Dna issue 24 compressed

Sunday, 18 - 24 May, 2014 i issue 24 i Pages 16 i rs. 25

FIRST YEAR REPORT CARD

ONE YEAR OF SHARIFS

ON WAY TO A FIGHT WITH INSTITUTIONS ONCE AGAIN

BJP’S SWEEP AND CHALLENGES AHEAD

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OPiniOn: Arif nizami

COver StOrY: Aziz-ud-Din Ahmad

TWO BOTTLES OF WINE STILL, HOPE FOR THE BEST, BE PREPARED FOR THE WORST Page 4 OPiniOn: Humayun Gauhar

THE QUINTESSENTIAL TEACHER MAN OF FACTS, AND STATS, EXPLAINS THE ECONOMY AND ITS PROBLEMS Page 10 interview: Dr Hafiz Pasha

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C M YK

Sunday, 18 - 24 May, 2014

editorial Dedicated to the legacy of the late Hameed Nizami

Arif Nizami Editor

Aziz-ud-Din Ahmad

Shahab Jafry

Asher John

Joint Editor

Associate Editor

Chief News Editor

Is anyone minding the seminaries?

Lahore – Ph: 042-36375963-5 Fax: 042-32535230 Karachi – Ph: 021-35381208-9 Fax: 021-35381208 Islamabad – Ph: 051-2287273 Fax: 051-2818125 Web: www.pakistantoday.com.pk Email: editorial@pakistantoday.com.pk

Scorecard Another year of uninterrupted, sacred democracy!

N

awaZ’S third first year as prime minister has not been without its surprises, as usual. and he’s been quicker this time to expose his soft underbelly; going out of his way to accommodate his core constituencies. So, just as much as the about turn on initiatives to broaden the tax net was meant to cajole his industrialist brethren, the sudden liking for talks to the taliban also served to soothe his religious-right vote bank once the clergy made its opposition to military strike in North waziristan (Nw) clear to Mian sahib.

But the 21st century is a different brand of politics. and it increasingly seems that those schooled in the old Zia-model must either adapt or perish.

Unsurprisingly, this is where the prime minister is betraying far too strong a liking for the old way of doing things to inspire much confidence in his ability to survive in the long run. Pakistan has become a very different country than last time he was in power. an active insurgency is eating into the state, minority persecution of the ‘90s has turned into proper genocide

with the centre barely blinking, and arch rival india is bringing Narindra Modi – the epitome of far-right, Pakistan-hating, Hindu politics – to power in New Delhi. this, of course, when the americans are leaving afghanistan – most likely lock, stock, and barrel – and remnants of the old, antiPakistan Northern alliance are set to assume power in Kabul.

Now there was a time when Pakistan played power-broker in the region’s shadow wars. the strategic depth doctrine ensured complicity across the western border, and the military’s militant proxies set the balance with the quantitatively superior military machine on the india front.

But how times change. Mian sahib’s right-of-centre posture sits so at odds with the rightist Modia whirlwind in india, while at the same time lamenting the loss of religious-right taliban influence in afghanistan’s emerging setup. His promises of economic revival, too, have fizzled out. the rupee was painstakingly bolstered just when exports needed an uptick, and other than the 3-G, 4-G auctions, all economic

initiatives, especially the eurobonds, have been mindbogglingly self defeating. inflation is high, especially in staple food – criminal for an agri-based economy – and famines have begun surfacing in parts of the periphery. if the N-league has had a win, it is in scoring points over the military. For a while, especially around the time Gen Musharraf was indicted, there was satirical chatter that the ruling party considers no better credential for democratic strength than ridiculing the military. But while a stronger polity and a more compliant military are good for everyday business, present times dictate a more prudent approach.

Mounting internal and external troubles mean the military and the government must be on the same page, now more so than ever, and first ensure Pakistan survives the many problems that surround it – military, political and economic.

Unless such realisation is found, the ruling party will have little to celebrate from its first year in power except just that – another year of uninterrupted democracy. g

Shifting sands Symbolism in politics, and economics

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olitical sands are shifting not just in the country, but the wider region, and beyond. and since this is not the first time Nawaz’s close circle has assumed reins of power, there can be little doubt that they must understand these changes profoundly. But going by their many unceremonious ousters, there is always that lingering doubt that they can take the beaten path again, perhaps out of reflex action if nothing else.

Body language matters in politics, as does symbolism. the first thing political analysts are taught is deciphering body language during and after important briefings and encounters. and Mian sb’s body language has been mostly positive, quite front-foot; except, of course, those few moments caught on tape during the first few days of the Musharraf government, when the ousted prime minister, teary eyed, stared into cameras from behind prison bars.

But bank only on symbols and gestures and your political credit evaporates rather quickly. Perhaps Mian sb never stayed in power long enough to recognise these subtleties. For, again, he is big on images and small on action. take the high profile Karachi meeting the other day as an example. it was actually the highest profile meeting ever held in

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the former capital. Yet that is all it was. an opportunistic setting, complete with the iSi and army chief, and smart of his planners to send off an invite to former president Zardari as well. But beyond that there has been nothing, not even a whimper.

But even if his personal style causes confusion in the country, it has its share of adherents and admirers within the N league. and no better follower than the finance minister. Granted, ishaq Dar has worked seriously hard this time around. and his efforts have seemed all the more sincere considering the economic and financial paralysis of the previous government, particularly towards the end. But, again, the boasts are widely divorced from reality. Propping up the rupee is artificial and actually hurts the balance of payments; and sooner rather than later the buffer will evaporate. inflation continues to be high, particularly food inflation. the circular debt has bloated again, at a frantic pace. and the energy problem shows no sign of easing in the foreseeable future. it would be far more prudent if the PM, and his team, concentrated more on actions and strategies that are possible to translate into intrinsic benefit for the country and the people. g

Urgent action needed

A

number of negative reports about the madaris or seminaries have recently appeared in the media. Early last week a seminary head was arrested in Mansehra in a gang rape case. an earlier report told of as many as 20 seminaries in Rawalpindi being used by the taliban for terrorist attacks. another report by police claimed that suicide bombers are provided the last-moment support by the administrations of some of the seminaries and mosques located in the targeted areas. Victims of kidnapping for ransom too have been kept here before being shifted to tribal areas. another report named seminaries avowedly assisting the ttP with the collection of extortion and ransom money from islamabad and arranging deals between the militants and their victims.

Despite the dramatic revelations there was no action by the government because of its soft corner for ttP. Viewed from a broader perspective the rise of the madaris is the outcome of the abysmal neglect of education by successive governments including the present one. Most people are forced to send their children to seminaries because there are no educational facilities where they live or they are unable to afford the expenses.

Unlike government schools, the seminaries also provide free food and lodging and the prospect of a secure job afterwards in mosques

whiteLies Apollo

or madaris or as self-employed Qaris in cities. irrespective of their pompous claims the governments in Pakistan have never given priority to education. in Balochistan half of the population is deprived of education, with the literacy rate in some areas is as low as 10 per cent, according to the chief minister’s adviser on education. a government girls high school located in the heart of Quetta with 2500 students has no functional toilet. one can understand the plight of other schools in the interior of the province. the previous federal government passed article 25-a making it mandatory for provincial administrations to provide free and compulsory education to school age children. Sindh is the only province which has enacted a law in pursuance of the constitutional requirement. ironically, the province has over 6,000 ghost schools. KP remains reluctant to enact the law on free education on account of paucity of funds. So is Punjab, which doesn’t have money to construct 78,000 new classrooms to accommodate out-of-school children. Such is the state of neglect in the province that 12,000 students of junior classes await text books a month and a half after the start of the academic year. this explains why the madaris, flush with petrodollars supplied by Gulf patrons with a sectarian agenda, continue to flourish and create problems. g

For feedback, comments, suggestions and, most importantly, tips, contact us at whitelies@pakistantoday.com.pk

Guess who the prime minister made the boss of the Zarai Taraqiati Bank Limited? A former cricket buddy of his!

Constantly deriding the previous government for cronyism, the incumbents aren’t above the trait either. Is the management of the country’s premier agricultural credit institution a spoil to be doled out?

If your crony’s a one-time cricket enthusiast, why not make him the boss of the cricket board instead... oh, wait. g

********** IT looks like our man in the uK, Wajid shams-ul-Hassan, is set to break the sindh governor’s record as the longest serving guy on his respective job.

A political appointee, he was supposed to go soon after the previous government left. But the present government’s replacement for him didn’t get the security clearance from the spooks. And there was yet another problem with their plan B as well. so Wajid’s still at it. g

C M YK

Sunday, 18 - 24 May, 2014

OpiniOn

One year of Sharifs BJP’s sweep and challenges ahead

Arif nizAmi

The writer is Editor, Pakistan Today.

W

Hat ordinarily should have been treated as a routine matter, nawaz sharif attending the national assembly session the other day, was breaking news for news channels. it was so as the prime minister was gracing the lower house after a gap of almost five months, the second time in the year. sharif chose not to speak and merely listened in to his trusted lieutenant, Finance Minister ishaq Dar, painting a rosy picture of the government’s economic performance and giving a road map for the next three years to the parliament. the prime minister could have used the occasion to brief the parliamentarians on the ongoing charade being termed as negotiations with the ttP (tehreek-e-taliban Pakistan) and his recent efforts along with the military to restore peace in karachi. since assuming power, he has chosen not to visit the senate even once. Perhaps for the simple reason that the ruling party does not have a majority till March next year, when half the members of the upper house will be re-elected. this would have been a good opportunity to take the Mnas on board on the government’s policies and initiatives. But unfortunately it was missed. after all, parliament is the repository of power and should be strengthened, especially at a time when the ruling party is facing multifarious challenges from various quarters. But perhaps the prime minister, by attending the na session, only made a halfhearted attempt in that direction. the government’s report card being in office for almost a year is rather mixed. ishaq Dar can incessantly crow about stabilising the economy by getting more loans to retire the old ones and keeping the rupee dollar parity to less than 100 rupees. the economic roadmap

presented to the federal cabinet and the national assembly does not instill much confidence. For example, to cite keeping inflation in single digits as a big achievement is fallacious, to say the least. inflation was kept even lower during the PPP regime not known for competence or transparency during its five-year rule. Retiring the circular debt, auctioning 3G and 4G licenses, and securing loans and grants from friendly countries and donors is also being claimed as a mark of success of the government in stabilising the economy. admittedly, Dar is working 24/7 with a zeal and fervour previously missing. But where is the beef? the question that needs an urgent answer is: has the engine of growth re-ignited in the past year? keeping the rupee down though artificial infusion of capital is fine.

But is it a long-term solution to the problem?

On the flip side it is negatively impacting our exports by making them less competitive. similarly, come payday for international debt, the rupee could come under severe pressure possibly resulting in a run on it. a reform agenda is entirely missing from the economic roadmap presented by the finance minister with much fanfare. Unless the economy is restored and deregulated on an institutional level prosperity and stability will remain elusive. there is a lot of talk from official quarters about foreign investors being bullish about investing in Pakistan. But is it possible without deregulating the economy and rooting out terrorism?

‘The economic roadmap presented to the federal cabinet and the National Assembly does not instill much confidence’ in the presence of travel advisories declaring Pakistan an unsafe destination, and our airports and hotels being protected like fortresses, only the brave will venture to invest here. With the PML-n government obstinately procrastinating to single-mindedly pursue a counter terrorism policy presented by the military, the prospects do not seem good. it seems to be keener to settle scores with former dictator Pervez

Musharraf. thus creating unnecessary tensions with the military leadership at a crucial time. the nawaz government is under no immediate threat of being sent packing. the recent photo op at the karachi Governor House with the prime minister huddled on a sofa with former president asif ali Zardari on one side and the COas general Raheel sharif on the other, says it all. to summon a high level meeting on karachi in karachi with the army chief attending and Zardari invited was not only unprecedented but politically a savvy move. it is evident that the PPP is biding its time and is in no mood to upset the apple cart. the army on the other hand, under Raheel sharif, is asserting itself while at the same time following the kayani model and is in no mood to overtly intervene. nonetheless, judging from history nawaz sharif and his advisors have the propensity to commit political hara-kiri. Hence the prime minister and his team need to be mindful about the sensitivities of the military for their own sake and sake of democracy in the country. across the border the BJP’s crushing victory has virtually routed the ruling Congress party after a decade. according to analysts few had doubted a BJP victory but no one anticipated it being quite so empathic and unprecedented. according to London’s Guardian’s correspondent Jason Burke: no political group has seen this level of power in india since the 1980s.

Editor’s mail

Send your letters to: Letters to Editor, Pakistan Today, 4-Shaarey Fatima Jinnah, Lahore, Pakistan.

Fax: +92-42-32535230 E-mail: letters@pakistantoday.com.pk Letters should be addressed to Pakistan Today exclusively

Sanctity of nationality

those whose job it is to stop such unauthorised entries. the target killings in karachi have been linked to mercenaries living in south africa, or former Eastern Europe. spread of illegal prohibited lethal weapons inside Pakistan is also linked to organised smuggling with connivance of customs, designated port and border intelligence agencies etc, which facilitated thousands of containers going missing after leaving our port. We live in a country where

Pakistan today faces terrorism of worst kind, because of our failures and greed dominated corruption, which has made acquisition of vital documents such as passport, niC etc a purchasable commodity, while anybody willing to pay, can sneak into this country without documentation, commit crimes and then walk out greasing palms of

narindera Modi as a prime minister with such a thumping majority has far reaching implications for Pakistan. the new indian prime minister does not need allies or political compromises to rule. He has the wherewithal to unabashedly pursue his agenda. sharif and his foreign policy advisors will soon have to work out a strategy to deal with Modi, whose election plank prominently includes dealing a firm hand to Pakistan. some of the BJP hardliners had dubbed Prime Minister Manmohan singh a Pakistani agent for ostensibly being soft on its estranged neighbour. sharif cannot meet this challenge alone as the military has a pivotal role to play in our india policy. the BJP has many Pakistani bashers amongst its folds. Let us hope that better sense will prevail and Modi, like his predecessor atal Behari Vajpayee, will extend an olive branch to islamabad. the so called Lahore Process, when the indian Prime Minister atal Behari Vajpayee visited the Punjab capital in early 1999 on a bus was nipped in the bud by the then COas General Pervez Musharraf. He effectively sabotaged it by launching the kargil misadventure. sharif claims that he was not taken on board on kargil. But few believe that he had no knowledge of the harebrained and militarily disastrous scheme. in this context it unlikely that Modi will give a walkover to

for over two years, chartered aircraft involved in non-scheduled cargo operation were allowed to land at karachi international airport by corrupt Caa officials, remain parked for days with no record, while the cash paid was pocketed by powerful members of this mafia. there should be some mandatory criterion for former Pakistani passport holders, who for more than twenty years have taken foreign nationality, while choosing in this interim period not to keep either their Pakistani passport or niC updated. Dual nationals are those who retain their Pakistan origin status, while adopting foreign nationality. However it

islamabad. He will be cautious while dealing with his Pakistani counterpart.

Demands from Pakistan to reign in the co called non-state actors will gain traction under BJP. similarly there will be more strident calls to bring the perpetrators of the Bombay carnage to book. the present COas does not seem to be impetuous and reckless like Musharraf. Hence a combination of firmness as well caution will have to be followed by islamabad.

‘There is a lot of talk from official quarters about foreign investors being bullish about investing in Pakistan. But is it possible without deregulating the economy and rooting out terrorism?’

Perhaps economic cooperation with new Delhi and promoting trade ties should be islamabad’s mantra. at the same time adventurers like Hafiz saeed and his ilk would need to be reined in. this is also the time to move in tandem with the military to root out the existential threat in the form of terrorism. Perhaps time has already run out on tweaking the india centric security paradigm. But there is no harm in trying. Better late than never. g

must be understood that those who have pledged an oath of loyalty to another country and its sovereign, cannot be given a right to hold any public office (paid or elected), head a political party, indulge in active politics or hold any diplomatic assignment except of an honourary status. if there are genuine second thoughts and somebody’s conscience has woken up from slumber, it would perhaps be vital that a fresh oath of allegiance be taken before a passport is issued, making it mandatory to swear undivided loyalty to Pakistan, its constitution and laws.

ALI MALIK Lahore www.pakistantoday.com.pk 03

C M YK

Sunday, 18 - 24 May, 2014

opinion

Two bottles of wine Still, hope for the best, be prepared for the worst Humayun GauHar

The writer is a political analyst.

He can be reached at: humayun.gauhar786@gmail.com.

F

irst reminder: I’ve have said many times that every freedom has limits, the first of which is when one freedom crosses the line and starts transgressing into another freedom. We saw that last Sunday. Freedom to protest peacefully is a democratic right.

But so is freedom of movement.

When Imran Khan’s rallies blocked large parts of Islamabad and Lahore and Tahir ul Qadri’s blocked large parts of Rawalpindi and 59 other cities, people were confined to their homes and their freedom of movement was violated by freedom of protest.

Similarly, freedom of speech ends when it starts libeling a person or an institution without proof, for the right of protection from defamation is the duty of an Islamic state to enforce, as Geo TV has discovered to its anguish.

The government and its electronic media regulator, PEMRA, singularly failed to protect the army from defamation. That is why I say that if Geo is to be closed down, the useless, toothless regulator PEMRA should be closed down too, its members prosecuted and a new regulator with teeth brought in.

It is all very well to want all sorts of freedoms, but you must know what freedom means and the responsibilities it brings with it. Freedom to eat nutritious food is another God-given right, but it doesn’t mean you should start eating human flesh, actually or figuratively, as happens in our rapacious system. second reminder: I’ve said many times but it doesn’t get dinned in that unless there is a genuine people-backed revolution, of which chances seem dim, I want this political system to remain and this government to run its course despite the damage.

However, with so many fires of frustration raging, you never know. The spark could come suddenly and become a conflagration. Unless there is leadership backed by ideologues, cadres and a vanguard, the conflagration will lead not to revolution but to anarchy and even nihilism (belief that nothing is worthwhile).

Hope for the best and be prepared for the worst. For the present, without a viable alternative, better to let this system run and this government to complete its term despite its ineptitude. Let the rulers

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discredit themselves as its predecessors did. There is always an outside chance that the system might gradually correct itself.

And if Nawaz Sharif extricates himself for his many self-created crises he could last his term. This dispensation has become untenable and unstable and change is inevitable, for better or for worse. Wait for it. Change could be evolutionary, revolutionary or chaotic. Change by military is temporary and after a short period of comparative stability and economic growth, we have to start all over again. The world and our region are changing very fast and Pakistan even faster. Historical forces don’t have the time for yoyo countries lurching from crisis to crisis, civilian ineptitude to military dictatorship. Sure, there

Imran is forming an alliance with some opposition parties to force electoral reforms. But beneficiaries of the system won’t let go of their ‘right to rig’ so easily

are many who are impatient for change because they think that saving Pakistan takes priority over saving this system and government and the sooner they go the better before the country becomes irretrievable.

Some of Nawaz Sharif’s selfcreated crises are needless confrontation with the army that could lead to the opposite of what he is trying to do and the vengeful treason trial of Pervez Musharraf, perception of rampant corruption, appointing pliable, incompetent favourites to important bureaucratic positions, legitimising the banned Taliban by holding bootless talks with them, increasing our debt stock frighteningly by taking more and more foreign and domestic loans to create the mirage of economic growth, printing billions of rupees

daily and increasing inflation, leaving numerous public sector enterprises headless and appointing inappropriate heads to other public companies, surrounding himself with family and a mediocre cabal, inability to bring law and good order, inability to deliver justice from the grassroots up, pious declarations instead of delivery especially of energy, clean water, education and health, no private sector job-creating investments, inability to control inflation, particularly food inflation, inability to stop real incomes from declining, inability to see the big picture, inability to prioritise and overall deviation from his mandate. Still, I don’t want army intervention unless it is absolutely inevitable to save the country from falling apart or into the hands of terrorists.

Intervention aborts our people’s learning process and eventually takes us back to where we left off or worse. It erodes the army’s professionalism and fighting capability, especially when it is running the country and fighting enemies on many external and internal fronts at the same time.

True, in the final analysis militaries are charged to save their countries, but when they have to save a country from itself it reflects a chronic national sickness. So don’t disrupt this dispensation. Let it continue. Let the people reap the harvest of their voting decisions and partake of its fruit, bitter or sweet. Only then might they learn, hopefully make better decisions in future and with a bit of luck this decrepit system might self-correct.

Another pipedream perhaps, but it’s worth our most patient try, otherwise its curtains with a choice between military rule, terrorists parceling the country out between them into religious fiefdoms, anarchy or Pakistan collapsing.

Last Sunday came and went with impressive rallies by Imran Khan in Islamabad and Lahore and by Tahir ul Qadri in Rawalpindi and 59 other cities.

Imran is continuing with serial

rallies; Qadri says he will start a continuous movement from July.

Imran is offering the old wine of electoral reforms in the old bottle of the same system, Qadri the new wine of devolution in the new bottle of a revolutionary democratic system with direct election of the chief executive. Let the people choose through the ballot or the street, but if wishes were horses elephants would fly.

Imran is forming an alliance with some opposition parties to force electoral reforms. But beneficiaries of the system won’t let go of their ‘right to rig’ so easily. He should be careful lest they make a fool of him like Qadri was fooled when his earlier Islamabad sit-in ended in a deal and a whimper.

How is Qadri going to do it? By holding a countrywide

Saying revolution is one thing, bringing it is quite another. Writing a new constitution is one thing, giving it legitimacy is a very difficult another. It requires consensus of the people, the real stakeholders movement he could prepare the ground for another army intervention, Egypt style. The army will likely forget Qadri and fall back on its Standard Operating Procedure: more old wine in old bottles and the people will finally get drunk, unless the army has a new template up its sleeve, which would be a surprise.

Generals may be able to bring normalcy and kick start the economy for a while, but they are not trained to run a country longterm and soon come a cropper.

Saying revolution is one thing, bringing it is quite another.

Writing a new constitution is one thing, giving it legitimacy is a very difficult another. It requires consensus of the people, the real stakeholders. Both Imran and Qadri have demonstrated that

they have considerable support and pulling power, not least because people are fed up with this dispensation and will rally around anyone that talks of change. But to build majority support they need to understand strategic communications and perception management. The more there is perception of system failure the easier it will be.

Overthrowing a government or a constitution is easy, what to replace it with is far more difficult. And that is where revolutions fail and become anarchy, as we have seen in Egypt and the Ukraine. Egypt is back to where it started, with Air Marshal Mubarak replaced by General Sisi. That is all. Which is why Egyptians, who love jokes, call Sisi ‘CC’, acronym for ‘Carbon Copy’. But they do have a new constitution and are trying to finish the Muslim Brotherhood.

Movements with support at the grassroots don’t get obliterated so easily. In fact, adversity makes them stronger. The best way to defeat such movements is by delivery, good governance and changing mindsets with education. Nasser tried to eliminate the Brotherhood and hanged dozens of clerics and scholars. He left the Brotherhood stronger and gave rise to Syed Qutb who made violent Jihad a pillar of Islam that produced Al Qaeda and the Takfeer. So be careful.

The Muslim Brotherhood is not to be confused with the our Taliban, which is not a movement but a terrorist group that wishes to grab power by using a misinterpretation of Islam as cover for legitimacy and brainwashing an illiterate people who are literal Muslims by birth and don’t know their Faith. Such groups need to be wiped out before they become movements. So be careful again.

Sisi may be making a grave mistake by trying to eliminate the Brotherhood by fiat. Nawaz Sharif is making a grave mistake by negotiating with the Taliban instead of crushing them.

PostscriPt 1: Its comical that former governor Punjab Lt General Khalid Maqbool and current and longest serving governor Sindh Ishrat ul Ibad apparently deny that they had anything to do with the imposition of emergency on November 3, 2007. It betrays their lack of logic. If all those named in the Proclamation of Emergency Order thought that it was unconstitutional or were not consulted, they should have resigned forthwith. So even if we take them at their word, by staying on in their posts and continuing to work under the 42day Emergency they became “aiders and abettors” post facto.

You can’t have it both ways, Sirs.

PostscriPt 2: I wouldn’t have used the title ‘Two bottles of wine’ if the old chief justice Iftikhar Chaudhry had still been around for he might have taken suo motu notice against me. But then I am not so pretty as Atiqa Odho. g

C M YK

Sunday, 18 - 24 May, 2014

opinion

Heroes of Hindu nationalism

it looks as if Modi’s Hindu nationalists intend to do with the indian Muslims, what the Christian rulers of Spain did with their Muslim subjects

BaSHarat HuSSain QizilBaSH The writer is an academic and journalist. He can be reached at qizilbash2000@yahoo.com.

H

istory is being made in india. the sun of secularism has set. A new dawn is beginning, the dawn of Hindu nationalism. How different will india be under the ‘new nationalists’, whose guiding philosophy is Hindu religion? in less than seven decades, the Nehruvian principles of secularism and liberalism seem alien in his homeland. such can be the ravages of time.

Like the secular indian nationalists that have been pushed away from the centre stage; the Hindu nationalists will also pass off in the nothingness of time, however, for the moment they are a stark reality and therefore merit a close study. it is perfectly normal for individuals to believe in and practice a religious ideal but only at the individual level. if the institution of state is used to promote and impose a particular brand of ideology then those who do not subscribe to it are relegated to the status of ‘second class citizens’ with no room to live as free citizens pursuing ideals according to their conscience.

Almost every country of the world is a pluralistic society inhabited by large groups of people living side by side yet different in religion, language, ethnicity, culture, etc. if the state is secular, every citizen can associate with it in the hope of being treated equally and fairly, however, if the state adorns the mantle of a particular creed then those that do not adhere to it are victimised resulting in dissatisfaction, disgruntlement and discord all around. the enthronement of Modi and Co at the helm of the state is

a sign of retrogression and not progression in india. it is retrogression in the sense that these ‘new nationalists’ will try to shape the future on the basis of Hinduism as it was defined and interpreted by its leading lights during the first half of the last century. Modi and Co are heroes of the present Hindu generation whereas they themselves are followers of another set of the past Hindu heroes. Now, let’s turn to those heroes of these new heroes of Hindu nationalism.

Every Hindu nationalist worth his salt looks upon Vinayak Damodar savarkar as his hero because it was he, who, for the first time formulated the concept of Hindu nation in his 1923 classical work “Hindutva / Who is a Hindu?” Even today, his book serves as the charter of Hinduism for the nationalist Hindus. Apart from serving as the president of Hindu Mahasabha for several years, he was a suspect in the murder of a British official and was identified as the consignor of those revolvers sent from Europe to india, one of which was used in the murder of a Bombay magistrate. No wonder he spent twenty-seven years in jail, in all.

He was ever suspicious of millions of indian Muslims whom he labelled as ‘fifth columnists’ because he thought that their allegiance was not to india but to Mecca ‘their religious capital’ and istanbul ‘their political capital’the city being the capital of the last Muslim caliph. What would have been the fate of the indian Muslims, had his Hindu Mahasabha come into power is any body’s guess? Meanwhile, the present Hindu nationalists clearly revealed their intentions, when one of their leaders while addressing an election meeting a few days ago warned the indian Muslims to pack up for Pakistan. it looks as if Modi’s Hindu nationalists intend to do with the Muslims of india, who have been residing there for over 13 centuries, what the Christian rulers of spain did with their Muslim subjects, who had been living there for about eight centuries. the blunt decree of the Christian monarch read: “Muslims must become Christians

or leave spain.” Will Durant in his multi-volume masterpiece ‘the story of civilisation’ (Volume: reformation) has captured that historic moment: “the Moors protested that when their forefathers had ruled spain they had given religious liberty, with rare exceptions, to the Christians under their sway but the sovereigns were not moved. During the sixteenth century 3000,000 superficially converted Muslims left spain. in February 1502 the royal Edict asked Muslims of Castile and Leon to choose between Christianity and exile.” the policy of zero-tolerance adopted by the Christian rulers of spain towards their Muslim subjects was also adopted as an article of faith by the Hindu nationalist leaders towards the indian Muslims in the first half of the twentieth century. one such leader was Dr Balkrishna Moonje, who remained opposed to any agreement with the Muslim community and felt no inhibition in publicly preaching that “as England is the land of the English, Germany that of Germans, similarly, Hindustan is the land of the Hindus.” such statements were in clear contravention of the modern concept of nationality in which the right of citizenship is guaranteed by birth and not determined by any religious denomination or the religious identity of the majority. When the leaders encourage such prejudiced exclusivism, one can’t blame their followers much.

Although the Hindu majority had not acquired political power before partition in 1947, space for survival had begun to shrink for non-Hindus even in cosmopolitan cities like Delhi and Bombay. this can be corroborated by a 1946 book published from Bombay entitled, ‘Caste and outcaste’ by a Hindu named J E sanjana. the

writer admits that “in New Delhi, as in many other places, no Hindu will let his house on rent to a Muslim…. in Bombay, generally supposed to be a cosmopolitan city, there are many numbers of houses and even whole localities where non-Hindu, especially Muslims cannot find a single room to live in.”

Even the indian Christians were not spared of such social boycott by the Hindus. sanjana has narrated the woes of an indian Christian in search of a room in Bombay, who was repeatedly turned away by the Hindu landlords just because he was not a Hindu. While narrating the fate of another indian Christian in search of accommodation in Bombay, the writer adds that there were many flats and rooms for hiring but the reply of the Hindu landlords was always the same: “No, not for Christians and Muhammadans.”

Fast forward to the present day: the indian celebrity shabana Azmi made news headlines when she revealed that she couldn’t buy a house in Mumbai because she was a Muslim. she is on the record to have said, “i wanted to buy a flat in Bombay and it wasn’t given to me because i was a Muslim and i read the same about saif (Ali Khan). Now, i mean, if Javed Akhtar and shabana Azmi cannot get a flat in Bombay because they are Muslims, then what are we talking about?” if this could be the fate of an indian Muslim celebrity during the rule of the secular Congress, one can imagine the degree of ghettoisation that awaits the indian Muslims under the Hindu zealots led by Modi and Co. Another hero of the Hindu nationalists, Lala Lajpat rai suffered from the phobia of Muslim domination thinking that the indian Muslims would join hands with the Muslims of Arabia

The enthronement of Modi and Co at the helm of affairs is a sign of retrogression in the sense that these ‘new nationalists’ will try to shape the future of India on the basis of Hinduism as it was defined and interpreted by its leading lights during the first half of the last century.

and Central Asia to dominate the Hindus. Being a Punjabi Hindu, he was worried about the Muslim majority in Punjab and worked unsuccessfully for the division of this province. Lala ji probably believed in that Hindu nationalist narrative that looked upon the Muslim invasions from time to time as a systematic pan-islamic conspiracy to subjugate Hindus. the problem with this narrative is that it is too simplistic because the past Muslim rulers were as divided on racial, linguistic, cultural and sectarian lines as the present ones are. yet another leader idolised by the Hindu nationalists was Pandat Madan Mohan Malaviya, who, as a rule, did not accept food from people other than his own ‘jati’ (race). Moreover, he remained at the centre of the major Hindu-Muslim tensions such as the anti-cow slaughter movement and the Urdu-Hindi controversy. in addition, he vigorously struggled for the reconversion of the Muslims to Hinduism because he felt that most of the indian Muslims had been originally Hindus and were forcibly converted to islam during the Muslim rule in the subcontinent. there is nothing wrong with any set of leaders working for the uplift of their community. the aforementioned Hindu nationalist leaders struggled for the betterment of their community. there would have been nothing wrong had they devoted their efforts for the rejuvenation of the Hindus but the problem arose because their words and deeds encouraged hatred and high-handedness towards the non-Hindu communities, particularly the Muslims. Modi and Co adore these leaders and wish to shape the future of india on their lines. such an approach caused chaos in the past and if this line of action is pursued by the present Hindu nationalist leadership, the level of violence will be humongous because in the past the tools of violence were just lathis, knives and revolvers; today, there are missiles and nukes. sanity did not prevail then; would it prevail, now? g www.pakistantoday.com.pk 05

C M YK

Sunday, 18 - 24 May, 2014

economy

Upcoming budget proposals That time of the year when exercising economic prudence can bring untold benefits to many omer Zaheer meer The author is a leading economist, a qualified chartered accountant and anti-money laundering expert with international exposure who is helping reshape businesses at Millennium Law Company. He can be reached on Twitter @OmerZaheerMeer or omerzaheermeer@hotmail.co.uk.

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very year when summer arrives in Pakistan so does a lot of speculation and expectations about the economy, for June is the month of the national budget. The hope and despair stemming out from each budget normally gauges the public reception of the same.

This year we are again at pathways to either playing to foreign tunes or laying foundations for self-reliance by opting for a public-oriented budget. recently, there have been positive developments in terms of the exchange rate stabilisation of the Pak rupee and increase in foreign exchange reserves.

It is easy to get carried away by these developments considering the horrible mess endured by the nation for last six years. However, these developments are not the result of meticulous economic rise or increase in national productivity, but rather cosmetic steps like raising eurobonds at exorbitantly high interest rates of upto 8.25 per cent vs 3.7 per cent yield on $ 1.7 billion bonds issued by romania or one-offs like the $ 1.5 billion receipt from the KSA. The $1 billion plus generated from 3G/4G auction is however a pertinent step in the right direction.

Concrete and visionary steps are required to address the structural and trust deficit issues engulfing the economy as well as the plague of terrorism destroying it. The upcoming budget should as a minimum strive to achieve:  reduction in inflation  Job creation

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education and health eradication of corruption Tax reforms Better use of national resources Reduction in inflation: Annual inflation in Pakistan reached 8.5 per cent last month (March 2014), up from 7.9 per cent in February 2014 and a 29 per cent rise from the level of 6.6 per cent in March last year. More alarming still is the fact that the prices of necessities like food, housing, water, electricity and gas all rose.

The one per cent increase in GST (General Sales Tax), a type of indirect taxation from 16 per cent to 17 per cent and downwards adjustments in subsidies as per the IMF requirements for the $6.5 loan facility, drove inflation up.

The problem with this is that not only the purchasing power of population is reduced but with the current economic climate the lives of ordinary people become much less manageable. It is therefore necessary that appropriate steps are taken in the upcoming budget to curtail and reduce inflationary pressures. Some of these steps including tax reforms will be proposed going forward.

Job creation: Unemployment in Pakistan fell down slightly from 6.30 per cent to six per cent in the second quarter of 2013-14 as per official data and estimates. One important aspect is that the unemployed even though educated were mostly unskilled in any trade. This points out to an inadequate education system. By introducing skilled courses alongside traditional education, we can address the issue of unemployment due to lack of trade skills.

Another aspect of the high unemployment is that of the estimated two million youth the entering job market every year, only 1.2 million succeeds in getting jobs. This leaves a huge 40 per cent of the new aspiring workforce unemployed which contributes to brain drain and other social problems.

This issue can be addressed by better use of national resources, encouraging cottage and valueaddition industries as well as an entrepreneurial culture. With the expected Chinese and Saudi infrastructure, agricultural and military investments in Pak, the government should focus on ensuring maximum local labour    

‘The one per cent increase in GST (General Sales Tax), a type of indirect taxation from 16 per cent to 17 per cent and downwards adjustments in subsidies as per the IMF requirements for the $6.5 loan facility, drove inflation up’ participation to turn these into employment opportunities.

ADB (Asian Development Bank) has estimated a growth of 3.4 per cent, slightly higher than the 3.1 per cent estimate of IMF for Pakistan’s economy for the Fy14. With above mentioned factors, the grant of the GSP plus status and the steps described ahead, a 6-7 per cent growth rate should be targeted to generate adequate opportunities for employment.

Education and health: While the government of Pakistan likes to claim a higher literacy rate of 57 per cent, according to UNeSCO it stands placed at 180 amongst 221 countries. Most alarming is the fact that the most illiterate segment of the society is the youth where illiteracy reaches around 70 per cent.

The healthcare sector also faces issues of its own with health and sanitation infrastructure in dire situation particularly in rural areas.

Although healthcare became a provincial subject following the 18th amendment, the federal government still undertakes several national health programs.

Allocation to education in the last budget was less than two per cent of GDP while a mere rs35.6 billion were allocated for federal healthcare programs. What is more unfortunate is that of the meager allocation to education, as much as 30-50 per cent has been left unused over the years.

In this regard the government should allocate at least 4-5 per cent of GDP to education and ensure that it is fully utilised. The spending on healthcare should also be increased to meet with the rising demands.

Eradication of corruption:

Transparency International had ranked Pakistan 127 out of 175 in 2013 in terms of corrupt countries.

This was an improvement of 12 steps from a previous ranking of 139. Although this is a good sign but considering the era of unprecedented corruption between 2008 to 2013, it is still not adequate.

As per various studies, daily corruption in Pakistan results in a loss of billions of rupees to the national exchequer. This is in addition to the billions of dollars of black money stashed overseas. It is not surprising that Pakistan even beat India (a country several times its size) regarding such deposits in Switzerland alone.

Unfortunately, the National Accountability Bureau has not been allowed to function freely to eradicate the menace of corruption.

Past precedents of political scoresettling and abuse of power are cited as reasons by some quarters.

It is important that proper checks and balances are introduced to address such fears and a drive ensured to penalise corruption, increasing the costs of indulging in it to such levels to make it a less attractive proposition. Perhaps a good place to start will be utilising Swiss laws to bring back black money stashed in Swiss banks back to the people of Pakistan.

Tax reforms Pakistan desperately requires effective tax reforms. A reduction in tax burden on ordinary people and reducing the average tax per person by increasing the tax net would lead to better filled coffers of the treasury. In this regard we propose:  reduction in tax rates to reduce burden on individuals  Increase in tax base by bringing millions of small and medium businesses into tax net which will increase the tax revenue manifold despite lower rates  More weightage to direct taxation instead of indirect taxation, which is not only regressive but results in higher inflation  Adoption of a more progressive tax regime, taxing the wealthiest segments more while providing for the down-trodden  Introduction of tax incentives for value-added production and services to incentivise businesses towards them Besides making the above

‘Pakistan desperately requires effective tax reforms. A reduction in tax burden on ordinary people and reducing the average tax per person by increasing the tax net would lead to better filled coffers of the treasury’ structural and policy adjustments, the issue of lack of trust amongst the taxpayer and government needs to be addressed by government officials, setting an example and provision of due services ranging from security to sanitation to the population. Tax avoidance by top government ministers and functionaries by means of gifting millions to relatives may be legal but does little to induce confidence in an already shaken belief of the ordinary taxpayer.

Better use of national resources: Better use of national resources can help generate extra revenue while creating industrial as well as service oriented jobs. At present Pakistan mostly exports basic raw materials or low value-added products like yarn, which are made into finished products by other countries earning profits which Pakistan itself can by completing the process itself.

In addition, the unattended reserves of natural resources ranging from coal in Thar, diamonds and precious metals in Balochistan and northern areas to wind-pressure-points and water in KPK (for cheap and green energy production) should be utilised.

The limited space prohibits further detailed deliberations but appropriate allocations to address poor law and order situation and lack of energy are essential. Besides reducing debt reliance which consumes 30-40 per cent of budget in debt servicing is also extremely important. g This was the keynote address by the writer at Hamdard Thinkers’ Forum on the topic of “Upcoming National Budget and Expectations of the Nation”.

C M YK

Sunday, 18 - 24 May, 2014

opinion

In defence of philosophy Here’s why neil degrasse Tyson is wrong Being Humean

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eil deGrasse Tyson needs no introduction as a science communicator or an astrophysicist. He does a very fine job in communicating science to public, and is possibly the most popular science communicator since Carl Sagan. However, he made a few disappointing comments in a recent podcast regarding philosophy: NdT: My concern there [philosophy] is that the philosopher believes they are actually asking deep questions about nature and to the scientist it’s: ‘What are you doing? Why are you concerning yourself with the meaning of meaning?’

Q: Well, i think a healthy balance of both is good.

NdT: Well, i am still even worried about ‘a healthy balance’ [laughs] if you are so distracted by your questions that you cannot move forward, you are not being a productive contributor to our understanding of our natural world. The scientist knows when the question of ‘What is the sound of one hand clapping?’ is a pointless delay in your progress.

Then they (philosophers) say, ‘Well, how do you define clapping?’ And then it (the conversation) devolves into a discussion of the definition of words, and i’d rather keep the conversation about ideas.

When you do that and you don’t derail yourself on questions that you think are important because philosophy class tells you this but the scientist says ‘look i got all this world of Unknown out there. i’m moving on and i’m leaving you behind and you can’t even cross the street because you are so distracted by what you are sure are deep questions you’ve asked yourself. i don’t have the time for that.

First of all, in fairness to Neil, the host kind of nudged him in that direction with a more caricaturesque characterisation of philosophy. Even if the host was taking a jab at philosophy that’s being taught in academia, that’s a ridiculously unfair characterisation, although in fairness, he did say that partly in jest. For example, one could always take a thought experiment out of context, which makes understanding a concept easier, and make it sound silly.

But what followed was Tyson’s terrible philosophy bashing. ‘Why are philosophers concerned with meaning?’ Well, why is it wrong to be concerned with meaning? Perhaps you believe that life has no meaning.

Perhaps you believe that there is some sort of meaning, but it’s self-constructed. These are all not silly questions to dabble in. That doesn’t mean you’re left with doing nothing. Does there have to be such a dichotomy? Reading

Camus, Kierkegaard, Nietzsche et al makes one question their own beliefs about existence, purpose etc. This is not somehow mutually exclusive with fully appreciating the significance of science.

Things get worse when the host suggests that a healthy balance of both is necessary. But Tyson still seems to be worried about even that.

Then this was followed by the comment by Tyson where he seems to think debating over the meaning of words is somehow “philosophy”. Actually no, Neil, debating the meaning of words, first of all, is semantics (and i’m not undermining the importance of semantics here), and besides i do think it is always good to be clear about the definition of words before starting any discussions. To quote Voltaire, “Define your terms, you will permit me again to say, or we shall never understand one another.” i am no professional philosopher, but rather a philosophy enthusiast who likes philosophical discussions and let me (anecdotally) assure you, nothing irks me and almost all people involved in the discussion than such trivial stuff as “what is

And as for the whole ‘I have questions to ask’, fair play to you, Neil. But that doesn’t mean philosophical questions are worthless.

Rest assured, philosophers – right from the times of Aristotle, Hume, Kant, et al – are mostly functional human beings themselves, let alone being able to cross the road. clapping” or its equivalents. even when it comes to academia, as critical as you might be about this; it’s a huge disservice still to characterise what philosophers do like that, professional or otherwise.

And as for the whole ‘I have questions to ask’, fair play to you, Neil. But that doesn’t mean philosophical questions are worthless. Rest assured, philosophers – right from the times of Aristotle, Hume, Kant, et al – are mostly functional human beings themselves, let alone being able to cross the road.

So why do we do philosophy? let’s just stick to some of the practical purposes, since Neil seems to be merely interested about that. Science itself relies on philosophical concepts like methodological naturalism, empiricism, falsification (in the context of demarcation between science and pseudoscience), and so on. And demarcation problem in philosophy of science – as in what separates science from nonscience – is still a philosophical problem.

Or take ethics. No doubt Neil himself would undermine the importance of ethics. ethics is still an important branch of philosophy, as much as it could be informed by science. Science could give you both nuclear bomb and nuclear energy; it’s through ethics we argue for nuclear energy and not nuclear bomb. it’s ethics that informs us – to quote Hume, although “it would not be irrational to prefer the death of a thousand Orientals to the pricking of the little finger”, – that it’s still an ethically wrong thing to do. Or why it’s not okay to destroy the planet for our selfinterest. Skepticism, Rationalism, etc are all epistemological theories themselves.

Tangentially, another

What is baffling about all this is how respectable people like Tyson or Hawking feel the need to manufacture this dichotomy, implying there is some conflict between science and philosophy where there is none. The only thing you possibly achieve by philosophy bashing is that you end up doing bad philosophy. criticism people often raise is that “progress” in science and making a categorical error by comparing it to “progress” in philosophy.

Just like say progress in the field of mathematics isn’t comparable to natural sciences either. ever since modern science and philosophy got classified to separate branches of inquiry, both function well as independent branches. The important thing to keep in mind here is that the point of philosophical inquiry is not to ape scientific inquiry. i am well aware that this post doesn’t address many of the already mentioned concepts in detail – and needs more nuanced discussion in depth. So what’s the point, then? Because there is a really sad trend of undermining the significance of philosophy among scientists and people in general, which is utterly misguided to say the least. From Hawking to now Tyson.

What we need is a more nuanced approach – sure, we ought to condemn the sort of pseudo philosophy – philosophy that is anti-science or antiintellectual. Philosophy has to be informed by science. And most philosophers worth their salt would agree with this. However criticism of certain elements within certain branches of philosophy is entirely different from categorically bashing or undermining the importance of philosophy itself.

Tyson is an intellectual who has great influence in public sphere. He is someone who knows the frustration of how it feels like when science is misrepresented and distorted. Similarly, philosophers and philosophy enthusiasts don’t feel elated when a strawman of philosophy is erected and knocked down like this. There are all sorts of misconception about philosophy as it is. it’s also a disservice to all the great philosophers who have significantly contributed to both our intellectual and social progress.

What is baffling about all this is how respectable people like Tyson or Hawking feel the need to manufacture this dichotomy, implying there is some conflict between science and philosophy where there is none. The only thing you possibly achieve by philosophy bashing is that you end up doing bad philosophy. g www.pakistantoday.com.pk 07

C M YK

cOver stOry: First yeAr rePOrt cArd

On way to a fight with institutions once again

Nawaz Sharif ’s go-it-alone style could jeopardise his government, again!

Aziz-ud-din AhmAd The writer is a political analyst and a former academic.

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hat threatens democracy most is Nawaz Sharif’s unchanging style of governance. the decision making process under the present government is reminiscent of the 1990s when Sharif’s small kitchen cabinet made all policies. the cabinet was treated as a decorative fixture and National assembly as no more than a rubber stamp. the 14th amendment was enacted especially to debar PMLN’s own legislators from questioning any decision taken by this coterie of hand-picked individuals that also included close relatives. the 18th amendment enacted in 2010 has rectified the parliamentary system by making the elected government de jure policy maker. however, the real transfer of power from the army to the civilian set up has yet to take place. time has come to make the civilian government the de facto policy maker also. the elected government is expected to be in the driving seat when it comes to managing foreign relations, making strategic assessments, debating budgetary allocations, and devising policies to cope with extremism and terrorism.

Nawaz Sharif cannot make the crucial changes through an executive order alone.

Despite the various failures and shortcomings of the PPP led coalition that ruled from 2008 to 2013, it goes to its credit that while enacting the crucial constitutional amendments it managed to take the entire opposition along. this underscores the fact that only a consensual democratic polity can build bridges among adversaries and create favourable conditions for the resolution of conflicts. as Nawaz tries to reclaim the political turf occupied by unelected bodies for decades he needs to take all stakeholders on board and bring about changes through persuasion than diktat.

But does Sharif have the ability to take

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others along? the prime minister remains inaccessible even to most of the cabinet members. Sometime federal ministers have to report to and take instructions from Shahbaz Sharif who has practically tuned into a deputy prime minister. the prime minister does not give any importance to parliament. Nawaz Sharif who waited 14 years to enter in the parliament has come to the national assembly only eight times in about a year. he has continued to neglect the sittings despite the opposition tabling a symbolic motion calling upon him to vacate the prime minister’s seat for his prolonged neglect of the house. During this period he has not attended a single sitting of the senate. this led the upper house to adopt a resolution requiring the Prime Minister to attend the session at least once a week. Sharif disdainfully ignored the suggestion.

Policies carry weight when these are devised after thorough debate and persuasion and enjoy wide support. those seen to be lacking consensus can be flouted by powerful institutions. What happened to PPP’s decision to bring ISI under the interior ministry? the PMLN chief however isn’t convinced of the need to take the opposition on board or persuade the parliament.

Sharif’s attitude to the opposition is characterised by arrogance buttressed by the big mandate that turned out to be PMLN’s bane in 1999. Would the past repeat itself this time too? the PMLN chief’s attitude is infectious. his kitchen cabinet is no less hubris ridden. the interior minister has attended only one session of the senate only to show bad temper and refuse to apologise over providing faulty information. he now considers it infra dig to go to senate and sends minister of state to represent him in the upper house. Ishaque Dar, another member of the kitchen cabinet, becomes edgy when media puts question to him and is keen to avoid journalists.

Despite Sharif’s ‘couldn’t-care-less’ attitude, a major section of the opposition has offered to continue to support the

‘Policies carry weight when these are devised after thorough debate and persuasion and enjoy wide support. Those seen to be lacking consensus can be flouted by powerful institutions.’

government against any attempt at destabilisation by offstage players. Policies meanwhile continue to be made without consultation with the opposition despite repeated demands for being taken on board.

Under the circumstances the support from opposition cannot last long. the party leadership has never tired of claiming that it practices good governance. a little before 2003 elections the PMLN’s official website claimed that under previous governments there was an extensive “crisis of governance” in the country and that governance was “almost in a state of collapse”. the website talked about “inappropriate and whimsical appointments, postings and promotions” and “unfulfilled promises.” With PMLN nearly a year in power, what one sees is much more of the same. there is no transparency about anything, least of all in appointments of the heads of giant government controlled corporations and autonomous and statutory bodies some of which are required to undertake

‘Sharif’s attitude to the opposition is characterised by arrogance buttressed by the big mandate that turned out to be PMLN’s bane in 1999. Would the past repeat itself this time too?’ transactions involving expenditures of billions of rupees every year. During the caretaker setup the Supreme Court had directed the government, on a petition by PMLN leader Khwaja Safdar, to constitute a commission for their appointments of the heads of these organisations to ensure transparency. a notification was subsequently issued by the government in pursuance of the apex court’s decision. In January this year the government issued an executive order excluding over two dozen powerful bodies from the notification. the order was set aside

by Islamabad high Court. In fact the Supreme Court has intervened on several occasions during the past eleven months to set aside appointments made against rules. there is a tendency in the PMLN government to get rid of dissenting officials in autonomous bodies and government departments. Prominent examples include the removal of the three chairmen of Pemra, Nadra and PCB and sending accountant

General of Pakistan Revenue (aGPR) on forced leave. the dismissals were challenged in the court leading to the reinstatement of Chairmen Pemra and Nadra and the striking down of the orders in the case of the aGPR. tensions with the apex court are therefore on the rise. there is little financial transparency under the PMLN government. Soon after the presentation of the budget an illegal financial transaction by the government came to the notice of the Supreme Court. the finance ministry had transferred Rs62 billion belonging to the Universal Services Fund (USF) to the Federal Consolidated Fund (FCF) in violation of law causing a loss of Rs7 billion a year to national exchequer. the Supreme Court described the act as “criminal misappropriation” and “a loot”. avoiding holding local government elections is yet another example of bad governance. It is highly symptomatic that major political parties, led by the PMLN, are not inclined to hold the local government elections during the second democratic term also. Concentration of powers amounts to alienating the masses instead of empowering them. the government continues to confront the Supreme Court on the issue of LG elections also. the government is supposed to arbitrate to stop differences between institutions developing into clashes. this is what Sharif should have done in the dispute between Geo and army. a timely intervention would have led to the stoppage of the Geo showing the picture of the ISI chief. What several party leaders did meanwhile created the perception of being partisan instead and added to the tensions with the army. at a time when statesmanship is required to strengthen the democratic system, what the government is doing is to enter into unnecessary clashes with institutions out of sheer brashness. g

C M YK

Sunday, 18 - 24 May, 2014

Nawaz’s way of doing business the Pm’s personal touch leaves a little something to be desired shAhAb JAFry The writer is Associate Editor, Pakistan Today. He can be reached at jafry.shahab@gmail.com

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IRSt year of a new government is always an important benchmark. and since the N League has been here before, a good couple of times, its ought to be all the more instructive. there were some novelties about this win, though. It was the first time one civilian government succeeded another. the Musharraf clique liked to think otherwise, marking the Q league’s handing over power to the PPP as the first completely democratic transition, but the rest of the polity, and indeed much of the country, seems to think otherwise. then this was also the first time his boys faced a tough fight at home in Punjab. PtI’s Naya Pakistan clicked well with the people, especially the youth, and it seemed giving N a real run for his money. and the military had been on the back foot for some time now, like seldom before.

Musharraf’s long years, a deepening insurgency, and increasing civilian ingress into security related decision making by the PPP government, especially after the abbottabad incident, made Kayani keep his distance from politics. the way the courts had started hounding Musharraf, not letting him contest (with a lot more to follow), was an important indicator of the limits the army had set for itself, and N understood this well.

But the win has not been without its share of controversies either. One year into the new government, he’s not been able to shake off accusations of rigging completely. Some of his actions on some of the state’s most important matters, too, have alienated much of the public, making long time analysts question his political maturity.

“I don’t think there is much change in his style of governance”, said Dr Mehdi hasan, prominent writer and analyst. “Just like before, instead of taking decisions on merit, he seems to want things to automatically come to his expectations, which wastes time and achieves little”. the talks with the taliban are a good example. there was much public uproar when he took aPC unanimity as license to let his core right wing constituency take the lead on the insurgency, allowing the religious lobby far more prominence, and legitimacy, than it enjoyed before. and just like Dr hasan said, it complicated the talks, and also upset the military. he also seemingly went out of his way to rub the military the wrong way. In the matter of the talks, the army was furious when the government freed select taliban captives without even consulting with the brass. Gen Raheel is reportedly just as unhappy over the Musharraf affair. the army believes its dignified

silence till the indictment should have been repaid by agreeing to the ECL demand, and allowing Musharraf safe exit. N not only refused, but let his most belligerent ministers publically rubbish Musharraf, which widened the cleavage with the forces. his style of governance is still reckless, and centres on confrontation and isolation, rather than consensus. “there is not much that is dynamic about his leadership”, added Dr hasan. “this is just a replay of the ’97 scenario, when he ruled because of his majority in Punjab, and upset most other players”.

Foreign front N’s foreign policy has not found many admirers either – soft on India even as the far right of the Modi variety establishes itself in complete strength in New Delhi, and confused about afghanistan as abdullah abdullah seems likely to bring the old Northern alliance’s dislike for Pakistan to power in Kabul, even if publically he hopes for common ground. and his attempt to punch above his weight in the arab world became the subject of much ridicule, especially in the arab press. It’s been clear for some time now that with the Saudis and americans somewhat estranged, Riyadh has turned to Islamabad for its security. that much is fine, but talk of selling weapons that could be funneled to Syria, and calling for regime change in Damascus, invited serious backlash from home and away, especially Iran. then Sartaj aziz attempted to save face, and implied Pakistan would help Saudi and Iran overcome their differences, still not realising that the proxy war between the two has taken close to

half a million lives in the last half decade, and Pakistan, openly taking an anti-Iran position, was way out of its league in thinking of itself as a peace broker. then there was the damagecontrol trip to tehran; promising reviving the IP pipeline, cooperation on border security, etc – all issues he had been cold about till very recently. analysts like Dr hasan believe balancing Iran and Saudi will be a tricky proposition, not the least because of his personal closeness to Riyadh. But ignoring Iran will be dangerous, especially because of the long border and possible blowback in

‘His style of governance is still reckless, and centres on confrontation and isolation, rather than consensus.’

Balochistan, which is what will happen if any Pakistani weapons are found among Saudi sponsored al Qaeda hordes fighting Bashar assad’s secular regime in Damascus.

N has also missed other prominent features in international politics. Iran, along with China and Russia, is part of a new emerging power bloc that has displayed the ability to rein in the imperialistic belligerence of US and its NatO allies. a closer alliance with these countries, two of which share long borders with us, would have enhanced Pakistan’s position, especially considering its crucial geopolitical location. But such winds of change completely passed the ruling party by as it concentrated more on inter

institutional fighting.

“But these failures are not new”, said Dr hasan. “We have never been too smart about choosing our friends. Considering our geography, there is no question that Iran and China should be very strong allies. But Islamabad has never given these issues much though, or we would have chosen superpower friends more carefully”.

And the economy?

One of Nawaz’s promises on the campaign trail was strengthening the economy. Years of dictatorship followed by years of mismanagement, he said, had sent the economy on a sharp downward spiral. his team would turn it around, revive growth, rejuvenate the private sector, restructure PSEs, etc.

But few except the finance minister believe the economy has done much to write home about over the last year. Inflation his high, especially food inflation, energy shortage has no end in sight, and foreign investment is about as far away as during the PPP days.

In such times, the private sector must become the preferable engine of growth. But that would require smart policies that stimulate such growth, raise employment, and enable the economic multiplier. “the private sector is very unhappy”, said Dr Salman Shah, former finance minister and one of the key architects of the high growth of the Musharraf years. “the textile sector is particularly stressed. Bank financing is marginal, and they are having to pay back more than they are getting”. therefore, Dr Shah argues, there is no clear strategy to take advantage of the GSP plus provision, which had already been

compromised because it coincided with the artificial gains engineered in the rupee. and since the other avenue of raising internal revenue, tax revenue, is also minimal, there is an urgent need to implement expenditure reforms.

“In the present picture, the government is just filling too many holes with debt, which is not a sustainable position”, added Dr Shah. “there is an urgent need to contain the energy problem and stimulate private competitiveness,

‘N has also missed other prominent features in international politics. Iran, along with China and Russia, is part of a new emerging power bloc that has displayed the ability to rein in the imperialistic belligerence of US and its NATO allies. otherwise liabilities will increase and growth will not exceed three to four per cent. For six per cent plus growth, we need investment, both local and foreign, for which a host of reforms need to be implemented”.

One year is rightly considered too little to gauge a new government’s direction, especially in the economic realm (because of time lags between implementation of policies and results), but it does give a fair idea about the way it postures itself for the long haul. and Nawaz’s priorities, both in politics and economics, have already become cause for worry. g www.pakistantoday.com.pk

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C M YK

IntervIew: Dr HafIz pasHa

The quintessential teacher Man of facts, and stats, explains the economy and its problems

by Shahab Jafry

I

arrive at Dr Hafiz Pasha’s house just a couple of minutes after the agreed time for the interview, but he kindly offers a very warm welcome before I can blame Lahore’s rush hour traffic – it always works with the editor!

Starting the conversation, I note that Dr sahib keeps himself pretty busy for what he calls a retired life, teaching and guiding research by postgraduate students at the Lahore School of Economics (LSE) and Beaconhouse National University (BNU). And it quickly becomes clear that of all the positions he has held, some pretty high profile – in academia, government and at the UN – teaching is the closest to his heart. “It keeps you alive and alert”, he says.

Interestingly, the experience of teaching has taught him a few things as well, particularly about the “pure talent” our students possess. He has taught at Stanford, among other places, so he knows what he’s talking about.

“In terms of talent, our students compare favourably any day”, he says, but also regrets lack of proper nurturing and necessary opportunities that separate this abundant talent from achievement.

But the main reason for the interview was getting his views on the economy, especially the new government’s performance in its first year. He starts by explaining the economy’s resilience.

These are, after all, times when the “security shock” has resulted in lost investments and additional costs to the tune of $12-15 billion.

The energy crisis, in his estimation, eats away another $1214 billion a year in foregone output, etc. Add to that the occasional natural disaster, like the ’10 floods that cost the exchequer around $10 billion, and you have average losses of around 10-12 per cent of GDP. “Most countries would simply not grow in such circumstances, instead record negative growth”, he notes.

10 www.pakistantoday.com.pk

But our system has strengths that provide buoyancy and keep our growth rate positive, albeit low.

“Three factors are important”, he says. “The first is the overseas workforce that contributes $15-16b annually. Without this injection the trade deficit would be uncontrollable. The second is the farmer, the hari, providing food self sufficiency and security. And the third is the informal sector of the self-employed in the trade, transport, construction sectors, etc, that keep the economy functioning”.

Yet, sadly, the efforts of these sectors are “pre-empted by a rent

“It is a myth that the circular debt was retired in its entirety”, he answers.

“According to USAID, it was in excess of Rs800 billion, as opposed to the Rs500 billion figure that was mentioned. There is still a huge backlog, and inefficient management of the system has added to the problem”

seeking elite” who have little stake in Pakistan, and that robs the system of the capacity to improve delivery of basic services and vigorously tackle poverty.

Vulnerabilities I ask if the present government’s first year has been eventful. He smiles, and explains like a teacher.

“To give credit where it is due, the finance minister has worked very hard over the course of the last year. So much so that his health has suffered,” he says. “But the government’s sense of priorities shows some lack of clarity, and sometimes they end up doing the opposite of what the set out to do”.

The energy and circular debt problem is a good example. Of course it was the government’s number-1 priority, and retiring the debt was essential to provide necessary liquidity. But the manner of tackling this problem, according to Dr Pasha, misses the main point.

Instead of ensuring smooth running of the system in the immediate term – improving management and addressing “nuts and bolts issues” – the government focused on mega new projects involving huge cash flows and requiring a number of years to come online.

That is unfortunate since production capacity is not the energy sector’s basic issue, but preventing systemic haemorrhaging and payment defaults is, which is where both government departments and influential individuals are holding the whole country hostage, and need to be dealt with.

The existing system also has problems of proper prioritisation, like gas being diverted to fertiliser and CNG rather than the power sector.

“Our research shows that existing power plants can increase overall energy supply by20 per cent. But rather than streamline existing processes, the ruling party’s group of ministers have been chasing mega projects, not addressing immediate needs”, he adds.

But wasn’t it smart to service the circular debt, and why has it ballooned so much so fast?

“It is a myth that the circular debt was retired in its entirety”, he answers. “According to USAID, it was in excess of Rs800 billion, as opposed to the Rs500 billion figure that was mentioned. There is still a huge backlog, and inefficient management of the system has added to the problem”.

So, isn’t the energetic, and belligerent, Abid Sher Ali doing a swell job of ensuring payments are made, losses are removed, and the debt is curtailed?

Well, not quite. “Punjab needs to be particularly careful”, he warns. “37 per cent of Punjab’s electricity is secured from the rest of the country; it is not selfsufficient. Of the remaining 63 per cent, one-fifth is based on gas from other provinces. Also, in disco losses, the largest share comes from Punjab (31.7 per cent)”.

Therefore, Abid Sher Ali must be careful not to antagonise other provinces. There is otherwise the danger that power sharing will become as serious an issue as water sharing and revenue sharing. This is very important, especially since the threat is reduced gas supply to Punjab, which could lead to some deindustrialisation of Punjab”.

‘Abid Sher Ali must be careful not to antagonise other provinces. There is otherwise the danger that power sharing will become as serious an issue as water sharing and revenue sharing’ Cart before the horse?

The government’s handling of the foreign exchange reserves, rather its efforts to bolster them, have been no less important. Their initial strategy cannot be faulted.

Reserves were low, markets illiquid, and the Balance of Payments (BoP) situation simply haemorrhaging, so the IMF deal made sense. But the problem now is that the finance ministry and SBP are relying too much on external borrowing and concentrating too little on structural reforms to improve the economy fundamentally.

Failure to build internal capacity, he says, and continuing to rely on external flows, amounts to taking the easy way out of a very complicated situation, and will

raise the debt burden substantially.

The government’s initial tax strategy, presented in its first budget, was impressive. It entailed some bold and difficult decisions for which Dar sahib should be credited. There were provisions for broadening the tax net and impressive anti-evasion mechanisms, at least on paper. But, again, four months into the fiscal year and there was backtracking on practically every front.

“It seems the powerful businessman/trader lobby got its way eventually. They are the government’s prime lobby, and washed away all crucial reforms before they could be implemented”.

Dr Pasha complains about counter signals being sent, about tax incentive schemes that run counter to efforts aimed at greater documentation and less evasion, and how “the whole model changed”.

The Fund (IMF), too, suddenly began showing extraordinary and unprecedented generosity towards Pakistan, agreeing to revise the FBR revenue target down on a couple of occasions.

“The reforms aimed to increase tax revenue by one per cent of GDP – from 9.6 to 10.6 per cent. But now there is only a 0.2 per cent increase likely, washing away 80 per cent of the effort”, he says.

But the government’s strangest stance has come on the BoP issue, which is perhaps the most important, “since we can print rupees but we cannot print dollars”. And Ishaq Dar’s obsession with strengthening the rupee has ended up putting the cart before the horse from the macro economy’s point of view.

“The Saudi gift may have provided unprecedented uptick to the rupee, but I believe it was too much too soon, and led to a state of some disorder”, he explains.

“One of the most influential lobbies, the APTMA, is sending out an SOS daily in the newspapers”.

Continued on page 12...

C M YK

Sunday, 18 - 24 May, 2014

www.pakistantoday.com.pk 11

C M YK

Sunday, 18 - 24 May, 2014

opinion

Model towns of democracy

Rahul has only himself to blame out of turn MJ AkbAr

The writer is a leading Indian journalist and author. He is the Editor-in-Chief of The Sunday Guardian. He has also served as Editorial Director of India Today.

I

s there a high quality dramatist hidden in the calendar department of the Election Commission? This general election has been a nine-act drama.

Inevitably, one or two passages were devoid of the intensity with which play began.

But not even shakespeare could have devised a denouement as spiriting as the one that marks the end of play. On the second last day of polling there was Amethi. And the last votes will be punched in at Varanasi.

Even the disinterested spectator cannot have missed the harried visage of star Congress campaigner Rahul Gandhi in Amethi. There was reason enough. In 2009 Rahul Gandhi did not visit his constituency on polling day and won by more votes than could be easily counted. This year desperately-seeking-Rahul is battling for his political life and every vote counts. He brushed aside the code of conduct in his anxiety, stepped into electronic voting machine enclosures during polling, and exhorted voters, as reported by the Times of India, with a plaintive appeal: “Dekh lena, bhaiya [Look out for me, brother].”

The Indian Express noted that such canvassing from booth to booth often invited jeers. He was heckled. In Chilauli singhpur,

63-year-old Ambika saran singh noted archly that he had finally got to see his MP after ten years, and added that Rahul Gandhi had come not for Amethi’s benefit, but for his own. Young men at Phoola Gaon booth asked Rahul Gandhi whether he had been jolted by the potholes on the roads or not. His only supporters were among Muslims, and perhaps their enthusiasm was not at previous levels.

If you want to know why, all you have to do is take a look at the photograph of Rahul Gandhi at the EVM booth in Madhyamik Vidyalaya published by the Times. The real story is on the walls of this school. It was a picture of misery. This was the state of schools in the one constituency which should have got highest-priority during a decade of UPA rule. It was a snapshot of the extreme indifference with which Rahul Gandhi has treated his lifeline to politics; even token facilities like public toilets have collapsed.

This is symptomatic of Congress policy towards the electorate: why worry about development when vote banks will once again rally around and save your skin?

‘Democracy is a tough business.

Elections are about real-time choices. The voter does not have the luxury of theory, or drawing room options like “None Of The Above”.’

There has been much heat about the Gujarat model of growth. Have you ever wondered why no one talks about any Amethi model? simple answer: there isn’t any.

Interrogators, who come armed with minute variations within Gujarat statistics, never seem to ask Rahul Gandhi why there isn’t a road or a single decent medical facility in Amethi. Perhaps this is reticence, perhaps it is diffidence; one assumes it is not because of any awe of the family. But just as continuous questions keep those in charge of Gujarat on

‘There has been much heat about the Gujarat model of growth. Have you ever wondered why no one talks about any Amethi model? Simple answer: there isn’t any.’

their toes, silence on Amethi has led to complacency. Amethi has become one of the symbols of the 16th general election.

No one of course knows the numbers hidden in the voting machines. The emotional quotient of a legacy has silent depth. But what is indisputable is that Rahul Gandhi is in serious trouble for the first time since he stepped into electoral politics, and he has no one to blame for this mess except for himself. He has had minimal time for Parliament; his attitude to power has been interventionist determined by some political script; and his attitude to Amethi was indifferent at best and cynical at worst.

But if Rahul Gandhi does become member from Amethi yet again, the comparison in 2019 will not be between Amethi and Gujarat but between Amethi and Varanasi, which Narendra Modi will represent in Parliament. The BJP candidate for prime minister has specified, in detail, how he plans to convert Varanasi into a world capital of tourism, develop a lucrative market for the products of its

superb weaving craftsmen and of course clean the Ganga. His agenda is set.

Democracy is a tough business. Elections are about real-time choices. The voter does not have the luxury of theory, or drawing room options like “None Of The Above”. The citizen wants good governance, and a vacuum or uncertainty is not the best way to get it.

People want to know who is going to be in charge, if for no other reason than to hold someone accountable if things go wrong. If 2014 was, when all notional veils are stripped away, a contest between the capabilities of Narendra Modi and Rahul Gandhi, then in all likelihood 2019 is going to be a re-match.

Congress is unlikely to abandon its premier family; it finds comfort in genes. Among the many nuances of this multi-layered tournament called a general election will be a contest between the Varanasi and Amethi models of constituency development.

Elections are as much about punishment for mistakes as hope for the future.

Punishment ends on voting day; hope begins with the results. g

The quintessential teacher ...Continued from page 10 The rupee has strengthened, or rather was made to strengthen, he points out, just when Pakistan finally secured the GsP-plus privilege, opening the possibility of access to the EU’s large market.

But it bears remembering that Europe continues to suffer from the recent recession’s overhang, and their textiles imports, our prime market, have recorded a reduction of 12 per cent over the last two years.

Therefore the market is intensely competitive. One of our biggest competitors is our good friend Turkey, which has a Free Trade Agreement (FTA) with the EU (which goes far beyond GsPplus), and to preserve market share the Turkish lira has depreciated by 20 per cent over the last year. And the simplest lessons of economics suggest that as the trade deficit widens, benefits of the ‘gift’ will shrink.

The stock market bull run, too,

12 www.pakistantoday.com.pk

is more façade than fact. For, even as the market rose to break records, portfolio investment actually declined by a whopping 40 per cent. In India, however, $15 billion dollars of portfolio investment flowed in over the same period of time, even though Dalal street has not been nearly as bullish as its counterpart in Karachi.

“Investment is not coming in, it is going out”, Dr Pasha adds.

“Notice the quiet exit of multinationals from Pakistan, which started with ICI, spread to Arab companies, and now leading banks are packing up as well. They are liquidating reserves and repatriating profits”.

What is worse, according to his research, while we receive around $800 million annually in new FDI, we remit almost twice that amount, which will make managing the BOP a persistent problem.

However, macroeconomic concerns notwithstanding, the

common man’s most pressing problem is inflation, which is where our good doctor expects some relief just around the corner.

When the present dispensation took office inflation had been kept artificially low at five per cent. It soon picked up with the unprecedented rise in industrial tariffs, an initial decline in the rupee, record borrowing from the sBP, and neglect of the agriculture sector.

Now, however, that the rupee is strong, sooner or later prices of crucial imported items will recede, including petroleum, consumer products like edible oil, tea, vegetables, pulses, etc.

“I am optimistic that inflation will come down to around seven per cent in the next six months, making life somewhat more manageable”.

The government?

The tea and biscuits ended, and so did the discussion on the economy, and the doctor dwelled

on his experience of government as I prepared to beg leave.

“Government was a mixed experience. I learned very quickly that implementing theory or abstract principles just does not work” he says. “You have to be sensitive to the political economy.

Only then do you understand intentions of different players, and can subsequently build coalitions of support”.

One thing he is not very optimistic about, though, is the bureaucracy. It used to be a different breed altogether till the early ‘90s, but now it has collapsed qualitatively.

“Back then secretaries were sharp and up to the mark, but now there is clear professional degeneration”, he says. “Now there is more corruption, people are insecure about tenures, and the better minds simply opt for industry or go abroad”. such was not the state of the Pakistan of his youth, of which he

talks fondly. The ‘70s are especially dear to him, when the country was more progressive despite having lost the eastern wing. And this was when, back in the day, he used to be one of Zulfi Bhutto’s minor speech writers.

From there he rose, in the academia, in government, and also at the UN. He has been invited to join governments now and then.

Years of being on the move have taken their toll; diabetes hurts him now, and his heart is not as strong as it used to be. still, he takes great pleasure in teaching, which was evident in the depth and detail he would go into when explaining sensitive subjects.

Just as gracious in farewell as in welcoming, he came across as the supreme teacher of the old school, for whom imparting wisdom acquired over long years is a continuous process, not just a classroom thing; someone the books refer to as the quintessential teacher. g

C M YK

Sunday, 18 - 24 May, 2014

economy

External debt, bankruptcy and Pakistan

How matters went from bad to worse omer majeed The writer is pursuing PhD in economics at the Australian National University. He can be reached at o.majeed77@gmail.com.

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akistan is fast turning into a bankrupt country – if it has not already done so! if this trend continues then Pakistan will soon lose its economic sovereignty.

Moreover, because of financial problems caused by this debt, Pakistan’s institutions will find it hard to function – including the military of Pakistan, which is essential for fighting terrorists and balancing external threats. a bankrupt Pakistan and a bankrupt military will spell nothing short of a disaster for Pakistan.

Pakistan is fast turning into a bankrupt country – that is if it has not already done so. if this trend continues then Pakistan will soon lose its economic sovereignty. Moreover, because of financial problems caused by this debt, Pakistan’s institutions will find it hard to function – including the military of Pakistan, which is essential for fighting terrorists and balancing external threats. a bankrupt Pakistan and a bankrupt military will spell nothing short of a disaster for Pakistan.

By analysing Pakistan’s macroeconomic and financial fundamentals it seems as if Pakistan is being pushed into a debt trap by the governments of PPP and PML-n. if drastic measures are not taken towards fixing the Pakistan’s economy, then Pakistan will soon end up in a financial crisis. Below i analyse some of the key economic variables for Pakistan, namely: external debt stock, total reserves as a percentage of external debt, budget deficit, exports and the exchange rate of Pakistan.

Pakistan’s external debt has increased substantially in the last seven years (Figure 1). Between 2007 and 2012, Pakistan’s external debt increased by around $20 billion to $59.6 billion, in inflation adjusted terms. this is about a 50 per cent increase in external debt. Moreover, the worrying trend has been that in recent years the rate at which external debt has been accumulated has increased substantially. the PML-n government, which came to power in 2013, has made the external debt situation exceptionally worse. By some estimates, the PML-n government has taken on an extra $10 billion in external loans in the last 12 months. Without any resources to pay these loans back, low growth in tax revenue, a depressed economy and a depreciated currency, this external debt is likely to take Pakistan towards a financial crisis.

Figure 1

Source: World Bank. these figures are in inflation adjust terms, with 2010 as the base year. Data is only available till 2012. shaded area shows years of President Musharraf’s administration.

Figure 1 shows Pakistan’s external debt stock since 1988. During the governments of

PPP and PML-n, external debt increased substantially. External debt increased by around $15.4 billion between 1988 and 1999 and by around $20 billion between 2007 and 2012. these figures show that the governments of PML-n and PPP have followed an unsustainable path of borrowing both in the 1990’s and since 2007. in contrast, external debt declined during President Musharraf’s administration, declining by around $3.4 billion between 1999 and 2006. not only has Pakistan’s external debt increased, but at the same time Pakistan’s ability to pay back this debt has decreased significantly. a good indicator of a country’s ability to pay back external debt is total reserves as a percentage of external debt.

Between 2006 and 2012, total reserves as a percentage of external debt decreased by 12.5 percentage points (Figure 2). With the recent increase in debt obligations and reduction in foreign reserves, this ratio is likely to have further deteriorated. in comparison, during the administration of President Musharraf, total reserves as a percentage of external debt increased by 28.4 percentage points. in addition, Pakistan’s export growth has also slowed. Exports are a major instrument for a country to gain access to foreign currency, which can be vital for paying back external debt. Between 2007 and 2012, average annual export growth has been -0.6 per cent, as opposed to a staggering 10.2 per cent average annual growth achieved under President Musharraf’s administration.

Figure 2

Figure 3

Source: World Bank. Data is only available till 2012 for total reserves as per cent of external debt and till 2013 for exchange rate. shaded area shows years of President Musharraf’s administration.

Moreover, Pakistan’s ability to pay back external debt has been further eroded by the

devaluation of Pakistan’s Rupee, which depreciated by around 67 per cent between 2007 and 2013 (Figure 3). the Pakistani Rupee has depreciated mostly because of macroeconomic mismanagement, lack of growth in exports and reduction in foreign direct investment. such a significant devaluation of the Pakistani Rupee means that Pakistan’s ability to pay back external debt from domestic resources and domestic revenue has been considerably reduced. since 1988, the only period in which the Rupee stabilized was between 2001 and 2007. this was achieved by increasing foreign cash inflow into Pakistan by increasing exports, foreign direct investment and remittances during the administration of President Musharraf.

Figure 4

Source: World Bank. Data is only available till 2012. Cash surplus or deficit is revenue (including grants) minus expense, minus net acquisition of nonfinancial assets.

Pakistan’s budget deficit as a percentage of gross domestic product (GDP) has also deteriorated since 2006, decreasing by 4.06 percentage points. Figure 4 shows the deteriorating budget deficit for Pakistan under the PPP and PML-n governments. this budget deficit is likely to force Pakistan to depend more on both foreign and domestic borrowing, pushing Pakistan further into a potential debt trap.

Furthermore, it seems as if the governments of PPP and PML-n have no incentive to be concerned about paying back the external debt that their respective governments have borrowed. according to the World Bank data, average grace period of new external debt commitments since 2007 is 6.6 years. as the election cycle in Pakistan is five years, less than the average grace period for new debt, the subsequent governments of PPP and PML-n have not had to be concerned about paying back this debt during their respective tenures. instead this new external debt is only going to be a problem for

‘Pakistan’s external debt has increased substantially in the last seven years (Figure 1). Between 2007 and 2012, Pakistan’s external debt increased by around $20 billion to $59.6 billion, in inflation adjusted terms. This is about a 50 per cent increase in external debt. Moreover, the worrying trend has been that in recent years the rate at which external debt has been accumulated has increased substantially.’ future governments and Pakistani citizens. this is a clear example of moral hazard. in economics, moral hazard is where an economic agent does not enter into a transaction in good faith, partly because he does not have to face the full cost of his decisions. since the governments of PPP and PML-n don’t have to worry about paying back the debt they borrowed during their respective tenures, they have borrowed excessively – causing a moral hazard problem. it is evident from external debt stock, total reserves as a percentage of external debt, export growth, currency exchange rate and fiscal deficit that since 1988 the only administration that has improved Pakistan’s finances was that of President Pervez Musharraf. in contrast, various PPP and PML-n governments have taken Pakistan’s finances towards an unsustainable path of external borrowing. in summary, Pakistan’s macroeconomic fundamentals have weakened substantially since 2007. Reductions in Pakistan’s export growth and foreign direct investment have further diminished Pakistan’s ability to generate forex reserves to pay back external debt. Meanwhile, Pakistan’s high budget deficit continues to be a drain on its economy.

Given the state of the economy, it seems as if Pakistan is surviving on a borrowed economy. if Pakistan’s finances are not managed properly, then Pakistan will soon become an economic failed state and dependent on international donors. such an outcome is likely to cost Pakistan its sovereignty and financial independence! g

‘It is evident from external debt stock, total reserves as a percentage of external debt, export growth, currency exchange rate and fiscal deficit that since 1988 the only administration that has improved Pakistan’s finances was that of President Pervez Musharraf. In contrast, various PPP and PML-N governments have taken Pakistan’s finances towards an unsustainable path of external borrowing.’ www.pakistantoday.com.pk 13

C M YK

Sunday, 18 - 24 May, 2014

economy

Domestic commerce in neoliberal Pakistan

Foreign capital is privileged Dr ImDaD HussaIn

The writer is Assistant Professor at Centre for Public Policy and Governance, Forman Christian College University Lahore. He also works with Punjab Urban Resource Centre.

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he internal trade of Pakistan— domestic commerce in agriculture, light engineering, garments and other small to medium businesses — is important for Pakistan’s development. But more important is that the cities — the centers of domestic commerce — have full control of decision making over their economies. They should be able to develop, implement and change economic development strategies. But this is not happening.

Because we are living in strange times, I suppose. All those things which do not contribute to the happiness of the majority of the world are happening very fast.

Are you thinking about the free markets?

Yes! Free markets and their trappings: desire, seduction, and glamour — in short, consumerism spreading fast. But all of this is happening with active support of nationstates, with their people’s money, the majority of who have no stake in the trappings of free market.

And Pakistan is no exception to this. her rulers welcoming opening the country for free markets — as uncritically as medieval bankers would wait for traders to make them their guests. The most important Pakistani cities are being reworked to become safe enclaves of capitalism.

So Lahore will not remain or become Lahore. It will become Paris or Istanbul.

Lahore is being rebuilt. If you are a Lahori and you come back here after five years, you will be lost.

Karachi will not rehabilitate itself. It will become Dubai. Similarly, Faisalabad will become Manchester. And very soon efforts will be made to turn Sialkot into a city of europe.

This change is happening in India, too.

Look at Delhi. Krishnendu Bose’s 2008 documentary, Delhi — Work in Progress claimed that India would attract more than $300 billion of international investment only in the real estate until 2013. And most of this investment would come to Delhi. Impatient to become Shanghai, Mumbai is fast becoming city of concrete.

In other terms, free markets require metropolitan cities become world class cities — a world class city has all the facilities of developed world cities, only the richer cities.

A world class city allows movement of capital, provide luxurious experience to visitors. If you are moving from one world class city to another, you will feel no surprises, no shocks.

Supermarkets are the frontlines of free market economy. Supermarkets of everything from retail, wholesale to real estate to financial markets. And this expansion of supermarkets of everything — especially retail

14 www.pakistantoday.com.pk

and wholesale — may be harmful for domestic commerce in developing countries. Not in itself but by affecting the allocation of resources for the promotion of domestic commerce.

Of course, the first competition of the supermarkets is with the kiryana [retail] store. In the end, the kiryana can survive by modeling itself on superstore. Or kiryana owner taking a job of salesman at superstore.

The workers and technicians in agriculture, light engineering, and manufacturing also need to look somewhere else for livelihoods.

There are benefits of this but the irony is that it is the domestic commerce which has to leave space for the foreign capital. The foreign is not treated like the domestic: foreign capital is privileged.

As a result, domestic commerce may not grow as it should. Besides, some of the issues of domestic commerce such as unfair business practices and harms to consumers can also not be eliminated. When the state does not concern itself with the domestic commerce, the chances of its improvement are limited.

But the domestic commerce may be saved by giving the same attention state is giving to foreign investments. Before we discuss this, let us have a look at the situation of domestic commerce in Pakistan.

As the biggest sector of country’s economy, it contributes 42 per cent to the national wealth. It is also the biggest sector of employment providing livelihoods to 30 per cent of the labor force. Domestic commerce has grown substantially during the last few years. The data compiled by the economic Survey of Pakistan 2012-13 illustrates this point well.

But the three cities are highly important as regards domestic commerce. Let us talk about these them. half of the Sind and 22 per cent of Pakistani population, Karachi is the biggest place for domestic commerce, so is its contribution to the country’s economy. economist AB Shahid has recently estimated Karachi’s contribution to the national GDP at around 16 billion rupees a day, and its daily tax revenues at two billion. It is really tremendous! Imagine if Karachi is crime-free, and well governed, what impact it can have on economic growth in the country.

In Global City GDP ranking of 2008,

Supermarkets are the frontlines of free market economy. Supermarkets of everything from retail, wholesale to real estate to financial markets.

And this expansion of supermarkets of everything — especially retail and wholesale — may be harmful for domestic commerce in developing countries.

Lahore’s position was 36th out of 151. Lahore’s contribution to the national GDP is higher than the individual contribution of Khyber Pukhtunkhwa, Baluchistan and interior Sindh. Lahore is expected to increase its GDP from $40 billion (Purchasing Power ParityPPP) in 2008 to $120 billion (PPP) by 2025.

Lahore is the second largest city in Pakistan, and the largest in Punjab. But Lahore has many advantages which Karachi does not have. Lahore has Gujranwala to its north, Sheikhupura on its northwest, Nankana and Faisalabad on its southwest, Kasur on its southeast. It is also near Amritsar and Delhi, the traditional trading partners of Lahore.

Faisalabad’s contribution to the GDP of Pakistan is more than Baluchistan. In sum, the economies of these three cities are contributing a lot to the national economy of Pakistan. In 2005, for example, Karachi’s share in the GDP of Pakistan was 25 per cent, Lahore’s 12.75 per cent and Faisalabad’s 4.55 per cent. PricewaterhouseCoopers calculations of the size of the metropolitan economies in Asia provides encouraging figures about the economic performance of Pakistani cities.

Figure 2: GDP PPP of Three Pakistani Cities in 2008

(Source: PricewaterhouseCoopers, 2009)

Let us look at the problems of domestic commerce.

There are hardly any arrangements for loans for business — small and medium sizes. The bigger industries may be exceptions though. It is very difficult for entrepreneurs to find space for opening offices or retail outlets. Though government agencies such as Small and Medium enterprises Development Authority (SMeDA) provide trainings to the entrepreneurs but they can only cover very small portion of entrepreneurs.

Let us talk about the privileges of the free enterprise zones.

Special economic Zones (SeZs) Act 2012 grants a number of privileges to the investors — largely foreign investors. The zones are treated as foreign territories. The enterprises are

The biggest problem of domestic commerce is that decision making about it is not done at local level. It is in fact the national states which ensure the movement of capital and provide safeguards to it. exempted from taxes for ten years. In addition, the exemptions and incentives once granted under the SeZ law can’t be withdrawn. The zones may install their own power generation projects.

The biggest problem of domestic commerce is that decision making about it is not done at local level. It is in fact the national states which ensure the movement of capital and provide safeguards to it. The more the decision making about commerce is centralised at national level and the less the local governments have power over it, the easier it is for foreign investments to dictate the terms which only benefit foreign investors.

And the more the foreign investment, the lesser the control cities are having on their affairs. This is true for most of the cities in developing countries. It is the state and national governments which are taking control of the affairs of the metropolitan cities and their economic decision making.

The facilitation of foreign capital is quite easy that way.

And more the foreign investment arrives in Pakistan, the more the domestic commerce will be relegated to margins or incorporated in foreign capital. The arrival of foreign investment will strip Pakistani cities of the power they should have to control their affairs. It is because most of the financial and economic decisions will be made by the provincial and federal governments.

One way to respond to this situation is to develop strong local governments capable enough to develop and implement Metropolitan economic Development Strategies. Only strong local governments capable of economic policymaking can use the foreign investment to strengthen domestic commerce and local development.

If it is not possible, the domestic commerce should not be weakened to the extent that it is co-opted by foreign investments. g

C M YK

Sunday, 18 - 24 May, 2014

InternatIonal

Afghanistan’s insurgency after the transition

a look at the key areas of priority for the incoming government eXeCUtIVe SUMMarY anD reCoMMenDatIonS

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InternatIonal CrIsIs Group

he war in Afghanistan entered a new phase in 2013. It now is increasingly a contest between the insurgents and the Afghan National Security Forces (ANSF). Many within and outside the government are more optimistic about stability in the wake of a relatively successful first round of presidential elections on 5 April 2014. however, any euphoria should be tempered by a realistic assessment of the security challenges that President Karzai’s successor will face in the transitional period of 2014-2015.

Kabul may find these challenges difficult to overcome without significant and sustained international security, political and economic support.

The overall trend is one of escalating violence and insurgent attacks. Ongoing withdrawals of international soldiers have generally coincided with a deterioration of Kabul’s reach in outlying districts. The insurgents have failed to capture major towns and cities, and some areas have experienced more peace and stability in the absence of international troops. Yet, the increasing confidence of the insurgents, as evidenced by their ability to assemble bigger formations for assaults, reduces the chances for meaningful nationallevel peace talks in 2014-2015.

A close examination of four provinces – Faryab, Kunar, Paktia and Kandahar – reveals underlying factors that may aggravate the conflict in the short term. historical feuds and unresolved grievances are worsening after having been, in some cases, temporarily contained by the presence of international troops. In Faryab, these are largely ethnic tensions; in Kandahar they are mostly tribal; but in all transitional areas there is a variety of unfinished business that may result in further violence post2014. Similarly, clashes among pro-government actors may become more frequent, as predicted by local interlocutors after recent skirmishing between government forces in Paktia. The situation in Kandahar also illustrates the way mistreatment of Afghans at the hands of their own security forces, operating with less supervision from foreign troops, breeds resentment that feeds the insurgency. Finally, despite its rhetoric, Pakistan has not reduced safe havens and other support for the insurgency, while Afghanistan’s hostile responses – especially in Kandahar and Kunar – risk worsening cross-border relations.

None of these trends mean that Afghanistan is doomed to repeat the post-Soviet state collapse of the early 1990s, particularly if there is continued and robust international support. In fact, Afghan forces suffered record casualties in 2013 and retreated from some locations in the face of rising insurgency but maintained the tempo of their operations in most parts of the country.

Afghanistan still has no shortage of young men joining the ANSF, offsetting the rising number of those who opt to leave them or abandon their posts. The government remains capable of moving supplies along highways to urban centres. ANSF cohesiveness, or lack of it, may prove decisive in the coming years, and Paktia notwithstanding, only minor reports emerged in 2013 of Afghan units fighting each other. As long as donors remain willing to pay their salaries, the sheer numbers of Afghan security personnel – possibly in the 370,000 range today – are a formidable obstacle to large-scale strategic gains by the insurgents.

Despite its rhetoric, Pakistan has not reduced safe havens and other support for the insurgency, while Afghanistan’s hostile responses – especially in Kandahar and Kunar – risk worsening cross-border relations.

That will not stop the Taliban and other insurgent groups from pushing for such gains, however.

Despite a short-lived gesture toward peace negotiations in Doha, the insurgents’ behaviour in places where the foreign troops have withdrawn shows no inclination to slow the pace of fighting. They are blocking roads, capturing rural territory and trying to overwhelm district administration centres. With less risk of attack from international forces, they are massing bigger groups of fighters and getting into an increasing number of face-toface ground engagements with Afghan security personnel, some of which drag on for weeks. The rising attacks show that the insurgents are able to motivate their fighters in the absence of foreign troops, shifting their rhetoric from calls to resist infidel occupation to a new emphasis on confronting the “puppets” or “betrayers of Islam” in the government. The emerging prominence of splinter groups such as Mahaz-e-Fedayeen is a further indication the insurgency will not lack ferocity in the coming years.

Refrain from taking direct military action inside Pakistan or supporting antiPakistan militants.

For the first time, the insurgents inflicted almost as many casualties on Afghan security forces in 2013 as they suffered themselves, and several accounts of battles in remote districts suggested the sides were nearly matched in strength. There are concerns that the balance could tip in favour of the insurgency, particularly in some rural locations, as foreign troops continue leaving. President Karzai has refused to conclude agreements with the U.S. and NATO that would keep a relatively modest presence of international troops after December 2014. The two presidential runoff candidates have vowed to sign the Bilateral Security Agreement (BSA) with the U.S., which would in turn allow for a NATO Status of Forces Agreement (SOFA). While retaining a contingent of foreign soldiers would not be sufficient on its own to keep the insurgency at bay, its absence could prove extremely problematic. The ANSF still needs support from international forces, and signing a BSA and a SOFA would likely have knock-on effects, sending an important signal of commitment at a fragile time, thus encouraging ongoing financial, developmental and diplomatic support.

With or without backup from international forces, the Afghan government will need more helicopters, armoured vehicles, and logistical support to accomplish that limited objective.

Such additional military tools would also permit the government to rely increasingly on the relatively well-disciplined Afghan army rather than forcing it to turn to irregular forces that have a dismal record of harming civilians.

Certainly, the future of the Afghan government depends primarily on its own behaviour: its commitment to the rule of law, anti-corruption measures and other aspects of governance must demonstrate its concern for the well-being of all Afghans. however, responsibility also rests with the international community; its patchy efforts over a dozen years to bring peace and stability must now be followed not with apathy, but with renewed commitment.

RECOMMENDATIONS To help Afghan security forces withstand a rising insurgency To the government of the Islamic Republic of Afghanistan: 1. Sign a Bilateral Security Agreement (BSA) with the U.S. and a Status of Forces Agreement (SOFA) with NATO.

2. Take urgent steps to reduce casualties among Afghan forces, including a large-scale effort to train police and soldiers in the basics of emergency medical care.

3. Strengthen anti-corruption measures to ensure that security personnel receive their salaries and other benefits, and confirm that ammunition, diesel and other logistical supplies reach Afghan National Security Forces (ANSF) units.

To the government of the United States: 4. Significantly increase the size of the Mobile Strike Force (MSF) program, so that sufficient ANSF quick-reaction units are available to handle many of the worsening security trends of 20142015 and beyond.

5. Find a way, possibly by working with other donors, to expand Afghan capacity for tactical air support, including more helicopters in support of government efforts to retain control over remote district centres.

To all donor countries: 6. Convene a meeting of donor countries as a follow-up to the 2012 NATO summit in Chicago, with a view to expanding annual pledges of support, realising them on schedule and allowing the ANSF to maintain for the time being personnel rosters approximately equal to their current levels. Those ANSF levels are not indefinitely sustainable or desirable, but reductions should progress in tandem with stabilisation.

7. Support anti-corruption measures by the Afghan government to ensure, inter alia, that salaries are distributed to all ANSF members and logistical supply chains function as required.

To reduce tensions between Afghanistan and Pakistan To the government of the Islamic Republic of Afghanistan: 8. Increase diplomatic outreach to regional governments, including Pakistan, to find ways of reviving peace talks with the insurgents; maintain, at a minimum, lines of communication between Afghan and Pakistani civilian and military leaders; and explore ways to increase bilateral economic cooperation as a way to ease tensions with Pakistan.

9. Refrain from taking direct military action inside Pakistan or supporting anti-Pakistan militants.

To strengthen the rule of law To the government of the Islamic Republic of Afghanistan: 10. Reduce reliance on and ultimately phase out the controversial Afghan Local Police (ALP) program, given the ALP’s abuse of power and destabilising effect in most parts of the country.

11. Respond with transparent

investigation and disciplinary measures as appropriate to any report of ANSF failure to protect or deliberate targeting of civilians, in violation of obligations under Afghan and international law.

To all donor countries: 12. Assist with programs aimed at encouraging the ANSF to respect the constitution and the country’s obligations with regard to human rights and the laws of armed conflict.

To improve political legitimacy and state viability To the government of the Islamic Republic of Afghanistan: 13. encourage open public and media discussion and debate of security problems so as to find solutions and keep policymakers informed; and acknowledge that, aside from the conflict’s external factors, internal Afghan dynamics such as corruption, disenfranchisement and impunity also deserve attention.

14. Strengthen efforts to make the Afghan government more politically inclusive, particularly at the provincial and district level.

15. Refrain from interfering in the Independent electoral

Provide diplomatic support for the Afghan government’s efforts to improve relations with Pakistan and revive peace talks, when feasible, with insurgent factions.

Commission (IeC) and the Independent Complaints Commission (IeCC) processes of disqualifying voters and adjudicating complaints in connection with the 2014 and subsequent elections.

16. Direct propaganda messages toward front-line insurgents that publicise the absence of international forces in their areas of operation in order to undermine the logic of jihad after the departure of foreign troops.

To all donor countries: 17. Sustain economic assistance for the Afghan government and work with the finance ministry to encourage growth in customs and other forms of government revenue.

18. encourage the IeC and the IeCC to comply strictly with electoral laws, including requirements to conduct their work in a transparent manner, in the processes of disqualifying voters and adjudicating complaints.

19. Provide diplomatic support for the Afghan government’s efforts to improve relations with Pakistan and revive peace talks, when feasible, with insurgent factions. g www.pakistantoday.com.pk 15

CMY K

Sunday, 18 - 24 May, 2014

oPinion

Pipeline aspirations – A well timed shift

Definitely a milestone for the government

Zoon AhmAd KhAn

T

he Nawaz government has surprised her audience remarkably with a recent visit to Iran, shaking hands with the theocracy’s Supreme Leader Khameini and recently elected President Rouhani. The high profile delegation that visited Tehran included chief minister of Balochistan, Dr Abdul Malik Baloch, governor of Baluchistan, Mahmood Khan Achakzai, advisor on foreign affairs and national security, Sartaj Aziz, special assistant on foreign affairs, Tariq Fatemi, finance minister, Ishaq Dar, and minister for petroleum and natural resources, Shahid Khaqan Abbasi. The outcome of the meeting was also exceptional. Sharif proved that visiting Iran was not a mere political move to show that Pakistan has not allied itself with the Wahabi bloc by signing a total of nine MoUs in the short trip. More importantly, Iran’s supreme leader expressed an understanding of Pakistan’s reservations; the fear of sanctions. however, given that Iran has completed her side of the bargain Pakistan will be expected to follow through.

The meeting between Iran and Pakistan is definitely a milestone for the Nawaz government. PML-N’s mandate prior to the elections stressed on economic recovery. It was more than anything else perhaps the dissatisfaction with the economy, growing unemployment and worsening energy crisis that skewed the vote bank in the industrialist Nawaz Sharif’s favour. however, with economic growth and resolving the energy crisis, the PML-N has had to question certain notions regarding foreign affiliations. Riyadh, which has long been considered PML-N’s comfort zone, and has been coming forward with financial assistance in the name of Pak-Saudi friendship, has raised criticism. Similarly the US’s harsh stance against any economic advancement towards the pariah-state Iran had discouraged even pro-Iran PPP to take a few steps back and reconsider their decision.

But the bigger question that often crosses our minds is: Must Pakistan posture herself according to predetermined regional red lines? For many, joining hands with Saudi Arabia is synonymous to turning a cold shoulder towards Iran. And similarly civil ties with the US and Afghanistan (previously the Karzai government) was only possible if Pakistan treated Iran with suspicion as all states were expected to while the theocracy threatened global security owing to its nuclear program. Perhaps the red lines in the Middle east have not changed much at all. Regional influence is a prize the Shi’a and the Wahabi bloc are vying for — and between them Israel is striving to maintain her own presence. The fact that Saudi Arabia and Iran will continue to compete however does not translate into unconditional backing from Western allies; and this is the cleavage Pakistan’s political establishment has intelligently spotted.

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Recent shifts in global dynamics and spheres of power have influenced decadesold alliances; shaken previously held notions.

After the Republicans created immense hue and cry over Iran’s increasingly threatening nuclear program in an attempt to gain public support for another war Obama knew that the Israeli lobby’s strong hold on media has become a menace. More so, a general shift in public sentiment within Israel has been sensed as well. Uzi eilam, from the heart of Israel’s secret security mechanisms, working on Israel’s own nuclear program and having served senior roles in the defense establishment that culminated in a decade as the head of the atomic agency; stated that Netanyahu has exaggerated the Iranian threat for political mileage. In fact he asserted that Iran cannot possibly be any less than a decade away from creating a nuclear bomb. After positive discussions between IAeA and the Iranian government, supported by the P5+1; this statement coming from within Israel rests remaining reservations to a great degree.

The west’s shift in allowing Iran some leverage in attaining its nuclear aspirations however does not redeem the Shi’a state of Wahabi allegations. Iran remains the threat, the black sheep, and the menace within the region. Both Saudi Arabia and Israel have not welcomed these developments between the west and Iran. One could say the handshake and proceeding negotiations over nuclear matters were seen as a back-stab by long allies; and yet these narratives of a

‘Recent shifts in global dynamics and spheres of power have influenced decades-old alliances; shaken previously held notions.’ demon Shi’a state preparing to destroy the west benefit only the regional competitors.

Both Saudi Arabia and Israel enjoy the influence they command in their region by virtue of allying themselves with the west.

And misusing this power and flaunting this backing was a big mistake. Before securing the interests of allies the US will secure her own interests; domestic economic woes and bringing the troops home above all. however a swing in policy towards Iran does not mean the US would encourage economic ties between Pakistan and Iran.

Alternatives from Central Asia via Afghanistan; TAPI for instance; is a more viable option. The US needs India on board as a stabilising force, and without Pakistan there can be no TAPI. Yet Pakistan’s domestic woes have only been increasing despite strong alliances, security problems only been worsening, and loyalties only been questioned throughout a decade dedicated solely to a war we never started. On the contrary despite having maintained warm relations with Iran (with reference to Chabaha and gas imports); India enjoys US’ confidence more than Pakistan. even though relations with the US

have improved since the Salala incident Pakistan’s military and civilian leadership seems to have learned that following previously established rules to the core can only close doors to opportunities.

The key is to cease the opportunities at hand. Pakistan enjoys warm relationship with the Saudi government, but why must Shi’a-Sunni rivalry come in the way of resolving Pakistan’s energy woes? Sanctions are a risk we might be taking but shutting out any room for talks will only destabilise us further and worsen our internal problems

‘The west’s shift in allowing Iran some leverage in attaining its nuclear aspirations however does not redeem the Shi’a state of Wahabi allegations. Iran remains the threat, the black sheep, and the menace within the region.’ that encompass the economy and energy along with security. Pragmatism is the key to successful relations; not loyalty that requires a blindfold. And by opening to the option of working with Saudi Arabia and Iran simultaneously, Pakistan will be facing more challenges; but these challenges can be overcome and eventually preserving national interest can be the final goal. g