www.ignou-ac.

in

www.ignou-ac.in

www.ignou-ac.in

N
1
www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in1

www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in

ASSIGNMENT SOLUTIONS GUIDE (2014-2015)

E.P.S.-15
South Asia:Economy, Society & Politics
Disclaimer/Special Note: These are just the sample of the Answers/Solutions to some of the Questions given in
the Assignments. These Sample Answers/Solutions are prepared by Private Teacher/Tutors/Auhtors for the help
and Guidance of the student to get an idea of how he/she can answer the Questions of the Assignments. We do
not claim 100% Accuracy of these sample Answers as these are based on the knowledge and cabability of Private
Teacher/Tutor. Sample answers may be seen as the Guide/Help Book for the reference to prepare the answers of
the Question given in the assignment. As these solutions and answers are prepared by the private teacher/tutor so
the chances of error or mistake cannot be denied. Any Omission or Error is highly regretted though every care
has been taken while preparing these Sample Answers/Solutions. Please consult your own Teacher/Tutor before
you prepare a Particular Answer & for uptodate and exact information, data and solution. Student should must
read and refer the official study material provided by the university.

Answer questions in each category. Answer in your own words.

Answer any two of the following in about 500 words each.

Q. 1. Briefly describe the significant changes in Pakistans economy since its independence.
Ans. In 1947, the new state of Pakistan was formed, has to start from the scratch. Pakistan commercial
activities in the early years of its foundation was largely under the ownership of Hindus and Sikhs who left
the country with their capital which caused a vacuum in the country mainly in the trade and industrial sector.
The initial problems in Pakistan were also aggravated by the influx of a vast numbers of Refugees. It was
estimated that nearly 12 million people from India were migrated to Pakistan in the first three years of
partition. Further, the Division of Administrative machinery, Indian Civil Services and Indian Police Services also caused tensions in the economic development of the country. Out of 1,157 officers, only 157
joined the Civil Service of Pakistan, which became one of the most elite and privileged Bureaucracies in the
world.
The Early Years: Quest for Survival

In the first decade after the Independence, the task of economic planning and policy in Pakistan was
concentrated by the Bureaucracy. The focus was mainly on the Industrialisation. The Korean War of 1952,
benefited Pakistan with an increase in the demand for Pakistan exports, mostly the raw jute and cotton
which helped to laid the foundation of industries in Pakistan. With the end of Korean War, the rigid system
of Import licensing was imposed in Pakistan to have a control over the balance of payments situation. The
Licensing benefited the small numbers of industrialists. On the other hand, the Agricultural and Manufacturing
sector received a far greater state patronage. Those who had the command over the political system could
not handle efficiently the economic clout of the country. This resulted in the emergence of the Military rule
in the country to restore law and order and to promote the economic development in the 1950s.
The Ayub Decade of Development

General Mohammad Ayub Khans regime was characterised as most controversial, as it has registered
the impressive growth rates in the country combined with the increased economic inequalities and inter-

2
www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in2

www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in

regional disparities. The rate of GNP during his regime was around 6%. The growth of Agriculture was at
4.1 per cent, manufacturing growth rate at 9.1% and Trade 7.3%. However, the index of income inequality
was worsened and the rank of the poor was also increased. The living standards of the majority of population
were also stagnated. His economic policy was more concentrated on the Industrial Investment. Further,
Pakistan Industrial Development Corporation was created to provide capital, to spearhead the drive of
industrialisation and then withdrawing it for the private sector. But this policy lacked skills to undertake the
large projects. As the industrial profits were large in his tenure, the entrepreneurial class was emerged; they
provided dynamism to accelerate the rate of growth in the manufacturing sector to more than 15%. The land
reforms were also introduced in 1959 to make a dent on the stranglehold of the dominating landlord class
and also to encourage the capitalist agricultural development. The Green Revolution was also introduced in
the mid-60s to boost Pakistans agricultural growth through the diffusion of Technology. The Irrigation
facilities were also improved through the installation of the private tube-wells and increased use of chemical
fertilizers. But this also led to displacement of small farmers. So the results of the economic development
during Ayub Khans regime were mixed. The challenges it produced were had to face by the future regimes.
Bhuttos Experiment with Socialism
1971 was the period of political crisis due to the defeat in war with India and the cessation of East
Pakistan. With the end of war, Bhutto came to power encouraged a broad restructuring of the countrys
industrial and agricultural sector growth along the socialist lines. One of the key decisions of the Bhuttos
Administration was the devaluation of the rupee in 1972, by 57 per cent and abolition of the Multiple
Exchange Rate System. This led to the increase in Exports, Pakistan found new markets to replace the loss
of trade with its erstwhile Eastern wing. To reduce the concentration of wealth in the hands of private
industrialists he adopted the policy of Nationalisation. In 1972, all private banks, insurance companies and
thirty-two large manufacturing plants in eight major industries were nationalised. This led to the dramatic
change in Investment strategy from private to public. The outcome of the Nationalisation policy was not
much encouraging as the large scale nationalised sector performed very sluggishly, as many managers and
technicians of the country migrated to the Middle East to lure the higher salaries. One positive outcome of
this policy was the small sector manufacturing sector recorded a growth rate of 10% per annum compared to
4.2 large scale sub-sectors. The initiative was also taken for the basic industrial set up in steel, fertilizers and
chemicals which benefited the subsequent regimes. Whereas, the agricultural sector had a slow down due to
some climate shocks, shortage of irrigation inputs and diseases which affected the crops severely especially
the cotton production. One unfavourable trend was the difficulties in balance of payments and increase in
countrys external debts. The Bhuttos period also faced exogenous shocks like1970s, marked by the oil
price hikes induced by the newly formed OPEC cartel which created fluctuations in Pakistans commodity
prices.

Military Government of Zia

The period of military government of General Zia Ul Haq was a period of macro stability and a revival
of private investment. He introduced the Liberalisation of economy and Islamisation of society. His main
goal was to restore the political stability in Pakistan with this aim he revised the economic policy from the
public sector-led growth strategy.
The period of 1980s, witnessed the increased inflow of remittances averaging about $ 3 billion per year
for most of the decade. These remittances accounted for 10% of GDP and 45% of the current account
receipts. The Fiscal Deficits were increased during this period at an average 8% of the GDP in the second

3
www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in3

www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in

half of the 1980s. But this had serious repercussions for the public finances and macroeconomic stability in
the 1990s. At the industrial level, Zia encouraged the private sector investment. He denationalised certain
public sector projects. This period was also led to continued development of small-sector industries which
diversified the growth of the Pakistans industries. To restructure and reordering of the agricultural sector
the policies were adopted like the Deregulation of sugar, pesticide and fertilizer industries, the removal of
monopoly of the rice and cotton export corporations, the removal of bans on the private sectors imports of
edible oils. With the removal of subsidies from the pesticides and fertilizers, the price system of the Pakistan
became market-oriented. Overall, this period was of macro stability. However, the Bourgeoning Trade and
Budget Deficits did not bode well for the subsequent period.
Return of Democracy and Structural Adjustment: 1988-99
After the death of Gen. Zia the Democracy was restored with the general elections which were held in
the country in1988, though the country faced four general elections from 1988 to 1997. This political instability
and administrative adhocism was also reflected on the economic development. In this period governments
Non-Bank Borrowing created heavy Debt problems in the country. The Debt service in 1990s, with the total
interest payments was amounting to one-third of the total expenditures. While the fundamental consensus
between the major parties like PPP and Muslim League was observed but there was a lack of continuity in
their programmes and policies in 1988-97. The political leaders and powers were engaged in establishing
their own supremacy which caused disturbances in the economic development of the country. However,
some economic reforms were introduced in 1990s, The industrial licensing was abolished, the procedures
for foreign investments were simplified. To encourage Liberalisation, Deregulation and Privatisation of
industries number of policies were also introduced. A generous package of fiscal incentives Tax holidays,
Delicensing of investment regime, reduction of tariffs on capital goods were meant to encourage the flow of
private investment. However, due to the lack of transparency, the response of Privatisation has been halting
and hesitant. The agricultural performance was disappointing due to heavy floods and pest attacks which
reduced the cotton output during 1991-93. The fiscal imbalances combined with poor governance and instable
leadership has led to inconsistency in the liberal policy regime.

Economy in the New Millennium

On October 12, 1999 Chief of Army Staff Gen. Pervez Musharraf took over the countrys Administration.
During this period the economy of Pakistan was facing tough situation. The country was depended upon the
Foreign Loans for Deficit repayment. Pakistans growth of GDP was mere 2.2% and in 2001-02 it was 3.4%
and 2001-02 respectively. But these growth rates were lowest in the history of Pakistan. The performance of
agriculture was also discouraging recorded 2.64% and 0.07% in the first two fiscal years. The countrys
serious drought condition was also caused due to the shortage of irrigated water. In the aftermath of the
attack of 11 Sept., 2001 the countrys support to the US in the war against Taliban and the al-Qaida Movement
made it a frontline state. The US gave aid to Pakistan of one billion dollars and the Paris club creditors
helped to restructure and reschedule much of Pakistans external debt. The US further lifted all the economic
sanctions on Pakistan which were imposed against for conducting nuclear tests in the mid-1998. In the year
2002-03, Pakistan had a sharp recovery on the economic growth, with an equally impressive performance of
agriculture and large scale manufacturing while the problem of water shortage persisted.
Structural Change

Over period, Pakistans economy has undergone profound structural changes. Since the years of its
independence to the late 1990s, GDP growth in agriculture was decreased from 53% to the mere 24%, in

4
www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in4

www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in

manufacturing sector there was a sharp increase from 7.8% to 26.4% and trade and services contributed
3.9% to 49%. The labour force employed in agriculture declined from 65.3% in 1990-91 to 40.8% in 199495, the manufacturing sector increased the labour force from 9.5% to 18.5% while in trade and services from
25.2% to 3.7%. The increase in the percentage of rural population was also observed from17% to 40% since
1951.
Q. 2. Discuss the role of political parties in the political system of Pakistan.
Ans. The major factor of failure of Democratic Movement and Development of Pakistan was the weakness
of the Political Parties. The Muslim League also lost its credibility soon after the foundation of the new state of
Pakistan. The country was failed to frame or to adopt a permanent Constitution. For instance, the Constitution
of 1956 was promulgated which was suspended by Ayub Khan whose Constitution was based on indirect
voting system from top to bottom, had banned political parties for a long time. The first ever General Election
on the basis of Adult Franchise and Territorial Constituencies were held under the military rule of Gen. Yahya
Khan in 1970. The election resulted in the formation of Awami League Government which further became the
reason for the division of the nation into two separate wings. The PPP government was formed in the West
Pakistan was the First Democratic Government in Pakistan in 1971. Bhutto came to power when the country
was in great conflict on the issue of East Pakistan his party was not able to cope with the hostility of the people.
In these circumstances, Gen. Zia took the advantage and proclaimed the Military Coup in the country which
banned the political parties after his death. The country was rolling in the hands of different military rulers and
conduct fresh elections in short intervals, in Eleven years the country had Four elections till 1997 when Nawaz
Shrief government took office but it was also not able to defend itself from internal and external criticism
which led to the military take over by Mushraff in the wake of Kargil Defeat. Though there was an upsurge
against the army led government, Pakistan could not establish a Democratic System of Government .The
fractured nature of political parties in Pakistan was reflected during October 2002, elections in which some 71
parties were registered by the election commission. However, there were about nine Muslim Leagues, Three
PPPs and many religious parties which were represented by their factions contesting as independent parties. In
that election, since no party was in a position to form a government, the military pressurised some PPP members
to defect and help the PML (Q) to form the government, headed by Mir Zafarullah Khan Jamali which also
emerged as a weak government. In that situation Gen. Musharraf declared himself as a President for the next
five years.

Answer any four of the following in about 250 words each.

Q. 3. Define human development bringing out its various dimensions.

Ans. When the nations which were affected by the social and economic distortions caused by the colonial
rule began their process of reconstruction, a spate of development theories emerged with the simultaneous
emergence of new nations of Asia, Africa and Latin America. These theories were traditional in their approach
based on the Gross National Product (GNP) or one of its variants as an indicator of aggregate welfare of a
community.
In 1970s, equity considerations began to impinge on the idea of development which means to focus on
the requirements of the poor and disadvantaged in a society. The World Bank also considered this idea in
their concept of development. For this, the growth in the real income was the main target of development
plans of nations and international agencies concerned with development.
In1980s, many economists like Amartya Sen, Paul Streeten and Mahbub-Ul-Haq argued on this approach
that income should be regarded as a means for enlarging human choices and strengthening human capabilities

5
www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in5

www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in

not as an end in itself. This new thinking on development with people as the main focus has come to know as
the human development approach. The human development is the process of building human capabilities, to
improve their living conditions and welfare prospects, opportunities to have access to the natural resources,
education, information and knowledge, to have sustainable development, personal and social security and to
achieve equality, enjoyment of human rights and so on. The main emphasis of this approach was the quality
and distribution of economic growth for enlarging human choices and their availability to the people. The
economists by comparing per capita income with the indicators of education or health standards, demonstrated
that countries with higher levels of per capita income did not necessarily have better education of health
standards Amartya Sen, for instance, observed that the average life expectancy in Sri Lanka was 70 years,
whereas it was not more than 64 years in Brazil, even though per capita income of the latter was four times
greater than that of Sri Lanka.
The human development approach gained recognition when the United Nations Development Programme
(UNDP) presented its first human development report in 1990, which was prepared under the guidance of
Mahbub-Ul-Haq, defined human development as a process to enlarge the range of peoples choices by
expanding human capabilities and functioning. Further UNDP constructed the Human Development Index
(HDI) a cumulative measurement of three essential human choices required at all levels of human development:
Longevity, it is measured in terms of life expectancy. Knowledge, measured by educational attainment
percentage, combined gross enrolment ratio at various levels. Decent standard of living, measure by national
income or national; or income per capita in purchasing power parity in US dollar (PPP US $). This index
was constructed to bring forward the human development profile of all the countries in the world on the
basis of their overall achievement in these three dimensions of human development.

Dimensions of Human Development: Human development as stated above is concerned with the
widening of choices for the people. It has four essential dimensions. First is Equity or equitable access to
opportunities.
Second is Sustainability emphasis upon the sustaining of all form of capitalphysical, human, financial
and environmental so that the same opportunities for well-being goes to the future generation. Third is
Productivity, to achieve maximum potential for people and for their better economic efficiency. Finally,
Empowerment to increase the participation of people in activities, events and processes to shape their lives.
Over the period of time, the concept of human development became multidimensional by extended into all
areas of societal development to provide a link between income and welfare and opportunities for all on the
basis of equality, the special emphasis was on gender equality which was also reflected in the successive
UNDP annual reports. For instance, in the human development report of 1995, the focus was on gender
equality by including the gender related development index (GDI) to encounter gender bias in the three
central human capabilities. Mahbub-Ul-Haq also introduced the new index to human development reports
for the humane governance index, to indicate how the governments in the region are faring in terms of
servicing their citizens.
Q. 4. What are the major territorial disputes between India and Pakistan? How are they being
addressed?
Ans. Since the partition of India and the creation of Pakistan, the relations between the two countries
were not so convincing. The two countries were always engaged in the hostile, strained and conflictual
interactions and even in major wars. The question of Kashmir was the major irritant issue of their hostile
nature for each other. Pakistan always considered India as a threat to its security goals, though theres so
much common in their history, culture, language, religions and geography.

6
www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in6

www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in

Pakistan has a bitter memory in the pre-independence era, the rift between the Indian National Congress
and Muslim League became the major cause of the partition of India and creation of Pakistan. Despite, many
of those who now live in Pakistan did not approve of the two-nation theory. The pro-Pakistan movement
received support mainly from the Bengali Muslims and the Muslims of north-central India, even this support
did not come from the masses particularly, but the Muslim elites. The bitterness in the Pakistani power
structure still permeates which was heightened by some issues at the time of partition and post partition.
At the time of integration of princely states, all states gradually decided their fortune whether to remain
independent or to accede to India or Pakistan except Junagadh, Hyderabad and Kashmir which after strong
action by India acceded to India which was against Pakistan desire. But the accession of Kashmir either to
Pakistan or India remains an unresolved question. Indias strong action in these states generated a genuine
apprehension that India would try to nullify the partition by subverting the state of Pakistan. Another issue
of Division of assets at the time of partition and the problem of sharing water of rivers of Ravi, Sutlej and
Beas was also led to the cause of hostile relations between the two and convinced Pakistan that India have
disruptive plans. The issue which worked as a fuel to the fire was the issue of liberation of Bangladesh. The
conflict of 1971, tempered the Pakistans inclination towards military adventurism for getting even with
India, but short of that its power structure continues to have the same mindset.
The erstwhile native state of Jammu and Kashmir, having total area of 86,024 square miles. After the
partition and the lapse of British paramountcy, the Maharaja of Kashmir, Maharaja Hari Singh decided to
postpone the decision regarding the issue of accession to India or Pakistan. Pakistan thereupon conceived a
plan to secure Kashmir with the help of tribal raiders. The Pakistani launched the attack on October 22,
1947. Overawed by this attack Hari Singh decided to accede to India for securing the Indian help in repelling
the invaders. The accession of Jammu and Kashmir was finalised by 27 October, 1947 and the army was
airlifted to clear the aggression. The Indian government further gave an assurance to the people of Kashmir
that a plebiscite would be held for determining the Kashmir issue. Pakistan however rejected the accession
of Kashmir to India and this led to the emergence of the Kashmir dispute between India and Pakistan. In
November 1947, Lord Mountbatten tried to settle the dispute between the two nations but his efforts yielded
no results. India took the issue to the Security Council under article 35 of the charter. The Security Council
took many decisions on this issue starting with the appointment of a three member commission on January
20, 1948 which was subsequently expanded and came to be known as United Nations Commission for India
and Pakistan (UNCIP). UNCIP submitted its report on December 11, 1948 on the recommendations aimed
at ending the hostilities and holding of plebiscite. After the initial reluctance Pakistan accepted these proposals and a ceasefire agreement was signed and the war was ended. An agreement on ceasefire line was
reached in Karachi on 27th July, 1949. It left 32,000 sq. miles ofJ & K territory in possession of Pakistan
which is called Azad Kashmir by Pakistan. Subsequently many proposals were formed by United Nations
but none of them was able to resolve the Kashmir dispute. In the meanwhile, Constituent Assembly was
elected ratified the states accession to India on February 1954. A constitution of the state was adopted on
November 19, 1956 which declared Jammu and Kashmir is integral part of India. The Kashmir issue since
then has risen time and again by Pakistan in the United Nations through western pressures or through other
violent means. Pakistan is also creating disturbances in Kashmir through cross-border terrorism, waging
wars which endangering the lives of the people living there and by instigating them against India for becoming a part of Pakistan. Despite, Indias best attempts to normalise relations between the two countries.

Q. 5. Describe the nature of Bhutanese economy and examine the role of India in its exonomic
development.

7
www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in7

www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in

Ans. Until the advent of planned economic development in the early 1960s, Bhutans economy was
characterized by an extreme degree of Isolation and pastoral self-sufficiency. Almost the entire population
was engaged in Subsistence Agriculture. The infrastructural facilities, skilled manpower was lacking. There
were only 59 primary schools no middle or high secondary schools. There were only four hospitals and
eleven dispensaries and only two hospitals had qualified doctors. There was lack of transportation and
communication facilities with no motorized vehicles, or metalled roads, no electricity, no postal system,
telephones to connect the country with outside world.
As a result of its complete isolation policy from the modern world, in 1960s, UN estimates placed
Bhutan at the bottom of the economic growth ladder, with the lowest levels of per capita income.
Development Efforts
The idea of Planned Economic Development of Bhutan was conceived when Jawaharlal Nehru, the
Indian Prime Minister, visited Bhutan in 1958. By then the Bhutanese leaders had become aware of their
country could not continue indefinitely in isolation, for the countries around it were moving ahead in the
growth of communication and social service. Hence, Bhutan admitted to the UN, became its member to
project to the world its image as a progressive country with concern for the welfare of its people.
The monarch initiated the process of changed planned development efforts to open up with the outside
world and to end isolation. Therefore, the First Five Years Plan (1961-66), were designed with the help of
the Planning Commission of India. This plan, as well as the subsequent plans was financed by India. In a
way, the Bhutanese economy over a period of last forty years has become heavily dependent on Indian
assistance.
1n 1972, Bhutan established a Planning Commission; the King is the ex-officio chairman of the Planning
Commission. Over the past four decades, the top priorities of their various development plans have been: (i)
Building an Infrastructure (ii) Self-sufficiency in Agriculture and Food (iii) Education, and (iv) Transport.

In the recent years the development of Horticulture, Hydel-power generation, Conservation and Proper
utilisation of forest wealth and Promotion of medium and small-scale industry were also included in the
development plans.
Indias presence has been a significant feature in the development efforts of Bhutan. For instance, the
Hydel Electorate set-up in Bhutan with the help of Indian engineers. Similarly, the Telecommunication
system and Highway constructions are done by Indian engineers. The government of Bhutan has set-up its
own bank, the Bank of Bhutan in 1968, in collaboration with the State Bank of India to advice Bhutanese
government in Monetary and Banking affairs.
During the Eighth five year plan (1998-02), Bhutans real GDP (National Income) grew at 6.7% per
annum, led mainly by forestry and livestock. The industry sector grew at 7.1% wherein construction activity
and electricity generation performed well. The Hydropower development in 1990s has become the principle
source of Bhutanese growth. The electricity generated was exported to India, earning revenue to the Bhutanese
government. The gradual improvement was also observed in the transportation and communication system
helping to attract tourists from outside in country.
However, the limited existence of the Private Sector restricts generation of Domestic Investment; in the
absence of the domestic investment the economy is heavily relied on the external loans and debts to meet the
needs of the economy.
Social Sector

Since the beginning of the 1980s, there has been a remarkable improvement in Bhutanese social sector.
For example, in Health Indicators, Life Expectancy has risen to 68 years in 2001 from 36 years in 1961.

8
www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in8

www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in

Similarly, between 1986 and 2001 the Infant Mortality Rate has decreased from 143 to 62 per 1000 live
births and the Maternal Mortality Rate from 7.8 to 2.7 per 1000 live births. The Mortality rate for under-five
declined from163 to 85 per 1000 live births.
In the last four decades, there was a considerable progress in literacy rate. In 1960, less than 500 children
in the whole country attended secular primary schools and till 1964 there was no secondary school in the
country. In 2001, about 75% children (of the total child population) attend primary school and of them 47%
are girls. The overall adult literacy rate in 1998 was 55 per cent and for women it was 30%.
On Employment front, the progress was somewhat modest mainly because of limited private sector
advancement and public sector cannot provide jobs beyond certain limit. The lack of basic infrastructure
such as roads, ports and power constraining the expansion of medium and small-scale industry. The capital
intensive nature of industrial development in Bhutan is also limiting employment generation in the public
sector. Since the spurt in social uncertainties is mainly because of the rising unemployment, the government
has started focusing on the basic infrastructural facilities and in recent years started promoting private
sector.
Bhutan to open up with the modern world and to end isolation adopted five year plans to have a planned
economic development in the country which made possible with the help of India who funded its First Five
Year Plans as well as subsequent plans. The First Five Year plans were designed by the Planning Commission
of India later in 1972, Bhutan established its own Planning Commission.

The significant feature of development efforts in Bhutan was the prominent presence of Indian expertise
and resources. For example: the Hydel Electorate was set-up with the help of Indian engineers. Similarly,
the Telecommunication system and highway construction are done by Indian engineers. The government of
Bhutan has set-up its own Bank; The Bank of Bhutan in 1968, has entered into collaboration with the State
Bank of India to advice Bhutanese government in monetary and banking affairs. The use of Indian currency
and coins is valid in Bhutan.
In a way, the Bhutanese economy over a period of last forty years has become heavily dependent on
Indian assistance.
Q. 6. Briefly describe the features and challenges facing the Maldivian economy.
Ans. The Maldivian economy is based on both modern and traditional sectors. Tourism and Fishing are
the two main important industries. Tourism is the largest industry in Maldives accounts 30% of the GDP and
over 80% of the foreign exchange earnings. The fishing is the second leading sector contributes approximately
10% of the GDP since the use of the nets is illegal; the fishing is done on line. The fish production consists
primarily of Skipjack Tuna. About 50% of the product is exported to countries like Sri Lanka, Germany, the
United Kingdom, Thailand, Japan and Singapore. Apart from this, agriculture, shipping and other traditional
industries contribute substantially to the economy of the country. The agriculture provides about 6% of the
GDP. While the other industries such as boat building, mat weaving, rope making, handicrafts and other
cottage industries account for about a quarter of the work force. This sector provide for about 7% of the
GDP, employs considerable number of women.
Fiscal Policy

Maldives in socio-economic terms is categorized as one of the Least Developed Countries in the world
by UN and other development agencies for its poor GNP and standard of living. However, since 1970s,
government initiated plans to develop its economy by expanding to other new areas like tourism and shipping.
New technological innovations were applied to modernize the fishing industry. In 1989, for the rapid industrial

9
www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in9

www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in

and fiscal development of the country, the government liberalised regulations to allow increased foreign
investment, by lifting import quotas and opened some exports to private sector. Over the years Maldives
have received economic assistance from multilateral agencies including the United Nations Development
Programme, Asian Development Bank, and World Bank. Several individual donor countries like Japan,
Indian, Australia, European and Arab countries have also contributed in the economic development of
Maldives. 2007, estimates show the Maldives enjoy the highest GDP per capita $4,600 (2007 est.) amongst
South Asian Countries excluding rich Persian Gulf countries.
Write a short note on any two of the following in about 50 words each.
Q. 7. Fall of Ranacracy
Ans. In the beginning of the Second quarter of the 20th century democratic ideas began to take roots
those Nepalese soldiers who participated in the First World War they exposed their new ideas. The Nepalese
who were studying in Indian Universities during freedom struggle were highly influenced by the Indian
National Movement. The efforts were made by the citizens, organised themselves to bring democracy. The
newspapers, Kumaon and Benaras were the medium to criticise the harsh repression of Ranas regime for
people. By 1935, Nepalese exiles set-up the first Nepalese Political Party Praja Parishad (Peoples Council)
which advocated the democratic government and removal of Ranacracy. In 1946, Nepali Congress came
into being on the Indian soil. The Ranas major support was the British Indian Authority, their withdrawal
from India weakened Ranas position in their Kingdom. The rise of communists in China also made the
ruling class panicky. The liberal section in Ranas regime led by the then Prime Minister Padma Shamsher,
suggested conceding a Constitution to contain the Nepalese Movement. But the efforts of the people were so
intensive that the Prime Minister was forced to resign. In this situation, the leaders of the movement received
support from the Monarch, who was kept in isolation by the Ranas. The democratic upsurge in Nepal was
also supported by independent government of India. The Nepalese popular movement launched from India
overthrew the Ranas regime in 1951. King Tribhuvan who fled to India in 1951 was restored to his position,
free from the control of Ranas. In February 1951, a coalition cabinet headed by Mohan Shamsher was
formed as an Interim Government with five Ranas and five Nepali Congress party members until the new
elections will be held. It was also agreed to establish Constituent Assembly for framing of the constitution.
Q. 8. Rise of bureaucracy-army coalition in Pakistan.
Ans. In the early years of the new state of Pakistan the political leadership saw a decline and eventually
reached a state where the Military takeover was an only solution. The Praetorian state and the civilian
institutions fell weak. Therefore, to fill the vacuum in the institution and leadership the military rule came to
hold the political power. The scholars like Lucian Pye and Morris Janowitz et al portray the military as being
more sensitive to the forces of social and political change.
The military intervention in the country was seen as a positive force by many with the interregnum of
civilian rules that is the legitimacy of civilian supremacy in theory remains. The uniqueness of the Military
intervention in Pakistan by all general from Ayub to Musharraf is that initially after capturing power they
promised to return to civilian order as soon as possible. The Gen. Musharraf launched in his tenure a massive
devolution plan of setting up a Grass Root Participatory Democracy. Gen. Zia kept his promise to hold the
elections in 90 days at best in the name of Party-less elections only towards the end of his tenure. Another
lesser known feature of civil-military relations in Pakistan is whenever the military rulers came to power is
at the end of the chaotic civilian order. The counterpoint here is the army in Pakistan is an accepted fact
which needs to be looked at differently, have represented the country at different forums as the Guards in the
External Security of the Nation.

10
www.ignou-ac.in

www.ignou-ac.in

www.ignou-ac.in10