http://www.awaztoday.com/playshow/19782/Islamabad-Tonight–8th-February-2012.aspx
http://www.zemtv.com/2012/02/08/islamabad-tonight-8th-february-2012/
http://www.friendskorner.com/forum/f247/video-islamabad-tonight-nadeem-malik-8th-february-2012-a-263481/
http://www.pakistanherald.com/Program/Islamabad-Tonight-February-08-2012-Nadeem-Malik-9630

ISLAMABAD TONIGHT

WITH NADEEM MALIK

08-02-2012

TOPIC- ECONOMIC AND POLITICAL SITUATION

GUESTS- FAISAL SALEH HAYYAT

FAISAL SALEH HAYYAT OF PML-Q was the only guest on the show he said that accepting every demand of IMF can bring chaos in the country. He said that we can not live with out IMF we need it. He said that the government is giving subsidy on electricity but billions of rupees bills are not recovered.

He said that PML-N wants to exploit on twentieth amendment for maximum political gain. He said that he wants health and education departments back to federal government by the virtue of twentieth amendment. He said that the devolution of health department is proved very harmful and Punjab is its worst example. He said that if we talk about unity in the country then there should be one syllabus in the whole of the country.

He said that to have consensus in Pakistan on some issue is almost impossible. He said that the election commissioner should be neutral but PML-N wants every thing of their will.

He said that he does not see next elections before May 2013. He said that Peoples Party and its allies are not in the favour of the elections before May 2013. He said that they are elected for five years and will complete their turn. He said that Peoples Party and PML-Q will get majority in the senate elections as coalition partners.

He said that PML-Q will have seat to seat adjustment with Peoples Party in the next elections but their options are open. He said that PTI has come forward as a strong political power. He said that Imran Khan is showing political maturity now. He said that PTI has done political harm to PML-N at the most.

He said that those days are over when political parties used to take huge majority. He said that in the future only coalition governments will be formed. He said that the regional parties will also have their share in the next elections. He said that if his party could not deliver situation can be difficult for his party too.

He said that he reimbursed 12 billion rupees of the nation in rental power projects. He said that he not only put the blame for corruption but also went to a forum to prove it. He said that SC has reached a verdict on rental power projects and can deliver it any time. He said that PM fixed the price of 50 rupees per unit of his brother in law Zulqarnain rental power project.

He said that in the elections the people are concerned about the issues they are directly affected. He said that the people are directly affected by load shedding and hike of prices. He said that corruption will not be a factor in the next elections because people are not directly affected by it.

–

Filed under: CURRENT AFFAIRS

Naoyuki Shinohara, IMF deputy managing director (Asahi Shimbun)

The International Monetary Fund said Japan should triple its consumption tax in order to cut the country’s massive public debt.

At 5 percent, Japan’s consumption tax rate is one of the lowest in the world.

Anoop Singh, IMF chief for Asia, said “It has been our sense… that raising the consumption tax gradually, not immediately, beyond 2015 to say 15 percent, could be more in line with the tax rate in other countries.”

According to a 2010 CIA estimate, Japan’s public debt is 197.5 percent of the GDP–second only to fiscally irresponsible Zimbabwe. According to an IMF estimate, Japan’s public debt is 220 percent of GDP–by far the highest in the world.

Singh said: “In some way (increasing) the consumption tax is the most appealing measure to take. It is more growth-friendly and less distortive than other options.

“That, along with other reforms in social security and other spending, as a package, would then bring the debt ratio down.”

Since the collapse of the bubble economy in 1990, Tokyo has barely kept the economy afloat through massive pork-barrel spending–namely white elephant public works projects consisting of pouring concrete all over the country.

Prime Minister Yoshihiko Noda, a fiscal conservative, has already proposed doubling the tax to 10 percent, but has predictably encountered formidable public and political opposition.

Naoyuki Shinohara, IMF deputy managing director, praised Noda’s decision to raise the consumption tax, but said 10 percent won’t be enough.

“While the IMF welcomes the proposal, there will come a need for an even further increase in the future,” Shinohara said in an interview with the Asahi Shimbun.

One thing should be clear: paving over the entire country in the name of creating jobs is no longer a viable economic strategy.

Economy in the Red: 4-Year Performance

Real Economic Performance: The SBP’s foreign exchange reserves have declined by about $2 billion in the last six months. A deterioration in the current account balance due to lower cotton/textile prices and a sharp slowdown in remittances growth, continued difficulties in attracting external financing, and the beginning of repayments to the IMF will likely put further pressure on the balance of pa…yments this year, with reserves projected at $12.1 billion by end 2011/12.
In the absence of corrective measures, the fiscal deficit is likely to reach 7 percent of GDP, much higher than the government’s revised budget target of 4.7 percent. Moreover, there are considerable downside risks to this already difficult baseline, particularly in the context of an increasingly difficult global environment and concerns about policy weakening ahead of senate elections in 2012 and parliamentary elections in 2013.

IMF Directors stressed that monetary and exchange rate policies need to better focus on containing inflation and external risks. Monetary policy is now too accommodative, and should be tightened if inflation or external pressures increase. Central bank financing of the budget needs to be curtailed, and greater operational independence of the central bank needs to be secured. Directors also called for more exchange rate flexibility to facilitate external adjustment and safeguard foreign reserves.

Unemployment is high when underemployment and unpaid employment are taken into account, while poverty incidence and measures of human development are at worrisome levels. Efforts to boost revenue mobilization were once again frustrated by a lack of political support, and the fiscal deficit widened to 6.6 percent of GDP in 2010/11. Monetary policy has become more accommodative, with the SBP directly or indirectly (through liquidity injections via open market operations) financing fiscal deficits. While the economy is recovering from the floods, the external position, until recently a source of strength on booming exports and workers’ remittances, is deteriorating.

Filed under: CURRENT AFFAIRS

The Roosevelt Institute recently celebrated the anniversary of the birth of President Franklin Roosevelt. In this post on the Institute’s website, Senior Fellow David Woolner reviews some of FDR’s accomplishments for a generation that may be more familiar with Facebook than fireside chats. Most of the essay has to do with the domestic economic institutions created during the New Deal but he also notes those international institutions created to preserve the peace of the post-war order under U.S. leadership:

Finally, we should remember that prior to World War II the United States had turned inward and refused to play a leading role in world affairs. Convinced that the Second World War had come about in part from the global economic depravity that helped give rise to fascism in Europe and Asia, FDR used the war as a catalyst for the construction of a new political, strategic, and economic order. It was based in large part on the extension of American moral and military power through the United Nations and the extension of American economic power through the creation of the International Monetary Fund, World Bank, and a new multilateral economic system that would open up the world’s markets and natural resources to freer trade. Taken together, these measures resulted in a permanent restructuring of the world’s social, economic, and strategic makeup. They formed the basis of the new world order that has given rise to the globalization of the world’s economy and the American-led multilateral security system that the United States has played a leading role in since 1945.

As much as I would like to believe, with Woolner, that these institutions still form the basis of a stable world order, it’s clear that time has taken a toll on their legitimacy and credibility. Take the United Nations, for example. Just today, the Security Council failed to pass a resolution on Syria hours after an attack on the city of Hom’s by Assad’s security forces, an attack that some are calling a massacre. U.S. Ambassador Susan Rice voiced “disgust” over the veto by permanent members Russia and China that has derailed any hope of coordinated action to end the violence. The U.S. should be proud of having assembled a broad diplomatic consensus with allies in Europe and the Arab League. In the end, though, it was no match for the veto power wielded by permanent members.

The UN was born in the aftermath of a world war started by dictators and now permanent members of the Security Council are defending a dictator. What would FDR think?

Image Credit: Wikipedia

These last couple weeks I have been watching numerous movies on British politics. Coincidence or calculations? Yesterday night, it was Tinker, Tailor, Sailor, Spy, the night before Page Eight (which by the way is one of my favorite spy movies), tonight most likely the Iron Lady. Prior to this triple hat, I did see the Queen, The Special Relationship, Ghost Writer, the King Speech and the Deal among many others. So I cannot help myself thinking: why has Britain always shape imagination? Is there such thing as a British myth? And, what kind of power will Britain be in the 21st century?

All these movies – and I am missing a lot of them – prove that Britain’s soft power – or the power of attraction as defined by Joseph Nye – is more than ever alive and powerful. British cinema and music, such as Coldplay, are still doing very well and truly influence the artistic world to a certain extent. But has British soft power been an overall success? Not really, British soft power is also progressively eroding with the considerable cuts of the British diplomatic services, one of the most powerful in the world, by almost 20 percent. The Foreign & Commonwealth Office (FCO), diplomatic corps, has seen a reduction of its staff from 4,300 to 3,900, which will affect the influence of Britain in less relevant and strategic regions as well as the gathering of information. Furthermore, many radio programs of the BBC have already been cancelled. These moves will undeniably hurt British soft power in the long run. Looking at the domestic politics of Britain, the economic crisis has been pretty violent and led to the appointment of Mr. Cameron, a conservative, to Downing Street. Mr. Cameron’s job and approach have been to cut public programs in order to lower the overall budget deficit, an obsession among conservatives. The budget cuts have been considerable across the board, even the military did not escape it.

Talking of the military, defender of hard power, critics have claimed that defense budget cuts have been made without a clear overall strategy. Many believe that these defense cuts will affect the type of power Britain will be in the 21st century. Some have argued that the defense cuts of “the annual $58 billion Ministry of Defense budget might have to be cut by almost a quarter.” The Franco-British treaty of 2010 illustrates the new approach of cooperation in the very opaque world of military and defense. A year later, France and Britain sought to protect Libyan civilians from their leader Colonel Qaddafi. Both European military powerhouses knew that without NATO they would not be able to act and sustain their military strategies without the intervention of the US. Even though the mission was described as a success and a possible template for future missions, it did show that France and Britain cannot finance military operations at regional and international scales. Furthermore, these defense cuts have sent a wrong message across the pond. The American fear that it could affect the role of Britain in the Afghan counter-insurgency. Britain is the second largest force in Afghanistan after the US. Former US Secretary of Defense, Mr. Gates, expressed his concerns back in June 2011 about the large defense cuts taking place in Europe and their impacts on the relevance of NATO. Robert Gates declared that “If current trends in the decline of European defense capabilities are not halted and reversed, future U.S. political leaders — those for whom the Cold War was not the formative experience that it was for me — may not consider the return on America’s investment in NATO worth the cost.” Following the cuts, Defense Minister, Liam Fox declared in order to reassure his American counterpart, “We would be able to maintain a moderate deployable force for a considerable length of time, if required,” Mr. Fox added. “Maybe not exactly at the level we have now, but at still a respectable and useful level.” This remains to be seen.

So is Britain a Great Power? I would answer yes and no. No, Britain has never fully recovered from the crisis of 1929. At the time, Britain was a hegemon with overwhelming military, financial and economic power. The famous say “the sun never sets on the British Empire” illustrated the power and influence of the British empire around the globe as well as its exceptional nature. Since then, Britain has remained a very relevant power in the world thanks to its strategic positioning on many issues; historical heritage; membership of the EU and NATO; and its ‘special relationship.’ Multilateral institutions, such as the EU, NATO, the UN, the IMF, G-20, wherein Britain holds powerful seat and/or important shares can allow Britain to remain influential in the high sphere of politics and international security.

However, British power is undeniably declining as illustrated by the domestic turmoil such as the 2011 summer riots, the problem of radicalization among the communities of immigrants, and the erosion of the welfare state. Domestic signs as well as revision of ambition downwards are clear symbol of the decline of British power. The dispute with European counterparts on the protection of the British financial sector, the famous City, which has contributed to maintaining the world status of Britain, is considerable. The shift of power of the financial system will progressively move to Asia and impact the financial power of Britain. Following the election, Mr. Cameron declared in an interview:
What does it mean to be British in the 21st century? This is still a great country. Being British is being part of a successful multi-racial country that has traditional beliefs in liberty, supporting the underdog, and having a role that punches above our weight in the world. All those things still matter. We’re going to have a tough time for a couple of years. We’ll come through it, and we’ll be even stronger.

The decline of a great power of such preeminent power has already started and has had a considerable effect on the moral of the country. Let’s face it, movies will always be around in order to remind us how powerful Britain used to be.

Pakistan is suffering.  It has been suffering in one way or another since its birth in 1947, through poverty and economic uncertainty, political instability, ethnic division, natural disaster, external insecurities and its problematic geo-political position in Asia.  The hope always was that as Pakistan matured as a nation, her suffering would diminish, and the country would prosper, but that is a hope unfulfilled.  Pakistan is still suffering, and it is possible that things will get worse.

The Economy

Ignoring the political unrest, the terrorist bombings, the growing influence of the Taliban, the almost lawless state of the Tribal Areas, and the current difficulties in Pakistan’s relations with the west in general and America in particular, and that is a long list of things to ignore, Pakistan’s immediate problem is her economy.  There is stock market and currency volatility; government has already failed to meet its commitments under the IMF loan programme; it has a deficit that even the government estimates will exceed $17 billion for the current year; and despite government efforts at curbing overspending and improving tax revenues the national debt continues to rise to unimaginable heights.  Any advance in stabilising the deficit situation is being more than wiped out by the increased cost of servicing the existing debt and the estimated 15% increase in spending on the military and anti-terrorist activity.

It is a complex problem, and unlike when as individuals we find ourselves with debts to pay off, there is no simple 0% balance transfer offer available to make life a little easier.  The world is suffering a financial crisis, and Pakistan must largely look to itself to find solutions to its problems.  Undoubtedly, government finances must be brought under control.  Increasing tax revenues through improved collection is the obviously priority, but there is a debate to be had about how and where government spending should be re-balanced if Pakistan is to have a more prosperous future.

Inside and Outside Money

The country’s chief resource is its people.  Pakistanis are industrious, but they have been starved of the investment by the preference of the nation’s banks to loan to government rather than business, and by the reluctance of outside investors to put money into the country.  Hopefully the banks are now beginning to realise that without a thriving economy, and the taxes that generates, loans to government are not the risk free option they once believed them to be, and so it is in their own interest to properly support enterprise in the industrial and commercial sectors of the economy.  Outside investment is more problematic.

Foreign investors have been increasingly unwilling to put money into what they see as an unstable country, and despite the huge Pakistani Diaspora, the country has failed to take full advantage of the international opportunities this offers, and has instead largely thought in terms of the remittances sent back by migrant labour.  The solution it seems has been to try and impose stability by military force, but this has not worked, and indeed has been counter productive in terms of the headlines it produces in the foreign media.  Whilst it is important that acts of terrorism be dealt with firmly, the long term solution to Pakistan’s problems cannot lie in ever increasing military spending.

The ABC of Prosperity

To create the stability that the country needs, it is important that Pakistan invests in the future, and that means education.  Education will help provide the ladder out of poverty that many need, and will also ensure that young people learn to reason for themselves.  It is ignorance and the lack of opportunity that leads many to accept the message being delivered by more radical elements.  Such zealots are devoted to their own dogma, and offer only a very blinkered vision of how society should be.  They do not have the welfare of the nation at heart.  Nominally, the country’s economy is the 47^th largest in the world, but 27^th in terms of spending power, yet in terms of education spending Pakistan is ranked only 126^th by the UN Human Development Programme, and a recent UNESCO report highlighted the fact that the literacy rate in the population is only 48% overall, and much worse for girls, based on the Education Ministry’s own figures.  This cannot continue.

The Best Defence

Historically, the chief threat to the country’s security has come from India, but now of course there is also the threat from internal terrorism to be taken account of.  In 2011, the UK allocated in the region of 7% to its budget to its military.  Pakistan’s military spending is largely cloaked in secrecy, but is estimated to be in the region of $5 billion this year, which approximates to around 16% of the state’s budget, and despite the geo-political differences, that figure is unsustainable, and could prove money ill spent.  If Pakistan is to overcome its economic difficulties, and ultimately its social and political ones too, it is perhaps time to re-examine government spending in favour of those activities that will produce long term results.  Strong defences are of course necessary for any country, but sometimes the best defence is not that provided by the gun, but the word, and the word is education.

http://www.campeche.com.mx/noticias/nacional/pan-y-pri-marcan-ruta-del-2012/6942

Mexico’s presidential election, to be held July 1, looks like a foregone conclusion. President Felipe Calderón’s right-wing National Action Party (PAN) has fallen far out of favor due to Mexico’s terrible drug violence. In the past 5 years, the drug wars have killed over 45,000 people. The Northern border city of Ciudad Juarez had 300 murders in 2007; in 2010, the figure was 3,622, giving this place the highest murder rate in the world. As Mr. Calderón’s critics like to point out, Juarez’s murder rate is higher than anywhere in Iraq or Afghanistan. With the PAN’s national security policy in disarray, Enrique Peña Nieto of the rival Institutional Revolutionary Party (PRI) led a recent presidential poll by 25%. Seeing these numbers reminds me of last time around in 2005, when President Calderón and the PAN trailed but went on to win the election, and wondering if the upcoming result will be as everyone expects.[1][2]

Is it truly unthinkable that the PAN could win again? Polling evidence says it is indeed unthinkable. Mitofksy’s November 2011 poll of voter preferences gave 44.6% to Peña Nieto (EPN), 19.7% to the PAN’s Josefina Vázquez Mota (JVM), and 16.1% to Andres Manuel López Obrador of the left-wing Party of the Democratic Revolution (PRD). PAN optimists observe that at the same point before the 2006 election, Mr. Calderón was third place in the polls before coming back to win. The difference is that the PAN’s current deficit is much higher at 25%, versus the 5% deficit Mr. Calderón faced in November 2005. However, not all commentators agree that a PRI victory is inevitable. I will discuss three reasons the PAN has a shot: EPN’s recent campaign gaffes, Mexico’s growing economy, and the Vázquez Mota factor.

Enrique Peña Nieto, the PRI’s man in 2012, is photogenic, well-known, and liked. At age 45, he has already served 6 years as Governor of Mexico State, the country’s most populous. While his image is attractive, some are questioning his ability to relate to ordinary Mexicans. At the 2011 Guadalajara International Book Fair, EPN was asked to name three books that had influenced his life. He struggled with the answer in an awkward speech eerily similar to Sarah Palin’s inability to name her own preferred newspapers.[3] In another gaffe, EPN was unable to state the price of the tortilla, a staple food in Mexico. EPN explained that he was not “the lady of the house.”[4] While these are hardly political killers, it is unimaginable that the President of Mexico could not know the price of a tortilla. EPN’s party has also suffered from disgrace at the leadership level. On December 2, PRI President Humberto Moreira resigned due to a debt accounting scandal in Coahuila State, where Moreira had been Governor. The PRI led Mexico for 71 years until 2000, and its detractors call it a bastion of corruption. The Moreira scandal provides more ammunition.

Another concrete issue where the PAN can directly challenge the PRI is Mexico’s economic progress. Duncan Wood of the Center for Strategic and International Studies writes “it is undeniable that successive PANista governments have been successful in…preparing the way for long-term prosperity.”[5] According to data from the IMF and government sources, real GDP grew 5.4% in 2010 and about 3.8% in 2011, after falling 6.2% during the 2009 recession. On January 3, the Mexican Government sold $2 billion in 10-year bonds at lowest-ever coupon and yield rates. This means that the bonds pay lower interest rates than past issues, and that investors demanded a very small discount when buying them. There has also been progress on unemployment, which soared up to 6.41% in September 2009, but had declined to 4.97% in November 2011 (Source: INEGI). Inflation will be a challenge due to the recent depreciation of the peso, which declined in value from 11.5 per dollar in May to around 13.7 per dollar currently. However, analysts are confident that the Central Bank has both the reserves and the strategy to stabilize the peso. Mexico is also expected to run a negative trade balance of around $4 billion and a current account deficit of $7 billion for 2011. However, the current account deficit will be easily offset by foreign direct investment, projected at around $20 billion annually for the next couple of years. The PAN can use its record to show that it is best poised to help the economy take next steps. These include liberalizing the labor market, widening the tax base, and incentivizing private companies to invest in state-owned oil producer PEMEX. The latter reform is necessary because PEMEX’s refining capacity has lagged domestic demand, forcing the government to subsidize imported gasoline. This reform is also controversial, as PEMEX’s unionized workers are extremely opposed.

The third factor that should keep EPN up at night is the woman to whom The Economist attributes “a flash in the PAN.” Josefina Vázquez Mota, most recently PAN leader in the Chamber of Deputies, served as Education Minister under President Calderón (2006-2009) and Minister of Social Development under President Fox (2000-2005). She is now in the driver seat to become the PAN’s candidate for the highest office. The popularity of JVM’s party has waned – public opinion of the PAN was 27% favorable and 30% unfavorable in November according to Mitofsky. However, she has solid anti-establishment credentials. As Education Minister she argued with the head of Mexico’s powerful teachers’ union, Elba Esther Gordillo, a political ally of President Calderón. Calderón has also endorsed a competitor, former Finance Minister Ernesto Cordero, to be the PAN’s nominee.[6]

Separation from Calderón has not hurt JVM within the party where 52% of members prefer her to be the nominee as of November, up from 38% in August. She is also making strides with the public at large: in the 3 months from August to November, the percentage of the public that recognizes JVM increased from 56.4% to 67.4%. In the same period her share of preference in a head-to-head contest with EPN and López Obrador (AMLO) increased 3%. JVM’s campaign may have more potential to win supporters through advertising than her competitors, who are both known by over 90% of the public. The PAN’s official primary in February will give her a boost through media exposure. Her key issues, strengthening education quality and the justice system, will be used to accuse the PRI of failing to develop Mexican institutions during the PRI’s long period in power. JVM may be the breath of fresh air the PAN needs, and the PRI should be concerned: its polling lead over the PAN has declined from a gargantuan 42% in November 2010, to a less gargantuan 25% one year later.

No wiggle room left:  State Bank of Pakistan estimates for major FY12 macroeconomic targets are lower than GoP’s budget projections, though it has highlighted avenues of upside, specifically from likelihood of weaker oil prices and continuation of strong remittances. While highlighting the need for taking key fiscal measures – broadening of tax base, improving collection machinery, removing subsidies and restructuring PSEs – State Bank of Pakistan highlights that:

“In the current state of Pakistan’s economy, there is no wiggle room left.”

We believe the statement sums it all up.

State of Pakistan’s estimates underperformance on major economic targets: State Bank of Pakistan‘s expects FY12 growth to range between 3.0-4.0% (budget target: 4.2%), while inflation shall range between 11.5-12.5% (budget target: 12%). SBP expects trade deficit to range between USD15.2 – 16.4bn (budget target: USD12.2), which would push FY12 CAD to 1.5% – 2.5% of GDP (budget target: 0.6%). Fiscal deficit is expected to exceed target and range between 5.5% – 6.5% of GDP.

External sector joins an otherwise unchanged core issues list: 1) Fiscal indiscipline, 2) resulting slippage effects on domestic debt and crowding out of pvt sector, and 3) acute power shortage, being the other three.

Bottom line: While we do not differ with State Bank of Pakistan’s stance that Pakistan’s FY12 FX debt payment risk is not large, our biggest concern emanate from Jun-12 FX reserves balance and estimated debt servicing of USD5.0bn in FY13, where likelihood of FX inflows remain minimal after the suspension of the IMF program. With fiscal side out of order, high inflationary risks, and bleak growth outlook due to precarious energy situation and private investment, we believe that heightened macroeconomic risks warrant attention.

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Is there any taker of Land Reforms any more?By Akhtar Ali(akhtarali1949@gmail.com)Elections are approaching and political parties are preparing their manifestoes. All are unanimous that people got a raw deal both under dictatorship and democracy. Some leaders argue that corruption is the central issue which if solved would automatically improve the lot of the poor. This may be true but only partly .Some argues that more democracy and unthrottled democracy would, in the long run, eliminate poverty, as happened in the West. While this may be true, democratic societies are also doing some soul searching whether democracy has performed efficiently towards maximizing people’s welfare. There are strong anti-capitalist under currents bringing forth movements like Occupy the Stock-Exchanges .Democracy and a corruption free administration would certainly improve the lot of the poor in the long run. More than one-third of Pakistan’s populace is abject poor and the rest are only slightly better except for a tiny minority. The task of ameliorating if not eliminating poverty is too big. Trickling down effect may take too long, a time span that will endanger the integrity and solidarity of this country.What to do. There is worldwide recession. Economy has performed awfully badly for both domestic and international reasons. There is a misplaced even dangerous perception that things work out themselves and that no major initiatives are necessary, as has been the case with most military dictatorships. The entire cushion, unfortunately, has been eaten up. In our region, our adversary has been progressing faster than ever before. Economic disparity between India and Pakistan cannot be sustained for along time and would lead to the same kind of fissure that led to the dissolution of the Soviet system ; disparity and failure in economic and social performance .We will have to apply some direct tools and policy initiatives to improve the lot of the poor. But the government does not have money; it does have resources and the only transferable resource is Land. We will see in this space as to what can be done in this respect.There is a general thinking that the days of Land redistribution or reforms are over. It is outmoded or out of tune with times. Land redistribution leads to fragmentation which results in lower agricultural productivity. And that land redistribution may result in loss of agricultural production because the poor would not have the working capital to buy the inputs. Many religious scholars have also opposed land redistribution arguing that Islam respects private property. It is also true that most of these arguments have roots in the opposition to Communist ideology in the days of Cold war. There are equally convincing arguments to the contrary ;the Land belongs to Allah; private property rights only pertain to the cultivated land ;land gifted by infidel colonialists to their supporters has no moral or religious sanction or support ;hunger and poverty are enemies of Islam and Allah; feeding the hungry is the state’s responsibility in Islam; smaller tracts in Pakistan are more productive than the large tracts ;mechanization is easy, cheap and readily available even to the small farmer in the form of rentals; large tract s of lands leads to feudalism which militates against liberty, freedom and development and conspires with the forces of status-quo and militarism as has been demonstrated by the history of Japan and even here in Pakistan. And the biggest falsehood is that all land has been distributed under previous land reforms and there is nothing more left; all farms ownerships are less than 500 acres. It has been acknowledged that there are hundreds if not thousands of landlords who own tens of thousands of acres of land, violating the existing relevant laws. The biggest argument against the land reform is ; who will bell the cat ? The situation on ground is that the landlords are not prepared to even pay income tax on their huge incomes; and the majority of civil and military elite is feudal. Military middle classes are transformed into landed elites through awards and rewards and many other routes. It is argued that one has to either wait for a near catastrophe of the dimensions of 16th December 1971 and the emergence of a Marde-Khuda. Marde Khuda came in 1971, but he conspired with the feudal and launched an anti-industrialist agenda and even strengthened feudalism. And then several Mard or Namarde Khuda came in the form of military dictatorships who probably had the power and wherewithal l to take some drastic land reforms programme, but acted to the contrary finding ready friends among the land lords. However, short of catastrophe and civil war, and without the Marde-Khuda , there are some solutions that we are going to take up in the following. Among political parties, MQM does have anti-feudal agenda, but lacks a land reform commitment and suffers from narrow geographical support. It is possible that in future a political coalition may emerge that may be ready to act on some kind of land reforms programme and taxing the large agricultural incomes.Agriculture and PovertyAgriculture has a share of 26% in Pakistan’s GDP and employs % of the work-force. The sector has a potential of growing at rate of 5% p.a., as it did in 1960s earlier. Low growth rates in the economy in general and in agriculture has significantly contributed to poverty and unemployment. Poverty in Pakistan, as measured in 2007-08, was at 26%, which should have increased in the wake of floods and the economic crisis, and has reportedly returned to the previous high levels of 33-38 % of 2001-2002. Rural poverty has always been high in Pakistan at 40% plus. A major reason for it has been the landlessness and low employment. A good 10.36 % of the rural house-holds are landless peasants and another 57% (35.1 % of total population) are under-employed and under-paid non-farm laborers. Both of these groups could benefit from higher agricultural growth rates, land reforms and land redistribution.Higher growth rates would create employment in farm and non-farm sector and would increase wages and incomes. Both growth and equity policies can be mutually reinforcing. Our argument is that the Livestock sector in Pakistan has a contribution of 47 % in the agricultural output, which has been mostly contributed by small holders or the landless, having 2-5 Buffaloes. If 1-1.5 Acre plots are distributed to this group of the landless and the non-farm workers, under a land reforms scheme, it would contribute to both, output and equity. Similarly, the proposed beneficiary group could also participate in high value horticultural sector, which has been shown to have a growth potential of 5.0% p.a. A reasonable land reform component along with the distribution of state land to the rural and possibly urban poor could go a long way in reducing the endemic poverty in this country. Many recent writings have indicated the destabilizing potential of the rural and urban poverty and disparities. Even the Taliban issue is interpreted as having linkage to poverty and deprivation. This creates a new logic and rationale for land reforms which may not only be restricted to land distribution but should go well beyond towards improving upon the tenure issues. The author would strongly argue against the so-called market efficiency and growth-sans-equity policies for example as in Egypt which have worsened the poverty and inequity conditions.Land Ownership and Utilization in Pakistan__________________________________________________________1) Number of households / population increased by 25% during the two censuses (1990-2000).2) Number of farms increased from 5.071 million to 6.6 million: 1.549 million farms added: an increase of 30.54%; total Farm area increased by only 6.15 %; 0.6% increase p.a.3) Number of farms under 1 hectare (ha) remained almost the same; however, farm area under this category increased by 68.47 %, an addition of 483,000 ha. Percentage of these farms in the total number of farms increased from 27 % to 36%.4) Number of largest farms, 60 ha and more, decreased from 15000 to 14000, a decrease of 1000 farms; area under these farms also decreased from 1.936 million ha to 1.683 million ha a decrease of 15% in area.5) In 1990, 27% farms had 4% of total farm area, while the largest farms (60 ha and more and, less than 0.5 % of the total number of farms) had 10% of the total farm area .In 2000, 36% farms (under 1 ha) had 6% of the total farm area, while large farms had 8% of the total farm area. Has the skewed distribution decreased? In 1990, the large farms’ total area was 2.75 times higher than the total area of small farms( under 1 ha) area, the same ratio decreased to 1.42 times only ; skewed distribution and disparity still quite high ,but appears to have been reduced by almost 100%, under this indicator.6) In Pakistan about, 6.6 Million farming families own 6.6 million farms, over a farm area of 50 million Acres (average size 8 Acres), of which 20% farm area remains uncultivated. 58% Farms or farm house- holds have only 10% of the total farm area, call them very small farmers( under 5 acres); 37% small farmers (5-25 acres) own 47% of the farm area; 5% larger farmers (25-100 acres) own 26% and 0.5% (30,000 families) of super land lords (100 acres plus) own 11% of the total farm areas.7) Some 19% of the total farm area remains uncultivated. In small farms up to 93% of farm land remains cultivated. This percentage goes down with the increase in farm size. At 100 acres plus, roughly one-half (50%) of the land area remains uncultivated and unutilized.8) About 2.6 million acres of farm area in large farm size category remains unutilized, which is under the control of 30,000 super land lord families. Another 1.5 million acres remain uncultivated in 50-100 Acres plot size. Potentially about 2.6-4 million acres (50%) of unutilized farm lands is “distributable”. Two million landless could benefit.Our Land Reforms experience; a reviewAlthough Muslim League Leadership was ‘mostly feudal the latter felt and recognized the popular pressure for land and tenancy reform. Hari Report, Daultana Commission, MLR-54 and MLR-115 have been the major milestones in the land and tenancy reform history in Pakistan. The last move in this respect dates back to 1977, when PM Bhutto announced a new package of reforms including lower ceilings on land and allotment of government land to the poor tenants. Freedom movement and the ideological conflict between the East and the West created and sustained pressures for land reforms in the developing world. Ideological period having gone, the futility of the earlier reforms and the en-trenchment of feudal interest in Pakistan’s body politic are possibly the reasons, why any such move does not get even mentioned these days. There is substantial postwar evidence that the societies which implemented meaningful land reforms, and put an end to feudalism, could transform themselves into the new dynamism required for scientific and industrial growth and development. Taiwan, Korea and Japan are classic exam¬ples. Taiwan and Korea utilized the opportunity created by the exit of Japanese landlords to launch deep and effective land reforms. Pakistan lost this opportunity which was available to it after independence, as many non-Muslim land owners fled the country.The economic rationale for earlier land reforms was based more on optimal considerations and hither-to under-utilization of the lands available with the big land lord. It appears that redistribution impact was much less of a consideration in the view of the planners and decision makers. The political objectives included acquisition of political legitimacy, and shaking and controlling the feudal class through carrot and stick approach and enhancing the political clientele and image among the masses. Ayub Khan’s reforms (MLR 64) put the upper ceiling of irrigated land at 500 acres per family and un-irrigated at 1000 acres per family. Compensation is to be paid through inheritable bond which earned 4% p.a. interest and land was to be redistributed at a price. Bhutto’s reforms (MLR 115) put the upper ceiling at 150 acres irrigated and 300 acres un-irrigated per member of a family. No compensation was to be paid to owners and the land was to be distributed free. Put together, the two land reforms affected about 4% of the land, only half of which was actually transferred to landless. Only about 100,000 farming households 8% of the total (and even much less if landlessness was included) benefitted.A New Land Reform PackageIn Pakistan, 28% of the total landmass is being under cultivation, and huge chunks of land remain unutilized. About 6.6 million households own 6.6 million farms over a total farm area of 50 million acres. Only some 80% of this farm area is actually cultivated. The remaining 20% of the farm area remains uncultivated. Small farms utilize up to 95% of the available farm land, while large farms owned by big and powerful landlords remain uncultivated to the extent of almost 50%.A total of 2.66 million acres of farm area remains uncultivated in the large farm category(100 acres plus). Some 30,000 landlord families could benefit one million plus landless families, if uncultivated land is given away to the latter under some Land Distribution Scheme, if not land reforms exactly. In Land Reforms, usually land is forcibly taken away under legislation or revolution without any compensation.There is also a case for bringing more land under agriculture. Perhaps ten million more acres could be added by new land expansion and development activity probably in the next ten years. This would mean one million acres per year of new land to be transferred to the landless. One would argue, where would the water come from? We are already short of water. We are currently wasting water under existing flood irrigation practices. The new land under the landless families would be from the very beginning on more efficient Drip Irrigation (D.I.), which may be cheap as well as efficient. The landless poor beneficiary would be more inclined and capable to introduce bucket and pipe drip irrigation. He would not have much choice. He does not have many choices in life either.Thus about 14 million acres of land (10 million new and 4 million existing unutilized) could be distributed among the landless over a period of some ten years, benefitting 5-6 million families, with a farm of 2.5 acres each, practically solving the issue of landlessness, if not of poverty totally. Even after getting 2.5 acres, he would not be totally out of the clutch of the grinding poverty. But he would get hope and the tools, to handle the economic problems of his family.Pakistan would need more land under cultivation to feed its ever increasing population, as productivity increases are too far and few in between. The diseconomy of scale, if any, of the small farms should be taken care of by an organized Cooperative movement that could take care of the credit and inputs. Land is the only thing that governments can afford to give free, may be charge some development cost in the long run under a concessionary credit scheme. Land remains on earth. It does not evaporate and does not disappear. It is excellent collateral for the poor. After all if a country belongs to its people, they should all own some piece of land, however, small it may be.Land has been distributed in Pakistan among the rich and powerful and literally given away at dirt prices. Some effort would have to be made to include the poor in this largesse. There is a mass appeal and appetite for land confiscation by the state without compensation. Hence the two attempts at land reforms, even though unsuccessful. Any new land distribution scheme should be careful and respect the federalism requirements and the local and regional rights. It should not import people from the outside, unless in special cases, where demand and supply gaps may exist.On the other hand the big landlords may be induced by the State to do away with their excess unutilized land by imposing a variety of taxes including the much dreaded and opposed Income Tax .Excess land can be acquired by provincial governments under a land bond scheme carrying a reasonable interest rate. The poor land allotee may also be required to pay off a part of the land price under a concessionary credit scheme. Similar schemes have been implemented in Japan, Korea and Germany immediately after the Second World War of 1945.Landless peasants can be given a 1-2 Acre farm each, at 50% of the purchase cost under 4% p.a. and 20 yrs repayment. Alternatively GOP and provincial governments could develop 2-4 million acres over a period of 7-10 yrs, possibly under budgetary outlay than the procurement of private land. Government of Sindh is already implementing such a programme at a modest scale by converting kutcha forest land but without forest, to agricultural land and distributing among landless. This can be done with much ease in Balochistan, where large tracts of land remain unutilized. For political and possibly good reasons, land in Balochistan can only go to Baloch and hence only 1.0 million families could benefit .Almost all the house holds in Balochistan could get a reasonably sized farm. In Punjab, the problem is difficult due to large population and in NWFP the land is limited, although in both the cases there are less populated areas tribal belt in NWFP and southern Punjab. Instead of giving lands to reward generals and bureaucrats and large real state investors, the scarce land should go to the landless poor.Land is the only thing governments, mostly provincial, have. Budgetary resources are limited and cannot almost always be enough, be it BISP or Zakat fund.The cultivable waste landThere was a total of 8.22 million ha of cultivable waste land available to be cultivated, perhaps all of it government land, almost half of it (3.97 Million ha) is in Balochistan. There are only 1.163 million households in Balochistan. If this land is distributed, every house-hold in Balochistan gets 3.41 ha (8.5 acres), much more land than most of the household in Punjab. One doesn’t have to take it away from some one; The Government and the province of Balochistan have this with themselves. Likewise, KP has 1.21 million ha of cultivable waste land, and only 2.77 million house-holds. KP has a land area problem, and about 0.5 ha (1.25 acres) could be distributed to every family in KP. Some 1.29 million farms in the country are under 0.5 ha. It is better than being totally landless. Some of the allotted lands would be sold, because every one cannot enter into agriculture. Ultimately, if 50% of the house-holds end up selling the allotted land, the average farm size increases to 1 ha, which should be quite sufficient to produce food for a family or produce products of an equivalent value. Alternatively, GoKP could allot the available wasteland to 50% of the families, to get the same result. In Sindh and Punjab, landless are high in number and the available cultivable wasteland much less. Nevertheless, 1.6 million ha of this land available in Punjab could be distributed among 3 million households. Similarly, in Sindh, 1.44 million ha could go to another 2 million house holds. A total of 6 million households, out of a total of 14 million rural households can thus get land, without resorting to redistribution. There is a big if in it. The land may not have been grabbed already by the powerful. It has come to public light only after the floods that in Sindh; most of the sailabi land had been grabbed by the powerful landlords, and had been put to share-cropping.Times have changed. Today’s reports of World Bank and IMF and other western agencies read like communist manifesto. The kind of poverty and hunger eradication literature that is coming out now for more than two decades would have sent the writers and publishers of those writings to jail or severe marginalization, in 1950s, 60s and even 70s.Today the biggest enemy or adversary of the World powers is religious fundamentalism and extremism and has replaced the erstwhile Communism. Let me quote here from a report compiled under the aegis of USAID. Ironically, USAID and the World Bank have supported land reforms in the past in many strife prone regions. Taliban issue seems to have created a new rationale for land reforms among the donor agencies. It is being argued that Talibans may exploit the issue and would most probably be successful in drawing support from the landless poor farmers and enhance their appeal and domain. There is significant evidence that most of the Talibans and their supporters come from the landless class.There are other options and components of reform programme as well that extend to water rights and urban housing schemes. Under new irrigation schemes, whenever these come up, trade-able water rights could be awarded to the landless, which he could sell to the willing customer or use it as his collateral or share in the distribution of agricultural output and profits. In this way he becomes partner in place of surf.In urban land laws, provisions for high -rise building societies could be introduced, where virtual plots in the third dimensions are allot-able. Real state developers could be encouraged to develop multi-purpose projects, where in lieu of subsidized land or free land use conversion, a certain percentage of 3-D plots are allotted to the poor. Currently a lot of money changes hands on conversion of agricultural or residential land to the commercial one. Some fee does go to the local or provincial government but most of the surplus is siphoned away by the builders, landowners and the social and political elite. So the name of the game is to create policy or innovation surplus and divert it to the poor.There is a lot of government land that is available on the periphery of Karachi near Sohrab Goth (outside Karachi limits) and in district Thatta that could be allotted to the flood victims especially from the inundated towns of Jacobabad, Larkana and Thatta. If Sindh has to develop regional economies are to be established, as has happened around Lahore. Karachi itself would benefit from the regional economic development as Lahore has. Karachi’s’ economy has been stagnating for many years now. One of the reasons is lack of close geographical interactions and resource reservoirs. Every body would benefit. However the idea would fail if it is used for political and ethnic manipulation and advantage.I would like to add a caveat here. Last PML (N) government headed by Mr. Nawaz Sharif introduced an innovative housing policy and strategy for urban areas by transferring surplus government land and plots for low-cost public housing projects. A good innovative project was, however, reportedly marred by construction scams. There was no need of involving government in construction by a party which believes so much in private sector. That project perhaps is revived in one form or the other. Some residual land or assets may still be there. Musharraf government quietly put a lid on it. No NAB case has been filed with respect to this project apparently. May be, there is one or a few. I am not sure.These are excepts from the writers forthcoming book; Pakistan’s development :economy, resources and technology

As per details released by the SBP, balance of payments deficit has touched US$1.7bn in 5MFY12, reaching close to our full year projection of US$1.8bn.

This is primarily led by 3.6x jump in CAD to US$2.1bn, whereas financial account surplus contracted to US$169mn on lower than expected sovereign flows.

While current account deficit reading came in higher MoM in Nov-11 (US$478mn vs. US$287mn in Oct-11), currency has depreciated 4.2% since Nov, where we believe the forex market is already anticipating a potential lack of donor support in the coming months.

While our FY12E base case currency devaluation is estimated at 3.5%, we keep a close eye on (1) the detailed IMF report/Letter of Comfort and (2) Pak-US relations, that could drive prospects of committed sovereign flows picking up pace.

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What's Next, Prime Minister? — From The Evening Standard, London

At least 23 and perhaps as many as 26 of the 27 members of the European Union have agreed to an inter-governmental agreement that may or may not save the euro from the bond market vigilantes. A full-blown treaty failed because there was not unanimous support for the idea – Britain stood alone in saying flat out that it wasn’t signing up for that. Prime Minister Cameron had little choice either on the grounds of national interests or domestic politics. However, the EU is a much different place than it was just last week.

Mr. Cameron went to Brussels demanding that the UK have a veto over any financial services regulations. While this may seem a bit extreme, one must remember that France and Italy have protected their farming sector with the EU’s Common Agricultural Policy for decades. And the euro’s greatest benefit to Germany was the protection of its neighboring export markets – a single currency ensured that German manufactured goods were still relatively affordable outside Germany, the Low Countries and Scandinavia. Britain simply wanted to protect the 10% of its GDP that comes from financial activity.

President Sarkozy of France explained why he could not accept that, saying “You cannot have an opt-out and then ask to participate in all the discussion about the euro that you did not want to have, and which you also criticized.” His European policy has always been to form a core group within Europe that excludes the more free-market British, Scandinavians and Eastern Europeans – this will maximize French power.

The details of the “fiscal compact” are pretty clear. The BBC reported them as “a cap of 0.5% of GDP on countries’ annual structural deficits, ‘automatic consequences’ for countries whose public deficit exceeds 3% of GDP; the tighter rules to be enshrined in countries’ constitutions; European Stability Mechanism (ESM) to be accelerated and brought into force in July 2012 adequacy of 500bn-euro (£427bn; $666bn) limit for ESM to be reassessed; Eurozone and other EU countries to provide up to 200bn euros to the IMF to help debt-stricken eurozone members.”

The agreement itself is far less important than Britain’s position in the EU. As the Economist noted, “Whether the agreement does anything to stabilise the euro is moot. The agreement is heavily tilted towards budget discipline and austerity. It does little to generate money in the short term to arrest the run on sovereigns, nor does it provide a longer-term perspective of jointly-issued bonds. Much will depend on how the European Central Bank responds in the coming days and weeks.”

Frankly, I don’t think it will work in the long-term. Greater austerity is not going to get the Greek or Portuguese economies growing anytime soon, but Hoover’s ghost haunts the eurozone now. And as a result, saving the whole thing is going to cost Germany more in the end than it would have a year or more ago.

Instead, Britain now finds itself alone on matters of budgeting and taxation within the EU. The 17 eurozone members and at least six others will be part of the inter-governmental agreement (just shy of a treaty in international legal terms), and Sweden, Hungary and the Czech Republic may sign up to it after parliamentary debates.

Why was Mr. Cameron so uncooperative? Quite simply because he had no choice. As noted, 10% of the UK’s GDP is finance based. Moreover, though, he leads a coalition that ranges from Conservatives who still think of Europe as the enemy, Conservatives who are tolerant of the EU’s existence, and Liberal-Democrats who are rabidly pro-Europe. His room for maneuver was very small, and his margin of error even smaller.

No matter what he did, he risked splitting these various factions. By vetoing a new treaty, he opted to distance the Conservative Party from the junior coalition Liberal Democrats. Not only is he Prime Minister, he is also leader of the Conservatives, so this should come as no surprise.

For their part, the Liberal Democrats are putting a brave face on it, but there is a clear sense that they know their policies have suffered a huge, perhaps lethal, setback. Leader of the LibDems and Deputy Prime Minister Nick Clegg initially put the blame on the French and Germans rather than on Mr. Cameron. However, he has made it clear that he doesn’t like the result no matter who is to blame. He said on the Andrew Marr program on the BBC, “I’m bitterly disappointed by the outcome of last week’s summit, precisely because I think now there is a danger that the UK will be isolated and marginalised within the European Union. I don’t think that’s good for jobs, in the City [the UK's financial district] or elsewhere, I don’t think it’s good for growth or for families up and down the country.” Since then, he has been more vocal in his protests.

Less diplomatic were statements from LibDem bigwigs Lords Oakeshott and Ashdown. Lord Oakeshott stated on the record that LibDem Business Secretary Vince Cable had “given a very serious warning last Monday in the cabinet against elevating these financial regulation points into a make or break deal.” Former leader of the LibDems, Lord Ashdown, put it in the blunt terms of the special forces soldier he once was stating that the veto “tipped 38 years of British foreign policy down the drain.”

Where does all this leave us? The British governing coalition is clearly divided and may not survive the remaining three-and-a-half years this parliament has to run. Europe will move forward toward fiscal union, but without the UK. Moreover the other 9 EU members that aren’t part of the eurozone may discover that having Brussels handle their economic policy to suit German and French desires is less than appealing. There will be legal battles over the use of EU-wide institutions to enforce rules that do not apply to the entire EU. And in the end, the problem of heavily indebted countries failing to achieve meaningful economic growth remains the central issue in European finance.

2011 can’t end soon enough.

On May 2nd U.S. special forces entered deep inside Pakistan’s territory, effectively killing world’s most wanted terrorist, and leaving undetected. This raid by some is considered a breach of Pakistan’s national sovereignty. Although there are arguments which suggest that Pakistan’s sovereignty has already been compromised by the presence of Osama Bin Laden, banned organizations, and wanted terrorists. Making it a fair game for international forces to chase them inside Pakistan.

Also it is only considered a breach of sovereignty when there is a “use of force against the territorial integrity or political independence of any state,” according to the United Nations Charter. As far as the U.S. raid(s) in Pakistan are concerned, none of them were for the purpose of overthrow of Pakistan’s government, or to change Pakistan’s territorial borders.

If examined deeper, sovereignty seems to be a vague issue. Especially in today’s world it’s really a subjective and almost non existent argument. With rapidly growing influence of globalization in our societies and international treaties that are meant to eradicate borders and national sovereignty for greater global good, the importance of sovereignty has been replaced by the importance of peace and prosperity.

So when it comes to global world and greater interests no nation is truly sovereign. As we become increasingly globalized our interests are highly intertwined, we become highly dependent on one another. Each nation is no longer an independent sovereign nation, but rather a citizen of a global world. Being a global citizen comes with rights and responsibilities of citizenship. Some of which include protecting the environment that is shared by everyone and helping to keep the world safer and free of terrorism.

Organizations like United Nations, World Bank, World Trade Organization, International Monetary Fund, and treaties like NAFTA, EU, and Euro Zones are all a part of this decreasing national sovereignty and increasing interdependence. These treaties and contracts amongst nations are formed mainly to integrate their economies, but also to have regional and global political security and a deterrence against war.

When countries group together like the European Union, they not only integrate their economies but also enhance their political weight in the world. Many Europeans believed that after World War II the European nation-states were no longer large enough to hold their own world markets and world politics. There was a need for a united Europe to deal with the United States and the Soviet Union. Hence a union was formed, which not only became a world’s largest economic giant, but also a political power, and a prosperous war free region.

With the recent financial crises, unions like Euro Zone are looking towards more integration and less sovereignty, rather than independence and individuality. They are heading towards becoming a fiscal union rather than merely a monetary one. This sort of action would make them equivalent to the U.S. model.

As a member of United Nations Pakistan has also given up its sovereignty to the rules, regulations, and the decisions of the UN’s body. Pakistan as a member of UN has to comply with United Nation’s charter and follow its guidance on laws, especially when it relates to human rights issues. Hence Pakistan’s sovereignty doesn’t fully exist the way it’s thought to be by some commentators in Pakistan.

Same is true for Pakistan under the International Monetary Fund’s guidelines and World Trade Organization’s restrictions. Pakistan does not have the freedom to implement any sort of fiscal and monetary policy that isn’t approved by those organizations. This also puts restrictions on what Pakistan trades and how it trades with other nations.

These are the issues Pakistan needs to analyze further as a nation. Whether they want to live as an isolated nation or join the ranks of many in becoming a truly global country. This would mean toning down the rhetoric on sovereignty and becoming integrated in the global economies and politics.

2011 in Liberia was all about the elections and although they could not be deemed a complete success because of the opposition’s successful, but ultimately fruitless boycott– 2011 was still a very good year for Liberian democracy.
The year was also very good to Liberia’s President Sirleaf, Africa’s only female head-of-state who garnered a Nobel Peace prize to add to her already overflowing cabinet of awards and accolades. She is now an official icon in the eyes of the international community and although she is not totally beloved at home she still represents one of the faces of progressive Africa to the outside world.

On the economic front oil fever gripped many politicians in Monrovia with the leasing of off-shore drilling rights to several international companies, Chevron among them. Blithely disregarding any talk of a national dialog on the issue of a potential ‘resource curse’ things seemed rosy until allegations of corruption and bribery aimed at the National Oil company and one of Chevron’s main partners emerged. Sirleaf has taken action to curb these early signs of corruption but even she admits that the judicial system is broken.

In general terms Liberia also came through an IMF Review which allowed it a continuation of the Extended Credit Facility, a major source of foreign aid and a sign of economic confidence. There was also a visible expansion of the commercial banking sector in Monrovia and some major infrastructure improvements although very few improvements in road conditions along major routes outside the capital, a fact which will hinder economic benefits reaching the rural poor.

On the culture front the Liberian music scene has been flourishing despite a lack of basic resources. Liberian Hipco is now challenging American and other West African sounds for the attention of young listeners and some of its stars have become household names.

All-in-all, Liberia should feel pretty good about itself after 2011. The road ahead will be long and difficult but the Liberian people are resilient and optimistic and the energy of the youth in inspiring.

More Accolades for the President

The surprise of the year is that two Liberians would win the Nobel Peace Prize in the same year.

An Unsung Hero

My nomination for Person of the Year in Liberia is Dr. Emmet Dennis, the President of the University of Liberia. Working with few resources but with a tremendous sense of mission, Dr. Dennis, formerly an administrator at Rutgers University, is slowly bringing the University of Liberia back to life despite the neglect on the party of the international donors and the government of Liberia. This fall Dr. Dennis had to have emergency brain surgery but after a quick recovery he returned to the battle to try to make the University of Liberia a relevant institution for the future of the country.

2012 Will Be More of the Same…Which is Not Totally a Bad Thing

Liberians will come together after the contentious election and continue to look for the government to provide jobs and economic stability. While searching for new natural resource investors the government will have to work hard to root out corruption and create a sense of transparency around contracts and payments. The government will also begin to address the need for further work in the areas of justice and reconciliation in the wake of the controversies surrounding the previous Truth and Reconciliation Commission. Jobs, especially for young people, will continue to be an issue as well as major shortfalls in education and health-care. Reforms in the security sector will have to take place to prevent some of the abuses that were on display during the election period and also to prepare for the eventual withdrawal of UN Peacekeepers. With a little bit of luck and with the continued support of international partners Liberia will continue to make progress and without the distraction of an election President Sirleaf can demonstrate to the world that she is indeed deserving of all the glory which has already been bestowed upon her.

A book to read….

A Farewell to Alms by Gregory Clark. ..It is a sobering, data-driven, yet entirely readable account of the forces that shape the modern world and the challenges that a country like Liberia is up against.