A project delayed…
NWFP has not been able to make full use of its share of water due to insufficient budgetary allocations. Chashma Right Bank Canal is one case in point
By Tahir Ali
Inordinate delay by the federal government to give approval to the revised Chashma Right Bank Canal (CRBC) project is damaging and hampering agriculture development in the Frontier province. Federal Finance Minister Shaukat Tarin and other federal government functionaries have been repeatedly making promises that the project would be approved. But there has been little or no tangible development on the issue so far. The delay has also increased the cost of the project. In 2005, when it was first approved, its cost was estimated at Rs 25 billion, which has now gone up to Rs 61 billion this year. Further delay may push up the cost much higher.

market
Keys to creativity
Lots of opportunities exist for innovation and entrepreneurship to thrive in developing countries like Pakistan
By Bilal Ilahi
The global financial meltdown of the past two years signifies the end of the cradle-to-grave security offered by corporate jobs. The brave new world of tomorrow belongs to entrepreneurs and innovators, those who anticipate and fulfill society's needs creatively. Innovation has become the buzzword of our times and not without reason. Businesses, both large and small, see it as key to increased profits and market share. Governments automatically reach for it when attempting an economic turn-around.

Connecting the dots
In Pakistan, the tendency towards interdisciplinary research within the social sciences still seems negligible
By Rafi Ullah
"We are not students of some subject matter, but students of problems. And problems may cut right across the borders of any subject matter or discipline." Karl Popper
It is often complained that social sciences are neglected in Pakistan. However, their rigid compartmentalisation has added a much graver dimension to the already dismal state of social and societal knowledge here. It is even truer in case of the two postulated correlated disciplines dealing with human past namely, history and archaeology.

The World Bank, International Monetary Fund (IMF) and Asian Development Bank (ADB) typically assert that their brand of 'economic reform' is necessary to correct the 'distortions' that abound in third world economies; without removing these 'distortions', the technocrats say, the establishment of well-functioning markets will remain a pipe dream. In practice, the policies championed by the international financial institutions (IFIs) have reinforced the unbearable extortionist logic of capitalism by introducing new kinds of 'distortions' in price and labour markets.

The recent increase in diesel and petrol prices is a perfect example. A decade ago, high-speed diesel costs Rs 10 per litre. The recent hike to Rs. 70 per litre means that there has been an incredible 700 percent increase over a 10-year period. If one were to take the logic of the IFIs at face value, this seven-fold increase actually represents an efficiency gain because the previous price was not an accurate indicator of the real value of diesel in competitive market conditions.

Of course, this sounds very neat and tidy, as do most invocations of textbook economics. In real life perfectly functioning markets do not exist. In fact, what conventional economists call 'market failure' is the norm rather than the exception. Many economists are now willing to admit this but this does not stunt their commitment to 'competitive' markets: they simply argue that the perfectly functioning market represents an 'ideal-type' and that the point is to get as close to the ideal-type as possible.

So, to return to the diesel example, Rs. 70 per litre is just the tip of the iceberg. The price of diesel will continue to rise steeply, an epic quest to approximate the perfectly functioning market. When will the price increase stop? Left to its own devices, the 'market' itself will produce a stable equilibrium. Again the language is compelling, but the practical implications far less so.

The regular resort by the 'experts' to Smithian metaphors of the 'invisible hand' of the market aside, it is human agents that made the decision to hike diesel prices. Markets do not function perfectly because there are explicitly political factors that influence how markets come into being, how they develop, for whose benefit and to what end. Marx made it very clear when he broke with conventional bourgeois economic orthodoxy: the separation of politics and economics which underlie mainstream approaches is an obfuscation of epic proportions.

The IFIs do not propose 'distortion-correcting' policies in first world economies even though the argument for such policies to be enacted in certain first world economies is much more compelling than in much of the third world. One cannot help but focus on the United States to make the point clear.

The US fiscal deficit is in trillions of dollars, a figure that is difficult for most of us to even read with all the zeroes involved. The US has a trade deficit that also runs into the trillions. The financial crisis has underscored what many people already knew: that the American economy is a shambles, the vast majority of American households mired in credit card debt, and price and labour markets distorted to no end. Americans inhale petroleum, and until quite recently most purchased petrol (or what they call 'gas') at unbelievable prices, sometimes less than a dollar to the gallon (a gallon is 3.78 litres). Over the past few years the American public has been jolted by a two to three-fold rise in petrol prices, primarily due to the rise in petroleum prices internationally; a fleeting case of market distortions being corrected, so to speak. But did the IMF or its sister institutions insist that much more 'correction' was required?

The answer to the question is an emphatic 'no'. The explanation is banal: the IMF is actually a wing of the US Department of Treasury, the World Bank president has to be American, and in general IFIs' decision-makers overwhelmingly represent first-world interests. The IFIs did not respond to the financial collapse within the US with the same prescriptions as they did to Mexico or Russia's crises in the early and mid-1990s, or to the East Asian financial meltdown in 1997. Everyone now knows that the IFIs protected speculators and foreign investors in the wake of those events. Presumably, it did not intervene this time because the US government was already doing quite a bit for the very same interests. Marx's simple hypothesis that politics and economics are two sides of the same coin comes to mind.

The meltdown of third world economies is likely to continue. In Copenhagen this coming week, the first world will once again demonstrate its complete disregard for the ecological, political and economic disasters that are unfolding across the planet, the brunt of which has been and will continue to be borne by the peoples of the third world. There will be some outrage expressed by the usual suspects and doomsday scenarios will be bandied about. But ultimately, after a brief interlude, the IFIs will resume their civilising mission, replete with jargon about market imperatives, responsible and professional economic management and various other technocratic fantasies.

Our Shaukat Tareens and Naveed Qamars will continue to own the privatisation and liberalisation prescriptions of the IFIs as if they actually fashioned the terms themselves. Meanwhile, the political and economic structure that needs to be overturned -- or at the very least reformed if Pakistan's working people are to be given some of the fruits of their own labour -- will remain unchallenged, or even worse, unmentioned. Here again, it is necessary to reiterate that our economic woes are intimately interlinked with the configuration of political power. It is almost foolish to expect that any incoming government that does not make a complete break with imperialist powers, the military-bureaucratic oligarchy and the propertied classes will be able to effect any meaningful economic uplift of our people.

Thus, the continuing decay of formal institutions is unlikely to be arrested whereas the informalisation of the economy and the 'shadow' state will accelerate. On this account, too, IFI orthodoxy is completely at odds with real experience. I have mentioned on these pages before that it is essential that the informal economy be mapped, trends understood and meaningful interventions conceived by government. But even this basic requirement I feel is likely to be met only when a substantive political challenge to status quo is mounted.

Common man has again been struck by the increase in petroleum prices, and this when he is already grappling with the sugar crisis and the talk of an 18 percent increase in electricity and gas charges is in the air. However, OGRA justifies the decision saying that since international oil prices have increased, local oil prices have been revised accordingly.

Instead of providing relief to the inflation-hit consumers, Oil and Gas Regulatory Authority (OGRA) announced an increase of Rs 4.37 (or 7.1 percent) on petrol per litre and an increase of Rs 5.73 per litre (or 8.84 percent) in the price of high speed diesel (HSD). Diesel is the most consumed petroleum product in Pakistan as a huge volume of this product is used by the transport sector. The prices of HOBC rose by Rs 4.93 to Rs 80.52, kerosene by Rs 4.76 to Rs 62.63 and light diesel oil by Rs 5.25 to Rs 60.22.

The OGRA notification states that the impact of oil prices in the international market has been passed on to the consumers. The government has already authorised the Authority to determine prices of petroleum product from July this year. Although the international prices of petroleum products have increased to some extent, the government could have avoided the recent increase, keeping in view the mounting inflation rate.

Many people feel the petroleum prices in the country are already high. Even the Indian government has recently hinted at reducing petroleum prices by Rs 7.50 per litre. But Pakistan has an edge. It buys oil from Saudi Arabia and Kuwait on easy terms. But it is common observation that the government is not considering peoples' problems before taking such decisions.

Federal Finance Minister Shaukat Tareen, in a press conference in Islamabad last month, had said that the government was planning to withdraw subsidies and that electricity rates might be increased by 18 percent by April next year. This was agreed after two rounds of negotiations with the IMF in Dubai. In the first stage, from January 1, 2010 there will be an increase of 12 percent in electricity prices, whereas in the second, there will be a further 6 percent increase from April 1, 2010.

Independent economists and analysts believe that in order to meet the growing budget deficit, and its failure to generate targeted revenues, the government has increased the fuel prices as it is an easy way to generate funds. The government charges Rs.10 per litre levy on petrol, Rs. 14 on HOBC, Rs. 6 on kerosene, Rs 3 on light diesel oil and Rs 8 on HSD.

"Recent increase in petroleum prices would also adversely affect both the industry and trade," says Dr. Shahid Hasan Siddiqui, a senior economist and Chairman of Research Institute of Islamic Banking and Finance. Talking to The News on Sunday (TNS), Siddiqui points out that Pakistan's large scale manufacturing sector is already showing negative growth and exporters feel pressure due to increasing input costs, of which fuel is a major part."

With the increase in transport fares, prices of commodities, including raw material costs automatically increase. Dr. Siddiqui fears that the inflation rate, which has been curtailed in recent months, will again rise. "Earlier, the government had set a target of reducing the inflation at 8-9 percent. But now, because of increase in petroleum, electricity and gas charges, the inflation will be around 12 percent," says Dr. Siddiqui.

He maintains the export sector will suffer the most as the cost of production has already increased with increase in electricity and gas rates, thus affecting exports -- "Industries in Pakistan are already showing dismal performance, particularly due to lack of investment and law and order problem."

Some factors are stated for the government to have taken this step. Funds committed by Friends of Democratic Pakistan have not arrived within the stipulated time. The government is incurring huge expenditures on maintaining law and order due to terror activities in the country. Although the US has pledged US$ 1.5 billion annual grant under infamous Kerry-Lugar Bill, the amount is still in the doldrums due to massive opposition from Pakistan Army and opposition political parties.

But the daily budget of common citizens has been badly affected due to increasing prices of essential items and transport fares. The transport sector is the most hard-hit by recent price hike in petroleum prices. In Karachi, the transporters have already announced a one-day strike on December 10 to press the government to withdraw the increase in petroleum prices. "We are well aware of common peoples' problems, so we do not demand another increase in fares. But the government should withdraw the recent decision," says Syed Irshad Hussain Bukhari, Chairman of Karachi Transport Alliance.

Talking to TNS, Bukhari says all the transporters associations of Sindh have assured him of cooperation on the occasion of December 10 strike. A hurriedly-called meeting of transporters association on last Wednesday lashed out at the government for creating problems for transporters. Transporters' associations like Sindh Air Conditioned Bus Owners Association, Sindh Bus Owners Association, UTS Operators Association, Metro Bus Association, Supreme Council of Pakistan Transporters, and Pakistan Goods Transporters Association had attended the meeting and unanimously decided to observe the strike, claims Bukhari.

Many transporters' associations of Punjab have also assured to support our strike call, he says, adding: "Profit margin of transporters has already decreased due to increase in prices of parts and diesel. We are already suffering huge losses due to payment of interest rates to the non-bank lenders as the normal banks do not extend credit to the transport sector." Bukhari warns that if the government does not withdraw the recent petroleum price hike, transporters will go on an indefinite strike.

Due to lack of pressure from the civil society and in the absence of any effective consumer protection law the common people feel helpless in such a situation. They regret that the political parties are not taking up the issue of price hike effectively. There is no check on government policies. Though a Consumer Protection Ordinance was presented three times by the Sindh governor, it lapsed on all three occasions because the government is not interested in bringing it in the provincial assembly. "In my view, the government has no will to pass the legislation," says Hamid Maker, Chairman Consumer Protection Council of Helpline Trust.

He tells TNS that the civil society organisations are pressing the Sindh government to pass the law which has already been passed by Punjab and Balochistan governments. There is a law in Islamabad as well."

politics

The release of incomplete list of beneficiaries of loan write-off to the tune of Rs. 60 billon during the self-acclaimed "transparent era" of Musharraf-Shaukat has once again confirmed the unholy alliance of bureaucracy, politicians, and businessmen against people of Pakistan. If complete data is looked at, it will be established that during the Musharraf rule, loans write-offs in just seven years (2000-2006) crossed the figure of Rs.125 billion, whereas in the much-publicised "corrupt eras" of elected governments (985-1999) it was just Rs. 30 billion.

The country's banks and other financial institutions wrote off an amount of over Rs 30 billion during the governments of Muhammad Khan Junejo, Benazir Bhutto and Nawaz Sharif. During the two tenures of Nawaz Sharif (1990-93 and 1997-99) total loans of Rs. 22.35 billion were written off; in his first tenure, a total of Rs. 2.39 billion were written off and during his second, the amount went up to Rs. 19.96 billion. The written off loans during the two tenures of Nawaz Sharif constituted approximately 74.5 percent of the total of Rs. 30.18 billion, written off between 1986 and 1999. During the two tenures of late Benazir Bhutto, a total of Rs. 7.23 billion loans were written off, constituting 24.2 percent of the total written off loans – Rs. 494.97 million in her first tenure and Rs. 6.74 billion in the second term.

During the Musharraf-Shaukat era, an unholy alliance of bankers, businessmen-cum-politicians and bureaucrats managed to plunder the public money through amnesty scheme from State Bank of Pakistan (SBP), whereas banks had liquid securities to recover the loans. The SBP in the suo motu case submitted before the apex court that amongst the beneficiaries of Circular No 29/2002 were two sitting chief ministers of PML (Q) regime. The ruling elite skilfully engineered the amnesty scheme to get the benefit of write-offs and a consequential concession in tax law for no-taxation of benefits derived, whereas the personal wealth of them kept on increasing.

All these beneficiaries of loan write-offs still possess assets worth billions of rupees. The criminal culpability of successive governments in this matter has tarnished the image of Pakistan in the eyes of global community as a haven for the corrupt and tax evaders. The apex court did not decide the issue of loan-write-offs though suo motu action was taken in 1996 and 2008. In 2008, according to press reports, the Supreme Court took serious notice of the fact as to how banks wrote off a staggering amount of Rs. 125 billion as "bad debts" during 2000-2006, against Rs. 30 billion written off during 1985-1999. According to reports, larger numbers of loans were written off under Circular No 29/2002, issued by the State Bank of Pakistan (SBP), of which major beneficiaries were politicians and industrialists.

According to a news report, the Supreme Court of Pakistan in October 1996, taking suo motu cognizance under Article 189 of the Constitution of Pakistan, took up the issue of loan write-offs and expressed the intention of studying all the laws in this regard. The apex court vowed to make authoritative pronouncement that "would eliminate the chances of misusing the laws for siphoning of public money". There is, however, no track of what happened to that public interest litigation case. It appears the same is still pending.

The said public interest litigation originated from a reference filed by the then President Ghulam Ishaq Khan against a PPP MNA Rao Rasheed Ahmad, who as a member of loan write off committee, blatantly ordered to write off a loan of his wife. There have been many such examples where the rich and mighty managed to plunder the savings of the have-not (small depositors) in a shameless manner. An unholy alliance of bankers, businessmen-cum-politicians and bureaucrats has destroyed the entire banking/financial system.

The politics of writing-off loans in this country requires proper investigation and study as it will unveil many "big names" that are responsible for corruption and failure of the democratic process in the country. The country lost billions of rupees in the form of public revenues because of bad debts written off by the banks on the directions of SBP. The Government of Pakistan, SBP and Federal Board of Revenue (FBR) never considered the report of Auditor General of Pakistan in this regard, showing loss to public exchequer of Rs. 120 billion issued far back in 1992. It is a matter of record that the Board of Revenue in the presence of this audit report from the Auditor General of Pakistan, issued another Circular instructions on February 4, 1993 vide its letter No. 13(26)/IT-1/79, giving further concessions to the banks. The cases relating to plundering of public money to the tune of billions and blatant abuse of powers by rulers and their henchmen pose a serious threat to the democratic culture.

The unscrupulous businessmen (most of them are now politicians and elected members), state functionaries and corrupt bankers joined hands to deprive this nation of billion of rupees and colossal public revenues. The big bosses of the SBP and FBR should be asked to explain who had asked them to issue "administrative instructions" in gross violation of law for loans write-offs and giving tax benefits to the beneficiaries. The inquiry into loans write-offs will reveal the modus operandi under which public money is siphoned off as well. If we want to establish true democracy in Pakistan, public money looted by the criminals should be recovered and all those who facilitated them should be punished.

The writers, tax lawyers and authors of many books, are visiting professors at the Lahore University of Management Sciences (LUMS).

Shady affairs of NRO

Thirty seven of the Musharraf-era ordinances lapsed on November 28 after the expiry of 120-day deadline set by the Supreme Court of Pakistan. Since the National Reconciliation Ordinance (NRO) was neither promulgated nor was converted into an enactment within 120 days, it also lapsed. Initially, the government introduced the NRO in the National Assembly, but subsequently withdrew it due to strong opposition, even from MPs belonging to political parties in coalition with the PPP government.

The NRO is seen by many as the outcome of three year long negotiations between the Musharraf administration and the PPP leadership, according to Humayun Gouhar, who is mentioned as author of Pervez Musharraf's autobiography, In the Line of Fire.

Gouhar says, General Musharraf was unwilling to grant amnesty to PPP leadership in corruption cases through the NRO, but Tariq Aziz and Chaudhry Shujaat pushed him for the NRO, perhaps thinking that Benazir's return to Pakistan would affect Nawaz Sharif's vote bank.

The NRO could not withstand rough torrents; collapsing immediately as the tide of opposition turned rough. After lapse of the NRO, amendments made in the National Accountability Bureau (NAB) ordinance through the NRO also stand reversed, reviving the NAB ordinance on pre-October 5, 2007 position and empowering the Bureau to investigate/arrest NRO beneficiaries, including politicians and parliamentarians.

The NRO's clauses 4 and 5 had amended Sections 18 and 24 of the National Accountability Ordinance, 1999, forbidding NAB to arrest any sitting member of the Parliament or a Provincial Assembly without taking into consideration recommendations of the Parliament's Committee on Ethics. Though Musharraf administration and PPP leadership had added this clause and amended the NAB ordinance, but none of them bothered to constitute the Ethics Committee, thereby practically eliminating chances for politicians being held in the accountability loop.

After regaining its powers, NAB can now take up all high-profile corruption cases, including those occurring during the last one-and-a-half years. The cases in this category include: steel mills collapse, Sangjani land scam, Karachi land scam, and PIA default scam, etc.

Some minions of the state have been trying to prevent NAB from its mandatory function of publishing its "Annual Report 2008" on the organisation's activities/performance as required under the rules. The apprehension that the report could disclose details of cases closed under the NRO or cases in which the accused were acquitted without prosecution, or cases which were either withdrawn or not considered after the initial inquiry, seemed to have impelled those functionaries to swing into action.

Besides the NRO, a parallel scheme of giving a clean chit to the powerful elite was the 'NRO bypass strategy', which meant ignoring complaints during the inquiry and at the investigations stage. Another tactic of giving a safe passage to the accused was either withdrawing cases or getting them acquitted through friendly prosecution. The practice of not initiating corruption cases strengthened the belief among the masses that the state machinery always looked the other way in cases involving huge corruption while it spared no opportunity in nabbing those involved in petty corruption.

Recently, the government has released a list of persons against whom cases were dropped under NRO. Why did the authorities publish the list? One news is that the authorities were constrained to publish the list to clear the position of the first lady whose name had appeared in an unofficial list published by a section of the media.

A good precedent was set by Punjab Chief Minister's Advisor Saeed Mehdi who resigned from his position following allegations of being a beneficiary of the NRO. Logically, cabinet ministers and state functionaries who had sought to escape justice under NRO's cover should have voluntarily resigned till their names were cleared by the courts of law, failing which the Prime Minister should have shown the door to them. Recourse to such a step would have increased the PPP's credibility among the masses. If the political party fails to do that, in due course of time, people will clean up the mess themselves by rejecting or accepting their representatives.

Presuming that the public is gullible, most of the leading personalities among the NRO beneficiaries have been pleading that they are innocent. Will mere statements by the accused clear the mist in the public mind about their alleged involvement in shady affairs? Certainly, not! If they are really innocent, as claimed by most of them, then they have nothing to fear and should welcome the opportunity to clear their names by facing those cases in the courts.

The list of NRO beneficiaries is very long, the number is 8,041. Most of the accused are involved in cases of serious nature. General Musharraf dropped the cases under the NRO to ease pressure on him against his misrule and also to secure his position by agreeing to run the country in collaboration with NRO beneficiaries.

What happens in other countries in similar situations? In Israel, for instance a few years ago, the sitting Presidents had to step down and face investigations when accused of having harassed some women. In England, Home Secretary David Blunkett had to resign from his cabinet post in 2004 because someone from his office had rang up an official in one of the subordinate departments of the Home Ministry to speed up the visa processing for a lady related to the son of Blunkett's beloved.

Let us recall some corruption cases that occurred in Pakistan during 1999-2008. The major ones include: irregular allotment of government lands, Gwadar land scam, railway land scam, locomotive scam, kickbacks in PIA aircraft deal and purchase of submarines for Pakistan Navy, irregularities in KPT and Pakistan Steel Mills, loan write-offs in billion of rupees, inside trading in KSE, etc. Memories of killings in Karachi on May 12, 2007, murder of Nawab Akbar Bugti and protection of those who raped Dr. Shazia are still fresh in public memory. Money-laundering, illegal transfer of billions of US dollars to foreign bank accounts facilitated the corrupt during the Musharraf regime.

As some people's ill-gotten wealth continues to swell, no end seems to be in sight. Rather, the situation is getting worse as pointed out by Transparency International (TI) in its recent report. The TI has pointed out that anti-corruption drive took a nosedive after Musharraf issued the NRO, just 56 days following Pakistan's ratification of UN Convention against Corruption.

Understandably, bribe to a police or revenue official is pittance compared to kickbacks earned on the purchase of submarines. Various laws were introduced by successive governments to stamp out corruption. Some politicians (of course, weaker ones) retired from politics and many bureaucrats were sacked. But, exactly the opposite happened. Corruption kept on rising with every anti-corruption law and plunderers of national wealth kept making illegal bucks.

One can imagine the magnitude of corruption in the country from Federal Finance Minister, Shaukat Tarin's recent statement that corruption of Rs. 400-500 billion exists in the Federal Board of Revenue (FBR) alone. If that is true, one can imagine the scale of its prevalence at the national level. If those persons are not punished, they will continue to plunder national wealth and the country will continue to figure on TI's list. The policy of nabbing weaker souls and letting criminals go scot-free, while awarding exemplary punishments to those who either do not happen to be camp followers or refuse to toe the dictated lines would never deliver the desired results.

How can selective punishment promote honesty, integrity and fair play? Most of you would be familiar with the story. However, for the benefit of those who have not read it, here it is. Once a dog fell into a village well and died. The water got contaminated, becoming unfit for human consumption. The rustics went to the village clergy and sought his advice about making the water pure for human consumption. The clergy advised the villagers to draw out seven buckets of water from the well and throw that water away to make the water in the well ready for consumption. The following day, the villagers came to the clergy again and said that the water was still stinking. When the clergy enquired if they had removed the carcass before draining out the required quantity of water, their reply was in the negative. Likewise, if we wish to remove the stigma of corruption, while letting the corrupt ones to continue clinging to their public offices, it would be difficult for us to achieve the desired objective. We know that the perception of rampant corruption keeps foreign investors away.

Alauddin Masood is a freelance columnist based in Islamabad.

A project delayed…

market

The global financial meltdown of the past two years signifies the end of the cradle-to-grave security offered by corporate jobs. The brave new world of tomorrow belongs to entrepreneurs and innovators, those who anticipate and fulfill society's needs creatively. Innovation has become the buzzword of our times and not without reason. Businesses, both large and small, see it as key to increased profits and market share. Governments automatically reach for it when attempting an economic turn-around.

Innovation has been traditionally defined as successful implementation of creative ideas. While creativity refers to thinking of a new product, service or a process, innovation refers to successfully carrying that idea to the marketplace. When Jeff Bezos thought of selling books on the internet it was 'creativity', when he set up Amazon it became 'innovation'. There is widespread recognition of the fact that innovation is crucial to the success of a business and the economy at both the micro and macro levels. As innovative businesses and the economy grow, they positively impact unemployment and poverty. This is something which we in Pakistan need to recognise.

Among the keys to innovation are the ability to imagine the future, to think in quantum leaps rather than in small increments, and also most importantly, being prepared to fail. An innovative person in other words has to be imaginative and has to be a risk-taker; someone for whom failure is just another learning experience. A culture of innovation and entrepreneurship has to be developed in Pakistan. This is something which has to be encouraged by government policy. And of course as a society we have to change our worldview and become innovative. Innovation and creativity were once the responsibility of the entrepreneur, the marketing department, or the advertising agency -- now they are the responsibility of the entire private sector, the government, and society as a whole.

The exciting part of innovation is the possibility of being able to create something out of nothing. Capital is not a prerequisite. A degree is not a must, though knowledge is. In other words, knowledge can be formal or informal. Creativity comes in when a person is able to combine various strands of knowledge in a way it has never been done before and come up with an idea of a new product, service or a process.

In the case of Jeff Bezos (Amazon's founder), the combination was of knowledge of two types; knowledge of IT and knowledge that the book buying public was not happy with the way they had to purchase books. In retrospect, these two strands of knowledge were hardly a secret. Jeff Bezos was creative in combining the two and innovative when he set up Amazon. Today Amazon's annual revenue is $20 billion (Pakistan's annual budget is $30 billion.) which is truly remarkable if you consider that it all started with an idea in one man's head.

An innovative person has to be imaginative, intuitional, inspirational and ideas-generating (all components of creativity). Innovative people have to be recognised and encouraged. It is now believed that creativity can be taught and innovation can be managed. This process, however, has to start at the school and continue to the university level. Ideas should be germinated in university and corporate incubators. Trade bodies can play an active part. Government has to have a policy of supporting a whole culture of innovation.

The impact of an innovative culture can be huge. Wealth creation will follow and have a positive affect on GDP growth and employment opportunities. A small sole proprietorship or a large multinational can reap profits through innovation. Lots of opportunities exist for innovation and entrepreneurship to thrive in developing countries like Pakistan. Pakistanis have strong innovative and entrepreneurial instincts. Areas such as IT, healthcare, education, and rural marketing are underdeveloped in our country.

Many Information Technology firms in India and some in Pakistan have been innovative and have been able to develop niche products. They have quickly been able to increase their revenue manifold. In many cases, these firms were started by a couple of young IT specialists with a little capital base but because of their expertise now count some of the well-known corporate giants in the West as their clients. Encouraging IT graduates to think on these lines has to come from the universities and the government. The absence of venture capital in Pakistan is also an impediment to the growth of IT start-ups and needs to be addressed.

Similarly, as the public sector has failed over the years to provide reasonable education to our citizens, opportunities exist, amongst other things, for innovative persons to develop web-based models of education delivery. All innovative solutions need not be technological in nature; innovation does not have to be technology-based. The crisis of illiteracy in all its dimensions, offers huge opportunities to the innovator. The government on its part has to look into the possibility of public-private partnerships.

Also, our agriculture sector is underdeveloped. Rural-based businesses like dairy farming, storage and supply chain management can benefit immensely from creative ideas. There is a huge scope for technology based innovation in agro-industry. Process innovation is required to develop more efficient systems. Presently, bright young people do not even think of taking jobs and doing business out of the big urban centers. Again, the provision of incentives has to come from both the public and private sector. And needless to say, both need to work on this on an urgent basis. Government organisations like SMEDA need to be empowered to play a more active role.

Unemployment is now a global problem. The major source of new job generation is not going to be the public sector and the traditional large corporations. Future job opportunities, globally and in Pakistan are going to come from innovative organisations and the entrepreneur. The goal to become an innovative and entrepreneurial society/ economy sounds like a tall order but other countries have tried and succeeded. Once a consensus develops among all stakeholders a determined effort can help us take this big leap forward.

"We are not students of some subject matter, but students of problems. And problems may cut right across the borders of any subject matter or discipline." Karl Popper

It is often complained that social sciences are neglected in Pakistan. However, their rigid compartmentalisation has added a much graver dimension to the already dismal state of social and societal knowledge here. It is even truer in case of the two postulated correlated disciplines dealing with human past namely, history and archaeology.

In Pakistan, the tendency towards interdisciplinary research within the social sciences still seems negligible. Its trivialisation might be due to the nonchalant environment of the Pakistani academia and the lack of appreciation by the establishment. But the problems and threats which the country has been facing can be to a great degree satisfactorily addressed by the systematic and holistic solutions provided by the integrated knowledge of the various disciplines. And, thus, it is the need of the hour to tune our theories and beliefs to the modern standard rather than conventional preconceptions.

A generally held but erroneous notion is that history stops at the point where man leaves no written record of his activity and that thenceforth the field of archaeology steps in. But for two reasons we cannot draw a sharp line between the realms of history and archaeology. In the first place, there is a subtle interplay between the historical literature and the archaeological finds. Secondly, as the entire human past is historical the discipline of archaeology falls in the purview of history. But still the division is, as an Indian scholar puts down, "only a matter of conceptual and academic convenience" and has "very little to do with the real situation".

Here the close bond between history and archaeology is worked out with the stipulation that the complementary dimensions of both the disciplines must be taken into consideration, as against the backdrop of the interdisciplinary discourse in regard to the study of cultural, religious, political and economic history of Pakistan.

Pakistan is facing an identity crisis. The state has naively and pretentiously been engaged in devising a holy and uniform identity here. But as it negates and is devoid of taking into account the native elements, the problem is further aggravated rather than ameliorated.

The inhabitants of different areas of modern Pakistan are not a people to be trifled with. They have historical roots. They are a people of visual as well as abstract heritage of and about life. And herein lies the responsibility of the Pakistani historians and archaeologists to make the people of Pakistan own their past. A sense of belonging to the past will create prospects of a social and cultural space for the development of civilisation in Pakistan. And here the integrated outcomes of history and archaeology can in earnest be pressed into service.

Being an important source material of the human past, archaeology has a great importance for history. Its contributions to the writing of history are categorised as text-aided archaeology and text-free history. Text-aided archaeology implies the application of archaeological means to a historical period but the important prerogative of archaeology is the prehistoric period, a text-free history. By adding to history its prelude prehistory "the purview of history" as Gordon Childe puts it, "is extended a hundredfold".

The written record of human past suffers from numerous important lacunae in addition to the problems of its inherent biases as well as fancies. The entry of oral tradition in the field of history is something positive in this connection. Archaeology, as well, can be fruitfully engaged in regard to the concerns of the discipline of history. The application of certain methods, concepts and theories of history, on the other hand, will do away with some important limitations of the field of archaeology. History and archaeology, thus, will have comparatively closer liaison, especially in the context of Pakistan.

The areas that form modern Pakistan are greatly deficient in documentary account. This problem aptly persists in relation to the medieval ages of the country. But with the help of the archaeological finds a sort of rudimentary continuity has been established. The works of Professor Ahmad Hassan Dani is the age-long story of Pakistan in the context of the process of continuity and change. Similarly, Professor Giuseppe Tucci of the Italian Archaeological Mission (IsMEO) is conspicuous by contributing solid material facts to the history of Pakistan.

The limitations of the field of archaeology, on the other hand, may be overcome by having a "real feeling" for history. Archaeology will have, thus, its own theory besides being a system of methods and techniques. And no one will have the audacity to criticise K K Aziz for calling it "the mother of history as a discipline".

Thus, one can assert that Pakistan has a sequential history in terms of prehistory, proto-history upto the dawn of history. Of course, it is relative success; tremendous work is ahead to be done. And that is to construct and reconstruct the real history of the people of Pakistan in the light of the historical literature and the ever new facts of archaeology. This will be, no doubt, a conscious initiation of a process for resolving the crisis of identity in Pakistan. The integrated finds of archaeology and history will make an exposition of it as being a land of historic pluralism and unity in diversity.