DAWN - Editorial; August 22, 2008

Published August 22, 2008

Balochistan simmers

THE resignation of the Musharraf-appointed governor of Balochistan, Nawab Zulfikar Ali Magsi, should not be read as just another act in the clearing of the Musharraf stables. On Independence Day, the governor had given his first public indication of his intention to resign, citing the depressing law and order situation in Balochistan. Speaking to the media, the governor had all but admitted that the attempts by the civilian administration in Balochistan to pacify the province had failed. Aug 26 will be the second death anniversary of Nawab Akbar Bugti and any hope that the new political dispensation after the February elections would alleviate the grim situation in Balochistan has evaporated. The coalition at the centre had promised to focus on real reform in Balochistan but has predictably opted for cosmetic changes thus far. Earlier this week, Prime Minister Gilani released Rs6bn to help tide over a financial crunch in the province. Earlier some high profile political prisoners were released, including Sardar Akhtar Mengal, president of his faction of the Balochistan National Party, and Shahzain Bugti, grandson of the late Nawab Akbar Bugti. Yet the fundamental grievances of the province — its legal relationship with the centre; control of its mineral wealth; and its share in the development projects — that sparked the violence in the province in the first place remain unaddressed.

The most immediate demand of the Baloch nationalists though is to end the military ‘operation’ in the province that they claim is being carried out. The government, however, denies that there is an on-going operation, claiming its actions are only in self-defence. To an extent, it is possible to understand the government’s predicament. As Baloch militants continue to blow up gas pipelines, railway tracks and electricity pylons, kidnap government officials, launch rockets at government installations, and attack settlers from Punjab it is difficult for the state to simply do nothing. The most radical militants in Balochistan are also not looking for a negotiated settlement. Thus Bramdagh Bugti, the fugitive guerrilla leader, has gone on record rejecting provincial autonomy and demanding ‘complete independence’ of the Baloch land. Yet what the centre cannot afford to do is to continue to ignore the province’s political grievances. The resolution moved in the Balochistan assembly against Gen (Retd) Musharraf was unanimously supported by the house, demonstrating that the ruling coalition at the centre has the support of the province when it wants to get things done. In 2005, a sub committee of the National Assembly had done extensive work on Balochistan after holding negotiations with various segments of society. Regrettably, the recommendations that were drawn up in a report prepared after this exercise were not implemented. Hence the com-plaint of Balochistan’s politicians and people that the centre simply does not work hard enough or fast enough to address their demands appears to be valid. Until that changes, the violence will continue.

Arresting sectarianism

THE upsurge seen in recent weeks in extremist activities by those calling themselves Pakistani Taliban and striking targets in the northwest of the country has now also taken on a more dangerous, sectarian dimension. This was evident in the attack in Dera Ismail Khan the other day on a group comprising largely Shia Muslims, as reported. The ongoing pitched battles being fought in Kurram Agency between rival sects, and the acts of terror such as burning down entire villages in that remote part of the country are also disturbing cases in point. Wednesday’s reaction of the Shia Ulema Council, which met in Karachi, to the events in the northwest is equally worrying. Pakistan is a pluralistic society, with the Constitution guaranteeing the safety and freedom of worship to all its citizens regardless of whether they practise the majority or a minority faith. Not too long ago in neighbouring Afghanistan, the Taliban’s crusades against anyone not subscribing to their interpretation of religion, as their suppression of women and the Shia creed in particular, are well documented. That the same madness should be allowed, by the state’s muted response to the challenge so far, to now engulf Pakistan leaves one with cold feet. The government needs to act with full force, where persuasion fails, to curb such anti-human activities before the notion and the norm of sectarian coexistence becomes a relic of the past.

The country has suffered many a bloody bout of sectarianism in action in what appeared like serial, tit-for-tat killings throughout the 1980s and 1990s, as vestiges of the Zia dictatorship. Now with formidable socio-economic, political, national and international challenges facing the democratically elected government, it would be a shame to allow this monster of the past to rear its ugly head again. Regardless of how long the ruling coalition partners take to iron out their differences on contentious issues such as that of the judiciary, there can be no plausible excuse for not effectively dealing with lawlessness and terrorism. The provincial governments are in place whose responsibility it is to maintain law and order in their respective territories in spite of the ongoing political haranguing in Islamabad. The Frontier government must come down hard on criminal elements indulging in sectarian violence; alternatively, it should press the federal government to activate the additional law enforcement mechanism it has under its control to arrest the spread of lawlessness in parts of Fata and even settled areas of the province. This must be done immediately to avoid stoking sectarian sentiment elsewhere in the country.

The next president

EVEN though the PPP and its coalition partners in Sindh seem to agree on Asif Ali Zardari as the next president, a lot depends upon how the PML-N looks at the choice. To the Sharifs, President Pervez Musharraf’s departure from the presidency means a job half done. For the PML-N the other half — the restoration of the judges — is equally or perhaps more important. The issue has a relevance to the presidential election. Given its strength in the six Houses, it is, of course, quite possible for the PPP to have its choice at the President House even if the PML-N does not cooperate. But it would be politically naïve and inadvisable to have a head of state who does not have the PML-N’s support. There are other issues also.

Because the prime minister is from Punjab, all parties agree that the president should be from a small province. But equally important is the would-be president’s personality. Anyone who sits in the President House must possess certain qualities that must inspire confidence in the nation — qualities that Jinnah epitomised: honesty to the core and an unblemished record in terms of commitment to law and constitution. He must serve as a father figure and by his words and actions appear to the nation as the guardian of the Constitution. It is up to the six Houses which will constitute the electoral college to decide which candidate would be most appropriate. But more than this the major concern at the moment is the hiatus in politics — the restoration of the judges being the major issue creating an impasse between the coalition partners — and the urgency of moving on with the task of governance and policy making. Until the coalition addresses these issues with a sense of urgency and stops dragging its feet on matters of governance — mainly the economy and law and order — the election of the president will emerge as another distracting factor.

Islamic equity funds

By Syed Imad-ud-Din Asad


ISLAMIC finance signifies financial services, mechanisms, practices, transactions, and instruments that comply with provisions given in the fundamental Islamic texts. Thus, Islamic finance not only includes banking, but also capital formation, capital markets and all types of financial intermediation.

In recent years, Islamic finance has not only increased in size. It has also become complex as finance professionals compete furiously to produce new shariah-compliant transactions and instruments. Becoming a segment within the global financial market, it has gained considerable interest as an alternative model of financial intermediation.

However, in the 80s and most of the 90s, Islamic finance did not have much of this dynamism. On the asset side, activities of Islamic financial institutions mainly involved ijara, mudaraba, and musharaka. The need for liquidity, portfolio and risk management tools, and derivative instruments was strongly felt, and there were numerous calls for the promotion of financial engineering and introduction of new products.

Along with other developments, this resulted in the introduction of Islamic equity funds (IEFs). Overall, IEFs have been the most popular among all Islamic investment funds. According to FTSE, IEF assets are projected to increase from $15.5 billion to $53.8 billion by 2010. According to other reports, the assets have already reached $20 billion. The industry is dominated by Saudi Arabian funds and fund managers, accounting for more than 70 funds out of about 300 IEFs globally.

In fact, Saudi British Bank’s Amanah GCC Equity Fund was reported as the best performing Islamic equity fund in 2007. On the other hand, Bahrain is becoming the centre for IEF registrations because of the Kingdom’s efficient regulatory system. International investment firms with Islamic divisions are focusing on Dubai.

Islamic Equity Funds are different from conventional equity funds because they select their placements on the basis of their compatibility with the shariah. In order for a stock to be considered sharia-approved, it must satisfy certain requirements set by Islamic scholars. These standards may differ in different jurisdictions depending upon how strictly the shariah is interpreted.

However, the basic condition is the same throughout the Muslim world: an enterprise must not conduct business activities prohibited by Islamic texts. These include gambling, alcohol, pornography, etc. Financial ratios (debt-to-equity ratio, cash and interest bearing securities-to-equity ratio, and cash-to-asset ratio) and cleansing mechanisms (to purify investments that are tainted by forbidden activities) are also used by various shariah boards and authorities.

It must be mentioned that a country may or may not have a national screening body. For instance, in Malaysia, it is done by the Securities Commission; whereas, in the Middle East, financial institutions prepare their own list of shariah-approved stocks.

One of the factors that gave an immense boost to IEFs was the introduction of the Dow Jones Islamic Market Index (DJIM), in 1999, as a subset of Dow Jones Global Indexes (DJGI). DJIM Indexes intend to measure investable equities that fulfil shariah requirements. At present, with more than seventy Islamic indexes (which include regional, country, industry, and market-cap-based indexes), it is one of the most comprehensive family of Islamic market indexes. Other conventional index providers have also entered the field. In 2000, FTSE launched the FTSE Global Islamic Index. Unlike Dow Jones that has an independent Shariah Supervisory Board, FTSE indexes are evaluated by Yasaar Research Inc. In 2006, Standard & Poor’s (S&P) introduced the S&P Shariah Indices, followed by, in 2007, the S&P GCC Shariah Indices and the S&P Pan Asia Shariah Indices. S&P has contracted with Ratings Intelligence Partners (RI) to provide the shariah screens and select the stocks based on these standards.

As reported by the Financial Times, these indexes do not enjoy complete acceptance by the Muslims. The screening principle allowing total debt ratios of up to 33 per cent is considered objectionable by some scholars. They claim that it is akin to declaring a food as halal that has a small quantity of pork in it. The indexes maintain that their legitimacy comes from the concerned shariah authorities. In other words, as long as their shariah supervisors agree with these practices, the indexes need not change them.

The future of IEFs looks bright. However, Muslim scholars need to be careful while interpreting and applying the shariah. They need to make sure that Islamic principles are properly observed and that they don’t present or accept an un-Islamic idea as Islamic just because there is more profit in it.

The sweets of power

By Rifaat Hamid Ghani


AT the penultimate moment, Gen (retd) Musharraf stepped down. It is true that he has spared us much agonising by doing so, but he could have spared us past, and continuing, agonies had he done so sooner and not resorted to the extra constitutional.

Should he be forgiven the unforgivable? Absolutely. Safety lies not in dragging him through the dust but in ensuring we are not sometime later hailing yet another COAS for rescuing us from the misused powers of elected representatives.

For the Zardari Bhuttos and their party, democracy may be the best revenge. Pakistan’s citizens want democracy to be a vindication: of itself. That is why the restoration of a superior judiciary that was punished for true independence and safeguarding the common weal is crucial.

Some in the new government argue that nothing speaks louder than an empty stomach. Absolutely. But would a restoration of the deposed judiciary or publicly sustaining that demand till it is met come in the way of dealing with the problems of inflation and administrative mismanagement?

The correct answer is that keeping that on the backburner rather provides due cause for agitation. The administration’s inhibitions and constraints in dealing with the economic crisis and terrorism are not to be laid at the doors of the lawyers’ movement or the PML-N coalition partner’s misguided obstinacy about the issue. In any case a government has to be capable of multi-tasking!

Conventional wisdom also has it that preserving the coalition is of the essence. Why? Plurality, dissent, a shadow government and opposition are much more conducive to and characteristic of healthy democratic governance. Or is the new government scared of coming out of the protective shadow of emergency situations in the Pakistan first idiom?

Keeping the coalition going must not serve as a pretext for government camouflaging of a status quo. What matters is that party politics and opposition not be vested in a desire to dislodge in order to grab the kursi and the keys to the national exchequer.

True, maintaining public order can become problematic and confusion is the right climate for terrorists. But civil protest and activism are sent to sacrifice at the altar of law and order only by dictators and fascists. The last incidentally also like to preserve demos of people and street power as their party’s monopoly.

It is worth thinking about the public display that followed Gen (retd) Musharraf’s announcement. The guard of honour offered to an outgoing and admittedly disgraced president may prove less disquieting in terms of our democratic future than the insensate firing at Bilawal House, Karachi, indulgently watched by the police and where the chief minister, a veteran of Chairman Bilawal Bhutto Zardari’s party, could not or would not be heard amid ‘party’ enthusiasts.

Perhaps the first lesson we need in our new democratic primer is revision of the fact that we have all made the same mistakes at least twice. We the public too have distributed mithai with equally misplaced enthusiasm and unbecoming indignity at every leader’s fall from power.

The president whose exit occasioned such ugly gloating was the very same man whose intrusion into civil politics was popularly hailed — such had been the PML-N’s utilisation of its heavy mandate. Leaders and functionaries of the coalition please note.

OTHER VOICES - Pushto Press

Twenty years after Geneva Accords

Tolafghan, Kabul

AFTER the withdrawal of the Soviet forces from Afghanistan, Pakistan entered the Afghan political picture with the UN’s help and that of the jihadi leadership that had migrated to Pakistan. Pakistan pushed the Afghans into an unending internal war. The influx of refugees into Pakistan from Afghanistan during the Soviet invasion provided Pakistan with an opportunity to enter Afghanistan. The Afghans had thought … that their people would be able to live in peace after the Soviet withdrawal … because, according to the Geneva Accords, there was no justification for the war after the Soviet withdrawal…. This did not happen.

The Geneva Accords were signed by Afghanistan and Pakistan and guaranteed by the Soviet Union and the US. It envisaged the Soviet withdrawal…. All parties pledged to work for peace in Afghanistan but the leadership of the jihadi organisations in Pakistan had another agenda. They kept the pot of war boiling in Afghanistan, pushing it towards civil war. …Twenty years after the accord, there are no Soviets in Afghanistan but the civil war started by the jihadi leadership continues. This war has been brought to the Pakhtun regions and Pakhtuns both in Pakistan and Afghanistan are being eliminated…. — (Aug 19)

War in Kurram Agency

Khabroona, Peshawar

THE advisor to the Pakistani prime minister, Rehman Malik, has asked tribes in the Kurram Agency to lay down their weapons within 72 hours and start living in peace. He was flanked by the NWFP governor, Owais Ghani, and the NWFP chief minister, Amir Haider Khan Hoti. Rehman Malik said that armed militants were being supported by outsiders to continue their nefarious designs.

It is to be recalled that different parts of Pakistan have been in the grip of violence for the last several years. The government took substantial measures but the situation remained beyond the control of the government. Due to the wrong policies of the previous government, there has been an unending war against the security forces in the shape of suicide bombings, bomb blasts and gun-battles in the country, including the tribal regions.

The war intensified after US forces ousted the Taliban. There has been tremendous resentment against the US for its continued bombing of the Pakistani tribal regions. It is the need of hour that the people and government of Pakistan unite on the issue and bring about peace in the country. — (Aug 16)

— Selected and Translated by Khadim Hussain.

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