PFS 4: Industries and Economy of Pakistan

Chapter 4


In a report about the Pakistani economy, economist Sreedhar states (26):

Pakistan’s economy during the past fifty years can be described as a classic example of a case where artificial prosperity was maintained by heavy doses of foreign aid and overseas remittances of Pakistanis...Easy and cheap availability of goods and services through foreign aid discouraged the development of a large scale indigenous industry. At another level, Pakistan failed to do even the basics of economic development which most of the developing countries have done.

More than fifty years after independence, Pakistan remains primarily an agricultural economy. Not a single wrist-watch, scooter or motorcycle has appeared on the international market with a Made in Pakistan label on it. This level of industrial technology in Pakistan is in keeping with the overall picture of Pakistan as a nation in which almost 70% of the people are illiterate.

Goods manufactured in Pakistan are mostly no more complex than bicycles, sports goods such as footballs and cricket balls, clothes, textiles and agricultural products like sugar. Pakistan has survived for over 50 years giving the impression that it is somehow a powerhouse in its depth and breadth of manufacturing and industrial capacity. That is far from the truth.

Still, a sophisticated Pakistani public relations machine has managed to build up the idea, at least in the minds of Indians, that Pakistani industry is producing some state of the art high technology goods. It is worth looking at some of these items and Pakistani claims in some detail. In keeping with the Pakistani psyche of according the highest importance to the armed forces Pakistani claims of high technology indigenous manufacture have revolved around armament, specifically missiles and Pakistan’s nuclear program.

Pakistani spokespersons never tire of speaking of Pakistan’s indigenous missiles - given names like Hatf, Ghauri and Shaheen. These brave names may perhaps be essential for national pride, but even a cursory search of authoritative sources shows that Pakistan’s Hatf, Ghauri and Shaheen missiles are Chinese M-9 or M-11 missiles, or North Korean No-Dong missiles (27).

The idea is not to downplay the considerable risk that Pakistan’s missiles pose to India and other nations, but to point out the compulsion that Pakistani authorities have to maintain a facade of indigenous production for items that are widely known to be imported. The most likely reason for maintaining this charade of indigenous development of missiles is to obscure the fact that dangerous, nuclear capable missiles are being supplied by countries like China and North Korea to Pakistan ignoring international treaties that forbid such exports.

In a detailed report on Pakistani missiles from NTI - Nuclear Threat Initiative, a private body aimed at studying the risk of nuclear conflict it was reported that (28):

Pakistan is still dependent on China for specialty materials, guidance systems, and other critical missile components...Pakistan will remain dependent on North Korea for importing complete liquid engines, or at least their major component parts, as well as the liquid propellants to fuel its missiles

Even more peculiar is Pakistan’s nuclear program. The strong Pakistani insistence that the program is entirely indigenous is contradicted by the facts. A news report about this in a New Zealand news portal reads (29):

The father of Pakistan’s atom bomb, Abdul Qadeer Khan, worked at the Urenco uranium enrichment facility in the Dutch city of Almelo in the 1970s.

After his return to Pakistan he was convicted in absentia of nuclear espionage by an Amsterdam court..He has acknowledged he did take advantage of his experience of many years of working on similar projects in Europe and his contacts with various manufacturing firms.”

A report from the Netherlands, from which Abdul Qadeer Khan got his designs for Uranium enrichment says Khan received a MSc degree in metallurgy from Delft in 1967 and later stole nuclear secrets from his Dutch employer, helping Pakistan develop its first nuclear bomb... In 1976, Khan suddenly left Europe before his espionage was detected. Back home in Pakistan, then Prime Minister Zulfikar Ali Bhutto gave Khan the job of organizing Pakistan’s nuclear program.

Pakistan can hardly be expected to publicly proclaim that the Father of Pakistan’s nuclear program stole the technology. Experts have argued that it does not matter if Pakistan’s atomic bombs are stolen or made in Pakistan. They are a serious risk either way. This is true, but it is important to place on record the fact that the designs were stolen and not the result of some prolonged research effort in Pakistan.

The designs that Abdul Qadeer Khan obtained from the URENCO labs were for centrifuges. Centrifuges are devices that are used to rotate something at high speed to separate out heavier from lighter components. For example, a rotating centrifugal dryer in a washing machine is a centrifuge that separates water from clothes and makes wet clothes much more dry. Obtaining centrifuges was necessary for Pakistan to start enriching Uranium. Uranium occurs naturally primarily in two forms, the heavier U238 and lighter U235. The latter, U235 is needed for nuclear bombs but occurs in very small quantities mixed with U238. For this reason Uranium needs to be enriched to get material that contains 90% or more of U235, which can then be used for making a nuclear bomb. Several techniques exist for this and Pakistan chose the route of Uranium enrichment by centrifuges using the technology stolen by Qadeer Khan from the URENCO labs.

But making a nuclear bomb goes far beyond merely enriching Uranium. Making a workable and reliable nuclear bomb requires further technology. Indian analyst K. Subrahmanyam quotes Nobel Laureate Abdus Salam as being skeptical about Pakistani ability to actually produce a working nuclear bomb. Subrahmanyam goes on to indicate similar skepticism of Pakistani ability in Indian scientific circles by saying (30):

Their skepticism was based on their judgment that Pakistan did not have the critical mass of scientific and engineering talent necessary for the project

This is where Pakistan’s role as a Cold War ally of the US and its role in helping China and the US get closer came in handy. China provided Pakistan with the necessary technology to make its nuclear bomb. It is widely reported that China gave to Pakistan the complete design of a nuclear bomb that it had tested in 1964 (31).

One week after the Indian nuclear tests of May 1998, and a one week before the official Pakistani nuclear test an announcement was made at a G8 meeting that Pakistan had tested a nuclear device. It is said that the device failed to detonate. After this there was a flurry of activity when Pakistani officials visited China. The next week, on the 28th of May 1998, Pakistan conducted a nuclear test in Chagai. Some experts believe that the device tested was a ready made device provided to Pakistan by China after the failure of an earlier test. During this period mysterious news reports surfaced that Plutonium was detected in the atmosphere over Chagai in Pakistan (32). Since Pakistani bomb designs were Uranium based ones, there is no way Plutonium could have appeared. If the Plutonium story is true, it lends credence to the theory that Pakistan may actually have tested a ready made Chinese nuclear device.

At the time of writing this, the father of Pakistan’s nuclear program, Abdul Qadeer Khan stands discredited and accused of selling equipment and the plans for Uranium enrichment centrifuges to Libya, Iran and North Korea, in exchange for missiles from North Korea and great personal wealth for himself. It appears that this was done with the knowledge and tacit approval of the military government of Pakistan, and its army chiefs of staff (chapter 13). News reports indicate that Pakistan’s nuclear program was based on a network of clandestine imports from a network of proliferators personally built up by Abdul Qadeer Khan, funded by unlimited financial support from the Pakistani government, as well as from Libya and other sources. It seems clear that Pakistan’s entire nuclear weapons manufacturing program was based on a clandestine black-market of contacts with companies all over the world who produced components that could not be fashioned in Pakistan.

Pakistan does not currently produce any fighter, bomber or civilian aircraft and does not have a noteworthy aerospace research or design team. But in 1981 Pakistan imported the entire assembly line for the manufacture of a 1969 vintage Swedish designed, single engine, two seater trainer aircraft from Sweden. The aircraft, called the Saab Supporter in Sweden is assembled in Pakistan under the name Mushshak. Another trainer aircraft that Pakistan became involved in is a Chinese designed K-8 jet trainer. Current reports indicate that the trainers will be manufactured in China, and not in Pakistan.

Pakistan’s industrial sophistication today is arguably not much higher than that of Britain in the early 20th century, but Pakistan has continuously maintained, possibly for domestic consumption that it is a leader in many technologies. This pretence probably does Pakistan more harm than anyone else. Pakistani leaders, convinced by the exaggerated claims of their own countrymen have allowed their nation to lapse into a state of underdevelopment in which Pakistan is now being compared with the other countries at the bottom of the development ladder, such as Haiti and Rwanda.

On March 31st 2002, a report in the The New York Times stated:

Barely a third of Pakistan’s population is literate, Even using a very low standard, the State Department said in its most recent human rights report

Pakistan’s literacy rate ranks below that of countries like Haiti, Rwanda and Sudan, according to the most recent United Nations Development Program report. Furthermore a UNDP report in 2003 ranked Pakistan a low 138th, in a list of 174 countries (33).

Pakistan’s labor force is growing at the rate of 2.4% per year, but the number of unemployed people in Pakistan is rising at more than twice that rate - 6% (34). The Pakistan Human Condition report of 2003 says that:

…between 1998-99 and 2000-01, population increased by 6 million people (4.46 per cent), while the population of the poor during the period under review increased by 10 per cent. The report warns that population is shifting from upper poverty bands to lower ones, showing a decline in their welfare level

On February 5th 2003, the San Francisco Chronicle reported:

Pakistan’s powerful military has ruled the country for more than half of the nation’s 56-year history, fully integrating itself into every facet of the economy and draining state coffers with generous benefit plans for its officers....corrupt military officers have siphoned off more than $1.2 billion in the last 10 years to purchase such amenities as land, mansions and luxury cars, according to a recent report by Pakistan’s auditor general.

A large number of reports speak of all the economic problems that Pakistan has (35, 36, 37, 38, 39, 40) Some of these problems, regarding industries and poverty have been listed above. But many other factors contribute to the decrepit state of the Pakistani economy. Aid and loan money has been constantly misused for personal gain by the Pakistani army, army run businesses and private enterprise due to rampant corruption at the highest places. There is an extremely wealthy class of Pakistani at the top of the economic pyramid and this class includes Army Officers as well as feudal landowners - some owning as much as 45,000 acres of land. In the Punjab province, one percent of the landowners own 26 percent of the land.

One report (36) says only one million Pakistanis pay tax in a country of over 150 million people. The Karachi Stock Exchange has trading in only about 30 stocks - with over 700 other stocks listed for tax advantages. The Exchange is run by a handful of crooked brokers and scams are rampant. The same report goes on to say:

Estimates of the size of the country’s black-market economy, which includes everything from underground banking to narcotics to the smuggling of consumer goods, range up to 100% of the so-called formal sector. That ratio “is probably the most severe” of any country in the world, says Muhammad Mansoor Ali, one of Pakistan’s leading economists. “It is essentially a parallel economy.”

The number of such damning reports is enormous, and they help build up a picture of Pakistan as a country of predominantly poor people, whose number is increasing by the year as the population rises. Governing these people is a small elite of wealthy, corrupt and self-serving army officers and feudal lords who literally rule over their subjects like medieval kings. The population is kept busy with jihad, being told that India is forever planning to attack Pakistan and kill all Muslims, while the rulers of Pakistan build up their personal fortunes and protect their lucre with an army whose upper ranks are like a Mughal court, while the lower ranks are the bodyguards to protect the powerful from both external enemies and opponents within Pakistan.

No comments: