analysis
Zardari haters on the march
Pakistan’s problems are neither Zardari’s creations nor would it be reasonable to expect him to fix them with the wave of a magic wand
By Aasim Sajjad Akhtar  
So whether or not the President has truly been laid low by a ‘minor heart attack’ or an ‘in-house coup’, the Zardari-haters are suddenly feeling a lot better about life. For the best part of four years Benazir Bhutto’s widower has been the most detested man in Pakistan, in large part because he occupies the presidency (he would be less hated, but hated nonetheless, even if he were still in Adiala Jail). Constituencies as diverse as big media houses, the liberal intelligentsia, General Headquarters (GHQ), the Chief Justice and opposition politicians have been clamouring since soon after Zardari entered the President’s House to put together a viable ‘minus-one’ formula. Could it be that their tireless efforts have finally borne fruit?  

Data-based decision
making — II

The mirage of electoral democracy that holds the country together will be in jeopardy if the plans for decennial census are poorly accomplished 
By Amjad Bhatti and Nadeem Omar
It is alarming to note that household census, which is the basis of population head count, will be outdated, if the population census does not commence by December, 2011. The most likely scenario is that census process is likely to suffer delays and may not take place this year due to resource constraints and attention being diverted to the preparation required to hold forthcoming national election in 2013. 

Take on the tax havens! 
Countries that lose tax revenues become more dependent on foreign aid
By Huzaima Bukhari and Dr. Ikramul Haq
Half the world’s trade passes through tax havens. They are hiding trillions of dollars on behalf of criminals, dictators, wealthy individuals and multinationals. — http://www.tackletaxhavens.com 

participation
Local problem
The system should have an inbuilt mechanism to solicit feedback from citizens on a periodic basis
By Gulbaz Ali Khan
The fruits of 18th Amendment are yet to be reaped by the common man as the provinces are reluctant to devolve their powers to the local tiers. The evidence has proved that local service delivery is efficiently and effectively achieved through the people-centered and controlled governments. 

Uneasy relationship
Pakistan and the US seem to be testing each other’s patience one more time
By Salman Abid
Is there going to be some change in Pak-US relations or will it revolve around the same give-and-take policy? Although military leadership and political parties, both inside and outside the parliament, had come out with a clear policy framework after the All Parties Conference (APC) yet results are still awaited.

An evening with Chomsky
“The United States is not as dominant as people seem to think”
By Jazib Zahir
Noam Chomsky is one of the most revered intellectuals of the modern age. Trained as a computational linguist, the professor at the Massachusetts Institute of Technology is lauded for his incisive and maverick criticism of American foreign policy. He remains a favourite of passionate students of political science and law the world over.


follow-up
Trading with favourites

The public and governments of India and Pakistan should now reject the culture of hate, blame game and stand united for regional peace and security
By Irfan Mufti  
There is an ongoing debate in both countries on whether this favoured status will bring any benefits to either side or would Pakistan be swamped by Indian trade giants? A lot of myths and misperceptions on this point need to be explored and analysed before making any judgment.  

Politics of governance
Lawlessness must be replaced with initiatives of good administration
By Dr Noman Ahmed
During the past few weeks, we observed various types of street protesters trying to win over the government around their stated positions. Protests around power outages and load shedding, for instance, made the federal government immediately kneel down. It released eleven billion rupees to oil companies and other entities to ease the fuel supply which led to some improvement in power sector.

 

 

  

 

analysis
Zardari haters on the march
Pakistan’s problems are neither Zardari’s creations nor would it be reasonable to expect him to fix them with the wave of a magic wand
By Aasim Sajjad Akhtar

So whether or not the President has truly been laid low by a ‘minor heart attack’ or an ‘in-house coup’, the Zardari-haters are suddenly feeling a lot better about life. For the best part of four years Benazir Bhutto’s widower has been the most detested man in Pakistan, in large part because he occupies the presidency (he would be less hated, but hated nonetheless, even if he were still in Adiala Jail). Constituencies as diverse as big media houses, the liberal intelligentsia, General Headquarters (GHQ), the Chief Justice and opposition politicians have been clamouring since soon after Zardari entered the President’s House to put together a viable ‘minus-one’ formula. Could it be that their tireless efforts have finally borne fruit?

Somehow I doubt it. One can say what one wants about Asif Zardari — and I am hardly a Zardari jiyala — but the fact is that he has proven to be a political survivor. Indeed, if one compares the present democratic experiment to those during the fated 1988-99 interregnum, Zardari has proven that he has the tactical nous to thrive in the cynical and opaque game of power politics. That the so-called ‘politics of reconciliation’ is riddled with contradictions is by the by — Zardari has kept himself and his party in power, and both the parliament and president are actually threatening to complete their full terms.

The present Dubai retreat is not the first of its kind, and likely not the last. We consumers of the mass media’s stories have been convinced umpteen times that Zardari is on his way out, and found each time that the show is not quite over yet. The constant sensation has contributed greatly to the feeling that pervades most urban middle-class homes about Zardari being the primary reason for everything that is wrong in Pakistan, and the attendant belief that all will suddenly be well if Zardari is kicked out. Of course, this is exactly what many people thought vis a vis Musharraf (the mirror image of which was the conviction that the country would be resuscitated dramatically with the restoration of the Chief Justice and the implementation of ‘rule of law’). More generally, most incumbent governments throughout Pakistan’s history have been decried as incompetent and corrupt, although there is a distinct lack of patience when it comes to elected regimes in comparison to military ones.

In fact, Pakistan’s problems are neither Zardari’s creations nor would it be reasonable to expect him to fix them with the wave of a magic wand (assuming he wanted to). At most, it can be argued that Zardari hails from the small class that rules Pakistan — a class which, many experts tend not to acknowledge, has changed considerably over the decades. This does not mean that Zardari, or any other constituent member of the ruling class, has no contradictions with other members of this class. Indeed, arguably the primary political contradiction in Pakistan remains the civil-military divide. It is in this complex context of class and institutional conflict that Zardari’s political role should be understood (and appraised).

As I have argued on these pages numerous times in the past, it is shocking that purportedly ‘alternative’ models of politics are premised upon the simplistic notion that the solution to Pakistan’s problems is to get rid of Zardari. Let alone the newest contenders for power, Nawaz Sharif’s politics appears to have once again degenerated into sloganeering and petty personal slander, which is a disappointment after all of the talk of friendship with India, military accountability and the like in recent months.

Even if one is to look beyond the thorny and incredibly complex question of relations with big powers — including India and the US — none of our mainstream parties is likely to better Zardari’s stance on other important policy matters (which is hardly saying much given that the present government has tried not to rock the boat on many fronts). Take, for example, the Baloch ‘problem’. I cannot see the Pakistan Muslim League or Pakistan Tehrik-e-Insaf (PTI) suddenly acquiring meaningful decision-making power vis a vis Balochistan and undoing the decades-old carrot-and-stick policy of the ‘centre’ (read: GHQ). Indeed, I even doubt that Nawaz Sharif or Imran Khan would go to Quetta and apologise to the Baloch people. And what of our economy? Is there any prospect of the prospective economic managers of the PML and PTI extricating the Pakistani economy from the clutches of the international financial institutions (IFIs)? Will they suddenly be able to start taxing the rich, let alone the military’s corporate empire? Will they be able to magically produce more power than is possible given existing infrastructure? Will they enforce restrictions on the wave after wave of cheap Chinese consumer durables that continue to flood our domestic markets?

The mostly hollow sloganeering of opposition parties aside, one cannot help but wonder what disease afflicts our hallowed intelligentsia. Why are they able to see only Zardari’s apparently unprecedented corruption and not the systematic pilfering that takes place at all levels of state and society which is so substantial that it cannot even be quantified? How is it that Zardari can be accused of surrendering all sovereignty to the US — or whoever else, for that matter — while the military remains the principled ‘guardian of the state’ even though it has greedily accepted tens of billions of dollars of American military hardware since 9/11?

The point, as I have already noted above, is that Zardari is just one individual actor within a structure of power that implicates many, many more such individuals and institutions. To even suggest that he exercises as much power as the Zardari-haters suggest, or worse that he is only thing separating Pakistan from peace and prosperity is nothing less than a blatant obfuscation of reality. It hardly needs saying that such blatant lies do not just happen to become part of the public discourse — they are deliberately propagated. Unfortunately, for those trying to lay all blame on the man, it is more likely than not that he will soon be back to haunt them. If and when the people of Pakistan send someone else to the presidency, we can all move on from the acrimony that Zardari’s person engenders. I doubt, however, that we will move as quickly beyond our many structural crises.  

 

Data-based decision
making — II
The mirage of electoral democracy that holds the country together will be in jeopardy if the plans for decennial census are poorly accomplished 
By Amjad Bhatti and Nadeem Omar

It is alarming to note that household census, which is the basis of population head count, will be outdated, if the population census does not commence by December, 2011. The most likely scenario is that census process is likely to suffer delays and may not take place this year due to resource constraints and attention being diverted to the preparation required to hold forthcoming national election in 2013.

The financial resources required for authentic and transparent census operations can be partially met nationally and international donor support and private sector investments must be provided to the government.

Although conducted by the federal government, the provincial government plays a critical role by coordinating and supervising the activity and providing the field staff. The task of door to door verification of voter lists by Election Commission of Pakistan and NADRA is performed by the same set of field staff in the provinces who are to undertake the population census.

On a positive note, the Census Ordinance of 1959, which formed the basis of statistical management in Pakistan and under which the past five censuses were conducted has been revised and expanded this year under the Eighteenth Amendment.

According to the decision of Implementation Commission, 11 subjects related to collection, compilation and management of statistical data — earlier being managed by the abolished 17 ministries — have been re-allocated to the Federal Bureau of Statistics.

As a follow-up legislation to the 18thConstitutional Amendment, the Parliament has passed the General Statistics Act 2011. The General Statistics Act 2011, for the reorganization of statisticalsystems in Pakistan, provides a fresh opportunity for reviewing the instruments of census, methodology, and institutional mechanisms for producing timely, reliable authentic and transparent data.

Surprisingly, the Act does not subscribe any role to NADRA, a federal body for civil registration, for negotiating with thereorganization of statistical regimes in Pakistan. The linkages between various institutions of statistical management are not clearly spelled out in the revised Act.

The alleged use of fake, duplicate, and unauthorised Identity Cards (Ids) during the voting on polling stations is repeatedly cited as one of the most common instruments of rigging and proxy representation in Pakistani elections. Currently, NADRA and Election Commission of Pakistan are working jointly to bring about the regime of transparent data management of electoral roles for next election.

The population increase would lead to increase the number of voters requiring updated electoral role for next election. A new strategy of One CNIC, One Vote is being introduced by NADRA and the Election Commission of Pakistan.

It is important to note that NADRA has increased the registration of population from 55 percent to 91 percent in last three years. Official data indicates following provincial breakdown of registration: 98 percent of the population of Khyber Pakhtunkhwa, 82 percent of Federally Administered Tribal Areas, 92 percent of Punjab, 85 percent of Sindh, 73 percent of Balochistan, 99 percent of Islamabad and Azad Jammu and Kashmir. “In Sindh and Balochistan, the ratio of women’s registration has increased to 78 percent as compared to the previous ratio of 28 percent.

The 7th NFC Award indicates a radical shift in the process of resource distribution between federation and the federating units. The Award has adopted by consensus a set of multiple criteria for determining horizontal distribution of resources against a historical trend of using a single criterion of Population.

Multiple criteria for distribution of revenues amongst the provincial governments was used for the first time in the history of Pakistan. The four point criteria include: population, poverty or backwardness, revenue collection, or generation and inverse population density with the ratio of 82 percent, 10.3 percent, 5.0 percent and 2.7 percent respectively.

Evidently, the mechanism of resource distribution from federation to provinces and between provinces is based on four indicators mentioned in the 7th NFC. Inevitably, that necessitates developing disaggregated data on all four indicators as basis for accurate and predictable resource distribution. However, apart from outdated population data, other three indicators do not have any credible data generated by provinces or the federation. This has critical implication on the implementation of 7th NFC as pre-requisites of fiscal decision-making will remain missing unless authentic and accurate data is not generated, collated and interpreted for the fiscal management at federal and provincial levels.

The turbulent history of census in Pakistan, especially in Balochistan and Sindh indicates the over politicization of census in Pakistan, which has jeopardised the national planning process. Without reliable census figures, macroeconomic management is bound to fail and so is the forthcoming electoral process based oncensus figures fraught with the duplicity.

The accuracy and authenticity of the census figures are critical for transparent, free and fair elections. Given the rapid changes in the demographic profile of Pakistan due to urbanisation, migration, displacements and changes in the federal structure of the state, it is imperative to review the changes in the statistical management regime of Pakistan and suggest measures to reform the traditional censuses with exhaustive information.

To democratise the process of census undertaking, data generation and statistics management, the Council of Common Interest (CCI) should convene a special session to iron out some appropriate framework. Governments should raise awareness about the importance of the census for socio-economic development.

It should highlight the linkages between the reliable statistic and equitable resource allocation and just political representation. Women’s involvement in the census process should be enhanced. No systematic attempt has been made by the government to involve women in planning, designing and implementing census data collection.

To enhance public participation in the census, publicity campaign should be conducted through panel discussions on television and radio, and to a lesser extent display of some posters, jingles and songs carrying census messages on TV, and quiz programmes, jingles and songs on radio.

The effort to improve public participation in the census activities and the census data on gender sensitive issues should be broadcasted on television and radio. Using television is the most effective way to have census messages trickle down to the general public, respondents and enumerators in order to elicit their cooperation.

The involvement of NGOs in the census taking process should be enhanced. All census data users and stakeholders should be consulted on the census questionnaires. All concerned departments of the public sector, including research organisations, universities, NGOs dealing with population and housing data and relevant international agencies were invited to put forward their requests for questions to be incorporated into the census.

Women’s organisations dealing with population should also be contacted. The mirage of electoral democracy that holds the country together will be in jeopardy if the plans for decennial census are poorly accomplished.

 

(Concluded)

(Amjad Bhatti is a development researcher, communication expert, and founding executive director, School of Political and Strategic Communications (SPSC), Islamabad.

Dr Nadeem Omar Tarar is a development anthropologist based in Islamabad.)

 

 

 

 

Take on the tax havens! 
Countries that lose tax revenues become more dependent on foreign aid
By Huzaima Bukhari and Dr. Ikramul Haq

Half the world’s trade passes through tax havens. They are hiding trillions of dollars on behalf of criminals, dictators, wealthy individuals and multinationals. — http://www.tackletaxhavens.com 

Tax Justice Network (TJN), an international body, promotes transparency in international finance and opposes secrecy. It supports a level-playing field on tax and opposes loopholes and distortions in tax and regulations, and the abuses that flow from them.

It campaigns for tax compliance and opposes tax evasion, tax avoidance, and all the mechanisms that enable owners and controllers of wealth to escape their responsibilities to the societies on which they and their wealth depend. Tax havens, or secrecy jurisdictions as TJN prefers to call them, lie at the centre of their concern.

Recently, TJN has launched a worldwide campaign called ‘Tackle Tax Havens’ (www.tackletaxhavens.com) which must be joined by Pakistan as well. We are victim of tax evasion, money laundering, loot and plunder of national wealth. The campaign can help educating the general public—creating awareness about problems caused by the offshore finance system.

The campaign describes how offshore centres are used by “criminals, dictators, wealthy individuals and multinationals to salt away money illegally withdrawn from countries where law-abiding residents are left to foot the bill”. The campaign outlines the following three simple measures which, if taken, can eradicate tax evasion and make the single biggest contribution to solving the world’s financial crisis:

All tax havens should give details of the ownership of all companies and trusts located there, and the accounts of those organisations.

All multinational companies publish accounts that reveal their use of tax havens.

All tax havens should be required to exchange information each year on the income recorded within them belonging to the citizens of other countries with the places where those people really live.

The above measures, the campaign pleads, would shatter the secrecy of tax havens for good, and that means those committing tax crimes will no longer have places to hide the proceeds of their crimes. “Nothing could make a bigger contribution than this to solving the world’s financial crisis right now”, it adds.

Economists, tax and financial professionals, accountants, lawyers, academics and writers of the world have a consensus that tax is the foundation of good government and key to the wealth or poverty of nations. But this foundation is under threat by tax havens.

Tax havens offer not only low or zero taxes, but something broader. What they actually do is to provide facilities for people or entities to get around the rules, laws and regulations of other jurisdictions, using secrecy as their prime tool. TJN, therefore, prefers the term “secrecy jurisdiction” instead of the more popular “tax haven” and highlights following serious problems:

Tax havens help rich people hide money that should be spent on schools, hospitals, roads and other public services

Tax havens force poor people to pay taxes due from the rich

Tax havens help criminals hide their loot

Tax havens help dictators and their cronies plunder resources of developing countries

Tax havens allow banks to dodge financial rules and regulations

Tax havens corrupt markets, concealing insider dealing and supporting aggressive tax dodging by multinational companies

Tax havens create a private world of secrecy, impunity and power for rich elite

Tax havens widen the gap between the rich and poor people

Tax havens make laws in secret which affect us all

Tax havens degrade our faith in democracy

According to TJN, “the corrupted international infrastructure allowing élites to escape tax and regulations is also widely used by criminals and terrorists”. As a result, tax havens are heightening inequality and poverty, corroding democracy, distorting markets, undermining financial and other regulation and curbing economic growth, accelerating capital flight from poor countries, and promoting corruption and crime around the world.

The offshore system is a blind spot in international economics as it blurs our understanding of the world. The issues are multi-faceted, and tax havens are steeped in secrecy and complexity, which helps explain why so few people have woken up to this scandal and why civil society has been almost silent for so long.

Now many government and non-governmental bodies are seeking or supplying expertise to help open up tax havens to proper scrutiny at last, and to make the issues understandable by all.

The fight against tax havens is one of the great challenges of present day world. It challenges basic tenets of traditional economic theory and opens new fields of analysis on a diverse array of important issues such as foreign aid, capital flight, corruption, climate change, corporate responsibility, political governance, hedging funds, inequality, morality — and much more.

Assets held offshore, beyond the reach of effective taxation, are equal to about a third of total global assets. Over half of all world trade passes through tax havens. Developing countries lose revenues far greater than annual aid inflows.

According to studies conducted by TJN, the amount of funds held offshore by individuals is about $11.5 trillion — with a resulting annual loss of tax revenue on the income from these assets of about 250 billion dollars. This is five times what the World Bank estimated in 2002 was needed to address the UN Millennium Development Goal of halving world poverty by 2015.

This much money could also pay to transform the world’s energy infrastructure to tackle climate change. In 2007 the World Bank endorsed estimates by Global Financial Integrity (GFI) that the cross-border flow of the global proceeds from criminal activities, corruption, and tax evasion at US$1-1.6 trillion per year, half from developing and transitional economies. In 2009 GFI’s updated research estimated that the annual cross-border flows from developing countries alone amounts to approximately US$850 billion — US$1.1 trillion per year.

Offshore finance is not only based in islands and small states, it has become an insidious growth within the entire global system of finance. The largest financial centres such as London and New York, and countries like Switzerland and Singapore, offer secrecy and other special advantages to attract foreign capital flows.

As corrupt dictators and other élites strip their countries’ financial assets and relocate them to these financial centres, developing countries’ economies are deprived of local investment capital and their governments are denied desperately needed tax revenues. This helps capital flow not from capital-rich countries to poor ones, as traditional economic theories might predict, but, perversely, in the other direction.

Countries that lose tax revenues become more dependent on foreign aid. Recent research has shown, for example, that sub-Saharan Africa is a net creditor to the rest of the world in the sense that external assets, measured by the stock of capital flight, exceed external liabilities, as measured by the stock of external debt. The difference is that while the assets are in private hands, the liabilities are the public debts of African governments and their people.

Of late, globalisation, international trade and finance have earned a bad name. Each brings opportunities and risks. It is time that international community addresses seriously what may be the biggest risk of all: tax abuse, and tax havens and everything they stand for.

 

The writers, tax lawyers and authors of many books on Pakistani tax laws, are Adjunct Professors at Lahore University of Management Sciences (LUMS).

 

 

participation
Local problem
The system should have an inbuilt mechanism to solicit feedback from citizens on a periodic basis
By Gulbaz Ali Khan

The fruits of 18th Amendment are yet to be reaped by the common man as the provinces are reluctant to devolve their powers to the local tiers. The evidence has proved that local service delivery is efficiently and effectively achieved through the people-centered and controlled governments.

The need for local governments in our country has now got immense importance due to the recent wave of youth movements observed in the political parties’ activities in large urban centers across the country. Experts also expect change in the upcoming elections due to the large presence of youth in the current population structure of the country.

The petition by one of the political party in the Supreme Court and consequent actions by the Election Commission of Pakistan to re-enumerate the current ballot sheets will also result in inclusion of large majority of unregistered youth voters.

The recently held general assembly of Civil Society Organisations (CSOs) and citizen groups in Dar-es-Salaam, Tanzania on November 18 and 19, 2011 called for open, transparent and inclusive budgets which will ensure full human rights — civil, social, political, economic, cultural, and environmental.

It is also accepted across the globe that citizen’s engagements in the budget process can enhance improved outcomes of public spending for the poor and marginalised segments of society. The general assembly also calls upon governments to ensure budget openness and transparency at local level and engage with CSOs for bringing social equity.

The recent political turmoil has undermined the need for developing this country into a livable place for citizens, which is only possible if the provinces are ready to devolve their powers to the local people. It seems unacceptable to all the political parties.

The provinces want to drive the local tiers through the strong hand of bureaucracy rather than involving people into the development process. The countries on the globe adopt such systems in which the local people are involved in the planning, implementation and monitoring process, which really makes difference in the lives of common people.

Porto-Alegre, city of Brazil adopted participatory budgeting process way back in 1990s and became one of the success stories around the world. At the grass root level, it involves people into the local budgetary planning process and prioritized the key development sectors which not only enhances effectiveness of the development-spending but also enhances the tax revenues due to citizen engagement. The successful Porto-Alegre model was adopted by more many cities in Brazil.

Do we really need the system, if yes, what type? Where the executive has unlimited powers to control, spend and monitor the public money, to which they do not belong to? Do we need citizens’ engagement at the local level to plan, implement and monitor development projects? The answers to these questions must be sought from four chief ministers to whom this responsibility rests with under the federal devolution plan.

In the past, chief ministers did not seem interested in local government system and wanted to control districts through appointed representatives to whom they can send orders within to overturn any policy or document. However, the current provincial governments are heading towards local systems but at a snail’s pace. Consultation processes are going on and on only with the political parties, Government and political parties do not consult CSOs and ordinary citizens.

The question arises about these local systems which will be presented in the provincial assemblies without consultation of ordinary citizens. Will it be acceptable to the people they govern? Or will they include ordinary citizens into the local government in such a way that it enhances oversight on implementation and monitoring of public spending?

Poor participation of citizens will lead to greater leakage of public money, weak ownership of public infrastructure, weak accountability and transparency. The current state of mal-governance will exacerbate as public oversight and accountability mechanism could not deliver. This has really pushed forward the need of demand side of governance and social accountability mechanisms. The current system lacks citizens’ voice in the supply side accountability mechanisms.

The local government system in the provinces must be people-centered with maximum inclusion of local people. The provincial government must take affirmative actions for more participatory approach towards drafting the local government system that includes the concerned citizen groups, CSOs and ordinary people. Once the draft is prepared, it must be consulted at the local levels before presenting it to the assembly for any discussion.

This system should have inbuilt mechanisms to solicit feedback from the citizens on periodic basis such as the “Citizen Report Card” on delivery of key services by the district governments.

 

The writer is a researcher and can be contacted at gulbazali@gmail.com

 

 

 

Uneasy relationship
Pakistan and the US seem to be testing each other’s patience one more time
By Salman Abid

Is there going to be some change in Pak-US relations or will it revolve around the same give-and-take policy? Although military leadership and political parties, both inside and outside the parliament, had come out with a clear policy framework after the All Parties Conference (APC) yet results are still awaited.

It is unfortunate that slogans of no compromise on national security and national interest have lost charm. The reason behind this is the fact that our government takes diplomatic pressure of America. At the same time, the element of public sentiment is successfully used as a tool by the Pakistani leadership.

Same is the situation we have at hand on national political scene, particularly the recent NATO air raid on military checkpost in Mohmand Agency near Pak-Afghan border. Again, it has put so many question marks on Pak-US relations.

We have to see what happens now since Prime Minister Yousaf Raza Gillani has vowed to review agreements made by Musharraf with US, ISAF and United Nations. He said the government has talked to all stakeholders, including the military and political leadership.

The first act of defiance came in the shape of boycotting the Bonn conference in order to make the world realize that Pakistan had an important role in the war against terrorism. It is interesting to see how for first time in Pakistan the political and military leadership saw the Nato strike as an opportunity to revise the entire terms of business on national and international issues made by the Musharraf government.

The government has assigned the national security committee of the parliament to prepare its recommendations over all important matters and submit these to the next joint session of the parliament.

If we have a look at Pak-US relations we find two divergent dimensions at the same time. First, in this war both of them are allies and strategic partners. Conversely, they have considerable amount of mistrust and confrontation in their relationship.

A few days ago, US Foreign Secretary Hillary Clinton said the two countries have consensus over 90 to 95 percent issues. But the recent NATO strike in Mohmand shows that something is creating misunderstandings between the two countries.

Understandably, that is why the US political and military leadership is putting great stress on formulating an aggressive policy against Pakistan. A number of US congressmen have been demanding that pressure on Pakistan be increased by putting a ban on civil and military aid or its terms be tightened.

We should also admit the fact that the war against terrorism lacked cooperation, coordination, and mutual trust, joint information sharing and understanding of its allies. All these bad developments seem to be pushing the US and its allies to the blind alley. It is upto the US if it revises its foreign and diplomatic policies in the light of the changing realities.

The US should adopt a policy of creating amity on the regional level and avoid animosity among allies by ensuring that incidents like May 2 and NATO strike will never take place in the time to come.

We know the US withdrawal from Afghanistan in 2014 is a great challenge indeed. Because US and its allies are bent upon carrying out decisions that would strengthen their interest and ensure political and administrative arrangements of their own choice.

Seemingly, the US contradicted itself as it engaged in dialogue with the forces against whom it has been fighting since long. But the Americans require full-fledged support of Pakistan military leadership and vice versa.

Now the issue is how long the stance taken by our political and military elite against US policies will last? Secondly, has Pakistan become strong enough to show reluctance to accept US policies?

At present, our political and military leadership show their resolve of saying no to further compromises. Undoubtedly, the US action on May 2 was more significant than the NATO strike on Mohmand agency. The entire episode shows that, as some critics say, we may one day accept a bitter reality that the only centre of power in Pakistan is the military institution.

We should stop moving towards war phobia because of two things: the war is the failure of diplomacy and, secondly, we are not in a position and capacity to wage a war. It is sensible and advisable for both military and civilian leadership in Pakistan to revisit foreign policy and make it diplomacy-perfect. It is unwise to boycott the Bonn conference, the only result we can have is more political isolation of Pakistan.

We spoiled a grand opportunity of lodging a serious complaint against US and NATO strikes before representatives of countries at the Bonn conference. We should have been able to file a powerful case of our efforts and sacrifices of forty thousand causalities and RS3.5 billion losses to our national exchequer in the war against terrorism.

A policy cannot work in which civilian leadership and military establishment is dealing with Americans for their ‘gains’. Any review of the security policy, which has several aspects, should start with the nature of the threat emanating from within the country such as religious militancy.

More importantly, Americans are not the only complainant against militancy within Pakistan. China, Iran, and India have got the same apprehensions. The decision to re-visit national security paradigm must be finalised and implemented keeping these challenges in mind.

 

The writer is a political analyst. He can be reached at salmanabidpk@gmail.com)

 

 

 

   

An evening with Chomsky
“The United States is not as dominant as people seem to think”
By Jazib Zahir

Noam Chomsky is one of the most revered intellectuals of the modern age. Trained as a computational linguist, the professor at the Massachusetts Institute of Technology is lauded for his incisive and maverick criticism of American foreign policy. He remains a favourite of passionate students of political science and law the world over.

It was thus no surprise that an event revolving around him was planned recently by students of the Lahore University of Management Sciences Law and Politics Society. In a packed auditorium, scores of students had a chance to watch a recent interview of Chomsky and exchange views on political topics.

The interview was conducted by an intellectual closer to our shores. Pervez Hoodbhoy is a leading Pakistani theoretical physicist and another one of those rare geniuses whose excellence extends far beyond his immediate area of expertise. He is a recent and valuable addition to the LUMS faculty and just this semester, he conceived and orchestrated a unique course on the rich but intricate interplay between science, the arts and society. Hoodbhoy availed an opportunity to  interact with Chomsky earlier this year in his office at MIT and graciously shared the short video clip with the public at large to engender constructive discourse.

The interview began with Chomsky’s views of contemporary America and he was very blunt in his assessment. He termed the Iraq war a catastrophic failure and demonstrated a pessimistic outlook for both the United States and Iraq in the aftermath of the effort. While Chomsky’s views on this matter are widely known, he stopped short of agreeing with Hoodbhoy’s assessment that this was the classical case of ‘imperial overstretch’ that had befallen many great empires of the past.

Somewhat surprisingly, Chomsky shared the belief that the United States has been in decline for much longer than people realise. He suggested that the United States was at its zenith shortly after World War II when its investments in the military-industrial complex were paying rich dividends. But he feels that beyond that point the United States was not as dominant as people seem to think. He suggested the world has been tri-polar for extended periods with Germany and Japan being comparable to the United States in terms of economic clout.

Chomsky traced the precipitous decline of the United States to critical decisions in the 1970s. He felt the decision to rapidly outsource manufacturing and production functions and shift towards an industry heavily predicated on financial tools was a major factor behind the nation’s undoing.

Yet, Chomsky was not bullish at all on the prospects of China. While many commentators rhapsodise on the size of the Chinese market and the robustness of its growth debt, Chomsky felt that Sino power is vastly overstated. He pointed out that in terms of the human development index China ranked pitifully and its GDP on a per capita basis was still a fraction of that in the United States.

He went so far as to suggest that the tools that measure conventional GDP are deeply flawed and felt that if more refined measures were used, the United States budget deficit relative to China would shrink while that relative to South Korea and Japan would widen. He bordered on the pejorative by defining China as the ‘assembly line’ of the world and pointing out that most of the innovation and real development was occurring in its neighbouring countries. His conclusion was that no one, including China, was really ready to step up and supplant the United States.

Chomsky suggested what he feared most was power because of its tendency to be abused. On the subject of Pakistan, he termed the county as a dangerous place with immense challenges but ended on the sanguine note that just as Europe had emerged from an age of bloodshed amid religious conflict, Pakistan too could rise from the ashes.

Students then engaged in an interactive question and answer session with Hoodbhoy. Predictably, they were most interested in discussing the relevance of this interview to Pakistan. Some students felt offended by the simplistic analysis of the situation in Pakistan and argued that the country was not as dangerous as it was perceived by outsiders. There was general agreement though that Pakistan had to look away from the United States for its future and Mr. Hoodbhoy described this process of disengagement as inevitable.

The session dragged on for hours but the most avid students stayed back eager to learn more in one of those rare sessions that allow students to forget their books and discover the inspirations that reside in the ivory towers of the world.

 

 

 

 

 

 

follow-up
Trading with favourites
The public and governments of India and Pakistan should now reject the culture of hate, blame game and stand united for regional peace and security
By Irfan Mufti

There is an ongoing debate in both countries on whether this favoured status will bring any benefits to either side or would Pakistan be swamped by Indian trade giants? A lot of myths and misperceptions on this point need to be explored and analysed before making any judgment.

Pakistan’s decision to grant India the most favored nation (MFN) status opens up many potential benefits for both countries. Existing trade arrangements will improve and new opportunities will emerge as bilateral trade is normalised. India has already given MFN status to Pakistan in 1997. The move will increase trade activities between Pakistan and India according to WTO terms.

The decision has come at a time when terrorism in the region has strengthened its hold and religious fundamentalists love to hate India. Similarly, within India, Hindu fanatic organisations and their followers do not favour amicable relations with Pakistan. In the wake of these possible reactions the decision is bold and will have a far-reaching impact on the peace and stability of the region and a good omen demonstrative of reconciliatory relations between two nuclear power neighbours.

It needs to be understood what MFN means in trading terms. In international economic relations and international politics, most favoured nation is a status or level treatment accorded by one state to another in international trade. The term means the country which is the recipient of this treatment must, nominally, receive equal trade advantages as the “most favoured nation” by the country granting such treatment. Trade advantages may include low tariffs or high import quotas.

At the same time, the term doesn’t imply any special or preferential treatment but merely absence of discrimination. In other words, in the multilateral framework, it is akin to treating the country as a normal trading partner when it comes to opening up trade in specified goods or providing tariff benefits.

At present, a great deal of trade between India and Pakistan occurs via informal and back market channels, including Dubai, a situation which is inefficient and fraught with illegalities effectively functioning as behind-the-border barriers to trade.

Indian products that arrive in Pakistan through this process include tyres, auto components, pharmaceuticals, engineering products, pans, chemicals and some textiles. These sectors will benefit immediately. On the Pakistani side, cement, fruit and vegetables, cotton, some specialized textiles, and sports items — also currently arriving via Dubai — will experience a rapid boost. And these are only the existing sectors.

India-Pakistan trade has so far demonstrated that the relaxation of constraints in bilateral trade would benefit both the countries as it will be a win-win situation for both. India has a middle class of about 300 million people with rising purchasing power that matches that of South Eastern Europe while Pakistan’s middle class is approximately 30 million.

A 10 percent access to the Indian middle class market would double the market size for Pakistani companies and businesses. If the empirical evidence is so strong why is trade between the two countries less than one percent of Indian exports and less than five percent of Pakistani imports? The volume of bilateral trade has not exceeded two billion dollars per annum (the total volume of Indian and Pakistani exports is around $200 billion). These questions need to be discussed and answered at various levels.

A State Bank of Pakistan’s study in 2005 estimated that the volume of trade could rise five times from the actual one billion dollars. An ICRIER study showed a much higher volume — about $10-11 billion (Pakistan 55 percent textiles; India 90 percent non-textiles).

There are 2,646 common items of Pakistan’s imports that India exports worth over $15 billion. For half of these items, the unit value of Pakistani imports is more than the unit value of Indian exports. Pakistan can import these items cheaply from India. At the same time, 1,181 items worth $3.9 billion are common between India’s imports and Pakistan’s exports. About 70 percent of these common items have unit values less or equal to the Indian import unit value.

On the industrial side intra-industry trade will also increase as the MFN agreement takes effect, and a large number of multinational corporations will likely set up their plants to serve both markets.

At present, there are some concerns in the country that our local industries will be adversely affected by a surge in exports from India. But in the case of MFN agreements, Pakistan can choose to formulate an exclusion list; it may prohibit imports of some particular products to begin with until the agreement’s impact becomes clear.

It should also be kept in mind that bilateral trade balance with any particular country does not have to be positive. There would be no trade in that case. Pakistan would run a trade deficit with India just as it does with China and surpluses with others.

Economic theory and empirical evidence have clearly established the links between trade, productivity and economic growth. Countries that have large internal markets have also benefited from integrating into the world economy and opening up their economies.

World trade in 2009 amounted to $12 trillion. The size of Pakistan’s domestic market is only $180 billion. Even a 0.5 percent share in the global export market implies that our exports could rise to $60 billion. Jobs will be created directly or indirectly as a result of expansion in the production of exportable items. Imports bring into the country transfer of technology embedded in imported goods and services and raise the country’s production possibility frontier.

China and India are projected to be the two fastest growing economies of the world over the next several decades. Pakistan is blessed by its location being neighbor to both these large economies. Our national economic interests dictate that we should expand our trading relations with both these countries.

There are three main reasons that have impeded the growth of trading relations: (1) political relations between the two countries have remained contentious. Trust deficit does not allow stability, (2) both countries have, until recently, pursued import substitution policies that protected local industry behind protective barriers, (3) the commitment to regional economic integration in South Asia has remained quite weak.

Countries with adverse political relationships, without giving up their principled stand on disputes and differences, have engaged in cross border investment, trade and movement of people. Over time these activities have helped in fostering better understanding of each other’s view points. Confidence building measures and creation of stakeholders in the countries can eventually defuse the tension and soften the ground for peaceful resolution of disputes.

It is, therefore, not right to wait for resumption of economic relations until the bilateral political disputes are resolved. If economic engagement is fierce, it is most likely that the hawks in each country will be confronted by the new stakeholders who are benefiting from such engagement and without giving up their respective positions while carrying out the composite dialogue. Resumption of economic relations should be allowed without any pre-conditions and without the countries giving up their respective positions. Composite dialogue should carry on at the same time to resolve the disputes and disagreements.

As a pre-requisites for trade relations to be transformed into concrete economic gains both countries must liberalize visa regimes, especially for business people.

Both India and Pakistan have opened up their economies, abandoned the old Import Substitution policies and embarked upon a process of integration with the world economy. The reforms they have carried out, such as cutting tariff rates, regulating duties, para-tariffs leave them in a much better position to pursue preferential liberalisation.

Public and governments on both sides should now reject the culture of hate, blame game and stand united for the sake of regional peace and security. It is high time that this region is subjected to the much-needed.

 

The writer is Deputy Chief of South Asia Partnership Pakistan and Global Campaigner

irfanmufti@gmail.com

 

 

 

Politics of governance
Lawlessness must be replaced with initiatives of good administration
By Dr Noman Ahmed

During the past few weeks, we observed various types of street protesters trying to win over the government around their stated positions. Protests around power outages and load shedding, for instance, made the federal government immediately kneel down. It released eleven billion rupees to oil companies and other entities to ease the fuel supply which led to some improvement in power sector.

The railway staff resorted to a nationwide strike and protests and earned instant dividend in the form of payment of salaries. Students of higher secondary school in Gujranwala took law in their hands and destroyed assets of the board worth millions of rupees to press for cancellation of error-ridden results. They too came out victorious.

Instead of admonishing the miscreants, the Punjab government instantly rolled back the announced results. A judicial commission has been formed to investigate the matter, fix responsibility and formulate recommendations. Lady health workers in Punjab and Khyber Pakhtunkhwa have been organising marches, rallies, protests and sit-ins of sorts to make the regime buckle under their demands.

The judge who authored and pronounced verdict in Salman Taseer murder case is reported to have left the country under pressure of protests, vigilantism and mob threats. PEPCO and WAPDA employees took to streets after sensing possible privatisation of their enterprises. The president is reported to have rolled back the decision as a consequence. These and many similar incidents refer to a very dangerous trend in state to polity relationship which can lead to many adverse consequences.

Pakistan is already in the grip of social unrest which has attained alarming dimensions recently. Many parts of Balochistan, Punjab, Khyber Pakhtunkhwa and Karachi have been constantly affected by rising tides of protests and agitation. Ironically, reasons for street action trickle down to the most basic functions of governance.

People now routinely come down on the street to register an FIR in a thana. It seems that the government considers it as a valid approach and mostly responds in the affirmative. Street agitators go back successful. These spot gains serve as a natural incentive for potential agitators from spread out ranks and profile.

The regime is unwilling to strictly deal with violators of law due to political considerations. The most glaring example is the episode of target killings in Karachi where the government only sprung into action after hundreds of people were ruthlessly exterminated. This inaction gives enormous encouragement to all law breakers with deep rooted ulterior motives.

Local youth with bad company and criminal orientation now align with extensions of political and sectarian outfits. With the power of gun behind them, they carry out multiple functions for their protection providers. From extortion to fund-raising for political rallies, diverse tasks are performed by the aimless youth.

With rising unemployment and limitation of formal income generation opportunities, the number of such wandering lads is on a steep rise. More young people are joining hands with brigades of political, religious and even banned outfits where a reasonable monetary compensation and patronage is guaranteed.

Pakistan has failed to positively utilise demographic dividend which is manifested in the form of this capable young population. No strength and number of law agencies can bring order to our society when full patronage would be covertly extended by elements of the state itself.

Impotence and inaction on the part of government functionaries is a key reason for agitation and subsequent mob action. The edifice of governance has been eroded progressively. Scores of new departments, commissions and public sector outfits are abounding. But either they do not deliver the tasks for which they have been enacted or people have very little faith in their sincerity and efficiency.

Thus, mobs do not hand over robbers or murderers to police. They prefer to deal with them on their own. The local governments have been struck down on a nationwide basis. No acceptable alternative has been made available. People find it most difficult to register their grievances on valid counts at a responsible platform.

Power outages, breakdown of law and order, petty internal disputes or dilapidated infrastructure are matters which are aggravated beyond respite. This country used to have public institutions facilitating linkage between potential employees and employers.

Offices of the ombudsmen are indeed present but ordinary people are not always aware about their existence. Besides, the normal course of working of such offices is time-consuming. Most cases cannot wait.

If a young boy returns home with the news that he has resolved his educational problems ‘on his own’ he is appreciated. This reinforces no respect for sound morals or an acceptable behavior code.

If the basic tenets of state and arms of government continue to display inaction, it shall give rise to more street actions. For champions of democracy, this must come as a warning bell. Politics of lawlessness must be replaced with initiatives of good administration. Adhoc solutions like outsourcing or privatisation have already proved disastrous.

We can take a cue from the success story of Indian Railways under Laloo Prasad which has posted billions of dollars of profits after dipping into financial turmoil a few years ago. Nothing will be as effective for the regime as common folk’s trust in the leadership that could ensure dependable governance.

  Home|Daily Jang|The News|Sales & Advt|Contact Us|

BACK ISSUES