State of the economy

DESPITE high oil prices and the earthquake, the State Bank sees a GDP growth rate of 6.3-6.8 per cent against the target of seven per cent for 2006. Though lower than the exceptional 8.4 per cent of the previous year, the rate will be higher than the anticipated long-term trajectory of six per cent per annum. The State Bank sees continuation of strong growth in the manufacturing and servicing sectors but does not share the government’s optimism about growth in agriculture, in view of the latest output estimates of cotton and other major crops. While recording the positive trends, the SBP Annual Report 2005 is worried about risks to sustainable economic growth. The first and foremost factor troubling the central bank is the persistently high domestic inflation though many see a slow tightening of the monetary policy by the SBP as being responsible for it. The annual CPI inflation rose to 9.3 per cent by end June 2005 —the highest since 1997. The SBP has targeted inflation at eight per cent for the current fiscal year. Inflation has tended to erode savings as did the negative returns on bank deposits.

Stating that growth has come from a sharp rise in private consumption as much as from robust growth in investment, the State Bank says that the fact that a steep drop in savings parallels the rise in consumption raises a note of disquiet. For the first time in six years, the national savings rate has fallen from the 2003 peak of 20.8 per cent to 15.1 per cent of the GDP in fiscal 2005. It is also reflected in the large current account deficit. However, the State Bank reckons that these current account deficits and trade imbalances are not yet enough to cause a serious problem. But what it ignores is that a falling rate of savings can increase the country’s reliance on foreign debts. Another potential vulnerability, the SBP report notes, lies in the country’s fiscal position of declining tax buoyancy, the tax-to-GDP ratio falling to 10.1 per cent in 2005 from 11 per cent in 2004. The risk is further enhanced by the rising interest rates impacting on the government’s debt servicing costs and shrinking of fiscal space because of spending on relief and rehabilitation of recent quake victims. The SBP has advised the government to cut current expenditure as the budget deficit has tended to rise by 0.1 per cent per annum for the last three years.

In short, the central bank believes that the economy is now delicately poised and requires prudent handling. But not many subscribe to its threshold level of eight to 12 per cent inflation. The general perception is that high growth with low inflation is good for the economy and the people. The worst sufferers are the poor, fixed income groups and the unemployed, their position further aggravated by the prevailing social conditions. According to the SBP report, the social sector indicators still do not present a satisfactory picture with high regional, gender disparities and a 7.7 per cent unemployment rate. The strategy for economic growth has not been able to check the weakening of macro-economic indicators including the trickle-down effect and is devoid of equity. With consumers who contributed to growth last year now impoverished, the domestic market will shrink, paving the way for recessionary trends to set in sooner than later. The focus should, therefore, shift to pro-poor growth.

A volunteer corps

BY pledging to prove “cynics and rejectionists” wrong, President Pervez Musharraf has taken up a challenge for himself and for his administration. There is no doubt that the nation will watch the outcome with hope. Addressing a press conference in Islamabad on Monday, the president showed his displeasure over the opposition’s allegations that the government machinery was slow to respond to the Oct 8 disaster. Apparently, the opposition got some ammunition from the troops’ inability to reach the victims because landslides had blocked all access to quake sites. Since then the army has moved out, and the availability of relief goods and the presence of foreign volunteers have made some difference to the situation. However, as the president himself said, the end of the relief work would be followed by the real task — the rehabilitation of the victims. This is a daunting undertaking and involves all that normal life assumes — homes, jobs, schools, hospitals, transport and a functioning government apparatus. At present, all this does not exist

Foreign volunteers will soon be going away, leaving the long-term task for the government to handle. Will the bureaucracy, then, be able to cope with reconstruction on its own? The National Volunteer Movement idea is sound. It seeks to involve youths above 18 in the task of reconstruction. But details need to be worked out, for the people do not lack a spirit of sacrifice and philanthropy as the days and weeks following the earthquake have shown. Obviously, the government will have to seek the cooperation of the opposition parties, some of which do have trained cadres, to make the idea of a volunteer corps successful. This is a serious task far from the kind of flippancy in Prime Minister Shaukat Aziz’s and Frontier Chief Minister Akram Durrani’s announcements that their ministers will go to the affected areas and spend Eid with the victims. Those hit by the earthquake need food, homes and medicines and not politicians more eager to catch media attention than to provide succour to anyone. It would be much better if the ministers went to their own constituencies to know their voters’ problems and tried to solve them.

A grisly act of violence

SATURDAY’S beheading of three Christian schoolgirls by unknown assailants in Poso, a district in the Indonesian province of Central Sulawesi, is a grisly reminder of the tensions between the Muslims and Christians in the area. Violence between the two communities in Poso erupted in 1998, and despite a peace agreement signed in 2001, sporadic sectarian attacks have continued. More than 1,000 people have died in the attacks, while many more remain displaced. The accord has been violated a number of times, and the attacks are likely to continue so long as the Indonesian police — which themselves admit that few perpetrators have been nabbed and brought to justice — does not take firm and decisive action against those whose aim it is to incite communal passions.

In the present case, too, the provincial police chief has said that the beheading was intended to create chaos, while the governor has pointed out that violence in the area has been going on despite calls for peace by religious leaders whose influence over their respective communities seems to have diminished. This makes it all the more necessary for the government to catch the criminals and award exemplary punishment to them. At the same time, other grievances that may be contributing to the tensions should be identified and dealt with. Among these is the issue of a more equitable power-sharing arrangement between the Christians and the Muslims in local government. The other is related to poverty due to lack of investment in this remote area which has a history of violence and bloodshed. It is not surprising, therefore, that insecurity and day-to-day economic frustrations among the people have led to communal violence, especially with agents provocateurs representing militant religious groups on the lookout for opportunities to incite violence among the people.

Rosa’s amazing grace

IN THE summer of 1990, Nelson Mandela, finally a free man after nearly three decades of incarceration, arrived in the United States of America. His 11-day visit was aimed primarily at persuading the US to maintain economic sanctions against South Africa until apartheid irrevocably crumbled in his homeland.

His eight-city itinerary included Detroit, which had been home to Joe Louis, the boxing champion Mandela had admired when he himself was a young pugilist. But he also had another good reason for stopping over in Motor City. He was keen to meet someone who lived there.

She, too, was eager to meet him. She looked upon him as her “symbol of hope”. “He is our future,” she had said. But the Detroit planning committee had ignored her, until a judge of her acquaintance remedied the unfortunate oversight. “It’s not proper,” the little old lady remonstrated. “They don’t need me.” Her embarrassment and nervousness did not ease as she was escorted to the front of the receiving line on the tarmac. “He won’t know me,” she kept repeating.

Historian Douglas Brinkley takes up the story: “Moments later the airplane’s door opened and Nelson Mandela, accompanied by his then-wife Winnie, appeared and waved to the enthusiastic crowd .... Slowly he made his way down the steps and to the receiving line. Suddenly he froze, staring open-mouthed in wonder. Tears filled his eyes as he walked up to the small woman with her hair in two silver braids crossed atop her head. And in a low, melodious tone, Nelson Mandela began to chant, ‘Ro-sa Parks. Ro-sa Parks. Ro-sa Parks,’ until his voice crescendoed into a rapturous shout: ‘RO-SA PARKS!’

“Then the two brave old souls .... fell into each other’s arms, rocking back and forth in a long, joyful embrace.” Mandela may or may not have been aware of Rosa Parks’s activism on behalf of the subjugated majority in South Africa, but he certainly knew about her crucial role in resisting apartheid in America.

Among innumerable other facets of racial discrimination 50 years ago, public transport was segregated throughout the southern US. This didn’t only mean that blacks could only be seated in the back of a bus: in the event of any white passenger being left standing, they had to relinquish their positions even in the “coloureds” section of the bus. What’s more, after purchasing a ticket from the driver, black passengers were often expected to get off the bus and go down to the rear entrance, instead of walking down the aisle. Sometimes the drivers deliberately sped off before they could re-enter.

Such everyday indignities and humiliations were a dime a dozen in Montgomery, Alabama, where Rosa Parks earned her living as a seamstress. One day in November 1943, she boarded a bus driven by a particularly vicious bigot by the name of James Blake. Even though the rear section was packed, he ordered Rosa to get off and go to the back door. She stood her ground, but silently vowed that she would never again ride in a bus driven by Blake.

She kept her vow for 12 years. But on December 1, 1955, after a long and tiring day at work, she boarded a Cleveland Avenue bus and apparently the identity of the driver did not immediately register. She sat down in the first row of the “coloureds” section. There were seats empty in the whites-only section, but they began to fill up, and after a couple of stops there was one white man left standing. The driver then asked the four people in Rosa’s row to vacate their seats. After some initial resistance, three of them got up and went to stand in the back.

Rosa slid over to the window seat vacated by a fellow passenger without getting up. By then she had noticed who the driver was: James Blake. He walked up to her and asked: “Are you going to stand up?” She stared right back at him and said, “No”. Something inside her head had snapped. Prim and proper Rosa Parks, even-tempered to an extent that could be mistaken for docility, had at last decided that enough was enough. She wasn’t going to take it anymore. “I did not wish,” she later noted, “to be continually humiliated over something I had no control over: the colour of my skin.”

Back in the bus, Blake opted for intimidation: “Well, by God, I’m going to have you arrested,” he threatened. “You may do that,” replied Rosa calmly, softly, without rancour or agitation. She never doubted for a moment that, morally, she clearly had the upper hand; that Jim Crow — as the system of racial segregation was known — was not just wrong but evil.

Rosa Parks was duly arrested. She had been behind bars only for a couple of hours before friends, black and white, bailed her out. News of her imprisonment had sent a frisson through Montgomery’s African-American population: anyone who knew her recognized her as a model citizen. The National Association for the Advancement of Coloured People (NAACP), which had been longing for a test case to challenge Alabama’s segregated transport laws, realized it had found the perfect plaintiff.

With the cooperation, in some cases reluctant, of Montgomery’s black churches, a boycott of the city’s buses was planned for the following Monday, to coincide with Rosa Parks’s court appearance. A crowd had gathered outside the courtroom, and as Rosa made her way inside, a young woman screamed out: “Oh, she looks so sweet. They’ve messed with the wrong one now.”

The boycott was so successful that it was decided to extend it, and the Montgomery Improvement Association (MIA) was set up to oversee the mass disobedience campaign. An ambitious 25-year-old preacher, who had moved to Montgomery just a year earlier, was chosen to lead the MIA. His name was Martin Luther King Jr. Although some of the other local leaders resented it, the choice turned out to be an inspired one.

The boycott of Montgomery’s buses by virtually the entire black population of the city eventually lasted for 381 days, until a US Supreme Court ruling calling for desegregation, based on a separate case, was implemented. By then King was a national figure who sensed the time was ripe to take his campaign beyond Alabama.

The reticent and self-effacing Mrs Parks, meanwhile, had become a symbol of resistance across the world, but she was hurt by jealousies within the movement, even as vile death threats from infuriated white racists kept pouring in. They had driven her husband to the verge of a nervous breakdown. With both of them effectively unemployable, they decided to move to Detroit.

Rosa Parks’s involvement in the struggle for civil rights hadn’t begun on that December morning in 1955: she had by then been secretary of the local NAACP branch for years. And it didn’t end with her move to Detroit, where she worked for 23 years as an aide to Democrat Congressman John Conyers and devoted a great deal of time to mentoring young African Americans. She was disenchanted with some aspects of the civil rights leadership, notably its sexism, and her patience had its limits when it came to non-violent resistance. Malcolm X fascinated her in the early 1960s and, many years later, she lent her imprimatur to Louis Farrakhan’s Million Man March.

In her dotage, when the establishment no longer construed her as a threat, Rosa Parks’s historical role as a catalyst was recognized with the United States’ highest award, the Congressional Gold Medal. This week, after a congressional resolution moved by Conyers, she became the first woman to lie in honour in the US Capitol Rotunda.

Such tributes are, of course, richly deserved. Any greatness that the US can truly boast of is embodied in the lives and deeds of those Americans who stood up — or, in Rosa’s case, sat down — in an effort to stem the process of dehumanization. There are obvious lessons to be drawn from the fact that so many of them were African Americans. And it’s equally important to remember that, although race relations have significantly been transformed in the past 50 years, informal segregation remains in place, supposedly a byproduct of capitalism rather than bigotry — although, as the aftermath of Hurricane Katrina reminded us, race and class remain intricately intertwined. If the nonagenarian Rosa Parks hadn’t died last week, the bulk of this column would have been devoted to a less well-remembered American. Exactly 40 years ago today, a young Quaker by the name of Norman Morrison burned himself to death outside the Pentagon. “He did it in Washington where everyone could see,” wrote the British poet Adrian Mitchell, “because/ people were being set on fire/ in the dark corners of Vietnam where no one could see/.... He simply burned away his clothes,/ his passport, his pink-tinted skin,/ put on a new skin of flame/ and became/ Vietnamese.”

Morrison became a folk hero — not in his homeland, but in Vietnam. When his widow and children visited that country decades later, they were moved to find that the mention of his name brought tears to the eyes of many older Vietnamese.

Unlike Rosa’s resistance, what Norman did cannot generally be recommended as a course of action. One could, however, suggest to those determined to give their lives for one reason or another, that their cause is likely to be better served if they, instead of strapping on explosives and targeting innocent live, chose to follow Morrison’s example.