More stress on positives

I HAVE written this article and the few that will follow in response to a request from a senior official of a development agency based in Washington. He was preparing for the annual meetings of the World Bank and the International Monetary Fund which, this year, were held in Singapore in mid-September. He said that the big theme of the meetings was the economic impact of resurgent China and India on the global economy. Papers were prepared and discussions held on what impact the two Asian giants, with their economies expanding at the rates that will see their GDPs double every seven to eight years, will have on the rest of the world.

There was considerable optimism in the air about Asia’s economic prospects. The financial crisis that hit East Asia in 1997-98 brought an end to the talk about the region’s miracle economies and how they were well on the way to shaping the global system. As The Wall Street Journal put it in its review of Asia published on the eve of the Singapore meetings, nine years after the 1997-98 crisis, “the argument that the global economic centre of gravity is inexorably shifting to Asia has never been more compelling.”

That Asia may once again be in the economic lead was a sentiment shared by a number of senior economic policymakers in the area. Declared Jian Jianqing, chairman of the Industrial and Commercial Bank of China at a recent World Economic Forum Conference in Tokyo, “the new century belongs to Asia.” The Asian Development Bank, six months after it issued its “Outlook 2006”, raised its forecast for the developing nations of the region. It said the region, excluding Japan, was likely to register an average GDP growth rate of 7.7 per cent this year, up from its forecast in April of 7.2 per cent. Last year’s GDP growth was 7.6 per cent. “Acceleration on growth in the People’s Republic of China, due to booming investments and exports, has significantly influenced this regional upward revision”, said Ifzal Ali, the bank’s chief economist.

What was particularly gratifying was that the high rate of growth was being propelled not only by the booming economies of East Asia but some push was also coming from South Asia. “Revisions to growth forecasts of the three south Asian economies — Bangladesh, India and Pakistan — on the back of higher level of export growth have also fed into the higher 2006 projections,” continued Ali. Will this rate of growth continue into the future and if it does, will the sources of growth continue to be the same as those that produced the remarkable results for 2006?

The Asian Development Bank saw a slight easing of average growth in the 43 developing countries that make up the region. Rate of combined GDP would decline slightly from 7.6 per cent in 2006 to 7.1 per cent in 2007. This is still marginally higher than the seven per cent rate of growth estimated in April, 2006 when the bank issued its annual report.

The decline would come about because of the slowing demand from industrial countries. Since most of the rapidly growing economies of the region, with the exception of Pakistan, are dependent on exports for generating domestic growth, the anticipated slowdown in the industrial world would have only a slight depressing effect.

In so far as individual countries in the Asia region are concerned, China and India will be among the engines driving growth. China is likely to grow by 10.4 per cent in 2006, compared with the earlier forecast of 9.5 per cent while India would expand by 7.8 per cent up from the April forecast of 7.6 per cent.

In Pakistan’s case, however, ADB reduced by a slight amount its projection for 2007. It now expects GDP in that year to increase by seven per cent, as against the 7.1 per cent estimate made earlier in the year. In other words, while the Manila-based developed bank sees considerable strengthening in the growth rates of China and India, it projects a slight weakening in Pakistan’s case. This is essentially because of the continuing structural weaknesses in the country’s economy.

Another feature of the Pakistani economy that distinguishes it from that of China and India is its dependence on domestic demand rather than trade as a driver of exports. The balance of payments position worsened significantly in 2006, as imports powered ahead by 31.3 per cent against only 14 per cent growth in exports. Oil imports contributed to this development; expenditure on them increased by 66.6 per cent. But non-oil imports also surged, increasing by 32.1 per cent, reflecting the large expansion in domestic demand.

A significant part of this growth in demand was fuelled by increase in consumption of large-ticket items such as cars and domestic appliances that were financed by the banking sector. Not only was Asia on the move, some of its larger economies have begun to exert their influence in the global marketplace. This was an important development since it reduced the element of passivity in economic relations with the rest of the world.

China, searching for industrial raw materials and new sources of energy supply, is extending its economic influence well beyond its borders. It has reached out to the resource-rich countries in Africa and Latin America and has concluded dozens of long-term agreements for the supply of commodities vital for the growth of its economy. At the same time it has continued to amass vast amounts of foreign exchange reserves largely because of the enormous trade surplus it continued to register with the United States.

The IMF estimated the Chinese accumulated reserves in June 2006 at $941 billion. Much of this was held as US treasury bonds. The increasing weight of China in the global economy was recognised by the International Monetary Fund when its voting power in the institution’s governing board was increased at the Singapore meeting along with those of Mexico, South Korea and Turkey. India voted against this change since it also wished to see an increase in its voting power.

India, while also searching for sources of energy supply, and also with a large foreign exchange reserve ($27 billion in July 2006) had a different kind of impact on the global economy. As columnist Thomas Friedman pointed out in his widely read book, ‘The World is Flat,’ India’s IT sector is now an integral part of the working of large corporations in the industrial world. Every western business of some significance has an India strategy, and business executives are daily trooping to the country signing new contracts.

In the early 2000s India was the world’s leader in the outsourcing of IT services. It is also making its presence felt in the sectors of health and tourism. Bollywood, the Indian movie industry, is beginning to impact on culture in the West. While China’s reach to the world outside is led by the state, India is reaching out with the help of its vibrant private sector. An entrepreneur of Indian descent became the largest steel producer in the world. Indian managers are ascending the western corporate ladder. An Indian heads the telecommunications giant Vodafone while Pepsi Cola has announced the appointment of an Indian woman as the company’s next chief executive officer.

But there are important differences between these two Asian giants with respect to political governance. While China continues to be governed by one political party with near-dictatorial powers, the Communist Party of China, India is a vibrant democracy. The country’s claim that it is the world’s largest democracy has tremendous appeal in the West. China, on the other hand, has been ruled for the last half century by one political organisation. India has been administered by a coalition of more than a dozen political organisations. The differences in the political systems of the two giants have convinced many analysts that the Indian model of development is more sustainable than that of China.

These were then some of the developments and development themes that were explored at the meeting in Singapore. Where does Pakistan fit in? In several of my columns in this paper, I have shown scepticism towards Pakistan’s ability to sustain into the future the seven per cent growth in GDP it had produced on average in the three-year period between 2003 and 2006. Notwithstanding some of my expressed concerns about the management of the Pakistani economy, what are some of the “positives”?

After all, it should be recognised that Pakistan has made important strides since 1999 when the country seemed to be headed towards an economic abyss. My concerns about some of the deep structural problems in the Pakistani economy remain. Those notwithstanding, public policy must be built on not just worries but also on hope, and hope is based on “positives”. Given that, what are those positives that, within an appropriate strategic framework, could help Pakistan join the league of what I had once called the Asian elephants — India and China?

Pakistan is not, after all, a small country in terms of its population (about 160 million in 2006), or in terms of its GDP (about $350 billion in purchasing power terms), or in terms of the size of the middle class (possibly about 50 million to 60 million). It can also feed the almost insatiable appetite in the world for goods and services produced by skilled labour. Like India, it can also supply the developed world with skilled workers — an asset that is increasingly in short supply in these countries.

Pakistan is located in an important, albeit an increasingly volatile, part of the world. It is, however, one of the few countries that could lead this region — or these regions, since Pakistan straddled several. This is one other reason why it should not be ignored by the developed world. It should appear on its radar screens since it too could provide them with a sizable market for their operations. If Pakistan could be made to move at the same pace as China and India, Asia would become the centre of global economic activity.

Could that happen? Are there some features in Pakistan’s economy that could make that journey possible? There is, at this time, a great deal of negative talk in Pakistan and about Pakistan and I have made some contribution to that conversation myself. Wouldn’t it be appropriate to focus on some of the positives that should not be too difficult to identify? What are some of the positive features I would see in the Pakistani economy that could make it into a baby elephant? In writing about them I will not focus on the country’s potential but dwell, instead, on what is already present on the ground. I will continue next week with this theme about positives.

Linguistic division of provinces

ABOUT a fortnight ago, the Federal Parliamentary Affairs Minister Sher Afgan had indicated that Punjab could be sub-divided into three smaller provinces for several reasons. Soon after, a high functionary of the state denied the possibility saying that it was, at best, only a personal opinion.

Still, a few Urdu dailies carried columns condemning the whole idea as being little short of a secret scheme to dismember Pakistan (despite the fact that these units would be a part of the federation as in the case of the present provinces).

Yet, India did exactly the same thing with great advantage. The report of the states reorganisation commission of 1955 drew linguistic boundaries for most of the states of India which are in place today. To begin with, Nehru was not keen on linguistic restructuring. Most ruling politicians thought that change was uncertain and that giving in to ethnic demands would break up the country. But Sri Potti Sriramulu, the revered Andhra leader, fasted unto death in 1952 to create an Andhra state. On December 19, Nehru agreed to the people’s demand and the state came into existence in 1953.

Andhra was Telugu-speaking as were most of the other sub-divisions. Punjab had to be divided again, this time to concede a Haryana state speaking Haryanvi and a Punjab state speaking Punjabi. The Bombay state was partitioned into the Marathi-speaking Maharashtra and the Gujrati-speaking Gujrat. There were riots because Mumbai city went to Maharashtra. Such things happen but, overall, India, being based on language identity, became less prone to ethnic violence.

The other reasons for internal conflict were not eliminated, and, as a result, there is trouble in Kashmir, Nagaland and Mizoram. In short, the linguistic sub-division of a huge multi-lingual country does not solve all problems but it does solve some of them. With this in view, I had suggested the creation of linguistic federating units — call them provinces if you like — for Pakistan about 10 years ago in a book called Language and Politics in Pakistan. Here I have reproduced those proposals from the book.

The Ansari Commission, set up by Ziaul Haq, conceded that the number of provinces should be increased in view of the fact that Nigeria had raised the number of its provinces from three to 19 in the aftermath of the Biafra ethnic conflict. The commission, however, did not endorse the idea of making provincial boundaries conform to ethno-linguistic ones. Such an idea has been proposed from time to time.

In 1942, the election manifesto of the Communist Party of India advocated that power be transferred to 17 different ‘sovereign national constituent assemblies’ defined by ‘nationalities’. The Baloch nationality was added to the list in 1946. Ubaidullah Sindhi, an anti-British political figure in pre-partition India, was also one of the exponents of nationalities. Sindhi proposed the establishment of 10 republics in India, among them south-western Punjab including Bahawalpur with Multani Punjabi as its common language; Pushtania having Pushtu as its common language; Balochistan where the Balochi language is spoken and Quetta and Kalat are the chief cities; Northern Punjab with Pothwari Punjabi as its common language and Rawalpindi as its chief city; and Sindh with Sindhi as its common language and Karachi as its centre.

If this is modified to take into account the demands of the speakers of Hindko, Khowar, Shina and other minor languages, a Hindko-speaking province would be carved out of the NWFP. Moreover, Chitral and Kohistan would also become provinces and the Northern Areas could be divided into Burushaski and Shina-speaking provinces, though this may not be the best solution in those areas due to the cleavage which exists between Sunnis and non-Sunnis. However, sectarian tensions may be reduced in other ways.

The formation of other provinces along linguistic lines would harm Punjab most. For one, it would no longer remain a large province and its weight in the legislature would be reduced considerably. The Pashto-speaking province would not stand to lose because, while it would lose Chitral, Kohistan, Hazara, Mansehra, and Dera Ismail Khan, it would gain the Pashto-speaking areas of Balochistan. The latter would also lose some areas but the Pashtun-Baloch conflict would vanish.

There is no Balochi-Brahvi conflict at present and, given the history of the province, there should not be any, especially if both languages are given equal importance. Likewise, in the NWFP, the Hindko-Pashto conflict and in the Punjab, the Seraiki-Punjabi conflict will also disappear. However, even Punjab would gain as it would no longer be seen as dominant, and ethnic bitterness would be reduced. Above all, if the provinces desire to promote their language or culture, they would not have to struggle against the interests of powerful minorities as is now the case.

It is only in the province of Sindh that the consequences of creating an Urdu-speaking province may prove worse than the present state of high tension between the Sindhis and the Mohajirs. The supporters of the MQM have, of course, demanded such a province but the Sindhis do not accept this demand. This is understandable, considering that the Sindhis feel that the Mohajirs came as immigrants, not as conquerors. But now, if the most modernised part of Sindh is given to them, they would have conquered Sindh.

The Mohajirs feel that they too have the right to preserve Urdu and their distinctive culture in the only part of Pakistan where they are in a majority. In practice, there is a division in Sindh as Karachi has remained, in a sense, separated from the province for many years. If Karachi is now made a Mohajir province, it will only confirm and establish the de facto situation.

However, on the basis of the 1998 census, only the city of Karachi and no other area of Sindh would be cut off from the province. But such a step cannot be advocated without taking the sentiments of Sindhis into account. The most important point is that bloodshed should be avoided; the tension between Sindhis and Mohajirs should not lead to a civil war and peace should be maintained in Sindh. If the partition of Sindh can lead to these results, it may not be a bad idea.

If, on the other hand, the level of violence increases, some other solution should be sought such as making Karachi a free city with its income going to Sindh as well as its own inhabitants. In short, one is still unable to give a final solution for Sindh beyond suggesting that its own leaders should discuss possible solutions not necessarily on the lines suggested by myself.

There may still be the issue of fairly large groups of speakers of Urdu in the cities of Sindh and speakers of Hindko in Peshawar, Kohat and other cities of the NWFP. The new provinces will have to come to terms with these groups who might wish to preserve their languages and culture rather than integrate with the majority.

On the other hand, if schooling is in the mother tongue as it should be in the lower classes, then the minorities might find it useful to learn their neighbours’ languages. In general, the chances of the preservation of linguistic and cultural heritage will increase for most people though some people would have to integrate themselves in the interest of harmony with their neighbours.

As mentioned earlier, linguistic identity is invoked because there is real or perceived injustice in the division of power, jobs, goods and services. Thus, the ethnic problems of Pakistan — like those of India — will not disappear merely by the creation of linguistic units. They will end only when these linguistic units have an interest in keeping the federation together which means they should have, and be perceived as having, a just share in the power structure and resources of the state. Having said this, it must be emphasised that linguistic states will certainly reduce some of the tension that results in ethnic discord in the country.

An unwinnable war

THE Labour party has so much to make itself unhappy about in Manchester this week that only the demonstrators outside the hall will give Iraq, Afghanistan, George Bush and the “war on terror” the attention they deserve.

Yet there is little doubt that when the history of this government is written, the collapse of confidence in Tony Blair will be attributed principally to his foreign policy.

Most people care not about the consequences of this for the prime minister, but about those for the rest of us. By far the worst is that we are committed to a confrontation with radical Islam, in which the British and American peoples, never mind the rest of the world, find it hard to believe the leaders of “our side”.

They have deceived the public so often, misread events so grievously, adopted so many mistaken policies. Thus, when they tell us that it is necessary to accept a loss of civil liberties to fight terrorism, to sustain a Nato force in Afghanistan, to continue the struggle in Iraq, or even to stop carrying toothpaste in airline hand baggage, even if some of these propositions are true, it is hard to accept the credentials of those making the judgments.

It is remarkable that John Reid, for instance, dares to express an opinion about the weather, far less national security policy, after suggesting as defence secretary that British troops might be able to return from Afghanistan “without firing a single shot”. The attorney general, Lord Goldsmith, has been a threadbare figure since he asserted the legality of the Iraq invasion. Yet we are today invited to accept his views about, for instance, the validity of wiretap evidence in courts.

This is serious, because Al Qaeda indeed represents a deadly threat. Bush and Blair’s deceits about WMD have made the abbreviation the plaything of satirists. Yet we shall be lucky to get through the next 10 years without weapons of mass destruction being used somewhere in the world, quite likely against us.

A dismaying number of people cherish such bitterness towards Bush and Blair for Iraq, Afghanistan and now Lebanon that they want US and British forces abroad to be seen to be defeated. This seems sorely mistaken. Whatever the follies of the past, it cannot be in the interests of the Iraqi or Afghan peoples, or of the world, for Islamic extremists to prevail. It appears unlikely that democracy will get a real chance in either Iraq or Afghanistan, but it is not ignoble to cling to some small hope that it might.

It seems important to separate our alienation from Bush-Blair and the basics at issue with the Muslim world. We need to build bridges to moderate Islam. We must also resist the fanatics with a confidence in our own cause which is presently lacking. The west cannot negotiate with fundamentalists whose real enemy is the modern age. Their victory would be a tragedy especially for women, but also for all Muslims who aspire to share the prosperity and opportunities of the 21st century.

It is Bush’s achievement to have made Osama bin Laden a hero in the most unlikely places. I recently heard a Malaysian academic describe a conversation with a young Thai whom he met selling Bin Laden T-shirts in Bangkok, and indeed wearing one himself.

The stallholder cheerfully admitted that he scarcely knew who Bin Laden was. He recognised him only as the enemy of George Bush, who was the ally of the (pre-coup) Thai government, which the young man hated. In many parts of the world where America is bitterly unpopular, Bin Laden is perceived as “my enemy’s enemy” and thus “my friend” — or even “my co-belligerent”.

It becomes more dismaying when some Europeans fall prey to this sentiment. Where a generation or two ago images of Che, Fidel or Mao adorned the walls of some leftists, today there is a vogue for Bin Laden. So little confidence do some people feel in the virtues of their own societies that they are willing to suppose Bin Laden might be, well, a bit right. They say: when Bush and Blair have occupied Iraq and endorsed Israel’s excesses towards the Palestinians, who can blame a young Muslim for turning to Al Qaeda?

This is not merely flabby thinking, but intensely dangerous. We have to keep rehearsing certain mantras: Al Qaeda massacred nearly 3,000 innocents on September 11 before the West invaded Afghanistan, never mind Iraq. Nobody outside the White House and Downing Street doubts that Bush and Blair’s actions have vastly worsened relations with the Muslim world, as some of us predicted that they would. But nothing can justify terrorism.

Osama bin Laden preaches jihad for its own sake. He does not pretend that any concession by the West can lead to peace. He argues, as did Adolf Hitler, that making war is an end in itself. He and his followers aspire to kill people in thousands. Bin Laden’s policy, if it can be dignified as such, makes George Bush’s denunciation of him as an “Islamic fascist” one of the few valid observations to have emerged from the White House since 9/11.

It seems right for the rest of us to apologise for certain of the deeds of our governments, but we can go only so far. Some moderate Muslims in Britain and elsewhere appear to suggest that democracy is betraying them when the US and British governments ignore their strongly held views about Lebanon and Iraq. Yet no minority can expect to exercise a veto on the actions of elected national governments. Disaffected Muslims in Europe must sooner or later acknowledge that if they choose to belong to our societies, they must live with their imperfections as the rest of us do, restricting dissent to the ballot box.

There is little hope of rebuilding the trust of either Muslims or non-Muslims in the foreign and security policies of the American and British governments under their present national leaders. Americans, of course, have never doubted the justice of their own cause. In the US, the collapse of confidence in Bush represents a public judgment on his competence, not his purposes. But many thoughtful decision makers in Washington understand that America can never make its will prevail abroad without a degree of international consent and support, which Bush has forfeited and which need to be regained.

We must somehow survive the last months of Tony Blair’s premiership, and the more alarming two years left to George Bush. Thereafter, among the foremost responsibilities of their successors will be to restore faith that the west deserves to win the struggle against Islamic fundamentalism, as it certainly does.

There is no reason for Blair’s successor to quarrel with the US administration. It has become essential, however, to recreate an international perception that this country has a mind of its own. We are engaged in a struggle with fanatics whose vision is brutal, primitive and nihilistic. They will be defeated only when the West’s counter-vision is perceived by reasonable people as just and unselfish. Under Bush and Blair it is not, and never will be.—Dawn/Guardian Service

Novel diplomacy

PRESIDENT Pervez Musharraf accuses a senior Bush administration official of threatening to bomb his country back to the Stone Age! We’ll get on with this potentially serious diplomatic incident in a moment — but first, a word from our sponsor, Simon & Schuster.

That was the gist of an odd commercial break in Friday’s news conference by Musharraf and President Bush. The somewhat embarrassing love fest between the two leaders was moving along smoothly when a reporter asked about the explosive allegation scheduled to be broadcast on CBS’ “60 Minutes”: In the wake of 9/11, Musharraf claims, former Deputy Secretary of State Richard L. Armitage threatened that the US would bomb Pakistan unless it cooperated in the war on terror.

“I am launching my book on the 25th, and I am honour-bound to Simon & Schuster not to comment on the book before that day,” Musharraf replied. “In other words, buy the book, is what he’s saying,” Bush helpfully translated.

International diplomacy has always been dependent on external factors, but it has seldom hinged on the terms of a book contract. At a time when the developing world is protesting what it sees as US unilateralism and bullying — as evidenced by the stark anti-American speeches (and their friendly reception) at last week’s annual United Nations General Assembly session — Musharraf’s claim threw gasoline on the bonfire. Yet rather than discuss and help resolve the matter during his US visit, Musharraf decided instead simply to plug his upcoming autobiography.

So maybe diplomacy and book publishing aren’t that different after all. In both, timing is everything.

— Los Angeles Times