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DAWN - the Internet Edition


January 21, 2002 Monday Ziqa’ad 6, 1422

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Opinion


When Tony plays tennis: NOTES FROM DELHI
A test for Mr Bush
Post-Taliban scenario
Kashmir, the bitter truth: PRIVATE VIEW
Why some nations stagnate



When Tony plays tennis: NOTES FROM DELHI


By M. J. Akbar

TONY BLAIR does not look very British to us Indians. Instead of a stiff upper lip, he has a thrusting jaw. Instead of playing cricket, he plays the guitar. John Major used to be much more British. He had an upper lip so thick you could rest your case on it. And he played cricket. He also didn’t make any fuss. On his last visit to India, John Major said a bit about British industry, enjoyed the winter sun and went home. He refused to try and change the world.

Cherie Blair began her Indian visit on a Mother Teresa note, sharing lunch with some needy children of Bangalore. There was a time during the glory days of the British Raj when Indian Maharajahs had to hide their family jewels each time they invited Lord and Lady Viceroy over for dinner, for if Madam hinted that something was lovely you had to hand it over as “gift”.

Those days are long over, but having lunch with needy children might be going too far in the other direction. It was much better when Cherie Blair visited a Nandi temple in the afternoon, got a massage in the evening, and picked up a dress from tribals for a bargain of twenty dollars. This is far more the kind of thing we want visitors to do. The priests of the temple she visited were also very grateful, because the place got cleaned up. Twenty municipal employees worked for two days to make the house of the lord good enough for Mrs Blair’s nostrils. It has never been so clean in its history.

But Mr Blair does have the world on his agenda; he came to the subcontinent to save us all, not just to save a temple. Whether he has been assigned to do so, or whether it is voluntary, or whether it is an implicit statement of Britain’s renewed role in world affairs, the fact is that Mr Blair is doing all the heavy lifting on the subcontinent. There are expectations that President George Bush will come on a grand tour of South Asia before the summer is out. President Bush has every right to a triumph in the only proper nation conquered by the United States since the Second World War.

If, that is, the victors can find Mulla Omar and Osama bin Laden by then. Last heard Mulla Omar had escaped from the clutches of a superpower on a motorcycle, possibly of Japanese make, since Japanese vehicles were the preferred means of travel by the Taliban. The Americans have begun distributing leaflets to the Afghan masses showing Osama bin Laden in a suit and horribly-knotted tie, with the kind of shave and hairstyle that is advertized in small town barber shops all across the subcontinent. The leaflet also calls Osama a coward who has betrayed his followers.

Personally speaking, nothing would disguise Osama better than a shave. He could drop in for a cup of tea to my office and I would not have the gumption to phone the CIA and collect my twenty million dollar reward. But Mr Bush will seek peaceful solutions to this knotty region as eagerly as he wanted military ones in Afghanistan.

Did Tony Blair’s hop, skip and jump through Bangladesh, India, Pakistan and Afghanistan succeed? By the time he left the temperature on the subcontinent had dropped to more acceptable levels. Prime Minister Atal Behari Vajpayee and President Pervez Musharraf even shook hands in Kathmandu while Tony Blair was in India. Mr Vajpayee later described this as a courtesy call, but one can hardly overrate the value of courtesy in Indo-Pak relations.

Tony Blair’s strategy on the subcontinent was a neat one. From India he sent a positive signal to Pakistan, by “accidentally” suggesting to the media that Pakistan had a strong case on Kashmir. From Pakistan he sent an even stronger signal to India; that India had a non-negotiable demand on terrorism.

When push comes to shove, Tony Blair and George Bush are likely to stick to both these points. The biggest favour that President Pervez Musharraf can do to himself is to bite the terrorist bullet, as it were. This column is being written before his much-awaited speech (and this is one speech that will be heard as closely in India as it is in Pakistan), but if he follows up lip service with specific action the environment in South Asia could change radically. There is sufficient reason to believe that London and Washington have done some thinking about the cancer on the subcontinent, and would like to put into place the opening moves of a settlement on Kashmir.

That is an unusual statement to make, but these are unusual times. But this is totally dependent on what Pakistan is able to deliver on terrorism. The sceptical view in India is that Pakistan might be ready to hand over those involved in terrorism in Punjab, and take a more negative view of those involved in Kashmir. This will not travel. It is the use of violence in an effort to drive India out of Kashmir that is the substantive issue.

The real problem with this problem is that it has become a gross part of the emotional baggage, a question of ours and theirs, victory and defeat, all or nothing. No one takes a cool look at realistic options, or examines the price that is being paid for this dispute. Perhaps no one in power can afford to. The risk of breaking from the conventional mould is too high; electoral defeat in India and perhaps a worse fate in Pakistan. Leave along the emotional baggage of history, even the immediate past can become a trap.

Logic suggests that President Musharraf should tell India, perhaps through his televised speech: “We broke our talks in Agra over disagreement on cross-border terrorism. All right. Pakistan has joined the new international convention on terrorism. We will sign on that clause now. Ask an independent judge to determine how solid the evidence is against the twenty persons Delhi has demanded, and gets its judgment implemented in thirty days. On the thirty-first day let us start talking about all our problems, of which Kashmir is the most difficult of them, and therefore deserves priority.”

Will this happen? Somehow I think not.

For five decades the favourite game of the subcontinent has been brinkmanship. Occasionally one side or the other has fallen on its face, but a little time, a little dust wiped off, and we go back to our old ways. Pakistan tripped up in 1965, sending raiders once again to do what they had failed to do in 1947; and fell heavily in 1971. India was unnecessarily aggressive with Operation Brasstacks; and got caught sleeping before Kargil before it smartly pulled itself together. But without anyone quite noticing it, the ante has been rising. Terrorist attacks that once stopped in the Valley have reached Delhi, and a military confrontation that was restricted to a part of the border has spread to the whole of it.

Tony Blair had barely left for home, then the war rhetoric resumed. Maybe there should always be a foreign guest wandering somewhere on the subcontinent; it keeps us more courteous. The coming week is probably safe, since the Chinese Premier is on Indian soil for a week. On the other hand, Mr Vajpayee could well remember that the Chinese launched a sharp attack on our good friends of the time, Vietnam, when he was on an important visit to Beijing as India’s foreign minister under Morarji Desai. But Colin Powell is treating jet lag in Islamabad and Delhi on his way to Tokyo this month, so that should keep fingers off the trigger till he departs.

Is the rest of the world more worried about war in the subcontinent than we are? Probably, yes. Because the rest of the world sees war for what it really is, without sentiment. When President Bush does come to India and Pakistan he will want to identify the contours of a new equation in South Asia. Any visit by him will be meaningless without this.

President Bill Clinton’s visit to India, and the Vajpayee trip to Washington that preceded it, made one vital and last contribution. It corrected the tilt towards Pakistan that has been a consistent element of American policy from the 1950s. Now that the scales are more even, America is better positioned to offer advice, if not to dictate direction. Neither India nor Pakistan will listen to dictation, but neither will reject advice out of hand either.

Surely the only way out of an increasingly dangerous impasse is to return to the table, and to talk. President Musharraf enjoys a regular game of tennis. He should know the game well enough to realize that the ball is in his court. He may or may not know this, but Tony Blair plays tennis too. It would not be very courteous, would it, to make Mr Blair return to the subcontinent to pick up that ball.

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A test for Mr Bush


AFTER his inauguration last year, President Bush banned international family planning groups that receive American money from performing or advocating abortions, even if they did so using money from non-US sources.

This sweeping “gag rule” would be unconstitutional if applied within the United States, and preventing family planning groups from offering abortions that are safe for women is likely to lead to more abortion-related deaths. Still, Mr. Bush did at least declare himself in favour of international family planning in general. Now that declaration is about to be tested.

The test is whether the administration hands over $34 million set aside for the United Nations Population Fund in the foreign aid appropriations bill that Mr. Bush signed last week. Rep. Chris Smith, R-N.J., has written to the president asking him to withhold the funds because of the agency’s programmes in China, and the administration is considering its answer.

What’s more, the Bush administration itself has spoken favourably of the UN agency.

—The Washington Post

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Post-Taliban scenario


By Prof Khalid Mahmud

THE post-Taliban political dispensation in Afghanistan has yet to take shape. The interim administration headed by Hamid Karzai but dominated by the Tajik faction of the Northern Alliance derives its authority from the Bonn agreement. The American presence, plus the international peace-keepers, will ensure that the uneasy peace remains in place during the next six months, allowing ex-king Zahir Shah to return to Kabul and convene a Loya Jirga for securing a mandate for the composition and authority of the provisional government.

How things will develop between now and the expected installation of a broader and more representative regime in Kabul is anybody’s guess. Given the uncertainties of power contention in Afghanistan, anything can happen — from a smooth passage to the D-day to a doomsday scenario prior to it.

The Bonn agreement was willy-nilly accepted by all the participants but it has hardly been a viable power-sharing arrangement equally acceptable to all the Afghan factions, in particular the Pakhtoons who do not have an effective presence or voice in the interim set-up. Much will depend on how Hamid Karzai rises to the occasion to assume a leadership role and assert his authority over the motley group he is required to preside over. Given an extremely delicate assignment to handle, Hamid Karzai begins with a handicap.

He came out of the blue to claim the top slot largely because known and established Pakhtoon leadership was not in the run. Thus he has to accomplish a two-fold job: to take charge of the interim government, and to establish his credentials as an authentic Pakhtoon representative, a sort of rallying point for the realignments of Pakhtoon political forces. Needless to say the Tajik trio of Abdullah, Fahim and Qanuni in his government has an obvious edge over him in the power hierarchy.

Although Burhanuddin Rabbani was sidelined in the compromise deal, and Uzbek warlord Rashid Dostum was subsequently accommodated as deputy defence minister, the Tajik clique is virtually in command in Kabul. A huge portrait of the late Tajik war hero Ahmad Shah Masood was hung in the hall when the interim government took the oath of office, while the ex-Khad (Afghan secret service) agent turned defence minister followed like a shadow the ‘compromise’ chairman of the 30-member council throughout the ceremony.

Apart from what may be termed ‘symbolism’, the powerful defence minister who seized the opportunity to enter Kabul in defiance of the understanding that his advancing troops would stop short of the capital city, has been using his muscle power to exert pressure on decision-making by the interim government. Although the Northern Alliance could not veto the deployment of international peace-keepers in Kabul, it was Gen. Fahim who negotiated with the British commander the terms of the mission, including the size of the contingent and its jurisdiction.

Divergent voices have been emanating from the interim set-up on several issues but more so with regard to relations with Pakistan. While Hamid Karzai expressed the sentiment of goodwill and friendship for Pakistan praising in particular the way Pakistan bore the burden of Afghan refugees for more than a decade, his Tajik ministers have made no bones about reaffirming their long-standing ties with New Delhi.

Two of them made haste to visit India, even before they were formally sworn in, and resorted to an anti-Pakistan tirade as they spoke in tandem with the Indian leadership. They also had a private reason to repay the Indian hospitality since their families are said have been living in India as official guests for several years. Ironically, the third ‘musketeer’ has found other ways of maligning Pakistan, such as spreading the rumour that Osama bin Laden was hiding in Pakistan, even though the US intelligence agencies refuse to buy the wild charge.

Islamabad does not seem to be perturbed over the prospects of Indian manoeuvres in Afghanistan detrimental to Pakistan’s interests, even though the Indians are poised for such an offensive. Some critics say Pakistan’s role has been marginalized, and its only bet now is a new equilibrium of forces in the interim government which cuts the Tajik faction down to size and reinforces the authority of Hamid Karzai as head of the government.

Little wonder he wants the Americans to stay on indefinitely as he finds himself in no position to counter the strength and influence of the Northern Alliance, and desperately needs some breathing space to rally forces. The Pakhtoon ranks are in total disarray. The Pushtun majority has yet to outgrow its Taliban connection. The so-called alternative leadership, for instance, the Kandahar and the Jalalabad factions, mainly comprise tribal elders, or erstwhile local commanders. To bring them together on a common platform is precisely the job Karzai is required to do in the next six months.

Hamid Karzai’s style of functioning reveals his urge for a grand reconciliation among all Pakhtoon factions, including the Taliban remnants. Unlike the Northern Alliance, he has no scores to settle but even his approach to dealing with the erstwhile Taliban leadership seems at variance with the American view. The decision to grant amnesty to the three highest-ranking Taliban leaders, including the controversial ex-justice minister, who surrendered in the first week of January, was an indication of how Karzai wishes to bury the hatchet in order to secure peace and stability in the country.

It goes without saying that he is not a free agent and there is a limit to which he can override the US fixation for vendetta against the Taliban hard-core. He has, nevertheless, been trying to pursue ‘forgive and forget’ as the cornerstone of his policy. As he brokered the Taliban surrender in Kandahar his instant impulse was to let Mullah Omer be also given amnesty, but he had to backtrack on it following a negative reaction from Washington.

The interim government in Kabul has to secure three principal objectives before it can be seen as a viable power arrangement. One, to establish a measure of collective functioning of the government, a team-work pattern of decision-making and enforcement rather than different groups working at cross purposes. Second, to extend its authority beyond Kabul to all parts of Afghanistan, by reining in the warlords now in control of their fiefdoms, and establishing the writ of the central government. Three, it set in motion the process of convening the Loya Jirga for the establishment of a truck representative and broad-based provisional government.

The Taliban power structure has fallen apart but their adherents have not been entirely put out of business. In several cities the Taliban administration abdicated power following a surrender deal and those who took over were not their sworn enemies. Will the Taliban be treated en masse as political untouchables, or sections of them are likely to be coopted in the new power structure as a crucial factor in any campaign for pacification, national reconciliation and political stability in Afghanistan?

The Americans will not pronounce the end of their Afghan mission as long as they do not capture Osama bin Laden, and also perhaps Mullah Omer, ‘dead or alive.’ Therefore the bombing raids may go on, while the US special forces become increasingly involved in the hunt for the men on the US-hit list. The Americans, who have hitherto been extremely cautious in deploying their own troops in combat, are now set to establish their military presence in Afghanistan, beginning with the takeover of the Kandahar airport and hot pursuit in the neighbouring Khost province.

The US seems to have worked out a division of work with its allies letting the British lead the multinational security force, while leaving the mopping up operations to its own forces. In any case, the Afghans will have to come to terms with the indefinite presence of the Americans on their soil, regardless of who runs the government in Kabul.

Divergence of interests among the key players in the regions such as Russia, Iran, Pakistan, Uzbekistan, Tajikistan, Kyrghzstan or even India is likely to surface in terms of collusion or contention with one another once the US military operation in Afghanistan is called off. Realignment of forces among the Afghan factions, more so the ‘surrogates’ of one or the other foreign power, will be another destabilising factor to reckon with.

The Americans would then be required to perform a delicate balancing act in order to keep peace in this ethnically divided country. A great deal will depend on how much money the Americans are prepared to put into Afghanistan to make amends for death and destruction brought about by their ceaseless combing. The prospect of sharing the bounty may well prevent the US backed political set-up in Kabul from falling apart too soon.

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Kashmir, the bitter truth: PRIVATE VIEW


By Khalid Hasan

ZAFAR RATHORE, my friend in Islamabad, has long been of the opinion that the press in Pakistan is free but not in a Western sense. While it is true that for some years past, newspapers have been at liberty to publish what they wish, unlike the West where what appears in the media affects the decision-making process, no such thing takes place in our country.

Those with the power and ability to make decisions that affect the people, the state and world beyond, follow no counsel except their own. If what appears in the press is in line with their thinking or plans, they may even condescend to make some minor suggested changes since there is no difference of opinion on the general issue. Essentially, Rathore argues, the decision-makers make their decisions without paying much attention to outside opinion. There is no civil society to speak of in Pakistan (and not much of it in India either, Indian pretension and boastful claims notwithstanding). The government is the be-all and the end-all, sufficient unto itself and in need of no advice.

During so-called democratic times, for instance, the governments in office have acted with utter disregard of opinion other than their own.

And even in that area, decisions have been seldom made collectively by the cabinet as in European parliamentary democracies. They have either been made by the chief executive on his own or in consultation with an inner group, often without cabinet or parliamentary responsibility.

In Benezir Bhutto’s time, it was her greedy and meddlesome husband, while in Nawaz Sharif’s, it was his unwise father who believed money, if cleverly spread around, could solve all problems and open all doors.

Had our decision-makers been more sensitive to opinions other than their own, the situation that we now face may not have arisen. What has happened in Afghanistan and, consequently, what is now unfolding in Kashmir are self-inflicted tragedies.

Those who had declared war on all civilised norms in the name of religion and those who bragged that they would die in defence of the faith, ran away like rabbits when the time came.

These self-proclaimed warriors were brave enough only to lash and execute women in public, or chop off the limbs of poor peasants. Caught up in their own delusions, they inflicted punishment, not on those they called the infidels, but on the Muslims of the world. For years, if not decades, the Islamic community will be made to pay for the diabolical criminality of a handful of perverted men.

The “I-told-you-so” syndrome, though much in vogue in Pakistan, is best avoided. However, for once, I may be permitted to reprint excerpts from a 1995 column when a group of foreign tourists was kidnapped in Indian-held Kashmir by Al-Faran, a group nobody had heard of before and nobody has heard of since. The decapitated body of one of the tourists was found some weeks later. The others were never found and there is no question they were also murdered. This is what I wrote:

“The recent kidnapping in the Valley of American, British and European tourists by a group acting in the name of Kashmiri Resistance is tragic but not surprising. Those who staged these disgraceful acts and those who caused them to be staged should know that what goodwill there might have existed in Western countries for the struggle of the Kashmiris for self-determination may have been seriously diminished.

“They should know that by kidnapping innocent people who did not wish them ill and who were, after all, guests in their land, have strengthened the Indian case on Kashmir beyond measure. Their reckless action is an announcement that those in whose hands may have fallen the leadership of the magnificent movement for democratic and human rights in Kashmir that began in December 1989 in Srinagar, have a different agenda than that of the Kashmiri masses. The Indian charge that there is terrorism at work can only gain greater validity through such acts.

“The message to both Western governments and the ordinary citizen is that in a remote part of the world, banditry and terrorism are being used for the acceptance of political and administrative demands. There will be no sympathy for such groups and there will be no support for such actions. No greater disservice can be done to the cause of Kashmir. Those who do these things fritter away the sacrifices of thousands of Kashmiri martyrs.

“Those who have committed such acts of terror and the forces and institutions which support these acts are no friends of the Kashmiri people or the Kashmir cause.

“Some of them are agents provocateurs and even criminals; or they are wedded to causes which are retrogressive and misguided. Their ideas are antediluvian and they follow dangerous and suicidal agendas.

“The great tragedy of the Kashmir movement insofar as its friends and supporters in Pakistan are concerned is that its control lies in the hands of those who lack both wisdom and knowledge. They are insensitive to the rhythms of Kashmiri life and the continuum of Kashmiri history.

The time has come to review the entire apparatus which is involved in the Kashmir effort in Pakistan and to take radical decisions on the basis of radical thinking. “A number of ministries and outfits of state are involved with Kashmir but what is missing is a mechanism through which their efforts could be interrelated and coalesced. For the most part, these establishments work at cross-purposes ...There is no standing consultative mechanism between the governments of Pakistan and Azad Kashmir ... Off and on, there are cosmetic ‘briefings’ and ‘consultations’ which might as well be discontinued.

“The Kashmiri groups that operate in North America and Europe, not without the substantial support of a certain branch of the government, are unashamedly right-wing and those who administer their work and their funds, in some case quite vast, are without exception card-carrying members of the Jamaat-i-Islami, whose agenda never has been the same as either that of Pakistan or of the Kashmiri masses. It is part of a larger network which is supported by certain countries that have little interest in Kashmir or even democracy which they consider sinful.

“Is it any wonder then that there are groups operating from London such as ‘Abu Jihad’ which in a recent circular demanded the establishment of the Khilafat to liberate India and Kashmir ... ‘Abu Jihad’ is of the view that the UNCIP resolutions as well as the Simla Agreement were ‘formulated by Western powers and ... client governments’.

“A UN-sponsored plebiscite is rejected because ‘the issue of Kashmir and India has already a decision from the Quran and th Sunnah as well as the method of its application and, therefore, no Muslim has the authority to decide otherwise’, As for a dialogue with India, ‘Abu Jihad’ argues that ‘any agreement with India over Kashmir will be a betrayal of the Muslim ummah and will have no validity in Islam.’ Further, ‘The UN and the Muslim leaders are imperialist tools used for the destruction of Muslims.’ ... It is obvious that only God can now protect the Kashmiri people from such liberators.”

That was written nearly seven years ago and, as was to be expected, it changed nothing.

Though it has come to us at enormous cost, for once there is today an opportunity for Pakistan and the legitimate Kashmiri leadership to put things back on the rails and restore to the struggle of the people of Kashmir the international support it has lost because of their delusional and suicidal “liberators”.

Gen. Pervez Musharraf has brought Pakistan back from the precipice for which it was headed and no true well-wisher of the people of Kashmir has a choice except the choice to support him, because this is the moment of truth for both Pakistan and Kashmir.

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Why some nations stagnate


By Ijaz Nabi

IN the 1990s we said goodbye to economic sovereignty. Exports stagnated at below $9 billion (or $66 per Pakistani compared to $1100 per Thai and $4000 per Malaysian) and foreign reserves remained precarious never reaching above $1.8 billion or a few weeks of imports. Investment and growth collapsed and we were continuously on IMF life support.

But our sense of political sovereignty soared. We created a dangerous vassal state next door, exploded the nuclear bomb, allowed militancy in Kashmir to get out of control, tolerated sectarianism and poured self-righteous vitriol on the West. Obscurantism occupied centre-stage and Pakistan’s image came to be associated with intolerance and bigotry.

How could we have not have understood that political sovereignty is a mirage in the absence of economic sovereignty? That political sovereignty based on religious bigotry shatters investor confidence and undermines economic sovereignty? How could we have got it so wrong?

We merrily bucked the trends. Globalization is a fast flowing river and national economies are ponds on its banks. Nations that adjust their political and economic frameworks to connect with the river are rejuvenated (witness China, India, most of East and Southeast Asia and the West). Others are cut off and they stagnate (e.g. Burma, non-oil producing Middle-East, Sudan and Somalia).

Our unfettered political sovereignty was pushing us into the ranks of the latter. We were losing friends, markets, investors -turning into a stagnant pond — just as the rest of the world was gearing up to the challenges of globalization by forging new alliances and creating new zones of economic cooperation.

The fact of the matter is that sovereign nations comprise sovereign citizens living in dignity that is grounded in economic well-being. Lately nation states have willingly trimmed national sovereignty by joining economic clubs (NAFTA, ASEAN, EEC and MERCOSUR are some examples) because this permits citizens’ standard of living to rise.

Rarely do nation states sacrifice living standards to pursue some elusive “national” sovereignty. When they do, they are called failed states.

There are lessons in all this: (i) political agendas not anchored in economic realities cannot be sustained and have to be reversed abruptly, (ii) such sharp reversals play havoc with investor confidence, render us unreliable partners and affect our credibility on many fronts, (iii) economic realities require us to be rooted in the global trends of international trade, investment and development which would, in turn, (iv) trim our political ambitions to achievable goals.

Happily, lessons are being learnt. The slogan “Pakistan comes first”, succinctly captures the essence of the four lessons and could not have been more timely. And it is not an empty slogan. Several significant pieces of the political and economic vision are in place and others are being given serious thought. Let us take stock.

First, the economic risk associated with investing in Pakistan has been reduced sharply. The principal success of the government’s macroeconomic stabilization programme is that imbalances are not being hidden away to return to haunt later.

Relative prices (exchange rate, interest rate, inflation, prices of utilities and agricultural commodities) are more or less at their true value. Government’s appetite for fiscal imprudence, insatiable in the past, is being checked. Corruption at the highest levels of the government is virtually non-existent (but sadly still rampant at lower levels). All this is testified in the accolades paid at the last Pakistan Development Forum in Islamabad by external observers (principally the IMF, ADB and the World Bank).

Multilateral praise, while important, was clearly not enough to spur investment, which has been stuck at around 16 per cent of the GDP, far below what we need (around 25 per cent) to achieve our historical GDP growth rate of 6-7 per cent per annum.

Private investors’ reluctance to invest despite the reduction in macroeconomics risk was rooted in the political risk associated with the three-pronged threat, viz.

Talibanization, the Kashmir Lashkars and sectarianism, a volatile brew that could explode unpredictably.

It didn’t help that the state zealously pursued white collar crime (tax evasion and loan default) while tolerating, some say encouraging, idiosyncratic exhortations on bank interest, malicious anti-Western (and therefore anti-market) rhetoric and disruption of law and order. The latter destroyed company balance sheets and retarded the ability to service loans and pay taxes, the very objectives of the NAB.

The inevitable explosions finally came on September 11 and then on December 13. Mercifully, self-preservation forced the state to shun lost causes and commit itself to stamping out militancy. As a result, the political risk associated with investing in Pakistan has started to fall. This is the second important development on the investment horizon and, combined with the decline in macroeconomic risk, augers well for the future.

Third, by aligning ourselves with the international coalition against terrorism we are restructuring a large proportion of our multilateral external debt. This has created space for public investment and other essential expenditures (education, primary health and law and order) that had been squeezed under the austerity programme. Judiciously carried out, such public programmes further strengthen the climate for private investment. And armed with modern education, Pakistani workers would participate in the fast expanding international labour market

But important challenges remain.

The private sector’s confidence, buffeted by the recent political storms, has to be nursed back to health. A clear signal has to be sent that the nation looks to commerce and trade and the shining captains of industry to deliver economic growth.

No Islamabad bureaucrat (national or the international variety) understands decision making under risk better than the private sector. The accountability process has to stop chasing phantoms of the past and has to become forward looking.

Islamabad has to be made more relevant to mainstream decision-making in the country. Public sector management has taken a nose-dive. Arguably, the state might have been less conservative had it retained its moorings in the educated, middle class ethos. Our political ambitions may well have been tailored to economic capabilities if decision makers were closer to commerce and industry rather than to the parade grounds of ‘Pindi.

But Islamabad is now a given. The solution is for the key economic ministries to spend a large chunk of their time in Lahore, Karachi and Faisalabad to remain focused on a private sector-led growth agenda. Peshawer and Quetta also have to feel belonged. Summoning entrepreneurs to Islamabad at the drop of the hat is demeaning and wasteful and sends the wrong signal about who is in charge.

Perhaps the most important challenge is to begin to capitalize on our geography. Now that we have decided to replace the export of militancy with trade in goods and services, we can be a vital link between the great emerging economies of India in the east (an economy of $447billion and 1 billion people) China in the north-east ($1trillion and 1.3 billion people), Central Asia and beyond to Russia in the north-west ($372billion and 226 million people) and Iran and Turkey in the west ($300billion and 127 million people) and much more if we include the Arab Middle-East.

This places us at the heart of one of the world’s largest and potentially most dynamic economic zones. With wisdom and will, and with investment and industrial technology, we can turn this into a huge advantage. Employment, incomes and human dignity would then soar and the average “Mohammed Rashid” would enjoy a sovereignty to write home about.

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