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This article seeks to explore how the interplay between world economic system and the Pakistani state places it at the periphery of the global economic order. It thereby contributes to its own under-development as a subsidiary of the world economy.

The peripherality of Pakistan's economic architecture can be explained primarily through its association with the world economic system based on "dependency theory", which states that the under-development of any country of the Third World owes itself to the exploitative nature of global economic order. The "dependent relationship" is best defined as a "conditioning situation in which the economies of one group of countries are conditioned by the development and expansion of others."

The peripheral nature of Pakistan's economy is deeply rooted in the colonial period (before 1947). The political and economic relationship between colonised India and the then British government could be explained by this "dependency theory" - a unilateral master-client relation between periphery and the core country. However, the post-colonial period is marked by the imprints of neo-colonialism in the shape of global neo-liberal policies of the world's wealthy nations and multinational corporations. It is, therefore, clear that since its inception, Pakistan has fallen prey to the exploitative world economic system, or what you call 'global neo-liberalism' and has resultantly been rendered dependent on the global economic architecture. Pakistan has a history of offering itself to global economic powers as a pawn to accomplish their neo-liberal agenda.

My contention here is to analyse Pakistan in the light of Marxist analysis of the state by which it has assumed greater autonomy - as compared to the "relative autonomy" of the capitalist state because the mode of production in Pakistan is indeterminate and no single class has definitive sway in the power relations. The second point of discussion in this article relates to the role of strong state bureaucracy of Pakistan as inherited from the colonial era.

The 'over-developed bureaucracy' was created by the British colonial government to further strengthen its control over the indigenous resources and people of India. This inherited bureaucracy in the independent state has emerged from the petty bourgeoisie mentality and has had monopoly over modern education and technical skills, including state capitalism, which gives Pakistan a shape of an entrepreneurial state. By this, I mean that in the wake of local capital's weakness, Pakistan as a state has assumed the main role of a developer of infrastructure and acts as the subsidiary of multinational corporations and core capitalist countries.

The world economic system can be seen in two different historical perspectives: colonialism and post-colonialism. The 'dependency theory' argues that during the colonial period, there was a unilateral relationship between the colonial core-country and the colonised country located at the periphery of the world system. Before 1947, India was a single country and had a unilateral colonial relationship with the British. In other words, the colonial British had granted unto itself sole proprietary rights over the dominion of India with the result that all economic benefits from all sources of revenue generation went to the foreign imperial bourgeoisie. These propriety rights granted power to British capital to penetrate into dependent colonial India and transfer surplus resources back to the British as a colonial power.

To achieve these objectives, the British colonial government of India equipped itself with mechanisms and processes, which enabled it to subordinate the natives and usurp their resources by employment of institutional frameworks. This was a case of a dependent, unilateral relationship between the colonial British and colonised India. This manifested itself in the fact that the pace and direction of the Indian evolution was determined by the evolution of the British as a core capitalist country.

The British left the Indian subcontinent in 1947. Following the partition, Pakistan was created as an independent nation, but with the solid imprints of the colonial history in the shape of an 'over-developed' bureaucratic-military structure. Soon after its independence, Pakistan plunged into a trap of global neo-colonialism as a post-colonial state. Pakistan as a state has always played a very active role, enabling global neo-colonialism to hold its foot firmly on the Pakistani soil as well as elsewhere. As discussed earlier, the colonial state facilitates the penetration of a colonial country's capital directly. Therefore, this role was continued after the independence in the shape of allowing neo-colonialism forces to penetrate into the country's economic structures and decision-making processes. This military-bureaucratic oligarchy vested itself with extreme administrative powers because in Pakistan discourse, they were termed as highly efficient and equipped with the administrative acumen to implement the policies and oversee the country's development process. The local or indigenous bourgeoisie has failed to assert its active and productive role in the economy and paved the way for the greater autonomy of Pakistan to assert its own entrepreneurship.

Simultaneously, corruption was heightened in the so-called military-bureaucratic oligarchy and enabled these civil-military combine to enter the arena of entrepreneurship either directly or indirectly. However, Pakistan's role in entrepreneurship is a form of a new dependent development in the periphery of the world capitalist economy, which helped Pakistan to assert its strength even more vigorously with the help of the 'over-developed' state machinery in the shape of a so-called military-bureaucratic oligarchy.

The main characteristic of the dependent development is a collaborative functioning of Pakistan with both the global neo-imperialist class, and local capital and the landed class. Local capital is gaining visibility in Pakistan due to the capital generated through heightened corruption of the military-bureaucratic oligarchy and its investment in the business and industry. The interaction of the government with the landed aristocracy is in the shape of tax relief and forthcoming corporate farming.

The greater autonomy of Pakistan in the shape of state capitalism is by no means a step towards transformation of social relations of production from capitalism to socialism. On the contrary, it is an attempt on the part of Pakistan to pave the way for the smooth functioning of global neo-colonial forces. The concentration of power in Pakistan could be defined as a precondition to dependent under-development narrative.

The success of the 'dependent development' is predicated on multinationals willing to invest and international bankers willing to extend credit. But in Pakistan's context, dependency on the world economic system is creating a sheer 'dependent under-development'. However, it is important to place Pakistan in the centre of the analysis and thus class relationships and the processes of accumulation and distribution of capital ought to be defined as mediated by the state.

Hence the interaction between world economic system and the state apparatus can influence the process of capital accumulation to their mutual benefit. This article provides an integrative analysis of the under-development processes as a logical outcome of the interplay of the global economic order and Pakistan. The penetration of global neo-liberal capital in the economy of Pakistan not only creates socio-economic problems such as unemployment, poverty and hunger, but also constantly generates new class relations, which create new challenges in the domain of class struggle.

(The writer is PhD candidate in Economics at Australian University.)

Copyright Business Recorder, 2010

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