IN the first article of what I would like to call “the provincial series”, I suggested that the next big move in the development of the Pakistani economy must come from the provinces. For this to happen, Islamabad must grant greater autonomy in economic decision making to the provincial capitals, and the provinces, in turn, must permit greater space to the newly created local administrations.

These moves are needed to bring the government closer to the people and make it more accountable to the citizenry. No new laws and rules are required. The Constitution has provided for a reasonable amount of provincial autonomy and the Local Government Act of 2001 has provisions for transferring authority to local bodies to raise resources for economic development. What is missing is the political will to carry out the intent behind these constitutional and legal provisions.

Change is always difficult, especially in societies that have weak institutional foundations. It is resisted by those who see advantages for themselves in the maintenance of the status quo. Why these changes are necessary and way it is essential to bring the government closer to the people will become apparent when I fully develop what I think should be the content of the next series of reforms.I will suggest that for the first time in a long time Punjab has an administration in place that is not only committed to the rapid development of the province but has implemented a number of reforms that would help to move the province on to a higher trajectory of growth.

In preparing to deliver a public lecture in Lahore on April 12, 2007 at the invitation of the government of Punjab and in chairing one of the sessions of the Punjab Development Forum held in Lahore last week, I read a great deal that has been written and published by the provincial administration on economic and financial matters.

What I found particularly impressive was the move the administration has made from managing finance and development in a passive way to defining medium-term frameworks for development and fitting finance into it. This allows the provincial government to look at some of its financial liabilities in the context of development needs and plan for dealing with them.

Among those the administration is actively dealing with are pension and GP fund liabilities. The approach it is adopting will not only reduce the burden the government currently carries but it will also deepen the financial markets by creating new instruments of finance.

The session I chaired at the forum also included presentations by the administration of Faisalabad district. The district government is using the funds provided by the UK’s Department for International Development, DFID, to improve the provision of public services in this important industrial hub of the province and also to contemplate how resources will be garnered for keeping development on track in the area over the medium term. It was an impressive presentation.It showed how the latest developments in information and communication technology were being used to make people aware of what the government could do for them by way of delivery of basic services, how the people could influence the decisions related to this kind of work by the government, and how the citizenry could keep track of what the government agencies were doing in their areas.

It was also interesting for me to note that Punjab has its own financial award focused on providing governments at the sub-provincial level a sense of the quantum of resources they can expect to receive from Lahore over time. While the federal government has not succeeded in issuing its own award for the resources to be shared with the administrations at the sub-national level, it is interesting that one of the provinces has been able to achieve this for its area.

For the reasons that will become clear as I continue with this series of articles, my ideas for the province’s future are a bit different from the government’s vision. They also have somewhat different public policy implications than the strategy already being pursued by the provincial government at this time.

I have ideas for the 13-year period between now and 2020 which is the end point for the government’s programme. My vision factors in the province’s inheritance, its history since the partition of the province in 1947, and its endowments to a greater extent than the official approach. I will begin by discussing the province’s rich inheritance.

History is important not only to understand the past but also to prepare for the future. In focusing on some aspects of Punjab’s history — recent history, not history of the distant past — I will highlight only those aspects that have relevance for the present and are pertinent for discussing the future.

Several of these are important. They include the province’s demographic inheritance, skill endowments of some of its people, its irrigation system and the agriculture it supports, its system of governance, and the trading ties it once had with areas that are now part of India. Since these legacies will have a significant impact on the future development of the province, it is my suggestion that in designing public policy those responsible for taking decisions should remain fully cognisant of them.

The first of these legacies is concerned with demography — the movement of people into the province and from the province into many parts of the world. Punjab was formed by many waves of migration. These movements of people have a great deal to do with the character of the people who are now the citizens of the province; in particular with the way they view economic and social opportunities.

The two migrations that matter the most for today’s Punjab occurred at the mid-point of the British rule of the province and at the very end of the century-long colonial domination of the province. The first brought tens of thousands of small farmers from the eastern part of the provinces — the parts that are now the Indian states of Punjab and Haryana — to “colonise” the land the British had prepared for cultivation by bringing water for irrigation from the Indus River system.

One consequence of this wave of migration was to juxtapose small and medium scale farming with the large farms that were then common in the province. This positioning of small and medium farms alongside large farms is both a reason for the underdevelopment of the important sector of agriculture as well as the reason for hope for the future. I will return to this point later in this series of articles.

The second wave of migration was much larger and much more significant than the one before. It brought, by my estimate, millions of refugees from east Punjab to west Punjab after the British decided to leave their Indian empire in the hands of the successor states of India and Pakistan. It is possible to estimate the number of people involved in this wave of migration by using censuses for 1941 and 1951 for the various provinces of India and Pakistan.

I estimate that while five million people left Pakistan for India, about the same number of people came to Pakistan’s Punjab from India. In the late 1940s, more than one-quarter of Punjab’s population of about 19 million was made up of refugees. These refugees were settled in both the urban areas and the countryside. They brought with them skill sets and social and cultural outlook that were different from those that were prevalent in the province before it became a part of Pakistan.

While the question of the influence this migration had on Punjab’s social and cultural development is a subject for sociologists and anthropologists, it has also relevance for economists and for the economy. Much of the economic dynamism that has become the defining part of Punjab’s urban landscape — in particular of the dozens of small towns that straddle the roads connecting Lahore with Gujarat in one direction and Lahore with Faisalabad and Sahiwal in the other — is largely the consequence of the enterprise of the people who came from the eastern parts of the province and settled in these towns.

They were given the businesses, lands and houses the Hindus and Sikhs had left behind. They could have made greater contribution to the economy’s growth and to the direction of social change had the policymakers better understood their potential. The province’s second legacy, therefore, is the direct outcome of the wave of migration that accompanied the partition of Punjab in 1947.

In an article published several years ago in “Asian Survey”, a journal of the University of California, I suggested that the green revolution that brought considerable prosperity to some parts of the Punjab would not have been possible had it not been supported by the remarkable engineering skills on display in the province’s many small towns.

These towns supported the development of the tubewell technology and the mechanisation of agriculture, two of the many developments associated with the green revolution that brought profound economic and social change to Punjab’s countryside. It was these skills that were behind the remarkable development of the electric fan industry in the towns of Gujranwala and Gujarat. This industry later became the foundation of the electric appliances industry in the area which flourished before it was hit by competition from China.

A senior official from Islamabad, while speaking at the Punjab Development Forum the other day, told his audience that the Chinese had agreed to set up an industrial zone near Lahore of the type that energised China’s east coast and made it the work horse of the world’s industrial production system. Much of the consumer electronic goods sold in the West these days are made in the industrial zones strung along the eastern coast of China from the city of Dalian in the north to Shenzen in the south.

He said that that was the first time the Chinese were setting up such a zone outside their country and if the one in the vicinity of Lahore succeeds, they may repeat the experiment in other parts of the world, possibly also in Pakistan. He did not reveal what kind of industries will be established in this estate.

If the agreement with China allows Pakistan and the province of Punjab to influence what kind of enterprises get located in this zone, then it would be useful to build on the skills already available and the experience gained by the industries that are already operating in the area. The engineering skills that are available to the province need to be more fully exploited as a resource.

By focusing on two of Punjab’s legacies — the fact that this province was formed by people constantly on the move and that one set of the citizenry when it came to this province brought extraordinary engineering skills with it — the provincial government could accelerate the rate of economic growth and social change.

I have tried to illustrate how good knowledge of inheritance can make a difference to the content of public policy by suggesting that the engineering skills possessed by a segment of the population could underpin the development of a vibrant manufacturing sector. I will continue with this story next week, focusing on the province’s quite remarkable agricultural heritage.

IT’S a theme of nearly all the great post-Vietnam movies. In “Taxi Driver” and “The Deer Hunter,” Robert De Niro plays a veteran who is dismayed, if not unhinged, by homecoming. From the mean streets of New York in the former to the Pennsylvania mining town in the latter, the folks back home just don’t get it about the war.

I imagine that some American soldiers returning from tours of duty in Iraq might get an even stronger feeling of alienation if they were to visit, as I have in the last seven days, those quintessential American playgrounds, Las Vegas and Palm Beach. From the casinos of Nevada to the condos of Florida, the good times are rolling, regardless of events in the Middle East.

It’s hard to believe, as you walk past the thronged roulette tables and inanely burbling slot machines of Vegas, that this is a country at war. As for that eye-catching billboard “For the Injured” on Interstate 95, I’m afraid it has nothing to do with the war wounded of Operation Iraqi Freedom. It’s just another ambulance-chasing lawyer, brazenly advertising his readiness to sue someone if you trip on the sidewalk.

At least vets who came back in the 1970s found that home was pretty messed up too. By contrast, those returning home today must feel like latecomers to a gold rush.

On Wednesday, fuelled by seemingly limitless liquidity and reports of strong corporate earnings, the Dow Jones industrial average hit a record 13,000. The financial markets seem to have shrugged off their recent anxieties about so-called sub-prime mortgages, focusing instead on the megabucks being made at the other end of the income distribution scale. A survey by Alpha magazine revealed that three American hedge-fund managers earned more than $1 billion last year.

Meanwhile, on the other side of the world, Iraq burns. More than 3,100 Americans have died there, the equivalent of 100 Virginia Techs. Nearly 25,000 have been wounded in action, many of them gravely. And that’s nothing compared to the number of Iraqis who have been killed as the country has slid into civil war. Fatalities among the civilian population are running about 3,000 a month. The Brookings Institution’s latest Iraq survey carried one statistic that froze my blood: According to a recent poll, one in four Iraqis has personally experienced or witnessed the murder of a family member as a result of violence since the US-led invasion. Dow 13,000, meet Iraq 13,000. That’s approximately the number of Iraqis killed so far this year.

Last week, Army Gen. David Petraeus, the US commander in Iraq, tried to explain to his fellow Americans that stabilising Iraq would require “an enormous commitment.”

“This effort may get harder before it gets easier,” he told reporters at a Pentagon briefing. Real stability might be “years down the road.”

Unfortunately, this is not what anyone wants to hear these days, least of all Democratic lawmakers. Even before Petraeus returned to his unenviable post in Baghdad, the House narrowly passed a bill that would require the administration to start withdrawing troops Oct. 1 and to end all combat operations by late March of next year. The Senate passed its version the following day.

President Bush has promised to veto the bill. But it is significant that only one presidential candidate — Republican John McCain — is sticking by the president’s policy of a surge to bring Baghdad under control as a first step toward stabilisation. Yet according to opinion polls, his “Straight Talk Express” is lagging behind his “Hot Air Balloon” rivals. That strikes me as another sign that Americans don’t want to face the reality that they are at war — and about to admit defeat.

Let’s just remind ourselves that there is a precedent for this myopia. It took a long time for American investors to acknowledge that there might be an economic as well as a strategic downside to failure in Vietnam. The Dow hit 1051.70 on Jan. 11, 1973. By Dec. 6, 1974, it had fallen by nearly half. It did not regain the heights of January 1973 until November 1982.

What went wrong in the 1970s? Clearly, it was more than just the loss of South Vietnam, which turned out not to matter much (to the United States, that is). More significant were the economic consequences of President Lyndon Johnson’s attempt to have both guns and butter: war in Vietnam plus the Great Society welfare program. What were, by today’s standards, quite modest deficits and quite minor balance-of-payments problems translated into a creeping inflationary pressure, not least because of the strength of organised labor and the weakness of the Federal Reserve. When the Middle East blew up in 1973, sending oil prices skyrocketing, the United States was swept into an inflationary spiral that none of Johnson’s successors — Richard Nixon, Gerald Ford or Jimmy Carter — was able to halt.

Sometimes I wonder if the ‘70s might be making a surreptitious comeback. At the hedge-fund conference that took me to Las Vegas, a clear majority of managers said they anticipated higher inflation in the year ahead. But a majority also didn’t expect the Fed to tighten monetary policy further. That makes me nervous. If McCain is right and the Middle East does blow up some time after an American exit from Iraq, oil could end up at $100 a barrel. Then what?

Well, how about higher inflation, a dollar slide and a stock market sell-off? Pretty soon we could all find ourselves wearing bell-bottoms, consuming three-martini lunches and disco dancing to K.C. and the Sunshine Band.

Let’s just hope that — as in the ’70s — there will at least be some good movies to watch.—Dawn/Los Angeles Times Service

THE fallout of the suspension of the Chief Justice by the president last month has, by all means, had a watershed effect that has at least four positive aspects and as many negative prospects.

A major development, in positive terms, is the rejection by the members of the Pakistan bar of the clumsy attempt by the executive to dislodge the Chief Justice, which, with the passage of time, is being perceived by them, as also by several members of the public, as an assault on the independence of the judiciary.

However, it should be kept in mind that such a resounding reaction from the members of the bar has come rather late in the day, especially when one takes into account their somewhat tepid responses to earlier assaults by the executive on the judiciary, culminating in the infamous invasion of the precincts of the Supreme Court by Nawaz Sharif’s henchmen against which the bar did not register a protest of any significance.

Nevertheless, the reaction this time has been spontaneous, swift and effective inasmuch as it has forced the government, for the first time in the context of executive/judiciary relations in Pakistan, to take a step back, apologise for its hamfistedness and reconsider its handling of the matter. This is the second positive outcome.

Thirdly, the reaction registered by the members of the bar exemplifies democracy in action, not so much in the context of a politically premised situation inasmuch as it focuses on preserving the sanctity of an institution such as an independent judiciary which is a fundamental prop of a democratic form of governance. Fourthly, the support for this cause displayed by civil society, including people at the lowest level of the economic scale, is very significant. It shows that the people will rise in support of a bona fide democratic cause without first having been propagandised by the given agenda of diverse political or religious groups.

Whilst these positive developments may well coalesce into a turning point in the affairs of the state, there are also certain negative possibilities that may have a corresponding deleterious effect. For centuries, for instance, the judiciary, especially in the common law tradition, has followed a practice which requires judges to speak only through the judgments given by them in courtroom proceedings. They are not expected to expound or publish views on any matter other than the issues which arise in the cases they are dealing with in the course of adjudication. What is more, they may speak on such issues only in court while a case is in progress, or not at all.

Now our Chief Justice is being carted cross-country, by enthusiastic lawyers addressing the bar councils. One wonders whether he is a willing participant in the public rallies or is otherwise constrained to live up to the role of a cause celebre in deference to the expectations of his irrepressible fans. So far he has displayed good sense in confining the subject matter of his speeches to the primacy of the Constitution, and in not being drawn into commenting on matters that are sub judice.

Despite this restraint however, there is an inherent danger of the line between correct judicial conduct and politically expedient behaviour being crossed by letting the protest on the questionable suspension of the Chief Justice develop into something that smacks of a pre-election campaign for a prospective candidate for political office.

Secondly, while it is a good thing that this movement has been spearheaded and sustained by lawyers and not by political party cadres, and it is also creditable that they have succeeded in compelling the government to adopt correct procedural steps for its future dealings with the Chief Justice. There is another side to the picture.

Having achieved this much, the lawyers should now drop their confrontational approach for a dignified one, more befitting their professional status, and adopt commensurate measures such as peaceful picketing and orderly rallies instead of the disorderliness as seen in television coverage, or the sloganeering resorted to with growing frequency on unconnected issues such as free elections, the removal of President Musharraf, the recovery of missing persons etc.

The issuing of public statements exhorting the Supreme Judicial Council to resolve the matter according to the lawyers’ demands, or threatening to disregard any Supreme Judicial Council decision contrary to their expectations is equally disconcerting. Such tactics not only politicise the situation and defuse the focus on the core issue, but are also intimidatory to the Supreme Judicial Council and the Supreme Court.

Everyone concerned with the problem has expressly or implicitly acknowledged that a matter of such significance cannot be properly resolved except by recourse to adjudication conducted in a judicial tribunal sufficiently empowered within the hierarchy of the court system to deal with the matter. This is the final form of dispute resolution mechanism acceptable everywhere. Hence, for resolving the Chief Justice imbroglio, any other step — short of a face-saving compromise — may result in an impasse or yield an outcome which maybe unacceptable to one or other of the parties concerned.

Given that in the Pakistani context, the references filed with the Supreme Judicial Council and the Supreme Court are in compliance with this requirement, the pre-emption of any prospective decisions that maybe given by these tribunals by the naysaying members of the bar is tantamount to betrayal of their own cause.

Thirdly, there is an additional consideration concerning the conduct of individual lawyers who are appearing for the Chief Justice in the Supreme Judicial Council proceedings. While they are all held in high regard, it is a matter of concern that these gentlemen have considered it fit to participate in TV chat shows on the suspension of the Chief Justice in which they express their views without reservation on the mala fides of the government and the bona fides of the Chief Justice in the process leading up to the current crisis.

Since the matter is now sub judice, with both the Supreme Court and the Supreme Judicial Council being seized with diverse aspects of it, constitutional correctness and courtroom etiquette require impleaded parties and participating personnel to confine their comments on these matters to courtroom proceedings and to scrupulously avoid commenting on them outside the court.

To do otherwise is to run the risk of diminishing the importance of the positive gains of the movement with the sort of ineptitude and grossness that we are known to display all too often when confronted with major issues.

A final cause of concern is that this matter has developed its own dynamics, and unless resolved soon, it is likely to have unforeseen consequences that may spin out of control. Therefore, the parties involved should facilitate its expeditious disposal, because delay and prevarication will be harmful to the well-being of the judiciary, and hence by analogy, to that of the state.

The writer is a barrister at law and lecturer in legal studies.