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money Bumpy
road behind How the world moves, and should issue Ostrich
solution security analysis
Rain
rhetoric
money Pakistan government has recently announced that it will not seek any new IMF loan programme or request extension after its existing loan package ends on September 30. The reasons cited in the official statement say the government has no balance of payments crisis and has enough foreign exchange reserves to continue on its loan payments and other obligations. The decision was stated to be formally announced in the World Bank and IMF’s annual meetings in Washington from September 23-25. This has caused ripples in several circles and generated a mix response. Reports from the IMF reveal that it’s not Pakistan abandoning the loan programme but, in fact, the monetary organisation has refused to continue loan facility for not fulfilling conditions set at the time of loan sanction. Eight out of nine programmes have failed. The decision is significant and will have far reaching effects. It is important to mention that IMF approved a loan facility worth $11.30 billion in 2008, out of which Pakistan has so far received $7.60 billion. The programme was once suspended in 2010 for Pakistan not fulfilling IMF conditions. IMF extended the programme for nine months but Pakistan could not obtain the remaining $3.70 billion. The main bottlenecks between IMF and Pakistan were non-implementation of Value Added Tax (VAT), lack of reforms in the power sector and the ballooning deficit which went up to 5.9 percent, while the mutually agreed one was 4.7 percent. It is important to recall here that IMF Stand-By loan was
meant to enable Pakistan implement a stabilisation programme that envisaged a
significant tightening of fiscal and monetary policies to bring down inflation
and reduce the external current account deficit to more sustainable levels.
The programme sought to address macroeconomic imbalances while protecting the
poor and preserving social stability. Through this loan package IMF wanted a reduction in the fiscal deficit from 7.4 percent of GDP in 2007/08 to 4.2 percent to a more manageable 4.2 percent in 2008/09 and 3.3 percent in 2009/10 — in line what it was in 2003/04 and to a more man through lowering public expenditure, gradually eliminating energy subsidies, raising electricity tariffs by 18 percent and eliminating tax exemptions. The State Bank of Pakistan (SBP) would act on monetary policy to build its foreign reserves, bring down inflation to 6 percent and eliminate financing of the government. Expenditures on the social safety net were to be increased to protect the poor through both cash transfers. What transpired in later years is a story never told publicly. Pakistan signed dotted lines in 2008 without considering the implications of these conditionalities on the country’s’ economy and politics. The elected government in 2008 could not muster enough political strength to implement these conditions in a letter and spirit and defaulted several times. The already impoverished population could not bear the burden of increase in electricity tariff and removal of subsidies from essential public services, hence political government faced a tough test while imposing those conditions under IMP pressure. Pakistan struggled since 2008 to keep its economy afloat with this loan facility but the progress has not been at the desired level and that irked managers at the IMF. The IMF has repeatedly urged Pakistan to speed up fiscal reforms and also issued strict warning on non-compliance. The recent decision will provide the present government a political leverage, especially while the next general elections are near and the ruling coalition needs some face-saving. It will be trumpeted in a totally different manner and will help boost public confidence. The government is saying that it does not face any immediate threat as its balance of payments and country’s foreign exchange reserves position is stable enough, nevertheless the decision would have its own pros and cons. Analyzing the basis of the decision it can be said that fiscal progress in the first quarter of the fiscal year 2011/12 is not that dismal. The current account deficit in this period is narrowed to $189 million, compared with a deficit of $1.016 billion in the same period last year. This was possible due to an increase in exports and a rise in remittances from Pakistanis working abroad and foreign exchange reserves stood at $18.31 billion. It is also ironic that a country that has external debt of $55 billion has individuals with more than $250 billion deposited in foreign banks is called an under-developed country. Other macro-economic indicators also go in favor of Pakistan and can justify such a bold political gesture. There is still skepticism expressed on country’s ability to sustain this policy on a long-term basis. Denying such a loan facility may be a good populist move of the sort government usually tend to make in election years but may not go well with the economic conditions of the country. Facing multiple challenges from a Taliban insurgency to crippling power cuts, rising inflation and balance of payment – there are chances that the country will go back to IMF for another loan program. On average, Pakistan’s GDP has increased annually at a rate of 4 percent between 1972 and 2010. But this increase in the GDP has been very unstable and has fluctuated alarmingly, showing a decreasing trend, especially over the past decade. Natural disaster and mismanagement and missed opportunity of timely rehabilitation of agriculture and industrial sectors have serious economic costs, thus decline in GDP. Budget deficits incurred due to extra burden on economy in post-floods phase is still felt at various levels. In this situation, the government has been quick to cut development spending, but remained on wealth, including on agricultural incomes. Experience teaches that a seemingly “comfortable” cushion of reserves can deplete with alarming speed. The people making these reassuring statements need to revisit the history and try and learn from those episodes. Otherwise, we will be condemned to repeat the same mistakes again. Finally, the elections raise the risk of losing control over the macro-economy, starting with the budget. Nonetheless, Pakistan with its large human capital, agriculture and industrial potential and agriculture base can still recover from losses if not in medium term. There are countries like Indonesia, Thailand, China, Brazil, Turkey, and India that will achieve a growth rate of close to 7 percent this year while Pakistan is still hovering around 3 percent annual growth and 15 percent inflation. Pakistan must learn to manage its public enterprise sector, circular debt problems, and effectively handle energy crisis in order to achieve higher growth. Following footprints of these countries with impressive growth rate requires bold decisions: tax reforms, weeding out corruption from institutions, control inflation, and create investment friendly environment, etc. All these steps are possible through political will and determination. The writer is Deputy
Chief of South Asia Partnership Pakistan and Global Campaigner Bumpy
road behind Pakistan has obtained a total of 18 loans from the IMF under different arrangements, including the existing $11.3 billion of Standby Arrangement (SBA) programme during the PPP led regime but most of them met with failure. The existing SBA programme will repeat the old history as it is going to expire on September 30, 2011 on an unsuccessful note under which Islamabad failed to draw the last two tranches of $3.4 billion. The ongoing SBA programme is another story of failure owing to a variety of reasons, including its inability to pursue crucial structural reforms on revenue mobilisation, and containing fiscal deficit within the desired limits. The last 53 years of history of Pakistan IMF relations show that the democratically elected regimes, most of the time, failed to deliver on improving governance and structural reforms that they committed to the Fund under the performance criteria for obtaining multi billion dollar loans. The dictatorial regimes remained able to draw money from the IMF but it was their failure that the desired reforms to bring sustained changes in basic structure of the economy were not pursued seriously. Pakistan‘s history of using IMF resources can be divided into three distinct phases. In the first period, 1970 to 1988, Pakistan had four one-year SBAs followed by one three-year Extended Fund Facility (EFF). The special characteristics of this phase were (a)
with the exception of two, rest of the SBAs were fully disbursed, (b)
there was little emphasis on structural reforms (except in EFF) and, (c)
repeated approach to Fund resources, in between periods of break. In the second period, 1988 to 1999, Pakistan had both the short term and multi-year arrangements with the IMF. Unlike the first phase, these arrangements emphasized on a variety of structural reforms along with demand management policies. Almost all the arrangements went off-track. As a result, throughout this period, Pakistan was continuously under one or other IMF programme. In the third period, 2000-2004, Pakistan availed one facility of SBA and PRGF each. These arrangements were completed successfully as Pakistan met most of the structural performance criteria. With the recovery from macroeconomic crises, Pakistan exited from IMF programme in 2004. The second IMF programme was signed in 1965 by securing loan of 37m SDRs (Special Drawing Rights). The programme ended on March 15, 1966 in which Islamabad remained successful in drawing the whole amount during the tenure of Gen. Ayub Khan. The third programme under the SBA was obtained by Pakistan on May 18, 1972 by signing loan amount of 100 million SDRs out of which the country had withdrawn 84million SDR till the completion of the programme on May 17, 1973. Pakistan and the Fund signed the fourth SBA programme on August 11, 1974 during the tenure of former Prime Minister Zulfikar Ali Bhutto and that programme ended successfully on August 10, 1974 as Islamabad had drawn the whole loan amount of 74million SDRs. The fifth and sixth programmes were signed by Pakistan during the tenure of ZA Bhutto in 1974 and 1977 and both these programmes remained successful as Pakistan had drawn 75 million and 80 million SDR programmes respectively. During the regime of General Ziaul Haq Pakistan and the IMF signed loan agreement of 1.268 billion SDR on November 24, 1980 out of which Pakistan drew 1.709 billion SDR till 1983. Mohtarma Benazir Bhutto was elected as Prime Minister in 1988 to implement the IMF programme under Structural Adjustment Facility (SAF) that remained successful by obtaining 382 million SDRs till 1992. Islamabad’s economy was facing balance of payment crisis in 1988 after which Pakistan had to approach the Fund for securing another loan programme under SBA for 274 million SDRs on December 1988 but that could not be implemented fully and Islamabad drew only 174 million SDR despite making efforts till November 30, 1990. Pakistan and the IMF signed the tenth loan programme worth 265 million SDR under SBA on September 16, 1993 that ended on Feb 22, 1994 against the actual expiry date of Sept15, 1994 as Pakistan failed to deliver on key performance as conditions were not easy to implement for a democratically elected government. The Extended Fund Facility (EFF) programme was also a failed attempt as Islamabad drew only 123million SDR from 1994 to 1995. Another SBA programme of 562 million SDR was signed between Pakistan and the IMF on Dec 13, 1995 which expired in 1997 as Islamabad had withdrawn only 294million SDRs. Pakistan secured Poverty Reduction and Growth Facility (PRGF) programme worth 682 million SDR on October 1997 and this programme ended unsuccessfully in year 2000. Another programme of Extended Fund Facility also met with failure in 1997 to 2000 when the IMF approved 454 million SDRs but Islamabad withdrew only 113 million SDRs. Pakistan signed another SBA programme on Nov 29, 2000 to secure 465 million SDRs. That programme ended in 2000 as Islamabad implemented all agreed structural performance criteria. Pakistan struck another PRGF deal with the IMF on Dec 6, 2001 by securing a loan of 1.033 billion SDRs and drew 861 million SDR till 2004. Pakistan approached the IMF on November 24, 2008 for signing the 18th programme with the Fund. Initially, the loan amount stood at $7.6 billion but that was augmented to $11.3 billion. The IMF-Independent Evaluation Office (IEO) report suggests that these programmes had limited effectiveness. According to the report, in the first period, 1970-1988, though amounts agreed under most of these arrangements were entirely disbursed, they did not succeed in correcting the underlying imbalances. The second phase, 1988-2000, was even worse compared with the first phase as macroeconomic performance deteriorated and financial imbalances largely persisted. For instance, on average GDP growth fell to less than 4 percent during 1988-2000 from 6 percent during 1970-88 while average export growth was less than 7.0 percent during 1988-2000 from more than 11 percent during 1970-88. Though not covered in IEO report, the third phase, 2000-2004, appears to be more successful compared with the first two phases. The IEO report also points out the major reasons of limited effectiveness of the first two phases. While Pakistan made significant progress in areas like trade, capital and current account liberalization, it could not introduce structural reforms to increase its tax revenue to GDP, which is necessary for longer term fiscal sustainability. Strict conditions are another factor which has limited the effectiveness of these programmes. In particular, implementation of complex reforms (may be necessary for longer term sustainability) was difficult in a short-time frame. For instance, tax reforms, which require parliamentary approval for the given measure, could not be implemented during the programme period. Lack of participation of local experts in the IMF policy formulation also reduced effectiveness of the programmes. Frequent changes in the government in the 1990s also contributed to ineffectiveness. There is a point of view that most of the programmes would have been back on track if there was no disruption of political process.
How the world moves, and should The
Unfinished Global Author: Mark Malloch Brown Price: Rs1650 Publisher: The Penguin Press The Unfinished Global Revolution is penned by an Englishman with a wealth of international experience including the position of deputy Secretary General of the United Nations. His basic premise is that in our interconnected and globalised world of today, the kind of seamless governance offered by an organisation like the UN is pivotal. He extends this argument to ideas on how international collaborations need to be designed in the future to ensure global peace and prosperity. On the surface, Malloch Brown’s arguments are not unique. His text starts from his vantage point at a conference where global leaders have converged to discuss Millennium Development Goals and assess how they can pool resources to raise living standards in the developing world. We are then treated to a sequence of analytical history as the author traces the origins of globalisation, its supporters and detractors as viewed through his career. His tone through much of the book is neutral and offers a surprisingly balanced assessment of the pros and cons of our increasingly interconnected world. But the book really begins to draw you in when he takes us into the innards of institutions like the World Bank and United Nations. There is extant literature available on the successes, shortcomings and vices of these bodies. But this is a rare prism into the inner workings on these platforms from the perspective of a man who understood the machinery extremely well. We are treated to a lucid discourse on the conflicting aims of the IMF and the World Bank, how their leaders are selected and the kinds of internal and external pressures they face across the Atlantic. We are also given insights into the United Nations and the role it played earlier this decade in response to America’s war on terror. At this point the book extends beyond a narrative and we
begin to hear the distinct voice of the author who is fully cognizant of the
shortcomings of global organisations. He now treats us to various arguments
regarding the diminishing role of the G8 and the need to incorporate growing
economies into the decision-making process for the world order. He assesses
the damaging aspects of veto powers in the United Nations and how the concept
is too archaic to have validity in the modern world. There are concrete
suggestions as to how to develop a more balanced platform to improve
communications between all actors on the political stage. The most insightful section of the book deals with the emerging role of non-government organisations as substantial actors. Giving examples of various independent bodies that have led the way in combating landmines, malaria and abject poverty, such as the Gates Foundation and the Clinton Foundation, the author argues that today governments alone are not able to combat the various challenges our world is facing. It is suggested that the kind of global cooperation that is facilitated by NGOs is the key to a future where resources and the best minds must be channeled into solving the most pressing problems of our age. We are treated to an interesting concept where development is not just defined in terms of raising people above an arbitrary income line. In fact, we are encouraged to think of development as the act of providing the billions of this world with more choice in how they manage their access to health, education, energy and other fundamental resources. There is also an effective argument on how the tipping point for development must be provided by the NGOs. The premise is that the NGOs will use their finite resources to introduce creative solutions to developing world problems such as deploying malaria nets, encouraging microfinance and setting up renewable energy. This will serve as a catalyst for governments and larger players to then channel more formidable resources into replicating these game-changing technologies. The book also concludes on a meaningful note. It is argued that politicians today are always under immediate pressure to satisfy citizens at home but future leaders must be judged on their ability to grasp the nuances of contributing to a stable global world order. The global financial crisis is then the final stage used to illustrate the need for better governance on a global scale. When I started reading the book, I thought it might just be a more sober version of John Perkins’ Confessions of an Economic Hit Man — a less theatrical account of how globalisation was unconsciously hurting all of us. But this book is a lot less pessimistic and somewhat more idealistic. It gives us the message that globalisation has by and large been good but more needs to be done to benefit those at the base of the pyramid. And the way to do that is to galvanise people from all corners of the world into one seamless think tank. issue A drive around major cities of Pakistan early in the morning and afternoon is enough to shatter one’s nerves — courtesy heavy flow of vehicles commuting students of all ages from and to home and different educational institutes that seem to have mushroomed in all the nooks and crannies of the cities. The situation in Lahore is very bleak, especially in the morning hours when it seems as if the entire administration is asleep and no such thing as government is in existence. Due to load-shedding many of the signals do not work which causes choking on many crossings. Even the much-needed traffic wardens are missing at this crucial hour. Tempers run high as people attempt to veer in and out of oncoming vehicles from all directions. Reigning supreme are acts of recklessness, violation of law and defiance of norms of traffic. No respect or consideration is shown to students on foot or on bicycles. As it is, our great administrators and planners have
failed to provide decent walkways for the pedestrians who have no choice but
to risk their lives by using roads (constantly being widened in utter
disregard for slow travelers) meant for motor cars. Result? People are
crossing these monstrous avenues from anywhere at any time making matters
worse for everyone. There hovers an atmosphere of hysteria on the roads in
this city. Have our so-called leaders and civil servants ever pondered about this growing menace that is making lives of the city dwellers miserable? Where does the fault or rather criminal negligence lie? Is it in the educational system or lack of efficient public transport system? Permission is being granted right and left to open schools, colleges and even universities without meeting basic prerequisites, e.g. proper location, adequate building and space, transport facilities for students — what to talk of educational standards. Instead of each residential area having its own large public school catering the need of entire community, many private ones are allowed to be opened in the same vicinity, sometimes in tight enclosures totally unfit for housing children. No consideration is given to residential areas nor is privacy of others respected. To make matters worse, every child is being driven to and from school instead of there being a good, reliable and decent transport system provided by these schools. The principal of a leading school system, when questioned on this aspect by us, claimed that parents were reluctant to send their children on vans and buses as they feared for their safety. Besides, they did not want to subject their babies to waking up early to catch the bus or to arrive home late in the afternoon. Remarkably, these parents confidently shove their offspring in expensive cars, in the hands of untrained and uncouth drivers who are a constant source of many fatal accidents. T We are wasting huge foreign exchange on oil import due to absence of public transport system. In the first eight months of 2011, oil import bill of Pakistan increased by 28 percent as compared to the same period last year. Estimated oil import of $14 billion this year will be the single largest burden on foreign exchange reserves. Official data suggest that in the next three years, total import can reach $18 billion. The official quarters admit that though oil consumption has declined in the recent years due to poor economic performance, still it accounts for over 31 percent of the total energy consumption. More cars on the roads — 35 percent sale rise reported by local car manufacturers in the last fiscal year — due to absence of public transport system is creating havoc with traffic and putting unbearable burden on the national exchequer due to ever-increasing oil import bill. It is high time the government discouraged use of luxury cars by levying carbon tax and simultaneously established a reliable and efficient public transport system in all cities. For big cities like Karachi and Lahore mass transit is the need of the hour which can easily be provided by inviting international companies to bid on Build-Operate-Transfer (BOT) basis. India has successfully done it and details are available at http://morth.nic.in/writeread data/sublinkimages/268.pdf. It will cost nothing to the federal or provincial governments but would provide the people much-needed transport facility dissuading use of cars and wasting billions of dollars on import of oil. Something would have to be done soon before it is blown completely out of proportion. To begin with, an immediate restriction should be placed on opening schools, especially in those areas where there already exist sufficient number. Owners of those institutions opened in self-owned or rented residential houses should be given an ultimatum to move to properly built complexes or face closure. Prospective applicants for new schools should be forced to not only make customised buildings but also arrange transport facilities for their students to reduce unnecessary traffic. They must also ensure that at least 60 percent of their total enrolled students avail this facility. A more sensible approach for parents should be to get their children admitted to schools within their vicinity instead of crossing the city from one end to the other. Of course, this is directly related to the standard of education of institutes available in their close proximity. Here again, the government is to be blamed as they have failed to establish a viable educational system or ensure a uniform curriculum in all institutes of equal standing. Since one thing is dependent on the other, it goes to prove how incompetent and inefficient our policy-makers have been in creating a healthy and educated society. Traffic mayhem during the time when aspiring knowledge seekers are headed to their alma maters, speaks volumes about the level of consciousness that these institutes have inculcated in this nation. The writers are
visiting Professors at Lahore University of Management Sciences (LUMS).
Ostrich
solution Food inflation is on the rise and prices of protein-rich meat have increased exponentially over the years, making even once-a-week consumption hard to afford for many. Pakistan’s government and some individuals have initiated a debate about the promotion of ostrich farming. The ostrich meat is halal, can be consumed locally and exported as well. Other parts of the bird also have a market and required as raw material for different industries. Raja Tahir Latif, owner of Karachi-based Pakistan Ostrich Company, tells TNS that his company took the initiative and successfully experimented with ostrich farming. He started his business at a small scale and imported a few ostrich chicks in 2002. Initially, he faced a lot of problems but he did not lose hope. Before he set up his business, three Pakistani companies had ventured into this field and all of them had to wrap up soon afterwards due to losses they faced. South Africa enjoys a near perfect monopoly over ostrich farming as a huge population of this bird exists there. The country does not sell eggs or chicks to any other country but exports precious ostrich leather to the world. A female ostrich lays only 5 to 8 eggs Australia on an average, however, in Pakistan conditions are more conducive and the number of eggs laid by a bird is 50 to 70 for the same period. Right now, Australia, New Zealand, Belgium, Jordan,
Indonesia, India, Bangladesh and other European countries are concentrating on
farming of this huge bird. Saudi Arabia, Iran, Iraq and Israel are the export
markets for the produce. Iran is world’s third largest importer of ostrich
products followed by Israel. Tahir says he arranged seminars throughout the country to increase awareness about Ostrich farming but the biggest support came from the mass media which introduced the concept to every nook and corner of the country. The response has been good as more and more people are gathering information about the project and coming rapidly in this field. Punjab is the province which has the most favourable weather conditions for ostrich farming. So far, 20 big and small ostrich farms have been set up in the country and the cumulative target of the farmers is to have the number of birds in excess of 10,000 by the end of the year. Tahir believes Zarai Taraqiati Bank Limited (ZTBL) can boost the sector’s growth by offering easy loans to ostrich farmers and the Wild Life Department by waiving off fee of Rs5,000 on every chick. It treats the bird as a wild animal and not a people-friendly industry. If the Wild Life people do not lift this fee, those associated with this business will approach the Supreme Court of Pakistan (SCP), he vows. He shares that there are approximately 7,000 poultry sheds in Punjab. If every farmer decides to take only 10 ostrich chicks at his farm as part of a pilot project, the results can be phenomenal. Satellite farms involving a collective investment of 8 to 10 investors are also a good option, especially when it’s difficult for an individual to raise enough money to go ahead with the project. The leather industry will also find a new raw material provider. Ostrich farming is highly viable for the reason its weight-to-feed consumption ratio is very high. It gains 100 kg by eating only 400 to 500 kg of food and is ready for consumption between the ages of 10 months to 18 months. A cow has to consume three times this amount to gain 100 kg meat on its body. Experts have identified places like Thatha, Thal, Layya, Bhakkar, Mianwali, Chakwal, Bahawalpur and Multan where farming can prosper and suggested to the government these areas should be declared ostrich zones. Assistant Director, Technical, Punjab Livestock Department Dr. Najeeb-ur-Rehman believes that Ostrich is purely a poultry item which is free from diseases and the biggest “meatable” bird of the world. The government must establish a separate department for this purpose. Raja Umar Sultan, a farmer and head of operations at Muflihon Ostrich Company says they are coordinating with the livestock and wildlife departments in their struggle to promote ostrich farming in Pakistan. He says the Wild Life department director general has assured them that he would convince the government to waive off Rs 5,000 fee. Another important development, he says, is that Dr Nawaz, the vice chancellor of the veterinary university in Lahore has established a committee on ostrich farming, comprising of six members with experience in poultry industry, nutrition studies, diseased diagnostics and business management. Ostrich farming will also be taught as a subject on a regular basis and the first batch will start getting this education from Oct, 2011. Usman says they have imported hatchery machine worth Rs 4 million and prepared a summary in which they have sought some exemption and incentives from the government. A complete summary will soon be sent to the Punjab Chief Minister. He adds that a veterinary doctor with special interest in ostrich farming is also doing an M Phil in Pathology from the university as bio-security is very important in this field. Raja Tahir of Pakistan Ostrich Company says he has orders from Pakistani hotels and restaurants that want to serve ostrich meat as a delicacy and are ready to pay Rs1,000 to Rs 1,500 for one kg of ostrich meat. “But we can’t sell it as we do not have stock at a mass scale. It’s quite likely the price of ostrich meat, which tastes like deer, will become lower than mutton price once a minimum threshold is reached. Ostrich feathers are used in cleaning electronics and sensitive instruments due to their capability of attracting even smallest dust particles. They are also used in manufacturing ladies hats and dresses. Ostrich oil is used in pharmaceutical industry. Its egg weighs between one to three kg and it is equivalent to 24 hen eggs. Ostrich eggs are tastier than hen eggs and free of smell. One ostrich egg is enough to prepare 24 ordinary-size omelettes. The shells of ostrich eggs are too hard to break and are sold in market for decoration. stariqiqbal@gmail.com
security Our Foreign Minister, Hina Rabbani Khar, has warned the United States that if the accusations against Pakistan continue, the US might lose an ally. This statement comes in the wake of US statements that Pakistan-based Haqqani network has allegedly been involved in recent acts of terrorism in Afghanistan, directly threatening and sabotaging the NATO and US interests. The US blames the Haqqanis for attacks on the US Embassy
and NATO Headquarters in Kabul; for attacks on US troops in Wardak province
earlier in September. US Chairman of the Joint Chiefs of Staff, Admiral Mike
Mullen has used unprecedented and strong language against Pakistan’s premier
spy agency ISI and the security establishment for nurturing proxies.
Pakistan-US relations just as they were about to look better are perhaps today
at a nadir in the decade old war on terror. The US Senate Appropriations Committee has passed a bill which makes all US aid to Pakistan tied to cooperating with the US in fighting “the Haqqani network and other terror groups associated with al Qaeda”. On the Pakistani side, a vast majority of Pakistanis support a confrontational policy and shunning “America’s war”. This emotional position needs a realistic reassessment and Pakistan simply should keep its economic interests above everything. At the same time, we should reflect as to why the Haqqani Network from North Waziristan has been operating across the Durand Line. Sixty years of policy choices have once again brought us to a critical phase today. The United States and its various policy making arms and bodies have diagnosed the key cause of their failure in Afghanistan as Pakistan’s support to the Taliban, especially the Haqqani network that it protects. This is not the first time that the US has complained and thundered about the ‘double-game’ being played by Pakistan’s security establishment. The problem with such a narrative is that it glosses over the monumental follies of US strategists and war machines. Since the invasion of Afghanistan in 2001, the US has
received substantial assistance from Pakistan. This fact cannot be denied as
most of it is documented and record. Whether it is allowing for NATO supply
routes to the war zone or the crackdown on Al Qaeda, Pakistan has delivered on
several fronts. Therefore, narrowing the current rhetoric and reducing it to
Pakistan’s culpability is neither accurate nor fair. What the US
establishment has not recognised thus far is the central issue of Pakistan’s
desire to have a neutral if not a friendly Western border. The US endgame in Afghanistan that has begun now, for understandable reasons, keeps the US interests above everyone else. In a similar fashion, Pakistan’s military-intelligence complex for historical reasons does not want to be encircled by India on both the sides. Yes, it is quaint, 101-type thinking but what can be done about it. Military paradigms and institutions do not change overnight or even in a few years. Institutional change needs generations and endemic political movements to change the way state operates. The tragedy of Pakistan is that its civilians are almost always willing to be in bed with the khakis and ready to be second in command even when they are in the enviable position of effecting a change. Take the case of recent backlash against the security establishment after May 2, 2011 strike on Osama Bin Laden’s compound. The public opinion while enraged at the US’ breach of the imaginary ‘sovereignty’ was equally embittered about the incompetence of our armed forces. Never has the Pakistan military been in such a defensive position at the domestic front. Yet, the ruling coalition did not seize the moment to sort out the long-standing issue of civil-military imbalance. The opposition party, Pakistan Muslim League (Nawaz) called for military accountability but it is far from certain if it would have collaborated with its arch-rival, Pakistan People’s Party to effect any structural changes. The last time PPP undertook a few steps to reorient the Inter Services Intelligence (ISI), it received zero support from other parties. Ironic as it may sound, Pakistan’s grandiose foreign
policy ambitions — checking the big neighbour India, strategic depth in
Afghanistan, attainment of nuclear weapons — were all laid out by the hugely
popular Zulfikar Ali Bhutto. Since the 1990s, the political parties have
changed track and now articulate for a far more realistic foreign policy but
they are sufficiently disempowered to translate that into reality due to might
of the military and the way the latter has the ability to garner the support
of other unelected institutions such as the judiciary and the media for its
‘line’. Therefore, to expect the military paradigm on Afghanistan to change anytime soon is a little less than fanciful. It will not give up its space under the sun, unless of course it risks a huge reduction in its primal position within the country and its strategic leverage in the region. Thus, the choice is hard and if the US is serious about getting a fairer deal for all parties, it will need to examine this issue and bring all parties on the table, i.e. Afghanistan, Pakistan, India and Iran. Short of a regional solution sustainable peace cannot be achieved in the region. Coming back to short-term prospects, the situation is grim. Pakistan’s security establishment has been fighting Pakistani Taliban in Swat and parts of FATA; and has been at best ambivalent about the Afghan Taliban, including the infamous Haqqani network that according to media reports has been operating from Pakistan. Pakistan’s military should also review the Taliban rule in Afghanistan and how they were not always the kind of partners and proxies we had envisioned. Supporting extremist ideologies at home and abroad is outright dangerous. This is not the Pakistan of 1990s. Two decades later, we have a far more polarized polity with Al Qaeda’s local allies in large numbers. Al Qaeda’s nihilistic ideology, it should be remembered, is against the organisation of Pakistani state itself. How would Pakistan’s security establishment wield power in the absence of a functional state? Time and again, its capacity to manage domestic affairs has been exposed. Furthermore, national security doctrines cannot play out in a cash-strapped country struggling with stagnation and hyperinflation. During the last decade, Pakistan received assistance worth $20.7 billion out of which $14.2 billion went to the military. The civilian share was around $6.5 billion. Under the Kerry-Lugar-Berman aid legislation, Pakistan was to receive 1.5 billion every year but the actual disbursement has been around $480 million for the past two years. It is for Pakistan to see if it wants to choose a path of isolation and hand over the country to Al Qaeda and its affiliates, thereby putting our long-term future at stake. Or it would adopt a realistic path where it can keep its national interests above everything yet acting as a responsible member of international community. The writer is a policy adviser based in Lahore. His writings are
archived at www.razarumi.com. Follow him on Twitter: @razarumi
analysis As Washington ratchets up the pressure on General Headquarters (GHQ) to take action against the almost mythical Haqqani ‘network’, typical reactions are set to intensify on both sides of the political divide within the country. The mullah-haters will add their voices to the ‘do more’ chorus, while the America-haters will rant and rave about the conspiracy being hatched to undermine the Pakistani army. Both sides continue to locate their politics outside of the larger (admittedly messy) politico-economic matrix that structures the unfolding New Great Game in the region. The fact of the matter is that the much-hyped Afghan peace process is no closer to producing the desired outcome than a couple of years ago when it is reported to have been initiated. The American occupying forces remain mired in a conflict which has no foreseeable end. The Karzai government is tainted by unholy alliances of all kinds which have brought it into conflict — mostly latent — with just about every other major actor involved in Afghanistan. Continuing to project the notion that dismantling the Haqqani ‘network’ — whatever is meant by the term ‘network’ — will magically transform Afghanistan and the wider region into a haven of peace is an example of spin doctoring at its worst. The implication of the overwhelming emphasis on the Haqqanis is that there is no other regional power involved in the Great Game, or at the very least that everyone else — which means China, Russia, India and Iran — has already bought into the prospective post-withdrawal plan and Pakistan is the last remaining stumbling block. There is, to be sure, no evidence to suggest that such a grand consensus has been reached, or that a plan to secure a regional agreement on Afghanistan even exists. Having said this, noone should doubt that our great
uniformed guardians continue to place certain militant groups — including
the one led by Sirajuddin Haqqani — at the centre of their grand strategy to
acquire regional power and influence. Even supposedly liberal members of the
policy elite without any overt link to the Pakistani military continue to
think about Pakistan’s interests in relation to India. Accordingly, the
nuanced version of the prevailing foreign policy narrative hints at the
necessity of continued support to selected non-state actors until the
ever-present threat of Indian hegemony is credibly eliminated. It is incredible that the America and India-haters still see the region and world in such simplistic terms. I am an anti-imperialist, and am continually on the lookout for individuals, groups, movements and countries with whom alliances can be built in the struggle for a just world. But those who proclaim the sanctity of our military establishment and decry the machinations of American and Indians (both of whom are apparently in concert with the Jews) continue to profess blind faith in the binary logic that has gotten us into the intractable quandary that we find ourselves in today — Pakistan is a monolith, as is India, as is America, as is every other country in the world; those who are not with Pakistan are against it. In this narrative, the many destructive fallouts of the state’s known patronage of non-state actors such as the Haqqani ‘network’ are conveniently ignored. This policy has had an impact on Pakistani society that can not be understated. Yet the America and India haters’ worldview is so warped that they refuse to see the writing on the wall. Perversely, they regularly attribute wanton acts of violence perpetrated by the Lashkar-e-Jhangvis of the world to the proverbial ‘foreign hand’. Attacks such as the one on Hazara Shi’as on their way to Iran from Quetta this past week are explained as the work of RAW, Mossad and the CIA because no Muslim could possibly commit such gruesome crimes against other Muslims (I suppose this problem can be countered by Lashker-e-Jhangvi &co. by simply stating that Shi’as are non-Muslims). The mullah-haters in our society are prone to analyses and ‘solutions’ that are no less problematic than those proposed by the America and India haters. Just as Afghanistan will not become peaceful if the Haqqani ‘network’ is wiped out, religious radicalism is not the only problem that confronts Pakistani society. All will suddenly not be well if mullahs are eliminated from the scene. A slightly more sophisticated segment of the mullah-haters suggests that Muslim societies are in dire need of a Renaissance similar to that which spread through Christian Europe six hundred years ago. The ensuing period of Enlightenment will set us on the way to a modern, rational future. Such arguments are stunning for the lack of understanding they betray about the history of human societies, and in particular the dramatic differences between societies in the pre-modern and modern eras. I have no problem with the notion that there is a need to learn from the history of Western societies, or that comparative study of societies is essential to understanding and bettering the human condition. But surely our mullah-hating intelligentsia need to come to terms with our own history, the manner in which we have been incorporated into the capitalist-world system, and the multiple faultlines that run right across the length and breadth of this society. Pitching an historical re-run that is never going to happen reflects political and intellectual weakness of the most debilitating kind. In a nutshell, hating America, India, mullahs or anyone else for that matter does no good to us or our neighbours. It goes without saying that the American Empire cannot be trusted to serve the Pakistani public interest. But it also goes without saying that the geography of this region is not going to be altered so dramatically that we can afford to continue perceiving India, Afghanistan or any of our neighbours as perennial ‘threats’. On a slightly different note, I wish there were more engaged individuals in this country that actually bothered to understand the changes that are taking place in our society. Much of the analysis of the New Great Game is speculative, and based on assumptions about the motivations of those in the corridors of power. Let us not forget that these high elites spend much of their time trying to manipulate the behaviour and perceptions of ordinary people. And the conglomerations of ordinary people that we call society are constantly in flux. If we paid more attention to social change, we might be able not only to better understand the operation of power, but also how to develop challenges to it. Neither the mullah haters nor the America haters seem to be bothered with this most pressing of tasks.
Rain
rhetoric Many laughed it away when a couple of years ago climate change gurus professed that Pakistan would be one of the most vulnerable countries to the impacts of climate change. Recent floods in Sindh and Balochistan did prove that seasonal variations due to climate change may not be ignored any more. There is a visible change in rainfall pattern in Eastern Sindh. The average annual rainfall in district Badin used to be 120 to 280 mm. During the last few years, it increased to 440 mm, 560 mm, and this year Badin received a record rainfall of 1100 mm. The increase in average annual precipitation is also observed in Rajhisthan as well. One may say that weather changes due to seasonal variations are bound to happen. Natural calamities are hard to avoid. However, as I keep on repeating, a right set of policies and actions on those policies can stop getting the natural calamities turning into human disasters. Meteorology department had already predicted about the possibility of sporadic rains in Sindh during the months of August/September. We also knew that like most parts of the country irrigation infrastructure that got damaged during last year’s flood has not been repaired to take care of more water. The flaws of controversial left bank outfall drain (LBOD) are already known to us. LBOD was designed for saline water drainage only when the average yearly rainfall in Sindh never exceeded 280mm. Its carrying capacity is 6000 cusec ft. The rainwater is simply beyond the carrying capacity of LBOD. Even if it were not recent heavy rains and there were no design flaws in LBDO, the mere fact is that drain was blocked. There was no silt removal from the drain for ages. There was no unhindered flow of water in that drain anyway. Badin is dead flat almost at sea level where the flow of
standing rain water to sea would be a problem due to lack of natural flow.
Things are getting further aggravated due to Kirther range (hills and
elevations) from Khairpur to Hub. There can be at least four small hydel dams
in that range. Rain water from Kirther range, coming towards lower Sindh, has
the tendency to turn into flash floods. Flash floods are very common in Balochistan too and this year again they have displaced a sizeable population in Balochistan, especially in Naseerabad district. Why is the NDMA not paying any attention to the flood affectees in Balochistan? Unfortunately, despite the devastated floods of last year the government is still unable to come up with its flood policy and flood zoning. There is a big question mark on coordination of relief activities. NDMA is there but provincial and district disaster management authorities are non-existent. The later two were supposed to frame disaster management plans at district level. Obviously, when the institutions are not functional, the plans are not there either. Initially, when the rains started everyone undermined their intensity and the government very clearly declared that it would not go to international community for a flood relief appeal. However, this appeal had to be made at later stages. As was expected, the response of international community is quite cold: partially because they face disaster fatigue in Pakistan. Unfortunately, Pakistan is facing disasters in a close succession since 2005; earthquake, Balochistan floods, internally displaced people of Swat, last year’s floods and now floods again. Thanks to the lack of preparedness on our part, we are gradually losing sympathies of the international community. Another factor responsible for cold response from the international community is lack of a meaningful effort on government’s part to highlight major success stories in previous disasters. There must have been some good examples that may be shared with the rest of the world, showing how resilient we are. International community is also blank about individual and private charity. What to talk of contribution of individual donors, the international community is not properly aware of the role that organisations like Edhi Welfare Centre have played in relief and rescue efforts. All these efforts should be highlighted to prove that we the 180 million commoners are not beggars. INGOs are also not able to deliver this time. There are visa restrictions on expatriates of various INGOs. If they do not come to Pakistan on an assessment mission how can they mobilise their humanitarian wings to deliver in the time of need. One thing that concerns me most is that we have started tackling disasters at provincial level too. Dengue fever is supposed to be the problem for Punjab only and floods are only to be taken seriously by Sindhi politicians. I wish we could rise above these provincial prejudices and support the people in disaster. Finally, I would again mention lack of effective policy responses. I remember that last year former advisor to CM Sindh made this excellent suggestion that opportunity should be availed to “rebuild better” the scattered goths of Sindh. His suggestion was that three to four hundred basic houses should be constructed in an elevated place in each deh (comprising of few goths). Inhabitants of small hamlets in Sindh should be settled in those newly constructed houses. This would have been cost-effective not only from disaster preparedness point of view but also from service delivery point of view. However, two feudal lords (parliamentarians) in that meeting strongly opposed that idea, partly because they had the fear to lose their control over their tenants. I wish if Premier Gilani had not tried to gain political popularity through promising to dole out money via Watan Cards. He never had the fiscal cushion to pay the promised 100,000 rupees and that scheme is literally abandoned after release of first installment of Rs20,000. The same amount could have been more wisely spent. The writer heads Sustainable Development Policy Institute and can be contacted at suleri@sdpi.org
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