It was the early sixties; we went to the Railway Station to pick up my father’s uncle Dr. Anwar Iqbal Qureshi (AIQ) who was on his way to Rawalpindi to meet the President. Those were good times, people preferred to live with relatives instead of in hotels. There were warm welcomes and send-offs for travelers.
AIQ was considered to be the father of economics in the Sub-continent. He had the unique distinction of being the first Indian to do Ph.D. in Economics from Trinity College around the decade of his thirties. In the unity government of India, he was an adviser to Liaquat Ali Khan, the finance minister. He had recently retired from the International Monetary Fund (IMF). Till that time the Islamic Republic of Pakistan (IRP) was debt free.
As the President was desirous of a loan-based fast track development economic model, he wanted AIQ on his team. That night there was a tense after-dinner discussion. My father, the honest upright entrepreneur, was vehemently opposed to the idea of a debt-based model. Being in the marketplace, he had the foresight of the impending problems that lay ahead for such an approach. I remember the words of my old man, “Money will be squandered, loans will be written off, there will be limited repayments.”
Read more: How Pakistan is trapped in vicious cycle of status quo?
No way out for Pakistan?
Mohammad Ayub Khan (PA 10) was the first Desi Sipah-e-Salar of the Pakistan Army. There were better choices available for the position yet he was chosen for this coveted slot by Liaquat Ali Khan, the first Prime Minister (PM).
After the assassination of the PM, the republic had a free fall. As Commander-n-Chief (CNC), General Ayub Khan decided to sit in the cabinet meetings as the Defense Minister. With Iskander Mirza, another graduate of the Sandhurst Military College, he started to dabble in affairs of the state for which he was neither qualified nor trained. I am not sure whose idea it was to go for the debt-based model as AIQ himself was a very conservative economist though he had retired from IMF.
While India under Nehru relied on self-reliance with the use of indigenous resources, Pakistan under Ayub opted for the fast-track IMF model. With loans, started the era of loot, plunder, and nepotism as there was a belief that there would be no payback. Overnight the standard of living went up on borrowed money.
Read more: Pakistan: A country caught in complex economic downturn
Instead of need-based industrialization, greed became the order of the day. Over/under-invoicing, tax holidays, and loan write-offs started. Project/Individual debt turned into a national burden that has continued to spiral till today. As predicted by my old man the “Sipah-e-Salar Economic Model” has proven to be disastrous for the country. Today the republic stands trapped with no way out.
Harsh reality
Ayub Khan, AIQ, and my old man are no longer there to face the consequences of this blunder, yet the people continue to endure the fallout. Last year I received an email from Turkey, they wanted to know about the life and times of AIQ as he had written books on ‘Interest-Free Economy’ as well.
In Pakistan, the ‘Federal Shariat Court has recently ruled against the prevalent ‘Interest Based Model’. Let the experts deliberate as these are complex matters not covered in the best Military Academies of the world like Sandhurst. Economics and Soldiering have nothing in common. We live in an era of specialization and complexities. The republic has suffered enough already, lessons must be learned. It is time to bring in the experts to come out of the ‘Debt Trap’ that we are in today.
While the nation is proud of its Armed Forces, as it remains the only functional institution in the country which has ensured both internal and external security, it’s the economy that is in a mess created by the first ‘Sipah-e-Salar’ Mohammed Ayub Khan who elevated himself to the rank of Field Marshal and President of Pakistan. Neither his constitution nor his economic model was sustainable. His 1962 Presidential System was rejected to be replaced by the unanimously agreed 1973 parliamentary version.
Read more: The misuse of taxation in Pakistan
Pakistan needs to be saved
Today Pakistan is a constitutional democracy. The role of every institution has been clearly defined. Pervaiz Musharraf, the last usurper, was tried and convicted under Article 6 of the constitution; he now lives in exile in Dubai while those who were party to the loot live in London; both have been declared absconders and outlaws.
In 1958, Pakistan was emerging. There was a myriad of teething problems. The situation is totally different in the 22nd year of the 21st century. The people of the republic can no longer be taken for a ride. We live in an information age. Pakistan will be 75 years old on August 14, 2022, it is time to stand on our own two feet. National interests have to be kept supreme. The people have to be served through their genuinely elected leaders. Sipah-e-Salar type short cuts do not work nor should they be tried again.
The Pakistan Military Academy (PMA) produces fine soldiers who are trained in the art of modern warfare to ensure our territorial integrity. Let the economists lead the charge this time around. There are no free lunches in life, loans have to be paid back with interest.
Read more: The heavy debt on upcoming generations in Pakistan
Let us get out of this debt trap laid by the short-sightedness of a few untrained individuals. If AIQ’s model of ‘Interest-Free Economy’ is finally adopted by the Islamic countries, he will stand redeemed. My old man the ‘Tehreek-e-Pakistan Gold Medalist’ will also be able to rest in peace. Ayub Khan and his fast-track debt-based economic approach will be history never to be repeated again.
‘Nakhuda Jis Ka Ho Us ka Khuda Hota Ha’ (If there is no ‘Oarsman’ to steer the boat then God takes control) which applies well to the Islamic Republic of Pakistan. The savior is stronger than the destroyer.
The writer is Ex-Chairman Pakistan Science Foundation; email: fmaliks@hotmail.com.The views expressed in the article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.