Every year, the day comes and goes by. This year the Pakistani nation should celebrate Defence of Pakistan Day (Sept 6) as a day of introspection. Let us do some soul searching. India is arming itself to the hilt. Despite economic setbacks due to Covid 19, Indian economy has stayed put. They do not have to go country to country with a begging bowl.
On this day, we should take stock of Pakistan’s geo-political environment. What is the plight of the weak Muslim countries? How remorselessly their territorial integrity was trampled by a super power for not toeing the line. India is arming its land and marine forces to the hilt. She is refurbishing its old assets and stockpiling new equipment. India’s Defence Acquisition Council convened by Defence Minister Rajnath Singh delegated powers to the forces to procure equipment worth up to ‘300 crore under the emergency clause, which does away with the lengthy procurement process that can drag on for years.
Here is a bird’s eye view of India’s arms build-up.
Vikrant aircraft carrier
With the $3 billion Vikrant, India will join only a small number of nations with more than one aircraft carrier or helicopter carrier in service. It has become the third country, after the UK and China, to have commissioned a domestically built aircraft carrier in the past three years.
John Bradford, senior fellow at the S. Rajaratnam School of International Studies in Singapore, said India’s commitment to the ship reflected its “long-term vision to maintain a world-class naval force.”
“There are looming questions about the survivability of any carrier in the missile age, but major navies, including those of the US, Japan, China and the UK, have doubled their carrier investments.
The Vikrant is India’s first domestically built aircraft carrier. It joins the carrier INS Vikramaditya, a refurbished Soviet-era carrier bought from Russia in 2004, in India’s fleet.
With a displacement of around 40,000 tons, the Vikrant is slightly smaller than the Vikramaditya and the carriers of the US, China and UK though it is larger than Japan’s.
But analysts praised its potential firepower.
When its air wing becomes fully operational over the next few years, it will carry up to 30 aircraft, including MiG-29K fighter jets to be launched from its ski-ramp style deck, and helicopters as well as defensive systems including surface-to-air missiles.
Powered by four gas turbine engines, its top speed is estimated at 32 mph (52 kph) with a range of 8,600 miles (13,890 kilometers). India’s message to its neighbours is “India has the power, it has the aircraft carriers and therefore the air power to dominate the distant reaches of the Indian Ocean”.
The Vikrant has a range of 8,600 miles (13,890 kilometers).
Besides, India is balding Scorpion submarines (costing Rs 20,000 crore) with 11,000 km range being built in India. These subs can stay at sea for 50 days and can carry missiles, mines and torpedoes to attack surface vessels.
India has eight P-3C Orion long-range maritime patrol aircraft, costing Rs 13000 crore. They can fly 4,000 km, stay airborne for 12 hours and attack surface targets with missiles or patrol coastline. Add to it procurement of Rafael jets from France.
India has 14 mobile multiple rocket launchers which can carpet bomb targets 90 km away. One hundred air defence missiles, costing over Rs 4,000 crore, to shoot down enemy aircraft. Four hundred 155 mm self-propelled guns, costing over Rs 3,200 crore. These are howitzers on tank chassis. They also include wheeled and towed variants like Bofors howitzers. They provide mobile fire cover for advancing infantry by hitting targets 90 km away.
Backed up by nuclear cooperation with the USA, India wants to increase its store of thermo-nuclear bombs manifold. To achieve this aim, it wants to set up new breeder reactors. India has told the USA point-blank that ‘it would not put its breeder reactors under International Atomic Energy Agency’s safeguards’. Already, a 13 MWe Fast Breeder Test Reactor is operational at the Indira Gandhi Centre for Atomic Research (IGCAR) at Kalpakkam. Another 500 MWe Prototype Fast Breeder Reactor is also under construction here. India’s Department of Atomic Energy built four more breeder reactors of 500 MWe capacities.
India has enhanced its cooperation with France in breeder-technology development. Interestingly, France surreptitiously stepped in to supply enriched uranium for the Tarapur-1 and 2 reactors when the U.S. stalled contractual supplies after Pokhran-1 test explosion. Capacity of Kalpakkam fast breeder reactor has been increased from 13 MWe to the 500 MWe.
Breeder reactors develop nuclear energy first by using thermal reactors to produce plutonium and, then using the plutonium with depleted natural uranium, produce more plutonium in the fast breeder reactors. Besides India and France, Russia, Japan, and China have an active interest in fast breeders. Pakistan’s upcoming facility at Khoshab has been blown out of proportion in international media. But, India’s nuclear enrichment activities are not in focus.
Rising defence outlays
Each year India increases her defence budget manifold to strengthen her nuclear and conventional warfare capabilities. India believes that Pakistan will continue to be forced to increase her defence expenditure each time India increases her defence expenditure.
India’s assessment is that if she spends 2.5 per cent of her gross Domestic Product on defence, Pakistan would have to spend 13 per cent of GDP to match the Indian military budget in absolute size, Pakistan’s economy being 19 per cent the size of India’s economy. In India’s strategic estimation, even with stable economic growth, Pakistan could only afford to allocate 6.5 per cent of its GDP to defence. A higher allocation would sap resource potential for sustained growth in future. India thinks Pakistan has to choose between Scylla and Charybdis that is economic collapse or defence preparations (same quandary as of former USSR).
Will every new baby be born in Pakistan indebted forever? We consume debts as if they were freebies. We made no effort to get our “odious debts” written off.
Pakistan’s debt burden has a political tinge. The USA rewarded Pakistan by showering grants on Pakistan for joining anti-Soviet-Union alliances (South-East Asian Treaty Organisation and Central Treaty Organisation). With advice from a Harvard group of economists, Ayub Khan tried to steer the economy in a planned and prioritized manner. A Perspective and five-year plans were drawn up, implemented and evaluated after the due period. The less said about the subsequent period, the better.
The grants evaporated into streams of low-interest loan which ballooned as Pakistan complied with forced devaluations or adopted floating exchange rate. Soon, the donors forgot Pakistan’s contribution to the break-up of the `Soviet Union’. They used coalition support funds and our debt-servicing liability as `do more’ mantra levers.
In economics there are burden-of-debt models that could help decide how productively the debt should be so used that both principal and debt-service could be repaid. Unfortunately we spent the debt as if it were a non-repayable windfall bonanza.
Apparently, all Pakistani debts are odious as they were thrust upon praetorian regimes to bring them within anti-Communist (South East Asian Treaty Organisation, Central Treaty Organisation) or anti-`terrorist’ fold.
Several IMF and US state department delegations visited Pakistan. But, Pakistan could not tell them point-blank about non-liability to service politically-stringed debts. The government’s dilemma in Pakistan is that defence and anti-terrorism outlays (26 per cent) plus debt-service charges leave little in national kitty for welfare. Solution lies in debt forgiveness by donors (James K. Boyce and Madakene O’Donnell(eds.), Peace and the Public Purse.2008. New Delhi. Viva Books p, 251).
What a pity! Whenever the International Monetary Fund’s delegation’s visit, Pakistan’s representatives keep mum about the politically-motivated odious nature of our debt burden. They lack the nerve to tell them point-blank Pakistan’s non-liability to service politically-stringed debts. They government’s dilemma in Pakistan is that defence and anti-terrorism outlays plus debt-service charges leave little in national kitty for welfare. Solution lies in debt forgiveness by donors (James K. Boyce and Madakene O’Donnell (eds.), Peace and the Public Purse.2008. New Delhi. Viva Books, p. 251).
Benefits of Write-Off: Debt forgiveness (or relief) helps stabilise weak democracies, though corrupt, despotic and incompetent. Research shows that debt relief promotes economic growth and boosts foreign investment. Sachs (1989) inferred that debt service costs discourage domestic and foreign investment. Kanbur (2000), also, concluded that debt is a drag on private investment.
Political parties without economic agenda
Parties win elections by pandering to base sentiments of the people. A key element of election slogans is always ‘change’. But, the nitty-gritty of the ‘change’ remains a strictly guarded mumbo jumbo. Sincerity demands that the parties should spell out their policies with regard to various factors of production, i.e. land, natural resources, the socio-economic milieu, labour, capital and organisation. But, they keep mum about their agenda. In their hearts, the leaders knew that the voters have little choice. They would vote either for the charisma of one leader or against the hatred of another. The voters do not force the leaders to give a dispassionate perception of the country’s problems along with an inventory of prioritised solutions.
Intellectual apathy has been the hallmark of elections. There is no tradition of political parties having shadow cabinets with a bagful of alternative policies.
The taxation proposals do little to squeeze the haves. Nothing is done to reduce inequitable distribution of wealth and economic power. No heed is paid to the structure of our society. How did the filthy rich, the feudal lords and the industrial robber barons come into being? If accumulated wealth in a few hands is rooted in wrongdoing, a considerable chunk of it should be mopped up. Vested interests resist the change.
The British created a class of chieftains to suit their need for loyalists, war fundraisers and recruiters in the post-‘mutiny’ period and during the Second World War. A royal gubernatorial gazetteer states: “I have for many years felt convinced that the time had arrived for the Government to try to introduce some distinction for those who can show hereditary services before the Humble Company’s rule in India ceased. I have often said that I should be proud to wear a Copper Order, bearing merely the words ‘Teesri pusht Sirkar Company ka Naukar’ (Third generation Company’s servant).” A feudal aristocracy was created whose generations ruled post-independence governments. Some pirs and mashaikh (religious leaders) even quoted verses from the Holy Quran to justify allegiance to the Englishman (amir), after loyalty to Allah and the Messenger (PBUH). They pointed out that the Quran ordained that ehsan (favour) be returned with favour. The ehsan were British favours like titles (khan bahadur, nabob, etc), honorary medals, khilat with attached money rewards, life pensions, office of honorary magistrate, assistant commissioner, courtier, etc. A Tiwana military officer even testified in favour of O’Dwyer when the latter was under trial. Ayub Khan added the chapter of 22 families to the aristocracy, a legacy of the English Raj.
About 460 scions of the pre-partition chiefs along with industrial barons created in the Ayub era are returned again and again to the Assemblies. They do not allow agricultural incomes, industrial profits or real estate to be adequately taxed.
Economic advisor’s view of the economic malaise
In his book Growth and Inequality in Pakistan: Agenda for Reforms (pages 383 to 403), Hafiz A. Pasha has unwound the tangled skein of Pakistan’s economic malaise. He laments that income-and-wealth-tax rules and regulations are so drafted as to facilitate `state capture by the elite’.
The tax-concession-and-exemption laws” give special privileges to different vested interests. The privileges are in the form of “preferential excess to land, bank credit, etc, which facilitate faster accumulation of assets”. He visualises “elite “as “the conglomeration of rich powerful people in society”. Among the “elite state captors”, he includes “large land-owners, defence establishment, multinational companies, urban property developers, and owners, and so on” (page 383, ibid.).
Health-care and education
Why have successive Pakistani governments failed to provide universal healthcare and education to their people? There are several points to ponder.
Pakistan’s healthcare system is in shambles. There is only one hospital for federal civil servants that are Federal Government “Services” Hospital. Instead of establishing new hospitals. The successive civil governments allowed non-employee civilian residents of Rawalpindi and Islamabad and those who happen to have CNICs of the said cities to get free treatment at the said hospital. Because of overcrowding, the hospital has become good for nothing for civil servants.
Elderly civil centres have to queue up with unauthorised non employee civilians. There are no separate queues for “civil servants”. Doctors give preferential treatment to non-employees who pay them hefty fees at their private clinics. Civil servants are given long dates for operation theatre procedures. I, for one, am a septuagenarian retiree with cumulative 40 years service. I have been directed to wait for next year to get operated by urologist. The FGSH is the only hospital in the world where beds have been allocated to doctors whose names are printed on walls. The lavatories stink. Essential medicines are unavailable.
Even senior civil servants with a lifetime of service have to stink in general wards. The officers’ wards are allotted to non-civil-servants who have a way with the muckraker doctors. There is a need to transfer non-employee patients to nearby PIMS hospital. Or non-employees should be treated as private patients. A thorough probe into hospital funds, medical procurements and unethical practices by doctors is warranted.
The politically expedient burden of residents of Rawalpindi/Islamabad on Federal Government Services Hospital should be taken off.
The ‘civilian officers, serving and retired, paid out of defense services’ should be impaneled to the military (CMH/AFIC) to reduce the FGSH patient load. A revolving fund may be created to entitle them and their families for 7/24 treatment subject to payment of contributory share to a revolving fund or actual expenses payable by a patient.
No healthcare system, not even the US ‘system’, in the world is perfect. Yet, each, by and large, delivers the goods. The familiar medical system of wealthy countries is the Bismarck model (multi-payer health-insurance model), the Beveridge model, the National Health Insurance Model, the out-of-pocket model, and the US model. The government should pick up good points of medical systems of wealthy and poor countries alike. The Bismarck model is being followed in Belgium, France, Germany, Japan, and Switzerland.
Generally, healthcare providers in this model are private entities. The government neither owns nor employs most physicians. Health insurance also is provided by private companies, not by the governments. Governments strictly regulate costs and other aspects of healthcare (no arbitrary fees and fleecing). The US outspends its peer nations on health. Yet it has no universal health insurance, nor universal health coverage.
Thailand’s successful healthcare plan reflects three lessons: being prepared, exercising tight control, and being pragmatic and politically broadminded.
Thailand took opposition and other stakeholders aboard. As such, the plan remained intact despite the change of governments. Thailand’s per capita income, health expenditures, and tax base are comparable to India. Yet, it achieved universal healthcare in 2002.
It spends around four percent of its Gross Domestic Product on health. In Thailand, the out-of-pocket medical expense has fallen to 12 percent, as compared to 40pc to 60pc percent in wealthy countries. The proportion of children dying in the first five years of life fell to less than 1.2 percent.
Pakistan is doubtlessly an Islamic republic, but not a theocracy, as envisioned by the founding father Mohammad Ali Jinnah. AK Brohi has in his The Fundamental Law of Pakistan highlighted the contours of a theocracy very well. The Islamic preamble (Objectives Resolution) was inserted in the draft constitution under Pakistan’s prime minister Liaquat Ali Khan’s influence. Unlike the US and many other secular constitutions, the Objectives Resolution (now Preamble to 1973 Constitution) states sovereignty belongs to Allah Almighty. The golden words of the constitution were warped to continue an interest-based economy. We pay interest on our international loans and international transactions. Do we live in an interactive world or in an ivory tower?
The Security and Exchange Commission of Pakistan enforced Shariah Governance Regulations 2018. This regulation is a follow-up to Article 38 (f) of the Constitution of Pakistan, and Senate resolution No. 393 (July 9, 2018) for the abolition of riba (usury).
The regulation is welcome but there are unanswered questions about the Islamisation of finance in Pakistan. We pay interest on our loans and international transactions. Let Pakistan face the truth. It needs to evolve and showcase a politico-economic model of Islam that is compatible with international practices. Or else, dispense with hypocritical patchwork, and go for the secularist IMF model. What is the justification of the top-heavy paraphernalia of a civil government if it can’t even provide healthcare and education to its people?
Future trading is a hub of modern commerce. Yet, it is forbidden under Islam. Islamic law of contract does not even allow advance contracts concerning raw fish, fruit, or anything involving an element of uncertainty. Islam does not allow even tallaqi-ur-rukbaan buying camel-loads of goods from the caravan before they reached Madina open-market.
Converting consumerist Pakistan into a productive economy
Let China help expand Pakistan’s manufacturing capacity and thereby reduce unemployment in Pakistan. All policymakers should act in unison. They include policy formulators (prime minister, finance minister, et. al), policy detailers (chief economic adviser, statisticians), and technocrats. The policy-makers should decide upon a balance of priority, agriculture or industry, a “closed” economy with import substitution, “living within means” and a balanced budget or deficit budget. Will increased spending “crowd in” or “crowd out” private investment?
Monetary policy objectives and the role of the central bank stability of employment and inflation, growth rate, balance-of-payments issues, the role of foreign direct investment and non-bank financial institutions? Their impact on capital formation, consumption trends, and other macroeconomic aspects.
Building Kalabagh and other dams
The first priority of most countries, including the USA, Russia, Brazil, and China, was to build hydel projects, a clean source of energy.. China’s big push into industrial progress was due to a chain of hydel projects like the Three Gorges, Gezhouba, Xiluodu, Xiangjiaba, Longtan, Hengshui, Nuozhadu, Jinping-I and II, Yalong, Laxiwa, Xiaowan, Goupitan, Guanyinyan, and Ahai.
The Kalabagh Dam Project was approved by the Technical Committee on Water Resources 2003-2005. It was composed of eight technical experts, two from each province. To store monsoon flows of the upper reaches of the Indus River, they approved the project. The committee looked into all aspects including the effect of dilution of seawater with freshwater, seawater intrusion into the groundwater, riverine irrigation, and forest fisheries, besides the growth of Mangrove forests. Later, the 3500 megawatts KBD was approved by the World Bank Indus Special Study Group in its report titled Development of Water and Power Resources of Pakistan: A Sectoral Analysis (1967).
The estimated cost of constructing the dam was US$6.12 billion, over six years from 1977 to 1982. After the commissioning of the Tarbela Dam in 1976, the dam could have been built in six years by 1982. The cost per unit of 12 billion units the hydel electricity was Rs.1.5 as compared to Rs. 16.5 per unit from thermal sources. We are losing Rs. 180 billion per year due to ten times costlier production (12billion xRs.15 billion). Add to it loss of US$ 6.12 billion per annum due to the superfluous flow of 30 Million Acre Feet of water from Kotri Barrage into the Arabian Sea (one MAF valued at US$1-1.5 billion).
Our water resources reserves have not risen pari passu with growth in population. Three provincial assemblies resolved against building the KBD. A politician alleged the dam would convert Sindh into a desert. Apprehensions against the dam could be allayed by reviewing Water Apportionment Accord (as directed by Lahore High Court also vide its Order dated November 29, 2012, case no. WP 8777). No justification to kill the goose that lays the golden eggs.
We could learn a lot from the planning and development experience of the Ayub era. Is it fair to devolve dam building to provinces? Pakistan has abolished interest (riba) in accordance with its fundamental law. Yet its banking sector and international transactions are interest-based.
To make Pakistan strong, its citizens should contribute their moitié.