Inflation and reforms

Normally growth and inflation go hand in hand. So, if the rate of inflation in Pakistan seems to exceed the 3.9 per cent set for the year while the rate of growth is estimated to go beyond five per cent, it should not be considered such a disaster.

In fact, when national economies heat up, the rate of inflation gets on a gallop. But if economic growth comes without any significant increase in employment and with an undue increase in the prices of essentials, including food items, it is a matter to be seriously concerned about.

In the last eight months the rate of inflation is said to have soared, while no positive development has taken place on the job market. The large-scale industry which is said to have grown at the rate of over 14 per cent in this period, normally does not generate employment on a significant scale.

It is only the medium and small enterprises that generate jobs at a higher rate when they gain some momentum.

So far, not much has happened on this score. Jobs are also created at a reasonable rate when the expansion of physical infrastructure is taken in hand. But this too is not happening.

In fact, the public sector development programme budgeted at Rs160 billion for this year has not used up the 35 per cent of its allocated amount so far. As for prices of essentials and food items, things appear even more depressing.

The consumer price index is said to have risen by 4.31 per cent in February this year over February 2003 - primarily as a result of an increase in food and beverage prices.

To this must be added the recent increases in petroleum prices which affect prices across the board. So, a growth rate of a little over five per cent with an inflation rate of four to five per cent for the year is likely to prove back-breaking for most Pakistanis who have still to recover from the lingering effects of four difficult years when the government went on an IMF's prescribed reform spree.

The prime objective of most of the reforms has been to contain budgetary deficits which the international aid agencies believe to be the main cause of inflation. But then if even after four years of strict adherence to this nostrum, the country remains prone to inflation at the slightest upward movement in the economy.

Perhaps there is reason to take a deeper look at the IMF formula for achieving macro-economic stability. China and India have achieved high growth rates despite their high budgetary deficits.

The two countries have done this while keeping their inflation rates from going out of control. They are privatizing their vast public sector with caution while we are conducting it with an undue haste which has only resulted in massive job losses without any significant benefit to the economy.

One only hopes that after the current IMF programme comes to an end later this year, the official economic managers would be able to put in place some innovative and indigenous economic policies that would ensure growth along with rapid job generation and a controlled rate of inflation.

Curbing WMD proliferation

The tabling of a resolution by Britain and the US in the UN Security Council seeking a ban on the sale and transfer of materials used in developing weapons of mass destruction to non-state actors is a timely development.

Expected to be approved unanimously, the resolution will be binding on all 191 UN member countries. It will remove the existing dilemma in bringing to book WMD proliferators by making states and not individual citizens - whether they act alone or at the behest of a state - responsible for keeping a check on proliferation.

The draft resolution is equitable because it is not state-specific. It vindicates the stand taken by Pakistan in the aftermath of the A.Q. Khan scandal that many more individuals working out of Europe and elsewhere around the world have been involved in proliferation activities without any blame being pinned on their host countries, so that the singling out of Pakistan was not fair.

The draft resolution requires each member country to enact laws declaring the manufacture, sale and transfer of WMD component materials and their delivery systems by non-state actors punishable offences.

But the proposed regime places no curbs on state-to-state transfers of WMDs, a practice that many western countries have been guilty of - Iraq's stockpiling of WMDs during the eight-year Iran-Iraq war and Israel's acquisition of nuclear and biological weapons being but two cases in point.

The truth is that the world will remain exposed to the many dangers of WMDs and their proliferation in one form or another as long as big powers insist on keeping their stockpiles of such weapons intact.

A global disarmament regime is required to ensure full compliance on a universal basis. Obviously, this would need more time and more deliberations on the part of those who possess WMDs in large quantities and consider them strategic assets. It should be hoped that the proposed resolution would lead to a greater understanding of the dangers of WMDs and towards eventual global disarmament.

Vacating schools

The Sindh chief minister's promise to ensure that illegally occupied school buildings are vacated is reassuring. While no survey has been carried out by the provincial government so far, it is believed that a number of school buildings have been encroached upon by influential people in the rural areas.

The Sindh government's strategy of having these buildings vacated instead of commissioning new ones is sensible. This is a problem that is not restricted to Sindh. Last month, the Peshawar District Council's monitoring committee had detected over 20 non-functional, or "ghost", schools in the city.

The committee said in a report that the schools had been converted into "hujras" or cattle pens. Thousands of children in the localities concerned were thus deprived of schooling. This is a shame considering Pakistan's low literacy rate and paucity of funds allocated to education.

One may recall the campaign launched by Punjab in 1998 with the help of the army, which unearthed over 4,500 ghost schools. It was revealed that 40 per cent of the province's teachers went to the schools once a month to collect their salaries.

While the campaign was successful in identifying ghost schools and errant staff, little was done in terms of corrective action. The Punjab government did not punish those responsible for being involved in the misappropriation of resources by running schools on paper.

This is something all provincial governments need to look into. Aside from identifying ghost schools all over the country, strict action should be taken again those responsible for irregularity.

The government needs to have the resolve to have school buildings - and in some cases hospitals - vacated. It should also take measures to ensure that ghost schools do not reappear after the government's campaign ends.