President Asif Ali Zardari has, by publicly voicing a rumour swirling in the federal capital, once again elevated it to the realm of the possible. Like in the past there was a recurring theme and venue: imminent fall of his government at the mausoleum of the Bhutto family.
This time the President indicated that the threat to his government was from the judiciary and his government was to be replaced by technocrats who, he maintained, 'could not see the slums of the poor'; unlike politicians.
If one takes this statement at face value one obvious fact must be acknowledged: that his economic team consists of technocrats. Minister of Finance Dr Hafeez Sheikh as well as Deputy Chairman Planning Commission Nadeem ul Haq, charged with the responsibility of providing a road map for this hapless country's economic development, have spent the majority of their professional lives as international bureaucrats/technocrats.
The President's supporters may well claim that one of these two appointments, that of Dr Hafeez Sheikh, was sponsored by the International Monetary Fund (IMF) - a sponsorship that may well explain why Sheikh is focused on ensuring that the Fund's stalled Stand-By Arrangement (SBA) is reactivated at all costs. These costs are, unfortunately, and need one add as correctly analysed by the President, not being borne by the technocrats.
Pakistan has two types of technocrats. First, those who have left/retired from international financial institutions (IFIs), including Dr Sheikh and Haq, those who take a sabbatical to head some department or institution in this country, for example Musharraf appointed State Bank Governor Shamshad Akhtar and those who are employed by public/private sector institution in a third country an example being Shaukat Aziz. Under Pakistani law those employed by IFIs are exempt from paying income tax and those employed in the public/private sector institutions in a third country are exempt to the extent that they pay tax to the country where they are employed.
However, while at first glance, one may consider this appropriate as these individuals are employed by institutions whose income is exempt from taxes in nearly all countries barring the US, yet two facts militate against this view: (i) former and existing staff of IFIs or those employed by private/public institutions abroad are neither feted by their country of origin nor are they offered critical ministries/governorship of central banks/heading the alternate energy board with the power and, indeed, the responsibility for ensuring an equitable tax system; and (ii) while no doubt employment in the IFIs is through a rigorous selection process yet IFIs do have job quotas for each member country though they vigorously deny this. In other words the passport one holds does play a role in the selection process. Given these two facts, one would have hoped that Dr Sheikh and Haq had, in the interest of generating respect for their own commitment to this country's development, revisited this aspect of our inequitable and anomalous tax structure.
The second type of technocrats are those employed locally, be it in the centre or the provinces, and who do pay taxes to this country - both income tax and an entire range of indirect taxes. However domestic technocrats/bureaucrats are entitled to several perks including housing, special rate of petrol for government cars as well as a certain minimum level of free utilities like electricity and telephone. And to top it all, domestic technocrats with their close liaison with politicians recently succeeded in convincing Prime Minister Gilani to increase their salary by 50 percent during the current year. This is in spite of the fact that people from all other walks of life witnessed a marked decline in the purchasing power of each rupee earned without a comparable rise in income.
The PPP government may well argue that it doubled the minimum wage, however this can be delegated to the realm of fantasy as there is absolutely no enforcement and few labourers, if any, are being paid the enhanced rate.
Thus the President's statement that technocrats can not see the slums of the poor, is credible. His claim that politicians can, is, to some extent, an accurate assessment. The growing number of cynics amongst us would no doubt add a rider: politicians can see the slums only before elections when they are forced to campaign in their constituencies. There is some merit to this charge and this is in spite of the fact that some notable political personalities have been absent from their constituencies for awhile now, ostensibly for security reasons. Thus Asfandyar Wali is accused of spending more time in Dubai than in his province where suicide bombers hold sway while the Rabita Committee of the MQM has yet to confirm that Karachi is safe for their leader to return.
There is tangible evidence to suggest that the democratic government is 'seeing' the slums of the poor. And this is as evident from the Benazir Income Support Programme (BISP) as it is from the flawed sasti roti scheme to the green tractor scheme. What is significant is that the need to target subsidy has now been accepted by politicians of all political parties. The BISP was launched amid much fanfare but was soon subjected to public censure as claims that the cards were being issued to supporters of the MNA of that area began surfacing. The government was then compelled to undertake a survey by the World Bank designed to enable it to implement BISP irrespective of political affiliations. And this was possible because of World Bank's leverage attributed to the ongoing SBA. The sasti roti scheme, as is acknowledged, failed precisely because it was not targeted to the very poor. However there are numerous allegations of corruption/commission against the green tractor scheme as approval of the company manufacturing the tractor remains suspect.
Be that as it may, these targeted social safety net schemes are a welcome development. However, the political leadership of all major parties in parliament barring none (the majority of who are rich landlords whose income remains exempt) has assets abroad - moveable and immoveable. The extent of these assets are known to Western governments who have publicly censured Pakistani parliamentarians for not taxing themselves and warned that they must not expect the tax payers of their countries to foot the bill. There is therefore a need to tax the assets of politicians as well as their families' resident in foreign countries or those who have assets abroad.
If one dismisses the President's rhetorical harangue as anger against the judiciary and the technocrats and focus on what it really was namely legitimate anger against the non-democratic forces that continue to periodically threaten the PPP government in the centre, one would probably be closer to the mark. However, the President's strategy to deal with such periodic threats remains the same: initial defiance followed by capitulation. His most recent public speech must be seen as initial defiance and if the establishment does not back off then one would witness capitulation on some other issue that is important from the perspective of the establishment.
However, given that the country's foreign policy and about 35 percent of the budget is in the hands of the establishment and given that the government has accepted a hands-off policy in the war on terror, as well as Balochistan, it is rather difficult to identify if there are any remaining powers that are still coveted by the establishment. The President's plus point remains the same however: the establishment is unlikely to get a more pliant president through the democratic process which is considered as critical for continued critical monetary support from abroad.
But with the continued mishandling of the economy that is raising inflationary pressures, declining employment opportunities and indeed the continuing energy shortages third year running, side by side with mega-scams, implicating senior members of the government including the Prime Minister's family, it is perhaps the public that would provide the impetus to non-democratic forces to unseat the current dispensation. The President must accept this and focus on issues close to the heart of the people.