CSS Pakistan Affairs | Economic Policies of Zia ul Haq
The following question of CSS Current Affairs is solved by Hinas Khan Yusafzai under the supervision of Howfiv’s Pakistan Affairs and Current Affairs Coaches. She learnt how to attempt 20 marks question and essay writing from Sir Syed Kazim Ali, Pakistan’s best CSS and PMS English essay and precis teacher with the highest success rate of his students. This solved past paper question is attempted on the pattern taught by Sir to his students, scoring the highest marks in compulsory and optional subjects for years, and uploaded to help aspirants understand how to crack a topic or question, how to write relevantly, what coherence is, and how to include and connect ideas, opinions, and suggestions to score the maximum.
Outline
1- Introduction
2- Zia-ul-haq: A contemporary reappraisal
3- Shedding light on the effectiveness of the economic policies of the Zia-ul-Haq regime
- ✓ Enriching agricultural growth through incentives and modernization
- ✓ Streamlining regulatory frameworks for private sectors
- ✓ Establishing Islamic banking institution
- ✓ Enhancing industrial development through investment incentives
- ✓ Maintaining economic stability via foreign aid support
4- Exposing the dark side of the economic policies of the Zia-ul-haq system of governance
- ✓ Relying heavily on foreign aid and debt
- ✓ Neglecting to tackle entrenched inequalities
- ✓ Failing to implement Islamic principles into tangible economic outcomes
- ✓ Disregarding essential human development and social services
- ✓ Grappling with inflation and fiscally unsustainable trends
5- Critical Analysis
6- Conclusion
Answer to the Question
Introduction
Pakistan’s third dictator, General Muhammad Zia-ul-Haq, ruled Pakistan from 1978 until his death in 1988 and implemented a series of economic policies that aimed to stabilize the economy and promote growth amidst political upheaval and social unrest. Zia’s administration was characterized by the introduction of Islamic economic principles. He introduced crucial changes in industrial and agricultural policies and took initiatives to improve foreign investment. However, Zia’s policies aligned with the modernization theory, aiming to enhance agricultural productivity through technological advancements and infrastructure development. Nevertheless, criticisms emerge while examining the policies that have distributional impacts on the country. Hence, his ruling style led to authoritarianism, which suppressed citizens’ rights and limited their participation in politics. This answer discusses the positive and negative aspects in depth of Zia’s economic policies.
Zia-ul-haq: A Contemporary Reappraisal
Before going down the ladder, an overview of Muhammad Zia-ul-Haq’s presidency is essential to understand. His dynamic legacy continues to shape Pakistan’s politics, economy, and society. Therefore, this contemporary reappraisal highlights Zia’s transformative impact on the country, marked by a harsh Islamization policy, authoritarian rule, and economic reforms. However, he has introduced agriculture, industrial, and poverty alleviation policies along with the help of foreign aid from the US and IMF; he introduced the Green Revolution and land reforms under the Policies of agriculture, whereas he took initiatives for industrialization and public sector reforms in industrial policies.
Shedding Light on the Effectiveness of Economic Policies of Zia-ul-Haq
The following are major features, putting the spotlight on the positivities in the economic policies of Zia’s system of governance.
- Enriching agricultural productivity through incentives and modernization
The first and foremost positive aspect of Zia-ul-Haq’s economic policies was enriching agricultural productivity, which resulted in significant growth in the agricultural sector. Illustratively, while he was in charge, he adopted modern farming techniques, such as farming techniques of the modern era and irrigation system expansion that increased the growth and the country experienced approximately 4.4 per cent annual growth in wheat production, rising from 7.6 million tons in 1977-78 to 12.6 million tons were produced from 1985-86. These statistics show that Zia was prone to economic growth through incentives, and his modernization approach helped the country reduce its reliance on imported food. He drive nation towards self sufficiency in food production by supporting farmers, he strengthened economy of the country. Hence, Zia enriched the nation with agricultural productivity by modernizing farming techniques and Providing them with incentives.
- Streamlining regulatory frameworks for private sectors
Zia’s economic policies have streamlined the regulatory framework for the private sector’s participation in the economy, which was another positive aspect at that time. His government established several tax incentives and relaxed regulations to promote a more business-friendly environment. For instance, by the mid-1980s, Pakistan’s textile exports surged, that has contributed substantially to the national economy. The textile industry, in particular, flourished under his rule, which led to an increase in exports. Through this step, Zia has allowed businesses to flourish, attracted investment, and wide-ranging Pakistan’s economic base, which had formerly been heavily reliant on agriculture.
- Establishing Islamic banking institution
Zia-ul-Haq’s other positive aspect of his economic policies was introducing Islamic banking to align Pakistan’s economy with Islamic principles. Illustratively, he launched interest-free banking as a part of his Islamization process, which established a new financial system based on profit-sharing rather than interest. By 1985, the majority of banks in Pakistan had adopted Islamic banking principles, attracting a section of the population that had formerly ignored traditional banking due to religious concerns. Thus, this system not only fleshed out the scope of financial services but also created new opportunities for people to invest and save within a religiously compliant framework.
- Enhancing industrial development through investment incentives
Another positive point in the economic policy of Zia-ul-Haq was to enhance industrial development by emphasizing foreign and domestic investment. To illustrate, his government’s liberalisation efforts introduced the tax breaks and reduced tariffs that led nation towards the Foreign direct investment (FDI). As a result, new industries were established especially in consumer and cement goods production. Also, the country experienced an increase in industrial output that produced more jobs and boosted the economy in the year 1988. Therefore, Zia promoted industrial development, laying the foundation for future economic growth.
- Maintaining economic stability via foreign aid support
Last but not least, maintaining economic stability through Foreign assistance support was another positive feature of the economic policy of Zia’s regime. Particularly from the United States(US), IMF, and World Bank. However, the US provided aid to Pakistan to stabilise its economy because it played a strategic role in the Afghan war. Through the US financial assistance, Pakistan used to balance and maintain foreign investment. As an illustration, the US aid helped Pakistan to overcome its major financial crisis by offering Funds for projects related to economic development. This example makes it clear that all this aid was much needed at that time for economic stability and sustainability, which further pushed the government to sustain several essential services like infrastructure development in order to avoid future economic collapses.
Exposing the Dark Side of the Economic Policies of the Zia-ul-Haq System of Governance
Following are the main headers, that exposes the negativities in the economic policies of the Zia’s system of governance.
- Relying heavily on debt and foreign aid
One of the main drawbacks of Zia-ul-Haq’s economic policies was its heavy reliance on foreign aid. Especially from the United States(US), which significantly affected Pakistan’s economic independence. All that funding was primarily due to Pakistan’s role in supporting the Afghan Mujahedeen during the Cold War era. The US used the country for their purpose, and the same goes for Pakistan; it needed aid to strengthen the economy, but due to too much interference from the US, Pakistan lost its freedom regarding many things, such as giving aid only to military expenditures rather than sustainable economic development. Taking real-time example from Pakistan’s history, when the regime of Zia came to an end, the country was fully dependent on external finances that relied on foreign aid and loans, which placed the economy in a dubious position. This shows that at that time, Zia ignored the long-term effects of loans and aid on the country’s reputation. Therefore, instead of focusing on long-term investments in sectors like education, health, or infrastructure, the heavy loans pushed the country toward a debt trap that left the future governments to tussle with fiscal instability.
- Neglecting to tackle entrenched inequalities
Another dark side of Zia’s economic policies is his negligence towards social inequalities. While Zia asserted agricultural reforms and industrial growth, his policies mainly benefited large landowners and industrial elites, adding fuel to the fire of existing inequalities in society. To illustrate, agricultural subsidies and credit facilities meant to enhance production are way out of proportion by favouring large-scale farmers and entrenched landlords. As a result, it widened the gap between wealthy landowners and the poorer small-holders, who lacked access to these financial benefits. Meanwhile, this void of land reforms and the limited attention on poverty alleviation meant that the advantages of economic growth during Zia’s regime were not fairly distributed, which left rural poverty largely unaddressed and going downhill the already skewed wealth distribution in Pakistan.
- Failing to implement Islamic principles into tangible economic outcomes
The third negative economic policy point of Zia-ul-Haq’s pursuit was to Islamize the economy significantly by introducing interest-free banking. It faced failure in implementation because it was poorly executed, which resulted in confusion among people. For instance, zakat and usher, which aim to reallocation wealth, were tainted by corruption and weak governance, which severely tore apart their effectiveness. The push for Islamic financial reforms, such as the prohibition of interest (Riba), was not supported by broad economic restructuring. Many banks battled to adapt to the new system, which led to a lack of confidence in Islamic banking mechanisms. As a result, Zia’s poorly planned Islamization, although politically driven, created confusion in the financial system without achieving the intended economic or social benefits.
- Disregarding essential human development and social services
Another negative side of Zia’s economic policy was his prone approach towards military and strategic concerns. Due to this attitude, he overlooked the need for investment in human development, for example, in education and healthcare. Although defence spending was increased slightly during his rule, the social sectors were left underfunded. For instance, Zia’s regime did little to tackle the literacy limitations and improve healthcare infrastructure, which led to long-term consequences for Pakistan’s economic development. This reveals that his neglection of these critical areas not only hampered the social mobility in the country but also created an under-educated workforce, which limited the country’s economic potential in the global market; Therefore, the lack of investment in human capital during Zia’s era had a lasting negative impact on Pakistan’s ability to compete globally.
- Grappling with inflation and fiscal unsustainable trends
Lastly, All those economic policies grappled Pakistan with inflation and unsustainable Fiscal trends. It actually wore away the purchasing power of the population throughout Zia’s regime. As a demonstration, Zia’s economic management did not sufficiently address the underlying causes of fiscal imbalances: inefficient tax collection and uncontrolled public expenditure. Also, the Price control strategy on essential goods that was providing temporary relief, worst, failed to reform the structural issues, which led the nation towards excessive inflation. This failure indicates that to enlarge the reform of the taxation system; the government should stop relying heavily on indirect taxes and external loans to prevent the nation from inflationary pressures. Therefore, this economic mismanagement vowed to unchecked public spending contributed to a rise in the inflation rate, placing an increasing financial burden on ordinary people.
Critical Analysis
Critically, the economic policies of Zia’s both have its positivities and negativities. By examining both, it is clearer that throughout his ruling, he mainly focused on boosting economic growth without keeping into consideration the equal importance of social fairness and environmental stability. Eventually, he made a remarkable effort to modernize the old, vague techniques of farming with modern techniques, which helped the nation to increase its GDP. However, this also led towards the entrenched inequalities; probably in the matters of wealth distribution. Therefore, if Zia had opted for the approach by taking into account all environmental considerations, it would have benefited from the long-term effectiveness And inclusivity of his economic policies.
Conclusion
Towards the crux, Pakistan’s third dictator, General Muhammad Zia ul Haq, came into the presidency and ruled the country for 10 years. His economic policies had both negative and positive effects on Pakistan’s economy. Although he wanted to boost economic growth in industries and draw in foreign investments in the country, he also pushed the country towards rising debt that disturbed the growing social disparities in the region and fractured the economic system, that Pakistan faces until today.
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