THE reactions to the federal budget are divided between those who support the government and hail the budget and those who oppose the government and disagree with some of its features.

One budget alone cannot bring about major changes in economic policy, or for that matter even three budgets together by a military government at odds with the people or the major political parties can’t do that.

Some of the critics of the budget are disappointed that after raising rather high hopes it offers far less than it promised in real terms. And it should have offered more to the masses and allocated much more to the Annual Development Programme and given greater direct relief to the middle income groups.

The finance minister on his part has struck a balance between what is possible and what is desirable and the result is that the people have got much less than what they had expected. Then, not many people take the budget seriously any more because, they argue, there is a mini-budget every month in the form of a rise in taxes or a further spread in sales tax or sharp increase in the rates of utilities like power, POL, gas and telephones, not to talk of the often unavailable water.

Those who argue that economic stagnation has not ended or industrial investment has not risen or employment has not improved substantially are on valid grounds. But most of them tend to ignore that there are strong reasons for lack of investment by foreigners or locals because of the conditions which have been prevailing in Pakistan since long.

The political uncertainty until the middle of 2003 is too obvious. It is not clear what kind of general elections the country will have and how free and fair they will be and how much will the military rulers respect the verdict of the electorate. It is not obvious to the investor what kind of constitution will the government eventually come to have after it is subjected to various amendments which may altogether change its character. The investors have been stressing the need for the rule of law and the need for the courts to deliver free and fair judgments quick and enforce them punctiliously.

The judicial drawbacks are regarded deterrents to large scale investment in Pakistan and foreign investors like those from the US have given open expression to that.

The investors are not sure what kind of economic policies will the new elected government have and how helpful they will be to them. President Musharraf may argue that the newly elected leaders cannot change his economic policies, nor alter his government’s commitment to the IMF and the World Bank. But the newly elected leaders with their fresh mandate from the people have an obligation to satisfy the basic needs of the people. Otherwise the people may openly agitate against them and eventually force them out of office.

The escalation of the tension between India and Pakistan and their forces facing each other along the borders is also a major deterrent to investment. And this is all the more so when both are nuclear powers and there is frequent talk of the use of nuclear weapons by the losers.

No less significant is the increasing terrorism in the country and its devastating manifestations. Some time ago, the country was shocked by the acts of terrorism in a church in Bahawalpur and later in the diplomatic enclave which killed two members of diplomatic families. On May 8, there was killing of twelve French engineers in a suicide bombing and, on June 14 an explosion took place in front of the US consulate in Karachi which led to the killing of twelve persons and injuries to forty-nine persons.

As a result, 13,500 foreigners have left the city since May 8 including those from the industrial areas. Surely, this is not the environment in which foreign investment will come in a large measure or stay happily here. Earlier it was said that foreign investment will follow domestic investment and so domestic investors should come forward to make the large investments. But it has been seen conclusively that in such an alarming environment even Pakistani investors will be very shy and even the banks would not want to make large investment capital available to them.

A few months ago when I spoke to a major Pakistani investor and urged him to make new investments, he said he wanted to do that and his sons were also urging him to do that. But he asked that what is the guarantee that if I make an investment today, I will not be a target of terror tomorrow. I would rather wait and see before going into new ventures. And he has been proved right by the manner Tariq Allahwalla, a quiet and reputedly upright industrialist, has been done to death by four dacoits who wanted to kidnap him. They also reportedly administered a fatal poison into his blood stream.

Businessmen tell me this is the second time in the city that a poisonous injection has been used against a rich victim. Clearly the state is helpless against such crimes. Modern science and technology seem to be more useful to big-time criminals than to their victims or the state.

Other crimes including kidnapping of rich men and business executives have been rampant in the country and the businessmen and multinational executives have to employ security guards at their homes, offices, and as they move around to ensure their safety. In addition, ten to twenty cars a day get snatched.

All this is too costly for doing business, which has also become unsafe. Many of the persons who buy their goods from various suppliers are not able to honour their contracts and pay their due amounts. All that upsets business and the CBR is too slow in refunding the taxes due of the exporters and it is generally too slow in paying refunds to the tax payers, while it fines heavily those who delay in making tax payments.

In addition, the international economic situation with its global recession is not favourable to most countries. Pakistan as an exporting country is among them. Nonetheless with its nine billion exports it has done pretty well this year.

In such an environment expecting large investment and solving the employment problem is very unrealistic. The political policies of the government and the law and order problem and the delays stand in the way of rapid economic improvement regardless of how good are its economic policies or fiscal concessions per se. The foreign as well as local investors consider all these factors before taking their decisions in respect of investment. More so when it comes to large scale fixed investment.

At the moment, any investment our rich men are making is on buying Canadian citizenship so that in case things become difficult for them here they and their families can shift to Canada and some of them are getting American citizenship as investors. It will be wrong on the part of the government not to take into account this reality and admit the drawbacks of a military political order that does not seem to be too anxious for the early return of real democracy.

Now the Indian finance minister Yashwant Sinha has admitted that the threat of war is having an adverse effect on investment in India and he is upset by the US, British, and France asking their citizens to leave India in the wake of border tensions.

ACCORDING to a secret US government report revealed last week by the ‘New York Times,’ the US invasion of Afghanistan not only ‘failed to diminish the threat to the United States,’ but actually complicated the US counter-terrorism campaign by dispersing its radical foes across the Muslim World.

The small, tightly-knit leadership of Osama bin Laden’s al Qaeda has been succeeded by a group of younger militants who have formed ad hoc alliances with other anti-US groups from Morocco to Indonesia. These groups now pose the most serious danger to the United States and will remain a potent threat for years to come.

This dismaying report confirms what this writer has been saying in his columns and on CNN since 9/11. A full-scale military invasion of Afghanistan would prove futile; the correct response was intelligence and police work, not brute force.

Al-Qaeda’s numbers were grossly exaggerated by the Bush administration and US media. Hard-core Qaeda members never numbered more than 200-300. Claims that there were 5,000-20,000 Qaeda fighters in Afghanistan were nonsense. These wild exaggeration came from lumping Taliban tribal warriors with some 5,000 Islamic resistance fighters from Kashmir, Uzbekistan, Tajikistan, the Philippines and Chinese-ruled Eastern Turkestan, none of whom were part of al Qaeda.

The reason 12,000 US-British-Canadian troops operating in Afghanistan can’t find al Qaeda — a campaign that has so far cost over $10 billion — is that there were few to begin with; by now, most have slipped away through Pakistan.

Instead, the US is getting mired in Afghan tribal politics by trying to maintain a regime in Kabul that will take orders from Washington.

Last week’s much ballyhooed grand tribal council, or Loya Jirga, that ‘elected’ Hamid Karzai as national leader was a wildly expensive charade conducted under the guns of US and British troops.

Karzai’s ‘election’ has cost Washington $5 billion in bribes and payoffs to Afghan warlords. As soon as US and British occupation troops decamp, Afghanistan will again dissolve into tribal chaos or fall under the control of Russia, which continues to arm and direct the Northern Alliance.

It’s also becoming painfully clear that Afghanistan was never the true epicentre of anti-US militancy, as Washington initially believed. The real hotbeds of Islamic resistance to the United States lay in Egypt, Arabia, North Africa, and Europe.

According to the leaked report in the ‘Times,’ a loose network of anti-American groups have surfaced in these regions, united mainly by their fury over events in Palestine, America’s impending invasion of Iraq, and opposition to America’s political and economic domination of the Muslim world.

Osama bin Laden, be he dead or alive, and his al Qaeda movement have become irrelevant. In truth, they were never much more than a symbol of hatred and defiance.

But their message, propagated by 9/11, has reverberated around the world. The torch of anti-Americanism is being taken up by the ‘jihadi’ movement - Muslim veterans of the war against the Soviets in Afghanistan during the 1980s - and by a younger generation of militants.

Sizable numbers of anti-American militants have been uncovered in Europe and arrested by local police and intelligence forces — the only major success, to date, of the ‘war on terrorism.’ But more hostile groups are springing up faster than they can be identified or neutralized.

Call this the privatization of warfare. Many young Muslims despair of their own feeble, corrupt, US-dominated regimes knowing they will never bring justice to the Palestinians, save Iraq from invasion by the US, or end what they view as oppressive American influence over their nations. They are taking matters into their own hands by waging a personalized war against the United States and Israel, two nations that have become one in the eyes of the Muslim world.

Forty years ago, the Islamic world regarded the United States as its best friend and saviour. Today, the two are on a collision course. There is growing fear across the Muslim world that the Bush administration is being driven by backers of Israel and fundamentalist Christians into a modern anti-Islamic crusade.

The leaked report in the ‘Times’ is likely to have originated from Colin Powell’s Department of State. Powell is widely respected abroad as the Administration’s most intelligent and ethical member, but he been almost totally sidelined because of his opposition to invading Iraq and waging a wider war against the Muslim world.

Foreign policy - particularly towards the Mideast and South/Central Asia - has been taken over by a hardline, ardently pro-Israel faction in the Pentagon and the office of Vice President Dick Cheney. Powell may soon resign in disgust.

President Bush’s National Security Advisor, Condoleeza Rice, should provide balance and nuance. But she has shown herself a rigid ideologue with poor judgment and very limited understanding of the outside world.

She is way over her head. Bush is not getting the sound advice he needs. As a result, he has been vacillating and contradicting himself for months.

Afghanistan, billed only last fall as a triumph for America and President Bush, is now looking less and less like a victory and more each day like the beginning of a long, bloody struggle that could and should have been avoided.—Copyright Eric S. Margolis, 2002

BLOOD stains on a road, skin stuck to a wall, a finger hanging from an electric wire is all that is left of some of the five women and six men who were killed in the bomb blast in front of the American Consulate in Karachi on June 14.

Forty others were injured, some of whom may remain deaf for life, others without sight and probably, all will have its horrible memory forever etched; having witnessed the wanton destruction of the human body, the burning skin, the agonizing noise and the searing pain.

Some of the dead will not be lowered into graves of comfort, since their bodies have been blown to smithereens. Their loved ones will not be able to focus their grief and be involved in the ritual of washing and burying their dead. A thundering emptiness reverberates in their hearts. These are the war dead, the martyrs, because we are told that we are part of the international ‘war against terrorism’ coalition, but we cast aside the war’s first victims.

Great nations remember their innocent dead. They lower their flags in respect and remembrance. Their writers make them into heroes. The state acknowledges them. The highest functionaries and politicians visit their homes. They congregate to pray for them. Their children and families are comforted.

The dead, the maimed and the injured were ordinary people. A teacher, constable, mother and wife. Theirs was not the supreme sacrifice to make, yet they did. Offering accolades to their memory is probably the very least that could have been done. However, it appears that ribbons, tamghas, sitaras, marlas and the choicest place of burial is the preserve of the khaki clad, even when blown up in a Hercules C140.

The lights that have taken to leading us held no funeral prayers (gaibana namaz-e-janaza) for their compatriots. No memorials were erected or planned to their memory. Couldn’t the horrible artillery piece on Sharea Faisal, or other such woeful iron scrap, have given way to a memorial to the victims of the ‘war against terrorism’? Couldn’t eleven trees, watered with our tears and shrouded in flowers, have been planted to mark the eleven fallen? — a nation coalesced by the strength found in our sorrow. Grief brings feuding households together but faced with a vacuous leadership it embitters, plants mistrust and makes us fearful of shadows.

Not content in ignoring our dead we have commenced a campaign to tarnish the victims’ memory and persecuting their loved ones. Our gallant law enforcement agencies have come forward not with words of comfort but to further torture the bereaved. It is reported that their families are being questioned and some have been arrested.

Discreet inquiries could have been made and, if necessity dictated otherwise, investigations conducted after offering due apologies. It appears that the dead matter less than preserving the wall of an almost empty consulate. The mothers, fathers, sisters, brothers, children and friends of the dead and the injured are denied the higher to grieve and salve their wounds in peace.

Without begrudging the sympathy to the widow of Daniel Pearl, is none available for our own citizens?

The president, having to juggle so many offices, was probably not available for taking the initiative to lead the nation when it was hurting. The other bits and pieces surrounding him have yet to demonstrate an original idea or emulate available good ones. No one in authority came forward to help alleviate the nation’s grief. The governor of Sindh and his perky associates remained busy selling the city by “regularizing illegal buildings”. Will they be responsible for the deaths that follow when the next bomb brings down a structurally weak illegal building, which was “regularized”?

The Nazims and Nazimas of the city, not having much left to sell, are bartering away all areas of public use and space. Mammoth billboards have been erected on public paths robbing what little has been left of the city’s dignity. But not a square foot is made available to symbolize the dead to remind us that they are the heroes of our age.

The pre-eminent position and the profound dignity accorded by the Creator to his creation (“Allah has made life sacred”, Al Quran 25:68) was destroyed. The Almighty informs us about the punishment that has been prepared for the perpetrators of the crime — “his recompense is Hell, to abide therein and the wrath and curse of Allah are upon him, and a dreadful chastisement is prepared for him” (4:93).

The pompously sounding Council of Islamic Ideology and the Ministry of Religious Affairs has once again failed to expound the Holy Message. They remain mute witnesses to innumerable perversions. To stand by the strong and persecute the weak is their forte, like endorsing the un-Islamic punishment of stoning for adultery by their silence.

Allah the Merciful states that to kill one innocent person is like killing all of humanity and to save a person is like saving all of humanity (Al Quran 5:32). The vein-like thread connecting all our lives has been shredded but no solace is offered. Not to be granted an opportunity to express remorse and gain strength from prayer desensitizes and brutalizes us. The occupants of Hell who visited this evil upon us probably gloat, not so much by the destruction of a bit of a wall, but by the defeat of the human spirit. We are being vanquished from within and without. The nation could have gained resolve and strength from this incident and startled the perpetrators with our unequivocal demonstration of unity, faith and disciple. Sadly, June 14 will be remembered as a mere stain on the road and a blot on our conscience.

TWO suicide bombings in Jerusalem within 36 hours kill twenty-six Israelis. Just as the bombers intended, US President George W. Bush postpones his long-awaited speech setting out a plan for an interim Palestinian state.

And Ghassan Khatib, minister of labour in Yasser Arafat’s ramshackle government, declares that the postponement of Mr. Bush’s speech will only “reward the Israeli government, which slips out of (its) peace commitments, and also rewards opponents of peace on the Palestinian side.”

Khatib’s remarks were the plain, even understated truth. What is depressing is how few people in the United States, in the rest of the West, or even in the Middle East understand the game that is really being played out in Israel and the occupied Palestinian territories. Israeli Prime Minister Ariel Sharon and the bombers of Hamas and Islamic Jihad, though they hate each other, share the same short-term goal of killing the ‘peace process’. Objectively speaking, they are allies.

Sharon works hard to obscure this fact from public view, for neither his American allies nor even most of his Israeli fellow-citizens share his lifelong goal of incorporating the West Bank into Israel. That goal is only possible if he can prevent the creation of a Palestinian state, but he cannot flatly oppose it without alienating the United States. His solution is to link a Palestinian state with ‘terrorism’ at every opportunity.

Last Thursday, for example, he told the World Zionist Conference in Jerusalem that “standing behind the terror attacks is the ‘Palestinian Terror Authority’ (i.e. Yasser Arafat’s Palestinian Authority) and a terror axis made up of Iran, Syria and bin Laden.” The point is to press the right buttons with Americans, so everybody on George W. Bush’s list of enemies must be implicated in the attacks on Israel as well.

Osama bin Laden and some elements in Iran would doubtless back Palestinian terrorist attacks on Israel if they had some way of doing so, but their help is not needed and there is scant evidence that they are actually involved. There is no reason to believe that Syria would even want to be implicated. But the most important question (which Sharon invariably slides past) is this: why would Yasser Arafat want these attacks to happen?

Arafat has devoted his whole life to the creation of a Palestinian state. President Bush, despite Sharon’s bitter objections, was at last about to announce American proposals for such a state. So Arafat ordered two massive suicide bomb attacks in order to force Bush to cancel the speech? Of course not. The people who ordered those attacks were Arafat’s enemies and Sharon’s objective allies: the ‘rejectionist’ extremists of Islamic Jihad and Hamas.

The Palestinian terrorists who dispatched the suicide bombers explicitly share Sharon’s short-term goal of thwarting any compromise peace that would close the conflict down without a decisive victory for either side. Their visions of that final victory are completely opposite, but their first and joint priority is to thwart the compromisers.

Meanwhile, Arafat is his own worst enemy: so arbitrary, vacillating and corrupt that he lacks the popular support among Palestinians to take a firm stand against all attacks on Israelis. In his response to last week’s events, he condemned the attacks by Islamic extremists that killed 26 Israelis and wounded over 100 in Israel proper — “Out of concern for our people, their land and their future, I declare my complete condemnation of these attacks that target Israeli civilians” — but notably failed to condemn the subsequent attack (by his own Fatah-affiliated al-Aqsa Martyrs’ Brigade) that killed six people in a Jewish settlement in the West Bank.—Copyright

THE Hidden Valley Energy Co. is being accused of shafting the people of California by rigging the prices of electricity that they sold to the state.

How could something like this happen?

This is the recorded telephone conversation between Rufus Starky and Lester Deferal.

Starky says, “It’s time we screwed California again.”

“Good idea,” says Deferal. “What should we call the scam?”

Starky says, “How about a funny name like ‘High Cholesterol?’ The idea is, we create blackouts throughout the state. They’ll pay anything to have their air-conditioning go on again.”

Deferal says, “Why don’t we ship the old gas out of California and then bring it back as new gas. That’s money in the bank.”

“Who’s going to know?”

Deferal answers, “The beauty of the energy business is that one can’t see electricity. It’s not like pork bellies or soybeans. They have to take our word for it that it’s in the pipeline. When they flip on a light switch, they expect their lights to go on.”

Starky says, “Will the White House object to screwing California?”

“Why should they? California voted overwhelmingly for Gore. But we can’t put the screws to Florida because Bush’s brother lives there.”

Starky says, “But there is no reason we can’t cause blackouts in all the Western states.”

“Right. If they want to turn on their ovens, they are going to have to put their money where their microwaves are.”

“We’ll take the money we make in California manipulating the prices and put it in the Cayman Islands. Then when they complain, we will tell them to sue us.”

“We have to work out the details with our accountants and lawyers because we don’t want anyone to ask why their swimming pool bills went through the roof.”

“As the middlemen, we can cause congestion in the grid and then we will get paid millions for alleviating the congestion.”

“There are so many ways to shaft Californians. High Cholesterol could be our most successful scheme yet.” “What are you going to do with your bonus?”

“I’m going to buy a winery in Napa Valley and call my wine Chateau Blackout.”

“I’m thinking of getting a divorce and marrying a movie actress.”

—Dawn/Tribune Media Services

THE EU foreign minister’s decision to initiate dialogue with Iran both on economic and political issues next month reflects a basic policy difference between the European Union and the US. President Bush has included Iran among the countries that comprise the “axis of evil” in the context of the war against terrorism.

Until Iran’s Islamic revolution in 1979, the country was closely allied with the US, and its ruler, Mohammad Raza Pehlavi, relished the role of being Washington’s surrogate in the region. Since he owed his throne to US support against the nationalist prime minister, Mohammad Mossadegh, who had deposed him in 1953, but was restored to power through US intervention, he aligned himself completely with the West. He joined the US-sponsored Baghdad Pact in 1955, decisively joining the western bloc in the cold war. This had the effect of precipitating a hostile relationship with the Soviet Union with which Iran shared a long border in the north.

The Shah’s regime alienated the great mass of the people with its corrupt ways and was overthrown by the Islamic revolution led by Imam Khomeini in 1979. Opposition to the US, which was designated as the “big Satan” by the clergy-led regime, resulted in a prolonged siege of the US embassy in 1979-80, which has led to a continuing estrangement between the US and post-revolutionary Iran.

The memory of this “national insult” and the support the Iranian regime extends to the Palestinians against Israel are the two factors that keep the US establishment entrenched in an attitude of hostility towards the Islamic republic. Large amounts of Iranian assets remain frozen in US banks and successive US administrations have treated Iran as a terrorist state, which is subjected to a whole range of sanctions.

The nature of the regime in Tehran has undergone significant changes over the past twenty-three years. The first phase, dominated by Imam Khomeini, witnessed a concerted effort to destabilize “monarchist” regimes in the region, which responded by encouraging Iraq to attack Iran in 1980. The eight-year long war during which the West generally supported Iraq was marked by high casualties and enormous destruction of economic assets in the two Muslim states.

Though the war had been launched with the expectation that the divisions and internal contradictions within Iran would result in the overthrow of the cleric-dominated regime, it had the opposite effect and served only to unify the Iranian people in the face of what they perceived as foreign aggression. A cease-fire in 1988 was followed by the virtual abandonment of the policy of confrontation, as President Rafsanjani’s Second Republic saw the need to concentrate on reconstruction after the havoc of the eight-year conflict.

According to reputable US scholars, Iran’s foreign policy, even during the first decade, was consistent with its historical traditions and geopolitical imperatives. The traditional preoccupation of Iran’s diplomacy was, firstly, the preservation of territorial integrity and independence of the country, and, secondly to counter the competing interests of major powers. These were Britain and Russia during the 19th century and the two superpowers during the cold war.

Since the Shah’s removal, the Islamic republic of Iran has moved towards a more independent stance. After the cease-fire with Iraq, Iran has stepped up its activity in the multilateral field, notably in the UN and the OIC and has played an active role in reviving the Economic Cooperation Organization (ECO) whose headquarters are located in Tehran. The shift to this policy of engagement came at an opportune time, since the Iraqi aggression against Kuwait in 1990 made the regional and western countries conscious of the role Iran could play in stabilizing the region.

Given Iran’s strategic location, it is destined to be a major player in regional politics bearing on the oil-rich Persian Gulf, Afghanistan, South and Central Asia. As the US has remained virtually frozen in an attitude of hostility, Iranian diplomacy has concentrated on countervailing relationships with a large number of states, ranging from Russia and Japan to the European Union, apart from its neighbours in the region.

As a counterpoise to US attempts to isolate it, Iran has developed close relations with the two great powers in its vicinity: Russia and China. Given the fact that initially, Russia (then the Soviet Union) was also identified as “little Satan” at the time of the revolution in 1979, the normalization of relations with Moscow over the past two decades has been a major exercise in pragmatism. Russia has also found it expedient to develop close economic ties and to agree to sell not only military hardware but also nuclear reactors, despite strong US objections.

Iran has a coast not only on the Persian Gulf but also on the Caspian Sea, the other four of whose littoral states are republics of the former Soviet Union: Russia, Kazakhstan, Turkmenistan and Azerbaijan. This position vis-a-vis the two main regions of the world’s energy reserves, the Persian Gulf and the Caspian Basin, confers special importance on Iran, itself a major producer and exporter of oil. Though the US has sought to bypass Iran in its pipeline diplomacy by giving a high priority to the one across Georgia and Turkey, the long-term relevance of Iran to all matters pertaining to access to energy simply cannot be ignored. This remains a basic strategic asset for Iran.

The European Union has found it advisable to improve its relations with Iran, especially after 1997, when the reformist government of President Khatami assumed office. As a European diplomat stated then, “Despite US concerns, its geography and economic position make Iran a factor you cannot ignore”.

The EU’s independent stance towards Iran has been in evidence to an increasing degree. Preliminary moves towards a trade and cooperation agreement were initiated in February 2001. In fact, a comprehensive dialogue began in 1998 at deputy ministers’ level. The EU also decided to explore possibilities for cooperation with Iran in areas of energy, trade and investment, refugee and drug control. An EU-Iran working group on trade and investment met for the first time in Tehran in November 2000.

Since the assurances received by EU foreign ministers following the September 11 events, the way was clear to open full-fledged trade talks in the first half of this year. It may be mentioned that President Khatami toured major EU countries during 1997 to 1999. His re-election last year strengthened the desire of the European powers to engage more closely with Iran, despite the policy of “dual containment” followed by President Bush towards Iraq and Iran.

The foreign minister of Spain, which holds the rotating presidency of EU for the first half of this year, stated in February last, “While having profound respect for the opinion of the US, our principal ally in every respect we in the European Union think that it is very important to support the process of reform in Iran”.

Iran has achieved considerable success in developing close relations with other players in the region, including Saudi Arabia, India and China. Together with Pakistan, it has a significant role to play in the opening up of Central Asia, which is land-locked. It is also well placed to contribute significantly to the reconstruction of Afghanistan. Its relations with South Asia are also such that it can help promote better relations between Pakistan and India, a role its government has offered to play. There is already an agreement with Pakistan for the construction of an oil pipeline that is meant to be extended to India.

The main threat to Iran’s security lies in the adversarial rhetoric from Washington, which has the military power and the reach to intervene — a prospect that could become more serious if the US were to move against Iraq. The latest doctrine propounded by President Bush about America’s right to launch pre-emptive strikes against “rogue states” believed to be developing weapons of mass destruction, raises the spectre of attacks at the behest of powers that would like to force a regime change. There is already a debate in progress among many schools of thought on the way US relations with Iran would evolve.

Writing recently in The New York Times noted columnist Thomas L. Friedman reported from Tehran that the prevailing sentiment there was in favour of re-establishing diplomatic relations with the US. There is a general belief that ties with the US hold the key to modernization, and neither isolation nor confrontation would serve any useful purpose.

Mr. Friedman also took note of the school of thought in Washington that advocates engagement, and sees little positive gain from maintaining embargoes or going for a regime change. He reports that candlelight vigils were held on September 11 in Tehran to express sympathy with the Americans who were victims of the terrorist outrage. Currently, hard-liners in both countries are blocking a return to normality, but Mr. Friedman is convinced that a positive step by the US would lead to a speedy elimination of all the irritants.

Iran is an important neighbour of Pakistan, and is larger in population than the Arab countries around it put together. Factors of geography and history, as well as economic realities leave no doubt that what happens in Iran and what happens to Iran will have major implications for the whole region. There are indications that even Ayatollah Ali Khamenei, Iran’s spiritual leader, who is supposed to be a hard-liner, is ready for normal relations with the US.