EDITORIAL : THE DAWN, PAKISTAN

 

Cameron`s remarks

LAST year, during a visit to India, British Prime Minister David Cameron labelled Pakistan a terrorist haven. In Islamabad on Tuesday, he tried to allay Pakistani fears. He was lucky to have at hand hosts who had no option but to ignore his uncharitable observations of the past. With rare, if any, exceptions Pakistani politicians themselves are well aware of how big a part their immediate surroundings and the people around them play in eliciting a statement out of them. The contrast between the nationalist speeches they make to the local gallery and their submission to the international powers is a case in point. Likewise, Mr Cameron may have been moved by bilateral realities in India last year. His hosts in Islamabad on Tuesday had too many other important issues in mind to let the incident come in the way of what the British prime minister termed as the ` naya aghaaz ` or new beginning.

In diplomacy and politics, it matters how one elaborates one`s views. With experience, Mr Cameron and his speechwriters have been able to get their nuances right, without having to change the content and thrust of their argument. Last year, Pakistan was labelled as an exporter of terror. In his address to university students in Islamabad on Tuesday, the British prime minister was satisfied with a mention of “…terrorism that has done harm elsewhere in the region….” He spoke of the sacrifices Pakistanis have made and couched his words in decorative cushions such as “Together with our Pakistani friends….”

These trappings should, however, not detract from the pointed message that he conveyed to the Pakistani leadership: Britain is ready to invest money to fight extremism here, and in return it demands results which for the time being have been denied to it. This is consistent with the western trade policy on Pakistan and should leave the officials in Islamabad under no illusion about what they are being paid for. Mr Cameron echoed US Secretary of State Hillary Clinton`s remarks about taxpayers: “You are not raising the resources necessary to pay for things that a modern state and people require.” He also sounded a virtual warning to the current incumbents at the same time as he sought to explain the situation to the people they were representing: “Not fair on you, ordinary Pakistanis, who suffer at the sharpest end of this weak government…” And “my job is made more difficult when people in Britain look at Pakistan, a country that receives millions of pounds of our aid money, and see weaknesses in terms of government capacity and waste.” These are declarations more categorical than earlier ones.

Wheat surplus

REPORTS that farmers are expected to harvest a bumper wheat crop this season is a definite boon from a food-security point of view. Coming a year after devastating floods, the bumper crop is expected to be around 25 million tonnes, comfortably exceeding projected domestic consumption — pegged at 22 million tonnes but somewhat elastic because of smuggling to neighbouring countries. Yet, there is a dark side to this otherwise sunny picture. Thanks to the government`s pledge to purchase 6.57 million tonnes of wheat through Passco and the provincial food departments at a guaranteed price of Rs950 per 40kg, the state is going to shell out Rs165bn to purchase wheat this year. The sum will likely be extended by the State Bank of Pakistan as conditio- nal funding. The logic of support-price mechanisms through the use of state resources has long been questioned by independent economists and bankers. Yet, they continue to exist because the ECC, which determines the policy, is stacked with agricultural interests who benefit from high support prices. From a fiscal point of view, it makes little sense to have the State Bank extend loans for the sake of a wheat crop that will likely stay in the same range of production with or without the support price. But so powerful are the groups which benefit from support prices that even if the State Bank were to deny funding, the government would simply turn to the private sector — further crowding out private-sector investment.

There is a more tangible cost of the support-price mechanism: wheat, a staple food crop, has far more people on the consumption side than on the production side. High support prices mean that the price of wheat will be distorted upwards, even when the tradable surplus exceeds the procurement target. With food insecurity threatening swathes of the population and inflation rampant, surely public interest demands the support-price mechanism be discontinued or substantially reformed. Short of financing purchases directly, the state could take on a regulatory/oversight role. Almost anything would be an improvement on the present system — but is the ECC willing to sacrifice a lucrative racket for some in order to benefit the many?

Senseless protest

AS markets across Karachi remained shut on Tuesday in response to a strike call given to protest against rising incidents of extortion, the business community appeared to be divided over the issue. So serious was the divide that traders and industrialists traded blows at the Polo Ground; the police had to intervene to break up the brawl, which lasted for over an hour. Tuesday`s strike was principally supported by the All Karachi Tajir Ittehad, a grouping of small traders, while the Karachi Chamber of Commerce and Industry, mainly seen as representing industrialists, backed out after initially supporting the protest. Trouble erupted when traders arrived at the Polo Ground, where the KCCI had organised its own event, and heated exchanges led to fisticuffs. Traders accused the chamber of siding with the government and believing its promises which — they say — the state never keeps. KCCI leaders, on the other hand, said the traders were “toeing a political line”. Observers say that other than the extortion issue there has been a long-standing enmity between the chamber and small traders, as the latter feel they don`t have proper representation in the KCCI. These differences may have helped fuel the mêlée. In the midst of the chaos the `real` issue — extortion — seems to have been forgotten.

The business community has a genuine case in protesting against extortion. However, by allowing the issue to become politicised and by not controlling infighting the community has done no good to its cause. There is no doubt the government must take definite steps to control extortion and racketeering for the sake of the metropolis`s financial health. Mere promises are insufficient. But the business community must also realise that by allowing their cause to be hijacked by political elements and themselves to splinter into constantly warring groups their campaign has slim chances of success.