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Prologue

"I Nawaz Sharif, do solemnly swear that I am a Muslim and believe in the unity and oneness of God.
That I will bear true faith and allegiance to Pakistan.
That as Prime Minister of Pakistan, I will dischage my duties and perform my functions, honestly, to the best of my abilities, faithfully, in accordance with constitution of Islamic Republic of Pakistan and the law. and always in the interest of the sovereignity, integrity, solidarity, well being and prosperity of Pakistan.
That I will strive to preserve the Islamic ideology which is the basis of the creation of Pakistan
That I will not allow my personal interest to influence my official conduct or my official decisions.
That I will preserve, protect and defend the constitution. That in all circumstances......................."
As Pakistan's first industarialist Prime Minister was rapeating the oath of his office read by Presidant Ghulam Ishaq Khan on Nov.6 1990 in the Darbar Hall of the Presidancy, my mind was racing back to Dec. 2, 1988 when in the same hall another Prime Minister Benazir Bhutto, was administered the same oath by the same Presidant. Bhutto was dismissed disgracefully in twenty months by presidant Ishaq on charges of corruption and inefficiency, leading to another elections which brought Nawaz Sharif to power.

A day before taking oath, Benazir met Presidant Ishaq and Army chief Aslam Baig and on return from the meetings told a press conference at the residance of her host, Dr. Niazi, "We are not coming as free agents".

Benazie Bhutto had the grace to accept before the national and international press that her government would be a chanined one, not completely independant in all respects. But unlike her Nawaz Sharif is man of few words. It is said that a politician without words is like gun without bullets, useless if not worthless. He was therefore, an interesting political case-study because he has reached the top not by climbing the ladder, rung by rung but as though some supernatural power had positioned him there.

How was it that he reached the second highest political office in country without milling through streets of Pakistan, as expected of a politician? Who were his invisible supporters and mentors? What was his real strength? Was it his economic power or his avowed opposition to Benazir Bhutto?

These were some of the questions in my mind as I watched Nawaz Sharif take oath that day. I am sure similar questions must have crossed minds of others who were watching the cermony on Pakistan Television.

In his book " A study in the power of money today in USA", Ferdinand Lindberg says that it is in the very nature of power to exert itself and thus it were the owners of wealth who were making or frustrating public politics in the United States. Was Nawaz Sharif also a case of money exerting itself to make or unmark public policies in Pakistan? I asked myself.

It is said that some people are born great, some achieve greatness and some have greatness thrust upon them. The Pakistani politics abounds in people who had greatness thrusted upon them, by establishment or "agencies" which are said to be ruling Pakistan. Was Nawaz Sharif another case of greatness being thrust upon him or was he being thrusted upon the people of Pakistan? I asked.

It were these questions storming my mind as I sat in the Darbar Hall of Presidancy that gave birth to the idea of this book. I promised myself to study Nawaz Sharif's style, politics and economic policies. It was not meant to be something personal, an inquiry into the value and assests of a man who had risen to be Prime Minister of Pakistan. It was to be the study of a phenomenon, an inquiry into wealth of of the 22 families and the process by which they acquire and accumulate wealth and power.

If Nawaz Sharif was not a case of wealth exerting itself then how to explain the entry and rise of an industarialist in the portals of power?

Technically this study should have taken five years but I had a premonition that if I was planing the study of the tenure of new Prime Minister then I would have far less than the five years of stipulated term. The premonition was strengthened when immediately after the oath taking ceremony, my friend Ghulam Hussain of the Urdu language periodical "Sayassi Log" invited me and Anwar Mansuri of German Press Agency DPA to his room in Islamabad Hotel and predicted over a cup of tea that Nawaz Sharif would not last more than a year.

His prediction would have come true but like his opponents, Nawaz Sharif's mentors also underestimated the strength and resilience of their protege. Many people, including his opponents fail to realise that like Zulfikar Ali Bhutto's legacy, Nawaz Sharif is and will always remain a force to reckon within Pakistani politics, because he was reaction to Bhutto's politics. And according to Newton's third law of force reaction is always equally strong, in the opposite direction.

Nawaz Sharif was not an individual. He symbolizes a state of mind contrary to Z A Bhutto and his philosophy and thought's were born out of ashes of Bhutto's autocratic rule, particularly nationalization policy. Even if, by a magic wand Nawaz Sharif was to disappear from Pakistan's politics, somebody like him would always be there to lead the powerful allied forces opposed to Z A Bhutto and his philosophy.

It was on Oct 24, 1990, that I took first small step for the accomplishment of my self-assigned task by writing two letters, one addressed to Prof. Gustave Papanenk of the Boston University and the other to Prof. Lawrance White of the New York University. The two were well-known for their exhaustive study about the 22 families in Pakistan in the pre and post nationalization periods.

In my letters I told them about my intentions to update their work and sought their advice. Papanek responded and among other things suggested that while ranking the 22 families, I should also find out the worth of their unlisted public and private limited companies, since the previous studies were based on the assests held by these groups on Karachi Stock Exchange (KSE). That was a tall order that I have accomplished only partly and hope that some other enterprising and more resourceful journalist would follow it up.

Next I wrote letters to the 22 families, stating that I wanted to write about the poineers of industarial development in Pakistan and would they care to provide me some literature about their groups and ancestors who had founded them. I got only three responses.

Even my bids to meet Farooq A Shaikh and Sadaruddin Hashwani who reside in the twin cities of Rawalpindi and Islamabad failed. It was only while I was finally brushing my books I managed to meet Shaikh and Hashwani, besides Nasim Saigol and Razak Dawood after hectic chase. Despite telephone calls I failed to meet Mian Mansha who was the one man I wanted most to meet because his Nishat group has emerged as Pakistan's biggest group in my ranking. I decided therefore, at the outset that instead of trying to meet the members and leaders of 22 families, I will talk to people around them, their present and former employees, officials and people in the corporate sector, who might have worked and dealt with them.

I have been reporting economic affairs for nearly thirty years and have covered all the federal budges, except in 1980 when I was abroad. During 1971-77, Pakistan People's Party, government of Z A Bhutto, I had rapport with Feroz Qaisar, special assistant to Prime Minister and Rahim Jan, Chairman, Corporate Law Authority ( then called Securities and Exchange Authority of Pakistan or SEAP). They were always ready and willing to talk and listen. It was mainly through listening to them that I developed interest in the working of the corporate sector.

Since most of my work as an economic reporter was limited to covering the government policies in Islamabad, my knowledge of the corporate sector and big business was rudimentary. My first job, thus, was to identify companies by groups. It took two years to identify the major groups and their companies. I found out that several of the proverbial rich groups were not rich anymore and had moved abroad, became extinct or grown small through divisions and subdivisions.

Bitten by Bhutto's nationalization and furor over the concentration of wealth, the proverbial 22 families started covering their tracks in the 1970's, arranging their eggs in different baskets, digging-in, dispersing and making it difficult to identify them. However, if there is a will there is a way.

I read thousands of corporate reports of companies listed on Karachi Stock Exchange and company reviews in newspapers. Courtasey Shaikh Ikram ul haq of the Daily, Buisiness Recorder of Karachi, I scanned the newspaper files for the last ten years. I had hardly started arranging the book in my mind when Nawaz Sharif started on the collision course with Presidant Ishaq. Sands of time started running out for his government.

Nawaz Sharif's exit from power came in August 1993 and, unfortunately, for my book. By the time I had not yet started writing the book. It was only in January 1994 that I sat down at my computer and slugged my first chapter, under the file BBR (Bismallah Al Rehman Arahim), an abbreviation borrowed from BBR, Modaraba of the Dawood group. I sat out to identify and rank the super rich in Pakistan, trace their origin, chart their growth and find out how at least some of them became overly riched overnight. But book in the reader's hands is not simply about the wealth of the 22 families or their indictment for accumulating it dubiously.

Z A Bhutto demolished monopolies and Nawaz Sharif attempted to reincarnate them. And although what each professed and did was the need of the hour, both became the victims of haste. One nationalized and the other privatised. Nationalisation retarded Pakistan's growth in many ways but its worst consequence was the scars inflicted on the psyche of the big business, evergreen even two decades after the nationalization. It alienated the industarialilst from the economic mainstream and, as if by a collective decision, several of the original 22 families who poineered development in Pakistan switched off investment in long gestation projects. The Pakistani businessmen who were planing mega projects in 1971 and are still capable of setting up mega projects resigned to remain spinners, sugar manufacturers or best at best cement manufacturers. The reservation on the part of the people who had the surplus capital and the know-how to lead the country to a take-off stage remained to date the single biggest factor holding up the flowering of country's full economic potential.

A white paper on " Economy under Bhutto", released by Zia ul haq in 1979 had observed that " nationalization of industaries by Bhutto was intended to break the economic potential of any possible political opposition. At the same time it (nationalization) placed with the government tremendous power of patronage, resources and employment opportunities which could be used for the support of party in power".

Ironically the same argument was used by Benazir Bhutto and her allies against Nawaz Sharif's privatization. It was stated in speeches and press conferences by the Pakistan People's Party leaders that if Nawaz Sharif was allowed to procede with plans for privatization, he would bring about such a concentration of powe in the hands of a "coterie of business class" that it would be impossible for any political party or organisation to defeat him and his friends.

The book in the following pages, thus, is not merely an academic journey into two recent eras of Pakistan's economic history. It is an investigation into the causes of concentration of wealth in few hands, effects of nationalization of key industrial units and two decades later their privatization. Like Charles Dickens "Tales of two cities", Bhutto's nationalization and Nawaz Sharif/ Benazir's privatization promised light but brought darkness, spring of hope that turned out to be winter of despair.

Pakistan's Economic Saga

Table of Contents

Introduction

Robber Barons Of Pakistan