[PEN-L:1329] Re: Pakistan

[Louis Proyect <lnp3@xxxxxxxxx>]

August 30, 1998

Poor Face Grimmest Choices as Pakistan's Economy, and Regime, Unravel

By BARRY BEARAK

ISLAMABAD, Pakistan -- During such a tumultuous week, it might be expected
that people here were preoccupied by the U.S. missile attack in neighboring
Afghanistan. After all, dozens of Pakistanis were among those killed in the
barrage that fell on what the United States says were terrorist training
camps.

But this is not the case, for people in Pakistan have concerns far more
immediate.

The world's newest nuclear power also has one of the world's worst credit
ratings, and with the possibility of default looming on its $30 billion
foreign debt, Pakistan's economy is quickly coming unspooled. Many people
here, whether pundits or politicians or shopkeepers, say they believe that
the government itself may unravel next.

With confidence in Prime Minister Nawaz Sharif in a seeming free fall, it
is common to hear predictions that something dramatic is about to occur,
though people are at a loss to suggest what that might be. They refer to
what has happened elsewhere: social unrest in Indonesia; the emergence of
theocratic states in Iran and Afghanistan. They mention a familiar staple
of Pakistan's past: the military takeover.

"If this is an economic meltdown, as many say, Pakistanis who have stashed
money away overseas -- or who have relatives living overseas -- are likely
to leave," said Abida Hussain, a former ambassador to the United States and
now a member of Sharif's Cabinet. "The institutional framework of
government, already so stressed out, might come under unbearable pressure.
Radical religious elements would try to profit off this.

"At the same time, people ask if the military would take over. I'll quote
the answer given me by a young officer who is my friend. I asked him, 'Do
you guys have the guts to impose military rule?' And he said: 'Of course,
we do. But what would we get out of it but a lot of criticism?' The
military's choices are no less grim than the government's."

As usual, those with the grimmest of choices are the nation's poor. Abdul
Khaliq, 35, is a barber in the working-class city of Rawalpindi, near
Islamabad, Pakistan's ornamented capital. "The feudal landlords and
politicians have looted our country until there is nothing more to loot and
they leave us with nothing but our poverty," he said.

Khaliq's barber shop is an 8-by-8-foot room with a single chair. Electrical
wires, frayed as old rope, hang from the ceiling. He has halved the price
of a haircut to about 33 cents, but customers seldom venture inside. "They
have no money," he said.

Next door is a tiny vegetable stand run by Mohammad Farooq, 42. His shelves
are stocked with only small amounts of ginger, tomatoes and cabbage. People
have been buying much less these last few weeks. The price of onions has
doubled. Potatoes have tripled.

"What is a man to do in a country like Pakistan, get a rifle, kill
yourself, kill your family, kill someone else?" he said angrily. "My wife
has pains in her ear. Medicine helps, but I have no money for medicine. I
tell her she must live with the pain."

While foreign news programs repeatedly showed Pakistanis protesting against
the U.S. missile attack, such rallies have been few and quite small. Even
now, many people in Rawalpindi have never heard of Osama bin Laden, the
Saudi-born millionaire whom the United States believes was behind the
bombings of the U.S. embassies in Kenya and Tanzania. Certainly, the vast
majority never knew who he was before the week before last.

The man most people speak of is Sharif, who was elected by a huge margin in
February 1997 but has recently found his popularity plunging. Voters, a
discouraged lot, had at the very least presumed him to be less dishonest
than his predecessor, Benazir Bhutto, who faces corruption charges in
Pakistan and in Switzerland. Many also supposed that a millionaire
industrialist might know something about running a government.

But these days even a supporter like Ms. Hussain, the minister for
population welfare and science and technology, is spare in her praise of
Sharif's leadership.

"This government is probably cleaner than any in the past," she said. "But
the cleanliness is at the top. Lower down, it's business as usual."

In its 51-year history, Pakistan has been a democracy only sporadically,
with elected governments trading turns with military dictatorships.
Corruption seems an unbreakable habit: politicians gorge at the public
trough, landowners and industrialists refuse to repay mammoth loans from
national banks, less than 1 percent of the population pays income tax.
Almost 70 percent of the budget goes toward interest on debt or for the
military.

These conditions have created a shaky economic scaffolding. Nevertheless,
Pakistan, with about half the population of the United States, has usually
managed to muddle through by begging and borrowing -- and forever promising
to clean up its act.

Sharif has made such promises, and while even his critics say he has made
some progress, his efforts at reform strike most as insufficiently bold.

With his support withering, and the economy already slowed by Asia's
economic crisis, Sharif enjoyed a spurt in popularity after May 28, when
Pakistan spurned United States offers of financial aid and tested nuclear
bombs, matching earlier trials by its enemy, India.

The United States imposed economic sanctions on both nations, and the
International Monetary Fund suspended disbursements -- castigations that
have been harder on Pakistan than its rival.

Sharif implored his countrymen to economize, to drink two cups of tea a day
instead of three, to cook with one spoonful of oil instead of two. He
announced ways to raise revenue, including the recovery of those billions
in loans owed by the country's elite.

But efforts to collect have largely been a flop, a failure all the more
irritating to the public since among the well-heeled deadbeats was the
prime minister. He has refused to repay his loans with cash, instead
turning over assets that critics say he has overvalued. Calls for a comment
from Sharif's information minister were not returned.

Desperate for revenues, the government increased prices for petroleum and
electricity. At the same time, the value of the rupee has plunged by 30
percent. Inflation has hit hard.

With $3 billion in foreign debt coming due, Pakistan is in danger of
defaulting. Last Wednesday, the United States expressed support for a deal
among international lenders that would rescue Pakistan from its payments
crisis.

Such last-ditch debt-juggling has saved Pakistan in the past, and while the
IMF and others usually demand economic reforms to accompany their loans,
many complain that such requirements are half-heartedly enforced here.

"The IMF and the World Bank bend over backward to appease these regimes,"
said Najam Sethi, editor of a weekly newspaper, The Friday Times. "At every
step of the way, the government lies to these agencies and the agencies
surely know they are being lied to."

But it has been difficult for the West to forsake a place like Pakistan,
with so many illiterate people and so little health care. This is all the
more true now that the nation is carrying a tin cup in one hand and nuclear
bombs in the other.

"Pakistan and its creditors are locked in this unfortunate, self-defeating
embrace," said Paula Newberg, an author who has written extensively about
Pakistan. "What appears to be convenient in the short term may be worse for
the long term. This pattern of bailouts keeps getting repeated, and in the
meantime Pakistan's structural problems are never solved."

In the narrow stalls of the Rawalpindi market, with haggard old men and
bony horses pulling heavy carts through the streets, people wonder if some
virtuous Islamic leader might come along to save the country. Mohammad
Jameel, 40, a shopkeeper, said he would welcome a fundamentalist
government, but then was unable to name any Islamic leader he would deem
worthy. Pakistan does have fundamentalist Islamic parties. They have yet to
fare well in elections.

In what some here see as cynical politics, Sharif has begun to portray
himself as newly zealous. Friday, in a speech before Parliament, he said
the cure for the nation's social ills was a constitutional amendment to
makes its laws more closely reflect Islamic teachings.

Pakistan's Muslims are split among Sunnis and Shiites, with the Sunnis in
the great majority, as they are in almost all predominantly Muslim
countries. Yet even within these groups, there are sects. They would be
hard to unify under any banner, let alone a fundamentalist one. Most
Pakistanis prefer less-strict interpretations of the holy Koran.

"The armed forces are a deciding factor, and I don't think they would
welcome an Islamic resurgence," said Aziz Sidique of the Human Rights
Commission of Pakistan, a private group, in Lahore. "I wouldn't rule out a
military takeover. What has prevented it so far is that now they have the
opportunity to influence decisions without taking responsibility for them.

"It is not so appealing to take responsibility these days in Pakistan."

Copyright 1998 The New York Times Company


Louis Proyect
(http://www.panix.com/~lnp3/marxism.html)