analysis
Are we all Pakistanis?
If we demonstrated the same sense of collectivity and urgency on matters that threaten the social fabric of this country as we did on Wednesday for our cricket team, we would be doing
ourselves and our future generations a big favour
By Aasim Sajjad Akhtar
So the so-called ‘mother of all cricket matches’ is over. And our team lost. I had wondered in advance of Wednesday’s game what kind of reaction would follow an Indian victory. And I have been pleasantly surprised. There has been no fury, no burning of effigies, and no more than a handful of voices bellowing the proverbial ‘it was all fixed’ refrain. There is the inevitable disappointment -- annoyance even -- at the fact that our players contributed to their own demise, but no outrageous reaction.

firstperson
“Re-elections cannot be ruled out”
PML-N is against any extra-constitutional role of the army and would resist it
By Waqar Gillani
An MA in Philosophy from the Punjab University (1974-75), Pervaiz Rashid joined politics as a student against Ayub Khan’s military regime and was President of National Students Federation (NSF), Punjab chapter in 1960s. A great admirer of Zulfikar Ali Bhutto and a worker of the PPP, Pervaiz eventually left the PPP’s ranks when Benazir Bhutto assumed leadership of the party after Bhutto was sent to the gallows. After turning to business for a few years, he joined the PML-N in 1993 and became Senator in 1995 and chairman of the PTV. Pervaiz went into self exile after General Musharraf toppled the PML-N government in October 1999. He made a comeback on the political scene after his party’s leadership decided to rejoin the political process. Besides being a Senator, Pervaiz is also spokesperson of the Punjab government. The News on Sunday interviewed him in his office at the Chief Minister’s House in Lahore. The News on Sunday (TNS): How do you see the current political situation?

A sapling of hope
Pakistan and Indian leadership should keep discovering the great potential of peace and stability
By Dr. Abid Qaiyum Suleri
“We are planting a sapling of hope, sapling of peace. Let us pray that this sapling would grow into a strong tree that may spread its shade across the India-Pakistan border”, said Mr. Kuldip Nayar, peace activist, veteran journalist and former member of Indian Rajya Sabha while planting an Oak sapling in Art and Craft Village Islamabad last week.
Mr. Nayar, leading an Indian peace delegation, has been spreading the seeds of peace and mutual trust across the border for over last five decades now. His efforts are being reciprocated by quite a few (especially by members of civil society organisations) in Pakistan too.

money
Daunting data
A look at economic figures showing performance of government during the last three years
By Hussain H. Zaidi
It is three years since the PPP government came into power. The economy offers a credible yardstick to assess the performance of a government. How has the PPP government fared on the economic front? How has it responded to the major economic challenges facing the country? These are some of the important questions. Before we examine these questions, it seems in order to outline the state of the economy when the government took office.
The last five years of the Musharraf era (October 1999-March 2008) are generally touted as a period of economic boom characterised by robust economic growth, stabilisation of the exchange rate and record increase in workers’ remittances and foreign direct investment (FDI). Between the Fiscal Year (FY) 2004 and FY08, the economy grew at 7 percent per annum on average -- though during the FY08, growth rate fell significantly to 3.7 percent.

Investing in the youth
Pakistan’s 100 million-strong youth need to know that future’s weight is squarely upon their shoulders
By Saud Masud
Pakistan’s pulse may suggest the country is heading towards a social, political and economic coma. There is a school of thought that believes the smart and able leave the country, leaving her to the incompetent. Some observers give Pakistan between 3-5 years’ survival, others are generous enough to give 10-15 years more.
So what to do now? A reasonable option, to some, would be to polish up our kids’ English language skills in order to give them chance for a visa at a foreign consulate. Another option is to get lost in the mindless media and drawing room rhetoric and talk about all that is lost in hopes for an accidental catharsis.

education
Odd one out
Is it a prudent decision to devolve the HEC without taking into account current
practices of the developed and developing states?
By Aamir Hakeem
The Implementation Commission has finally decided to devolve Higher Education Commission (HEC) to provinces despite the fact that it exists in the federal legislative list. Is it a prudent decision to devolve an institution without taking into account the current practices of the developed and developing states, achievements of the HEC and the pros and cons of the devolution?
HEC, formerly known as University Grants Commission, was established in 2002 with a mission to facilitate Institutions of Higher Learning to serve as engines for the socio-economic Development of Pakistan. This centralised body brought a number of policy reforms in the system and has a long list of its achievements. The scholarship schemes, Quality Assurance of Higher Education, Revision of Curriculum, Research and Development initiatives and Technological Reforms i.e. Video Conferencing facilities in the universities, Campus Management Solutions and Pakistan Education & Research Network are the major initiatives of the HEC.

Where do we stand?
An attempt to understand the link between concepts of sovereignty and democracy
By Salman Abid
According to dictionary, sovereignty is “the supreme, absolute, and uncontrollable power by which an independent state is governed and from which all specific political powers are derived; the intentional independence of a state, combined with the right and power of regulating its internal affairs without foreign interference.” Sovereignty and democracy are, of course, inter-linked. 
The talk of the town these days among the political intelligentsia is the task of strengthening democracy in Pakistan. In comparison with other systems of government, democracy is proved to be the best system of governance the world over.

Killing in Karachi
A political consensus backed by mass support of ordinary people shall be the first building block towards a preventive mechanism
By Dr Noman Ahmed
Killings of innocent citizens have destroyed the peace of Karachi for several weeks now. These incidents have many factors in common. Attackers come well-prepared and informed about the target. They are skilful assassins who are trained to disappear after completing their heinous missions.
Locations are mostly places where turf wars have been raging for several years. Orangi Town, Qasba Colony, Gulistan-e-Jauhar, Khwaja Ajmair Nagri, Kutti Pahari (at the confluence of North Nazimabad and Orangi/Qasba belt), Korangi, Landhi, and many other similar places have been gripped by fear due to the ongoing ‘kill and run’ incidents.

 

 

analysis
Are we all Pakistanis?

By Aasim Sajjad Akhtar

So the so-called ‘mother of all cricket matches’ is over. And our team lost. I had wondered in advance of Wednesday’s game what kind of reaction would follow an Indian victory. And I have been pleasantly surprised. There has been no fury, no burning of effigies, and no more than a handful of voices bellowing the proverbial ‘it was all fixed’ refrain. There is the inevitable disappointment -- annoyance even -- at the fact that our players contributed to their own demise, but no outrageous reaction.

Some weeks ago after Pakistan’s debacle against New Zealand and the subsequent fallout, I had written on these very pages that Pakistanis need to demonstrate more dignity in their support and criticism of the cricket team. I also noted that we needed to take a leaf out of the Indian book -- that our neighbouring fans were more measured in their criticism of their team, and definitely more united in support of it. Most importantly, I argued that our India-obsession needed to be put to bed, and suggested that Indians were a lot less preoccupied with Pakistan than we are with them.

It would be remiss of me to ignore the fact that the Indian media outdid its Pakistani counterpart in drumming up jingoism in the lead-up to the match (and, incidentally, in its aftermath as well). And Pakistanis -- if not our media -- have taken defeat quite graciously; while many of us still find it difficult to shake our India-dislike (hatred would be too harsh a word), there are at least some others who are willing to acknowledge the merits of India’s cricketers without bringing politics into it.

In sum, one could argue that I jumped the gun and made Indians out to be far more accommodating than they really are, whilst simultaneously exaggerating our own jingoism. I am not sure that a hyper-nationalist Indian media necessarily represents Indian public opinion (just the same way as our media forges rather than represents public sentiment in this country). My sense is that most cricket fans -- both in India and Pakistan -- do not foam at the mouth at the mention of the ‘other’.

So, what I am willing to reconsider is my rather pessimistic view of how Pakistanis related to Indian success -- both before we played them and after the match was over. In major cities at least, Pakistanis came together as the World Cup proceeded in a reasonably well-meaning display of unity, which has not been seen in this country for some years. The focus appeared to be on supporting Pakistan rather than wanting India to lose. I am not convinced that those who forge public opinion in this country would not have made hay about beating India and invoking all of the usual symbols (of religion, etc.) that come with hyper-nationalist sloganeering, but this should not take away from the fact that it was a welcome change to see people coming together to celebrate their shared identity together.

This is precisely why it is important to test just how enduring our sense of togetherness is by reminding ourselves of the grave challenges we do face to this collectivity called Pakistan. On the same day as the cricket game, yet another high-profile Baloch student activist was found mutilated in Turbat, thus sustaining the average of 8-10 bodies recovered every week since October of last year. In other words, the same day that many of us came together as Pakistanis to cheer on a team that represents us on the world stage, hundreds of thousands, if not millions, of ordinary people in Balochistan -- also Pakistani, mind you -- were in an emotional state suspended between anger and grief.

The methods of those abducting, torturing and killing these young Baloch are becoming increasingly gruesome. And the reaction is becoming ever more acute -- non-Baloch throughout the province have gradually become extremely insecure as dozens of high-profile ‘settlers’ have faced the full fury of what can only be called retaliatory violence.

Many Baloch political activists actually argue that the killing of ‘settlers’ is the work of the same secret agencies that have unleashed a systematic reign of terror against Baloch activists struggling for their rights. The objective: to exacerbate the already tense situation within the province along ethnic/sectarian divides. Regardless of who is behind the targeting of ‘settlers’, there should be no doubt that those of us living in major urban centres in Punjab and elsewhere in the country need to speak up about the unspeakable crimes being committed against ordinary Baloch now. International media correspondents have recently covered the situation in Balochistan and noted, as a Guardian exclusive does, that even otherwise well-informed Pakistanis outside Balochistan are almost oblivious to the ‘secret, dirty war’ being conducted by the Pakistani state within its own territory.

Once upon a time it could be argued that this lack of information reflected the deliberate censoring of news on Balochistan by the print and electronic media, and that, to some extent at least, the intelligentsia and informed citizenry in Punjab and other parts of the country were prevented from knowing about what is going on. I personally am not convinced by this line of argument, and presumably many others like myself were not convinced in 1971 when too many ‘progressives’ remained silent at the military onslaught against Bengalis, preferring to note only that Biharis were being targeted by Bengali nationalists.

In any case, the internet -- and so-called social media -- has very quickly become the primary source of information for many educated Pakistanis. There is censorship of internet material as well, but the extent to which the state can prevent the free flow of information on this medium is severely limited as compared to traditional media outlets. Many of those flying their Pakistan flags on the streets on Wednesday have access to social media sites, are likely aware at least in some measure of the rapidly deteriorating situation in Balochistan, and could influence the public discourse on the Baloch question dramatically by simply coming together and calling a spade a spade.

In short, if we demonstrated the same sense of collectivity and urgency on matters that threaten the social fabric of this country as we did on Wednesday for our cricket team, we would be doing ourselves and our future generations a big favour. There is a real danger that the refrain of many angry Baloch youth that all non-Baloch are their enemies becomes a self-fulfilling prophecy. The onus is on us to prevent this from happening. It is as simple as recognizing that the spirit that was on show in the lead-up to Wednesday’s game needs to pervade our attitude towards all dimensions of Pakistan’s body-politic. Obviously, supporting cricketers is much easier than speaking up against state repression, but I am not sure that there is that much difference after all. If we are all Pakistanis, of course.

 

 

firstperson
“Re-elections cannot be ruled out”

An MA in Philosophy from the Punjab University (1974-75), Pervaiz Rashid joined politics as a student against Ayub Khan’s military regime and was President of National Students Federation (NSF), Punjab chapter in 1960s. A great admirer of Zulfikar Ali Bhutto and a worker of the PPP, Pervaiz eventually left the PPP’s ranks when Benazir Bhutto assumed leadership of the party after Bhutto was sent to the gallows. After turning to business for a few years, he joined the PML-N in 1993 and became Senator in 1995 and chairman of the PTV. Pervaiz went into self exile after General Musharraf toppled the PML-N government in October 1999. He made a comeback on the political scene after his party’s leadership decided to rejoin the political process. Besides being a Senator, Pervaiz is also spokesperson of the Punjab government. The News on Sunday interviewed him in his office at the Chief Minister’s House in Lahore. The News on Sunday (TNS): How do you see the current political situation?

Pervaiz Rashid (PR): The current political instability is because of the ruling Pakistan Peoples Party’s delaying tactics in bringing about reforms, honouring commitments, and improving governance. The delay in passing the Eighteenth Amendment and, earlier, in the promised restoration of the deposed judiciary are clear examples. The PPP tried to validate the Dogar courts but the PML-N believes that democratic norms should have been respected and after fulfilling those commitments there should have been focus on good governance and resolving the crises like economy, energy and water shortage, etc.

Opposition parties, especially the PML-N, have always extended a hand of cooperation to the government in dealing with the crises and pushing the ruling federal party to honour its commitments. Country’s crisis is increasing day by day. If we had worked to improve the industrial sector in the past three years we would have saved billions of rupees and controlled the budget deficits of Rs500 billion. The Federal Board of Revenue is still not able to collect all target taxes. We could have controlled deficit and improved economy and governance. People are dissatisfied. How can they be satisfied when they have problems of electricity and gas load shedding?

TNS: But people do not seem happy with the PML-N’s provincial government in Punjab either. How do you respond to the criticism at the PML-N’s performance in Punjab?

PR: You cannot work in isolation in Punjab. There are many things in which provinces need cooperation from the federal government. No province can work properly unless it has full cooperation from the federal government. I give you one example. The Punjab government wanted to tax luxury cars but the federal government did not support us and the people started registering their luxury vehicles with other provinces and Islamabad and the Punjab government lost its tax targets. I think people have registered their protests against governments in other provinces. Non-cooperation and hurdles also affected Punjab government’s performance. But, despite all odds, the Punjab government has started a number of mega projects in health and education sectors in the province. We are happy to claim that PML-N’s Punjab government is a corruption-less government and gradually moving forward. The Punjab government has invested Rs5bn in computer education and billions of rupees have been allocated and spent in health sector reforms. There have been police recruitments without bending down to the demands of MPs and MNAs of the party. The Ring Road project has almost been completed. The Punjab government has a transparent way of governance.

TNS: Critics see PML-N as playing a friendly opposition. What do you say?

PR: We have been cooperating with the government on all important issues. But, sadly, even after having PML-N’s cooperation they have been unable to handle issues and improve governance. The opposition’s role is not to stab the government in the back but play a responsible role. We are doing responsible opposition which is according to democratic norms. In the recently- held presidential address to the joint session of the parliament, many people wanted that we should agitate but we played within the democratic norms to prove that we are a responsible opposition.

TNS: Does the PML-N have an alternative on the economic situation of the country?

PR: PML-N has already tabled its 10-point agenda which includes many points to improve the economy like broadening the tax net. We believe that rich people must be taxed and loans should be taken back from the rich and influential class. And there should be revival of the industry. There should be a mechanism to control electricity and gas prices and end load shedding and effective measures can be taken to control corruption. PML-N wants measures to provide relief to the masses by checking price hike. The economy can be further managed with 30 percent reduction in government’s development expenses and with recovery of loans which were written off on political basis. The economy can be improved by recovering the embezzled amount of billions of rupees like through conducting transparent probe in cases like the Punjab Bank, Insurance Corporation, Steel Mills, and other mega scandals.

TNS: What’s your take on army’s role in politics and governance in the backdrop of PML-N’s meetings with COAS?

PR: PML-N firmly believes that army’s role in the Constitution is clearly drawn out. PML-N is against any extra-constitutional role of the army and would resist it. Shahbaz Sharif has never called for army’s role in politics. His statements are always misunderstood. The meetings of Shahbaz and Opposition Leader Chaudhry Nisar with the COAS are not different from the meetings of other provinces’ chief ministers. They have also been meeting Chief of Army Staff from time to time. Interior Minister Rehman Malik also meets COAS. President and Prime Minister also meet COAS and people see the troika’s meeting off and on. There is a need to understand the situation in which Pakistan is in. We are fighting against terrorism and high officials are meeting the army chief to discuss security issues. Punjab is also a target of terrorists and meetings of the Chief Minister and COAS are for security matters. Army has a constitutional role and PML-N stands for it. Also, democratic issues should be resolved democratically and without such interventions. Had we stood united we would have stopped all forces to intervene in issues such as in the restoration of judiciary. People are also fed up with 40 years of army rule in the country.

TNS: Will the PML-N go for Pervez Musharraf’s trial if the party comes to power in the next elections?

PR: Yes, why not? PML-N will start the trial of Pervez Musharraf. Also, now courts are free and have already taken up the case.

TNS: Do you think midterm elections are going to be held?

PR: The midterm has already passed. We think the governments, federal and provincial, should complete their term. But the government is not doing well. If the federal government does not perform the constitution gives the choice of re-election. The role is mentioned in the constitution. Also, people should not call or think of any temporary set-up like “national” or “technocratic” government backed by the military establishment. When the Supreme Court of Pakistan has clearly said it would not validate army role, then who will validate such set-ups or military takeover?

TNS: What’s the PML-N’s stance on the unification of different factions of Muslim leagues, including the PML-Q?

PR: PML-N has its old stance on the unification of different factions of Muslim league/s. PML-N is the real Muslim League and anybody who wants to rejoin the original Muslim League would be welcomed. Even for PML-Q because it was a party of the PML-N turncoats who joined Musharraf’s Kings Party and became part of dictatorship. We are ready to pardon them if they come back with sincere wishes and attentions. But we don’t see PML-Q as a party. Yes, alliances with any group are possible when elections come but that will be decided at that time according to the situation.

TNS: Does the PML-N see this government sailing smoothly and complete its term?

PR: Parliament should have an independent role and there should be good governance. PML-N believes that decisions of the judiciary must be respected. We wish the PPP can do it but, seemingly, the situation looks different. For example, reportedly, the PPP’s recently formed “manifesto committee” has named former federal minister Hamid Saeed Kazmi as its member. So PPP’s ‘manifesto’ seems very clear (says with a smile). 

 

vaqargillani@gmail.com

 

A sapling of hope

“We are planting a sapling of hope, sapling of peace. Let us pray that this sapling would grow into a strong tree that may spread its shade across the India-Pakistan border”, said Mr. Kuldip Nayar, peace activist, veteran journalist and former member of Indian Rajya Sabha while planting an Oak sapling in Art and Craft Village Islamabad last week.

Mr. Nayar, leading an Indian peace delegation, has been spreading the seeds of peace and mutual trust across the border for over last five decades now. His efforts are being reciprocated by quite a few (especially by members of civil society organisations) in Pakistan too.

People like Kuldip who dared talking of peaceful relations between India and Pakistan, are immediately declared as traitors by the establishment forces of their respective countries. However, these few “traitors” are growing in numbers. Today, there is a substantial number of us who are imagining a subcontinent where borders will be transformed into bridges and bonding; where all children will go to school, where no one will go to bed hungry; where the human rights of minorities will be respected; where there will be more prosperity and peace, rather than war and violence; and where people would rise above the narrow walls and interest to share a common destiny of the peoples of South Asia.

Indian Peace Delegation was not only felicitated by mainstream civil society organisations in Karachi, Hyderabad, Islamabad, and Lahore but also by the High Commissioner of India to Pakistan, Deputy Chairman Senate, the Head of PML Q Ch. Shujaat Hussain, Sherry Rehman, and Prime Minister of Pakistan among others. I, being one of the co-hosts of this delegation in Islamabad, had a chance to attend quite a few of these dinner and luncheon meetings.

In most of these meetings participants were talking about potential of peace between India and Pakistan so that both these countries could transform themselves and the world. They were imagining with passion and conviction about the immense possibilities of a South Asia driven by prosperity, peace, democracy and mutual trust.

They were talking of a Pakistan and India where the autonomy and sovereignty of each country will be respected and at the same time both the nations together seek to mould common futures based on shared commitment, interest, culture, and a passion to transform their challenges into opportunities, their poverty into prosperity and their deeply entrenched mistrusts into a sense of trust and mutual respect.

It was quite heartening to see the political will to resolve outstanding issues between India and Pakistan through negotiations not only among the top leadership of ruling PPP alliance but also among the top leadership of major opposition parties. So where is the bottleneck?

The bottleneck is the typical mindset -- your gain is my loss and vice-versa -- that was nurtured to support the vested interest of powerful establishment on both sides since 1947. The bottleneck is created by some internal and external forces who want both the nations to remain prisoners of the past. These forces are equally present in both the nations. I am not only referring to the handful of non-state actors who, due to their jingoistic agendas, attempt to sabotage all peace efforts, but also the state actors -- invisible forces -- who owe their existence to a continued mistrust between both nations.

I can quote two recent examples about how one can explain arrest of an official of Pakistan High Commission in India during Mohali match when the Prime Minister of Pakistan was visiting India? On the other hand, it was funny when intelligence agencies of Pakistan were chasing the members of Indian peace delegation not only to the residence of Indian High Commissioner, but also to the meeting of Deputy Chairman Senate and the Prime Minister of Pakistan. Apparently, this chase was a must to keep an eye on the “clandestine activities” of the guests as well as the hosts.

Both India and Pakistan are spending billions of dollars every year to improve their defense capabilities against each other. Indian federal budget is presented in the month of April, any increase in their defense budget forces Pakistan to increase its defense spending too. Can’t they have a competition in increasing Public Sector Development Budget? All they need is to start picking low-hanging fruits, facilitate people-to-people contact, facilitate more trade between each other and support the voices of sanity.

Skeptics may say that in the presence of above-mentioned bottlenecks, the idea of peace between Pakistan and India is a romantic dream devoid of any sense of reality. However, dreams can be the beginning of a new dawn. In a growing climate of cynicism, young people should get inspired by 88 years old Kuldip Nayar whose ability to dream about a new era of trust between Pakistan and India is still very energetic and dynamic. We need to dream like Kuldip and many others as dreams can dare to challenge the constraints of past and present. We need new dreams to heal the wounds that haunt us; we need a new dream that can transform our agonies and mistrust.

Our generation and its future should not be held hostage to the past. We can indeed be the shapers and makers of a future of Pakistan and India and, in turn, the whole of South Asia, with a new sense of political and poetic imagination.

My Keralitie friend John Samuel says, and I endorse, that the old South Asia is the balance sheet of the power equations that emerged out of a tough process of decolonising. Now it is time to outgrow from the past baggage of negativity and of the deep mistrust that was nurtured by the powerful forces and countries of the world. As long as countries in South Asia are more into a mode of undermining each other and into mindless arms race, we all will be dependent more on other powerful countries for aid, arms and arbitration.

Why our patriotism is defined in negative relation to the other country. Why cannot we appreciate a better playing side by not turning a game of cricket into a holy war between Muslims and Hindus? Why can’t we say no to the reactionary politics of “negativism’ and religious fundamentalism that often turns us against the immediate “other” or an imagined enemy within or across the border? These are the questions we need to answer in order to transform the attitude and approach of India and Pakistan towards each other as well as to other countries in the region.

The first step towards lasting peace in the region is to develop workable and realistic solutions to the entrenched conflicts in the region, without undermining the sovereignty and integrity of the countries. This also means evolving a broader framework for addressing issues of conflicts within countries.

 

It is time to rediscover the dream of Rabindranath Tagore:

 

WHERE the mind is without fear

and the head is held high

Where knowledge is free

Where the world has not been

broken up into fragments

By narrow domestic walls

Where words come out from the

depth of truth

Where tireless striving stretches

its arms towards perfection

Where the clear stream of reason

has not lost its way

Into the dreary desert sand of

dead habit

Where the mind is led forward by

thee

Into ever-widening thought and

action

Into that heaven of freedom, my

Father, let my country awake

 

Let us dream together to support many more silent Kuldips in our society.

 

The writer is executive director of Islamabad-based policy think-tank Sustainable Development Policy Institute and can be contacted at Suleri@sdpi.org

 

money
Daunting data

It is three years since the PPP government came into power. The economy offers a credible yardstick to assess the performance of a government. How has the PPP government fared on the economic front? How has it responded to the major economic challenges facing the country? These are some of the important questions. Before we examine these questions, it seems in order to outline the state of the economy when the government took office.

The last five years of the Musharraf era (October 1999-March 2008) are generally touted as a period of economic boom characterised by robust economic growth, stabilisation of the exchange rate and record increase in workers’ remittances and foreign direct investment (FDI). Between the Fiscal Year (FY) 2004 and FY08, the economy grew at 7 percent per annum on average -- though during the FY08, growth rate fell significantly to 3.7 percent.

The exchange rate remained relatively stable -- although, again, the second half of FY08 saw sharp depreciation of the rupee. Foreign exchange reserves increased to $15.18 billion at the end of FY07. The country on average received FDI inflows of $3.25 billion a year and both during FY07 and FY08, FDI crossed $5 billion mark.

However, other economic indicators presented a bleak picture. Trade deficit increased to a record $20.74 billion in FY08, current account deficit exceeded $14 billion --8.47 percent of GDP. Fiscal deficit rose to Rs777 billion -- 7.6 percent of GDP -- while revenue-GDP ratio fell to 13.7 percent of GDP. External debt and domestic debt reached $46.16 billion (31 percent of GDP) and Rs3.21 trillion (32 per cent of GDP). The average Consumer Price Index (CPI) inflation was 12 percent at the close of FY08. Investment-GDP ratio was 21.6 per cent, while savings-GDP ratio was 13.9 per cent.

This means the economic growth during the Musharraf regime was not based on strong fundamentals and the healthy growth was largely on account of inflow of foreign capital. By October 2008, the country’s external account position had deteriorated to such an extent (foreign exchange reserves had depleted to $7.31 billion -- as on October 17, 2008 -- and the exchange rate had nosedived to Rs82.37 per American dollar) that the government was forced to borrow from the International Monetary Fund (IMF).

The PPP government’s macro-economic policies have largely been dictated by the commitments it made with the IMF under the Standby Arrangement. These commitments required the government to significantly reduce fiscal and current account deficits, discourage government borrowing from the central bank as a source of deficit financing, maintain high interest rates with a view to reducing inflation, ensure exchange rate flexibility, increase tax-GDP ratio and remove energy subsidies.

An obvious cost of such stabilisation policies is that they slow the pace of the economy. Hence, during FY09, growth rate fell to 1.2 percent, which was one of the lowest in Pakistan’s history. Even that low growth rate was made possible by downward revision of GDP growth to 3.7 percent from the original figure of 5.8 percent. A modest economic recovery was made in FY10 as the growth rate increased to 4.1 percent mainly because of 4.4 percent growth of the large scale manufacturing (LSM), which accounts for more than 70 percent of industrial output.

For the current fiscal year, FY11, economic growth of 4.5 percent was targeted. However, mainly due to devastation caused by the unprecedented floods, the growth rate is likely to be below 3 percent.

Fiscal deficit, which forms the main pillar of the edifice of the IMF-sponsored programme, was to be reduced to 4.2 percent of the GDP in FY09, and then to 3.4 per cent in FY10. The FY09 target was missed as the fiscal deficit was recoded at 5.3 percent of GDP, though much lower than the 7.6 percent budget deficit during the preceding year. The FY10 fiscal deficit target was subsequently increased to 4.6 and then 4.9 percent. However, the budget deficit of 6.3 per cent was recorded during that year. The fiscal deficit target for FY11 was 4 percent of GDP, which subsequently was enhanced to 4.7 percent. The fiscal deficit reached about Rs500 billion (2.9 per cent of GDP) by the close of the first half of the current fiscal year and it is likely to exceed 6 per cent for the full year.

There has been improved performance in containing current account deficit. During FY09, the current account deficit was reduced to $9.26 billion (5.7 percent of GDP) and further to $3.50 billion (2 per cent of GDP). During first seven months of the current fiscal year (FY11 July-January), current account deficit of $81 million was recorded compared with $3.05 billion for the corresponding period of FY10.

The improved performance of the current account is partly due to fall in trade deficit to $17.16 billion in FY09, $15.37 billion in FY10 and $6.38 billion in FY11 (July-January) and partly due to increase in workers’ remittances, which reached $7.81 billion, $8.90 billion and $6.11 billion during FY09, FY10 and FY11 (July-January) respectively.

However, foreign investment inflows have dried up. During FY09, FDI fell to $3.72 billion and further to $2.20 billion in FY10. During FY11 (July-January), FDI of $946 million was recorded.

Notwithstanding a rather restrictive monetary policy, strong inflationary pressures persist. In FY09 average inflation shot up to 20.8 per cent but was driven down to 11.7 percent in FY10. In the first half of the current fiscal year, average inflation was 14.6 per cent and is projected by the SBP to be in the range of 15-16 percent for the full FY11. The major cause of inflation is the fiscal deficit and the way it is being financed (bank borrowing). Another cause is the energy crisis driven aggregate demand-supply gap as there is both underutilization of the existing production capacity and lack of new investment.

Resumption of the IMF assistance remains an important issue for the government. The IMF has so far disbursed $7.27 billion to Pakistan out of total agreed credit of $11.3 billion under the 25-month stand-by agreement (SBA) effective since November 2008. The programme was supposed to conclude at the end of 2010 but has been extended by nine months on the request of the Pakistan government to enable it to undertake the measures earlier agreed with the Fund. At the top of these measures is introduction of the RGST, which has become a contentious matter between the government and the opposition.

There is no gainsaying the fact that Pakistan, which has one of the lowest tax-GDP ratios (10 percent of the national output) in the world, needs to shore up public revenue.

Given strong opposition to the RGST both within and outside parliament, its imposition seems to be a difficult proposition. Accordingly, the government has chosen the easier way of imposing additional taxes of Rs53 billion through a presidential ordinance. The new measures include 15 per cent income tax surcharge, withdrawal of sales tax exemptions and increase in excise duty by 2.5 percent.

A singular economic achievement of the present dispensation is the institution of the 7th National Finance Commission (NFC) Award. Making a departure from the past, the present NFC Award has a multiple criteria. Though population (82 per cent weightage) remains the chief criterion, poverty/backwardness (10.3 per cent), revenue collection/generation (5 per cent) and inverse population density (2.7 per cent) have also come into play. The share of provinces has gone up to 56 per cent from 47.5 per cent.

The government’s singular failure in the economic sphere is its inability to widen the tax net. In FY08, revenue-GDP ratio was 13.7 per cent, in FY09 it dropped to 13.2 per cent and slightly increased to 14 per cent in FY10. During the first half (H1) of FY11, revenue-GDP ratio was 5.8 per cent. Tax-GDP ratio, which was 9.9 per cent in FY08, came down to 9.8 per cent in FY09 and slightly rose to 10 per cent in FY10. During FY11 (H1), tax-GDP ratio was 4.2 per cent. Direct tax-GDP ratio, which was 3.8 per cent in FY08, slightly rose to 3.9 per cent in FY09 and fell to 3.7 per cent in FY10.

 

Email: hussainhzaidi@gmail.com

 

Investing in the youth

Pakistan’s pulse may suggest the country is heading towards a social, political and economic coma. There is a school of thought that believes the smart and able leave the country, leaving her to the incompetent. Some observers give Pakistan between 3-5 years’ survival, others are generous enough to give 10-15 years more.

So what to do now? A reasonable option, to some, would be to polish up our kids’ English language skills in order to give them chance for a visa at a foreign consulate. Another option is to get lost in the mindless media and drawing room rhetoric and talk about all that is lost in hopes for an accidental catharsis.

We may also choose to further advance the delusion of conspiracies and the “out-to-get Pakistan campaign” as it does offset momentary spike in blood pressure caused by paranoia. Even a child in the streets of Pakistan knows who to blame with punchy one-liners, i.e., US for security, India for insecurity, British for inequality, political parties for corruption, feudalism for injustice, courts for inaction, army for hyper-action and IMF for being the economic Jack Kevorkian, aka Death Doctor. Today, the excuse and propaganda factories are as robust as ever serving as the quintessential opiate for the youth.

Yes, Pakistan has been and is being used as an ATM machine by many and it is running low on cash today. Yes, when asked about leadership we have to go back to our school text books and clips of individuals that left us 60 years ago. Yes, we in the youth continue to carry the baggage of our fathers and forefathers and the spine-breaking load leaves little room for self-discovery. Yes, our leaders today remain detached to our needs and aspirations but we forget a shepherd needs a herd and we are ever ready to oblige time and time again. Yes, we know the difference between right and wrong but not the difference between inaction and slavery as no difference exists.

We all want more today because the fear of nothing tomorrow supersedes our instincts for a better future. Yes, Pakistan has the resources to feed its people with affordability and still be a net-exporter of food. Today, we experience food shortages and face dangerous levels of food inflation. Through indigenous power infrastructure development we can be energy self-reliant but today our budget deficits are primarily energy-driven with high sensitivity to oil prices. Sixty percent of Pakistanis live under $2 a day, however, apparently we all are texting each other with our latest iPhones thanks to a robust parallel economy. Yes, Pakistan may become a landmine if another article like this appears 5 years from now.

As an economic and investment analyst rarely do you come across a story like Pakistan. While virtually every country has its unique DNA, Pakistan has “BRIC-ish” (in economics BRIC is an acronym for Brazil-Russia-China-India grouping) potential in my view given its potent combination of labour-rich and resource-rich inheritance. The leading emerging markets are a force to be reckoned with given the growth generation potential levered to both domestic consumption and ability to support international demand.

Pakistan has the sixth largest population in the world at 180 million, tenth largest workforce at 55 million, 36th largest country in the world with 25 percent arable land, young demographic with more than 50 percent under 25 year of age, 2.6 percent of global population but only 0.6 percent of GDP hence massive upside potential to productivity exists. The overall population is growing at above 1.6 percent and faster than BRIC average, Saudi and even Turkey, urbanization at 36 percent (vs. Brazil at 86 percent), ranked 20th in the world in farm output and has the 4th largest coals reserves at Thar.

For Pakistan to de-track itself from the landmine route and onto the goldmine prospect the country needs immediate detoxification, which means the youth should dismantle the excuse and propaganda factories, educate themselves on ground realities and socio-economic issues, know that being patriotic is a not just an emotion but also a calculated mind set.

We should learn that being called a nation is a privilege that is earned through actions, do not be defined by others but achieve a graceful identity through self-critique and self-reform. You sit on a goldmine but you have to dig for it though be it with your bare nails.

Pakistan’s 100 million strong youth need to know both history and future’s weight is squarely upon their shoulders and they need, I repeat, absolutely need to step up and step out. There needs to be an emergency debate triggered in the media and among the youth community around Pakistan’s key economic variables.

It goes without saying that any economic policy or its enforcement will largely hinge on a state’s ability to provide security in the streets. It also goes without saying that tax revenues have to rise dramatically from sub-10 percent of GDP levels today to around 20 percent so government may function with relative continuity and while doing so corruption levels need to be contained if not fully eliminated.

As a baseline, the parallel economy supporting a major chunk of Pakistani households today needs to be accounted for and absorbed into the mainstream economy. This would not only enhance government revenues but also promote relatively efficient and stable market evolution.

How to address the issue of youth unemployment, which in my view is a fast-spreading toxin and the main hurdle ahead of a sustainable unearthing of Pakistan’s potential? A modern economy has to be built upon a unique set of skills and labour sophistication, hence part of the answer lies in education reform.

Pakistan’s youth should demand an up-to-date and uniform curriculum that preserves their heritage and future with a best-in-class education ranging from humanities to social sciences to advanced engineering and computer science. By aggressively going after a more streamlined and accessible education system we may also look forward to higher literacy rates that feed into enhanced socio-political acumen and lower vulnerability towards extreme elements in society.

The corporate sector has to ramp up transparency and rigorously promote a meritocracy-based culture. Youth quotas should be established both in public and private sector and in the spirit of fairness, should be results-oriented and probationary in certain cases.

Vocational training programmes should be well-advertised, especially in rural areas where roughly 70 percent of the youth is based. Pakistan needs to follow the lead of countries like Brazil and China where economic growth has actually translated into providing job opportunities for semi- and low-skilled workers.

In solving the energy crisis we need to pursue power infrastructure projects, including dam-building and in turn provide employment opportunities for locals both in the construction and maintenance phase. While today Pakistan may need to rely on labour-intensive sectors like agriculture to absorb unemployment, we should be actively pushing towards becoming a balanced economy that drives much of its output via knowledge and exportable services.

We also need an active and well-backed entrepreneurial undertaking, where the self-starter is supported with financing, incubators, and networking resources throughout the various cycles of enterprise.

Creativity is the forte of the young and it should be promoted at every level of the education system. We have to whole-heartedly believe in research and development debate should be part and parcel of our evolution as a nation, where blind following and rote learning are strongly discouraged and replaced with a healthy dose of analysis and objectivity. The last and perhaps most important element in all of this is stepping out of four walls today and doing something about tomorrow.

 

The writer is CEO of SM Advisory Group, LLC

 

education
Odd one out

Is it a prudent decision to devolve the HEC without taking into account current
practices of the developed and developing states?

The Implementation Commission has finally decided to devolve Higher Education Commission (HEC) to provinces despite the fact that it exists in the federal legislative list. Is it a prudent decision to devolve an institution without taking into account the current practices of the developed and developing states, achievements of the HEC and the pros and cons of the devolution?

HEC, formerly known as University Grants Commission, was established in 2002 with a mission to facilitate Institutions of Higher Learning to serve as engines for the socio-economic Development of Pakistan. This centralised body brought a number of policy reforms in the system and has a long list of its achievements. The scholarship schemes, Quality Assurance of Higher Education, Revision of Curriculum, Research and Development initiatives and Technological Reforms i.e. Video Conferencing facilities in the universities, Campus Management Solutions and Pakistan Education & Research Network are the major initiatives of the HEC.

This new vision of higher education in Pakistan was translated into reality in a very short span of time and the beneficiaries are not only the young talent belonging to middle and lower middle classes of Pakistan but also a number of organisations and the state as a whole. It is not an attempt to realise the importance of higher education but the importance of a centralised body to regulate the higher education for the socio-economic development of the country.

Keeping in view the importance of higher education, Malaysia established a separate ministry of higher education in 2004. The importance of this ministry can also be judged by observing that two deputy ministers were appointed along with a minister to look after the affairs of higher education in the country. One of the missions of the ministry is to ensure at least three universities among the best hundred of the world.

Higher education is still centralised in our neighbouring country India and only operations were decentralised for better management by establishing regional offices of the central body. The University Grants Commission, India was formed in 1953 and still regulates higher education in India. Higher education is also centralised in Australia, South Africa and most of the EU countries.

Institution building is a complex phenomenon and it takes a long time for an organisation to establish its credibility. HEC Pakistan has covered a long journey and is being recognised globally. There are also some salient features of its schemes that have direct and indirect impact on the social and economic development vis-à-vis foreign relations of Pakistan.

HEC has signed a number of Memorandum of Understandings (MoUs) with foreign educational agencies and universities abroad and sending its scholars to the higher learning institutions of the world under these agreements. It is a stage where Pakistani scholars are being admired in the European countries by winning prestigious awards. Keeping in view the talent in Pakistan, foreign agencies have started establishing their offices in Pakistan. DAAD of Germany has also announced a number of scholarships for the Pakistani scholars and researchers. It is all due to the centralised efforts of HEC Pakistan.

The effective role of the universities in the state and society can be best ensured at the state level. We are lacking behind in bridging industry with the universities and in getting agriculture research from the farms to the fields. HEC is formulating strategies to get the sponsorships from the industry for university research projects and also alternate sources of funding in this regard. It is a slow process and also needs collaboration of other governmental departments.

HEC has addressed a number of issues of higher learning sensing the demand of the 21st century. Establishment of the quality assurance cells in the universities, alignment of academic degrees with international norms and new performance based compensation systems are the major reforms in this regard.

The HEC efforts for human resource development, not only for the educational institutions but also for the Research and Development (R&D) state institutions and industry through scholarships, would prove its significance in the coming years. There is a need for more researchers and managers to carry out projects like Sandak, Riko Diq and Thar coal. Our scholars are learning a systematic way of research prevalent in the advanced world that would certainly benefit for the current and future projects.

Is this all possible by decentralising a body that has now developed organisational learning and institutional memory? The decentralisation would not only deprive the R&D organisations of Pakistan to benefit from the HEC but also the unemployed talented youth of middle and lower middle classes. In addition, one province may excel and the other may lag behind in higher education infrastructure and human resource development. Why the developed and developing countries still believe on centralised higher education management needs to be studied before taking the decisions in haste. It is recommended not only to let the commission in its present status but also to strengthen it by augmenting resources and expertise from other institutions.

There is a need to realise what factors are contributing in the decision of decentralisation of an institution that has established itself with rigorous efforts over a period of almost one decade. Is it the degree issue and a future threat to such elements that hold unrecognised degrees? Is it to save some billions from a potential institution of a country where multiple of billions go to corruption? Is it another experiment for management that would need to be reverted soon?  Or is it beyond all that where theories of international political economy apply?

 

The writer is an Islamabad-based analyst

aamirhakeem@hotmail.com

 

Where do we stand?

According to dictionary, sovereignty is “the supreme, absolute, and uncontrollable power by which an independent state is governed and from which all specific political powers are derived; the intentional independence of a state, combined with the right and power of regulating its internal affairs without foreign interference.” Sovereignty and democracy are, of course, inter-linked. 

The talk of the town these days among the political intelligentsia is the task of strengthening democracy in Pakistan. In comparison with other systems of government, democracy is proved to be the best system of governance the world over.

Throughout the world, democratic forces have distinguished between true democracy in comparison with the so-called controlled democracy at the hands of non-democratic forces.

The situation of developing countries like Pakistan is the lingering threat from external forces. Somehow superpowers have successfully managed to streamline their power-based interests and, in some cases, stopped the real democratic process.

It would not be an over-simplification to say that international power players, US at the top of them, always managed the kind of democratic model in the third world that aimed to serve foreign agenda.

It is interesting to note how local and international establishments went against the norms of democracy. Pakistan, it is said, happens to be the real test case of clash between democratic and undemocratic forces.

We need to have supremacy of the parliament and the rule of law. Democracy is based on the concept of popular sovereignty. Representative democracies allow transfer of the exercise of sovereignty from the people to the parliament.

There is an impression that the international power brokers are aligned with Pakistan’s military institutions and accept their role in country’s politics. And how does that translate into action? General Pervez Musharraf’s is a case in point. He went Scott free, enjoying free passage.

According to one analysis, international power players have become completely engaged in decision-making process. Can we hope to see the democratic set-up getting strength and stability, at least in economic terms?  The bitter reality for the common man is that the World Bank and IMF are dictating the finance ministry.

The fault lies with us not with the others. We are internally weak since day one and our institutions have failed. True, Pakistan’s democratic process is still in transitional mode but it would be about time to re-evaluate our political roadmap and put it on the right track.

It would be at the risk of repeating the fact that Pakistan’s military regimes have been legitimized by America. They cemented relationship with the military leaderships instead of politicians.

In the process, the international forces mostly dismiss our local dynamics and public sentiments and that results in trust deficit between the people of Pakistan and the US administration.

We know that every country has different political and economic dimensions. That is why though major principles of democracy can be translated into a larger framework, the plan of political revival should be based on local realities of a country.

But the ground realities make the theory difficult to apply under certain instances. Protest over drone attacks in the tribal areas of Pakistan by Nato forces is one example. People of Pakistan are confused about the US commitment on issues regarding Pakistan. Actually, the Americans have divergent models of democracy for different countries. When it comes to Pakistan, or any other country for that matter, stakeholders are equally responsible for bad times.

Unfortunately, in our case, democratic forces in the country are also aligned with power-based structure and have not promoted internal democratisation process. When political parties and their leadership feel empowered through larger public support, non-democratic forces have to take a step back.

The situation is the same with not only the developing countries but also with rich and wealthy nations. It goes without saying that our economy, like many other economies of the world, is running into great losses and is being supported by the international institutions. Should we follow the beaten path?

An effort should be made by the political forces and intelligentsia groups to create political awareness among the poverty-stricken masses. The first and foremost duty upon democratic forces is to try to assert themselves.

 

The writer is a political analyst and human rights campaigner .He can be reached at salmanabidpk@gmail.com 

 

Killing in Karachi

Killings of innocent citizens have destroyed the peace of Karachi for several weeks now. These incidents have many factors in common. Attackers come well-prepared and informed about the target. They are skilful assassins who are trained to disappear after completing their heinous missions.

Locations are mostly places where turf wars have been raging for several years. Orangi Town, Qasba Colony, Gulistan-e-Jauhar, Khwaja Ajmair Nagri, Kutti Pahari (at the confluence of North Nazimabad and Orangi/Qasba belt), Korangi, Landhi, and many other similar places have been gripped by fear due to the ongoing ‘kill and run’ incidents.

The planners of these nefarious designs had the audacity to carry out their abominable acts even on the sombre occasion of Pakistan Day. Rockets were fired from unknown locations towards sensitive destinations. For an objective review of the situation, it may be worthwhile to attempt to read the perpetrators’ mind before responding to the crisis.

That the human killing machines have full patronage of political influentials goes without saying. One plain interpretation is that the warring groups are trying to silence the more active and vocal elements amongst the ranks of opponents. It is obvious that eliminations shall deprive the parties from the support of loyal and dutiful workers. Newcomers to party ranks would also be frightened away from this blood laden game.

A drastic outcome of these acts has been the weakening of moderate and peaceful membership of various parties and strengthening of extremist but invisible hands. It is also deplorable to imagine that in times to come, political parties of various origins and profiles are likely to be controlled in a de-facto manner by hardliners as against the sane and ideological people. For quasi-criminal record-bearers, this is the ultimate victory and advantage. Do we as a society agree to such a mutilation of our political culture and context?

A clear message that the citizens have been able to read is the serious incapability of law enforcement apparatus in preventing these happenings. Many assumptions can lead us analyse this shortcoming. Scale of spread of areas is a major determinant.

One finds the city as a gun-loaded society with plentiful of trigger-happy youth that simply wait to burst into action. A reflection of this fact is the evidence of widespread celebration firing that is witnessed on the New Year eve or victory in a cricket match. In a city of more than fifteen million with less than fifty thousand policemen, one can imagine the predicament of force commanders. Preparedness, training, multiplicity of tasks, VIP duties, patrolling sojourns and long working hours cause fatigue, lack of motivation and decline in efficiency of police personnel. Allegations of connivance, nepotism, corruption and malpractice are no small factors in this grave state of affairs.

Apparatus of political decision-making and forces that control it have been found complacent in the prevailing circumstances. While political leadership verbally condemns acts of killings and terror, it stops short of taking action against the black sheep that use party affiliations for covertly supporting these annihilation drives. Since party leadership is not elected through open conventions or legitimate mechanism of political functioning, their acts go virtually unaccounted for and unchallenged.

Economic fallout of target killings is tremendous. Countless working days are lost due to the inability of city and provincial administration to restore order. Closure of shops, businesses, workshops, small and medium enterprises, transport and educational institutions cause incredible damage and hardship to ordinary folks. Daily wage workers push-cart vendors, repair mongers and vendors suffer losses that reduce them to pauper status.

To buy peace, some of these folks attempt to align themselves with the ‘invisible’ hands -- thus, the network of willing and not so willing accomplices in the labyrinths of terror scales up. The households and families who have lost a family member -- especially a bread-earner -- slide deep into emotional, psychological and economic trauma that mere lip service cannot cure. It is obvious that numbers of directly affected families and people is increasing. Needless to say, unaddressed frustrations erupt into desperate acts which snow ball into perpetual unrest.

The conventional process of crime and punishment may not be able to address this situation. A political consensus backed by mass support of ordinary people shall be the first building block towards a preventive mechanism. Monitoring and objective reporting by electronic media can help in pre-empting crises in the making. And, finally, state response towards the spread of arms and ammunition shall have to be quick. The present approach of looking the other way towards stockpiles of deadly weapons can cause probably the deadliest manmade disasters in this unfortunate metropolis.

 

 

 

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