The Long Road ahead
By Ahmad Faruqui. PhD
Dansville, CA

Historians disagree about which road got Pakistan to this juncture.  Futurists disagree about the road that lies ahead.  “The future, though imminent, is obscure,” to quote Winston Churchill.
More often than not, forecasts are wrong.  And when they are right, it is often because of the wrong reasons.  Even in the “hardest” of the social sciences, economics, forecasting remains a hazardous exercise.  Not only does one have to deal with the known unknowns, one also has to factor in the unknown unknowns.    
Before we look at the long road ahead, let us take a step back in time.  In June 2001, the Strategic Studies Institute of the US Army War College held a workshop in Washington on Pakistan’s long-term future.  One of the scenarios on table had been put forward the prior year by the US National Intelligence Council (NIC), an arm of the US Central Intelligence Agency.  It painted a grim picture of Pakistan in the year 2015:  
Pakistan will not recover easily from decades of political and economic mismanagement, divisive policies, lawlessness, corruption and ethnic friction.  Nascent democratic reforms will produce little change in the face of opposition from an entrenched political elite and radical Islamic parties.  Further domestic decline would benefit Islamic political activists, who may significantly increase their role in national politics and alter the makeup and cohesion of the military — once Pakistan’s most capable institution.  In a climate of continuing domestic turmoil, the central government’s control probably will be reduced to the Punjabi heartland and the economic hub of Karachi.
Such a grim vision could have been lifted out of William Golden’s “Lord of The Flies.” Superficially, it was contradicted by several decades of historical experience under Ayub and Zia.  But as the following years would reveal, a high rate of economic growth that is not accompanied by an egalitarian distribution of benefits cannot mask the detritus of structural problems. 
While Marxism is out of vogue, one of Marx’s precepts is not: If economic benefits do not flow to society at large, class conflict will follow.  In Pakistan’s case, the problem is compounded by the dominance of the army in national affairs.  And the dominance a single province in the army provides the spark which inflames inter-provincial tensions.  Furthermore, high economic growth brought about by large infusions of American aid is ephemeral.  And in the post-9/11 environment, we have to deal with the wild card of terror, an indigenous creation which threatens to become our most well-recognized export.
Ongoing conflicts in Waziristan and now Swat belie Musharraf’s assertion that Al Qaeda is on the run.  The operation against the Lal Masjid last July in the heart of Islamabad shows the extent to which the battle against the Taliban has been lost.  Thus, the NIC scenario remains a distinct possibility.    
The future is a tale with multiple endings or, in analyst lingo, a collection of scenarios, where each scenario is a statement of what outcomes will result when certain conditions materialize.  While some of these conditions are not within the control of policy makers, some definitely are.  Thus, the future is not predetermined.  Wise choices can be used to overcome the negative effects of chance. 
Depending on how its leaders play their cards, Pakistan can have futures that are much better or much worse than the NIC scenario.   Here are five pathways to the future. 
1. Bright.  GNP growth at 8-9 percent a year, allowing poverty levels to fall below 15 percent of the population.  Benefits of development are shared throughout society. This scenario could occur if the following conditions happen: investment rates of 40 percent of GNP; fiscal surplus of 2 percent of GNP; low levels of foreign debt; a liberalized economic system; inspired political leadership and governance; the virtual elimination of terrorism; foreign policy focused on cooperation and peace; and defense spending at 2 percent of GDP.
2.  Promising.  GNP growth at 6-7 percent a year and poverty levels under 25 percent.  This scenario is likely if the following conditions prevail: an investment rate of 25 percent; diminished income inequalities and regional disparities; foreign policy focused on cooperation and peace; occasional interludes of conflict with neighboring powers; defense spending at 4 percent of GNP; civilian government control; and containment of terror. 
3. Ho-Hum.  GNP growth at 4-5 percent a year and poverty levels of around 35 percent.  This scenario is likely if investments are around 20 percent of GNP; macroeconomic imbalances have been stabilized; national security is equated with military muscle; the Kashmir conflict is on the front burner; the army cannot wean itself of funding militant groups; sporadic military rule; and defense spending at 6 percent of GNP.
4. Dark.  Anemic growth in GNP of 3-4 percent a year barely sufficient to allow for growth in per capita income.  Poverty levels exceed 50 percent.  This scenario is likely if investment rates fall below 15 percent; macroeconomic imbalances are large; recidivist militarism and rising fundamentalism permeate the army; adventurism in foreign policy; defense spending at 8 percent of GDP; heightened inequalities in income distribution; civil discord; inter-provincial rivalries; intolerant religiosity; breakdown of law and order; institutional meltdown; soaring foreign debt, leading to bankruptcy; government unable to pay salaries to government workers; fractured national identity.
5. Doomsday.  No growth in GNP and falling per capita income.  Poverty levels above 75 percent and dysfunctional public services. The army disintegrates into rival militias, each headed by a corps-commander turned warlord.  No semblance of law and order.  Special interest groups stymie political decision-making.  Leaders of tribes, clans, and sects demand absolute loyalty.  Rising inequalities of income propel terrorism.  Militants acquire a nuclear weapon.  This scenario becomes likely if investment rates fall under 10 percent; macroeconomic imbalances exceed 10 percent of GNP; and population grows faster than 3 percent a year.    
To get on the Bright or Promising pathways, Pakistan’s leaders have to reform not just the economy but also its polity and society.  That is a tall order but without making fundamental changes in how the nation is governed, Pakistan will continue its descent into the hell depicted by NIC. 
To avoid that outcome, Pakistan’s national security policies have to be re-oriented away from confrontation with India.  The existential threat to its polity arises not from the failure to acquire Kashmir but from the failure to deal with domestic problems that can be traced to the military’s desire to fight a proxy war against India. 
The militants have to be defanged spiritually and physically.  The first task has to be performed by the political and religious leadership and the second by the military, but a military that takes its cue from elected officials who have credibility with the people.  This will require a complete reorientation of the military’s mission and the development of new course material at the military academies.  It will also acquire the demilitarization of Pakistani society, i.e., the withdrawal of serving and retired military officials from the civilian sector.    
 (Ahmad Faruqui specializes in defense and energy economics and has authored, “Rethinking the national security of Pakistan.”


Editor: Akhtar M. Faruqui
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