CAN the government, which has not been able to manage successfully major public sector enterprises and utilities, manage hundreds of retail business outlets well? While the privatisation of many of the major enterprises has been stepped up and mega public sector units disposed off quickly, the government is now opting for a major expansion of the utility stores corporation to protect the poor against high prices.

The Economic Coordination Committee of the cabinet has decided that the number of utility stores in the country should be raised from 560 to 1,000 to help the low income groups buy their essential items less expensively and also to stabilise the prices.

The business of the government is not to do business which should be left to the businessmen, Prime minister Shaukat Aziz used to say until recently. But since businessmen dealing with sugar, cement and pulses have let him down, he is now opting to let the government run the retail sector through utility stores . Will he succeed in this venture? He has already provided a grant-in-aid of Rs233 million to the utility stores.

And despite the government’s disenchantment with the private sector, the advisor to the PM, Dr. Salman Shah says that Rs 400billion has been allocated for the development of infrastructure and if the private sector would cooperate fully in the new public-private partnership, the total investment would rise to Rs800 billion. That amounts to hoping-for too much too soon, as the private sector is already avoiding large-scale investment in mega projects.

The government has not been winning the tug of war with the sugar mill owners of whom 42 mills had been dodging the release of sugar in the market properly. The sugar mill owners feel strong enough as they are quite many in number and are accustomed to dodging successive governments. They have now refused to release their monthly production and distribution statements, arguing that the government uses those figures against them.

After consultation with the mills the 42 mills were asked to release 58.31 per cent of their production and report to the monopoly control authority. Of them, 33 mills complied with the orders; the production was 2.903 million tones and the distribution 1.738 million tones. The stocks with the industry on May 3 was 1.169 million tonnes. Four mills provided no data, action is now being taken against them.

The government now wants production data not only from sugar mills, but also from mills manufacturing a total of 29 items including sugar, tea (blended), cigarettes, aerated water, cement, motor cars, trucks, refrigerators and deep freezers. The spread of the items is indeed very wide. These details have to be submitted to the sales tax department which could collect 15 per cent sales tax on them.

If the figures are supplied every month and they are reliable, the government can act quick in case of shortages or abnormal rise in prices. The figures will cover production, sale and stock in hand .

The government is also trying to increase the availability of commonly used goods to people by raising the number of goods which can be brought in by those who go abroad for short visits or long stay to 700-800. The baggage rules have been revised in the light of the latest rules of Singapore, Thailand , New Zealand, Australia etc. The great advantage in this area is that the large variety of goods which come in will cost no foreign exchange and may in fact raise the import revenues, including sales tax if the items are dutiable like automobiles.

Now going back to the utility stores which are to be heavily subsidised, will they function any better than they did in the past? They were found to be inefficient and corrupt and serving the customers poorly. The staff of the utility stores have little incentives to work hard as they are poorly paid and the sales were poorly audited and the stores were inadequately stocked and checked.

If the utility stores staff have to perform better, they should be better paid and the good performers should be promoted. Secondly, a large number of people who visit the utility stores have a transport problem when they want to carry back home their heavy purchases. If they hire a rickshaw their gain in coming to the utility store will be naturalised. The logistic problem of the visitors to the utility stores has to be kept in view, when these stores are sought to be popularised. The utility stores have a minus and plus side which cannot be ignored.

The usual complaint against the utility stores is that their products are usually substandard. There may be too many stones in the pulses and other items and when they are cleared of the stones, the price advantage is gone. Such lapses in the utility store system should be properly checked if the distribution chain is to be expanded and made popular.

The larger question is if the government cannot manage its large enterprises through its senior officials or experts, can it manage the retail outlets for which it is utterly ill-equipped? The public sector enterprises failed because of corruption, nepotism, gross inefficiency , favouritism and red tape. The same maladies, though to a lesser extent, afflict the management of utility stores. However, in this case buyers are themselves the instant judges. And it is not easy to remove these drawbacks when they are spread over 1,000 small units.

The western countries have sought to solve the problem through retail chains, of which the Wal-Mart of the US is the most famous. And India is trying to experiment with it on a limited scale while its distributors are trying to expand and modernize themselves.

Mr Shaukat Aziz has been talking of a German cash-n-carry chain coming to Pakistan. Its officials were here some time ago, but there is no visible activity on that front. The Indian retailers have been famous for their low profits and high turnover, resulting in large profits. Compared to that, the retailers profit in Pakistan is very high and the turnover is not very heavy and tax evasion in Pakistan too is very high.

In fact, the rates of profit of not only the retailers, but also of everyone else in the chain including the distributors and middle men are very high. The manufacturers charge a high profit. In the vegetable trade the ‘arties’ or middlemen are notorious. They make large profits, while giving a raw deal to the growers and selling their product at very high prices. It has not been found possible to eliminate such elements from the trade.

Such high profit proclivities have led to monopolistic tendencies and to create cartels. And since the commercial centres are a few in the country — Karachi and Lahore to begin with. The cartels did not flourish and instead we have had more of monopolies. The government set up the monopoly control authority a long time ago which during its long existence has been a paralysed institution . The monopolies were too powerfully and combined effectively against the government policies.

And now the toothless organization is to be converted into a competition promoting corporation. Can it really promote competition and help the consumer get a better deal from the producers and the distributors. It all depends on how the new corporation will assert itself and prevail against heavy odds. It depends on the extent of political support it gets from the government and the assemblies representing various political and economic interests.

The corporation will have to contend with cartels like All Pakistan Textiles Mills Association, the Sugar mills association and the sugar manufacturers. Each such association has deep vested interests and political clout.

The question now is: is what the government is doing now, including giving a subsidy of Rs233 million to the utility stores, a part of the election campaign or is it to become a permanent arrangement. If it is primarily a pre-election feature it will have a short life and consumers protest will continue. If not, the government will have to think of permanent cures for inflation, beginning with appropriate monetary regulation and an effective and rational supply system monitored by price magistrates.

Should the government sacrifice common man’s interests at the altar of high growth, that too of the luxuries? And should the poor wait for the trickle-down effect of that growth to reach them and solve their many problems. How can the government ensure that the inflationary effect of spending Rs415 billion on the public sector development programme does not hurt the low income group?

The government hence has to look for permanent cures and a balanced economy, instead of letting the lopsided economy get worse. In spite of the talk by the governor of the State Bank, Dr. Shamshad Akhtar of the tightening of the monetary system, the private sector bank credit in this financial year until June 3 expanded by Rs 345 billion against the target of 330 billion which is an 8.26 per cent expansion over the preceding year.

LIBERALISM has much to its credit. But as John Stuart Mill said about Christianity, “all truths need fundamental re-examination from time to time”; and if that was true of Christianity in the 18th century, I think that it is just as true of liberalism in the 21st.

For today the great and the good, at any rate in the West, intone their belief in liberal pieties as mindlessly as their predecessors in the 18th century proclaimed their belief in God the Father, God the Son and God the Holy Ghost.

Take freedom of the press. The liberal argument for the importance of a free press was that it gave voters the necessary information on which they could vote intelligently. Of all the British newspapers today, only the Guardian even tries to do that. The rest concentrate on misinformation or even disinformation — sophisticated and clever disinformation in the case of the broadsheets, and untreated sewage in the case of the tabloids. So, far from helping to guide the reader into the real world — the world for which he or she is meant to take responsibility — they offer him or her a way out of that real world into one of fantasy, muddying rather than clarifying the democratic waters.

The same goes for that other liberal piety, the autonomy of the individual. Of course this was an important principle 200 years ago when the individual had far too few rights. But today it is very plain that man standing alone — as against man locked into society — is beginning to get too many rights.

So what was once a noble principle has been degraded into a crass and selfish form of “me-firstism”: an attitude wholly incompatible with the team spirit required to make any institution — family, school, college, regiment, hospital, police force or even government department — work. Even the foreign service has been infected, with our former ambassador in Washington not hesitating to tell tales out of school about his colleagues.

Then there is that other liberal fetish, meritocracy. Of course it made sense in John Stuart Mill’s day to replace hereditary aristocracy, of which there was too much, with a system of careers open to talent, of which there was too little. But surely anybody looking at the subject with an open mind should be able to see that today, 200 years later, there is something quite other to worry about; and the new problem, which is getting worse all the time, is the deeply unattractive and unimpressive nature of an exclusively self-made meritocratic ruling class: a ruling class made up of men and women exceptionally gifted only in the horrible rat-race arts of elbowing their way to the top. Aristocracy may have its faults but ratocracy, which is what in practice a meritocratic system produces, is proving even worse - which is possibly why the public seems so eager to welcome the return of the English gentleman in the shape of David Cameron.

But my main concern is not with liberalism so much as with liberal triumphalism. The triumphalism that flared forth after the west’s victory in the cold war left liberalism as the only ism still backed by a world superpower. There was another countervailing ism - communism, also highly successful at claiming the moral high ground.

Today, however, liberalism is the only ism in a position not only to dream of world hegemony but to try to make that dream come true — a case of absolute power tending to corrupt absolutely, if ever there was one. Onward liberal soldiers marching as to war. Not so much Pax Americana as Bellum Americanum.

In other words, the Iraq war is only the first move in a liberal jihad aimed at spreading to all mankind a secular and materialist religion, the central tenet of which — free thought — can be relied upon to dissolve people’s faith in any transcendental religion far more certainly than could communist repression. So it is no wonder that Islamic fundamentalists are reacting so fiercely. They have seen what liberalism has done for Christianity in the western world and quite understandably don’t want the Muslim faith to suffer the same fate.

Nor is this new overweening form of liberalism to be found only in foreign affairs. It is also pretty rampant on the domestic front, at least in Britain, where the two restraining isms of socialism and high Toryism have been ground into the dust by the Thatcherite revolution.

Politicians of all parties, including the Conservatives, are liberal now. But theirs is a novel and almost unbelievably power-dependent form of liberalism. It starts from the assumption that, with the old dragons of despotic kingship, religious intolerance, patrician insolence and, finally, totalitarianism successfully dispatched, another window of opportunity has opened for liberalism to declare war on human, and even eventually animal, pain and suffering — regardless of the fact that this limitlessly ambitious new war must assuredly involve a vast extension of governmental power to enforce political correctness. So with remarkable rapidity, from being a doctrine designed to take government off the backs of the people, liberalism has become a doctrine designed to put it back again. Liberalism used to be dedicated to doubt, cynical about certainty and, above all, suspicious of power. All I am urging is that liberalism should start applying these attitudes as rigorously to its own powers and certainties as in the past it applied them to everybody else’s. —Dawn/Guardian Service

THE offer made to Iran by the US, Britain, Germany, France, Russia and China of a package of incentives to dissuade it from pursuing its present uranium enrichment policy is a potentially positive development which, on the face of it, promises to reduce the current military tensions in the region.

Whether or not Iran accepts the offer of negotiations, however, is another matter depending on how it perceives the level of sincerity in the six powers collectively, particularly with regard to the United States which has played the leading role in making this offer to Iran.

In the past, the US has been known for its unilateral tendencies and for a hard-line attitude towards Iran. It has often resorted to muscle-flexing even when while talking about entering into negotiations on disputed issues with Iran. The dangling of an olive branch, in the form of offers of negotiations, is, therefore, a necessary part of American policy in order to give credence to Washington’s pursuit of its vital interests in a global context.

Therefore, the gathering together of a group of six world powers in making a joint peace offer to Iran is good diplomacy on the part of the United States. Rather than for America to be solely seized of the issue, it is certainly a lot better to show that this point of friction is being internationalised as much as possible so that an amicable and lasting solution to the problem can be found.

But there is another perspective. The Middle East has always been an area of interest — political and economic — for the entire world community. There is the oil factor which makes the Middle East a lucrative gold mine of fortunes for oil multinationals, especially the American ones.

The current violence and hostilities in Iraq have not done the world any good. The price of a barrel of crude oil today at around $60. This is no longer affordable for most world economies. In fact, it is a price that is not affordable even for the US economy. Even though a Texas oilman himself, President George Bush has been reported as saying that it was about time that the US reduced its dependence on oil imports and looked around in the direction of seeking indigenous and alternative sources of energy.

Even so, the entire world’s economy is heavily dependent on oil as a relatively cheap and easily available source of energy for the running of industries, agriculture and almost any economic activity. Even the search for substitutes for crude oil is not going to be an easy option because of the uncertainty and cost factor involved. The process of research for finding appropriate substitutes for oil is going to be long, hard and expensive.

Even so, the worldwide oil industry at present, although they have entered the race to explore possible substitutes for petroleum, are already working on expanding oil explorations and investing in places that have been identified as having large quantities of untapped oil reserves. Whatever the progress in this regard, oil remains the cheapest and the most assured source of energy and the Middle East the principal supplier of this resource. That makes finding a viable and lasting solution to the Middle East conundrum urgent so as to ensure easier availability of oil there to all parts of the world and at cheaper prices.

Coming back to the possibility of Iran being offered an attractive package of incentives so as to persuade it to desist from its uranium enrichment programme may also be a key factor in ensuring greater production and supply of oil from the Middle East which remains the world’s largest reservoir of oil. There are also a number of political vested interests that matter in keeping the peace in this troubled region.

If Iraq can be pacified after all the bloodletting and strife it has been going through in the last three years of the US-led military occupation of that country, Iraqi oil reflowing into the world market can make a big difference to the world economy. The entire world could indeed benefit from such a development. The Muslim world has a dire need for peace and tranquillity so that it can develop its potential for progress economically, socially and even politically.

If, instead of peace prevailing in the Middle East, disorder were to spread even beyond Iraq, the likelihood is that violence and strife would grip the entire Middle East, and Israel, with its expansionist designs, would be drawn into the vortex.

Either way the writing on the Middle East wall is that Israel will end up being contained and will no longer be in a position to expand its power and influence at will wherever and whenever it feels like. In the event of Iran graduating into a regional power as a consequence of an international understanding with major world powers, the role of Israel as America’s proconsul and ally in the Middle East is likely to be substantially contained.

As a consequence of its Iraq adventure, the United States is probably beginning to understand that there are serious limitations to the expansion of the stretch of its power and hegemony there. The six-power initiative for negotiating with Iran over its uranium enrichment project thus deserves to be welcomed because it is a diplomatic initiative as against the use of force against that country.

Furthermore, the people living in Israel and the whole of Palestine also deserve to be given a sense of security. That can come about only if Israel and Palestine agree on peaceful coexistence in a peaceful Middle East that is predominantly Muslim. Israel has to make up its mind and face the stark reality of living in a predominantly Muslim region. That calls for peaceful coexistence with the Palestinians as well as with the Muslim countries in the region.