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Pakistan: At a critical juncture

Kuldip Nayar

THE PAKISTAN Foreign Minister, Mr. Abdul Sattar, admits that his country's economy has not improved in the six-month rule of the General Pervez Musharraf government. ``All that we have done is to stop the graph from falling further,'' he said, in a conve rsation with this writer at Islamabad early this week, adding: ``Our rating has also gone up a notch and the Karachi Stock Exchange is a bit more buoyant than before.''

This may well be true. But it does not in any way make the economy better than it was when the former Prime Minister, Mr. Nawaz Sharif, was removed from power on October 12 last year. Pakistan's main problem is the stranglehold of its elite group, which accounts for less than one per cent of population.

The dictatorial regimes of Ayub Khan, Zia-ul-Haq and, now, Gen. Musharraf have not changed the configuration. Nor have the socialist-inclined regimes of Zulfikar Ali Bhutto and his daughter, Ms. Benazir Bhutto, and the conservative rule of Mr. Nawaz Shar if. The faces have changed from time to time but those who sustain their hold have stayed in power. The country has paid a heavy price. The masses labour harder than ever before and there is a general decay in institutions.

The crisis Pakistan's present rulers face is that of debt, foreign and domestic, apart from the Defence expenditure, which is unavoidable. According to one estimate, the country needs $5.2 billions annually to service its creditors. It can provide only $ 2.75 billions from its own resources. It has been able to avert the crisis by getting its foreign debts rescheduled. It has no alternative but to go over the same exercise all over again.

Since the International Monetary Fund (IMF) is Pakistan's guide _ this is not an unmixed blessing _ the rescheduling of debts is not much of a problem. But the country cannot go on postponing the repayment. It has to find ways to earn foreign exchange.

At one time, the remittances, which were like a torrent, took care of most foreign exchange needs. The flow got reduced in the last few years. Now it is only a few drops. The much-sought-after foreign investment is not forthcoming. Last year, it was only $34.6 millions, the lowest since 1990-91. ``When our own people feel diffident to invest, how can you expect outsiders to do so?'' is the question posed by a newspaper editor in Lahore.

Exports have hit a new low. India's reluctance to buy cotton, a bumper crop in Pakistan this year, has added to Islamabad's difficulties. Bangladesh has picked up some cotton, but a large quantity still awaits customers.

It is to the credit of the military-led government that it does not try to dilute the economic situation. ``Pakistan is at present passing through a critical period, facing internal and external challenges,'' says Mr. Sattar. But the military junta blame s the two earlier civilian governments _ those of Benazir Bhutto and Nawaz Sharif. ``They have looted the country,'' says Mr. Sattar, ``and kept millions of dollars abroad.''

He cites the example of how the Sharif family paid the pound sterling equivalent of Rs. 100 crores when a Saudi Arabia-based bank won a case against it in a London court, over a loan it had taken to buy residential flats in Park Lane.

Mr. Nawaz Sharif's wife does not completely deny the charge. But she says: ``The two or three (she does not remember the number) flats are not worth even a million pounds. We had taken them on a 10-year lease from an American, who gave them to us at a th rowaway price.'' It is estimated that the Sharif family has siphoned off more than $70 millions. But the authorities are probing.

Military sources say the Army has collected fresh information on Mr. Sharif's foreign bank accounts and assets. The National Accountability Bureau (NAB) is investigating more than 30 cases against him which are likely to be filed soon in the accountabili ty courts.

The fact that the government is pursuing the instances of corruption against Ms. Benazir Bhutto, Mr. Nawaz Sharif and 24 other big families is flaunted by many Pakistanis. They say that India, with all its institutions intact and independent judiciary, h as failed to take any action against the top people involved in such scams as the hawala racket. ``Our NAB is not going to let either Mr. Sharif or Ms. Benazir Bhutto go scot-free.''

No doubt, some big families are being arraigned but corruption, as such, has not lessened. The administration is full of it. People allege that the conditions prevailing in the armed forces are no better. Cases against some top military officers are said to have been hushed up. Indeed, it is strange that all the action taken so far has been against civilians.

None from the military personnel _ the top among them have cornered the best plots of land in Lahore _ has been touched. The Pakistanis say in hushed tones that the military can never dare to move against its own dishonest people. ``We are the second mos t corrupt nation in the world,'' says Mr. Sattar. But he is silent on dishonest deals in the purchase of arms.

Whether or not the initiative by the Defence Minister, Mr. George Fernandes, to ask the Central Vigilance Commission to go into all Defence deals in the last decade results in punitive action does not bother the Pakistanis. But they applaud Mr. Fernandes ' initiative. Of course, what really impresses them is the prevalence of democracy since Independence. Pakistan has had only a decade of democratic rule.