solution in sight
A distant dream
At a meeting with Unesco before the recent elections, all major political parties pledged to work for Education for All (EFA). Are they likely to keep their promises?
By Atle Hetland
Pakistan scores poorly in education when compared with other countries at the same economic level. In this sector, for example, it lags behind even much poorer countries in Sub-Saharan Africa. Considering this, it is unlikely that Pakistan will achieve universal primary education or get even close to universal literacy by 2015, as per the international Education for All (EFA) targets and the country's own targets in its EFA Action Plan.
The Millennium Development Goals (MDGs) mention universal primary education as a key factor for poor countries' poverty reduction, economic growth and development. Major shifts, however, are unlikely in the near future in Pakistan, as there is not yet an EFA movement or a real demand for education in the country. If more voters had showed up at the February 18 elections, the common people's demand for EFA could have become stronger. Similarly, if more women had cast their votes in the recent elections, this could have helped ensure that the elected representatives focus more on education and poverty reduction. This is for the simple reason that women generally give more importance to education than men.
Many developing countries have high defence and low education budgets; and Pakistan is no exception. Though some improvements can be made through reallocation of resources, and improved efficiency and use of funds, there must still be a significant increase in the education budget. The higher education sub-sector has managed to increase markedly its share in the overall education budgets in recent years; yet the unit cost of a Pakistani university graduate is a fraction of what it is in the West. Likewise, what is spent on a primary school pupil in Pakistan and other developing countries is peanuts when compared with the same expenditure in the industrialised countries.
If Pakistan wants to get on to the "development highway" in the next few decades, investment in education at all levels has to be increased drastically. If we fail to do so, we are bound to remain backbenchers in the competitive regional and global world. We need education for skills and competence, but we also need it for creating confident and optimistic young people. Those who were unfortunate not go to school in childhood must also be given a second chance to get literacy, as well as other basics knowledge and skills, later in life. Don't we want a literate and skilled population?
Kenya introduced free (but not compulsory) eight-year primary education after its previous elections in 2002. And children flocked to schools! Kenya's gross domestic product (GDP) per capita is lower than that of Pakistan's. In Kenya, parents believe in education as one of the few ways for their children to escape poverty and climb the socio-economic ladder. On the contrary, in Pakistan, many parents do not see the purpose of education or they simply do not trust the education system -- education does not lead to jobs, its content is not seen as relevant enough and its quality is often poor. The poor parents, who realise the importance of education, but lack resources to send their children to even government schools, are left with hardly any choice but to send their children to madrassas (seminaries).
Why does Pakistan not have EFA, as stated in the 1948 United Nations Universal Declaration of Human Rights? Why the political parties have not promised with their voters to provide EFA by the end of the parliamentary term? If they do, the people will extend support to them throughout their term and probably in next elections too. Parents everywhere know the value of good education, relevant knowledge, positive attitudes, social and practical skills, and good moral behaviour and beliefs. Also, parents know they themselves can only teach their children a fraction of what they need in the modern world.
In the autumn of 1947, Quaid-e-Azam Muhammad Ali Jinnah spoke about education at least on two occasions. He stressed that education was a fundamental element for the new country to succeed. The 1973 Constitution states that free education up to the secondary level should be provided to all the country's children at the earliest. Yet, currently, over 50 million adults are illiterate in the country. There is a very high dropout rate at the primary level, thus leaving up to half of the country's children even without the short five-year school cycle. At least a quarter of the country's children are not enrolled at all. A few of them get some basic moral and religious education in madrassas, but its quality is often poor.
Limited opportunities are available at the secondary education level, and fewer still at the higher education level, leaving many of those who have done well at lower levels without possibilities to continue their education. Major investments have been made at the higher education level in recent years and the results are yet to be seen. Inequalities based on gender, geography, and social and economic backgrounds exist at all levels of education. This means that, in most cases, the poorest children -- notably those from tribal and remote areas, from ethnic and religious minorities, refugees, handicapped, and others outside the mainstream -- get very little or no opportunities for education, especially at the secondary and higher levels.
It is no wonder then that it is possible to recruit young and poor youth into anti-social and even terrorist activities? Maybe we should rather be surprised that they are not more in number, since there are so many children and youth who are marginalised with little hope for anything but a miserable life? What is keeping Pakistan from introducing free and compulsory primary EFA? Pakistan can afford it and the investment will bear fruit in many ways: Pakistan will become peaceful and prosperous, and the country's people will become enlightened. Investment in the education sector is also essential for people's participation in politics, as well as for democracy and economic development.
How come that our politicians, and even international aid agencies, do not realise the dangerous trend of not providing EFA? Even in the run up to the recent elections, education and poverty reduction were not at the centre stage. How come we keep denying the young people of the country one of the most essential human rights, education, so that they can not only uplift themselves but also help others? A group of experts believes that if the 1948 Universal Declaration of Human Rights had become a convention, rather than remaining just a declaration, it would have been much more binding than the current document. Similarly, if the Cold War had not distracted the world's attention from the Declaration of Human Rights, it could have been made more concrete -- ensuring that failure to fulfil any commitments under it would lead to counter action against the countries involved. If we had treated education as a human right, and less as something connected with economic development, we might have reached further towards universal primary education in most countries.
Educationists and politicians have always maintained that education is something a country provides only when it can afford it. More recently, they have realised that it is a tool to ensure economic development. Fine, but education also has a value in itself, as the human right it is. The economic aspects come later, but they, of course, are there. One of the most outspoken and sharpest critics of the international community's, especially the World Bank's, failure to implement the Universal Declaration of Human Rights was the late Katarina Tomasevski. She was a special rapporteur of the United Nations Commission on Human Rights on the right to education, and a professor of International Law and International Relations at the prestigious University of Lund in Sweden.
In her book entitled Education Denied: Costs and Remedies (Zed Press / London, University Press / Dhaka and White Lotus / Bangkok: 2003), Tomasevski spares few defaulters and advocates unequivocally for EFA. She argues that the purpose of education should not only be economic development, which has been 'in' over the last couple of decades and has blurred education as a fundamental human right. Tomasevski underlines that education can also be abusive to children and communities -- the curriculum content can be wrong, and the children can become victims of educational institutions and teachers. Hence the 1989 Convention on the Rights of the Child is essential, requiring that we must follow the yardstick in the best interests of each child, because each human being -- child as well as adult -- has indivisible human rights.
Tomasevski emphasises that it is the responsibility of governments to provide every child access to education. If they do not, they are in breach of international human rights laws. Thus all countries that do not have EFA breach the international laws and many other countries do so in specific fields. The content must be of reasonable standard and the education system must be free of treating children in abusive or cruel ways, let alone using education for propagandistic purposes. The government has the responsibility to make educational policies and to set standards, but it does not have the monopoly to be the only provider in this sector.
Though governments are the main abusers of human rights, they are also their main protectors. We always have to appeal to the government to be our protector, but we need to involve other watchdogs too -- to keep a check on the government or, to put positively, to encourage and assist it in fulfilling its roles and duties. Tomasevski underlines that we must see education as a human right, as a foundation for every person's life rather than as an investment for economic development. She claims that that is the only way that governments failing to provide EFA can be challenged.
What is puzzling is why Pakistan in particular and other South Asian countries in general have stayed in the backwaters for so long as far as education is concerned. How come that the South Asian countries have allowed close to half a billion people become 'capability / opportunity poor', according to the latest Human Development Report of the United Nations Development Programme (UNDP)? In the region, the common trend is that the upper- and middle-classes send their children to English-medium schools, and later to foreign universities for higher studies. In Pakistan's urban areas, up to a quarter of all children go to private schools. This is not necessarily bad, but these schools ought to be the last choice, not the first. Government schools ought to be the first choice and there should be a standard curriculum for all, including English-medium schools.
What is puzzling too is how so many people sitting at the top can accept the extreme differences between various socio-economic layers of the society. The upper echelons keep it all under their control, so that the status quo can be maintained. The middle-class supports them too, because its members want to climb the ladder as well. The rest, the large masses of humanity, does not even get a chance to compete -- they are not even on the bus and are not going anywhere at all. Every day is a hustle, an endless struggle to make both ends meet, and a trial to accept destiny's unfair and unequal treatment. Yet, without their sweat and labour, the elite could not be sitting pretty.
What is also puzzling is that the poor majority allows the status quo to continue. It accepts living in a master-servant relationship -- it bows to those who are better off and in power. The poor are even impressed by those who take advantage of their positions without having any right to do so, those who disrespect their religion by not sharing with those in need and those who give only lip service to poverty reduction. The question is that are the poor really impressed by the rich? It is very possible that they obey their orders only out of fear and in order to avoid any trouble? If so, then South Asians are the most patient people in the world, as they are faced with great disparities and inequalities.
Will the new parliament change all this? Probably not, especially since most of the new members of the national and provincial assemblies come from the upper class themselves. Yet we can always hope for the best -- even politicians can speak on behalf of the poor. A meeting of Pakistan's political parties to discuss EFA, organised last month in Islamabad by the United Nations Educational, Scientific and Cultural Organisation (Unesco), was an important event in this regard. All political parties represented on the occasion pledged to work for ensuring EFA. However, action must follow. Now when the elections have been held, we must help those who are for EFA to implement it. We must also expose those groups who are against it. When there will be greater social mobility, then the elite is likely to work against EFA. That is obvious, but not a reason to give up. Eventually, all people in the country are set to gain from EFA.
writer is a Norwegian social scientist and education specialist currently
based in Islamabad.
By Kaleem Omar
We're not the only country that dabbles in conspiracy theories. Nearly everybody does, including the Scots, of all people. I say "of all people" because Scots have a reputation for being dourly pragmatic or pragmatically dour, take your pick. These are characteristics that are not usually considered fertile ground for whimsical flights of fancy or conspiracy theories. But every rule has its exceptions. In an article published in the Glasgow Sunday Herald, Scottish author Neil Mackay reveals a plan by the Bush administration to (wait for it!) take over the world.
Mackay doesn't actually assert, in so many words, that Bush plans to take over the world, but the plan he cites certainly gives that impression. The 90-page plan was drawn up and published by a Washington-based right-wing think-tank, known as 'The Project for the New American Century'. It was published in September 2000, before George W Bush was elected president.
That would seem to rule out Bush's involvement in the plan's formulation. But wait! According to another report, this one in The Moscow Times, an outline of the plan was drawn up much earlier, in 1992, when Dubya's father, George H W Bush, was president and was anticipating re-election.
The team that drew up the first version of the plan was headed by Dick Cheney, then Bush Senior's secretary of defence and flushed with success over the Gulf War. Others involved included Donald 'Weapons of Mass Destruction' Rumsfeld (later secretary of defence in Bush Junior's administration), arch hawk Paul Wolfowitz (Rumsfeld's deputy secretary and later president of the World Bank), Zalmay Khalilzad (an ex-Unocal consultant, later US ambassador to Afghanistan, then US ambassador to occupied-Iraq and currently US ambassador to the United Nations), John Ellis 'Jeb' Bush (Dubya's younger brother and governor of Florida in the days of the 2000 US presidential campaign; of "hanging chads" and "dimpled chads" fame) and Lewis 'Scooter' Libby (Vice-President Cheney's now disgraced former chief of staff).
In the strange, interconnected world of Washington, Lewis was also an attorney for fugitive Jewish financier Marc Rich, whose pardon by President Bill Clinton on his last morning in office drew the ire of Republicans in what came to be known as the 'pardons-for-cash' scandal.
One of the world's wealthiest men, the Belgian-born Rich fled to Switzerland in 1983, one jump ahead of the FBI, after he was indicted by a federal grand jury in New York on 50 counts of wire fraud, racketeering, ignoring a US embargo to trade with Iran during the hostage crisis of 1979-80 and evading more than $48 million in US taxes. Rich has also been linked with absconding Pakistani businessman Riaz Laljee in shady multimillion-dollar rice deals concluded by Rich's trading company with the Rice Export Corporation of Pakistan in 1996.
What some are calling the plan to take over the world was titled Rebuilding America's Defences -- Strategy, Forces and Resources For a New Century. The Washington think-tank that wrote the plan was then headed by William Kristol, often seen on American television as a conservative commentator. According to an editorial in the American newspaper The Charleston Gazette, Kristol was paid $100,000 a year by Enron, the scandal-ridden US energy firm that filed for bankruptcy in December 2001. Enron was headed by longtime Bush crony Kenneth Lay, one of the biggest contributors to Bush's gubernatorial and presidential campaigns. Lay was later sentenced to 20 years in prison by a Houston court for criminal fraud, but died of a heart attack before he could serve any jail time.
The think-tank grew out of the 'New Citizenship Project', which was funded by the conservative Bradley Foundation, a part of Rockwell Automation, a former US defence contractor. These convoluted relationships remind me of the laughter and derision that greeted Hillary Clinton in the United States, during the Clinton impeachment episode, when she referred to "a vast right-wing conspiracy." Bill Clinton gets mentioned often, and always derisively, in the 'take over the world' plan. He is repeatedly accused of "degrading" America's defences.
George W Bush, when he was running for president, made the same accusations. After he was elected, he submitted the same military budget to Congress that Clinton had previously submitted. It wasn't until after the events of September 11, 2001, that Bush asked Congress for more military spending. The US military budget for fiscal 2009 (which commenced on October 1, 2008), at over $500 billion, is now bigger than that of the rest of the world combined.
Bush never tires of telling the American people that the US military forces now fighting in Afghanistan and Iraq are part of the world's 'best-ever' fighting machine, but that very same machine was stated by George W Bush to have been in dangerous disrepair when he was running for office and by the authors of the 'take over the world' plan.
In essence, the 'take over the world' plan says that the United States should be equipped to fight and win multiple simultaneous wars in widely separated parts of the world. It suggests that the US should move into the Gulf region and control the flow of oil, particularly in Iraq.
The Moscow Times article on the plan compared it to Hitler's Mein Kampf. It would seem from this that Germany's then-lady justice minister was not alone in lumping Bush with Hitler by saying that the American president had sought to distract voters from problems at home by talk of war -- tactics, she was said to have added, that were once used by 'Adolf Nazi'. The minister denied making the remarks, but said she would resign anyway.
The comparison with Hitler is overdrawn, of course, but it has to be said that the plan drawn up by the Cheney people reads in some respects remarkably like Mein Kampf. It has the same kind of arrogance, the same sense that the US is right and everyone else is wrong, and the same unquestioned belief that only America is capable of leading all the lesser nations out of the wilderness.
From a movement to another
The political parties will have to tolerate the free media.
By Farah Zia and Usman Ghafoor
Azizuddin Ahmad, Professor Sahib for friends, likes to talk at length about 'ideas', but you ask him to give a few biographical details and he withdraws. "I was born, taught for a while and now write," is how he sums up his life. Who influenced him, one tries to probe. "No one. I just sprang out of books like Don Quixote."
The truth is that Azizuddin Ahmad is one of the most respectable names in Pakistan's Left movement. He was instrumental in shaping the 'liberal' trade union of teachers -- in the form of teachers and lecturers' associations -- that challenged the pro-dictatorship forces on the campuses in the 1960s.
He played a vanguard role in uniting the parties of the Left in the 1980s, at the time when the Movement for the Restoration of Democracy (MRD) against Ziaul Haq was in full swing. This was a time when the National Awami Party (NAP) became the Awami National Party (ANP) and the Sindh Awami Tehrik became the Awami Tehrik. Professor Sahib made sure that the provincial autonomy chapter of the MRD's constitution was duly signed by the Pakistan People's Party (PPP), but more so by Maulana Fazlur Rehman of the Jamiat Ulema-e-Islam (JUI).
At Islamia College Civil Lines, Azizuddin was among the four teachers -- along with Prof Manzur, Prof Eric Cyprian and Prof Amin Mughal -- who began the Left movement among teachers. At Islamia College again, as incharge teacher of the students' union, he invited Zulfikar Ali Bhutto to speak during the anti-Ayub movement. Bhutto raised anti-dictator slogans and Prof Sahib was, not surprisingly, shown the door. The then vice-chancellor brought him to University of the Punjab in 1966. It was not long before he -- along with Khalid Mahmood, Mushahid Hussain, Omar Asghar and many others -- left the place after Ziaul Haq came to power.
The News on Sunday interviewed him recently. Excerpts follow:
The News on Sunday: How do you view the current political situation?
Prof Azizuddin Ahmad: It is wonderful. We were actually quite surprised that the elections took place. Two liberal political parties (the PML-N now is a liberal party going by Mian Nawaz Sharif's speeches) have won these elections. The PML-Q has failed miserably, though the party was hoping that it would get a thumping majority at least in Punjab. Since Punjab is the determining factor in the federation, the PML-Q thought that it would get power in the Centre. All this was proved wrong.
TNS: Doesn't Balochistan show a rather different trend?
AA: Balochistan is not meant for any single party. There is only one division in Balochistan where the people win elections on the basis of their manifestoes. It is the Makran division, which is middle-class and non-tribal. The situation in the Turbat division is also more or less the same. The rest of Balochistan comprises fiefdoms. Every big and small tribal sardar has his own fiefdom. In short, the political parties do not matter in most parts of the province. Everybody makes a beeline for the ruling party. If the PPP manages to form the government in the Centre, which seems most likely at the moment, I am sure most of the independents will join the party. In fact, there are rumours that they are already making a forward bloc.
TNS: What are the challenges that lie ahead for the country?
AA: I see four or five major challenges. Those who have lost the elections have high stakes in retaining power. People like Musharraf, the Chaudhrys and all their collaborators had thought that everything would be hunky-dory again after the elections. I do not know how the army will react to the election results, because Musharraf is not the name of a man; he represents the army's interests. Now there is an indication that the army is distancing itself from Musharraf. The few steps in this regard by the army chief are all cosmetic. The only concrete step has been the replacement of the chief of the Military Intelligence (MI). I feel that the chief of the Inter-Services Intelligence (ISI) should also be replaced. One cannot be sure if the army is actually willing to go back to the barracks.
Musharraf is there and the United States is backing him. Though the US knows that it cannot ignore the election results, it continues to openly support Musharraf. One US official after another, including Secretary of the State Condoleezza Rice, has said Musharraf is still the president as far as America is concerned. It also remains to be seen if the political parties can maintain their recently-forged unity. If they cannot, those waiting in the wings will pounce upon them. There are also other issues like removal of 58 2(b) and of restoration of the judiciary. Finally, there is the issue of Musharraf. Almost everyone seems to agree that he should quit at the earliest. Let us see if they can pull it off!
TNS: How do you view the military's involvement in politics?
AA: If all started with the political forces becoming weak.
TNS: But isn't that the military's line?
AA: Look at the partition of 1947. When Pakistan was created, somebody who had written a book on Nehru asked what would have happened had Nehru passed away in 1947. He himself gave the reply that there were six people who could have take over after him. That was the strength of the Indian National Congress as a political party. Also, the party had roots in the masses and it enjoyed support of the middle-class. The Pakistan Muslim League (PML), on the other hand, was a weak political party. When Pakistan's first cabinet was formed, Jinnah did not have enough politicians to choose from. Ghulam Mohammad, a civil servant, became the finance minister. The foreign minister, Sir Zafarullah Khan, was brought from the judicial service.
The middle-class was weak, while the civil bureaucracy was strong, highly educated and rightly called the steel frame of the British empire. Hence, the latter prevailed. The PML leaders also had a very authoritarian attitude. As soon as he came to power, Jinnah dismissed the NWFP Assembly. Later, other assemblies were also dissolved. In 1955 the military bureaucracy came to the forefront, with Ayub Khan becoming the defence minister-cum-commander in chief of the country. In short, the political forces were weak; while the civil and military bureaucracy was strong and educated. This went on till 1958. The people had matured politically by that time, but then came Ayub Khan. He insisted on making a new nursery of politicians, rejecting the veterans.
TNS: So the military developed a vested interest in the political system?
AA: Today, this vested interest has become so strong that the military has become what Dr Ayesha-Siddiqa Agha rightly calls the "milbus". This "milbus" has some very strong material interests and is well-entrenched in the country's economy. Any class that is well entrenched in the economy enjoys major political clout. First, it was the feudals, then the industrialists and now it is the military. But things change and develop. The kind of civil society that we had in 1947 has evolved since then. Today, one finds a historic resurgence of civil society that no one was expecting.
I have had the chance to observe movements against three military dictators -- Ayub, Zia and Musharraf -- in my life. The three are totally different from each other. In the movement against Ayub, it was mainly the working class that was active. This class had become completely fed up because of the loot and plunder, the absence of labour laws, the 22 families and no rights for the working class. In East Pakistan, on the other hand, almost the people were involved in the movement against Ayub.
The anti-Zia movement was mainly concentrated in Sindh and was not as big in Punjab. Only workers, and not the common people, was involved in it. We saw an unprecedented number of workers from Punjab put behind the bars. The slogans were mainly against Zia, but not one against the army. There was no slogan against the army in the Ayub era either. The army was a sacred cow for Punjab. Censorship was very strict, too. Writing anything against the army or the ISI was a taboo under Zia.
If we look at the anti-Musharraf movement, it seems we have travelled light years ahead. After the chief justice was deposed, I went to Chiniot to watch the rally that was led by Aitzaz Ahsan. Chiniot is a very backwards city. Outside a court, in the wee hours of the day, I saw a gathering of hundreds of people, both young and old. The anti-army slogans raised on the occasion were a unique experience for me.
TNS: You don't see more than a couple of hundred civil society members out on the streets now.. Considering this, don't you think that minus the lawyers' movement, perhaps the anti-Ayub movement was bigger than the anti-Musharraf movement?
AA: It was, definitely. There was a reason for that also. There were at least three or four student movements against Ayub. Two years after he took over, in 1969, Ayub introduced the three-year degree course, which was unacceptable to the students. I was teaching at that time and had about 60-70 students in my BA class. After this order, only three students were left in my class. The second movement was against the university ordinance in 1963-64, according to which any student or teacher could be kicked out if his or her conduct was objectionable in the eyes of the government. The prominent people in this movement were Meraj Mohammad Khan and Hussain Naqi. Then came Fatima Jinnah and a huge movement was built around her, comprising students mainly. And last of all was the anti-Tashkent movement. Students were at the forefront in all these movements, while they are absent this time.
TNS: Why do you think has that happened?
AA: The potential for a student movement was crushed by Ziaul Haq. He was afraid of students because he had seen the fate of Ayub. The anti-Bhutto movement was also led by the students in Punjab. So Ziaul Haq followed the policy of divide and rule, and militarised the campuses.
TNS: It was he who banned the unions?
AA: The unions would have been banned anyway, because arms were handed over to every willing student. First it was Jamiat and then, after Zia fell out with it, the Muslim Students Federation. These two groups threw out the Left and liberal elements from University of the Punjab at gunpoint. There were bloody clashes in the University of Engineering and Technology for years on end. The liberal elements among the students as well as the faculty were kicked out of campuses. In fact, there was a huge purge of teachers from all over the country during the Zia era.
TNS: Do you think that fear still persists, as we haven't seen many students from public colleges and universities in civil society's movement against Musharraf?
AA: This time the onus of launching the movement fell on those whom we called the 'Mummy Daddy' crowd, and they deserve all the credit for it. As for the common people in Punjab, they suffered a lot during the Zia era. Many people were lashed. The people had high expectations from democracy and rightly so. But after 1988, the democracy that returned to the country was marred by sheer loot and corruption. This demoralised the people slightly, though I would not say that they lost complete faith in democracy. So, this time the common people did not answer the call of political parties and did not come on the streets. This new class, which we call 'civil society' pending our analysis of who they are, includes lawyers who earn about 10 million a month as well as those who come on bicycles. But apart from lawyers, there were others too and their ranks swelled gradually.
When the Chief Justice came to Lahore, we stayed on the Lahore High Court's premises all night. We saw a strange sight. A group that called itself called Aam Shehri was there. There were religious elements protesting against the Lal Masjid crackdown. There were camps set up by the Jamaat-i-Islami, the PPP and the PML-N. Then there was a camp set up by the NGOs.
But it is true that the people have started thinking before coming out; this is not as it used to be. Even in anti-Ayub movement, many poor people died on the roads. I think if the political parties do not disappoint people any more, get together under set rules of the game and are seen to be doing something, more and more people will join the democratic process and try to help them reduce the army's influence.
TNS: Where does the Left stand in today's Pakistan?
AA: It is very weak. The Left today represents exactly the demands of democracy. It says that women should get equal rights, there ought to be democracy and the military should withdraw from politics. It may not have a separate identity as such, but in all this movement it has been at the forefront. Look at all the NGOs; these are all people who have been associated with the parties of the Left in some capacity.
TNS: But what about their stand on the political economy of the country?
AA: You see, earlier on, everything was written in the script like in the Holy Quran. The script said that the feudal society will be followed by capitalism and then imperialism, which is the highest state of capitalism. Then it is going to wither and socialism will come and everybody will live happily ever after. But all this was challenged with the failure of the Soviet and the Chinese systems. Then it dawned upon the Left that a new direction was needed.
TNS: What is your personal opinion?
AA: My view is that oppression, whether it is economic or social, must end. Similarly, exploitation of any sort, whether gender-based or class-based, must end. These are the basic principles, but those who set out to implement them made mistakes.
TNS: How do you look at the welfare state models in some North European countries. Didn't they borrow a lot from from the Left?
AA: I think that the capitalism of the nineteenth century -- capitalist economy and capitalist form of government, about which Marx had said that this was the "dictatorship of the capitalist class" -- did not continue in that form. It has changed, modified and reconditioned. The liberty of trade that John Stuart Mill has talked about in his book On Liberty -- according to which there should be no restriction on sale, even of poison -- is not the capitalism that is practiced today. Mill opposed the ban on opium trade in China by saying that the Chinese emperor is restricting the liberty of the people to purchase opium. He also said that there should be no interference of the government, say in labour laws. If you read Charles Dickens, you find men working for 18 hours and women for 14 hours. Child labour was accepted and rampant. This too has changed.
In politics the right of vote was very restricted; only the propertied class had the right to vote on the pretext that he who did not have property had no stake in society. Similarly, women were given the right of vote after the first world war in Britain but with certain restrictions. So both capitalist democracy and capitalist economy changed and adapted themselves, but mainly as a result of the working class movement. It was a consequence of this political struggle of trade unions and Suffragettes that the right to vote was granted and working hours determined. So the basic role was played by the working class and Left movements, like the Chartist movement in Britain.
The welfare state came into existence because of the working class movement. When the pressure lessened, the privileges of the working class were reduced. Britain became a welfare state 40 years ago, but since the last 20 years it has started reversing the welfare state privileges because the working class movement has weakened. Similarly, socialism has to be conditioned.
TNS: As a professional journalist, how do you look at the role of the media so far and in future?
AA: I think the media's role has been very positive. There are two thing: first, there are enlightened people in the media; second, it also has an economic side. There is a market where you get advertisements and there is competition. The channel or newspaper that does not miss a news makes its credibility and gets more advertisements. So to maintain your popularity (or readership or viewership), it is important that you cater to the people's moods.
TNS: But does it not become negative sometimes?
AA: Yes it does, as you cater to the prejudices also. These two strains will remain. I think it will be difficult to bring the media back from the high point that it has attained. The political parties will have to tolerate the free media.
Progress cannot be measured only by improvements in elite enclaves of big cities
By Syed Nadir El-Edroos
The perception of development and growth has seemingly forced people today to question the nature of economic growth over the past few years. On the one hand, statistics provided the evidence of an economic take-off; while, on the other hand, the government of the time also pointed to a physical change that was taking place. An average person, however, could see growth manifest itself -- in bigger billboards, latest cars, dandy mobile phones, etc.
In the last few years, vast disparities have emerged in our society and new policies are only likely to exacerbate them. However, we must also consider that during the last eight years, the government focussed mainly on projecting a soft image of the country. The media was given freedom, grand schemes were launched and urban-biased projects were implemented. However, such schemes potentially foster inequality and discontent. The beautification of boulevards and fountains, for example, in posh areas of urban centres really does question the logic of those whose responsibility it is to allocate scarce resources.
Projects in Islamabad, especially in the Cantonment area, seem to favour abstract art -- hybrid pieces with a tinge of oriental expression. At night, they are illuminated by spotlights to beautify the city. Whether or not a vast majority of the people actually finds such pieces appealing or beautiful is open to debate. However, what must be questioned is the often inappropriate implementation. The style and location of such schemes does nothing more than project the thinking of the decision-makers. The context in which they are being developed is mostly alien -- in most cases, irrelevant or not in line with the indigenous culture. Regardless of their relevance, the concentration of such schemes in certain posh areas to benefit the few is just another manifestation of the inherent inequality in our society.
What is worrying is how willing the people are to accept such changes in the name of development. The development of a mini golf course on a green belt in Islamabad a few years ago, which was halted due to Chief Justice Iftikhar Muhammad Chaudhry's intervention, and the current development of F9 Park and another club in that area are being labelled as 'development' projects. How commercial projects aimed at an upper middle-class consumer can be equated with development? Considering this, the society's willingness to accept such projects is deplorable. Hence, it comes as no surprise that there has been a significant increase in economic and social inequality.
Sadly, the readers of this article as well as its author are also a part of the problem. We like to see wide boulevards and lit up roundabouts, as they somehow make us feel that the country is developing. Comparisons are quickly made with foreign destinations and statements made by government officials lend credence to them. The problem here is that the perception of growth has replaced actual growth. Also, the projection of wealth is creating a cleavage that furthers inequality in our society. It would be highly naive to think that in the long run a handful of upper middle-class urbanites can continue enjoying favourable state resource allocation to improve their quality of life, while the vast majority continues to suffer. Progress cannot be measured by improvements in elite enclaves of big cities.
After its victory in the recent elections, the Pakistan People's Party (PPP) must not only rectify inequality in terms of income and wealth, but also in perceptions and access to social services. Upward social mobility without acceptance is unlikely to encourage the enterprising behaviour that the government hopes would fuel economic progress in the long run. It is true that consumerism is at its peak right now -- with increase in wealth, individuals are going to spend it accordingly -- but the government's provision of resources to facilitate such expenditure is uncalled for and highly undemocratic.
While individuals and the private sector are free to do what they want to, the state and its organs ñ rather than allocating resources for their own benefit and of those with whom they associate with -- must allocate resources to areas where they are actually required. While beautifying cities and bringing them on a par with other international cities is a good step, such measures must also be adopted in terms of delivery of social services. The message that the people of the country have delivered in the recent elections is clear: they need democracy, employment opportunities, access to justice, and reduction in inequality in all its forms and manifestations.
We should be looking first and foremost to the parliament to deal with our most pressing problems
By Aasim Sajjad Akhtar
The entire nation waits with baited breath for the victors of the February 18 elections to form a new government. Of course, there is the big question of what will happen to Pervez Musharraf (on cue, the PML-Q, or what is left of it, has launched a 'save the president' campaign) and whether the self-proclaimed president will throw a spanner in the works.
Meanwhile, the fate of Chief Justice Iftikhar Muhammad Chaudhry and his fellow deposed judges is as big a question as any other. The guarded optimism that many feel about the return to civilian rule seems to be contingent on the restoration of the 60 judges sacked by Musharraf. This is understandable: the dramatic demise of Musharraf's political allies (and ostensibly Musharraf himself) has been a direct function of the agitation that started after the CJP was removed on March 9, 2007.
The PML-N won as many seats as it did in part because of its hard-line stand on the restoration of the judiciary. The politicisation of a large number of ordinary people over the last year is owed to the lawyers, students and political activists that came onto the streets day after day to face the wrath of the state's security apparatus (even if most people watched the pitch battles on their TV screens rather than partaking themselves).
So it is not surprising that those who have brought the Musharraf regime to its knees -- the dissenting judges and those who have fought in the streets for them -- want the movement for democratisation to reach its logical conclusion. The restoration of the judiciary would not just sound the death-knell for Musharraf but would also be an enormously symbolic defeat for the military establishment and, as many observers have suggested, possibly confine the 'doctrine of necessity' to the dustbin of history
However, there are a couple of important points to bear in mind. First, the incoming coalition needs to be given every chance to come good on its stated commitment to restore the judiciary. Musharraf and other hangers-on are looking for every reason to thwart the fledgling democratic process and there is no point in giving them an excuse to do so. Second, and more importantly in the long-run, it is important not to start believing that the restoration of the judiciary is a panacea to all of Pakistan's problems. Thought of in terms of political philosophy, this is because the judicial branch does not represent the people as such; rather it ensures that the people's will -- enshrined through legislation made by their elected representatives -- reigns supreme. In other words, we should be looking first and foremost to the parliament to deal with our most pressing problems.
In practical terms, Pakistan today is beset by many difficulties that are not just related to the question of judicial independence. Indeed, if the PML-N won as many seats as it did on the one hand because of its stand on the judiciary, then on the other hand it benefitted -- as did the other opposition parties -- from the severe resentment felt by the general public against the incumbents for the dire economic crisis that is now reaching alarming proportions.
There should be no expectation that our economic problems are about to go away. In fact they are about to get immeasurably worse. In many ways, the Shaukat Aziz-led team of economic managers made sure that it would leave the new government in an almighty fix. The state's coffers are being depleted quite rapidly and the only way that the new government can solve this problem is by reducing subsidies on basic commodities, such as fuel, gas and electricity.
That, of course, is under the assumption that the new government does not want to pick any fights with the economic powerhouses of the country. Many of our economic problems derive from the fact that control and ownership of resources is dreadfully skewed. Large landowners, the military and private (industrial and finance) capital, both domestic and foreign, control the vast majority of productive assets, yet give virtually nothing back for the public good.
Meanwhile our beneficent creditors in Washington, the World Bank and the International Monetary Fund can be expected to continue insisting that we make a policy that allows foreign capital's easy entry into and exit from Pakistan, without the burden of paying any taxes. They will say that we should build more 'mega-development' projects, which we can only do by taking more loans and thereby pushing our external debt burden beyond the $42 billion that it is right now (after much pontificating about debt relief, Shaukat Aziz left us with at least $7 billion more debt than when he became finance minister).
It is unlikely that the incoming coalition government will suddenly articulate a radical economic programme that incurs the wrath not only of those who are rich and powerful within Pakistan but the global financial elite as well. And many would argue that it should not take the bull directly by its horns, because this would be a sure invitation to destabilisation and, as Nawaz Sharif and Asif Zardari have wisely suggested in the aftermath of the elections, what Pakistani democracy needs most of all right now is an uninterrupted five-year term for the new government.
But then this leaves us between a rock and a hard place. If the anti-people economic paradigm is not at least partially corrected, the PPP-led government will become deeply unpopular in quick time. Not that the economic crunch is the only problem that the incoming regime faces; there is the small matter of America's 'war on terror', but this is a separate quandary entirely. In any case, if nothing else, it is crucial that the coalition accepts the seriousness of the economic situation and recognises that it is most likely to be able to dent away at the power of economic bigwigs if it has the requisite public support to do so. There is also a need to articulate much more sovereignty vis-a-vis external powers -- both western governments and the international financial institutions -- than any government in the past 30 years has done.
The best bet lies for the new coalition in taking some baby steps in the right direction -- indeed it must because this is simply a matter of survival. In other words, if it is going to fall out with some constituency or the other, then it is better to keep people on its side rather than trying to keep the bigwigs happy. If nothing else, February 18 proved that people do have power and ultimately the new government must recognise that people are the wellspring of power. If it does not, then when the establishment and its external patrons conspire to undermine the elected regime, there will be no one to resist.
Reasons for failure
Many factors were responsible for the MMA's crushing defeat in the recent elections
The Muttahida Majlis-e-Amal (MMA), the alliance of six religious parties, suffered a crushing defeat in the February 18 elections in the North West Frontier Province (NWFP), where it had stunned all and sundry by securing a sweeping victory in the 2002 elections. The MMA's rout was more visible and even excruciating, like its victory in 2002, in the mountainous Malakand region -- comprising the seven districts of Chitral, Upper Dir, Lower Dir, Swat, Shangla, Malakand and Buner-- as it could not win a single seat, either of the National Assembly or the NWFP Assembly, from there in the recent elections. After its unimpressive performance while in power, the MMA's popularity graph had dropped, but no one had even thought of its complete elimination from the erstwhile Malakand division, where people have strong inclination towards religion.
Formed by political maulanas to introduce Islamic system in the country or at least in the NWFP, the MMA had secured a landslide victory in the Malakand division in the 2002 elections, as other political parties had managed to win only one out of the eight National Assembly seats from this region. The MMA had won the National Assembly seats from the districts of Upper Dir, Lower Dir, Malakand, Chitral, Shangla and Swat (two), while Sher Akbar Khan of the Pakistan People's Party-Sherpao had won from the Buner district. The MMA candidates, to the surprise of most people, had emerged victorious on 20 of the 23 NWFP Assembly seats from the region in the 2002 elections. The party had swept the elections in the districts of Chitral, Upper Dir, Lower Dir and Swat; while it narrowly missed a clean-sweep in the districts of Buner, Malakand and Shangla. In all, the MMA had won 53 of the 99 NWFP Assembly seats and 29 of the 35 National Assembly seats in the NWFP in the 2002 elections.
In the recent elections, however, the PPP won four National Assembly seats and the ANP and the PML-Q two each from the Malakand division. Similarly, the ANP won 10 NWFP Assembly seats and the PPP seven from the region. Besides a National Assembly seat, the ANP swept all NWFP Assembly seats in the troubled Swat Valley, as the party's slogan of non-violence appealed to the militancy-weary people. They have pinned great hopes on the ANP for putting an end to violence. "We will honour the people's mandate and will leave no stone unturned to restore peace to the valley," Afrasiab Khattak, the ANP's NWFP president, told The News on Sunday. He informs that his party plans to introduce a package that will address issues of unemployment, delay in dispensation of justice and deprivation of the people. He also hints at halting the use of force in Swat.
The main reason behind the clerics' crushing defeat in the recent elections was their failure to take some practical steps for the promulgation of Islamic system in the NWFP, the promise that ensured their sweeping victory in the 2002 elections. "The maulanas had united for the enforcement of shariah, but they did not honour their pledge. They had promised justice to the people, but committed injustices themselves," Zubair Roghani, a resident of Upper Dir, remarks. Khurshid, who belongs to Mingora, the headquarters of the insurgency-hit Swat Valley, says the MMA government ignored the purpose for which it was voted to power. A tailor by profession, he adds that a vast majority of the people are angry with the MMA for not keeping its promise regarding the enforcement of shariah.
The MMA was formed before the 2002 elections to stop the interference of the United States in Pakistan and Afghanistan, thus it was able to cash the anti-US sentiments of the people. The party, however, lost the people's confidence when it indemnified through 17th amendment all the illegal and unconstitutional measures taken by Pervez Musharraf. The people were also taken back to see the love of maulanas for power -- though they raised hue and cry over the American attack on Afghanistan, they had shut their eyes to the killings in North and South Waziristan, Bajuar Agency, and Balochistan. Their style of government, analysts say, was no different from that of other political parties, whether liberal or nationalist, which disappointed the people who wanted a positive change. Also, the MMA was accused of fuelling extremism and militancy in the Malakand division in particular and in other parts of the NWFP in general, which ultimately destroyed the peace in these areas.
The alleged corruption by the MMA's ministers and MPAs was another major reason behind its defeat in the recent elections. "The clerics had got votes from the people in the name of Islam, but they remained busy in making money," 60-year-old Ibrahim says. He questions as to how the poor clerics, who did not have even a bicycle earlier, accumulated so much wealth in a short span of only five years. "The clerics promoted the politics of prejudice and were no different from their predecessors as far as nepotism is concerned," a resident of Timergara, the district headquarters of Lower Dir, says on condition of anonymity.
The remaining damage to the MMA was done by the Jamaat-e-Islami's election boycott call, as the latter has a strong support base in the region.
Will it be possible for the new government to check inflation is a million dollar question
By Sadia Nasir
An unprecedented increase in the rate of inflation over the last few years, particularly in the year 2007, has severely affected the masses, even though the government has been claiming an unprecedented economic growth in the same period. Noticeable price hike has been witnessed in both food and non-food items. With the recent elections, expectations of an overnight reduction in prices of necessary commodities have risen, which would indeed be a challenge for the new government. However, the key issues to be addressed are: which areas were worse affected by the price hike? What has led to such a sharp increase in the inflation rate within few years? What initiatives have been taken to counter inflation? Which segment among the masses was most affected by inflation? What challenges the increasing inflation poses for the economy and, in turn, for the new government? And lastly, how can inflation be controlled?
Inflation in the last two years has been driven by prices of food items, which increased by 10.2 per cent. Other areas severely affected by inflation were medical care and energy, which registered inflation of 9.1 per cent and 7.3 per cent respectively in the financial year 2006-07. The inflation rate particularly rose during the last few months of 2007 and in January 2008. For instance, the food inflation showed an increase of 3.04 per cent in the first month of this year, while the consumer price inflation increased by 11 per cent in the same month. Because of hike in prices of food and non-food items, the common people have to struggle harder to meet their even basic needs.
The higher inflationary trend has been the result of several domestic as well as international factors. Despite the fact that there has been a period of economic progress resulting in improvement in income level, this progress has also led to increase in domestic demand, thus creating difference in demand and supply of essential commodities. Also, the government's high expenditures and increasing trade deficit have contributed to the rising inflation. Other factors such as government borrowing, low tax revenue, the private sector credit's and lack of coordination among government agencies, which are responsible to ensure the smooth functioning of economic activities in the country, also exacerbated the recent inflation.
The food crisis, particularly that of wheat / flour and other eatable items, has also contributed to food inflation in Pakistan. This food crisis was spurred by the poor performance of the agricultural sector, and aided by the unchecked hoarding and uncontrolled smuggling of eatables to Afghanistan. At the international level, there has been sharp increase in the prices of oil as well as other essential commodities, which have also added to the rising inflation in Pakistan.
Timely policies to control this upward trend of inflation were not taken and tightening of monetary policy by the State Bank of Pakistan was considered adequate to tackle this problem. Many analysts are of the view that tight monetary policy will only hamper the economic growth instead of controlling inflation. The government has also claimed to have taken action by providing consumer goods at subsidised rates at utility stores. Nonetheless, the quality of goods available at utility stores has been questioned. Also, all common people do not have access to utility stores.
Inflation affects different sectors of economy, as well as distribution of income and wealth. It disproportionately affects the lower-income and fixed-income groups, and inflicts high cost on economies and societies, while undermining the economic stability and growth. Pakistan with a huge population of lower- and middle-income groups has been widely affected by the increasing inflation, as the purchasing power of most people has been reduced with increasing prices. With the increasing inflation and slower economic growth, the prices of all goods and services increase sharply, while the income level raises slowly, thus creating a gap between income and spending capacity of the people.
Higher inflation also negatively affects the exports of a country, because if the inflation rate in one country is higher than other trading partners then the country's exports are likely to be expensive abroad and, thus, will be less competitive. Pakistan with increasing inflation and relatively slower economic growth is faced with huge challenge of maintaining economic stability. Inflation has become an obstacle for the economic development and is also affecting a large portion of our population.
Some economists agree that inflation can contribute positively to an economy, and boosts investment and other economic activities. However, for sustainable economic growth, inflation rate up to five per cent is considered to have a positive impact. Higher inflation rate may start hampering economic growth. In a country like Pakistan, where 34 per cent of the population lives the below poverty line, any further increase in inflation is bound to have an adverse effect.
There is a need for strategic planning to control inflation. Domestic production has to improve and reliance on imports has to be subsequently reduced to enable domestic industries to flourish. Investments in consumer utility items have to be encouraged. The agricultural sector should be provided greater support and facilities, so that the growing prices of eatables can be controlled. Artificial price hike and shortages have to be checked strictly. The government's monitoring of all the sectors should be made more systematic and consumer friendly policies should be encouraged. The government can adopt various measures -- such as monetary, fiscal, non-monetary and non-fiscal -- according to an expert analysis of the situation.
There is also a need for creating greater public awareness on these economic issues. With the recent elections, the expectations of the voters have increased. There are expectations of an overnight economic revival, and a fast solution to energy and food crises. There will be a heavy responsibility on the newly elected representatives, not only to educate the general public on these issues but also to take substantial actions to solve these pressing problems urgently. The masses should also realise that every new government needs time to adjust and bring about a change. Though policy implementation is a long process and there is no shortcut to any of the economic problems, the new government has to show it seriousness to the issue of inflation by taking concrete steps on an emergency basis.
A crisis in the making
The foremost challenge for the new government will be to ensure growth with stability
By Hussain H Zaidi
Hectic efforts are under way to cobble together a coalition in the wake of the split mandate produced by the recent elections. The new government, no matter whoever heads it, will have a number of economic challenges to grapple with. Arguably, the most important economic challenge for the new government will be to ensure growth with stability. For a developing country like Pakistan, economic growth is a major macro-economic objective. But this growth has to be stable; otherwise, it will be difficult to sustain.
Stable economic growth entails, in addition to expansion of the gross domestic product (GDP), an adequate increase in the level of savings and investment, price stability, a high level of employment, and stability in the balance of payments and financial account positions. Pakistan's economy has grown on an average at a healthy rate of seven per cent per annum in the last four years, but this growth does not rest on strong fundamentals, as reflected by the low level of savings and investment, increasing inflation, deteriorating balance of payments position, and large-scale unemployment.
In order to sustain the growth momentum, the government will have to increase the level of savings and investment. Investment has a two-fold role in the economy. In the short-run, investment increases aggregate demand; and thus output, employment and income. In the long-run, investment helps GDP growth by adding to the capital stock in the economy. A fundamental flaw of the growth strategy pursued by the previous government was its failure to effectively solve the problem of savings and investment. This is corroborated by the fact that increase in the GDP was not accompanied by a proportionate increase in savings and investment.
Let us first have a look at the savings-GDP ratio in the last few years: it was 17.8 per cent in the financial year 2000-01, 18.1 per cent in 2001-02, 17.6 per cent in 2002-03, 15.7 per cent in 2003-04, 14.5 per cent in 2004-05 and 14.4 per cent in 2005-06. In 2006-07, the savings-GDP ratio again increased to 18 per cent. Now let us have a look at the investment-GDP ratio in the last few years, which presents a slightly better but still unsatisfactory picture: it was 16.6 per cent in the financial year 2003-04, 18.1 per cent in 2004-05, 20 per cent in 2005-06 and 23 per cent in 2006-07. Though the investment-GDP ratio went up by 6.4 percentage points in only four years, the increase was meager compared with the fast GDP expansion during this period. It may also be mentioned that savings-GDP and investment-GDP ratios for 2006-07 include $5.49 billion workers' remittances from abroad and $5.12 billion foreign direct investment (FDI), respectively.
In Pakistan's case, the major reason for low levels of savings, and the resultant low levels of investment, is the low per capita income. Though the per capita income in Pakistan has, according to official statistics, now increased to $925 from $657 in 2003-04, the increase is nominal rather than real -- thanks to a high inflation rate, which was 9.4 per cent in 2004-05, 8 per cent in 2005-06 and 8.5 per cent in 2006-07, and is currently hovering around 9 per cent. It is with a view to containing the inflation rate that the State Bank of Pakistan (SBP) has adopted a restrictive monetary policy.
In order to raise the level of savings and investment, the new government will have to increase the real incomes of the people, which entails controlling inflation and increasing employment. This, however, will put the authorities in an awkward situation. Disinflation entails slowing the pace of the economy by either a restrictive monetary or fiscal policy or both. However, a restrictive monetary or fiscal policy will reduce the level of output in the economy, thus reducing employment and incomes. This trade-off between inflation and employment will make disinflation a real challenge for the new government. What makes combatting increasing inflationary pressures even more difficult is the fact that much of the inflation is supply-side based -- caused by high input prices, such as of oil, or artificial shortage of essential commodities like wheat. A restrictive fiscal or monetary policy cannot be of much use in containing supply-side inflation. In fact, it can lead to increased supply-side inflation. For instance, a tight monetary policy will push up interest rates and increase the cost of doing business.
No we move on to fiscal and current account deficits, also known as twin deficits. A fiscal policy is the principal tool available to the government for macro-economic management. For a developing economy, an expansionary fiscal policy is needed to accelerate the pace of capital formation and stimulate the aggregate demand; and thus raise the level of output, employment and incomes. An expansionary fiscal policy, if not accompanied by an increase in public revenue, leads to fiscal deficit, which has be financed from either external or domestic sources. The domestic sources may take the shape of public borrowing or borrowing from the central bank (the SBP in Pakistan's case).
Public borrowing includes borrowing from the capital market, such as scheduled banks; sale of government bonds, for long-term borrowing; sale of treasury bills, for short-term borrowing; and non-market borrowing, through national savings schemes or sale of prize bonds. Borrowing from the central bank takes the form of printing money. All these forms of public borrowing have some undesirable consequences. They add to public debt, thus limiting the fiscal space available to the government. Besides, market borrowing puts upward pressure on interest rates and may crowd out the private sector's investment. On the other hand, borrowing from the central bank is inflationary, as it results in increased supply of money in the economy. The inflation caused by fiscal deficit makes a country good for selling to and bad for buying from, thus putting pressure on the current account position.
To minimise the negative effects of borrowing from the central bank, it will be essential for the government to control the prices of consumer goods and essential raw materials, as well as to increase the supply of the former. This may necessitate increased import of consumer goods and restrictions on food export. In either case, the current account balance, particularly the trade balance, will be affected. Public expenditure has two components: current expenditure and developmental expenditure. For reasons political as well as economic, it will not be advisable to cut the developmental expenditure. Hence, whatever fiscal adjustments have to be made, the same should be for the current expenditure. The options available to the government in this regard, however, are limited, as a major portion of the current expenditure is allocated to debt servicing, defence and subsidies.
Debt servicing is an obligation that has to be met, while any attempt to reduce the defence expenditure will be strongly resisted by the armed forces, which have a pre-eminent position in Pakistan's political system. This leaves reduction of subsidies as the only option as far as controlling the public expenditure is concerned. In this connection, the new government will have to make the difficult decision of whether to withdraw the Rs 168 billion subsidy on petroleum products or not. The Fiscal Responsibility and Debt Limitation Act also makes it mandatory for the government to restrict the fiscal deficit to a maximum of four per cent of the GDP. Hence, the withdrawal of the subsidy on petroleum products may be necessary to contain the fiscal deficit and fulfil the legal obligation in this regard.
Moreover, though they result in reduced prices, subsidies are a transfer from public revenue -- it is the taxpayers who ultimately bear their burden. However, the decision to withdraw subsidy on petroleum products will be highly unpopular, as it will add enormously to inflationary pressures. The Fiscal Responsibility and Debt Limitation Act also states that the revenue balance -- difference between total revenue and current expenditure -- shall not go into negative from the financial year 2007-08 onwards. However, according to the SBP's quarterly report (July-September 2007), the revenue balance has gone into negative, due partly to a 100 per cent increase in the servicing of domestic debt and partly to a surge in the development expenditure. Hence, the new government will also be required to improve the revenue balance, which strengthens the case for either reduction in or elimination of subsidies.
Expenditure is just one side of the fiscal policy; the other is revenue or taxation. Normally, the revenue-GDP ratio goes up in the wake of robust economic growth. However, in Pakistan's case, this ratio has remained around 14 per cent in the last few years, notwithstanding the robust GDP growth. A serious challenge for the new government will be to increase the revenue-GDP ratio, by widening the tax net and improving the tax collection. This will require not only administrative efficiency but also real political will, because tax evasion, particularly by the big fish, is common in Pakistan.
Finally, we come to the current account deficit. In only the first seven months of the ongoing financial year (July 2007-January 2008), the current account deficit has increased by a staggering 47 per cent. This surge can be attributed mainly to the trade deficit, which stood at $7.71 billion in the aforementioned period. To narrow the trade deficit, the government will have to either bring down imports or push up exports. A growing economy, deficient in indigenous resources, needs foreign capital goods and raw materials to sustain growth. Hence, reduction in import of industrial goods will weaken the growth momentum. Secondly, since customs duties are a major source of public revenue, cut in imports will add to the government's deficit.
Many development schemes initiated by the government fail to achieve their intended purposes because of the private sector's involvement
By Dr Noman Ahmed
In the past few weeks, many news reports have appeared in the media about the disappointing status of a clean drinking water project that was launched with much fanfare by the previous regime. As the concerned stakeholders are busy in shifting the blame to the weaker shoulders, one conclusion can be derived from this and other similar episodes: contracting out essential services and public responsibilities has proven to be entirely ineffective.
Several examples can be cited to prove this point: the recently finalised contract for solid waste collection and disposal in Karachi (awarded to a Chinese firm under dubious circumstances); watch and ward contracts awarded by business and industrial enterprises to private security agencies, whose staff deserted in the hours of need; construction contracts of mega projects, many of which resulted in falling bridges, broken canals / embankments and damaged dams within a few months of completion; power generation contracts to independent power producers at high tariffs; and multifarious procurement projects in different sectors, which have been severely criticised for astronomical costs and dubious specifications.
The previous regime seems to have taken decisions to sub-let vital services to the so-called private sector for covert reasons. Buckling under market pressures from domestic and external interest groups; attempts to dole out incentives of rent seeking to political and strategic favourites, including military conglomerates; covering up for declining competence in many public sector institutions; and an inherent desire to prematurely trumpet success without even half achieving it are some of the reasons behind the decisions of parcelling out contracts of all scales and scopes. It is crucial to note that contracting cannot bear fruit until primary pre-requisites are effectively put in place.
Transparency in the award of contracts is the foremost issue. From the conceptualisation of a project or a programme to the post-operation monitoring, a neutral and impartial role of the contract-awarding institutions is imperative. High performance of the contracted work and the full value of spent resources can only be ensured if the contract is awarded to the most deserving and competent contractor. Records of many contracts in different sectors are replete with case studies where this factor was totally by-passed.
For example, a major bridge in the Karachi Northern Bypass collapsed in September 2007, only weeks after its pompous inauguration by the president. While investigations are under way, the contract was awarded to a favourite organisation on a single tender. Similarly, eyebrows were raised when the bid of a consortium backed by a 'friendly' country was accepted for the privatisation of the Karachi Electric Supply Corporation (KESC).
The medium- and small-scale contracts have also shown the same trend. As there is no independent mechanism to ensure transparency, the rot continues to infest the various sectors. The reason behind delegating work is the supposed competence of private firms in their respective areas of work. In some cases, this holds considerable veracity. The various public transport companies in Karachi went bankrupt in no time, mainly because of their dilapidated fleets and liability-ridden balance sheets. In contrast, private transport companies continue to run the same services at lesser costs, despite not getting any subsidy from the government. Not all the sectors, however, enjoy the same status.
There are very few contractors in Pakistan who can undertake quality work in their respective domains. The shortage of capacity is mainly pervasive in basic sectors, such as road and highway construction, modern building construction services, distribution of goods, procurement of commodities, quality assurance and maintenance of infrastructure. Absence of quality human resources, precarious environment that prevents investment in capacity enhancement, rejection of merit in favour of political cronies and uncertain conditions of contract management do not allow the contractors to focus on raising competence.
Here it is pertinent to mention that not all who operate as contractors in Pakistan are qualified to do so. Some of the political or administratively favoured souls are supported to acquire the role of contractor, despite any business acumen or sectoral understanding. Many retired personnel from the bureaucratic and military cadres can be seen working as contractors, normally for the same departments from where they had earned gainful completion of service. When contacts are at work, merit becomes a sidelined variable!
A common observation pertinent to different contracted works is the snail pace of progress. Urban centres of the country, where any development work worth the name is in progress, suffer disruption of routine life for ages. Inherent deficiency with regard to management and technical capacity is the major factor. For instance, road construction in Pakistan is still carried out with obsolete technology and operating procedures. Modern practices are seldom welcome in this domain. For this reason, the carpeted roads lose their functioning tops after a couple of drizzles or any minor physical affects. Falling standards in engineering supervision, poor skill level of technicians, and inappropriate procedures in material grading and tools / plants are some of the reasons for this.
We cannot blame the contractors alone. The inability of the government to provide a secure and facilitating environment to let contractors focus on raising work standards is simply absent. Ironically, foreign contracts -- who are lured to participate in local bids after much effort -- face the same handicaps. They also raise the costs due to security concerns. It goes without saying that the business of contracting suffers from corruption and malpractices, which exist in many visible forms at almost all levels of work.
From the initial stages of project design to the handing over of completed works, different types of hidden costs have to be borne by the contractor. High profile kickbacks to key functionaries, periodical releases to area influentials, payment of regular sums to the inspecting staff, doles at the stages of procurement and extension of direct perks to the minions who sit on billing registers are obvious categories. The citizens have to bear the outcome in the form of enhanced prices and poor quality of public services delivered in corruption-ridden formats. The regulating mechanisms are toothless to deal with the rising and increasingly immune type of such 'standard' practices. At best, accountability is structured at the last end of contracted works.
So far, the process of accountability has neither been able to combat corruption in contracts nor in gaining public confidence. The end result of this imbroglio is the continuous loss of precious development finances that fail to achieve their elucidated goals. If the The new government is serious in making a difference, a few basics must be put in place. The decision-making related to contracted works as well as contractors should be dealt through yardsticks of technical and managerial competence in an open environment. Respective public agencies, already entrusted with tasks of training staff at the execution level, must be geared to raise the skill quality and numeral strength of trained manpower. Also, the public works and procurements must be open to public scrutiny.