World Bank’s advice

SPEAKING at a press conference in Islamabad on Thursday, the World Bank president, James D. Wolfensohn, proffered some sound advice to the people of this country and also promised to make available a Structural Adjustment Credit (SAC) of about 500 million dollars from the Bank’s highly concessional International Development Assistance (IDA) window in one tranche. Few would disagree with Mr Wolfensohn’s suggestion that Pakistan needs to focus more meaningfully and vigorously on social service delivery, especially education. And no one would perhaps dispute his emphasis on reforms in the CBR and public sector corporations, like Wapda and the KESC. His advice to the people not to lose patience with reforms which, according to him, take more than a life time to start yielding results is not only apt but timely too. He hit the nail on the head when he pointed out that the Pakistan-India conflict was the single most important hurdle in the way of poverty alleviation in the region.

A reformed CBR would facilitate income increases whereas the restructured public sector corporations would reduce the burden on the budget and also make it possible for the government to privatize them. Peace and stability in the region would enable India and Pakistan to considerably reduce their spendings on defence. The resources thus saved could then be spent judiciously on improving the lot of the poor masses by bringing within their reach health and education facilities and generating job opportunities for them. But all this is easier said than done because the process is bound to be long and complex, involving many hard decisions, policy readjustments and institutional restructuring. In this, patience is the name of the game. In fact, the generation which undertakes all these tough reforms may not even be there when they start yielding results. A national consensus, therefore, needs to be developed on these reforms and a bipartisan political approach adopted because no single person or government that initiates these changes would be able to see these through to their conclusion.

The World Bank president also said that Pakistan could reduce growing poverty if it achieved a five per cent growth rate in the near future. This view is perhaps based on a recent Bank report on Pakistan which stated that though the rate of inflation was low, the falling growth rate and a high population growth of 2.2 per cent had affected per capita income in the country. Industry has long been in recession, exports have not grown significantly, and agriculture has been held back by low productivity, weather vagaries and slow growth mode. Employment generation has lagged far behind the growth of the labour force, leading to rising unemployment and social tensions. But as long as Pakistan continues to adhere to the IMF’s condition of low budgetary deficits in the face of falling revenue incomes, (as a result of reforms perhaps), there is hardly any hope of achieving a five per cent growth rate in the near future. A depressed growth rate of 3-4 per cent would continue to generate less and less revenue which would keep the government’s ability to improve the lot of the poor seriously restricted. It would also cause unemployment to go beyond 10 per cent in the next couple of years. It is therefore, necessary that the Bank and the Fund sit together with the economic managers of Pakistan and come to some kind of an agreed formula to revive the economy through public spending on socio-economic development without causing any long-term and short-term macroeconomic instability.

This Cuba obsession

FORMER US President Jimmy Carter was in Cuba last week to help erase one of the last remaining chapters from the cold war saga. While in Havana, Carter met Cuban leader Fidel Castro and offered him a hand of friendship on behalf of the American people. He also urged Washington to take the first step towards ending the crippling trade embargo against Cuba. Carter called for an end to “the destructive state of belligerence of 42 years” between the world’s most powerful nation and the tiny island republic off its south-eastern coast. For over four decades, the US has tried everything in its power to destabilize Cuba and overthrow its populist strongman Fidel Castro. The Cuban people have endured all kinds of economic hardships because of the US embargo and yet remain unbowed by the pressure from their powerful neighbour. Carter has the support of 40 members of the US Congress who have formed the Cuban Working Group to campaign against the trade embargo and travel restrictions.

However, the Bush administration has not only dismissed pleas for a thaw in relations but is all set to announce a new set of anti-Cuba measures. It is likely to continue with the policy of imposing massive fines on US citizens visiting Cuba, keep tight curbs on trade, and increase funding for anti-Castro groups and a television channel beaming propaganda to the island from Florida. One member of the Bush administration went a step further recently and suggested that Cuba, along with Libya and Syria, should be put on the list of countries comprising the so-called axis of evil. According to this view, Cuba is developing weapons of mass destruction that could be used against the US. As against this, Jimmy Carter has given Cuba a clean chit and argued that the tiny island does not in any way constitute a threat to the mighty US. However, given the jingoistic mood in the White House these days, it is unlikely that voices of reason such as Carter’s will be heeded.

Wheat procurement blues

REPORTS from various districts of Punjab suggest that farmers are facing hardships in selling their stocks and getting the right price for their produce. There have been ugly scenes over the denial of gunny bags to the deserving farmers — a general complaint that persists despite official denials. Reports say that instead of meeting the demands of small farmers, gunny bags are often issued to the big landlords or those recommended by them, indicating that the procurement process remains skewed in favour of the influentials. There are also complaints by small farmers that food department employees are playing the role of an agent for the powerful middleman — for a consideration. Officials are said to refuse to allow wheat being offloaded unless they are bribed. Extortion and delays in revalidating final payment documents cause hardship and resentment among the affected farmers.

The irregularities involved in procurement are scandalous. If the farmers give in to the unjust demands for getting gunny bags and for offloading their produce, it is because after having spent sizable amounts on transportation of their produce to the procurement centres, they have no option but to grease the palms of corrupt officials. Gunny bags should be supplied to genuine and deserving farmers without discrimination on a first-come-first-served basis. District government and senior food department officials would do well to properly monitor the procurement process to ensure a fair deal for the farmers.