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DAWN Editorials – 16th March 2016

Syria peace talks

AS the Syrian civil war completed its fifth year on Tuesday, a number of interlinked events have raised faint hopes that one of the Middle East’s most devastating modern conflicts could be wound down at the negotiating table.

A shaky ceasefire that went into effect at the end of February is holding, while peace talks are currently under way in Geneva under the UN’s aegis. Moreover, Russia has started pulling out its troops and aircraft from the Syrian theatre; Moscow intervened in the conflict in September to shore up Bashar al-Assad’s forces.

Indeed, the Russian intervention has been a game-changer, with Moscow’s air power helping Damascus regain the upper hand in the civil war.

Meanwhile in Geneva, we should not expect miracles; the Syrian regime and the Western-backed rebels are poles apart on many matters, primarily the fate of Mr Assad.

The opposition wants the Syrian strongman out of the picture immediately, while Damascus has termed the president a “red line”.

As noted by the UN envoy to Syria, such rhetoric is part of the negotiations process. What is important is that both sides — the Syrian government and the moderate opposition — find some middle ground and take the peace process forward.

Should both sides stick to rigid positions, it is more than likely the bloodbath will resume. In this matter, the respective sides’ external backers — Russia and Iran in the government’s case, the Western states, Turkey and the Gulf Arabs in the rebels’ case — should urge their Syrian allies to make compromises.

Moreover, the exclusion of the Syrian Kurds from the peace process may be counterproductive. The Kurds, apart from the Syrian forces and their allied militias, are one of the most effective fighting forces countering the militant Islamic State group and other extremists.

All parties in Geneva should remember that groups like IS and Al Nusra continue to hold considerable swathes of

Syrian territory, and should the peace process succeed, a new challenge will await them — that of dislodging the militants.

SBP questions

THE corporate sector has a few questions to answer after the State Bank pointed out that it is sitting on a pool of investible resources that could be as large as Rs3.7tr.

Moreover, the central bank also pointed out that corporate entities are putting money in government securities instead of real economic activities, preferring the risk-free route of lending to government rather than pursuing profits through investing activities.

The numbers given by the State Bank during an event at the Pakistan Stock Exchange are truly massive.

According to its analysis of non-financial listed companies, the net surplus on corporate balance sheets is as large as Rs446bn, which when combined with equity and leverage capacity, yields a pool of investible resources that is almost 14pc of the total GDP.

Considering that the security situation has improved, reserves are at record highs, inflation is low and set to remain low for the foreseeable future, the economy has stabilised, and there are “no major risks in sight” (in the words of the State Bank governor), why is this money sitting around?

Or worse, why is it being ploughed into government securities rather than finding its way into the economy?

This is a good question, but unfortunately, there are some equally good answers. The investment environment is tainted by the growth of an undocumented sector, which is fuelled by a massive and growing pool of tax-evaded wealth.

It is overshadowed by the speculative returns in real estate and the runaway growth of the trading economy where Chinese goods have flooded the market.

It is hamstrung by a weak policy framework driven by whimsical changes in policies and a non-transparent tax regime.

The State Bank is aware of these weaknesses since it has alluded to at least some of them in its annual report.

However, the governor’s words at the PSX clearly indicate that the resources to fuel future growth are available in generous quantities. All that is required is to tap them.

But that will not happen on its own; gentle goading from the State Bank can help but not create the will to invest. That can only happen when the government moves beyond stabilisation in its thinking on the economy, and is ready to undertake the reforms necessary to provide a stable 10-year horizon for investors. This is not rocket science, and it is not too late to start working on it now.

After the operation

OPERATION Zarb-i-Azb may have been an urgently needed military operation, but it was also obvious at the time of its launch that it would be the apogee of counter-insurgency operations in Fata.

Once Zarb-i-Azb would be completed, militarily the clear-and-hold phases across all seven agencies would have little further to go. Now, the country appears to be at a stage where the military is turning its attention to what comes after clear and hold — in fashionable counter-insurgency parlance, that should be the build-and-transfer stages.

Adjusting for local realities that would mean the mass resettlement of IDPs, Fata reforms and the rehabilitation of a civilian administrative apparatus that can focus on socioeconomic needs to bolster the security that the military has provided.

Yet, as Zarb-i-Azb comes to an operational close — with the capture of major heights and strategic passes in North Waziristan, large-scale fighting will likely end in the region — there are several questions that need to be asked.

First though, the bravery and courage of the soldiers and military personnel who risked their lives for the country’s safety and security should be warmly applauded.

What, however, about the numbers of alleged militants killed in the final, Shawal phase of the operation so far?

The figure provided by the ISPR, 207 militants killed, is small for an area that has proved so difficult to capture.

Have many more militants done what they have done before in other regions ie melted away into adjoining areas? If so, where have they gone? And what is the military’s plan to progressively stamp out the last militant sanctuaries?

The morphing of Zarb-i-Azb from a counter-insurgency operation in Fata into a broader counter-terrorism agenda across the country ought also to be questioned.

The fight against militancy was always going to be a long one and there is a great deal of interconnectedness between militancy in Fata and terrorism in the rest of Pakistan, but specific operations do need closure.

The fate of North Waziristan should be clear and separate from the very different nature of counter-terrorism and intelligence-led operations that are continuing across the country.

Closure also provides a relatively straightforward way to assess military claims. Rah-i-Raast (Swat), Rah-i-Nijaat (South Waziristan), Operation Thunder (Mohmand Agency), Khyber-I and Khyber-II were each launched and eventually concluded, allowing the claims of military success to be tested against realities on the ground.

Similarly, Zarb-i-Azb and its conclusion would allow Fata and its residents to turn their attention fully to reconstruction, resettlement and political reforms.

For all the sacrifices made by the residents of Fata and the military, the gains are far from permanent.

Fata cannot simply return to its pre-insurgency way of life. Yet, meaningful reforms and socioeconomic uplift become all the more difficult in the face of an open-ended military operation, even if just in name.

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