1. Naveed Pirzada 1
The State of Pakistan and the World Economic System: A Path
towards Underdevelopment
Introduction
The intention of this essay is to explore how the interplay of the world economic system
and the Pakistani state makes Pakistan a periphery of the world economic system and thereby
contributes to its own underdevelopment as a subsidiary of the world economic system. The
peripherality of Pakistan can be explained primarily by associated with the role of the world
economic system based on dependency theory which states that the underdeveloped situation of
any country of the Third World is due to the exploitative nature of one global economic system.
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” (Dos
Santos, 1970:231). To define the peripherality of Pakistan is to show the ways by which the
penetration of core countries’ capital into the economy of Pakistan conditions its local economy,
class structure and whole social structure. In the words of Schuurman (1993) this
“penetration…alienated the periphery from itself and made it dependent on the core…” (p.5).
This necessitates discussing dependency theory in relation to the world econo mic system in order
to understand Pakistan’s peripherality as a Third World country. Dependency theory primarily
focuses on the unilateral relation between periphery and a core country, though the world
economic system is a multinational structure of capitalist relations in the shape of unrestricted
roaming of capital around the globe.
The peripherality of Pakistan has roots in the colonial period (before 1947), and therefore
the political and economic relationship between colonial India and the then British government
could be explained by dependency theory — a unilateral one-to-one relation between periphery
and the core country. However, the post-colonial period is marked by the imprints of

2. Naveed Pirzada 2
neocolonialism in the shape of global neo- liberal policies of the world’s wealthy nations and
multi- national corporations. It is, therefore, clear, that right from its creation, Pakistan has fallen
prey to the exploitative world economic system, or global neo- liberalism, and has been rendered
dependent on the world economic system as a whole. Since its inception, the Pakistani state
offered itself to global economic powers as a pawn to accomplish the neo-liberal agenda. First, I
will analyze the Pakistani state in 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 sway in power
relations (Gold et al., 1975 & Trimberger, 1977). Second, this essay will discuss the role of the
strong state bureaucracy of Pakistan as inherited from the colonial era. This “overdeveloped”
(Alavi, 1972) bureaucracy was created by the British colonial government to control all the
indigenous classes of India. Amin (1976) argues this inherited bureaucracy, stems from the petty
bourgeoisie and has monopoly over modern education and technical skills. Third, the role of
state capitalism will be explored and analyzed in the context of Pakistan which gives it a shape
of an entrepreneurial state. By this, I mean that in the wake of local capital’s weakness, Pakistan
as a state assumes the main role of a developer of infrastructure and acts as the subsidiary of
multinational corporations and core capitalist countries.
It is therefore clear that Pakistan as a peripheral state of the world economic system is a
creature of complex social and economic pressures. These pressures owe the ir origin to internal
and external pressures and to historical and contemporary processes as well. In conclusion, it will
be argued that Pakistan, as a Third World and peripheral state of world economic system, plays a
very important role in its own underdevelopment in partnership with world such economic

3. Naveed Pirzada 3
forces, as core capitalist countries, international financial institutions and multi- national
corporations. I shall begin with the theoretical orientation of my essay.
From Colonialism to Post -Colonialism: Theoretical Orientation
The main objective of this essay is to explore the interplay between the world economic
system and the states of the Third World, out of which arises the underdevelopment of the Third
World country — in this case, Pakistan. The present era of theorizing about Third World
development is overwhelmed by the theories of dependency and other neo-Marxist theories. I use
an integrative approach to investigate and explore the causes of the underdevelopment of
Pakistan. This integrative approach will treat the interplay of the world economic system and the
state, which reinforce each other increasing the underdevelopment of Pakistan as a country at the
periphery of the world economic system. I regard both these factors (the world economic system
and state) as the central explanatory variables which lead Pakistan towards more dependency vis-
à-vis the world economic system.
The state of Pakistan submits to the “subordination of external (usually aggressive)
relations to the logic of…accumulation” (Amin, 1993:81). Amin (1993) further argues regarding
the ‘recompradorization’ as follows:
…the peripheral state (which like any state fulfils the functions of maintaining
internal class domination) does not control local accumulation. It is – objectively
– the instrument of the ‘adjustment’ of the local society to the demands of
worldwide accumulatio n, and how it evolves is mainly determined by how the
centre evolves. Here, the state is by nature comprador (p.81).
Dependency theory is clear that the processes of underdevelopment in Third World countries are
only to be understood in relation to the development processes in core capitalist countries and
also in relation to the policies of international economic bodies. Penetration of capital from core
countries into the economy of a country at the periphery has a strong conditioning effect on the

4. Naveed Pirzada 4
overall socio-economic system of the dependent peripheral country. Schuurman (1993) defines
dependency as a “penetration of…capital, and consumption ideology that alienated the periphery
from itself and made it dependent on the core, led to large scale marginalization and the non-
realisation of development potential” (p.5).
At this point, it is imperative to analyze dependency theory and the world economic
system in two different historical perspectives: colonialism and post-colonialism. I emphasize
that dependency theory argues that during the colonial period there was a unilateral relationship
between the colonial core country and the colonized country at the periphery of the world
system. Before 1947, India was a single country, the predecessor to Pakistan, and had a unilateral
colonial relationship with the British. In other words, the colonial British had self- granted sole
proprietary rights over the dominion of India and 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 back to
the British as colonial power. To achieve these objectives, the British colonial government of
India equipped itself with apparatuses and mechanisms which enabled it to subordinate the
natives through direct rule. This was a case of a dependent unilateral relationship between the
colonial British and colonized India, manifested in the fact that Indian evolution was determined
by the evolution of the British as a core capitalist country.
On the other hand, the dependency in neo-colonialism has a multinational structure of
global neo-liberal relations and so the evolution of the country at the periphery of world
economic system depends on the movement patterns and cycles of global capital. It can be
argued that it is the world economic system that shapes and disadvantages the society and
economy of the peripheral country and therefore integrates it into a world economy. Amin

5. Naveed Pirzada 5
(1974) argues that “[n]ot a single concrete socio-economic formation of our time can be
understood except as part of this world system” (p.257). Consequently, the happenings in the
country at the periphery can be explained in the light of the patterns and cycles of movement of
global capital and the overall objectives of unrestricted capital moving around the globe.
Therefore, the processes of underdevelopment in the countries of the Third World
necessarily emanate from their dependency on the core of the world economic system. By this, I
mean the core’s capital is not just outside of the peripheral country, but is embedded in its
economy and negative ly affecting its socio-economic conditions. Some dependency theorists
think that “[e]verything is connected to everything else, but how and why, often remains
obscure” (O’Brien, 1975:23) so the notion of dependency may not be used as a meta- narrative to
explain all processes of underdevelopment in the less developed countries (Lall, 1975). These
theorists argue that the theoretical tendency to blame everything negative on dependency
“deprives local histories of their integrity and specificity, thereby making local actors little more
than the pawns of outside forces” (Smith, 1979:257). I, nevertheless, argue that in the particular
case of Pakistan, the state managers in the shape of the civil and military bureaucracy, the power-
hungry politicians and the dominant classes are no more than the pawns of outside forces.
However, some anti-systemic revolutionary forces, despite their limited resources, are present in
the shape of civil society, and thus do have their integrity and specificity in the development of
Pakistan at the periphery of the world economic system.
It is pertinent to discuss classical Marxist theory which terms the modern state, a
committee to manage the affairs of bourgeoisie that oppresses subordinate classes and (Miliband,
1965). Miliband (1965) argues that this is the classical Marxist view of the state. He further
argues that the state is independent and superior to all social classes, not just an instrument of

6. Naveed Pirzada 6
dominant classes. Marx’s secondary view of the state emanates from his analysis of the
Bonapartist State and, in this regard, Miliband (1965) argues that for Marx, the Bonapartist State,
despite its political independence from any given class, continues the economic and social
protection of the dominant classes. However, in post-colonial countries, such as Pakistan, the
relationship between the state and the macro-economic structure is much more complicated than
in the Bonapartist State. It has its own unique historical, political, economical and social
trajectories and necessitates theorizing distinctively.
In post-colonial countries of the Third World there is a variety of classes which could be
termed ruling classes, with a very complex web of simultaneous inclusion and exclusion
tendencies for each other. Mostly, the economies of the post-colonia l peripheral countries consist
of more than one mode of production and, consequently, have more than one dominant socio-
economic classes, such as landed aristocracy, local bourgeoisie and neo-colonial bourgeoisie.
The different dominant modes of production in the post-colonial countries could also be
distinguished as pre-capitalist, capitalist and transitional. Therefore, in the case of Pakistan the
pre-capitalist mode of economy consists of landed aristocracy and could be termed as a mode of
production based on feudal relationships. The capitalist mode of production in Pakistan is visible
only in the urban centers of the country, and consists of local and neo-colonial bourgeoisie, and
the transitional mode of production is one in which collaboration occurs between these different
economies despite their divergent economic interests. Alavi (1972) puts this as follows:
…that the state in the post-colonial society is not the instrument of a single class.
It is relatively autonomous and it mediates between the competing interests of the
three propertied classes, namely the metropolitan bourgeoisies, the indigenous
bourgeoisie and the landed class” (p.62).
I agree with how Alavi (1972) distinguishes the dominant classes in a post-colonial state, but I
disagree with his concept of relative autonomy of the post-colonial state. Marxian analys is of the

7. Naveed Pirzada 7
state argues that a capitalist state has a certain degree of relative autonomy and is therefore
considered relatively free from general control and interest of the capitalist class, but not free
from its general interests. Gold et al. (1975) argues that a relatively autonomous state is the cause
of cohesion for the bourgeois class and facilitates its dominance over all sections of the society.
This makes the relative autonomy a distinct characteristic of a bourgeoisie state to safeguard the
interest of the capitalist class.
In the post-colonial countries of the Third World, such as Pakistan, several factors lead
its state towards greater autonomy as opposed to Alavi’s (1972) relative autonomy in post-
colonial countries. This greater autonomy of the state is the by-product of the several modes of
production that compete with each other and thus survive simultaneously. Marxist analysts argue
that the state can achieve greater autonomy when the mode of production is indeterminate and
no single class has sway in power relations (Gold., et al, 1975; Trimberger, 1977). Alavi’s
(1972) three propertied classes — metropolitan bourgeoisie s, local bourgeoisie and landed class
— of a post-colonial state is the manifestation of the fact that the mode of the production is
indeterminate. He also discusses Pakistan as a post-colonial state and refers to bureaucratic-
military oligarchy as in the dominant position in the state and his reference to the military “coup
d` etat of October 1958” (Alavi, 1972:65) manifests the greater autonomy the Pakistani state has
assumed in the wake of indeterminate mode of production. Trimberger (1977) argues in the
context of Japanese economic transition to capitalism that it has achieved “dynamic autonomy”
and has actively promoted the capitalist mode of production to compete with other modes of
production. The same “dynamic autonomy”, which is a greater autonomy, has been achieved by
the state apparatuses of Pakistan to compete with the other modes of production.

8. Naveed Pirzada 8
The specificity of the colonial and, thereafter, post-colonial situation developed a web of
complex social relationships between the state and the social classes. In Western societies, the
creation of the nation state owes its origin to the indigenous capitalist class. This indigenous
capitalist class helped create the necessary governmental institutions and define the parameters
of law in order to protect the interests of the capitalist class. These institutions, procedures and
analyses created by the capitalist class are later on known as the apparatuses of
‘governmentality’ 1 (Foucault, 1991). However, the processes of relationship between the state
and the heterogeneity of the dominant social classes in the post-colonial societies are very
complex in nature and quite different from the evolution of the nation state in the West. In the
following section, I shall discuss Pakistan as a post-colonial state with reference to its
heterogeneity of the dominant social classes.
Pakistan: From Colony to Post-Colony
The British left the Indian subcontinent in 1947, and in the wake of the Indian partition,
Pakistan was created as an independent nation, but with the solid imprints of the colonial history
in the shape of an ‘overdeveloped’ (Alavi, 1972) 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 Pakistani soil. As discussed earlier, the colonial state facilitates the penetration
of a colonial country’s capital directly. This role was continued after the so-called independence
in the shape of allowing neo-colonialism forces to penetrate into the country’s economic
structure. This role only changed the shape of dependency from unilateral to multilateral; from
1
Foucault (1991) says that ‘governmentality’ is “[t]he ensemble formed by the institutions, procedures, analyses and
reflections, the calculations and tactics that allow the exercise of this very specific albeit complex form of power”

9. Naveed Pirzada 9
the British as a single colonial country, to the plethora of countries, international monetary
organizations and the multi- national corporations.
Since its creation, the dearth of a local entrepreneur class in Pakistan created a vacuum
allowing the global neo-colonialist bourgeoisie to take over. This phenomenon was very
common to almost all post-colonial states because “it is not established by an ascendant native
bourgeoisie but instead by a foreign imperialist bourgeoisie” (Alavi, 172:61). A very small
number of non-Muslim industrial/ merchant classes existed and migrated to India before the
Indian sub-continent’s partition2 . Nevertheless, the direct control of the foreign imperialist
bourgeoisie was ended at the time of Indian partition, but by no means had its domination
become history. This foreign imperial class was later on known as the neo-colonialist class and
surfaced in the economy of Pakistan. As a consequence of the global neo-capitalist class’s
economic hegemony in Pakistan, the weaker indigenous bourgeoisie came to form an alliance
with it as an inferior partner. Therefore, the alliance of local and neo-colonialist bourgeoisie very
significantly shaped their relationship with the Pakistani state. This alliance became a triple
alliance when the landed aristocracy jumped in and sought its share of money- making from the
local and neo-colonial bourgeoisie.
In areas that comprise today’s Pakistan, agriculture has been the predominant lifestyle
due to the increased land for cultivation through irrigation. This settled agrarian based lifestyle
and increased land for cultivation gave birth to large land holdings and this evolution eventually
emerged in the shape of a society based on feudal relations. The British colonial government in
the Indian subcontinent devised a system of political and administrative control by securing the
feudal interests of the local feudal lords. This system worked for the British as well for the local
2
In the wake of the Indian partition there was a mass migration between India and Pakistan, because of the
partition’s religious characteristics. Muslims of India migrated to Pakistan, and Hindus of Pakistan (especially from
Sindh province) migrated to India, because of the fear of victimization on the basis of religion.

10. Naveed Pirzada 10
landed aristocracy to share the power over the local people (Ansari, 1992). These big land
owners remain very powerful due to their political power base in the shape of land and people,
and that increased their socio-economic position to bargain with other two emerging classes —
the local and neo-colonial bourgeoisie. Thus, in the backdrop of this tripartite economic power
sharing, there emerged a Pakistani state which “mediates between the competing interests of the
three propertied classes, namely the metropolitan bourgeoisie, the indigenous bourgeoisie and
the landed classes” (Alavi, 1972:62).
This conglomeration of the class base in Pakistan leads its macro economic structure to
the definition of indetermination. As stated earlier, that economies of the post-colonial peripheral
countries have indeterminate modes of production due to the multi- mode production system
(pre-capitalist, capitalist and transitional). In this way, no single economic class has sway in
power relations (Gold et al., 1975 & Trimberger, 1977). This indeterminacy in terms of the mode
of production leads the post-colonial Pakistan state to greater autonomy as opposed to relative
autonomy of capitalist state. The greater autonomy of the Pakistani state is evident from the
dominance of military and civil bureaucracy, since mid-1950s. The first martial law was
imposed in Pakistan in the year of 1958, and thus stage was set to accommodate the Western
neo-capitalism to enter into Pakistan. Jalal (1990) puts this situation as follows:
It was during the first decade of independence that an interplay of domestic,
regional and international factors saw the civil bureaucracy and the army
gradually registering their dominance over [political] parties and politicians
within the evolving structure of the state (p.295)…there were strong domestic,
regional and international compulsion for the bureaucratic military axis want to
depoliticize Pakistani society (p.301).
I argue that these international factors or compulsions were the forces of global neo-colonialism
making it a dependent society. The refore, the garrison state became an ideal state structure for the
global neo-liberal powers to make their power base stronger in Pakistan. During the first military

11. Naveed Pirzada 11
government of General Ayub Khan (1958-1969) there were no means to restrict the operations of
the global neo- liberal capital which rendered local capital weaker vis-à-vis its international
counterpart. If we briefly look at the political history of Pakistan, it is evident that much of the
period is taken up by direct military rule and the rest is quasi or procedural democracies. From
1971 to 1977 was the only epoch in the political history of Pakistan when first popularly elected
Prime Minister of Pakistan Z.A. Bhutto challenged the power base of neo-liberal capital in
Pakistan and tried to dismantle the power structure of landed aristocracy through land reforms
(Esposito, 1974; Gustafson, 1976). A a consequence, he was hanged by another military ruler
s
General Zia in 1979. From 1985 to 1999 Pakistan witnessed the emergence of quasi-procedural
or controlled democracies under the tutelage of the Pakistani military. In 1999, the present ruler
of Pakistan General Parvez Musharaf, overthrew the controlled democracy of Nawaz Sharif,
when he attempted to assert an all powerful role of the Pakistani army.
The macro economic history of Pakistan is dominated by the nexus of three propertied
classes, as discussed above, under the auspices of the military junt a. However, the military
bureaucracy, despite differences, has sought help from the ‘overdeveloped’ (Alavi, 1972) civil
bureaucracy. The notion of ‘overdeveloped’ refers to the state machinery developed by the
British colonial government/bourgeoisie to control all the indigenous social classes. The civil
bureaucracy under colonial rule was also known as a steel frame of the British government.
Ziemann and Lazendorfer (1977) argue that after independence the post-colonial countries inherit
these ‘overdeveloped’ state apparatuses and its institutionalized practices to regulate and control
the local bourgeoisie. Amin (1976) puts this as follows:
The bureaucracy inherits that prestige of state power that is traditional in non-
Western societies and is strengthened by the experience of the colonial
administration power, which seemed absolute, and by the fact that the petty

12. Naveed Pirzada 12
bourgeoisie from which this bureaucracy stems has a monopoly of modern
education and technical skills (pp.345-346).
In post-colonial Pakistan, however, the nexus of the military and civil bureaucracies emerged as
a viable and effective apparatus of the garrison state to further the cause of the tripartite alliance
of the three propertied classes of Pakistan. Alavi (1972) calls this nexus a military-bureaucratic
oligarchy and argues that besides performing a role of mediation between these three dominant
economic classes, it “assumes also a new and relatively autonomous economic role, which is not
paralleled in the classical bourgeoisie state” (Alavi, 1972:62). The civil bureaucracy of Pakistan,
as a legacy from colonial government, reproduces itself in the post-colonial Pakistan to maintain
the hyper-authoritarian mentalities of the Pakistani state. This partly happened because the
democratic forces were explicitly thrown out of the political arena and civil society was also
refrained to assert its power out of the state.
This military-bureaucratic oligarchy vested itself with extreme administrative powers,
because in Pakistani state discourses the y were termed as highly efficient and equipped with the
administrative acumen to implement 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 the Pakistani state to assert its own entrepreneurship.
Simultaneously, corruption was heightened in the so-called military-bureaucratic oligarchy and
enabled these civil and military bureaucrats to enter in the arena of entrepreneurship, either
directly or indirectly through others. However, the Pakistani state’s role in entrepreneurship is a
form of a new dependent development in the periphery of the world capitalist economy, which
helped the Pakistani state to assert its strength even more vigorously with the help of the
‘overdeveloped’ state machinery in the shape of a so-called military-bureaucratic oligarchy. The
main characteristic of the dependent development is a collaborative functioning of the Pakistani

13. Naveed Pirzada 13
state 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 Pakistani state with the landed aristocracy is in the shape of tax relief and
forthcoming corporate farming. The largest beneficiary of this collaboration is international
capital to gain maximum privileges from the Pakistani state. Evans (1979) calls it a ‘triple
alliance’, because dependent development in the periphery of the world capitalist system is
between the peripheral state and both international and local capitalist classes. In the case of
Pakistan, I call it a quadruple alliance, because dependent development in Pakistan is a
collaborative strategy among the peripheral state, both international and local capitalist classes,
and the landed class.
Since the local /indigenous capitalist class is weak in terms of its operational capabilities,
the post-colonial Pakistani state started assuming the role of problem solver through building an
infrastructure, devising an institutional base to favor international monetary organizations, and
bargaining with transnational corporations and Western core capitalist countries. The state of
Pakistan has practically moved into spheres which traditionally are the domain of private sector.
The Fuaji Foundation is the example of the role of the Pakistani state as an entrepreneur. To
quote Jalal (1995):
[The Fauji Foundation] run by the army has eight manufacturing units, including
sugar, fertilizers, cereals, liquid gas, metals, a gas field as well as transportation
companies, schools, hospitals and investment in defe nse production industries
(p.143).
The entrepreneur ial role of the Pakistani state is also manifested from Burki’s (1999) following
observations regarding the Pakistan’s nationalization program:

14. Naveed Pirzada 14
nationalization of a number of economic enterprises in the sector of industry,
finance, trade, and communication… [f]or political reasons, the public sector
received a much larger share of investment—more than 60 percent—and much
greater attention from the policymakers (p.106).
However, Burki (1999) argues that the Pakistani state only entered those areas of
entrepreneurship in which private entrepreneurs were reluctant to invest. By disagreeing with
him, I argue that the local private entrepreneur was simply discouraged from rising as a powerful
class, because it would have entailed a new- liberal democracy in Pakistan with a free political
culture and civil liberties at the helm of the affairs. The free political culture and the increase in
civil liberties in the form of a powerful civil society were seen as a threat to the free intervention
of global neo-capital in the economic activities of Pakistan. Burki (1999) himself mentioned that
in the first decade of the creation of Pakistan, the Ford Foundation and the Harvard advisers in
Pakistan contended that economic planning “had to be done by the Pakistanis with the assistance
of foreign advisers” (p.113). This clearly shows how the state of Pakistan became a captive to the
global neo-capitalist class and thus, assumed the role of entrepreneurship at the state level
primarily to appease the neo-colonialism and the military-bureaucratic oligarchy. The secondary
beneficiary of this conglomeration of the international and local exploitative sections is the
landed aristocracy who also secured benefits out of this arrangement. Despite their support of the
Pakistani state and global neo-colonialism, the local capitalist class is on the lowest position on
the beneficiaries of the “state capitalism” or “entrepreneurial state” (Petras, 1976; Sobhan, 1979).
In other words, the local bourgeoisie has assumed the status of an appendage to the post-colonial
Pakistani state and also to the neo-capitalist class, which is fully operationalized in Pakistan.
Conclusion
The greater autonomous Pakistani state in the shape of state capitalism, however, is by no
means a step towards transformation of social relations of production from capitalism to

15. Naveed Pirzada 15
socialism. On the contrary, it is an attempt on the part of the Pakistani state to pave the way for
the smooth functioning of global neo-colonial forces. The concentration of power in the
Pakistani state could be defined as a precondition to dependent underdevelopment. Evans (1979)
argues in the Brazilian context that “the entire success of the dependent development is
predicated on multinationals willing to invest, international bankers willing to extend credit”
(p.290), but in Pakistan’s context, dependency on the world economic system is creating a sheer
dependent underdevelopment. However, it is important to place the state of Pakistan in the center
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.
The basic proposition of my essay suggests that world economic system and the state
apparatuses of Pakistan interplay to influence the process of capital accumulation to the benefit
of each other. This essay provides an integrative analysis which regards the underdevelopment
processes in Pakistan as a logical outcome of the interplay of the world economic system and the
state of 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 created new challenges for the class struggle. In
capitalist core countries the state has relative autonomy, but the degree of the greater autonomy
in Pakistan as a Third World country is largely determined by the interplay of the state and the
world economic system — with the dominant position of the World economic system.
Dependency theorizing has, however, established that the processes of underdevelopment
in Pakistan as a post-colonial state, are the outcome of the development processes in Western
core countries and the policies of the world monetary bodies and multinational corporations.
Ronald Muller, co-author of Global Reach, says that “the MNC [Multinational Corporation] is

16. Naveed Pirzada 16
one of the most powerful impediments to Third World development” (as cited in Ghosh, 1984:7).
Dr. Mahbubul Haq, the leading economist of Pakistan, says that Pakistan has one of the poorest
records on UNDP’s human development criteria in the region (Haq, 1997). External borrowings
and defense spending in Pakistan have reached an alarming point 3 . The continuing budget
deficits due to the heavy spending on debt servicing, defense spending and the structural
adjustment programs (SAP) of IMF and the World Bank have entangled Pakistani people into a
vicious circle of poverty and hunger. “This neo- liberal trickle-down economic logic was
encouraged, and indeed perpetrated” (Hak, 2002) in the shape of structural reforms under the
SAP, thereby, increasing the misery of poor people of Pakistan. It is, therefore, clear, that the
dependent underdevelopment of Pakistan as a post-colonial state is due to the dominant position
of global neo-colonialism in collaboration with the state apparatuses of Pakistan. In other words,
Pakistan as a country at the periphery of the world economic system renders itself vulnerable to
underdevelopment at the behest of global capitalist powers thus increasing its dependent position
vis-à-vis world economic system.
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3
In the wake of 9/11 international politics, aid flowed to Pakistan from the core countries and international
monetary organizations and temporarily saved the life of Pakistan standing on the verge of state bankruptcy.

17. Naveed Pirzada 17
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