HOW fortunes can tumble in a fortnight is peculiar to politics. The ruling Congress was on top of the world after giving a popular budget and waiving Rs640bn in farmers’ loans. The party also had a gleam in the eye over the hike, amounting to Rs190bn, in the salaries of civil and military servants.

Calculators were out to count the increase in the number of voters. (The Lok Sabha elections are due in less than a year.)

However, an abnormal price hike has unhinged the Manmohan Singh government. There have been frantic meetings by the Cabinet and its sub-committees to take measures to bring down inflation which is around seven per cent. Everyone, particularly the Left which is supporting the government from the outside, is gunning for the Congress. The party itself is looking for shelter. It is already perturbed over a pre-price-rise survey showing the Congress-led coalition losing 39 seats and its strength coming down to 177 in the 545-member Lok Sabha if elections are held now.

The Congress has itself to blame. It had made people believe that it would not allow the prices of essential commodities like wheat, rice, pulses and edible oil to go up. This impression deepened in the belief that since Prime Minister Manmohan Singh and Finance Minister P. Chidambaram was among the best economists in the world, they would manage to control prices. Their job was, however, to convince the electorate that the Congress-led government could do what others would not be able to do.

Knowledge of economics is one thing, using it in a pragmatic way quite another. I recall that when Lal Bahadur Shastri became the prime minister he said at his first press conference that the foremost task before him was to check food prices. He succeeded in doing so. His was a pro-people approach, not a theoretical one.

The problem with the high-brow economists is that their policies are pro-rich to whom the high cost of living does not matter. An increase of 20 to 25 per cent in the prices of essential commodities — as has happened in India in two weeks — has broken the common man’s back, not of the affluent. But the government’s worry is not over the price rise but the growth rate. Although official estimates stick to a growth rate of 8.5 per cent, financial agencies do not think it will go beyond seven. This is not to the liking of the high priests of economics.

Whatever else be the conclusion, it is sheer non-governance. When the price rise is not anticipated even a fortnight before it happens, the fault lies with those who are handling the economic ministries. If the government’s response is limited to banning the export of basmati rice and threatening hoarders with dire consequences — this is what the cabinet has decided — it appears that the government is bereft of ideas. These are routine measures and tantamount to closing the stable after the horse has bolted.

The government’s policies — its economic reforms — are responsible for consumerism. They have set into motion a new fashion of spending which has little consideration for those who cannot afford even grain, much less the goodies. There is more money in the market and more and more people are chasing fewer and fewer goods. Take food grain alone. Production in the last decade went up by 1.2 per cent per year while the population increased by 1.9 per cent annually. What is needed is more food production and more land under cultivation.

Yet the government is all for the Special Economic Zone (SEZ), an area where there are no taxes. Until recently, arable land was acquired for the SEZ in the ‘interest of public good’ and given to industrialists. The Left too went along till the people’s agitation prompted a change in policy. Now cultivable land is not handed over to the SEZ.

In fact, the entire agricultural policy has been wrong for some years. Our per capita food production has regressed to 1970s levels. According to the home ministry, the ‘predisposing factors’ were the failure of land reforms to provide tenants with security of tenure of fair rents and to correct inequalities of landownership through redistribution of land. This is too radical an approach for a government which believes in survival of the fittest.

What India needs is another green revolution. This requires meticulous planning and hard work. But the government only flaunts money which it can utilise to buy grain from abroad. But there is no surplus available anywhere. When five million tons were imported a couple of years ago, there was no shortage. The deal was meant to make money on the side because the price at which the wheat was bought was excessively high. No inquiry has been made because fingers are pointed at Agriculture Minister Sharad Pawar. (Most of the imported wheat was inedible.)

Earlier forecasts for this year’s production were rosy. All of a sudden, the yield is short by 20 to 30 million tons. This is a huge miscalculation for which heads should roll. It is not inconceivable that the miscalculation may have been deliberate so as to allow hoarders to charge a fancy price. The nexus of hoarders and politicians is no secret.

The government has yet to explain why it allowed private players in the field. They brought produce directly from farmers and the godowns of private players or big firms are full. Food grain is still available there but who can conduct a raid when top politicians give hoarders protection?

The situation is so serious that it demands a concerted approach. Yet almost all political parties are exploiting the situation. This may well be at the cost of unity which the country needs most at this time. What they do not realise is that there can be food riots if what we have is not judiciously distributed and if hoarders go scot-free. Water is another thing which may one day cause riots.

I do not know how sound is the proposition to link rivers but water should be on the concurrent list of the constitution. Pakistan which proposes to do away with the concurrent list altogether should think seriously about the repercussions. Common problems like river water and the environment cannot be on the exclusive list of states or provinces.

India offers examples of water disputes. Tamil Nadu and Karnataka are always quarrelling over the water of the Cauvery. Early this week, a pro-Kannada group vandalised cinemas screening Tamil movies and a Tamil Sangam office in Bangalore over a Tamil Nadu water project at Hogennakal. The central government is practically doing nothing. It leaves such problems to the Supreme Court. Had it been possible, the government would have even left the shortage of food grain in the domain of the courts.

The writer is a leading journalist based in Delhi.

IN one of his first speeches after taking oath, the new prime minister affirmed his faith in Pakistan’s minimum deterrence. However, can Yusuf Raza Gilani explain the concept to the simple people of Pakistan?

For ages it was explained as the capability to defend ourselves. This was done even at the times of Operations Gibraltar and Kargil or when new weapons were purchased despite the fact that we have never really won a war.

In consideration of the new era of politics, if indeed this is one, Prime Minister Gilani must take the initiative of allowing parliament to define deterrence rather than allowing the bureaucrats to do so. Indubitably, Pakistan has serious security concerns. There is a large neighbour to the east and the Taliban and other militants inside. But the new government must consider two important facts.

First, in the past eight years the military has received a lot of aid to build up defences against internal threats. The US has provided over $10bn to fight the internal threat. Second, as far as the external threat is concerned, the days of territorial invasion are over. An Indian government will be nothing else but stupid if it tries to threaten Pakistan’s security. Furthermore, in the current international environment it is not likely that the international community will allow India or anyone else to jeopardise Pakistan’s security. The international community did not allow this even in 2002 when both forces were standing eyeball to eyeball. And then, aren’t we talking peace with India?

One would imagine that minimum deterrence must be linked with strategic threats to the state, including that of a financial meltdown which according to the new finance minister has already begun. Thanks to the Shaukat Aziz-Pervez Musharraf regime’s policies, the trade deficit stands at $6bn and is likely to increase. Despite all the claims that Pakistan has such good relations with the US, the Aziz-Musharraf duo could not convince Washington to lift quota restrictions on textile products or issue visas to our businessmen in time to avoid cancellation of contracts.

Today Pakistan is a country that badly needs money to build essential socio-economic infrastructure. There is a serious energy crisis which will affect industrial growth and production. Then there is the wheat shortage and inflation which will kill the poor man in the streets. One option is to revert to the IMF and World Bank which probably the country will do in the next few months.

An alternative is to reduce non-development expenditure such as that on defence. Why shouldn’t Pakistan cancel the order for the F-16s or other military deals? Just imagine the number of schools and hospitals that can be built through such diversion of resources. The air force is already in the process of acquiring JF-17 Thunder fighter aircraft and we have sufficient nuclear warheads to deter the Indians.

The prime minister cannot change civil-military relations without implementing the suggestions in the 1973 paper on ‘Higher Defence Re-organisation’, written under Zulfikar Ali Bhutto’s government, that aimed at strengthening parliament and the ministry of defence. Currently the MoD lacks the capacity to deal with military matters and badly needs to be civilianised.

Only a strong MoD can strengthen parliamentary control of the armed forces for which the new government must train the civil bureaucrats or bring in experts. Similarly, the capacity of the civil bureaucracy must be rebuilt by replacing retired military generals and establishing training institutions manned by and catering to civilians.

One is not sure that appointing Maj Gen (retd) Mehmood Durrani as the National Security Adviser will do the job. The appointment is in consideration of the general’s close ties with the US Pentagon. Not to mention the fact that Gen Durrani owes his intellectual growth to Shirin Tahirkheli, a Bush administration adviser and former senior official of the US National Security Council.

Given his capacity for volte-face — shifting loyalty to Musharraf and later from Musharraf to the PPP — he will be good at secret deals if not shifting the balance of civil-military relations. It is not certain how capable he will be in directing a new strategy on the war on terror. The PPP has selected Washington’s dream team to run foreign relations and national security.

The new government must not forget that this is a matchless opportunity to bridge the gap between two separate worlds — civilian versus the military. While civilians are portrayed as incompetent and corrupt, the military is presented as the better institution (in the process we forget about defence kickbacks). One of the problems of the larger military economy is also that it provides the armed forces with a sense of financial autonomy. So while it is necessary to take care of the soldiers and do enough to give them confidence, these measures should be part of the government’s programme rather than the military’s alone.

For instance, Gen Kayani’s wonderful idea of declaring 2008 as the ‘year of the soldier’ must be endorsed by the prime minister. The head of government should be the one inaugurating the new housing schemes for soldiers rather than military officers. In the same spirit, the government should announce housing schemes for the poor police officers or all those civilian officials who cannot fight inflation and the price hike. After all, doesn’t the military argue that its welfare ventures are there to take care of the material concerns of its personnel so they can work with greater dedication? We need good soldiers as well as civil servants, policemen, teachers, journalists, engineers, doctors and others to bring about a less corrupt and more efficient state and society.

A military-civilian divide is not in the interest of this country. The existence of two worlds as antithetical to each other creates tension and not understanding. In any case, the separation was never about upholding professionalism but about authority. National interest demands that the military also engage in cost-cutting by halting capital-intensive projects like the new GHQ, which is not likely to improve the army’s capacity, and become more accountable in terms of stopping pilferage so that the country’s dire economic needs can be met.

The new PM must allow discussion in parliament on the defence budget and military procurement. It is a fallacy that parliament will jeopardise security or that transparency will hurt secrecy. Recently, in a conference in the US one heard an agent of the American RAND Corporation talk about how she had wonderful access to the higher echelons of the Pakistan military.

Earlier, I had heard an American think-tanker confess that Musharraf had briefed him on matters which would jeopardise Pakistan’s national security if he were to disclose them to anyone. So, while the world already knows about our secret world of defence, the people need to know more to have greater faith in what is ostensibly there for their protection.

Hopefully Gilani sahib will not forget that this is a unique chance for him to negotiate civil-military relations. If he can’t do it now when there is a crisis, he will never be able to do it after a year.

The writer is an independent strategic and political analyst.

ayesha.ibd@gmail.com

THE prime minister has announced the new government’s economic programme which is to be implemented in the first 100 days.

The purpose was to outline the economic priorities of the new government and send a signal to the nation that the new leadership is aware of the issues, and is already working on the solutions.

They have been largely successful in achieving their objectives. However, it is an incomplete programme as some key challenges have not been addressed. One would expect that a more comprehensive economic strategy will be unveiled at the time of the federal budget.

We will first analyse some of the key measures already announced and then briefly cover those issues which have not yet been addressed. The two recent economic crises that have dominated headlines, wheat and electricity shortages, have both been attended to in the 100-day plan. In the case of wheat the procurement price for the new crop, which had been set at Rs510 per maund by the caretaker cabinet, has been increased to Rs625.

This is a move in the right direction as the import parity price is more than Rs1,200 per maund. However, the gap vis-à-vis international prices is still so huge that even this increase in price may not go far enough in stopping potential smuggling and resultant shortages of wheat in the coming winter. In addition, with 75 per cent of all poor Pakistanis living in rural areas and a very large number of them dependent directly or indirectly on agricultural income, we may be missing a great opportunity to make a decisive dent in rural poverty by not paying farmers the price they deserve.

However, even the moderate increase announced by the government will directly contribute towards higher wheat flour prices and resultant inflation. With the Sensitive Price Indicator (SPI) running above a back-breaking 17 per cent, the most vulnerable sections of society are already being pushed below the poverty line in increasing numbers.

Therefore the urban poor need to be protected from the potential increase in flour prices. The increase in the minimum wage, now raised to Rs6,000, goes towards addressing this issue and is a welcome step. Some businesses might oppose this move on the grounds that it will increase the cost of doing business, but then one would question the wisdom of an economic policy that promotes businesses which become globally uncompetitive if they have to pay a mere 100 dollars a month to workers.Welcome as this measure is it will cover only one segment of the poor. It leaves out all those who work in the unregistered sectors or, even worse, are unemployed. We need income-transfer programmes that provide targeted subsidies to the most vulnerable.

To address the power shortages, additional capacity of 2,200MW is to be set up within this year. It has not been made clear how this is to happen and we will have to wait for a clarification. Similarly, a target has been set of saving 500MW through energy conservation measures. The only proposal mentioned in this regard is the distribution of energy-saver bulbs at reasonable rates. Hopefully, the conservation strategy will be more comprehensive than that.

The other measure announced is the construction of small dams for generating hydel electricity. Whether this is the result of a political consensus after dialogue with the coalition partners or not is unclear at this stage. So far there has been opposition to the building of upstream storage capacity, particularly from Sindh.

Two significant announcements pertain to the creation of an employment exchange and building a million housing units a year. These are potentially powerful schemes but the devil will be in the details. While conceptually welcoming the move, we will have to hold final judgment until the specifics are made available. There is also a statement regarding crop insurance for small landholders which is a scheme of utmost importance and a dire need of the farmers. Hopefully some homework has been done to actually launch this programme in the near future, as it has been talked about for a long time.

Some of the key issues not dealt with include decisions regarding energy import options, curtailment of the current account deficit, new revenue generation measures and a strategy to deal with the severe skill shortages faced by the economy.

Pakistan currently relies on extremely expensive fuel oil to meet its energy import needs. Natural gas is a far cheaper and environmentally less damaging alternative. It was hoped that the PM would include the final go-ahead for either LNG import or a pipeline from Iran, or both, in his inaugural policy statement.

These decisions are overdue and the nation is already paying a steep price for this delayed decision-making. The Iran pipeline in particular needs to be pursued without a single day’s delay and will be a test of the independence of the foreign policy of the new regime.

The current account deficit is running at a pace of almost ten per cent of GDP in this fiscal year. This is completely unsustainable and needs to be addressed urgently. Any procrastination would amount to reigniting the vicious debt spiral which earlier weighed down the economy for more than a decade.

Current tax revenue, which is running at about ten per cent of GDP, simply does not generate the funds required for financing the infrastructure development and social spending needs of the government. We need measures that will address large segments of the economy which are seriously undertaxed. We need a capital gains tax on real estate and the capital markets, GST on services and a meaningful income tax on large farmers.

In an economy suffering from rampant underemployment it is an amazing fact that virtually every sector is suffering badly from a shortage of skilled workers. In fact, if one were forced to pick the single biggest bottleneck in the way of sustained non-inflationary growth this lack of a skilled workforce would be my pick.

We expect that the new government will focus its attention on implementing the short-term measures it has announced, detailing the policy guidelines it has issued and coming up with policy measures to deal with some of the gaps in the 100-day package. This is a daunting challenge but the goodwill of the nation, regardless of political affiliation, in these initial days will certainly be with the government.

ONE of the foremost challenges that the present government faces is how to tackle the war on terror. Already Nawaz Sharif has expressed deep reservations about the policy and conduct of this war. Prime Minister Gilani, though reiterating his commitment to fight terrorism, wants the policy to be thoroughly reviewed by parliament and a broad-based approach adopted. This resonates with the wishes of the people, but the Bush administration and Nato states are uneasy with this move and would like the new government to pursue the war on terror with greater vigour and emphasis on the military instrument and less on dialogue.

Pakistan’s experience has been that a military response to growing militancy is not enough. It has to be countered by a comprehensive policy that combines political, economic, ideological, media, military and intelligence measures. Regrettably, the Bush administration has followed a highly aggressive foreign and defence policy while fighting the war on terror. It has focused primarily on the military instrument in Afghanistan and has all along pressed Pakistan to do the same.

It has taken maximum advantage of Gen Musharraf’s questionable legitimacy and his heavy dependence on the US for political survival. Consequently, militancy has expanded and militants are in control of vast areas not only in the tribal belt but also in some settled areas of the NWFP. More than 1,200 soldiers have died and hundreds have been injured. Moreover, militant groups have turned inwards, striking at sensitive and high-profile military, intelligence and political targets.

Taking a cue from the success of asymmetric warfare in Iraq and Afghanistan, the new generation of Pakistani Taliban is employing similar tactics in the tribal belt and in settled areas. In 2007, Pakistan experienced more suicide bombings, kidnappings and casualties than in the last five years — i.e. 2001 to 2006. Insurgents have become bolder and when confronted with a major military response have withdrawn, as is typical of guerrilla tactics. In any case they do not have to win. For them to maintain a certain tempo of insurgency is enough to keep the security forces unbalanced and the population in a state of fear.

What is needed is greater clarity in understanding and defining the nature of the war on terror and pursuing a consistent policy. The previous government’s policy swung from tough military action to peace deals that had more to do with pacification than meaningful and verifiable peace agreements.

Furthermore, some ill-planned counter-insurgency operations led to collateral damage resulting in the loss of innocent lives and displacement of hundreds of people. This created extreme ill will, bringing new recruits to the militants’ fold.

Disrupting militant networks through better human intelligence and surveillance is critical. It is important that the militants’ financial supply lines are tracked and their doctrines and tactics effectively countered.

The militants are using the computer and information technologies to great advantage. Their intelligence is getting sophisticated which enables them to hit military targets with precision. Of course there are no laid down performance standards by which success or failure in the war on terror can be measured apart from tracking casualties or witnessing progress in governance and development.

Since Gen Ashfaq Kayani has taken over as army chief there is greater professionalism and counter-insurgency operations have been more effective. Like other major armies, the Pakistan Army too has primarily remained focused on conventional warfare. However, it is in the process of evolving doctrines, tactics, strategy and procedures best suited to facing the current threat of asymmetrical warfare.

Pakistan needs to step up its efforts at nation building as this is a key element in combating insurgency. The strengthening of democratic institutions will enable peaceful reconciliation of grievances and provide channels of communication for participation in policymaking. This can help address the underlying conditions that have fuelled the rise of extremism and terrorism.

Pakistan’s new political government should address the social and economic problems faced by the people of Fata and create an environment where they are given justice and security at the local level. Poor governance, lack of employment opportunities, corruption and prolonged military rule has resulted in growing support for the militants.

Clearly, for the military too it has become a professional and security imperative to promote democracy and distance itself from politics. Pakistan has experienced that military rule alienates and sharpens the civil-military divide and no war, external or internal, can be won without the support of the people.

It is only by eliminating enclaves of militancy in Afghanistan and our tribal belt that regional and global security can be ensured. The stability of Afghanistan is vital for the stability of Pakistan and the reverse is equally true. Both countries have taken positive steps to improve their relationship but a lot more has to be done to improve coordination and enhance cooperation in intelligence sharing and security operations. What is required is to develop a common vision as ultimately this war has to be won by the Afghans and Pakistanis.

For Islamist militants (the Taliban), the US presence in Afghanistan provides the motivation to rise against the occupying power to regain independence and integrates Pakhtun nationalism with religious fanaticism. To counter this it becomes crucial that Pakistan and Afghanistan rely essentially on their indigenous strength.

Foreign support should be sought in the form of economic assistance, military hardware and training. The two countries should be responsible for engaging in military operations, providing security and undertaking development work within their respective countries. The holding of joint Pak-Afghan jirgas to mobilise public opinion and formulate unified policies could be another step towards self-reliance.

NATO’s role in Afghanistan remains an enigma. On the one hand there is a genuine desire on the part of the European allies to reinforce the US military’s efforts by their presence and to participate in Afghanistan’s nation-building efforts. On the other there is domestic pressure to withdraw and a feeling of despair. The international community should help create a favourable security environment, display greater commitment to strengthening institutions and assist Afghanistan in nation building through cooperative and well-coordinated effort.

The national capacity should be built around indigenous strategies, in which Pakistanis and Afghans should be in the driving seat. This approach must have the full support of the people and the international community.

The writer is a retired lieutenant general of the Pakistan Army