'Move beyond Jinnah': A financial guru traces the origins of Pakistan's economic despair

A former equity investment expert has advised Pakistan to move beyond Mohammad Ali Jinnah and Muhammad Iqbal if it wants to catch up with the rest of Asia. Both leaders - Jinnah and Iqbal - had espoused the cause of Pakistan on religious lines. Yousuf Nazar, UK-based former equity investments head and strategist at Citigroup, said this is 2023 and a lot has changed, and nations that don't embrace change fall behind. He also said that Islamabad must think about what went terribly wrong, when, and how.

The advice comes as Pakistan has plunged into a deep economic crisis and is on the brink of default on sovereign debt. Its forex reserves have slipped below $4 dollar, the currency has fallen to a record low of 265 per US dollar, and inflation has soared to a decade high of over 24 per cent for months now. The low forex reserves have forced the government to cut imports of food and fuel, which has created a shortage of several items resulting in a price rise which in turn has triggered chaos and a riots-like situation in some provinces.   

Not just the economy, Pakistan is also facing security threats from within by Tehrik-e-Taliban, who are not very different from the Taliban in Afghanistan. Just this week, they carried out a suicide bombing attack at the Police Lines area of Peshawar, killing 101. However, security experts believe that Islamabad is partly responsible for the threat as they were the ones who celebrated the return of the Taliban in Kabul in 2021. 

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In a detailed thread, Yousuf Nazar talked about the religious militancy whose roots date back to 1947. For most of its history, Nazar said Pakistan had been governed as a centralised authoritarian state although it came into existence as a democratic federal state. The first blunder took place just days after the partition when Jinnah dismissed the duly elected government of Dr Khan Sahab on 22 Aug 1947, he added. 

"We started on the wrong foot. Pakistan has been plagued by confusion about the role of religion. The roots, again, go back to 1947-48. Jinnah’s speech on July 1, 1948 https://sbp.org.pk/about/history/h_moments.htm contracted, in effect, his speech of August 11, 1948."

Nazar said the roots of religious militancy again go back to 1947. The first India-Pakistan War of 1947–1948 was fought over Kashmir. "...on October 22, 1947, a Lashkar of tribals from north-western Pakistan. Five thousand strong led an incursion into the valley from Abbottabad. Even as the Indian army came to the rescue of Kashmir’s maharaja, the joint incursion of the Lashkars and regular troops enabled Pakistan to acquire roughly two-fifths of Kashmir."

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On October 30, 1947, the former finance executive said Mir Laik Ali, a special emissary of Quaid-e-Azam, met with the US state department officials in Washington and requested American financial assistance. "A security state that looked toward the west for survival was born."  

Nazar further said that centralised security state that sought western financial assistance for survival while it professed to be cherishing Islamic ideals and rejected the western economic system, (according to Jinnah’s July 1, 1948 speech) was born in 1947-48 - but those were not the only problems.

Pakistan was a multi-ethnic, multi-lingual, multi-cultural state when it was born but, the former executive lamented, instead of celebrating diversity and respecting different cultures, ethnicities, and languages, it started off by imposing Urdu as the only state language in March 1948. This problem was further aggravated by another factor: 'opportunist kleptocracy'.  

Nazar said Muslim League, a political party founded by Jinnah, came to be dominated by a feudal aristocracy that contributed little to the Pakistan movement. "It was full of opportunists who jumped on the Muslim League bandwagon and had no vision for Pakistan’s future beyond empty rhetoric." He said that leaders do make mistakes and nations go astray and do course correction - but they do so only through introspection and free and open dialogue. 

The finance executive then picked a few blunders like a military takeover that he said defined Pakistan’s future course. "1971 is a tragic chapter by itself and we still are in denial that the majority left. Post 1971, through the 2nd amendment ordinary mortals, arrogated themselves the right to determine the relationship between God and an individual and had sown the seeds of bigotry and intolerance," Nazar stated, adding that Zulfikar Ali Bhutto's operation in Balochistan, the largest mineral-rich province of Pakistan, was his another blunder.

Nazar then said 25 years ago, Pakistan's GDP per capita was 46 per cent higher than India's, but now it was 20 per cent less. There was little recognition in Islamabad that as globalisation swept across the world after the fall of the Berlin Wall, countries like India, China, and Bangladesh seized the opportunities offered by trade liberalisation and progressed, he added. "But Pakistan's ruling elites continued to view the world through a cold war mindset and thought foreign aid would continue to enable Pakistan to extract geo-strategic rents."