| 19 January 2004 | Monday | 26 Ziqa'ad 1424 |
Flight diversions
Iran's electoral crisis
The news that net investment in the National Savings Scheme (NSS) has fallen by 94 per cent in the first five months of this fiscal year is a cause for worry. It is obvious that owing to the decline in the rates of return offered by the scheme, a large number of people are turning to other avenues of investment, whatever of these there are.
As interest rates at which financial institutions lend money decline, the rate of return on saving schemes too is reduced. This is done so that people or institutions do not borrow money from banks only to invest it in government saving schemes to make a tidy profit. While there have been instances in the past where this has happened, the anomaly is easily checked with the reduction in the rate of return on the NSS.
The problem with the present massive lowering of return, however, is that it closes off another avenue of investment for people looking for some safe and secure instruments which also guarantee them a reasonable rate of return. Small investors are wary of the choices available to them.
The stock market is unpredictable, investment in foreign currency or metals is not a steady source of income and other instruments in the market are also suspect owing to the number of scams that the country has witnessed in the investment sector in the past two decades.
There have been reports in the past week, however, that some small investors have now turned to currency speculation by investing in Pound Sterling and the Euro. This is not an area in which people who have no experience or understanding of the intricacies of the world currency markets should engage in.
The worst hit in this rationalization of rates of return are widows and pensioners, many of whom have invested their life's savings in the NSS. The drop in the rate of return cuts deep into their invested savings. On the one hand, they have to deal with inflation and on the other the profits from money invested in the savings certificates continues to decline.
In the absence of a social security system, the government needs to make special arrangements for this category of people so that their rates of return are not affected. This can come in the form of higher than market rates for them. This would amount to a fraction of government expenditure provided adequate measures are taken to safeguard this special provision from misuse.
Another issue that the government needs to look at is the viability of the NSS itself after the reduction in rates of return. The government pays out over Rs70 billion as profit on these schemes. The recent sharp drop in the amount invested indicates that new savings are hardly meeting the profit pay out. Keeping this in mind, the government has to work on launching new and innovative schemes under the NSS to attract more investment.
Also, it should make the process of investing in NSS easier. This can be done by opening more savings centres or even by franchising this facility so that people in remote locations can benefit from it. It cannot be overemphasized that the culture of saving in Pakistan needs to be encouraged in every possible way.
Flight diversions
The episode with PIA flights coinciding with President Pervez Musharraf's address to a joint session of parliament on Saturday needs a fuller and more rational explanation than has been offered by the authorities so far.
The departure of a PIA plane carrying, among 200 other passengers, MNA Tehmina Daultana and the federal interior secretary to Islamabad was delayed at Lahore airport, then the aircraft reportedly remained stranded at Islamabad airport for nearly an hour, with passengers not being permitted to disembark, and then it was taken to Peshawar.
It arrived back in Islamabad after the president's address was over. Another PIA flight from Karachi to Islamabad was diverted to Multan and reached Islamabad behind schedule.
The official versions range from technical or operational reasons for the unusual flight patterns to a bomb hoax. One passenger on the Lahore-Islamabad flight has been quoted by our staff reporter as saying that first they were told there was some VVIP movement, then about an hour later the plane took off without the destination being specified.
Other reports speak of panic and confusion among the passengers. A journalist on board the flight has painted a similar picture of bewilderment. Ms Tehmina Daultana, who has acquired the reputation of being a rather flamboyant protester in the National Assembly, herself has charged that the flight was intentionally delayed to keep her away from the joint session.
The government says the presence of the interior secretary on the Lahore-Islamabad flight and other officials rules out any political motive behind the meandering course of the PIA aircraft.
The point is that grave doubts have been created about the issue. There were ordinary passengers on board who were put to much inconvenience and subjected to stress, including a sick child needing treatment.
If someone played tricks with the flights to please the president, it was stupid; one more opposition legislator joining the throng of agitating colleagues inside the assembly wouldn't have made much of a difference. If there was indeed a sound technical reason or a bomb threat, the government needs to issue a detailed statement to put rumours at rest.
Iran's electoral crisis
Ayatollah Syed Ali Khamenei's assurance that the Council of Guardians will review the cases of over 3,500 disqualified reformist candidates wishing to stand in next month's election seems to have been taken sceptically by the protesting MPs staging a sit-in in Iran's parliament.
They have refused to call off their protest, insisting they will do so only when the guardians' council has passed the candidature of at least the 85 incumbent MPs. The protesting MPs have received open support from President Khatami, Majlis speaker Mehdi Karoubi, and 27 of Iran's 28 provincial governors, who have said they will resign if the conservatives manning the guardians' council do not back down.
The council is generally believed to be under an obligation to follow the edicts of Supreme Leader Ayatollah Khamenei, who directly appoints six of its members from among the ulema. The remaining six are nominated by the chief justice - who also is directly appointed by Ayatollah Khamenei - and approved by parliament. The Iranian judiciary, however, is controlled by conservative ulema, which tips the balance against the reformists.
The political schism that has developed between the two clerical factions comprising Iran's leadership has stalled progress on issues related to public welfare - mainly, the reformist agenda. The reformists led by President Khatami enjoy an over two-thirds majority in the sitting Majlis, but that is not where the real legislative power resides according to the Iranian constitution. All legislation has to be approved by the guardians' council before it can become law, and that is where the reformist Majlis has often found its efforts frustrated.
This has largely acted as a debilitating factor for the existing system of governance, in which the reformists now fear losing public support - as was evident from the results of last year's local elections.
The changing regional and international environment demands that both conservatives and reformists come to a political understanding so that next month's election can be seen to be fair and free. Any political instability in Iran will only benefit the country's detractors.