| 04 November 2004 | Thursday | 20 Ramazan 1425 |
A polarizing election
Collapse of good sense
Arafat symbolizes the Palestinians' struggle
The State Bank of Pakistan now expects six per cent economic growth, and not the 6.6 per cent which it projected when the budget was presented in June. It means the growth rate will be lower than last year's which was 6.4 per cent. It seems the momentum of high growth cannot be maintained because of external shock to the economy beyond the control of the government as well as adverse domestic factors.
The external shock is primarily due to the world price of oil shooting up steadily, crossing 55 dollars a barrel before sliding down marginally, with the possibility of touching even 60 dollars a barrel. That may push up Pakistan's oil import bill from the budgeted three billion dollars to even five billion dollars, and turn the current account surplus into a deficit.
There are collateral losses which the country may suffer due to the fall in global demand for Pakistani goods, less foreign direct investment in Pakistan and less export of Pakistani labour except to the Gulf and the Middle East which profit by the oil price bonanza.
The internal upset will be caused by the shortage of water for the wheat crop and other rabi crops. Added to that will be the need for larger import of furnace oil to produce power as the hydel power output falls because of the low water level in the rivers and the dams.
There is nothing much we can do to contain the world price of oil as they are the result of various international factors. But we have to rely more and more on gas and coal for production of power which has become a lasting national necessity. How soon the Thar coal can be developed with the help of the Chinese to meet this critical shortage remains to be seen.
The State Bank's annual report for 2003-04 says higher prices can adversely affect the current account, putting pressure on exchange and interest rates.
The shortfall in water may not be as high as 48 per cent as earlier estimated but will be 44 per cent less than the water needed for cultivation and can have very wide ramifications for the rural areas. Apart from that, there is the need to import one million more tonnes of wheat to keep the soaring prices down.
The whole world is facing the impact of the rising oil prices. Even the US which produces 50 per cent of the total oil it needs faces the impact of the oil crisis. It is not ready to release a part of the large strategic oil reserve it maintains, despite the urging of the Opec leaders. In fact, the oil price began going up earlier when the US needed more and more oil for boosting its oil reserve. In winter, it needs more oil for the heating in homes.
Earlier the IMF and other international institutions were delighted as they were expecting a record five per cent economic growth in the world in 2004 but those projections have been thrown overboard by the soaring price of oil. That may reduce the economic growth rate of the world by a half per cent or even more if the price keeps soaring.
Asian countries have been hit hard by the soaring oil price. And India has been forced to scale down its eight per cent growth rate and increase interest rate to cope with the higher inflation rate. China has been forced to increase its interest rate by a quarter per cent for the first time after nine years, though for different reasons. In spite of its strenuous efforts to check the overheating of the economy, the latter is on the upward bounce and recorded a growth rate of nine per cent last year. China has made investment loans more costly by increasing the cost of credit.
The State Bank has suggested a number of measures to mitigate the adverse impact of the soaring oil prices. They include far higher exports that targeted, far more receipts of home remittances from overseas Pakistanis and larger revenues than targeted. The wheat in short supply should be imported in time and well distributed. The development expenditure should not be reduced and should be well spent, and more of gas and coal should be used for power production instead of imported furnace oil.
These are obvious measures which should be employed even otherwise. But now their need has become far more urgent. But more exports depend on the cost of production being kept low in spite of the cost-push factors, and more of a spirit of enterprise on the part of the exporters.
More of the home remittances can come through the banking channels if there is no significant gap between the inter-bank rate and open market rate for the dollars, and the banks make far more efforts abroad to mobilise more of the remittances.
The revenues increasing far above the budgeted depends on the buoyancy of the economy on larger imports and on greater output of the manufacturing sector.
Of course, the development outlay of Rs. 200 billion should not be reduced. The donors, including the World Bank and Asian Development Bank, and the IMF are insistent on that so as to reduce poverty in the country and ensure more is spent on public health, education and women's development. That much public spending is essential for increasing employment, develop the infrastructure and invite more of foreign investment and domestic capital.
In the area of development spending, in addition to the official outlay the Asian Development Bank has said it would make available 2.7 billion dollars as aid for 2004-2006 which is a large sum within a short period. The World Bank too is ready to be equally accommodative to speed up the development of the country. The new prime minister should be able to make good use of such aid offers, particularly aimed at poverty reduction and social sector development.
Inflation is on the rise. If food prices go up, prices of several commodities also go up. And if oil prices go up, then all prices will go up including the cost of transportation, travel, power production, etc. But with oil prices not having going up for several months, food prices for the low incomes groups had already increased by 14.7 per cent in a year. The larger consumer price index went up by 8.5 per cent and by now the CPI has risen by 9 per cent for the whole year.
What the State Bank is certain is that inflation this year will be above 5 per cent. That is the prediction before the oil prices at home were raised, and along with it the power rates. The World Bank has already asked the government to raise the power rates to save Wapda units and KESC from further losses. When that happens there will be a multi-tiered chain reaction in prices. When power costs go up prices of industrial manufactures and the service charges also go up. Export prices will then rise unless the government tries to subsidize that subtly to avoid WTO resistance.
The government has been frantically looking for avenues to make up for the loss of revenues by capping oil prices since May. The central Board of Revenue is looking for the additional revenues. And it wants to raise the revenue target far above Rs. 580 billion. The government is reported to have lost Rs. 20 billion by capping the oil prices and if the present trend is sustained the loss until June, 2005, may be Rs. 70 billion. The World Bank, the Asian Development Bank and the IMF can't come to our rescue. Anyway we have to follow the global trend.
All this is having a deep impact on the rupee. Which has lost 5.5 per cent against the dollar in four months. And following some firm measures now by the State Bank the rupee gained 48 paisa against the dollar on Monday to reach 60.88 from the previous days 61.36 to a dollar. The State Bank is firm on adopting measures to strengthen the rupee and save the foreign exchange reserves as much as it can. So it has brought in checks on forward trade contracts, while maintaining the same concessional rates for export credit.
It is not ready to give any quarter to the speculators who want to bring down the rupee against the dollars or to let more foreign exchange go out needlessly. The strong signal from the Bank is having a healthy effect on the economy. With over 12 billion dollars of foreign exchange reserves the Bank has enough elbow space to take strong remedial measures and get the better of the speculators who don't think beyond their immediate gains.
Meanwhile, the government has cancelled six power projects, mostly with foreign participation as it cannot guarantee supply of gas as fuel. And that enhances the urgency for finalising the deal for supply of gas from Iran through a pipeline which will ultimately reach India. The KESC has now a shortage of 600 MW, which will become 1,300 M.W. by the year 2009. Add to that the too frequent break-down in the system which plagues the lives of Karachiites.
After hopeful signs of an improvement in the situation following some rains, the IRSA has reaffirmed the shortage of water for Rabi crop including wheat, by 44 per cent. Add to that the maldistribution of the supplies with the powerful getting more of the water. Misery in the rural areas will be on the increase.
All these factors will aggravate inflation which will exceed the target of five per cent, cautions the State Bank. The Bank's ability to contain or counter inflation is limited. It can reduce the money supply and increase the interest rates. It could check lending for speculative purposes. It would try to improve the supply side by making more credit available to it, which is not easy without inviting charges of discrimination.
But Dr Ishrat, the State Bank governor, is determined to do all he can. But the businessmen, particularly the traders in the more essential items, have to cooperate with him. They should not exploit shortages or cause them, as they often do when they smell a shortage.
It has to be a collective endeavour in a country in which terrorism and unemployment suicides are painfully common. Let us not add to the dissatisfaction of the community and the anger of the malcontents. The situation which the country faces should be solved by more than the government. The community as a whole has to strive for that until success is achieved against the heavy odds.
A polarizing election
The votes have been cast. Hopefully, by now, the winner will be clear. Hopefully the legal battles that decided the 2000 outcome will have been averted. But whatever the result, the 2004 elections have been truly remarkable: characterized by a whole swathe of firsts and broken records.
The year 2004 has been remarkable for the closeness of the polls. There were many who thought the 2000 election could not have been scripted into a tighter race, right down to the wire. Securing a handful (relatively speaking) of votes in just one state (Florida) conferred victory for one candidate. The official margin of victory for George Bush was a minuscule 537 votes. 2000 was close - but 2004 was even closer. The polls for weeks before had Bush and Kerry within one to two points of each other. The margin of error in such surveys meant they were effectively putting the two candidates were neck and neck; Incredible when you consider the size of the US electorate.
2004 was remarkable for the unpredictability of the outcome: on November 2, 2004, no one could predict with certainty who would win. Seldom, if ever, can a US presidential election have been this uncertain.
The polls were remarkable for the intensity of the campaign: not surprising given the closeness of the polls. (Where one candidate is streaks ahead of the other, the campaign tends to be lacking in passion and spirit - the result is a foregone conclusion. When there is little to divide rival candidates, passions on both sides are aroused - everything is up for grabs.)
Intensity was most definitely seen in the election campaign. Both Republicans and Democrats fought hard to get their man into the White House. Both had armies of activists and volunteers working for weeks and months beforehand to win support for their candidate. Over a billion dollars were spent in the effort to secure victory.
There was a clear distinction between the two candidates. There was little to divide Bush and Gore in 2000: four years later Bush and Kerry differed on almost everything. Seldom can there have been a US presidential election in which the two candidates were so clearly differentiated. The incumbent, George Bush, defending the war on Iraq: the challenger, John Kerry, arguing that it was "the wrong war". Bush defending his tax cuts and economic record: Kerry attacking that record for its huge deficit and loss of jobs.
The year 2004 was remarkable for the importance given to foreign policy - something traditionally way down in American voters' priorities - but also for the incursion of faith and religion in the campaign. It featured conservative George Bush rejecting gay marriage, late abortions, stem cell research. Less conservative (though emphatically not a liberal) John Kerry professing faith, but preaching tolerance (including of homosexuals) and strongly advocating stem cell research.
This election was remarkable for the importance of the outcome - for its implications both at home and abroad. For Americans it effectively placed them at a fork, with the Bush path leading in a completely opposite direction to the Kerry one. The Bush course would keep America committed to waging war in Iraq, and perhaps even to expanding to Iran and Syria. It would mean more economic downturn, with more policies that favour the rich and cause everyone else to lose out. The Kerry course was not defined, but it would at least hold the potential for resolution of the Iraq war (through international support), and certainly rule out any new military adventures.
If anything, the global implications of 2004 were even more profound. As the leading nation in the world, America's politics have always been followed closely by the rest of the word. But seldom can the decision made by US voters have had such a direct impact on Europe, the Middle East, South Asia, Russia, China, and so on. Whoever is in the White House on January 20 has enormous implications for all of them. Little wonder the outcome was so keenly awaited.
The polls generated a rare degree of polarization both at home and abroad. Seldom have the American people been so divided over an election. Seldom can passions on both sides have run so high. Numerous reports told of neighbours not speaking to each other, profanities being exchanged, physical fights - simply over support for George Bush or John Kerry. In 2004, the United States became polarized into red and blue camps. It is a moot point whether those divisions and that polarization can ever be healed. Abroad, there was less polarization: the people - if not always the governments - outside America were overwhelmingly against George Bush.
The elections featured much negative campaigning. The Republicans used a pack of prowling wolves to characterize the threat posed by Democrats; they in turn showed an ostrich with its head stuck in the sand, to illustrate Republican obduracy. Any restraint shown by the official campaign machines was more than offset by the broadsides fired by their "unofficial" support groups - the Swift Boat Veterans being one notorious example. These "outside" forces played a huge role in the election, not least in TV adverts.
The 2004 poll also be remembered for the stories that came out of efforts to undermine the electoral process. Stories of party activists ringing up likely opposition voters and pretending to take their voter registration details - thereby meaning they could not vote. Stories of leaflets being dropped in immigrant neighbourhoods saying they would be asked for ID when they voted.
2004 was remarkable for the degree of public participation. One of the biggest issues with the democratic electoral process is that it depends for legitimacy and credibility on voter participation. People have to turn out in sufficient numbers on election day to ensure that the result has meaning. (A 70 per cent majority in a turnout of just 20 per cent could hardly be considered a ringing endorsement.) Too often voters are too lethargic or disillusioned to exercise their democratic right.
No such complaints can be made about the 2004 presidential elections. Public participation has been huge. It started with voter registration. Hundreds of thousands of new voters registered to cast their ballot in 2004 - another factor that made the result impossible to predict. Many came from communities and groups who have traditionally been on the margins of the electoral process in the US. African-Americans, in particular, became much more involved in the decision over who would be the next US president. The democratic strengthening inherent in this is self-evident.
The degree of voter turnout is also a notable feature. Some estimates put the turnout at over 80 per cent. Massive lines were seen in state after state, as people queued patiently - often for a few hours - to make their choice. The fact that they had to queue for hours showed another remarkable aspect of 2004: the inability of the US to conduct an efficient election. There were numerous stories of staff shortages at polling stations, of machines not working, ballot papers misplaced in the post - one would have thought the world's only superpower would have been able to conduct an election without these "developing world" logistical problems.
The result will be out by now: victory for Bush, victory for Kerry or a tie and messy legal battles. Either way, it is a remarkable result. If Bush wins, remarkable for the survival of an incumbent whose policies have been so disastrous for America and the world. If Kerry wins, remarkable for the huge turnout and late surge of support that enabled it. And if it is a legal battle, remarkable for the closeness of the outcome. As one voter put it: 'This is the most remarkable election of a generation.'
Collapse of good sense
Why is it so hard for politicians to behave with honesty or dignity in public forums? Television viewers in late September were treated to the sight of the US Congress rapturously applauding former CIA contact and now interim Iraq prime minister Iyad Allawi who told them that "we are succeeding in Iraq" and that the overwhelming majority of Iraqis were grateful to America.
He must have meant an 'overwhelming majority' minus one hundred thousand Iraqis, mostly women and children, who, a new Lancet study estimates, have died as a result of the utterly unnecessary invasion. It's one thing for members of the Congress to be diplomatic and quite another to fawn unashamedly over a pawn. The fawning, to be sure, was not for Allawi alone but for his masters in the White House.
Given the ovations interspersing Allawi's speech, one might imagine he had brought peace and harmony to Iraq. Yet a quick check back to planet Earth revealed that US casualties were mounting, innocent Iraqis were being slaughtered, hostages were being grabbed and beheaded, Shia and Sunni insurgents were battling implacably on, and that the whole grisly situation was out of control. Contrary to Allawi's happy talk, Iraq had not rolled over and asked the US neocons to tickle its belly. Still, the US Congress applauded Allawi.
The televised spectacle was nauseating because most Democrats, and a good few Republicans, in attendance knew full well that the Iraq invasion was a wildly misconceived catastrophe and that there is no graceful way out except to leave as fast as possible. These same congressmen and women had been deceived into war by a Bush administration that treated them with bemused contempt. All's fair and no holds barred.
Indeed in the televised October debates Bush and Cheney doggedly told the same old lies about WMD and Al Qaeda connections in the same folksy tones, occasionally throwing in a new whopper. No person with a smidgen of self-respect who knows the realities of the war could have hailed Allawi, and thereby approved the administration which concocted him.
While it's not hard to see why the Republicans want to whistle past the new graveyards they are creating every day in Iraq, why did many Democrats play along? The sad reason is that the US legislators were snared in a simple-minded yet powerful ideological trap. American politicians do not dare to appear to do anything that remotely can be construed as undermining 'the war effort,' as defined in stringent right-wing terms: 'Our country - right or wrong.'
That is why John Kerry trumpeted his military credentials ahead of any progressive policies on health, jobs, and welfare that he may (or may not) harbour. No matter how unjust or crazy or counterproductive a war may be, it is somehow a betrayal of 'our' troops to point out disturbing facts. Never mind that especially today neither the leaders themselves nor their privileged offspring have any combat experience.
Never mind that the Bush administration had tried to cut combat pay, slash support payments to military families, and cut health access to veterans. Never mind that self-styled patriots such as these are usually the very people who most betray the troops.
During the Vietnam war the sentiment that the right wing ideologues whipped up about "supporting our troops" enabled them to prolong that hideous war - which navy veteran John Kerry bravely denounced in 1971 - for several years beyond the clearest evidence of its total futility. In so doing, these truculent patriots, who sought to stamp out dissent through government repression and private harassment, were full accomplices in the deaths of many more American troops, and all for nothing but their precious pride.
But that is a hard truth that you will never ever encounter in the corporate controlled American media. No matter how stupid or ill-conceived the reason, once troops are on the ground there is nothing to do but more of the same. The key exception to this numb-skull rule is Republican Presidents like Reagan, who pulled American forces out of Lebanon in 1981 after a car bomb killed 256 Marines, or the Bush senior administration which skedaddled out of Somalia in 1992 after 18 soldiers died in street fighting. Right-wingers are extremely good at forgiving and forgetting their own sins and errors, but never those of others.
Perhaps one quarter to a third of the US population is hopelessly right-wing so there is great deal of reliance on media control. Over many decades half the American electorate, the poorer half, have been systematically discouraged from voting which leaves the electoral field to the more affluent half and plays entirely to Republican advantage. The Republican campaign was geared to voter suppression for they have nothing but empty promises and scams to offer to the far from wealthy majority.
An imperial leadership, of course, lauds its troops only so long as they are useful. The flap over the missing arms in the Al Qaeda dump stirred the Republicans like Rudolph Giuliani and Richard Armitage to blame the problem on the troops while Bush nonetheless blithely claimed that it was Kerry blaming the soldiers. In the latter years of the Vietnam war many Americans, the very sort who today believe that Saddam caused 9/11, imagined the US was fighting to get its prisoners of war back, as if those prisoners had been snatched off the streets of America by the Vietcong.
Pakistan is no exception to public hypocrisy. Recently in the Punjab Assembly a dialogue over the proper apparel of Musharraf - uniform or an expensive suit - wound up in a ridiculous climax where the parliamentarians hailed President Musharraf and beseeched him to wear his army uniform into what is an allegedly democratic decision-making institution.
Let us, by contrast, recall a television tape of Saddam Hussein in July 1979 slithering into the Iraqi Baathist Assembly and relishing the sight of his henchmen dragging one politician after another to execution. In the midst of this ghastliness frightened legislators leaped up to scream their undying (they hoped) devotion to Saddam, with terrifyingly sincere tears in their eyes and lumps in the throats they hoped he wouldn't cut. They at least had an excellent excuse we can all understand. What were the other politicians afraid of?
Any remark that a US right-wing media can portray as designed to demoralize "our boys" out in the Gulf still must be avoided at all costs. That is why in November 2001 many Senators who knew better, including John Kerry and Hilary Clinton, voted to award George W. Bush power to intervene wherever this utterly unfit leader saw fit.
Yet this craven collapse of good sense was nothing new. In August 1964 only two senators dissented from the Tonkin Gulf resolution that gave Lyndon Johnson permission to do whatever he pleased in Vietnam. LBJ was himself driven into stupid excesses by fear of the Right: "Don't pay attention to what those on the campuses do," he told an associate in the mid-1960s. "The great beast is the reactionary elements in the country. Those are the people we have to fear."
John F. Kennedy in 1960 played to the right of Nixon to win. With a complicit media, no one need tell the truth anyway. Lacking a courageous opposition, devious motives are prettily packaged in propaganda words like "freedom." Americans go on killing and dying for nothing.
Arafat symbolizes the Palestinians' struggle
Yasser Arafat's serious illness, currently being treated in France, was expected in view of his well-publicized history of ill-health. Nevertheless it provoked a state of shock and grief amongst Palestinians and a storm of media interest worldwide. As news of his illness broke last week, a large posse of international journalists crowded into the area outside Arafat's compound in Ramallah and all the world's television stations and major press has carried coverage of the event ever since.
This is a remarkable achievement for a man whom Israel and America (and increasingly the rest of the world) had discredited and marginalized and, since 2002, relegated to oblivion in a couple of tiny, poky rooms inside a bombed-out compound in Ramallah.
Few other world leaders would command such attention. Clearly, Arafat remains pivotal to the Arab-Israeli conflict, despite Israel's best efforts to make him politically irrelevant. The humiliation of Palestine's most famous political leader has been an insult and a source of deep anger to the Palestinians (and many Muslims), irrespective of their own differences with him.
It is astonishing that the demeaning imprisonment, denigration, and delegitimization of this man, an elected leader of his people and their chosen representative, have become acceptable in western circles. Arafat was elected in 1996 in democratic elections in the Palestinian occupied territories, judged by foreign monitors as free from corruption, (far more than can be said for any other Arab leader). And yet even tyrants like Chile's Pinochet and Serbia's Milosevic have been treated with more respect.
Israel traditionally viewed Arafat as an enemy and a "terrorist". But with the signing of the 1993 Oslo agreements he was briefly rehabilitated and, with Yitzhak Rabin, was awarded the Nobel Peace Prize. Since 2001, however, Ariel Sharon has instigated an intensive campaign of Arafat demonization and political destruction, faithfully adopted by an ever pliant Washington and now, regrettably, by Britain too. In this Israeli demonization, Arafat is the head of a terrorist network of suicide bombers, runs a uniquely corrupt regime, and is incapable of being a genuine negotiating partner.
To make the point, Sharon put him under house arrest at the end of 2001, bombed his compound, refused to deal with him and tried to bar others from doing so, and insisted that Palestinians appoint a "prime minister" as negotiating partner. So effective has this portrayal been that it is a commonplace now for ordinary observers to reiterate the same allegations.
The truth is of course that Arafat has done what no other Palestinian leader was prepared to do: to sign a peace agreement with the very state that caused the Palestinian tragedy and to engage in a peace process with it that endured until 2000. It was the Camp David talks with Israel and the US that year, which demanded of Arafat concessions over Jerusalem and the Palestinian right of return he could not make, that caused the breakdown.
Israel's spin on this was that Israel's negotiator, Ehud Barak, had made Arafat a "generous offer" which the other rejected because he was not interested in peace. He then proceeded to orchestrate the intifada, which erupted in September, and is responsible for the terrible depredations of his people since then.
But had Arafat accepted the discontinuous segments of West Bank and Gaza territory Israel offered for a Palestinian state and agreed to sign away Palestinian sovereignty over Arab Jerusalem, as well as negate for ever the refugee right of return, neither he nor any other Palestinian leader would have survived
The Palestinian attachment to Arafat does not stem from uncritical devotion or blindness to his faults, but from an understanding of his achievements. Though his efforts, he put the Palestinian cause on the world stage when it had been relegated to history. In the Britain of the 1950s where I grew up, even the word "Palestine" disappeared from the vocabulary and its people became obscure "Arab refugees".
How thrilling, therefore, to see Arafat in 1974, accepted and acclaimed, deliver his gun and olive branch speech at the UN, and feel the excitement at that validation of the Palestinians as a nation with rights. First meeting him in Beirut in 1976, when the PLO was at its zenith, I was deeply taken with his charisma, modesty and sharp intelligence, so different from the sinister image of him Israel promoted. As PLO chairman, he represented a dispersed and fragmented people, 60 per cent of them in exile, and managed to imbue them with a sense of belonging in the absence of a homeland.
Westerners, who focus on his dishevelled, half-shaven appearance and poor English, never understood his appeal for his own people, especially the disadvantaged in the camps whose cause he espoused, and their admiration for his political agility in a treacherous Arab arena. Unlike other Arab leaders, he cultivated non-aligned and Islamic countries, like India and Pakistan, (the last Indian BJP government was an aberration), and was a well loved figure there.
No one doubts he made mistakes. His many Palestinian critics, like the late Edward Said, deprecate his autocratic rule, cronyism and refusal to delegate. But his loss would be irreparable. To Palestinians, he is an enduring symbol of their struggle and the father of their nation. For 40 years, he has been their leader, the only one many of them have ever known. His dedication is legendary.
He has no personal life, no home and no hobbies. Palestine is his sole, overriding preoccupation. In today's desperate Palestinian situation of harsh military occupation, dwindling territory and fragmentation, he symbolizes the unity of the Palestine cause and the negation of a Palestinian dissolution Israel so vigorously pursues.
Sharon understands this well, and hence the drive to demolish Arafat as that symbol. The process started with the Oslo agreement, when Arafat and the PLO leadership moved from Tunis to the "inside" in 1994. The exiled Palestinian majority and the refugees were left orphaned and leaderless, and remain so. This damaging division fulfilled an old Israeli ambition: to whittle down the Palestinian issue from national to local level, and offload Israel's responsibility for it. With luck, Arafat would become a village mukhtar, fobbed off with the trappings of state but no proper territory, and the right of return could be buried forever.
It never worked and the overwhelming grief and support for the Palestinian leader tells its own story. His successor will be difficult to find and the danger of a power struggle and even civil war is very real. If he dies, the Palestinians will need their friends in the Third World more than ever before.
The writer is a Palestinian academic and activist.