THE federal government’s move to share with the provinces the authority to levy and collect taxes is indeed welcome. The extent to which such sharing will be done will be recommended by the parliamentary committee on provincial autonomy headed by Wasim Sajjad, former chairman of the Senate and the extent to which they are accepted by the centre and the provinces.

He has before the committee a proposal to transfer 35 out of 47 items in the Concurrent List following the demand of the provinces to abolish the unduly long list. But that is only a proposal, he says.

Of course, the centre will weigh very carefully any recommendation that comes from the committee which also includes opposition members, though it has been sitting tight over the 47 subjects so far, while formally sympathising with the provincial demands and some radical suggestions of the opposition in this regard.

The more militant section of the opposition has from time to time demanded the scrapping of the long Concurrent List with its feeble power-sharing so that those powers can go to the provinces. They have also been demanding that the centre restricts itself to the spheres of defence, foreign affairs and finance or currency.

In the past a third subject assigned to the centre used to be communications but now that has been given up as that will give too much authority to the centre beginning with inter-provincial roads and ending with airways, shipping telecommunications, etc.

There have been two approaches to the federal finance from the radical opposition. One, the centre should have enough money to take care of defence and foreign affairs and levy taxes to that extent. Two, the provinces should collect revenues and share a part with the centre. But that can make the centre financial captive of the provinces which it will loathe. Hence the suggestion that the provinces should levy and collect taxes has been rejected outrightly by the committee, says Wasim Sajjad. The committee is at the preliminary stage of its complex task.

When Mr Shaukat Aziz became finance minister earlier, he was struck by the number of federal, provincial, and local taxes which the people of Pakistan had to pay and yet the total revenue collection was small. In all, the country had a total of hundred federal, provincial and local taxes then, after the Nawaz Sharif government had done away with octroi. He then proposed a drastic reduction in the number of taxes with the centre retaining only income tax, customs duty and sales tax. The provinces were to have six or seven taxes and do away with the rest of the 26 or 27 taxes and that was to be done in stages subject to everyone paying his full dues.

But all he could achieve was doing away with the wealth tax following businessmen’s complaint against it for they had to pay this tax on their industries’ earnings while those who had come from abroad in large numbers did not want to pay wealth tax on their external assets that they had built abroad.

If his earlier proposals had been carried through, the central excise on the industry would have vanished and that excise tax collection would have come to the provinces. The provinces have to provide basic facilities to the industries which are costly, while the centre gets revenues from them.

His proposals did not envisage a reduction in the total revenues. Instead, he wanted an increase in the revenues in relation to the GDP but sought a reduction in the number of taxes.

Too many taxes, though netting small revenues through each one, mean a great deal of trouble for the industrialists. It also breeds endemic corruption. Yet the government has continued with the central excise duty as a federal levy as that means a revenue of Rs68.1 billion this year compared to Rs56.5 billion lat year.

Under the new formula to be devised, who will collect what taxes remains to be seen. The centre has great faith in its ability to collect taxes than it has in the provincial governments’ capacity to do so and hence it is reluctant to transfer tax collection altogether to the provinces.

The provinces on their part take tax collection rather easy in the belief that the centre will take care of their deficits. In many cases the entire annual development programmes of the provinces are financed by the centre largely as loans and partly as grants.

It is a highly unsatisfactory way of promoting the basic development of the country and funding the crucial social services beginning with education and public health.

The centre on its part has been setting up the national finance commission once in five years to divide the tax revenues between the centre and the provinces. But each NFC award has been more controversial than the earlier ones. The sixth NFC award has been the most contentious one and could not come up with a unanimous recommendation. So, President Musharraf gave his own award which has been willy-nilly accepted by the provinces pending a final agreement.

During the deliberations of the sixth NFC Mr. A.K. Lodhi, former chief secretary, Sindh who represented this province on the commission had resigned in protest against the centre’s domination in the commission. The provinces had been clamouring for a share of 50 per cent in the pool of the federally collected taxes. But the centre has been agreeable to do that inclusive of the royalty on gas and crude oil and the straight financial transfers which together this year come to Rs378 billion.

Last year it totalled Rs313 billion. That means the provinces will be getting Rs77 billion more this year, but they are not satisfied with the large increase in the face of their varied financial needs and the squeeze on their finances.

The President’s award says that the net divisible pool of the tax revenues will not be less than 45 per cent of the total collection in the first financial year and 50 per cent in the last financial year. But the provinces are not ready to wait for five years for that as their financial needs are soaring.

Once the centre agrees to part with 50 per cent of the divisible pool the provinces may begin to fall out with themselves with each one claiming a larger share than is allocated to it.

The deliberations of the Wasim Sajjad committee and the federal decisions on its recommendations will be of crucial importance. Will the division of powers take place before next year’s general elections or will it become an election issue. President Musharraf would like to settle the issue before the elections and claim another feather in his political cap.

All the key subjects for nation-building and social development like education and public health are with the provinces. So is the environmental protection or prevention of environmental degradation. But the needed funds are not with the provinces. These are in the centre, with federal officials manning the top of the key ministries.

Law and order is basically a provincial subject. But after providing enough protection to the visiting officials from Islamabad and other provinces, few cops are left to protect local people. Ironically, the increase in street crime is being treated as no crime since it does not threaten the top officials. Hence, what matters is not only the transfer of the relevant subjects to the provinces but also providing them with the necessary funds and empowering them to raise the necessary additional funds.

And the autonomy to be provided to the provinces through administrative and fiscal means should not be negated by political means by the centre by dumping its cronies as provincial chief ministers and senior ministers. There should be democracy within the political parties as well and particularly in the ruling parties. The political leaders at the centre should have due regard for their party leaders in the provinces instead of exercising central supremacy.

WHAT is it about a desert that drives men mad? On Monday morning the prime minister stood on the Afghan sand and said: “Here in this extraordinary piece of desert is where the fate of world security in the early 21st century is going to be decided.”

Tony Blair was talking to soldiers he had sent to fight the toughest guerillas on earth for control of southern Afghanistan. He told them: “Your defeat [of the Taliban] is not just on behalf of the people of Afghanistan but the people of Britain ... We have got to stay for as long as it takes.”

The prime minister’s brain has clearly lost touch with reality. Even under the Raj there was no conceivable way Britain could conquer and hold the arc of territory to which Blair was referring. It stretches from the Gulf through Iranian Balochistan and Afghanistan to Pakistan. No central government has come near to controlling this region, and its aversion to outside intervention is ageless and ruthless, currently fuelled by the world’s voracious appetite for oil and opium. But it poses no threat to world security.

The sole basis for Blair’s statement is Mullah Omar’s hospitality to the fanatic, Osama bin Laden, at the end of the 1990s. As we now know, this was never popular (an Arab among Pashtuns); after 9/11, when the Taliban had collaborated with the West over opium, either Bin Laden would eventually have had to leave or the Tajiks would have taken revenge for his killing of their leader, Ahmed Massoud. Even the Pakistanis were on his tail. Either way, Talib Afghanistan was no more a “threat” after 9/11 than were the American flying schools at which the 9/11 perpetrators trained.

So what is Blair getting at? He once confessed to his hero, Roy Jenkins, that he regretted not having studied history at Oxford. He never spoke a truer word. The concept of world security as holistic and vulnerable to incidents such as 9/11 is nonsensical. Politics is not a variant of the Gaia thesis, in which each component of an ecosystem depends on and responds to every other. There is no butterfly effect in international relations. For want of a victory in Helmand, the Middle East is not lost, nor for want of victory in the Middle East is western civilisation lost.

This is as well, since Blair’s resumed war in Afghanistan is clearly not being won. We know from the former army chief Lord Guthrie that Blair, despite promising to “give the army anything it takes”, has refused the extra troops and armour needed by the pathetically small expeditionary force of 7,000 in Helmand. He has already had to switch tactics from winning hearts and minds to American-style “search and destroy”, blowing up villages with 1,000lb bombs (as we saw on TV last week).

British commanders are describing “successes” in terms of enemy kills. They should recall that Victorian officers in the Punjab were told that such boasts would be treated as a sign of failure, not success. Such killings infuriated the population and presaged revenge attacks. Has the British army learned nothing?

Blair has not been able to persuade his Nato allies in Europe of his apocalyptic worldview. The use of the word terrorism to imply some grand military offensive against the west may sound good in White House national security documents and Downing Street speeches. But terrorism is not an enemy or an ideology, let alone a country or an army. It is a weapon, like a gun or a bomb. It is not something that can be defeated, only guarded against.

Nor can terrorism ever win. Blair’s flattering reference to it was in reality to Al Qaeda and to the Islamist jihadism whose cause he has so incessantly advertised. As the American strategist Louise Richardson points out in What Terrorists Want, Al Qaeda has not the remotest chance of defeating the West or undermining its civilisation. Only a deranged paranoid could think that. Some group or other will always look for ways to commit random killings, against which national security services need to be vigilant.

But this is not war. Richardson points out that these groups are being grotesquely overrated. They cannot plausibly deploy weapons of true mass destruction, and remain stuck with the oldest terrorist tool of all, the man with a bomb (and if we are really negligent, with a plane).

While terrorism can take on different guises, it is not new and is not a threat to human society to rank with a world war or a nuclear holocaust — as the home secretary, John Reid, has absurdly claimed. Terrorist incidents are the outcome of someone’s mental pathology and are of no political significance — unless cynical leaders in a targeted community choose otherwise.

What is sad about Blair’s statement is not its strategic naivety but the psychology behind it. Why have the leaders of Britain and America felt driven to adopt so wildly distorted a concept of menace? In an analysis of terrorism in the latest New York Review of Books, Max Rodenbeck offers plausible but depressing answers. They include the short-term popularity that war offers democratic leaders, the yearning of defence chiefs and industries to prove the worth of expensive kit and, in Iraq’s case, “the influence of neoconservatives and of the pro-Israeli lobby, seeing a chance to set a superpower on Israel’s enemies”.

All this is true, but I sense a deeper disconnect. The West is ruled by a generation of leaders with no experience of war or its threat. Blair and his team cannot recall the aftermath of the second world war, and in the cold war they rushed to join CND. They were distant from those real global horrors. Yet now in power they seem to crave an enemy of equivalent monstrosity. Modern government has a big hole in its ego, yearning to be filled by something called a “threat to security”.

After 1990 many hoped that an age of stable peace might dawn. Rich nations might disarm and combine to help the poor, advancing the cause of global responsibility. Instead two of history’s most internationalist states, America and Britain, have returned to the trough of conflict, chasing a chimera of “world terrorism”, and at ludicrous expense. They have brought death and destruction to a part of the globe that posed no strategic threat. Now one of them, Tony Blair, stands in a patch of desert to claim that “world security in the 21st century” depends on which warlord controls it. Was anything so demented? —Dawn/Guardian Service

“Ortega is a tiger who has not changed his stripes,” warned US ambassador Paul Trivelli before the former revolutionary leader won back the presidency of Nicaragua in the election on November 6.

Retired US Marine colonel Oliver North, who took the fall for president Ronald Reagan’s administration in the Iran/ Contra scandal of the 1980s, showed up to warn that Ortega was as bad as Adolf Hitler. And Daniel Ortega just smiled and said: “Jesus Christ is my hero now.”

It’s deja vu all over again as American leaders denounce the Communist threat in Nicaragua and leftist Latin American leaders like Cuba’s Fidel Castro and Venezuela’s Hugo Chavez celebrate the rise of the “pink tide” in their region. Old images of the Sandinista revolutionaries and their “sandalista” foreign admirers (left-wing youths who came to help the revolution by picking coffee beans and drinking lots of cheap rum) fill the media. Seventeen thousand foreign observers and a thousand journalists came to Nicaragua for the elections. But the whole drama is Hamlet without the Prince.

Daniel Ortega was once a revolutionary leader, but that was a quarter-century ago. Now he is a populist politician as cynical as any of his opponents, and the likelihood that his election will make any difference to Nicaragua’s poor is slim.

The Sandinista revolution that overthrew the Somoza family dictatorship in 1979 might possibly have made some difference to the people at the bottom of society — and the bottom is a long way down in Nicaragua — if it had been left alone to get on with the task. But it was the height of the Cold War and the US didn’t want “another Cuba,” so the Reagan administration armed and financed an army of right-wing exiles, the “contras”, to wage a guerilla war against the Sandinistas.

President John F. Kennedy’s similar attempt to strangle the Cuban revolution in its cradle ended in defeat and ignominy at the Bay of Pigs in 1961, but Ronald Reagan had more luck. He got around a Congressional ban on US government aid to the contras by turning a blind eye to White House aide Oliver North’s fund-raising efforts, which involved selling US arms to Iran with a secret mark-up that was then passed on to the contras. (When North got caught, Reagan escaped impeachment by claiming that he could not remember having been told about it.)

Ortega was elected president in 1984, but the constant attacks of the contras (between 30,000 and 60,000 Nicaraguans were killed in Reagan’s war) ensured that the Sandinistas never achieved any real transformation in Nicaragua. It’s questionable whether they would have done so even without that distraction, for the leading Sandinista leaders were mostly well-intentioned middle-class boys radicalised by the brutality of the Somozas, but with little self-discipline and even less by way of a plan.

There were kibbutz-style communal farms for peasants on land confiscated from the rich, and literacy classes for all, but the confiscations were almost random, and too often ended up in the pockets of Sandinista leaders. When Ortega left the presidency in 1990, he bought the confiscated million-dollar mansion of a contra supporter, Jaime Morales, for $2,000 — and he still lives there.

Ortega never suspected that he would lose the presidency in 1990, so he invited the whole world to come and observe the election in which he and the Sandinistas were booted out by the disillusioned Nicaraguan voters. In three subsequent runs for the presidency he never got more than 40 per cent of the vote, although Sandinistas continued to control many courts, municipalities and unions. His road back to power, however, was paved by “the pact” of 1999, a flagrantly corrupt deal with then-president Arnoldo Aleman.

At the time Ortega was facing charges of rape by his step-daughter, while Aleman was embezzling huge amounts of money from the government. So the two men agreed to give themselves lifetime membership of the National Assembly, which gave them both permanent immunity from prosecution. Ortega also got the threshold for a first-round victory in presidential elections lowered from 50 per cent to 40 per cent — or even 35 per cent, if the front-runner was five percentage points ahead of the next candidate.

“El pacto” didn’t save Arnaldo Aleman in the end. An outraged Congress stripped him of his legal immunity and he was given a 20-year sentence in 2003 for stealing about $100 million from the Nicaraguan people. But a Sandinista-run court allowed him to serve his sentence at home on his ranch due to “health problems” — and the pact has now given Ortega the presidency with less than 40 percent of the vote. (Under the old rules, there would have been a second round in which the 60 percent of Nicaraguans who don’t want Ortega back would unite behind a single candidate, as they did the last three times.)

Ortega is back, but socialism isn’t. He now presents himself as a devout Catholic, and recently voted for an absolute ban on abortion. His vice-president is Jaime Morales, the former contra supporter whose confiscated mansion he still lives in.

—Copyright

THE president of the People’s Republic of China, Hu Jintao, is visiting at the invitation of President Pervez Musharraf. The year 2006 marks the 55th anniversary of the establishment of diplomatic relations between Pakistan and China.

A number of activities that have been arranged throughout the year in Pakistan and China are likely to culminate with the Chinese president’s visit to Pakistan.

The relationship between Pakistan and China is underpinned by mutual trust and confidence. The vast spectrum of bilateral cooperation between them covers many vital fields, including political, economic, defence and cultural ties. China has been extending generous economic assistance to Pakistan since early 1960 and is playing an important role in the development of its infrastructure. In November 2003, Pakistan and China signed a preferential trade agreement to promote economic and trade relations between the two countries. This was followed by the signing of the Treaty of Friendship, Cooperation and Good- Neighbourly Relations.

This is the first treaty that China has ever signed with a country in South Asia. It would contribute to a comprehensive partnership in all domains of life and also ensure the passing down of benefits of their cooperation from generation to generation. It is believed that during President Hu Jintao’s forthcoming visit to Pakistan the two countries will also sign a free trade agreement that would enable them to move towards a more vibrant economic relationship.

China has also provided assistance for a number of other vital and strategic projects in Pakistan. The Karakoram highway and the Gwadar deep sea port, undertaken jointly by Pakistan and China, have been the most outstanding achievements in the history of their relations. Pakistan attaches great importance to the Karakoram highway upgradation project for the benefit of the two countries. Pakistan is also keen to develop Gwadar not only as a transport port but also as an “energy port”.

The framework agreement on energy cooperation signed in February this year will provide an opportunity to Pakistan and China to promote cooperation in the field of energy. Pakistan is also looking at the prospects of oil and gas exploration in the country in the near future. Pakistan has huge coal reserves which can be utilised, with the help of the Chinese experts, for power generation and producing fertilisers and other products. Pakistan also has an ambitious programme to promote wind and solar power. These projects could also provide huge opportunities for the Chinese corporations to invest in Pakistan.

There has been a discernible shift in China’s foreign policy after the Cold War. After the end of the Cold War, its foreign policy has been a textbook example of bilateralism. Driven by its desire to transform its national economy as a means to preserve its sovereignty and territorial integrity, China improved its relations with the United States and other advanced countries.

It also stepped up its contacts with the developing countries laying special emphasis on the development of friendly and cooperative ties with its neighbours regardless of the quality of its relations with them during the Cold War era and despite any unresolved territorial and border disputes.

The Chinese leadership, however, made it clear that notwithstanding the end of the Cold War necessitating the search for new friends by it, the status of its relationship with Pakistan would not only remain unaffected but also gain momentum. Policymakers in Islamabad should value the Chinese gesture and reciprocate it by imparting greater content to Pakistans China policy with a view to reinforcing and sustaining the existing relationship between the two countries that was an exemplary model of peaceful coexistence for countries with different social systems.

Apparently, there is a definite perception among the policymakers in Beijing that a stable, powerful and economically viable Pakistan will be an important foreign policy asset to China. No other major power has a similar interest in the viability of Pakistan. Regrettably, however, the warming up of India’s relations with the United States and, in particular, the Indo-US nuclear deal, portends serious security problems for all the countries in the region. Although the Chinese seem to have taken a cautiously optimistic view of this development it would be desirable if President Pervez Musharraf conveys Pakistan’s serious concern to President Hu Jintao on this issue.

Given China’s concern for Pakistan’s security and territorial integrity there is a clear need for evolving a coherent and credible policy to safeguard its geo-political interests. It may also be pertinent to mention that a latest statement by an Indian army spokesperson, made a few days ahead of President Hu Jintao’s visit to India, has claimed Tawang and its monastery in Arunchal Pradesh, regarded by China as disputed territory, to be an integral part of India.

This ill-advised statement by the Indian army spokesperson was a deliberate misrepresentation of the facts that evoked a strong and firm rebuttal by the Chinese ambassador in India. This, however, indicates the direction in which the wind is blowing in the corridors of power in New Delhi in the wake of the Indo-US strategic alliance.

The history of Pakistan-China relations spanning over half a century shows that they have withstood the test of internal and international changes. Credit for this goes to the successive leaders of both Pakistan and China who nurtured the relationship between the two countries with care and devotion that led to its transformation into a mutually beneficial comprehensive partnership.

In the foreseeable future, Pakistan and China will continue to need each other as important partners in the political, economic, technology defence and other vital fields and to also counter the emerging global and regional challenges. The leaders of both the countries must, therefore, ensure that their future ties remain promising. Mere rhetoric of goodwill and high level exchanges will not be sufficient to sustain it at the desired level.

The writer is a former ambassador.