The D-8 summit
November 19, 2012
The Developing-8 (D-8) summit opens in Islamabad on Monday. Founded in 1997, the D-8 is a group of developing nations that have large or majority Muslim populations. The current membership consists of Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey. The group is relatively low-key and does not have the impact of organisations such as Saarc or Asean, and its potential bargaining power is limited. Despite this, it is representative of about 60 percent of all Muslims globally, around 13 percent of the world’s population, and in that sense is significant. A summit is held every two years and Pakistan is going to host delegations from five states starting today. Two heads of state have declined to attend – Sheikh Hasina of Bangladesh and the Malaysian prime minister. The president of Egypt, Muhammed Morsi, has shortened his stay to two days instead of four – he may reasonably plead that he has some pressing domestic problems erupting on his doorstep that require his presence – and Islamabad is festooned with posters and weighed down with potted plants at every road junction.
The purpose of the summit is to discuss ways in which member states can strengthen business and trade relations, and ties between Muslim-majority states. There are hopes that the moot will do something to enhance our battered international image and the government has set aside Rs97 million to pay for the pleasure of hosting it. Some countries are bringing large delegations – Nigeria with 150 and Iran with 100 delegates – and five-star accommodation in the capital area is going to be stretched to the limits. Some concerns have been expressed as to the timing of the event, falling as it does during Ashura when festive events are not normally held. Concerns have also been expressed that event management for the summit has been contracted to a person with little or no previous experience of handling anything similar. Events such as this do indeed offer us an opportunity to burnish our image. We can expect no major developments to come from the summit but if we can maximise the value of international networking, it could work to the benefit of all concerned. We can but hope for a hitch-free and productive meeting, and some enhancement of our trading opportunities downstream.
Toxic debts
November 19, 2012
The sheer scale of the debt burden that Pakistan has accumulated during the current government’s regime beggars belief. The State Bank of Pakistan’s Monetary Policy Information Compendium October 2012 report reveals that our total debts and liabilities from all sources have now reached Rs14,561 billion, as against Rs6,691 billion before 2008 when the present government was elected. These are not imaginary figures conjured up by some scaremonger; this is what the country actually owes a range of creditors, including international financial institutions, government domestic debt, government external debt, private sector internal and external liabilities, public sector enterprises external and domestic debt and what are termed ‘commodity operations’. Pakistan owes money – and a lot of it – in all these sectors. Disaggregating the figures tells us that every man, woman and child in the country carries a debt of Rs80,894 over and above whatever they may owe to whoever or whatever on a personal level – as against Rs37,170 in early 2008. Taking this further down the scale to the pocket of the common man, every single Pakistani would have to pay off Rs221.6 every day for a year to clear the burden. Millions earn far less than that.
The total debts and liabilities created in just four years are more than double of what was accumulated in the first 60 years since independence. At least 58 percent of the population is rated as ‘food insecure’ – as in they are not sure where the next meal is coming from. Reliable figures on the actual numbers of those who live in poverty have never been published by the current government, though there is ample evidence from credible sources that poverty continues to rise. The government continues to borrow billions from itself every day – by effectively printing money – and the black hole of debt yawns wider by the month. The government can blame nobody but itself for the current plight of the country. It comes down to old-fashioned corruption, ineptitude, bad policy making and massive tax evasion, which have all played their part. Unemployment continues to rise as will inflation in the next half-year and the economy will grow at a snail’s pace. Remittances are currently at a record level and in that sense provide an economic crutch – but not a solution. In fiscal terms we are in a crisis, in large part of our own making. Unmaking that crisis will be the challenge the next government faces, whichever party wins, and the remedy is going to be painful.