| 27 July 2004 | Tuesday | 09 Jamadi-us-Saani 1425 |
It's convention season
Fahrenheit 9/11
Speaker's controversial decision: Appointment of leader of the opposition
Economists used to talking in terms of "on the one hand this, on the other hand that," have almost total agreement on one thing that trade is good for economic development and growth.
The theory behind this broad consensus is a simple one and is based on a system of production according to which people and the nations to which they belong produce goods and services for which they have comparative advantage.
Those who have some advantage to manufacturing a good or providing a service should produce beyond their own needs and export the rest. A country may have advantage over others because it has a certain kind of soil and weather pattern to grow, for instance, cotton.
This is why north Sindh and south and central Punjab do well in producing this crop. The amount of land, labour and water committed to the production of cotton results in output that is much larger than needed by the country's textile industry.
Which is the reason why in most years Pakistan is the second largest exporter of cotton in the world, after the United States. To produce beyond domestic needs helps Pakistan since it earns foreign exchange from exporting its surplus.
It also helps those countries that have large textile and garment industries but don't have the soil and the weather conditions to grow cotton. Some of the cotton Pakistan exports finds its way to Bangladesh after stopping en route in places like Hong Kong and South Korea.
These countries buy raw cotton from Pakistan, spin and weave it into fibre and fabrics and then export those to Bangladesh to turn them into garments. The reverse of this relationship also holds. Take tea as an example.
Pakistan is a tea drinking nation and the people drink so much of this beverage that the country is by far the largest tea importing country in Asia. Tea production needs a certain kind of soil, some elevation, a lot of rain and a lot of sunshine.
These conditions exist in India's Assam state, in Hangzhou province in China, in the highlands around Kandy in Sri Lanka, and in the uplands of Kenya. That is the reason why all these places do well in growing tea and why they are amongst the largest exporters of this commodity.
There was once a mistaken attempt made to grow tea in the hills around Abbotabad under the theory that self-sufficiency was better than dependence in almost all cases.
Trade based on the strict application of the concept of comparative advantage increases global welfare. It adds to global productivity since goods are manufactured, commodities are produced and services are provided by those who have the resources and the skills to do all of those things.
If trade was free - if, that is to say, goods, commodities and services moved from place to place without restriction - the world today would be a much richer place. But economic theory does not always translate easily and without resistance into practice.
It makes little sense for the states of North and South Carolina to continue to produce textiles. But these two states have large political clout which can be converted into public policy.
Even though the United States provided generous assistance to Pakistan after 9/11 it did not give it better access in textiles. The case against doing that had little economic logic but made some political sense.
The legislators representing these states were not prepared to have their constituents suffer job losses in order to help the low paid workers in Pakistan's textile towns. This was one example of politics distorting economics.
There are many areas in which politics does that to economics; three of the most egregious ones are arrangements that govern trade in garments and textiles, subsidies provided by the governments in America, Europe and Japan to their farmers and restrictions against the movements of workers, in particular from the developing to the developed world.
The Multi-Fibre Agreement, or MFA, that regulates global trade in textiles is set to expire on January 1, 2005. The MFA is a good example of the severe distortions that restrictions in global flow of goods can make to the world production systems.
The MFA allowed textile importing countries in the developed world to lay down quotas beyond which textile exporting countries could not export their products. The allocation of quotas was based on history; developing countries who were in the business were allowed to export their products at a pre-determined rate of growth.
When Bangladesh gained independence from Pakistan, it was allowed access to Pakistan's quota. It made little economic sense to partition the quota since Bangladesh did not have a textile industry of any significance to make use of this largesse.
The real reason for taking that step was to punish Pakistan for the way it had handled East Pakistan's demand for autonomy and independence. However, once Bangladesh was awarded a quota, countries such as Korea, Hong Kong and Singapore, that were now high wage economies, stepped in.
It made a great deal of sense for them to establish a new production capacity in Bangladesh which had great amounts of unutilized quotas. The East Asians, the South Koreans in particular, provided Bengali entrepreneurs with management and production training so that they could meet the standards demanded by importers in Europe and America.
The Bangladesh garment industry flourished and provided handsome dividends to the domestic economy. Tens of thousands of new jobs were created, a large number of them for young women.
With women now gainfully employed, and with the opportunity cost of their time increasing, in terms of real money, to a significant amount of earnings, it is not surprising that the country's fertility rate began to decline rapidly.
It was from a family's perspective a better choice to have women doing factory labour than spending bearing children and looking after them at home. The arrival of the garment industry, although the outcome of a deliberately introduced distortion in the global trading system produced by the MFA, had a number of beneficial consequences for Bangladesh.
There are, of course, risks associated with basing developments on distortion. If the MFA is phased out starting on January 2005, it would have a grim impact on Bangladesh.
With quotas gone, the country will no longer be able to compete with countries such as China, Egypt, India and Pakistan that are naturally competitive in this industry. Other cotton growing countries such as the former constituent republics of the Soviet Union in Central Asia - Uzbekistan in particular - will also, no doubt, enter this crowded field.
What should a country such as Bangladesh do in such circumstances? There are basically two options. It could plead for some special treatment even after the MFA regime expires.
The World Trade Organization, under whose auspices such a dispensation would have to be awarded, has a general provision that goes under the title of special and differential treatment (SDT).
Applied to the developing countries, these provisions are to be used to provide some relief to the pain that necessarily comes with any far-reaching programme of adjustment.
The elimination of the MFA is a major change in the trading regime of many parts of the developing and developed world. It is not inconceivable that once negotiations begin within the postponed Doha round, countries such as Bangladesh will seek protection against a rapid and painful process of adjustment through which they will have to proceed if the MFA is eliminated as promised.
The other approach, and from Bangladesh's perspective in the long-run a much better one, would be to obtain better access from its trading partners, in particular from those in the developed world, for the exports of the goods, commodities and services in which the country does have comparative advantage. The most obvious of these is services, the production of which requires abundant and skilled labour.
Like other South Asian countries, Bangladesh has a large and young population. It is, therefore, well positioned to do the type of "outsourcing" work for which India now has gained considerable reputation.
It is in this sector and in that of agriculture where the next great trade war will be fought. It will come in the form of a series of battles where developing countries such as Bangladesh, India and Pakistan will have to gain new ground inch-by-inch.
Are developing countries ready for this series of encounters? My reading is that so far they have not fully understood what issues are involved, where developed countries may yield some ground, and where they will fight long and bloody pitched battles.
Let us start with agriculture. The issue that received the most attention in this area is that of farm subsidies which have created serious distortions in agriculture across the globe.
This issue has two components. One concerns the trade in agriculture among developed countries, not just between America and Europe but also within Europe, among the expanded European Union's rich and not-so-rich states.
This is where the heavy guns have gone into action, firing across the Atlantic and across the plains of central Europe. Looking at where this particular battle stands, I would guess that the European and American trade ministers will reach an accommodation but outside the Doha round.
This they will do by making changes in their farm subsidy programmes. Rather than reward farmers for producing more they will give them subsidies to keep land out of production.
That way the famous butter and grain mountains of Europe will gradually diminish in size as will the ocean of milk that lies undrunk in America's mid-western states.
Grain, milk and butter are not the products in which the American and European farmers have comparative advantage. They can produce their vast output for the simple reason that they can throw a lot of capital into the production processes.
Heavy mechanization, almost indiscriminate use of chemicals as fertilizers and pesticides, use of expensive science to produce new varieties of grain and animals, and expensive processes to convert all this output into products that eventually reach the shelves of grocery stores require a great deal of money.
A fair amount of this money comes in the form of subsidies provided by the American, European and Japanese states. With the subsidy programmes changed to build a consensus of sorts across the Atlantic, the farmers in America and Europe will be moving into another part of agriculture where the farmers in South Asia, parts of China, and parts of Latin America have real comparative advantage.
The reference here, of course, is to such high value added agricultural products as fruits, flowers and vegetables and processed items based on them. It is the trade in these that could grow at rates considerably greater than the increase in the combined domestic product of the entire developing product.
The developing countries' combined GDP could increase by 4.5 per cent a year between 2005 and 2025 without a major structural change in trade in agriculture, particularly in that part of agriculture in which high value added crops begin to play a significant role.
If a level playing field is created in this aspect of trade, it could grow at a rate three times the rate of increase in GDP, or 13.5 per cent a year. This could lift the overall increase in GDP growth by a percentage and a half to 6.0 per cent a year.
Since this output will come from agriculture, where most of the world's poor are employed or are looking for work, concentrating increasing world trade in high value added agriculture would have enormous consequences for reducing the incidence of poverty.
It will take a great deal of serious analytical work on the part of the developing world to stake out a claim for itself in this area. Watching what is going on in and around the WTO, it doesn't seem that developing countries have really prepared themselves for these forthcoming series of battles.
It's convention season
The fog rolls in so quickly off the Atlantic that it can smother the town of Lubec, in the state of Maine, in seconds. One moment brilliant sunshine glistens off the shore; the next you can barely see to the end of the road.
But directions to the easternmost town in the US are simple - head north on route 189 and if you hit the ocean or Canada, you've gone too far. In this close-knit community (population 1,652) everybody fits in to one of three categories: locals, whose families have often been here for generations; "summer people" with holiday homes; and those "from away", meaning from anywhere else.
In his stump speech, the Democratic vice-presidential candidate, John Edwards, says there are two Americas: "One America - middle-class America whose needs Washington has long forgotten; another America - narrow-interest America whose every wish is Washington's command." Lubec's locals do not fit into either.
Living in Washington County, one of the poorest in the US, they are certainly doing the work, but they are not middle class. Take Daniel Fitzsimmons. He used to employ around 50 people in a business making Christmas wreaths.
When the North American Free Trade Agreement came in he went out of business, undercut by cheaper wreaths from Canada. "It's free trade to some people, but it ain't free to us because we're losing everything we had," he says.
Fitzsimmons, 41, turned to digging for clams, scallops and urchins until he found himself short of breath one day and fell to the ground. With no health insurance, he had to make himself bankrupt before he could get financial assistance for the bypass surgery he needed.
"The bills were enough to give you a heart attack if you didn't have one before," he says. Now he's back, digging in the bay early every morning to catch whatever the season washes in. "If you're making a life fishing then you eat chicken one day and chicken feathers the next," he says. "You take the good with the bad."
As the convention season kicks off this week, there will be little mention of people like Fitzsimmons. The Republicans would rather forget he exists; the Democrats might talk about him, but they won't be talking talk to him.
Both will certainly discuss the issues that matter most to him - jobs and health - but they won't address them in a way that will make a substantive difference to his daily life.
Still, Fitzsimmons is backing Democratic hopeful John Kerry, enthusiastically but with no illusions. He doesn't believe the Democrats will propose a socialised health care system that would cater adequately for him and his family, a fair-trade policy that would protect his livelihood from cheaper labour or an economic policy that would offer him more stable employment.
The fact that doing so would jeopardise any chance of a Democratic party victory only serves to highlight the glaring dysfunction in US political culture. Of the thousands of lobbyists at the two conventions over the next month, few, if any, speak for the poor.
Big business has its eye on both parties; the poor have the ear of neither. In the words of Upton Sinclair: "It is difficult to get a man to understand something when his salary depends on his not understanding it."
"These are the forgotten people," says Marty Shaw, who runs the Sea Coast Mission, which has a food pantry for those in need in nearby Cherryfield. "They don't count. They don't matter to either of the main parties."
With more than half of its inhabitants living below the poverty line, Washington County is an extreme case. As a remote rural area which has lost what little industry it had, it owes its precarious economic viability to seasonal work.
In a year, like this one, when a mild winter cuts the blueberry crop in half, those who have been teetering on the edge fall far and fast without a net to catch them. If your car packs up, your child gets sick or the weather is bad, you could find you are suddenly in serious trouble.
But on a national level the issues facing those who live here are by no means marginal. One in eight Americans lives below the poverty line and one in 10 has no health insurance.
Add to that the one in eight black men in their 20s in prison, and you have a nation where being impoverished, incarcerated or in need of medical coverage is a mainstream way of life to which mainstream politics has no adequate response.
That is not to say that it makes no difference to people here who wins. The economy is not the only issue they care about - there is abortion, gun control, gay marriage and the war, to name just a few.
And things could get worse. And what they think could be crucial. Maine is a swing state. Al Gore took it last time, but the latest poll puts Kerry only narrowly ahead of Bush. In 2000, turnout in Lubec was more than 60% and in Cherry field it was around 70% - way above the national average. Lubec went to Gore, Cherryfield to Bush.
Those who need change most expect it least - few here think the result will make much difference to them. On the banks of Lake Tunk, outside Cherryfield, a picnic turns to politics.
Of the six people at the table, two are in their 70s and still working full time to supplement meagre pensions. Two others, who are younger, have no health care. In 2000, five of them went for Gore and one for Bush; come November four will vote for Kerry, and two are thinking of switching to Ralph Nader.
Cynthia Huntington is one of them. She is 60 and has a hernia. But with no health insurance, she cannot afford an operation. So she has the choice of either waiting five years in pain and possibly peril so she can qualify for Medicare or having her operation now and handing her home over to the state after she dies.
She has worked all her life and does not want to leave her children with nothing. She doesn't know what she's going to do, and she doesn't believe the outcome of November's election will make the decision any easier.
"They don't give a shit about us," she says. "They're all rich people and they're all run by corporations. They don't care about the fact that I need surgery and can't pay for it."
"You want to let Bush back in and make things even worse," asks Gladys Pollard. "Worse than what?" asks Huntington. "Kerry's not going to get me my operation." Huntington says she may change her mind before the election and switch back to the Democrats.
"I'll talk to her," whispers Gladys. And the fog chases the dusk in over the Tunk, so thick you can barely make out the hand in front of your face, let alone the banks on the other side. -Dawn/ Guardian Service
Fahrenheit 9/11
I have finally been able to see Michael Moore's film Fahrenheit 9/11. It has had such rave reviews and the cinema houses where it has been shown have been packed is an indication that the film has touched a raw nerve.
Frankly, I found the film a little dull and somewhat poorly edited, it jumps from one sequence to the other. It can be likened to a cluster bomb that releases bomblets, each one capable of exploding and creating their own craters but killing and maiming only a few rather than the many.
But the huge success of the film points to how profoundly unpopular the war in Iraq is and how angry the people are about being lied to. Tony Blair does not even have a walk-on role and this is the principal weakness of the film
Michael Moore had the American public as his target-audience and deals with subjects that are deemed to be outside the interest of most of us. He fails to realize that the American public is the least informed about what is happening in Iraq and Afghanistan and those who show some interest are happy with the coverage provided by Fox News.
To that extent, the film preaches to the converted. Will it have any impact on the forthcoming elections? I wouldn't think so. Those who have read Michael Moore's book, Dude, Where's My Country? Will see Fahrenheit 9/11 as a cinematic version of it.
True, that most Americans don't read books, much less non-fiction and have the sketchiest of knowledge of the world beyond its own shores, Moore reveals that 65 per cent of American adults between the ages of 18 and 25 could not find the United Kingdom on the map.
As with the prisoner abuse at Abu Ghraib prison, it was the photographs that brought home the terrible and terrifying break-down of civilised restraints and unleashed that triumphant cruelty that is the booty of the victors, perhaps Moore's film will make it easier to understand the dark forces that plot events which have calamitous consequences and which are sold as patriotic acts to a gullible public.
There's nothing quite like a war to get the adrenalin pumping and then "our boys" become everyone's boys except the more than 500 members of Congress, only one of whose son is serving in Iraq.
That the Bush family have business connections with the family of Osama Bin Laden was well known and Fahrenheit 9/11 brings it out. It is a cozy relationship and Prince Bandar, the Saudi ambassador to the United States is affectionately called Bandar Bush by Bush Sr.
The United States has been buying oil from Saudi Arabia and selling it arms. This is bound to lead to close business relations and on the face of it there seems nothing wrong with it.
But after 9/11 when all Middle East types and those with Muslim names including Pakistanis became suspects, the special treatment meted out to the members of Osama bin Laden's family has an element of impropriety.
The American public may not have been aware of this and those who have seen Fahrenheit 9/11 now know. The American public may have had a vague idea about Halliburton and that Dick Cheney had been its chief executive officer.
As the contracts started to be doled out for the re-building of Iraq (destroyed in the first instance by the coalition forces) it became very clear that to the claimants would go the victor's spoils. The contracts for the rebuilding of Iraq have all the hallmarks of a scam.
Bush comes out as the villain in the film but the film touches only lightly on the 'gang' that surrounds him, the Cheneys, the Rumsfelds, the Wolfowitzs and the whole caboodle of the neocons, the right-wing ideologues who provide the fuel for the doctrine of pre-emption.
The film is at its best when it shows how the military goes about recruiting its soldiers. There are in the United States a large number of people, the white trash, the Hispanics, the Afro-Americans who do not share in the American Dream, who live on the other side of railway tracks, this is the lower middle class and is a fertile breeding ground for recruitment in the armed forces.
The armed forces provide employment, education, respectability and a chance to see the world, to say nothing of smart uniforms. With nothing to lose and their future effectively blocked, they become easy marks.
Shots of two US Marines recruiting agents passing out brochures in a dilapidated small town need no voice-over. The pictures of smooth talking US Marines reminds one of used car salesmen.
As I watched the film, I was struck by the fact the film could only have been made in the United States and despite some early hiccups is being openly screened in American cinemas. This says a lot for American democracy.
It is possible that the snoops of Homeland Security and the FBI may be noting down the names of some members of the audience and video-taping those standing in line to see the film, for further action and harassment but thousands of people have seen a film that does a hatchet job on the president of the United States and Michael Moore is not in jail, and is indeed getting rich.
Fahrenheit 9/11 disappoints only because it got such a huge build-up. There is about it something of Orson Welles Citizen Kane, a film about the media tycoon William Randolph Hearst which Hearst did his best to have banned, using every dirty trick.
It is the totality of Fahrenheit 9/11 that is so devastating for most of the audience will not have read Michael Moore's books, Stupid White Men and Dude, Where's My Country? There is much more material available since he made his film including four Americans who were running private jails in Afghanistan and who claim that this was within the knowledge of Donald Rumsfeld. Free Enterprise Zindabad!
Speaker's controversial decision: Appointment of leader of the opposition
With the election of the leader of the house in the National Assembly on June 29, the controversy regarding the appointment of the leader of the opposition has resurfaced.
Chaudhry Shujaat Hussain of PML (Q), obtaining 190 votes, was declared elected as prime minister by the Speaker. His opponent in the race, fielded by the ARD, Makhdoom Amin Fahim, secured 76 votes.
On the same day, the spokesman of PPP Parliamentarians, Senator Farhatullah Khan Babar pleaded for appointment of Makhdoom Amin Fahim as leader of the opposition, reinforcing his demand with reference to the Rules of Procedure and Conduct of the National Assembly, 1992, as well as on the basis of the discretion of the Speaker, in appointing Maulana Fazlur Rehman of MMA as leader of the opposition on May 25, 2004.
People were surprised and shocked when Speaker Chaudhry Amir Hussain announced the appointment of MMA secretary-general, Maulana Fazlur Rehman, as the leader of the opposition in the National Assembly.
The only reason given by the Speaker was that he had exercised his discretionary powers on the basis of the number of votes, Maulana Fazlur Rahman had secured at the time of the election for the post of prime minister.
At that time the Maulana had received 87 votes against 172 bagged by Mir Zafrullah Khan Jamali. PPP Parliamentarian candidate Shah Mahmood Qureshi was third with 70 votes.
The decision of the Speaker seems to be arbitrary and partial, besides being unique in parliamentary history. Even otherwise, the decision defies logic in that, had the candidate of the opposition for the post of the prime minister been some other person than the MMA nominee, say Imran Khan of Tehrik-i-Insaf, and had polled 87 votes, one wonders if the Speaker would have appointed him leader of the opposition.
The moot point here is as to whether the Speaker has, in this case, exercised his discretion arbitrarily and without any logic, affecting his authority and impartiality or in a judicious manner conforming to the relevant provisions of the Rules of Procedure to be observed in appointing the leader of the opposition in the National Assembly.
The relevant rule in Rule 2, which reads: "Leader of the opposition means a member, who in the opinion of the Speaker is for the time being leader of majority of the members in the opposition".
The above rule must have been formulated by the National Assembly on the basis of the ground realities of the system of parliamentary government in this country. The importance of the opposition in that system has long been recognized in the procedure of British Parliament, the traditions and conventions of which we generally follow.
In Britain, the prevalence of the two party system (on the whole) rule out any uncertainty as to which party is to be called "official opposition". It is, therefore, the opposition party, which, in the event of the removal or resignation of the government, assumes the office.
The position in this country is entirely different. There are good many political parties, groups, and individuals who contest elections and consequently the government and the opposition are comprised of coalitions of various parties, groups and individuals.
The Rule 2 of the Rules of Procedure and Conduct of the National Assembly, 1992, was, accordingly, framed for the purpose of the appointment of the leader of the opposition and the words - a term which has been defined as a member (not a party or group) who, in the opinion of the Speaker, is for the time being "leader of majority of the members in the opposition."
To enable the Speaker to form a correct opinion and to appoint the leader of the opposition, the ARD had earlier sent a letter, duly signed by 80 members in favour of Mr Makhdoom Amin Fahim of the ARD while the MMA could muster the support of only 67 or 68 members for Maulana Fazlur Rahman.
What could be a better proof for a member, to be appointed as a leader of the majority of the opposition in terms of Rule 2? The Speaker should have followed the relevant rules of the National Assembly and demonstrated his impartiality by appointing Makhdoom Amin Faheem leader of the opposition in the assembly and thus avoided any controversy in the regard.
Even for the sake of argument, if it is assumed that the Speaker had the liberty to decide this issue in his sole direction, he could not do so arbitrarily. The word 'discretion' implies vigilant circumspection and due care and the power has, therefore, not to be exercised prudently.
The legislature in many cases concedes a wide discretion to a judge or a court and also to the Speaker but imposes a very heavy responsibility. The exercise of discretion is not synonymous with arbitrariness.
The question arises what remedy the opposition has in the prevailing situation, when the entire treasury bench is hostage to the military rulers, as demonstrated recently, by the drama of the substitution of the prime minister and appointment of a prime minister-in-waiting?
While the National Assembly may claim to be the sole and exclusive judge of its own privileges and that its decisions are not open to scrutiny by any court of law, the higher courts may not necessarily subscribe to this view.
The courts of law may, indeed, maintain that the privilege was part of the law of the land and that they are bound to decide the questions coming before them within their jurisdiction, even if the privilege of the assembly or privilege of the speaker is involved.
There have been in the distant past instances where the British courts had in quite a few cases of privileges tried to define the limits between their jurisdiction and that of the parliament.
The writer is a Karachi-based barrister.