Our post-Doha options

WHAT will happen if the Doha Round collapses altogether? It faces a July 2007 deadline, when the administration of President George W. Bush will no longer have the fast-track trade promotion authority granted by Congress. There is some talk of getting Congress to extend that authority by one year. In an increasingly politicised environment, it is unlikely that President Bush will succeed in getting this approval.

The other option — at least for the United States — is to go ahead with the bilateral trade deals it is negotiating with a number of its trading partners. Some dozen agreements are being currently negotiated. Work has also begun on a free trade agreement between the United States and Pakistan.

Washington has long pursued a strategy of negotiating trade agreements at three different levels. It has worked on an all-encompassing multilateral deal in the context of the Doha Round. It has also made some efforts at the regional level.

In December 1994, then President Bill Clinton initiated work on the Free Trade Agreement for the Americas, the FTAA, that would have created a free trade area in the western hemisphere, stretching between the North and South Poles. Last year, it concluded a free trade accord with five Central American countries plus the Dominican Republic. As mentioned above, it is working on bilateral arrangements with a number of countries.

This approach, labelled “competitive liberalisation” by trade officials, is based on the theory that smaller pacts would lead to bigger ones. Washington has dismissed concerns that the proliferation of two-way accords would undercut the authority of the World Trade Organisation. But that authority may have already been compromised by the failure of the talks in Geneva in late July.

With the near failure of the Doha Round of trade negotiations what are the public policy choices available to Pakistan? Should it follow the United States and seek to expand the markets for its exports by entering into bilateral and regional trading arrangements? In choosing the partners with which to work, should it concentrate on the countries nearer home and the regions to which it belongs, or should it cultivate a special relationship with the world’s largest markets, the United States, the European Union, Japan, and China? How much emphasis should it place on restoring India as its largest trading partner?

Before attempting answers to these questions, it would be useful to highlight an important aberration in the pattern of Pakistan’s international trade. The widely accepted gravity model of trade would suggest that India should be Pakistan’s largest trading partner.

The gravity model uses “mass,” or the size of the trading partner, and the distance from it as the two most important determinants of the origin of a country’s imports and the destination of its exports. India is a large economy and is one of the most rapidly growing economies in the world. It is also next door to Pakistan. As such, it should be Pakistan’s largest trading partner. That is not the case; that position belongs to the United States. America is the world’s largest economy but it is some 7,000 miles from Pakistan. According to the gravity model, its mass does not compensate for distance to qualify it to be Pakistan’s largest trading partner.

It is history rather than economics that degraded India’s position as a trading partner for Pakistan. The situation was very different in the late 1940s. Then, for what is Pakistan today, more than 40 per cent of exports went to India and more than 20 per cent of imports came from that country. For a few years after the two countries gained independence, India continued to use Pakistan’s road and railway network for its exports and imports.

Karachi remained an important port of entry and exit for international trade for northern India. Indian trade with Afghanistan also flowed through Pakistan. But in 1949, India and Pakistan became hostile neighbours and have remained that way for almost six decades.

It was a dispute over trade — more accurately over the rate of exchange — that resulted in a sudden and complete cessation of trade between the two countries. In 1949, the members of what was called the Sterling Area — a region roughly comparable to today’s Commonwealth — agreed to devalue their currencies with respect to the US dollar. India went with other Sterling Area countries; Pakistan refused to follow. The result was that the rate of exchange between the currencies of the two countries changed from parity to 100:144 in favour of Pakistan. It took 144 Indian rupees to buy 100 Pakistani rupees. The Indian leaders regarded this as an insult and stopped all trade with Pakistan. The idea was to force Pakistan to devalue.

It seems preposterous from the perspective of today’s world that two countries would fight a trade war over the rate of exchange. The cooling of economic relations between India and Pakistan as a result of the quarrel over the exchange rate set the tone for the next 60 years. The two countries drifted apart and sought markets outside the region for their exports and imports.

This has begun to change slowly. In 2004-05, India-Pakistan trade through formal channels was estimated at $600 million, almost two and a half times more than the level reached in 2000-01. The amount of trade that flows through informal channels is perhaps three to four times more than formal trade. Much of it is in the form of smuggling across the poorly patrolled Sindh-Rajasthan border.

A significant amount moves through Dubai and gets included in trade statistics as Dubai-Pakistan trade. It is for that reason that in 2004-05, Dubai was Pakistan’s third largest trading partner accounting for six per cent of the total trade. The United States was the largest with a 19 per cent share and Saudi Arabia in second place with a 10 per cent of the total. India and Afghanistan were in fourth place, each accounting for five per cent.

The direction of trade, therefore, reflect neither Pakistan’s geographical position nor its comparative advantage. The question for policymakers is whether they should focus their energies on reviving trade with India. The cooling of ties between the two neighbours following the terrorist attacks in Mumbai underscores an important fact: that India-Pakistan trade will not be governed by economics alone; it will always be subject to politics.

However, building trade relations between the two countries will help enormously in easing political tensions. An editorial in the Financial Times published on August 9, reminded policymakers in both Islamabad and New Delhi of what Cordell Hull, the US Secretary of State under President Franklin Roosevelt, said about the importance of trade in relations among nations. “If goods do not pass frontiers, armies will,” he said. “It is not an absolute truth but India and Pakistan should recall Hull’s wisdom as they contemplate the dangers of sliding into a deeper crisis,” concluded the newspaper’s editorial.

The launch of South Asian Free Trade Area (Safta) offers an opportunity to the South Asian neighbours to reorient their economic relations. However, for different reasons, both Islamabad and New Delhi have not given much attention to the potential of Safta in this context. New Delhi is more interested in creating space for itself in other regional trading arrangements, in particular those being developed in Southeast Asia. It believes that the economic opportunities available in that region are more meaningful than those on offer in South Asia.

It is also promoting Bimstec, a regional arrangement that incorporates all of Saarc but not Pakistan and also includes Myanmar and Thailand. Bimstec will serve two objectives of New Delhi’s approach towards the region in which it is attempting to carve for itself the position of an economic and political superpower. It excludes Pakistan and builds an economic bridge between South and Southeast Asia. Pakistan’s lukewarm approach towards Safta is the result of an extraordinary belief that it could use the arrangement as a lever to obtain concessions from India. This is a misguided approach since, as discussed above, India continues to work on Pakistan’s political and economic isolation rather than its incorporation in regional bodies. Instead of allowing itself to fall in this trap, Pakistan should put a great deal of political and bureaucratic effort into promoting Safta. It could use the fledgling regional pact to constrain India’s growing influence in the area.

In a recently concluded study on the prospects of Safta and its economic potential, a group of economists led by me worked out the structural changes that could occur in the pattern of Pakistan’s international trade if this regional arrangement was to be correctly developed. We determined that the most significant impact of Safta on Pakistan would be a sharp increase in international trade as a proportion of gross domestic product.

In 2004-05, the trade-to-GDP ratio was on the order of 30 per cent, with trade defined as including trade through informal channels and GDP measured according to updated 2001 national income accounts. With Safta successfully implemented and with trade with Afghanistan conducted mostly through formal channels, total trade could increase at a rate of 10 to 12 per cent per year in the next 10 years.

Total trade in real dollars (2004-05 dollars) could increase from the present $33.5 billion to $90 billion. With the economy more open and with trade with India allowed, India-Pakistan trade could increase tenfold, from the current $2 billion (including informal trade) to $20 billion. In other words, of the $58 billion increase in total trade projected for this period, $18 billion — or almost 31 per cent of the increase — could come from increased exports to and imports from India.

With the successful implementation of Safta, the structure, destination, and origin of Pakistan’s international trade will change profoundly. Agricultural and light engineering products will become important export items while industrial raw material and capital equipment will become important import items.

With Pakistan able to meet a significant proportion of its energy needs by tapping the gas pipelines from Iran, Central Asia, and the Middle East connecting to India, the share of fuel imports in total trade should decline. And, with Pakistan able to earn large transit fees from the use of its territory for gas pipelines to India, the share of the service sector in export earnings should increase significantly.

New trading opportunities with the countries in the region will change the structure of the Pakistani economy. Agriculture should regain some of the importance it had at the time of independence from Britain. But Pakistan will not become the granary for the rest of South Asia as it was then. Its agricultural system, with its year-round supply of water, should be able to provide high value-added output to the growing Indian and Middle Eastern markets. With transit trade earning more foreign exchange, the transport sector should feel the impact, through the modernisation of the trucking, processing, repackaging, and warehousing industries.

The banking sector will also have to develop new product lines to provide financing for new lines of export to India as well as for servicing transit trade. And Pakistan could see a major expansion in tourism as Indians begin to visit holy sites in Pakistan that have been inaccessible to them as well as other sites in the country’s picturesque north. Lahore is already preparing for the arrival of Indian tourists.

According to one British newspaper account “the city is sprucing itself up for a growing flow of visitors from Delhi — many of whom have memories or relatives there — with a fancy new airport, refurbished colonial buildings, and ambitious hotel projects.” An increase in tourism will result in the rapid expansion of the hotel, restaurant, and entertainment industries.

In sum, with the Doha Round placed on the back burner Pakistan’s policymakers should concentrate their attention on building trade relations with India.

Reviewing all unjust laws

ONE tends to be pessimistic after the chaos recently witnessed at London’s Heathrow airport. The world seems to be descending into insanity. Will our children ever be able to travel with security and self-respect? Will terrorists — state and non-state actors — ever understand that only accommodation of viewpoints, compromise and a desire for peace can halt the spiral of violence?

Or will the Israeli decision-makers keep responding to provocations by unleashing the dogs of war? Will the United States support this behaviour and destroy country after country? Will terrorists keep using the name of Islam to kill innocent people? Will the day dawn when the US and Israel, along with their supporters, realise that the rage of the terrorists is their response to the injustice of continued aggression?

Non-state fighters react to this aggression albeit in a reprehensible manner. But if this war has to stop it is the states — Israel and the US — which must reach out to the other side and find out what exactly they want.

While the lamps seem to be going out on the international front, there seems to be some hope of positive change in Pakistan. This will be the focus of today’s column. The National Assembly referred two bills with regard to amendments in the Hudood Ordinances and the elimination of domestic violence against women to the standing committees. It is the first which I will consider here. Kashmala Tariq, a member of the treasury benches, sought five amendments in the Hudood laws titled the Offence of Zina (Enforcement of Hudood) (Amendment) Bill 2006 and the Offence of Qazf (Enforcement of Hadd) Amendment Bill 2006.

Without going into the legal details, let us remember that in the last few months a local TV channel hosted several discussions on the Hudood Ordinances. The panelists included religious leaders of various schools and eminent citizens. The programmes would end with the slogan: “When will parliament think?” It seems that it is doing so now and that women in the government and opposition have decided to come together in an effort to halt the misapplication of these laws.

We have seen Sherry Rehman in action before on such matters. But what is heartening is that others, whose party line had previously not included support for “liberal” causes, are also active in this matters. Even so, people still wonder whether the proposed amendments will actually be implemented.

Let us remember what these laws have done to women in our country. They were promulgated in 1979 and enforced in 1980 just when General Ziaul Haq, after getting rid of Bhutto, was playing the religious card to consolidate his rule. There were five criminal laws but the ones which affected women most included two: one dealing with zina which covered adultery and fornication; and the other of qazf which relates to the false accusation of zina.

According to the law of evidence, four adult pious Muslims would have to bear evidence of the actual act to give the maximum (hadd) punishment. The way it was used was mind-boggling. Women who were raped were not given relief. Instead, they were punished as adultery, rape and fornication were not treated separately. The interpretation of these acts was such as to harm women most.

Similarly, somebody falsely accusing somebody else of zina was not immediately accused of qazf — that was a separate process. In short, women — especially powerless, lower class women — had a bad time because of the mindless interpretation of these laws.

Civil society groups complained against the blind injustice of these laws since they were promulgated. One of the best books on the subject is by Asma Jahangir and Hina Jilani (The Hudood Ordinances: A Divine Sanction?). They give case after case of girls being raped — even a blind girl —and then being made to rot in jail because they were accused of zina. Men accused their wives of zina and got away with it. Every year, the Human Rights Commission of Pakistan gave figures telling us what enormities were being perpetrated on women and all in the name of the law. It is a wonder that nothing was actually done despite several attempts by concerned citizens, NGOs, columnists and academics to stop this blatant miscarriage of justice.

Then, for some reason or the other, things started to change. Debates which should have taken place long ago began on TV. Every discussion seemed to allow commonsense to flow back into the darkness of the strange illogic of a misogynous world. The ulema started agreeing that the interpretations were not necessarily correct. Then came proposals which would make rape separate from the offences of adultery and fornication. Even better, if the accuser of zina could not prove his case — remember the four pious Muslims clause — he would be booked for qazf straightaway. I watched amazed at the way the proposals were refined and finally we got to read them in the press. If this could be done so easily, why did so many poor women have to rot in jail for so long?

Now, is it possible to see the silver lining in the clouds? Can one hope that one day other laws which are misused will also be amended or abolished? After all, there are other reprehensible laws, all promulgated by Ziaul Haq, as every report tells us. One is the blasphemy law which is misused by an individual’s enemies to punish or remove the accused from the scene. The emotionally charged public takes the law into its own hands and often kills the accused.

Then there is the set of laws which make violence against Ahmedis possible simply by accusing them of posing as Muslims. This is misused every time there is a quarrel between members of this community with others. Here again, justice is not done and people suffer simply because the law is easy to misuse. Once again, there is no debate on this. If only some channel starts the debate things will move forward, hopefully in the direction of humanitarian justice and fair play for all.

But I am hopeful. If our parliament is moving to amend one set of unjust laws, there is hope it will amend other such laws too. So, though there is darkness in the world, there is some light at the end of the tunnel.

A dreamer of another kind

LONG ago, when I was in Punjab Information, I was directed to ask the federal interior secretary unofficially if anything was being done about bringing home the remains of Chaudhry Rehmat Ali, the man who coined the word “Pakistan,” as was being demanded by some people in the province, as also by some popular newspapers.

“Nothing,” he said, and added, “Are you sure he himself would have approved? You see, he never came to live in Pakistan because he heartily disapproved of it for being contrary to his concept of a Muslim homeland in India, and preferred to pass his days in England. I wonder what he did for a living there.”

This last, more a loud thought than a question, remained unanswered, for some of us too used to make conjectures in the days when Pakistan was still an idea, as to what Rehmat Ali did in Cambridge. But since it was Cambridge, we all thought he was studying there for some kind of a doctorate. It is strange that all those who count him among the founders of Pakistan still can’t throw light on what his activities there amounted to.

I owe it to columnist Khalid Hasan for reminding me of those days through a newspaper article called “The Quaid’s Detractor.” Actually detractor is small word, because Rehmat Ali had nothing but contempt for Mr Jinnah whom he took as an agent of the devil for not conforming to his (Rehmat Ali’s) idea of Pakistan.

The difference between the two was that one was a practical, democratic, down-to-earth politician, wedded to truth and exactitude, while the other, sitting in Cambridge, was a visionary without any sense of reality or sense of history, and if I may add on my own, without any commonsense. His only contribution to the making of Pakistan was the name, whereas Pakistan with any other name would have been equally — whatever it is.

As for his actual map of a homeland for Indian Muslims, it was the most hare-brained scheme one could ever come across. I have called him a Muslim imperialist. If he were alive in 1965 during the September war with India, he would have been one of those who wanted to fly the Star & Crescent on the Red Fort in Delhi, probably by landing on it by helicopter, for otherwise it was hardly possible. He was a firm believer in the slogan “Crush India,” and if he could crush Hindu India from Cambridge he would have readily done so.

When (as the map drawn up by him showed) Rehmat Ali appropriated for the Muslims nearly two-thirds of India, he forgot one important detail: how was the new Muslim empire to be brought about? By force of arms or by persuading the non-Muslims to make-do with a very small part of the vast subcontinent to which he chose to give the name Hanoodia? Apparently even this was done in a spirit of generosity, for, in his opinion, the Hindus did not deserve anything better than being pushed into the sea.

According to Rehmat Ali, apart from what is today Pakistan, with Kashmir and much more added to it, in the west was Bang-e-Islam, comprising Bengal and Assam in the east, The Muslim Indian empire was also to have Osmanistan (Hyderabad Deccan) and Moplahistan on the western coast of Southern India, and numerous other bits and pieces. Apparently, any area, big or small, that had any connection with Muslim history and culture, had been arbitrarily included, with Rehmat Ali secure in the supreme confidence that the Hindus wouldn’t object despite their overwhelming majority, to say nothing of the Sikhs.

This was the “great visionary” who, in school textbooks and the country’s postage stamps, is counted among the heroes whose tireless efforts before 1947 led to the establishment of Pakistan. As his admirers would have us believe, a crazy notion, howsoever nebulous and impracticable, is preferable as an ideal to the real Pakistan, which is too small and too pragmatic to evoke the Muslim spirit of imperialism in the style of Mahmud Ghaznavi.

What most of us have dreamed about in the 20th and 21st centuries is empire builders like Muhammad bin Qasim and Salahuddin Ayubi and not the prosaic Mohammad Ali Jinnah, the constitutionalist, who just wanted the Muslims” rights and nothing more. By the way, a Rehmat Ali Society is very much active in Gujrat, his home town. Left to it the Quid’s bones would probably be disinterred from his mausoleum and replaced by its hero’s remains imported from Cambridge which he loved more than Pakistan.

He said the Quaid had dealt six deadly blows to the millat. I need not recount the six blows; they are too deadly for this column to take. I am convinced he was plain jealous. If you are interested you can look for an old publication called, “Pakistan, Fatherland of Pak Nation,” which also contains Rehmat Ali’s original pamphlet “Now or Never” on what Pakistan was supposed to consist of as a resuscitated Muslim empire. The thing has been out of print for many decades. I gave away my copy to someone and didn’t bother to take it back.

Before I close, let me repeat what that interior secretary said in conclusion. “If it were generally known what Rehmat Ali thought of Quaid-i-Azam and what he wrote about him, the box bringing his bones from England might not get an exactly red carpet welcome. So, as we bureaucrats say about matters that don’t need further attention. Please file.”

Liberal agonies

“WHY are the liberals always on the other side?” asks the fictional French military commander Colonel Mathieu when he is challenged, in The Battle for Algiers, for using torture to fight terror. The film suggests that torture works as a tool of immediate necessity, even if the consequences are a blurring of morality and so final defeat.

Four decades on, Mathieu’s charge against liberal scruples is still being raised, implicit in the defence of the means being used in a modern battle against Islamic terror. Old conventions and legal obligations are being portrayed as obstacles to victory in a conflict, it is said, whose scope and severity are being recklessly misunderstood.

Without supporting torture, the prime minister crystallised this thinking when he asserted last year that”the rules of the game have changed”. John Reid’s urgent demeanour has done it again in the past week.

Counter-terrorism and justice do not always march in step and nor is the easy response, that justice must always come first, enough of an answer. The dilemmas are more acute. The arrest of 24 suspects in connection with an alleged plot to destroy airliners over the Atlantic may have been a triumph of intelligence and policing that saved many lives.

No government could be criticised for acting when it did, on the information it claims to have had. Nor have legal safeguards been broken here. Yet safeguards in other countries are less rigorous. At what point do actions abroad pollute British justice, even if in the short-term they may protect British security?

Reports from Pakistan suggest that much of the intelligence that led to the raids came from that country and that some of it may have been obtained in ways entirely unacceptable here. In particular Rashid Rauf, a British citizen said to be a prime source of information leading to last week’s arrests, has been held without access to full consular or legal assistance.

Disturbing reports in Pakistani papers that he had “broken” under interrogation have been echoed by local human rights bodies. The Guardian has quoted one, Asma Jehangir, of the Human Rights Commission of Pakistan, who has no doubt about the meaning of broken. “I don’t deduce, I know - torture,” she said. “There is simply no doubt about that, no doubt at all.”

If this is shown to be the case, the prospect of securing convictions in this country on his evidence will be complicated. In 2004 the Court of Appeal ruled — feebly — that evidence obtained using torture would be admissible as long as Britain had not “procured or connived” at it. The law lords rightly dismissed this in December last year, though they disagreed about whether the bar should be the simple “risk” or “probability” of torture.

—The Guardian, London