Saturday, January 19, 2013

Pakistan: IMF hardens stance

Finance minister Dr Abdul Hafeez said a few months ago that Pakistan would not require a fresh bailout programme of the International Monetary Fund. But when the IMF mission is now in Pakistan, the government says it needs another such arrangement to remove difficulties of the fragile national economy. This economic plight owes largely to corruption in successive governments that could not achieve budgetary and other economic targets. The incumbent government would be more to blame that it did not deliver despite availing the IMF bailout package amounting to $11.3 billion in 2008 and addition of another $500 million to the exchequer from the US-led Coalition Support Fund late last year. Where has the money gone, is a pertinent question that the government must answer. This is in this background that the IMF now seems coagulating its stance if Islamabad made a formal request for another loan. The world body believes that Islamabad has done almost nothing to consolidate its macroeconomic management and taken no other steps committed when the government was availing off the earlier package. For example, it says that the government has not reformed its taxation regime, failed to bring reforms in general sales tax, took no initiative for internal resource mobilization in boosting revenues, did not withdraw subsidies and paid more or less no attention in overcoming power shortage which has now become number one crisis in Pakistan. The mission also says that the request of a future loan programme can be entertained only if the country’s political leadership and the forthcoming caretaker governments at the centre and in provinces give their consent. Even such an arrangement will be conditional to bringing about a radical change in economic strategy as losses incurred by government institutions substantiate the fact that current economic policies and priorities have failed. The IMF also understands that budget deficit has gone up due to the power sector’s line losses and theft. The deficit will now rise to 7.5 per cent of the GDP during the ongoing financial year against the government’s target of 4.7 per cent. Consequently, the economic growth will be around 3.5 per cent against the target of 4.2 per cent. The budget deficit has become a critical issue for several years and bridging this gap would need billions of dollars in revenue. Not only this Pakistan’s foreign exchange reserves have also fallen from $13.782 billion on week ending on January 11 to $9.3 billion earlier this week and this size of reserves is hardly enough to foot the imports bill for a maximum of three months. Another crisis seems looming large is that Pakistan has to repay around $1.7 billion to the IMF in the remaining five and half months this fiscal and another $3.4 billion in 2013-14 and this would further deplete the foreign exchange reserves leaving no other option than to approach the Fund for a fresh bailout package. What actually has marred Pakistan’s economic progress is all governments at least since Ayub Khan’s regime have not kept the national interest as the ultimate goal. Their economic policies and priorities have consistently been subject to political expediencies and vested interests. Looking around Asia, the example of several countries, including China, South Korea, Malaysia, Thailand, Vietnam and even South Asian countries like India, Bangladesh and Sri Lanka, would demonstrate that Pakistan stands nowhere in economic development in the continent. What irks more is that most of these countries got freedom much after this land of the pure did. One particular aspect which sufficiently proves how deep rooted corruption in our country is, as also pointed by the IMF, that no government has been able to overcome the chronic ill of power theft nor control system and power losses that are as high as 35 per cent against an internationally accepted standard of a maximum of 10 per cent. This is only because corruption has permeated in electricity companies like cancer. And since energy issue is the country’s core issue, such a huge loss cannot be condoned by any yardstick. Indeed it is now crucial that incumbent rulers should focus on internal resource mobilization, including reforming the hackneyed tax collecting system with an even-handed approach of taxing all those are eligible and are rolling in wealth, in addition to documentation of the national economy. But for the first time, for a change, the government should focus the interest of Pakistan and its 180 million people who are, for decades, hoping their miseries will be over one day.

Pakistan: The melodrama is over

Although he promised a mammoth ‘revolution’, Dr Tahirul Qadri turned out to be no more than a glitch in the ongoing democratic process. The ‘million’ man march and rally he vowed would hold the capital hostage came to a rather unceremonious end after five days of essentially waiting on the government to kowtow to his demands and whims. The result was not one he had hoped for as all the political stakeholders did what they normally never do: unite for a common cause. All the political parties set aside their differences and vowed to ensure that the democratic process would not be allowed to be manipulated by any random entrant bent upon inciting a ‘revolution’ but delivering only a distraction. While government representatives did get a little hot under the collar on Tuesday due to the Supreme Court’s (SC) surprise ruling against Prime Minister Ashraf, they were not too deterred by the screams and shouts of the doctor who made some very ludicrous demands. Dr Tahirul Qadri’s mass demonstration against the present dispensation has seen a rather unceremonious end as he has been given no more than a chance at saving face after the thundering promises he made the nation. Government representatives from all political parties have met with the Dr and have agreed to reforms that do not as much concede to his wishes as they do allow for a smooth run up to the elections. They include the dissolution of the National Assembly before March 16, 2013 so that elections can be held within 90 days, taking a detailed look at the composition of the Election Commission of Pakistan, focusing on the enforcement of electoral reforms, finding an honest and impartial caretaker prime minister and withdrawing all cases registered against each other — not quite the booming blow to this government Mr Qadri may have wanted to flaunt. Dr Qadri has accepted these reforms without hesitation because all his calls for political backing by the MQM and the PTI were rejected, the government was not conceding and the number of people supporting him was pitiable compared to the millions he professed. He, essentially, had been backed into a corner and knew his mischief making days were numbered. Sitting in his heated and comfortable container while the people sat on the cold tarmac outside in winter’s freezing cold, the ‘revolutionary’ liked to think he was representing the people and addressing their grievances. Most Pakistanis were not taken in by his rhetoric and bellowing ambition as could be seen by the fact that, in the end, Dr Qadri was standing alone. The government was all too kind to allow him such a clean and fair getaway. The silver lining here is that our political forces have realised the stakes involved in the run up to the general elections and how fragile Pakistan’s first ever democratic transition really is. They have also realised that there are plenty of detractors of democracy here and surprise ‘revolutions’ are not a thing of fiction. Dr Qadri’s role in this entire drama must be questioned. Now that the storm has abated, everything about Mr Qadri’s exploits must be investigated. It is being reported that the Canadian authorities have summoned Mr Qadri to question him about why he has been in Pakistan when he applied for Canadian citizenship on the pretext of seeking asylum from that country. If this is true, the news serves as another blow to the doctor’s credibility. Now that Tahirul Qadri’s little crusade is over, it is extremely important that the government and all political entities do one thing: wake up. No matter who the quack may be, the people will follow him. They are disenchanted, hungry, power- and energy-deprived, jobless and angry. It is time the government faces these real problems. Anomalies like Mr Qadri should be relegated to the dustbin where they belong by the united democratic forces.

Karachi keeps bleeding
This is shocking that the situation in Karachi, the largest city of Pakistan and its commercial capital, continues to deteriorate as law enforcing regime is more or less collapsing to the hilt. The new wave of bloodshed on Thursday saw a Muttahida Qaumi Movement MPA Syed Manzar Imam and eight others being gunned down, falling to target killing, in different districts. The MPA’s driver and two security guards were among them. Although the inept police said the assailants were not identified, the Tehreek-e-Taliban Pakistan claimed the responsibility terming it the first step of the “pledge” it had made to protect the people of Karachi from MQM. After the incident, tensions gripped the city as angry protesters took to streets, resorted to aerial firing and forced shopkeepers to pull down their shutters. At least five vehicles were set afire in different areas of the city and people rushed home to avoid any potential violent backlash. The MQM Coordination Committee announced three days of mourning and asked its supporters to remain peaceful. This is the second shooting of an MQM provincial lawmaker in just over two years in Karachi. The death of MQM MPA Raza Haider, on whose seat Imam was elected to Sindh PA, in an ambush in August 2010 sparked a fierce wave of ethnic and politically-linked violence that killed over hundred people. Karachi, once the city of lights, started bleeding with mafias, backed by political parties, gaining control over land for political dominance of the port city as back as late 1980’s. This violence has now added more characteristics in it as political and ethnic prejudices have also been added to the reasons, notwithstanding the element of terrorism. But no corrective measures have been taken to restore normal life for decades. The city is invariably crippled with every new target killing that forces business being shut and transport withdrawn; no normal socio-economic life is left for about 18 million of its residents. On an average 10 people are dying by assassins bullets on streets every day and yet the government does not seem moved enough to discharge its constitutional duty. Besides, every day passing under these distressing conditions add to the financial loss of no less than Rs5 billion and that too big a blow for the country’s fragile economy. The situation weeks before elections is all the more distressing because polling in this city under the circumstances may pose a problem. The federation imposed governor’s rule in Balchistan for poor law and order conditions and Sindh is no better off either on the same count. Would Syed Qaim Ali Shah would also like see the province treated similarly? His administration has, too, for all practical and moral purposes, lost its justification to govern. The Supreme Court announced in October last year an overarching judgment on the law and order situation and target killings in Karachi and criticized both the federal and Sindh governments for their failure to ensure peaceful economic activity in the city. It termed the “unimaginable brutalities” a result of a turf war aimed at keeping socio-political control over the city. The verdict called for new laws to deal with the menace of land-grabbing, creation of an independent and a de-politicized investigation agency to investigate crimes and setting up of a special cell to deal with illegal immigrants. Deplorably, the Sindh government showed a total indifference to the SC guidelines and allowed the allowed the conditions to remain as frightful as before. Non-implementation of the SC verdict keeps on the residents of the largest city hostage to high uncertainty and extreme fear. The solution of the issue that is eating up the city’s socio-economic and commercial life like a termite is simple yet extremely difficult. If all the political parties in Sindh, whether in government or in opposition, are prepared to boldly plead for an even-handed dealing of the violent question and accept their role in resolving the maddening affair with a strong political will, the solution is easy. If this approach is not accepted, the solution is almost impossible. It is Sindh political leadership alone to decide, and decide immediately, if they want peace or allow the city keep on bleeding. And ruling PPP and MQM have a bigger responsibility; if and when they show willingness, there will remain no conflict, no violence in the largest city of Pakistan.