Ten per cent growth target

ENCOURGAGED by a higher economic growth in South Asia, especially in the light of similar developments in Southeast Asia over the years, the World Bank would like to see a sustained 10 per cent economic growth in this region for the next nine years until 2015. It is the same period set by the United Nations to halve world poverty.

If that is achieved, poverty in South Asia can be reduced by two-thirds, says a World Bank report on economic growth in the region. But without changes in economic policies, such a rapid economic growth may be quite difficult to achieve, the Bank cautions. However, it expresses optimism on this front, stating that the goal can be achieved by increasing investment, enhancing labour quality and addressing gaps in income.

These facts are not unknown to our rulers, but they need to think more constructively and along the lines of effecting changes in the political, economic and social systems in order bring about such a transformation smoothly and steadily.

The report praises Southeast Asia where an economic growth rate of between seven to 10 per cent has lifted millions of people out of poverty. That process is continuing. The Bank says that Bangladesh, India and Pakistan had a growth rate of more than five per cent for the last five years. That rate has to be doubled for the next eight to nine years and sustained after the economy reaches the take-off stage.

But politically and socially, Pakistan has more problems than other South Asian countries. Pakistan is the only country with a religious and ideological base and remains the bastion of feudalism. The tribal order continues to dominate in Balochistan and the North West Frontier Province. Feudal values and social systems prevail in Punjab and Sindh and the jirga system, that settles local disputes, is operating as a parallel judiciary. All that affects the political order.

Bonded labour, which reflects the worst form of exploitation, prevails in large parts of the country. The courts are now coming up with judgments liberating such oppressed people, but it is very difficult to enforce such these verdicts fully in the present environment.

When it comes to elections, whether local bodies or national polls, tribal and caste values prevail, and influential families reach the assemblies in large numbers.

The effort to improve the system by setting graduation as the minimum educational qualification for seeking elections has failed to produce positive results, and has only increased the number of bogus degrees in the country. Political horse-trading and bartering of votes for money has become all too common.

All this vitiates the democratic process. Such members of the assemblies welcome strong men or military officers as rulers and sustain them in office and are amply rewarded for that. Such men and women in the assemblies do not support the idea of a modern, liberal economy without the usual cartels and monopolies. Instead, they are in favour of strengthening ancient traditions that are based on local power and money. How can we eliminate these tribal and feudalistic elements? How can we spend less or save more while investing in a feudal society which is spendthrift and exhibitionistic?

They know the price of their farm products will keep on rising because of the periodically enhanced support prices and their income will appreciate constantly, as in the case of sugarcane that is being sold for Rs80 per 40 kilos instead of Rs40 and above. Hence they can afford to spend lavishly and are not constrained to save and invest.

Their ostentatious living style is copied by those below them and their rivals and neighbours, so there is little saving in the rural areas. In fact, rural indebtedness is very high.

Most feudal lords live in the city and spend their money there, if not in London and Dubai. They borrow from banks to invest in their farms but, in reality, spend the money on limousines and do not repay the loans. Savings in such a society are very small. We have the lowest saving rate in South and Southeast Asia. So the rate of investment is also small.

South Asia’s politics are also vitiated by the frequently tense relations between India and Pakistan. This has seen both countries investing a huge amount of their scarce resources in their armed forces and increasing their defence outlay year after year. Pakistan has this year raised its military spending to Rs250 billion. The fact is that India’s military expenditure is more than the total budget of Pakistan. This forces Islamabad to spend more and more on its military establishment.

The hope that after India and Pakistan became nuclear armed states, they would reduce their expenditure on conventional weapons has not materialised as India tries to acquire as many advanced and costly weapons as possible, including F-16s and F-18s from the US, AWAC and nuclear submarines.

The South Asian economy, particularly Pakistan’s economy, is skewed for these reasons. Pakistan cannot set it right in isolation when the larger power in the region behaves in such a unilateral fashion.

But the World Bank confines itself largely to the economic sphere and prescribes the vital prerequisite of 10 per cent growth for increasing investment. The investment rate in Pakistan has been around 16-17 per cent of the GDP for long. Last year it rose to 20 per cent, thanks to privatisation efforts. That rate has now to be raised to 25 per cent of the GDP within two to three years and then to 30 per cent. The investment has to be real and not book investment or exaggerated investment for saving tax. Such investment should be in the productive and profitable sector and in value-added areas.

This would require a switch from unrestrained consumer banking or consumer extravaganza to real investment in the production of quality goods.

The World Bank says that Pakistan’s high growth rate is based on consumer spending, that, too, mostly on imported goods. The new approach should be based on larger manufacturing and higher exports to reduce the $11 billion external trade deficit.

Larger investment usually follows higher national savings, but national savings as well as domestic savings have been too low in Pakistan. Domestic savings last year amounted to only 10.3 per cent of the GDP.

To make matters worse, the banks have slashed their interest payments on savings and deposits, except for long-term deposits for fixed interest. That has been acting as a disincentive to savings when plenty of money is available all round for making profitable deposits. The government, however, has increased the savings rate on national savings schemes, particularly for schemes for the elderly, retired and widows. The higher investment is now coming through privatisation, and to a small extent, the stock exchanges.

The second prerequisite for higher growth is improved labour quality, according to the World Bank. Labour has to be made more productive and more disciplined. The government has to create conditions wherein there are fewer strikes and far less power breakdowns. Sudden declarations of holidays should also be avoided.

The government is coming up with schemes for imparting training to a large number of workers and technicians. Twelve high-grade engineering colleges are to be set up. In the highly competitive world of the WTO, we need the best technicians and skilled workers. We have not only to train them, but also to pay them well. The Bank wants the government to address the gaps in income so that while the rich get richer, the poor don’t get poorer.

Very high pay and perquisites for a few at the top and those who work for multinationals and very low pay for all others will not do. That will eventually increase the tension in the factories and the companies as a whole.

A healthy economy is one where everyone is paid reasonably and not one based on a new cost system. The government has now come to deal with the perquisites of the higher income group for taxation purposes. The World Bank wants distinct improvements in infrastructure and business environments in the region. The power shortage and frequent breakdowns in Karachi show what can happen when the infrastructure is very poor. Power shortfalls have meant not only major industrial and commercial problems, but also a potentially explosive social and political crisis. The people at the top are trying to solve the problem, but are seen as groping in the dark as the situation becomes uglier.

Anyway a happy event in the Saarc region is the coming in force of Safta with tariff concessions for 4,872 items in its member countries, including Pakistan. What really matters is not what the treaty says, but how well it works and fulfils its promise and the hopes of millions of South Asians.

The Saarc countries have a long way to go to become like the Asean states. They have to overcome their political differences and build new bridges of understanding and cooperation. They have to be flexible in giving concessions to each other. And they have to resolve to eliminate the deepening poverty in their midst and become a happier region.

How much more can Pakistan do?

AS far as the Bush administration is concerned, Pakistan may be a “key strategic ally”, but it is also a hotbed of Islamic militancy, an enemy of Israel, and a nation that barely disguises its hostility to the US.

Even worse, Pakistan just never seems to “get with the programme,” as they say in Washington. This unflattering viewpoint was underlined for all to see during US Secretary of State Condoleezza Rice’s recent visit to Pakistan.

Secretary Rice reportedly demanded President Pervez Musharraf inflict more punishment on the tribes of North Waziristan and clamp down on Taliban supporters in Balochistan. She demanded Pakistan intensify efforts to root out Al Qaeda supporters and curb its Islamic parties.

One really wonders how much more Pakistan is expected to give. Since coming to power, President Musharraf has been forced by Washington to first abandon, then declare war on its creation, the Taliban, and give up Pakistan’s historic strategic interests in Afghanistan. Then, Musharraf was forced to purge Pakistan’s ablest generals, who had put him into power. They were replaced by officers approved by Washington.

ISI was transformed from one of the world’s finest intelligence agencies into a compliant servant of the government that, like CIA, abandoned its professionalism and duty to the nation by allowing itself to become politicised.

The struggle for freedom in Kashmir was abandoned and reclassified as “Islamic terrorism”, handing a huge victory to the Indians, who gleefully crowed they were getting revenge for Kargil. To the outside world, Pakistan seemed to admit it had indeed been a hotbed and sponsor of terrorism.

There are persistent reports that Pakistan’s nuclear arsenal, its key to survival against mighty India, has been put under some degree of US “supervision”. Just how much remains uncertain.

Britain’s nuclear weapons cannot be used without US approval. Have Pakistan’s nuclear weapons been similarly put under joint control? We don’t know, but we do know that the Bush administration wants to deprive Pakistan of its nuclear weapons. In fact, Bush even told Britain’s Tony Blair in 2003 that once he finished off Iraq he would “go on” to deal with Saudi Arabia and Pakistan.

On top of all this, Islamabad has been forced to wage war against its own people as part of the so-called war on terrorism. Washington’s insistence that Pakistan break its traditional autonomy agreement with the tribes of the NWFP destabilises Pakistan and undermines its national integrity.

Each step along this painful route of submission has increasingly angered and dismayed Pakistanis. President Musharraf has bent over so far backwards that his head is almost touching the ground.

It’s hard to think what more he can do to meet Washington’s never-ending demands. As Foreign Minister Khurshid Kasuri pointedly observed, the government now has 90,000 troops in Waziristan battling its own tribesmen.

Pakistan’s reward for obeying Washington’s requests is three billion to four billion dollars. But this amount is not enough to make up for forcing Pakistan to repeatedly violate its own national self-interest. If Pakistan is truly America’s “most important ally in the war on terrorism”, as Washington claims, then the price for this cooperation should be much higher.

The US is spending $6.1 billion a week alone in Iraq, and another $1.5 billion to $2 billion weekly in Afghanistan. To quote the late President Ziaul Haq, three to four billion dollars per annum is “peanuts.”

Even hints from Washington that it may finally supply modern F-16 models hardly compensates for what Pakistan has been through. Nor does it seriously alter the dangerous military imbalance between Pakistan and India. The US just announced it will provide $2 billion of arms and trucks to its Afghan sepoys. Surely, Pakistan deserves better? Perhaps it’s time for President Musharraf to start demanding a change. — Copyright Eric S. Margolis, 2006

No bad executions

IN his temperate concurrence to a decision on capital punishment last week, Justice Antonin Scalia made a remarkable claim: “One cannot have a system of criminal punishment without accepting the possibility that someone will be punished mistakenly. ... But with regard to the punishment of death in the current American system, that possibility has been reduced to an insignificant minimum.” Scalia sneered that those “ideologically driven to ferret out and proclaim a mistaken modern execution” have been unable to find “a single verifiable case to point to.”

The justice’s remark could not have been more ill-timed. It came in the midst of a remarkable series by the Chicago Tribune casting grave doubt on the guilt of a man executed in Texas in 1989, Carlos De Luna. The state executed De Luna for the death of a gas station clerk in 1983, and the condemned went to his death proclaiming his innocence. From the beginning, he named an acquaintance, Carlos Hernandez, as the killer. According to the Tribune, friends and family of Hernandez, a violent felon who died in prison in 1999, have now come forward to say he boasted of the crime and of letting De Luna take the fall for it. The Tribune’s investigation calls into question the eyewitness evidence presented at trial. It shows how leads concerning Hernandez were not followed up.

De Luna’s case is far from the only one of its kind. Only last year the Houston Chronicle detailed the case of Ruben Cantu, executed over a decade earlier for a murder and robbery back in 1984. The lone eyewitness, who was shot repeatedly during the crime but lived to identify Cantu, says he was pressured to do so. Cantu’s co-defendant claims he committed the robbery with someone else. The Tribune had earlier revisited the case of Cameron Todd Willingham, executed in Texas more recently for setting fire to his home and thereby murdering his children. The science in the case was obsolete; it isn’t even clear the fire was caused by arson. Then there’s the case of Larry Griffin, executed in Missouri in 1995; prosecutors there are no longer convinced they got the right man and have reopened the matter.

Scalia is correct that innocence has not been proven in these cases. There is no DNA to test, after all. What’s more, as Scalia notes, the Virginia case of Roger Keith Coleman — whose posthumous DNA testing finally confirmed his long-disputed guilt — shows that caution is appropriate in proclaiming any convict’s innocence. Still, it seems highly unlikely that all of these convictions are solid. We hope never to see convincing evidence that an innocent person has been put to death. Avoiding that unthinkable likelihood is one reason capital punishment should end.

— The Washington Post

Coordination, not the blame game

OVER the past few months, hundreds have been killed in Afghanistan in a series of violent incidents that have been blamed on the resurgent Taliban. Clearly, US-backed President Hamid Karzai, who took oath in 2002, has failed to enforce his writ in most of Afghanistan. He has not succeeded in disarming the militias, and the warlords continue to perpetuate their rule in several parts of the country.

Even in Kabul it has been difficult for the government to enforce its writ as the May 29 riots, sparked by a deadly traffic accident involving US soldiers, clearly showed. There has also been a rash of suicide attacks, a phenomenon unknown until recently in Afghanistan. Clashes with the Taliban are increasing in frequency and intensity. President Karzai has accused Pakistan of having a hand in these acts stating that the Taliban operated from Pakistani soil where they had sanctuary. According to him, Pakistan’s intelligence agencies were giving military training to people and then sending them back to Afghanistan with logistics. This claim seems to have been accepted by the foreign media and the international community.

Richard Holbrooke, former US ambassador to UN, in a recent article observed that “Our strategic ally (in President Bush’s phrase) in Pakistan is giving sanctuary to Taliban and Al Qaeda.” Nato officials often say that the Taliban recruit, resupply and coordinate their war effort from Pakistan, while the new Afghan foreign minister, Rangin Dadfar Spanta, told a press conference that Taliban leaders and other “international terrorist groups” were directing their operations while based in Pakistan”.

Similarly, Chris Patten, former EU commissioner for external relations, alleged in a Wall Street Journal article that “if we are really going to get to the core of Afghanistan’s inability...we must tackle Pakistan.”

Despite disclaimers from Pakistan at the highest level, President Karzai seems to be obsessed with Pakistan’s involvement in the crisis inside Pakistan.

All these accusations defy logic. Pakistan has a direct stake in the stability of Afghanistan and its record of consistent support to that country speaks for itself. The geo-strategic location of Pakistan at the confluence of three volatile yet vital regions motivates a policy seeking multi-sector intra-regional cooperation for peace and prosperity. The stability of Afghanistan is a key factor for the energy, trade and transportation corridor that Pakistan wants to establish with Central Asia.

Indeed, the history of our bilateral relations with Afghanistan has been chequered and marked by hostility. A brief look at the past would help.

Afghanistan was the only country that opposed Pakistan’s admission to the UN leading to the acrimony that has since underlined bilateral relations. This, in turn, had its roots in Kabul’s refusal to accept the Durand Line as the valid border between the two countries, a line drawn in 1893 that was the frontier between Afghanistan and British India. Afghanistan’s push for a Pakhtunistan state found support with India and the former Soviet Union, deepening Pakistan’s insecurity perceptions.

The Soviet invasion of Afghanistan in 1979 and Pakistan’s response and untold sacrifices in the defence of Kabul resulting in the eventual Soviet withdrawal led our policy planners to believe that the threats posed by their western neighbour were finally over.

This optimism did not last and even Pakistan’s support to the Afghan Mujahideen and its help to three million Afghan refugees for several years could not overcome Afghan hostility. Pakistan’s role in the Afghan political settlement has been viewed with a sense of apprehension and suspicion. This expressed itself in attacks on Pakistani diplomats stationed in Kabul and the burning of the embassy premises in 1992. The brief Taliban rule was perhaps the only period when Pakistan’s relations with its neighbour were trouble-free.

The continuing controversy about Pakistan’s role in supporting Taliban terrorists has added to this bitterness. The abortive attempt on former Afghan president Sibghatullah Mujaddadi’s life in February has also been blamed on Pakistan. Mujaddadi himself accused the ISI of being behind the attack.

It was reported that Karzai had presented President Musharraf in his February meeting with hard evidence implicating Pakistan in the recruitment, training and equipping of militants and suicide bombers. Karzai also raised the issue with President Bush and informed him that Pakistan had been handed over intelligence information about the whereabouts of Taliban leaders including Mulla Omar. The list of 100 suspected terrorists and information about the location of alleged training camps turned out to be outdated and incorrect.

Nevertheless, Bush raised the matter with Musharraf. Pakistan’s reaction was understandably harsh. Musharraf termed the accusations as “a deliberate, articulate conspiracy”, and accused the Afghan intelligence for the disinformation. Charges were levelled against the Indian consulates in Afghanistan that were accused of actively supporting terrorist acts in Balochistan.

The current controversy is particularly regrettable as since the 1979 Soviet invasion Pakistan has hosted more than three million Afghan refugees at great cost to its internal political stability and economy. Even now Pakistan is extending support for the reconstruction of Afghanistan. Despite its resource constraints, Pakistan has given $200 million assistance in goods and services while it committed another $50 million at the last pledging conference in London.

To meet Kabul’s concerns on infiltration Pakistan has also deployed 80,000 troops along the rugged border; and has suggested the fencing of the porous border, a proposal that has been rejected by Afghanistan.

No other country has done so much nor has such a large stake in stability and peace in Afghanistan as Pakistan. Karzai must realise that the current blame game is not in anyone’s interest. He needs to have greater control over his advisors and eschew the tendency to rush to the media on sensitive issues. Efforts should be made for an enduring Pak-Afghan entente that has eluded us so far.

The US-led occupation and the failure of Karzai’s government to deliver have angered and frustrated the population and are responsible for the deteriorating security situation in Afghanistan. Indiscriminate bombing by US forces and their overbearing attitude have further fuelled the outrage and helped in the revival of the Taliban.

Noted Afghan observer Ahmed Rashid has rightly observed that during the past five years there has been no western military presence in three of the four provinces in southern Afghanistan that constituted the Taliban heartland and that today are the battleground for their revival. The promise of western funding and reconstruction have not been fulfilled. The Pushtuns have seen barely any change in their lives. The vacuum in the south has been filled by the Taliban.

Mutual recriminations and polemics over infiltration are not the solution. Karzai should have a more realistic assessment of ground realities. He must concentrate on creating stable conditions for the economy and society to improve the life of ordinary Afghans and enable them to resist the influence of the Taliban.

President Karzai’s obsession with Pakistan and his incapacity to acknowledge the ground realities is pathetic. If he doesn’t believe in Pakistan’s explanations, let him listen to the advice of his US friends. Recently, The New York Times observed that “The past few months have seen stronger than expected Taliban military revival, a lengthening list of Afghan civilians accidentally killed in American military operations...and rising public disenchantment with Washington and its leading ally, President Hamid Karzai.”

Afghans have been well known for their hostility towards foreign troops on their territory. They have made an exception in the case of the Americans, who helped them shake off Taliban misrule and then backed a global rebuilding effort on the model of the post Second World War Marshall Plan.

More than four years later, Afghanistan’s patience is running out. America’s military presence is seen as being narrowly focused on Washington’s own agenda of hunting down Al Qaeda fighters and indifference to Afghan civilian casualties and Afghanistan’s own security needs.

Given the sensitivity of the issue and our absolute need for peace and stability in Afghanistan to have an assured energy supply from Central Asia, and more importantly, to avoid a negative political fallout on Pakistan from violence in Afghanistan, the matter should be tackled with patience and forbearance. Every effort has to be made to placate Karzai and convince him of our good intentions instead of trading accusations.

The Indians are keen to fish in troubled waters. The commitment of $650 million aid for Afghanistan’s rebuilding and the opening of diplomatic posts in sensitive cities reflect New Delhi’s long-term policy objectives to keep Pakistan and Afghanistan antagonistic towards one another. We should not fall into this trap. Pakistan must continue its efforts to engage Afghanistan in a sincere dialogue, both bilaterally and along with Iran to counter Indian machinations.

The writer is a former ambassador