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DINA
DAWN - the Internet Edition


August 02, 2007 Thursday Rajab 17, 1428


Editorial


Tighter monetary policy
Justifying the ‘deal’
Another Lal Masjid?
Benazir and the enemy within



Tighter monetary policy


HAVING missed the inflation targets for the past three fiscal years, the State Bank continues to tighten its monetary policy which has resulted in the discount rate rising from seven in April 2005 to 10 per cent as announced on Tuesday. While the central bank takes credit for reducing the non-energy and non-food inflation rate in the last fiscal year, its positive impact on consumer price index has been offset by the impact of “persistent” and “worrisome” high food prices. The food inflation is attributed to supply-demand bottlenecks, likely to worsen in flood affected areas because of disruption in production and supplies. According to a ministry of finance adviser, two million tons of wheat are lying with hoarders and parked in open spaces and petrol pumps. Surprisingly, the latest strategic shift in monetary policy does not include selective credit controls on financing of essential commodities that constitute the bulk of a poor person’s needs. The commercial banks could have been stopped from financing the speculators. But suspecting that cheap refinance facility is being misused to manipulate prices, the central bank has warned the commercial banks that if the credit is used for purposes other than intended, they would be penalised.

Apart from the supply-demand bottlenecks, the State Bank has identified three major factors contributing to high inflation in the last fiscal year — an unexpected increase in foreign exchange inflows, the government’s inflationary borrowings and an unanticipated surge in refinancing leading to a high growth in broad money. A significant portion of these inflows was for budgetary support and much of it did not help boost the country’s production but financed an unsustainable level of annual imports of over $30 billion. These inflows also depressed bank deposits and domestic savings rates besides creating major imbalances in the economy and promoting old-fashioned mercantilism. Responding to these challenges, the State Bank, under a new long-term facility, will now provide 70 per cent of the funding to participating banks for the purchase of machinery and plants for export-oriented projects. The monetary policy measures are also designed to encourage banks to mobilise deposits by opening branches in rural areas and to provide 30 per cent of the refinancing facility from their own resources. The cash reserve requirement has been reduced to zero from three per cent for all deposits of one year or more to encourage resource mobilisation of term deposits.

The lenders and borrowers will also get some relief from arbitrary decisions by banks in respect of interest rates, fees and charges and penalties for failure to maintain a minimum balance in deposit accounts. The central bank expects the government to evolve a debt strategy which is non-inflationary and to retire a debt of $62.5 billion during this fiscal year. It has advised the government to raise funds worth Rs100 billion from long-term Pakistan Investment Bonds and Rs30 to 40 billion from Sharia compliant papers. Finally, it is also looking forward to quarterly ceiling on government borrowing. While the July-December 2007 monetary policy may be an improvement on the previous ones, it does not hold much promise for combating food inflation or the quality of economic growth, made questionable by growing imbalances and high social costs. Too much of technical details and a series of statistics churned out by official economists tend to blur the bitter reality. Much more needs to be done.

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Justifying the ‘deal’


THE ambiguity is understandable. In effecting a deal that could salvage their faltering careers, both President Musharraf and Ms Benazir Bhutto must engage in tedious spadework that does not lend itself to ready explanation. The president’s yes-men, the PML-Q headed by the Chaudhrys of Gujrat, are understandably rattled. While the influential ones might still be able to hold their own in a free and fair election — for reasons of biradari or financial clout, more than anything else — the rank and file of the Q-League is not so favourably placed. Many amongst them are incapable of winning a fair election, at least on the PML-Q ticket. Little wonder then that the PML-Q is anticipating a tidal wave of defections to the PPP which, true to form, will undoubtedly welcome all deserters with the possible exception of Faisal Saleh Hayat. The PPP also has a monumental task on its hands. Its chairperson has to somehow justify a pact with someone whom the party has demonised all along. A covenant with the president also means a deal with the MQM. Try selling that idea to party workers whose comrades were gunned down on May 12. The disaffection is not restricted to supporters and activists of the PPP. At least two senior leaders are said to be so disgusted with this fundamental compromise that they are considering quitting the PPP despite having seen it through thick and thin since the seventies. The president, they feel, needs the PPP more than the party needs the general.

Be that as it may, what else is possible, or even desirable, at this critical juncture in the life of the nation? Genuine democracy, for better or worse, is not possible without bringing on board the PPP, the only truly national and by far the most popular party in Pakistan. Free and fair elections, however, are not possible without a green signal from the establishment. Somewhere along the line the twain must meet to counter the forces of extremism. That is the single biggest threat facing the country. This is the time for all progressive forces to think about the country, not just themselves.

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Another Lal Masjid?


WHO knew that history would repeat itself so quickly? On Sunday gunmen occupied a shrine in Ghaziabad in the Mohmand Agency and announced their decision to continue Lal Masjid cleric Rashid Ghazi’s mission. How the government reacts will tell us what lessons it has learnt from the Lal Masjid episode. For instance, had the government reacted differently to the women students of Jamia Hafsa who occupied a children’s library in Islamabad way back in January, perhaps the situation would be different. Instead, Lal Masjid is now a symbol of obscurantist resistance and the government finds itself faced with the same dilemma, this time in a tribal agency that has been wrought with unrest for the past few years. The government has always found it difficult to extend its writ. Today, it is being confronted by 60 or so militants who want to enforce their own version of Islam there. They occupied the shrine of Haji Sahib Turangzai and renamed it the Lal Masjid, its leader vowing to continue Ghazi’s mission “even if it means sacrificing lives”. The only positive element in this is that the shrine’s caretakers have reacted sharply, saying that the gunmen have no right to occupy the shrine of a freedom fighter who would have never occupied a place of worship. They have asked the gunmen to vacate the premises and elders have been called in to negotiate a settlement.

It is good that the community, even if small in numbers, is standing up to the bullies and does not subscribe to extremist views of the Lal Masjid variety. They are determined to settle the issue themselves which is also a positive development. However, timing is of utmost importance and negotiations must not be allowed to drag on. The government must stand firmly behind those who want a peaceful solution to this problem.

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Benazir and the enemy within


By S.A. Qureshi

THERE is much speculation regarding the PPP’s flirtation with the military ruler(s) of Pakistan. In an ideal situation, the people of Pakistan would emerge from their homes out on to the roads, determined to restore democracy.

Led by a combined opposition, they would surround the garrisons, the presidency and the provincial seats of governmental power in a peaceful manner.

They would wave Pakistani flags and party flags together while the media filmed them. Irrespective of the military’s might, they would stay put and force the military ruler to abdicate.

The combined opposition would then, under the charter of democracy, nominate an interim government, which after fair elections would hand over power to the winning party. Everybody would live happily ever after. Imran Khan warms the hearts of every right-thinking citizen watching Geo TV when he paints this picture.

Unfortunately, attractive as it is, this picture is a mirage. It strikes me that the last time we found Imran Khan guiding us on a major issue was when he welcomed Gen Musharraf following the 1999 coup and the packing up of democracy as it stood then. Today, he pleads an error of judgment on that count.

The truth is that today when Nawaz Sharif, Imran Khan and a number of moderates get cosy with the MMA on the basis of what they believe is a principled stand, they are committing an even greater error of judgment.

They must realise that the real power of the MMA does not come from the Maulana Fazlur Rahmans and the Qazi Hussains of this world. These leaders are just acceptable faces for the extremists in the ranks of the Islamist parties. Unfortunately, as the Aziz-Ghazi brothers in Lal Masjid found out, if the religious right ever comes to power, those like Qazi Hussain and Fazlur Rahman will find themselves irrelevant and hostage to extremist practitioners of the ideology they preach.

For people like Imran Khan, the outlook will be even worse. He would, good man that he is, stand up and be counted when the Islamic extremists walk the streets of this country to close down the free media and get rid of fundamental freedoms. It would not be surprising if he then found himself in court accused of past acts of immorality and facing a harsh punishment.

The only way Pakistan is likely to fall to an MMA government would be if the MMA hid itself inside an opposition alliance featuring figures like Imran Khan and Nawaz Sharif. This could happen either through the electoral process or in the form of a PNA-like movement.

Irrespective of how this happens, people like Imran and Nawaz Sharif will end up very much like the Mensheviks did at the time of the Russian revolution in 1917. The Mensheviks and the Bolsheviks were the two factions of the Social Democratic Labour Party in Europe which aimed to bring the socialist revolution to the world.

Amongst other doctrinal differences, the Mensheviks were more given to working within the system or, let us say, were ideologically less extreme compared to the Bolsheviks led by Lenin. Victor Serge wrote about the Mensheviks in his autobiography, ‘Memoirs of a Revolutionary’ (1945) and I quote:

“The Mensheviks seemed to me to be admirably intelligent, honest and devoted to Socialism, but completely overtaken by events. They stood for a sound principle, that of working-class democracy, but in a situation fraught with such mortal danger that the stage of siege did not permit any functioning of democratic institutions.”

It is not surprising that the description appears to fit Nawaz Sharif, Imran Khan and other principled politicians today. Unfortunately, simplicity has never been held up as a legitimate mitigating factor for leaders in the court of history. The real enemy within must be recognised and confronted.

There is now no denying the fact that there is an extremist Islamic ideology godfathered (inadvertently perhaps) by Pakistan’s military which is spreading across Pakistan. In essence, this ideology propounds the view that:

(a) Muslims are no longer pre-eminent and stand divided because they do not adhere to the true teachings of Islam;

(b) any Muslim society can only be successful if it reverts to such teachings as set out in the Quran and Sunnah; and

(c) the use of any amount of force to reach this goal is permitted and such force is described with the emotional word “jihad” or holy war.

The simplicity of this message is attractive to most Muslims who have grown up on a diet of past glories and future destiny. But it is untrue. The practical application of this ideology, as we know from the experience of Taliban-ruled Afghanistan and our current NWFP government, has little to offer other than social regulation of sexual mores by the state (directed primarily at women) and brutal, ruthless punishments for minorities (both Muslim and non-Muslim).

Despite being flawed and not being able to stand up to scrutiny, such extremist ideology, much like Nazi terror, is potent, attractive and winning adherents because it is being pitched to people living in a thieving state which neither promises an alternative nor provides security.

This ideology is no different from what all the mainstream Sunni parties in the country have advocated and preached through their network of proselytising groups and madressahs which received (and continue to get) generous state sponsorship by the military under a Zia-formulated policy.

As a result, we have a number of people who are already sensitised to this ideology or who are taken in by the romance of the divinity attached to it. In short, they are unable to question the ideology in any rational manner despite it being obvious that such an ideology will not take us to our destiny.

As a matter of fact, if it ever becomes prevalent all it will do is destroy another three or four (if not more) of our future generations and result in prolonged sectarian civil war in the country. The world will take out our strategic assets and move on. We will be left joining a host of failed states like Iraq or Somalia struggling with continuing strife.

Benazir Bhutto, like her father, reads political situations well. She understands that at this time it is the evil within that threatens the country more than ever before. She is also smart enough to understand that while the PPP is a popular party it does not have an armed wing that can fight this evil on the streets. She needs the military if she has to confront the terror sweeping across the fair face of Pakistan. She must, however, be painfully aware that when dealing with the MQM, the generals double crossed her. They used her to get the advantage and then once the MQM Frankenstein was chained they ejected her.

The only reason the generals are prepared to listen to her again today is that, much as they loathe both her and the people she represents, they are looking at a monster ideology which they realise is threatening Pakistan’s current stakeholders (of which they are, unfortunately, the largest group).

The question for the generals is: who do they fear more — a democracy with someone like Benazir Bhutto heading it, or an extremist Islamic ideology which, if it takes over, will destroy both them and Pakistan? It appears to be a no-brainer for them to opt for Benazir. They will do so on the presumption that once she has delivered they can get rid of her.

For Benazir Bhutto, the available options are less palatable. She realises that if she joins the MMA to defeat the military on the streets, the vacuum will result in the extremists using their armed muscle to appropriate Pakistan. On the other hand, if she returns to power as an elected leader after providing the military with an exit strategy, she will have to combat the terror being currently unleashed on the people of Pakistan in the name of a misguided Islamic ideology.

Much like in the case of the MQM operations she will end up facing a hostile media and an intrusive judiciary in the battle against the potential martyrs who will regularly be unleashed by the Al Qaeda. Her social programme will be overshadowed and her ability to deliver on it will be constantly undermined. She and democracy will constantly be at risk from the generals who will try to get rid of her at the first sniff of victory.

However, as the single most popular Pakistani leader she has to make a choice or quit. It appears she has chosen courageously and correctly. If this means the first step is to engage the military and ditch the myth of a combined opposition including the MMA, then so be it.

As long as she clearly discloses her hand (which she has done) and goes to the people of Pakistan in a free and fair election for their approval (which she ostensibly intends to do), there is no question of violating any principles. The innuendo of deals and jibes of compromise are uncalled for.

The battle lines in Pakistan are clearly drawn. Irrespective of what one might wish it is going to be a bloody battle, and not one for the faint-hearted. Zia’s legacy has taken Pakistan to the brink — if Benazir is able to pull Pakistan back she will have avenged her father’s death and chosen her place in history correctly.

It is now time that Nawaz Sharif, Imran and all other moderates in the country are not led astray by the temptation to confront the wrong enemy. They must put their weight behind her. This is a battle the people of Pakistan simply must not lose.

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