Unjust oil pricing system

THE controversy over the oil pricing mechanism created by the opposition is embarrassing for the government. That the issue has been raised now several months after the price of petroleum skyrocketed points to the patience of Pakistani consumers on matters which affect them seriously. When international oil prices jumped up earlier this year, the price of petrol in Pakistan also registered an increase. But when the international prices fell in October, our domestic oil market did not respond accordingly. Not surprisingly, this has provoked many people and now the opposition parties have filed three separate petitions in the Supreme Court challenging the oil price hike and the pricing system itself.

There are two aspects of this matter that need to be addressed. One is the pricing mechanism devised by the government in 2001 and the other is the levies the government charges on oil to generate revenues for the exchequer. There are two agencies that are concerned with the oil market/industry in the country. One is the Oil and Gas Regulatory Authority (OGRA) which was set up in March 2002 to “foster competition” and “protect the public interest”. The OGRA ordinance clearly defines its function to be to administering or fixing oil prices. The other agency is the Oil Companies Advisory Committee (OCAC) that was set up in the sixties and represents the oil and gas companies and provides them a forum to interact with each other and the government on matters relating to the management of the oil industry. But in 2001 it was assigned the responsibility of fixing the petrol prices. As could have been expected, the OCAC operates as a cartel and fixes the petrol price as it suits its own interest, without taking the public interest into account. Not surprisingly, petrol prices in Pakistan have risen phenomenally in the last five years and not in proportion to the rise in prices in the international oil market. And of course the profits of the oil companies have increased correspondingly — 20 times in one case. The plea taken by the OCAC is that prices are linked to the prices in the international market. But the benefit of falling world oil prices has rarely been passed on to consumers.

What is stranger still is the government’s move to manipulate the petrol prices to generate revenue for itself. At present, it is collecting Rs27.33 on every litre of motor spirit in the shape of excise duty, petroleum development levy, GST and inland freight equalization margin. The fact is that the cost of petrol has a multiplier effect on inflation in every sector of the economy. By the government’s own admission, it has earned five billion rupees a month by simply keeping the price pegged at the old rate even when the oil prices in the world market had fallen. It claimed that this was necessary to compensate for the losses it suffered when the price had touched the $70-a-barrel mark. It is time the government rethought its taxation policy which tilts too heavily towards indirect taxes which are easier to collect but place a greater burden on the poor. But levies on petrol fuel inflation. With the OCAC having a free hand in fixing oil prices and the government giving its tacit approval to the oil companies’ profiteering and greed, it is the consumer who ends up bearing the brunt.

Divisiveness on quake issue

WHAT could be a sadder reflection on the divisive nature of our national politics than the failure of the government and opposition to unite even on a subject as crucial as the rehabilitation of earthquake victims? A committee to oversee relief and reconstruction work, headed by Prime Minister Shaukat Aziz, was formed last month consisting of treasury and combined opposition members in the Senate and the National Assembly. However, there has been disagreement over the terms of reference outlining the supervisory powers of the parliamentary committee. The opposition, which had initially shown some willingness to take part in committee proceedings provided the government accepted certain conditions put forward by it regarding the role of the parliamentary body, has said that the government has not responded positively to its demands. The long-standing mistrust between the government and the opposition seems to have clouded this issue, with the Balochistan operation and the Kalabagh dam controversy further vitiating the climate. This has led the opposition to finally reject the committee.

One can sympathize with the opposition on certain points. After all, its demand for civilian heads for the Federal Relief Commission and the Earthquake Rehabilitation and Reconstruction Authority make sense, as the task of rebuilding cannot be left entirely to the generals. The inclusion of the civil bureaucracy is essential. But by opting out of the committee altogether, the opposition will have no opportunity to oversee other essential elements of the reconstruction effort, including the transparency of finances. This might be construed as a lack of interest in how the money for reconstruction is being spent, especially in the light of the fact that the opposition chose not to participate in the donors’ conference. Meanwhile, both sides have been short on specifics. What is needed is a point-by-point discussion on what each side wants and a spirit of accommodation for each other’s views. This is a matter that involves the future of 3.5 million people. Both the government and the opposition should realize this and refrain from taking rigid stances or indulging in petulant behaviour that can undermine efforts to rehabilitate the victims.

Judicial probe of Sangla arson

NEARLY 40 days after the horrendous Sangla Hills carnage we are still nowhere near ascertaining the truth. Christian leaders in Faisalabad are justified in their demand for a probe by a high court judge, considering that inquiries into the incident so far have not produced satisfactory results. It has been widely reported that a Muslim man owed a gambling debt to the man charged with the blasphemy. It was also reported that a 3,000-strong crowd was whipped into a frenzy by religious leaders, the area’s nazim and even a local PML-Q leader. Local journalists who covered the story have serious reservations about whether copies of the Quran were burnt as alleged and believe that the incident is a classic example of how blasphemy laws are often abused for settling scores and such other purposes. All these things need to be ascertained by an impartial panel which will have to establish the following: why did an SHO register a case against Masih when the amended blasphemy law requires that only a district police officer can do so? Second, why did the nazim, alleged to have led the mob, not follow the correct judicial procedure? And finally, why were the police lax in providing security when Christian leaders had made appeals for protection of their churches?

It has become routine for the government to condemn such incidents, order probes into them, pay victims paltry sums as compensation and then forget about it all — until another incident comes along. This apathetic attitude must give way to a more responsible approach. In the present case, a judicial inquiry must be held into the incident, the culprits brought to book and the erring police officers taken to task. Punishing the real culprits will send a clear message that such acts will not be tolerated, and that minorities are as secure in Pakistan as any other groups of citizens.

Primacy of a democratic framework

FOR over six years General Musharraf, first as Chief Executive and then as president, while retaining his position as COAS, has been the sole arbiter of the destiny of Pakistan. And now doubts are being expressed that he may be reluctant to relinquish his absolute power and uniform even after the general elections in 2007.

The all-important question is what are the implications for the country of a prolonged military-dominated dispensation and what legacy is General Musharraf likely to leave behind.

Clearly, the events of 9/11 vastly helped him steer the country away from isolation, in which it found itself as a consequence of the nuclear detonation of 1998 and the military coup of 1999. Yet the credit must go to the general for bringing about a major shift in foreign policy, albeit under compulsion. The government withdrew support from the internationally castigated Taliban regime and aligned the country closely with the United States and won the approval of the West and the international community with attendant benefits. Improvement of relations with India has been another hallmark of this regime. He has done a fine strategic balancing between China and America by allowing the interests of both to be met without creating any undue apprehensions.

President Musharraf has been making earnest efforts at breathing life into the OIC. Nonetheless, his tight embrace of the United States and the major shift he has brought about in the debate on Kashmir has come under criticism. Despite excessive reliance on the military instrument in the war on terror, peace in the tribal belt remains elusive. South and especially North Waziristan continue to be the stronghold of the Taliban.

The sharp divide between terrorists and those who are fighting it militarily has denied political space to a large cross section of tribal leaders as well as the civilian administration to play an effective role in the spread of moderation and normalization.

During the current transitional phase of democracy in Pakistan, Musharraf remains for the West its foremost choice. Washington’s full backing of him is primarily motivated by its short-term security interests rather than its long-term benefits, as democracy can stay in transition. Musharraf’s liberal and “reformist” approach is appealing to the United States, although doubts remain about the duality of some of his policies. Foreign support and recognition, undoubtedly, has been helpful in consolidating his position in our volatile political and economic environment. But without broadbased political support it would not be possible for him to bring about lasting domestic peace and national cohesion.

President Musharraf all along has been highly pro-active in seeking the resolution of the Kashmir conflict. Pakistan being the non-status quo power has to demonstrate greater flexibility than India. Nonetheless, proposals emanating from the president to make any headway need to be first discussed in the parliament and the cabinet and then taken up with India as part of the on-going Indo-Pakistan dialogue or through back channel diplomacy.

Public airing of solutions could give New Delhi an excuse to trivialize and drag the issue. Moreover, the political dynamic of India is very different from that of Pakistan while dealing with issues of great national importance. General Musharraf’s commando background makes him impatient and he wants instant answers and quick solutions, so much so that he thought the Kashmir dispute could be resolved in a few hours’ time. What is needed is to have a clear vision of what is achievable and then stay on course in a sustained spirit. In the field of high-stake diplomacy leaders should translate their political ideas into a series of more specific, almost technically detailed proposals.

On other major national and international issues too President Musharraf has been fairly arbitrary and dismissive of the system. Construction of Kalabagh dam is illustrative of his style and method of governance. Kalabagh dam, despite its merits as a reservoir, because of mishandling and a cavalier-like approach, has accentuated the suspicions between Punjab and the three smaller provinces and has widened the civil-military divide.

Similarly, when President Musharraf talks of shedding his uniform, he wants this decision to be left to him instead of allowing the parliament to determine when and how. Whereas, the army has done commendable relief and rehabilitation work in the earthquake-affected areas, non-involvement of the civilians in the management has generated an unfortunate controversy.

General Musharraf’s highly self-centred and personalized decision-making style undermines the role of parliament and retards evolution of the political process. Clearly, all the political parties, including the ruling PML-Q have been gravely emaciated over these years. It is paradoxical that many parliamentarians, even among the ruling PML-Q, do not share President Musharraf’s vision.

The battle of attrition that successive governments, including the present one, have waged against political parties, trade unions and student organizations has greatly weakened the country’s political structure. Self-serving and ineffective leadership within the political parties has been another major factor in this downward slide. A parallel effort has to be made by the political forces to improve their internal democratic structure and their ability to address the major challenges facing the country.

President Musharraf’s highest priority should have been to strengthen institutions that can operate in accordance with their legal rights, whether it be the cabinet, election commission, the Federal Public Service Commission or political parties. Unless the country has institutions that respect the rule of law and are based on meritocracy, the whole foundation of the state will remain on slippery grounds. The country today needs politics of change and not of status quo. Manipulation of institutions for political expediency can threaten the integrity of the state, as we have witnessed in the break-away of erstwhile East Pakistan. Furthermore, extensive involvement of the armed forces in civilian affairs has far-reaching implications not only for the professional competence of the armed forces but is also harmful for the civil sector.

President Musharraf’s policy of “enlightened moderation” and his efforts to present Pakistan as a moderate Islamic state is fine, but the irony is that he is pursuing these moderate policies after marginalizing the centrist parties, which is a major contradiction. Besides, to bring about that kind of transformation he has to ensure that there is no support for the militant elements in Kashmir and no co-existence with radical elements in the tribal belt.

Although no two economists would agree but as a lay person one has to acknowledge that Pakistan today is economically in a far better position than what it was six years ago. The country’s strategic alliance with the United States in the “war on terror” has been a major contributory factor in achieving macro-economic stability. Rescheduling of loans, higher remittances and increased international assistance came as a reward for our role. But equally it is because of the improved fiscal and monetary management by the prime minister and the Governor, State Bank, with full backing of the president.

Implementation of second-generation reforms and the continuation of existing policies will, however, be possible only if the country’s systems are based on the rule of law and meritocracy. If the criteria of getting a job is feudal, tribal or military connections, or ethnic or sectarian considerations, then governance takes a back seat with adverse social and political consequences. What we need to develop is a value system of the state that is uniform and equitable.

There cannot be two standards, one for the ruled and the other for the ruling elite. Moreover, for sustained growth there has to be far greater emphasis on human resource development, especially on scientific and technical education and building of a sound physical infrastructure.

Unless the government moves towards democratic governance with appropriate checks and balances, the rulers will remain surrounded by sycophants who would only feed them with what they want to hear. Repeatedly we have experienced that political, economic and social reforms that are not backed by a credible and honest operational mechanism, seldom get implemented.

General Musharraf’s ability to stabilize Pakistan will depend on how far he can accommodate politicians who can develop a national consensus for tackling deep-rooted problems, whether it is poverty, ignorance, extremism or resolving the Kashmir issue or constructing the Kalabagh dam.

The writer is a retired lieutenant-general of the Pakistan Army.