Impact of the OBL episode on Pakistan’s economy

A Guest Post by Majyd Aziz

 

The Doomsday theorists and the ignorant anti-American elements in Pakistan have become over-active after the showdown in Abbottabad. Suddenly, they are back into action with their I-told-you-so rabble rousing posture and are trying to galvanize the citizens into a universal condemnation of not only Washington but also the civilian leadership and the military hierarchy of the country. President Obama is being considered as a re-incarnate of the younger Bush while all hell is being let loose on the two well-protected high rollers safely ensconced in Islamabad. The brave among this inciting crowd, all the more fortified by the drawing room analysts and pseudo-democrats, are out to get the scalps of the two Generals who had their tenures extended.

The Formation Commanders made the right noises by warning the White House, in fact, warning the world not to attempt such an adventure again inside Pakistan’s territory. There was the usual talk about ending the drone "culture", reduction in the number of Americans moving all over this nation, and threatening to "review" cooperation between Pentagon and Rawalpindi. Hallelujah. It reminds one of the classic Peter Sellers’ movie The Mouse That Roared. It may play well in maybe Gujranwala.

However, what is missing in all this wailing and blaming is that no one has seriously considered the impact this draconian adventure would have on Pakistan’s tottering economy. Come next fiscal year, there is going to be a fundamental shift in the nation’s budget planning and revenue expectations. The Finance Minister and his jolly band went to IMF with a structured begging bowl but the high priests sitting in the citadel of this institution showed them unusual courtesy by escorting them out the exit door sans any largesse. State Bank of Pakistan big boys have put their hands up in desperation that inflation is still an uncontrolled albatross around the economy. The euphoria in Trade Development Authority of Pakistan and in the minds of less knowledgeable spin-doctors of the ruling party that the export figures would be at all-time high, based on the extraordinary performance of the raw cotton and spinning sector is fizzling out sooner than expected. Half of the spinning mills are switching off their machines because all of a sudden the global demand went poof.

The Finance Ministry officials transformed the Ministry from a being a facilitator to trade and industry by playing their own version of contract bridge by considering themselves as "us" and the businessmen as "they". When there was genuine opposition to the introduction of the macabre Reformed General Sales Tax, some hare-brained official came out with the asinine proposal to get the country’s President to issue three Ordinances as part of the Plan ‘B’ conjured up by minions in Federal Board of Revenue. Lo and behold. The trade and industry representatives got these officials on the carpet and within no time, the Ordinances became stale jokes.

The Federal Budget is due on May 28 and the energetic but elusive Finance Minister will again attempt to teach the Parliamentarians a lesson or two in Economics 101. He has already received a bagful of help from the Presidency who outmaneuvered seasoned politicians and got them to do the tango with him. The budget would be approved but at what cost? Is the country ready to bear the ramifications of what the good Senator Doctor Sheikh has in store for the 175 million denizens? Would it be an ingenious financial vision or would it be dictated orders from IMF and other International Finance Institutions? The answer would be certain when the dust clears on the last Saturday of this month.

Should one recount what is happening on the physical infrastructure scene? Very casually and without fanfare, the nation is now short of 7000 mw of power. Very brazenly, the natural gas people unilaterally decree that gas would not be available for industries and CNG Stations. Those who decide at what cost Pakistanis would get petrol ritualistically but forcefully announce that petrol, diesel, and other petroleum products would now cost an arm and a leg.

The reason why this economic picture is being presented is to bring to the fore the very fact that the OBL episode has come at a very delicate time for Pakistan. The billions spent on the Global War on Terror by this cash-starved nation, the fabulous military victories in eliminating terrorists and extremists from the wild, wild north of the country, and the confidence reposed in the valiant forces by Pakistanis have suddenly burst like a pin pricked balloon. The general feeling was that in spite of the difficulties people faced on the economic front, it was essential and crucial that the Armed Forces were provided with everything to protect and secure the borders and the strategic assets.

This confidence in the Armed Forces must not be allowed to wane. Pakistanis must continue to support and encourage the brave forces. The entire Defense establishment must learn whatever lessons it has to learn and must carry forward. Demagogues and Fifth Columnists must be ignored and should not be given prominence by the electronic and print media.

There should not be despondency and blame-game either within the forces or among the politicians. Dejection at this stage will ruin the country by hampering its economic progress. This is the time for all decision makers to sit with the mainstream businessmen and industrialists to get the country out of this economic quagmire. The Pakistan Business Council attempted to get the politicians to sit with them at the same table and discuss the economic agenda. A noble step, but it did not create any waves because mainstream trade and industry representatives were excluded while third or fourth tier nominees from the political parties came to Serena in Islamabad to make the usual pompous statements. (Incidentally, this writer had proposed such an All-Parties Conference while taking part in a PTV program hosted by Dr Huma Baqai a couple of months back. So, credit to PBC for following it up and spending money to get politicians together).

The impact of the OBL drama would not be as damaging to the country as propagated by many analysts. This is not the time to strain relations with USA and other Western countries. Secretary of State Hillary Clinton has offered a comfort zone to Pakistan. Assurances are coming from Foggy Bottom as well as from Capitol Hill that Pakistan would be supported and that Pakistan needs maximum cooperation from Washington. This is the time for the government and even the Armed Forces to ensure that American financial assistance is not squandered away and also that Pakistan should be provided all facilities to procure smart defense technology to continue its frontline role in exterminating terrorists and extremists from this country. Emphasis should be on foreigners who have created havoc by assuming the role of so-called Jihadis. The Saudi Arabian, Sudanese, Egyptian, and the Chechen Jihadi elements must be declared persona non grata and their native countries be forced to take them back.

The recent positive outcome of the talks between the Interior Secretaries of India and Pakistan in New Delhi and the Commerce Secretaries in Islamabad and Bhurban will open new vistas of economic cooperation not only between the two countries but among all SAARC nations. This is a breath of fresh air and the expectations are positive and beneficial for Pakistan. Furthermore, there is expectation of foreign investment not only from India but also from other countries. This is the time to invite massive investment in minerals exploration, in information technology, and in livestock. These would create jobs and pump up the economy.

Pakistan cannot afford to be strangled by the OBL opera. Once lessons are learnt, once accountability has ended, and once the nation’s skies are really made impregnable, the concentration should be on the economy. The most unpatriotic thing a citizen can do at this juncture is to be persistent in carping about the capability and competency of the Armed Forces while at the same time, all those who are neglecting efforts to rejuvenate the economy are guilty of the same crime too. This is the ideal time to say "YES" to the Founder’s motto: Unity, Faith, and Discipline. By the way, what happened to Pakistan First?

 

Majyd Aziz is a Karachi based Entrepreneur and a senior leader of the business community. He is a former Chairman of SITE Association of Industry, former President of Karachi Chamber of Commerce & Industry, and has held posts on the board various public organizations and companies.

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From The Archives – The Coup In Pakistan

The below article written by Aly B was originally published on November 15, 1999 in the opinion section of Technician

 

Being a citizen of Pakistan, I am always in touch with what is happening in my homeland. The recent coup that toppled the government of Prime Minister Nawaz Sharif catapulted Pakistan to the front page of every major newspaper in the world. However, the event, which might seem like something major and unusual for Americans, came as no surprise to Pakistanis. For us it wasn’t a matter of if but when the Army would move in.

Since Pakistan’s independence in 1947, the Army has always played a major role in the political status quo in the country. Having been under military rule almost half the time, coups are no stranger to Pakistan. Even during civilian governments, especially in the last 10 years, the Army has had the role of kingmakers. Thus, for Pakistanis, military rule is nothing new. In 1988, the rule of the last dictator, General Zia-ul-Haq, ended when his plane was blown up. This brought about a restoration of “democracy” in Pakistan. With a literacy rate of less than 15%, and a tyrannical feudal system, Pakistan has never had a government of the people, by the people and for the people. There are two main political parties in Pakistan, namely the Pakistan Muslim League (PML), headed by Nawaz Sharif and the Pakistan People’s Party (PPP), headed by Benazir Bhutto. After the death of General Zia, Benazir Bhutto became the Prime Minister. However, she, along with her spouse Asif Zardari, used this term to steal from the coffers and to hoard cash abroad in Swiss Banks. Then, after her government was sacked by the President, Nawaz Sharif had his shot at screwing up the Pakistani economy and to build up his industrial empire. Once more, Bhutto came back in power after Sharif got dismissed for corruption, and instead of learning from her past mistakes continued to steer Pakistan on its course to bankruptcy. Once more, she was sacked on charges of corruption. This brought Sharif back into power again.

This time round, Sharif had a huge majority in the parliament and used this power to strip the President of his powers to dismiss governments, to humble the judiciary and to crack down on the press. His mismanagement of the economy and hoarding of personal wealth soon led to conditions ripe for a military takeover. In December 1998, Sharif started working on destroying the last remaining institution that had some integrity left. Due to this conflict, the then Chief of Army Staff (COAS), General Jehangir Karamat resigned from his position and Sharif picked General Pervez Musharraf to be the new COAS. In appointing Musharraf, Sharif bypassed the senior generals to ensure he would have someone who would remain loyal to him. However, when he began to play with the integrity of the army again, Musharraf quickly moved in his troops and toppled over the government. In order to legalize his move, Musharraf declared a state of emergency and suspended the constitution. However, he was careful to point out that this was not Martial Law and that the constitution had been put in abeyance temporarily.

This coup was widely criticized by the Western governments. The United States immediately called for a restoration of democracy threatening Pakistan with the usual sanctions, which incidentally were already in effect since Pakistan blasted its way into the nuclear club last summer. This call for restoration of democracy had an ulterior motive for the US government. Musharraf was a wild card for the US since he was less likely to be influenced by threats than a civilian government would have been. Also there was no assurance that Musharraf wouldn’t begin selling nuclear technology to Pakistan’s neighbors, Iran, and Afghanistan. Thus, it was in the best interests of the superiority of US to call for a restoration of democracy. However, following this initial criticism, the US has largely ignored the situation in Pakistan. The reason for this can be found in the statement of Milton Bearden, the former CIA chief in Sudan and Pakistan, to a sub-committee of the Senate Foreign Relations committee for South Asia.

“General Pervez Musharraf is a member of the last generation of Pakistani army officers who remember the military partnerships of the past with the US. He was trained at Fort Bragg and was an early member of the elite 19th Baloch Regiment, the Pakistani SSG, that trained jointly with US army special forces a decade ago. If we choose to engage Pakistan, even cautiously, Musharraf might be able to guide elements within Pakistani society away from the dangerous, fundamentalist path so many seem to be taking out of desperation.”

In other words, Musharraf is one of ours and we can utilize him to reestablish our control of the region again. Indeed, if the US is to curb Pakistan from siding with the more extremist countries out there, it has to maintain its hold over the country. Hence, the plea from Bearden to ease up on Pakistan. Cutting off aid to Pakistan would be like stomping on the fingers of someone hanging on the edge of a cliff.

For Pakistan, Musharraf may just be what the doctor ordered. A country that is rife with corruption and on the edge of bankruptcy, Pakistan needs some drastic measures to get it back on track. Doing this means purging the political parties from corrupt elements, taking measures to stabilize the economy and cleaning up the mess that has been left by the last few governments. Indeed the steps he has taken so far seem to be in the best interest of the country. Mr. Majyd Aziz, the chairman of the SITE Association of Industry (SITE is the largest Industrial Estate in Pakistan), endorsed Musharraf’s choice for the new finance chief, saying that he finds Mr. Shaukat Aziz (until recently a director of CitiBank) “a well respected person, who is not an armchair theorist, but someone who knows about economics and the fundamentals of business hands down. He is well known in the Western world for his business acumen and, if given a free hand, I believe he can deliver the goods.” On the new Foreign Minister, Mr. Abdus Sattar, he added: “He is a hawk, well experienced and an expert on nuclear matters. Being an ex-bureaucrat, he knows how to present his country’s views and will be able to project the country’s foreign policy with conviction and confidence.” (Source: Business Line, an Indian Financial Daily).

An editorial in the Dawn, a daily newspaper in Pakistan, expressed its confidence in the actions of the new Chief Executive of Pakistan but added a note of caution, by urging the military regime not to forget that “prolonged deviations from the democratic path have invariably led to more problems than have been solved. All the military regimes proved disastrous for Pakistan. The present military rulers must guard against the dangers of moving in the same direction.”

A Symphony of Misery

It is said that Emperor Nero fiddled while Rome burnt. The phrase ‘’Let them eat cake” is attributed to Queen Marie Antoinette, purported to be said at the peak of a bread crisis in post-revolution France. Whether these alleged incidents are true or not is a matter of debate for historians. We can only discuss that which is here, that which is now.

As the common man lines up outside stores in the clamor for sugar, the backdrop is that of multiple suicide bombings per week. Markets, mosques, hotels, schools and colleges all are no longer sacred grounds. Targets vary from the military to foreigners to innocent school children. The army is fighting a war in the North against the Taliban. And amidst it all, where are our esteemed leaders? They are sitting in the parliament debating an issue of extreme importance: the National Reconciliation Ordinance (NRO).

“If approved, the ordinance will tarnish the country’s image,” warned Nawaz Sharif

(Though the breaking news from late last night is that El-Presidente sat with Maulana Diesel and Dr Farooq Sattar and decided to not present NRO to the parliament)

As the fiddlers play a mighty tune in the halls of power, life outside continues for the common man. Meanwhile in the comforts of his chambers, the hero of the downtrodden, the commander of the black coats, the champion of the masses strums a different tune on his guitar.

“You will have to sell sugar at Rs 40 per kilogram until the submission of the report by the proposed commission,” said the chief justice

  I don’t know much about the Chief Justice’s schooling but of one thing I am sure: he didn’t study economics or business studies. How in the name of all that is holy does the CJ expect any trader to sell at Rs 40, something that is being supplied from the source at Rs 57 or so? In all his wisdom, the Chief Justice managed to make sugar scarce in the market. So much that it is now a black market item and prices can range from Rs 80 to 120 depending on the area. Senor Chaudhry in his uneducated attempt to alleviate the suffering of his people, has left a bitter taste in the mouth for many.

In the meantime we were blessed last week by a visit of the emissary of his Royal Highness, King Obama the First. Ms Clinton swept in prior to our first handout under the Kerry-Lugar bill to make sure we were thankful for the bone our masters threw our way. The fact that it came with a new leash is of course a whole different story. And the honorable lady, ignoring the countless lives that Pakistan has laid down in the fight America started, smacked us in the face with a taunt.

“Al-Qaida has had safe haven in Pakistan since 2002,” Clinton told senior newspaper editors in the country’s cultural capital, Lahore.

“I find it hard to believe that nobody in your government knows where they are and couldn’t get them if they really wanted to,” she added.

Oh yeah. We love this game of hide and seek. Of course we know where Bin Laden is. We just love to see our people blown away (147 lost their lives in the fireworks show in Peshawar arranged for Lady Clinton’s visit). And the offensive in the North is just target practice for our military to keep them happy and well oiled. Why a shoe didn’t come flying towards Lady Clinton is a perplexing mystery.

As the orchestra continues to play this grand symphony, outside the grand halls of eliteness, another morning has dawned for the common man. A morning filled with the worries of spiraling inflation, the fear of sending kids to school, and a cup of tea with no sugar.