| May 26, 2003 | Monday | Rabi-ul-Awwal 23,1424 |
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Stand-off in Okara
THE government proposes to maintain the overall budgetary deficit at four per cent of the GDP during the next fiscal year. In order to achieve this target it has projected an overall income of about Rs. 760 billion for 2003-04 against an estimated expenditure of Rs.937 billion leaving a gap of about Rs. 177 billion to be filled by borrowing. All these three figures appear to be highly ambitious against the backdrop of the economy’s performance over the last five years except the current one. Indeed, going by what is happening on the economic front today, one feels confident about the prospects of the ambitious targets being projected for the next year being realized. However, there are two angles to this encouraging state of the economy. One is that the current development level is the result of all the reforms that have been in progress over the last several years, particularly the last three years, and is therefore sustainable. The other angle is that the development is attributable mainly to the massive fiscal space created by the restoration, in the wake of 9/11, of our ties with the US to the level that existed during the years of the bipolar world and therefore, its sustainability would crucially depend on the level of our relations with Washington. Since these relations in the past have not stood the test of changing times and circumstances, those who subscribe to this point of view have been advising the government against basing the future economic strategy on the current favourable turn in the external circumstances.
However, whatever the reasons for the economy’s current buoyant state, the continued emphasis on putting a tight leash on budgetary deficits appears rather misplaced and even dangerous at this point when unemployment and poverty appear to be getting out of hand. There is no way any degree of macroeconomic stability could be maintained no matter what the methods used to achieve it if the threshold of poverty continues to move up. In fact, if what has been achieved so far is sustainable, then the compulsion is more for relaxing the stress on budgetary deficits and expanding public sector spending aimed at creating jobs and reducing poverty at an accelerated rate because there is a limit to what macroeconomic stability can accomplish. Indeed, if this instrument is pressed beyond a point, it does become counterproductive. This is the reason why those who believe that the current pace and level of economic development are not sustainable insist that the government give up toeing the IMF line and start making its own plans to sustain the results of the reforms for whose implementation the needed fiscal space was made available by the generous inflows of concessional assistance from all over the world in the aftermath of 9/11.
The IMF and the World Bank-trained economists take pride in subscribing to the so-called Washington consensus. They believe that all that a country has to do to overcome its economic crisis is to create the enabling circumstances by providing macroeconomic stability and the rest would be done by the private sector. This macroeconomic stability, they believe, can only be achieved if budgetary deficits are kept continually in check. But this consensus loses its validity in the peculiar conditions of each developing country. Pakistan’s peculiarity is that its private sector is not made up of entrepreneurs but mostly of rent seekers created and sustained from the good old PIDC days when the public sector used to set up industrial units of all kinds and then hand them over to people with contacts and influence and not necessarily with ability and experience. The third generation of these rent seekers are now the captains of industry and commerce and to expect them to behave like the entrepreneurs of the US or South Korea is like expecting a tribal society to turn into democratic one overnight.
Our private sector has still a long way to go before it learns to move with market forces for profit and does not depend for its profit margins on concessions, incentives and protection. That is why it continues to drag its feet and has not shown any particular inclination to take advantage of the current macroeconomic stability by investing in a big way: whatever expansion in its capacity has taken place is the result of meeting the expanded market access allowed by Europe last year and that too under strong persuasion from the government. It is, therefore, necessary that the government stopped waiting for the private sector to take advantage of the current macroeconomic stability and started initiating economic projects in the public sector with job generating potentials.
THE long-running stand-off between tenants of military-owned farms in Okara and the authorities shows no signs of abating, despite the growing tension and bitterness in the area. The death of a 60-year-old tenant in a shooting incident earlier this month has only served to fuel further anger. While the authorities say that the man was killed in a tribal clash, the villagers claim that the man died after being caught in a hail of bullets fired by the Rangers. The villagers are now anxiously awaiting the findings of a post-mortem that they hope will confirm their version of the story. For almost three years, the tenants have been waging a bitter struggle against the authorities over the possession of the land. The tenants are demanding ownership rights over the land that they have been tilling for generations. The military authorities, however, want the tenants to sign an agreement so that rent can be collected from them, something the villagers view with deep suspicion. They accuse the authorities of forcibly acquiring signatures on such agreements and see it as a ruse to ultimately eject them at will.
The Anjuman-i-Mazareen-i-Punjab (AMP) has been at the forefront of the struggle for ownership rights, staging a number of demonstrations and protest rallies across Punjab and in the federal capital. The authorities have not taken kindly to such protests and have done their worst to harass and intimidate the Anjuman office-bearers. Following the recent killing of a tenant, the seventh in recent months, some AMP members were charged with committing the crime while many others have been jailed on various trumped-up charges. Meanwhile, large parts of Okara remain under virtual siege, with the Rangers surrounding villages to break the back of the protests. Tenants speak of severe harassment and beatings aimed at terrorizing them and forcing them to sign the official agreement — an allegation the authorities strongly deny. It is time for the government to intervene and work out a just and fair settlement before matters get out of hand. To summarily evict people who have been tilling this land for over a hundred years would not only be extremely callous but is bound to earn the government bad international publicity. The authorities must soften their rigid and uncompromising stance and lift the siege of the villages as soon as possible. The only way forward is to open negotiations with the tenants and end this sordid affair once and for all.