A mixed profile

WHILE acknowledging the challenges the country’s economy faces, a report on ‘Economic Outlook 2006’ issued by the ministry of finance claims “extraordinary successes”, drawing upon observations made by multilateral donors (IFIs). The achievements revolve round an average seven per cent GDP growth per annum over the past four years, particularly 6.6 per cent recorded in 2005-2006 with the simultaneous lowering of the inflation rate to 7.6 per cent. The ministry also lists the challenges to the economy. These include job creation, poverty reduction, upgrading of social and physical infrastructure and improving the environment for macro-economic stability. After the annual Article Four consultations, the IMF has lauded last year’s economic growth as impressive in spite of exogenous shocks like the earthquake, soaring oil prices and bad weather affecting agricultural production. In the IMF’s view, the prospects of sustained economic growth in the medium term remains good, driven by strong pick-up in domestic and foreign investment. In its ‘Asian Development Outlook 2006 Update’, the ADB has endorsed the official estimate of economic growth of seven per cent for 2006-2007. And in a joint report ‘On Doing Business 2007’ by the World Bank and the IFC, Pakistan ranks 74 while India stands at 134th position among the 175 economies. The time and cost to meet official requirements in business start-up operations and trade and taxation have been reduced but the existing physical and social infrastructure is a major bottleneck in investment as indicated by the preference of many foreign investors in buying running state enterprises, acquisitions and mergers.

When it comes to the human poverty index, Pakistan is at 68, a position lower than 58 for India among 103 developing countries. Imbalances in the economy are growing. Both the ADB and IMF have noted the imbalance being created by faster growth in domestic demand outpacing the growth in supply, resulting in the widening of the trade and current account deficits mainly on account of rising import-driven investment and the energy bill. They see a similar situation persisting in the external sector as witnessed last year. Going by current trends, the trade current account and fiscal deficits would widen during the current year. The trade deficit of $1.24 billion for July is larger compared to the same month last year. An estimated four per cent fiscal deficit may be exceeded because of record development and defence spending.

The policymakers have reasons to be satisfied with reports of the World Bank, ADB and the IMF. The IFIs work in close coordination with each other and are influenced largely by the position taken by their major shareholders towards a particular country. Their reports are based on the official data that would lead them to the same conclusions as those of the government. But they do serve as an early warning system on the emerging risks to the economy which must be heeded by the government. Often such reports fail to convince many domestic observers about positive economic trends. The official figures remain suspect in the eyes of many as the government has failed to appoint the director-general of the Central Bureau of Statistics (CBS), a post lying vacant for the past few years. The interpretation of the official data is left to the ministry of finance headed by the prime minister. The government needs to take steps to convince the people about the authenticity of official claims. Also a paradigm shift in economic policies is required to remove growing imbalances that threaten long-term economic growth.

Nuclear dichotomies

THE simmering crisis surrounding Iran’s nuclear programme has exposed the dichotomies in the Nuclear Non-Proliferation Treaty. It is now inarguable that the NPT, which was ostensibly drawn up to protect the world against the hazards of nuclear proliferation, was actually created as a tool for the big powers to manipulate to safeguard their supremacy in international politics. Iran is correct when it points out that the US should first seek to eliminate the nuclear arsenals of Israel, India and Pakistan before demanding that Iran give up its nuclear programme. In fact, one may also add that the five big nuclear powers should also begin the process of dismantling their own nuclear weapons as stipulated in the NPT.

The fact of the matter is that the stance of the Big Nuclear Five, especially the United States, smacks of political sophistry rather than a genuine concern for preventing the spread of nuclear weapons to make the world a safer place. Had it not been so, they would not have adopted a blatantly discriminatory position vis-à-vis different countries that have entered the nuclear race. Since Israel is America’s protégé in the Middle East and promotes Washington’s strategic interests in the region, never has a finger been lifted against its nuclear ambitions. For all one knows, the US has extended a helping hand to Israeli scientists in their quest for a nuclear bomb. Simply explaining it away by saying that Israel did not sign the NPT is brazen and amounts to encouraging the states which signed the NPT to walk out of it. Even in South Asia, it is Pakistan and not India that has received the brunt of American anger at the nuclear proliferation that has taken place. All this makes a farce of the NPT. One would not question the goals of the treaty which seeks to make the world nuclear weapons-free. But its underlying principles can certainly be questioned as they have been since the start. It divides the world into the nuclear haves and the have-nots and gives special privileges to the former. The nuclear powers are also expected to dismantle their nuclear weapons. But in the absence of a specified deadline, they will never take the road to disarmament. Now is the time for a consistent approach to nuclear disarmament.

Troops for Lebanon

THE government’s decision to send a contingent of troops to Lebanon for demining operations deserves to be welcomed. The contingent, likely to consist of 200 troops, will be independent of the United Nations Interim Force in Lebanon, and is a purely bilateral arrangement between Pakistan and Lebanon worked out during Prime Minister Shaukat Aziz’s recent visit to that country. Pakistan has in the past taken part in post-war demining operations in several countries, including Kuwait after the Gulf war. It is a hazardous job, especially because Israel has not yet handed over minefield maps to the UN. Even though peace prevails along the Lebanese-Israeli border, the area is littered with anti-tank and anti-personnel mines, cluster bombs, booby traps and unexploded material. These need to be extracted or blown up to make the area safe for people who were made to flee their homes after the Israeli forces bombed apartment buildings and civilian targets during the 34-day war.

As the prime minister told the press conference in Islamabad on Saturday, the decision to undertake the demining operations was an expression of solidarity with the government and people of Lebanon. During his visit, the Lebanese president, prime minister and parliament speaker had requested Pakistan for assistance in demining operations. In addition, Pakistan has also sent relief goods to south Lebanon where, according to the prime minister, 70 per cent of the buildings and infrastructure have been destroyed by Israel. Working independently of Unifil has certain advantages. Pakistani sappers will not be called upon to take orders from Unifil some of whose officers may fall short of the standard of neutrality demanded by the situation. Being there for a specific task will also mean a shorter duration, unlike Unifil that is likely to remain there for the foreseeable future with all the attendant risks.

How Americans see the war on terror

THE fifth anniversary of the 9/11 terrorist attack comes at a time when the approach of mid-term elections in the US has focused attention on a number of major issues. Is the US safer? How has the war on terror progressed? Are the real causes of terrorism being addressed? Are the Bush policies succeeding, and what has been their impact on the US itself and on the world at large?

The war on Iraq, where the US and Iraqi casualty toll has been rising, has progressively lost support, with many analysts saying that it has strengthened the forces of terror. A sentiment is growing that the US must set a timetable for withdrawal from Iraq. The major thrust of the campaign by George W. Bush is that Islamic extremism represents the same type of threat as fascism did during the Second World War, and communism during the Cold War.

In a number of impassioned speeches, President Bush has called Iraq the “central front” in the first major conflict of the 21st century, with extremist Sunnis and Shias committed to establishing a tyrannical dictatorship, first in the Middle East, and then all over the world. However, the polls show that he is not having much success in denting opposition to the Iraq war.

To the question ‘is America safer?’, the ruling party draws attention to the fact that no major terrorist attack has taken place there since 9/11.

However, critics point out that by attacking Iraq, the Bush regime opened that country to terrorists who had not existed there prior to the US invasion. Indeed, they attribute the resurgence of the insurgency in Afghanistan to the setbacks that the US suffered in Iraq.

There is also criticism of the simplistic claim by Bush that the US is providing leadership in the war on terror.

In fact, reliance on force and the low priority given to reconstruction have added economic distress to the causes of the insurgency. Three and a half years after the invasion, the conditions of daily existence and opportunities for employment have deteriorated.

The US focus on Islamic extremism, and on treating it as the enemy, ignores genuine movements for Islamic renaissance, and even for democratic reforms, as most Islamic countries are ruled by dictatorships allied to the West.

In his pre-election speeches, President Bush has been stressing the essential elements of US strategy in conducting the war against terrorism. The first element is that of pre-emption, i.e. reaching the terrorists first, through surveillance and neutralising them before they can act.

The second element of the strategy is to deny them access to weapons of mass destruction. These points have relevance to the justification invoked for attacking Iraq; though it has been proved that intelligence on the possession of weapons of mass destruction by Iraq had been fake.

He also claimed success in denying nuclear technology to rogue regimes, making a specific reference to the elimination of the A.Q.Khan cartel for nuclear proliferation.

The doctrine of regime change where existing regimes posed a threat to “democracy” and the denial of opportunity to extremists to take over Islamic countries were other parts of the US strategy.

In his fourth pre-election speech, on September 6, Bush made the dramatic announcement that 14 top Al Qaeda terrorists, who had been under rigorous questioning at CIA-run prisons in different countries, had been brought to Guantanamo where they would be brought to justice under terms laid down by the supreme court.

He claimed that their detention had prevented another terrorist attack of 9/11 dimensions.

As the Republicans and the powerful Jewish lobby which controls the media have a stake in a Republican victory, the memories of the 9/11 attack are being extensively coloured. The recollections of those who suffered personally, or who carry its physical or psychological effects, are being played up. While claiming success in making life in the US safer, the president and most Republicans continue to play on the fears of Americans with regard to their safety. This strategy helped them to win the previous elections.

But now, the reverse seems to be true, despite the best efforts of the Bush regime to link the war in Iraq with that against terrorism. With growing setbacks in Iraq, opinion polls show that the US electorate wants their government to extricate itself from the war in Iraq, while continuing its war against terror.

How has the quality of life in the US been affected by 9/11? Televised interviews with members of the large Muslim community in the US reveal that the fears aroused — and which have been magnified by the London bomb blasts of July 2005 — make them feel they have become second-class citizens who have to constantly prove their innocence. Instances are becoming frequent when US flight passengers object to the presence of Muslim passengers, notably of Middle East and Asian origin.

A Muslim scholar who was travelling from Arizona to Chicago and started offering his prayers at the airport was arrested and held for questioning for 24 hours. Another Muslim passenger was offloaded as he was wearing a T-shirt with an Arabic greeting.

Apart from the effect on US Muslims, Bush’s economic policies have widened the gap between the rich and the poor. The incomes of the middle and lower class have not kept pace with inflation, and American labour is worse off.

On the other hand, the incomes of the upper five per cent has risen so fast that according to figures worked out early this month, the ratio between the median income of CEOs and of those working at the minimum wage was 833 to one. Millions of poorly paid Americans and illegal immigrants are without medical insurance and face difficulties in meeting the high cost of medical care.

The recommendations of the 9/11 commission have not been met, while the cost of the war in Iraq is averaging eight billion dollars a week.

The anniversary of Hurricane Katrina was marked recently, and though Bush visited the affected areas, it was found that thousands of local residents in New Orleans were still living in temporary accommodations.

In 2005, when the most destructive hurricane in US history struck, Bush was preoccupied with defending the war in Iraq. His relative indifference to the tragedy at home was traced to the fact that the affected population was largely black.

Indeed, with discrimination re-emerging, instances of the recurrence of segregation of blacks are beginning to appear. Many thinking Americans are worried that American ideals of liberty and equality before the law may be eroded.

A more serious worry for the whole world is the reiteration by President Bush that the US is heading a global war against Islamic extremism. The real challenge world leaders see after 9/11 is to address the causes of terrorism which is also present in non-Muslim countries such as Sri Lanka.

The US electorate is no longer swayed by the narrow Bush vision, and this is likely to be reflected in the results of the 2006 elections.

After a series of pre-election speeches concluded on September 7, the US media played the video released by Al Jazeera showing Osama bin Laden and some of the 9/11 hijackers making preparations for the attack.

The overall effect of this campaign has been that most of the US electorate is convinced that the country, and indeed the world, has to wage a long war against terror.

However, only a minority supports the war in Iraq, and many opinion-makers feel that the long-term emphasis should not be on the use of pre-emptive force, but on a strategy that does not involve the sacrifice of the values the US stands for, and that alienates the Islamic world.

The writer is a former ambassador.

Five years later

9/11 changed everything, Americans earnestly told themselves in the ensuing days, weeks and months. How could it not? A clash of civilizations had brought the apocalypse to ground zero of American capitalism, and the resulting hole in Lower Manhattan and in the nation’s heart became Ground Zero of something more.

The attack on the Pentagon only reinforced Americans’ sense of vulnerability, and that horrible day could have been even more horrible if not for the valour of passengers on United Flight 93.

Five years later, the rawness of that day has dissipated, and Washington’s trivialising war-on-terror rhetoric has become tedious background chatter, not unlike the stream of terrorist chatter officials shrugged off before 9/11. Too much chatter elicits shrugs; it’s human nature.

We know now that 9/11 did not change everything, at least not permanently. In some ways, that is unfortunate.

New York City subway riders can once again be inconsiderate; cable news networks can again feast on such melodramas as the JonBenet Ramsey case; politicians can again question each other’s patriotism; Homeland Security funds can be mischievously diverted to Kansas, just another form of pork.

On the whole, the return of petty politics, crass entertainment, satire and celebrity news is all reassuring, almost a tribute to U.S. resilience. We still fly, even if we have to take off our shoes in the process. The Dow Jones industrial average is 1,787 points higher today than it was on that 9/11. Your home has appreciated considerably in value, as one exuberant bubble succeeded another. The Supreme Court still reins in presidents who overreach. America lives on.

What died on 9/11 was the illusion that history had ended. The halcyon Clinton years were a deceptive interlude between the fall of communism and the collapse of the twin towers. Capitalism had triumphed; investors could disregard such details as price-to-earnings ratios, while Republicans could divert their attention from tax cuts to focus on a president’s sex life. It was a time of complacency without guilt.

Now we are back to complacency tinged with guilt. In Washington, the war on terror has been institutionalised, like the war on poverty, or cancer: something for politicians to talk about while the rest of us go about our business. The very abstraction of the term — why not call it a “war on violence” or a “war on hatred”? — invites people to tune it out.

President Bush can be blamed for much oversimplification and for stretching his “fascism” analogies in recent days. But it has at least been refreshing to hear him refer to Osama bin Laden again, and to remind audiences that it is an ideology (as opposed to a method) that threatens Western values.

What distinguishes the United States from its enemies in this battle, after all, isn’t mainly the prowess of our military or the resilience of our shoppers. It’s the vitality of our society and the openness of our culture. That’s a message that needs reinforcing in the years ahead.

—Los Angeles Times