Mosharraf Zaidi

http://www.mosharrafzaidi.com/2010/03/09/the-next-finance-minister-of-pakistan/
http://www.thenews.com.pk/daily_detail.asp?id=227913

Tuesday, March 09, 2010

by Mosharraf Zaidi

Like the achingly beautiful brunette bombshell that every man wants but no man has the courage to approach, it seems the finance minister’s job has become a victim of its own grandness. There are many ways to interpret the desperate difficulty that the present government is experiencing in finding someone that is willing to be finance minister for this country. Perhaps people worry that if Shaukat Tarin (not a man to shirk a good challenge) couldn’t handle the job, nobody really can. Perhaps a bad economy is scaring good people away from the job. Perhaps the allegations of unparalleled corruption within this PPP government are causing smart people to want to stay away from the job.

Of course, it’s important to remember that not everything that is broken today was handed to this government in any kind of usable condition. The intense opposition that President Asif Ali Zardari inspires may or may not always be fair, but a deeply problematic economic management paradigm goes far beyond this government. After all, we are less than three years removed from an era in which Pakistan’s economic managers were claiming the status of the new Asian Tiger for the country.

Experience must have made an entire generation of greying economic and financial savants truly wise men. From Ishrat Husain to Hafeez Pasha, not one of them wants to be finance minister. Indeed, anyone with professional pride seems to not want to touch the most powerful job that an apolitical shehri babu could ever aspire to in Pakistan. Begging the question, why do men for whom the apex of professional achievement is the finance minister’s job suddenly have cold feet?

The real answer has very little to do with the incompetence of the PPP government that is sometimes being lead by Prime Minister Yusuf Raza Gilani, sometimes by President Zardari, and most times by nobody at all. Smart economists know that one could replace this government with a PML-N government today, but the fate of the finance minister in such a government would not be much better than Shaukat Tarin’s. The problems inherent in the job of managing the Pakistani economy are not restricted to one kind of political party or another. Nor are those problems linked only to the performance of the global economy, or the prices of commodities like oil. The fundamental problem is much deeper, and worrying, and it is simple.

The traditional model of economic management is unsustainable in Pakistan.

This young and tortured country has only a very slim cadre of economic managers for as long as anyone that is old enough to be finance minister can remember. Since July of 1977 Pakistan has had 13 different men and women serve the country as ministers of finance. Of these 13, four had the chance to serve more than once–Shaheed Mohtarma Benazir Bhutto herself, Sartaj Aziz, Naveed Qamar and Ishaq Dar.

Of the 13 different folks that have been finance ministers, only three can legitimately be called serious politicians, capable of winning an election in Pakistan without the need to depend on the endorsement of any single family, group, or entity–the late Mian Yasin Khan Wattoo, Shaheed Mohtarma and the always classy Naveed Qamar. Many would argue that Ishaq Dar (a decent and competent man) qualifies as the fourth, but Mr Dar cannot win an election without the endorsement and strong support of the Sharif family.

More importantly, Mr Dar, rather than being a part of the thin group of politicians who have been finance minister, is clearly a member of the dominant club of Pakistani finance ministers that have limited autonomous political clout, but oodles of professional chops.

Since the summer of 1977, ten of the 13 ministers have either been career bureaucrats or finance and/or economics professionals. Often they have been both within the same career, including Sartaj Aziz, Ghulam Ishaq Khan, Shahid Javed Burki, and Mahbubul Haq.

The quintessential Pakistani finance ministers are the two that have enjoyed the longest tenures. Ghulam Ishaq Khan was finance minister from July 1977 to March 1985, and Shaukat Aziz was finance minister from November 1999 to November 2007. Both men served for approximately eight years. The most important common strain across these two was that neither would, even in their most courageous and brazen moments, have considered taxing the hands that fed them. The left hand being that of the feudal landowners that help sustain a skewed narrative of economics in Pakistan, and the right hand being that of the Pakistani military, whose appetite for fiscal expansion has never been institutionally challenged, or checked, in Pakistani history.

Simplistic derivations of why Aziz and Ghulam Ishaq Khan enjoyed sustained tenures as finance ministers will always produce a causal link between pure GDP growth and economic success. But the real measure of success in managing the economy has to be the citizen’s bottom line. Stock market and real-estate brokers may have enjoyed inflated profits during the Zia and Musharraf eras, but the dramatic falloff in economic performance upon the demise of each military strongman (and their trusted munshis) is the greatest proof of the myth of the GIK and Aziz economic success stories. The only real institutional success these finance ministers had was that they kept Pakistan from imposing the two most important kinds of taxes that this country now desperately needs to impose: a major tax on the wealth of large landowners, and a major “tax” on the unsustainable growth of the defence budget.

The reason that so many of Pakistan’s finance ministers have been ex-World Bank or IMF and ex-Citibank professionals has very little to do with the institutional success of the World Bank, the IMF or Citibank. It has to do with the raison d’etre of the finance ministry–whether it is being run by a military dictator or a legitimate government of the political elite. The finance ministry is the articulator of Pakistani financial need. Its primary function is to promote a narrative of Pakistan’s economy that will increase the flow of foreign funds into Pakistan. What better spokespersons than those that are straight from the belly of the beasts themselves?

During the GDP growth heyday of the Musharraf era, the fictional narrative was that Pakistan was an emerging market superpower. This was then marketed to investors so that they would pump money into the various Eurobonds and sukuks that helped ramp up Pakistan’s debt liabilities. During the GDP growth dog days of this PPP government, the fictional narrative has been that the Taliban are “60 miles from Islamabad,” and that Pakistan will be taken over by those Taliban. Unless, of course, wealthier countries begin to throw bigger bones Pakistan’s way.

By any means necessary, the bedrock of the management of the Pakistani economy has been to attract foreign money into Pakistan. This is ironic and stupefying, because those very managers, whether times are a-boomin’ or a-bustin’, stash their own wealth in banks outside Pakistan with alarming consistency.

The traditional model of economic management is unsustainable in Pakistan for two reasons. The first is that there are no more cons left to try. Serious security risks weaken the prospects for major FDI or portfolio investments into Pakistan in the near future. Concurrently, donor fatigue, and the exposure of the potential Taliban/Al-Qaeda domination of this country as a myth, means that the chapter of begging-bowl economics has come to a close. In short, Pakistan will actually have to begin looking at domestic economic supply-and-demand as the starting point for Pakistani macroeconomic analysis.

The second is that since there are no more cons left to try, there are no more decent, educated and serious babus left to take the finance minister’s job. Whatever poor soul does take this job will be saddled with an emotional (and most probably legal) toll that far outweighs the glamour of a black Corrolla and World Bank Spring Meetings. Shaukat Tarin is not alone in raising his hands to the sky, in prayer for the poor soul that is the next finance minister, whoever it is.

http://www.mosharrafzaidi.com/2010/03/02/principles-of-policy-part-ii/
http://www.thenews.com.pk/daily_detail.asp?id=226773

Tuesday, March 02, 2010
by Mosharraf Zaidi

The extent to which the Pakistan that we know conforms to the Pakistan that we were supposed to know (according to the framers of the Constitution) can be gauged from the Constitution’s own ten “Principles of policy”. The first six of these principles (Article 31 through Article 36 of the Constitution) touch upon a diverse array of issues, including an “Islamic way of life”, the “protection of the family”, and “the full participation of women in public life”. None of the first six principles of policy have any real tangible roots in modern Pakistani society. But does this necessarily mean that the Pakistan we know has failed the personality test outlined within its own Constitution? Not necessarily. Other crucial aspects of Pakistan — notwithstanding the importance of the issues addressed in Article 31 through Article 36 — are contained in the remaining principles. It would be unfair to declare failure without examining Article 37 through Article 40 — a section of the “Principles of policy” that we might even think of as the crux of the personality of the Islamic Republic of Pakistan.

Article 37 is titled “Promotion of social justice and eradication of social evils”, and it has nine bullet points. With due respect to the immense value of the space this newspaper affords me each week, these points require reproduction. Readers can wear whatever hat they’d like as they read these: jiyala, sher, mullah, sufi, stoner, poseur, moderate, fundo, liberal, disco or saada. It is unlikely that there will be different opinions about how Pakistan 2010 measures up against these:

“The state shall: (a) promote, with special care, the educational and economic interests of backward classes or areas; (b) remove illiteracy and provide free and compulsory secondary education within minimum possible period; (c) make technical and professional education generally available and higher education equally accessible to all on the basis of merit; (d) ensure inexpensive and expeditious justice; (e) make provision for securing just and humane conditions of work, ensuring that children and women are not employed in vocations unsuited to their age or sex, and for maternity benefits for women in employment; (f) enable the people of different areas, through education, training, agricultural and industrial development and other methods, to participate fully in all forms of national activities, including employment in the service of Pakistan; (g) prevent prostitution, gambling and taking of injurious drugs, printing, publication, circulation and display of obscene literature and advertisements; (h) prevent the consumption of alcoholic liquor otherwise than for medicinal and, in the case of non-Muslims, religious purposes; and (i) decentralise the government administration so as to facilitate expeditious disposal of its business to meet the convenience and requirements of the public.”

Let’s try to rein in our appetite for destruction for just one moment. Forget the ideological mishmash and the umbrage — either of living in a country of prohibition, or of living in a country whose promise of prohibition is about as binding as its promise of the protection of minority rights. The real question is whether there is a single one of the nine clauses that are treated with any degree of seriousness in Pakistan 2010. Emphatically, the Pakistani state has failed to promote social justice or eradicate social evils — according to Pakistan’s own definition. Not Amnesty International’s. Not the International Crisis Group’s. Not the New York Times’. Not David Ben-Gurion’s.

Article 38 is titled “Promotion of economic and social well-being of the people”. This principle, whose mention by Harris Khalique originally inspired this piece, also deserves reproduction here.

“The state shall: (a) secure the well-being of the people, irrespective of sex, caste, creed or race, by raising their standard of living, by preventing the concentration of wealth and means of production and distribution in the hands of a few to the detriment of general interest and by ensuring equitable adjustment of rights between employers and employees, and landlords and tenants; (b) provide for all citizens, within the available resources of the country, facilities for work and adequate livelihood with reasonable rest and leisure; (c) provide for all persons employed in the service of Pakistan or otherwise, social security by compulsory social insurance or other means; (d) provide basic necessities of life, such as food, clothing. housing, education and medical relief, for all such citizens, irrespective of sex, caste, creed or race, as are permanently or temporarily unable to earn their livelihood on account of infirmity, sickness or unemployment; (e) reduce disparity in the income and earnings of individuals, including persons in the various classes of the service of Pakistan; and (f) eliminate riba as early as possible.”

Much like Article 37, it is hard to find any area in which Article 38 has been adhered to. In most cases, in fact, it seems the active efforts of the state have been in the opposite direction of what the Constitution requires. The Constitution expressly forbids the concentration of wealth and calls for the adjustment of rights between landlords and tenants. Oh dear landlord. The Constitution expressly calls for a reduction in income disparities, especially between persons in the service of Pakistan. Oh dear GOR.

Article 39 is titled “Participation of people in armed forces”, and calls on the state to “enable people from all parts of Pakistan to participate in the armed forces of Pakistan”. People from all parts of Pakistan do not participate in the armed forces of Pakistan, and they never have. In the 1990s, young men used to be asked where their grandparents were born, as blooding new Urdu-speaking officers into the military was seen as an institutional risk. After decades of systematic exclusion, today, it is hard to find a Baloch citizen of Pakistan that feels anything but resentment towards the Pakistani state, with almost all the anger directed at the armed forces. In the future, Pakistanis from the tribal areas may find they have much in common with Muhajirs from the 1990s and the Baloch from 1947 onwards. Upward career mobility is not particularly smooth when you’re part of a ‘problem’ ethnic group.

The final principle of policy is Article 40, “Strengthening bonds with Muslim world and promoting international peace”. In the present global geopolitical context, Article 40 makes for compelling reading. It says that the state shall endeavour to “promote international peace and security”, and “encourage the settlement of international disputes by peaceful means” among other things. Pakistan has thorny and existential disagreements with Iran, Afghanistan and India. It is getting lectures on democratic conduct from Saudi Arabia. It is having trouble getting its paychecks from US Congress — paychecks promised on the back of waging war in its own territory. Safe to say that Article 40 is kind of lost in translation.

The utter dysfunction of Pakistan’s foreign relations is not an aberration. It follows the pattern of how brazenly the Pakistani state violates the nine principles of policy that precede the principle on foreign relations.

Pakistan treats its women, children, men, minorities, Muslims, disabled, needy and poor with little regard for the principles around which the state has been constructed. Why would Pakistan treat its neighbours, or countries with whom it shares brotherly bonds, any differently?

If this picture is too morbid or negative for the palate, there is something wrong with the palate. Not with the Constitution. The constitutional narrative since the Gen Musharraf era has focused with laser-like precision on the pomp, privilege and circumstance of the distribution of power among the elite.

Ordinary Pakistanis are right to be invested in the outcome of the tension between unconstitutional presidential power and constitutionally-mandated executive prime ministerial authority. But the discussion must reach far beyond the Charter of Democracy paradigm if it is to have real meaning for ordinary Pakistanis.

The Constitution is meaningful for ordinary Pakistanis in the rights that it affords them, and the principles that it defines for how the state will behave. These principles of policy are not theoretical constructs, to be dismissed as ideals. They define what the personality of Pakistan should be. They are its DNA and the real raison d’etre of the Pakistani state.

(Concluded)

http://www.mosharrafzaidi.com/2010/02/23/principles-of-policy-part-i/
http://www.thenews.com.pk/daily_detail.asp?id=225731

Principles of policy
Part I

Tuesday, February 23, 2010
by Mosharraf Zaidi

In his column last week, my friend Harris Khalique quotes a small part of Article 38 of the Constitution, which is titled, “Promotion of social and economic well-being of the people”. Harris’s reminder is simple, timely and important. In the age of a palpable Pakistani rule of law narrative, the Constitution is too easily and too often reduced to a political hot potato, used primarily in the national conversation as an instrument of political advantage.

The Constitution, of course, is bigger. It is bigger than the petty politics that has defined the PPP’s repeated attempts to pretend like it’s 1973 for sure. But it is also bigger than the heroic lawyers’ movement, the still-nascent Pakistani media and the inexplicably weak parliamentary opposition to the PPP. No matter what side one takes in these seemingly existential debates in Pakistan, the Constitution is bigger than the sum of these parts. It is not just about the chief justice, or the NRO, or judicial appointments. Despite the advantage that the PPP has repeatedly handed to its opponents unerringly since it took power in 2008, the Constitution is bigger than both those that seek to let it grow and breathe in the space that was originally sought for it, and those that seek to tie it in knots and manipulate it for whatever specific purpose they seek to derive from it.

The Constitution is the overarching framework around which Pakistan is supposed to be organised. Its articulation of the way Pakistan is supposed to be is surprisingly clear and accessible (if you happen to be comfortable with the English language). At its very heart, the Constitution is about defining Pakistan. That the definition of Pakistan is spoken of in the present rather than the past participle is not necessarily tragic. What is tragic is that in the grand Pakistani drama, the national conversation is so pre-occupied with the petty politics of the thaana and the kutchehri that it has almost no time at all to focus on issues about which there is little or no disagreement at all. Article 38 is a subset of a more important section that is almost entirely absent from the national conversation. That section of the Constitution is a compendium of values that are supposed to define Pakistan’s personality, and is called the “Principles of policy”.

The “Principles of policy” section has a total of twelve articles, Article 29 through Article 40. Of these twelve articles, two are devoted to the definition of the section, and ten articulate the actual principles. Pakistanis are often bludgeoned with stark reminders of how far short their country falls on international indices of performance. Whether it is the ambient level of human development, or the openness of Pakistan’s markets, or the perception of corruption, everywhere Pakistanis turn, they find their country being ranked among the world’s bottom-feeders.

One way to test the degree of discrimination or bias that may be actively being practised by the international community is to judge Pakistan by its own standards, rather than those of others. And there is no less controversial and more comprehensive set of standards of behaviour, or features of personality, for Pakistan than the Constitution’s “Principles of policy”.

Let’s see how Pakistan measures up against each of the ten principles of policy defined in the Constitution.

The first principle is Article 31 titled “Islamic way of life”. Pakistanis that want more religion in their country are unhappy to the point of having taken up arms against the state. Pakistanis that want less religion in their country are unhappy to the point of actively promoting and supporting the carpet-bombing of villages in their own country. Suffice it to say, the Pakistani state’s performance in enabling Pakistani Muslims to be the best they can be is so dismal, that the bruises from these failures cannot be hidden. Pakistan’s key existential dilemmas, more than sixty years after coming into being, continue to constitute issues related to the appropriate role of faith in determining public policy.

Article 32 is titled “The promotion of local government institutions”. The exact text reads, “The state shall encourage local government institutions composed of elected representatives of the areas concerned and in such institutions special representation will be given to peasants, workers and women”. Each version of Pakistan’s local government system has been motivated by a military dictator’s zealous lust for the centralisation of power — by draining the provinces of their rightful autonomous status as power-brokers in the Pakistani federation. Rather than fixing what is wrong with military-endorsed local government systems, politicians are all too happy to scrap them, because democratised local governments would eat away at the family-dominated, centralised political party system. The Pakistani state has utterly failed to promote local government institutions.

The third principle is titled “Parochial and other similar prejudices to be discouraged”. Article 33 states that “The state shall discourage parochial, racial, tribal, sectarian and provincial prejudices among the citizens”. This would be funny only if it was fictional. Having sustained and nurtured tribal codes of conduct and justice for the entire duration of its existence in FATA, and having cultivated and nourished the feudal systems of Balochistan, Sindh and Southern Punjab, the Pakistani state has not just tolerated parochial and tribal prejudices. It has actively endorsed and sustained them. The fact that even in the 21st century, little girls can be traded by tribes as penalties is a reflection of how deep the failure of the state has been in living up to the standards of behaviour defined by the principles of policy.

Article 34 is titled “Full participation of women in national life”, and it has the second shortest description of all the principles, saying simply that “Steps shall be taken to ensure full participation of women in all spheres of national life”. Article 35 is titled “Protection of the family, etc.” and is the shortest of all the principles, saying simply that “The state shall protect the marriage, the family, the mother and the child”. The ratio of women in Pakistan’s civil services is shameful. Less than 9 per cent of all federal civil servants (BPS 17 and above) are women. The ratios are likely to be lower in the provincial services, and opportunities for women to make career progressions that lead to leadership positions in government are few and far between. The judiciary, the military and the private sector are not dramatically different. The Pakistani state hardly has much of a defence. It is keen to hand out women’s representation where it can make little impact, such as quotas for unelected representation — but extremely stingy where it can — such as in the public services. The Pakistani state has done a number of small things over the years to integrate women into public life, but those efforts have been miniscule compared to the challenge. The fifth principle about protecting the family is kind of moot when the state’s performance on protecting and promoting women has been as poor as it has.

The sixth principle is Article 36: “Protection of minorities”, and it says that “The state shall safeguard the legitimate rights and interests of minorities, including their due representation in the federal and provincial services”. What possible thing can be said in support of whatever symbolic efforts may exist in this regard while the memory of Gojra hangs in the air like the pungent smell of death?

Of the six principles, thus far, not a single one represents an area of success. Pakistanis can legitimately be disappointed at how little the Pakistani state has done to live up to the words and ideals articulated by the framers of the 1973 Constitution. But insofar as principles go, the meat and potatoes of the “Principles of policy” lie in Articles 37, 38, 39 and in part Article 40.

tbc…