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SECOND OPINION: Now let’s all hate our foreign exchange reserves —Khaled Ahmed’s TV Review

Not even a Keynesian will recommend getting rid of the reserves during a crisis. The hatred of the reserves must go deeper than most of us think. It is a Muslim’s legendary antipathy to the habit of setting aside wealth. Hoarding discourages war and that is bad for the warrior nation

Departing governor of the State Bank of Pakistan, Dr Ishrat Hussain, must have often wondered why the people of Pakistan hate the country’s foreign exchange reserves so much. By contrast, when we virtually had no reserves, the nation seemed quite happy. The record sum of $12 billion has hurt us most intensely. By this yardstick, the Pakistani nation can be made to commit suicide by simply allowing the foreign exchange reserves to rise to intolerably high levels. Poverty-ridden India has over $130 billion but no one there is complaining.

ARY (November 2, 2005) Dr Shahid Masood complained that Pakistan’s foreign exchange reserves were $12 billion but they were of no use while the people suffered in history’s biggest earthquake in Pakistan. He said such useless reserves should be set fire to. Economist Shahid Hassan Khan did not rebut him but said the real reserves were $9.7 billion and there was a decline in them in 2005 by $760 million. He talked of corruption while poverty was mounting in the country. He denied the veracity of the claims made by the government that the economy had improved. He said the strategy employed by the government was tried and tested and found wanting in the past. It was doomed to failure. He expected a budget deficit of $6.32 billion which would wipe out the reserves.

He said tax for earthquake relief and rehabilitation was justified but not on the poor. He complained the multinationals were making 40 percent profits in Pakistan which was unheard of. He said they should be taxed more. He said the tax ratio in Pakistan was today 21 percent whereas in 1996 it was 14 percent. This was due to a misguided policy.

Dr Shahid Masood took time off from his Imam Mehdi junket to recommend that Pakistan should burn its foreign exchange reserves. Before him, Maulana Sami ul Haq had expressed the same kind of passion in relation to Pakistan’s atom bomb if it couldn’t be thrown in the general direction of India or Israel.

ATV (November 2, 2005) Board of Revenue chairman Abdullah Yusuf was replying to phone calls. One young man called to say that Pakistan was in dire need of funds for earthquake reconstruction but $12 billion was lying useless with the State Bank. It should be spent immediately. The chairman replied that the reserves were meant to show to the world Pakistan’s capacity to pay for its imports. If they were depleted Pakistan would not be able to buy anything from abroad while its production economy was heavily dependent on imported material.

He said the $12 billion included the money expatriate Pakistanis sent ($4 billion annually) which was immediately disbursed in rupees. Another caller insisted that Pakistan ban the import of ‘fashion goods’. Some items could be done without and Pakistani nation could be told that cosmetics were not good for them when the victims of the earthquake were suffering. He said the country would save around $4 billion.

The chairman replied that in today’s environment it was not possible to ban imports if there was demand for them. He said the best way would be for the people to decide that they would not buy cosmetics. After that their import would cease automatically. Mr Yusuf said that Pakistan’s income tax net covered 1.4 million people which came to one percent of the population of 140 million.

Not even a Keynesian will recommend getting rid of the reserves during a crisis. The hatred of the reserves must go deeper than most of us think. It is a Muslim’s legendary antipathy to the habit of setting aside wealth. Hoarding discourages war and that is bad for the warrior nation.

ARY (October 21, 2005) Aniq Ahmad discussed contacts with Israel with Allama Mohsin Naqvi, Taj Haider and Ambassador (retd) Tayyab Siddiqi among others. Allama Naqvi said that the condemnation of the Jews in the Quran was not eternal and it was permissible to set up relations with the state of Israel. He said the Prophet (peace be upon him) had earlier made a pact (mithaq) with the Jews and called them one ‘ummah’ with Muslims. Had the Jews been eternally condemned on the basis of the divine reprimand in the Bible the Prophet (PBUH) would not have done that. It should be remembered that the Jews had made their mistakes much before the time of the Prophet (PBUH). One youth still asked him how he could say that while the Quran had stated otherwise.

Ambassador Siddiqi said contacts with Israel was a political issue and should not be mixed up with religion. If this was done then the Muslims would be punished by politics. He said Pakistan had to consult its own self-interest. He said in 1975 the UN General Assembly had condemned Zionism but after 10 years the Arab states had agreed to nullify the condemnation. He said if the Arabs were not keen on confronting Israel why should Pakistan? The world was dominated by the US and Israel was a part of the domination. Pakistan could benefit from contacts with Israel. He said Ms Bhutto was about to go to Israel in 1994 but did not.

Taj Haider said national honour and pride (qaumi viqar) was more important than national interest. He quoted Iqbal on parwaaz main kotahi and then declined into English. He denied that the PPP had started contacts with Israel. He said they began after 1998. He then said Pakistan should follow the example of China that had not accepted Taiwan. He followed that by saying Pakistan was made against Brahminism and now it was being taken back rather than forward.

Taj Haider in Karachi is taking the PPP to new depths of rightwing orthodoxy. Raza Rabbani is doing the same sort of thing in Islamabad. When the clouds break and the dust settles down, both will find the party marooned among a clergy that knows what the PPP is all about in the final analysis. What should one do with PPP leaders who ‘go with the tide’ at the cost of the party’s liberal tradition? Taj Haider had a tough time saving his language. Drifting into bad English was actually proof of his plunging below the intellectual belt. *

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