| July 16, 2005 | Saturday | Jumadi-us-Sani 8, 1426 |
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Déjà vu in Dir
Beach safety measures
THE tripartite meeting between federal ministers of state, bankers and top representatives of the stock exchanges scheduled for today is an indication that the phasing out of badla, despite temporary suspension by the regulators, continues to cast its shadow over the country’s bourses. The meeting comes in the wake of the decision of the Karachi Stock Exchange to remove the cap on badla investment fixed by the Security and Exchange Commission at Rs12 billion, leaving the choice to the investors to seek finance either through Carry Over Transactions (COT/badla) or margin financing. According to the bourses, margin financing by banks was moving at a snail’s pace while badla investment was being curtailed on a weekly basis. The bourses resent what they think is micro- managing of the market as badla investment is seen by them to be drying up. As the perception of the market players and the regulators remained divergent, the bourses also sought the intervention of the government. Responding to the call, the adviser to the prime minister on finance and the minister for finance have jointly convened a meeting of heads of stock exchanges and senior bankers. The bourses complain that banks have not carried out their commitment to make Rs20 billion available for margin financing saying that they have provided for an amount close to the committed sum.
With banks privatized, the regulators do not have much leverage left to persuade banks to do anything as was the practice when the nationalized sector of banking dominated the market. The decisions can be implemented only on a voluntary basis if divergent interests tend to coincide. Some bank analysts are of the view that the real issue in margin financing from the banks’ security point of view is that they must get immediate delivery of shares in their CDC account against margin finance. They also want to exercise their option to invest in selected scrips and lend money to creditworthy borrowers. An efficient system of immediate delivery of shares, which involves the investors, brokers, CDC, banks and stock exchanges, is not quite in place, because the regulators normally intervene when issues turn into difficult problems. The phasing out of badla by brokers and its replacement by margin financing has been on the cards for a long time but not enough was done to ensure a smooth switch-over.
Whatever its merit, badla is viewed by many as a cause of systemic risk, market abuse and speculation that is believed to have been responsible for the crash of the market in March this year. Under badla, the brokers borrow cheap from banks and lend the money to their customers at rates much higher than those of bank borrowing. Brokers lend a higher proportion of the share value under COT than under margin financing which is allowed up to 70 per cent. Conscious of its demerits, the risks in badla have been recently minimized by a set of prescribed rules by the regulators. The reform process initiated in the early 90s need to be continued in the interest of the capital market. In the given situation, however, the regulators, stock markets and banks need to cooperate to resolve a thorny issue, while acknowledging each other’s legitimate interests, rather than taking adversarial positions.
THAT political and religious leaders in Dir do not want women to contest the upcoming local body elections brings a distinct sense of deja vu. A lot of ruckus took place in the last general elections when similar directives were issued and many zealots took it upon themselves to beat up NGO workers engaged in mobilizing women to cast their votes. Even the more liberal political parties had withdrawn their female candidates in the region from filing their nomination papers — a move that was strongly criticized by the parties’ central leadership which said it had never issued such a directive. Flash forward to the present and exactly the same thing is happening now. Local political and religious leaders in the Frontier entered into an agreement on Wednesday barring women from participating in the local polls. However, on the same day in Islamabad the PPP’s and PML-N’s central leadership opposed any such moves and denied the party’s involvement in the agreement. If that is the case, both parties should strongly consider taking disciplinary action against any member who may have violated the party’s rules. It is unthinkable for liberal-minded parties to support moves or campaigns that are detrimental to women’s interests. It should instead try to bring round those who oppose women’s participation in the electoral process to a supportive stance. It is more important that they do this now given that the Hasba bill has been passed and is likely to adversely affect women.
There should be no confusion about a woman’s right to contest an election or cast her ballot; it is her constitutional right, irrespective of what retrogressive elements may think or say on the issue. The argument that women voting in polls is against local traditions no longer holds true in this day and age. With an increase in their representation at the national, provincial and local levels, women are headed towards empowering themselves. They need strength in numbers if they are to uplift women’s lives or fight against draconian laws that work against them. No one should allow this process to be reversed or obstructed by a few obscurantists stuck in the past with their narrow-minded views. Anyone who bars women from participating in the local elections should be opposed for preventing them from exercising their constitutional right.
WHILE one appreciates every small move the authorities take to implement safety measures at Karachi’s beaches, it is uncertain how seriously bathers take these measures. Of late, the local authorities have put up orange flags at designated spots along the beaches to indicate the availability of lifeguards and to warn beach-goers not to proceed beyond a certain point. Until recently, the absence of lifeguards had been keenly felt by bathers, some of whom have perished in the turbulent waters, and this measure should be largely welcomed. But if the past is any pointer, it is doubtful whether, given the general disregard for rules and precautions in society, the beach-going public will heed the advice not to go into the sea. In the past, despite warning signs posted along the beaches, they have frequently succumbed to the temptation of testing the waters, even though most of them did not know how to swim.
There is no doubt that the local authorities must strive to strengthen safety measures at sea and acquire items like motorboats and life jackets needed for rescue operations, in addition to increasing the number of lifeguards along the beaches. Owing to shortage of funds, the government has been unable to procure even essential safety devices. But it also needs to be mindful of the more important task of spreading awareness among members of the public about the risk to their lives and to their friends and families if they are not careful about following beach safety rules. This becomes doubly necessary during the monsoon season when the sea is more turbulent and undercurrents beneath the surface are stronger. The government will find that regularly apprising the public — including schoolchildren and college students — of the dangers of bathing in the sea could prove the best safety measure of all.