May 22nd - 28th 1999May 22nd - 28th 1999
The rot in Pakistan
This is not the time for the IMF and the World Bank to be lending money to Pakistan
DEVELOPMENT”, wrote James Wolfensohn, the president of the World Bank, earlier this year, “requires good governance, meaning open, transparent, accountable public institutions.” Over the past year or two of economic turmoil in Asia—turmoil caused, in the view of many, by a lack of governmental accountability—Mr Wolfensohn’s prescription has become a favourite theme in the corridors of the World Bank and the IMF. So when a government sets about undermining the institutions designed to hold it in check, it is time to start thinking about shutting off the flow of money.
Pakistan has been run by such dreadful governments for so long that it seems barely worth remarking on any deterioration. But whereas previous governments were chaotic in their awfulness, this one has turned out to be systematic. Over the past two years Nawaz Sharif, the prime minister, has been picking off individuals and institutions that he believes pose any threat to his own power. He has seen off a president and the chief of the army staff, and is now trying to push through a constitutional amendment that would give him sweeping powers to ignore Pakistan’s legislature and provincial governments in the name of Islamisation.
The judiciary at first tried to check Mr Sharif, but has given up. When the chief justice of the Supreme Court, Sajjad Ali Shah, took the president’s side in an argument with the prime minister in 1997, a mob from Mr Sharif’s party stormed the Supreme Court and Mr Sharif sacked Mr Shah. The courts have given Mr Sharif little trouble since.
This year it is the turn of the press. A few months back, the Jang Group of newspapers had its bank accounts frozen and its newsprint confiscated. Now Najam Sethi, a newspaper publisher and editor (and a former correspondent of The Economist), is being held without charge, accused, by government press releases, of working for both the CIA and Indian intelligence. The government insists that his arrest has nothing to do with a campaign against the press—which makes it odd, then, that all copies of his paper, the Friday Times, were seized last week, and that its website has been jammed.
All this is unfortunate for Pakistanis, of course, but should it really matter to those who hand out the money? Yes. Without an independent judiciary and a free press, there is little chance of the accountability and openness that Mr Wolfensohn regards as essential to development.
Signs already abound that money which should have been spent on development is being wasted. A scheme to help poor Pakistanis become taxi-drivers has involved the distribution of concessional loans at politicians’ discretion. Neither the grand Islamabad-Lahore highway nor the unnecessary new airport at Karachi is justified by economics.
Mr Sharif’s predecessor, Benazir Bhutto, has just been sentenced in absentia to five years in jail for corruption. Mr Shah, the sacked chief justice, had agreed to hear corruption charges against Mr Sharif, but was sacked shortly afterwards. Mr Sharif’s family has been tainted by a High Court judgment in London against his father and two brothers in March, ordering them to repay $32.5m in loans taken out from a Saudi finance house for a paper mill owned by the family. Mr Sethi had written a sharp editorial commenting on this judgment the week before he was arrested.
Before the end of the month, the IMF’s board is due to consider releasing the next tranche of a $1.6 billion loan. It should think long and hard about whether Mr Sharif’s Pakistan is really likely to use the money well. Of course, there are many badly governed countries in the world, but some of them, often thanks to prodding from outside, have been moving in the right direction. Pakistan under Mr Sharif is moving in the wrong direction. It seems perverse to give it more cash to speed it on its way.
The counter-argument that carries most weight with the United States—which has much influence in these matters—is that the alternatives to Mr Sharif’s government are even nastier. Afghanistan, over the border, is run by the Taliban, a bunch of fearsome Islamic zealots. Pakistan is a nuclear power. Nobody in the West wants a nuclear Taliban.
Who’s the bogeyman?
This argument is favoured by many unattractive governments. It often works. It got the sanctions that had been applied after Pakistan’s nuclear test last year lifted only six months later. It got Boris Yeltsin boatloads of money: all he had to do was hold up the spectre of the ultra-nationalist Vladimir Zhirinovsky, or the Communists, or both, and another cheque was written. The procedure has the merit, sometimes, of genuinely preventing villains from taking over. Its flaw, though, is that it usually prevents any decent alternative to the gang in power from emerging.
Anyway, the bogeyman threat is even less convincing in Pakistan than it was in Russia. Pakistanis show little enthusiasm for Taliban-style politics. Fundamentalist parties got 5% of the vote in the last election. They hate each other even more than they hate the secular elite, so it would be hard for any one group to impose its views on the country. And the further Mr Sharif goes in undermining the few checks on his own power, the harder it will be to tell the difference between him and the bogey that might replace him. Pakistan needs an accountable government; then the money can follow.