Columns
 

[FONT="Comic Sans MS"][SIZE="4"][COLOR="Blue"]Is Pakistan a third-rate country?

Inayatullah

Pakistan at the end of the year 2010 is a far cry from the Quaid’s dream of a strong and prosperous country. We indeed have become a third-rate country at the lowest rung, even amongst the Third World countries.

Little has been learnt from our blunders and follies.

Few are bothered about the way we lost half of our country, how thousands of our soldiers surrendered to the Indian military, and how we messed up the Kashmir issue with an ill-planned war in 1965 and a foolish misadventure in Kargil. The Hamoodur Rahman Commission is a forgotten story. And there has been no such thing as a Kargil Commission to probe into our stupidity at the highest level.

Although very much delayed, we did manage to make the country’s Constitution in 1956, but before the first national election was held, the jackboots stepped in and democracy - unsteady and shaky as it was - was thrown out of the window. Politicians were demonised and the country became a hostage to the whims and wishes of one man. The second (drunkard) dictator was moronic enough to hasten the break-up of the country. He was followed by a civilian martial law administrator, who was blessed with the opportunity of putting the country on democratic rails, but the wadera in him got the upper hand and he fell victim to gross misuse of authority aimed at strengthening his political hold on the country. And we were back in the grubby clutches of the General Headquarters.

Another spell of rule by the elected representatives proved to be just another spurt on the democratic road. It didn’t take long to be halted by yet another military commander. He militarised politics and the civil services, sought to destroy the judiciary and dealt a fatal blow to the country’s sovereignty. His economic bubble burst soon after he dismounted. His tinkering with the district administration led to a horrendous breakdown of law and order. One of his fatal “gifts” was the utter unconcern about the urgency of adding to the capacity to produce enough electricity, thus ensuring a disastrous future of our economy. His worst legacy was the foisting on the country a government, which owes its very existence to the wicked NRO.[/COLOR][/SIZE][/FONT]

[FONT="Comic Sans MS"][SIZE="4"][COLOR="Blue"]The art of having it both ways

Rahimullah Yusufzai

Dr Zulfiqar Mirza cannot be described a successful home minister considering the generally poor law and order situation in Sindh, particularly in the provincial capital, Karachi, where target-killings are now a common occurrence and traders concerned about their safety often have to pay ‘bhatta’ or illegal tax to gangsters. But to his credit it must be said that he is plain-speaking, unafraid to admit shortcomings and speak his mind even if it means taking on powerful people.
In fact, Zulfiqar Mirza’s forthright style and his recent decision to disclose certain home truths have become the immediate cause for the collapse of the uneasy alliance between the PPP, to which he belongs, and the Muttahida Qaumi Movement. His friend and party leader, President Asif Ali Zardari, didn’t fire him or change his portfolio as predicted by sections of the media and perhaps expected by the MQM. Unless Dr Zulfiqar Mirza himself gives up the portfolio of home minister in a bid to save the PPP alliance with the MQM, it looks unlikely that President Zardari would remove him from the job. Firing or sidelining him would amount to censuring the PPP. Zulfiqar Mirza isn’t an ordinary PPP leader. He is a party stalwart and also the husband of National Assembly Speaker Fehmida Mirza.
The MQM has already quit the federal cabinet with the resignation of Dr Farooq Sattar and Babar Khan Ghauri and opted to sit on the opposition benches in the National Assembly and the Senate. However, it is still part of the PPP-led coalition government in Sindh, which is strange considering the fact that the MQM is a strong critic of the PPP and its policies. But this isn’t surprising because political parties have now perfected the art of functioning both as part of the government and the opposition. It is useful to remain in power in the provinces even after quitting the federal government and refusing to become involved in difficult and unpopular decision-making such as imposing or increasing taxes and maintaining the alliance with the US in the war against militancy. The MQM may eventually quit the Sindh government, but only after exhausting every option that could allow it to stay in power. Even otherwise, political parties with an eye on the next general election have to start taking populist positions on issues after having enjoyed power for almost three years.
Maulana Fazlur Rahman’s JUI-F is also sailing in two boats, quitting the federal cabinet by instructing its three ministers, Mohammad Azam Swati, Maulana Attaur Rahman and Rahmatullah Kakar, to resign but refusing to leave the PPP-led coalition government in Balochistan and the PPP-headed regional administration in Gilgit-Baltistan. Maulana Fazlur Rahman had earlier successfully managed to be both an ally and opponent of General Pervez Musharraf-led government by operating as an opposition leader to the king’s party, PML-Q, in the Centre and ruling Khyber Pakhtunkhwa and Balochistan, the latter as coalition partner of the PML-Q. A hundred reasons could be given in support of this policy, but none could justify such an unprincipled stand. One should be in the government or the opposition and that’s it. Whatever its shortcomings, and there are many, the ANP is standing by the PPP on almost every issue and true to the party’s reputation one expects Asfandyar Wali Khan not to abandon President Zardari even if the going gets tough.
The bitter home truths that Zulfiqar Mirza highlighted in an emotional speech to Karachi businessmen were already the talk of the town. It was no longer a secret that certain political parties or their front organizations along with mafia groups were behind most of the target-killings. There are also random killings of common people, mostly poor wage-earners, because they belong to a particular ethnic group. As the home minister, Zulfiqar Mirza officially certified that 26 out of the 60 suspects interrogated by the joint investigation teams comprising police and civil and military intelligence officials for their involvement in target-killings belonged to the largest political party in the city. He didn’t mention the MQM, but there was no need to name it as everyone recognised the party that has been winning the most assembly and local government seats in the city and ruling Karachi. The MQM reaction was predictably quick and sharp. In fact, it gave a 10-day deadline to the PPP leadership to disown Zulfiqar Mirza’s remarks. Its next step was to pull out of the federal government.
The MQM wasn’t the only party blamed by Zulfiqar Mirza for its involvement in target-killings and violence in Karachi. He also named the ANP and certain religious groups, but none reacted in the manner of the MQM. For sure there are parties and groups other than the MQM that are involved in target-killings, land grabs and drug-trafficking but the Altaf Hussain-led party has more muscle-power than the rest and has greater capacity to do something good or bad. Zulfiqar Mirza also highlighted other home truths. Why is there a strike in Karachi when an MQM leader is assassinated in London? Why were the Pakhtuns target-killed and their properties destroyed in the wake of Raza Haider’s killing? Why are other ethnic groups targeted in Karachi? Mirza cautioned that innocent Urdu-speakers could be harmed if the ethnic minorities joined hands and started taking revenge. He could have added that many innocent Urdu-speaking Mohajirs have already been harmed as a result of the violence sweeping Pakistan’s biggest and richest city.
Who could argue with Zulfiqar Mirza when he said in the same speech that some Karachi traders gave donations to the Taliban instead of providing vehicles to the police to be able to do a better job? And also when he pointed out that some groups snatched hides at gunpoint. He narrated the case of a hostage who was kept in Liaquatabad, a stronghold of the MQM in Karachi, and freed after payment of ransom to a ‘sector incharge’ from whom arms were also recovered.
One doesn’t have to agree with everything Zulfiqar Mirza says, though it is true that for the first time someone in authority has defended the poor Pakhtuns who go to Karachi in search of livelihood and then become victim of political vendetta. Even the ANP couldn’t have come to the defence of its Pakhtun electorate in a more effective way.
Zulfiqar Mirza is sometimes overcome by emotion. Once in the Sindh Assembly, he challenged those involved in violence and killing of innocent people in Karachi to kill him instead. On the second death anniversary of Benazir Bhutto, he made an emotional speech in which said that he and other PPP members were ready to chant slogans of “Pakistan Na Khappay” (No need for Pakistan) in the heat of the moment following her assassination, but Mr Zardari intervened and raised the slogan of “Pakistan Khappay!” This is emotional stuff, but it is also being honest, a quality that most of our politicians lack.
For obvious reasons, the MQM doesn’t agree with Zulfiqar Mirza’s assertions. There are certain things about the MQM that distinguishes it from other parties. It is a party of the middle class in which commoners can rise above the ranks and become ministers. It is secular and anti-feudal and is consistent in the fight against extremism and militancy. It has suffered due to security operations directed against it. The MQM has also tried to extend its appeal beyond its core constituency of Mohajirs. One wishes it stopped using violence to achieve its objectives. And also stopped considering itself as the master of Karachi to the exclusion of other ethnic groups. [/COLOR][/SIZE][/FONT]

[FONT="Comic Sans MS"][SIZE="4"][COLOR="Blue"]Salvaging the 7th NFC Award

Dr Ashfaque H Khan

In the recently concluded Annual Conference of the Pakistan Society of Development Economists, experts deliberated extensively on the issues of the NFC Award and fiscal decentralisation. The general consensus that emerged was that the 7th NFC Award was a political, and not economic, measure; was concluded in haste with little homework done on its macroeconomic consequences; and more work would be required urgently to salvage the Award. This consensus was in line with my argument (Oct 5, 2010) that the 7th NFC Award was one of the ten economic blunders of the present government.
Pakistan’s macroeconomic management had remained centralised until 2009-10. However, the 7th NFC Award and the 18th Amendment contributed to its decentralisation. Pakistan’s is passing through the most difficult phase of its economic history. The large budget deficit, rising debt-servicing, unsustainable debt burden, crowding out of the private sector, declining investment, slower economic growth, rising unemployment and poverty, and double-digit inflation are some of the key challenges that Pakistan is confronted with. The root cause of these challenges is the persistence of a large fiscal deficit, which has averaged 6.3 per cent of the GDP in the last three years. A deficit of this magnitude is “the mother of economic problems.”
It is commonly argued that a government which succeeds in maintaining financial discipline by keeping budget deficit low is bound to be a successful government. It will have ample resources to invest in people (health and education) and infrastructure. Unfortunately, governments in developing countries like ours are inherently “deficit biased.” They love to spend but hate to collect resources through taxation, and as such see their budget deficits rising, which in turn, gives birth to macroeconomic crises. Such a policy is bound to create economic instability which, in turn, promotes political instability. Political instability, in its turn, causes economic instability. This is exactly what we are observing in Pakistan today.
The only way we can take the economy out of the current crisis is to maintain financial discipline. Financial discipline is the sine qua non for economic prosperity. Can any government succeed in maintaining financial discipline in the post-7th NFC Award situation and following the 18th Amendment? Will we be more fiscally responsible in the decentralised setup? These questions are vital for Pakistan’s future macroeconomic management.
Pakistan’s macroeconomic stability will depend crucially on the financial discipline of the provincial governments going forward. Under the 7th NFC Award, 56 per cent of tax resources will be transferred to the provinces this year and 57.5 per cent in the remaining years of the Award. Including other transfers, almost 60 per cent of the resources will be transferred to provinces, which have little financial discipline and capacity to spend prudently.
Did we analyse the macroeconomic consequences of this Award before finalising it? The massive transfer of resources to provinces is taking place at a time when the federal government’s legitimate expenditure is growing rapidly. For example, interest payments were more than doubled in the past three years (from Rs365 billion to over Rs800 billion this year), surging security-related expenditure on account of geo-strategic developments and the war on terror, power-sector subsidies reaching over Rs175 billion, and rotten public-sector enterprises draining over Rs250 billion per annum from the federal exchequer. Have we taken into account these rapidly increasing expenditures of the federal government? Have we left sufficient resources for the federal government to meet its growing legitimate expenditure? The answer is obviously no. It is in this perspective that experts believe that the 7th NFC Award was political, devoid of economic foundation.
The deficits of both the federal and provincial governments together provide overall or consolidated fiscal deficit for Pakistan. Historically, the federal government’s budget has always been in large deficit. Provincial governments used to generate cash balance surplus to arrive at a targeted consolidated budget deficit. For example, in Budget 2010-11 (the first budget under the new NFC Award), the budget deficit of the federal government was targeted at 5 per cent of the GDP and provincial governments together were expected to generate 1.0 per cent of GDP surplus to arrive at a consolidated deficit of 4.0 per cent of GDP.
The provincial governments, instead of presenting surplus budgets, presented deficit budgets, despite the fact that additional resources of over Rs500 billion were to be transferred to them. As a result, Budget 2010-11 never saw the light of the new fiscal year and died prematurely. Presenting deficit budgets in the midst of massive transfer of resources was the height of fiscal indiscipline on the part of the provincial governments.
What will be the consequences of such an undisciplined attitude of the provincial governments? Setting a consolidated budget deficit target by the ministry of finance has become meaningless. Can the federal government deliver on the budget deficit target agreed with the IMF? The answer is no. Pakistan’s future fiscal deficit will be determined by provincial governments. In other words, Pakistan’s macroeconomic management, economic stability, growth and development have now been shifted to the provinces, where financial indiscipline reigns.
Pakistan can come out of the present economic crisis only if it maintains financial discipline by keeping the budget deficit low. In its present form of resource transfer under the NFC Award, this is next to impossible. Unless some hard constraints are put in place, in the form of binding the provincial governments to deliver required surpluses to meet the consolidated budget deficit target, Pakistan’s economic conditions will continue to deteriorate. The federal and provincial governments must sit down, for the sake of Pakistan, to devise binding constraints and get them approved by the National Economic Council. The sooner we move, the better it is for the country. [/COLOR][/SIZE][/FONT]

[FONT="Comic Sans MS"][SIZE="4"][COLOR="Blue"]Af-Pak Strategic Review

Saleem Safi

Expectations of a positive change in the US approach to fighting terrorism in the Af-Pak region and restoring peace to Afghanistan were high before the official release of the annual Af-Pak Review. However, the “review” has nothing new to offer on US policies and strategies. It speaks volumes of US self-righteousness and its self-serving approach to the solution of a problem that necessarily requires concerted efforts and inputs from domestic and regional stakeholders. The review reflects the fact that the US security establishment has succeeded in painting a brighter picture to trick the Obama administration into pursuing a military solution.
The US policies in the war on terror are still dictated by people with tunnel vision, because they are shaped by social and political prejudices. The policymakers are trained and brought up in Western social and political environments having least relevance to the novel Eastern cultures like Afghanistan and Pakistan.
The US and Western failures in Afghanistan have been caused by misplaced priorities and wrong strategies; primarily, the huge amounts of money they spent on military operations should have been used to woo Afghans and some regional stalwarts. The second reason is the strangulation of the Karzai government, which is not even trusted in trivial administrative and political matters. With this status and power, how can Karzai deliver on the US and Western demands? Third, the US never trusted important regional players and allies while formulating the so-called anti-terror policies. Lastly, the US is ambivalent: it talks of a political solution but simultaneously uses force, it orders troops surges but also announces hasty withdrawals.
The administration does not plan a change in the practice of spending money on military operations instead of diverting it to welfare and development projects for the Afghan people. Pakistan still occupies the important position of key to the solution of the crisis, but the Obama administration failed to review the United States’ self-defeating policy of indifference towards Pakistan’s regional and international interests, concerns and reservations.
Iran, Central Asia and China are still conspicuous by their absence from the US radar screen for a partnership to forge a regional alliance against terrorism. The Review’s failure to give these powers their due position vis-a-vis their role in the Afghan problem has actually widened the gulf of mistrust, thus killing all hopes of a durable regional solution. Additionally, the Karzai government has been kept out of any future initiatives for reconciliation, policymaking and adjustments with the Taliban and other resistance forces. No less interesting is the fact that the review talks about troop surge and troop withdrawal in the same vein.
Obama seemed upbeat in announcing that Al-Qaeda has been weakened. There is no doubt that drone attacks and targeted operations have liquidated some Al-Qaeda members, but Obama appeared to believe in the fallacy that decapitation of the second- and third-tier leadership would reduce the organisations’ ability to strike back. Al-Qaeda’s rallying call is increasingly attracting young and passionate Muslim youth. After Afghanistan, Pakistan and Iraq, the organisation has exhibited its presence and power in Yemen. Shockingly, Al-Qaeda’s ideology and jihadi calls have made inroads in North America and Europe as well.
The Review betrays the fact that Gen David Petraeus persuaded the Obama administration and political establishment about the efficacy of current strategies through a list of Taliban and Al-Qaeda’s second- and third-tier leaders killed or maimed over the past six months. The general also seems to have prevailed upon the civilian establishment at the State Department, which favours a timely withdrawal from the Afghan quagmire.
The Afghan and war-on-terror policies are exclusively devised and pursued by the security establishment in Pakistan. The security establishment is directly dealing with the Americans on these issues. There have been ups and downs in the relationship between the US and Pakistani security establishments over the war on terror and Afghan strategies. Currently, there are indications that tensions between the two are turning into open confrontation. The US media has again started targeting the Pakistani security establishment. The US government has repeated the “do more” mantra in the review. In the charged atmosphere the alleged issuance of a notice by a US court to the current and previous DGs of the ISI has added fuel to the fire. In response, the drone attacks victims recently organised a protest in Islamabad. The victims submitted application to Abpara police station for registration of an FIR against the CIA station chief in Islamabad, which caused him to leave Pakistan.
The US and the Western powers refuse to mend their ways. The regional stakeholders in the Afghan problems would also not change their positions. Soon the region is going to face intense confrontation again. The US government will arm-twist Pakistan into following suit. The Taliban’s Quetta Shura, military operations in North Waziristan and the extension of drone attacks into the settled areas of Pakistan will be hotly contested issues between the US and Pakistani security establishments which seem to have been in confrontation over these issues from the very outset. In the process, the real losers will be Afghans and Pakistanis, particularly the Pakhtuns of both countries. [/COLOR][/SIZE][/FONT]

[FONT="Comic Sans MS"][SIZE="4"][COLOR="Blue"]Slippery economic slope

Dr. Maleeha Lodhi

2011 started on a note of great uncertainty. The country plunged into political crisis when the ruling coalition lost the support of two key allies. The MQM’s defection to the opposition left the government well short of a parliamentary majority.
The pivotal question this raised was not whether the government would survive, but about its capacity to govern. There is every prospect of policy paralysis with the official focus certain to be diverted further from addressing urgent challenges especially a gathering economic crisis. While political manoeuvres can be expected to engage the energies of the country’s leaders it is an unravelling economy that poses the most serious potential threat to the nation’s stability.
The mudslinging that dominated the headlines at the close of 2010 not only laid bare the depths to which partisan politics had sunk but also the disconnect between the priorities of public representatives and the pressing needs of the country.
This reinforced a mood of national gloom that was reflected in several opinion polls. A Gallup-Pakistan survey conducted as part of a global “hope barometer” found that in Pakistan over 70 per cent of people felt there would be no improvement in the year ahead, or that the situation will worsen. For most respondents despair trumped hope in their economic outlook.
An earlier survey by the Pew organisation found overwhelming majorities to be dissatisfied with national conditions, pessimistic about the economy and concerned about political corruption.
The public despondency reflected a sense of drift in the country and lack of government direction in a fraught environment of economic distress and energy shortages. The economic outlook further worsened when the country’s programme with the IMF went off track due to lack of compliance with agreed performance criteria, including the commitment to raise revenue. Widening macroeconomic imbalances held out the danger of an economic breakdown in the absence of prompt corrective measures.
The country’s economic woes were compounded in 2010 by the worst floods in living memory that deluged large swathes of the country and caused large-scale displacement and destruction. Millions of people were affected by the calamity at a time when the country was struggling to cope with multiple problems and an unprecedented security crisis fuelled by nine years of war in Afghanistan.
The floods exposed a paradox that lies at the heart of Pakistan’s present predicament: that of a fragile state but a resilient society. As the government machinery foundered in responding to the situation, civil society, ordinary citizens, philanthropic businessmen and media groups organised efforts to help the flood victims. The anaemic official response – notwithstanding the military’s relief efforts – offered a stunning contrast to the stellar actions of private charities and local communities.
What also mitigated the tragedy was the capacity for endurance of the flood victims, who set about rebuilding their lives and homes with remarkable dignity and unshakeable resolve.
Dire forecasts made in the summer of 2010 by some Western observers that militants would exploit the chaos and misery, even seize control of parts of the country, were all belied by the realities on the ground. The country also defied another doomsday prediction – that this was one crisis too many which would tip Pakistan over the edge.
2010 also had its high points. The most edifying political development was the adoption by Parliamentary consensus of the Eighteenth Constitutional Amendment. This removed many flaws and rebalanced powers between the president and prime minister and between the centre and the provinces to restore constitutional equilibrium in line with public sentiment.
The accomplishment offered the government an opportunity to chart a new course by dealing purposively with festering issues and unattended challenges. But the PPP-led coalition seemed to have other preoccupations. The primacy of politicking over policy meant that it passed up a chance to build on the momentum of its constitutional achievement.
The government also seemed unable to anticipate or effectively deal with the financial ramifications of empowering the provinces by the Eighteenth Amendment, as well as the award of the National Finance Commission. It was when the balance of resource distribution was being tilted in favour of the provinces that provincial governments could have been asked to commit to a reciprocal obligation to support revenue-raising efforts especially as the provincial contribution is a meagre 5 per cent of overall tax collection.
On the security front, 2010 saw unrelenting terrorist attacks across the country, even if the year did not turn out to be as deadly as 2009, when violence reached a record level. This did not mean that the militant threat receded, as the attacks on Sufi shrines and other targets demonstrated. Although military operations during 2009 put the militants under sustained pressure, drove them out of Swat and South Waziristan and halted their ingress into the settled areas neighbouring FATA, the question remained whether these gains could endure.
There was patchy progress on that count in 2010 as problems were encountered in transitioning from the extensive “clear and hold” phase to “build and transfer” in South Waziristan and, to a less extent, Swat. Lack of administrative, judicial and civilian law enforcement capacities hobbled the transition.
That the army remained engaged in operations of varying intensity in six of the seven tribal agencies, as well as parts of Khyber-Pakhtunkhwa, underlined that the battle against militancy would neither be quick nor easy. Winning the peace in post-conflict areas remained a vexing challenge, especially as the protracted war in Afghanistan continued to complicate Pakistan’s anti-militancy campaign.
As the year closed, it was a deteriorating economy rather than the militant threat that posed the most proximate danger to the country’s stability. Indeed, the most consequential decision the government may have taken in that regard was not to move ahead on its declared intention to reform the general sales tax. The government expended little political capital to implement this. The lack of any sustained campaign to mobilise parliamentary and public support to overcome resistance from opposition parties – serving as instruments of vested interests – stalled the reform effort.
Missing several targets the government itself set to institute the reformed GST and implement other promised policy reforms, rendered the IMF programme inoperative. This meant that the Fund withheld $3.5 billion of its $11.3 loan package for Pakistan.
Inaction on the RGST and other policy benchmarks prompted a letter from the IMF’s managing director, warning the authorities of the dangers to the economy if timely and decisive action was not taken to rein in the spiralling fiscal deficit.
With the budget deficit already exceeding the official target of 4.7 per cent of GDP for fiscal year 2010-11 this could now rise to 7 or 8 per cent. With no more spending cuts envisaged, failure to stem the heavy financial haemorrhaging in public-sector corporations and implement tax reform held out the prospect of funding the widening budgetary gap by more bank borrowing.
Already at a record high, government borrowing from the State Bank to finance a higher fiscal deficit will mean printing more currency notes. As the governor of the central bank has repeatedly warned, excessive borrowing will intensify inflationary pressures on the economy.
Bank borrowing on this scale will put the country on a slippery slope in an already explosive inflationary environment leading to a situation of hyperinflation, which will be exceedingly difficult to control.
At the start of the New Year the country descended into renewed political turmoil with the government’s loss of its parliamentary majority. This came at a time when the economy was precariously poised between worsening inflation and sagging growth, which only bold structural reform and urgent resource mobilisation can reverse. The question that 2011 posed for the country was whether its leaders understood this perilous situation and had the political will and ability to steer the ship of state through such stormy political and economic seas to safer shores. [/COLOR][/SIZE][/FONT]

Peace process
 

[FONT="Comic Sans MS"][SIZE="4"][COLOR="Blue"]Peace process

Rizwan Asghar

A year has passed since the “Aman ki Asha” peace initiative was launched. In one year this project has made commendable progress towards meaningful dialogue and enhancing person-to-person contacts. This step has also helped to change the public perception of bilateral relations.
The region of South Asia is inhabited by almost 1.5 billion people, whose survival depends on the level of political stability in this disturbed region. This political stability can come only through mature leaders in the two countries who can think beyond their narrow interests and take bold decisions without holding on to their past which fans suspicion and enmity between the two nations. During the last three years a number of official and track-two initiatives were taken but no significant step could be taken at the governmental level for the resolution of the fundamental disputes between India and Pakistan.
The main reason for this fiasco is that India is quite unwilling to agree on a comprehensive agenda for future talks. It has not consented to the discussion of the fate of the disputed territory of Kashmir in future talks. Rather, it has always attempted to bracket peace efforts with terrorism. On the other hand, Pakistan has stuck to its guns and seeks to hold the composite dialogue.
New Delhi overlooks the fact that intransigence is not the solution of any problem. India is almost three times larger than Pakistan, has a vibrant economy and huge military might with overbearing influence in the region and is supported by the United States. India wants to be a global player, but its political leadership is unaware of the fact that bad relations with all neighbours will ultimately be harmful for its global image and ambitions.
The two countries could reach a consensus only if they commit themselves to resolving the long-standing issues that have hitherto embittered bilateral relationship. Hopes of establishing enduring peace in the region may remain elusive as long as India persists in its policy of resolving outstanding issues on its own terms. Another thing which is worth mentioning is that although the incumbent government in Delhi is convinced that “Islamic terrorism” is not a major problem, it continues to play up this perceived threat as a bargaining chip in the negotiations. As Wikileaks revealed, Rahul Gandhi, India’s emerging Congress leader, believes that “saffron terrorism” poses a bigger threat to his country’s stability than Islamic militants.
Another discomforting aspect of Pak-India bilateral relations is the continuous involvement of the intelligence agencies of both countries in undertaking subversive activities on the other side of the border. So a positive action cannot translate into concrete reality till these agencies are reined in. The tenuous nature of the mutual relationship can be gauged from the fact that the activities of the diplomatic staff of both India and Pakistan are looked at with suspicion looks in their host countries.
Despite all deep-seated differences, to continue talking is the only option. The two countries, so far, are miles away from the resolution of key issues. But even then we have come a long way from the days when we used to fight over our differences. Dialogue is the only tool to resolve contentious issues. We also need to shed the baggage of the past to reduce mutual mistrust.
European countries fought with one another for centuries but a point came when their leaders started appreciating the significance of peace and prosperity. By collective efforts and sincerity of purpose our future can be different from our strife-stricken past and measures in conformity with the views of the people of the two countries can ultimately lead to transformation in our mutual relations. [/COLOR][/SIZE][/FONT]

Capital Suggestion
 

[FONT="Comic Sans MS"][SIZE="4"][COLOR="Blue"]Capital suggestion

Dr Farrukh Saleem

Pakistan’s problem number one is that the prices of essential items are going through the roof (read: inflation). Pakistan’s problem number two is unemployment. And, Pakistan’s problem number three is corruption (Pakistanis have routinely been picking the above three – and in that order – in surveys done over the past decade).
Over the past 33 months of PPP’s tenure, the price of onions, tomatoes, sugar and petrol has gone up by 300 per cent, 180 per cent, 140 per cent and 30 per cent, respectively. On 25th March 2008, the day that Syed Yousaf Raza Gilani took oath of office, the rate of inflation, as measured by the officially calculated consumer price index, stood at 14 per cent. By December, the same year, the officially calculated CPI had hit a 30-year high of 25 per cent.
By end-2008, the Federal Bureau of Statistics reported that “transport and communication costs jumped 39.3 per cent with food and beverages prices up 31.7 per cent.” Intriguingly, Pakistan has historically been a low inflation country. CPI for 1999-00, 2000-01 and 2001-02 was recorded at 3.58 per cent, 4.41 per cent and 3.54 per cent, respectively. To be certain, inflation is nothing but printing of rupees – more rupees higher inflation. The current inflationary spiral has its roots in fiscal 2007-08, when the federal government’s budgetary deficit skyrocketed from Rs377 billion in 2006-07 to Rs777 billion in 2007-08; a jump of more than 100 per cent in a year.
The huge hole between government revenue and its stream of expenditures has to be filled by borrowing hundreds of billions of rupees from commercial banks, as well as the State Bank of Pakistan. The government has ingeniously devised a whole host of devices to fill its ever-ballooning deficit. The government has unfunded debt that includes Defense Savings Certificates, Bahbood Savings Certificates, Mahana Amdani Accounts, Khas Deposit Accounts, Special Savings Certificates and Regular Income Certificates. Then there is floating debt that includes Treasury Bills and Adhoc Treasury Bills. On top of all that there is permanent debt that includes prize bonds, Federal Government Bonds, market loans and Federal Investment Bonds.
This is how the sequence takes the whole country down: A severely flawed fiscal policy whereby the government spends a trillion rupees more than it earns. The government then borrows from the banks plus SBP. Which leads to an explosively expanding money supply, whereby the SBP prints trillions of rupees. More rupees, higher inflation!
Over the past 33 months, total notes in circulation have gone from Rs976,000,000,000 to Rs1,516,000,000,000, a 55 per cent increase. Floating debt has gone from Rs1,637,000,000,000 to Rs2,446,000,000,000, a 49 per cent increase. Unfunded debt, over the same period, has gone from Rs,1,020,000,000,000 to Rs1,466,000,000,000, a 44 per cent jump. And, as a direct consequence, we have the kind of price increases that we do.
It is a naked fallacy to state that the price of oil in the international market has gone up and thus prices in Pakistan are merely following the trend. To begin with, on 25th March 2008, the day that Syed Yousaf Raza Gilani took oath of the prime minister’s office, OPEC’s basket price stood at $96 a barrel and has since come down to $91.27 (as of January 4), a drop of 5 per cent. Secondly, the rate of inflation in Pakistan depends on Pakistan’s monetary policy (read: printing of rupees) and has absolutely nothing to do with prices of commodities outside of Pakistan.
Pakistan’s inflationary spiral is eroding the purchasing power of the rupee, discouraging both savings and investments. The Law of Inflation states: “whatever goes up will go up some more’. And then there are the wise who say that ‘inflation is the senility of democracies’ [/COLOR][/SIZE][/FONT]

A blood-dimmed tide
 

[FONT="Comic Sans MS"][SIZE="4"][COLOR="Blue"]A blood-dimmed tide

Ghazi Salahuddin

Shaken by the assassination of Salmaan Taseer in a high-end market in Islamabad on the fourth day of the New Year, many of us have been struggling to contend with the message that it bears for the future of Pakistan. And it is not just the brutality of that murder most foul that disturbs the mind. What has followed in the abject display of admiration for the murderer and the response of so many religious leaders presents a dreadful portrait of our society.
Logically, the assassination and its aftermath should have compelled our rulers to reflect on the existing state of affairs and make an attempt to understand the implications of this obvious surge in religious extremism and intolerance. I keep wondering about what our military leaders would be thinking about this situation, considering that they have to bear some responsibility for promoting and protecting this trend. What, for instance, are the thoughts of our erudite chief of the army staff? Is the military top brass engaged in any serious appraisal of a situation that has a bearing on our national security?
We may also refer to the ability of our politicians to comprehend and then deal with the challenges that Salmaan Taseer’s assassination has posed to the survival of a democratic system that is rooted in the freedom of thought and expression and in the cultivation of an environment in which rational debate is possible. But, ah, they seem rather powerless in shaping our national priorities. We know where the levers of power are located and who calls the shots when the chips are down.
Also, the politicians must dance to the tune of popular opinion and in the absence of any concerted efforts to educate or enlighten the populace, the clandestinely empowered Islamists, though still devoid of majority support, are able to intimidate even the supposedly liberal and democratic parties. The manner in which the Pakistan People’s Party has sought to camouflage the meaning and the significance of Salmaan Taseer’s admittedly courageous stance is a plot that would be fitting for a Greek tragedy. Even otherwise, the quality of governance and the propensity for corruption that our political rulers have demonstrated is in itself a tragic tale.
There is this intriguing attempt to ignore the antagonistic social division that the event has brought into a sharp focus, in spite of the fact that political parties of the ilk of the PPP, ANP and the MQM are morally bound to confront socially regressive and bigoted elements in society. In fact, the repeated policies of appeasement by our rulers have led us to the brink of disaster. This process, sadly, was launched by the founder of the PPP.
Anyhow, now that we are perched on the very edge of the precipice, what is to be done to salvage the option of creating a liberal, socially plural, egalitarian and democratic polity in Pakistan? This question is to be posed with the presumption that our ‘establishment’ has nurtured some factions of religious extremists – the so-called assets – only for tactical purposes and that it still believes in a Pakistan that keeps pace with the modern world and is mindful of the natural aspirations of the people of this country for peace and economic development.
A forbidding thought comes to mind: does the ‘establishment’ have the necessary intellectual resources to be able to understand the crisis of Pakistan with an open mind and in the light of historical and contemporary realities? As individuals, we may safely presume, many senior functionaries would have doubts about policies that have led to our present impasse. Perhaps the social divide that has acquired a deadly dimension at this time also pervades the higher levels of the establishment. What matters, however, is its collective mind and its deep-rooted biases – so deep-rooted that some major shifts in domestic and regional affairs have apparently not touched the contours of our national security policies.
What has happened in the wake of the murder of Salmaan Taseer is alarming in the specific context of the range of intolerance and extremism in Pakistan. We were always aware of the fundamental divide between the liberal and the orthodox, militant forces. We were also conscious of the fact that a rational dialogue between the two sides was difficult because of intolerance and prevalence of violence in society. Still, what we have now is devastating in its possible consequences.
When the floods came some months ago, we were astonished to see the deprivations of those who had been herded into relief camps. It was a kind of revelation. A similar revelation about the dominance of obscurantism in our society has now hit us. So much so that a cloud of fear has descended across the land, leaving so many liberate and moderate people to wonder if Pakistan is their country, too. The issue is not whether this country is safe for democracy. Also threatened is the culture of civility and human values and open-minded discourse.
Obviously, this is a situation that should readily attract the attention of our rulers, including the elected ones. Even though the blasphemy law has become an urgent point of reference, the basic issue is the surge in religious extremism and intolerance. Is this not an existential threat to the survival of Pakistan? And how can we deal with this threat?
Looking at it from another angle, it seems that the problem is not so much the rise of extremism as it is the continuing decline in our intellectual and humanistic values. Our social indicators remain very dismal. The scope for cultural and artistic creativity as well as appreciation is shrinking. The mass media, catering to the lowest common denominator, is reinforcing this trend. In the first place, we cannot provide universal primary education. Then, the ones who are able to go to school do not acquire any meaningful education. Our educational institutions do not encourage learning in its real sense.
To return to what I said at the outset, shouldn’t our military leaders who seem to have a veto power in defining our national sense of direction, be worried about this state of affairs? Can they not collaborate with our civilian rulers to at least make a serious review of what is happening to this country in its immortal yearning for peace and social justice?
The point is that the present drift is frightening in its potential to subvert the initial vision of Pakistan as a modern, moderate and democratic country. The political scene, too, is promoting instability and social discord. Against this flaming backdrop, the impression that any one who has the courage of his convictions is very likely to be silenced would tend to suppress the very spirit of resistance to forces of death and destruction. [/COLOR][/SIZE][/FONT]

Smokers' corner: what casualties these are
 

[FONT="Comic Sans MS"][SIZE="4"][COLOR="Blue"]Smokers’ Corner: What casualties these are

Nadeem F. Paracha

In the 1970s former prime minister Z A Bhutto once described Pakistan as a social lab to conduct various ‘Islamic experiments’. I don’t know whether Bhutto was being cynical or enthusiastic about this, but yes, it most certainly seems that this is exactly what this unfortunate republic has been all the while.
Forget about secular societies in the West that just can’t make head or tail about the way many Pakistanis behave and react in the name of religion; I have also seen people belonging to various Muslim countries sometimes scratch their heads when contemplating the behaviour of Pakistanis in this context. Are we as a Muslim majority nation really all that unique? For example, why only in Pakistan do people rise up to demand that a particular sect be declared non-Muslim — as if considering everyone else as heretics makes us feel and look more pious?
Why only in Pakistan do people remain quiet when certain man-made ‘Islamic laws’ are openly exploited to conduct personal vendettas against minorities?
Why only in Pakistan do people go on strike when a government even hints at amending such laws, despite the fact that the more sober Islamic scholars have
over and over again termed such laws as having few, if any, historical and theological precedents or justification? Are such laws yet another way for us to loudly mask the glaring social, political and economic hypocrisy that has become a way of life us?
Then, why only in Pakistan do people come out to destroy their own cities and properties for an act of blasphemy taking place thousands of miles away? And
anyway, in this respect, how seriously should the Almighty take a nation that won’t even bother to manage its own garbage dumps or dare speak up against the many gross acts of violence and injustice that take place in their Islamic republic and for which many are ready to burn buses and shoot people?
Why only in Pakistan do many people still consider violent extremists and terrorists to be some kind of gung-ho mujahids fighting nefarious infidels and superpowers, even when on most occasions it is the common Pakistanis that are being slaughtered in their own markets, schools and mosques by these romanticised renegades? Why only in Pakistan, as more and more people now pack mosques, wear hijab, grow beards and lace their sentences with assorted Arabic vocabulary, society, instead of reaping the social and cultural benefits of this show of piety continues to tumble down the spiral as perhaps the most confused and contradictory bunch of people?
Of course, we always have a handy set of excuses for all this. We lash out at ‘Islam’s enemies’ (most of whom exist only in our heads and in our history books); we scorn our politicians and ulema, but at the same time we are ever ready to kill, loot, plunder and go on strikes on the call of these very people. We blame western and Indian cultural influences, but have no clue what to exchange these with. So, unable (rather unwilling) to appreciate the fact that we share an ancient,
rich and regal culture with the rest of the subcontinent, we look towards the Middle East.
We reject our own culture but adopt a half-baked understanding of Arabian culture as our own. No wonder a Pakistani continues to smile and keep quiet about the insults he constantly faces in various oil-rich countries, but he would make a huge hue and cry if and when he faces the same in a European or American city. After all, we are Arabs, and so what if our Arabic is not up to the mark, we’re getting there. But unfortunately, that’s all we’re getting at.
I pity myself and my nation. Each one is now a serious causality of all the brazen experiments that have taken place on us by those who wanted to impose their own concept of Islam in our governments, schools, streets and homes. So the next time you meet a hip, young Pakistani dude quoting a religious text, or a Pakistani who stops you from jogging at a park because he wants you to join him for prayers (you can’t ask him to join you for jogging, though), or a burqa-clad woman claiming she is a better woman than the one who does not wear a burqa, or watch a cooking show host talking more about God than the biryani she is cooking, or a bearded barber advising you not to shave, just forgive them all.
Treat us as causalities of the faith which we ourselves have distorted beyond recognition. A faith that was supposed to make us a vibrant, progressive and tolerant set of people, has, instead, and due to our own warped understanding of it, turned us into a horde of very ripe looking vegetables. [/COLOR][/SIZE][/FONT]

Another botched amendment?
 

[FONT="Comic Sans MS"][SIZE="4"][COLOR="Blue"]Another botched amendment?

Asif Ezdi

In its interim order last October on petitions challenging the constitutionality of amendments made by the 18th Amendment, the Supreme Court did not express its opinion on the merits of the issues raised. It only deferred further hearing of the case to the last week of January 2011 pending a reconsideration by parliament of Article 175-A, which lays down a new procedure for appointments to the superior judiciary. In this connection, the Court also listed some specific suggestions (para 10 of the order) to amend this Article. In addition, the Court gave its interpretation (para 15) on the manner in which this Article would be implemented.
The Supreme Court’s order was widely welcomed at the time as it averted what looked like an imminent clash between the judiciary and the legislature. Since then, parliament has passed the 19th Amendment, accepting most of the suggestions for amendments to Article 175-A. This is to be welcomed. As suggested by the Court, the strength of the Judicial Commission which makes nominations to the superior judiciary has been raised from seven to nine, by adding two more senior Supreme Court judges; and the parliamentary committee which is empowered to approve or reject the proposed candidate will be required to meet in camera and to record the reasons for its decisions.
Some of the amendments suggested in the Supreme Court’s order have not been accepted by parliament, as is its right. For instance, parliament did not agree to a suggestion that the name of the candidate proposed by the Judicial Commission would be final, if the Commission approved it again after its one-time rejection by the parliamentary committee.
While the 19th Amendment is pretty clear with regard to “suggestions” made in the Supreme Court’s order – some were accepted, while the others were rejected – the position regarding the Court’s interpretation of the manner in which Article 175-A is to be implemented (para 15 of the order) remains somewhat opaque. It is regrettable that parliament did not address this question in the 19th Amendment. We do not know whether that was intentional or another sign of incompetence. But this ambiguity will remain until it is clarified in another constitutional amendment or in a court judgment.
Until that time, it would seem that the interpretation of Article 175-A given in the interim order would stand. That means that meetings of the Judicial Commission will be convened by the Chief Justice of Pakistan; that he will have the sole power to initiate the name of a candidate; and that he will “regulate its meetings and affairs”. However, it is not so clear after the 19th Amendment whether the reasons given by the parliamentary committee for rejecting a candidate proposed by the Judicial Commission will be “justiciable by the Supreme Court”, as stated in the interim order.
Besides amending Article 175-A, which the Supreme Court had specifically referred to parliament for reconsideration, parliament has also made changes in some other articles of the constitution. An amendment to Article 182 now binds the chief justice to appoint ad hoc judges “in consultation with the Judicial Commission”. Here again there is lack of clarity, because the question arises whether the chief justice would present his nominee to a vote in the commission or consult each member separately. Normally, “consultation” can only take place with one or two individuals. If there is a larger body, the only way of ascertaining its opinion is to submit the matter to a vote.
It is also regrettable that while revisiting the 18th Amendment in compliance with the Supreme Court’s order to reconsider Article 175-A, parliament did not make use of the opportunity to remove the ambiguities and flaws in a few other articles of the hastily adopted amendment that have since become clear. One example of such an ambiguity is Article 89 on the ordinance-making power of the government, as modified by the 18th Amendment. The intention of the Parliamentary Committee on Constitutional Reform, when it drafted the amended article, was that in future an ordinance would not be reissued by the government after the expiry of its stipulated life but may be extended once only by a further period of four months with the approval of either house of parliament. However, the PCCR was unable to translate this intention into a clear legislative provision and the article as it stands now allows both a reissuance and an extension.
Every government in Pakistan, including the present one, has misused the ordinance-making power to make laws which are unpopular or benefit particular interests. What makes this government unique is that it might actually have been guilty of committing or abetting an act of forgery in promulgating the National Accountability (Amendment) Ordinance last September. In a case challenging this Ordinance before the Supreme Court, the chief justice has noted that a letter addressed to Zardari by the prime minister recommending the approval of the Ordinance appears to have been tampered with. If this is substantiated on further inquiry, the guilty however high and mighty must be brought to justice and disqualified from holding public office, whether that of the prime minister, minister or member of parliament.
Among the many flaws of the 18th Amendment, there are two which were even admitted subsequently by some members of the PCCR: first, the amendment to Article 17 deleting the requirement that political parties must elect their leaders and office-bearers; and, second, the amendment to Article 63-A empowering the party head, in place of the head of the parliamentary party, to take the initiative for unseating a defecting member of the legislature. Parliament would have done a lot of good to its own badly tarnished image if it had undone these amendments but it regrettably failed to make use of the opportunity.
The government’s claim that the 19th Amendment has resolved the argument over the constitutionality of the 18th Amendment will be coming under test before the Supreme Court when it resumes hearing of the case at the end of the month. The Court will then be pronouncing itself on the merits of the case – not only on the revised Article 175-A but also on the other provisions of the 18th Amendment, which have been challenged on grounds that they are inconsistent with the “basic structure” of the constitution, a doctrine that the Court did not reject in its interim order.
Whatever the verdict of the Supreme Court, there is no justification for the government’s claim that the adoption of the 18th and 19th Amendments is “a triumph for parliamentary democracy”. Shaukat Aziz, the very model of a sidekick, enjoyed more authority as prime minister under Musharraf than Gilani does today under Zardari. The ministers owe their jobs and their loyalty to Zardari and treat the prime minister with polite disdain. It is clearer than ever before that Gilani is a dummy and the supposedly sovereign parliament does not even serve as a debating society.
The 18th and 19th Amendments were drafted mainly to serve the narrow political aims of the party leaders. No opportunity was given for a public discussion of the many complex and important issues they raised. It is therefore no wonder that amendments to the 18th Amendment have been necessary to rectify its many flaws. After the 19th Amendment, there is already talk of an imminent 20th Amendment to remove some more of the shortcomings of the 18th Amendment.
Still, Gilani has announced the award of Nishan-e-Pakistan for the members of the PCCR in recognition of their services. He obviously does not know that under Article 259 of the constitution, the government cannot confer any awards on its citizens except for gallantry. That is not, however, a trait that the committee members were required to display in their work. In any case, if Gilani had inquired from them, they would probably have asked instead for plots of land.[/COLOR][/SIZE][/FONT]