Political stability

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Economic growth depends on three things: capital accumulation, human resources and technological progress. Capital – including foreign direct investment (FDI) – accumulates where there is political stability. FDI brings both qualified human resources and technologies. Essentially, the main engine of economic growth is political stability. Of course, political instability kills growth. None of this is rocket science.

Over the past 20 years, China’s per capita income has risen from $ 959 to $ 10,216. The Chinese Communist Party has been in power since 1949. Singapore’s per capita income rose from $ 428 in 1960 to $ 11,861 in 1990. Lee Kuan Yew, founder of Singapore and first Prime Minister of Singapore, remained prime minister for 31 years (1959-1990). Malaysia’s per capita income increased from $ 1,769 in 1981 to $ 4,461 in 2003. Mahathir bin Mohamad was Prime Minister for 22 years (1981-2003).

Yes, political stability can be quantified with factors such as the longevity of a government, the number of political parties, military spending, and the strength of the ruling party. One such quantification exercise was undertaken by a study published in the American Journal of Applied Sciences. The study concludes: “China, Singapore and Malaysia have higher political stability while India, Philippines, Pakistan and Sri Lanka have worse political instability. China takes first place and India last.

Very interestingly, the longevity of a plan is essential for economic growth, regardless of the type of plan. The study emphasizes that “in economics, the term ‘stability of political regimes’ is used differently than in political science. The economy does not care whether the regime is a democracy or a dictatorship. The economy does not care whether the regime is authoritarian or not.

Pakistan, for example, recorded its strongest economic growth of 11.35% of GDP in 1970, most likely due to General Ayub Khan’s eleven years of political stability (a period known as the “Golden Sixties”). In 1999, Pakistan’s per capita income was $ 454. In 2007, it doubled to $ 908 – most likely due to General Musharraf’s nine years of political stability.

Pakistan needs economic growth at all costs. Pakistan needs political stability at all costs. Yes, “the economy does not care whether the regime is a democracy or a dictatorship”, but I am convinced that Pakistanis want democratic rule. Let’s say democracy for Pakistan is a given. The real question then comes down to: can the current constitutional arrangement ensure political stability? Answer: Our history is “the witness that bears witness to the passage of time; it illuminates reality, vitalizes memory and guides.

Remember, the First French Republic was founded in 1792. It collapsed, along with the second, third and fourth. The Fifth Republic replaced the parliamentary republic of the Fourth Republic with a new “semi-presidential and double executive” system of governance. In 1972, South Korea drafted a new constitution under the Fourth Republic. In 1999 Nigeria drafted a new constitution under the Fourth Republic. Ghana, the Philippines and Hungary have also rewritten their constitutions for the fourth time.

Sustained economic growth – our only salvation. Political stability – the only way.

The writer is an Islamabad-based columnist.

E-mail: [email protected] Twitter: @saleemfarrukh


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