06 June 2004	Sunday	17 Rabi-us-Saani 1425

KARACHI, June 5: The constant flow of good news of an economic take-off has been marred by a month long political downturn. The violence and strikes since May 12 bye-elections in Karachi has resulted in loss of many human lives and industrial output. It has been a source of much embarrassment to the Sindh government.

The call for a government of consensus with PPP on board was taken as a sign of political instability at the Karachi Stock Exchange. Share prices plummeted on Thursday but recovered somewhat the next day once the initial impression of immanent changes proved pre-mature.

Political instability and rule of law are major business concerns. The events in Karachi and their implications for political stability have to be seen in the context of inter- related issues of constitutional writ, rule of law and sanctity of commercial contracts. It is the right contacts that count for business in emerging markets but it is the commercial contracts that prevail in the developed markets. A congenial business environment requires rule of law. A civilized society is run by democracy.

In the current phase of constitutional "democracy," the first priority is to create stable institutions. And according to some speculations, the president may take off his uniform in exchange for a constitutional arrangement that he would appoint prime minister responsible to him and not the parliament. That may be one way to approach the issue of political stability but it may not be the most reliable leverage.

For the markets to function smoothly, the country should be rid of political breakdowns and pluralism be encouraged.

Normally, the economic boom yields rich political dividends if the representative democracy is allowed to function smoothly and the benefits of development are widely shared. So, step-by-step, the country must move towards majority rule and not be hamstrung by a coalition of wayward minority parties, inimical to each other, running governments. Perhaps, the policy makers are aware that the system that they have cobbled cannot work without democratic tolerance.

In a joint statement, President Pervez Musharraf and Prime Minister Mir Zafarullah Khan Jamali have observed that "Tolerance is at a low ebb and the peoples energy is wasted oninternecine fighting and trying to impose one's views by force on others. This intolerant attitude creates hurdles in the government's efforts to mobilize people to work unitedly to achieve the goals of social stability and economic growth and development."

What the president and the prime minister say is evident from the stalemate in the National Finance Commission. Both the previous military regime and the present coalition governments have failed to give the sixth NFC Award. The provincial governments lack the spirit of give and take and the will to strike a compromise based on equity and justice. Fiscal autonomy to the provinces is necessary to improve governance and boost socio-economic development.

Devolution which helps improve the delivery system is handicapped by political rivalries. A major issue is the tussle between provinces and the district governments that is retarding economic and social progress for the common man. On May 12 bye-elections, 12 people were killed, raising the spectre of violence in Sindh's politics.

In the 57 long years "we have not been able to weld our people together into a nation," says the joint statement of the president and the prime minister issued on Saturday through an advertisement entitled "Let's go back to basics."

A nation is welded by the will of its people (and not through an administrative fiat) expressed through a representative government and the rule by a majority. Government must be an expression of the aspirations of a nation's people to get their support and to energize them to work for socio-economic development whose benefit they equitably share. Sermons do not help.