Mixed economic trends

THE government believes that an estimated bumper crop of 22 million tons of wheat, a better than expected rise in informal livestock production and the expansion of the services sector would push up the narrow-based economic growth above the targeted 7.1 per cent this year. While missing out on some of the key macro-economic targets and suffering from chronic structural imbalances, the economy seems to be growing faster than the expectations of the policymakers and official forecasts. However, the economy’s performance cannot be assessed based on the GDP criteria alone, when some vital but negative economic trends are becoming more pronounced while social indicators are not strong enough to make the growth socially sustainable. The official estimate that agricultural growth would touch five per cent against this year’s target of 4.5 per cent has to be seen against the background of the weak performance of three major crops — cotton, rice and maize — which overshadowed the impact of a rise in sugar production. The size of crops fluctuates from year to year and differs widely from initial to final estimates. An accurate assessment of livestock production is not so simple because much of it is in the informal sector.

In its first quarter report 2007, the State Bank recognised the “challenges” facing industry and agriculture, adding that “the achievement of the annual growth target will require the service sector to turn above the target growth rate.” The report was based on the lacklustre performance of kharif crops and a slower increase in the Industrial Production Index at 7.6 per cent against 7.9 per cent in the same period last year. The State Bank also questioned the official data on a supposedly big jump in textile (sub-group) output when its export growth had slumped. Textiles, the largest industrial segment that contributes the bulk of export earnings, is in distress and looking for an official bailout. Its bank credit offtake is much less than originally estimated. The overall exports are currently growing at 3.89 per cent against the targeted 18 per cent. This indicates the sluggish rise in export-oriented production. In the first quarter, the growth in automobiles, fuelled by domestic demand, slumped to 11.1 per cent against 33.1 per cent during the comparable period last year. Corporate profits are on the decline. The growth in wholesale and retail trade is now estimated at 7.2 per cent against the original target of 8.8 per cent. Sectoral imbalances are also mounting. In the first quarter of 2007, the consumer goods industries grew at 13.1 per cent as compared to 9.5 per cent in the same period last year; and the capital goods output registered a much lower growth of 9.6 per cent, down from 30.1 per cent — a single digit growth for the first time since 2004.

Though buoyant, the external sector is far from robust. With the worsening trade and current account deficits, the risks to the economy are mounting. Inflation is affecting export competitiveness. The trade deficit touched a record $8.9 billion during July-February 2007 and the current account deficit is expected to reach $8.8 billion — up from the $6.3 billion target. The model of economic growth being pursued is widening the gap between the rich and the poor, with food inflation of 10.33 per cent eating into the purchasing power of the vulnerable. It is time to focus on social indicators, poverty alleviation, food security and on correcting economic imbalances. Without equity, GDP growth alone, though important, is not enough.

Judicial resignations

A LAHORE High Court judge and two judicial officers in Sindh have resigned, while resignations by several other senior judges have not yet been confirmed. The most telling letter of resignation was by Mr Justice Jawad S. Khawja of the Lahore High Court. Addressed to President Pervez Musharraf, the letter said he was resigning because of “the harm done to the judicial arm of the state”, even though he had waited in the hope that something would be done by the president to remedy the situation. In Karachi, a senior civil judge said he was resigning because “my conscience does not allow me to continue as a judicial officer”. There is no doubt that the treatment meted out to Mr Justice Iftikhar Mohammad Chaudhry and the subsequent events have confronted the military-led government with the country’s worst judicial crisis. The text of Mr Justice Khawja’s resignation letter is not available, but the substantive paragraph available to the Press does not specifically refer to the “non-functional” CJ’s case. In fact, according to Supreme Court Bar Association chief Muneer Malik, Mr Justice Khawja has resigned over “police excesses”, the baton charge on lawyers and tear-gas shelling on the premises of the Lahore High Court building.

The harm done to his government’s image was more or less admitted by the president in his Monday’s TV interview when he spoke of “tactical mistakes” by officers at the lower level. Earlier, he had condemned and apologised for the attacks on the Geo and Jang offices. The issue now must be clear to him. What has happened cannot be undone by mere apologies. There is no doubt that street protests will sooner or later end, thus focussing the nation’s attention on the outcome of the reference to the Supreme Judicial Council. Mr Justice Chaudhry must be given every opportunity to defend himself, and the trial must be open to the media. The government should do nothing that would even remotely suggest that it is putting pressure on the SJC members or is acting in a manner that makes the people smell a rat. After having messed up with the higher judiciary, this is the least it can do to retrieve the situation.

Caring for zoo animals

IT is tragic that a one-year-old tiger died on Sunday of a fatal parasitic disease as well as tuberculosis at the Lahore Zoo. It is the fourth tiger to have died of the disease in less than a year. This makes it imperative for wildlife authorities to ensure that the other three cats, which tested positive for the parasite theleria babesia, are given the proper care they deserve. In February this year, the zoo authorities had said that because of inter-breeding at the zoo, the big cats were prone to bacterial and viral infections which caused their deaths. It was for this reason that they planned to import pairs of lions, leopards and tigers. Before the animals arrive and settle in their new environs, the authorities should ensure that they have veterinarians at hand to deal with all animals’ health problems. At the moment, Lahore zoo has one vet who is also working as the zoo’s deputy director, so he cannot be expected to attend to the animals’ needs. It is disturbing that this has been the situation for quite some time and that so many animals died just because they did not receive adequate medical care. What is worse is that the vacancies for veterinarians have yet to be filled. This must be expedited.

One good first step is the administration’s decision to set up a laboratory on the zoo premises. This should be done at the earliest so that all animals can be tested for diseases. Other zoos should take note and follow suit for the best welfare of all animals. Conditions at all zoos are generally poor, especially sanitation, and need drastic improvement. Indeed, the welfare of animals should be the top priority and those who neglect them should be taken to task.

Unwelcome in his own backyard

By Mahir Ali

UNTIL a couple of days ago it had been my intention to conclude this column by drawing a comparison, in terms of their success, between George W. Bush’s foray into Latin America and the Pakistan cricket team’s Caribbean jaunt. The unfortunate demise of Bob Woolmer in the wake of the St Patrick’s Day encounter rendered that idea tasteless, although it’s safe to say one wouldn’t have been equally disturbed had a comparable misfortune befallen one of the US president’s coaches.

He has plenty of them, ranging from his Svengali, Karl Rove, to his secretary of state, Condoleezza Rice, who was tasked with tutoring the debilitatingly incurious candidate in foreign affairs ahead of the 2000 election. Either the pupil was hopeless or she didn’t do a particularly good job, because George W. thus far hasn’t managed to obtain passing marks in any foreign policy test he has faced.

The most crucial of these has, of course, been Iraq: a test brought on by presidential fiat rather than dictated by circumstances. It has been his biggest failure. Almost everyone agrees on that, albeit not exactly in the same way. Some of the newly empowered Democrats, for instance, tend to see the invasion as the biggest foreign policy blunder in US history, as Senate majority leader Harry Reid put it not long ago.

Around the world, however, many people look upon the war that entered its fifth year this week as more than a blunder: from their perspective it looks like a monumental crime.

What’s more, it’s the sort of crime that the US has committed before and is likely to commit again. Uncle Sam is a repeat offender when it comes to belligerence, and no continent is better acquainted with this predilection than Latin America. So it would be interesting to peek inside the head of whoever came up with the idea of despatching Bush southwards earlier this month.

Nobody could seriously have thought that a presidential journey across Latin America would provide a distraction from the bloody chaos in Iraq, and it was probably no more than fortuitous for Bush that for a few days he was largely spared awkward questions about the growing scandal over the dismissal of US federal prosecutors and the White House’s role in it. The apparent logic behind the trip lay in an effort to re-engage with what the US has long regarded as its backyard.

There is some truth in the contention that the events of 9/11 and Washington’s brash reaction to them diverted American attention from almost everything else. But even before that there was a growing sense of complacency about Latin America that contrasted with the sharp eye that the State Department and the CIA kept on the region in preceding decades, when any government seen to be instituting policies that could potentially interfere with the stupendously profitable operations of US corporations was crushed by one means or another.

Brutal military takeovers, as in Guatemala in 1954 and Chile in 1973, were once the foreign policy instrument of choice for the US. Terrorism was another option: it was practised in Nicaragua throughout the 1980s and, after exacting a heavy toll, eventually succeeded in its aim of producing “positive” electoral results. There was one little island where none of the strategies worked, but the Cuban revolution was widely expected to starve to death in the 1990s following the collapse of the Soviet Union.

By then everywhere else in the continent there were ostensibly democratically elected right-wing or centrist regimes that broadly went along with the neoliberal economic policies preached by the IMF and the World Bank. Poverty deepened across the region, but that didn’t matter as long as US corporations had the freedom to exploit natural resources and rake in the profits. Many countries descended ever deeper into debt, which only added to Washington’s leverage.

Then, strange things began to happen. For one, the Cuban revolution survived what the authorities in Havana described as a Special Period without compromising too many of its ideals. Equally significantly, grassroots movements began springing up throughout the region in opposition to neoliberal excesses. The Argentinian economy collapsed. In Bolivia, workers organised themselves to successfully reverse the privatisation of water by a subsidiary of the Bechtel Corporation. The unrest paved the way for the emergence of new political forces.

There wasn’t too much trepidation in Washington when a former military commando by the name of Hugo Chavez won the 1998 presidential election in Venezuela by a landslide. It was assumed that his outbursts about redressing socio-economic inequalities were little more than empty rhetoric. That, after all, had been the political tradition.

The alarm bells started clanging only when he began translating his words into action. Despite its preoccupation with the “war on terror”, the US collaborated with its natural allies in the Venezuelan business community and military establishment to precipitate unrest along the lines that had proved so successful in Chile 30 years earlier.

But Chavez had comrades in the army, and a coup against him in 2002 collapsed within a couple of days in the face of a popular upsurge.

Chavez’s survival not only made him more brazen, it also gave renewed hope to popular movements across the continent: they realised that a progressive government supported by a majority of the people could no longer easily be dislodged.

In the years since then, the trend towards electoral successes for left-wing parties has steadily grown. In some cases it has not meant as much as it should have, and one of the intentions behind Bush’s visit was to draw a distinction between “good leftists” such as Brazil’s Luiz Inacio Lula da Silva – a former trade unionist whose first term in office deeply disappointed his strongest constituency – and others who pose a palpable threat to the capitalist order, such as Chavez and Bolivia’s Evo Morales. An even more obvious item on Bush’s agenda was to counter the growing influence of Chavez, who has been extraordinarily generous with Venezuela’s oil revenues, and who has vociferously been advocating a Latin American economic union that could potentially leave the US out in the cold.

Although such a development isn’t yet on the horizon, the prospect is a profoundly disturbing one for the likes of Bechtel and Halliburton. Throughout his political career Bush has seldom wasted an opportunity to stand up for big business. Somewhat ironically, this time he was compelled to ply his trade by feigning concern for Latin America’s impoverished masses and suggesting that their salvation lies in American aid and more free trade.

He came up with problems on both counts. US aid to the whole of Latin America currently stands at $1.6 billion – not much more than the weekly cost of maintaining the occupation of Iraq, as several regional newspapers pointed out.

What’s more, in the budget Bush sent to Congress last month, he has proposed cutting it by eight per cent. And while praising the virtues of ethanol as an alternative fuel (widely seen as another attempt to undermine Chavez), he was stumped when Lula requested that US tariffs on Brazilian ethanol be removed. That cannot even be contemplated, as it would disadvantage farmers in the US.

Even for the most fanatical of free-traders, the concept isn’t necessarily a two-way street if it impinges in any way on American interests.

Unfortunately for Bush, there was little chance his message would find a receptive ear beyond the business elites. As Dan Froomkin commented in The Washington Post on the eve of the presidential trip, “Bush’s attempt to persuade Latin Americans that he is the champion of the poor ... is utterly doomed. Almost laughably so.” Mexico’s conservative former foreign minister Jorge G. Castañeda, meanwhile, reminded readers of The New York Times that the US president “is the most inappropriate person on earth for this mission; he is immensely unpopular in Latin America – not since Richard M. Nixon’s trip to Caracas in 1959 have so many protests been likely ... Many snicker that if he defends democracy in Latin America as well as he has in Iraq, only God can help Latin American democrats.”

Castaneda and Bush wouldn’t agree, but the only serious threat to democracy in Latin America right now comes from the US and its allies. What they are actually concerned about is the threat to capitalism. The experiments in alternatives to neoliberal economics are still at an incipient stage, but they enjoy popular support among Latin Americans, tens of thousands of whom took to the streets wherever Bush went (in Brazil, Lula’s Workers’ Party was itself involved in the demonstrations).

There were even protests in countries Bush didn’t visit, orchestrated in part by Chavez, who embarked on a counter-tour of his own. Throughout his journey, Bush never uttered Chavez’s name; the latter had no such compunctions about ridiculing his rival and encouraging chants of “Gringo, go home!” from Argentina to Haiti.

There would, of course, have been plenty of protests even without Chavez’s intervention. The gringo eventually went home more or less empty-handed. He found little succour even in countries such as Colombia and Mexico, which are ruled by right-wing regimes. And if Bush’s southern foray did little to shore up free-market capitalism, it was even less effectual in helping him establish a legacy distinct from the neoconservative crusade in other parts of the world.

No one can deny that George W. has made his mark: his exploits will undoubtedly go down in history. But it will forever be possible to sum up his legacy in a single four-letter word: Iraq.


© DAWN Group of Newspapers, 2007


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