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EDITORIAL Prime Minister AB Vajpayee during his address to the nation minces no words when he says that his Government is going to have 'zero tolerance' as far as terrorism let loose by .....more Forming of coalition Government of Congress and NCP in Maharashtra indicates rank opportunism and cheating of electorate. Hardly the ink has dried on the recent polemics and rhetorics of choicest type used during Sept/Oct polls against each other, there is the ....more |
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Pakistan's
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EDITORIAL Prime Minister AB Vajpayee during his address to the nation minces no words when he says that his Government is going to have 'zero tolerance' as far as terrorism let loose by Pakistan on this country is concerned. The message to the hostile neighbour is very clear. The time for trying India's patience and capabilities is over and that India is determined to wipe out last of the terrorist from its soil, J&K State and NE States included. Of course Prime Minister has mentioned another item on top priority agenda i.e. rooting out corruption and having zero tolerance for the corrupt. But that is a topic so deeply rooted in the system that any claim on this count shall have to wait decades for getting visible results. India has already shown how determined it is and what its valiant jawans could achieve during Kargil war. The misadventure has already caused political convulsions in Pakistan with Nawaz Sharif dislodged from power and Army declaring itself all supreme with suspension of constitution and all the provincial and national assemblies. To be precise it is Kargil that has consumed democracy itself in Pakistan, loss of power for Nawaz Sharif notwithstanding. It is probably realisation of this futility of challenging India on the military front that Chief Executive of Pakistan military Government Gen Parvez Musharraf has offered to talk peace with India for resolving all outstanding issues, Kashmir included. The mischief lies in his commitment to the Jehadis operating in Kashmir for all type of support needed to continue their 'struggle'. Musharraf simultaneously orders de-escalation on the International Border in J&K by withdrawing Pak troops to peace-time positions. Strangely, he tends to undermine caliber of this country's leadership by mentioning support to transborder terrorism (helping Mujahideens), withdrawing from International Border but not from Line of Control (LoC) and then offering to enter into dialogue - unconditional, constructive and result - oriented. Only fools could respond to such type of duplicity and hypocrisy. If Gen Musharraf or any ABC who rules Pakistan is genuinely interested in de-escalation and promotion of peace with India, the prescription of Brijesh Mishra, National Security Advisor, has to be taken seriously by Pakistan. Not that India does not want peace with Pakistan. In fact, for every one step taken by Pakistan towards peace India is ready to go forward two steps. But surely no Government worth its salt can compromise national security. In this context Brijesh Mishra makes it amply clear that Pakistan must stop transborder terrorism forthwith for any dialogue to be meaningful. More than anybody else Gen Musharraf knows that except for mercenaries, including Pakistanis, militancy in J&K would have long been wiped out. He has also tasted the power of our valiant jawans when they dislodged Pakistanis from the otherwise invincible heights where Pak soldiers were deeply entrenched. And the tally of mercenaries now being killed in J&K in counter-insurgency operations do indicate that this time round it is 'zero tolerance' which is already at work. So resumption of meaningful talks with any Pak Government is definitely conditional to stoppage of transborder terrorism. In this context one can also mention PoK Prime Minister Sultan Mahmood Choudhury's statement wherein he talks of converting PoK into base camp for launching mass struggle (infiltration of terrorists). Brijesh justifies such reservations attributed wake to loss of trust during Kargil war imposed by Pakistan on this country. Obviously Pakistan has to prove its sincerity before dialogue could be resumed. By sincerity it implies that shattered confidence has to be built up afresh. This can best be achieved by definite commitment from Pak Government of any brand that it would respect LoC, cease cross border infiltration of mercenaries and stop all other clandestine operations carried out by its ISI. This is also in tune with the spirit of Washington Declaration wherein Clinton had mentioned these aspects as pre-condition to resumption of Lahore Declaration process. Brijesh Mishra likes to remind present Government of Pakistan that confidence building measures have to precede any meaningful dialogue. And if Pakistan still does not understand what 'zero tolerance' exactly means in military terms, the same can be enunciated in layman's language i.e. stop fiddling around with our borders either through regular troops or mercenaries on its pay roll. It will be quite safe to assume that right now priority for Musharraf is different which can be summed up as consolidation of his rule, rebuilding shattered economy and somehow stop its isolation in the world community. These compulsions motivate him to convey his readiness for unconditional talks but Musharraf's track record as 'untrustworthy' is more acute than that of Nawaz Sharif. So India shall have to watch for quite sometime before dialogue can be resumed. Forming of coalition Government of Congress and NCP in Maharashtra indicates rank opportunism and cheating of electorate. Hardly the ink has dried on the recent polemics and rhetorics of choicest type used during Sept/Oct polls against each other, there is the marriage of convenience. Strange bed-fellows now occupy the same hotel room. No amount of justification or alibis could ever satisfy the mature voters of Maharashtra that gave clear verdict in favour of the Shiv-Sena BJP combine because they fought under pre-electoral alliance and shared the same platform during electioneering. It is quite another thing that simple majority remained elusive. If NCP and Congress were to come together, what was the necessity of coming out of Congress. Officially, Pawar and his bandwagon still stands ousted from Congress for six years. And yet they are in alliance with the party which they opposed on several fundamental issue that are still wide open and thus relevant. First, Sharad Pawar has vowed to never accept Sonia as the PM of the country due to foreign origin. But same Sonia is now the Chairperson of the Congress Parliamentary Party. What NCP MPs would do in Parliament? Will they support Sonia or oppose her? PA Sangma who is co-founder of the NCP hates to see joining hands with Congress for formation of Government in Maharashtra. He would have preferred NCP to sit in Opposition. Second, how the electorate would react to this bonhomie? Surely, NCP MLAs find it hard to face the people who elected them to oppose the Congress. Third, Sharad Pawar has definitely succumbed to Congress by surrendering Chief Ministership. In the process it has gained some coveted slots which are favourable to look after his family business interests worth hundreds of crores. This stands manifested from the portfolios allocated to NCP. Such double standards may not harm Congress but surely it erodes Pawar's credibility in public esteem. The least Pawar and his NCP should do is to join back Congress instead of practising such dual standards which cheat the electorate. |
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Pakistan's
tragedy Isn't it a tragedy for the people of Pakistan that, while India was busy installing a democratically elected government in Delhi, their army overthrew a democratically elected government in Islamabad? Unfortunately, in its 50-years' of existence, Pakistan has had to undergo only interludes of either democracy or dictatorship. However, given the complexities of that country, it will be difficult to say anything definite on Tuesday's coup in which the army chief, General Pervez Musharraf, has ousted the Prime Minister, Mr. Nawaz Sharif, and put him under house arrest. It may be politically correct to say that democracy is good and military dictatorship is bad. But, at the same time, one should not ignore that people in major cities like Karachi and Lahore have come into the streets and hailed the army's action. How has such a tragic situation come about in Pakistan? If Pakistanis were disgusted with democracy, it is rightly so because their 'elected' governments were disgusting. So authoritarian and corrupt were the governments, especially that of Ms. Benazir Bhutto and Mr. Sharif, that people became nostalgic about army rule. They could not believe how army rule would be worse than their democracy. It may be noted that such sentiments were freely expressed in public. Consider Mr. Sharif's 'record': A year ago he dismissed the then army chief, General Karamat; in the months before that he had shown the door to the President as well as the Chief Justice of the Supreme Court. In an attempt to intimidate the judiciary, Mr. Sharif unleashed his goons on the Supreme Court. His behaviour with Gen. Musharraf was no way better. A couple of weeks ago Mr. Sharif extended the General's term by another two years; and on 11 October 1999 he dismissed him while the latter was away in Sri Lanka on an official visit! The country stood torn vertically with tribal and sectarian warfare. And the less said, the better about the economy. To cap it all, Mr. Sharif brazenly indulged in self-aggrandisement. In the post-Kargil scenario, the possibility of an army coup in Pakistan has been in the air, especially after the Americans openly expressed concern over undemocratic actions in the country. Army rule is a familiar phenomenon in Pakistan, and the army has never been far from power, for it has remained the power behind the civilian governments. This time round, Gen. Pervez Musharraf is likely to tread carefully and set up a caretaker civilian structure instead of opting for a total military takeover because of international repercussions, the most important being the US administration's problems in dealing with a military regime. The State Department has carefully refrained from terming the developments in Pakistan as an army coup, since an American law mandates the automatic imposition of economic and military sanctions in the events of a coup. Relations between the army chief and Nawaz Sharif were on a downward spiral ever since the withdrawal of Pakistani forces from the Kargil sector. The political establishment's attempt to fix the blame for the adventurism in Kargil on the army had generated a great deal of dissatisfaction among the armed forces. The army chief had made it clear that the Kargil withdrawal was a government decision. The most eloquent sign of the strained relations was the sight of the army chief arriving in civilian clothes to see off the Prime Minister on his way to Washington. A chief in mufti to see off the head of government, is unheard of, whatever be the circumstances. Barely two weeks ago, Gen. Musharraf had made a public statement that he had no differences with the government. But the strains had continued to deepen. However, by the time he made his moves to oust the second army chief in just one year his image had taken a substantial beating. His crackdown on the Pakistani media, allegations of misrule and the coming together of a 19-party opposition alliance to demand his resignation had dented his democratic credentials. Media reports in Pakistan had claimed that the two-and-half-year old Nawaz Sharif government faced a political coup engineered by a group within the ruling party through a no-confidence motion. Though he could ward off the threat within the ruling PML, there were few to mourn his departure when he lost the face-off with the Army chief. Conditions in Pakistan have not been stable. It has been reeling under a severe economic crisis, the IMF loan has still not firmed up. There was an outbreak of sectarian violence in the country. In the past the sectarian violence was usually restricted to the province of Punjab, but this time it had spread through the country. About 40 persons had, been killed in two weeks of disturbances. The opposition protests began with a successful nationwide traders strike on September 4. It began as a movement against the levy of general sales tax, which was taken over by the opposition alliance to demonstrate against a beleaguered government. Strike on September 9, against levy of general sales tax, huge rally on August 14, independence day. September 12 two-day strike, third in a month was partial success in Karachi. Hundreds of people were detained in a clear sign of Government nervousness over the possibility of a snowballing effect as unpopular economic measures prescribed by IMF began to effect the people. Fresh taxation in the crisis-ridden economy alienated the trading and business community, Sharif's traditional supporters. The growing fears of a military coup prompted Nawaz Sharif to rush his brother Shahbaz Sharif, chief minister of Punjab to the US to hold consultations with top State Department officials. The US later issued a statement saying it would strongly oppose any extra-constitutional change in Pakistan. In the past month, Washington expressed its concern on developments in Pakistan on several occasions. It initially spoke out against the possibility of anti-democratic means to oust the elected government. Then, it chastised the Nawaz Sharif government for a crackdown on the opposition, and later balanced its response by criticising the opposition of trying to destabilise the elected government. The open interference by American officials through public statements in Pakistan's domestic affairs, would not have been appreciated in the country. Nawaz Sharif was under tremendous pressure from Washington to take action against the Taliban. The sectarian violence had been blamed for the first time by the government on "militants who had received their training in Afghanistan". The Nawaz Sharif government had begun to initiate action against the flow of drugs and weapons from Afghanistan. Gen. Musharraf belonged to the Special Services group which had been directly involved in Afghanistan affairs. Government action and statements would also have disturbed the close links the sections of the Pakistani army have with Afghan militia. The uneasy relationship between the army chief and the civilian government was obvious in Gen. Musharraf's dismissal of a senior corps commander, Lt. Gen. Tariq Pervez, related to a senior minister in the government, on the suspicion that the commander had met Nawaz Sharif without permission of the army authorities. However, Nawaz Sharif chose to retaliate by dismissing the army chief, without taking adequate precautions. He appointed ISI chief Lt. Gen. Khwaja Ziauddin as the new army chief of staff. Not in the direct line of command within the Pakistani Army, Gen. Ziauddin was not in a position to command the loyalty of an army whose officer corps was already smarting against the civilian government's tackling of the Kargil issue. Gen. Musharraf's sacking was announced even as the army chief was on his way back to Karachi from Colombo where he had just attended the 50th anniversary of the Sri Lankan army. At Karachi airport, Gen. Musharraf was met by the area corps commander and a substantial number of younger officers, setting off the train of events which resulted in the ouster of the Nawaz Sharif Government. Gen. Musharraf's address to the nation, on Wednesday morning, is ambiguous but he promises to spell out his plan 'soon'. As this is the first step of all generals after they have overthrown the government, Gen. Musharraf is obviously trying to gauge the reactions _ more so, the mood among western countries and lending agencies. Time alone will tell whether he is guided, as he says, by his 'sincerity, loyalty and selfless devotion' or he harbours any dreams of becoming another martial law administrator like Gen. Zia. One hopes that the General will utilise the opportunity he himself grabbed to establish the rule of law and a new foundation for democracy in Pakistan. It is in his hands now whether he wants to enter history as a saviour of Pakistan or as one more of its tormentors. For India, it is a legitimate concern that there is instability in Pakistan which is also a nuclear power. But Tuesday's coup only ended the confusion as to who was in-charge. At least, India now knows whom to deal with. INAV |
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Banking sector reforms One of the major issues the new government will have to tackle immediately is to initiate financial sector reforms, restructuring of the public sector banks in particular. As has been pointed out by the M. S. Verma Committee the government has very limited time to check the spread of sickness amongst a large number of public sector banks. Currently it is limited to three banks but the six others are developing symptoms. In its report submitted to the RBI, the Verma panel has suggested a Rs. 5500 crore rehabilitation for the three sick banks _ Indian Bank, UCO Bank and United Bank of India. For others, it has put forth comprehensive remedial measures to stall the desperate situation. For the three specific banks it has suggested recapitalisation of their equities, setting up of an independent Asset Restructuring Fund (ARF) and Voluntary Retirement Scheme (VRS). The ultimate objective is to cut down the banks' staff strength and runaway administrative expenditure. According to the panel the staff strength has to be reduced by a minimum of 25 per cent. It has linked the disbursement of the recapitalisation fund to these banks on reducing the staff/or freezing the wage hike for the next five years. The panel has ruled out mergers and privatisation of the sick or potentially sick six banks for the time being. The panel feels that these banks can be privatised only after their financial health is restored. No private sector banker will come forward to take over a sick unit. Even if it offers to do so, the bank's bargaining power will be next to nil. For the big banks like the SBI, the panel has suggested reducing their size through diversification of operations such as going into the insurance business. This will help them to redeploy their employees gainfully without resorting to large scale retrenchment. For some odd reason, it is argued that the panel has done nothing more than reiterate the recommendations of the Narasimham panel set up way back in 1991 and again in 1998. This criticism is not justified because for an identified malady, there can be only one prescriptions. Yes, over a period of time, the prescription can be improved upon. Maybe, the Verma panel has suggested the same remedy but along side it has also given details of administering the dosage. One can, however, point out that the report does not stress an urgent need to reform the laws governing the banking sector. Unless the legislation is in place, the report has no meaning. First and foremost the Bank Nationalisation Act and the State Bank of India Act will have to be amended before any initiative is taken towards restructuring. At this point one must understand as to why the banking system ran into such serious difficulties. The answer lies in the fundamental philosophy behind the public sector concept. Mrs. Indira Gandhi had, with one stroke, brought the banks under the public sector. The arguments put forth, in favour of such a bold and expensive decision, were that the private banks were not lending to the priority sectors, especially the small farmers and the small scale units. Bank nationalisation was treated as a vehicle to tackle the problem of poverty in the rural and semi-rural areas through priority lending at concessional interest rates not exceeding 4 per cent. It was also made mandatory for the banks to lend 40 per cent of their overall credit portfolios to the poorer sections. Though the principle of 'lead bank' was simultaneously suggested, the 12 public sector banks had to give it up over a period of time to meet the political diktats of the then political bosses. In a desperate bid to increase their priority lending, the banks began to expand their branch network both in the rural, semi-rural and urban areas. This resulted in an unhealthy competition amongst the banks. A vast network of rural branches sharply increased their staff strength and also operational expenditure. While the priority lending improved, the real time cost of these increased sharply. With a stiff competition from the postal saving schemes, these branches failed to attract enough deposits to offset the rise in their operational costs. The blame cannot be squarely put on the priority sector. The government came out with rehabilitation of sickness package for the large-scale industries in the late 70s. These industries borrowed heavily for unviable projects and began to default. So also the small scale entrepreneurs. For them, the easy course on to hedge repayment was to move the courts. With poor bankruptcy laws the banks' NPAs began to mount. Today, they stand at an accumulated level of Rs. 45,000 crores. The Verma panel's recapitalisation route is that the government should take over once for all the accumulated losses of these banks and hand them over to the independent ARF. The fund would then sell these assets at the right time. The Rs. 5500 crore investment in three banks has to be done within the next three years. These banks will also have to shut down their overseas branches and concentrate in potentially viable regions and services. The banks should ensure that they do not invest in cross-country regions but within the region of their origin. To ensure the success of the scheme an attractive VRS has been suggested. The success of the scheme depends entirely on the political will and courage to handle the trade unions. They will have to be persuaded not to create hurdles. How far the government can succeed in containing the demands of the work force still remains to be seen. The banking staff are the most pampered of the government employees today. They resort to strikes at the drop of the hat. Therefore, strong political will is required to implement these recommendations. There is also an urgent need to implement these reforms otherwise it will be too late. There is already a growing pressure on the government to allow private and foreign banks to come into operation. The government has already made a commitment to this effect. The opening up of banking segments to private players without restoring the health of the public sector banks will spell disaster. The new banks will induct the latest technology and provide best services. They will not provide these services for free but charge their pound of flesh. This alone will bring them a lot of cream. The emergence of new banks will also mean greater competition both for deposits as well as large borrowers. As is the practice all over the world, the foreign banking institutions will introduce new services, reduce the lending rates to entice large borrowers and hike deposit rates to woo the small savers. Do the public sector banks stand a chance of survival? Had the government implemented Narasimham panel's first report, the present crisis could have been easily avoided. Hind-site does not help mush. But it is never too late to amend. INAV |
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