Issue 47 Vol II, September 15, 2007

F O C  U S

Crisis Deepens Further in Pakistan
Swaraj Singh

After the attack by the Pakistani army on the Red Mosque, Pakistan’s crisis continues to deepen further. There is a growing confrontation between the liberals and the conservatives. The army has kept its hold on the power for the last sixty years. It has not allowed the democratically elected governments to hold onto the power for any length of time. Mr. Bhutto, who became very popular, was hanged and his daughter, Benazir Bhutto, and another popular Prime Minister, Nawaz Sharif, were exiled from the country. The democratically elected governments and the popular Prime Ministers were unable to face the army.

This time, the army is facing a very different type of adversary, the Islamists. After the July attack on the Red Mosque, the Islamists have attacked the army so many times that it is difficult to even keep the account of these attacks. Recently, the Islamists have claimed that they have abducted 300 Pakistani soldiers. The Pakistani army has admitted that more than 100 soldiers are missing. It is obvious that these attacks have demoralized the army and General Musharraf.

On the other hand, confrontation with the Supreme Court has also weakened Musharraf. Chief Justice Choudary has been able to regain his position. He continues to directly challenge the army and Musharraf. The Supreme Court has decided that the former Prime Minister Nawaz Sharif can return to Pakistan. Musharraf was afraid that the Supreme Court might pass a law against his election as the President. Musharraf has already been weakened by the confrontation with the Islamists and with the Supreme Court. He could not afford to take any chances of the Supreme Court passing any law against his reelection. To get out of the difficult situation, Musharraf considered imposing an emergency. However, under American pressure, he had to reconsider his decision.

General Musharraf and the army have been major American allies in the American war against the Islamists. America is very concerned about the growing crisis in Pakistan. The different forces in the Indian subcontinent are polarizing and realigning themselves. On one side, America and its allies, and on the other side, China and the Islamists. America feels that the Islamist base is in the border between Pakistan and Afghanistan. This area is mainly responsible for the setbacks in Iraq and Afghanistan. America also believes that Osama Bin Laden is hiding in this area.

America is very frustrated with the poor performance of the Pakistani army against Islamists in this area and is considering a direct attack on the area. However, a very large portion of the Pakistani population is opposed to such an attack. A recent survey by the PEW has shown that only 15% of the population has a favorable opinion about America. Therefore, America seems to have decided to pressure Musharraf to share power with Benazir Bhutto.

Mrs. Bhutto has announced that she is going back to Pakistan. It appears that she has already reached an understanding with Musharraf under which Musharraf will give up his army position before the end of the year and help to revise a law that bars a person from becoming the Prime Minister for more than two terms. After all, what prompted these two leaders to compromise? Many people feel that both are considered westernized liberals. Mrs. Bhutto supported Musharraf on the issue of the attack on the Red Mosque and she criticized the Islamists who were holding the mosque. After her criticism, her party’s (Pakistan People’s Party) meeting was attacked by the Islamists in Islamabad. Mr. Nawaz Sharif and his party, the Muslim League, are considered conservatives. That is why he was unable to reach an agreement with Musharraf. Mr. Nawaz Sharif has announced that he is also returning to Pakistan. The Pakistan government had announced that it will arrest him. Will his return sabotage the agreement between Musharraf and Bhutto? Only time will answer this question. However, it seems that there is no easy solution for the present crisis.

Sawraj Singh, MD F.I.C.S. Chairman, Washington State Network for Human Rights,
Chairman, Central Washington Coalition

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Punjab Finances: Lost in the wilderness
Gobind Thukral

Every time a new government takes seat in Punjab, an exercise begins to know what it has in its treasury and how to spend these.  With this a blame game starts. The ruling party or a coalition begins blaming the previous government for the all ills including financial ones. But soon some wisdom dawns and then the exercise beings how to augment the resources and the finance minister is asked to scratch and scout for more money. He usually comes with proposals to either levy new taxes or to increase the rate of present taxes. Then usually the chief minister and others ministers get together and pool their wisdom. They normally look at the political cost, their vote banks. It is rarely that they look at the economy of the state on which the collection of taxes depend or the expenditure. How the money which the public provides with their sweat and blood is spent does not bother our rulers.  Their feudal mindsets restrict their basic thinking towards economy and public money.

This is what the spectacle is in Punjab for the past two weeks. Budget session was the right occasion to do this exercise, but municipal elections prompted the government to postpone it.  Even now the Akali- BJP coalition has failed to reach an agreement. A large section of the Akali leaders do not like to withdraw free power to the farmers as this would aggravate the agrarian crisis and hurt their already shrinking vote bank. Similarly, the BJP which as civic election results showed has already lost a big share of urban votes would like to burden the urban sections. What more skewed logic could be?  The coalition can not think for Punjab.

We are told that if the government is unable to raise a hefty Rs 1500 crore this year, the annual development plan as the central aid for several schemes would be in jeopardy. Common sense also tells us that if the economy does well, the tax collection is buoyant. A good economy also allows wider tax net and less painful for the tax payers. Are these seasoned ministers so fond of making Punjab a real paradise on earth not aware of that agriculture sector that still contributes 60 per cent of the finances is deeply sick?  Is the new rising political star on Punjab’s horizon who wants to rule for the next 25 years and make Punjab the number one state oblivious of the harsh economic reality? Two main crops, the kharif and rabi are roughly valued at Rs 30,000 crore and add other Rs 4,000 crore  from other crops like cotton, sugarcane, fruit and vegetables, the total comes to 34,000 crore. The state gets 4 per cent as VAT, other two per cent as market fee and 2 per cent a rural development fund and the artyias get 2.5 per cent their commission besides hefty interest on money lent to the farmers. 40 per cent comes from industry, trade and services.

It is true that the entire government machinery; politicians and employees have s become self serving. The revenue expenditure has been constantly exceeding the revenue receipts for the last two decades and has now reached disturbing levels.

Punjab had virtually its first annual revenue deficit during 1987-88 of Rs. 229 crore. It has not looked back thereafter. The government borrows heavily to fill the gap between revenue receipts and revenue expenditure  to pay salaries, pensions, interest on debt and meet other committed expenses, leaving nothing for the for development.

When the previous Akali-BJP government took over in 1997, the revenue deficit was Rs 1,357 crore. It was raised to Rs. 1,484 crore 1997-98. By 2001-02, the revenue deficit increased to Rs. 3,781 crore.

The Congress government started with the budgeting of revenue deficit at Rs. 3,753 crore. This government brought the revenue deficit down to 2,190 crore in the budget of 2006-07. but the previous Congress government incurred a revenue deficit of Rs. 15,138 crore in five years,  an average revenue deficit of Rs. 3,027 crore per annum.

This mounting annual revenue deficit raised the total debt stock of Punjab from Rs. 15,250 crore in 1996-97 to Rs. 32,496 crore in 2001-02. This occurred despite the fact that the Central government and the Finance Commission waived the special term loan amounting to Rs. 2,4343 crore.

Thus the Akali-BJP government increased the debt stock of the state by Rs. 17,246 crore in spite of this waiver. By the time the Congress government demitted the office this year, the debt stock of the state had risen to Rs. 47,801 crore.

Subsidy politics: A big case is made out that both Punjab and Punjab State Electricity Board [PSEB] would go bankrupt if farmers continue to get free power. It is true that by 2012, the total accumulated loss to the state power board would be Rs 21,000 crore. There would be need to shut down the system.

But is free power to the farmers only responsible for this? Is domestic sector not being subsidized? And, there is free power to the poor and Dalits also. The real malady is the overstaffing, corruption and faulty functioning of the PSEB. It calls for urgent reforms not in the manner what Prime Minister Manmohan Singh advocates. But to make PSEB a lean and efficient that can earn from those who can pay and looks after those who can not. This is what a welfare state means under the Indian constitution. But then corruption and inefficiency are the hall mark of our governments. How can we look at the PSEB or any such organisation in isolation? Neither the chief minister Parkash Singh Badal nor his able team of ministers is bothered about that. Can we look at the fact that paddy not causes environment degradation, but pushes the state backward as it has to pay huge money for power. Why should Punjab subsidies while growing paddy?  Let the center pay at the price it is paying in the international market.

Another tragedy with our each political class is that it wants to do something spectacular. It is least concerned or sensitive about the governance part. The politicians of all colours forget that there are no grandiose plans available to create a blaze. Improve the school and higher education system by pushing the teachers back to schools, repair ramshackle buildings, create infra structure and you would have an educated class, a knowledge class for 21st century. Take care of health system and see that the doctors and others do not play truants.  We can easily improve the cities, roads and transport system. Look at the rate of accidents in Punjab. It does not require huge funds or new taxes. The money is already marked in the budget. Does not Punjab spend over 70 per cent of its taxes on salaries and pensions? Make the government function and start governing. When a common man visits a police station, a revenue office or a hospital or any other government institution, how does he feel to be there? If he feels humiliated and insulted and deprived of his dignity, then what good are the rulers and their tall talks?

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