Is capitalism 'at bay'?
Pessimism looms large in the aftermath of unprecedented bailouts to financial institutions at the cost of taxpayers' money
By Huzaima Bukhari and Dr Ikramul Haq
The conclusion by Karl Marx that "under capitalism, everything is a contradiction" has assumed renewed relevance after the US government's $750 billion bailout to Wall Street bankers; the UK government's acquisition of 60 percent and 40 percent shares in the Royal Bank of Scotland and Lloyds TSB, involving £20 and £17 billion, respectively; and similar actions by many other Western countries. In a way, the proponents of globalisation -- modern tool of capitalism to exploit the labour of the poor -- are now re-devising their strategy to control the world.

Pakistan's economy is in dire straits. The country's foreign exchange reserves are down by 74 percent to less than $8 billion. If forward liabilities, such as debt servicing, are included, the real reserves may be even less than $3 billion -- only enough to buy about 30 days of imports like oil and food. Pakistan's hopes of getting financial support from the Friends of Pakistan (FoP) Group (comprising the United States, United Kingdom, United Arab Emirates, Saudi Arabia, Japan, France and China among others) have so far proved to be futile. The IMF, the last resort, also seems to be uninterested. Thus, the bailout plan to help the country recover from the ongoing financial crisis is nowhere around the corner.

The leading member of the FoP Group, the United States, is faced with financial quagmire at home. Therefore, it is only willing to make provisions to "help Pakistan establish the writ of government' in areas where military operation against the militants is underway. Richard Boucher, US Assistant Secretary for South and Central Asian Affairs, recently asserted that money would not be thrown on table, and that funds shall be systematically and strategically channeled only if the Pakistani government makes serious efforts to fend off the militants.

In the discussion that follows, an attempt has been made to analyse bilateral relations between Pakistan and the US over the years. This relationship has always been based on complex security footings, with very little or no strategic depth. It is in this context that Joe Biden, the newly-elected US Vice-President, has urged Congress to move away from this short-sighted stratagem.

Could there be a change in the US policy towards Pakistan? Or would there be old wine in new bottles? With the change in governments in both the US and Pakistan, what new levels of partnership could be achieved, having outcomes beneficial for both and not exclusive to either of the two partners? Or would this be another page with the same text on bilateral relations?

The Friendmetre

Only 23 percent Pakistanis expressed a favourable view about the United States in a Pew Center poll conducted before the October 2005 earthquake. In an ACNielson poll conducted after the earthquake, however, 46 percent Pakistanis expressed a favourable view about the US. This positive change in their perception towards the US came after witnessing American disaster relief efforts in the earthquake-hit areas. Nevertheless, it did not take long for the situation to change again. A June 2006 Pew Center poll found that only 27 percent Pakistanis had a favoruable view about the US, while a September 2007 survey by Terror Free Tomorrow found that only 19 percent Pakistanis had a favoruable view about the US. In January 2008, the University of Maryland-based Program on International Policy Attitudes found 64 percent of Pakistanis did not trust the US to "do the right thing in world affairs". In June 2008, the same programme found only 15 percent Pakistanis supported cooperation with the US in the so-called 'war on terror'.

From alliance of convenience to convenience of alliance

Pakistan and the US have not enjoyed an all-weather friendship in the past. The two country's alliance, sometimes conveniently termed an 'alliance of trusted allies', has been marked with periods of discord, founded on divergent strategic interests. Not surprisingly, we must note that praises our leaders receive from their counterparts in the US remind that nothing has changed regarding our geo-political position. Congressional Research Service (CRS) reports claim that between 1947 and 2007, about $16.5 billion were channeled to Pakistan as direct, overt US aid, including $4.5 billion for the military. These reports are updated regularly to appraise the US Congress about the 'war on terror'. In short, the Global War On Terrorism (GWOT) has become the central prism through which the US President and Congress view foreign aid objectives.

The problem, however, remains that Pakistan has not been able to build on this alliance of convenience with the US. The objective of delimiting the 'Evil Empire' (President Ronald Reagan's address to National Association of Evangelicals, 1983) was achieved by mujahideen with the US support; but our obsession to dominate the regional politics kept our leaders from foreseeing the future implications of such a strategy.

1950-1960 (Post-World War II): This decade saw division of the world from colonies and colonialists into first, second and third worlds. The capitalist bloc led by the US emerged as the First World; the second world comprised of the communist bloc and some of the newly formed nations under patronage from the USSR; and the third World comprised of those newly formed countries that were in the process of nation-building and juggling with the state identity. Pakistan, not surprisingly, was in the Third World. Pakistan's diplomatic ties with the US were established in the 1950s when President Dwight D Eisenhower called Pakistan America's most trusted ally in Asia against Communist expansion. From 1955 to 1961, Pakistan received about $2 billion in US assistance, thus it became one of America's most important security assistance partners of that period.

1960-1979 (Political Disengagement): This period can easily be termed the most troublesome in Pakistan's history, when the nation was divisively struck by the military's megalomania aided by the lack of political insight. Terms like 'compromise', 'consensus' and 'conciliation' are farfetched ideals in our politics, while the military is not accustomed to terms like 'mediation', 'restraint' and 'negotiation'. Not surprisingly, the 'virtues' of confrontation, discord and preclusion of our self-styled politics came into play and provided the military with an excuse to seize power. Thus, the national realities scripted our relations with the US, which was dismayed at the prospect of Pakistan building nuclear capability. In early 1979, under President Jimmy Carter, the US imposed sanctions on Pakistan for the first time.

1979-1990 (Trusted Ally Relived): Following the 1979 Soviet invasion of Afghanistan, Pakistan was viewed as a frontline ally in the effort to counter Communist expansionism. In 1981, the Reagan Administration pledged a five-year $3.2 billion aid package for Pakistan. The country, thus, became a key ally of the US once again and a transit country for arms supplies to Afghans fighting against the Russians. However, with the passage of Pressler Amendment in 1985, the $3.2 billion aid package was hit by sanctions and the delivery of 40 F-16 fighter jets was also stopped. After the withdrawal of Soviets from Afghanistan in 1989, US President George HW Bush suspended all economic and military aid to Pakistan in 1990.

These sanctions were relaxed by the US Congress in 1992. Pakistan was compensated with a $325 million cash payment and $140 million in goods, including surplus wheat. But after the 1998 nuclear showdown with India, Pakistan had to face new restrictions, sanctions and international isolation. The restrictions on Pakistan were most hard because of two reasons: a) default on foreign loan payments; and b) the military coup that took place in October 1999.

Post 9/11 (Dependence through Distrust): Following period of discord and friction between the two countries, the relations took drastic turn after 9/11. The convenience of having Pakistan on the side exponentially overweighed gains for the US and Allied Forces' entry in Afghanistan. President George W Bush also designated Pakistan as a major non-NATO ally of the US in 2004.

Operation Enduring Freedom

The post-9/11 Pakistan is among the world's leading recipients of US aid, obtaining more than $5 billion in overt assistance since 2001, including about $2.2 billion in security-related aid. Pakistan received some $6 billion in military reimbursements for its support of the US-led counterterrorism efforts. The ensuing 'Operation Enduring Freedom' in Afghanistan, financially provided lifeline to our ailing economy. The military aid was used for beefing up anti-terrorist operations, while the non-military aid was used for debt rescheduling, concessional interest payments and humanitarian programmes in the earthquake-affected areas.

Hosting President Pervez Musharraf at Camp David in June 2003, President Bush vowed to work with Congress on establishing a five-year $3 billion aid package for Pakistan. Pertinent to mention is the arms purchase deals signed between the two countries shortly after President Bush's visit to Islamabad. In 2006, Pakistan was ranked first among the list of US clients for arms and munitions purchases, with purchases worth more than $3 billion.

Estimates from the US Department of Defense and Pentagon state that Pakistan has received aid of more than $11 billion since the launch of the 'war on terror', divided in security and non-security related aid packages. Various reports from the US-based think-tanks point to the fact that the majority of aid has gone to the military, and very little to democratic reforms and institution-building. The Center for Strategic and International Studies (CSIS), in its August 2007 report titled A Perilous Course: US Strategy and Assistance to Pakistan, states "US assistance to Pakistan since September 11, 2001, has not been directed to Pakistan's underlying fault-lines, but to specific, short-term counterterrorism objectives focused particularly on the western border." The report claims that 60 percent of $10.58 billion aid package forms reimbursement to the Pakistan military for operations against terrorists, 15 percent for security purchases, 15 percent for budget support and maintaining macroeconomic stability, while only 10 percent as development and humanitarian assistance, including the response to October 2005 earthquake.

The US assistance since 2001 has come from various government channels, including Coalition Support Funds (CSF), Foreign Military Financing (FMF) and Economic Support Fund (ESF). These three are separate, yet they aim to strengthen the recipient country's resolve to fight the US-led 'war on terror'.

Coalition Support Funds (CSF): It is a Pentagon funding to reimburse Pakistan for its support of US military operations. Reimbursements include, according to the US Secretary of Defense, Robert Gates, costs on food, clothing and housing for more than 100,000 Pakistani troops on northwest border; inclusive of costs for using Pakistani airbases. In June 2008, the US Government Accountability Office (GAO) found irregularities in funds reimbursements to Pakistan, yet the report concluded that the support is crucial to the global 'war on terror'; because it helps destroying of terrorist threats and safe havens in Pakistan's FATA. It is estimated that 85 percent of the logistics that support the US and NATO forces in Afghanistan come through the port of Karachi, and three-quarters of supplies for US forces move through Pakistan. The GAO report claims that Pakistan has received nearly $6 billion (a monthly average of $80 million) as part of the 'Operation Enduring Freedom'.

Foreign Military Financing (FMF): It supports Pakistan in acquisition of military equipment, services and training. In 2006, Pakistan signed the arms purchase agreement with the US amounting to $3.5 billion (partially paid through US assistance, but with most payment from Pakistan's own earning assets), highest for any country in that year. This involved purchase of F-16s and other defence equipment. The irony is that the aid package received by Pakistan goes back to US military complexes. For instance, the Lockheed-Martin got purchase orders amounting to about $500 million.

Economic Support Fund (ESF): It provides grants to Pakistan to support economic stability. Pertinent to mention here is the fact that the allocations for 2003 and 2004, amounting to $1.5 billion, were used to cancel concessional debt owed to the US government. The ESF supports programmes run by the United States Agency for International Development (USAID), which also includes $750 million five-year continuous US support for the FATA Development Plan.

The in(convenience) of Operation Enduring Freedom

Pakistan's strategic alliance and partnership with the US can only be lasting if it conforms to the latter's strategic interest. Ambivalence is treated as recalcitrance and defiance to the American 'values'. Ray Keily, in his book Empire in the Age of Globalisation: US Hegemony and Neo-Liberal Disorder (2005), writes that the US, though supporting sovereignty of other states, has maintained its hegemony through its economic stature by trade and investment, through military means such as construction and use of US bases, and culturally via dissemination of its products. He believes that "sovereignty has thus been compromised by the US' attempts to ensure that independent states are its allies."

The 'Operation Enduring Freedom' has to date devoured ours. The country already plagued with the ethnic divide, social unrest, economic hardships, political vendetta, ransacked judiciary and prolonged military rule now has to deal with the proxy war pouring into the urban settlements. Ironically, leadership from military to the political gauges its performance on its ability to get financial assistance from the US; and thrives on clientalism-offering direct compensation to supporters and seeking the same from a hegemon it treats like a patron. The recent expansion of Cabinet is reflective of our leadership's shrewd and astute insight to resolve the country's economic distress and that too by appeasing a handful of associates!

The United States keeps asking Pakistan to "do more", but it was the US itself that created the Afghanistan swamp and continues to kill innocent Afghan civilians -- the latest example of which was this week's US missile strike against an Afghan village in which more than 40 civilians reportedly died, including 32 women and children.

The US military occupation authorities in Afghanistan say they are "investigating" the incident. But nothing is likely to come out of the investigation, just as nothing has come out of similar previous investigations. And even if something does come out of it, no 'investigation' will bring the dead women and children back to life. This reminds one of what then-US Defence Secretary Donald Rumsfeld said back in 2003 when he callously remarked that in a war "stuff happens".

On July 12, 2000 -- seven months before President George W Bush took office and fifteen months before the events of 9/11 -- a US congressional committee held hearings that turned into a knockdown drag-out fight over Washington's role in Afghanistan. Representative Dana Rohrabacher accused the US State Department of treachery and hypocrisy. He presented evidence that the United States deliberately sent 'humanitarian aid' only to Taliban-controlled areas; the State Department refused to act on information concerning the location of Osama bin Laden's headquarters in Afghanistan; and US officials tricked the anti-Taliban opposition into disarming. According to Rohrabacher, this allowed the Taliban to wipe out most of the opposition forces.

The two State Department officials at the hearings, Michael Sheehan, State Department Coordinator for Counterterrorism, and Alan Eastham, Jr, Deputy Assistant Secretary of State for South Asian Affairs, and their congressional supporters, never answered Rohrabacher's charges. Rohrabacher listed specific acts of treachery. Eastham, Sheehan and their supporters dodged the charges and responded with generalities.

Rohrabacher said: "You know, I am the only one here (making these accusations). I am not the chairman of the committee. I would never get the opportunity to have a back and forth with you (people from the State Department), except in times like this."

Rohrabacher charged the State Department with pretending to oppose bin Laden and the Taliban, while actually secretly supporting them. Because the State Department officials were manifestly unable to answer his charges, and because the whole thing was recorded and transcribed, Rohrabacher gave us a strong piece of documented evidence that during the 1990s, the actual US policy was to support the Taliban.

This interpretation is supported by the fact that only a few days after the Taliban took over Kabul in the autumn of 1996, Robin Raphael, the then US Assistant Secretary of State for South Asian Affairs, stated at a congressional hearing that the United States welcomed the takeover as "a positive development".

Rohrabacher exposed State Department duplicity not because he opposed US interference in Afghanistan, during the 1980s and 1990s, but because he wanted the US to meddle in a different way. While the US was openly financing and arming the mujahideen in their struggle against the Soviet occupying forces, and later secretly supporting the Taliban, Rohrabacher was close to the former Afghan king, Zahir Shah, then living in exile in Rome. After Zahir Shah gained more influence, following his return to Afghanistan in 2002, and the Karzai administration's declaration that the ex-king was "the father of the nation", Rohrabacher altered his criticisms of US policy.

He used to say that the US actively hurt Afghanistan. In 2001, however, he said: "We thought just forcing the Russians out and supporting the Afghans in their fight against Soviet domination was the end of the story. But it wasn't, obviously. We did not do, as far as I'm concerned, our responsibility to the Afghan people. We left them asleep in their own rubble and left them to suffer. And what emerged? The Taliban emerged. What emerged after that? Bin Laden."

Rohrabacher's remarks came in a CNN Sunday Morning interview on September 30, 2001, three weeks after the 9/11 attacks on World Trade Centre and the Pentagon. This was a complete change from the much more honest criticism voiced by him at the July 12, 2000, congressional committee hearings: namely, that the US actively fostered the rise of the Taliban and refused to go after bin Laden, even when the information regarding bin Laden and the Taliban came from Rohrabacher and his Afghan friends. Thus, he charged Washington with having a policy of arrogant interference, treachery and hypocrisy.

During the July 12, 2000, hearing, Rohrabacher said: "The United States created that swamp in Afghanistan." This was a far cry from his September 30, 2001 statement that: "We (the US) left them asleep in their own rubble and left them to suffer." The July 12, 2000, hearing of the House International Relations Committee on Global Terrorism and South Asia was chaired by Representative Benjamin Gilman (Republican-New York).

Addressing the committee, Rohrabacher said: "As we discuss terrorism in South Asia, I think it's important to renew the members of this committee's and the public's acquaintance with the request that I have made for the last three years concerning American policy toward the Taliban, because as we examine -- as we examine terrorism in South Asia, one can't help but recognise that if it weren't for the fact that the Taliban are in power, there would be a different equation going on. It would be a whole different situation in South Asia."

Rohrabacher added: "After a year of requesting to see State Department documents on Afghan policy -- and I would remind the committee that I have -- I have stated that I believe that there is a covert policy by this administration, a shameful covert policy of supporting the Taliban - the State Department, after many months -- actually, years - of prodding, finally began giving me documents, Mr Chairman. And I have, in the assessment of those documents, I have found nothing to persuade me that I was wrong in my criticism."

Rohrabacher said: "The documents that I have read, Mr Chairman, indicate that the State Department, time and again, has had as its position that they have no quarrel, or that it would give them no heartburn, to have the Taliban in power -- all this, during the time period when the Taliban were struggling to take over Afghanistan."

According to Rohrabacher, the Clinton administration "discouraged all the anti-Taliban supporters from supporting the efforts in Afghanistan to defeat the Taliban -- Bill Richardson and Rick Inderfurth, high-ranking members of this administration, personally visited the region in order to discourage the Taliban's opposition from attacking the Taliban when they were vulnerable; and then going to neighbouring countries to cut off any type of military assistance to the opponents of the Taliban." Today, Bill Richardson's name is one of those being mentioned for the job of Secretary of State in President-elect Barack Obama's administration.

The Saifullahs are an integral part of the NWFP's politics. The eldest of his brothers, Hamayun Saifullah Khan, was born on November 7, 1943. He did his Matriculation from Peshawar Public School in 1959 and FSc from Edwards College Peshawar in 1961. In college days, he was a good athlete and got admission in the Engineering College (now University of Engineering and Technology), Peshawar, on sports basis. He did his BSc in Civil Engineering in 1965.

Hamayun Saifullah started his political career in 1970, when he was elected as a member of the NWFP Assembly. He also served as a minister in the provincial government from 1973 to 1977. When Gen Ziaul Haq imposed Martial Law, he was sent to jail for voicing his opinion in favour of democracy. In all, he has been elected as a member of the NWFP Assembly thrice and as the district nazim of Lakki Marwat twice.

Before the February 18 general elections, Hamayun Saifullah resigned as district nazim to contest for the National Assembly seat from Lakki Marwat. He was elected as an MNA on the ticket of Pakistan Muslim League-Quaid (PML-Q). His brothers, Anwar Saifullah Khan and Salim Saifullah Khan, are also seasoned politicians. The News on Sunday interviewed him recently. Excerpts follow:

The News on Sunday: Many people are of the view that the local government system should be abolished. As you have yourself remained the district nazim of Lakki Marwat twice, what is your view in this regard?

Hamayun Saifullah Khan: Before answering your question, I would like to refer to the 1973 Constitution, which was signed by almost all political parties of Pakistan, including the Pakistan People's Party led by Zulfikar Ali Bhutto, the Awami National Party led by Abdul Wali Khan, religious parties led by Mufti Mehmood, as well as nationalists like Ghaus Bakhsh Bizenjo. Before its passage, a draft was prepared with a view to having a progressive constitution. The main points of the draft included: a) democratic government; b) parliamentary government; c) federal system; d) extension of local self-government; and e) guarantee of freedom of consensus. Article 32 of the 1973 Constitution says: "The State shall encourage the local government institutions composed of elected representatives of the areas concerned; and in such institutions special representation will be given to peasants, workers and women." Similarly, Article 37 (i) says: "Decentralise the government adminis-tration, so as to facilitate expeditious disposal of its business to meet the convenience and requirements of the public." When something has been guaranteed by the constitution, how can we go against it? Therefore, I am of the view that the local government system should not be abolished; instead, it should be improved.

TNS: Some political parties, especially the Pakistan Muslim League-Nawaz (PML-N), oppose the local government system on the grounds that it was introduced by Gen (r) Pervez Musharraf to strengthen his rule. How do you see their case?

HSK: It is true that many people believe that Gen (r) Pervez Musharraf introduced the local government system to strengthen and prolong his rule, and he won the referendum because of the district nazims, but I disagree with them. Had that been the case, then all the district nazims who contested the February 18 elections would have won. Moreover, abolishing the local government system is not easy, because under Article 6 of the Constitution, the president has the power to protect it.

TNS: Some people are also opposed to the way elections are held under the local government system. What do you have to say in this connection?

HSK: I would say the mode of elections and the number of members in a union council are non-issues. Some people say there should be 13 members in a union council, some say eight or six, but this is not an issue. The local government is a provincial subject, thus the provinces can bring about changes in the system according to their needs.

TNS: But the fact remains that if a district nazim happens to be from another party than the one in power in the Centre or province, it results in a tug-of-war?

HSK: This is the main problem with Pakistanis; we have a habit of interfering in the affairs of others. The parliamentarians are supposed to legislate, not to undertake development work. I think that the local government system has a potential to thrive, but only if the district nazims are allowed to work without any pressure from the federal or provincial government. The presidents have usurped the powers of the federation in the past and now the parliamentarians are trying to usurp the powers of the district nazims.

TNS: Are you referring to Gen (r) Pervez Musharraf?

HSK: No, I am not referring to Gen (r) Pervez Musharraf alone. I am referring to all the former presidents.

TNS: Are enough funds available to the local governments?

HSK: No, not at all. My experience as the district nazim of Lakki Marwat twice has been a dreadful one. We never had enough money and hardly got anything from the federal or provincial government. In Punjab, which is a rich province, district nazims may have some funds for the development of their areas; but in the NWFP, which is a poor province, district nazims do not enjoy such a luxury. When I was the district nazim of Lakki Marwat, we were given on average only Rs20 million per year for 33 union councils. How can you carry out any development work with such a meagre amount? The federal and provincial governments have many resources at their disposal, such as income tax, sales tax, land revenue, etc, but the local governments have no resources of their own. Whatever little resources they generate also go to the provincial government.

TNS: Isn't it true that district nazims can become autocrats under the local government system, because all powers are vested in their office?

HSK: No, I don't think so; district assemblies can impeach them if they go overboard.

TNS: Do you think that the councillors should be given salary, especially considering that most of them are from middle-class or poor families?

HSK: Yes, they must be given some remuneration. However, once again, the main problem is the lack of funds.

TNS: If it is such a good system, then why did you resign as the district nazim to contest for the National Assembly?

HSK: I contested for the National Assembly because I thought that I had done my job as the district nazim. I tried my level best to solve the problems of the people of my area and now I am in the National Assembly to discuss the same problems at the federal level.

TNS: What is your stance on provincial autonomy?

HSK: The 1973 Constitution ensures complete provincial autonomy, but we still do not have it. Quaid-i-Azam Muhammad Ali Jinnah was himself a staunch supporter of provincial autonomy. The Lahore Resolution of 1940 clearly states that the provinces will be autonomous financially and administratively, and there will be no concurrent list like the one we have today in Pakistan. In fact, the federal government has never tried to grant autonomy to the provinces.

TNS: What do you have to say about the ongoing wave of terrorism in Pakistan, especially in the NWFP and FATA?

HSK: I think that the issue of terrorism must be treated purely on merit. We should do only what is in our national interest, rather than blindly following America's dictates. In Pakistan, we are faced with religious and sectarian militancy, which should be curbed. However, there is no insurgency in Pakistan, because no one is seeking power through terrorist acts.

TNS: What measures should be taken to curb the menace of terrorism?

HSK: I think that dialogue is the best way to address the issue of terrorism. Let us have dialogue with the terrorists. Let us bombard them with development, schools, hospitals, roads, drinking water, etc, and not with bombs, as they are also part of Pakistan.

TNS: Are you satisfied with the recent in-camera session of Parliament?

HSK: I cannot talk a lot about this session, but I do think that it will lead to positive results because some sort of consensus has evolved among the parliamentarians.

(Email:iftikharmarwat77@gmail.com)

Since classical antiquity -- and here I am referring not only to antiquity in the 'Western' world -- one of the most fundamental preoccupations of thinkers and philosophers has been to preempt the tendency for knowledge to become dogma. In the pre-modern era, there was even a branch of philosophy that flirted with the enigma that is dogma, called sophistry.

In the modern period, dogma has supposedly been conquered by the all-encompassing objectivism of science. But science has often run into contradiction with its essential organising principle -- which Marx encapsulated in his call for a "ruthless critique of everything existing" -- by becoming ideology. Thus, the tendency for knowledge to become dogma has become more rather than less pronounced.

Modern economic 'science' is arguably most prone to becoming dogma inasmuch as the assumptions that underlie economic modelling are so often divorced from existing social reality as to render models virtually useless. In fact, such 'science' is actually very hegemonic in the most negative sense, because it insists on the objective truth of its findings when in fact this 'objective truth' actually obstructs a genuine understanding of social relations in all their complexity. Marx, of course, made clear a very long time ago that the notion of individual agents in the marketplace being formally equal is a myth, by noting the quite banal fact of the unequal endowments that they bring with them to the point of exchange.

In the here and now, one need not look further than the 'one-size-fits-all' policies of the IMF and its sister financial institutions as an example of the hegemonic nature of prevailing economic science. To be sure, it is preposterous that third world societies of tremendous diversity could all be magically transported to a state of economic and social well-being by way of a standardised set of economic policy prescriptions, and highly simplistic and mechanical prescriptions at that. As it turns out, the record of IMF-backed 'stabilisation' programmes is dismal at best and downright disastrous at worst.

There are many other compelling reasons to subject the categories and presuppositions of orthodox economics to severe critique. The current economic 'crisis' demands much more serious consideration than that has been proffered to date by the mainstream media, and political and academic accounts. The typical diagnosis places inordinate emphasis on macroeconomic figures, such as foreign exchange reserves, fiscal and trade deficits, and inflation.

While these figures are not without relevance to the real lived experience of working people, particularly inflation, they do not, in and of themselves, represent a 'crisis'. Or perhaps more accurately, they represent a 'crisis' only insofar as the object that is subject to crisis is the 'Government of Pakistan', in the form of a formal, juridical entity that is incorrectly conflated with the people that live within the territory that the GoP administers.

Are the people of Pakistan in 'crisis'? The answer is not an unequivocal yes. Take, for example, the simply intuitive observation that banks, such as Barclays, are setting up shops across Pakistan's urban centres in a big way even while the economic 'crisis' unfolds. In other words, there must be enough people in Pakistan -- and not just the high elite -- that are still viable customers for Barclays to whom credit cards can be issued and who will be expected to conform to existing consumption patterns.

To take an even more important example, food inflation has not prevented large numbers of people -- again I refer here not just to the elite -- from continuing to purchase food in healthy amounts. Of course, the very poor have been badly hit, but there is a rapidly emerging intermediate class that has the means to continue consuming in significant quantity.

Of course, macroeconomic 'crises' do 'trickle down' sooner or later; the world recession that is widely expected after the Wall Street meltdown will make life worse for the majority of the world's poor. But as such macroeconomic hyperbole does not help account for basic anomalies, such as those that I have mentioned above. Typically, orthodox economics has tried to accommodate within its schema such 'anomalies' by noting that many economic activities take place outside the formal domain, or more specifically in the 'informal' sector. But what if the 'informal' sector actually becomes the dominant economic realm? In other words, what if formal statistics, and especially macroeconomic models and figures, account for very little of the real lived experience?

In Pakistan there is little serious and engaged study on many matters of the public interest, and this is one of them. But there are hints to be garnered from next door in India where there has been much more scholarship on the real lived economy. Astonishingly, it has been estimated that 80 percent or so of economic activity takes place in the so-called 'informal' sector and that the dynamics that prevail in the sector demand an almost complete revisiting of the fundamental assumptions of conventional economics. It is disturbing that university level students in Pakistan -- as in many other third world countries -- spend an enormous amount of time 'learning' about the imaginary world of orthodox economics and almost none gaining exposure to the so-called 'informal' economy.

Of course, it is these bright-eyed young people that will go on to inhabit positions of power and influence, and even those who wish to genuinely contribute to the public interest are hardly equipped to do so if they are unaware of even the most basic need to constantly questions the assumptions that underlie economic 'science' as we know it. This is not to suggest that the cream of the crop in the first world is not as spellbound to the ideology of orthodox economics, but only to point out that the imperative of acquiring real social knowledge is much more acute for third world societies than it is for the first world that remains dominant in just about every way.

In Pakistan, over the past few years, we have become accustomed to the larger-than-life role that the corporate media has played in other societies for decades. The idiot box, mobile phone, blackberry, pint-sized laptop and the myriad other gadgets that have now become 'necessities' reinforce the hegemony of capitalism. The only bet against this hegemony is to go back to the plain and simple understanding of the real lived experience of people and then devise alternatives not for, but with them.

Pakistan's current energy crisis, coupled with a drastic reduction in the Chenab river's water after the commissioning of Baglihar Dam, has become the nation's worst nightmare. The country's dependence on oil and gas to meet its primary energy needs amounts to an astounding 83.8 percent, while the share of hydro, coal and nuclear energy is merely 11 percent, 4.6 percent and 0.2 percent, respectively. Pakistan's maximum capacity of power generation stands at 17,793 megawatts, but only on paper. This is due to a variety of operational reasons, ranging from technical faults in grids to the lack of water storage in reservoirs.

Karachi, the country's financial capital, witnessed the worst power outages this summer, bringing the commercial activity to a near standstill. Despite purchasing energy at a high cost, the existing gap between demand and supply in the city for any given day, especially in the summers, has proven impossible to bridge. The situation may easy a bit during winter, but there were no definitive answers with the Karachi Electric Supply Corporation (KESC) when The News on Sunday made inquires in this regard.

Karachi's population is projected to reach 20 million by 2015 from the existing 14 million, with power consumption expected to double. Exactly in the same year, the Karachi Nuclear Power Plant (KANUPP) will retire, according to the Planning Commission of Pakistan. Though the gradual switching over to the expensive nuclear power generation has met with some success on Chashma III and Chashma IV fronts with the Chinese technical support, the solution comes at a slow pace and high political costs.

For environmental and commercial reasons, the answer lies in the solar and wind energy, potential for both of which has exceeded Pakistan's expectations. The solar energy solution will become commercially viable the day it defeats the rich oil lobby. The state of California in the United States has been spearheading the drive to take the less-treaded paths of solar energy solutions, but the success faces bureaucratic hindrances rather than technical ones.

With Germany taking the lead, the entire Europe and many states in the United States and Canada have successfully harnessed clean and cheap wind energy. India has also been following suit with considerable success, knowing fully well the growing demand and increasing limitations of relying on power generation technologies dependent on water and petroleum. Malaysia and Indonesia have also realised this potential, given their vast coastal areas.

Scientifically speaking, global winds are caused by pressure differential across the earth's surface; the amount of solar radiation absorbed at the earth's surface is greater at the equator than at the poles, and the variation in the incoming heat sets up convective cells in the lowest layer of the atmosphere. On a smaller scale, wind is created because of temperature difference between land and seas and mountains and valleys. The local topographical features and roughness of the terrain also cause air movements.

Realising the tremendous potential of harnessing wind energy, especially in the wind corridor near Gharo along Sindh's coast belt, a detailed Wind Power Potential Survey of Coastal Areas of Pakistan was conducted by the Pakistan Meteorological Department in 2007. It estimates that the wind corridor in Sindh covers an area of about 9,700 square kilometres and the gross wind power potential of the region alone amounts to 43,000 megawatts. "Keeping in view the area utilisation constraints, the exploitable electric power generation potential of the area is estimated to be about 11,000 megawatts," the survey, however, adds.

During the three-year survey period, wind data was collected at 20 sites along Sindh's coastal belt. One minute speed and direction, five-minute average temperature, and 10-minute minimum and maximum wind speeds at 10-metre and 30-metre heights were recorded for this purpose. At 50-metre height, annual average wind speeds of 8.5, 7.0, 7.0, 6.7 and 6.6 metres per second were recorded at Jamshoro, Keti Bandar, Nooriabad, Thatta and Gharo, respectively. Annual wind power densities at Jamshoro, Nooriabad, Talhar, Keti Bandar, Thatta, Thana Bulakhan, Hyderabad and Gharo were recorded at 770, 454, 445, 374, 373, 371 and 350 watts per square metre, respectively.

According to international wind classification, this power density puts Jamshoro, Nooriabad, Talhar and Keti Bandar in the category of excellent sites and Thatta, Thana Bulakhan, Hyderabad and Gharo in the category of good sites for wind power generation. Monthly and annual values of wind-generated electric power have also been computed on a hypothetical 600 kilowatt wind turbine, the annual power production of which comes to 2.1 million kilowatt-hours (kWh) for Jamshoro, 1.5 million kWh for Keti Bandar, 1.5 million kWh for Nooriabad, 1.4 million kWh for Gharo and 1.3 million kWh for Thatta. Internationally, any site with a capacity of 25 percent is considered to be suitable for the installation of economically-viable commercial wind farms.

The government estimates that more than 5,000 villages can be electrified through wind energy in Sindh, Balochistan and the Northern Areas. Moreover, enormous wind energy potential exists in coastal areas of Balochistan, as well as desert areas of the Punjab and Sindh. Various international donors, such as USAID, GTZ and the UNDP, are eager to assist Pakistan in assessing and exploiting the same.

However, the meager efforts of the Alternate Energy Development Board (AEDB) aimed at harnessing wind energy are set to be reversed with the PPP-led coalition government mulling to cancel 93 letters of intent (LOIs) issued to national and multinational companies for setting up wind energy projects. Many investors had even got land allotted for installing wind energy farms, but delay on the part of the National Electric Power Regulatory Authority (NEPRA) in deciding the tariff has been a major hurdle in the takeoff of these projects. With increasing tariffs and mounting installation costs, the interest of investors is waning, say senior officials in the Ministry of Water and Power.

It has been learned that the LOIs are set to be cancelled on the pretext of investors failing to meet the conditions and validity period in achieving the milestones associated with their LOI. The AEDB denies any likelihood of cancelling the LoIs and claims that the country's first-ever wind IPP will start power production before the end of the year. However, experts like Major (r) Asif Masood believe that the projects are less likely to materliase with an affordable tariff agreed with NEPRA. He explains that the private power producers as well as the government sector's power production cost varies between 3.5 cents per kWh and 6.2 cents per kWh.

The investors, on the other hand, complain of the lack of political will and red-tappism on the government's part. "The LoIs are being cancelled under political pressures in Sindh, so that the land spared for wind farms can be allotted the blued-eyed,î says one such licensee. The Ministry of Water and Power, as well as the AEDB, obviously refute these allegations.

Asif Masood says not only Pakistan is losing precious time with this delay, but also the cost of projects has mounted significantly. For example, he says, a 50-megawatt plan would have cost $110 million in 2004, but the same would now cost more than $160 million. "Also add to that the environmental and commercial price of expensive energy used till such clear initiatives materialise."

The AEDB, however, hopes that the first wind power project of Pakistan will be commissioned by the end of this year. Zorlu Enerji Pakistan Ltd, a local subsidiary of Zorlu Enerji of Turkey, pursuing the development a 50-megwatt wind power project, will complete and commission the first phase of the project (6 megawatts) in December 2008. Five turbines of 1.2-megawatt capacity each will be installed in this phase. All the equipment, including rotor blades, towers, generators, etc, has already arrived at the project's site. Moreover, in another development, the AEDB has signed a memorandum of understanding (MOU) with the Karachi Port Trust (KPT) for the development of a 50-megawatt wind power project at Hawks Bay, Karachi. As per the MOU, the KPT will develop the project and the AEDB will facilitate it in this process.

With the government's commitment in place and the LoIs intact, the hope for harnessing wind energy can offer a much needed relief to the people of Pakistan. However, more challenges await the government and the wind IPPs, because turbine and masts are in short supply in the international market owing to the growing dependence on cleaner energy sources. Germany is by far the leader in wind power technology, followed by the Netherlands, Denmark and other European countries. The international market for turbines is living with a delay of 14-16 months. As usual, Pakistan is left with the quick-fix solution of installing the Chinese-made windmills, which do not match the European standards of efficiency and durability.

Pakistan must not repeat the mistakes it made during conversion from petrol to natural gas, by not seeking transfer of technology from friendly nations and CNG market leaders, such as Italy. CNG kits and cylinders worth millions of dollars are imported every year in the age of weakening rupee against dollar. AEDB officials say talks are underway with international companies to start the manufacturing of micro-wind turbines and parts of large wind turbines. So far, about 30 wind mills for pumping water have been installed for experimental purposes in different parts of Sindh and Balochistan.

In addition to the development activities in the field of wind energy for on-grid electricity production, wind energy is also being used for the electrification of remote off-grid villages in the southern coastal areas of Pakistan. So far, more than 18 villages have been electrified using micro-wind turbines. Moreover, indigenous development of micro-wind turbines has also started in Pakistan. The last but not the least factor worth considering remains the lack of trained workforce for the installation and maintenance of wind turbines. With widening demand-supply gaps in the power sector and the need for trained manpower staring in the face, the government should enter into agreements with European nations as much for technology transfer as for the training of workforce.

The memories of an aggressive crackdown against forex companies doing illegal foreign exchange trade, back in 2003, are still fresh in our memories. At that time these companies were charged with the crime of calling money from individuals, without legal authority, for investment in forex trade against promises of paying them exorbitant profits. Another allegation levelled against them was that the owners of these companies had collected huge sums of money from people and were planning to disappear from the scene any moment.

Several offices were raided by law-enforcement authorities in central Punjab, mainly Lahore, and senior executives of forex companies were arrested in a bid to stop them from embezzling public money. The task of recovering public money from forex companies was given to the National Accountability Bureau (NAB), which made an ambitious announcement that people will get their money back within 30 days.

Five years down the road, the situation on ground is that a very small number of forex scam victims have been paid a fraction of the amount they had originally claimed. Most of the victims are dissatisfied with the system adopted by NAB to make payments to the affectees and term it discriminatory. On the other hand, NAB refutes such allegations and claims to have put in place a fool-proof system to verify claims and disburse money.

Zubair Rasheed, chairman of the Forex Affectees' Forum, tells The News on Sunday that they have been visiting the NAB Punjab office for the last five years, but every time they are warded off by the officials posted there. He says NAB officials often send letters to claimants asking them to visit the office and collect their cheques. "But whenever we go there, they ask us to come on a later date and this keeps going on again and again," he adds.

Zubair says another grievance of many victims is that their claims have been rejected by the concerned authorities without giving any valid reasons. He tells TNS that officials have told the victims verbally that the federal government has stopped NAB from making payments until further orders. Zubair says he is unable to figure out why the authorities are not able to recover money from the owners of the forex companies who are in their custody for so long.

NAB authorities, however, totally rule out chances of any irregularities in the bureau's affairs and claim that they are adopting all possible means to recover public money. Talking to TNS, Brig (r) Farooq Hameed Khan, director investigations of NAB Punjab, says there is no truth in allegations that victims are not being accommodated properly. "In fact, they are being facilitated in the best possible manner, a proof of which is that NAB Punjab has already paid Rs140 million to 2,350 victims as first installments of their claims," he adds.

As per NAB, the total number of forex scam affectees is about 7,500 and the amount involved Rs7.5 billion. Keeping in view the total amount recovered from the culprits so far and the slow pace of claims payment, it seems the process would take ages to complete.

Farooq says these payments were made to victims of companies, namely Still Rich, Zi Business, Nexus Capital Management, Stockage International, Western Mutual, Sun Reliance and Amson. On rejection of certain claims, he says this is done to discourage filing of bogus claims. If someone is not satisfied with such a decision, he or she can write a letter to the director general of NAB Punjab and appear in person to contest his or her claim, Farooq adds.

The NAB Punjab's director investigations says the bureau has been successful in recovering money only for the reason that looting public money is a non-bailable offence under the NAB Ordinance. Right now, 19 top executives and CEOs of forex companies are in jail and many of them are trying to enter into plea bargain with NAB, he informs. Farooq says they have been facing trial for a good two-and-a-half years and facing conviction now. This is out of this fear that they have offered to clear liabilities on them, he adds.

Though the picture painted by Farooq appears to be rosy, it fails to appease the victims. Pervez Sabir, a victim based in Lahore, tells TNS that the authorities are adding salt to their wounds by paying them money in rupees as per dollar's rate in 2003. "We paid in dollars and must be compensated in dollars. If that is not possible, we must get Rs83 per every dollar payable to us and nothing less than that," he demands. Pervez says NAB is also deducting the profits received by claimants on their investments from the amounts claimed by them. He says the profits were earned when the businesses we running and should not have anything to do with the claims.

Farooq says payment to victims in dollars is totally out of question, especially when the government is itself in an urgent need of foreign reserves. Secondly, the exchange rate of 2003 is applicable, because the investments were made at that time. "The victims must keep it in mind that any amount returned to them is a blessing for them," he adds.

Farooq goes on to say that the profits received from forex companies are being deducted from victims' claim for the reason that they had reaped enough from the bargain. Those who lost all their investment without even getting a penny in profit are more deserving. He says the profits offered by forex companies were as high as 48 percent per annum, something totally unheard of in the case of commercial banks and other financial institutions.

While there are some who are willing to express their grievances openly, there are others who fear reprisal from authorities in case they come on record. One such victim tells TNS on condition of anonymity that the decision of NAB to enter into plea bargains with the directors of forex companies has led to resentment among claimants. He says it is unfair that such plea bargains are reached at without consulting the real owners of the money in question. He expresses fears that these directors will be freed after recovering part of the money payable by them.

Farooq denies any such possibility and says the concept of plea bargain is very much misunderstood here. He says the process is transparent and plea bargains are made only through accountability courts. "Only those people are allowed to avail this option who plead guilty and agree to pay the total amount misappropriated by them." Farooq further says the only relaxation offered to them is that they are asked to make an immediate payment and make a commitment backed by bank guarantees to pay the remaining amount in two installments. It has been due to the plea bargaining option that NAB has recovered Rs25 billion from culprits since its inception, he adds.

Microfinance is a viable financial sector instrument for enhancing access to financial services for the poor, alleviating poverty and promoting economic development. The poverty alleviation potential of microfinance, especially for the developing countries, is being widely recognised, and increasing emphasis is being given to it in development policies and strategies. In short, the role of microfinance in poverty alleviation schemes has increased over the last few decades globally as well as in Pakistan. In a way, microfinance has emerged at the forefront of the development agenda concerning sustainable economic progress.

Microfinance started gaining prominence in Pakistan in the 1980s, but it was not until the mid-1990s that the government included it as an effective tool in the national poverty alleviation strategy. Pakistan is currently one of the largest potential microfinance markets in the world, with an estimated clientele base of almost 10 million. This number is expected to rise even further because of the high population growth rate in the country. Currently, more than 40 microfinance institutions are providing services to about 600,000 men and women in both the rural and urban areas.

The main objective of the microfinance sector is to reduce poverty by providing a range of easily accessible and affordable financial products and services to the rural and urban disadvantaged. Microfinance, basically, caters to low income people who are financially vulnerable and unstable, to those who are not viable candidates for or do not have access to formal financial institutions. The poor also need a diverse range of financial catalysts for consumption as well as investment purposes. The microfinance services generally provided to them include a variety of financial products, such as saving schemes, micro-credit, micro-insurance, remittances, etc. However, in Pakistan, microfinance remains a single-product market confined to micro-credit. These small loans usually range from Rs10,000 to Rs25,000, and are taken for use in agricultural and trade activities.

The demand for microfinance services among the poor and low-income households in Pakistan is very diverse and sizeable. In the rural areas, the microfinance customers mainly consist of small farmers and livestock owners, as well as the owners of minor businesses like food processing. While in the urban areas, the clientele base is much more diverse; it includes self-employed people, shopkeepers, street vendors, household-based entrepreneurs, artisans, etc.

Microfinance can also act as a feasible support mechanism to encourage self-employment and micro-entrepreneurship. A significant number of the poor in Pakistan do have viable investment opportunities, but continue to remain poor because of the lack of access to affordable credit to pursue those prospects. This limits their ability to improve their living standards and livelihood, as well as to participate in the country's development. Therefore, micro-credit is an answer to those people's problems who have identified a viable economic opportunity and can capitalise on it if provided with a modest start up capital.

Ahmed Hassan found himself in an acute financial crisis six years ago, when he was suddenly laid off from the fertiliser factory where he worked his 12-hour shift. "I immediately started searching for any sort of odd job or employment, but these are hard times and a job is almost impossible to find," he tells The News on Sunday. "After five months of futile search for a job, I had lost all hope and patience. Things were very bleak at one point, with my family being supported only by my elderly father's meager income. I was crippled with desperation and helplessness, which were so acute that, at times, I would contemplate stealing and even suicide."

Hassan decided to start his own business, but the lack of funds kept him from doing so. "Borrowing money to start my own shop was something that I was reluctant to do, since I knew about the stringent payment and collateral interest rate terms," he states. It was then one of his neighbours told him about a microfinance institution that helped potential entrepreneurs like him by giving them small loans. "I approached the institution, which gave me a small loan on easy terms. This enabled me to open a small general store in my locality, which I would have never been able to do otherwise. In a few months, I was earning profit. Now, I have fully repaid my loan and have a small but sufficiently profitable business that provides me with a stable income to sustain my family."

Hassan is just one of the many people whose lives have taken a turn for the better due to microfinance. It has also been noted that microfinance can help the poor increase and stabilise their incomes, build viable profit-earning businesses, and reduce their vulnerability to external shocks. By providing the poor access to financial services, microfinance can play an important role in the eradication of many facets of poverty. It can also prove to be a useful instrument for self-empowerment and financial independence, by enabling the poor to become economic agents of change and participate more fully in the development process.

Microfinance has additional benefits for women, who form a significant proportion of the poor in Pakistan, because it not only gives them financial independence but also helps them achieve economic and social empowerment. Besides increase in business activity and income, microfinance also has certain socioeconomic spillover benefits, such as children's education, health awareness, women's empowerment, etc. All said, though microfinance is not a panacea for poverty reduction, it can at least play an important role in the country's economic development.

Still, there are people who are too poor to be even potential clients for microfinance services. They lack a regular and dependable source of income or even a permanent address that makes it impossible for them to make the required payments. Thus, many are ruthlessly excluded from entering the market. Over the recent years, NGOs have emerged as providers of microfinance services in Pakistan. They usually cater to the people who are overlooked by formal microfinance institutions, such as the very poor, women and minority groups. The major reason for this is that institutional microfinance is still in its infancy in Pakistan and, therefore, has limited outreach.

The microfinance sector in Pakistan is at a crossroads. Certain decisions need to be made for catering to the needs of the people who still remain without access to microfinance services. The poorest of the poor in Pakistan are still unable to benefit from the microfinance sector despite the role of NGOs and the government, mainly because of the perceived high risks and costs. The major concern for the policymakers should be correcting the structural flaw that exists in the economic sector, the failure to cover the costs with the revenue earned. This is restricting the activities of the microfinance sector in Pakistan, besides limiting and undermining its future growth and expansion. Providing affordable and yet profitable financial services to this excluded fragment of society is one of the major challenges that the country's economic system faces. Therefore, the government should establish a cohesive and conducive policy framework, support mechanism and financial infrastructure to encourage private investment in the economy.

The much-publicised Benazir Income Support Programme (BISP), aimed at helping four million poor and vulnerable families across the country, was formally launched last month. The programme was to be launched on August 14, as announced by Prime Minister Yousuf Raza Gilani in his maiden speech in the National Assembly, but it was delayed due to certain operational modalities.

The BISP is the largest direct cash grant programme in the country's history and all members of the National Assembly and Senate, irrespective of their party affiliations, have been provided with an opportunity to recommend 8,000 deserving families in their constituencies as its beneficiaries. As far as the procedural details are concerned, the forms would be verified by the area's union councillor as well as the MNA, who will have to collect and return them to the National Data Registration Authority (NADRA) in pre-addressed envelopes provided by the BISP.

According to initial estimates, the number of beneficiaries comes to 3,536,000 (the total strength of MNAs and Senators is 442 and each one of them has been asked to recommend 8,000 families). According to BISP sources, if AJK and the Northern Areas are also covered under the programme, the number of beneficiary families for the current year may exceed 4.5 million.

The BISP will be run by an executive board, to be headed by MNA Farzana Raja as chairperson. Its members include Minister for IT Qamaruzzaman Kaira, Advisor to the PM on Finance Shaukat Tareen, Planning Commission Deputy Chairman Salman Faruqui, Minister of State for Economic Affairs Hina Rabbani Khar, Special Assistant to PM on Social Sector Shahnaz Wazir Ali and renowned economist Qaisar Bengali. BISP operations will be headed by National Coordinator Qaisar Bengali, who will also serve as the programme's principle accounting officer. One, however, feels that it would have been better to also give some representation to opposition parliamentarians on the BISP's executive board for ensuring transparency.

The federal government has allocated Rs34 billion to the programme in the ongoing financial year's (2008-09) budget. This is the third largest head in the budget in terms of size and constitutes more than 0.3 percent of GDP. The BISP is designed to cover about 14 percent of the population in the low-income group across the country. Its unique feature is that the payment will be made directly to the female head of the family.

According to credible reports, in order to meet the existing economic crisis in the country, the government has decided to seek the IMF's help. As a result, the BISP may also face the threat of lesser or no funds, because such cash handout programmes have always met with the IMF's disapproval in the past. However, Qaisar Bengali tells The News on Sunday that the committed funding for the programme has already been provided by the government and IMF conditionalities would not affect it.

"The programme was conceived during my meetings with the late Benazir Bhutto in Dubai," Bengali informs. He goes on to explain that, because of the sky-rocketing prices of food items and other commodities in the country, the budget of poor families has been under immense pressure since the last year. Thus, to lessen their financial problems, an immediate but temporary relief to the poorest of the poor was finalised in the shape of the BISP. Bengali adds that the inspiration for such an initiative came from India's employment scheme, which guarantees one job per family, as well as cash grants schemes in some other developing countries.

Under the BISP, the poorest families, having income of less than Rs6,000 per month, will be paid Rs2,000 after every two months. According to official estimates, the programme will provide relief to at least 25 percent of the population living below the poverty line. However, this figure is contested by independent economists. The funds for the BISP will be disbursed through the Pakistan Post Office Department. They will be delivered in the form of postal money orders at the recipients' addresses, so that they do not have to incur any cost or face any trouble in getting the amount.

The first release of payment under the BISP is said to start within this month and the scrutiny of the processed request forms for this purpose is reportedly underway. The disbursement mechanism for the grantees has also been finalised: the concerned post offices will be receiving postal money orders directly from the Ministry of Finance at the formal request of the BISP head after every two months.

Independent analysts question that the programme is a duplication of the existing Baitul Maal scheme, which is being run by the Ministry of Social Welfare at the federal level. Under the Baitul Maal scheme, deserving families get Rs250 per month, excluding Zakat allowances, in comparison with Rs1,000 under the BISP. Bengali contradicts this viewpoint and clarifies that the cases of duplication will be scrutinised, because Baitul Maal data is maintained by NADRA too. However, he adds, the families wishing to switch over to the BISP from the Baitul Maal scheme will be accommodated on case to case basis. Bengali further explains that though NADRA does not have the exact data for the Rs6,000-income families, through "proxy variables for the income", the same can easily be obtained.

Looking at the BISP's future, Bengali anticipates ownership of the programme at all levels, because the mechanism for availing these grants throughout the country has been devised irrespective of any political consideration. He also believes that the discontinuation of such a direct public welfare programme will be very difficult for any future government. He, however, admits that complete reliance on such cash-oriented programmes is not a sustainable idea, and this income-support programme will have to be realigned with other income-generation initiatives.

The conclusion by Karl Marx that "under capitalism, everything is a contradiction" has assumed renewed relevance after the US government's $750 billion bailout to Wall Street bankers; the UK government's acquisition of 60 percent and 40 percent shares in the Royal Bank of Scotland and Lloyds TSB, involving £20 and £17 billion, respectively; and similar actions by many other Western countries. In a way, the proponents of globalisation -- modern tool of capitalism to exploit the labour of the poor -- are now re-devising their strategy to control the world.

British Prime Minister Gordon Brown has approached the rich oil-producing countries of the Middle East, having colossal foreign currency reserves pool money for the IMF and World Bank, to "help halt economic collapse". Brown and his counterparts in the EU are following the advice of defenders of capitalism. For example, The Economist observed in its October 18-25 issue: "Capitalism is at bay, but those who believe in it must fight for it. For all its flaws, it is the best economic system man has invented yet." The claim of "the best economic system" is a fabrication, because a handful of people having control over resources, which they do not want to surrender for the benefit of others, impose capitalism on the entire humanity.

The modern tool of capitalism -- free market economy -- was created by Friedrich von Hayek and put into practice by his enthusiastic student, Milton Friedman. In the post-colonial era, the ugly face of capitalism was cleverly camouflaged with the help of 'academics' working in various universities around the world. An international network of foundations, institutes, research centres, writers and public relations hawks was created to package and sell the ideology of free market economy as the main pillar of globalisation. This ideology allows the rich, individuals as well as nations, to amass wealth at the expense of the poor.

In Quranic terminology, this is called riba, which is commonly translated as 'usury'. However, in reality, it covers all forms of return on capital without employing labour. The modern banking system works and thrives on this core idea. It is high time that the economic wizards of the world start reading the Quran, which unfortunately is considered by the majority as mere religious advice and counsel for rituals, whereas in reality it imparts basic guiding principles for formulating a system that ensures justice and equality for all human beings, irrespective of their belief or practices. After issuing strict warnings against the accumulation of wealth and greed for it, the Quran denounces riba; and declares it unlawful, a serious crime against humanity and a proclamation of war against Allah.

The Quran explains that the people possessing wealth through riba exploit others' labour for increasing their assets, and this leads to a drastic reduction in public wealth. It warns that in this system, the hoarders of wealth exploit labour of others and the oppressed become poorer. This not only reduces national wealth, but also ignites the fire of hatred ('class struggle' in Marx's terminology) in a society. The Quran says riba is not only what is taken from a needy person over and above the money given as loan, but also includes all transactions where money is multiplied without employing any efforts.

In the present day terminology, it has been named as 'commercial interest' and 'profit sharing', though in substance it is nothing but riba. The fundamental economic principle given by the Quran is that a human being deserves only what is the result of his or her labour and nothing else. Since return on capital is riba in whatever form it may be, the Quran, by declaring it unlawful, has denounced the motive and objective of wealth accumulation without striving for it and then not redistributing it for the benefit of the needy.

Pessimism looms large in the aftermath of unprecedented bailouts to financial institutions at the cost of taxpayers' money, yet the defenders of capitalism are trying to prove that it "is the best economic system man has invented yet." On October 24, Joseph Stiglitz and Myron Scholes, two leading economists having conflicting views, discussed the future of global financial system in an open forum arranged by the defenders of capitalism. However, these economic gurus and many others, including Paul Krugman, the winner of 2008 Nobel Prize for Economics, cannot think beyond the existing model. They have nothing to offer as a replacement.

This is the dilemma of the West. Under the influence of capitalism, its intellectual and cultural heritage is bankrupt, as are individual countries' economies. Why they cannot think beyond the existing models? Perhaps because of the fallacy that the Western thought is the best. The reality lies somewhere else; the world economy has been hijacked by the warmongers -- the neo-cons in the US and elsewhere. They waged war against Iraq on the pretext of presence of 'weapons of mass destruction', but the real motive was to exploit oil reserves for personal gains. The $3 trillion Iraq war has made the owners of war industry richer, but devastated the US economy. This is the essence of capitalism: personal greed hijacks the system that Adam Smith warned would not work if devoid of ethical consideration.

It is no secret that the financial crisis of 1973 and the debt crisis of the 1980s were also triggered and manipulated by the proponents of the capitalism to control global economy through Structural Adjustment Programmes (SAPs) of the IMF. These programmes are returning to many countries, including Pakistan, that were doing well before the ongoing global financial crisis. It seems that the capitalists did not like their becoming self-reliant and breaking the debt bowl. Thus, they created panic and now, on the pretext of helping the 'states in trouble' through IMF programmes, will force them to devalue their currencies, open their economies for exploitation by the rich, privatise their public assets, dismiss workers in the name of downsizing, cut development expenditures, and withdraw subsidies on food items and essential utilities, such as water, gas and electrify -- all the measures that badly affect the poor.

The capitalism is not "at bay", as suggested by The Economist; in fact, as usual, it is at war with the oppressed. Capitalism is a great fraud of history and the lesson for the humanity is clear: it must not heed to the propaganda unleashed by the capitalists. On the contrary, the humanity should unveil and resist the tactics of the capitalists. This is possible only by abandoning riba, and by sharing wealth with the poor, destitute and have-nots.