PAKISTAN: POLITICAL ECONOMY AND POST-2000 DEVELOPMENTS

After a downturn during the 1990s, the economy of Pakistan experienced a dramatic revival in

the post-9/11 period after 2001. In 2007, this economic surge was still in evidence, with an

average growth rate in excess of 6% over the period. The economy had observed cyclical

patterns in earlier decades, and therefore by 2007 the question remained to what extent and for

how much longer this upturn could be maintained. Tied to these questions was the issue of how

long the military dictatorship of President Pervez Musharraf would last. Beginning with the coup

that ousted the civilian government of Prime Minister Nawaz Sharif in October 1999, and initially

unable to reverse the economic malaise it had inherited, the Musharraf regime had overseen

the return to economic buoyancy since 2002. These developments can be better understood in

the context of broader impacts on political economy that have shaped Pakistan’s economic

structures and processes before and after decolonization in 1947. A brief survey of these

emerging patterns in political economy will provide a useful perspective to an analysis of the

economic scenario since 2000.

To a large extent, Pakistan’s political economy was shaped by developments in the colonial

period of British rule. The nature and extent of economic change in the Indus basin had decisive

ramifications for the post-colonial period. These developments hinged principally on the

emergence of an extensive network of perennial canals, taking off from the Indus and its

western tributaries, in the provinces of Punjab and Sindh. Constructed from the mid-1880s,

these canals transformed hitherto arid and barren land into an agricultural zone that is of critical

value to, and indeed underwrites, the contemporary Pakistani economy. The low population

density of essentially semi-nomadic pastoral tribes, and settled communities along riverain

tracts, was transformed through colonization and land settlement by allotting land to grantees

from more populous areas. The basis for the selection of grantees, and the patterns of utilization

of canal irrigated lands, established the mainsprings of the Indus basin’s political economy in

the twentieth century.

Land distribution was a process controlled by the state, since colonization occurred

predominantly on land categorized as ‘State Waste’, though the extension of canal irrigation to

proprietary land also consolidated the position of incumbent landlords. Since the bulk of

colonization occurred under imperialist rule, the British were able to gain major political leverage

from the transfer of a valuable economic resource to selected segments of native society. Most