Action Against Militancy

AFTER the recent flurry of meetings between Pakistani and Afghan leaders and between the army and government, as well as the military’s insistence that the North Waziristan operation will be against all militants, there’s hope, finally, that the change in rhetoric on militancy will be matched with changes in state policy on tackling the scourge. On this point, the military leadership and the PML-N government have been unusually categorical: there will be no favourites or good Taliban/bad Taliban distinction in clearing out North Waziristan. Taking the military and the government at their word, the expectation still should not be that the military will rain down missiles and artillery on militants of every stripe. Instead, it is hoped the state is ready to sever ties with these elements and that no militant group, foreign or local, is allowed to maintain sanctuaries in the tribal agency.

Yet, is that truly the case? Will ties to the Haqqanis really be cut? What about Gul Bahadur and his long-term on-again, off-again relationship with the Pakistani military? Has it been finally and irrevocably ended or will expediency and a relationship of mutual convenience be allowed to revive ties again? Especially on the Haqqani front, the choice the military makes will have regional and international repercussions, given how the group is regarded by the Afghan and American governments. Surely, neither an Afghan government nor an American administration would demand that Pakistan militarily take on the Haqqanis given their proven ability to launch the most sophisticated and devastating of attacks. But what of the growing suspicion that perhaps the security establishment here is still shielding the Haqqanis and may have offered them safe passage out of the imminent battle zone or even helped physically relocate some of the Haqqani leadership in other parts of Fata? It is indeed encouraging that Pakistani foreign and security policy architects have at long last started to speak in specific terms of distancing the state from all militant groups. But the welcome clarity of language must be matched with clarity on the ground.

Similarly, the more purposeful and positive language between Pakistani and Afghan officials when it comes to ending cross-border militancy and sanctuaries on either side of the border is a welcome sign. So far, there had been little action taken by the Americans or Kabul against elements of the outlawed TTP operating from bordering Afghan provinces. The tensions over cross-border violence in the Kunar region in particular have soared in recent weeks and need to be urgently tamped down. For that to happen it will have to be largely a bilateral process and one in which patience, cooperation and good faith are preferred over the path of accusations and recriminations. It is possible. Both sides will find out soon enough if it is real or not.


Circular Debt

IT has been with us for so long now that even the puns are getting worn out. Last year, the PML-N leadership proudly announced that they had finished the circular debt once and for all with a gigantic retirement of Rs480bn in one go. Then as early as September, headlines began to appear again, announcing the return of power sector receivables in amounts larger than Rs100bn. In January, the State Bank mentioned the growing circular debt as a threat to the country’s fiscal stability. The next month, in February, senior officials from the National Transmission & Despatch Company told a Senate committee that the circular debt had now surged to Rs180bn owed to power generation companies alone. That same month saw news reports that the IMF had asked for a complete audit of the circular debt to accurately determine who was owed how much, and how the receivables were being calculated. That audit is still under way while we have come nearly full circle to a figure beyond Rs300bn owed to power generation companies alone, with no clear idea of how to tackle the crisis.

Last year’s gigantic retirement of the circular debt has clearly failed to eliminate the problem. It was the third such attempt to resolve the issue once and for all. Each effort was bigger than the one preceding it. We can recall the Term Finance Certificates floated in 2009, amounting to around Rs60bn, and the Rs120bn odd retirement in 2011. Each time the problem returned with a new ferocity, and this time it is no different. Of course, power sector reforms are key to eliminating this problem reliably, because it is now clear that at the heart of this issue is the power bureaucracy and its inability to deliver. But it is also important to realise that the circular debt is an animal that grows in the dark. Lack of transparency in the power sector is the root cause of its stubborn resilience to reform. It should be made mandatory for the power sector managers to release operational and financial data on a regular basis, much like the water bureaucracy or the State Bank does. Ending the play of discretionary authority and bringing in professional oversight by independent boards are key to bringing efficiency to the power sector, and plugging its various leaks. Without underlying reforms, throwing money at this problem becomes a self-defeating exercise.


The round of 16

FROM a total of 32, it’s now down to 16 teams vying to lift football’s World Cup. Unlike the group stage, where there was margin for error, mistakes in the round of 16, which kicks off today, will mean a flight home for the numerous contenders. The first round of the tournament in Brazil has featured sparkling moments of beautiful football, packed with plenty of goals, action and drama. Noticeably, some of world football’s powerhouses from Europe have made unceremonious exits from the cup, including defending champions Spain, who only managed a win against unfancied Australia and were pummelled by Holland and Chile in the group stage. Other European powers sent home early included Italy, England and Portugal. Italy has lifted the cup four times while both the Italian and English leagues are considered amongst the best in the world. Cristiano Ronaldo’s star power also failed to improve Portugal’s poor showing. Analysts have put forward a number of reasons for the Europeans’ misfortunes in Brazil, the foremost being the European players’ inability to acclimatise to the South American conditions. Also, no European side has ever lifted the cup in Latin America since football’s showcase event debuted in 1930. Yet more than the weather, it just may be that the ‘old continent’ is losing its dominance over the game as Latin America, another traditional hub of football, reasserts itself, while African and Asian sides also rise in the ranks.

But European sides should not be ruled out altogether at this point. After all, the Dutch have carried out a clinical campaign in the first round, winning all their group matches. It is entirely possible for the Dutchmen to lift their first cup in Rio de Janeiro. Germany also look strong. However, Brazil and the other South American contenders, including Argentina and Uruguay (despite losing Luiz Suarez to a bizarre biting incident), are no greenhorns and will put up a strong fight, propelled by passionate home and regional crowds. The journey to Rio will be eventful.

Published in Dawn, June 28th , 2014