Another attack

December 17th, 2012

Another military airbase attacked; another full set of lessons that perhaps will not be learned. Since the attack on the Mehran airbase in Karachi, the militants have demonstrated a sophisticated understanding of both the psychology and methodology of high-profile attacks. Targeting an airbase in even a semi-successful attack captures public attention in a way that a highly successful attack against other military targets would not. And while the security forces appear to be protecting vulnerabilities at airbases better than was the case before the Mehran attack, the militants are also adapting. They appear to be probing for weaknesses by deploying new combinations of fidayeen and suicide attackers, and still have fairly good intelligence on their targets. Why this is so is a question that the public has not received an answer to. So the focus must necessarily turn to more transparency and accountability within the security and intelligence apparatus.

Every new high-profile attack is a reminder of how little is known publicly about the investigations into previous such attacks. Was physical security as rigorous as it could be? Was the vetting of security personnel posted at these installations thorough? Were maps and schematics and other information protected adequately? And after weaknesses were exposed, how effective was the response of the security apparatus to ensure a repeat would be difficult? Clearly, as the attack on a foreign airbase in southern Afghanistan proved, the militants can exploit weaknesses in defences in even the most hostile environment. But in the absence of transparent and public investigations and accountability, we can’t be certain that negligence, incompetence or complicity in the security apparatus here is being identified and punished as thoroughly as it should.

Then there is the broader question that always comes up in these moments. Peshawar is adjacent to the tribal areas and as such will always remain more vulnerable than most Pakistani cities unless a coherent policy for eliminating militancy is developed. But despite having tens of thousands of troops stationed in Fata and launching a series of military operations that have recovered swathes of territory that had virtually been ceded to the militants, the absence of a zero-tolerance policy towards militancy has made it difficult to win this war. Apologists for the Taliban, who refuse to see that the militants’ war is against Pakistan and its people, have stood in the way of a unified stance. North Waziristan, and also the Tirah valley, remains a fundamental threat to security in Pakistan. Yet it is still not clear how the army-led security establishment intends to defang that threat. Paralysis and policy drift will only enable the militants to push harder to find even more weaknesses.

Not a long-term solution

December 17th, 2012

The State Bank of Pakistan managed to cross another rickety bridge on Friday without putting further pressure on the weakening external sector or jeopardising growth prospects. The small cut of half a percentage point in the key policy rate may have dismayed some businessmen. But given the challenges the economy faces at the moment it was perhaps the right response. By continuing monetary easing in response to the broad-based decline in price inflation, though at a slower pace than expected by the private sector, the bank has indicated its desire to support new private investment in the economy to counter weak growth. At the same time, the move is calculated to protect the economy from risks emanating from a deteriorating exchange rate on dwindling foreign financial inflows and huge debt repayments.

But the question is: will the bank be able to continue its monetary easing in its next review two months down the road? Any rise in inflation may force it to put the brakes on, or even reverse, the process of monetary easing. And the risk of inflation very much remains in the shape of a deteriorating exchange rate and massive fiscal borrowing. Unless the government stops or substantially reduces its borrowing from domestic sources and foreign private and official capital inflows start coming in, the inflation risk will remain. The direction of monetary policy in the near term will thus be determined by the successful auction of 3G telecom licences and the release of coalition support fund payments by the US. The medium- to long-term sustainability of low interest rates will hinge on reduction of the fiscal deficit and a substantial increase in foreign inflows. The four-percentage-point reduction in the cost of borrowing during the last 16 months has perked up the economy somewhat. Inflation declined fast, growth momentum picked up and corporate profits rose. Yet private investment remains muted. While investment will not pick up unless interest rates are brought down further, the reduction in credit cost alone is not enough. The energy crisis will have to be addressed, security improved and the fiscal deficit bridged.

Tendulkar’s dilemma

December 17th, 2012

Legendary Indian batsman Sachin Tendulkar’s fall from grace in the ongoing cricket series against England has not only dismayed millions of his fans across the world but has also compelled critics to ask him to hang up his boots. Rated as perhaps the greatest post-war batsman, Tendulkar has been a picture of misery in the four-match series, struggling to put together a decent score against an opposition which by no means can be dubbed as menacing for a player of his class and stature. His rare but continued failure with the bat in 2012, both at home and abroad, has drawn boos and jeers from the crowds, even in places like Mumbai, Ahmedabad and Nagpur where he has been revered as a demigod since making his international debut 24 years ago. His former colleagues Sourav Ganguly, Rahul Dravid and a few others have openly criticised him for not looking the part anymore, mainly due to his slow reflexes and poor shot selection.

But Tendulkar is certainly not the first Asian batsman to face this unpleasant situation. A number of great players before him, including compatriots Sunil Gavaskar and Kapil Dev, our own Javed Miandad, Wasim Akram and Zaheer Abbas, and several others have been forced out of cricket after repeated failures or have simply faded into history after refusing to quit the game at the right moment. It was only recently that one of Australia’s most successful captains and batsmen, Ricky Ponting, retired after realising that he could no longer cope with the rigours of international cricket. Tendulkar, unfortunately, has not been able to choose his departing moment and must now be ruing the blunder of not having called it a day in March 2011 when India won the ICC Cricket World Cup.