Saturday, December 17, 2011

How to bring Pakistan and Bangladesh closer in a confederation

I was in Dhaka the day we won the world cup in cricket. The excitement was all over the place. In the morning, I had to visit a government office to get some information, accompanied by an official guide. Office after office was closed.
“Is there a strike?” I wondered.
“No, the officers are at home watching the cricket match,” the guide explained.
Finally, he found an officer in his seat. “You have great sense of duty,” I complimented him on his presence. The officer, with a white beard, smiled. “Well, I have my son at home, calling me every hour to give the latest score.” There was widespread jubilation on the result, as if Bangladesh itself had won. Such were the emotions of the people.
After moving about for several days and meeting people, including public servants, it seemed that the people, if they could, would love to lift their country and place it next to Pakistan. Even after so many years, the separation and its aftermath had not diminished the deep Muslim brotherhood.
We can do now what we should have done back in 1971. We can create a framework that brings us closer and closer, overcoming the bitterness of the past. While retaining their separate identities, the two countries can unite in a confederation. Minimal in the beginning, the relations will grow gradually as trust and understanding increases.
How to do it? As the first step, Parliaments of the two countries should adopt the draft constitution given below to form “Pak Desh.” It provides only a framework for bringing the two countries closer in their mutual interest, without imposing any action that any side may consider undesirable, or interference in its internal affairs. It also does not propose any grandiose plan, such as a common currency or common Parliament.

The Constitution of Pak Desh

WHEREAS the people of Pakistan and Bangladesh, having won Independence in 1947 as a single country, want to have as close relations as possible, while retaining their sovereignty and independence;
WHEREAS the people of both countries, being part of the Muslim Ummah, want to cooperate and collaborate in the promotion of Islam and closer relations with Muslims everywhere;
WHEREAS the two countries have common interests and objectives and want to work together to achieve them;
NOW, THEREFORE, they hereby adopt this Constitution, through their representatives in Parliaments of Pakistan and Bangladesh, and it will take effect from _____.
1. Pakistan and Bangladesh will form a confederation, to be called “Pak Desh.”
2.  Pakistan and Bangladesh will retain their names and independence as sovereign countries.
3. Pakistan and Bangladesh will be called henceforth respectively Western and Eastern Wings of Pak Desh with regard to affairs of the Confederation.
4.     President The head of Pak Desh will be Pak Desh President.
5.     On the recommendation of Parliament of either Wing, Parliaments of both Wings will elect as the Pak Desh President a person, who qualifies to be elected the President of his Wing, with votes of more than 50 percent of the total members of each Parliament.
6.  Pak Desh President will continue in office without an limit of age until he resigns, is declared unfit mentally and physically or Parliament of either Wing shows lack of confidence in him with a vote of more than 50 percent of its total members.
7.  Pak Desh President will be provided official residence in the Wing of his domicile. When visiting the other Wing, he will stay in the President House or
8.  Council Pak Desh will have a Council, to be called Pak Desh Council, consisting of Ministers of Foreign Affairs, Trade and Interior of Governments of both Wings.
9.   While discussing an matter that is not under the jurisdiction of any of the Council Members, the relevant Ministers of both Wings will be invited to participate in discussion and decision.
10.  Pak Desh President will preside over the meetings of the Pak Desh Council.
11. The Council will meet at least once in every 90 days.
12.  The Council will take all decisions with consensus of its members.
13.  Every decision of the Council will take effect in both Wings after 90 days unless Parliament of either Wing overrules it or fails to pass relevant legislation within the given period.
14.  If Parliament of a Wing modifies a decision of the Council before the end of 90 days, the modification will take effect after the approval of Parliament of the other Wing.
15.  Secretariat a) The Secretariat of Pak Desh will have a setup each in Islamabad and Dhaka.
b) The Secretariat staff will consist entirely of employees provided on deputation by the Government of the relevant Wing.
c) The staff, subject to the rules of their Government, will retain lien with their parent departments to get promotion, when due, and other benefits.
16. The Governments of the two Wings will approve the budget of Pak Desh, with each Government bearing half of the total budget expenditure.
17.  The official languages of the Secretariat will be Urdu and Bangla.
18.  Every staff member of the Secretariat will be required to be very fluent in both languages, so that he can read, write and speak in either language without difficulty.
19.  Islam Both Wings will cooperate and collaborate in the promotion of Islam through all possible means and in having closer relations with Muslims everywhere.
20.   The embassies and diplomatic missions of the two Wings will collaborate to improve relations of Pak Desh with Muslim countries.
21.   Foreign policy Both Wings will consult each other regularly on foreign policy matters and their embassies and diplomatic missions will collaborate on matters of common interest.
22.   Visa Each Wing will set up visa offices in major cities of the other Wing.
23.   Visa offices will receive applications for visas directly through registered post. Interviews will not be required for tourist and business visas.
24.   The visitors from one Wing to the other Wing will not have to report their arrival and departure at a police station. On arrival and departure, a visitor will submit only a report card at immigration counter.
25.   Defense The military attack on a Wing will be considered an attack on the other Wing also and both will fight against the aggressor with all available means, including nuclear weapons.
26.  Both Wings will cooperate and collaborate in defense matters, including training, equipment supply and joint military exercises.
27.  Commerce The trade between the two Wings will be considered internal, subject only to essential regulations of the relevant Government.
28.  A private or public limited company in either Wing will be allowed to set up an office or factory in the other Wing after informing the central bank of the Wing, without requiring formal permission.
29.  There will be no duties or taxes on the items traded between the two Wings, if grown, produced or manufactured locally. 
30.  Buyers in a Wing will pay in their own currency for imports from the other Wing.
31.  The currency of a Wing will be converted into the currency of the other Wing only through scheduled banks and at a rate determined daily by the central bank of the respective Wing.
32.  Communication The Governments of the two Wings will set up jointly an undersea optic fiber link between them, share the initial cost and subsequent running expenses and offer its use free of charge to telecom companies of both Wings, provided they apply domestic rates to their customers for inter-Wing voice calls and other communications.
33.  Domestic postal rates will apply to the surface mail between the two Wings.
34.  Each Wing will subsidize by more than 50 percent the fares of the Lahore-Dhaka and Karachi-Dhaka flights of its national carrier.
35.  The two Wings will have joint regular shipping services for inter-Wing trade and passenger services.
36.   Both Wings will negotiate with India for transit of direct passenger and goods trains between them, running under Indian escorts.
37.   Education The public sector universities and other educational institutions in one Wing will admit students from the other Wing on merit, whether they get scholarships from their Government or want to study at their own expense.
38.  The Government of a Wing will promote the teaching of the national language of the other Wing in its educational institutions.
39.  Sports Both Wings will hold regular annual inter-Wing matches in cricket, hockey, football, athletics, and other sports.
40.   The best players of both Wings in a sport may form Pak Desh teams to play against teams of other countries.
41.  Culture Each Wing will set up cultural centers in the major cities of the other Wing to promote better understanding.
42.  The feature films produced in one Wing will be shown in the other Wing, whether in original language, dubbed or with subtitles, to provide larger markets to their film industries.
43.  Joint production of films will be encouraged with government subsidies.
44.  The state-owned and private television channels of both Wings will be encouraged to exchange content and to produce it jointly.
45.  The Government of both Wings will sponsor exchange visits of university teachers and students, journalists, writers, artists, etc.
46.  The newspapers and magazines of a Wing may print facsimile editions in the other Wing to promote better understanding of their Wing, provided that the facsimile editions will not include local advertisements and news to avoid conflict with local publications.
47.  Cooperation The two Wings will continue to explore possibilities of more cooperation and collaboration in all fields of common interest.

Sunday, December 11, 2011

Some more questions about Husain Haqqani fiasco

Conspiracies are intriguing and fascinating. The Memo Scandal, involving Husain Haqqani and others, is no different. Some of its secrets are already known, while others may be on the way. In my previous post ( (see article below), I raised some questions. Here are some more.

Why was the memo written and delivered in the first place?
According to Mansoor Ijaz, Haqqani claimed that the government feared a military coup. However, now it appears that it was the other way round. After the Abbottabad attack, the army preferred to claim that it had been taken by surprise. In view of its vulnerability due to public outrage, somebody in the Zardari coterie had the brilliant idea that the present army leadership should be replaced with pliable one. The idea got a favorable hearing.
However, it was not forgotten what had happened to Nawaz Sharif, who made a clumsy attempt to remove the army chief with disastrous consequences. So, it was decided to get the American support before replacing top generals.
The thrust of the charge against Haqqani is given in Mansoor’s article in Newsweek (
). He writes,
“Zardari and Haqqani both knew the U.S. was going to launch a stealth mission to eliminate bin Laden that would violate Pakistan’s sovereignty. They may have even given advance consent after CIA operations on the ground in Pakistan pinpointed the Saudi fugitive’s location. The unilateral U.S. action, they might have surmised, would result in a nation blaming its armed forces and intelligence services for culpability in harboring bin Laden for so many years. They planned to use the Pakistani public’s hue and cry to force the resignations of Army chief Gen. Ashfaq Kayani and intelligence chief Gen. Shuja Pasha. Pliable replacements would have been appointed.”
Haqqani has not much to worry about a conviction if Zardari is still the President. After all, there will be nothing to stop Zardari from pardoning Haqqani promptly. If Rehman Malik can survive despite court judgments, there is no reason why Haqqani should fare worse.
Persons close to Zardari, in Islamabad and Washington, conceived, wrote and finished the memo, with his approval. Then it was delivered to the Pentagon through Mansoor.

Why did the memo surface now?
Both Haqqani and Ijaz would have kept the memo secret forever, whether or not it led to any action by the U.S. How come it was disclosed only after four months? Lt Gen Hameed Gul believes that the Pentagon made the disclosure after the government had failed to carry out the promises made in the memorandum even in over four months. (That means the Pentagon did give the warning to the army top brass that Zardari coterie wanted and then waited for the fulfillment of the promises in the memo.)
There is another possibility. The Pentagon did not expect a pliable government to emerge after the elections because parties of both Zardari and Nawaz Sharif were losing popularity. Imran Khan could break into vote banks of both PPP and Nawaz League. The more time he has, the more popularity he will gain. Even if he did not get majority in election, he could still end up as the head of a coalition. That will make life quite difficult for the U.S. operations in Afghanistan.
The urgent question for the Pentagon was: How to stop Imran Khan? The best option would be to get rid of the PPP government now, help install an interim government to revive economy and clear the mess, and get the elections postponed indefinitely. Then it will be comfortable army-to-army dealings. Since top Pentagon generals knew the existence of the Haqqani memo, one of them asked Ijaz to disclose it. It was to be a booby trap. No wonder, the Zardari regime is teetering on the verge of collapse.

Could Haqqani nip the scandal in the bed?
He could. The day Mansoor’s article appeared in The Financial Times, Haqqani could have concluded that Zardari’s game was up. The Pentagon did convey the warning to the army in May but was now angry with Zardari for failing to carry out the remaining promises in his memo.
That should have been enough for Haqqani to resign immediately, claiming that he was exhausted by grueling diplomacy and wanted to go back to his “professory” (as we say in Urdu). To be on the safe side, he could also seek political asylum. To his misfortune, Haqqani dragged his feet and finally had to leave Washington kicking and screaming to face the music in Islamabad.
As it happens often with ambitious persons, arrogance makes them ignore the ground realities. Haqqani was not willing to call it quits so easily. With Zardari at his back and many influential friends in the U.S., he was sure he could survive easily. However, his defense against Ijaz’s onslaught was only denial. It was like defending oneself with a plastic shield against a rocket launcher. So, he landed himself soon in a very hot soup, with his hope dashed of becoming the National Security Advisor and, with luck, even something much higher. Now he wonders whether it will be his neck or that of his “boss” -- or both.

What can Haqqani do now?
There was for some time a talk of compromise (muk muka مک مکا  in plain words), to end the episode after getting Haqqani’s resignation. However, the action by Supreme Court on the Haqqani scandal has made it impossible.
بات نکلی ھے تو دور تلک جاءے گی
Now Haqqani has two options: Stick with Zadari or betray him. If he believes that Zardari will survive the crisis, he may decide to remain faithful to him. If, in his view, Zardari may be forced out even without impeachment or conviction (see below), Haqqani may become an approver against his “boss.”
What are the prospects for Zardari’s survival? His impeachment may be difficult, as he may use all his skills and means to win over most MNAs. The motion to impeach Pervez Musharraf seemed likely to succeed, as it had support from both the U.S. and the army. If the same support is available, Zardari may be impeached. However, it will be simply removal as President. He will still be a force to reckon with, being the head of his party.
If Zardari is prosecuted, his prospects will be better than impeachment. He did not allow any case against him to reach a conclusion despite years of trial. He will work harder to do the same indefinitely, using all the tricks of legal profession.
Haqqani might be tried not under Article 6 of the Constitutionbut, according to Justice Tariq Mahmood, under Section 121 of the Pakistan Penal Code, viz., “Whoever wages war against Pakistan, or attempts to wage such war, or abets the waging of such war, shall be punished with death, or imprisonment for life and shall also be liable to fine.”

How will it all end?
A lot of noise may be created for months by investigation, court trial, impeachment motion, discussions, agitations, all the words poured out in the paper and electronic media but the process may well drag into Zardari’s final months in office. He is not very keen for another term for him and his party because he and his cronies have grabbed all they wanted, destroying all they could in the process. So, he will not be unhappy if he leaves in 2013 with a guard of honor.
However, what most people fear may well happen, as long as Zardari is in Sadar Mahal صدر محل (President House). In the meantime, he may do much worse than he had promised the U.S. in his memo to Admiral Mike Mullen. So, the Establishment may not be willing to allow status quo to continue. It also has to consider abysmal conditions in the country: economic disaster, massive corruption, gross misgovernance, high inflation, severe crime wave, energy crisis, political chaos, subservience to foreign interests. The security of the state and vital national interests are far more important than any possible hostile reaction from politicians, media and Supreme Court. (The U.S. and the so-called “international community” may soon reconcile with fait accompli, even if it is not happy.) So, don’t be surprised if you learn one fine morning that the 111 Brigade is in action.

Some questions on the Husain Haqqani fiasco

روشنی طبع، تو بر من بلا شدی اے
This Farsi line applies aptly to Husain Haqqani, now that his brilliance has landed him in the worst debacle of his career.
The fiasco raised many questions, some still unanswered, some not fully answered. Let us try to find out what it was all about and also put available facts in perspective.

Did Husain Haqqani do it?
Of course, beyond a shadow of doubt. He did pass on a memorandum to Mansoor Ijaz, seeking his help in saving his boss’s government. It is not a simple case of one man’s word against the other. Mansoor Ijaz has already provided enough documentary evidence from his Blackberry to prove it.

How were the beans spilled?
Haqqani and Ijaz, as professionals in tricks, were to keep the secret only to themselves. By talking one-to-one with Zardari on one side and Mansoor Ijaz on the other, Haqqani ensured complete secrecy. It might well have remained secret.
But human frailty upset the plan. Days before his retirement as Chairman, Joint Chiefs of Staff, Admiral Mike Mullen spoke harshly against our army in his testimony before the U.S. Senate. May be he was disappointed on not succeeding in Afghanistan, or may be it was his pent-up frustration over years on not being able to get our army do his bidding every time. (In an interview some time ago with the French news agency, Agence France Presse (AFP), he said Gen. Kayani could stop the terrorists if he wanted to, and then added ruefully, “I don’t know whether he will do it or not.”)
There was an outrage against Mullen in our media, though the U.S. government played down his statement, even disassociated itself from what he had said. Mullen was enraged, believing that ISI was behind it.
Since Mullen had helped Ijaz in establishing his credibility with Haqqani, he approached him for a quid pro quo. Ijaz agreed and wrote the article for the op-ed (opposite editorial) page of The Financial Times, hoping that it would discredit our army for wilting under American pressure and not taking over. The secret that was deep in his heart came out, to Haqqani’s hard luck. Ijaz himself justified the article in his interview with Sana Bucha (“Lekin!” Geo News, Nov. 14) as a counterattack to criticism against Mullen.
Haqqani must have known much about Mansoor Ijaz, such as his conservative (rightist) leanings and his links with the Pentagon (that he needs for his high-flying diplomatic freelancing). However, he did not know that Ijaz also believes in exchanging favors.

How did Haqqani try to save his skin?
The disclosure of his approach to Ijaz was a disaster for Haqqani. He thought denial would be the best way out. So, he himself contradicted Ijaz, asked the spokesman of the President and the Foreign Office to do the same. They obliged him but it was not enough for him. A contradiction from the other side was also necessary. So, he succeeded in persuading the former spokesman of Mullen to issue a carefully crafted denial. Enraged, Ijaz hit back with a long rejoinder. In fact, he went so far as to show the entire content of his Blackberry to a high official (probably of ISI) and even offered, in his interview with Sana Bucha, to appear before a Parliamentary committee or a court. Haqqani was now in a very thick soup.

Why did Haqqani approach Mullen in the first place?
As an ambassador, Haqqani should have approached the U.S. State Department for help. He could even meet Hillary Clinton. But this channel in his view could not be very productive. A warning from the Pentagon to the army would be more effective. However, he could not meet Mullen directly under the diplomatic rules. Media savvy that he is, he also wanted deniability in case something went wrong. (A message sent through an intermediary could be easily denied if ever the need arose.) Moreover, Mullen could convey the warning to Kayani in normal conversation during one of their frequent meetings, without raising any suspicion that Zardari was behind it.
Politicians with no deep roots in the masses and no confidence in their ability to govern seek help from the outside. Haqqani knew that in September 1999, the Sharif brothers became panicky and sought American help against a possible coup that they feared. Shehbaz rushed to Washington and got a strong statement issued by the State Department in favor of his brother’s government but ultimately to no avail.
In fact, Musharraf had no plan to topple Nawaz government and would not have done anything against it if the Prime Minister had not tried to remove him in a clumsy attempt that was also illegal. (Under the Army Act, no action can be taken against an officer, even a lieutenant, while he is abroad. Secondly, the army chief could not be removed unless the Defense Secretary issued a notification about it (which never happened); there was no validity to even written orders of the Prime Minister that would-be army chief, Lt Gen. Ziauddin Butt, has been showing around.

Who asked Haqqani to do it?
It is the father of all questions. Najam Sethi (“Aapis ki bat,” Geo News, Nov. 15) did a clever spin job. He implied that the army had arranged the Ijaz article, conveniently ignoring the fact that it had nothing to gain. Kayani, like Musharraf, never planned to take over. So, a warning from Mullen, even if given, did not matter. Rather, the article would give the impression that the army did want to take over but held back under an American threat.
Najam also gave an impression that Haqqani might not be guilty, only the army considered him so. He also stopped short of saying that Zardari had asked Haqqani to do it, as if Gilani or somebody else might have done it. Zardari would have been much better off if he had Najam as his official spin doctor.

Who told Zardari about a possible coup?
Good question. Our rulers are very credulous when it comes to a threat to their power. Anybody can make them panicky with a rumor of a coup, however wild. It happened with Nawaz Sharif, when some cronies told him about the possibility of a coup after the Kargil (even though the army had no such intention). No wonder, he sent his brother hastily to the U.S. to prevent it.
The same must have happened with Zardari. Somebody, who had his ear, wanted to convince him of his loyalty and also of his being very informed, told him that he would be the fall guy after the U.S. action in Abbottabad. He could be somebody Zardari trusted very much but was fed false information. Somebody in intelligence? Some journalist, who wanted to get close to the President? Time will tell.

How will it end?
Najam Sethi says that the crisis will end with the sacking or resignation of Husain Haqqani and appointment of a National Security Advisor on the recommendation of the army. It may not be that simple. The army is eyeball to eyeball with Zardari, and according to Ijazul Haq, “On the basis of my information and observation, it is a case of who moves first.”
Azizi of the popular program, “Hasb-i-Haal” (Dunya News), disclosed recently that Zardari has asked Adiala Jail authorities to keep his belongings in the room that he had occupied while there. “I may have to live there again.” The statement has not been contradicted.
According to a media report, Zardari once told a visitor, “If I make America angry, I lose this (pointing to his chair.) If the army gets angry, this will happen.” He moved his open palm across his neck.

Wednesday, July 20, 2011

What the West really means to say

“When I use a word,” says Humpty Dumpty in Alice in Wonderland, “it means just what I choose it to mean.” If he does not mince his words, this is how a Western lexicographer should define the real meanings of some common terms.

The West can no longer afford to give away money. The days when wheat could be given free under US PL (Public Law) 80 are gone. Same is true about grants. So, aid now does not mean grants. It is simply a euphemism for loans. Not even on soft terms, like three per cent interest, no payment for 10 years under a grace period and total payable over 30 or 40 years. We get a good laugh when a poor country’s government proudly tells its people that it has managed to get so many millions of dollars in “aid.”

Arab-Israeli peace process
HAMAS was becoming a real threat and intifada could not be suppressed despite the use of all possible brute force. So, we persuaded Israel to make a deal with Arafat, who was in reality always our own man on the spot. Israel too realized that its young generation did not have the stomach to fight a war. So, we arranged a deal through PEACEFUL NEGOTIATIONS (q.v.) that will give autonomy to Palestinians (that too in a process spread over years, if not decades) in return for providing an arms-free buffer zone to deter any Arab adventurers, the recognition of borders and a huge next-door market for Israeli products.

Arms race
Peace is not good for our war factories (euphemistically called “defense industry”). So, we encourage frequent bushfires among the poor countries (or increase tensions that may cause them). It helps us sell weapons to both sides. If they don’t have the money, we gladly give them loans. (It also makes our hold on them stronger.) If, however, one side starts buying arms from our rivals, we call it “an arms race” and do our best to stop it. We don’t mind if the poor countries spend far more money on military hardware than on social welfare. Even making nuclear bombs, provided it is with our permission, is OK and we won’t call it NUCLEAR PROLIFERATION (q.v.). After all, spending on things like education will make them less dependent on us. And who will subsidize our war industry?

Child labor
The children of the poor everywhere in the world work to supplement family income. We don’t mind it in our own society. But when the children in poor countries make products that compete against ours, our manufacturers howl. So does our labor as the employers lose orders. Therefore, we condemn the poor countries for not looking after their children properly and denying them opportunities for getting education. Then we create hurdles in the import of low-cost products from poor countries. We may even impose a total ban. The poor children lose work and also don’t get education. So, what?

Cold War
The Pentagon and the CIA and their counterparts in the former Soviet Union, under a mutual agreement, had a good time for several decades after the Second World War. Deceiving their respective governments and people into believing the prospects of imminent doom, they got control over huge resources in the name of defense. They even fabricated estimates of the enemy’s strength to create panic. The good times are coming again. The cold war will soon be resumed not only against a nationalist Russia but also between the US and China. Now it will be a war between “democracy and authoritarianism.”

There are as many variations of democracy as there are governments. In its best form, democracy prevailed in the ancient civilizations of Asia and Africa but we seldom even mention it. We in the West had to fight hard and long for it and succeeded only recently in our history. It is the best form of government for us but not for the countries whom we want to subjugate and exploit. But the poor of the world too clamor for democracy. So, we install a group of lackeys in the garb of democracy. They do our bidding willingly, even obsequiously. The paraphernalia and rituals, including periodic elections, are the same as we have. The difference is that the people really have no choice. If they are fed up with exploitation, corruption and criminal activities of one set of rulers, we arrange to bring in another group, with the same attitudes and behavior. If things get too hot, we ask the generals to march in for a cooling period. Since no ruler has his roots in the people, he is there only by our leave. If a popular leader emerges and tries to go against our interests, he meets some kind of fatal accident and goes below ground. True democracy comes with universal education and prosperity and we see to it that the poor countries never have them.

Developing countries
We used to call them “poor” when most of them were our colonies. After becoming independent (only legally and technically, that is), they developed sensibilities. On their objection, we coined the term of “developing” for them and “developed” for ourselves. For convenience in reference, some years ago we divided the world into three groups, viz., First (rich western countries), Second (all Communists) and Third (the rest). The third class nations were happy in the naive belief that we had given them status equal to ours! We had merely adopted a more important sounding euphemism in place of “developing countries.” After the Soviet Union broke up and most Communist regimes in Europe fell one after the other like cards (and the remaining started talking of market economy), the “Second World” ceased to exist. We hated the idea of calling the wretched poor countries as “the Second World,” (second to us, that is). So, we reverted to calling them “developing countries.” Developing as markets for us, that is.

Environmental pollution
The Western civilization believes in ruthless exploitation, whether of human beings or of natural resources. While industrializing, we never cared what we were doing to our environment. When we had gone too far, the realization dawned among our people that pollution must be stopped. Strict laws were passed by our legislatures. To obey the laws, our industries had to adopt expensive technologies that raised their production costs enormously. Now they find it still more difficult to compete with their counterparts in poor countries. So, to reduce the cost advantage, we are forcing the governments of poor countries to enforce strict anti-pollution laws. We do know that their pollution is only a fraction of ours but our real concern is not to help them make their environment cleaner but to reduce their advantage in production costs.

Human rights
The ordinary people elsewhere in the world have more or less the same human rights as in our countries but we make it an issue only in case of poor countries. If a small religious community gets into trouble with the majority while serving our objectives, we raise a noise on its behalf. Similarly, we talk of poor human rights in a country when it does not meet our demands. Since we control the world media, we severely damage a country’s image if it does not bow before us. However, we can ignore the issue in higher interests. For example, the requirement of an annual Presidential clearance for continuing the status of most-favored nation in trade with the US was immediately withdrawn after China agreed to persuade North Korea to sign an agreement on NUCLEAR PROLIFERATION (q.v.).

Intellectual property
Now that the poor have started becoming a little less poor and producing many consumer items on their own, we have devised another method to extract more money out of them in the name of protecting intellectual property. We have huge resources for R&D and make almost all inventions and discoveries. Our own markets are large enough to not only recover all our costs but also give good profits. We can easily afford to let the poor countries make their own life a little easier by using our patented and copyrighted material without charge. We must do it, at least as a token compensation for our exploitation of their resources for centuries. But our businessmen are so greedy that they do not want to lose even a penny, if they can help it. They know that their prices, say of books, disks and computer software, are way beyond the purchasing power of readers and users in poor countries. But they refuse to make any concessions. Under their pressure, we force poor countries to succumb to our demands for “protecting our intellectual properties.” We do not allow them even to replicate our agricultural seeds without paying us royalty.

Islamic fundamentalism
The trouble with the Muslims is that they refuse to change their religious beliefs to suit our objectives. (We turned ours out of shape long ago to meet our selfish desires.) We could live even with that if it did not hinder our political and economic aims. However, the Muslims consider their religion as the ultimate guide for human beings and superior to all others and are determined to follow it in all fields of life. We have made some headway in persuading the selfish among them to follow our ways in the name of liberalism and moderation. To put them in better light, we started calling the others as “Islamic fundamentalists.” We thought it was a subtle and yet apparently innocuous appellation but there has been a loud howling everywhere against it. Therefore, our experts of semantics have come up with a substitute: “Islamists.” Let us see how it fares.

Liberalization of trade
Our economies are stagnating, with little prospects for much growth in the near future. Therefore, we have used World Trade Organization (formerly General Agreement on Trade and Tariff) to open the previously protected markets of poor countries. We have forced them to not only open the gates but also reduce the import duties to minimum levels (which we can easily neutralize through under-invoicing and dumping). When a country complains of lack of foreign exchange, we promptly arrange loans through IMF or our own financial institutions to finance its bigger imports. On the other hand, we know how to restrict such imports from poor countries that affect our own people.

New information order
News media is the most effective weapon to win over the hearts and minds of the people. Therefore, we are paying great attention to its use. All popular satellite channels for news and entertainment are owned or controlled by us. So are the international news agencies, like Reuters, Associated Press of America and Agence France Presse. We are forcing poor countries to allow our hired hands to start private radio and television networks so that the state networks lose both their monopoly and their influence. At the same time, we persuade the state-run channels to relax or even abandon their values and standards and follow our agenda in the name of “competition” against the private channels for audience and advertising. Then there are our multinationals controlling multimedia, especially audio, video and computer games. Though foreign ownership of paper media is not allowed legally, we have no difficulty in controlling newspapers and magazines, even book publishing, through their obsequious owners and subservient employees. (We also get excellent intelligence through them on everything under the sun, as they have no difficulty in snooping around among their own people.) Whatever we want in whatever manner is splashed all over. We determine what news is and what should be entertainment. We even decide what the people in poor countries should think.

Non-governmental organizations (NGOs)
We need Trojan horses in poor countries to subvert their religion, culture and social values. Therefore, we get quite easily highly suitable lackeys, who work for us very diligently. In return, we throw them crumbs, which become huge sums for them due to very low exchange values of their currencies. We develop new concepts and introduce new slogans and the NGOs go out of their way to spread them. We also get very valuable intelligence through the research that we assign the NGOs from time to time. It helps in formulating our strategies and policies. The NGOs also keep the intellectuals from doing any work that may be genuinely useful for their society. Thus, the NGOs prepare the ground for our domination over all-important sections of their own countries and help us in our manipulations for our objectives.

Nuclear proliferation
Nuclear bombs gave us a huge advantage as we could cow down the rest of the world whenever we wished. The Big Four of the time (U.S., Russia, UK, France) got them in quick succession. Then we put a ban. (China too blasted its way into the club in 1964 very much against our wishes but we decided to live with it.) Later, we helped some of our henchmen (Israel, South Africa, India) to have the capability clandestinely as we wanted them to seek regional hegemony. But we just cannot tolerate any state getting nuclear capability if there is even a remote possibility of its being used to obstruct our world order. We will not hesitate in destroying a country (Iraq), putting sanctions against it (Libya, Iran) or bumping off its leaders (first Bhutto and then Zia ul Haq) for trying to become a nuclear power.

Peaceful negotiations
There are far too many disputes in the world and we have neither interest in solving all of them, nor have the stomach for it. If a dispute is between countries that have equal importance for us, we do intervene and impose a solution through the UN. If, however, one of them is more important for us and is also in the wrong, we suggest direct peaceful negotiations between them. In reality, it is a way to let the big bully have its way as far as practically possible. We used it successfully for the ARAB-ISRAEL PEACE PROCESS (q.v.) and for a truce between Bosnian Muslims and the Serbs. Now we are trying it between India and Pakistan on Kashmir. We fervently hope India gets what it wants and yet “settle” the dispute.

Population planning
Our population is stagnant or even falling while that of poor countries is increasing. It means trouble for us. If poor countries become better off, they will have much more productive labor, and at very low cost too, turning the migration of our manufacturers towards them into a stampede. (There is already chronic unemployment at a large scale in the West.) If the poor get worse off, they will create such instability all over that our entire world order, even our prosperity, will be in jeopardy. And if, in sheer desperation, the wretched masses start marching on us, all our armies will not be able to stop them from overrunning our lands. Therefore, it is in our vital interest that poor countries stop any increase in their population. We are giving them aid (genuine type) very generously and subverting their religious sensibilities (particularly of the Muslims and the Roman Catholics.) We are especially worried about a population increase in the Muslim World.

We have adopted a clever way of getting control over basic infrastructure (like telecommunications) and other public sector industries of poor countries. We pressurize them into paving way for our take-over at dirt-cheap prices and, at the same time, befool their own people into believing that we have been kind enough to “invest” in their economies. We know how to push aside local competitors by giving bigger bribes to relevant bureaucrats (and that too untraceable through foreign accounts). We prefer to buy profitably units. Alternatively, we may play in the stock exchange, make huge profits through manipulations, take our money and run.

World Trade Organization
To improve our sluggish and stagnant economies, we need to enter new markets. The emerging economies can provide a good opportunity but they have been often heavily protected. Therefore, we have transformed General Agreement on Trade and Tariff (GATT) into a new organization and, at the same time, forced them to adopt an agreement under which they will be compelled to open their doors to our imports. While abolishing restrictions on imports, they will also have to reduce the duties to the minimum in the name of LIBERALIZATION OF TRADE (q.v.). As for their exports to us, well, we know enough tricks to restrict them if it hurts.

Sunday, July 17, 2011

How to privatize electricity distribution companies and reduce cost of electricity

The privatization of electricity distribution companies (DISCOs) involves some basic questions. The answers to these questions will lead to an alternative proposal that will be quite innovative, will expedite the process of privatization and start bringing in proceeds immediately.
Some basic questions are:
a)     Why does the Government want to privatize DISCOs in the first place?
b)    Why should a foreign or local "strategic investor" be sought, and that too for not more than 26%? Some related questions are:
i)                   What will be the buyer’s interest and objective?
ii)                What will be the likely consequences of the take-over by him?
iii)              What will be its impact on the electricity users?)
Let us take up the questions one by one and try to find their answers.
The objectives of privatization There are two main reasons why the Government wants to privatize DISCOs. One objective is to make the DISCOs efficient companies so that they can not only meet the electricity needs of the country but also make the required investment on their own. Autonomy to the managers of DISCOs under the present system cannot solve the problems because a bureaucratic set-up cannot be turned into an efficient organization simply by giving it autonomy. Habits and culture of bureaucrats may not change even after they are told that they are now "autonomous" in their working, just as an elephant in the zoo will not walk away as a free animal even after its shackles are removed,.
The second objective of the Government is to get substantial funds through privatization. The Government expects to get tens of billions of rupees with the sale of the shares of DISCOs. Since such a huge amount may not be possible to get from our own businessmen or even through the domestic stock exchanges, the Government believes that it can do it only if some foreign investors offer to buy the DISCOs (even if only a portion). 
The consequences of hand-over to a foreigner buyer What will be the consequences if 26 percent shares are sold to foreign strategic buyers and, at the same time, management is handed over to them? Obviously, the strategic investors will be primarily interested in making as much money as they can and in as short a period as possible. It is as simple as that. The interests of the customers will not be their primary concern. As a case in point, the privatization of Karachi Electric Supply Company (KESCO) was a disaster that caused great hardship to customers and highlighted the harm that foreign investors may cause.
Savings not to be passed on to users Foreign buyers will make strenuous efforts to improve operational efficiency. They will not hesitate even in downsizing the present personnel as much as they can to get maximum output per employee. They will also reduce expenses to the barest minimum level.
The improvements, however, will be entirely in their own interest. They will be extremely reluctant to pass on the benefits of efficiency and savings to consumers. The Government will be hardly able to force them to reduce rates and charges in the interest of consumers.
Higher rates for electricity Foreign buyers will do their best to charge as much as possible in order to maximize profit. If a buyer is from a country, which is a big world power, he will not hesitate in using his government’s influence. (What the international investors in independent power projects have been doing indicates what may well happen.) Our Government will not be able to resist the pressures. The increases in electricity rates in recent years provide a good example of the shape of things to come.
No new assets Foreign buyers will not be interested in making any investment that is not recovered with maximum profit. (The present management of KESCO failed to honor its commitments regarding investment.) It takes years to expand infrastructure, such as construction of new transmission lines and replacement of present ones. It will not be in a foreign buyer’s interest to make long-term investments if returns are not to come soon. If he finds that he can no longer make as much money as he did in the beginning, he will look for more profitable opportunities elsewhere in the world. All that he will have to do will be to sell his shares to some interested party or unload them at the domestic stock exchanges. In other words, he will take his money and run.
Little interest The reasons are not hard to find why foreign strategic investors may not be coming forth soon.
a)     A proper and comprehensive evaluation of the assets and liabilities of DISCOSs is not available.
b)    There are huge liabilities in the form of outstanding dues that DISCOs have been unable to recover from influential defaulters.
c)     There are far too many employees to run the operations efficiently and economically.
d)    The prospects for profitability are not rosy at present due to high cost of electricity.
The needs of the people The consumers want basic improvements immediately:
a)     They expect better efficiency and service after the DISCOS are in private hands. And they want the savings in costs (most, if not all) to be passed on to them in the form of lower rates and charges.
b)    They want increase in electric supply to meet fully present and future needs.
c)     They want improvement and expansion in the network so that connections are available also in all villages, even if service in some areas has to be subsidized.
A foreign buyer will be hardly inclined to "waste" his money on doing any of these things, if he does not himself get the major benefit. Nor will he feel any compulsion to do so.
Local buyers as an alternative Local strategic buyers, if available, may have the same thinking as foreigners and try to make as much money as they can. However, they live in this country and cannot afford to annoy the people and the Government beyond a certain limit. They may also be expected to have some consideration of national interest. Therefore, they would be preferable to foreigners. However, the purchase of even the specified minimum ratio (26%) of shares of a DISCO, not to speak of all, will require a sum that a local investor may not have.
The local investors can, however, do it collectively if they agree to join hands in taking over DISCOs, hire professional management, and do not allow any one of them to dominate, if not oust, the others. This will be a tall order.
The third alternative When selling to foreign buyers is not in the national interest and local counterparts are not available, what should be the way out? Go to the people, as wise men say.
At present, the DISCOs have over 20 million customers in total. Why not offer the shares to all of them? Collectively, they may have enough purchasing power to buy all shares, in quarterly installments, if necessary. Of course, not all will get the same number of shares. Some of them may be able to buy just one share each, while others may be able to get big lots.
How to do it? The chief executive of every DISCO will issue a share to every connection holder in his area (for Rs 10 or 100) and include the amount in the next month’s electricity bill. There will be no need for a share certificate. The DISCO records will show that every consumer is a shareholder and a customer will have the electricity bill as proof.
To sell more shares, a DISCO will send a letter to all of its customers, offering its shares to them. The letter, in Urdu, may explain the benefits of buying DISCO shares and the procedure for purchase. It will bear the customer’s name, address and other identifying information as it appears on the monthly bill and will be attached with the bill. Thus, the offer letter will be delivered to every customer along with the bill.
At the bottom of the offer letter will be a form in which the subscriber will fill in the number of shares (in figures as well as words) that he wants to buy and enter the amount that he will pay. Then he will fold the self-addressed, postage paid letter and mail it. The DISCO will enter the payment in the next month’s bill. It may also confirm the sale of shares through a letter to the customer.
The DISCO will deposit the total amount collected through the sale of shares in the Government account with the State Bank towards the retirement of public debts because that is the primary objectives of the privatization.
Offer to be repeated The DISCOs will repeat the offer of shares to customers once every quarter or once every six months. This will facilitate purchases by small customers, who can buy shares from their savings only at intervals. A DISCO will also offer its shares to every new customer on approval of his new connection. As a result, the paid-up capital of every DISCO will continue to grow while simultaneously it will get additional interest-free funds to finance expansion and modernization.
No premium on shares The shares will be sold at face value and no premium will be charged. The reasoning is simple. The people own DISCOs, while the Government is only a representative of the people, or an attorney, so to speak, not the real owner. Therefore, the Government, being only a manager of DISCOs, cannot ask the people – the real owners – to pay any premium on shares.
Direct sale and purchase The sale and purchase of shares will be directly between a DISCO and its customers. If a customer wants to sell his shares, he will surrender his allotment letter against a receipt at the nearest DISCO revenue office or service center. The revenue office of the area, which issues monthly bills to the customers, will immediately give credit to the subscriber’s account for the value of the surrendered shares, while sending the allotment letter to the DISCO head office for cancellation of shares. The credit amount will then be adjusted in the monthly bill of the customer.
This arrangement will have a great benefit. The customer will get his payment for the shares while the DISCO will not have to strain its cash reserves.
Payment of dividends The payment of dividends will also be through credit in the monthly bill of the customer-shareholder. As soon as dividend is declared, whether interim or final, the amount will be credited directly to the bills of all customers-shareholders. The great advantage of this arrangement will be that the DISCO will not have to spend a huge amount on the preparation, issue and safe delivery of dividend vouchers to the customers. It will also save a similar amount on the payment of dividends through banks. The DISCO will have to neither deduct this extra expenditure from the total dividend amount nor add to the company’s normal expenses. In either case, the customers will be the beneficiaries.
Management The Chief Executive of a DISCO will be elected directly by the majority of total shareholders. Before election, every candidate will be required to submit to the shareholders his plan for improvement in operations and services. Every shareholder will have a single vote, irrespective of the number of shares held by him, to avoid dominance of the rich shareholders.
At the end of every quarter, the Chief Executive will submit his progress report, comparing achievements with his target, in a letter that will be attached with the next month’s bill of every customer. At the end of every 12 months, the Chief Executive will seek a vote of confidence from at least two-thirds of the shareholders. He may continue in office as long as he gets a vote of confidence. It will always keep him on his toes.
There will be no need for a Board of Directors as they turn out to be mostly parasites. (The Boards of Directors did little to stop the rot in PIA, Pakistan Steel and other public sector organizations.) However, the powers of the Chief Executive will be defined precisely. In all major matters, he will seek approval of customers through a referendum.
Benefits of being a customer as well as a shareholder A DISCO’s customers will benefit in several ways as its shareholders:
a) They will get the entire profit that accrues to their DISCO. After all, the profit will come from what they themselves pay to the DISCO through their monthly bills.
b) They will get the benefit in both ways: (i) higher dividends in case of profit due to efficiency in operations and reduction in expenditure and (ii) better services due to investment in infrastructure. 
c) The ordinary operations and services will improve tremendously as the Chief Executive will keep the employees on their toes in removing complaints and problems. (Poor service will not get him vote of confidence next year.)
Main benefits The implementation of this proposal will have the following main benefits:
a)     The process of privatization can be started immediately. There will be no need to spend time in making any preparations.
b)    The privatization will be done on "as is" basis, without any need for any detailed studies or restructure.
c)     In a unique situation, the shareholders will also be the customers of the DISCOs and will be the direct beneficiaries of both lower costs and higher profits.
d)    Every DISCO will have the widest possible ownership base. No individual or group will become the majority shareholder. (In case of KESCO, we know what may happen if it occurs.) As a result, there will be no pressures to increase profits at the cost of the customers.
e)     The capital base of the DISCO will continue to expand, allowing it to have interest-free funds to invest in the expansion of its infrastructure. In other words, the expansion and its financing will occur simultaneously.
f)      The middle class investors will get an opportunity for a very safe and profitable investment.
g)     Despite the huge volume of the DISCO shares, there will be no volatile effect on the stock exchanges because the shares will be sold and purchased directly by the DISCOs.
h)    With the entire management being Pakistani, the security and protection of national interests will be ensured.

Reducing cost of electricity
The DISCOs, as buyers, will decide how much to pay for electricity, not the producers determining its price. In other words, DISCOs will decide what price to pay for electricity and to get supplies from which producers.
On the purchase side will be DISCOs: (Hyderabad, Quetta, Multan, Lahore, Gujranwala, Faisalabad, Islamabad, and Peshawar.) Add to them Karachi Electricity Supply Company, which may be asked to sell all its shares to its customers.
On the supply side will be: hydel power producer (WAPDA), thermal power producers, independent power producers, rental power plants, nuclear power plants, others. New power producers will emerge, with their own financial resources. The government will no longer have to allocate its limited resources for power generation, including large dams.
PEPCO will be disbanded because central control of purchase and distribution of electricity will no longer be required. (It is already on its way to abolition.) As a result, its agreements with power producers will be cancelled. (It will not be legally possible to impose present agreements on privatized DISCOs, which will now be public limited companies, owned by its customers.) NEPRA will also be abolished because it will no longer be able to impose its prices on DISCOs.
Consequently, power producers, both public and private, will have to negotiate directly with DISCOs and offer lowest possible prices. DISCOs will not sign long-term agreements because they will always switch to new producers that offer lower prices. Thus, the present producers will have to decrease their costs all the time so that they remain competitive. As lower prices become available, the expensive power producers will go out of business. National Transmission Dispatch Company will continue to get power from producers and transmit to DISCOs, in accordance with the agreements between the sellers and buyers.
Not subject to NEPRA decisions, new power producers will offer lowest prices to DISCOs. Hydel, wind, solar, coal and other alternative energy sources will flourish. The power plants running on very expensive furnace oil and scarce natural gas will seek cheaper energy or will have to be shut down. Chief executives of DISCOs, being answerable to customers-shareholders, will dare not accept higher prices from any supplier at the cost of lower prices available from others.
The suppliers will offer electricity to buyers at their lowest prices. The buyers will select suppliers and place orders with them, depending on price, convenience and other factors. A DISCO may persuade power producers to set up generation plants in its areas on mutually agreed terms.
Line losses A major cause of financial difficulties of DISCOs is line losses. The Chief Executive, under our plan, will formulate targets for reducing line losses to the absolute minimum. He will ensure that his field staff meets the quarterly targets, as he will face a vote of confidence after 12 months.
Power theft through various means will become impossible. If it occurs, the field staff will face the wrath of the bosses as well as the customers. Default in payments of bills, even by the powerful and government departments will also not be tolerated. A DISCO will not have any reason not to recover payments, as it will not be under political pressure. It will be answerable to its customers, not any government authority.
Conclusion The privatization in the past has been more beneficial to investors than the people, who are the real owners. The proposed method will give all benefits to the people, who will be consumers as well as shareholders. The same method may be adopted of Pakistan Telecom Company (PTC), whose customers can be made also shareholders for the shares still owned by the Government. The method of privatization will be a new model for other industries as well as for other countries.