Political Economy of Reconstruction

By S.M. Naseem

SIX weeks after the October 8 earthquake, the economic effects of the natural disaster are beginning to unfold. The immediate effects of the natural disaster on the economy may well be positive, largely as a result of the stimulus provided by the massive relief work underway.

However, the extent to which the relief work benefits the affected people and the long-term impact on the economy remain ambiguous.

No doubt the government has succeeded in converting an initial lukewarm donor response into pledges for very sizeable international funding. However, the manner in which the government has mobilized its support by assuring continued obeisance to its political patrons and the way the aid is to be disbursed, notwithstanding the solemn pledges of transparency and accountability, are likely to make Pakistan even more dependent on US-sponsored assistance than before. It is not unlikely that Pakistan may again be asked to enter into an IMF-monitored programme for channelling external assistance.

The main concern with regard to pledges of external assistance received by Pakistan in the November 19 meeting in Islamabad is not simply that the major proportion of these pledges are in the form of loans rather than grants, but whether they will prove adequate for the rehabilitation and reconstruction purposes and whether they will permit the reorienting of our development priorities.

The prospects of rehabilitating the earthquake-affected areas depend not only on the extent to which the promised foreign aid and domestic funds are disbursed, but also on the way the relief and rehabilitation programme is planned and carried out. If past experience is any guide, ad hocism will have the upper hand over planning, and vested interests will bypass the deserving, resulting in a lot of leakages which accompany programmes with a high component of foreign aid and charity.

There is thus likely to be many a slip between the cup and the lip. What is more, the government does not have a coherent plan regarding reconstruction other than the hurriedly put together needs assessment report by the ADB, World Bank and the UN agencies, whose primary aim was to attract donor funding at the conference. The government’s own planning machinery, which like the disaster management outfit has been largely dysfunctional, has hardly played any useful contribution in shaping the country’s development strategy. Through the attrition of its professional capability and the government’s indifference to its role, it has become incapable of providing a credible analysis of the economic consequences of the earthquake and preparing a reconstruction plan consonant with the country’s resources and objectives, without the help of foreign agencies.

Ad hoc announcements such as doubling the share of GDP on education or deferral of the purchase of F-16s, meant to appease an increasingly agitated public opinion against the regime’s misplaced priorities, do not make a consistent and coherent plan. The government needs to present an interim budget and a five-year earthquake reconstruction plan, as an integral part of a revised medium term development plan, to be debated by parliament and civil society.

The parts of the country which were severely affected by the earthquake formed a relatively small proportion of the national economy. They were both underdeveloped and under-populated relative to the rest of the country and depended largely on remittances from predominantly male migrants from these parts to various urban centres of Pakistan, but primarily to Islamabad and Rawalpindi. A considerable proportion of the migrants from Azad Kashmir have been living in the UK since the early days of independence, but still send remittances to their relatives.

The economies of these areas are likely to experience further out-migration, especially among the relatively more affluent sections of the population, while the more indigent survivors of the disaster are likely to be left behind, with heavy dependence on doles being provided by the government and relief agencies. The current strategy of the government has the potential to make this area a vast beggar house, living on charity and compassion, rather than on productive employment.

The best way to avoid this situation is to urgently introduce an employment guarantee programme, which would involve the local population in clearing the debris, building village roads and mountain tracks, agricultural terraces, schools, health centres and other local infrastructure destroyed by the earthquake. Such a programme will help revive the local economy and keep poverty at bay. It will also induce the local population to stay and participate in the reconstruction work, which will otherwise be hijacked by unethical contractors, who were in part responsible for the construction of the unsafe buildings which collapsed.

An important feature of the larger half of the earthquake-affected area, viz Azad Kashmir, is the heavy presence of the army because of the existence in it of the Line of Control. The earthquake has reportedly caused very heavy casualties among the troops bunkered along this volatile border and of the military infrastructure including hospitals, training camps, roads, bridges and hospitals.

The figures for these human and material losses have not yet been revealed, neither are their estimates included in the reconstruction costs of the earthquake prepared by the ADB and the World Bank in collaboration with the government of Pakistan. If the government really stands by its promise of transparency, it must come out with a detailed paper on these losses and on how it intends to repair them.

The government’s recent proposal to demilitarize both the Indian-held and Pakistani parts of Kashmir as a precursor to a larger settlement with India could well be prompted by the large military casualties and the harsh conditions in which a substantial force has to be stationed there in very unfavourable living conditions. In case India accepts the proposal — a rather unlikely prospect — the withdrawal of Pakistani armed forces from the area is likely to adversely affect the employment and livelihood of the surviving population which chooses (or is forced to) continue to live there.

The only way this unhappy consequence could be avoided is through a massive development effort jointly undertaken on both sides of the LoC, with the active participation of India and Pakistan, as well as expatriate Kashmiris and with sizeable help from friendly dynamic economies such as Japan and Korea. However, Pakistan’s continued insistence that trade and economic relationships with India will not be normalized until the Kashmir issue is resolved will make such a plan a non-starter.

Moreover, the fact that virtually no economic development took place in Azad Kashmir, during the last half century or so, while Indian-held Kashmir received considerable help from the Indian government in building its social and physical infrastructure and in developing the valley’s tourist potential, which have suffered a setback since the 1989 uprising, is likely to give India an advantage in winning the hearts and minds of Kashmiris.

The government’s linkage of the solution of the Kashmir problem with that of the reconstruction effort, although seemingly well-intentioned in principle, is likely to make the transparency of the latter much murkier. Such a linkage confuses the medium-term issues of rehabilitation and reconstruction with the long-term issues of Kashmir and reconciliation with India.

By making a purely economic and humanitarian issue subject to the solution of long-term political issues, the government is provided with a smokescreen to avoid the promised transparency and accountability of the vast sums received by the government from international donors, expatriates and ordinary citizens.

The problem with the present military-dominated regime is that it is keen to take credit for solving all the problems that the country is currently faced with, within the term of its tenure, which it knows cannot be extended indefinitely. The regime is continually enlarging the agenda which it deems necessary to implement before relinquishing its self-imposed responsibility for solving all the problems, domestic and external, that have backlogged in the past 50 years.

Unfortunately, as is widely perceived, the military itself has largely been responsible for the creation and aggravation of many of the problems it is keen to resolve now, although it has never admitted any responsibility for them nor has it instituted or implemented any enquiry into its blunders. The increasing friction between civilian and military actors in the administration of the relief programme testify to its ineptness in handling humanitarian problems which require sensitivity and understanding, qualities for which the armed forces have not been trained.

In expanding further its already vast political and economic agenda, the regime’s real aim is to validate its legitimacy and extend its continuing hold over the country’s polity, which has stagnated and is stunted because of the military’s continued interference in civilian affairs, including the management of the earthquake disaster relief and reconstruction programmes.

The ultimate aim of such an exercise has little to do with rendering the LoC irrelevant, but much more with making political parties and civil society organizations redundant. Yet the challenge facing the country now makes it imperative that the military recognize the inevitable need for limiting (if not reversing) its political role and allowing the civilian institutions to play their constitutional duty of exercising their oversight on vital national expenditures, including military expenditures, and in reaching a national consensus on major political issues, including Kashmir and long-term political and economic relations with India.

Source: The Dawn

Date Created: 12/05/05

Date/Time Last Modified: 12/8/2005 12:03:18 PM

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