The worst of times

WITHOUT any doubt, Pakistan is passing through the worst of times in its turbulent history. Could these be turned into the best of times? It could happen but would require a great deal of work.

To begin with, such a goal would need a dedicated leadership that understands what is wrong with the Pakistani state and how it has reached the current stage. It will also need the more affluent segments of Pakistani citizenry to make sacrifices in order to obtain a better future for the coming generations and to help the less fortunate segments of the population.

There is a need for Pakistani leaders and citizens to appreciate that they live in a geographic space that is about the most troubled in the world. Pakistan has been designated as the world’s most dangerous place on earth, one that requires the immediate attention of the West under the leadership of the newly installed US president. One of the first acts of the new American president was to appoint Richard Holbrooke, a seasoned diplomat who honed his negotiating skills by getting the leaders of the disintegrating state of Yugoslavia to agree to what is known as the Dayton Accord. Mr Holbrooke would do well to delve into the histories of the two countries for which he has been commissioned to develop a new American policy.

Why is Pakistan in such a precarious state at this time? There are many reasons for this. Of these three are particularly important. The first is the inability to develop a durable system of governance by laying the institutional foundation on which the structure of the state could be built. Second is the inability to come to terms with the structural problems that keep the economy excessively dependent on foreign largesse. Third is the absence of a foreign policy that could factor in the opportunities available to the country because of its location and not on the basis of fear of some immediate neighbours.

Leaders belonging to various Pakistani generations were so consumed with their quarrels that they did not turn their attention to the building of institutions. India, on the other hand, had the luxury of being led without interruptions of the kind for 17 years. Jawaharlal Nehru’s long rule resulted in the adoption of the constitution that provided a reasonable amount of security to most segments of the population and ensured respect for the constitution once he was no longer there.

That did not happen in Pakistan. Mohammad Ali Jinnah died a little more than a year after the birth of the Pakistani nation. Liaquat Ali Khan, his successor, belonged to a social group (migrants from India) that was a small minority in the population. He was assassinated, perhaps the target of a conspiracy that involved those wishing to wrest power from him. There was open political season after Liaquat’s murder during which the East Pakistanis fought the West Pakistanis and the West Pakistanis quarrelled among themselves. When the country did get its constitution — the first of three — it was politically too distracted to make it work. That gave space to the military to intervene.

During Gen Ayub Khan’s 11-year rule, the country saw not only political stability but also impressive economic growth. The general gave the country its second constitution, established a system of local government that brought people closer to those who governed, and established a system of economic decision-making that eschewed personal whims in favour of conformity with well-articulated strategies. For several years, in economic circles as well as among political scientists, Pakistan was considered a model of success. But the success proved to be short-lived.

Ayub Khan’s model collapsed for one important reason that also explained the failure of subsequent attempts to bring political and economic development to the country. Ayub Khan’s model was based on the faulty assumption that since the leader is all-knowing he can afford to keep the people at bay. His system of basic democracies enfranchised people at the local level, gave them some say in using public money for meeting their needs. But that is as far as their participation in the affairs of the state went. That was not far enough. People rebelled with two consequences: the separation of East Pakistan and the emergence of Zulfikar Ali Bhutto as the first elected ruler of the country.

But Pakistan’s leaders have never missed the opportunity to miss an opportunity. Bhutto had the popular support to give the country a durable political structure and to place the economy on the trajectory of long-term growth. After some initial success, he failed on both counts. His success was in giving the country a constitution that had the support of the people. The political failure was once again the consequence of the belief in an all-knowing patriarch guiding the affairs of the state without much participation from other representatives of the people.

The economic failure was the result of a strong belief in a discredited theory of management: that the best way of delivering benefits of growth to less privileged segments of society was to put the state on the commanding heights of the economy. There was much dissatisfaction among the people with Bhutto’s economic and political management which once again provided space for the military to occupy.

Another 11 years of military rule followed, by far the most destructive period in Pakistan’s history. Ziaul Haq went on to destroy the few political and economic institutions the country was left with. He disfigured the constitution to establish an all-powerful presidency within a parliamentary framework. The inherent tension in this approach could not be reconciled. The most ill-advised move by the religiously inclined military leader was to impose on the country a version of Islam that was foreign to it. His move in that direction, unfortunately, had the support of the United States which wanted jihadis for its mission to expel the Soviet Union from Afghanistan.

The jihadis succeeded and Zia was briefly hailed in the West as the great liberator. But he left an ugly legacy for which the entire world, not only Pakistan, is paying a very heavy price. To understand how this legacy is manifesting itself, we need not go beyond what is happening in Swat today. That is the legacy that current civilian rulers of Pakistan — and now President Barack Obama and his special emissary — must contend with.

Not on the same page

PAKISTAN’S high commissioner to Britain, Wajid Shamsul Hassan, recently told India’s NDTV news channel that the Nov 26 terrorist strike on Mumbai had not been planned in Pakistan or Britain but elsewhere.

While stating that Pakistan’s findings were based on the dossier prepared by India, he was categorical in his assertion that “Pakistani territory was not used so far as the investigators have made their conclusions.”

In addition to carrying these remarks, the same issue of Dawn reported a statement by no less a person than Prime Minister Yousuf Raza Gilani who said that Pakistan was carrying out investigations into the Mumbai attacks and would share the results with the world. (He was also talking to NDTV.) When he was asked whether he had gone through the Mumbai attack dossier that India had given to Pakistan, he said: “That is not my job. That is the job of the Ministry of Interior and they are looking into it.”

It is rather strange that he could not find time to read the document. Meanwhile, he said with regard to the Pakistani high commissioner’s observations that only the Ministry of Interior was authorised to comment on the probe. He did not say whether or not he would be taking action against the high commissioner for his remarks.

As if all of the above were not confusing enough, the same issue carried a statement by Foreign Minister Shah Mehmood Qureshi, telling reporters that Pakistan had shared with India the progress made in investigations into the Mumbai attack and that the high commissioner to Delhi, Shahid Malik, had met the Indian Home Minister P. Chidambaram, and updated him on the progress Pakistan had made in the probe thus far.

Can one blame the Indians if they are frustrated with the Pakistani response to the Mumbai attacks? Is it surprising that the rest of the world, led by the Americans, is bewildered? Who is in charge in Islamabad, and does anybody know what is going on? And more importantly, can’t our leaders refrain from their utterances if they lack sufficient information?

The tragedy is that a few moments of glory on national and international television could prove too costly for the rest of us who end up paying the price.

The Government of Pakistan no doubt condemned the Mumbai attacks in the strongest terms, and condoled with the victims’ families and the Indian people in general. But lack of coordination among the various officials has hardly been positive for its image.

The Indian prime minister went on air to blame a “neighbouring country”. The lone surviving gunman, Ajmal Kasab, was subsequently produced as living proof of Pakistan’s involvement. The Pakistani media appeared to confirm his local credentials, but the government, despite all the resources at its disposal, denied his nationality, until it was suddenly disclosed (again via the media) by Mehmud Durrani, the national security adviser at the time.

The government unceremoniously sacked him, without giving any valid reason for doing so and admitting itself that Kasab, in fact, was a Pakistani national. The confusion surrounding this was exacerbated by the conflicting statements of the foreign secretary and the information minister. Had the government been planning to conceal this vital information?

If the government was previously convinced that there was no involvement of any Pakistan-based group in the Mumbai attacks then why did it impose a ban on the Jamaatud Dawa and arrest its leaders? In fact, why did it not contest the UN ban if it felt that it was acting without any proof? Why would the UN act with so much haste unless it was furnished with some proof? In any event, the resolution never asked for any arrests.

More than two months have passed since the Mumbai carnage, and the Pakistan government has yet to release its probe findings. If this is the speed at which our investigations are conducted, then it is a scary thought. Can’t they expedite their investigation as the whole world is waiting? Or is the government hoping that time is indeed the best healer, and that the world, including the Indian government, would forget the incident or would be overtaken by something else?

Nobody can dispute the government’s assertion that terrorism is as much a problem for Pakistan as for any other country. This is, however, only part of the problem. The question is what is the state doing to curb terrorism? The terrorists may be closing schools in Swat, and directing the locals to grow beards, and ordering all shops selling CDs to close their businesses.

But this is our internal problem, and if we choose to keep mum about it, it is our own choice. However, when the same terrorists start intruding into the territory of our neighbouring countries, then it no longer remains a domestic problem, and this is what the international community has been trying to explain to our rulers.

Resultantly, our diplomacy will have to go beyond sending flowers to the Indian prime ministers after his bypass operation, or exchanging greetings on India’s Republic Day. We have to recognise and acknowledge more forcefully that terrorists like all other countries in the world exist in Pakistan, and they sometimes use our soil as a base to launch attacks on neighbouring countries. The state may not be involved, for which one should be thankful, but this is not enough. These non-state actors need to be controlled, and curbed, lest the international community decides to take matters into its own hands. Such an option may not be pleasant, and bouquets may not suffice to stop the ensuing catastrophe.

www.jillani.org

Loss of public trust

CONFIDENCE grows at the rate a coconut tree grows and falls at the rate a coconut falls. That exquisite simile from Montek Ahluwalia, an Indian policymaker, summed up the 2009 gathering of the World Economic Forum.

Political leaders arrived depressed and left almost paralysed with fear after exchanging horror stories of just how savage and sudden the downturn had been in recent months.

The herd mentality that created the unsustainable boom now threatens to turn recession into slump. Businesses have already written off 2009 and there are doubts about whether recovery will start meaningfully in 2010. Economist Joseph Stiglitz believes that, even now, there is a failure to recognise just how bad things are. Bill Gates, the Microsoft founder, says this is a four-year recession; if he is right that would put it up there with the Great Depression.

There are those who still cling on to the hope that the colossal stimulus provided by lower interest rates, fiscal expansion, tumbling commodity prices and bank bailouts will work sooner than the suicide squad in Davos believes. Peter Sands, chief executive of Standard Chartered, noted that expectations of the future depend heavily on what is going on in the present. In the good times, the assumption is that life will be sweet for ever; when the rain is thundering down it is hard to believe that the skies will ever clear.

At some point, the storm will blow over and the hope of policymakers such as Mark Carney, governor of the Bank of Canada, John Lipsky, the deputy managing director of the IMF, and British prime minister Gordon Brown is that the change in the weather can be hastened by co-ordinated and aggressive policy action. There are high expectations of what the April G20 summit in London will deliver — too high, if Davos this year is anything to go by.

The problem boils down to one little word: trust. Business leaders are cutting jobs and output because their order books are shrinking and they don’t trust policymakers to deliver recovery this year. Banks don’t have enough trust to lend. And, most significantly of all, there has been a dramatic loss of public trust in business.

There was much soul-searching in Davos as to why consumers now appeared to have a visceral loathing of those heading corporations, and whole sessions were devoted to the need to rebuild trust. The recognition that widening inequality, corporate greed and a lack of suitable regulation helped to create the problem meant at least that the seed of a coconut tree was sown. It will, however, take a long time to grow — even assuming that it takes root.

Barack Obama, a significant absentee, put his finger on the problem last week when he gave Wall Street a dressing down for paying $18.5bn in bonuses last year and simultaneously set up a task force to find ways of bringing help to American working families.

What the new president identified was that the economic system of the past 30 years has been hugely — and unhealthily — skewed towards those at the top. In the United States, workers were able to improve their living standards only by sending spouses out to work, working longer hours and double (sometimes triple) jobbing. When even that was not enough, they borrowed more.

This suited Wall Street just fine. It developed a laxly regulated model that provided mortgages with no questions asked. It packaged up sub-prime loans and through financial alchemy turned the dross into gold. The original investments were leveraged up as traders pursued short-term profit and assumed that there was no prospect of a crash in house prices.

It would be wrong to assume that the public ever had much affection for the masters of the universe as they indulged their orgies of conspicuous consumption. There was, however, no violent reaction so long as the system delivered growth, jobs and rising asset prices. But just as voters turned savagely on the UK Conservative party in 1997 when it was shown to be incompetent as well as uncaring, so the evidence that the Wall Street/City model of financialisation is utterly broken has engendered an entirely predictable loss of faith in business and all its works.

Kris Gopalakrishnan, who runs the Indian company Infosys, said: “Trust will get rebuilt only if we go back to fundamental values of integrity, leadership and fairness.” Stephen Green, the chairman of HSBC, confessed that some of the practices in the financial sector had not contributed to human welfare.

The writer is the Guardian’s Economics editor.

— The Guardian, London