PRIME MINISTER Shaukat Aziz has stated that the salaries, wages and pensions of government employees would be increased when the new budget is presented. He has also promised to raise the minimum wages of the private sector workers, probably in view of the forthcoming elections.

Meanwhile, President Musharraf has said that the size of the federal budget for next fiscal year will be raised through taxes to one trillion rupees as against current year’s Rs840 billion. That target could be easily materialised as the government revenue is increasing rapidly, particularly the direct tax revenues in the light of the seven per cent economic growth expected this year and the flourishing corporate and banking sectors with their high tax payments. The prime minister wants higher payment for the workers so that they can benefit from the higher economic growth. But prices are rising and recently the prices of 16 essential items rose further following previous price rise.

Simultaneously, chairman of the government reforms commission Dr. Ishrat Hussain, the former governor of State Bank of Pakistan, proposes to extend the retirement age of government employees to 62 years from 60. Late retirement has several advantages for the government. But a major disadvantage is decrease in fresh recruitment. Over two million enter the job market every year in Pakistan.

Late retirement can help retain some of the best talent for two more years although so far only those having influence succeed in getting an extension for two or more years. It can also reduce the pension burden of the government which is reported to have risen to Rs47 billion. What percentage of the total pay bill the pension consumes is not obvious.

Many retirees at 60 are mentally and physically fit and so many governments in Europe particularly in Scandinavian countries had their retirement age between 60 and 65. Senior judges in Pakistan serving at high courts retire at 62 and those at the Supreme Court, at 65. But a decision not to seek fresh recruits will cause a major uproar, particularly among fresh graduates.

A few years ago, the military pension of Rs28 billion was shifted to the civilian sector. But in the wake of severe criticism, the decision was reversed.

Now the government is seriously trying to raise income for the pension fund so that it can give a better deal to the pensioners. A number of actuaries are working on it. The effort is to use some profitable methods, as employed by the western countries, and make the pension a productive asset to the country as well.

While the size of the pension bill is said to be Rs47 billion, the actual number of the pensioners is not known, nor is known the size of the pension bill in the provinces and the number of pensioners there. The yearly figures should be informed when the budgets are presented. Besides, it was said that after the privatisation makes headway the number of employees on the government’s payroll will come down. To what extent that has happened and how far the number has come down is not known.

Now that we have district governments with their own budgets, what is the size of their pension fund and the number of persons employed by them. These should be accounted for from year to year.

Usually the larger the bureaucracy, the longer the redtape and greater the corruption. Too many persons want to fill their pockets and do that in concert. The Asian Development Bank says Pakistan needs Rs30 billion each year for five years for expenditure on the maintenance of roads. The bank also says that 20 per cent of the funds will be lost through corruption. That means six billion rupees each year. A solution being suggested is pre-audit of the outlay on large projects. But it has not found favour with the government on grounds that it might delay implementation of the development projects.

It has been reported that the new annual development plan outlay to be presented along with the budget will be of the size of Rs500 billion. The current year’s outlay is Rs270 billion. This is a large increase in the outlay, particularly after using borrowed funds from abroad. Care must be taken to ensure that the country gets the best out of the development outlay instead of too much of the borrowed funds going waste.In an economy marked for sustained inflation, increasing wages or salaries of government employees is not the ideal or real solution to the problem. The normal effort should be to increase the supplies and lower the prices, in addition to adequate official measures. Since such attempts in the past had failed in Pakistan even after following a tight monetary policy the government is coming up with salary and wage increases to appease the people.

And the government finds that it can raise the salaries of its employees easily as its tax revenues next year will rise to Rs 1 trillion, and the overall size of the budget may rise to Rs1.7 trillion. The private sector’s profits are large enough to afford higher wages for its workers. The advisor on finance to the prime minister Dr. Salman Shah says there will be tax relief in the budget but usually the loss of revenues from such concessions is not very large.

Now as a result of increase in wages and official salaries, the demand pressure in the market will increase and prices may go up further. That is what has happened in the past and can happen again. Prices of 16 essential items have already gone up and prices are to rise further. But in the prevailing political situation, the government has no option but to increase the wages for it is an election year.

Industrialists and traders will pass on the burden of the enhanced wages of the workers plus the loss of revenue from early closure of shops, to the consumers. They will not share any of the enhanced cost and loss of income among themselves. That is not our way of doing business. The consumer is at the receiving end of all the taxes, wage increases and other levies.

The government promised to improve the supply chain by promoting a second sabzi mandi in each city. Not much has happened in that direction so far. Instead, consumers are benefiting from the opening of the Makro-type supermarkets where they can buy essential items in bulk at concessional rates. That is a negation of the official policy.

The small consumer meets his needs , not only through the utility stores which are small in number, but also through the open market. The government has to come up with such measures which are beneficial to the common man to make him feel the high economic growth is real and he is a participant and not merely an envious onlooker.

IT has not been a happy week for the left. The sharpest blow came on Sunday, no softer for being expected. Ségolène Royal's defeat will extend to 17 unbroken years the right's lock on the French presidency.

Remarkable this, when you consider France's place in the progressive imagination as the great European bulwark against both globalisation and America's plans for unipolar world domination. Even in France, which stands up to Ronald McDonald and George Bush, the left cannot win.

In Britain the gloomy tidings came earlier. The Conservatives hammered Labour (and the Liberal Democrats) in England, bagging a 40 per cent share of the vote that makes a Tory general election win utterly plausible. Defeats in Wales and Scotland only added to the misery, suggesting that Tony Blair is making his exit just as Labour's 10-year winning streak runs out. Pretty soon there could be right-of-centre leaders in Europe's three great capitals: Angela Merkel in Berlin, Nicolas Sarkozy in Paris and David Cameron in London.

But look more closely. Behind those depressing headlines lurk some encouraging signs, hints that progressives might yet have their day again - some of them from the last place you'd expect. Start with the home front. Last week's most significant defeat came in Scotland, where Labour had dominated for 50 years. Yet it was not the right who won. It's true the Scottish Nationalists promised a cut in corporation tax, but in almost every other area the SNP attacked Labour from the left - from opposition to the Iraq war and the renewal of Trident to promises to wipe out student debt. And remember, the SNP fought not the government in London but Scottish Labour, which was already to Blair's left. In other words, Scots were choosing between two shades of centre-left and they chose the redder of the two.

In Wales, there was a similar story. Rhodri Morgan's administration was also of deeper red than Blair's in London. And while it lost three seats in the assembly, Plaid Cymru, which sits to Labour's left, gained the same number. Thursday was certainly a bad night for Labour, but that's not quite the same as a pendulum swing to the right.

It's harder, admittedly, to draw that conclusion about France. (Tony Blair's YouTube message of beaming congratulations to Sarkozy is confirmation that the prime minister is leaving office utterly unrepentant, as heedless of Labour party members' feelings now as when he holidayed with Silvio Berlusconi or locked shoulders with George Bush.)

Sarko looks every inch the hardman of the right. Yet even he, for all his rage against the 35-hour week, does not buy into the full Blair package. "I want Europe to protect us from globalisation, not let in globalisation as a Trojan horse," Sarkozy declared during the campaign. Rather than let the chill winds of market forces and free trade blow, Sarkozy proposes new barriers to imports from outside the European Union, all in the name of protecting jobs. Not quite one of les Anglo-Saxons, then.

Which brings us to the big surprise. Europeans speak of the Anglo-Saxon or Anglo-American model as a synonym for turbo-charged, take-no-prisoners capitalism. Yet there are some signs, tentative for now but noticeable all the same, that movement is under way even in the US, inside the belly of the capitalist beast. They come partly in reaction to the ever worsening state of inequality in that country. You can pick your stat, ranging from the claim that just two men -- Bill Gates and Warren Buffett -- have as much money between them as 30 per cent of the entire American people, to the findings by a federal reserve study that the top 10 per cent of Americans now own 70 per cent of the country's wealth, while the top 5 per cent own more than everyone else put together. There was a time when a company boss earned perhaps 10 or 20 times the salary of his lowliest employee.

By 2004, that ratio between average chief executive and average worker had leapt to 431 to one, and the gap has got wider. It means that average worker takes more than a year to earn what his boss brings home in less than a day. The result is grand houses on New York's swankiest avenues that were, until recently, multiple apartments but which are now restored to the private homes they were a century ago. Makers of 200ft yachts report record sales. Economists say the last time such a yawning chasm separated rich and poor was in the Great Gatsby years, on the eve of the crash of 1929.

America's politicians have begun to notice. The Democratic presidential candidate John Edwards speaks of the "two Americas". Barack Obama tells audiences that not only is caring for the poor an American tradition, but that "those with money, those with influence, those with control over how resources are allocated in our society, are very protective of their interests, and they can rationalise infinitely the reasons why they should have more money and power than anyone else".

Most striking was the Democrats' response to Bush's last state of the union address, given by Senator Jim Webb. He invoked the early years of the last century. "America was then, as now, drifting apart along class lines," he said, deploying the c-word that is now all but barred from British political discourse. Recalling the robber barons who were "unapologetically raking in a huge percentage of the national wealth", Webb gave this charged warning from history: "The dispossessed workers at the bottom were threatening revolt."

This talk connects to the world beyond America in two ways. First, some inside the US are beginning to see a global picture. A new book, Second Chance by Zbigniew Brzezinski, the cold war hawk who served as national security adviser to Jimmy Carter, includes a startling phrase. No leftist, Brzezinski detects what he calls a "global political awakening", a stirring across much of the developing world, among those who are "conscious of social injustice to an unprecedented degree and resentful of its deprivations and lack of personal dignity". Thanks to television and the internet, the global have-nots can now see all that the haves are enjoying at their expense. The hard-headed Brzezinski sniffs revolution in the air.

The second (and related) impact is on the status of the US as a model to the rest of the world. Last weekend a clutch of political scholars gathered in Oxford for a New York Review of Books conference on "The new face of American capitalism". Several suggested that, thanks to a weakening dollar and a narrowing in the performance gap between the US and Europe, the US model was beginning to lose its shine. The debacle in Iraq had also badly damaged American prestige.

This leaves Gordon Brown with a challenge. As one speaker, Simon Head, put it: "The UK has staked much on being the best European emulator of the American model. But if that model is looking jaded, where does that leave us?"

This, then, is the thought Gordon Brown might mull as he watches Blair announce his exit tomorrow. Is it possible that the Blair era of neoliberal certainty is coming to a close, that there are stirrings abroad that call for something else? Might there not be a demand for action, as there was when the last intolerable gap in wealth opened up nearly a century ago - a demand, in short, for a battle against inequality? —Dawn/Guardian Service

FROM the moment Chief Justice Iftikhar Mohammad Chaudhry left his house in Islamabad, travelling in a small cavalcade of vehicles, till his departure from the stage at the Lahore High Court venue 30 hours later, the cities and roads of central Punjab wore the look of Parisian streets on the eve of the French Revolution in 1789.

Thousands of people milled around the Chief Justice’s vehicle all along the GT Road, calling for democracy, justice and above all a change in the “system.”

A deluge of people inundating the core of Punjab with representatives of all major opposition parties, civil society, the judiciary, lawyers, media and the common people should have left no doubt in anyone’s mind as to the writing on the wall. After all, gone is the age of red revolutions, barricaded streets and bloody insurrections. These are the times of “orange” and “cedar” revolutions brought about by massive but largely peaceful demonstrations.

But judging by the ruling alliance’s rhetorical defiance of the popular mood and its resort to taking out big rallies, arresting political workers and attacking the media, one cannot escape the question of whether or not the government will take heed of this mammoth but disciplined protest, or ignore it and allow the forces of anarchy to wreak havoc on state and society.

It is not difficult to get the answer from President Musharraf’s whirlwind tours and forceful speeches making clear his intent of not taking back the reference filed against the Chief Justice and leading the nation well beyond the 2008 elections. The question is: why this tenacity?

The chief minister of Sindh aptly provided the answer to this question when he stated that the government is ruling with the support of “Allah, America, army and awam”. One can also add to this list the much speculated “deal” between President Musharraf and the PPPP as the fifth source of support, notwithstanding the denials of the latter. A brief analysis of these sources is in order.

From a religious perspective, the rightful claimant of Allah’s support is one who espouses the cause of the “oppressed”. Whether this person is President Musharraf or Justice Chaudhry, only the future will tell.

As to American support for the government, some “liberal” opposition leaders have serious reservations based on their own “contacts” with the US administration, and rightly so. The Bush administration has maintained a dual policy towards Pakistan. On the one hand, it does not “see Pakistan beyond Musharraf with or without uniform”, while on the other, it calls for “true” democracy in Pakistan.

This policy coincides with US interest and the political system. US policy in this region envisages Pakistan as a frontline state in the fight against terrorism, employing its military, strategic contiguity and clout over the forces involved in Afghanistan. But its internal democratic constraints oblige it to support democracy in this important Muslim state, which is widely perceived to be threatened with Talibanisation.

America always watches its own interests even if that results in the destruction of countries like Vietnam, Afghanistan and Iraq or the elimination of rulers like the Shah of Iran and Ziaul Haq. Therefore, it is premature to say which way American support would ultimately go and what would be its impact on our political conditions.

As to the army, no one can deny the fact that it is a well-integrated and hierarchical force, which must obey the commands of its chief. No wonder, President Musharraf is reluctant to shed his uniform, a source of awesome power. Having said that, one wishes to know under which constitutional provision the chief minister has enlisted the support of the armed forces for the present government.

In order to gauge the “awami” support, the best parameter is free and fair elections, which unfortunately have so far eluded the people since 1970. No doubt, the presidential referendum and elections to the national and provincial assemblies and local councils were held under President Musharraf. But do they reflect a true picture of the people’s support?

The president has himself admitted to the “overzealousness” of government functionaries during the last referendum. And even if the results of the last national and provincial elections are not questioned, much could still be said about the way the Jamali government was constituted after arm-twisting and causing a number of “nabbed” MPs to cross the floor.

Similarly, the results of the local government elections are so lopsided that they warrant less analysis and more lamentations as these have resurrected the “feudocracy” by investing it with the state’s coercive and financial powers.

Also, few would deny that economic conditions for the common man have worsened over the years and that the law and order situation is deteriorating by the day. In Sindh alone there are 120 tribal feuds taking their toll on people’s economic, social and cultural lives. The lack of judicial recourse has forced people to fend for their own security.

If fiefdoms have returned to the rural areas of the country, the cities are beset with unemployment, crime, inflation and the dearth of amenities. Everyday there are protests against the civic agencies.

In this grim scenario, how can the government stake its claim to “awami” support?

Finally, even if the deal with the PPPP is pulled off, it would be a nonstarter. Taking a lesson from past failed civil-military alliances, this time Benazir Bhutto would like the president to forgo his uniform, which means depriving him of his mainstay of power i.e. the army. Likewise, the president would demand that she accept him as president in uniform, which means making a big dent in her anti-military credentials.

Thus, the logic of the situation demands a perfectly symmetrical deal, that is, a parity of power between the two parties, and that seems a very distant possibility.

Benazir Bhutto has no other option but to support the ongoing struggle for the freedom of the judiciary and the return of democracy, and the president will also continue to bet his political future on the Muslim League-Q and its allies.

From the foregone, it is difficult to believe the Sindh chief minister’s claim of enjoying the above-mentioned “sources” of support, except for the support of the army.

It is time to put aside partisan politics and help take the country out of the current crises. Already, people on either side have taken to the streets, creating an ominous situation. Pakistan suffered a similar situation in 1968-9 when Ayub Khan failing to fathom the deep malaise afflicting the country belatedly transferred power to another general whose mishandling of the situation led to the break-up of Pakistan.

Although the present movement is essentially in support of the Chief Justice, it will have far-reaching repercussions for constitutional rule and the federation. Luckily, the protests led by senior lawyers and mainstream political leaders and closely watched by the media, have so far remained peaceful. But for how long?

Already, thanks to the ideological spillover of the war on terror and its divisive effect on Pakistan’s polity, many a well-entrenched religio-political militant group has risen to challenge the writ of the state. If unchecked, this trend may take the country towards anarchy, even fascism.

This was what happened in Germany, Italy and Spain in the 1930s when terror and dogma triumphed over reason and democracy. First, these countries, and then the entire world, had to pay the price of “appeasing” Hitler et al.

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