1. Before the budget.


HALFWAY into the Nation's Pre-Budget Seminar, an audience member got on his feet, interrupted the proceedings and started speaking. He was addressing all the featured speakers but primarily the Adviser to the Prime Minister on Finance, Shaukat Tarin. His rustic ramblings were peppered with the usual populist references to the common man. Had he been asked about specifics, he would not know what exactly it was that he wanted. This is not, however, to begrudge him his resentment: to the disenfranchised, resentment, lamentation and the occasion bits of humour are all they have to deal with their sorry lot in lives.
But behind the public's understanding of the economy, indeed all of governance, there seems to be an idea that there is a lever in the executive offices throughout the country. That all the leaders have to do is to pull it and you'll get what you desire. As one of the speakers, Tariq Saeed Saigol said, referring to an editorial of this paper, the government wants to get the public's goodwill that comes from large public spending programmes but doesn't want to risk the public ire that comes from increasing the taxes that will finance those programmes. That is because the government knows that the public, even in countries like the US, does not understand that wanting one (more government programmes) automatically rules out the other (lower or same taxes). The public - and, it must be admitted, the media as well - rails on and on about, say, spending on foreign tours and procuring luxury vehicles. But even though governments should be spartan, cutting these really wouldn't do all that much to solve our problems of limited fiscal space. The masses, if they insist on cuts in these bits of spending, however small their proportion is to our overall fiscal outlay, should be humoured. But the really big issues of our economy are not as easy; they are those of uncomfortable trade-offs. The taxation/public spending trade-off. The inflation/unemployment trade-off. The growth/inflation trade-off. The ease of indirect taxes versus the necessary slog that our direct tax structure needs. The fact that the government needs, out of bare necessity, the revenues it generates from duties on petrol goods. The list goes on. In a lively seminar, the Adviser rubbished all rumours about a planned increase in the sales tax rate but expressed his desire to broaden the tax net. This would ensure that the system does not simply increase the taxes on those sectors already paying taxes; undertaxed sectors need to be zeroed in on. Mr Tarin has his work cut out for him. He is going to be drafting the federal budget at what is an undoubtedly difficult time for the economy. Managing the economy while courting public wrath over unavoidable steps isn't easy. But such are the burdens of governance.



2. Still a long way to go.


The retrieval of Mingora, the main town of the Swat valley, from the militants' control, sooner than it was expected, is a matter of great relief and raises the expectation that it will not be long, perhaps, before the military campaign draws to a close. In fact, Defence Secretary Syed Athar Ali, who is presently attending a security conference at Singapore, has said that it would just take another two to three days before the operation is completed, a view termed by officials back home as "overly optimistic". It is interesting to note at the same time that the army's rapid advance into the rebel-held areas at a relatively much lower cost to its personnel (81) compared to the loss of militants' lives (1,217) has given the lie to the alarmist, masquerading as informed, view in the West about the threat to the very authority of the state and its nuclear assets.
Yet, as top army commanders have opined, military operation is not the solution; it is a temporary remedy. One might interject though that the operation's real challenge, after the terrorists have been routed, lies in hunting down those who have chosen to lie low till the time the troops have withdrawn. In this difficult exercise of differentiating between militants and innocent citizens the help of local residents should prove crucial. And there are reassuring reports that the people are coming forward to identify them. There is little doubt that a vast majority of the population is averse to the ultra-conservative (rather un-Islamic) version of the glorious religion the militants wanted to impose. Only after these sinister elements have been removed from the scene that one would say with confidence that the area is clear for the peaceful residents to return. But, perhaps, a still more daunting challenge for the authorities is the return and rehabilitation of the displaced persons whose number is being variously computed between 2.5 million and three million. Not only is there the question of confidence about the security aspect but also of the objective realities of existence once they decide to get back. Their homes might have been so damaged that they have become uninhabitable, their shops and businesses looted and ruined, and basic infrastructure like water supply, gas pipeline, electricity lines, road and bridges network destroyed. There is urgent need to repatriate the IDPs if the government wishes to avert a much severer crisis emerging from the camps presently housing them. Thus, things have to move fast and the damage has to be repaired. There is no time to lose.



3. Iranian disruption.



THE bomb blast in the mosque in Zahidan is apparently an attempt to create sectarian rifts in the Shia-majority country, but then there should be factored in the attack on President Mehmood Ahmedinejad's election office in the same city afterwards, but on the same day. Though the attacks are of different intensities, and achieved different results, both are equally to be condemned in no uncertain terms. The bomb blast has been blamed on the USA and Israel, by the Interior Minister, and it was carried out on a Friday, and killed 25 persons in a suicide bombing. The attack later on President Ahmadinejad's election campaign centre in the city did not result in any deaths, but led to the wounding of several campaign workers. The responsibility for the mosque attack was taken by Jundullah, an opposition group. Finger has also been pointed at Pakistan. It needs to clear the suspicion. The assumption of American and Israeli involvement might seem a kneejerk reaction by the Iranian authorities, but it is based on the capture of a suspect in the mosque attack.
Israel must be continuing in its role as the USA's policeman in the region if it is involved in the mosque attack. Yet it should also be kept in mind that Iran is virtually the only Muslim country still to actively oppose Israel. Therefore, Israeli action against Iran is a very real possibility, especially in opposing Ahmadinejad, who is a candidate in this year's presidential election on June 12. Also, Iran experienced US terrorist actions before the previous presidential election. The USA has carried out terrorist actions in Iran before, and this episode was another instance. The USA is also a strong possibility, if it is assumed, as it seems safe to do, that the Obama Administration is furthering the same policies as saw the Bush Administration dub Iran part of the Axis of Evil.
If the USA thinks that this is the way to break the will of the Iranian people, it is mistaken. Instead of such coercive methods, it would do better if it engaged in a sincere dialogue.