Flawed wheat policy

THE government’s explanation for abolishing a 15 per cent duty on the export of wheat raises questions about its policy on crop pricing and its ability to keep the markets for essential food items free of hoarders. The decision was taken following a recommendation by the ministry of food, agriculture and livestock that flour mills were not purchasing any wheat from the provincial governments and hence a considerable surplus had built up. However, the reason that this happened has to do with the government’s decision in mid-2005 to allow duty-free import of foodstuffs, including wheat. That was done to bring down inflation, caused in large part by rising food prices and a market controlled by hoarders. The government had thought that the imports would bring down prices automatically and that would help lower prices.

Thursday’s decision shows that the earlier policy of allowing duty-free imports of wheat to control its price was flawed. If, at that time, the government thought that the hoarders and speculators were manipulating the domestic wheat market to keep prices artificially high, it should have acted against such elements instead of allowing duty-free imports. This is because food imports usually take place when domestic stocks are in danger of running out and are not normally part of a strategy to fight hoarders. Had the government acted to curb hoarding, the situation would not have reached a point where a decision had to be taken to facilitate the export of surplus wheat. In effect, the export of wheat now will finance the earlier import of wheat — and this in a year when there is a bumper crop. Several questions need to be asked here. One, what is the guarantee that there will be a ready market for this wheat, given that cheaper varieties are available on the international market? After all, it was this cheaper wheat from overseas (especially Turkey and Russia) that was imported into Pakistan in the first place. Two, should not an effort be made to store this surplus wheat instead of exporting it, given that shortages have occurred in recent years?

Blame for this rather messy situation rests primarily with the ministry of food and agriculture and the provincial food departments which should have played a stronger role in reining in hoarders of wheat. Hoarding would have taken place at two levels: government and private. In the former case, the culprits are usually food department officials who have been known to indulge in this practice for personal gain. Then there is the questionable role played by some flour mills which are said to buy and hoard wheat in the hope of profiteering out of the resulting hike. Given that it is quite unlikely that the federal and provincial food ministries would not be aware of these shenanigans, one can only wonder why no action was taken against the hoarders in the first place. Also, given that 2004-05 saw a bumper wheat crop, why did the federal and provincial food departments not release their own buffer stocks to bring down the price of wheat and instead lobbied for cheaper imported wheat? The beneficiaries of the cheaper imports were not the consumers — since the price of atta did not come down — but rather the flour mill owners. The next time, there should be greater emphasis on curbing hoarding because that is the best way to remove supply bottlenecks and keep the price of wheat in check.

The task before the NCSW

ALTHOUGH it took 10n months to fill the post of chairperson of the National Commission on the Status of Women, the educationist Dr Arfa Syeda Zehra, who was recently appointed, has a huge challenge ahead of her if she is to fill the void left by her predecessor, Majida Rizvi. Over the years various commissions have been set up to look into different issues but their recommendations have invariably been cast aside. The NCSW, however, is a permanent body set up in 2000 by President Musharraf to look into gender-biased laws, among other things. Under Ms Rizvi’s leadership, in 2003 the NCSW recommended the repeal of the controversial Hudood Ordinances, whose very existence since 1979 has brought nothing but disgrace to the country. Up to 80 per cent of the thousands of women in jail are facing charges under the Hudood Ordinances, of which the most contentious part equates rape with adultery. Unfortunately, the NCSW’s mandate does not stretch beyond making recommendations, so after it completed its findings, there was little else it could do but to wait for them to be implemented. Ms Rizvi argued for the need to give the body more powers beyond those of making recommendations — a stance that one hopes Dr Zehra will pursue as there is a dire need for powerful groups to pressure the government on this issue.

Doing away with discriminatory laws requires patience and fortitude which so far have been lacking. At the heart of the matter is the government’s fear of alienating the deeply entrenched religious lobby in the country. Time and again, a seemingly progressive government has rejected discriminatory bills yet President Musharraf claims that women in Pakistan are more emancipated than their peers in developing countries. This simply is not the case. The reality is that the Hudood laws are flawed and were adopted under an obscurantist military regime. They need to be debated in parliament and the discriminatory provisions repealed. Instead of re-examining these laws for the umpteenth time, Dr Zehra must press the government to review the pending recommendations so that the NCSW can look into other unjust rules and laws that discriminate against women.

Stranded and tortured

THE allegations made by a group of Pakistanis living in Greece that they were abducted and tortured by Greek intelligence agents and police on suspicion of being linked to London 7/7 bombings need to be followed up by the Pakistan government through diplomatic channels. The Pakistanis, who were detained in Athens, say that they were illegally held and interrogated for a week during which they were blindfolded, beaten and psychologically tortured. During some of these interrogations, they allege, agents from Britain’s MI6 intelligence service were also present. In all 28 Pakistanis were detained, after a call was made from London after July 7 to a cellphone in Athens. Quite intriguingly, British Foreign Secretary Jack Straw’s insistence that no British agents were involved has been followed by a report in the Guardian which quotes MI6 officials admitting to the presence of some agents as “observers” during the interrogations. This, coupled with a recent ‘gag’ order by the British government to its press not to name the main MI6 agent involved in the episode, is enough circumstantial evidence warranting an intervention by the Pakistan government.

Even if the men were thought to be terror suspects, the course of action followed in their case falls outside the pale of law of any civilized country. To say that the men were detained because they were of the same nationality as some of the 7/7 attackers or that perhaps they were illegal immigrants is to miss the point — which is that the course of law should have been followed and that they should not have been tortured or held incommunicado. Islamabad should raise this issue with both London and Athens to ensure that its citizens abroad are treated according to law.

Kalabagh: the question of alternatives

THE rush to build the Kalabagh dam is taking General Musharraf and many of his supporters, including some born-again superpatriots, to heights of irrationality. As if the doctrine of necessity, which has provided the alibi for all military coups since the original one of Ayub Khan, was not enough, a new and much more sinister doctrine, that of indispensability, is being promoted.

Its purpose is to justify the indefinite continuation of the present regime and to coerce into acceptance its pre-determined choices, often based on dubious and doctored data.

At a time when the entire nation is preoccupied with grieving for the victims of the earthquake and worrying whether the survivors will be lucky enough to avoid the “second wave” of deaths that stares them in the face during the long and severe winter, it is nothing less than diabolical for the regime to leave an unfinished human agenda and embark on a politically-charged mega project on which the nation is so divided.

Despite the regime’s stubbornness to be in denial about the realities of the earthquake, all reports, both by national and international observers, suggest that the relief effort is woefully inadequate and, barring a massive increase in the resources and in the efficiency in the delivery system, the nation should brace itself for a human tragedy even bigger than what befell it three months ago.

This was an ideal time for the government to unite and heal the nation across political, social, economic, gender and geographic divides which have stalked the country since its inception, particularly since the military action in East Pakistan, 35 years ago, for which the military remains unrepentant. But the regime has been more interested in keeping itself in power than in keeping the nation together.

The way it has tried to monopolize the relief effort by the military and marginalize civilian efforts, can hardly engender any credibility about the various assurances and guarantees it is promising the three minority provinces to win their support for the KBD.

The government’s case about the pressing need for launching the KBD, does not rest only on its intrinsic merits, which are highly contestable as has been elaborated by many learned researchers. Its quintessential argument currently is that, since other hydroelectric projects will take longer time to materialize, if it does not undertake the construction of the KBD now, a very important and basic need, water, for the Pakistani people will remain unfilled and that the economy, especially agriculture, will be in dire straits soon. This indeed is the most fallacious argument.

Firstly, there are countless examples of countries which have developed successfully without having adequate basic natural resources such as land, water and minerals. The East Asian and South-east Asian economies’ success is largely the result of their ability to restructure their economies away from natural resources and production of primary commodities. Pakistan has, never seriously explored this option because of the vested feudal and industrial interests. Cotton and sugarcane are the most water-intensive crops and serious efforts need to be made to introduce crops and technologies that would reduce water requirements substantially. Scarcity is often the mother of innovation.

Secondly, it seems the government’s economic managers have failed to learn an elementary principle of economics — that of opportunity cost. Simply put, this means that there is always a cost of doing something in terms of things that could have been done otherwise. In enumerating the benefits of constructing the KBD, numerous other things that may be equally or more beneficial to society should also be taken into account. Unfortunately, no such exercise is undertaken in Pakistan as planning has been forsaken for ad hoc decision-making, based on political, rather than economic considerations. Even if this “general equilibrium” framework that recognizes the interdependence of everything on everything else is not adopted, it is obvious that there are many more things than the KBD that the nation needs more urgently. As is by now well-established, the most basic developmental need in Pakistan is education for which the government is doing precious little. If there ever were a need for having a holy cow in Pakistan (a position that defence has pre-emptively occupied for long), the choice would indisputably be for education. As it has turned out, it is the most neglected and abused sector today. Indeed, it has now metamorphosed into a lucrative and thriving business in which many respectable businessmen and families of repute indulge and are eulogised for it by the state. The abdication of the role of the state in the social sector in general, and of education, in particular has hurt both growth and social equity.

If some of the money being — or contemplated to be — used on expensive mega projects and unnecessary defence purchases could be deferred and diverted, the public expenditure on education could be raised manifold its present level and the nation’s unenviable human development record could vastly improve and its Millennium Development Goals could be within reach by 2015.

Pakistan seems to be regressing or making slow progress in meeting about half the MDG indicators. It can, therefore, be reasonably argued that the $15 billion or so being contemplated for expenditure on the KBD would be much more usefully spent on education and other social sectors. It is quite possible that with a more educated population it would be possible to have greater efficiency in water use in both production and consumption, thus obviating the need for large dams.

The third and the most pertinent argument against the economic (rather than technical) feasibility of the KBD in the current context is the availability of financial resources. In a perceptive article in this paper, Dr Pervez Hasan, the architect of the government’s debt restructuring strategy, has warned against the deteriorating external balance situation and the IMF has expressed concern over the inflation level.

The launching of the KBD can only increase such concerns and raise the risk premium on any external borrowing the government may try to secure for the project. It will also adversely affect the inflow of foreign aid pledged at the November 19 conference for earthquake reconstruction. These commitments could start flagging if the donors find that the country is using its scarce resources on wasteful projects.

Fourthly, and most relevant to the current upsurge of discontent in smaller provinces, is the feeling of increasing economic disparity that will be experienced by them vis-a-vis Punjab. It has been convincingly argued that the KBD would primarily benefit the richest farmers of the richest province. Given the disparities in land area, population and per capita incomes, it is inevitable that the lion’s share of the benefits will go to Punjab, further increasing inter-provincial disparities and Punjab’s dominance in political and economic power.

It is disingenuous to claim, as the protagonists of the doctrine of indispensability seem to imply, that the KBD belongs to the category of problems which can only be solved during the tenure of a military-led regime. There is a scenario in which the present government could have played this role, albeit for a limited period of time. That scenario would have prevailed if it had agreed to work with the “enlightened” forces in the country to give it a basis for the functioning of a democratic polity and equitable economic growth. The essentials of such a programme would have been the appointment of an independent election commission, the carrying out of land reforms primarily with a view to reducing feudal electoral hold and to minimize the degree of landlessness in the countryside and a massive increase in public expenditures on health and education through substantial mobilization of resources through fiscal means.

In the first two years, the regime, devoid of even a fig-leaf of political legitimacy, did seem inclined to bite the bullet and toyed with populist, progressive and somewhat secular ideas and managed to woo some grass-roots support for itself, without quite abandoning the mullah brigades. Among its achievements in those days was the laudable decision to reserve 30 per cent of seats in legislatures for women, even though it smacked of tokenism. It even made friendly noises against mega dams and in favour of smaller dams. However, 9/11 gave it a heaven-sent opportunity to consolidate its power and to extend its life to, at least, the average life span of military regimes in Pakistan of 11 years. The camel decided to stay in the tent, giving the military an unprecedented role in the control and ownership of economic resources. The revival of the KBD project is nothing but a part of the regime’s strategy to stay in power.

It is not that there are no alternatives to the Kalabagh dam but that this choice has never been given by the rulers in any meaningful way. As indicated above, my own preferred alternative for the former would be a massive increase in investment in education; for the latter, people like Asma Jahangir and Abdul Sattar Edhi could be the alternative to rally the people for building a just, equitable and prosperous Pakistan, which neither the present regime nor the discredited politicians can deliver. Of course, this is just one of the many alternatives. The important thing is that we should have the freedom to choose and the space to debate, alternatives, as well as the means to implement them.

Pakistan is living in a state of deceptively stable political and economic disequilibrium, like a lull before the storm, reminiscent of the tragedy that struck us 35 years ago, which still hurts. But this situation cannot last long and the basic contradictions need to be resolved, hopefully not through a similar cataclysmic change.