Exchanging indemnities

BENAZIR Bhutto was ready to exchange indemnity with Gen Pervez Musharraf five years ago. She succeeded in obtaining indemnity for herself and her husband last year from Musharraf who promulgated the controversial National Reconciliation Ordinance on the pretext of promoting national reconciliation.

It is not surprising, therefore, to observe the PPP considering granting indemnity to Musharraf, “if”, in the words of its law minister, “it is in the national interest” — even though the PPP’s Senate leader, Raza Rabbani, has categorically stated that the coalition partners had agreed not to indemnify Musharraf.

The PPP’s intention with regard to granting indemnity to Musharraf is best gauged from its proposed constitution amendment package. The package includes the text of Article 270AAA, which was first introduced by Musharraf himself as part of his Constitution (Amendment) Order in Nov 2007. Article 270AAA is similar to the existing Articles 270A and 270AA of the constitution, which are in the nature of indemnity provisions that validate enactments and actions of past military regimes.

The validity of inserting an amendment in the constitution by executive fiat remains moot, despite its judicial endorsement by the PCO Supreme Court in the Tika Iqbal Khan case (PLD 2008 SC 178). Unlike Musharraf’s 1999 proclamation of emergency, which was validated in 2003 by a compliant parliament through the Seventeenth Amendment (Article 270AA), his 2007 proclamation of emergency and subsequent constitutional amendment have not been affirmed by parliament.

Hence the move to introduce Article 270AAA through parliament, which is now unlikely to succeed, given the fact that the sword of Damocles is no longer hanging over the parliament after Musharraf’s departure. Under the changed circumstances, the PPP may not be able to muster the two-thirds majority required for a constitutional amendment. It may consequently resort to the promulgation of an ordinary law for granting indemnity to Musharraf as a quid pro quo for the NRO. The question, however, arises whether it can legally do so.

Parliament’s power to legislate is delimited by the constitution. Article 237 thereof empowers it to make indemnity laws: “Nothing in the constitution shall prevent [Majlis-e-Shoora (parliament)] from making any law indemnifying any person in the service of the federal government … or any other person, in respect of any act done in connection with the maintenance or restoration of order in any area in Pakistan.”

It is evident from the opening phrase that the parliament is generally precluded from making indemnity laws and that it is only empowered, by way of exception made possible by Article 237, to make such laws and that too in respect of specified acts only.

A nine-member bench of the Supreme Court has in Liaquat Hussain vs. Federation of Pakistan (PLD 1999 SC 504) given an unequivocal judgment on the issue of indemnity. It has held that Article 237 does not cover indemnification for acts done during the period of martial law. The court observed that the constitution does not admit the imposition of martial law in any form and consequently held that the parliament cannot make any law indemnifying any person in the government in respect of any act done by him during the martial law period even for the maintenance and restoration of order.

The court noted that indemnity clauses in the nature of Article 237 were also present in previous constitutions: Article 196 in the 1956 Constitution, Article 233A in the 1962 Constitution and Article 278 in the 1972 Interim Constitution. Each of these articles contained similar provisions for indemnifying acts done during periods of martial law. The reference to martial law, however, was deliberately omitted from Article 237. Not only the omission of this term but also the introduction of Article 6 (high treason), which did not exist in any of the previous constitutions, in the 1973 Constitution led the court to conclude that martial law cannot be treated as part of the constitutional scheme of the current constitution.

The 2007 proclamation of emergency was a form of martial law since it was made by Musharraf in his capacity as chief of army staff and not in the exercise of his powers as the president under the ‘Emergency Provisions’ of the constitution. Parliament does not, therefore, have the power to grant him indemnity. He would not be entitled to any indemnity despite the PCO court’s feeble attempt to justify such action on the basis of necessity in the above-noted case.

Its reference to the following observation by the Lahore High Court in Muhammad Umer Khan’s case (PLD 1953 Lahore 528) represents archaic legal thinking: “If martial law is a law and its limits are prescribed by necessity, then … all acts done by the military which are either justified by the civil law or were dictated by necessity and done in flood [sic] faith will be protected, even if there be no bill of indemnity….” Reliance on this observation is misplaced in light of the express words of the constitution and the judgment in the Liaquat Hussain case.

Besides the specific limitation imposed by Article 237, the parliament would also be faced with general constraints while enacting any indemnity law under the present circumstances. The parliament is bound to exercise its legislative authority in accordance with the constitutional principles of law-making.

Accordingly, it is incumbent upon the parliament to ensure that any law it makes does not disregard, violate or otherwise contravene the fundamental rights of the citizens of Pakistan. In the present case, it cannot be in the national interest to provide constitutional or legislative indemnity to Musharraf.

On the contrary, such a move would not be in accordance with the fundamental right of the equality of citizens as guaranteed by the constitution. It would be discriminatory since it would provide unequal protection of law to a single individual.

Given that indemnity is not possible, what then are Musharraf’s choices? He could consider self-exile and seek political asylum. His omnipotent self-image may not, however, permit him to exercise this option. He may alternatively consider admitting his repeated constitutional and legal infractions — perhaps in part due to the advice of his legal team — and seek reconciliation on the basis of the truth (which principle is incidentally lacking in the NRO).

Judging from his self-righteous attitude and defiant resignation speech, it is unlikely that he will resort to this option. The only remaining option for him is to contest legal proceedings in a manner befitting an honourable soldier. As such, he must be ready to bravely face trial and, if found guilty, either suffer punishment or seek presidential pardon under Article 45 of the constitution.

The writer, a former chairman of the Securities and Exchange Commission of Pakistan, is a lawyer based in Islamabad.

thassan@ijurist.org

Market failed to correct itself

MR Shaukat Aziz probably wanted the Pride of Performance medal by appearing to achieve a GDP growth of 8.3 per cent.

It was supposed to be based on the Washington Consensus, namely deregulation, liberalisation and an independent central bank responsible for monetary policy and inflation.

Mr Aziz replaced the concept of an independent central bank with ‘privatisation’. The whole process is supposed to be based on the belief that markets correct themselves automatically. When Keynes challenged this concept the defenders maintained that it happens in the long run. In response, Keynes is said to have quipped: “In the long run we are all dead.”

Anyway, Mr Aziz is a smart individual. He is also personable, plausible and persuasive. He managed to convince the general of his capabilities and succeeded in converting Musharraf into a faithful disciple. He negotiated foreign debt rescheduling which helped to build up our foreign exchange reserves. He managed to bring interest rates down by a highly expansionist monetary policy.

The banks had large amounts to provide as credit and increase their profits. Consumer demand was encouraged by the availability of credit from banks and further supported by import liberalisation.

Domestic industries providing consumer durables like cars, refrigerators, air conditioners, etc. operated at full capacity. Two-thirds of growth was provided by what is technically called services, i.e. value added through sales by importers, retailers etc., provision of services by banks and financial institutions and other services like telephones etc.

This resulted in current account deficits in our balance of payments over many years which were financed by remittances from abroad and what was called foreign direct investment except that it was not in industry. It led to our foreign exchange reserves being frittered away and has finally resulted in the sudden drop in the value of the rupee, partly the result of excessive criticism of Gen Musharraf’s economic policies — which were, of course, those of our prime/finance minister.

The former president mentioned in one of his speeches that he had asked Mr Shaukat Aziz to come to Pakistan three times to explain his economic policy but he had not responded. Mr Aziz is an intelligent man, why should he have taken on unnecessary risk?

These policies had been in contradiction with the normal approach to development in developing countries which are trying to move away from total dependence on agricultural exports. In Pakistan these were originally jute and cotton.

Development has become almost synonymous with industrialisation. The approach is defined as an increase in savings, investment in industry, export promotion through the diversification of products, import substitution for the transfer of technology. The paradigm is import-import substitution-export. It doesn’t happen all the time but it does happen.

Some years ago at a party, I asked the governor of the State Bank what he thought he was doing by promoting consumerism instead of investment in industry. He replied that they were following the American model. Since I couldn’t think of any polite response to this statement I walked away. The governor was a sensible individual: I realised that he was under pressure from the prime minister and the dutiful president.

In the last year or so the problems were further accentuated by providing subsidy for petroleum products and borrowing from the State Bank to meet budget deficits.

There were other methods of financing deficits such as floating government bonds sold to investors, revamping the National Savings Scheme — but that probably meant that people would start questioning the budget deficit. Why shouldn’t they? This expanded the money supply and, together with the continuing current account balance of payments deficits, the devaluation of the Pakistan rupee was more or less inevitable.

In the early years, the building up of foreign exchange reserves was against US policy. I recall when I moved over from the ministry of information to the ministry of finance Pakistan had made a windfall gain of about $50m in export earnings. The Harvard Advisory Group descended on the ministry of finance and insisted on the amount being immediately spent on imports, which was done.

Some years later, a lady from the US embassy called on me to check the foreign exchange budget. I showed it to her — it was no secret. I asked what it was that she wanted to check. She said that they wanted to make sure that we were not increasing our reserves. I said, “Shouldn’t we in order to compensate for changes in donor support?” She said, “You have to spend your own money before we can support you.” Probably this is not US policy any more.

Input in economic development is also dependent on good governance, education and, in the case of Pakistan, concern over the rate of population growth. Gen Musharraf’s concept of good governance was primarily to further degrade the District Management Group through what was called the introduction of democracy in the local government. This was further enhanced by the induction of the army brass into as many civilian jobs as possible. The results are before us.

As far as education is concerned, he was taken in by Dr Ragman’s vision of producing PhDs and his vision of creating new universities. What is important in education is the production of good undergraduates — they can go on to become PhDs should they so desire. In order to produce good undergraduates existing universities have to be improved. It is a tough job but it is practical compared to the vision of creating new universities in thin air.

With respect to population growth, there was some additional availability of financing but there was no serious political commitment. As a result, there was some talk but no serious work. The recent report on population produced by the National Institute of Population Studies (NIPS) in collaboration with a US consultancy provides some relevant but a lot of irrelevant information; it has, however, not mentioned any estimate of population growth. It has admitted that there is no increase in percentage of contraceptive use, in fact probably a slight decrease.

The problem about the provision of statistics is that an organisation such as the Federal Bureau of Statistics is controlled by the ministry of finance. NIPS is under the ministry of population welfare. Instead of being an independent autonomous organisation they have to take care of their controlling ministry. The result is simply the affirmation of Disraeli’s famous remark, “Lies, damned lies and statistics.”

A step forward or back to square one?

THERE’S got to be a bigger reason than the venue for the absence yesterday of Mr Zardari from the rather uneventful ruling coalition heads’ press conference held at the Punjab House in Islamabad by Messrs Nawaz Sharif, Asfandyar Wali Khan and Maulana Fazlur Rahman.

The three leaders said they had the erstwhile king-maker or soon-to-be-king’s concurrence by telephone on the contents of what they told the media. His detractors may ask what’s to stop Mr Zardari from going back on a telephone conversation when he has not honoured the agreed deadlines in writing to restore the judges.

As details of the latest agreement between the PPP and the PML-N become clear, there is a lot of room for interpretation either way, for the restoration of the judges; all judges, some judge, minus one, two, etc. in the week ahead as the National Assembly debates the issue.

Five days went by between President Musharraf’s resignation and the ensuing debate on the restoration of the judges among coalition partners. Now another five are sought to draft, move and possibly get the resolution approved in the National Assembly before any, some or all the judges can be hoped to be restored. Mr Sharif said his understanding was that by Wednesday next the whole process would be completed, while Mr Khan interjected to say that once the resolution was tabled the debate could stretch into Friday.

It is clear that while the tabling of a resolution in the NA and a debate on it are pledged, the restoration of the judges sacked on Nov 3, 2007 by President Musharraf is not. That is why perhaps Mr Sharif was quick to add that his party would wait until Wednesday; if all the judges are restored the coalition holds, if not his party would walk out of government.

In saying so Mr Sharif could not have been simply his naïve self once again, as is believed of him by some, for the vendetta he displayed while pushing the PPP for Mr Musharraf’s impeachment tells another tale. So does his party’s cajoling and shoving of the PPP with threats to quit the coalition on the judges issue time and again, even as coalition partners sought time to re-examine the modalities. Now Mr Sharif gives another unilateral deadline of Wednesday. What’s it with the man and his obsession with deadlines which apparently none of his coalition partners take seriously?

While Mr Zardari’s smooth-operator politics since the Feb election has come in for a lot of debate, Mr Sharif’s strategy of tagging along while threatening to quit the coalition has attracted little attention. Indeed the posturing on both sides has invited much scrutiny but substantially little has been surmised from it. This is perhaps because Mr Zardari plays the more interesting, guessing game, while Mr Sharif seems to say it as it is. But is it really as it is?

The politics of brinkmanship is painting neither side pretty. Five months into government, and the coalition has yet to make its presence felt. Given his posturing on the issue all this time, has Mr Zardari finally had what will appear to be a change of heart on the judges’ reinstatement? Or has he used it to extract maximum concessions out of the PML-N — securing the presidency for his party, letting Mr Musharraf off without accountability under foreign pressure and undertakings? So be it. It is time the government got on with the business of effectively running the country.

But given the PPP co-chairman’s persona, these sound too logical, optimistic and, to many, charitable conclusions to be drawn from the events as they have unfolded since he has taken charge of the party’s affairs. Two of the PPP’s most devout and intelligent leaders, Makhdoom Amin Fahim and Barrister Aitzaz Ahsan, respectively, have been giving odd vibes.

While the Makhdoom admittedly has shaky legs to stand on within or outside his party in the aftermath of his disagreements with Mr Zardari since after the Feb election, the barrister has been very cautious not to sever his links with the party even as he vociferously lobbies for the restoration of Justice Chaudhry. That Mr Ahsan is a man of logic and proven integrity is the only hope that something good and reassuring may come out of the debate in the NA over the judges’ issue.

If not, the country will see more chaos in the weeks ahead. If the ruling coalition unravels, the threat of destabilisation posed by the Taliban and an economy on a downward spiral will not be good news for democracy.