Ironically, while most intellectuals condemned Ayub Khan’s policies, it was these policies which gave rise to populism and brand of policies particular to Zulfiqar Ali Bhutto, who was supported the same intellectuals. Without Ayub, Bhutto would no have been possible. Bhutto’s economic policies were more illiberal than those of his predecessor and his nationalism was said to be the major cause for a huge downward trend in growth. However in 1970s GDP grew by close to 5 percent, which indicates the need, as in the case of Ayub, for a thorough reexamination of the economic programme of Bhutto.
Bhutto’s economic programme has been labeled a failure by his critics, and even his supporters have, under the barrage of propaganda and the changed world situation , at best been apologetic and at worst joined the maligning chorus. In many ways he was an unlucky politician, and events beyond his controlled affected his economic programme. The economic loss of East Pakistan was strongly felt- West Pakistan ‘exported’ 50 percent of it’s good to the eastern wing and acquired a large amount of foreign exchange from it’s raw material exports. The devaluation of the Pakistani rupee by 120 percent in May 1972 brought significant dividends in terms of export growth- in one year (1972/3) despite the loss of East Pakistan’s exportable produce, West Pakistan doubled its foreign exchange earnings. However the 1973 OPEC price increases played havoc with Pakistan’s import bill and the balance of payments deteriorated. Also, the period after 1973 saw a serious worldwide recession affecting Pakistan’s exports. Recurrent domestic cotton crop failures and floods in 1973, 1974 (along with pest attacks) and 1976, affected Pakistan’s main exports. The large nationalized units taken over by Bhutto were the most inefficient in the industrial sector, and despite this industry experienced a reasonable growth rate with the nationalized sector doing better than believe.
Bhutto’s government also laid the foundations for future growth and development from which his successor benefitted. Basic industries were setup and a base for capital goods industry were established which resulted in subsequent growth. The Middle East boom which Bhutto’s initiated another irony in Pakistan’s history helped keep Zia in power for some years. The illiberal economic policies of Zulfiqar Ali Bhutto were responsible for growth not only during his own tenure but also in the period after 1977.