Real and present danger

THIS is not the time for half measures. The ill wind of religious extremism, confined no longer to some forgotten nook, is threatening to rend the very fabric of society as we know it. In a massive show of strength in Tank in the NWFP, the Pakistani Taliban are pushing for control of the district headquarters, firing mortars, claiming lives, taking on the military and burning down a number of banks after looting them. The outgunned police are now conspicuous by their absence, choosing flight over fight in that most primal of human responses to situations of extreme peril. The militants had been making their presence felt in Tank for several days and on Monday tried to forcibly recruit students at a private school. This led to clashes with the police, resulting in the death of a jihadi leader, and on Tuesday the principal of the school was kidnapped along with his brother. Now all hell has broken loose and there is a very real fear that if Tank falls to the Taliban, the domino effect could take in its sweep other ‘settled’ areas in southern NWFP. Meanwhile in the capital of the country, a madressah administrator is threatening jihad because his students were checked in their efforts to police morality in the city. For this we can thank the authorities that bowed to the demands of armed female fanatics from the seminary who had earlier seized control of a children’s library in Islamabad.

In Bajaur Agency in Fata, saboteurs tried to derail peace efforts on Tuesday by targeting army intelligence officers shortly after the government reached an understanding with local tribesmen. Unlike the capitulation that was the hallmark of the failed agreements with militants in South and North Waziristan, the ‘undertaking’ given on Monday by tribal elders in Bajaur involves no concessions from the government. Struck not from a position of strength but weakness, the earlier deals were perhaps scripted for failure. The initial impulse then was to fight rather than negotiate, and a different course of action was chosen only after the army suffered heavy losses. And as is the norm in any conflict, the vanquished did not dictate the terms of the peace deal. The Bajaur ‘undertaking’, on the other hand, came in the wake of what is being described as a tribal uprising against foreign militants, particularly the Uzbeks. The lead in this connection was taken by the Ahmedzai Wazirs in South Waziristan and a similar sentiment is now being echoed in other agencies. The tribes of Bajaur have pledged to be “accountable before the Government of Pakistan and the political administration”, promising not to shelter anyone engaged in anti-state activities, be it local militants or foreign fighters. The five-point undertaking was signed by some 800 tribal elders and is said to have the support of wanted militant commander Maulana Faqir Mohammad.

This is a significant step and bodes well for a region that is in desperate need of socio-economic uplift, which the government has promised to deliver in exchange for peace. The onus in Bajaur now is on the tribesmen who must bring to book the elements involved in Tuesday’s attack on army personnel and their local escorts. In Tank, while standing steadfast from a military point of view, it is crucial that innocent residents are not victimised for the sins of the Taliban. To crush the militants, supportive local tribesmen must be befriended, not alienated.

Forced disappearances

PRESIDENT Musharraf may have a point when he says that people often go “missing” when, without the knowledge of their families, they join the ranks of extremist organisations so that they can be trained for suicide missions and other “anti-state activities”. This may be true of some disappearances but not all. Surely the country’s all-powerful intelligence agencies too cannot be absolved of all blame for a situation where involuntary disappearances have been growing by the day. The number, according to some sources, could be far higher than the 400 or so cases documented by human rights groups since many families, worried for the safety of their missing ones, choose not to report their cases. Moreover, their numbers include not only those picked up on suspicion of having links with religious groups, but many others thought to be inciting anti-state feelings in Sindh and restive Balochistan. Indeed, as pointed out by Asma Jahangir, chairperson of the Human Rights Commission of Pakistan, the majority of the 141 missing persons on a list submitted by the HRCP to the Supreme Court are secular Baloch and Sindhi nationalists including poets and writers. With his sole focus on the dangers of Talibanisation and the war on terror, President Musharraf has chosen not to dilate on this aspect. He has also failed to provide an answer to critics who ask how the intelligence agencies have previously released individuals who had been held incommunicado for long by them.

Whatever the affiliation of those unaccounted for and believed to be in the custody of the intelligence agencies, the government must bear ultimate responsibility for flouting all constitutional tenets and international conventions pertaining to civil liberties. Every individual has the right to a fair trial, and one hopes that the Supreme Court will take up the question of the missing people as forcefully as it did before Chief Justice Iftikhar Chaudhry was made “non-functional”. Besides causing deep anguish to the affected families, this rising trend of forced disappearances has also been noted by the international press and human rights groups. Pakistan’s image, already tarnished, will risk further damage if steps are not taken to prevent the country’s slide towards authoritarianism. For his part, the president needs to address the issue in its totality rather than selectively.

Spraying alone will not help

THE city nazim has directed the health department to spray insecticide in all towns and union councils of Karachi and the work is in full swing. It is encouraging that the administration has come to recognise the importance of public hygiene and its own responsibility in ensuring it. So seriously has this work been undertaken that, we are told, abundant of fumigation material and insecticide have been procured for this purpose. Will this really help the city get rid of diseases that can be traced directly to mosquitoes and unsanitary conditions? The health officials of the city government would be better aware of how little such measures have helped in the past. A few months ago, when the city was struck by a serious attack of dengue fever, the nazim had reacted by getting the city fumigated. But the incidence of the disease did not subside until the weather changed and winter came to the citizens’ rescue.

It is time our health department understood that diseases can be prevented not so much by fumigation as by draining out stagnant water, preventing water from accumulating in pits and ditches, clearing up garbage by efficient solid waste management strategies and improving the drainage of sewer water. Unfortunately this is not happening. Karachi continues to be a garbage dump and even posh areas have garbage heaps lying around. Although the city government has arrangements for garbage collection and the staff to attend to it, the work is not done because there are vested interests who prefer that the garbage is left lying around for scavengers to collect and sell cheap to the recycling industry. The sewerage system has been the victim of corruption and inept planning. The mess the rains created in Karachi last summer testified to this. All this needs a radical approach and spraying insecticide alone will not help.

A merry leap into the future

DR Salman Shah, advisor to the prime minister on finance, has taken another merry leap into the future. He predicts Pakistan’s economy will be the seventh biggest in the world and he is quite confident about that if it sustains its current high rate of growth.

In an interview to Islamabad daily, he goes beyond the predictions of the Planning Commission’s Vision 2030 which says that Pakistan’s economy which now occupies the 39th place in the world will move to 23rd position in the world. Even on the basis of the higher purchasing power parity the Vision 2030 says it will only be the 12th strongest economy in the world by 2030.

The Vision is the handy work of a great many experts in the Planning Commission and outside and has hence greater credibility than Dr Shah’s exuberant crystal gazing. But that does not deter the advisor to the PM from his merry projection for the future. But on his part he does not say clearly when we will be the 7th biggest economy in the world.

He simply says that this will be achieved through public-private partnership which is gradually becoming popular in Pakistan and showing good results. He admits the private sector in Pakistan is not as robust and resourceful as it is in India but the government is doing everything possible for strengthening its capacity and making it capable of facing the challenge of the future.

In India, the old industrial groups like Tata and Reliance of the Ambanis are very resourceful and enterprising and enjoy vast public backing when it comes to buying the shares of their companies.

But in Pakistan many of the 22 families which became prominent in the 1950s and 1960s by setting up a large number of textile mills, sugar mills, and jute and woollen mills have split and have become less effective and much less resourceful. Many of the children of the founders of these industrial empires don’t think the same way their elders did. The Adamjees, a prominent family, have shed their major units like Adamjee industries, Muslim Commercial Bank and finally the controlling interest in Adamjee insurance, after they lost Adamjee jute mills in East Pakistan after the separation of the eastern wing in 1971.

The Dawoods have also split and so has the Crescent family whose crescent standard investment bank has been making adverse headlines and is to be sold off.

Much of the same has happened to other families which became prominent after the 1970s and some of them have made their investment abroad such as Dubai and Britain and because of the loan default running up to Rs250 billion, the investors could not for some years earlier raise large investment loans and that slowed down the industrial growth in the 1990s. Those who invested in companies through stock exchanges also came to grief.

A number of banks, set up by the new rich or fortune hunters, like Mehran Bank, Indus Bank, and Bankers Equity also came to grief. The state-sponsored National Development Finance Corporation was merged into the National Bank as it became bankrupt and the Industrial Development Bank, denuded of its resources, is tottering.

But now the stock exchange is flourishing and the Karachi Stock Exchange 100-index is soaring to about 12000. A few top brokers on the exchange can call the tune at any time and manipulate the index as it suits them. Now there is no dearth of capital for investment for those with a fair track record and the Securities and Exchange Commission are rather vigilant.

The interest rates which had shot up to 25-28 per cent at their peak, which was one of the causes of the loan default, have come down. The big borrowers had then presumed that they need not repay the loans and many of them got away with it leaving the Industrial Development Bank and the NDFC in the lurch.

But now the world monopoly commission which had indulged in some shadow play with the monopolists, has been turned into A Competitive Support Fund with the US Agency for International Development “to upgrade the competitiveness of Pakistan’s economy to respond to new challenges and opportunities in the knowledge based economy.”

Of course we cannot have free enterprise without competition and real competition and not shadow play. Instead of competition we have cartels, cornering of the market and creation of artificial shortages which pushed up the prices and lowering of the quality of the products. Hence, the consumer always suffered while the government got its share of the taxes.

We have now to see how the Competition Support Fund is really successful in promoting competition and stifling the cartels and giving a fair deal to the consumers. Such improvements should raise the rank of Pakistan in the Doing Business in South Asia Index which is now the 74th among 175 countries. Maldives in South Asia ranks higher in the index at 53. We have to go a lot higher in the index and sustain that if we want to be the seventh biggest economy in the world, as Dr Salman Shah projects.

As countries achieve a high rate of economic growth, one thing that has become obvious is that high economic growth, though very essential, will not eliminate poverty and shift part of the new wealth to the poor who are large in number.

China has come to realize that after achieving 10 per cent growth for nearly 20 years and recording an 11.4 per cent growth last year. It has in the last few years been trying to lower the rate of growth to prevent overheating of the economy and finding the task very tough to arrest the high growth momentum.

China has also come to realize that rural poverty cannot be eliminated through high urban growth. The rural populace in China is about 800 million. Beijing is aware that unless it does enough to help the rural masses with their low incomes, they will migrate to the cities and create serious problems. So the Chinese government has reduced tax on farms which has been a heavy burden on the farmers and recognized private property but without the right to the owners to transfer or sell it. It has also made extended arrangements to provide macro finance to the poor with only one guarantor.

China recently increased the interest rates for Yuan loans for both advances and deposits by 0.27 per cent. Today the savings rate in China is 2.79 per cent and the lending rate is 6.39 per cent. The banking spread in China is 1 to 2.6 for deposits and borrowings, while that is 1 to 4 or 5 in Pakistan except in cases of long term fixed deposits.

India has also come to realize that high growth rate -- 9.4 per cent this year -– does not reduce poverty automatically and certainly not rural poverty which produces many suicides. The rural areas have got too many exploiters who drive the borrowers crazy.

There is great political pressure in India to lower the inflation of 6.5 per cent which hurts the poor too badly and the political partners of the Congress want real relief before the elections, possibly next year.

If the high 11.4 per cent economic growth rate of China or the 9.4 per cent growth of India could not automatically reduce poverty, how can Pakistan’s seven per cent growth rate for the current year ( after last year’s 8.5 per cent) do so automatically. It is frustrating for the poor to wait for the trickle-down effect of the new wealth to reach them which, in fact, it may seldom happen.

Dr. Salman Shah says that the per capita income of Pakistan has risen from 424 dollars per year to 850 dollars within six years. It cannot be said that the average wage of the unprotected workers has doubled within the same period. Even if it has doubled, the base figure is very low. And where it has doubled it has been wiped out by inflation of 8.5 per cent with food inflation exceeding 10 per cent.

A recent meeting of the Economic Committee of the Cabinet is reported to have scrutinized a report of inflation in eight countries relevant to Pakistan and found that prices in Pakistan had risen higher than in India or Bangladesh.

Dr Salman Shah talks of providing employment to 100 million workers, while the workforce is not more than 45 million with a small percentage of women. If, as he says, Pakistan becomes the industrial hub of the region and an energy corridor for Central Asia, more employment can become available.

If poverty is to be earnestly and effectively eradicated, employment opportunities should be increased manifold and inflation combated resolutely and progress in both the areas should be monitored diligently and stepped up constantly. Micro credit facilities should be extensively provided and the micro credit culture should become widespread and deep.

Small and medium enterprises should be more assiduously promoted and enabled to become more enterprising in the export area. One would suggest that industrial and commercial cooperatives should be promoted within the farm belt and agro-based industries developed more assiduously. But cooperatives have a tragic history in Pakistan and that is because of the dominance of the feudal lords in the rural areas.

A report says that two per cent of the farm lords control 45 per cent of the rural lands. Such men will not allow the cooperatives to remain out of their clutches. Hence no suggestion is being made to promote cooperatives to reduce poverty instead the emphasis is on providing micro finance.

Feudalism is a roadblock to political reforms, to economic reforms and agricultural progress. But joining hands with the traditional feudal lords now or senior bureaucrats and serving and retired generals is a mighty combination almost impossible to resist.