Police escort in Karachi © Colin Cookman/Flickr (CC BY-NC-SA 2.0)

Pakistan’s Violent Economy

Contrary to Western perception it’s not Islamic violence but economic misery that matters most to people in Pakistan. Yet, few believe that the government will soon put the country on a path of progress.

I had only five days to shoot in Karachi for the “Secrets of Transformation” series, a joint project of Deutsche Welle and the Bertelsmann Stiftung. My task was to capture the worsening economic situation in Pakistan on camera. The objective of the project is to highlight the long-term winners and losers of global transformation in the Bertelsmann Stiftung’s Transformation Index (BTI)Pakistan is one of the greatest losers in the BTI’s assessment of economic development. We wanted to go beyond the statistics and see how the crisis was affecting people’s lives.

Karachi is one of the biggest cities in the world with a population of more than 15 million, and there is hardly a person in this humongous city whose life has not changed in the past decade due to a dysfunctional economy and growing violence. Five days were certainly not enough to finish the job.

A day before I arrived in Karachi, US drones had killed Hakimullah Mehsud, leader of the militant Tehrik-i-Taliban Pakistan (TTP). The anti-American sentiment was higher than ever in the city and people feared the Taliban’s retaliation. The situation also limited our mobility and access to interviewees.

One of my tasks was to find and interview a person whose business was directly affected by the country’s lack of economic growth. It didn’t turn out to be as arduous as I thought it would be. In Karachi, which is Pakistan’s commercial and economic hub, there are hundreds of thousands of people who have lost all their assets during the past seven or eight years of economic misery. There were many people who wanted to tell their story and share their views with us.

Contrary to what’s often believed in the West, most Pakistanis don’t consider the Taliban-led violent insurgency their major issue; they believe it is the country’s bad economic situation. “Our economy is more violent than the Taliban,” my driver said to me. He said that it had become almost impossible for him to make both ends meet.

He was not the only one: There is hardly any government support for people. Hasty privatization of public institutions has made millions of people lose their job. Inflation is at its peak and the number of unemployed persons in the country is increasing by the day. Every year, the International Monetary Fund (IMF) and the World Bank have to pump in money to make sure that Pakistan does not go bankrupt. No one can imagine a worse scenario than a nuclear-armed country going bankrupt – a country which has been facing Islamist terrorism for almost a decade. But the international financial institutions do not dole out money to Pakistan without conditions which demand that the Pakistani state imposes more taxes. The rich, however, are never taxed. It is the poor who face the brunt.

A teenage suicide bomber for less than a thousand Euros

It is, therefore, no secret that Pakistan’s economy is going down the hill for quite some time. The worst effects of this development are those on Pakistani society. Islamabad has used militant Islamism as a state policy to counter Indian influence in Kashmir and Afghanistan, but many political analysts agree that religious extremism in Pakistan is also being fueled by a protracted economic crisis. Experts say that the Pakistani military and its spy agency, the Inter-Services Intelligence (ISI), no longer control all jihadist factions, and that a number of them have become independent over the years. It is not difficult for terrorist organizations anymore to recruit young, uneducated people and turn them into Islamic warriors. You can buy a teenage suicide bomber for less than a thousand Euros in Pakistan.

This, obviously, has a boomerang effect on the country’s economy. As much as the lack of growth has forced people to take up arms, the violence has strangled the country’s economy and continues to do so. Karachi’s businessmen are a witness to this. It has become increasingly difficult for small entrepreneurs and shopkeepers to run their businesses. Kidnappings for ransom and assassinations have forced thousands of people to move their businesses to Bangladesh, the United Arab Emirates, or Southeast Asia. Pakistan is definitely not safe to do business.

But what is the government doing about it? I interviewed Shoaib Siddiqui, the Commissioner of Karachi, at his office and asked the same question. All Siddiqui had to say was that Pakistan was suffering from an “image problem,” as if the financial crisis and terrorism were myths created by the media. He mentioned a number of projects that his administration had initiated to improve the economic and security situation. Siddiqui often used the word “resilient” for his countrymen and the economy. He said that Pakistanis knew how to survive in the worst possible scenarios. “What could be worse than what is happening in Pakistan right now,” I asked the Commissioner. He didn’t have an answer.

The common people I interviewed in Karachi did not look so “resilient.” They said they have had enough. Those who could leave the country have done so; the rest desperately wants to. And they didn’t blame the Taliban or terrorist organizations for their misery; they criticized the government.

No trickle-down effect of economic benefits

But this is only one side of the picture. In a state where more than forty percent of the population live below the poverty line and where clean water is not accessible to the majority of people, the rich are getting richer. Foreign capital is pouring in and multinational food chains and grocery shops have opened their outlets in all big cities of Pakistan, including Karachi. Elite residential areas are popping up and property prices are increasing. Government officials and politicians spend lavishly and live in secured villas and mansions. This means that there is some economic activity in the country, but its benefits are not trickling down to the common Pakistanis. Never in Pakistan was the class-divide so stark and ruthless as it is right now.

But what lies ahead for Pakistan? The political debates in the country still don’t encompass the economic woes of the people. The local media is busy discussing the treason trial against former military dictator and president, Pervez Musharraf, and the ongoing peace talks between Islamabad and the Pakistani Taliban. The policy makers are more interested in what is going to happen in neighboring Afghanistan after the drawdown of NATO’s troops this year than their own issues.

Economic experts point out that Pakistan’s financial situation is improving under the incumbent Prime Minister Nawaz Sharif’s government. Sharif, a shrewd businessman, came into power for the record third time after winning the May 2013 parliamentary elections. The slight improvement in Pakistan’s economy, however, does not mean that the Islamic republic has embarked on a path of progress. No one expects the country to come out of the economic mess any time soon.

Observers fear that the concessions Islamabad is making to Islamist militants are likely to embolden them further, which, in turn, would create more problems for Pakistan and its economy. What is needed are economic reforms aimed at creating jobs and reducing inflation. The government should act to curb terrorism instead of using it as a tool to increase influence in Afghanistan. Violence and economic growth just don’t go hand in hand..

Shamil Shams works for Deutsche Welle’s Urdu and Asia English services in Bonn, Germany. He contributed to the “Secrets of Transformation multimedia series, a joint project of Deutsche Welle and the Bertelsmann Stiftung. The series examines the winners and losers of transformation.


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