MY article in Dawn (‘A stunted corporate sector’, February 13, 2007) on the reasons why the corporate sector in Pakistan had not developed to the point where it could play a part in the global economy provoked some debate in the columns of some newspapers. This is heartening since the subject needs to be looked at carefully and policymakers need to address some of the obstacles the corporations face that affects their healthy development.

Public policy has a major role to play in the development of the corporate sector in the country. Without the creation of a supportive environment, Pakistani companies will continue to languish in the margins of the global corporate business.

The subject is of interest at this time not only because of its history but because some members of the corporate community have begun to walk the corridors of power once again in order to seek protection from international competition. This is particularly the case with the textile industry, the country’s largest industrial sub-sector.

Should the state intervene to prop textiles or should it be left to face the winds of foreign competition? What is the role the exchange rate policy should play in aiding the sectors that rely on foreign markets for a good part of their sales?

These are important questions and they may be taken up in the budget for 2007-08. But the current travails of the textile sector were not the reason for me to write on the subject of corporate Pakistan.

I was prompted to write the article after watching the recent developments of large corporations across the border in India. Some of them have become global in scope, acquiring assets in both the old (steel) and new (information technology and pharmaceuticals) sectors in the developed world. Why were Pakistani companies totally absent from the global field, was the question I raised in the article.

There are several reasons why the corporate sector in Pakistan has failed to develop world class companies. Among the two that are most important was the nationalisation of large industries and financial companies in the early 1970s and corporate dependence on the government for support particularly during their lean periods.

I held the nationalisation programme carried out by the administration of Zulfikar Ali Bhutto to be an important reason for the stunted growth of the corporate sector. I suggested that the banking sector in particular would have done well had it been allowed to continue in the private sector.

In 1974, when the banks were nationalised some of them had developed to the point from where they were looking to move to Europe, the Middle East and other parts of the developing world. Penetrating the Middle Eastern market at that time would have been an extremely fortunate development since, in the early 1970s, the countries in this region were about to launch a massive programme aimed at economic development and modernisation.

Had the Pakistani banks been present at the start of the process that saw the economic transformation of the Middle East, they would have gone on to become global players in the world of finance.

I singled out the United Bank Limited as one institution that had developed a large Pakistani presence on account of the exceptional entrepreneurship of some of its managers. In the early 1970s it was poised to go global but then the Bhutto administration struck. Some of the bankers who had grown with the UBL went on to play significant roles in the banking world.

Most notable among these was Agha Hasan Abedi who founded the Bank for Credit and Commerce International, the BCCI. While the BCCI had an unhappy ending it launched many banking careers for bankers from Pakistan. It also laid the foundations for the development of the banking sector in the countries of the Gulf. Some of these banks entered Pakistan once the banking sector was reformed and the process of privatisation was launched.

The banks, once in the public sector following their nationalisation, lost the dynamism they had acquired during the period of Ayub Khan. They were used to favour the friends and supporters of whichever regime happened to be in power. As was the case with other public sector corporations, they were forced to hire staff they did not need. Little attention was paid to the examination of loan applications that were received; much of the lending was done without due diligence.

Consequently by the end of the 1990s, most public sector banks were groaning under the weight of non-performing loans. Some of them have still to fully recover.

My singling out the nationalisation of industry and finance as the single most important factor for setting back the development of the corporate sector was not appreciated by Tariq Islam, a nephew of Zulfikar Ali Bhutto, who contributed a spirited article to the pages of this newspaper in April.

The article was meant to honour the late prime minister on his death anniversary. “ZAB has been much maligned for his economic policies and nationalisation programme,” he wrote, “Pakistan was ruled by the famous 22 families who held complete monopolistic sway over the economy. Together they owned industries and the banks, disbursed loans to each other and controlled the means of production and supply. The poor were becoming poorer, they were without a voice, without hope, without a future.”

The “sway” of the 22 families over the country’s industry and finance is exaggerated. There was a serious analytical flaw in the conclusion that Mahbubul Haq drew from the numbers at his disposal when he delivered his famous “22 families speech”. His data referred to the distribution of assets among the companies listed on the Karachi stock market.

It was a bit of a stretch to extend that conclusion to the entire economy which is what he did for the sake of a greater political impact of his limited finding. This is also what Tariq Islam did in his article. However, it is not my intention to relive that controversy.

What I would like to stress though is that nationalisation is not the right remedy for correcting the concentration of economic power, in particular concentration in the sectors of industry and finance. What is required is intelligent public policy aimed at creating regulatory mechanisms that would not only check concentration but also encourage competition.

The debate on the working of the corporate sector has been joined by several other contributors who have enriched the discourse which, I hope, will also begin to interest the makers of public policy in Islamabad. In his thoughtful article published in Dawn on May 12, J.M. Sheikh, questioned my focus on the 1972-74 nationalisation as the turning point in the development of the corporate sector.

“No, nationalisation was not the unmitigated disaster that Mr Burki and others make it out to be,” he wrote. Instead he assigns much higher significance to the way the sector was being managed and believes that nationalisation, while it may not have been the ultimate solution, gave the system the shock it deserved. He suggests that Prime Minister Bhutto’s policies introduced many reforms in the corporate sector. This was particularly the case in bringing in and encouraging the introduction of professional managers into the nationalised industries.

“The demand for professional management increased with nationalisation and this was met with both thorough in-house training as well as by public service institutions”, writes Mr Sheikh. I suppose by “public service” institutions, he means the civil and later the military bureaucracy that supplied the nationalised industries a great deal of manpower.

In his contribution to Dawn on May 19, Shadab Fariduddin focuses on the negative role being played by the military’s growing economic interests in the country. “It can be argued that there are some industries such as defence production in which the army’s involvement is justified,” he writes. But the military has gone much beyond and penetrated the sectors in which it does not have any comparative advantage. It “spans retailing, real estate, banking, insurance, airlines, livestock, commercial agriculture, information technology, infrastructure construction, lower and higher education, bottling water, leisure and recreation, fertiliser and chemicals, power generation, trading, pharmaceuticals production, healthcare and many other areas of economic activity.”

The military’s involvement in the economy is not unique to Pakistan. It happens in both developed and developing countries. In the United States, for instance, the Corp of Engineers has a significant role in the development of infrastructure. Much of the intricate levee system along the Mississippi River was built by the American army. The Chinese People’s Liberation Army, the PLA, has extensive business interests in several sectors of the economy. The military is deeply involved in the economies of Argentina, Chile, Egypt, and Turkey.

What creates problems is when the military “unlevels” the playing field. That appears to be happening in Pakistan and is the subject of a recent book length study by Ayesha Siddiqa. To quote once again from Mr Fariduddin, “military businesses enjoy special concessions in terms of taxes and duties that help them outdo the others. They collude among themselves to keep rivals out. In this scenario, private corporations in Pakistan are unlikely to grow big enough to become global outfits.”

Public policy has also given the state the role of the nurse for the private corporate sector with the government stepping in to provide support when the companies should have been left to fend for themselves. To extend the medical metaphor a bit, the industrial policy pursued by the country in the first three decades of independence made the state become the midwife, watching and helping the birth of private sector companies. This created what economists call “path dependence” which has survived to this date.

Path dependence happens when economic matters continue to pursue the course of action that have produced satisfactory results in the past. According to this line of thinking, what has succeeded in the past should also work in the future. There are currently demands emanating from the textile sector for support since it has failed to deal with the competitive environment created by the end of the Multi-Fibre Arrangement that had provided protective space to the exporters in the markets of major importers.

Public policy needs to address these issues. It needs to balance the demands of the citizenry for the provision of goods and services it needs at affordable prices as well as the requirement that the corporations in both the public and private sectors can face external competition. I am sure the discourse on the subject will continue and would contribute to the formulation of intelligent public policy aimed at developing an efficient corporate sector that can become global. Such policy must also protect public interest.

ABOUT a month ago, a debate on the medium of instruction was raging in these pages. I, too, intended to contribute to it but other developments intervened and I chose to respond to them. This article, therefore, is belated but hopefully sheds some light on a thorny issue.

To begin with, the issue of the medium of instruction extends to that of power, social class and money. As such any debate focusing on which language is better to learn in, is incomplete and flawed. All talk about ‘choice’ is also flawed. A meaningful choice can only be exercised when there is a level playing for all, when whatever one chooses is expected to yield similar pleasures for all.

Most people in South Asia have been excluded from the field altogether, being too poor, too peripheral and too powerless. Others are included on the periphery, but hurdles make it difficult for them to acquire linguistic capital. And for some — always the elite — the language is dished out on a golden platter.

Why I am emphasising the obvious is that many writers talk about giving a choice to the public in all matters including the medium of instruction. Sometimes, this is expressed as choice regarding the institution one prefers to study in: private versus public. This is grossly misrepresenting the issue.

The fact is that most parents would prefer to give the kind of education to their children which will facilitate their entry into the domains of power both in the state and the corporate sector; nationally and globally. Since English is used in such domains we should not expect that they would want to send their children to any except English-medium schools. A few activists may prefer to send their children to schools teaching in their languages and some religious people might send them to madressahs, but mostly they will choose English-medium schools for practical reasons.

In general, people choose a language in proportion to how empowering it is for them. Sometimes, as in the midst of a national or ethnic movement, they choose the language which symbolises their identity (as the Bengalis did from 1948 to 1971) but this is rare and even then pragmatic considerations continue to play a part.

So, if people choose the language with the highest potential for empowering them, their choice is already constrained. Of course, if they cannot afford to “buy” this language, as is the case of Pakistanis with respect to English, they are forced to settle for the next best option which happens to be Urdu. Where is the choice? The fact is that most people have no choice.

The poorest and rural people are forced to opt for madressahs which give them free food and boarding, the lower and middle classes go to vernacular schools in the hope of getting into universities and becoming officers, and the upper and upper-middle classes opt out of the system and study in expensive English-medium schools, colleges and universities and go abroad where they settle down or return to make money like foreigners. The nabobs of the East India Company are back but this time they come in shades of brown. Nonetheless they are as alienated from the natives as the pukka sahibs (the nabobs were ‘White Mughals’ and were less alienated).

In Sindh, Urdu-medium schools constitute 64.6 per cent of the total and Sindhi-medium 15.5 per cent, while schools operating in different languages including Arabic make up 9.5 per cent. About 10.4 per cent are English-medium institutions.

Out of these only 1.6 per cent are in the public sector while 32.1 per cent are private. That is why the term ‘private’ is a camouflage for English-medium which, in turn, is considered synonymous with “privilege”. (In fact, most so-called English-medium schools merely use the label to fleece parents. Neither the teachers nor the students are fluent in that language).

Genuine English-medium institutions teach English through elitist interaction. They are a club which one enters because of the class one belongs to. It is a snobbish, exclusive club and the rights of entry are reserved. Those not in this class cannot breach the hallowed portals of such institutions. It is a matter of class and there is really not much of a choice in such matters. In a sense then, in South Asia at least, we have never really broken away from the Brahmanical system of elitism through language.

As for the few English-medium schools in the public sector, the question is not why they are so few but why they are there at all. After all, how can public funds be spent on equipping some citizens with more linguistic capital than others? But citizens are equal only in legal theory. In practice they are not. These elitist institutions are cadet colleges, schools run by the military and the bureaucracy and even semi-government corporations. There are also schools and colleges in Islamabad and garrisons using English as the medium of instruction. As English is expensive more public funds are spent on these bastions of privilege. That this is against the law does not seem to cross anybody’s mind.

So, what has been suggested? One proposal is to let the status quo prevail. The other is to teach everyone in English. The third is to teach science subjects in English and others in Urdu.

The first option is dangerous since it will increase polarisation in society. If people are treated unjustly for long they will revolt and that is not in anyone’s, including the poor, interest. The second option does not actually change anything since discrimination would remain. There are not enough funds or competent teachers to teach everybody in English.

The basic language of schooling should be the mother tongue wherever practicable. We have over 55 mother tongues so it may not be practicable for all but for many languages it is. This would enable the children to respect their language, their identity and their roots. Then they can graduate to a language of wider communication (LWC). By agreement of all federating units this may be Urdu.

English should be taught as a library language, as an auxiliary language, and it may be the medium of instruction at the level of higher education. Jobs should be available in the local languages as well as the LWC. All public services should operate in these but higher education, including research, should operate in English as it is a global language. The idea is to reduce privilege to make the playing field as level as possible but without losing English altogether which we cannot do in the globalised world of today.

There are problems with my suggestions. First, those who are privileged will never allow them to be implemented. Second, suppose they are implemented and the English-using lobby with liberal views leaves the country or withdraws from public life allowing Urdu-medium and madressah-educated people to come up, what will happen? After all, during the last 30 years or so we have weeded out the liberal element from Urdu and put in glorification of war, nationalism and martial values in it.

We have also used the idiom of Islam to sacralise our notions of nationalism. We have made Urdu synonymous with rightwing views which go against peace and promote war and India-bashing. If the rise of Urdu brings people with such views to dominance then there will be less space for women, minorities and liberals. Is this what we want?

We should not want this, but the present system is so unjust that it is better to take the risk of making the playing field level rather than risk a revolution by the marginalised. This revolution, I fear, will use the idiom of religion and the feelings which will fire it will come from the anger of the have-nots.

Maybe, we can start a new language policy of providing justice to all, by writing new texts in Urdu and other national languages — texts which promote peace rather than war, tolerance rather than intolerance and the idea of rights rather than the views of male and class superiority.

Then perhaps we can take the risk of promoting a more just policy on the medium of instruction.

WE are Americans, and so until recently, we knew that we were the best. Because so many people wanted to be us, we could act as we pleased — and we did, because we were the Great Exception; we were America the Blessed.

Hence our complacent belief, so long borne out by the facts, that American movies and American brands would always sell. Hence also our comforting faith that the Kyoto Protocol did not apply to us, so that we could spew out all the greenhouse gases we liked, and use a pig's share of the world's resources. (Just this week, I learned of the US's new plan for energy independence: coal plants, subsidised for the next 25 years.)

Being America the Perfect, we invented the doctrine, even before 9/11, that we could seize war criminals in any part of the globe and whisk them off to The Hague. Of course, we insisted that should we ever commit war crimes, we would remain immune to prosecution in that court. Well, after all, how could Americans do any wrong?

Our current administration of torturers (this word sounds so shrill, so preposterous in relation to the America I believe in, that I have to remind myself over and over that it is literally accurate, that this president and his two attorneys general have quite literally legalised torture) has gone further in this direction than I ever could have imagined. President Bush's modus operandi is this: Bull your way ahead. If you meet obstacles, overcome them with arrogant bluster. If this fails, proceed to vicious, mendacious brutality.

I wish I could blame him alone for the degradation of the America I loved. Unfortunately, Americans not only voted for this man, but after he proved himself to be a criminal, they re-elected him. As one of my friends replied when I asked why we should attack Iraq when Iraq had done nothing to us: "Why not attack Iraq?"

We were Americans, you see. Why not do whatever suited our whims?

And now what? "They hate us," we whisper to one another in amazement. In another decade, we might even begin to wonder about the degree of our exceptionality. What if we had to follow the rules that everyone else does?

Well, why not put off that pain as long as possible? It's much more fun to remain the Great Exception.

Alas, while we hunker down behind the drawbridge, awaiting our next 9/11, we don't even take the trouble to be united. Exceptionalism undermines us from within.

Alaskan towns are tilting in the melting permafrost, but who cares down in the Lower 48? Republicans and Democrats hate each other. Automobiles isolate us. Generations of advice-givers have made us believe that profit best defines the successful life, and so the white-collar crooks of Enron and the ghetto thugs who murder as they please celebrate their own exceptionalism against the rest of us.

Exceptionalism may be understandable and even excusable, but it should not be eternally acceptable. All-white juries have unjustly convicted black defendants in this country, and that makes me ashamed; but the notion that a 21st century criminal trial cannot be fair unless at least some jurors are of the same race as the defendant is of a piece with the idea that men and women will never understand each other, that Muslim cab drivers can refuse to pick up passengers who carry liquor and that right-to-life pharmacists can refuse to fill a desperate woman's prescription for the morning-after pill.

Let's pander while Rome burns! I'm not worried; I'll never catch fire. Like each and all of us, I'm my own favourite exception.

––Los Angeles Times