Pakistan's Economy Post Flood

 

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PAKISTAN’S ECONOMY POST- FLOOD Ishrat Husain

Pakistan had been suffering from three serious external shocks before the recent devastation to human lives, property, infrastructure and social services by the floods struck the country country in AugustAugust-Septem September ber 2010. Pakist Pakistan an was engaged in fight fighting ing the militants mili tants and terrori terrorists sts since the U.S. initi initiated ated the war in Afghanist Afghanistan an in 2001. Forty three billion dollars of losses have been incurred so far in the fight against terror and the country has been virtually shut out as a destination for investment, capital flows, tourism and trade. Thirt Thirty y thousand civi civilians lians and six thousand thousand Army, Para-m Para-milit ilitary ary and Police officials have lost their lives. The Second shock occurred in 2007 when the world food and fuel price went went through large, sudden and abrupt hikes. As Pakistan did not adjust these prices domestically and the government had to absorb the impact of this hike through throug h the budget fiscal defic deficits its became quit quite e large. The defici deficits ts were financed by borrowing borrowi ng from the State Bank of Pakist Pakistan an and the consequ consequential ential monetar monetary y expansion expansion led to 25 percent inflation, inflation, depreciation of exchange rate and lower lower growth. The decline in the purc purchasi hasing ng pow power er of the Pak Pakist istani anis s due to stagnat stagnating ing inc income, ome, double double-di -digit git inflation and growing unemployment for the past three years has resulted in a major  demand shock. Third, the synchronized recession in the global economy as as a result of  the financial crisis of a magnitude not witnessed since the 1930s hasn’t helped either in stimulatin stimu lating g dome domestic stic economy economy..

It iis s in this context that it m must ust b be e real realized ized that no

country with the resources and capacity such as possessed by Pakistan can single handedly meet the onslaught caused by these floods. The pace, extent and magnitude of the stimulus provided jointly by the domestic and international community would determine as to how soon the Pakistani economy is stabilized. The floods have displaced 20 million people, damaged or destroyed more than one million houses, infrastructure, and washed away standing crops from 10 percent of  the cultivable area. The losses of livestock, poultry, etc. which provide cash incomes to the poor are quite substant substantial ial.. Acc Accordi ording ng to the UN observ observers, ers, the 2010 Floo Floods ds in Pakistan have caused more devastation than the combined effects of Asian Tsunami,

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2005 200 5 ear earthq thquak uake e in Kashm Kashmir ir and the rec recent ent Hait Haitii earthq earthquak uake. e. The loss of life has indeed been contained but the loss to property and incomes have been considerably higher. Internal displacement of people has been on a massive scale. World Bank and ADB have made preliminary estimates of damage assessment which are estimated at approxi appr oximat mately ely $10 bill billion ion or about 6 perc percent ent of GDP.

Res Resear earcher chers s at Bal Balll State

University and Tennessee State University have put the damage to the infra-structure, buildings, contents and agricultural assets between $5.1 – 7.1 billion. The recent report by the IMF projects that the loss of output mainly in agriculture sector would would reduce GDP by over 2 percent. Public fi finances nances are like likely ly to be affected with lower revenue collec collections, tions, higher outlays for needed humanita humanitarian rian assistance and defense defens e services. Floods have als also o disrupted tra trade de with the suppli supplies es of exports and imports import s held up and fuel can not be delivered to power plants. plants. The current econo economic mic scenario for 2010/11 looks bleak as GDP growth would be only 2.8 percent, inflation 13.5 percent, current account deficit 3.1 percent and fiscal deficit nobody knows for sure where it will end up. A timely and appropriate response of the domestic and international community to this calamity can not only contain and mitigate the risks to the economy but also turn it into an opportunity for economic revival. The Government has, however, urged the multilateral banks not to reallocate their existing loans for flood rehabilitation purposes. As the World Bank and ADB had together committed about $3 to 4 billion from their ongoing programs for this purpose the gap between the requirements and the expected foreign donor inflows has widened. This goal is achievable if the post-relief rehabilitation and reconstruction activities are carried out in a framework of burden sharing, additional resources and not business-as-usual. Crisis situations do do evoke exceptional responses. The present crisis provides an excellent occasion not only to formulate and execute the post flood relief rehabilitation plan but also to implement the structural reforms that are overdue but have been on the

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back burner for a long time and also set the long term economic direction direction in the light of  the changed circumstances.

Post-Relief Measures

There are at least seven post-relief activities that deserve urgent attention for  implementation in the immediate term: (a) As the flood waters recede, restoration of livelihoods of those displaced from

their lands and abodes should immediately begin. The immediate ttask ask would be to facilitate the return of approximately four million families to their respective habitat and to enable them make the transition to earning incomes and preparing la land nds s fo forr cult cultiv ivat atin ing g Ra Rabi bi crop crops s – wh whea eat, t, oi oils lsee eeds ds,, et etc. c...

Ca Cash sh gran grants ts,,

microfinance loans, supply of seeds, fertilizers, bullocks, implements and housing materials can be financed from the allocations from the Benazir Income Support Program, the funds at the disposal of MNAs and MPAs, the Peoples’ Works Program, the Poverty Alleviation Fund, Baitul Mal and Zakat, and the Provincial development develop ment budge budgets. ts. These publ public ic sector funds sh should ould be suppl supplemented emented by involving the corporate sector, the NGOs, Microfinance Banks and Institutions (MFBs (MF Bs and MFI MFIs), s), the Civ Civilil Soc Societ iety y Org Organi anizat zation ions, s, wea wealth lthy y ind indivi ividua duals ls and philanthropist philant hropists, s, non-reside non-resident nt Pakistan Pakistanis. is. These groups may operate in specific areas or assigned specific components to undertake on their own without being asked to donate donate cash cont contributi ributions. ons. MFBs and MF MFIs Is can be provi provided ded lines of  credit from both domestic and international donors for channeling micro loans for  agriculture, agricul ture, hous housing ing and micro busin businesses. esses.

Simil Similarly, arly, the inte internatio rnational nal donor 

community should be invited to undertake projects of their choice in a particular  distric dist rictt dire directl ctly y or thr throug ough h loc local al par partne tnerr orga organiz nizati ations. ons.

The only requ require iremen mentt

would wou ld be tha thatt the act activi ivitie ties, s, pro projec jects, ts, and comp componen onents ts und undert ertaken aken by each part pa rtic icip ipat atin ing g ag agen ency cy shou should ld be pa part rt of th the e Di Dist stri rict ct Re Reha habi bililita tati tion on an and d Reconstruction Reconst ruction Program Program.. The m merits erits of th this is appr approach oach ar are e sever several al fo fold. ld. First, there will be an integrated planning framework under which public sector, non/opt/scribd/conversion/tmp/scr /opt/scribd/con version/tmp/scratch2780/800753 atch2780/80075351.doc 51.doc

 

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government sector, private sector and international donors will participate in a coordin coor dinate ated d man manner ner but with full contr control ol of their financia financiall and admin administ istrat rative ive resources. resource s. Second, tthe he plan will be dra drawn wn with the int intimate imate kn knowledge owledge of th the e local conditions – the communities displaced, the lands damaged, the livestock destroyed, the stocks of grains and seeds washed away, the extent of the repairs of hou houses, ses, dwe dwelli llings, ngs, sheds and shop shops s and rapi rapid d reha rehabil bilita itatio tion n of ess essent ential ial infrast infrastruct ructure ure and con connect nectivi ivity. ty. Thi Third, rd, the dis disjoi jointe nted d or fra fragme gmente nted d act activi ivitie ties s resulti resu lting ng in over overlap lapping ping and dupl duplica icatio tion n or too many reso resource urces s going to one place would would be avoided. The tradit traditional ional way wher whereby eby the Federal or Prov Provincial incial Government agencies formulate, approve and implement the plans from the capitals is bound to to result in failure, slippages, or inordinate delays. The districts af affe fect cted ed by the the ca cala lami mity ty sho shoul uld d be pro provi vided ded th the e ma manp npow ower er an and d fi fina nanc ncia iall resources to prepare the plan with the help of all the government agencies, NGOs, private private sector and donors. A District Rehab Rehabilitat ilitation ion and Reconstruction Reconstruction Board Bo ard he heade aded d by the the Dist Distri rict ct Co Coord ordin inat atio ion n Of Offi ficer cer an and d con consi sist stin ing g of th the e representativ represen tatives es of major particip participating ating agenc agencies ies should be formed. The work of  th this is Bo Board ard sh shoul ould d be ov overs erseen een by an in inde depen pende dent nt moni monito tori ring ng comm commit itte tee e consisting of the MPA, MNAs belonging to the district, representatives of Armed Force Fo rces, s, an and d few few em emin inen entt pe perso rsons ns of reput repute e be belo long ngin ing g to th the e di dist stri rict ct.. Th The e Provincial and Federal Governments including the NDMA should place some of  their technical technical experts, skilled and experienced manpowe manpowerr at the disposa disposall of the Boards on deputation. (b) The Federal and Provincial Governments should prepare a comprehensive Post-

Flood Rehabilita Rehabilitation tion Plan bas based ed on the district wis wise e damage assessm assessment. ent. The financing of the plan should indicate the sources – domestic and foreign, the sectoral sect oral all allocat ocation ions s and the timel timeline ines s for deli delivera verables bles..

Thi This s pla plan n sho should uld be

presented before an International Donors conference. It would be credible if the Government informs the donors that it would contribute x percent from its own resources for financing this plan and expect the donors to make up for the remaining remain ing gap. In absence of su such ch an explic explicit it arrange arrangement ment it wo would uld be quit quite e /opt/scribd/conversion/tmp/scr /opt/scribd/con version/tmp/scratch2780/800753 atch2780/80075351.doc 51.doc

 

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hard har d to per persu suade ade the the inte intern rnat atio iona nall com commu muni nity ty to co come me up wi with th th the e en enti tire re financing from their own sources. Large infrastructure rehabilitat rehabilitation ion projects c can an be assigned to multi multilateral lateral develo development pment banks because they have the experti expertise se and the financia financiall mus muscle cle to und undert ertake ake these proj project ects. s.

Bilate Bilateral ral donor donors s and

international NGOs can be asked to focus on their areas of interest in certain provinces or districts. Other donors can either directly work at local level or pool their resources for certain projects if they do not have the capacity or local presence pres ence..

The propo proposed sed Overs Oversigh ightt Commit Committee tee at the Dist Distric rictt lev level el can have

representatives from such donors. (c) The Fed Federal eral and Pro Provinc vincial ial Gov Governm ernment ents s sho should uld joi jointl ntly y draw draw out a rev revised ised

budget for 2010/11, an indicative budget for the next three years outlining the realloca real locatio tions ns fro from m the recu recurren rrentt and deve develop lopmen mentt budg budgets ets,, all allocat ocations ions fro from m Zakat, Bait ul Mal and the additiona additionall measur measures es for revenue generat generation ion including Flood Tax or Surcharge. The incidence of this tax or surcharge should fall mainly mainly upon the elites in Pakistan. It must be mentioned that under the new NFC award th the e sha share re of the the Pr Provi ovinc ncia iall Go Gover vernm nmen ents ts in th the e di divis visib ible le ta tax x pool pool wo woul uld d be relati rel ativel vely y hig high h com compar pared ed to the Fede Federal ral Gov Governm ernment ent whi while le their their capa capacit city y to absorb such large volumes of additional resources productively would take some time to build. At the same tim time e the expenditures of the Federal Government are highly inflexible in the short term – Debt Servicing, Defense, Subsidies and transfers transf ers – with little room fo forr maneuver. The old mindse mindsett where the provinc provinces es always put inflated claims and demands on the Federal Government would have to give way to a more responsible responsible and collect collective ive view of natio national nal resource resources. s. Of  course the provinces should be allocated external donor resources for flood rehabilitation in proportion to the assessed damage needs for the projects they are assigned for implementation. The provinces, in turn, should subdivide these resources and all others saved from their budgets to the Districts affected by the floods so that local rehabilitation projects can be completed expeditiously without lengthy and cumbersome approval processes.

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the e Pr Provi ovinc ncia iall le level vel,, this this cri crisi sis s ca can n be ut utililiz ized ed fo forr a comp complet lete e ph physi ysica call (d) At th rehabilitation and strengthening of our entire irrigation system that has been neglected for over sixty years. The barrages, the embankments, flood protection bunds, spurs, river training, removing obstructions from flood plains, de-silting of  cana canals ls,, lini lining ng of wa wate terr cour course ses. s.

Th The e ph phys ysic ical al reha rehabi bililita tati tion on shou should ld be

acco ac comp mpan aniied by an in inst stit itut utio iona nall ov over erha haul ul of the Irri rriga gattio ion n an and d Po Powe wer  r  Depart Dep artment ments. s.

The tech technic nical al expert expertise ise and compet competenc encies ies of the irri irrigat gation ion

engineers have eroded over time and they have become bureaucrats pushing pape pa pers rs,, aw awar ardi ding ng cont contra ract cts, s, disp dispen ensi sing ng fa favo vors rs an and d coll collec ecti ting ng re rent nts s fo for  r  themselves. themse lves. The willf willful ul neglect of main maintenanc tenance e and operations wor work k due to the leakage and diversion of budgetary funds coupled with inefficient and inequitable distribution distri bution and mispricing of water were the main factors behind the weaken weakening ing of th the e irrig irrigat atio ion n syst system em..

A rev revam amped ped orga organi niza zati tiona onall st stru ruct cture ure,, a mo mode dern rn

management system, re-engineered business processes and automation along with wit h perf perform ormanc ance e base based d hum human an reso resource urce polici policies es are bad badly ly nee needed ded for the Irri Irriga gati tion on De Depa part rtme ment nt.. Th The e ou outd tdat ated ed syst system em of wate waterr al allo loca cati tion on th that at is misallocated by generous access to the large and well to do farmers at the expense of the poor has to be replaced by a more efficient equitable community based system. Water pricing mechanism has to be readjusted from time tto o time to meet at least the Operations and Maintenance (O&M) expenses of the system. (e) Ph Physi ysica call in infr fras astr truct ucture ure – po power wer gri grids, ds, ga gas s tr trans ansmi miss ssio ion n lilines nes,, bri bridg dges, es, th the e

Highway System should be repaired, rehabilitated and rebuilt on a sustainable basis. The allocations for these activities should be made out of the reprioritized budg bu dget ets s of the the Go Gove vern rnme ment nt,, NH NHA, A, Ga Gas s Co Comp mpan anie ies, s, PE PEPC PCO, O, et etc. c. Th The e recommendations of the Prime Minister’s Task Force on climate change ought to be scrutinized scrutinized and implem implemented ented if they are found feasi feasible. ble. The effort efforts s aimed at defo de fore rest stat atio ion n ha have ve to be pe pena nalilize zed d an and d re-f re-for ores esta tati tion on an and d wa wate terr-sh shed ed management encouraged and given priority in public sector allocations.  

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7 (f) The Federal government should also redouble its efforts to obtain access for our 

textile texti le exports to the Europe European an Union (EU) and U.S. Domest Domesticall ically, y, textil textile e and other export industries should be given all the support they need in form of raw material, materi al, unint uninterrupted errupted supp supply ly of power and gas, credit and logist logistics. ics. Easy and automatic refunds should be made to the exporters under the new reformed GST so th that at thei theirr cas cash h flow flow is not un un-ne -neces cessa sari rily ly st stuck uck..

Th The e in incre crease ased d expor exportt

earnings will obviate the need for more external loans, improve the capacity to import essentials and thus subdue the inflationary pressures. The post-relief phase can have positive impact on the economy both in the short as well as lon long g ter term. m. The infu infusio sion n of large capi capital tal and redep redeploym loyment ent of fou fourr mil millio lion n pers pe rson ons s in prod produc ucti tive ve acti activi viti ties es wo woul uld d stim stimul ulat ate e ag aggr greg egat ate e de dema mand nd,, prom promot ote e employment and thus help in kick starting the economy. The higher moisture retention in the arid lands of the country can boost agriculture production and ease inflationary pressure in the economy arising from shortages of food and other commodities. In the medium to long term the efficiency of the Irrigation System would pay positive dividends in form of better utilization of scarce water resources and higher yields. The risks to the proposal proposal outli outlined ned above are also man many. y. First, by perp perpetuat etuating ing the negative perceptions perceptions about the governm government ent the much needed financial and human resources required from within and outside the country may may never materialize. This risk has been mitigated in this proposal by bringing in each player to play their part but al allow lowin ing g th them em th the e au auto tonom nomy y an and d in indep depen enden dence ce to op opera erate te wi with th mo moni nito torin ring g and accountability mechanisms. Second, the tendency of over-centralization and the allergy to devolve powers, authority and resources to the people having the best knowledge about abo ut their prob problem lems s and the solu solutio tions ns may persis persist. t. The plan to set up the District District Board is likely to be fiercely opposed by the Federal and Provincial Ministers as they will lose control. control. Third, we have perf perfected ected the art of going through through the ritual rituals s and motions withou wit houtt caring for the subst substance ance..

It is possib possible le that thes these e Boards may, in fact, be

formed on paper but may be made toothless or ineffective and meet the same fate as the Police and Public Safety Commissions in the previous regime. /opt/scribd/conversion/tmp/scr /opt/scribd/con version/tmp/scratch2780/800753 atch2780/80075351.doc 51.doc

 

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Structural Reforms in the Medium Term

First, there is a need for reprioritization of our on-going medium term public sector spending at all levels - the Federal, Provincial and State owned corporation - and elimination of low low priority, low im impact pact development projects, waste and inefficiencies. A clear link between public expenditure and the desired economic outcomes – incomes, output, prices and employment – should guide screening of the projects, programs and policies polici es for inclusion in the priorit priority y list. Only target targeted ed subsidies and condit conditional ional cash transfers that can reach the poor segments of the society should be provided for and the current across-the-board subsidies available to everyone should be discontinued. Second, domestic savings rate is dismal and has made us heavily dependent on forei foreign gn ass assis ista tance nce.. Sa Savi ving ng rat rate e ha has s to be st stepp epped ed by prov provid idin ing g in ince cent ntiv ives es fo for  r  househol hous eholds, ds, corp corporat orate, e, sma smallll busi business nesses es and ove oversea rseas s wor workers kers thr throug ough h Nat Nation ional al Saving Schemes, Mutual Funds, Bank Liability Products, Insurance, etc. Public sector  as a whole has been a source of large dis-savings mainly because of losses of public corporat corp orations ions,, low res resourc ource e mob mobili ilizat zation ion aris arising ing from exem exempti ptions ons,, eva evasio sion, n, waivers waivers,, weak compliance, compliance, and indif indifferent ferent enfo enforcement rcement.. Empir Empirical ical studi studies es have shown that at the current tax rates, the tax collection can be raised by 4-5 percentage of GDP while the the pl plug uggi ging ng of the the leak leakage ages, s, wa wast ste e an and d co corru rrupt ptio ion n in pu publ blic ic corpor corporat atio ions ns and development projects can provide an additional fiscal space of 2-3 percentage of GDP. An action plan should be implemented by the Finance Managers to capture these missing public savings. Third, privatization program has been stalled for quite some time now and the loss making public corporations are bleeding the exchequer. Not only tthat hat privatization is necessary for the health of public finances it will also contribute to efficient allocation of resources, resources, improvem improvement ent in productiv productivity, ity, expan expansion sion of output and employ employment. ment. The vested interests have so far prevailed upon the decision makers by perpetuating myths and falsehoo falsehoods ds about priva privatiz tizati ation. on. It is tim time e to ignor ignore e them and proc proceed eed with the /opt/scribd/conversion/tmp/scr /opt/scribd/con version/tmp/scratch2780/800753 atch2780/80075351.doc 51.doc

 

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privatization in an open and transparent manner both by off-loading limited shares of  profit prof it makin making g com compani panies es and dis disposi posing ng of the loss maki making ng corpor corporati ations. ons. To avoid cronyis cron yism m and fro fronti nting ng prepre-qual qualifi ificat cation ion of the bid bidders ders aga agains instt spe specif cified ied criter criteria ia and careful screening screening pro process cess must be inco incorporat rporated ed in the law. As soon as a decisio decision n is taken taken to pr priv ivat atiz ize e the the ent entit ity y its its cont control rol shou should ld be ta take ken n ou outt of th the e ha hands nds of th the e Administrative Ministry and transferred to either the Ministry of Finance or Privatization Comm Co mmis issi sion. on.

Th The e con consi sist sten entt effo effort rts s to su subve bvert rt th the e pri privat vatiz izat atio ion n proc process ess by th the e

administrative ministries will thus be contained. Fourth, the government by becoming too intrusive is now an impediment in the way of new enterprises, start-up companies and small businesses in the private sector. Entrepr Ent reprene eneursh urship ip is disc discour ouraged aged by exc excess essive ive rules and regul regulati ations ons..

Too many

agencies and departments are involved – often at cross purposes – in cumbersome and long dra long drawn wn proc process ess of cle cleara arances nces,, nono-obj object ection ion cert certifi ificat cates, es, bui buildi lding ng perm permits its,, lan land d acquisition, acquis ition, prov provision ision of utilit utilities ies and infrastru infrastructure. cture. A single buildin building g project requires more than two dozen government agencies and departments with connections and corruption corrupt ion as the main determinant determinants. s. Land acquisi acquisition, tion, taki taking ng possessio possession, n, transfer of  title deed and registration of urban property have proved a nightmare to the prospective investors. invest ors. City Gover Governments nments and Distr District ict Governm Governments ents should devel develop op simplif simplified ied ITenabled procedures and post the land titles with ownership details on the website. Public utilities should be provided in bulk at dedicated Industrial estates in each urban centre. Comput Computerizat erization ion of land records – urban and rura rurall – has been lingerin lingering g on for  almost a decade decade because of the resist resistance ance offere offered d by the present funct functionarie ionaries. s. An independent indepe ndent author authority ity should be given legal pow powers ers to carry out this task. Successf Successful ul examples such as Sunder Industrial Estates should be replicated all over the country. Fift Fifth, h, dec decis isio ion n ma maki king ng at the the go gover vernm nmen entt le leve vell is convo convolu lute ted d an and d co comp mple lex x becau bec ause se of th the e overl overlap, ap, dup duplilicat catio ion n an and d mu mult ltipl iplic icit ity y of org organ aniz izat atio ions, ns, el elon ongat gated ed hierarchal chain within the organization and a growing tendency for turf protection and inter-a inter-agenc gency y rivalr rivalry. y.

Rul Rules es and pro procedu cedures res along with stru structu ctural ral chan changes ges in the

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and accounta accountabil bility ity esta establi blished shed to make room for fas fastt tra track ck decisi decision on makin making. g.

The

financial financ ial rules have out outlived lived their their utilit utility. y. These must be revi reviewed ewed and the redunda redundant nt rules purged out and the latest rules that are in force placed together in form of a manual that that is freely accessi accessible ble on the website website.. The enormou enormous s discreti discretionary onary power  enjoyed by poorly paid, ill trained low level functionaries such as Patwari and SHO have alienated an ordinary citizen from the Government and should be transferred in the hands of higher caliber caliber Civil Servant Servants. s. Only quali qualified fied and younger offi officers cers should be entrusted these functions. Sixth, the gap between the capacity of the government to deliver public goods and services and the growing growing expectat expectations ions of the public at large is gett getting ing wider. This can be filled in by an empowered and well functioning functioning local local governmen governmentt system. The Local Government System 2001 had rightly devolved powers, authority and resources for basic public service service delivery to the Union Councils and District District Governme Governments. nts. This system, with some required changes, should be reinstated as soon as possible with the Provinc Prov incial ial Gov Governm ernment ents s res respons ponsibl ible e for pol polici icies, es, sta standa ndards, rds, ass assuri uring ng qua qualit lity y and monitoring monit oring result results. s. Polic Police e Order 2002 with built in checks and balances of Executive Executive Magistracy Magist racy should form tthe he Citizen Citizen-Polic -Police e relation relations. s. The logica logicall follow up of the 18 th amen am endm dment ent and the the Na Nati tion onal al Fina Finance nce Com Commi missi ssion on Aw Awar ard d by bui build ldin ing g up st stron rong g representative Local Government System. For the last two years the e entire ntire LG System has been put in abeyance as the old system was abolished and no alternative system was put in its place. place. The void and vacuum at the district district lev level el due to the absence of a wellll fu we func ncti tion onin ing g Loc Local al Go Gover vernm nment ent sys syste tem m creat created ed a la larg rge e nu numb mber er of av avoi oida dabl ble e problems. problem s. We sho should uld llearn earn le lessons ssons ffrom rom th this is regr regrettab ettable le expe experience. rience. The pr previous evious system of devolving powers, authority and resources for 12 Provincial Departments should be restored restored with so some me changes and m modific odifications. ations. Law and order, D Disaster  isaster  Management and Revenue Record Maintenance should be transferred from elected Nazim to a neutral and impartial government official. Executive Magistracy needs to b be e re-establishe re-esta blished d for supervisi supervising ng the Police and keep keeping ing it account accountable. able. Polic Police e order of  2002 should be stripped of all the subsequent amendments and the Police commissions

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revived revi ved and str strengt engthen hened. ed.

Urba Urbaniz nizati ation on is pla placin cing g man many y seve severe re str strain ains s and urban

management for large metropolitan cities done on modern lines. Seventh Seve nth,, inv invest estment ment dec decisi isions ons in Ener Energy, gy, reha rehabil bilita itatio tion n of irr irriga igatio tion n syst system, em, education educat ion and health shoul should d be made on a medium term basis basis.. Pakist Pakistan’s an’s reservo reservoirs irs and dams have have only 30 days stora storage ge capac capacity ity..

Hyd Hydro ro power is the chea cheapest pest an and d

cleanestt source of energ cleanes energy. y. But dams – large or smal smalll – could not be built beca because use of  political differences among the the provinces. It is imperative that all tthe he provinces reach a consensus and then allow the construction. As changes in the government bring about abrupt reversals private investors desiring to invest in long gestation projects suffer from a high deg degree ree of uncert uncertain ainty. ty. They are also hesit hesitant ant to invest or partic participa ipate te in any public-private partnership because they are not sure as to what will happen to their  project when when the new government com comes es to power. To minimi minimize ze this uncerta uncertainty inty the Parliament should discuss and approve the projects and approve allocations for the entire five year plan period which should remain unchanged at the time of annual budget bud get excep exceptt for fine tuni tuning. ng.

Thi This s wil willl ass assure ure that some essen essentia tiall activi activitie ties s tha thatt

produce results in the medium to long term are not sacrificed at the altar of short term expediency and arbitrary cuts in development projects. Eighth, the assertion of an independent judiciary in Pakistan in the last few years is a most welcome step. But the priority of the judiciary should be to m make ake dispensation of justice easily available to an ordinary citizen without him incurring huge unaffordable costs or committing years of productive life in inordinate delays, adjournments, stayorders and multiple appeals. Expeditious disposal of cases cases pending at all tiers of courts and integrity of lower judiciary can unlock a large dead or illiquid capital for investment. The Federal Board of Revenue cannot recover as much as Rs.100 billion of taxes owed as th the e ca case ses s are are pe pend ndin ing g in the the co court urts s for for ye years ars al alto toge geth ther er du due e to cumb cumbers ersom ome e procedures, delaying tactics adopted by the lawyers and no penalty for filing frivolous litigation. The commercial banks have billions of lloans oans stuck up as the borrowers have either obtained stay orders from the courts and thereafter the cases are adjourned for  one reason or the other or the decrees granted by the courts have not been executed. /opt/scribd/conversion/tmp/scr /opt/scribd/con version/tmp/scratch2780/800753 atch2780/80075351.doc 51.doc

 

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Others get encourage encouraged d by such tactic tactics s and they also purs pursue ue the same path. Most of  the litigation in Pakistani court system arises from the disputes on land, residential or  commercial commerc ial propert property. y. A large number of pro projects jects are eit either her delayed or aban abandoned doned as the potential investors find themselves entrapped by those illegally occupying their land or property filing filing suits agai against nst the legit legitimate imate own owners. ers. Weak and unclea unclearr title deeds, deeds, loopholes loopho les in regist registration ration procedures and unrelia unreliable ble transf transfer er mechani mechanisms sms have forti fortified fied propensity for unnecessary litigation. In large urban areas, organized land mafias have taken tak en illeg illegal al posses possessio sion n of large tract tracts s of state and privat private e lan land d par parcels cels..

Bui Buildi lding ng

Control Authorities such as CDA, LDA and KBCA have become hubs of corruption where lower functionaries would create hurdles at every stage of construction and won’t issue the Building Completion Certificates unless they are paid huge sums as illegal gratificati gratif ication. on. Multi bil billion lion dollars wort worth h of invest investment ment is stuck and has become illiquid because of these factors.   Finally, most of the problems in the operation of the Public Sector enterprises arise due to widespread favoritism and nepotism in the appointments of the Chief  Executives Execut ives and the Board Boards. s. The process of th their eir appoin appointment tment is hig highly hly opaque and depend dep ends s up upon on th the e wh whim ims s of the the Pr Prim ime e Mini Minist ster er or th the e Ch Chie ieff Mi Mini nist ster er wh who o en enjo joy y enormou enor mous s disc discret retion ionary ary powers powers..

The These se pow powers ers have bee been n mis mis-ut -utili ilized zed to fav favor or the

cronies cron ies of the rule rulers. rs. To avoid this tend tendency ency and introduce introduce tran transpar sparency ency the Chie Chief  f  Execut Exe cutives ives (CEOs (CEOs)) and the Boa Board rd of Dir Direct ectors ors for 100 key eco econom nomic ic ins instit tituti utions, ons, organizations and corporations should be appointed for a fixed tenure in a clearly defined defin ed process. Once appoi appointed nted they cannot b be e arbitrari arbitrarily ly removed wit without hout cogen cogentt reasons.. These appo reasons appointme intments nts should be pla placed ced and endorsed by th the e Parliame Parliamentary ntary Committees and the removal can be challenged in the higher courts of law if done with malafi mal afide. de.

Thes These e CEO CEOs s sho should uld be giv given en specif specific ic target targets s and held accou accounta ntable ble for 

results. result s. The Annual Report Reports s of their performance and finan financial cial stat statements ements shoul should d be submitt subm itted ed to the Parl Parliam iament ent and made pub public lic.. Tho Those se who con consis sisten tently tly fail to mee meett agreed performance goals without any justifiable reasons should be taken to task.

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The political political will to carry out these above decisio decisions ns has been lacking so far. It is time that the government musters the courage, rise above narrow partisan interests and get the country out of its present crisis and a general state of despondency by taking these tough decisions.

Long-Term Direction

The impact of the structural reforms proposed for the short and medium term would wou ld signif significa icantl ntly y aff affect ect the curr current ent param paramete eters rs of Paki Pakista stan’s n’s econo economy. my.

But the

situation gets further complicated because in the next twenty five years the shape and form of the world economy itself in which Pakistan has to position itself, is going to change chan ge quite dram dramati atical cally. ly. The locu locus s of econo economic mic powe powerr is likel likely y to shift fro from m the western block to the US, Europe and Japan to emerging economies particu particularly larly Brazil, Russia, India, China Russia, China,, etc. China woul would d most probably surpa surpass ss the U.S. to become the largest economy in the the world by 2025. Pakistan’s strategic location – neighboring both Chin Ch ina a an and d In Indi dia a – offe offers rs attr attract activ ive e pros prospec pects ts if it co consc nscio iousl usly y rew rework orks s it its s fo forei reign gn economic relations. China has been an a allll weather friend of Pakistan irrespective of the kind of political political regim regimes es that have ruled Chin China a or Pakistan. Nurtur Nurtured ed under Mao Ze Tung – Chou En Lai period the friendship between the two countries has remained rock solid in spite of the tumultuou tumultuous s domestic pol politica iticall changes in Pakist Pakistan. an. In the recent years the economic ties have strengthened and a Free Trade Agreement has been signed by the two countries. countries. Howeve However, r, the volume of bilatera bilaterall trade at about $5 bill billion ion annually annual ly with Pakist Pakistani ani exports amounting to only $1.2 billion remains much below the potential. potent ial. Pakist Pakistan an should aim to achi achieve eve at least 1 percen percentt of the share of Chines Chinese e impo import rts s th that at in the the curr curren entt term terms s wo woul uld d tran transl slat ate e in into to ad addi diti tion onal al ea earn rnin ings gs of  approximately $11 billion – a significant boost to the aggregate export revenues of the country.. Foreig country Foreign n direct investm investment ent flows, joi joint nt ventures in manufac manufacturing turing industries industries,, partnership with the Chinese companies in large infrastructure projects, opening of bank branches,, transf branches transfer er of technology, exchange of scient scientists, ists, teachers and student students s would furtherr enhance Pakist furthe Pakistan’s an’s econom economic ic capabil capabilities ities.. The special his historica toricall ties can be translated into mutually beneficial economic gains. /opt/scribd/conversion/tmp/scr /opt/scribd/con version/tmp/scratch2780/800753 atch2780/80075351.doc 51.doc

 

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Peace with India should form an integral part of Pakistan’s economic agenda. Both Pakistan and Northern India contain a large number of people living below the poverty line. The proximity and contiguity between Indian Punjab and Pakistani Punjab and Rajasthan and Sindh Provinces can be profitably utilized to create clusters where agglom agg lomera eratio tion n econ economi omies es shou should ld kic kick k in.

Wat Water er sha sharing ring arran arrangem gement ents, s, inc includ luding ing

Reservoirs and Dams, alternate sources of renewal energy, grids and transmission lines, oil pipelines, railway and highway connections can help both the countries in overcom over coming ing the their ir infrast infrastruct ructural ural def defici icienci encies, es, imp improvi roving ng the con connect nectivi ivity ty acro across ss the region and expanding expanding markets for goods and servi services. ces. Touris Tourism m – ethnic and heritage, cultur cul tural al exch exchange anges, s, mus music, ic, dram drama, a, films films and spor sports ts con contes tests ts can hel help p cem cement ent the people-to-people contacts and promote a bet better ter understanding. Diversion of trade trade from informal means to official channels would reduce the transaction costs and lower the prices pric es to end-us end-users. ers.

Dis Dissem semina inatio tion n of Best Agr Agricul icultur tural al Practi Practices ces in sim simila ilarr agr agroo-

ecological ecologi cal zone can boot pro product ductivi ivity ty and farm farmers’ ers’ inco income. me. The large reser reservoi voirr of  English speaking educated youth available in Pakistan can augment the skill base of  Indian Business Process outsourcing and I.T. export industries maintaining India’s labor  arbitrage arbit rage in the global market intact intact.. Scient Scientific ific and technolog technological ical cooperat cooperation ion between the two countries can help resolve a number of problems that are common in nature – economically viable renewable energy for example. Pakis Pa kista tan’ n’s s de demo mogr graph aphic ic pr prof ofilile e can also also bec becom ome e a so sourc urce e of growt growth h an and d improvement in the living standards. As most western countries and Japan are going to face an ageing population the youth of Pakistan – if properly trained and equipped – can become part of the global labor fforce. orce. More than half of Pakistan’s population is below the age of 19 and the ratio of non-working age to working age population is on a gradual decline. The present educational st status atus whereby the net enrolment ratios at the primary level are only 53 percent and completion rate rate still lower d do o not augur well. The average years of schooling of the labor force is quite low – 3.9 while the labor force participation rate is 38 38 percent percent.. Techni Technical cal and vo vocation cational al enrol enrolment ment rat rate e is 1 perce percent. nt. With s such uch weak indicators indicators Pakist Pakistan an is not prepared. But there is no reason that accel accelerated erated and focused efforts on educating the youth not only in literacy and numeracy but in technical /opt/scribd/conversion/tmp/scr /opt/scribd/con version/tmp/scratch2780/800753 atch2780/80075351.doc 51.doc

 

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and voc vocati ationa onall ski skills lls,, mid middle dle lev level el par para-pr a-profe ofessi ssional onals s and hig high h lev level el profes professio sional nal education educat ion can transform this resou resource rce into employa employable ble manpower manpower.. Teachers, Teachers, nurses, paramed para medics ics,, lab tec techni hnicia cians, ns, acc account ountant ants, s, leisure leisure ind indust ustry ry work workers, ers, IT & Sof Softwa tware re experts would be in high demand in the future and Pakistan should establish centers of  learning learni ng and practices which can produce a contin continuous uous supply of this type of skills. skills. Of  course, changes and adaptations have to be made in light of the changing demandsupply equation. Building strong foundation at the primary school level, introducing new curriculum, trained teachers, pedagogical tools, that can retain the interests of the children, are the instruments through which this transformational change can take place. All All ha hand ndss-on on-t -the he-d -dec eck k ap appr proa oach ch in wh whic ich h pu publ blic ic,, priv privat ate, e, comm commun unit itie ies, s, no nonngovernm gove rnment ental al orga organiz nizati ations ons all part partici icipat pate e in this this educ educati ation on and trai trainin ning g expansio expansion n efforts should be encouraged and incentivized. Human capital formation would require no more than 4 percent of GDP which is finan financially cially affor affordable dable but is highly inten intensive sive in organization, management and delivery. The other major driver of the competitiveness in the global economy is going to be Inn Innova ovatio tion, n, Ent Entrepr reprene eneursh urship ip and Tech Technol nology. ogy. On the curr current ent set of indic indicato ators, rs, Pakistan Pakist an is fast losing its already low plac place e in the ladder. The constant preoc preoccupati cupation on with crisis management both political and economic has rendered the country’s ability to invest inv est in sci scienc ence, e, tec techno hnolog logy, y, hig higher her edu educat cation, ion, know knowled ledge ge crea creatio tion, n, acq acquis uisiti ition, on, assimilation and dissemination dissemination quite ineff ineffective. ective. A modest beginning was made in the early 2000s with the setting up of Higher Education Commission and some reform of  Science & Technology organizations. Faculty development, training overseas for Ph.d degrees, e-learning and digital libraries, liberal research grants were beginning to make some modest difference. difference. But the incomi incoming ng government has reversed the trend and cut back both the recurring and development expenditures. There is a strong apprehension that the country may suffer a brain drain as a result of this policy and the investments made ma de so fa farr in the infr infras astr truc uctu ture re may go wa wast ste. e.

If thi this s ha happ ppens ens,, th the e set bac back k to

Pakistan’s efforts to enter the race for global knowledge economy may prove abortive. A long term strategy with five year rolling action plans debated and approved by the Parliam Parl iament ent wit with h a broa broad d pol politi itical cal cons consens ensus us sho should uld driv drive e the know knowled ledge ge eco econom nomy y /opt/scribd/conversion/tmp/scr /opt/scribd/con version/tmp/scratch2780/800753 atch2780/80075351.doc 51.doc

 

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agenda of Pakistan. Pakistan. While pl planning, anning, gu guideli idelines, nes, fundi funding ng and monito monitoring ring should be entrusted to the Higher Education Commission and a similar Science and Technology Commis Com missio sion n the ins instit tituti utions ons sho should uld be giv given en reso resourc urces, es, oper operati ational onal aut autono onomy my and empowered empowe red to implemen implementt the plan. Knowle Knowledge dge creatio creation n and applicati application on cannot take place under controls controls and rigid bureaucr bureaucratic atic rules. A new organizati organizational onal model on the lines of China and Korea would be more appropriate with suitable adaptations. Engulfing the above positive scenarios is the uncertainty that has been created by the Climate Change. Pakistan’s life line depends upon the River Indus which is sustained by the glaciers of the Himalayan mountains. The global warming is likely to accelerate the melting of the glaciers in the first instance . The recent unprecedented flood fl oods s in Pa Paki kist stan an are are be bein ing g attr attrib ibut uted ed by ce cert rtai ain n ob obser serve vers rs as a res resul ultt of th this is phenomenon. But once the glaciers have all melted away the source of Indus will almost dry dry up causing an enormo enormous us economi economic c damage to Pakist Pakistani ani agricul agriculture. ture. As a proud possessor of one of the largest irrigation system in the world Pakistan’s entire agriculture system is dependent upon Indus. Pakistan is als also o attempting tto o build hydro electric generation stations to exploit its comparative advantage in energy . As the population of Pakistan would reach 250 million its requirements for food and fibres would also rise proportionately. So far it has been the productivity gains from water usage ,storage, lining of canals , fertilizer consumption that has allowed the domest dom estic ic prod product uctio ion n to keep keep pa pace ce with with the the po popu pula lati tion on gro growt wth. h. Bu Butt in cas case e th the e predictions of the scientists about the glacial melting are borne true the whole valley will turn into into an ari arid d zone a and nd Pakist Pakistan an may be confro confronted nted wi with th foo food d securit security y unless tthe he international community either finds mitigants for this catastrophe or help Pakistan in adapting to the new realities through expanded research for higher yielding varieties using usi ng Dro Drough ughtt resi resista stant nt see seeds, ds, gen geneti etic c mod modifi ificat cation ion,, changes changes in cro croppin pping g pat patter terns, ns, improv imp roved ed

cro crop p man managem agement ent techn techniqu iques, es, bette betterr soi soill con conserv servati ation on tec technol hnologi ogies. es. .

Pakistan’s poor farmers already vulnerable and b bereft ereft of any social safety nets will fi find nd it difficult difficult to adapt to new varieties, planting and conservation ttechniques echniques and cropping patterns. patte rns. Their financ financial ial capacit capacity y and risk aversio aversion n will limit invest investment ment in adaptat adaptation ion

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spread. The national and international experts will have to work together to comprehend the implications of the Climate Change on Pakistan;s economy in the future. Rural Rur al ag agric ricul ultu ture re ec econ onom omy y will will lose lose its its lu lust ster er in an any y ca case se be beca caus use e of th the e inevi inevita tabl ble e st struc ructu tural ral ch chan ange ges s that that will will take take plac place. e. In 2010 2010,, fo four ur out of ev ever ery y te ten n Pakistanis Pakist anis live in an urban are area. a. By 2025, the maj majority ority of Pakis Pakistanis tanis wou would ld live in a town, city or metropolitan area. The uprooting of farmers because of the climate change effects may in fact accelerate the process and add to the numbers in the urban areas. This growing urbanization would impose, in its spate, a number of social, political and institutio insti tutional nal changes of signifi significant cant nature. The traditi traditional onal biradri biradri,, tribal, kith and kin affiliations that characterize the rural societies would break down and completely new relationships would be forged with alt altered ered behaviors and norms. Politically, tthe he patronclient client base based d syst system em wou would ld be rep replac laced ed by a more res result ult-bas -based, ed, serv service ice-ori -orient ented ed dispensation.. Those who want to get re-electe dispensation re-elected d would have to demonstrate that that they deserve the votes on basis of their track record and performance during their tenures. The demonstration demonstration effect from across the border would also have some salutary effect on the internal politics of Pakistan. A populist party led by Laloo Parsad Yadav which ruled for over 15 years on the basis of patron-client relationship was trounced for the second time in succession by Nitish Kumar leading a party that took pride in promot promoting ing good governance and development for the collective good of the large numbers of the poor. The return of Sheila Dixit at the electoral polls several times over as the Chief  Minister of Delhi can be attributed to the tremendous progress she had brought about in this metropolitan city during her tenures of office. Metro Delhi is considered , by far, one of the most efficient efficient public tr transport ansport syst system em .In the coming decad decades es these winds of  change will also start sweeping the political corridors of power in Pakistan. The growing expectations of an urban class buttressed by an independent and vigilant judiciary, powerful media and vibrant Civil Society organizations will certainly pose a serious threat to the entrenched political classes of Pakistan. The resulting reconfiguration of  political classes and emergence of new political actors on the scene are likely to have some perceptible perceptible imp impact act on evoluti evolution on of a new Economic order in the coun country try disti distinct nct from the historical or the current scenarios. /opt/scribd/conversion/tmp/scr /opt/scribd/con version/tmp/scratch2780/800753 atch2780/80075351.doc 51.doc

 

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Economically, the share of services and manufacturing industries would rise and the absorpt abso rption ion of mig migran rants ts and sur surplus plus rura rurall labor would pose a maj major or challe challenge nge.. The contest between between those already settled in the urban areas and the migrat migrating ing populatio population n for the scare resourc resources es – land, water, trans transport, port, service services s – would result in clashes and conflicts. If these two groups have separate ethnic and political affiliations, violence can erupt as has been happening happening in Karach Karachii in the recent month months. s. These conf conflicts licts can be avoided only if there is a proper planning to meet additional demands for land, housing, transport, energy, food, water, sewerage and sanitation, and ot other her urban services. This wi willll be pr pred edica icate ted d up upon on co cons nsid idera erabl ble e stren strengt gthe henin ning g of th the e cap capac acit ity y of th the e urban urban management managem ent instit institution utions. s. Resourc Resource e base at the local level through taxati taxation on and user  charges can be augmented if appropriate legal, administrative and financial powers and authority are devolved to to urban managers. Multiple and overlapping jurisdictions in the same sam e met metrop ropoli olitan tan are area a hav have e so far im impede peded d int integra egrated ted pla planni nning ng and del delive ivery ry of  services in an efficient and effe services effective ctive mann manner. er. Innova Innovative tive solut solutions ions have to be found to organize organiz e the urban managemen managementt systems. Haphaz Haphazard ard and unplanned land uti utilizati lization on that has made our cities pits of squalor and squatters has to give way to a more system sys temati atic c mix of resi residen dentia tiall – com commer mercia ciall – ind indust ustria riall zones zones tha thatt conf conform orm to the emerging standards of environmental safeguards. The cumulative effect of a strong civilian administration and judicial system, regional economic integration with China and India, demographic dividends, innovations and knowle knowledge dge crea creati tions ons,, risi rising ng incom incomes es

and rapi rapid d urb urban aniz izat atio ion n wo woul uld d be th the e

emergence of a vibrant middle class that will challenge the monopoly of the entrenched elites who have dominated the Pakistani scene for the last sixty years. Jason Burke, a Guardian Guardian Reporter has argued that thi this s middle class in Pakist Pakistan an will consist of Mehran man who will be educated and skilled but religiously conservative, opposed to the western style of living and hi highly ghly nationalistic in temp temperament. erament. His main thesis has been captured by Dawn columnist Irfan Husain who elaborates this concept

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 “In Pakistan, the hierarchy on the roads reflects that of society. If you are poor, you use the overcrowded buses or a bicycle. Small shopkeepers, rural teachers and better-off farmers are likely to have a $1,500 Chinese or Japanese motorbike…. Then come the Mehran drivers. A rank above them, in air-conditioned Toyota Corolla saloons, are the small businessmen, smaller landlords, more senior army officers and bureaucrats. Finally, there are the luxury four-wheel drives of ‘feudal’ landlords, big businessmen, expats, drug dealers, generals, ministers and elite bureaucrats. The latter may be superior in status, power and wealth, but it is the Mehrans which, by dint of numbers, dominate the roads.”  r oads.”  This growing affluence has already caused a major power shift, with the urban population now having a bigger say after years of being ruled by feudal landowners. As urbanisation gathers pace, Pakistan’s traditional power elite will increasingly come from the cities, and not from the rural hinterland. This will w ill have a profound impact not just on politics, but on society as a whole. As Burke observes in his Prospect article:

 “Politically, the Bhutto dynasty’s Pakistan People’s Party, mostly based in rural constituencies and led by feudal landowners, will lose out to the Pakistan Muslim League of  Nawaz Sharif with its industrial, commercial, urban constituency. Culturally, the traditional, folksy, tolerant practices in rural areas will decline in favour of more modernised, politicised Islamic strands and identities. And as power and influence shifts away from rural elites once co-opted by colonialism, the few elements of British B ritish influence to have survived will fade faster.”  Often, perceptive foreigners spot social trends that escape us because we are too close to them to see the changes going on around us. For instance, Burke identifies the shift away a way from English, and sees ‘Mehran man’ as urban, middle class and educated outside the elite English-medium system. He sees Muslims being under attack from the West, and genuinely believes that the 9/11 attacks were a part of a CIA/Zionist plot. Actually, my experience is that many highly educated and sophisticated people share s hare this theory. Burke continues his dissection of the rising Pakistani middle class: “Mehran man is deeply proud of his country. A new identification with w ith the ummah, or the global community of  Muslims, paradoxically reinforces rather than degrades his nationalism. For him, Pakistan was founded as an Islamic state, not a state for South Asian Muslims. Mehran man is an  ‘Islamo-nationalist’. His country possesses a nuclear bomb….” 

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Mehran man’s views about the region and the world reflect contradictions and confusion. While India is home to Bollywood and IPL cricket, it is also viewed as the historic enemy. And while increasingly Islamic jihadis who kill Pakistanis are seen as terrorists, those who kill westerners or Indians are called freedom fighters. Small surprise, then, that public opinion in Pakistan no longer favours a pro-western pr o-western agenda. In his encounters with army officers, Burke sees a growing alienation from western goals and aims. According to him, the army ar my is now full of Mehran men, and this has dramatically changed the institution’s orientation. He concludes on this sobering note:  “All this poses problems for the West. Our policy towards Pakistan has long been based on finding the interlocutor who resembles us the most — Pervez Musharraf, Benazir Bhutto, B hutto, now her widower — and then trying to persuade them to fit in with our agenda. But the people we are talking to find themselves more and more cut off, culturally and politically, from those they lead, and less and less capable of implementing the policies we want. Pakistanis are increasingly defining their own interests, independently of the views of their own pro-western leaders. And Mehran Mehra n man will soon be in the driving seat.”  s eat.”  As Pakistan’s social and psychological transformation from a South Asian to a Middle Eastern state continues on the track that was unwittingly set in 1947, there are a re huge implications for us and for the whole region. Unfortunately, not many policymakers are studying this trend. As usual, we will be caught by surprise when the metamorphosis is complete.” 

Should the prog prognosis nosis of Mehran M Man an rising as the pr predomin edominant ant force com come e true tthe he combination of these traits in a Pakistani will naturally run foul of the trends of a global citizen. The major worry is about the downside risk to this scenario of a moderate and conservative conserv ative Musl Muslim. im. In case demograph demographic ic transit transition, ion, the bulge of youth and planne planned d urbanization are not handled effectively religious fundamentalism and extremism may take a strong hold over the society and polity. The underlying reasons for this tendency should not be underestimated. underestimated. The frust frustration ration caused caused by rising unem unemployme ployment nt among the youth, lack of access to essential public services , a highly unjust and unequal economic order arising ffrom rom maldistribut maldistribution ion of national iincome ncome and the growing st stock ock of Madrassah educated young men and women can prove to be socially explosive. In thatt eve tha event, nt, Pakist Pakistan’s an’s isola isolatio tion n fro from m the res restt of the wor world, ld, its Par Pariah iah sta state te sta status tus,, /opt/scribd/conversion/tmp/scr /opt/scribd/con version/tmp/scratch2780/800753 atch2780/80075351.doc 51.doc

 

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reputation as a source of terrorism and widespread anti-West and ant-India sentim sentiments ents would wou ld onl only y tak take e the cou countr ntry y far awa away y from th the e cours course e of int integra egrati tion on int into o the wor world ld economy econom y which most develo developing ping count countries ries are aggressiv aggressively ely pursui pursuing. ng. This scena scenario rio can only be averted if a farsighted, committed government in Pakistan is able to make the state functional, growth equitable and basic services accessible to the poor. A global citizen will have very little emotional attachment to the country of birth, will have little little affinit affinity y to relig religion, ion, and will feel comforta comfortable ble in different livin living g environment environments. s. This clash of culture and beliefs between a religiously conservative Pakistani citizen looking inward and an outward looking liberal global citizen could possibly marginalize Pakistan in the shaping of future future power dynamic dynamics s in the world. On the other hand, if a diff different erent sort of Pakistani middle class which we may call Chery man (for the Chinese car Chery) emerges that may feel ease both within the country as well as outside and is not antagonistic and hostile to those who do not share his world view, the prospects of  Pakistan playing a more vital role in the comity of nations cannot be ruled out. The crux of the problem therefore lies in the arena of public policies, education systems, curricula (leaning toward vocational and technical skills or towards religious orthodoxy) orthod oxy) and governanc governance e mechanism mechanisms s in Pakistan over the next two decad decades es or so. They can either catapult Pakistan as a responsi responsible ble global player making the lives of its citizens comfortable or plunge Pakistan into an ever continuing struggle for its citizens to survive and sustain themselves.

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REFERENCES Burke, Jason; Letter from Karachi, Prospect April 2010 Ban Ki-Moon, Pakistan Needs our help Now, International Herald Tribune, August 18, 2010 Government of Pakistan, The 2010 Floods: Damage and Needs Assessment (DNA) and Reconstruction, Pakistan Development Forum held at IIslamabad slamabad on Nov 14,2010 Husain, Irfan: The rise of Mehran Man, DAWN, Karachi ,April 17,2010 Husain, Ishrat ; Floods: the next phase, DAWN Karachi Sept 8, 2010 In Inte tern rnat atio iona nall Mo Mone neta tary ry Fu Fund nd,, Pa Paki kist stan an :Use :Use of Fu Fund nd Re Reso sour urce ces— s—re requ ques estt fo for  r  Emergency Assistance—Staff report Sept 15, 2010 ------------------------------------------------------------------------------------ Pak Pakist istan: an: Fou Fourth rth Rev Review iew und under er the Sta Stand-b nd-by y arrangements—Staff report June 1, 2010 Jinnah Institute, Proceedings of the Conference on Pakistan Flo Floods ods held at Islamabad on Sept 23,2010 World Bank and Asian Development bank; Pakistan Floods 2010: Preliminary Damage and Needs assessment , November 2010

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