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Archive for January, 1991

Zarb-e-Momin, Hard realities-III

One should never underestimate one’s opponents, with its preponderant military might. India’s giant status can never be in doubt. In real terms, Indian Armed Forces at the very least outnumber Pakistan’s in a ratio of 3:1 and at places more than 5 to 1. To counter this numerical strength, Pakistani generalship has to be above par, its basic soldiering nothing short of magnificent. The question arises, are we upto the challenges — or like is the norm, all is noise and storm — and we are at most paper tigers?
To bring this series on Zarb-i-Momin to a conclusion, one is led to discuss the real and abstract realities, in isolation and also in relation with each other.


Fair share and national integration

Any partnership is based on the premise that profit or loss should be shared in a fair manner, this is an equation between the investment and the labour one puts into the working of a partnership. The ratio can be based on the concept of investment only or labour only or a combination of both, an equitable formula has to be worked. Weightage has to be given for hard work and enterprise, silent partners have to settle for less. Partners who neither invest capital or hard work cannot expect to have a lifelong annuity. Essentially, nationhood is a partnership between the federating partners, the scale of division of revenues can be worked out from the population or the size and/or the area and/or the revenues earned (and collected) for the Federal treasury, an effective arrangement has to be devised to ensure that each partner remains reasonably satisfied that a due share is being apportioned. Needless to say any partnership involves a give-and-take arrangement, in a federation everyone has to sacrifice something for the sake of the common national good.

Till 1971, then East Pakistan constantly raised the issue of sharing of the revenues of the Government of Pakistan (GoP) on the basis of population, East Pakistan 56%, West Pakistan 44%. The Federal Government argued that due weightage should also be given to (1) collection of revenues (2) peculiarities of each Province and (3) special emphasis on eradicating rural backwardness. Once East Pakistan was separated from the Federation, the Federal Government reverted to divisibility of revenues on the pure population formula, thus apportioning (approximately) for Punjab 58%, Sindh 23%, NWFP 14% and Balochistan 5%, based on the 1981 Census. Imbalances in the apportioning of revenues has led the smaller Provinces to militate against Punjab, the largest recipient in the prevalent concept of sharing. This perception of lack of equitable sharing has caused understandable frustrations, threatening the existence of the Federation. Our leaders have responded to this increasing erosion of national integrity by simply avoiding the holding of any meetings for over a decade to resolve the issue, the premise being that the failure to arrive at consensus would further exacerbate the situation. National Finance Commission (NFC), a suitable device for periodic consensus that the Constitution has devised and entrusted with the task of making recommendations in respect of distribution of revenues between the Federation and the Federating units, became a bugbear confined to the cold storage. Article 160 of the Constitution specifies that NFC is required to be constituted by the President every five years composing of the Federal Finance Minister, the Provincial Finance Ministers and such other persons as may be appointed by the President after consultation with the Governors of the Provinces. The NFC charter involves recommending to the President (1) the distribution of the net proceeds of taxes under the authority of Parliament on (a) income including Corporation tax but not including taxes on income consisting of remunerations paid out of the Federal Consolidated Fund (b) sales and purchases of goods imported, exported, produced, manufactured or consumed (c) on cotton as export duties and duties on such other exports as may be specified by the President (d) excise duties and such other taxes as may be specified by the President. The NFC shall recommend to the President (2) the share to be allocated and paid to each Province, that share, notwithstanding article 78 of the Constitution is not to form part of the Federal Consolidated Fund, being (3) laid before the Senate, National and (4) all Provincial Assemblies, though the President is authorised to (a) make amendments, modifications in the laws relating to the distribution of revenues as he may deem necessary and (b) make Grants-in-aid to the Provinces in need of assistance, such grants being charged to the Federal Consolidated Fund. Article 161 further specified that notwithstanding the premises of Article 78, the net proceeds of the Federal duty of excise on natural gas as well as the royalty levied at well-head and collected by the Federal Government, shall not form part of the Federal Consolidated Fund and shall be paid to the Province in which the well-head of natural gas is situated.


Conducting war and peace

Iraq’s occupation of Kuwait evoked worldwide protests, while the streets were almost unanimous in their condemnation, some Muslim governments, nominally allied to Iraq and/or dependant upon the largesse they receive from Saddam, were sheepish in Iraq’s defence. The Arab monarchies which had bankrolled Iraq in its war against Iran were aghast at Iraq’s brutal and surprising takeover of a friendly and (in the face of Iraq’s preponderant military might) helpless neighbour. Reports of brutalities committed on the Kuwaiti population, the overwhelming majority of whom were expatriate Palestinian, Pakistan, Indian, Bangladeshi, etc, had wide currency and evoked widespread outrage in Pakistan. Our nouveau-Saddam supporters should feel a sense of shame instead of trying to gloss over Saddam Hussain’s actions which effected the lives of hundreds of thousands of Pakistanis, not counting the millions of innocent Iraqis (for whom one genuinely feels sorry). Let Saddam Hussain speak out one word, just one word, on the plight of Kashmiris being crushed under Indian brutality, we can wait till hell freezes over (or India actually fights against Iraq).


War and/or peace?

January 15, 1991 has become an important watershed in the lives of millions of people, if by then Iraq has not relinquished the occupation of Kuwait, the United Nations will be at liberty to use force to vacate the aggression, technically it will mean that war will be at hand. Hostilities may not commence immediately on the stroke of midnight, but a Rubicon (Caesar’s “die is cast”) will have been crossed. We are living presently at the edge of a precipice in an unreal world that does not seem to take into account the far-reaching consequences for the population of the world, in particular the residual after effects that will sweep this region. If by chance, US and Allied Forces bog down and casualties mount, the temptation to utilise tactical nuclear weapons may well force-multiply the consequences.


The Acid Test of Disinvestment

In the face of one of the most far reaching economic decisions of the last two decades, that of allowing commercial banks in the private sector, the Nawaz Sharif Government has simultaneously decided to go whole hog for disinvesting the Nationalised Commercial Banks (NCBs), using Muslim Commercial Bank (MCB) as the guinea pig. Leaders of Third World countries are known to usually try and search for windmills off the beaten track to tilt against, another sorry example of negating an excellent decision by a bad one. The NCBs must compete in a free financial market atmosphere and if they fail to stand the heat, to die a natural death by themselves. Given that Mr. Sartaj Aziz has stated that a comprehensive economic reform package revolutionizing Pakistan’s economy would be announced in 6-8 weeks, this unholy, unseemly rush to offload a commercially viable NCB from public sector aegis becomes more mystifying, to say the least.


The State, Industry and Commerce – III

Among the designated HIT LIST of the Disinvestment Committee for Privatisation are the Trading Corporation of Pakistan (TCP), the Rice Export Corporation of Pakistan (RECP) and the Cotton Export Corporation of Pakistan (CECP). The performance of TCP, except for a brief period under Mr Yousuf as Chairman during 1983-85, has been more or less atrocious, more due to mala fide intervention (or benign negligence) of the Ministry of Commerce (MoC) as opposed to its own shortcomings. RECP and CECP could have performed much better, in the final analysis they have more than served the national purpose. The efficacy of top management and national requirement may have varied directly proportional to the quality of bureaucrats posted in but Pakistan has had a world position for the last two decades in rice and cotton because of the monopoly situation created by RECP and CECP.