Swat after the operation

ON Jan 16, a military spokesman claimed that the Pakistan Army had restored peace to the Swat valley and would wrap up the operation within a few days. He further claimed that the armed militants had been successfully flushed out from the area, and that thenceforth peace would be maintained by the local residents and the police.

But two days later, Swat’s local media reported that the operation was being reinforced and that it continued to be in full swing in the valley. House-to-house search operations were also taking place.

All this comes in the wake of a series of incidents of violence against some well-known personalities of Swat. Thus on Dec 27, 2007, Asfandyar Amirzeb, a former provincial minister and member of the royal family, was blown up in a bomb blast in Manglawar village near Mingora. He was a nephew of former governor NWFP Miangul Aurangzeb and also of former federal minister Gohar Ayub Khan.

Another well-known person to be attacked was Mohammad Sher Khan, who had led a peace march with white flags soon after the military launched its operation in the valley. He narrowly escaped death. Bakhtmand Khan, known for his opposition to the activities of Maulvi Fazlullah, was also blown up.

On Jan 13, Bakht Baidar, a popular political worker and a member of the ANP, was abducted from his house in Mamderhai reportedly by masked and armed Taliban and was later found murdered outside his village. The late Bakht Baidar was known for his progressive political work in the valley. His crime? He had been resisting Maulvi Fazlullah’s agenda from the outset. He was also known to have cooperated with security forces during their operation in the valley. The people of the village had alerted the local security post but to no avail.

When the government first launched a military operation in Swat almost three months ago, the people of the valley had high hopes that peace would soon be restored, and the valley would regain its position as a tourist attraction. It is a pity that a misleading impression is being created all over the country that peace has returned to the valley when the people there live in fear of suicide bombings and killings.

It is plain that the locals firmly believe that the armed militants who were the raison d’etre of the military operation are still at large. The core leadership of Fazlullah’s organisation is still intact and the well-known FM radio still disseminates sermons, threats and exhortations from militants. A number of civilians and security personnel were killed and wounded during the operation as a result of which the whole valley remains in the grip of fear and terror.

The armed militants have the capacity to successfully reach any target and accomplish their mission of terror. Both Asfandyar Amirzeb and Bakht Baidar were killed at a time when curfew had been clamped. A sub-valley of Kabal is still a no-go area for the local population and has been cut off from Mingora, the main hub of business. On the other hand, the security forces exhort the local people to maintain peace in their own villages. Though the people have established peace committees in several villages, they seem to have lost hopes of seeing their valley as a cradle of peace once again.

Most people feel confused and depressed. They seem to be unable to reconcile themselves to the reality of the destruction around them. Life seems to be paralysed for the people of the valley. Target killing is expected to become the norm. The ruthless manner in which the search operation is being conducted and the ensuing destruction of houses in the valley are creating a ripple of resentment among the people. Shortage of flour and continuous load-shedding of gas and electricity have added fuel to the fire.

The people face a severe socio-economic crisis as continuous violence has left most small and medium-sized businesses destroyed. Most of the 558 girls’ schools have either been pulled down or made non-functional. Hospitals, roads, bridges and houses have been destroyed. Though a package for the reconstruction of the valley has been announced by President Musharraf, the government has yet to draw up a proper plan.

One can observe an increase in the rate of begging in different parts of the valley. Hotels alone have reported financial loss worth hundreds of millions of rupees. The people have serious doubts in the ability of the government to come to their rescue.

Service delivery institutions in a large part of the valley are paralysed while the National Disaster Management Authority has banned international humanitarian relief organisations from working in the Swat valley. The people think that they are badly in need of instant relief. They wonder whether the NDMA will remove the ban on international humanitarian relief organisations so that they can help them cope with the disaster.

The general belief is that the fundamental issues which have caused and that will continue to cause resentment that feed militancy have still not been addressed. The issue of judicial reforms is considered to be the foremost. In the past, the people of the valley had the positive experience of a responsive judicial system and an efficient law and order machinery.

While the constitutional status of Swat is yet to be defined, the people would like to have a simple and responsive justice system in place. The development process that is at present based on the revenue record has to incorporate the sensibilities of the local population, if one of the major hurdles in the development process is to be removed. Socio-cultural institutions have to accommodate the marginalised and the emerging middle classes to prevent violence in future.

Devolution and decentralisation of political and economic power in the governance structure have to be adopted as a policy by the federal and provincial governments to stop providing fodder for militancy and extremism. Institutionalisation of tourism, redefinition of the forest policy, management of the use of natural resources and power generation from the Swat River are other significant issues that the people consider essential to be resolved to mitigate the wave of extremism and militancy in the valley.

All fundamental issues could be translated into a holistic vision and could be presented to the 1.6 million people of the valley to bring lasting peace and prosperity to Swat. The people also expect the political parties, the media, civil society and the intelligentsia to come to their rescue to help them start living a peaceful and normal life once again.

The writer is a socio-political analyst based in Islamabad.
khadim.2005@gmail.com

Economic cost of the crisis

VARIOUS estimates have been provided in recent days about the damage to the Pakistani economy caused by the events following the assassination of Benazir Bhutto.

According to a recent issue of the newsmagazine, The Economist, “By the time the first frenzy was over, 174 banks, 22 trains and 13 electoral offices had been looted or set alight. The government puts the damage at $200m. Other responses were more measured, but also discouraging. On Dec 31, the main Karachi stock market, a high-performing symbol of the strong economic growth of Mr Musharraf’s era, opened nearly 4.5 per cent down. The rupee also dived, as capital inflows, on which much of the growth has been based, dried up like a desert stream.”

The stock market has recovered a bit but shows considerable nervousness. The rupee remains under pressure.

In his address to the nation soon after the death of Benazir Bhutto, President Musharraf provided an estimate of the economic loss suffered by the country as a result of the mayhem that followed the murder of the PPP leader. His estimate was Rs200bn, or more than $3.2bn at the plunging exchange rate. The government has launched a programme for compensating those who suffered economic losses in the troubles that followed the Bhutto assassination. But the government needs to go beyond these immediate measures of relief.

There is an urgent need to estimate the extent of the loss. This is needed to devise public policy to rectify some of the damage that was done by the riots and looting that followed Benazir Bhutto’s death and to counter some of the trends that were set in place.

However, it appears to me the damage caused was not the consequence of what The Economist called frenzy. The assets that were targeted were meant to deliberately cause great damage to the economy. Attacks on grid stations, petrol pumps, the banking system and the railway system were designed to disrupt economic activity and cause as much unease among ordinary citizens as possible. Those carrying out these acts of sabotage seemed intent on bringing the country to its knees.

There are many ways of estimating the loss caused by the events that immediately followed the killing in Rawalpindi. When figures such as those mentioned above are used they tend to encompass a number of different things. They include damage to the assets that produce streams of incomes. Burning a bank building or torching a railway station belong to this category. They also include a reduction in current incomes.

This happens when food and fuel supplies are affected and when people cannot get to the place of work. They include reputational damage that increases what financial markets call “country risk”. An increase in country risk will discourage foreign capital flows into the country. The sharp plunge in the stock market may have been produced by the outflow of capital. And they include sentiment within the country that may inhibit entrepreneurs to make investments.

There cannot be any doubt that Pakistan has suffered all these losses. The effect will not only be on the current rate of economic growth but also on the country’s long-term economic prospects.

Let us begin by investigating the reduction in the current income of the people who were directly affected by the disturbances that followed. This happened in several different ways. My rough guess is that about a million days of work was lost. This would translate into a loss in monetary terms of some Rs500m. Probably a similar amount was lost by traders whose businesses were disrupted. Taking the two together implies damage of a billion rupees or about 0.15 per cent of gross domestic product.

There is also the need to estimate the impact of the destruction of economic assets that will affect the stream of future incomes. My impression is that the figure mentioned by the president refers to the destruction of assets. If this estimate is correct then it would appear that the activities that followed the killing of Benazir Bhutto resulted in the loss of about 0.3 per cent of the economy’s asset base. This will produce not an equivalent decline in the rate of economic growth but something considerably larger.

The assets lost have to be rebuilt; their absence will affect even those that continue to function. The asset destruction could reduce the rate of GDP growth in the current fiscal year by as much as 0.7 per cent and also mean a decline in the long-term growth rate of 0.2 to 0.3 percentage points a year.

The next area of concern is foreign capital inflow on which Pakistan relies very heavily to invest in the economy. Since the domestic savings rates remain low, without an adequate inflow of external capital Pakistan cannot conceivably sustain the rates of growth it aspires to. The recent coverage of the situation in the country by the foreign press has seriously eroded the confidence of external investors and foreign capital markets in the country’s future.

The Economist put Pakistan on the front page in the issue in which it covered the death of Benazir Bhutto. The cover story appeared under the title of “The world’s most dangerous place”. A few months ago, following the attack on the convoy that was bringing Ms Bhutto from the airport, the Newsweek had put Pakistan on the cover with a similar title. This kind of reportage does not endear a country to potential investors. This has certainly happened in the case of Pakistan.

As is generally recognised, it takes little to reduce confidence but a long time to build it. It is hard to say as to how long Pakistan will have to work before it reappears on the radar screens of foreign investors. Until that happens — or until Pakistan can increase its own rate of savings, something that cannot be done quickly — the country will see a decline of at least one percentage point in its medium-term rate of growth. Decline in foreign flows and the flight of capital from the country may also reduce the current rate of growth by as much as half a percentage point.

Foreign nervousness about the country’s future also hurts exports, an already weak sector in the Pakistani economy. Foreign buyers are reluctant to place orders when they are not sure about the state of security and long-term viability of the country in which the suppliers are located. In the period immediately following 9/11, Pakistan saw many buyers depart from the country. Some of them returned but remained cautious. This is happening once again. This will also affect the rate of growth in the current financial year and may impact the medium term.

In sum, I believe that unless urgent action is taken by the government, the rate of GDP increase may decline by as much as 1.5 to two per cent in 2007-08 and the medium-term rate of growth by a full percentage point. This administration demonstrated its ability to deal with economic crises caused by unusual events. It performed admirably after the earthquake that did so much damage a few years ago. What should be the government’s response this time around?

Mind the gap

“LET me tell you about the very rich,” begins one short story by F Scott Fitzgerald. “They are different from you and me.”

Except that, these days, they are not so different at all. Today’s rich are not the aristocratic butterflies of yore, but a more prosaic lot. To get into the richest 0.1 per cent, it is statistically helpful if you are a middle-aged man working in either finance, law or property and living in London and the South-east.

Not a terribly diverse or exotic bunch then, but nonetheless remarkable because rarely in post-war British history has there been such a concentration of wealth among so few people. This inequality is stark enough to be remarked upon by some unlikely people, including the private-equity baron Sir Ronald Cohen (who has warned it could cause riots) and the boss of Marks & Spencer, Sir Stuart Rose.

His recent claim that “the West End can’t get enough diamonds. But the poor are getting poorer” is examined in depth in today’s financial pages. This anecdotal evidence was given further statistical ballast last week by the Institute for Fiscal Studies. It found that the very rich have done very well under Labour since 1997. For the most part, they have raced away from average earners, with the gap only narrowing for a little while after the dotcom bust at the start of this decade.

The economists found that 47,000 UK taxpayers had annual incomes over 350,000 pounds, and observed that “income inequality is currently at its highest levels since the late 1940s”. And they were looking at income alone, which is bound to understate the gap between the rich and the rest. Big salaries buy big assets: houses, lucrative investment funds and so on. As they grow in value, so the wealth gap widens.

Does that matter? If Britain is more unequal, it is also better off, with incomes under Labour up across the board. Surely, ministers argue, that is what counts? That case falls down, however, when it comes to housing or education or other things termed “positional goods” by economists.

— The Guardian, London

Inculcating sensitivity

HOW often do most of us come across a disabled person, say a visually or hearing challenged individual, in mainstream life? How visible are they in offices or behind shop counters? The truth is that there is often little room for the disabled in the real world.

The more fortunate of them occupy a secluded enclave that protects them from a brash and materially driven world that is insensitive to their needs.

But even those who have access to special schools and training centres, do they ever assimilate into mainstream society? Are they able to establish an independent, sustainable lifestyle? With such very concerns in mind, two ground-breaking entrepreneurial ventures have been launched in Karachi by a small team of dedicated and idealistically motivated individuals. The School of Leadership (SOL), an organisation which works with the burgeoning youth of the country, (we have an exceedingly high ratio of young people in Pakistan) decided to widen their horizons and engage with the physically challenged youth in our society.

The first venture established by them is a bakery called the Backerei which is entirely managed and owned by a clutch of hearing challenged young people. Before launching the project, a baking professional was flown in from Germany to conduct a 10-week training of the bakery staff and teach them the subtleties of quality baking. The bright yellow facade of the bakery and whimsical wrought iron trim beckon cheerfully, but one can miss the shop if whizzing past the broad road on which it is situated. Inside, a chalk board displays the list of items on sale.

Initially, the hearing and speech challenged staff was assisted by an interpreter but now they are completely independent of any such aid. Conversation with the customers is naturally limited and really quite redundant since the wholesome looking bran bread and chunky chocolate cupcakes speak for themselves. At present the bakery is still being supported by the SOL which allows the proprietors to keep the profits but absorb any losses incurred. The model, of course, is for the venture to become entirely self-sufficient, in which event the business will pay back the initial loan which will then be invested in another project.

Rangeela, billed as an ethnic café, is the other SOL venture tucked in between several other shops lining a commercial street in Defence. The café was set up on the same business model as the bakery and obviously some imagination and effort has been invested into it as evidenced by the vibrant truck art which is emblazoned across the interior of the café. In fact, the whole place mimics a truckers’ chai khana complete with blazing pink and orange plastic coated benches and chamak patti trim on the walls. Sadly, however, the café wears a slightly dismal look and doesn’t seem to be attracting the trendy, image-conscious café-goers of today.

The young fresh-faced boy manning the shop is a hearing and speech challenged intermediate graduate who expressed his satisfaction with his current job despite the fact that business is slow. After all, as he readily admitted, were it not for this opportunity, he didn’t know what he would be doing.The government maintains a two per cent quota for jobs for the hearing impaired (however, no census has ever been conducted to determine the actual numbers of such persons) and some efforts have been made by the corporate sector to accommodate them. For instance, there is a KFC outlet in Karachi that is staffed by the deaf and hard of hearing. But such efforts are few and far in between. In general, there is a pressing need for job opportunities and economically viable vocational training.

In fact, this is one of the major demands put forward by the Pakistan Association for the Deaf (PAD). Among a host of other needs, they also put forward the demand to be included in sports and other recreational activities.

Recently a programme dealing with the problems faced by the deaf and dumb was aired on one of our local channels. Where the show touched on several weighty matters, participants also expressed simple, but heartfelt disadvantages like not being able to follow television programmes. Most of them agreed that they prefer to spend all their time in their special schools rather than at home with their families where they get bored.

It is glaringly obvious that we need to inculcate greater sensitivity within each of us and in society as a whole to include the disadvantaged in mainstream life. Simple measures like adding sub titles on television cannot be very hard. Perhaps, the rudiments of sign language can be introduced in school curricula so that signing becomes a more common means of communication.

In fact, other such socially sensitising workshops seeking to build bridges between parallel worlds can also be conducted as part of the norm. Today, more than ever we need to learn compassion and tolerance and to value diversity. If the disabled can help us to reclaim these values, then we will be gaining something far more valuable than any assistance we can offer them.

chughtaiz@gmail.com