Economic growth depends on three things: accumulation of capital, human resources and technological advancement. Capital – including foreign direct investment (FDI) – accumulates where there’s political stability. FDI brings in both skilled human resources and technology. In essence, the key driver behind economic growth is political stability. To be certain, political instability kills growth. None of this is rocket science.
Over the past 20 years, China’s per capita income has grown from $959 to $10,216. The Chinese Communist Party has been in power since 1949. Singapore’s per capita income had grown from $428 in 1960 to $11,861 by 1990. Lee Kuan Yew, Singapore’s founding and first prime minister of Singapore, remained prime minister for 31 years (1959-1990). Malaysia’s per capita income had grown from $1,769 in 1981 to $4,461 by 2003. Mahathir bin Mohamad was the prime minister for 22 years (1981-2003).
Yes, political stability can be quantified with factors such as longevity of a government, number of political parties, military expenditure 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 whereas India, Philippines, Pakistan and Sri Lanka have worse political instability. China ranks first and India the last.”
Very interestingly, longevity of a regime is critical to economic growth regardless of the type of the regime. The study insists that, “In economics, the phrase ‘stability of political regimes’ is used differently than in political science. Economics is not concerned whether the regime is a democracy or a dictatorship.” Economics is not concerned whether the regime is authoritarian or not.
Pakistan, for instance, recorded its highest-ever economic growth of 11.35 percent of GDP in 1970, most probably, as a consequence of General Ayub Khan’s eleven years of political stability (a period referred to as ‘The Golden Sixties’). In 1999, Pakistan’s per capita income stood at $454. By 2007 it doubled to $908 – most probably, as a consequence of General Musharraf’s nine years of political stability.
Pakistan needs economic growth at all costs. Pakistan needs political stability at all costs. Yes, “economics is not concerned whether the regime is a democracy or a dictatorship” but I am convinced that Pakistanis want a democratic regime. Let’s say, democracy for Pakistan is a given. The real question then boils down to: Can the current constitutional arrangement deliver political stability? Answer: Our history is “the witness that testifies to the passing of time; it illumines reality, vitalizes memory and provides guidance.”
Remember, the First French Republic was founded in 1792. It collapsed and so did the second, the third and the fourth. The Fifth Republic replaced the parliamentary republic of the Fourth Republic with a new “semi-presidential, dual-executive” system of governance. In 1972, South Korea drew out 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 the fourth time.
Sustained economic growth – our only salvation. Political stability – the only route.