Surviving democracy

Two dangers that lurk for our democracy: shadowy intelligence outfits and inability to finance governmental operations

The Public Accounts Committee was recently jolted into awareness by the federal finance secretary. According to a report in this newspaper by Shahbaz Rana (‘Rs5.5b secret funding to intelligence outfit’, Sept 22), a payment of Rs5.5 billion was made to the ISI in fiscal year 2007-2008 under a supplementary grant, which means it was a one-time expense outside of the normal budget for the agency. When pressed by committee members to explain what this payment was for, the finance secretary is reported to have said that it was a “highly sensitive” payment and could not be discussed in an open forum.

What on earth was this money used for? The finance secretary is reported to have said “strategic dictates” required it. The money was transferred, according to the Accountant General of Pakistan Revenue, a few months before the general elections of 2008. But is that all we’re going to find out about this? Just like this was no ordinary payment, that was no ordinary year.

Fiscal year 2007-2008 began on July 1, 2007 and ended on June 30, 2008 like every fiscal year does. The first half saw the dramatic sinking of the ship of Musharraf’s power and the second half saw the emergence of a shaky coalition government following an assassination and an election. That year also saw the abandonment of a peace agreement by the Taliban, the formation of the Tehreek-i-Taliban Pakistan and the resumption of large-scale terrorist hostilities across Pakistan as a backlash against the Lal Masjid operation. What a crucial year that was! Hostilities and uncertainty on every front, with the war on terror simmering along our borders and in our cities and the ticking clock of an approaching election.  In those tumultuous days, “strategic dictates” must have spoken a very complicated language.

In the same meeting, the committee was informed that Pakistan’s debt, both domestic and international, had risen to nine trillion rupees, more than 60 per cent of our GDP. A large part of this mountain of debt has been acquired over the past two years, since November 2008 to be precise, when Pakistan entered into an $11.2 billion IMF programme. Undoubtedly, the beginning of an economic crisis was amongst the ugly inheritance left behind for this government by the outgoing Musharraf regime. Undoubtedly also, the global financial crisis had its way with us, in spite of our best attempts to deny it. Every country in the world has seen its debt levels soar over the past two years as they have struggled to deal with the consequences of the recession that followed the global financial crisis of late 2008, with some debt-to-GDP ratios being much higher than they are in Pakistan.

But there is another direction in which to look. Consider, for instance, that Pakistan has seen four finance ministers since the formation of the government in March 2008. This level of turnover in one of the most critical ministries tells us something. For one, it says that managing the economic crisis the government inherited was never a big priority for them. Starting from when the new president famously demanded 100 billion dollars for his treasury, all the way down to Holbrooke’s visit last week, one thing has been clear about the game that is being played between the present government and its creditors, benefactors and well-wishers abroad. That Pakistan reflexively asks for money from the rest of the world. And the world will not give. Period. So, instead of raising our own resources, we borrow from our banks. And this game will continue until Pakistan learns to give priority to its economic issues, chief amongst which is our inability to finance our government from our own resources.

Between these two pieces of information, the Public Accounts Committee has been informed of the two biggest dangers that lurk for Pakistan’s fledgling democracy: shadowy intelligence outfits and a growing inability to finance our governmental operations.

Published in The Express Tribune, September 23^rd, 2010.