In suspended animation
HOW long will the nation be sustained — if not entertained — on the political circus in the form of constitutional formulae and packages floated daily? One wishes wheat flour were available to us in that quantity. Going by how the legal experts talk, it would appear that they were doing us a favour by trying to grapple with insurmountable constitutional problems. On the contrary, the failure to clinch the issue stems from the confusion in PPP ranks and the party’s inability to adopt an unequivocal stand without delay. The PML-N is out of the statement business; it seems to be waiting for the PPP to make a move. The PPP has taken long to decisively tackle the issue and somehow refuses to grasp the broad picture and realise what is at stake.
As we have said earlier in these columns, the PPP should have sorted out the judges’ issue one way or the other much earlier. If at all it were serious about restoring the judges, including — and especially — Iftikhar Chaudhry, it should have started working on a formula on the morning of Feb 19. The 30-day deadline, which was never met, and its extension to the 12th of this month have merely served to frustrate the nation, because the people’s problems have gone abegging. The ADP in its final form is to operate on a budget that is likely to be slashed by Rs300bn to Rs400bn. The people are reeling from the impact of what indeed is one of Pakistan’s worst bouts of food inflation. No relief seems in sight from power outages as temperatures rise. There is political uncertainty in Punjab. The lawyers are determined to carry on their struggle, and even some retired generals have chosen to be with the summer mobs. Parenthetically: one of the generals was a rank intriguer and took Rs140m from Mehran Bank to disburse to his favourites; the other confessed to Benazir Bhutto that he was the man behind the IJI. These born-again democrats want us to take them seriously.
Regrettably, the PPP-led government’s response is characterised by an absence of clarity. There are reports that even the budget session may be delayed because of the constitutional wrangle. There is no guarantee that a late budget will solve the judges’ issue, but it will most certainly give a wrong message to the business community at home and lenders abroad and worsen the economic crisis. It is time the Yusuf Gilani government spared some thought for the people of Pakistan whose votes have brought it to power. Let the people not be disillusioned by democracy.
Pathways out of poverty
THE World Bank’s report Agriculture for Development has very rightly called for greater investment in agriculture in developing countries and stressed that the sector should get extra priority if goals of halving extreme poverty and hunger by 2015 are to be realised. Admittedly, the logic used by the report to back its suggestion has been there all along for everyone to see. Who does not know that 75 per cent of the world’s poor live in rural areas and that GDP growth originating in agriculture has been four times more effective in reducing poverty than GDP growth originating in other sectors? And who does not know that agriculture offers pathways out of poverty if efforts are made to increase productivity in the staple foods sector, connect small-holders to rapidly expanding high-value horticulture, poultry, aquaculture and dairy markets, and generate jobs in the rural non-farm economy? And perhaps only the most ignorant of official planners in developing and developed countries have failed to see how agricultural growth has successfully reduced rural poverty in East Asia over the past 15 years.
But the emphasis of multilateral aid agencies and bilateral donors over the last 20 years has been on globalisation. The recipient countries were told that once they dismantled their barriers against imports from the rich countries all their economic woes would disappear and poverty would vanish from their midst. But the rich countries were not practising what they preached. While keeping up their globalisation rhetoric they kept erecting ever higher walls against imports from developing countries and heavily subsidised their farm sectors. This not only constrained the export potential of developing countries but virtually destroyed their agricultural sector. And by its own admission the World Bank’s lending for agriculture declined in the 1980s and 1990s. The report also concedes that the policies of the rich countries harmed the poor countries. It makes a very valid point when it says that in the emerging area of biofuels, the problem is both restrictive tariffs and heavy subsidies in rich countries, which drive up food prices and limit export opportunities for efficient developing country producers.
The publication of the report is most timely. One can hardly disagree with the World Bank’s goal to link small-holders to modern food markets and provide remunerative jobs in rural areas. The bank committed $3.1bn in 2007 to achieve this goal, according to the report. But this amount is still too small for the gigantic challenges that the farm sectors in the developing countries face from expanding demand for food, feed and biofuels, the rising price of energy, increasing land and water scarcity as well as the effects of climate change.
Embarrassment in store?
FINISHING fourth on the leader-board at the Azlan Shah Cup in Malaysia, the failure of the national hockey team will not evoke a strong reaction. This is so because the average Pakistani hockey lover has for long stopped keeping track of the green-shirts, so poor has their record been. The embarrassment in Malaysia, however, had a few additional layers. We finished behind low-ranking teams like Argentina, India and New Zealand. Add to it all the leading outfits that were missing from the lineup — Australia, Germany, Holland, Spain etc. — and one gets a sense of the actual worth of our team. Besides, it came after the Pakistan Hockey Federation spent considerable time talking about the team’s preparation for the prestigious Olympics. Before Beijing, there is just the scheduled European tour away, and an embarrassment of mammoth dimensions cannot be ruled out. Those who still follow the fortunes of the national game rightly point an accusing finger at the PHF hierarchy which kept changing the team management without allowing anyone to settle down. They failed to take a long-term view of the game. The ugly and extended row involving the national selectors and the coach — conducted in full public view — ahead of the Malaysian outing did not augur well for our performance either. The latest debacle has only confirmed the validity of all such fears that were voiced at the time.
It is not surprising that policy and execution inconsistencies have allowed the players to get away with laxity and lack of fitness. This reflects on the pitch where the forwards run out of ideas and steam once they are inside the scoring zone, and the defenders stay flat-footed when they come under attack. Anyone with any understanding of the game knows that when a team plays its best hockey in midfield, looking upwards for divine help in the two scoring areas, there is not much for its followers to bank on. Olympics or otherwise, the earlier the PHF bosses acknowledge this the better it will be.
OTHER VOICES - European Press
Bring back war against cabinet fat
The Moscow Times
THE structure of Prime Minister Vladimir Putin’s cabinet probably reflects his vision of how the government should be run. It has a record number of deputy prime ministers — seven. This will inevitably create overlapping functions and competition among them, allowing Putin to remain the ultimate powerbroker. For Sergei Mironov, a staunch Putin loyalist and speaker of the Federation Council, this represented the successful realisation of public administration reform.
In reality, however, Putin’s cabinet represents the ultimate death of the set of reforms conceived by former Kremlin deputy chief of staff Dmitry Kozak several years ago.
The reforms, which Putin kicked off with a March 2004 presidential decree, divided government bodies into ministries, agencies and services. The ministries were supposed to formulate policies, the agencies were to implement them, and the federal services were to exercise oversight over the implementation of the policies and compliance with laws in their relevant spheres.
Putin also ordered the number of deputy ministers to be cut to two at each ministry as part of the 2004 reform programme. The reforms aimed to divide the functions of agencies in order to improve the efficiency of the country’s traditionally bloated public administration system. It also aimed to prevent abuse of power and decrease corruption by distributing among various government bodies the responsibilities of formulating and implementing policies and exercising oversight.
But these reforms stalled as ministries resisted giving up implementation and oversight functions to agencies and services, and Putin appears to have lacked the will to enforce his own reform programme. The ministers also eventually defied the requirement to have just two deputies, and the overall number of employees in their ministries mushroomed. This week, the number of ministries increased by two amid a government reshuffle endorsed by President Dmitry Medvedev. Putin also disbanded a number of federal services and agencies. This decision drove the last nail into the coffin of the much-needed reforms. No resident of this country — unless perhaps he is a bureaucrat himself — is pleased with quality of public administration.
In the World Bank’s governance indicators for 2006, the effectiveness of Russia’s government was ranked in the low 38th percentile, while its rule of law ranking was in the 19th percentile.
Putin and Medvedev are well aware of this poor governance problem. Rather than configuring the executive branch to suit themselves, they should revive and complete the reform of the public administration system, making it a slimmer, efficient machine tailored to the needs of the public. — (May 15)
Pakistan and global food prices
THE Sensitive Price Index has now crossed the frightening rate of 20 per cent (the latest being 24 per cent), largely on account of the recent revisions in the domestic prices of petroleum products and food inflation.
Excessive liquidity in the banking sector owing to robust capital inflows and a loose monetary policy fuelled by government spending have contributed to the swelling of food prices. However, this price surge has principally been driven by changes in global markets and long unaddressed domestic structural factors.
The increase in the prices of food items (rising at double-digit rates for almost three years) started with wheat prices touching a 30-year high — the price doubled in the first quarter of 2008 over last year (and this was after a substantial increase in 2007). Both the shifts in demand and supply of products and those trading in commodity futures have influenced market behaviour and prices; in the process speculators and multinationals dealing in agricultural products made huge profits from the sale of food to poor countries.
This spurt in prices has now overwhelmed all cereals and vegetable oils, meat, milk, fruit and vegetables. Matters have been made worse by suppliers of edible oils and pulses (Malaysia and Myanmar) having near monopoly-like control over the international prices of these products, the price of palm oil having almost tripled in two years since 2006.
Increases in the price of oil and energy have enhanced the cost of production of agriculture. Since most farm operations worldwide are nowadays mechanised, the increase in the price of crude oil have pushed up the production cost curve.
The price of energy, especially of gas, is also a significant cost factor in the manufacture of fertiliser, a critical input in crop cultivation. And prices of urea and DAP in the international markets have climbed up more than 200 per cent since 2006. These factors combined with the rise in the outlay on transportation (having become more expensive because of rising oil prices) has contributed principally to the increase in the costs of agricultural production.
While these factors have directly contributed to the rise in crop prices, other developments have caused a decline in the production of wheat. These include the diversion of maize and vegetable oils to the manufacture of ethanol and biofuels, severe drought in the major grain producer Australia, adverse weather conditions in eastern Europe and the shrinking of the natural resource base for food production and climate change.
There is a spill-over effect on other crops of use as feedstock for biodiesel. Low food prices from the late 1990s to nearly 2003 also slowed down, if not actually served as a basis for the regression in, food production. The net result of these changes was that the world production of cereals fell from 357kg per person per year in 1998 to 317 in 2006/07.
As the government struggles to fight these fires of inflation it should not be forgotten that things have come to such a pass also because of decades of neglect of the agriculture sector. Since the mid-1990s, the yields of major agricultural crops have been showing stagnation, with crop productivity growth actually becoming negative from 1990 to 2003.
Farmers are now attaining additional increments in yields at a fairly high marginal cost. As a consequence, the per acre net return is declining and this is the real crisis of the rural sector.
Successive governments have failed to tap the huge potential of the agriculture and livestock sectors. They have not ensured food security by not providing adequate support to agriculture through strengthening marketing and price and non-price incentives. Neither have they created a system for better clarity regarding property titles to facilitate access to credit, development and the maintenance of storage.
The issue of water scarcity has not been addressed by building storage dams, improving efficiency of water use and promoting crop insurance or the balanced use of nitrogen and phosphate fertilisers.
The government has not put in adequate investments in the research and development of edible oil seeds (sunflower and canola that also use less water) and new varieties of seeds of other principal crops with the idea of improving cropping patterns. Similarly, the introduction of BT cotton, the extension of services and the construction and maintenance of farm-to-market roads would also have made a difference.
This is required since inclusive and sustainable growth of this country has to be anchored in agriculture, the backbone of our economic foundation, which we can ignore only at our peril. Also to be noted is the sharp rise in the international prices of food crops and the opportunities arising for farmers to trade in other cash crops and enhance their earnings quickly in the foreseeable future.
The gradual removal of subsidies in OECD (Organisation for Economic Cooperation and Development) countries and the resulting increases in prices of such crops have made them attractive for farmers.
The high dependence of the rural population on farm incomes — close to 45 per cent of the workforce relies on agriculture for its livelihood — makes them vulnerable to weather shocks and technological risks.
Supporting such groups is not only required for poverty reduction but also to bring more stability in the growth of the ‘wage component’ of demand. Growth biased in favour of the lowest income households will ensure stability since their consumption patterns are more stable in nature.