Policing for people
By Mustafa Nazir Ahmad
Feudal Forces: Reform Delayed -- Moving from Force to Service in South Asian Policing
Publisher: Commonwealth Human Rights Initiative
Price: Not given
Pages: 102
Year of Publication: 2009
It is rare that NGO publications rise above the level of mediocrity and offer concrete recommendations about a policy issue; more often than not, they abound in generalisations based on half-baked research done by expensive 'consultants'. At first glance, the report under review passes for one such project activity. However, a pleasant surprise awaits the reader, not only because the research is an outcome of a consultative process but also because the topic -- police reforms -- is extremely relevant.

Amidst the craziness that passes for informed analysis and responsible reporting in the media these days, the most urgent of tasks is to restore some perspective and start thinking seriously about long-term strategies to deal with the radicalisation of society along millenarian lines. When -- and it should be clear that there is no question of if -- it dawns upon all those who have been calling for the military solution recognise that things have only gotten worse in the wake of the scorched earth operation in Malakand, there will be more attention paid to devising meaningful political solutions to what is very much a political problem. Perhaps the following can be thought of as an outline of what a genuine political solution would look like.

A thorough reconceptualisation of the Pakistani state's raison d'etre must be the foundation stone. The fact that Sindhi nationalists have jumped on the MQM's anti-Pakhtun bandwagon along with the rather non-committal attitude of Punjab illustrates just how fragmented Pakistani society has become. If there was any doubt, it is now obvious that only serious engagement between all those who identify themselves as autonomous national groups over a brand new social contract can, in the long run, produce a peaceful and sustainable compact and ensure survival for the territory that is Pakistan.

What I would like to focus on here, however, is the question of millenarian radicalism and any possible alternative. One of the most simple, yet insightful, things I heard during an exchange with Swat refugees in Mardan was: 'Taliban aakhir hamare me se hi hain' (the Taliban are from among us, after all!). While everyone knows that foreigners are part of the insurgency, it should now be acknowledged that ultimately the majority of those who are taking up arms are very much Pakistani. It is immaterial whether Pakhtuns, Punjabis or any other nationality are the majority element. What matters is that a large number of people are drawn to militancy and this is where the crux of the long-term challenge lies.

Needless to say, part of the battle will be won if and when the state changes its conception of national security. The reason why so many of us refuse to accord any legitimacy to the military and its use of force in Malakand is because it is clear that the military refuses to change and continues to perceive that jihadis are, in the final analysis, allies of the state in the ultimate battle against India (and possibly an Afghanistan that does not do what Pakistan wishes).

It is impossible to say when the struggle against the authoritarian national security state will be won. Only after a decisive shift in power takes place away from the military to political forces will the educational curriculum, media discourse and general thrust of politics move away from the demonisation of India and romanticising of jihad.

Changes from above, however, can only go so far. Ultimately it must be recognised that millenarianism in Pakistan has played on deep-seated social hierarchies (while providing a mandate to reinforce many others, of course). In other words, sectarianisation is not just a parochial politics of hate. It also reflects that a large number of people can be made into ideologues of exclusivism, because they are on the margins and, therefore, prone to anomie. It is impossible to ignore the fact that among Maulana Fazlullah's and Sufi Mohammad's polemical targets were the big landed class. Clearly, the call to revenge upon the landed class for decades of oppression resonated among some segments of the Swati society.

Here it is necessary to note that the state has historically patronised the religious right not only as a means of achieving foreign policy objectives, but also to neuter domestic opposition. The security establishment that effectively dictates state policy has always feared organic political activity, and particularly that of the leftist variety. It was thus that the sectarianisation of politics was adopted as a deliberate strategy from as early as 1970, so as to undermine the secular and radical politics of the left.

The strategy worked, but the objective grievances that made the left a substantive political force became more and more acute. It was thus that the state-sponsored right started to talk of 'class-based education', 'imperialism' and so on. The right does not offer a meaningful alternative to the structural violence of the capitalist imperialism of our time. In fact, more often than not, it tends to depict imperialism as a primarily cultural phenomenon. But the point is that the absence of a genuine anti-imperialist politics ensures that the right continues to gain ground.

Thus, rather than the secular left, it has been the establishment party par excellence, the Jamaat-e-Islami, that has been conspicuously organising anti-America (note they are not anti-imperialist) rallies in the wake of the Malakand operation. A fairly large number of Pakistanis consider the United States to be a global bully, and they are also not particularly enamoured of the Pakistani military's pandering to Washington's every beck and call (or of the military's regular resort to violence against Baloch, Sindhi, Pakhtun and even Punjabi populations at various times in the past, as well as at the present time). If only the Jamaat-e-Islami -- or the religious right in general -- claims to represent this popular sentiment, then it is hardly surprising that young people become drawn to millenarianism.

Zia-ul-Haq's dictatorship was so destructive precisely because it had such longstanding impacts on society. Politics was transformed in an obvious sense, but also less obviously. Educational institutions were deprived of their best intellectual talent and jihadi ideologues inducted in their place. Popular discourse was made much more conservative, and, of course, public morality came to be regulated in the most hypocritical way. It will take some time for this legacy to be undone, and this will only happen if very conscious and principled efforts are made.

And here, as much as we might hate to admit it, there is much to learn from the right in terms of its cadre's closeness to the common people, the grassroots method and the populist dimension of politics. In fact, the right learned the same lessons from the left more than three decades ago. Subsequently, the left has been cut-off (or cut itself off) from the very people whose lives it claims to want to change. It is this lack of embeddedness that compels some on the left to support the military or imperialism in this gruesome war. And this is why we are losing the real war.

Jehan Ara was elected as president of the Pakistan Software Houses Association for IT & ITES (P@SHA) on Jan 1, 2008. She had previously served two terms in this capacity, from 2003 to 2006. Having an experience of 29 years in marketing, communications and interactive new media, Jehan Ara is both an entrepreneur and a social activist. Moreover, she is a strong advocate of extending the power and use of information and communication technologies (ICT) beyond pure traditional businesses, in order to empower and enable communities. She also writes for various industry publications.

As president of P@SHA, Jehan Ara was one of the key people behind the launch of the Startup Insiders initiative, which brings new graduates and young entrepreneurs in contact with seasoned and experienced entrepreneurs. The idea is based on the Bar Camp that started in Silicon Valley and has since spread around the world. Startup Insiders' sessions are held in Islamabad, Karachi and Lahore every month, and have become popular among young and aspiring entrepreneurs.

Policy advocacy through the use of cutting edge technology is Jehan Ara's passion. The P@SHA ICT Awards, Career Expo, Startup Insiders' sessions and 'In the Line of Wire' webcasts are some of the initiatives that she is currently spearheading. She also plans to launch Women's Virtual Network, an initiative that will connect educated women with potential employers, mentors and peers, thus bringing more women in the economic sphere. The News on Sunday interviewed Jehan Ara recently. Excerpts follow:

The News on Sunday: When was P@SHA formed, and what are its aims and objectives?

Jehan Ara: P@SHA was formed by a number of software houses in 1991 in an attempt to create a functional trade association for Pakistan's information technology (IT) industry. Over the course of the last 18 years, P@SHA has broadened its scope to include information technology-enabled service (ITES) companies, such as business process outsourcing firms, internet service providers, call centres, system integrators, animation companies, new media firms, etc. Having around 400 members, P@SHA acts as the voice of the industry. It provides a networking platform for companies locally and internationally, and assists in accessing international markets. The P@SHA ICT Awards event, which is now in its fourth year, recognises innovation in Pakistan's IT industry. Sponsored career events and salary surveys are also conducted regularly to assist in the growth of a dynamic sector. Moreover, P@SHA member companies have gained international recognition by winning top awards in three of the 16 categories in the last Asia Pacific ICT Awards, held in Nov 2008.

TNS: Is P@SHA active in the area of policymaking?

JA: Two parallel ICT policy processes are currently in place in Pakistan -- one is spearheaded by the Ministry of IT and Telecommunications and the other by the Planning Commission of Pakistan. Neither of these is following policy frameworks, nor have all the stakeholders been consulted to ensure that the policy is a workable one. Hence, there will be no ownership of this policy and its implementation will be an uphill task. The government has introduced some good laws too, like the Electronic Transaction Ordinance. More recently, however, the government introduced the Prevention of Electronic Crimes Ordinance, about which we have serious reservations because many of the definitions in this law are incorrect and do not coincide with what exists elsewhere in the world. Vast search and seizure powers have been granted to law enforcement agencies with no safeguards built in. In its present state, it will not assist the Federal Investigation Agency (FIA) in countering crime, but will instead result in innocent users of technology ending up in jail and criminals roaming free. The law needs to be re-drafted in line with international best practices. In the last couple of years, the federal budget has totally ignored the IT sector; not even a single rupee was allocated for its development. Therefore, P@SHA has given suggestions for the forthcoming federal budget, to be presented on June 13. The salient ones include: Exemption from 6 percent services tax for IT and ITES providers; removal of general sales tax (GST) on computer hardware and parts; provision incentives to the textile and manufacturing sector and other small and medium enterprises (SMEs); increased budget allocation for capacity building; budget allocation for participation of IT and ITES companies in large international exhibitions; exemption of buildings that have been designated as software technology parks or those that predominantly house IT companies from load shedding and power outages; grant of export promotion zone (EPZ)-status to buildings that house software and service companies but exist outside these zones; inclusion of 'Internet Studies' as a subject in Classes 9 and 10; establishment of incubation centres; and awareness among staff of Pakistani embassies and consulates worldwide about the potential of the local IT sector. Countries around the world are preparing knowledge workers. Pakistan, with more than 60 percent of its population comprising youth, also needs to capitalise on this resource. By concentrating on providing the country's youth with a good education, we can prepare an excellent workforce of knowledge workers. For this, however, a lot more emphasis needs to be given to integrating technology with learning.

TNS: What is the status of software development in Pakistan?

JA: Pakistan's IT and ITES industry has been growing at a rate of 40-50 percent per annum for the last five years. According to research conducted for P@SHA by Technomics, a UK Consulting firm, the overall industry size is $2 billion, of which exports constitute almost half. There has been a 41 percent growth in employment and the number of women in the industry has grown by almost 14 percent. The larger companies are generating $15-20 million in revenue and their growth rate is around 30 percent per annum. However, this growth is overshadowed by that of India, though the situation is very different in the two countries. India is a much bigger country than Pakistan and, thus, it has the 'first mover' advantage. The former has also invested heavily in education, especially in the areas of engineering and mathematics. There is a lot of turmoil in India, but it is good at image building and crisis management. It has also been able to distract investors and customers with the likes of the 'India Shining' campaign. However, rapid growth has resulted in enormous weak links in the Indian IT sector. Unfortunately, the country has failed to work on its image building. Hence, ev whatver happens in Pakistan is blown out of proportion and people forget about the expertise that exists here. This is because we are still a small and growing sector compared with giants like China and India. Moreover, many Pakistani companies have had to open up their offices in China, Malaysia, the UAE and the US to serve their customers better, and to provide a business continuity and disaster recovery option. What we need is public relations offices around the world, so that the positive work done by Pakistani IT and ITES companies could be properly advertised and marketed.

TNS: Where does Pakistan stand in software development and export?

JA: Pakistan has been developing world class software for the local and international market, for the financial, telecom, retail and insurance sectors, in addition to providing business processing outsourcing (BPO) services, system integration expertise and consultancy services. To name a few, the Karachi-based Etilize is one of the largest content management companies in the world; Mixit Technologies provides solutions that are running on the New York Stock Exchange and more than 250 other brokerage houses in the United States; the Lahore-based Sofizar earns revenues of over $25 million per annum; Systems Ltd continues to reinvent itself to offer solutions to the apparel, mortgage, insurance and government sectors; Techlogix has offices in Karachi, Lahore, China, Dubai and Boston and clients such as General Electrics; PixSense has customers such as Vodaphone, China Mobile and Telenor; Folio 3 has produced a successful environment like Secretbuilders.com; Trango Interactive has created an animated series for the Discovery Channel; TPS has changed the way the financial sector interacts with its customers; Scrybe has been interesting enough for Adobe to take a stake in it; and websites like Brightspyre and Rozee.pk have changed the way recruitment is done. Many others like GeniTeam, Chopal, See'nReport and Confiz are providing solutions for iPhone, Android, Blackberry Storm, etc.

TNS: What is the status of call centres and BPO business in Pakistan, and what is the role of P@SHA in this regard?

JA: Despite its huge potential, this sector's growth has not been as significant as was initially expected. Actually, we started off very late and at the outset connectivity was not satisfactory. In fact, a few years ago we were cut off from the world for at least three weeks. The loss of business and reputation took a long time for us to recover. We have some excellent BPO companies specialising in engineering design, content management, accounting and financial outsourcing, human resource, health care, telecom, mortgage, insurance, etc. We also have call centres that provide technological support, help desks and other back office services. In the domestic sector, we are doing quite well. However, multi-lingual call centres would provide a new area for us to enter European and South American markets. The US has been our biggest market so far, but now we have seen a huge surge in business from the Far East, the Middle East, Europe and Africa. P@SHA has been helping the government in developing policies for this sector.

TNS: What has P@SHA done in the field of telemedicine?

JA: Telemedicine can respond to some of the immediate needs of the health care system. Telehealth centres are working in those parts of the country where we do not have any formal health care system. They are connected with city hospitals where doctors and specialists are treating patients through webcams and voice technologies. So far these services are limited, but the potential for their growth is enormous. We used it very effectively in the aftermath of the Oct 8 earthquake to register people and provide quick medical assistance to those with minor injuries, so that only the seriously hurt people were taken to hospitals. A large number of amputations were avoided due to professional medical help being made available from a distance through the telemedicine setup.

TNS: What are P@SHA's future plans?

JA: We want to prepare a business development strategy for the IT sector. We are also working on providing case studies of successful companies, so that a broader branding of the sector can take place. Capacity building of companies and their teams is another area that we are focussing on. We also want to develop collateral to market Pakistan's IT and ITES industry.

The recent re-launch of an amnesty scheme, named the Companies Regularisation Scheme (CRS), by the Securities and Exchange Commission of Pakistan (SECP) has irked an active section of stakeholders in the local economy. The CRS is aimed at providing relief to those non-listed companies that did not submit their statutory returns until the due date of Dec 31, 2008, and were thus being counted among defaulters.

Under the CRS, the submission of mandatory documents with the SECP by June 30 will help these companies get regularised and removed from the defaulters' list. "But those companies that would not do the needful and continued to be found among defaulters after the expiry of the scheme would face strict legal action," warns SECP Executive Director (Registration) Nazir Ahmed Shaheen. After the expiry of the CRS, the SECP can impose a fine of Rs10,000 per document, with Rs100 per day of delay, on a company. In exceptional cases, the SECP can also proceed for a six-month imprisonment of the defaulter companies' directors and/or officers, he informs.

Shaheen calculates that the recent move of the SECP to provide relief to defaulter companies under the CRS will increase the number of companies working in compliance with rules and regulations by about 10-20 percent. Before the re-launch of the amnesty scheme, the number of Pakistani companies working in compliance with rules and regulations was 46 percent, he informs. Shaheen, however, concedes that on average 60 percent companies work in compliance with rules and regulations around the world.

"The SECP is receiving an overwhelming response to the CRS from the corporate sector, but no concrete data is available yet; how many companies have availed this scheme since its re-launch on May 15. However, when this amnesty scheme was launched for the first time in 2002, the SECP regularised 4,909 defaulter companies, Shaheen informs.

On the other hand, a representative of a multinational company, speaking on condition of anonymity, criticises the re-launch of the CRS. He says such amnesty schemes are encouraging companies to adopt a non-professional and an unethical behaviour, besides promoting the culture of irresponsibility among them. Citing the budget proposal of the Overseas Investors Chamber of Commerce and Industry (OICC), sent recently to the Ministry of Finance, he says the introduction of such amnesty schemes will discourage diligent taxpayers.

"Such policies encourage the unorganised sector to continue with the existing setup that promotes tax evasion. In this situation, the documented and organised sector suffers both financially and socially, since taxes evaders enjoy same standing as honest taxpayers. Moreover, it shows that the system will continue to prevail and there is no need for a positive shift," the OICCI budget proposal says.

The MNC representative, however, praises the SECP for dedicated efforts towards regularising companies working in various sectors of the economy He also urges strict action against defaulter companies once for all. He strongly supports the idea of documenting all sectors of the economy and believes that this should be mandatory. "This would help in making the economy sustainable and would also give an opportunity to the stakeholders to measure the challenges in the economy."

Other stakeholders, however, welcome the CRS and urge the SECP to analyse the root causes of delay in the submission of mandatory documents, so that companies do not default in future. Karachi Chamber of Commerce and Industry (KCCI) President Anjum Nisar welcomes to re-introduction of the amnesty scheme and says it is aimed at removing panic in the economy. "If the SECP had opted for penalising defaulter companies without giving them extra time to submit mandatory documents, then this strategy would have been backfired," he views.

Nisar maintains that a penalisation strategy could have mounted psychological pressure on defaulters and would have been unfeasible. The adoption of a friendly strategy by the SECP will solve the problem amicably, besides encouraging more and more companies to get regularised. He adds the KCCI plans to deliver a series of presentations on the subject to impart awareness to and motivate companies to submit their statutory returns in time. The presentations will also inform companies about the benefits they can avail after getting regularised.

Former president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Zubair Tufail, urges the SECP to remove the causes of delay in the submission of mandatory returns. Outlining reasons behind companies not getting registered with the SECP, he says the deteriorating business environment in the country is not allowing thousands of medium-sized companies to continue doing business.

"Because of inconsistent economic and political policies, it has become unviable for them to continue doing business. In fact, a large number of supposedly 'un-regularised' companies do not exist in the first place," Tufail maintains. He believes that the increasing energy shortfall and rising power tariff, as well as exorbitant interest rate on availing financing from banks, are the root causes of deteriorating business environment in the country, which has resulted in the closure of thousands of industrial units.

According to SECP spokesperson Imran Ghaznavi, about 53,000 companies are registered with the Commission, of which almost 45 percent are inactive and dormant. The CRS is applicable to non-listed public companies, private companies, associations not for profit under section 42, trade organisations, companies limited by guarantee under section 43 and foreign companies, he informs.

Pakistan Business Council (PBC) Director Research Sameer S Ameer says the regularisation of companies is a must for making the economy strong and allowing it to grow at a sustainable pace. The PBC is working in close consultation with the SECP and non-listed companies for documentation of the local economy. It is also working on the code of ethics for non-listed companies.

Ameer explains that the regularisation of companies would help them, because they would come to know about their growth patron. "The submission of mandatory documents -- such as change of directorship, number of employees, financial statements, reports of auditors and directors, etc -- is, in fact, good for companies themselves," he says. The submission of these documents will help them in future to avail financing from banks, get listed at the local and international stock exchanges, etc. Responding to a question, Ameer views that the ignorance of and negligence by companies are the major causes of delay in the submission of mandatory documents. This practice, however, shows how irresponsible some of the companies in the informal sector are.

Amid allegations of figure fudging, the economy of Pakistan is estimated to grow by 2.0 percent in the ongoing fiscal year (FY09), ending June 30. The GDP growth target for FY09 was originally set at 5.8 percent. It was first revised downwards to 3.4 percent and subsequently to 2.5 percent, following negotiations with the International Monetary Fund (IMF). Only a few days before Planning Commission Deputy Chairman Sardar Assef Ahmad Ali announced that the GDP growth rate for FY09 would be 2.0 percent, the government had put estimates for the same at 2.37 percent.

The 2.0 percent GDP growth rate will be the second lowest for the country in more than a decade; the economy had registered a growth rate lower than this only in FY01 (1.8 percent). However, even the 2.0 percent growth rate estimate has been made possible by the downwards revision of the same for FY08, from 5.8 percent to 4.1 percent. But for the downwards revision, the GDP growth rate for FY09 would have been only 0.3 percent. If allegations of figure fudging are to be believed (for instance, that the large-scale manufacturing sector has registered negative growth of 7.7 percent instead of the officially claimed 5.7 percent), the country's economy has clearly registered negative growth in the ongoing fiscal year.

The deceleration in economic growth is mainly due to dismal performance of the industrial sector, which, according to provisional data, has registered negative growth of 2.6 percent, compared with growth of 4.6 percent in FY08. The major reason for negative growth of the industrial sector is negative growth of the large-scale manufacturing sector, which accounts for 70 percent of the total manufacturing, compared with growth of 4.8 percent in FY08.

According to provisional data, the agricultural sector has grown by 4.7 percent in FY09, compared with 1.5 percent in the preceding fiscal year. The services sector, accounting for more than 50 percent of GDP, has grown by only 3.8 percent in the ongoing fiscal year, compared with 8.2 percent in FY08. One reason for deceleration in the growth of the services sector is the dismal performance of the manufacturing sector.

For a developing country such as Pakistan, economic growth is always a major macroeconomic objective. But, as the country's own experience shows, this growth has to be stable; otherwise, it will be difficult to sustain. The bursting of the bubble of economic growth just before the present government was installed exposed the essential flaws in economic policies of the previous regime, because growth did not rest on strong fundamentals, as reflected by the low level of savings and investment, high inflation and large-scale unemployment.

The PPP government was, thus, required to correct the economic fundamentals. In doing so, the economic managers put stability before growth. The agreement with the IMF also provides for stabilisation policies. Such policies, however, are not without cost. The most obvious cost is that they slow the pace of economic growth, because the government pursues either a restrictive fiscal or monetary policy or both. In the instant case, the government tightened both fiscal and monetary policies. For instance, development budget for the ongoing fiscal year was slashed from Rs371 billion to Rs219 billion, while interest rates remained on the higher side.

What is worse, deceleration in economic growth has been accompanied by persistently high inflation resulting into stagflation. Usually, there is a trade off between high GDP growth and low inflation. However, sometimes, the economy reaches a stage where this choice is no longer available. The result is increase in prices accompanied by contraction of output growth, and consequent fall in employment and incomes. In FY08, GDP growth went down from 7.0 to 5.8 percent (4.1 percent according to new figures), while inflation went up from 7.8 to 12.0 percent. In FY09, GDP growth has further slipped to 2.0 percent, while inflation has been around 20.0 percent.

Why is the country facing stagflation? This is for more than one reason. To begin with, the government pledged to bring down the fiscal deficit to 4.3 percent of GDP in FY09, from 7.7 percent in the preceding fiscal year. This necessitated drastic contraction of the public expenditure, including removal of or reduction in subsidies. While the removal of subsidies has helped in containing the fiscal deficit, it also has had some undesirable effects; the most obvious being strong inflationary pressures in the economy, which have negatively impacted both consumers and businesses.

Productivity of the economy has gone down as resources have been diverted to speculative or non-productive activities. Surge in prices of inputs pushed up the cost of production and, thus, increased the final price of exportable goods making exports less competitive in the international market. To make things more difficult for the government, the country's major export markets -- the United States and the 27-member European Union -- are in recession, which means reduced consumption and investment expenditure, thus driving down the demand for imports, including those from Pakistan.

An economic crisis breeds on itself. Economic uncertainty makes businesses shy of investment. It also results in flight of capital to markets perceived to be more stable or at least exhibiting less uncertainty. Fall in investment reduces output, employment and incomes, and drives down the aggregate demand. In turn, fall in aggregate demand reduces consumption and investment expenditure.

The only way out of this vicious circle for the government is to increase public spending, because this generates both employment opportunities and additional incomes, which in turn increase demand for goods and services. Businesses also respond by hiring more workers, which results in higher output and employment level. However, in the case of Pakistan, increase in public spending is not likely because drastic reduction of the fiscal deficit seems to be the government's top priority.

The injection of capital inflows from the IMF has saved the country from having to default on debt re-payment, made it possible to pay for imports and helped improve balance of payments (BoP) position. However, the IMF assistance is a bail-out and not a development package. The purpose is to help the country service its debt, make payment for imports and build up its reserves. However, it can be of little use in saving the country from stagflation. Instead, IMF conditionalties have aggravated the situation by making way for restrictive fiscal and monetary policies.

Finally, we come to the likely impact of deceleration in economic growth. One, when economic growth shrinks, investment level goes down, jobs are lost and incomes fall. Consequently, unemployment and poverty levels rise. The rise in unemployment and poverty further reduces the aggregate demand, resulting into lower investment demand and thus slower GDP growth. Two, increased poverty and unemployment have enormous social cost, because the affected people can become a convenient tool in the hands of destabilising forces. This is particularly relevant to Pakistan, which is facing an insurgency in its northwestern part.

Three, economic development requires sustained growth in the economy. Contraction of growth hampers development efforts, and makes it difficult for a country to break the shackles of underdevelopment and backwardness. Four, sluggish growth, especially lackluster performance of the commodity-producing sector, increases supply-side inflation. To ward off supply-side inflation, a country needs to import more, which puts additional pressure on the BoP position. This places a country like Pakistan in a dilemma. If imports are restricted (by increasing applied tariffs, for example), inflation goes up. But if increased imports are allowed and exports do not go up significantly, current account deficit increases. Finally, as economy slowdowns, revenue receipts fall.

To steer the country out of this difficult situation, the government needs generous foreign assistance. Mere re-adjustment of policies will not be enough. In the long run, no doubt, Pakistan needs to develop indigenous resources to cope with its economic problems. But, in the short run, the country needs cash inflows; just as a starving person needs food to survive before he or she can think of making a living.

(Email: hussainhzaidi@gmail.com)

development

Each year, Pakistan spends Rs900 per capita in Fata, while the average for the rest of the country is Rs2,000. Doesn't this explain all?

Pakistan is currently faced with a large-scale human displacement; the largest since 1947. Therefore, the country is witnessing an extraordinary political, social and economic situation that will have a serious impact on its social development. In the short term, the contingency will impact the budgetary allocations; while in the medium to long term, the issue of employment and poverty will resurface.

In this situation, the state has to stretch itself an extra mile for civil-military surge to fill the vacuum of governance in the Taliban-infected areas. Disinfection of fundamentalist toxicity needs both time and resources. It has been reported in the media that during the last six years, around $35 billion had been eaten by counter-insurgency measures, while $5 to $8 billion might be consumed annually on this account without an immediate end in sight. This is an enormous cost for a state that has shown suboptimal performance in governing both growth and poverty in a pro-poor fashion, let alone in a poor-centred way.

However, at the same time, the state has committed to a number of measures under the International Monetary Fund (IMF)-sponsored (read monitored) structural adjustment of the economy, which includes contractionary monetary policy, withdrawal of subsidies from electricity and cut in public sector development expenditure. Directly or indirectly, these measures will reduce growth, and increase unemployment and poverty. Allowing a slight increase in the budget deficit is the only measure of relaxation granted by the IMF for the fiscal year 2009-10 (FY10).

Standing between the devil and the deep sea, Pakistan's economy needs an extraordinary response by the leadership, which needs to make correct estimates of human misery, escalation in transaction costs due to increase in insurance premiums and other input factors. It also needs to pay heed to the requirements and management of diversion of public finance from development to maintenance of law and order.

While the current unrest in the Federally Administered Tribal Areas (Fata) and NWFP has already increased both the direct and indirect costs of running the economy, the massive outflow of internally displace persons (IDPs) is much bigger a challenge for the country than is being estimated at the moment. Most of the reports on the financial outlay for Fata show disparity in development budget allocation in comparison with the rest of the country. It has been reported that Pakistan spends about Rs900 per capita in Fata, while the average for the rest of the country is around Rs2,000.

Beyond immediate relief and early recovery, rehabilitation of the IDPs in their areas or elsewhere in Pakistan is an issue that would become, if not tackled with a long term vision, monstrous sooner or later. It is feared that most of the IDPs would slide into chronic and persistent poverty, because they will lose vital forms of their capital stock. Some of them would lose human capital, especially breadwinners; while others would lose financial capital, because their savings will be spent on transportation to escape the death traps of the war zone. Still other IDPs would have less social capital left with them, manly due to social dispersion. Many of them would also lose physical capital, such as households, and access to natural capital, which could have been available in their usual habitat.

Leaving aside disparities in development expenditures between the terrorism-infected areas and the rest of Pakistan, the loss of capital stock or assets is actually a destruction of whatever developmental gains were achieved in those areas. As argued by Prof David Hulme, an expert on chronic poverty, during and post-conflict situation, the disaster-affected persons perforce look at themselves more critically in diachronic way -- comparing their past and present -- and also synchronically while looking at others. Therefore, as a result, the issue of both absolute and relative poverty as well as inequality will resurface in Pakistan.

In the beginning of this article, it was argued that the state is trapped in the type of economic management that assumes monetarists' vision of containing inflation and fiscal deficit. This orientation does not adequately look at the developmental needs of an economy, as well as social efficiencies of public sector investments. Interestingly, for such a management, poverty reduction strategy is more about targeting the 'transient poor', rather than the 'chronic poor'. Hence, the approach emphasises the building of social safety nets.

It has been argued by experts that social safety net approach does not compensate for the absence of a well-structured social policy, and social protection mechanisms that can ensure that both the markets and public action care for the poor. In fact, such detailed mechanisms revolve around a different set of socioeconomic values. Such arrangements realise that there are different types of poverties to be attacked with different policies. The point is, with the business as usual approach, Pakistan's development orientation will fail to effectively respond to the socioeconomic and political challenges it currently faces.

It is believed that a sizable number of the IDPs may lapse into 'chronic poverty' due to destruction of their capital stock. What is needed, therefore, is a different type of social development policy framework, not only for the terror-infected areas but also for the other parts of Pakistan. Trying to control the situation with money-supply will be insufficient and risk-prone, because it will not respond to the central question of socioeconomic vulnerabilities in a long-term perspective.

In this direction of development for eradication of chronic poverty, renowned economists Prof David Hulme and Amartya Sen both emphasise the importance of poor-centred asset building, especially those assets that are resilient and show high economic returns. Admittedly, the unit cost of such a poverty eradication strategy along with targeting is high, but it is worth pursuing a goal. At this moment, Pakistan is facing a complex political and economic situation.

The unfolding spiral of poverty and inequality needs serious attention from the state. It is very important that while responding to emergencies, the central question of capability deprivation is answered. The forthcoming federal budget, to be presented on June 13, must have something to offer, so that at least the first step in this direction could be taken.

Since the installation of new governments in the Centre and all the four provinces last year, a sword has been hanging on the local government tier. Discords between provincial and local governments have been the most visible against this backdrop. The distribution of powers, authority, jurisdiction and resources has made an extremely contentious agenda that even coalition parties are unwilling to discuss. It is ironic to note that in many cases disputes have also caused frictions between provincial and local governments belonging to the same political party.

Barring Sindh, the other three provinces have already restored the old district and divisional administrative structure after some modifications. As a result, law and order and revenue collection functions have been passed on to the offices of commissioners. The Government of Balochistan has moved a step further. In the first week of May, the provincial cabinet decided to repeal the Balochistan Local Government Ordinance 2001 and approved a new statute, the Balochistan Local Government Act 2009, to be presented before the Balochistan Assembly soon. The proposed act stipulates the abolishing of existing local government institutions, and the revival of corporations and municipal committees.

In Sindh, the situation is more stable. According to a former administrator of the defunct Karachi Metropolitan Corporation (KMC), who spoke on the condition of anonymity, change is not possible in the province given the prevailing power sharing equation. Whether new elections are held at an opportune time or extension is granted to the existing local governments, Sindh cannot afford a political discord to jeopardise the coalition government in the province.

According to the makeup of our political structure, elected governments and major political parties consider local governments as an anomaly that deserves to be swept under the carpet. The political leadership considers this tier as a competing rival, not a collaborating arm. This feeling is especially widespread among those who control provincial tiers of major political parties. It is true that local government systems in Pakistan have been bolstered by military dictators for their vested interests, but this fact does not undermine their merits and the opportunities they offer.

Foremost in this respect is the creation of a legitimate avenue for leadership development. In an arena where dynastic and aristocratic claims to leadership overstake merit at every end, the only option which can enable future political leadership to emerge is that of local governments. There are hundreds of case studies of councillors, women / labour councillors, union council nazims, town / tehsil / taluka nazims and district nazims who were able to win their offices purely on merit and later proved their popularity through re-election.

Even in the most dangerous parts of the NWFP and Balochistan, these dedicated public representatives made tireless efforts to solve pressing public problems. Some of them did not have any political support, and they had to face the wrath of both right- and left-wing parties. The two local government elections, in 2001 and 2005, were adequate tests of their performance, malfunctioning of electoral process notwithstanding.

It is disappointing to note that the political parties that raise hue and cry for democracy are probably closest to dictatorship themselves. They do not hold internal elections and party heads are allowed to nominate their cronies on important positions. Therefore, political workers have little or no space to make inroads into this well-guarded oligopolistic enterprise.

People need an efficient service delivery mechanism and complaint redressal system to manage their routine affairs. General services, such as attestation, verification and certification of various kinds, offer a leading example in this regard. Local government institutions and their elected members are normally forthcoming in such tasks. Small-scale development schemes, and maintenance and repair projects, are important tasks that require immediate attention. If the decision-making apparatus and concurrent actions are centralised in the provincial headquarters, and in the person of chief minister, very little progress can be expected. Similarly, the expectation from bureaucrats to be sympathetic to the issues faced by the population may not be realistic.

A well functioning local government system in urban and rural domains has to be strengthened after removing the various hurdles that it has faced. The problems identified during the last eight years include poor quality of human resource, paucity of operational budgets, weak mechanism of monitoring, absence of effective audit and accounts procedures, financial dependence on the provincial / federal government, lack of control over police force, tutelage exercised by federal / provincial institutions, and inability to generate finance for local development works. One even finds more developed cities like Karachi struggling with shortage of funds to strengthen vital services such as fire fighting. Many other contexts are even worse in service delivery outreaches. In many instances, local political interests also outweigh decision-making and implementation mechanisms.

It may be worthwhile for the country's political leadership to use local governments as a tool for emboldening democracy. This can only be achieved after removing the anomalies that exist in the system. Capacity building in the local service delivery; notification and enaction of bodies, such as public safety commissions, citizen community boards or finance commissions; development of municipal services as specialised cadres; introduction of appropriate taxes to generate local revenue; and mass contact to stretch the outreach of this tier are some basic steps.

Recently, a major political party demanded to hold local government elections on party basis. The argument is logical, because non party-based elections have been held in theory only. Party affiliations and support become too conspicuous to be ignored. The elections for local governments must be held on party basis subject to a strict code of conduct. The past precedence has clearly shown that party affiliation and support automatically come into play. Violence and hooliganism must be controlled by tactful means during the conduct of electoral process.

The matter must be taken upfront as a core policy issue. To generate a debate, it may not be out of context to suggest a multi-stakeholder conference to deliberate the matter in an open ended manner. The experience sharing and option forming approach may be applied. In this respect, the near-moribund National Reconstruction Bureau (NRB) may be tasked to manage the discourse and establish its own capacity, by leading rational decision-making and consensus-building on this vital count.

Policing for people

Feudal Forces: Reform Delayed -- Moving from Force to Service in South Asian Policing

Publisher: Commonwealth Human Rights Initiative

Price: Not given

Pages: 102

Year of Publication: 2009

It is rare that NGO publications rise above the level of mediocrity and offer concrete recommendations about a policy issue; more often than not, they abound in generalisations based on half-baked research done by expensive 'consultants'. At first glance, the report under review passes for one such project activity. However, a pleasant surprise awaits the reader, not only because the research is an outcome of a consultative process but also because the topic -- police reforms -- is extremely relevant.

Wherever you happen to be in South Asia, police is seen as an oppressive force devoid of public confidence, mainly due to the colonial legacy shared by countries of the region. However, 'Feudal Forces: Reform Delayed -- Moving from Force to Service in South Asian Policing' does not restrict itself to the problems relating to police. Instead of providing a list of the ills that affect policing in the region, the report discusses the current state and pace of police reforms in Bangladesh, India, Pakistan and Sri Lanka. Moreover, it suggests concrete steps that can be undertaken to transition policing in the region from a force to a service.

The report, prepared and published by the Commonwealth Human Rights Initiative, seeks to build on the momentum generated by CHRI's 2007 report titled 'Feudal Forces: Democratic Nations -- Police Accountability in Commonwealth South Asia', which delved deeply into the theory of 'democratic policing' (that has emerged over the last decade to describe the characteristics of policing a democracy, "where the police serve the people of the country and not a regime") and why it is a desirable model for the region.

After outlining the problems with policing in South Asia and why is policing in the region deficient, 'Feudal Forces: Reform Delayed' moves on to discuss police reforms in the aforementioned four countries. Though the format of the country reports is not the same, probably due to the different systems of policing in place there, the report does not suffer from lack of coherence. The fact that all the country reports start with background and end with a set of concrete recommendations for the government, police and civil society organisations explains this to a great extent.

The chapter on Pakistan, researched and written by Arif jamal, is mainly an outcome of two consultations -- the first was held in Islamabad on July 17, 2008, on the topic of 'From Force to Service: Towards Better Policing in Pakistan' and the second was held in Lahore on Nov 28, 2008, on the topic of 'Police Reforms in Pakistan: Beyond Analysis'. Understandably, the focus of the chapter is on the Police Order, 2002.

However, due to the backlash from the provinces, the bureaucracy and certain segments of the policing community, the reforms passed in 2002 were significantly curtailed by amendments that were introduced between 2004 and 2007. Over a period of four years, eight ordinances were promulgated to introduce scores of substantive and hundreds of minor amendments to the original Police Order. Most notably, the Police Order (Amendment) Ordinance, 2004, amended or replaced 73 of the 187 articles found in the original Police Order. A table has also been included to illustrate the ways in which the original Police Order, 2002, was regressively amended and what impact those amendments had.

The chapter concludes with a set of recommendations for the Government of Pakistan, Provincial Governments, Government of Pakistan / Provincial Governments, Police Services at the Provincial / National Level and Civil Society Organisations. Most importantly, these recommendations are not based on abstractions or generalisations; rather, they are based on ground realities that can actually further the cause of democratic policing in Pakistan.

The recommendations to the Government of Pakistan include: immediately repeal the amendments that have been made to the Police Order, 2002; resource the Federal Police Complaints Authority (PCA), so that it is fully operational and functional; implement recruitment procedures at federal law enforcement agencies that place more emphasis on diversity; begin a constructive dialogue with the provinces on police reforms; request the National Public Safety Commission (NPSC) to provide an update in its next annual report on the functioning and status of public safety and police complaint commissions at the district and provincial levels; and include a 'conflict of interest' clause in the Police Order, 2002.

All in all, 'Feudal Forces: Reform Delayed' is an excellent effort and our policymakers should give due attention to it. Civil society organisations should also launch advocacy campaigns based on the findings of the report to introduce a better work culture in the most notorious government department. Finally, the report has been excellently produced and is illustrated with eye-catching images.