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DAWN - Editorial; August 07, 2008

August 07, 2008

Musharraf: fate sealed?

IS this the end of President Musharraf’s political career? The two days of marathon meetings in Islamabad between the leaders of the PPP and the PML-N have apparently ended in some kind of understanding at the president’s expense. The final act in what appears to be a gripping political drama is still far away, but things seem to be moving. Undeniably, President Musharraf is one of the most unpopular leaders in the country. A poll by the US-based International Republican Institute last month found that 83 per cent wanted the president removed. His job approval rating was down to a devastating 11 per cent. Whatever the legal manoeuvrings resorted to by the president’s opponents, it is morally and politically clear that he should step down.

To the president’s defenders — the few that remain — he is the wise hand at the helm of the state that has guided this country through some of its most perilous internal and external crises. That accumulated experience is of immense value to the country, the president’s supporters suggest, whether the people realise it or not. Yet politics is not about the past; it is about the present and the future. And by any measure the president is now an impediment to governance. Three crises afflict the state today: an economic downturn; an unstable transition to democracy; and an explosive cocktail of militants rampaging across the country. It is true that none of these will be resolved simply by the president’s resignation. However, it is also true that they will not be resolved if the president remains the focal point of the politicians’ and the public’s ire. The president has time and again said that he will always do what is in the national interest. For a long time, his foes have been telling him to go. Arguably, in the murky waters of Pakistani politics, the president was entitled to see if he could ride out the storm. After all, the leaders meeting in Islamabad have undergone astonishing political rebirths of their own. However, now that the president’s prospects to ride out the storm seem to have disappeared, one hopes things will not go as far as impeachment.

The non-functional judges of the superior courts must also be reinstated. It too is a crisis that has refused to subside, despite the best efforts of the president and PPP co-chairman Asif Zardari to prevent or delay the return of the judges. The judges issue too must be put in perspective. The return of Chief Justice Iftikhar Chaudhry and the 40 other judges who were effectively fired by President Musharraf last November will not by itself create a first-class judiciary that is responsive to the needs of the people and better referee disputes between institutions of the state. Indeed, the Chief Justice Chaudhry-led Supreme Court showed an unfortunate tendency for heavy-handedness when it came to dealing with the executive. However, the return of the judges will be a start towards reviving the judicial process that has been hobbled for the past 17 months. Everyone agrees that Pakistan deserves better; now is as good a time as ever to begin to deliver.

Mysterious silence

ONE extraordinary phenomenon in Pakistan has been the religious parties’ failure to condemn acts of terrorism in the name of religion. The Taliban have bombed mosques, shopping centres and other public places, killing and maiming innocent men, women and children. Yet, with rare exceptions, most religious parties and personalities have chosen to keep mum, giving the impression that they approve of terrorism. How else can one explain their refusal to condemn the Tehrik-i-Taliban Pakistan’s (TTP) latest threat to carry out suicide attacks across the country if military operations in Swat are not halted? By refusing to condemn the TPP threat, religious parties seem to side with the fanatics who are threatening to take over Pakistan through terror and mass murder. Instead of using their academic learning and influence to counter obscurantism, most religious parties have turned themselves into the Taliban’s allies. In that case, they should have the courage to declare so openly. Just as they did not condemn the Lal Masjid brigade’s mutiny last year, now too they appear indifferent to terrorism disguised as religion. On Monday, the social welfare wing of the Jamaat-i-Islami referred to the Taliban threat in Karachi as baseless propaganda instigated by the US and its ‘lackeys’. There is no doubt that the US strategy to counter terrorism has been unjustifiably heavy-handed. Cases such as that of Aafia Siddiqui, who was held incommunicado by US officials for years, demonstrate why there is sympathy for the militants’ goal in many quarters. But no propaganda is needed for the people to see that the Taliban are waging a war on the state of Pakistan.

True, there have been some religious leaders who have voiced concern at the methods employed by the militants to advance their agenda, but the criticism has been muted. What is missing is an unequivocal condemnation of terrorism from a common platform. To do this the parties have to be clear in their minds about the distinction between political and religious processes. One is about democracy and the rule of law at the national level; the other about individual choice which should not be foisted on the entire nation. The Taliban are trying to subvert the former by burning down girls’ schools and carrying out arbitrary executions and suicide attacks that kill and maim people. The religious parties and scholars owe it to the people to raise their voice against terror in the name of Islam.

ISI ownership drama

THE ISI seems to have become both a Frankenstein and a prized possession, for nobody seems prepared to part with it, the seamy side of its character notwithstanding. Jealousy within governments is a worldwide phenomenon. The issue here is compounded by the foreign interest in the agency’s role. The donors especially have it in their crosshairs. After a sudden announcement putting the Inter-Services Intelligence under the interior ministry on July 26, and an equally abrupt late-night withdrawal of the notification within hours, the government has now taken a neither-here-nor-there position for the sake of ‘further deliberations’. Seen against the backdrop of all the statements, remarks and assertions made by one government functionary or the other in the intervening 10 days, the lack of coordination on an issue as sensitive as the ISI’s controlling authority makes the nation wonder who is in charge. The fact that the government did not withdraw or cancel the notification, but deemed it necessary to think it over one more time before deciding the future course of action also shows that haste, and not prudence, was the hallmark of the initial decision. This is a sad commentary on the ‘grand coalition’ that we believe still exists.

There is no doubt the world wants to see the ISI tamed, but the spy agency has shown extraordinary tenacity, for it refuses to be controlled and wants a chief of its own choice. That is where one can see the helplessness of the elected government. The need to put in place some sort of mechanism to ensure a reasonable level of coordination among those who claim to rule the country is not under debate. It is the perfunctory attitude of the government in managing the issue that seems to be arousing bewilderment, if not contempt, at home and abroad.

Economic thinking deficit

By Dr Tariq Hassan

PAKISTAN’S economic managers and policy gurus realise the importance of the growing services sector in the country. Through trade policy announcements they have repeatedly extolled the virtues of promoting trade in services.

Last year the commerce minister observed: “The services sector is important for our economy because it generates employment, contributes to … GDP and is a significant driver of economic growth. Trade in services accounts for over 20 per cent of world trade and is therefore of critical importance for us.”

The services sector has indeed emerged as the main driver of economic growth in Pakistan — as also in the rest of the world. As noted by the Pakistan Economic Survey 2008, this sector has provided much-needed support for sustaining a relatively high economic growth rate. Exceptional performance of the financial sector has helped the economy remain close to a high growth trajectory.

The Survey proudly notes: “The services sector surpassed the growth target of 7.1 per cent and grew by 8.2 per cent in 2007-08 as against actual achievement of 7.6 per cent in 2006-07. The services sector has made a contribution of 74 per cent to … GDP growth. The services sector has been an important contributor to Pakistan’s economic growth over the past five years growing at an average of 7.3 per cent annually since 2003-04. The continuing buoyant trend, even while growth in the Agriculture and Manufacturing Sectors [sic] has been slowing, implies that the services sector in Pakistan has remained relatively insulated from the challenges faced by the rest of the economy and has been better able to cope with them.”

An important feature of the services sector is a notable rise in its share in foreign direct investment in recent years. In particular, liberalisation and privatisation policies helped the finance and communication sub-sectors fetch a major part of the rising foreign direct investment inflows in the country. According to the State Bank of Pakistan, the share of foreign direct investment in the services sector has exceeded that in non-service sectors consistently for the last three years. The contribution of the services sector to GDP growth has also exceeded that of agriculture and industry for the last three years.

However, despite the phenomenal growth of the services sector, the Pakistan Economic Survey indicates that the country’s current account deficit widened to $11.6bn during July-April FY08 against $6.6bn in the comparable period of FY07, showing an increase of 75.6 per cent. Even when compared to the size of the economy, the current account deficit was substantially higher at 6.9 per cent of GDP during July-April FY08 as against 4.6 per cent for the same period FY07.

The deterioration in the current account deficit mainly emanated from the sharply rising trade deficit along with increase in net outflows from the services and income account. The services account deficit widened by 44.2 per cent during July-April FY08 to reach US$5.6bn. Relatively high import growth and a decline in export of services contributed to this deterioration. However, the strong growth in current transfers on the back of impressive growth in remittances almost entirely offset the deficit in the services and income account thereby leaving the trade deficit as the fundamental source of expansion in the current account deficit.

An analysis of the result of development of trade in services in Pakistan through the perspective of various government agencies indicates an incongruity between the economic growth generated by the services sector and the foreign exchange decline caused by the services account deficit. This is symptomatic of the economic mismanagement prevalent in the country.

Pakistani economic managers remain primarily focused on foreign investment as an instrument of growth and, other than paying lip service to the process of indigenisation, have done little to spur the engine of domestic growth. Inasmuch as their policy regarding the development of the manufacturing sector was flawed, their policy in respect of the growth of the services sector is equally unsound.

The policy of privatisation, liberalisation and deregulation has been adopted and implemented mindlessly by the government at the behest of international financial institutions. The opening up of the financial sector through conditionalities imposed by international financial institutions is a case in point. By doing so, Pakistan has lost out on its ability to negotiate mutually advantageous trading terms and is now left to seek credit for its ‘autonomous liberalisation’.

International trade in services is sought to be promoted through the General Agreement on Trade in Services (GATS), which provides for ‘progressive liberalisation’ and not just liberalisation. Members of the World Trade Organisation are required to enter into successive rounds of negotiations with a view to achieving a progressively higher level of liberalisation. The process of progressive liberalisation is required to be advanced in each such round through bilateral, plurilateral or multilateral negotiations directed towards increasing the general level of specific commitments undertaken by the members under GATS. There is flexibility for individual developing country members to open fewer sectors, liberalise fewer types of transactions and progressively extend market access in line with their development situation.

This is the strategy that should have been followed by Pakistan. But Pakistan chose to go through the process rapidly and that too in the more strategic sectors such as finance.

By not only liberalising and deregulating the financial sector but also privatising and selling major banks to foreign entities, the government has certainly achieved enhanced growth in the financial sector. The resulting conducive environment has enabled the foreign owners of banks and other financial institutions to recover their investments in Pakistan through huge spreads in interest rates and uncontrolled consumer financing to the detriment of local depositors and consumers.

A similar phenomenon exists in respect of the telecommunications sector with the ensuing detrimental effect on the foreign exchange reserves of Pakistan because of enormous dividend payouts. The stock exchanges have also been vying for and receiving their share of foreign portfolio investment despite the attendant risk of enhanced volatility in the country’s already unstable capital market.

According to the Statistics Division, the total export of services was $2,123,706 against the total import of services amounting to $6,347,072 at the start of this year. Despite the long-term vision (Vision 2030), a medium-term development programme, the annual budgetary process including periodic economic surveys, a plethora of policies framed by multiple finance, investment, trade and planning ministries as well as legislative recommendations and oversight, the economic managers have landed Pakistan in an economic mess.

Under the circumstances, one cannot but conclude that the services account deficit is not only an indication of the financial deficit but is also representative of the deficit in economic thinking in the country.

The writer, a former chairman of the Securities and Exchange Commission of Pakistan, is a lawyer based in Islamabad.

A woman’s place

By Jerome Taylor

THE gender equality fight in Britain has already peaked, with greater numbers of people convinced that a woman’s place is in the home rather than in the office, according to new research.

A study of both male and female attitudes towards women in the workplace over the past 30 years has revealed “mounting concern” that female employees who successfully pursue a career are doing so at the expense of family life.

Researchers at Cambridge University compared the results of hundreds of social attitude surveys from the past three decades. They found that although current attitudes are more egalitarian than they were in the 1980s, there are growing signs that the gender equality fight hit a high point in the 1990s and has since gone into decline.

The findings suggest that both men and women in Britain are having second thoughts about whether women should try to pursue both a career and a family life, putting paid to the idea of the so-called “supermum” that was prominent throughout much of the 1990s.

In the mid-1990s 51 per cent of men and 50 per cent of women agreed with the idea that family life would not suffer if a woman is in full-time employment. In the latest equivalent survey those figures have fallen to 42 per cent of men and 46 per cent of women agreeing that work does not impinge on family life — similar to the start of the 1980s.

The research also shows that fewer women now believe a successful career is the key to financial and social freedom

— ©The Independent

OTHER VOICES - Middle East Press

A third option for Yemeni youth

Yemen Times

[THE] Minister of Technical Education and Vocational Training … was referring to the common conviction that an academic degree is more prestigious and worthy than learning a technical or vocational skill, although real life has proven that it is those with skills who are successful…. This is exactly the reason why there are so many unemployed youth, yet ironically there is a severe lack of skills to cover local needs and market demands …

The head of the Arab-Italian Chamber of Commerce visited Sana’a two years ago and explained that Italy recovered after WWII through [a] cluster economy, i.e. small businesses in various trades working together through corporations and unions.

The point is that Yemen’s economy does not need multinational companies or multibillion dollar industries in order to thrive. It needs small and micro-enterprises in various fields. This is not only the solution for the economy; it is also the solution for unemployed youth who are waiting for either the government or the private sector to give them jobs.

In order to make this third option work and become attractive to youth in Yemen, work has to be done on three levels; first at the institutional level where community colleges, technical and vocational training institutes and centres are established and made accessible to the youth. Second, stories of successful entrepreneurs should be highlighted by the media so that young men … have role models to look up to, and finally a gradual cultural change whereby … society does not look down upon a vocational worker. — (August 5)

Iraq needs national unity

Gulf News

FOR Iraq to build a future where its people coexist in prosperity, under the rule of law and democracy, all factions — religious, political and ethnic groups — have to come to an agreement to live together. Without an acceptable national unity formula, which brings all parties under the same umbrella, Iraq can just disintegrate.

Raising the alarm about the future of Iraq’s national unity is not an exaggeration. Neither is it an overestimation that the country is under the threat of breaking up into a group of geographically independent entities. This is being said given the fact that Kurdistan has been enjoying autonomy as per its agreement with the Iraqi government.

And although such autonomy has offered independence and a level of stability and freedom for the people living there, it has also helped in drifting the region further away from the mainstream. So much so that the authority of the current government is almost non-existent anywhere in the region.

It goes without saying that achieving autonomy is at times necessary and perhaps even the best offered option to adopt when it comes to a country that is so diverse, such as Iraq.

But it is also important that the unity of the nation is preserved, as any break-up of the country would lead to further instability and violence, no matter how autonomous some regions may become.

The challenge that Iraq is facing today is … [that] of enabling a country to function as one unit within a national unity framework … — (August 3)