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	<title>The Express Tribune &#187; Dr Akmal Hussain</title>
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		<title> The people speak </title>
		<link>http://tribune.com.pk/story/551548/the-people-speak/</link>
		<pubDate>Sun, 19 May 2013 18:14:11 +0000</pubDate>

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			<p><p>In this, the first election held at the end of a full term by a democratic government, the people have spoken. They have given a resounding “no” to militant extremism and affirmed that they seek a future of freedom and development. In the weeks preceding election day, the militants publicly declared their objective of disrupting the elections to destroy the emerging democracy, which they said was <a href="http://tribune.com.pk/story/532987/un-islamic-system-taliban-call-for-poll-boycott/">an infidel system (<i>kufr</i>)</a> and those who dared to vote would be considered infidels. They followed up this ultimatum with daily bombings of corner meetings and killing over a hundred people, including some candidates. <a href="http://tribune.com.pk/story/548092/blasts-rocket-fire-and-clashes-leave-dozens-dead/" target="_blank">On the day of the election itself, over a dozen citizens were killed</a>. In the face of this terror, the people showed a quiet resolve as they flocked the polling stations in record numbers. In doing so, they defied the threat to society and state that the militants posed with a courage that is perhaps unmatched in the history of democratic societies. What are the messages the people of Pakistan have sent to the world by expressing their collective will?</p>
<p><a href="http://tribune.com.pk/story/550242/poor-in-wealth-rich-in-turnout/" target="_blank">The fact that the voter turnout ratio was 60 per cent</a> — the highest in Pakistan’s history — signifies that the people of Pakistan have given legitimacy to a democratic state. By legitimacy, we mean the right to rule within a particular polity and state. As Jean-Jacques Rousseau in his Geneva manuscripts has argued, in the very act of granting legitimacy, a people constitute themselves into a nation. This is because legitimacy is granted on the basis of what Rousseau calls a “social contract”, whereby the state guarantees certain rights to the nation in return for getting the right to rule. So, the granting of legitimacy involves the apprehension by a group of people of certain shared values that underlie the specification of rights that the state is required to ensure in terms of the social contract. Thus, the people of Pakistan in risking their lives to vote have re-experienced their nationhood — a nation that was originally conceived by Pakistan’s founding fathers, Jinnah and Iqbal, as being sustained by a democratic state. It would be a state which ensured the right to practise one’s religion and where, through love and freedom, humans could reach transcendent heights of self-actualisation.</p>
<p>The fact that the PML-N, with a <a href="http://tribune.com.pk/story/517560/eyes-100b-export-by-2018-pml-n-election-manifesto-promises-one-million-jobs/" target="_blank">manifesto aimed at economic development</a> and a record of reasonably good governance in Punjab, won with a majority in the National Assembly, suggests that the people want an improvement in their material conditions. Given the misery of power outages, inflation and unemployment, they chose not to risk a newcomer to governance in spite of Imran Khan’s considerable potential and charisma. That he has emerged as a major political force powered by the hopes and energy of the youth, indicates that the people have created a future political alternative for themselves at the centre. That Imran Khan’s Pakistan Tehreek-e-Insaf has enough provincial assembly seats to form a government in Khyber-Pakhtunkhwa (K-P), which means that he has been given a chance to prove himself through effective governance in a province which is the hotbed of extremism. If he manages to bring peace to K-P, fulfils his promise of eliminating corruption and achieves an improvement in economic welfare in that province, then he would be able to lay claims to captaincy in Islamabad. Such a claim, then, would be based on measurable performance, just as the PML-N did on the basis of its earlier record in Punjab.</p>
<p>Even at this early stage, it is clear that in spite of the fact that the religious narrative has gained ground in political argument, the people have once again marginalised parties which use exclusively religious rhetoric as an instrument of gaining political power.</p>
<p>The conduct of the elections also manifests the fissures in society and the state. Armed wings of political parties exercise power. Similarly, the extremely low voter turnout in Balochistan shows the lingering sense of alienation of Baloch nationalists from the state. But at the end of the day, the people have placed their hopes in democracy.</p>
<p><i>Published in The Express Tribune, May </i><i>20<sup>th</sup>, 2013.</i></p>
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			<media:title>Dr Akmal Hussain New</media:title>
			<media:description>The writer is Distinguished Professor of Economics at Forman Christian College University and Beaconhouse National University</media:description>
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		<title> Reforming governance</title>
		<link>http://tribune.com.pk/story/548334/reforming-governance/</link>
		<pubDate>Sun, 12 May 2013 19:56:39 +0000</pubDate>

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			<p><p>Each of the wounds in the body economic that have caused acute pain to the people in the previous regime can be traced back to failures of governance: stagnating growth that has generated high levels of poverty and unemployment; <a title="Economy on the eve of elections" href="http://tribune.com.pk/story/546623/economy-on-the-eve-of-elections/">inflation</a>; severe electricity shortages; and high budget deficits, which have prevented the government from giving succour to a distressed citizenry in the form of protection against violence, adequate food security, health and education. As the new government comes to power, the key to addressing the misery of the people is to restructure governance. Let us indicate some of the changes that lie at the heart of improved formulation and implementation of economic policy.</p>
<p>The institutional origin of the simultaneous emergence of slow economic growth, inflation and unsustainable budget deficits today is located in a governance structure where the Ministry of Finance is in practice managing all three of these parameters of economic performance. Each of the tasks of governing markets for growth, controlling inflation and managing the budget, <a title="No bed of roses: Building up political will biggest challenge" href="http://tribune.com.pk/story/548288/no-bed-of-roses-building-up-political-will-biggest-challenge/">requires specialised expertise and exclusive focus</a>. Therefore, a more efficient institutional arrangement would be to let a genuinely autonomous state bank concentrate on inflation control and to require the Ministry of Finance to manage the budget and be held accountable if there are any slippages from the fiscal deficit targeted at the beginning of the financial year. The task of managing growth and income distribution cuts across the different specialised sub-fields in economics and should be left to an autonomous and sufficiently empowered Planning Commission (PC). At the moment, the PC is merely an appendage of the Ministry of Finance and is reduced to overseeing public sector development programmes. Even this it does in a haphazard fashion because the priorities of disbursing funds to projects are not determined by an overall growth strategy but by shifting political pressures emanating from various rent-seeking lobbies.</p>
<p>A <a title="Policymakers: Liabilities should be your greatest concern!" href="http://tribune.com.pk/story/548283/policymakers-liabilities-should-be-your-greatest-concern/">triangular policymaking structure</a> whereby economic growth, inflation control and budget management are conducted by separate state organisations, each strengthened with specialised professionals, may be more efficient. It would also enable checks and balances because the State Bank of Pakistan, the Ministry of Finance and the PC, respectively, would report independently to the prime minister who could subject their specific organisational policy perspectives to discussion and debate before taking key strategic decisions.</p>
<p>Dr Nadeemul Haque, the outgoing Deputy Chairman of the Planning Commission, had, in May 2011, prepared the Framework of Economic Growth (FEG). It draws upon the literature of the New Institutional Economics to chart a new course for the economy. The FEG proposes a change in the institutional structure and the associated incentives/disincentives through which the dormant entrepreneurship could be unleashed for sustained high GDP growth. I had, in my earlier published work, used the term ‘economic architecture’ to suggest that there were structural tendencies in Pakistan’s economy for an aid dependent stop-go pattern of growth and endemic poverty. Dr Haque went further to suggest that the first step to break out of this mould is to reform the “architecture of governance”. This is true, because any fundamental change in the direction of economic policy requires a change in the decision-making structure within which policy is formulated and implemented.</p>
<p>The basic principle of governance reforms is to have multiple nodes of policy ideas, with each node specialising in a particular field of economic policy and allowing intellectual tension between them. Simultaneously, policy formulation, regulation and the running of public enterprises should be separated. These ideas for governance reforms are an integral part of Dr Haque’s legacy embodied in the FEG. What the FEG ignores, however, is that markets left unfettered do not always deliver efficient outcomes and so have to be carefully regulated. Equally important, the strategic economic objective is not just growth but a growth that is powered by the talent and enterprise of all of the people rather than only the entrepreneurial elite.</p>
<p><i>Published in The Express Tribune, May </i><i>13<sup>th</sup>, 2013.</i></p>
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			<media:title>Dr Akmal Hussain New</media:title>
			<media:description>The writer is Distinguished Professor of Economics at Forman Christian College University and Beaconhouse National University 
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		<title>Art as resistance</title>
		<link>http://tribune.com.pk/story/544450/art-as-resistance/</link>
		<pubDate>Sat, 04 May 2013 19:58:50 +0000</pubDate>

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			<p><p>The extremist groups that have unleashed a reign of terror at the existential level are divorced from humanity. In their own existence and the society they are brutalising, they seek to stop access to the experience of love, a sense of beauty and truth — forms of being in this world that have been manifested in art and literature and have enriched human civilisation throughout the ages. Now, the human form, whose beauty was celebrated in the <a href="http://www.google.com.pk/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;ved=0CDAQFjAA&amp;url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FMohenjo-daro&amp;ei=sWaFUeyQAsSLhQfu_4H4Cg&amp;usg=AFQjCNEsnBkBnY3jdGHo_uXqoEmgRGlp-w&amp;sig2=VS-2x3xFojZX5F64kNYnUA&amp;bvm=bv.45960087,d.ZG4">dancing figurine of Mohenjo Daro</a> or Michaelangelo’s David, is being torn apart by daily bombings; and human consciousness, whose nobility was apprehended by Iqbal, is being demeaned through bigotry. In the face of this human degradation, art can come to the fore so that through the aesthetic dimension, we can relive afresh the beauty and value of being human. Art can, therefore, play a mobilising role to help confront the onslaught of barbarism.</p>
<p>Last week, Musarrat Hasan’s book on five decades of Mian Ijazul Hasan’s painting was launched. Let us discuss his work in the context of some general ideas on the sense in which we use the word art, its nature and the relationship between art and politics.</p>
<p>Underlying the attempt to define art is the Platonic idea that the meaning of a word is what it names. Now, a set of objects — in this case, art objects — must have some common property that the common designation signifies. Benjamin Tilghman asks, what is that common property in the case of works of art, some latent essence? The linguistic problem of using the word art for a variety of different objects was solved by <a href="http://www.google.com.pk/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;ved=0CDAQFjAA&amp;url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FLudwig_Wittgenstein&amp;ei=bmeFUYr4Ho2JhQe_mIGABw&amp;usg=AFQjCNE3glLOdmVRuLZqo3-nD6IkD_2pyA&amp;sig2=zkd5iGXZ1nhpCO4avxohaA&amp;bvm=bv.45960087,d.ZG4">Ludwig Wittgenstein</a>, the Cambridge linguistic philosopher. He suggested that the way a word functions in language can be understood by how the word is taught to children. We do not, for example, teach children the word “games” by defining it in terms of a set of criteria, but rather describe a game. After getting the description of a few examples of games or actually seeing them being played, the child learns to call other human interactions “games” because they are similar to the games whose descriptions were earlier heard or were seen being played. So it is with the word “art”. We learn to recognise a particular object as art not by grasping some non-existent latent essence, but because we discover strands of similarities with other works of art that we have come across.</p>
<p>While the word “art” can be understood in the sense of Wittgenstein, by the way it works in language, there is also the experiential dimension, the complex set of emotions and imagination that come into play upon seeing a work of art. It is thus that the artist affects other people. <a href="http://www.google.com.pk/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;ved=0CDMQFjAA&amp;url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FAdolfo_S%25C3%25A1nchez_V%25C3%25A1zquez&amp;ei=iGeFUdjyKsWXhQec8YAY&amp;usg=AFQjCNHUUpIxmMvgbm5YTx5ridZYVHZTmw&amp;sig2=WA18ssCKb0S56eRVI5pPpg&amp;bvm=bv.45960087,d.ZG4">Adolpho Sanchez Vazquez</a> suggests that art “contributes to the reaffirmation or devaluation of ideas, goals or values”. By influencing the way people think or feel about issues, art becomes a social force. At one level, the battle against the extremists is a battle of ideas. How else, except through ideology, can rational individuals be persuaded to don suicide jackets or, alternatively, embrace love and reject hate? Art can help in reclaiming our humanness in the ongoing battle of hearts and minds.</p>
<p>Mian Ijazul Hasan’s paintings draw us into the poignant transience of nature as much as human beings. Yet, there is also the intimation of significance of our being in this world. As the poet Rainer Maria Rilke says “Just once, everything, only for once … And we, too, once. And never again … But this having been once on earth — can it ever be cancelled?”</p>
<p>Hasan’s paintings enable us to simultaneously experience the sensuousness and transcendent beauty of nature counterposed with the brutality of an unjust society. We are invited to apprehend this polarised metaphor through an existential choice: to actualise the organic connection between our sense of beauty and our human nature by building a humane society.</p>
<p><em>Published in The Express Tribune, May 5<sup>th</sup>, 2013.</em></p>
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			<media:title>Dr Akmal Hussain New</media:title>
			<media:description>The writer is Distinguished Professor of Economics at Forman Christian College University and Beaconhouse National University</media:description>
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		<title> Rethinking structural adjustment</title>
		<link>http://tribune.com.pk/story/541739/rethinking-structural-adjustment/</link>
		<pubDate>Sun, 28 Apr 2013 19:16:21 +0000</pubDate>

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			<p><p>It is apparent that the <a href="http://tribune.com.pk/story/540687/onus-on-incoming-govt-to-meet-economic-energy-challenges/" target="_blank">post-election government will have to negotiate with the International Monetary Fund</a> (IMF) to get some relief as pressures on the exchange rate become unbearable. It may be helpful to rethink the idea of “structural adjustment” to change the pattern of seeking recurrent bailouts from the IMF.</p>
<p>The IMF’s Structural Adjustment Programmes in the past have suffered from two conceptual flaws in the analytical framework within which these programmes were specified. First, the term “structure” was misconceived. The IMF’s notion of structure refers to the configuration of proximate constraints in the financial sphere. These include a budget deficit considered unsustainable and a balance of payments deficit bursting the ceiling within which exchange rate stability could be maintained. Now, the term “structure”, in my humble opinion, should be understood as the fundamental design features of the real economy, which determine the pace and pattern of economic growth. Second, adjustment in terms of this definition of structure would require addressing the weaknesses in the design of the real economy within a medium-term framework rather than simply trying to <a href="http://tribune.com.pk/story/530337/imf-wants-pakistan-to-phase-out-power-subsidies/" target="_blank">slash public expenditure</a> and raising interest rates within a short-term perspective.</p>
<p>As a member of the Prime Minister’s Committee on Economic Policy in the first government of Mohtarma Benazir Bhutto in 1989, I had argued with the then managing director of the IMF that his proposed policy of public sector cuts and increasing interest rates would be counterproductive even for the objective of reducing the budget deficit. This is because such a policy would translate into reduced development expenditure and reduced private sector investment which would combine to slow down GDP growth. Consequently, a few years down the line, Pakistan would be placed in a double bind: slow GDP growth would reduce revenues and thus generate high budget deficits while, at the same time, we would suffer from increased poverty and deterioration in public service delivery. He countered that the IMF does “battlefield surgery” and economic growth was not the issue. We swallowed the bitter pill but tragically did not get cured: GDP growth fell sharply in the decade of the 1990s, poverty increased and high budget deficits reappeared. The same problem of slow growth, rising poverty, and high budget deficits emerged in the period of the latest IMF programme during the period 2008-13.</p>
<p>In view of Pakistan’s experience and indeed the world, another programme of economic contraction in the face of economic recession now would be indefensible. Instead, we need a new growth strategy. The Fund programme ought to be part of a home-grown medium-term policy strategy that addresses the structural roots of recurrent high fiscal and balance of payments deficits. Dr Nadeemul Haque at the Planning Commission, in his latest paper, has made a courageous and eminently sensible argument that the new Fund programme should combine stabilisation with economic growth within a framework of institutional reform. Perhaps the time has come for his framework for economic growth.</p>
<p>The economy is, indeed, in dire straits. With per capita income almost stagnant and a declining investment rate, it is not surprising that the incidence of poverty has increased to over 39 per cent, according to a Social Policy and Development Centre estimate. If we include unaccounted power sector liabilities, the budget deficit is over eight per cent. If we include forward buying by the State Bank of Pakistan (SBP) of $2.3 billion, then by June this year, Dr Haque estimates that the SBP reserves will be as low as $6 billion, which is only 1.5 months of imports.</p>
<p>Let us move out of this crisis within a strategy of growth and institutional reform. Reforms in the institutional structure should not merely release the spirit of entrepreneurship but should bring the middle classes and the poor into the process of investment and high wage employment. What we need is not only higher growth but a growth process in which the deprived sections of society, through their innovation and enterprise, can become the driving force of economic growth as well as the recipients of its fruits.</p>
<p><i>Published in The Express Tribune, April </i><i>29<sup>th</sup>, 2013.</i></p>
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			<media:description>The writer is Distinguished Professor of Economics at Forman Christian College University and Beaconhouse National University</media:description>
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		<title>Anatomy of the power crisis</title>
		<link>http://tribune.com.pk/story/538558/anatomy-of-the-power-crisis/</link>
		<pubDate>Sun, 21 Apr 2013 16:54:33 +0000</pubDate>

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			<p><p>The present severe shortage of electricity supply at one level is due to the failure to prioritise public policy within a long-term perspective. In my first book, <a href="http://books.google.com.pk/books/about/Strategic_issues_in_Pakistan_s_economic.html?id=oNktAAAAMAAJ&amp;redir_esc=y" target="_blank"><i>Strategic Issues in Pakistan’s Economic Policy</i></a> published in 1988, I had argued that “ … the energy sector would be a critical constraint to industrial growth in the future”. I had then pointed out that there were eight sites upstream of Tarbela (including Bhasha and Dassu) where hydroelectric power projects needed to be urgently undertaken and which could together provide 10,000 megawatts of electricity. But governments in Pakistan have failed to address long-run problems until they become short-run crises. Now power outages are causing acute distress to citizens and creating a major constraint to economic growth. Let us examine the anatomy of this crisis.</p>
<p>The crisis originated in the failure to invest adequately in installed capacity and in cheaper rather than expensive energy sources. Dr Afia Malik at the Pakistan Institute of Development Economics, in a powerful study, estimated that to sustain a one per cent growth in GDP, a 1.25 per cent growth in installed electricity capacity is required. Since GDP growth during the period 2002-07 was seven per cent annually, an 8.8 per cent annual growth in installed capacity was required. Yet, the Musharraf government increased installed capacity by only 2.2 per cent annually during that period. To make matters worse, successive governments have been focusing on the much more expensive oil-based thermal power plants rather than the cheaper hydroelectric plants. Consequently, the percentage of total electricity supply generated by hydroelectric power fell from 60 per cent in 1962, to only 30 per cent in 2009-10. This adverse change in the composition of electricity supply resulted in sharply increasing the average cost of electricity production, which accelerated as oil prices rose sharply.</p>
<p>It is testimony to the myopia of public policy that in the first decade of the 2000s, no significant investment was made in the upgradation or even maintenance of public sector power generation plants, resulting in a situation where their actual available capacity fell to only half the installed capacity. Moreover, the IPPs also did not invest adequately in maintenance and upgradation of their power plants because of the uncertainty of government policy and pessimistic expectations of future profitability. Consequently, the supply-demand gap of electricity widened, making the shortages more acute.</p>
<p>Until recently, the government kept the notified price of electricity that power distribution companies could charge to consumers, below the cost at which they were buying it from power producers. This created such huge subsidies owed to the distribution companies that a cash-strapped government could not entirely pay. This led to the emergence of the problem of <a href="http://tribune.com.pk/story/531171/circular-debt-pushes-oil-and-gas-firms-near-default/" target="_blank">circular debt</a>. As the government failed to pay the full dues to the distribution companies, these in turn, failed to pay the dues to the power production companies, who then failed to pay the dues to the oil suppliers. The resultant fuel shortages induced further underutilisation of the power production capacity and thereby an intensification of the problem of power outages. The total circular debt may now be Rs870 billion.</p>
<p>The losses of the power distribution companies were not entirely due to the gap between cost and price. Dr Afia Malik has estimated that two-thirds of the financial losses of power distribution companies are due to theft.</p>
<p>It is clear that the power crisis is due primarily to a failure of public policy: delay in setting up hydropower projects, wrong choice of technology in oil-based rather than coal-based thermal power plants, delay in rationalising tariffs and poor fiscal management. What is the economic cost of the power shortage? Earlier studies have estimated that the cost to the industrial sector alone is 10 per cent of the value added in that sector, or about two per cent of GDP. Now, in an important new study by the Institute of Public Policy, the costs to the economy as a whole have been estimated. The figure is a multiple of two per cent. This is grim, but it also suggests that a strategy of overcoming the power shortage can lead to a GDP growth of eight per cent.</p>
<p><i>Published in The Express Tribune, April </i><i>22<sup>nd</sup>, 2013.</i></p>
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			<media:title>Dr Akmal Hussain New</media:title>
			<media:description>The writer is Distinguished Professor of Economics at Forman Christian College University and Beaconhouse National University</media:description>
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		<title> Sinners and the state </title>
		<link>http://tribune.com.pk/story/532410/sinners-and-the-state/</link>
		<pubDate>Sun, 07 Apr 2013 20:38:03 +0000</pubDate>

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			<p><p>The process of scrutinising the nomination papers of various candidates in the election process has, in some cases, manifested the lacunae in <a href="http://www.na.gov.pk/publications/constitution.pdf" target="_blank">Article 62 of the Constitution</a> dealing with the qualifications for membership of parliament. This Article is a remnant of the amendments made to the 1973 Constitution by military dictator General Ziaul Haq. It can be used to disqualify a candidate by political opponents or a returning officer on grounds of being a sinner or having “inadequate” knowledge of Islam. The relevant clauses 62(d) and (e), respectively, are: “he is of good character and is not commonly known as one who violates Islamic injunctions” and “<a href="http://tribune.com.pk/story/532249/ruthless-scrutiny-keeps-candidates-on-their-toes/" target="_blank">he has adequate knowledge of Islamic teachings and practices obligatory duties prescribed by Islam as well as abstains from major sins</a>”. In a situation where adequacy of knowledge of Islam is not defined and the distinction between major and minor sins not clarified within the terms of the Article, there have been reportedly cases where candidates have been asked questions pertaining to formal aspects of religious observance and, in some cases, advised to wear a beard. This approach signifies the dogmatism and divorce of religion from its spiritual basis that characterised the cynical use of religion as an instrument of tyranny by General Zia. It also underlies the intolerance and violence of the extremists in the contemporary period. Bereft of love that is essential to religion, the extremist finds no contradiction between intoning words of prayer and wearing a beard while killing innocent human beings.</p>
<p>Suheyl Umar, scholar and religious leader, in an important paper in a forthcoming publication has argued how dangerous the misuse of religion can be: “Each of the wisdom traditions of the world or world faiths identifies idolatry as the most radical distortion and corruption of human life … the most insidious forms of idolatry are explicitly religious, distorted ways of identifying God or trying to harness God to one’s own cause.” He goes on to suggest that Iqbal considered love, tolerance and humanity as vital to an individual’s journey to God. He quotes a verse from Iqbal’s <i>Javid Nama</i>:</p>
<p>“ … The disbeliever and the believer are alike creatures of God/ Humanity, human respect for human reality/ Be conscious of the station of humanity/ The slave of love who takes his path from God/ Becomes a loving friend of both disbeliever and believer”</p>
<p>One of the great sages in the Islamic tradition, Jalaluddin Rumi, says (in a rendering by Andrew Harvey):</p>
<p>“Tell the night our day has no night/ Our religion no law but love/  Love is this shoreless sea/  We drown in saying not a word”</p>
<p>Martin Lings, the great Muslim scholar and shaikh, has argued that religion (containing the letters ‘lig’) is the ligament with God. He suggests that in both Western and Eastern religious traditions, the heart is the instrument of experiencing the transcendent. So, it can be argued that the ligament with God is established through the loving heart. In fact, every <i>sura</i> of the Holy Quran starts with the <i>Bismillah</i>: “In the name of Allah, the Beneficent, the Merciful.” Allah’s Mercy is manifest in all of His creation and the numberless blessings He has bestowed upon humankind. The Mercy of Allah comes not from pity but from love, as Syed Reza has argued in his brilliant commentary on Sura Fatihah.</p>
<p>In Sura Al An’am, of the Holy Quran, we are shown that the very mode of governance inscribed by God is Mercy. So, it is that God connects with humankind through love. Humans, in turn, can connect with God through adoration. God says in Surah Al Baqarah of the Holy Quran to adore Him — He who created us and those before us — so that we may become righteous.</p>
<p>If a person is in a state of adoration of God, righteous action in society will flow naturally from such a sensibility. Thus, love is a means of experiencing the transcendent as well as a form of being in this world. The state cannot intrude into this intimate connection between the individual and God.</p>
<p><i>Published in The Express Tribune, April </i><i>8<sup>th</sup>, 2013.</i></p>
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			<media:title>Dr Akmal Hussain New</media:title>
			<media:description>The writer is Distinguished Professor of Economics at Forman Christian College University and Beaconhouse National University</media:description>
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		<title> The IMF and economic revival</title>
		<link>http://tribune.com.pk/story/529140/the-imf-and-economic-revival/</link>
		<pubDate>Sun, 31 Mar 2013 18:30:27 +0000</pubDate>

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			<p><p>Even as the interim government is in the throes of warding off terrorists to be able to hold elections, it will have to conduct preliminary discussions with an International Monetary Fund (IMF) delegation that is expected in Pakistan soon. Ideally, the IMF ought to begin the negotiation process for another Standby Credit Facility (SCF) with the new government after the election. But given the urgency of Pakistan’s need and the time required to finalise the agreement, it may be necessary for the finance minister of the interim federal government to be sent in to bat. Let us outline the state of play.</p>
<p>Pakistan needs to, clearly and with adequate analytical rigour, lay out the guiding principles of the negotiations. First, the economy must pull up from its present nosedive and revive GDP growth to the cruising level, the trend rate of five per cent.</p>
<p>Second, such acceleration in growth has to be integrally related with policies for a more equitable income distribution. The evidence shows that the more equitable the distribution of income, the greater the magnitude of poverty reduction for a given GDP growth rate.</p>
<p>So, the aim of economic policy for Pakistan is a new structure of the growth process that enables growth by the people and for the people. Such an economic structure will provide the necessary scaffolding for strengthening democracy.</p>
<p>Third, the control of the fiscal and balance of payments deficits, respectively, cannot be achieved through the standard IMF recipe of economic contraction. A further reduction in GDP growth would, in fact, increase the fiscal deficit through lower revenues and increase the balance of payments deficit through a reduction in exports. Slower growth would also increase poverty and unemployment, thereby placing an unbearable stress on the fragile democratic edifice.</p>
<p>Fourth, on the issue of negotiating a target budget deficit, let us for once give the IMF a commitment that we can fulfil. On the last occasion, our bureaucracy proposed four per cent of GDP as a budget deficit target when the IMF, I understand, was willing to live with 7.5 per cent. Let us not damage our credibility with such empty-headed heroism. Of course, the government ought to commit to changing the composition of the budget deficit: a drastic reduction in unproductive expenditure involving a smaller, more austere government; elimination of the plethora of tax exemptions; improving tax collection; ending government trading in food grain, which is locking up hundreds of billions of rupees; a proper property tax at the provincial level and a tax on services. But development expenditure must be increased from the present one per cent of GDP to the traditional seven per cent of GDP and focus on reducing the physical constraints to growth: electricity, gas and irrigation water.</p>
<p>This new SCF agreement will not bring fresh cash from the IMF. It will only reschedule the imminent seven billion dollar debt repayment to the IMF that currently the country cannot afford to pay. So, this time, we need to negotiate on the basis of Pakistan’s interests, sound economic reasoning and above all, honesty.</p>
<p><i>Published in The Express Tribune, April </i><i>1<sup>st</sup>, 2013.</i></p>
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			<media:title>Dr Akmal Hussain New</media:title>
			<media:description>The writer is Distinguished Professor of Economics at Forman Christian College University and Beaconhouse National University</media:description>
			<media:thumbnail url="http://i1.tribune.com.pk/wp-content/uploads/2013/03/529140-DrAkmalHussainNew-1364747598-938-160x120.jpg" width="160" height="120" />
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		<title> Governance challenges ahead</title>
		<link>http://tribune.com.pk/story/525777/governance-challenges-ahead/</link>
		<pubDate>Sun, 24 Mar 2013 15:59:04 +0000</pubDate>

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			<p><p>The completion of the full term of an elected government and the prospect of its replacement through <a href="http://tribune.com.pk/elections2013">an election</a> is a landmark in Pakistan’s struggle to establish democracy on a sustainable basis. The immediate challenge is to achieve at least a modicum of public order necessary for conducting credible polls. This will require the interim government to establish a command and control system that integrates security agencies, and provincial and metropolitan governments to develop a quick response capability for preventing and combating terrorist attacks in major cities. The danger of extremist groups under the Taliban-al Qaeda umbrella mounting simultaneous attacks in urban centres — aimed at political destabilisation of the country — should not be ignored. Beyond the elections, a raft of challenges on the security, economic and diplomatic fronts await the new elected government. Let us briefly outline them.</p>
<p>The most important challenge is to develop and systematically implement a strategy to confront violent extremism. The ongoing widespread violence is being conducted by organised militant groups, some of whom seek to overthrow the constitutional order to establish their version of a caliphate. This is a threat not just to democracy in Pakistan but the very existence of the state. Therefore, re-establishing order and securing the state ought to be the primary goal of the new government. In this regard, it is important to understand that in a situation where the enemy has inflexible aims and is apparently gaining ground, appeasement is not an effective approach. It is reminiscent of <a href="http://en.wikipedia.org/wiki/Neville_Chamberlain">Neville Chamberlin</a>’s assurance of “peace in our times” after signing the Munich Pact with Hitler in 1938. It only gave time to the Nazi dictator, and war, not peace, followed.</p>
<p>The second important challenge is to revive the economy and undertake the necessary reforms in the institutional structure to place the economy on the path of sustained growth with equity. Reviving the economy cannot be done simply by trying to control the budget deficit through a further cut in development expenditure. This would only deepen the recession and, in fact, make the budget deficit worse due to the lowering of government revenues associated with slow GDP growth. The task is to drastically reduce unproductive expenditures and increase allocations for and the efficiency of public sector development programmes. Development expenditures have historically been a stimulus to the economy as well as an important redistributive mechanism to cushion the poor from the economic inequalities that the market mechanism tends to generate. The public sector development programme of the new government ought to focus on releasing the physical constraints to GDP growth: electricity, gas and irrigation water. At the same time, a medium-term programme needs to be undertaken, with the support of the people of Balochistan, to convert into income flows the fabulous mineral wealth that lies untapped underground. Utilising the world’s largest copper deposits and the second largest gold deposits — apart from substantial gas and possible oil deposits — would be a major step towards prosperity. Finally, perhaps, the most important economic initiative would be to shift Pakistan from an extractive institutional structure configured to generate rents for the elite to a competitive, open-access institutional structure. This would begin to provide opportunities of quality education, health, investment and innovation to all citizens rather than only a few. Such an economy would form the basis of achieving a higher and sustained growth through equity. Growth that is by the people and for the people would not only create broad-based economic welfare but it would also sustain democracy.</p>
<p>The third dimension of the governance challenge is to help build a regional environment that enables Pakistan to achieve economic development, peace and a strengthened democracy. This involves managing, in cooperation with Afghanistan, the post-US withdrawal phase to prevent turmoil and violence that could further fan the flames in Pakistan. At the same time, Pakistan will need to manage internal terrorism, as well as the emerging water scarcity in a cooperative rather than a conflict mode.</p>
<p><i>Published in The Express Tribune, March </i><i>25<sup>th</sup>, 2013.</i></p>
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			<media:title>Dr Akmal Hussain New</media:title>
			<media:description>The writer is Distinguished Professor of Economics at Forman Christian College University and Beaconhouse National University</media:description>
			<media:thumbnail url="http://i1.tribune.com.pk/wp-content/uploads/2013/03/525777-DrAkmalHussainNew-1364138178-947-160x120.jpg" width="160" height="120" />
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		<title>Spreading fires</title>
		<link>http://tribune.com.pk/story/522239/spreading-fires/</link>
		<pubDate>Sun, 17 Mar 2013 20:34:32 +0000</pubDate>

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			<p><p>There was a demolition by organised extremists of the homes of Ahle Bayt Muslims, while they were inside, in Quetta and Karachi. More recently, <a href="http://tribune.com.pk/story/518244/alleged-blasphemy-mob-burns-100-christian-homes-in-lahore/" target="_blank">Christian homes in Lahore were set on fire by a mob</a> after the residents were forced to flee. What is clear in each case is that the state, whose essential function is to provide security for life and property to its citizens, failed to do so. Amidst this horror, there was poignancy in the way the victims responded. In contrast to the inhumanity of the perpetrators and the indifference of the state was the humanity and fortitude with which the innocent citizens faced those terrible moments. As the multistorey buildings collapsed, ordinary people rose heroically to provide care for the injured. In the Badami Bagh mob attack, Christians were forced out of the locality as their homes were set on fire. The pain of the politically powerless was matched by the moral strength of their response. Each one of my Christian students and the friends I met bore the suffering with a majestic dignity. In some churches of Lahore, they reportedly prayed that God may give guidance to those who had torched their houses and violated the sanctity of their homes. There was no rancour; the response to hate was love. It was a moving testament of faith.</p>
<p>The observed acts of terror in some of the main cities of Pakistan are integrally related to an emerging extraconstitutional system of power, governance and the mobilisation and allocation of resources. Armed militant groups have donned various sub-national identities as a means of fuelling emotions of their cadres to engage in urban warfare. These armed groups are fighting for power and resources within their exclusive geographic domains in cities such as Karachi. In the area that each militant group seeks to control, public or private land is illegally occupied, a system of regular financial extortion from individuals and firms in return for providing security is established, and the official state apparatus as well as competing armed groups are held at bay with armed force.</p>
<p>At the same time, the capacity of the state to wield state power in a systematic way for law enforcement has been considerably weakened. In such a situation, some of the mainstream political parties surreptitiously maintain armed wings to pursue “politics by other means”. Some nurture links with extremist groups to gain political influence and a share of the resources that these groups control. A growing stratum of an informal economy and extralegal political power is under contention in urban Pakistan within a nexus of extremist non-state entities, political parties and local officials. This could be a significant factor in the difficulty the state is facing in exercising state power through a centralised and integrated structure. Consequently, significant geographic and economic spaces in major cities are being ceded to armed groups. Order — when it exists — is achieved through informal and fragile agreements between these non-state entities rather than through the authority of the state.</p>
<p>Time was when the state and the lives of citizens were being defended in the valleys of Fata. Now, it is in the main cities of the country that the writ of the state has to be defended and citizens protected. This is an important challenge as Pakistan is becoming rapidly urbanised and a large proportion of the urban population is concentrated in big cities. <a href="http://tribune.com.pk/story/118469/new-growth-strategy-old-pitfalls/" target="_blank">The New Growth Framework</a> prepared by the Planning Commission under the leadership of Dr Nadeemul Haque is, in many ways, a historic document. It gives a vision of vibrant cities and harmonious communities that would — through enterprise and innovation of the youth — give dynamism to commerce and industry. Such an urbanised economy, fuelled by innovation and productivity increase, the report imagines, would place Pakistan on a path of sustained economic growth. But such a vision will remain a distant dream if cities are fragmented into domains of power and pelf that are controlled by competing armed groups while state authority gets eroded. For cities to become the new engines of growth, public order and rule of law are necessary — not the spreading fires of anarchy.</p>
<p><i>Published in The Express Tribune, March </i><i>18<sup>th</sup>, 2013.</i></p>
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			<media:title>Dr Akmal Hussain New</media:title>
			<media:description>The writer is Distinguished Professor of Economics at Forman Christian College University and Beaconhouse National University</media:description>
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		<title>A civilisation silenced</title>
		<link>http://tribune.com.pk/story/518778/a-civilisation-silenced/</link>
		<pubDate>Sun, 10 Mar 2013 18:43:46 +0000</pubDate>

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			<p><p>The people who inhabit Pakistan today are facing paroxysms of violence, brutalisation of culture and economic deprivation of a scale and intensity rarely seen in the history of this ancient land. Almost half the people suffer from food insecurity today in the Indus Valley, which has produced food surpluses for four millennia. There is a hydroelectric power potential of 40,000 megawatts in the main rivers alone, yet the country faces crippling power outages. At the same time, armed groups whether sectarian, religious or ethnic, are engaged in the large-scale slaughter of citizens. The humanity that was nurtured by diverse cultures in creative interaction has been drained from the narrowed persona of the extremist. As polarised singular identities are constructed, Muslims who in the sectarian narrative are considered Shias are being subjected to a systematic extermination that can only be called genocide. This is being done by groups who claim allegiance to Islam, which actually forbids formation of sects and considers the killing of even one human being as tantamount to killing all of humanity. Those who seek to establish a caliphate here think nothing of shooting girls going to school or health workers trying to administer polio drops to infants. Amidst this outrage, the government and its security apparatus have shown a remarkable inability to provide security of life to the citizens. Consequently, a pervasive fear grips Pakistan’s society. Bigotry, intolerance and hate move to centre stage. The voice of love, reason and human solidarity that resonates in our literature, music and folk cultures is being lost in the wilderness of barbarism. A civilisation is being silenced.</p>
<p>British historian Arnold Toynbee, in his monumental work on world history, has argued that the rise and fall of civilisations hinges on the way they deal with existential challenges. If a nation or civilisation can articulate the challenge it confronts and is able to bring out its best in overcoming it, then such a civilisation flowers and prospers. If it fails to do so, the civilisation perishes. Pakistan stands at such a critical juncture today. It is a crisis of state power in that the state has so far not been able to establish order, subdue armed groups that seek to overthrow its constitutional authority and control widespread violence. The crisis of the state, however, is inextricably linked with the economy which, as it is presently structured, is incapable of providing the minimum conditions of dignified life to the majority of the people; it is also linked to society which has become increasingly polarised, subject to false ideological constructs and alienated from the core human values which gave it cohesion and resilience. So, given the depth and multifaceted nature of Pakistan’s crisis, the process of overcoming it will involve drawing upon the wisdom, values and strength of its civilisation.</p>
<p><a href="http://en.wikipedia.org/wiki/Bulleh_Shah" target="_blank">Bulleh Shah</a>, the great Punjabi Sufi poet (late 17<sup>th</sup> to mid-18<sup>th</sup> century), spoke of a turning point in his time: “It was when the epoch turned that I discovered the secrets of the beloved” (translated). The beloved here is the deepest part of the self where the self and the other are part of the same unity. The Punjabi Sufi poets, as indeed the Sufis of Balochistan, Khyber-Pakhtunkhwa and Sindh, articulate that unity underlying the diversity of cultures in this region and the cohering sensibility of a pluralistic society. The wisdom that resonates in the surging waters of the Indus and echoes in the mountains of Khyber-Pakhtunkhwa as much as in the deserts of Sindh and Balochistan, is that the ligament that connects humans with the transcendent is love. It is woven into the fabric of individual being. Love is manifested in social existence in the form of justice, equity and the pursuit of truth and beauty.</p>
<p>Addressing the current crisis involves uniting state organisations and bringing to bear state power to provide justice to those who massacre innocents. It means building an economy that draws its dynamism from equity and the talents of all citizens rather than a few. It will also require rediscovering the wisdom and the values emanating from the shared civilisational wellsprings of a diverse society.</p>
<p><i>Published in The Express Tribune, March </i><i>11<sup>th</sup>, 2013.</i></p>
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			<media:title>Dr Akmal Hussain New</media:title>
			<media:description>The writer is Distinguished Professor of Economics at Forman Christian College University and Beaconhouse National University </media:description>
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