An equitable NFC Award

THE National Finance Commission made an unsuccessful attempt at reaching consensus on the distribution of resources before elections in 2002. Before a fresh commission has been summoned to make its recommendations to the president for the constitutionally overdue NFC award, the legislatures of two provinces have already passed unanimous resolutions stating their demands.

Positions are wide apart and emotions run high on some contentious issues. While the existing population-based formula is not acceptable to some provinces, reaching consensus on any other formula would be difficult since it will necessarily involve a reduction in the share of at least one province if others are to gain. A consensus will be easier to reach if the Commission adopts a set of principles that would govern its recommendations. The federation and the provinces should commit to abide by it.

Recognizing that differences exist today between the provinces in terms of the average level of social and human development, the first principle should aim at reducing those disparities and eliminating them over a reasonable period of time. The reasons for the disparities could be natural resources, location or the unequal distribution of resources over the last 55 years; whatever the reasons, we have to look forward now and eliminate those differences to strengthen the federation. The NFC can consider differences between the average levels of social and human development across the provinces, and not the relative backwardness of some areas within a particular province; the latter needs to be addressed by the respective provincial finance commissions.

Secondly, if we try to correct the disparities created over decades in a very short period, it will retard the growth of the advanced provinces. Hence the second principle should ensure that the distribution of resources, while reducing disparities, does not retard the social and human development of any province. The third and final principle should constrain the federation and provinces to make their demands within the ambit of the 1973 Constitution. What belongs to the federation is theirs and what belongs to the provinces must be given to the provinces.

Having stated a set of proposed principles, it is important to understand the nature and implications of the existing federal fiscal structure in the country before distributing its resources. Pakistan is a federation of four provinces, unequal in area, population and levels of economic and social development. The ethnic distinction of provinces makes horizontal equity across provinces in development vital to political stability and national cohesion. The country now has three tiers of functional governments — federal, provincial and local.

The prime function of all three is to deliver various services. These can range from providing defence to supplying water and sanitation. In order to provide these services, governments need resources. Apart from borrowed resources, governments in Pakistan collect various taxes, user charges and non-tax revenues as well as royalties and profits from the exploitation of natural resources.

Assigning service delivery and taxation responsibilities at various levels of government is a fundamental issue in fiscal federalism. In Pakistan, the distribution of regulatory and service delivery functions conforms to international practices. These are specified in the 1973 Constitution in Article 70 (4), (Fourth Schedule). The Federal Legislative List includes the functions to be performed by the federal government, while the Concurrent Legislative List includes all those functions that can be undertaken by the federal and/or the provincial governments. The Constitution assigns all remaining functions to the provincial governments.

Local governments in Pakistan do not have any distinct status in the 1973 Constitution but are established by provincial government ordinances (currently LGO of 2001) which also determine their powers and responsibilities.

Similarly, the allocation of taxing powers to various levels of government are determined by considerations of efficiency, national equity, administrative costs and fiscal need. In Pakistan, the responsibility of the federal government in the area of taxation is spelled out in the Fourth Schedule of the 1973 Constitution. Following the last NFC award in 1996, the federal government collects all revenues from income tax including corporation tax, sales tax, custom duties and federal excise duties. The major sources of provincial revenues are user charges and tax revenues made up of agricultural income tax, provincial excise duty, stamp duty, motor vehicle registration tax, entertainment tax, and various types of cess. Similarly, there are few sources of revenue left with the local governments.

An important implication of the constitutional assignment of taxing powers and expenditure responsibilities is that while all broad-based and buoyant sources of tax revenue are assigned to the federal government, the provinces (and local governments) are left with only residual authority and sources. On the other hand, the provinces and local governments are entrusted with substantial expenditure responsibilities. As a result, public finances are characterized by persistently large vertical fiscal imbalances between the federal and provincial governments. The federal government collects about 93 per cent of total revenue collected in Pakistan, while it accounts for only 72 per cent of aggregate national expenditure. By contrast, the provinces collect only seven per cent of the total national revenue but account for nearly a quarter of total expenditures.

One possible response to the vertical imbalances in the budgets of the three tiers of government could be to reassign taxation authority downwards to the provincial and local governments. While this could be supported on grounds of better fiscal accountability and greater autonomy for provinces, it will increase regional disparities. The latter because fiscal capacities of provinces (also of districts) are diverse, so that devolving taxation authority will result in growing differences in public revenues and service delivery in the provinces (and districts). Another possible response would be to reassign upwards service delivery responsibilities to the federal government and provinces. In fact this is what happened in the period prior to 2001. The impact is well known: poor governance, poor service delivery, etc.

The third alternative response to vertical fiscal imbalances is to transfer resources from the federal to provincial governments and from provincial to local governments. Equitable transfer mechanisms can address regional resource redistribution objectives and ensure efficient service delivery at the appropriate level of government. This is the route adopted in the 1973 Constitution and LGO 2001. The NFC and PFCs are required to come up with such equitable transfer mechanisms.

The last NFC award was made in 1996. According to it, the federal share in the net proceeds of divisible pool was fixed at 62.5 per cent with the remainder 37.5 per cent to be distributed between the four provinces on the basis of population. As a result Punjab received 57.88 per cent, Sindh 23.28 per cent, the NWFP 13.54 per cent and Balochistan 5.30 per cent of the provincial share. In consideration of their relative backwardness, the NWFP and Balochistan received special grants/subventions, which in 1997-98 were Rs. 3,310 million and Rs. 4,080 million respectively, set to increase at 11 per cent annually.

The 1996 NFC Award also recommended straight transfers to the provinces in lieu of net profits on account of generation of hydroelectricity and net proceeds of development surcharge, royalty and excise duty on natural gas and oil.

What was wrong with the 1996 NFC award and how can it be improved?

* The share of the federation was too large, leaving very little resources for the provinces to fund their annual development programmes out of their own cash resources and to address poverty related responsibilities. For political reasons, the federation financed a number of federally designed and funded programmes in education, health and the social sector with funds which could have been left to the provincial governments.

* The use of population-based formula for distributing the bulk of the divisible pool resources between the provinces could not address the needs of the poorer provinces. While the formula is simple, objective, measurable and reflects broadly the per capita needs of each province (after all, many provincial expenditures escalate generally in proportion to population), the formula assumes that the level of development of people in all the provinces is the same, which is contrary facts. A formula based purely on population cannot rectify the disparities in development between the provinces.

* Allocations for subvention grant were grossly inadequate in relation to the relative backwardness of the two provinces. In 1997-98 subvention grants were less than two per cent of the divisible pool, and by 2002-03 since the divisible pool had grown faster, subvention grants were less than half a per cent of the pool. The difference between the provinces in social and human development is much more.

* Recommendations on straight transfers were not implemented according to the Constitution. The federation and its executing department Wapda have not paid to the NWFP its full share in the profits on hydroelectricity generation. As a result, the accumulated arrears exceed Rs. 200 billion without taking account of interest payments.

Looking ahead to the next NFC award, the share of the provinces must be increased substantially to allow them to assume a larger share in development spendings. Similarly, provincial equity considerations should play a greater role in the context of the Federal Annual Development Programme, which is outside the ambit of the NFC. In view of the needs of the local governments, which receive their funds from the provinces, and the urgent need to address poverty-related issues, the total provincial share should be no less than 45 per cent of the divisible pool. An increase in the provincial share will facilitate the acceptance of a change in the provincial revenue-sharing formula, since all provinces could then receive more than in 1996.

The provincial share should be distributed between the provinces on the basis of a formula that reflects their needs as well as reduces the disparities between them. The multi-indicator formula should include population (since many of the provincial needs are directly proportional to it), area (since the density of population affects the per capita cost of delivering some public services) and an indicator of relative social and human development (to reduce disparities). The weight of the development indicator in the formula will depend on the speed with which the NFC chooses to correct regional disparities.

In case an acceptable indicator of development cannot be agreed upon, a formula using only population and area would have to be supplemented with a large subvention grant for those provinces that are below the national average in human development. This may include two or three provinces. But the amount of subvention grant will need to be at least ten per cent of the divisible pool to make any difference in reducing disparities between the provinces. The division of the subvention grant will also need to reflect the relative positions of the provinces.

Sindh has demanded that the divisible pool be divided on the basis of revenue collection, implying that provinces have some claim on federal revenues collected within its provincial boundaries. This is not in accordance with the 1973 Constitution. The basic law is very clear on the division of taxation powers and has given the federation exclusive right to particular tax bases. No province can lay claim to federal resources.

If revenue collection were used as a basis for dividing resources, provinces which are better off and therefore collect more revenue would get a disproportionately larger share of the public resources and thus increase the disparities that already exist. And if the revenue collection basis was used within the province as well in the PFC, Karachi and Hyderabad would receive all the provincial resources with little left for rural Sindh — a politically explosive proposal.

In any case, the revenue collection potential of provinces today reflects, to a considerable extent, the allocation of resources over the last fifty-five years which the two small provinces may not consider to have been equitable. Thus revenue collection as one or the only factor in the NFC formula will aggravate disparities and provoke divisive debates about the country’s past development priorities.

The next NFC will succeed if the federation ensures full compliance with the Constitution. The demand of the provinces for their profits and royalties from natural resources is based on the Constitution. If there are differences over the calculation of provincial shares, these can and should be addressed according to the norms of accounting, decisions of the Council of Common Interest and the Constitution. To ignore valid and justified demands is a disservice to the federation and the country.

The writer is a former federal commerce minister. The views expressed here are his own.

Case for revival of trade ties

THE recent visits of parliamentary and trade delegations between India and Pakistan indicate that both sides have now begun to realize the futility and unwisdom of the two major countries of South Asia continuing to be in a perpetual state of isolation from each other.

The report that the India-Pakistan Chamber of Commerce and Industry has signed a document of joint recommendation for the promotion of bilateral trade between the two countries is very encouraging. In the interest of economic growth of both countries, there is need for friendly relations and economic cooperation between them.

Closer economic cooperation, particularly trade, presupposes settlement of outstanding political disputes. Continued tension over a number of unresolved issues has created hindrance in the way of promotion and successful working of bilateral trade and other arrangements. Pakistan has given a fresh call for a composite dialogue with India to tackle all outstanding problems, including the core issue of Kashmir.

President Musharraf has asked New Delhi to show flexibility in talks with Pakistan. This country is certainly not going to allow a single issue to block progress on other key issues. It expects India to reciprocate.

The need for promoting trade between India and Pakistan can hardly be overemphasized. this need has become particularly pressing in view of the emerging division of the world into large trading blocs. This calls for initiation of programmes of closer economic cooperation among regional countries such as those of South Asia to counter the adverse effects of such groupings in the industrial world. Greater bilateral and multilateral economic cooperation among Third World countries enables them to have a better bargaining position vis-a-viz other countries.

The present bilateral trade between India and Pakistan is guided by the principles agreed at the secretary-level meeting held in New Delhi in 1987. A list of 249 items importable in the private sector from India was announced in 1988. This was followed by another additional list of 322 items.

Pakistan’s trade with India does not present a very bright picture and certainly does not match the potential that exists. The share of Pakistan’s exports to India in the country’s total exports during the decade of 1981-91 averaged about one per cent whereas the share of imports from India in the country’s total imports averaged only 0.30 per cent. This shows that each country has treated the other as its residual trading partner and that a genuine trade relationship between the two still remains to be developed.

There has been a series of deliberations between India and Pakistan on the subject of promoting bilateral trade at various levels. As a follow-up of Simla Agreement, a trade agreement, valid for one year, was signed in January 1975. This was extendable automatically for a further period of two years. As the negotiations to examine and redefine the agreement did not materialize by 1978, the agreement lapsed. After a deadlock on the trade front for a period of three years, the subject was again taken up in 1981 with the visit of a joint delegation of the members of the Karachi and Lahore Chambers of Commerce and Industry to India.

In July 1982, Pakistan announced a list of 40 items which could be traded between the two countries in the private sector. An Indo-Pakistan joint commission was set up in 1983. To provide further impetus to economic cooperation, four sub-committees set up under the aegis of the Indo-Pak Joint Commission, met in January, 1984, in Islamabad and New Delhi and identified various areas in which both countries could cooperate to their mutual benefit. The sub-committee on trade identified a large number of items for commodity trade, including bulk trading.

In January, 1986, Pakistan’s minister for planning and economic affairs visited India and as a result some improvement took place in economic cooperation. A remarkable achievement was the opening up of private sector trade between the two countries without routing Indian exports to Pakistan through the Trading Corporation of Pakistan. The proposal of enlarging the list was also discussed and it was agreed to enlarge it from 42 to 250 items.

Hopes of closer economic cooperation and collaboration among the countries of South Asia, particularly between India and Pakistan, have not materialized yet. Also, not much progress has been made in respect of the recommendations of Saarc for a special trade area in South Asia, gradually removing non-tariff barriers, giving each other most favoured nation status, creating a payment union and a regional fund for development.

One good development is that the Saarc summit of leaders will be held in Islamabad in January next year. It is encouraging to know that a draft on South Asian free trade will be presented at that meeting. Let us hope that Saarc special trade area will come into being in the near future.

It is now widely recognized that trade liberalization has only a limited role. Pakistan and India must seek economic cooperation and their mutual trade should be substantial and capable of rapid expansion. A new trade agreement between India and Pakistan should be concluded keeping in view the non- competitive industries of both countries and selective promotion of trade without harming existing industries already operating in a competitive environment or impeding future industrialization. The ban on using each other’s shipping lines should be removed to facilitate overseas trade.

The importance of trade in international relations cannot be overemphasized. But can trade alone help normalize politically strained relations and top bickering due acrimony? There exist far too many points of friction and misunderstanding between India and Pakistan. The journey from trading charges to establishing trading ties is a complex one. It comes up against stumbling blocks of visas denied, of books banned, artists black- listed, intellectuals hounded and intentions misinterpreted. These ought to be removed to promote progress towards normalization.

The writer is a retired major-general of the Pakistan Army.

Email: genumar@yahoo.com

Legalized loot — two ways

BEWAILING corruption and its various manifestations in Pakistan is old hat now. Let us give a few moments to legalised corruption; loot in which hands are not knowingly dirtied and the conscience remains clear. You may not agree with this expression but I insist it is there and is practised in this country on a large scale by the privileged gentry. I shall deal with just two ways, both very popular.

Example: by what moral law am I allowed to import an expensive duty free car if I have remained governor or chief minister of a province for a few days, and subject the country’s exchequer to a loss of some 25 to 30 lakhs of rupees, without a blot on my escutcheon as a patriot?

And if I already have a Mercedes or a BMW, as all those do who fall in the category of potential chief ministers and governors, and I don’t actually need this duty free limousine, what are the ethics that permit me to sell it to a billionaire and make a profit far in excess of the 25 to 30 lakhs that I have already saved? The beauty of the entire proceeding is that I have done nothing unlawful. Legalised dishonesty does not bother the conscience.

Mind you, when I was holding that coveted post which entitled me to import a duty-free car, I had numerous other perks and facilities (almost roti, kapra aur makaan) which by themselves cost the state many lakhs of rupees per month, even if I remained honest and didn’t indulge in corruption proper, which would be a miracle any day. Truly there is no end to man’s greed. Apparently the first thing that one does on being appointed CM or governor is to ask for the import of a duty-free car.

Some years ago, as my scrapbook tells me, the federal commerce minister had told the National Assembly how many high-powered cars had been imported by government permission during the period from April 1989 to July 1998. Included among these were the cars allowed to be imported duty-free by prime ministers, presidents, chief ministers and governors, and chiefs of the defence services as personal property. They only paid the price of the cars which of course most of them recovered as part of the huge profit on their sale.

Among the ‘culprits’ were (no, I have no compunction in calling them culprits) were interim prime minister Ghulam Mustafa Jatoi, and the late Chaudhry Altaf Husain, who, by the way, got two duty-free cars in two terms as Governor of Punjab. Another Punjab governor, General Raja Saroop, later a leading light in the PPP, cost the state nearly a crore in customs duty, while the biggest saving — one and a half crores — fell to the lot of former Balochistan CM Zulfiqar Ali Magsi who imported an Aston Martin. At least he had the taste to have a car of which not more than a dozen owners will be found in Pakistan!

Conspicuous by his absence from this gallery of greed was the late Malik Meraj Khalid who never thought of getting this luxurious gift horse for himself when he was caretaker prime minister for three months after Ms Benazir Bhutto’s dismissal. God bless his noble soul! As for BB herself, she holds the record for buying the most high-powered car ever imported duty-free by any government leader. Counting the one she imported in her first term, she got two cars, and saved 1.6 crores in import duty, or rather caused a loss of Rs 1.6 crores to the state. Of course this was peanuts compared to what she did to the country.

I may add that the above figures, of amounts saved by patriotic and people-loving leaders, were secured by me from my own source in the CBR, since the federal commerce minister, for some inexplicable reason, had refrained from mentioning them in the National Assembly. He had only given the names of the political leaders of this benighted country who had imported duty free cars which they probably required for providing better service to the masses. After all you can’t do much good to the people of Pakistan in a 1600 cc car bought in the market.

The other example of legalised corruption is the allotment of plots, residential and commercial, to politicians, bureaucrats and friends of successive prime ministers and chief ministers. It is so common that no one looks at the ethical and moral aspect of the practice, that 75 per cent of such plots, made available at cheap rates by the government, are sold the very next day for at least five times the price paid by the lucky recipients.

In the case of a commercial plot in a prized location the selling price can be even ten times what they paid for it. Where is the justification for these allotments, where is the public interest involved (all acts of PMs and CMs are in public interest), and what do the two parties — the donors and the receivers — do with their conscience when they are indulging in this absolutely needless charity at state expense?

The reality is that in both the cases, i.e. import of duty-free cars and securing of plots at subsidised rates, the conscience is not troubled at all. The beneficiaries believe they have done no wrong. It doesn’t take long to convince oneself to keep in line with worldly wisdom.

The other day there was a report that the Lahore police had asked PTV to initiate programmes that could teach the people to desist from terrorism and other heinous crimes. Excellent idea, but I hope this will be followed by special TV programmes to teach policemen to abstain from criminal and anti-people acts and for once try to honestly do the job for which they were recruited.

I was wondering if PTV could also do something about curbing the legalised crimes mentioned by me, and others too numerous to mention. My scrapbook also gave me the happy news that PM Nawaz Sharif had done away with the duty-free car concession, of course after the treasury had been robbed of crores of rupees. But if programmes about almost-free plots are started, I bet the chief ministers will have them stopped at once since they will not tolerate any interference with provincial autonomy!

Blame it on the BBC

THE ongoing controversy over the invariably exaggerated and often unfounded claims made about the Saddam Hussein regime’s weapons capabilities in the lead-up to the invasion of Iraq was admirably summed up some weeks ago by The Guardian’s cartoonist Steve Bell. He sketched a rear view of the British prime minister with huge flames leaping out of his posterior. “My pants,” Tony Blair is saying, “are completely and totally ice cool.”

Last week Bell came up with another gem. Flanked by his predecessor John Major’s jocks, the PM has been hung out to dry, by his ears, on a clothesline. “I’m not a lying warmonger,” the speech bubble has Blair saying. “I merely had a programme of fraud-based conflict promotion!”

Although George W. Bush has been dogged by awkward questions throughout his African safari and Australia’s John Howard has come up with his customary mealy-mouthed responses to readily verifiable accusations that he tends to parrot White House pronouncements without bothering to ascertain their veracity, neither of them appears to be in dire trouble over the lies propagated as justification for an unnecessary war. Blair hasn’t been so lucky.

One of the reasons for Tony’s travails is the social-democratic past of the party he leads. He faced a formidable backbench revolt over British involvement in Bush’s military adventure, and it is quite conceivable that Labour Party MPs would have defeated the war resolution in the House of Commons but for the government’s dogged insistence that Saddam’s chemical and biological arsenals and nuclear aspirations posed a direct and immediate threat to Britain and its allies. They were told that the Iraqi dictator was capable of deploying his deadly weapons in no more than 45 minutes.

They were also informed that Saddam had been trying to purchase uranium from Niger, ostensibly to manufacture nuclear weapons. This damning claim not only figured prominently in Blair and Howard’s parliamentary interventions but also featured as key argument in Bush’s State of the Union address last January. The trouble is, it had been discounted nearly a year earlier by the CIA, following a high-level investigation prompted by Vice-President Dick Cheneys demand that the Niger connection be substantiated.

Now CIA chief George Tenet has accepted responsibility for failing to recommend that the allegation be excised from Bush’s speech. Howard, meanwhile, claims that although Australian intelligence agencies knew the Niger yarn to be dubious, that information was not passed on to the PM’s office. Even more extraordinary is British Foreign Secretary Jack Straw’s revelation that although the CIA had advised London to leave the uranium-from-Africa charge out of its first dossier on Iraq’s weapons, the suggestion was not followed because the agency did not spell out the reasons behind its advice.

The tangled web becomes even more confusing when you realize that in his speech Bush credited the British with unearthing the African link, while there have been suggestions that the Blair regime’s information (if one can call it that) was based partly on American sources to start with. It’s also worth recalling that when the Niger allegation was initially aired, certain documents were cited in support. Those documents turned out to be crude forgeries. That discovery ought logically to have raised one obvious question: Who forged them? However, neither any intelligence agency nor any media organ appears to have investigated the provenance of those documents.

On top of all the backtracking and disowning of responsibility, there have been statements from Straw and Condoleezza Rice to the effect that the uranium-from-Niger yarn wasn’t an invention after all, and that it’s been corroborated by sources that can’t be named. Yeah, right. We are presumably expected to swallow this claim outright, because chewing upon it could leave a bitterly sour taste in the mouth.

Even in this context, Blair seems to be encountering greater difficulty than his US and Australian counterparts in shifting blame to the intelligence agencies. The urgent need for a major distraction may help explain why No.10 Downing Street decided to declare war against the BBC. Bush House has lately been bombarded with the verbal equivalents of cluster bombs and daisycutters. It has thus far tenaciously withstood the barrage. The corporation’s government-appointed board of governors has stolidly defended the broadcaster’s independence while seeking a ceasefire. However, the Blair regime is sticking to its guns, so to speak, and appears to be particularly mortified by evidence that much of the BBC’s ammunition has been obtained from government armouries.

In many countries, not least Pakistan, the notion of open warfare between the government of the day and the state broadcaster would be considered utterly bizarre. In fact, not only are we accustomed to PTV and Radio Pakistan completely changing their tune overnight in response to changes in Islamabad, but even private and semi-private broadcasters can ill-afford to openly challenge the official orthodoxy. However, in certain western democracies governments find cause to be more wary of public broadcasters than they are of the independents.

In the US, some of the best documentaries and current affairs programmes are made by the publicly funded PBS. But the omnipotence of the commercial networks means that the government can generally afford to ignore the perceived trespasses of public broadcasting. As a consequence, PBS’s independence is largely unthreatened, but the commercials feel obliged to toe the line, although none of them is quite so passionately obsequious as Rupert Murdoch’s Fox network.

In Australia, on the other hand, large numbers of people rely on ABC radio and TV for their news and views, and the corporation is almost constantly under government pressure. The fact that the ABC attracts roughly equally amounts of ire from Labor and Liberal administrations testifies to its relative objectivity. Much the same goes for the BBC. Its present troubles recall the broadcaster’s occasional brushes with the Thatcher administration, notably over its reporting during the Falklands conflict and its coverage in 1986 of US air strikes against Libya.

On the face of it, the current conflict is over a report by Andrew Gilligan in which Blair’s communications director Alastair Campbell was accused of asking intelligence agencies to “sex up” the second British dossier on the danger posed by Iraq. A House of Commons committee, constituted to look into the case for war in general, has by a margin of one exonerated Campbell without explicitly condemning the BBC, while at the same time raining sceptical questions about the pre-war assessment of Baghdad’s military capabilities.

Blair has reacted churlishly to suggestions that he may have ‘inadvertently’ misled parliament. If his objection is to the charge of inadvertence, that’s perfectly understandable: the prime minister knew exactly what he was doing. Former cabinet ministers such as Clare Short have suggested Blair had promised Bush that Britain would participate in the assault against Iraq regardless of what the UN Security Council decided — a plausible enough charge that would help explain why the PM was so desperate to get a nod from the Commons. Hence the need to pretend, via the now discredited dossiers as well as other means, that it was within Saddam’s means to paralyze, if not obliterate, London at will.

It would be interesting to know whether the short shelf-life of their deceptions will figure in talks between Bush and Blair during the latter’s visit to Washington this week. Probably not. After all, what is there to say? ‘Hey, Tony, wasn’t it you who had proof of the Niger deal?’ ‘Never mind, George, what’s done is done — what galls me is that we could have got away with it but for the bloody BBC!’ ‘Yeah, that’s too bad, Tony. Shall we nuke its headquarters and blame it on Saddam or Osama? Or, better still, why don’t you sell it to Rupert?’

One thing Blair might feel obliged to discuss with his mate is the impending trials of two Britons imprisoned at Guantanamo Bay. They are among the first six inmates (one of the others is an Australian) chosen by Bush to appear before military commissions empowered to condemn them to death. Blair and Howard are putting a brave face on it while encountering considerable domestic flak over their inability to persuade the Americans to allow the suspects — the charges against whom remain secret — to be tried in their home countries.

The Blair administration’s ire against the BBC, meanwhile, is clearly not based solely on Gilligan’s charge against Campbell, which appears to be based on a briefing from a high-level source close to the MI6. It relates broadly to the broadcaster’s attempted objectivity ahead of, during and after the Iraq war. The BBC’s governors as well as its director-general have, to their credit, defended Gilligan and will, hopefully, strive to maintain the corporation’s independence.

They are probably aware that the warfare against the BBC is intended, among other things, to deflect attention from the Blair regime’s glaring shortcomings in making a convincing case for the invasion of Iraq. The BBC may in many ways be a flawed giant, but in this particular context it has cause to hold its head high.

And the fact that the broadcaster was banned from participating in Ariel Sharon’s press conferences in London this week, ostensibly because of a documentary that probes Israel’s weapons of mass destruction, is another feather in its cap. It should provoke the BBC to hold its head up even higher.

E-mail: mahirali@journalist.com