Tuesday, February 15, 2011

Pakistan can survive without US aid

The US has threatened Pakistan that if Raymond Davis is not released, then there is a possibility that US aid to Pakistan will be cut. The Washington Post had speculated that America would stop dialogue at all levels including strategic dialogue, if Raymond Davis was not released quickly. Though, the US administration itself has not said in so many words, yet it is conveying the message through its media or law makers. Meanwhile, the three-member delegation of House of Representatives in their meetings with Prime Minister Yousuf Raza Gilani and other leaders demanded of the government to release Raymond Davis, who was arrested on 27th January 2011 after shooting dead two Pakistani motorcyclists. Representative Buck McKeon, chairman of the House Armed Services Committee reportedly told the Pakistani leaders that Congress was working on the budget, while the representative John Kline hinted that many lawmakers would support cutting aid if the American, who the United States insists has diplomatic immunity, is not freed.

For a change, our Foreign Office has picked up the courage to tell Americans that the matter is with the court. Anyhow, the situation, by and large, is of our own making, as our ruling elite did neither pursue economic policies to make Pakistan self-reliant nor did they learn to live within their means. They had to depend on the US for aid for their failure to generate revenue by taxing the rich and to control tax evasion of more than Rs. 1000 billion. Though belatedly, the political leadership has taken steps by dissolving the jumbo-cabinet and is likely to form a small cabinet, which could be described as humble beginning, yet a lot more needs to be done. It is true that Pakistan is facing fiscal deficit and trade deficit; however the fiscal deficit can be controlled through austerity and other measures like stopping tax evasion and corruption. Trade deficit could be reduced through banning the import of luxury items. Last but not the least, Zardaris, Sharifs, Chaudharys and others who have stashed their wealth in foreign banks and invested in real estate and industries should bring that wealth back.

With all these steps, Pakistan can say no to the IMF and also resist American pressure, and can safeguard its integrity and sovereignty. Yet a lot has to be done, and the ruling and opposition parties must wean away from the habit of amassing wealth through illegal means. The role of our apex court is commendable, but it should not only focus on written-off loans during the last two years but also from 1977, as one would not hear large scale corruption during the tenure of the governments up to 1958 and also during Ayub era. Anyhow, if corruption can be controlled, appointments in public sector organizations are made on merit and losses can be minimized, and due taxes are collected through efficient and honest officers Pakistan can come out of the dependency syndrome within a short period. Supreme Court has also done well to stop renewal of exploration and mining licenses in regard to Reko Diq gold and copper mines, and should not allow squandering the national resources.

Some analysts and ‘brilliant’ panelists are trying to create fear in the minds of the people that if Raymond Davis is not released, the US would stop economic and military aid. Instead of suggesting how to get out of the dependency syndrome and make Pakistan a self-reliant economy, they want Pakistan should tread the beaten track. Let us examine the impact if the US stops its aid and also persuades the IMF not to issue further tranches, what is likely to happen? According to Kerry-Lugar bill, the US is to give $1.5 billion per year, out of which more than 50 per cent is to be spent through NGOs. With America’s economy already in dire straits, and with Republicans’ majority in the Congress, there is possibility of major cut in foreign aid to other countries. And the axe is surely to fall on Pakistan and not Israel or other American allies. As regards reimbursement of Coalition Support Fund, the US has delayed payment for the last one year, and has paid only a few hundred million dollars against the amount of $1.5 billion.

However, Pakistan will have to revise its budget projections, should America stop aid to Pakistan. Look at the position of trade deficit If Pakistan stops importing luxuries and revises its projections of imports at $20 billion (instead of $32 billion), and lowers the target of export to 11 billion (instead of $20 billion). With Pakistani expatriates’ remittances of $10 billion, Pakistan will overcome the problem of current account deficit. According to 2010-11 budget, Pakistan’s estimated tax revenue is Rs.1671 billion; non-tax revenue is 904 that totals Rs.2575 billion. If tax evasion can be controlled and the rich are to pay due tax, there would not be decline in revenue. Finally, all incomes have to be taxed. If agriculture is a provincial subject, let the provinces enact and impose tax on agricultural income. One does not understand that when all citizens whether businessmen, industrialists, doctors, engineers, professionals and salaried class are paying tax on taxable income, why income from agricultural land should be exempted.

The question is who has brought Pakistan to the present pass? The answer is that Pakistan’s incompetent and inept ruling elite by becoming a pawn in the hands of Americans, first by joining defense pacts with the US and the West, then by joining Afghan jihad and finally in the war on terror. One can find American agents in political parties, in media and other institutions as well. Lately, it is military that has given courage to the political leadership to put their act together to safeguard sovereignty of the country. It has to be said that Afghan jihad, and latter the war on terror, which has now become our own war due to flawed policies of the US, especially the CIA. Unfortunately, the US spies and media blame Pakistan for their flawed decisions and failures. Bruce Reidel, a former CIA director, in his book ‘Deadly Embrace: Pakistan, America and Global Jihad’, sets out to explain “why successive US administrations have undermined civil government in Pakistan, aided military dictators and encouraged the rise of extremists Islamic movements that now threaten the United States at home and abroad”.

This question has not been phrased properly. First of all, the word ‘encouraged’ should have been replaced by the word ‘sponsored’, as it was America that tried to settle score with the former Soviet Union to avenge the defeat in Vietnam. Secondly, it has always been well-thought out plan of every US administration to support autocrats and military dictators, as it is difficult to deal with the cabinet and members of the parliaments to advance its interests. In developing countries, however, so-called democratic dispensations are no different from military dispensations.

Anyhow, when dictators become unpopular by pursuing American policies and also due to America’s unqualified support to Israel, America issued only one liner statement that ‘he had become unpopular with his people’. It happened with Shah of Iran, Suharto of Indonesia, Ayub Khan of Pakistan and lately Zine al-Abedin of Tunisia. And only incorrigible optimist can hope any change in America’s approach. Pakistan’s rulers should remember Henry Kissinger’s words that “America is dangerous for its friends and foes alike”.

—The writer is Lahore-based senior journalist.