Understanding Pakistan Project

Athar Osama July 23rd, 2007

By: Athar Osama

Socio-Economic and Political Reforms of Ayub’s Era-I (1958-62)

With the power firmly in the hands of the Chief Martial Law Administrator, he set upon the task of creating country of his vision. Feldman (1967, p. 44) describes the state of the President’s mind in the following words:

“He knew that he was expected to collaborate unstintingly with a government confessedly authoritarian, claiming to derive its sanction from the necessities of a desperate situation and promising, unequivocally, to justify itself by a resolute purification of public life, by a program of indispensable reforms, and by adoption of a fresh constitution which would adequately and appropriately satisfy the citizen’s right to speak and participate in his country’s affairs”

Ayub Khan adopted an essentially technocratic mode of government depending upon a number of committees and commissions to help in policy formulation. In all, the Martial Law Administration, during its entire tenure, set up as many as 25 different commissions to deliberate on policy matters within a wide variety of domains. These included:

- Company Law Commission                            - Constitution Commission                   - Credit Inquiry Commission
- Education Reform Commission                      - Federal Capital Commission              - Finance Commission
- Food & Agriculture Commission                    - Franchise Commission                        - Jute Inquiry Commission
- Land Reforms Commission                            - Land Revenue Commission               - Manpower Commission
- Law Reform Commission                               - Maritime Commission                        - Medical Reforms Commission
- Pay & Services Commission                           - Police Commission                              - Press Commission
- Price Commission                                            - Scientific Commission                         - Social Evils Commission
- Sport, Culture, Art, & Literature Com.         – Sugar Commission                             - Taxation Inquiry Commission
- Textile Inquiry Commission

The sheer scope of the subjects that these commissions dealt with makes one wonder about the volume of policy work carried out in the early years of Ayub Khan’s era. It also makes one think as to how, without carrying out these necessary reforms in a whole variety of different areas, the country was being run in the preceding nine years of its existence. Clearly, not every one of the commissions formed during Ayub Khan’s regime undertook work of equal importance, nor did they achieve similar results, but the fact that the government was able to devote its attention to all these areas cannot escape one’s attention. 

Pakistan’s First Land Reforms

First of the most significant of the reforms from the new Martial Law government was announced on 18th October 1958 through the formation of the Land Reform Commission under the chairmanship of Governor of West Pakistan (Feldman, 1967, p.8). Within three months time, in January 1959, the Commission completed its work and delivered a report which was unanimous except on one particular matter, namely, the maximum area of land which should be permissible for an individual to retain and own. The Commission had been asked “to consider problems relating to the ownership and tenancy of agricultural land and to recommend measures for ensuring better production and social justice as well as security of tenure for those engaged in cultivation” (Feldman, 1967, p. 56). The Commissions work specifically related to West Pakistan—with East Pakistan already having gone through several instances of land reform during the pre- and post-partition time.

While the Land Reform Commission explicitly stated in its report that it had not been asked to suggest measures to break oligarchy rooted in larger estates, but it admitted that its proposals, if implemented will achieve that result. It was no secret at that time—even now—that landed interests in West Pakistan had controlled a substantial portion of the seats (28 out of 80 in 1956) in both provincial and national chambers and exerted considerable influence as a result. Their influence had only increased as a result of Muslim League’s co-opting of Punjab’s landed elite to establish a government in the province. Keith Callard has this to say about these landed interests:

“In Pakistan, politics is made up of a large number of leading persons who, with their political dependents, form loose agreements to achieve power and maintain it. Those who lack fixed ideas but who control legislatures, money or influence have tended to prosper in political life” (Callard, 1955, p. 67)

The Land Reform Commission’s findings—which were implemented through a Presidential Order—provided that no person could own more than 500 acres of irrigated land, or 1000 acres of non-irrigated land plus, where necessary additional area as might be necessary to give the equivalent of 36,000 produce index units. There was some provision of making gifts to members of family but that could not exceed 18,000 produce index units. Land in excess of this was to be surrendered to the government in exchange for compensation in the shape of redeemable bonds bearing interest at four percent. Land held by way of a jagir was to be resumed by the government without compensation.

Following the publishing of these regulations, some 2,547,000 acres of land was surrendered by 902 landowners (including 147 jagirdars) involving a sum of Rs. 75 million. This, Feldman (1967, p. 59) notes was far less than what was originally expected (around 7.5 million acres by 5000 landowners) Despite the best of intentions, these land reforms have been described as “window-dressing” or “cosmetic”, at worst, and inadequate, at best (Khan, 2001, p. 131) Influential landlords found various ways to get around the regulation, including, having their land assessed at very low produce index values thus retaining, in some cases, several thousand acres per head at the end of the reforms. In other instances, these landlords had their land transferred ante-dated, to their family members thus escaping the maximum limit of land tenure stipulated in the regulations (ibid). Zaidi (2006, p. 35) also points out that considerable amount of land that was declared was of poor quality (uncultivable) such as hills and barren terrain and the owners actually benefited by handing over this land to the government in exchange for the four-percent bonds. Mahmood Hassan Khan, in his Underdevelopment and Agrarian Structure in Pakistan (1981), provides the following figures on Ayub’s Land Reforms (p.35):

Province                   No. of Declarants            Area of Affected          Area Retained    Area Gifted   Area Resumed
                          All     Unaffected    Affected    Decalarants (acres)        (acres)               (acres)             (acres)

Punjab            2,152       1,844          308                3,637,648                    2,308,657          288,715          1,044,276
Sindh              2,388       1,993           395               1,487,253                     655,384             169,803            662,066

Pakistan         5,064        4,301         763               5,478,945                     3,077,738           497,419           1,903,788      

About half of this land gained by the government was distributed to landless farmers by March 1964 (Feldman, 1967, p. 59).  Zaidi puts that figure to have reached even later, by 1967, and notes that only 20% of this land actually went to landless tenants and the remaining being auctioned to rich farmers and civil military officials (Zaidi, 2006, p. 34).

While the effect of land reforms on Pakistan’s agriculture may have been limited, Ayub Khan, having realized the importance of agriculture to the economy, also initiated very focused agricultural reforms aimed at bringing about a “green revolution” within the country. In 1960, the Salinity Control Project was launched. Ayub Khan also called for a “masterplan” to be ready by May 1961 for tackling the agricultural problems. Fertilizer plants were installed and farmers were encouraged to use fertilizer in their crops. A Food and Agriculture Commission was established to look at the state of the industry and agricultural credit was given special priority. An agricultural crash program was launched in 1960 with an aim to help the country achieve food sufficiency in two years! (Feldman, 1967, p. 66) Finally, after 13 years of delay, the water problem as somewhat resolved when Ayub Khan signed the Indus Basin Treaty with Nehru through the mediation and final guarantee of the World Bank.  The second five year plan (1960-65) also paid considerable attention on agriculture.

Early Economic Policy Reforms

On November 1, 1959, the President announced Martial Law Regulations aimed at controlling the prices of certain imported goods, goods manufactured in Pakistan, and food grains imported from abroad. The goods included in this list were basically goods of everyday usage that hurt the purse of the man-in-the-street the most. The government did not try to regulate the price of everything because, as the President noted, it was the belief of the government that trades should charge fair prices for their produce anyway. In any case, if that “belief” was note enough, the sword of Martial Law Administrations against hoarding and profiteering were there to ensure compliance. The traders and shopkeepers were all too happy to show their loyalty and righteousness to the Martial Law authorities and displayed placards that asked shoppers to bring any “inadvertent” discrepancies in prices to their notice.

A ban was also imposed on the buying and selling of import licensing for the latter had become a major vehicle for distributing political patronage in the prior administrations. In January of 1959, an Export Bonus Scheme (EBS) was launched that provided for an incentive to export goods. The exporter of any good from Pakistan became eligible to receive a voucher entitling him to an import license equivalent to a certain value of the exported commodity (Zaidi, 2006, p. 98). These values and the goods eligible for import were varied over time and the vouchers were freely available in the market at a premium (between 80-170%) on the face value. While the merits of this scheme had been debated ever since, its value, at the time, was to create an incentive for the people of a country that had been an inadequate producer (Feldman, 1967, p. 48).

The EBS has often been taken credit for and lamented by both sides of the politico-economic divide, with the former claiming that it was largely responsible for Pakistan’s high growth rates during the 1960s and the latter claiming that EBS put Pakistan onto a wrong path of industrialization. There are several impressive statistics that can be quoted as a partial indication of the success of this scheme. For example, as a measure of growing industrialization and manufactured exports, the share of raw jute in Pakistan’s exports decreased from 60% (1958) to 20% (1968/9) and cotton and jute textiles increased from 8.3 to 35% during the same period and export of other manufactures increased from 2 to 20% (Zaidi, 2006, p. 99). An Asian Development Bank study also shows that large-scale manufacturing growth in Pakistan increased from 8% p.a. between 1955-60 to 17% p.a. between 1960-65. Others have found similar economic measures to have registered very healthy growth rates during this time (ibid). In 1965, for instance, Pakistan’s manufactured exports were more than South Korea, Turkey, Thailand, and Indonesia combined!

In addition, another one of the earliest economic measures adopted by the Martial Law regime was with an objective of gaining taxes on undisclosed incomes and foreign exchange balances held abroad. The Martial Law Regulations made it possible for anyone who, for income year 1953-4 and any subsequent years, filed returns which he had a reason to believe were incorrect could, before 31st December 1958, file revised returns showing true income and no questions would be asked. According to MLR 44, The delinquent would be required to pay to the government thirty-one percent of the excess income disclosed—a rate that was to go up for failure to pay within 30 days. Similarly, MLR 45 enabled owners of foreign currency balances to surrender the currency and get it converted into Pakistani rupees. These regulations were received by businesses with skepticism and suspicion for the monies involved could have been substantial and there was not guarantee that the government will honor its commitments. The results were mixed, at best. The government collected a sum of Rs. 24 crores by way of taxes on excess income and hidden wealth amounting to Rs. 134 crores.

While the immediate benefit to the government through tax accrual may have been limited, speculates Feldman (1967, p. 53), the “money whitening” effect may have been substantial for by allowing a few large families with substantial black money holdings to bleach their money, it allowed the money back into circulation and available for investment within the country. This was also generally in line with the capitalist nature of Ayub Khan’s economic and industrial policies (more on this later) under which the government facilitated—perhaps even incubated—the creation of necessary industrial and commercial infrastructure by a very small number of business families within the country.

Political Accountability Reforms

The Martial Law administration was very mindful of the practices of bribery and corruption among public officials and public servants—these being among the charges leveled against political leaders at the time of the proclamation of the Martial Law. MLR 62, issued in January 1959 provided for fourteen years rigorous imprisonment for public servants obtaining, or trying to obtain, material advantage (bribe) from their positions. MLR 65 in March 1959 made it compulsory to report any cases of bribery, smuggling, and black marketeering. Investigative committees were established to look into allegations against high-ranking government officials and by June 1959, fifty-seven committees adjudicated upon and found as many as 1662 Central Government Officials in Class I, II, and III guilty of one or more of the following: misconduct, corruption, reputation for corruption, or inefficiency (Feldman, 1967, p. 74). Though, these were very minor percentages of officials to be affected from the law (i.e. 5.0% of 2800 Class I officials, 4.0% of 5,500 Class-II officials, and 1.5% of 87,000 Class-III officials), it did have a psychological effect on the surviving ones. It also calls into question the claims about the extent of corruption in civil service either/or also the screening process used to convict corrupt officials.

In March 1959, the Martial Law administration published the Public Offices (Disqualification) Order (PODO) patterned after the now defunct—and often misused—PRODA law that provided for public office holders found guilty by a two-person tribunal to be disqualified from holding public office for up to fifteen years. Realizing that PODO deliberations can be lengthy and does not include people who were members of legislatures—only those who held public office—another order, the Elective Bodies (Disqualification) Order (EBDO) was created. Three tribunals were created to inquire into allegations of misconduct as referred to them by the government. Unlike PODO, the person appearing before the EBDO tribunal was not afforded the assistance of counsel and was required to appear personally. The purpose of EBDO clearly was a summary cleansing of the country’s political landscape of all those against whom even a slightest charge of misconduct could be investigated. Persons convicted o EBDO investigation were required to retire from public life until 31st December 1966 and make good any loss to the national exchequer that their actions might have caused. A “relaxation” in the EBDO proceedings was that it allowed for the possibility of voluntary retirement (until 31st December 1966) in which case the inquiry against the public official was to be dropped.

While definite figures do not exist, In 1960, in East Pakistan alone, as many as 3000 people seemed to have faced this regulation (perhaps 6000 or more overall)—majority of whom either opted to retire or were disqualified (i.e. EBDO-ed). Evidence suggests that majority of the people simply chose to retire rather than face the difficult questions of an EBDO tribunal. Thus, in a fairly systematic and complete fashion, the Martial Law administration cleared the political field for any likely opposition to the Presidents future ambitions.

Other Social Reforms

President Ayub Khan was also an enthusiastic “social engineer”, albeit one seeking genuine improvements in the social habits of his countrymen (and women). A Board of National Reconstruction was established with President Ayub as its head and was tasked with inculcation of ethical and civic values; the development of character-pattern; a raising of the culture and intellectual level; assisting women to overcome social handicaps; encouragement of healthy national spirit; the elimination of sectarianism, regionalism, and provincialism, and the teaching of simplicity, frugality, and good taste in living standards (Feldman, 1967, p. 84).

It is hard to imagine how cosmetic efforts like these aimed at mass social engineering could be successful for the country was certainly not cleared of sectarianism, regionalism, and provincialism during Ayub’s era. While these emotions may have hidden from public view for the fear of a reprisal by Martial Law authorities, they only grew in their intensity over time.

In June 1959, an all-out austerity drive was launched under the slogan “austerity is our national style” with the President’s wife and other notable ladies giving up cosmetics and foreign cloth and buying Pakistani cotton. Once again, austerity drives have a long history in Pakistan with every Prime Minister or President preceding and succeeding President Ayub having appealed the people to “tighten the belt” and observe austerity for the sake of the nation.

One social issue on which considerable progress was made, though, was that of refugee rehabilitation and disbursement of refugee property. On January 29, 1959 proprietary rights to 1,420,000 allottees of rural land in Punjab were issued. In both Karachi and Dacca, colonies of cheaply constructed dwellings were initiated and in Karachi Landhi Industrial Estate, for instance, within a record time of five months 15,000 dwellings were completed. The country also made some worthwhile progress towards allotment of refugee property.

Several legislations aimed the country’s industrial environment, including the new labor policy, were also announcement in this early period of Ayub’s tenure. A Commission to establish a federal capital near Rawalpindi was set up. Central Institute of Islamic Research was set up to “define Islam in terms of its fundamentals in a rational and liberal manner”. A Law Commission comprising “representative[s] of the old learning as well as the modern enlightened approach” was established to survey Pakistan’s legal heritage in the light of requirements of modern state. And a Commission on National Education was established to inquire into the health of the education system in the country.

The amount of policy development and execution undertaken by the Ayub government in the first few years of its existence is indeed very impressive. On almost every important aspect of the country’s socio-economic and political life, important analytic work was being undertaken and legislation written to support the needs of a forward looking nation. This was clearly in stark comparison with the political infighting and bickering that the country was used to for the first nine years of its existence and was thus welcomed by most. It is no wonder then that most Pakistanis who lived during Ayub’s generation fondly this period as a golden period in the country’s history and him as a reformer and one of the most dynamic leaders the country ever got.

National Security and Foreign Policy During Ayub’s Era-I (1958-62)

While Pakistan had finally begun to make some progress on its development agenda after the barren 1950s, Pakistan’s foreign policy and the national security implications of it had remain more or less stagnant. Pakistan had not made any worthwhile progress on Kashmir Issue since the agreement, in the early 1950s, between Liaquat and Nehru. Over the years, starting from Liaquat’s own life itself, India’s position and posture on Kashmir had only deteriorated. Not only had it started refusing to comply with United Nations’ resolutions but also regarding arrangements for a plebiscite in the state. Soon after acceptance of the UN Commission on India and Pakistan (UNCIP) resolutions, Nehru had commented that “he would not give an inch. He would hold his ground if Kashmir, India, and the whole world would go to pieces” (Sattar, 2007, p. 27).

In a December 1952 report UN Security Council (UNSC) representative Frank P. Graham suggested that Pakistan and India reduce their forces by 3000-6000 and 12000-18000 respectively-a proposal that Pakistan accepted but India rejected. In 1953, Mohd Ali Bogra and Nehru agreed that the Kashmir question “should be settled in accordance with the wishes of the people of that State” and that the best way to do it was through a “fair and impartial plebiscite” (Sattar, 2007, p. 29). Soon after, though, India’s leader went back on his words on the pretext that the military pact between Pakistan and United States “will affect the major questions…more especially the Kashmir Issue” (ibid). It noted that the contemplated pact between US and Pakistan constituted as “qualitative change in circumstances” that absolved India from its UN Security Council Resolution obligations. In short, the issue continued to fester through the 1950s with little or no hope of a peaceful resolution.

Pakistan’s search for security against increasingly hostile India also pushed firmly pushed it in the Western camp with the signing of South East Asia Treaty Organization (SEATO) in 1954 and Central Treaty Organization (CENTO) or Baghdad Pact in 1955 thus further alienating a “non-aligned” India and it’s senior partner, the Soviet Union. When Ayub came to power, Pakistan was firmly in the Western Bloc and was looking towards the United States for mediation in helping resolve the Kashmir Issue. In 1961, Ayub visited United States on the invitation of President Kennedy “to exchange views on matters of immediate concern” and raised the Kashmir issue at that occasion. Kennedy promised to discuss the issue with India and, if unsuccessful, to support Pakistan in UNSC (Sattar, 2007, p. 63). Kennedy’s attempts to convince Nehru four months later were frustrated.

On April 11, 1962, Pakistan once again moved the Kashmir issue to the UNSC expecting US support for its cause. The United States, due to political expediency and to keep India happy, refused to extend its promised support stating that “India was of the view that it was not feasible to implement the resolutions as so much time as elapsed” (Sattar, 2007, p. 66). When the matter came before the Security Council, India repudiated its early commitment to a plebiscite. When the resolution came for a vote before UNSC, it was supported by seven out of nine UNSC members but vetoed by Soviet Union.

This lack of progress and Pakistan’s growing frustration with the UN Security Council process was to have major implications for Ayub’s regime and Pakistan-India relationship for the future (to be discussed later).

Ayub’s “Basic Democracies”: A System Suited to the “Genius” of the People

Ayub Khan, in his characteristic relentlessness, instituted political reforms effective 27 October 1959—a full year after assumption of power—under the Basic Democracies Order of 1959. Ayub had already pointed out the un-workability of western style parliamentary democratic institutions in Pakistan because of the lack of conditions amenable for the nourishment and growth of such systems in Pakistan. He added that “the choice before Pakistanis was a simple one as past experience revealed—to either wait for ideal conditions to prevail, or to study their own needs and work out a plan based on the realities of their environment” (Khan, 2001, p. 132). The Basic Democracies system, in Ayub’s view, was just that. He said:

“The Scheme of Basic Democracies has been evolved by us after a careful study of the experience of other countries and of the special conditions prevailing in our own land. There is no need for us to imitate blindly the type of democracies to be found in other countries. We have to work according to the requirements of our nation and the genius of our own people”. (Khan, 2001, p. 132).

In essence, Basic Democracies was a system of local government. The term itself signified the smallest political unit within the system of local government. Basic Democracies was a pyramidal scheme of government enable people to directly elect to their union councils people they knew, who, in turn, elected members at the higher level of governance (Union Councils, Town Committee, Thana and Tehsil Council, District Council, Municipal Committee, Divisional Council, and Two Provincial Development Advisory Councils) reaching up to the President himself. In total, the country had 80,000 Basic Democrats elected on the basis of adult franchise. The Union Council comprised several villages (or sections of towns and large cities) with populations up to 10-15,000 people. The Union Councils were given a range of functions—mostly of developmental and civic nature—that they were to perform on an ongoing basis. Similarly, each higher level of organization, had a series of compulsory and volunteer functions defined for itself.

Elections under the Basic Democracies system were held throughout East and West Pakistan during late 1959. Ayub Khan, for his part, made a whirlwind tour of the two provinces—traveling by train named Pak Jamhuriat Special—to popularize his scheme. While these local governments thus elected did some useful work, they are largely seen, in retrospect, as providing legitimacy to the martial law regime. These basic democrats were turned into an electoral college for the President. Under a Presidential Order in 1960, these basic democrats were required to vote, through a secret ballot, on the question:

“Have you confidence in President Field Marshall Mohammad Ayub Khan, Hilal-i-Jurat?”

A vote of yes was deemed as a mandate by the people for Ayub Khan to develop the second constitution of Pakistan and would also be automatically elected to the office of President of Pakistan for the first term under the Constitution developed by him. In a Referendum held in February 1960, in the absence of any alternative, and with their fates resting on the continuation of Ayub Khan’s experiment, 75,283 Basic Democrats (95.6%) replied in the affirmative. Thus Ayub Khan not only got himself elected President but also assumed a mandate to make a constitution of his own liking. (Khan, 2001, p. 133).

With this we come to the end of a highly fruitful period of policy and law-making in Pakistan. We also now begin the second phase of Ayub’s Rule—as a uniform-bearing head of civilian government under the Constitution of 1962—from 1962 to 1965 and onwards and his successes and failures, adventures and misadventures, and the continued and largely illusive search for political legitimacy.

• Ayub Khan , Foreign Policy , Kashmir , Martial Law , Economics , Society & Culture , Politics , 1958-1962 , Military , Education , History in a Nutshell