Volume 6, No. 12, December 2024
Editor: Rashed Rahman
The military dictatorship of the ‘Karachi’ clique had no wish to change fundamentally the colonial-type economic structure of Pakistan: “The new Plan (i.e., the Second Five Year Plan, 1961-65 – Ed.) did not radically differ from the previous one in its motivation and conception. Its authors did not think that there was anything basically wrong with the first Plan” (Mushtaq Ahmad: Government and Politics in Pakistan, Karachi, 1963, p.219). The economy continued to be based on private enterprise: “It has long been one of the cardinal policies of the Government to allow free enterprise full play in the development of the country…The Government proposes not only to maintain this policy, but to reinforce it and try to give it still greater scope” (Ayub Khan: Speech at the Advisory Committee of the Ministry of Commerce, April 29, 1959). The military dictatorship of the ‘Karachi’ clique did indeed give greater scope to industrial capitalists, particularly those connected with the clique, and by its policy of playing off to some extent one foreign power against another was able, despite its fundamental dependence upon US imperialism, to develop Pakistan’s industries to a higher level: “New incentives and facilities were given to private enterprise in the form of reduction in the rate of super-tax and extension of the tax holidays. Foreign exchange was made available to it for the import of raw materials, spare parts and machinery…The most important concession of all was the withdrawal of controls, first from a few items and later a total decontrol of the economy…The decision to set up two steel mills with a total capacity of 450,000 tons, one in each wing of the country, was evidence of the Government’s determination to develop heavy industry…With the same object in view, an oil refinery was planned to be set up in Karachi and search for underground oil was intensified with the cooperation of Russia…The industrialists…received a much better deal from the Martial Law Regime, which gave them more incentives than they had ever enjoyed before” (Mushtaq Ahmad: ibid.; p.216-217, 246). “The Ayub decade has seen…an increase in industrial production of something like 50 percent” (Neville Maxwell: “Ayub Khan Takes a Hard Line with Political Opponents”, in The Times, London, November 14, 1968).
The semi-colonial status of East Pakistan continued
The Second Five Year Plan made the following allotments:
For investment in the public sector: East Pakistan: Rs 1,251 million (44.8 percent); West Pakistan: Rs 1,539 million ( 55.2 percent).
For exports to foreign countries: East Pakistan: Rs 1,260 million (59.5 percent); West Pakistan: Rs 857 million (40.5 percent).
For imports from foreign countries: East Pakistan: Rs 1,219 million (30.5 percent); West Pakistan: Rs 2,773 million (69.5 percent).
This pattern continued under the Third Five Year Plan (1966-70). In the first 18 months of the Third Five Year Plan, industrial investment worth Rs 2,240 million was sanctioned. Two-thirds of it went to West Pakistan. Of the foreign exchange allotted, 70 percent went to West Pakistan. According to Sheikh Mujibur Rehman, even the official data of the Plans underestimate the semi-colonial exploitation of the East: “If even 25 percent of these paper schemes were to be transformed into reality, East Pakistan would now be safely on its way to an economic El Dorado…The truth is that projects – conceived and sanctioned almost simultaneously in both the wings – do not appear to make any headway in East Pakistan, while they have either been finally implemented or are nearing the stage of completion in West Pakistan. The Government is always ready with one excuse or another in order to hide the basic fact of unwillingness to develop East Pakistan and thereby keep it economically backward – an appendage to a highly industrialised West Pakistan. It is paradoxical indeed that a number of projects in the Eastern wing, which according to the statistical claims of the Government, are receiving a large share of foreign aid, are not being implemented ‘owing to foreign exchange difficulties’, while no such difficulties ever arise in the case of West Pakistan projects” (Mujibur Rehman, cited in: Subhash C Kashyap: ibid.; p.41-42).
Under the military dictatorship, Bengalis remain for the most part excluded from the armed forces and the higher ranks of the civil service: “After twenty-one years, Bengalis account for barely 15 percent in Central Government services and less than 10 percent in the defence services” (Mujibur Rehman: Text of Radio broadcast of October 28, 1970, in Dawn, Karachi, October 29, 1970). “All but 20,000 men out of a Federal Army of 500,000 are recruited in the West” (Financial Times, March 18, 1969). This picture is confirmed in an extensive study of East Pakistan made by Hanna Papanek of the Centre for International Affairs, Harvard University: “The Civil Service of Pakistan includes only a very small proportion of Bengalis, especially in top positions…Since 1958 it has been especially important to note that the armed services of Pakistan also include very few Bengalis” (Hanna Papanek: “Sources of Economic Exploitation of East Bengal”, in Young Indian, April 15, 1971).
In a radio broadcast of October 29, 1970, Sheikh Mujibur Rehman summed up the pattern of 20 years: “To turn now to the appalling record of economic disparity, it is seen that during the last twenty years out of a total revenue expenditure of the Government, only about Rs 1,500 crores (Rs 15,000 million – Ed.) (i.e., only one-fifth of the total) was spent in Bengal…Of the total development expenditure during the same period, Rs 3,000 crores (Rs 30,000 million – Ed.) (i.e., only one-third of the total) was spent in Bengal…Over twenty years West Pakistan has imported goods worth more than Rs 3,000 crores (Rs 30,000 million –Ed.) as against its own foreign exchange earnings of barely Rs 1,300 crores (Rs 13,000 million – Ed). Imports into West Pakistan have been three times the value of imports into Bengal. It was made possible for West Pakistan to import goods worth Rs 2,000 crores (Rs 20,000 million – Ed.) in excess of its export earnings by allocating to it Rs 500 crores (Rs 5,000 million – Ed.) of the foreign exchange earnings of Bengal and allowing it to utilise over 80 percent of all foreign aid…The Fourth Five Year Plan…allocations (1971-75 – Ed.) are a confession of the failure of the Central Government…to redress past injustices” (Mujibur Rehman: Text of Radio Broadcast of October 28, 1970, in Dawn, Karachi, October 29, 1970). “By 1969, according to economists in the provincial planning department in Dacca, East Pakistanis were on average 20 percent worse off than their less numerous compatriots in the West. By 1968 the disparity had widened (according to the same source) to 40 percent” (Financial Times, March 18, 1969).
As a result of the semi-colonial status of East Pakistan, industrial development has been much more rapid in the West than in the East: “Manufacturing industry has been at least twice as important in the economy of West Pakistan as in that of East Pakistan throughout the entire period since 1947. The more complex and advanced industries have been mainly located in West Pakistan, while many of East Pakistan’s industries consist of jute and cotton mills” (Hanna Papanek: ibid., April 5, 1971). Furthermore, the major part of the industries that have developed in East Pakistan are owned or financed by West Pakistani capital: “East Pakistan’s dominant businessmen and industrialists are largely non-Bengali…The eastern wing’s dominant non-Bengali entrepreneurs are seen as part of a domination of the province’s governmental and economic institutions by West Pakistanis. This is particularly serious in the case of the largest industrial and commercial enterprises…The absence of Bengalis from the new class of industrialists in Pakistan is particularly notable at the top. Among the twenty-nine largest ‘Houses’ (or family-controlled enterprise groups) ranked in terms of net worth, there are two Bengalis near the bottom of the list. All of these Houses, with the exception of the few owned by Karachi Parsis, are owned and controlled by West Pakistani Moslems. Most of the twnety-nine are of Punjabi or western Indian origin; many are post-1947 immigrants. All of the Houses have headquarters in West Pakistan, with the exception of the two Bengalis and the Adamjee and Ispahani groups of enterprises…Out of all industrial assets…Bengali Moslems owned and controlled only 2.5 percent…Most of the heads of enterprises are residents of West Pakistan. The ‘commanding heights of the economy’…are controlled, in both East and West Pakistan by a very small group of families, almost none of whom is native to East Pakistan…The early decision to locate the national capital in Karachi…has been extremely important in affecting the location of industrial plants and business headquarters, since proximity to government agencies in charge of licences and foreign exchange was of the greatest importance to industrialists…The lack of Bengali businessmen and industrialists assumes its particular importance only in the context of the severe disparity between East and West Pakistan in terms of political power and economic resource distribution. Bengalis are lacking in the country’s economically powerful class as well as in its governing structure” (Hanna Papanek: ibid., April 5,1971).
The ‘Karachi’ clique used its control of the military dictatorship in order to advance particularly the wealth and economic power of members of the clique – not least that of Ayub Khan’s own family. As a result, there has developed the notorious, although stunted, state-monopoly capitalist group of finance capitalists of some 22 families, which (according to Dr Mahbubul Huq, chief economist of the Planning Commission, and M Raschid, Governor of the State Bank) in 1968 owned 66 percent of industry, 79 percent of insurance and 80 percent of banking. “In Karachi, Pakistan’s commercial centre, it had been known in certain circles that Ayub’s family and his cabinet had been getting rich with the aid of government loans and licences. Now his government is unabashedly accused of corruption. The son of Altaf Hussain, Pakistan’s Industries Minister, has been given a major share in a steel-rolling mill. Ghulam Faruque, Ayub’s canny Commerce Minister, had acquired large stockholdings in companies that he helped promote as Chairman of the Pakistan Industrial Development Corporation, and so on. Ayub himself is a large landowner, with citrus orchards near Rawalpindi and sugar lands in Sind. Near the site of the latter the Army Welfare Association has erected a sugar mill and has been buying the President’s output. Gohar Ayub, the President’s stocky, mustachioed son, has become a millionaire. With the help of government financing, Gohar led a syndicate which bought out General Motors shares of an assembly plant in Karachi. He has since extended his holdings and was recently granted exclusive rights for the distribution of Toyota cars in Pakistan” (Article in Life, cited in the Times of India, January 29, 1967, P.7). By 1965 the total capital of the Ayub family had been unofficially estimated at Rs 250 million, not including money in foreign bank accounts.
Repressive measures
In November 1958, Public Safety Ordinances were promulgated in both provinces, empowering the authorities to detain persons without trial and to censor or ban newspapers and periodicals. In April 1959 an ordinance was promulgated empowering the government to change the ownership or management of any newspaper which “in the opinion of the government…contained matter detrimental to the defence, external affairs or security of Pakistan”. Two days later the government took over Progressive Papers Ltd., proprietors of the Pakistan Times. In January 1962 the company was resold to an ‘approved’ businessman, Chaudhri Mohammad Hussain, Chairman of the Lahore Municipality.
In August 1959 followed the Elective Bodies (Disqualification) Ordinance (EBDO), under which tribunals could try persons who had taken part in political activity for “misconduct”, “subversive activities”, “actions contributing to political instability”, etc., with power to bar such persons from political activity for seven years. By July 1961, 75 politicians had been officially disqualified from political activity under EBDO.
In April 1960 the Press and Publications Ordinance rendered newspapers and periodicals liable to pay a substantial deposit to the state, subject to forfeiture (as well as banning of the periodical concerned) in the event of any matter being published tending “to bring the Government into hatred or contempt” or “to incite disaffection against the Government”.
In January 1962, in an effort to reduce opposition to the new dictatorial Constitution being prepared, Suhrawardy, leader of the Awami League, was arrested and detained without trial. When attempts were made to secure his release through a writ of habeas corpus, the military government promulgated in February an ordinance barring the courts from hearing applications for habeas corpus in relation to persons detained without trial.
In September 1963 the issue of the second Press and Publications Ordinance laying down that newspapers and periodicals must be edited in accordance with “recognised principles of journalism and patriotism”, was followed by a one-day strike of journalists and newspaper employees.
(To be continued)