Threat to exports
TWO high-level meetings were held in Islamabad on Thursday to carry out an analysis of the factors responsible for export growth sliding since January 2006 and now at a four-year low. One of these meetings was particularly on textiles whose exports grew by mere 6.5 per cent during July-March 2007. It seems that the export strategy pursued over the years has lacked much of substance to stand the critical test of international competition. According to press reports, the Asian Development Bank would now identify areas of export-oriented investment and production needed to diversify products and export destinations--an exercise that should have been carried out much earlier. Similarly, the prime minister says that he would encourage mergers and consolidation in the textile industry to improve productivity but has not spelt out any specifics. As part of the financial sector reforms, tax incentives were extended to banks and financial institutions to encourage acquisitions and mergers but these were denied to the manufacturing sector. It may be appropriate for the government to consider extending similar tax incentives to manufacturing in the next budget. The slower export growth may be attributed to the government’s failure to fully assess the demands of developed markets for goods that could be manufactured at a relative low cost in developing countries because of cheap labour and raw material while the industrialised West concentrated on more sophisticated products and services. The manufacturing sector has not received the priority it deserved though it generates exports and promotes self-reliance. Not only that, the government suspects that a part of export earnings are coming through remittances. The World Bank will reportedly carry out a study on the “puzzling growth” in exports and a steep rise in remittances. Such decisions are diversions from the core issue of boosting exports when the amount involved may be only of a few hundred million dollars. The probe might reduce remittances.
There can be no two opinions about many things that came out of the high-level meetings — the need to improve productivity, quality and value-addition of exportable goods and skill development on a war footing. Indeed, no time should be lost in grappling with the real export issues before the emerging situation assumes the proportion of a crisis, especially because of the threat from regional competitors. Bangladesh has outstripped the pace of exports of all South Asian countries by securing the maximum share of leading garment markets of the US and the EU. Pakistan has been left behind by both India and Bangladesh and is losing the Japanese market too to its competitors. The government should extend full support to the textile exporters where genuine assistance is required to make quality and price of products competitive. The industry also needs to make its management, production and marketing more efficient.
It is quite disappointing to see the nature of dialogue between the industry and the government with sharp differences between the two sides over the cost of export goods. The government claims that the incentives available to Pakistani exports are at par with, and in some cases even better than, those available to their regional competitors. On the other hand, export-oriented industries complain of high interest rates, high utility charges, irritants like social compliance or anti-dumping duties and high taxes on import of textile machinery and industrial raw material. The two sides need to reconcile their difference and reach a consensus so that the export sector is put back on the rails.
High-rise boom in Islamabad
TODAY’s Islamabad bears little resemblance to what Constantinos Doxiadis had in mind. The renowned Greek architect who prepared the capital territory’s original master plan envisaged a city in which residential buildings would be limited to two storeys and where high-rise construction was best avoided. His vision was not based on aesthetics alone. Islamabad lies on five major seismic fault lines, one of which runs directly beneath the Faisal Mosque, and is thereby at serious risk of a major earthquake. In 2005, shortly after the October 8 disaster and some 46 years from the time when Doxiadis presented his initial report on the new capital city, two senior officials of the Geological Survey of Pakistan had strongly advised that buildings in Islamabad should be no higher than two storeys. Islamabad was prone to high-intensity earthquakes, they explained, and the earth’s crust could not support the weight of tall buildings.
The Capital Development Authority clearly believes otherwise. Last week the CDA decreed that buildings in the ‘markaz’, or sector-centre, areas of Islamabad could now be raised to a height of ten storeys, as opposed to four. This drastic revision carries serious safety implications for city residents. In a country where corrupt officials are hand in glove with unscrupulous builders, how will it be ensured that the new, taller structures meet international standards for quake-resistant buildings? The collapse of Margalla Towers on October 8 was tragic testimony to the shoddy construction work of greedy builders who skimp on essential materials to cut costs. Without strict adherence to building codes, the CDA’s decision will be an invitation to disaster. Moreover, the city’s existing utility networks are clearly incapable of coping with this vertical building spree. Bigger water and sewerage lines must be laid before the new buildings come up. If the civic infrastructure is not upgraded in a manner that is commensurate with the scale and pace of the construction boom, the CDA will be repeating the planning mistakes that are now plaguing other cities. The problem of water, a commodity already scarce in the capital territory, is particularly worrying. Even an upgraded distribution network will be irrelevant if supplies remain stagnant or fall further.
Nurses’ complaints
THE complaints of trainee nurses at Karachi’s Civil Hospital should not go unheeded. Not only are they indicative of the enormous work pressure and other concerns of the students of the hospital’s nursing school, they are also a reflection of what ails this sector in the country as a whole. Unfortunately, the nursing profession in Pakistan has never been given the kind of importance that it gets in many other countries — which is one of the reasons why there are relatively few entrants in the profession here. Little is done by the state to encourage the profession. In fact, there is far more focus on opening medical rather than nursing schools. Thus, it is not surprising that there is one nurse for 50 patients at the Civil Hospital when the recommended ratio is one nurse for about three patients during an eight-hour shift. Needless to say, overburdening nurses and forcing them to work long hours without relief can take its toll on the health of the patients who, under the prevailing circumstances, are deprived of the care they require.
The government must play a pro-active role here by taking steps not only to remove grievances such as long working hours, poor pay and slow promotions, but also to enhance the image of the nursing profession in the eyes of the public. Nurses are often made scapegoats for the mistakes of doctors and are also subjected to the rude and insulting behaviour of both medical colleagues and patients. This attitude is contributing to the dearth of professional nurses, many of whom look out for jobs in countries where they are more respected and better paid. The government would do well to highlight their contributions and encourage more young women to opt for what can be a very rewarding profession under the right conditions.
At the crossroads, yet again
AS in geometry, so in governance, an inverted pyramid is an inherently unstable arrangement and needs external props to hold its unnatural position. In governance, it is also an outdated model because it represents an organisational structure more appropriate for tribal and pastoral societies than for complex commercial and industrial societies of the contemporary world.
Maximilian 1 was the Holy Roman Emperor from 1508 to 1519, during which time Germany also saw the first flowering of Renaissance. A report submitted by an ambassador of the court of Maximilian I describes the style of governance under Ottoman rule as one that, with slight modifications, could well be written by ambassadors based in capitals of some OIC countries today.
“All supreme authority in the Turkish Empire,” the report said, “rests in a single man, all obey the Sultan, he alone rules: he receives all revenues, in a word he is master of and all other men are his slaves.”
Such inverted pyramids of power that govern above and beyond the law, became an endangered species in Europe after Maximilian’s time, and ultimately disappeared after the Industrial and French Revolutions. Both these tectonic events have had a profound and lasting influence around the world in defining the role and responsibilities of the state and society and how the two should be organised for a better discharge of their functions.
That the governance must be according to the due process of law that must guide its working became a pre-requisite for controlling the arbitrariness of mediaeval governance. This quantum change in the character of governance created an enabling environment for societies to lift themselves to higher levels of development from their primitive low levels of existence.
But 500 years down the lane, the law still remains subservient to governance in much of the Muslim world which does as it did in mediaeval times — as if the intervening period and events happened in some other part of the solar system and not on this planet. All authority still emanates from inverted pyramids of power and all major decisions shaping social, economic and political life in countries are taken by them or in their names.
The science of governance, however, has made major strides during these years. This progress has resulted from an explosion of knowledge and its application by the human mind to the challenges faced by societies as they have evolved from tribal and pastoral to commercial and industrial societies of modern times.
Rule of law and democracy, therefore, are not just politically correct concepts of our time. These are necessary features of governance for any state that wants to develop through institutions which could successfully handle the demands and expectations generated by increasingly complex social, economic and political functions of state and society.
Development is a process of transformation of society from lower to higher levels of existence for its members. And this transformation is possible when all members are incorporated in these processes and their endeavours are protected by the rule of law. A system based on inverted pyramids of arbitrary power and authoritarian governance is the very antithesis of this development and incapable of creating enabling conditions to encourage such a transformation.
Rule of law and the due process are, therefore, important stimulants for economic activity. They reduce transaction costs which are the hallmarks of arbitrariness and act as a disincentive to attempts at turning governance into a self-propelling process. Democratic polity helps open opportunities for people, who would otherwise be living in “permanent inequality of conditions”. A successful transformation involves all members in the functions of development which, in turn, are best performed by rule-based governance and not under the arbitrary whims and caprices of individuals.
Take a look at how the science of governance has evolved from the mediaeval to the modern times. Some milestones include: from people having no right to anything, including their life, in mediaeval age to rights of life, liberty and human development of citizens; from rule by inverted pyramids of power to governance through the separation of powers; from rule by individuals to governance by institutions; from rule by commands and directives to decisions taken according to the law.
Denying the people the fruits of progress in governance under one pretext or another – religious or secular – is disingenuous, because apart from governance, we use no such pretexts in benefiting from progress made by the human mind in several other areas of knowledge whether in individual or collective life.
Transportation, too, has evolved and progressed during the last 500 years or so from the horse-drawn carriages to moving men and material by railcar, motorcar, airplanes and space-age travel. These have also evolved in response to the challenges of travel and transportation encountered in the development of commercial and industrial societies and the need to save time and cost.
Similarly, the rule of law and democracy have also evolved as the most appropriate features of a system for harnessing human and physical resources of state and society for achieving higher levels of development in a fair, equitable and efficient manner. The two reinforce each other and must go hand in hand.
Notwithstanding the good intentions of any of the inverted pyramids, no other form of governance opens up opportunities for all members of society, nor is more responsive to their needs than democracy. It is also a bulwark against rule by autocrats, but it also needs to be guided by the rule of law to prevent it from sometimes being turned into a self-serving enterprise. Coupled with the rule of law, democracy also ensures responsible and accountable governance.
In the absence of democratic governance and the rule of law, people’s problems have little chance of being heard, much less redressed. This is why although the press has often been narrating tales of the poor people committing suicide and highlighting the problems of other neglected sections of society, very little is done to redress their grievances. Often, their voices go unheard, their pain and problems unattended and their dreams unfulfilled.
Law, politics and governance are interrelated and reinforce each other. Yet they are also and must remain distinct and distinguishable. Just as the law should not lubricate the cogs of political ambitions of seekers of power, politics cannot be a substitute for governance. Their being indistinguishable from one another has been the bane of the troubled history of Pakistan for most of its 60 years’ existence.
The movement by lawyers over the treatment of the Chief Justice of Pakistan, which has received so much support from other elements of civil and political society, should also cause some soul-searching as to the health of our political system. Four times in the recent past, elected prime ministers and parliaments were sent home packing by military takeovers or palace coups, but the political parties were not able to organise or sustain similar peaceful movements against the treatment meted out to their own leaders. The need for reforms and reinvigoration of the political system is only too obvious as it is for our judicial system.
Many observers, here and abroad, are waiting to see whether the movement launched by lawyers and supported by political parties would lead to the establishment of rule of law and genuine democratic governance in Pakistan through court decisions or the government’s own actions; or would it be undermined by unforeseen factors.
If it creates a framework that combines democratic governance and the rule of law, it would be of lasting benefit to Pakistan and its long nightmare of coups and bad governance would finally be over.
The writer is a former head of Board of Investment and a federal secretary.
smshah@alum.mit.edu
Missile test
THE still-growing diplomatic storm over the Bush administration's attempt to install missile defence bases in Europe is mostly Russia's doing. Vladimir Putin has skilfully and cynically used the administration's plans to deploy 10 interceptors in Poland and a radar in the Czech Republic as a way to stir up trouble in Nato and to justify new steps in Russia's increasingly belligerent foreign policy -- such as moving toward the renunciation of a treaty limiting conventional military forces in Europe. The administration is right to call Mr. Putin's broadsides "ludicrous." Yet that doesn't mean its anti-missile strategy is sensible.
The Pentagon has been chastised repeatedly by Congress, government watchdogs and its own expert auditors for rushing the deployment of missile defence systems before they have been adequately tested or a genuine threat has materialized. Yet despite promising to learn from its mistakes, the administration is repeating them in Europe.
It opened bilateral negotiations with the Polish and Czech governments on missile bases without adequately consulting other European allies or coordinating the proposed system with Nato's own missile defence projects. It asked Congress to appropriate more than $300 million for the project next year, even though the threat it is aimed at -- an Iranian missile capable of reaching Europe -- isn't expected to materialize until 2015.
Most troubling, the administration elected to press ahead even though the "midcourse" system, designed to shoot down missiles while they are still beyond Earth's atmosphere, has not proved itself in testing.
–– The Washington Post