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May 30, 2006 Tuesday Jumadi-ul-Awwal 2, 1427

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Opinion


Resisting the past trend
Too early to say goodbye
Physician, heal thyself
Bad business
Next step on immigration



Resisting the past trend


By Shahid Javed Burki

HAVING written three articles on higher education and the role in this area being played by the Higher Education Commission, I will now turn to another government endeavour: the one aimed at creating capacity in the countryside for bringing basic education and health care to the poor. Both initiatives — one directed at promoting higher education and the other at delivering primary education and basic health services to the disadvantaged in the countryside — aim at educating the Pakistani masses.

The great value of the latter initiative is that it aims to create the capacity to undertake human development by taking into account the cultural and social environment in which the government must operate. One important element of this effort is that it will use the local government system created by the government of President Pervez Musharraf.

However, before taking up this subject, it might be useful to provide a brief history of the way Pakistan has adopted various initiatives brought to it by the donor community. We will notice from this brief history that Pakistan had been the most diligent adopter of fads and trends in development thinking. This tendency may have changed under President Pervez Musharraf.

Pakistan has a long history of accepting whatever the donor community had to sell in terms of ideas for development. During the period of Ayub Khan, the Harvard Advisory Service brought central planning to the country. Under the watch of dozens of mostly American advisors, the government set up a complex system of planning that determined public sector outlays in the sectors and activities preferred by the authorities.

The system also included guidance to the private sector for investment. This was enforced, in part, by licences for establishing new enterprises. And, the government sanctioned its own expenditure by requiring careful cost-benefit analysis of all projects. It was during this period that the PC-1 form was born as a device for public sector allocation.

It was also during the period of Ayub Khan that the World Bank persuaded the government to set up a series of new public sector agencies for directing capital into favoured projects. Carrying the generic name of “development finance institutions” (DFIs), these government controlled agencies channelled donor funds into private projects. The DFI activity expanded rapidly; PICIC (Pakistan Industrial Credit & Investment Corporation) lent money for large industrial projects, IDBP (Industrial Development Bank of Pakistan) for medium-sized industrial projects; and ADB for agriculture. The public sector had its own DFIs — Wapda for irrigation and power, and PIDC (Pakistan Industrial Development Corporation) for industry.

Although the donors were involved in helping Ayub Khan’s Pakistan plan and disburse public resources, they were not engaged in the creation of an elaborate system of rural government that the military president called “basic democracies.” This was a system in which Ayub Khan placed a great deal of faith. He had two objectives; one to bring the government nearer to the people, the other to insulate him politically from the citizenry at large.

Unfortunately, it is the latter attribute of the system that has continued to dominate its assessment. While it was not prudent for the president to create a limited electoral college for the selection of the chief executive as well as the members of the national and provincial assemblies, it was wise to use the system for development purposes.

I have argued in some of my earlier works that the basic democracies system played a very useful role in two aspects: one, to facilitate the launch of the first green revolution and bringing service providers within the government bureaucracy closer to the people; two, to create a mechanism for building basic infrastructure in towns and villages. The latter function was performed by the use of rural works programmes in both East and West Pakistan. These programmes had the added advantage of creating jobs for the unemployed and the under-employed. (I know something about these programmes; I directed the one in West Pakistan.)

The donors continued to influence institutional development even when the administration of Zulfikar Ali Bhutto parted company with them in terms of following their basic development thrust — to promote development by relying on private initiative and enterprise. After all the large industrial, commercial and financial institutions were nationalised, the World Bank encouraged the establishment of two additional DFIs — the National Development Finance Corporation (NDFC) for assisting the several public sector corporations established to manage nationalised entities, and the Regional Development Finance Corporation (RDFC) for promoting growth of the relatively backward areas.

While accepting the expansion of the public sector during the Bhutto period, the donor community did little to prevent the new administration from effectively dismantling the system of planning put together by Ayub Khan. The Planning Commission lost its importance and the PC-1 form became a routine paper exercise. Often, government spent large amounts of money without careful scrutiny about cost and benefits. It is not surprising that the efficiency of public investment declined precipitously during this period.

In the 1980s, the donors began to move away from project lending towards an approach they called “lending for structural adjustment and policy reform.” This suited Pakistan since it provided the resource-short government with budgetary support in return for structural reforms. But the reforms promised remained on paper; with the war in Afghanistan raging and with large doses of American money having become available, there was little incentive — and even less desire — to undertake serious structural reforms.

Those had an even lesser chance during the 1990s when a series of governments headed by civilians took office in great expectation on the part of those who elected them and were driven out to the utter disgust and dismay of the electorate. While Pakistan was struggling to find its political feet, the donor community moved on towards new fads and goals. One of them was to encourage the private sector to developing infrastructure; the other to provide money for human development. The first fad brought independent power producers (IPPs) to the country; the second resulted in the launch in 1993 of the Social Action Programme (SAP).

Both programmes brought a significant amount of resources into the country. The IPPs — rich in the incentives they gave foreign investors — turned Pakistan briefly into a favoured destination for foreign direct investment. The SAP produced significant donor interest and a flow of associated donor funds for improving human development. But both programmes proved to be costly.

The IPP programme had enough margins of profit built into it to encourage potential investors to bribe their way into the country’s energy market — or, at least, that was the allegation made by the government of Prime Minister Nawaz Sharif as it went after the investors who had arrived in the country based on the promises made by the administration headed by Benazir Bhutto. The programme produced quick results — it turned the country for a short period from one with a serious power deficit to one with a comfortable surplus. For a while, Pakistan had enough energy for the government of Nawaz Sharif to contemplate its sale to country’s deficient chronically power neighbour India.

However, there were long-term costs associated with the programme. It increased the share of thermal power in total power generation, it increased the cost of power to the consumers and it increased the country’s dependence on imported fuel. Had the successive administrations in the 1990s not given so much emphasis to using the private sector to generate energy, they might have given higher priority to the building of dams for producing hydropower. Had that been done, Pakistan today would not be faced with — serious problem of constraints on the availability of power and water.

SAP was the donor response to the long-established tradition in the country to ignore human development and commit the bulk of public sector resources to the development of industry and physical infrastructure. The neglect of human development became the focus of international development after Pakistan’s own Mahbub ul Haq helped develop a new indicator of welfare — the human development index. Year after year, the human development reports published by the UNDP showed poor scores by Pakistan. The donors, led by the World Bank, persuaded the authorities in Pakistan to invest in basic education and primary health care, and direct a significant proportion of additional expenditures to help the neglected segments of society climb out of backwardness.

Incentives were to be provided to parents to send girls to school, and the poorer areas in the country — mostly in Balochistan, the NWFP, north and south Punjab, and upper Sindh — were to be encouraged to invest in education and health. In return for increased government investment directed at human development, the donor community, once again led by the World Bank, agreed to provide hundreds of millions of dollars for the SAP programme.

The basic assumption made by the programme was that the best way of delivering the basic services in education and health would be to employ the established bureaucratic systems in these sectors. However, the programme managers maintained a fair amount of control over the way the funds were disbursed. In this way the programme divided ownership between the existing bureaucracies as well as the donor community. Divided responsibility almost always results in the absence of overall responsibility. This is precisely what happened in the case of the SAP programme. None of the programme objectives were realised even though the delivery mechanisms were strengthened in several ways. After a great deal of trial and error it was decided that the programme would be terminated.

In his recent book, William Easterly, a former World Bank staff member, has rightly suggested that programmes imposed from the outside almost never work. For development initiatives to succeed, they must be home grown, and have the full commitment of the communities in which they are expected to bring about change and development. Easterly has examined a large number of programmes and projects funded by the World Bank, including the Social Action Programme, to come to this conclusion. He strongly advocates that the donor community should encourage but not force its ideas on the recipients. As discussed above, Pakistan was a willing client for a number of initiatives but in none of these were the programme objectives realised. With this I return to the point I made at the start of this article. It is really comforting that in developing a programme for capacity building to provide basic education and health services, the Musharraf regime has looked to local actors to structure an initiative that could bring about lasting structural change in terms of social development. This is the focus of the programme launched by the National Commission for Human Development. I will comment on its work next week.

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Too early to say goodbye


(This column was written by Art Buchwald from his hospice in Washington, D.C., where he is undergoing care. Buchwald has resumed writing his regular column.)

EVEN though I’m in a hospice, I’m not going to heaven immediately. My doctor said I could stop over in Martha’s Vineyard on the way.

For those who have been wondering what this is all about, it has to do with the fact that my kidneys weren’t working and I didn’t want to take dialysis, which is a machine you are attached to three times a week for five hours.

In February I was warned that if I didn’t take dialysis I wouldn’t survive more than two or three weeks. Since I didn’t want dialysis, I decided to move into a hospice and go quietly into the night.

For reasons that even the doctors can’t explain, my kidneys kept working, and what started out as a three-week deathwatch has turned into nearly four months.

When word got out that I was in a hospice, I became a celebrity. I was on all the TV shows and the notice of my intentions was in all the papers, including the Washington Post and the New York Times, which made it valid.

The more publicity I got, the more attention my kidneys got, and instead of going quietly into the night, I was holding press conferences every day.

Then the mail poured in. People were pleased that I had made my own choice. The letters and e-mails were in the thousands. At the same time, friends came to the hospice to say goodbye. Everybody felt they should make the pilgrimage. They came with flowers, cheesecake and corned beef sandwiches.

I sat in the salon of the hospice and, pretty soon, when people came to see me, it was as if they were visiting Lourdes. They came to be blessed and cured.

Since I was expected to die soon, the French ambassador gave me the literary equivalent of the Legion of Honour.

Because of the publicity I’ve gotten, the National Hospice Association made me man of the year.

I never realized dying was so much fun.

Then a few weeks ago, my doctor said I had to change course. He advised me to go to Martha’s Vineyard.

Things I didn’t care about because I was going to die, I now had to care about. This included shaving in the morning, buying a new cellphone that works, rewriting my living will and scrapping all the plans for my funeral. I also had to start worrying about Bush again.

Alas, the people who come to visit me now look at me with great suspicion. They want to know if the whole thing was a scam. They can’t believe, after I said goodbye, I’m going to Martha’s Vineyard instead of paradise.

I called up the TV stations and the newspapers and asked them if they would make a correction and retract the original story. They said they never correct stories about people who claimed they were dying and didn’t.

This is where I am now. I’m writing a book called, “Standby in Heaven: The Man Who Wouldn’t Die.”

I’m still seeing friends, but instead of saying farewell we discuss the Redskins.

So, dear reader, I hope you don’t feel you were duped. The moral of this column is, never trust your kidneys.—Dawn/ Tribune Media Services

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Physician, heal thyself


By Humayun Khan

THOSE who are interested in the theory and practice of democracy, normally turn to the works of Plato, Rousseau, de Tocqueville and Jefferson. Now, with the publication of the Charter of Democracy, they must add to their list, the names of Benazir Bhutto and Nawaz Sharif.

Pakistan, not for the first time, has produced successors to the great names of human civilization. Not so long ago, we had the example of a second-rung general of the Pakistan army, rejecting principles of governance which had been painstakingly developed over centuries by luminaries like Akbar the Great, Bonaparte and Thomas Babington Macaulay. He uprooted the entire administrative system of the country and we all know the mess he has left us in.We do have a tendency to get too big for our boots.

Luckily, the pontifications of our two former prime ministers are not so innovative. The charter is a classic case of plagiarism. Who does not know that free and fair elections, an independent judiciary, the rule of law, individual freedoms and civilian supremacy are all essential ingredients of democracy? To claim originality for such self-evident truths is, in itself, a measure of the quality of inputs which went into the charter..

Perhaps the only justification for it could be that it does not seek to lay down basic principles of universal applicability, but just to address the particular problems faced by Pakistan.Seen in this limited context, it deserves scrutiny.

Basically, the charter appears to be more of an attempt to justify the return to power of the authors. It also contains sweeteners by indicating how well that power will be exercised. If the rectitude it promises is indeed forthcoming, then it offers some hope.But past experience would make this a somewhat risky expectation.

The fundamental shortcomings of military rule and undemocratic processes are rightly listed. So are some of the corrective measures proposed. However, one important problem that Pakistan faced during its brief spells of so-called democratic governments finds no mention. From the time of Z.A. Bhutto, through that of Benazir and Nawaz Sharif, it was the misuse of power by elected leaders that threw the country back to non-democratic dispensations. One lesson must be learned from this. Elections, in themselves, no matter how free and fair, are not enough to define democracy. For example, the 1970 elections, held by Gen. Yahya Khan, have repeatedly been acknowledged as the only free and fair polls that we had so far. But what dawn of democracy did they herald? The loser refused to accept the verdict of the majority and contributed significantly to the break-up of the country so that he could claim to be the winner in one half of it. The six years of democratic government that followed still sends shivers down the spines of many Pakistanis.

Similarly, it would be nothing short of comical to assert that the decade of the 1990s, when democratically elected leaders were at the helm, brought any glory to Pakistan. This is when we came closest to being a failed State. This is when corruption at the highest level reached its peak. This is when the destruction of the judiciary intensified. This is when a family crony was raised to the exalted position of head of state amid national and international ridicule. Indeed the 1990s were perhaps the saddest chapter in the sad history of our country.

It has been rightly said that suppressing democracy is bad, but giving democracy a bad name is perhaps worse. Military dictatorships strengthen the desire for democracy. Misuse of democratic forms debilitates it and leads to a search for alternatives.

It may be true that the only cure for bad democracy is more democracy. This therapy rests on the premise that as a last resort, the voter can throw a bad government out. This he cannot do in a dictatorship. But the voter gets the chance to do this over a period of time and even when this chance comes his way, his vote need not necessarily be reflective of his true wishes. His compulsions include pressures from the incumbent authority, the stark inequalities of the economic system, traditional loyalties to clans and overlords and, of course, actual rigging of the results.

Once the results have been declared, his voice counts for nothing. Indeed, some leaders interpret a victory at the polls as a mandate to do whatever they like.This is not democracy. Winning a questionable election is not democracy. There is such a thing as responsive and responsible government, which is a continuing requirement of true democracy.

Unfortunately the ‘charter of democracy’ offers no atonement for past misdeeds, nor does it say anything about the necessity for institutional limitations on the power of an elected leader. These institutional checks are a vital element in preventing rule by whim. I remember during his official visit to London in 1992, Nawaz Sharif was invited to the annual dinner of the Lords Taverners, a club which draws its name from the pub situated at that famous ground.

At the end of a rather bibulous evening, the prime minister of Pakistan, who was perhaps the only sober man in the hall, announced a donation of 50,000 pounds for the club. As he sat down to thundering applause, John Major, the British prime minister, remarked “My goodness! I could never do that. The chancellor would not allow it”.

The greatest disservice that our leaders over the years, be they civilian or military, have done is the systematic destruction of the institutions of the state. Bhutto started the process by virtually destroying the bureaucracy and President Musharraf, through the agency of the NRB, gave it a final ignominious burial. Bhutto was also the first to set in motion the undermining of the judiciary, a process which has been furthered by every leader since. Executive powers have been freely exercised in the matter of high-level appointments of governors, judges, the Public Service Commission, vice-chancellors, etc. without any regard to institutional norms or merit. This is not democracy.

The whimsical exercise of power, whether by military dictators or by elected leaders, does great damage in the long run.

So, if our latter-day political philosophers wish to claim that they are offering an unprecedented cure for all the country’s ills, they would be well advised to include,in their charter, more elaborate safeguards against the misuse of power by elected leaders too. As good physicians, they must first heal themselves.

The writer is a former ambassador.

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Bad business


ENRON looked like a classic American story of rags to riches: a worthy but dull gas utility that grew in the space of a decade to become one of the largest corporations in the country.

It transformed itself into a pioneering company at the cutting edge, creating new markets using complex financial instruments where none had previously existed. As a result Enron was lauded in the same terms as the brash internet start-ups that blossomed during the dotcom boom.

But just as that boom went bust, so Enron’s profits and reputation were built on hype and hot air. The company under its executives Ken Lay and Jeffrey Skilling wove a lattice of 3,000 separate subsidiaries and proxies to artificially boost profits and hide liabilities.

A whistle-blower eventually revealed the massive systemic deception, which caused the company to collapse, and yesterday a jury found Lay and Skilling guilty of fraud and conspiracy. The temptation now will be for some in the US and in this country to say that the case proves that the system “works” — that the bad apples were exposed.

But it would be wildly optimistic to think Enron was an exception: Enron was not even the largest corporate collapse of its era. That title belongs to the telecoms company Worldcom. And regulators were lucky that not only was there a whistle-blower, but also that another Enron executive pleaded guilty and testified.

Enron is emblematic because its political links and ability to evade regulations — nodded along benignly by its accountants Arthur Andersen, which was itself destroyed by its involvement — allowed it to get away with audacious fraud for so long. Some were suspicious of Enron’s activities well before its collapse.

—The Guardian, London

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Next step on immigration


NOW that the Senate has passed its comprehensive immigration legislation, the real battle begins. Just months ago, House leaders dismissed the idea of a compromise between their own legislation, which provides for immigration enforcement but nothing else, and the Senate’s bill, which not only enhances enforcement but also creates a path to legalisation for illegal immigrants as well as new temporary visa programmes for future workers.

Since the issue has gained new prominence, House leaders face a real dilemma: Is it better to find a compromise or to go into the fall elections with no bill at all? We believe Congress would be foolish to leave this issue too long: With every passing year, fixing the situation becomes more difficult.

We’re also worried about one unglamorous facet of the reform. While senators (and the media) covered much emotionally charged ground over the past few weeks — the status of English, the meaning of citizenship — insufficient attention has been paid to the bureaucratic procedures as well as to the bureaucrats who will process millions of new visa and residency applications for legal immigrants if some version of the Senate bill passes.

According to a report from the National Foundation for American Policy, qualified skilled workers and professionals can wait more than five years to receive green cards. Potential immigrants wanting to join family members in the United States can wait six to 12 years in India, or as many as 14 years in the Philippines.

Some of this delay is due to the processing backlog, a problem that can be solved with extra funding and hiring. Over time, the Congressional Budget Office predicts, the collection of visa fees and fines will pay for this expansion, but an initial outlay will be necessary — one that Congress should be prepared to make.

Congress should also allow the Department of Homeland Security to regulate the technical details of the process, such as what will be acceptable as proof of residency.

The simpler the procedures and fewer the documents, the easier it will be to process millions of applications.

But even before applicants get to the processing stage, they must confront the fact that annual numbers of green cards and other kinds of visas are limited by law. This, too, requires Congress to be realistic.

—The Washington Post

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