Friday, June 25, 2010

Afghan Mineral Resources For Regional Development.

There is nothing new about mineral deposits of Afghanistan, which have been quoted at valuing 1 trillion US dollars. A wide variety of mineral deposits have been earlier studied and explained by British geological Survey and later by the Soviet geologists in 1970s and onwards. The US Geological Survey published a report as recent as 2007. The recent announcements by US officials are not the result of any sudden discovery.
These resources can be a double-edged sword; it can cause further conflict, dissension, corruption and exploitation in Afghanistan or can be used for local development and employment generation. The track record of mining companies is not very good, as is exemplified by poor mineral producing countries in Africa, Asia and Latin America. Meager royalties, environmental degradation, forced ejection of local population etc has been a familiar story. A royalty of 20% on sales and that too bungled and under-declared would not fetch a lot of revenue to Afghanistan. However if the minerals are processed locally, there is a possibility of building and developing some level of industrializations and employment generation that could elevate the standard of living of the people of Afghanistan.
Pakistan and Afghanistan can jointly benefit from these resources as I have elaborated in my recent book Pakistan Development Challenges: federalism, security and governance. I reproduce the following excerpt from the book:

Afghan –Pakistan joint investments in mineral sector in bordering areas

The need for a harmonious relationship and economic cooperation between Afghanistan has perhaps been finally acknowledged, and talks are going on in this respect between the two countries with some sense of earnestness. While discussing such possibilities, there is a need to identify projects and investments for border areas between Afghanistan and Pakistan along FATA and NWFP.

Mineral resources are one area, where a joint approach can be adopted for Afghan-Pakistan border areas. Afghanistan is land locked; hence the mineral exports prospects are very limited, except to meet the Pakistan market demand. Afghanistan has significant mineral resources, while oil and gas resources are only at a speculative stage. There are large proven deposits of good quality ores of Iron, Copper etc. Rare earths (Lithium, Tantalum) have also been reported. Recently Chinese have won a contract worth more than 3 billion US$ for exploitation of Aynak copper deposits, which are reported larger than Rekodeq. Work is preceding ahead smoothly, under strong US support and encouragement, amusingly even security support also.

Soviet Union, UK and the US have provided considerable technical assistance, in their respective periods towards exploring and proving mineral deposits. Today the website of Afghan Geological Survey (AGS) is much more impressive, informative and purposeful than of our related institutions e.g. Geological Survey of Pakistan (GSP) and board of investment (BOI). The officials of these two Pakistani organizations are strongly urged to visit AGS sight and see for themselves. The policy framework in terms of a new mining law has also been reorganized on new footings. However, in our land of the pure (Pakistan) there is the familiar “One step forward and two backward “process goes on. The Rekodeq project involving Copper and Gold mining has reportedly run into snags again. Pakistan side wants to renegotiate it and has threatened to cancel the contract to protect National Interest. What is National Interest is usually a very vague and slippery, but convenient term. It may serve a variety of purposes and have all kinds of meanings and connotations attached to it.

Coming back to the joint development of Afghan-Pakistan border areas and the role of mineral industries there of, the possibilities of utilization of iron-ore deposits of Afghanistan should be explored. Afghanistan has a very large deposit of good quality iron (60% iron content and 1.8 billion tones) in its Bamiyan province (Hajigak) .There is a supply of coke-grade coal nearby. Both are essential inputs for producing pig / blast furnace iron. Pakistan does not have similar iron ore deposits of comparative quality and quantity. Pakistan currently imports iron –ore and coke-grade coal from Australia for Pakistan Steel Mills’ requirements in Karachi. Another Steel Mill is coming up in the vicinity of Pakistan Steel. Development of Pakistan’s iron and steel industry has suffered because of local availability of raw materials. A considerable portion of Pakistan’s steel demand is imported and the demand is growing. Steel industry is bound to expand due to persistent demand creating significant demand for iron ore and raw materials. Afghanistan can be a good source of import of this ore from the mines as mentioned earlier for iron and steel projects to be located in the joint border areas of Afghanistan-Pakistan. Such projects would create employment and economic activity. Iron and steel production and mining industry is quite compatible with the proposed rusty/ dusty region and would be compatible with the rough and tough workforce, as opposed to other industries that have been proposed now and then and have not reached the stage of materialization. USAID which is groping for the projects should pay attention to this. For Pakistan, it may also be useful from other perspectives as well. This should be a trilateral project between Pakistan- Afghanistan and United States. The proposed iron ore deposits of Afghanistan may invite quite some interest from India, which has the entire where withal to implement such a project. This would promote and expand Indian economic and other interests in Afghanistan requiring some input and initiative from our political apparatchik

Ironically, Chinese have chosen to acquiring mining interests in Copper deposits, while ignoring Pakistan’s large Rekodeq copper deposits, which has recently been taken away from the earlier lessee company Tethyan copper. Chinese are also handing over the Saindak Copper project to Pakistan. They had originally built that project. Rekodeq Copper project would now be developed with the assistance of Dr. Samar Mubarakmand, the renowned nuclear scientist who has also been entrusted with the responsibilities of Thar Coal gasification.
There is an apparent economic logic on the part of the Chinese to acquire Afghan Copper Deposit, as the transport logistics from Afghanistan to China is much shorter and simpler. However lack of interest in Thar coal and then in Rekodeq on the part of the Chinese should be taken seriously by the Pakistani authorities. I and many are concerned. It is only Chinese who can deliver and will transfer technology and work in trying conditions. Others will only postpone and contemplate and put one condition after the other. Let us assure China that we mean business. Perhaps Chinese are waiting for us to make up our mind in pursuing these projects and sort out our internal problems.

Monday, June 7, 2010

Pakistan's Development and Energy Challenges :Two new books by Akhtar Ali.

(Post by Meherzaidi)

Pakistan today, a nation of 180 million, stands at the beginning of the 21st century facing a myriad of challenges, some big ,some small, non of them undauntable. The Pakistani identity is a passionate hot mixture of sheer nationalism, Muslim identity, hospitable friendliness, almost naive innocent enquiry, ability to face innumerable challenges and rise majestically from the ashes and glow and shine. This vast and variable mixture of races, religions, intellegent thought, deep saintly wisdom, music and cultures strives to be known in the world as Pakistan, an identity of millions who exist as one , with undauntable spirit and passion. It is authors like Akhtar Ali who spend money, time and gather their sheer energy and intellegence with unquestionable love and sincerity to serve this beautiful land. It took him more than two years and almost all his days and nights, to research and bring out the wisdom of enquiry and finding doable , solutions to the challenges facing Pakistan.

Pakistan's Energy Development, the road ahead describes the Energy industry, background, present facts, including developmental and political, in Pakistan. It discusses in detail the development, growth potential and international picture comparisons to derive at a logical solution. The "key recommendations" in the beginning of the book give the reader an ample direction which he has to take , be it , policy recommendation, growth and development in the sector, private enterprise , investment, foreign and local and on the whole a viable blueprint for growth and development of the economy. Almost all areas such as Electricity, Oil,Wind, Natural Gas, CNG and LNG, Coal including the entire feasabilty of Thar Coal, Hydro, Thermal and Geo, Cogeneration, Nuclear, Energy Coservation and Efficiency, Solar are vastly covered. The issues of Power pricing, taxation, tarriffs and future planning are discussed in detail. All best practices in the world are taken as example and a synthesis for action given.

In Pakistan's Development Challenges, Federalism, Security and Governance , the author has taken contemporary pressing issues that Pakistan faces today that is governance, federalism, security and gives the solutions to be developed for the progress and growth of the nation and economy. As the Book describes :
In this highly intense and provocative book, the author examines the scope, need and challenges of the socio-economic development of Pakistan in the context of myriads of problems and constraints. He focuses on federalism, governance and security as three pivotal issues which in large measure shape the political and economic milieu and momentum of the country. The author lays out a framework for strengthening the federation and federalism, decentralization and devolution of power including provincial autonomy and effective local government. He debunks many myths and explodes the conspiracy theories, which in his view, has misguided public opinion and has kept the successive governments from taking the right decisions based on ground realities. He rejects the notion that fast economic growth can only be achieved by military regimes which in his view has given rise to boom-bust economic results and argues for a liberal and libertarian plurality and diversity along with stable and democratic governments and organized political parties. He argues for reforms in governance and economic policies, to foster faster growth in social sectors, improvements in quality and quantity of education and health infrastructure, achievement of Millennium Development Goals and reduction in military expenditure.

He argues that most mineral rich countries of the world except the developed countries are the so- called failed states, having national incomes lower than Pakistan. Misplaced notions of mineral wealth, according to him, create separatist tendencies and tribal feuds. He argues for a fair deal to similar provinces especially good share in natural resource income, transparency and autonomy while counseling the separatists and nationalists that their best interest and future lies within Pakistan and that they are better off even now as compared to many mineral countries of Asia and Latin America. He draws the attention of the elite in particular and of people in general to the deteriorating ratings and rankings of Pakistan on various well-accepted scales and indices. Sadly on most good things Pakistan is at the bottom of the list, and in most bad things Pakistan is at the top. A host of data from World Bank, Freedom House, Transparency International, World Economic Forum, Fund for new governance etc has been reproduced in readable form showing Pakistan’s status vis-à-vis other Asian and Muslim countries, although he has conceptual problems with the characterizations such as the notion of failed state. He also has interesting and useful suggestions in the area of broadening the industrial base, bridging the trade gap and boosting the productivity and competitiveness. The book also has chapters on energy, food and water, the areas in which Pakistan is either facing crises or may face one in near future. In many ways, this is not a typical book usually written by academicians. It has a high content of advocacy bordering on uneasiness and discontentment and a natural bias towards and in favor of Pakistan’s national interests, development and the prosperity of its people. Those looking for academic dispassion, remoteness and neutrality may be disappointed. However, those in search of solutions, breakthroughs, new ideas, change in status quo and passionate discourse would be pleased to read this book.
In his own words "My four decades of involvement in Pakistan's development as a consultant to private and public sector and as executive and manager at top levels, gives me a rather unique insight and vantage over issues, which would benefit my readers and policy makers and managers of economy, politicians, academia and people of media". To this I would add international policy makers, diplomats, students of social sciences, international relations, politics and economics and even culture. This book opens up a mind towards thinking Pakistan's development including that of its economy and growth in terms of the myriad socio-political challenges it faces today and arriving at a proactive, consensual approach to solutions.
These books are published by The Royal Book Company, BG-5, Rex Centre, Fatima Jinnah Road, Karachi-75530. Ph: 92-35653418, 92-35684244. email: Available at with shipment.'s%20energy%20development&x=0&y=0&catalog=yhst-60028183600056

Friday, June 4, 2010

New Book: Pakistan's Development Challenges: federalism, security and governance.

Pakistan's Development Challenges: federalism, security and governance.

(Post by Meherzaidi)

Akhtar Ali has previously written "The Political Economy of Pakistan: an agenda for reforms and restructuring". (1996). In this he discussed the developmental and governance challenges facing Pakistan such as Political and constitutonal reform, administarative reform, restructuring agriculture and political power, building and financing infrastructure, Industralization strategy and dilemmas, promoting science and technology and restructuring R&D, the political economy of national security, employment and labour policy initiatives , freedom of information. many of his ideas have seen the light of the day, but a lot of work has to be done on continued basis and many more new challenges have to be faced, understood and tackled in a most proactive model. In his book "Nuclear politics & the challenges of governance "(post nuclear explosions in 1998) he discusses the issues facing Pakistan at the time such as the nuclear politics eg., CTBT, the conduct of an on-site inspection, the case for de-linking from Indian policies, Chinese attitude, The Kashmir question, "the dangers of Islamic bomb", Nuclear deterrance and defence spending, the case of confidence building regime, International package, a multipronged strategy. In this book he gave measures to re-organise and revitalise the economy and society, discussed the decentralisation and devolution of power to provincial and local governments, improving governance by institutional and constitutional reforms and formation of economic and social council. A comparison of electoral manifestos at the time of the political parties gave an idea of the political will and understanding of the development challenges by some major political parties.
In his latest book "Pakistan's development challenges: federalism,security and governance" he further discusses the immense challenges Pakistan faces today and presents a reasonable and doable agenda for development and progress. In his own words,
"Federalism, security and governance are three major issues faced by Pakistan’s development prospects. It is in the framework and space provided by these three elements, that the economic development is to take place in Pakistan. Federalism and security put demands on development which generate demand for governance, that is to say good governance. The pace of development is tempered by the balance of demand and supplies of the three. Demands of federalism may not permit certain economic efficiencies and optimalities to operate, while external security requirements may divest a disproportionate and unaffordable portion of resources to militarization and the lack of internal security may discourage local and foreign investment. An inadequate governance response may further deteriorate the impact of the two or better governance ameliorates the effect of the two. Development itself creates challenges for governance in many forms. Governance can and has to balance all towards an economic and social optimum.
Governance can deteriorate security divisions into a military organization that is cruel, insensitive, oppressive, and predatory, while reverse is also possible by boosting social and economic multiplier through a civil-military partnership through indigenization, creation and promotion of social sector in far off areas.
Social and economic problems are the main problems and remain as such, irrespective of military or civilian governments. Dictators manage to bring short term improvement through sheer coercive power, often putting to use, unutilized production capacity. Military rule is often endowed with stability and peace of mind that is often denied to civilian rule. Let us, this time, give some peace of mind to the new civilian government of PPP. Fortunately PML-N has acted wisely, because their suffering at the hands of military dictator in the immediate past. However more peace and harmony is required in the light of myriad of new problems.
Policy prescriptions are abundantly available. Some may require change of emphasis, such as the previous government’s profligacy on higher education etc. There are few options, but hard choices. Solutions can be found only in national consensus including the military. It is unfortunate but they are to be on board if a major policy break-through is to be made; be it vis-à-vis India or reducing military expenditure. The main theme of this book is to define and elaborate on some selected problems, and draw the attention of all, that without a major departure resulting in enhancement of social sector investments, problems would continue to multiply. Politics is the art of the possible. The two major parties have to play a role in building the consensus that is so vitally needed but also because of the fact that the next government would also be facing the same issue.
There are four themes of this book or six areas where reform and initiatives need to be taken. These are;Economic development,Federalism andProvincial autonomy,Governance &Security.
In some ways, this book may please nationalist leaders as well as annoy them, for it argues for doing justice with smaller provinces especially Baluchistan in particular with reference to income generated from the utilization of natural and mineral resources. But it also advises them not to see too much into the natural resources and exaggerate the political issues to an abrasive secessionist tone. Without Pakistan, Baluchistan, it is prognosticated by the author, would be a lazy colony of foreign interests, yielding nothing much for the real development of its populace, as can be seen from the plight of the resource rich countries of Africa and Latin America. Within Pakistan, and in solidarity with their brothers in other provinces, they have a bright future and potential not withstanding the current problems and difficulties.
Similarly super-patriots may not like my suggestions for a dialogue on reduction of military expenditure, but would feel reassured by my denunciation of Indian policies and wishful thinking of building an empire in the region forcing other countries to direct precious resources in countering the real or perceived or both kinds of threats.
Politicians would like my advice of strengthening political parties and financial support from public resources and they may equally dislike my sermons and advice on bringing true democracy in their own parties.
Fortunately democracy has returned and dictatorial rule is gone, hopefully forever, but a continuous threat for its return persists. Military in this country goes away when it is unbearable, lets democratic rule return while waiting in ambush to come back once again, on one pretext or the other.
Tall claims of salvaging the country are made, but in essence more problems are created. It is ironic that growth rates in the economy have been consistently higher during military rule, than during civilian rule, partly legitimizing the former, in the eyes of many, if not all. Why does this happen? This must be investigated and answered.
“Development Commissioners” in the districts, being representative of provincial governments in a coordinator capacity. The acronym DC, that sweet bygone era, should be of some consolation for some.
It is disturbing to note that most of our political parties have shown anti-local government behavior. They somehow consider local governments and Nazims as competitors and even a threat, and an un-necessary impediment towards their direct contact with the people and local government affairs. They have even shown a preference for a subservient Deputy Commissioner than an elected Nazim, who could have been from their own party. Adjustments and changes are a fact of life, but an obvious antagonism is really deplorable.
Compromise is essence of democracy and governments normally in our societies which under the load of history of misrule, are polarized, and usually dislike compromise. They call it a “deal”. Deals are essential, if one has more form and there is no fundamental truth, justifying rigidity. A compromise could have prevented Pakistan’s dismemberment and another could have saved democracy and life of a former PM of Pakistan. Compromise and flexibility is, however required among political forces and not a conspiracy with rival military forces encouraging them to march in as it happened in 1977.
A compromise in 1988, enabled democracy to return, after the fateful demise of General Ziaulhaque, and another compromise of 2006-2007, enabled the two former prime-ministers to return, and paved the way for return of democracy and civilian rules.
Compromise of Hudaibiya enabled prophet Muhammad (PBUH) to open up Makkah for Muslims and eventually culminated in victory. A compromise in 1998, after 9/11 tragedy, saved Pakistan form possible US attack, and a lack of concessions by Saddam Hussain resulted in invasion and occupation of Iraq. Lack of compromise among Sunni, Shia and Kurd factions would again result in catastrophe and destruction of Iraq again.
A historical compromise of Muhammad Ali Jinnah, the founder of Pakistan, led to the creation of the Pakistan, or the British may have hastily run away resulting in continued mayhem and bloodshed and eventual emergence of “Akhand Bharat” A lack of compromise among the two parties PPP and PML (N) may even result in the return of military rule, while another lack of compromise among PML factions may guarantee permanent winning of elections by PPP. A lack of compromise by India and Pakistan on Kashmir issue, one day may result in a nuclear catastrophe, and a settlement may usher into a new era of cooperation and reconciliation.
Corruption & Idealism
Freedom has many aspects and meanings to it. Zulfikar Ali Bhutto wrote his most influential book, “The Myth of Independence”, in late sixties, in which he exposed the myth that we are a free, independent nation and decried the role of foreign powers in the affairs of small and poor countries of the third world. What he essentially said that it is a myth, that we are free or independent. We are neither free nor independent as we shall see later in this chapter.
Despite democracy, we are not amongst one of the 89 countries which have been declared Free. Those who think that conditions in Pakistan and India are the same, may be hurt by knowing that India has always been grouped under “Free” countries with high ratings on political rights and civil liberties. We are reproducing comparative trend of freedom data for several countries, in which mirror one could see his image. No wonder the issue of missing persons could not be adequately handled, even by current Supreme Court, the most independent ever of judiciary in Pakistan and is continuously applying pressure to grapple with the issue. In fact, one of the “sins” of Iftikhar Chaudry, the chief justice, has been his “principled and hard’ stance on the missing persons and the role of intelligence agencies. It does not, however, mean that intelligence agencies cannot peruse and perform their genuine professional work in a Free and democratic system.
Fortunately, after the elections in 2008 and assumption of office by a democratically elected government, Pakistan has been classified as a “partly free county”, by Freedom House.
In Chapter 17: Democracy and Political Parties, we discuss the proposal on funding political parties, if not to support politicians. Most countries, except South Asia, have some kind of funding scheme to aid political parties or give financial support to electoral contestants.
Millennium Development Goals Can be Good Manifesto.
Political parties seem to be at a loss to give a viable programme and rally people around them. Television anchors blame the present government that there is no sense of direction or agenda. Millennium Development Goals (MDG) can offer this required sense of direction.
It would be highly visible and give a visible sense of direction, which people (including television commentators and anchors) desire. It is obvious that no government would dislike the idea of improvement in the living conditions of its people. But unlike political parties, a government has to survive first; survival is its first objective. Their major constraint is the requirement of continuity, and the inertia of the past. With the exception of revolutions, governments have to cater to the demands of more powerful sectors of the society, which manage to galvanize popular support around their sector and interests. All heads of states gathered at UN General Assembly in the year 2000 and agreed to these goals. These goals were, to improve human conditions in developing countries by measurable amounts in a definite time frame i.e., by 2015. These goals are about reducing poverty and hunger, improving access to education and reducing illiteracy, improving health conditions, access to safe water and sanitation etc. Most developing countries have agreed to work for achievements of these goals and targets including Pakistan. Ten years have gone by, only five more years are left, and we are now hearing to be able to achieve these goals. Certainly as it appears from the data, the time frame may have to be extended, perhaps to 2020. These goals and targets are quite practical and the need of the hour. All development should finally end up in improving human conditions; direct or indirect and the so called trickle down effect.
MDGs have the backing of the international community, and quite some technical and financial assistance is available through MDG mechanism. All that is needed is the political will, appropriate resource allocation and mobilization of people, common man and the state power. Without these elements, MDGs would not be achieved. The non-achievement of goals has been for the lack of these elements in the required amount.
One would have hoped that with the adoption of MDG goals and targets, as state commitment, things would improve by 2015, No way. Recent MDG monitoring report of UN is pessimist about our achieving any target at all except on HIV/AIDS. Investments in social sector are required. Words and glib talk or glossy reports do not help. Commitment must be backed by investment, without which not much can be achieved. No increase in allocations to education and health has been made. Recent PRSP-2 report predicts a shortfall of 5 billion US$ in social sector investment, for achieving MDG targets. The plain fact is that allocations plan for PRSP-2 would not be made, not to talk of more ambitious MDG.
If we keep making our budgets as usual, any achievement in the MDG, if at all would be at its best, a coincidence. A conscientious effort for achieving the MDGs can only be done through doing things differently and through allocating resources differently. Do MDG systems mean business? (Lately PRSP has done some work on this). We discuss these issues in Chapter 18: Lagging Social Sector Development.
Islami Nizam & Jihad
In Pakistan, no discussion on governance can be complete without"Islami Nizam". There is considerable controversy as to whether Pakistan was made for a rigid “Islamic state” or a state for liberal Muslims like M.A. Jinnah, the founder of the country. The advent of Taliban and later its more frightful form of TTP-Suicide attackers, the issue has become even more controversial and polarized.
In Chapter 19: (Part B) Islami Nizam & Jihad (Islamic Rule & Jihad), we discuss theory and practice of Jihad in the context of terrorism. Traditionally a dark image of Islam and Muslims has been painted. And Muslims themselves seem to be unsure whether this image is well deserved or untrue. Had coercion been used by Islam and Muslims, there should not be so many Christians in Spain and Hindu majority in India. Indonesia was beyond Arab geographical outreach, but accepted Islam and now most Indonesians are Muslims.
Muslims indulged in expansion because the prevalent world system permitted and even encouraged that. The vanquished people and nations did not fight or resist the victors, as they would do today. It was alright to resort to war and conquer land. The system continued everywhere including in Europe. World has seen and experienced the swift and soft military campaigns by Muslim kings and has also suffered the Halakoo (the killers) conquests. By and large Muslim societies have conducted themselves peacefully and constructively. Their contribution to science, history, philosophy, mathematics, and civilization in general has been noted undisputedly. Today’s period is an aberration which would go away with the passage of time.

Can we tame Al Qaeda and Taliban menace? Wishful thinking? Halakoos were finally tamed and they started contributing and rebuilding what they had destroyed. Perhaps there is no harm in talking to “good Talibans”, if they are willing to shun violence and respect generally accepted human values vis-à-vis their fundamentalism .If this can happen, Afghanistan can find lasting peace with the withdrawal of foreign forces and elimination of symbolically democratic but corrupt Karzai government. But you cannot expect Malaysian or Turkish Islam in Afghanistan. The most they can be expected to come to is the social milieu of NWFP, and may improve with time.
(Book is published by Royal Book Company , Karachi. BG-5 Rex Centre, Fatima Jinnah Road, Karachi, Pakistan . 75530. Phone: 35653418, 35684244,7015471.
Price US$ 25. Pk Rs. 1295)