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DAWN - the Internet Edition


October 23, 2008 Thursday Shawwal 23, 1429


Editorial


IMF revisited
Beyond LoC trade
Growing power woes
OTHER VOICES - Middle East Press
Zardari’s debut in diplomacy
Feeding Africa



IMF revisited


PAKISTAN’S hopes of securing immediate funding from ‘friends’ to overcome its balance-of-payments crisis and avert a possible default on international debt have been dashed. Lenders are no longer ready to trust us with fresh cash handouts to squander on importing luxuries. This in spite of our ‘strategic location’ and us being a front-line state in the war on terror. Even the ‘strong commitment’ of many friends to support the nascent democratic government doesn’t compel them to open their coffers to us. The world expects us to ‘do more’ on the economic front — just as it wants us to do more in the terror war. Pakistan wouldn’t be able to tap global markets to raise cash even if there wasn’t a global liquidity crunch. The international rating agencies have already declared Pakistan the riskiest government borrower after Argentina.

The country’s finance managers are now preparing to appear in the court of the International Monetary Fund (IMF) to secure the funding needed to stave off a possible economic meltdown. It may now only be a matter of days before the government joins a fresh IMF programme. Pakistan and the IMF are already engaged in crucial talks in Dubai to determine the country’s exact cash needs. The IMF says Islamabad requires $10bn in two years to stabilise the economy. The last time Pakistan came off an IMF programme was in December 2004, insisting that it would never borrow from the agency again.

The decision to join an IMF programme now will be unpopular at home. But we have run out of options. The opposition to seeking the IMF’s help doesn’t stem only from the fact that its economic stabilisation recipes have been discredited around the world. The rulers dread going to the Fund because it imposes a tight fiscal framework on their functioning to ensure financial discipline by cutting expenditure. Ordinary citizens dislike it because the IMF conditions hurt them. The government has already removed subsidies on fuel. Subsidies on electricity will be eliminated by June 2009. The measures were taken in order to seek the IMF’s approval that could in turn send a positive signal to bilateral and multilateral lenders and restore investor confidence. With the most difficult measures already taken, there is little for the ordinary man to fear from the other possible conditions attached to an IMF loan. If anyone stands to lose anything from the IMF’s conditions, it has to be the rulers who should understand that this could be their last chance to stabilise the economy on a sustainable basis. And last may mean last this time.

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Beyond LoC trade


TIES between India and Pakistan, which suffered a severe setback when New Delhi accused the ISI of carrying out a bomb attack on its mission in Kabul last July, received a much-needed boost with the commencement of cross-LoC trade in Kashmir on Tuesday. While it is not altogether clear when such a move would make “borders irrelevant”, the measure is certainly a step in the right direction. By itself trade promotes more than an exchange of goods; it creates business opportunities that play a crucial role in cementing existing links between the countries in question. In the case of Kashmir, trade is bound to be driven in large part by cultural affinities, hence putting pressure on Pakistan and India to allow greater interaction between the territories under them. The pressure will be greater on India which has shown more inflexibility on the Kashmir issue and has lately had to cope with large-scale protests against New Delhi in the Indian-administered territory.

However, trade by itself will not expedite even a partial solution on Kashmir. Work must be resumed on a number of confidence-building measures before a more trusting relationship can evolve enabling the two countries to give concessions to one another. Moves on issues such as Siachen and Sir Creek may not have fizzled out altogether but appear to have achieved nothing so far. The Chenab water dispute, with all its potentially harmful repercussions for agriculture in Pakistan, is yet another heavy strain on relations. Meanwhile, there have been accusations on New Delhi’s side of Pakistan’s involvement in a series of blasts that rocked the Indian capital recently while there are suspicions at home about Indian consulates in Afghanistan, which some believe are supporting anti-Pakistan elements.

In this atmosphere of distrust, how can one expect the two countries to cooperate in fully activating the joint anti-terror mechanism set up some time ago? On the economic front, while the commencement of trade in Kashmir can be seen as an achievement, the failure of the South Asian Free Trade Agreement (Safta) to take off has prevented the two countries from strengthening economic ties. No doubt some progress has been achieved since the start of the composite dialogue in 2004, but it has been hampered by a trust deficit that has not narrowed. A sincere resolve to overcome the existing acrimony and cooperate with one another will go a long way in removing this hurdle.

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Growing power woes


A MAJOR hospital in Faisalabad, unable to employ alternative means of keeping its power supply up and running, is reportedly having to defer even life-saving surgical procedures owing to prolonged electricity outages.

In parts of the country rioting is being witnessed, while traders, industrialists and some political parties are threatening to launch their own protests if the government does not do anything soon to address what has now become a crisis situation. Commerce and industry are incurring huge losses, and prolonged factory shutdowns are hitting the country’s productivity hard. Hapless domestic consumers who are being made to pay through the nose for an on-again, off-again basic utility are also at their wits’ end. Indeed, there seems to be no end in the offing to the people’s misery. Outages of over 12 hours a day are common in rural areas and some of the bigger cities contend with almost as much on a given day under the euphemism of ‘unscheduled’ loadshedding. Do things really have to be this bad?

Granted, the existing power woes are a result of the previous government’s abject failure to increase generation capacity, but isn’t it time the current administration took stock of the situation and formulated a coherent action plan to ease the burden on consumers? The privations being faced become all the more unfair when consumers are forced to pay one of the highest per unit electricity tariffs in the region and beyond. The worst affected are arguably the country’s daily-wage labourers, whose work is stalled by interruptions in power supply and who have to wait it out for excruciatingly long hours to get their day’s work done and be paid for it.

Clearly, the people are resorting to rioting here and there because of sheer desperation and the absence of any light at the end of the tunnel. This brewing resentment should serve as a wake-up call for a government which can rightfully claim to enjoy the mandate of the people. Conversely, it is also the people it should feel accountable to. Unfortunately, so far it has had little to show in terms of concrete action being taken to tackle the issues which affect everyone every day. Rising food prices and costlier energy as well as supply shortages in both these key areas are obvious cases in point. Sitting idle is not an option for the government.

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OTHER VOICES - Middle East Press


Overdue homework

The Egyptian Gazette

THE ruling National Democratic Party (NDP) is due to hold its fifth congress at the beginning of next month under the slogan ‘New thought for the future of our country’…. But what about the present, which was in fact yesterday’s future? What has the ruling NDP done in the past to make [the] present more brisk?

Regardless of a development rate of seven per cent, the citizens have so far failed to see an improvement in their living standards. Despite, for instance, mega-telecommunication and road network projects and the occasional improvement in certain services sectors, poor performance and dilapidation still remain.… The ruling party has to understand that slogans are not the way into the minds of the people. The citizens couldn’t care [less] about the carefully-selected ornate jargon that expresses the party’s plans.

The agenda of the NDP congress for this year includes policies to upgrade the poorest 1,000 villages across the country, to develop mushrooming shantytowns and to expand water and sewerage projects…. The challenges posed by the high population growth rates are undeniably enormous. Yet, other more populous countries are ahead of us in economic growth rates. — (Oct 20)

A fine balance

The Peninsula, Qatar

HOSPITALITY demands mutual respect. You just can’t break the rules of the house at will and expect the host to put up with bad behaviour. Lest we forget, as we sometimes tend to, a judge in Dubai reminded us on Thursday when he handed a three-month jail sentence to a British couple that became this summer’s sensation with their drunken romp in a public beach in the emirate. The trial of the couple — who deny the charge and will appeal — has become a symbol of a culture clash.

For most of their modern history, the countries in the region (and none more than Dubai) have maintained a fine balance between tradition and modernity in their pursuit of economic growth, in welcoming outsiders and outside influences and preserving their Arab-Islamic identity. That balance, of late, has faced added strain with the region transforming itself into a global economic hub.

Laudably, the region has … made it quite clear that while it will turn a blind eye to some things that go on behind closed doors, it will otherwise preserve its standards of decency, even if it means putting at risk its burgeoning tourist industry. The region has a clear list of dos and don’ts. — (Oct 18)

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Zardari’s debut in diplomacy


By Tariq Fatemi

ASIF Ali Zardari, who was recently elected as the country’s president but now operates as its chief executive as well, has already travelled to the UK, US and most recently to China.

While his visit to Beijing was both important and urgent, rushing off to London and New York appeared unnecessary. In any case, Pakistanis were not too enthused to see their president extolling Bush for bringing peace to the world and crediting him for delivering democracy to Pakistan.

It was however his remarks in New York on India and more specifically on Kashmir that caused quite a stir. Though Indian commentators pointed out that this initiative could be a harbinger of a major change in Islamabad’s policy towards its eastern neighbour, Pakistanis were not amused by Zardari’s claim that “India has never been a threat to Pakistan”. Another faux pas was his reference to Kashmiri freedom fighters as “terrorists” — this at a time when the occupied territory is facing a spontaneous and indigenous agitation.

The normalisation process with India should of course be pursued with seriousness and sincerity. But Musharraf’s policy of unilateral concessions and advocacy of out-of-the-box solutions will neither satisfy the Kashmiris nor secure us the peace that people aspire for. The veteran Indian journalist Praful Bidwai however advocated that Zardari’s statements should be taken at their face value and “India must reciprocate Zardari’s overture by giving a determined push to the peace process”. This makes eminent sense but given India’s track record a meaningful initiative from Delhi is not likely.

By the time President Zardari decided to visit China, political discord, economic problems and deteriorating law and order had combined to pose the gravest challenge ever to the country. Moreover, Pakistan remained a key concern in the US presidential debates, overshadowing even Iraq and Afghanistan. A joint report by a dozen US think tanks also warns that “Pakistan may be the single greatest challenge” facing the next president. It calls on him to order a new National Intelligence Estimate (NIE) to determine what precisely the US should ask Pakistan to do to counter the terrorists, so that it could become the basis for developing a strategy that “seeks to adjust” Pakistan’s position in a cost-benefit analysis.

It was in this atmosphere that Zardari met with Chinese leaders, including President Hu Jintao and Premier Wen Jiabao. Twelve agreements and understandings were signed, including those relating to cooperation in the oil, gas, coal and mining sectors. The joint statement described our relations as an “all-weather friendship” that had “withstood the test of time and practice”. More importantly, China reiterated that it would “continue to view its relations with Pakistan from a strategic and long-term perspective and make joint efforts with Pakistan” to take this cooperation to new heights. It also referred to the Treaty of Friendship signed in April 2005 as “historic and of immediate significance”.

Contrary to media reports, there was no official word of any financial assistance, though a Chinese spokesman did affirm that Beijing was ready to “support and help Pakistan within our capability”. This was understandable because the Chinese are unlikely to extend major economic assistance, not because they do not have enough reserves at their disposal (currently estimated at over US$1.9tr), but because providing large cash grants is not in the nature of their policies. As regards cooperation in the civilian nuclear field, this would be forthcoming, as confirmed by Foreign Minister Qureshi. Chinese commitment on this score was, in fact, made some five years ago.

China remains Pakistan’s closest friend and strategic ally. This has been proven on more than one occasion. Nevertheless, notwithstanding the public bonhomie, Pakistan’s relations with China today are not without question marks. This is primarily because China is no longer simply a regional power that has to cater to Pakistan’s interests alone. As a world power, it has to see Pakistan through the prism of its global interests. Moreover, China has a laundry list of concerns vis-à-vis Pakistan that precedes the latter’s decision to join the US-led war on terror.

In this context, it is important to recall that while the Chinese were happy to see the Taliban being driven out of Kabul, they viewed Musharraf’s enthusiastic embrace of the US, without prior consultation with Beijing (as should have been done), with considerable misgiving. More surprises were in store for China when it saw Pakistan agreeing to unprecedented concessions being granted to US and Nato forces to use Pakistan’s facilities. This gave rise to concern not only in Beijing but in Moscow, Tehran and some of the Central Asian capitals as well.

But it was Musharraf’s policy of hunting with the hounds and running with the hares that left the Chinese nonplussed, unable to fathom how Musharraf could be a US ally in the war on terror while allegedly extending support to jihadist elements. They would not, of course, speak out publicly but their misgivings with our policy were deepened when Chinese nationals began to be targeted by the militants. It was only when Musharraf received a phone call from the Chinese president and their firms were advised not to send personnel to Pakistan that Islamabad woke up to the gravity of the situation.

Currently, China is also worried about recent strains between Pakistan and the United States, fearing that this could trigger greater instability in Pakistan that could delay or deny China the economic benefits that it wishes to draw from its relationship with Pakistan, including use of Gwadar Port and participation in the energy corridor project.

This does not however mean that the Chinese are willing to countenance any dilution in their strategic ties to Pakistan. This is indeed a ‘time-tested’ friendship, established by China’s founding fathers. Pakistan continues to be viewed as a potential counterweight to India, notwithstanding China’s efforts to improve relations with its southern neighbour. Moreover, Pakistan’s importance may not now be necessarily in the military sphere but increasingly in the economic realm. With China’s voracious appetite for energy growing by the day, it has to tap all possible sources and it is here that Pakistan could play an important role as a resource bridge to China, especially for the flow of oil and gas from the Gulf and Iran. It would be an expensive and difficult project, but given China’s massive energy requirements it cannot afford to depend on the vulnerable sea routes alone.

But for the full potential of Sino-Pak relations to be achieved, Pakistan has to set its own house in order and arrive at a national consensus on issues such as terrorism before it can draw China into its economic life. Zardari’s decision to personally chair inter-ministerial meetings to monitor the implementation of agreements signed with China may not be appropriate, but if seen as evidence of the government’s seriousness in this regard it should be welcomed. But it will need much more, including vision, imagination and resolve, to achieve this strategic objective.

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Feeding Africa


By Daniel Howden

ORGANIC farming offers Africa the best chance of breaking the cycle of poverty and malnutrition it has been locked in for decades, according to a major study from the United Nations.

New evidence suggests that organic practices are delivering sharp increases in yields, improvements in the soil and a boost in the income of Africa’s small farmers who remain among the poorest people on earth. The head of the UN’s Environment Programme, Achim Steiner, said the report “indicates that the potential contribution of organic farming to feeding the world may be far higher than many had supposed”.

A combination of increasing population, decreasing rainfall and soil fertility and a surge in food prices has left Africa uniquely vulnerable to famine. It has been conventional wisdom among African governments that modern, mechanised agriculture was needed to close the gap but efforts in this direction have had little impact on food poverty and done nothing to create a sustainable approach.

The research conducted by the UN Environment Programme suggests that organic, small-scale farming can deliver the increased yields which were thought to be the preserve of industrial farming, without the environmental and social damage which that form of agriculture brings with it. An analysis of 114 projects in 24 African countries found that yields had more than doubled where organic, or near-organic practices had been used. That increase in yield jumped to 128 per cent in east Africa.

The study found that organic practices outperformed traditional methods and chemical-intensive conventional farming. It also found strong environmental benefits such as improved soil fertility, better retention of water and resistance to drought. And the research highlighted the role that learning organic practices could have in improving local education. Backers of GM foods insist that a technological fix is needed to feed the world. But this form of agriculture requires cash to buy the patented seeds and herbicides.

— © The Independent

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