Daily Times editorial June 12, 2012

‘Support’ from an unexpected quarter The only growth industry in Pakistan, it seems, is conspiracy theory. Rumours and speculations have been swirling in the void since the Chief Justice of Pakistan (CJP) Iftikhar Mohammad Chaudhry’s son, Dr Arsalan Iftikhar, has been dragged into the controversy surrounding alleged cash payments and other benefits from properly tycoon Malik Riaz to Arsalan. Based on speculations about who might be the beneficiary/ies of the scandal, fingers have been pointed at the government and the military. Prime Minister (PM) Yousaf Raza Gilani has attempted to refute such speculations during an interaction with journalists in Lahore on Sunday. He said that no evidence had so far surfaced against Arsalan, therefore there was no justification, as some have done, for asking for the CJP’s resignation on ethical grounds. He firmly denied that the PPP government or the military were beneficiaries of the controversy. His government respects institutions, the PM asserted, and had no score to settle with the judiciary. In answer to a question regarding Rehman Malik’s relationship with Malik Riaz, the PM dismissed it by saying Mr Riaz has good relations with a number of leaders. In reply to another query, he firmly ruled out any chances of the imposition of martial law as there was no room for such acts any longer. The PM could not resist a dig at the CJP by remarking lightly that if for constitutional reasons, the CJP could not hear the case of his own son, he should consider the PM’s son his own and hear his case. He went on to argue that he had been facing similar allegations regarding his sons for four years, whereas the Arsalan case was only four days old. At the other end of the political spectrum, the PML-N’s Chief Minister Punjab Shahbaz Sharif tilted in favour of the CJP, calling what was going on as “deplorable”, and characterising the CJP as the “last hope” against a wholesale takeover of the country by the PPP led by President Asif Zardari. He feels it should be left to the judges of the superior judiciary to decide if there was a conspiracy afoot against the CJP and the judiciary. He pleaded for the whole nation to stand by the judiciary in this hour of trial. The scene will now shift back to the Supreme Court (SC), since Malik Riaz is reported to have returned to the country on Monday, and the SC will restart hearing the cases against Malik Riaz from today. These cases relate to Malik Riaz’s Bahria property empire, whose thousands of victims who have been deprived of their life savings without any recompense, whether in the shape of promised plots or return of their money, are still clamouring for justice. These cases have been overshadowed by the Arsalan scandal, and the alleged link between the benefits to Arsalan and these cases as stated by Malik Riaz, has yet to be proved. Murkier and murkier.

Daily Times Editorial June 11, 2012

The Arsalan affair Chief Justice of Pakistan (CJP) Iftikhar Mohammad Chaudhry’s son, Dr Arsalan Iftikhar, has in a statement submitted in the Supreme Court (SC), strongly refuted any relationship, intimacy or acquaintance with real estate tycoon Malik Riaz, his daughter or son-in-law. The statement is a rebuttal of the allegations by Malik Riaz leaked to the media, that Arsalan had received Rs 400 million from him to influence the cases Malik Riaz faces in the SC, along with other benefits such as travel, accommodation abroad, shopping, etc. Dismissing the allegations as “baseless, frivolous and unfounded”, Arsalan argues that no “cogent and logical evidence” has been submitted to substantiate the accusations, and even the media persons who have been fanning the story admit they have no proof of the matter and therefore their statements should be dismissed as hearsay. If and when any cogent and admissible evidence is presented against him, Arsalan said he would furnish a comprehensive reply. Arsalan has prayed to the court to deal strictly with Malik Riaz according to the law for besmirching his name and dragging him into court. Arsalan stressed that whenever he had travelled abroad, it was always at his own expense. While the two-member bench hearing the case will no doubt take account of Arsalan’s refutation of the charges against him, it will have to wait until the ‘ailing’ Malik Riaz returns to the country and deposes, as he has promised, before the court. Strictly speaking, while the charge of besmirching Arsalan’s repute has weight, it cannot be said that it is Malik Riaz who has dragged Arsalan into court. It was the suo motu notice of the spreading scandal by none other than his father, the honourable CJP, that brought the affair into the legal domain. Initially the CJP seemed inclined to head the bench, attempting justifications by recourse to Islamic history examples, but then it seemed that better sense had prevailed and the CJP appropriately recused himself from the bench. Meanwhile Malik Riaz’s plea to constitute a larger bench to hear the case of immense importance with national level implications has been turned down by the CJP in his order of June 7. Other parties have by now also jumped into the fray. Barrister Zafarullah Khan of the Watan Party has petitioned the SC to issue a red warrant against Malik Riaz in order to bring him back to the country and present him before the court. That petition is still pending, but Malik Riaz’s counsel has stated that the ill Malik Riaz will return soon and depose before the SC. Musharraf’s All Pakistan Muslim League General Secretary Barrister Muhammad Ali Saif wants a commission (‘tis the season for commissions methinks) to be formed with former judges and heads of investigation agencies to probe the allegations against Arsalan. He thinks a probe by the SC would not be within the parameters of justice, implying a lack of confidence in the impartiality of his brother judges in a case involving the CJP’s son. The Pakistan Bar Council has similar views, arguing for the SC to distance itself from the case and hand it over to any investigation agency. These objections and reservations on the matter being dealt with by the SC constitute a vote of no confidence in the impartiality of the SC bench in such a sensitive matter having ramifications for the CJP himself. Whether these reservations are valid or not, and without imputing any partiality to the honourable judges of the bench hearing the case, the argument that since the case involves the CJP’s son, it may be considered too close to the SC for it to be appropriate for the SC itself to conduct investigations and hearings into it, is not without merit. While there are two opinions about the appropriateness of the CJP’s swift response through a suo motu notice of the Arsalan affair, since the matter is sub judice, it would not be in the fitness of things to say more than plead for a thorough, impartial, fair probe. This is critical for the reputation of the CJP, the SC, the entire superior judiciary, and indeed, for the country as a whole.

Daily Times Editorial June 10, 2012

Free and fair elections There are some in Pakistan who are beginning to wonder whether, in the middle of the complex ructions afflicting the polity, the scheduled elections will take place. Although Prime Minister Yousaf Raza Gilani has reiterated that the elections will be held according to schedule, apprehensions are growing. Irrespective of the fate of the elections scheduled to take place by 2013 latest, it is heartening to note that for the present and future electoral process, the Supreme Court (SC) has directed the Election Commission (EC) in a judgement on a petition seeking reduction in elections expenditures to devise a strategy to ensure free and fair elections. The petition was moved by the Workers Party Pakistan. Eight major political parties participated in the proceedings, but the ruling PPP stayed away. The SC has, amongst other things in the 87-page judgement, questioned the first past the post (FPTP) system, which our parliamentary democracy has been based on in conformity with the British system from which our practices are derived. In the SC’s view, the FPTP system, which declares the winner in an electoral contest the candidate who gets the largest number of votes irrespective of the percentage of votes that represents, violates the principle of majority. Taking its cue from a widely accepted practice in many countries that require a run off election between the first and second biggest vote getting candidates in order to determine who, if any of them, can get 50 percent or more of the votes cast in the run off, the SC has suggested to the EC to explore ways and means to introduce appropriate steps such as a run off election in the event that in the first round of voting, no candidate garners 50 percent. Also, the SC would like a column inserted on the ballot paper that offers voters the option of ‘none of the above’ in case they do not wish to vote for any of the listed candidates. The SC would like voting to be declared compulsory, therefore the ‘none of the above’ column would spare voters having to tick any candidate they were less than enthusiastic about. The contentious issue of the preparation/revision of the electoral rolls is dealt with in the judgement. This is an issue that has seen the SC at loggerheads with the EC in recent days on the delays in completing this all-important task. The SC would like this process completed ‘immediately’ through credible and independent agencies, if necessary by going door to door. The SC thinks this task could be expeditiously and transparently performed by inducting the army and the Frontier Corps (FC). Although the consideration of having the necessary manpower for the huge task may underlie the SC’s recommendation to induct the army and the FC, this is likely to raise the hackles of those who recall the role of the military in our history and even the revelations in the Asghar Khan case of behind the scenes manipulation of elections by the military and intelligence agencies. It may be wiser therefore, to seek some other way to complete this task and keep the military/paramilitary out of the picture and confined to their mandated tasks. The SC wants the EC to undertake monitoring of the election expenses of all candidates, including the use of private transport to take voters to the polling stations, the use of ‘parchis’ (notes from the powerful that facilitate candidates and/or voters), and the setting up of candidates’ camps near polling stations (from which they can influence the balloting process). The rules already require the EC to monitor election expenses, but this has been practised more in the breach in our history. The real issue is the creation of an empowered and independent EC that can carry through the sacred task of ensuring the sanctity of the ballot. For that, the behind closed doors talks going on between the major political parties on a new, consensus election commissioner, may hold the key.

Daily Times Editorial June 5, 2012

Troubleshooting in Balochistan Prime Minister (PM) Yousaf Raza Gilani and COAS General Ashfaq Parvez Kayani are in Balochistan on a two day visit, ostensibly as a ‘troubleshooting’ trip. On arrival in Quetta on Sunday, the PM was ‘greeted’ by another sectarian attack in the city, which killed four Shia Hazaras and one policeman, while another policeman was injured. The incident is a very good reflection of the state of affairs in Quetta, let alone the rest of the province. There are two separate issues to be tackled. One, the sectarian mayhem unleashed by the Lashkar-e-Jhangvi against the Shia Hazara community; two, the ongoing Baloch nationalist armed resistance. On the former, it is amazing that despite the plethora of Hazara killings in recent days, no effective measures have been taken to quell the mischief of the terrorist fanatics. Neither has the Hazara community been extended any security, nor has a single sectarian murderer been arrested. It is ironic, therefore, for the PM to ‘order’ the Balochistan government to improve law and order. This too, like so many other exhortations before it (including from the Supreme Court) is likely to disappear into thin air once the PM returns. On the Baloch nationalist armed struggle, the PM has persisted with his blinkered approach to the problem. This approach relies almost exclusively on offering jobs and educational opportunities to the youth of the province, in the hope that this would wean them away from contemplating translating the widespread sympathies of the youth in Balochistan for the insurgents into active participation in resistance activities. The approach is a continuation of the ‘philosophy’ underlying the Aaghaaz-e-Haqooq-e-Balochistan package, which sees the problems of the province in terms almost exclusively of economic underdevelopment and lack of opportunities. While no one can quibble with the good intent behind the package and its successor steps, the whole thrust misses the point. Unless and until the alienated leaders and forces in the mountains or in exile are approached through appropriate intermediaries, and a purely political problem solved through political means and a negotiated settlement (something even the COAS has advocated in the recent high powered meeting on Balochistan in Islamabad), eschewing in the process the resort to military force and the notorious ‘kill and dump’ policy, no amount of jobs or educational opportunities will in and by themselves bring peace and reconciliation to the troubled province. The PM has stated in Quetta that the government intends to talk to the angry Baloch leaders, but he neither explained how this desirable move would come about, nor is there so far any sign that the government has taken any initiative in this regard. It thus remains just talk so far. Governments tend to say only what is favourable to them in situations like the one that confronts Balochistan, and skip the bitter truths. This can only be likened to the parable of the ostrich with his head in the sand. The PM claims that provincial autonomy (through the 18th Amendment) and the ownership of the Baloch people over their resources are settled issues. With due respect, this is stretching the truth to breaking point. And that too at a time when Baloch leaders like Brahmdagh Bugti are saying the time for conferences and talks on Balochistan’s future has come and gone. In these circumstances the tired refrain that all is well in the best of all possible worlds can only act as salt sprinkled on the Baloch people’s wounds. Such salt was liberally used by the IG Frontier Corps the other day when he, in time honoured fashion, pointed the accusatory finger at the ubiquitous ‘foreign hand’ in Balochistan. The PM has now taken up that refrain and characterised it as foreign powers eyeing the resources of the province. Those old enough to have lived through the debacle of 1971 will recall how the genuine grievances of the people of East Pakistan (now Bangladesh) were either ignored or painted as ‘foreign inspired’, with the tragic consequences that flowed from that state of denial. Although the two situations are not exactly alike, Balochistan’s strategic location and potential wealth can tempt some great powers. By adopting a strategy of on the one hand ‘decapitating’ the Baloch intelligentsia through a slow genocide, and on the other offering the sops of jobs and educational opportunities, the government is persuading no one that it has a firm grip on the situation, or even a reasonable chance of success.

Daily Times Editorial June 3, 2012

Budget FY 2013 The fact that an elected government is presenting its fifth budget (implying it has survived almost a full term) is being remarked upon in diverse circles and celebrated in some. However, the celebrations cannot but be mooted when the state of the economy and by extrapolation the state of the citizen is so precarious and painful. The Budget FY 2013 presented by Federal Finance Minister Abdul Hafeez Shaikh, whatever its merits or demerits, received short shrift at the hands of a rowdy and violent set of MNAs from the opposition benches, led first and foremost by the PML-N. Heckling and walkouts may be permitted parliamentary forms of protest, but surely fisticuffs are beyond the pale. The scenes of mayhem from the floor of the house were enough to make any self-respecting Pakistani hang his/her head in shame. Mr Shaikh struggled through his budget speech nevertheless, but reasoned debate was replaced by the opposition with yahoo behaviour. It is worth noting that these opposition parliamentarians, by their example, are not just endorsing yahoo behaviour that is increasingly characteristic of our society, but positively encouraging it. If parliamentarians replace the weapon of language and reason with the ‘language’ of violence and aggression, how can we expect civilised norms from the rest of society? Such ‘role models’ we can very well do without. And what have they wrought in the account of the dignity and respect for parliament itself? Opposition to government policies, decisions and actions cannot transgress the laid down and universally respected norms of parliamentary behaviour. Nawaz Sharif should rein in his ‘hawks’ in the interests of continuity of the democratic process. The total outlay for this year’s budget is Rs 2.96 trillion (up 0.6 percent from Rs 2.94 trillion in FY 2012). The scepticism of the critics about overstated receipts and understated expenditures notwithstanding, gross federal revenues are estimated at Rs 3.234 trillion (up 18.3 percent on FY 2012), which, after enhanced transfers to provinces under the current NFC Award of Rs. 1.459 trillion (up 21.3 percent), leave net federal revenues of Rs 1.775 trillion (up 16.1 percent). That projects a net budget deficit (after deducting a provincial surplus of Rs 0.080 trillion) of Rs 1.105 trillion, representing 4.7 percent of GDP (5.5 percent in FY 2012 plus 1.9 percent consolidation of debt equals 7.4 percent). Sceptics doubt that the government’s past practice and avowed intent to meet the deficit through borrowing will confine it to this relatively acceptable level through the next fiscal year. The major areas of outlay interest, traditionally, are debt servicing (the lion’s share as usual for many years now of Rs 1.141 trillion or 35 percent), defence (Rs 545 billion or 17 percent, to which if Rs 98 billion on account of military pensions camouflaged as civilian expenditures are added, the real figure is Rs 643 billion), and development (Rs 873 billion, of which the PSDP comprises Rs 360 billion, up from last year’s Rs 300 billion). Being an election year, the government has striven hard not to impose any new taxes. It has within the straitened finances of the government attempted to give relief to vulnerable groups, rationalise taxation and duties to encourage businesses, and endorsed a continuation of targeted subsidies for the marginalised in society. Hence, for example, government servants’ pay and pensions have been increased by 20 percent, the government’s flagship Benazir Income Support Programme receives Rs 70 billion (Rs 50 billion last year), concessionary food and other necessities will be provided through the Utility Stores, which are being expanded, and internship and technical training regimes for 100,000 educated unemployed youth will be instituted. The textiles industry receives allocated support in the presence of a major drop in international cotton prices, the pharmaceuticals sector gets a 5 percent reduction of tariffs on 95 raw materials in recognition of its good performance, and subsidies will swallow up Rs 209 billion (of which Rs 135 billion will go to the power sector, representing about 50 percent of the circular debt). Hafeez Shaikh with a rhetorical flourish towards the end of his budget speech asserted that the government will provide as much money as required in order to overcome electricity load shedding, without shedding any light on where these ‘magic’ funds will come from. Sales Tax (ST) has been rationalised at a uniform rate of 16 percent across the board, and federal excise duty abolished on a number of goods, with the promise that this levy will be phased out. The income tax threshold has been increased from Rs 350,000 to 400,000, which will help the salaried class in particular, albeit marginally. Capital Gains Tax has been imposed on sale of real estate. The withholding tax threshold on cash withdrawals from banks has been raised from Rs 25,000 to 50,000 per day. Tax to GDP ratio stood at 9.6 percent in FY 2012, which the government hopes will rise through better enforcement and documentation of the economy measures to 10.3 percent this year. Despite (or perhaps because of) the fact that there are only three million taxpayers in the country, and only 100,000 registered entities under ST, the government has offered relief in the form of reducing the tax slabs to just five (promising thereby a relief of Rs 8 billion to taxpayers), reduction of minimum turnover tax from 1 percent to 0.5 percent, and a declared intent to reduce the presumptive tax regime if not phase it out altogether. As the above analysis shows, the budget has tried hard within the financial constraints to balance straitened finances against the political need to offer relief to whatever extent possible in an election year. As promised by the government, no new taxes have been imposed; tax amnesties and concessions are on offer. Sceptics wonder if this budget will be overtaken by political events during this fiscal year. On that, comment is reserved until further political developments.

Daily Times Editorial June 4, 2012

Hosni Mubarak’s day in court Former Egyptian strongman Hosni Mubarak has been handed down a life sentence along with his former interior minister Habib al-Adly for the killing of 225 protestors and wounding more than 1,800 during the movement for his ouster in January 2011. Six co-accused security commanders were acquitted for lack of evidence. The verdict immediately drew thousands of protestors into the streets. Some of them demanded Mubarak’s execution, others feared weaknesses in the case as reflected finally in the verdict could let Mubarak off on appeal. The verdict comes at an especially fraught time for Egypt, just two weeks before a crucial run-off election for president, in which the Egyptian voters have been left with a Hobson’s choice between the Muslim Brotherhood’s candidate Muhammad Mursi, who came in first in the first round, and second placed former prime minister under Mubarak, Ahmed Shafiq. Critics of the verdict argue that it proves the old order is still in place. The military, which has been in power since the coup of 1952, is still calling the shots. Entrenched in power for decades, the military has acquired a military-industrial-business complex that it will not surrender easily. Apart from fears of the sentence being overturned on appeal, critics also question why the former president has not been held accountable for the years of repression against dissidents, the police state, and corruption. Mubarak’s two sons have been acquitted of corruption charges because of the statute of limitations and Mubarak himself has been acquitted in one corruption case because of lack of evidence. The former president has a great deal to answer for during the 30 years he was in absolute power, courtesy the army and in the aftermath of Sadat’s assassination. The military courts that tried and sentenced thousands of political opponents of the regime in the 1980s and 1990s, the ‘renditions’ in collaboration with US President Bush in the war on terror, the systematic use of torture and rape as instruments for breaking the will of opponents, all these crimes have been left on the shelf and the case against him has been confined to the repression of the ‘Tahrir Square’ protestors. That does not necessarily mean that none of this will come out in the wash eventually. After the political transition to an elected president (most likely to be the front runner from the Muslim Brotherhood), who knows what other accountability processes may kick in? At this point, it may be salutary to revisit the Arab Spring, on which many hopes resided for a new state and society to emerge from the sacrifices of citizens in removing the dictator. It would not be out of place to argue that the ‘Spring’ was overhyped and expectations as to its outcome overly optimistic. In the flush of victory against Mubarak, this heightened sense of expectation, especially given the mood on the street, was understandable. However, what cooler minds were arguing even then was that the entrenched military would not be easy to displace and in fact Mubarak would be sacrificed by it precisely in order to keep its grip on power. As to the movement itself, the liberals and left were inherently coming to political agitation spontaneously and without the backing of a party organisation, unlike the battle hardened Muslim Brotherhood. The first attempts to give the disparate forces of the left-liberals a political identity resulted in splits, reflected also in the first round of the presidential election. It is to be noted that in spite of the left-liberal vote being spilt amongst various candidates, a socialist, Hamdeen Sabahi, still managed to come third. The highly organised and disciplined Muslim Brotherhood, veteran of decades of struggle, open and underground, would always have been a formidable foe, more so in the face of a scattered and divided rival camp of the real movers of the revolution. Does Mubarak’s day in court mean the day of the dictator is over? Conceptually, yes, history has delivered its verdict. However, in real terms and on the ground, the old adage that “He may be a b*****d, but at least he’s our b*****d” still informs the contradictory stances of the great powers, paramount amongst them the US. Only a real people’s revolution that sweeps away the old order completely can satisfy the inherent aspirations of the Arab Spring and masses. Until then, the struggle for a just democratic society continues, with its twists and turns, triumphs and disappointments.

Daily Times Editorial June 2, 2012

State of the economy The Economic Survey 2012 tries to project the good news (what little there is of that) regarding the economy, despite the fact that even Federal Finance Minister Dr Abdul Hafeez Shaikh admits that the government failed to meet its targets almost across the board. Nevertheless, the positive spin he tried to impart to the figures in his press conference on Thursday while presenting the Survey rotated around the argument that in the middle of a global meltdown, low investment (domestic and foreign), natural calamities such as floods for two years running, and the regional (not to mention the domestic) security situation, the economy had performed. GDP grew by 3.7 percent (3.0 percent in 2011), the highest in three years despite having missed the target of 4.0 percent. The Survey claims inflation according to the Consumer Price Index (CPI) was contained to 10.8 percent (13.8 percent in 2011), Wholesale Price Index to 11.2 percent (21 percent last year), and the Sensitive Price Index to 8.5 percent (18 percent last year). This, according to government sources, will make the 12 months target of containing CPI inflation at 12 percent achievable (the Survey covers 10 months of the current fiscal year). Whether citizens are likely to have much faith in these figures, given empirical experience of rising prices, is a moot point. Tax collection rose an unprecedented 25 percent, July-April yielding Rs 1,490 billion (Rs 1,250 billion in 2011), with government confident it will rise another 25 percent next year. The Survey claims government slashed its expenditure by 10 percent, a claim likely to be met with scepticism when the profligate ways of politicians and the ‘borrow and spend’ approach of the government are kept in mind. Government borrowed Rs 2,486 billion (Rs 2,527 billion 2011) through T-bills and PIBs and Rs 1,003 billion from the banking sector. The State Bank Governor the other day has warned of the crowding out of private sector borrowing because of the government’s demands on credit, the implications for investment and the economy being obvious. Most government borrowing is to address the fiscal, trade, current account and balance of payments deficits, all of which have been ballooning (the fiscal deficit has already surpassed the target of 4.0 percent of GDP even without including the power sector expenditures; if these and consolidation of debt are added, the fiscal deficit is an alarming 6.85 percent). Public debt has risen above Rs 12 trillion, with more than Rs 5 trillion being external debt. This represents 58.2 percent of GDP (55.5 percent 2011), which is knocking at the prudent ceiling of 60 percent. Needless to say, an economic paradigm that relies on borrowing, internal and external, to stay afloat is hocking the future of coming generations. The biggest (admitted by Hafeez Shaikh) failure of this government has been in tackling the energy crunch, particularly electricity. Four years of fiddling around with grandiose announcements of plans to overcome load shedding, which has crippled the economy and the life of citizens, have left citizens and business groups angry to the point where they are resorting increasingly to violence against the electricity providers. In an election year, this spells a great deal of political trouble for the incumbents. Manipulation of oil prices to use this as a cash source has been a classic case of cutting off one’s nose to spite one’s face, the revenue generating ‘cash cow’ impacting on inflation across the board. Rising international prices are pounced upon to justify huge increases, falls in international prices (as at present) only evoke token decreases, if any. What government gains in revenue from oil prices, it loses in inflation, economic cost of business rising, etc. Fiscal 2012, if truth be told, has been a bad year. While most targets were missed (moderately encouraging news from agriculture, manufacturing and construction sectors notwithstanding), the key challenges remain exactly where they were. Energy, security, law and order, enabling business environment, all familiar refrains, without any serious quest to address them in sight. Even the most incorrigible optimist would cringe.