Withstanding the worst
To meet the IMF's conditionalities, the government will have to put even more burden on the poor
By Hussain H Zaidi
Compelled by a worsening balance of payment (BoP) position, falling foreign exchange reserves and drastic devaluation of the domestic currency, Pakistan is knocking at the door of the International Monetary Fund (IMF) for capital inflows. Therefore, it is high time to look into the possible implications of IMF assistance for poor and low-income segments of the Pakistani society.

Doom and gloom is the order of the day. A combination of a lack of patience for democracy, a thoroughly weak and compromised elected government, external powers with little concern for the people of Pakistan, the fallouts of the so-called 'war on terror' and an aid-dependent formal economy has ensured that the familiar theme of "Pakistan facing an existential crisis" is front and centre. While things are not nearly as dismal as popular discourse makes them out to be, it is at times like these that it is worth looking elsewhere for a little inspiration.

It is now old news that popular upheavals -- and here I include upheavals effected through the electoral process -- have precipitated a dramatic change in the trajectory of the Latin American continent over the past few years. A domino effect started following the election of Hugo Chavez as president of Venezuela, with Evo Morales in Bolivia and Rafael Correa in Ecuador emerging as proponents of a '21st century socialism' and seemingly willing to defy both the traditional hegemon in the region, the United States, and dominant classes within their own societies in their struggle to achieve it.

Then there have been others who have also suggested the need for change, even coming to power on a change platform, without necessarily adopting as confrontational a stance as the aforementioned leaders. In this category, President Lula of Brazil and Nestor Kirchner in Argentina stand out. In any case, the point is that the political discourse of the entire continent has shifted clearly to the left at a time when the rest of the world, disillusioned as it might be with neo-liberal capitalism, has not yet fashioned a meaningful political alternative.

The typical response emanating from the quarters of those ideologically committed to capitalism (and even those far less moved by ideology, yet deeply influenced by capitalist hegemony) to this call for a '21st century socialism' is dismissive. Among other things, the by now rather dated "socialism has failed" claim is made and the Soviet Union in particular invoked to prove that "capitalism has already triumphed" in the defining battle of modern times. Familiar critiques of the Soviet (and to a lesser extent Chinese) experience are repeated including "there is no incentive under central planning" and "the state becomes a behemoth unto itself, suppressing people's basic rights to maintain its dominance."

Within Latin America, dominant social classes facing unprecedented threats to their privilege regularly compare Chavez and Morales to Fidel Castro, drawing upon almost 50 years of American-led propaganda campaigns against the leader of the Cuban Revolution. Here again the rhetoric is incredibly simplistic: "Chavez and Morales are dictators just like Castro is (or perhaps it is now more accurate to say 'was')" and "Chavez and Morales want us to become poor and backwards like Cuba."

The shallow polemic aside, there are profound attempts underway in at least Venezuela and Bolivia -- with Ecuador arguably close behind -- to transform society not in a manner that blindly repeats the experiences of 20th century socialism, but in accordance with both objective and subjective conditions in society and the world more generally. The biggest problem that unapologetic slanderers of the Latin American left face in the current conjuncture is that Chavez, Morales & co have time and again been given a clear mandate to proceed in realising their vision for change through the ballot box. In fact, the record is quite stunning: Chavez and Morales enjoy absolute majorities, and their project for a '21st century socialism' is as transparent as any political project anywhere in the world.

In effect, the project is very straightforward. It is based first on a clear commitment to anti-imperialism. This includes not only direct resistance to the dictates of the American state but also to the institutions of multilateral imperialism, such as the World Bank and International Monetary Fund (IMF). The logic is simple: imperialism has wrecked Latin American society and only when Latin American people are insulated from the devastating agendas of Empire can a new social order be fashioned in which avarice and instant gratification are not celebrated values.

Second, reallocating control over the means of production within society. Inevitably for third world societies, in which a majority of people still earn their living in the agrarian sector, this means redistribution of land. It also means reasserting control `over precious minerals and other natural resources. Venezuela is of course the world's fourth largest producer of oil, while Bolivia has unknown supplies of natural gas. In both countries, reasserting public control over these resources and eliminating private profiteers who have siphoned profits from control over these assets abroad have been major policy goals.

Third, popular organisation. To caricature 'revolution' as the "storming of the Bastille" is to forget that social change is a long, drawn out process that must involve a high degree of conscious participation of working people. Simply taking power does not imply that any meaningful change takes place. The pre-existing state apparatus is not designed to emancipate people and instead tends to oppress them. It is, therefore, only when people themselves are mobilised -- at the workplace, in their residential neighbourhoods, in their centres of popular culture and in all other public spaces ñ that the dream of social transformation can be realised.

There is, of course, much more to what is happening in Latin America at the present time and the jury is still out over what will transpire in the long-run. However, what is clear is that the project for a '21st century socialism' deserves the attention of all those who long for change wherever they may be. In the end, human beings can only undertake experiments in improving the human condition; there can be no foolproof blueprint for a social utopia. Insofar as the current Latin American experiment can inspire others, and regardless of where it eventually ends up, it is deeply important.

This is not to suggest that we in Pakistan should aim to produce our own Chavez' and Morales' per se. The only suggestion being made here is that change is not only possible, it is actually taking place in a part of the world with which we in South Asia share much. Indeed, we need not even extend our gaze as far as Latin America if we want proof that a politics of change is possible in the here and now: Nepal is evidence enough. Wherever we look, we do not find vindication for those who argue that "nothing will ever change here". And that should be enough fuel in the tank for the engine to keep running.

Britain prides itself on being a multi-cultural, multi-racial society today, and there is much about life in the country these days to support this claim. But a wide streak of racism still runs across the landscape. The events of 9/11 and the London bombings of July 7, 2005 (which Britons refer to as 7/7) have, if anything, deepened the feelings of animosity of white Britons towards Arabs, Pakistanis, other Muslim ethnic groups, as well as towards blacks from the West Indies and African countries.

However, the origins of this racial animosity go back to the 1950s, which saw the advent of several things in Britain. The list was a pretty mixed bag that included the good, the not so good and the downright bad. Among the bad things was the emergence of racism in what, until then, had been a fairly tolerant society.

Before 1952, the British were not unfamiliar with blacks or South Asians. There had, in fact, been a large contingent of black Americans among the GIs in wartime Britain and South Asian students were frequently seen in London. However, the increasing number of immigrants who arrived from the West Indies in the mid-1950s, with British passports and automatic rights to settle, suggested a new, more permanent situation.

The West Indians came for jobs, some of which, such as work with London Transport, had been advertised in their homelands as a means of overcoming the labour shortage in post-war Britain. But finding a place to live proved more difficult for many of them: before long, house-owners with rooms to let were putting up notices saying "No Blacks".

The West Indians, some of whom solved their accommodation problems by buying and renting out houses themselves, settled in London and also further afield, in Yorkshire and the West Midlands. By the mid-1950s, the Jews whose culture had enlivened the East End of London had largely moved on and the West Indians began to replace them.

Although the West Indian newcomers arriving in Britain in the early 1950s had settled peacefully, racial tensions began to build up; and in 1958, in Notting Hill, London, they erupted. On September 9 that year, a group of white youths taunted blacks living in a house in Notting Hill Gate. The blacks answered back with a hail of milk bottles and a homemade petrol bomb. The police arrived to find blacks and whites embroiled in violent fighting. Before order was restored, there were many serious injuries and 59 people were arrested and charged with using offensive weapons.

Although the Notting Hill Riots had been an isolated incident at the time, it became clear before long that the resentment against blacks that had been at the root of the problem was widespread. By 1963, popular concern was such that the government had to take action. New rules imposing work permits on immigrants came into force at midnight on July 1, 1963.

During that day, there was a rush of people trying to beat the deadline. Jamaicans on board an aircraft delayed by bad weather nearly lost their chance after they landed at Belfast in Northern Ireland almost an hour too late. An exception was made for them and they stayed. For others, though, the new rules were strictly enforced: many Indians and Pakistanis without work permits were repatriated to their home countries.

The government action of 1963 did little to solve the problem of rising racial tensions. Race hatred and the idea that Britain was going to be 'swamped' by a rising tide of immigrants gained ground fast among Britons in the years that followed. On May 6, 1968, at a time when 50,000 dependents of immigrants were being admitted to Britain each year, the right-wing Conservative MP Enoch Powell gave a speech in Birmingham in which he predicted "rivers of blood" as a result of this policy. His speech sparked off vigorous support from some 74 percent of Britons polled on the subject, and also a protest march from London dockers.

The West Indians were deeply disturbed by the hatred rising against them. From their viewpoint, the country that had apparently welcomed them and allowed them to settle was becoming full of enemies. The better life they had hoped for, and the improved prospects for their British-born children, seemed to be slipping from their grasp.

When Uganda achieved independence in 1962 and Kenya in 1963, their minority Indian population received British passports in case, one day, they had to leave. Possibility became reality in Kenya in 1969 and in Uganda in 1972, when the governments of these countries decided to expel the Indians, whose forebears had come to Africa in British colonial times, many of them to work as labourers on Cecil Rhodes' 'Cape Town-to-Cairo' railway project. Their descendants became traders.

In Kenya, the Indians' trading licences were taken away, leaving them with no means of making a living. In Uganda, the Idi Amin military government accused them of sabotaging the economy. Some 10,000 Indians had already left Kenya in 1968 and in 1969 another 15,000 followed. In 1972, 50,000 Indians were expelled from Uganda and they arrived in the United Kingdom, thanks to their British passports, with an automatic right to settle in Britain.

Many Kenyan and Ugandan Asians had never seen India itself but nevertheless preserved their Indian culture and, once transplanted in Britain, they went on doing so. Like many previous immigrant groups, they lived largely within their own communities and followed their own customs, as did the Pakistani immigrants who had begun flocking to Britain in increasing numbers since the mid-1950s.

Youngsters born in Britain to West Indian parents were also under racial pressure and they attracted a great deal of discrimination. Black dislike of the whites ran no less deep. Young blacks chafed at jobs denied to them because of their skin colour. Blacks who committed crimes were often dealt with far more roughly by the police than whites in the same situation.

All this planted a deep distrust of the police in young black minds and, in 1981, helped fuel a horrific series of violent and destructive riots in Toxteth, Liverpool and Brixton, London, where shops were looted, vandalised and set on fire. The racial harmony and tolerance of the early 1950s were now only a distant memory.

Muhammad Ismatullah Chaudhry has recently retired as the UN World Health Organisation (WHO) operations officer-cum-consultant for Pakistan's largest province, Punjab. A pioneer of preventive medicine in Pakistan, his life has been one of commitment to the service of his fellow beings. Ismatullah was born in a small town, Sidhwan-Salimpur, of Ludhiana district in East Punjab. He was nine at the time of partition and vividly remembers his five-day harrowing walk from his village in India to Gunda Singh Wala border near Kasur in the newly created country of Pakistan.

After some primary education at his birthplace in East Punjab, he finally did his Matriculation from Islamia High School Khanewal, securing first position in the district. He then joined Government College Lyallpur (now Faisalabad), where as a BSc student he got elected as president of the college literary society, Bazm-e-Adab, a rare honour for a science student. He later did MSc in Zoology from University of the Punjab and followed it with Master's in Public Administration from the same alma mater. He has also done postgraduate studies in Epidemiology at the Institute of Hygiene and Preventive Medicine, Lahore.

In 1962, he started his professional career as senior malaria superintendent with Punjab Malaria Eradication Programme, headed by the inimitable Col (r) Khurshid Akhtar. During his 10-year stint with this programme, he played a phenomenal role in combatting malaria in the province. From 1974 to 1977, he headed Small Pox Eradication Programme in Punjab, achieving 100 percent success rates.

He joined the WHO as its operations officer for Pakistan in 1977. During his 31-year distinguished career with WHO, he has planned, coordinated and executed a number of disease prevention, health promotion and community development programmes the world body launched in the country. These include Expanded Programme for Immunisation. Accelerated Health Promotion and Polio Eradication Programme, to name but a few. He has also helped our health managers effectively contain communicable diseases like SARS, Bird Flu and Dengue Fever.

Ismatullah is a widely travelled public health professional and has offered valuable consultancy services in the areas of health care and disease control to a number of Asian and African countries. After his retirement from WHO, he has recently moved to and settled down in Canada with his wife. The News on Sunday interviewed him recently. Excerpts follow:

The News on Sunday: What attracted you to the thorny area of epidemiology and preventive medicine?

Muhammad Ismatullah Chaudhry: I was fortunate that after doing my MSc in Zoology, I got a job with Punjab Malaria Eradication Programme. My 10-year association with the programme opened my eyes to the importance of an oft-repeated but largely ignored dictum that prevention is better than cure. I then decided to dedicate my life to epidemiology and preventive medicine. My endeavours, I must emphasise, have been highly rewarding and satisfying. They involved working with communities and saving people from diseases, suffering and disabilities. The satisfaction one gets at the end of the day, after a good job done, is immense. Nobody can imagine the pleasure I get when I think of my contribution to the eradication of small pox in Pakistan. It is worth mentioning that not a single case of small pox has been detected in the country since 1974. Similarly, the Childhood Immunisation Programme that I helped design and implement has prevented on average 1,000 deaths and disabilities daily. Moreover, it has helped overcome some fatal diseases, such as measles, whooping cough, neonatal tetanus, diphtheria and childhood tuberculosis. Polio too is on the verge of eradication in Pakistan.

TNS: We in Pakistan had nearly eliminated polio. Some recent news, however, point towards resurgence of this disease in some areas. What has gone wrong and where?

MIC: Pakistan unfortunately is one of four countries along with Afghanistan, India and Nigeria where eradication of polio has got delayed. With assistance from the UN and other aid agencies like CIDA and JICA, Pakistan launched the Polio eradication Programme and it was close to achieving its target of 100 percent elimination of this disabling and even deadly disease, but factors like high population density, low EPI coverage, fatigue syndrome in immunisation staff and parents, message not reaching all families and vaccination teams not reaching all houses have caused resurgence of polio in some areas. What we need is rethinking the strategy to make it more efficacious.

TNS: Despite clear religious injunctions, we in Pakistan are careless about personal hygiene and cleanliness. What are the reasons?

MIC: Islam attaches lot of importance to hygiene and cleanliness, so much so that cleanliness is considered to be half of a Muslim's faith; but Islam is not alone in advocating the importance of cleanliness. Other religions also advocate cleanliness. Even people without any religious faith are aware of the importance of cleanliness for a healthy living. But due mainly to ignorance, lack of education and resource constraints, some Muslims tend to ignore personal hygiene. Our opinion leaders too are unmindful of sensitising the masses about hygiene and the ongoing environmental degradation. I recall that in the 1950s and 1960s, basic hygiene and public health was taught in schools. This, unfortunately, is no longer the case, especially in public sector schools catering to the poor and the disadvantaged.

Moreover, Pakistan all along has been in the grip of population explosion. Its cities, towns and even villages are now over-crowded and densely populated, so much so that even villages do not have adequate dumping grounds for solid waste disposal. Moreover, a number of areas suffer from extreme scarcity of potable water. These factors and a lack of political will cumulatively militate against level of cleanliness and quality of environment in the country.

TNS: What are your views about family planning?

MIC: An unmanageable population increase is posing a big threat to Pakistan. At existing growth rate Pakistan's population is increasing by 100 percent after every 22 years and, in fact, we already have reached a stage where the country cannot sustain its population of more than 160 million. With the exception of Balochistan, the remaining three provinces have a very high population density. The resources being limited, the population growth has retarded socioeconomic development. The country, therefore, suffers from high levels of poverty and low levels of literacy, especially among women and in rural areas.

Poverty is an important health determinant. In Pakistan one third of the population lives below the national poverty line and poor people tend to produce more children, despite the fact that they can ill afford large families. We ought to educate the masses about the perils of early marriages and large unaffordable families.

TNS: AIDS is said to be assuming epidemic proportions especially in some poorer countries. What are the reasons?

MIC: Because of lack of awareness, Acquired Immune Deficiency Syndrome (AIDS) has already reached pandemic proportions in some countries. Globally, more than 6,800 people become infected with Human Immunodeficiency Virus (HIV) every day and more than 5,700 die. The situation, therefore, needs allout efforts to combat this threat. The HIV infects the cells of human immune system, destroying or impairing their function and, thus, making the affected persons susceptible to other infections. HIV is transmitted through unprotected sexual intercourse (vaginal or anal), transfusion of contaminated blood, sharing of contaminated needles or surgical and dental instruments and from a mother to her infant during pregnancy, childbirth and breastfeeding. Hectic efforts are now afoot worldwide to educate people about HIV / AIDS prevention and treatment.

TNS: Are we in Pakistan doing enough to control the menace of AIDS?

MIC: Pakistan like some other Muslim countries is low endemic, but high-risk country. The number of registered cases is small, but factors favouring transmission are very much there. The government, in collaboration with international agencies, is focussing on harm reduction through raising awareness and surveillance in high risk population. Some NGOs too have been trying to educate people about the hazards of this deadly disease. Their efforts have borne fruit and we have a reasonable level of awareness even in rural areas and people try to be careful. Programmes to control AIDS are functioning effectively at the national and provincial levels. Far more than AIDS, Pakistan's emerging problem is the spread of Hepatitis B and Hepatitis C. These fatal diseases have the same routes of transmission as HIV / AIDS. The government has now rather belatedly launched hepatitis control programme as well.

TNS: Do you see any positive correlation between poverty and prostitution?

MIC: Poverty and associated conditions of unemployment, low educational levels and deprivation do lead to many social problems and there definitely is a positive correlation between poverty and prostitution. This does not mean that prostitution is non-existent in rich countries, but then there are poor people in rich countries too. However, prostitution is not only an economic problem; it has more to do with moral climate of a society.

TNS: Some resistant strains of tuberculosis are said to be again invading poor countries. How can we cope with this situation?

MIC: No doubt TB has resurged. Incomplete, irregular or interrupted treatment causes drug resistance, making TB bacilli immune to routine treatment. WHO estimates that the largest number of new TB cases in 2005 occurred in South East Asia region, which accounted for 34 percent of incident cases globally. Situation in Sub-Saharan Africa with 350 TB cases per 100,000 population is even worse. It is estimated that 1.6 million deaths occurred from TB in 2005. With support from WHO and partners like Global Fund, the Government of Pakistan has launched Directly Observed Treatment Strategy (DOTS) to control TB in all the provinces. This strategy has worked and Pakistan, which was at number six among 22 countries most affected by tuberculosis has now moved to number seven.

TNS: Pakistani people are said to have little faith in medicines manufactured by some local firms. Do you endorse the public perception?

MIC: This perception was true previously. The recent years have seen noticeable improvement, and many pharmaceutical manufacturers now have better quality assurance through ISO 9000 certification; and their products enjoy faith of both public and professionals. The government too has put in place a network of pharmacists and drug inspectors at district and tehsil levels to eliminate manufacture and sale of substandard drugs The pharmaceutical industry has grown and its products are meeting international standards and competing favourably in the export trade.

TNS: Is it not time that the government bans across the counter sale of antibiotics and other prescription drugs?

MIC: Yes. It should be restricted. Overuse of antibiotics has merely made the bacteria more resistant to treatment. But the restriction should accompany affordable health care to all sections of society, including the less privileged and the poor, who cannot afford the fees of consultants and laboratory tests. In Canada, where this restriction is in place, a patient has to pay about Canadian $10 as pharmacist fee for each prescription drug in addition to cost of the drug. At the present exchange rate, it comes to Rs.650 as pharmacist fee for each prescription medicine. How many people in Pakistan can pay that kind of money?

TNS: Can we reduce environmental pollution from our cities, towns and villages within the given financial resources?

MIC: The resources are always scarce to more or less degree, but this constraint must not be allowed to play havoc with our environment. More than resources, what we actually need is political will and a high level of commitment at all levels. Then we can even reallocate resources towards improving our surroundings.

(Email: zubairmasood@hotmail.com)

We hear of revolutions everyday. We read about revolution in technology, revolution in communications and revolution in electronic media. But the revolution which never came and is still affecting our lives the most in the present era is the Islamic revolution. The struggle for bringing about an Islamic revolution somehow through political or military means started with the 'jihad' movement of Syed Ahmed Shaheed in the beginning of the 19th century. Two centuries down the line it is still going strong with Osama bin Laden of Al-Qaeda and Mulla Omer of the Taliban in the lead.

This struggle for bringing about a change in the destiny of Muslims through revolutions, which took different shapes and adopted different modus operandi in different backdrops, has cost Muslims millions of lives. Even then, today it is as far away from achieving its objectives as it was 150 years ago, when Jamaluddin Afghani was travelling to different countries, trying to develop a sense of Pan-Islamism to bring Muslims together and overthrow the yoke of foreign slavery.

The Muslims revolutionary movements adopted different means in different times. People like Syed Ahmed Shaheed thought that establishing a rule in a remote area inhabited by diehard Muslim traditionalists would provide them a platform. He intended to use that platform for operating and driving the foreigners and non-believers out of his homeland, thus bringing back the glory of Islam. Jamaluddin Afghani was of the opinion that that Pan-Islamism was the answer to this riddle. Intellectuals like Syed Qutb and Abul Ala Maudoodi thought that by developing a cadre of righteous and trained Muslims, they would be able to get the political power.

They believed that only by getting hold of political power they would be able to bring about that long-awaited revolution. With the advent of Al-Qaeda and the Taliban, it seems that the wheel has completed full circle and has come back from where it had started. In Osama bin Laden, Mulla Omer and their allies, we see the reincarnation of the thought of Syed Ahmed Shaheed: if an Islamic sanctuary can be established in a remote area where local inhabitants are diehard Muslims, it can be used as a launching pad for Islamic revolution throughout the world. Isn't it a coincidence that the area chosen by Al-Qaeda and the Taliban for this purpose is the same as was chosen by Syed Ahmed Shaheed two centuries ago?

All these movements and efforts of the past share one common feature -- failure -- and the fate of the current movement is expected to be no different. All these movements of the past and present are based on the premise that revolution is the only way to bring an end to the woes being currently faced by Muslims. But by now, they should have realised that mostly revolutions and revolutionaries do not work. The world has progressed this far on the basis of evolution and it is the only course of action that nature and history accept.

Islam itself, though revolutionary in spirit, nature and concepts, is very evolutionary in its approach. It is a religion that always emphasises a practical and gradual approach. Instead of revealing the whole Holy Quran at once, Allah deemed it appropriate to reveal it in small pieces over a period of 23 years, preparing the people step by step for what was to come next. Many things were not decreed haram immediately, but were gradually prohibited for Muslims. The Holy Prophet himself preferred to suffer the arrows and slings of outrageous fortune for 13 years before deciding to take up arms against the sea of troubles. The approach of the Holy Prophet, which should be a guiding principle for all of us, shows that he did not attempt a sudden revolution or change of system. Rather, he adopted a practical and guarded approach, very similar to the evolutionary process. The revolution came by itself when the time was ripe.

The history of the subcontinent also bears testimony to this fact. When the British established their rule here, the response of Muslim leaders reflected two different approaches. On the one hand, we see the struggle of heroes like Syed Ahmed Shaheed, Maulana Mehmoodul Hassan and Obaidullah Sindhi. They refused to accept the foreign occupation and tried different methods to bring about an Islamic revolution and to restore the days of Muslim glory. On the other hand, we see leaders like Sir Syed Ahmed Khan who knew that no revolutionary movement would be able to do what an institution like Aligarh University could. The results are there for all of us to see; who was right and who was wrong, despite all the sincerity of purpose and commitment. Revolutionary leaders and activists like Subhash Chandra Bose, Maulana Qasim Nanotavi, Maulana Mehmoodul Hassan and Bhagat Singh won the hearts of the people, but freedom was won by visionaries like Iqbal, Jinnah and Gandhi.

If we leave Islamic history and the history of subcontinent aside and take examples from the modern day world, we would not come across different results. The 20th century saw many revolutions and revolutionary leaders. The revolutions usually fizzled out (for example, the Russian Revolution) or had to change course dramatically to stay alive (for example, the Chinese Revolution). Revolutionary leaders like Nehru, Jamal Abdul Nasir, Mao and Lenin left their people with their ears full but stomachs empty, because rhetoric has never proved as an effective tool for fulfilling the basic needs of people. On the other hand, some non-charismatic and non-revolutionary leaders -- such as Menzies of Australia, Lee Kuan Yew of Singapore and Deng Xiaoping of China -- spoke little, but pursued practical and pragmatic policies. They left their nations in a state where they could hold their head high among the comity of nations. They also had one thing in common: they were visionary leaders, not revolutionaries.

When Lee took over Singapore in June 1959, it was still suffering from the aftereffects of the Second World War. When he left in 1990, despite being very small in size, Singapore had attained the status of the Asian Tiger. Its economy had grown bigger than accumulative economy of many bigger Asian countries. All this was done quietly and without any rhetoric. When Deng Xiaoping was finally able to wrestle complete control of China in 1979, the devastating effecting of the Cultural Revolution introduced by Chairman Mao had brought China to its knees. Mao was no doubt a great leader who had led a gigantic struggle to bring about a revolution, but his efforts to keep the revolutionary spirit alive through experiments like Cultural Revolution shattered the Chinese economy. Had Deng not entered the scene at that juncture with his visionary approach, the fate of China might not have very different from that of the former USSR.

In today's world, the only Muslim country enjoying international respect, political stability and economic strength is Malaysia. The leader who did all this was no revolutionary, but a visionary. Mahathir bin Muhammad held the post of prime minster for 22 years from 1981 to 2003, and is credited with engineering Malaysia's rapid modernisation and progress. Despite being highly critical of American polices and Western civilisation, he did not advocate a policy of conflict and collision. The United States was the biggest source of foreign investment and was Malaysia's biggest customer during Mahathir's rule. On the other hand, loud speaking leaders like Qaddafi -- who claimed to be revolutionaries -- are nobodies in today's world. Despite having the immense wealth of oil at their disposal, they have not been able to elevate the status of their country and the people.

If we continue our search, we can find hundreds of such examples both from history and modern day world. But all that would only prove the point that I have already made: all efforts to restore the lost glory of Muslims through revolutions, either armed or political, have proved futile in the past and have no hope of succeeding in future as well. Muslims have already lost countless precious lives and wasted immense resources in these misdirected endeavours. We cannot afford to continue following a dream that is never going to materialise.

We do not need Osama bin Ladens and Mulla Omers. We need leaders who can guide the Muslims on the path of evolution. Indeed, it would be a very slow journey of progress that would require continued commitment and devotion. This journey is usually so long that those who start it are often not able to taste the fruit of success themselves. That is why revolutions are sought by those who want shortcuts and who want to enjoy the fruits of success in their lifetime. Vision and evolution require patience and self sacrifice. Sir Syed founded Aligarh, but was not around when the students of his university were leading the Pakistan movement from the forefront. But this by no means mitigates his contribution to the Pakistan movement, which has been acknowledged by history.

We need movements for improving and developing systems of education, governance and accountability. We need people who can guide us on the path of science and technology. We need leaders who can understand the requirements of changing times and help us change accordingly, not the leaders who refuse to change and want to keep us that way as well. This is the only sure way of restoring the lost glory of Muslims, albeit a long one. Only by treading the path of evolution, we shall be able to achieve what Islamic revolutions have never been and will never be able to achieve.

(The writer is chief executive officer, Pakistan AIDS Control Federation, Islamabad.

Email: aftabmalik6@gmail.com)

education

In Pakistan, an academic debate has been in vogue for some time to examine the merits and demerits of applying the semester system in universities as a uniform policy. Proponents of this scheme present several arguments in its favour, such as coordination with foreign universities and their systems; enhanced faculty-student interaction; focussed delivery of knowledge; better time management; improved level of performance evaluation; and flexibility in packaging course contents. The annual system of academic organisation is also criticised as being apparently conservative, less flexible and outdated with respect to contemporary norms of higher education.

It is perhaps for this reason that the Higher Education Commission (HEC) is strongly emphasising the need for swift implementation of the semester system in all universities / institutions of higher learning in Pakistan. Nevertheless, it is worth mentioning that many conditions, prevalent in Pakistani universities in general but especially in professional colleges / universities, make the application of this system without considerable preparatory work highly questionable.

No semester system can function properly in overpopulated class sizes. Many educational experts consider 30 students as the maximum number in class. This restriction is based on the reasoning that faculty members need to observe students very closely during their routine performance. The desired interaction level is also rigorous and can only be attained with limited audience. Our universities cannot ensure even this prerequisite. Class sizes sometime swell to more than 60 students, which is, of course, inappropriate in any system. Similarly, classroom spaces have to be adequately developed to enable tutorial and group work.

Observations in many public sector universities show that even basic classrooms are not available for accommodating any reduction in batch configurations. Some private sector universities have inducted hugely exaggerated numbers for monetary gains and profiteering. Consequently, lectures are held in stuffed environment when more than 60 students are made to sit and interact with the teacher. The quantum of attainment is affected adversely and it does not correspond with the minimum requirements of the semester system. Dynamics of undergraduate and postgraduate education are also different. Normally, relatively greater discipline and smaller student numbers are observed in the case of latter, which makes application of the semester system a logical choice.

Teaching assistants (TAs) are an essential feature of the semester system. Normally they are doctoral scholars attached to senior faculty members for practical experience in teaching and academic management. In Western universities, every professor has a pool of five to six TAs assigned the task of monitoring student attendance, basic checking of routine tutorials / assignments, preparation of practical schedules, assistance in grading and academic record management. TAs also assist in preparing teaching aids and presentations and all this constitutes an enormous amount of work.

Professors cannot handle their rigorous timetables without the help of this vital cadre of TAs. This is also fair to students because TAs have a greater capacity to oversee their regularity and participate in required academic work. This crucial link is, however, completely absent in our context. Most of the universities claiming to follow the semester system do not extend support of TAs to their faculty members. Any independent evaluation shall unveil this fact. Under such conditions, the senior faculty becomes unable to cope with facilitation demands of the students. Consequently, the quality of education gets affected seriously despite tall claims by the universities.

The availability of dedicated faculty in requisite numbers is a major requirement of the semester system. However, this does not mean increasing the number of junior full-time faculty. In fact, a broad-based combination of subject specialists, class managers, student advisers and junior faculty is required according to the nature and focus of the academic discipline. For instance, in architectural studies, one qualified and experienced studio teacher is needed for every 15 students to impart the desired level of instruction.

In engineering disciplines, similar ratios are needed for project supervision and guidance. The concept of rotating faculty cannot function under this arrangement. In Pakistan, there are many fields and subjects in which very few specialists are available. University management can overcome this shortcoming by intelligent programming of faculty time, creative class scheduling and organisation of supplementary sessions wherever relevant. However, this arrangement cannot be applied in a semester system where the input of faculty is needed in a focussed manner without any flexibility.

In our society marred by rampant corruption and malpractices, a credible system of checks and balances is vital for every stage of instruction, student assessment and grading. For ensuring a convincing academic system that can be relied upon by society in general and the future employers of students in particular, a proper appraisal system is a major prerequisite. Case studies have shown that universities where the semester system is followed in the name only resort to shortcuts. In the past, the semester system was applied religiously in public sector universities, but on the majority of campuses, malpractices were rampant. These included fraudulent recording of attendance, tampering with results, partisanship of examiners and incomplete delivery of course contents.

After leaving such universities, graduates could not justify their degrees in any open test by prospective employers. When candidates from one public university from the interior of the country were called and asked to take a basic proficiency test, they almost invariably failed. This was because their grading and assessment was done internally without involving any external examiner at any level. Due to connivance and political pressures, influential students got away by either coercing teachers or colluding with them.

In the final analysis, ground realities of the country must be taken into account before changing any system. Whereas merits of the semester system are clear, they cannot be achieved without fulfilling certain prerequisites. Adequate number of qualified faculty members, insulation of universities from outside political interference, creation of adequate provision for TAs, availability of appropriate space and facilities, and trustworthy system of grading and evaluation are essential for the semester system to deliver its desired results. It should be noted that even in the Western world, higher secondary education is often organised under the annual system, because of its suitability to local conditions. In Pakistan, the same rationale remains essential for the government: not to consider any change unless internal dynamics are ripe for it.

The global financial stagnation, coupled with a likely recession, offers an excellent opportunity to reflect on various aspects of the state policy. As governments attempt to rein in expenditures, issues such as health care and education have begun to receive increasing prominence. In the developed world, ideological and practical issues have led to an increased focus on the responsibility of the state towards the provision of public goods. However, various state-sponsored projects compete for the limited funding, thus the 'greater good' of universal provision of health care and education is being questioned.

We in Pakistan are, unfortunately, still very far from any semblance of universal education or health care. However, like the developed world, we are often seen trying to cut government expenditure. As can be expected, public services and development face the chopping block well before the perks of the military or bureaucracy see any curtailment. Significantly, it is in the area of higher education that the debate is likely to shift and develop in Pakistan. The reason is simple: as an impoverished country facing economic meltdown, regardless of any economic 'progress' made over the last eight years, the vast majority of the country's people face mass poverty. To overcome this deprivation, development practitioners will pressurise for funding health and education facilities at the micro level; the quantity and quality will, however, leave a lot to be desired.

The HEC is being subjected to budget cuts, while the public sector universities are claiming that they are unable to pay salaries to their employees. In short, the issue of both quality and quantity of higher educational institutions in Pakistan is linked, not unlike the rest of the world, with who should foot the bill for higher education: the students or the state?

Pakistan's higher education sector, as modelled under the HEC, seeks to replicate foreign institutions, especially those in the United States. Like most developing countries, we are quick to apply benchmarks linked with perceived standards of universities in the West. Therefore, higher education in the developed world is facing a crisis-like situation. The much-envied US model has created vast gulfs between the Ivy League universities that are charging hefty fees and state-sponsored institutions whose quality varies widely.

In the United Kingdom, 'capped fees' mean that students along with the state contribute to tuition fees, though in both the US and UK student debt has become a major issue of concern and a possible impediment to encouraging higher education. On the opposite side of the spectrum, the Nordic model offers free education as taxpayers fund 100 percent of tuition fees. They argues that under such a system, the ultimate goal of a classless society is achieved: more and more students from lower strata of society graduate from university, wage gaps shrink and long-run social cohesion established.

From country to country, policies vary. However, with limited resources, governments must choose which combination of state and individual contribution would lead to greater social benefit. Importantly, we in Pakistan have to recognise the failures that are developing in our ad hoc, dysfunctional higher educational system. Rather than offering an opportunity for greater social mobility and bringing down class boundaries in many respects, private institutions are doing little more than reinforcing them.

Private educational institutions offer great rewards for their investors, turning around massive profits given the captive demand for education in the country. Loosely regulated, with important links that stretch into the establishment, a hierarchy has developed. Sitting at the top are the LUMS' and the IBAs of the country, with their well-funded and sprawling campuses they have gained the reputation of centres of excellence. For those who can afford it, they actually are.

And if money was not a barrier to entry, then the prerequisite academic qualifications required mean that only a small minority of Pakistanis are able to apply for admission to begin with. This model has served such establishments well; however, importantly, their success has meant that private institutions at lower levels of the hierarchy replicate the success of those at the top. The gulf between haves and have-nots is wide to begin with. With graduate-level studies offering to enhance lifetime earnings by 185 percent in comparison with non-graduates, the gulf is only likely to widen in the days to come.

The implications of increasing inequality are widely discussed and recognised. Increasing inequality magnifies stresses on social cohesion, and they are already increasing due to social injustice, poverty and now economic meltdown. Should the state intervene? Should the state not only encourage but actively fund higher education? Again, 100 percent funding for higher education is likely to reduce the quality of teaching. Notwithstanding the fact that resources diverted to basic education offer greater social benefits than those diverted to higher education, in Pakistan the state patronises the latter.

This is where our country's attitude towards higher education hints at the self interest of bureaucrats, politicians and military men. In a developing country with limited infrastructure and negligible research facilities, higher education ñ rather than acting as a multiplier for social benefit ñ adds to private benefit. When the HEC launched scholarships and encouraged private institutions, the obvious beneficiaries were evident and clear. However, higher education is simpler, neater and administratively transparent.

Centred mostly in urban areas, universities and other institutions of higher learning are much easier to manage. Unlike the provision of basic education, there is much more scope of private-sector investment. Neither are we working towards the classless societies of the Nordic countries nor are our current policies creating a research-based university system. Instead, we have adopted and accepted the status quo that helps to alienate the masses from the fortunate elite, where quality has to be paid for and where government policy acts in self-interest.

The government policy towards higher education in the coming years will shape our future. Any move towards a more egalitarian system, where fees are means-tested and state support widely dispersed, would auger well for a more cohesive Pakistan in two to three decades from now. A profit-dominated university system, where state support to public institutions cannot compete with private institutions, is likely to add to strains of the web of social cohesion. As our budget planners redraft our economic policy and with it the nature of state allocations, this is high time to reshape the way education is treated: more as a right and a public good, rather than a tradable commodity.

Intolerance is among the major threats to world peace and prosperity. Armed conflicts, racial assaults, religious persecutions and violent ideological confrontations are all byproducts of intolerance. In fact, intolerance is endangering human society at large. Recent political history reveals that since the end of the Cold War, there has been a steady increase in social, religious and cultural conflicts among and within various states; for example, armed conflict in Balkan states, racial assaults in Western Europe, genocide in Rawanda and Darfur, etc.

Since September 11, unfortunately, the doctrine of pre-emption and politics of intolerance have emerged as the leading principles in international politics. The United States-led adventures in Iraq and Afghanistan have destabilised global peace and security. The civilised world has seen that there is no difference between al-Qaeda and the Bush administration in reacting to a given situation. Both state as well as non-state actors are involved in intolerant and unjust politics, while general public has suffered and is looking forward to peaceful co-existence.

Though injustice, inequality and power politics in the international political system are breeding intolerant behaviour, it is rooted in fear of other unknown cultures, religions and nations. In addition to this, ignorance and xenophobia are also closely linked with intolerant attitude. Consequently, intolerance in multi-ethnic, multi-cultural and multi-religious societies is igniting violence and armed conflicts. For instance, world peace is at stake due to discriminatory behaviour of world leaders in the so-called 'war on terror'.

Undoubtedly, tolerance is necessary for peaceful co-existence, democracy and sustainable development. In short, no society can prosper without upholding the elemental virtue of tolerance. The Declaration of Principles on Tolerance, which was adopted by UNESCO'S 185 member states on November 16, 1995, rightly qualifies tolerance not only as a moral duty, but also as a political and legal requirement for world peace, progress and prosperity. It is rightly considered as a moral virtue and the fundamental value on which twenty-first century's norms and values are based.

Democracy, social justice, equality, mutual respect and acceptance of each other's ways of life are the best ways to counter intolerance in a society. Besides this, by initiating dialogue among different religions and civilisations, educating the people about other cultures and religions, creating awareness on different ways of life, finding practical solutions to problems, and enhancing active interaction among people of different cultures and faiths, we can promote the values of tolerance.

Disparity, depression, prejudice and intolerant behaviour have also been observed in those developing and underdeveloped countries where monarchs and dictators are in power. The masses have no access to information and no right to freedom of expression. Consequently, they are ignorant about and indifferent to others cultures and societies. This means that their views about other cultures and religions are rigid, inflexible and uncompromising. Thus, ignorance, misinformation and xenophobia are enough to ignite clash among civilisations and religions.

However, the solution to our problems lies in acceptance and appreciation of cultural diversity, forms of expression and ways of life. For that reason, there is need for dialogue among different religions, civilisations and cultures of the world. Such dialogue will not only promote social cohesion, but also reconciliation among countries. The regular and reciprocal interaction among different religions and cultures is vital for mutual understanding, as well as for shunning intolerance.

This dialogue should not take place only among experts of different religions and cultures. but also among the people of these religions and cultures. The commoners need to visit mosques, churches, synagogues and temples to learn more about other faiths. Moreover, they should participate in each other's cultural and religious festivals, besides reading books and watching movies on them.

As a Muslim, we have to understand and preach the fact that Islam believes in non-violence and peaceful coexistence. The religion teaches its followers to be cooperative and positive while interacting with the people of other faiths and cultures. Islam preaches love for humanity and justice for all, irrespective of religious or cultural affiliations. It advocates dialogue with the followers of other faiths and calls for a culture of peace in society.

Quality education is also considered as an effective tool to fight intolerance. In this regard, greater efforts should be made to educate the masses about other cultures, religions and ways of life. The parents and teachers should encourage children to be open-minded and accommodating towards the differences with others both at home and in school. Besides this, the government and civil society should make an endeavor to encourage interaction among people of different cultures and religions. Alongside this, should be a comprehensive media campaign, entertainment programmes and seminars, so that the virtue of tolerance can be promoted in the best possible manner.

There is pressing need for launching a worldwide campaign to create public awareness about cooperation and non-violence. Both traditional and modern teaching techniques should be employed. It is rightly said that reconstruction and reconciliation projects should be initiated in 'enemy' states, while the focus should be on collective needs and common future.

Prejudice and hatred are usually the byproducts of misinformation and ignorance. The hatemongers always manipulate public opinion with ignorance and misinformation. The best way to counter the influence of hatemongers upon public is to provide them access to authentic information, so that they can differentiate between facts and fiction. For instance, misinformation on 9/11 and 'weapons of mass destruction' by the Bush Administration for its vested interests fuelled hatred against Muslims across the world.

Indeed, intolerance breeds intolerance. Leaders' intolerant behaviour has a trickle down effect on their respective societies. Subsequently, a vicious cycle of mistrust and violence emerges in the society. If we need peace and prosperity in the world, we will have to inculcate tolerance in ourselves, in our families, in our educational institutions, in our workplace and in our society at large.

The burning political issues, such as the 'war on terror', are the breeding grounds for intolerance and bigotry. The solutions to these problems are mainly local, but require a cooperative, accommodative and broad-minded leadership that has faith in non-violence and peaceful co-existence, and that also believes in mutual respect and dignity of all cultures, religions and ways of life.

All too predictably, Pakistan has returned to its most reliable 'friend', the International Monetary Fund (IMF), for its routine liquidity injection to 'avert' another economic crisis. The IMF is expected to provide $5 billion to Pakistan in the next calendar year, with billions of dollars more committed for subsequent years, for solving its balance of payments (BoP) problems.

While some experts fuss over the destructiveness of an IMF programme, many Pakistani economists have actually welcomed it, phrasing it as a "bitter medicine that is unfortunately required". Similarly, the government deems this Pakistan's fait accompli; with a few weeks worth of foreign reserves and an economy taking a nosedive, what recourse do they have?\

After all, the most feared IMF conditionalities are the elimination of food and fuel subsidies or the slashing of defence budget. Our ministers argue that if the government has already taken the unpopular decision of eliminating subsidies with fuel prices equating the international market rates, limited borrowing from the central bank and resolve to reduce the budget deficit to 4.3 percent of gross domestic product (GDP), then the IMF will have little more to add except money. Also, Should not a possible demand for 30 percent reduction in our mammoth $4 billion defence budget, the eternal holy cow of the establishment, be welcomed? Nonetheless, some lone voices continue to cite the horrors conferred by the IMF economic shock therapy on Russia, Argentina and many other hapless victims.

Soon Pakistan would have signed the Letter of Intent for a Stand-by Agreement (SBA), essentially a continuation of the Poverty Reduction and Growth Facility (PRGF) that was terminated by then-Prime Minister Shaukat Aziz and his economic advisors in 2004. In all probability, the same host of conditionalities will apply, if not more stringently. Since the country's economic situation has degenerated, it has less leverage to lobby for its interests.

So the question begs to be asked: why is the IMF so maligned and feared; an institution created for the select purpose of injecting liquidity into economies starved for funds and setting them on the corrective path of 'stabilisation' must be heaven sent. Yet even eminent economists formerly employed as policy advisors by the IMF and World Bank, such as Nobel Laureate Joseph Stiglitz, are among its most scathing critics. The IMF stabilisation policies have to their credit (or discredit) the East Asian crisis of 1997, nationwide riots and social upheaval in Latin American countries, largest sell-off of Russia's industrial assets, drop in Africa's national income by 23 percent, etc. So perhaps there is substance in this critique and maybe a country all set to take the "bitter medicine" should brace itself for what it is inevitably getting into.

A government in desperate need for liquidity, while at the same time suffering from lack of vision and political will for structural reforms, will dutifully abide by IMF policies for reducing its fiscal and current account deficits. The IMF may make genuine pretence of treating each crisis as unique. However, the Washington Consensus forms the foundation of all its loan agreements, be they structural adjustment packages or the euphemistically named PRGF. The IMF's policy prescriptions, just like its objectives, have been consistent through time and countries. Basically, they are directed at the four 'ations' -- stabilisation, deregulation, privatisation and liberalisation.

Stabilisation measures entail applying severe pressure on the government to cut public spending. The means cut in the development budget; complete withdrawal of food and fuel subsidies; divestment in industrial infrastructure and public works; and withdrawal of subsidies to small and medium enterprises (SMEs) and the agricultural sector. So the impact will be borne largely by the poorest section of society. Moreover, the desperate need for government investment in infrastructure, to boost industrial capacity and agricultural output, will not be fulfilled as long as we are linked with an IMF programme. Similar stabilisation measures were the cause of the riots that exploded in Indonesia in 1998. They also pushed 51 percent of Ecuador's population below the poverty line, and sparked such social unrest that caused massive flight of capital and government bankruptcy.

Capital market deregulation is imposed by all IMF programmes to facilitate capital investment flows. However, the 1997 East Asian crisis is a testimony to the implementation of such IMF policies to the extreme. In low-income countries like Pakistan, which have not experienced institutional and structural reforms in the real sense of the word, foreign capital can only be attracted to high return and low-term deposits, not to productive investment. The consequent artificial hike in interest rates not only demolishes the value of property and raises cost of capital, thereby halting industrial expansion and draining the national treasury, the capital it attracts has also proven to be footloose: it comes in for speculation in real estate and stock market, and then flees at the first whiff of trouble.

Privatisation of public assets is another disaster-prone policy prescription with the intent of selling off state assets to foreign and local bidders to raise funds for bridging the deficit and making efficient hitherto inefficient state enterprises. Privatisation, be it of PTCL or KESC in Pakistan or the US oligarchs stripping Russia of its most valuable assets in 1995, has predictably led to massive unemployment. In Russia's case, it halved its national output. Nevertheless, this exercise proves quite lucrative for the parties involved on both ends: to the government officials, through the possibility of commissions for shaving a few billion off the sale price; and to the bidders, for buying state assets at dirt-cheap prices. Still the worse implication is private interests taking predominance over the social good. These investors, be they foreign or local, have no genuine stakes in the country or motives to benefit the local economy.

Yet the most damned of all prescriptions and IMF's most essential tool for pushing its neo-liberal agenda is trade liberalisation. Free trade ideals dictate that key to economic growth lies in unrestricted access for imports and foreign investment. Whereas empirical evidence suggests the opposite; extensive regulation of foreign capital by a country's government is a prerequisite for all developing countries to attain sustainable economic growth. Be it Britain, the US or China; they all built their industrial infrastructure by installing extensive trade barriers to protect their economy from the influx of foreign goods that would have rendered the domestic industry uncompetitive. Just imagine the havoc it will wreak on the local economy when the government withdraws all incentives in the form of subsidies and tax breaks to domestic producers, while simultaneously allowing the inundation of our markets by superior quality foreign goods.

In conclusion, the one result IMF agreements can unequivocally ensure is the continued dependence of the borrowers. However, Pakistan should learn from countries like Argentina that realised this eventuality and made a clean break by choosing to default. Indeed papers written by IMF advisors state that the only conclusive implications of default are a loss in the country's creditworthiness over the short-term and disgrace for the government. Surely, these pale when comparison with the damage a continued relation with the IMF will confer. Pakistan is in the midst of a crisis, but it is not economic; it is a crisis of vision and political will.

What our government should be occupied with is not signing loan agreements and giving way to further IMF dictation, but designing innovative plans to attract foreign investment and forging partnerships of mutual benefit with other nations to partly address its immediate liquidity needs. Since 1988, Pakistan has been tied to IMF programmes, the country can only be rescued from this downward spiral of IMF dictation -- debt dependence -- if our leaders brave the 'disgrace' of default (if need be) in favour of embarking the nation on a journey of deep seated structural and institutional reforms, and consequent economic sovereignty.

Compelled by a worsening balance of payment (BoP) position, falling foreign exchange reserves and drastic devaluation of the domestic currency, Pakistan is knocking at the door of the International Monetary Fund (IMF) for capital inflows. Therefore, it is high time to look into the possible implications of IMF assistance for poor and low-income segments of the Pakistani society.

The IMF provides temporary financial assistance to countries facing a BoP crisis. In providing support to its members, the Fund requires of them to pursue policies aimed at improving the BoP or external payments position. In other words, IMF assistance, which is provided in tranches, is linked with the borrower's progress in executing policies designed to restore fiscal balance, both foreign and domestic. Therefore, IMF-sponsored policies are also referred to as 'structural adjustment programmes' (SAPs).

As in the case of Pakistan during the 1990s, these programmes lay emphasis on reducing fiscal deficit, devaluating domestic currency, having a flexible exchange rate, liberalising trade and investment regimes, privatising state-owned enterprises, tightening the monetary policy and deregulating the economy. The ideological basis of these IMF prescriptions for 'growth' and 'stability' is the Washington Consensus. The central idea is that market liberalisation leads to growth and stability, while state intervention breeds stagnation. Importantly, income distribution or inclusive growth is neither part of IMF conditionalities nor of the Washington Consensus.

The ongoing global economic crisis has exposed many weaknesses of the Washington Consensus as a guide to economic policymaking at the national level. However, for the IMF, it continues to be the road to 'growth' and 'stability'. Coming back to Pakistan, the government recently announced a package under which the country's fiscal deficit would be reduced to 4.3 percent of gross domestic product (GDP), from 7.7 percent in the last fiscal year. Though the package is being termed 'homegrown', it was actually drawn up after negotiations with international lending institutions. The use of IMF funds will ensure that the economic bailout package is implemented to the satisfaction of these institutions.

To reduce the fiscal deficit drastically, the government will have to reduce public spending on the one hand and increase public revenue on the other. Public spending has two components: current expenditure and development expenditure. In the case of Pakistan, four major heads under current expenditure are 'debt-servicing', 'defence', 'subsidies' and 'general administration'. Debt servicing is an obligation that the government owes to its creditors, so nothing much could be done about it. The huge defence expenditure, on the other hand, is rooted in the country's political system that is dominated by the armed forces, no matter which party is in power. Therefore, one can safely rule out the possibility of any considerable cut in the defence expenditure too.

The recent expansion of the Cabinet, bringing the number of federal and state ministers to 55, as well as the creation of seven new ministries / divisions, makes it obvious that any reduction in the expenditure on general administration will be close to impossible. Hence, if there are to be any drastic cuts in public spending, subsidies and development expenditure will be targeted. As a testimony to this, the government has already withdrawn subsidy on petroleum products. It has also announced phasing out of subsidy on power by the end of the current fiscal year (June 2009), besides considerably reducing the development expenditure, or the Public Sector Development Programme (PSDP).

The withdrawal of subsidy on petroleum products and power will hit hardest the poor and low-income sections of society, because this will increase prices and reduce their real incomes and purchasing power. However, in case the government withdraws the subsidy given to the Pakistan International Airlines (PIA), the low-income sections will not be affected; only rich people travel by air in Pakistan. In comparison, the withdrawal of subsidy on petroleum products and power will directly affect the poor.

Cuts in the development expenditure mean that the already meagre allocations for public health and education facilities will be further reduced. Since the major beneficiaries of public health and education facilities are low-income groups, they will suffer the most. Not only that, access to basic amenities like safe drinking water and sanitation will become even more difficult. Again, the low-income sections of society will be the major victims.

Pakistan has one of the lowest tax to GDP ratios (less than 10 percent) in the world and the government wants to increase it to 15 percent with a view to increasing public revenue and, thus, reducing fiscal deficit. Two options are available to the government for increasing tax revenue: one, to broaden the tax net, for instance, by taxing agricultural income or levying capital gains tax (CGT); and two, to increase the rate of existing taxes. For reasons political, the first option has never been explored in Pakistan. As a result, those who already pay tax -- the salaried class -- have been burdened with more and more taxes over the years.

The government can substantially raise tax to GDP ratio by taxing agricultural income or levying CGT, though the latter may not be advisable in the current circumstances. Yet, when the stock market returns to normal, CGT should be imposed immediately. Advisor to the Prime Minister on Finance Shaukat Tareen has also hinted at levying agriculture tax, but the fact that the ruling party draws its strength from the landed gentry means that such a move will be difficult to materialise. Hence, in all probability, the salaried class will have to withstand the worst of government efforts to shore up the country's tax revenue.

It may be recalled that the budget for the current fiscal year levied additional taxes of Rs77 billion. Of these, Rs48 billion would be collected in the shape of indirect taxes, which raise the final price of a product because the burden is shifted to the consumer. Since essential goods have inelastic demand, increase in general sales tax (GST) will increase their prices without reducing their consumption. This will result in more inflation. When an economy is facing strong inflationary pressures, it is advisable to increase direct taxes, preferably by broadening the tax net, rather than indirect taxes, because the latter tend to be inflationary. Moreover, Pakistan's direct tax to GDP ratio is as low as only 4 percent.

However, because IMF conditionalities do not address the issue of income distribution, the government will not be required to ensure that the efforts to reduce the fiscal deficit do not adversely affect the low-income and salaried classes. Devaluation of the domestic currency is another IMF conditionality. The idea is that devaluation, by making exports cheaper and imports expensive, helps reduce trade and current account deficits. Since the rupee has already depreciated drastically, further devaluation of the domestic currency may not be required. The effects of devaluation on foreign trade depend on price elasticity of demand for exports and imports. Exports go up and imports come down if they have elastic demand. Since demand for necessities, such as wheat and oil, is inelastic, depreciation means that these will be imported at a higher price. This again will hit hardest the low-income sections of society.

Trade liberalisation, another component of the IMF-sponsored package, has both beneficial and harmful effects. Reduced tariffs can help make exports competitive by reducing the cost of imported inputs. In that case, export promotion will generate both jobs and income. However, trade liberalisation may also lead to de-industrialisation, because domestic firms may be priced out by cheaper imports. The result will be loss of jobs as well as incomes. In the last one decade, Pakistan's trade deficit has increased from $2 billion to $21 billion, which means that the country's imports have grown at a much faster pace than exports since the advent of trade liberalisation. To conclude, it can be said with certainty that the IMF's conditionalities will strike at the interests of salaried and low-income classes. Whether it is increase in public revenue or cuts in development expenditure, mainly these vulnerable classes will be bearing the brunt.