*** “Our foreign policy is one of the friendliness and goodwill towards all the nations of the world. We do not cherish aggressive designs against any country or nation. We believe in the principles of honesty and fairplay in national and international dealings and are prepared to make our utmost contribution to the promotion of peace and prosperity among the nations of the world.” **
** Broadcast Message February, 1948 **
**
"We must work our destiny in our own way and present to the world an economic system based on true Islamic concept of equality of manhood and social justice. We will thereby be fulfilling our mission as Muslims and giving to humanity the message of peace which alone can save it and secure the welfare, happiness and prosperity of mankind”
(Speech at the opening ceremony of State Bank of Pakistan, Karachi
July 1, 1948)
I want to add a little about financial conditions of Pakistan soon after independence.
When Pakistan was Pakistan — I
Ambassador’s Diary
Dr Samiullah Koreshi
Published in Pakistan Observer.
After over coming the dark days of 47-48 contrary to the general belief now, Pakistan soon built a balanced economy, our currency was strong for at least four decades, cost of living was low and we used to boast that whatever happens our people will never have to sleep without bread and butter, as our agriculture was very productive Pakistan’s birth was attended with extreme difficulties. It was a miracle that it survived despite those problems. We created a state from the scratch. No industry, no state infrastructure, not even tables and chairs or buildings for its offices, settling seven million Muslim utter destitutes refugees expelled from India was a problem. There was no UN Refugees Rehabilitation organization. Pakistan had no currency of its own, it was to receive its share from division of the Indian State Bank. Indian Dy. PM Patel stopped these funds from going to Pakistan, it was then using Indian currency not having its own State Bank Pak Government had no money to pay its employees. It was in this desperate it was claimed that the Quid, according to Mir Laiq Ali, asked him ”Pakistan, is .. in urgent need of finances, .internally and foreign exchange “ Mir Laiq Ali claimed that the Quaid asked him to go to US and Europe .and prepare ground for a substantial loan and aid ” Mir Laiq Ali said , the Quaid told him “ Pakistan would accept any reasonable term short of affecting its hard earned sovereignty.” However there is no evidence that any negotiations took place with US on this suggestion.I also doubt that Quaid could have asked him to seek laons from an utterly WWII devastated bankrupt Europe which was already being reconstructed by US $ 2.5 billion Marshal aid. However, Mir Laiq Ali says on next page “ Soon after that Nizam sanctioned a loan of Rs 20 crores. Mr Jinnah lost no time in announcing that Pakistan had received a loan of that sum from Hyderabad and that Pakistan had no further financial problem “ ( P 70, Mir Laiq Ali: M A Jinnah). I might comment on this statement. It was not Nizam who gave the money to Pakistan but Qasim Rizvi, Chief of Ittihad ul Muslimin who was in de facto control of Hyderabad State then, even its army with Nizam blessing.
With Pakistan getting Nizam’s help and its share of Rs 55 crores from division of the assets of Indian State Bank, Pakistan got out of the desparate financial situation in which it had found in 1947-48. Right from its birth, Pakistan adopted self reliance for solving all its problems like rehabilitation of 7-million destitute refugees from India and its economy rehabilitation. With extraordinary sense of nation-hood the locals came forward to help the seven million destitutes to set up their new homes and start their new life in Pakistan otherwise they would have perished .There were many other challenges like twice India massed its Army against Pakistan on the borders, India’s armed intervention in Kashmir but it is astonishing how Pakistan’s economy recovered rapidly. This theme recurs in Liaquat’s speeches during his tour to US in May 1950. He says “Well … within three years our import and export trade revived so quickly that our internal economy and foreign exchange position was rehabilitated with surprising ease , year after year our budget has been balanced and when Govt. floated loans, their success was phenomenal” ” Its economy is sound ; its successive budgets have been balanced ; it has a favourable trade balance with dollar area. Two items published in the Dawn’s “ Look Back” “ Fifty years ago Today” – in its issues of 14 June 2001 & 17th June 2001 say Pakistan had in its blocked sterling balances account Ls 165 million as against India’s Ls 160 million, the next item quoted Ghulam Mohammed that Pakistan had nearly Ls 25 million in “ free Sterling account…He went to London to negotiate with Hugh Gateskell , who said “ .. Any out right release of sterling balances was not possible.. It will mean Pakistan would fritter away its resources and Britain will be saddled with unbearable burden” . Sense of national pride was so ingrained in every Pakistani in those days of utter poverty that they were not prepared to degrade themselves by begging from any foreign power This pride is reflected in Liaquat’s statement to Chicago council on foreign relations on 11 May 1950 . “ We realize that the under developed countries must themselves organize their own initiative and utilize their won resources , material and spiritual, to the fullest. If there are any countries that subscribe to this view half heartedly Pakistan is not among them”. During his US tour, Liaquat clarified that what he was seeking from the west was only technical expertise for Pakistanis in various fields and NOT monetary aid.. Speaking at MIT.
