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| September 17, 2008 | Wednesday | Ramazan 16, 1429 |
Wall Street shudders
No safety for sewer workers
OTHER VOICES – European Press
Mbeki’s fight for survival
FOR Thabo Mbeki, it could have been the day that restored a reputation battered by perverse policies on HIV/Aids and Machiavellian strategies: the signing of a deal he brokered to end Zimbabwe’s political crisis and silence those who scorned his “quiet diplomacy” with Robert Mugabe.
THE domestic oil price adjustment announced by the Oil & Gas Regulatory Authority on Monday takes away a lot more in cash from consumers than it actually gives. On the one hand, the regulator has cut the petrol price by 5.8 per cent, and on the other, it has raised the prices of high speed diesel by 5.4 per cent, light diesel oil by 6.2 per cent and kerosene by six per cent. According to a report carried by this newspaper, the government stands to lose Rs75m a month on account of the reduced petrol prices. But, at the same time, it will rake in a hefty sum of Rs4bn to Rs4.5bn by raising the diesel and kerosene rates — the two products that form approximately 90 per cent or even more of the country’s total oil consumption. The government insists that it continues to provide the consumers a subsidy in the range of Rs9.42 to Rs10.93 per litre on diesel and kerosene.
The slash in the petrol price has apparently been made to pass on to the common man the benefit of the substantial reduction in the global oil rates over the past few weeks — world prices have shed over 40 per cent of their value to $88 per barrel from the record high of $147 in July. The government was under intense public pressure to cut the petrol prices in view of the falling global crude markets. The cut in petrol prices will have a limited effect, that too mostly in the urban areas. The impact of the increased diesel and kerosene prices is expected to be far more comprehensive and across-the-board. An overwhelming majority of the country’s population, already trying to cope with the accumulative effect of the 47 per cent power tariff rise in two months, will be further burdened. The prices of diesel and kerosene have already swelled by 77 per cent and 84 per cent since February. The higher diesel rates are likely to fuel food inflation, which is already touching a level of 35 per cent on account of the rising transportation and agriculture input costs as most tube-wells are powered by diesel.
The explanation given by the government for raising the diesel/kerosene and power prices is as inadequate as it is simple: the deteriorating economic conditions and increasing financial imbalances don’t allow us to be extravagant; we need to cut power, oil and other subsidies (as advised by the multilateral lenders) by the end of this fiscal to reduce expenditure and improve macroeconomic indicators. The question remains: how is the government going to provide relief to the poor? The government may consider thinking of its subjects too pedestrian a task; it cannot help but invent steps for self-preservation. As it raises prices, the government must simultaneously appear to be taking steps for improvement in the lives of the people.
THE swaggering titans of Wall Street are being humbled. The financial world’s annus horribilis continues with the latest casualty being the 158-year-old investment bank, Lehman Brothers, which filed for bankruptcy protection on Monday. Enormous, American-esque sums are involved: in its bankruptcy filing Lehman listed bank debt of $613bn, bond debt of $155bn and assets worth $639bn. (Pakistan’s GDP is approximately $160bn). Lehman’s failure was not the only bit of bad news on Monday: the American International Group, one of the world’s largest insurers, had its credit rating downgraded and is in desperate need of a $75bn credit line. It may be only a matter of days before AIG collapses next.
Understanding exactly what has gone wrong with American finance is difficult. Broadly, a housing boom in the US tempted banks to provide home mortgages to customers without investigating the creditworthiness of those customers too deeply. While the good times rolled, the banks sold many of those mortgages to investment banks like Lehman. When the housing bubble burst, however, people stopped paying their mortgages and foreclosures rose — causing the value of mortgage-related securities to nosedive and forcing the banks to write down their assets. Given the complex nature of the financial instruments involved, no one can be sure how much the mortgage-related instruments are worth — which has scared away fresh capital and sealed the fate of Lehman. Previously the US Treasury intervened to save Bear Sterns, an investment bank, and Fannie Mae and Freddie Mac, American mortgage giants. In the case of Lehman, however, US Treasury Secretary Henry Paulson decided that a moral hazard had been created and that the private capital market should now bear the losses from its own risky behaviour.
Here in Pakistan, the wrenching events on Wall Street do not bode well for the economy. The country is struggling with a current account deficit problem — $14bn last year — and desperately needs an infusion of billions of dollars, by some estimates up to $10bn. Besides securing cash from the international financial institutions, Pakistan is hoping to meet its dollars requirement by tapping into the international financial markets and offloading state assets such as the Qadirpur gas field. These efforts in the private sector are likely to become more complicated as global financial markets shudder in the wake of events in the US. No one it seems is safe from the implosion of the US housing sector.
A CITY cannot afford to have its sewers choked perpetually, so it will do something or the other to get the sewage flowing. Equally importantly, a city cannot afford to lose its sewer workers to choked drains, so it must do something to ensure their protection and safety. This, however, seems to have been lost on the city authorities in Lahore where deaths in choked sewers are not uncommon. Many poor and unprotected sanitary workers in the city have died over the last many months and years, working under intense pressure from their superiors and almost always without any safety gear. In the latest such incident two government workers died while attempting to clear a clogged sewer line last Thursday. Media reports suggest the families of the dead workers may not even get a pittance in compensation that the government pays in similar cases because the two were working as contract employees.
Buried unsung, these dead workers will never perturb the conscience of citizens and an indifferent government that fails to acknowledge the services and sacrifices rendered by ordinary workers to keep the city clean. In fact, the less said about the loss of lives, the better it is for the rest of the workforce: after all, in a city of about eight million people with hundreds of kilometres of decades-old, long sewer lines, sewage is bound to get stuck more often than not. And someone has to sort it out, no matter how dangerous the job.
Apparently the city government has some safety gear to avoid fatalities, but because of improper allocation of human and financial resources most of it remains non-functional. Gas masks and cylinders are there but there is no money to buy oxygen; deep-water gauges are also available but no one can operate them. This can only change if the authorities put human lives — those of citizens as well as of sanitary workers — above everything else. Anything less than that will not guarantee the safety and security of the hapless workers.
Fresh recruits
Kyiv Post, Ukraine
A NEW breed of younger politicians needs to be brought up in the political ranks to bring fresh ideas and constructive work in Ukrainian politics….
The relentless political bickering by parties and politicians that dominate is evident not only in parliament, but on a handful of talk shows that air on Ukrainian television. Politicians from each party can be seen each week on these shows accusing each other of everything from theft of state assets to treason to poisoning presidential candidate Victor Yushchenko....
[W]e will spare you the rest of the accusations, but offer a breath of fresh air in watching ‘Spokusa Vladoyu’ (which translates into Temptation of Political Power). The show kicked off this month on Ukraine’s First National state television channel.
Unlike other popular political talk shows which have turned into mouthpieces for manipulating politicians, this one gives novices — young Ukrainians trying to break into politics, some still students — a chance to debate on key issues…. They don’t have much experience yet…. But the two young men and women on the show this past Tuesday were well-versed in critical issues…. They did a remarkable job defending their positions compared to those currently in power. Most importantly, they offered solid, practical solutions to the country’s deep problems.
In these challenging times, when East and West are more at odds, Ukraine is stuck in the middle along a geopolitical fault line. Yet this cool-headed youth offered pragmatic solutions on what direction Ukraine should take and how it should carefully, constructively and patriotically deal with a bullying northern neighbour, as well as ineffective western partners that are indifferent to Ukraine’s importance, viewing it as a pawn in a bigger game.
The ‘Spokusa Vladoyu’ show helps demonstrate that the time has come for a new political elite to take over.
Rising up in politics will be a challenge. We urge the new generation not to sit on the sidelines grumbling, but seize the moment. Democracy is more than just voting. It is about active participation in politics. Taking office at regional councils in smaller cities is a good place for many to start. Ukrainian voters deserve more than they have been getting with the ‘Victor vs. Victor and Yulia’ show. — (Sept 10)
Instead, South Africa’s president will spend this week fighting for his political life as his party debates whether to remove him from office after a damning court ruling that accused Mbeki of apartheid-style tactics in illegally abusing the justice system to try and prevent Jacob Zuma from becoming the country’s next leader.
The agreement in Zimbabwe is a major triumph for Mbeki who managed to press Mugabe into conceding many of his powers to Morgan Tsvangirai. But that will count for little at home as leaders of Mbeki’s African National Congress decide his future following Friday’s ruling in which a high court judge, Chris Nicholson, threw out corruption charges against Zuma and said that the prosecution was the result of “baleful political influence”.
Nicholson said that Mbeki and members of his cabinet had abused the prosecuting authority in an attempt to remove Zuma from the “titanic political struggle” for control of the ANC. The judge likened Mbeki’s actions to those of apartheid-era governments. “In terms of the law, more especially emanating from the constitution, there is responsibility attributable to the president,” the judge said.
Now Zuma and his supporters are preparing to take revenge on Mbeki. The ANC national executive and its trade union confederation and Communist party allies are to discuss his future this week. The ANC’s chief whip in parliament, Nathi Mthethwa, told Johannesburg’s City Press newspaper that it is not a question of if, but when, the party will move against Mbeki.
A senior ANC leader told Johannesburg’s Sunday Times newspaper that Mbeki had to go. “The most obvious (position) would be to appoint a delegation that will ask him to step down,” he said. Mbeki can be removed through a vote of no confidence or by calling an early election.
— The Guardian, London
