OUR story starts in the spring of ’68, in the 10th year of our field marshal Ayub, when economist Mahbub-ul-Haq made a speech in Karachi. Less than two dozen industrial groups had become “the ministry of finance for the private sector”, Mahbub said, with “a stranglehold on the system … [keeping] out any new entrepreneurs”.
Mahbub’s speech set off a chain of events: ‘22 Families’ became a byword for the Ayub regime, and a sitting target under Zulfi Bhutto.
Consider the times: Mao was alive, Marxism wasn’t dead, and the PPP’s merry band of leftists was about to seize the means. Once in power, Zulfi went after the old barons at once. “We called them all sorts of names,” remembered finance vizier Mubashir Hasan, “oppressors, bloodsuckers … everything that would inculcate class hatred”.
But some names boomeranged. Following the meetings of the nationalisation committee, Dr Mubashir seized a steel plant called Ittefaq, citing “a record of being unfair to labour”. As Nawaz Sharif would later admit, “Till then I had no interest in entering politics”. Mian sahib’s public life thus began in revenge against Bhuttonomics, and in service of his business barkat.
Around the same time, we were given a new Constitution and, with it, Article 151: that parliament “may by law impose such restrictions on the freedom of trade, commerce or inter-course between one province and another or within any part of Pakistan as may be required in the public interest”.
When moving that article in the assembly, Pakistan’s Madison, Hafeez Pirzada, spoke of prices in different provinces becoming “so high and uncompetitive that people would refrain from buying those goods. In one country, with one economic system … this article is absolutely necessary”. Mr Pirzada’s point was simple: a pro-competition regime couldn’t be restricted to a province — it had to be federal in nature.
Meanwhile, nationalisation continued, and industry took a beating. Even Mahbub wasn’t impressed. “The basic problem is not the 22 families….”, he wrote in 1973, “but the system that created them”.
Not only did the system remain, it rallied harder after Zulfi’s fall. The world, too, was changing: as the ’80s dawned, the Reagan-Thatcher consensus — that regulation was bad and greed was good — was everywhere. It helped that Gen Zia’s antidote to the PPP in Punjab was a pro-business hotchpotch: traders, urban conservatives, and industrialist fatcats still scarred by Bhutto.
Eventually, Article 151 faded from view. The 22 families showed up with new names, and crony capitalism scored the ’90s — the PPP having long moved on from its socialist uncles. Benazir II even ended up giving Pakistan one of its worst economic decisions ever: the independent power project policy of 1994, a rolling disaster of non-competitive bids, sovereign guarantees and imported furnace oil, thus rocket-boosting circular debt and making energy unaffordable.
It was only as late as Gen Musharraf’s autumn that Article 151 made a comeback: the creation of the Competition Commission of Pakistan, to stop market warriors from abusing their dominant position (even as Musharraf’s henchmen entrenched their own monopolies). Now up against an actual regulator, big business lawyered up and went to the Lahore High Court. It argued that the Competition Act was unconstitutional, because regulation of trade was a provincial subject (the exact opposite of what framers like Hafeez Pirzada had said). Stay orders were passed against the commission, and the case crawled on for 11 years.
In that time, we came to swear by what dead-eyed American oligarch Peter Thiel wrote some years ago: that competition is for losers. Much of the PTI, PPP and Muslim Leagues are sugar mills first, with side gigs in politics; not a single gent named in the sugar inquiry has been punished. Our cars are overpriced junkheaps, our cement points to ‘hardcore evidence’ of collusion.
But there may yet be reason to hope. Two outstanding judgements via the Lahore and Islamabad High Courts, authored respectively by Justices Ayesha Malik and Babar Sattar, have rescued the commission and thrown out the stay orders, after the attorney general, Khalid Jawed Khan, made his case with skill and perseverance.
“…The very purpose of [competition] relates to the federation”, held Justice Ayesha, while Justice Babar ruled that Article 151 left it to parliament “to strike the right balance between the individual and collective right to free trade and business throughout Pakistan”, not just the provinces.
After years of paralysis, these verdicts have made busting the cartels possible again. For starters, Big Sugar must be phased out of Punjab before it sucks the land dry, imports thrown open, and subsidies outlawed; a fresh energy policy must cut Big Energy’s strangle-cord from 1994 and 2002; and Big Auto’s death traps penalised.
Because, though this government may rail against the mafias, the white-collar variant has never been better.