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Peering into Pakistan

The political economy of war and neo-liberalism, and a deeply embedded system of patronage need to be understood to explain why Pakistan is a hotbed of religious militancy, why a seemingly divided and militarised State remains powerful, and why substantive political transformation is unlikely in the short run.


why substantive political transformation

Peering into Pakistan

is unlikely in the short run.

‘The Unplanned Revolution’2

Aasim Sajjad Akhtar A handful of Pakistani scholars have been

The political economy of war and neo-liberalism, and a deeply embedded system of patronage need to be understood to explain why Pakistan is a hotbed of religious militancy, why a seemingly divided and militarised State remains powerful, and why substantive political transformation is unlikely in the short run.

ollowing the sensational discovery of Osama bin Laden in the garrison town of Abbottabad, it has become more difficult than ever to write about Pakistan without digressing into superficial narratives about religious militancy, the machinations of the country’s military, and the vagaries of regional geopolitics. It is true that much of what is projected about Pakistan – or not, as the case may be – can be explained by the fact that mainstream politics is deeply riven by intrigue. Add to this the ethnocentrism that runs through much analysis that originates in western metropolises and the obsession with the motivations of actors in the “great game” currently being played out on Pakistani (and Afghanistani) soil – including the secretive (and often brutal) conduct of the country’s security apparatus – is easily understood.1

Having said this, conspiracy theories exist because conspiracies do take place, even if the prototypical “foreign hand” theories cultivated by the military establishment and its loyal lackeys in the media and academy dominate more subversive narratives. I believe that it is only possible to make sense of the complex wrangling of “great men” by probing the tremendous social change that has and continues to take place across the length and breadth of the Pakistani social formation. Relatedly, rationalising the Pakistani military’s apparent duplicity in dealing with its erstwhile protégés requires some serious thinking about the sociological bases of the State.

My objective in this exposition is to provide some insight into the political economy of change in Pakistan and the ideological and social polarisations therein. In doing so I hope to show why certain intellectual trends predominate. The political economy of war and neoliberalism, and a deeply embedded system of patronage, need to be understood if meaningful explanations are to be forged for why Pakistan is a hotbed of religious militancy, why a seemingly divided and militarised State remains powerful, and attempting over the course of many years to counter the perception that Pakistani society has changed little in the more than six decades since the end of colonial rule. This perception is propagated widely by the urban, educated elite in its caricaturing of the rural masses and the omnipresent feudal lord. A static social structure produces an intrinsically corrupt political leadership, constituted primarily of the ever-present feudals. The dissident view posits that the old feudal incumbents are increasingly challenged by the commercial nouveau riche, the social formation is no longer primarily rural, and labour and capital are both highly mobile.3

I concur that the deepening of capitalism in society has forever changed patterns of social and political exchange, and what is emerging on the other side is a picture of both extreme differentiation, and ever more ruthless competition for what are considered scarce economic and political resources. The manipulations of the State – and particularly the military – and piecemeal political realignments that have taken place in the wake of the afore mentioned social changes have polarised politics along ethnic and religious lines. Those who talk class politics, having always found it hard to establish their niche within Pakistan, are now struggling to be heard in a society wracked by sectarian and ethnic conflict.

This State of affairs – widening social (including class) chasms, no-holds-barred competition in the battle for political and economic resources, and increasingly incongruous and conflict-ridden politics – has intensified in the last decade. I believe that there are a handful of important factors that underlie this intensified polarisation that have also helped consolidate the broad secular trends of urbanisation, enhanced labour and capital mobility, and the expansion of a commercial middle class.

It is now well-established that the reaction of western governments and international financial institutions (IFIs) to the attacks on 11 September 2001 has had great bearing on Pakistan’s polity, economy and society. However there has been near

Aasim Sajjad Akhtar (amajid@comsats.net.pk) teaches political economy at Quaid-e-Azam University, Islamabad.

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july 9, 2011 vol xlvi no 28


silence – both within the popular media and in scholarly circles – on what might be called the “political economy of war”. In short, an already huge underground smuggling economy which has thrived on the Pakistan-Afghanistan border for the best part of three decades has been given a massive fillip by the intensification of armed conflict on both sides of the border. One of the major outcomes is that Pakistani society has been flooded with cash. Add to this the major inflow of remittance money from rich Pakistanis following 9/11, an investment binge on the part of Gulf states, and the rapid financial liberalisation

enforced by the IFIs, and it becomes clear that the winds of change are gusting harder and faster than ever before.

The Political Economy of War

By definition, details of the underground economy are underspecified. In my reckoning there have been only a handful of efforts to outline its sociological and political economy bases. Indeed the little information in the public realm deals mostly with heroin smuggling and gun-running.4 In recent times it has become common knowledge that wheat, petrol and a host of consumer durables are smuggled into Afghanistan by Pakistani businessmen where profit margins are exponentially greater. More generally informalisation in Pakistan has not been the subject of any major academic work or policy focus, despite the fact that it is becoming a favourite topic of sociologists, economists and historians throughout the world.5 As such much of what I suggest here is based on anecdotal information that needs to be built upon through more systematic study.

The underground economy in Pakistan features a close nexus between State functionaries, suppliers of goods, transporters, and merchant-traders. On the Pakistan-Afghanistan border at Chaman (Balochistan), for example, there is open sale and purchase of guns, cars, and electrical equipment under the watchful eye of border security. In the north, massive amounts of weapons and contraband come into the country via the Federally Administered Tribal Areas (FATA). These goods are transported across the border and then into Pakistan’s urban centres in huge oil tankers and dumper trucks. According to the World Drug Report 2010, approximately 150 metric tonnes of heroin were smuggled through Pakistan and onto destinations further west in 2009. Thus Pakistan is the world’s biggest heroin trafficking country outside of its neighbour Afghanistan.6

The most popular destination of the drugs and guns coming into the country from its western borders is the country’s biggest metropolis Karachi, from where most of the goods are exported out of the country to western metropolises while some circulate within the city and surrounding urban centres. Crucially, Karachi’s transport industry is dominated by Pakhtuns, a reflection of the close link between the almost 40-year old war that has ravaged Pakhtun society and the burgeoning countrywide underground economy that has been produced by this war.7

Karachi is home to numerous conflicts, including ethnic and sectarian ones, which have ebbed and flowed over the years; in recent times these conflicts have once again reared their ugly head. The free flow of sophisticated weaponry into the city has given impetus to turf wars between warring gangs that contend for


all manner of political and economic re-Even outside of the upwardly mobile sources. Competition, often bloody, over segments of society, capital has penetrat


urban real estate has become particularly intense in the past decade, a reflection both of the continuing urban explosion, and wider structural changes wrought by the forces of neo-liberal globalisation.8

Pakistan as Laboratory of Neo-liberalism

If Pakistan is awash with cash that has followed the intensification of a four-decade old political economy of war, then it has also functioned in the last decade as a virtual laboratory for neo-liberalism. While it is not possible to specify the scale of the underground economy, it is well known that tens of billions of dollars of official aid have flowed into the country since 9/11. Perhaps more importantly, the IFIs’ insistence on radical financial liberalisation has precipitated a windfall of low-interest credit for an urban middle class taken in by the glitter of consumer capitalism. Added to these easy loans has been the large amount of remittances sent home by (mostly) rich Pakistanis residing in western countries. Much of this cash has been put into circulation in high-return, high-risk sectors such as real estate and the stock market – in short, a “hot” capital binge with investors allowed free entry and exit.9 It has been the investment of remittance monies in real estate which to a large extent explains the amazing rise in the price of land.10

The dramatic inflow of cash into the country during the Pervez Musharraf period explains the speculative growth bubble that was formed. Predictably, this bubble burst spectacularly due both to the internal contradictions of the International Monetary Fund-championed neo-liberal growth strategy and the rise of food and oil prices on the world market (along with other exogenous shocks). Yet the economy remained flooded with cash, mostly in the hands of the super-rich, but also circulating freely amongst middle-class consumers, as well as the trader-merchant segments. As I have already pointed out, much of this cash cannot be formally accounted for, and even where drugs and contraband are not the goods being traded, the tradermerchant lobby has fended off government attempts to survey and take account of their enterprises.

ed deep into relatively remote regions of the country, thanks in large part to the mobile phone revolution. A host of foreign companies – mostly Arab but also China Mobile – have invested heavily in the telecommunications sector. The result has been a remarkable explosion of mobile phone coverage and usage. There are also now dozens of private television channels operating in the country, turning tens of millions of working people into a captive audience and further enhancing the scope of the consumer capitalist movement. That labour has become even more flexible and informalised in this same period proves just how perverse the logic of capital is – it lures and seduces, even while exclusion and oppression intensifies.

Revisiting the State

It is only by recognising the profound changes that continue to take place in Pakistani society that one can truly make sense of the State – what it is, who it represents, and how it conducts itself. As per the convention in literature on informality, there is a need to distinguish between the formal State – which projects itself as institutionally and ideologically coherent – and the informal or shadow State which is by definition constituted of fragments: State functionaries using their official positions for personal profit.11 Yet it would be all too easy to be seduced by the typical poststructuralist characterisation in which class and State power do not enjoy analytical primacy.12 In fact I want to suggest that even while the State appears to fragment, the existing structure of power is resilient due to a dialectic of coercion and consent that breeds cynicism, fear and alienation.

The Pakistani state – like most other postcolonial variants – has long been characterised as the exclusive preserve of a small oligarchy that reflects continuity from the colonial period.13 Yet while it is undoubtedly true that the “steel frame” – civilian and military bureaucracies – and propertied classes enfranchised by the British Raj remain powerful, it is also true that widespread social changes and the cynical use of Islam by the oligarchy have ensured that the insularity of the oligarchy has eroded. In particular a nativised

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july 9, 2011 vol xlvi no 28


commercial middle class, which includes a burgeoning religio-ideological elite, has forced its way into political reckoning.14 The social classes from which the civilian and military bureaucracies are recruited have also become much more diverse. The resulting disjunct between a relatively westernised and secular oligarchy and the newer members of the ruling clique is just one of the many contradictions that characterises the military-led statist project – it is this contradiction that the so-called war on terror has decisively exposed.15

Yet the uneasy tension between the old incumbents and the relatively new “vernacular interests” will not necessarily result in rupture, not least of all because both segments are implicated heavily in the political economy of war. Both are also committed to a cynical patronage politics that keeps the subordinate classes pliant, a trend that has been exacerbated by the consumer capitalist upheaval of the past decade.

This patronage politics – with deep roots in the colonial model of government

– was given new impetus under the regime of general Zia ul Haq, following an upsurge of progressive politics in the preceding period (1967-77). Islamisation was the policy through which the State arrogated to itself the right to regulate the public sphere. Just as the blowback of this policy is being felt within the State, it is being reflected in various forms of societal dissonance, including the fragmentation of progressive thought.

This is not to suggest that resistance to organised power has dissipated – it can be argued that resistance has actually intensified. In particular the country’s largest province of Balochistan is wracked by a lowintensity insurgency that has generated substantial support from a wide cross- section of Baloch society. Yet the machinations of the State have served their purpose. Ethno-nationalists that have historically challenged the State’s unitary character while retaining a staunch commitment to anti-imperialist politics, have become increasingly distant from the Left, with xenophobic tendencies intensifying accordingly.16 Young people – now a majority of the population – have been brought up to despise politics and politicians. As elsewhere in the world, the non-governmental organisation (NGO) revolution has served to legitimate post-cold war intellectual and political trends rather than

facilitate counter-hegemony.

So even though the military’s policy of instrumentalising Islam to serve domestic control objectives and fuel an expansionist foreign policy has imploded spectacularly, the increasingly untenable situation is not being redressed, in large part because of the absence of a coherent and country-wide counter-hegemonic political force.17 It is by and by that Washington is also mounting unprecedented pressure on the army General Headquarters (GHQ): the American Empire is least concerned with the welfare of Pakistan’s people and it would be foolish for the latter to look to Washington to cut the military establishment down to size.

In a nutshell, even while divergent ideological and institutional tendencies become more acute within the ruling class, the shared stakes in the cynical political economy of war and neo-liberalism preclude a conclusive rupture. While it would be remiss of me to avoid mention of the obvious tensions between the military establishment and civilian political forces, and


the fact that the former is clearly more culpable for the current impasse than the latter, it cannot be argued that the present Pakistan People’s Party (PPP) government is doing anything more than negotiating for a greater stake within the existing system rather than seeking to transform it. PPP sympathisers argue that this is the only available strategy and one which will herald gradual change, but this hypothesis holds only if one is unwilling to build a more radical political alternative.

Progressives at Loggerheads

In the final analysis, speculation about the opaque tug of war within Pakistani corridors of power is unlikely to abate anytime soon. I have already asserted that there is an urgent need to undertake more detailed study of some of the issues I have outlined, and particularly the working of the actually existing economy. It is only in light of more concrete empirical evidence that the confusing narratives propounded by the establishment and its hangers-on can be definitively challenged.18

Having said this there are serious differences within progressive circles about the principal contradiction in the current conjuncture and appropriate political strategies therewith. I can identify at least three distinct strands of thinking and action. These are not mutually exclusive but in recent times have unfortunately appeared to be so.

First there are the “secularists” – mostly hailing from the urban upper-middle class, they argue that the most urgent task of progressives is to rally around the “antiterrorism” cause. They tend to be alarmist due largely to their alienation from wider society and their inability to relate to the “religious” sentiments of ordinary working people.19 They view any kind of reference to western imperialism as playing into the hands of the religious right.

Second there are the ethno-nationalists, to whom I have already referred above. Ethno-nationalism has been the dominant form of resistance to the State and propertied classes throughout Pakistan’s 63 year existence. In recent times distrust amongst ethno-nationalists of anything emanating from the Punjabi centre has reached epic proportions. It is becoming increasingly difficult to convince ethno-nationalists – particularly in Balochistan – that Pakistan’s oppressed nationalities share a future with Punjab’s working people.

The Left rounds out the progressive intellectual spectrum. It has a long (and tortured) history, which is both cause of its continuing intellectual stagnancy but also a necessary springboard for regeneration. Opposed in principle neither to the secularists nor the ethno-nationalists, the Left is struggling – like its counterparts in many other parts of the world – to remake an anti-imperialist politics of class in the face of much more potent, and apparently immediate, politics of identity.

In particular the Left has to move beyond superficial explanations for the spread of religious militancy and imperialist war, and, in totally different vein, increasing ethnic polarisation. Until and unless the Left is able to provide a clear and coherent analysis of the structural roots of the current imbroglio, and a workable politics that addresses the concerns of both the secularists and the ethno-nationalists to boot, progressives will remain divided. The already serious structural contradictions that run rife through the polity, economy and society will then only become more acute with little chance of a new progressive equilibrium being established.


1 See Aasim Sajjad Akhtar, “With Us or Against Us”, published at www.zcommunications.org/znet, 21 May 2011.

2 See note 3. 3 For a cogent exposition of this view, see Arif Hasan, 2002, The Unplanned Revolution: Observations on the Process of Socio-Economic Change in Pakistan, City Press, Karachi. 4 See Eqbal Ahmad and Robert J Barnett, 2006, “Bloody Games” in C Bengelsdorf et al (ed.), The Selected Writings of Eqbal Ahmad (New York: Columbia University Press); Ikramul Haq, 1996, “Pak-Afghan Drug Trade in Historical Perspective”, Asian Survey, Vol 36, No 10, pp 945-63.

5 For example, there is now a plethora of work on informalisation in the Indian context, much of which has been published in EPW. The importance of the informal economy in India is recognised across the board – even the government has taken initiatives (National Commission for Enterprises in the Unorganised Sector) to document and understand the multifarious aspects of informality.

6 See United Nations Office of Drug Control (UNODC), World Drug Report 2010, available at www.unodc.org

7 Dumper trucks in Karachi are controlled almost exclusively by Waziristanis. It is in the North and South Waziristan tribal agencies that the current war rages most ferociously, and, it must be said, opaquely. I should also note here that some of the available literature attributes much of the Kalashnikov and drug culture that developed in Pakistan during and after the original Afghan war in the 1980s to the massive influx of Afghan refugees. See A Z Hilali, 2002, “Costs and Benefits of Afghan War for Pakistan”, Contemporary South Asia, Vol 11, No 3, pp 291-310. For the purpose of this article, many refugees – on account of their Pakhtun ethnic roots – have become part and parcel of Pakistani society. Amongst the Pakhtuns involved in the transport industry is a substantial refugee component, both owners and workers.

8 See Arif Hasan, “Politics of Ethnicity”, DAWN, 25 June 2010.

9 See Hisaya Oda, 2009, “Pakistani Migration to the United States: An Economic Perspective”, IDE Discussion Paper, No 196 (Chiba: Institute of Developing Economies).

10 The situation in the federal capital Islamabad merits attention. A decade ago most of the land on the outskirts of the city was either lying idle or being used by hereditary owners for seasonal agriculture. With the dramatic influx of money, suburban and rural lands have been transformed into prime property, with values rising up to twentyfold. Previously modest families have become billionaires overnight, while real estate agents and revenue collectors have also secured a healthy share of the windfall rents available.

11 See, for example, Barbara Harriss-White, 2003,

India Working: Essays on Society and Economy

(Cambridge: Cambridge University Press). 12 g-

r a gr a g
t at a
at iat i
gnisant of the importance of the discursive realm, see Jeffrey Craig and Jens Lerche (2001), “Dimensions of Dominance: Class and State in UP” in Everyday State and Society in Modern India, edited by Christopher Fuller and Veronique Benei (London: Hurst Co).

13 For the classic theorisation by Hamza Alavi and an alternative interpretation see Aasim Sajjad Akhtar, 2010, “Pakistan: Crisis of a Frontline State”, Journal of Contemporary Asia, Vol 40, No 1, pp 105-22.

14 See Mustafa Kamal Pasha (1997), “The ‘Hyper-Extended’ State: Civil Society and Democracy” in State, Society and Democratic Change in Pakistan, edited by Rasul Bakhsh Rais (Karachi: Oxford University Press).

15 There is also the clear gap between the “high” and “low” bureaucracies; within the civil service, police and military. The distinct class and regional backgrounds of “high” and “low” bureacrats produce a far less cohesive State than is often assumed. Sudipta Kaviraj puts it thus: “Long-term historical memories and time tested ways of dealing with power of the political authority took their revenge on the modern State, bending the straight lines of rationalist liberal politics through a cultural refraction of administrative meaning”. See Sudipta Kaviraj (1997), “The Modern State in India” in Dynamics of State Formation: India and Europe Compared edited by S Kaviraj and Martin Doornbos (New Delhi: Manohar), p 235.

16 See Aasim Sajjad Akhtar, 2010, “What Is Really Happening in Pakistan”, Economic Political Weekly, Vol XLV, No 10, pp 10-11.

17 It is beyond the scope of this article to speculate on the extent to which religious militias are now completely autonomous of the State, and have established a meaningful base of support within society. In part what I am arguing here is that there are so many elements within the State’s security apparatus that have cultivated links with militias over time that a complete rupture is simply impossible.

18 In recent times the official narrative has been remoulded and the United States has been elevated to public enemy number one. Washington and New Delhi (with Tel Aviv also involved) are seen to be colluding to defang Pakistan. This flies in the face of the fact that, current tensions notwithstanding, Washington continues to be the militarised state’s biggest benefactor in terms of economic and military aid.

19 This alienation can be traced back to the Zia period. See Arif Hasan, 2002, “The Roots of Elite Alienation”, Economic Political Weekly, 2-9 November, pp 4550-53.

Economic Political Weekly

july 9, 2011 vol xlvi no 28

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