BY now even the less informed in this country know that major challenges await the new PPP-led government that will take office in Islamabad soon. The foremost immediate challenge is the growing budget deficit and the need to tackle it by raising the price of petrol (the subsidy on diesel having already crossed Rs15 per lire) and the tariff for electricity by 50 per cent (the price for gas also requiring a similar correction) over a relatively short period of time.

This price adjustment could have been less abrupt and the blow less painful for the people, had the Musharraf regime revised prices gradually over time, or even if the caretakers had done the needful.

Even if one were to accept government claims (although based on questionable data and challengeable assumptions on price indices for food items to estimate the poverty line), that poverty declined by 10 percentage points to roughly 24 per cent from 2001/02 to 2004/05, there is little doubt that a significantly higher number of households will be pushed below the poverty line by the double digit food inflation over the last three years and the expected sharp revision in oil, electricity and gas prices.

Moreover, although the reasons for the high rate of inflation, particularly of food items like wheat and edible oil, can partly be blamed on poor government planning and faulty policies, high price levels of food grains (largely because of international developments) reflect a secular trend and not a short-term supply shock.

Therefore, any government wishing to tackle this issue, without devising a clearly and comprehensively designed strategy on two key aspects requiring a tricky balancing act, could find itself compounding its own and our woes: a) the economic and moral sense of continuing to deny our farmers decent compensation for their produce (while paying Australian and American farmers international prices for the same wheat); and b) the sustainability and structure of the flour subsidy, i.e., whether we should be providing a general subsidy from which even the rich can benefit or a more focused one that only assists the more vulnerable segments of the urban population.

Similarly, the high international cost of energy and further rises in oil and electricity prices are a reality that we all may have to live with. Protecting consumers from these increases through large subsidies for electricity (that also benefit the more affluent households) is no longer sustainable.

The other immediate challenge is the widening trade and current account deficits for the year threatening to exceed $14bn and $10bn respectively. Financing the latter deficit from remittances of Pakistanis settled/working abroad or from capital flows (borrowings and proceeds of privatisation or floatation of GDRs) is becoming increasingly difficult, putting additional pressure on the rupee with its implications for domestic inflation.

The lesser known, although equally daunting, challenges that will need to be attended to in the medium to long term are as follows:

a) The rapidly growing inter-provincial disparities (with Punjab having experienced faster economic growth than the other provinces) and the widening gap of incomes and assets between the rich and the poor. In this context, it is important to note that the benefits of economic development during the previous five to six years have largely accrued to the richer, educated and more skilled sections of society. The bulk of this growth was witnessed in the relatively skill-intensive sectors of finance, telecommunications, IT and oil and gas, and in the capital intensive industries of cement, motor vehicles and motorcycles.

Those with limited education and skills, the majority of the labour force, could not participate meaningfully in these sectors. For political stability and social harmony it will be necessary to launch poverty reducing initiatives to help such segments.

b) One question that is being increasingly debated is the sustainability of the strong growth performance in recent years, raising questions about the claims of the government that this trajectory represents a clear shift to a higher longer-term growth path. It would not be amiss to highlight that our present level of investment is merely 21 per cent of GDP and it will not be possible to even maintain, let alone raise, growth rates of six per cent with such rates.

c) Moreover, our national rate of savings is at least five percentage points of GDP lower than our rate of investment, requiring continued dependence on external loans and resources to finance such investments. Not only is such a route unsustainable, it also reduces the margin of error in identifying and implementing projects financed from resources generating liabilities in foreign currencies.

d) Our tax to GDP rate is a rather low 11 per cent which has to be raised to generate adequate resources (apart from re-aligning our expenditure priorities away from defence) to improve the access to, and quality of, education (by enhancing expenditure from barely two per cent of GDP to the Unesco recommended four per cent), basic health and safe drinking water facilities.

Presently, the system does not extend to certain sectors like services, retail and agriculture, and taxes the rich lightly. There is no justification for the selective taxation of incomes from different sources and the exemptions or the light taxation of some sectors e.g. investments in speculative activities like the stock/equity market and real estate ‘disincentivising’ investment in productive activities like manufacturing, something which cannot surely be the objective of any rational tax policy.

Furthermore, the income tax to GDP ratio is a mere 2.5 per cent and when adjusted for corporate income tax, reveals a personal income tax to GDP collection of perhaps less than one per cent.

e) The expansion and development of the industrial sector, and particularly of the value-added export sector, is constrained by our poor rate of literacy and lack of skilled manpower, which requires better planning and devotion of more resources. Although some effort has been made in this area in recent years much remains to be done. The efficiency of this industrial structure also needs to be improved by changing the incentive structure through a speedy removal of the anti-export bias in the industrial and import tariff policy so that exports can generate the foreign exchange earnings that not only finance the import bill but also meet the servicing requirements of foreign direct investments relating to royalties, dividends and profit repatriations. These have already exceeded US$3.4bn compared with the US$3bn currently needed to service our foreign debt.

f) Finally, there is a need to reduce the cost of doing business, something strongly linked to good governance. And the performance of the government would have to pass through the mesh of accountability that talk shows on private TV channels provide every night, a development that the two main political parties have not fully comprehended, and through which they will have to pass in a country that has changed radically from the times when they last ruled.

However, the above is not to suggest that the new government will only inherit challenges. There are some positive features of the economy and of developments in recent years that also need to be chronicled.

a) The size of the formal and informal economy has grown significantly (and the outlook is still fairly cheerful) over the last few years on which foundation, the structure of a strong and buoyant economy can be constructed. Also, as a result, problems that were difficult to tackle in the 1990s can now be handled relatively easily.

b) The country now has a large and decent network of roads and telecommunication facilities (and now a port in Gwadar) that can help accelerate the process of economic growth.

c) The Pakistani diaspora has prospered and managed to amass a large base of financial and other assets. It now has access to resources a proportion of which it is in a position to remit to Pakistan in search of attractive returns on lucrative investment opportunities. This explains the US$5bn per year of remittances now being received.

d) Finally, the earnings of the oil producing countries have risen manifold from the four to five fold increase in oil prices in the last six to eight years. Since they will face a variety of restrictions to invest these surpluses in the developed countries, particularly the west, the expectation is that they will divert some of their savings to countries like Pakistan to diversify their investments, even if they perceive them as risky, for higher returns.

This would be a formidable agenda that would test the political acumen of the sturdiest broad-based coalition to embark upon and implement, while struggling simultaneously, to come to grips with mega demands like those for a framework of provincial autonomy beyond the parameters set by even the original 1973 Constitution.

THE Pakistan People’s Party is no stranger to winning elections. In the past whenever it has formed a government the PPP has been accused of lack of political delivery by its detractors. However, these accusations have never translated into an electoral rejection for the PPP in any fair election. This has puzzled many of its detractors and supporters alike.

PPP’s political opponents have always argued that the disconnect between the PPP’s lack of delivery and electoral results has been because of the Bhutto charisma. The PPP supporters on the other hand believe that there has always been a heady mix of emotion generated by the Bhutto charisma but there has also been some well directed delivery that has kept the party going.

The importance of being Zardari lies in the fact that he is the first PPP leader without the endless reserves of Bhutto charisma to compensate for any shortfall in delivery. It would appear that Mr Zardari is aware of this dynamic.

His statements since the election results have focused on the need to change the system. While this is an old PPP territory, it has not been a driving element in recent years.

Mr Zardari therefore realises that as he in his own right keys into the PPP’s emotional banks he has to ensure that delivery does not fail. No other popular leader in Pakistan’s history has probably been under so much pressure to deliver. The key issues in delivery are (a) what needs to be delivered; (b) to whom in Pakistan does it need to be delivered (and when); and (c) how to make the recipient of delivery appreciate the value of the delivery in an emotional framework. The importance of these simple parameters can best be understood if applied to Mr Musharraf. Mr Musharraf has delivered a reasonably fair election to Pakistan.

This was what everyone wanted but has someone turned around and thanked him for it? Of course not. The simple reason was one of timing. By the time Musharraf came around to delivering a fair election, people were emotionally asking not for a fair election but for his scalp.

So what does Mr Zardari really mean when he talks of the need to change the system? Which system is he talking about?

Is it the system that runs through rural Sindh where the desire for vertical mobility is still not in full blown conflict with the class structure of society; or is it

the system in the urban areas of Punjab where the demand for vertical mobility is now coupled with the desire for individual acceptance as citizens; or is it the system in Karachi which perhaps does not have a system but probably offers the biggest opportunity in the country to individuals seeking progress.

The importance of Mr Zardari will be determined by his success in spelling out a charismatic vision for each geographical area and how he intends to deliver it. We need to know where we are going and when. He needs to be careful that his vision is not the disturbing set of figures that his foreign educated consultants will try to proffer. Musharraf and Shaukat Aziz did enough of that and sent their minions into an election wearing shades which only saw prosperity where there was none.

In economic terms the reality is that Pakistan cannot achieve too much in the first term of a renewed democracy and the future government needs to be careful in its approach not to stoke expectations that are unlikely to be fulfilled.

However, the party that may be able to bring about improvement in the quality of life of the ordinary person may not necessarily be the one that shows an improvement of economic indicators in each State Bank report.

Despite being a key factor economics is not the sole determinant of politics as the West would want to believe. Apart from emotion there are non-economic and cultural measures relating to quality of life which are equally important. These measures differ in relation to urban and rural areas.

The first and foremost requirement of residents of the urban areas is their relationship with the state institutions they deal with. The truth is that the ordinary man in Karachi, Lahore or Gujranwala has to act like a thug or maintain contacts with depressing state functionaries to ensure his life is not disrupted in its ordinary course. If people can suddenly have a responsive state it would matter. This requires fundamental change to our police, health and local services. If someone believes that the Sindh Police or the Punjab Police can never be reformed they should not be important in politics. Mr Zardari may find that this is easier to achieve than making Pakistan into an economic tiger.

Mr Zardari has to believe that he is important enough to force changes in delivery of state services to the urban dwellers within two years. If he does this with a comprehensive, well coordinated programme charisma will automatically become a part of his importance.

Rural areas on the other hand would require much more direct poverty alleviation to create sustainable economies. Vocational training and linkages to service industries need to be the drivers of this process together with a tax based programme of linking investment with human resource development.

Both urban and rural economies are plagued by conflict. Mr Zardari will need to co-opt the members of the legislature in an attack on conflict. They are important people and if they are involved in key development projects they can be paid well as consultants and kept out of the intrigues and financial scandals that our threatened establishment is bound to unleash.

Lastly, Pakistan today is plagued by conflict. Most of these conflicts fester because the conflict resolution forums like courts and tribunals are process driven rather than objective oriented. While such a process has been made more and more dense, some common sense changes here can yield results.

Even in England courts take a long time to decide matters but there is certainty in the process. This certainty and procedure brings calm to society and makes people feel more secure. This must be introduced and there should be no exceptions.

Much like Mohtrama Bhutto must have done when forced to step into her father’s shoes in 1979, Mr Zardari has to take forward the legacy of a loved one. However, if politics apart Mr Zardari realises the importance of being Zardari people in Pakistan may have something to look forward to.

The writer is a corporate lawyer and a political analyst

Lawgroup.q3@googlemail.com

THERE are some awards and scholarships that are known the world over. Young men and women vie for them, devoting long months to preparing for them, putting all pleasures aside in a spirit of perseverance and dedication.

The reward brings with it honour and fame in scholastic circles, and even when a person becomes old and is retired from active life he/she is known by that scholarship.

I was wondering for example, how many government personalities, political leaders and elected representatives of the people (like those elected a few days ago) would stand a chance to qualify for the famous Rhodes Scholarship, even if lack of the required academic qualification were to be ignored.

As it is, the qualification is not stringent; just a first class or high second class bachelor’s degree. No MNA or MPA is a nonnowadays.

I say this because, strangely, when Mr Cecil Rhodes (1853described by the books as “English imperialist, largely instrumental in extending British territory in South Africa and in development of Rhodesia,” endowed the scholarships at Oxford University, he made rather strict and ever so high stipulations about the personality and character of the young men who intended to apply for them.

Age is the most minor of the conditions laid down for prospective applicants who have to be over 19 and below 25 years. Indeed we may have as many as a dozen legislators central and provincial of that age group. It is the other qualifications prescribed by Mr Rhodes that might present some difficulties for the gentlemen in whom the people of Pakistan placed their trust in the elections.

Great admirer as I am of the integrity, honesty and incorruptibility of our legislators, even I may be hard put to it to get any of them through the fine mesh of attributes which, in Mr Rhodes’ opinion, candidates for his philanthropy were required to possess.

Just go through the list if you please: “Literary and scholastic attainments; qualities of truthfulness, courage, devotion to duty, sympathy for and protection of the weak; kindliness, unselfishness and fellowship; exhibition of moral force of character and of instinct to lead; to take interest in the problems of one’s fellow men; physical vigour as shown by fondness for or success in outdoor activities.”

This list was not made up by me. It is part of the announcement put out by the Secretary, Rhodes Trust Scholar Selection Committee for Pakistan, and advertised in the press. The only person with whom one can quarrel or argue about the list is Mr Cecil Rhodes himself who, as I have indicated above, passed away some 106 years ago. Even if he were alive, it is doubtful if he would have agreed to relax any of the essentially moral qualifications in favour of our MNAs and MPAs.

In this respect, Mr Rhodes could have learnt a lesson or two from our chief ministers who are ready to relax or ignore all qualifications, including the basic academic to accommodate a friendly and cooperative member’s sonaw or nephew in a government job.

Efficient workers are hard to come by and chief ministers somehow know a good chap when they see one.

I was letting my imagination run as I was writing this. Let us suppose the prime minister is anxious to see a young MNA selected as a Rhodes Scholar. But every PM of Pakistan publicly vows that no appointment shall be made anywhere except on merit, otherwise he could simply have asked the Rhodes Trust Scholar Selection Committee to “select” the MNA or pack up and go if it refused. We can do without Rhodes Scholars since we are on the path of selfbut we can’t do without pliable MNAs.

The bright young MNA may have literary and scholastic attainments of sorts in his quiver of qualifications, having obtained credits in Kindergarten. He may be possessing physical vigour, having jogged behind girls in Lahore’s Lawrence Garden. He may have a fondness for outdoor activities, having gone for shikar every Sunday to kill prohibited birds. But what about the rest? Would his District Coordination Officer (the old deputy commissioner) honestly testify to his “exhibition of moral force of character?” Because only a DCO can do that. No one else may like to perjure himself.

One also wonders if a certificate from a Class One gazetted officer, stating that the youth possessed the humane and saintly qualities demanded by Mr Rhodes, would be acceptable to the Selection Committee. There is no reason why the committee should object to such a testimonial.

If a Class One gazetted officer is good for certifying one’s identity, one’s state of being married, one’s being a bona fide Muslim, etc., surely he can be relied upon to know that a certain MNA was gifted with these rare and bizarre attributes wanted by Mr Cecil Rhodes.

In this exercise to “launder” the young MNA, let us keep in mind the fact that Pakistan’s quota of the Rhodes Scholar-ship is just one, repeat one. Are we then to look for just one man? That should be no problem. Surely the National Assembly of Pakistan, the most prestigious and directly elected body in the country, would be overflowing with persons (especially after the recent general election) who more than fulfil the rigid moral and intellectual qualifications prescribed for the scholarship. No? My dear reader, you are not laughing at me, are you? Have I said something foolish?

ARE we living in the best of times or the worst? Excuse me for being slightly confused, but then, we are living in a curious blend of wisdom and foolishness, hope and despair, belief and incredulity. I thank Mr. Dickens for helping me label my problem, but is there anyone who can provide me with an answer?

I find myself mired in a time that is filled with perplexing paradoxes. It is the time where I, a member of the nebulous society called the ‘Pakistani youth’ must decide whether I am an optimist or a pessimist.

But I exist in a vague limbo, a purgatory of sorts, where I am uncertain, and therefore, helpless. From all this vague abstraction which probably irritates, let me illustrate with a concrete example. Two weeks ago, I was very excited at the idea of voting for my country.

No matter that the pre-election proceedings were haphazard and rather disorganised so that I had no idea about whether I was going to vote or not until two days before the election. Never fear, all’s well that ends well.

I walked to my polling booth with my family and neighbours amid bright, shining faces exuding excitement. It was a rather festive occasion, where I took pictures with my cousin, both displaying an inky thumbs ups. I had contributed, for the first time, directly for the future of the country and it was quite a novelty.

I returned and followed with anxious anticipation to see if my candidates won. One did, the other didn’t. The present political scenario came into being, a blend of compromises and conciliation.

The adults in my life used this as an I-told-you-you-would-make-no-difference. ‘Is this what you voted for?’ I was laughingly asked.

My optimism was equated with stupidity and puerility. The senior citizens of my country were the most voluble in asserting that there had been thieves when Pakistan was born and there will be thieves who will hasten my country to its demise. The USA exists as a fact, they say, that uses election and democracy as a guise for a new kind of colonisation, first economic and then ideological. There is no point.

To all this, I must succumb, because my traditional society that places emphasis on respectful deference to the words of the old.

However, my naiveté forces me to disagree. Casting a vote did leave me with a feeling of empowerment. The choices may have been few and certainly were controversial, but I made my choice and that did put me above those who abstained from doing so out of disillusionment. This was one step forward, amid a thousand steps backwards.

The more elections there will be, the more aware we will become as a populace in casting a vote, in being informed about who we choose and why we choose them. It is worth something, is it not?

I am filled with silent disagreements such as these. I am not an innovative thinker, by no means. I need a pattern along which I can think and act. Indeed, my elders have given me many patterns, none of which I want to choose.

There is the pattern of religious belief which tells me that nothing short of a burqa will send me to heaven. There is the pattern of incredulity that tells me the dupatta on my head is akin to ignorance.

Then there is the pattern telling me that education is the key to my future. On the other hand, if marriage comes along my way, all other patterns are rendered obsolete and useless. To be passive is largely the path of pragmatism. To act is to be ignorant.

There are those who insist that all things western are insidious and dangerous: just look at how they’ve got me convinced that I must vote. But on the other side are those who embrace all the things that the ‘West’ has to offer, including nationality.

To be empowered, I must have an American or British passport. To be patriotic, I must abandon all hope and exist in the same apathetic state that my seniors have immersed themselves in.

Where is the middle ground disappearing to? Why is leading a balanced life becoming akin to walking on a tight rope without a net below?

I sincerely ask the ‘adults’ who are old but, to my mind, not very wise all the time, what option they have given to the youth of today except cynicism on one extreme and escapism on the other?

Give us a pattern of hope, optimism and action, before you hail us as the future leaders who will fix what you did wrong. Surely, it is not too much to ask.

shazaffatima@gmail.com