Cowasjee Articles

'The Bare Bones'

1st september 1995

I RECENTLY had the pleasure of once again meeting a sane senior Pakistani international civil servant, widely acclaimed in the lending and borrowing world for his acumen and his understanding of high finance. I found him very distressed.

What can one do, what can one individual do? he asked. You can speak, I told him, and I can write. Many read, some may comprehend. Should the people not be informed? Is it not their right? You stay away, but your soul is here. You despair, you feel for your country.

He agreed to speak, and authorised me to quote him verbatim.

What do you see, hear, feel, sense, smell? I asked.

Each time I am in Islamabad I smell decay.

What do you see?

I see, feel and sense.

“A system that consists of the legislative, the executive, the judiciary — a closed system where reform and change cannot come from within.”

“A parliament that is an instrument of the feudal classes because it does not represent the changing structure of Pakistan's population which is substantially urban.”

“It takes crores of rupees to contest an election. All except the mooned or their proxies are disenfranchised.”

“The civil service which was a check on the excesses of the politicians was emasculated by Bhutto, and now, for all practical purposes, there is no civil service in Pakistan.”

“There is no accountability. Pakistan today is one of the most corrupt countries in the world. Examples of corruption are printed in the Press almost every day of the week yet nothing happens, because of this closed system, where all branches of the government are a part of the same game. In such a case, change has to be brought in from the outside and it is very likely to be violent.”

“The entire system of government has become perverse. If you are a common man in Pakistan you have the right to ask what you get from the taxes you pay:— Do you get security for self and family? No. Do you get education for your children? No Does the government provide health facilities? No Is there a working infrastructure in the cities? Go to the less privileged areas of Karachi and find the answer for yourself.”

“In sum, the government, of course, provides resources for the armed forces, it services the national debt which is galloping at an alarming pace. The rest is merely taking from the many and distributing the takings to the privileged few, e.g. loans from Pakistan's public financial institutions which are never repaid.”

“Licences and permits are distributed for setting up sugar mills, power plants, etc, etc, where immediate profit is gained from over-invoicing machinery or fixing inconceivably high power tariffs.”

“Economic management is in the pits. Efforts made towards education rank lower than in many African countries. Literacy is declining, particularly amongst women. Women in Pakistan have the right to ask their woman prime minister, who sells herself to the world as one of the only three women PMs in the Muslim world, exactly what she has done for the women of her country.”

“The fiscal situation is out of control. Taxes are paid by a very small number of people, maybe 150,000, and are extorted from those who pay. The rich, including the PM and her husband and the leader of the opposition pay little. The contribution they make to the state, with its practically non-existent social services, bears no relationship to their style of living. The fiscal deficit is ballooning, partly because of the large number of jialas who have been inducted into various institutions of the government to do little or nothing.”

“Pakistan's options are limited. If it is to avoid inflation of the Latin American kind it must cut social services because the options of cutting expenditures on defence or debt servicing are not available to it. The people will not accept further increases in taxes or in prices.”

“Pakistan only avoids the sort of hyper-inflation that Latin America had because the illiterate Pakistani masses have not yet discovered the dollar. The day they start rushing to convert their rupees into dollars to protect themselves against inflation the game will be over.”

“The government short-term liability is over $5 billion. Pakistan's reserves are less than $2 billion and going down. If the Pakistanis and foreigners who hold $5 billion liability start cashing in, default will be impossible to avoid.”

“I do not trust any of Pakistan's statistics, including those on growth or inflation. My view is that inflation is significantly higher than indicated by the government.”
“In the entire Pakistan government there is not a single economist of any calibre who can even mobilise the people to think about the weightier issues that our country faces.”

What can be done?

“This situation has no answer. Benazir is the problem, only because she is the manifestation of the system as is Nawaz Sharif. If the country chooses to back either of them, then the country must sink further.”

“The answer has to be found outside the system and there is no doubt that the solution will have to involve people who are not a part of the oligarchy that rules Pakistan. The country has to go through many years of fundamental reforms which must include a clear-cut strategic view of our defence needs in relation to our economic realities.”

“The lesson of the Soviet Union must not be lost. The United States ultimately destroyed it by making armaments too expensive. Pakistan, vis-a-vis India, is in a similar situation.”

“The state is too large and unproductive. There has to be a sustained and large cut-back in the state's expenses so as to release resources for social services and development activities.”

“There has to be massive deregulation so that the state does not hinder private activities and is not an engine of rent collection as it now is.”

The state's capacity for the provision of social services and public infrastructure has to be strengthened. Firm targets for the commitment of financial and human resources have to be established — education, mass literacy, health, etc, etc.”

“There has to be a reconstruction of the executive branch with professional career civil services based purely on merit and competition.”

“Pakistan is a multi-ethnic society. It cannot survive on the basis of a centralised government. There has to be massive decentralisation, as there is no way a highly centralised, inefficient and corrupt government can deliver the goods on social services and infrastructure. The only way to bring the government closer to the people is through devolution to the provinces,by strengthening them, and by reviving and strengthening local bodies.”

“This is not a small agenda, and it will probably never be achieved.”

His conclusion: So where is Pakistan going? Because of the sins of this government and its predecessors society must continue to mortgage its future in terms of higher debt, and compromise its sovereignty to keep the money flowing from international organisations to keep our trade channels open. Any improvement in the standard of living, particularly urban, is not within sight. Karachi may merely be a foretaste of what we may see in the other cities of Pakistan.

There is a risk that Pakistan will join the many countries in Africa and soon become one of the failed states. This risk draws closer every day. The real fear is that if things slide as they are doing, sometime early in the next century there may not be a State of Pakistan.

My conclusion: I share his foreboding. I share his fear. Let any who may disagree, barring of course the government 'parrots', write in.

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