Pathway Indicators Analysis of Pakistan

South Asia II: NSI Pathway Indicators–Pakistan’s Future: Analysis of the Fragmentation and Muddling Through Hypotheses.

Author | Editor: Astorino-Courtois, A., Bragg, B., Brickman, D., Canna, S., Desjardins, A., Popp, G., Popp, R. & Williams, R. (NSI, Inc).

This report explores the potential pathways associated with two hypothetical futures for the nation of Pakistan–Fragmentation and Muddling through. We started with theoretical propositions about the nature of, and points along, the pathways, tested these against historical cases, refined our characterizations of the paths, and then applied these to look at Pakistan from today forward.

NSI’s contribution to the futures portion of the South Asia SMA Follow-on effort explores the potential pathways associated with two hypothetical Pakistani futures–national Fragmentation and Muddling. We started with theoretical propositions about the nature of, and points along, the pathways, tested these against historical cases, refined our characterizations of the paths, and then applied these to look at Pakistan from today forward. At any point we might observe, in a state such as Pakistan, evidence consistent with any number of future pathways. For this reason, our approach was not to determine solely which path Pakistan is on, but where the balance of the evidence lies–which path may be dominant—and then search for indications and warnings (I&W) of what we should expect to see as further evidence of that path. The general paths provide a framework that easily could be applied to assess conditions in any state: for example, where Turkey is relative to a fragmentation outcome or whether Afghanistan is moving forward or slipping backward in political, economic, and social development.

NSI first defined and delineated the Fragmentation and Muddling pathways, and then identified a set of primary economic, social, and political markers drawing on empirical analysis and theoretical work. We then undertook a series of structured case studies to identify and distinguish between necessary and sufficient conditions for each pathway and to identify the most likely temporal orderings along each path. This research provided us with a descriptive analysis of each of the pathways: their necessary antecedent conditions, catalyzing events that propelled movement down a pathway, markers associated with that pathway, and any buffers or barriers that acted as roadblocks to further progression toward a fragmentation or muddling outcome.

This report first presents the findings of our analysis of Pakistan’s current position on the fragmentation and muddling pathways. This includes indicators and warnings (I&W) of further movement along each pathway, both those that signal increasing instability and those that suggest a strengthening of state social and political institutions and conditions. The second section of the report provides greater detail regarding the definition of each of the pathways and their associated markers. The third section presents an overview of the findings from our structured case study analyses that informed the development of the final marker lists for each pathway. Detailed case study summaries and analysis are provided in the appendix to this report.

Summary of Results

Since Pakistan’s loss of East Pakistan (current day Bangladesh) in 1971, a number of Pakistan scholars and observers have warned of further fragmentation of the state. Causes cited range from internal social cleavages to a nefarious U.S. government plot to weaken Pakistan (Choussedovsky, 2012). A second school of thought, however, proposes that Pakistan’s future will be characterized by “Muddling through”—that is, achieving neither positive political, economic, and social growth nor complete failure in these areas. This report identifies indications and warning measures associated with these two potential future pathways for the state of Pakistan.

At any point we might observe, in a state such as Pakistan, evidence consistent with multiple future pathways. For this reason, our approach was not to determine which single path Pakistan might be on but to

1. use the data to suggest which might be the dominant path;
2. use the general path models to highlight key political, economic, and social “pathway markers” as indicators of movement along one path; and
3. provide suggestions of what conditions and events analysts should watch for in terms of further evidence of that path.

Below are summaries of the key findings of this study. The full pathway models and analyses of these in the case of Pakistan appear in the main body of this report.

Finding 1: Fragmentation

While most of the precipitating conditions are present, fragmentation of the Pakistani state is not imminent.

Nearly all of the antecedent conditions, necessary conditions, and important pathway markers for fragmentation are present in Pakistan today: state sovereignty contested violently by insurgent groups (e.g., in Balochistan, the FATA, and Kashmir); enduring disputes between geographically-associated social, ethnic, and economic groups; publically expressed conflict among elites in a country where political rivalries are numerous and intensely regional; and some public discontent over how the state is run. What explains Pakistan’s failure to fragment?

First, the absence of either a suitably catalyzing event or a willing external sponsor blocks the emergence of a single group with sufficient capacity to defeat the Pakistani state and break away successfully. Second, internal buffers— including institutional weaknesses at the provincial level that hinders attempts to devolve power and emerging signs of the Sharif government’s willingness to negotiate grievances with groups in FATA and Balochistan—serve as important buffers to fragmentation; however, most importantly, the external existential threat posed by India persists as a uniquely powerful and credible impetus for Pakistan’s disparate parts to remain united behind a common identity and narrative of victimization.

I&W for movement toward fragmentation

• A catalyzing event such as the 1970 cyclone in Bangladesh or publication of the Awami League’s Six-Point Program
• The appearance of a sponsor willing to provide the financial and/or security support to enable a group to break away from the central government (Pakistan’s status as a nuclear state may have raised the cost of this activity for neighboring states)
• The removal of buffers manifest for example in increased repression by the government; unwillingness to negotiate with disaffected groups; and normalized relations with India that weaken common narratives of Pakistani national identity and strengthen or incentivize regional identities

Finding 2: Muddling

Overall, the dominant trajectory of social and political development is slow decline (“Muddling Down”); although, there are signs that improvement is possible. Economically, the overall trajectory is flat (“Muddling through”) in large part due to the downward pull of political and social markers.

Political Markers: As of the date of this report (October 2013), data on political markers suggest that political development in Pakistan is on a downward path as nearly all of the key “Muddling Down” path markers—contested national sovereignty; weak and ineffective governing institutions; a weak and often biased justice system; uneven and insufficient internal revenue generation; contested civilian, military and judicial roles; limited provision of government services; and politics heavily influenced by corruption and patronage—are both present and substantial. Moreover, many of these path markers are quite well established at levels that presage continued deterioration. For example, Pakistan’s decades-long experience with weak governing institutions, biased justice, and uneven provision of services persistently weakens popular support for, and grants of, legitimacy to the government, which further weakens institutions and provision of services. In another example, fewer than one million Pakistanis (0.7% of the population) filed income taxes in 2001. At that time, the Taskforce on Tax Reform noted that “if taxes relative to GDP do not increase significantly, without new levies, Pakistan cannot be governed effectively, essential public services cannot be delivered, and high inflation cannot be avoided” (Taskforce on Reform of Tax Administration, 2001). However, tax revenues cannot be increased unless the tax base is increased or tax evasion is eliminated. More than ten years later, the government has failed to introduce general sales tax reform, raise energy prices, or reduce subsidies in the power sector, all of which would significantly increase government revenues (The World Bank, 2011).

I&W for further decline toward political instability

• Evidence that governing institutions are remaining weak and ineffective—such as increasing public criticism of and protest against the government and the call for better and/or more equitably distributed services such as energy and education—suggest that satisfaction with and loyalty to the government is receding leaves open space for radicalized political actors that would not necessarily seek liberalized and stable governance
• Strengthening of sub-national identities and/or alliances among insurgent, opposition, or grievance groups

I&W for reversal of the political “Muddling Down” trajectory

• Government efforts to apply rule of law fairly across all groups and significant reductions in human rights abuses by the state
• Consistent and adequate internal revenue generation and continued improvement in representation of minority views
• Resolution of internal sovereignty challenges

Economic Markers: Despite continued poor conditions and difficulties with economic planning and management, economically, Pakistan appears to be on the cusp between slow decline (“Muddling Down”) and a flat trajectory (“Muddling through”). Many of the markers common to economic “Muddling Down” pathways are present and significant in Pakistan. However, there are also important markers of slow but positive economic development (“Muddling Up”) to suggest an overall “Muddling through” trajectory. Even as several markers show continued deterioration over time or remain stagnant at detrimental levels, others show positive signs of improvement and buffers to complete economic failure appear to play a key role.

GDP growth appears to be on the decline, if somewhat unevenly. Real GDP growth has averaged only 3% over the last four years and has been on a volatile negative course since the early 1980s. Some growth spurts, like the one from 2004-2007, saw growth averages over 7%, but overall Pakistan’s economic growth has been insufficient, relative to its population growth (The IMF estimates that 7% GDP over an extended period is needed to absorb Pakistan’s nearly 2 million new labor market entrants each year IMF 2012). The result is high underemployment, unpaid employment, informal employment, and employment abroad: none of which maximize the productivity of Pakistan’s human capital.

Poor economic management, limited foreign investment, and a reliance on foreign aid/loans are also significant markers for Muddling Down in Pakistan.2 At the same time, Pakistan’s reliance on international aid has remained high and Pakistan ranks in the bottom third of 185 countries surveyed on ease of doing business there primarily due to its poor record on enforcing business regulations (World Bank, 2011). For example, Pakistan introduced a patent law in 2000, but does not have an effective system in place to prevent the issuance of marketing approvals for copies of patented pharmaceutical products. Pakistan authorities continue efforts to uphold intellectual property rights, but the country remains on the priority watch list of the U.S. Trade Representative (U.S. Office of the Trade Representative, 2013).

Despite the frequency of markers of a “Muddling Down” pathway, current economic conditions in Pakistan also include important markers of positive growth. For example, while insufficient energy resources hamper the economy, Pakistan boasts transportation infrastructure and irrigation systems adequate to support fundamental commerce in agriculture and manufacturing. The challenge is to maintain the infrastructure that exists and to expand these networks going forward. Pakistan also has relatively low unemployment rates, even if official numbers are artificially suppressed by sizable employment in the informal economy. Although Pakistan’s economy is not widely diverse, commodity prices for primary exports, like cotton, have grown. Continued improvements for these markers could help to reduce Pakistan’s reliance on foreign aid to balance its accounts. Finally, it is also encouraging to note that, even though inefficiencies of enforcement and management appear to be restricting the formal economy, Pakistan has sought to meet World Trade Organization expectations by creating appropriate regulations and policies that foster growth, making the prospects for future growth and

Muddling Up more favorable. To date, economic failure in Pakistan appears to have been buffered significantly by a thriving informal economy that provides access to jobs and alternative regulations or services that ensure supplemental productivity alongside the formal economy.

I&W for movement toward economic collapse

• Evidence showing that financial institutions continue to weaken
• Precipitous reduction or loss of alternative funding sources
• Continued government budget deficits
• Deterioration of transport, water, electricity infrastructure, and security, leading to capital flight and loss of foreign investment

I&W for movement toward economic development

• Diversification and growth in industrial production
• Reduced losses and business expenditures related to corruption
• Continued improvements in representation and governing legitimacy

Social Markers: The majority of the path markers for social disintegration are both present and significant in the case of Pakistan. Additionally, many of the markers show continued deterioration over time or remain stagnant at detrimental levels. However, unlike political and economic Muddling, Pakistan faces significant barriers to positive development (“Muddling Up”) in the social sphere. As of October 2013, only two of the path markers, but nearly all of the barriers commonly associated with positive societal development, are present in Pakistan.

Pakistan’s trajectory of socially “Muddling Down” is driven largely by its entrenched social divisions and high degree of cleavage between both religious and ethnic groups. For the most part, its provinces are distinct ethnic enclaves; its cities mirror the same divisions by neighborhood. Both Urdu and English are recognized as official languages, but Punjabi, Pashto, Sindhi, and Balochi are all dominant languages in their respective provinces. In addition to the distinct ethnic makeup of the provinces, Pakistan has three semi-autonomous regions: the Federally Administered Tribal Areas (FATA) and the disputed territories of Gilgit-Baltistan and Azad Jammu and Kashmir. The FATA has no representation in the National Assembly and Kashmir resembles an area under martial law, with strict Pakistani government oversight and heavy military presence.

In light of these circumstances, violent political action and terrorism are common, particularly in the FATA and Balochistan, where the Pakistani Taliban and related groups espousing Islamic extremism and Baloch nationalist insurgents respectively have openly engaged in conflict with the Pakistani Army for more than five years. In both cases, the government is perceived as illegitimate for its inability to provide equal access to goods and services or proportional representation in decision-making. For example, Balochis have a long-standing grievance that their province provides 36% of Pakistan’s natural gas supply, yet piped gas is only available to four of Balochistan’s 28 districts (International Crisis Group, 2006). As the violence that characterizes these frontier areas is also present as a microcosm in urban areas, with Karachi being the prime example, organized criminal outfits such as D-Company and the Lyari gangs have taken advantage and also contribute to high crime rates in the cities.

With Punjabis, Sindhis, and Muhajirs holding the majority of political power nationally and operating exclusive patronage networks, Pashtuns and Balochis, among others, have played the part of the marginalized in Pakistani society either through institutionalized discrimination (biased justice and under-representation) or through relative deprivation (fewer resources allocated for development). According to the United Nations Development Program’s Human Development Index (HDI), between 1980 and 2012 Pakistan’s HDI rose by 1.3% annually from 0.337 to 0.515 today, which gives the country a rank of 146 out of 187 countries with comparable data. The HDI of South Asia as a region increased from 0.357 in 1980 to 0.558 today, placing Pakistan below the regional average (UNDP, n.d.). Balochistan and the predominantly Pashtun province of Khyber Pakhtunkhwa (KPK) have the highest poverty rates based on the government’s most recent Socio-Economic Living Standard Measurement Survey (Pakistan Institute of Development Economics, 2011).

In addition to these social cleavages and socio-economic inequalities, markers for out-group focused religious extremism and violence are also present in Pakistan. Various degrees of Islamic extremism in particular can be found across the FATA, Balochistan, Kashmir, and other areas of the country, influenced by wealthy Arab donors to seminaries and mosques or local sectarian leaders. Though a majority of Pakistanis adheres to the teachings of Sunni Islam, some Shi’a Islam and Christian communities also exist. Violent clashes between extremists in these sects are not uncommon.

Despite entrenched cleavages and widespread insecurity, there are some markers for social Muddling Up. Most notably, upward social mobility is significant and present. Pakistan’s middle class has experienced steady growth, signaling an increase in opportunity for many. Further, though overall poverty levels remain high, Pakistan has the inherent capacity to meet the basic needs of its population with more effective and efficient application of effort. Pakistan’s largest cities are also examples of relatively positive ethnic integration and present notional models for achieving more tolerance in peripheral areas.

As with political Muddling and Fragmentation, the most significant buffer to social disintegration or continued Muddling Down in Pakistan appears to be the perceived presence of an external threat, which creates a common national identity to trump religious, ethnic, or regional ones. In Pakistan, the common perceived external threat is most often India (Balochistan and Kashmir), but in certain social contexts (the FATA) may also be the United States, due to frequent drone strikes. Should the willingness of the current Sharif government to negotiate with Baloch nationalists and Islamic insurgents in the FATA lead to real dialogue and institutional action that addresses the grievances of those who see themselves as marginalized, ethnic cleavages may soften and perceived inequality or relative deprivation may subside, as well as give extremists less credibility. Mitigating or removing these kinds of barriers could be the first step towards socially Muddling Up in Pakistan.

I&W for movement toward social collapse

• Further institutionalization of discrimination or marginalization of particular groups
• Continued rise in crime and violent dispute resolution

I&W for movement toward social development

• Expansion of social norm barring out-group focused violence
• Major social groups no longer perceive marginalization or discrimination and have equal access to public goods
• Safe and relatively secure environment, low crime
• Sustained economic growth

 

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