19 August Speech of Prime Minister Nawaz Sharif

The nation was looking for strategic direction. In the three problems identified, the direction was wrong in all three.

By Usman Khalid

http://www.rifah.org/site/19-august-speech-of-prime-minister-nawaz-sharif/

Finance Minister Ishaq Dar - his policies have been the undoing of many administrations. Would the present Nawaz Sharif Government be another?

I consider myself a supporter of PML(N). If I was to vote today, I would vote for Mian Nawaz Sharif and his party  But that doe not prevent me feeling sad and disappointed. The Prime Minister has devoted a lot of his time, political capital, and public money in efforts to deal with load shedding of electricity. The subject has been extensively discussed in the media and the scale of theft is well publicised but the shortage of electricity and gas remains severe. In media debates, two clear choices emerged. One view is that the IPPs are responsible for the crisis because of over charging in cahoots with State officials and hence for the circular debt and shortages. The principal advocate of this view has been has been Engineer Munawwar Baseer, former MD of PEPCO, supported by Transparency International (MBTI View) They advocate that electricity generation and distribution, being monopolies, should be in the state sector. The other view is that the IPPs are the solution to the problem because the state sector is so corrupt that privatization of the electricity sector is the best solution. Billionaire businessman Mian Muhammad Mansha (MMM) is the champion of this thought. His main ally in the Cabinet is Finance Minister Ishaq Dar, who is willing to help with state guaranteed foreign finance, high profits and ease in remittance of those abroad. The terms he is offering to IPPs are more generous than even in the present contracts which created the evil of the circular debt. Ishaq Dar scheme would create a balance of payment crisis. The internal circular debt could be cleared by printing more money, but balance of payment deficits would justify international sale of state assets to be followed by the collapse of the currency and international bankruptcy.

The cure designed by Finance Minister Ishaq Dar is worse than the disease. It might ease load shedding for a while but it would create a much worse problem of perennial balance of payment deficit. The price of electricity has been raised to ‘honour’ the contracts of legalized theft by IPPs which are still in place and more are in the pipeline. The Rupee is falling in value as more international borrowing from private banks has been announced by the Finance Minister. However, the situation is not beyond correction. The MBTI recommended option can still be adopted. That would not require the average price of electricity exceeding Rs 10/- per KWh. The gas price can be raised and rationalized without adverse effects on industrial or domestic consumers. Gas water heaters need to be banned and replaced by solar water heaters. Piped gas to domestic consumers may be restricted to cities and large town and taps turned off for domestic consumers during daylight hours when CNG stations are open. The Prime Minister has opted for the Mian Mansha option. I recommend the adoption of MMTI solution and ordering an inquiry into the highly skewed contracts with the IPPs and recovery of overpayment and nationalization in the event of default.

The Prime Minister has also indicated willingness to “negotiate” with terrorist groups. This is a meaningless gesture which will give time, space and publicity to insurgents. Every major insurgent group has a foreign master. It is better to deal with their masters than with the operatives. The sectarian Mafiosi operating in the KPK. FATA and Quetta can be best dealt with through the Afghan Taliban. The Baluch insurgents get their succour and support from the USA. It is best to deal with the US rather than their paid agents. The MQM is best dealt with through the UK Government. Over time, criminal groups have flourished all over Pakistan. The Interior Minister does appear to understand that technology has to be brought in to give the police an edge over the criminals. Pakistan does have a universal data base of all its citizens with NADRA. It is possible to keep track of every movement by every citizen. Any move that is unauthorised or unexplained should draw the attention of the police. Clearly, the issue is not whether to negotiate or not. It is only when a criminal is apprehended that a deal can be negotiated. Making deals with their leaders – alleged or real – is a wrong policy. The deals should be made with operatives or their foreign master/ handlers – not their local patrons who are often politicians, clerics or from the police itself. Such local patrons are the worst criminals who are gang leaders or their moles. They have to be apprehended and eliminated first.

The biggest disappointment in the speech was the attitude of the Prime Minister towards India. He seems to think that acceptance of Indian presence in Afghanistan and keeping the resistance in J&K in check would bring peace to the sub-continent. The fact is that Pakistan has had only two successful leaders – Quaid e Azam Muhammed Ali Jinnah and Zulfikar Ali Bhutto Shaheed. They both understood the Brahmin mindset and could see behind the veneer of their gesture politics. Today, India sees the victory of Mian Nawaz Sharif like it saw the victory of Sheikh Mujib in East Pakistan in 1971. Unlike Sheikh Mujib, Mian sahib is not an Indian agent. But the Brahmin does see an opportunity in PML(N) victory in elections. The escalation on the LoC in J&K has a purpose. India wants to see the limits of Pakistan ‘first strike’ nuclear doctrine. If Pakistan appears too eager to avoid a war, India’s own ‘cold start doctrine’ would become valid. Nowadays, the Indian TV is discussing how it achieved a conclusive victory over Pakistan in 1971. The point they emphasize is that the decision to invade Pakistan was made in March 1971 but the actual attack delayed till mid November. The reason for the delay, they say, was to test: 1) would Pakistan invade Kashmir before September; 2) what would China do; 3) what would be the response of the USA because the Soviet Union had clearly come down on the side of India, 4) how much would the East Pakistanis welcome the Indian invasion? When they got the right response on every count, the Indian victory was assured.

This is still March of 71 for Mian Nawaz Sharif. He has six to eight months to articulate his response and for India to decide what course to take. India would prefer a political victory in a typical 4th generation war but it is ready for, what the Indian media fondly calls “teaching Pakistan a lesson.” India wants to test over the coming months; 1) how unpopular the government of Mian Nawaz Sharif becomes, 2) how deeply his policy.of appeasement of India is resented in the armed forces, 3) how far does Pakistan lose the trust and support of China, 4) how much would the US be formally (albeit secretly) willing to isolate the battlefield preventing outside help to Pakistan. As things stand today, India could get the right response to all the questions. But the cards are stacked in Pakistan’s favour. With the right player it could still win. But that players is neither Mr Sartaj Aziz nor Mian Nawaz Sharif all by himself.++