THE Sindh government has made a law which, in effect, institutionalizes corruption. This ignominy is achieved through the promulgation of the Sindh Regulation and Control (Use of Plots and Construction of Buildings) Ordinance, 2002. The measure keeps alive the Jam Sadiq tradition.

Standing at the footsteps of the Quaid’s Mazar, Zulfikar Ali Bhutto, who knew his minister well, queried: “I hope that you have not allotted this land to some builder”. In whichever abode Jam’s soul resides, he must surely be smiling to see those professedly striving against corruption corrupting the society like never before.

The new dispensation concretizes illegalities and raises a multi-storied edifice of corruption. If a building juts onto a road, sits astride a pavement, leans onto the neighbour’s compound, is structurally weak, has narrow corridors making flight from fire, earthquake or other calamity impossible, what to speak of being a monstrosity of a structure offending every aesthetic rule and built in contravention of every public safety regulation it can be “regularized”. And every such perversion can be gratified “on payment of the fees as may be prescribed”.

What pleases our illustrious governor displeases every law-abiding citizen. Sindh has a long tradition of loot and plunder, however, the dacoits who earlier infested forests have now taken up residence in the heart of the metropolis. Today it is not the hapless traveller who provides the pickings, our present day robber barons feed on the citizenry from a place which ought to jealously guard the city’s virtue, the Civic Centre.

The Karachi Development Authority (KDA) leviathan and its serpentine cousin, the Karachi Building Control Authority (KBCA), have been given the legal mandate to coil around, crush and devour all that is good in the city. Every year the citizens of Karachi pay 1,234 million rupees to KDA and KBCA. KBCA, whose sole task is to ensure that buildings are constructed in accordance with rules and regulations, depletes the city’s resources by over 250 million rupees a year. The perennial drain by these organizations on the city’s resources has rendered the city financially bankrupt.

The promulgation of this Ordinance confirms that KBCA utterly failed to fulfil its statutory charter. The blazing guns of accountability are nothing but a child’s poppycock when tuned onto the obdurate KDA and KBCA. The brigadiers who now sit astride have not subdued these beasts. The ropes in their hands are the wrong ends of the yolk and the beasts move to further gorge the city.

One had hoped that with the removal of all political pressures from KDA and KBCA, a reason cited for their incompetence and corruption, strict accountability of those who failed to perform their duty would follow. What we see instead is failure being rewarded. The regularizing fee will be recovered by KBCA to feed itself. A perverse precedent has been established. If you fail to do your job you are not penalized but are rewarded and the public pays for it - “Havoc and spoil and ruin are my gain” (Paradise Lost by Milton).

There are 913 employees of KBCA. The Department of Buildings of the New York City, which performs functions similar to KBCA, has a workforce of about 400. The 14.7 million population of New York exceeds Karachi’s by well over 3 million. But then there is no accountability bureau in New York. Nor is there any city institution under the strict discipline of the army. And the pleasure of the governor of the state of New York does not result in the promulgation of a ‘law’.

On its part the government of Sindh holds the courts in contempt and abhors the laws of the province. This is best demonstrated in the words of the new Ordinance, Section 5 of which states, that: “Notwithstanding anything contained in any law for the time being in force or judgment, order or decree of any court, any building constructed ... in violation of the provisions of the [Sindh Building Control] Ordinance or regulations made thereunder, may be regularized by the authority appointed under the Ordinance on the conditions and on payment of the fees as may be prescribed”.

In other words what a court of law, including the High Court and the Supreme Court, has decided is not worth the paper it is written on, provided one has the money to pay off KBCA. If a political government had made such a law it would have been dismissed and the Assembly dissolved, and rightly so. But this is a government, which loudly proclaims its commitment to institution building, rooting out corruption and upholding the rule of law! Interestingly enough the Regional Accountability Bureau has filed a number of references against members of the previous governments who had illegally regularized buildings, some of which have also resulted in convictions by the Accountability Courts.

There are so many things wrong but the only thing apparently engaging the attention of the government of Sindh is to reward bribery and corruption - “To vice industrious but to nobler deeds timorous and slothful”.

The dubious pleasure of the governor regulates our lives. A travesty has been trussed-up as a ‘law’ under his signature. The cumulative wisdom with which the people of Sindh have governed their lives has been dispatched to the rubbish bin. The KBCA, an opprobrious den of shame, flaunts and struts before the highest courts of the land, which till yesterday had held, that: “It is the bounden duty of the KBCA, if it is at all to implement its mandate, to ensure that no unauthorized construction, without a duly approved plan, comes up within the area of its jurisdiction. ... In short, the KBCA has to implement the law, which has created it. Nothing short of that would justify its existence” (Afzal Khan versus KDA, PLD 1998 Karachi 283).

There are hundreds of judgments given by the High Court and the Supreme Court which the government of Sindh now states are not binding on the corrupt. When governments failed to check the construction of illegal buildings the people sought legal redress. The superior Courts of Pakistan came to the rescue of the citizens and directed KBCA to implement the building laws. KBCA “cannot regularise a breach of the regulations” (Abdul Razzak versus KBCA, PLD 1994 Supreme Court 512).

“The regulations should be applied for the benefit of the public and not for favouring an individual” and “a public functionary which is entrusted with the work to achieve the objective of maximum comfort for the residents of the city cannot act in a manner, which may defeat this objective” (Ardeshir Cowasjee versus KBCA, PLJ 1999 Supreme Court 2331). “The entire population cannot be allowed to be put in danger for the benefit of a few builders” (Begum Saida Qazi Isa versus Quetta Municipal Corporation, PLD 1997 Quetta 1). “The paramount consideration should be public interest and public good” (KBCA versus Hashwani Sales & Services Limited, PLD 1993 Supreme Court 210).

But the government of Sindh is not accountable to anyone, and its actions confirm that it considers itself above the law. It has declared a war on the citizens and the courts. It favours illegal buildings and hopes to earn nickels from those who have looted the city’s silver to pay for the salaries of the 913 employees of KBCA. It copies the words found over the gates of Hell and inscribes them on the portals of our city:

Through me the way into the doleful city/Through me the way into eternal grief/Through me a people forsaken — Dante’s Inferno

GENERAL Pervez Musharraf has set himself up for election as president through the forthcoming referendum. He frequently mentions the success of his economic policies as one important reason for him to remain at the helm.

Needless to say the health of the economy influences the decisions of the electorate anywhere in the world. It is thus important to assess the fruits that the general’s reforms have yielded in the first thirty months of his administration.

If the assessment shows that the reforms have moved in the right direction, then the general’s claim for a positive vote in the referendum will have economic validity. The benchmark for assessment will be whether an improvement or otherwise in an economic indicator is due to the policy framework adopted by the military regime or is it due to one-off, unforeseen external developments.

General Musharraf and his economic mandarins generally highlight what can be termed as intermediate indicators as signs of economic progress. These indicators influence the health of the macro-economy and impact on people’s lives and livelihoods only indirectly and in the medium to long run. The military regime has been able to reduce the fiscal deficit to 5.6% of the GDP compared to the average of 6.1% in the 1990s. As much as 41% of this reduction in the deficit was achieved through slashing public investment.

The increase in foreign exchange reserves and reduction in debt servicing liabilities are the most frequently flagged economic indicators in the referendum campaign. It is pertinent to note that since July 2000, the State Bank has included foreign exchange holdings with commercial banks as part of official reserves. A visit to the State Bank website shows that the surge in reserves from the usual US $ 1-1.5 billion mark to $ 3-3.5 billion happened as a result of this change in methodology.

The increase in reserves to the present level of $ 5 billion plus has happened after September 11. Three factors have been instrumental in this. First, remittances into Pakistan increased substantially because those who kept money abroad were fearful of their accounts being frozen in the wake of the American anti-terrorist campaign. The second element was one-off budgetary grant inflows from the US, Japan and the EU.

Thirdly, due to debt restructuring agreed in December 2001, the outflows on account of debt servicing have reduced perhaps to the order of $ 1 billion for the current fiscal year. It is apparent that the reserves were not ‘earned’ as such and thus had little to do with the policy posture of the government. Rather it was the midnight phone call from President Bush to the general after the September 11 attacks in the US which has resulted in this manna from heaven.

Another set of economic indicators demonstrate a more or less direct impact on people’s lives. Growth in GDP is one such benchmark indicator. Growth in the economy impacts the lives of people primarily through the quantity and quality of employment generated, which in turn has an impact on the level of poverty. The link between growth, unemployment and poverty is particularly strong in developing countries where state-induced redistributive transfers are weak.

For the first two years of this regime, growth in the GDP has averaged 3.2%. Projections for the current year is in the same ball park, i.e. 3.5%. In contrast, the GDP growth averaged 4.9% in the 1988-99 period when elected governments ruled the roost. It is important to note that the elected governments also presided over a general deceleration in the economy’s growth compared to the trend of the previous three decades. What is striking is that the growth during the incumbency of the present regime has in fact been even worse.

According to the Labour Force Survey, the rate of unemployment in 1998 was 6.1% and increased to 7.8% in 2000. In the tenure of this regime more than 800,000 individuals have been added to the army of the unemployed in Pakistan. Even if the efficacy of employment generation initiatives of the regime are accepted at face value, it is evident that they are no substitute for generating high level of GDP growth for employment creation.

In the first two years of this regime, the proportion of the poor has increased to 40.1% of the population. By June 2001, therefore, 56.3 million Pakistanis were eking out a living below the poverty line. It is also critical to note that since the military government took over, roughly 15.4 million more individuals have been pushed below the poverty line. It is all very well for the general’s heart to bleed for the poor, but the fact of the matter is that rather than alleviating poverty his regime has presided over further poverty creation in Pakistan.

It has been argued elsewhere that deterioration in those economic indicators that affect the lives of the poor more directly are the result of the single-minded pursuit of the government’s economic managers to achieve stabilization targets ala the IMF at the cost of growth and poverty alleviation. The gap between rhetoric and reality, it appears, is wide.

The deceleration in GDP growth that this government has presided over is predicated upon historically low levels of investment in Pakistan. Again according to official statistics the investment-GDP ratio in the year 2000-01 was 13.3%. This was the lowest level of investment in the economy since 1966. Although there has been a severe slowdown in investment since the nuclear tests in 1998, the situation has in fact further worsened during the tenure of this government. One important reason for this investment drought is that the government itself is unwilling to invest in the economy. There is now enough literature on Pakistan which demonstrates that public investment is critical in crowding in private investment. As mentioned above, public investment has borne the brunt of budget deficit reduction in Pakistan.

In the first two years of the military regime the public investment to GDP ratio averaged 5.9% whereas the average for the 1988-99 period was 8.8%. Although we see a perceptible decline in public investment since the mid 1990s, the low priority given to public investment by the military government is exemplified by the fact that in the first two completed years of this regime the shortfalls between budgeted and actual allocation for investment was 17.8% and 20.5% respectively.

Deceleration in private sector investment has likewise been at a historic low. The military government has not been able to turn around the lack of confidence amongst private investors precipitated by the nuclear tests. In the year 2000-01 the private investment-GDP ratio was at its lowest since 1975.

According to the quarterly report of the State Bank in the first six months of the present fiscal year, private sector credit off-take — an important indicator of investor sentiment — has been almost half of that in the previous year. The fact that in the previous 30 months there have been 22 de-listings from the Karachi Stock exchange compared to only six new listings further illustrate the depth of the investment drought in the country.

The low level of public investment, high real interest rates and a precarious law and order situation in the country are some of the major reasons for the investment drought. All these factors are reflective of policy and administrative governance failures of the regime. General Musharraf claims that through the referendum political uncertainty will be removed and the fence sitting investors will jump into the fray. This is one way of reading investor perceptions and the future political landscape. Another is that the referendum will further destabilize the political environment.

One indicator that has shown improvement is inflation. In the first 30 months of this government inflation has averaged less than 5% per annum. After a high dose of inflation in the mid-1990s, inflation has been low in Pakistan since 1997. Has the policy framework contributed in keeping prices in check? First, there is consensus among economists that the present low levels of overall inflation in the economy is due to recessionary conditions. The level of demand in the economy is so low that the prices of goods and services are not being bid up. Second, God has favoured the military government as since it has come into power there have been bumper wheat crops, which in turn has helped keep food prices low.

However, once the consumer price index is disaggregated, one observes that administered prices have increased at a much higher rate. Gas prices have increased at 24% per annum and the price of high speed diesel has increased at 25% per annum during the tenure of this government. It may be stated that the latter price increase was due to a surge in international oil prices. That may have been so, but for the time that oil prices were falling internationally, the price of petroleum products in Pakistan was being increased to extract a larger surcharge by the government.

This assessment of Pakistan’s economy — based for the most part on official data — shows that economic indicators pertaining to the lives and livelihoods of the Pakistanis have performed dismally in the last few years. In fact, some of them are even worse than those in the ‘lost decade’ of the 1990s. More importantly this deterioration in the economy apart from the drought — is in large part due to the policy framework adopted by the government.

Conversely, improvements in intermediate economic indicators — responsible for restoring the credibility of the government amongst donor agencies — are for the most part due to Pakistan’s role in the anti-terror war waged by the Americans. On economic grounds, therefore, the average Pakistani has little reason to vote affirmatively in the referendum.