Pakistan has been through a decade of unprece dented social and political turmoil, economic stagnation and rising poverty. This stagnation is unique in Asia, which has emerged as the fastest growing region of the world. The decade of the nineties has been a "lost decade" for Pakistan. Even Bangladesh and Nepal have notched up growth rates above 5 percent per annum in the last decade.
What are the factors that have prevented Pakistan from utilising the opportunities presented by the end of the Cold War and the gradual dismantling of barriers to trade and investment in Asia? Do these arise merely from the so-called "mismanagement" of the economy, as General Pervez Musharraf and his lawyers argued before the Supreme Court to justify the coup that brought him to power in 1999?
A study of Pakistan's political economy over the last three decades might point to some answers. The crisis faced by Pakistan's economy in the 1990s has its roots in the nature of dependent industrialisation that has long characterised Pakistan's economic strategy. The close links forged with Western powers, especially the United States, and the rewards of this special relationship, undermined the potential for a self-reliant and sustainable growth strategy.
In the 1980s, when India was stuck with its 'Hindu rate of growth', the Pakistani economy consistently experienced high rates of growth. In the early 1990s, Pakistan's per capita income of USD 500, was about 25 percent higher than India's figure of USD 390. The average Pakistani was (and is) better fed and clothed than the average Indian. While 52 percent of India's population in 1992 survived on an income of less than a dollar a day, only 11 percent of Pakistanis were below this poverty line. Pakistan has roughly two million migrant workers, whereas with its much larger population, Indian has the same number of migrant workers in West Asia. What, then, is the cause of the downward spiral that has forced Pakistan to crawl before the IMF, not once, but thrice during the last decade?