Income equity & politics

POLITICS is mostly about economics. Different groups in society and various regions in a country compete with one another to maximise their share in the wealth that an economy has accumulated over time and the income that the accumulated wealth generates every year. For countries that have widening income disparities, public policy must be directed towards narrowing them.

A recent report published by the Asian Development Bank places Pakistan among the countries in Asia with a relatively balanced distribution of income. This is a surprising conclusion; it goes against the belief of several well-informed analysts according to whom there has been a significant deterioration in income distribution at least in recent years.

While this is not the place to discuss in any detail the findings of the ADB report, the fact remains that income distribution — both personal and regional — have become political issues and will need to be addressed by the political parties that hope to compete in meaningful ways in the promised elections.

It is usually difficult to redistribute wealth unless a revolution occurs and the groups that had a relatively smaller share in the economy gain political ascendancy. This is what happened in the Soviet Union, China and Vietnam after successful revolutions in those countries.

Redistribution of wealth was also promised by the Pakistan People’s Party in the election manifesto of 1970. That did not happen for the simple reason that those who made the promise were themselves not committed to carrying it out.

In a developing country such as Pakistan, a great amount of wealth is accumulated in the form of land, the distribution of which is highly skewed. A very large number of people who work on the land do not own it and draw only the amount of income which provides subsistence living. Land distribution, therefore, is the best way of introducing some equality in the distribution of income.

However, it is also the most difficult measure to adopt since large land owners also wield a great deal of political power. Even the military government of President Ayub Khan which, at least initially, was not beholden to the landed aristocracy, was able to introduce only marginal land reforms. The government of Zulfikar Ali Bhutto, having promised much more, was able to deliver even less.

What had made it possible for India to work its democracy was its ability to undertake serious land reforms soon after the country achieved independence. It was able to do that since the landed class wielded relatively little political power in the Congress party compared to the urban middle class professionals.

The Indian land reforms touched the countryside as well as the country’s urban areas. India was thus able to create a political field that was considerably more level than the one ploughed by Pakistan’s politicians.

The approach towards wealth distribution on which Zulfikar Ali Bhutto’s PPP spent a great deal of political and bureaucratic energy was in the sectors of industry, commerce and finance. Large-scale enterprises in these areas of economic activity were placed under government ownership on the assumption that the state would be able to distribute the incomes produced by these assets much more equitably than their private owners.

That, of course, did not happen. In fact, as has been demonstrated over and over again in many parts of the world, nationalisation of private assets hardly ever leads to better income distribution. The outcome is usually economic inefficiency. That is precisely what happened in Zulfikar Ali Bhutto’s Pakistan.

It is easier to change the pattern of income an economy produces rather than the wealth it has accumulated. In mature economies and political systems, it is the battle over the distribution of current incomes that produces political competition. Income redistribution can be done in a number of different ways that produce political competition.

The two most obvious ones are the use of tax policies and the reshaping of government expenditures. As Pakistan’s politicians were to discover, increasing the share of taxes in gross domestic product was as difficult as undertaking land reforms.

The resistance comes from both rural and urban areas. It is a good indication of the amount of political influence the landed aristocracy wielded in the councils of the PPP that, under the Constitution of 1973, income from land was exempted from income tax. In fact, agricultural taxes were made a provincial subject in the knowledge that the large landlords would have even greater power in the provincial assemblies than in the national legislature.

During my brief tenure as a member of the interim government in 1996-97, with responsibility for the portfolios of finance, planning and development, I had to work hard to introduce a small tax on agricultural incomes. In getting the proposal through, I ran into stiff opposition from the chief ministers of Sindh and Balochistan who were both large landlords.

Since it is normally the national and provincial legislatures that are responsible for tax policies and for determining how governments would spend the revenues they generate from taxes, various groups operating within a society try to gain as much power as they can in the legislative branch. This is best done during elections.

Politics, therefore, is not only about economics. It is also about conflict among groups, regions and other divisions that define societies. In mature systems, this conflict is played out during elections and also on the floors of various legislatures that constitute a society’s political system.

Underdeveloped and backward societies go through armed conflicts for as long as they don’t develop the mechanisms for resolving the differences among different segments of society.

Pakistan has already been through one civil war when the political system that existed then failed to accommodate the very sharp differences that had surfaced between two competing forces. The elections of 1970 produced a very strong mandate for East Pakistan’s Awami League to work for provincial autonomy.

The same elections also gave the mandate in the country’s western wing to a new political force to work towards greater social justice, economic equality and the political empowerment of the poor.

That force was the Pakistan People’s Party led by Zulfikar Ali Bhutto. These two mandates could not be reconciled within the existing political framework. The result was civil war.

As societies develop, politics goes beyond economics and resolution of conflict. It begins to deal with the people’s expectation about good governance. People vote in the elections, watch the proceedings in the various legislatures, and watch also the way the executive behaves in order to obtain good governance from the leaders that occupy positions of power.

When the leaders fail this test, the citizens react in three different ways. These were elaborated upon by the economist Albert O. Hirschman many years ago when he came up with the phrase “exit, voice and loyalty” to encapsulate the spectrum of citizens’ reactions to their disappointment with the conduct of their leaders.

In spite of disappointment, they may remain loyal to the leaders and the party they support. This happened in the case of the constituency that produced electoral success for the PPP and its first leader, Zulfikar Ali Bhutto, in the elections of 1970. People in Pakistan refer to the loyal supporters of a political party or a leader as a “vote bank” — this is the group of constituents who can be expected to continue to give their support no matter how the leaders conduct themselves.

The Americans call the same set of loyal supporters, “the base”. Working the vote bank or the base becomes a major preoccupation of some leaders, in particular those who don’t recognise that producing majorities requires a broader appeal.Hirschman’s second response was labelled as “vote,” when citizens shift their vote to a different set of leaders in the expectation of producing change. This reaction produces “swings”. Pakistan saw a great deal of these in the 1990s when the electorate moved their support from one party to the other in the hope that good governance would result from the messages they were sending to those who had wielded power.

The two mainstream political parties — the Pakistan People’s Party and the Pakistan Muslim League — were given two opportunities within the space of a decade to redeem themselves in the eyes of the voters. Both failed, making way for yet another intervention by the military.

“Exit” results from extreme frustration with the political and administrative structures that are unable to provide the quality of governance demanded by the populace, and may take several forms.

Voters may simply stay away from the polling booth. Or they may leave the system altogether. In extreme cases, they may choose to migrate or support those who would like to completely restructure the political system. It is the latter response that leads to revolutions and armed conflict.

To Hirschman’s scheme, we should add another, relatively recent phenomenon. This is the withdrawal into stateless structures by those who are terribly frustrated with the system as it currently operates.

This is happening in a number of Muslim societies in which the political field has been captured by a few groups more interested in preserving their own power, position and privilege than working for the common citizen. This withdrawal has taken a small number of people to stateless groups that are advancing their agendas by creating chaos in the societies from which they have been alienated.

In a recent book, the economist Alan Krueger of Princeton, has argued that it is not the poor who have turned to groups such as Al Qaeda but the relatively more educated young who feel politically disadvantaged.

In other words, dealing with the rise of religious extremism occurring in many Muslim societies, including Pakistan, requires not only a well thought-out response to the needs of those who are poor and economically disadvantaged. There is an equally urgent need to bring into the political domain those who feel that they have been abandoned by the systems against which they eventually rebel.

Krueger’s careful analysis of the socio-economic background of scores of recent suicide bombers reveals that a vast majority were not poor and desolate but educated and reasonably well-to-do. Can Pakistan contain these frustrations? There is, in other words, a great deal at stake for Pakistan as it approaches another set of elections within the next few months.

Given the way economists have begun to look at politics and elections, what conclusion would I draw from the current situation in Pakistan? To do that it would be appropriate to continue with the story I began to tell in the first two articles of this series.

In those I discussed the way the PPP, one of the two mainstream parties, gained power in the 1970s but failed to deliver on what it had promised. Next week I will look at the changes that the PML tried to institute when it came to power in 1997, for the second time in the 1990s, and how that party is currently structured.

Building bridges with Afghanistan

WITH the exception of brief interludes, Pakistan’s relations with Afghanistan have been problematic for historical and geo-political reasons. This distrust, at times bordering on hostility, continues to date, although the steps taken by the Bush administration and European countries has somewhat helped in improving the working relationship of the two countries.

The convening of the recent grand jirga was another effort in that direction.

Regrettably, what the world has conveniently forgotten is the phenomenal support given by Pakistan to Afghanistan during the Soviet occupation, and that had far-reaching impact on its social and political fabric. Hosting more than three million refugees then and with nearly two million of them ever since would be burdensome even for strong economies.

Fortunately, at the people’s level, cultural, ethnic and religious links bind the two nations together with Pashtun nationalism being a major factor.

The distrust between the two governments stems from several factors. Firstly, successive Afghan governments have not reconciled themselves to the reality of the Durand Line as the official boundary between the two countries. Secondly, during periods of the Cold War, Afghanistan remained aligned to the Soviet camp while Pakistan chose to be an ally of the US and an active member of security pacts.

The India factor was another bone of contention and even today plays a negative role in their relationship. Islamabad has expressed its deep misgivings against India’s establishment of several consulates in proximity to its borders and perceives these to be indulging in activities detrimental to its national interests.

Pakistan’s relatively large size and resource base in comparison to landlocked Afghanistan’s create the ‘bigger neighbour’ syndrome in the psyche of the Afghan nation. The infamous doctrine of “strategic depth” floated in the early 1990s by the security establishment of Pakistan, despite losing its relevance, continues to trouble Afghanistan’s policymakers.

The reality on the ground is very different with the Taliban now creating in reverse an “ideological depth” in Pakistan. Be that as it may, we are partly responsible for strengthening if not creating the Taliban in the first instance.

In the current scenario, a major source of friction between the two countries is Afghanistan’s allegation that Pakistan is supporting cross-border infiltration and assisting the Taliban and militant forces, although since the last few months this mantra has been more muted. The US sides with Afghanistan and keeps pressuring Pakistan to “do more”. Islamabad vehemently denies these allegations and considers it a tactic by Kabul and the US in order to divest itself from its own responsibilities and failures.

Allegations and counter-allegations apart, never before has there been a greater urgency for the two governments to turn a new leaf in their relationship. The two countries face a serious challenge to their integrity and future prospects by a major resurgence of the Taliban and militant forces on one hand and the loss of sovereignty by the presence of US and other foreign forces that has given rise to a strong nationalist impulse.

Moreover, state structures in Afghanistan, which were already very weak, have collapsed. The US, the International Security Assistance Force and the Afghan security forces have so far been unable to provide Afghanistan with the security which is critical for developing national reconciliation, governance and economic growth. As a consequence, the country is highly factionalised and remains under the dominance of several power centres — the drug barons, the Taliban and other militant groups.

In Pakistan’s tribal belt (Fata), the government’s writ has traditionally been marginal, but now, especially in Waziristan and Bajaur, it is non-existent and the militants hold sway. Fata in the last 60 years has been grossly neglected by successive governments and Pakistan’s major role in the Afghan jihad and now its deep involvement as a frontline state in the war on terror has further radicalised the area.

Pakistan’s role in Afghanistan will be largely determined by the progress made in stabilising the tribal belt and improving governance in the NWFP and Balochistan. Security of the two countries is thus mutually intertwined and the best approach to combat insurgency is through close cooperation and a unified vision for the region.

The conclusion of the US National Intelligence Estimate that Al Qaeda is reorganising in the tribal belt has once again shifted international attention to Pakistan. President Bush and Democratic presidential aspirants are threatening to undertake unilateral military intervention in the tribal belt if there is “actionable intelligence”.

Surprisingly, 15 months ahead of the presidential elections, Pakistan has become a major foreign policy issue among presidential candidates. There are several factors for which Pakistan is kept in focus. By blaming Pakistan, the US can partly cover its failures in Iraq and Afghanistan. Besides, there are genuine fears that US homeland security could be seriously threatened if Al Qaeda reemerges in our tribal areas.

Pakistan also has nuclear assets and the world would be very apprehensive if the country drifted towards instability. The geo-strategic importance of Pakistan is related to the country’s regional proximity to energy resources in Central Asia and the Middle East. This, together with the fact that it borders China, is another reason for the heightened interest in Pakistan.

In the event that the US does take unilateral action in the tribal belt or Balochistan, it will inflame the passions of the people and give rise to strong anti-American sentiment. It would also destabilise the government and afford an opportunity to Al Qaeda to win local support.

There is no doubt that militancy in Fata is also indigenous. Independent observers say that there exists an infrastructure of extremism and terrorism that is protected by powerful elements in the tribal belt. These structures were formed in Pakistan to fight the Soviet occupation of Afghanistan and have not been fully dismantled. They have again emerged as power centres. Pakistan will have to step up its efforts to counter these forces.

Despite the carrot and stick wielded by the Bush administration, there is growing realisation in the US that this asymmetric war can only be won through winning “hearts and minds” and not through the application of military force alone. Also, the hardcore elements have to be separated from the rest of the community. The US is providing economic assistance of nearly a billion dollars for the economic and social uplift of the tribal belt and Pakistan is supplementing this amount with its own funds. This combined with political reforms that would allow political parties to operate freely in the tribal belt would, in the long run, help to curb extremism and militancy.

The other reason for the resurgence of the Taliban in both Afghanistan and Pakistan is poor governance and massive corruption. Militancy is also on the increase owing to the wide gap between how the war on terror is perceived by the US and Pakistan’s ruling elite. Washington is obviously more concerned about the global nature of the threat as opposed to Pakistan’s view of it as affecting internal stability and radicalising the region.

A convergence of views is desirable if the terrorist threat is to be addressed. This becomes even more important in the light of the recently enacted legislation which bars Pakistan from receiving US assistance “until President Bush finds Pakistan is making demonstrable, significant and sustained progress towards eliminating support or safe haven for terrorists.”

This legislation has come under severe criticism in Pakistan and there is a widely held belief that the US is not appreciative of Pakistan’s efforts and continues to advance its short-term interests at Pakistan’s expense.

There is also a huge gap in perception as to how the people view the war on terror and President Musharraf’s vision of it. The military government that has been considerably weakened in recent times will not be able to combat militancy. Only a representative government with the backing of the nation and the tribal people will be in a position to fight extremism and play an effective role in normalising relations with Afghanistan.

Based on the India-Pakistan experience, there is a need for initiating confidence-building measures between Afghanistan and Pakistan. These should be in the areas of peace and security, trade and economic matters and political and cultural issues.

During the recent jirga, both countries expressed an interest in joint border management. This project needs to be undertaken soon to bring about better coordination in controlling the infiltration. Political and economic institutional linkages should be developed between the two countries. Dialogue with the Taliban and other militant forces as recommended by the jirga should be undertaken.

In addition, closer coordination and harmonisation of policies between the two militaries will contribute towards countering the insurgency effectively.

The writer is a retired lieutenant-general.

Pakistan can work it out

I FIRST met Benazir Bhutto when she was in her last year at Oxford. Wearing a tweed suit and silk headscarf, she looked the perfect Sloane Ranger. When I last saw her she was the prime minister in the Islamic Republic of Pakistan. She still wore a headscarf, but the suit had been replaced by a shalwar kameez.

The change of style seemed symbolic. Between our first and last meeting, I came to the firm conclusion that — whatever the truth of the allegations that her enemies have made against her — she represents Pakistan’s best hope of taking its place among the democratic nations of the free world.

I think that still. Someone has to build a bridge between Islam and what its most devout adherents regard as the degenerate universe outside its theological boundaries. Bhutto has always been willing to attempt that daunting task.

Last week on Newsnight she talked about returning home. If she does, the reception that she receives will demonstrate how far along the road from dictatorship Pakistan has travelled since it became an independent nation.

One day, almost 20 years ago, I was waiting in Nawaz Sharif’s outside office when a member of his staff told me that our meeting must be delayed. Courtesy required the prime minister to take his place in parliament to hear the leader of the opposition make an unexpected contribution to an important debate. Would I like to sit in the public gallery until he was free?

I took up the offer and listened, with awe and wonder, as Bhutto attacked the proposal to introduce Sharia law into all of Pakistan. Her speech ended with a bitter attack on the mullahs who were leading the campaign for what they claimed was true Islamic justice.

Where were they, she asked rhetorically, during the battle for independence? Whether or not she was right to say that they had always sided with the imperial Raj, the force of her denunciation sent shivers down my spine.

The night before I heard her denounce the fundamentalists, Bhutto and I had both been to dinner with the British ambassador, who was to become high commissioner when, thanks to her, Pakistan rejoined the Commonwealth. The head of Pakistan International Airlines, a former air chief marshal, was among the guests, and I could not resist the opportunity to ask him a contentious question. Earlier in the day I had been told — whether correctly or not I cannot say — that, according to Islam, the sky is a blue carpet held over the Earth by Allah, and the stars His light which nothing could obscure.

I thought that the idea was much more attractive than the explanation that I had been taught in schoolboy physics, but I could see that it might raise problems for devout believers. So, as the dinner progressed, I raised the subject of pious pilots. How did they deal with the idea of the carpet in the sky? There was, the airman gravely replied, no difficulty. “They believe one thing up there and another down here.” Bhutto, in her most serious voice added: “These things can always be worked out.”

Years later, when Bhutto was prime minister, I saw an example of how the working out was done. I was due to see her at 10 in the morning, but the meeting was postponed until after two in the afternoon.

When I explained that I had planned to leave for home shortly after lunch, I was told that a seat would be found for me on the evening flight.

The prime minister was determined I should visit a police station at which all the officers were women. Bhutto spoke about it with great eloquence. “Think,” she said, “about what it demonstrates. Women of authority. Women doing work traditionally done by men.”

I was so impressed that, on the way out to the airport, I jabbered on about the progress of emancipation to the civil servant whose job it was to smooth my passage through immigration.

Had no male officers objected? On the contrary, he explained, an all-women police station avoided male constables suffering the indignity of taking orders from female inspectors. These things, I thought, can be worked out. There is no one more likely to work them out than Benazir Bhutto. —Dawn/The Guardian News Service