Investment outlook

THE surge in suicide bombings last week which did not spare even Islamabad sparked bearish sentiments in the stock market. The KSE-100 index plunged by 394.10 points on Wednesday which was followed by a steeper fall of another 466.7 points the next day. Amidst volatile trading, however, the slide in share values was halted on Friday on reports of an increase in oil prices and removal of cap on CFS (continuous funding system) on 43 scrips. The market mood gave a clear signal that the worsening security situation could damage the robust business sentiment and the investment climate. Normally, lawlessness and political instability impact adversely on investment, production, export and finally on the overall economic situation. But in the present case, the market has not been unnerved by the political heat and turmoil witnessed over the past few months as shown by a record level of foreign and domestic investment. In fact, in the last fiscal year ending June 2007, investment emerged as the leading factor, contributing to a high economic growth level. A source of comfort for investors is that the fundamentals of economic policies have remained unchanged in spite of frequent changes in governments over the last two decades.

Economic reforms were initiated in the early 1990s by Mr Nawaz Sharif, pursued by Ms Benazir Bhutto and finally speeded up by the present military-led government. Much of the economic growth is market-driven as the regulated economy has been significantly dismantled by liberalisation and privatisation. The status quo in economic policies cannot, therefore, be upset either by political instability or by changes in government. However, it may be added that the current political turmoil is not moving towards a political breakdown but towards the creation of a stable constitutional democracy. But the great threat to the investment climate and economy comes from the extremist forces which destroy peace and challenge the writ of state. So far, unqualified success has evaded official strategies for fighting militancy because military power is being used under a weak political dispensation. After all, an armed conflict is “politics by other means.”

Hopefully, “an all-encompassing strategy” approved by President Musharraf on Friday to combat terrorism with the assistance of moderate religious forces and by extending necessary financial and security support to the NWFP government will prove more effective. The cooperation of moderate religious forces has yielded some positive results and needs to be reinforced. The NWFP government is closer to ground realities in the Frontier and the tribal regions, and its active involvement can certainly help. The latest strategy would have a better chance of success with the oversight of an independent judiciary that would curb the excesses of the law-enforcement agencies that often prove counter-productive. The writ of state will also now be reinforced by the rule of law. From a strategic point of view, the best way to fight militancy is to restore the people’s confidence in the power of the ballot and what it can deliver. The immense power of democracy lies in the electoral mandate and a sovereign parliament. Representative institutions can substantially reduce the space for extremism. Terrorism cannot be eliminated by military force alone. The challenge facing the economy and the country can best be addressed by a representative system and physical force working side by side.

Perils of global warming

ONLY the oblivious can ignore the reality on the ground. Global warming is a fact, not simply a theory, and millions across the globe are falling victim to climate change. Extreme and erratic weather is becoming more frequent by the year, claiming lives, destroying livelihoods and reducing fertile land to desert and saline bogs. A new breed of displaced persons is on the move in developing countries — ‘climate refugees’ who once subsisted on agriculture or the rearing of livestock but who can no longer feed themselves. This shrinking of resources is also increasing the potential for conflict and swelling the ranks of those migrating to cities struggling to sustain existing populations. The severe weather seen in recent weeks has killed nearly 800 in South Asia and over 400 in China, with upwards of two million displaced by storms and floods in Pakistan alone. Parts of Europe have been devastated by massive rainfall that would normally occur over months, not days, while sections of southern Europe and North America have been bone dry, triggering voracious forest fires. The La Nina phenomenon now taking shape in the Pacific only bodes more misery for Asia and the Americas.

Global warming and ecological degradation are hitting Pakistan hard. The Himalayan glaciers are receding by an estimated 30 to 50 metres annually and could be exhausted in 50 years. According to the director-general of the Met department, the Arabian Sea has become warmer by 0.2 to 0.8 degrees Celsius over the last 10 years or so, contributing to “the increase in extreme weather events in our coastal areas.” Tropical cyclones were a rarity in the Arabian Sea but have become more frequent in recent years — last month saw two in less than three weeks, with Sindh and Balochistan taking a battering from which they are yet to recover. Another case in point is the freak ‘hurricane’ that hit Karachi on June 23, the likes of which few had ever seen. In the north of the country, meanwhile, widespread deforestation is causing more and more landslides and flash floods. Much of this wretchedness is man-made and it is up to humanity to change its ways.

Countering plagiarism

ACADEMIC plagiarism is on the rise in Pakistan. It is rampant not only among students but also teachers as exemplified by the recent case of five faculty members at Punjab University who escaped severe penalties on account of the absence of legislation in this regard. Fortunately, the Higher Education Commission is set to come out with a policy next month that would recommend stringent punishment for plagiarists, including the termination of their services. While those who copy others’ academic work and present it as their own deserve no less, it is important that the HEC ensures that there are qualified teachers to replace them so that the studies in a particular university department are not affected and students do not suffer from the absence of teachers. The issue of academic plagiarism must also be viewed in its entirety. The seeds of this scourge are sown much before the stage of higher education is reached. In an intellectually impoverished society such as ours, access to the Internet has provided students and teachers alike with a ready means to copy ideas and essays of others and present them as their own. The ability to think for oneself, to question and to form logical conclusions is thus lost.

Educational authorities must realise this and work towards inculcating sound values from the early stages. Admittedly, it would be difficult — and impractical in the age of globalisation — to discourage the use of the Internet. But students and teachers must be made to see this as a tool of acquiring knowledge, rather than as a means of plagiarism. To this must be added efforts to root out cheating and other academic irregularities which are widespread. Tackling academic deceit at the lower level would mean fewer cases of plagiarism later on. It would also lead to academic honesty among teachers who, after all, have a crucial role to play in the educational upbringing of their students.

Why do we need democracy?

THE Lal Masjid nightmare is finally over and so is the All Parties Conference. But the soul-searching that has just begun will remain with us for a long time to come. If we address these questions correctly and draw the right lessons from it now, there is hope for the future.

If we ignore the aftershocks and carry on doing business as usual, the problems that underlie the surface will not vanish on their own. The next showdown with the discontented sections of society may be uglier and far more costly in terms of national interests.

During 2005-6, I visited the Maldives many times to facilitate a Commonwealth-brokered dialogue between the government and opposition political parties on democratic reforms. Opposition political parties believed that as long as President Maumoon Abdul Gayoom was aiming a gun at the political opposition, a dialogue with the government would achieve nothing.Ironically, this metaphor applies more accurately to the situation in Pakistan where a president is indeed holding a gun in his hand in his capacity as chief of army staff for the last eight years. It is also a double irony that perhaps with the sole exception of Ghulam Ishaq Khan, none of the presidents of Pakistan left his office with dignity.

President Musharraf claims to break from the past by allowing the assemblies to complete their full term, but he has shown no sign of leaving his office voluntarily. He should not stay in office until he is forced by circumstances to leave in disgrace following the precedent of his infamous predecessors.

The recently concluded Lal Masjid operation has once again underlined the point which is often ignored by those in the media limelight and high places. That is, no person, group or institution should be permitted to challenge the sovereign authority of the state by taking the law in his or its own hands.

Regrettably, the military establishment has always assumed that it is exempt from this fundamental principle of democracy. Not only have Pakistan’s past military rulers violated the Basic Law, they have also tinkered with it to evade subsequent judicial trails. True democracy has no room for preferential treatment for one institution over the other, nor does it allow double standards to be applied to different individuals.

The Lal Masjid operation has also exposed the poor performance of the intelligence agencies. Contrary to their reports, there were no top-seeded Al Qaeda militants guiding the siege, no belted suicide bomb squads, no hand-held missile launchers nor any land-mined fields in the Lal Masjid compound.

In the absence of such deadly paraphernalia, it is a shame that about 76 half-trained religious teachers, students and militants, with a limited number of Kalashnikovs and light arms kept the elite commando unit of the Pakistan army at bay for eight days.The authorities should have known each and every person, pillar and beam in the Lal Masjid compound through its intelligence network. If they did not know a public building and its access and cut out points in their own capital city, then either the intelligence agencies failed totally in performing their duty, or there is something missing in the story, namely, that vital information was kept from the authorities to cause them maximum embarrassment in the rescue operation.

If none of this is true, can this inefficiency be ascribed to the fact that our uniformed men have got used to the comforts and complacency of civilian outfits because of their involvement in politics, instead of remaining a professional force concerned only with the defence of the country and attending to extraordinary emergency situations?

If a religious band of extremists can give a tough time to the army for such a long period on its own ground, how can the nation trust the military to defend the country against an external enemy that may have more sophisticated weapons and a superior support base? We might as well adopt a compulsory national defence service for all male adults instead of keeping a large defence force. Is that the reason why our president goes a long way to please those foreign powers that keep asking him to “do more” to achieve their global strategic objectives?

As Imran Khan said recently at the All Parties Conference in London, it is in the nature of pluralistic societies to have their own brand of extremists and militants. They are not specific to Pakistan or the Muslim world. You can find them in India, the UK, the US, Russia and any other country which is trying to grapple with multi-ethnic issues and complex economic and social problems.

There are two ways of dealing with militants. One is the American way — swift military response, no dialogue, massive injections of economic assistance for short-term results, but a huge collateral damage and more long-term instability that prolongs the conflict instead of subsiding it.

The other is the non-American way — remaining vigilant but patient, understanding the core issues and tackling them one by one, talking to the extremists with the aim of winning hearts and minds and preserving the law, democracy and human rights. The latter approach is less visible but more enduring. We need not follow the American way in dealing with problems that reside inside Pakistan.

In a true democracy, constitutions are written to be followed in letter and spirit; these are not amended every now and then to facilitate the long reign of dictators. A functioning democracy which is built on the Westminster model relies on parliament to enact legislation; it does not use the executive and the cabinet to promulgate ordinances to bypass legislature and introduce laws through the back door.

In a credible democracy, political agreements are honoured at all costs; these are not changed at the last minute to save a government. And above all, mature democracies are prepared to dump individuals through such instruments as voluntary resignations and democratic rotation of leaders to keep institutions strong; such societies do not sacrifice institutions to serve the whims of the ruling oligarchy. Apply this criterion to Pakistan one by one and judge for yourself where do we stand in scoring a pass mark in this democratic test.

The judiciary is one institution which was never affected by military coups. Yet, the judges who presided over the judicial case against the first martial law in Pakistan made the fundamental mistake of legitimising it under the infamous doctrine of state necessity. The higher courts that heard the cases of subsequent martial laws did not challenge this theory.

The causes of the judiciary’s compromise with the military rulers lie in two streams — the stream of tradition and the stream of convenience. Traditionally, the judiciary has never been independent in an Islamic polity. In fact, during the glory days of Islamic empires when Muslim armies came knocking at the gates of Europe and Central Asia, the caliph appointed only those chief justices who were prepared to back his policies. There were, of course, exceptions to this rule. But by and large the primary role of the chief justice in a caliphate was to provide legal sanction to the acts of the executive.

Although Pakistan has a modern judiciary far removed from those forlorn days, the judiciary has traditionally continued its role of backing the executive (its recent verdict in the Chief Justice’s case being an important exception). Little wonder then that in their times, Justice Cornelius and Justice Dorab Patel did not feel the need to follow this archaic tradition because they were not Muslims.

The other reason why the judiciary favoured the executive is rooted in convenience. The judiciary chose to support military takeovers in Pakistan on the assumption that if it did not do so, it too would be replaced by military courts.

The judges may have been partially right because they saw how the military permeated the administrative, executive, legislative and political echelons of society under martial laws. But they did not realise that in saving the judiciary from military intervention, they were legitimising a rule which had no legal basis and could not last long on its own.

What is the point of having Article 6 in the Constitution if a court cannot invoke it to deter any one person, group or institution from violating the primary law of the land.

There is increasing demand for a full public enquiry to be launched into the Lal Masjid incident. It is only proper that a commission should be constituted independently under parliament in order to answer the scores of questions that are being asked about the preparedness of the government for dealing with militancy, hostage-taking, and the build- up of small arms in civilian institutions.

It is also important for the independent enquiry to focus on the larger context in which the Lal Masjid episode occurred. What can the state do to balance Islam with secularism, prevent social decay and continue to modernise itself, and manage conflicting views and expectations of people in a pluralistic society?

How can the human rights of prisoners be guaranteed to inculcate a sense of dignity? How can double standards be avoided in relation to treatment of persons, whether supporters or opponents of the government, who are involved in corruption and other criminal cases?

Can police be better trained to exercise its functions in a manner that gives full legal protection to the accused so that those arrested feel confident that they can defend themselves before the courts?

The independent enquiry should focus on lessons to be learnt on restoring the credibility of the government and bringing democratic values.

If this episode is allowed to pass quietly into history, the danger is that many other Lal Masjids will be hatching under the sun to challenge the authority of the state in more chilling ways than what Pakistan has so far witnessed. Wishing it away as paranoia without taking corrective positive action will not help.

The writer is a former special adviser for political affairs in the Commonwealth Secretariat, London.