EDITORIAL : THE DAWN, PAKISTAN

Budget: a preview

SOME rules never change: an annual budget remains an expression of a government`s political and economic aspirations. It is not supposed to be a fire-fighting exercise. It must inform the people where the government wants to take the economy in the short to long term. After Z.A. Bhutto`s government in the 1970s, the incumbent coalition led by `his` PPP will have the rare distinction of being the second elected civilian set-up in Pakistan`s history to present its fourth annual budget. The coalition, however, has not succeeded in fitting its political and economic agenda into its previous budgets, and is unlikely to do so in the one for the next fiscal year. Nevertheless, this observation does not undermine some bold and politically unpopular decisions like the reduction in wasteful subsidies made by it to bring the economy back from the precipice.

The initial details of the budget for 2011-12 carried by Dawn on Friday show that the next fiscal is not going to be too different from the outgoing year or the previous few years. Though the government claims it will focus on fiscal consolidation next year to protect a fragile economic recovery, budgetary proposals tell another story. The government`s expenditure is increasing because of security conditions and debt-servicing. Security-related expenditure, for example, is going to be raised 15 per cent to Rs835bn. Similarly, a huge sum of Rs786bn will be consumed by interest repayments on public debt. This doesn`t include repayment of the principal amount. Nor does it include repayment of the now stalled $11.3bn loan from the IMF starting next February.

The consolidated tax revenue (including provincial taxes) target is being enhanced to Rs2.1tr to restrict fiscal deficit to just above Rs900bn or 4.3 per cent of GDP. But it appears unrealistic in the wake of the headwinds — slowing growth, drying public and private investment, rising inflation, etc — and in the absence of a well laid-out programme to tax the untaxed sectors. The provinces also don`t seem to be in the mood to effectively tax agriculture and property. The government`s allies from urban Sindh are in no mood to let it implement the RGST that is crucial to raise revenues and document the economy. Thus, it can safely be assumed that the government will be left with little option but to slash crucial development spending, cut subsidies and borrow hugely from domestic sources to keep its deficit down as the year closes. Fresh spurts of inflation and further reduction in public and private investment cannot be ruled out. The next fiscal year is unlikely to bring any relief to the common people.

Government paralysis

THURSDAY`S suicide attack on a police post in Hangu demonstrates yet again that the militants in our midst can attack almost at will. Some 30 people were killed and the death toll could rise as some of the wounded are said to be in critical condition. In the last few weeks following the killing of Al Qaeda chief Osama bin Laden, the country has witnessed four major deadly assaults in the month of May: the twin suicide attacks on a paramilitary training academy in Shabqadar in district Charsadda, a brazen raid on the PNS Mehran airbase in Karachi, the flattening of the CID building in Peshawar and now the bloodshed in Hangu. Responsibility for all four incidents has been claimed by either the Tehrik-i-Taliban Pakistan or one of its splinter groups. Things appear to be spiralling out of control but the government continues to insist that it has the resolve and capacity to fight outfits that are not just enemies of the state but also the people of Pakistan.

Many will disagree with officialdom`s strong words that are clearly not backed up by commensurate action on the ground. Far from tackling the problem head-on, the government and its security apparatus appear to be in a state of paralysis that bodes poorly for the future, sapping as it is the morale of the public and perhaps boosting the confidence of militants who are wholeheartedly dedicated to their `cause`. The point here is this: who is more committed to the fight, the state and its agencies or the militants and terrorists operating under the umbrella of the Taliban? Hopefully the former holds true but the security breaches and intelligence failures witnessed of late do little to inspire confidence among the public. Many are asking, where is the government? Indeed, it is conspicuous by its absence, seemingly content with rhetoric at a time when nothing short of hitting back hard will do. What we see, instead, is a sense of almost abject helplessness, an inability to form a comprehensive policy that can take the country forward. What we need is movement, not paralysis.

Mladic`s arrest

WHILE Ratko Mladic`s lawyers are fighting his extradition to The Hague for trial by a UN court, Europe is wondering how the Bosnian Serb ex-general, accused of mass murder, managed to elude arrest for no less than 16 years. Mladic is one of the world`s most wanted criminals accused of organising Europe`s worst massacre since the Second World War by butchering nearly 8,000 Muslim boys and men in Srebrenica in 1995 during the Bosnian war. Just as in Osama bin Laden`s case in which the world demanded an explanation from Islamabad as to how a wanted mass killer had remained undetected for years, so too Serbia`s neighbours and the European Union have expressed dismay over Mladic`s hiding in Serbia for more than a decade and a half. They are now wondering whether a support network hid him. From Serbia`s viewpoint, the redeeming feature is Mladic was caught not by a foreign force but by the Serbian security forces themselves.

By design or default, Mladic was nabbed at a time when the EU was discussing Serbia`s case for entry into the 27-state grouping. Asked by newsmen whether Mladic`s arrest had been timed to get a positive result from Brussels, Serbian President Boris Tadic said his government never calculated when Mladic would be caught, but that his arrest was the result of a “concerted effort” by Serbian security forces over the last three years. That may not satisfy EU diplomats, but all indications are that Belgrade will soon get `candidate status` from Brussels, paving the way ultimately for Serbia`s full membership. Mladic`s capture and the Abbottabad raid demonstrate the international consensus that those who kill innocent people should be pursued until they are discovered. Such killers must face justice. As a spokeswoman for a Serbian Muslim group said, Mladic`s arrest was a relief for the victims` families.