In thrall to the IMF

THIS was bound to happen. The primary objectives of the International Monetary Fund are to control inflation and to help stranded countries pay back debt to foreign creditors.

To do this the normal response of free marketeers is to raise interest rates and reduce fiscal deficits of irresponsible governments. In developed countries it is claimed that bold unorthodox remedies are needed to jolt the world economy back to life. One wonders what bold remedies for developing countries would be approved by the IMF. The developed countries’ slogan is that all you need is cash. The real issue, even for us, is how far should the economy be starved of cash and credit taking into account the various factors influencing our disaster.

What causes fiscal irresponsibility is outside the IMF’s domain. It doesn’t investigate the causes of good and bad governance. Once its hold on the economy was released Pakistan soared into irresponsibility because President Pervez Musharraf knew nothing about good governance nor were his trusted advisors Shaukat Aziz and Tariq Aziz concerned about any such thing.

Shaukat Aziz had many qualities but his main object was to command and get immediate obedience. He was most upset when the chairman of the Federal Public Service Commission (FPSC) refused the promotion of two police officers wanted by the Punjab government. The FPSC was probably right because governments in Pakistan tend to favour policemen who are prepared to carry out illegal orders. Shaukat Aziz persuaded Gen Musharraf to sack the entire commission. The great institution-building general proceeded to do so. He copied Ayub Khan. The term of the FPSC was reduced from five years to three years.

During his presidency Ayub Khan had decided to get rid of an ICS officer. He reduced the retirement age of ICS officers from 60 to 54. Some other officers also became victims of this decision. I recall that the CSP Association gave a farewell party for these special retirees. Soon after, the retirement age was again raised to 60. The media which was free under Pervez Musharraf didn’t care because it knew nothing about the mechanics of good governance which meant that in future instead of being independent the FPSC had to carry out the orders of the executive.

Musharraf’s beloved advisers made matters even worse by telling him how to go about sacking the chief justice. The method used was both ridiculous and also totally unnecessary. As a result, the general had to depart. There were other reasons also. He thought he was being clever in dealing with the Americans; they decided that enough was enough.

Dictatorship of the executive is in accordance with the state of affairs which, for various reasons, has more or less persisted since 1958 — even the military governments we have had since, namely that of Gen Zia, who was unconcerned, and Gen Musharraf, who preferred to make things even worse in the name of democracy.

For instance, the IMF expects the government to reduce its fiscal deficit. A sensible reduction in fiscal deficit is by reducing current expenditure. There are ways in which this can be achieved but neither the IMF, the World Bank nor the ADB are likely to try.

Politicians determine policy on the basis of political support by their constituents. This may not be in the national interest but they have no choice but to implement such policies.

A competent and non-political administrative infrastructure does a better job. There’s a famous anecdote about a British permanent under-secretary telling his minister, “I understand that you have to do such a damn silly thing but I don’t see why you should do it in such a damn silly way”. This was related to us in a talk by a deputy secretary of the treasury when we were on a study tour of British government as part of our training as CSP officers.

In the early years we were not scared of expressing an opinion but that has radically changed after 1972 when the Great Leader decided that he would not tolerate any opinion which he didn’t like. As a result, the system became politicised and sycophantic. It has made sycophancy an absolute must and has also encouraged inefficiency, over-employment and corruption. What people do not understand is that over-employment always creates inefficiency.

Currently, inflation has been caused by high oil prices, excessive government borrowing to subsidise energy, rising current account deficits which caused a sudden deterioration of the Pakistan rupee and high food prices. Raising interest rates will probably not cure any of these.

Increased interest rates will cause problems for business. Banks are also having problems about which nothing is being done. The money market has dried up or become very expensive. Recession will not increase government revenues. Some of our economists are objecting to raising interest rates for many reasons. Others are saying that the government will continue deficit financing and the IMF will be able to do nothing about it. Let’s see what happens. We have a few good economists but no one outstanding. In any case, they assume that economic theory always works without realising that the quality of the government infrastructure and the politicians’ intent is what determines the outcome.

If fiscal deficits have to be contained development expenditure will be slashed because government will continue with over-employment. Unfortunately, even when the macroeconomic outlook improves globally, unless there is a change in attitudes we will continue to have bad governance.

Resolve this impasse

THE crisis in Indo-Pak relations can be used to fortify the peace process provided we look at facts in the face and devise a solution in our common interests.

Initial Pakistani reactions to the terror strikes in Mumbai on Nov 26 were laudable. Why did things go wrong? How do we revive the peace process and ensure that such crises do not recur?

Memories of Munich and Pearl Harbour warped the West’s policies towards the Soviet Union. It seems that India’s Operation Parakram of 2001-02 had a similar effect on some in Pakistan. They overlooked that unlike the BJP regime, Prime Minister Manmohan Singh had staked his prestige on the success of the peace process. If it were not for the Mumbai blasts of July 2006 he would have been in Islamabad for a summit on Kashmir with the then president Gen Pervez Musharraf. The security mechanism they approved at Havana on Sept 16, 2006 was his idea developed six weeks before they met in New Delhi. He detests war.

So does the Minister for External Affairs Pranab Mukherjee. He questioned the operation courageously. In an interview published in the Indian Express on Jan 13, 2002 he criticised the demand that “Pakistan must stop supporting terrorism and it’s only then we are prepared to talk”. He said, “Surely the problem cannot be solved by launching a war against the country which is harbouring the terrorists…. We are not in 1914, when an Austrian prince was killed and Europe fought World War I…. They shouldn’t have created this war hysteria.”

No one accused the Government of Pakistan of complicity in the crime. On Nov 27 Prime Minister Manmohan Singh said that the “attacks probably (had) external linkages” and “we will take up strongly with our neighbours that the use of their territory for launching attacks on us will not be tolerated and that there would be a cost if suitable measures are not taken by them” — note the use of the plural.

On Dec 1 Pakistan’s high commissioner in New Delhi Shahid Malik was “informed that the recent terrorist attack on Mumbai was carried out by elements from Pakistan” and the “government expects that strong action would be taken against those elements”. Maj Gen Athar Abbas, director of Inter Services Public Relations, did well to say on Nov 30, “There is no such movement or mobilisation of troops. The ceasefire is holding.”

On his return from India, Foreign Minister Shah Mahmood Qureshi said on Nov 29, as this paper reported, “there was no threat in his (Pranab Mukherjee’s) tone and that he had rather pleaded for cooperation”. In sum, there was no charge of official complicity, no threats and no troop movements.

When the two PMs spoke on the phone on Nov 28 it was natural for Manmohan Singh to invite the DG of the ISI, as natural for Yusuf Raza Gilani to agree, and as natural for the ISI to object. Sensitivities must be respected. Equally the enormity of the crime and popular outrage must not be overlooked. By now the electronic media on both sides had gone berserk.

President Asif Ali Zardari’s offer to send “a director” is fair. The government spoke of “a representative” of the ISI. The crucial question is the degree of cooperation in the investigation. President Zardari’s article in The New York Times on Dec 8 makes three important points. First, the attacks were directed at Pakistan as much as at India. “Supporters of authoritarianism in Pakistan and non-state actors with a vested interest in perpetuating conflict do not want change in Pakistan to take root.”

Only Pakistanis can have such motives.

This creates a duty which he accepts. As an authority holds “international law imposes the duty upon every state to exercise due diligence to prevent its own subjects, and such foreign subjects as live within its territory, from committing injurious acts against other states.” If they fail they must “procure satisfaction and reparation for the wronged state, as far as possible, by punishing the offenders”.

Secondly, “Pakistan is committed to the pursuit, arrest, trial and punishment of anyone involved in these heinous attacks … [it] will take action against the non-state actors found within our territory” citing the raids on Dec 7. The men will not be extradited, but will be prosecuted in Pakistan.

The third point constitutes the core of the matter. “We must work together to track down the terrorists … coordinate in combating terrorism.” This implies concerted effort in sharing evidence to assist prosecutors in Pakistan as well as in India. The World Court ruled in 1949 that the victim state “is often unable to furnish direct proof of facts giving rise to responsibility” because the country in which the offender resides has the access. The victim “state should be allowed a more liberal recourse to inferences of fact and circumstantial evidence” on the inter-state level.

The foreign secretary of Pakistan Salman Bashir proposed on Dec 8 that a “high-level delegation” should visit India “as soon as possible”. On the same day the Cabinet Defence Committee pledged “full cooperation with India, including intelligence sharing and assistance in investigation as well as setting up of a joint investigative commission”. The next day Defence Minister Ahmed Mukhtar said that Indian officials “may be allowed” to interrogate those detained by Pakistan.

It is imperative that the proposed delegation came to India soon enough comprising an official from the ISI and headed by the foreign or home minister. No dialogue can succeed if trust is lacking. The best way to generate trust is to share evidence in a non-adversarial manner against our common enemy — terrorism.

When the Havana mechanism was set up after the Mumbai blasts India’s foreign secretary-designate Shivshankar Menon said: “We are trying through this to prevent major incidents. As you know, terrorism makes it very difficult for us, especially events like Mumbai and so on would make it very difficult for us, because public opinion in India finds it very hard to understand how we can carry on with the dialogue process if terrorist incidents in India have links into Pakistan. So, what we are trying by doing all this, by setting up this institutional mechanism … is to prevent such incidents.” It is not difficult to foresee the consequences of a second failure.

The writer is a lawyer and an author.

Zimbabwe’s cholera crisis

ZIMBABWE’S president, Robert Mugabe, declared his country’s killer cholera outbreak under control on Thursday, even as neighbouring South Africa designated one of its northern regions a disaster area due to the number of people crossing the border to seek treatment.

Nearly 800 Zimbabweans have died since August from cholera, which has spread rapidly and with unusually high fatality rates due to the country’s crumbling water and health infrastructure.

“I am happy to say our doctors have been assisted by others, and the World Health Organisation, and they have now arrested cholera,” Mugabe said in a televised speech.

But the claim was met with immediate scepticism by international agencies. The WHO said on Tuesday that the number of reported cholera cases, currently 16,403, could rise to 60,000 in a worst-case scenario.

Responding to Mugabe’s comments, a spokeswoman for the UN Humanitarian Affairs office said “the figures speak for themselves” and that she hoped that a joint UN and government effort “will contribute to halting the effort”.

Save the Children said that the cholera crisis “was growing, not diminishing”, while France condemned a decision by Zimbabwe to refuse visas to a team of specialists on standby to assist with the outbreak.

“Contrary to what Mr Mugabe says, the cholera epidemic is not under control,” said Frederic Desagneaux, a spokesman for the French foreign ministry. “France strongly regrets this decision and calls on Zimbabwe’s authorities to allow aid to reach the population.”

Across the border in South Africa, the government declared the Vhembe district a disaster area due to the number of Zimbabwean patients streaming south over the Limpopo river at Beitbridge. The lack of clean water and basic medicines in Zimbabwe have caused a fatality rate from cholera of nearly five per cent, compared with one per cent normally expected in emergency situations.

More than 660 people, mostly Zimbabweans, have been treated for cholera in South Africa in recent weeks. Eight people have died. A Limpopo provincial spokesman, Mogale Nchabeleng, said the situation was under control but that the disaster declaration would help cut bureaucracy and free national funds to boost medical assistance.

Zimbabwe has experienced political paralysis since an election in March was won by opposition leader Morgan Tsvangirai, who then pulled out of a run-off against Mugabe due to state-sponsored violence. A subsequent power-sharing agreement between the two men has stalled over Mugabe’s apparent refusal to cede control of some of the powerful ministerial posts.

The health crisis, which comes on top of mass unemployment and hunger, hyperinflation that sees prices change several times a day, and the collapse of the education system, has led to renewed calls from western leaders for a change of leadership. Speaking in Washington, James McGee, the US ambassador to Harare, said: “One man and his cronies, Robert Mugabe, are holding [this] country hostage, and Zimbabwe is rapidly deteriorating into failed state status.”

But Mugabe claimed that the US, Britain and France were using the cholera epidemic as a basis to launch “military intervention”. “Now that there is no cholera, there is no cause for war anymore,” he said in his speech.

Condemnation of Mugabe’s regime has been muted from within Africa, with only Kenya’s prime minister, Raila Odinga, calling for his forcible removal — a position not officially endorsed by the Kenyan government.

But the concern among Zimbabwe’s neighbours about the effects of the country’s social and economic unravelling is growing daily.

Bostwana’s foreign minister, Phandu Skelemani, said that while the border with Zimbabwe should remain open, he supported other ways of marginalising Mugabe and his Zanu-PF party.

“If you switch off petrol, I think that Zanu-PF will have to go. If that step is agreed and you then simultaneously airlift critical supplies like food and essential supplies to prevent Zimbabweans from starving to death, I think it will have the desired effect,” he told the Associated Press.

In South Africa the ruling African National Congress said that it believed Mugabe could still be talked into stepping down. Gwede Mantashe, the party’s secretary general, said that neither an invasion nor sanctions were options in ousting the 84-year-old leader, who has held power since 1980. “What we will do to make Mugabe retire? We will persuade him,” he said.

Cholera is caused by the Vibrio cholerae bacterium, which infects the gut with an often dramatic outcome. For many people the illness is mild, but it can cause severe dehydration within hours, leading to kidney failure and death.

Cholera outbreaks occur alongside unclean water and poor sanitation. It is a high risk in makeshift camps, slums and amid wars and natural disasters when hygiene breaks down.

The World Health Organisation says the idea that cholera can be caught from the dead is untrue. The bacterium reaches the gut via contaminated food or water. But Vibrio cholerae is also present in some brackish water and estuaries, and is often associated with algal blooms.

— The Guardian, London