Dawn Editorials (with Summary and Vocabulary)

DAWN EDITORIALS

January 11, 2024 (Thursday)

Day’s Vocabulary

• Dementia.  a condition characterized by progressive or persistent loss of intellectual functioning, especially with impairment of memory and abstract thinking, and often with personality change, resulting from organic disease of the brain.
• Insolvency.           the state of being insolvent; inability to pay one's debts.
• Buffeted.    (especially of wind or waves) strike repeatedly and violently; batter
• Squall.         a sudden violent gust of wind or a localized storm, especially one bringing rain, snow, or sleet.
• Apogee.       the highest point in the development of something; a climax or culmination
• Chagrin.     distress or embarrassment at having failed or been humiliated
• Moulders.  slowly decay or disintegrate, especially because of neglect
• Kudos.         praise and honor received for an achievement
• Hearth.        the floor of a fireplace
• Incumbent.           necessary for (someone) as a duty or responsibility
• Affinity.      a spontaneous or natural liking or sympathy for someone or something
• Nemesis.    a long-standing rival; an archenemy
• Wring.         squeeze and twist (something) to force liquid from it
• Receded.     go or move back or further away from a previous position
• Tapering.   becoming thinner or narrower towards one end
• Constrain. compel or force (someone) to follow a particular course of action
• Stunted.      having been prevented from growing or developing properly
• Pipe dream.          an unattainable or fanciful hope or plan
• Rendering.            cause to be or become; make
• Impasse.    a situation in which no progress is possible, especially because of disagreement; a deadlock
• Boom and bust.  a situation in which a period of great prosperity or rapid economic growth is abruptly followed by one of economic decline
• Cascading. (of water) pour downward rapidly and in large quantities
• Mooring.    a place where a boat or ship is moored
• Abated.        (of something perceived as hostile, threatening, or negative) become less intense or widespread
• Rampant.   (especially of something unwelcome or unpleasant) flourishing or spreading unchecked
• Stimulus.   a thing or event that evokes a specific functional reaction in an organ or tissue
• Plateauing.           reach a state of little or no change after a time of activity or progress
• Protracted.            lasting for a long time or longer than expected or usual
• Hobbled.     walk in an awkward way, typically because of pain from an injury
• Edutainment.      entertainment, especially video games, with an educational aspect

The last Pakistani

Summary

• Mani Shankar Aiyar, an Indian author and politician, has written a new book about his time serving as Rajiv Gandhi's advisor and his admiration for the former Indian Prime Minister.
• Aiyar argues that Rajiv Gandhi was India's most misunderstood Prime Minister and highlights his achievements in domestic policy, foreign policy, and panchayat raj (village-level self-governance).
• He describes Rajiv Gandhi's visit to Pakistan in 1989 as a "high point" and shares the moving speech he drafted for the occasion, emphasizing the natural affinities between the Indian and Pakistani people.
• Aiyar expresses his disappointment with the current state of India-Pakistan relations and blames Prime Minister Modi and the BJP for the tensions.
• Despite his optimism, he acknowledges that his dream of an uninterrupted India-Pakistan relationship may remain unfulfilled, especially as long as Modi remains in power.
• Aiyar's personal connection to Pakistan, with his birthplace being Lahore, adds another layer to his perspective on the complex relationship between the two countries.

Article

Mani Shankar Aiyar is the last Pakistani left in India. It is his ‘second favourite country’. It was once an option available to millions of Indian Muslims. Since 1947, Indian Muslims have witnessed with disappointment Pakistan’s descent into democratic dementia and irresponsible insolvency. They would prefer (like the Buddhists in medieval times) to quit the subcontinent and migrate to more hospitable shores.

Two periods in Mani’s long life (he is 83 years old) have conditioned his personality, his career, and his literary output. The first was the stint he spent as India’s consul general in Karachi (1978-82). It provided a seemingly bottomless reservoir of material which he has used in various books. His Memoirs of a Maverick: The First Fifty Years (1941-1991) — was released last year.

He intended his next book to be an autobiographical sequel. His publisher, though, felt it was dominated by the second Him­alaya in his life — the late prime minister Rajiv Gandhi. They suggested a biography of Rajiv instead. Hence, Mani’s fresh book The Rajiv I Knew And Why He Was India’s Most Misunderstood Prime Minister (2024).

Ever since 1992, when Mani wrote his affectionate memoir Remembering Rajiv within a year of Rajiv’s assassination, Mani has been more loyal to the memory of Rajiv Gandhi than Rajiv’s widow Sonia and her Congress party have been to him.

Mani regards Rajiv’s visit to Benazir as a high point.

The book opens with a chapter on Rajiv’s domestic successes: The accords with Punjab, Assam, Mizoram, and Darjeeling. The second discusses the internal controversies that plagued Rajiv’s political career: the Shah Bano case, the communal Pandora’s box of Babri Masjid, Operation Brasstacks, IPKF, and the Bofors imbroglio.

Most leaders prefer to cruise in international waters than to be buffeted by domestic squalls. Rajiv was no exception. In the third chapter on Rajiv’s foreign policy initiatives, Mani lauds Rajiv’s efforts on nuclear disarmament, improving relations with China and Pakistan, Indian intervention in the Mal­di­v­­es in 1988, and the establishment of the AF­­R­­­­­ICA Fund in 1986. Mani provided Rajiv with the catchy acronym: ‘Act­ion For Resis­t­ing Invasion [in Mozambique], Colonialism [in Namibia], and Apartheid [in South Africa]’.

The fourth chapter — Innovative Domes­tic Initiatives — is a checklist of Rajiv’s rad­ial interest in technology missions, Zonal Cultural Centres and Apna Utsavs, Island Development Authority, drought-proofing and the economy.

The concluding fifth chapter is on the Panchayat(i) Raj initiative. Mani’s untiring efforts as India’s first ever cabinet minister for panchayat raj and as chairman of the Expert Committee on the Panchayats (2011-13) reached its apogee when the committee produced a five-volume report. He dubs it ‘an Encyclopaedia Panchayatica.’ To Mani’s chagrin, that report now “moulders in forgotten cupboards”, ignored by Modi’s government.

Mani tried to bring the panchayats centre stage. Instead, in 2013, Mani was eased off-stage by Congress president Sonia Gandhi.

To Pakistanis, Mani’s comments about Pa­­­­kistan will be of primary interest. He de­­als openly with Operation Brasstacks, lau­n­ched with Rajiv’s approval and conducted in 1986/7.

That provocative operation — “bigger than any Nato exercise — and the biggest since World War II” — took place on “the vicinity of the Pakistan border, involving half a million troops — half the Indian Army within a hundred miles of Pakistani territory — and the deployment of Indian naval forces for an amphibious naval trial assault in the Korangi creek that led from the sea to Pakistan’s commercial capital, Karachi”.

On January 28, 1987, President Ziaul Haq retaliated smokelessly by allowing Dr A.Q. Khan to reveal to the Ind­ian journ­alist Kuldip Nayar that Pakistan had gone nuclear. Na­­yar (hoping to earn more than kudos for this explosive disclosure) deliberately withheld publication of this till March 1, by which time confrontation had cooled to consultation.

Despite the flip-flop cordiality between Rajiv and Ziaul Haq (they met at least six times), Mani regards Rajiv’s ‘landmark’ visit to the newly elected Benazir Bhutto in July 1989 as ‘the high point’ of his years in Rajiv’s PMO. Mani drafted Rajiv’s moving speech: “Why must we go abroad to meet each other? Why can we not meet in each other’s hearths and homes? It is incumbent on us to give joyful expression to the natural affinities that bind our peoples.”

Mani’s recollection of that speech bulges with pride: “It was the distilled essence of all I had learned of Pakistan and Pakistanis in my three years in Karachi. And here it was pouring forth from the mouth of the prime minister!”

Despite Mani’s unquenchable optimism, his dream of “an uninterrupted, uninterru­p­­tible” relationship between India and Pa­­­kistan will remain unfulfilled. Certainly, as long as his nemesis PM Modi and the BJP co­­­ntinue to rule India. That could go on un­­til 2039, when Mani will be all of 97 years old.

Mani’s janambhumi is Lahore, in Pakistan — both magnets he finds impossible to resist.

Inflation and devaluation

Summary

• Pakistan has been experiencing high inflation for over a year.
• Inflation in December 2023 was 29.7% higher than December 2022.
• There are some signs that inflation may be starting to come down.
• The main cause of inflation is the government's budget deficit.
• The government has been printing more money to finance the deficit.
• This has led to more money chasing the same amount of goods, which has driven up prices.
• The central bank has been raising interest rates to try to contain inflation.
• This has been successful in reducing borrowing by the private sector.
• However, the government has continued to borrow, which has kept inflation high.
• Pakistan needs to reduce the budget deficit and increase productivity to reduce inflation and achieve economic growth.
• The government should also keep a flexible, market-driven exchange rate.

Article

In December 2023, consumer prices were 29.7 per cent higher compared to December a year earlier. Worse still, every month for more than a year our year-on-year inflation number has been above 20pc.

There was however positive news in the recent inflation data too. Prices in December rose by only 0.8pc over November, which was the second smallest monthly increase in a year.

And just like November 2023, the increase in prices was only due to the increased cost of gas and electricity — in fact, food prices declined in December. The tight monetary policy being pursued by SBP has finally been able to wring the juice out of our economy and we are going to see inflation and interest rates come down.

But why does Pakistan have such persistently high inflation when inflation never went so high globally and has receded for months?

To understand, let’s think of a simple economy with three sellers each selling a food packet and three buyers each given Rs100 by the government. It stands to reason that packets would sell for Rs100 each. Now if the price of these food packets abroad is one dollar, we will have an exchange rate of one dollar being equal to Rs100.

If the government had given each consumer Rs200 and we still had three food packets available, then the price for each food packet would have been Rs200. Again, since the international price of a food packet is one dollar, the rupee would have depreciated by 100pc and the new exchange parity would have been Rs200 to a dollar.

To reduce inflation we must reduce the budget deficit.

The only thing that changed in this economy was twice as much money chasing the same amount of goods, therefore doubling the price and depreciating the rupee. This is our difficulty. In the last few years, as our budget deficit has ballooned, to pay for the deficit we have printed more and more money and as more rupees are chasing the same amount of goods, we have experienced persistently high inflation and rapid devaluation.

In five-and-a-half years since the start of fiscal year 2018, our money supply has increased by over 100pc, with the fastest increase coming in the six-monthly period between January and June of last year, with February to May showing the four highest monthly inflation numbers in our history. Since then the rapid growth in money supply has declined and we are witnessing inflation tapering down.

The two main ways money supply increases are when the private sector borrows from banks or when the government borrows to finance its budget deficit. Since our private sector borrowing is decreasing, this means the money supply is increasing primarily to finance the budget deficit. This has caused inflation; it is to contain this inflation that SBP has been raising interest rates.

Some argue that this model doesn’t apply to Pakistan or that ours is a “cost-push” inflation and hence the SBP shouldn’t have raised interest rates. However, if interest rates are much below inflation, people will not save and borrow just to park money in land, gold or foreign currency. Central banks raise interest rates to constrain aggregate demand and borrowing. This the SBP has successfully done in the case of our private sector.

But unfortunately our government, in the face of higher interest rates leading to higher debt service payments, has not been able to cut the deficit. Instead it has borrowed more, causing the money supply to increase. This has led to the persistence of our inflation.

In our simple economy with three consumers and three food packets, we saw that when money doubled, so did prices. But if the number of food packets had also doubled when the money supply doubled, prices wouldn’t have increased. This means that if our economy had been able to increase the output of goods and services as money supply rose, we wouldn’t have seen inflation.

Pakistan is not unique in running a budget deficit or increasing money supply. But we stand out in our almost total failure to use our government spending to increase worker productivity or the economy’s productive capacity.

Economists argue that national income (or output) grows when labour or capital grows or primarily when there is technical progress — ie increases in education, skills and technological know-how. But this has never been a priority for us. In a country where 58pc of kids under five are either stunted or wasted and where 78pc of 10-year-old kids cannot properly read, such improvement in productivity remains a pipe dream.

So the anaemic economic growth we have had over the last two decades is due primarily to the increase in our labour force and a little increase in capital and not because of any improvement in skills or knowledge.

Going back to our simple economy one last time, with food packets each priced at Rs200 and the international price of food packets being one dollar, each dollar should be for Rs200. Now, if our government decides to sell dollars for Rs150, it would mean that no food packet could be exported from Pakistan and traders would turn to importing food packets.

This has happened to Pakistan too, when various governments, to keep current prices low and voters happy, sacrificed exports and manufacturing and gave rise to huge current account deficits. (This is not to say that we should not stop smuggling or hawala. But SBP should not be selling dollars in the interbank market to keep the rupee at some predetermined value).

There are no magic solutions to our economic problems. We are a poor and uneducated country and will remain poor until we remain uneducated. However, to reduce inflation we must reduce the budget deficit. At the same time to achieve growth, we must invest in our people and increase their productivity and the country’s productive capacity. Finally, it is important to keep a flexible, market-driven exchange rate so our exports can increase.

Deviations from rational economic policymaking will perhaps get us short-term relief, but as has always been the case, it will cause long-term damage.

Reassembling Pakistan

Summary

• Pakistan needs to focus on "reassembling" itself before it can "reimagine" itself.
• The country has been in a state of political and economic turmoil since 2017.
• This turmoil has been caused by a lack of policy coherence and erratic decision-making.
• The consequences of this turmoil have been high inflation and a large trade deficit.
• Pakistan needs a government with a strong mandate to restore policy coherence and economic stability.

Article

Much has been said about “reimagining Pakistan” but it is important to understand that task comes the day after. For now, the focus needs to be on “reassembling Pakistan”.

This task should not be underestimated. Those who think they can pull this off on their own are deeply mistaken. And the country is just emerging from the mistaken misadventures of those who think the country is a toy made of Lego and can be disassembled and reassembled in whatever shape they fancy, to pursue whatever goals their minds are seized with at that moment in time. It would be bad for the country to exit one such mistaken misadventure only to enter another.

A proper rendering of accounts is necessary to understand how and why the country has been brought to the present impasse. The story does not have a single starting point, but a number of turning points are important to note.

The first turning point is the arrival into power of the PML-N government in 2013. The period of Nawaz’s rule was marked by the kickstarting of growth on the one hand. But it also saw the emergence of massive deficits that the government financed by expensive borrowing. Debt skyrocketed in those years and has remained elevated ever since.

It would be bad for the country to exit one misadventure only to enter another.

The next turning point was 2017. The whole operation to tear down Nawaz Sharif as prime minister left decision-making in the country severely fractured. Given the growing deficits and rising debt burden, the country could not afford to have its executive decision-making splintered. It can be argued that Pakistan has been run by interim governments ever since 2017.

One critical element in executive decision-making at the policy level is some sort of coherence. If a government is spending heavily, it must balance this out with revenue measures to ensure debt levels don’t blow past sustainable levels, for example. Or if the government is trying to manage the exchange rate, it needs to ensure that the requisite amount of foreign exchange reserves is available to do this.

The list goes on and on, but the point to note is that policy coherence comes when there is somebody at the top who has the birds-eye view and is taking stock of how decisions made in one area impact other areas.

Pakistan is not famous for its policy coherence. This is one reason why the country keeps going round in boom and bust cycles. But what happened after 2017 is whatever minimal levels of policy coherence there might have been were also blown. The result was erratic decision-making.

The consequences of this landed in the price level. This is what always happens when policy coherence is lost. Ultimately the consequences come cascading in the form of inflation. There is a good reason why this happens. With the loss of policy coherence come all manner of demands upon the executive, and a weak and embattled prime minister is in no position to turn down these demands. The result is runaway spending, mounting fiscal pressure, and eventually the large-scale printing of money.

This is what has always happened in our country when whatever little policy coherence there is under normal times is lost. One such episode was in the year 2007 till late 2008, as the Musharraf regime lost its moorings and became embroiled in an escalating contest of survival. The printing presses had begun to roll much earlier, but from October 2007 they went into high gear till the signing of the IMF programme a year later. The result was the highest inflation on record, which stayed elevated for a number of years.

The next round when policy coherence (or whatever little there was) crumbled altogether was in late 2012, leading up to the election in 2013. Once again, the printing presses were fired up and spending went out of all control. This time the consequences were not felt in the form of inflation because the government managed to keep the exchange rate steady and fuel prices began coming off their record highs in global markets. Instead, the consequences came in the form of a runaway trade deficit, which was financed with borrowing. This is why external borrowing skyrocketed from 2013 onward.

What is different this time is that the loss of policy coherence that set in after 2017 has not abated, despite the passage of more than six years. There was a brief period of respite, running from May 2019 till about March of 2020, when a very strict IMF programme was under implementation, that one could see some sort of policy coherence in the country.

But other than those months, we have had nothing but rampant ad-hoc decisions, no centre of decision-making anywhere in the country and spending priorities that it seemed were being made on the spot.

The result, once again, was runaway money printing, the largest and longest episode of printing that our economy has ever seen. It began in early 2017, and by May 2019 money printed and pumped into the economy constituted half of total money supply, the largest proportion it had ever been until then. From the summer of 2020, it began one more time, but their nature changed.

Instead of direct government borrowing from the State Bank, they flushed the economy with cheap liquidity via sharp interest rate cuts and refinance facilities, whose monetary impact the State Bank itself proudly claimed was five per cent of GDP, probably the single largest monetary stimulus ever given to the economy.

The result is there once again. Inflation remained elevated through 2019, but since 2021 it has been a blowout of historic proportions. So far this is plateauing out, but for the country to emerge from this nightmare, the return of policy coherence for a protracted period is a must.

And that can only happen under a government that is not hobbled by legitimacy concerns. It is critical that Pakistan gets such a government in the months ahead.

Championing SDGs

Summary

• Pakistan was the first country to adopt the UN's Sustainable Development Goals (SDGs) at the country level.
• Despite this early adoption, implementation of the SDGs in Pakistan has been slow.
• One reason for this slow implementation is a lack of awareness of the SDGs among the general public and even some sectors of the business community.
• The author suggests several steps to improve SDG implementation in Pakistan, including:
• Translating the SDGs into local languages
• Developing educational materials about the SDGs
• Using government reconstruction projects as an opportunity to showcase the SDGs
• Establishing SDG forums at the district level to bring together stakeholders
• The author believes that by taking these steps, Pakistan can make significant progress in achieving the SDGs.

Article

Pakistan is one of the countries which adopted the United Nations’ 17 Sustainable Development Goals (SDGs) 2030 — also called ‘global goals’ — in order to attain lasting development, peace, and prosperity for its people. It is a matter of much pride that Pakistan was the first country to adopt the SDGs at the country level when it officially passed a parliamentary resolution to this effect in 2016. The Ministry of Planning, Development and Special Initiatives has since established SDG Support Units through provincial planning and development departments to provide guidance on their implementation and track the progress made.

Implementing the SDGs in spirit promises to end poverty and inequality, ensure the protection of the Earth, and ensure that all people on this planet have access to the enjoyment of health, justice, and prosperity. Pakistan has spent eight years engaging with the SDGs and streamlining and localising them. But though it was proactive in adopting the SDGs, their implementation could be better. One wonders how many people know about the SDGs in, for example, Sindh’s Tharparkar and coastal belt. How many SDG-driven schools have been operationalised? How many children at Sindh’s high schools and colleges know about the SDGs? How many introductory sessions have been organised at schools and colleges in Hyderabad?

In mid-2023, I moved to Mithi, Tharparkar, where I asked a member of a local business association about the SDGs. Puzzled, he asked, “What is an SDG?” The reply made me think that if the business community in Sindh was not aware of the SDGs, how could the SDGs be localised and streamlined? An honest, meaningful commitment to achieving SDGs entails localising them on the ground level. The business community, academia, health sector, food entities, builders, exploration and production companies, universities, development sector, transportation sector, and parliamentarians all need to educate themselves on SDGs and think about what practical initiatives they can take in this regard.

A much-needed step in streamlining and localising the SDGs is to translate them into local languages. For example, in Sindh, these languages would include Sindhi, Urdu, Marwari, Brahvi and Dhatki. In Tharparkar (as well as a large portion of the areas that comprise the Mirpurkhas division), Dhatki is the most common language spoken locally. Access to a Dhatki version of the SDGs would greatly help the locals as they go about planning their future business and non-business activities.

Translating the SDGs into local languages can help in their adoption.

There is a pressing need for the Sindh Education and Literacy Department, in consultation with the Sindh SDG Support Unit, to develop an object-oriented edutainment booklet that can help make students and teachers aware of the SDGs and their practical applications in real-world scenarios. A weekly session on SDGs and what possible ideas can be drawn from SDGs should be discussed, evaluated, and projected.

If one is to think opportunistically, the Sindh government is currently reconstructing the flood-damaged houses of those affected by the 2022 monsoon in different districts, including Mirpurkhas, Badin, Sanghar, and Tando Mohammad Khan, through a dedicated entity called Sindh People’s Housing for Flood Affectees (SPHF). There is a unique opportunity to turn this reconstruction project into a showcase for SDG localisation. If the houses and their attached communities can be used to demonstrate the benefits of the 17 SDGs, this will facilitate others’ understanding of what the SDGs could look like at the rural level. It will encourage local children to ask their teachers and elders questions about their importance. Word will spread by mouth, opening new avenues for sustainable development and good governance in the country’s vast rural areas.

To implement the SDGs effectively, governments at all levels need to understand their importance in their provinces’ everyday affairs. All policies need to be consciously driven by at least one of the 17 SDGs in alignment with each government’s administrative targets. This will ensure that governments will remain dedicated to streamlining the SDGs into their development agenda.

It is also imperative that an SDG forum be established by provincial governments at the district level. This forum could invite researchers, economists, engineers, NGOs, teachers, university faculty, representatives of the business community, chambers of commerce and industry, and the youth to contribute to the implementation of SDGs at the district level. Informed input and novel ideas will open up innovative mechanisms to achieve global goals by ‘acting locally and impacting globally’.