The economy before Sept 11

BEFORE the terrorists’ attack on New York and Washington on September 11, Pakistan seemed to be making good progress in stabilizing its wayward economy. The military government headed by General Pervez Musharraf had achieved what no previous administration had succeeded in accomplishing — the completion of an IMF programme.

Soon after taking office on October 12, 1999, the Musharraf government had negotiated a standby agreement with the Fund. With the programme completed on schedule, the stage was set for the negotiations and signing of a new agreement with the IMF. And then September 11 happened.

The new understanding with the Fund was to take the form of a poverty reduction and growth facility — or PRGF. As the facility’s name implies, the focus was to be on the revival of the economy while simultaneously addressing the problem of poverty. The Fund’s standby arrangements cover a short period of time — a couple of years at most. They are also costly. The countries borrowing under this facility pay interest at near commercial terms.

The purpose of standby arrangements is to help countries borrowing from the facility to address the problem posed by severe external imbalances — a large gap between export earnings and expenditure on imports. A large external gap is normally the consequence of a large budgetary deficit which causes aggregate domestic demand to be much higher than the economy’s capacity to bear it. It has been the Fund’s belief — held over a long time and behind numerous country standby programmes — that external balance can best be achieved by squeezing domestic demand. This is usually done by applying two classic remedies — fiscal retrenchment and monetary tightening. The Fund has tended to follow this approach irrespective of the initial conditions prevailing in the countries faced with external imbalances.

On a number of occasions I have suggested in these columns that the Fund should have followed a different strategy in Pakistan. It should not have gone for a severe fiscal contraction when Pakistan was moving headlong towards a recession. My point in mentioning this again is not to revive an old argument. The question whether Islamabad should have adopted a different policy is now for historians to answer. September 11 changed Pakistan’s economic circumstances in a dramatic way.

What was Pakistan’s economic strategy before the terrorists struck America? As already indicated, Islamabad was set to embark on a growth and poverty reduction strategy with the help of the IMF and the support of the World Bank and the Asian Development Bank. A number of bilateral donors had also indicated their willingness to assist the country within the PRGF framework. In what way is the PRGF different from the Fund’s previous approach towards structural adjustment?

The PRGF was introduced by the Fund in September 1999 in response to a great deal of criticism directed at the institution by many non-government organizations. The NGOs, critical of the Fund’s policies, claimed that the institution’s staff and management had not been sensitive to the impact of its programmes on the poor. It was suggested that the Fund, by advocating tight fiscal and monetary policies, had created an environment in the countries in which it was engaged that worsened the incidence of poverty.

Responding to these assertions, the PRGF was designed to broaden the objectives the Fund sought to achieve in the countries in which it had active programmes. Conditionality under the PRGF emphasized the social impact of major reforms and to improve the quality of governance. The goals and policies embodied in a PRGF-supported programme derive directly from the country’s own poverty reduction strategy. There is an expectation that the country’s PRGF strategy will incorporate the concerns and the aspirations of the poorer segments of society. Accordingly, the authorities in Islamabad spent several months consulting the civil society while preparing the country’s PRGF strategy. How did the government evaluate the economic situation as it prepared for discussion with the Fund?

The economic data released by the State Bank of Pakistan confirm what some of us had feared all along — that the Pakistani economy was in recession. A recession in a developing country is said to set in when the rate of economic growth drops below the rate of increase in population. That had happened in Pakistan in the fiscal year completed on June 30, 2001. The government believed that the sharp drop in the growth rate was the result of natural factors — Pakistan had experienced a severe drought which had caused a significant reduction in agricultural output and increased the import burden.

The State Bank estimates the cost of the drought to the economy at $927 million for the 2001-02 fiscal year, equivalent to 1.4 per cent of gross domestic product. It is Islamabad’s view that had the drought not taken such a heavy toll in 2001, the economy would have bounced back nicely. The State Bank’s data show the large scale manufacturing sector recording strong growth of 8.8 per cent compared to a paltry 3.5 per cent in the previous fiscal year. The government believes that the upturn in investment in some parts of the non-agricultural economy would have led to an economic turnaround in the not too distant future.

I am of a different view. I see the sharp fall in the rate of economic growth in 2000-01 as part of a long-term trend that needs to be reversed by the adoption of an aggressive public policy aimed at economic revival. My conclusion is based on some simple arithmetic. Over a period of more than ten years — from 1988 onwards — Pakistan’s economy has seen two unfortunate developments. There is a decline in both the rate as well as the quality of investment. This has occurred in both the public and private sectors. Some of the reasons for these developments are well known, some not so.

That Pakistan had depended excessively on foreign capital flows for financing a significant part of national investment has long been recognized as a weak feature of the economy. When these flows dried up in the ‘nineties, Pakistan did not have resources of its own to continue to finance investment at the historical rate. Consequently, the rate of investment declined and with it came a significant reduction in the rate of economic growth.

What has not been fully recognized is that Pakistani economy also became more inefficient in the ‘nineties. This was the consequence of large-scale corruption and mismanagement during this period. This affected public sector corporations in particular. At one point I had estimated that the poor performance of these entities was costing the country losses equivalent to two per cent of the national product.

The result was that Pakistan needed to invest four to five per cent of its gross domestic product to obtain one per cent increase in its GDP. This was about twice as much as was the case in the ‘sixties when investment equivalent to 3.5 per cent of the GDP yielded one per cent increase in the GDP. For the economy to revive, not only investments had to increase but the efficiency of the economy had to improve as well.

How did the government’s poverty reduction and growth programme handle these problems?

As Pakistan prepared to move from the task of stabilizing the economy to restructuring and preparing it for long term sustainable growth, it had to contend with three sets of problems. The economy was burdened with an enormous amount of external and internal debt. To service it took so much of the resources generated through taxation and export earnings that little was left over for public and private investment. The government’s strategy for economic revival placed a great deal of emphasis on reducing the burden of debt.

In crafting the debt reduction strategy, the government focused its attention on obtaining relief from the creditors, both bilateral and multilateral. Such a relief, if it was provided, is, at best, a short term solution. It is like putting a bandage on a large bleeding wound. Pakistan’s debt problem needs to be tackled by cleansing the economic system of two serious aberrations — a government that spends much more than it earns and an economy that imports much more than it exports. Some effort was made over the last couple of years to close the budgetary deficit by widening the tax base and improving tax collection. Not enough was done to restructure government finance by privatizing loss-making public sector enterprises and by reordering government expenditures.

It is the other gap — the import-export gap — that did not receive the strategic attention it deserves. Pakistan’s export sector has performed poorly over the last decade. The country has not taken full advantage of the enormous growth and dynamism in international trade. In 2000, world trade increased by an impressive 13 per cent; during the same period, Pakistan’s exports increased by only 7 per cent. A serious export strategy must prepare the economy to produce the goods and supply the services in which Pakistan has some comparative advantage and for which the world demand is increasing rapidly.

To take one example merely to illustrate this point: Pakistan has a large agricultural sector supported by one of the largest irrigation systems in the world. And yet, agriculture contributes little to value-added exports. Flowers are one of the fastest growing imports into Europe and North America. The United States alone spends $17 billion a year on importing flowers. Some of the developing countries exporting flowers now earn handsome dividends. Colombia and Ecuador export 134,000 tons of flowers and earns $480 million a year. Zimbabwe and India are also entering this field. Why hasn’t Pakistan entered this market?

Poor human resource development poses another serious problem for Pakistan. This received some attention from Islamabad in the PRGF but the emphasis remained on primary education. As I have argued in this space before, a strategy for human development must not stop at the provision of basic education. There is now sufficient information available from around the world that five years of education does little to change attitudes and behaviour and even less for preparing people for the work place. A comprehensive strategy should also include secondary and tertiary education. Pakistan, with a large and young population, has a window of opportunity to prepare its people to meet the shortages of skilled workers being experienced all over the world.

It is the absence of institutional development from the PRGF strategy that causes me the most concern. That Pakistan’s economy has suffered a great efficiency loss over the last two decades is something Islamabad has not fully comprehended. This has to be remedied by explicit attention given to the development of institutions that play a vital role in economic development. The sectors that must receive urgent attention in this context include finance, fiscal affairs, and law. In other words, before September 11 Pakistan needed to do more strategic work in order to put its economy on track. What does it need to do now, after September 11? I will answer this question in this space next week.

Beyond the war on terror

WHEN I first heard the news of the crash of American Airlines Flight 587, there was confusion about the type of aircraft involved and whether the aircraft was landing or taking-off from JFK. Soon, it was confirmed that it was an Airbus-300 and not a Boeing 767 and that it had crashed on take-off.

The question uppermost in the minds of all was whether the crash was an act of terrorism. How the world has changed. Having worked for PIA, 25 years all told, I was not a stranger to air disasters. It was a nightmare that one lived with, but one looked to weather, mechanical failure or pilot error for the cause. Sabotage or terrorism was the last option and it hardly came into the reckoning. Now it tops the list and only after terrorism has been conclusively ruled out, do we look at other possibilities.

New York City was taking no chances at all. All its airports were shut down as were the bridges and tunnels leading to the city, the Empire State Building was evacuated, the United Nations was locked out and our own President was asked to stay put at the Roosevelt Hotel where he was staying.

After September 11, New York has been living on its nerves, as is the rest of the country, as the FBI and other agencies go on a manhunt for suspicious looking persons with strange sounding names. And locking them up on the principles that it is better to be safe than sorry, the extra-legal equivalent of preventive medicine.

The coverage of the crash of Flight 587, as was to be expected, kept harping on the possibility of a criminal act, at the same time, insisting that other possibilities could not be ruled out. Thus jangling the nerves of the New Yorkers further. This was tabloid journalism at its best (or worst).

There was fire in one of the engines, there was an explosion in one of the engines and so-called eye-witnesses were picked off at streets, some said it was the left engine, some said it was right. As if it made any difference but it lent mystery to the crash. Mayor Guilani who has become something of a folk-hero, dashed to the site of the crash, a knight in shinning armour but actually wearing a baseball cap which seems to have become his trademark, and he calmed the fears of the New Yorkers.

The attacks of September 11 did more than kill innocent people and destroy buildings, it created a climate of fear, seriously disturbed the peace of mind of the American people. When one sets out to demonize an individual or an organization, there is a tendency to invest the person or organization with superhuman powers.

When anthrax powder started to arrive in the letters of some people, the knee-jerk reaction was that it was the work of Osama bin Laden and his al-Qaida on the theory that it could not be ruled out. This is to hand over a victory to the terrorists on a plate. In law, the guiding beacon is the presumption of innocence (which is rapidly being flushed down the toilet) and in the case of terrorism, all options must be kept open including whether an act of criminality is automatically a terrorist act. A psychopath serial killer on the loose can spread terror in a neighbourhood or community but he cannot be called a terrorist.

The best defences against terrorism is to get back to leading normal lives, and not waiting for the other shoe to fall. Los Angeles is on a fault-line and there is more than a chance that it could be hit by an earthquake. But the good people of that city do not allow this terrible possibility to disturb their lives.

The fear of terrorism is a real one and one should stay vigilant and all reasonable precautions should be taken. But the accent should be on reasonable so that the baby is not thrown out with the bath-water. It is for the American people to decide which truths are self-evident and which rights are inalienable. They must decide whether American citizens of Arab or Muslim origin enjoy the full rights like other citizens or are there limitations to their pursuit of life, liberty and happiness?

To the best of my knowledge, there are no exemptions, no qualifying clauses in the American Constitution. The greater the need to protect civil liberties, the greater the need to prevent a lynch-mob mindset from getting legitimized. Despite all the perils, the rule of law must remain paramount.

America prides itself on being a free country and an open society. When McCarthyism was at its zenith, I had written an article for an American newspaper and denounced it vigorously. The article was duly published. I wrote that article without any fear because I took freedom of expression for granted. It was that, that defined the American way of life for me. Not McCarthyism.

And there were no midnight knocks on my door. That’s what I remember best of the United States. Freedom is something precious. Ask those who do not have it. Being precarious, one should hold on to it and not allow the moment to make inroads by introducing elements of a police-state.

Setback to pundits

THE surprisingly swift advance of Northern Alliance soldiers, aided by U.S. bombing and special forces, has once again turned Washington punditry upside down.

When the bombing began Oct. 7, many commentators assumed a quick victory and chose to debate which target President Bush should move to next: Baghdad or Damascus? Then the first three weeks of military action brought few visible results, and a new consensus began to emerge: Gen. Tommy Franks was a bumbler, and U.S. policy was failing as Ramadan and winter closed in. Now the armchair experts are happy to pocket the fall of Kabul and move on to what the administration is doing wrong in Kandahar.

There’s a lesson in all of this, and it has a parallel on the domestic side of the fight against terrorism too. The lesson isn’t that the critics are always wrong and the administration always right, though we do think that Secretaries Rumsfeld, Powell & Co. are due some credit for their steadfastness thus far.

The real lesson is that the United States has embarked on a long, complex struggle against terrorists operating under the banner of Islamic fundamentalism. The struggle is more difficult now because the United States has often cut and run rather than stay and fight or stay and help: in Lebanon, in Somalia, in Afghanistan the last time around. This fight, as President Bush has said, will take years. It must be fought with urgency, and with patience. To combine those two qualities poses a continuing challenge.

You can see the difficulty of that challenge on the home front, with the at least momentary waning of the anthrax scare and the hope that the latest jetliner crash was due to mechanical failure. It may be that the anthrax murderer will not strike again and that terrorists did not cause the destruction of Flight 587. But even if both turn out to be true, there can be no relaxation in the face of terrorist threats, no matter how much we all wish life could resume its pre-Sept. 11 rhythms.

Stockpiling smallpox vaccine; rebuilding the U.S. public health infrastructure; safeguarding Russia’s nuclear arsenal _ these must remain urgent priorities. Yet already we see some members of Congress and some in the administration sliding back toward business as usual, playing politics with airport security, larding spending bills with egregious waste, protecting pet law-enforcement projects that have nothing to do with the fight against terror. —-Washington Post

Power game in Hindukush

SINCE times immemorial Afghanistan has been both a transmitter of cultures and a receptacle of different ethnic, linguistic and religious groups. Kings and generals, philosophers and thinkers and saints and sufis trekked through it to enter the populous and fertile lands of India. History repeats itself now. Infighting in Afghanistan between Taliban and Northern Alliance lured those powers into this region that wield power and have ambition beyond their own borders.

The geo-strategic importance and internal weakness of Afghanistan expose it to exploitation. The power brokers of this age take advantage of this vulnerability. Their eyes are focused on the largely untapped mineral wealth lying in this country and in the close-by located huge oil reservoirs.

The declared aim of the US-led coalition’s ongoing military offensive against Taliban is to wage a war against terrorism. This carefully chosen slogan won global support in the wake of suicide attacks that shook the world two months ago. However, terrorism remains undefined and its interpretations widely differ. One doesn’t have to be a visionary to see through the curtain of expediency spread by the combined efforts of the US and Britain for detecting their undeclared political agenda.

September 11 attacks against the Twin Towers in New York and Pentagon in Washington DC hit the US like sudden thunderbolts. The premeditated dastardly acts that caused large-scale death and destruction stunned the American people and evoked massive worldwide condemnation. Nobody can have a licence to kill others and no religion or culture preaches violence to its followers. The people of America felt insecure, gravely hurt and deeply grieved. They expected their government to act firmly, identify the culprits and speedily bring them to justice. The US administration caught unawares felt humiliated and insulted and the visibly infuriated President Bush showed his anger and determination in his public statements. He ordered military into action with the purposes of punishing the culprits, assuaging domestic public feelings, building up national morale and shifting US attention from grief to revenge.

Osama bin Laden was promptly accused of September 11, acts of terror and the US president vowed to capture him ‘dead or alive’. Afghanistan was blamed for harbouring terrorists. A military action plan was quickly prepared to force the Taliban government to surrender Osama and to close down Al Qaeda network that operated in this country.

Failing to heed the advice given to them by others, the Taliban refused to implement the UN Security Council resolutions. Their bigoted stance earned them the wrath of the world community. The US air force engaged targets in Afghanistan with full ferocity, destroyed bulk of the fixed military assets of Taliban and prepared the ground for the Northern Alliance forces to launch ground action.

Taliban vacated some provinces without offering serious resistance. And then the myth of their military resistance exploded like a bubble. Taliban deserted several key provinces in quick succession and vacated Kabul to retreat to Kandahar. They left Kabul the way they had taken its control five years earlier — both without a fight.

The military lashkar of Northern Alliance merrily drove southwards riding on tanks and trucks, captured some provinces without a fight and occupied Kabul that lay abandoned. The US gave them a nod of approval to occupy Kabul despite president Bush’s announcement that the Northern Alliance forces would close up to the capital but will not occupy it.

In a span of couple of days Taliban lost nearly half of the area previously under their control and the loss of Kabul was a severe military and political blow to them. Put on a down-hill slope their days are numbered. This does not necessarily imply that the fighting will soon end. Durable peace still remains a distant dream in Afghanistan. The danger of civil war looms large in this country.

The rapidity of military moves caught the political gurus in the UN by surprise. Kabul fell while the political plan for Afghanistan was still being debated. A broad-based interim government to replace the Taliban administration is still some distance away. This vacuum creates uncertainty and apprehension. A similar vacuum in the past had led to anarchy that cost many lives.

The contours of the future shape of Afghanistan have started appearing on its political horizon. The United States and Britain are in no hurry to leave Afghanistan. Tony Blair has declared that additional British troops are ready for induction in this country. The US plans to build an air base in Northern Afghanistan, obviously not for a short stay in this country.

The US interest in Afghanistan is governed by many factors. These include the mineral wealth of Afghanistan; the proximity to the oil-rich regions of the Gulf and the Central Asian Republics; containing China from close quarters; keeping an eye on the immediate neighbours of Afghanistan; keeping Russia and the Central Asian Republics under close watch and spreading political and other tentacles in this region under the cover of defeating terrorism. In these tasks Britain may be prepared to play roles supportive to the US policies. The war against Taliban has demonstrated some interesting features. Firstly, Russia may be having a laugh for settling an old score with Afghanistan. Second, Iran and the US worked side by side with Northern Alliance and this association may become the pace-setter for starting a new era of bilateral cooperation between Iran and Russia.

Third, the extension of US political and military interest in Afghanistan (contiguous to China) may be a cause of additional concern to China; Fourth, India had been sidelined from Afghanistan during the last over two decades. It provided military help to the Northern Alliance in the hope of re-entering Afghanistan’s political arena.

India is likely to woo the new government in Afghanistan to keep Pakistan under pressure. Such a trend needs to be carefully countered by Pakistan. Fifth, A peaceful Afghanistan will provide opportunities for the flow of oil from the Central Asian Republics to the world by a pipeline. The shortest and economically most viable route for this pipeline would be via Afghanistan and Pakistan.

The new ground realities in our region demand a fresh look to update our policies on national security, Kashmir, Afghanistan, Iran, China, the US, India as well as internal developments particularly law and order situation and maintaining ethnic harmony in the country.

The recognition of Taliban government was a grave error from which we must learn a lesson or two. We joined the global drive against terrorism with a definite set of goals to protect our national interests. We must not deviate from those objectives. We are passing through critical times. Let us eschew emotions, think objectively and maintain proper balance between the head and the heart.

The writer is a retired general of Pakistan army.

The political vacuum in Afghanistan

WHEN President Pervez Musharraf left Islamabad for his foreign tours on November 7 on his way to New York to attend the UN General Assembly session and to meet President George Bush, he had a four-point agenda to pursue. He was hoping that he would be able to get sizable financial support from the US, Europe and international agencies.

He was sure he would be able to convince the US on the virtues of a ‘short, targeted’ war, the imperative of suspending air strikes during the holy month of Ramazan, and of the need for a broad-based government which should be representative of all segments of Afghan society, and in which ‘moderate Taliban’ would be accommodated and the Pashtun population would be fully represented. A government entirely of the Northern Alliance or one wrapped around the Alliance would not be acceptable, for obvious reason. Finally, lest the Kashmir cause be drowned in the ear-shattering din of international terrorism, he planned to present the Kashmir issue with new context and in a new language.

While he was still in Europe, the first reality started unfolding: Europe was delighted to have President Musharraf on board the ‘global anti-terrorist coalition boat’, but the financial aid or support would come in calibrated packages and not in the form of a flood, irrespective of quality of risk Gen Musharraf had taken by going all out in favour of the US mission and methodology, or the negative fall-out on our economy and disruptive jolts to our fragile polity, or the immediate flood of refugees knocking at our doors.

The other two concepts of a ‘short, targeted war’ and suspension of war-like activity during the month of Ramazan also started receding into background because the European, especially Tony Blair’s, perception on these issues was quite different. While formulating these two concepts, General Musharraf himself was swayed by the humanitarian and spiritual considerations.

As a military professional he must have been aware of the brutal realities of war: it has inexorable momentum; it has its own dynamics; the business of war itself being the dirtiest and cruelest business invented by human ingenuity, it does not recognize spiritual compulsions such as the sanctity of a holy month. All of us have seen the Iran-Iraq war which dominated the decade of the eighties and kept the Muslim Ummah deeply divided.

‘A targeted war’ by which we mean inflicting of minimum damage to military targets compatible with the aims of war, and scrupulous avoidance of casualties to civilian life and property is, in fact, the product of precision weapons and a war of limited objectives. Weapons of great precision and yet greater lethality are a very recent invention and still not perfect as their manufacturers claim. One saw their power in the Gulf War.

But Iraq, unlike Afghanistan, was a ‘target-rich’ country. Even then the loss of life suffered by Iraqi men in uniform was horrendous, even outrageous, though the loss of civilian life was nothing as compared to that inflicted upon adversaries during the Second World War, Korean War or Vietnam War. Perhaps we are conditioned by our own experience of India-Pakistan wars of 1965 and 1971, when we reflexively start talking of ‘short’ war!

Observers sitting in Pakistan could see that as a result of his frank and frequent interaction with the European (including the UK) leadership, and pronouncements of some of the Muslim leaders such as King Abdullah of Jordan, the brute reality started having its effect upon that side of President Musharraf which was dominated by noble humanism and laudable spiritual considerations.

When he reached New York the world had already changed. In a short duration the military of Northern Alliance seemed to have acquired considerable muscles, plenty of confidence and abundance of hardware; the destructive and demoralizing effect of the ferocious and relentless bombing by US warplanes guided and directed by grounded specialists from the British and the US special forces started appearing. The fall of Mazare-i-Sharif became imminent. The planned ‘broad-based government’, if it existed in any form, was yet to be sorted out. And if that was not enough, the Indian Prime Minister, Mr. Vajpayee, declared before he took off for the US that India must be given a seat and say on the ‘two plus six’ forum.

Ever since then he has been forcefully harping on the ‘historic ties’ of India with Afghanistan. It is reasonable to assume that in this effort he enjoys quiet but full support of Russia and some of the Central Asian republics. There are unconfirmed reports that some Indian military experts are already operating with the Northern Alliance with the triple object of providing military assistance, creating a foothold in the future set-up, and to learn about the employment of mew weapons and procedures.

Then came the bomb. Exactly a day before President Bush was to speak to the UN General Assembly and only two days before General Musharraf was to meet the US president, Hamid Mir’s interview with Osama Bin Laden stormed the news media and shook the custodians of our various ‘holy places’ and ‘holy assets’. The US president directly alluded to the menace of weapons of mass destruction falling into the hands of the terrorists. We asserted with vehemence that our ‘assets’ were in perfectly safe hands, and that our accounting system about the fissile material was reliable. However, the fact that some nuclear scientists were under investigation during this very period raised many eyebrows, and India unleashed its formidable propaganda machine to malign Pakistan without any scruples or ethics or restraint.

President Musharraf displayed remarkable adroitness and composure. He was not unnerved, even for a moment, on these developments. He retained a posture of strength and composure. Despite a host of things getting out of control he had no difficulty in convincing President Bush that a unilateral march over and into Kabul by the Northern Alliance would have serious repercussions on the strategic balance in the regions, and would only usher in, not the much awaited peace and stability, but a new period of ethnic strife and lawlessness in Afghanistan.

President Bush spoke strongly and clearly on this subject. He did not want the Northern Alliance to make any attempt to capture Kabul. But the time is running out fast. The people of Mazare-i-Sharif are confident that this time around the Taliban would not return. Confident, locals males ran to the barbershops to shave off their beards, and women have come out of the suffocation of solitary, segregated confinement imposed upon them by the Taliban. Northern Alliance has captured the ‘jewel of Afghanistan’ — the historic city of Herat. The airbase of Shindad is not far away.

The turn of events in Kabul has been faster, more dramatic and earlier than anticipated. The rout of the Taliban from Mazar to Kabul is as spectacular and inexplicable as were their effortless and lightening victories six years ago. Whether the Northern Alliance has learned any lesson in civility, humility, ethics and power-sharing on equitable basis right across the ethnic mosaic of Afghanistan, and whether the presence of the US and British advisers with the Alliance will be any effective factor of restraint is yet to be seen.

There are already reports of summary execution of ‘collaborators’ in Mazar and Kabul. But, if the TV pictures are any evidence of reality, the number of those who are dancing with jubilation is more than those who are fleeing in panic. Pakistan’s Foreign Office is trying to configure some sensible formula, but it will take some time and plenty of footwork in the corridors of the UN to convince the US, and as importantly, Russia in favour of a UN control over the capital city until an interim arrangement is put in place. But the fundamental question is: even if the UN takes over control of Kabul, who will run the country?”

The writer is a retired lieutenant-general of Pakistan army.

Next steps on trade

THE World Trade Organization summit was a double triumph of symbolism. By avoiding a repeat of the Seattle debacle of two years ago, the meeting proved that an ambitious attempt to advance international integration can succeed even in this era of globoprotest.

And by launching a new round of trade talks that will focus on the needs of developing countries, the summit showed that the international system need not be the slave of corporate interests. With luck, this double victory could transform globalization’s prospects.

Protest leaders may be persuaded to work within the system. And the new emphasis on the link between trade and development may imbue globalization with the moral purpose that it needs to overcome its many enemies.

The summit only laid out an agenda for trade talks, though, and the fact that even this was difficult suggests the scale of the challenge ahead. This is all the more true since the toughest issues were resolved less by substantive compromise than by linguistic finesse.—-Washington Post