FOREIGN Minister Khurshid Mehmood Kasuri will be visiting Afghanistan in the third week of August to carry forward the discussions on further cooperation between the two countries and to narrow the rift caused by on the recent attack on the Pakistan embassy in Kabul.

By the time this article appears the tripartite Security Commission (Pakistan, Afghanistan and the US) will have met and hopefully settled, on the basis of authentic maps, the exact delineation of the border in the Mohmand Agency area where Pakistan has deployed its troops for the first time. I say it will be settled because it seems clear that the controversy has arisen only because the Afghans have chosen to use, inadvertently or deliberately, inaccurate or politically-motivated maps drawn up by Soviet cartographers rather than the authentic British maps on which the Durand Line was marked and agreed upon by both sides. Perhaps difficulties would have persisted if the negotiations were bilateral but the presence of a neutral third party should serve to ensure that this storm in a tea cup will subside.

Earlier in the month the visit of Afghan finance minister Ashraf Ghani Ahmadzai for a meeting of the Pakistan-Afghan joint ministerial commission provided an opportunity for highlighting the level of economic cooperation that already existed between the two countries and to agree upon further concessions that could be made to carry this cooperation to a higher plane. Some of the statistics and proposals that emerged are:

* Pakistan’s exports to Afghanistan amounted to $400 million as against imports of $35 million and on a monthly basis more than 10,000 trucks transported goods between Pakistan and Afghanistan. Pakistan has reduced the duty on Afghan exports to Pakistan.

* Pakistan will take another six items off the list of items that Afghanistan’s traders were prohibited from importing through Pakistan.

* Afghanistan will utilize the offered Pakistani assistance to improve its customs administration and there will be some effort at seeking to establish uniformity in customs duties;

* Some 6,000 Pakistanis are working in Afghanistan, and new opportunities will arise as an estimated a billion dollar is spent by the international community on infrastructure reconstruction in the periods up to June 2004 (Afghan estimate); * Pakistan has agreed to convert the $100 million it had offered in assistance into a grant, part of which would be used to export sugar to Afghanistan while another part would be used to repair and upgrade the Torkham-Jalalabad Road;

* Pakistan remains interested and will pursue the opening of branches in Afghanistan by two of its banks.

“Pakistan and Afghanistan economies are complementary to each other and we regard Afghanistan as land-bridge to Central Asia and beyond. It is a win-win situation for both the countries”, said Finance Minister Shaukat Aziz, while Afghanistan minister Ashraf Ghani dwelling on the same thought said: “My country would like to see Gwadar port to serve not only for Pakistan and Afghanistan but act as a hub of trade and economic activities for this entire region”.

The remarks about Gwadar and about linkages with Central Asia build upon what appeared to be a highly successful meeting of the transport ministers of Pakistan, Afghanistan and the Central Asian states (Uzbekistan, Turkmenistan and Tajikistan) at which protocols were signed on allowing the Central Asian states to utilize Pakistan’s ports for their trade with the outside world and Pakistan’s highways for regional trade. The Asian Development Bank will host another meeting of the transport ministers in December when further details will be worked out.

On another but related front reports indicate that there are now good prospects that the asphalting of the Kabul-Kandahar Road, under the watchful eye of an 800 strong security force, will be completed by the end of the year bringing the journey time down to some 5-6 hours. Kuwait has agreed to provide $15 million to finance jointly with the ADB the construction of the Kandahar-Spin Boldak Road. Between them these two roads will provide the vital transport links between Afghanistan and Gwadar.

All this is good and well but on other fronts problems appear to be mounting. The security situation in the south and east of Afghanistan is deteriorating. The UN, in the face of repeated attacks, has now suspended travel by its employees in parts of south Afghanistan. Clerics in Kandahar, supportive of the Karzai regime, have been targeted by Taliban assailants. In Kandahar the number of NGOs has dropped from 22 to 7 or 8 and even the few aid workers who remain tend to confine their activities to the city of Kandahar or nearby areas. As a result such crucial work as bridge repair or food distribution has slowed or stopped.

I am focusing on Kandahar though the deterioration in the security situation is apparent throughout the south and east of the country, because Kandahar is the heartland of Pushtun Afghanistan and, to paraphrase, “as goes Kandahar so goes the rest of the country”. It is alleged that much of the security problem arises because of the attacks by the Taliban launched from Pakistan where the Taliban and Hikmatyar are said to be working hand in hand with Pakistan sympathizers. It seems that no particular progress has been made at least in Balochistan to eliminate the Taliban or to restrict their ability to operate with impunity from their hideouts in Pakistan against targets in Afghanistan.

There are reports that Pakistan and America have agreed to set up a Border Security Coordination Cell (BSCC), and that Pakistan officials assigned to this cell would draw upon the Thai experience in running such a cell on its borders with Cambodia and Vietnam. There has also been a great deal of funding for the acquisition of helicopters and other equipment to permit better monitoring of the border.

There is no doubt that these steps are needed before the long and difficult border between the two countries can be effectively policed and sealed against the sort of incursions which occasion Afghan and American complaints. But the fundamental question is whether Pakistan’s provincial authorities and the armed forces are prepared to make it clear to the Afghans currently on Pakistan soil that they must behave or face the consequences. If we genuinely put “Pakistan First” we must do this. We must recognize that Pakistan’s own internal stability, Pakistan’s relations with Afghanistan, Pakistan’s hopes of trade and economic collaboration with Central Asia all are at stake. This is the message that Mr Kasuri would hopefully carry to Kabul.

This is not to say that all Afghanistan’s woes can be laid at the door of the Taliban. Much of what Afghanistan is suffering can be said to have been caused by the failure to provide adequate security against the warlords and the failure to provide adequate funds for reconstruction. Many believe that the same conditions are coming to prevail as had led in 1994 to the emergence of the Taliban. Commanders from Nato, which now has command of the ISAF forces, recognize that security could only be ensured if the ISAF mandate was extended beyond Kabul but it seems that the will to provide the force needed for this purpose does not exist among the Nato countries.

The US has talked about offering $1 billion in fast disbursing aid to finance numerous high visibility and high-impact infrastructure projects. It is hoping that this example will persuade other donors to be more forthcoming.

American newspapers have highlighted the fact that even this offer of $1 billion is dwarfed by the $10 billion that is spent on maintaining the 8500 American soldiers in Afghanistan. Implicitly there is recognition that more needs to be done particularly if the Bonn agreement timetable of elections next year is to be adhered to.

There have been impassioned warnings by the UN Secretary General that “without security, the accomplishments of the government of Afghanistan and the significant investment of the international community are at risk.” In his quarterly report he also points to the need for disarming the armies of the warlords and to the difficulty of implementing such disarmament while there is the perception that the ministry of defence continues to be dominated by one faction. So far, however, despite numerous announcements Marshal Fahim seems to have successfully resisted all efforts to reduce his stranglehold on the ministry.

While this is Afghanistan’s internal affair, it is possible that Mr Kasuri’s hosts will inform him of what can be expected in this regard, particularly when he makes the point that the Taliban in their effort to garner support offer this as evidence of the discrimination against the Pushtun plurality.

The efforts to limit opium production, spearheaded by the United Kingdom, have to say the least been a dismal failure. It is estimated now that the area under opium this year — about 200,000 acres — is about 20 per cent higher than the last year, and may yield some 4,500 tons of opium.

While Europeans and the British worry about how much of this will hit their streets, one thing is certain: the transit countries — Pakistan, Iran, the Central Asian countries and Russia — will see an increase in the number of users with all its consequences. Sealing our borders or attempting to seal them is essential even on this account, and Mr Kasuri may wish to discuss how anti-narcotics trafficking can be heightened.

The writer is a former ambassador of Pakistan.

THE framers had incorporated in the Indian Constitution several flexible devices (till their amendments in 2000) for the devolution of revenues from the centre to the states.

These devices were: (i) duties like stamp duties and duties of excise on medicinal and toilet preparations, which are levied by the Union but are collected and appropriated by the states;

(ii) taxes levied and collected by the Union (like duties in respect of succession to property, estate duty, terminal taxes on goods and passengers carried by railway, sea and air, taxes on railway fares and freights, taxes other than stamp duties on transactions in stock exchanges and future markets, taxes on the sale or purchase of newspapers and on advertisement published therein, and taxes on the sale or purchase of goods other than newspapers;

(iii) taxes on income (not including corporation tax) other than agricultural income. have to be, compulsorily shared between the Union and the states; (iv) Union duties of excise may be, if the parliament by law so provides, shared between the Union and the, states; (v) grants-in-aid; (vi) discretionary grants; and (vii) coordination of public borrowing and central loans to the states.

The terms of reference of almost all the commissions, right up to the eleventh, were, more or less, on the same lines viz the distribution between the Union and the states of the ‘net proceeds’ of taxes, which are to be or may be divided between them under the Constitution and the allocation between the states of the respective shares of such proceeds; and the principles which should govern the grants-in-aid of the revenues of the states out of the consolidated fund of India, and the sums to be paid to the states, which are in need of assistance by way of grants-in-aid of their revenues.

Soon after the publication of the notification appointing the commission, a press note is issued by the commission inviting the general public to offer its views on the terms of reference and other issues before the commission. As the tenth finance commission (for 1995-2000) wrote: “In response, close to two hundred memoranda were received by the commission. Besides, a number of individuals and organization met the Commission”.

Letters are addressed to members of parliament, members of state legislatures, vice-chancellors and heads of economics departments of the universities, leading economists, editors of economic journals and newspapers, inviting their views on the task entrusted to the commission. Normally the chairman writes letters to the chief ministers of the states, and various other eminent persons, seeking their views on the terms of reference.

The member-secretary writes letters to the chief secretaries of the states and secretaries of the Union government to give their views on the terms of reference and on any issue, pertaining to their ministries and departments. The state chief secretaries are requested to send their forecasts of the revenue receipts and expenditures for each of the five years, being covered by the commission. Similarly, he writes to the ministry of finance to furnish to the commission with forecasts of revenues and expenditures for the said period, indicating the divisible pool of income tax and share in other central taxes and duties likely to accrue to the states during this period.

The ninth finance commission (for 1990-95) observed: “The Commission attached great importance to its detailed interaction with the State Governments. The Commission further felt that it would benefit from consultations with experts in the field of public finance and economics... This was followed by another meeting ... with the State Finance Secretaries and representatives of the Union Finance Ministry in which certain conceptual and methodological issues relating to the normative assessment of receipts and expenditures for the period 1990-95 were discussed.

“The Chairman wrote to all the State Chief Ministers and some eminent economists ... requesting them for their views and suggestions about the feasibility of formulating a suitable composite index of backwardness. With a view to bringing greater clarity on some of these issues, meetings were held with economists and experts .... We also convened an all-State Finance Ministers’ meet ... to involve them in the examination of some of these important issues and to seek their advice and guidance before finalising our views ...”

Continuing the Commission wrote, “The Commission was able to visit almost all the States at least once during the entire term ... We found visits to the States of immense value specially because of its open and free discussions with the State Chief Ministers, their Cabinet colleagues and officials. During these visits, the State Governments also arranged some field visits and we could avail of the opportunity to gain first hand knowledge of the ground conditions and other factors affecting delivery of social and economic services, and consequently expenditure needs of the States.

“These discussions and visits enabled us to have a better understanding and appreciation of the problems of the States. During these visits to the States, the Commission also held some useful meetings with leaders of the Opposition, Members of Parliament, Members of State Legislatures, representatives from Chambers of Commerce and Industry, and Federation of State Employees, economists and other eminent personalities”.

Further, the commission stated: “The Commission had useful round of discussions with the Secretaries incharge of various Ministries and Departments of Government of India. This gave us valuable insight into the perceptions of the Government of India on several issues having a bearing on the resources of the Centre”.

The tenth finance commission further elaborated that while the Commission had a round of discussions with representative interest groups including Union and state ministers, members of parliament, leaders of the political parties, chairmen and senior office-bearers of the chambers of commerce and industry, chiefs of public sector organizations, leaders of trade unions and of employees’ association, agriculturists, agricultural experts, economists, engineers, educationists, journalists and media persons, “the Member-Secretary had a series of discussions with the chief secretaries / finance secretaries, heads of departments and the senior officers of State Governments. These discussions were very informative and useful to the Commission in its deliberations”.

The same commission observed, “The Commission had a meeting with the Governor of the Reserve Bank of India. In addition, meetings were also held with Member Secretary, Planning Commission, and secretaries in the Union Ministries / Departments of Power, Surface Transport, Textiles, Fertilizer, Education, Rural Development, Defence, Home Affairs, and Chairman and Member (Traffic) of the Railway’ Board. Discussions were also held with the Finance Secretary and Secretary (Expenditure) along with the Chairmen of the Boards of Direct Taxes and of Excise and Customs. We had a detailed discussion regarding the financing of calamity relief expenditure with the Relief Commissioner in the Ministry of Agriculture; and representatives of State Governments.”

All the Commission requested the controller and auditor-general to issue directions to accountants-general of the states to provide critical appraisal of state finances and to assist the commission during its visits to the states.

For the first time, the eleventh commission was required to review the state of the finances of the Union and the states, and suggest ways and means by which the government, collectively and severally, might bring about restructuring of the public finances so as to restore budgetary balance and maintain macro-economic stability. The commission held consultations with the economists and economic administrators to define the scope of this particular term of reference for purposes of making recommendations.

Further, keeping in view the terms of reference on local bodies, the eleventh commission constituted two advisory groups — one on panchayats and the other on municipalities. The commission held meetings with the advisory groups to delineate and define the scope of the terms of reference in regard to rural and urban local bodies. Another group on Defence was constituted to have an idea of the security environment and the needs of defence.

The duration of the Finance Commission has varied from twelve months in the case of the first commission to thirty months for the ninth and tenth commission. The eleventh commission took twenty-four months to complete its work. It was this commission which recommended that the finance commission required a minimum of two and a half to three years for formulation of its recommendations and preparation of report.