The rise and fall of Islamic militancy

A PRINCIPAL fallout of the Taliban war, now in its terminal stages, is that the right-wing Islamic militancy has been dented as a worldwide phenomenon. What came, as a rude shock to the international Islamic brigade fighting in Mazar-i-Sharif, Talogan, Kabul, Jalalabad and Kandahar was the zeal with which the Taliban surrendered to the coalition forces, at times without giving battle.

The international Islamic brigade consisting mostly of Arabs and Pakistanis were prepared to fight; not so the Taliban. The ‘foreigners’ who considered themselves fighting a holy war are now abandoned and loathed by both the Taliban and their enemies. National self-interest has prevailed over ideological considerations. The psychological consequences of this last Afghan war are likely to cast long shadows.

Islamic militancy is not over and may resurface in the future, but for now it has suffered its worst military and psychological defeat; its reverberations will affect the political paradigm from Morocco to Indonesia, in particular Saudi Arabia, Pakistan and Egypt. But not Palestine where the struggle is not ideological but nationalistic.

What does the denting of Islamic militancy mean for Pakistan? A huge sigh of relief. September 11 events may be the biggest blessing in disguise that this battered country has had in a long time. Blessings?

For one, sectarian terrorism which has warped our lives in recent years, has received its severest jolt ever. As many as 93 Shia doctors and engineers — mostly highly skilled specialists — have been gunned down in the past two years by Sunni fanatics, thanks to the sanctuary provided by Mullah Omar in Afghanistan for Lashkars with murder on their agenda. Parts of Pakistan in the tribal areas like the Malakand division were slipping out of the control of the Pakistan government.

The so-called Jihadis had also disrupted the Karakorum highway for about two weeks last October. An ambiance of tribal defiance has existed for many years with an intent to obliterate the borders between Afghanistan and Pakistan. The obliteration of borders served the splendid purpose of smuggling not only of tea and tyres but also opium and heroin into this country. The political and economic losses because of this lawless state of affairs acquiesced in by Pakistan for several decades are now under better control. Our western border security is higher than ever before. The Durand Line, which in the past decade was near invisible, is now re-emerging.

The time has come for Pakistan to put paid to the tribal blackmail. The laws of Pakistan must extend to the tribal areas. This is the right moment to consolidate the western borders of Pakistan. It will be a grave error of judgment to let this opportunity pass. In this window of opportunity, the bara markets must yield to our sovereignty. Madressahs must be brought in line with our education system. The two million Afghan refugees have to be sent back before next summer and the well-known smuggling routes from Afghanistan for men and materials sealed.

Our religious bigots have tarnished the sacred concept of jihad. The time has come for our state organs of Islamic interpretation to declare as to who has the authority to declare jihad in an Islamic state and issue the injunctions that apply to this concept. If each and every bigoted cleric has the authority to declare jihad, then one man’s jihad is another man’s murder.

More crucial for us is to measure the fallout emanating from September 11 in the context of the ongoing Kashmir liberation war. The time has come to emerge from the closet of yesterday’s conventional wisdom. The wisdom espoused by Mullah Omar’s men who enjoyed the full support of the ISI in recent years, has now come to roost. Time was when they held a monopoly of what was the national interest. Woe betide the nation whose national interests are decided by spooks — and corrupt ones at that. The hollowness of our Afghan policy since 1995 stares us in the face.

Let us draw the line between a Kashmiri freedom fighter and a ‘foreigner’ — Pakistani mujahid. What is the difference? Both may be equally committed to the cause of Kashmir’s freedom, but, the former has responsibilities not shared by the latter. The former may have a mother and a sister back home, the latter none. Therefore attitudinal differences accentuated by cultural and linguistic angularities generate cleavages in any people’s struggle when outsiders become involved.

A genuine national liberation struggle against modern colonialism needs no foreign crutch. And if it does, the struggle is flawed. History is replete with examples of national liberation struggles where the arms of the oppressor is the armoury of the oppressed. A shining example is the Palestinian war of national liberation. Remember the images that we see almost daily on the TV screen of Palestinian youths armed with stones taking on fully weaponized Israeli soldiers. Courage of this order inflicts a moral defeat on the oppressor. But killing innocent men, women and children in shopping malls, as the foreign supported Hamas is wont to do, are acts of cowardice, which results in a moral defeat for the oppressed.

A war of national liberation is essentially based on a premise of morality. Random killings of innocents in Kashmir — by our so-called liberation fighters — sullies the moral basis of the Kashmiri struggle.

Foreigners with a higher level of commitment to a cause tend to take over the driving wheel from the locals. It now emerges that it was Osama bin Laden who was the real master of Afghanistan, not Mullah Omar. Much the same has happened in Kashmir.

There are those who say that the means don’t matter so long as the desired end is secured. These people are dead wrong. The Soviet-Afghan war was fought on this principle. Let hindsight be a teacher.

If history with its ‘flickering lamp’ is any guide in the far-fetched possibility that the vale of Kashmir is secured by the arms of religious zealots, then the vale will be another cockpit of instability like Afghanistan.

True it is that India does not listen to reason or justice in the valley. Indian freedom born in non-violence is today mortgaged to the bullet. If as the Indians say its unity falls apart if Kashmiris are granted a free choice, then, is that unity worth having? This can only be answered by Indian conscience.

The people of this unhappy vale have to win eventually; but, in ways unforeseen at the moment.

The writer is a former member of the Pakistan National Assembly.

Waiting for Enron man

I FOUND Oyster, a pink-slipped Enron employee, sitting on his porch with a rifle on his lap. I asked him if he was waiting for terrorists to attack.

He said, “No, I’m waiting for Enron executives to drop out of the sky in their golden parachutes. They are more dangerous than terrorists.”

“How can you say that?”

“The company has gone into bankruptcy. The executives sold their inflated stock, knowing the company would soon run out of cash. But they wouldn’t let the employees of the company unload their shares. They also paid themselves $55 million dollars in bonuses and used up our pension funds to gratify themselves. They issued us parachutes that wouldn’t open. The guys with the golden parachutes committed war crimes against their own people. If I had my way, I’d try them all in a military tribunal then shoot them.”

He cleaned his gun to make sure it was still working.

“How do you know they will land on your property?”

“I had a tip from one of their accountants who was in charge of fiddling with their books. I expect them to float down at any time with their lawyers. This is the biggest bankruptcy case of all time.”

“Won’t the government prevent you from shooting them?”

“No way. They’re from Texas and the head of Enron was President Bush’s best friend.”

“Frankly, I don’t understand why the Enron executives rated so many golden parachutes. What did Enron make?

“Nothing. They bought gas from one company and sold it to another. They never even got their hands dirty. Then they got into businesses they didn’t know anything about and owed billions more than they made. They better not drop here, or they are going to get a bucket-load of shot you-know-where.”

“I suppose thousands of people lost their jobs.”

“It’s been a massacre — even worse than the Alamo.”

Just then, a man in a golden parachute and cowboy boots dropped out of the sky and landed in the field beyond the house. Oyster said, “Put your hands up. You’re my prisoner.”

“Don’t shoot. I’m just a poor Texas gas and energy dealer trying to save my country.”

Oyster said, “You’re no more than a smarmy bankrupt Texas businessman.” “That wasn’t me. It was my partners. I’m on your side. I didn’t ask for a golden parachute. They gave it to me so that I would keep my mouth shut.”

“Then what did you jump for?”

“I didn’t want the SEC to take away my bonus.”

Oyster said, “Where is my pension?”

The man replied, “That’s why I’m here. I wanted to tell you it’s in the mail.”

—Dawn/Tribune Media Services

What Bonn accords can do

WARS must be generally good for US presidents. Certainly the ‘War of Enduring Freedom’ has made George W. Bush immensely popular in America. A somewhat lacklustre Bush won the electoral race through a majority of one in the US Supreme Court and a ballot margin our own union council Nazims win by. War has brought the best of leadership qualities in him.

He has also arrived at the world centrestage as an awesome figure. With his band of ministers seeking more avenues of war, W. Bush is the veritable smoking gun out to rid the town of outlaws. The good but gullible American people now applaud his actions in distant lands. They appear to be indifferent to the birth of neo-McCarthyism.

That notwithstanding, there does seem to be a desire in Washington not to repeat past mistakes and to settle the Afghan issue. Political pundits point to other long-term interest of the US to keep its armed forces stationed in the region. It is of course true that North Caspian and Turkmenistan are repositories of the world’s largest known deposits of hydrocarbons. The politics of pipelines do necessitate a peaceful Afghanistan. But oil and gas pipelines to South Asia and the Arabian Sea are not why America is in Afghanistan, it is the sad events of September 11.

However, post-war construction of pipelines cannot hurt Texas companies. In early to mid-nineties Turkmenistan and Pakistan were the authors of the pipeline projects. But US companies were reluctant to invest billions of dollars because of the civil war. Later the anti-diluvian obscurantism of the Taliban regime repelled US firms and the State Department. Pipelines became pipe-dreams for Pakistan and Turkmenistan. The objective situation has mercifully changed now. Afghan resettlement can reap a rich harvest of peace dividends for the whole region, especially for Pakistan.

As Al-Qaeda and Taliban are defeated and the war in Afghanistan is wound up, there must be a finality to a farewell to arms. Peace must now prevail over war. A quarter century of conflict has destroyed Afghanistan, first by the cold war, then by the New World Order. Its proud people were killed, maimed and brutalized. Having lost everything, they still keep their pride and dignity, and a vast hope for peace. The world must give them a chance to build their lives again.

Their hopes now are on the success of the Bonn Agreements, which are far from balanced. Younis Qanooni, Fahim, and Abdullah Tajik trio have walked away with Interior, Defence and Foreign Affairs portfolios. The Tajik component of the Northern Alliance has a disproportionate slice of the power cake. They see it as a right of possession, a veritable spoils of war. The next big beneficiary is the royalist Rome group. The Cyprus and the Peshawar groups have got little, which in effect amounts to relegating the Pakhtuns and Hazara combined majorities to the back seat. The Northern Alliance Turko-Uzbek warlord Dostum has been left out completely. Even Burhanuddin Rabbani whose young Turks rebelled, is bitter at his marginalization. The other hiccup in the Bonn Accords is the question of UN peace-keeping forces where the Northern Alliance has its own view on its role, number and deployment. The Tajik forces would prefer the next government to be their hostage in Kabul.

Lakhdar Brahimi has emerged as a diplomat of considerable skills. He and his team with the keep of their German hosts hammered a deal, which is far from perfect, but is workable. These skills apart, it is essentially the US pressure on the Northern Alliance delegation that helped create the desired flexibility for its success. The Bonn Accords have been balanced through various built-in mechanisms, and the fact that Hamid Karzai was selected to head the interim government.

Karzai’s credentials are impeccable. He has a fair chance of creating a domestic consensus as well as a regional consensus of Afghanistan’s neighbourhood. Perceived as Pakistan-friendly he can be expected to moderate the pro-India proclivities of Younis Qanooni and his Tajik team. A respected Pakhtun of the influential Polalzai-Achakzai clans, Karzai can defuse the Pakhtun sense of deprivation. Hailing from the South he is the best suited leader to calm the unsettled Kandahar region. His views on terrorism and arms proliferation are sound.

The other balancing act in the Bonn Accords is the revival of the Loya Jirga process through the Special Independent Commission for the convening of the Emergency Loya Jirga within six months. After the six months of the interim administration of Karzai, the Emergency Loya Jirga will nominate the next transitional government for 18 months.

During those 18 months a Constitutional Jirga will frame the Constitution under which general elections will be held and a representative government will be formed. The Emergency Loya Jirga will be chaired by ex-King Zahir Shah. Presumably the Constitutional Jirga will either restore monarchy or elect Zahir Shah as president. If the Loya Jirga is balanced between the diverse interest groups of the Afghan nation, peace has a fair opportunity. I do not think the Fahim-Qanooni-Abdullah triumvirate can really matter that much once the Bonn mechanisms are triggered. In any case where is the Afghan national army Fahim is going to command? Where is the police force Qanooni is going to manage? Abdullah Abdullah being a foreign minister cannot act without Karzai’s directions. If anything the reconstruction portfolio is with the Rome group, which is where the purse shall be. The Northern Alliance dominance of the interim administration will have to be short-lived. That is the imperative need of peace.

Hamid Karzai will undoubtedly carry a heavy burden on his shoulders. He will need all his skills to extend the writ of the central government over the six city-states that have emerged in Afghanistan over the last decade. Kabul and the north-east region is Tajik dominated, Mazar-i-Sharif region in the north-west is Uzbek dominated, the Pakhtun majority Persianized region of Herat is controlled by the Tajik commander Ismail Khan, the Hazara Bamian-Bugdis region is back with the Shia Hizb-i- Wahdat, the southern Kandahar region is now ruled by Karzai nominated Pakhtun commanders Gul Agha and Mullah Naqibullah, and lastly the eastern provinces are being governed through Commander Qader Khan and Haji Zaman of the Nangarhar Shura.

These city-states are semi-autonomous with their own machinery of governance and militias supported by lethal instruments of war. It will be a daunting task for Karzai to make these six city-states accept a limited writ of state. With no army and police, Karzai government will have to rely heavily on the forces of international coalition and later on the UN peace-keepers. My estimate is at least 20,000 UN troops will be needed. This security force can only be withdrawn once an Afghan broad-based professional armed and civil forces are created. This alone can fill the power vacuum which exists today.

Disarmament and de-commissioning of weapons will become very dangerous unless it is done through a carefully planned and heavily funded UN programme backed by the coalition’s military muscle. And still, it will have to be simultaneous and asymmetrical between all six city-state regions. Also, the pillars of the state have to be erected again from the debris of war. Along with all these vital steps towards nation-building which incidentally is never tidy, the colossal tasks of fast-pace relief, restoration of order, reconstruction and repatriations will need to be addressed quickly. Finally all regional countries must push for Afghanistan to be a permanent neutral state through a UN resolution and the UN Security Council guarantee.

On the home front, I think there is no loss to Pakistan in the developments in Afghanistan. For eleven lonely years Pakistan alone carried the Afghan burden. Now it is being shared by the world with a fair chance of peace. It is true our Kashmir policy will come under pressure. But if we act wisely we can make adjustments in our policy without compromising our basic principled positions. Nations and states that lose their ability to adjust to changing international environment can end up like the Taliban regime.

General Musharraf did well to take unpopular but patriotic decisions since September 11. Now he must seek domestic consensus on national issues. Western powers have a way of lionizing their favourites to fulfil their agendas. After that they become realists and look for greener pastures. The good general can carve a niche for himself if he can hold fair and transparent elections allowing Benazir Bhutto and Shahbaz Sharif to lead their respective parties.

One’s conviction by the Lahore High Court was held fraudulent by the Supreme Court, and the other claims he was not a part of the 10-year exile deal. Both leaders represent a large chunk of national popular support. The two-party system is good for democracy and for Pakistan. In trying to atomize it, the general would be making a huge mistake. If Afghanistan needs a broad-based democratically elected government, so does Pakistan.

The writer is a former foreign minister.

Culture for the people: OF MICE AND MEN

INTELLECTUALS in Pakistan are frequently writing in newspapers about the various facets of culture, but none of them cares to ask the question why culture in our country is usually associated with the rich, the privileged and those well-placed in society?

The word culture covers a people’s entire way of life and not merely the fine arts and music and dance. But somehow when the word is mentioned nowadays it evokes the picture of the enlightened and the elite practising or luxuriating in its various manifestations.

Perhaps this is a throwback to the olden times when the arts, as also the finer crafts, flourished under royal patronage or were encouraged by the feudal aristocracy. Culture then was a luxury enjoyed only by the rich and the influential, while the poor artists, craftsmen and performers simply provided the instruments for this enjoyment.

Whether it was painting or architecture, music or dance, calligraphy or craftsmanship, or any of the artistic talents, even poetry and drama and acrobatics, the practitioners of these skills could not exist or make a living by depending on the cultural yearning of the common man. It was the nobility, presiding over big and small courts, and indulging their tastes and whims, who doled out the money to keep the show going.

Thankfully it is no longer so. The concept of democracy and of governments elected by the people, have changed everything. The fact that education is now widespread and even the poor can be said to have an aesthetic sense as much as the rich, has done a lot to upset the old notions about culture.

Now, in the under-developed countries of the world it is considered to be one of the foremost duties of governments to nurture, support and promote cultural activity so that the people can have a conscious feeling of pride in their heritage. In fact, these governments are even expected to create culture where there is none around, and experts are invited from Europe to unearth and locate it for popular consumption.

This is happening in the Gulf countries in particular which are awash with wealth from oil and gas. Materially their big cities have developed and advanced like those of the industrial nations of the West and Japan, but they found they had very little to offer by way of indigenous culture. So, experts actually came from Europe to pinpoint examples of arts and handicrafts, and even ancient architecture and archaeology, and make them flourish and attract attention.

I believe this lesson came from the socialist countries where there has always been a pronounced stress on culture of the people, by the people and for the people. Also, it was one of the aims of socialism to break the monopoly of the elite over everything, including culture and its different expressions, and make them available in their highest form for the masses.

In non-Muslim countries, since the people had no inhibition about the arts, not even about nude sculpture, their monarchs and presidents patronised men and women of the artistic professions and the world of show business. They made much of them, gave them coveted awards, invited them to the highest state ceremonies, showed them off to distinguished visitors with pride, and generally treated them as VIPs.

When the head of state or the prime minister of any of these countries met a famous singer or painter or dancer, it was he who felt honoured and not the painter or singer or dancer, who probably considered it a bore to be thus put on exhibition, and went through the drill merely for the sake of national prestige.

Look at Pakistan in the context of the above observations. In recent years the one cultural personality to bring honour and fame to the country was the late Ustad Nusrat Fateh Ali Khan, There have been others too but he put Pakistan on the cultural map of the world by his music. And yet the cultural bureaucrats in our radio and television refer to professional music-makers as mirasees, and the latter too, poor chaps, kowtow before them with folded hands.

This is one of our social tragedies. the most talented singer, the instrumentalist of the greatest renown, the qawwal who can move audiences to frenzy, are all given short shrift by government officials. On visits to India prominent public figures may touch their feet before talking to them and become ecstatic at the very thought of sitting by their side, but to the cultural bureaucrats and the elected leaders in Pakistan they are not worthy of being associated with socially.

Admitted that practitioners and performers from all artistic disciplines are given state awards on the occasion of Independence Day and these awards are personally handed over to them by the President of Pakistan. This denotes the highest possible respect. But, unfortunately, the respect is confined to the award ceremony only, and when they leave the Aiwan-i-Sadar no one even cares to offer them a lift to where they are going.

Let me tell you a story about the consideration given to artists. When Haneef Ramay was chief minister of Punjab he commissioned the late Ustad Allah Bakhsh to make a painting for the committee room of the secretariat in Lahore. When Mr Ramay fell from power the usual witch hunt began. A thanedar interrogated the hapless Ustad, a truly simple soul, about how much he had paid to the chief minister from the Rs 25,000 that he had received for the work!

This ignorant and coarse minion of the law couldn’t understand why the famous old painter was paid so much, for 25,000 rupees was a large sum in 1975, when, on his own admission, his input on the canvas and paints had not been more than 4,000 rupees. It was not just the interrogation, the man was most rude in his behaviour. Can you believe this happening in the so-called cultural capital of Pakistan?

So much for the elements that have kept the people out and thus hampered the progress of cultural activity in Pakistan. Thankfully there is increasing awareness among the non-elite that the various expressions of culture are a thing of beauty and that beauty is a need of the human being, be he rich or poor, educated or illiterate. This is a change that has come about with the march of time and not through any effort on the part of successive governments.

Put down that cookie

NEARLY two out of three adult Americans, and roughly 13 per cent of children, are overweight. The medical consequences are serious: Obesity contributes to the risk of killer diseases, including heart disease, stroke, cancer and diabetes.

This is not a new alarm, but past warnings haven’t gotten enough folks up from their chairs and out to work off some calories. So the surgeon general has outlined a plan for changes including more exercise for kids in school; restricted access to junk-food laden vending machines; more sidewalks, playgrounds and trails to encourage physical activity; better nutrition information for those dining in restaurants and fast-food joints.

It’s a broad response to a genuine concern, but we have a tiny quarrel with the timing. We were just settling in for a couple of weeks of cookies, candy and several celebrations that revolve, at least in part, around really good food. Could we revisit this issue on, say, Jan. 1? Then we’ll be ready for the seriousness it deserves. We’ll have room on our list of resolutions, and we clearly won’t be alone.

—The Washington Post

Profligacy and the debt trap

THE final round of pledging financial assistance by the western donors and Japan to Pakistan that began with a 700 million dollar grant from the US has ended in Paris far more favourably than expected.

Finance Minister Shaukat Aziz who led the Pakistan delegation to the Paris Club meeting says he is amazed by the outcome of the negotiations which is far beyond his expectations. Two-thirds of the bilateral loans of 12 billion dollars to be rescheduled are to be repaid in 38 years with grace period of 15 years, and the balance which are commercial loans are to be repaid within 23 years with a grace period of five years.

The extremely helpful deal has been settled on “Islamabad terms” as the Paris Club members have complimentarily described it and Pakistan becomes the fourth country in the history of the Paris Club to enjoy such generous concessions—-after Egypt, Poland and Yugoslavia. Pakistan has been demanding insistently that Pakistan should be treated by the international coalition for becoming a front-line state in the war against terrorism on the same lines as Egypt was treated by the West during the Gulf war. They may largely be pleased by the Paris deal.

This is not only the outcome of Pakistan becoming a front — line state in the war against terrorism but also of the exceptional diligence with which it has been abiding by the rigid reform programmes of the IMF, World Bank and the Asian Development Bank and its struggle to achieve macro-economic stability.

In fact, the three international financial institutions strongly pleaded the case of Pakistan at the Paris Club meeting and prevailed. The ADB has now come up with an assistance package of 350 million dollars for promoting agricultural growth and radical reforms of which some are very controversial, and promised a billion dollars more in 2002.

The Paris deal will result in the virtual write-off of 30 per cent of the bilateral debt, says Mr Shaukat Aziz. In addition, 500 million dollars of debt will be converted into grants for social sector development, particularly education and health.

In fact, far more donors are interested in converting a part or all of their loans into funds for financing the much needed social sector development. Pakistan is trying to make that a reality to make up for the frightful backwardness in these sectors. The cash flow gains for Pakistan through the Paris deal during the three-year IMF Poverty Reduction and Growth Facility is expected to be 2.7 billion dollars, along with significant savings in the subsequent years.

The bilateral assistance of 1.2 billion dollars announced recently by the western donors led by the US the 1.32 billion dollar package announced by IMF and the continuing assistance from the World Bank and the Asian Development Bank and finally the large scale debt re-rescheduling by the Paris Club provides a great deal of breathing space for the government. It covers not only the budget deficit and the balance of payments crunch but also provides larger funds for poverty reduction and social sector development. It can help fund the development of infrastructure to speed up the sluggish economic growth of the second half of the 1990s and the later period.

All that can eventually attract more foreign investment and make the big financial players in the world interested in our privatization. Meanwhile, the foreign exchange reserves of the country have been going up, and have touched 4.456 billion dollars, inclusive of 2.842 billion dollars with the State Bank of Pakistan and 1.614 billion dollars with the banks. The total reserves are now in excess of the IMF target. Funds are flowing in from outside, including higher home remittances. Even the Citibank is reporting the same along with Pakistani banks.

Following the Paris agreement Pakistan will be negotiating and signing separate rescheduling agreements with the individual members of the Paris Club, and Pakistan hopes to sign such agreements at very low interest rates in view of the very low rate of interest prevailing in the western world including the US and Japan.

The governor of the State Bank Dr. Ishrat Hussain has been talking of exchanging the old high cost loans for new low interest loans to take advantage of the very low interest rates all around the world. That should help reduce the debt burden even more. Mr Shaukat Aziz says the concessions Pakistan will be getting will be twice as much as the concessions it had secured when it got its loans rescheduled earlier.

Now that the negotiations for getting new aid and rescheduling of the old loans are largely over and the key agreements signed, the people should be informed in detail about the total funds secured and that how they will benefit from these agreements. They must know how these funds are going to be used.

We have been given the picture in varying details and not the full picture. As important as the quantum of aid or relief from old debt burdens is the manner the fund is going to be used and the results expected, and how is all that going to be ensured. How to prevent abuses and misuses of the funds, as it happened during the last Afghan war when large funds went into the pockets of the rulers, some of whom later emerged as Muslim League politicians.

Of course, the donors expect the IMF, the World Bank and the Asian Development Bank to do the monitoring well. But that alone is not enough, although they will be more vigilant now than before. They were watchful of the outcome of the much touted Social Action Programme I and II as well, and yet it had its abuses and setbacks. The system in Pakistan has too many crooks and corrupt elements. The claim that there is no corruption at the top now is not enough. The Nawaz Sharif government too used to make the same claim but the reality was far different as later developments showed.

Hence, the government is well advised to come up with a white paper on the total of grants and loans to be received and what is to be done with the money gained by not repaying the loans — 2.7 billion dollars of bilateral debt in three years—-and more later, how its proper use is to be ensured.

When the funds come as grants there is scope for laxity in their proper use or for their misuse. That had happened in the past as well. That should not be repeated now. Firm steps have to be taken to ensure that.

Dr. Ishrat Husain talks of the 60 billion dollars received as aid since the birth of Pakistan and the 28 billion dollars repaid. In fact, we have not repaid 28 billion dollars but far less. By the end of June 1999, the total foreign aid committed was 62.1 billion dollars.

But what is far more significant is that the 60 billion dollars is three times the initial Marshall aid for the recovery of western Europe. But while Europe recovered and made rapid economic progress and we had the German and Italian economic miracles, and in Japan a miracle without the Marshal Aid, we in Pakistan went deeper and deeper into debt. And we made no progress in the social sector. Even today two-thirds of our people are really illiterate and the health services are available only to the well-to-do. And much of our infrastructure is in a shambles.

And we are resorting to heavy taxation, including 15 per cent sales tax to repay the debt instead of the sectors and projects where we invested the loans repaying the debt or at least servicing the loans. And we have in addition to the 38 billion dollars external debt a domestic debt of Rs 1,800 billion on which interest payments of Rs 198 billion are to be made this year.

How did this tragic situation come to pass? It is time we set up a small group of experts to study the problem. At least a small group of senior researchers should be assigned the task and their findings published for the taxpayers to know why more of the taxes they are paying has been going for debt servicing than for the development of the country or social sector progress.

What is known for sure is that during the 1970s, ‘80s and ‘90s at least 20 per cent of the aid went for balancing the budget or covering the budget deficit. The overall budget, inclusive of the development sector, was showing a large deficit which rose to 10 per cent of the GDP in reality. The revenue sector too was in heavy deficit. Ultimately the debt servicing cost, for both domestic and external debt at Rs 329 billion rose to the extent of 75 per cent of the tax revenues. That meant more and more borrowing and far more taxing. The result is too many taxes and too little returns to the people. And the smarter among them are tempted to evade more and more taxes.