| 22 April 2004 | Thursday | 01 Rabi-ul-Awwal 1425 |
What a U-turn
Killing Rantissi and peace
Newspaper headlines these days are all complimentary to the government and infuse a great deal of optimism for the future. Most of them, however, are pronouncements by top officials of the state, led by finance minister Shaukat Aziz.
Aziz predicts economic growth this year to be 5.8 per cent or more, instead of the earlier target of 5.3 per cent. He claims that all macro-economic targets for the year have been achieved, and that too before the end of March.
Aziz has also told the IMF review mission, which was here to approve the last tranche of the IMF's Poverty Reduction and Growth Facility (PRGF) of $244 million, that Pakistan would go along with the IMF "even without a new funding programme."
This alignment is essential to obtain adequate assistance from the World Bank, Asian Development Bank, major donors and to attract foreign investment and raise large foreign loans easily.
Pakistan's economic growth has been found satisfactory by the Economic and Social Commission for South Asia and the Pacific (ESCAP), although it achieved a growth rate of 5.1 per cent in 2003 compared to 6.6 per cent an on average by the SAARC countries plus Iran and Turkey. ESCAP is hopeful of a better performance by Pakistan in 2004 and thereafter as a result of the sustained economic reforms.
For its part, the Asian Development Bank has projected a growth rate of eight per cent in the medium term for Pakistan if the present pace of investment is accelerated and the government spends more on the public sector. It wants the private sector to play its role of an engine of growth.
And Dr. Ishrat Husain, governor of the State Bank of Pakistan, says the public sector development outlay next year would be Rs. 200 billion against Rs. 160 billion in the current year and Rs. 100 billion last year.
The vice-president of the World Bank for financial sector operations, Cesare Calari, is even more effusive in his praise. He says that Pakistan's financial sector reforms are "world class" and have made the financial sector very bouyant.
The government has been able to reach its revenue target of Rs 351.7 billion for the first nine months of the current financial year, and the Central Board of Revenue is confident of reaching the full annual target of Rs 510 billion for the fiscal year 2004. On that basis, it has targeted a revenue of Rs 566 - 570 billion for next year which exceeds the usual increase of 10 per cent in the revenues annually.
But the World Bank and the IMF are prodding the government to spread the tax net wider and come up with new taxes and raise more revenues to fight poverty and finance development, particularly in the neglected social sector. But the government is hesitant. It does not want to overshoot and fail, as had happened until 2001-2002.
New chairman of the CBR, Abdullah Yusuf, wants to bring a friendly approach to the tax-payers and prefers a business friendly budget which can promote investment. Large investment and higher turn-over could mean larger revenues in the manner the current mini-boom in the industrial sector has now contributed to larger revenues.
The stock exchange boom along with the higher profits of the listed companies is also helping to boost revenues of the government. And the larger imports to feed the industrial boom have also resulted in higher customs revenues for the government.
The Privatization process has also been making steady headway and the sale proceeds of the public sector companies help reduce the public debt and through that, the heavy debt servicing burden of the government.
The Privatization Commission has rightly decided to reduce the number of shares it will offer to the public hereafter to 500 instead of 1,000 so that a large number of people can buy the shares instead of only the richer among them. There will now be less number of applicants for shares who are disappointed than before.
The foreign exchange reserve is a high 12.6 billion dollars, although the home remittances are coming down, as predicted earlier.
In view of such positive headlines day after day, an increasing number of complimentary certificates from abroad on the merits of the economic reforms, the readiness of international financial institutions to provide larger funds for development and the vastly improved budgetary performance, the people are expecting relief all round from the government. Of course, the finance minister had promised to provide a number of relief measures through the new budget.
But at the same time, he has not been able to reach an agreement with the provincial governments on the issue of sharing the federally collected revenues. The Centre has offered upto 47 per cent of the total revenues, in place of 37.5 per cent as at present. But the provinces demand 50 per cent with some other lesser stipulations.
Meanwhile, even the chairman of the Senate, Mohammad Mian Soomro is talking of lower tax rates and less number of taxes. So he is being asked by more and more chambers of commerce to address them, although the budget is not the domain of the Senate.
Industrial investors are hopeful of getting a helpful package from the government which would include reduced taxes on import of machinery and raw materials, reduction of sales tax to 12 per cent from 15 and lower electricity rates for industry.
The first textile city is to come up at Port Qasim which is expected to increase textile exports by 1.5 billion dollars and provide employment to 80,000 persons. How much of fiscal incentives this city as well as other textile cities are to be given remains to be seen.
They would need large assistance to help them withstand the competition around the world following the end of the textile quotas by the end of this year. Meanwhile the number of income tax-payers in the country appears to have come down greatly - to 1,017, 465 but the volume of the tax paid has gone up by 33.5 per cent.
How is the lower income group going to benefit from the budget? If the threshold for income tax is raised above Rs 80,000, as the finance minister has promised before, the number of tax payers would go far below one million and that may seem ridiculous.
The relief the people would get from raising the threshold will be very small in terms of money. Hence the lower income groups and the middle class would be more interested in low real inflation and increasing employment avenues. But inflation is going up and up despite official figures to the contrary, which no one takes seriously.
If inflation is as low at it is officially represented in recent times the salary and perquisites of the President, Prime Minister, and the ministers and members of Parliament would not have been more than doubled.
Despite the enhanced expenditure on them we have very large provincial cabinets and the expansion of the federal cabinet has been delayed for a while. The official target was 4 per cent inflation during the current financial year, but in the first nine months of the year ending March 30 it went up by 3.78 per cent, says the Federal Bureau of Statistics. In the same period during the previous two years inflation went up by 3.32 per cent an 3.39 per cent.
The Sensitive Price Index (SPI) during the twelve months of the year ending March went up by 8.74 per cent and wholesale price index in the same period by 8.74 per cent. And consumer price index in the 12 month period went up by 5.33 per cent.
In India the finance minister goes by the wholesale price index which is far more reliable than the two other retail indices. But in Pakistan the Consumer Price Index is preferred by the government which is not reliable certainly the manner in which it is computed.
On one side the people get very little for their savings. In fact, the banks penalise the savers for lower than the stipulated deposits, and then they get very little on their deposits, as low as half a cent on their savings accounts.
Now the government wants the capital market to come up with more and more of mutual funds to help the low income groups. We have to see how many of them come up and pay goods dividends to the unit holders. And how much the sponsors of the funds spend on themselves.
The American mutual fund industry is full of scandals. There has been too much spending by the sponsors of such units on themselves and their families. The government and the securities and Exchange Commission have to be on guard to prevent such abuses.
Prices of too many items have been going up. They begin with atta and meat and end up with POL. Petrol prices have risen by 8.5 per cent in the last 14 months and diesel by 13.5 per cent. Petrol prices went up by 19 times in the period and fell ten times. If the rise was in rupees per litre the fall was usually in paisas. Last week petrol rose by 80 paisa per litre.
As a result bus, taxi and rickshaw fares have been going up and up and hurting the people. And they don't come down when POL prices come down. Such items do not seem to figure in the consumer price index which is calculated in a peculiar, inexplicable way.
If the ministers and officials who are a part of the policy-making apparatus were paying the POL bills out of their pockets they would have known the real impact of the inflation. But they are too insulated and so have an academic approach to inflation.
A lot of people in the city have to buy water supplied through private tankers. Their cost too has been going up and up. Several middle class persons say they spend far more on buying water than on paying income tax. They would be too happy to pay more income tax if they were getting the water at official rates as supplied through the pipeline.
So we have two sides of the economic picture. The bright economy on the official side symbolised by the high foreign exchange tower and on the other side the woeful conditions for the poor and the middle classes.
The middle class is being eroded day after day and nothing positive is done to check that erosion. Hence the increasing corruption and crimes at one end and the rising number of unemployment suicides.
President Musharraf has asked the members of Parliament and the provincial assemblies to join in the struggle against poverty. Will the feudal lords and their ladies who pack the Parliament and provincial assemblies join in the fight?
Domestic violence is on the rise due to unemployment of the heads of the household or low wages. Will the assemblies set up their own task force to monitor the anti-poverty activities of the government and help the poor? Such vigilance all around is essential to make the government do more in this area and the officials to be more alert. The elected members have a duty in this regard and they should not fail because of their political pre-occupations or negativism.
What a U-turn
Tony blair was brilliant. Having contrived the most spectacular U-turn of his seven years as prime minister, he simply pretended that it had not happened. In his House of Commons statement on Tuesday he didn't even use the word referendum. He certainly didn't tell us what had caused him to change his mind, or if he had troubled to tell the cabinet.
The prime minister merely said that parliament should debate the new European constitution: "Then let the people have the final say." The final say? For months he has been telling us that it would be fatal for the people to have any say at all, never mind the final one. It was none of the people's business. They should get on with their own lives, instead of trying to do parliament's job for it.
Still, it was a better slogan than last week's war cry: "Let the people sod off!" Tories were, literally, slack-jawed, mouths hanging open like Homer Simpson spotting a case of Duff beer. They sounded like Homer, too. My note of their response reads: "Uh? Eh? Aah! Whoa! Unghh!" They were, almost literally, gob-smacked, as if someone had smacked their gobs and left them capable of emitting only low and painful grunts.
Mr Blair finished with the stirring words: "Let the issue be put. Let battle be joined!" He sounded rather less like Henry V than Ulrika kicking off a new series of Gladiators.
The Tories still could not believe it. They had started the session with such hopes. Michael Ancram looked deeply happy, but then he usually does, smiling at the punchline of a joke no one else has heard.
Oliver Letwin abandoned his usual tight-lipped anxiety and beamed. Even Michael Howard had forgotten his serious scowl and put on his welcoming "Come to me, my children of the night" smile. They became even more cheerful when Mr Blair began a long schtick about how Europe was misrepresented in the media.
No, we wouldn't have to hand over tax policy. Or foreign policy. "All this and many others, like the hardy perennials about being forced to drive on the right, Germans taking over our nuclear weapons, and no doubt the shape of our bananas too!"
Tories were furious at this torching of straw men. Mr Blair looked delighted at their response. I half expected him to continue, "and as for the suggestion that our cherished national dish will be replaced by frog's leg tikka masala..."
Having stolen the Tories' clothes as well as shot their fox, Mr Blair sat down. Mr Howard of course had only to shoot his clothes. Whomph! went the straitjacket of a parliamentary vote. K-pow! went the hat the prime minister was obliged to eat.
The shirt he'd bet on no referendum was peppered with holes. The sock he had put into further discussion was now just shreds of wool and nylon. All that was left was: knickers to you!
Mr Howard, of course, compared the prime minister to the Grand Old Duke of York, who marched his men up the hill then marched them down again. But if they'd had Grand Old Duke of York's question time back in 1799, and if Mr Blair had held that title, he'd have had no trouble at all.
"We have our feet firmly on the ground!" he would have said. "We always insisted on a level playing field, and that is where we are. "Unlike the opposition, our heads are not in the clouds." And he stomped off, as if wondering what all the fuss was about.
-Dawn/Guardian Service
Killing Rantissi and peace
Last Saturday Israel assassinated Abdel Aziz al-Rantissi, successor to the also assassinated Hamas chief Sheikh Ahmed Yassin. One could fill an infinite space condemning Israel and Prime Minister Ariel Sharon.
One could point out that targeted assassinations are illegal, tantamount to state terrorism, that they are detrimental to the interests of Israelis - for they will fuel Palestinian anger and provoke more suicide attacks against Israeli citizens, and that overall they take the Middle East still further from peace and towards more conflict.
These consequences have been pointed out - and proved correct - on countless such previous occasions. There is nothing to be gained by repeating them. For the murder of Abdel Aziz al-Rantissi (and previous actions) by the Sharon government prove that Israel is not listening.
It has lost all sense of reason, of rationality, even the ability to differentiate what is and what is not in its own interest - and killing Rantissi clearly is not. Israel under Sharon is a government and a country that will always, automatically, seek to crush the Palestinians. This is a given: it will not change.
So let's not waste column inches condemning Israel. Focus instead on those who provided the enabling environment for Israel and Sharon to carry out their anti-Palestinian agenda: focus instead on America.
For the timing of Israel's latest targeted assassination was no accident. It came days after Ariel Sharon went to Washington, and got the presidential seal of approval on his unilateral "disengagement plan" for the occupied territories. That seal was also the green light to assassinate Rantissi.
The "historic" Sharon plan entails the withdrawal of all Israeli troops and settlers from Gaza. But before anyone welcome this as a sign of Israeli compromise, the plan also entails massive Jewish settlements in the West Bank being retained. The removal of some 7,600 settlers from Gaza is to be balanced by more than 100,000 settlers keeping the land they occupied in the West Bank.
There is something clearly amiss with the math here - but not to George Bush. "In light of new realities on the ground ... it is unrealistic to expect that the outcome of final status negotiations will be a full and complete return to the armistice lines of 1949."
Follow this argument through to its logical conclusion, and it would be "unrealistic" to reverse any occupation of land, anywhere in the world. When Saddam Hussein seized Kuwait we should all have accepted the "new realities on the ground" and let him keep the country.
George Bush senior did not accept that argument, nor do we - and nor should Bush junior. That he has is yet another sign of his inability to see the world through the prism of law, rationality and principle. In other words, it is yet another sign of his seeing the world through the eyes of Ariel Sharon.
Note that by agreeing to let over 100,000 Jews keep their settlements in the West Bank, Bush is in effect ending any chance of a viable Palestinian state. A moth-eaten West Bank, cut through by massive Israeli settlements and divided from the Gaza Strip by Israel proper, cannot be called a state. Such a Palestine will be a bantustan. Such a Palestine will never satisfy the aspirations of the Palestinian people, and hence will never bring peace.
The right to return of Palestinian refugees is - like Sharon's drive to crush the Palestinians - a given in any negotiations over the future of the Middle East. A people thrown out of their homes and off their lands by occupation demand and have the right to return to those lands.
No one has the authority to deny them that right: no one can rule that Jewish occupation of Palestinian land is a fait accompli and hence irreversible. No one, that is - except George Bush: "It seems clear that an agreed, just, fair and realistic framework for a solution to the Palestinian refugee issue as part of any final status agreement will need to be found through the establishment of a Palestinian state, and the settling of Palestinian refugees there rather than Israel."
How can a deal in which one of the two main parties is not even consulted be described as "agreed"? How can a deal in which occupation by force is rewarded and the victims punished, be described as "just" and "fair"? And as for the last, is it "realistic" to suppose that an imposed, partisan and skewed ruling will lead to permanent peace?
The extent to which the American president conceded Jewish demands in Washington is unprecedented, even for a country whose leaders have uniformly exhibited a bias towards Tel Aviv. Carter, Reagan, Bush senior, Clinton - all supported Israel over the Palestinians, but none dared to unilaterally hand land in the West Bank to Jewish settlers, or deny the right of return to Palestinian refugees. George W. Bush has plumbed new depths in American bias.
Any number of factors can account for Bush's extraordinary statements: a fundamental ignorance of foreign policy, and a fundamental incapacity/unwillingness to redress that ignorance; a disastrous war in Iraq that leaves the president desperate for some foreign policy achievement (though it is arguable whether pouring petrol on a burning fire can be considered an achievement); the desire to court the powerful Jewish American lobby in the run-up to elections and in the face of mounting domestic criticism; or, simply, the age-old American bias towards Israel. There are many factors, but none of them is redeeming. None can excuse the folly of Bush's actions.
Condoleeza Rice claims that the administration was not informed about the Rantissi assassination. This is extremely difficult to believe. Even if true, though, the statements made by George Bush cannot have been interpreted as anything but a green light to kill the Hamas leader.
When you have already endorsed illegal occupation, when you have already sanctioned the denial of basic rights to the Palestinians, you don't need to spell out your approval of targeted assassinations - that can be taken for granted.
Statements from the White House after Rantissi's assassination do little to dispel the suspicion that it was Bush-endorsed. Israel, we were told, has "a right to defend itself from terrorist attacks". It might as well have been the Israeli spokesman talking to the press.
The events of the last week remove all vestiges - or rather, all pretence - of American neutrality and honest brokership in the Middle East. Under this president, Washington and Tel Aviv speak as one.
The irony is that the Bush administration is the one power with the ability to control Israel: it is the one voice that Sharon has no choice but to heed. This unique influence carries with it a moral obligation to act.
George Bush cannot, as in the early days of his presidency, wash his hands of the Middle East and claim it has nothing to do with him. Even less can he throw his hat in with the Israelis. That would - that is, for it is happening - be a shocking abrogation of moral responsibility by the US government.
George Bush might not have ordered the helicopter attacks that killed Abdel Aziz al-Rantissi, but he is as responsible for it and its consequences ("rivers of blood") as Ariel Sharon.
Post-script: The icing on the cake came from Tony Blair: "The Palestinian Authority must show the political will to make the withdrawal from Gaza a success and to deliver on their roadmap responsibilities, especially regarding security." What "roadmap"?
In his knee-jerk support for anything coming from the White House, the prime minister obviously missed (or ignored) the fact that Bush's endorsement of the Sharon disengagement plan ripped up the roadmap. Mr Blair, "solutions" imposed without negotiations with the Palestinians - or consultation with the quartet partners - can hardly be called part of the roadmap.
iffatidris2000@yahoo.co.uk.