Complex rehabilitation task

THE government has raised the total compensation for those whose households were destroyed by the Oct 8 earthquake in Azad Kashmir and the NWFP from 20 billion rupees to 80 billion rupees. This is an average of Rs 26,666 per capita. This step has been taken following the very successful international donors’ conference, held in Islamabad on Nov 19, where pledges had amounted to six billion dollars.

But a number of people from that region say they have not received even the initial Rs 25,000 per surviving family. And that is very disquieting, especially as an official statement says that eight billion rupees have been distributed among the survivors of the quake, or 10 per cent of the total.

An additional four billion rupees have been released for the victims in Azad Kashmir and the NWFP, says the relief commissioner Major General Farooq Ahmed Khan. He says that the initial 20 billion rupees announced by President Musharraf would be distributed among the quake victims until the beginning of December.

He says about 500,000 tents have so far been provided, but the need is for winterized tents to ward off the bitter cold and snow which has begun falling in the upper mountainous region. These tents are in short supply. China has provided 13,000 winterized tents, the US 10,000 and some more have come from other countries. This deficiency has to be plugged quickly, especially in the upper regions of the affected areas.

President Musharraf says that every affected family would be given Rs 150,000 to rebuild their homes in addition to Rs 25,000 for those who are rebuilding them according to quake-resistant specifications.

A team of four Nepalese experts in quake-resistant construction has arrived in Pakistan to train our engineers and builders in quake-resistant building technology. The extra cost will be only 10 per cent more, they say. They will be here for four months. We should make the best use of their expertise in earthquake-resistant housing, which is imperative because of the many aftershocks that northern Pakistan has continued to receive after the 0ct 8 quake.

The minister for Kashmir Affairs, Faisal Saleh Hayat, has announced a large sum for every household which has lost five lives. Announcing such compensation figures may be easy, but what matters far more is actually providing the promised funds and in good time too.

A new national volunteer movement has been created to help in the relief and reconstruction work. The first batch, which left Islamabad, was seen off by the president and ministers. The small force can become big and exceedingly useful if it performs well.

Volunteer setups in the past have seldom been very successful, and that must not be the case this time. The government is trying hard to make the handling of the quake relief funds as transparent as possible to prevent their misuse or waste. It has now set up a president’s earthquake relief fund monitoring committee with Dr Ishrat Hussain as its chairman. Former finance secretary Moin Afzal, former chief of Ferguson Khalid Rafi, and former food minister Khair Mohammed Junejo along with others are its members. The auditor-general will audit the quake relief funds, and the private sector auditor Ford Rhodes will also audit the accounts. The donors are welcome to suggest more auditors if the need be.

The opposition members are unhappy that around four billion dollars out of a total of six billion dollars have been pledged as loans. The more critical elements in the opposition have termed the donors’ conference as a lenders’ conference and accused the government of mortgaging the country for 40 years and of adding to the debt burden and annual interest payments, even though the interest payments will not start until after 10 years.

The fact is that the country has two options: either get a little funding in the form of donations only — that would be about two to two and a half billion dollars — or over six billion dollars as a mix of grants and loans. The West, suffering from donor fatigue after last December’s tsunami, is not in a mood to gift away large sums. Nor will their parliaments permit that.

But we need far more than what we can get as grants and the earthquake survivors cannot wait for too long for their rehabilitation and the reconstruction of the shattered infrastructure of their areas to begin.

What is far more important is that the money received as grants or loans is well spent and that it produces the results promised or needed. Let our political leaders, including those in the opposition, refrain from looking out for freebies as we are doing that too often. That produces less aid and encourages more dependency.

Now, we are expected to ask Saudi Arabia, which gave us a grant of $350 million for quake relief, for a new oil facility worth a billion dollars a year. We had asked for the same facility immediately after we exploded a nuclear device as the first Muslim country in the world. That facility expired last year. President Musharraf is now expected to ask for the resumption of the same facility when he visits Makkah next month for the special OIC session and Pakistan is hopeful of getting the concession.

But the world may not want to follow the Saudi example. While helping Pakistan monetarily to build its devastated infrastructure in the north, it prefers to lend us the sum we ask for instead of giving it as a grant. We are asking for the resumption of the oil facility as the price of oil has shot up and is causing problems for the balance of payments which cannot be sustained for long.

The World Bank and the ADB borrow money from the market and re-lend it. So does the Islamic Development Bank. Together, the three banks have offered 2.5 billion dollars in soft loans to Pakistan. If the interest rate is not half per cent, it is not more than one per cent as the IDA credit now costs three-fourth per cent in service charge. Money does not come that cheap in the world’s money markets. We should welcome such soft loans instead of dubbing the donors as moneylenders.

We must inculcate in us a businesslike approach to borrowing and make use of such funds judiciously to make ourselves financially strong instead of needlessly developing a victim’s complex.

If our past experience of borrowing and wasting funds has left a bad taste, we ourselves are to blame for indiscriminate borrowing and mindless use of such funds. The lenders are not to blame.

The opposition wanted parliamentary supremacy over the rehabilitation and reconstruction work, and the prime minister as chairman of the 19-member parliamentary committee for rehabilitation and reconstruction. That demand has been accepted by the government. The parliament should now be able to oversee and monitor the work of rehabilitation and reconstruction and ensure that the borrowed money is well-spent.

It appears that some of the donors who have their network here like USAID and various United Nations organs will use the aid funds directly. The Asian Development Bank wants to distribute its funds to the provincial and local governments directly. There should be no serious objection if its work is well coordinated with the work of the Pakistan government and with the work of other agencies. Duplication must be avoided, and the parliamentary committee should approach the complex problem in a non-partisan manner, and very constructively.

Even the treatment of the injured is a gigantic task. So far, 218,715 persons have received medical attention. The figure for those hospitalized is 86,059. Doctors have performed 19,045 surgeries, while there have been 665 amputations. The number for those that are still hospital for further treatment is 9,288.

In view of the gigantic task spread over a vast area, the government has asked friendly countries to open branches of their hospitals in the quake-hit areas. Then there is the problem of psychological rehabilitation needed by many traumatized victims, which is a complex task. And their treatment may take a long time, particularly of those who have lost their near and dear ones in the quake.

Major General Farooq Ahmed Khan has acknowledged the helpful role of the NGO community, instead of being dismissive about their role like so many other officials. A lot more work remains to be done in the vast affected area. Jobs have to be created for the victims, where there is no job now and the infrastructure has to be totally rebuilt following the clearance of the main and secondary roads. In this difficult task, the government, parliament, NGOs, doctors and the people as a whole have to make a positive contribution and cooperate fully with each other.

Turning disaster into opportunity

IT appears that everyone wants Pakistan to mobilize the much-needed resources for relief and rehabilitation of the millions devastated by the deadly earthquake of Oct 8. In the two donors’ conferences held at Geneva and Islamabad a sum totalling over six billion dollars in external aid has been pledged — approximately two billion dollars as grants and four billion in loans.

The government has done well by mobilizing these resources and we must also acknowledge that the international community has continued to be generous towards meeting the myriad challenges thrown up by the earthquake. That was hard work; but the more difficult part is beginning now. Even though over four billion dollars of loan money have been collected, it would not be wise to use up all the debt portion of the aid package.

Pakistan’s external debt has been increasing over the years. The country’s external debt that stood at $30 billion in 1996 jumped to $37 billion in 1999, and in 2005 it stands at $35 billion. If the loan money raised at the donors’ conferences is utilized, it won’t be long before we have over $40 billion in debt and little capacity to service it.

Already Pakistan’s external debt servicing ratio to its export earnings is the highest in South Asia. This would further raise debt servicing to about 30 per cent of the country’s export earnings compared to 12.5 per cent for India and 10 per cent for Bangladesh, making Pakistan the most debt-ridden country in the region. Any change in the external environment could push the country back to the defaulting zone like in 1999.

Any argument that we would be very rigorous and efficient in the utilization of loans this time does not hold much water — not so much for lack of good intentions as for lack of good operating systems. Consider the following facts.

Our current high level of indebtedness owes much to the misapplications and even misuse of funds. The reasons for the widespread malaise are many and range from irrational and arbitrary decision-making to defective designing and implementation and plain waste of funds. Instead of creating assets that would generate adequate social and economic dividends out of the “projects” financed by these loans and help service these debts, many of these added to the debt burden that future generations would have to pay.

Governments have historically resorted to debts as a preferred mode of financing wars, conflicts and addressing major natural disasters. While it gives them the immediate benefit of bypassing the need for tightening their belt, the costs are passed over to the lumpen masses and their future generations to pay.

This bad habit is not just limited to the public sector. Our private sector has also not been a very efficient user of the loans as is evident from the over 4,000 sick industrial units and over Rs 250 billion of write-offs of public money advanced through bank loans which have been written off, in addition to a large portfolio of non-performing loans.

That brings us to the need for devising strategies that would help stretch the money to achieve more with less. Many who have been associated with community work know that by working with communities, using their knowledge of local conditions and materials, availing of their skills and involving the beneficiaries along the way, the same results could be obtained in many cases at a quarter of the cost otherwise incurred through a centralized system of contracting out projects with a business-as-usual approach.

Here is another example. Some time ago, a countrywide programme of constructing ‘agrovilles’ was started with the intention of providing income-generating activities along with housing to poor rural and urban dwellers. Because of poor strategy and a centralized system of contracting out works, over 80 per cent of the money spent on this programme benefited outsiders — under various labels — and only 20 per cent of the benefits from this programme were received by local communities for whom the scheme was originally planned.

Therefore, the litmus test for the success of the strategy for rehabilitation involving billions of dollars should be measured by the benefits it delivers to those affected by the earthquake. Many committees that have been announced by the government for supervising, monitoring and overseeing these programmes would have done their duty if they could ensure, through their supervision, an 80:20 share of the benefits between local and outside elements.

The freezing Himalayan winter is going to inflict another tragedy soon upon the devastated areas and a great deal of rescue and relief work will need to be undertaken during the next four to five wintry months. It would be time well spent to work out the details of such a strategy that would deliver the big bulk of the benefits to the survivors of the tragedy.

Thus it would be advisable not to incur any additional debt burden for at least three practical reasons: our debt burden is already the highest in the region; our utilization of loans, whether in the public or private sector, has been very inefficient and has constituted a burden without benefits; and, lastly, cheaper and better strategies exist to accomplish the objectives at much lower costs.

It would be cheaper to fill in any gap still remaining after the grant money is fully utilized by internal adjustments of domestic priorities or using a minimum portion of the cheapest of the loans.

A point to note is that the proceeds from the privatization of publicly owned assets were supposed to have been applied towards reducing the external debt of the country. Over the years, the privatization programme has generated the rupee equivalent of about five billion dollars. So why is it that, instead of going down, the debt, which was $30 billion in 1996, jumped to over $37 billion in 1999 and, in the aftermath of 9/11, stands at $35 billion? Why have all the proceeds from privatization not caused much of a dent in our external debt?

Higher levels of transparency and accountability outlined by the head of the Asian Development Bank and others and agreed to by the government would certainly go a long way in stretching the money to meet many more needs than otherwise. The detailed rules and procedures for the use of funds being worked out between the donors and the government should also be made known to the people to do their own monitoring and feel satisfied with the flow of funds.

As the bulk of funds would flow through governmental, non-governmental and private parties this rigorous code of conduct should apply across the board for everyone associated with these funds. We should not forget the lessons from the Volcker report on the misuse of funds in the oil-for-food programme that aggravated the tragedy in Iraq.

The president has talked of turning this disaster into an opportunity for radically improving things for the affected families. This opportunity should not be restricted to the people affected by the earthquake in Azad Kashmir and the NWFP. Not only should we learn from modern methods of disaster management, we should also apply the same respect and care to the taxpayers’ money as other nations do, so that no fingers are pointed at us. Besides, Pakistan’s domestic resources are no less sacrosanct than international aid.

Incorporating these standards and their enabling rules and procedures into our national financial systems for compliance by the public as well as the private sector would enhance the transparency, efficiency and accountability of the way we conduct our national affairs, and help protect the country from the many ills that have been eroding its social, economic and political fabric.

There are international studies to confirm the fact that this will lift Pakistan almost overnight into the category of the middle income countries of the world, apart from giving it a more respectable position than at present on the Transparency International index. That would give real meaning to turning this disaster into a better opportunity for the people of Pakistan.

Email: smshah@alum.mit.edu

Beneath the glitter of democracy

THINK of it as the Sinatra test. On Sunday, assorted liberal, democratic and opposition groups will take on the might of Vladimir Putin in elections for the Moscow city parliament. This should be fertile terrain: the capital city is packed with well-educated, enlightened folk and was once seen as the citadel of Russia’s pro-democracy movement. Put another way, and to paraphrase Ol’ Blue Eyes, if the opposition can’t make it here, they can’t make it anywhere.

But they won’t make it. You don’t need to be a pollster to know that Putin and his United Russia party are on course for a thumping majority on Sunday. Merely travelling around the city, as I have this week, spells it out. It’s his party which has grabbed the giant hoardings — along with the national colours and the age-old symbol of the Russian bear — leaving the opposition to stand on freezing street corners, handing out photocopied flyers.

How come Putin, now five years into his presidency, is so dominant? If this was normal politics, you’d say Putin is popular because he has restored national pride, a welcome antidote after the Yeltsin years, when the antics of their wobbly, drunken president embarrassed most Russians; he has made voters believe that Russia can be a great power once more; and, above all, he has presided over a phenomenal economic boom.

That’s not just the wealth whose naked visibility is such a shock to someone who last came here in 1988 — when every shop looked like an empty stockroom, when the entire country was painted in the bleakest shade of grey, and when retail activity was confined to buying a slab of frozen margarine claiming to be ice cream. Now the streets heave with Mercs and BMWs; Louis Vuitton and Christian Dior sit directly opposite Lenin’s tomb in Red Square; and the casinos of Novi Arbat are lit up in enough throbbing neon to make it the Las Vegas of the east. Sip tea in Cafe Pushkin and you can well believe that Moscow has more dollar billionaires than any other city in the world (36 at last count) or that Russia numbers its millionaires at 88,000.

But it’s not just the oligarchs with their Lamborghinis who have got richer. The national GDP has more than tripled to 700 billion dollars, while average monthly wages have gone from $80 in 2000 to $200 today: not massive, but enough of a surge to explain why most Russians are happy to keep Putin at the helm.

That would be the explanation if Sunday’s election were a normal one in a normal democracy. But Russia can hardly make that claim. Yes, there are freedoms that would have been unimaginable when I was last here: you can meet Sasha Petrov of Human Rights Watch in his office — rather than at a secret rendezvous — and he will tell you of his fear that Russia is moving towards a “one-party state” out loud, rather than in whispers. There are independent websites, as well as newspapers that criticize the government. Basic freedoms — to move around, to worship, to own private property — are now taken for granted. But democracy is a different story.

Television gives airtime to Putin and to a couple of licensed critics, chief among them the clownish xenophobe Vladimir Zhironovsky, whose anti-Semitic rants are tolerated, if not sponsored, by the Kremlin as a useful outlet. Otherwise, no one gets a look in. Hardly a surprise, since every national TV network is now either state-run or owned by a state-run company.

Denied access to television, where Russian politics is fought, opposition groups are also starved of cash. The Kremlin saw to that when it prosecuted and jailed Russia’s richest man, Mikhail Khodorkovsky. Whatever the official charges against him, his real crime was clear: he had political ambitions. The message went out to Russia’s business elite: enter politics and we’ll take you down. The result is that few now dare fund any opposition activity. With the rules tightening on foreign involvement in NGOs — which could see a raft of think-tanks and human rights groups closing down — the political space is shrinking.

These days, if you want to hear the opposition message you have to go out and find it. I went to the HQ of Yabloko, a pro-western liberal party that will be lucky to make a blip on Sunday. Its leader, Grigori Yavlinsky, polled 22 per cent against Putin in the 2000 presidential election; now he can barely get a hearing. To describe the state of Russian democracy, he tells the joke of the patient on a trolley who asks the hospital orderlies where they are taking him. “To the morgue,” they say. “But I’m alive!” he insists. “We’re not there yet,” they reply.

In other words, Russian democracy may still have the outward signs of life but not for much longer. Petrov says the political system is a “waxwork”: it resembles a real system, with presidents and parliaments and elections, but don’t be misled; it is a fake. All power, every decision that matters, is in the hands of one man. Putin handpicks the mayors and regional governors who were once elected; he appoints the heads of the vast oil and gas companies, in which the state is the single biggest shareholder, and these men sit in the Kremlin as his ministers. The boundary between business and government is erased and atop it all sits Putin, the 21st-century tsar.

It’s as if the president is offering two grand bargains. The first is with his people. You give up democracy, he says, and in return I shall give you prosperity. You may not be able to vote in meaningful elections, but you will be able to bank on the value of the rouble. And, while the price of oil remains high, I will make all of us better off.

Putin’s second offer is to the world. Let me guarantee you a steady supply of the oil and, especially, the gas on which you rely. While I’m at it, let me help you with troublemakers such as Iran, Afghanistan or North Korea, bringing them to heel. But, says Putin, in return you must treat me with respect.

I got a sense of what that respect might entail in a meeting at the Kremlin. Led through the long Soviet-style corridors into the office of the chain-smoking spokesman Dmitry Peskov, I was told: “We’re an economic power ... we’re strong enough to prevent anyone interfering with our interests.” Translation: we are players once more; we insist on a free hand in Chechnya and beyond.

Should we accept this bargain? The former chess champion Gary Kasparov, now active in Russian politics, wishes we wouldn’t. After an opposition rally in a Moscow theatre on Monday, he explained how the West could force Putin to democratize: by hurting Putin’s oligarch friends abroad. “You hit an opponent where he is weak, and his weakness is the bank accounts of his friends.” Investigate those, says the grandmaster, and Putin will soon get the message.

Somehow I don’t think that’s going to happen. Realpolitik says we want cheap gas; we like having Russia, sandwiched between India and China, on side; and we find it useful having a “strong man” to deal with. That’s good news for Putin and whoever he chooses to succeed him in 2008. It’s bad news for the democrats fighting the chill in Moscow — who have learned to expect nothing else. —- Dawn/The Guardian News Service

Jump-starting reform

PRESIDENT Bush’s renewed call for a guest worker programme should prod congressional lawmakers to refocus on immigration reform. However, he faces an uphill battle in a divided Congress and within his own party, where there is opposition to the proposal that would allow immigrants to work legally in the US for temporary periods. Nonetheless, Mr Bush should put what political capital he has left behind this issue. The stakes are too important for any more delay. The population of undocumented immigrants has swelled past 10 million.

Although the White House has been courting lawmakers who support the president’s plan, Mr Bush has not been a consistent cheerleader for his plan. He allowed political pressure to force him to back down from a provision that would have allowed undocumented immigrants to legalize their status. Fortunately, a bipartisan proposal in the Senate includes legalization along with strong border-security measures.

Mr Bush has outlined steps the Department of Homeland Security has taken to protect the borders, including using more technology to intercept crossers, increasing detention space to hold more of those captured, and repatriating those apprehended to the interior of Mexico. These measures make sense, but they will be ineffective without a guest-worker plan that lets immigrants to work here without risk of arrest and deportation.

— The Baltimore Sun

Bosnia’s slow progress

BEFORE the war in Iraq, Bush administration policymakers used to deride the elaborate nation-building regime the Clinton administration and the European allies created in Bosnia. Now, perhaps, they might learn something from it. Ten years after the United States brokered the end of a bloody civil war that killed more than 200,000 people, Bosnia remains at peace and is inching toward reconciliation, thanks to the continued presence of western peacekeeping troops, an international overseer and aggressive multilateral diplomacy. Its leaders agreed last week to prepare constitutional reforms by next March that will knit the country closer together and make effective policing and foreign investment more feasible. They also opened negotiations with the European Union on an association agreement. Though it will probably take another decade, the bloodiest battleground of the Balkan wars of the 1990s at last appears headed toward becoming a stable part of Europe.

To its credit, the administration has helped Bosnia along in recent months after conspicuously ignoring the Balkans during President Bush’s first term. Undersecretary of State Nicholas Burns pushed for the constitutional agreement, which was announced in Washington; he also persuaded Bosnian Serb leaders to publicly call for the surrender of indicted war criminals Radovan Karadzic and Ratko Mladic. The reforms are meant to remedy the weaknesses of the 1995 Dayton accords, which created a loose confederation in Bosnia featuring two self-governing republics and three presidents. Though it succeeded in ending the war, the peace deal left Bosnia to limp along under a powerful international high commissioner; some 7,000 of the 60,000 US and European troops deployed a decade ago are still there. If the new reforms take hold, the high commissioner will relinquish power. But foreign troops will probably remain for some time, and Bosnia will remain under the tutelage of the European Union for years while preparing for membership.

Some of the architects of the Iraq invasion regarded Bosnia as an example of how excessive international interference could breed dependence and prevent postwar reconstruction. But the real lesson it offers is how active and sustained international intervention must be to rescue a failed state. Communities that have been slaughtering one another — like the Bosnian Muslims, Serbs and Croats — cannot create and accept a new political system overnight. Establishing security and rebuilding a minimal level of trust is the work of many years. After a decade of western peacekeeping, political supervision and development aid, Bosnia at last seems to be moving forward, but its own leaders say it may be another decade before they live in a normal country. As Americans think about how to stabilize Iraq and Afghanistan, Bosnia offers a sobering measure of what may be required.

— The Washington Post