| May 31, 2003 | Saturday | Rabi-ul-Awwal 28, 1424 |
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Blatant violation
THE National Economic Council (NEC) has approved a Public Sector Development Programme (PSDP) of Rs.160 billion for 2003-04, higher by as much as 31 per cent than the revised estimates of Rs.118 billion for the current year. On the face of it and going by the experience of past several years, the allocation looks ambitious. But against the backdrop of a sudden acceleration in the economic activity, with the current year expected to show a GDP growth rate of 5.1 per cent against the budgeted target of 4.6 per cent and the coming year projected to record a growth rate of 5.3 per cent, the size of the next year’s PSDP does not seem all that unrealistic. Higher growth rates ensure higher revenues. But higher revenues do not necessarily mean higher growth rates because a country can have all the money it needs and still lack the capacity to prioritize its expenditures, sequence the spending so as to make funds available for the right projects at the right time and absorb the disbursed funds within the timetable set for completing the projects.
This is where the government should focus its attention in the next 12 months so that the entire allocation made for the PSDP for 2003-04 is utilized completely within the year and it is spent in the most efficient way, avoiding waste and leakages. The sector-wise allocation of the PSDP for the next year reflects a desire on the part of the government to tackle the issues of poverty, unemployment, irrigation, water shortage and lack of physical infrastructure on a priority basis. This is how it should be. In fact, if the absorption capacities in all these sectors increase rapidly, the government should not hesitate to divert more resources to them midway through the year by cutting down further on non-development expenditure. This should be possible now that it has been decided to hold the NEC meeting twice a year.
The government has been keeping a tight leash on the public sector spending over the last three years in order to achieve macroeconomic stability. According to its own claims, it seems to have achieved this objective. For proof it points to the growth of 35 per cent in imports, 20 per cent in exports and 15 per cent in revenue collection during the current year with the rate of inflation being firmly held at less than four per cent and the rupee showing a remarkable stability over an extended period. It is, therefore, time to accelerate the rate of investment so that the gains made this year are consolidated and within a reasonable time the overall growth rate is pushed up to seven to eight per cent annually. This is imperative in order to create capacities in the various sectors in the country to feed, educate, clothe, house and employ a growing percentage of the population growing at the rate of 2.2 per cent annually and in the process reduce the incidence of poverty to an acceptable level.
An investment rate of around 21-22 per cent is considered ideal for achieving a growth rate of about seven to eight per cent whereas the current rate of total investment is less than 16 per cent and for the next year it is proposed to be fixed at 17 per cent of the GDP half of which is to be contributed by the private sector. In the first place, there is a gap of about four to five per cent between the investment rate to grow at seven to eight per cent and the one projected for the next year. Secondly, half of the growth in the investment rate is being projected to be contributed by the private sector. It is perhaps not very wise and practical at this juncture to burden the not-so-dynamic private sector in Pakistan with such a big responsibility. Secondly, there is an urgent need to create socio-political conditions and economic environment in the country to attract increased foreign investment so that the gap of four to five percent mentioned above is filled within a couple of years. The aim of the government should, therefore, be to further enlarge the scope as well as the annual allocations for the PSDP in the coming years by cutting down more drastically on non-development expenditures and using the available resources for making the social and economic infrastructure in the country adequate, reliable and efficient from the point of view of foreign investors in order to be able to induce them to come to Pakistan in a big way.
IT seems that the Bush administration would do anything to please the Zionist lobby now that the run-up to next year’s presidential election in America is gradually hotting up. On Friday, in a blatant violation of diplomatic protocol, US occupation soldiers arrested three Palestinian diplomats after raiding their mission in Baghdad. The raiders are said to have recovered some guns; more important, they seized “a book on terrorism.” Among those arrested were the charge d’affaires, the consul, the commercial consul, three staff members and three security guards, all Palestinians, besides two Iraqi guards posted there. Incredible as it may sound, the search of the diplomatic mission lasted full 24 hours — from Tuesday midnight to Wednesday midnight — and it left the premises, to quote a Palestinian spokesman, “ransacked.” The reason for the raid and arrests was a bomb attack on US troops in the same area where the Palestinian mission is located. The obvious conclusion — without any proof — to which the Americans came was that Palestinian “terrorists” must have been involved in the attack, which killed a US soldier.
It is most unfortunate that the State Department should have tried to justify the arrests on the plea that all diplomats in Iraq had lost their immunity, because they had been accredited to the Baathist regime which had ceased to be in power. This absurd but convenient argument fails to take into account basic points, namely that most embassies in Baghdad continue to function regardless of the regime change; secondly, as the de facto power, the occupation authorities must recognize the existence of the embassies and the presence of diplomats in Iraq, give them the necessary protection and let them perform their diplomatic and consular duties normally. It is a duty they cannot shirk. They can, of course, ask a particular country to wind up its diplomatic mission in Baghdad if they feel so inclined, but short of that, they cannot be selective in the matter of extension of diplomatic privileges and protection to some missions and denial of these to some others. Many embassies and NGOs continue to work despite the chaos and uncertainty that prevail in Iraq these days. Besides, the occupation authorities have allowed many embassies which had been closed down before the war to reopen. More embassies, diplomatic missions and NGOs are likely to start functioning in Baghdad and elsewhere in Iraq after the reconstruction task begins. Recognizing the embassies’ existence and giving protection to the diplomats is thus the duty of Iraq’s occupation powers.