Daily Excelsior... Editorial

EDITORIAL

Our forests require
healing, not hype

Rising unemployment
scenario

By Ramesh Kanitkar

Plus side of the American economic crisis

By Dr Bharat Jhunjhunwala

Musharraf's General
warns army

By Sushil Vakil

EDITORIAL

Our forests require
healing, not hype

We fear that the truth may be a casualty in bitter debate over the Kundal Committee report on clutter in the Forest Department. There are allegations and counter-allegations as a result of which quite a few questions are left unanswered. Before we proceed further let us point out that we are quite happy with our coverage of the entire episode. It is not always that a newspaper gets one journalistic scoop after another in quick succession. We have been the first to bring the report to light for the benefit of people at large. We have also been the first to disclose the Government's action-taken report. At the same time, we have given detailed versions of Forest Minister Qazi Mohammad Afzal and Finance Minister Tariq Hamid Qarra both of whom are in the eye of a storm. Anyone who has gone through Qazi's account is stunned by his admission about prevalence of a loot-and-scoot situation in the ministry under his charge. Mr Qarra, on the other hand, has made a startling revelation while combating the accusation that the decision to import timber was mala fide (the process was set in motion when he was the Forest Minister). According to him, the Planning Commission had grilled "us" at a meeting last year for the State's forest cover having shrunk by 16 per cent. He has also informed that the Chief Minister himself had told the Commission that the gap was being bridged by importing timber. The Commission had appreciated this approach, Mr Qarra has claimed. The Kundal Committee has not categorically said whether or not the import was necessary. It has not mentioned the two ministers by name. It has raised doubt that an artificial scarcity was exploited by concerned officials to push their agenda for imports. The burden of its argument seems to be that the Minister had indeed approved of it, the officials involved were of dubious integrity and, one of them actually patronised the company that was recommended by the State Forest Corporation (SFC) for being awarded the import contract and whose tender was eventually found to be valid. One of the concerned officers was Mr Ejaz Ahmed Bhat who is facing a serious charge of holding dual citizenship of India and the United States and the other is Mr G.H. Marazi who is accused of having patronised the company. As is well known by now, both of them are under suspension. The Kundal Committee, as mentioned in this newspaper earlier, has also come down heavily upon yet another official, Mr R.D. Tiwari, for dereliction of duty and fraudulent financial deals.

However, it needs to be noted that nobody is talking at the moment about the trio of officials. The focus instead is on the two ministers and all that the Kundal Committee has said about the happenings with them at the helm of the Forest portfolio. Indeed, it is ironical that there is no hullabaloo yet about a third political figure mentioned in the report. Is it because he is not a minister any more or it is because there has been no discussion as such on the Kundal Committee in the legislature so far? Mr Abdul Majid Wani, MLA from Doda and a Congress associate, and his two family members are exposed to the charge of having received Rs 26.98 lakhs as excess payment by the SFC. So far as Qazi is concerned there are several instances of alleged favouritism listed against him in matters of appointments and awards of tenders. The Kundal Committee has criticised frequent transfer of forest officials in violation of the Cabinet decision. One of its extremely grave findings is about fiddling with the minutes of the SFC. In all, it has pointed out 32 cases of irregularities. For its part the Government has referred them to varied agencies like the Vigilance Organisation and Crime, among others, for thorough investigation. By all means the guilty persons should be unmasked. Truth and truth alone should prevail in the end. In the meantime, however, the danger is that the Kundal Committee report may become a political plaything. War of words has already hotted up between the People's Democratic Party (to which both Qazi and Mr Qarra belong) and the National Conference. With the Assembly elections approaching this year the NC is aware that it will have a potent weapon in its hands in the Kashmir region in particular if it is able to secure the resignations of Qazi and Mr Qarra or either of them. It is not surprising if it wants sweet revenge for other reasons too. Qazi had defeated NC president Omar Abdullah in Ganderbal and Mr Qarra made a dent in its stronghold in Srinagar by winning the Batmaloo seat in the last polls in 2002. It is not small wonder then that Deputy Chief Minister Muzaffar Hussain Baig, who is also a PDP stalwart, has risen to the defence of his party colleagues. He has argued that the Kundal Committee has made merely tentative conclusions as it has prefaced most of its remarks with the expression "may be". It is left to him to elaborate that the company which recommended and selected for timber imports never got the contract. The exercise pertaining to it was cancelled once the link between it and a forest official was established.

Clearly, the last word has not been heard in this regard. It is doubtful either that the curtain will be rung down on this turbulent chapter with the adjournment of the ongoing session of the legislature. By making vociferous protests in both the Houses and staging a march inside the Secretariat premises the NC has given an unambiguous message that it will take the matter to the people. On the other hand, Mr Baig's assertion leaves no doubt that the PDP is rallying to meet the challenge at the hustings. We can all, therefore, rest assured that we will hear the echo of the Kundal report till the final round of the polls is over. What will be its fate afterwards? What will happen to our forests meanwhile? Will they be safe? Will bald patches multiply? Who has ever said that our woods are lovely, dark and deep?

Rising unemployment scenario

By Ramesh Kanitkar

Prime Minister, Dr. Manmohan Singh, has asked the Planning Commission to create more job opportunities during the Eleventh Plan period. It is a matter of serious concern that while the economy is growing at a fast pace employment opportunities are either shrinking or not growing in proportion to the overall growth of economy. According to the Economic Survey 2007-08, the total employment in the economy grew at 0.98 per cent per annum over 2001-02-a sharp decline from 2.04 per cent per annum in the 1990s. This was largely due to negative growth in employment in agriculture, mining and power sectors.

In fact, in manufacturing, the growth of employment was 2.05 per cent in 2001-03-a small drop. The fastest growth in employment (between 5 per cent and 7 per cent per annum) was in construction, trade, transportation, storage and communications, and financial services. All these signify the structural changes that are taking place in the economy.

Within the organised sector employment (which constitutes about 7 per cent of total employment), public sector employment fell by 0.03 per cent per annum in 2004-06 (as against the annual growth rate of 1.52 per cent in 2000-01) whereas employment in the private sector grew by 1.87 per annum per year in 1994-2000 (as against 0.45 per cent in 1983-94). Future growth in organised sector employment would primarily depend on employment growth in the private sector. Given that 'downsizing' is the buzzword everywhere, are we heading for 'jobless growth'? Where will the future generations find employment?

Direct employment in a state-of-the-art industrial plant would be much less than in an older plant producing the same amount of output of, say, steel. But that is not the full picture. More machines will require more people to service and repair. The use of computers in a steel plant, for example, gives rise to many other firms which supply the machines, software, printers, spare-parts, paper, ribbons, cartridges and so on and creates jobs outside the steel industry, often in the services sector. The scope for computerisation is still enormous in India, for example, in post-offices, stores, schools, colleges, hospitals, doctor's chambers, municipal offices, land registration, and so on, which can absorb a great number of people, directly and indirectly.

Construction and housing holds enormous promise for employment generation. The government will have to devote a higher fraction of expenditure on infrastructure development and maintenance-on roads, irrigation, schools, hospitals, ports, power plants, land development and building of new townships. The use of various electrical/electronic equipments at home and offices is bound to go up with growing affluence and advent of new technologies. This would continue to open up job opportunities for people with skills to repair TVs, refrigerators, music systems, personal computers, air conditioners, office equipments, and of course two-wheelers and cars.

India offers great scope for tourism related activities. Moreover, it is highly labour-intensive. India has the unique advantage of having the highest mountain ranges, thousands of miles of sea beaches, deserts, rich heritage and enormous cultural diversity. But for various reasons-our slow transportation systems, poor connectivity, the absence of moderately priced quality hotels for mass travellers and criminal activities in places of tourist interest-we have not been able to realise the potential.

A wide variety of people can be absorbed in more retail sales outlets, supermarket chains and restaurants, entertainment centres (video-game parlours, amusement parks), media and communication channels (both printed and electronic), education and training institutes. Low-income people may not buy from upmarket department stores and restaurants but they get jobs as salespersons, deliverymen and cooks. In the western countries, stores such as Walmart and fast-food chains such as McDonalds employ a great number of new entrants to the job market. The demand for health and nursing care will be on a rising curve along with the steady rise in life expectancy. The ageing population, together with the breaking up of the joint-family system, would need more old-age homes, geriatric hospitals, emergency services and paramedics. These should provide more jobs for nurses, attendants and staff to run them. Given the much lower cost of nursing care in India, another promising area of business and job creation is setting up international standard old-age homes for the foreigners, preferably in some of the scenic tourist spots.

A lot of emphasis is often placed on the IT-enabled services (such as call centres or data-entry jobs) being shifted to low wage countries such as India. A recent article in The New York Times (July 22) reports that the traffic violation tickets in New York City are being electronically transmitted to far-away Ghana for data entry. The report also says that this job at one time was being done in India and Mexico. This shows that these are extremely 'footloose' industries which can be very easily shifted from one country to the other. The implication is that one cannot bank on them for stable jobs.

It is true that the potentials would not be automatically translated into reality. The Central and state governments will have to provide the infrastructure, a clear policy frame, a responsive and facilitating administration and a proper incentive structure to attract domestic and foreign private investment in these promising areas of job creation. INAV

Plus side of the American economic crisis

By Dr Bharat Jhunjhunwala

There is concern in the investing community about the recent swings in the share markets. Question is whether the decline seen in mid-January will deepen? The basic reason for the decline is crisis in the U.S. economy. Indian- and American economies are interlinked in two ways-through trade in goods and flow of capital. The demand for our exports declines as the American economy sinks. But we gain from cheaper imports in the same measure. Our garment exporter suffers because his orders are cancelled but our software engineer makes merry because he gets Windows software cheap. The combined effect of exports and imports on the economy is nearly zero. However, share markets respond to the woes of exporters who are listed on the bourses and not to the gains of consumers. Thus there is a negative impact on our share markets although there is little impact on the economy.

The interlinkage through capital flows is tricky. There is an outflow of capital from India in the short run as the American economy sinks but there is greater inflow towards India in a long term. Global Banks incur losses as troubles of the American economy deepen. Loans given by them to American homeowners are not repaid. They have to resort to sale of shares in the Indian markets to raise money to meet these losses in the U.S. The decline in our share markets in the last two weeks started with such a selloff by foreign banks.

The long term impact on our share markets is entirely different. Till recently the U.S. economy was considered a 'safe haven' by global investors. This confidence has been shaken by a steady decline of the dollar in the last two years. Investment in that economy has now become very risky. The interest earned on U.S. Treasury Bonds is wiped out by the capital loss accruing from decline of the dollar. Till few years ago black money was flowing from India to the U.S. because dollar was rising. Now the opposite is taking place. Our Government is concerned that global black money is being invested in our share markets. The recent clampdown on Promissory Notes was made to prevent such inflows. The decline of the dollar has forced global investors to look for another place to invest their capital. The Saudi royal family, for example, is earning huge amounts from the sale of oil due to high prices that are prevailing. Till recently they were investing this income in New York. I reckon this will flow to Mumbai now and Indian share markets will glow. Remember the Indian share markets have been scaling new heights as the U.S. economy has been sinking in the last two years. Surely, our share markets jitter every time bad news comes from America but the soon rebound to higher levels.

The question is whether the American crisis has seen its worst or it will deepen? This will determine whether our good fortunes persist or not. The U.S. Federal Reserve Board has cut the interest rates by a steep 0.75 percent on January 22. There is an expectation that the U.S. economy will stabilize as a result. Will such measures succeed? My assessment is in the negative. They do not remove the basic weakness of the American economy.

The first weakness is in the service sector. Previously the U.S. was leading in software production and new designs etc. This supremacy is now being challenged by Indian companies like TCS, Infosys and Wipro. Many leading companies are transferring their Research departments to India because wages are low here. Similar trend can be seen in many areas like clinical trials, translation, architectural designing, telemarketing and publishing and printing. This weakness can only marginally be managed from devaluation of the dollar. It is rooted more in the moribund nature of the U.S. education system.

The second source of weakness is in the auto loans and credit cards. Another crisis like that in the subprime housing sector is in the making. The present troubles started here. The U.S. Federal Reserve Board encouraged people to take loans to buy houses. The consequent demand from the housing sector kept the U.S. economy chugging for about three years. But the borrowers could not repay their housing loans because of decline in salaries and wages due to international competition. The loans went into default. Banks seized the houses but had to sell them at much lower prices and had to book huge losses. A similar crisis is in the making in the auto loans sector. Car majors are extending loans to borrowers. The loans backed by security of an automobile are considered 'safe' much like a subprime housing was considered safe. The borrowers are likely to default on these auto loans and also credit cards just as they did on housing loans.

The third source of weakness is high oil prices. Americans love big and fast cars. They have to import huge quantities of oil to keep them running. This is a big drain on the American economy especially in view of the rising oil prices. The American economy is more energy intensive than, say, India. They consume more oil per dollar of income generated. Consequently, high oil prices have a greater negative impact on that economy. The adverse impact on India is reduced for another reason. The oil-rich Arab countries are making grand projects like hotels on artificial islands. The manpower for these projects is supplied in large measure by India. These workers send remittances back home. Thus part of the money spent by the world in buying Arab oil flows to India. The negative impact of high oil prices is partly cancelled by remittances for India but not for America.

The fourth source of weakness is the expenditure that country has taken upon itself by acting as the global policeman. The U.S. is incurring huge expenditures in wars in Iraq and Afghanistan. There seems to be no end to these in sight.

My assessment is that the U.S. economy will continue to decline for the next decade or so because that country lacks awareness of the depth of these problems. The long term decline of U.S. economy will be reflected in the rise of India. However, the decline of the U.S. economy is likely to take place in sharp spurts like one witnessed last week. We may see decline in the Indian share markets during such short term events. But this will be followed by a long term rise much like the mountaineer climbs down into a valley only to scale a yet higher peak.

Musharraf's General warns army

By Sushil Vakil

Indeed, the letter issued by Pakistan's army chief General Ashfaq Pervez Kashyani to many officers (as reported by newspapers) asking them to keep themselves distanced from politics and politicians is not only intriguing but carries an unmistakable imprint that President General Musharraf is fearing sabotage from his own men than Islamic extremists. May he doesn't want to fall victim to any conspiracy or coup as some of his predecessors did . The letter confirm some of the worst fears, and suspicions of President General Musharraf and General Kayani, who incidently rose to the position by exceptional circumastances over the role of some rougue officals within the defence establishment. Besides, the tone of the letter reminds the officials that the army has nothing to do with politics and as such they must refrain from taking any direct or indirect part in politics. Cautioning the officers that whoever indulged in politics or attempted to establish contacts with political leaders would face action under Arms Act is in a way a stern warning to those who bear allegiance to a particular politician or a party. There are important reasons to believe that General Musharraf is trying to assert his rule by tightening the grip over the army and the opposition in one go. No doubt the order has more roots in personal compulsions than any sympathy for the army or the country. Moreover, President Musharraf's order to his boys to shoot at sight anyone found derailing the election process is a clear cut message to all his detractors that he means strict business and can go to any extent to retain power. The fact remains that after the regrouping of Taliban, Al Qaeda and other groups the situation in Pakistan is becoming more and more dangerous and alarming.

From the new developments it seems that President Musharraf and his army chief General Kayani are not as much worried about the rebel clerics like Maulana Fazullullah and Baitullah Mesud of Taliban and others as much as the rouge elements within the defence apparatus. Truth is embeded in the fact that Pakistan is presently at the cross roads of grave challanges that have plagued the social,economical and political fabric of the country. Its economy is in shambles; its politics is based on the fragile democratic institutions and powerful dictatorship; and the society is confronting growing intolerance and extremism. This can be very well summed up by an editorial of The International News of Pakistan which comments "The descent into violence has been visible everywhere. In 2007 alone, at least 2000 people have died in terrorist attacks, according to interior ministry figures. 558 among them were the personnel of law enforcing agencies. The 56 suicide bombing reported during the year mark an almost ten-fold increase compared to the previous year. Fighting lingers on in many parts of the northern areas, where the writ of state has collapsed. At the centre of this whirling storm, President Pervez Musharraf retains a remarkable sense of calm. Rather like the aloof passenger of a cruise liner, watching tiny fishing boats being buffeted by fierce waves, he maintains a certain detachment from the sorry state of affairs he presides away, while insisting that he, alone, can rescue the nation from the grasp of these difficulties."

There is no doubt that Jihadis are ruling the roost and striking at sweet will, inflicting heavy casualities on armed forces and keeping the government on toes. Suggestively, this couldn't be possible without the support from insiders. The latest incidents of Jihadis running havoc with armed forces amply demonstrate that some outfits are still patronised by ISI and other institutions. Even the three men sentenced for hatching conspiracy against Musharraf were believed to have links with army officials. As such, one can say Musharraf's apprehensions on army-politician nexus are well founded and deserving merit. Moreover, Pakistan has a history of Generals being toppled by their own men waiting in wings to usurp the power this way or that way. General Ayub Khan and General Zia-Ul-haq became victims of the same vicious conspiracies. They had to pay the cost for their political adventures. Under the circumastances, to remain in power Musharraf has no other option but to squeeze the offcials sympathetic to politicians and extremists."

How much perturbed the Pakistan President is about the nexus between army and Jihadi ranks can be imagined by the expulsion of a reporter of New York Times magazine whose only fault was to interview Taliban leaders in South Western Afghanistan. The journalist was deported soon after his report " Next-Gen Taliban appeared in the magazine last week containing interviews with anti-government Taliban leaders which irked Musharraf no end. Reports in some foreign papers suggest that dozens of ISI officers who trained militants had come to sympathise with their cause and had to be expelled from the service. This included the removal of there ISI directors suspected of being sympathetic to the militants as reported by New York Times. Besides, there is no dearth of extremists in Pakistan army. Even Musharraf was not an exception. For birds of the same feather flock together. Musharraf's sympathy for the Jihadis can be judged by his statements as army chief eugolising the role of Jiahdis during the Kargil intrusion.

Further, Musharraf's statements warning that any unilateral action by US troops to enter Pakistan's border with Afghanistan in the hunt for Al-Qaeda militants would be regarded as an invasion and asserted they would "regret" that day. " The United States thinks that whatever we can't do they can do.' Musharraf added. Incidently, the message is not to warn NATO troops but to soothe the rising tempers within the army, opposition and Jihadi camps. It is another matter that Alliance troops have crossed over to Pakistan many a times in search of remanants of Taliban and Al Qaeda. Having succeeded in calming down main opposition Pakistan Peoples Party, postponing elections for the time being and engaging Taliban in in Northwest parts, President Pervaz Musharraf has turned his attention on politicians and army . The stern warning to the officials that they must have army chief's prior consent is nothing but an attempt to clip their wings and prevent any misdeamnour. Who else could be aware of these facts other than General Kayani himself who has handled ISI affairs for two decades, prior to his appointment as army chief.

There is no denying the fact that Inter Services Intelligence of Pakistan faces what could be the worst challenge so far as most of the Jihadis have distanced from it due to Musharraf's campaign against their top leaders. And as most of the Jihadi leaders have been trained by ISI General Kayani can well understand what will be the fate of Musharraf government if the nexus between the men in uniform and politicians is not broken. The prophetic words of Bernard Shaw " patriotism is the last refuge of scoundral" applies to both President Pervaz Musharraf and his "Yesman" General Ashfaq Pervaz Kashani who want to make Pak army a discplined and dedicated force.