By Sikander Hayat
What is the most pressing problem of Pakistan at the moment, terrorism you might say but I believe that there is an even bigger issue which is the underlying cause for terrorism as well. It is that of economy. It is rarely the case that chattering classes in Pakistan and the people who roam the corridors of power give economy a priority in their decision making. They are more concerned with trivialities of daily politics and the petty issues that have hampered Pakistan’s progress as a nation in last 60 years. As a people, Pakistanis like good gossip and that need is amply fulfilled by the politics. To them economy is boring and although it is the biggest problem Pakistan is facing right now, it is somewhere near the bottom on the list of priorities.
After elections brought a civilian government back to power, Pakistan is reeling. It's not just the attacks by militants. The economy, which had been growing steadily, has been hit hard by spiking fuel and food costs. The new leadership that forced Pervez Musharraf to leave power, promised to bring peace and progress. Instead, the new leaders are preoccupied with wrangling over petty issues.
In order to fix Pakistan, the government must move simultaneously on several fronts: besides tackling militancy, also the slowing economy, skyrocketing inflation, a nationwide electricity shortage and the integration of the troubled tribal areas ( this can be done by giving them provincial status) that operate under colonial-era laws separating them from the rest of the country. But first the leaders of the PML (N) & PPP need to figure out how to cooperate.
The economy needs attention. During Musharraf's eight-year tenure as President, foreign direct investment rose, the Karachi stock exchange outperformed regional neighbours and GDP grew on average 7% a year. The lifting of international economic sanctions, imposed in 1998 when Pakistan tested its first nuclear bomb, was partially responsible for the boost, but Musharraf also privatised key industries and opened up the banking sector. The rapid growth, however, exposed cracks in infrastructure that was failing to keep up.
While Musharraf's government brought electricity to remote villages, it failed to increase energy production. If you have that kind of growth but do not generate the power to go with it then the system will collapse. Load-shedding, as much as 18 hours a day in some areas, has brought production lines in key employment sectors such as textile-manufacturing to a standstill. Rising oil prices had been mitigated by government subsidies during much of Musharraf's tenure, but such subsidies can no longer be sustained. The cost of fuel, used for both transportation and energy production, jumped astronomically, echoed by an equal leap in food-price inflation. The price of bread has gone up many folds.
The new government points out that it is not responsible for the country's current economic difficulties. PPP says that food-price inflation and high oil prices are now a global phenomenon. Bringing prices down may be beyond the capacity of any Pakistani government. But Gilani's administration cannot just wring its hands. It could start by encouraging foreign investment and privatization, moves that have been anathema to his socialist-leaning PPP.
Most urgently the government must start to address Pakistan's pressing energy needs. It has already installed barge-based
power generators that run on diesel, but that is a temporary, and expensive, solution. The building of dams and coal-based generators is stymied by political disputes. The Indus River, a potential source of hydropower, runs through two provinces whose governments cannot agree on water-sharing rights. Development in Baluchistan, which has rich reserves of coal, has been held hostage to a local insurgency rooted in long-simmering resentments over what it considers to be the central government's exploitative approach to the province. Baluchistan is central to Pakistan's economy as it is incredibly rich in not just the resources that are being exploited, but in the
resources that are yet to be exploited. Bringing the alienated Baloch back into the fold by stopping military operations and by releasing political prisoners means that the riches of Baluchistan will work to benefit not just the federation but also the Baloch people.
Let me tell you that economy and terrorism are interlinked. As long as the people of FATA remain poor and without any stake in the mainstream Pakistan, the fight will go on. Development that brought schools, jobs, roads, health care and electricity to the rest of Pakistan largely bypassed the tribal areas. Unemployment among the population of 3.5 million hovers around 70%. Two-thirds live below the poverty line. Only 6% of inhabitants can read. For women it's less than 1%. Most FATA people want development, but not at the expense of their traditional ways. Sharia law is the foundation of their justice system and few will willingly give it up.
If Washington really wants to help Pakistan, its policies must move beyond trying to micro managing Pakistan and give the people a higher priority. Allowing Pakistan to trade freely with US will be the biggest step that the US government can take to move Pakistan from one of its gravest concerns to a friendly place. America must understand that this is Pakistan's war to win, and the best way the US can help is by letting it fight on its own terms. But the new government can only do that if the two main parties of Pakistan work together. They must remember that the true enemy is not the military or their political opponents, but poverty, extremism and injustice.
What is the most pressing problem of Pakistan at the moment, terrorism you might say but I believe that there is an even bigger issue which is the underlying cause for terrorism as well. It is that of economy. It is rarely the case that chattering classes in Pakistan and the people who roam the corridors of power give economy a priority in their decision making. They are more concerned with trivialities of daily politics and the petty issues that have hampered Pakistan’s progress as a nation in last 60 years. As a people, Pakistanis like good gossip and that need is amply fulfilled by the politics. To them economy is boring and although it is the biggest problem Pakistan is facing right now, it is somewhere near the bottom on the list of priorities.
After elections brought a civilian government back to power, Pakistan is reeling. It's not just the attacks by militants. The economy, which had been growing steadily, has been hit hard by spiking fuel and food costs. The new leadership that forced Pervez Musharraf to leave power, promised to bring peace and progress. Instead, the new leaders are preoccupied with wrangling over petty issues.
In order to fix Pakistan, the government must move simultaneously on several fronts: besides tackling militancy, also the slowing economy, skyrocketing inflation, a nationwide electricity shortage and the integration of the troubled tribal areas ( this can be done by giving them provincial status) that operate under colonial-era laws separating them from the rest of the country. But first the leaders of the PML (N) & PPP need to figure out how to cooperate.
The economy needs attention. During Musharraf's eight-year tenure as President, foreign direct investment rose, the Karachi stock exchange outperformed regional neighbours and GDP grew on average 7% a year. The lifting of international economic sanctions, imposed in 1998 when Pakistan tested its first nuclear bomb, was partially responsible for the boost, but Musharraf also privatised key industries and opened up the banking sector. The rapid growth, however, exposed cracks in infrastructure that was failing to keep up.
While Musharraf's government brought electricity to remote villages, it failed to increase energy production. If you have that kind of growth but do not generate the power to go with it then the system will collapse. Load-shedding, as much as 18 hours a day in some areas, has brought production lines in key employment sectors such as textile-manufacturing to a standstill. Rising oil prices had been mitigated by government subsidies during much of Musharraf's tenure, but such subsidies can no longer be sustained. The cost of fuel, used for both transportation and energy production, jumped astronomically, echoed by an equal leap in food-price inflation. The price of bread has gone up many folds.
The new government points out that it is not responsible for the country's current economic difficulties. PPP says that food-price inflation and high oil prices are now a global phenomenon. Bringing prices down may be beyond the capacity of any Pakistani government. But Gilani's administration cannot just wring its hands. It could start by encouraging foreign investment and privatization, moves that have been anathema to his socialist-leaning PPP.
Most urgently the government must start to address Pakistan's pressing energy needs. It has already installed barge-based
power generators that run on diesel, but that is a temporary, and expensive, solution. The building of dams and coal-based generators is stymied by political disputes. The Indus River, a potential source of hydropower, runs through two provinces whose governments cannot agree on water-sharing rights. Development in Baluchistan, which has rich reserves of coal, has been held hostage to a local insurgency rooted in long-simmering resentments over what it considers to be the central government's exploitative approach to the province. Baluchistan is central to Pakistan's economy as it is incredibly rich in not just the resources that are being exploited, but in the
resources that are yet to be exploited. Bringing the alienated Baloch back into the fold by stopping military operations and by releasing political prisoners means that the riches of Baluchistan will work to benefit not just the federation but also the Baloch people.Let me tell you that economy and terrorism are interlinked. As long as the people of FATA remain poor and without any stake in the mainstream Pakistan, the fight will go on. Development that brought schools, jobs, roads, health care and electricity to the rest of Pakistan largely bypassed the tribal areas. Unemployment among the population of 3.5 million hovers around 70%. Two-thirds live below the poverty line. Only 6% of inhabitants can read. For women it's less than 1%. Most FATA people want development, but not at the expense of their traditional ways. Sharia law is the foundation of their justice system and few will willingly give it up.
If Washington really wants to help Pakistan, its policies must move beyond trying to micro managing Pakistan and give the people a higher priority. Allowing Pakistan to trade freely with US will be the biggest step that the US government can take to move Pakistan from one of its gravest concerns to a friendly place. America must understand that this is Pakistan's war to win, and the best way the US can help is by letting it fight on its own terms. But the new government can only do that if the two main parties of Pakistan work together. They must remember that the true enemy is not the military or their political opponents, but poverty, extremism and injustice.
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