Just before the 2013 general election, a Pakistani film-maker released an ‘on-topic’ political film called Chambaili. It was loosely centered on the narrative being pushed by Pakistan Tehreek-e-Insaf (PTI) chief Imran Khan in his election campaign: a crusading group of upper-middle class/upper-class individuals trying to get rid of venal, corrupt political elite through the politics of protest. The film was crassly written, yet it proved to be fairly popular with the suburban cinemagoers.
Watching the movie, audiences were charged. Every one of its badly written, moralising monologues was greeted with loud hoots and claps. When asked about its appeal, a young man in his early twenties – an undergraduate student at the Lahore School of Economics – replied: “It just gives us hope that if common people come together and put their minds to it, this country might actually get better.” His companion, in the same age group and studying at the same institution, chimed in about a particular scene that had captured his imagination: “You know, when they are at the restaurant, and Musa (one of the lead characters) gives that angry speech against corruption, that really gave me goosebumps. We are all just sick of being under the thumb of the corrupt.”
The scene he mentioned was shot at an upscale restaurant somewhere in Lahore. The ‘good guys’ are in the middle of a meal consisting of double-patty beef burgers, club sandwiches and pasta. The lead moraliser in the scene pushes his plate away, as he delivers a long-winded monologue about how common people like him and the rest seated at the table, have been taken for a ride by those in power.
The irony of associating ‘common-ness’ with a group of privileged urbanites, eating an expensive meal and wearing designer clothes, was clearly lost on the makers of the film. It, however, reflected what the writer and director of the film actually think about the nature of socio-economic class divisions and distribution of power in Pakistan. Chambaili may have been a terrible production, yet it provides us with an inadvertent snapshot of how Pakistan’s suburban middle class analyses the country around it. As a parting question, the two students were asked why there were no poor people in the film. They paused for a second and looked a bit bewildered. It was obvious that they were racking their brains to find an instance where someone less privileged than them had been more than just a prop. One of them suddenly recalled something, a shot in which the protagonists are leading a big procession, a jalsa: “That scene had plenty of poor people.”
Being blind to one’s own privilege and equating oneself with a mythical common man, or common woman, is not new to Pakistan.
Being blind to one’s own privilege and equating oneself with a mythical common man, or common woman, is not new to Pakistan. It started in the 1990s when corruption became an important issue in the political arena. The lines drawn then were between those in power and those just outside of it, with no mention of the many connections between the two. Under this divide, a doctor whose brother or cousin may be a serving bureaucrat, and who has often utilised such connections for personal gain, suddenly starts seeing himself as a victim of the system rather than its beneficiary.
This sense of victimhood has become even more pronounced and widespread over the last decade. As the size of the middle class and upper-middle class has grown to around 35 million individuals, a massive frustration arising out of their unmet aspirations has set in. While the state faces a perpetual fiscal crisis and the International Monetary Fund (IMF) continues to intervene every now and then to stabilise Pakistan’s precarious finances through loans with strings attached, those pampered by subsidised fuel, low electricity tariffs and cheap higher education have started to experience, and resent, a less cheerful economic reality. At the same time, they see a tiny sliver of the population becoming even richer, moving into even bigger high-walled houses and taking vacations abroad every other month. This gives rise to a de-contextualised narrative of economic injustice.
Just like in Chambaili, the predominant view among the middle class is that the poor are too oppressed to have an independent impact on politics; they merely do what their oppressors tell them to do. Their salvation, however, lies in a resetting of the system, which basically means replacing a set of ‘bad’ elites with good-hearted, noble-intentioned ones. Nobody seems to think that the only way to bring the poor segments of the society out of their squalid living conditions is to find a mechanism for their actual empowerment so that they can also stake a claim for a share in power — both economic and political.
In early October 1970, two months before Pakistan’s first general election, Zulfikar Ali Bhutto, and several other leaders of his Pakistan Peoples Party (PPP), addressed a large public gathering at Gol Bagh (later renamed as Nasir Bagh) in Lahore. This was part of a series of public meetings in the city meant to consolidate the momentum that the party was gaining in the run-up to polling day. Charged, boisterous crowds had greeted Bhutto across much of West Pakistan and the party’s popularity, among large segments of the electorate, appeared unprecedented.
Bhutto’s Gol Bagh speech was emblematic of his brand of political populism. There were token references to chauvinistic nationalism, to the sanctity of the state and to the glory of religion’s guiding light. There were theatrics on stage and dramatic proclamations, all meant to sway those in attendance. At the heart of Bhutto’s speech, however, was a simple message: “What we are struggling for is not only democracy but also economic change; change that will serve the interests of peasants and workers, as opposed to that which serves the capitalists and the feudals. In 5,000 years, there has never been a popularly elected people’s government in this part of the subcontinent. We aim to establish the first one.”
Bhutto’s proclamation of commitment to the rights of the underprivileged, both urban and rural, was a consistent theme during the PPP’s 1970 election campaign and its election manifesto. Whether it remained the guiding ethos for the party’s time in government is debatable but what is certain is that those elections, and the PPP’s victory in them, mark the high point of ‘class-based’ political mobilisation in Pakistan.
Sharif was delivering his speech within a residential neighborhood inside the Walled City of Lahore and his audience, while almost exclusively male, appeared demographically diverse.
Fast forward 43 years to another election eve, in the same city. In the run-up to the 2013 general election, Shahbaz Sharif (now the chief minister of Punjab) addressed a gathering a short distance from Gol Bagh, at an event organised by activists and supporters of Pakistan Muslim League–Nawaz (PMLN). In his speech, Sharif traversed an entire gamut of political rhetoric: achievements of his just-completed stint as chief minister, promises for development projects, memories of struggle for survival under General (retd) Pervez Musharraf’s military dictatorship and even lessons in public morality. The focus of his speech, however, was to convince the business community that it needed to make the ‘right’ choice in electing the next government. Immediately after doing that, he shot off a quick-fire list of all that various PMLN governments have done to support, what the party considers the veritable backbone of the country — its industrialists and it traders. The way he arranged that list was a way of saying, “We are pretty much the only ones you should even be considering to vote for, at this point.”
Sharif was delivering his speech within a residential neighborhood inside the Walled City of Lahore and his audience, while almost exclusively male, appeared demographically diverse. Yet he spoke to and about only one particular segment of the society. The rest seemed to matter a little less.
In the same week, Imran Khan’s election convoy, which by then was proceeding at the pace of one jalsa a day, stopped to address supporters in a tehsil headquarter in northern Punjab. The energised crowd earnestly devoured his promises of tabdeeli (change) towards a future full of justice and plenty. Throughout his speech at this particular jalsa, like the many others delivered in urban areas across Pakistan, Khan almost exclusively referred to only two categories of individuals — aam aadmi (the common man) and naujawan (the youth). The former being crushed by an oppressive, self-serving system of governance; the latter holding the key to freedom from that system.
The 2013 general election, fraught with controversy as it may have been, stands as a much celebrated turning point for democracy-watchers and democracy-cravers both in Pakistan and abroad. Given our checkered history of military rule alternating with democracy, the jubilation over a peaceful transfer of power through the ballot box was not entirely unwarranted.
Lurking behind the celebration, however, was another theme connected to the objective of politics and the nature of political competition. Dr S Akbar Zaidi, writing a month after the polls, in India’s Economic and Political Weekly, noted that the 2013 election had formally signalled an end to politics operating around deep ideological and socio-economic fault lines. In the view of observers like Zaidi, political contest – though it remains acrimonious and bitter to this day – is now mostly cosmetic.
Surveys by Gallup Pakistan and research by American analyst Andrew Wilder show that political contests were not cosmetic even in the 1990s. There was, till then, a positive correlation between household income and voting preference. Poor people, both urban and rural, were disproportionately found voting for the PPP in Punjab, Khyber Pakhtunkhwa and Sindh, while various factions of the Muslim League nearly always did better among comparatively better-off voters. Coupled with ethnic factors in Karachi, these voting preferences helped create a diverse political landscape as far as party–voter linkages were concerned. Although differences in party policies always became much less pronounced in government, as each one of them would adopt the same technocratic measures enforced by multilateral donors such as the IMF, each segment of the society seemed to have a party that they could call their own.
This is no longer the case. Almost in tandem with the PPP’s rapid organisational demise outside rural Sindh, socio-economic divisions in voting patterns have all but disappeared. Analysis of election results show that the two big parties, PTI and PMLN, get votes from all kinds of locations and from all segments of the population. In Lahore, Rawalpindi and Multan, both parties have done well in affluent areas and equally so in less prosperous constituencies. Even in rural areas, their support cuts across income divides: both landless labourers and landowners alike have voted for them.
There are other things that make the two parties look similar beyond these voting patterns: firstly, the social characteristics of their candidates and, secondly, their answer to Pakistan’s developmental problems. On the first count, the same set of politicians could have been (and in some cases have been) in either of the two parties. Consequently, both parties now draw their candidates and leadership almost exclusively from within the elites, that is, those who have personal networks of influence on the ground and can use personal wealth to ‘do’ politics.
On the second count, both parties want to achieve prosperity by promoting private enterprise and by offering greater space for investment and doing business to the private owners of capital. There may be some differences in the process. For instance, PTI believes the big hindrance in the way of economic development is corruption, whereas PMLN thinks that bureaucratic efficiency can address all the problems the country faces. But, by and large, the parts of their respective manifestos dealing with economy appear to be similar. The attention devoted to the working class and the rights of the poor segments of the society is similarly miniscule in their electoral promises.
This begs a very obvious question: why have political rhetoric and party policies become so oblivious to the socio-economic needs of the rural and urban poor? By all accounts, Pakistan is still a very poor country; 63 per cent of the population survives on less than two dollars a day and 24 per cent of all households subsist in chronic poverty. Despite rapid urbanisation, usually associated with economic growth, the absolute number of households living in extremely poor conditions has actually risen in the last 10 years.
Yet mainstream political parties, barring the occasional perfunctory statements by the PPP, invoke the poor neither in election speeches nor in party manifestos. In Karachi, rural Sindh, parts of Khyber Pakhtunkhwa and Balochistan, electorate is defined through ethnic lenses. In Punjab, it is left undefined — as a vaguely described common man. In some areas, sectarian and religious identities have become politically salient. Class – a word that was almost synonymous with politics at one point the world over and is still a popular frame of reference in Pakistan’s political history – has all but disappeared from the current political lexicon.
Activists involved in organising the working class, proffer many a hypothesis and theory to explain this. The end of the Cold War, which resulted in the demise of a world order premised on the opposite poles of Western capitalism and Soviet communism, is the first reason they cite. Bhutto’s repression of labour unions and General Ziaul Haq’s tyranny are other explanations. The rise of ethnic and religious identities is similarly seen as the third reason for a diversion away from class-based politics. More recently, some activists have started talking about the changing nature of the economy and how that is rendering a class-centric political discourse difficult to sustain, if not totally redundant.
The real answer may lie somewhere at the intersection of all these factors.
On February 10, 1972, the newly installed president and civilian martial law administrator, Zulfikar Ali Bhutto, addressed the nation to present the salient features of his government’s new labour policy. As he laid out the details of benefits being promised for the workers, he also warned them of dire consequences if they did not refrain from participating in “lawless behaviour.” He told the working class to desist from its “gherao” and “jalao” (siege and scorch) politics. “Otherwise,” he raged, “the strength of the street will be met by the strength of the state.”
A few months later, the government came good on its threat. On June 7, 1972, the police in Karachi opened fire on demonstrating labourers in a major industrial area of the city, killing several industrial workers. The next day, the police fired again, this time on the funeral procession of one of the deceased workers. Press reports indicate that at least 10 people were killed on that second day, including a woman and a child. These bloody incidents signalled the beginning of the end of a very successful era of labour activism and working class political mobilisation in Pakistan.
Compared to most other political subjects, the history of class-based politics in the three decades following Partition has received a fair degree of academic attention. This interest can probably be put down to the political leanings of social science academics of the time and the general involvement of the leftist intelligentsia with pro-poor political movements. Anyhow, the almost unanimous narrative that emerges out of academic accounts is that the period between 1964 and 1973 marked the pinnacle of mass mobilisation in Pakistan and remains the heyday of class-based politics in Pakistan. The culmination, and ultimate success, of this ‘golden era’ was the anti-Ayub Khan movement in 1968, which eventually paved the way for the victory of PPP in the 1970 general election.
The rise of class-based politics in the 1960s appears as a bit of a general trend across much of the developing world. The geography of such politics in that decade was as varied as Egypt, India, Turkey, Indonesia and Pakistan. At its root everywhere was the same combination of economic modernisation and global geo-politics. In Pakistan’s case, class consciousness only became a political force once the economic landscape had changed from what it was in 1947 (almost exclusively agrarian) and societal reality had been altered irreversibly (with the emergence of an industrial and business class and industrial workers).
In many ways, Ayub Khan’s decade-long rule and Pakistan’s Cold War alliance with the United States laid the foundations for big societal and economic changes. Two interconnected phenomena, the modernisation of the agricultural sector through the use of high-yield seeds, mechanisation and an improved irrigation system, collectively called the Green Revolution, and the development of a basic but rapidly growing manufacturing sector, lie at the heart of these changes.
Some activists have started talking about the changing nature of the economy and how that is rendering a class-centric political discourse difficult to sustain.
The Green Revolution, according to sociologist Hamza Alavi and economist Dr Akmal Hussain, made hundreds of thousands of those working in the agriculture sector become redundant. Since many of them did not own land and were working as tenant farmers, they suffered abrupt economic displacement. By one estimate, 794,092 peasants were forced into becoming farm labourers between 1961 and 1973 — they accounted for nearly 43 per cent of the total rural labour force at the time.
Alongside creating a pool of surplus agricultural workers, the Green Revolution also became a catalyst for polarisation within the rural economy by squeezing out those who owned or rented middle-sized farms. Within the same decade or so (1961-1973), the number of both large farms (bigger than 150 acres) and small farms (7.5 acres and less) increased, but the percentage share of mid-sized farms (7.5 acres to 25 acres) decreased. This was because large landowners were able to utilise the Green Revolution technology more effectively. Buoyed by their success, they either bought out middle-sized farmers or brought previously rented-out portions of their land under their own cultivation.
In large cities like Karachi, Lahore, Faisalabad and Multan, displaced rural labour was absorbed in the nascent manufacturing sector. Factories producing textiles, light engineering goods and consumer durables formed the backbone of this sector. These factories offered avenues of employment to low-skilled and semi-skilled labour thereby giving rise to an urban, factory-based working class. Between 1960 and 1970, the number of individuals employed as workers in formal manufacturing grew at nearly 8 per cent per annum. From just 400,000 in 1960, the number of industrial workers in Pakistan reached nearly a million in 1970.
The decade of development, as those years were often called in official communications, was also a decade when inequality and discontent both increased. Most observers argue these were natural consequences of Ayub Khan’s elitist economic management. When the build-up of this popular discontent ultimately manifested itself in politics, his regime was its main target.
The anti-government agitation of 1967-1969 was the first major display of the organisational strength of the workers’ unions. These unions had started emerging during the late 1950s and had gained massive support among the working class during the 1960s. At the heart of their organisational structure were labour federations such as the West Pakistan Federation of Trade Unions (WPFTU) led by the railway union supremo Mirza Ibrahim and the All Pakistan Federation of Labour (APFOL) — which, at one point, was led by Faiz Ahmed Faiz.
Sustained industrial action, in the shape of well-coordinated strikes and protests, had helped workers in the manufacturing sector obtain several concessions by the late 1960s. These concessions included a share in profits, improved health coverage (through a social security law promulgated in 1965), the right for collective bargaining for better wages and better working conditions, and an increase in gratuity payments.
These concessions, however, proved to be sporadic, and unevenly distributed. Coupled with rising costs of living and long delays in the payment of wages and bonuses, this unevenness resulted in repeated incidents of labour unrest. Another longstanding issue that troubled the workers was a repressive legal regime, that severely hampered trade union activity and their ability to bargain collectively with employers.
In 1967, workers at the Karachi Port engaged in what is still counted as one of the longest incidents of industrial action, ever undertaken in the country, to protest against delayed wage payments.
In 1967, workers at the Karachi Port engaged in what is still counted as one of the longest incidents of industrial action, ever undertaken in the country, to protest against delayed wage payments. By February 1969 the Joint Labour Council, led by trade union activists such as Bashir Bakhtiar, M A Khatib, Usman Baloch and Mubarak Haider, had organised waves of strikes in Karachi, Lahore, Multan and other industrial hubs. Despite the indiscriminate use of the state machinery to put down this unrest, labour organisers and striking workers stood firm for their demands. After several months of action which kept many cities shut sometimes for a week at a stretch, Ayub Khan resigned, handing over power to General Yahya Khan.
During Bhutto’s years in power, industrial disputes and labour mobilisation fell rapidly, despite the populist nature of his regime. From the peak of two million workdays lost in 779 industrial disputes in 1972 alone, the number fell to fewer than half a million over the next five years. A part of this decrease had to do with the cooption of several labour leaders by the government but most independent observers trace it to the regime’s suppression of independent unions, Bhutto’s policy of exporting semi-skilled and unskilled labour to the Middle East, and the nationalisation of a number of large industrial firms which brought labour under the direct control of government administrators and their sponsored unions.
The dismantling of labour unions continued unabated throughout the 1970s and the 1980s. In July 1977, shortly after taking over power, Zia outlawed strikes and demonstrations. The ban stayed in place for eight full years. Trade union activities in public and private hospitals, educational institutions and a number of public-sector corporations were also banned by the Zia regime. While trade unions were permitted to exist in nationalised banks, they did not have the right to do collective bargaining with the employers on behalf of their members. From over one million members in 1977, trade union membership declined to 869,000 in 1980.
An unholy alliance between law enforcers and politically influential industrialists during the Zia regime also helped businessmen thwart union activities, even in those enterprises where these activities were permitted. When, for example, pocket union at the Service Shoe Factory lost an election to an independent union in 1982, the management hired armed men to intimidate the workers. The law enforcement agencies conveniently looked the other way.
The Zia government also sought to loosen labour regulations in export-oriented industries and in export processing zones. On October 10, 1982 it issued two notifications, SRO 1003(1) 82 and SRO 1004(1) 82, which exempted all factory owners operating in export processing zones from adherence to labour law.
The legal measures taken during the late 1970s and the 1980s, coupled with their brutish implementation, helped snuff out class-based mobilisation from urban spaces. In the void thus created, other types of political and social organisations quickly stepped in.
By the mid-1980s, the golden era of labour activism and class-based politics, short lived as it was, was well and truly over.
Sheikh Ghafoor Khalid runs a hardware shop at the corner of Beadon Road and Abbot Road in Lahore. He is the general secretary of a local association of traders — a position he first took up when he became part of the Pakistan National Alliance (PNA), an opposition group formed to agitate against Bhutto in 1977.
The walls and tables in his office are adorned with plaques carrying Quranic verses, pictures of him in Makkah and tens of photographs with politicians and senior bureaucrats, one with the previous chief of Lahore police, another, older one, with two chief secretaries and a few with members of the provincial and national legislatures. Pride of place is reserved for two very large frames, one carrying a photo of Khalid with the former Jamaat-e-Islami (JI) chief Qazi Hussain, clearly taken at a dinner; the other with a much younger Shahbaz Sharif.
“We could not help it. Bhutto was taking too much away from all of us. Mills were nationalised and trading in basic food commodities was being taken over by the government,” Khalid says as he explains the rationale for his association with PNA. “My uncle in Hafizabad, Allah bless his soul, had built a multi-crore rupee rice trading business from scratch. He was not going to lose that without a fight.”
Khalid narrates how some traders “got together in Lahore and said enough is enough.” The PPP, however, was very strong in the city and a correspondingly strong organisational structure was required to counter it. “Thankfully, we had help from some friends; the members of the JI were already active; their student union too was active.” And then he sums it up: “Basically, this grew into a movement in which traders, every bazaar leader, got involved because nearly everyone had a direct stake [in its success or failure].”
By declaring that problems of inequality and economic hardship existed because of moral degradation (read, ‘Godless’ government), the movement’s leaders were able to offer an explanation that did not need to bring the question of class into their discourse.
Grievances of the business community with the politics of 1970s, whether it was the threat of labour militancy or the looming spectre of nationalisation, made industrialists and traders ardent opponents of Bhutto. They were willing to join hands with anyone who opposed his politics. Since center-right parties like the Muslim League (already tattered in many factions), were organisationally non-existent, a significant portion of the opposition to his government came from religious parties.
By 1977, with rising disaffection against Bhutto’s state socialism, religious parties (JI, Jamiat Ulema-e-Islam and Jamiat Ulema-e-Pakistan) were able to infuse strong Islamic overtones to the anti-government movement. Decree upon religious decree was issued, declaring that Bhutto’s economic policies were against Islamic laws and divine injunctions which protect private property. By declaring that problems of inequality and economic hardship existed because of moral degradation (read, ‘Godless’ government), the movement’s leaders were able to offer an explanation that did not need to bring the question of class into their discourse. Besides providing a rather cogent explanation of the age-old economic problems, these leaders also offered a solution: the imposition of Nizam-e-Mustafa.
That solution did not require too much effort to become popular in a country with an overwhelming Muslim population — the one raised on a steady diet of religious mythology. By March 1977, prayer leaders in small towns and cities had become grassroots loudspeakers for anti-Bhutto agitation. They quickly sidelined secular and/or left-leaning elements within the protests. In close coordination with bazaar and business leaders, like Khalid, the religious parties organised market strikes, carried out rallies and engaged in violent clashes with the administration. According to political scientist Mumtaz Ahmed, ulema and business leaders were the leaders of the movement but madrasa students, lower-middle class citizens and activists of religious parties were its street power.
This was also the first time in Pakistan that religious idiom was successfully employed for mass mobilisation, that otherwise originated due to political and economic reasons. One could offer several interlinked reasons for the success of that movement and its rhetoric, the dampening of labour mobilisation under Bhutto and his government’s repression of class-based politics outside of his own party would probably rank high among those reasons.
In the Zia years that followed, religious rhetoric and the idiom of the state became one and, hence, seeped into the slogans and statements of mainstream politics, especially in Punjab and Khyber Pakhtunkhwa. Afghan jihad gave this religious idiom a further fillip. The rise in religious discourse around the war in Afghanistan, indeed, helped sustain a steady supply of volunteers for taking part in that war on the side of the forces of Islam. Had there been a strong ideological alternative available in Pakistan at the time, in the shape of class-based politics and working class mobilisation, religious parties and conservative groups might have found it harder to openly recruit fighters for the Afghan war from urban and peri-urban areas.
The full-blown ethnicisisation of Karachi’s politics – a possibility always lurking around the corner due to the ethnically diverse population of Karachi – made the task of utilising class-based politics even more difficult.
In Karachi, the language and idiom of politics took a decidedly different turn. With the labour movement dead and buried and unions – both of students and industrial workers – in disarray, politics began coalescing around an ethnic identity. On college campuses, the assertion of Urdu-speaking identity emerged as a strong contender amidst the previously bipolar battle between left-wing and Islamist student groups. The All Pakistan Muhajir Students Organisation (APMSO) ultimately established supremacy first on campuses and then captured the city’s political landscape when it transformed itself into the Muhajir Quami Movement (MQM), later renamed as Muttahida Quami Movement.
The full-blown ethnicisisation of Karachi’s politics – a possibility always lurking around the corner due to the ethnically diverse population of Karachi – made the task of utilising class-based politics even more difficult. Class, as a marker of self-identification, became secondary to linguistic nationalism as lower-middle class Urdu-speakers, previously working as foot soldiers for either the left or the right, developed their own politics, mainly based on the language they spoke.
The development of ethno-nationalism was not limited to Karachi. In Sindh, where the opposition to Zia’s regime was strongest, class-based politics became subsumed under the larger banner of an ethnic Sindhi front, against what was perceived as a Punjabi state. It presented an interesting contrast: while the PPP’s cadre in Punjab perceived Bhutto’s hanging as an assault on the downtrodden (which the party claimed to represent), the party’s Sindh chapter increasingly felt that his assassination was an attack on Sindh and Sindhis.
The entrenchment of ethnic politics did not happen overnight. Ethnic identity has always mattered in West Pakistan, especially outside northern and central Punjab, and has always remained part of the lexicon of politics. It was part of the National Awami Party’s (NAP) appeal in Balochistan and Khyber Pakhtunkhwa in the 1970 election — it had led to ethnic clashes in Sindh under Bhutto as well. What is qualitatively different about the post-1970s developments is the elimination of the alternatives, as far as political organisation and mobilisation are concerned. With the associational networks of class-based politics having disappeared, other, more primordial, identities – like religion and ethnicity – provided a seemingly stronger basis for staking political claims and engaging in contestation for power.
The absence of class consciousness from political discourse and the lack of class-based contestation in mainstream politics, is something one would expect in a classless society. Pakistan is far from being one. While research on economic inequality is limited, recent work by the Lahore University of Management Sciences (LUMS) and Oxfam, sheds some light on the state of poverty and social mobility in the country.
The numbers are fairly stark, 40 per cent of all children born in the lowest income quintile (20 per cent) will remain in the same quintile for the rest of their life. To put it simply, four out of every 10 children born in abject poverty will remain abjectly poor throughout their lives. Another four children will move from being very poor, to just poor. Only one child will transition out of poverty during his or her lifetime.
Between 1990 and 2012, the share of the bottom 20 per cent of the population (in terms of household income) in total consumption declined significantly, while that of the top 20 per cent increased by 15 per cent. The current ratio is five to one — the top 20 per cent people consume five times more than the bottom 20 per cent.
One such change is the disproportionate shift of investment from the manufacturing sector to the services sector. As of now, the services sector contributes 53 per cent to Pakistan’s Gross Domestic Product (GDP) — an increase of 20 per cent since 1985.
The roots of such rampant inequality – especially in urban areas where it is higher compared to the rural areas – and the inability to fight it, are traceable to changes that have taken place in the economy over the past three decades. One such change is the disproportionate shift of investment from the manufacturing sector to the services sector. As of now, the services sector contributes 53 per cent to Pakistan’s Gross Domestic Product (GDP) — an increase of 20 per cent since 1985. In these three decades, investment has become increasingly concentrated in two interconnected and under-documented/informal components of the services sector: i) transport and storage; ii) bazaar-based retail and wholesale. The two components combined account for 17 per cent of the recorded GDP; together they employ nearly 65 per cent of the total urban labour force.
These changes have been accompanied by rising demand for consumer goods spurred by growth in urbanisation. This demand, coupled with a liberalised trade policy – first put in place in the late 1980s under the IMF-driven structural adjustment reforms – offers lucrative avenues for small-scale, single-firm capital investment in the bazaar sector.
There has also been a complementary growth – especially under the Musharraf regime – in the services sector businesses such as telecommunication, banking, finance and insurance. These businesses generally employ high-skilled workforce, rendering them off-limits for millions of half-literate, semi-skilled and unskilled young people in need of a job to get out of poverty.
Driving down a major thoroughfare in Karachi, Lahore, or even in a secondary city such as Sargodha, offers a picture entirely different from what the country looked like in the 1980s — and even in early 1990s. New commercial buildings are cropping up, suburban housing schemes are expanding in every possible direction and glitzy malls are dotting the landscape in all the major cities (not to mention their gilded, cheaper imitations in the smaller cities and towns). Filling these new urban spaces are retail outlets selling a wide variety of wares, from electronics and household appliances to clothes, personal care concoctions and fast food.
It is now completely possible for someone well-off to spend their life in a city like Lahore or Karachi and have consumption habits similar to those living in countries far more economically prosperous. The influx of foreign brands, especially in food, home accessories and fashion, ensures that the luxuries previously available to only a sliver of the upper-most income group are now available to a comparatively bigger part of the population.
The history of expanding consumerism in Pakistan, and thus an expanding retail/wholesale and services sector, is, in fact, the history of three things : demographic change, policy decisions taken by the government and policy decisions taken by those managing the world economy. Domestically, there have been multiple drives to denationalise and privatise government-owned businesses. Simultaneously, there have been various initiatives for structural adjustments in the economy, pursued initially by Zia but furthered by Nawaz Sharif’s first government (1990-1993) and by Musharraf in the 2000s. Together, these have resulted in massive concessions for the business communities (such as tax-breaks and cheap bank loans). Businessmen have also benefited from the absence of taxes on money remitted from abroad. Helping many to launder their ill-gotten money, tax-free remittances have also facilitated many entrepreneurs in bringing in cheap capital from abroad.
Some global and external factors, such as the liberalisation of international trade under the World Trade Organisation (WTO) and the conditionalities attached to the past three IMF loan packages, have complemented the domestic economic developments mentioned above. Commitments to foreign donors and pledges made to partake in the global economic order, have repeatedly forced Pakistan to reduce impediments to imports, such as import taxes and non-tariff barriers concerning environmental and cultural considerations. The removal of these barriers has exposed the country’s manufacturing sector to competition from far more efficient industrial economies. Free trade agreements with a number of countries, including China, also favour importers more than the manufacturers and the exporters and have further increased the inflow of foreign goods: cheap textiles, shoes, food products and electrical appliances.
As a combined effect of all this, the domestic consumer goods manufacturing sector has suffered greatly. The contribution of manufacturing has stagnated at around 18 per cent of the GDP for the last seven years and its share in total employment continues to hover around the 20 per cent mark.
The evolution of Super Asia Group, one of the pioneers in producing air coolers, washing machines and other household appliances, strongly illustrates the shift from the manufacturing sector to the services sector. In the past decade, a younger generation of proprietors has taken over the reins of the group which is now making major investments in areas such as real estate development (shopping malls in Gujranwala), foreign fast food (Hardee’s restaurants) and high-end coffee shops (Gloria Jeans).
In an interview with the Herald, a member of the family that owns the group says they are now largely interested in exploring options in distribution and retailing sectors. When asked why the group is not investing in expanding its already sizeable manufacturing base, he argues that manufacturing offers smaller profit margins, attracts greater labour regulation, incurs higher tax burden and requires bigger capital investment than the services sector does.
The state’s policies that make the manufacturing sector much less attractive than the services sector, are also shaped by the government’s over reliance on borrowing from domestic banks to pay for its expenses. This practice crowds out private-sector manufacturers looking to finance their projects through banking channels. Private borrowing from the banks, unsurprisingly, remains low in Pakistan even when interest rates have touched their historic low in recent months. Industrialists often complain that the sluggish private borrowing is owed to the fact that the government acts as a behemoth in the financial markets, leaving banks with little incentive and money to lend to private borrowers. Financing for trading, and for individual consumers to buy cars and other household commodities, however, continues to grow. This is mainly because banks require much smaller amounts of money for such lending, than they do for manufacturing-sector projects.
Pakistan acts and behaves as a country that exists only for consumers — and for traders.
The state’s economic policy framework, which has encouraged a services sector boom, is also to be blamed for the economic inequality and poverty in Pakistan. To understand this, it is important to note that the nature of employment normally found in the services sector is informal. Job contracts are usually verbal, there is no governmental regulation, wages are paid in cash, and are almost always below the minimum wage. Most importantly, the nature of work is flexible: the employer can choose to hire or fire workers whenever needed. The services sector boom has spawned a whole era of temporary, unregulated employment. Informal labourers now count for almost 90 per cent of all participants in the labour force in urban Pakistan.
One of the biggest hubs of informal labour is Lahore’s largest wholesale market, Shah Alami bazaar. The market is gigantic, with nearly 23,000 establishments, employing close to 100,000 individuals. By independent estimates, the daily turnover of the entire bazaar is well above a billion rupees; profit margins, painstakingly kept free from government documentation, are astoundingly high. In the cash-rich environment of the bazaar, part of the profit is made by exploiting informal labour.
Zahid works as a load-carrier in one corner of Shah Alami bazaar. He unloads supply trucks, handles the inventory and then reloads goods on trucks carrying the sold items to retail shops in Lahore’s suburban areas, as well as to other parts of Punjab. He shares work with four others, all sequestered into one small nook at the back of the shop.
Pakistan acts and behaves as a country that exists only for consumers — and for traders.
Zahid found employment in Lahore 15 years ago, at the age of 20, through the help of his cousin who, in turn, knew a labour contractor. His first employment was as an apprentice in a small power loom in Raiwind. Soon the loom closed down and he had to hunt for work again through the same informal channels. In 2001, he found himself working as a store boy in Shah Alami bazaar for 5,000 rupees a month. Fast forward to 2015: in a good month, Zahid can make as much as 9,000 rupees, of which he sends 2,000 rupees back home. In a bad month, when he loses work days to injuries and back pain, he makes less, depending on how much money his employer deducts from his wages for every day missed.
There is no government regulation of the work Zahid does. He has the support of no laws to request social security, health benefits, paid holidays, gratuities or bonuses from his employer. Unlike unionised manufacturing sector labour, there is no avenue for representation. The question of collective action and collective bargaining for better wages does not even arise. Anyone even remotely interested in such activities, will lose their job instantly. Since there is always someone out there willing to work for a little less, those who lose their jobs once run the risk of having lost the opportunity to find work forever. There is literally no leverage available to labourers.
When asked if any of the thousands of workers in Shah Alami bazaar have ever thought of getting together to demand higher wages, Zahid answers in the negative. He and his colleagues are not even familiar with the idea of collective bargaining. In the nearby metalwork market some workers once tried doing that, but it led to disastrous consequences. They got together to form an informal union and were quickly dismissed from their jobs. Before they were sacked, they also received a thrashing by the goons hired by an association of business owners.
Labourer’s lack of leverage and the accompanying lack of upward social and economic mobility are built into the economic landscape we inhabit. For upward mobility to take place, a worker like Zahid will need secure employment, with guaranteed benefits and social security which give him the fiscal space required to invest in his next generation. Only that way his children will be able to attend school and acquire skills that fetch a wage higher than what he is earning.
Zahid’s family lives in his native Ferozewala town, a few miles to the north of Lahore, on whatever little money he remits them to meet basic consumption expenses. He cannot bring them to Lahore because rent in the city is too high and living conditions far more squalid than in his hometown.
If the place of work is oppressive for most informal labourers like Zahid, the place of their residence is even worse. Zahid lives in an informal settlement close to the Walled City, in a three marla house shared by eight people. The rent is 2,000 rupees a month per person. The rental agreement is verbal and tenants have been known to face eviction over a day’s notice.
The house belongs to a local real estate broker who owns several properties in the settlement. The other role that the landlord performs is that of an agent of the local member of the Punjab Assembly. Whenever someone takes up residence on his properties, the landlord hurries them off to the nearest office of the National Database and Registration Authority (Nadra), to get their voting address changed to his political patron’s constituency. The landlord’s other responsibilities include settling neighborhood disputes, providing local residents access to subsidised rations in the month of Ramzan, extending small loans to potential political supporters and mobilising voters during elections.
Analysing similar working and living conditions in Buenos Aires, Javier Auyero, a sociologist who studies class and power in urban Argentina, concluded that the loss of stable jobs in the manufacturing sector has finished off the potential for any collective action among low-income households. Most of the time available to the urban poor is spent in addressing day-to-day anxieties, he wrote. Their most basic problem is survival: where do I find work, where do I live, how do I get health care, medicine and food. The only way available to them is to find local patrons and to become part of their patronage networks as clients, paying in whatever form they can — by doing menial labour, by providing political support and votes and even in cash, Auyero noted.
In the last three decades, problem solving through local strongmen, who in turn have access to state resources, has become the predominant political mechanism in Pakistan too. Sometimes, this mechanism takes on an ethnic contour, as is the case with low-income neighbourhoods in Karachi, and at times it wraps itself around biradari, religion or sect, as we often see in other parts of the country.
Every year, provincial governments draw up their annual development plans with bold statements about increasing enrolment or enhancing funding for public hospitals, but end up spending, on average, only less than 50 per cent of the allocated amounts.
And it is easy to understand why. Despite making repeated proclamations to improve state-provided services, successive governments have ended up leaving those services, especially education and health care, to anyone who can provide them — at a price, that is. Real spending on services that are accessed most often by the poor, basic health and primary education, stands at a paltry one per cent and two per cent, respectively, of GDP. Every year, provincial governments draw up their annual development plans with bold statements about increasing enrolment or enhancing funding for public hospitals, but end up spending, on average, only less than 50 per cent of the allocated amounts. The rest is transferred back to the federal government, so that it can show that it has reduced its fiscal deficit. Overcoming that deficit appears to be a bigger concern than the provision of public services.
Ignored by the state for decades, the poor across Pakistan make do by turning to exploitative networks to solve their problems. Individuals like Zahid’s landlord act as intermediaries between an indifferent state, a self-serving political class and the destitute. This is the most basic explanation for why parties staffed by rich people, with anti-labour dispositions and with little to no clear-cut thinking on how to address the problem of poverty, are voted in by the poor across Pakistan.
In the past few months, activists associated with a farm tenants’ group, Anjuman Muzaraeen Punjab (AMP), have blocked the National Highway near Okara and Sahiwal several times. The reason for their agitation is a long-standing feud with the military, over rights of ownership of land which these farmers have cultivated for many decades. They are also angry over the continuous harassment of the group’s leaders by the police. So far their movement has only resulted in a precarious détente which is often interrupted by the state’s heavy handedness.
AMP is one of the few organisations working actively for farm labourers and tenants. The rest of the associational landscape in rural Pakistan consists of organisations representing large scale and mid-sized landowners (such as Pakistan Kissan Ittehad and abadkar boards) that lobby the government for agricultural support prices and other subsidies. For the last many months, these organisations have been agitating that the government should provide a cushion to the agriculture sector against the adverse impacts of falling prices in global commodity markets. In September 2015, after several rounds of protests, the government gave in and announced a multi-billion rupee farm support package to help shore up profits for landowners and cultivators.
The announcement of the package shows who has power and influence in the rural areas, those with political and economic resources. Those on the margins, such as farm labourers, are rarely, if ever, heard in the corridors of power. Naturally, the political calculus drives the government to provide subsidies to landowners. Nothing is more symptomatic of this calculus than the continuing use of a leakage-prone support price mechanism for wheat. If nothing else, this mechanism overwhelmingly favours farmers and landowners with connections to the food department and other procurement agencies.
Meant to boost rural incomes by setting a minimum price above the one prevailing in the free market, support price mechanism is flawed for several important reasons. Firstly, even in areas classified as rural, the majority of the population is now a net consumer of wheat, rather than a net producer (only 37 per cent of all rural households own some amount of land). Secondly, the state’s procurement centres cover a vast area, thus creating room for selective provision of procurement logistics to those farmers and landowners who have the political and monetary resources to avail those logistics. Thirdly, the absence of universal outreach of procurement centres and lack of storage facilities means that many small and uninfluential farmers, will be left at the mercy of a grain market controlled by extortionist middlemen.
With landownership and incidence of poverty showing some correlation, rural inequality rates remain staggeringly high. By 2008, slightly less than a third of all rural residents (30 per cent) were living in chronic poverty. On the other hand, two per cent people in the villages owned about 30 per cent of all cultivable land.
There is a strong correlation between lengthened access to land (provided by fixed tenancy contracts) and socio-economic well-being measured through long-term health and education outcomes.
Tenancy contracts which offer livelihood security to those with small or no landholdings are on the decline. As inter-generational landholdings become smaller, and farming becomes market-driven, landowners prefer to utilise wage labourers over long-term tenants or, at least, give out land on sharecropping contracts. Tractor subsidies given by the government, which reduce the need for farm labourers, favour landowners and have resulted in a 37 per cent decline in tenancy contracts over the past four decades. The state, in essence, has forced peasants to become unemployed rural labourers through its own policies. Nearly 44 per cent of the rural population is now engaged in informal wage labour of some kind.
According to research by Ali Cheema, Farooq Naseer and others, there is a strong correlation between lengthened access to land (provided by fixed tenancy contracts) and socio-economic well-being measured through long-term health and education outcomes. Families forced off land, or turned into net-sellers of labour on a seasonal basis, have access to fewer resources to invest in improving their human capital. This results in long-term poverty traps, successive generations will fail to improve their standard of living because they are too poor to invest into learning skills that earn high wages.
During the 1960s and early 1970s, tenant associations had managed to secure some important concessions from the state. This happened mainly because of political activism in rural areas: by left-wing parties such as Mazdoor Kissan Party as well as by PPP’s kissan and hari committees. These organisations focused specifically on ensuring occupancy rights for tenant farmers which helped in the long-term alleviation of rural poverty. The driving philosophy behind this was simple: contrary to neoclassical economic assumptions, excess farm labour will not be fully absorbed by a growing urban economy; in the long run, urban growth will happen in less labour-absorbing sectors (as is currently happening in Pakistan) and, thus, it was thought important to secure the livelihood of non-landowners in the rural economy.
One of the biggest concessions gained by the peasant mobilisations was improved tenancy protection laws promulgated by the Bhutto government. This law allowed tenants legal protection from forced eviction and gave them the right of first purchase, in case the landowner decided to sell the land. Another major concession obtained was homestead rights on rural land which allowed the rural underclass access to residential land in their villages.
However, these victories have proven short-lived. As soon as tenant protection became enshrined in law, landowners figured out informal mechanisms to avoid its implementation. Utilising their political and social networks, they managed to bribe or coerce district administrations into allowing forceful evictions. This has resulted in a situation where, regardless of the protection accorded by law, rural landlessness and the number of rural labourers continue to increase.
On a recent day off from work, Zahid walks over to a tea shop near his place of residence. The television in one corner of the shop is showing news related to the upcoming by-election in a Lahore constituency. One of his co-workers lives in that constituency and has been talking about how the assistant to the PTI candidate has promised a new sanitation scheme for his neighbourhood. Apparently, the candidate has made the same promise at several other locations. Half-jokingly, Zahid thinks out aloud that it will be a good thing if the member of the National Assembly in his home constituency is disqualified, too. A by-election is probably the only way he might get a new sewerage line for his street.
When asked if he has ever thought of becoming a part of some collective action for better living conditions, Zahid says no. There is little chance that such an action will work, he suggests. It just seems common sense to him to keep his head down and go about his life without asking for anything.
In Pakistan the prospects of a new social contract, one in which the poor have an equal right to public resources and the state serves the need of the many, as opposed to the few, are minimal.
There is no way for him to know what collective action has achieved in human history. The creation of the welfare state in Europe after it was destroyed during World War II was made possible mainly through the decade-long struggle of politically organised and mobilised sections of the working class. The welfare state guaranteed universal access to health care, massive improvements in public education, access to affordable housing, social security and pensions and, most importantly, dignified employment that offered secure opportunities for upward mobility.
Today the welfare state exists only precariously in many parts of the world in the face of an aggressive introduction of neo-liberal economic policies, which emphasise on rolling back the role of the state from most fields of life. Yet its importance and role in overcoming the social and economic impacts of war, poverty and strife cannot be understated. In Pakistan, however, the prospects of a new social contract, one in which the poor have an equal right to public resources and the state serves the need of the many, as opposed to the few, are minimal.
The country may recover from terrorism, soon. What, however, seems less likely is that the plight of the poor will change for the better in the foreseeable future. Given the indifference and arrogance of those with power and resources, huge segments of the society appear condemned to live economically bleak lives day in and day out — with no end in sight.
This was originally published in Herald's October 2015 issue. To read more, subscribe to Herald's print edition.