"Autonomous domestic politics and robust national institutions can combine in a virtuous circle with economic policies to create economic success." -writes Gautam Sen.
The dramatic contemporary transformation of South Asia is mainly a story about the rise of India. The economy of Bangladesh has also proved unexpectedly resilient although there are now some troubling signs of its vulnerabilities, partly owing to inadequate transparency of official data. Nevertheless, the experience of India and Bangladesh highlights the importance of the interaction between a sovereign open society and associated political institutions that can facilitate the likelihood that constructive economic policies can be adopted. The issue of genuine sovereign national autonomy and political openness are interconnected although the former attribute seems to be of paramount prior importance.
Pakistan and Sri Lanka, and to a lesser degree Nepal, underline how easy it is for a society to become dysfunctional owing to political impasse and inadequate national institutions. The elephant in the room of national autonomy and the unfailingly negative impact of foreign domination over national societal outcomes cannot be overstressed and the contrasting fates of India and Pakistan in striving to uphold it. Its absence has proved especially consequential for Pakistan, established as a British vassal, to be taken over shortly after its creation by the US in the mid-1950s and its severely truncated national autonomy, now vacillating helplessly between two overlords, the US and China.
No country is immune to malign adversarial influence from abroad, even the very ones from which such negative consequences mostly emanate against weaker countries. In fact, the phenomenon is so universal that it hardly needs elaboration. For reasons not far to seek, there is understandable reluctance by national leaderships to admit the scale of the negative impact. Neither the country, which is the source of impact nor the one undergoing its negative consequences would wish to confess the embarrassing truth. The Ukraine war is one salutary example of the extent of the extraordinary potency of such harmful influences, with all NATO countries willing to sacrifice their economies and social wellbeing to conform to the most improbable of US political ambitions in Europe. Of course countries like the US and China also complain of intervention by each other in their respective societies, underlining the universality of foreign intervention in sovereign countries.
In South Asia, the extent of injurious adversarial foreign influence is no novelty, but the degree of its success varies significantly between countries and that seems to matter a great deal. A country like India is infiltrated by openly hostile third parties like the Anglo American duo and China. However, the attempt by them to bring India completely to heel is an ongoing rather than achieved outcome. Bangladesh is also the object of hostile Anglo America and Sino-Pak attention though its incumbents have mostly managed to resist the most egregious attempts at subversion so far, with some Indian help. However, the project to subvert Bangladesh has now gathered pace, in part to discomfit its Indian political patrons and the eventual outcome cannot be predicted confidently.
The fact that neither of these countries have succumbed overwhelmingly to what is blatantly neo imperialist interference is a significant factor in their relatively good economic progress in recent history. It shows that, whatever the imperfections and shortcomings, some no doubt major, it is possible to implement sensible economic policies when domestic political and administrative institutions remain largely autonomous and, importantly, answerable to an electorate. In addition to keeping at bay the potential negative impact of hostile foreign meddling, the ability to manage domestic divisions also influences societal outcomes resulting from the adoption of effective national policies. Of course, adversarial foreign powers use such internal domestic political and social divisions to achieve their own nefarious purposes. Yet, both India and Bangladesh have managed to retain sufficient national autonomy by limiting the extent of foreign interference. This has enabled them both to embark on their current path of successful economic policies with demonstrated associated achievements.
In the end, it shows that an autonomous domestic politics and robust national institutions can combine in a virtuous circle with economic policies to create economic success. Good economic policy is not rocket science but it needs a favourable sociopolitical environment to do its work effectively. The governments of Sheikh Hasina and Narendra Modi are examples of this opportune reality. The Indian example is somewhat different because of the country’s size and complexity and the difficulties in organising a sufficiently large political coalition to embark on the often challenging policies necessary for sustained long term economic growth. There is generally a permanent struggle between allocations for investment that catalyse economic growth and immediate demands for consumption. In addition, there is the vexatious problem in a poor country of the short-term costs associated with change that policies will often require. It is Narendra Modi’s singular historic achievement that he has managed to navigate this enormous conundrum.
The three other sizeable countries of South Asia illustrate the grim political missteps that dictate economic failure and the catastrophic wider sociopolitical consequences that usually accompany it. The first two, Sri Lanka and Nepal, share similar quandaries that significantly account for their national impasse. Sri Lanka happens to be much further advanced along the trajectory of national crisis than Nepal though the latter is also displaying some similar potentially perilous symptoms of disorder. Both are victims of chronic domestic political sclerosis underscored by a lack of national societal consensus that has produced a rather dysfunctional political class. Sri Lanka also managed to fall into a debt trap, in part because of deep societal divisions. Its politicians sought to overcome them by using foreign loans to bribe the electorate without taking into account the longer term result of oversized foreign debt. Nepal too is facing hard choices about its foreign indebtedness and the prospect of a similar exposure to Chinese loans looms for it.
Pakistan is a textbook example of the results or foreign interference in the politics of a region although there are others too, like Iraq and Libya, whose fate has been comparable owing to destructive imperialist intervention. Pakistan was primarily established by Britain to protect its geopolitical interests against the perceived threat of Russian incursion from the north. The religious basis of its creation was a cynical cover to rationalize Pakistan’s establishment although a very potent one. Within a decade of its creation, Pakistan was recruited into the US Cold War project in Asia. The subsequent trajectory of Pakistan has been US collusion to install and underwrite military dictatorships to rule the country. Pakistani democracy was judged potentially unreliable for serving US geopolitical goals. Although civilian governments were occasionally allowed to wield nominal political power they only existed at the forbearance of army headquarters.
The sole ideological justification for the militarization of Pakistan, its polity, society and indeed it economy, to a shocking degree, was the alleged military threat pose to it by India. The specific issue fostered by Pakistan’s Anglo American allies to legitimize the primacy of the military over Pakistan was the supposed dispute over Kashmir. In the final analysis, the dispute over Kashmir mostly accounts for the fate of Pakistan and the fact that it has effectively remained a military dictatorship in some shape or form. The need for the Pakistani military establishment to sustain continuing justification for its overwhelming domination of Pakistan’s polity, economy and society has now resulted in blatant vassalage to China to service itself.
Quite clearly, the militarization of Pakistan has been the reason for the descent of this artificial political construct into the chaos that is now starkly visible. Since power tends to corrupt and absolute power tends to corrupt absolutely, the monopoly of power of the military establishment in Pakistan has produced a counterpart of an unsustainable economic situation. There has been no real democratic check on the worst excesses of the military establishment and Kashmir has been sold to its people as the imperative justification for the enduring primacy of its institutionalization. A consequence of military rule has been gross economic mismanagement of the national economy, masked for long by successive infusions of foreign credit. The debts incurred inevitably dried up largely because Pakistan could no longer contemplate eventually repaying the foreign loans incurred.
At bottom, thoroughly corrupt economic policies that facilitated plunder and prevented development are the real reason for Pakistan’s current insurmountable societal and impasse. The final responsibility for Pakistan’s unenviable fate is essentially due to its national obsession with Kashmir that has validated the monopolization of power by an incompetent Pakistani military establishment. Yet, the grim truth is that Pakistan was created as a vassal state and has always remained one. It is currently undergoing a tragic transition from one imperial overlord to another.