Optimism about Kashmir
AS on many occasions in the past, President Pervez Musharraf seemed optimistic about a solution of the Kashmir issue when he said, during the UN General Assembly on Tuesday, that it was “within reach”. The basis for his optimism was the meeting with Indian Prime Minister Dr Manmohan Singh which, he said, was “positive” and should help “carry the peace process forward”. No doubt, the meeting between the two leaders on the sidelines of the Havana NAM summit should help revive the peace process that has been on hold since the July 11 Mumbai train blasts. However, it is too early to say how the process will fare — whether the momentum witnessed in 2004-5 will be maintained or whether there will be one of those accidents - some act of terrorism or a diplomatic episode — which will jeopardise the detente once again, given the historically accident-prone nature of India-Pakistan relations. That was partly apparent from the Indian prime minister’s views expressed during his talk with the media on the way back home.
Unlike the president’s optimism on Kashmir, Dr Singh focussed exclusively on the terrorism issue, and when he spoke of the accord being given a chance, he referred only to the mechanism set up by the two sides to fight terrorism. Moreover, all along the talk he seemed to doubt Islamabad’s intentions and made it clear that things would not be “business as usual if terrorism is not under control”. In fact, he spoke of “consequences” if Pakistan was “seen not to be willing to work with us to control terrorism”. The basic difference between what President Musharraf said and the views expressed by Dr Singh shows a big gap between their basic attitudes to the Indo-Pakistan relations. To Islamabad, the normalisation process is not an end in itself; it is a means to an end, the end being a fair solution of the Kashmir dispute acceptable to all sides - Pakistan, India and the people of Kashmir. For New Delhi, the normalisation process is an end itself, not necessarily linked to a Kashmir settlement. It is this chasm in attitudes that needs more than optimism to be bridged.
Pakistan has shown remarkable flexibility on the issue. The proposed solutions it has come forwarded with are many: they range from a bilateral demilitarisation to a “zones-wise” approach. India, however, has yet to prove that it has moved away from its basic doctrine on Kashmir - that the disputed territory is its “integral” part, with references to its constitution that are irrelevant to the issue at hand — the right of the people of Kashmir to live in freedom and dignity in their own territory. At any rate, the normalisation process must be continued, but the long-term peace that the people of South Asia long for will come without a solution of the Kashmir problem. In the meantime, the least New Delhi can do is to address the international human rights bodies’ concerns about the rights’ abuses in Kashmir. The carte blanche given to its security agencies has earned censures not only from Amnesty International and the State Department but also from India’s own rights groups. An improvement in the human rights situation in the valley should enable the people of the territory to feel the wind of change that is now blowing across the subcontinent.
Coup in Thailand
GIVEN Thailand’s turbulent political history, Tuesday’s military intervention should come as no surprise. The coup is the 18th of its kind in a series of abortive and successful army takeovers since constitutional monarchy was introduced in the country in 1932. Although the last coup took place in 1992, it was evident that the military had growing differences with the government, especially over the handling of the Islamic insurgency in the south. In the months preceding Tuesday’s intervention, coup leader General Sonthi Boonyaratglin had voiced criticism of deposed Prime Minister Thaksin Shinawatri, who had been under pressure to resign since the beginning of the year over alleged financial irregularities — despite the fact that he had won two landslides victories in the elections in 2001 and 2005. The military now says that a new prime minister will be appointed in the next two weeks and that fresh elections will follow the drafting of a new constitution. While the military’s action has been described as a “pre-emptive” step by some, it is clear that Thailand’s nascent democracy has suffered a severe blow. There is no doubt that recent street protests against Mr Thaksin were a measure of his growing unpopularity. But the now ousted prime minister had said that he would step down following political instability in the wake of last April’s polls which were held after he dissolved parliament.
The army has acted hastily in taking a step which may well backfire considering that there have been, as in 1973 and 1992, angry protests against military rulers. The military would be well-advised to return to the barracks following the appointment of a prime minister and let the political process run its due course. There are many examples of countries — Pakistan being one — where the curtailment of civil liberties and the imposition of martial law have caused enormous damage to a country’s political and democratic system and institutions. By not allowing democracy to function, a country’s basic interests are fatally harmed. Even where a government is incompetent or corrupt, the solution lies in the country’s judiciary or the electorate to hold it answerable and not for the military to step in and overthrow it.
Attack on media freedom
ISLAMABAD must move quickly to undo what the Punjab government has done by arbitrarily shutting down an independent TV network across the province. As if the beating of TV journalists by the police were not bad enough, the provincial government made matters worse on Sunday night by ordering the district police officers in the province to force cable operators to suspend the transmission of the ARY channels. The network’s news channel’s “offence” was to broadcast the video of the beating of TV journalists working for another private channel — a ‘crime’ that the Punjab government deemed too serious to let go unpunished. The highhanded action defies state policy on media and all rules and regulations of the Pakistan Electronic Media Regulatory Authority, which alone can proceed against a TV network for justifiable reasons only.
As the forced suspension of the network in question continued across Punjab for a third day on Wednesday, pressure was brought to bear on the network’s management to ‘request’ the Punjab government to put the suspended channels back on air. Such arm-twisting shows the real credentials of a government concerned more with keeping a false image of itself rather than doing something about correcting it. The extreme action goes to show as if Punjab is being run by an administration that has no regard for the rule of law; that it imagines the province to be its fiefdom, to be run according to the whims of the rulers who are accountable to no one. This is as blase and crass a manifestation of the working of a provincial administration as it gets. If allowed to go unnoticed by the federal government, it would embolden the Punjab rulers to infringe further on the public’s right to know the truth, for which media are a principal means.
World Bank’s focus on youth
GERMANY led by Chancellor Angela Merkel is initiating a move to promote a free trade area between Europe and the US — the world’s largest if it materialises. Called the Trans-Atlantic Free Trade Area (Tafta) it will be the economic equivalent of Nato in the military sphere.
If Nato was created against the Soviet Union in the post-World War II era, the Tafta is aimed at seeking protection from the expansionist economic policies of China with its undervalued Yuan that promotes large exports.
The western countries, particularly the US are interested in revaluation of the Yuan which can reduce its exports by making them more costly, but the Chinese are not willing to do so despite persistent pressure of the West on Beijing to help it out of its commercial stress.
China, which has foreign exchange reserves of $941 billion apart from Hong Kong’s $128.9 billion, recorded a trade surplus of $18.8 billion in August. And its industrial production increased by 15.7 per cent than in the same month last year — the highest rate of increase among the world’s major industrial powers.
At the same time, Euro zone’s industrial output increased by 4.3 per cent and that of the US by 4.9 per cent. And yet a foreign investment of $86.5 billion is expected this year in China. In addition, Hong Kong will receive $37 billion foreign investment. It is interesting to note that foreign investment is flooding into China at a time when it is cutting down its own investment to prevent overheating of the economy as such large inflows along with domestic investment are bound to increase industrial production and exports.
In fact most of the foreign investment in China is meant for production and then for exports. Hence, the western world as well as major developing countries are feeling the impact of the inflow of Chinese goods at low prices.
If a country like Germany with one of the highest rates of unemployment in Europe — 10.6 per cent — is resenting such imports that hurt its industry, that is understandable. The western countries led by the US want China to increase the exchange rate of the Yuan so that Chinese imports into their markets become costly. But China is in no mood to revise the Yuan’s value or even mention a date for doing so. The G7 finance ministers meeting in Singapore called for the readjustment of the Yuan. But China prefers to increase its bank lending rate and make investment capital more costly. But that is not aimed at reducing Chinese investment significantly, while foreign investment remains very high. In the last quarter of the current financial year China produced a GNP growth of 11 per cent to the embarrassment of the Beijing’s policy-making elite which wanted a lower rate.
But unlike many other countries, Pakistan’s exports to China went up last year by 38 per cent, says Pakistan’s ambassador Salman Rasheed. That is the outcome of the Early Harvest programme which has preceded the conclusion of a free trade agreement between the two countries, negotiations about which are under way.
Pakistan has great scope for higher exports as in terms of highest production it is the fourth country in the world for cotton and fifth country for silk and has the largest coal mine at Thar, says the ambassador. To add to that President Musharraf says Pakistan is the sixth country in the world for milk. People who have to pay very dearly for milk find it hard to believe that.
Prime Minister Shaukat Aziz says Pakistan’s negotiations with China for the use of Thar coal for power production has been slow. And they will now be speeded up. Pakistan needs a great deal of power from a cheap source and coal is one of the cheapest sources of power. China has also agreed to invest a total of $50 billion in and around Gwadar port and for the setting up of a petro chemical complex and for the creation of energy corridor to carry gulf oil to China.
Meanwhile, the World Bank has reversed its decision in respect of not providing aid for major infrastructure projects. The bank president Paul Wolfowitz says the bank has decided not to provide infrastructural loans as they were very costly and that corrupt practices in the recipient countries vitiated the use of the aid. But now in view of the urgent need for water and power projects in many developing countries the bank has reversed that decision. But the bank will not provide aid for elections, he says.
The donors approach on the question of large dams has also changed. It was earlier believed that large dams created more problems than they solved, including uprooting of millions from their traditional habitat. But in view of the water and power shortage in many developing countries, the bank has come out in favour of big dams such as the Kalabagh dam which it has been backing for long.
Pakistan has now approved five large dams including the Basha dam to begin with to be followed by Kalabagh. An initial 25 billion dollars are needed for the projects and a great deal of that is expected to come from the World Bank which wants Pakistan to finalise the details of the project fast. But Pakistan has to make sure that no element of corruption was practised at any stage of the building of the dams and that the cost is not inflated later much in excess of the original estimate.
At the same time the Asian Development Bank has reportedly decided not to provide soft loans for water projects. Pakistan was hoping to get a great deal of assistance from the ADB and would like this decision to be revised in view of the importance of water and power for the Pakistan economy and the fact that the interest rates have been rising around the world.
The World Bank’s latest annual report — the World Development Report — focuses on the 1.3 billion youth of between 12 and 24 years in the developing countries. The bank wants the developing countries to make the best use of their youth and provide them with the requisite education and create opportunities for the development of skills. A significant recommendation is that the youth who missed their first chance in respect of acquiring education and job training be given a second chance. If they could not continue their studies, they must get another chance to resume and complete them. And if they have deviated from the normal course of life by turning to drugs or similar addictions, they should be provided a second chance to return to normal life.
It says, a constructive or rehabilitative approach to life can reduce poverty and crimes in the developing countries as well as warp the main springs of terrorism.
The World Bank now wants not only the rich countries to double their aid to the developing countries and achieve their target of giving 0.7 per cent aid to their GNP but that the middle income countries should also help the developing countries as well as fight poverty around the World.
The middle income countries are too many in number by now and some of them are rich and resourceful and they need to assist the developing countries and they can afford to do that. Let every country do its bit to help the poor of the World and underprivileged, so that the World becomes less iniquitous and not be content with achieving the millennium goal of the UN which seeks to wipe out poverty only by a half by 2015.
Meanwhile some 20 Pakistani companies listed on the Karachi Stock Exchange are said to be floating their shares in the UAE stock market. The ground work for such a flotation has already been done.
With too many companies making up to 100 per cent profit in a year, the Gulf investors will find the shares of Pakistani companies very attractive. Whether the companies will be able to maintain such a high rate of profit for long remains to be seen. Will the government come under pressure from the public to reduce such profiteering and make the rate of profit normal or reasonable?
Meanwhile the government has come to the rescue of the stock exchanges and raised the CFS cap for bank lending to the KSE brokers to Rs55 billion so that more funds could be available for buying shares with interest capped at 18 per cent.
While the Share prices are high reflecting the high profits, inflation has touched a new peak of 11 per cent in August from 7.44 per cent a month earlier. Such a sharp rise before Ramazan raises fear that prices can rise much higher in the holy month despite official assurances and preparations to check such hikes including appointment of a battery of price magistrates.
The Rozgar Pakistan scheme which is to provide Rs100 billion in five years as cheap loans to promote self-employment has produced the usual crop of scandals. Bribes or “speed money” for qualifying for such loans from the National Bank has vitiated the birth of the scheme announced by the president. The local officials are trying to make quick profit from the scheme soon it starts. Although the scheme was launched on September 6, it has yet to become fully operational even after the National Bank has distributed one lakh application forms.
Corruption has become so widespread and deep rooted that even the corrupt traffic police use every opportunity to make money and people have to pay to them because they have no other optional. The evil has to be checked effectively otherwise it will become further widespread and much too vexatious.