Pak Government Says, "Taxed Enough Already!"

While Dick Armey, Sarah Palin, and the rest of the TEA Party types weren't looking, their movement was joined by a new recruit. The newest imbiber of the heady beverage composed in major part of lower taxes is the government of Pakistan.

Pakistan already has one of the lowest tax revenue rates in the world, nine percent of the country's economy, (this should be compared with the 28 percent obtaining currently in the US,) but even that is thought to be too much by the government as well as the Pakistani elite. Almost nobody pays any taxes at all, only two percent of the 175 million Pakistanis are losers in this particular game of life. Again the figure of ninety-eight percent not paying a single rupee should be compared with the estimated forty percent of Americans who fork over nada to Uncle Sam.

It isn't that Islamabad doesn't need revenue. As a result of the massive flooding of recent weeks, the government is faced by umpteen billion dollars worth of recovery, repair, and reconstruction costs over and above the customary expenditures for a bloated, inefficient, and corrupt legion of civil servants, the building of nuclear weapons, and the appetite of an army always alert and ready for the Indian hordes to pour into Kashmir.

The Carnegie Endowment has issued a blunt report on Pakistan's Nation of Tax Avoiders which pulls few, if any, punches. The financial elite of the country in conjunction with politicians both in and out of uniform have resisted any attempts over the past six decades to install an equitable, progressive system of taxation which would meet the legitimate needs of government. Led by the large landowners of Pakistan's highly lucrative agricultural sector and ably supported by the urban upper and upper middle classes, government after government has backed down from even modest changes in the tax code. It might be noted that agribusiness pays no taxes on anything, ever.

The US and other donor states have been huffing and puffing something fierce over the demands by Islamabad that the taxpayers of "more fortunate" countries spew forth the gushers of money said to be needed in the wake of the flood while wealthy Pakistanis sit back free from any obligation to their own country. Even the Obama administration has detected a lack of fairness in this arrangement.

Washington and other capitals have been placing a surprisingly high degree of pressure on the What-Us-Tax? Zardari regime. While some of the pressure has been applied with a view to encouraging Islamabad to reform the tax system, much has been directed to a much more modest goal--collecting all the revenues to which the central government is currently, legally entitled. Simply getting the money which is owed by the taxable members of the elite today would generate an additional ten billion dollars per year according to the former director of the central bank.

Ten gigabucks annually would not cover the costs of rebuilding but chump change it ain't. You don't have to be Allan Greenspan to understand that.

But, the government of President Zardari hasn't gotten the message. Or, to err on the side of accuracy, it has received the message from abroad, but it has heard a domestic message more loudly. The domestic elites of Pakistan (which includes the military both active and retired) have countered with a resounding and unified, "No!"

Of course it would be impolitic in the extreme for the Zardari government to tell the truth. To say, "Our Mr Bigs won't pony up and any attempt on our part to make them do so simply means they will destabilize the country, at the least, putting their money in Swiss accounts and getting the next flight out of town."

No, the Islamabad Movers and Shakers will be more delicate, more indirect, more implicitly threatening. The man who wrote the cited Carnegie report, Akbar Zaidi, puts it this way. "If you don't help us, the economy will crumble. The Taliban will take over. And, there goes your war on terror."

Zaidi has it right on. Islamabad will go to its default position: Pay up or something horrid but unspecified will occur. It has worked before, time after expensive time. And, it will work again.

It will work not because Pakistan is, as has been claimed so often by American presidents from Nixon to Obama, a key "ally." Pakistan has not been an American ally for more than a half century and isn't going to become one no matter how many greenbacks are shipped over there.

Pakistan has importance to our national and strategic interests for two reasons only. The first is geographic. The overarching second reason is simply that Pakistan is a member of the nuclear club. Were it not for the second factor, the first would be of no compelling moment. There are sufficient pieces of real estate around the world which can serve as (to use the dramatic but less than accurate formulation of President Obama) "the central front."

The nuclear factor is the critical element in the equation. It is what gives Pakistan the muscle necessary to displace the domestic responsibility for flood reconstruction--as well as economic development generally--onto the unwilling (and increasingly unable) shoulders of American and other taxpayers.

The question as to the limits of Pakistan's nuclear based extortion has been raised by a most unlikely champion--the International Monetary Fund. Recently the IMF held back a billion dollar installment of the multi-billion dollar economic stabilization loan taken out by Islamabad two years ago. The reason was Pakistan's failing to undertake a number of agreed upon reforms including a revamping of the tax system.

Previous attempts by the IMF to draw a line in the sand have failed because one or more of the major players invoked Pakistan's "strategic importance." The same dynamic is likely to apply once more. There is no doubt that Islamabad is counting on it.

The donor nations are playing a game of chicken with Pakistan. In the past it has always been the US which has swerved to avoid apparent disaster. The highest probability is that we will do it again--after some "tough" talk from Secretary Clinton, President Obama, and Special Envoy Holbrooke. There will be some harsh words, the pronouncement of an agreement, praise for Pakistan's earnest efforts, some tears for the "innocent victims," and the money will flow again, flow in torrents rivaling those of the river at full crest, and with results not much more beneficial.

There may be a lesson here for the American TEA Party types. All they have to do in order to get the US government to do what they wish is to gain a rudimentary nuclear capacity. Then they will have Uncle Sam by the short ones.

That, of course, is a lesson already well understood in Tehran.

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Is It Back To The Generals Time For Pakistan?

The massive flooding in Pakistan is, to use a hoary Britishism, "a bit of a poser." Over ten percent of the population has been directly hit by the water. The indirect effects have ranged over the entire country.

Throughout it all, the government has behaved as if clueless. The president chose to go to the UK during the onslaught of the slow motion catastrophe. Other senior officials have acted as if "let them eat cake" was the government motto. The ponderous, notoriously inefficient bureaucracies have responded to the demands of the crisis with the alacrity of a tranquilized snail. At all levels, the government wallahs have demonstrated a capacity for being out of touch with the realities faced by the hordes of dispossessed. Simultaneously, the legions of wallahs have exhibited they lack even the pretense of being in control of the situation.

Before the floods Pakistan was staggering along the ragged edge of failing as a state. Having shown a continuous unwillingness or inability to handle the Frankenstein monster created by the Directorate of Inter-Services Intelligence (ISI), the civilian government of President Zardari and Prime Minister Gilani appeared to be heading down the tubes of a Taliban takeover. The lurching progress of the several highly touted but substantially inconclusive "offensives" undertaken by the Army did nothing to restore confidence in the longevity of the government.

Then came the floods.

Pakistan is no stranger to floods. The Indus river and its tributaries had been tamed only in small part by ambitious flood control projects underwritten in large measure by American money and engineering talent decades ago. Much of the progress made possible by these earlier excursions in civil engineering have been offset in recent years by deforestation along the upper reaches of the Indus watershed.

Pakistani and foreign observers alike prognosticated that the deforestation coupled with changes in population patterns and agriculture along with an apparent indifference on the part of both civilian and military governments to the risks assured that someday in the not distant future the granddaddy of all floods would make "Surf's Up!" the word of the day for the millions living along and dependent upon the Indus.

Despite the knowledge, the experience, and the warnings, the government of Pakistan was totally unready when the inevitable happened. If any segment of the government at any level had any plans for dealing with a monster flood as the monsoon rains fell, they must have borne the same relationship to reality as did the emergency plans of BP for handling an oil spill.

As the water heavy clouds of the monsoon parked themselves over the high country of Pakistan, the government made no preparations for the drearily predictable consequences of a lot of rain falling on deforested steep mountain sides plentifully provided with drainage channels--all of which ended at the Indus River. No emergency supplies were prepositioned. No first responders were given warning orders. No precautionary evacuations were ordered. There was a whole lot of nothing done on the part of the civilian government.

As the catastrophe unfolded with the horrid slowness of a Greek tragedy, the Islamabad government limited its first response (and its second response, third response and so on ad infinitum) to the default demand for foreign origin money. Rather than making even the slightest effort to take charge and move out on the disaster's consequences, the elected leadership of Pakistan simply shouted, "Send us money! Send us supplies! Send us helicopters! Send us! Send us!"

The outside world, the world of "infidels," did respond. Money was sent. Emergency supplies of all sorts were sent. Military assets such as helicopters, medical units, water purification plants were deployed. The US, the UK, other Western countries responded quickly, effectively, and generously.

Not only Western governments but Western based NGOs came in force. Whether official or non-governmental these outside agencies saved lives, housed the shelterless, provided food, water, medical assistance. Prodigies were undertaken so broken lives could start the process of recovery.

Even Pakistan's Official Main Enemy, India, sent money. Of course, the Pakistani government could not directly receive the tainted Indian rupees, instead requiring the foul five million dollars be furnished via the cleansing hands of the UN.

Pakistani Taliban and other groups favoring violent political Islam also responded to the demands of the emergency quickly, effectively, and generously. When not threatening Western aid groups or killing "infidel" aid workers, the Mighty Men of the Koran did provide food, shelter, medical attention along with propaganda materials to the refugees.

One indigenous entity stood out in the chaos of flood and refugees. The Pakistani army demonstrated that it, unlike the government, was not only willing but both ready and able to provide direct, real assistance to the displaced and dispossessed. The men and machines of the Pakistani Army and Air Force have shown a genuine capacity in rescue and relief work which was lacking in combat operations against Taliban.

The Army has increased its luster, its perceived legitimacy, in the estimate of Pakistani civilians generally, not simply those in the disaster zone. As the government's star has fallen, that of the military has risen.

It is not surprising that the first major call for the Army to take back its governing role has come in recent days. Altaf Hussain, the head of the Muttahida Quami Movement (MQM), has called upon Pakistan's "patriotic generals" to oust the "corrupt politicians." The MQM is not some sort of minor league outfit and Altaf Hussain is not a fringe orator.

He may be in exile at the moment but the government depends upon the twenty-five parliamentarians who are members of MQM to stay in power. This means MQM can choose to force a vote of no-confidence. At this point the government would fall and political chaos might ensue. Not a pretty thought.

Considering that the Army has run Pakistan for more than half of its sixty-three years of independent existence, the call for the "patriotic generals" to take on the task one more time must be taken seriously. The civilian government has given even its most ardent supporters reason for pause.

In large measure the characterization of the civilian politicians as "corrupt" is well supported by the record over its term in power. Corruption, inefficiency, duplicity, arrogance, are all justifiable accusations. The paralysis exhibited by the Zardari/Gilani government has shredded whatever credibility it may have possessed. The lack of effective response by the government has erased any functional legitimacy it may have held only a month ago.

In Pakistan a civilian government has no particular existential legitimacy. The absence of a strong history of civilian government precludes existential legitimacy. This means that the civilian government to survive can depend only on functional legitimacy--the perceived capacity and will of the government to address effectively the needs and fears of its citizens.

At the moment the civilian government has no perceived functional legitimacy in the estimate of the vast majority of Pakistanis. This reality opens a couple of unpleasant (from the US perspective at least) doors.

One of these leads directly to another military coup. The US is opposed to this. In Pakistan as in the world generally, the US supports civilian democratic rule as the best alternative. Current US declaratory policy is to reject any support for a military junta in Islamabad. There is reason to believe the Army is not in a hurry to leave the barracks and return to the presidential palace only two years after relinquishing power to elected civilians.

Then, there is the second door. That door opens on a very unpleasant, highly unstable scene of political chaos. Neither MQM nor any other party has a good chance of gaining a majority in any somewhat fair election. A party with a plurality would still have to form a coalition in order to govern. This task would not be simple and straightforward. Pakistan is not the UK. Neither is it Australia. In those countries the formation of a coalition might be difficult but it is certainly not impossible.

In Pakistan the word "impossible" comes to mind quickly. The basis for this conclusion is easy to find. In Pakistan today the electoral process like that of the Fourth French Republic leads rapidly to unstable coalitions of improvised nature forcing unlikely bedmates to make quick deals and easy promises. The result is a series of broken promises, dead on arrival deals and collapsed coalitions.

The political dynamic of revolving door governments would benefit only Taliban and similar advocates of political Islam. The deals and counter-deals, promises made lightly and broken easily, a parade of minority governments, would destabilize Pakistan, ruin American policy ambitions in both Pakistan and Afghanistan, and highly probably bring Taliban to power.

Faced with chaos it is improbable in the extreme that the Obama administration would continue its blind faith in the virtues of civilian government and "democratic" elections. It is even more improbable that the Pakistani military would stay true to its recently discovered faith in civilian supremacy.

Given the second door, the first does not look so unattractive. Perhaps the least-worst world is one where the Pakistani Army shrugs its collective shoulders and takes over one more time and the US accepts the accomplished feat. Now or in the very near future would be the least-worst time for the armed forces of Pakistan and the "progressives" of Washington to take a firm grip on the realities since the best time to ride the wave is when the tide is rising.

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Here Come Those Guys--Again

In this case the "guys" are the government of Pakistan. And, shock of shock, they are coming with hands outstretched and mouths muttering dire warnings of unspecified but horrid things which will most certainly come to pass unless the outstretched hands are speedily filled with billions of dollars.

The cause for the current demand for money is the floods which have wracked the Indus valley with very ill effects for twenty or so million Pakistanis. A second motivation for the escalating cries for largess is the low turnout to date of governments and individuals willing and able to donate to the Pakistani Flood Relief Fund. Other than the US (which has reasons other than the altruistic and eleemosynary,) the UK (which has motives other than the humanitarian) and a few other countries such as Australia and Denmark, there have been few national donors.

The membership of the Organization of the Islamic Conference (OIC) has been conspicuous by its absence from the UN's list of donor countries. Regional allies such as Iran and China have not shown any particular eagerness to step up and start writing checks.

The Pakistani government is facing a very real, perhaps existential, crisis. The probability of Pakistan joining the ranks of collapsing states went up orders of magnitude as the flood waters washed down the Indus. A certain level of both panic and prevarication on the part of the government is expectable.

But, as has so often been the case in the past, the government figures go too far, way too far in their rhetorical overkill. The centerpiece of the Words From Islamabad has been the explicit threat of "extremism." The narrative reads simply, "Give us money, lots and lots of money, with no questions asked or accountability required, or there will be extremism beyond imagining in the days to come."

Even if there is a measure of truth to this equation, the blunt wording transmogrifies a request for humanitarian and economic aid into one more extortionate threat. While extortion works, particularly on the US, it is a limited tool. And, the Pakistani government is running up against the limits.

It is the realization that the old trick of your-money-or-your-life may be losing its magic which has driven some of the more risible bits of Pakistani official exaggeration. For example, the government trotted out one Salman Ahmad, a popular musician, who averred that Pakistan's one hundred million people under age 25 "feel abandoned by the world."

Get a grip, Salman, the vast majority of those hundred million, particularly the ones who live way up country on the banks of the Indus and the tributaries don't know squat about the "world" and wouldn't have the slightest notion as to whether or not they had been "abandoned by the world." Most of these anti-American, anti-Western, pro-Islamist, pro-Taliban, past or present inmates of madrassas lavishly funded by Saudi Arabia know no more of the world and its doings than permitted to by the imams and other clerics who control their lives.

It will not matter how much aid the US provides. It will not matter how many Pakistanis owe their lives to an American flown helicopter. It will not matter how many Pakistanis survive on MREs which meet the requirements of Islamic law. It will not matter how many Pakistanis recover from injury or disease due to the presence of American medics or medicine. When all is done, when all the money has been spent, when people total up their experiences, no lasting credit will be thrown in the direction of the US.

To put it bluntly, all our efforts, all our money, all our assistance will not buy any friends in Pakistan. Heck, it won't even rent us any. Ten days from now, or ten months, or even ten years hence, Pakistanis will still be overwhelmingly anti-American, anti-Western. Or, of course, there is always the strong possibility they will be even more willing to piss on Uncle Sam's face than they are today.

The role of Islam in the defining of the Pakistani nation and state assures that the US will always be right in there with Israel and India as the "main enemy." Particularly after the dictator Zia established his "Islamization " program with the aid of Saudi clerics and money, the orientation of Pakistanis generally, the views of young Pakistanis in particular, would be antithetical to the values, imperatives, and goals of the US and the rest of the West.

A little bit of money is not going to change that ground truth. The billions of aid haven't altered it in the slightest. The outpouring of aid, both governmental and private, following the Kashmir earthquake didn't erase a jot or tittle of the profound and pervasive anti-American sentiments of the Pakistanis. If Richard Holbrooke, Hillary Clinton, or President Obama really, really believe that more US aid now will alter the reality of the human terrain in Pakistan, they are badly out of touch with the real world.

Admittedly, the amount of cash promised by the US is a mere bagatelle compared to TARP or the "stimulus program," it is nonetheless a matter of tossing the money of the future down the rat hole of today's Pakistan. Best case a little bit of the oodles and gobs of borrowed (or simply created) money will go to some more or less useful purpose after the majority has stuck to the fingers of Pakistani governmental wallahs, the vested interests of the legions of NGOs, the get-a-little-for-yourself crowd at the UN, and hordes of middlemen, contractors, and assorted camp followers of disaster.

This may be a highly pessimistic view of a dystopian environment, but the weight of history is in favor of it. The Obama administration has already sent the money down the tubes; it will be followed by more, a lot more. Maybe something good will result.

Just don't bet the ranch on it.