Infrastructure Redux

Crisis, Progress in Industrial Pakistan & Beyond

N. Anwar

• Publisher: Palgrave Macmillan
• Year: 2014
• ISBN:
  9781137448170
• Topic: Economics
• Subtopic: Development Economics
• Index: Economics

The focus of this book is on industrial infrastructures of production and circulation, from power distribution and roads to dry ports and airports. It looks at how these infrastructures underpin visions of progress and mediate relations between the state and capitalist firms in industrializing districts in Punjab, Pakistan.

1

History, Ideas, Visions

Introduction

Marxists have long understood and emphasized the relevance of material infrastructure as constituting the basis of economic and social formations. Marx himself provided the basis for debates in the Indian Marxist tradition by suggesting that railways would be the ‘forerunner of modern industry’ (Marx 1978). The inherently linear, modernizationdriven narrative underlying infrastructure’s conceptual foundations is perhaps best illustrated in the influential development discourses that emerged in the 1950s. This mode of thought about infrastructure was intimately caught up with new ideas concerning the shape and trajectory of economic development and the advancement of industrialization in so-called developing countries. With the ‘underdevelopment’ of Asia, Africa and Latin America as the major unresolved economic problem looming on the mid-20th century horizon, a new field of development economics emerged. Its ideas and theories percolated into the realm of industrial and infrastructural policy making in Pakistan. While there is no linear relationship between ideas and policy outcomes, in this specific historical conjuncture of the Pakistani state the ideas did have important bearing on official policy and planning. In Pakistan, as elsewhere in the erstwhile third world, the ideas of development economics were palpable to local planners and military rulers by giving saliency to their visions. Development economics enabled independent states, such as Pakistan, to tie infrastructure policies with a mode of rule while promising rapid material progress.

Development as infrastructure

As the material progress of new nation-states emerged in the mid-20th century as a key frame through which foreign and domestic economists and planners reflected and acted on transformation, development as infrastructure came to define the vision of a new-fangled policy paradigm. Knowing its capacity to connect economic activities and organize territories, places and people, early development theorists remained fairly infrastructure centric. Theorists like Paul Rosenstein-Rodan in his celebrated idea of the ‘big push’ stressed the significance of infrastructure as a necessary condition for freeing developing countries from the vicious cycle of low savings and productivity. Others like Walt Rostow in his best selling Stages of Economic Growth popularized the term ‘take-off,’ which became part of the standard lexicon of foreign-aid policy makers. Walt Rostow saw infrastructure or SOC as a necessary precondition for industrialization and the self-sustained growth of developing countries. SOC not only prepared the basis for the expansion of the economy but also created an atmosphere that bred entrepreneurial activities. In Rostow’s theory of economic growth, which was a direct counter to Marxist stage theory of capitalist development, self-sustained growth was an outcome of a hierarchy of developmental stages wherein infrastructure was positioned as a key precondition for the critical stage of takeoff. Even though the narratives about ‘takeoff’ and ‘big push’ lost traction in the market-oriented era of 1980s and 1990s, these have made a comeback in the new millennium as a part of the renewed rationale for foreign-aid projects in developing countries and challenges of achieving the Millennial Development Goals (Easterly 2005).

For Albert O. Hirschman, who was against the alleged need for a ‘balanced’ or the ‘big push’ industrialization effort, investments in SOC were desirable because these facilitated other kinds of economic activities. In his well-known book The Strategy of Economic Development published in 1958, Hirschman emphasized developing countries adopt a deliberate strategy of unbalanced growth by investing in strategic sectors of the economy rather than in all sectors concurrently. Other sectors would develop through linkage effects. This strategy was perceived as necessary because no developing country was deemed to have a sufficient endowment of resources to invest in all sectors of the economy. Therefore, investments had to be strategically directed for certain industries and sectors of the economy and this would pave the way for new opportunities. Investments were classified into two parts: SOC and DPA or directly productive activities. Investment in SOC called for expenditure on projects like electricity, water supply and communications. On the other hand, investments in DPA included industry, plants and equipment. While SOC and DPA could not be taken up simultaneously due to developing countries’ limited resource base, investment in SOC was advocated because it invited DPA. SOC was understood as a capital that functioned indirectly to enhance the production capacity of productive capital.

Markedly, for these theorists SOC was to be provided by public agencies or private agencies subject to public control. The dominant perception was the market mechanism could not supply these goods in sufficient quantities due to the characteristics of ‘non-excludability’ and ‘collective consumability.’ The early theorists underscored that the provision of ‘hard core’ infrastructure – electricity, roads, transport – was inescapably the state’s responsibility. The theoretical debates especially about costs where the business logic of accounting and cost–benefit analysis for overheads was applied meant the state’s role was codified in economic terms (Rankin 2009). Hence, in the developmental view it was not that infrastructure would become the backbone of economic planning, as it was in the Soviet case, but more so a target of state investment that could generate as both Hirschman and Rosenstein-Rodan had suggested a catalytic effect of mobilizing entrepreneurial efforts. With the advent of international aid and financing for economic development in the 1950s and 1960s, the concept infrastructure was given further credence as a process related to socioeconomic modernization. In the language of World Bank financing, infrastructure became a depoliticized, neutral description for various rudiments to economic development.

Through its deep connectivity with the state and marriage with centralized planning, infrastructure shaped the emergent nation-states’ visions for new futures increasingly defined in terms of capitalist accumulation. By the late 1950s, the importance of infrastructure planning was ubiquitous in reports and discussions of economic development and figured prominently in the comprehensive, long-term plans of new nation-states like Pakistan. Economists and journalists heralded electric power, roads and railways as a catalyst for growth of a new, industrial era.¹ Alongside this was the transfer of foreign planning expertise through international institutions such as the Ford Foundation, the World Bank and even British engineering firms to the developing world to provide technical assistance on all aspects of infrastructure development and governance, from constructing huge water projects in South Asia like the Indus Basin Development Programme² to building roads, ports and cities, to even setting up an elaborate bureaucratic machinery that would direct planning trajectories (Michel 1967; Lewis 1970; Naseem 1998; Zaidi 2000; Wescoat et al. 2000; Banerjee 2009). As the concept infrastructure was incorporated into broader visions that undergirded territorial consolidation and national development, it became a powerful means for the legitimization and expansion of state power. The rise of the developmental state predicated upon postcolonial governments’ enormous investments in both physical infrastructures and education and health care have been a defining feature of most of the former colonies of Britain and Europe.

Even though Pakistan’s history differs from that of former British colonies in Asia and Africa, it is similar to most postcolonial states to the extent that there has been extensive reliance on the administrative and military institutions to maintain the continuities of government. These have also served as the main institutional form through which international capitalism has been sustained in the post-independence era of American dominance. In the immediate aftermath of independence, American advice and financial assistance to enlarge a weak economic base played a decisive role in bolstering Pakistan’s public institutions. But the Pakistani experience is also unique in that the strategic and economic consequences of Partition created institutional imbalances that have proved enduring and often inimical for economic development, for instance, the political-economic influence of the military that has repeatedly subverted the elected institutions of the state (Jalal 1990; Siddiqa 2007).

In the early decades of Pakistan’s formation, the rise of the developmental state had resonated with trends found throughout the global south (McMichael 2008). International borrowing had helped postcolonial states to expand considerably by investing in infrastructures. For example, in a decolonized Africa development planning became a major thrust of economic governance in which industrialization constituted a major goal, with a strong emphasis on import-substitution industrialization and massive investments in infrastructure. These strategies spurred on reasonable levels of economic growth with no fewer than ten African countries enjoying a GDP growth rate of 6 percent from 1967 to 1980 (Mkandawire 2001). Similarly, the Pakistani discourse highlighting industrialization was used to legitimize the expansion of the state through foreign financing of private industrial investment as well as infrastructure development (Papanek 1967; Amjad 1982, 1984).

Approximately 42 percent of the total resources of the First Five Year Plan (1955–1960), which was a centrally administered government plan for developing the national economy, had relied on foreign aid and investment. In justifying the massive thrust on industrialization through foreign assistance, the early economic managers set out to boost industrial production by 75 percent, earmarked 60 percent of public sector investment to develop infrastructure and invoked the rhetoric of Pakistan’s ‘grave dislocations,’ structural deficiencies and ‘serious difficulties’ (Rahman 1962; Haq 1963; Waterston 1963; Lewis 1970). But alongside a period of legitimizing state power through rapid industrialization and infrastructural expansion, for instance, in the 1960s during General Ayub Khan’s military government, other crucial developments also helped shape the Pakistan project of socio-economic transformation. As highlighted in the Introduction, patron–client frames helped structure relations of power between the state and capitalist firms whereby both bureaucrats and industrialists sought to embed themselves within social networks and reciprocal arrangements that advanced their respective interests. I elaborate further this important point in a subsequent section.

The remainder of this chapter focuses on two objectives: first is to sketch how this new era of development as infrastructure that buttressed Pakistan’s early decades of industrialization was predicated on the influential development discourse of the 1950s, chiefly its reification through international aid and foreign expertise imported from America to effectively manage the nation’s embryonic future. I emphasize the post-independence structural context and the state-centric visions of development that shaped the idea of Pakistan as a space geared for capitalist accumulation. I focus primarily on General Ayub Khan’s military era (1958–1968) that is often characterized as the decade of development. In that era, building infrastructure was constitutive of Pakistan’s material progress and discourses of a teleological modernization helped define the purposes and goals of those infrastructures and the state’s role. The second objective is to show how in the long aftermath of that era, development as infrastructure has gradually unraveled and the tight metonymical overlaying between the state and infrastructure has weakened. Notably, this waning is predicated upon the disruptions in the temporal flows of the linear narrative of development and state-led pathways of advancement and the concomitant destabilization of the technical qualities and symbolic functions of infrastructure. Always understood as a harbinger of pristine industrial futures and developmental visions, in Pakistan infrastructure development in the new millennium is a source of constant anxiety.

Co-constructing industry and infrastructure

The territories that make up present-day Pakistan had occupied a crucial place for the British imperial regime in terms of military and infrastructure resources. For a substantial part of the 19th century, colonial India was a major target of British capital that enabled the development of a massive network of communication and transportation infrastructures. The expansion of the colonial economy had depended on the creation of a vast infrastructural system, and the accompanying technological innovations, especially in communications, accelerated the movement of capital and the integration of India within the colonial space economy. From railways and canals to roads and telegraphs, ‘state works’ not only became embodiments of colonial authority and a civilizing modernity, but also served as a potent symbol of a triumphant imperial capitalism (Goswami 2004). A dominant economic region, Punjab became densely traversed by railway networks and irrigation schemes and a focal point for an export-oriented agricultural production. As a vector of modernity and economic prosperity, in colonial India infrastructural development was also accompanied by distinct social effects. Historians and anthropologists describe how entrepreneurs and state officials were united in their expectations of infrastructures such as railways that ‘would spread new principles of association and help to forge a liberating public space’ (Bear 2007:36).

Beyond the public sphere, infrastructure was also a site that introduced workers to the habits of industrial discipline and was constitutive of caste and class relations. Hence infrastructure was not only an emblem of socioeconomic progress that marked the colonial state’s legitimacy, but also a locus for the creation of modern forms of subjectivity. In colonial India, infrastructure such as transport, communications and irrigation schemes occupied a privileged place through which a modernizing colonial political-economy unfolded: ‘They were constructed and construed as magical technological and engineering feats that would domesticate, discipline, and modernize a barbarous population, tame its prejudices, and elicit its loyalty’ (Goswami 2004:47). The development of canal irrigation was also a means through which the colonial government constructed a political constituency by establishing client–patron relations, a process accompanied by agricultural colonization and the transfer of land grants to loyal supporters (Ali 1988; Alavi 2001).

However, in colonial India the new political-economy of infrastructure development was marked by an uneven geography that persisted in the post-independence context. In the 19th century, industrial development had taken place primarily in and around the ports of Bombay and Calcutta, with the bulk of raw cotton coming from areas that later constituted West Pakistan. Consequently, the territories inherited at the time of Pakistan’s independence were predominantly geared toward agricultural production of traditional exports such as jute and raw cotton with no manufacturing capacity. In the post-independence phase, envisioning an autonomous, modernized Pakistan necessitated the transformation of an ‘agrarian backwater’ that had served imperial interests into an industrial leviathan that could build the foundations for territorial consolidation and material progress. The intensification of industrialization depended on the deployment of a full-scale, state-backed planning machinery that could support not only a privately owned and efficient manufacturing base, but also implement an ambitious public works program: from harnessing energy resources to building communications infrastructure for the production and circulation of people and new kinds of commodities, for example, raw material and spare parts and export-oriented manufactured goods like cotton textiles. At an industries conference in December 1947, state officials announced a ten-year target for generating 500,000 kW of electricity. Subsequently, at a ‘Power Conference’ held in 1948, additional attention was directed toward developing hydroelectricity (Andrus & Mohammed 1958). At the same time, Central Engineering Authority (CEA) was established to coordinate and implement major engineering projects and to press ‘forward with schemes for the exploitation of water and power resources of the country. An international combine of engineering firms, Messrs. Merz-Rendel-Vatten-Pakistan (MRVP) was appointed as technical consultants to this Authority’ (Andrus & Mohammed 1958:211). Engineering firms undertook extensive studies to survey the existing thermal installations and to carry out new ‘load surveys’ and to assess power requirements for commercial and industrial consumption over the next 15 years. These firms also carried out surveys for the generation of electricity and its countrywide transmission through steam, diesel and hydroelectric stations. By the late 1950s, these stations constituted vast networks of electricity grids in both East and West Pakistan.

The provision of adequate infrastructure materialized early on in the 1950s through the establishment of new state-owned electricity infrastructure that included hydroelectric power generation and the establishment of two public electricity utilities, the Water and Power Development Authority (WAPDA) and Karachi Electric Supply Corporation (KESC). The growing presence of textile mills and numerous light industries in post-independence Karachi meant that the central government prioritized the provision of electricity infrastructure. As KESC expanded its capacity, in 1955 the central government invested Rs. 18 million in the shares of the corporation. KESC also obtained a Rs. 13 million loan from the World Bank to meet its external expenditures for constructing a 30,000-kW thermal power plant and the extension and improvement of transmission and distribution facilities and engineering services (Andrus & Mohammed 1958). In addition to these developments in Karachi, cities like Faisalabad also became an object of the central government’s attention for installing generation capacity for industrial growth. Given its pre-independence negligible electricity capacity, in Faisalabad 24,000 kW of capacity was quickly installed through various state-led projects. The development of the power sector was prioritized over other sectors such as transportation, and in large part this reflected the state’s acknowledgment of a critical link between electricity and industrial development, as well as the demands of a new nation that had absorbed literally overnight seven million refugees from India.

Consequently, the ensuing centrally administered and comprehensive long-range plans to formulate and implement development policy emphasized the objective of providing low-cost electricity. In the early phase, the Pakistan Planning Board had estimated its expenditure on power alone would be Rs. 541 million during the period 1955–1960 (Andrus & Mohammed 1958). Hence, under the First Five Year Plan (1955–1960), the construction of electricity infrastructure took precedence together with industrial and agricultural development. In an annual address delivered on 5 November 1956 at the West Pakistan Economists’ Conference, Zahid Hussain who was the Chairman of the Planning Board stated unequivocally: ‘Agricultural, industrial, power, water and other development must receive higher priority for many years. This is the lesson which the experience of other countries teaches us we can ignore it to our peril.’³ Such statements assumed a relationship between certain types of infrastructure and economic growth. Writing some years later after the consolidation of the long-term planning agenda under Field Marshal Ayub Khan’s military rule, economists noted the extent to which Pakistan’s economic development was advancing:

Irrigation and power facilities have made a remarkable progress in the same period. A number of major projects were completed while several new ones were launched. Nearly 4 million acres of land were brought under new and improved irrigation. The total installed power generating capacity increased by more than 3 times while the per capita electricity consumption rose from a little under 3 units ...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Tables and Figures
• Acknowledgments
• List of Acronyms
• Currency Exchange Rates
• Introduction: Pathways to Progress
• 1. History, Ideas, Visions
• 2. Disrupted Mobilities
• 3. Power Breakdowns
• 4. Whither Labor?
• Conclusion: Infrastructure’s Promise
• Appendices
• Methodological Note
• Notes
• Bibliography
• Index