A new president
INAUGURATION Day in the US will be unlike any other. Barack Obama’s qualifications to become the 44th president of the United States are stellar. Yet, it is the fact that a black man, who at the time of his birth was a distinctly second-class American, will ascend the most powerful office in the world that will make today’s events such compelling viewing. There are many problems with the US and its role in the world — as the 43rd president so graphically demonstrated in the past eight years — but the election of Barack Obama is proof that democracy feeds on the promise of a better tomorrow. Together with the rest of the world, we hope President Obama will be able to deliver on that promise. However, such is the hype that there is almost sure to be a letdown. Re-orienting a global power, one fighting two wars, facing the threat of the worst recession since the Great Depression and clinging to the last vestiges of international goodwill, is an immense task that will almost certainly take more than four years, and perhaps more than eight.
Here in Pakistan, adjacent to the theatre of one of America’s on-going wars, there are understandably mixed feelings about an Obama administration. The worst-case scenario is that Obama’s warning of unilateral strikes in Fata against high-value terrorist targets is only a precursor to widening the theatre of the Afghan war to include the tribal areas. The best-case scenario is that vice-president-elect Joseph Biden’s initiative as a senator, the Enhanced Partnership with Pakistan Act of 2008, aka the Biden-Lugar bill, is a signal that America will seek to definitively change the transactional, military-based relationship with Pakistan into one that emphasises human development and institution-building. As with all things in politics and foreign policy, the outcome is likely to be somewhere in between.
Consider just one area where change could be made. Pakistan’s exports to the US are under $4bn, a sum that could increase substantially if tariffs on Pakistani goods are reduced. A report by the Pakistan Policy Working group published last year notes that the US earns more in tariffs from Pakistani exports than from France’s $37bn of textile exports to the US. The report goes on to state: “The average US tariff rate on Chinese exports to the US is three per cent, compared to 10 per cent on Pakistani exports.” Lower tariffs on a wider range of products could substantially boost Pakistani exports, which would mean a boost to the economy and employment figures. However, US labour and trade politics generally militate against such concessions and Obama was not averse to using protectionist rhetoric during his campaign. The tariff conundrum is just a microcosm of US-Pak relations: things can get better, but betterment depends on political will.
THE guns have fallen silent in Gaza, and Israel has begun withdrawing troops from the Strip, but not before it had reduced it to rubble and slaughtered 1,300 people, 40 per cent of them women and children. On Sunday, a fragile ceasefire came into being after Israel had also completed what is a ritual with it in every war — destroying UN offices and targeting refugee centres. Hamas, meanwhile, has agreed to a week of truce to let the intruders withdraw. Diplomats the world over failed the Palestinians, for neither Israel nor Hamas accepted the Security Council’s call for a ceasefire, which came last week two weeks after Israel launched its blitz. As in the 2006 Israeli-Hezbollah war, this time too the UN Council gave Israel time to more than attain its objectives. On the last day of the fighting, rescuers pulled out 95 bodies found under the heaps of concrete rubble which once constituted Palestinian homes. In Cairo, there was a diplomatic mess. All President Hosni Mubarak succeeded in doing was to gather an array of diplomats, but as leader of a country that borders Gaza, he failed to do anything practical to stop the massacre, and the western diplomats gathered at his presidential palace left for Jerusalem to kowtow to Ehud Olmert rather than to make serious efforts to prevent a recurrence of the 22 days of massacre in Palestine.
The Egyptian president now intends to call an international conference for rebuilding Gaza. As always, this has been a useful trick to divert attention from the real issue. We know how billions of dollars were pledged to the Palestinian Authority after the historic 1993 agreement between Yasser Arafat and Yitzhak Rabin, but nothing came of it, for Israel reoccupied the vacated territories in 2002. Again, big money will be pledged for the Strip’s reconstruction, but it will go up in smoke again when Israel finds yet another excuse to pulverise Gaza. While the humanitarian disaster should be tackled immediately, the world capitals shouldn’t forget the real issue — Palestine is for the Palestinian people and Israel should pull out of the occupied territories. This and not big money for reconstruction is the guarantee of peace in the holy land. With Barack Obama taking his oath, the Arab-Islamic world will watch with keenness how America’s new president makes a departure from his predecessor’s policies so that the two-state solution can become a reality.
Why no accountability?
THE disclosure by the chairperson of the Public Accounts Committee of the Sindh Assembly is quite shocking. According to Jam Tamachi, no PAC report has been presented to the Assembly since 1992. This is a serious flaw in provincial governance. The PAC is the main mechanism for ensuring financial accountability because it is supposed to check the audited accounts of various government departments to which public money is given. As an organ of the Assembly, the PAC has to share its findings with the entire house in the form of a report. Thus it serves as a watchdog body that can identify irregularities committed and take the government to task for any wrongdoings that are detected. Bypassing this process, which is mandatory and should be adopted annually, means that the government of the day has managed to sidestep its responsibility of being accountable to the people for the public money it has spent every year. This cannot be explained away by saying that a dictatorship at the helm was not interested in such processes that are inbuilt in democratic systems to ensure transparency and integrity. True, dictatorial regimes do not hold themselves accountable to anyone, hence their unpopularity. But unfortunately our so-called democratic and constitutional governments also failed to observe the rules when provincial assemblies were functioning.
The fact is that corruption and ineptitude have pervaded all sectors of government. A lack of interest and commitment characterises the approach to the accountability process that begins with the formation of the PAC, which is the primary responsibility of the ruling party, and culminates in the presentation of annual audited reports that come up for discussion in the house. Delays have marked the appointment of the PAC on several occasions. Meetings have not been held on time and the bureaucracy has contributed to the breakdown of the accountability process by not presenting the various departmental accounts promptly and regularly. Instances abound of secretaries not turning up for meetings or coming unprepared. This is unforgivable. No government, however powerful or popular, can adopt a cavalier approach. To check corruption, a start must be made by those at the top.
OTHER VOICES - Sindhi Press
In defence of tolerance
PRESIDENT Zardari has warned that we have to defend our lifestyle and there is no option of defeat. … Who are [the] militants and what are their stakes in the state? … Will our army be able to stop these elements? ...
What is the agenda of these militants … which they want to impose…? ... One had seen this agenda in Afghanistan during Taliban rule and got some glimpses … in Swat and Bajaur. Thousands of girls are deprived of an education in Fata as extremists threaten to bomb schools if they are opened…. Some time ago, CD and music centres were set ablaze and the promotion of music, art and literature restrained. Their agenda is clear: either obey or die.
… The majority of people in this country have a moderate lifestyle. Our approach is humane and humanitarian. … This region has remained under Sufi influence. Sufis preached the avoidance of extremism advocating peace and love. They set a number of examples of religious tolerance. The people of this region belonging to different religions have a common culture.… They never resorted to killing anyone to accept a particular belief.
Our history of the recent past also tells us that until the Z.A Bhutto period there was no extremism. It was in dictator Zia’s era that sectarian riots broke out….
We witnessed a number of events including the PNA movement against Bhutto’s elected government and the operation of militant camps run by a particular school of thought. At the behest of the US, we fought a war against the Soviet Union and religious frenzy was used to fuel this war. This continued with the backing of the state machinery until the war on terror began.
Despite continuous pressure … people still want to live a moderate life. That is why the extremists are resorting to militant and fascist means. It’s true that we have no option in the war against terrorism but to win it. But this should be seen and done keeping away American interests. — (Jan 18)
— Selected and translated by Sohail Sangi
Economic cost of power shortage
IT is all too apparent that human existence is dependent on electricity in this day and age. Hence even a few hours of load-shedding causes enormous hardship and loss to the people and the country.
Man’s dependence on electricity has assumed such critical proportions that a day’s shutdown of power would cause any country to plunge into not only darkness but the dark ages.
However, while the nation is gasping for electricity, just as an asthmatic gasps for breath, the government bigwigs, who have never had to suffer load-shedding, are busy calculating the cost of producing additional energy. They do not seem to understand that in situations as dire as this the cost becomes irrelevant. “A horse, a horse, my kingdom for a horse,” cried King Richard III when faced with death. Who can deny that no price is too high when the choice is between life and death?
And we are exactly in such a situation. Our industries and agriculture are dying because of shortage of power. Our exports are declining because we cannot meet our commitments. Our people are suffering from diseases and dying untimely deaths because load-shedding shuts down hospitals and clinics for hours. Recently, two children in Karachi fell to their deaths in a manhole because of load-shedding that caused total and sudden darkness to envelop the footpath on which they were walking.
So let us not worry about the cost. It simply needs to be done and done now no matter what the cost. One need not be an economic expert to know that even an hour’s load-shedding costs us billions in terms of lost production and productivity. Hence, the investment of billions in power-generation will be worth every penny.
Some may say that we did that once before and paid a high a price to the independent power producers (IPP) for building power plants which are now costing us an arm and a leg. Some may ask, in any case where is the money to build new power plants?
These are, however, false arguments. Firstly, shortsightedness always imposes a heavy penalty on the shortsighted. That is what has happened to us. Since the construction of the Mangla and Tarbela dams all our governments thought that we had become self-sufficient in power forever. They seemed to have completely ignored the fact that the population was growing at three per cent (before this figure was brought down somewhat) per annum and its per capita consumption of power at a higher rate. Hence, unless at least six per cent per annum is added to our existing capacity, we were bound to run into serious difficulties as is happening today.
Secondly, it is wrong to think that we paid too high a price to the IPPs. It is a law of economics that the price of a commodity depends on its demand and supply. Thus we had to agree to IPP terms because our need for energy was causing economic, political and social havoc. Our shortsighted and selfish leaders had brought us to a pass where we had to choose between the devil and the deep sea. Hence we had to pay the price demanded by the IPPs or else descend into chaos, anarchy and bloodshed.
We are once again in a similar situation. Therefore, one must reiterate that it is not the time to worry about the cost. Let us get the best deal possible and end the load-shedding rather than worry about its cost and endanger our very existence. The high cost of today will be compensated for by the high dividends of tomorrow. But any further delay would amount to being “penny wise and pound foolish”.
Some may ask how this can be done in days and weeks while ministers talk about months and years? The answer is simple; know the value rather than the price of things. That being the case, make existing power plants fully operational at any cost. Two, hire power-producing ships and meet the shortfall. Three, minimise the line losses and power theft. Four, end the inter-agency cycle of debts by giving one-time interest-free loans to the debtors to clear their debts to the power producers, then institute a system to prevent its recurrence. Five, buy power from neighbouring countries which may have excess power to sell.
These may cost us dearly but we have no choice. It has to be done. One way would be to reduce to the bare minimum all non-productive expenditures be it defence, administration, junket foreign trips, luxury cars or anything else. These must be curtailed and even stopped until uninterrupted power supply to our industries, agriculture, hospitals, educational institutions etc has been restored. Once it is done we should start working on long-term solutions; hydroelectricity, solar energy, wind power, dams, fossil fuel and nuclear-based power plants.
So the problem is not lack of solutions or funds but lack of common sense and priority objectives on the part of our leaders. They need to understand that they will have to solve the nation’s problem of power shortages or the country will go up in flames. They do not have to be geniuses to understand this simple fact that unless load-shedding ends, jobs cannot be created, poverty cannot be alleviated, crimes cannot be controlled, Moreover, public unrest will persist, extremism will prosper, investment will disappear, tourism will die and our economy will come to a standstill. Very soon, in the words of Hobbes, “life will become nasty, brutish and short”.
‘Bad bank’ to buy bad loans
Britain’s banks are close to revealing writedowns of at least £40bn as the financial crisis looks to be entering a dangerous new phase following a huge sell-off in the shares of Barclays and other banks on Friday. The government is close to unveiling fresh measures to shore up the system.
The write-off estimates come from City of London broker FPK, but they probably underestimate the damage from the global financial meltdown as some debt provisions are buried in bank profit-and-loss accounts and never openly declared.
Some forecasts from the City, as the British capital’s financial district is known, suggest that bad loans and investments from all the banks combined could top £200bn — and these could be ring-fenced by the state under the terms of the latest rescue package that may be announced by the government.
FPK’s estimates relate to numbers that will be disclosed when financial institutions announce their 2008 figures from the middle of next month. Similar figures are believed to have been pencilled in by forecasters at Morgan Stanley and Credit Suisse.
The damage, which includes about £15bn of bad loans unveiled at the half-year stage, is caused by toxic assets linked to the credit crunch, a rising tide of bad debt as homeowners default on their loans, as well as new provisions arising from the collapse in the autumn of Lehman Brothers and a number of Icelandic banks.
Writedowns at HSBC are thought to have topped £15bn last year. RBS and HBOS are close behind at £13bn and £11bn respectively.
Shares in major British banks fell sharply at the end of last week with Barclays down 25 per cent at 98p amid fears that institutions will need more government money, and that previous writedowns do not reflect plummeting values.
City shareholders who support the idea of the government setting up a “bad bank” to buy up tens of billions of toxic assets are hopeful that such a move could re-start bank lending to small businesses and mortgage borrowers. One said: “But if they go for it, they shouldn’t do it by halves — it should be a kitchen-sink job, with hundreds of billions ring-fenced.”
The US is also considering setting up a toxic bank, say sources.
Vince Cable, the opposition Liberal Democrat’s respected treasury spokesman, said that while he wasn’t against the idea of setting up a “bad bank”, “it remains to be seen whether such a move would get credit circulating again”. Cable also criticised Barclays, saying he didn’t know why the share price had fallen, but that Barclays, “more than any other leading bank, was cutting back on lending to British customers, tightening credit and imposing harsher terms for loans”.
On Friday, Barclays issued a statement after the market closed saying it knew no reason why its shares fell, and declared that its profit for last year was better than expected at £5.3bn after write-offs. A well-placed source added that the bank was on course to reap benefits from its takeover of the US arm of Lehman after it filed for bankruptcy in September.
— The Guardian, London