pak-afghan 
The talk over talks
The Hamid Karzai-Nawaz Sharif talks may not have achieved much in matters concerning security, but progress was made in terms of economic cooperation
By Rahimullah Yusufzai

President Hamid Karzai’s keenly awaited visit to Pakistan had raised expectations, particularly in Afghanistan, of a breakthrough in repairing the strained ties between the two neighbouring Islamic countries, but there is no indication yet that it has achieved something tangible.

Sooner rather than later, we could again start hearing complaints from Kabul that Islamabad wasn’t cooperating in stabilising Afghanistan by putting pressure on the Afghan Taliban to join the peace process.

That has been happening for some years now and could happen again as Kabul’s expectations are far beyond Islamabad’s capacity to deliver.

Realising the complexity of the relationship with Pakistan, Karzai had tried to play down the expectations by remarking before his departure for Islamabad that he remained hopeful but wasn’t sure of the success of his visit. He extended his one-day visit by a day and Prime Minister Nawaz Sharif promptly decided to host him in the serene and pleasant environs of Murree to provide a better setting to their talks.

It was obvious that both sides made efforts to make the visit successful, but the deep mistrust — between the two governments and their security institutions — cannot be overcome in one visit and a few sittings.

Since his installation as President in December 2001 by his US-led allies, Karzai had paid 14 visits to Pakistan. His 15th visit was undertaken after 18 long months, unlike his previous trips that were made at regular intervals. However, the two countries weren’t so estranged then and there were hopes that something better would emerge from their frequent engagement with each other. That promise didn’t materialise as the security situation in Afghanistan deteriorated due to the strengthening Taliban resistance despite the gradually expanding presence of the Nato forces.

After Sartaj Aziz, advisor on foreign affairs and national security to Prime Minister Nawaz Sharif, had personally delivered an invitation to the Afghan President to visit Pakistan, reports from Kabul indicated that Karzai was reluctant to undertake the trip unless there was an assurance that it would be beneficial. Eventually, he agreed to come to Pakistan as a new government had been installed after the elections and Prime Minister Nawaz Sharif had made positive statements with regard t o improving ties with Afghanistan.

Afghan government officials, however, insisted on having a proper agenda for the talks addressing Kabul’s concerns.

They argued that there had been much talk and little action by Pakistan with regard to closing the safe havens for the Afghan Taliban on its soil and pushing the Taliban leader Mulla Mohammad Omar to agree to peace talks with the Afghan government. Pakistan’s protestations that it was doing everything within its means to help restore peace in Afghanistan and bring the Taliban to the negotiation table fell on deaf ears in Kabul.

In fact, the situation was hardly conducive for the Karzai visit. It became possible on initiative of Nawaz Sharif, who after his decisive victory in the May 11 general election appeared to be in a hurry to initiate steps to mend fences with both Afghanistan and India.

In context of Afghanistan, he felt Islamabad needed to play a more active role in the Afghan peace process — not only to stabilise the war-ravaged country but also to reduce its negative fallout on Pakistan.

However, the repeated anti-Pakistan statements by Afghan government functionaries created bitterness prior to the Karzai visit. The Afghan National Army chief General Sher Mohammad Karimi argued that everything was in Pakistan’s hands as the Taliban were under its control and there would be peace in Afghanistan if Islamabad so desired. Karzai’s close aide Karim Khurram alleged that the opening of the Taliban office in Qatar in which Pakistan and the US played a role was aimed at dividing Afghanistan.

One of the expectations from the visit was the release of more Afghan Taliban leaders being held in Pakistan as a follow-up to Islamabad’s decision last year to free 26 of them on the request of the Afghan High Peace Council. Salahuddin Rabbani, the son and successor of the council’s founder Prof Burhanuddin Rabbani who was killed by a Taliban suicide bomber, had publicly stated that he would be seeking release of the remaining jailed Afghan Taliban leaders, including the movement’s former deputy head Abdul Ghani Biradar.

As Pakistani officials had already promised to release him and others, there isn’t any visible hurdle to freeing them except the concerns by the US that they could return to the battlefield and, therefore, a system needed to be devised to keep track of them. The detained Taliban could be freed in due course of time once the modalities have been worked out.

The suggestion in sections of the media that Biradar would be handed over to Karzai and flown to Kabul was naïve because Pakistan risked annoying and alienating the Taliban if he was given into the custody of his Afghan enemies. If Islamabad has its way, it would insist on releasing the rest of the Taliban leaders in Pakistan and leaving it to them whether they want to travel to Afghanistan and hold talks with the Afghan government. None of the 26 previously freed returned to Afghanistan or held talks with Kabul. There is little possibility that Biradar and the rest would do so once they are freed. Besides, one has to keep in mind that the Taliban leadership doesn’t allow any of its freed men to represent it at any forum even if they held top positions in the movement in the past.

The visit may not have achieved much in matters concerning security, but progress was made in terms of economic cooperation. Nawaz Sharif made particular mention of this aspect of the Pak-Afghan relationship during his joint press conference with Karzai, who focused more on Kabul’s expectations of Pakistan’s cooperation in the Afghan peace process. Foreign Minister Ishaq Dar and his Afghan counterpart Hazrat Omar Zakhelwal signed an agreement to carry out joint projects and increase trade and economic cooperation. A significant joint initiative is building a hydel-power project on the river Kunar. Earlier, there were reports that India could be asked to build this dam. This had upset Pakistan. This project would also hopefully resolve the issue of water-sharing of river Kabul and mutually benefit from their water and hydel resources.

Other proposed projects include building a motorway from Peshawar to Kabul and expediting work on laying railway track also from Peshawar to Kabul. Pakistan promised to complete development projects that it had earlier promised. This includes the construction of the second Torkham-Jalalabad road as Pakistan has already built one such road. Pakistan would also build power lines to bring electricity from Tajikistan and Kyrgystan to Pakistan via Afghanistan. On its part, Afghanistan promised to facilitate Pakistani exports through its territory to the Central Asian states.

Pakistan promised to address Afghanistan’s concerns with regard to the existing trade and transit issues within two weeks.

One would have to watch out for any progress on the security front as it is possible some understanding was reached but wasn’t made public. In Kabul, a meaningful statement was issued by Karzai’s spokesman to the effect that the Afghan government was looking forward to the implementation of the decisions made in the Karzai-Nawaz Sharif meetings.

With only seven months left in his second term as President of Afghanistan, Karzai is desperate for access to the Afghan Taliban leaders so that he could hold talks with them in the hope of peacefully ending the Afghan conflict. He believes Pakistan is the key to peace in Afghanistan, though there is little evidence to suggest that the Taliban would take dictation from Islamabad and take care of Pakistan’s interests rather their own.

policy
Rethinking anti-terrorism strategy
The government is still struggling to come up with a coherent strategy that could define the approach that many different government agencies need to follow
By Helal Pasha

Amid certain hesitancy, numerous approaches, number of drafts, and advices from various defense analyst and public intellectuals, the Prime Minister Nawaz government is still struggling to come up with a coherent strategy that could define the approach that many different government agencies need to coordinate and follow in the field. The problem is that the government has embarked upon such a long spiel that it has lost the way. The policy does not need a long preamble explaining the causes of terrorism in Pakistan. Most Pakistanis already know them.

The purpose of the policy should be defining actionable plans to counter the domestic terrorism effectively. The domestic terrorism does not require a counter insurgency strategy; neither does it need the whole population to get ready to scarify its time and lives defending the motherland from terrorism. All it needs is creating awareness in the general populace and developing a system that people can understand and know whom to contact upon watching some suspicious activity. The army’s intervention is mostly not required. The civilian law enforcement agencies can be sufficiently trained to handle individual suicide bomber or a terrorist attack by a few individuals.

Over the years, successive Pakistan governments have looked at domestic terrorism as insurgency in a foreign land. The US was dealing with the insurgency in two foreign lands, while for Pakistan no terrorist is foreigner. They are all homegrown, and they should have always been treated as such.

The defense analysts, in their borrowed wisdom, also fall in the same trap. The analysts want to follow the US COIN model or other counter-insurgency programmes, where the US army takes the primary role. They completely ignore the US domestic counter-terrorism approach that has no role for the army. That should have been the model for Pakistan from day one.

Pakistan’s terrorism problem is three and half dimensional. The first dimension and the most prominent group is Pakistani Taliban from Fata. The second and half dimension is Punjab-based sectarian outfits and former Jihadi who took part in battles in Kashmir. The last dimension consists of various warring groups including the Taliban and sectarian militants based in Karachi. There might be some splinter groups, but all law enforcement agencies are aware of these groups. Knowing their background and ideological commitment is completely irrelevant from the law enforcement point of view. They are all involved in terrorism and should be treated as terrorists.

Now look at the approach the US took after the heinous attacks on September 11, 2001. The US first decided to beef up its internal security system. The US national anti-terrorism policy has two aspects: visible and invisible.

Visible features were not about creating roadblocks at every turn or stationing ill-equipped police officers to search the cars. The US instead created a highly visible airport security system under Transport Security Administration. To enhance the public awareness, the US government initiated a colour-coded alert system that was given prominence in the media. As the colour codes moved up, more people showed interest in their surrounding. The people, within a short period, were fully attuned with the government efforts in national security.

The airport security system was not catching many terrorists. The system instead alerted everyone including the would-be terrorists that the internal security is always on high alert and they have a little chance of getting away with anything evil. Any report of mistreatment of passengers at the airports that appeared poor public relations, also sent a message to bad guys that the security personnel at the airport are no-nonsense and discourteous bunch that do their job no matter what.

The visible aspect of security worked as significant psychological deterrence. The invisible part actually grabbed the suspects before they could even get close to doing anything.

The Federal Bureau of Investigation (FBI) was the lead agency aided by several other non-uniform agencies and the local police that took part in the invisible side of the counter domestic terrorism policy. The agencies first identified potential groups that could be, for various reasons, inclined towards terrorism. Once identified, the congregation places of these groups were first placed under surveillance. The second part was penetrating the groups.

Both the surveillance and penetration identified the individuals for careful monitoring. New York was the focal area of this programme, but over years the programme was implemented all over the country.

The US have many right wing groups involved in domestic terrorism; they were all brought under this programme. With this tight programme hardly any would-be terrorist got out of the civilian agencies’ sight. Some individuals managed to fall through the surveillance programme, but they were far and few. Overall the US has been successful in controlling domestic terrorism to almost zero in the last 12 years.

Pakistan clearly does not have the resources that the US can muster. Pakistan does have a civilian intelligence network. Pakistani police has deep reach in the communities. Given some confidence and resources, they can deliver suspects before they turn into hardened criminals. Prime Minister Nawaz Sharif is right in lifting the ban from hiring in Intelligence Bureau. These are the intelligence units that need patronage from the state.

The agencies in Pakistan have many advantages. They already know the groups, where they live, operate, the masterminds behind the terrorists, and their local patrons.

With nearly all Pakistan now covered with radio, television network, it is not difficult to set up a visible terrorism awareness programme to increase citizen’s participation.

Provinces have a greater role in law and order maintenance. They cannot be left alone to deal with terrorism. The federal government has to step in and ensure that they are actively pursuing and have the resources to catch the terrorists before any possible act. The Punjab government cannot sit silent while the Punjab-based sectarian groups create mayhem in Balochistan and Sindh. Punjab should tighten the noose around the areas where terrorists congregate and recruit. Those areas should be blanketed with intelligence, police and armed paramilitary forces.

Similarly, Sindh and Balochistan governments should take an identical approach. KPK has major problems. The federal government will have to make sure that all known or unknown crossing points from Fata are monitored adequately. Satellite monitoring and quick response units should be established for KPK and Fata.

Finally, please do not throw ill-equipped police officers at the mercy of terrorists at roadblocks. Have some experts design the roadblocks in such way that no vehicle comes in direct contact with police officers until all its occupants have stepped out and are at a safe distance from the police officers.

Chronic ‘debt dependence’
Bailouts by donors will not serve the purpose unless the government puts its own house in order
By Huzaima Bukhari & Dr Ikramul Haq

All is set for the executive board of the International Monetary Fund (MF) to consider Pakistan’s request for a fresh bailout package on September 4, 2013 after Islamabad has purportedly “fulfilled all prior requirements” — the IMF has already circulated amongst members the Letter of Intent (LoI) it received from Islamabad. Reportedly, though the IMF has agreed to provide $6.6 billion under the Extended Fund Facility (EFF), Islamabad is insisting on $7.3 billion confirming its insatiable ‘debt addiction’.

Finance Minister Ishaq Dar, in a news conference on August 26, 2013, revealed that “in the first year, the IMF will give $2.2 billion while we have to pay back over $3 billion.” He conceded that Pakistan had no option but to borrow $12 billion “to retire its previous debts”. Dar said the “most vital precondition of the IMF for broadening of tax base was fulfilled as the Federal Board of Revenue (FBR) had already issued 15,000 notices to potential tax dodgers.”

The lingering and deepening economic crisis, especially bourgeoning fiscal deficit, has been eroding Pakistan’s capacity to repay huge external loans of over $60 billion with fast diminishing foreign reserves. The IMF, having enormous stakes in Pakistan before agreeing for fresh tranche, expressed anguish and dissatisfaction over the FBR’s performance — in particular what it calls fixing ‘ambitious targets’ and then missing the same with a wide margin every year. The dismal performance of the FBR — it collected only Rs1940 billion against the original target of Rs2381 billion for 2012-13 pushing the fiscal deficit to 8.8 per cent of GDP — worried the IMF about repayment of its outstanding debt of $6.4 billion. The fresh bailout is, thus, nothing but to thwart the obvious default.

The IMF’s compulsion to offer yet another EFF to Pakistan is inevitable as foreign exchange reserves are dwindling and agreed schedule for repayments of $7.6 billion till the end of 2014-15 by Pakistan is in jeopardy. Pakistan’s $11.3 billion Stand-by Arrangement (SBA) with the IMF expired on September 30, 2011 with last two tranches of $3.7 billion could not be paid following Islamabad’s failure to implement key reforms coupled with fudging of revenue figures.

Pakistan opted for $11.3 billion SBA in 2008 and got disbursements of about $7.6 billion, but failed to get the remaining $3.7 billion due to lapses in performance criteria, leading to suspension of the programme in May 2010, and final unsuccessful ending on September 30, 2011.

In the current fiscal year, the FBR is assigned a target of Rs2475 billion. Like previous years, the FBR is claiming to cross the target! Experts are doubtful in view of recession and weak enforcement capabilities of the FBR. The track record of the FBR shows that it has perpetually missed targets for the last five years. The performance of the FBR is puzzling for the IMF and other donors as in the past World Bank provided $100 million for five-year-long Tax Reforms Administration Program (TARP) and on conclusion tax-to-GDP ratio declined from 11 per cent to 8.2 per cent and tax gap increased from 75 per cent to 150 per cent.

Strangely, after wasting billons in the name of reforms, the FBR is showing helplessness to enforce tax laws. Every now and then the FBR’s big bosses claim “we possess data of all the rich persons who spend millions but have never filed tax declarations.” Why they do not take action against these tax cheats is best known to them. They admit in private that about 70 per cent of legislators are tax cheats.

Pakistani tax cheats have just to approach money exchange companies that fix fake remittances for a small premium and no question can be asked by tax authorities about the source — in the presence of such a facility, their claim is why we should pay tax at the rate of 25 per cent! Tax evasion has legal protection in Pakistan and legislators are to be blamed as well.

There are about 125 million mobile users in Pakistan, out of which at least one million, if not more, expend Rs60,000 or above per annum but never bother to file tax returns. If they are taxed on their real incomes, total tax from them would not be less than Rs5000 billion. The real tax potential of Pakistan is not less than Rs8 trillion — direct taxes of Rs5 trillion and indirect of Rs3 trillion — but the government is begging for money both externally and internally. Nobody questions the enormous tax benefits available to Riasti Ashrafiya (State Oligarchy) — ‘Public parasites’, The News, July 21, 2013.

No doubt that the FBR should improve its enforcement capacity to detect tax losses, but it suffers from “helplessness” caused by obnoxious provisions like section 111(4) of the Income Tax Ordinance, 2001. The corrupt legislators through such provisions protect themselves — their main assets are banami [in fake names]. With such laws and innumerable Statutory Regulatory Orders [SROs] they serve the interests of mighty segments of society.

Ordinary people ask why they should file tax returns when their president, prime minister, ministers, governors and elected representatives give damn to it. The outgoing president, since his election on September 6, 2008, never bothered to inform the nation from where he got $60 million (unfrozen in Switzerland), let alone pay any tax on this colossal amount. Before taking oath of president, he did not declare his assets and liabilities and evidence of payment of taxes wherever due. The same is true with present rulers and many other politicians. We have written time and again in these columns that the tax culture in Pakistan will never take roots unless tax and asset declarations of all the mighty segments of society — politicians, high-ranking military and civilian officials, judges and all public office holders — are made public [Taxation challenges, The News, June 9, 2013].

There should be a public campaign that absentee landlords, most of whom are members of parliaments and their siblings are members of militro-judicial-civil complex, should reveal how much agricultural income tax was paid by them and their near and dear ones. All the judges, high-ranking public servants, including serving and retired generals, should also be required under the law to make public how many plots they received during service, what are total assets owned by them and their family members and how much tax was paid annually.

Any person who is a tax delinquent or has been beneficiary of any loan write-off should be debarred from contesting elections. All kinds of exemptions and concessions provided under various tax codes should be withdrawn.

The tendency to squeeze more and more from the existing taxpayers and giving a free hand to non-filers has eroded the tax system to an extent where voluntary compliance and tax enforcement have lost their relevance. The present tax system imposes greater and undue burden on the poor and middle-class people (e.g. 17 per cent GST takes larger portion of low-income groups compared to high income groups). The rich and mighty are not paying agricultural income tax and income tax on their non-agricultural income. Most of them are landowners-cum-industrialists-cum-politicians and are engaged in massive tax evasion — case of cartelisation and tax evasion bonanza in sugar industry is a classic example.

Adding insult to injury, the tax collected from the citizens is wasted on unprecedented privileges and perquisites meant for elites — militro-judicial-civil complex, landed aristocracy, industrialist-turned politicians and unscrupulous businessmen.

We will not come out of present mess unless control of resources vests with people instead of elites. Institutions like the FBR serve the interest of mighty classes. They would continue to do so till the time people of Pakistan exert pressure on provincial governments to devolve fiscal and administrative powers at grass root level to local self-governments. Fiscal decentralisation and municipal self-governance can end dependence on federal government that is epitome of bad governance.

As regards reforming the FBR, as a first step the posting of chairman and members should be made through public hearings by a joint committee of Senate and National Assembly and not on the whims and dictates of the ruling political party headquarters. All kinds of loopholes in tax laws should be plugged by proper legislation. No executive authority should have powers to amend tax laws through infamous SROs.

Through public debates and democratic processes, the Parliament should pass rationale and workable laws after taking inputs from all the stakeholders and experts in the field. There should be zero tolerance in respect of enforcement of tax obligations across the board without any fear or favour. Tax collected should be spent for the welfare of the masses and not for the luxuries of state oligarchy.

The writers, tax advisers and author of many books, are Adjunct Faculty at Lahore University of Management Sciences (LUMS)