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| August 19, 2006 | Saturday | Rajab 23, 1427 |
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West’s losing ‘war on terror’
In the name of culture
Not a sustainable growth
Talking about secrets
ECONOMIC growth is a complex phenomenon. How much growth is achieved by a country for how long, using which strategies, emerging from which sectors and is shared by whom are all inter-related questions. A review of literature on economic growth along with growth experiences across the globe suggest that the growth performance of a country can be analysed using 10 criteria of assessment: sustainability, balance, optimality, equity, self-sufficiency, diversification, externality, efficiency, stability and structuralism.
RAIN, storms, earthquakes — these are nature’s visitations over which man has little control. But caring governments and concerned officials try to minimise the impact of such calamities by strengthening the infrastructure of their cities and towns and villages so that damage and disruption can be limited to the extent possible. We have just celebrated the 59th year of our independence, and we find that we are as unprepared, or perhaps even less prepared, to face any kind of emergency as we were when we began life as an independent state. The chaos created by the current spell of heavy rains in several of the country’s urban centres bears ample testimony to this.
Karachi has not had it good in terms of civic management for decades. Thursday’s heavy rain and the rainfall a few days ago have thoroughly exposed all the city’s civic warts. Many roads were in knee-deep water. The main traffic artery, Sharea Faisal, was totally choked for hours with traffic going out from downtown. Buses were stranded. People stood in the middle of roads, away from the water pools on the sides, in the forlorn hope of getting a lift. Some people reached home well past midnight. Cars stalled all over the city, and both functioning and under-construction underpasses were again flooded. Police and city government officials were at sea about how to go about controlling the chaos. If it had not been for scores of ordinary Karachiites who came out of their houses to help traffic move and warn off motorists from the more dangerous water traps, the situation would have been far worse. Things sorted themselves out only when the rain stopped and a weak sun came out on Friday morning. The story was about the same in Hyderabad and other Sindh cities. Everyone suffered, but as always happens, the low-income groups suffered more: their shanty towns were flooded and they remained without power for hours. At least 26 people were electrocuted by fallen wires.
Why is it that we are caught unprepared every time we have an emergency like this on our hands? Fifty-six millimetres of rain doesn’t constitute an emergency, and yet we had this civic breakdown in Karachi. There is of course a whole history of lack of planning, bad planning, corruption and sheer inefficiency behind the existing urban mess, which becomes more difficult to tackle as time passes because of the increasing population, allowed to grow unchecked by governments. But more than anything else, it is the lack of concern for the ordinary citizen on the part of governments and politicians that is responsible for many of our woes. Everyone is so involved in political engineering that civic engineering and management gets short shrift. There have been decades without elections so that the people remained disenfranchised and no one needed their votes or was concerned about their problems. This has set a pattern where the average citizen is out of the loop. His welfare, his health, his education, the quality of his life, his transportation — nothing appears to be the business of the state any longer. Urban projects are undertaken often with considerations other than the people’s convenience or comfort in mind (the concretising of Karachi’s Clifton beach being one example). Unless the whole approach to planning changes, with the average citizen seen as the pivot, we will continue to live miserably.
THE writing is on the wall. A recent poll in the UK found that four out five Britons believe that the West is losing the ‘war on terror’, while only 14 per cent approve of Tony Blair’s support for the Bush administration’s foreign policy. An overwhelming majority is of the opinion that Britain should distance itself from the US line and instead choose a course that is either independent or more in keeping with the EU approach. Since 9/11, the Blair government has backed the US in its policies on Afghanistan and Iraq, besides supporting Washington’s stance on the recent conflict in Lebanon. Vehemently criticised in Britain from day one, the Iraq invasion was originally opposed on humanitarian and anti-imperialist grounds, the argument being that the war was unjust and based on flawed — if not deliberately skewed — intelligence. Now, after 7/7 and the uncovering of an alleged plot to blow up transatlantic airliners, concern in the UK is shifting to personal safety.
Even before the Blair government began offering political and material support to a militaristic America, sections of the Muslim population in Britain felt marginalised in a society that was their own — fifty per cent of the UK’s 1.6 million Muslims were born in that country — yet alien in many ways. But while the seeds of discontent may have been sown by years of real or perceived racism, the swing towards extremism is a recent phenomenon, one that can be linked to Britain’s participation in the occupation of Iraq and Afghanistan. The reason for this dramatic shift in attitude has not escaped notice in a nation with a remarkable capacity for self-analysis. If nearly fifty per cent of Britons now feel unsafe, it is because they realise that the terrorist threat facing the country comes largely from within, not outside. This growing radicalisation is not, of course, limited to Britain. From Indonesia to Canada, US hegemony and atrocities in Muslim countries are fanning the flames of terrorism. Meanwhile, core grievances such as the Israeli occupation of Palestine remain unaddressed. For Britain, distancing itself from US policy is the only sensible step to take.
THE lacklustre ‘culture week’ being celebrated by the Punjab archaeology department inside the Lahore Fort calls for some serious stocktaking. The activities presided over by officialdom negate the very function of the custodian department: protection and conservation of national heritage sites. The thin public attendance at the events because of cumbersome security arrangements for VIPs, too, negates the spirit of popular culture. The Punjab government has been directed in the past by higher courts not to hold such events on the premises of historical monuments to avoid damage to the heritage structures, but all such orders have fallen on deaf ears. The impunity with which the government has consistently violated court injunctions in the matter is amazing: the fort premises were recently rented out for shooting a TV commercial being aired these days. It seems rules are meant to be observed only by the general public while the privileged bypass them.
Public entrance to the Hazuri Bagh quadrangle outside the Lahore Fort where ordinary people used to gather after sunset to hear folk singers croon the Heer and other traditional lore without charge has long been barred, stopping the popular pastime which caused no damage to the garden or to the marble pavilion built there by Ranjit Singh. The activity was totally harmless, for it involved no setting up of a stage, food stalls or installation of lights. People just sat on the greens and enjoyed poetry recitals without it ever being an officious affair. The popular cultural activity was discontinued citing the same rules that the government itself has been bending to allow officials and big businesses to partake in exclusive activities from which the general public is kept out. There is nothing cultured about double standards being applied in the name of culture.
Taking the first criterion of sustainability, economic growth experienced by different countries can be classified into two categories — the sustainable and the unsustainable. The former is self-sustaining, environment-friendly and is based on the normal use of the natural and mineral resources of a country. Unsustainable growth, on the other hand, is not only erratic, it is environmentally degrading and is associated with the abnormal exploitation of natural wealth.
Economic growth in Pakistan does not meet the sustainability criteria as it is accompanied by unsustainable pressures of population and urbanisation, rapid deforestation and depreciation of physical infrastructure as well as uncontrolled pollution.
The criterion of balance helps in identifying whether economic growth experienced by a country is balanced or unbalanced. Economic growth is considered to be balanced when various regions comprising a country, its rural-urban and its male-female populations or its major sectors such as agriculture and industry are evenly and fairly developed. Unbalanced growth has the opposite characteristics reflected in wide disparities in the levels of economic development. This criterion establishes that the economy of Pakistan continuous to suffer from dualism as certain regions, sub-sectors and segments of population remain grossly under-developed while others show the opposite picture.
Coming to optimality, the private and public sectors in an economy must play their optimal roles to generate synergies of partnership and to ensure maximum level of employment and output. In the modern world, rigid adherence either to the Platonic-cum-Marxian type centralised state or the Aristotelian-cum-Smithsonian type laissez-faire economy has waned. At the same time, there is a general acceptance of economic planning as an essential tool of national development.
State intervention is at present considered to be a sine qua non for correcting a host of market failures. Given the resurgence of the philosophy of economic neo-liberalism, the fact remains that even in the most liberalised economies of the world, economic planning continues to determine numerous variables of the economy such as savings, investment, money supply, prices, exports, imports, exchange rate and GDP growth.
In the case of Pakistan, both the public and the private sectors have played a sub-optimal role in economic development and have failed to realise its full potential. Whereas the public sector has been constrained by insufficient resources, inefficiencies, wastage and corruption, the private sector has suffered from inertia. At the same time, a lack of vision and foresight has afflicted both sectors for many decades, with serious consequences for the process of economic growth.
The criterion of equity, the fourth in our analysis, focuses on the distributional and welfare aspects of growth. If economic growth leads to greater inequity in income and wealth distribution and a large portion of the population finds itself further down in the scale of living standards, such growth would be classified as anti-poor. An increase in the people’s level of sustenance is the primary goal of economic growth. For that reason, there has been widespread disillusionment with the “trickle-down” theory which stipulates that the benefits of economic growth will automatically filter down to the poorest of society.
Even the “trickle-down” effect of economic growth is neutralised if the taxation system in place is regressive. Furthermore, if economic growth synchronises with a lax monetary policy and high inflationary pressures, the poor sections of society would suffer the most. Hence the analysis of economic growth needs a holistic approach which takes into account the impact of fiscal, monetary and trade policies for assessing the overall implications of economic growth.
For evaluating the growth of a country, the fifth criterion i.e self-sufficiency is extremely relevant. Self-sufficiency in the present context refers to the level of domestic resource mobilisation to finance gross investment in the country. This is the main determinant of economic growth. If a country continues to finance its private and public investment from domestic and foreign loans, the resultant growth could be identified as the “borrowed growth”.
A large number of developing countries have been heavily dependent on external aid and are now badly caught in the debt trap. These countries need to borrow more to service their earlier debts. At the same time, external borrowing brings into the country borrowed technologies and borrowed strategies. As a consequence, the country often loses its autonomy in policymaking. The sixth criterion for assessing the growth process of a country is labelled as the criterion of diversification. In a large number of developing countries in Asia and Africa, growth is critically dependent upon the production of one or two raw products such as rubber, cotton, jute, cocoa, coffee, tea etc. In these cases, deterioration of barter and income terms of trade is universal and these countries fail to mobilise sufficient resources for long-term development.
Despite registering a growth rate of about five per cent per annum on an average basis during the last 58 years, Pakistan’s economy is not sufficiently diversified and the dictum that the cotton output has cradled Pakistan’s GDP growth, as one World Bank economist put it, holds good even today. Without diversification, Pakistan’s economy will be confronted with serious challenges of globalisation which have emerged with the signing of the Uruguay Round Agreements and that are being implemented by the World Trade Organisation.
The seventh criterion for analysing the structure of economic growth is externality. Here, the possible impact of economic growth on the external sector of the country concerned is diagnosed. This includes the sub-components of balance of payments such as exports, imports, invisibles, etc. If growth in real GDP leads to widening of the trade deficit or the current account deficit, it puts pressure on the foreign exchange reserves of the country.
In this case, assets may be created through the process of economic growth but, at the same time, the creation of external sector liabilities due to, say, excessive imports could drastically reduce the benefits of economic growth. Pakistan’s estimated trade deficit of $11 billion and the current account deficit of around $5 billion for the year 2005-06 only underline the adverse externalities of an otherwise high growth rate of 6.6 per cent achieved for the year.
The eighth criterion of growth assessment is that of efficiency. According to this criterion, different countries achieve different levels of output with the same level of factor inputs. The efficiency factor is commonly measured by the parameters of the Incremental Capital Output Ratio (ICOR) which indicates the additional investment required to generate one unit of output and labour-output ratio i.e. additional labour needed to create one unit of output.
A lower value of these parameters indicates the relative efficiency of factor use. The main determinants of efficiency are capacity utilisation, skills and training of the work force, management techniques and the nature of technology. Even though all these factors are important for enhancing efficiency of factors of production, the role of technology in augmenting the factor productivity is now considered as the most critical. Dani Rodrik, professor of international political economy at John F. Kennedy School of Government at Harvard University, in his recent research covering 140 countries has measured the relative shares of capital, labour and total factor productivity or TFP which is an indicator of the technology factor. According to his work, in industrial countries, a major contribution to economic growth comes from TFP rather than factor accumulation. In countries like Germany, UK, France, Japan, Brazil, the contribution of TFP has varied from 25 per cent to 50 per cent. In the case of Pakistan, the share of TFP has been almost negligible which suggests that Pakistan’s growth performance has not synchronised with any technological advancement.
If economic growth is volatile and excessively fluctuating, it renders policymaking extremely difficult. Therefore, the criteria of stability the ninth in our analysis, can be applied to assess the inherent variability of economic growth and its potential effects at the micro- and macro-economic levels. Another aspect of stability is the relative fluctuations occurring in the price and exchange rate levels. If high growth rates occur along with high inflation rates or large depreciation of the domestic currency, growth benefits could be neutralised.
The last criterion for evaluating the quality of economic growth can be identified as that of structuralism. The dynamics of economic growth require that the structure of economies should be changing with lower shares for agriculture and rising shares for the industrial as well as the services sectors. It is vital that economic growth should be followed by structural transformation. Without such a transformation, the economy remains weak and vulnerable to external shocks.
When evaluated against these criteria, Pakistan’s economic growth experience does not appear to be highly favourable. Despite a reasonable growth rate achieved over the last five and a half decades, the country continues to suffer from gaps in poverty, human development, trade, saving-investment and technology. It appears that it will take some time for Pakistan to reach the take-off stage.
THE United States has never had an Official Secrets Act — a statute forbidding private citizens from disclosing and discussing information the government wants to keep quiet. Last week it got one.
The change didn’t come from Congress but from a federal judge in Virginia. At the urging of the Bush administration, Judge T.S. Ellis discovered it in an old and vague law that prohibits disclosure of information related to the national defence.
Judge Ellis’s dangerous decision comes in the case of two former executives of the American Israel Public Affairs Committee (AIPAC) — Steven J. Rosen and Keith Weissman — who are accused of conduct that skirts the legal line between legitimate advocacy and illicit espionage. The decision has far-reaching implications; if it stands, it will greatly augment governmental authority to compel Americans to keep quiet about what they know.
The government alleges that Mr Rosen and Mr Weissman conspired with a Pentagon employee to receive sensitive information from him and then give it to people not entitled to receive it — including Israeli government officials, a reporter for The Post and colleagues at AIPAC. Prosecutors have not accused them of spying, a charge the alleged facts do not comfortably support.
Instead, it has moved under a related provision of law that prevents people in possession of national defence information from disclosing it to others.
This law, murky in its scope since Congress passed its predecessor statute during World War I, would, on its face, ban anyone from giving sensitive information, itself not defined, to any other person. Judge Ellis conceded that it can’t reach as far as its plain meaning would seem to indicate.
— The Washington Post