Showing posts from 2014

Proposal for a High Level Commission for Understanding Extremism and terrorism

High Level Commission on Understanding the roots of fundamentalism and Terrorism
Terrorism has been growing over the last decade or more and has now with the Peshawar incident reached levels where there is a broad consensus that it represents an existential threat to Pakistan. The roots of terrorism largely lie in growing fundamentalism in society.Over the years, Madrassas have mushroomed, sectarianism has increased, and radical mullahs have appeared on the pulpit as well as the media to shift the national discourse increasingly toward a narrower definition of Pakistan and Islam.
Pakistan’s centrality to global and regional conflicts has also fueled fundamentalism, involved the country to the war on terror and weakened the state. Continued aid and oil dependence too has on occasion forced Pakistan to align itself with radial views on Islam.
Meanwhile, political instability, weak governments and long standing fiscal difficulties have weakened state capacity to the point that its monopoly…

The Maulvi is a bureaucrat; Why Treat him Differently?

If a system such as this is developed, it will soon fall in sync with the aspirations of us ordinary Muslims who find no incompatibility between our faith and the modern world.

If the government is serious about eradicating fundamentalism, it must give incentive to the maulvi.

This is how it works. For the last four or five decades, global and local forces have offered all manner of incentives to the maulvi to develop a radical and fundamentalist version of Islam. Now if we want the maulvi to change, a new system of incentives has to be developed.

The government is regulating every market and profession except the mosque and the maulvi. The maulvi continues to operate freely and frequently not in the interest of the public. The possibility of a foreign hand manipulating the maulvi is always under popular consideration. Fundamentalism has been fuelled mainly because this whole mosque-maulvi enterprise is being led by the unenlightened and they are easy to manipulate by forces that see…

Understanding the APC

So we had an APC in Peshawar to deal with the terrible tragedy of the school attack. And by the commentary following the APC it was largely successful especially for the incumbent government. Nawaz Sharif who has not looked like a Prime Minister for months now especially after the Dharna looked quite content and Prime Ministerial.
“The refrain of Parliament is the forum for dealing with state affairs” used often in the Dharna was forgotten and the APC was used to get Imran Khan into a room and use that occasion to develop the image of a “Prime Minister in charge.” Why not Parliament now?
Who was invited and why? Do they have security clearance? How were they chosen?The photograph of the APC shows that these questions were not clearly considered. It was left up to parties and indeed the clever people to wheedle their way in to photo ops to be seated at the table.
How was the meeting conducted? What kind of discussion took place? Was their a briefing by the Interior Ministry, the A…

End Austerity Policy

Our macroeconomic policy stance is and has been seriously wrong for a long time. Time we seriously reviewed it.
We have been chasing the chimera of fiscal adjustment most unthinkingly. In the bargain we have killed growth, governance, public service delivery and perhaps even the state. Let us see how?

Consider an economy where economic growth has slowed down and large fiscal deficits have led to a growing debt stock and balance of payments difficulties.  No doubt such an economy needs adjustment. The question is how?

Several options are available.

The best approach is to address the fundamental causes that have caused the slowdown in the economy. Often the source of the economic difficulties is deep-seated structural issues such as a bloated government based on poor expenditure choices and a poorly developed mismanaged public sector enterprise sector, poor market regulation, low quality of governance and regulation that drives up the cost of doing business, and several legal rigidit…

Interview on economy with Amir Suhail.

Would you invest here?

Whether there is a Dharna, a flood, or a leaky Fawcett, ‘analysts’ are quick to point out economic consequences. When the flood of 2010 happened, the FM would sing this story of how Pakistan has suffered and the donors loved it. Their doleful expressions and our FMs heartbreaking story (meant to cover our policy failures) outdid Hollywood pathos in real time. Some donors actually pushed us toward the hyperbolic as their business thrives on country misery. Of course all the government wanted was more money to alleviate the pressure of hard policy decisions. Now again we are counting the economic impact of Dharna ranging from 300 to 600 billion. Again all manner of hyperbole is being used to estimate this cost. With Nominal GDP at about RS.25 trillion, output per day is about RS 68 billion. Recent political shenanigans have lasted about 20 days. If the wole country stopped working for 20 days the total cost would be about Rs 1.3 trillion. Now think about it a few thousand people holding …

On saving democracy and Dharnas

Save Democracy! Save the Constitution!

The 2 Dharnas with all their dramas have generated a deep division in the Pakistan media and perhaps even society. One group (comprising of a strange amalgam of older left liberal activists, NGOs and the old guard politicians) continued to see the invisible hand (which never revealed itself) of the army and a potential coup that has not happened till the time of this writing. Another group (another strange concoction of some youth, TUQ followers, and some media celebrities) chased a confused idealistic vision of Naya Pakistan free of corruption and maladministration.

Unfortunately, the debate really did not get beyond name-calling, conspiracy-searching and crude personalized invective. Dharna crowd could not clearly articulate a vision that grabbed the population at large and overplayed their hand hobbled by incredible ultimatums and outrageous ‘Cromwellian’ demands to wind up parliament.

The ‘save democracy’ crowd on the other hand refused to…

Understanding Growth and Development

Understanding Growth and Development Fundamentally what has preoccupied most of economic thinking over the centuries has been the question “how can living-standards be improved for most of humanity”. Answers have varied but the quest remains the same. In some sense this has been an eternal struggle for mankind. Most religions have been based on giving us order so that human welfare can be maximized. Utopian philosophers have also developed visions on how to organize society so that people can live better. This very human quest also fires up debates and people tend to be vehement in defending their version of utopia or faith without even feeling that they are merely preaching. Everyone seems to know how people’s lot can improve if only their prescription were followed. The development community has also fallen prey to this prescriptive approach.  Experts pretend to have solutions which if followed will lead to riches not only created but well distributed among the citizens of a country. We…

Marching to the Tune of Defunct Economists

Lord Keynes had famously said that “Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist” Pakistan offers the best illustration of Keynes’s statement. Here we are still suffering from S M Akhtar even though most kids don’t even know who he was. If you know this name you are probably old. I remember I could never read that book called Economic of Pakistan by S M Akhtar. It was like memorizing the economic survey and a plan both of which are unreadable documents. The trick was to memorize numbers and throw them back at the examiner. And you also had to kind of compartmentalize your mind. Whatever you learnt of real economics—theory and empirics—you kept separate from the economics of Pakistan.   Pakistan economics is still recovering from the Akhtar. And it is never more apparent than at budget time. People treat the numbers of the economy with the same sanctity that we treated them when taking our BA exam. R…

Dumping on Technocrats!

Pakistan society at all levels has a very uneasy relationship with technocrats. The common refrain is, “we want ‘doers’ and not ‘thinkers’. The implication being that we are a ’doing’ and not a ‘thinking’ people. I confess, I have no idea what this ‘doing’ is that we take pride in? What wonders have we created in our country to allow us to take such pride in our ‘doing’? In the same vein, we keep looking for ‘practical solutions’ not theoretical. Anyone who says something that we do not like is labeled ‘impractical’. And please do review where our ‘practicality’ has got us? Invariably, column-writers, conference participants, TV anchors find some way to point to the flaws of what we call technocrats. There is a deep distrust of them? Who are these technocrats? It is a loose term that we use to lump all semi-well clad, reasonably well-read people who are outside the government. I have often tried to find out what is the difference between a professional, a researcher, a writer, a professo…

The Problem with Aid

The aid establishment has grown on the basis of 2 assumptions
1. That there is a capital shortage in poor countries and
2.  That these countries lack the ability to make policy either because of knowledge or information shortfalls.

The world has changed and these 2 assumptions are now untenable. Capital markets are flush with cash and they are eager to push it on to poor countries. The internet and globalization has made knowledge easily accessible to all. Most countries now have all manner of expertise. They are all exporting experts to the west.

Despite these developments aid continues to grow. Financial flows are small. Now aid establishment is retailing policy advice, capacity building and technical assistance.

While reports and consultants are surrounding poor country policymakers making them feel good, talent from those countries is being released to do outstanding work in the west. Yet their governments would rather have aid than bring back talent. And aid seems to be set to f…

Privatization or Fire Sale (with Shahid Katdar)

With Shahid Kardar

Happy days have returned. The privatisation process has been resumed in earnest. So goes Islamabad’s self-congratulatory declaration on the Rs38 billion raised from the sale of its 20 per cent stake in UBL. The authors of this article, who probably have been the strongest proponents of the free market in recent decades and have generally pushed for a more market-based open economy, should then be equally happy. We, however, feel that privatisation, done wrongly, can have perverse results. To this end, we refer to this deal to illustrate the several questions that should be widely debated so as to inform the government’s privatisation policy.

As mentioned above, we have long advocated the adoption of a more deregulated, open, market-based economy. Privatisation is but one step in that direction.

Most public policy analysts would agree with the following principles of privatisation:
a) The divestment should improve the efficiency and profitability of the operations o…

On the hundreds of columns yelling "please state kill terrorists!"

I for one feel that these columns lamenting terrorism and asking for state to wake up and fight are overdone and repetitious. Allow me to raise some questions that all of us need to face. 

1.  Are we only getting views of elite columnists? Do the ordinary people agree?

2. Is the state that has been used by elite for predation, capable of the task? 

3. Are these columnists concerned only with the unreformed state doing battle or would they agree that without wholesale reform to rebuild state and social contract this war cannot be won?

4. Where were these thinkers when the rent seeking, predatory state preyed upon the poor and the disadvantaged? Eg. Land acquisition of poor farmers to build housing colonies and industrial estates. When their schools/universities stripped. 

5. Was the state not used mainly for elite rent seeking for decades? Did that not leave the poor searching for solutions through informal markets which we love to call "undocumented"? Did that not provide space f…

Is the budget a law?

Is the budget a law?

Then why is it violated so easily?

When the budget is passed by parliament it is a law that lays out the expenditure limits and where expenditure is to be made. It also passes a revenue and financing plan.

Over the years we have seen how easy it is to violate the this law.  Expenditures are always turn out to be larger than envisaged in the law. Most of the sectoral expenditures made turn out turn out to be contrary to the law. In particular, realized development expenditures are often less than in the law.

Revenues are always less than in the law but what is worse, some of the decrease happens because the FM and the ECC hand out tax exemptions as politics or other considerations demand. Article 77 says Parliament has the power to tax and the tax law enunciates taxes that should prevail by law.  Yet MOF is able to violate the constitution and the law with ease. Unfortunately, Parliament is too unconcerned or unaware of its responsibility.

The ECC meets every so o…