| 24 February 2004 | Tuesday | 03 Muharram 1425 |
A pyrrhic victory?
The Peshawar meeting of the National Finance Commission (NFC) has remained largely inconclusive, but seems to have ended on an optimistic note, with Finance Minister Shaukat Aziz and the provincial finance ministers hoping to reach a consensus by March 31 when the final award is expected to be announced.
Clearly, the federal government is not prepared to accept the provincial demand for sharing the revenues on a 50:50 basis. However, Islamabad seems to be willing to increase the provincial share to 45 per cent from the present 37 per cent.
The 45 per cent share will include the existing subventions and grants being given to backward provinces and also the amount collected under sales tax meant to go directly from the provinces to the local bodies.
On the other hand, the provinces themselves have still to come to some kind of understanding on the question of distribution of the divisible resources allocated to them by the federal government.
At present these shares are determined on the basis of population to which Balochistan, territorially the largest but economically the poorest province of the country, objects. Even the NWFP, which is better off than Balochistan, does not agree with this formula.
For its part, Sindh wants weightage to be given to a province for its revenue collection while Punjab sticks to demand for population as the sole criterion for the distribution of resources.
Let us first take the issue of the unanimous demand of the provinces for a 50:50 basis for sharing the revenues with the federal government. On the face of it, this is a justifiable demand.
The provinces do need more resources to tackle the heavy backlog that has accumulated over the years on the socio-economic development front. The federal government must realize this, rationally cut down its size and spendings and make more money available for provincial development needs.
It should have curtailed its activities a long time ago. It was perhaps in the early 1990s that the federal government had launched a plan to disband the overlapping ministries and hand over a number of responsibilities to the provinces.
A number of practical proposals were put forward in this respect, but none of these have so far been implemented. So, the situation today is that the federal government is still overloaded with powers and responsibilities many of which should rightfully be with the provinces.
It will, of course, take some time for the federal government to jettison these. Until that happens, it will not be practical to expect the federal government to part with the resources needed to run the relevant ministries and departments.
On the other hand, while the demand of the provinces is genuine for accepting a 50:50 formula, their own absorption capacities, it is believed, are still not adequate enough for them to be able to use all the additional resources that may fall to their share under a revised formula of their expectation.
Even at present, for some years, there have been instances of allocated resources remaining unutilized and being returned to the centre at the end of the financial year.
So, while the federal government tries in the coming years to curtail its activities and jurisdiction and restricts itself strictly to what has been given to it under the Constitution, the provinces should try to improve their resource utilization capacities.
The same is true of the emerging local governments. They too are still in an embryonic state and would need some years to develop their capacities to meaningfully utilize all the resources allocated to them.
Next, the issue of distribution formula among the provinces too needs to be seen in the same light. Balochistan does need more because of its large territorial expanse, so one should not oppose its demand for special consideration.
However, the absorption capacities of both Balochistan and the NWFP are too feeble at the moment. While making allowances for area and poverty in the new formula, one should not press the two considerations beyond certain limits so that the share of Punjab or Sindh is not seriously affected thereby.
The demand of Sindh about revenue collection as a major criterion for allocation of resources may not be acceptable to other provinces although it does have a strong case for weightage in the matter of resource allocation on grounds of underdevelopment and rural poverty and unemployment.
At any rate, both at the political and administrative levels the federal government must make serious efforts to iron out the differences that exist between it and the provinces and among the provinces themselves on basic issues of sharing resources, criteria, weightage and so on before the next - and possibly final - round of talks comes along.
However difficult and complex the task may seem, given the right kind of approach and a spirit of give and take, a consensus on the next NFC award can certainly be worked out well within time for the award to be ready by March 31 as expected by the finance minister.
A pyrrhic victory?
As was expected, religious hard-liners have triumphed in the Iranian elections. Even though full results are not yet available, reformists have been able to win only in 40 of the 194 constituencies whose results have so far been officially announced.
What helped the hard-liners was a relatively high turnout. Pro-reform voters chose to stay away from the polling booths because they thought the clerics had queered the pitch for them by a mass disqualification of reformist candidates.
In the general election in 2000, a large turn-out - estimated at 60 per cent - had helped the reformists capture two-thirds of the parliamentary votes. As against this, the estimated turnout of 47 to 52 per cent on Friday helped the hard-liners sweep the polls and re-establish their hold over the country.
The big problem for the hard-liners will be to make the world believe that the elections were fair and transparent. One example of pre-poll manipulations was the banning of two reformist publications and the outlawing of a pro-reform party.
No wonder, the announcement of election results was followed by violence in some constituencies where people refused to believe that the victory margin for certain conservative candidates could be that big.
The election results will only sharpen the existing political polarization in Iran and make President Mohammad Kahatami's task even more difficult. Elected in 1997, Mr Khatami succeeded in giving Iran a new face.
That the country was able to break out of its post-revolution isolation went largely to Mr Khatami's credit. He paid special attention to improving Iran's relations with its Gulf neighbours and struck a personal relationship with Saudi leaders.
Helped by a reformist parliament, Mr Khatami has also introduced a number of progressive laws that have liberalized the cultural scene. His re-election in 2001 was a vote of confidence in his reformist policies. However, Mr Khatami also annoyed people on both sides of the divide.
While the conservatives abhorred him for his liberalism, the impatient reformists thought he had been too slow in pushing forward the reform agenda.
Now, with the clerics having recaptured the Majlis, Mr Khatami, most observers believe, will be a lame duck president till 2005 when his term ends. A constant tussle between him and the conservative parliament will only add to Iran's woes and shut the door tighter on socio-economic reforms which the country badly needs.
The election results will deepen the polarization between the two sides. More unfortunately, this comes at a time when Iran is caught in a foreign policy crisis over the nuclear issue.
The manipulation of elections has seldom helped manipulators. What the clerics have done is to block the road to the gradual liberalization of Iranian politics. If normal democratic outlets for dissent are not available, an underground counter-revolutionary movement may develop. That will hardly serve to promote Iran's political advancement.