democracy vs dictatorship: economic overview pakistan

Group Members:1. Haider Ali Shah2. Hasnain Amir Ali3. Rahim Amir Ali4. Tabraiz Khawar 5. Shehroz Sikandar

Pakistan Air Force Institue Of Economics & Textile

Economic Evaluation of Democracies & Dictatorships

Course: Management Operations Of Pakistan Economy

AcknowledgementMe and my group members have put our best efforts for the successful completion of this project assigned to us as the class project of the course Management Operations Of Pakistan Economy by our respected instructor Sir Riaz Ahmad. In Pakistan the wise ones have spent years debating on what is best for our country democracy or dictatorship but there hasn’t been a single research that evaluated the economic aspects of each of these forms. This report focuses on evaluating the economic performance of democratic governments and dictatorships in pakistan.

I am highly indebted to my University PAF-KIET and my instructor for giving me this opportunity to work on this very critical issue as this is one of the problems that should be examined very carefully and I believe that this report would provide substantial amount of information to those who wish to work on the same topic.

Introduction It has been 64 years since the creation of Pakistan and in this huge time span Pakistan has seen three military dictatorships and four democratic governments but still the debate of which is best for Pakistan Democracy or Dictatorship is still on fire and we haven’t reached any conclusion of issues. Social implications of both the forms of governments have been experienced by the majority of people living in Pakistan but we completely lack a study which determines the economic implications of these forms of governments and comparatively analyze the economic performance of the various democratic governments and military dictatorships. This report has been made in order to fulfill the above mentioned purpose i.e. to examine what were the economic merits and demerits of these governments.

In this report we will be evaluating the economic performance of governments of Pakistan from the year 1977 to 2007 using six important economic indicators which are GDP, Inflation, GDP growth rate ,literacy, Poverty and employment. In the above mentioned period starting from 1977 to 2007 we have seen two democratic governments and two military dictatorship eras therefore by the detail examination of these 30 years we will be able to develop a pretty clear idea that what actually is better for Pakistan democracy or dictatorship from an economist’s perspective. Since the basic purpose of this report is determine which proved the best therefore the natural disasters that took place in each of the governments and their intensity will also be taken into consideration Below is the brief introduction to these two democratic governments and two dictatorships which were in charge during the year 1977-2007:

1. 1977-1988 Zia- Ul-Haq’s Era : This period starting from 1977-1988 is regarded as the second dictatorship era in the history of Pakistan as the first one was Ayub Khan’s era, it is also called the era of Islamization. General Zia-Ul-Haq took over as the president of Pakistan in 1977 after getting Shaheed Zulfiqar Ali Bhutto hanged till death. His period of power is also regarded as the era of Islamization because immediately after getting hold of presIdentship of Pakistan he introduced strict Islamic Laws such as creation of Majlis-e-Shaura and exclusion of Ahmadi’s from the muslim faith. People regard Zia as one of the good leaders and president of Pakistan. Unfortunately in Zia’s rule Pakistan was hit by three earth quakes in 1977,1978 and 1988 and the number of people effected were 1,022,000, 2,246,000 and 1,000,000 respectively which shows that natural disasters played a critical role in damaging the overall economic performance of

Zia rule. The second military dictatorship in Pakistan ended in 1988 when General Zia-Ul-Haq died in a plane crash.

2. 1988-1999 Third Democratic Era: This decade is regarded as the third democratic era in this period of approximately eleven years Pakistan’s political history experienced two democratic government twice i.e Late Mohtarma Benazir Bhutto and Nawaz Sharif ruled Pakistan alternatively each being elected twice with heavy mandate of the people.

First Democratic Rule 1988-1990 : After the death of Zia-UlHaq the first open elections were held in November 1988 and the Pakistan Peoples Party won the elections with heavy mandate. The political understanding between the president of Pakistan at that time which was Ghulam Ishaq Khan and Benzir Bhutto never looked stable and Khan in 1990 using the eighteenth amendment dismissed her from the post of Prime Minister Of Pakistan. In these three years of PPP no major natural disaster was observed.

Second Democratic Rule 1990-1993 : After the Mohtarma Benazir Bhutto was deposed by Khan another parliamentary elections were held by the election commission of Pakistan and in the result of those elections for the first time in history of Pakistan PML(N) got the chance to rule the country but in 1993 Nawaz government encountered a similar fate and was deposed by Khan. During Nawaz Rule Pakistan two floods and a wind storm and approximately 20 million people were affected.

Third Democratic Rule 1993-1996 : After Nawaz Sharif was Deposed elections were held again and Pakistan Peoples Party stood victorious and Mohtarma Benazir Bhutto became the Prime Minister. It is said that during this rule of Mohtarma the corruption was at its height and in 1996 President Farooq Laghari deposed this government.

Fourth Democratic Rule 1997-1999 : In 1997 Parliamentary elections were held and as result of which Pakistan Muslim League(Nawaz) won the elections with heavy mandate with Nawaz Shareef became the Prime minister of Pakistan for the second time in the history of Pakistan. Nuclear tests were one of the important achievements of his rule. In 1999 President Musharaf took over the government and Nawaz Shareef along with his family was sent to Saudi Arabia. In 1998 his government experienced a great flood.

3. Third Military Era 2001 -2008: After evacuation of Nawaz Sharif , General , Musharaf took the control of the government and legitimized his rule due to elections held in 2002 brought PML(Q) into the government who proved to be loyal supporters of President Musharaf and he ruled Pakistan for more than 8 years. During his rule there were two major natural disasters and in those natural disasters approx 4 million people were affected.

Economic Perspective

1. 1977-1988 Zia- Ul-Haq’s Era : This period starting from 1977-1988 is regarded as the second dictatorship era in the history of Pakistan as the first one was Ayub Khan’s era, it is also called the era of Islamization

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

19880.00

5,000,000,000.00

10,000,000,000.00

15,000,000,000.00

20,000,000,000.00

25,000,000,000.00

30,000,000,000.00

35,000,000,000.00

40,000,000,000.00

45,000,000,000.00

GDP

GDP (current US$)

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

19880.00

5,000,000,000.00

10,000,000,000.00

15,000,000,000.00

20,000,000,000.00

25,000,000,000.00

30,000,000,000.00

35,000,000,000.00

Electricity production (kWh)


1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 19880

2

4

6

8

10

12

GDP growth

GDP growth

1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 19880

2

4

6

8

10

12

14

Inflation

Inflation

1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 19880

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Unemployment

Unemployment

Observations Under the rule of Zia-Ul-Haq for the period of ten year the GDP of Pakistan was on the

increasing trend during the ten years of Zia-Ul-Haq’s rule the GDP of Pakistan increased by 154% while the average GDP growth rate was 6.5%.

Electricity Production during Zia-Ul-Haq’s Era increased by 200% in the ten years which shows that Electricity production was given much preference by him.

The data of inflation shows that that the in this ten year rule the average inflation rate/year was 7% while in these ten years a negative growth of 13% can be seen in the observed.

The unemployment rate also decreased by 27% in the ten year of Zia-Ul-Haq.

2. 1988-1999 Third Democratic Era: This decade is regarded as the third democratic era in this period of approximately eleven years Pakistan’s political history experienced two democratic government twice i.e Late Mohtarma Benazir Bhutto and Nawaz Sharif ruled Pakistan alternatively each being elected twice with heavy mandate of the people.

First Democratic Rule 1988-1990 (PPP):

1989 199039900000000

39950000000

40000000000

40050000000

40100000000

40150000000

40200000000

GDP (current US$)

GDP (current US$)

1989 199033000000000

33500000000

34000000000

34500000000

35000000000

35500000000

36000000000

36500000000

37000000000

37500000000

38000000000



1989 19904.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

5

GDP growth

GDP growth

1989 19907.2

7.4

7.6

7.8

8

8.2

8.4

8.6

8.8

9

9.2

Inflation

Inflation

1989 19900

0.5

1

1.5

2

2.5

3

3.5

Unemployment

Unemployment

Observations: During this two years rule of Mohtarma Benazir Bhutto it is observed that the

GDP of Pakistan declined by 2% GDP growth rate also declined by 10%. There was an increase in the production of electricity but only by 8% There was an increase in the inflation and inflation during those two years

increased by 15%. In the short ruling period of Mohtarma Benazir Bhutto the unemployment in

Pakistan decreased by 18%.

Second Democratic Rule 1990-1993(PML):

1991 1992 199342000000000

43000000000

44000000000

45000000000

46000000000

47000000000

48000000000

49000000000

50000000000

51000000000

52000000000

GDP (current US$)

GDP (current US$)

1991 1992 19930

10000000000

20000000000

30000000000

40000000000

50000000000

60000000000



1991 1992 19930

1

2

3

4

5

6

7

8

9

GDP growth

GDP growth

1991 1992 19930

2

4

6

8

10

12

14

Inflation

Inflation

1991 1992 19930

1

2

3

4

5

6

7

Unemployment

Unemployment

Observations :

The three years ruled by PML(N) and Mian Nawaz Sharif show that in these three years the GDP of Pakistan increased by 18.3% while the average growth rate per year was 4.3% per year.

Electricity production in this government increased by 23% which was a significant increase in the amount of electricity produced.

Another positive about this government was that the inflation decreased by 15.2% while the average rate of inflation per year was 10%.

The average unemployment during PML(N) government rate was 5.1% which is much greated compared to the PPP government.

3. Third Military Era 2001 -2008: After evacuation of Nawaz Sharif , General , Musharaf took the control of the government and legitimized his rule due to elections held in 2002 brought PML(Q) into the government who proved to be loyal supporters of President Musharaf and he ruled Pakistan for more than 8 years.

2000 2001 2002 2003 2004 2005 2006 2007 20080

20000000000

40000000000

60000000000

80000000000

100000000000

120000000000

140000000000

160000000000

180000000000

GDP (current US$)

GDP (current US$)

2000 2001 2002 2003 2004 2005 2006 2007 20080

20000000000

40000000000

60000000000

80000000000

100000000000

120000000000



2000 2001 2002 2003 2004 2005 2006 2007 20080

1

2

3

4

5

6

7

8

9

GDP growth

GDP growth

2000 2001 2002 2003 2004 2005 2006 2007 20080

5

10

15

20

25

Inflation

Inflation

2000 2002 2004 2006 2007 20080

1

2

3

4

5

6

7

8

9

Unemployment

Unemployment

Observations:

Gen Pervez Musharaf ruled the country for a period of 8 years and during these eight years there was a massive increase in the GDP of Pakistan by 120%.

The increase in the electricity production during Musharaf rule wasn’t that effective because in the period of eight years it only increased by 30%.

The inflation in musharaf rule was very well controlled except for 2008 when the rate of inflation was increased to 20% while the average inflation rate per year during his rule was 7%.

Though the unemployment increased for few years but then it was well controlled and in in rule the unemployment decreased by the 1% as compared to the previous government.

Comparative AnalysisIn this section of the report all the governments that were in power during their rule in the analyzed thirty years i.e. from 1977 to 2007 we will compare the average of the five economic indicators of each oh the governments to the other governments:

1. GDP( US Dollars):

Zia UI Haq PPP PML(N) Musharaf0

20000000000

40000000000

60000000000

80000000000

100000000000

120000000000

GDP (current US$)

GDP (current US$)

The graph for the shows that the of Pakistan was highest during the Musharaf rule as compared to the other governments which were in power in these thirty years as well the growth rate was also better as compared to PPP, PML(N) and Zia-Ul-Haq’s government.

2. Electricity Production:


10000000000

20000000000

30000000000

40000000000

50000000000

60000000000

70000000000

80000000000

90000000000

Average Electricity production (kWh)


Although the graph shows that electricity production during Zia’s Rule was low it does has a low average electricity production Value per year but during Zia’s rule the electricity production increased by 200% and considering the low population at that time the electricity produced was enough to cater the requirements of the people. While the average electricity production during the rule of PPP,PML(N) was much greater than Zia’s graph but their growth rate are very low as compared to General Zia-Ul-Haq’s rule.

3. GDP Growth Rate:


1

2

3

4

5

6

7

8

9

10

GDP growth

GDP growth

This graph shows the average growth rate per year of all the four governments and it shows that PPP and PML(N) had the highest GDP growth rate of about 8% and 10% respectively but it cannot be ignored that PPP and PML(N) only ruled for 2 and 4 years respectively there Zia-ul-Haq’s GDP growth rate cannot be ignored as considering the number of years in his rule it can be said that the GDP growth rate he maintained was not very bad.

4. Inflation Rate:


2

4

6

8

10

12

Inflation

Inflation

The graph for the inflation rate shows that both the democratic governments i.e. PPP and PML(N) had higher average inflation rate per year as compared to the inflation rate of the military dictatorships i.e. Musharaf and Zia-Ul-Haq’s and the highest average was during the PPP rule.

5. Unemployment Rate:


1

2

3

4

5

6

7

Unemployment

Unemployment

The Graph of unemployment shows that the rule of mushraf had the highest unemployment rate as compared to the governments of Zia-Ul-Haq, PPP and PML(N).

ConclusionAfter extensive research on the topic and and careful evaluation of each form of government and each and every political party government the following things were concluded:

In terms of GDP the highest growth was observed during the rule of Musharaf and Zia-Ul-Haq which shows that if we consider GDP as the factor for evaluation of governments then dictatorship proves a better option.

The second economic indicator used in this report is Electricity production which also indicates the highest growth rates in the terms of electricity production was under the government of Musharaf and Zia-Ul-Haq therefore this factor also supports dictatorship.

Our third economic indicator in in this report is inflation and it also indicates that the inflation rates were low and controlled under the governments of Musharaf and Zia as compared to government of PPP and PML(N) therefore this factor also supports dictatorship as a better form of government.

Unemployment is the fifth economic factor which we have used to evaluate governments in the past thirty years and this also shows that the unemployment was least during the rule of Zia-Ul-Haq while Musharaf had the highest unemployment rates.

After considering the above mentioned points we have reached to the conclusion in the previous thirty years the best government according the selected economic indicators was the government of Zia-Ul-Haq while Musharaf also did well as compared to PPP and PML(N) and it can be said that dictatorship has proven as a better form of government for Pakistan.

democracy vs dictatorship: economic overview pakistan

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