nfc
No small feat, or is it?
ByHuzaima Bukhari & Dr. Ikramul Haq
A consensus emerged on 7th National Finance Commission (NFC) Award in Lahore on December 11, 2009, which was termed as "dividends of democracy", "historic achievement" and a "great leap toward provincial autonomy". However, a close look at the award confirms that once again the fundamental issue of handing over fiscal rights to the federating units has been ignored; they have been kept dependent on the Centre.

Other view
The agreement on the seventh NFC
Award is a beacon of hope
By Raza Khan
The announcement of the seventh National Finance Commission (NFC) award is going to have far reaching impact on the political economy of Pakistan. Under the new NFC award the share of the provinces in the Federal Divisible Pool (FDP) or the national revenues has been raised to 56 percent. Presently, the provincial share is 46 percent. This transfer of additional financial resources of the country from the federal to the provincial government is arguably the first step towards financially strengthening the provinces and providing them monetary space, if not autonomy.

health
Missing the target
By Tahir Ali
The Prime Minister’s programme for the Prevention and Control of Hepatitis (PMPCH) has failed to stem the growing incidence of hepatitis in the country. Dr Asif Khan, a community health expert, says mismanagement, corruption, irregular and insufficient supply of drugs, lack of laboratories and supply of allegedly non-WHO certified Chinese interferon have affected the programme and endangered the lives of millions of people.

Back to the basics
Pakistan needs foreign investment in the manufacturing sector to expand and upgrade its industrial base to increase exports
By Hussain H. Zaidi
Export promotion is widely regarded as a powerful instrument of job creation, improvement in the balance of payment (BoP) position, economic growth and increase in the level of incomes. Like other developing countries, Pakistan is making efforts to increase its exports. Though the country’s merchandise exports have exceeded $20 billion, they constitute only 0.12 percent of global merchandise exports of $15.8 trillion. The share of exports in GDP is less than 15 percent.

society
Peace per Pakhtunwali
By Rafi Ullah
A generally-held belief says that violence is socially-structured in the Pakhtun society. It, however, does not interest us here to contradict this estimation as the situation on the ground seems to prove that. The point to be dwelt on here is to see if peace can be brought in the Pakhtun homeland through its culture — Pakhtunwali. Traditionally, Pakhtunwali is defined as the unwritten code of life, tribal law or constitution of the Pakhtuns. According to Dr Sayed Wiqar Ali Shah, it is "one Pashtoon’s behaviour towards another Pashtoon." But a more judicious definition of Pakhtunwali is to be made by putting it in its historical context.

Cost of corruption
There is a need to restructure anti-corruption departments on modern lines
By Usman Saeed
A glance at the efforts to develop anti-corruption institutions indicates that the ruling regimes, barring exceptions, have been tinkering with the anti-corruption departments, primarily with political opponents in focus. The anti-corruption institutions of the early 1960s took cognizance of the crime even if ‘approved’ by the ruling masters. The Prevention of Corruption Act-1947, Public Representatives (Disqualification) Act 1949(repealed), the Elected Bodies (Disqualification) Ordinance-1959 (Repealed), etc. were mostly labelled with exercise in victimisation.

verdict
Murder without a culprit
By Ahmed Yusuf
Pakistan People’s Party-Shaheed Bhutto (PPP-SB) Chairman Mir Murtaza Bhutto was gunned down on September 20, 1996 near his house. Six others – Ashiq Jatoi, Sattar Rajpar, Shajad Haider Ghakro, Rahim Brohi, Yar Mohammad Baloch, and Wajahat Jokhio – also sustained fatal injuries. Most newspaper stories and subsequent reports described the incident as a "murder", but the matter was always debated in august courtrooms. It is there, in two sessions courts, that it turned out that this was a case without a "culprit".

‘Good luck’ for EU bad for Turkey
New appointments at the European Union have kicked up a debate about the future of the organisation
By Ansar Mahmood Bhatti
Often described as a miracle, the European Union appears to have ‘achieved’ yet another milestone by appointing a president of the European Council and a foreign affairs minister last month. These appointments come in the wake of implementation of the Lisbon Treaty, which envisages drastic changes in the existing EU structures so as to transform it into a more vibrant; coherent, and a powerful outfit that is capable of playing as a counter-balancing force in a world dominated by the US.

 

 

nfc

No small feat, or is it?

By Huzaima Bukhari & Dr. Ikramul Haq

A consensus emerged on 7th National Finance Commission (NFC) Award in Lahore on December 11, 2009, which was termed as "dividends of democracy", "historic achievement" and a "great leap toward provincial autonomy". However, a close look at the award confirms that once again the fundamental issue of handing over fiscal rights to the federating units has been ignored; they have been kept dependent on the Centre.

The ruling class is not ready to empower the masses in all the four provinces — bent upon denying them complete autonomy in economic matters. The issue from the perspective of the economically deprived is not that of devising a satisfactory formula for the distribution of net proceeds of taxes — commonly known as divisible pool. They want a new social contract where the Centre has only four subjects — defence, foreign affairs, currency, and communications.

Article 160 of the Constitution does not prescribe any particular formula for distributing the net tax proceeds among provinces. It, in fact, requires equitable sharing and distribution of resources among federation and provinces. The issue is, thus, not that of vertical or horizontal distributions of taxes and resources, in which all the NFC negotiators have taken so much pride, but giving the provinces complete autonomy that includes exclusive rights of levying taxes on goods and services in their respective areas.

The Centre has been blatantly transgressing on this constitutional right of provinces and then out of the so-called divisible pool — comprising unlawfully collected taxes belonging to provinces — gives them peanuts as charity. The ownership of all the resources of a province and its exploitation for the benefit of people of that province is the real issue that was conspicuous by its absence in the "unanimous 7th NFC Award".

There is something fundamentally wrong with Pakistan’s constitutional structure regarding distribution of taxation powers between the federation and the federating units. In all major federations — the US, Canada, and India — the federating units have the exclusive right to levy tax on goods and services transacted within their geographical boundaries. In Pakistan, the Constituent Assembly took away the right of levying sales tax on goods from provinces in 1948. In the seventh award as well all the four provinces conceded that forthcoming Value Added Tax (VAT) on goods will be levied by the Centre.

Lack of judicious distribution of taxes and perpetual abuse of constitutional provisions by Islamabad has created disharmony between the Centre and the provinces. Our unanimously-elected Prime Minister in his maiden speech after winning the "historic" vote of confidence, made a pledge that the Concurrent List in the 1973 Constitution would be abolished within one year. He could have done it immediately; there was consensus on it in both the houses but he deferred it unnecessarily for one year and even failed to fulfil that promise till today.

The federal government has been encroaching upon the rights of the provinces by levying presumptive taxes on services under the Income Tax Ordinance, 2001, sales tax on gas, electricity and telephone services, and excise duty on a number of services. The Sindh Assembly, in its unanimous resolution of February 3, 2009, took a strong exception to this malpractice and demanded the federal government stopped collecting sales tax on services as this right exclusively vested with the provinces. It also demanded refund of Rs. 213 billion collected under this head by the FBR on gas, power and telephones services from Sindh province during the fiscal years 2001-02 to 2005-06. No other provincial assembly has made such a claim — this shows apathy of worthy members towards the people.

Federal injustice in tax matters has denied the provinces their constitutional rights besides crippling them financially. The provinces should have the exclusive right to levy indirect taxes on goods and services within their respective physical boundaries — VAT should not be a federal subject. Right to levy any tax on goods should be restored to the provinces as was the case at the time of independence. Despite federal high-handedness in levying unjust taxes and denying the provinces their legitimate shares, the Centre has miserably failed to reduce the burgeoning fiscal deficit.

Had the provinces been allowed to generate their own resources, the present chaotic situation could have been averted. The federal government has the audacity to claim that provinces lack infrastructure to efficiently collect taxes. This attitude is reflective of colonial legacy. This issue should be left to sovereign parliaments of provinces.

On the one hand, provinces have been denied autonomy and on the other hand money that belonged to them, collected as federal taxes, is given to them as act of benevolence. It is adding insult to injury. This is a considered policy of control for maintaining hegemony over the federating units. The provinces should have exclusive right to levy VAT on goods and services generated within their boundaries.

The federal government has miserably failed to tap the real revenue potential, which is not less than Rs. 4 trillion. The failure of FBR on this account adversely and directly affects the provinces as they are wholly dependent on what the Centre collects and transfers to them from the divisible pool. Pakistan is, thus, caught in a dilemma: Centre is unwilling to grant the provinces their legitimate taxation rights and collects too little to meet their overall financial demands. The size of cake — divisible pool — is so small that nothing substantial can be done for the welfare of poor people, no matter in which part of the country they live. The real issue of generating sufficient resources for the less privileged is still unattended.

The track record of federal government shows remote possibility of collecting Rs. 4 trillion in the next three years to give a fiscal space both to the Centre and the provinces to come out of the present economic mess, thus extending some relief to the poor, trade, and industry. Under the given scenario, federation-provinces taxing tangle will continue. Pakistan will remain in debt enslavement and more and more people will be pushed below the poverty line. If we want to come out of this crisis, there is an urgent need to reconsider the prevalent social contract between federation and the provinces. Provincial autonomy without taxation rights and equitable distribution of income and wealth is meaningless. We cannot come out of perpetual economic and political crises unless the provinces are given true autonomy; ownership of all resources; generation of own revenues and exclusive right to utilise them for the welfare of their inhabitants.

The writers, tax lawyers, are visiting Professors at Lahore University of Management Sciences (LUMS)

 

Other view

The agreement on the seventh NFC

Award is a beacon of hope

By Raza Khan

The announcement of the seventh National Finance Commission (NFC) award is going to have far reaching impact on the political economy of Pakistan. Under the new NFC award the share of the provinces in the Federal Divisible Pool (FDP) or the national revenues has been raised to 56 percent. Presently, the provincial share is 46 percent. This transfer of additional financial resources of the country from the federal to the provincial government is arguably the first step towards financially strengthening the provinces and providing them monetary space, if not autonomy.

The pooling up of the finances at the federal level has been the mainstay of the over-centralised federal structure of Pakistan. Therefore, shifting of more than 50 percent share of the FDP to provinces is a historic decision in the sense that it is simultaneously the first step to do away with this over-centralisation. Consequently, its political repercussions would be immense: as in the process the federal structure of the state will be transformed. This transformation would be for the better, provided things take the course agreed upon in the award. The course will be seriously altered if there is a military takeover or unconstitutional removal of the sitting government.

When a federation is formed, the agreement is on a co-equal basis rather than labeling some ‘big’ and the rest ‘smaller’. It is important to note that this restructuring of the federation was very much enshrined in the 1973 constitution of the state. Mechanisms like NFC, Council of Common Interest (CII) and National Economic Council were devised in the constitution to effect this restructuring of the state in a functional rather than an abrupt manner. The constitution calls for decentralisation and strengthening of the provinces rather than the centre. This is evident from the constitutional provision regarding elimination of the Concurrent Legislative List and transfer of its subjects to the provinces 10 years after the passage of the constitution. However, the ‘establishment’ and its handpicked political actors, sensing that shifting of powers to provinces would result in their marginalization, never let these constitutional provisions and mechanisms to become operational. Resultantly, despite the passage of 36 years the Concurrent Legislative List is still part of the constitution while there have been rare meetings and agreements of CCI and NFC respectively.

Due to this sordid state of affairs, provinces remained financially dependent on the federation. This has particularly been the case with Balochistan and NWFP. While the former has been entirely dependent on the centre for its financial requirement, often seeking overdraft, the latter has always looked to Islamabad for 90 percent of its budgetary requirements. Ironically, this dependency has not been due to any resource deficiency in these provinces. Rather, these and the rest of the two provinces have been made to be dependent on the Centre as the resources, which otherwise belonged to the provinces, have had to be spent on the oversized military and federal civilian institutions.

The ‘establishment’ has always justified this maintenance of the status quo by protruding the argument that it is indispensable for internal strengthening as well as safeguarding the state from external aggression. Thus, the state of Pakistan became a ‘security’ state rather than a welfare state. However, the state security is multidimensional and cannot be calculated in just military-strategic terms. Among these aspects of state security economic security is most critical. The attainment of a real state security is unthinkable in the absence of financially and self-sufficient and self-sustaining federating units as federation is just a symbol of people’s unity.

Therefore, the agreement of the present federal government to give more than 50 percent share of the state’s financial resources to the provinces would strengthen Pakistan in real terms. According to Dr Zafar Moeen Nasir, Head of economic research at the Pakistan Institute of Developmental Economics, Islamabad, "More resources to the down-trodden people and underdeveloped areas and people will start owning the country. There would be a stronger sense of belonging. You can’t create this sense, it is the outcome of economic empowerment. Why I consider myself a proud Pakistani is because this country has given me a lot as compared to what I had say 30 years ago. Economic empowerment leads to real integration and strengthening of the state."

Transferring finances will lead to financially viable and vibrant federating units, leading to enhanced economic security. In this context, the consensus on the seventh NFC is more a political than an economic decision and the country direly needs such measures.

While transferring more financial resources to provinces the federal government has to cut its size. This will come in the form of reducing the number of federal ministries, divisions and departments. Recently, Federal Finance Minister Shaukat Tareen hinted at reducing centre’s expenditures to 12.5 percent from the current 14.1 percent of the GDP in a bid to facilitate the payment of increased shares to provinces under the seventh National Finance Commission (NFC) Award. This process has already started with the wrapping up of some and merging of other ministries like ministries of Law and Parliamentary Affairs.

If sustained, this process may be a big stride towards the lassiez-faire model of political economy. Having a minimal role in direct governance, the federal government will have more energy to concentrate on policy making in areas such as foreign affairs, defense and communication. These are purely federal subjects and of strategic importance to safeguard the interests of the countrymen besides ensuring their welfare and development.

The timing of the agreement on NFC is of extreme political importance. The country is faced with militancy and extremism that has shaken the foundations of the state. On the other hand, the Baloch nationalist insurgency poses a grave threat to the state. So, in this context, the financially vibrant provinces would be better placed to provide political and economic security to the people. After having more finances, provinces would be able to allocate substantial resources to develop their resource generation and market-oriented sectors — hydroelectric and gas in NWFP, coal in Sindh, Copper and gold, gas in Balochistan, and agriculture sectors in the Punjab. This would result in interdependence among provinces which would have a desired effect on the state.

Transferring more resources from centre to the provinces will bring in a true politico-democratic culture in the country. However, provinces greatly lack the capacity to initiate and execute projects and use additional resources. This capacity needs to be built; otherwise much of the resources might go down the drain. "Although we can go from base to the top, the problem is that we did not build our capacity at that particular level. Even today, if you devolve this whole system to district or tehsil level, you would not get the required support from there," argues Dr Zafar.

But building the capacity of the provinces is not possible without the help of international organisations like the Asian Development Bank, Grameen Bank of Bangladesh and, to a certain extent, the IMF to enhance the capacity building of provincial government officials.

Without bringing transparency in their governance system and departments the transfer of financial resources to the provinces will not serve its purpose. Presently, the level of official corruption is quite high in NWFP and Balochistan. For instance, in comparison to the relatively transparent track-record of Federal Public Service Commission, the provincial service commissions in the two provinces have a long way to go in terms of transparency. The agreement on the seventh NFC Award has made the right beginning as far as financial empowerment of the provinces is concerned but this process can be further improved by the elimination of the Concurrent List from the constitution and transferring it to the provinces.

The writer is a political analyst

 

health

Missing the target

By Tahir Ali

The Prime Minister’s programme for the Prevention and Control of Hepatitis (PMPCH) has failed to stem the growing incidence of hepatitis in the country. Dr Asif Khan, a community health expert, says mismanagement, corruption, irregular and insufficient supply of drugs, lack of laboratories and supply of allegedly non-WHO certified Chinese interferon have affected the programme and endangered the lives of millions of people.

Besides the law and order situation in the militancy-hit areas of NWFP and Balochistan and opposition to the immunisation programme by religious groups, difficulty in registration and flawed supply system of interferon injections are hampering the process.

The Rs 2.6 billion PMPCH was launched in August 2005 with the aim of 50 percent reduction in Hepatitis prevalence by year 2010 by utilising the existing health infrastructure. The amount is peanuts considering the fact that about eight percent of Pakistan’s population is infected with the hepatitis. The executive director of Pharma Bureau, Riaz Husain, says the PMPCH needs to allocate dedicated people, quality sources, and generous funds. "Half-hearted and non-serious efforts would not bring us anywhere near the programme goals and targets," he argues.

The programme lags far behind the target. So far, according to the ministry of health website, only 22,779 hepatitis C and 2,931 hepatitis B patients have been treated under the programme. The number may be termed as a drop in the ocean, keeping in view the estimated around 12 to 15 million hepatitis cases in the country.

But the figures seem exaggerated from another perspective. A six month interferon therapy for a patient consumes around Rs36000-180 injections at Rs 200 per injection daily for six months successively. "Even if we avoid charging for other relevant expenditures from the programme fund, the Rs 2.6 billion total fund of the programme will suffice for only around 7500 cases of treatment for hepatitis C. The treatment of all the estimated 8 million hepatitis C patients requires a hefty amount of Rs 2800 billion on that basis, says Naufil Shahrukh, Coordinator of Health Communication Forum (HCF).

The prime minister had announced in August that in the next five years, the government aimed to treat 72,000 patients of hepatitis C, over 30,000 of hepatitis B and would administer over 8 million doses of hepatitis B vaccine. The treatment of 72000 hepatitis C patients, by that count, will warrant over Rs 30 billion.

There is another thing that is also worth considering for the high-ups. The PMPCH has been purchasing interferon brands that are to be taken daily for six months. Other alternatives available can be taken with intervals of two days, once a week or even more. The official mechanism is simply agonising for the patients undergoing such treatment. Not only its quality and efficacy is being questioned, experts say that it is also expensive than other available variants.

"Interferon being supplied through the programme incurs an expenditure of Rs 36,000 for six months of initial therapy. Another alternate interferon brand available in the open market has a price of Rs 400 and it is taken every second day. Its total doze of 72 injections requires around Rs 28,000. It may not be that effective but it is more economical and less painful than that of the PMPCH. "More qualitative but expensive interferons are there in the market as well," says a doctor who wants to remain anonymous.

Although millions of Pakistanis are infected with the hepatitis virus, there is no authentic data on the number of hepatitis patients in Pakistan. The percentage of affected population ranges from 5 to 7 percent and the total patients are estimated between 11 to 15 million in Pakistan. According to Health Foundation and WHO, one out of 10 and 12 Pakistanis respectively suffers from either hepatitis B or C.

The province wise data shows that Balochistan has 4.3 percent hepatitis B prevalence in Balochistan; Punjab has the highest hepatitis C prevalence rate of 6.7 percent followed by Sindh which is at 5.0 percent. The NWFP coordinator of the PMPCH Dr Mohammad Azam Khan says that the "estimated current prevalence of hepatitis B and hepatitis C in NWFP and FATA was about 2.5 and 5-7 percent of the population; Mardan, Dir, Bannu and Hangu being the most affected districts."

Executive District Officer Health, Dr Arshad, says that 10-11 percent of Mardan’s population or around 0.2 million hepatitis cases are estimated in the district, "The district has six thousand hepatitis C registered patients but the quantity of injections it receives from the PMPCH is insufficient. Mardan needs a special consignment of dozes." Another official discloses that only 500-600 injections were available in Mardan last year. According to official data, 3025 hepatitis C and 332 hepatitis B patients were reported in financial year 2006-07. In 2008, only 150 hepatitis C and 150 hepatitis B patients were provided full treatment under the programme.

Dr Said Badshah, a medical specialist, says cure against hepatitis B was possible but there was no preventive vaccine available for hepatitis C in the market. "The latter had to be treated by anti-viral therapy and interferon injections which are costly. The Polymerase Chain Reaction (PCR) test, a must for starting therapy of hepatitis patients, should be provided free of cost. The government should ensure free investigation of the people and treatment for the patients."

The programme should also allow another free treatment for the patients who are tested positive after the first therapy of six months. The monitoring and evaluation department of planning commission should identify problems and suggest corrective measures. There is an acute shortage of technical staff and laboratory facilities in the health centres across the country for doing hepatitis tests. According to studies, Pakistan is second in the world in the maximum use of unnecessary injections. Capacity building of the human resource and financial allocation is vital for the success of the programme. Dr Khan, for example, says his office does not have the internet facility.

The government has integrated hepatitis B vaccination programme into the national immunisation schedule. But most people are unaware of this development. It should organise awareness campaigns and take action against quacks and unregistered blood banks.

 

Is interferon approved by WHO?

Dr Asif Khan, Coordinator of Health Communication Forum, says according to the Drug Act, medicines purchased by the government need to be tested by the drug inspectors before being administered to the patients. "The only safeguard against substandard biomedicine in the past was their direct supply from international agencies like WHO and UNICEF but now local importers, in connivance with corrupt health authorities, are importing low quality and unchecked biomedicine." The Supreme Court had taken a suo motu notice in October this year against the alleged use of substandard vaccines for hepatitis B patients in the programme and had issued notices to the health ministry and a local pharmaceutical firm based in Lahore.

Zahid Saeed, Chairman Pakistan Pharmaceutical Manufacturers Association (PPMA) says that as per 212th meeting of the drug registration board, only WHO certified bio-drugs can be registered and purchased from WHO certified sources. When he is asked whether the Chinese interferon being supplied in the PMPCH is WHO-certified, he replies, "not confirmed".

NWFP coordinator of the PMPCH, Dr Mohammad Azam Khan, says that the Chinese interferon is of good quality, certified by ministry of health, and has 70 percent successful results in patients, besides being more economical as well, "The problem is that there are around 13 kinds of hepatitis. Some kinds might not respond well to interferon but this doesn’t mean that the medicine is substandard. It is only 4 to 5 percent less effective than other brands." A number of senior officials of the federal health ministry were contacted but no one was available for comments. Email messages containing questions on the issue were also sent to the federal health secretary and health minister, but there was no response till the filing of this story on Tuesday morning.

— Tahir Ali

 

Back to the basics

Pakistan needs foreign investment in the manufacturing sector to expand and upgrade its industrial base to increase exports

By Hussain H. Zaidi

Export promotion is widely regarded as a powerful instrument of job creation, improvement in the balance of payment (BoP) position, economic growth and increase in the level of incomes. Like other developing countries, Pakistan is making efforts to increase its exports. Though the country’s merchandise exports have exceeded $20 billion, they constitute only 0.12 percent of global merchandise exports of $15.8 trillion. The share of exports in GDP is less than 15 percent.

Though greater market access for Pakistan’s exports, both multilaterally (through WTO negotiations) and by means of bilateral and regional trading arrangements (FTAs, PTAs), is important for export promotion, there are some structural problems as well preventing substantial increase in exports. To begin with, the problem of a narrow export base persists. For effective export promotion, a country needs to broaden its export base, which can be done in two ways — by increasing the number of products exported, called product diversification, and by increasing the number of export markets, called market diversification.

By broadening its export base, an economy safeguards itself against international price and demand fluctuations. In case a country has a narrow export product base, reduction in unit price of export commodities may adversely affect its export earnings. However, if a country exports a large number of products, none of which has a major share in its total export receipts, reduction in international market price of a few export items will not much affect the monetary value of its exports. The same is true of a narrow market base. In case a country exports only to a few markets, reduction in demand for its products will substantially affect the volume of its exports. However, in case a country has a large number of export markets, the repercussions of fluctuations in the international market demand can be minimised.

In case of Pakistan, a narrow export base is shown by the fact that four major commodities, namely textile and clothing (T&C), leather goods, rice and sports goods account for more than 70 percent of total exports. The share of only T&C products is 60 percent. The country’s dependence on T&C sector for export revenue has an obvious disadvantage arising out of the fact that for the last many years, the share of this sector in global merchandise exports has remained less than 6 percent. Thus, our exports overwhelmingly depend on a sector which has both a low and stagnant share in global trade. This said, Pakistan’s share in global T&C exports is less than 3 percent, which shows enormous potential for increase in export of these products from Pakistan.

As for lack of market diversification, the 27-member European Union (EU) and the US account for more than half of Pakistan’s total exports. The economic slowdown in the US and Europe and high tariffs that these markets have on T&C imports also underscore the need for market diversification.

Secondly, Pakistan’s exports are heavily dominated by low technology products, whose share in total export earnings exceeds 85 percent. The share of medium technology products in exports is below 10 percent, while that of high technology products is negligible. This is in contrast to the global scenario. Developing countries, by and large, are making strides in making high and medium technology products and their share in global exports is fast increasing in these sectors.

The share of high and medium technology products in Chinese exports, for instance, is 30 and 25 percent respectively. In case of India, high and medium technology goods account for 25-30 percent of the country’s exports. The greater the value addition, the higher the prices exports bring in. Since high technology products embody the maximum value addition, countries relying on such products have high export earnings and rising market share.

A country’s export performance reflects its state of industrial development. Pakistan has a narrow export base and is primarily an exporter of low technology products, because this is what the domestic industry offers. Hence, industrial development is arguably the most important factor for substantial increase in our exports. A capital scare and technology deficient country like Pakistan needs foreign investment in the manufacturing sector to expand and upgrade its industrial base. Unfortunately, though during the last few years, Pakistan has received a lot of investment in the services sector, such as financial services and telecommunications, there have been meager FDI inflows into the manufacturing sector, particularly the T&C sector.

Another major structural problem is low labour productivity. Labour productivity is low because human resource development has traditionally been a neglected area in Pakistan. Workers are potentially an organisation’s greatest asset and no organisation can compete successfully if its most valuable asset remains under-utilised. This calls for making greater investment in the capacity building of the workforce. Here, one misconception needs to be dispelled. It is widely believed in the developing countries, including Pakistan, that low wages are key to competitiveness. No doubt, low wages may help bring down the cost of production; the advantage will be neutralised if labour productivity is also low. What really matters is the final productivity of labour. This is borne out by the example of developed countries, which have achieved competitiveness not by reducing wages but by increasing labour productivity. Thus, the focus of our entrepreneurs should shift from keeping wages low to raising labour productivity. This will reduce the real cost of labour.

Next on the list is lack of product quality. A word of warning is in order here. An enterprise may offer ‘quality’ goods but may fail to sell them, because they do not pass the test of consumer expectations. Therefore, it will be a strategic mistake to define quality in terms of the producer or supplier rather than the customer. Quality means creating value for the customer. The greater the value the customer attaches to a product, the higher its quality. Customer value is, however, relative. One customer segment may attach greater value to product design, while for another, product durability may be more important. This means an enterprise cannot create customer value or quality without identifying the potential customers and studying their needs and wants.

Ensuring product quality entails compliance with product safety and health standards. These include environment standards and those dealing with protection of human, animal and plant lives. A distinction is made between mandatory and optional standards. The former embody government regulations, while the latter embody requirements of customers. However, in practical terms, the distinction is not much relevant, because every supplier has to fulfill the requirements of his prospective buyer failing which he may be driven out of the market.

In case of Pakistan, most of the exporters believe that tariffs are the only barriers to market access and after the same have been reduced, they can sell their products. Hence, they do not attach much importance to complying with product quality and standards until their consignments are rejected for lack of compliance. No doubt, at times these standards are very difficult to understand and comply with. However, exporters need to overcome this problem with the assistance of the government, because compliance with customer requirements is necessary.

Email: hussainhzaidi@gmail.com

caption

Innovation sells: An outlet of high quility garments.

 

 

society

Peace per Pakhtunwali

By Rafi Ullah

A generally-held belief says that violence is socially-structured in the Pakhtun society. It, however, does not interest us here to contradict this estimation as the situation on the ground seems to prove that. The point to be dwelt on here is to see if peace can be brought in the Pakhtun homeland through its culture — Pakhtunwali. Traditionally, Pakhtunwali is defined as the unwritten code of life, tribal law or constitution of the Pakhtuns. According to Dr Sayed Wiqar Ali Shah, it is "one Pashtoon’s behaviour towards another Pashtoon." But a more judicious definition of Pakhtunwali is to be made by putting it in its historical context.

Pakhtunwali is the secular national culture of the Pakhtuns. It represents the national virtues and customs of the Pakhtuns and, hence, is but their national character. This definition can safely be termed as the historical view of Pakhtunwali. It is much stronger as opposed to the viewpoint projected by Pakhto-poets, such as, Amir Hamza Shinwari and Samandar Khan Samandar. Both of them see no difference between the nature of Islam and the disposition of Pakhtunwali.

As a matter of fact, Pakhtunwali has evolved from the phenomenal historical developments in terms of religion, politics and culture in the Pakhtun land. The fact is supported by Aryan, Zoroastrian, Hindu, Buddhist and Graeco-Roman remnants in the Pakhtun culture. Philosopher-poet Ghani Khan, son of Abdul Ghaffar Khan, observes, "Each race has contributed something to his virtues and vices, looks and beliefs, religion and love-songs." This fact clearly dichotomises the religion of Islam and Pakhtunwali and, thus, all efforts of devising compatibility between the two lose weight.

Pakhtunwali is not simple aggregation of some customs like melmastia (hospitality), nanawate (begging pardon), nang (honour and respect), paighor and badal (taunt and revenge), and so on. It is, on the contrary, the worldview the Pakhtuns hold. Its scope extends to religious, secular, political, economic, social, and philanthropic considerations. It provides a space for visual and abstract aesthetics, love affairs, peace and violence and relationship with the aliens. All postulates of Pakhtunwali, in this respect, are deeply rooted in the age-long Pakhtun history and psyche.

There is an intimate and reciprocal correlation between culture and place. "Given that culture manifestly exists, it must exist somewhere, and it exists more concretely and completely in places than in minds or signs," says Edward S. Casey, a distinguished professor of social sciences. In this context, the ongoing crisis in Pakistan and Afghanistan seems to be due to the absence of cultural spaces for native culture — above all for Pakhtunwali. This crisis of Pakhtunwali can be traced back even to the pre-British era but it gets more pronounced in the wake of Western colonialism and the current hidden hand of violence.

A century-old British occupation adversely affected the secular national culture of the Pakhtuns as it created a space for the mullahs’ role. The people, in some cases, rallied behind them for liberating their homeland. But as it was an age of crisis for the Muslim world, the Pakhtun mullahs got involved in Pan-Islamic and puritanical aspirations. And it is here that the cultural space for Pakhtunwali started shrinking as the tug of war between mullahism and colonialism ensued.

In the post-partition era, obsession with Pan-Islamism in Pakistan, the Cold War concerns, and the Afghan jihad eroded all prospects for the survival of cultures in the country. Pakistan’s Taliban adventure, 9/11, and the subsequent developments have virtually brought cultural life in Afghanistan and Pakistan to the brink of ruin. The major sufferers in the whole drama have been the Pakhtuns as "blood is the cheapest commodity" across their homeland. The situation will persist unless and until a viable cultural space has been (re-)created for Pakhtunwali in the Pakhtun land.

How can peace be attained through the culture of Pakhtunwali? For the purpose of simplification, we may take into account some of its core characteristics never noticed by any writer either local or foreign. These are mysticism, secularism, religious tolerance and pluralism. The reinvigoration of these forgotten features of the Pakhtun culture will certainly lead to social harmony and peaceful coexistence.

Mysticism has been the dominant aspect of the religious life in the Pakhtun society throughout history. Dr A. H. Dani writes, "… Gandhara (the land of the Pakhtuns) has been the home of Buddhism which led to the finest creation of Gandhara art and later the sufi Islam with many Muslim saints resting here…."

Majority of the Pakhtun leaders, such as Bit Neeka, Mirwais Neeka, Malikyar, Shekh Milli, Bayazid Ansari (Pir Rokhan), Khushal Khan Khattak, and Ahmad Shah Baba were either sufis or had mystic inclinations. Similarly, Sayyid Ali Tarmezi (Pir Baba), Akhund Darweza, Shekh Rahamkar (Kaka Sahib), Rahman Baba and Abdul Ghaffur (Akhund of Swat/Saidu Baba) were sufis to a reclusive extent. Their khanqahs and mazars have served as centres for social harmony and peace for centuries. The Pakhtuns have been visiting these centres both for spiritual and material considerations.

A couplet by sufi poet, Rahman Baba, says:

So many people pay homage

to them, after their demise,

That the shrines of saints

turn into a sort of bazaar.

A mystic religion naturally leads to religious tolerance. This is also true to the spirit of sufi Islam. Historically, religious tolerance has been an important characteristic of the Pakhtun culture. It had reached its zenith during the Gandhara Civilisation. In recent Pakhtun history, the Khudai Khidmatgar Movement greatly exhibited religious tolerance, let me say, in the true Buddhist spirit and tradition. Similarly, when large parts of the Indian Sub-Continent, on the eve of partition, were engulfed by the raging inferno of Hindu-Muslim riots, the Pakhtuns of Waziristan were saying goodbye to their non-Muslim fellow Waziristanis by hugging them affectionately.

A similar spirit of brotherhood towards non-Muslims was shown in Loralai. A Kakarhai ghaarha, a genre of folklore, by the departing Hindus of Loralai at the time of migration expresses their sentiments: "There can be no greater tragedy in my life than being separated from beloved Makhter (a place)."

The pluralistic vision of the Pakhtun culture makes space for change, development, adaptation, and mutual coexistence. Again, the Gandhara period and the Khudai Khidmatgar Movement are replete with examples in this respect. Similarly, the bazaar at the Pir Baba shrine has been a great evidence of the pluralistic spirit of the Pakhtun society till now.

Lastly, secularism makes Pakhtunwali a dynamic culture, amenable to change. Traditionally, the socio-political and economic spheres of the Pakhtun life have been regulated by hujra (centre for social and political activities) rather than dictated by jumat (mosque). In this sense, the Pakhtuns make a secular society. This fact, beyond doubt, lies at the core of the age-long social harmony in the Pakhtun homeland.

As disproportionate change in recent times has occurred in regard to separation between the realms of religious and mundane, especially in favour of the former, the Pakhtun society is destined to witness social, political and religious disturbances. In this context, it is the need of the hour to direct our collective efforts to the revivalism and renaissance of the true culture of the Pakhtuns, Pakhtunwali, in its historical context.

Email: rafi_ula@yahoo.com

 

 

Cost of corruption

There is a need to restructure anti-corruption departments on modern lines

By Usman Saeed

A glance at the efforts to develop anti-corruption institutions indicates that the ruling regimes, barring exceptions, have been tinkering with the anti-corruption departments, primarily with political opponents in focus. The anti-corruption institutions of the early 1960s took cognizance of the crime even if ‘approved’ by the ruling masters. The Prevention of Corruption Act-1947, Public Representatives (Disqualification) Act 1949(repealed), the Elected Bodies (Disqualification) Ordinance-1959 (Repealed), etc. were mostly labelled with exercise in victimisation.

Anti Corruption Establishments (ACE) were formed in all the provinces in 1970 and the FIA in the capital in 1975. These establishments are in existence for over four decades now with low key development priority, thus no meaningful results can be shown by these bodies to control corruption. ACEs are victims of political and bureaucratic controls. Poor investigation capacity, under-sourcing and lack of operational freedom have virtually rendered these outfits ineffective. The FIA mainly looks into immigration, financial crimes, cyber crimes and now anti-terrorism. The multiple mandates, politico-bureaucratic intrusions in the form of Federal Anti Corruption Committee (FACC) and host of other organisational difficulties have made the functioning of FIA an uphill task.

Had we kept the development of anti-corruption bodies on our national agenda by allocating them top-class human resource, sufficient funds, and freedom in decision-making, the menace of corruption would have been significantly curtailed. The Ehtesab Bureau, which was formed in 1997, supplementing the Ehtesab Commission, was the first serious effort aimed at combating corruption in the country. The Bureau assumed the responsibility of investigation while prosecution was entrusted to the commission. Ehtesab law was a strong law where the prosecution of cases at two tiers, i.e. Ehtesab Courts under the judges of the High Courts in each province with right of appeal in the SC was a far better and speedy trial process than the three-tier prosecution approach followed by NAB under National Accountability Ordinance (NAO).

The Ehtesab Bureau investigated a significant number of White Collar Crime (WCC) cases and its performance was by and large commendable as evident from the statistics of high profile prosecutions it undertook in a short span of time. It traced assets stashed abroad for the first time in the history of Pakistan and exhibited foreign documentary evidence on ill-gotten assets in trial courts. Unfortunately, Ehtesab Bureau was dismantled due to military takeover on October 12, 1999. The political opponents labelled this bureau as infested with agenda against political opponents. The Ehtesab Act-1997 was passed by the National Assembly with a two-third majority. It had all the merits and political support that justified its retention with certain amendments necessary for modernisation/functional improvements.

The NAB was established after Ehtesab Bureau. It was provided management on deputation from the armed forces. The bureau faced multifarious challenges in the formative years as it neither had the trained workforce of its own for investigating white collar crimes nor the capacity to handle substantially large portfolio of corruption/corporate fraud cases reported by the public as well as inherited from the Ehtesab Bureau. The NAB took the first challenge of recovery of defaulted loans. A list of top bank loan defaulters compiled by various banks/institutions was given by the State Bank of Pakistan to NAB for a countrywide crackdown. The nation witnessed arrest of influential personalities and retention in NAB custody till full/part payment of the defaulted loans. A handful of defaulters, however, managed restructuring of their defaulted loans. The drive against the loan defaulters was highly effective and widely appreciated by the public.

The hierarchy of NAB was conscious of the necessity for incorporating modern anti-Corruption Concepts and techniques in the system. For this, foreign consultants were engaged for organisational review. It succeeded in incorporating new initiatives in the orbit such as Awareness and Prevention Division, integration of FIA’s Anti-Corruption and Economic Crime Wings, Research and Training Wing, IT Wing, Logistics Wing, Security wing and a mini secretariat for National Anti-Corruption Strategy (NACS) Committee to oversee implementation of Governance Reforms in the Country. The FIA transferred over 30 percent of their workforce to NAB after thorough scrutiny of their moral and professional reputation.

The transfer of FIA workforce also brought-in voluminous workload of Corruption Cases to the NAB. But as it was still at a nascent stage, the present government reversed the decision. The SC announced landmark judgment in favour of NAO-99, with directions to remove certain anomalies in the ordinance. It was the first legal validation of NAO by the apex court of Pakistan. The blow to the potency of NAB’s operations came in year 2001-02, when NAB’s power to take cognizance of bank default cases was clipped through an amendment moved by the federal government where NAB could deal with the default cases when referred by a committee headed by the governor SBP only. A final payment notice to the bank defaulter by the SBP was made mandatory. The net outcome was an abrupt decline in the bank default prosecution cases by the NAB, leading to loss of deterrence value of the bureau.

Allegations of favouritism in cases against the pro-government politicians could not be defended in the public. Pro-Government politicians were openly accused by the civil society to be the beneficiaries as complaints, probes, inquiries, investigations prosecution cases against them were either not pursued with due competence or were shelved. The bureau’s anti-corruption operations against businessmen and politicians were drastically curtailed after November 2002 general elections. The corrupt bureaucrats, however, came on top of the agenda for criminal prosecution.

External influence/intervention leads to compromise, thus affecting the resolve to combat corruption. Shortfalls in investigation and prosecution skills also had the telling effect on organisational output that continued to decline. Perpetual delays in inquiries, investigations and prosecution in courts resulted in delays. Voluntary return and plea-bargaining concepts, although prevalent in many foreign countries, were also viewed by the public as instruments of compromise with the offender. The worst offender could get released after paying 1/3rd amount as the first instalment in case of plea bargain. The details of voluntary return cases never became public. The closure of inquiries, investigations, and withdrawal of cases from the courts remained a grey area throughout. The formulation of the first National Anti-Corruption Strategy (NACS) for Pakistan with the assistance of foreign specialists was good work that never got the attention it deserved. Resultantly, the reforms agenda for National Integrity System was not pursued by various stakeholders with due vigour.

The bureau also undertook research and analysis work on systemic weaknesses in governance; it trained prosecutors in prosecutorial skills for the first time in Pakistan. It worked as apex body for drafting anti-money laundering bill and ratification of International Convention against Corruption (ICAC). The NAB also worked as an institution to promote reforms in the provincial ACE’s of all the provinces, including Ehtesab Bureau of AJK. It conducted numerous sessions with the concerned provincial ACEs and drafted changes in their charter of assignments.

The removal of bottlenecks is the best approach rather than dismantling the entire system that demonstrated the capability far better than any other contemporary anti-corruption bureau in the SAARC region. The selection of directors and others strictly on the basis of high moral and professional standards can be an effective firewall against corrupt practices within the bureau. The need for introducing a check and balance system, involving the civil society, media, and judiciary to oversee closed cases will have a check on the discretionary powers of the competent authorities. Likewise, selection of prosecutors after carrying out consultations with various bar councils will have a salutary impact on the performance of the bureau. Introspection of the present workforce and elimination of non-professional officers in the bureau can also enhance their efficiency.

The government should re-evaluate the NAO, its mandate and organisational shortfall. Any effort to dilute the law will be contrary to the spirit of accountability. A group of specialists from the judiciary and the executive can identify human resource of weak moral and ethical standards, allegedly involved in closure and delays of inquiries, complaints, investigations, prosecutions on external influences or vested interests. This screening exercise should also be undertaken for FIA and Provincial ACEs for across the board effects. We should also set up a national anti-corruption authority, headed by Chief Justice of the SC (retired), with chairman FBR, Accountant General, Auditor General, Chairman PAC, Chairman JCSC, Federal Secretary Cabinet/Establishment, and an MNA each from the main political parties and few members from the civil society to act as a body to oversee federal anti-corruption institutions.

The writer is a former director NAB

 

verdict

Murder without a culprit

By Ahmed Yusuf

Pakistan People’s Party-Shaheed Bhutto (PPP-SB) Chairman Mir Murtaza Bhutto was gunned down on September 20, 1996 near his house. Six others – Ashiq Jatoi, Sattar Rajpar, Shajad Haider Ghakro, Rahim Brohi, Yar Mohammad Baloch, and Wajahat Jokhio – also sustained fatal injuries. Most newspaper stories and subsequent reports described the incident as a "murder", but the matter was always debated in august courtrooms. It is there, in two sessions courts, that it turned out that this was a case without a "culprit".

Two first information reports (FIRs) were registered after the incident, but inaction on the part of the authorities concerned forced Ghinwa Bhutto and Badrunissa Jatoi, widows of Mir Murtaza Bhutto and Ashiq Jatoi respectively, to appeal to the Sindh High Court that an FIR be registered. The appeal was upheld and a decision granted on November 11, 1996 – some six days after the Benazir government fell.

A third FIR was subsequently registered against 22 men at the Clifton Police Station by Noor Mohammed, said to be Murtaza’s guardian since childhood. The accused included the then Deputy Inspector-General (DIG) Police Shoaib Suddle, Intelligence Bureau Director General Masood Sharif Khattak, Senior Superintendent Police (SSP) Wajid Durrani, Assistant Superintendent Police (ASP) Shahid Hayat, ASP Rai Tahir, Napier Station House Officer (SHO) Agha Jamil, Assistant Sub Inspector (ASI) Abdul Basit, Sub-Inspector (SI) Shabbir Qaimkhani, Head Constable (HC) Faisal Hafeez, HC Raja Hameed, and police constables Ghulam Shabbir, Zulfiqar Ahmed, Zakir Mehmood, Zafar Iqbal, Gulzar Khan, Ghulam Mustafa, Muslim Shah and Ahmed.

Four other PPP-SB workers, who had travelled in Bhutto’s caravan that night: Dr Mazhar Memon, Asghar Ali, Mohammed Ayaz Dayo and Mohammed Ismail, were witness to the incident, and survived injuries. Two police officials, ASP Shahid Hayat and SHO Haq Nawaz Sial were also injured at the time. During the course of investigation, it was revealed that Sial registered the first FIR. He was unfortunately assassinated before judgment could be pronounced.

An SHC tribunal, led by former judge Justice (retd) Nasir Aslam Zahid, was formed. This tribunal declared that the incident could not have occurred without orders from the "very top" – a term that dragged Asif Ali Zardari, the spouse of the then Prime Minister Benazir Bhutto, into the case. The findings of the tribunal were barred from being presented as evidence in the matter under the lower court proceedings.

A counter case was also lodged by police official Haq Nawaz Sial, who had stated that Murtaza Bhutto and his comrades shot at the police party stationed near 70 Clifton when they were signalled to stop. Twelve men were named in the case. Through the course of the next thirteen years, a number of judges heard some part of the case, before they would be transferred or the case moved from their court. Interestingly, one of the female judges, Yasmin Abbasi, applied to the SHC to be relieved of her duties of hearing the case, stating that she was "finding it increasingly difficult to hear the case due to the blatant non-cooperation of the accused". The high court noted that since she was a woman, "it was beyond her capacity to deal with the case."

In the year 2003, the case was transferred to District Sessions Judge (DSJ)-East Ali Sain Dino Metlo, followed in 2004 by Zafar Ahmed Khan Sherwani. Regardless, there were 223 witnesses in the case, but the prosecution managed to examine only 73 of them.

Similar hindrances also occurred at the investigation side. The probe was temporarily stopped on December 16, 1996 after AIG Noor Mohammed Pacheho, the man conducting the investigations, was suspended. Pacheho, who retired as an SSP in the year 2007, told the court of Additional District and Sessions Judge (ADSJ)-East Aftab Ahmed Khan that he was inspecting the case, which started on October 10, 1996, but he had no records after December 16, 1996. He had submitted a list of people suspected to be involved to the courts, but was suspended from duty the very same day.

Charges of conspiring-to-murder could not be adequately proved and hence Zardari, now the president of the country, could not be indicted. The only word to prove the argument was Noor Mohammed’s, who had told a reporter that Asif Zardari had been curt over the phone when Ghinwa called him in the wake of the murder. His account could not be verified in the court of law.

Zardari later filed a plea in the SHC to quash criminal proceedings against him in the case, as the prosecution could not prove its charges for about 11-and-a-half years. The court of Justice Sabir Shah observed that the applicant’s name was not mentioned in the three FIRs, nor did the complainant nominate Zardari as accused while registering the case. The court noted that no other witnesses were left to be examined, and even if more witnesses were to be examined, the prosecution will not succeed in improving its case against the applicant. The court thus granted the plea on April 9, 2008.

Another accused who was acquitted was Shakaib Qureshi, a superintendent of police (SP) in Saddar. Shakaib Qureshi went to London and returned only after the Pakistan People’s Party (PPP) government came into power. His declared status of absconder changed, and upon his return, his case was segregated from the main case and hurriedly disposed of. The court of DSJ-East Abdur Rehman Bhatti exonerated Qureshi on November 14, 2008 due to a lack of evidence despite a lapse of about 12 years.

The judge, Abdul Rehman Bhatti, was transferred soon after acquitting Qureshi, and Zareef Qureshi was appointed ADJ-East to hear the case. Zareef Qureshi did not hear the matter in his last four hearings, and was also transferred. Judge Aftab Ahmed was then appointed ADJ-East, who heard the rest of the case. During this time, the other key accused named in FIR no. 443/1996, the one lodged by Noor Mohammed, not only managed to secure bail but also furthered their careers. Wajid Ali Durrani is now serving as the AIG, Karachi, Shoaib Suddle as Federal Tax Ombudsman, and Shahid Hayat as AIG, Welfare.

The judgment of the counter case came first, on December 4, 2009. The court declared that all the 12 accused, including absconders, had to be given the benefit of doubt, as "glaring contradictions" were discovered in the evidence. The verdict held that the prosecution miserably failed to establish its case against the accused. The then ASP Shahid Hayat and Clifton SHO Haq Nawaz Sial had sustained injuries, but it was not clear who fired at them.

The court held that investigation was also not thorough, and the corpses were not identified properly – as a result of which the post mortem report showed details of unknown individuals. The order further said that though a criminologist report stated that the accused had fired from their weapons, no bullet cases were recovered from the site of the crime. The prosecution’s inability to prove the charge of Section 320 (premeditated murder) of the Pakistan Penal Code against the accused was also highlighted. The next day, on December 5, all 18 accused were honourably exonerated from the Mir Murtaza Bhutto murder case. The judge observed that there was not ample incriminatory evidence against the accused, and that the prosecution failed to prove its case due to a number of loopholes and gaps, either on the part of investigation or the prosecution.

In the detailed order, the court said that the exonerations of Asif Zardari and Shakaib Qureshi had provided a precedent, as conspiracy-to-murder could not be proved against the accused. The court maintained that, "the offence of conspiracy cannot be proved through surmises" and that, "speculative conspiracy theory in the present case is absolutely devoid of substance". The judgment held that the police were authorised to check the caravan, as Bhutto’s guards were known to be heavily armed with sophisticated weaponry. The court also rejected allegations that Bhutto was shifted to the hospital late, stating that one of the accused, Rai Tahir, had immediately shifted Bhutto to the nearby Mid-East Hospital, which was fully equipped with all medical facilities.

Bhutto’s advocate Omar Sial, who was baffled after the judgment was pronounced, said, "It is a judgment that is incorrect and we will certainly appeal to the superior courts of Pakistan. I am also quite surprised to see how the English language and grammar of the learned trial judge has improved overnight while pronouncing the two judgments. I am also of the view that the manner in which the two judgments in a case and counter-case have been pronounced is by itself indicative of the decisions which are incorrect and beyond the jurisdiction of the trial court." The PPP-SB, according to Sial, would raise all issues in the appeal to be filed in the SHC. "We will continue our quest for justice," he said after receiving the copies of the detailed judgment.

caption

Ginwa Bhutto and Fatima Bhutto, among others, offering Fateha on the grave of Mir Murtaza Bhutto at Ghari Khuda Bakhsh.

 

 

‘Good luck’ for EU bad for Turkey

New appointments at the European Union have kicked up a debate about the future of the organisation

By Ansar Mahmood Bhatti

Often described as a miracle, the European Union appears to have ‘achieved’ yet another milestone by appointing a president of the European Council and a foreign affairs minister last month. These appointments come in the wake of implementation of the Lisbon Treaty, which envisages drastic changes in the existing EU structures so as to transform it into a more vibrant; coherent, and a powerful outfit that is capable of playing as a counter-balancing force in a world dominated by the US.

Since the evolution of the EU is a direct result of the World War II, in which millions of people lost their lives, the central point in setting up this organisation was perhaps to stymie any future threats to humanity. Some even say the Cold War was another factor that had led to the creation of the European Community.

Anyhow, now we have a powerful body comprising 27 countries, with a population of about 495 million people, but even then at times this body finds it difficult to act as a bulwark against unilateralism and expansionism, mainly because of its lack of interest in becoming a political power as well. And this is of course a fundamental anomaly which it needs to overcome sooner rather than later, because it may not be able to play an effective role at the world stage by acquiring status of an economic power and remaining a political dwarf.

However, as compared with the Organisation of Islamic Conference (OIC), South Asian Association for Regional Cooperation (SAARC), and Non-aligned Movement (NAM), the European Union is better poised and has potential and capacity of immediately recovering from occasional political and monetary hiccups. In contrast with other bodies, EU happens to be lucky to have leaders gifted with great insight and sagacity — though exceptions are always there.

The Lisbon Treaty or Reform Treaty, as we may call it, is an improved version of erstwhile European Constitution that could not see light of the day because of its rejection by the French and Dutch voters in 2005. Despite all ifs and buts, the Lisbon Treaty proves to be a masterpiece crafted by able European thinkers, who had to toil day and night, to translate this dream into reality.

Today’s Europe is different in many ways, as John Newhouse would put it in his book Europe Adrift. It isn’t a Europe of self-contained, independent states, nor is it a cohesive European Union. Power is shifting unevenly among the national capitals and Brussels-based institutions of the EU. On November 19, the European Council met to fill top jobs, as per provisions of the Lisbon Treaty, but it surprised all by selecting almost ‘nobodys’ for the coveted slots. The appointments of Herman van Rompuy and Catharine Ashton as the President of the Council and the foreign affairs supremo respectively, confirmed that France and Germany are still the ones influencing key decisions within the bloc, an approach that is in direct conflict with the spirit of the Treaty, which says all decisions shall be taken through the qualified majority system and not by consensus.

A perception is emerging fast within and outside Europe that Mr. Rompuy lacks in political acumen and skills and that he, therefore, may find it hard to lead the EU in an assertive manner. Mr. Jan De Kok, the European Union Ambassador in Pakistan has a different view. "Mr. Rompuy has a vast experience as Minister and as Prime Minister of Belgium, i.e. over 20 years. Besides, he has good credentials of a consensus builder and what we need from him is to get consensus among European leaders and get the citizens excited again about Europe", he says.

Germany and France opposed Tony Blair’s candidature for the top job because of two cardinal reasons, 1) his appointment as Council President might have overshadowed leaders of both these countries, and 2) there was fear of a split among various member countries, majority of which was not happy with Blair’s Iraq policy and his out of proportion tilt towards George Bush, maybe towards America. But knowing it from the onset that their candidate will never be able to make it, even then Gordon Brown and his cabinet continued to supporting him wholeheartedly.

This gimmick really worked and enabled them to have perhaps even a better deal whereby Ms. Catharine became foreign minister and vice-president of the European Commission. "As for appointment of Ms. Ashton, there is no reason to doubt that she can give meaning to the Common Foreign and Security Policy (CFSP)", is the understanding of Mr. Jan de Kok.

While the new office-bearers are set to take charge of their assignments after the implementation of the Lisbon Treaty, effective from December 1, criticism is not going to die down anytime soon. Ms. Ashton’s appointment, especially, is likely to evoke more flak for she comes from a country that has always been reluctant to be a full-blooded member of the EU. Britain is still out of single currency euro and the Schengen visa system, the two key factors that should determine depth of relationship between a country and the EU. Interestingly, even after signing of the treaty, rules of the game — the game of exercising political expediency, influence and clout — remain unchanged.

The allotment of portfolios to commissioners has almost been finalised and shall come into effect after the European Parliament accedes to these appointments. Being the executive arm of the EU, the Commission is responsible for proposing legislation, implementing decisions, upholding the Union’s treaties and the general day-to-day running of the Union. That is why every country pursues turbo-charged campaigning in order to grab lucrative positions. Despite potential opposition from Britain, France was able to pocket the most important portfolio of internal market, with a view to maintaining a tight control over the financial services.

All said and done, new appointments may not bring any respite to Turkey’s frets and furor for Rompuy has been an inveterate opponent of Turkey’s EU membership. He once remarked, "Turkey is not a part of Europe and will never be part of Europe. The universal values which are in force in Europe, and which are fundamental values of Christianity, will lose vigour with the entry of a large Islamic country such as Turkey." One may have sincere sympathies for Ankara, whose chances of becoming a full member, especially in the current scenario, are stretching thin and its accession desire turning out to be more ideal than an attainable goal.

Let’s derive some hope from the words of Ambassador Kok who is confident that the end result will be positive. Agreed, it will certainly take some time to make the Lisbon Treaty work, but it is incumbent upon the new appointees to come up with a comprehensive future strategy so as to address apprehensions of their critics. Appointment of ‘unknowns’ to prize posts goes to show that the EU wants to make a humble and steady beginning. If it really intends to have a smooth sailing in the coming days then it will have to make sure that influential national governments are not allowed to eclipse performance of the inductees.

The writer is a bilingual columnist and has special interest in EU affairs. A collection of his columns is available in book form titled, Current Affairs. He can be reached at ansarbhatti@hotmail.com

caption

Cause to be happy for Herman van Rompuy and Catharine Ashton.

 

 

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