A CRISIS is beginning to simmer between the government of Khyber Pakhtunkhwa on one side, and the federal government and KP Governor Iqbal Zafar Jhagra on the other. At issue is the notification, promulgated by KP governor, for the enforcement of the Customs Act, 1969, in Malakand Division — a territory composed of former princely states and khanate of Swat, Dir and Chitral, encompassing an area of 29,872 square kilometres, with an estimated population of at least eight million, if not more.

These territories were amalgamated in 1970. Article 247 of the Constitution lays down the procedure for extension of any law to the region. Most of KP’s political parties, and the elites of Malakand, have joined hands against the proposed change; which should come as no surprise, since the government has been losing billions of rupees in customs duty evasion (its most blatant example being the sale of vehicles smuggled from Afghanistan, via Dir, to local elites who avoid paying customs duties). Whenever the government attempts to plug this leakage of revenue, the elites organise in resistance, resulting in leaders of the likes of Sufi Muhammad and his cronies, euphemistically called the ‘Swat Taliban’.

Not only is revenue lost, but by failing to police tax evasion effectively, the government encourages a grey economy, which corrupts the state’s ward and watch staff. Isn’t it easy to guess who benefits from this illicit trade? The issue points to a more serious problem, the consolidation of the state into an institutionally strong realm. A slip here could ‘Afghanise’ Pakistan — we know only too well what happened there.

By failing to police tax evasion, the government encourages a grey economy, which corrupts the writ of the state.

When Britain departed from the subcontinent in 1947 it had fulfilled most of its policy ideals except one; the consolidation of peripheral areas in the northwest (including the tribal areas), the North-West Frontier Province, and Balochistan.

These areas were conceived as a physical moat around a castle which began from the eastern bank of the Indus, and continued uninterruptedly to the Bay of Bengal in the east, and from the Himalayas in the north to the southern tip of peninsular India. Pakistan inherited this rampart periphery in the northwest regions, historically never administered as dominantly as the rest of the subcontinent, where the writ of the state was well established.

The real crisis remains what the British were unable to achieve — the consolidation of these regions into the core state. Many of Pakistan’s current issues originate from this imperial failure (be it the insurgency raging in Fata, or the larger issue of Fata reforms) and lately, the enforcement of the Customs Act in Malakand Division.

The Constitution of Pakistan can be analysed in different ways, one of which is how it defines the various constituents forming the state. Originally, the core Pakistani state was composed of Punjab and most of Sindh — hence the benefits from provisions of fundamental rights and development interventions as enumerated in principles of policy — but they are not applicable to either Fata or Pata.

In core areas, the normal laws of the state prevail, including the right of the state to levy taxes and cess. But the Constitution adopts another design when dealing with Fata and Malakand, where it abrogates its sovereignty willingly.

Article 274 of the Constitution defines the basic principles of managing these areas.

The precepts are that the normal laws will not be applicable unless so notified by the president; that the jurisdiction of the high court and the Supreme Court is ousted unless so notified (thankfully it has been extended to Malakand but not Fata); applicability of fundamental rights in Fata has not been notified so far; before making changes in these laws the population will be consulted; and in case of changes proposed for Fata it is the right of the KP governor to make relevant recommendations to the president, via the Ministry of States and Frontier Regions, and of course the prime minister.

In the case of Malakand Division, a provincially administered tribal area, the proposal of amendments to current legal practices, or introduction of a new law to the area, is proposed by the KP governor after consulting the chief minister of KP.

Clearly, the recommendation of KP Governor Jhagra to enforce the Customs Act in Malakand must have been discussed with the chief minister. He is too new to have initiated such a move (a process requiring at least eight to 12 months), barely one month after assuming office.

As in the past, agitation against the current attempt to impose the Customs Act is being driven by the beneficiaries of its exemption. Failure to regulate the entry of duty-free material into Malakand has created a large grey economy which is based on smuggling and tax evasion. A visit to Malakand provides ample proof of duty-free luxury vehicles in abundance, and other goods available for sale.

Also, it must be noted that this particular resistance to customs duties is not new, and has happened at least twice before. The emergence of Sufi Muhammad and Mullah Fazlullah began decades ago, when beneficiaries of customs duty exemptions funded them to lead the agitation against its imposition.

Evidently, one of the main drivers of the insurgency in the Pak-Afghan region (including Fata and Pata) has shifted from its original ideological moorings and been taken over by criminal syndicates, who profit from crime and prosper by evading duties and taxes. Such elements will inevitably react, as their racketeering depends on duty evasion, weapons smuggling and drug trafficking. If not caged in time, they will become harder for the state to police and control.

Imposing customs duties in Malakand is thus a positive step to strengthen the state in the northwest. Hopefully, the government will move swiftly to end the anomaly status of Fata, now that tribal representatives have tabled the 22nd Amendment Bill in parliament, advocating its merger with KP. Such significant policy corrections are not obtained without sacrifice — but they must not be avoided.

The writer is a former political agent and chief secretary, KP.

Published in Dawn, April 11th, 2016