The Pakistan Policy Blog

From today’s New York Times:

In April, Mr. Zardari told Ishaq Dar, the finance minister at the time and a member of Mr. Sharif’s party, which has since broken with Mr. Zardari, that he wanted the price the government paid farmers for wheat to be raised substantially as a way of rewarding an important constituency in Punjab Province, the nation’s most populous, according to two participants in the discussion with Mr. Zardari. The government would then have to heavily subsidize the cost of wheat to the consumer.

When Mr. Dar asked Mr. Zardari how he thought the government would pay for the subsidy, Mr. Zardari replied, “Print the notes,” according to the two participants, a government official and an associate of Mr. Zardari’s. In an effort to solve the impasse over the subsidy, it was suggested that Mr. Zardari form a committee of experts.

“ ‘I am the expert,’ ” Mr. Zardari said, according to his associate.

That was news to me.  Audacaious and maddening, but not surprising.  I’ll just make myself forget it by repeating, “roti, kapra, makan.“

But this below wasn’t news to me, nor to most observers of/in Pakistan:

“The two officials described another episode in May as the budget was being prepared. Mr. Zardari decided to scrap a proposed capital gains tax after a visit from a group of influential stockbrokers from the Karachi stock exchange, they said. The revenue from the capital gains tax, and from an income tax proposal on the rich, would have paid for an income support program for the poorest Pakistanis, they said. More than half of Pakistanis live on less than $2 a day, according to the World Bank.”

In mid-June, The News, a leading Pakistani English-language daily reported a claim that Zardari was visited in Islamabad by an unidentified person who arrived on a chartered plane (not an alien, but probably a leading banker) who was decisive in the reversal. Note that the person allegedly visited neither the finance minister, nor the prime minister, but the unelected (and many times indicted) “co”-head of a political party (or, more technically, an association of liberals, feudals, serfs, and others who share lineage/linkage/bondage to a set of charismatic figures and/or distributors of patronage).  Anyway — that’s democracy?  Well, maybe it’s just politics — sans rules and morays.

An official at Pakistan’s largest foreign exchange firm described the coalition’s breakup — and Dar’s departure — as “a welcomed move.”  He said, it “improved sentiments in the financial markets as both [Shaukat] Tarin and Naveed [Qamar] are very pro-market.”

Pro-market?  More accurate would be pro-mafia.  Very mature attitude.  So these spoiled brats are unwilling to cooperate with a minimally redistributative mechanism in their deeply poor society but American taxpayers are expected to dish out $1.5 billion/year to their country for developmental aid?  These guys are not the exception, but the rule.  I — and most of you readers — have paid more taxes than people such as Nawaz Sharif and Asif Zardari.

Trickle down in Pakistan means wealth trickling down from wealthy parents to their children.  More likely than a tax on capital gains is one on poor Pakistanis who have to sell their kidneys.  It’s a growth industry there.

And remember, Zardari heads a ’social democratic’ party.  That’s how convoluted it is.

The election of Zardari, albeit constitutional and a political fait accompli, is like locking a nation of 165 million in a ship with a madman at helm and chucking the keys into the Arabian Sea.  Zardari can prove everyone wrong.  Pakistan, and indeed the world, needs him to.  But the odds are the Zardari of now differs little from the Zardari of yesterday.  Pakistan, in perhaps as early as six months, will be back to square one, with one of its best opportunities for structural reform and rebalancing — led by its two largest parties, checked by civil society and the media, and in concert with a supportive military — vanquished.

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