More aid, less utilization

Pakistan has been quick to ask for large financial aid for mega projects but slow, or too slow, to utilize that. Hence, some of the aid funds for essential projects are often forfeited, leaving them incomplete. And if the unutilized aid is in the pipeline after the donors had committed that, that could mean a penalty of half a per cent interest on that.

Instances of misused or unused assistance are many, one of them being that of the Kalabagh dam project for whose feasibility study we had obtained financial assistance from the World Bank.

The large Ghazi Barotha hydel project, also funded by the World Bank, was also delayed for a long time despite the fact that there is acute shortage of power in the country. Similar is the case of the National Drainage Programme, costing Rs 31 billion and funded by the World Bank, the Asian Development Bank and the Japan Bank for International Cooperation.

The project should have been in operation in all its details by the end of the last year but may not start for one to two years unless the best efforts are put in and every stake-holder involved cooperates readily.

The problem with such projects is that while the planners and experts come up with them with their sunny visions, the donors approve them with some changes and the external funds are also lined up.

Those who are charged with executing them fail to go ahead as the requisite funds are not made available to them or there are too many mid-way shuffle of officials or sudden policy shifts following a change of government or that of the minister concerned.

Meanwhile, the funds lapse as the loan closing time has reached without the project being ready for the next instalment of the aid as has happened in case of the National Drainage Programme.

The programme was launched in 1998 in Lahore with the World Bank and WAPDA as primary sponsors with a great deal of fanfare at a two-day conference. The programme estimated to cost Rs. 31 billion then was to rid the country, particularly Punjab and Sindh of two of the worst cancers of our agriculture - salinity and water-logging. The scheme aimed at throwing the saline waters of the two provinces into the sea.

This writer attended the highly instructive conference with some of the best irrigation experts taking part. I asked the then chairman of WAPDA, Shamsul Mulk, if the project did not work as smoothly as envisaged, would Sindh not be left with the saline waters of Punjab? I also asked him whether the excess of salt water from Punjab and Sindh pumped into the sea would not add to the salinity of the sea water at the mouth of the river and destroy the coastal marine life, like shrimps, prawns and lobsters found in the coastal waters?

He said the sea was too large to be made more saline by the waters of the river with excess salinity. I said the sea around Karachi has already the problem of excess salinity because of the little water flowing into the sea and shrimps, prawns and lobsters have become scarce and small in size. Evidently, though well meaning, he or his experts had not given a thought to this problem.

The manner the left Bank and right Bank out fall drainage systems fouled up the eco-system in southern Sindh last year following the rains is too well known to need repetition. The design of the system was faulty and needs careful revision.

Now about a third of the programme has been completed, work on another third is in progress and the remaining third has to be tackled. But the World Bank has stopped the loan after six years as the loan sanctioning period expired on December 31.

The Pakistan government has asked the Bank to extend the loan sanctioning period by a year, but the experts don't think the programme would be completed in a year. Hence the pragmatic Japanese have extended their part of the assistance until December, 2006. The World Bank has already diverted 100 million dollars of its assistance to drought relief in Sindh.

The provincial governments have asked the federal government to arrange for Rs. 1.35 billion from other sources to complete some parts of the programme under execution or provide that from its own resources.

The centre instead has decided to ask the Asian Development Bank to provide this extra amount as well to wind up some of the loose ends of the projects under execution. The ADB has said it would consider the request and let the centre know the answer later. In all, 30 per cent of the World Bank's fund remains unutilized.

The overall cost of the project of Rs. 31.4 billion was reviewed by the military regime and revised downwards to Rs. 28.7 billion about three years ago by eliminating the high consultancy cost, which is a feature of the World Bank aided projects.

In Sindh projects under the UNDP worth Rs. 700 million are affected now. Of these projects worth Rs. 80 million are in progress. The projects costing Rs. 500 million have not yet started. Projects for Rs. 150 million more are in the tendering stage.

Evidently six years after the programme was launched with a great deal of fanfare it is a patchwork quilt - with 30 per cent of the work completed, 30 per cent more under partial execution and 30 per cent yet to start. And this has been despite the insistent official stress on lining the canals to prevent seepage and the spread of salinity and water-logging. Sindh wants the current year's financial allocation by the Centre to be raised by Rs. 500 million to keep drainage programme going in full speed.

How can we achieve seven per cent economic growth this year and eight per cent next year as desired by Prime Minister Shaukat Aziz if the basic schemes which contribute to that were abandoned or neglected midway in spite of the availability of foreign assistance? Surely basic agricultural projects demand far more attention than they do and the machinery at the bureaucratic level has to cooperate with him.

Lack of capacity o execute large projects in time has become a marked feature of our economic life, particularly in the public sector. So the World Bank has been talking of capacity building.

The Bank's vice-president for South Asia Praful C. Patel is regarded as an expert in this areas, after his success in this field in Africa. The World Bank is giving technical assistance to develop such capabilities.

We need such capacity creation all the more in areas where the centre and provinces have to work together on the same project and coordinate their efforts. Along with that there is delayed start of the projects for which aid is made available.

To overcome this problem the Asian Development Bank came up with technical assistance grant of 450,000 dollars. The Bank wants to eliminate the current excessive delay in the start-up of the aided projects. It wants to reduce the time gap between the approval of the loan and actual implementation of the development projects.

The ADB is concerned with the delay as it has already given 55 loans to Pakistan with a total aid of 5.2 billion dollars. Under its country strategy for 2005-2006 the ADB is committed to provide about 2 billion dollars through 23 loans. And it wants Pakistan to get the best out of such prolonged assistance.

Now we have aid for early start of projects. We have large and varied aid funds for reforms to make the projects a success. And it seems Pakistan needs a prize for completing the projects on time and not delaying it unduly.

At the moment there is a penalty for delaying the completion in the form of forfeiture of the loans or a penal interest of half a per cent on the loans not used in time as agreed.

Now we are raising funds from the donors for a whole variety of reforms. We have borrowed large sums for judicial and police reforms. We have got aid for tax reforms or CBR reforms, including 100 million dollars from the World Bank in December last. We recently received 300 million dollars for banking reforms.

In May last year we got 55 million dollar assistance for a public sector capacity-building project designed to support the government's economic reforms. The project will help train 500 public servants and enhance their capacity in key ministries and agencies.

After all that, the World Bank protests that the key services often fail the poor people. It maintains that the donors must deliver foreign aid in ways that promote better services for the poor.

In countries like Pakistan, let apart the poor, even the middle class does not get the basic services. Worse still while those who pay for the services do not get them like water supply or regular power supply, those who do not pay get the services by force, stealth or through official rules.

The World Bank and the ADB think that if they sweeten their advice to the officials with a certain amount of aid, in fact a loan most of the time, the advice would become more acceptable even if that my not be put into practice in full.

Hence more and money is coming forth to implement the reforms, though most of the reforms are the good of the people and the welfare of the poor to need such sweeteners.

The issue now is not only of receiving the aid but also of monitoring its use and ensuring that it fulfils its purpose and delivers the service it promises to the people, particularly the poor and low incomes groups in the middle class.

If banking reforms mean the banks will eliminate the small saver or penalise him for trying to save small money, while the top bosses of the banks get increasingly large salaries and perquisites, that is the reverse of reforms.

The poor need some cushion in the form of savings with reasonable interest rates that does not ignore the real inflation rate or the basic cost of living. A newspaper report says that the IMF now insists that the real inflation in Pakistan is close to double digit, and not seven per cent as officially claimed.

So, the new financial year would begin with a double-digit inflation unless effective anti-inflationary measures are adopted at this stage. But the Pakistani officials are reported to have opposed that suggestion arguing that would affect the public sector growth.

The fact is that the market reality and the experience of the people show that the IMF officials are right in this regard, and that inflation cannot be controlled through the monetary mechanism of the State Bank alone exercised through the banks.

We need a far larger package than what the State Bank provides and the Bank itself admits its inadequacy in this area even while doing the best it can without hurting economic growth.

Defiance to dream about

"Isn't it pretty to think so?" Those concluding words of Ernest Hemingway's "The Sun Also Rises," a novel of postwar disillusion, became a generation's verbal shrug, expressing weary melancholy after a war waged to make the world safe for democracy.

Eighty years on, there of course remain reasons for wondering whether Iraq's stride toward popular sovereignty will lead to a durable and admirable democracy. But it is a humbling privilege for the rest of us to share the planet with the defiant Iraqis who campaigned and voted, and the coalition's superb warriors who made voting possible.

Democracy is more than a mechanism for picking leaders; it is institutions of pluralism and attitudes of majority forbearance and minority acceptance. But democracy is a mechanism for selecting leaders.

Can the leaders selected on Sunday - who must choose by a two-thirds vote a three-person Presidential Council, then write a constitution under which there will be another election for new leaders, all by December - lead toward a secular state respectful of civil liberties?

If the government generated on Sunday cannot produce ample security - and electricity - it will be evanescent. To forestall majority tyranny, the new assembly will reflect proportional representation to a degree that would test the coalition-building skills of a mature parliamentary system: Any party with even 1/275th of the vote gets one of the 275 assembly seats.

Two-thirds of the voters in any three of Iraq's 18 provinces can veto the constitution, which means the Kurds or Sunnis could. In which case Iraq will be back to square one. But where exactly is that? As a communal moment, Sunday's elections should fuel Iraqi nationalism.

Largely because of a misunderstanding of Hitler - a racist, not a nationalist; he supplanted national symbols with party symbols - nationalism has acquired a bad reputation. But nationalism - a civic identity organized around shared history and commemorated on sacred days, such as Jan. 30 - can trump sectarian differences, and fuse where they fracture.

Days before the voting, Abu Musab Zarqawi, the terrorist, and Edward Kennedy, the senator, contributed to Americans' understanding of the struggle in Iraq - Zarqawi by his clarity, Kennedy by his confusion.

In a speech intellectually dishevelled and morally obtuse, Kennedy said, "Our military and the insurgents are fighting for the same thing - the hearts and minds of the people."

His weird idea is that while the coalition struggles to persuade Iraqis to try democracy, with its compromises and vicissitudes, the insurgents are trying to persuade Iraqis to embrace a rival idea of social organization.

Actually, the two significant factions of insurgents, who have the totalitarians' characteristic penchant for candour, do not even pretend to value consent achieved by persuasion.

One group, the former Baathist regime elements, aims only to return to their totalitarian vocation, as George Orwell understood it: "a boot stamping on a human face - forever." These elements know that only intimidation by the vilest violence can serve them. Imagining them, as Kennedy does, as campaigners for a rival doctrine is, well, weird.

The other insurgents, those with radical Islam's agenda, reject modernity root and branch, and so reject the idea that governments derive legitimacy from the consent of the governed. -Dawn/Washington Post Service

Palestinian polls and after

The first Palestinian election since 1996 has been greeted with great international fanfare of publicity and a groundswell of expectations that it will usher in a new era of peace and stability.

Both Bush and Sharon expressed satisfaction that 'their man', Mahmood Abbas (Abu Mazen) had been elected president following the death of Yasser Arafat. Most pundits and politicians seem united in the fond belief that Abbas has been given a mandate, first, to eliminate corruption within the Palestinian Authority, and, secondly, to rein in the Palestinian resistance and deliver the Palestinian people's consent to a deal with Israel.

All claim that this 'pragmatic' politician, who has called for the demilitarization of the intifada (uprising) will be better able to negotiate peace than his predecessor. The assumption behind these claims is that it is the Palestinians who bear the major responsibility for the continuing state of war with Israel.

History is thus re-written in an account which excises certain rather important facts: the expulsion of 75 per cent of the Palestinian people in 1948; Israel's brutal occupation of the Palestinian lands since 1967; the doubling of the number of illegal settlers under Rabin in the 1990s, during the Oslo negotiations; and the collapse of Palestinian living standards as a result of Israel's closure policy.

More recently, Israel's Apartheid Wall, when completed, will enable Israel to annex 58 per cent of the West Bank; between October 2003 and September 2004, the Israeli army killed 698 Palestinians (3,334 in the four years since the intifada began in September 2000); since 2,000, Israel has destroyed 4,000 Palestinian homes.

The elections, deemed 'free and fair' by the international monitors, and in which, according to the central electoral commission, the turnout was at least 66 per cent, is said to represent the will of the Palestinians.

However, there appears to have been serious flaws, hardly surprising in a country under military occupation. Firstly, in the run-up to the election, the Israeli army did not keep its promise to ease restrictions on the movement of Palestinians.

Secondly, the initial official turnout figure seems to have been over-sanguine: there is doubt over the eligibility of some 40,000 people whose names appeared on an old residency roll and of a further 30,000 who were neither registered nor on the residency roll.

Moreover, only 21.9 per cent of the 120,000 Palestinian residents of East Jerusalem were able to vote because of Israel's obstruction based on its claim to sovereignty over the entire city.

Thirdly, according to the commission, 775,146 Palestinians voted out of a total of 1.1 million who registered. However, this represents only 43 per cent of the 1.8 million Palestinians eligible to vote, some 700,000 of whom didn't register.

Despite these flaws, Mahmood Abbas emerged the clear winner, with 483,039 votes compared to the 153,516 who voted for his nearest rival, Mustafa Barghouti, secretary-general of the Palestinian National Initiative, who supports the idea of a single state.

In general, the left did well: Barghouti together with the Democratic Front and Popular Front candidates - third and fourth respectively - won 201,478 votes or 25.9 per cent of the turnout.

The militant Islamic organizations, Hamas and Islamic Jihad, boycotted the election. Abbas's victory would seem partly to flow from the fact that his Fatath movement had the most extensive party organization.

So, will his election bring peace any nearer? Israel's principal motive in embarking on the Oslo negotiations in the early 1990s was the containment of the Islamic resistance.

Arafat and the PLO came to be seen as the only force which could effectively suppress or at least contain them. Today, 30-35 per cent of Palestinians support Hamas and Islamic Jihad, though in Gaza the figure rises to 50-60 per cent.

Arafat had perhaps some control over them at the start of the 'peace process', but as the situation deteriorated this became less and less possible. Contrary to what Bush and Sharon keep repeating, during the Oslo negotiations Arafat certainly tried to suppress them.

On several occasions, he arrested Islamic militants - only for ordinary Palestinians to force their release following a demonstration outside the prison. Abbas will be no more able to exercise control over the militants than Arafat was.

There is no serious political difference between the two leaders except one of style - Arafat adopting a more demagogic, populist approach. Moreover, there is no evidence that the majority of Palestinians perceive Abbas any differently from the way they perceived Arafat.

Both he and they know that it will be impossible for him to sell a peace deal to the Palestinians that falls significantly short of their aspirations. It is Israel's refusal to countenance any serious concession - ending the occupation, dismantling the settlements or conceding the right of return of the Palestinian refugees - that will make it impossible for Abbas, as it was for Arafat, to sign an agreement.

To do so would be political, and probably also physical, suicide. (Sharon's much-vaunted pullout from Gaza looks to be mere window-dressing: even if it happens, Gaza will remain a vast prison camp, the withdrawal itself a means of enabling Israel to strengthen its hold over the West Bank and legitimize the occupation as a whole.).

Israel wants Abbas to be a colonial policeman but the more of a puppet he becomes, the more he cedes influence to Hamas and the less use he is to Israel. One thing is certain: the Palestinians will not surrender.

Iraq: the uprising goes on

The suicide bomber came in mid-afternoon. The few survivors who saw the pale-faced man described him as red-haired with a long beard. "He asked some of the people at the gate if they would be kind enough to move their cars so he could park," Abu Ali says.

"He was very polite. He was driving a Caprice. Then people noticed that he was parking in a way that wouldn't let him drive away." The one memory all of them had was that the bearded man was playing music and religious recitations on his cassette player. "In one sense," Abu Ali remarks, "he was already dead."

Baghdad today is a place without names. Abu Ali - the 'father of Ali' - really does have a son called Ali but he pleads for me, as he nervously stirs his over-thick cappuccino again and again, to cross his family name from my notebook.

Each time I meet Abu Ali, he has survived another catastrophe. Last year, it was the kidnapping - and release - of Ali. Now he has escaped his own death, but it cost five weeks of painful recovery in the Yarmouk hospital.

Even the Arab company for which he works must remain anonymous. It had already received a threat - "a phone call from something called the "20th Battalion" of some organization with a religious name" - but the company's officials had not yet found out what they were supposed to have done to upset the caller.

The office building stood close to the road. Then the bomber came. Abu Ali talks quickly, anxious to recall every detail so that he can reassess his own miracle of survival.

"I had brought my brand-new BMW to work for the first time and I was worried that it might get scratched if I parked it in the garage so I parked in the street outside and asked the security guard to keep an eye on it."

His name was also Ali, and Abu Ali noticed that he looked miserable. "The poor guy was just sitting there and he told me: "I don't feel alright this morning. I feel upset." That's why he was reading the Quran. He read it all day, right up to the last moment."

There was a meeting of all the senior staff early that afternoon - did the bomber know that? - but Abu Ali decided to go home early. "I went out the back way, through the kitchen where I found the cooks, Um Ghassan and Um Bassem.

The company had fired them a few weeks earlier and I had interceded to get them their jobs back. They were grateful to me. I offered them a lift home in my new car. Um Ghassan said to me: 'We pray all the time that God protects you.' I will always remember that this is what she said."

The women accepted Abu Ali's invitation and they walked together to his car. "Ali the guard was there and I opened the door and was about to start the engine when I suddenly realized I had left my lap-top in the office. So I left the women there and said I'd be back in a moment." This was the moment that the red-haired man arrived in the Caprice.

"I had returned through the back room of the office and that's when there was the great blast of an explosion. I was hit on the back of my head and side by pieces of concrete, probably from the roof.

The building protected me. But I got up and managed to get to the street in two minutes and I saw my car burning. There were 28 cars on fire, all flaming away. Ali the guard, the poor guy, was gone.

It isn't right to say he died - he absolutely ceased to exist. There was nothing of him left. He was atomised." Not so Um Ghassen and Um Bassem. "They were killed at once and we found bits of them, but we couldn't find their heads." Here Abu Ali refuses another cappuccino and looks almost desperately around the empty, cold cafe in which we are sitting.

"Two days later, we found both their heads on the roof of the building. One of them had got stuck in part of the roofing and it took an hour to get it free. And now here am I, a secular man, thinking of their sacrifice. Did they die for me? Is that how I should see their sacrifice? I am not a religious person, but I probably reflect more now upon God and what this means."

I comment, not unkindly, that there seems to be a terrible irony in all this; that the suicide bomber who was driven by his faith should indirectly have encouraged Abu Ali by his mass murder - eight innocents were killed in the explosion - to contemplate more seriously the same faith. "Committing suicide is something forbidden in Islam," he says.

"Killing yourself for God or your country - that's something else. But killing innocent Muslims? You know, I was told by the survivor of another bombing that he saw the suicider with the bomb in his shirt actually dancing in the street and singing a song, a verse about beautiful angel women. Think if it - he was dancing. He was in a trance, thinking of the women who would reward him in a few seconds' time in paradise."

I think about the word "trance" and remember the inspiration of dreams among the Sunni Wahhabis, how Mullah Omar of the Taliban announced that he had led his militia into battle after a dream that he must end corruption in Afghanistan, how Al Qaeda men once told me that they discussed their dreams. "It is an obsession with the bombers," is all the secular Abu Ali will say as we leave.

Out in the street, a three-Humvee US patrol creeps past, cars speeding away from it lest they be caught in an attack. I look at the American soldier on the front machine gun. His eyes are razor thin, squinting, watching so hard that I wonder if it won't change his face. He, too, has his obsessions, of course, for he is looking for men who have dreamed dreams and believe they are already dead. -(c) The Independent