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MAKE what you will of these telling signs: one huge scam after another and no one seems overly concerned. Equally to the point, no one seems to be in charge. The apparatus of government couldn’t be more impressive.
   President/prime minister travel — all too frequently, it must be said — and entire cities come to a standstill. But for all the good this apparatus is doing it might as well not be there.
   The sugar and cement scandals — some of the biggest sugar barons sitting in the cabinet and the cement cartel making millions/billions, no questions asked — would have caused an implosion anywhere else. Not here where the government continues to soldier on regardless. Welcome to the republic of complacency.
   The shockwaves emanating from the attempted privatization of the steel mills would have rocked any other government. Not this one which continues to stand tall, not the barest hint of an apology coming from any of its leading lights. Far from expressing any regrets, some of them have been trying to salvage something from the wreckage, saying that the Supreme Court verdict while declaring the privatization deal null and void had not questioned the ‘process’ of privatization which remained on course.
   Indeed, on paper it remains on course but it is going to be some time before we sight any big-time foreign investor rushing to buy a public utility in Pakistan.
   Despite the induction of army management — which should tell us something about what the army can do and what it cannot — Karachi Electric Supply Corporation was posting huge losses. So its selling off to German investors was considered a good thing. Not any more. Karachi has experienced some of the worst power shortages in its history, with the Germans (astonishingly) proving to be worse managers than our own lot.
   To ease Karachi’s plight, WAPDA has siphoned off power from Punjab and given it to Karachi. The consequences could have been imagined. Punjab was already in the grip of a power crisis. Now it has worsened. (Ask the people of Gujar Khan, next to Rawalpindi, whose anger got the better of their patience last week when they ransacked WAPDA offices and blocked traffic on the Grand Trunk road for nearly five hours).
   Privatization was being hailed as one of the government’s signal economic achievements. Now it seems a subject best avoided.
   You would think the situation couldn’t get worse. Wrong. As if to prove that when it rains it pours, explosive allegations have been levelled by a former head of the Securities and Exchange Commission of Pakistan (SECP), Dr Tariq Hasan, against the country’s top finance managers — finance adviser, Salman Shah, state minister for finance Omar Ayub — for having links with powerful stockbrokers responsible for manipulating the Karachi Stock Exchange — once hailed, along with privatization, as one of the leading symbols of the government’s economic performance.
   Share prices worth billions of dollars were wiped off when the stock market crashed in March 2005. It again went down in May 2006, resulting in further losses.
   Hasan has gone so far as to say he was even under pressure from Prime Minister Shaukat Aziz to keep close contacts (whatever this means) with the same stockbrokers.
   Rebutting the charges, Shah and Ayub have said there was not a shred of evidence to support them. This may be true and Hasan may have his own axe to grind. But it bears remembering that in Pakistan it is hard to find ‘proof’ against anyone, even patwaris and thanedars (junior revenue and police officials) whose corruption we all take for granted.
   If proof or the conviction of the corrupt were the only yardstick of judging right and wrong, Pakistan would be amongst the cleanest countries in the world. Usurpers of power, embezzlers of public money, land grabbers, scam artists, shady stockbrokers: — there is not much certifiable proof against any of them. By this logic they are all clean.
   This doesn’t mean Hasan is necessarily correct. After all, he was head of SECP from 2003 until 2005. For all that happened under his watch he was to a great extent responsible. What did he do, what preventive measures did he take to avert the crash of March 2005? He now suggests his hands were tied. We need an independent probe to get to the bottom of this.
   There is nothing unusual in share prices rising or falling: happens all the time. But it is certainly unusual for a senior regulator, Hasan Tariq, to be saying that finance high-ups (Shah and Ayub) were protecting leading insider traders.
   Shah and Ayub are Shaukat sidekicks. The finance czar remains the prime minister, very much his own master in this domain. He lets no opportunity go by without taking credit for the government’s economic ‘achievements’. As the country’s supreme financial manager and regulator, doesn’t he bear responsibility for the ‘mis-achievements’ as well? Or do different rules apply in his case and he can have his cake and eat it too?
   Anywhere else such charges would be dynamite. Here they have caused ripples and some embarrassment — it would take exceptionally thick hides not to feel embarrassed — but no heads have rolled and none seem about to roll.
   Indeed, if information minister Durrani is to be believed it is all much ado about nothing. ‘This (the market crash) is a political issue. The federal cabinet has not discussed it as it is not a public issue.’ Priceless logic: if a multi-billion dollar share price scam is not a ‘public issue’, what is?
   Durrani remains a master of the surprising statement. As reported, ‘He said the stock market issue was also related to those who preached the ‘charter of democracy’ and were frustrated over the popularity and good performance of the present government.’ This is enough to render anyone speechless. Still, you have to admire the tenacity of the government. Sugar, cement, steel mills and now the Karachi stock exchange but business goes on as usual.
   Is it that bad and is all lost? By no means, there being a silver lining to the darkest clouds. When Chaudhry Shujaat Hussain — the military-picked head of the comic opera known as the Q League — gets booed and jeered by Pakistani doctors in Chicago you can entertain the modest hope that enough is enough and things finally might be moving in the right direction.
   An e-mail from Dr Omar Ali MD describes it all: ‘Something unusual happened at the meeting of the Association of Pakistani Physicians in North America (APPNA)... Pakistani-American doctors hooted down their association office-holders when they tried to introduce Chaudhry Shujaat at their annual meeting in Chicago!
   ‘Pakistani doctors have a reputation for conservatism and in the US most tend to be politically inactive. Their associations do a good deal of charitable work in Pakistan, but in the US they also function as lobbying arms of the military dictatorship and prominent Pakistani doctors have been accused of having an undue fondness for photo-ops with every visiting crooked politician and general from Pakistan. True to this tradition, some office-holders of APPNA invited Chaudhry Shujaat to the annual APPNA banquet this year. In the presence of about 3,000 people he was introduced as ‘former prime minister of Pakistan, Chaudhry Shujaat Hussain’, and the attendees were asked to ‘give him a round of applause’.
   ‘To the evident shock and amazement of the lackeys on stage, the hall erupted in loud boos and shouts of ‘shame, shame’. The speaker tried one more time, saying political disagreements were one thing but he was an honoured guest of APPNA, at which point the hall echoed again with boos and catcalls. So the APPNA officials finally gave up and no more was heard of Chaudhry Shujaat or his services to the nation.’
   Dr Omar asks: ‘...if even the North American Pakistani physicians are not willing to applaud the current military regime and its hired guns, then will (someone) have to pack his bags sooner than expected?’ Intriguing question and good phrase: ‘hired guns’.
   We print this article by arrangement with Dawn

It was a small stone hurled at the seemingly placid waters of the Indian economy, but the ripples went far and wide. On July 6, the government announced that ‘taking into account the concerns (of some of the UPA constituents and allies), the prime minister has decided to keep all disinvestment decisions on hold, pending further review’. This came just three days after Manmohan Singh said he was ‘not unambiguously attached to reforms’ and we ‘must compete with the world on our own strength’. It was as if the curtains had dropped on economic reforms after two years of flip-flops.
   Worse was to come.
   A whisper campaign that the PM may resign, as he was piqued by coalition pressures and stung by the way his ministers were pursuing independent agendas. As finance minister under Narasimha Rao, Manmohan had offered to resign thrice; so it was easy for the rumour to grow wings. Instantly, markets tumbled, analysts frowned and the world sat up and took notice. Russia’s Pravda described Manmohan as ‘the boy who stood on the burning deck’; most others said he was ‘under siege’ and helpless. Wasting no time, the BJP called for mid-term polls and a statement on privatisation. Although the PMO clarified there was no truth to the rumour, a big question looms. Is this the death of reforms as we have known it? Will we be stuck at 7-8 per cent growth?
   In a curiously prescient way, the situation today is a fast forward of a scenario envisioned for India 2025 at last November’s WEF summit with ‘Atakta Bharat’ or India Getting Stuck as the theme. ‘It describes an India that lacks unified action and effective leadership, creating a continuous and cumulative source of problems for India,’ says the background paper.
   This was why Manmohan as PM, with his reformist credentials and unsullied political record, was the best possible news out of a coalition government of conflicting ideologies.
   Yet, the optimism didn’t last. Says Arun Maira, chairman, Boston Consulting Group, and head of the team that wrote the WEF-CII paper: ‘Many economists and business leaders felt such a situation wasn’t possible. They felt India was grooving nicely and everyone was aligned towards the reforms required. This scenario is Bollyworld — glitzy, unreal, fun while it lasts.”
   In fact, adds Maira, ‘the Atakta Bharat scenario was built upon an even earlier work: Buffaloes Wallowing. Many large buffaloes (leaders?) in a pond are unable to move out because they keep butting against each other, while a child is waiting outside to get into the pond to have some water. The child represents the future of India and our demographic advantage. Bollyworld gives rise to Atatkta Bharat and this problem can be solved only by a process of creating alignment amongst several stakeholders and potential coalition partners.’
   In the absence of which, nine major areas are stymied for lack of action: public sector modernisation and disinvestment, agriculture and land titles, FDI in retail and insurance, pension and banking, urban infrastructure efficiency and user charges, full oil price deregulation, small-scale dereservation, cut in food subsidy and cleaning up pds, higher education and administrative reforms. Apart from the Information Act and the airports modernisation, the UPA has only managed to push through telecom FDI hike and made a start on retail FDI.
   After Sonia Gandhi’s statement that ‘the present government is too preoccupied with foreign investment and disinvestment’, divestment and foreign entry in banking and insurance is virtually dead. Organised employment lobbies are too hard to crack; even the BJP balked at it. But, Abheek Barua, chief economist, ABN-Amro, says he is optimistic about labour laws ‘because with the SEZ initiative picking up, states are likely to vie with each other in offering flexible labour structures’.
   In fact, insiders say, with the Sonia-led Congress trying to consciously create a left-of-centre image of concern for the aam aadmi, especially farmers and agriculture workers, and emphasise ‘employment, (primary) education, agriculture and health’ for electoral mileage, policy changes in areas purportedly for the ‘urban middle class’ will be bypassed.
   Says R. Seshasayee, CII president and Ashok Leyland MD: ‘The common minimum programme has become the common maximum programme as the government is unable to do anything outside it. But without financial and public sector reforms, there is no possibility of 12 per cent growth.’ Adds Chetan Ahya, India economist, Morgan Stanley: ‘One of the most important goals for the UPA is equitable growth and redistribution. For that you need to grow the pie and the lag in the reform process is a drag on that. Policymakers need to realise that they can’t take growth coming from cyclical trends as sustainable.’
   Is there a need to rewrite the CMP then? Answers NIPFP director M. Govinda Rao: ‘The government should have charted out where they needed the consensus and where they didn’t. We don’t need consensus for micro-level reforms or for creating the right environment for public-private partnerships in infrastructure. Even fiscal and financial sector reforms can be carried out in ‘stealth’.’ Former economic affairs secretary E.A.S. Sarma agrees: ‘The CMP has many positive elements — welfare of workers and tribals, employment, rights of slum-dwellers, rights of project displaced persons, etc. Only an insensitive government will fail to understand the impact of these policies on the people. For instance, during the Narmada controversy, the PM could have announced a tribal development policy, recognising their right to local land, forest and mineral resources to tackle the problem.’
   Out-of-the-box thinking is what Saumitra Chaudhuri, PM’s economic council member, advises. ‘The biggest challenge is the execution of decisions involving public funds. It’s true of highways, airports, urban mass transit system, power, urban infrastructure, education, even farm sector.’ These are the toughest reforms, for there is a huge legacy of weak organisations, pervading corruption, absence of the right incentives (and disincentives) and of a sense of urgency. ‘The hugely different outcomes in power and telecom shows how severely the differential mess on the ground can aid or impede progress,’ adds Chaudhuri. This is also a major cause of the PM’s angst — whether administrative reforms will ever happen despite a hyper-active second commission.
   The Administrative Reforms Commission has recommended scrapping the Official Secrets Act for greater accountability. It is working on the Rural Employment Guarantee Act (report in July), Public Order and Conflict Resolution (in August) and the civil service (in November). Notes its chairman Veerappa Moily: ‘The government should function as a service centre, not a power centre.’ But, says S.L. Rao, ‘reforms to improve the administration’s capability to spend without theft or waste, speed up approval for investments and give more power to local authorities haven’t taken place.’
   Instead, there are enough instances of how not to do things. Says Shah: ‘Exuberant expenditures are shooting up. By 2008-09 the situation could become tough. If the FRBM targets are violated, India will lose credibility. Instead of fundamental reforms in higher education, the protection moves in higher education and private industry are damaging optimism and investment.’ Arvind Panagariya, Columbia University professor, agrees: ‘Some critics describe India as a one-trick pony: IT. The turnover rates and wage hikes in the industry tell us that the supply of the highly educated is not infinitely elastic.’
   The reforms controversy is a self-inflicted wound for the Congress, especially Manmohan. In the 1990s, he reformed the areas that offered the least resistance, as there was weak consensus on tougher reforms. Coalition politics has taken away even the remnants of that consensus. Yet all may not be lost, says economist Meghnad Desai. ‘Even now the reform process is not dead completely. The DMK would not fight equity sale of PSUs outside Tamil Nadu and so on for each UPA partner. So slowly, stealthily, reform will progress. The best thing is that the dynamic private sector is not waiting for the government to help it. A weak, ineffective government is fine; what is to be feared is a powerful anti-reform coalition. Of that there is little chance.’ But such consolation is unlikely to get us double-digit growth rates.
   Outlook India online edition, July20, 2006

As the TV networks give unlimited airtime to Israel’s apologists, the message rolls out that no nation, least of all Israel, can permit bombardment or armed incursion across its borders without retaliation.
   The guiding rule in this tsunami of drivel is that the viewers should be denied the slightest access to any historical context, or indeed to anything that happened prior to June 28, which was when the capture of an Israeli soldier and the killing of two others by Hamas hit the headlines, followed soon thereafter by an attack by a unit of Hezbollah’s fighters.
   Memory is supposed to stop in its tracks at June 28, 2006.
   Let’s go on a brief excursion into pre-history. I’m talking about June 20, 2006, when Israeli aircraft fired at least one missile at a car in an attempted extrajudicial assassination attempt on a road between Jabalya and Gaza City. The missile missed the car. Instead it killed three Palestinian children and wounded 15.
   Back we go again to June 13, 2006. Israeli aircraft fired missiles at a van in another attempted extrajudicial assassination. The successive barrages killed nine innocent Palestinians.
   Now we’re really in the dark ages, reaching far, far back to June 9, 2006, when Israel shelled a beach in Beit Lahiya killing 8 civilians and injuring 32.
   That’s just a brief trip down Memory Lane, and we trip over the bodies of twenty dead and forty-seven wounded, all of them Palestinians, most of them women and children.
   Israel regrets… But no! Israel doesn’t regret in the least. Most of the time it doesn’t even bother to pretend to regret. It says, ‘We reserve the right to slaughter Palestinians whenever we want. We reserve the right to assassinate their leaders, crush their homes, steal their water, tear out their olive groves, and when they try to resist we call them terrorists intent on wrecking the “peace process’”.
   Now Israel says it wants to wipe out Hezbollah. It wishes no harm to the people of Lebanon, just so long as they’re not supporters of Hezbollah, or standing anywhere in the neighbourhood of a person or a house or a car or a truck or a road or a bus or a field, or a power station or a port that might, in the mind of an Israeli commander or pilot, have something to do with Hezbollah. In any of those eventualities all bets are off. You or your wife or your mother or your baby get fried.
   Israel regrets… But no! As noted above, it doesn’t regret in the least. Neither does George Bush, nor Condoleezza Rice nor John Bolton who is the moral savage who brings shame on his country each day that he sits as America’s ambassador (unconfirmed) at the UN and who has just told the world that a dead Israel civilian is worth a whole more in terms of moral outrage than a Lebanese one.
   None of them regrets. They say Hezbollah is a cancer in the body of Lebanon. Sometimes, to kill the cancer, you end up killing the body. Or bodies. Bodies of babies. Lots of them. Go to the website fromisraeltolebanon.info and take a look. Then sign the petition on the site calling on the governments of the world to stop this barbarity.
   You can say that Israel brought Hezbollah into the world. You can prove it too, though this too involves another frightening excursion into history.
   This time we have to go far, almost unimaginably far, back into history. Back to 1982, before the dinosaurs, before CNN, before Fox TV, before O’Reilly and Limbaugh. But not before the neo-cons who at that time had already crawled from the primal slime and were doing exactly what they are doing now: advising an American president to give Israel the green light to ‘solve its security problems’ by destroying Lebanon.
   In 1982 Israel had a problem. Yasir Arafat, headquartered in Beirut, was making ready to announce that the PLO was prepared to sit down with Israel and embark on peaceful, good faith negotiations towards a two-state solution.
   Israel didn’t want a two-state solution, which meant –– if UN resolutions were to be taken seriously –– a Palestinian state right next door, with water, and contiguous territory. So Israel decided to chase the PLO right out of Lebanon. It announced that the Palestinian fighters had broken the year-long cease-fire by lobbing some shells into northern Israel.
   Palestinians had done nothing of the sort. I remember this very well, because Brian Urquhart, at that time assistant secretary general of the United Nations, in charge of UN observers on Israel’s northern border, invited me to his office on the 38th floor of the UN hq in mid-Manhattan and showed me all the current reports from the zone. For over a year there’d been no shelling from north of the border. Israel was lying.
   With or without a pretext Israel wanted to invade Lebanon. So it did, and rolled up to Beirut. It shelled Lebanese towns and villages and bombed them from the air. Sharon’s forces killed maybe 20,000 people, and let Lebanese Christians slaughter hundreds of Palestinian refugees in the camps of Sabra and Chatilla.
   The killing got so bad that even Ronald Reagan awoke from his slumbers and called Tel Aviv to tell Israel to stop. Sharon gave the White House the finger by bombing Beirut at the precise times –– 2.42 and 3.38 –– of two UN resolutions calling for a peaceful settlement on the matter of Palestine.
   When the dust settled over the rubble, Israel bunkered down several miles inside Lebanese sovereign territory, which it illegally occupied, in defiance of all UN resolutions, for years, supervising a brutal local militia and running its own version of Abu Graibh, the torture centre at the prison of Al-Khiam.
   Occupy a country, torture its citizens and in the end you face resistance. In Israel’s case it was Hezbollah, and in the end Hezbollah ran Israel out of Lebanon, which is why a lot of Lebanese regard Hezbollah not as terrorists but as courageous liberators.
   The years roll by and Israel does its successful best to destroy all possibility of a viable two-state solution. It builds illegal settlements. It chops up Palestine with Jews-only roads. It collars all the water. It cordons off Jerusalem. It steals even more land by bisecting Palestinian territory with its ‘fence’. Anyone trying to organise resistance gets jailed, tortured, or blown up.
   Sick of their terrible trials, Palestinians elect Hamas, whose leaders make it perfectly clear that they are ready to deal on the basis of the old two-state solution, which of course is the one thing Israel cannot endure. Israel doesn’t want any ‘peaceful solution’ that gives the Palestinians anything more than a few trashed out acres surrounded with barbed wire and tanks, between the Israeli settlements whose goons can murder them pretty much at will.
   So here we are, 24 years after Sharon did his best to destroy Lebanon in 1982, and his heirs are doing it all over again. Since they can’t endure the idea of any just settlement for Palestinians, it’s the only thing they know how to do. Call Lebanon a terror-haven and bomb it back to the stone age. Call Gaza a terror-haven and bomb its power plant, first stop on the journey back to the stone age. Bomb Damascus. Bomb Tehran.
   Of course they won’t destroy Hezbollah. Every time they kill another Lebanese family, they multiply hatred of Israel and support for Hezbollah. They’ve even unified the parliament in Baghdad, which just voted unanimously –– Sunnis and Shi’ites and Kurds alike –– to deplore Israel’s conduct and to call for a ceasefire.
   I hope you’ve enjoyed these little excursions into history, even though history is dangerous, which is why the US press gives it a wide birth. But even without the benefit of historical instruction, a majority of Americans in CNN’s instant poll –– about 55 per cent out of 800,000 as of midday, July 19 –– don’t like what Israel is up to.
   Dislike is one thing, but at least in the short term it doesn’t help much. Israel’s 1982 attack on Lebanon grew unpopular in the US, after the first few days. But forcing the US to pressure Israel to settle the basic problem takes political courage, and virtually no US politician is prepared to buck the Israel lobby, however many families in Lebanon and Gaza may be sacrificed on the altar of such cowardice.
   Counterpunch, July 21, 2006