Hoping for a bailout
The important question is whether the IMF programme offers a credible solution to the country's macro-economic problems
By Hussain H. Zaidi
The International Monetary Fund (IMF) has increased its credit to Pakistan to $11.3 billion from $7.6 billion as originally agreed last year under a two-year stand-by agreement. Pakistan has received the third tranche of $1.2 billion following the first two tranches of $3.1 billion (received in November 2008) and $848 million (received in April this year). The important question is whether the IMF programme offers a credible solution to the country's macro-economic problems.

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Manufacturing a crisis
Everyone has a 'share' in the current sugar crisis -- the sugar industry, the government and the hoarders
By Jawad Rizvi
In 2007, the country saw an almost 40 million metric tonne bumper crop of sugarcane. The farmers were paid little for their crops, thanks to the mill owners. Following that, a number of incidents were reported in which the farmers had burnt their crops, protesting against not being paid the price fixed by the government of Rs60 per maund (40-kg).

Minus the local tier
The packing up of local governments would encourage non-state militancy
By Raza Khan
It seems the government has taken the decision, though without announcing it in unequivocal terms, that local government system would be done away with and the administration and public services at the local tiers would be handed over exclusively to the respective provinces. Whatever the purpose, the decision does not seem motivated by public interest.

The latest advertisement in a series of the government's media campaign, apparently to dispel the negative impression created against the PPP government, is about the distribution of 12 percent shares in government companies among workers. The scheme has been given the name of Benazir Employees Stock Option Scheme (BESCO).

The advertisement, though spread over a quarter of page in all major news papers which ran for several days is very short in text. It says that 12 percent shares of worth 100 billion rupees in 80 State Owned Enterprises (SOEs) will be given to 500,000 workers free of cost.

The scheme is being projected as a revolutionary step of the government for the welfare and protection of workers. However, the advertising agency's name -- Privatisation Commission of Pakistan -- is enough to generate scepticism regarding the benefits of the scheme. The obvious question is if this is a scheme in the welfare of workers then the advertisement should have been on behalf of ministry of labour and manpower or ministry of social welfare.

The advertisement recommends visiting the Privatisation Commission's website for further details. It's on website that one comes across the real story behind the scheme.

A number of 80 SOEs referred on the website in which shares will be given to workers is on the Commission's list of state enterprises for sale. The list of 21 establishments categorised as "upcoming transaction's" include SME Bank, all power supply companies in major cities, Pakistan Railways, Pakistan post, State Life Insurance Corporation, Printing Corporation of Pakistan, Pakistan Mineral Development Corporation and Heavy Electric Complex (HEC).

Though many details of the scheme are yet to come, the initial analysis of the scheme is that the governments wants to sell estate enterprises and distribute 12 percent free shares among workers as a strategy to counter any possible resistance and protest by workers.

"If this is a scheme aimed at buying workers' consent to privatise public sector industries then workers will not accept it," says Liaquat Sahi, an office bearer of Democratic Workers Union at State Bank of Pakistan. "We won't accept it. Workers have already suffered due to privatisation," he added.

Sahi, who along with other trade union activists led a campaign against privatisation of banks, says that privatisation even in the name of selling shares to workers is not acceptable. "Shares were sold to workers in case of ABL, then they went back to big shots and workers got nothing but unemployment and hunger," he added.

Interestingly, successive governments, both civil and military, have found the selling of state enterprises as an easy way to bridge financial gaps due to heavy debt servicing and operational military and civil expenditures. Stories of kickbacks and favouring friends and relatives in such transactions are also an open secret now.

Profitable state institutions have been auctioned at throw away prices, some of them even invited controversies and government decisions were reversed after court interventions. The privatisation of Pakistan Steel Mills' in the Musharraf regime is one such example.

Worker representatives and economists who oppose the new liberal model of economy and are theoretically against privatisation believe that privatisation of state enterprises is an anti-people process in its essence. Privatisation of state institutions particularly utilities means withdrawal of state from provision of basic facilities of citizens.

The privatisation process in the country, so far, has not only rendered thousands of families jobless, it had failed to achieve its stated objectives. The government logic behind privatisation is that it will increase good governance and efficiency of institutions and the money earned will be spent on paying off loans. However, neither of these two objectives has been achieved.

Ghulam Mustafa Hashmani, a trade union activist in machine tool factory, had a list of state industries which were sold in the 1990s on pretext of performing better in the private sector, which were actually closed down later. These include, Soda factory, Metropolitan Steel, Thatta and Dadu Sugar Mills. "Come with me and I will show you dozens of factories in Sindh which were privatised but closed down later," says Hashmani.

Another example is of KESC, which failed to deliver after privatisation and its performance deteriorated.

Independent economists believe that till the government brings fundamental changes in its economic policies, it cannot resolve the issue of repayment of loans by selling state institutions.

It seems obvious that when governments keep borrowing and fail to manage balance of payments and narrow down the export import gap, no strategy can help in getting rid of foreign debt.

In the view of workers, they are the worse sufferers of the privatisation process because it deprives them of work, weakens workers strength and increases burden on common people. According to a report of Pakistan Institute of Labour Education and Research, (PILER) an estimated 700,000 workers lost their jobs during 1991 to 2006 due to privatisation.

"There is no logic behind privatising profitable institutions," says Sahi. "These must remain in the public sector and can be made more effective if run in accordance to legal framework and cooperation." In case of those institutions running in losses, says Sahi, workers have already offered to shoulder the responsibility. "Give workers a chance to run these institutions on no loss-no profit basis and you will see change," he adds.

Other trade union activists say that privatisation in any disguise is not acceptable. There are many examples in the past where attractive schemes such as golden shake and voluntarily retirement etc were introduced but the end result was that workers suffered the most.

Hashmani says government schemes will only be welcomed if they come without the condition of accepting privatisation. "If the government is sincere with workers then shares should come along with commitment that there will be no privatisation, it will increase their interest and result in better performance of SOEs."

A spokesperson for the Privatisation Commission says that under BESCO shares will be given to workers in existing public sector organisations and even those already privatised. "The scheme applies to both SOEs, those already privatised and those which are in public sector now," says Tahir Parwaz, Director Media at the Privatisation Commission. "Obviously, this will also apply to those state enterprises to be privatised in the future," he added.

Instead of giving further details, he suggested to wait for a press conference to be addressed by the privatisation minister on August 19. Interestingly, the press conference did not provide any further detail than what had already been stated.

Though, major workers' federations are yet to come up with their positions, common trade union activists have already started voicing their concerns regarding BESCO.

They think that the main intention of the scheme is to buy workers' consent in privatisation of those institutions which are on wish list for sale.

They say that the government had faced severe resistance in its bid to sell state enterprises recently and one such example was the workers fierce resistance in privatisation of Qadirpur gas field.

The government might have launched this scheme as a strategy to pave way for large scale privatisation but it's unlikely that the scheme will win over public support in general and workers in particular.

Barrister Baacha's career as a student activist began during the Arab-Israel war in 1956, when he led student demonstrations against Israel. "My efforts were lauded by the Egyptian President Gamal Abdel Nasser in a letter sent to me after the war," he recollects.

In 1960, while at the Khyber Law College Peshawar, he became president of Khyber Students' Union. A year later, in 1961, arrest warrants were issued against him for strongly criticising Gen. Ayub Khan at the convocation of Peshawar University. But he escaped to Britain, and stayed there for 11 long years. He completed his Bar-at-Law at the Inner Temple and returned to Pakistan in 1973.

1n 1992, he joined ANP at the request of Abdul Wali Khan. However, his opposition to Gen. Musharraf and America in 1999 and 2001 led his party to issue several show cause notices against him. He left the party but returned in 2008.

Baacha opposed all military dictators from Ayub to Musharraf, and violations of constitution, democracy and liberties. He was on the forefront of the lawyers' movement and was jailed for 13 days on Nov 3, 2008.

Following are the excerpts of an interview with him:

The News on Sunday: You are more known for your frequent "letters to the editor". What was the driving force behind that?

Barrister Baacha: I am sensitive to social, political and constitutional developments in the country. I get worried when I see that the country's law and interests are ignored or compromised. In my letters I wanted to convey my feelings and I wished to highlight the issues. I also intended to promote dialogue within our society. My letters, at times, started a discussion that went on for weeks.

I am an anti-interventionist by nature. That is why I consider dictatorship an insult to human dignity. Those who aid and abet dictatorship are lesser mortals in my view.

TNS: How do you see the role of the judiciary in shaping the country's history?

BB: It has been disappointing indeed. Its role in fact has been more disappointing than other institutions. If judiciary had shown courage against dictators, if it hadn't legitimised it, if it had stood in the way of constitutional violations, our history today would have been very different. From Justice Munir to Justice Irshad Hassan Khan, judiciary was a helping hand to the dictators in the name of doctrine of necessity. Judiciary is to be blamed for these interventions in democracy and lack of accountability. The Bar always stood against dictators but it was let down by the Bench.

Luckily, now judiciary seems to have changed roles. It is now committed to fulfil its obligations to the people and the constitution. It is a beacon of hope.

TNS: In your view what has the lawyers' movement achieved?

BB: It has transformed our society. It got rid of Musharraf who wanted to stay in power for ever. It gave the political leadership a chance to strengthen democracy. It created constitutional awareness and now even the man in the street knows about what the leadership ought or not to do. The civil and military establishment has learnt that constitutional deviations would not be accepted and tolerated by the nation in future.

It has also proved that the present constitution can't defend itself. We need a strong constitution, which could defend itself and save the country from dictatorship. In its present shape, it is more of a constitution of a unitary state than of a federation -- all powers are vested in the centre and provinces have no autonomy. I think matters between provincial and central governments and those of constitutional interpretation should be decided by the Federal Supreme Court (FSC) while the provinces should have their own Supreme Courts (SC) as the last courts of appeal to decide the civil and criminal cases. This would expedite the legal process and lessen workload of the SC. The tribal belt should be developed into one or two provinces and made part of the federation like other provinces.

TNS: What about judicial activism? How much of it is permissible in parliamentary democracy?

BB: Historically, intrusion of institutions into the sphere of others has created problems. Every institution neglected its own duties but always tried to transgress its limits. For example, the army is trained for the defence of the country but it assumed the role of a government. This mentality has harmed us greatly.

Judicial activism is desirable but with certain conditions: It is good if it means sensitivity to public grievances; it is harmful if it becomes an alternative government. It must not result in clash between the different pillars of the state. Any such clash will create problems for the people.

As I said earlier I am an anti-interventionist. I believe in separation of powers with limited checks and balances. Parliament should make laws but should not serve as courts, as it does in case of public accounts and other committees. Similarly, courts should avoid performing legislative functions. The executive must neither manipulate the parliament nor pressurise the judiciary to comply. The judiciary should first point out the issue to concerned quarters. It may ask for a timeframe to resolve the problem. And if the government still fails to do the needful, then the judiciary can start legal proceedings against the concerned departments or officers.

TNS: Do you subscribe to the view that Pakhtoons have been guilty of promoting conservatism and tribalism in the name of tradition?

BB: Yes. But the issue needs to be viewed in its real perspective. You have to consider the ground realities. Pakhtoon society is basically a close-knit tribal society. They simply can't afford to go against their tribal traditions. Any violation of the tribal code of conduct by a certain individual or family is at the risk of excommunication. If they go against tribal traditions, they have to leave their ancestral area and migrate elsewhere. In their new abode they are considered outsiders and looked down upon if the cause of their banishment is known.

I wanted to clarify that they do so out of compulsion, not out of choice. It is something like the 'doctrine of necessity'. A Pakhtoon has to abide by the code of conduct called Pakhtoonwali or else his tribe denies him the cover and security.

Pakhtoons inherently are liberal people. In rural areas, youngsters and elders assemble to enjoy music even today. You might have noticed that Pakhtoon living outside the province or in another country have changed their life patterns because they could afford it. They have most often supported progressive nationalist forces. Pakhtoons have lived peacefully for hundreds of years with Sikh, Hindu and other minorities in the province and in the tribal belt. There hasn't been a single case of riot against minorities in these areas -- like in Gojra.

TNS: Don't you think women have been denied their due rights by Pakhtoons?

BB: That's not true. Enmity and friendship are two important parts of Pakhtoon society. These two revolve around females and are settled by them. They arrange marriages and play a major role in resolving disputes between tribes and families. It is considered an unmanly behaviour to reject the request for ceasefire or settlement of dispute made by female members of the family. Women thereby help end enmities that may go on for years.

There may be stereotypes in certain areas and families, which are inflexible to a modern and civilised mind. But then each society has its specific norms that are part of its psyche. For example, you can't expect a Pakhtoon to allow his females to intermingle with strangers. Other than this, women have equal rights. They take the best education, do jobs and businesses. Musarrat Hilali and Aesha Malik, two female advocates from the province, were in the forefront of lawyers' movement.

But there are problems in the tribal belt -- because the state has failed to provide them basic facilities: not one engineering, medical or technical college or university or hospital has been set up in the area. The concept of female education does not exist. Women want to be empowered but are at the mercy of tribal traditions.

TNS: You are said to be pro-Taliban. Are you?

BB: There is a difference between Afghan Taliban and the extremists in Pakistan. I consider the former as fighting a war of independence with America. They are, in a way, defending Pakistan's nuclear arsenal, which is the ultimate target of America. Defeat in Afghanistan at the hands of Taliban will throw the US out of this region, thereby guaranteeing survival of Pakistan's defence capabilities.

The activities of extremists in Pakistan, on the other hand, have created a sense of mistrust among Pakistanis in general against the word 'Taliban', which serves American interest. I am against any foreign involvement in Afghanistan. I think Afghans have suffered a lot for no fault of their own. They were not involved in the 9/11 attacks. Most of them don't even know where New York or Pentagon is.

The American invasion of Afghanistan is against all norms of humanity; the barbaric killing of innocent Afghanis finds no parallel in human history. Before the American invasion of Afghanistan, there was no terrorism in this region. It is the US that brought terrorists to the region. Peace will return to Afghanistan and Pakistan when the US and its allies leave Afghanistan. Stationing moderate Muslim countries, such as Indonesia, Malaysia, and Jordon in Afghanistan can avoid the fear of power-vacuum created by such departure till the Afghans elect a sovereign Afghan government.

Ramzan is upon us again. Quite apart from the standard exhortations of religious functionaries to be especially pious in the coming month a not insignificant number of ordinary people will readjust their priorities to reflect their commitment to the faith. My feeling, however, is that many of us will continue to go about business -- literally and figuratively -- as usual, with a greater premium placed on overt demonstrations of religiosity.

It is said by many people who are old enough to remember Pakistan before Ziaul-Haq that Ramzan was never observed as strictly back in those days. In other words it wasn't necessary for those who were not fasting to pretend that they were. Under Zia's 'Islamisation', things changed dramatically. Consuming anything in public during Ramzan became a criminal offence, prayers became mandatory in government (and probably in some private) offices, and the mullah acquired a new role as the self-styled moral policeman of society. I am sure that this 'revolution from above' made more Pakistanis into adherents of the statist religious orthodoxy. But I am even surer that it gave rise to a collective hypocrisy that is now arguably the biggest single societal factor impeding our development.

If by religion one takes to mean a set of rituals that can be performed without thinking or feeling then perhaps the Zia period genuinely made Pakistanis more religious. But if religion is something that is deeply personal and cannot be imposed on the individual by a next of kin, let alone the state, then one can start to understand why the dramatic increase in public displays of religiosity has been concurrent with deep moral and political decay.

How does one explain the fact that the prices of basic food items will skyrocket during Ramzan? It is a well-known fact that a healthy proportion of wholesalers and retailers in this country are quite religious; it is after all traders and shopkeepers who tend to be at the forefront of 'defence of Islam' protests. Everyone knows that the demand for basic food items does not increase so much in Ramzan as to explain the exponential increases in prices. In short, suppliers of goods create artificial shortages to push prices up at a time when they know that consumers will buy regardless of the cost. Now how do many of the trader/shopkeeper 'Hajis' who sport long beards, make regular appearances at the local mosque, and spew out vitriol against 'infidel' America, Israel and India, reconcile their otherwise clear commitment to religion with their clearly exploitative business practices?

Without suggesting that there is a general rule, my experience is that many such 'Hajis' do not seem to think there is any contradiction whatsoever. This dualism is on show in rural areas as well (although I should note that the 'hypocrisy' in this instance is far less damning): sociological research by an American academic Matthew Nelson indicates that many small landowning heads of households (inevitably men) in some districts of Punjab consistently claim they are committed to the Sharia't law of inheritance whereas in practice they are constantly attempting to flout this law and avoid land being passed out of the family by way of marriage.

Of course some segments of society actually have to suffer this dualism egregiously. In the last example, women are the losers because they are perennially denied control over economic resources. More generally women's bodies tend to be the major focal point of the collective hypocrisy of society. On another note, the recent horror in Gojra indicated just how insecure religious minorities are in a society which puts a premium on violent expressions of Islamic piety.

This, however, is only one side of the story. If, on the one hand, the popular classes tend towards dualism, then, on the other hand, the dominant classes are completely alienated from the collective religious ethos. A segment of the elite views any religious activity with the greatest of contempt. As I have written on these pages before, there are very few shared public spaces in our society, a fact that cannot be rectified by putting up lights on public buildings on Eid, or August 14.

While the shopkeeper and trader with one hand on the pulse of working people carries on with business as usual all the while invoking Islamic morals, the elite maintains its exploitative character, unwilling to provide meaningful leadership to correspond to its liberal rhetoric about the need for a secular state and society (which, it must be noted, does not mean a non-religious society). Thus there is no sign that the moral and political decay that afflicts us is to be arrested anytime soon.

One or two more examples might help illustrate how the rot can at least begin to be stopped. I have often hypothesized that many in this society (or at least those with the means) eat more during Ramzan than usual. It is quite amazing how the capacity to eat increases after a day of fasting. But then is the point not to train oneself to make do with less? There is also the strange notion that during Ramzan it is quite normal to not work very hard (or not at all). It is another matter altogether that our work ethic is hardly the best even when we are not fasting, but is one not supposed to be able to go about work as usual while fasting so as to truly develop endurance and patience (which are presumably the virtues that fasting is supposed to inculcate)?

One can imagine how difficult it is for a daily-wage worker at a construction site to fast in the searing heat in late August. If that worker is not up to the task, or for that matter anyone else, should society not grant him the option not to fast? After all, he is not fasting to gain public acceptance. Or is he?

It is now universally accepted that mother's milk furnishes best protection to child against diseases and premature mortality. UNICEF estimated in a 2002 study entitled Facts for Life that 1.5 million infants could be saved every year and the health and development of millions of other could be greatly improved if all babies were fed only breast milk for the first six months of their life. In a similar study, in 2003, headlined How Many Child Deaths We Can Prevent This Year, Jones and others estimated that 13 percent of under-5 deaths could be saved through exclusive and continued breastfeeding until one year of age. Artificial feeding on the other hand is associated with malnutrition, exposure to diseases and increased mortality.

While the life-enhancing value of breastfeeding is well-acknowledged, the practice of breastfeeding, however, is under sustained attack and erosion by the combined might of artificial baby food industry. Over the years, there have been concerted efforts to promote baby food as a substitute for mother milk by inaccurate information displayed on baby bottles and baby food. These industry-led campaigns to insert breast milk substitutes have been resisted by breastfeeding movement activists worldwide. That is why every year, from August 1-7, Breastfeeding week is organised to promote breastfeeding while highlighting the importance of protecting this life-saving practice from commercial influences.

Internationally, the first major breakthrough was achieved with the framing of The International Code of Marketing of Breast Milk Substitutes in 1981, after a long and hard campaign by breastfeeding movement campaigners. While SAARC adopted Model Code for Protection of Breastfeeding and Young Children in 1996, it took the government of Pakistan (GOP) a little less than a quarter of a century in framing Protection of Breastfeeding and Young Child Nutrition Ordinance in 2002. This too was a hard won victory after years of lobbying and advocacy efforts by the civil NGOs and civil society. The Ordinance 2002, though falling short of breastfeeding campaigner's expectations and riddled with loopholes, was welcomed nonetheless as a long over-due step.

Since then, the jubilation which attended the issuance of the Ordinance has been tempered by the government's foot-dragging on the implementation of the Ordinance. Almost 7 years down the road, the actual operationalisation of the ordinance remains a distant dream despite vigorous advocacy efforts of civil society organisations. The only small step the government has taken towards the realisation of the Ordinance, so far, is the notification of National Infant Feeding board (NIFB) in 2005. Worryingly, NIFB also includes industry representatives. Crucially, the key missing link in the implementation of the Ordinance, however, remains notification of the rules and regulations without which the Ordinance cannot be kicked into implementation.

Further delay in the notification of rules and regulation carries serious policy implications for mother and child health and infant mortality. Indeed, the delay has not only contributed to infant mortality rate which stands at 78 per 1000 live births, already high above other South Asian countries, but has also allowed baby food companies to sell their products unchecked. According to demographic health survey of Pakistan, under-5 child mortality rate jumps to 94 per 1000 live births.

These consistently high figures make depressing reading. Therefore speedy implementation of the Ordinance can go long a way in bringing these dismal health indictors down. In the absence of a robust law, promotional practices of baby food industry are flourishing. A glaring evidence of this came to light recently when baby food milk was exposed to be distributed in IDP camps in violation of the international code which prohibits distribution of baby formula milk in emergency situations. Though the promotional distribution of baby milk products was stopped after intervention of NGOs and media, there are, however, fears that the protracted nature of the IDP crisis, in the absence of robust governmental monitoring mechanisms, is likely to provide continuing entry point to artificial baby foods inside the remaining camps. Relief agencies involved in food distribution can play a great role in this regard by closely monitoring the situation in IDPs camps.

These developments only underscore the crying and urgent need for speedy implementation of the Ordinance in order to put a stop to these practices. Most importantly, to ensure better outcomes and protect mother and child's basic right to breast feeding, the notification of rules and regulation that paves quick way to speedy implementation of the Ordinance 2002 is an ardent need. Countless child deaths could have been prevented had the Ordinance been promulgated and enforced through speedy notification of rules and regulations immediately after it was issued in 2002.

With Pakistan already slipping on MDGs health-related target and delayed incorporation of the International Code into domestic legislation, it is vitally important that rules and regulations be notified without further delay. Time to act on this important public health issue is now.

By Irfan Mufti

In December this year, UN member states will meet in Copenhagen to agree on a climate treaty. Civil society is mobilising to ensure that any agreement reached is fair, ambitious, and binding.

Unfortunately, there is currently very little awareness of the Copenhagen conference, and the massive implications of there being no deal, or worse a bad deal. Concurrently, there is little expectation being built to pressure governments to reach a fair, ambitious and binding agreement.

Several organisations have come together to form the climate action networks from Greenpeace to Consumers International to Amnesty International have joined hands to campaign for a good treaty in Copenhagen, and to build momentum that goes beyond the conference and ensures implementation nationally and internationally, and contributes to the overall strengthening of the civil society demand for social justice.

It is no more an activists slogans or environment idealists' cry but a hard fact that the earth is becoming a hotter place and scientists have dismissed "out-of-date" prior predictions for climate change.

A NASA team headed by James Hansen reported that the maximum amount of carbon the atmosphere can safely hold is 350ppm, at least if we want a planet similar to the one on which civilisation developed and to which life on earth is adapted. Since we're already at 390ppm, the message is clear: we don't need to buy an insurance policy to reduce the threat of future warming, we need a fire extinguisher, and we need it now.

Scientists have noticed that the Arctic was losing ice at an almost unbelievable pace, outstripping the climate models by decades. Clearly we'd passed a threshold, and global warming had gone from future threat to present crisis. It wasn't just Arctic ice; at about the same time methane levels in the atmosphere began to spike, apparently as a result of thawing permafrost. Surveys of high altitude glaciers showed they were uniformly melting, and much faster than expected. Oceanographers reported – incredulously – that we'd managed to make the oceans 30 percent more acidic.

Those observations changed everything – and they produced what is almost certainly the most important number in the world. Scientists have heard that message – in March they gathered by the thousands at an emergency conference to declare that the five-year-old findings of the Intergovernmental Panel on Climate Change were dangerously out of date.

It is now very evident that the climate is changing at a dangerous rate and that human activities are causing these changes. It is also true that poverty and climate change are inextricably linked and that one cannot be tackled without addressing the other.

The impact of climate change is already contributing to greater poverty and inequality in some of the world's poorest countries and communities. Industrialisation and carbon-intensive lifestyles in rich countries have led to increased poverty and inequality in poor countries. Therefore, tackling climate change is an issue of justice. It is also ironic that women living in poor countries are disproportionately affected by changes in the climate, as they are most vulnerable to the shocks that affect food, water and fuel resources.

Denying them rights to land, water, forest and natural resources and energy is steadily destroying the lives and livelihoods of millions of people. Further that climate change is exacerbating this and that floods; droughts, famine and conflict resulting from climate change are threatening the development goals for billions of the world's poorest people.

In order to reach to an amicable solution of the climate chaos the UN has to urgently agree ambitious targets for reducing carbon emissions and to find the funding necessary to meet these targets.

We must demand strengthening of the United Nations' overall system of multilateral environmental agreements (MEAs) to protect forests, fisheries, biodiversity, fragile ecosystems, and endangered species.

Adoption of a UN Covenant on the Right to Water, which will be in ever shorter supply due to accelerating climate change and entrenched patterns of unsustainable development, to clarify the role of governments to provide clean, affordable water to all citizens. The UN Covenant must recognise water as an ecological trust and oblige governments to take bold actions to ensure water conservation and water quality, as well as water equity.

A minimum target of an 80 percent reduction in global carbon emissions by 2050 to be set industrialised should adhere to this target and necessary monitoring mechanisms should be set-up with punitive actions against violators.

The long-industrialised countries that have emitted most greenhouse gases up to now, to take proportional responsibility for the adaptive measures that have to be taken, especially by low-emitting countries with limited economic resources. National governments, in choosing development paths for the next decade, must avoid being locked in to a high-carbon infrastructure and should instead strive for a low-carbon economy. Further such decisions should be open for scrutiny and involve citizens and civil society organisations. Rich countries should also dramatically cut their greenhouse emissions and provide additional finance (beyond existing commitments and multilateral agreements) to support developing countries in adapting to the effects of climate change.

Similarly all northern government are to phase out their investments in oil production and devote resources to investments in genuinely renewable energy resource development.

We must ask these questions to ourselves as well that what are we going to do about it? Well, each and every one of us can do their part and we can start today by standing up and saying "yes" to a solid climate agreement in Copenhagen. If enough of us stand up, our politicians will in turn stand up for us.

Though last month's G8 summit of the world's most advanced nations addressed the issue and saw groundbreaking plans made, questions rise as to how long we have left. Several organisations monitoring the drastic changes in climate and trying to raise public awareness are describing the difficulties of mobilising so many countries against a ticking clock.

Climate change is putting life on earth in peril. There is still time to build a greener, safer world, but the clock is ticking.

Copenhagen meeting in December 2009 will decide our destiny. If enough people from around the world show support, our leaders will have the courage to act. Ironically several years have already been wasted talking aimlessly, making promises without concrete actions, dishonouring commitments by national states and international bodies, blame games in global forums and denying basic demands by concerned citizens. If we continue doing it any longer the consequences will be disastrous and catastrophic. It is now clear that the world is sleepwalking into a crisis.

The writer is a Global Campaigner on poverty and inequality and Deputy Chief of South Asia Partnership Pakistan

Email: irfan@sappk.org

The International Monetary Fund (IMF) has increased its credit to Pakistan to $11.3 billion from $7.6 billion as originally agreed last year under a two-year stand-by agreement. Pakistan has received the third tranche of $1.2 billion following the first two tranches of $3.1 billion (received in November 2008) and $848 million (received in April this year). The important question is whether the IMF programme offers a credible solution to the country's macro-economic problems.

The IMF assistance is subject to the borrower's compliance with performance criteria and other conditions. In case of Pakistan, the IMF conditionality provides for reducing fiscal and current account deficits, discouraging government borrowing from the central bank as a source of deficit financing, maintaining high interest rates with a view to reducing inflation, exchange rate flexibility, and increase in tax-GDP ratio. Fiscal deficit, which forms the main pillar of the edifice of the IMF programme, was to be reduced to 4.2 percent of the GDP in FY09, and then to 3.4 percent in FY10. Though the FY09 target was achieved, the FY10 fiscal deficit target was subsequently raised to 4.6 percent.

Having outlined the IMF conditionality, let us return to the question posed in the beginning of this write-up.

At the time when Pakistan went to the IMF, the economy was precariously placed. Trade and current account deficits had reached $21 billion and $14 billion respectively (at the close of FY08), foreign exchange reserves had depleted to $7.31 billion (as on October 17, 2008), and inflation was around 25 percent.

The IMF-sponsored programme is a bailout and not a development package. The purpose is to help the country service its debt, make payment for imports, and build up its foreign exchange reserves. The assistance from the IMF has saved the country from having to default on debt re-payment and make it possible to pay for imports. The reserves build-up from the IMF assistance and the possibility of capital inflows from other donors has improved Pakistan's credit rating (very recently Moody's Investors Service has raised its rating for Pakistan from negative to stable), conveyed a positive signal to the domestic foreign exchange market and has brought some measure of stability to the rupee-dollar parity. However, in the long run the exchange value of the rupee will be determined by the relative demand for (imports, debt servicing) and supply of (exports, foreign capital inflows) foreign exchange. A continuing adverse balance of trade will put pressure on the reserves and further depreciate the rupee.

The IMF-sponsored programme can contribute little to reducing trade deficit, which is the major component of the current account deficit and source of the balance of payment (BoP) problem. One may argue that depreciation/devaluation of the rupee may make exports cheaper and imports expensive and thus help narrow trade deficit. However, the relationship between depreciation/ devaluation and trade balance is not that simple. The effect on trade balance is contingent upon many factors. For a country like Pakistan which depends on import of capital equipment and raw materials for its exports, the increase in import prices increases the cost of production of exportable goods, which adversely affects their competitiveness. Hence, the effect of the depreciation on exports can go either way. As for effects on imports, nearly two-thirds of our imports consist of petroleum products, capital equipment, raw materials and food products for which the demand tends to be largely inelastic. This means that the rupee depreciation is not likely to significantly attenuate the import demand.

Hence, instead of narrowing current account deficit, the depreciation may actually widen it thus aggravating an already precarious BoP position. Although during FY09, the current account deficit fell to $8.86 billion compared with $13.86 billion during FY08, this was due to factors other than currency depreciation. One, due to global recession and weak domestic demand, imports fell to $31.71 billion from $35.39 billion during the preceding fiscal year. Two, worker remittances increased to $7.81 billion from $6.45 billion in FY08.

Besides, trade liberalisation, which is generally a component of the IMF-sponsored packages, has potentially both beneficial and harmful effects. Reduced tariffs can help make exports competitive by reducing the cost of imported inputs. In that event, export promotion will generate employment and incomes. On the other hand, trade liberalization may lead to de-industrialization as domestic firms are priced out by cheaper imports. The result will be loss of employment and incomes.

By forcing the government to slash its borrowing from the central bank as well as providing for a restrictive monetary policy (despite the recent cut, interest rates continue to be high at 13 percent), the agreement with the IMF has helped contain inflation. However, this applies only to demand-side inflation. The package can be of little help in containing supply-side inflation. Instead, restrictive monetary and fiscal policies may aggravate the supply-side inflation mainly by acting as a drag on growth and investment. Already, the growth rate has fallen from 5.8 percent in FY08 to 2 percent in FY09 including 7.7 percent negative growth of large-scale manufacturing.

Although fiscal deficit during FY09 was significantly reduced to 4.3 percent of GDP from 7.6 per cent of the GDP during the previous year, the same was done by reducing developmental expenditure (federal government) from Rs 371 billion to Rs219 billion rather than by increasing tax-GDP ratio, which fell to 9 percent of the GDP at the end of FY09. As the State Bank of Pakistan (SBP) has noted in a recent report, a sharp cut in development spending is neither sustainable nor desirable, because the government is required to increase spending on human capital development and widening the social safety net as an effective antidote to extremism. The projected fiscal deficit for FY10 is 4.9 percent of GDP. In FY10 as well, developmental spending may have to be slashed as the government is counting on highly uncertain capital receipts of Rs178 billion from the Friends of Pakistan and Rs50 billion for internally displaced persons for budgetary support.

In order to contain the public expenditure, the government may phase out power subsidy by the end of the current fiscal year. The subsidy on oil has already been done away with. While the cut in subsidies will help reduce fiscal deficit, it will add to inflationary pressures in the economy. This will tell upon both consumers and businesses and may impede other objectives of the government, such as reducing current account deficit, increasing productivity of the economy and raising the level of savings.

A report titled "A Reinterpretation of Pakistan's Economic Crisis and Options for Policymakers" released in June last by the Asian Development Bank (ADB) maintained that the IMF programme was no solution to Pakistan's problem. The report builds on the arguments of economist Joseph Stiglitz, who said, "Stabilisation policy cannot be separated from growth policy. Failure to stabilise may hurt growth, but stabilisation, in the traditional sense of the term (price stability and fiscal adjustment), does not necessarily lead to economic growth." The report suggests that rather than pursue a restrictive fiscal policy, the government should mobilise domestic resources to improve incomes and overcome supply-side constraints.

Thus the government should shore up the productive capacity of the economy for which it needs to step up the level of investment. This entails increase in public spending through an expansionary fiscal policy. Once the economy gets momentum, public revenue will increase provided loopholes in tax collection are plugged. No doubt, reduction of current account and fiscal deficits is welcome. However, fall in fiscal and current account deficits does not rest on strong fundamentals as it has been made possible respectively by slashing development expenditure and weaker domestic and external demand. If this situation persists, dependence on foreign cash inflows, which are highly volatile, will remain the only way out for Pakistan's economic problems.

Everyone has a 'share' in the current sugar crisis -- the sugar industry, the government and the hoarders

By Jawad Rizvi

In 2007, the country saw an almost 40 million metric tonne bumper crop of sugarcane. The farmers were paid little for their crops, thanks to the mill owners. Following that, a number of incidents were reported in which the farmers had burnt their crops, protesting against not being paid the price fixed by the government of Rs60 per maund (40-kg).

The attitude of the mill owners made sugarcane growers to opt for other crops resulting in a subsequent decline of sugarcane production from 40million metric tonne to 32million metric tonne. This decline helped the remaining small number of sugarcane growers who are currently being paid Rs100 per maund instead of the government-fixed price of Rs80 per maund.

Official data -- as presented to the Prime Minister Yousaf Raza Gilani in a briefing by the Ministry of Food, Agriculture and Livestock (MINFAL) on sugar production -- shows that the total sugar production in year 2008-09 was 3.19 million metric tonne. The last year's production of 1.19 million metric tonne was also used making it a total of 4.38 million metric tones while the estimated consumption was 4.30 million metric tones. Some 0.08 million metric tones sugar was expected to be used next year.

In the similar presentation, the PM was briefed that sugar stock was 1.466 million metric tonne on July 31, 2009, while the next four months expected consumption was 1.4 million metric tonne with average monthly consumption of 0.350 million metric tonne. Thus the country will probably be left with 0.66 million metric tonnes sugar as surplus on Nov 30, 2009, when the new crushing season would be started.

A 'planned' artificial shortage of sugar has been created in the pretext of highest ever global sugar price. In February this year, the local commodity market made the forecast that the price of sugar would cross Rs50 per kg and it would be settled somewhere between Rs53 to Rs55 per kg. This was reported in The News as well but wasn't taken notice of by the decisions makers. For the first time in the country's history, sugar is being sold for Rs55 to Rs56 per kg in retail markets and for Rs50 to Rs51 per kg in wholesale markets.

The sugar industry at the start of crushing season (2008-09) demanded the government to allow duty free import of raw sugar. Their demands were not entertained by the government. This, according to them, forced them to pay Rs150 per 40 kg to the growers for sugarcane against the fixed price of Rs80 per 40 kg.

The Chairman of Punjab branch of Pakistan Sugar Mills Association (PSMA) Javeed Kayani, talking to TNS, pointed out that during the season the average price of sugarcane paid by the millers to growers was Rs115 to Rs120 per 40 kg. So the cost of production, he said, has substantially increased. "PSMA had requested the government to allow only 5 lac tonne raw sugar import and distribute it to the industry according to their production capacity. We also offered the government to import raw sugar itself and just pay the cost of refining to the mills and preserve it for crucial times."

Chairman PSMA, Iskandar Khan, talking to TNS, said the millers proposed a judicial inquiry into sugar crisis. "We repeatedly pointed out the status of sugar, sugarcane availability and production in the country to the government." He said that PSMA had requested the ministry of industry to allow raw sugar import at start of crushing season but no one considered any proposal of the industry. "Now the nation is paying the price for the government's decisions."

The government had also procured around 175000 tonne sugar through Trading Corporation of Pakistan (TCP) from the local mills as strategic stocks. However, it is reliably learnt from both sugar industry and TCP sources that the millers, foreseeing the future trends, had bought back their stocks or slowed the supply to TCP. It takes a simple procedure to buy back the stock from TCP. A mill can buy back its stock by forfeiting the guarantee amount submitted to TCP and paying 25 percent penalty amount on the actual amount.

Chairman TCP Saeed Ahmed told TNS that since he assumed office in March 2009 no buy-back deal was done. He admitted that in the past buy-back deals were made between sugar mills and TCP. He also pointed out that between 2006 to 2008 buy-back deals settlements were decided in court.

TCP had started preserving sugar strategic stocks in 2006 when the first sugar crisis occurred. Since then the government gives targets to TCP to procure sugar and also decided the time of offloading.

Saeed Ahmed pointed out that TCP have some 220,000 tonne sugar stocks with it out of which 75,000 tonne was imported and the rest is local. "During December 2007 to June 2008 TCP had procured sugar at Rs22.37 to Rs28.50 per kg and September 2008 to onward Rs30.50 to Rs32.45 per kg." He said that the weighted average procured price of current sugar was Rs34.01 per kg.

On the instruction of the Economic Coordination Committee (ECC), TCP had given tender of 10,000 metric tonne sugar which would be offloaded into the open market. Saeed said that ECC had decided to offload some 40,000 metric tonne sugar in open market till first week of Ramzan in order to stabiles the sugar price in open market. "ECC had instructed to float three tenders for 40,000 metric tones sugar on the pattern of one 10,000 and two 15,000 each." When asked whether this is sufficient to stabiles the open market sugar price, he said TCP was not a decision making authority, it can only follow ECC's instructions.

When Shaukat Aziz gave TCP the task of procuring sugar and offloading it back to the open market for market intervention, the job was done successfully. TCP had offloaded 50,000 tonne sugar in open market which kept a check on mills and other middle men market which played vital role in creating panic. Now ECC has instructed TCP to intervene into the market with only 40,000 tonne sugar with three instalments.

The delayed decision of importing sugar is another factor which hints at the possibility of government's involvement in sugar crisis. A consignment of 50,000 tonne sugar had reached Pakistan on August 18. The TCP had procured this sugar at $494 per metric tonne.

The international commodity market indicators have been forecasting the shortage of sugar globally in this season. The millers had already pointed out the possibility of sugarcane crop shortage locally. If the situation was clear one wonders why the government did not import sugar when international rates were lower then the current rates.

The current international sugar price is above $514 metric tonne. If the government decides to import, it will get here in at least 40 days. Landed cost of imported sugar is Rs56 per kg and after including up-country freight and other charges it would reach Rs58 per kg. Thus the retail price of sugar could reach Rs60 per kg.

Why then the government, one might ask, did not import sugar in December 2008 of January 2009 when the international sugar price was at $302.50 and 340.01 per metric tonne respectively. Now there is also a need to inquire which party is currently supplying sugar to Pakistan.

Renowned economist Dr Pervez Tahir, pointed out various reasons for sugar crisis. Sugarcane production, he said, is 11 percent lower than the target, naturally affecting the sugar production. "Previous government catered to the millers while the present government is focusing on farmers by fixing a higher price of sugarcane." Higher wheat price also encouraged farmers, said Dr Tahir, to shift from sugarcane to wheat which needs less water.

Dr Tahir doesn't see crackdown as the solution of any economic problem. "The economic issues need economic solutions, not administrative actions." He further said that in the absence of hoarding laws, the government cannot take action against some and ignore others. "For any commodity business, the businessman needs some stock. Business cannot be run without stocking a particular commodity."

The packing up of local governments would encourage non-state militancy

By Raza Khan

It seems the government has taken the decision, though without announcing it in unequivocal terms, that local government system would be done away with and the administration and public services at the local tiers would be handed over exclusively to the respective provinces. Whatever the purpose, the decision does not seem motivated by public interest.

The presence of self-governance institutions at the local tiers is critical. In this backdrop local governments are the basic units of a democratic polity. The construct of democracy comprising various concepts cannot be imagined without the presence of local self-governing institutions. Thus, by deciding to do away with the system in practise, the government is tantamount to hacking the very roots of democracy -- a strange move from a government that takes pride in giving power to the people.

It seems that our decision makers think of democracy in terms of elections of national and provincial assemblies held after several years.

The fact of the matter is that Pakistani class of politicians has always been reluctant to give up powers to the people, which is their due right. One essential way of delegating powers to the people could be to establish and enable the local government system to encourage people's participation in the system. But the mainstream political leaders have never been desirous of doing so mainly because of their feudal ties.

For those in the power, surrendering power and thus authority to the people, so that they could govern themselves, has been against the group interest of the political elite. Due to this reluctance, they opt to keep intact the colonial administrative and governance structures which reinforces the status quo.

Occupation by colonial powers in Asia left legacies of centralised administrative rule more suited to command, maintenance of law and order and revenue extraction rather than governance and participation at the local level. Inherently, colonial models of administration were imposed on local communities mostly with disregard for their historical systems of governance. Pakistani political elite always wants to pursue the modus operandi of colonial rulers with no regard for people's political freedom and rights.

So, the wrapping up of the local government system means the reversal of the process of political change. Since 2001 two successive local government elections have somewhat stabilised the system. With two or three further elections it is expected that the anomalies of the local government system in vogue would be removed or, at least, decreased.

The local self government institutions do not only have concrete benefits by delivering services to people at their doorsteps but have insurmountable and intangibly positive role in evolving a democratic political culture. Pakistan, with a depoliticised and anarchic society, has always been in dire need of such a culture but it could not thrive. At times of extreme institutional breakdown and social anomie the need for taking strides towards evolving of a democratic-political culture was never needed as much as now.

Local government institutions are instrumental in filling the political vacuum by reaching to the population at rudimentary level and bringing them into the governmental loop. Pakistan, particularly in the contemporary era, is a state marked with extensive political vacuum giving birth to multifarious social and political problems and pushing the state into crisis. Extremism and terrorism in contemporary Pakistani society is also fundamentally due to the existence of decades old political vacuum, which has been created by the over-centralised structure of governance. Due to the absence of self-governing democratic institutions at the local level in Pakistan the resultant political void has increasingly been filled by extremist and militant terrorist groups masquerading as the legitimate governors.

The packing up of local government, therefore, would not only increase the political vacuum but would also provide conducive environment to non-state militant groups to come and thrive. Given the history of ineffectiveness of Pakistani bureaucracy, there are valid reasons for one to believe that if entrusted with the local administration they would yet again fail to deliver. This would add to the present mess and the non-state militant groups would be all set to take advantage of this situation. If so happens, the establishment would promote militant groups in remote areas and mafias in the cities as the only option of social control.

Already billions of dollars of public money has been spent on the local government system in the last nine years and if the system is reversed this is going to go down the drain. Yet again it would prove that sustainability and continuity in policies is not a hallmark of Pakistani decision-makers and if so happens one would be compelled to say that what we have learnt from history is that we never learn from history.

The writer is a journalist and researcher pursuing doctoral studies

Email: razapkhan@yahoo.com