Reviving the farm sector

PUNJAB’S agricultural endowment must be put to full use for obtaining a high and sustainable rate of growth in the provincial GDP (PGDP). Not only can agriculture provide a bounce to the provincial economy, it also has the potential to significantly reduce the incidence of poverty and improve income distribution.

There are several other benefits as well. For instance, by increasing agricultural output and productivity of the sector, the province should be able to reduce the explosive growth of its large cities. A buoyant agricultural sector should help to direct rural to urban migration towards cities and towns more closely connected with the countryside. This should release demographic pressures on such cities as Lahore and Rawalpindi.

All this can be realised by the adoption of public policies that are explicitly directed towards putting to economic and social use the enormously rich endowment with which the province started its life as the most important economic region in the state of Pakistan. This, with two exceptions, did not happen.

The exceptions were the two “green revolutions”, one in the late 1960s and the early 1970s and the other in the 1980s. In the first, Punjab saw an impressive increase in the output of wheat and rice; in the second the province increased the output and productivity of the land devoted to the production of cotton. In both cases the environment for increasing output was created by those responsible for making public policy.

The circumstances that launched the first green revolution are well known but need to be briefly recalled in order to set the stage for a discussion of what motivates policymakers.

In the 1960s agricultural scientists working in the institutions that belonged to the network managed by the Consultative Group for Irrigation and Agriculture Research, the CGIAR, were doing intensive research in several parts of the world on high-yielding seed varieties. Impressive results were produced by those working on wheat in Mexico and by those at the Philippines doing research on rice.

The government of General Ayub Khan — in fact the president himself — was impressed with the research results and decided to import the high yielding seed varieties from these research centres.

This was a good moment for bringing about change in the country’s agriculture but the high-yielding seeds needed large doses of fertiliser and greater application of water. It was not known then in Islamabad that the farming community had invested heavily in sinking tubewells in the more fertile areas of Punjab.

The technology used for the wells had come to the attention of the farmers in Punjab when the government launched its massive Salinity Control and Reclamation Programme, the SCARP. This was a fortuitous development since the tubewells eased the water constraint and persuaded the farmers that they could take the risk for switching to a new variety of seeds.

As the farmers introduced this change the government did a great deal of hand holding by using the new system of local of government, the “Basic Democracies”, to provide them with all manner of public services.

Although the Basic Democracies system became the special target of attacks by those who opposed Ayub Khan and eventually caused him to vacate his office, it played an important role in bringing change to agriculture, in particular to agriculture in Punjab. The system brought the community of farmers closer to the centres of policymaking.

The government’s interest in reviving agriculture was influenced in part by Ayub Khan’s economic and social background. He came from a middle class family with interest in land.

The army over which he presided had strong representation at the lower levels of people close to the soil. He and the constituency that supported him were less urbanised in their economic interests and social outlook than the policymakers who were replaced by the military’s takeover. Under Ayub Khan, the federal government was ready to once again to turn its attention towards the sector of agriculture.

The second green revolution took place in the 1980s and this time it affected the cotton growing areas of south Punjab and upper Sindh. This time it was the maturation of the fertiliser industry that proved to be the agent of change.

The government under Zulfikar Ali Bhutto had made large investments in the industry after nationalising it. It is hard to tell whether the reason for that was to help the cotton growers who were by far the largest consumers of this product, but that turned out to be its effect once the new capacity created came into production in the early 1980s.

Not counting these two episodes of change in agricultural policies and practices, little was done to benefit from the rich endowments that were available to the sector at the time of Pakistan’s birth. To understand why Punjab neglected its rich agricultural inheritance, we should seek help from what economists call the theory of public choice.

In 1962, James Buchanan and Gordon Tullock published ‘The Calculus of Consent’, a book that went on to revolutionise thinking about how policymakers work in economic systems and how their work is influenced by those who are likely to benefit from their decisions. They abandoned the long held belief that all individuals, no matter what their station in life, are welfare maximisers; they work to further their own interests.

Collectively, however, they manage to achieve what is good for the society at large. The revolution wrought by this line of thinking — for it was a revolution and it resulted in Buchanan winning the Nobel Prize for economics in 1986 — brought the concept of public choice into economics.

Economists now began to pay heed to the workings of special interest groups and social groups within economic systems and how they were able to influence policymaking. As a result of Buchanan’s thinking, institutions, norms or culture, or all of these, came to stand at the centre of development economics.

Buchanan’s book had an enormous impact on the thinking of social scientists who had begun to work on the role governments and institutions play in economics. His work was reinforced by that of Mancur Olson, another economist who published ‘The Logic of Collective Action’, three years after the appearance of Buchanan’s work.

Like Buchanan, Olson claimed the territory of political science for the tools of economics. He argued that policy decisions could be explained by looking at politics as a competition between the private interests of specific groups, rather than a process of delivering public goods in a neutral and disinterested way.

In other words, public policy has deep roots in narrow political and social concerns and is not necessarily the result of a careful review of larger public interest.

Equipped with this line of thinking we can begin to make some sense of why agriculture was neglected for so long by Punjab’s policymakers. In some earlier works — as well as in the earlier articles in this series — I have discussed the enormous change that came about in the structure of Punjab’s society as a result of the partition of the province in 1947 and its incorporation into the new state of Pakistan.

For almost two decades the province’s partition politically eclipsed the large landlords who, with a few notable exceptions, had opposed the creation of Pakistan as an independent state. Those who pushed back this once powerful group to the margins of political society were the members of the refugee community that came into the new country in two streams.

The one that originated in the Muslim minority provinces of eastern and central India went to Karachi and several other urban centres of the province of Sindh. The other came from Punjab’s eastern part that was separated and incorporated as a state in India.

Both groups had actively campaigned for the idea of Pakistan and both became important policy players in Pakistan’s early days. Both were more urban in their social, cultural and economic backgrounds than was the case with the group — the large landlords — who had the most influence on public policymaking during the British period.

The new state of Pakistan, therefore, spent more time, energy and resources on settling the refugees and industrialising the new country than on building on the rich agricultural endowment of the Punjab and upper Sindh. The result was the neglect of the sector of agriculture.

This neglect caused a near total transformation of Punjab’s agriculture. It lost the dynamism that was infused into it by the British who had worked hard and invested heavily into turning the province into the granary of their food-deficit empire.Nothing illustrates this change more than the fact that by the mid-1950s — in less than a decade after independence — Pakistan was unable to feed its population and became heavily dependent on food imports from the United States.

There was some change under President Ayub Khan when he created space for the landed community in his political system. This probably contributed to the launch of a series of public initiatives that brought Pakistan its first green revolution.

It is my belief that the political system and the make-up of the Punjabi society in recent times has created an environment conducive for bringing agriculture back as a major player in the economy and for using it to produce economic and social change in the province.

For the first time in the province’s history, many operating in agriculture have developed economic interests in the urban economy and many urban economic and social groups have developed stakes in the province’s agriculture. Public choice theory tells us that such a confluence of interests should lead to the formulation and implementation of policies that will further these developments.

There are many social and economic changes now in place that have brought together entrepreneurial activities in some parts of urban and agricultural economies. Among them perhaps the most significant is the rapid increase in the number of people who belong to the upper income classes — not just the very rich and the rich but also the upper middle class.

These people have patterns of consumption, supported by rapid increases in disposable incomes, that needs to be satisfied by the development of agro-processing industries. These industries now account for the most rapidly increasing industrial outputs in the country. They are also bringing in foreign direct investment into the sector once neglected by foreign entrepreneurs.

While the environment is now there to increase the output, productivity and the level of sophistication of this sector of the economy, this will happen more rapidly if the government were to lend a helping hand.

Public policy could now help the sector of agriculture to regain the place it once occupied in the economy but for that to happen the government must first understand what is required by the agents of change operating in this area. Strengthening the system of local government has to be an important part to play in this enterprise. I will turn to this subject next week.

Are we becoming a banana republic?

IT started on the day a speaker of the Legislative Assembly of Pakistan (Maulvi Tamizuddin) had to wear a burqa for fear of being kidnapped by the government (see the Maulvi Tamizuddin Khan case of 1953 when Governor-General Ghulam Mohammad had dismissed the government of Khwaja Nazimuddin).

The events on that day were the harbinger of later developments over the course of Pakistan’s history which saw four generals usurping power while mouthing the usual excuses (corruption, breakdown of law and order, national interest, etc.) for doing so. Civilian prime ministers were not allowed to complete their term and found themselves being controlled by the army, the bureaucracy and even the intelligence agencies.

This led to the creation of an underground army of Islamic militants and the shrinking of space for liberal humanists and women and to the mayhem in Karachi during the late 1980s and 1990s. One can attribute the events of May 12 in Karachi and, lately, the abduction of policemen by Lal Masjid clerics to the same phenomenon.

If all these are not the characteristics of a banana republic, then what are? Most of the antics of the men in power would be ridiculous but for the fact that they are dangerous. For instance, the government’s panic at the thought of the Chief Justice addressing the Karachi bar and the consequent blocking of all roads from the airport would have been considered ridiculous had the public not seen on its TV screens images of the dead and dying on that fatal day in Karachi when even ambulances could not move.

In ordinary cases, we would have laughed at the high-ups of the Sindh government when they declared that the police force was deployed to protect the Chief Justice and so could not reach where it was needed. But now we cannot laugh because this meant that people kept falling to the bullets of assassins; Aaj TV was fired upon for five hours, lawyers were roughed up and the police and Rangers never appeared.

The Chief Justice himself remained under siege at the airport and had to leave in the end without addressing the bar. Normally, the rallies of presidents and prime ministers are to be taken with a cynical smile. This time it was appalling that people at a rally organised by the PML-Q were dancing in Islamabad as the wounded were moaning in Karachi.

“Bananisation” has gathered pace and, what is worse, is taking a dangerous, ethnic turn. General Musharraf has supported the MQM openly and unrepentantly. Meanwhile, Shahi Syed, chairman of the Pakhtun Action Committee in Karachi, wants the arrest of MQM workers and is barely in control of Pakhtun emotions which are running high. Rasool Bux Palijo of the Awami Tehrik, a Sindhi nationalist organisation, has echoed similar grievances.

Nisar Khuhro and Sherry Rehman of the PPP lament their own dead. Iqbal Haider, the secretary-general of the Human Rights Commission of Pakistan, claims that the MQM is to blame. Even General Musharraf’s PML-Q in the Punjab cannot ignore the public sentiment. After all, corpses have reached upcountry and everybody has three questions on their lips: why did the MQM hold its rally on the day of the address of the Chief Justice? Where was the Sindh government when the roads were blocked? Where were the army, the Rangers and the police on May 12?

General Musharraf has answered the first question. The MQM rally was held to show its strength to the CJ. The other questions remain unanswered. However, the answers of everybody, except the MQM, have captured the public imagination as letters to the press indicate. This injection of ethnic poison in the judicial crisis is really alarming. National leaders have always avoided it and the army has been especially averse to it. If this venom enters national politics at this juncture, the state will slide further into anarchy which is what ‘bananisation’ actually is.

In a banana republic, the state is not run according to the constitution. We have had three constitutions none of which survived the opportunists. Indeed, the fear of elections promised by the 1956 constitution made Iskander Mirza declare martial law. But he could not control the genie of the army that he had so selfishly and foolishly allowed to escape from the bottle.

Ayub Khan then perpetuated himself for a decade. But when he was forced to leave he violated his own constitution (of 1962), handing over power to the army chief.

Zulfikar Ali Bhutto made the 1973 Constitution but the amendments to it almost did away with its spirit. Then Ziaul Haq, seizing power when Bhutto was about to reach an agreement with the opposition, mutilated the Constitution and made a mockery of it. And now the same mutilated Constitution is being made to support military rule again.

The second characteristic of a banana state is that the rule of law does not work. Instead, the police, army, paramilitary forces or intelligence agencies become very powerful and nearly autonomous. This happens in highly centralised totalitarian dictatorships too. In both kinds of states the first casualty is the truth; the second is freedom and the third is moral courage.

Journalists and academics stop speaking the truth, and sycophancy becomes the order of the day. The rulers become more cruel since nobody dares to oppose them any longer. Academic originality, research, innovation and even art suffer because these are the products of free minds and people who can think on their own. Such people go into exile or are liquidated and silenced. Mediocrity rules and the country becomes stagnant and backward-looking.

Yet another mark of a banana state is that its rulers are afraid of a free and bold press. The press is the major antidote or corrective to the follies and aberrations of society. It tells us about events — including gun battles — at the risk of the lives of brave young men and women who expose themselves to the wrath of the state and its supporters among intelligence agencies, political parties, etc.

A major indicator of ‘bananisation’ is the stifling of the press. In this crisis alone we have seen how two TV channels were attacked and almost every other day the press is threatened and warned. Another indicator is unauthorised, illegal acts such as the murder of the additional registrar of the Supreme Court and the arrest and incarceration of a DIG from Sindh. If the rule of law comes to an end, if religious and ethnic groups hold ordinary people hostage, if the press is intimidated and gagged, then what we have is a banana republic.

There are many obscure African and Latin American countries which are banana republics. Nobody seems to care about them except, of course, their own citizens assuming they can still think critically. But Pakistan’s case is different. We are an important state which should not be destabilised if the whole of South Asia is not to be dangerously destabilised.

Moreover, we are a nuclear state. An unstable Pakistan with such extremist contenders for power as militant religious groups and an ethnically charged ruling elite can be very threatening. We know that the United States perceives threat from all unstable countries — especially if they are Muslim — so we should be very careful not to give the impression of not being not in control to the rest of the world. This is so important that it had to be written. It is, in the words of Hermann Kahn, which he used in another context, the ‘thinking of the unthinkable’.

In short, the situation is so alarming that one is brought to the level of pleading, appealing and wishing to those who are in charge to see reason and make amends. If we are to survive we have to think seriously about this country. It will not be forever that we can play with the fortunes of this land of 160 million because banana states cannot even be played with: they hold their populations hostage; they play with their people.

The architect of his own collapse

WHEN I was assigned to the US Pacific Command in the mid-1980s, we military officers would often discuss the ambassadors in our theater of operations — a huge area embracing more than 30 countries and most of the Pacific and Indian oceans.

One name came up constantly as one of the best of the best: then-US Ambassador to Indonesia Paul Wolfowitz. He understood the culture, the people and the special circumstances of the world's most populous Muslim country, and he did a superb job in dealing with that country within the context of US national security interests.

Understand, then, my wonder over the last few years at Wolfowitz's fall. From my position, first at the Pentagon, then at the State Department, I watched the talented Wolfowitz self-destruct. How could such a successful, intelligent ambassador transmogrify into the petulant old man I watched fighting unsuccessfully to keep his job as president of the World Bank?

There were early signs. In 1990, when both of us were at the Pentagon — I worked for Colin Powell, then the chairman of the Joint Chiefs of Staff, and Wolfowitz for then-Defense Secretary Dick Cheney — I discovered that Wolfowitz was geared entirely to conceptual thinking and not to practical action, planning and detail and the disciplined routine that government requires.

But there was more. Powell was certain that the Soviet Union was expiring. Wolfowitz, Robert Gates at the CIA, Cheney and a host of retired military officers were certain the Soviets would be back. In Wolfowitz's stand, however, I saw something different from the others: a stubborn refusal to see beyond the evil of the "evil empire." For Wolfowitz, it was an ideological blind spot and that made it all the more obscuring.

I also saw more stark evidence of what a poor manager Wolfowitz was. He had no idea how to make the trains run on time — and seemed to have no inclination to do so. Talented people left his shop saying they could get nothing accomplished. Papers sat in in-boxes for ages with no action, and the need to deal with daily mini-crises was supplanted by the desire to turn out hugely complicated but elegantly expressed "concepts" and "strategies." The rest of the workaday Pentagon largely ignored Wolfowitz's policy shop as irrelevant.

When Defense Secretary Donald Rumsfeld picked Wolfowitz in 2000 as his deputy — to make all the trains in the Pentagon run on time — those of us who were familiar with Wolfowitz knew a train wreck would occur. It did, almost immediately, as nothing got through the roadblock of the deputy's office.

Later, as post-invasion planning for Iraq was called for, Wolfowitz and the No. 3 man in the department, Douglas Feith, proved their administrative ineptitude. By that time, I was working for Secretary of State Powell, and there was increasing friction between us and the Pentagon. We watched Rumsfeld, in the arrogance of his power and the hubris of his brilliance, totally ignore the chaos beneath him, working with now-Vice President Cheney to drive all trains to Baghdad.

Then-Deputy Secretary of State Richard Armitage, who had worked at the Pentagon for years before going to the State Department, once told me that Wolfowitz had to telephone him to discover what was happening in his own department. When Wolfowitz left the Pentagon under somewhat of a cloud because of the deteriorating situation in Iraq, the bureaucracy breathed a sigh of relief — not because the architect of the war had departed but because we longed for a deputy who could get the trains unscrambled (half a trillion dollars worth of crashing trains at the center of the federal bureaucracy is a hell of a problem).

But when we heard that Wolfowitz was going to the World Bank as its president, we knew that it would be only a matter of time before disaster struck again — that Wolfowitz's lack of administrative, managerial and leadership skills would derail him once more. Now it has happened.

Powell used to say that dreamers rarely succeed unless they build firm foundations beneath their dreams. But to do that, you need help and a willingness to get your hands dirty in the real world. That, though, was always beneath Paul Wolfowitz. And that is what undid him. ––Dawn/Los Angeles Times

The writer was chief of staff to Secretary of State Colin Powell from 2002 to 2005.

Patently out of date

THE US economy has thrived on technological innovation. Yet the federal government's conduit for invention — the US Patent and Trademark Office — has not grown with the rapidly changing times.

Overwhelmed by applications, the office has granted too many weak or bogus patents. Investors have obtained patents not to develop products but to slap a duty on those who do. Attempts by Congress to reform the system have been derailed, leaving change to come piecemeal through the courts.

Fortunately, the Supreme Court has issued a series of sensible rulings, most recently on Monday, that raise the bar for winning a patent and increase the incentive to challenge bad ones.

Rather than letting the courts rewrite the patent system one element at a time, Congress should overhaul it. Identical bills were introduced in both houses of Congress last month, aiming to block undeserving applications, reverse bad decisions and limit the claims exerted on minor technologies. Though there is widespread support for some of the bill's improvements, opposition is coming from drug manufacturers, universities and other research-reliant entities that want to maximize payoffs on the fruits of their labors.

At issue are provisions that would enable challenges to patents years after they are granted and would scale back penalties for infringers. Opponents say this would drive away investors, particularly in such high-risk, high-reward fields as pharmaceuticals and biotechnology, in which patents can be awarded years before products are tested and approved. The business model for these firms is so different from fast-moving consumer-electronics companies that it makes sense to confine the protections against abusive patent claims to the manufacturers that need them most.

––The Washington Post