Friends of Pakistan

MAKE no mistake about it — this is Pakistan’s hour of economic reckoning. We need every friend we have ever had and every dollar we can possibly get. It seems then that the Friends of Pakistan forum, which will hold its first meeting in Abu Dhabi next month, could be the right tonic for our economic ills. But caution is in order. Pakistan is running out of dollars at an alarming rate. According to Agost Benard, an associate director at Standard & Poor’s, “The external liquidity position which is now the key concern is continuing to deteriorate rapidly.” What Mr Benard says matters because his agency can dramatically affect Pakistan’s ability to do business in the international market.

Economic analysts are worried by Pakistan’s current account deficit — last year it stood at $14bn, while in just July and August it ballooned to $2.6bn. With foreign exchange reserves standing at a paltry $8.8bn last week, Pakistan simply does not have the foreign currency to sustain the current account deficit. In the medium term, a current account deficit can be turned around by exporting more and importing less. In the short term, foreign aid is the only realistic chance of improvement. The problem is that foreign aid will likely come with strings attached — which will impose wrenching change on the average Pakistani. Through US Secretary of State Condoleezza Rice, the Friends of Pakistan forum has indicated that it is not keen to give Pakistan quick money on easy terms. “We are engaged with Pakistan through international financial institutions,” Ms Rice told the news media, and also mentioned the need for economic reform.

The IFIs have a fairly basic recipe for Pakistan: strip away subsidies, increase tax revenues and cut down the budget deficit. These are good, necessary steps that Pakistan must take in order to improve its long-term economic outlook. The problem is — and experience bears this out — that steps such as these taken in a panic follow a fairly predictable pattern: the cost of living for the poor is driven up, development expenditure is slashed and meaningful reform is shelved once the worst has passed. However, there are several reasons to give Pakistan the benefit of the doubt for now. First, there are international factors involved in Pakistan’s economy going sour — most notably the price of oil and food. Second, the economy is seized by the worst level of inflation in decades. Third, Pakistan has already done away with most subsidies and has planned to slash expenditure. Fourth, Pakistan is struggling to come to terms with a militancy threat that could destabilise the very foundations of the state. Surely the Friends of Pakistan must realise how much more costly it would be to rescue Pakistan later were money to be delayed right now.

Silent majority stirs

FATA’s silent majority now seems to be stirring. It has for years watched in agony the destruction of its environs. Its once peaceful valleys and ravines are now a theatre of war, with homes, fields and shops destroyed, the tribesmen’s means of livelihood disrupted, and hundreds of thousands of men, women and children turned into internal refugees. Even though seething with anger, the tribesmen had failed to act, overawed as they were by the ubiquitous Taliban’s ruthlessness and presumed invincibility. However, things seem to be changing. A report by our correspondent in Landi Kotal informs us that a tribal lashkar in Khyber Agency captured on Thursday nine militants and freed a prayer leader whom the Taliban had kidnapped. Those taking the lead in challenging the Taliban and rescuing the cleric belonged to the Malagori tribe. This is not an isolated example. In the Bara tehsil, the Kalakhel tribe has raised a lashkar and warned those giving shelter to the Taliban that they would be fined Rs5m and their homes demolished. In Bajaur, the main battle theatre, the Othmankhel and Salarzai tribes have openly come out against the militants and are taking vigorous actions permitted by tribal traditions to get rid of the terrorists. Similar trends are emerging in Dir, Buner and Shabqadar.

In 2003, too, some tribal elders had attempted to mobilise their tribesmen against the militants, but the campaign failed because it was government-inspired. This time, however, it is the tribesmen’s own effort, because they have seen havoc being wreaked on their traditional way of life by local and foreign Taliban. The government has to build on this positive development and secure the active cooperation of those among the anti-militant tribesmen who are willing to take on the Taliban and restore peace to their area. One major reason for the change in the tribesmen’s attitude is the losses the Taliban have suffered in the ongoing military operation. The operation must be carried on relentlessly, and the enemy given no respite.

During Ramazan the Taliban have blown up gas and water pipelines and destroyed electric installations to cause hardship to the people in order to arouse anti-government feelings. The authorities must, therefore, ensure the security of vital installations by enlisting the community’s cooperation. Also, to ensure against collateral damage, the people should be warned in advance of a crackdown so that the non-combatants are evacuated well in advance.

A job well done

FRIDAY’S police action against suspected terrorists in a Karachi locality comes as a reality byte that home-grown sectarian and extremist outfits are but extensions of global terrorist networks like Al Qaeda. There is no ambiguity now that the terror machine that has unleashed itself against targeted individuals and the public alike in Pakistan is more organised than hitherto believed; it can and does strike at a place and time of its own choosing, as the recent bombing of the Marriott hotel in Islamabad shows.

The Sindh Police must be given credit for the coordinated effort they launched together with the intelligence agencies that made Friday’s operation a success. The nabbing alive of a main suspect, Rahimullah alias Ali Hasan, who was wanted for many a bombing in Karachi, and who led the police to the scene of his accomplices’ hideout on Friday, was a rare accomplishment which brought about dividends. The three terrorists killed in the operation had kidnapped the oil trader who transported supplies to Nato forces in Afghanistan and whom they shot dead soon after the police surrounded their house, which speaks of the brutal and inhuman mindset of the terrorists. They were planning more ghastly attacks in and around Karachi in the days ahead, as details from the scene revealed. If such pre-emption and thus prevention of acts of terrorism become a priority with our law enforcement and intelligence agencies, the menace can be curbed more effectively than has been the case so far.

On a different note, one feels that perhaps a bit of restraint was in order as the provincial home minister gave vent to his anger against a section of the media while collecting kudos for his ministry and divulging details of Friday’s operation. Mr Zulfiqar Mirza may be entitled to feel like a hero sticking it out for the underdog, as he claims, but that does not make the public office he holds immune from scrutiny. The media, too, acts as a public watchdog in a representative set-up. Moreover, isn’t tolerance of diversity of opinion a basic ingredient of democracy?

OTHER VOICES - Indian Press

Heartening outcome

The Hindu

FOR six decades, Pakistan held relations with India hostage to the demand that the Kashmir dispute should be settled first. Successive military regimes upheld this retrogressive view of the bilateral relationship, insisting that normalisation could not happen without resolving the “core issue” of Kashmir. The return of parliamentary democracy in Pakistan after a spirited struggle has brightened prospects for better relations with India. Pakistan’s new leaders, particularly President Asif Ali Zardari, have implicitly promised to break with the old paradigm, which was based on mutual suspicion. For its part, political India has made it clear that it looks forward to working with the new democratic dispensation in Pakistan. Prime Minister Manmohan Singh’s recent meeting with President Zardari in New York appears to have imparted new momentum to the peace process. A particular gain for India is the assurance given by Mr Zardari that the new government in Islamabad will stand by General Pervez Musharraf’s January 2004 commitment that Pakistan would not allow its territory to be used for terrorist activities against India.

The fact that a democratic regime is in place in Islamabad has made it easier for New Delhi to restart the composite dialogue with confidence and fresh hope. While acknowledging that the process has been “under strain” in recent months, the two leaders have affirmed their determination to defeat the enemies of detente. Pakistan, which recently suffered a calamitous terror strike, recognises that it will be to its advantage to make common cause with India in fighting terrorism. The two leaders have done well to agree that the joint anti-terror mechanism will meet next month to address “mutual concerns,” including the bombing of the Indian embassy in Kabul. The political willingness of the new dispensation in Islamabad to address India’s longstanding concerns over cross-border terrorism bodes well for the normalisation process. Mr Zardari believes that the best way to “re-invent” relations with India is to develop bilateral trade. It is certainly significant that the two leaders have agreed to open the Atari-Wagah road link, which has been closed to normal traffic of goods and people for 43 years, and the Khokrapur-Munabao railway route for trade in “all permissible items”. Another bold and imaginative gesture, which will have its own resonance in the context of the recent agitation in the Kashmir Valley, is the decision to allow trade across the Line of Control. Mr Zardari’s evident eagerness to break new ground with India has injected a new dynamism into the bilateral relationship. Now is the time to put the composite dialogue back on track and move forward boldly and imaginatively. — (Sept 27)

People’s right to know

THE world celebrates Sept 28 as International Right to Know Day and the decision to mark this day was taken on this very day at an international meeting of right-to-information activists in Sofia, Bulgaria, in 2002. They proposed that the date be dedicated to the promotion of access to information worldwide.

Over 80 countries, including Pakistan, have carried out legislations on the freedom of information and many other countries are in the process of enacting laws to facilitate citizens’ access to information.

This year, this day has special significance for Pakistan as we have once again been able to put the derailed process of democracy back on track. The nation can ill-afford this long, drawn-out oscillation between dictatorial regimes and democratic dispensations, an obvious characteristic of our political history. We have had general elections before; the nation has witnessed oath-taking ceremonies of presidents, prime ministers, speakers, chief ministers, ministers, MNAs and MPAs in the past. But it has also seen democratic set-ups overthrown time and again.

How can we put in place a democratic system that has the ability to sustain itself and would not be taken over by a dictatorial juggernaut? In order to answer this question, we need to understand how politicians and some sections of the press have deliberately promoted the self-serving concept of public accountability. Furthermore, we need to understand the concept of public accountability, its linkage with the right to information and as to why the world celebrates the Right to Know Day.

Politicians would like us to believe that people hold them accountable through elections. They have been harping on about this forever and the concept of electoral accountability has now achieved a ‘hallowed’ status. These representatives want a carte blanche from citizens in the intervening period between two general elections. How can we make informed choices about who to elect if we are ignorant about the financial conduct of our politicians when they are in power? After all, we elect them to put our resources to judicious use for our collective benefit. How do we know that our resources are not being squandered?

Politicians conduct media trials of one another by issuing statements of alleged rent-seeking, embezzlement and the misappropriation of public funds. The truth, however, remains elusive as these statements amount to nothing but words. Instead of conducting deeper probes and looking beyond these statements, the media continues to facilitate the blame game, creating a trust deficit for politicians. As a result, no tears are shed when they are sent packing. This has happened in the past and has the potential to happen in the future as well. How can this situation be rectified? This is where a citizen’s right to know comes into play.

The emphasis on electoral accountability needs to be replaced with everyday accountability. This is in the best interest of politicians as a class. Proceedings of the standing committees of parliament need to be made open to journalists and concerned civil society groups who should be invited to participate in these meetings as observers. Some democracies have effective legislation on the freedom of information to ensure daily accountability. Such legislation provides citizens easy, cost-effective and speedy access to information. Our current legislation on this issue came about in the shape of an ordinance in 2002. It was a decision on policy actions agreed on with the Asian Development Bank during negotiations for the loan.

The government, however, is in the process of repealing this weak law. The Freedom of Information Bill 2008 has already been drafted and the government is likely to present it in parliament for discussion. The significance of this law for the media as the fourth pillar of the state can hardly be exaggerated. Apart from providing a framework for proactive disclosure of information, it will provide guidelines to journalists on the submission of information requests in order to have access to official documents.

In other words, they will be able to investigate how true corruption charges actually are with trouble-free access to public documents. This way, they will be able to keep a watchful eye on public representatives and ensure everyday accountability. Therefore, it is extremely important that we have an intense discussion on this law in print and on the electronic media.

No matter which political party has been in power, we have never believed that it is ‘our government’. This has been largely due to the fact that we have not been made to feel a part of a particular regime. We may have meagre resources but we do need to know how these are being managed and spent. This will only happen when there is a free flow of information. If a government is not open, what difference does it make whether it has a general or an elected politician at the helm?

zahid@cpdi-pakistan.org

The iron embrace

TWO streets, separated from each other by seven and a half miles and several billion dollars, united this week in an iron embrace that will see them either go down together or survive together.

To the east is Wall Street, the stretch of imposing masonry in downtown Manhattan at the centre of the global financial meltdown. To the west, a hop across the Hudson, is Main Street in Newark, New Jersey, a stretch of clapboard houses and corner shops that is already feeling the cold blast of a downturn.

Wall Street was named after the wall built in 1653 to protect the fledgling New Amsterdam settlement against the intrusions of the British. But few remember that now. What began as a defence for the common person was this week cast as the common person’s enemy. At least, that is how the coalition of New York unions were portraying it at a protest rally against the proposed $700bn bail-out. “Wall Street sucks,” the crowd chanted outside the forbidding entrance of the New York Stock Exchange.

Class war had come to Wall Street. As Arthur Cheliotes, president of the union of New York administrative employees, put it: “There’s a lot of anger among our members. Wall Street is handing us the bill for a party they never invited us to.”During their lunch break from the pandemonium of the trading floor, several traders stood listening to the bile that was being directed at them. Gary was bemused by what he heard. “We’re in a total mess, but I don’t see how it’s totally our fault. People keep bringing up CEOs and their huge pay — but they are just a tiny part of what goes on here.”

“They say bail out!” a union rep burst in as he bellowed at the protesters through loud speakers. “We say get the hell out!”

Leonard Bauer, dressed in a standard-issue dark blue suit, said how he and his colleagues from Bank of America were working around the clock on the deal to buy Merrill Lynch.

“It’s pretty messy,” he said. “The way the markets are going you have to work on everybody — this is not a question of us versus them.”

The don’t-blame-us theme was continued by an insurance broker who preferred not to give his name (“I think it’s better not to.”) “Everyone shares the blame. It’s people outside Wall Street who tried to get a house they couldn’t afford and a car they couldn’t afford. Everyone has to take part of the blame and work together to fix this.”

Though it is less than 13km away, Main Street in Newark is another country. The neighbourhood is so surrounded by railway tracks it is called Ironbound, and has a high concentration of Brazilian immigrant residents.

There is none of the austere grandeur of Wall Street here, nor any of its sense of corporate power, and two storeys pass as high-rise. Despite the contrast, it quickly becomes clear that this Main Street, like Main Streets in towns across the United States, is umbilically linked to the financial powerhouse to the east.

The owner of Betel bakery says trade has been down by about a third since the financial crisis on Wall Street began. Nani Silva supplies restaurants throughout New Jersey and New York, and she can put a clear figure on the slump. Before the crash, her customers used to buy $2,000 worth of supplies in a day; now they will spend less than $1,000. “It’s crazy right now,” she says, adding that if it stays like this for much longer she will think of returning to Brazil, which she left four years ago.

Down the street, Marcio Rodgrigues was unaware of the plan for a $700bn bailout until we informed him of it. “Seven hundred billion dollars. Wow!” was his reaction.

He is in the local construction business, and says orders are down by at least half over the past few weeks, partly as a result of a spate of foreclosures that has swept the area as homeowners have become mired in debt.

As we talk, he keeps returning to the figure of $700bn. “That’s a lot of money. They should give that to us, the taxpayers. If they did that, we would spend the money and the depression would be over.”

The massive movement of stocks on Wall Street may seem a world away, but here on Main Street they are making all the difference to the dollars and tips.

— The Guardian, London