Zulfikar Ali Bhutto’s Era (1971–1977): Political Reforms, Nationalization, and the Fall
Zulfikar Ali Bhutto’s Era (1971–1977): A Critical Political Transition
Assuming Power After 1971 War: On December 20, 1971, Zulfikar Ali Bhutto became Pakistan’s fourth President. He assumed control after Pakistan’s defeat in the 1971 war which resulted in the secession of East Pakistan. At that time, Pakistan was facing a critical constitutional vacuum, economic collapse, and a scattered geography. India held around 13,000 square kilometers of Pakistani territory and over 93,000 soldiers were prisoners in Indian custody.
Dialogue with Sheikh Mujibur Rahman: Mujib was then in Pakistan’s custody. Bhutto offered him power and even tried to bribe him with $50,000, but Mujib refused both. Bhutto suggested a confederation model to keep some form of unity between East and West Pakistan. Mujib agreed to consult with his people and was sent to Dhaka via London and Delhi due to blocked air routes. Upon reaching Dhaka, Mujib rejected the offer publicly and declared the final split from Pakistan.
Islamic Socialism and Nationalization Policy: On January 2, 1972, Bhutto launched “Islamic Socialism” or Musaawat-e-Muhammadi via nationwide nationalization. He targeted the infamous 22 industrial families who controlled the country’s economic backbone. These families collectively held control over 66% of Pakistan’s industrial output and 87% of the banking sector. Among them were groups like Dawood, Jaleel, Habib, Hafiz, along with Ittefaq Foundries (owned by Nawaz Sharif’s family) and Gandhara Industries (linked to Ayub Khan's family).
This led to a temporary improvement in Pakistan’s economy, but in the long run, state-run industries like Pakistan Steel Mills became white elephants. For example, between 2010–2021, it delivered zero profit and burdened the treasury with over PKR 334 billion.
Land Reforms and Preservation of Feudal Structure: In March 1972, Bhutto introduced land reforms. The ceiling for irrigated land was set at 100 acres and for non-irrigated at 200 acres. However, several loopholes allowed feudal lords to retain control, such as land under women’s names or gifted properties being exempt. The reforms were mostly cosmetic and failed to dismantle the entrenched feudal structure.
Labour Reforms: In February 1972, Bhutto introduced labor reforms, mandating a 4% share for workers in industries and requiring one-month notice before terminating an employee. Schools, hospitals, and labor courts were established, ensuring basic protections for workers.
Currency Devaluation and International Loans: Under pressure, Bhutto devalued the Pakistani rupee from 4.76 to 11 per USD in May 1972. He secured financial aid from Islamic countries, with Iran providing $580 million—the highest amount at the time.
Shimla Agreement 1972: In July 1972, Bhutto held a five-day summit with Indian PM Indira Gandhi in Shimla. India’s agenda included:
- Forcing Pakistan to recognize Bangladesh
- Trying Pakistani POWs for war crimes
- Settling the Kashmir issue permanently
Pakistan’s objectives were:
- Return of 93,000 soldiers
- Recovery of 13,000 km² of occupied land
- Avoiding recognition of Bangladesh
Despite India’s upper hand, Bhutto successfully negotiated the release of POWs and land return. The final Pakistani POW convoy returned on April 30, 1976. In return, Pakistan agreed to resolve Kashmir bilaterally and not through international forums. Bangladesh was officially recognized in February 1974.
1973 Constitution: To unify the political spectrum, Bhutto abandoned his preferred presidential system and facilitated a parliamentary system. The Constitution was passed unanimously, stipulating:
- Islamic Republic of Pakistan
- Islam to be the guiding principle of all laws
- Ban on interest-based economy in the future
- Free education for all children for 8 years
- Establishment of Federal Shariat Court
- Equal provincial representation in the Senate
- Population-based representation in the National Assembly
France-Pakistan Nuclear Agreement: In March 1976, Bhutto signed a civilian nuclear deal with France to acquire a nuclear reprocessing plant. Though later suspended under U.S. pressure, it marked a milestone in Pakistan’s nuclear ambitions.
Bhutto’s Nuclear Stance: When questioned about the cost of nuclear development, Bhutto famously declared: “We will eat grass, even go hungry, but we will get one of our own [nuclear bomb].”
OIC Summit 1974: Bhutto hosted the 2nd OIC Summit in Lahore with participation from 38 Islamic countries, including Muammar Gaddafi and King Faisal. This was a foreign policy milestone aimed at forming an Islamic bloc and shifting Pakistan away from the U.S. towards the Middle East and China.
Suppression of Political Opposition: Bhutto made seven constitutional amendments, mostly to curtail political opposition. He created the Federal Security Force (FSF), a 15,000-strong unit for political suppression. He clashed with Ahmad Raza Kasuri, whose father was killed in an alleged FSF attack—this case later became the basis for Bhutto’s execution.
Balochistan Operation (1973–1977): Bhutto dismissed the elected provincial government of Sardar Ataullah Mengal after alleging that a large cache of arms was discovered in the Iraqi embassy meant for Baloch separatists. The government launched a military operation in Balochistan, causing widespread insurgency, loss of lives, and long-standing resentment. Over 5,000 people reportedly died. It alienated Baloch leadership and worsened center-province relations.
NWFP Political Crisis: In parallel, Bhutto clashed with Mufti Mehmood’s provincial government in NWFP (now Khyber Pakhtunkhwa). Accusations of non-cooperation, religious radicalism, and opposition to Bhutto's socialist reforms led to the dismissal of that government too—deepening regional political polarization.
Electoral Manipulation – Operation Victory: In the 1977 elections, Bhutto allegedly manipulated results through a covert operation termed “Operation Victory” or Operation Factory. At least 40 seats were reportedly rigged. Bhutto even won uncontested from Larkana, and authorized partial martial law in key cities like Lahore and Karachi. These actions portrayed him as insecure and dependent on force, fueling the perception of autocracy.
Accusations Against the U.S. – The Kissinger Letter: During political unrest, Bhutto accused the United States of plotting against him. He held public rallies in Islamabad where he waved a letter allegedly sent by Henry Kissinger (U.S. Secretary of State), warning Pakistan to stop its nuclear ambitions or face dire consequences. Bhutto claimed it said: “We will make you a horrible example.”
Fall from Power – Operation Fair Play: On July 5, 1977, General Zia-ul-Haq launched Operation Fair Play and imposed martial law. Bhutto was arrested, the Constitution suspended, and assemblies dissolved. Zia cited electoral fraud, civil disorder, and Bhutto's authoritarian style as justifications for military takeover.
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