Insular decision-making
A NATIONAL consultative workshop on economic literacy and budget analysis has demanded that the government should involve the parliament, civil society representatives, technocrats, opposition leaders and other sections of society in the economic decision- and budget-making process. Held in Karachi on Friday, the workshop, in which more academics and NGO representatives than members of parliament participated, also reached the conclusion that many mega projects were undertaken without the preparation of a feasibility report and in isolation from the stakeholders. These are serious shortcomings because they have grave implications for the national economy. It is also inexplicable why the government should adopt this approach in economic and development matters, especially when many of the decisions taken affect a very large number of people. Only the other day the prime minister told the speaker of the National Assembly that important political issues should be debated in parliament to strengthen democratic traditions. By the same token, one expects the prime minister, who is also the key economic manager of the federal government, to attach similar importance to the participatory process on economic decision-making as well.
This broadening of decision-making at every level — be it national, provincial or local government — is important for two reasons. First, many of the projects undertaken have profound political and strategic implications for the country. It is only fair, if we claim to be a democracy, that the debate on these be open and involve as many people as have the knowledge, expertise and experience on the subject. Through this process the policy-makers will not only benefit from the views and recommendations of the parliamentarians and leaders of public opinion; the government will also be able to win the public’s cooperation which is essential for the smooth implementation of a project that would presumably have been suitably modified if found necessary. This is all the more essential for drawing up the budget and trade and investment policies in which only the representatives of the chambers of commerce and industry and of agriculture are consulted. Even members of parliament are not sufficiently involved, as a result of which no meaningful debate takes place in the house on these issues.
The second reason why wider participation is essential is the financial implications these decisions have. The budget and the development programme set the direction of the country’s economic policy for the following financial year which affects the life of every man, woman and child in the country. Doesn’t social justice demand — in keeping with the dictum ‘no taxation without representation’ — that the people have a say in these decisions through their representatives? Similarly, the numerous projects, especially the mega projects, that are financed by foreign aid donors, impose a heavy debt burden on the country. The loans which run into millions of dollars are repaid with the taxpayers’ money. It is a pity that there are many projects — the revival of the Karachi Circular Railways for one — which have had numerous feasibility studies carried out with millions being spent on them and have still not been implemented for reasons not quite known. Others, such as the Greater Karachi Sewerage Project, the Left Bank Outfall Drainage (LBOD) and the Right Bank Outfall Drainage (RBOD), financed by the Asian Development Bank, are known to have failed to produce any lasting social and economic benefits. Wider participation in decision-making could have avoided such catastrophic failures and losses.
Oil price increase again
WITH Friday’s oil price hike, the price of petrol is 39 per cent higher than in January 2005, while that of diesel is 42 per cent higher. The oil marketing companies will defend this citing record high prices in the world market, arguing that there is little that can be done to prevent domestic prices from rising. However, valid questions have been raised of late, including on the floor of the Senate, with reference to the pricing formula followed by the oil companies’ advisory committee (OCAC) which sets oil prices every 15 days. One charge against it is that it uses the price of US crude as its benchmark for calculations, which can give a misleading result given that Pakistan imports most of its oil from the Middle East and Gulf, where oil prices are lower. For example, Pakistan State Oil is said to buy its supplies from Kuwait. On August 31, 2005, while the price of US crude had jumped to almost $70 per barrel, the price of Kuwaiti oil was still lower at $57.91 per barrel.
The other concern, and recently raised by Prime Minister Shaukat Aziz himself, relates to the composition of the OCAC. All its members come from the oil marketing and refining companies with no government representation or any independent economic experts of the oil/gas sector. Why is the Oil and Gas Regulatory Authority (OGRA) kept out of it, given that it is supposed to be a regulator of the oil and gas industry? Only time will tell the impact the oil price hikes effected in recent weeks have on economic growth, but one thing is certain: they will hit the lower-middle and middle classes hard, and may even contribute to a rise in the incidence of poverty. At the very least, the government needs to take a closer look at the oil-pricing formula followed by OCAC and if necessary hand it over to OGRA. This becomes all the more necessary considering that the government is not charging the petroleum development levy (which used to generate over Rs 40 billion annually in the past) and paying the oil companies billions of rupees in subsidies.
Curbing drug trade
THE news that the Anti-Narcotics Force (ANF) recovered 75 kilos of heroin from 20 foreign drug traffickers in just about two weeks in Peshawar underlines the seriousness of the problem. Of the 20 men and women arrested, a majority are Nigerian and belong to international drug mafias. One man en route to Ghana, for example, was caught with 11 kilos of heroin concealed inside medical equipment while a Turkish man was caught with 37 kilos of heroin in his luggage. Three women were also among the 20 trying to smuggle heroin out of the country. All had contacts with local drug traffickers. ANF officials say they are working hard to curb this illegal trade. So far, they claim to have arrested 75 local smugglers this year. So the gravity of the situation is obvious. However, it is not a new problem for poppy cultivation has always posed a serious threat to Pakistan. International efforts to reduce poppy cultivation in Afghanistan — which saw a resurgence of the menace after the fall of the Taliban — have not yielded the desired results.
Until steps are taken to create alternative means of livelihood for poppy growers in both Afghanistan’s and Pakistan’s underdeveloped tribal belts, drug trafficking will prove difficult to contain. According to statistics, there are at least 500,000 heroin users in the country, while the overall figure for drug addicts is believed to be four million. While one appreciates ANF’s nabbing of international traffickers, a long-term strategy is urgently needed to stop the inflow of opium and heroin from Afghanistan and stricter vigilance is required at the country’s points of entry. At the same time, the government should work on addressing the problem from an economic angle so that growers can be released from the drug mire they are trapped in.
Why India voted against Iran
INDIA voting on the side of the Americans and the Europeans against Iran at the September 24 IAEA board meeting in Vienna was bound to enrage the Iranians. The jury is still out as to how Tehran will ultimately react to the Indian perfidy. There have, so far, been conflicting reports from Vienna and Tehran. The Vienna missive spoke of Iran immediately retaliating by cancelling the $22 billion liquefied natural gas deal with India. But later reports from Tehran still left a modicum of shades of gray on the subject.
Irrespective of whether Tehran pays the Indians back in the same coin or sticks to its commitment on the gas deal with Delhi, it is not possible to water down Indian treachery and its impact that goes far beyond bilateral ties.
Many have been surprised by Delhi’s decision to stand up and be counted in the camp of western neo-imperialists out to nettle Iran on the nuclear issue. How can India, the self-proclaimed moral guru of the Third-World, stab a camp follower in the back? What, the argument goes, has happened, or is happening, to the erstwhile grain of India that regarded the West with so much suspicion and mistrust?
What baffles the observer is how an energy-starved India, which has been laying so much store by its frenzied rush to become an international economic power-house, even think of putting its lucrative energy deal with Iran on the line just in order to please its new western friends.
It wasn’t so long ago that India prided itself on its independent foreign policy of which opposition to the western camp was a cornerstone. India was given due recognition, by friend and foe alike, for its capacity to stand up to the bullies of the western world whenever it deemed its principles and scruples to be coming under attack. So what has so radically changed the Indian chemistry that instead of standing up to them now it is standing alongside them?
A plausible answer to that puzzle is, in one word, the sea change in the complexion of the Indian leadership. It goes without saying that the man at the top of a government or state matters much.
Bush has steered the US so aggressively on an imperialistic track because the man is hopelessly hooked on the neo-con ‘vision’ of Pax Americana in the 21st century. Blair, a supposedly enlightened liberal, has turned out to be a closet imperialist indistinguishable from the empire-builders of bygone centuries.
Manmohan Singh is the key to understanding the radical ‘shift’ in Indian foreign policy, especially in the context of the western world. He is a product of the World Bank, and this American-controlled entity is as much an imperialist outfit as was the benighted East India Company at the prime of Pax Britannica. In fact, British imperialism was in lockstep with the cut and thrust of the company, just as US neo-imperialism is, today, with the likes of the World Bank and IMF.
In yesteryear, the cross was the inevitable alter ego of the colonial sword. Today, the corporate culture is an essential clone of neo-colonialism of the neo-conservative brand. Pax Americana has been rigorously pursuing a two-pronged strategy of acquiring military bases wherever possible and supplanting in leadership positions wherever the acquisition of military foothold is difficult, Washington’s friends preferably those trained at the World Bank/IMF.
British imperialism was served ideally by the brown or black sahibs picked up from the natives. They lived up to Macaulay’s masterly vision of native loyalists — speaking their masters’ tongue and thinking like the masters — and delivering as expected of them to enhance imperialist interests without demur. The WB/IMF clones are, likewise, expected to do the bidding of these institutions and paymasters.
The watershed heralding a new course for Indian relations with the West, and US in particular, was reached two months ago when Manmohan Singh visited Washington and was rolled out the red carpet. The Americans cornered him to concede on the game plan for Iran by promising him an expanded programme of nuclear cooperation capped with technology transfer and dual-use equipment.
Manmohan found the offer tempting and irresistible and fell for it. Iran’s goose at IAEA was cooked then and there in Washington.
Congressman Tom Lantos, a ranking member (Democrat) of the House International Relations Committee, let the cat out of the bag when he boasted, on the heels of India’s helpful vote in Vienna, that Washington’s cooperation with India should “encourage quid pro quo diplomacy to engender consistent support for US interests.” Lantos was also unabashedly frank in admitting: “India cannot expect (us) to accommodate her while she totally disregards our interests...”
India obviously didn’t succumb to pressure from Washington and voted in its favour only to get it off its back. Far from being a one-time error, it seems to be part of a well-deliberated new policy to integrate India’s nuclear ambitions into the western grand scheme to keep the nuclear club’s door firmly shut on another Muslim state other than Pakistan that gate-crashed into the club and whose presence there is barely tolerated.
Credence to this was furnished only two days after the Vienna vote when Indian Foreign Minister Natwar Singh showed up in Ottawa to sign a deal with his Canadian counterpart Pierre Pettigrew calling for renewed nuclear safety cooperation and the supply to India of “dual-use items” to civilian nuclear facilities.
Canada has had a freeze on its nuclear cooperation with India since 1974, when India exploded its maiden nuclear device. Why should Canada, all of a sudden, feel the need now to roll back 30 plus years of treating India as a pariah in the nuclear field?
An official spokesman of the Canadian ministry of foreign affairs didn’t allow any suspense to shroud the precipitous Canadian move. Briefing the press, he admitted that Ottawa was impressed by India voting with Canada, the US and the Europeans “in condemning Iran for its nuclear activities.” What he didn’t say was that the government of Prime Minister Paul Martin has been bending over backward to please Washington, wherever possible, to make amends for Jean Chretien’s bold and principled decision to stay out of any involvement in Bush’s Iraq adventure.
So it is fairly obvious that India, under Manmohan, the World Bank man, is happily content to play footsie with its western friends and mentors, in order to reap a rich harvest in cutting-edge technology and state-of-the-art equipment from the West to whet its own appetite and become a world-class nuclear power.
Does it also presage India participation in the neo-con plans to tighten the noose around Iran’s neck?
India, it is a matter of fact, has been eager to get on board the rolling American bandwagon ever since 9/11. The BJP, for crass political expediency, may denounce Manmohan Singh for abandoning India’s no-truck-with-the-West attitude but the Vajpayee government, too, was petulantly anxious to join Bush’s battle against terrorism and did, for the record, offer its services for operations against the Taliban. Manmohan Singh isn’t, really the first in Delhi to go for the forbidden fruit.
But didn’t Delhi take into account the fallout of its provocative, anti-Iranian, move on its interest in buying the badly-needed Iranian gas for its ambitious industrial take-off?
It’s inconceivable that there was no such homework done in Delhi before the Rubicon was crossed in Vienna and a palpable backlash — inviting die was cast against Iran. So how were the tea- leaves read especially on an issue of such vital stakes as energy for a starving Indian industry?
It could only mean one of the two probable outcomes that the Indian pundits may be banking on. One, that Tehran would lump its pride and not abandon the gas pipeline-to-India-via-Pakistan scheme, because of it being too lucrative for Iran to abandon.
Two, that if Tehran, as expected, accords primacy to its well-known national pride and scuttles the gas deal, India’s western mentors would bail it out with another pipeline from some other source in the neighbourhood, say, for instance, Qatar. The gas-rich Arabian Qatar has had a foot in the door for India for several years.
What should Pakistan, caught in the middle, do? Nothing. It doesn’t have too many cards to play in this game of nerves, although Pakistan would be losing big bucks in royalties on the pipeline transit if the deal falls through.
The Iranians don’t trust Pakistan sufficiently, especially since Islamabad jumped on board the Bush juggernaut in Afghanistan. This came on top of the erstwhile mollycoddling of a Tehran-hostile Taliban regime in Kabul. But Islamabad can still softly and unostentatiously advise Tehran to be chary of an untrustworthy India which wouldn’t bat an eyelash before stabbing Iran in the back wherever its own interest so warrants. Anything warmer than a strictly cold business deal with Delhi could be tantamount to courting trouble.
The writer is a former ambassador.