Failure all around

Posted on June 7, 2011 by Asif Saeed Memon

A version of this article was published in Dawn on June 8, 2011. It was written after the PNS Mehran attacks and before the murder of Syed Saleem Shahzad.

We Pakistanis – even those of us who have become cynical and bitter – tend to bristle when the words ‘failed’ and ‘state’ are placed within the proximity of the word ‘Pakistan’. We froth at the mouth and mutter something about Afghanistan, Somalia, Ethiopia, etc. Yet here we are. United States Special Forces on board US military helicopters entered Pakistani territory and flew to the outskirts of Abbottabad, where they entered a 3 story building housed in a high-walled compound near the Pakistan Military Academy and killed Osama Bin Laden, before taking his body on board one of their helicopters and leaving. All this is supposed to have happened in approximately one hour and forty minutes. Apparently, Mr. Bin Laden had been living right under our noses for years.

Then, barely a few weeks later, armed militants entered PNS Mehran – home to the Pakistan Navy’s aviation wing – in Karachi where they destroyed two state of the art aircraft and then hunkered down in the base for more than fifteen hours fighting off Pakistani military security. About a year and a half ago (October 2009) there was a brazen attack on the General Head Quarters (GHQ) in Rawalpindi, the command center of the Pakistan Army.

There is something about these incidents that is shockingly scary and crushingly numbing at the same time. This reaction is difficult to explain. It is the reaction of someone who has been in denial. I do not mean the denial that our electronic media and their paisa-an-opinion pundits suffer from. The hyperactive reaction coupled with a threadbare grasp on reality from that pillar of our democracy has been true to type. Their conspiracy theories about ‘foreign hands’ and complains regarding compromised sovereignty are missing the point.

No, the reaction that I am experiencing is more complex. I have always believed that the civilian-military relationship in Pakistan has been lopsided; that the development of civilian institutions is hampered by the significant presence of the military in almost all aspects of the state and the economy and that a correction of this imbalance is necessary for the further development of Pakistan.

There is a set of assumptions implicit in such a view. It assumes that the institution that is Pakistan’s security establishment is politically and economically stronger than civilian institutions. But further, deeper down is the assumption that this is because the security establishment is more professional, more organized, with clear goals, more strengths, fewer weaknesses, less fragmented, with clearer chains of command and greater loyalty to the institution. While civilian institutions display none of these properties.

I have no evidence other than the apparent strength of the military to base such perceptions on. But the mind looks for logical reasons for why things are the way they are. Surely an institution that has run a large proportion of the state’s policy mix since 1956 must possess all the qualities one associates with successful organizations. This must explain why civilian institutions have displayed stunted growth, with institutional fragmentation plaguing them, while the military has displayed ever-increasing strength.

Essentially, it is the civilian-democracy apologist’s answer to the question: “so, how come Pakistanis don’t protest in the street when the Army takes over after a decade of civilian rule?”

“Well, the civilians don’t really get full control of the state when they return to power, and they have fragmented interests, and then there is the infighting, and they haven’t really had time and space to develop their institutions … ummm … and the Army is a really strong institution, and they have all this discipline, and a huge budget, and training, and … because of this when the civilians don’t deliver, the public is almost relieved to have the Army back …” Or something to that effect.

For those who dream of complete civilian control over the state (with the military being a proud but subservient arm of that state) this kind of thinking is laced with envy. There is an “if only” sort of melancholy that sits uncomfortably somewhere in the stomach when we are defending blatantly corrupt and inept politicians in arguments with those who think that Pakistan is a bed of roses when a man in khaki occupies the presidency. We choke inwardly when we present these moth-eaten political parties – devoid of thinking and vision, patched together on whim and personal interest – as alternatives. We ask ourselves, “is this the best we can do?”

The increasing frequency of attacks on our military (I mourn for those who lost their lives) and the intelligence failure or complicity that Bin Laden’s death in Abbottabad represents has now made it clear that, as Cyril Almeida put it in these pages recently, the Emperor has no clothes. That institutional strength, the organization, the loyalty to the institution, that chain of command, it is all for naught. Maybe there was a time when the military was a lean and well oiled machine. But the one we’ve seen recently is fat, ponderous and confused. The response to the Bin Laden incident last month and the PNS Mehran attacks recently have been akin to a deer caught in headlights.

Maybe this is because a decade of disproportionate salary increases, plot allotments and BMWs for service chiefs has made the officers of our armed forces too comfortable. Perhaps it is because of the ideological stretch required for rank and filers – raised on Islamic nationalism – having to wage war against Jihadis who they see more as brothers than enemies has caused the institution to snap. Either way, the professionalism and preparedness of our much vaunted military has been tested and found severely lacking.

And this realization has left me queasy. For all my criticism of the military’s pernicious role in politics, I did not wish to ever discover that there was rot within. The ill feeling gets worse when we look around and see institutions and individuals failing to do what they are meant to do and doing things they’re not supposed to. Not only have our civilian institutions failed (whether out of neglect, corruption or incompetence) the military has also failed. It has even failed at achieving the bare minimum that could be expected from them: defending themselves.

A failed state, indeed!

Posted in Pakistan, Policy, Politics | 4 Comments

Missing the policy window

Posted on May 13, 2011 by Asif Saeed Memon

Conspiracy theories about what actually happened on the outskirts of Abbottabad on the 1st of May aside, one of the upshots of those events has been a more open re-examination (at least in some of the English language dailies) of the military’s role in Pakistan’s state. This is partly due to the following:

  1. The military carves out a considerable chunk of the federal budget, dominates security and foreign policy making and extracts a number of economic advantages for itself and its members. It does this, ostensibly, on the grounds that Pakistan has urgent and difficult security concerns (which define all foreign relations) and that the military – being the professional and above-reproach institution that it is – is best-suited for this task.
  2. The military has been caught (at least apparently) either colluding with the most wanted terrorist in the world OR napping at the wheel … twice. First, remaining unaware of the presence of Osama Bin Laden. Second, while US special forces spent at least an hour and half flying to and back from Abbottabad on US military helicopters. In the middle of that trip they are supposed to have conducted a military operation to kill Bin Laden.

There are, of course, some in Pakistan’s ‘opinionati‘ who cannot pull off the Orwellian task of holding both beliefs 1 and 2 in their heads without perishing in an explosion of illogic.

Akbar Zaidi writes, “… the abject and humiliating failures of the military have been well-documented by scholars and historians.

“Most recently, the military’s bluff has been called and it is clear that it has been unable to determine whose interests it serves, what those interests are and, hence, its inability to defend those interests. … The falsity of the notion of the national security state has once again been laid bare.

…

“Pakistan’s state, in fact, is a national insecurity state and has been for some years now. The military’s inability to protect anyone’s interests other than its own narrow ones, in terms of economic and material privileges, underscores this impression.”

Others have argued that this is an ideal opportunity to thoroughly reassess the position of the military within the state’s hierarchy. Ayesha Siddiqa wrote just a week after the incident:

“It is the first time after 1972 that the civilian government has an opportunity to question the unlimited powers of the defence establishment. There is a need to partner with other political actors, especially the PML-N, which may be keen to reign in the armed forces, to create a mechanism for disciplining the institution. The fact is that if the political forces won’t do it now, they may never get another opportunity again.”

Ms. Siddiqa may have hoped against political expediency, in favor of institutional reform. Civilians taking a stand against military dominance for democracy. Political expediency is the name of the game in Pakistan, though.

Cyril Almeida argues that the opportunity for reform is passing us by right now. All the political actors (including the military brass) have read their cards and placed their bets.

“If you happen to believe the civil-military imbalance — the euphemism for the army’s internal predominance — is asphyxiating democracy in Pakistan, and by extension the overall progress of the country, then the Asif Zardari-Gen Kayani era has been yet another missed opportunity for the civilians.”

And with that another opportunity to right the balance of the Pakistani state is likely gone.

You can read Mr. Zaidi’s article here, Ms. Siddiqa’s here and Mr. Almeida’s here.

Posted in Pakistan, Policy, Politics | 2 Comments

Storm in a teacup

Posted on May 8, 2011 by Asif Saeed Memon

A version of this article was published in Dawn on May 8, 2011

I never read ‘Three cups of tea’. Something about its ‘white man stumbles upon brown misery, then sets about correcting it using his all-American heartland gusto, saving one drowning soul at a time’ narrative did not sit well with me. I also found that the optimism generated by the near universal fawning over Mr. Mortenson (the author of Three cups of tea) grated with my pessimism about our education system. I believe, for example, that universal primary school enrollment in Pakistan cannot be achieved within my lifetime (current calculations place my end date somewhere in mid 2049).

I am tired of educators who, explicitly or implicitly, participate in projecting the idea that we can escape the laws of geography, demographics, economics, culture and politics that define and constrain our education system; if only we had a good heart and the will to act (This is the same for any education system, which makes the nauseatingly feted Waiting for superman documentary in the US equally annoying). Needless to say I am experiencing a certain degree of schadenfreude after the recent allegations leveled by 60 Minutes (an investigative program on the American network, CBS) and an online essay by Jon Krakauer at the veracity of claims in Mr. Mortenson’s books and the financial handling of his charity organization, the Central Asia Institute (CAI).

The allegations of wrongdoing can be bunched into two broad sets. The first set alleges that a number of claims included in Mr. Mortenson’s (and his co-author, David Oliver Relin) books, Three cups of tea and Stones into schools, are inaccurate in both their substance and their timeline. The second set alleges that there has been some financial misconduct at the charity institute which he established on the back of the success of his first book (Mr. Krakauer was one of the institute’s benefactors, but stopped donating in 2004).

Predictably, some of the reaction to these allegations has been as exaggerated and over-the-top as the initial acclaim and praise. An analysis of the alleged inaccuracies in the books suggests that the authors contracted timelines in some places and exaggerated events in others to create a more fluent and punchy narrative. Some of the events – like his kidnapping at the hands of some local Taliban – appear to be entirely made up. This, in itself, represents a failure of the public trust, but it would not be the first time it has happened. Senator Hilary Clinton claimed during the 2008 presidential campaign that she had stepped off a helicopter in Bosnia in the 1990’s under a hail of bullets; a claim later resoundingly repudiated. She still became the Secretary of State of her country. How many of us have embellished the facts of our stories when retelling them in order to make them more interesting, funnier or more action filled? I have. It has, as yet, not been proven that the overall arc of Mr. Mortenson’s story is entirely inaccurate. And it does not take away from the efforts of his organization, CAI.

There is still the matter of the alleged financial misconduct at CAI, mainly to do with use of the charity’s funds to purchase copies of Three cups of tea. While this action is aimed at distributing the book (a major source of fundraising) to prospective donors, the authors benefit from the royalties that these additional sales generate. This may mean that the co-authors are profiting from some part of the charitable donations CAI collects. Whether these allegations are proven to be true and are found to be illegal is yet to be determined. The attorney general of Mr. Mortenson’s home state of Montana (where CAI is also based) has announced an inquiry into the finances of the charity. I choose to reserve judgment until the investigations are completed.

True or not, the damage to Mr. Mortenson and CAI may already have been done. International charity is a business where reputation and perceptions of integrity may be the difference between millions of dollars and dying a slow painful death. A funding crisis for CAI could be fatal for the 170 odd schools that it is supposed to be running along the Afghanistan-Pakistan border (I will not go into whether these schools exist or don’t exist; let’s assume, for the moment, that they do).

My problem with the Mortensons of the world is not that they bend the truth to achieve their goal. My problem with them is twofold.  The first is the lack of sustainability. We will learn over the next few weeks and months whether CAI’s schools and other programs are sustainable from a funding perspective. As donations dry up – which they might do – will the schools keep running? Or will we return to a status quo ante? If the latter occurs, will this exercise have been worthwhile? Could the millions of dollars spent so far have been invested on something that would have survived a precipitous decline in funding?

My second problem is the ‘scalability’ of the effort. By which I mean to ask, can CAI’s efforts in education on our northwestern borders be replicated province-wide (in Khyber-Pakhtunkhwa) or nation-wide? A back of the envelope calculation suggests this might be difficult. CAI spent $3.95 million on education in 2009 (according to their financial statements). The website states that they have ‘educated’ (whatever that means) 68,000 children until 2010. Since they do not say how many students were enrolled in a given year let’s assume there were 68,000 children in 2009 (this has the effect of making CAI’s spending look cheaper than it actually would be).

Their expenditure per student would come out to be approximately $58 per year. This may not seem like a lot to a donor, but if we were to provide the same education to all Pakistani primary school going age children (19 million according to UNICEF) we would need (19,000,000 x 58 = 1,102,000,000) $1.1 billion to educate them for one year. That is approximately Rs. 90 billion per year. We are in no position, therefore, to educate our children in the manner in which CAI educates children. All this before we even know whether these schools have actually improved literacy or numeracy and reduced dropout rates, etc.

The rise of Mr. Mortenson and his cause was a feel-good story that had no bearing on Pakistan’s wider educational problems. If his efforts fall and disappear due to his misdemeanors they will represent a drop in the ocean, ripples of which will have been barely felt.

Posted in Education, Pakistan, Policy | 1 Comment

If wishes were horses…

Posted on April 29, 2011 by Asif Saeed Memon

In his column in Dawn, Akbar Zaidi argues against the need for further IMF loans for Pakistan:

At the moment, Pakistan’s foreign exchange reserves, which include previously lent IMF money, are sufficient, and while some international payments need to be made in the near future, adding more loans is certainly not the best way forward for an already heavily indebted country. What Pakistan’s economy needs is some clear thinking about substantial structural reforms based on the consensus of political actors. For this, one doesn’t need the IMF.

And where does Mr. Zaidi think this clear thinking will come from? One source he highlights is the current finance minister, Dr. Abdul Hafeez Shaikh. Soon after, however, he explains the political dimension of economic policymaking in Pakistan and the unwillingness of elected parliamentarians to heed the finance minister’s call for fiscal reform and make the hard decisions. Regardless, he continues to argue:

There is a long to-do list, which the Pakistan government and its finance ministry need to follow through, one by one, preferably through political consensus. One doesn’t require the IMF to advise the Pakistan government that it needs to raise taxes on untaxed incomes to address numerous shortfalls which affect the economy.

I wonder, though, whether the IMF does not play an important role. Not an advisory one – which it does and Mr. Zaidi argues is often unnecessary and sometimes pernicious – but a regulatory one. Is it not useful to a citizen who has to choose between various economically illiterate and fiscally irresponsible options for government to have a global police officer to enforce some discipline?

I am not naive enough to assume that the IMF’s objectives are always in the short-term advantage of the borrowing country, or that their economic models are always tailor-made for local conditions. But  if we were not in a fiscal mess in the first place, we would not need to be seeking help. Beggars cannot be choosers.

Which brings us to Mr. Zaidi’s argument that we have enough foreign exchange reserves to be comfortable without further IMF assistance. We should not be beggars, in other words. We actually have enough. This appears to assume that either our fiscal problems are a one-off (will the circular debt disappear if we pay it off once? Will we not have a fiscal deficit every year for the next few years?), that these reserves are available to us for use for plugging fiscal holes (what happens to the PKR-USD parity if we use up, say, $5billion? $3billion?) or that our government will make the right fiscal and economic decision.

In a democracy, good technocratic advice depends on how politics plays itself out, and economic decisions will always be based on political choices and their consequences. One doesn’t need the IMF to solve Pakistan’s economic problems, one needs competent political leadership.

And if we do not have ‘competent political leadership’?

You can read Mr. Zaidi’s article here.

Posted in Economics, Pakistan, Policy, Politics | Leave a comment

A bitter goodbye to Pakistan’s 2011 World Cup campaign

Posted on March 31, 2011 by Asif Saeed Memon

Before the tournament I had said that I would be happy if Pakistan made it to the semifinal. That within the context – 4 years of turmoil, the loss of our first-choice opening bowlers, the waning pace and bro

Damn you, Younus & Misbah!

ken down body of Shoaib Akhtar, the inexperience of Shahzad, Shafiq, Akmal (the younger), Riaz and Junaid, the nascent captaincy of Afridi and the presence of Calamity Akmal – a semifinal appearance would be a great achievement. Anything beyond that would be garaybee (gravy; bonus).

Perhaps in a few days that rational, pre-tournament fan in me will reappear. Right now it’s only been a day since a 29 run defeat to India in a world cup semifinal and it still stings like hell. Only two things could be worse: if we had lost to them in the final and if they go on and win this thing. I am a Sri Lankan on Saturday.

With a bitter mixture of anger, depression, despondence, embarrassment, exhaustion and sorrow brewing up inside of me, I want to say to all the doe eyed, know-nothing-about-cricket-sudden-experts-around-worldcup-time fans: take your “we fought valiantly”, “it’s just a game, afterall” and “Misbah played bravely till the end” perkiness and shove it where the sun don’t shine.

We lost a game we could have won comfortably yesterday. We were so close. Here is the best analysis of the game in one short paragraph:

“Their two most experienced batsmen, Younus and Misbah, showed that in limited-overs cricket there can be a fine line between “wise old heads” and “doddery old codgers”, combining in a pensionable display of peak-time passivity that harvested just 24 runs from the first 65 balls they faced. This ratcheted up the pressure on their younger team-mates Shafiq and Umar Akmal, who promptly perished trying to force the pace.”

And Andy Zalzman is a comedian. Not an experienced cricket journalist, like Osman Samiuddin, who wrote this claptrap:

“Blaming the batting in any case misses the point. Pakistan are never comfortable chasers and 261, in a World Cup semi-final, at the home of the opposition is an entirely different kind of 261 from the ones they might chase down in a bilateral series in the UAE. The point is, they shouldn’t have been chasing that much in the first place.”

Sorry, Osman, but you and Afridi called this one wrong. Despite Sehwag’s onslaught, despite Gul’s day of horror, despite 4 dropped catches of Sachin (which is a little harsh on Kamran Akmal) we had restricted India to 260 and were 70-2 in the 16th over when Younus Khan walked in. You CAN drop the greatest batsman in the world 3 times and still win. If only our two most experienced batsmen could have kept their heads.

The blame (and blaming is what I’m doing here) lies squarely on the shoulders of Younus Khan and Misbah-ul-Haq. Sure, hafeez played a rash shot to get out. At least he was trying to score runs. Between them Younus and Misbah sucked the life out of Pakistan’s run chase; choking it one painful dot-ball at a time. They have a lot of apologizing to do. It’s true that they dropped Tendulkar (once each) along with Umar Akmal and that prevented a possible Indian collapse. But the apology they owe is for their batting.

They owe an apology to Hafeez, Ajmal and Afridi for wasting their wonderful bowling (30-0-123-3). They owe an apology to Wahab Riaz for wasting the greatest bowling performance of his young career (10-0-46-5), which happen to be the best bowling figures by a Pakistani against India at a world cup. They owe an apology to Shafiq and Umar for not sharing those young men’s urgency at the wicket, for every tight 2 that they turned into a comfortable 1, for every single they took on the 5th ball of an over after playing 4 pre-meditated defensives shots.

Damn you, Younus and Misbah! Damn you!

Posted in Pakistan, South Asia | 3 Comments

And justice for all

Posted on March 23, 2011 by Asif Saeed Memon

A version of this article was published in Dawn on March 24, 2011.

The legal drama of the ‘Raymond Davis killings’ (is that a suitable moniker for the event?) was brought to an end under the Shara’i mechanism of Diyat (blood-money). Funds, from unknown sources, were transferred to the heirs of the two victims, as remuneration in exchange for discontinuing their noble quest for justice. Or was the money transferred to them as justice? Not sure on that one.

(This is completely beside the point that I am trying to make, but is money from unknown sources permitted under the system of Diyat? What if the money came from a child trafficker, a terrorist or … gasp … the Israelis? The horror! Does the Federal Bureau of Revenue get to check the source of funds? If the source is Pakistani, have they paid their taxes? Can blood money be taxed? If not, is this not a convenient way for criminal types to launder money? Think about it.)

Despite the fact that this manner of resolving murder cases is permitted under Islamic law, many of our brothers and sisters are unhappy. They have decided to protest against this slap in the face of our national honour. Their bloodlust … no, demand for justice was left unfulfilled.

While the nation bristled at foreigners being made to brazenly follow our laws, my attention was drawn by a friend to a different aspect of this issue. It is a pervasive injustice that has become apparent during the intense media attention on this case. This injustice affects two different groups of Pakistanis. These are citizens who are being treated unequally; an underclass, created by the current legal system.

Let us examine who these two groups are and how this injustice is perpetrated. The first group is that of low-income murderers. A member of this group is likely to be from a low-income family; his parents are likely to have low levels of education; he is most likely engaged in unskilled labour or is unemployed; and he has killed someone. The only factor distinguishing this person from another murderer, who is able to receive punishment by paying his victim’s family and then going free, is their wealth. Not only is the former less likely to be able to afford a decent lawyer (making a conviction more likely), he is incapable – through no fault of his own – of getting the same quality of sentencing as the latter. Thus, we live in a society where our life outcomes are determined by our wealth. By the coincidence of which part of society we are born into. This is, surely, unbecoming of a just society.

The second group that is gravely wronged by our current system of justice comprises the families of the victims of low-income murders (murders committed by low-income individuals). Through no fault of their own, these families are denied the remuneration that is due them simply because a low-income individual chose to kill their loved ones instead of a wealthy individual. Once again the system offers them no reparations for this gross injustice.

In some ways this is an even more obvious problem. Imagine two adult women who are sisters and grew up together. Let us call them Akbari and Asghari. They are married, with children and live middle-class lives. Asghari is killed one day by a petty druggie looking for money to buy drugs. Akbari is also killed, but her killer is a wealthy businessman who runs her over with his SUV on his way to an important meeting for which he is very late. Both the addict and the entrepreneur are caught and convicted. Asghari’s family receives no reparation as the addict has no money, while Akbari’s family accepts reparations from the businessman. We must ask ourselves: What was the fault of Asghari’s loved ones? Did Asghari choose to be killed by a lowly drug addict instead of a respectable businessman? This truly is an unjust outcome, and directly caused by our adherence to a laissez-faire market mechanism when it comes to death.

Now before we decide we need to find whose fault this is and hang them, let’s take a deep breath. This is nobody’s fault. In public policy circles this is referred to as an unintended consequence: the unexpected result of a well-meaning policy. What we need to do is tweak the policy, such that the poverty gap in murder is reduced. A redistribution of wealth from high-income murders to low-income murders is required.

It is obvious that the only possible solution is a state-run one. This could take the form of a state run corporation that calculates the average worth of an individual life in Pakistan. This number could be linked with inflation. Now that would be a deterrent! The blood-money collection and distribution agency would collect money from killers based on their relative wealth, while guaranteeing each murder victim’s survivors an equal remuneration. Under such a mechanism the businessman and the druggie would be required to pay different amounts of money by the state, which would be deposited into a national blood-money fund. On the other side of the murder ledger, Asghari’s and Akbari’s families would receive equal amounts.

This may not be a perfect solution. Some, like Akbari’s survivors will be considerably worse off in this scenario, as opposed to the status quo. Also, some families are much larger than others. I am sure other observers may have different solutions in mind. What cannot be denied is that Pakistan is an unequal society. Some murders are more equal than others. Some are wealthy murders and others are poor ones. We must not rest until all murders are treated equally.

Posted in Economics, Pakistan, Policy, Religion | 1 Comment

Radical Islam and business in cahoots, apparently

Posted on March 21, 2011 by Asif Saeed Memon

I have always found Nadeem Farooq Paracha’s (known in Pakistan and elsewhere as NFP) writing interesting; both in his earlier incarnation as music critic and his current one as social and political commentator (on his Smoker’s Corner blog for Dawn ). I don’t always agree with what he has to say. Nonetheless, I enjoy reading him. He is, almost always, witty (in a caustic way) and there is a lot to be said for the existence of at least one contrarian among Pakistan’s burgeoning multitude of English language commentators.

He does, however, occasionally go a little too far in his desire to impose a Marxist meta-narrative on Pakistan’s short history. Last weekend he wrote on his blog about the links between Pakistan’s urban, middle-class, trader (convoluted way of referring to an average businessperson) community and the forces of ‘radical Islam’.

“The urban trader class in Muslim countries — usually comprising middle-class urbanites — is a conservative section of society. In Pakistan too it has been one of the most willing recipients of faith-based socio-political trends and phenomena that began sweeping the country in the 1980s. It was the trader class — that included some industrialists, shopkeepers and both big and small businessmen — which was the first in line to support and then fund the political and social instruments that ran concentrated campaigns and drives to Islamise society and politics.”

This is an interesting set of claims. At first glance the first statement (in bold) appears not just plausible, but obvious, if thought of in the context of Pakistan. Take another look, though, and two problems emerge. First, is there a single community of urban, middle-class traders in Pakistan that any substantive set of socio-political views can be attributed to? Sure, they are all against the RGST. But are they all in favour of the Khilafat and Shariah law? I’m not so certain. Definitely not as certain as, Mr. Paracha.

Second, is it meaningful to say that ‘so and so section’ of Pakistani society is conservative? I can say the following: “The urban trader class in Pakistan is willing to pay bribes to get things done.” You might respond, sure that is true, but does that make middle-class business persons any different from anyone else? Most Pakistanis are willing to pay bribes to get things done and  most Pakistanis are conservative.

Moving on, Mr. Paracha argues that this (particularly) conservative business community raced into the arms of Islamic radicals in the 1980′s, and that this was caused by the nationalization and stylized socialism of the previous decade. That they were pushed into financial support for conservative religious organizations by rampant statism, violation of property rights and economic instability.

Now I am no fan of nationalization (see here and here), but I’m not aware of the evidence he bases this claim on. Did a larger number of of middle-class urban Pakistanis start supporting religious organizations (financially) after the 1970′s? Is there verifiable evidence on charitable donations to these organizations from Pakistani business-folk spiking after the nationalizations of 1972 and 1974? I am sure that Mr. Paracha has stated, elsewhere, that funding from foreign sources for these organizations can explain their rise in influence in the 1980′s. In fact he does so in the 6th paragraph of the same article.

Let’s assume that he is right in his assertion that the ‘trader class’ actively supported radical Islamism as some sort of counterweight to the rise of socialism (the burden of proof lies on Mr. Paracha, but I concede I do not have access to the data on charitable donations to comprehensively debunk his thesis). What was their rationale? The business community, worried about their bottom line and economic instability, decided to throw their support behind hardline religious groups such as Sipah-i-Sahaba and Sunni Tehreek in order to … ummm. Go ahead, you try and complete that sentence. I suppose these traders from the early 80′s knew something about radical Islamists that I do not: their penchant for creating stable business environments and their respect for private property.

A more plausible assertion might be that religiously conservative people donate to and absorb the dogma of religiously conservative ideologues because they are prone to such indoctrination, regardless of their profession. It just so happens to be, that many owners of medium and small size businesses in Pakistan tend to be religiously conservative. Just like some Pakistani doctors, students and government employees, many of whom also donate to extremist groups.

I’m not saying there was no support for radical Islamic groups amongst businessmen in the 1980′s. I am stating (a) that this support was not isolated to the business community; (b) many in the business community were opposed to these groups; (c) whatever support came from businessmen, could not have been motivated by business interests, but was probably based on personal beliefs. I say, ‘probably’ because I haven’t conducted a survey of Pakistani businessmen from that period.

At the end of his article Mr. Paracha says:

“… many from this class (especially in Pakistan) have also been funding or backing extremist sectarian and radical Islamist organisations. It is their belief that the triumph of the isolationist mindset of these outfits would leave the trader classes’ economic interests dependant and profitable on factors within their own surroundings and away from international economic maneuvers and rules. It’s like a defeatist idea posing as a faith-driven winning force.”

It may be that many businessmen in Pakistan today, do donate money to extremist outfits. Some of them may also harbor some sort of delusional notions of an ‘Islamic economy’ broken asunder from the international economy. All the same, I have not seen evidence that a majority of Pakistani retailers, wholesalers and other small businessmen are unaware of the the international price of oil and how they’d like it to be lower, or the USD-PKR exchange rate, who do not stock foreign products in their inventory and who do not rely on conventional banks for working capital. If these people are simultaneously looking forward to an isolated Islamic economy then they are fluent in doublethink.

It may well be relevant to ask: why do some (whatever the number) Pakistani businessmen support radical Islamic organizations? Especially when it is clear that their business interests are harmed by these organizations. But to posit that Pakistan’s ‘trader class’ overwhelmingly supports Islamic radicals is overstating the facts, surely.

You can read Mr. Paracha’s piece here.

Posted in Pakistan, Politics, Religion, Society | 6 Comments

Addressing Pakistan’s energy problems

Posted on March 7, 2011 by Asif Saeed Memon

Two pieces in the Express-Tribune address Pakistan’s ongoing energy worries today.

Targeting the gaping hole in energy finance, which has led to the infamous circular debt problem, Shoaib Hamid argues for reducing line losses as opposed to increasing tariffs. He highlights the example of four sets of reforms undertaken by State authorities in Andhra Pradesh, India: (1) reducing electricity theft, (2) reducing corruption within the utility, (3) improving the business processes of the utility and (4) high quality modern metering.

“As a result of the reforms initiated by the Apseb, collections in that state, as per World Bank estimates, rose substantially to 98 per cent and line losses were reduced from 38 per cent to 22 per cent. The state utility was also able to regularise 2.25 million unauthorised connections. Disciplinary action was taken against 218 employees and cases launched against 87 employees. Moreover, more than 150,000 cases were pursued against defaulters compared to 9,200 in the previous 10 years. The results, it can be seen, are both impressive and sustainable. I will only reiterate that in the case of Pakistan, there is no quick fix to the power crisis. … there are lessons to be learnt from our next door neighbors, which show that even short-term measures, taken in earnest, can have positive long-term consequences.”

Mr. Hamid does not clarify, though, whether eliminating line losses will remove the entire gap that currently exists between revenue and costs. It is also unclear how successful such reforms might be in places like Karachi. Witness the violent reaction over the Karachi Electric Supply Corporation’s (KESC) attempted downsizing earlier this year.

Farooq Tirmizi addresses energy supply from what appears to be a provincial/political perspective. He highlights the decades long conflict between the provinces of Sindh and the Punjab over resource sharing (mainly water) and infrastructure investment. He also explains the current gas shortage in the Punjab that is drastically curtailing industrial activity there as well as adversely affecting households.

“… the animus between the two provinces runs deep and is understandable. But when it comes to energy, the tables are turned. Sindh has an overwhelming dominance on energy and Punjab is little more than a bit player in everything except electricity generation. Given this fact, and the fact that Punjab made an extraordinary gesture towards fairness by sacrificing some of its own interests in the National Finance Commission (NFC) Award of 2010 – which distributed tax revenues amongst the provinces – Sindh needs to revisit its role and treat Punjab more fairly on energy.”

Leaving aside the problematic assertion that the 7th NFC award (2009) represents some grand magnanimous gesture on part of the Punjab towards the other provinces (Sindh and Khyber-Pakhtunkhwa also saw a reduction in their relative share of the provincial pie, with only Balochistan’s share increasing), Mr Tirmizi correctly (if only tangentially) highlights the important role that coal is likely to play in the future energy mix for Pakistan.

The KESC announced that it has signed an MoU with a Chinese company for the conversion of two of six boilers at the Bin Qasim Power station from furnace oil based power generation to coal based generation. If successful, this might lead to further conversions of expensive furnace oil based plants to cheaper coal based plants. A large majority of the KESC’s power generation comes from furnace oil.

You can read Mr. Hamid’s article here & Mr. Tirmizi’s here.

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Pakistan and India: divided by commerce

Posted on February 22, 2011 by Asif Saeed Memon

The Washington Post’s Karen Bruilliard presents a brief, but telling, analysis of Pakistan-India trade (or the lack thereof):

“Pakistan and India share language, culture, history and an 1,800-mile border; they are South Asia’s largest economies. What they barely share is trade – officially at least, because of a quasi-blockade that dates from partition in 1947, and all but chokes off commerce under a dizzying web of rules. The hurdles have spurred off-the-books trade, much of it shipped through third parties in such places as Dubai, where products are re-labeled as imports from other lands – journeys that result in 40-to-70-percent markups. Only recently did Pakistan make its first export to India by truck: a load of gypsum rock.

“But economists, business groups and U.S. officials are pushing to loosen at least the most maddening restrictions, and they are hopeful that the two nations’ decision two weeks ago to resume peace talks might help. Free trade, they say, would benefit both India and Pakistan and might help to ease tensions whose gravity is reflected in rival nuclear arsenals. “Economics 101 dictates that countries’ major trading partners should be their neighbors,” said Shuja Nawaz, director of the South Asia Center at the Washington-based Atlantic Council. “To change the dialogue from a zero-sum game to a positive, win-win outcome for both India and Pakistan, you need to start with the low-hanging fruit of opening trade and tourism.”

“For a Pakistani economy in tatters, experts say, a freer flow of goods from India would allow cheaper access to products and raw materials, and could open up India, with its enormous population, to exports of Pakistan products such as cement. Some research indicates that bilateral trade – currently at about $2 billion a year, less than 1 percent of each country’s total trade – could swell 20 to 50 times under more liberal policies. Estimates of illicit trade range from $2 billion to $10 billion a year.”

Read the full article here.

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Pak-Afghan Transit Trade agreement on hold

Posted on February 16, 2011 by Asif Saeed Memon

Implementation of the Afghanistan-Pakistan Transit Trade Agreement (APTTA) is on hold indefinitely. According to an official at the Ministry of Commerce (Pakistan), the hold up is because of a disagreement between the two sides about how to guarantee goods imported by Afghani importers while they are in transit in Pakistan on their way to Afghanistan.

Under the agreement Afghani importers (or their agents) are required to provide financial guarantees covering duties owed against imported goods bound for Afghanistan. These are the duties that would be charged if those goods had been imported by Pakistani importers. They would, however, not be charged if the goods successfully made it into Afghanistan.

This requirement is aimed at discouraging smuggling. According to the commerce ministry official, Pakistan loses millions of dollars in import duties on Afghani imports that end up on the Pakistani market, anyway. The Afghani importers would like to offer financial guarantees drawn on Afghani banks.

The official quoted, Commerce Secretary Zafar Mahmood, continues to talk sense about tracking systems and reducing import duties as a way of reducing the incentive to smuggle goods into the country. It is refreshing to hear an official of the administration talk sense.

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