insisted on attending they should buy a one-way ticket. The Constituent Assembly was supposed to make a new constitution for Pakistan in three months, but it never met, not least because of Bhutto's threat. It was a nexus between Bhutto and a small coterie of military rulers that destroyed Pakistan. The myopic and rigid attitude of Sheikh Mujibur Rahman didn't help matters, and he played into Bhutto's an Yahya's hands by remaining rooted in East Pakistan, forgetting that now he was prime minister-elect of the whole of Pakistan and needed to tour the four provinces of the western wing in order to reassure the people there and allay their fears.
Under pressure from the wily Bhutto, and no doubt because he didn't want to lose power, Yahya Khan postponed the meeting of teh Constituent Assembly indefinitely on March 25, 1971. He did not stop there. The very next day he outlawed the Awami League and arrested its leader, Sheikh Mujibur Rahman, the clear winner of the election. This act infuriated the Bengali masses of East Pakistan, who were already agitating and had a sense of deprivation and alienation. Tempers rose so high with the arrest of the undisputed Bengali leader that an open insurgency was launched by the populace. This was massively supported by the Indians from across the border. With the army completely bogged down in quelling the insurgency, India stabbed Pakistan in the back by blatantly attacking it across its border on several fronts in East Pakistan on November 21, 1971. All-out war between India and Pakistan commenced on December 3, 1971.
Pervez Musharraf, In the Line of Fire, pp. 52-54.
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Zulfiqar Ali Bhutto was what might be described as a populist politician, although that American term would be hard to justify for any Pakistani politician. His life was one of success and tragedy.
Bhutto was born in the Sindh province of British India in 1928 to an aristocratic Rajput family that had converted to the Shi'ia version of Islam. His family was influential in the politics of the time. Ali Bhutto received his highschool education in Bombay (Mumbai) but traveled the United States for his university education at the University of California at Berkeley. This university was effectively the Harvard of the Pacific Rim and Bhutto completed his bachelor's degree there in 1950. Bhutto was thus away from India during the troubled time of the partition and the formation of Pakistan.
Bhutto went on to graduate education at the University of Oxford where he studied law. After the completion of his degree he practiced law and lectured a short time before returning home in 1953 to the new nation of Pakistan. He settled in Karachi and practiced law there. He developed some political ties and was appointed to Pakistan's delegation to the United Nations.
His wife, Nurat, was also of a Shi'ia Islamic faith and but with an Iranian Kurdish heritage.
Politics in Pakistan took a new turn in 1958 when the military leader Mohammad Ayub Khan carried out a coup d'etat. The Bhutto family was of feudalbackground and Zulfiqar Bhutto was well enough connected that he was appointed to head the Ministry of Commerce. Appointments to other cabinet post followed. Finally he was made foreign minister in 1963. He then began to develop his own policy program. He felt he should try to promote ties with China as a counter-balance to the militant relation which had developed between independent India and Pakistan.
In 1965 a war with India broke out over the issue of Kashmir and Jammu. Pakistan was overwhelmed militarily by India and had to sue for peace. Bhutto objected to the peace treaty with India that ended the war and in protest he resigned from his position as foreign minister.
After leaving the administration of Ayub Khan, Bhutto began organizing his own political party. It was founded at the end of 1967 and he called it the Pakistan People's Party (PPP). Out of office and head of his own political party, Bhutto began to denounce the Ayub Khan regime as a dictator and, as a result, the regime put him into prison for the years 1968 and 1969.
The Ayub Khan regime was terminated by Khan's resignation and control of the government was assumed by another general, Mohammad Yahya Khan, and national elections were permitted in 1970. At that time Pakistan consisted of two wings. The West Wing consisted of the Indus River Valley and so forth plus Balochistan, the province on the coast south of Afghanistan. The East Wing was what once had been East Bengal. The East Wing had a greater population and more important export industries than the West Wing. However, the capital and political control was in the hands of the West Pakistanis. The East Wing was providing more taxes but was getting the smaller share of federal government funds.
Bhutto went on a speaking tour of the West Wing espousing noble ideals of democracy and reform. Campaigning among the people was something Pakistan had not seen before. Bhutto was an impassioned orator and his rhetoric inspiring. He was charismatic.
Bhutto's PPP received overwhelming electoral support in the West Wing but the Awani League, a political party of the East Wing had the greater number of representatives. Since the vote was divided between the Awani League and Bhutto's PPP the legislative government might have had to involve both the Awani League and Bhutto's PPP, but Bhutto refused to enter into a coalition with the Awani League which would allow the Awami League's leader to become the prime minister. This created a political crisis which spun out of control. When the Pakistan army under the control of West Wing commanders tried to put down the rebellion there was great bloodshed and atrocity. Many residents of the East Wing fled across the border into India creating a severe problem. The army of India came to the aid of the rebels and defeated the West Wing's attempt to suppress the rebellion. The East Wing of Pakistan declared it independence as the new nation of Bangladesh.
The military regime of Yahya Khan failed miserably and political control was turned over to Ali Bhutto at the end of 1971. Bhutto was able to rule largely by decree.
Bhutto began immediately to consolidate his power and move toward a socialist economy. He nationalized key industries and began to tax the land property of the richer families. Bhutto in 1973 used his political power to install a new constitution which further enhanced his power. He created a Federal Security Force which functioned as a palace guard outside of the control of the military.
In power the rhetoric of Bhutto's rise to power was ignored. He ruled as an autocrat. His regime reminds one of the American politician Huey Long of Louisana during the period 1928 to 1936. Long was immensely popular and claimed to champion the interests of the poor. In practice Long ruled as a dictator, a populist dictator but still a dictator.
Zulfiqar Bhutto used his popularity to rule as an autocrat if not an outright dictator. After ruling as an autocrat for about five years, Bhutto decided to hold a new election in 1977. His party apparently won the election but there was enough suspicion of voting fraud that riots broke out. Bhutto prohibited assemblies for political purpose hoping to throttle the protest movement. Bhutto had shifted the political focus of his regime from the urban poor and middle class to the rural poor. He lost the support of the politically active urbanites because of the ineffectiveness of his regime to achieve the goals he promised. Anwar Hussain Syed in his book The Discourse and Politics of Zulfikar Ali Bhutto quotes a note Bhutto sent to his ministers:
There are shortages everywhere… The Agricultural Development Bank has not come out with any new scheme to assist the common man, the poor man … The rural works program and the rural integrated program remain disintegrated. I have not seen the face of a single Agroville of which we talked a great deal. The low cost housing schemes are coming up on paper only. The drainage schemes have not seen the light of day. Crime is rising without fear … In other words, where is our revolution? There is no change. We are supposed to be the harbingers of a new order, but where is the new order? … The truth hurts and it hurts me the most.
The military under the leadership of General Zia ul-Haq took control of the government and imprisoned Bhutto. Bhutto was uncooperative with the military regime and Zia ul-Haq, tiring of Bhutto's intransigence, had Bhutto charged with arranging the assassination of a political opponent in 1974. Bhutto had used force to suppress many of his political opponents and there was a good deal of gangsterism in the PPP so the charges had a certain plausibility. Anwar Hussain Syed in his book The Discourse and Politics of Zulfikar Ali Bhutto says:
In his discourse, and in his covenant with the people, Bhutto undertook to maintain civil rights and democratic freedoms. In his actual practices as a ruler, he did the opposite. His regime insulted, humiliated, harassed, assaulted, imprisoned and, in some cases, tortured critics and opponents. He had vowed to cultivate respect for the law, but his agents used lawless force against his adversaries. Even old comrades, who had become critics, were not spared. Meraj Mohammad Khan languished in jail, and Mukhtar Rana almost died under torture. Men from the Federal Security Force broke into J.A. Rahim's house and beat him so severely that he had to be hospitalized.
Bhutto was tried in Lahore in the highest court of Punjab which meant that there could be one appeal of the verdict to a higher court, the Supreme Court of Pakistan. He was found guilty in a trial in 1978 and sentenced to death. The court's decision was a split 4 to 3. An appeal was filed for Bhutto in the Supreme Court but that court chose not to review his case. Within a period of about ten days Bhutto was executed by hanging.
Zia ul-Haq was a relentless enemy. Bhutto was informed that he would actually be executed only seven hours ahead of time instead of the seven days required by law. Pakistan was left with the legacy of its most popular leader having been martyred, the victim of political-judicial murder by a military junta. Zulfiqar Ali Bhutto was a flawed individual and he did not serve Pakistan well but his death was tragic on many levels.
Here is Pervez Musharraf's assessment of Zulfiqar Ali Bhutto:
With East Pakistan gone, to become Bangladesh, Bhutto's largest number of seats in what was left of Pakistan gave him a dubious legitimacy. He became president of Pakistan, but he also used the absence of a basic law as a pretext to become chief martial law administrator. There was nothing to stop Bhutto from reverting to the constitution of 1956, with amendments to the clauses that pertained to East Pakistan, but he chose raw power instead.At first I admired Bhutto. He was young, educated, articulate, and dynamic. He had eight years' experience in government under President Ayub Khan. But as time passed, my opinion of Bhutto started to change. My brother Javed, who was principal secretary to the chief minister of the North-West Frontier province, told me that Bhutto was no good and would ruin the country. My brother was right. I saw how the country, and particularly the economy, was ravaged by mindless nationalization. Its institutions were destroyed under his brand of so-called Islamic socialism. Bhutto took control of virtually all the nation's industries--steel, chemicals, cement, shipping, banking, insurance, engineering, gas and power distribution, and even small industries like flour milling, cotton ginning, and rice husking, as well as private schools and colleges -- the start of the destruction of our educational system. Mercifully, he did not touch textiles, our largest industry. Bhutto ruled not like a democrat but like a despotic dictator. He threw many of his opponents, including editors, journalists, and even cartoonists, into prison. He was really a fascist -- using the most progressive rhetoric to promote regressive ends, the first of which was to stay in power forever. It was a tragedy, because a man of his undoubted capability could have done a lot of good for his country. By the time his regime ended, I had come to the conclusion that Bhutto was the worst thing that had yet happened to Pakistan. I still maintain that he did more damage to the country than anyone else, damage from which we have still not fully recovered. Among other things, he was the first to try to appease the religious right. He banned liquor and gambling and declared Friday a holiday instead of Sunday. This was hypocrisy at its peak, because everyone knew that he did not believe in any one of these actions.
Pervez Musharraf, In the Line of Fire, pp. 57-58.
Zulfiqar Ali Bhutto was a complex person and has a complex role in Pakistan political and cultural history. Pakistanis seem to be divided into those who love him for his political rhetoric and those who hate him for his political action. For more on this man see Bhutto.
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Pervez Musharraf gives an insightful description of the events that led to Zia ul-Haq's deposing of Ali Bhutto.
Throughout this period the political scene became more and more murky. Bhutto's despotic, dictatorial, suppressive rule led to nation-wide discontent. He set up a Gestapo-like force called the Federal Security Force (FSF) that was much hated and feared. His interpersonal dealings with friends, colleagues, and foes were so arrogant and degrading that people hated him but were too frighten to express their feelings openly. He set up concentration camps in a place called Dalai where opponents were "fixed." […]
In this environment Bhutto ventured his first election, in 1977, to prove his legitimacy. The opposition formalized its unity into a political alliance called the Pakistan National Alliance (PNA). Either Bhutto became unnerved during the election campaign or he was bent on winning two-thirds of seats in the National Assembly to enable him to change from a parliamentary system to a presidential system by making a constitutional amendment, as some of his former colleagues now assert. The ballot was grossly rigged -- so rigged, in fact, that the people losttt their fear and came out into the streets to protest, often violently. The PNA, of course, led the protest demonstrations. The army was called out in Lahore to quell the disturbances. Bhutto imposed martial law in Lahore, but the high court struck it down. On one occasion the situation got so far out of control that the army was ordered to fire at the demonstrating civilians. Three brigadiers commanding the troops were bold enough to refuse the orders to fire and opted to resign their commissions instead. These honorable and principled officers were brigadiers Ashfaq Gondal, Niaz Ahmed,and Ishtiaq Ali Khan, who were then retired from service.
Finally the situation came to a head. General Zia ul-Haq removed Zulfikar Ali Bhutto's government in July 1977.
Pervez Musharraf, In the Line of Fire, pp.60-51.
To gain control of Pakistan Zia only had to declare martial law. Zia then became the chief martial law administrator. Zia asserted that he had taken control of the government solely to administer new elections for the national and provincial offices. The March 1977 elections administered by the Bhutto government were held to be invalid. Zia promised new elections within ninety days but that promise was broken and the other repeated promises that replaced it.
In many ways Zia was a more skilled politician than Bhutto whom he deposed. Bhutto had the oratorical charisma but tended to lack finesse in achieving his goals. Zia could and did wield brute force but he also could achieve his ends through negotiation and compromise.
The most significant policy program of Zia ul-Haq was the Islamization of Pakistan. In 1978 he decreed that all law, old as well as new, must be consistent with Islamic sharia law. Religious conservative parties under Bhutto were campaigning for such principle. There was the complication that there were several interpretations of sharia law among Sunni religious groups and a drastically different interpretation for the Shi'ia. Under Islam those holding wealth are supposed to contribute alms to take care of the poor. Zia decreed that the government would collect these alms as a tax.
In 1979 Zia established sharia courts to try cases involving the violation of sharia law. Islamic punishments were to be imposed for crimes such as theft, drinking alcoholic beverages and adultery.
Charging and paying of interest is forbidden under sharia law and Zia started to convert the financial institutions of Pakistan to Islamic rules.
Although the principle that Pakistan law had to conform to sharia law was established in 1978 that was not enough for the religious fundamentalist. In 1985 there was an attempt to assert the principle that sharia law was more fundamental than the constitution. This in part would have prevented the verdicts of the sharia courts from being appealed to the regular courts including the supreme court of Pakistan. The legislature did not approve this principle, due in part, to the national and provincial legislatures being dismissed for other reasons. Zia tried to establish this principle by fiat in 1986 but the Zia's action did not come up for ratification by the national assembly while Zia still ruled the country.
Perhaps the most significant political change created by Zia was the Eighth Amendment to the constitution which gave the president the power to arbitrarily dissolve the National Assembly thereby removing the prime minister from power. This completely altered the power balance between the president and the prime minister.
Zia encouraged religious education and the creation of madrassas (religious schools). Islamic religious schools are not like Western religious schools in which the participants retreat from the world. Islamic religious schools are more like boot camps for Marines. The participants do memorize the Koran but they are basically being prepared to be soldiers for the religious leaders. This has been true for centuries.
Zia's program of Islamization fortunately did not involve the destruction of the little progress that had been made on the status of women.
Islam and sharia law are socially totalitarian. Not much technical or economic progress comes out of a totalitarian societies. It takes societies with individual freedom to create the social progress that characterizes the modern world. Most of the muslims of the world today would not exist without the medical advances that could only be achieved in a free society. Their great grandparents would have died in infancy.
The true God of human beings is not some tribal leader writ large who worries about whether his subject show obediance five times a day. The true God of humans is not a person but the phenomenon of communication, language and writing which creates human culture. Human culture is a dynamic evolving phenomena. The social rules that made sense in the desert 1400 years ago do not make sense in the urban societies of the present. This is particularly true of the social regulations concerning women and the family.
Pervez Musharraf is also critical of Zia ul-Haq and his period of rule.
President Zia, in the 1980's, completed what Bhutto had started in the dying phases of his regime-- the total appeasement of the religious lobby. Zia did not have a political base or lobby. By hanging Bhutto, he turned Bhutto into a martyr and his political party--the PPP--into a greater force. Zia found it convenient to align himself with the religious right and create a supportive constituency for himself. He started overemphasizing and over participating in religious rituals to show his alignment with the the religious lobby. Even music and entertainment became officially taboo, whereas I am told that in private he personally enjoyed good semiclassical music.Pervez Musharraf, In the Line of Fire, pp. 66-67.
The era of Zia with its tumultuous political and institutional changes, international as well as domestic, did not end until his assassination in 1988. Someone planted a device, either involving explosives or poison gas, on Zia's plane killing him and about thirty others including the U.S. ambassador to Pakistan and most of the top generals of Pakistan.
(To be continued.)
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To begin her higher education she was sent by her family to Harvard University (technically to Radcliffe College, the adjunct college for females of Harvard University). She did extraordinarily well at Harvard. She majored in comparative goverment and graduated cum laude and became a member of Phi Beta Kappa, the honorary society for academic excellence. After her four years (1969 to 1973) at Harvard she went on for graduate education at Oxford University in the United Kingdom. She pursued studies in philosophy, economics, politics, international law and diplomacy. Clearly she was preparing herself for leadership in Pakistan. She spent four years at Oxford (1973-1977) and was elected the president of the Oxford debating society.
She returned to Pakistan to political turmoil. Her father, Zulfiqar Ali Bhutto, had been made Prime Minister in 1971 after the debacle of the separation of Bangladesh. That separation was caused in large part by the intransigence of Ali Bhutto. He ruled as Prime Minister until 1977 when he was deposed as a result of the military coup of Zia ul-Haq. Benazir Bhutto returned to Pakistan and was placed under house arrest. Her father was arrested and put on trial by Zia and ultimately hanged in 1979. For a period of time around the time of the execution of her father, Benazir and her mother were imprisoned by the Zia government.
In 1984 Benazir Bhutto was allowed to leave Pakistan and migrate to Britain. She later returned to Pakistan and in 1987 she married Asif Ali Zardari in Karachi. When elections were held in 1988 after the death of Zia ul-Haq, the People's Party of Pakistan (PPP) which Benazir Bhutto now controlled was able to form a government with Benazir as the Prime Minister. She tried to bring about reforms but that was not an easy task in Pakistan where any change is suspected of being Westernization.
In 1990 the President of Pakistan exercised his power to dismiss the government of Bhutto and the Punjabi leader, Nawaz Sharif, became Prime Minister. Sharif's government lasted until 1993 when new elections were held. Benazir Bhutto's PPP was again made prime minister. In 1996 another president again exercised the presidential power to dismiss a government and took Benazir Bhutto out of power. She served thereafter as the opposition leader until 1998 when she went into exile.
There were numerous charges of corruption placed against her for events occurring during the time she was in office. In 2007 the charges were dropped and she returned to Pakistan in October of 2007. She campaigned for the election to be held in early 2008. After a PPP rally in Rawalpindi on December 27th, as she was leaving she had her vehicle stopped to recognize a group of her supporters. She stood up through the sun roof to acknowledge the support of the crowd. Shots were fired and a bomb was detonated killed about twenty bystanders. Benazir Bhutto incurred a skull fracture in the incident and died in the hospital shortly afterwards.
The rise of Zulfiqar Ali Bhutto created an opposition force. The families of those who suffered from his program of nationalization adamantly opposed him and his family's political careers. One of those was Mian Nawaz Sharif. Nawaz Sharif's family were major industrialists in the Punjab province, having moved there from Kashmir at Partition. With the loss of their traditional businesses in Punjab to Bhutto's nationalization the family became more entrepreneurial seeking new businesses to replace their losses.
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He rose to power at the provincial level. He first became the minister of finance for Punjab and then chief minister for Punjab. Punjab is the most populous province and about two thirds of Pakistan consider themselves Punjabi. About 60 percent have Punjabi as their native language. Therefore Punjabi politicians have a substantial political power base in national politics.
The political party that Nawaz Sharif belonged to and for which he was a major leader was the Pakistan Muslim League (PML). In the elections of 1990 that came after the death of Zia ul-Haq, the PML joined in a right-of-center coalition called the Islamic Democratic Alliance (ISI). The major opposition was the left-of-center coalition headed by Benazir Bhutto called the Pakistan Democratic Alliance (PDA). The principal force in the PDA was Bhutto's Pakistan People's Party (PPP).
In the 1990 election the IJI coalition won 105 seats in the National Assembly of the total 207 possible. Benazir Bhutto's PDA coalition won only 45. Mian Nawaz Sharif was allowed to form a government. He chose nine representatives from Punjab for his cabinet of 18. Six others came from the Sindh province.
Nawaz Sharif emphasized a program of economic development to deal with the crucial problem of unemployment. He tried to reform Pakistan's stultifying economic regulations and carry out the denationalization (privatization) of firms and industries that had be nationalized by the regimes of the Bhutto family. In addition to privatizing industries he promoted policy changes that allowed new firms to enter industries that had been previously closed to private business.
Nawaz Sharif extended Zia's program of Islamization. In 1991 the government passed the Shariat Law the required the laws of Pakistan to be consistent with the Koran and Islamic precepts. There were more fundamentalist parties which were members of his coalition that demanded such measures. Nawaz Sharif led his government to create a National Highway Authority (NHA) to physically link the country together and this NHA did carry out a billion dollar highway building program.
There were some financial scandals which took place during the regime of Nawaz Sharif. Benazir Bhutto in 1992 was organizing street demonstration to destabilize the country and force Nawaz Sharif from power. In 1993 the president of Pakistan under the power granted to him by the infamous Eighth Amendment to the Constitution dissolve the National Assembly and dismissed Nawaz Sharif's government.
About six weeks later the Supreme Court of Pakistan ruled that the dismissal of the National Assembly by the president of Pakistan was unconstitutional. Although Nawaz Sharif was ostensibly again prime minister he and the president both, in a political compromise, resigned their offices. In the October election Benazir Bhtto's party won enough seats in the National Assembly to allow her to become prime minister.
In February of 1997 the Pakistan Muslim League party headed by Nawaz Sharif won an overwhelming majority of the seats in the National Assembly and Sharif was made prime minister. With the legislative majority he commanded Sharif had passed a thirteenth amendment to the constitution which removed the power granted under the eight amendment for the president to dismiss the National Assembly. Sharif also had a fourteenth amendment passed that imposed party discipline on the legislators, meaning that a party leader could any members of the Assembly who failed to vote the way they were instructed.
When India detonated several nuclear device in 1998, Pakistan under the direction of Nawaz Sharif detonated one about two weeks later. These detonations did not mean that either nation had the means of delivering a nuclear bomb against the other. Nevertheless Nawaz Sharif was hailed within Pakistan for having restored Pakistan's national pride and prestige. India had first achieved a nuclear explosion in 1974 and so for about 24 years Pakistan had not faced this disparity with its major rival.
Although Nawaz Sharif's action was popular within Pakistan it resulted in severe repercussions with economic sanctions were imposed upon Pakistan by other countries, particularly the United States. Nevertheless Sharif used his popularity to justify the passage of a fifteenth amendment to constitution by the National Assembly that would have permitted him, as prime minister, to assume dictatorial powers in achieving an Islamization of the Pakistan's government. The amendment had to also be passed by the Senate of Pakistan for it to become law. Other political events intervened in this process.
The Chief Justice of the Supreme Court of Pakistan judged the thirteenth amendment to be unconstitutional and thus that the president to still have the power to dismiss the National Assembly. Other members of the Supreme Court disagreed with the Chief Justice. Supporters of Nawaz Sharif attacked the Supreme Court building. Thus a real constitutional crisis was imminent. The army chief of staff, General Jahangir Karamat, was asked to mediate the dispute. Karamat sided with Prime Minister Sharif and the President Leghari resigned.
Having defended his political power against the presidency and the Supreme Court Sharif then decided to take on the only other potential rival to his power, the military. Sharif in 1998 summarily dismissed General Jahangir Karamat as chief of staff of the army. Ostensibly the reason for the dismissal was Karamat making political statements in a public speech. The Pakistan military was displeased with the arbitrary dismissal of their leader without just cause. In the place Karamat, Sharif appointed Pervez Musharraf as army chief of staff. Sharif told Musharraf that a major factor in his selection was that Musharraf was the only one of the top army officials who had not sought the appointment. Pakistan leaders seem to always be looking for a military leader without political ambitions and to always be disappointed in their quest.
The relationship between Nawaz Sharif and Musharraf was soured by the Kargil Conflict. In 1999 India charged Pakistan with violations of the Simla Agreement for intrusions across the line separating Indian and Pakistani forces in the 1971 War over Kashmir and Jammu. Economic sanctions were imposed upon Pakistan and Nawaz Sharif was put under pressure by U.S. President William Clinton to withdraw Pakistani forces. The incident put Nawaz Sharif in the position of not having the army under his control. Perhaps at that time Nawaz Sharif decided to replace Musharraf as chief of staff of the army. But the head of the army must be deposed very carefully.
The opportunity for Nawaz Sharif to replace Musharraf came when Musharraf was flying on a commercial plane from Colombo, Sri Lanka to Karachi and thus out of touch with his military commanders. Nearing the Karachi airport the pilot of the plane found that he was being denied permission to land and ordered to leave Pakistan airspace immediately. There were 200 passengers on the plane and the attempt to land elsewhere on the limited fuel the plane contained would put the lives of those passengers at risk. When the pilot announced he was going to land the plane without permission the air-controller told him that there were three fire trucks blocking his landing. However about that time the Pakistan army gained control of the Karachi airport and cleared the plane for landing.
Musharraf found that Nawaz Sharif had announced that Musharraf had retired and another officer had been made chief of staff. Musharraf refused to accept his firing and declared martial law making himself chief administrator of Pakistan. Musharraf's takeover of the government took only about three hours. Prime Minister Nawaz Sharif and his hand-picked President were arrested.
Nawaz Sharif was charged with the attempted hijacking of Musharraf's plane. In the year 2000 Nawaz Sharif was found guilty and sentenced to life imprisonment. The Army however, at the request of Crown Prince (and now King) Abdullah of Saudi Arabia, commuted the sentence to exile in Saudi Arabia. Sharif was banned from political involvement for 21 years. Later Nazam Sharif was charged with corruption and given an additional sentence of 14 years.
In 2006 Sharif appealed to Musharraf to be allowed to leave Saudi Arabia and go to London to visit his seriously ill son. Musharraf granted his permission and Sharif went to London and did not return to Saudi Arabia. He also violated the terms of his agreement and began to engage in political commentaries concerning conditions in Pakistan. In September of 2007 Sharif attempted to return to Pakistan by air from London. He was not allowed to enter Pakistan and was sent back into exile in Saudi Arabia. At the end of November after former-prime minister Benazir Bhutto returned to Pakistan Sharif was allowed to enter Pakistan and engage in political activities.
(To be continued.)
In Pakistan the army, navy and airforce own extensive business empires. What started as a means for providing economic benefits for inadequately paid military personnel has grown into a sector which dominates the economy and gives the military the incentive to control the government out of simple financial self-interest. Here are some of the business interests owned by the military.
| Economic Enterprises and Institutions Controlled by the Pakistan Military |
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| Enterprise or Institution | Net Worth | Year of Formation | Original Reason for Creation | Controlling Branch of Military | |
| Fauji Foundation | $2 billion | Pensions for Retired Soldiers | Army | ||
| Army Welfare Trust | $1 billion | 1971 | To Explore Investment Opportunities | ||
| Frontier Works Organization | Road and Highway Building | ||||
| National Logistics Cell | Cross Country Trucking | ||||
| Special Communications Organization | Provide Communications in Remote Areas | ||||
| Shaheen Foundation | Pensions | Air Force | |||
| Bahria Foundation | Pensions | Navy | |||
Once these enterprises were created it was inevitable that they would grow by leaps and bounds during times when military coups took political control in Pakistan. The myth was propagated that their growth was due to their being more efficient than civilian enterprises but military efficiency is effectiveness at any cost whereas true economic efficiency requires cost consciousness. Nevertheless the military enterprises entered more and more fields. Military enterprises manufacture products such as cement, offer banking services and security services, provide rental housing and act as landlords of extensive tracts of land. The military enterprises include an oil terminal and a chain of service stations. The military has an airline which provides airline travel. As much as one third of all heavy manufacturing in Pakistan may be carried out in military enterprises. At least one of Pakistan's military enterprises has become multinational with a joint venture in Morocco to mine phosphate.
Dr. Ayesha Siddiqa estimates in her book Military Inc.: Inside Pakistan's Military Economy that the military financial complex has a net worth of £10 milliards or about $20 billion in U.S. terms. She concluded from her research that the Pakistan army enterprises own 12% of the land and that its land is primarily in the most fertile areas.
The military enterprises are lucrative but their benefit is primarily to the upper echelon of officers rather than to the soldiers and junior officers. A major general upon retirement receives an urban building plot and 240 acres of farmland. Together these two real estate grants are worth about $2.5 million. Sometimes the military enterprises sell property to top level officers at below market prices. This is another side benefit of the officer corps. Siddiqa estimates that the average net worth of the 100 top level officers is $70 million.
The attempts by civilian government to curb the economic power of the military have resulted in the military curbing the political power of the civilian government. During her first administration in 1990 Benazir Bhutto tried to put civilians into the political positions which controlled the military. Soon after this the military forced her out of the government. Again in 2006 she tried to impose civilian control on the military, but to no avail.
Pervez Musharraf was born in Delhi in 1943. At Partition in 1947 his family moved to Karachi. He is thus a Muhajir, a Pakistani who migrated or is a descendant of those who migrated from India. The native language of the Musharraf family is Urdu. Although Urdu is the official language of Pakistan only a minority speak it.
Pervez Musharraf's father was an official in the government of Pakistan from the very beginning. Soon after the family's arrival in Karachi the father was sent to Turkey as a member of the Pakistan embassy in Ankara. Pervez Musharraf and his two brothers were thus away from Pakistan for seven important years of their childhood. Musharraf's mother also worked and provided additional income for the family. This helped the family finance the best education for the three sons. Pervez's older brother was a brilliant student, but Pervez, while generally a good student, did not match that brothers scholarly achievements. Pervez was more of a incorrigible prankster and a participant in boyhood gangs. In some ways Pervez's early life was similar to that of Vladimir Putin. Putin admits that as a boy he was a hellion and only achieved self-discipline through competitive sports. Pervez was likewise somewhat of a little rascal but through self-discipline achieved much.
Pervez Musharraf's mother decided early that her oldest son would go into the government, and that her youngest son would become a doctor. She recognized that her middle son, Pervez, was somewhat of a problem and decided that a military career is what he needed to tame him. In due time he applied to the Pakistan Military Academy and passed the examinations, both intellectual and physical.
Ironically what tamed her middle son was marriage. He accepted the fate of a parent-arranged marriage but he clearly could not have done as well choosing for himself. Here is a picture of Pervez Musharraf with his bride of unsurpassable beauty, Sehba.
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What marriage and family changed was not so much any more dedication to training and education. He had always had the capacity to do well in the those fields and generally did so. What marriage changed was his inclination to willfully disdain leaders whom he did not personally respect. With marriage and family he became more tactful and used better judgment in expressing his opinions.
Musharraf progressed steadily in the leadership hierarchy of the Pakistan army. There were occasional instances in which he was passed over in promotions but those generally turned out to be to his benefit. For example, if he had been selected to be the close adviser to Zia ul-Haq that other had expected him to be he would have died along with Zia in the plane crash that killed Zia and about 30 of his entourage.
Musharraf obtained a wide variety of experience in military assignments that prepared him for his ultimate selection to head the Pakistan army.
Finally Pakistan military officers loyal to Musharraf gained control of the Karachi airport and told the pilot he could now land safely. He landed with only seven minutes of fuel left. Musharraf declared himself to be Chief Administrator of Pakistan, effectively putting Pakistan under martial law.
Musharraf's coup, or counter-coup as he called it, took only about three hours. Nawaz Sharif and the president of Pakistan were placed under arrest. In the year 2000 Nawaz Sharif was found guilty of the attempted hijacking of Musharraf's plane and sentenced to life imprisonment. The Army however commuted the sentence to exile in Saudi Arabia. Sharif was banned from political involvement for 21 years. Later Nazam Sharif was charged with corruption and given a sentence of 14 years.
In a chapter in his autobiography, In the Line of Fire, entitled "Putting the System Right," Pervez Musharraf says,
Given Pakistan's checkered political history, alternating between martial law and sham democracy the way to true democracy has been difficult, requiring travel on several different paths at once. Our main political parties have in reality been no more than family cults, a dynastic icon at their head. Remove the icon, and the party evaporates. Hardly any of our political parties have been democratic on the inside, and therefore these parties never bother to hold genuine internal elections. The head of the party is the party. A party head appoints whom he (or she) wishes, almost always sycophants, to party positions. These sycophants always look upwards to the boss who appointed them rather than downward at the party workers who ought to elect them.
Musharraf noted that Benazir Bhutto never held an election in her Pakistan People's Party (PPP) and yet was her party's Chairperson-for-Life. Both her PPP and Nawaz Sharif's Pakistan Muslim League (PML-N) were run as dynasties. Musharraf set as a goal the remedying of this situation. He commented,
I noted the absence of democracy at the grassroots level and the absence of effective checks and balances of the three power brokers of Pakistan: the president, the prime minister, and the army chief. Those were the impediments to sustainable democray. Each of these problems needed to be solved.
Musharraf had specific remedies in mind for these problems. He wanted a national political party that would be a real political party rather than a family cult. He needed organized political support for his agenda of other reforms. Musharraf in collaboration with his principal secretary, Tariq Aziz, decided to reconstitute the party of the Pakistan Muslim League. This was the name of Ali Jinnah's party and the same name had been chosen for the party of Nawaz Sharif. Musharraf and Aziz chose to name the party PML and selected two cousins, Chaudry Shujat Hussain and Chaudry Pervez Ilahi, to organize it. The Chaudry cousins were influential in the party of Nawaz Sharif. They added the letter Q to the name, Q being for the honored title of Ali Jinnah, Quaid-e-Azam (Father of the Country). Sharif's party then became known as PML-N, N for Nawaz.
Musharraf saw a need for an opposition party. He held a referendum on his being president of Pakistan for five years. The referendum sanctioned his continuation in power, but because there was no publically organized opposition the resulting approval was suspect. He concluded that political opposition is necessary for any poll to have credibility.
Musharraf promoted other major political institutional changes. The voting age was reduced from 21 to 18. The membership of the National Assembly was increased from 217 to 342, with 60 seats specifically reserved for women. Women could contest any of the seats for the National Assembly and in the 2002 election 12 women won nonreserved seats bringing the total of number of women in the National Assembly to 72.
There was a similar reservation of seats for non-Muslims. The reserved minority seats meant that the major political parties would have to give some consideration to how their programs would affect minorities.
Musharraf made advanced education a requirement for candidates for the national and provincial legislatures. This meant ten years of school and four years of college. Not only would this result in better educated legislators but it would keep out a certain class of politicians. A limit of two terms was imposed for the offices of prime minister and president.
One of the most important institutional changes promoted by Musharraf was the creation of a National Security Council that would include the top military leaders of the three armed forces and the chairman of the Joint Chiefs of Staff Committee. It would also include the prime minister and opposition leader of the National Assembly as well as the chief ministers of the four provinces. This body would only have a consultative function but would give the various power brokers a place to vent their concerns before events precipitated drastic actions.
A final program of institutional reform of Musharraf was the creation of democratic local government. The deputy commissioner and superintendent of police ran local affairs without any checks on their power. Musharraf promoted the passage in 2000 of a piece of legislation called the Local Government Ordinance. This legislation made the deputy commissioner and superintendent of police subordinate to the mayor.
Under the Local Government Ordinance there were local government unit created on three tiers. The smallest local units were population districts of fifeen to twenty thousand people. They elected a union council of thirteen members, four of which had to be women, one a non-Muslim and four had to be workers or peasants. The next higher unit was the sub-district council and the highest was the district council. The district council would be chaired by the equivalent of a mayor.
| Wholesale and Consumer Prices 2001-2007 2000=100 |
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| Year | Wholesale Price Level | Consumer Price Level |
| 2000 | 100.0 | 100.0 |
| 2001 | 104.6 | 103.1 |
| 2002 | 107.7 | 106.5 |
| 2003 | 114.6 | 109.6 |
| 2004 | 124.3 | 117.8 |
| 2005 | 135.2 | 128.5 |
| 2006 | 146.7 | 138.7 |
| 2007 | 158.7 | 149.2 |
| Money Aggregates of Pakistan, 2001-2007
Billions of Rupees |
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|---|---|---|
| Year | M1 | M2 |
| 2001 | 855 | 1,650 |
| 2002 | 1,003 | 1,913 |
| 2003 | 1,269 | 2,266 |
| 2004 | 2,385 | 2,725 |
| 2005 | 2,475 | 3,202 |
| 2006 | 2,860 | 3,671 |
| 2007 | 3,404 | 4,388 |
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Rates of Inflation and Rates of Growth of the Money Supply in Pakistan, 2001-2005 |
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|---|---|---|---|---|
| Year | Inflation In Wholesale Prices (%/yr) | Inflation In Consumer Prices (%/yr) |
Rate of Growth of M1 (%/yr) | Rate of Growth of M2 (%/yr) |
| 2001 | 3.4 | 3.1 | ||
| 2002 | 3.0 | 3.3 | 17.3 | 15.9 |
| 2003 | 6.4 | 2.9 | 26.5 | 18.5 |
| 2004 | 8.5 | 7.5 | 87.9 | 20.3 |
| 2005 | 8.8 | 9.1 | 3.8 | 17.5 |
| 2006 | 8.5 | 7.9 | 15.6 | 14.6 |
| 2006 | 8.5 | 7.9 | 17.5 | 15.6 |
| 2007 | 8.2 | 7.6 | 19.0 | 19.5 |
There something suspicious about such low rates of inflation in the face of such high rates of growth of the money supplies.
Pakistan has a largely a rural agricultural economy. The land has been recognized as prime quality since about 3000 BCE. But the agricultural economy will not support an adequate standard of living by modern standards. Pakistan has a difficult problem made worse by the incompetence and venality of its politicians. The high population growth rate would be difficult to cope with even with a healthy economy. The economic prospects have been diminished by the piling up of public debt. The servicing of the international part of the debt put an overwhelming burden on the economy.
The International Monetary Fund (IMF) provides estimates of the Gross Domestic Product (GDP) for most member countries, but it did not do so for Pakistan in the past. This was due to the inadequate statistical data for Pakistan. Pervez Musharraf in his autobiography provides estimates Pakistan's GDP. In 1999 he reports it as being $65 billion, presumably in 1999 value prices. This was about the same as the Gross State Product of the state of Arkansas in that year. And Pakistan had a population on the order of 140 million people. In 2004 Musharraf reports the GDP of Pakistan as $125 billion but he does not specify whether that was in 2004 prices or 1999 prices. He notes that it was nearly a doubling in five years. However that would be meaningless if the price levels were different in the two years.
In 2007 the IMF estimate for Pakistan's GDP converted into U.S. dollars at the exchange rate was $144.1 billion, about the same as for the Philippines. The Central Intelligence Agency (CIA) of the U.S. also makes estimates of GDP for most countries of the world. The CIA's estimate for Pakistan's GDP in 2007 is $106.3 billion, considerably less than the estimate of GDP of the Philippines for that year of $144.1. The other organization that makes systematic estimates of countries' GDP's is the World Bank. Its estimate of Pakistan's GDP in 2006 was $128.8 billion. The World Bank estimate of the GDP for the Philippines in 2006 was $116.9. The different relative values of the GDP and the Philippines indicates that there is a large margin of error in the estimates.
It is notable that the GSP for Arkansas in 2006 was $91 billion, considerably less than the World Bank value for Pakistan. The American state which had a GSP comparable to that of Pakistan in 2006 was Iowa, a prosperous agricultural state.
(To be continued.)
When Musharraf took power in 1999 Pakistan had only enough foreign exchange to cover two weeks worth of imports. In addition to needing foreign exchange to pay for imports Pakistan had a foreign debt of $39 billion that required each year about $5 billion of foreign exchange for payment of interest and scheduled repayment. Pakistan was importing about $10 billion and exporting only $8 billion. Pakistan not only had a deficit in its balance of trade but had a far more serious deficit in its balance payments of $5 billion. This was the verge of financial collapse and default on its debt.
Some of the trade deficit is covered by remittances of Pakistanis working in foreign countries. Pakistan has a large expatriate population who wants to send funds back to their families. However they were only sending about $1 billion through official channels. Instead they were using the informal system of money handlers called the hawali or hundi system. This informal system was much more efficient than the banks. A transfer would take only one day by the informal traders whereas the banks might take a week to complete the same transfer. The banks were inefficient because they became government bureaucracies after nationalization under the Bhutto regime.
Foreign exchange can also come from foreign direct investment. Due due to the uncertainty of getting a fair treatment from the Pakistan govenment, foreign businesses were investing a negligible $300 million per year.
Tax revenues were low because of inadequate collection. There were numerous public investment projects that needed to be carried out but the government did not have the funds. Part of the shortage of funds came from the numerous public enterprises created by past nationaization programs. These enterprises were not making a profit; they were losing money and needed subsidies to keep running.
Musharraf appointed new directors to the public sector enterprises on the stipulation that they stop the losses and start earning a profit. He instituted a program of tax collection for existing taxes. This of course was not popular but it worked. Over the tax years from 2000 to 2006 tax revenues increase by 130 percent, from about $5 billion to about $12 billion, without creating new taxes or increasing tax rates.
By putting pressure on the banks to provide faster and more efficient service he was able to quadruple the amount of remittance sent through the banks.
In the matter of foreign direct investment Musharraf said,
I personally spearheaded the campaign to increase our exports and FDI. First we adopted the course of deregulation, liberalization, and privatization. We created strong regulatory mechanisms to ensure transparency and checks and to provide a level playing field for all investors in all sectors of the economy. We also introduced rules and regulations to create a very investor-friendly environment. Armed with these positive environmental changes, I met with business communities wherever I went around the world to increase trade, joint ventures, and investment in Pakistan. We achieved phenomenal success. In 2005 FDI crossed $1.5 billion, up 500 percent from 1999.
As a result of the efforts of Musharraf and the Pakistan Export Promotion Bureau under the chairmanship of Tariq Ikram Pakistan's exports by the end of 2006 had grown to $18 billion, up from about $8 billion in 1999.
The overwhelming burden of the service payments was dealt with through diplomacy and negotiation. There was a rescheduling of the repayments and some cancellation. This enabled Pakistan to cope with its debt burden instead of being overwhelmed by it. By ending the fear of imminent default Pakistan's financial rating improved dramatically. Whereas the ratings of Pakistan's bonds in 1999 were below the investment grade they rose in 2006 to better than the B level and Pakistan's country risk premium dropped to 2 percent; i.e., Pakistan could borrow at a rate only 2 percent higher than the interest rate on U.S. government bonds. In 1999 Pakistan's risk premium was probably in the neighborhood of 7 to 8 percent.
(To be continued.)
In the multinational effort to drive Soviet troops out of Afghanistan no one seems to have given much consideration to providing for a government to take its place. As Musharraf summarizes the period
A jihad was launched in Afghanistan, with Pakistan as the inevitable conduit and a frontline supporter because of its contiguity to Afghanistan. Afghan warlords and their militias were armed and financed to fight the Soviets. Alongside 20,000 to 30,000 mujahideen from all over the world, students from some seminaries of Pakistan were encouraged, armed, financed, and trained to reinforce the Afghans and confront the Soviet war machine. Before 1979, our madrassas were quite limited and their activities were insignificant. The Afghan war brought them into the forefront, urged on by President Zia ul-Haq, who vigorously propounded the cause of jihad against the Soviet occupation.The entire decade of the 1980's saw religious extremism rise, encouraged by Zia. It is undeniable that the hard-line mullahs of the Frontier province were the obvious religious partners in this jihad, because the Afghan Pukhtoons adhere to their puritanical interpretation of Islam. Actually, Zia, for his own personal and political reasons, embraced the hard-line religious lobby as his constituency throughout Pakistan and well beyond, to the exclusion of the huge majority of moderate Pakistanis. Fighting the infidel Soviet Army became a holy cause t the jihadis, and countless Pakistani men signed up.
This jihad continued for ten years, until the Soviets were defeated in 1989. They withdrew in a hurry, leaving behind an enormous arsenal of heavy weapons that included tanks, guns, and even aircraft, with abundant stocks of ammunition. The United States and Europe were also quick to abandon the area, as the Berlin Wall fell and the Soviet threat dimmed. The sudden vacuum in Afghanistan led first to the toppling of the puppet govenment that had been installed by the Soviet Union, and then to mayhem and bloodletting among warlords jostling for power. Afghanistan was ravaged by a twelve-year internal conflict from 1989 to 2001.
The ongoing problem of Afghanistan is that it is not truly a nation. It is a geographic area, filled with diverse tribal groups. It was a mountainous place of refuge for these tribal groups and it was a buffer zone between the Russian Empire and the British Empire. Afghanistan can only work as a country with some federationist structure but unfortunately forces from within and/or from outside of Afghanistan keep trying to impose a unitary political structure. The disparate elements have to resist forcefully this assimilation and prevent their own annihilation, and sometimes in the process some one of these elements gains control of the central authority. So Afghanistan history is filled with episodes of control by one ethnic or political group and then another.
Communist regimes ruled Afghanistan from 1978 to 1989; how they came to power, how they ruled and how they fell from power. At first it might seem paradoxical that communism would ever come to a country as conservative and traditional as Afghanistan. But it is not so odd at all. In actually communism as it developed under Stalin is a form of feudalism, almost tribalistic feudalism. For the intellectuals of a feudal country the ideology and practices of communism are much closer to their culture than the Western market economies. So the intellectuals of Afghanistan found it easier to understand the Party-dominated society of the Soviet Union than they did the seemingly chaotic societies of the West. When this cultural familiarity was coupled with the common belief that socialism and central planning were progressive it was easy for Third World intellectuals to say, "Yes, let us leap frog over the messy social system of capitalism and achieve the promised land of communism."
In the 1960's one of the most prominent leftists was Mir Muhammad Siddiq Farhang who identified himself as a democratic socialist. Nur Muhammad Taraki was another prominent leftist of the period. Taraki worked in Bombay for the Afghan Fruit Company and joined the Communist Party there. Taraki was later a key figure in the communist movement in Afghanistan after his return to Afghanistan from India.
Mohammad Zahir Shah was the king of Afghanistan until July 17th, 1973. He was overthrown by his cousin, who was also his brother-in-law, General Mohammad Daoud Khan. General Daoud proclaimed the end of the monarchy and the formation of the Republic of Afghanistan. General Daoud governed Afghanistan for five years.
In 1979 a prominent leftist, Mir Akbar Khyber, was killed by the government and his associates, Nur Mohammad Taraki, Barbrak Karmal and Hafizullah Amin, fearing that a similar fate lay in store for them, organized a coup d'etat. After the coup succeeded Taraki became President and Hafizullah Amin became prime minister. Barbrak Karmal went into exile in Moscow.
Taraki and Amin imposed extreme reforms to be carried out in a short period time with little concern for the Afghan culture. Some measures such as the emancipation of women were desirable but, given the cultural setting, were imposed too rapidly. These measures provoked resistance which spread throughout the country.
Taraki as president of Afghanistan attended a conference of so-called nonaligned(?!) nations in Havana, Cuba. On his way back stopped in Moscow to meet with Leonid Brezhev. Brezhnev advised Taraki to ease up on the drastic social reforms and to seek broader support for his regime. Brezhnev also advised Taraki to get rid of his prime minister, Hafizullah Amin. Unbeknownst to Taraki his body guard was an agent for Amin. The bodyguard reported to Amin the intention of Taraki to strip him of his power.
After Taraki returned to Kabul he requested that Amin meet with him. Amin agreed to the meeting only if his safety was guaranteed by the Soviet ambassador. Such assurances were provided, but not in good faith. Amin knew however what Taraki's intentions were and the demand for his safety being guaranteed by the Soviet ambassador was probably a shrewd ploy on the part of Amin to mislead Taraki. Being forewarned, Amin used the palace guard to take Taraki prisoner. Amin then took control of the government. A few days later Amin's government announced that Taraki died of an "undisclosed illness". The "undisclosed illness" was that of being held down by the Palace Guard while he was strangled and smothered with a pillow. Taraki's "illness" only lasted ten or fifteen minutes.
The Soviets accepted Amin's acquisition of power and tried to work with him. But Amin was, of course, very wary of the Soviets. The Soviets wanted to put troops in Afghanistan because they feared there would be an American invasion of Iran as a result of the hostage crisis. Amin feared the Soviet troops would be used to depose him.
Amin fearing for his survival and uncertain of whom he could trust started putting his relatives into positions of power. Amin put one of his nephews in charge of the secret police, but that nephew was assassinated. Amin moved his headquarters out of Kabul in concern for his own safety.
The Soviets decided to invade Afghanistan. They sent paratroops to capture and execute Amin. After Amin was taken care of, a bogus call was make for Soviet troops to enter the country. According to the Soviet's cover story they were only responding to a call for assistance from the Afghan Revolutionary Central Committee. According to them they were only complying with the 1978 Treaty of Friendship, Cooperation and Good Neighborliness. The execution of Hafizullah Amin was, according to the Soviets, the action of the Afghan Revolutionary Central Committee. That committee then elected as head of government Barbrak Karmal, who was in exile in Moscow. Karmal returned to Afghanistan in a Soviet transport plane. He presided over the occupation of Afghanistan by 115,000 Soviet troops.
(To be continued.)
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Finally the mujahedeen forces surrounded Kabul. With their Western supplied weapons the siege was relentless. One of the more effective commanders of the Najibullah government army, Abdul Rashid Dostum, abandoned the government cause and joined with Massood's forces in the siege of Kabul. In April of 1992 the United Nations representatives negotiated an agreement with Najibullah that he would relinquish control of the government but there was no entity to accept that control. The majahedeen divided up control among the various factions. The prime ministership went to Gulbuddin Hekmatyar but he declined from entering Kabul where his chief political rival, Ahmed Shah Massood was in control of the city. Najibullah sought asylum in a U.N. compound in Kabul.
Najibullah remained in the U.N. compound until September until the Taliban forces gained control of the city. Massood's troops fled as did the security guards of Najibullah. When the Taliban troops gained control they captured Najibullah and his brother in the U.N. compound and took them out and killed them. They then hung the bodies up for public display.
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(To be continued.)
There are many mistaken perceptions of Pakistan in the West and the most serious has to do with Pakistan's acquisition of nuclear weapons. Pakistan fought several wars with India and had several near-war mobilizations. Although national pride requires that Pakistan characterize the Pakistan-India confrontations as near matches, the actuality is that Pakistan is heavily outmatched by the resources available to India and militarily lost several of the confrontations. The Pakistani military recognizes that in a full fledged war India could probably conquer Pakistan, although at a heavy cost.
Nuclear weapons as defense were obviously strategically justified for Pakistan in that it faced an enemy of vastly greater resources, yet Pakistan did seek those weapons until after India exploded an atomic bomb in 1974. For India bringing nuclear weapons into the military picture with respect to Pakistan did not make much sense. Without nuclear weapons India had a major advantage over Pakistan in conventional weapons. India demonstrated that in 1971 with its quick defeat of the West Pakistani army in East Pakistan (Bangladesh). With both countries armed with nuclear weapons India's advantage would be considerably reduced. Of course, during a period in which India had the bomb and Pakistan did not India's advantage would be enhanced. However it was unrealistic for India to expect that Pakistan would not acquire the bomb. In effect India pushed Pakistan into a quest for nuclear weapons.
India's acquisition of nuclear weapons made military sense only in its relationship to China. In conventional weapons and manpower China had an advantage. With both China and India armed with nuclear weapons China's advantage was reduced, especially compared to the situation in which China had those weapons and India did not.
After India's detonation of a nuclear device in 1974 there was strong motivation for Pakistan to acquire nuclear weapons but it was not so easy to do so. Here a little background on atomic bomb technology is necessary.
The original method for producing a nuclear explosion is too create uranium with an increased concentration of the radioactive isotope U235. Once this is achieved if a mass of the enhanced uranium greater than a certain critical level is created a chain reaction results in an explosion. The components for a critical mass must be kept apart until an explosion is desired. The forming of the uranium metal components and the triggering device that brings them together are essential elements of the technology. But the first step is the concentration of the U235 isotope.
The concentration of U235 is achieved by converting the uranium into a gaseeous form and running that gas through a centrifuge. The U235 is slightly less massive than the predominant U238 isotope of uranium. Thus within the centrifuge there will be a gradient of the concentration of the isotopes. Uranium forms a compound with fluorine, UF6, which is a gas so UF6 is a convenient medium for carrying out the concentration in a centrifuge.
The difference in the mass of UF6 formed with U235 as compared with that formed from U238 is very small. This means that the centrifuges have spin at extremely high speeds to achieve any separation in a reasonable time. Because of the high stresses created by the high speeds the centrifuges must be very strong. The high speeds and high strengths are hard to achieve. Thus the technology of high speed centrifuges is a technical bottleneck for the production of a nuclear weapon. Concentration of U235 is carried out for producing fuel for nuclear power plants as well as for nuclear weapons.
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With his adept self-promotion A.Q. Khan managed to have Pakistani prime minister Zulfiqar Ali Bhutto put him in charge of the Pakistan nuclear weapons development program. Khan was given a carte blanche for the program with no financial audits. Khan was allowed to handle the security of the program himself. He had only to report to Ali Bhutto. The material and technology other than the centrifuges were, according to Pervez Musharraf, acquired from underground suppliers, mainly in Europe.
When General Zia ul-Haq took control away from Ali Bhutto he continued the arrangement Bhutto had with A.Q. Khan; i.e., virtually complete freedom from oversight by governmental authorities. The research facility was Khan's personal kingdom; it was even named Khan Research Laboratories (KRL). Pervez Musharraf says of the arrangement
Our political leaders were intentionally ambiguous in public about our capabilities, for strategic reasons. I did not know the facts [about} at what stage of development were; and, as we would all discover, they didn't either, thanks to the complete trust and freedom of action given to A.Q. Nobody ever imagined how irresponsible and reckless he would be.In the Line of Fire, pp. 287-288.
On May 11th and 13th of 1998 India exploded five nuclear devices. The consternation and anxiety of the Pakistanis must have been extreme at that time. This anxiety was reduced when two weeks later Pakistan detonated six nuclear devices. A.Q. Khan's role then became generally known and he had promoted the notion that he alone was responsible for Pakistan's acquisition of nuclear weapons.
Musharraf became chief of the army staff in October of 1998. He recognized that the situation with respect to A.Q. Khan was dangerous. Musharraf proposed to the then prime minister Nawaz Sharif the creation of a new secretariat of the government, to be called the Strategic Plans Division, and a National Command Authority to provide effective oversight of Khan and his KRL. The National Command Authority was to consist of the president, prime minister, the key national ministers, the chiefs of the military branches and senior scientists. The Strategic Plans Division was to be under the direction of an army general and would assist the National Command Authority in the implementation of its policy choices.
Nawaz Sharif did not choose to implement Musharraf recommendations. In 1999 while still only chief of the army staff decided to create some rudimentary form of his Strategic Plans Division. He says that it was then that he began seeing evidence of suspicious activities on the part of A.Q. Khan. Musharraf goes on to explain how murky the situation had become.
Pakistan had contracted a government-to-government deal with North Korea for the purchase of conventional ballistic missiles, including the transfer of technology for hard cash. It did not--repeat, not--involve any deal whatsoever for reverse transfer of nuclear technology, as some uninformed writers have speculated. I received a report suggesting that some North Korean nuclear experts, under the guise of missile engineers, had arrived at KRL and were being given secret briefings on centrifuges, including some visits to the plant. I took this very seriously. The chief of general staff, the director of our Intelligence Service, and I called A.Q. in for questioning. He immediately denied the charge. No further reports were received, but we remained apprehensive.In the Line of Fire, pp. 288-289.
After Musharraf took control of the government in October of 1998 he did implement his proposals for the Strategic Plans Division and the National Command Authority. He states
Two things happened as a result. First, we soon began to get more information, though sketchy, about A.Q.'s hidden activities over the preceding months and years. Second, we were in a better position to learn about his ongoing activities, some of which were problematic and potentially dangerous.So far, he had been used to going abroad without permission. I now insisted that we should be informed of his visits and their purpose. Even then, I would learn that he had visited countries other than he had requested.
In the Line of Fire, p. 289.
Musharraf heard a report that a Pakistan aircraft traveling to North Korea to pick up conventional missiles was to carry a special cargo for A.Q. Khan. A raid was made but no such cargo was found, perhaps because Khan had been tipped off and the cargo had not been loaded. Later there was a request from Khan that a chartered flight be allowed to stop in Zahedan, Iran on its way to and from Pakistan. Musharraf authorized only one stop by the aircraft and then found that the plane's visit to Pakistan was suspiciously cancelled. There were other suspicious activities and Musharraf said he began to realize that Khan was not just part of the problem but the problem itself. He then decided to excise the problem by, in effect, firing Khan. Khan's contract was not renewed when it expired in March 2001. By this time Khan had become a national hero so his firing had to be disguised as part of a retirement of elderly scientists. So another older Pakistani scientist found that his contract was also not renewed. To further placate the hero worship of Khan, Musharraf made Khan a top level adviser to the Pakistan government. Musharraf goes on to say
When A.Q. departed, our scientific organizations started functioning smoothly, with mutual and integrated cooperation that had never been possible while he was around. He was such a self-centered and abrasive man that he could not be a team-player. He did not want anyone to excel beyond him or steal the limelight on any occasion or on any subject related to our strategic program. He had a huge ego, and knew the art of playing to the gallery and manipulating the media. All this made him a difficult person to deal with.[…]
Still at official-level meetings, some time after A.Q.'s retirement, the United States continued to raise questions about proliferation that had originated in Pakistan at some point in the past--but, like us, they had no concrete evidence. We kept denying the allegations, because we did not have any conclusive evidence; we only had suspicions.
I was concerned that A.Q. might have been involved in illicit activities before March 2001, but I strongly believed we had now ensured that he could not get away with anything more, and that once he was removed, the problem would stop. I was wrong. Apparently, he started working more vigorously through the Dubai branch of his network.
[…]
In the Line of Fire, p. 291.
The evidence of A.Q. Khan's sale of nuclear weapons technology continued to surface and was interpreted internationally as Pakistan government involvement. In negotiation between the United States and North Korea the North Korean alluded to the acquisition of sophisticated uranium enhancement technology that could only have come from Pakistan. This was interpreted as official Pakistan involvement and almost led to the imposition of sanctions against Pakistan by the U.S. government.
Later the U.S. obtained hard evidence of nuclear technology transfer from Pakistan in the form of blue prints of a centrifuge that had been developed at KRL. When the incident appeared in the press it disgraced Pakistan. Later inspectors found radioactive contamination in centrifuges operated by the Iranian government. The Iranians placed the blame for the contaminations on the source of the centrifuges; i.e., Pakistan. In 2003 a ship in the Mediterranean was found to be carrying centrifuge components from Malaysia to Libya. Libya named Pakistan as the source for the centrifuge components whereas in actuality it was a facility in Malaysia which was part of A.Q. Khan's network.
The Pakistan government investigation of Khan's activities in selling nuclear technology had started in 1987 with deals with Iran. In 1994-1995 Khan had 200 centrifuges manufactured of an older design and had them sent to Dubai for marketing. He did it solely for the money and had led a life of luxury based upon the proceeds from his networks promotion of nuclear proliferation.
Any punishment of A.Q. Khan involved some delicate issues. First, from his actual role and his self-promotion he was considered a national hero. Any prosecution of him would result in public protests. To his credit, A.Q. Khan did not sell the most advanced equipment designs available at KRL. To Libya he gave a deal which involved Libyan sources having to supply an essential component the Libyan engineers could not possibly supply thus extracting about $100 million from them without actually enabling them to create nuclear devices. On the other hand, from the Pakistani point of view he may have committed the unpardonable; i.e., provided secret information to the Indians. A public trial of A.Q. Khan would have embarassed Pakistan even more than the public disclosure had already done.
Musharraf settled for a compromise.
I wanted to meet A.Q. myself and talk to him. When we met and I confronted him with evidence, he broke down and admitted that he felt extremely guilty. He asked for an official pardon. I told him that his apology should be t the people of Pakistan and he should seek his pardon from them directly. it was decided that the best course of action would be for him to appear on televison and apologize personally to the nation for embarassing and traumatizing it in front of the entire world. I then accepted his request for a pardon from trial but put him under protective custody for further investigation and also for his own sake.Since then, we have isolated A.Q. and confined him to his house, primarily for his own security, and interrogated him at great length.
In the Line of Fire, pp. 294-295.
In summary Musharraf says
For years, A.Q.'s lavish lifestyle and tales of his wealth, properties, corrupt practices, and financial magnanimity at state expense were generally all too well known in Islamabad's social and government circles. However, these were largely ignored by the governments of the day, in the interest of the sensitive and important work he was engaged in. In hindsight, that neglect was apparently a serious mistake.In the Line of Fire, p. 296.
Somehow it was never noted that in 1975 A.Q. Khan betrayed the trust of his employer in the Netherlands in stealing its plans and secrets and, if effect, selling them to the Pakistan government. Apparently the leopard does not change its spots.
The civilian government which took power in March of 2008 is considering the status of A.Q. Khan. Khan's attorneys are petitioning for his release from the house arrest that was imposed upon him four years ago.
(To be continued.)
(To be constructed.)
There is no doubt that Kashmir and Jammu should have been part of Pakistan. However the quest of Pakistan to right this wrong has cost Pakistan dearly, beyond all its possible value. In the early years India and Pakistan traded extensively, as was appropriate for countries so close together in terms of geography and culture. The political dispute of Kashmir and Jammu not only curbed the natural trade flows it resulted in the militarization of Pakistan. Now a third of the budget in Pakistan goes to the military. This means other governmental functions are starved for funds and this has shown up in terms of misery for the civilian population. And this has led to the military usurpation of political power and its reluctance to relinquish it. Pakistan can not afford to spend so much on the lost cause of Kashmir and Jammu.
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