Old vessels will have to change — I
By Farooq Sumar

Our most serious challenge is the free fall of the economy, abysmal GDP growth at three percent, record levels of deficit financing, high Inflation, high unemployment and a mountain of debt.

Election 2013 may not have brought a sweeping change but there are discernible changes in the way people expressed their opinion when they were allowed to do so with relative freedom and the record numbers that voted. For the first time the electorate has punished poor performance by rejecting the parties of the last ruling alliance and defeating many a stalwart in the process. Barring Karachi and probably Hyderabad, where large scale rigging is alleged, there are complaints of selective rigging in Punjab and the Balochistan scene is murky. Otherwise, this has been a free election whose fairness will be determined upon how the Election Commission deals with the serious complaints. A hitherto unknown party, Imran Khan’s Pakistan Tehreek-e-Insaf (PTI), has emerged as the second largest party; it will probably form a government in Khyber Pakhtunkhwa, and it has also established a reasonable vote bank countrywide.

Surely the Pakistan Muslim League-Nawaz (PML-N) has had much to reflect and much to learn since its illegal overthrow in 1999. The party has been in the wilderness for long and Mian brothers have undergone a painful exile. All this must have brought about changes, hopefully for the better. The number of serious crises the country faces today almost on all fronts are daunting, to say the least, and Mian Nawaz Sharif will be wearing a crown of thorns as the next prime Minister, and therefore, he needs to tread carefully but decisively on all issues.

The misrule of the last 25 years, particularly of the last 10, has squeezed the last drops of blood of the country politically, economically and socially. The common people are impoverished, there are divisions within. This situation requires that the PML-N makes well-considered decisions; it should not commit the mistakes of its past governments and face each challenge with a set plan, which is coordinated with and ties up to an overall central plan.

Some of the past mistakes that need to be avoided include the tendency to create confrontations with major institutions such as the judiciary, the establishment and the media. Mr Sharif has demonstrated his commitment for the independence and respect of the judiciary during the last few years, it is expected that the same attitude will continue while in power. We hope that a policy of discussion and persuasion will be followed to create trust, harmony and respect with other institutions.

The PML-N is accused of overlooking the needs and requirements of the other three provinces and concentrating mostly on Punjab’s development. For instance, the Lahore to Islamabad Motorway is considered an adventurous project with little economic value. This money could have been well spent on less prestigious and more needed projects. During the election rhetoric one heard plans of various large projects, which creates the impression that the penchant for adventure is still alive. Some also point out that entrepreneurs from the Punjab were favoured for projects in the past. This label will become more prominent since the party’s victory is almost entirely based on the seats obtained in the Punjab, and the three smaller provinces will probably be ruled by other parties. In order to secure the Federation, it will be necessary to dispel such thinking by demonstrating not just evenhandedness but actually being generous to the smaller provinces as poverty, unemployment and illiteracy are much higher in all three of them as compared to Punjab. Confidence-building and closing the credibility gap by actions and deeds are essential for Pakistan’s success.

The major challenges facing the incoming government are the complete breakdown in law and order and the large scale presence of all types of militias creating perpetual violence, the collapse of the economy and the immediate need to find short-term solutions while medium and long-term plans are developed, to find solutions to the energy shortage, to combat illiteracy, to evolve a policy to deal with the Taliban and the Tehreek-e-Pakistan, to deal with the US on drones, to develop foreign policy initiatives keeping in view US departure from Afghanistan in 2014 and also for negotiations with India.

The unchecked growth of mafia, proliferation of arms and creation of clandestine extremist organisations since the 1980s in collusion with a corrupt and inept police force and some major political parties has made the rule of law redundant. These facts are known, the criminals are known, their protectors are known but no action has seriously been taken to eliminate this deadly disease that is constantly gnawing away at the vitals of the country. Be it the sectarian violence perpetrated by the Lashkar-e-Jhangvi or the social crimes and oppression of the feudal in the rural areas, all are committed with the assistance of local police and other security agencies. Same is the case for the persecution of minorities. For the last 25 years Karachi is hostage to such crimes. It is public knowledge that the political parties that have continuously been part of successive Sindh governments are directly involved in the mayhem. If we allow the country’s commercial pulse to be paralysed how can we persuade foreigners to invest? Or if we refuse to eliminate extremists who kill and maim Shias what kind of justice are we providing? Islam demands justice and protection for all subjects regardless of creed or class. And so does the international community; imagine the image of lawlessness, violence, failure of governments to protect the people, an unending insurgency in Balochistan and its almost permanent occupation by the military. All this can be solved, the people expect that the 2013 election will help eradicate the mafia and extremists and establish the rule of law and also find a permanent solution to Balochistan by negotiation. The incoming government must recognise that without eliminating these serious internal issues all its efforts on the economic front cannot bring the required results.

Our most serious challenge is the free fall of the economy, abysmal GDP growth at three percent, record levels of deficit financing, high Inflation, high unemployment and a mountain of debt. Illiteracy knows no bounds, the rupee is on a constant slide and the irresponsible spending spree of the notorious Zardari government supported by the reckless printing of notes has created a dangerous situation.. The other serious issue is the repayment of the IMF loan installment that is almost due and negotiations for further support are inevitable.

Is this not a familiar scenario? Have we not been at the edge of a precipice before? Always the begging bowl. It is a fact that the Pakistani economy has never taken off, it has failed to broaden the base of development and create large scale businesses and industries or to attract meaningful foreign investment, and as a consequence, it has most importantly failed to provide jobs, healthcare, education and a dignified life to more than 90 percent of its people. Therefore, it certainly qualifies to be ranked as a failed economy over the last 60 years, as it never attempted to fulfil the requirements of the masses, at best it worked in the short-term interests of the ruling classes and the visionless business community.

Building a strong economic base has never been our priority, the ruling classes have been preoccupied with protecting and supporting the quasi feudal base and deliberately neglecting education of the populace. Existence of feudalism and lack of education are the death knell of the economy. You will have to change this if you want economic prosperity.

(To be continued)

The writer is a businessman and a former chairman of the National Textile Foundation. He can be reached at fsumar@cyber.net.pk

http://www.dailytimes.com.pk/default...5-5-2013_pg3_5

Old vessels will have to change — II
By Farooq Sumar

In the short term, immediate steps need to be taken to stop the bleeding and stabilise the economy.

Can Mian Nawaz Sharif bring about a change in our economic policy to make a complete departure from the policies of trickledown effect that have failed miserably, to bold policy initiatives that would provide relief to the impoverished masses? It can be done with the help of economists of stature in other Asian and Latin American countries. Set up a panel of Chinese, Malaysian, Singapore and Brazilian experts along with ours and seek their assistance. This should be done to formulate medium and long-term plans for setting the course of the economy. It will not be an easy task, starting from changing our rusticated thinking on economic policymaking to evolving a new policy suited to our needs and then implementing it with sincerity and full commitment.

In the short term, immediate steps need to be taken to stop the bleeding and stabilise the economy. Firstly, government expenditure needs reduction in order to avoid printing notes. The bureaucracy can be trimmed easily by about 10 percent; a federal cabinet of less than 20 would help as also a small Punjab cabinet. Discontinue development funds to parliamentarians as they have proved to be wasteful as well as a source of corruption. Privatise the Pakistan Steel Mills and PIA and such other burdens. Secondly, find a workable and meaningful solution to impose an agriculture tax. This is important in order to bring equality of taxation and also that other sectors no longer use it to justify their avoidance of taxes; besides it will bring much needed revenue. Thirdly, as businessmen are part of the PML-N’s vote bank, the party must put pressure on them to pay taxes and if they do not comply measures such as turnover taxes, all payments by crossed cheques, etc, could also be introduced. Thirdly, an immediate short and medium plan for alleviating energy shortages within two to three years where a visible difference is noticeable in the first 18 months. Fourthly, to deal with the IMF negotiations, which are imminent, an experienced and competent team of technocrats, not chosen on their loyalties, should accompany the new finance minister.

The miserable state of education and the consequential level of illiteracy is appalling at all levels. Those who have been to schools and colleges, more than half of them cannot be considered educated and fit for the job market. A major part of our economic failure can be attributed to across the board illiteracy and very poor quality, whereas our future economic development is completely linked to our progress in the sphere of education. The present structure, starting from the ministry of education, HEC and the various other tiers, all of them need to be totally revamped as they are responsible for the utter mess. A commission needs to be made immediately consisting of some eminent names in private sector educational establishments, the very few exceptions that exist in the public sector, and well known Asian educationists. Full powers be given to formulate a policy plan spread over the next five, 10 and 15 years, with recommendations including financial needs. A government commitment to meet the cost. They should also be asked to implement it. Until this is done there is no need to increase the education budget as there is no point putting good money into a hopeless system.

The new prime minister has to deal with the Taliban war in the tribal areas where our troops are bogged down since almost 10 years against the terrorism of the TTP, which has killed around 50,000 soldiers and civilians. The war with the Taliban was not our war. General Pervez Musharraf made it ours, and we have to find a solution by taking foreign policy initiatives as part of the 2014 US withdrawal from Afghanistan and extricate ourselves quickly. Our foreign policy initiatives will also have to deal with the whole gamut of questions raised by the American withdrawal; mistakes made at the time of the Soviet withdrawal must not be repeated. The ‘strategic depth’ theory was flawed and still remains so as it cannot be supported without resources. Therefore, our goals should be realistic, not adventurous.

Mian Nawaz Shareef’s strategy to engage the Indian PM so early augurs well for the subcontinent. A settlement with India during his term would bring many benefits to the country.

Mr Sharif’s task is onerous, the country is teetering, dangers lurk everywhere and very few are easy to solve. This requires sincerity, honesty, commitment, freedom from bias and prejudice, building consensus without sacrificing principles, tapping the country’s best talent regardless of affiliation, calling for outside help where local expertise is missing, meticulous planning and of course hard work. Some of these qualities were missing in his previous terms as PM, but then a lot of water has flowed since and the changed circumstances call for changes in him. We wish him luck.

(Concluded)

The writer is a businessman and a former chairman of the National Textile Foundation. He can be reached at fsumar@cyber.net.pk

http://www.dailytimes.com.pk/default...6-5-2013_pg3_4

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"Nay! man is evidence against himself. Though he puts forth his excuses." Holy Qur'an (75:14-15)