IN a recent article titled ‘Another kind of change’ Akbar Zaidi tried to make us believe in changes occurring in Pakistan without properly contextualising them. According to the writer, Pakistan is no longer feudal, traditional and rural nor is its economy agrarian. Although it is not stated in this fashion, the underlying tone of the article is that the country has moved to become a more modern society. Let us see if the arguments hold.

First, do the changes in the land tenure system and the separation between labour and capital, which is how traditionally feudalism is defined, make Pakistan non-feudal? Besides the economic dimension, there is the socio-political dimension as well. The structures of power remain the same.

Zaidi would like to call it authoritarianism. He believes that changes in economic production patterns, injection and greater accessibility to modern technology make Pakistan different. But technology and capital do not make Saudi Arabia and the UAE less of a tribal society. Neither do such developments make Pakistan less feudal. Perhaps, a longer stay in a village might help.

In Pakistan, the basic social power structure remains the same. Changes in the land tenure system have occurred not due to the dilution of feudalism but because the big landowners have acquired other means for capital generation. While the big landowners have become industrialists and businessmen, land still remains the symbol of social power. The institutions of the jirga and honour killings are an example of how feudalism continues to exercise its hold over society. The word feudalism sounds ugly and retrogressive. Perhaps, if we don’t try to give it other names we will realise how important it is to get rid of the institution and its attributes.

Zaidi’s argument regarding the economy not being agrarian is also questionable. He believes that the economy’s dependence has shifted from agriculture to the service sector. There is also a proportional decline in agriculture labour which has fallen from half of the total employment in 1990 to 43 per cent. The writer does not realise that the agriculture sector continues to be the single largest group in the job market. The reason for its decline is itself questionable.

Perhaps, the above perception is based on the popular notion that greater industrialisation and technological advancement create and expand a middle-class which is a driver of modernity. An agrarian economy, which does not involve value-addition activities, keeps economic progress depressed. There is a fallacious assumption in South Asia that agriculture should be sidelined as part of the march towards modernity. Agriculture should be modernised and integrated with industries that make use of farm output and yet involve value addition. This would include more than just the traditional industries like textiles and ginning or sugar and flour manufacture.

Pakistan must concentrate on agriculture by lining water canals, introducing new water conservation and management techniques, shifting to water-conserving crops and improve the overall fiscal viability of the sector. These measures are necessary to boost the rural economy which is necessary to stop the demographic shift from rural to urban areas.

Zaidi demonstrates that the rural population has declined and about 55 per cent of the people live in cities or areas which do not qualify as traditional rural areas. There are four issues here.

First, it is the population explosion which has turned villages into small towns. A large number also have access to electricity and other technology like phones and mobile phones. But these new towns face harsher conditions than the cities. For instance, most face gruelling load-shedding and the bulk of the population suffers from feudal power structures.

Second, people migrate to the big cities in search of employment but the cities themselves cannot cater to their needs. Most cities cannot handle demographic shifts and thus we see a rise in violence and crime or people turning towards religious extremism.

Third, the movement of people is a result of uncontrolled population growth and poverty in the rural areas. Two statistics are worth consideration: (a) Pakistan’s population is projected to increase from the current 160 million to 300 million in 2050, and (b) over 35.1 households engaged in agriculture lived below the poverty line in 1991.

One of the reasons for children going to madressahs or youth in Punjab becoming jihadis is also because their food and lodging is paid for by the militants. Considering the poverty in rural areas, this has been a great attraction. There are fewer jobs in the rural areas, which creates a host of problems.

Finally, people’s access to modern technology, as mentioned in Zaidi’s article, does not prove anything about a country’s development. Most of the times even less affluent people invest in mobile phones or consumerism in general because of lack of investment opportunities. The growth of mobile phones demonstrates an economy that lacks depth rather than reflects simple progress.

For Pakistan, like the rest of South Asia, killing agriculture is not an option. In fact, the new government must adopt a solid policy on the issue which must look into the problems of irrigation as well.

It is no secret that Pakistan has experienced per capita water availability decline from the Indus river, on which it depends for 90 per cent of its needs, from 5,600 cubic metres in 1947 to just 1,200 cubic metres in 2005.

Furthermore, groundwater reserves have fallen in over half of Pakistan’s 45 canal commands. Silt deposits in Pakistan’s major Indus dams means they store less water for the months when it is most needed. By 2010, experts estimate that Pakistan may lose over half of its water storage capacity. Hence, the challenge is to improve water management through the lining of canals to stop the seepage of water and switch over from the flood irrigation system to the drip-sprinkle approach. This system used by Israel would, however, require extensive capital investment which farmers cannot afford.

Similarly, farmers will have to be encouraged to discard cash crops like rice and sugarcane that require greater quantities of water. Given our growing needs for electricity and irrigation, the country cannot afford to waste water. In any case, major cities like Lahore face the problem of brackish water which means that in the next three to five years they will hardly have clean drinking water.

The country’s biggest challenge is population explosion and containing the demographic shift to cities which cannot handle the human traffic. Job creation and feeding these people is a huge challenge which will not get solved until we concentrate on agriculture as well as industry. Denouncing agriculture will not help. Moreover, statistics often fail to tell the real stories of people’s poverty and misery.

The writer is an independent strategic and political analyst.

ayesha.ibd@gmail.com

AFTER Jawaharlal Nehru assumed power as India’s first prime minister, it was expected that he would build it up as a welfare state. But when it came to writing the constitution, even the word ‘socialism’ did not figure in the 395-article document.

His daughter, Mrs Indira Gandhi, added the word in the preamble of the Constitution, and that too during the emergency of 1975 when fundamental rights had been suspended.

It is strange that Nehru opted for caste, not class, while spelling out benefits for the economically backward. The achut (untouchables), presently called the Dalits, were at the lowest rung and, along with the tribals, were given a quota of 22 per cent in jobs, admission to educational institutions and the legislatures.

Still, nothing was given to the Other Backward Classes (OBC), including Muslims, who were in no better shape than the Dalits except that they did not face unsociability. Some 40 years later, the OBC, too, got the same concessions but without the reservations of seats in state assemblies and the Lok Sabha. Nor did they have any quota in technical and management institutions.

A few days ago, the supreme court upheld the law to extend to the OBC reservations in top institutions of high learning. The court accepted the plea to treat the Dalits and the OBC at par. Total reservations have now come to 49.5 per cent. This has hit merit. The upper castes are angry but are getting reconciled to the situation. No political party has made it an issue. Since this is an election year, no one wants to take the risk of alienating the Dalits, tribals or the Other Backward Classes which include Muslims and Christians. If they are all put together, they command more votes in the country than do upper caste Hindus.

Yet, social reforms which are carried out through law courts have legitimacy, not conviction. Society has become more unequal. This is the biggest challenge that India has faced for centuries. It has banned discrimination but the 3000-year-old caste system still allows the practice, and the press is full of atrocities against the Dalits even today.

Despite the dismal scenario, an optimistic phenomenon is emerging. A Dalit is no more on the defensive when it comes to owning his identity. He has come to assess the value of his vote and has begun to believe that he is in a position to swing the balance in favour of the party which delivers him the goods. For years, Congress had the Dalits as its vote bank. But the party has more or less lost it. Now the Dalit wants the party of his caste to win. He has already returned Mayawati, a Dalit, to power. She is the first Dalit chief minister of UP, the largest state in the country. The Other Backward Classes too have asserted and installed in five states their own men as chief ministers.

This may well be India’s silent revolution, integrating the different castes and creeds into a democratic system. True, the upper caste is unhappy because mediocrity has suppressed merit. But in a society of 1.2 billion, the anger of comparatively a few does not disturb the rhythm of progress, especially when they are the main beneficiaries of development. The problem will arise when the demand for reservations in the private sector takes shape.

In any case, the disparity in economic terms has come to matter, not so much the caste. If only Nehru had the vision to realise this when the constitution was introduced in 1951, he would have known that the pattern of poverty in India has been woven in such a way that caste and class are coterminous. He could have laid the foundation for a real welfare state without the stigma of caste, socially and economically.

Dr B.R. Ambedkar, then law minister, is a Gandhi for the Dalits. He did not want reservations because he considered them crutches. After a lot of persuasion, he had the quota system included in the Constitution with a proviso that all types of reservations would end within a decade. But electoral politics in India took such a shape that reservations became a necessity for the then ruling party, the Congress, to win.

The constitution is amended every 10 years to extend reservations for another 10 years. All political parties have developed their own leaders in different castes. All of them treat reservations like a holy cow. More than four decades have gone by without any serious challenge to the reservations. As of today, the concessions will not go even in the next 50 years. Vested interests have developed to keep the caste and OBC quotas intact.

The supreme court’s judgment has done one thing: It has stopped reservations to the OBC creamy layer in institutions of higher learning. For reasons best known to the supreme court, the creamy layer among the Dalits and tribals has escaped any mention in the judgment.

The larger question which India faces is the duration of reservations. According to the constitution, they should have ended in 1960. How much longer? The youth outside the orbit of reservations is increasingly getting agitated, even desperate. No doubt, prosperity will one day spawn disparities. This means many, many years to come. The quota does not fit into a democratic system. There has to be equality in opportunity.

India should probably adopt what America has: affirmative action in favour of the blacks. The yardstick should be a person’s economic conditions. In any case, the criterion for backwardness should not be assessed on the basis of colour, caste or creed. A poor person is poor, whatever his religion.

In fact, it is time that Pakistan and Bangladesh introduced affirmative action. They have to find space for a person who is extremely poor. He has to be helped to stand on his feet. The poor want to live as equals and no one can deny them their right to do so. n

The writer is a leading journalist based in Delhi.

AGAINST the backdrop of the gloomiest outlook for the global economy in many years, the price of oil hit $115 a barrel for the first time last week and the cost of wheat, rice and soya beans soared.

The first rule of economics — that prices are determined by demand and supply — appears to have broken down. When times are tough, commodity prices normally fall, but as the financial crisis has deepened over the past nine months they have been going up and up.

There are several explanations for this strange phenomenon. One is that markets are indeed still reflecting demand and supply, since the short-term effects of a looming recession are being outweighed by longer-term threats to supply. On this basis, the rise in food prices has been caused by the drive for biofuels, while higher oil prices reflect the unpalatable truth that the world may have reached the point where it is going to start running out of crude.

At best, however, these can only be partial explanations. The world may be close to peak oil (the highest point of production) and suggestions that two key producers, Nigeria and Russia, may have achieved maximum output add weight to that thesis.

Yet even those who believe fervently in dwindling reserves of crude in the coming decades would struggle to argue that peak oil is the reason prices are five times higher than in 2002 and up from $70 to $115 in a year. Similarly, turning land used for food over to crops for biofuels may have something to do with the 120 per cent increase in the cost of wheat and the 75 per cent rise in the price of rice over the past year but, again, it is not the whole story.

Nor can those sorts of increases really be put down entirely to the China effect. One reason, for example, why the cost of milk and butter has been going up so strongly in Britain is that Chinese citizens have for the first time been able to afford refrigerators to store dairy products. But the sheer scale of the increases in food prices over the past 12 months would suggest that something else has been going on.

That “something else” is the precipitous decline in the value of the US dollar. Take a look at the accompanying charts, which show very strong correlations between commodity prices and the exchange rate for the greenback. According to Nick Parsons, head of strategy at nabCapital, every time the dollar has weakened, hedge funds have bought commodities. The reason hedge funds act in this way is that commodities are priced in dollars and so when the US currency is falling, producers outside America raise prices to compensate.

A more likely cause of the speculation, however, is that the hedge funds base their decisions on economic models that reflect the correlations displayed in the charts on this page. When the dollar falls, the models guide them to buy commodities, and the subsequent wave of buying pushes up the prices.

Now take another look at the graphs that chart the relationship between the oil price and the exchange rate between the dollar and the euro. The upward trend in the cost of crude is unmistakable, yet oil prices have fallen back every time there has been a modest dollar rally. The chart would suggest that a recovery in the dollar to $1.35 against the euro would bring oil prices back down to $70 a barrel. Food prices would also come down, and while that does not represent a panacea for the problems of agriculture in poor countries, in the short-term it would mean fewer people going hungry this year. At $1.35, the price of rice would be about 10 cents per hundredweight as opposed to almost 25 cents today.

There is little to suggest that the dollar is going to strengthen, with the markets expecting further cuts in US interest rates and borrowing costs in the eurozone to remain steady. American policymakers seem quite content to let the dollar fall, since a depreciating currency makes exports cheaper and the European Central Bank sees a rising euro as a bulwark against the inflationary pressures caused by higher commodity prices, since a stronger currency makes imports cheaper.

This is a strange sort of logic. While it’s true that exports are the one bright spot for the US economy, a key reason for that is that American consumers are paying far more for their fuel and food.

If a stronger dollar meant oil prices at $70 a barrel rather than $115 a barrel there would be a sizable boost to the domestic economy. Similarly, the ECB appears to be putting the cart before the horse. If a weaker euro meant weaker commodity prices, there would be less of an inflationary threat to worry about.

In the circumstances, it is curious that the G7 countries are not talking more seriously about coordinated intervention to reverse part of the dollar’s decline. At its meeting in Washington earlier this month, the G7 toughened up its language on currencies, expressing concern about the possible implications for economic and financial stability of recent sharp fluctuations.

The question, therefore, is why the G7 is not prepared to turn words into action. One answer could be that central banks believe intervention doesn’t work. It is certainly true that there are occasions when it doesn’t, but the last time there was coordinated action by the G7 — the September 2000 support operation for the euro — it was a spectacular success.

A second argument is that the weakness of the dollar is necessary to eliminate the global imbalances — the hefty US trade deficit and the massive surpluses run by China and other Asian exporting nations. Yet the exchange rate has probably already achieved maximum impact on the US trade deficit: to eliminate the imbalances solely by depreciation would require a further colossal — and wholly unrealistic — fall in the value of the dollar.

Finally, it is said that intervention is pointless in the current climate because it goes against the grain of monetary policy, and with rates in the US likely to reach one per cent this summer and the ECB with a bias to push them up from four per cent it would be throwing good money after bad. But it might not be. Imagine that intervention was sudden, large scale and carried real intent. In those circumstances, the dollar bears would be wiped out and commodity prices would fall sharply.

Rising real incomes in the US and a less pronounced threat to inflation in Europe would change the market view of interest rates: there would be less pressure for cuts in the US, less pressure for increases in Europe. Intervention, in other words, might bring about a closer alignment of monetary policy that would justify the intervention. For this to happen, though, there needs to be a leap of faith. Until we get it, the headwinds facing the developed world will grow stronger. And the poor will get hungrier — and angrier. n

—The Guardian, London

“ARE we there yet? Are we there yet?” My children never fail to torment me on any family trip by their incessant repetition of the mantra. It is as though reiterating the question would somehow shorten the distance and we’d magically arrive at our destination.

Anthems, flags, languages, dresses, food, culture, all come together in defining the face of a nation. However, it is the soul of a nation that sets the great ones apart from others. But, what exactly is it; we can’t see it, touch it, hear it, smell it or taste it. So where does this intangible soul get its being?

The last few months have seen the Pakistani media besieged with opinion-makers promulgating themes of transition, power struggle, political systems, dialogue, reconciliation, institutions, Constitution and justice — all elements of a viable and sustainable state. Although these go a long way towards establishing our political consciousness, the soul of the nation is still something quite different.

Rarely will one find unanimity in thought amongst the citizens of a nation, even those formed along religious and ethnic lines. For a nation like ours rife with disproportion, where we find a national language flanked by four provincial languages and several dialects to boot, economic disparity, low levels of literacy, a legacy of feudalism rooted in rural areas, tribalism, and religious sectarianism, prolonged unanimity in thought is theoretical at best.

The political parties are splintered with each representing a segment of society, catering to its electorate, oblivious to the needs of the whole. Given an atmosphere of free and fair elections, will one party win a clear majority and not have to rely on coalitions, forced into backdoor deals watering down its agenda?

Despite the odds, the diversity, the factions, something remarkable happened. A soft revolution took place, and although each group claimed responsibility for bringing about change, none stood on its own. The lawyers, political parties, prominent personalities, media, and the public all came together to force a change. The lawyers were backed by politicians, and the politicians were backed by the people.

The combination refused to be denied; none alone could have brought about a change so comprehensive. The result is unique, and I cannot think of many instances where the proletariat and the bourgeoisie have come together in forming a ruling coalition. The spirit of the nation has given birth to the soul. We came together and achieved because we looked at the whole and not our part of the whole.

We can talk all we want about institutions, policies, and systems, but unless we talk about each other as one, we are not there yet. Until the feudal accepts and fights for the rights of the peasant, we are not there yet. Until the businessman accepts and fights for the rights of the labourer, we are not there yet. Until the rich fight for the poor, we are not there yet. Until one tribe member stands up and supports one from another against his own, we are not there yet.

Until provinces fight for each other, instead of with each other, we are not there yet. Until we accept and fight for the rights of those with different religions, we are not there yet. Until we fight for the rights of those with different ethnicities, we are not there yet.

Far be it from me to denigrate our recent achievements, we have come a long way, and perhaps for once are headed in the right direction. As a nation we exposed a chameleon masquerading as a civilian president. We just have a bit further to go.