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A POPULIST INTERLUDE 1971-1977:

A POPULIST INTERLUDE, 1971-1977: The third period in Pakistan’s history also began with a social revolution that was as profound as the one caused by the arrival of eight million refugees from India or the one produced by Muhammad Ayub Khan’s politics of indigenization at the start of the second period Social transformation at the beginning of the third period resulted from the practice of “naïve socialism” Bhutto’s rhetoric and the policies followed by his administration once he took office bestowed a considerable amount of political and economic power on a number of groups that had been largely excluded from the political and economic system The socioeconomic groups that benefited during Bhutto’s short tenure included the urban poor, workers in large-scale organized industries, and urban professionalsThe policies adopted by the Bhutto government to reach this new constituency were spelt out in considerable detail in the “Foundation Papers” of the PPP issued soon after the formation of the organization in 1968 The approach to be adopted was a simple one Because the founding fathers of the PPP believed that the private sector as it was organized in Pakistan would neither benefit the poor nor bring about an improvement in income distribution, the state had to intervene directly in managing industrial, commercial, and financial assets This approach was implemented aggressively once the PPP was in power In a series of acts of nationalization executed in 1972-74, the state assumed control over large segments of industry and commerce operated by private entrepreneurs It also took over all commercial banks and insurance companies It went so far as to nationalize educational institutions that were operating in the private sector



Bhutto believed that in order to run an economic system dominated by the state, he had to concentrate political power in his hands and in the hands of his close associates He began to subvert the constitution he had himself drafted the moment it was promulgated The subversion was meant to take away all power from the instruments of government that he did not fully control The powers of the National Assembly were curtailed and fundamental rights granted by the constitution were suspended A paramilitary force-the Federal Security Force (FSF)-was created, ostensibly to help police maintain law and order In fact, it was used to openly intimidate and harass the regime’s opponents Even Bhutto’s close associates were not spared if they dared disagree with him There were rumors that the FSF had been ordered to kill some of Bhutto’s more intransigent opponents Later, it was one of these murders that resulted in Bhutto’s receiving the death sentence and his subsequent executionBhutto’s social and economic policies and the way he conducted himself in office produced a number of predictable results Of special concern for many people was the loss of political liberty

There was an expectation of a return to democracy following the end of the long military rule Instead, Bhutto established a form of “civilian dictatorship” that was much more vicious than the military rule of Presidents Ayub Khan and Yahya Khan Economic difficulties further aggravated the situation There is now good understanding among economists on how this type of approach-called here naïve socialism-can do a great deal of damage to the economy This happens for three reasons: First, countries with a highly intrusive state of the type developed by Bhutto tend to have a higher share of the informal economy in total GDP This occurs as private entrepreneurs work to escape government’s controls and regulations and move “underground” Second, a large underground economy usually feeds corruption as the owners of assets in this part of the economy have either to bribe officials to keep the assets hidden, or have to buy services, such as protection of property and enforcement of contracts Third, as more and more people escape into the economy’s underground, the government is unable to collect taxes With the tax base narrowing, the government can no longer provide fully the services expected of it This in turn weakens the government and affects its legitimacy All of this occurred during the Bhutto period and ultimately contributed to his downfall

People’s reactions to Bhutto came following the elections of 1977 in which the opposition had expected to do much better than indicated by official results The results announced by the Election Commission indicated a massive victory for Bhutto’s Pakistan People’s Party The opposition, convinced that the regime had rigged the elections, took to the streets and brought down the government On 5 July 1977 the army, under the command of General Zia ul-Haq, intervened for the third time in Pakistan’s political history Bhutto’s removal from office began the second long interval of army rule and the fourth period in Pakistan’s history

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