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Agenda for the nation 2013 and beyond-III

Over the past five years, extremely bad governance wrought with corruption and compromise in the name of continuity of democracy has brought the country to a disastrous point. This has given rise to several crises having long-term repercussions, eroding our sovereignty, economy and even our identity as a nation. An incisive view of such issues and concerns follows.

EROSION OF INDEPENDENCE AND SOVEREIGNTY: First, as a result of all the above mentioned predicaments, the country is confronted with aspects of an existential crisis: erosion of independence and sovereignty, loss of national honour and neglect of vital national interests. Our independence, our autonomy and our identity as a nation are at risk. In view of this we have to search for a new security paradigm in the proposed ‘Agenda for 2013 and Beyond’. That security paradigm must have independence, sovereignty of the country, national interest and national honour, as our key concerns, to be protected and promoted within the context of availability of resources. We must realise that whether we are strong or weak, whether we are small or large, there is a core set of national interests that has to be protected at all cost. Security is not merely a military phenomenon. It is multidimensional: having human, military, political, cultural and economic dimensions. As such protection of independence, sovereignty and national interest is an overriding concern and must be integral to our Security Paradigm.

IDEOLOGICAL, MORAL AND CULTURAL IDENTITY: The second key issue relates to our country’s ideological, moral and cultural identity. That too has been compromised, tarnished and marginalized. A people cannot be inspired and motivated to rise up and sacrifice everything only for petty political and economic concerns. They live and die only for higher ideals. So along with security and independence, the ideological, moral and national identity of the nation is a matter of vital concern. Hence the cardinal importance of Islam as a source of our national identity.

Even a number of Western strategists are now recognising that Islam is integral to a Muslim society. And if this aspect is ignored or allowed to be disfigured, peace within and peace with the rest of the world would remain elusive. This fact must be recognised that Islam is the basis of our identity, notwithstanding the narrative of the secular lobbies or vested interests. If this identity is ignored, camouflaged or compromised, the people and the rulers would never be on the same page. Consequently a country torn from within as a result of such a conflict would never achieve good governance.

ECONOMIC DIMENSION: The third one is the economic dimension. Power of a nation, political as well military, depends very much on its economic strength. It is of critical importance in respect of protection of independence and honour and promotion of national identity and well being. Security and economy go hand in hand. People’s welfare is the source of a nation’s real strength. During the last few years our economy has unfortunately gone down the drain. All major economic indicators are in the negative. Yet, if we have survived it is because of inherent resilience of the people. People’s will and presence of a large informal sector have come out as the hidden source of strength of our economy. That is how we have survived despite grossly flawed government policies, acute energy shortages, and rampant corruption.

The way economy has been handled since 2008 smacks of extreme incompetence and mismanagement. High rates of inflation, unemployment, and poverty; erosion in the value of money, both domestically and in world markets; low levels of production; flight of capital; mounting debts; escalating levels of debt servicing; precarious state of reserves – all have driven the economy to the brink of disaster.

It is the inherent resilience of the non-public sector that has enabled the country to survive. There is no doubt that people have suffered and every sector of economy has been affected. Only a certain elite wallows in prosperity and affluence. Common people suffered most. It is a sad commentary on the performance of the Government that public sector enterprises (PSE) have been a constant drain on the economy. Some energy shortages were there before 2008 but during the last five years shortages have snowballed, disrupting the economy and worsening the living conditions. The volume of domestic and international debt has increased from Rs 6 trillion in 2008 to over Rs 15 trillion in 2012. Capacity to repay debt has not been created. Debt servicing has become item number one in public expenditure. In 1970s and 1980s, defence expenditure was used to be the largest component of government spending. Now debt servicing is almost double the defense expenditure. It is eating away more than three times what is spent on development. This is a grave situation and a huge challenge which can be met only if the country gets a capable leadership. What the economy needs is a paradigm shift: an economic path focusing on growth, human resource development, elimination of corruption, along with effective mobilisation of domestic resources and also those of the expatriates-this coupled with good governance and shift of focus towards self-reliance and people’s welfare as centre-piece of all policies and programs.

‘WAR ON TERROR’: The ‘War on Terror’ is not merely a question of security and foreign policy. It is also a question of economy, as also of trust between the people and the rulers. Protection of life, honour and property are sine qua non of civilised existence. If security is to be privatised, it is a vote of no confidence in the Government and the institutions responsible for law and order in the country. The economic cost of the war on terror is horrendous. Poor people of Pakistan have financed this American war to the extent of over $100 billion which is the direct economic cost. Indirect costs are much higher. Deterioration of law and order is directly related to our involvement in the ongoing war. Our country is also suffering at the hands of terror mafias, criminal groups, sectarian outfits and secessionist forces. Foreign agencies too are engaged in overt and covert operations. This is over and above another direct cost in the form of loss of life of over six thousand armed and security forces personnel, over forty thousand civilians, injuries to more than double those numbers, and displacement of over three million Pakistanis.

How to bring this war to an end is the most urgent issue. There cannot be only one way of dealing with all of the multifarious aspects of this challenge. There has to be a multidimensional strategy. War on Terror has to be brought to an end in a manner that does not aggravate terrorism. It is also important to ensure that the current war on terror is not replaced by another era of civil war in Afghanistan. If there is no real peace in Afghanistan we in Pakistan cannot live in peace.

RELATIONSHIP BETWEEN FEDERATION AND PROVINCES: Relationship between the federation and the provinces, and between the provinces and the local governments is also an extremely important issue. Genuine decentralisation without compromising the foundations of federation is one of our existential needs. Serious work has to be done in this respect by developing a clear roadmap taking care of the genuine concerns of the federation as well as the provinces, particularly in Balochistan, in a manner that all stakeholders participate in this effort and ultimately arrive at consensus. Structural changes in the monetary and fiscal system are also required. We have a fiscal system which does not conform to principles of federalism. What we have is a kind of pseudo federalism.

There is a structural problem as almost all revenue collection is done by the Federal Government as is the case in a unitary state. But expenditure processes are in a different mould. Those who manage expenditure are not responsible for taxation. This lies at the roots of a lot of fiscal irresponsibility. Unless taxes are also decentralised, principles of fiscal responsibility cannot be promoted at all levels. The financial structure has to be redesigned and restructured. The fact that federation collects and provinces spend is recipe for indiscipline. That is why the task of development of a proper and responsible federal system demands major changes in structures, policies and processes of governance, political and financial. The 18th Constitutional Amendment was a step in the right direction, but only a first step. Successive steps required have not been taken yet. That is why we are faced with structural as well as political issues in this respect.

ROLE OF PRIVATE SECTOR: Despite all economic constraints, if we can set our priorities right and mobilise our resource potential, particularly in the social sector and public sector development, we can inaugurate a new era of economic development and social welfare. Private enterprise should play a key role. It is borne out by history that whenever private sector was given proper opportunity it has played its role positively and constructively. But because of corruption, lack of good governance, real and contrived clash of interests, absence of clarity of vision, neglect of accountability, and failure of regulatory mechanisms, private sector has not been able to make its full contribution. A balanced approach is needed with a vibrant private sector, and responsible and supportive public sector. The role of the state particularly in the realm of infrastructure development, provision of social services, and bringing the lower strata’s of society into the mainstream of economy is of critical importance.

State’s responsibility to ensure education and health for all and adequate infrastructure development at the grassroots levels and financial structures that can provide lifeblood for all the layers of economic activity such as agriculture, small and cottage industry, small and medium enterprises (SMEs) are very important. Key targets must be set for macro-economic stabilisation, as well as economic development ensuring social well-being for all members of the society and their active participation in economic processes. This calls for a different economic model. Development of such a model should be our immediate objective. If we are able to identify our real national objective, expound that vision with clarity and spell out a roadmap to move in that direction, we can help our future political leadership to lead the country out of this difficult situation.


(The writer is Chairman, Institute of Policy Studies, Islamabad (www.ips.org.pk) – The views expressed in this article are not necessarily those of the newspaper)

Khurshid Ahmed, "Agenda for the nation 2013 and beyond-III," Business recorder. 2013-04-07.