Archive for March, 1994
On March 22, 1994, the State Bank of Pakistan (SBP) took significant action to restore the credibility of the Pakistani banking system by removing the top management of Mehran Bank and replacing them with an SBP-appointed Chief Executive. At the same time, FIA arrested the real owner of the Bank, Yunus Habib. To support the case against this gentleman, the Governor SBP laid out the findings of a Committee headed by a Deputy Governor of the Bank, viz. (1) Mehran Bank had been repeatedly violating the statutory liquidity requirement by failing to maintain the liquid assets as provided under Section 29 of the Banking Companies Ordinance 1962, (2) Mehran Bank had been extending loans and advances far in excess of the credit limit set by SBP in clear violation of SBP directions, (3) Mehran Bank had been issuing false certificates in various areas, (4) the management in clear violation of commitments, had given liberal export refinance to defaulters, and (5) the Mehran Bank has committed a breach of trust by not depositing rupee equivalent of US$ 36.7 million (Rs.1.1 billion) to the SBP against the sale of Dollar Bearer Certificate (DBCs) within the stipulated time frame.
On Feb 1, 1994 in an article in THE NATION entitled “DETERIORATION OF FINANCIAL INSTITUTIONS” we wrote that, “The overall environment is one of lack of accountability. In this wild-west atmosphere financial cowboys ran riot. One esteemed gentleman as Provincial Chief of a major NCB advanced hundreds of millions of rupees to fake companies owned by his associates. When this was discovered and he was removed from office, he twice made a comeback on the strength of pressure from authoritative quarters. Instead of being brought to trial he was “permitted” to “honourably” resign. Subsequently he was given permission to open a private bank by the Nawaz Sharif Government, to the credit of SBP they refused to let him become either Chief Executive or Chief Operating Officer, this restriction being made on the basis of the SBP reference to his original bank. However, it is widely rumoured that he is on his way back into the financial corridors of one of the remaining NCBs, this is certainly not on the basis of his reputation but on other “considerations”. He symbolises a pattern of survival manifest in all those engaged in malfeasance, these men are good for conducting financial mayhem in all political seasons”, unquote. Continuing to record the saga of this gentleman in an article entitled “Money and Power”, in THE NATION on Feb 15, 1994, to quote “With bureaucracy letting control slip somewhat to some politicians, a new class of senior banking executives ran riot in the wholesale plunder of the banking system in collaboration with them. If any non-governmental organisation (NGO) with investigative experience is given a mandate (and an incentive as bounty, say 10% of the plundered total they manage to locate), Pakistan’s financial coffers can be refilled dramatically. Excellent data may also become available to the Income Tax and Wealth Authorities e.g. the gentleman who plundered over Rs.4000 million from the banking system. The present modus operandi has become so blatant that people of known dishonesty are increasingly put into control of some financial institutions with impunity, their lack of credibility and reputation makes them insecure and thus totally dependent on their masters for their continued existence, a solid insurance for their continued loyalty. Even the last bastion of financial integrity in the country, the universally esteemed State Bank of Pakistan is now under attack”, unquote. While one must not condemn a man without giving him a chance to have his say in court, the fact of the matter remains that Yunus Habib’s financial misdemeanours were widely known throughout the Pakistani banking system. How ISI’s foreign exchange funds came to be parked in Mehran Bank is another story that one may not press for media disclosure in the national interest but why was Mehran Bank reluctant to part with the ISI’s money and where did it get the courage to hold such powerful institution as the ISI ransom? Enough smoke exists to focus on the source of the fire in a closed-door enquiry.
One of the lasting lessons of World War II was that modern warfare can only be waged by an integrated Defence Command. Germany’s early success in the war was due to a centralized decision-making rather than a combined command structure. While the German Navy performed admirably thereafter in pursuing the war aims by making the Atlantic dangerous for crossings and thus strangulating Britain materially, the Luftwaffe frittered away its resources in a decisive swing away from its prime mission of destroying Britain’s air machine to the more horrific (and psychological) method of attacking civilian targets and demoralizing the population, particularly London. Even while Churchill mourned the loss of lives and property of Londoners, he breathed a sigh of relief that the Royal Air Force, brought to its knees, was being spared to fight another day. In contrast, by the end of the war, the Allies had a totally integrated Defence Command structure, symbolized on the western front by General Eisenhower as Supreme Commander of all Allied Forces (or Supreme Headquarters Allied Expeditionary Force (SHAEF) as it was known). In the Eastern Sector, despite his differences with the US Navy, which had been given paramount power for warfare in the Pacific, once Naval superiority had been achieved, General Douglas Mac Arthur was the Czar of all military operations being conducted to defeat Japan.
Korea, Vietnam, Falkland Islands and more recently the Gulf War are all examples of the dire necessity of a coordinated command structure. Pakistan seems to have half-learnt these lessons, in theory rather than actual practice. During the 70s, the Joint Chiefs of Staffs Committee (JCSC) was created, incidentally more for political reasons to cut down the Army Commander’s nuisance value than any great belief in military philosophy. Almost 20 years later, it remains an ineffective instrument of use, an impotent white elephant that has all the ingredients for performing admirably except the authority to do so. All three Services have developed better knowledge of each other over the years but the coordination and cohesiveness necessary for conducting modern wars is lacking.
The germs of the whole range of present day crisis were really laid about 500 days ago with the failure of Ms Benazir’s first Long March in November 1992, the facts thereafter being so well-known that it serves useful purpose in referring to the salient features only. That was the symbolic high watermark from where we have been reduced to the dire straits that we find ourselves today. It would be macabre humour to put it down to poetic justice that Ms Benazir’s government has to face the present travails affecting the country in the sense that “those who sow the wind shall reap the whirlwind”. However, Nawaz Sharif’s government must also take its share of blame, having dispersed the Long Marchers Mian Nawaz Sharif did not take heed of the warning signals and made only half-hearted moves for rapprochement with the then Opposition. As this scribe wrote in THE NATION in November 1992, he chose to become like “the wind which cannot read”. While it is true that one must negotiate from a position of strength, once our leaders feel omnipotent their penchant is to shun negotiations. Ms Benazir does not seem to have learnt this lesson. How wise were Rome’s leaders who would place a man at Caesar’s shoulders even while he was triumphantly basking in the accolades of a hero-worshipping crowd, to repeatedly intone, “Remember, thou art mortal”!
On the eve of our 38th Republic Day, most of the wide range of problems we are facing have come to a head in reaching crisis proportions. The foundations of our economic woes were laid by the artificial limbo created by GIK to perpetuate his own rule, he held the nation hostage to his own ambitions. Till November 1992, Pakistan was moving pell mell towards economic emancipation, the flood devastation of Sept-Oct 92 and certain enthusiastic but questionable schemes of the Mian Nawaz Sharif Regime notwithstanding. The death of then COAS, Gen Asif Nawaz, was the first precursor of things to come. In short, by April 1993, the economic gains of the past two years had been brought to a jarring halt. The worsening political climate dampened, the boom climate necessary to attract the continued inflow of the massive input of foreign investment that would keep the economic locomotive humming. There was a virtual hiatus till the Moeen Qureshi Caretaker Administration took over but the Caretaker Government was hamstrung by the limited period of their reign and their non-elected status. The seeds of their non-success, if not failure lay in the public perception that their rule was temporary. Even then, one must commend Moeen Qureshi for a number of initiatives, marred only by his Administration’s studied tilt for the PPP in an election which was to have been played on neutral ground. In an holier-than-thou stance, then acting President Wasim Sajjad did nothing to ensure that the playing field remained even for his party. However, this underdog status suited Mian Nawaz Sharif politically, who by the end of the election campaign had become the first political person in more than two decades to not only stem the PPP floodwaters but give the populace of Pakistan the first genuine political alternative to the Bhuttos, late father, daughter and (now) Prodigal Son.
PM Ms Benazir Bhutto has recently offered unconditional cooperation to the Opposition provided they agree to give up confrontational politics. She seemed to be generally mystified as to what the Opposition hoped to achieve by pursuing its present course of agitation, forgetting her own trailblazer role from Day One of the Nawaz Sharif regime in bringing down the then elected government. On the other hand, saner elements within the Opposition have counselled their own leadership to avoid the roller-coaster road of opposition for the sake of opposition lest it became a violent confrontation fatal for democracy. Even if the government of the day is brought down, what is the surety that it would be replaced by another democratic alternative? Such a situation would be tailor-made for adventurists and/or their frontmen third forces. The same day that platonic thoughts were being aired about by the PM, the residence of Mushahid Hussain was being raided to apprehend that famous “terrorist”, Khalil Malik, who going by the number of policemen employed for the operation, seems to be a combination of Carlos and Pablo Escobar with a little bit of Che Guevera thrown in for good measure. Since our agile policemen had scaled the roof of his house to take up position for several hours, one can well understand the trauma of the whole episode for Mushahid’s family. Not to say that the beating up of Azhar Sohail, Editor of Daily Pakistan, by his own staffers, which had occasioned this ham-handed retaliation, was anything less unsavoury. However, one outrage cannot be set right by another, except off course if civilization degenerates back to medieval feudalism with its Machiavellian overtones.
The Government of Pakistan (GOP) has been engaged in a diplomatic exercise of some magnitude for the past few months to focus international public opinion on Kashmir. This is in keeping with PM Ms Benazir Bhutto’s penchant for following the route of exposing the Human Rights situation inside Indian-occupied Kashmir to the attention of the western governments, particularly the US of A, so that diplomatic pressure could be brought on India to settle the long, festering dispute. By opting to go the route of the UN Human Rights Commission at Geneva, Pakistan’s tactics was well suited to the liberal climate at the White House that takes a high moral ground with respect to violation of human rights. It also underscored Pakistan’s determination to avoid an armed conflict over the issue in preference to diplomatic initiatives. To that end, after a round of hectic diplomatic forays in various capitals to ascertain and obtain support, GOP tabled Kashmir Resolution L-40 at the UNHRC. To cap this PM Benazir Bhutto made an impassioned appeal in person in early February at the forum in Geneva. A well orchestrated propaganda campaign was built up that gave us reason to believe that this initiative would form the basis of the campaign whereby India would be eventually forced to give substantial concessions on Kashmir. An excellent set-piece strategy in theory, in actual practice it depends too much on not only on the world’s conscience but India’s susceptibility to this aspect. This strategy also pre-supposes that Pakistan’s traditional friends would be standing shoulder-to-shoulder with us in our most critical area of concern, very much like we have stood up for them over the years.
In the event, finding support for Kashmir Resolution L-40 eroding by the hour, Pakistan was faced with the embarrassment of actually losing the vote. On the “persuasion” of friends like Iran and China, Pakistan invoked article 62 para b of the Rules of Procedure of ECOSOC which calls for no action on the proposed Resolution but ensures it becomes part of the Commission’s proceedings to be submitted to the ECOSOC. Technically it is a face-saving means for withdrawing, it means deferment. Having done this, Pakistan’s Foreign Minister, Sardar Assef Ali, a man gifted with a gift of the gab, claimed victory very much like the US general faced with the morass in Vietnam who advised that the US should declare “victory” and go home. If the sponsored media and the public figures trotted out to support GOP’s stance are to be believed, Pakistan has won a great moral victory and succeeded in focussing world public opinion on Kashmir. If the Opposition is to be believed, then it has been a catastrophic defeat, a foreign policy disaster of unimaginable magnitude that sets back the Kashmir issue many years and exposes Pakistan’s isolation in the world community. For once, the Opposition and Indian leaders seem to be in agreement though the respective intents are quite different. India welcomed back its delegation to the UNHRC by profusely garlanding the individual leaders like conquering heroes. Atal Behari Vajpayee of the staunchly anti-Pakistan BJP and the Indian Minister of State for External Affairs Salman Khursheed also promptly debunked Pakistani claims that India had agreed to allow envoys from Muslim nations into Kashmir on a fact finding mission in exchange for dropping the Resolution. Indian stance has more or less been echoed by the international media (including the widely heard BBC) who clearly labelled this as an Indian triumph of great importance in the sense that except for some propaganda points, Pakistan failed in its primary objective i.e. to get the Resolution passed. Even Nawabzada Nasrullah Khan, appointed by the Ms Benazir Regime as Chairman of the Parliamentary Kashmir Committee, embarrassed GOP by his gut-reaction in asking for the resignation of Sardar Assef Ali and the Foreign Ministry officials responsible for this debacle. The reaction among Kashmiris living within Indian-occupied Kashmir and Azad Kashmir has been one of great despondency, it has been a demoralizing blow. As far as the masses of Pakistan are concerned, their hopes had been so raised by the rhetoric of the PPP Government that the failure to see the Resolution through to its stated objective has been similarly devastating for morale. Ms Benazir’s Regime has become a victim of its own propaganda.
The PPP’s decisive majority in Sindh is rural-based except for the National Assembly where because of the MQM boycott it shared the MQM’s urban seats with the PML (N). Bouncing back strongly from their strategic blunder which took away their king-maker status at the national level, the MQM took the second largest majority of 27 PA seats, a true reflection of its vote bank among the Mohajir community in the major urban areas.
Compartmentalised into Provincial role, a culmination of the process that started less than two years ago with Operation Clean-up, a sense of deprivation and persecution is endemic among the Mohajir community. Though Operation Clean-up was primarily directed at restoring the rule of law in Sindh in both the urban and major rural areas, their overwhelming urban presence meant that the MQM became the only political party so targeted. In the period pre-Operation Clean-up some of MQM’s militant elements had far exceeded the parameters of civilized behaviour and were openly baiting the army. Having cogent reasons for not being enamoured with the MQM, the Army called their bluff but in their success they need to be magnanimous in the greater interest of national integrity. As seen in their tolerance of the present “democracy”, they can be patient if they have to be. The sins of a handful cannot be visited upon the millions of their innocent kith and kin, Mohajir public opinion is already estranged and getting more bitter by the day.