9/11
Now what?
Ten years after the motley crew of ‘terrorists’ wreaked havoc at the heart of the world’s most powerful country, ours has become an even more warped and increasingly conflict-ridden society
By Aasim Sajjad Akhtar
In the relative scheme of things, 10 years is not a very long time. Human history is stretched out across millennia, and there have been too many epoch-changing events for any one to stand out more than any other. Yet, given the unique time-space compression that characterises the modern present, particularly in the aftermath of the ‘information revolution’, it is tempting to suggest that the happenings on September 11, 2001 have had an impact incomparable to any other single event in human history.

money
The anatomy of depreciation
Substantial
foreign capital inflows are needed to
prevent further depreciation of the rupee, which will increase supply of the dollar and convey a positive signal
By Hussain H. Zaidi
On August 27, the rupee depreciated to the lowest level against the American dollar as the exchange rate reached 87.16. At the close of the last financial year (FY11), the rupee-dollar parity was 85.97. This means during barely two months, the domestic currency has declined by 1.19 percentage points against the greenback.
The rupee’s downward movement in the foreign exchange market marks the continuation of the development that started in November 2007 after nearly six years of the currency’s relative stability.

Rural roots
This is a significant publication, combining the seminal study A Punjabi Village in
Pakistan (1960) together with its previously unpublished sequel, The Economic Life of a Punjabi Village, by the Turkish anthropologist Zekiye Eglar
By Haris Gazdar
“No two clusters of villages in the Punjab are exactly alike. Yet there is a village way of life, which is best understood through the lives of people in a particular village. So Mohla, the village in which I lived for five years and which is described here, is both unique, and in its own way, typical of the Punjab.”
The genre of village study was once the mainstay of anthropology. When Zekiye Eglar arrived in Pakistan in 1949 most students of the discipline expected to stay in a village for a year, apply the tools of ethnography with great attention to detail and then re-emerge with a magnum opus, having often radically but knowingly reordered their own lives. Eglar, a Muslim woman of Azerbaijani descent, grew up in Ataturk’s Turkey. Her engagement with “her” village in Gujrat went further still, perhaps because unlike most foreign (generally colonial) researchers she self-consciously sought something of herself in the “field”.

trade
In the shadow of giants
Pakistan cannot afford poor governance with economies like China and India in its neighbourhood
By Alauddin Masood
At a time when Pakistan finds itself sandwiched between two economic giants — India and China — the need for the country’s economic recovery becomes more pronounced because economy is the most vital element. In fact, when viewed in this context, the country’s economic revival appears central to the viability of its future, especially when both India and China have streamlined their tax administrations, enhanced their revenue generation capacity and implemented economic reforms which are likely to result in long-term sustainable growth rates.

Social movement and cities
Unrest in recent times demands deeper
understanding of social transitions
By Zubair Faisal Abbasi
Social unrest which asks for a systemic change in the way countries and cities are governed, portrays interesting stories and show behind-the-camera shots. Be that London or Cairo and, more recently, the anti-corruption campaign of Team Anna are said to have some streams in common.
For example, it is estimated that events in India and the desire for democratic change in China and Arabian Peninsula is linked with increase in GDP per capita. Taking insights from Prof. Paul Collier, many analysts have argued that increase in GDP per capita beyond US $ 2700 makes polity shiver for change. More authoritative and autocratic a country or region, more violent the expression for desire ensue.

Corruption consumption
Are we willing to improve governance and ensure transparency?
By Dr Noman Ahmed
Winds of change have started blowing across the border. Many critics believe that the campaign by Anna Hazare and his supporters will not be confined to India alone. It will have a contagious effect and may shape up a new storm of activism to embarrass the governments at the federal and provincial platforms.
If one takes a cursory look at the Pakistani scenario, a most unsatisfactory situation is revealed. Appointment controversy of Auditor General of Pakistan, allegations to mute Public Accounts Committee, perpetual interference in the investigation of high profile cases and scams in the award of mega contracts are only a few examples. The political will to stem corruption and malpractice is nowhere in the sight.

retrospect
What happened after 9/11
Countries like Pakistan and Afghanistan, where most stuff happened, will not get over their American trauma
By Irfan Mufti

The September 11 events in the US reshaped the globe and its politics, as they say, and they are right. An unprecedented response of global scale was generated that still resonates in world politics and affairs among nations and continents.
New terminology has been created that drives politics and international affairs, intelligence and military discussions, intellectual discourses and other global matters. Styles of diplomacy changed and the world divided on new faultlines.

Agenda behind the war
Has the US achieved its targets in Afghanistan or elsewhere?
By Huzaima Bukhari and Dr. Ikramul Haq
On the tenth anniversary of attack on New York's twin towers, the world is still struggling to come out of its devastating effects. The 'war on terror' has pushed governments to live under a permanent state of fear. In the frenzied quagmire created by extremists, human societies are facing acts of terrorism, rise of religious bigotry, hatred and conflicts threatening world's peace and tranquility.

9/11
Now what?

In the relative scheme of things, 10 years is not a very long time. Human history is stretched out across millennia, and there have been too many epoch-changing events for any one to stand out more than any other. Yet, given the unique time-space compression that characterises the modern present, particularly in the aftermath of the ‘information revolution’, it is tempting to suggest that the happenings on September 11, 2001 have had an impact incomparable to any other single event in human history.

Tempting, yes. But fallacious all the same. Indeed, it would suit the powers-that-be ever so well if the ‘world has changed forever’ narrative was to become everyday common sense. If there were no dissent against the militarisation of states and societies that followed the 9/11 attacks, then the decisions to initiate preemptive wars, hire mercenaries to police the colonies, and violate civil liberties would be vindicated. In short, all that has happened in the last decade would be considered nothing less than the natural progression of human history.

In actual fact, there is nothing natural about what has happened. Even the most right-wing of commentators within the United States have acknowledged that the Empire is in a state of terminal decline, and that the carnage visited upon countless ‘others’ since 9/11 sounds and feels like a loose canon on a sinking ship. The more pragmatic of these pro-establishment intellectuals have demanded that the decline be managed prudently, and it is the historic misfortune of Barack Obama that he has to clean up the mess left behind by George W. Bush.

As it turns out, Obama has simply tried to provide a greater measure of legitimacy to the hare-brained foreign policy adventures initiated under Bush Jr. He has not succeeded, because those adventures were doomed to failure from the beginning. They have, however, left an indelible mark on the ill-fated countries that were — and still are — in Washington’s firing line. Pakistan is chief amongst them.

For me the experience of the ‘war on terror’ in this country confirmed many of my hunches about our ruling class, the urban-rural and ethnic divides, and the power of the men in khaki. But it has also exposed irreconcilable contradictions in the prevailing structure of power, and how these contradictions play out in years to come will determine exactly what the fate of this country’s people is.

First, the discourses and politics of terror, security, extremism, and so on have effectively reinforced what Arif Hasan has called ‘elite alienation’. Here elite refers to that very small segment of the rich and powerful that until the late 1970s exercised a considerable measure of cultural hegemony throughout society, namely the English-speaking ‘chattering’ class. Towards the toe end of Bhutto’s rule and then through the Zia years, this elite became increasingly isolated from the rest of society; its educational institutions, bazaars, places of work and recreation, and residences became self-enclosed, and it ceased to play the paternalistic role that it had adopted when its first generation emerged as the products of Macauly’s fateful vision in the middle of the nineteenth century.

This elite remains tied to Pakistan because its fortunes and fame cannot be picked up and transported elsewhere. Yet it is more and more estranged from a society which is now much more overtly conservative and fractious. Since 9/11 this estrangement has intensified greatly, and the elite has hedged its bets on the civilising outsider to ‘save’ its beloved country from being plunged back into the stone ages.

In the same period, the military — peopled less and less by the ‘old’ elite and more by the ‘new’ conservatives — has at one and the same time reinforced its domination of the polity, and seen it become more tenuous. It has preyed on the fear of ‘extremism’ and ‘terror’ that haunts the local elite and the captive Western audience alike to reload on its hardware, graciously supplied to it by the Pentagon. Yet it has also found that its insatiable appetite for power and resources has given rise to a religious Frankenstein it cannot fully control and secular opposition of various kinds that it is simply not used to dealing with.

All of this has played out in our urban centres, while the tens of millions living in villages remain beset by concerns that are sometimes completely unintelligible to the urban masses. I am not suggesting that our villages are remote islands cut off from the rest of the country, but only that the ‘public’ that the media, intelligentsia, politicians, generals and judges harp on about is far less homogeneous than we care to admit.

In much the same way as the urban-rural divide is ignored in the discourses of ‘terror’, ‘security’ and ‘extremism’, the ethnic divide, too, is conveniently set aside, and in the case of Balochistan, criminally hidden away by both our own state and the ‘international community’. The eruption of conflict in Karachi in recent months has now made it untenable for this charade to continue indefinitely, but even in this case one suspect that whatever settlement is fashioned by local and global powers will be based on securing only short-term and ‘strategic’ goals.

In sum, ten years after the motley crew of ‘terrorists’ that has now become globally renowned as ‘al-Qaeda’ wreaked havoc at the heart of the world’s most powerful country, ours has become an even more warped and increasingly conflict-ridden society. It is worth bearing in mind that this has happened in spite of George W. Bush’s assurances that the ‘war on terror’ that was launched by Washington only a few weeks after 9/11 would make both Americans and the ordinary people of the world more secure.

The nexus of militarised states, private corporations and the mass media will try to ensure that in the next ten years the ‘consensus’ that has been built with regards to ‘terrorism’ over the past decade is consolidated. It is the job of the conscientious objectors all over the world to make sure that this does not happen. Here in Pakistan we have much to ponder — especially those of us with the means to uncover the structures of domination that continue to make the lives of the rest of us a living hell.

 

money
The anatomy of depreciation

On August 27, the rupee depreciated to the lowest level against the American dollar as the exchange rate reached 87.16. At the close of the last financial year (FY11), the rupee-dollar parity was 85.97. This means during barely two months, the domestic currency has declined by 1.19 percentage points against the greenback.

The rupee’s downward movement in the foreign exchange market marks the continuation of the development that started in November 2007 after nearly six years of the currency’s relative stability.

On average, the rupee-dollar parity was 61 during FY02, 57.7 during FY03, 57.9 during FY04, 59.6 during FY05, 60.1 during FY06 and 60.5 during FY07. During first four months of FY08 (July-October 2007), the rupee remained more or less stable.

However, the steep slide started in November 2007 as the country entered into a period of heightened political uncertainty and by the end of April 2008 the rupee-dollar parity had exceeded 64. Thenceforth, the rupee continued moving downward. The assistance from the International Monetary Fund (IMF) has helped arrest the rot but can hardly provide a durable basis for stabilizing the exchange value of the domestic currency.

In a market economy like Pakistan, the exchange rate is primarily determined by the relative demand and supply of domestic and foreign currencies. If the demand for a foreign currency exceeds its supply, it will appreciate, which means that the domestic currency will depreciate. The greater the difference between the relative demand and supply of the currencies, the sharper will be the upward or downward movement of the exchange rate.

If a country imports more than it exports, its demand for a foreign currency will exceed the supply thereof and thus the domestic currency will tend to depreciate. The result will be similar if capital outflows exceed capital inflows. Hence, when an economy is facing an adverse balance of payment (BoP) position, it is likely to have a weak exchange rate i.e., its currency will depreciate.

Other factors affecting the exchange rate are the relative prices in two or more countries, the interest rates, money supply, and the level of business confidence. An economy facing higher inflation than its trading partner or having excess money supply is likely to see its currency depreciate. Conversely, the domestic currency of a country having a higher interest rate than its trading partner tends to appreciate as investors prefer to buy bonds and bills denominated in that currency.

Finally, value of the domestic currency also reflects businesses’ confidence in the country’s economic health. This confidence is eroded amid political uncertainty or instability. Hence, political factors also play an important role in exchange rate stability or volatility, as the case may be.

The above factors may well be applied to the depreciation of the rupee against the dollar. We begin by looking at the BoP account for FY08, because it was during that year that the rupee had drastically depreciated. In FY08 the current account deficit shot up to $14.01 billion from $6.87 billion during FY07.

The surge in the current account deficit was due to trade deficit, which rose to $20.74 billion from $13.53 billion during FY07.  But for the $6.45 billion worker remittances, the current account deficit would have much higher. The enormous trade deficit meant that the demand for dollars far exceeded their supply appreciating the greenback against the rupee. The increase in the current account deficit was accompanied by the fall in foreign investment inflows from $8.41 billion to $5.19 billion, which further reduced the supply of dollars relative to their demand.

As a result, foreign exchange reserves declined from $15.61 billion at the end of FY07 to $11.28 billion at the end of FY08. The falling foreign exchange reserves constrained the State Bank’s ability to directly intervene in the market to stabilize the rupee by injecting dollars into it. Not only that, the weakening forex position conveyed a negative signal to the market. Speculations were rampant that the dollar would go up further. As a result, the demand for the dollar went up, which actually drove up its value relative to the rupee.

During FY09, the current account deficit declined to $9.02 billion as trade deficit went down to $12.49 billion and worker remittances went up to $7.81 billion. However, on capital account, foreign investment came down to $2.68 billion.

FDI decreased to $3.72 billion, while portfolio investment registered negative figure of $1.05 billion showing substantial capital flight.

In FY 10, the current account deficit was further reduced to $3.94 billion Trade deficit fell to $11.53 billion, while remittances increased to $8.90 billion. However, FDI went down to $2.15 billion.

The FY11 also saw improvement on the current account balance. The country recorded current account surplus of $437 million mainly due to a record $11.20 billion remittances. Trade deficit also went down to $10.28 billion. However, FDI inflows fell to $1.57 billion. In July FY12, current account deficit of $75 million was recorded. That included $1.02 billion trade deficit and $1.09 billion remittances. Meager FDI of $91 million was also recorded.      

In addition to the BoP problems, high inflation has also been partly responsible for the slide of the rupee. During FY08, consumer price index (CPI) inflation on average increased to 12 per cent from 7.8 per cent during the preceding year. The average inflation increased to 21 per cent during FY09, declined to 12 per cent in FY10 and rose again to 14 per cent in FY11. The inflation was recorded at 14 per cent in July FY12.

With a view to containing inflation, the State Bank of Pakistan is pursuing a rather restrictive monetary policy for quite some time. At the end of FY11, the policy rate was 14 per cent however subsequently the rate was slightly curtailed to 13.5 per cent.

On the other hand, faced with a severe economic downturn, the Federal Reserves of the USA has kept interest rates close to zero. As mentioned earlier, the currency of a higher interest rate country tends to appreciate viz-a-viz that of a lower interest rate country. Hence, on that account the rupee should depreciate against the dollar as it is more profitable to invest in financial assets denominated in the rupee. However, the impact of a restrictive monetary policy has been offset by the Pakistan government’s heavy reliance on central bank borrowing as a major source of deficit financing, which has created excess money supply.

Regarding the political factor, one reason for exchange rate stability during 2002-2007 was relative political stability in the country. However, since November 2007, the country has remained subject to political uncertainty reflected in the depreciation of the rupee.

Exchange rate stability is primarily the responsibility of the central bank, whose most powerful tool is sale and purchase of currencies in the foreign exchange market. However, in case of the SBP the use of this tool is constrained by meager foreign exchange reserves, which had reached $17.95 billion on the week ending August 6, 2011.

What is needed to prevent further depreciation of the rupee is substantial foreign capital inflows (export receipts, FDI, foreign aid), which will increase supply of the dollar and convey a positive signal to the market thus reducing speculations. This needs to be accompanied by measures to contain inflation.

[email protected]

 

Rural roots

“No two clusters of villages in the Punjab are exactly alike. Yet there is a village way of life, which is best understood through the lives of people in a particular village. So Mohla, the village in which I lived for five years and which is described here, is both unique, and in its own way, typical of the Punjab.”

The genre of village study was once the mainstay of anthropology. When Zekiye Eglar arrived in Pakistan in 1949 most students of the discipline expected to stay in a village for a year, apply the tools of ethnography with great attention to detail and then re-emerge with a magnum opus, having often radically but knowingly reordered their own lives. Eglar, a Muslim woman of Azerbaijani descent, grew up in Ataturk’s Turkey. Her engagement with “her” village in Gujrat went further still, perhaps because unlike most foreign (generally colonial) researchers she self-consciously sought something of herself in the “field”.

But that is not all that is significant about this book and its publication. The fact is that Pakistan lost out on village studies after a promising start. The village study, for all its many problems, demanded acute engagement with a community, and valorized the production of systematic qualitative knowledge which enriched both policy-making and political debate in India.

In Pakistani Punjab we had a handful of pioneers and the precious few who followed in their footsteps. In Sindh, there was even less. More village studies would, obviously enough, not have significantly altered the course of history, but having fewer shoulders to stand on does make the job of engaged social scientists harder.

By taking on the task of completing and reviving Eglar’s work — re-publishing Eglar’s seminal study A Punjabi Village in Pakistan (Columbia University Press, 1960) together with its previously unpublished sequel, The Economic Life of a Punjabi Village —  Beena Sarwar and Oxford University Press (OUP), Pakistan have done us all a huge favour.

Interestingly, the project was initiated by Catherine Mary Bateson (daughter of the iconic American anthropologist Margaret Mead who mentored Eglar) along with Fazal Ahmed, formerly the choudhry of the village Eglar studied, who left Pakistan (Ahmed, who became an artist and art teacher in the USA, passed away shortly before the book was published).

One of the central themes of Eglar’s study of a Punjabi village is the institution “vartan bhanji” — reciprocal exchange and the building of social relationships through reciprocal exchanges of cash, food and other items in rural Punjabi society. It is old fashioned these days to speak about moral economy and perhaps hard-nosed cynicism is our zeitgeist.

There are serious critiques of what was once a widely accepted notion of the harmonious Indian village. I, for one, believe that our present-day hard-nosedness is not just cynical but also democratic. Be that as it may, one issue where Eglar’s understanding of relations binding rural society together remains at the cutting edge is her careful consideration of the role of women in ordering social relationships.

We will find her treatment of class and caste overly coloured by the dominant caste-class. But she was certainly not alone among ethnographers of Punjab in not underscoring the institutionalized inequality faced by Kammis and laboring castes.  One way of interpreting the relatively benign treatment of caste-class inequality is to wonder if actual conditions were, indeed, less severe then than now.

There is plenty of evidence to suggest this was not the case. Even on this score Eglar and the few early village studies are valuable because they do not deny the existence of a caste-class hierarchy — the zamindar-kammi relationship is everywhere in the books even if it is not explicitly put forth as the central theme. Eglar was a product of her own times and has left much of value for us.

Another professional woman who went to Punjab from the outside and engaged with its society some four decades after Eglar had different concerns. It is a measure of her times that the brutality of bonded labour, much of based on the caste-class hierarchy was far more salient than the softening of harsh edges afforded by reciprocal exchange. I am speaking, of course, about Beena Sarwar, who along with colleagues at the Human Rights Commission of Pakistan (HRCP) and others was among the first journalists to have written openly about bonded labour in the brick kilns of Punjab.

I don’t believe it is at all ironic that it has fallen upon Sarwar, an activist journalist with an eye for social inequality, to pay a tribute to Zekiye Eglar, the anthropologist who documented/analysed a system of reciprocal exchanges. In fact, it is “vartan bhanji” between us and the past generation to whom we are greatly in debt. I certainly hope that OUP will consider other similar projects — the names of Saghir Ahmad and Hamza Alavi spring to mind.

Haris Gazdar is an economist working on social policy and political economy issues at the Collective for Social Science Research, Karachi http://www.researchcollective.org

 

trade
In the shadow of giants

At a time when Pakistan finds itself sandwiched between two economic giants — India and China — the need for the country’s economic recovery becomes more pronounced because economy is the most vital element. In fact, when viewed in this context, the country’s economic revival appears central to the viability of its future, especially when both India and China have streamlined their tax administrations, enhanced their revenue generation capacity and implemented economic reforms which are likely to result in long-term sustainable growth rates.

On the other hand, the burgeoning budget deficits in Pakistan are leading to mounting public debts and price-hike which, in turn, lead to inflation and add to the miseries of the people. With a burden of Rs9 trillion public debts, Pakistan’s debt-to GDP ratio has swelled alarmingly to 69 percent and according to economic experts it is too much for a poor country having no debt carrying capacity.

The situation calls for increasing the state revenues with a view to controlling the budget deficits. Meanwhile, the vices of smuggling, piracy, counterfeiting and corruption continue to inflict a direct revenue loss of over two billion dollars annually to the national exchequer.

Currently, re-entry of Afghan Transit Trade (ATT) goods into Pakistan, electricity theft and under-invoicing appeared at the top of major sources of tax evasion and corruption. By curbing electricity thefts and re-entry of ATT goods, the government can easily raise over Rs. 320 billion annually in revenues.

The abuse of ATT facility not only undermined local manufacturing industry but also legal imports due to uncompetitive prices. Consequently, ATT has virtually stifled the growth of Pakistan’s manufacturing sector, forcing many foreign investors to close their operations and, thereby, it has led to increasing unemployment in the country.

Unfortunately, even sealing of Pakistan-Afghan border and anti-terror operations have failed to make any visible dent in the cross-border smuggling. Given the situation, it really poses a daunting challenge to the authorities to protect the local industry from the onslaught of smuggling and also to plug the consequent revenue loss from the illegal trade in ATT goods.

In addition to smuggling, the vices of piracy, counterfeiting and infringement of copyrights were other major problems that inflicted heavy revenue losses to the State.

Being inimical to creativity, counterfeiting and copyright violation not only discouraged new inventions and discoveries, but also production of original works, thus stifling prospects for economic development, new investments and job creation.

Counterfeit products ranged from small products like cigarettes, medicines, black tea, to large items like tyres and sophisticated electronics. Counterfeiting also took place at the industry level.

The negative effect of smuggling, counterfeiting and piracy on the nation and the State can be explained with the help of a study pertaining to cigarette industry. During 2010-11, the illegal practice deprived Pakistan of Rs. 10.5 billion in taxes/duties and the AJK Government of Rs3 billion in revenues.

Besides depriving cash-starved national economy of the much-needed revenue, the sale of smuggled and counterfeit sub-standard products have the potential of leading to unhealthy trade practices through sale of their products at nominal prices and also offering incentive schemes, while causing several health risks to people consuming shoddy products. Thus, these corrupt practices not only damaged the indigenous legitimate industry in terms of erosion of consumer confidence in genuine brands but also blocked further investments in trade and industry.

For curbing smuggling and counterfeiting, experts advocate the need for rationalisation of taxes, as they insisted that high rates of taxes often led to smuggling and counterfeiting of products. But, still instead of curbing these vices and also the theft of electricity and gas, the authorities put extra burden on citizens who pay taxes honestly.

Instead of introducing measures to check electricity theft, the authorities were now reportedly increasing power tariff by 15-20 percent in a phased programme by 2012.

Increase in the size of parallel economy since early 1970s, led one to believe that the authorities either deliberately remained oblivious to the crippling effect of corruption or some of them were in collusion with the vice gangs.

Since smuggling and counterfeiting discouraged creativity, innovation and invention and also arrested growth of national economy by inflicting heavy losses upon the corporate sector, it was need of the hour to curb these vices through enforcement of law, punishment to criminals, and launching campaigns motivating people to expose the corrupt.

The writer is an Islamabad-based freelance columnist.

 

 

Social movement and cities

Social unrest which asks for a systemic change in the way countries and cities are governed, portrays interesting stories and show behind-the-camera shots. Be that London or Cairo and, more recently, the anti-corruption campaign of Team Anna are said to have some streams in common.

For example, it is estimated that events in India and the desire for democratic change in China and Arabian Peninsula is linked with increase in GDP per capita. Taking insights from Prof. Paul Collier, many analysts have argued that increase in GDP per capita beyond US $ 2700 makes polity shiver for change. More authoritative and autocratic a country or region, more violent the expression for desire ensue.

The demand for better governance arises when the public’s basic needs are being met. Literature on governance shares the insight that making people rich is comes with a price.

The new rich and sometime educated class demands good value for money while consuming private and public goods and services. The demand which the poor cannot make because their domestic problems keep them occupied. Team Anna knows it well that the taxpayer has the right to question the functioning of the state.

The management cannot befool people for long; they either morph into a quality company or leave the room for new entrants. In India’s case, the situation becomes complex in the sense that Team Anna politically supports the right-wing agenda with an extremely naïve concept of corruption.

Interesting though, without being able to decipher the nuts and bolts of what exactly a machine of corruption looks like, a cross-section of junta has shown the will to demand quality services from the public sector. Team Anna still needs to show muscles to make private businesses responsive towards social development needs of ordinary Indians.

In a democracy which is fast transforming itself into an open market, entrepreneur-based efficient systems may need more guts to rope in the thriving private enterprises, specially the bigger ones.

London riots show an interesting face of social unrest. While demanding good quality government instead of lean and mean arrangement, many analysts have blamed the new public management idea system of Tories. They argue that a small government is efficient as long as things do not go wrong. In another instance, the blame has been put on emerging racism and cuts in social spending. These ideas might have been close to reality but another type of analysis is also warranted.

Prof. Richard Florida has argued that global and big cities have problems. The political economy of city life needs radical new thinking. It is not hooliganism and frustration around the falling UK’s economy which matters. What matters is that globalisation has created richer classes living side by side with the extreme poor. The inequality which existed even during the 1940-1970s has been sharpened by during the last thirty years.

The cities have created promises for increase in wealth and quality of life. However, while distributing opportunities for such a change, it has sharpened the wedges of class and therefore identities and conflicts. It is being argued that without a new social compact emerging and mass political institutions articulating the vision for future, the underclass is becoming chaotically riotous.

The political economy of cities has emerged as an expression of inequality and anger living very close to one another. Making matters worse, the bail-outs to ward off recession has saved only the rich and the skilled people not the vulnerable and poor.

Richard Florida says that a new way of dealing with social unrest ‘means early childhood development programmes and efforts to channel young people’s talents into new urban enterprises and creative endeavours that benefit society. It must also focus on turning rapidly growing, currently low-wage, low-skill service jobs into higher-paying, more fulfilling and more productive work’.

To conclude, other than clubbing everything under the moral-political rhetoric, the political economy side of social unrest in recent times demands deeper understanding of social transitions alongside taking note of creation and distribution of wealth and opportunities.

The understanding also demands action on the part of governments. The state has to be responsive and futuristically ahead of society otherwise, the case for chaotic riots and political violence stands there to challenge the status quo. One may ask: do we need to think of Karachi in the light of such socio-economic transitions?

The writer is a development consultant and can be reached at [email protected]

 

Corruption consumption

Winds of change have started blowing across the border. Many critics believe that the campaign by Anna Hazare and his supporters will not be confined to India alone. It will have a contagious effect and may shape up a new storm of activism to embarrass the governments at the federal and provincial platforms.

If one takes a cursory look at the Pakistani scenario, a most unsatisfactory situation is revealed. Appointment controversy of Auditor General of Pakistan, allegations to mute Public Accounts Committee, perpetual interference in the investigation of high profile cases and scams in the award of mega contracts are only a few examples. The political will to stem corruption and malpractice is nowhere in the sight.

It is incorrect to assume that corruption has only one and static form. In reality, it manifests itself in multiple formats. Political corruption is referred to as acts in which government officials, political officials or employees seek illegitimate personal gain.

Avoiding the standard, ethical and technical demands of any profession in the delivery of service to individual or society is described as professional corruption. Doctors, engineers, lawyers, adjudicators, accountants, architects and real estate experts fall in this category with many others.

By becoming a willing partner in an illegal, unethical or immoral practice, an ordinary citizen becomes a part of social corruption. This also includes the act of keeping silent after observing corruption at any level. Act of hiding the real intention and giving false pretension to others for self benefits is termed as hypocrisy. Acts of omission, inaccurate recording or fudging the statistics for the purpose of achieving self-serving desires is called numerical corruption. Observations suggest that these and perhaps many more forms of corruption plague our national context.

Why corruption? It is the most important question to be answered if the regime and society wish to root it out in an effective manner. Sporting a lavish lifestyle, and extending benefits to political dependents are a few mentions.

The financial corruption - which is perhaps the most rampant of all - evolves from the desire to adopt ostentatious living beyond the available legitimate means. It is common observation to find people in responsible positions and roles guilty of this misconduct which is callously overlooked by power wielders.

A cleric, who is in active politics, can be found living in a huge mansion in any of high streets of the capital. Prior to his gainful entry into politics, the same soul was confined to the rustic walls of a madrassa. As our generals retire from service now, they have enough to survive for ages without looking for a post retirement employment. Assets and rewards endowed are enough to let their future generations live in pomp and style.

A junior officer in a 'sensitive' department can be found driving an imported luxury jeep worth millions of rupees. His may not be officially entitled to a vehicle. Green number plate cars and luxury cruisers are all on the rise. It will be improper to label Pakistan as a low-income country if one visits the federal or provincial secretariats during the day time.

According to a World Bank report, bribery has become a US $ 1 trillion industry per annum at the global level. In yester years, one would find a nervous-looking visitor handing over a note book or diary containing a few currency notes to an official. The whole operation had to be covert. Times have changed. Bribery, in many domains, has become a standardised exercise.

The finesse in this crime is such that one cannot catch the culprit. Existence of a high volume informal economy, culture of cash transactions, absence of documentation practices in assets and wealth are few of the dominant causes. Whether it is a matter of registration of an FIR or the acquisition of trading license for a trade, nothing can move without greasing the palms of the concerned. In some cases, the bribery deals are contracted outside the country. High value gifts also comprise this category.

Extortion has become an organized business. Personnel of law-enforcing agencies, government officials, office bearers of certain political parties, religious syndicates, underworld groups and petty criminals are the cadres associated with this trade.

It is believed that most political parties have formed alliances with extortion gangs in Karachi and beyond. Feudals use links to collect extortion toll. Similarly, pirs and sajjada nashins collect donations from disciples. The volume and extent of these operations are difficult to quantify but their existence cannot be denied.

Public funds are a sacred trust. They must be spent on the public well being in accordance with stipulated guidelines. One finds these funds routinely embezzled and misappropriated through crafty techniques.

As a routine, works and procurement beyond a certain value cannot be awarded without public announcement. Collusions of the officials with the favourities are established before the award of work. Tender notice is very carefully drafted that is based on the eligibility status of a pre-identified crony. It is estimated that the value of construction rises to 15 to 25 times the actual worth due to institutionalised formats of corruption.

Tehrik-e-Insaaf is crying corruption for many years now. But campaigning for it requires a holistic approach. Translating the social criticism on corruption into action plans, reforming governance structure is a prime consideration. Pakistan will have to develop many baselines that eventually lead to an effective control on corruption.

A home-grown leadership and set of indigenous approaches happen to be the first prerequisite. There are many options of anti-corruption available for adoption. United Nation's Global Compact Initiative is one of them. It invites public and private enterprises for voluntary adoption of operative principles, including anti-corruption. Enforcement of National Anti-Corruption Strategy, Public Procurement Rules and even ordinary rules of business can bring about enormous change. Measures also need to be taken to reduce the scale of cash transactions and replace them with documented movement of resources.

 

retrospect
What happened after 9/11

The September 11 events in the US reshaped the globe and its politics, as they say, and they are right. An unprecedented response of global scale was generated that still resonates in world politics and affairs among nations and continents.

New terminology has been created that drives politics and international affairs, intelligence and military discussions, intellectual discourses and other global matters. Styles of diplomacy changed and the world divided on new faultlines.

Early in the wars, George W Bush outlined their principal crudity, “Either you are with us or against us,” he declared soon after 9/11. His Assistant Secretary of State threatened to bomb Pakistan “back to the Stone Age”. Massive public reaction erupted against the US unilateral actions and attacks on its ‘enemies’ yet nothing changed the mindset of military and imperialist forces controlling affairs in post 9/11 phase.

The world paid heavy economic, political and military price causing ripples in world markets. Several thousand lives lost, military actions destroyed countries and their infrastructure, extremism of all sorts reached to alarming levels and political maneuvering and manipulation became business of the day. Tremor effects are still felt in countries, especially those that are directly hit by the events in post 9/11 politics of the world.

Pakistan’s immediate response to American demand for cooperation subsequently changed the nature and shape of its politics, economy and foreign relations. Decision of the military-styled, quasi-political government to unconditionally cooperate with US may have saved a few but put the entire nation in the line of fire and distrust by its Western allies despite all its sacrifices.

The response was not debated or formulated in political or democratic forums but taken solely by its military establishment, which traditionally strived and thrived on US military support and patronage. The decision, in later years, caused huge economic and political cost for the country. In just last 10 years of its role in the war on terror the country paid an accumulative losses of US $67 billion, almost 10 times the size of its economy and 120 percent of its foreign debts.

Ten years after 9/11, the scars of the American-led war on terror are visible in Pakistan. Backlash from Pakistan’s over-generous support to the US has radicalised society and placed the nation on an uncharted political course. Being the frontline state in the war on terror, the country has faced the most devastating effects of these events and post-9/11 politics of the world.

Though its’ hard to fathom the effects Pakistan has faced after 9/11 but its crippled economy, mismatched budget and countless lives lost in the war that more than half of its population does not understand. Life in Pakistan before the atrocious attacks of 9/11 was a rather normal, peaceful one. Everyday routine and other matters were never as bloody and gory as they are today.

Paranoia and constant worry people experience wasn’t rampant before. If there were bomb blasts, there were only a few hither and thither. However, after the war on terror and the Pakistani government’s open alliance with the US government in a “crackdown” on insurgents and other rebellious factions, life in Pakistan got a lot more complicated and violent.

To understand the nature of the US-Pakistan alliance in the war on terror, one must remember the hypocritical and shady businesses of both governments in funding the very same groups they attack today: the Taliban. It is understood that both regimes supported these groups until 9/11. Hence, the strength and power of the Taliban is a product of the support rendered by the US and Pakistani governments.

Three countries: Afghanistan, Iraq and Pakistan bore the brunt of the aftermath of the dastardly deed. Destruction and mayhem resulting from the occupation of Iraq has regressed it from a booming oil economy into a hotbed of terror attacks. Then Afghanistan, which was already reeling under the impact of the after effects of the Soviet invasion and tribal wars for supremacy, has retrogressed further after the US-led invasion.

The Taliban resurgence and machination by various secret services to establish their presence for their nefarious designs, makes Afghanistan a battleground for proxy wars. What is more, Pakistan got sucked into the war.

When the US-led forces attacked Afghanistan in 2001, Pakistan snapped its ties with the Taliban and supported the foreign forces. Since then, Pakistan has suffered tremendous losses, both directly in the shape of valuable lives, property and the cost of waging the war and indirectly through loss of revenue, investment and business.

Since the start of the anti-terror campaign, an overall sense of uncertainty has prevailed in the country, especially in Khyber Pakhtunkhwa (KP) and FATA. It has contributed to capital flight and slowed down economic activities making foreign investors jittery.

The Foreign Direct Investment (FDI) indeed has been adversely affected by the ongoing anti-terrorism campaign mainly in FATA and other areas of KP. Pakistan’s participation in the international campaign has led to an excessive increase in the country’s credit risk, due to which the World Bank has lowered its credit rating.

Macroeconomic indicators lowered and reached to alarming low, changed the general perception about Pakistan and its citizens. Rising demand for new institutions to counter terrorism burdened the economy and put economy in trouble with low GDP growth & high debt.

In fact, the cumulative effect of sparsely reported carnages immunized Pakistanis against sympathy with their many faceless and speechless victims. We were hardly aware, let alone troubled, when entire cities and ways of lives were destroyed.

More than 35,000 people, nearly 10 times the number of those killed on 9/11, have died, and many centres of folk, cultural and mystical Islam destroyed, in terrorism-related attacks. Yet Pakistan is little more than a shadowy battleground in the western imagination, a security and strategic imperative rather than an actual place with flesh-and-blood human beings and long histories.

Of course, America will eventually analyse its post 9/11 trauma just as it did its previous bloody interventions in Asia. But countries like Pakistan and Afghanistan, where most stuff happened, will not get over their American trauma. Its largest communities, will have suffered hundreds of thousands of deaths; its smaller communities will never recover their place … the fate of these countries is sealed.

The present political leadership has to re-dictate the terms of this partnership that must safeguard it basic national interests and treat it as equal partner and not a perpetual suspect in global war on terror.

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

[email protected]

Agenda behind the war

On the tenth anniversary of attack on New York's twin towers, the world is still struggling to come out of its devastating effects. The 'war on terror' has pushed governments to live under a permanent state of fear. In the frenzied quagmire created by extremists, human societies are facing acts of terrorism, rise of religious bigotry, hatred and conflicts threatening world's peace and tranquility.

The responsibility of this state of affairs lies with a handful of people who are at war with each other, calling themselves defenders of 'faith' and 'free world' respectively. They pose to be bitter enemies, but the fact is that they are friends having the same agenda: how to control the world through force and terrorism.

These 'defenders' of faith and free world are pawns in the hands of owners of the global war industry. These merchants of death buy politicians, military establishments, clergy and militants. The so-called defenders of 'faith' and the 'free world' work on the agenda of world arms manufacturers. They keep conflicts alive in different regions of the world for maximizing their profits. They supply deadly weapons both to the governments and the militants.

The campaign for global disarmament launched in 1980s by Non-Aligned Movement, backed by erstwhile USSR, was frustrated by these vested interests. They created the bogey of Communism and vowed to defeat it using militant Islam - the 'Islamic Card Policy' of US National Security Advisor, Zbigniew Brzezinski, who pleaded that "Muslim fundamentalists are preferable for the US, at least they are not "godless atheists" like the Soviet Communists".

In the name of fighting terrorism, the neo-colonialists are colonizing oil and mineral-rich countries, conspiring to topple "unwanted" governments and enforcing their financial policies in the name of reforming the world. The recent interventions of US and its allies in the Middle East, Asia, Africa or elsewhere are financially motivated as was the case in Afghanistan and Iraq.

Earlier, the US made such adventures in Vietnam, Cambodia, Angola, Mozambique, Ethiopia, Nicaragua, Grenada, Panama and Honduras and many others. The purpose behind all these interventions has been the same: prevention of egalitarian social change, bringing into power retrograde elements, leaving the economy in ruins, pitilessly laying waste rich lands while taking many innocent lives in this process and safeguarding corporate interest of multinationals.

According to the US and NATO, the invasion of Afghanistan was due to the reason that the Taliban were providing sanctuary to Al-Qaeda, who had claimed responsibility of 9/11's aggression. Nobody raised the question as to why the Clinton or Bush administrations did not ever place Afghanistan on the official State Department's list of states charged with sponsoring terrorism, despite the acknowledged presence of Osama bin Laden as a guest of the Taliban government? Obviously, such a "rogue state" designation would have made it impossible for any US oil or construction company to enter an agreement with Kabul for a pipeline to the Central Asian oil and gas fields.

Very few people know that the really compelling reason for plunging deeper into Afghanistan was ownership of oil and gas reserves of Central Asia. A decade before 9/11, Time magazine (18 March 1991) reported that US policy elites were contemplating a military presence in Central Asia.

The discovery of vast oil and gas reserves in Kazakhstan and Turkmenistan provided the lure, while the dismemberment of the USSR removed the one major barrier against pursuing an aggressive interventionist policy in that part of the world.

US oil companies acquired the rights to some 75 percent of these new reserves. A major problem, however, was how to transport the oil and gas from the landlocked region. US officials opposed using the Russian pipeline or the more direct route across Iran to the Persian Gulf. Instead, they and the corporate oil contractors explored a number of alternative pipeline routes, across Azerbaijan and Turkey to the Mediterranean or across China to the Pacific.

Much before 9/11, the US and its NATO allies decided to invade Afghanistan - the decision to this effect was taken in Berlin during the joint meeting of Council of Ministers held in November 2000. It exposes the claims of US and coalition partners that 9/11 was the sole reason for invading Afghanistan. The actual cause was apprehension regarding Turkmenistan Gas Pipeline Project in which powerful corporate entities that, in reality, rule US and other capitalist countries, had financial interests.

One theory says it was not the existence of Al-Qaeda in Afghanistan that forced US and its allies to invade Afghanistan but the "financial interests" of US and its allies was the main cause of action.

Behind the occupation of Afghanistan, the real agenda has not been elimination of terrorists, but to secure safe passage for oil and gas supplies. Now negotiations are under way with Mullah Omar with the help of the House of Saud to secure long term benefits - military and financial - for US.

Through military operations in Afghanistan and around Pakistan, US policymakers want to create apparition for powerful re-emerging Russia, oil-rich Iran, democratic India and socialist China.

Obama, like Bush, is irked with our insistence to build the Iran-Pakistan-China gas pipeline. The US successfully managed to force India to accuse us of exporting terrorism as well as betray its earlier commitment for Iran gas project. Washington is always alarmed by any leader's preference for deepening Pakistan-China and Pak-Iran bilateral relations, especially forging nuclear cooperation; and more so when Beijing is offered naval facilities at the Gwadar port on Balochistan's Arabian Sea coast overlooking the entrance to the Strait of Hormuz, a strategic chokepoint through which approximately 30 percent of world's energy supplies pass and Iran's offer of cheap gas.

In the New Great Game plan, the so-called 'defenders of faith' - militants backed by clergy - are allies of late neo-colonialists. They get enormous money and arms from the self-acclaimed champions of the 'free world' to kill their own people and undermine the writ of the government.

Washington, of course, will never be happy with anyone who is determined to steer the ship of Pakistan through the tumultuous waters of unfolding the New Great Game, in which the West - led by the US - is manoeuvring to contain growing Russian and Chinese influences in Central and Western Asia.

The writers are Visiting Professors at Lahore University of management Sciences (LUMS).

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Immediate outcome.

 

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