THE IMPACT OF POLITICAL INSTABILITY ON THE ECONOMY OF PAKISTAN DURING GENERAL PERVEZ

The term political instability denotes a state of political unrest and turmoil within a country, characterized by the loss of control over territory, the inability to provide essential public services, and the erosion of legitimate authority. This phenomenon has profound repercussions, particularly on a nation's economic growth. Regrettably, Pakistan has grappled with political instability since gaining independence in 1947, paving the way for dictatorial rule. Constitutional conflicts have hindered the establishment of a stable democratic government, resulting in the stagnation of Pakistan's economic and social progress. This research paper focuses on assessing the impact of political instability on economic crises during the tenure of General Pervez Musharraf in Pakistan. The study was conducted in various areas of Faisalabad, with a sample size of 80 respondents chosen through a convenient sampling technique. Data collection was executed via structured interviews, and both descriptive and inferential statistics were employed for data analysis. The findings unequivocally demonstrate that political instability exerted a profoundly negative influence on Pakistan's economic well-being during this period. Notably, the surge in terrorism, exacerbated by political instability, deterred foreign investments, causing other nations to withdraw their interest in Pakistan. This research underscores the imperative of addressing political instability as a pivotal step towards fostering economic growth and stability in Pakistan and, by extension, in similar nations facing similar challenges.


INTRODUCTION
Pakistan came into being in 1947; since its partition, Pakistan has experienced over 30 years of military rule.There are four provinces of Pakistan, and every province has its own problems and issues despite the fact these are blessed with different natural resources.Pakistan's economy is ranked 47th in absolute dollars, but it is ranked 26th in terms of purchasing power.Pakistan's economy is mostly dependent on food processing, agriculture, pharmaceutical and textile industries, and other industries.The economy has been burdened for years by internal political unrest, a rapidly expanding population, differing degrees of international investment, and an expensive, protracted rivalry with India, a neighbour.Because of government measures that have been sanctioned by the International Monetary Fund (IMF) and reinforced by greater foreign investment and access to international markets, there has been a strong macroeconomic rebound in recent years (GOP, 2022).
Pakistan has experienced political unrest and economic downturns ever since gaining independence in 1947.However, the country's fragile political structure failed us in December 2007 when former prime minister and PPP leader Benazir Bhutto was assassinated.Bhutto returned from self-imposed exile on October 8 with the intention of sharing political power with General Pervez Musharraf-a deal backed by the United States of America (USA).However, she could not share the political power by herself and was assassinated in an apparent gun and bomb attack.Her sudden death was a National Tragedy for Pakistan, and it created unrest and far-off consequences in the history of the country.Just twelve days prior to her murder, President Musharraf lifted the six-week emergency proclamation.On November 3, 2007, Pakistan's then-president and current army head, General Pervez Musharraf, proclaimed a state of emergency and suspended the nation's constitution.This action was disliked and resulted in the aggression of the lawyers and the other segments of society in common.As the situation prevailed, the United States stressed upon Musharraf to hold free and fair elections in February 2008.The eight-year military reign of General Pervez Musharaf came to an end in February 2008 when incumbent opponents backed by the military, led by the PML-N and the PPP, were defeated.The PPP won a majority in the elections, mostly because of the sympathy that Benazir Bhutto's sudden death engendered.The outcome of the election set the stage for the PPP and PML-N to form a coalition government at the federal level, which ultimately resulted in Musharraf's departure as president in August 2008.Members of the PPP and PML-N battled shortly after the coalition government was formed in the center over the rehiring of judges who had been removed during Musharraf's emergency rule in November 2007 (Kronstadt, 2008).
On March 16, 2009, the government declared that it would restore all of the removed justices in response to public protests spearheaded by the PML-N.This move avoided political entanglements and opened the door for fresh cooperation amongst the major political parties.Pakistan had to face political instability and unstable economic situations due to Musharraf's actions and decision to impose emergency rules and dismiss the judges.For the restoration of the constitution, the lawyers started a movement which continued for more than two years.During that period, they had to face many hardships.There were created clashes between the PPP and other parties.Both the major parties played a negative role in affecting the economy of the country; because of unstable situations, such as terrorism, political instability, and global economic crises the internal and external investors avoided investing in Pakistan (GOP, 2022).Economic comparison of Pakistan during 1999-2008 is given in Table 1.Source: Rohail and Baig (2020).
In the developing nations of Asia and Africa, the issue of national unity and authority has received more attention than the nation's economic growth (Huntington, 2017;Nawaz et al., 2018;Mamoon et al., 2017;Ramadhan et al., 2016).Investigated a breakdown in the constitutional structure and the performance of the government that arises out of the differences over the proper nature of the authority for the political system.Michael (2015) considered it can be regarded as important to maintain peace, harmony, enduring constitutional contentment's, maintenance of government institutions, and possession of civic order.Bollen and Jones (1982) analyzed the impacts of international investments on the development of countries.The analysis of political instability effects on international investments.Modernization theory's emphasis on the national rather than international factors of development, volatility, and economic crises.Roe and Siegel (2011) reported that political instability hampers financial development and is a primary determinant of differences in financial development around the world (Ishrat, 2009;Gill, 2010).Khan and Saqib (2011) investigated the impact of Pakistan's political instability on inflation.It has been noted that Pakistan's exceptional economic growth and political stability are directly related.The idea that political upheaval plays a major role in driving inflation was investigated.Javed et al. (2018) found a negative relationship between democracy and economic growth.Khan and Fahad (2018) and Jong-A-Pin ( 2009) believed that there are four reasons for political instability: large-scale civil disturbance, political upheaval overall, rifts within the ruling party, and state-sponsored violence.We looked at the connection between political unrest and economic expansion, as well as the distinct ways that different facets of political unrest influence growth.There is just one thing that substantially impedes economic growth: political unrest (Memon et al., 2011;Mufti, 2023;Haider et al., 2011).

Economic Growth Indicators and Situation
GDP: Real GDP growth in 2004-2005 was 8.4%, far higher than the Economic Survey of Pakistan's target of 6.6% and up from 6.4% in the previous year.The Maltese economy grew faster than anticipated for three years in a row.This year's growth was in all key categories, demonstrating a true industry-agnostic approach.Pakistan's Economic Survey, 2004Survey, -2005.
Agriculture: Weak, fragile growth has continued for the past four years.The agricultural industry has recovered well this year, growing by 7.5%.The target growth rate was 4%, but the actual growth rate was 2.2% (GOP, 2005).
Per Capita Income: The average income of an individual is one of the most important measures of development.It provides a clear indication of the national average standard of living.The gross national product (GNP) split by the population in current US dollars increased from $657 to $736 between 2002 and 2012 (GOP, 2012).

Investment:
The average return on these six assets in 2004-2005 was 15.6%, a decrease from 17.6% in the year prior.Even still, growth in domestic investment decreased slightly in comparison with the previous year.Private sector investment rose by 19.3% as compared to the previous year's growth rate of 9.6%.Over the last year, the private sector shrank by 0.4% while the public sector grew by 36.8%.

Inflation:
The annual rate of inflation increased to 9.3 percent from 3.9 percent in the previous year.The inflation rate for food was 12.8%, up from 4.9% during the same time last year.According to the Economic Survey of Pakistan 2004-05, non-food inflation increased to 6.9% from 3.3% in the same period the previous year.Excluding food and energy from the calculation of inflation yielded a similar upward trend for the time period under examination, with co-inflation growing from 3.3% to 7.4% (GOP, 2005).
Import and Export: The goal for 2004-2005 was to grow exports from $12.3 billion to $13.7 billion, an 11.3% increase.In the same time frame last year, exports rose from $8.9 billion to $10.2 billion, a 14.6% gain.Consequently, there was an increase of $1.3 billion overall.The goal for the fiscal year was to raise imports from $15.6 billion to $16.7 billion, or 7.1% more.Pakistan's imports rose from $10.5 billion to $14.5 billion in the first nine months of the fiscal year, a 37.8% increase of more than $4.0 billion.
Pakistan's economy had a challenging 2007-2008 fiscal year.Numerous unexpected political and economic developments took place on a national and worldwide level.Examples of such events include political upheaval, breaks in the rule of law, increases in the price of food, oil, and other commodities, a decline in demand from outside the country, and volatility in the financial markets.These incidents all took place in Pakistan in the 2007-08 fiscal year, and they all had an adverse impact on the most important macroeconomic foundations of the country.Compared to the 6.8% projection from the previous year and the 7.2% target for this year, the real GDP expanded by a healthy 5.8% in 2007-2008.
Our main aims are threefold.First, we aim to grasp the socio-economic backgrounds of the people under our study, akin to delving into their life stories.Second, we're keen to uncover the reasons behind political issues, much like detectives unraveling a mystery.Lastly, we're intrigued by how these political problems influence the economy, resembling the way a storm can disrupt the calm sea.These are the areas we're investigating to gain deeper insights.

METHODOLOGY
A methodology is a way to look into how people behave in different social situations.Understanding social phenomena, such as the formation and development of relationships, patterns, and norms, is the aim of social research.Beyond a shadow of a doubt, science has shown that methodological tools, conceptualization and measurement techniques, and ways of interpreting results are essential to sociological activities.

Sampling and Data
Data were collected from the different areas of Faisalabad.The sample size of 80 respondents was selected through a convenient sampling technique.Data were collected with the help of a well-designed interview schedule.Descriptive and inferential statistics were applied for data collection.
We gathered information from various parts of Faisalabad.We chose 80 people to be part of our study using a method that was easy to do.We used a well-made list of questions to collect the information.Then, we used numbers and calculations to understand the data better.

Percentage
The study utilized percentages of various data categories to normalize the data and facilitate comparisons.
To ascertain the respective percentages, the following formula was applied: -

Regression Analysis
A collection of statistical techniques called regression analysis is used to assess the connection between an independent and dependent variable.When there are more than two independent factors and one dependent variable, multiple linear regressions are the preferred technique for determining the relative significance of each independent variable in explaining the dependent variable (Woehr & Cavell, 1993).Double-log regression was applied for data analysis.
Ln Impact = β 0 + β 1 Ln education + β 2 Ln Age + β 3 Ln Income + β 4 Ln family member (2) Where; Ln Impact = natural log of the impact of political stability on economic crises Ln Education = natural log of education ln Age = natural log of the age ln family member = natural log of a family member

RESULTS AND DISCUSSIONS
Table 2 shows that thirty percent of respondents were in the "old" age group (those 51 and older), twenty percent were in the "young" age group (those 20 to 35), and twenty percent were in the "middle" age group (those 36 to 50).Of the respondents, 10% had never attended formal schooling, 11.3% had finished middle and primary school, and 8.8% had earned a high school diploma.Approximately half (42.5%) of the respondents had a bachelor's degree or above, while roughly a third (32.5%) had dropped out of high school.Due to their status as students, 11.3% of respondents did not have any income; however, 62.5% of respondents made between Rs. 20000 and Rs.40000, 16.3% made between Rs. 21000 and Rs.40000, and 10% made more than Rs.40000.3 displays the results.Of the respondents, 61.3% felt their living conditions were satisfactory, while 38.8% disagreed.Of those surveyed, only over half (45%) were politically active, and the other half (55%) were less involved in politics.Rejecting the claim that Pakistan's political instability is an issue is only 13.8% of those surveyed.Of those surveyed, sixty-six percent knew about Pakistan's economic circumstances, and thirty-three percent didn't.Of those surveyed, sixty-seven percent were aware of Pakistan's economic problems, and thirty-three percent were not.Only 18.8% of respondents disagreed, yet a sizable 81.3 percent linked Pakistan's political unrest to the current economic problems.Of the respondents, just 42.5% thought that the current government could handle these crises well, and 57.5% thought that the government was unable to deal with these issues.Of those surveyed, 95% stated that the state of the economy had an impact on their day-to-day activities, and 5% claimed it had no effect at all.Table 4 shows the respondents' opinions about the causes of political instability.According to only 5.0 percent of the Respondents, military inferences are a cause of political instability, 26.3 percent stated that corruption and illiteracy, and 31.3 percent reported that the rulers and their personal interests are the cause of political instability.Only 6.3 percent of the respondents had the opinion that terrorism is a cause of political instability, and 10.0 percent of them had no opinion about it.
Table 5 shows that 10.0 percent of the respondents reported that terrorism was spreading due to political instability, while 7.5 percent of the respondent's opinion that the scornful behavior between provinces was due to political instability, and 15.0 percent of the respondents reported that no investment and no development due to political instability.Little less than one-fourth, i.e., 23.8 percent of the respondent's opinion that political instability is a cause of economic problems, and about one-third, i.e., 33.8 percent of the respondents, said that depression and unemployment increased due to political instability.Only one respondent's opinion that the increasing distance between leaders and people is due to political instability, and the remaining 10.0 percent of the respondents had no opinion about it.Table 6 shows that R-squared has a value of 0.50.This indicates that all four of the variables that were utilized to account for the 50% change in the view of how political stability affects economic crises were significant.This suggests that the model is statistically robust overall.To evaluate the model's general applicability, the F-test can also be utilized.The F-value of 28.45 is statistically significant at the 1% level of significance.This highlights the model's enormous importance once more.
Education: This variable's coefficient had a significant value of 0.067 with a positive sign.An individual's assessment of the correlation between political instability and economic crises improves by 0.067 percentage points for every extra year of education.
Age: In terms of statistical significance, the coefficient for this variable has a negative sign and a value of -0.291.It shows that with every year of age, there is a 0.291% decline in trust about the influence of political unrest on economic crises.
Income: With a value of -.104, the coefficient for this variable is statistically significant and extremely negative.The perceived relationship between political stability and economic crises is thought to diminish by 0.104% for every 1% increase in income.
Family member: The coefficient for this variable is positive, with a value of 0.043, and it's statistically meaningful.This means that when the number of family members increases by one percent, people's views on how political stability affects economic crises decrease by 0.043 percent.

CONCLUSIONS
It was concluded that political stability had a negative impact on Pakistan.Due to political instability and terrorism, other countries had no interest in investing in Pakistan; due to terrorism, foreign investors felt fear and avoided investment.The main and serious causes of political instability are the personal interests of our leaders, clashes between political parties, military interferences, and lack of mismanagement and mis planning.There is a direct impact of political instability on our economy.As a result of economic crises, depression, unemployment, and poverty have increased, and the lives of common people have also been affected.The educated and young people had the opinion that political stability had a negative impact on the country.

Table 2 .
Socio-economic and demographic characteristics of the respondents.

Table 3 .
Distribution respondents according to their opinions about the Political instability & economic conditions.

Table 4 .
Distribution of the respondents according to their opinion about the causes of political instability.

Table 5 .
Distribution of the respondents according to their opinion about the impact of political instability.