Time to give up the game, Colonel
February 28th, 2011
In his latest speech on February 25, Libyan despot Moammar Qaddafi said: “People who don’t love me don’t deserve to live.” If Qaddafi is true to his word, very few Libyans will be allowed to survive. Even as the dictator has lost control over much of the country and as his diplomats, including his ambassador to the UN, desert him in droves, he has stayed bull-headed and refused to concede the obvious. There has been further state-sanctioned violence in Tripoli over the last few days, with over a thousand protesters believed to have been killed. It appears Qaddafi has regained some measure of control over the capital but it is an illusion; the last gasp of a dying regime.
After a week of dithering, US President Barack Obama has finally announced wide-ranging sanctions against Libya while the UN secretary-general has also pleaded with the international community to take action. The UN appears ready to prosecute Qaddafi for war crimes. Ironically, these actions, while necessary, may serve only to box him in. The simple fact is that, apart from Venezuela and Cuba, no country wants to provide the Libyan dictator with safe passage. He has no way to get his considerable wealth out of Libya and few countries would host him in any place other than a prison. Even at the height of his unpopularity, former Egyptian leader Hosni Mubarak was on friendly terms with many world leaders who would provide him sanctuary. Qaddafi’s eccentric and erratic behaviour over the years has left him alone.
But there is no country less willing to host Qaddafi than Libya itself. After the massacre of protesters, Qaddafi has absolutely no credibility left. Many are urging the UN to stop the violence by enforcing no-fly zones in Libyan airspace to prevent Qaddafi’s air force from indiscriminately bombing its own citizens. The opposition is slowly taking over Libya piece-by-piece, including territory, the airwaves and newspapers. The emperor has no clothes but he refuses to recognise that Libya is liberating itself from his rule. Qaddafi has been boxed in. It is time for him to give up the game.
Implementing the law
February 28th, 2011
A study of the statute books in Pakistan reveals, for the most part, that a set of laws that are comprehensive and attempt to address many key areas of concern in the country or not being implemented. We know this holds true of laws even as mundane as those that apply to traffic regulations – but the problem is especially acute when it comes to laws that are intended to protect the rights of women. A host of social attitudes and discriminations come into play, especially at levels involving the police and the local administrations.
Speakers at the fourth meeting of the Implementation Watch Committee of the National Commission on the Status of Women took up a number of these issues and suggested remedies. While the PPP government has, since coming to power in 2008, introduced several legislative bills — notably the Protection of Women Against Sexual Harassment at the Workplace Act, a law campaigned for by ASHA, a network of organisations working against sexual harassment for many years — lack of implementation remains an issue.
Speakers highlighted the need for departments to enforce the law and it was pointed out that provinces needed to appoint ombudsmen to protect working women and the need to create awareness about the existence of the law and its provisions was also brought up.
We need more such seminars. Most important of all is the need to spread the message to working women — notably those employed at factories and similar set-ups. Men, too, need to be better informed about just what sexual harassment is, so that they can take a stand by exerting pressure on colleagues and acting to protect women subjected to harassment. The passage of a law is, after all, just a first step; much more needs to be done to follow up on it and turn it into something that works out in the real world.
More powers for the SBP
February 28th, 2011
It is not often that a good piece of legislation faces such little resistance in parliament. But the new banking regulations have been passed unanimously in both the Senate and the National Assembly. The bill will dramatically expand the powers of the State Bank of Pakistan to deal with financial crises, including taking over banks and replacing their managements and writing down and imposing losses on debt and equity shareholders alike.
Given the fact that the top five banks in the country control up to 80 per cent of all deposits, Pakistan’s financial sector has a very serious ‘too big to fail’ problem. If one of the major commercial banks runs into trouble, the government has absolutely no choice but to bail it out, owing to the systemic risk a bankruptcy would pose to the health of the financial system. The management of these banks, of course, knows this and thus has an incentive to take excessive risks in order to increase their banks’ profitability, a problem of bad incentives known to economists as ‘moral hazard’.
The amendments to the Banking Companies Ordinance would address this problem. If bank managers know that they can lose their jobs in the event of a crisis at their bank, they are likely to be more prudent in taking risks. If investors in stocks and bonds of banks know that they could lose their money in the event of a bankruptcy, they are likely to urge the bank’s management to be more cautious. Moral hazard and the threat of a systemic risk to the banking network, in other words, stands ameliorated with the introduction of this law.
Given the fact that at least 13 banks are in violation of the central bank’s minimum capitalisation requirements, a banking crisis is likely. Giving the central bank more tools to confront the problem before a problem arises seems like a good idea and one that we can fully support.