LAST Sunday’s parliamentary election result has radicalized Turkey’s political landscape. The Justice and Development Party, an untested party with Islamic roots, has won a landslide victory. The Turks have made their fateful choice. Will the generals now honour the people’s verdict and allow the victorious party and its leader to form the next government? This is the key question.

The armed forces have always occupied a privileged place on Turkey’s political landscape under the republic no less than in Ottoman times. Ataturk would not have been able to drive out the foreign forces that occupied his country in the wake of World War I or to found the republic on the ashes of the empire without the army’s active assistance.

Since 1960, Turkey has experienced a number of putsches and four successful coups d’etat.

The latest, in February 1997, has come to be known in Turkey as the “virtual” or “post-modern coup”, because the troops never actually left their barracks: a thinly veiled ultimatum from the army high command sufficed to bring down the coalition government headed by the Islamist, Necmettin Erbakan. Every now and then, the “Pashas” enter the political scene and disrupt the political process by waving the banner of “Kemalism”.

It has two major elements: the indivisibility of the nation and its territory and secularism of the republic. It is significant that the generals who have championed the Kemalist doctrine have never hesitated to go against its very essence whenever Ataturk’s policies got in the way or were found anachronistic.

Ataturk laid down the strict principle that under no circumstances should Turkey involve itself in the internal affairs of foreign countries.

However, his successors in the military have defended Turkish-speaking minorities in other countries — Greece, Cyprus, Bulgaria and Nagorno-Karabagh. Perhaps, the most poignant irony of Kemalism today is the fact that the “Father of the Turks” opposed any intervention by the armed forces in the affairs of the state — a principle that his admirers have consistently violated for the last forty years or so.

Turkey today stands at a crossroads. It must carry out far-reaching economic and political reforms and comply with the so-called Copenhagen criteria if it is to join the European Union.

These measures represent more than simple reforms: they mean the virtual dismantling of Turkey’s entire state system. This system, which places the armed forces at the very heart of political life, is deeply rooted in a centuries-old culture and in practices that have been ingrained for decades. Whether Turkey will change them — and whether army will let it — remains uncertain.

Even an EU membership, the ultimate incentive, may not be enough to convince the Turkish military to relinquish its hold on the jugular of the Turkish state.

The EU is trying to persuade Turkey to revamp its constitution that institutionalizes the army’s dominant power and blocks any move towards democratization.

One of the EU’s main targets has been Article 118, which establishes the National Security Council, a kind of shadow government through which the generals can impose their will on parliament and the government.

The NSC is made up of six high-ranking military officers and civilians. Once a month, decked out in full uniform, the Chief of Staff and the heads of the army, navy, air force, and of the police, along with a sixth general acting as the Council’s general secretary, meet Turkey’s president, prime minister, and the ministers of defence, foreign affairs, and the interior.

The Council is empowered to examine all affairs of the state, whether relating to domestic or foreign policy. Its deliberations are never made public, and even when decisions are announced, they are presented as “recommendations” to the government. Civilians can ignore these “recommendations” at their peril. Although the NSC acquiesced when its order to purge suspect civil servants was vetoed by President Necdet Sezer, once the country’s highest ranking judge and a known liberal, and sent to parliament for approval, it was far less indulgent in the case of Prime Minister Erbakan.

When Erbakan had the temerity to send the NSC’s 20 “recommendations” aimed at “eradication of Islamist reaction” to parliament in February 1997, the military had him ousted. Erbakan signed his death warrant by pretending not to understand that the “recommendations” constituted an ultimatum. Reminding the Turks that the NSC’s decisions are taken not by a majority vote but by consensus, the chief of staff of the Turkish army declared that the Council could include “even 100 civilians, if that is what they want”, implying thereby that numbers did not count.

The armed forces enjoy autonomy in the judicial domain as well, having their own laws, courts, and judges to deal with matters concerning military personnel, including cases where civilians are involved.

Any public criticism of the military found to be “insulting” can result in prison sentences of up to six years. Crimes of opinion are tried in state security courts, until recently presided over by high-ranking officers.

The EU has demanded the abolition of these special courts on the ground that they are incompatible with a democratic system. Equally unacceptable to the EU is Article 312 of the Penal Court which penalizes views judged contrary to ethnic and religious harmony.

This was the Article used in 1998 to strip the 75-year old Erbakan of his civic rights for five years. The same Article was invoked again to sentence him to one year in prison for a campaign speech he gave in 1995, a year before he was appointed prime minister.

The Justice and Development party has won a landslide victory despite the banning of its leader from politics for propagating Islamic views. Will Recep Tayyip Erdogan — the popular 50-year old leader of Justice and Development party, who once openly campaigned on an Islamist agenda but now says he has changed his politics — be allowed to form the government? Erdogan was ruled ineligible because of his 1998 conviction for “inciting religious hatred”, something he allegedly did by publicly reciting a 90-year old poem calling minarets “our bayonets”, the domes of mosques our “helmets”, and the Muslim faithful as our “soldiers”.

The military, in the name of protecting the secular Turkish state, forced Erdogan out of the office of mayor of Istanbul, just as it had previously forced the resignation in 1997 of Turkey’s first prime minister from an avowedly Muslim party.

A great admirer of the Turkish system, President Musharraf too has introduced a military-led National Security Council on the Turkish model and kept his two leading civilian opponents out of the October 10 parliamentary elections. The same logic guides Washington’s announced policy on Palestinian reforms: democratic elections must be held, but Yasser Arafat has to be kept out. The results in both cases have been dismal. President Musharraf succeeded only in shifting votes from secular to Islamic candidates while the Palestinian elections are on hold because of Arafat’s enduring popularity.

What does Turkey look like today? In a remarkably forthcoming book, Umit Cizre, a professor at Bilkent University in Ankara, laments that: “civil society has increasing latitude but no real strength; parliament contains opposition forces but has no real teeth; the judiciary operates with some independence at times but is by and large controlled politically”. Are Turkey and Pakistan following same path? Similarities abound.

Today Turkey stands facing two very different paths forward. Two very different visions of the country now confront each other in a contest whose outcome is difficult to predict. At one end stands what are called the “Kemalist Republicans”, those who see the military as the infallible interpreter of Ataturk’s legacy and sole guardian of the nation and the state. At the other end stand what are called the “Kemalist Democrats”. They are proud of the revolution carried out by the founder of the republic eight decades ago, but, at the same time, they believe that Turkey must adapt to western democratic norms. This group includes intellectuals, businessmen, Islamists and Kurds, who maintain that Turkey needs democratization, globalization, non-interference by the armed forces in the affairs of the state, independent judiciary, etc. The key question is: will the Turkish military relinquish its hold on the Turkish state? Will it accept the election result even though the ‘wrong’ candidate has won?

The American diplomat, Richard Holbrooke, pondered a problem on the eve of the September 1996 elections in Bosnia, which were meant to restore civic life to that ravaged country. “Suppose the election was free and fair”, he said, “those elected are racists, fascists, separatists. That is the dilemma”.

Indeed it is, not just in Bosnia or Algeria or modern Turkey or Pakistan but in the entire Islamic world. Islam with its own code of egalitarianism and morality, and its concept of political, economic and social justice is emerging as a challenge to pro-western military dictatorships and corrupt monarchs in the Muslim world.

Why is political Islam now so resurgent in many Muslim countries? The answer lies in part in the failure of the existing political systems to address the basic economic and social problems — poverty, inequality, rampart corruption, injustice. It is this failure that has made Islam the only available choice for billions of Muslims in the Islamic world.

By seeking to separate Islam from politics, the Turkish generals ignore the reality that the two are intricately intertwined. Today no other ideology has any comparable sway in the Islamic world. The election result in Turkey reflects the disenchantment sweeping the Islamic world after decades of corrupt rule. In Pakistan, the resounding victory of the religious right in the two sensitive provinces of the Frontier and Balochistan is the clearest demonstration to date of the growing backlash against American bombing of Afghanistan.

Nationalist parties in the Islamic world are weak and thoroughly discredited. The left is in disarray. Liberal democrats cannot even muster enough supporters to stage a demonstration in any Muslim capital. Like it or not, therefore, various forms of Islamism will be the dominant intellectual current in the Islamic world for a long time to come — and the process is still in its infancy. Islam, not the scholastic, institutionalized, fossilized Islam co-opted by authoritarian rulers, but the true, dynamic, pristine, revolutionary Islam of its early years, is perceived by the elite as the greatest threat to established order in the Islamic world.

NOW that the withdrawal of Pakistani and Indian troops from the border has begun, it is time one tried to draw a balance sheet of what the two sides have gained or lost since it all began in December last and the two South Asian nuclear powers came close to a devastating conflict earlier this summer.

The eyeball-to-eyeball confrontation involving nearly a million men lasted ten months, cost billions of rupees to the two sides, and included some harrowing moments — like Indian prime minister Vajpayee calling upon his troops to get ready for “a decisive fight” and threats from both sides to use “all weapons” in their arsenals — both later backtracking. Who won in the end? The obvious answer is: neither.

To ask Pakistan what it has gained is a little unfair, for Islamabad did not initiate the ten-month long military stand-off. It was New Delhi that started it, and it was in the fitness of things that it was India that should have been the first to start pulling back.

For the hawks in India, it turned out to be a frightfully expensive exercise in futility, there was no “decisive fight,” the “cross-border terrorism” did not stop — or so it would seem seeing India still mouthing the refrain of incursions across the Line of Control, and Pakistan was not “taught a lesson” as BJP hawks and some sections of the Indian media were asking for. Pakistan was not even bruised, nor its honour sullied.

However, there were some grim moments, like when the Kitty Hawk, the US carrier in the Arabian Sea, moved away from its position to give leeway to the advancing Indian navy, or when the US appeared coldly indifferent to the possibility of a war in the subcontinent. The only concern it expressed was self-centred — that an Indian attack would interfere with America’s anti-Al Qaeda and anti-Taliban operations along Pakistan’s western border. Nothing else mattered.

From Pakistan’s point of view there was one painful fact — America chose to sit on the fence at a time when US forces were making use of Pakistani air space and bases. In fact, to neutral observers it often appeared strange that the US should have chosen not to do or say anything that would suggest that it was closer to Pakistan than it was to India or that Washington was moving towards a deeper military relationship with Islamabad.

Invariably, Washington appealed to both sides to exercise restraint and never once did it mention the fact that it was New Delhi, not Islamabad, which had begun the massing of troops. Consequently, every call from President George Bush or Secretary of State Colin Powell to India to show restraint was coupled with a mild rebuke for Pakistan “to do more” to rein in Islamic militants.

More significantly, Washington made it abundantly clear that Pakistan was not its sole ally in South Asia, and at least in one of his press conferences Bush referred to India as an ally and to Pakistan as a friend. Similarly, there were joint military exercises with both Pakistan and India, and the decision to sell arms covered both.

Yet beneath the veneer of diplomatic sophistry one could discern a perceptible difference between stance and policy: America perhaps had to appear neutral to avoid adding to India’s discomfiture, for Washington had more serious business on hand with Pakistan than it could possibly have with New Delhi in the context of the military operations in Afghanistan.

Pakistan had what India did not have — a common and porous border with Afghanistan. More important, Pakistan was providing bases, joint patrolling and close operational support. Above all, it was giving valuable intelligence and logistic support which was critically important to the anti-terror operation in Afghanistan. No wonder, it often appeared, the US felt vexed that India should have chosen to put military pressure on Pakistan at a time when Islamabad had its hands full along its western border on what basically was an American errand.

Colin Powell’s last visit to South Asia in July proved upsetting for India when the US Secretary of State said that Kashmir was on “the international agenda” and made it amply clear that the US did not consider the forthcoming election in the valley as a solution to the Kashmir dispute. From India’s point of view, a big disappointment was the failure of its diplomacy to bring America round to equating the Kashmiri Mujahideen with Al Qaeda and the Taliban and denounce them as a bunch of ‘terrorists’.

Shocked, of course, the Americans were by the happenings of September 11, but to expect that the trauma would blind them to the realities of the situation in Kashmir and obfuscate them to the point of endorsing India’s position on that conflict would be carrying naivete too far.

America might well have divided nations into “with us” and “against us”, and their South Asian policy might often have failed to reflect a correct grasp of the complex cultural and civilizational phenomenon that is South Asia. But, all the same, the Americans have been and still are aware of the fact that the Kashmir problem and the Indo-Pakistan conflict had roots in history; that Pakistan and India were having their quarrels and wars when neither Al Qaeda nor the world-wide concern over terrorism existed; and that 9/11 had no direct bearing on Indo-Pakistan affairs — except that India thought it could exploit America’s psychological shock over 9/11 to advance its national interests at the expense of Pakistan. The Americans could see this plainly, and, thus, had the common sense not to place their diplomacy and military power at the service of India to achieve its own designs against Pakistan.

Beyond a show of anger, the massing of troops on Pakistan’s border and the war psychosis have served no worthwhile purpose for India. If New Delhi had carried the war into Pakistan as it had often threatened to do and mauled Pakistani’s armed forces or captured a chunk of territory in Azad Kashmir, as sections in the western media had apprehended, the Indian government could have claimed something to show for their massive military deployment against Pakistan to its own people. However, India has done or could do nothing of the sort.

Why India did not carry out its threat of attack can be variously explained. From the point of view of salvaging Indian pride, New Delhi can claim that the international community, especially the US, was instrumental in dissuading it from going to war with Pakistan. Unfortunately, history does not bear out such a claim, because India has shown an extraordinary ability to withstand world pressure.

Even in the aftermath of the war with China in October, 1962, India did not yield to Anglo-American pressure when Duncan Sandys and Averell Harriman came to South Asia to make Nehru agree to a Kashmir solution. Now, with India placed infinitely better economically and militarily, New Delhi had no reason to yield to US pressure.

The real reason was there was no guarantee of an Indian victory. What the outcome of a military showdown with Pakistan would have been nobody can say, but one thing is for sure: if India were certain of victory in a conventional war, it would not have waited even for a day to attack Pakistan. Ultimately, it was Pakistan’s conventional defence set-up that discouraged an Indian military adventure. Indian apologists could also say that the main purpose behind the massing of troops was not war but to intimidate Pakistan into stopping “cross-border terrorism.” That too has not been achieved, because New Delhi continues to say it will not begin a dialogue with Pakistan until Islamabad stops incursions into Kashmir. Then what purpose has the troop concentration along the border served?

The fact is that India had to eat humble pie. It flexed its muscles, spitting fire and venom, threatened war, created a war psychosis, drew world attention to itself and — and achieved nothing.

Pakistan has come off the better. To repeat, what the actual outcome of a war would have been nobody can say with certainty, but by looking straight into the Indian eyes along the border for ten months — at an enemy at least five times its size — Islamabad has called New Delhi’s bluff.

Indeed, by not carrying out its promised “decisive fight”, by pulling back from the brink, and by stopping short of an attack on Pakistan, New Delhi has conceded military parity with Islamabad in conventional arms. This is Pakistan’s major and indisputable gain. India has gained nothing.

The economic managers bear some responsibility for ensuring that the cost of production of exporters is kept under control by providing to them public utilities and services at a competitive price.

Finally, there is a strong lobby of exporters who have been insisting for a subsidized interest rate for export finance. There is no empirical evidence in Pakistan to support the argument that an increase in the volume of export finance leads to higher exports. The periods of low and subsidized rates have led to an expansion in the demand for export refinance but a reduction in the volume of exports. Subsidized rates, in the past, have given rise to a lot of misuse and misallocation of resources.

The arbitrage between the subsidized rate and the market rate has created distortions in the financial system in terms of artificial deposits, spurious collaterals and bad loans taken on the strength of such collaterals. Market-based rates have, on the other hand, induced discipline and prudence in the use of these resources. Subsidies have to be paid for by the other users of the financial system — depositors and borrowers outside the export finance scheme. Their returns and costs are affected adversely and the process of financial intermediation is stunted. In the open trading system of WTO these kinds of subsidies invoke retaliatory action by the importing countries which impose anti-dumping duties against Pakistani exports, thus shutting us out of their markets.

It is thus very important that we do not encourage such deviant behaviour which will eventually hurt our export interests. The SBP has opened up avenues of dollar financing of exporters which, in the wake of stability of the exchange rate, is quite attractive. The shift to dollar export financing from rupee financing has thus addressed this concern of low cost credit to exporters to a large extent.

The above analysis of the six ‘populist’ measures advocated strongly by some half-baked economists shows that while these are indeed palliatives and band-aids and will be received very warmly by the general public and the media, their consequences for the health of the economic system are certainly dangerous. The military government has taken some very unpopular and tough decisions during the last three years to restructure the economy.

The pains caused by these measures have already been felt by everyone but particularly by the middle class and fixed-income earning groups. The grievances of these groups are legitimate but the remedy is not to abandon this course of action and adopt populist measures. The new government should follow, improve and strengthen the measures already taken so as to maximize and spread their benefits gradually over next few years.

The new government should give priority attention to a few issues. First, they have to bring about a shift in the sentiments of private investors — both domestic and foreign. They have to convince them that there will be political stability, and the law and order and security situation would be kept under control, macroeconomic framework will remain intact and there will be continuity and consistency in economic policies and governance.

Second, the level of public sector development expenditure should be raised in consonance with the medium-term expenditure plan. In the past, whenever revenue shortfalls occurred during the course of the year, the axe always fell on development expenditure.

The new government should ensure that any such shortfalls are met by taking additional revenues mobilization measures or curtailing non-development expenditure and not by reducing public sector development programme.

Third, they should accelerate the process of restructuring and revamping public sector institutions such as Wapda, the KESC, etc., so that they can improve their efficiency and reduce their operational costs. The benefits of these improvements should be passed on to consumers rather than captured by the government.

Fourth, the CBR reforms should be given full support so that tax administration and resource mobilization efforts produce dividends for the economy and extend fiscal space for increasing public sector investment. Higher revenues will also help achieve debt sustainability sooner than later. Fifth, a special scheme should be designed for protecting the savings of pensioners, widows and other small savers. The country already has a very low domestic savings rate and this class can be induced to raise their savings in a way that the budgetary discipline is not impaired.

As the impact of external shocks of Sept. 11, drought, tension with India, uncertainty of elections, and global slowdown have begun to recede, several key domestic economic indicators during the last six months such as growth, investment, exports, taxes, water availability for agriculture and manufacturing output have been showing healthy signs of recovery. These indicators are going to make a difference to the life of the common man and the middle class in the country.

As the rays of sunlight begin to appear out of the long darkness, let us not deliberately dim them by politically expedient but economically disastrous populist policies. Let us prove the critics of democracy wrong and explode the myth that the democratically elected leaders cannot be trusted with responsible and prudent economic management.

The writer is Governor of the State Bank of Pakistan.