Selling the Roosevelt

PERPETUALLY dogged by controversy, the proposed sale of PIA’s Roosevelt Hotel in New York is back in the news for all the wrong reasons. Allegations are rife of gross conflict of interest compounded by indecent haste in selling the prized property at a throwaway price. As was the case in the abortive privatisation of Pakistan Steel Mills, the sale of the Roosevelt seems to lack transparency and fiscal propriety. Charges abound of a deliberate attempt to downplay the property’s true worth. The government-appointed financial advisers to the sale have assessed the hotel’s value at roughly $400 million, a far cry from the $1 billion or so that some New York developers are reportedly offering for the property. The consortium of advisers, incidentally, is led by Citibank, Prime Minister Shaukat Aziz’s employers until 1999. The offers made by developers in New York are not as unrealistic as the government would have us believe. In a sale blocked

by PIA Corporation, Alpha Capital was said to be offering $8.6 million for Saudi Prince Faisal bin Khalid’s 0.1 per cent share in the Roosevelt. Using this price as a benchmark, PIAC’s 99.1 per cent stake could be worth as much as $947 million in the open market. A bid price of $400 million, on the other hand, would yield PIAC just $122 million after deduction of taxes and liabilities. This sum is clearly insufficient in terms of funding a new fleet, the primary reason cited by the government for privatising the Roosevelt. Opposing the sale, PIA’s board of directors also points to the hotel’s robust profitability and the expected increase over time in the property’s value. Seen against this backdrop, charges of graft and official wrongdoing were perhaps inevitable.

Corruption is nothing new in Pakistan. Since 1999, however, it has undergone a dramatic makeover. It has become more sophisticated, less brazen and far more profitable. ‘Ten per cent’ kickbacks and wilful defaulting on bank loans have given way to attempts — not always successful — at ‘third-party’ buyouts at deflated prices and through all manner of short cuts. The twirled moustaches have been replaced by designer suits and ties, the hangers-on and heavies by equity market manipulators and financial experts. Perhaps because political clout tends to be short-lived, there seems to be a great hurry these days to sell off profitable state assets as quickly as possible. At the same time, the ‘development’ lobby for whom the country is just so much real estate — and which naturally abhors judicial activism — is cutting a rapacious swathe across Pakistan. Long-term national interest or the welfare of the environment hold no meaning for these robber barons who can always cut and run to foreign havens and off-shore accounts when the tide turns once and for all. Sadly, we have no tradition in Pakistan of holding the powerful accountable for their actions in the here and now. That task will be left to vindictive successors with their own axes

to grind and transparency in governance will remain a distant dream.

Improving road safety

IT sometimes helps to put a problem in hard, cold numbers. The National Road Safety Secretariat recently confirmed what has long been apparent to any town or city dweller who sets foot outdoors: the country’s roads are becoming more dangerous by the day. According to the draft national Road Safety Plan prepared by the NRSS, traffic accidents are taking a heavy economic toll estimated at over Rs100bn a year, or 1.5 per cent of GNP. The cost could be even higher given that serious disability or the death of a breadwinner can push families into a cycle of poverty from which they may never emerge. Extrapolating nationwide statistics from sample data, the NRSS estimates that road accidents cause nearly 500,000 fatalities or serious injuries every year. This figure rises to roughly two million when minor injuries are taken into account. Besides the human misery involved — pain and suffering, bereavement, loss of livelihood — this is a burden that the country’s cash-strapped healthcare system can ill afford.

Developing a national-level road safety strategy was long overdue and the initiative taken by the NRSS deserves full support. The Road Safety Plan envisages safer design with an emphasis on protecting pedestrians and cyclists, as well as quality construction and maintenance of road networks. Raising awareness of road safety is another key goal. It also highlights the need for increased funding and enhancing the institutional capacity of relevant agencies. Simply throwing money at the problem will not, however, produce the desired results. Official corruption is a major factor imperilling road safety in Pakistan, and little can be achieved without tackling this key area. A UNDP study shows that 95 per cent of licensed taxi and bus drivers never took the official traffic police test — this, clearly, is not possible without graft. It is also well known that vehicle fitness certificates can be easily obtained against a small cash payment. As a result, a large number of dangerous vehicles continue to ply the roads without let or hindrance. Violators of traffic rules know that an unofficial ‘fine’ will settle the matter even if they do get caught, while the traffic police is hand in glove with transporters who force their drivers to complete their routes as quickly as possible at breakneck speed. Nor is there much check on the recklessly driven tankers and dumpers that have claimed a large number of lives in recent years. These are serious institutional problems that money alone cannot solve.

Reining in cantonment boards

RESIDENTS in Karachi’s cantonment and DHA areas might feel a sense of relief after reading Friday’s news that the Senate Standing Committee on Defence recommended a ban on developing any more residential schemes until existing infrastructure is repaired. The committee also asked DHA and the cantonment board to devise plans for proper storm-water drainage and submit proposals in one month; failure to do so would be seen as a violation of rules. This was badly needed as even today, weeks after heavy rain, parts of DHA are still inundated with water and peoples’ lives are hugely inconvenienced. The poor response to a multitude of residents’ grievances only strengthens the city government’s demand that DHA be brought under its authority as at the moment there is no sense of accountability. What is clear is that DHA needs to spell out its responsibilities and then ensure that it carries them out effectively. Not only are tax-paying residents miffed at the poor services, there are serious reservations about development projects being carried out without taking several factors into account, like environmental concerns. There are many civic groups resisting ‘the privatisation of the beach’ for example. It is therefore hoped that the Senate committee’s proposed ban is put into effect immediately. All development projects should then be judiciously reviewed.

The committee has also asked DHA to set up meetings with residents associations to find ways to redress their grievances. This should be an ongoing process, especially as cantonment residents are a disenfranchised group. Several residents pay water taxes despite not having water lines and are unsatisfied with the water that is supplied to them through tankers. Cantonment boards must remove residents’ apprehensions that their interests are purely commercial — acquiring more land, building new projects — and they do not care for the problems of those who live in their jurisdiction.

Pakistan: a wasted childhood

MEN and women retire at 60, while nations enter their adolescence at that age. The future of the nation after another 60 years would, however, depend on the quality of experience during childhood. In the case of Pakistan, the childhood stage (first 60 years) has generally not been good, even though there have been some happy moments.

Our ‘childhood’ has been spent coming to terms with our ‘sibling’, India. Most of this time has been spent in trying to grab back a piece of asset wrongly allocated to the Indians. This asset has determined our macro policies, which have been mainly India-centric.

We started our journey with a fight in 1948, the only one out of the many we would have, in which we had partial success as we took back a part of our lost territory. Since then we made two serious attempts, 1965 and 1999, by staking our all, to take back the territory by force, with no success. In between, India hit back (1971) and chopped us into two.

While our efforts to take back the territory by frontal attacks failed, we continued to plan constantly, brainwashing the nation to take the task of taking back our territory as priority number one, even above the priority of building on the territory that we had.

Having lost hope of getting our due through frontal force, we devised a strategy of using our Islamists by playing on their religious beliefs and convincing them that it was not just a territorial dispute but a holy war — a war in the way of Islam, a jihad.

We smirked, while these jihadis kept the Kashmir issue on the boil, not knowing that all this while our ‘sibling’ was making itself economically strong, and educating its workforce and following a sustainable method of managing itself through democracy and making friends in the world.

When our strategy of keeping Kashmir on a ‘slow boil’ got irritating for our ‘siblings’, it got its friend, the chief power of the world, who also happened to be our benefactor, to come down on us like a ton of bricks, forcing us to close the tap on our ‘slow boil’ strategy.

The jihadis trained to take on our ‘sibling’, not knowing what to do with themselves, turned on us.

In our fervour, to get back our share of inheritance due to us at Partition, which has coloured our vision about everything else in life, we had no option but to maintain a large, energetic and well-trained strike force, paying for it through our nose. This strike force engaged itself in what it was trained for, for only six weeks (three in 1965 and three in 1971) of the 60 years since it came into being.

All these 60 years, the strike force kept getting bigger, because each commander wanted to immortalise himself as the one who would get back the due family inheritance.

In this pursuit, he kept exaggerating the dangers created by the ‘sibling’ by upping the ante and convincing us that the ‘sibling’ would gobble us up if we did not have a deterrent, and, as a result, frightened us into diverting more and more of our resources to the strike force.

Since the energetic and well-trained strike force had nothing to do for 59 years, 46 weeks out of the 60 years of its existence, it turned its attention to managing us. It used its well-protected and well-funded institutional tradition and a well-trained officer cadre to subdue all other institutions, by branding them as inefficient and corrupt, in the hope that people would have no option but to depend on them and in the process keep them very fruitfully occupied.

Amongst the few happy moments of our ‘childhood’ is the achievement of our scientists to sneak technology from the West to make the atomic bomb, earning us the awestruck respect of the Muslim world and some poor downtrodden countries, and the suspicion of the powers that be.

It also brought with it its downside, as the powers that be now want to play a part in micromanaging us, in order to thwart any chance of someone coming to power here who does not toe their line completely. So it keeps the carrot and the stick hanging over us to make sure we stay in line, without regard to what is good for us internally. The deterrence of the bomb, its main justification, could not, however, convince the strike force to reduce its conventional size.

Are there any other good memories of ‘childhood’ that we can recall with a glow of happiness, as we move into adolescence?

Education: Yes, our private schooling system has become better than it used to be. Resultantly, the gap between the education levels of our elite and the masses has widened.

The government secondary and higher school level has collapsed. There has been much publicity about the government doing great things for the elementary education system, but the main beneficiaries have been the contractors who built the new schools and supplied

‘bastas’.

No attention was paid to recruit, retain, motivate or discipline the teacher who is the lifeline of any education system, because it required focused dedication and no monetary gains for the planners.

All this while, our ‘sibling’, despite its poverty and internal political squabbling, concentrated on education as its top priority, at the elementary, secondary and higher education level. It used its inherited advantage of having a significant English-speaking population to convert its huge population into an asset rather than a liability. We, on the other hand, lost the opportunity of taking advantage of the same inheritance of English-speaking traditions.

Health: Yes, there are far more doctors than used to be, because of the increase in medical colleges, even though the quality of the product is questionable. The large numbers of doctors have, however, not helped the masses, because we have not been able to induce them to work in the countryside, to provide the much-needed help to the majority of our population which is in the rural areas, The quacks have, through the indiscriminate use of unhygienic injections and drips for material gains, given us the gift of the erstwhile unknown epidemic Hepatitis B/C.

Yes, we have more sophisticated tertiary healthcare, in the form of sophisticated heart and kidney hospitals, but then, we have not devised a system where a poor man can also benefit as easily as one who can pay. All this while our ‘sibling’ has also been working on its health system.

While its primary healthcare may be the same as ours, its tertiary health system has developed so much that it is marketing itself as a healthcare destination for citizens of the richest countries. Resultantly, more and more people from the regional and western countries are heading towards our ‘sibling’ for complicated medical treatment, because it is efficient, reliable and less expensive.

Economy: Yes, our per capita may have gone up, if we discount the sceptics’ allegations that it is a juggling of figures. But it has resulted in a greater gap between the rich and the poor. A tea boy in a company would be grateful to get Rs5,000 per month while the boss of the company could be making Rs1,000,000 per month, a gap of 200 times in the same organisation.

Has anyone paid attention to the income of the landless peasant or a rural immigrant living on the outskirts of cities, while we continue to squabble over the percentage of people living below the poverty line (less than a dollar a day), with the government claiming victory, while everyone else is crying foul? All this while the poor remain a statistic.

The phenomenon of there being economic growth when a strongman comes to and stays in power for long is repeating itself, the last distinct example being in the 1960s.

The problem is that each time growth is so warped (while we are advised to wait for the trickle-down effect) that it leads to a strong backlash from the poor who get ignored in this big industry-driven growth and we go back to square one.

Our worst memory of our ‘childhood’ years is that we have not been able to learn to manage our ‘household’. At the end of 60 years, we are behind the starting line.

We are still talking of declaring emergencies to sort out internal strife; debating the option of declaring martial law; denying ourselves the right to vote for whoever we want to; changing the rules of the game as the match proceeds; and making attempts to change the referee if the match is not going our way. If we have not learned how to coexist and do no have a system based on the rule of law, who will manage our affairs for us and how can we begin to improve matters?

Unless we can sort out or overcome inheritance issues with our ‘sibling’, restrict our strike force to the professional role stipulated for such professional forces, let other institutions rediscover their stipulated role, I am afraid we will be talking in similar, or even worse terms, at the end of the adolescence period, and our father, who said to the first parliament, “I am sure with your support and cooperation I can look forward to Pakistan becoming one of the greatest nations of the world” will continue to turn in his grave.

tasneem.noorani@tnassociates.net