A rosy statistical picture

THE National Economic Council (NEC) has projected an ambitious overall development expenditure for the next fiscal year. An appropriate development strategy has also been outlined which, very rightly, proposes to focus on food, energy and water security, investment promotion, human and skill development and on exploiting the advantage of Pakistan’s strategic geo-political situation. The Council has also identified the challenges the government would face in pursuing this strategy. Among these the most serious challenge would be to sustain the development and growth momentum while maintaining price stability. The second biggest challenge would be to generate employment while eliminating the mismatch between skills and the growing needs of a knowledge-based economy. In line with the declared strategy and challenges, the NEC has put the infrastructure sector on top of its priority list, with almost 50 per cent of the total federal PSDP budget going to this sector.

Most of the remaining balance has been allocated to the social sector. All other sectors share a paltry 2.5 per cent of the total allocation. This is as it should be. The allocation for the water sector has been very rightly increased by 32 per cent over what was allocated during the current year. Indeed, the completion of most of the on-going mega water projects needs to be ensured in order to achieve water security without any further loss of time. To a large extent, water security will ensure food security. Also, the completion of the National Trade Corridor project and linking Gwadar by air to other parts of Pakistan and Iran would facilitate trade flows and help reduce the cost of doing business. One hopes that the government can mobilise the required financial and human resources to implement such a huge plan in time and achieve its targets in full.

This massive development effort is expected to yield a growth rate of seven per cent by the end of 2006-07 with the contribution of 4.5 per cent coming from the agricultural sector and 10.9 per cent from the industrial sector. The GNP per capita is expected to go up to $935 next year compared with the current year’s $847. The estimated cost-benefit ratio of the efforts made by the government on the development front over the last three years appears encouraging. During this period the economy is estimated to have grown at an annual average of seven per cent, and poverty, in statistical terms, is said to have come down to slightly over 24 per cent in 2005 from a little over 34 per cent in 2001. So, on the face of it, the plan for 2006-07 and its targets appear achievable. However, one needs to keep in mind the dismal rate of inflation, current account deficit, and the levels of credit-driven consumerism and employment in the outgoing year. But then our governments have never hesitated to obtain political mileage by conjuring up a rosy statistical picture of the economy out of depressing data. So, instead of correcting the inherent and immediate distortions in the economy which is heating up fast, the government seems to have decided to continue with more of the same policies, perhaps in view of the next elections which are still 17-18 months and one more budget away.

Dealing with drug menace

A NUMBER of speakers at a recent seminar in Karachi stressed the role of the media in creating awareness about drug abuse in the country. They had a valid point when they said that by focusing almost exclusively on other social problems, the print and electronic media had virtually sidelined the drug crisis. With five million drug addicts in the country and with inadequate resources available for their treatment and rehabilitation, there is an obvious need to do more to mobilise public opinion against the menace. As the number of addicts continues to grow — at an alarming rate of seven per cent by some estimates — Pakistan’s drug problem will become more acute and eventually unmanageable, despite the country’s success in virtually wiping out poppy cultivation, which is now resurfacing in certain parts, following chaos and political instability in Afghanistan.

However, media campaigns can make only a small impact when not enough is being done to address the root of the problem which lies in neighbouring Afghanistan. So far the Karzai administration has not been able to extend its control to areas outside Kabul and local drug barons have a free hand in the rest of the provinces. The result is that today Afghanistan is the world’s biggest producer of opium with one-third of its economy dependent on the proceeds from the narco-trade. Needless to say, Afghanistan’s neighbours — Iran, Pakistan and some Central Asian states — have not been immune from its effects, and trafficking (with these countries used as a transit route) has assumed horrendous proportions. The presence of drug barons and warlords in the Afghan parliament, coupled with increasing lawlessness in the country, has made it difficult for the Kabul government to crack down on the traffickers or to hold those behind the racket legally answerable. The situation not only demands an internal review of the problem and appropriate action on the part of Afghanistan, but also tighter border controls in the countries adjoining it. Greater cooperation on drug control among Afghanistan’s affected neigbours is also necessary to contain the menace.

Bonded labour’s tragic plight

THE photograph in Friday’s Dawn of brick kiln workers protesting against the brutal treatment being meted out to them by their employers was heart-wrenching. That the group of men, women and children were in a terrible state — in tatters, barefoot, malnourished — was shocking. The government seems to be impervious to their tragic plight. It must wake up to its responsibility and take strict action against the kiln owner in question who, according to the protesters, holds them as bonded labourers. Not only have these workers not been paid for their labour, but they do not even get proper meals. Worse, they were forced to put their thumb impressions on a document which said that they had been paid Rs 500,000. It may well be a case of fraud perpetrated on these poor illiterate workers who are not likely to know what they are putting their thumb impression for. This kind of abuse and exploitation has been going on for years but action against the culprits has been slow, despite laws that disallow bonded labour. A 2003 Punjab High Court ruling against a brick kiln owner in Gujranwala, ordering him to release 63 workers he held in bondage, is just one example of the law coming to the rescue of a group of bonded workers. Friday’s incident is a reminder that the abuse and the exploitation continue virtually unchecked.

A report by the International Labour Organisation last year focused attention on the rampant abuse that labourers were forced to endure in the rural hinterland in Sindh and the brick kiln industry in Punjab. The employers advance loans to their workers at compound interest rates and their wages are then deducted in repayment of those loans. As their wages are meagre, the workers are unable to repay their debts and become trapped in a vicious cycle. Financial schemes need to be made available to labourers whereby they can avail themselves of loans at minimal interest rates. The labour department must be more vigilant in its check of abuses by landlords and brick kiln owners.

Europe’s constitutional dilemma

GET ready for another long, painful bout of European Union soul-searching. After a year spent wringing their hands over whether to bury or revive the EU constitution following its rejection by French and Dutch voters last year, the bloc’s key policymakers appear to have made up their minds — to do nothing.

The confusing deal thrashed out by EU foreign ministers, who met for a much-publicised “brainstorming” session over the ill-fated treaty at a 12th century abbey near Vienna last weekend, effectively puts plans to resurrect the constitution on ice until at least 2009. Over the next year, EU leaders, ministers and their aides will continue to “reflect” on what to do next.

Significantly, they will also ponder over suggestions that the entire discredited constitutional project should be rebranded to give it more pizzazz in the jaded eyes of an increasingly eurosceptic public. But while EU policymakers like nothing better than worrying over solemn issues like the “future of Europe,” it is unlikely that another 12 months of fretting over the EU’s destiny will provide any extraordinary insights. The truth is that reasons for Europe’s current malaise are not difficult to find.

First, reinvigorating the EU and rebuilding public trust in Europe is not a prime priority for a number of the bloc’s leaders. Many like British Prime Minister Tony Blair and French President Jacques Chirac, are embroiled in tough domestic problems.

German Chancellor Angela Merkel is braced for trouble over plans to implement an ambitious economic reform agenda. Italy, under new premier Romano Prodi, may be back in the European mainstream but the new coalition in Rome is a fragile one. Small wonder then that most EU leaders have little time or appetite for EU affairs and prefer to leave the project to bureaucrats in Brussels.

But that is hardly a recipe for success since most ordinary Europeans are suspicious of the antics of well-paid EU officials and — despite efforts by European Commission President Jose Manuel Barroso to woo them with new people-friendly initiatives — remain chronically uninterested in what they view as a boring Brussels-led enterprise.

Certainly, the morose state of Europe’s economy, mired in slow growth and high unemployment, is a key reason for lack of support for Brussels, which is perceived more as creating red tape than unleashing potential.

Other critics cite the EU’s ambitious expansion plans as a reason for falling public support for the bloc. Following its “big bang” enlargement from 15 to 25 countries in May 2004, several more newcomers are waiting in line, including Bulgaria and Romania, which are hoping to become EU members, possibly next year.

But while EU policymakers keep telling more and more countries, especially in the western Balkans, that Europe’s door remains open, they have failed to convince European citizens that bringing peace and prosperity to their poorer neighbours will, in the long-term, mean peace and stability in western Europe.

For many ordinary Europeans, therefore, enlargement remains a risky enterprise leading to the influx of low-cost eastern workers into western Europe and the relocation of companies — and the loss of jobs — from the old EU states to the newcomers.

Governments also remain confused over the future of the EU constitution. Broadly speaking there are three schools of thought: that the treaty should be adopted in its current form; that it be ditched; or that it be tinkered with and renamed to make it more attractive to voters. But most analysts believe there is no hope of unblocking the broader constitutional dilemma until after elections in France and the Netherlands next year.

German Foreign Minister Frank Walter Steinmeier has promised that Berlin — which will assume the rotating EU presidency early next year — will produce concrete proposals in June 2007 on what to do next.

“There is absolutely no reason to give up on the constitution,” said Steinmeier in Vienna. But the German foreign minister also suggested that a change of name could help, given that the use of the word “constitution,” with its connotations of feared EU superstate was widely seen as fuelling opposition to the pact.

“In Germany, we live with a fundamental law which is not called a constitution but which has the same judicial value. I think it’s one of the points to develop,” he said, adding that the content of the treaty was more important than what the final text is called. “Substance is the key and form is less significant,” he underlined.

Luxembourg Foreign Minister Jean Asselborn proposed renaming the constitution an “EU Basic Treaty”. “What is important...is the project of living together,” said EU Commission President Jose Manuel Barroso. “If someone finds a better name, great. But what is important is to recommit ourselves to this vision of Europe.”

Steinmeier spotlighted 2009 as a deadline for getting the EU constitution into place, a pledge that many others appeared to back but which does mean that the current EU crisis of identity is likely to last for at least another three long years.

While repackaging and renaming the discredited treaty appears to be Berlin’s strategy to help sell the package of measures aimed at streamlining EU decision-making machinery, others are not sure the ploy will work. Even with a rechristened treaty, it remains unclear how France and the Netherlands will find a way to win public approval for a text which was stunningly rejected in the 2005 referendums.

The saga looks set to continue for several months, with EU leaders set to revisit the tangled issue when they meet in Brussels for their summer summit on June 15-16 and the European Commission coming up with an array of ideas to keep Europe ticking while decisions on key issues are put off until better times.

A key problem is that wrangles over the constitution are impacting on future EU expansion. Under current EU treaties, voting rules are only in place for a union of up to 27 member states. But any enlargement slowdown would hit Croatia which has said it wants EU entry in 2009 as well as other western Balkans states lined up to join the bloc. Negotiations for possible Turkish membership, which opened last October, are expected to last up to 15 years, making the issue less urgent for Ankara.

Many EU ministers said in Vienna that after the planned admission of Bulgaria and Romania in 2007 or 2008, further enlargement would have to wait until a new treaty was in force.

France, the Netherlands and Denmark are spearheading demands that the bloc’s “absorption capacity” be taken into account before admitting any new members to the elite club.

Despite French assurances that the criteria is “not an excuse to delay the process,” some EU states see it as a way of putting a brake on EU enlargement amid growing public disquiet over the grand EU expansion plans. Whatever their various positions, most EU capitals now agree on the need to define the concept more concretely: the European Commission is expected to produce a report on the issue at the end of the year.

“Absorption capacity is determined by two major factors: the transformation of the applicants into worthy member states, and the development of the Union’s policies and institutions,” said EU enlargement chief Olli Rehn recently.

There will be “no new enlargement” so long as the institutional limbo is not resolved, said Luxembourg Foreign Minister Asselborn. “The message for citizens is that we keep our promises, but that we are also strict on the criteria,” said Dutch Foreign Minister Ben Bot, lamenting that such rigour had “not always” been applied in the past.

Such demands raise a big question mark over whether the EU will ever expand beyond 27 members — with or without a new constitution.

sCold War mindset

BEIJING strongly resents, and firmly disagrees with, the latest Pentagon report that claims China is rapidly extending its military reach and potentially poses a threat to other countries in the region.

The report, which exaggerates China’s military strength and expenditure out of ulterior motives, is based on “Cold-War mentality,” Foreign Ministry spokesman Liu Jianchao said last week. By spreading the “China threat” theory, the report has seriously violated principles governing international relations and intervened in China’s internal affairs, he said.

He noted that China is a peace-loving country and adopts a national defence policy of a defensive nature. “It is universally recognized that China is an important force in promoting peace in the Asia Pacific and the world at large,” Liu said.

He said Taiwan is an inalienable part of China and urged the US side to stop selling weapons to the island or sending wrong signals to Taiwan secessionist forces. The pace and scope of China’s progress in modernising its military suggests it is looking beyond Taiwan, the report claimed. But it also says the pressing focus of the People’s Liberation Army is still Taiwan.

According to the Pentagon, the Chinese mainland has increased by about 25,000 the number of ground forces deployed to the regions opposite Taiwan.

—People’s Daily Online