| 14 August 2004 | Saturday | 27 Jamadi-us-Saani 1425 |
Inflation alarm bells
The nation today celebrates its fifty-seventh independence day in a mood that is far from cheerful and optimistic. There is a lack of direction and commitment, and a country founded by a constitution a list like Mohammad Ali Jinnah finds itself languishing under a quasi-democratic dispensation.
The National Security Council, constituted through a bill enacted with the support of a section of the opposition, has subordinated the elected civilian leadership to the military's whims, thus weakening the concept of the sovereignty of the people and negating the essence of democracy.
The underlying assumption behind the formation of the NSC - that the military knows what is best for the nation - is fallacious. Our politicians have not exactly lived up to the Quaid-i-Azam's ideals; indeed when they have been in power they have often trampled democratic norms and weakened democratic institutions.
But there is nothing to suggest that military rulers have done any better either. As history shows, periods of chaos have followed military rule, because the generals left behind them systems that did not have the people's consent.
Thus the constitutional schemes devised by Ayub Khan and the arbitrary amendments to the 1973 Constitution by Ziaul Haq could not last long because neither believed in participatory democracy.
The constitution made by Ayub Khan relied on indirect election to parliament and was abrogated when he lost power, while in the case of Ziaul Haq it was left to his protege, Mr Nawaz Sharif, to repeal Article 58-2(b) that empowered the president to dissolve an elected parliament and government.
Both Ziaul Haq and two of his predecessors - Mr Ghulam Ishaq Khan and Mr Farooq Leghari - made arbitrary use of this clause. Today, we are confronted with the same question: will the arbitrary changes made to the Constitution through the Legal Framework Order last when the present set of generals is gone?
One feature of military governments has been the persecution of parties and politicians not on their side. Ziaul Haq persecuted the PPP and the Bhutto family and patronized sycophants and time-servers; this government has kept both the PPP and the PML-N out in the cold and pampered those who are willing to collaborate with it.
This has sidelined the two mainstream parties, thus forcing the generals to rely on the religious parties, whose support to the military regime has been grudging and based on expediency.
The LFO itself owes its inclusion in the Constitution to the support of the religious parties in a deal that neither side now looks like honouring. More unfortunately, while accusing the politicians of being corrupt and unprincipled, the military itself has shown a lack of scruples.
Nothing illustrates this better than the way the accountability process has been conducted - favourites have been forgiven and inducted into the government, while those not falling in line have had their due share of trials and jail terms.
All this has served to weaken the regime's moral standing and contributed to a lack of national consensus not just on the political system but on all major facets of national life.
Events since 9/11 have turned the world's focus on Pakistan, our internal scene is monitored abroad the way no other country's is. Yet chaos, uncertainty and a lack of consensus on all vital issues - from the need or otherwise of big dams to terrorism - characterize the domestic scenario.
The monster of terrorism stalks the land, and yet the government's handling of this highly sensitive issue has been controversial. The Wana operation especially has drawn strong criticism, because the government has not tried to take all parties along.
The same situation informs matters like the implications of Pakistan's membership of the World Trade Organization, the lack of substantial local and foreign investment, the failure to initiate a dialogue with Baloch groups, and the question of troops for Iraq.
All these issues need to be discussed and debated threadbare in the National Assembly. Uncertainty still surrounds the president's decision to retain his uniform. On many other questions agitating the public mind, progressive legislation has been wanting.
No law has yet been framed to abolish karo-kari and honour killings, and no progress has been made with regard to amendments to the Hudood and blasphemy laws. A point has come when more important than harking back to what the founding fathers had said is to develop a national consensus on all issues of concern.
What we need from all those who matter - political parties, intellectuals, ulema, civil society groups and the military itself - is unambiguous dedication to democracy and the rule of law.
We have to sit together and decide what we wish to be - a parliamentary democratic state or a quasi-democracy. We have to agree on how far we want religious forces to shape our domestic and foreign policies. We have already wasted five decades in dithering over our sense of direction; further delay will have even graver repercussions.
Inflation alarm bells
Confirmation that the consumer price index (CPI) was up 9.33 per cent for the month of July, the highest in seven years, should be cause for concern for the country's monetary policy-makers.
The main factors behind this are a nine per cent increase in housing rent and a 15 per cent hike in food and beverage prices. This contrasts sharply with remarks made by the State Bank governor in Karachi on Thursday, saying that the inflation rate would "come down" because of an impending fall in wheat and oil prices.
According to an agency report, the SBP governor has said that it was very difficult for Pakistan to escape the inflationary pressures created by rising international oil prices, which he said were as high as $41 per barrel.
However, the Oil Companies Advisory Committee (OCAC) which fixes prices in Pakistan has not increased the price of petroleum products for several weeks now, presumably in a bid to stave off further inflation.
Besides, oil prices on Thursday were $45.55 per barrel, significantly higher than the figure quoted by the SBP governor, which means that were it not for the OCAC action, inflation would be even higher.
The more disturbing aspect of July's inflation figure is that the factors behind them - housing and food prices - disproportionately affect the poor. The increase in rents could possibly have a spiralling effect, with owners of homes demanding higher rents in response to an overall increase in the general price level.
The other factor could be the growing trend by savers and speculators to invest in real estate, feeding into a rise in rental values. Whatever the reasons for the increase in the CPI, the SBP governor would have to agree that the effects on an individual's real income will not be very salutary.
True, in many cases, inflation is a necessary consequence of policies that seek to promote economic growth (take the case of China which has had a similar experience over the past two decades). But if not kept in check, it has the potential also to pull back whatever gains are made through such growth and in our case could severely hamper the government's poverty alleviation efforts.
One wonders on what basis does the State Bank believe that the official inflation target of five per cent will be adhered to, without risking a slowdown in economic growth.