The above is the impressive (translated) title of a book recently written by Dr Shahid Hassan Siddiqui, a career banker who, very logically, has now become an economic analyst, and writes for national newspapers. The fact that the book begins with reviews by former Justice Saeed-uz-Zaman Siddiqui, Mushtaq Ahmed Yusufi, Vice Admiral (r) Fayaz-ur-Rehman (r) and Dr Abdul Wahab, VC Muhammad Ali Jinnah University, gives the book a fair amount of authenticity.
That said, readers' views can, in some cases, differ with the conclusions drawn by the author. In essence, the book covers historical developments in Pakistan over the past decade and half, more often the events after 9/11 that made Pakistan suffer badly from its fallout. Part-I of the book therefore covers the disastrous after-effects of Pakistan's participation in America's highly controversial 'war on terror'.
The author blames the Zionist-neoconservative combine for the present state of insecurity in Pakistan, which is their agenda for shackling Middle Eastern and East Asian resource-rich states, but faults the Musharuff and the present regime for compromising with the US on virtually every vital national interest.
But while recommending a strategy to confront today's mess, the author makes a valid point by saying that, in fighting the 'war on terror', Pakistan's participation should have been limited to the three areas spelled out in General Musharuff's September 19, 2001 speech ie sharing intelligence, use of Pak airspace and logistics support.
Recalling the events that took place after 9/11, in almost a chronological order, the author concludes that co-operation with the US in this war must be limited and made conditional. This war should be fought under a Pakistani agenda that prioritises negotiations with terrorists and winning the hearts and minds of the people.
Part-II of the book very appropriately focuses on the economy and the way it was influenced by the changing profile of the financial services sector-the sector he worked in until 1991. He is clearly dismissive of the role of the IMF and the "friends of Pakistan" (FoP) as agents pursuing the Zionist-neo conservative agenda.
According to him promulgating the NRO, delay in restoring the judiciary, flawed trade-offs with FoP, agreeing to IMF's crippling terms of lending to borrow the biggest-ever amount to face the losses of 'war on terror', military action in Swat and South Waziristan, defiance of Supreme Court verdict on annulling NRO (and not pursuing the Swiss authorities), build-up of tensions between the pillars of the state, and gross misuse of state resources in the name of building political consensus, are a part of the US destructive strategy.
He discusses in detail Pakistan's continued failure to increase its tax-to-GDP ratio, and rightly faults successive parliaments for not achieving that aim-the sitting parliament consisting of 61 percent members who don't pay any taxes because they claim having annual incomes of less than Rs 100,000.
This is followed by a chapter on the variety of ways wherein black wealth was accumulated, and recommends its seizer. In this context, he goes to the extent of recommending that loans obtained by corrupt rulers may not be repaid, and quotes some interesting examples, one relating to Cuba, that is simply unbelievable yet true.
According to him, America occupied Cuba 110 years ago, and thereafter refused to repay to Spain a loan the former Cuban rulers had obtained on the grounds that the people of Cuba weren't responsible for repaying that loan. Whether today the IMF, WB or the government of a lending state will accept this logic is highly unlikely.
While the chapter on energy and power sectors is brief, the one on NPLs and regulatory laxity in ensuring their recovery, with specific reference to the misuse and misinterpretation of Circular No 29 of the State Bank of Pakistan (SBP) to help out the defaulters, is very comprehensive and exposes a great deal of illegal and immoral accommodation that was afforded to the defaulters.
While he admits that Islamic banks are in their infancy, the author believes that country-wide implementation of Islamic banking should have been made mandatory to eliminate the interest-based system, though he admits that Islamic banks are not doing justice to Islamic banking when taking their share in the borrowers' profits.
The issue that he doesn't highlight is pervasive financial illiteracy about both systems. Nor does he comment on the impact of the almost sudden introduction of the 'floating' mark-up rates in the backdrop of pervasive financial illiteracy that banks-both Islamic and traditional-have been exploiting to the hilt.
The readers may not agree with all the views the author expresses as the reasons why the economy went into a tail spin after 2006 (eg on the role of 'war on terror' therein) but in many cases he is on the right track. There is no doubt that developing distortions (consumerism, over-lending by banks and leasing companies, and rising imports) were wrongly portrayed as successes.
Equally incorrect were the disclosures about inflation (going down to 3.8% in 2002-03), increase in exports, KSE becoming one of the world's most well-managed Stock Exchange (despite the crashes in 2003, 2005 and 2008), recovery of NPLs by banks and of stolen wealth by NAB, declining poverty, etc. In this context, the chapter on the budget speeches of the Federal Finance Ministers is very educative as well as shocking.
The author makes a valid, though almost eternally ignored point in the chapter entitled "Is it possible to survive without US aid?" According to him Pakistanis living abroad have savings of over US $300 billion (exaggerated estimate) of which even 20 percent, if invested in Pakistan, could repay the country's entire external debt.
Part-III of the book contains the author's comprehensive package of recommendations for security, political, and economic reforms. It is a long chapter that summarises the flaws discussed in earlier chapters, and based thereon, makes recommendations. It is worth reading, though the recommendations lack the practical aspects on how they could be implemented.
Many of the recommendations, though generalised, make sense and need consideration of those managing the affairs of the state, particularly the ones relating to austerity by the (immunity claiming) state officeholders, bureaucrats, and top brass of the armed forces. What he has voiced are demands that are now backed even by the IMF.
The recommendations that are practicable relate to attracting the savings of non-resident Pakistanis but need far more in terms of assurances, given our sad history of freezing of foreign currency accounts. Similarly, he is right in demanding of the SBP to limit the mark-up spreads being earned by banks, as well as their exuberance.
The last part of the book consists of a selection of articles. But one oddity about the book is that it does not provide references to the statements and assertions attributed to various persons nor does it indicate the source of the huge amount of statistics quoted in the book. Nor does it contain the traditional index at the end of the book that helps the reader locate the quoted names, places, events, figures, etc - a key element that shouldn't have been missed out.
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