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INFORMATION TO USERS This manuscript has been reproduced from the microfilm master. UMI films the text directly from the original or copy submitted. Thus, some thesis and dissertation copies are in typewriter face, while others may be from any type of computer printer. The quality of this reproduction is dependent upon the quality of the copy submitted. Broken or indistinct print, colored or poor quality illustrations and photographs, print bleedthrough, substandard margins, and improper alignment can adverselyaffect reproduction. In the unlikely event that the author did not send UMI a complete manuscript and there are missing pages, these will be noted. Also, if unauthorized copyrightmaterial had to be removed, a note will indicate the deletion. Oversize materials (e.g., maps, drawings, charts) are reproduced by sectioning the original, beginning at the upper left-hand corner and continuing from left to right in equal sectionswith small overlaps. Each original is also photographed in one exposure and is included in reduced form at the back of the book. Photographs included in the original manuscript have been reproduced xerographically in this copy. Higher quality 6" x 9" black and white photographic prints are available for any photographs or illustrations appearing in this copy for an additional charge. Contact UMI directly to order. U·M·I University Microfilms International A Beil & Howell Information Company 300 North Zeeb Road. Ann Arbor. M148106-1346 USA 3131761-4700 800:521·0600 Order Number 9215025 State, class, and industrial policy in Pakistan (1947-1988) Khattak, Saba Gul, Ph.D. University of Hawaii, 1991 Copyright @1991 by Khattak, Saba GuI. Ail rights reserved. V·M·I 300 N. Zeeb Rd. Ann Arbor, MI 48106 STATE, CLASS, AND INDUSTRIAL POLICY IN PAKISTAN (1947-1988) A DISSERTATION SUBMITTED TO THE GRADUATE DIVISION OF THE UNIVERSITY OF HAWAI'I IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY IN POLITICAL SCIENCE DECEMBER 1991 By Saba Gu1 Khattak Disssertation Committee: Harry J. Friedman, Chairperson Deane Neubauer Michael J. Shapiro Robert B. Stauffer Hagan Koo Bruce Koppel iii © Copyri ght 1991 by Saba Gu1 Khattak All Rights Reserved iv ACKNOWLEDGMENTS My deepest gratitude and appreciation go to my advisor and dissertation committee chairperson, Professor Harry Friedman. Harry gave me the confidence to venture into research areas unfamiliar to me.. His trust in my abilities, and his gentle guidance made the task of dissertation writing easier. Equally important has been the constant advice and interest of Professor Robert Stauffer, who read every word of my dissertation meticulously, and always reminded me of the larger picture--the world economy. Bob also returned my drafts with his detailed comments much earlier than r expected! Professor Deane Neubauer's invaluable comments made me reconsider my ideas, sharpen them, and rewrite them more explicitly. Professor Hagen Koo's course on the sociology of developing countries spurred m~ to question industrial policy in Pakistan. His emphasis on language helped tighten my theoretical framework. Professor Michael Shapiro's courses and points of view opened new ways of seeing and questioning. Dr. Bruce Koppel provided me encouragement by giving freely of his time. r would also like to thank Professor Manfred Henningson for making his classes challenging and instructive. His influence on my thinking can be seen in the decisions I have had to make. From him r have learned the importance of taking a stand, and having hope. Professor Hamza Alavi's writings provided the fundamental guide lines for considering the case of Pakistan; equally important has been his help with providing me contacts in Pakistan during field study. v The East-West Center gave me a generous grant to pursue a Ph.D. at the Department of Political Science, University of Hawaii. Without the grant and monetary support for field study from the International Relations Program, this dissertation would never have been written. I would especially like to thank Dr. Charles Morrison, Coordinator of the International Relations Program, for his supportive ways, for his pleasant sense of humor, and advice on how to avoid tension during field study. I would like to acknowledge all my friends at the East-West Center for pruv~ding me emotional sustenance. Their interest in my research, and good-humored jokes made writing the dissertation pleasant. In particular I would like to thank Lubna for sharing hopes and plans for the future, and for always being considerate, dependable, and strong. also owe a debt of love to my three brothers, Asad, Asim, and Aemal. Their affection, jokes and unspoken understanding is something I have faith in and re1.y upon. Every member of my family has had an important role during my stay in Hawaii through their letters. Some of them I will not see again, but their memory will always stay with me. My father, I hope would have been proud of me had he been here. last, I would like to dedicate this dissertation to the two pillars of my life--my mother, Sultana Khattak, and my uncle, Abbas Khattak. My mother, for her faith in me and for taking pains with me from my earliest schooldays. And my uncle, whose constant interest in my personal and professional development always makes me aspire for the best. vi ABSTRACT This dissertation explains the nature of politics in Pakistan by investigating the juxtaposition of class and state, and how it affects the nature of economic development. An analysis of Pakistan's industrial policy serves as a vehicle for studying the relationship. The main body of the dissertation emerges as a comparative study of the Pakistani state in terms of a strong/weak state in particular contexts. Within this approach the nature of industrial policy is seen as a specific outcome of (1) state dependency and state power; (2) strengths and needs of the dominant classes; and (3) a type of economic development that emerges. Thus, public policies are influenced by class and state relations which, in turn, are mediated by the conditions and consequences of economic development. This study traces the developments in Pakistan's class structure and the corresponding changes in the nature of the Pakistani state. It asserts that the interaction among state, class, and development dynamics creates conditions whereby subordinate classes can break out of their position and impact politic3, policy, and the nature and role of the state. The role of other states and non-state entities is equally important as demonstrated in Pakistan by the congruence of ~Jorld Bank "advice" with the conservative policies promoted under the impact of Middle Eastern financial support. The following pages provide concrete analysis of how Pakistani politics and Pakistanis course of economic development have been shaped by the dialectical relationship among class, state, and economic development. vii Finally, this study of Pakistan's industrial policy asserts that the choice of Import Substitution Industrialization or Export Oriented Industrialization strategy by itself cannot be the panacea to Pakistan's problems. In Pakistan, a strong state (distinctly and qualitatively different from an authoritarian state) is needed to reflect and uphold subordinate class interests. viii TABLE OF CONTENTS ACKNOWLEDGMENTS . iv ABSTRACT vi CHAPTER I INTRODUCTI ON Specific Research Aims . 2 Pakistan and its Industrialization as an Historical Problematic 6 Background to the Problem . 10 Industrial Policy in Pakistan . 12 Organization ..•......... 13 CHAPTER II TOWARD AN APPROPRIATE MODEL FOR CONSIDERING THIRD WORLD STATES: A LITERATURE REVIEW 17 Major Debates Within State Theory •. 17 Neo-Marxist and Statist Approaches 19 Marxist Perspective on the State. 21 The Question of State Autonomy •. 23 Instrumentalism .•..... 23 Structuralism •...•. 25 Bonapartism .•....... 28 Third World State Theory ..•.•.. 31 Hamza Alavi's Postcolonial State Model 32 Critique of Alavi's Postcolonial State Theory •.••.....•. 35 Class Theories ..•..... 40 CHAPTER III HISTORICAL ROOTS OF POWER STRUCTURE IN PAKI STAN ....•......... 45 Evolution of Identity and Difference: Indian Muslims. •...••..•... 45 Partit~on of Bengal and Creation of the Muslim League. ..•..•.... 47 Education in India. ..•...... 49 British Educational Policy in India . 52 Evolution of Dominant Classes in Pakistan. 55 The Landed Class . • . • • . • • 56 The Military. •.....•..•.. 60 The Civil Bureaucracy • . • . • . • 61 Overview: From Civil to Military Domination in Pakistan .• ...........• 63 ix CHAPTER IV GENESIS OF PAKISTAN 70 Political Problems in the Early Years. • 71 Immediate Problems of Partition of India (1947) ••.•••..•. 71 Class and State Formation in Pakistan 74 Class Basis and Politics of the Muslim League. •.••.•. 76 Bureaucratic Management •••. 81 Development Planning and Industrial Policy 84 Government Po 1icy Enunc i ation • 84 Creation of Organizational Base 88 1. Development of Infrastructure. • . • • 88 2. Setting up Credit Institutions • 90 3. Trade Policy and Controls • • • • 91 Premises about Industrialization. •. 92 The State and Bureaucracy ...•••• 94 Economic and Political 'Rationale of lSI. • . 95 Class and State. ••.•.•.•.• 97 Conclusion •••••• 0. ••••••••••• 99 CHAPTER V PAKISTAN'S INDUSTRIAL POLICY STRATEGY (1947-1959) ••••••.•••.•• 102 lSI: Theoretical Rationale, Justification, and Prerequisites .•.. ....•.••. 103 Instruments of Economic Policy . • . 107 The Tax System ......•.•.•• 108 Imports Licensing and Export