Almost six months after the relative euphoria generated by the comprehensive defeat of Pervez Musharraf's King's party in the February 18 elections, the country is once again abuzz with expectation following the announcement made by Asif Ali Zardari and Mian Nawaz Sharif that the parliament is about to begin impeachment proceedings against the man who has ruled Pakistan for almost nine years.

Admittedly, most Pakistanis are at best cautiously optimistic that on this occasion their elected representatives will deliver what would indeed constitute a highly symbolic victory against the military establishment. With the exception of the minority that has benefitted in some way during the Musharraf regime, there is an unspoken society-wide consensus that Musharraf must go so that there can be some semblance of closure on yet another dark period in the country's history.

Whether or not Musharraf will go willingly and with an iota of dignity intact is another matter altogether. The three military dictators that preceded him hung on till the bitter end and were eventually forced out unceremoniously. Of course, the difference between Musharraf and Ayub, Yahya and Zia is that the former has actually managed to undermine the military's image as an institution in a manner that none of his predecessors did.

This dubious achievement is owed in large part to the fact that the military is a substantively different institution now compared with even two decades ago, in the sense that it has developed vast corporate interests that have brought it into contact with working people like never before. Then there is the highly unpopular alignment with American imperialism in the shape of the so-called 'war on terror'. Perhaps most crucial has been the lawyers' movement, which has permanently altered the balance between the military-executive and the judiciary.

The legal fraternity has responded guardedly to the impeachment announcement, expressing disappointment that the restoration of judges has been put on the backburner for the time being. Having said this, most discerning lawyers are probably relieved that the coalition has at least reaffirmed its commitment to doing away with the vestiges of the Musharraf dictatorship; if and when the general goes, it will surely be a matter of time before the chief justice and his companions reach a compromise with the ruling regime and are restored with maximum dignity intact.

Even before the announcement, the writing seemed to be on the wall. Many of Musharraf's major lieutenants were being shunted out of powerful positions and initiatives introduced by the dictator undone. It now seems quite clear that the prime minister's less-than-gratifying visit to the United States was successful on at least one count: Washington clearly gave permission to the elected regime to finally show Musharraf the exit door.

But this is precisely why it is crucial for democratic forces to take the impeachment announcement with a grain of salt. If government has been in virtual paralysis since the February 18 elections, this is because Islamabad's imperial patron has been testing the new waters, unwilling to part ways with Musharraf & co until it is convinced that the elected regime will do its bidding. It finally appears that the Bush administration -- and presumably both candidates for the presidential election in November -- believes that it can trust the elected government to serve its geo-strategic interests.

Perhaps it would be more accurate to put it this way: Washington's main man in Pakistan is now General Ashfaq Parvez Kiyani, who has assured the Bush administration that the elected government is playing ball vis-a-vis the 'war on terror'. In return, the general has requested that Washington help it securing some breathing space vis-a-vis the military establishment. In other words, after all that has happened over the last 17 months, the military has somehow managed to not only retain its role as arbiter but has also saved face, particularly in the six months after February 18.

This is not to say that the military's image has recovered completely from the beating it has taken over the past few years, but only to suggest that it has resumed its favoured posture of running the show behind the scenes, with the express mandate of Washington, of course. Indeed if the military continues to prop Musharraf up, the coalition will struggle to see the impeachment process through to its conclusion.

It isn't very pretty reading, but it is the reality of power politics in Pakistan. This is not to deny the qualitative shift in Pakistani politics generated by the tumult since March 9, 2007, whereby democratic forces and working people more generally have demanded a meaningful change. Clearly Washington and the elected government recognise the need to placate public sentiment if the policy of winning the 'hearts and minds' of the people is to be even marginally successful.

But the point being stressed here is that even though Musharraf's demise will be a success for democratic forces, it will not signal a whole lot of change. And this is because sovereignty remains distant, the aid-dependent economy is still in free-fall and the so-called 'war on terror' continues to subject society to immense pressures. Importantly, a successful impeachment campaign -- or Musharraf resigning before he is forced out -- will definitely increase the chances of the coalition government completing its tenure but given the numerous contradictions that beset the state and society, this might not be enough to stave off total breakdown.

While it is difficult to isolate one or the other contradiction, the fallouts of what appears to be an unending imperialist war stand out as the most pressing. And it is here that the coalition government appears to be almost powerless to stop the rot. The recent furore generated by the Afia Siddiqui travesty is ample indication that the 'hearts and minds' of the Pakistani people are firmly anti-imperialist and if the new regime does not make a significant break with Musharraf's stance on the so-called 'war on terror', everyone will soon forget its popular decision to kick Musharraf out.

Pakistan has a population of about 170 million (we won't know the exact figure until the national census in October) and a foreign debt of $46 billion. With a population of 40 million, Argentina's foreign debt, at $166 billion, is 3.6 times more than Pakistan's in real terms and nearly 15 times higher on a per capita basis. And we think we've got problems!

Like many other developing countries, Pakistan spent most of the 1980s and 1990s borrowing money from the International Monetary Fund for budgetary support, which meant having to comply with the conditionalities imposed by the IMF for lending us the money.

These conditionalities included frequent increases in electricity tariffs, which the IMF continued to demand year after year despite the fact that our tariffs were already the highest in the South Asian region and amongst the highest in the world.

Other conditionalities imposed by the IMF included doing away with subsidies on agricultural inputs, making our farm produce less competitive in export markets. This impacted adversely on our export earnings, widening our trade gap and increasing the pressure on our balance of payments.

In short, the IMF conditionalities had a negative effect on the performance of Pakistan's economy and stifled gross domestic product (GDP) growth, with growth falling to less than four percent through most of the decade of the 1990s.

Coupled with our continuing high rate of population growth, the low rate of GDP growth resulted in an increase in the number of people living below the poverty line -- as measured by the yardstick of people living on a per capita income of less than a dollar a day. By that measure, the number of people living below the poverty line rose from 17 per cent of the population in the late 1970s to more than 34 per cent of the population by the end of the 1990s.

It wasn't until we were well into the first decade of the new millennium that Pakistan managed to get out of the clutches of the IMF. By then, however, the damage had already been done and we had fallen far behind such other Asian developing countries as Thailand and Malaysia.

The fallout from that era of IMF-dependency continues to be felt to this day. To compound the problem, we are now living in an era of high oil prices and sharply rising food prices. With a highly skewed 30:70 ratio of hydel power generation to oil-and-gas-driven thermal generation, our electricity tariffs are now the highest in the world, which continue to raise manufacturing costs across the board, making our products less competitive in export markets and leaving our exports limping along at about $17 billion a year.

Fuelled by high oil and food prices, our imports, meanwhile, have risen sharply to about $40 billion a year currently, and the expectation is that this figure is likely to rise further over the next couple of years. The result is a ballooning trade deficit, which soared to about $20 billion in fiscal 2007-08 and is currently running at about $2 billion a month, or about $24 billion a year.

Among other things, this growing trade deficit has resulted in a steep decline in our foreign exchange reserves, which have fallen for $16.5 billion to $10.5 billion in less than a year. This decline has reduced the fiscal space available to the government to increase spending on poverty-reduction programmes, and has forced it to borrow heavily from the State Bank of Pakistan in recent months. In the last four months of fiscal 2007-08 alone (March 1 to June 30, 2008) government borrowings from the SBP reportedly amounted to about Rs240 billion.

IMF prescriptions have seldom been a panacea for solving the problems of developing countries and boosting GDP growth. Take what happened in Argentina. Once the ninth richest country in the world, it has been mired in recession for years, with soaring inflation, a currency that is perpetually in crisis and a crushing foreign debt burden -- all mostly thanks to the IMF.

In December 2000 the IMF had to pump $40 billion into Argentina to prevent it from defaulting on the current portion of its foreign debt. However, even that $40 billion-injection couldn't help the economy to recover. The economy contracted in 2000 and the year before; in 2001, it grew a feeble 2.5 per cent.

A miracle economy in the early and mid-1990s, Argentina has been mired in a slump since 1998. Foreign investment has plunged as the trade deficit has soared. In 1999, foreign direct investment was over four percent of GDP; in 2000, it was less than one percent of GDP.

In a bid to revive the economy, then-President Fernando de la Rua appointed Domingo Cavallo minister of the economy in March 2001. Cavallo was also economy minister under former president Carlos Menem in the early 1990s. In 1991, Cavallo created a currency board that backed Argentina's pesos with US dollars and made them freely convertible into dollars one-for-one.

The convertibility plan killed Argentina's chronic hyperinflation overnight and ushered in a new era of privatisation, deregulation and growth. But, in 1996, Cavallo quit Menem's government to develop his own political party. With no one of Cavallo's stature to shepherd them, the reforms he had initiated lost momentum.

Menem, meanwhile, was looking for a third term and opened up the federal government spending taps. Federal spending rose from 34 billion pesos in 1996 to more than 38 billion pesos in 1997, 1998 and 1999. As a result, Argentina's fiscal deficit began to climb.

To convince IMF economists that he was fiscally responsible, Menem and his new economy minister, Roque Fernandez, raised taxes to close the deficit. Menem lost the presidential election to Fernando de la Rua in October 1999, but de la Rua continued Menem's policy of fighting the deficit by raising taxes.

The taxes imposed in Menem's latter days in office and de la Rua's first year included raising customs duties on capital goods from nothing to 14 percent. In 2000, a 15 percent surcharge was levied on corporate borrowings. Steep new taxes were also imposed on diesel fuel, another favourite IMF measure that proved disastrous for a large country whose products must travel long distances to ports and markets.

Taken together, these IMF-dictated measures wreaked havoc on Argentina's economy -- just as similar IMF prescriptions have done in the case of other developing countries in recent years.

Dr Muhammad Farooq Khan, a widely recognised writer and intellectual, was born in a village of the Swabi district in the NWFP. He received his early education from his native village before taking admission in Cadet College, Hasanabdal, and later Cadet College, Kohat. After doing his MBBS, he decided to specialise in psychiatry and established his private clinic in Mardan.

Dr Muhammad Farooq Khan has a multi-faceted personality. Besides studying medicine, he received religious education in various madrassas too. He also remained a student leader. Then he joined the Jamaat-e-Islami, but left the party soon. He later joined Imran Khan's Tehreek-e-Insaf, but soon parted ways with it too. He also contested the February 18 general elections without success. Recently, he was appointed vice-chancellor / project director of the International Islamic University Mamdheri, Swat, built at the same venue that was the centre of notable Swati cleric Maulana Fazlullah.

In his own words, Dr Muhammad Farooq Khan is a humanist who wants well-being of the whole humankind. He does not believe in conspiracy theories, urges self-realisation and critical self analysis, and stresses that once we overcome our shortcomings the external world will soon become favourable. He is not happy with the rampant emotionalism in our society and thinks that our reactionary psyche has done us more harm than good.

God has bestowed upon Dr Muhammad Farooq Khan the quality of presenting his propositions in simple language. He is clear in his thoughts and terse in his utterances. He has written books in both Urdu and English, some of which include Dialogue with the West, Pakistan and the Twenty First Century, Islam and Women, Jihad and War, etc. The News on Sunday interviewed him recently. Excerpts follow:

The News on Sunday: What are the most pressing problems Pakistan faces today?

Dr Muhammad Farooq Khan: I divide these problems into three categories: primary, secondary and tertiary. The primary reasons for our present state of affairs are the widespread illiteracy and poverty in our country. We are ranked among the least literate nations in the world. We claim of having 40 percent literacy rate, but this figure too is highly questionable. Education has never been our rulers' priority. Because no uniform system of education has been developed, the country has been divided into many classes. Our religious education system too is defective; what is imparted in the name of religion is sectarianism. Interfaith dialogue, peaceful coexistence and tolerance were never fostered in Pakistan. In terms of poverty too, Pakistan is bracketed with the poorest of countries. The so-called 'economic development' claimed by successive regimes is cosmetic and superficial. Our 'robust' economy cannot do without US aid. The middle class has always been shrinking. The gap between the haves and the have-nots is widening. A society develops when 70-80 percent of its population belongs to the middle class. Good social and moral values are bound to emerge in a society where there is a strong middle class.

TNS: Will you please tell us about the secondary and tertiary problems too?

MFK: Lack of democracy, justice, rule of law, integrity and tolerance in our society has also done us harm. I call them secondary problems not because they are less important, but due to the fact that they are the by-products of illiteracy, poverty and absence of a sizeable and vigilant middle class. All these five are prerequisites for peace, development and prosperity of a country, but they are practically non-existent in Pakistan. Political demagogues often deceive people because the majority is ignorant. There is no democracy, so no accountability. There is no justice and no rule of law; that's why people take law into their hands. There is less business and investment, because integrity is missing. Similarly, we see a lot of incidents of violence, because tolerance is at the lowest level in our society. The tertiary problems include those of extremism, terrorism and their associated evils. They are interlinked in one way or the other with the above phenomena.

TNS: What is terrorism? Is it restricted to a particular area or society?

MFK: There has been no agreed upon definition of the term so far. Terrorism is defined as recourse to violent means to achieve political ends. If the use of force alone is the yardstick to judge someone as a terrorist, then the individuals, organisations and countries that use force for political objectives should also be declared as terrorists. Moreover, terrorist for one could be a hero for others. Similarly, terrorist of the past may well be declared as a freedom fighter later, and vice-versa. Terrorism was in vogue in many developed countries in the past. For example, in the United States, vigilantism -- the old name for present day terrorism -- motivated people to take up weapons to set everything right by force and this continued for more than two centuries. Cowboys, who were particularly popular in Texas from where Bush comes, were the American Taliban. We all know how the Hollywood eulogised and idolised them in thousands of films. In Europe too, the trend manifested itself after the advent of Renaissance and Enlightenment, and continued for centuries. French revolutionaries were the Taliban of the West, who tried to reform their society by force. All these people had some common attributes: they were sincere, active, passionate, armed and fought for their ideals. Terrorists (force users) throughout the history have been seeking some sort of justification. Renaissance was motivated by liberalism, while the US freedom struggle sought solace in the American nationalism. In South America, where religion is strong as in Pakistan, reformists used Liberation Theology for the purpose. Scientific socialism, language, area and other phenomena too have been used as the bases for violent reformation and liberation movements. This vigilantism would have been in practice even now had the collective western conscience not come to the conclusion that development and empowerment of institutions was vital for a peaceful and prosperous society.

TNS: How did extremism and terrorism develop in Pakistan?

MFK: A number of factors and actors are to blame in this connection. The above-mentioned shortcomings in our polity served as causes of frustration in Pakistan. Things, however, were made worse first by the erstwhile USSR and then by the American aggression against Afghanistan. The US, Ziaul Haq and the Jamaat-e-Islami -- along with global pan-Islamist movements, such as the Muslim Brotherhood -- are the main culprits responsible for promoting it in the region and in the world. They joined hands probably in an unconscious alliance to defeat communism. The US was happy that it would punish the USSR for its role in Vietnam by putting guns on the shoulders of Afghans, so it supplied arms, money, training and media support to them. The Arab kingdoms also followed suit. The Jamaat-e-Islami and other religious outfits around the world supplied human resources to fuel the war. Hundreds of thousands of militants converged on Pakistan with their hardline ideologies. Pakistan welcomed them because it was a base-camp for the 'Jihad'. Many of these hardliners opted to remain in Pakistan after the war ended. Zia still needed them for Kashmir, so he facilitated them. They established their strongholds and are now fighting their once erstwhile supporters: the Pakistani military establishment and the US. It is an established fact that Afghanistan and Pakistan have been trying to destabilise each other by using their respective oppositions. If Afghanistan supported the Pakhtunistan movement, Pakistan too patted Professor Burhanuddin Rabbani and Engineer Gulbadin Hekmatyar on their backs since the early 1970s. I personally met both of them in the Jamaat-e-Islami's Peshawar office way back in 1974. The Jamaat-e-Islami was the sole opposition party in Afghanistan at that time, with Rabbani as its president and Hikmatyar as its secretary-general. When Zia decided to lend military support to Afghan fighters against the Russians, he also went for the divide-and-rule policy, so that Afghanistan always remained subservient to Pakistan. So, with the blessings of Zia, the Hizb-e-Islami emerged out of the Jamaat-e-Islami, Younis Khalis formed his own faction of the Hizb-e-Islami, Professor Sayyaf was called from Saudi Arabia and facilitated to form his own group, the mujahideen who believed in Sufi thought formed their own organisation, pro-Zahir Shah group united under a new umbrella, Shias developed their own outfits, and various other splinter groups were formed across Afghanistan on linguistic, territorial and sectarian grounds. As a result, Afghanistan was sharply divided. These divisions in Afghanistan also had their repercussions on Pakistan, and the entire nation saw with awe and anger the emergence of Sipahs and Lashkars in the country.

TNS: People say the Soviet invasion of Afghanistan posed a threat to the security and solidarity of Pakistan. Was it so? Also, what should have been done in that situation?

MFK: Opinions differ on the issue. But even if it did pose any danger, Pakistan should have opted for peaceful political and diplomatic channels to deal with the situation. Dialogue with the USSR then would have been useful; it certainly would have allayed Soviet apprehensions on our role in Afghanistan. Probably it would have withdrawn its forces once an independent, impartial or non anti-USSR Afghanistan had been guaranteed. Militant option could have been used, but only as a last resort and after a sovereign government in exile and combined army had been formed. But what Zia did was nothing short of dividing the unfortunate land into many states. The Afghan model was bound to fail. It would invariably turn into a nightmare. Afghan parties were funded separately; each established its strong bastions and no-go areas. Each of them could now challenge the authority of the state. Mind you, when an organisation of people gets money, weapons and authority to rule within a specific area, as they were, it becomes a state within itself.

TNS: Recently there has been a phenomenal increase in suicide bombings. Which elements are involved in the development of the syndrome?

MFK: Suicidal attacks are basically a sociological phenomenon. They are an outcome of extreme frustration, depression and reactionary approach. Many incidents of suicide attacks are cases of misguidance. There might be some exceptions, but normally people coming from poor and broken families, puritan groups, and some traditional as well as revolutionary outfits adopt this course. The US aggression against Afghanistan and our support to the so-called 'war on terror' have also led supporters of the Taliban to blow themselves up to harm our security personnel. Also, when democracy, tolerance, education and justice are neglected in a society, extremism and terrorism will invariably emerge. We all have witnessed how far election-related differences were dragged in our society in not very distant past. Again, human beings are endowed with spirit of sacrifice. When this spirit couples with reactionary psyche in humans and with frustration, even some normal people may conclude that suicide bombing is the best way to take revenge. While they may be right in their political analysis, they are wrong when it comes to the strategy they adopt. This spirit of sacrifice is itself not bad. It needs to be channelised in the right direction. They should be taught that solution to all our problems lies in our non-reactionary, patient and judicious approach to world problems, and in excelling in education. Hopefully, extremism and terrorism will weaken with the passage of time. The final victory is for the non-violent struggle, though it may take some time.

TNS: How do you analyse the policy Pakistan chose after 9/11? What would have been the ideal option for Pakistan in that scenario?

MFK: Musharraf's Afghan policy was a blunder, rather a crime, that greatly harmed our national interests. If Zia had gifted the Heroin and Kalashnikov cultures to our polity, Musharraf with his injudicious decision to join the US-led coalition brought with it the scourges of suicide bombings, terrorism and countrywide tensions. Turkey's strategy vis-a-vis the so-called 'war on terror' was the best and Pakistan should have learned from it. The US requested the Turkish government for logistic support in Afghanistan. The latter agreed in principle, but said it would take the issue to the parliament for a final decision. The Turkish parliament rejected the US request and that's all. Though the parliament was suspended then in Pakistan, Musharraf could also have bought some time -- to convene a national meeting of all political, religious, social and media groups and figures -- to chalk out a proper plan of action, but he surprisingly okayed the US 'request' such a haste that it surprised even the US administration. Pakistan offered its support and services in return for money, which was wrong because the US would definitely seek explanation for the money it gave. We should have told the US that our polity and the region would be endangered if we joined the 'war on terror'. We could also have sealed and fenced our border to block infiltration to and from Afghanistan. Anyway, we should have avoided practical involvement in the so-called 'war on terror'. However, Pakistan joined the US-led coalition and announced war on al-Qaeda and the Taliban. The Tehreek-e-Taliban Pakistan (TTP) also followed suit, took up arms and started attacking Pakistani troops. Coming to the second part of your question, I think that we should seek only working relationship with the US, and avoid both friendship and enmity with it.

TNS: Do you think that the TTP is justified in its struggle against the Pakistani troops?

MFK: Not at all. I was analysing the whole situation. I tried to make the point that the Musharraf administration fired the first shot in this connection when it joined the US-led coalition. The Taliban only retaliated, but that does not mean that they are justified. Islam is against reactionary approach and vigilantism.

The impact of political uncertainty, foreign threats and economic mismanagement are well documented, and are an unfortunate reality of our daily life. The present government's response to the ongoing economic crisis has been criticised as half-baked and bordering on incompetence. Regardless of the fact whether these policies are good or bad, they share a disturbing similarity with those of the past -- they suffer from 'short-termism'.

Populist policies, rather than rational economic decision-making, are to be blamed for the economic mess that the country currently faces. Today, the government has to implement harsh economic measures, the brunt of which falls on the most vulnerable sections of society. Now, such measures may be justified when they result in economic improvement and betterment in the quality of life of those who suffer the most. Here lies the problem. Today's economic policies aim to 'recover' the economy; that being said the use of the term 'recover' assumes that the previous state of the economy was somewhat admirable. Unfortunately, today's chosen economic imperatives are likely to lay the foundation of future economic pressures. Economic policy is not only short-termed in its results, but also in its objectives; state policy lacks the foresight and the vision to offer a direction within which to take the economy.

The enthusiasm for developing the Thar coal reserves is a classic example of policies that aim at quick fixes. Going down the route of extracting coal for the generation of electricity is likely to lead to massive environmental problems as witnessed in all countries that use coal to produce electricity. China is a classic example where most of the electricity is generated using coal reserves and imports. However, the economic cost of generating electricity using coal is estimated to be more than $1 trillion for China alone.

While the argument that the Thar coal reserves would help to provide cheap power is justified, the economic cost of environmental degradation, as well as the shadow costs in the form of preventing and treating health problems, may in the long-run be an added burden. Pessimistically, such concerns are likely to be ignored, because those who shall benefit from the development of the Thar coal reserves are unlikely to bear the brunt of the damage caused by its development.

Living in an age of increasing commodity prices, one may question as to why state policy is pushing for the development of fossil fuels as an end all initiative. The development of hydro-power, for example, understandably takes much longer; however, the scale economies offered by alternative energy -- such as wind, tidal and solar power -- are more economical than leveraging coal for power use. I am not implying that the Thar coal reserves should not be utilised; what I am questioning is the wisdom of using coal as a long-term energy source, while alternative power sources are quickly developing.

Pakistan runs the risk of investing so much time and money in the development of one sector of the energy mix that, regardless of its efficiency or effectiveness, we will be forced into using it. One may recall the tariffs offered to the international power providers (IPPs) in 1994 and how they were renegotiated in early 2000. The government had little leverage in relation to the IPPs, because investment had come in and we had already become reliant on the energy they produced.

In the 1970s, when oil prices increased dramatically, the West responded by building motorways, encouraging efficient driving and more fuel-efficient cars. We see little of that in Pakistan. Granted that we do not have the resources for such grand measures; but, car producers in the country who have known political links have insured that there remains little technological improvement while prices remain prohibitive. It is amazing how, for example, today the government and oil producing companies lock horns over profit margins. One must ask as to why the efficiency of a pricing formula was not simulated at various price levels? In short, whatever we face today could have been avoided.

The plague of short-term measures is even clearer in the fields of education and health care. The government continues to focus on higher education, while greater social benefits and economic efficiency are gained from massive investments in the basic education. Deteriorating health care erodes the efficiency of the very labour that our planners would hope contribute to the nation's economic growth.

I believe that the source of all these problems, including the examples given above, is the grandiose nature of political posturing in our country. We, as a society, tend to judge the effectiveness of politicians on the basis of whether they have delivered on grand tangible promises. A government in Pakistan that claims to have made a motorway is likely to be viewed more favourably then one that claims to have improved the quality of education. The implications of this are clear in the development of a vicious cycle of short-term measures to serve short-term goals. This is why we find ourselves in a situation where villages have on paper been electrified, but there is no electricity there. Our economic planners do not only lack consistency, but they also tend to ignore the long-term benefits and costs of decisions. The question then arises as to where state policy should go from here? Should we ignore long-term costs for short-run gains? Importantly, why are social pressures not created to evaluate the quality along with the quantity of policies? Why should money be spent on higher education when the benefits only accrue to a minute part of the population? One feels that grandiose projects and short-term measures create the incentives for corruption and graft that would otherwise not be possible.

Economists tell us that trade deficit is not inherently a vice, nor is trade surplus necessarily a virtue. Economists apart, every government seeks to minimise trade deficit and achieve trade surplus -- 'favourable trade balance', as it is commonly called. The basic policy framework for attaining this goal is trade policy. Though it may seem paradoxical, favourable trade balance is normally not -- and should not be -- the primary objective of a trade policy, because it can be achieved simply by restricting imports to such a level that they do not exceed exports. World Trade Organization (WTO) rules also allow a country to restrict imports to deal with the problem of balance of payments.

The problem with a trade policy designed exclusively to correct the problem of balance of trade is two-fold: restricting imports will hurt trading partners, who may retaliate by adopting similar measures; restricting imports may adversely affect other government policies and priorities, such as that of generating revenue, maintaining growth momentum, and providing commodities to consumers and capital goods to businesses at cheaper prices. Hence, a trade policy is formulated in the light of overall macroeconomic objectives, and not merely with a view to correcting the problem of trade balance.

On its part, the general macroeconomic situation of the country largely determines effectiveness of a trade policy. For instance, high inflation increases the input cost of exports and makes them less competitive. A tight monetary policy formulated in response to high inflation pushes up interest rates, which discourages businesses from stepping up investment. Similarly, a large fiscal deficit forces the government to withdraw subsidies, which also affect export prices. Moreover, fall in the value of the domestic currency vis-a-vis foreign currencies tends to make exports cheaper and imports expensive. This interaction between trade and non-trade factors lies at the heart of the formulation and implementation of a trade policy.

Can the same be applied to Pakistan's Trade Policy 2008-09? Announced last month, it aims at poverty alleviation and job creation through increased exports, whose target has been set at $22.1 billion. This will be done by promoting exports of high unit value products, increasing competitiveness of exports, diversifying export product portfolio and markets, pursuing aggressive trade diplomacy to secure preferential market access for exports, improving market intelligence and export marketing, capacity building of exporters to enable them to comply with product quality and standards, promotion of small and medium enterprises, cluster development, and increased incentives to exporters in the form of duty and tax remission and export finance schemes.

No import target has been set in the Trade Policy 2008-09 and rightly so, because that primarily would have meant restricting import of capital goods and raw materials at the cost of economic growth. The import strategy aims at narrowing trade deficit, increasing export competitiveness and ensuring food supply. In order to reduce input price for exports, another 136 items have been added to the 'positive list' for India. Most of these are raw materials and capital goods, including mining equipment. Import of stainless steel and cotton yarn from India by road has also been allowed for similar reasons. This is a welcome move, because if something is available from India cheaper than elsewhere, there is no reason the same should not be imported.

The trade policy comes at a time when the economy is passing through a turbulent period, courtesy a combination of hostile international and domestic factors. World prices of oil and food have shot up, accompanied by a slowdown in the country's single largest export market -- the United States. Domestically, high inflation, a tight monetary policy, energy crisis and political uncertainty have pushed up the cost of doing business, adversely affecting export competitiveness. These factors have contributed to the record trade deficit of $20.7 billion. In 2007-08, though exports grew by 13.23 percent to reach $19.22 billion, imports increased by 31 percent to register at $39.97 billion. In value terms, imports went up by $9.42 billion. Because of lackluster performance of the major crops, such as wheat and cotton, in the last fiscal, imports of food items also went up.

In addition to these factors, there are some structural problems preventing substantial increase in exports. To begin with, the problem of a narrow export base persists. In 2007-08, four items -- textile and clothing (T&C), leather goods, rice and sports goods -- accounted for more than 72 percent of total exports. The share of only T&C products was about 60 percent. The country's dependence on the T&C sector for export revenue has an obvious disadvantage, because for the last many years its share in global merchandise exports has remained less than six percent. Thus, our exports overwhelmingly depend on a sector that has both a low and stagnant share in the global trade. Having said that, Pakistan's share in global T&C exports is less than three percent, which shows enormous potential for increase in export of these products from Pakistan.

As for the lack of market diversification, the 27-member European Union (EU) and the US account for more than half of Pakistan's total exports. The economic slowdown in the US and high tariffs that these markets have imposed on T&C imports also underscore the need for market diversification. Moreover, Pakistan's exports are heavily dominated by low-technology products, whose share in total export earnings exceeds 85 percent. The share of medium-technology products in exports is less that 10 percent, while that of high-technology products is negligible. The greater the value addition, the higher the prices exports fetch in the international market. Since high-technology products embody the maximum value addition, countries relying on such products have high export earnings and rising market share.

A country's export performance reflects its state of industrial development. Pakistan has a narrow export base and is primarily an exporter of low-technology products, because this is what the domestic industry offers. Hence, industrial development is the most important prerequisite for substantial increase in our exports. A capital scare and technology deficient country like Pakistan needs foreign investment in the manufacturing sector to expand and upgrade its industrial base. Unfortunately, though we have received a lot of foreign direct investment (FDI) in the services sector, such as financial services and telecommunications, there have been meager FDI inflows into the manufacturing sector.

Another major structural problem is low labour productivity, because human resource development has traditionally been a neglected area in Pakistan. Workers are potentially an organisation's greatest asset and no organisation can compete successfully if its most valuable asset remains under-utilised. This calls for making greater investment in the capacity building of the workforce. One misconception needs to be dispelled here: it is widely believed in the developing countries, including Pakistan, that low wages are the key to competitiveness. No doubt, low wages may help bring down the cost of production; the advantage will be offset if labour productivity is also low. What really matters is the final productivity of labour. This is borne out by the example of the developed countries, which have achieved competitiveness not by reducing wages but by increasing labour productivity. Thus, the focus of our entrepreneurs should shift from keeping wages low to raising labour productivity.

Next on the list is lack of product quality. A word of warning is in order here. An enterprise may offer 'quality' goods but still fail to sell them, because they do not pass the test of consumer expectations. Therefore, it will be a strategic mistake to define quality in terms of the producer or supplier, rather than the customer. Quality means creating value for the customer. The greater the value the customer attaches to a product, the higher its quality. Customer value, however, is relative. One customer segment may attach greater value to product design, while for another product durability may be more important. This means an enterprise cannot create customer value or quality without identifying the potential customers and studying their needs.

Ensuring product quality entails compliance with both product safety and health standards. These include environment standards, as well as those dealing with protection of human, animal and plant lives. In the case of Pakistan, most exporters believe that tariffs are the only barriers to market access and after the same have been reduced, they can sell their products. Hence, they do not attach much importance to product quality and standards until their consignments are rejected for lack of compliance. No doubt, at times these standards are very difficult to understand and comply with. The exporters, however, need to overcome this problem with the assistance of the government.

The new trade policy addresses most of the structural problems with which our exports are confronted. This is what every trade policy does, but often without much success. The reason, as mentioned earlier, is that the effectiveness of a trade policy is contingent upon factors that largely are beyond its scope. Arguably, the most important of these in the case of Pakistan is the supply-side constraints. A country's export performance is as good or bad as its industrial performance. Therefore, in short, the success of the present as well as future trade policies depends on effectiveness of industrial policies.

Effectively using the energy and potential of youth is important for a country's development. Young people can serve as an asset for any country; however, if they are not provided with ample opportunities and their energies are not channelised properly, they can easily disrupt the social order and become a disadvantage. In this context, it is unfortunate that Pakistan -- one of the 15 largest countries in terms of population, with 70 percent of its population under the age of 29 -- has been unable to engage its youth in the country's development.

Pakistan currently has the largest number of young people in its history, presenting the most promising resource for the country's development. According to the 1998 census, 64.87 percent of the country's youth resides in rural areas, while the remaining 35.13 per cent in urban areas. If proper guidance and opportunities are provided, these young people can bring about a socioeconomic and cultural revolution in the country. There, however, is a need for developing not only functional but also their personal capabilities to enable them to contribute effectively to the country's development.

Despite huge prospects, the potential of youth has never been fully exploited in Pakistan. Increasing population has only been viewed as a burden on the country's economy and the opportunities offered by it have always been overlooked. In fact, economic and political policies have not been formulated in a manner that they could accommodate the current youth-dominated population pattern. Similarly, well-planned and focussed opportunities have not been provided to the youth to ensure its participation in politics and economy. In the absence of such measures, various policies implemented over the years have not only increased unemployment among the youth but have also widened gender disparity.

Youth participation has not received importance in Pakistan, both at governmental and societal levels. Decision-making processes have largely excluded young minds, which may have thought about new ideas that are needed in every sector. Besides this, most of the country's youth lives in rural areas that the policymakers have almost always ignored. Therefore, the future does not offer much hope to a vast majority of the country's youth. It is unfortunate that the Pakistani youth is becoming part of a culture marked by terrorism, violence, drug abuse and lawlessness. These conditions have led to a chaotic situation in the country, with the public confidence shattering in the government's ability to ensure law and order, and provide basic amenities of life to them.

There, however, seems to be some realisation on the part of both government circles and donor agencies lately, because they have started taking some steps in the right direction. For instance, the government has introduced internships and diplomas for the youth. There also have been some private initiatives in the political sphere. For example, the Youth Parliament was established by an independent research institute for creating awareness among the young people regarding the country's political affairs, and for encouraging participation and input from them. Though these are steps in the right direction, the youth needs to be given more powers, especially regarding decision-making on issues and problems related to it.

Formulation of a youth policy by the government would have been an important step in this regard; however, even more important would have been its implementation. In short, proper utilisation of the potential of youth will help in the country's socioeconomic development. An important issue currently facing Pakistan is that of providing greater job opportunities to both the educated and uneducated youth. The private sector has helped this situation to some extent by employing the skilled labour.

Despite these efforts, there still are many problems that the young people in Pakistan are faced with and only solving them can ensure their participation in the country's development. First, the education system in the country has failed to equip the youth with creative and research-based faculty, making it dependent on existing trends and norms, rather then thinking about innovative and dynamic ideas. This has resulted in lack of direction and motivation among the youth, which has become an easy prey to disruptive activities and elements. Lethargy is becoming a norm among the young people, and they have started looking for instant benefits and shortcuts to success. Such individuals need career counselling, for which opinion leaders and the media should play their due role.

We should not forget that, along with many shortcomings, there also have been some remarkable achievements by the country's youth in various areas. For example, 45 Pakistani students achieved distinction in O' and A' Level examinations of the University of Cambridge in 2006. Young Pakistanis studying abroad have secured top positions in some of the best universities of the world. Similarly, the Pakistanis working with the world's biggest multinational corporations have proved their worth.

At the national level too, the trend of higher education is increasing among the young people and new areas of study are attracting their interest. In the political sphere, many young people currently are members of the National Assembly and the four provincial assemblies. One, however, feels that more youth representation from the middle class and rural areas is needed for solving the problems of masses. Moreover, the youth itself will have to set the direction for its future by using the available opportunities efficiently.

Participation by the youth in politics at the grassroots level can also revitalise the democratic norms in the country. Additionally, this can bring in fresh and new perspectives to improve the state of affairs. Both the government and the society must understand the requirements of young people, and provide them with incentives and opportunities to enhance their abilities. Moreover, youth participation and involvement in all state affairs must be ensured and proper channels must be made available to them for using their energies positively. Similarly, the education system must be reviewed and skill-based education must be imparted, particularly in the rural areas.

It is high time to ensure maximum participation of the young people in all fields of national development and to direct their energies towards constructive tasks. With the International Youth Day to be celebrated on August 12, there is a pressing need for reinforcing the government as well as the society's commitment to focus on effective youth participation in the country's socioeconomic development. The occasion also calls for recognising the potential of young people and celebrating their achievements.

(Email: sibtainrazakhan@yahoo.com)

The government's Health Policy Task Force (HPTF) has notified a working group to devise good governance policy guidelines for the health sector, which would form part of the upcoming fourth National Health Policy. A very timely step indeed, because globally government-provided health services are under increasing pressure to provide value for money, to be more responsive to the needs of the citizens, and to be held accountable for promised outputs and outcomes. These are the areas in which the public sector is seriously failing. Consequently, despite substantial inputs and enhanced allocations, government health facilities are suffering from severe quality problems, inefficiency, inappropriate financial management and information systems, poor responsiveness, and low staff morale.

The government has been spending a ballpark figure of 0.6-0.9 percent of the country's gross domestic product (GDP) and 5.1-11.6 percent of its development expenditure on health over the last decade. A consensus, however, is evolving that merely the expansion of a system -- irrespective of the amount of resources allocated -- will never be able to deliver the desired outcomes unless fundamental changes are introduced in the way health care is managed in the country.

It is clarified at the very outset that no criticism of individuals working in the public sector is intended; in fact, it is the system that is responsible for employees behaving in a certain way. Such discernments are common to the hierarchical bureaucratic systems globally. "It is as impossible to run an effective hospital 24x7x365 working within the government bureaucratic system, as it is for a sea water fish to thrive in a fresh water aquarium," Dr Potter, a British management expert, contends.

Globally, the service delivery by governments is seen as too big, inefficient and wasteful. Such concerns led in the developed countries to 'uncoupling', aimed at separating policy and regulatory roles of governments from their service-delivery roles. These reforms were initiated with the primary objective of allowing governments to focus more on their core policy functions -- such as determining 'the right things to do', while decentralising and devolving service delivery functions to different set of mangers charged with the responsibility of 'doing the right things the right way'.

Based on these principles, the Thatcher party's public sector management reforms in the United Kingdom during the 1980s resulted in savings of about $400 million, despite the fact that in British civil service there is a high degree of professionalism and meritocracy. Economists have argued that such public sector's management reforms in Pakistan could save about Rs100 billion annually in the short-term only. It is ironic that currently for every rupee of tax collected, the government incurs Rs1.50 on overblown administrative expenses. Imagine a factory earning Rs1 trillion, but with the head office expenditures of Rs1.5 trillion.

Understanding the ills of the present health care system requires looking back into the historical context. The system inherited in 1947 from the British colonial period was designed to provide curative health care services for subsets of the population; for example, colonial administrators and their families and a privileged group of nationals. It was not tailored to meet the mandate pledged to in the 1973 Constitution. Moreover, the present health administrative system is based within the overall framework of civil services that was designed to preserve law and order, collect revenues and provide few basic services. This hierarchical system was meant for control and status quo, and was never designed to promote citizen participation in the affairs of government, nor was there an emphasis on economic development and social change. Unfortunately, that colonial or vice regal mindset continues with the system encouraging 'yesmanship' and discouraging entrepreneurship.

The system in place promotes ambiguity, because it lacks explicitness and transparency, which are the essential components of good governance. Junior officials' use of the term 'the undersigned' and the higher officials' use of the term 'the Competent Authority' helps them conceal their real identity. Thus, the 'Competent Authority' remains invisible and subordinates sign the document. In short, this setup is only adept at manipulating fragile egos. In fact, the support staff at ministries and departments has a parasitic existence, sustained by a mindset to provide employment sans performance.

The Rules of Business, 1973, Government of Pakistan, protect and nourish their failings and predicament. There are usually six tiers of control at the ministerial level, each obliged by the law to handle every input made to the ministry. The rules permit three days for processing every correspondence, which means 18 days for a correspondence to go across from the bottom to the top. Since the volume of correspondence normally exceeds the capacity to process by many times, bulk of it is shelved indefinitely, until political 'emergencies' send officials to dig these out from the pile. A bigger problem is that decades of patronage-based employment and inattention to skill undermined the work ethic and created an entitlement culture, in which status concerns outweigh concerns about service to the public.

With emphasis on inputs and processes, public sector employees traditionally tend to produce as many units as possible in a mechanical way within a given budget. Some experts even argue that a public agency provides a good or service at least two or three times at the cost at which it could be provided by the private sector. A retired chief executive of an important government agency shares his experience in a lighter vein that it takes at least six phone calls and three attempts at unreliable fax machines to get a two-pager across to a decision-maker's table. If one begins at 10 am, s(he) would be lucky to get the two-pager on the recipient's desk by 4 pm. In comparison, communicating with a senior official at the World Bank in Washington normally takes less than half an hour.

No comprehensive approach has ever been adopted to address the issue in a holistic manner. Due to non-existence of explicit governance policies for the health sector, governance is defaulting to a laissez-faire position. Nature abhors vacuum and, in such cases, natural socioeconomic forces shape (read distort) the system. Patients purchase health care according to their ability and willingness to pay. As a result, a monopolistic, high-cost and provider-driven health services market has emerged to the detriment of the masses' health. Only 15.5 percent of people go to a government hospital for the first outpatient consultation, while the rest consult other providers, including the private ones.

The HPTF would do a great job by diagnosing and solving systemic problems requiring major surgery, rather than treating institutional symptoms. The traditional response to the problems to increase expenditure should be shunned. The government should take the emerging scenario of acute health care and hospital services into account while planning further (often unnecessary) expansion in brick and mortar. With modern technology, patients are increasingly being maintained in the community with support from a hospital; and even sophisticated surgical procedures can now be done without an overnight hospital stay. In future, a growing proportion of procedures will be undertaken on a day-to-day basis and ambulatory day care centres will become increasingly important components of health care. The trend in the developed countries is towards closing hospitals and reducing beds, while we are building roads and providing transport facilities to ensure health care access.

Similarly, the health care delivery system in Pakistan needs reorganisation, based on evidence and modern management principles, with the government focussing more on its core function of policy and regulation. Uncoupling of policy and regulation functions from service delivery functions would modify the government's role as a guardian for its citizens' health. Service provision should occur through harnessing the potential of the private (both for-profit and not-for-profit) sector, albeit with public finance.

Hospitals should be made autonomous bodies allowed to do their own day-to-day decision-making. Rural health services should be devolved by introducing family physician / general practitioner system as a gatekeeper to secondary and tertiary teaching care hospitals, thereby decreasing load on them. Health institutions should be reorganised and the seniority system be abolished in favour of relevant qualification and experience for the job. There should be a complete moratorium on new construction of medical facilities in the public sector, because old wisdom advises that when you discover you are riding a dead horse, the best strategy is to dismount.

Kofi Annan, former Secretary-General of the United Nations, defined the information society as that through which "human capacity is expanded, built up, nourished and liberated, by giving people access to the tools and technologies they need, with the education and training to use them effectively." This powerful statement underscores the importance of the information and communication technologies (ICTs) as the tools that empower individuals and society at large to bring about liberty and choices.

The urgency of development today is to employ ICTs to level the playing field for all; however, there is disparity in ICTs diffusion and use between industrial and developing countries, rich and poor, men and women, and urban and rural areas within individual countries. This 'digital divide' is the deepest viz-a-viz the gender dimension, because access and use of ICTs is not an available option with a large number of women in the developing world. This exclusion restricts them from enjoying the benefits of mainstream economic, social and political advances, which otherwise ICTs have brought in their countries.

Gender digital divide is worthy of some attention in Pakistan's scenario, which ranks 135th out of 177 countries, even below Myanmar and Bhutan, compared at the United Nations Development Programme's (UNDP's) Human Development Index (HDI). Along with the HDI, the UNDP has employed two gender-specific indicators: the Gender Related Development Index (GDI), which measures the HDI in the context of inequalities between women and men; and the Gender Empowerment Measure (GEM), which measures gender inequalities in selected areas, such as disparity in income and share of seats in the parliament. Out of 156 countries studied for GDI values, 151 have a better ratio than Pakistan. Similarly, out of 93 countries ranked for GEM, we are at the 82nd position.

What these statistics translate for the country is that while the majority of Pakistanis do not have access to health, education, clean drinking water and other amenities, the women form a further marganalised group. Even after embracing information technology for more than a decade, Pakistan lacks a baseline research about the extent of the gender digital divide, including a deep understanding of gender gap issues with respect to access to ICTs. There are numerous examples from across the world where countries and communities have deployed technology in an innovative way, and have empowered and educated women in the rural areas. But why go far? Let me cite two cases from our neighbourhood and discuss the findings in Pakistan's context.

In Afghanistan, prior to 2005's parliamentary elections, a non-profit organisation Voice for Humanity (VFH) delivered 41,000 hand-held, simple to navigate, solar-powered, mp3 player-like devices to local population in four districts. Half of the devices were coloured in pink and given to women (pink colour was chosen because it would become socially difficult for men to carry it). The device was called 'Sada', which stands for 'voice' in Dari language. The idea behind such a device is that two-thirds of the world comprises 'oral communicators' -- they are non-literate or semi-literate, and prefer information in oral or visual way; hence, they cannot use ICTs the way literates can do. Sada was produced in Afghanistan in Dari and Pushto languages, and consisted of 15 hours of civic education material that promoted peace, democracy, civic engagement in parliamentary elections, women's rights, and health and rural development issues.

An analysis of the project regarding the use of Sada found the respondents at ease while using the device, since it was solar battery-powered and had only three buttons for navigation. Similarly, Sada had no restriction on signals or network, because the content was pre-fed. Thirdly, and most importantly, the content of Sada did not seem to offend culture and religion of the respondents, especially the male members of the household. The introduction carried verses from the Holy Quran, which in the words of one respondent made her believe that "it contained something good". An analysis revealed that 96.5 percent of women said the Sada programme was useful in helping them to learn more about the constitution, national elections and the future of Afghanistan. One out of four women said before listening to the Sada programme, they did not intend to vote in the presidential elections. However, after listening to Sada, only one out of 20 said they did not plan to vote.

In another instance, D.Net (Development Research Network), a non-profit organisation based in Bangladesh, researched that ICTs added a new dimension of divide between the rich and the poor. D.Net found this assessment relevant to the rural Bangladesh, where women were heavily deprived of access to information and were dependent on the social system of superstitions and traditional belief systems. D.Net started Pallitathya Programme with a research on understanding information needs from a village perceptive. It took advantage of penetration of cell phone in 80 percent villages and decided to use mobile phone as a 'Last Mile' access instrument. A 'Help-Desk' and a 'Help Line' were established.

Help Desks were manned by operators equipped with ICT-based system to respond to queries related to the rural livelihood. Help Desks were given local language database system, which was used for searching of answers to the questions and dissemination to the villagers. The second objective was to give access to rural population to this Help Desk. For this purpose, the Help Line deployed intermediary women in four villages around Dhaka as 'Mobile Operator Ladies', who move from door to door to enable villagers -- mostly women and especially housewives -- to ask questions related to livelihood, agriculture and legal rights via a mobile phone. The queries are responded by the Help Desk operators at D.Net, Dhaka. The Mobile Operator Ladies get a monthly salary from the D.Net and also a part of the revenue generated from the calls to the Help Line.

During the initial months of the programme, it was found that 48 percent of the total users were women and that housewives represented the biggest group of users. Mostly questions related to health issues, especially gynaecological problems, were asked by them. This is a manifestation of the rural Bangladeshi society where women do not have access to medical information, and whatever information is available comes through the man of the house. From a gender empowerment perspective, the Pallitathya Programme claims to have achieved the following objectives: it has developed information service delivery in a cost-effective, easily-scalable and affordable manner; it provides information services that have minimal to absence of gender bias; it challenges age old perception of gender roles in the Bangladesh society; and it challenges the notion of women as a relatively unimportant client group for information services.

Successful case studies, particularly the two mentioned above, can be studied in Pakistan-specific context, and there are lessons to be learned. First and foremost, the ICTs policies need to be engendered, as in the case of Sada. Technology is wrongly assumed as gender neutral. This unconscious non-realisation of gender inclusion in ICTs policies hinders equitable benefit distribution. Secondly, there exists a huge gender specific gap in the access to communication infrastructure in Pakistan. Infrastructure exists mostly in the urban areas and this infrastructure deficit coincides with the gender demographics. Since men have the opportunity to travel to urban areas, it is the women who mostly live in the rural areas for they have to look after the family and elders and, thus, do not have access to ICTs infrastructure.

Thirdly, a large part of our society and culture does not approve of women having access to technology. Cyber cafes and rural tele-centres are exclusive male domains. TV and radio content, where ever available, are regulated by the male members of the family. Even the places with considerable mobile phone network diffusion do not have sizable proportion of female users. Fourthly, compared with men, women in Pakistan, as indicated by the GDI and GEM, have less access to education and vocational skills. This deprivation robs them of the ICTs benefits, even if the technology infrastructure is present. And lastly, majority of ICTs-led initiatives concentrate more on the hardware and less on innovation.

In Pakistan ICTs are often misconstrued as something to do with the computers only. This misplaced emphasis misdirects investment on hardware but the same equipment rots around, because in most of the cases there is very little or no electricity to run them, or not enough money to sustain them. The equipment is expensive and impossible to use by the rural, less literate population. Nicholas Negraponte's $100 laptop experiment is an example, where most of the beneficiaries in a pilot project sold the equipment to feed children at home.