Savings and investment

OVER the last 55 years, Pakistan — its people, its businesses and its governments — have been poor savers. At the time of the country’s birth, gross domestic savings rate was less than five per cent of gross income. It was six per cent in 1959-60, the first full year of the government headed by Ayub Khan. It more than doubled to 12.2 per cent in the next five years and reached 12.5 per cent in 1969-70, the last year of Ayub Khan’s rule.

The savings performance was extremely poor during the period of Zulfikar Ali Bhutto. In 1974-75, the mid-point of Bhutto’s term in office, gross domestic savings dipped to only 5.6 per cent, the lowest level in nearly 20 years. It recovered in later years but never reached the level at which investments could be made to sustain a high rate of GDP growth. When domestic savings are low, the only way to realize a high rate of investment is to rely on foreign capital flows. This is precisely what Pakistan has done. Foreign resource inflows were very low before 1954, when Pakistan entered into a defence alliance with the United States.

In 1954-55, foreign capital accounted for only 1.1 per cent of GDP. After that it increased steadily and topped 10 per cent of the GDP in the 1980s. In the eighties Pakistan received sizable amounts of foreign assistance and remittances by its people working abroad. One estimate puts this type of capital flow at $30 billion in the fifteen-year period between 1975 and 1990.

In the 1990s, however, Pakistan was no longer favoured as a destination for those institutions that provided foreign assistance. Geopolitics was one reason for the loss of interest in Pakistan by aid givers. The other was Pakistan’s increasingly poor performance in using the aid dollars that did flow into the country. Aid-giving agencies have begun to increasingly focus their funds on the countries showing good performance. Pakistan was not counted as one of them.

At the same time, there was a significant decline in the number of Pakistanis working in the Middle East — the main source of remittances for the country. This one-two punch left Pakistan reeling and brought about a five percentage point decline in the rate of investment — from 18 per cent in 1990 to 13 per cent in 2000. Unable to adjust quickly to a decline in the availability of foreign capital — aid and remittances — Pakistan resorted to borrowing. Some of this borrowing was reckless; it was undertaken at high interests and for short periods of maturation. Consequently, the burden of debt increased exponentially.

On June 30, 2001, the close of last financial year, public debt was estimated at $61 billion at the exchange rate that then prevailed. Of this amount, 44 per cent was owed in rupees and 56 per cent in foreign currencies. Once an increasing amount of debt service and defence expenditures had been taken care of, there was little left for investment in development by the public sector. The result was a rapid deterioration of physical infrastructure and a virtual collapse of education. To pull out of this situation Pakistan will need to increase its rate of investment. To do that it will initially have to rely on foreign capital flows.

How much of its gross output should a country invest to achieve the desired growth in GDP? It takes investments of anywhere between three to six per cent of GDP to produce an increase of one per cent in a country’s gross domestic product. Economists call this the incremental capital output ratio or ICOR. Lower the ratio, the higher the efficiency of capital use.

Pakistan had an ICOR of about 3.5 in the sixties when a good part of the investment went into highly productive sectors — agriculture and small and medium enterprises. With an ICOR of 3.5 and rate of investment of 21 per cent of GDP, Pakistan could sustain a rate of growth of 6 per cent a year. Unfortunately, the level of ICOR has continued to increase over the last several decades as the economy became more inefficient. This was for several reasons, but of these two need to be emphasized.

First, under Zulfikar Ali Bhutto, Pakistan dramatically increased the size of the public sector. With larger public sector came demands for investments in large and long gestation projects of dubious value. Karachi Steel Mill is perhaps the best example of this shift in emphasis. Investments were also made in a number of other public sector enterprises that contributed little — perhaps not at all — to development. These included the Heavy Machine Tool Complex, the Heavy Electrical and Mechanical Complexes, the Saindak copper project.

Second, corruption became rampant as public officials — politicians as well as bureaucrats — began to milk the system. Therefore, with investment going increasingly into poorly managed public corporations and with a significant proportion of it being siphoned off by corrupt officials, ICOR in the 1990s increased to 4.5.

Simple arithmetic tells us that to maintain a six per cent growth rate, Pakistan needed to increase the rate of investment to 27 per cent of GDP. That, of course, did not happen. Instead, the rate of investment fell to one-half the amount needed — to only 13 per cent and, as could have been expected, the sustainable rate of economic growth declined to one half of that averaged in the first forty years after independence.

Without a fundamental change in the structure of the economy, it will be exceedingly hard to get GDP to increase at a rate of more than three per cent a year. This rate of growth is not high enough to make a dent in the incidence of poverty. As I have repeatedly pointed out in the contributions made in this space, unless a significant increase takes place at the rate the economy is growing, Pakistan can look forward to extreme social and political instability. To quicken the pace of growth Pakistan must increase the quantity as well as the quality of investment.

Investments, of course, come from savings. Pakistan has always had a low rate of domestic savings. The reason for this is partly cultural but also partly institutional. Even those who wanted to save were not helped by the institutional structure.

There was a great dearth of financial products that would have encouraged the saving people to set aside a part of their current income for future use. Capital markets were weak, people did not have much confidence in the banking system, there was no organized pension system for the public at large, and so forth. To pick up the example used in last week’s article, if Pakistan had an efficient system of housing finance it would have created incentives for individuals and households to save.

Also, a good pension system available to the public at large encourages savings. Unfortunately, systems such as these don’t exist in the country. It will take time for this situation to be rectified. In the meantime, Pakistan must do all it can to increase the amount of public and private investment.

Looking a bit more deeply into the investment picture reveals a number of problems. We should identify at least four of them. First, a decline in investment affected both public and private sectors. Second, the pressure on the public sector had a severe impact on a number of important sectors of the economy.

Third, the budgetary problems also hurt the development of the country’s abundant human resource. Fourth, the environment for private investment in modern sectors deteriorated over the years resulting in their virtual stagnation. Let me say a few words about each of these four consequences of declining investments.

Agriculture is one of the several sectors to suffer from the decline in public investment. Public expenditure in agriculture fell continuously — it now accounts for less than one per cent of the total development budget, even though Pakistan already lags in most public goods needed to move to higher valued and more diversified agriculture, like rural roads and electrification.

Public investment in research in Pakistan is only one half the Asian average of 0.6 per cent of agricultural GDP, and has declined sharply in the 1990s. The priority among alternative investments also requires critical review. For example, provincial expenditures on extension are considerably higher than for research which is contrary to global trends.

Budgetary pressures have also seriously affected the sectors of education and health. In 1993-94 the proportion of GDP spent on basic social services was only 1.6 per cent — among the lowest in the world. The World Bank, along with some other donors, launched the Social Action Programme (SAP) to redress this situation. The SAP’s principal objective was to raise the expenditure to 2.2 per cent by 2001-02. However, that target was not met and the donors revised it downwards to 1.95 per cent of GDP.

The loss of confidence of private entrepreneurs in Pakistan’s economic future had an impact on both the quantity and quality of private investment. What is most troubling about this trend is the drop in investment in manufacturing. This has fallen steadily since 1993-94 with the decline occurring more rapidly among large-scale firms than in small and medium enterprises. Before an investor decides to commit his money in a particular venture, he must have the confidence that the assumptions on which he has calculated his rate of return will remain unchanged.

That assumption could not be made in Pakistan for as long as regimes changed quickly, each coming with a new set of priorities. The investment climate has in recent years been characterized by frequent and unanticipated policy changes. Policy uncertainty was in part a consequence of the macroeconomic crises that dogged the country constantly throughout the decade of the 1990s. Frequent changes in government shifted emphasis and kept the private sector guessing.

The investment climate was also prejudiced by widespread problems with law and order, particularly in Karachi, the country’s financial and commercial capital. Businesses in Karachi faced problems ranging from petty theft to organized crime, sectarian violence and, more recently, targeting of foreigners. They have also had to deal with a rising cost of several important inputs — in particular oil and electric power.

Smaller businesses — the backbone of the Pakistani manufacturing sector — had to face increasingly groups that extorted money for various kinds of services rendered. Money was demanded for delivering water that did not flow out of public pipes. Or for keeping the shops protected from vandalism. Or for providing security against kidnapping and car thieves. Investors had to build these costs into the cost of doing business and often the resulting rate of return was not attractive enough to take the risk.

To turn around the Pakistani economy it is important to significantly raise the rate of investment — to double it from the present 13 per cent to 25 per cent. At the same time, the government’s strategy should be to create an environment for investors in which transaction cost for doing business is reduced, thus lowering the incremental capital output ratio. The government should focus its own resources on a few sectors — in particular on agriculture, irrigation, communications and basic social services. The rest of the economy should be left open to the private sector. There should be a concerted effort to invite foreign direct investment into the country. The aim should be to get an inflow equivalent to five per cent of the gross domestic product within the next five years. If this were realized, Pakistan will be able to close the savings-investment gap which has bedevilled the economy since its birth in 1947.

Foot-in-the-mouth

I WROTE a two-part article on Pakistan’s relations with the West, the United States in particular, in April 1958. These articles formed a part of my book Out to Lunch and I re-read them to see how they would stack up in the light of what is happening these days.

Let me add here that when those articles appeared, our own Foreign Office was not amused and I was summoned to the Mohatta Palace where the Foreign Ministry was located, for an official ticking-off. ‘Siku’ Baig was the foreign Secretary and he was a friend of mine.

After he had officially ticked me off, he told me that he agreed with most of what I had written. In those days, the sole obsession of the United States was the containment of communism as the war against terrorism is these days. This is what I wrote in 1958: “For us in Pakistan, the danger of communism is only general and vague and decidedly not impelling enough for us to panic. While we do appreciate the danger of communism, this pathological propensity for seeing communists everywhere that the Americans appear to have, becomes a slightly foolish pose when it is assumed by us. And here is the reason why.

“Pakistan’s primary aim is to contain India. Not communist imperialism. Communism is at best a secondary consideration. Our foreign policy begins and ends at the cease-fire line in Kashmir. And the only criterion for evaluating the success of our foreign policy is whether or not it best projects our primary aim and best protects our self-interest. everything else, counter-subversion committees included, are subservient to this.

“The suspicion has existed all along that the West was disinclined to go the ‘whole hog’ with us. On our part we energetically endorsed whatever was proposed by the West for the furtherance of Western objectives in Afro-Asia. But foreign policy is not conducted on a quid pro quo basis. Had we understood this, disenchantment would not have been accompanied by bitterness.

“To cap it all. We are now totally dismayed to learn that not only is the West not giving us full backing on Kashmir but is actually subsidising India’s arms build up. Would Mr Dulles be visited by elation if he learnt that Britain was subsidising a Chinese arms build-up? And why is India arming to the teeth? Against China? Phooey!

“India may not be getting ready to attack Pakistan (and here is the kernel of our case) it requires only a slight shift of emphasis in India’s politics to bring into power the lunatic-fringe that did not hesitate to kill Gandhi. Would they think twice about attacking Pakistan if they knew they had convincing arms superiority? This is not an academic question. It is a very real problem for us and such a contingency is a real probability, at least in the minds of those who make up the Hindu Mahasabha.”

I repeat that I wrote this in 1958. I do claim to have prescience but anyone with a modicum of common sense would have foreseen that our alliance with the West (the most allied ally) was based on our usefulness to the West, that the West would not back us on Kashmir and the Congress in India would be eclipsed by Hindu fundamentalists.

It is in this context that we must see the statement of Donald Rumsfeld in New Delhi that there was evidence that al-Qaeda was operating in Kashmir. In New Delhi, he said that he had seen indications that there were in fact al-Qaeda operating in the area near the Line of Control. He said that he had no evidence. There is not the slightest doubt in anyone’s mind who had given him this information (or disinformation). It was India’s gang of four — Vajpayee, Advani, Jaswant Singh and George Fernandes.

It is a matter of some astonishment that Rumsfeld should have proved to be so gullible and gone public with something of which he had no evidence. When he got to Islamabad, he did a volte face and admitted that the United States had no evidence. “We do have a deal of intelligence from people who say they believed that al-Qaeda men wee in Kashmir or were in various locations.

However, it tends to be speculative, it is not verifiable, it is not actionable,” he said at a press conference in Islamabad and thus he was able to extract his foot from his mouth. Rumsfeld’s clarification is categorical but it is not going to stop the Indians from making capital from it.

The goal posts will now be shifted and it will be al-Qaeda who will now be accused of fermenting an insurgency in Kashmir and anything that concerns the al-Qaeda plays well in Washington. It would not surprise me one bit if the carnage in Gujarat is attributed to al-Qaeda and every other communal riot in India and every bomb blast.

Washington must ensure that its visiting emissaries must say nothing that can provide grist to India’s propaganda mill. These emissaries must be warned of the dangers of putting their foot in their mouths. It would be in the fitness of things and an honourable course of action if Donald Rumsfeld was to tell off the Indians for misinforming him. I would have said the same for Jack Straw but he does not really count for anything.

Let the final words be that of Khushwant Singh. In an article in the Hindustan Times he writes: “Another fact about which we Indians have selective amnesia is that the vast majority of Muslims of Kashmir are not happy with our (India’s) presence... We have to admit to our shame that in all these years we have failed to gain their confidence and friendship.” Khushwant Singh neither works for the ISI nor has any links with al-Qaeda. He is an Indian nationalist and an exceedingly patriotic one.

An endangered species?: Medical practitioners

THAT September 11 would be the most expensive lesson in geography, culture and religion for the American people is another facet of that terrible tragedy that no one could have anticipated. Just about nine months ago my origin was a matter of speculation for most.

I could always sense the guessing game in their eyes. I could be an Arab, someone from South Asia, Hispanic or even biracial — that interesting amalgam of Caucasian and Negro that one sees more than ever before here in the United States.

Americans are truly polite, and when someone would get the gumption to ask, I would say “Pakistani,” and the guessing game would take on a new dimension: that of searching the remote files of 6th grade geography trying to remember where Pakistan was.

“Next to India,” I would try and help. For some that was no help either.

But now, the recognition is slick. There is a sudden warmth, some of it the relief of knowing where Pakistan is located, and some for the general perception that Pakistanis are the good guys, in this US-led holy “war on terror”.

Like the Pakistani population, expatriate Pakistanis also felt relieved that the pillage of Pakistan by the Bhuttos and Sharifs had come to an end with General Musharraf’s take-over. I even recall, with some embarrassment now, that I was proud to listen to the general’s speech on PTV Prime, when on a single phone call from Bush, he decided to side with America in its war against terrorism. His demeanour was so direct and honest. I got quite the good vibe.

And yet as time went by Musharraf caught the blight — the blight of the kursi and crazy glue syndrome. I have come to believe that even a sufi would be transformed by a temporary rest in Pakistan’s kursi. into one power-hungry — “it’s mine, all mine, forever and ever.” It annoys me that I quoted his “we oppose terrorism in all its shapes, forms and manifestations” and “the cause of terrorism needs to be determined, cutting the branch will not take care of the root”, when I would write.

How livid I feel that the slide of my disillusionment was sharp enough to be essentially vertical. And splat! Here I sit, as do all of us, our heads spinning like the whirrs and burrs around Bugs Bunny after a clumsy move.

What worth is a government that cannot even maintain the rule of law in a country and cannot provide security to its citizens? And a military government at that in this case? The referendum voted for continuity of economic reform. The stress is on the word “continuity”. And there lies dread.

There will be continuity in domestic terrorism as well. Physicians will continue to be killed, hundreds will leave a country that is desperately in need of doctors — all while the government looks the other way.

Whilst doctors are killed at point-blank range, and the electricity of an entire neighbourhood is shut off for a few minutes to ease the get-away of murderers, we are busy doing Bush’s bidding.

First there were declarations that no strike on Afghanistan would be made from Pakistani soil, but while the people were looking away, Americans were operating from four of our bases, no less, with no access provided to anyone Pakistani. Our own little piece of America right inside Pakistan!

As many as 284 doctors killed in a space of two years with a sharp rise in early 2002. Pakistani-American physicians are distraught beyond expression and wonder why it is doctors that are being targeted. A higher-up in Pakistan’s administration gives a plausible explanation: killing one doctor targets 1,000 people essentially, for roughly the number that one doctor would take care of in terms of their health needs.

Attention-seeking behaviour, he said. So pay attention, will you? To add insult to injury, the government does nothing to protect the healers. One cannot give the government the credit of following the Malthusian theory of population, for in that, perhaps, is seen the solution to our demographic problem!

Not only do we have American bases where no Pakistani can tread, we now have Pakistani troops fighting shoulder-to-shoulder with the Americans barging into a Miranshah mosque and trudging all over with boots on and toting guns, looking for Al Qaeda militants. Defiling of a mosque is a strange rite of passage, perhaps?

The arrest of the suspects in Daniel Pearl’s murder was quick. It is reported that on May 5, 28 suspects in the murder of 13 doctors were arrested, even though the killing of physicians have been going on for two years.

The fact that Pearl was American appears to confer on him some added weight. I was devastated by his murder, and I am more so with the murders of physicians, for in the latter case there is practically no action by the government.

“Bibi, aap ko itni jaldi kyun hai, aap baithiye, zara chai pijiye, sab thik ho jayega kal tak..” and various permutations of this sort of reassuring words hastened my leaving Pakistan within four months of a House Job at Karachi’s Civil Hospital.

Tailors do it all the time in Pakistan and certainly a little cramping of my style was no real urgency. When X-ray techs and blood transfusion techs started doing the same, my sabar ka paymana overflowed the cup. Marianne Pearl wrote in The New York Times that she wished that a monument in memory of Danny be built in Pakistan, so that her son could remember that his father was martyred there.

As much as I empathize with, and deeply respect, her feelings, I would urge the government of Pakistan to refrain from bartering away Pakistan’s already minuscule self-respect, and concentrate, instead, on the apprehension and speedy trial of the perpetrators of a crime that robs the nation of its healing hands.

I lost two brothers, aged 14 and 15, to a car accident and my father had a sudden death on the tennis court five years later.

I was only seventeen when he died. I understand Marianne Pearl’s grief, but I cry for the widows and orphans of the hundreds of doctors who have been killed and are still being killed, while the government seems to have little time for anything beyond doing possible to make things safe and comfortable for the American troops operating the in our tribal are as.

I must assure our America-loving rulers that even though Daniel Pearl was Caucasian, all human beings look the same on the inside.

The liver is not lighter in colour, neither are the intestines blonde. I know for I have seen Pakistanis and Caucasians on the inside. In the rapidly worsening economic situation in Pakistan, the families of the deceased physicians are left without a breadwinner.

Marianne Pearl has not been pushed to the depths of poverty by Danny’s tragic death. Almost 300 families in Pakistan are suddenly struggling with not just their grief but also survival. There were doctors who left the hallowed “land of the free and the brave” to return to Pakistan to help the people of Pakistan. And Pakistan gave new meaning to the phrase “biting the hand that feeds you”.

Let us not build monuments. Let us stop the on-going violence against doctors, let us make a list of the bereaved families, let us determine their needs, and let us establish a lifetime pension from the state for each of the families and scholarships for their children. This is one way, however small, of repaying the debt owed to the.

I did not want to be a snitch and complain to my Congresswoman in the US, but my grief for my brothers and father was too much for me to relive repeatedly, especially when the government of Pakistan was doing precious little to control crime and violence.

So I did write to my Congresswoman. America has been a haven for Type A personalities like me, for things get done here with a phone call or an e-mail. If the government of Pakistan does nothing or is its ineffective self, the Pakistani-American physician community mourns its brethren so much that we will get the US Congress to pass legislation condemning Pakistan for not protecting its own citizens and violating human rights. Remember the dirty word “sanctions”? Phir na kehna hamein khabar na hui.

The writer is a practising physician in Ohio, USA.

A Turkey diary

WAS Noah a Turk? The question has to be asked. When God’s chosen creation, Man, succumbed to Original Sin, Paradise was lost. When Man indulged in not so original sin he was punished by the great flood. When the Holy Lord decided to give mankind, and womankind a second chance He sent them to Turkey.

Noah may have set sail from somewhere near Sodom and Gomorrah (probably near Beirut if you ask me) but his landfall was on the top of Mount Ararat. That is where God showed him a dove and that is where the animals came out two by two (unless of course they had become two by three inside the ark).

Mount Ararat is in Turkey. By any logic this makes Noah a naturalized Turkish citizen. The world may have been born in Paradise but it was reborn in Turkey. The Turks are good with rebirth. They can pick up a dying empire and breathe a second life that lasts a thousand years. That is how they served Islam in the second millennium.

You may raise an eyebrow or even two over Noah’s citizenship but there can be no doubt whatsoever about the man who infused a new dynamism into Christianity. Paul was only a saint, not a prophet but he possibly did as much for the new faith as Noah did for the old one. Paul has been made synonymous with Antioch but he was not a Syrian. Since he wrote in Greek the Greeks have tended to co-opt him into their lineage. But Paul was Turk.

He came from Adana in southern Turkey (Austrian Airlines now has a direct flight from Vienna to Adana). Most of Paul’s missionary work was done in western Anatolia and Konya, and those he converted created the base, the foundations at the people’s level for the greatest Christian empire in history, the Byzantine Empire which started with Constantine, founder of Constantinople and lasted till the Ottomans conquered the greatest city of the past thousand years in 1453. Those who have read Paul’s letter to the Galatians may know this. Or not.

A Turk was responsible for both the first and the second world war. The first world war took place around 1250 BC when Paris, son of Priam, king of Troy (or Troye) abducted a Greek princess who proved to be worth a thousand ships, ten years of war, two generations of warriors and an epic poem. Paris was a Turk. Helen of Troy was really Helen of Greece. At least the Turk had an excellent reason for starting a world war. The love of a woman is always worth a war. It was a love war not a hate war.

The relationship between Turkey and Greece, the India and Pakistan of history before India and Pakistan were born, has followed a sort of Iliad pattern since the wars described by the blind poet Homer. More or less each time, the Greeks got the poetry and the Turks got the woman. Given a choice which would you prefer? Poetry or love? As victories go, poetry is pyrrhic while love is, I suppose, priapic. Both words are of Greek origin, deriving from Pyrrhus and Priapus, but an English dictionary will do for further details.

Incidentally, while Homer went on a bit about what everyone else and his uncle had to say about that war of heroes, we do not know too much about Helen’s views on the subject. Maybe as a beautiful woman who had abandoned a boring and possibly foul-mouthed hero-warrior-husband for a charming and invigorated lover, she may have wondered what all the fuss was about. You only lead one life.

The second world war was also the handiwork of Turks. The eleventh century saw the establishment of the first great Turkish-Islamic empire, that of the Seljuks, who picked up, piece by piece, the remains of the extraordinary Arab-Persian sultanate that had ruled the Islamic world since the inception of Islam. It was the Seljuks who nurtured the great Omar Khayyam, scientist and humanist extraordinary and poet incidental. By 1055 Baghdad had bowed to these central Asian Turks.

In 1071 the Seljuks delivered a mortifying if not a mortal blow to the Byzantines by defeating the Christians at Manzikert. The Byzantines who had till then sniffed at western Europe as a barbaric illiteracy (which was true, as any Asterix comics book will prove) now appealed to the Pope in Rome for help against Muslim infidels who were battering at the doors of the eastern Church and a bastion of Christendom.

It took Rome a couple of decades to respond but it was a slow age one assumes. However when the response came it was a torrent. The Byzantines had been expecting perhaps detachments of mercenaries to help out on the impregnable walls of Constantinople, or indeed take the battle into the enemy camps in Syria and Palestine. No one expected or even wanted great hordes of Crusaders, inspired by the zeal of liberating the Holy City of Jerusalem but pillaging every unholy city along the way as well.

The Byzantines were horrified by the Crusaders and urged them off as quickly as they could. Besides there was no knowing what the great unwashed would do to the balance of power in the region. We all now know what they did. But for the Seljuk victory at Manzikert there might never have been the seven great Crusades that dominate the memory of the everlasting conflict between Islam and Christianity.

Well, I suppose great is a flexible word. The knights of the fourth Crusade stopped at Venice en route to Jerusalem in 1202 but they were persuaded by the crafty merchants of Venice to change their mind and their direction. They were asked whether they wanted Jerusalem or booty, and there are no prizes for giving the correct answer. And so the fourth Crusade, instead of heading towards post-Saladin Palestine, ended up in the Christian capital of Constantinople where it placed a prostitute on the throne of Justinian and ravaged the economy for half a century. Europe destroyed Constantinople. Asia revived it, but in the name of another faith.

The difference between Europe and Asia is both in the air and visible from it. As the plane lifts from Vienna airport and tops the low hills, you see modern villages ensconced in delicious green and patches of dark forest. The fields are divided by clear, straight lines, neat and ordered and final. But as the view shifts into European Turkey these lines that demarcate ownership change. They become symmetrical, just into patchwork formations or bend into curves — the evidence of family squabbles over property.

Industrialized Europe has sorted out the problems of family inheritance by dispersing the family and shifting the focus of prosperity from land to manufacture.

Europe also, very clearly and emphatically, has a strict visa policy for flies. You don’t see flies in Vienna, no matter how many tortes might flood a cakeshop. But come Istanbul and the flies are waiting for you below the central chandelier of the hotel dining room. All right, chandelier is too grand a word for the cluster of bulbs at one spot but I was trying to give these very friendly people in our hotel a plug.

Back to our theme. What happens to flies in the airspace between Europe and Asia? Do the flies live in Asia out of preference, as a statement of free choice or a homage to our ancient civilization and culture? It can’t be the weather. The Bosphorus freezes over as much as the Danube. It can’t be some border checkpost in the sky that tells flies that they do not have a valid Shengen visa. Then what?

However, do not please get the impression that Istanbul is some fly-sodden village out of an Indian art movie made with government funds to be seen by a special select few of Mumbai’s cine intellectuals and columnists. Istanbul is, as has often and rightly been said, the city of the world’s desire.

Of bazaars that can count thousands of years on their registers and people who merge confidence with fun. Of kebabs and corn on cartwheels and hookahs in cafes snuggling beside cigars and cigarettes. Of old men ready to shine shoes in the park outside the wondrous Sultanahmed mosque, ready to work at your feet without losing a sublime dignity on their grizzled faces and a fierce equality in their eyes.

At what point can a kingdom begin to call itself an empire? The armies of Islambol, as Istanbul was also called by the Sultans until the word was eased out from usage during the secular dispensation of Kemal Ataturk, reached the gates of Vienna and in 1683 surrounded the city before being defeated by a coalition of the Holy Roman Empire, the Pope, Venice and Poland. That was yet another hinge battle on which the fate of continents and religions swung.

Kara Mustapha Pasha, the defeated Ottoman commander, was beheaded in Belgrade for the sin of defeat. Much before that Ottoman armies under Selim the Resolute had swept through the Balkans and overwhelmed the Mamelukes in Egypt, linking the edge of Austria with the borders of Morocco.

They were masters of the Muslim world and servants of Mecca and Medina, the holy cities. Christian Europe saved itself at the gates of Vienna.

The flight from Vienna to Istanbul is two and a half hours, or roughly the distance between Mumbai and Calcutta or Delhi and the Deccan. You have to conquer nations in the West to become an empire. In India all you have to do is to conquer yourself to be an emperor.

When was the last time you paid a million lire to take a leak? That is what it cost me to use the facilities at the entrance of the great cathedral of Aya Sofya, converted into a mosque by the conqueror of Constantinople, Mehmet Fatih, in 1453, and converted into a museum in 1935 by Ataturk. (When his troops began to destroy the cathedral after their victory Mehmet stopped them with a command. Take your booty, he told the soldiers, but leave the buildings to me. The mosque he created was the only one with an image preserved, a wonderful mosaic of Jesus and Mary.)

The zeros have gone haywire in the Turkish economy. A cup of tea (chay) at a roadside stall on the Bosphorus costs a million lire. The sea of Marmara glistens to your right, ships sway through the straits in front of you, and the dying sun has set every building on fire on the island-hills to the south. A million lire for tea with this view? Actually yes, when you find out that a US dollar fetches you a million and a half lire. Why don’t the Turks drop dozens of zeroes from their currency notes and make a dollar equivalent to one and a half lire? Heaven knows.

The writer is editor-in-chief of Asian Age, New Delhi