Entry Alphabet Job Country






Ishrat Hussein

 Ph.D, Boston University

Central Bank

From December, 2, 1999

Adjunct Professor
of Economics
at Karachi University



World Bank:

Director for Central Asian Republics

Director, Poverty and Social Policy

Chairperson of the World Bank's
Public Sector Group.

Chief of the Debt and International
Finance Division

Chief Economist of the World Bank
for East Asia and Pacific region

Chief Economist for Africa between 1991-94
Resident Representative in Nigeria

 Before joining World Bank:

Senior managerial positions in  the Planning
and Development Department and
Department of the Government of Sind.

The issue of the Islamicisation of Pakistan's banking sector is still under review by the religious courts and a final ruling is unlikely in 2003. The governor of the central bank, Ishrat Hussein, has indicated his desire to allow clients freedom of choice between Islamic and conventional banking.

DAWN 07 May 2001

KARACHI, May 6: State Bank of Pakistan Governor Dr Ishrat Hussein said on Saturday that, due to some technical constraints, complete elimination of Riba from the economy was not possible immediately after July 2001 as per directives of the Supreme Court. .... Dr Ishrat said the country was caught in a serious financial crisis. He said that if any experiment of enforcing a whole new system would be carried out, it was feared that the attempt would lead to collapse of the system. He said the implementation of the new system was a big challenge and arrangements would be made from July to implement it.


DOWN 21 January 2003

KARACHI, Jan 20: The speakers at the ceremony on Sunday night, which was held to mark the Karachi University Day, expressed their dissatisfaction over the performance of the present managers and the teachers of the varsity. ......
Dr Hussein informed all those present that recently the State Bank conducted a test of 600 people who had applied for some 30 positions of economists. "To our utter horror only 16 applicants managed to pass the examinations. This is the quality of our graduates," he said. pk

Dr Ishrat Hussain given 3-year extension as State Bank of Pakistan governor
ISLAMABAD (November 12 2002) : President Pervez Musharraf has approved three-year extension for Dr Ishrat Hussian as Governor, State Bank of Pakistan.
Dr Ishrat rejoined public sector as Governor SBP in December 1999 just after the military took over. ...After years of depreciation, the rupee saw a period of stability and confidence in domestic currency was established as the glitter in economy faded. The rupee is now getting stronger and stronger.



Welcome to Pakistan Page

Excerpts from
How the elite captured power


 The author is a Director at the World Bank. The views expressed in this article are his personal views and do not represent those of the World Bank, its management or the Executive Directors


ONE of the most interesting questions that has been posed in regard to the thesis of elite capture of economic and political power in Pakistan is: how was this elite class formed and how were they able to capture economic power? There are at least six distinct episodes which have contributed to the formation of various elements of the elite class in Pakistan........

First, the inherited colonial legacy of a strong paternalistic "mai-bap" kind of relationship between the British rulers and the population at large was transmitted intact to their successor - the Pakistani civil servants....

Second, at the time of independence, Pakistan had a land tenure system in Punjab and Sindh dominated by zamindars and jagirdars. Basically, the zamindars and jagirdars possessed large tracts of land and practised an exploitative system in which peasants were without legal protection and the forum of settlement of disputes was heavily biased in favour of the zamindars.....

Fourth, the boom after the Korean War in the 1950s resulting in a dramatic increase in the prices of jute and raw cotton created a commodity boom whereby many traders rushed into the import export business to make quick profits....

Fifth, the martial law regime of Ayub Khan during the decade 1958-68 gave rise to a new sub-class of elites - the military officials....

Sixth, the earmarking of development funds from the budget to the politicians under the Basic Democracies of Ayub Khan, the People's Works Programmes of Bhutto, and followed by similar schemes designed by Mohammad Khan Junejo, Benazir Bhutto and Nawaz Sharif governments paved the way for the enrichment of the elected officials....

While these six distinct episodes can be traced to various points of time, the cumulative result of the capture of economic and political power by the elites has been slow and gradual decay of the institutions and a breakdown of the governance structure. Tax officials at all levels collude with unscrupulous taxpayers to deprive the state of its dues and acquire wealth for themselves and the tax evaders. Police officials have become a source of fear and terror rather than that of protection of the common citizen.

    Judicial process is so slow, cumbersome and loaded that it is unable to provide relief or redress to those who are wronged. Educational institutions have been taken over by hooligans, bullies and dishonest teachers and heads. Statutory regulatory orders (SROs) are used frequently to confer large windfall gains on the privileged by restricting imports of essential commodities for a limited period and allowing the domestic prices to sky- rocket. There are innumerable examples from all spheres of economic life.

In case of Pakistan and other elitist states, the dichotomous relationship between market failure and government failure has become irrelevant. It is the combination of market failures and government failures mutually reinforcing each other which has created winners among the elite classes while the rest of society is the loser and has to pay for those gains.


Excerpts from

The political economy of Pakistan can be adequately unraveled by understanding the dynamics of the elitist model of growth within which, in the considered opinion of this writer, the whole politico-economic processes unfold. We seek to explain as to why the elitist growth model was successful in Pakistan and what can possibly be done to weaken the grip of the elites and thus change this past pattern of growth. This scholastic exercise has been carried out in the earnest hope of bringing about a fundamental change in the lives of the ordinary people of Pakistan. These observations are thus rooted in the literature on the political economy of developing countries.

....a number of characteristics can be identified that make this type of model work in practice. The essential ingredients are:
(a) a strong leader or succession of leaders who enjoy almost regal powers and implement their own agenda with few or almost no checks and balances;
(b) a powerful bureaucratic class that implements the wishes of the leader without questioning their legality or relating them to the larger public interest and in the process arrogates to itself the task of defining the goals of the State, which are made to coincide with its own; and
(c) a dormant and subservient population that is passive and indifferent to the actions of the leaders and bureaucracy.

For almost half of its fifty years Pakistan was governed by strong military leaders and for the other half by strong civilian leaders who unwittingly adopted the same military leaders as their role model. Although the Eighth Amendment introduced checks on the powers of the Prime Minister in actual practice this had little effect. The elected governments were dismissed four times between 1988 and 1996 on charges of corruption and excesses.

The bureaucratic class was a powerful ally of the strong leaders until 1973 and played a major role in advising and implementing the agenda for their political masters. After 1973, when they lost their security of tenure the nature of the alliance shifted to that of a docile, subservient, and unquestioning group of functionaries who diligently carried out the orders of the politicians---right or wrong.

Until recently freedom of expression, freedom of association and freedom of the Press were severely curtailed. The majority of the population was uneducated and illiterate and used to a tradition of a paternalistic way of governance inherited from the colonial period and cemented by the subsequent autocratic rulers.

In the case of Pakistan and a number of other countries the poor have been prevented from sharing equitably in the general increase in output by a number of specific disabilities that can be summed up as lack of physical and human capital and lack of access. In the political economy of growth in Pakistan, as narrow minority of influential elites drawn from the landlords, political parties, the military civil servants, big business and the professional class dominated the scene throughout the past five decades and maximized their rent-collecting activities. As demonstrated earlier this was the main stumbling block in securing access to public services by the poor and their acquisition of physical and human capital.







Designed and maintained by Oldrich Kyn .
If you want to send me a message, please
use the  following e-mail address: