May 292008


Not all people will be satisfied with all policies of the government all the time, and ultimately, in a democracy, people have a choice to change it in the next elections. It is part of the political process that the new government will inherit a mixed bag of good and bad programmes from the past regime. However to carry the process of democracy further, the new rulers must not only recognise that they are no longer in the opposition and now represent the country, but they must also realise that finding faults with past governmental actions, entering into blame games and scoring political points in public, particularly by government ministers (and more so when no solutions are put forward) can have dangerous consequences.
It is widely believed, for example, that ex-Finance Minister Ishaq Dar’s accusation that Shaukat Aziz’s government is responsible for “figure fudging”, “ruining economy” and “creating a mess on the economic front” has had the immediate effect of Pakistan’s economic ratings being revised and may have resulted in the recent poor performance of stock markets and drastic fall in rupee value. It certainly has added to the prevailing uncertainty.
What Mr Dar unfortunately forgot while making such statements is that the world will not look at him as member of PML-N only but as the minister in charge of Pakistan’s finances. It may be true that the economic situation in Pakistan is alarming and the macro economic projections need to be revised. But that is not the point. The issue is that as a result of an irresponsible statement there may have been serious repercussions for Pakistan. Instead the role of the government to present and highlight solutions and future strategies which will not only boost confidence of people in the government but energise them to strive towards betterment of the economy. Just like justice is not only to be done but must be seen to be done, the government in power must not only govern but must be seen to govern properly. People have chosen the new government not to settle old scores only but to introduce schemes to stop the decline.
The attention of the media and the public is on the judicial crisis. The latest political situation gives a feeling of “de javu” in as much as there appears to be a fast developing conflict between various institutions of the country. A constitutional package evidently containing more than 62 amendments is ready to be presented and will consume considerable amount of time of the parliament. All this is very well but at the same time the government needs to immediately focus on improving the country’s economic situation and the plight of the people.
Take the worldwide food crisis which have already caused rioting in many countries. Pakistan is no exception and the WFO has issued warnings that nearly 80 million people in Pakistan are at risk of facing food shortage due to rise in prices. Statistics are that food prices have arisen by more than 30 percent in the past year and have diluted the purchasing power of the poor by almost 50 percent. India is a relevant example where milk costs have gone up 11 percent from the last year, edible oil prices have climbed 40 percent. According to the World Bank: “Increase in global wheat prices reached 181 percent over 36 months leading up to February, and the overall global food prices increased by 83 percent.” Indian Economist Thakurta while writing for BBC warns: “Food inflation is bad news for the ruling politicians because the poor in India vote in much larger numbers than the affluent.” Pakistan’s political parties should pay heed to this.
No immediate solution is in sight. According to FAO people will face at least 10 more years of expensive food by which time of course revolutions and rebellions would have taken place in those countries who do not take effective counter measures. Clearly the global food crisis are just as dangerous as terrorism – it is a ticking time bomb indeed the world is witnessing the new side of hunger – urban hunger where food is available on the shelves but no one can afford to purchase it. An uncontrolled food crisis and spiralling prices will surely cripple the poor and marginalised society and create ready breeding grounds for terrorism.
The positive side is that causes of food storage (like hoarding, high energy cost, government subsidiaries to farmers every year in rich nations, increase in production of bio-fuels, inferior distribution process, food politics, soaring fertilising cost, rise in consumption, low rise in farm productivity, less prices for cultivators, poor food storage facilities and huge levels of wastage) are well known and the solutions identified.
To name a few the immediate steps clearly are to check the menace of hoarding. Government is required to set-up an independent task force exclusively in charge of investigating, prosecuting and convicting persons found guilty of manipulation of supply and demand and prices relating to essential items and parliament needs to update the laws to make them more effective. In the long-term the entire data relating to the production and storage of food items should be recompiled. What is also needed are incentive programmes to encourage food production like higher prices for farmers, modernisation of farming facilities at a subsidised rates with an extensive programme for education in farm technology, adequate provisioning for storage, efficient transportation system, better water management, modern irrigation techniques, infrastructure development, increase in agricultural yields by usage of hybrid seeds, ensuring reservoirs of food grain, checking the Afghan trade factor and also diversification of eating habits. Breakthrough in farm technology must of course be accompanied by a breakthrough in government policy.
Another measure necessary for ensuring control of food supplies and food prices is tackling drought. According to UN’s ISDR: “Tackling drought is crucial. Drought creeps so we can overrun it. But this will take a genuine mindset and policy shift towards the ethos that prevention is better than cure and serious political and economic commitment to saving harvests…” Global warming is itself a threat and Pakistan needs to implement its own strategy in collaboration with international agencies.
A serious cause for food shortage is that population is increasing, there is a mass exodus to urban centres and land is becoming scarce. Malthus must be smiling in his grave. He predicted more than 200 years ago that population growth would outstrip food production in course of time. According to UN reports, for last couple of years the world has been consuming more food than that it can produce. Population control and Urban Planning are clearly issues on which we need new government strategies.
The Pakistani public is not insensitive to the needs of the country and realises that economies all over the world are suffering and the solution will be slow and difficult. At the same time they need to be assured that the fundamentals of Pakistan’s economy are certainly not disastrous. Given the situation, what the people are expecting and what they do indeed deserve is for the government to give them a policy for the future and to show them that they are capable of tackling the problem. Simply crying about the past is certainly not enough. Criticising others for capital flight and stagnated growth or falling foreign exchange reserves will not get us anywhere. Government needs to make the necessary projections and show a commitment and to put necessary reforms packages into practice. Nation will feel lost if its rulers do not appear to be focused.
This is the only way that the confidence of the people of Pakistan in their government and that of investors outside will be established and put Pakistan back on the map of progress. Zardari’s remarks recently on TV that mandate given to the new government by the people was to deal with every day economic challenges is a very valid point. Ideological issues are important but so are matters of bread and butter. Ignoring the later at the expense of a former does not make much sense. We need to therefore move forward with sense, sensibility and transparency.
One can look at the positives. Even if the figure of growth is only 6 percent it is a respectable number. Pakistan was a member of the top 15 emerging economies and after BRIC (Brazil, Russia, India and China) Pakistan’s market was being looked at by various investors as a potential. Earnings of banks, telecom, pharmaceutical, oil and food companies is much better this year than it has been for many. Performance of Pakistani stock exchanges over recent years has been envy of many. Acquisition of MCB’s shares by May Bank and entry of Barclays Bank shows investor’s confidence. Tax revenue collection has been streamlined and is business friendly. International finance organisations like IFC, DEG and others are and have shown full faith in Pakistan’s economy. To top it all in spite of the turmoil since beginning of last year, Pakistan’s economy is still intact.
Pakistan has no oil but it has two assets which are unique and precious – its geographical location in the world and abundance of talented human resource. The opportunities for Pakistan are phenomenal. Oil crisis may have a negative impact on many countries but it also means that there are trillions of dollars in the Middle East and other oil producing Islamic countries in surplus waiting to be invested. Pakistan can turn this adversity into an opportunity. Indeed Pakistan and its leaders have considerable respect, clout and respect amongst Islamic countries and being a nuclear power it has a major role to play in the Islamic world. Petro dollars can be used for investment in Pakistan. Similarly, Pakistan can use its location to meet its future energy needs through ventures with Central Asian Republics. There are many other suggestions. However dreams will not turn into reality unless the government gets on with its job. Too much precious time is being wasted. In spite of worldwide hue and cry on the issue of food crisis the Pakistani government has still not given any concrete programme to the people. This gives the impression as if the entire set-up is working on an adhoc and arbitrary basis.
In the end a sorry declaration has been made that the Kalabagh Dam stands shelved for good. Some one should be galvanized into action after reading Mr Majid Nizami’s article published in The Nation on The water bomb. But more of this later.
The writer is an advocate of the Supreme Court of Pakistan

Source: The Nation, 29/5/2008

 Posted by at 6:53 am

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