| 30 August 2004 | Monday | 13 Rajab 1425 |
Land and the military
Trade facilitation under WTO
Wrong way to win hearts and minds
It is said that a turning point in history is rarely obvious when it is happening. It is only long after the events have run their course that one can truly judge whether they had changed the direction of history. It may thus be too soon to appraise any lasting significance of the tragedy of 9/11.
All one can say is that 9/11 did not change history so much as it signalled some profound changes under way in human society. The international order as we have known in modern times is evidently crumbling, and the transition between a dying order and one waiting to be born has fostered non-traditional threats and opportunities raising serious global tensions. This is what provides the broad strategic canvas for the current picture of the US-Pakistan relations.
The essence of a good foreign policy is to recognize the emerging changes and respond within one's capabilities and resources. This is what Pakistan did after 9/11.
Whether Pakistan was forced to do it hardly matters; after all in foreign policy not all the choices are palatable, specially for a small country. Even big powers have to act often under pressure of circumstances. This is how history moves.
The fact is that prior to 9/11 Pakistan was supporting the Taliban, and by implication the Al Qaeda, at an enormous expense of international isolation. Over-strained by years of poor governance and an ambitious foreign policy in the region, Pakistan had neither the political will nor the resources to take on these forces.
The US provided them both. Also Pakistan was on the brink of bankruptcy. Only the US and its friends could bail it out. And they did. As for the US it could not have fought this war on terrorism without critical help from Pakistan, which it got.
Both sides were thus impelled to co-operate because of their national interests. Having done what they had to do, Pakistan and the US are now caught up in powerful currents of history, some flowing in the same direction, some in the opposite.
It is obvious that the US-Pakistan relations are being steered on the one hand, by America's foreign policy, which itself is being driven by international forces and its domestic compulsions, and, on the other, by the dynamics of Pakistan's own circumstances. The friction of these moving parts is raising a question mark about their alliance.
America seems to be in search of a new sense of purpose after the cold war. Apparently what the US wants to do with its monopoly of power is to use it, within the existing international institutions, if possible or convenient, and unilaterally if necessary, to guarantee an unchallenged assertion of its will on what it sees as a menacing, unpredictable and disorderly new world.
The idea is to preserve, at a minimum, its economic and military strength as well as to widen the margin of safety for its citizens traumatized by 9/11. Iraq War is only an extension of this argument to self-defeating ends.
As America might soon realize, there are limits to its power that may come to face, or may already be facing, two big challenges. A potential one by other big powers including allies and prospective adversaries or rivals, however muted their current posture.
But a current and more serious challenge is from issues surrounding the ethics of international system and the prevailing social order in much of the developing world especially in Muslim societies.
This domestic order rests on a degraded economic and physical security and human dignity of the marginalized, weak and the vulnerable, and thwarted aspirations for freedom, democracy and modernization of the liberal intelligentsia, not to mention any regional, ethnic and linguistic discontent.
These societies which have been under a slow and sustained assault from illiberal, pro-western elite for decades, have also to face another force, that of religious extremism fomenting such popular feelings as national honour, social discontent and religious identity.
Aroused by these tensions, much of the Islamic world is in revolt against its modern history. You have three groups here competing for the heart and soul of the Muslim societies - a truculent and fanatical band of extremists peddling a dangerously false version of a great religion; moderate Islamists with a wider appeal seeking a political route to power but not hesitating to use the extremists for their own purposes; and a liberal intelligentsia seeking a secular, democratic and nationalist dispensation. All these groups are jostling for space long occupied by the ruling oligarchies representing an oppressive social order.
The above struggle has entangled the US whose power and influence on behalf of the ruling elite and indifference, if not support, to the unjust international order that generally oppresses the Muslims is under challenge. There is thus a new wave of predominantly religion based-revisionism against the vestiges of the colonialist and imperialist era.
This is the broader strategic background to US re-engagement with Pakistan. which shares some of the above tensions and many more, some unique to its condition. Time was that South Asia was the focus of US interest because of the threat from outside.
But the region has changed and so has the basis for US relationship with it. The threat now is from inside to outside to which, as the US sees it, Pakistan contributes significantly both with its internal dynamics and external behaviour.
The present phase of US engagement with Pakistan is aimed at not only soliciting its help in the war on terrorism but also, as the US professes in its national security doctrine, in its own move towards building a more open and tolerant society.
The 9/11 commission report affirms that much. Thus Pakistan could both be a partner and a target, an ambiguity that has a potential for friction in the future depending on the strategy of the US engagement.
So far the US has been so focused on enlisting Pakistan's help in pursuing its own war on terrorism that it has shown little understanding of Pakistan's long term interests, let alone acting on their behalf.
Many powerful ideas that move men and define a nation's life are playing on these interests, such as nationalism, democracy, religion, ethnicity and regionalism, and pressures for reform, modernization and social consensus. The US engagement has given them a critical mass but the direction of change remains uncertain.
Nationalism has come to the fore by seeking strong expression, at one level, through anti-Americanism provoked by the politically insensitive manner of the military-dominated war on terrorism and the gratuitous shock of the Iraq war, and at another, through the assertion of the will of smaller provinces.
Religion cuts across both, giving nationalism a strong idiom. Liberal aspirations for democracy also flow into anti-American channels but merge with and deviate from the religious wave as religion and democracy both use the same jargon of social protest though advocate different means of empowerment.
The result of all this is complex: national energies are either in collision or in confusion or channelled into illusions and emotions. It is not clear how the fission of all this may influence the future direction of the country.
But one thing is evident that the outcome will be exponential. And the US could be part of the problem or the solution. So could be General Musharraf who has wrested some sense of purpose from this confusion.
Musharraf may have resolved the complexity of the challenge but being under attack from all sides he has failed to build a reformist coalition, and had to fall back on the institution that he represents - the military - and the very flawed political process he had overthrown in 1999. His compromises with the both may have enfeebled his reformist agenda but he remains the only commanding force for change.
Pakistan has been in a mess and it is immaterial how it got there. Whether the military was responsible for it or the politicians, the fact is this mess can only be sorted out by some measure of strong government - a "soft authoritarianism" as they say.
The question of legitimacy is raised but it can be answered by citing successful instances in recent history of "performance legitimacy" specially in East Asia. Yes the military needs to de-escalate its role in politics but this will not happen easily or overnight.
The politicians who have been confederates of the military and subservient to it to protect their own dominant social status cannot command it to change. Only one of their own can.
And the US can help by weaning the military away from its past illusions by meeting Pakistan's genuine security needs, and working with India to seek a lasting solution of the Kashmir problem.
Kashmir is not just a moral issue, it touches every conceivable problem that afflicts Pakistan's body politic and the security environment in the region. Resolution of this dispute and a strong US relationship with both India and Pakistan is central to any US effort to realize its respective interests in either country - be it terrorism, nuclear proliferation, regional peace and stability or democracy.
The US also needs to invest in real social and economic change in Pakistan which would require a much bigger financial effort than the present one and a different aid strategy.
Any benefits of the present aid commitment, which is still following the traditional lines, are dwarfed by the depth of anti-Americanism. The challenges that Pakistan presents, to itself and the US, have magnified.
The US, in cooperation with international financial institutions, and allies like Japan, should arrange major long term assistance to Pakistan that should be people-oriented focusing on social sectors - education, primary health, rural infrastructure - and trade, investment and transfer of technology.
Only a social restructuring and dynamic economy can change the system that subverts democracy and can create conditions that support the emergence of a level playing field for politics and representative institutions.
Pakistan's main problem is its socio-economic structure and not lack of institutions or of capable human resources at the top level. Institutions exist but have been trivialized by their subservience to political purposes, and you cannot shore them up by "institution building" as some of the US studies recommend.
This oversimplifies the reality. Similarly the staking of US relationship on a single individual is also risky. The US needs to distinguish between Musharraf's reformist agenda and his personal ambitions.
The quality and magnitude of US engagement with Pakistan and its staying power should match the enormity of strategic challenges that Pakistan and the region pose to itself and the US interests. Only then could Pakistan and the US become not only allies but friends.
The writer is a former ambassador.
Land and the military
Speaking at the groundbreaking ceremony of a power and seawater desalination plant for the Defence Housing Authority (DHA), Karachi last Friday, General Musharraf wondered why some people criticized the Defence societies in various parts of the country.
Why should one be jealous if someone got a cheap piece of land initially and because of the good work done by the housing society the price rose a hundred times and the land holders earned money, he asked, dismissing his critics as 'pseudo-intellectuals'.
The general would do well to pause and ponder and ask himself as to why the pseudo-intellectual's tongues are wagging. They are wagging because the pseudo-intellectuals know how the military first captured political power and then employed this power to advance its corporate interests at the expense of civil society.
A housing society called the Lahore Cantonment Cooperative Housing Society Limited was set up in Lahore under the Punjab Cooperative Societies Act 1925. It was a private society and its operations were carried out on private lands.
As soon as the society began flourishing, the army authorities took forcible possession of the society. On a complaint, the registrar Cooperative Societies ordered that elections be held but the occupiers of the society did not allow elections to be held for 10 years.
In 1999, the military authorities 'persuaded' the provincial government to issue an ordinance, the "Defence Housing Authority Lahore Ordinance 1999," to formalize the take over. The ordinance was promptly challenged in the Lahore High Court on the ground that the provincial legislature cannot legislate on matters relating to defence.
While the matter was still pending in courts the provincial government introduced the ordinance in the form of a bill. It was pending in the assembly when the military took over in October 1999 and the assemblies were dissolved.
Under Article 117(2) of the Constitution a bill pending in a provincial assembly lapses on the dissolution of the assembly. As a consequence, the bill lapsed and the Lahore Cantonment Housing Society was revived. But the army authorities did not allow the members of the society to perform their statutory functions and kept allotting plots to military officers.
Barely three weeks before the general elections of 2002, a presidential order No 26 was issued on September 19, 2002 under which the Defence Housing Authority, Lahore, was set up. This order was subsequently indemnified through the 17th Amendment in the Constitution, thus giving a pseudo-legal basis to the take over of the Society.
If the plots in the DHA Lahore have become an investor's bonanza it was not due the management of the military authorities but due to the fact that an established private housing society had forcibly been taken over at almost no cost.
Now take the DHA, Karachi. Here too a cooperative housing society formed in 1953 under the Sindh Cooperatives Societies Act 1925. During Zia's martial law the military the society was abolished and replaced with the Pakistan Defence Officers Housing Authority under presidential Order 7 of 1980.
This order was subsequently indemnified at the time of lifting of martial law, thus again giving a pseudo-legal cover to a forcible take over. The DHA Karachi it is not subordinate to any ministry nor under statutory administrative control.
A few weeks ago in reply to a question in the Senate it transpired that the authority owes Cantonment Board, Clifton, a hefty sum of Rs 280 million accumulated over the past two decades.
It is also worth recalling how the authority it forced the provincial government of Sindh to surrender to it 240 acres of prime land at a dirt cheap price. The provincial government had through law banned the sale of owned by it to other entities.
But the DHA forcibly occupied 240 acres of government land. The provincial government moved the SHC against it claiming that the market price of the land was Rs 15,000 per square yard for residential and Rs 25,000 per square yard for commercial plots.
The provincial government was forced to withdraw its ordinance banning the sale of land, withdraw its petition from the SHC and agree to the sale of 240 acres of land to the DHA at a ridiculously low rate of Rs 20 a square yard.
If the 'pseudo-intellectuals' find it hard to accept the claim that the DHA has become an investor's bonanza because of excellent management, are they to blame?
Or, take the case of military farmlands in Okara and other towns of Punjab. The farmlands belong to the Punjab government and were leased to the military for a specific purpose. The military has neither paid the lease rent to the provincial government nor vacated the land and returned it to the provincial government.
Instead, the military has asked the tenants to renounce their rights of sharecropping and accept its contract system. The military has promised them that they will not be ejected but the tenants refuse to believe this knowing full well how captured state lands have been captured in the past. What fate befell the tenants has been documented by human rights bodies and need not be recounted here.
Or consider what has happened to the lands given to the military for specific defence purposes in the past. Recently it transpired in parliament that the military had transformed six agricultural and dairy farms spread over several hundred acres of land into golf courses and army housing schemes. If an enterprise gets prime land free and develops housing societies on it, this is bound to became an investor's bonanza.
General Musharraf also said the military was not engaged in any commercial activity. If the Askari stud farms, Askari fish farms, Askari guards, Army Welfare Shoe project, Fauji Corn Complex, Fauji Poly Propylene products, Fauji sugar mills, Army Welfare sugar mills, Fauji Cement, Fauji Kabirwala Power Company, Fauji Corn Complex, Fongas, Fauji Fertilizer Company, Fauji oil terminal company project, Askari leasing, Askari welfare pharmaceutical project, army welfare woollen mill, army welfare hosiery unit, Askari welfare saving scheme and Askari information service do not show the military's involvement in commercial activity, then what do they indicate?
Isn't it the same as a political party getting into power and then using state power to advance party interests by making laws to legalize such activity?
The writer is a member of the Senate.
Trade facilitation under WTO
Developing countries have been resisting the inclusion of additional obligations under the WTO. In 1996, at the WTO ministerial conference in Singapore, some issues were introduced to the effect that, contrary to other non-trade issues that tend to restrict trade, were aimed at facilitation of trade, the primary objective underlying the creation of the WTO.
However, many developing countries, apprehensive about negotiations in this new area, have been demanding that these issues be kept out for the foreseeable future as they are overburdening the WTO regime.
'Trade facilitation' has been raised as a non-trade barrier issue following the rationalization of tariff rates/levels. It has been defined both narrowly and broadly.
The WTO, UNCTAD and OECD have narrowed the scope of the definition to customs formalities, - that is, a freer movement of goods, and more specifically the transparency and efficiency of customs procedures and other regulatory frameworks to facilitate the release and clearance of goods.
The WTO definition includes activities like transport, payments and issues concerning customs-related document, requirements, procedures to be followed for import licensing, pre-shipment inspections and rules of origin, the use of automation and information technology, and the consistency and predictability of rules and regulations (covered by publication of laws and regulations on tariff classification and duties prior to their application, rights to appeal against administrative decisions, judicial and administrative rulings that would be binding and information on fees and port charges).
The World Bank, on the other hand, takes a broader view of technical assistance programmes pertaining to trade facilitation to also include harmonization of standards to internationally accepted regulations. Moreover, the demands of additional security post-9/11 are increasing the challenges to facilitation of international trade.
Almost everyone would agree that trade facilitation would reduce transaction costs of imports and exports and eliminate uncertainties in trade, leading to increased investment and trade, and that businesses suffer losses on account of delays at borders, cumbersome rules, complicated documentary requirements and lack of automation in procedures. All these constraints are estimated to cost more than the costs of tariffs.
Studies suggest that the transaction costs of such procedures and mechanisms can be as high as 15 per cent of the value of the transactions; UNCTAD estimates that the costs of trade transaction are as much as seven to 10 per cent of the total value of world trade. Trade facilitation measures could cut these costs by 25 per cent, resulting in savings of almost $150 billion per year.
However, an obvious question that arises is that even if benefits of trade facilitation (through simplification of procedures and documentary and other requirements) would outweigh the costs of the proposed measures, the returns on scarce financial and other resources for improvements in the trade facilitation infrastructure would be higher if spent on other areas/sectors.
For example, the establishment of an efficient customs clearance infrastructure would require more than 100 million (on average minimum costs of just customs reforms are estimated at $40 to $45 million for most developing countries).
Then, there will be the additional costs in both human and financial terms of maintaining such a system. The total requirement in the case of small countries may well turn out to be more than their spending on education and health.
So, the social and political fallout costs of binding commitments on trade facilitation could be huge and difficult to justify, even if these were to be financed from external funds and appropriate and effective mechanisms for compensating developing countries can be developed.
One study argues that in 1988, output per worker in the US was 35 times that in a poor country like Niger, implying that in just 10 days an average worker in the US produces as much as the entire annual production of an average worker in this poor African country.
If customs clearance procedures and logistics were to have the same productivity ratios as the national average productivity referred to above, then if the average clearance time in the US is five days it would be six months in Niger.
Obviously, poor countries cannot afford such a large efficiency gap in customs administration (since other countries would not trade with them) but for them to maintain the efficiency of US customs, the costs of doing so would be 35 times higher than in the US. Will it be possible for such countries to spend so much and would it also be socially justifiable?
Moreover, it could also be argued that the high costs of doing business in countries like Pakistan have more to do with inefficiently run institutions and the return on investments in these institutions would be higher and quicker. Allocating resources for trade facilitation will tend to assist foreign supplies more than domestic entrepreneurs.
Hence, many developing countries are of the opinion that trade procedures cannot be harmonized in view of the different stages of economic and social development, human capital and administrative capabilities of different countries.
These countries, therefore, demand that the ideal way to facilitate trade would be to remove trade barriers installed by the developed countries against their products.
They would then be willing to consider a gradual process of trade facilitation measures, especially if there is a longer-term commitment from the developed world to provide technical assistance to build the capacity of trade-related institutions in developing countries.
The writer is a former finance minister of Punjab.
Wrong way to win hearts and minds
While waging a war against terrorism, the US under President Bush claims to be engaged in winning the hearts and minds of the Arabs and Muslim people in the region they inhabit. The US is convinced that it has the right values of democracy and human rights that can be adopted by all peoples and nations to their advantage.
The Greater Middle East plan of Mr. Bush is directed towards countering extremism and terrorism, and advancing the value system he believes holds the key to peace, stability and prosperity.
The policy approach adopted by the Bush administration is that terrorism is rooted in religious extremism that is found in some Arab and Islamic countries, and if the US is unsuccessful in eliminating such extremism through the cooperation of the governments in power, a case would exist for bringing about a regime change.
Apart from the threat implicit in this policy, the US has launched a concerted campaign to win the hearts and minds of the Arab and Muslim masses to adhere to the democratic system and liberal values typified by the US.
US credibility as a champion of democracy and human rights has suffered in the Arab and Islamic countries owing to its continuing support to Israel, which has not only been violating the UN resolutions on Palestine, but has also indulge din excessive use of force in the occupied territories that amounts to state terrorism.
Moves by the UN Security Council to censure Israel from time to time have been frustrated by the US veto. The period of Bush presidency, which has almost coincided with Sharon's elevation to leadership in Israel, has seen this hardliner inflict new destruction and humiliation on the hapless Palestinian population.
He has fully lived up to his reputation as the "Butcher of Sabra and Shatila" by the massacres of hundreds of Palestinian refugees in camps in Lebanon in the eighties.
Bush, a majority of whose top advisers are Jewish, has belied expectations that he would show some regard for the Arab rulers in the Middle East, with whom he was known to have extensive business contacts on account of his stake in the oil industry.
As the Democratic vice-presidential candidate in the 2000 election was Jewish, a great majority of Muslims in the US voted for Bush. However, Bush has proved to be more pro-Zionist than any of his predecessors.
His Christianity is also of the evangelical school that believes that the victory of the Jews will precede the second coming of Christ. Even before he became president, he had yielded to Zionist propaganda, and called Sharon a "man of peace" while considering the Palestinians to be under the control of terrorists and extremists.
The strong undercurrent of anti-American feeling among the Arabs, as well as among the Muslims, arises from resentment over US partiality for the Jews, on the one hand, and an anti-Islamic bias rooted in history going back to the crusades on the other.
President Bush has virtually given a carte blanche to Sharon, who was quick to capitalize on the anti-Arab and anti-Islamic sentiment in the US, after the 9/11 incident, and put the Palestinian freedom fighters into the category of "terrorists."
The western domination of the media has been used to downplay his violations of UN resolutions and of civilized norms, in the name of security. Attention has been kept focused on the "suicide attacks" by the Palestinians, who have resorted to this desperate tactic to keep their struggle alive when Israel is using the latest equipment and technology in its moves to crush them.
Recent weeks witnessed a lot of ferment in the Palestinian ranks, including a power struggle going on between Yasser Arafat and younger elements, many of whom are critical of the corruption in the Palestinian Authority.
The anticipated withdrawal of Israel from Gaza had brought these differences to a head, and some Palestinians were said to favour a less militant approach despite the policies of Sharon.
This is not borne out by realities on the ground, especially as Sharon continues to violate the basic provisions of the roadmap that was put forward by the US with the support of the UN, the EU and Russia.
Dennis Ross, who was the US mediator for Palestine under the Clinton administration, gave an interview to the Newsweek (August 30) that was quite candid.
While he welcomed the growing recognition of the need for internal reform among the Palestinians, he admitted that they were being subject the worst of Israeli tyranny, facing a siege and a barrier.
Though Sharon had annexed 15 per cent of the West Bank by building the fence, he thought he would like to hold 50 per cent of the area under his control. The latest decision by the Bush government to support a major expansion of Israeli settlements on the occupied West Bank drew strong editorial criticism from New York Times.
Under the title "Folly in the West Bank," the newspaper, which is not lacking in sympathy for Israel being Jewish owned, stated on August 25 that "this cynical change in administration policy will have important long-term costs."
"It will further demoralize Israeli and Palestinian moderates, frustrate Washington's closest European and Middle Eastern allies, and undermine the American-backed roadmap peace plan, which is the only current peaceful political initiative."
Drawing attention to the plans for a considerable expansion of Jewish settlements, backed by huge government subsidies, the paper called the settlements a sensitive issue, because they involved the core of the Israeli-Palestine conflict: the ultimate division of the land of Palestine.
"To be just and workable and sustainable, any peace plan will have to divide this land into two coherent territories that are defensible and economically viable." The presence of 250,000 Israeli settlers in the West Bank, Gaza strip and Golan Heights, make the division immeasurably harder.
The paper urges Israel to announce a genuine freeze on all settlement construction Stating that no other recent administration has been less engaged in the pursuit of Middle East peace, the paper expresses the view that the Bush administration seems to be "sliding from dangerous passivity to outright obstruction."
Even if one were to attribute such decisions to the imperatives of electioneering, statesmanship demands that the sole superpower acts responsibly, both to safeguard peace in the Middle East and to preserve its credibility. The war in Iraq has increased instability, and even Afghanistan has not settled down after nearly three years of American occupation.
The US must recognize its prime responsibility in bringing about peace and stability in the Middle East on the basis of justice and international law. Encouraging Israel to annex more Palestinian land and to subject the Arab population to oppression and deprivation will deepen tensions and endanger future peace.
The writer is a former ambassador.