THE lunch hosted by Mr Asif Zardari for the newly elected members of the three leading parties on Feb 27 may well be remembered as a landmark in the long awaited transition to a democratic dispensation in Pakistan.

The optics were perfect; the host, Mian Nawaz Sharif and Asfandyar Wali Khan struck the right notes in the higher register of statesmanship and, more importantly, the leaders sat down with a jurist of impeccable integrity and knowledge to come to grips with the debris left behind by the tornado that struck Pakistan’s constitutionalism on Nov 3, 2007.

Pakistan’s military rulers have always excelled at political demolition but invariably turned out to be singularly inept at putting together viable and lawful alternative state structures. This unenviable task falls to the lot of the much maligned politicians and that too in highly unpropitious circumstances.

The squalls that rocked the state on Oct 12, 1999 and in the form of the 17th amendment inflicted much damage. Then, the catastrophe of Nov 3 put all salvaging efforts beyond the capacity of any single party. In another cataclysmic hour, Zulfikar Ali Bhutto reached out to every school of thought to restore a grundnorm to the nation.

The existing distortions in that historic but half-alive Constitution present a nightmare and demand the exercise of the highest form of political wisdom and legal expertise. The process of eliminating them by creating a new interface between politics and law has just begun. One hopes that despite his incomparable legal knowledge, Fakhruddin G. Ebrahim will be able to invite the finest minds to undertake this daunting and noble task. Let there be no mistake. We are resurrecting a state that all but perished.

The conventional view that coalitions, by definition, make for weak governments is not borne out by the Indian experience or that of several European states where proportional representation often leaves no other option. Pakistan’s present crisis is characterised by the bitter harvest of constitutional violations, growing imbalance between a power-hungry centre and the handicapped federating units, uncontrollable violence by ever-proliferating bands of extremists and, above all, by a rapidly rising table of sub-surface social anger at glaring inequalities of income and opportunity.

A reasonably broad-based coalition government may provide a healing touch. There is no great virtue in a two-party system anymore as, for quite some time to come, regional aspirations will deepen particular identities of the constitutive elements of a diverse nation. The greatest achievement of the three top leaders present at Mr Zardari’s lunch is that they successfully persuaded their followers that these identities were perfectly compatible with an overarching national identity.

This election could have greatly aggravated the centrifugal forces. By creating hope of social and political justice in a united Pakistan, these three parties —PPP, PML-N and ANP — have largely pre-empted that threat.

The victors must address the economic distress of a vast majority of our people with the same earnestness as the political and constitutional issues. Under the Musharraf-Shaukat Aziz elitist view of neo-liberal economics they have mostly been exposed to the dark side of globalisation with only a small minority being able to use it positively for upward mobility. The trickle- down promise was never more of a mirage as during their management.

Scratch the surface and lurking just beneath the protest against the humiliation of the higher judiciary and repeated violations of the Constitution is a palpable anguish of poverty and deprivation. The millions who hailed Benazir Bhutto’s return expected her to provide bread, shelter, rudimentary access to health and education for their children. The new coalition must weld the political class and the national bureaucracy into a caring establishment even if it has to dispense with déclassé upstarts that dominate our present administration.

Pakistan must eschew politics of vendetta but that does not mean that every crime against the state and society be brushed under the carpet. It needs a high-powered Commission on Truth, Justice and Reconciliation in the interest of historical accuracy and to build dykes for future security. Gen (retd) Ehtasham Zamir’s disclosure in a recent TV interview that the ISI had manipulated the 2002 elections is not an isolated incident. There are other precedents that indicate how deep the malaise is and how important is the need to cure it. It is because of the pervasive nature of the disorder that a vast majority of people today hold the view that if you leave the relevant powers with Gen Musharraf, he would not take long to use them to annul the gains of Election 2008.

Unfortunately, Pakistani priorities and those of Pakistan’s western friends are not identical. For the West, Pakistan is no more than a pawn on the chess board of the new Great Game. For Pakistan, it is an existential crisis. There is, however, no lack of enlightenment in the West. We have not been able to tap into it because the regime that held us in bondage had no roots amongst the people and no inclination to factor their needs into our western compacts.

We need to replace mercenary relations with relations based on mutual respect, community of interests and coordinated pursuit of common objectives within our respective national parameters. Benazir Bhutto had long since dreamt of an alliance of democracies. We have to pursue that dream globally. Relations with the West (and for that matter with India) should fall into the same framework. The people of Pakistan want to be honourable partners in the international state system not vassals of an empire.

A strong and stable national coalition can be built around the present understanding between the PPP, PML-N and ANP. The US-led West should welcome it and not undermine it as it alone can make Pakistan’s battle against militant extremists effective.

The West should encourage Musharraf to transcend the limitations of his rigid political thought and not insist on turning them into an inescapable dogma for the people of Pakistan.

THE general elections are over and the electorate has voted for a new dispensation that is democratic and people-centred. However, the new government will have a full roster of challenges to deal with, ranging from healing political schisms to repairing the damage to the economy.

The latter has gained urgency, given that the economy is in a state of deep crisis on some fronts and impending crises on others.

The situation is somewhat akin to 1988, when Gen Ziaul Haq’s military regime bequeathed a debt mountain to the successor governments. The Musharraf regime, commencing with the promise of the seven-point agenda, is bequeathing at least seven deficits to the incoming government on the economic front alone.

The first deficit, demanding the most urgent attention, relates to food. Food deficits have been a recurrent event over the last eight years. Crises emanating from shortages have been experienced with respect to sugar, onions, tomatoes and, now wheat and wheat flour. The latest crisis has been manufactured, first, by incorrect estimation of wheat crop output, secondly, by mismanaging wheat export and import deals, and thirdly, by failure to enforce the writ of the state on the country’s borders. The regime’s performance with respect to earlier food shortage crises has been similarly marked by incompetence.

Underlying the wheat crisis is the second deficit with respect to the erosion of the integrity of economic data. The fact is that the position of the director-general of the Federal Bureau of Statistics (FBS) – the country’s principal data collection agency – has been left vacant since June 2003, raising questions across the board about the accuracy of data. Allegedly, the absence of the organisation’s head allowed senior finance ministry officials to pressure lower ranking FBS officials into doctoring the data.

Allegedly again, it is understood that the regime’s fetish with showing high GDP growth rates led it to ‘demand’ that output figures be padded upwards somewhat. Accordingly, it appears that while food ministry officials ‘prepared’ the estimates of wheat output, commerce ministry officials — unaware of the extent of the padding – used the estimates to allow export of wheat. The shortage signals that went out in the market from the belated realisation that initial announcement of a bumper crop were incorrect laid the basis for the crisis to erupt.

The third deficit the country is beset with is energy, particularly electricity. In 1999, installed capacity for electricity production was 15,663 MW, which increased over a five-year period by 23 per cent to 19,252 MW by 2004. The 3,500 plus MW addition occurred on account of power sector investment initiatives undertaken during the much-maligned 1990’s. There has been no attempt since 1997 to increase electricity output capacity. The current power outages can be seen in this context.

The fourth deficit, which is serious from the perspective of macroeconomic stability, is the budget deficit. The bailout provided to Pakistan in the wake of 9/11 created a large fiscal space that led to halving the fiscal deficit from an average of seven per cent of GDP in the 1990s to an average of 3.5 per cent over 2002-04. Now the budget deficit has crossed the five percentage mark and continues to rise.

The fiscal deficit encompasses the revenue deficit and the resulting public investment deficit. One reason for the rising deficit is the shortfall in revenue collection, the other is rising current expenditures. The Musharraf regime has decided to meet the fiscal crisis by cutting development expenditure by Rs70bn; thereby impacting employment creation adversely. The growing fiscal crisis that the incoming government will face will also constrain its capacity to meet the large backlog of unmet demand for housing, health, education, and social security of the people – unless a programme of expenditure switching is put in place.

The fifth deficit, which is also serious from the perspective of macroeconomic stability, is the current account deficit. The current account deficit ranged between 2.8 per cent to 7.2 per cent of GDP over the 1990s. Thanks to 9/11 again, Pakistan recorded current account surpluses during 2002-04. The deficit returned from 2005 onwards, has now crossed the five-percentage point mark, and continues to rise. The current account deficit is fuelled by rising imports and stagnant exports, leading to a record trade deficit that is now almost equal to the country’s official foreign exchange reserves.

The deficit on the services account has also begun to rise sharply due to the rapidly rising reverse remittance of profit by foreign companies operating in the country. Unfortunately, foreign investment has not been channelled into sectors that would enhance exports. Rather, it has been channelled into sectors where revenues are earned in rupees and profits are remitted in dollars. Resultantly, the incoming government is likely to face a balance of payments crisis within a year or two.

The sixth deficit, erosion of purchasing power, is a product of the sum of monetary and fiscal policies that led to increase in money supply and raised inflation rates from an average of 3.5 per cent during 2000-03 to over 10 per cent during 2005-07. A 10 per cent inflation rate in any one year means that a family that can purchase Rs1000 worth of commodities at the beginning of the year can purchase only Rs900 worth of commodities at the end of the year.

Over the same period, average food inflation jumped from less than three per cent to over 12 per cent. Given that food comprises between 60-80 per cent of the household budgets of the poor, higher food inflation hurt the poor more. The purchasing power deficit arising out of inflation is thus greater for the poor. Claims about reduction of poverty have then to be seen in the light of the data deficit mentioned earlier.

Last, but not the least, is the employment deficit. Official statistics claim that the unemployment rate has declined from 7.69 per cent in 2004 to 5.35 per cent in 2006 on account of additional employment of five million workers in the two years. A disaggregated view of this statistic exposes the fiddle. In 2002, 20.5 per cent of the non-agricultural labour force was employed in the formal sector and 37 per cent in informal sectors. In 2006, the share of formal sector employment had declined to 15 per cent and that of informal sector increased to 41 per cent.

The decline of formal sector employment is not a positive development, given that informal sector jobs are generally low wage, lacking in job and income security, and environmentally more hazardous. And in any case, there do not exist any firm mechanism to measure informal sector employment; as such, the estimates are open to manipulation. The same is true of unpaid family labour, which is shown to have grown a phenomenal 88 per cent. Clearly, growth in informal and unpaid family labour has been manipulated to cover up for the growing employment deficit created over nearly a decade.

The Musharraf regime’s gift of the seven deficits to the incoming government is a tribute to the ‘management by gimmickry’ style of his economic managers. As in 1988, it will be left once again to the representatives of the people to begin the task of cleaning the messed up stables. A complete reappraisal of the economic policy framework is clearly in order.

WITH his recent resignation as Cuba’s president, though not as the First Secretary of the Party, Fidel Castro has raised an interesting question: where will history place him? In the pantheon of great leaders, or in the dungeon of abhorred dictators?

Born in 1926 to a well-to-do family, Fidel Castro grew up in the rough and tumble of Cuban, Colombian and Mexican politics. His political credo was Marxism. But his hero was Jose Marti, a great poet killed in the Spanish-American war of independence in 1895.

In 1953, barely 27, Castro mounted an armed insurrection, ‘Moncada Insurrection’, to overthrow Batista Zaldívar’s repressive regime, but failed against heavy odds. He was imprisoned and charged with treason.

To defend himself and his co-accused, he delivered his famous speech in the court: ‘History would absolve me’. Freed after two years under popular pressure, he went to live in Mexico to ‘prepare for the revolution’.

In 1956, sailing on a broken boat, ‘Granma’, he left for Cuba along with his 82 ‘fidelistas’. Their mission was to overthrow the Cuban dictator who was backed by a 50,000-strong force bolstered by the US military and financial powers.

He made his base for guerilla warfare in the mountains of Sierra Maestra and thus began the most romantic revolutionary lore of the 20th century. Its central characters were: Fidel Castro, his brother Raúl, and an Argentinian physician, Ernesto Che Guevara. Their followers were a mix of petit bourgeoisie and peasants.

Batista was overthrown in 1959 after a glorious struggle. Situated just across Florida, Cuba emerged victorious. Neither its tiny size, nor its backwardness disadvantaged Cuba vis-à-vis the United States. Indeed, one man, Castro, made up for all the missing factors in the balance of power.

How did he and his revolution survive the last fifty years when the mighty Soviet Empire crumbled before the capitalist powers? This question is also relevant for those who can’t resist one threatening call from the US president, let alone defying ten vengeful US presidents! Castro survived thanks to three attributes: foresight, courage and diplomacy.

Castro stuck to the socialist path even when socialism had turned into ‘a great fallen oak of endeavour’ and the Soviets and its satellites had fallen like a house of cards. Neo-liberal and neo-capitalist forces were romping back on the political stage all over the world.

But Cubans trusted and followed Castro’s vision. Barring a few individuals, most of the Cubans never questioned his socialist policies. In fact, they had not forgotten what Yankee imperialism had done to them before the revolution. History would later vindicate Castro’s foresight not to blindly drift along the capitalist mode. The left has since been on the rise in Latin America and Cuba is no more isolated.

Cubans tested Castro’s courage during the Bay of Pigs war in 1959 when he defeated an American-sponsored army and sent their bodies ‘floating down the coast of Florida’.

It was the first US defeat and that at the hands of a small island. It broke the myth of ‘Yankee power’ long before ‘Vietnam’ happened to America. Indeed, it is a ‘stigma’ that refuses to fade away from recent American history, for all the contrary media hype and cinematic affects.

Castro displayed his diplomatic genius during the missile crisis in 1962, which brought the world to the verge of a nuclear war. True, the Soviet Union had to ultimately remove the nuclear missiles from Cuban soil. But the Cuban revolution had been saved and Castro emerged as a statesman in the socialist world. Zbigniew Brzezinski woefully lamented that immunity was extorted for Cuba “in defiance of the line drawn by the once inviolable Monroe doctrine”.

Until the fall of the Soviet Union, Cuba was to the USSR what Israel is to the US. Castro received billions of dollars in economic and military aid from the USSR and played a key role in African and Latin American politics and in the non-aligned movement.

Castro’s diplomacy again proved his detractors wrong when he survived the fall of the USSR. He cultivated Cuba’s neighbours and forged alliances with friends like Hugo Chavez. Chavez now provides Cuba with $2bn in subsidised oil annually, and an export market for Cuban doctors and other professionals.

To answer the question if Castro was a great leader or a dictator, his role needs to be seen in the context of Cuban history which is replete with struggles against Spanish and American domination. It is no small feat that Castro and his revolution live on, notwithstanding the 49 years of US economic blockade.

How many other leaders, living far from America and having a lot more military and economic powers, have resisted the US dictates? Very few. It is to these weaklings who remain beholden to Bretton Woods and Washington, Castro provides a primer on how to live with courage, dignity and success.

True, Cubans don’t match the democratic standard idealised in the so-called free world. But they enjoy a far better standard of living with free health and education, 80 years life expectancy (same as in the US), and immunity from diseases like polio, diphtheria, tetanus, meningitis and measles.

Don’t forget if Cardinal Richelieu and Prince Otto von Bismarck plied their diplomatic genius to earn a place in history, they had the support of big armies and empires. But Castro had none. Yet he succeeded against the mightiest empire on earth. And that too sitting right under its nose.

History would surely absolve him if not for his brand of socialism, then for what he stood and strove for all his life. Cicero said of Roman power: “Wherever you are, remember that you are equally within the power of the conqueror.” Castro proved him wrong. Cuba being within the power of the conqueror remains unconquered. And that would earn him a place in the pantheon of great leaders.

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