This wave of terror
EVERY terror attack and the death and destruction it causes provoke a comment, mostly unfavourable, on the performance of our security agencies. This is becoming a ritual. But a greater, often neglected task is to analyse the minds that plan such attacks and those who carry them out. Pakistan has been a victim of terrorism for long, and those who have practised this lethal craft belong to various political groups with diverse, and in some cases “nationalist” or parochial aims. However, suicide bombings of the kind that have killed fellow citizens or Pakistan’s foreign guests have been the work of those who claim to fight for their religion. On a deeper analysis, it would appear that it is not the activist or the “agent” — the suicide bomber — but the brains and the “ideologues” behind the fiendish deeds that must be ferreted out, exposed and punished. Fanaticism has a place in this world, so long as both the means and the ends are acceptable.
We have the example of Nelson Mandela, a truly great man, who directed his unbounded devotion and efforts to the cause of liberation in a manner that was both noble and worth emulating. On the whole, Mandela spent 27 years in prison, run by men believing and practising in that despicable concept called apartheid. But when his and his people’s tormentors finally freed him, there was no trace of bitterness in him. In fact, but for Mandela, the end of the apartheid regime in South Africa would have been followed by terrible bloodbath and vandalism. This was because the means Mandela followed both during his struggle and in power were noble and inspired humanity’s admiration. In the subcontinent, the ulema had a tradition of resisting the sultans. The names that come easily to mind are Nizamuddin Aulia and Mujaddid Alf Saani. They never preached mutiny or recourse to violence. Examples in the same tradition can be found in the Middle East where a man of Imam Abu Hanifa’s stature never preached violence or rebellion against the caliphs who had jailed and tortured him, because violence once unleashed goes out of hand.
Today, the Muslim world is faced with very many challenges in the form of bondage and humiliation for Muslims struggling against oppression and tyranny in Palestine and Kashmir. But it is not clear in what way the attacks on the World Trade Centre or the crimes in Madrid, London, Istanbul and Islamabad have in any way advanced the cause of the Muslims. In fact, looking at all that has happened since 9/11, one can clearly see that it is the Muslims who are the losers worldwide. In Pakistan, the recent series of suicide attacks, including the one at Islamabad airport on Tuesday, have killed and hurt only Pakistanis. If those behind these foul acts are against the government’s “pro-American” policy, then these murders are not going to change Islamabad’s policy. The opposition to the government’s skewed war on terror comes from several quarters, including some secular political parties, but the best way to effect change in state policies is through the mobilisation of public opinion and the democratic process. The government’s fault lies in putting too much emphasis on force in dealing with terror and doing little to have a heart to heart talks with those who think killing innocent people is the only option they have.
Regulation or control?
SEEN against the backdrop of the periodically strained relations between the government and the NGOs, the code of conduct for the regulation and operation of NGOs that is being developed will be viewed with some reservation. No doubt, it is a sensible approach on the part of the ministry of social welfare to put the code on its website and invite a public debate on it. One can understand the predicament of both sides. With nearly 100,000 voluntary organisations operating in Pakistan and barely 44,000 actually registered with the regulators (five departments/ministries in this case), there is plenty of scope for abuse in this area, given the funds available. But, at the same time, there are many NGOs that are doing good work and have made an impact on society. They have often come under attack from conservative elements on account of their liberal approach and their role in creating public awareness and initiating a dialogue on issues like women’s rights, education and healthcare. The NGOs naturally are sceptical of such moves that are seen as being designed to control their working.
The positive aspect of the code is that it lays down a set of guidelines for the regulators. For instance, the regulating authorities are asked to create an enabling environment to allow NGOs to operate confidently, show respect for them, be fair and transparent in their dealings, be responsive to their needs and so on. But what would certainly cause alarm is the section on enforcement that allows regulators to freeze assets of NGOs and seize their documents. The NGOs are expected to operate in a transparent manner and their administration is asked to act within its mandate. The responsibility of not abusing their funds for criminal financing — a factor that has emerged after 9/11 — has also been emphasised. Much would depend on how the code is implemented, for the process of regulation should not lead to controls that inhibit the NGOs’ working. Hence the significance of the note at the end of the code stating that implementation will be subject to review by a panel of regulators and NGOs. In fact, the review should be made an on-going process.
The misuse of loudspeakers
PRESIDENT Musharraf’s decision to increase the punishment for those who misuse the loudspeaker in Islamabad is a good one. Previously, those who violated the relevant law were given a one-month prison sentence and made to pay a Rs 100 fine whereas now the punishment is three month’s imprisonment and Rs1,000 fine. As sensible and well intentioned as it is, it will prove futile if it is not strictly enforced. Similar directives have been issued in the past but clerics have largely ignored them, confident in the belief that they will not be held accountable for spewing noise and venom on loudspeakers. The government’s lax attitude towards implementing the ban proved them right. What should only be used for calls to prayer, the loudspeaker has become a tool to incite hatred by illiterate clerics. Since 2001, when its ban was announced, it has proved difficult for the police to monitor the thousands of mosques across the country. Had it apprehended the most obvious offenders and given them strict punishments, it would have sent a strong message to others. That did not happen. Nor were community members asked to step forward and lodge complaints against the misuse against which the police could then take suitable action. It is not too late to change all that provided the administration is sincere in addressing the issue.
The police will have to strictly monitor mosques in their vicinities and prosecute those who are in violation of the law. It should also encourage people to play a more active role by lodging complaints against violators. Community participation can rid society of many ills. The government may face a backlash on the issue but it must remain steadfast in its resolve to enforce the ban.
Higher growth, lower sharing
Dr Salman Shah, the vocal advisor to the prime minister on finance, says if the economic policies that are being followed by the government are sustained they will take the growth level to 10 per cent in the days to come.
Meanwhile, he says, the growth rate of 6-8 per cent fixed for the current year will not only be achieved but may be exceeded. These days, he says, during the first half of the current financial year $3.5 billion had come into the country and that may rise to $5-6 billion by the end of the financial year. That will largely be the result of the stepped up privatisation and the sale of the global depositary receipts of $ 800 million by the OGDC and more by the private sector MCB bank.
Of course he’s calculating without counting the deterrent particularly the shortfall of power by 2000 MW, shortage of water and other infrastructural bottlenecks, which may become more acute in summer. The weather is warming up much earlier than usual. For comparison, India achieved a growth rate of 9.2 per cent last year and China 10.4 per cent. India may this year do better than China as Beijing is holding back the growth rate to prevent overheating of the economy.
While the officials are talking glibly of the great times to come with the high growth rate, the prices of essential items are going up all around. The 16 items whose prices have gone up include milk, pulses, chicken and vegetable oil. The sensitive price index which covers 53 essential items shows a rise of 12.55 per cent last year with a higher rate for larger income group. The rise in pulse prices is indeed stiff along with the increase in sugar prices in the retail by two rupees per kilo.
India has reduced import duty on palm oil as world prices have shot up. There has been a demand in Pakistan for a substantial price reduction. In fact, the government will not lose revenues by reducing the import duty, but only forfeit the extra gain from the rise in duty in monetary terms. But the government does not want to forfeit that despite the vast improvements in the revenue collection between July and January of this financial year. The government should now reduce the import duty on palm oil as it has nothing to lose by that.
The World Bank has alerted the government against an alarming and sustained fall in the share of major crops in the GDP and suggested it should go for high value crops and livestock to increase the rural earnings and for a quick U-turn in this area. Meanwhile, there is a great deal of Euphoria in official circles and in some commercial quarters over the scheduled commencement of operations by the Gwadar port from March 23 following its inauguration by President Musharraf. It has been described a free port in the sense the operators and managers of the port, the port of Singapore authority, will enjoy tax exemption for 40 years.
The PSA will invest 550 million dollars in five years and erect 14 berths to add to the three already there. Minister for Ports and Shipping Baber Ghauri expects a contribution of $40 billion to the economy when the port is fully developed.
A free port usually means one in which the users do not pay duties and not necessarily one where the management does not pay taxes. Such exemption had to be given to make a new port popular particularly in view of the political uncertainties in Balochistan and the competition between ports in the area. The government has grandiose plans for Gwadar and it really has to interest its users in the port on the basis of commercial merit.
Meanwhile, Dubai next door is opting for an economic growth target of 11 per cent and a per capital income of $44,000 by 2015 compared to $31,000 in 2005. Its 2010 planned targets have already been exceeded so Dubai needs a new development plan, says its ruler. Dubai’s economy grew by 16 per cent in 2005 according to figures not adjusted for inflation. So 11 per cent growth is not too difficult to achieve and sustain for a while.
Pakistan with its per capita income of $800 has a long way to go to catch up with its Arab neighbours. Dubai’s population is too small compared to Pakistan’s 160 million which makes its per capita income very small, though it is far better than $500 a few years ago.
While foreign investment flows are rising, the State Bank of Pakistan is trying to curtail the bank credit for the private sector to keep check on inflation. But it had no impact on the rising inflation of 8.9 per cent as the supply side of the economy is not organized enough to hold down the prices. Cement prices have risen by eight rupees per bag in spite of the rise in output. Minister for industries says he will not allow cement prices to rise to Rs300 per bag. Meanwhile the cement manufacturers are trying to raise the price to rupees 280 per bag.
If as the minister says cement exports will rise to 2.5 million tones, prices of cement will rise further particularly when the government does not follow up its strong words with adequate or timely action. Another area of official failure is the unwillingness of the banks to pay fair returns to their savings depositors.
Despite frantic appeals of the governor of the State Bank Dr Shamshad Akhtar and her warning to the delinquent banks not to withhold fair returns to the depositors, the banks have not done that. In fact, the difference between the banks’ high lending rate and the low deposit rate rose by 110 basis points in 2006 to 7.4 per cent. This gap in 2005 was 6.3. With the understated inflation at 8.9 per cent the depositor is the loser when he gets 2 or 3 per cent on his savings with a good many deductions. He would only be a nominal gainer if he gets a 10 per cent return on his deposits.
With the banks too openly defiant and giving better dividends to only long term depositors -- up to 5 years, what is the State Bank going to do to make the banks fall in line. Basel II which is being enforced now cannot take care of such wronged depositors.
With the banks playing such negative roles, how can savings in a country which are too low rise high enough to finance the large development projects. Giving a fair return to the savers will also reduce inflation. The State Bank should hence act positively to help the depositors and make its threats to the erring banks real.
Meanwhile, the banks are showing very large profits. A 100 per cent profit is nothing exceptional. Not only have the prices of their shares been going up, but foreign banks are too keen to take them over as they are making large profits.
Following the take-over of the Union Bank by Standard Chartered bank a good many foreign banks are showing interest in taking over Pakistani banks. The Citibank for example is supposed be taking over the Soneri Bank. There is a great deal of domestic takeover of banks as well. Mr. Shaukat Tarin who sold off Union Bank, which he founded, is now trying to buy over “My Bank”. If the banks will not give a fair return on savings in a period of substantial inflation, how can savings, investment and development be promoted despite the urgings of the World Bank, IMF and other donors to make use of more of the local resources for development.
Excessive dependence on foreign direct investment is not desirable or safe particularly when the foreign investors make very large profits and remit most of that home aggravating the large current account deficit. Unilever for example has declared a final dividend of 114.
The IMF says the external trade deficit in this financial year would ultimately be $ 8.8 billion which is high but only slightly higher than the 2005-06 deficit of $ 8.44 billion.
Exports this year would be $ 18.82 billion and imports $ 27.467 billion leaving behind a record deficit of $ 8.8 billion. The final figure would depend on the world oil prices which are rising again.
Meanwhile, the parleys among Iran, Pakistan, and India for the seven billion dollar gas pipeline from Iran have continued smoothly after Pakistan and India received the undisclosed price formula. While Pakistan has accepted the formula, India says it needs more time to study the formula because of its implications.
There are now reports that the Pakistan government has put off disinvesting Sui northern and Sui Southern gas companies as it wants all the details of the sale to be studied in full, and not make the kind of haste the privatization commission showed in the aborted Pakistan steel mills sale.
Meanwhile OGRA has raised the price of LPG by 12 per cent which is not acceptable to its distributors but eventually the will fall in line. Arrangements are also being made for large scale imports of LPG as that makes driving of cars far cheaper than by petrol in a period of high world price of oil. We should use far more of LPG for a variety of good reasons. LPG, it has been demonstrated, is far less offensive to the environment than petrol or diesel oil.
It has also been proved by the UN agencies that human beings contributed to the increase in heat in the atmosphere. We have 160 million people and we add to that 2.1 per cent or more each year and when our cities have clogged drains and broken waste water pipes and Katchi Abadis galore, the environment is outraged further. So the developing countries which have too many people and too much of violation of the environment have to assert themselves far more to clean up their system than the advanced countries. And they must opt for the alternative energy in a big way instead of using more of fossil fuel or other elements which violate the environment.