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EDITORIALS

A lacklustre beginning
UPA-2 still has time to redeem itself

T
he
UPA has two options: muddle along or draw lessons from the poor immediate past. Celebrating his government’s second anniversary in low key on Sunday, the Prime Minister vowed to fight corruption. To be successful, he needs to stop dithering.

“Revenge” attack
Question mark on Pak N-installations
S
UNDAY night’s attack on Pakistan’s Mehran naval air base in Karachi is perhaps the biggest strike by the Taliban against a leading military installation since guerrillas attacked the army’s Rawalpindi headquarters in October, 2009. This was apparently in retaliation for Osama bin Laden’s killing and the Pakistan government’s ties with the US. This particular navy station might have been specifically chosen for its role in helping conduct surveillance against movements by militant groups along Pakistan’s coast. 



EARLIER STORIES



Palestinian homeland
It will help Israel get peace

T
he
Israeli rejection of President Barack Obama’s proposal for Tel Aviv to withdraw from all the Palestinian territories occupied in the 1967 war is not surprising. Israel has been arguing that over 500,000 Israelis living in the settlements in the West Bank and elsewhere cannot be uprooted. It has refused to give more land than what has already been handed over to the Palestinians. East Jerusalem (the Arab part of Jerusalem), too, Israel argues, has become non-negotiable now.

ARTICLE

PM’s productive Kabul visit
The post-Osama endgame has begun
by Inder Malhotra
A
NYONE who heard Prime Minister Manmohan Singh’s speech to Afghan Parliament, or has read it since, would know why his visit to Kabul has been such a success and so popular with the Afghan people. Recalling the close and deep friendship and cooperation between the two peoples since antiquity, he charmed his audience by declaring that he had come to “renew these ties”, and had “no other agenda”. 



MIDDLE

Babe di full kirpa
by V. K. Kapoor

T
raining
the Delhi Police for the Commonwealth Games was a great experience. I found this close interaction enriching and educative. Every day the class consisted of 50 policemen of all ranks.



OPED NEIGHBOURHOOD

If it is possible that a peace accord with the Baloch nationalists is necessary, the next step is identification of elements with whom a compact would be meaningful.
Towards peace for Baluchistan

I.A Rehman
A
REGIONAL consultation on intra-state conflicts in South Asia, caused by some minority communities’ assertion of their right to autonomy, offered Pakistan’s policymakers and students of politics a great deal of food for thought, especially in view of a lack of serious discourse on the subject in this country.

Window on pakistan
Judicial snub for Zardari
Syed nooruzzaman

I
t
is well known that Pakistan is in deep trouble because of the killing of Osama bin Laden by US forces in Abbottabad, a militarily significant town near Islamabad. But Pakistan President Asif Ali Zardari’s worries are different. Pakistan’s judiciary, with its newly found independence, never loses an opportunity to give him sleepless nights.

Stagnating Pak economy
Sakib Sherani
R
ECENT numbers depict a painful picture of the economy, the relative prosperity of the farm sector notwithstanding. Private investment has sunk to an all-time low, while the surge in inflationary pressure is at a historic peak.

 


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A lacklustre beginning
UPA-2 still has time to redeem itself

The UPA has two options: muddle along or draw lessons from the poor immediate past. Celebrating his government’s second anniversary in low key on Sunday, the Prime Minister vowed to fight corruption. To be successful, he needs to stop dithering. Had he not succumbed to the DMK blackmail on getting the Telecom portfolio for A. Raja, stopped the scandalous 2-G spectrum allocations midway, removed CWG chief organiser Suresh Kalmadi the moment the stink of scam arose and said no to the appointment of a tainted official, P.J. Thomas, as the Chief Vigilance Commissioner, an upright Dr Manmohan Singh would have spared himself the embarrassment of seeing his government embroiled neck-deep in corruption.

If coalition compulsions had held him back, he should have asserted himself and kept his image and the interests of the country above those of the party. The first lesson to learn, therefore, is zero tolerance towards corruption and a quick response to any wrongdoing. Instead of owning responsibility for the messy affairs, including a botched-up list of most wanted terrorists, the UPA fields spokespersons to explain things away. Pointing a finger at the BJP’s Karnataka cover-up will not hide the party’s own shady dealings. Politicking can help up to a point. There is no alternative to transparent, responsive, good governance.

The UPA still has three years to redeem itself. The way forward is to pursue reforms, which have got stalled even when there is no Red signal from an irritating ally. Apart from the much-discussed Lokpal Bill, the country is eagerly awaiting the goods and services tax (GST), which can economically unify the country but is held up by opposition from states. If the Opposition lets Parliament function, the government has a lot of business ahead: the land Bill, the Judicial Standards and Accountability Bill, autonomy for the CBI, diesel decontrol and opening up of the financial, insurance and retail sectors. A high growth rate has produced more billionaires than before, but the aam aadmi is weighed down by high prices. 

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“Revenge” attack
Question mark on Pak N-installations

SUNDAY night’s attack on Pakistan’s Mehran naval air base in Karachi is perhaps the biggest strike by the Taliban against a leading military installation since guerrillas attacked the army’s Rawalpindi headquarters in October, 2009. This was apparently in retaliation for Osama bin Laden’s killing and the Pakistan government’s ties with the US. This particular navy station might have been specifically chosen for its role in helping conduct surveillance against movements by militant groups along Pakistan’s coast. The ease with which more than 15 Taliban militants managed to enter the highly fortified area and cause extensive damage not only shows that the Taliban have become more powerful and sophisticated in their planning and attacks but also underlines the possibility that they have sympathisers and insiders in the security establishment. Less than a month earlier, they had attacked navy bases in Karachi, killing four persons and injuring 56. Two days later, four navy personnel and one civilian were killed in a bomb attack on a navy bus in the capital.

Interior Minister Rehman Malik is as usual trying to sell the line that this attack shows that Pakistan is a victim of terrorism and is suffering. He wants to gloss over the fact that the Tehreek-e-Taliban is Pakistan’s own creation. But in the rest of the world, the attack has raised new concerns about the capability of Pakistan to secure its considerable nuclear arsenal. US President Obama’s statement that if necessary, it would carry out an Abbottabad-type operation yet again, needs to be seen in that light.

Unfortunately, any such measure would be a double-edged sword. As it is, there is strong reaction within Pakistan against the “attack” on its sovereignty. The criticism of the leaders may grow even louder for their failure to protect the Mehran base. It is an open secret that Pakistan’s intelligence agencies maintain ties with guerrillas fighting American-led forces in Afghanistan. The tilt of some of these officials may now grow even more pronounced. Keeping a nuclear-powered country on an even keel is going to be a huge diplomatic challenge.

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Palestinian homeland
It will help Israel get peace

The Israeli rejection of President Barack Obama’s proposal for Tel Aviv to withdraw from all the Palestinian territories occupied in the 1967 war is not surprising. Israel has been arguing that over 500,000 Israelis living in the settlements in the West Bank and elsewhere cannot be uprooted. It has refused to give more land than what has already been handed over to the Palestinians. East Jerusalem (the Arab part of Jerusalem), too, Israel argues, has become non-negotiable now. The issue of the return of the Arab refugees to their homes in Israel, as Israel asserts, has ceased to have any meaning today. Then what is there to negotiate? Israel has been hinting that only a small part of the occupied territories is practically possible to be vacated provided it does not jeopardise its security interests.

But is this the way to end the Israeli-Palestinian conflict? Can it be called justice? Can it bring peace to Israel it so desperately wants? President Obama’s call for Israel to withdraw from all the occupied Palestinian territories is justified in view of the fact that no country has the right to annex another nation’s territory on any pretext. Israeli Prime Minister Benjamin Netanyahu’s argument is unconvincing as he says that Israel can never accept an idea that can compromise its security. What Mr Netanyahu wants the Palestinians to agree to amounts to asking the weak to accept the victor’s justice!

Israel also says that it cannot agree to hold negotiations with the Palestinians so long as Hamas continues to rule over the Gaza Strip. The Hamas movement, accused of being involved in terrorist activities, is unwilling to give up its stand — which was the stand of all the Palestinian groups a few years ago —that Israel, transplanted in an alien geographical area, has no right to exist. Whatever may be the Hamas belief and stand, it came to power after winning UN-monitored elections. The Hamas right to rule, therefore, cannot be questioned. But all this has made the situation quite complicated for President Obama, who seems to be genuinely interested in getting the vexed issue resolved. This single issue is believed to have been behind the strong anti-US sentiment in the Arab world and elsewhere among the Muslims. 

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Thought for the Day

Dream as if you’ll live forever. Live as if you’ll die today. — James Dean

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PM’s productive Kabul visit
The post-Osama endgame has begun
by Inder Malhotra

ANYONE who heard Prime Minister Manmohan Singh’s speech to Afghan Parliament, or has read it since, would know why his visit to Kabul has been such a success and so popular with the Afghan people. Recalling the close and deep friendship and cooperation between the two peoples since antiquity, he charmed his audience by declaring that he had come to “renew these ties”, and had “no other agenda”. His decision to stay in Kabul overnight despite security threats also sent a message to all concerned. This does not mean that he did not address the problems of the day and of the future, especially now that the endgame in war-ravaged Afghanistan has begun, but more about that presently.

First, it needs to be mentioned that Dr. Singh was the first head of government to visit Kabul after the killing of Osama bin Laden by the American Special Forces deep inside Pakistan practically under the nose of the all-powerful Pakistan army and its main spy agency, the Inter-Services Intelligence directorate (ISI). The profound repercussions and ramifications of this were obviously on the agenda during Dr. Singh’s talks with his host, President Hamid Karzai.

Substantively, the Prime Minister announced a fresh $500-million aid to Afghanistan, in addition to $1.5 billion given already. More importantly, he declared that as Afghanistan moved towards “assuming full responsibility for its security”, India stood ready to “widen its cooperation in this area”. The two countries are now strategic partners but without any Indian military footprint on Afghan soil. Of great significance is Dr. Singh’s offer to train Afghan police officers, if only because in the post-America Afghanistan, the police would have a bigger role than that of the Afghan National Army. Of course, the Indian commitment to rebuild Afghanistan’s Parliament building, infrastructure, schools and hospitals continues. Interestingly, the Prime Minister made a special mention of the Zaranj-Delaram Highway and the transmission line from Pul-e-Khumeri that brings electricity to Kabul.

Overall, Dr. Singh’s message was that while India’s role there would be what Afghans want it to be, instead of reducing its profile, it intends to raise it. He took care to add that the Indian presence in Afghanistan was not and would not be directed against any other country, and he made it a point to mention Pakistan specifically. Thus he was telling Pakistan that he remains steadfast in wanting to resume dialogue with it. Surely, it is time that Afghanistan should cease to be an irritant in India-Pakistan relations.

Not many Indians have any illusion that this would be easy to achieve. Pakistan has always objected to any Indian presence in Afghanistan and has constantly made the baseless allegation that Indian consulates in Jalalabad and Kandhar are sources of “interference” in Balochistan. In the post-Osama mess, in which the Pakistan Army is in the unfamiliar torment of being criticized by the people for either complicity in the American operation at Abbottabad or incompetence, a change in the established Pakistani mindset is unlikely. However, before discussing briefly the situation within Pakistan, that between the US and Pakistan and the impact of the entire tangled web on the region, let me mention what was perhaps the most important part of Dr. Singh’s pronouncements in Kabul.

Reversing the Indian position on the controversial issue of “reconciliation with the Taliban”, the Prime Minister recognised that this was what the Afghan government and people wanted. He therefore declared that India would go along with it. But he carefully added the nuance that the peace process must be “Afghan-led”. Pakistan wouldn’t like it, of course, but other countries in the region would surely welcome it. For the entire region, including Iran, has a stake in what Dr. Singh called “a secure, independent, prosperous and stable” Afghanistan.

Conspicuously missing is any reference to Afghanistan’s “neutrality”. One reason for this may be that the question of long-term presence of foreign (US and NATO) troops there is still unsettled. The US will start drawing down its forces from Afghanistan in July, but the bulk of them would remain until the end of 2014. Talks are now on for the presence of some American and NATO forces beyond that date which would need foreign bases.

Pakistan is opposed to this idea because it wants the post-America Afghanistan as its backyard. That is why some days before the killing of Osama Pakistan’s Prime Minister YousUf Raza Gilani, accompanied by General Ashfaq Parvez Kayani and the ISI chief, Lt.-General Shuja Pasha, went to Kabul to “persuade” President Karzai not to allow long-term American and NATO presence in his country.

In this context, it is noteworthy that General Kayani has since raised the ante. Not only he and the civilian government condemned the US for violating Pakistan’s sovereignty but also the country’s Parliament has passed a resolution to the same effect. There is a clamour in the country for a review of the relationship with America and a demand for a judicial inquiry into the Abbottabad episode. There is even talk of stopping supplies to the American and NATO forces in Afghanistan through Pakistan.

More significantly, General Kayani has flashed the China card presumably to scare the Americans. Mr. Gilani has visited Beijing. The question, however, is whether China, for all its “all-weather friendship” with Pakistan, would be willing to take on the US.

In any case, the US seems unimpressed. President Obama continues to demand full information on the “support system” for Osama and the role of the ISI in it. The US has already secured access to Osama’s three widows and, as announced during the visit to Islamabad of Senator Kerry, the CIA and the ISI have stopped exchanging intelligence. The trial in Chicago of Rana is almost certain to bring out more dirt on Pakistan’s duplicity over the war on terror.

To cut a long story short, US-Pakistan relations had sunk low even before Abbottabad. Today, they have reached the lowest depth. But, as in the past, so now, there won’t be a total breach between the uneasy allies. Each side needs the other.

The latest word from Islamabad about this country is the threat by Lt.-Gen. Pasha (one had thought he was being made the scapegoat) that he had already identified targets in India and done the necessary rehearsals to strike in case of any misadventure by this country. This is cheap bombast. But then why blame Pasha when the Indian Army and Air Force Chiefs had earlier made equally uncalled for statements?

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Babe di full kirpa
by V. K. Kapoor

Training the Delhi Police for the Commonwealth Games was a great experience. I found this close interaction enriching and educative. Every day the class consisted of 50 policemen of all ranks.

A policeman believes in law and order in a curiously innocent way. He believes in it more than does the public he serves. There is always a smouldering resentment against the public he serves. They are at the same time, his wards and his prey. As wards they are ungrateful, abusive and demanding. As prey they are slippery, dangerous and full of guile. He is exposed to countless temptations and dangers. Condemned while he enforces law, and dismissed when he does not.

I found that after two periods, I could open a direct pipeline to their psyche. After that the discussion used to be free and frank. We talked about the problem of alcoholism in the police, corruption, the behaviour and attitude of senior officers in a relaxed and friendly atmosphere. A DSP told me that the bosses in the police lick above and kick below. They use, misuse, and abuse their position.

The subjects assigned to me were Attitude, Leadership, Motivation, Communication Skills and Stress Management. As I was talking about Positive Attitude, a young Sub-Inspector got up, and asked me as to who was my role model in life.

I told him that my role model was a Punjabi truck driver. He asked me to explain. The whole class was all ears. I told him that he starts from Amritsar and he has to reach Siliguri. If you ask him how he is, his reply is “Chardi Kala” (top of the world), and if you ask him about life, his reply is “Maujan Hi Maujan” (all very enjoyable) and on the front of his truck he writes “Babe di full kirpa” (God’s blessing). I told him that it signifies two things — “Faith in God”, and “Faith in your own self”. He is fully conscious of the problems on the route. The police harassment and corruption, bad weather, the flat tyre, and still he says “Chardi Kala”. I told them if you are prepared to take on life without allies, the allies come. There was a pindrop silence in the class.

There were some erratic moments. A lady talking about communication skills told the cops, that they should smile, look into the eyes of the listener and communicate coherently. A cop remarked: “Madam, Ek Bar Aap Ankhon Me Dekh Kar Muskra De To Bahar Aa Jaye” (If you look into the eyes and smile, there will be spring).

I asked her how she reacted to it. She said she ignored the remark, and saw a look of disapproval on the faces of others. Another lady told me that she had gone to the AIIMS. A cop recognised her, and was extremely helpful and took her to the doctor and got the needful done. She told me that cops are basically good human beings.

Recently, I had to catch a flight. I was delayed. As I reached the airport a young cop accosted me, and helped me through all the formalities.

As he was walking with me to the aircraft, I noticed that he had earned a rank. He had become an Inspector. I congratulated him. He smiled and said: “Sir, Babe di full kirpa”.

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OPED NEIGHBOURHOOD

If it is possible that a peace accord with the Baloch nationalists is necessary, the next step is identification of elements with whom a compact would be meaningful.
Towards peace for Baluchistan
I.A Rehman

A REGIONAL consultation on intra-state conflicts in South Asia, caused by some minority communities’ assertion of their right to autonomy, offered Pakistan’s policymakers and students of politics a great deal of food for thought, especially in view of a lack of serious discourse on the subject in this country.

The consultation organised by the South Asian Forum for Human Rights discussed conflicts arising at the time of state formation on the inclusion of certain territories in new states and their demand for self-determination, dissatisfaction with the existing social contract and the growth of democracy deficit in highly centralised states, and the rise of minority demands for ethnic homelands.

The focus was on an audit of peace accords negotiated for the resolution of some of the conflicts in South Asia, such as the agreements with the Nagas, the Mizos and the Bodos in India and with the tribal population of the Chittagong Hill Tracts in Bangladesh. Also discussed were the autonomy movement in Madhes, Nepal, that has received a boost during the country’s search for a new constitution and the nationalist upsurge in Balochistan.

The discussion on Balochistan was based on a fresh study that argued that peace in Balochistan is meaningful, even possible, only if an end to violence is accompanied by justice in terms of a change in the status quo by establishing fair power relationships between the civil and military authorities, the centre and the province, and the elite and ordinary people.

The immediate measures suggested for giving the peace process a promising start include cessation of military operations and human rights abuse, withdrawal of the army and the FC, recovery of the ‘missing persons’, an end to the state’s plans to rule the province through its co-opted elite, and facilitating productive economic activity.

While these suggestions are generally in harmony with the domestic democratic opinion on Balochistan, a disturbing finding was that although the unrest in that province has been on the national agenda for more than six decades, there has been no peace accord between the Baloch and the state. This point was not one of the main issues on the agenda of the recent consultation but it needs to be addressed by all those who wish to secure peace and justice in Balochistan.

History supports the view that each Baloch uprising has been suppressed by the state through force and without any peace settlement. The first uprising (1948) was suppressed through a quick military operation and its leaders punished. The second uprising (Ayub regime) was crushed through a mixture of force and chicanery, and a festering sore was created when the state reneged on its pledge of amnesty given to Sardar Nauroz Khan. The armed struggle of the 1970s was ended by Ziaul Haq’s offering palliatives to its political leaders but without any settlement on the issues that had caused the conflict.

Gen Musharraf not only ignored Baloch national aspirations but also looked down upon them and threatened them in the language of an insolent bully. He believed, more or less like Ayub Khan, that development projects could persuade any people to forego their autonomy demands. The present government has added political and economic concessions to Balochistan (the 18th Amendment, the reform package and the NFC award) to the policy of settling issues through force. That this strategy can’t deliver is manifest for the simple reason that no package has been given shape in consultation with the people.

While the state has never considered the Baloch dissidents worthy of negotiations across the table, it has also largely been indifferent to non-state initiatives to establish peace and tranquillity in Balochistan. The Bhutto-Bizenjo accord of 1972 was wrecked by Bizenjo’s rivals in his own party and Mr Bhutto himself. The memorandum of understanding signed by the MRD parties in the 1980s was never taken seriously by the signatories except for the Baloch.

During the Musharraf regime, the Senate committee made some sensible proposals but lacked the will to attach to the matter the priority it deserved. Thus, the Baloch believe that besides being oppressed by the state, they have also been abandoned by the country’s political parties and the people in general.

The harmful consequences of not having a peace accord with the Baloch people are fairly evident. The state’s lack of interest in negotiating a settlement with the nationalists, including those that are labelled as insurgents, amounts to a denial of their status as citizens who are entitled to be party to any social contract on which the state must be based. This leads to the Baloch people’s alienation from the state.

Besides, in the absence of a peace accord, the parties to the conflict are without any legitimate framework or context for their demands and assurances. Focus on specific issues becomes difficult. The people outside Balochistan have no measure with which to judge the legitimacy or otherwise of the Baloch nationalists’ demands or the state’s policy of denial.

If it is possible for the powers that be to realise that a peace accord with the Baloch nationalists is necessary, the next step is identification of elements with whom a compact would be meaningful. There certainly are elements in Balochistan who believe that the time for a settlement within a federal framework has passed and if they are so numerous as to make the rest politically irrelevant, then too an accord with them will be necessary, only its terms will be different from those of an intra-federation settlement.

The trouble is that the state is not talking even to elements that are prepared for accommodation within the federation provided that their rights as an autonomous unit are fully secured. The present Balochistan Assembly does not have the requisite credentials. For one thing, the 2008 polls were boycotted by the nationalist parties and for another the present provincial government enjoys little real authority.

Unless the state can find a way of bringing all the diverse elements in Balochistan to the peace table, an early election to determine the people’s genuine representatives will become unavoidable. The essential fact to be realised is that peace cannot be established in Balochistan without an accord on democratic self-government.

One should not be unmindful of the obstacles on the road to a peace accord in Balochistan. The custodians of the security state would go to any length to deny the Baloch nationalists their right to speak for themselves. The bureaucrats would be loath to give up the powers they have enjoyed for ages. The consequences of recognising ‘outlaws and criminals’ would be presented in lurid detail.

But a surrender to the vested interest would only mean adding to the agony of the Baloch people and undermining the state’s capacity to deal with the crisis in future. The risks in allowing the present drift to continue are far greater and more serious than those in seeking peace by accommodating the angry, dispossessed and the deeply hurt Baloch.

By arrangement with Dawn

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Window on pakistan
Judicial snub for Zardari
Syed nooruzzaman

Asif Ali ZardariIt is well known that Pakistan is in deep trouble because of the killing of Osama bin Laden by US forces in Abbottabad, a militarily significant town near Islamabad. But Pakistan President Asif Ali Zardari’s worries are different. Pakistan’s judiciary, with its newly found independence, never loses an opportunity to give him sleepless nights. Some people believe that this is because he was not forthcoming in restoring the status quo of the judiciary that existed when former military ruler Gen Pervez Musharraf imposed the emergency and sacked a large number of uncooperative judges, including the present Chief Justice of Pakistan, Iftikhar Mohammed Chaudhry.

Whatever may be the reason, the latest from the judiciary is an observation made by the Lahore High Court that he should dissociate himself from his party, the PPP, as its co-chairperson so that he can maintain neutrality as the President of Pakistan. The court made this observation while disposing of a set of petitions questioning his holding of two offices —- that of the President of Pakistan and the co-chairperson of the PPP.

Dawn says in an editorial on the subject, “As the legal word goes, President Asif Zardari must part company with the PPP chairman. He must now prepare himself to face the fallout of this (court verdict).”

Will Mr Zardari accept the court advice and relinquish the party post he has been holding since the death of his wife Benazir Bhutto? There are clear indications that he will continue to hold both posts and challenge the Lahore High Court ruling in the Supreme Court of Pakistan. His party has gone to the extent of holding demonstrations in Sindh.

The judgement has serious infirmities which are bound to be exploited by Mr Zardari.

Faisal Siddiqi, a lawyer, says in an article in Dawn, “The judges accept that the President’s holding a party position is ‘not barred under law’ nor can it be used for ‘a case for disqualification’ or removal of the President, nor is there a ‘report of any political controversy or reaction’ regarding this issue. Even then the judges go on to hold that party position/political participation ‘is extraneous to the duties and functions of his high constitutional office’ and that the ‘duties and functions of the lofty office of the President of Pakistan are to be discharged by him with complete neutrality, impartialityand aloofness from any partisan political interest’.”

According to Daily Times, “Such a suggestion is outside the purview of the court. Our honourable courts need to think whether giving such orders that are hard to implement would bear any fruit. It lowers the dignity of the judiciary to give such constitutionally questionable remarks.”

However, in a vast section of the people, there is a feeling that the President of Pakistan should keep himself away from the affairs of his party. Such people have appreciated the court’s suggestion. A letter carried in The News congratulated “the independent judiciary for upholding the constitution of Pakistan by giving a historic judgement against the holding of two offices by the President of Pakistan.” But, apparently, it will have no impact on the scheme of things of Mr Zardari.

Mr Zardari is waiting for his son, Bilawal, to come back to Pakistan from England, where he is studying, and start functioning as the PPP chairman. But this will take some time. Bilawal is a Bhutto and, therefore, he will have no difficulty in smoothly running the party affairs. At present, Mr Zardri’s sister, Ms Faryal Talpur, helps him a lot in party matters, but she cannot be even a temporary replacement for Bilwal, as she is not a Bhutto. PPP supporters cannot accept a person as its head if he or she is not a Bhutto.

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Stagnating Pak economy
Sakib Sherani

RECENT numbers depict a painful picture of the economy, the relative prosperity of the farm sector notwithstanding. Private investment has sunk to an all-time low, while the surge in inflationary pressure is at a historic peak.

The economy has recorded its second lowest per-capita income increase (close to zero) in any three-year period since independence. While a substantial contribution to this state of affairs has been made by external developments, weak governance and poor management have exacerbated the challenges. A review of the numbers makes the story clearer.

The economy is estimated to have grown 2.4 per cent in the current year, well below the long-run trend rate of growth of over five per cent. The commodity-producing sectors of the economy have posted an anaemic 0.5 per cent increase. While last summer’s unprecedented floods affected the economy, the impact on growth was far less than initially feared — and more ambiguous. Other than major crops, all other sub-sectors of agriculture have done well.

Similarly, other than urea production, many manufacturing sub-sectors have benefited substantially from the rural economy’s prosperity due to a surge in crop prices. Nonetheless, despite strong output growth in important sub-sectors such as cars, motorcycles and sugar, the overall tone of large-scale manufacturing is one of weakness, with growth slowing down to a mere 1 per cent.

In fact, public administration and defence has provided a significant fillip to the overall growth number, without which the economy’s performance would have been even weaker. In addition, the use of a fixed inter-censal growth rate of 7.5 per cent for small-scale manufacturing, a ‘plug’ number which has increasingly appeared out of sync with the reality, provides a false signal on the economy.

The average expansion in the economy over the past three years is down to 2.6 per cent a year. With a population growth rate of around 2.1 per cent, per-capita income has grown, on average, at less than 0.3 per cent since 2008, the lowest increase since 1951 (barring 1998-99). While export performance has been a bright spot, it is already unravelling with the ongoing price crash in textiles.

The situation with regard to investment, especially private investment, is even more alarming. While overall private investment grew by 1.1 per cent in 2010-11, as a per cent of GDP it has sunk to a new low of 8.5 per cent. More worryingly, investment in large-scale manufacturing, the driver of job-creation in the economy, has contracted 27 per cent in the current year, over and above a contraction of 14 per cent the year before.

Taken together, this is amongst the ‘weakest’ economic data recorded in Pakistan’s 64-year history, confirming the view that Pakistan’s economy is stagnating compared to its own past record.

While the economy is operating under several constraints, prima facie, the two major constraints are the internal security situation and the energy deficit. In reality, weak governance, which is amplifying the energy crisis, is the single biggest constraint to higher growth and investment.

By arrangement with Dawn

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Corrections and clarifications

In a blurb box in the report "In '72, he wrote about webcams and microwaves" (Page 1, May 23) Geoffrey Hoyle has gone as Geoffrey Boyle.

The sentence "Bhardwaj sent his report following the Supreme Court quashed the disqualification ……" in the report "Centre rejects Karnataka Guv's recommendation" (Page 2, May 23) is wrongly worded. Instead of 'quashed' the appropriate word was 'quashing'.

In the headline "Kaul Singh pushes ball in Dhumal's Court" (Page 9, May 21) 'in' should have been replaced by 'into'.

Using the abbreviation DSK for Dominique Strauss-Kahn in a headline "DSK quits as IMF Chief" (Page 15, May 20) was inappropriate since this abbreviation is not commonly understood.

Despite our earnest endeavour to keep The Tribune error-free, some errors do creep in at times. We are always eager to correct them.

This column appears twice a week — every Tuesday and Friday. We request our readers to write or e-mail to us whenever they find any error.

Readers in such cases can write to Mr Kamlendra Kanwar, Senior Associate Editor, The Tribune, Chandigarh, with the word “Corrections” on the envelope. His e-mail ID is kanwar@tribunemail.com.

Raj Chengappa, Editor-in-Chief

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