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Economies and Political Ideologies of Democratic vs Welfare States

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The article focuses on economic impacts of the political ideologies used by Muslim welfare states and market economies of constitutional democratic capitalist nations. It suggests that recent actions of TTP (Tehrik-Taliban-Pakistan), TMQ (Tehrik-i-Minhajul Quran headed by Dr Muhammad Tahirul Qadri or TQ), the army and political establishment may be contributing to internal destabilization of PK (Pakistan). The destabilization may be detrimental to on-going peace process in South Asia. The following topics are presented.

  1. Rocky Peace Process
  2. Youth in Welfare States
  3. Welfare States Economy and Institutions
  4. Dynamic and Static Political Ideologies
  5. References and notes: star (*) means see references and notes


Rocky Peace Process 

The killing of Pakistan and India soldiers starting Jan 6, 2013 on both sides of LoC is fueling war hysteria in South Asia and making it harder for the peace process to remain on tracks. Politically it is a murky situation. Kamran Shafi* in a sensible PK view expressed his apprehensions of the sudden eruption of hostilities. Praveen Swami* an Indian news reporter offered a credible explanation of what may have precipitated the current hostilities. Prof Pervez Hoodbhoy* observed that the army is facing a quagmire due to actions of TTP. Conspiracy theorists on both sides have ignored the PK internal security problems and blamed the other side for continued hostilities.

Jingoists in both nations are actively undermining the on-going peace initiatives. The jingoists should be put in place by ignoring them with contempt they deserve. It is for political establishments to establish mutually agreeable solutions and order the armies to cease hostilities across the LoC.

The conflicts in part are fueled by two radically opposed political ideologies at play in South Asia. PK political ideology promotes war or jihad against all those who follow other than Salafi ideology. It also promotes PK as a welfare state. PK army claims as the army of God it is for protecting ideology of Islam. TTP claims it is the true army of Allah and the constitutional democratic PK is a kefir state. TTP is for restoring Sharia in PK. The quagmire for the army is how to protect the constitution of PK, minimize bloodshed and also to keep religious non-state actors away from internal destabilization.

PK is a victim of home grown terrorism unleashed by exclusivist Muslim sects dominated by Taliban such as TTP*. There are 72 Sunni and equally large number of Shea sects in PK engaged in some form of terrorism. Prior to 1970 most PK Muslims followed Sufi sect, which was a relatively progressive inclusive sect. That changed once Dictator Zia introduced Islamization of PK using Saudi Wahabi interpretation of Islam. Infusion of Saudi money for more than 40 years has transformed many Sufi establishments into radical conservatives.

TMQ has started a movement to revive pacifist Sufi traditions. Actions of TTP and other religious non-state actors are undermining the peace in South Asia.

Youth in Welfare States 

Welfare states have poor educational infrastructure to develop human resources with skills globally in demand for wealth generation. PK has an estimated 100+ million youth, mostly lacking skills for generating wealth. Presenting a picture of contemporary PK is not every journalist’s cup of tea in a country that is in grips of terror masters or non-state actors and the active and retired army brass. It took, I believe, unusual courage for Masud Alam* to present observations on the state of contemporary PK youth.

It is an impressive article that explains what may happen if PK youth could enjoy life enough to love and value it. Israelis are used to hearing Palestinians say that “we love death more than you (Israelis) love life”. The problems of PK and Palestinian youth represent a symptom of some mental problem created by Salafi clerics.

There is a reason to believe that something is wrong with a culture that does not make room for joy and love. Quoting a famous Beatle, John Lennon:

“You can live a lie until you die / One thing you can’t hide is when you’re crippled inside.”

Youth are radicalized by Salafi ideology and steered to take arms. Military jobs lure Pothohar Punjabi and tribal Pathan youth. All other youth are targeted by numerous non-state actors for terrorist activities to gain political power and money. To escape boredom and make money some youth turn mercenaries by joining terrorist non-state Taliban organizations co-linked to al Qaeda. Most youth not inclined to terrorism live a life of boredom described by Masud Alam.

Welfare States Economy and Institutions 

Judging from what has happened to USSR and the US in our lifetime, I say, a welfare state is a recipe for maintaining and encouraging an attitude that suppresses desire to generate wealth needed to improve quality of life. Welfare state ideology induces boredom in population.

In USSR before 1991 alcoholism was rampant; there was no incentive for wealth generation. The state’s huge armed forces engaged in territorial expansions were depleting wealth at an alarming rate that led to its implosion.

Drug use in PK is rampant. PK economy is anemic at best and reliant on foreign aid for sustenance. Khurram Husain* has discussed most obvious reasons for anemic PK economy. Khurram Husain explained that to be sustainable the PK economy like that of Egypt and many other Muslim nations is heavily dependent on foreign assistance.

Muslim welfare states, especially societies in Arab lands have adopted regressive political ideology to keep the nation as a whole backward. Poverty does not encourage upwards mobility in Muslim societies creating conditions for youth to rebel. In Arab nations the restless youth instigated Arab Spring* movement.

Political institutions of PK except the army are weak. Judging from failures the army has logged in during last 65 years it is fair to state that the army in reality is an organization. Organizations fail, institutions don’t. Without stronger institutional framework and better governance, PK economy is likely to stagnate.

The link between institutions and economics is weak. Judging from its performance, the PK economy is far from extractive. An economy is extractive if it is resource-based economy, dependent on harvesting or extracting natural resources for sale or trade. PK has abundant supply of minerals, estimated at more than a trillion dollars but it lacks political stability, skilled human resources and entrepreneurs willing to develop mining for export markets. PK government needs to stabilize the country by eliminating jihad-terrorism dominated non-state actors so that it can offer security and a relatively corruption free investment environment to global MNCs interested in developing mining industry.

PK state, a semi-industrialized nation saves at an annual rate of 9% and has been sustained by foreign aid especially during four periods of dictatorships. With foreign aid periodically PK economy experienced economic bubbles. The economic bubbles busted any time the foreign aid was stopped.

PK GDP growth for 2012 was estimated at 3.7%. PK has not released it census data for 2010. PK population* estimated at 187 million is growing at 1.6% – 2.05% per year. PK needs a savings rate of 15+% for a sustainable economic growth to maintain its nuclear armed forces and savings at 20+% to catch up with economic growth rates of emerging BRICS nations. Unless it takes steps to set up an extractive economy, the political ideology of the welfare state coupled with a burden of internally destabilizing terrorism and maintaining huge armed forces is likely to deplete its resources creating conditions for implosion as it happened to the USSR.

India and PK just like the US and other developed lands control printing of money to finance its development. More money a nation prints cheaper is its currency. In case of India, less then five rupees were needed to buy a US dollar in 1961. Today a dollar is worth about Rs 55. In case of Pakistan a dollar is worth about PK 100 rupees. Each of three nations own trillions of dollars or rupees to central bank that prints money.

The India-PK and Israel-Palestine conflicts highlight Capitalist-Democratic vs. Welfare State-Socialist. Market economy driven capitalism encourages and induces wealth generation by creative and innovative individuals. Market economy offers incentive’s to each citizen to generate wealth and keep most of it for upward mobility in society. The US is a nation full of wealthy and upwardly mobile people; see, supporting data in my recent article*.

Dynamic and Static Political Ideologies  

A major difference between India and Pakistan as well as the Christian and Muslim states is that one is driven by a dynamic democratic political ideology and other by a static dictatorial political ideology. A characteristic of democratic society is that as new generations arrive they bring change to the nation. The static societies repress change by regressing to past tribal culture.

By static I mean regressive tribal culture of centuries ago by promising a welfare state and emulating life of Mohammed with asymmetric wars. The best Muslim nations can do with older than 19th century war technology is to engage in asymmetric wars the militarily advanced democratic societies with 21st century war technology. By engaging in the asymmetric wars Muslim nations are on a path to self-destruction*.

Citizens of a welfare state are not driven to generate wealth. Socialism, Islamic or not is doomed to failure unless like China the nation is willing to strengthen its economy by using market economic concepts of capitalism. There is no hope for an upward mobility in socialist environment. Political opportunists in Muslim welfare states exploit youth in the name of jihad for personal growth – money and power.

Unless Muslim states have black gold or other commercially valuable commodities to extract as Afghanistan and PK do, they don’t know how to generate wealth except by invading neighboring rich lands and indulging in loot and plunder that history has recorded for last number of centuries.

The democratic nations that offer incentives to creative and innovative citizens are driven to generate wealth. That is how the US became a 14+ trillion dollar economy in 75 years and India a nominal 1.5+ trillion dollar (about $4.5 trillion PPP adjusted) economy in last 25 years. China, a communist nation became a nominal $4+ trillion (about $11.5 trillion PPP adjusted) economy by adopting capitalist model of wealth generation in last about 40 years. On PPP scale, in 2012 China’s economy ranked #2 behind the US and India and Japan at #3/#4.

A static welfare state remains static and a dynamic democratic state stays in motion.

A law of physics is a body at rest remains at rest and a body in motion remains in motion.

References and notes:

  1. Kamran Shafi, “Three steps forward; three back,”
  2. Praveen Swami, “Runaway grandmother sparked savage skirmish on LoC”
  3. Pervez Hoodbhoy, “Negotiate with the TTP?”,
  • TTP considers itself an army of God and considers PK to be a state of kefir, (unbelievers) according to the  article. TTP operatives summarily executed 21 abducted off-duty Levies personnel (Dec 30, 2012). TTP is the internal enemy of PK and the army is helpless against internal enemy. For more details please read Prof  Hoodbhoy’s article.
  1. Following are my impressions. Internal destabilization and conflict at LoC may be linked to the PK army’s  quagmire to cope with fast deterioration or law and order. Taken in context of internally destabilized PK, the picture starts becoming clear.  Consider:
    1. TMQ announced a 4 millions people march on Islamabad, presumably with consent of the army, President Zardari and several political parties after returning from Canada in December 2012. TQ (Maulana Qadri) is a naturalized Canadian citizen and pacifist. The march started on January 12, 2013 with 7,000 from Lahore and marchers are receiving protection by 10,000 police. Midway through the march the number of marchers on Monday Jan 13, 2013 had grown to in a range of 13,000 to 21,000.  It is estimated that by the time it reaches Islamabad the number of marchers will be only about 10% of 4 million claimed by TMQ. Cost of 50 millions rupees for expenses was approved by federal government for security of marchers.
    2. TTP, a terrorist Taliban non-state actor has been financed by PK army for decades. TMQ actions politically are considered detrimental to TTP interests. TTP has taken over the mantle for religion leaving the army to choose between political or religious authorities.
    3. According to Prof Pervez Hoodbhoy* the army of Allah is forcing PK army to choose between defending constitution of PK or the army’s claimed mission as the defender of PK ideology of Islam. This is a classic outcome when religion and politics are mixed. Is the army for defending political or religious authorities?
    4. Quandary for the army is, will PK army choose to defend the political or religious authorities? Is the PK army ready to defend constitution of PK against TTP in an internally destabilized nation?
    5. To divert attention away from growing instability PK army may have started a border (LoC) conflict and put on hold trade or entering of goods carrying trucks from India into PK. The killing of Pakistan and India       soldiers making it harder for the peace process to remain on tracks. Is this an attempt to divert attention away from the internal fights against TTP?
    6. Mullah Hafiz Saeed, a Taliban terrorism organizer appeared in PoK and restarted a vitriolic agitation in January 2013 adding an element of TTP threat against India. Indian Air Force chief issues warnings to PK army on Jan 11, 2013.
    7. Two nuclear powers at logger head; PK call for the intervention by UNSC to investigate border firing trying to internationalize the local conflict arising out of the PK army’s inability to face down to TTP. Politically it is a murky situation. Historically UNSC is incapable of resolving bilateral disputes.
    8. In a column, “Towards a new Pakistan” Salman Ahmed claimed our goal is to bring about a  fundamental  change in the contract between individuals and state as currently practiced.” Is Salman Ahmed talking about setting a stage for the PK Spring movement?
    9. News reports are, TQ lost support of MQM and now Salman Ahmed. Will TQ be able to bring 4 millions protesters to Islamabad? Does the army realize that it may be again falling into a trap of defending religious or political authorities?
  1. Masud Alam, “Sad generations” @
  2. Khurram Husain, “Difficult to Compare”, at
  1. “Demographics of Pakistan”,
  2. “Economy of Pakistan”,
  3. “Arab Spring”,
  1. Kishan Bhatia, “Analyzing US 2012 Election Results,”
  2. Kishan Bhatia, “Analyzing Muslim Asymmetric Wars,”




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