Financially starved development

The international donor community wants the Pakistan government to follow up its higher economic growth targets for the coming fiscal years with adequate financial allocation, starting with the next financial year that begins on July 1.

While the government is preparing to raise its public sector development outlay from the current year's Rs. 160 billion to Rs. 200 billion in the coming financial year, international financial agencies have said the allocation should be raised to Rs 250 billion - a target which the government had set for the fiscal 2006.

The World Bank, the Asian Development Bank and the International Monetary Fund are of the view that such a substantial increase in allocation is imperative to achieve the six per cent economic growth the government has set for itself for the coming year.

While the government expects a growth rate of six per cent this year in view of the improvement in economic indicators, the Asian Development Bank puts the growth figure at 5.5 per cent and next year's growth at 5.8 per cent.

The World Bank's Global Development Finance Report 2004 projects an economic growth rate of 7.2 per cent for South Asia after 6.5 per cent rate in 2003. International finance agencies do not want Pakistan to lag behind other South Asian countries or only set high growth figures targets without making adequate financial provisions.

On their part the financial agencies have offered to help Pakistan with larger loans. The World Bank, for example, has offered to assist Pakistan with Rs 250 billion for its power sector development over a period of five years.

For its part, the government is coming up with larger and more ambitious development plans without assuring itself of adequate resources. For example, it is preparing a contingency plan outside the normal budgetary funding to kick-start some mega water projects over the next five years.

This will cost Rs. 200 billion over five years or Rs. 40 billion on an average annually. Then there is the 10-year Perspective Plan for Water and Wapda's Vision 2025 which would need another Rs. 600 billion.

That means the country has to be ready for a big borrowing binge. How well the country is prepared for such massive spending and how ready it is to pay the political cost of such heavy borrowing remains to be seen.

Another issue of worry is how well the funds will be used and whether the promised water will actually be delivered. How much of the country will go under water and how well the affected people will be resettled also remains to be ascertained.

Immediately, the government is not in favour of pumping Rs. 50 billion more into the monetary system as that can disturb the macro-economic stability achieved after considerable effort. Pumping in Rs. 50 billion more through the annual development plan could aggravate inflation.

But the view of the World Bank and other donors cannot be brushed aside, particularly when they are ready to back their suggestions with more financial assistance. They want more government allocations for poverty alleviation and employment generation as well.

But the most pertinent question is: can the money be found without resorting to external assistance or domestic borrowing? Can that money be raised without bank borrowing or simple printing of currency notes by the State Bank of Pakistan?

The government had been saying it has been losing about Rs. 100 billion a year by subsidising ailing and corrupt public sector units. By now quite a number of such units have been privatized, although the two white elephants: WAPDA and KESC, remain with the government. How much of the money wasted each year has been saved?

A lot more money should be saved when more such mega projects are privatized, as planned, in the coming months and next few years. While the sale proceeds of the units go towards repaying the public debt, the large subsidies saved, as was the case from the Habib Bank and the United Bank, can now be used for the development of the country.

President Musharraf recently spoke of the Rs. 50 billion increase in revenues this year, which he proposes to use for raising the salaries of government employees.

To begin with, this increase has already been offset against the planned expenditure in a budget which has a deficit of four per cent of the GDP. And yet any saving in official expenditure can be used for the development of the country.

The government has a considerable saving on account of lower debt servicing cost now. The more costly loans of the IMF and the Asian Development Bank are being repaid on a priority basis.

This has been done also by raising fresh loans at a lower rates of interest. The debt servicing cost of not only foreign loans but also domestic loans has also come down. This saving should be considerable.

New loans are available to the government at home at far lower rates than before. Pakistan Investment Bonds which some years ago had a high yield of 16 per cent were last week sold by the State Bank of Pakistan at very low rates. The three year bonds went for a 3.73 per cent yield. The National Savings Organization is to lower its rates further for various saving instruments in July.

The Annual Plan Coordination Committee is expected to meet on May 20 to decide next year's Public Sector Development programme. It will also outline the projections for the following two years. The ministries have been asked to prioritize their schemes within each sector so that low priority schemes could be deleted in case of resource constraints.

And it is proper that near-complete projects should be completed and put to use at the earliest instead of being left incomplete for want of a little money or enough enthusiasm for the projects.

Increase in foreign aid is also forthcoming as the inflow of the three billion dollar US aid spread over five years is to begin from November 1 when the US Congress will approve the $701 million assistance to Pakistan for fiscal 2005.

The aid would include $302 million as military support, $300 million in economic support, $52 million for health and development spending, $40 million for narcotics control and $7 million dollars for anti-terror measures and border security.

Finance Minister Shaukat Aziz says that the US government would also write off a debt of $480 million in this financial year to lower Pakistan's burden to the US to $1.6 billion from $2.7 billion.

Higher development spending of the kind suggested by the international financial agencies is essential to develop the infrastructure of the country and to make Pakistan more attractive to foreign investors. Even our own investors will find it attractive to set up their units outside their cities if the roads are well developed and power and water is available where they set up their factories.

If Pakistan is to be the gateway to Central Asia and be at the crossroads between the Gulf countries and South Asian states, we need larger, stronger and more modern roads. And if Safta is to be a success and realise its full potential, we need a better road network.

All that would mean a tremendous boost to the construction industry and a large increase in employment, particularly of the large semi-skilled labour force we have.

The World Bank says that as a means of boosting revenues, the 170 income tax exemptions given to various interest groups should be withdrawn. Mr Vakil Ahmed Khan, Member, Direct Tax, says all these exemptions are being re-examined. What is certain is that some of these exemptions would go next year. It is easier for some of the exemptions to go if the tax rates are brought down as proposed, particularly in the corporate and banking sectors.

The fact is Pakistan is a developing country which spends too little on development. And what is actually spent is done in an ineffective and wasteful manner, without the projects delivering what they had promised and what their sponsors had assured us in return for the large sums invested.

In fact, while the current expenditure went on soaring, the development outplay went on shrinking despite the need for larger large allocations and despite the aid we received.

The largest claim on current expenditure is made by the debt-servicing which went on piling up as what was borrowed both externally and internally was used to repay and service loans. Then followed the defence outlay which went on increasing, though moderately. After that the large bureaucracy gobbled up what was left of the revenues and the heavy borrowing.

Now we are told the salaries of the government employees are to be raised by 25 per cent as President Musharraf wants to keep them in good humour, though we are told inflation this year is the only four per cent as it was last year. But when the President and the ministers and members of assemblies have increased their salaries and perquisites by over 100 per cent the government employees cannot be denied 25 per cent rise in salaries - the third under Gen. Musharraf because of the improved revenue position, though the large four per cent budget deficit is there waiting to be reduced to three per cent of the GDP.

In the 1980s, the average development outlay per year was 7.3 per cent of the GDP. Then it came down to 2.1 per cent of the GDP in 2000-01. Since then, there have been improvements under pressure from the international financial agencies. In 2001-02, the public sector development outlay was 3.5 per cent of the GDP and last year 4.1 per cent. Actual expenditure this year out of the allocation of Rs. 160 billion would be known only as the year closes when the money assigned may not be allowed to lapse and kept apart for the assigned projects.

Outsourcing troops the American way?

While the Indian and Pakistani soldier, or for that matter the Bangladeshi and Nepali, would do his utmost to earn a fair name for his country while on foreign assignment, specially a UN peacekeeping mission, he can turn into a different species while doing duty at home.

Even if we include among the foreign assignments the three or four wars that Indian and Pakistani troops have fought with each other, the record is still spotless. I am quite willing to accept the claim by the former Pakistan army chief General Aslam Beg, who told me in an 1997 interview that Indian and Pakistani troops were traditionally quite civilized with each other's citizens.

By and large, this does seem to be true because there are few charges that the two sides have violated the International Humanitarian Law, the so-called Geneva Convention. And yet the very same troops let loose on their own people, as in Nepal now, can act quite differently.

tend to turn into the most brutal face of the army you're likely to come across. The Pakistanis in East Pakistan in 1971 and the Indians in Kashmir and in the northeastern border regions are other examples of this.

If you look down the barrel of history you will find that the Americans, too, have had their share of fratricidal conflict along their domestic fault lines. The longer the American Civil War lasted, the more Union generals acted as if they were conducting a crusade to crush infidels.

In a letter to Henry W. Halleck in Sept 1863, the general in chief of the Union armies, Gen. William Tecumseh Sherman, wrote: "The United States has the right, and ... the ... power, to penetrate to every part of the national domain. We will remove and destroy every obstacle - if need be, take every life, every acre of land, every particle of property, everything that to us seems proper."

Halleck liked Sherman's letter so much that he passed it on to President Abraham Lincoln, who declared that it should be published. Sherman, in a follow-up to Halleck declared:

"I have your telegram saying the president had read my letter and thought it should be published. I profess ... to fight for but one single purpose, viz, to sustain a government capable of vindicating its just and rightful authority, independent of niggers, cotton, money, or any earthly interest."

In recent decades that quest has changed somewhat. The American soldier is still fighting to sustain a government in Washington "which is capable of vindicating its authority' but is doing so in remote corners of the world.

In the 1960s and '70s, it was Vietnam; in the '90s it was Serbia and Kosovo. Today it is Iraq. Graphic accounts of torture and sexual abuse of Iraqi prisoners by American and British troops are just trickling in. The only difference is that the torture chambers have been outsourced.

According to some reports, the whole business of torture is being carried out not by the regular troops, who are after all the honourable foot soldiers of the free world, but by private security agencies from the United States hired by the Pentagon.

It is to this blood-soaked landscape that South Asian troops are being wooed relentlessly by the Americans. Officially, India says it will consider the deployment of its troops in Iraq only under an explicit UN mandate.

In practice it has chosen to turn a blind eye to former servicemen who are already engaged in what can only be described as a patently mercenary enterprise.

Shockingly, with the full knowledge of senior officials in the army, Indian ex-servicemen are being drafted to serve under the US and British forces in Iraq, says Delhi's Outlook magazine in its latest issue.

"Though the Indian soldiers are not exactly part of the coalition force, they are attached to units and are responsible for guarding key installations like oil wells and refineries. The job in peacetime would not be seen as risk-prone. But given the ground situation in Iraq, it's fraught with danger," the report says.

As with the out sourced American mercenaries, India's security agencies and outfits run by retired officers do much of their part of the recruitment. There are no figures available on how many retired men are serving in Iraq. But the number could run into thousands.

For a retired soldier the money is attractive. The selected candidates are offered a two-year extendible contract. The salary, depending on rank, is anywhere between Rs 22,000 AND Rs 175,000 a month. In most cases, those drafted are insured for sums ranging from Rs 1 million to 5 million.

Board, lodging and medical attention are free. To fit the bill, it is essential to be below 55 years of age and medically sound. Officers who have taken premature retirement and are, therefore, relatively younger are the first choice for the recruitment agencies. Also in demand are those who have fought a war or served in insurgency-affected areas.

With 50,000 Pakistani troops due to be cashiered soon, the pool of potential players from South Asia is only expected to increase, not decrease. What remains to be seen is whether they would present a humane face, which they generally do on foreign missions, or the lure of lucre would turn them into callous mercenaries a la the American agencies operating in Iraq.

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TAILPIECE: The head of the Communist Party of India (Marxist, CPI-M) Mr Harkishan Singh Surjeet has a habit of becoming a key power broker in hung parliaments. He played this role usefully after the 1996 inconclusive polls when he got the Congress Party to support two Third Front prime ministers in a span of two years.

Of course his role is peppered with political pitfalls for the CPI-M, which fights the Congress as the principal opponent in the leftist bastions of West Bengal and Kerala.

So when Mr Surjeet was trying to refrain from attacking the Congress during a campaign tour in Kerala last week, he tried to balance his praise for communism with Nehruvian socialism.

This riled the local party satraps who were fighting a grim battle against the very party their leader was unwittingly praising. A typically communist damage control was enforced: in the simultaneous translation of Mr Surjeet's speeches into Malayalam, all positive references to the Congress were deleted.

Literary columns and newspaper columns

NA hekayaten na shekayaten (No tales, no complaints) is a collection of columns by a journalist who was a regular contributor to newspapers a decade back. Now partially disabled due to paralysis, the writer is otherwise in good health and cheerful as ever. She came to the Pakistan Arts Council on April 29 to attend the launch of her collection.

Daughter of the scientist Dr Afzaal Hussain Qadri, Rasheda Afzaal, later known as Rasheda Nisar following her marriage to journalist Dr Nisar Zuberi, is a prolific writer and a good talker. Never found lacking for words, she has the talent to lace her remarks with couplets from Ghalib or Faiz. Optimism is her hallmark, with nothing to complain or regret.

But what one would particularly like to point out is the care employed in the retrieval of Rasheda's columns by her family. Her mother had meticulously maintained clippings of her published writings.

Some years later it so happened that the box containing those papers was exposed to rain, but then her husband came to her rescue. The "Pandora's box", as Rasheda called it, was opened and the damp clippings pasted on rough paper to dry out. Rasheda's brother and her sons also joined in the salvage mission. Thus, piece by piece a manuscript was manufactured for publication.

Not many writers are fortunate to have such support in the keeping of manuscripts, letters, papers and other such valuables. These things are, in many households, treated in an indifferent manner, if not with contempt and disdain.

Second-hand books, some of them quite invaluable, are found on the footpaths, testifying the treatment they were given after the ill-fated owner was no more.

Dr Tahir Masood, head of the mass communications department at Karachi University, spoke at the launch of the book and complained that columns now being written had lost their literary flavour.

He recalled the names of Ibn-i-Insha, Tufail Ahmad Jamali, Ibrahim Jalees and Nasrullah Khan whose columns were relished like literary pieces. His other complaint was the technical quality of most columns. One can no longer draw a line between a column and an essay, he said.

Prof Sahar Ansari was even more critical when he said that the columns published these days did not reflect social life and its changing shades. They are based mostly on political quibblings, and little else.

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Poet and critic Sarwer Javed presented his collection of literary essays Mata-i-Nazar last week. Dr Peerzada Qasim was in the chair and the speakers included Hijab Abbasi, Afaq Siddiqui, Dr Wiqar Zuberi and Shah Mahmood Syed. Haleem Sharar did the compering.

For years known as the 'angry young man' of contemporary literature, Sarwer Javed was praised by Peerzada Qasim and Prof Ansari for his poetry. He had closely studied the changes occurring in different periods and annoyed many for calling a spade a spade.

Influenced by the progressive movement in the 50s, he started writing poetry and his many critics have yet to decide whether he was at his best in prose or in poetry.

At the launch of his book, Sarwer Javed declared that he would confine himself to prose which was the subject of the evening but, as luck would have it, the electricity went off.

So, in those dark moments, only poetry could help him. Power was restored after his poetry recital and the conclusion of the presidential discourse. Javed has rejected many 'progressives' for compromising with the ruling power.

But he has respect for his seniors, whether progressive or not. He has written in particular praise of Tabish Dehlavi and Jaazib Qureshi.

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As workers celebrated May Day by holding a well-attended rally at the Karachi Press Club, writers met at Irteqa on Sunday to discuss their role in the promotion of the working class movement.

Mr Anwar Ahsan Siddiqui, poet-fiction writer and columnist, was the main speaker. He disagreed with the common belief that the progressive movement had started in 1936. Karl Marx gave a scientific explanation for social development and the struggle between the classes, but the desire to build a society based on equality and justice, free from want and oppression, was always a human concern, Ahsan Siddiqui said.

He gave the example of Buddha whose burning desire was salvation of the people from want and hunger, death and destruction. But he could only find salvation in nirvana, meditation in isolation.

Human knowledge and thought had not till that time developed to an extent where one could look into the contradictions present in society and determine their causes.

All literary writings and poetry reflect the creative mind of writers and poets. What the progressive writers did was to analyze the causes of social change, and translate the urges of the working classes into their writings and on film and the stage.

Siddiqui quoted the example of Iran which had a great literature inherited in the form of long verses and dastaans portraying revolutionary thought. Among those who spoke on the occasion were Saba Ikram and Wahid Bashir.

While Saba, a modernist in his verses, supported Anwer Ahsan Siddiqui, Wahid Bashir spoke about the misery of the working people in the face of an unjust economic order and the growing menace of globalization.

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Noted critic, poet and writer Shamsur Rehman Farooqui during his short stay in Karachi had a very busy day on April 28, the day he was flying back home. He was welcomed by the Bazm-i-Adab-o-Saqafat and the Irteqa Adbi Forum with Dr Mohammad Ali Siddiqui in the chair.

Shamsur Rehman Farooqui is known for raising controversies and inviting unconventional opinions. Mr Jamal Naqvi and Prof Riaz Siddiqui both recalled in their comments that Shamsur Rehman had the courage to differ from Hasan Askari, a big name in literature, and also challenged Firaq Gorakhpuri.

Having worked extensively on the literary history of Urdu and its classics and dastaans, Farooqui said that literature carried an element of love for humanity and the two could not be separated. In reply to a question, he said while literature in the West mainly dealt with the fate of individuals, our (Urdu's) literature encompassed the entire society.

In reply to another question, he said there was no guideline to the genre of literary criticism; it depended on the knowledge and good sense of the critic. Farooqui expressed the opinion that humour and satire were genres 'imported' from elsewhere, but he accepted their strength and utility. He contradicted the belief that the Urdu script was undergoing a change.