DDBNovember 13, 2010Comparative Government Term Paper

India and Pakistan: A Comparison India and Pakistan are major players in Asia and the Middle East, respectively. Each has their own advantages, whether they be military, economic, diplomatic or a combination of all three. However, besides both countries being major powers, they have been at each other’s throats since the partition of India by the British in the late 1940s. It is interesting that even though both countries had the same colonial oppressor, each one evolved in a different manner and ended up being almost complete opposite of each other, India is a democratic, economic powerhouse while Pakistan is an on again off again democratic state with serious internal security problems. The purpose of this essay will be to compare and contrast India and Pakistan in terms of political economy, political regimes and state sovereignty. Currently India is an economic powerhouse not only in Asia but also around the world, due to its highly trained and skilled engineers and IT sector. These have helped fuel India’s economic growth as well as the government’s investments in infrastructure and education. Many people know what India is today, yet few know how became the world’s fifth largest economy in 2009 (CIA Factbook). The first roads to reform India’s economy began before independence. The first real blueprint to develop India’s economy was made by Sir M. Visveswaraya. He, as well as other Indian economists of his time, was deeply influenced by what he saw as “the success of Soviet planners in rapidly transforming Russia’s underdeveloped economy.” (Srinivasan 2) By investing heavily in industrialization, the thinking was that India could duplicate states like the US and be able to have a strong and stable manufacturing economy. This economic policy coincided with India’s goal of alleviating poverty and the belief that it could be solved by developing large-scale industries. The majority of the Indian political leadership believed in a strong government hand in the economy, comparable to that of the USSR. They even started out with Five Year Plans, thus cementing the thinking that a government-controlled economy was entirely legitimate. India gained its independence on August 15, 1947. Between that time and the year 1965, a planned economy was going well for India and the government saw no need to do any free-market reforms, but in 1965, events took a turn for the worse. A massive drought hit the country after the Indo-Pakistan War. Due to the sheer severity of the drought and its affect on agriculture, the Indian government was forced to import more food, thus running up a debt, so much so, that they “had to seek the assistance of the International Monetary Fund and the World Bank” (Srinivasan 8). The Bank’s main goal was to liberalize the Indian economy. The prime minister of India, at the time, Mrs. Gandhi, “devalued the rupee in June 1966 and announced a set of liberalizing measures” (Srinivasan 8) and the Bank promised that it would give India loans to support their program of liberalization. Unfortunately, the Bank reneged on its promise, possibly due to a second drought later in 1966 which led to inflation, thus offsetting the beneficial effects of devaluing the rupee. Due to experiencing inflation, Mrs. Gandhi was highly criticized and did poorly in the next round of elections, thus Mrs. Gandhi, as well as the other political parties, abandoned economic liberalization until the 1990s. When the ‘90s finally came about, India was forced to liberalize their economy due to a number of circumstances. In the ‘80s, taxes decreased while expenses increased, resulting in deficit of 12% of

GDP. Also the Gulf War in 1990 raised the price of crude oil dramatically, which eliminated internal remittances and finally the coalition government raised political uncertainties in India, thus lowering foreign creditor confidence, which led to an outflow of foreign capital. When all this, as well as double-digit inflation, came together, India was in such an economic mess that not even assistance from outside sources could help them and India came close to defaulting on its debt. Thankfully, Prime Minister Pamulaparthi Venkata Narasimha Rao and his administration not only helped to relieve the immediate economic problems, but saw the long-term problems of the economy. Reforms, such as “an initial devaluation of the rupee and subsequent market determination of its exchange rate, abolition of import licensing with the important exceptions that the restrictions on imports of manufactured consumer goods and on foreign trade in agriculture remained in place” (Srinivasan 11), were launched. The reforms the benefits of economic liberalization, such as “a revival of strong economic growth, rapid expansion of productive employment, a reduction of poverty, a substantial boom in exports and a marked decline in inflation” (Srinivasan 12) which allowed the India to become the economic powerhouse it is today. The history of Pakistan’s political economy is the complete opposite of India’s in that in India, there was a stable government from the start, while in Pakistan, there was constant political turmoil. After the death of their first prime minster, Liaquat Ali Khan, “and the ascent of bureaucrat Ghulam Mohammed to the office of Governor-General, the supremacy of politicians in the political order was lost.” (Husain 2) Mohammed eventually established complete control the country and created a new Cabinet, that, coupled with confrontation between the political leaders of the East Bengal province and the political elite of West Pakistan, forced the economy to take a backseat to political instability. In the 1960s, the first military dictator of Pakistan, Ayub Khan, oversaw a short-lived boom in the Pakistani economy, but this eventually was taken over by more political instability due to Pakistan’s civil war which was caused by Yahya Khan. Khan was the Army chief, who, after having imposed martial law due to a party opposed to the Ayub government was elected in 1970, refused “to transfer power to Sheikh Mujibur, the elected majority leader” (Husain 4) increased Bengali mistrust of West Pakistan, which led to Pakistan’s civil war. In the 1970s, Benazir Bhutto’s “populist policies of nationalizing industries, banks, insurance companies, educational institutions and other organizations, derailed Pakistan’s journey toward modernization and faster economic development” (Husain 5), so much so, that East Asian economies that were trailing behind Pakistan in the 60s overtook them. When this is coupled with “the oil price shock of the 1970s as well as droughts, floods and the withdrawal of external assistance” (Husain 5) the economy turned sour. This was later exacerbated by the fact that economic inequality and inflation increased while the manufacturing sector became dependent on massive government injections to remain profitable.July 1977 saw the overthrow of the Bhutto government by the military leader General Zia ul-Haq, who established another military dictatorship. During this time Pakistan’s economy improved somewhat in the ‘80s, with GDP growing at an annual rate of 6.6%, yet deficits grew to 8% of GDP. The situation got so bad that Pakistan had to approach the IMF for assistance in the 1990s. Also in that decade nine different governments, “four interim-appointed, four elected and one following the military coup of October 1999,” (Husain 6) ruled Pakistan. Even though economic reforms were passed, economic indicators fell sharply due to domestic and foreign lenders refusing to lend the country anymore money due to Pakistan’s failure to implement economic reforms. The economy, already bad, worsened even further due to political corruption. In October 1999, the incoming military government instituted

economic policy reforms which liberalized the economy. That, as well as better overall economic governance, led to economic growth, but it began to slow down as political corruption returned. India and Pakistan are virtually exact opposites in terms of political economy. India has had a stable government which, while not initially, eventually encouraged and promoted economic liberalization, while Pakistan’s economic problems stem from its inability to maintain a stable government for more than a few years. When exploring the history of Pakistan, one will quickly learn it has rarely been able to keep a democratic regime in place due to near constant “power struggles among presidents, prime ministers, and army chiefs” (Kronstadt 13). Just as how the economy was never able to become stable because of Pakistan’s political unrest, a democratic regime was never stable for the very same reasons. For a large part of its history, Pakistan has had nondemocratic, military-based, dictatorial regimes that, on three different occasions, seized power outright from civilian governments. Since 1970, five consecutive governments were voted into power, “ but not a single time has a government been voted out of power — all five were removed by the army through explicit or implicit presidential orders” (Kronstadt 13). As of recent, we have seen the first ever time where a military leader, in this case Pervez Musharraf, has stepped down from his post as a military dictator and taken on a solely civilian role in the government. This set the stage for Pakistan to shift to a democratic regime and has allowed for Pakistan’s current leader, Asif Ali Zardari to become president of Pakistan. In contrast, India has had a stable democratic regime since its independence and the democratic regime as a way to govern, has its roots, somewhat, in ancient India. The ancient Romans and Greeks who traveled to India reported in their work “of numerous cities and even larger areas being governed as oligarchies and democracies” (Muhlberger 2). This is further shown as in 1903 “T.W. Rhys Davids, the leading Pali scholar, pointed out in his book Buddhist India that the Canon depicted a country in which there were many clans, dominating extensive and populous territories, who made their public decisions in assemblies, moots, or parliaments” (Muhlberger 2). Thus a main reason why India chose to be a democratic regime is rooted in its history. As of current, India is experiencing problems due to its caste system as well as poverty and unemployment. The political party, the Indian National Congress, is supportive of affirmative action to help those who are socially or economically disadvantaged, thus these people now have a political outlet where they can tell of and have their grievances addressed. Pakistan and India are quite different in terms of political regimes. One has had near constant political upheaval, due to its constant struggles between factions while the other has democracy, somewhat, rooted in its history. However. both states are quite alike in that both have major challenges to state sovereignty caused by non state actors. India is currently dealing with the Naxalite-Maoist insurgency as well as terrorists. Pakistan is threatened only by terrorists. When it comes to India, the Naxalite Maoists may not be mentioned in the news, but they are a serious threat to the government of India and the general welfare of the state. India’s internal security is threatened by Muslim as well as Maoist terrorists. The main reason why India has Muslim terrorists is due to the economic inequality experienced by the Muslim community as can be seen by the “glaring socio-economic disparities between the two major religious groups [Muslim and Hindu]” (Alam 3). Terrorist groups “operating in the guise of social justice” (Fair 1) will definitely be able to attract Muslims who feel that they are being purposefully shut out from India’s economic boom. The Maoist insurgency affects India’s political sphere in that some political parties “come to a tacit agreement with the Maoists” (Tharu 97) and then “the Maoists target the candidates of

the opposing party” (Tharu 97) as to allow the party that will aid them to win the elections. This is quite dangerous as it does not truly allow people to vote for whom they want to be in office, rather it leaves the voters with only one option, that of the Maoists. It also affects the political process because by having an elected official who supports the Maoists, they will make sure that their town or province is a safe haven for the Maoists, allowing them a base to plan and carry out attacks on government forces. In Pakistan, the main internal threat to state sovereignty is terrorism. A large amount of the terrorism is “associated with Islamist sectarianism” (Kronstadt 2) and “has become an increasingly serious problem affecting major Pakistani cities” (Kronstadt 2). Due to these acts of domestic terrorism, it further destabilizes Pakistan and stunts its economic growth because the government then has to pour in tremendous amounts of money to launch military campaigns to fight these terrorists as well as spend even more money to repair the damages that have been inflicted on structures and civilians by the terrorists. Both India and Pakistan have serious internal security issues that threaten state sovereignty as well as the economic and political spheres. Both countries need to take proactive roles in ousting these threats as well as punishing any people who aid them. This could be done through establishing a committee on internal security that has a task force made up of elements of the police, military and judiciary system whos main goal would be to investigate politicians suspected of working with the Maoists/terrorists and bringing them to justice (which would be handled by the police and courts) and finding and dismantling insurgent/terrorist bases. In order for India to succeed, it must address the grievances of its Muslim population as to provide an incentive for its Muslim population to not join terrorist organizations as well as it would make India even stronger economically because they would have even more educated professionals who would be involved in producing goods or services, which would increase the country’s GDP. Also the Indian government needs to find out which politicians are making deals with the Maoist insurgents and bring them to justice as well as either lead a large military campaign to oust the Maoists, try to make them see that they can gain more out of politics than violence or look into exactly what the Maoists want and if they can somehow come to a lasting consensus. Meanwhile, Pakistan needs to campaign for the legitimacy of a civilian-led government and also needs to battle corruption and terrorism as to create the needed security situation so that the economy can begin to thrive. Both countries have serious internal issues that need to be dealt with, but also have things that could benefit them in the future. India has a large population that, if largely educated, can possibly bring India’s economy to the forefront, not only in Southeast Asia, but the world as well. Pakistan has the ability to become a regional power and leader in the Middle East if they get their security situation together which will allow their economy to begin to thrive.

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