Feisal Naqvi

Archive for November, 2012|Monthly archive page

RIP, Ardeshir Cowasjee

In Uncategorized on November 27, 2012 at 9:44 am

The story that sums up Cowasjee best for me: at a human rights function, he was once threatened in polite language by a retired judge. Cowasjee’s response was instant and epic: “Saala, tum jaisa maaderchod bohut dekha hai hum ne.” 

I couldn’t believe that this story was true so as I checked with Ardeshir. He confirmed the story and then, seeing my incredulity, explained his position — succinctly and profanely: “Saala, what’s the point of all this maaderchod money if you can’t tell a maaderchod to his maaderchod face that he’s a fucking maaderchod.”

RIP Ardeshir. Saala, tum jaisa maaderchod humain aur dekhnay ko nahin milay ga.

Parliament’s abdication

In Uncategorized on November 14, 2012 at 4:14 am

I was asked recently by a distinguished economist whether I would consider filing a petition in the Supreme Court against our system of taxation, and more specifically, against the whole SRO system.

My response to the distinguished economist was threefold. I told him first that he was right and that the SRO Raj was probably illegal. Second, I told him a petition would be a waste of time since there are too many judgments to the contrary. And third, I told him that it didn’t matter.

Let me explain why.

To begin though, we must start with a segue into bureaucratese. The term “SRO” is an acronym for the phrase “Statutory Regulatory Order”. In other words, an order issued by the executive branch of government under powers delegated to it by Parliament can be — and often is — called an SRO.

So far, the reader must be thinking, what’s the big deal? Well, SROs are a big deal because of the way our tax laws are structured.

In practically all countries of the world, rates of taxation are determined by the legislature. This is because the power to tax is the most fundamental economic power of the state and as such, its exercise is normally entrusted to the highest and most powerful body of each country. In most countries, the “highest and most powerful body” is the legislature. In Pakistan, that body is the Ministry of Finance.

How can that be, you may ask. After all, Article 77 of the Constitution is titled “Tax to be levied by law only” and further expressly states: “No tax shall be levied for the purposes of the Federation except by or under the authority of an act of Parliament.” How then can taxes be levied by unelected bureaucrats?

The short answer to this conundrum is that our tax system is set up in reverse. The various tax laws consist of framework statutes, which impose a standard artificially high rate (e.g., 50 per cent) on every good or service within their purview. At the same time, the vast majority of those activities and services then get either wholly or partially exempted from the tax rate specified by the parent statute. And the legal instrument, which is used to notify those exemptions is a numbered and dated SRO. The net effect of the system is thus to take the power to tax away from Parliament and put it in the hands of the bureaucrats issuing the SROs.

According to the distinguished economist, there are more than 4,700 different tax regimes in Pakistan. What he means is that each and every industry has, over the years, worked out its own special deal with the tax authorities. These deals are then enshrined in SROs. Not surprisingly, the combination of discretionary power and very high financial stakes means that SROs are often rumored to be issued for other than sound financial reasons. In fact, getting dodgy SROs issued is such a cliché that it is a crime punishable under the NAB Ordinance!

Fine, next question: why is this unconstitutional?

The reason the SRO system is unconstitutional is because it amounts to a complete abdication by Parliament of its constitutional function to make laws. In simple terms, Parliament cannot pass a law which says that whatever Nathoo wants is law (because that would amount to “excessive delegation”). By the same token, Parliament cannot pass a law which says that the rate of sales tax shall be whatever Nathoo thinks it should be (or whatever the Ministry of Finance thinks it should be).

Which brings us to the next question: if our tax laws are so obvious an example of “excessive delegation”, why won’t the courts declare them to be unconstitutional?

The ostensible answer is that the demands of a modern state are so complex, so multifarious and so unpredictable that it is impossible for a legislature to anticipate all of the contingencies state officials may have to face. As such, the legislature is permitted to delegate part of its powers of legislation, provided the statute contains clear guidelines.

There is some considerable truth in this argument. At the same time, this argument has been abused to such a great extent — especially in financial cases — that it has now developed into an omnibus rationale, capable of justifying anything and anything. For example, in Banarsi Das v. State of Madhya Pradesh, AIR 1958 SC 909 a five-member bench of the Supreme Court of India held that the rate of tax, the rate of exemption and the identity of the goods being taxed could all be left to executive discretion. In simple terms, excessive delegation is a loser argument, especially in tax cases.

The more honest answer is to be found in history. Lest we forget, our political and constitutional system did not arrive fully formed, like Athena from the head of Zeus. Instead, this system gradually emerged from the protective womb of the British Raj and power was doled out to the popularly elected representatives in small doses over decades. Partition may have ostensibly speeded up this process but as shown by the tax laws, real power remained very much in the hands of an unelected bureaucracy. Our elected representatives have thus forever remained the equivalent of children given bikes with training wheels.

This brings me to the last question: why doesn’t it matter?

The reason why judicial acceptance of the SRO system doesn’t matter is because the SRO system is doomed: there is just too much money involved in determining tax policy for Parliament to let the bureaucracy continue in power.  Sooner or later, our elected representatives are going to realise that life will be oh so much nicer (and more democratic!) if the industry groups seeking exemptions and benefits are forced to petition Parliament rather than the Ministry of Finance. That development has already taken place in India. And it is only a matter of time before it happens here.

Parliamentary committees in charge of taxation — such as the House Ways and Means committee in the US — are generally renowned for their corruption. As and when the National Assembly takes over tax policy, our system is unlikely to be any different. But it will be more transparent. And it will be more democratic.

Published in The Express Tribune, November 13th, 2012.

Gresham’s law and public morality

In Uncategorized on November 14, 2012 at 4:13 am

The elections to the Supreme Court Bar Association (SCBA) were held this past week. Like the other 2,000 or so members, I was inundated with SMS messages requesting me to “vote and support” candidate X. On some days, I got more than 50 such messages. Some of the hopefuls even went to the trouble of calling me. A determined few went further and showed up at my office.

At the same time, despite the intensity of the campaigning, not a single candidate for a single office of the SCBA made any substantive promise. No manifestos were printed. Certainly, none were distributed. No one tried to win my vote by saying that they would seek to improve the problems faced by those who actually argue before our country’s Supreme Court. Instead, to the extent anybody bothered to make a pitch for my vote, it was based entirely on relationships: vote for my friend, vote for my cousin, vote for my political compatriot.

Lest you think this is not a big deal, let me explain. For at least the past two decades, and more specifically over the past five years, the SCBA has been one of the more important political organisations of this country. When the Chief Justice was removed by General (retd) Pervez Musharraf on March 9, 2007, the movement for his restoration was led in part by Munir Malik, the then president of the SCBA. Munir Malik was succeeded as president of the SCBA by Aitzaz Ahsan, the lawyer for the Chief Justice. Aitzaz Ahsan then led the second phase of the lawyers’ movement against the imposition of Emergency by General (retd) Musharraf on November 3, 2007, which eventually resulted in the restoration of the Chief Justice and the other ousted judges. Even today, while the bar associations of the various High Courts and district courts remain independent and very significant entities, the SCBA occupies a privileged position in the legal fraternity by virtue of its connection with the apex Court.

There is also no shortage of issues for the SCBA to discuss. The tenure of the current chief justice has seen an unprecedented expansion in the role of the Supreme Court. The Court has become completely identified in the public eye with an aggressive commitment to public interest litigation, a development which is highly debatable, both in legal and political terms. As professionals who practise at the Supreme Court, SCBA candidates should obviously have a position on this issue just like they should have ideas on how to deal with the massive backlog of cases in the Supreme Court. But none of the candidates bothered to express any thoughts on these issues to their voters.

Entry into the SCBA requires 10 years of practice at the High Court level followed by a rigorous interview and selection procedure. Members of the SCBA can therefore — with some justification — regard themselves as the cream of Pakistan’s legal crop. And yet, I repeat, not a single candidate in the SCBA elections bothered to make any substantive argument. More significantly, I seem to be the only person bothered by this omission.

My question is this: if the elections to an elite body of highly skilled professionals are to turn on nothing more than personality issues, what hope is there for the rest of this country? We hear so often that democracy cannot flourish in a country populated by poor illiterates but the membership of the SCBA is neither poor nor illiterate. We hear equally often that the only cure for bad democracy is more democracy. The SCBA has been holding annual elections for decades. Why, then, do the SCBA elections present the same sad picture as our political process?

Charlie Munger, Warren Buffett’s partner and a business legend in his own right, argued some years ago that while Gresham’s law had become obsolete in terms of currency, it could nonetheless be applied to societal mores.

For those not up to date with economic theory, Gresham’s law is the contention that bad money drives out good. In other words, if a state starts diluting the amount of precious metal in its coins, people will start hoarding good coins and only using adulterated coins.

Munger’s variation of Gresham’s law is that bad morality drives out good or, in other words, that public morality is in a race to the bottom. Once one person cuts corners, everybody else starts cutting corners too because that is the only way to survive. Pretty soon, there is nobody left who does not cut corners.

What, then, is the solution? Munger does not spell it out, but the answer lies in the works of Charlie Frankel, another thinker quoted by him during the same lecture. Frankel was an American philosopher and humanist who argued that systems of government were “responsible” in direct proportion to the degree that the people who made the decisions bore the consequences. At least to my mind, that simple argument explains more about Pakistan’s current state than all of the books titled using some variation of “The World’s Dangerous Country”.

Coming back to the topic of this column, I am forced to concede that the SCBA has become what it is because of the apathy of lawyers like myself. Put simply, SCBA candidates do not care about substantive issues because lawyers like myself do not force them to care. Well, starting today, that is going to change.

The next SCBA elections are exactly a year away. More importantly, the SCBA membership is small enough that even blocks of 10 or 20 voters count significantly. Assuming I can round up at least 10 votes, the plan is to put together a set of policy reforms and see if we can get any of the major candidates to bite. It may or may not work. But at least I’ll feel better when the next SCBA election comes around.

Published in The Express Tribune, November 6th, 2012.

A failure of principle

In Uncategorized on November 14, 2012 at 4:13 am

Other than inquiries about my ancestors and their relations with barnyard animals, the question posed most often to me in the wake of last week’s column is this: “Why are you so angry? Imran Khan was just being honest. Besides, he is the only one with a plan to attack militancy in Pakistan. What has the government done?”

To begin with, let’s remember that Imran Khan wants to be our leader. As such, his statements have to be examined on the basis of the principles they represent, not just for logical consistency.

What then does Mr Khan’s refusal to criticise the Taliban represent?

According to my friend Isfandyar Kasuri, it represents a laudable concern for the safety and welfare of Mr Khan’s workers. Isfandyar, in fact, compared it with the way one should react if women and children are being held hostage.

I find that argument unpersuasive.

Mr Khan’s principles need to make sense for the entire country, not just for his followers. Obviously, leaders must worry about the lives of those directly exposed to the threat of terrorism. But the issue here is the consequences of submitting to terrorism: it’s not about losing a battle but about losing the entire war. If Imran Khan’s statement is taken at face value, he could never order any action against the Tehreek-e-Taliban Pakistan (TTP), even as the prime minister of Pakistan, because of potential reprisals.

There is another aspect to Mr Khan’s scruples. Mr Khan was asked what he would do if the US refused to stop drone strikes within Pakistan. He said he would order the PAF to shoot down the drones. The questioner told him that this could lead to war. Mr Khan’s response was rhetorical but unequivocal. He asked the host whether it was better to live the life of a jackal or the death of a lion. He then added that sometimes there was no option but to say Allah o Akbar and leave the rest to God.

Let’s review this. Mr Khan is not inclined to criticise the Taliban because he has supporters who live in Taliban-controlled territory. On the other hand, Mr Khan has no problems leading this country into a potential war with a nuclear superpower, apparently because this is the manly thing to do and further because God will take care of us. Go figure.

Let me deal with other points now. I may decide to vote for the PTI as the least bad option. But that doesn’t mean Mr Khan can seek my vote simply on the basis that he is less corrupt and less demonstrably incompetent than the others. To be fair, I don’t think he is campaigning on that basis either. Instead, he is arguing that he represents a force for good and a genuine hope of progress and peace. And he deserves to be judged on that basis.

As I’ve said before, I’m intrigued enough by the PTI to seriously consider voting for it. I am also happy that the PTI has put together a reasonable economic policy while other parties have done zilch. At the same time, the PTI’s economic policies are secondary. The only real issue — right now, right here — is how Pakistan is going to deal with the scourge of fundamentalist militancy and the TTP.

Yes, Mr Khan does condemn terrorist acts like the attack on Malala Yousufzai. But his condemnations tend to be brief and he prefers to focus on the drones and the war in Afghanistan. And it is this aspect of Mr Khan’s thinking which both alarms and outrages me.

This is war, Mr Khan. In a war, what one wants is a leader who recognises the gravity of the threat. What one wants is moral clarity. What one wants is Winston Churchill, not Neville Chamberlain. The TTP are not just criminals nor are they merely an incidental side-effect of the war in Afghanistan. Instead, the TTP are openly waging war against the state of Pakistan. They are killing our soldiers, they are killing our people and they are boasting about it. To say that the TTP does so only because Pakistan is allied with the US is misguided. And to argue that once this alliance disappears, terrorism will also disappear, is further misguided.

First, the TTP seeks not only Pakistan’s disengagement from Afghanistan but the destruction of our current constitutional order. If the Americans leave Afghanistan, the TTP will still continue to demand that their particular version of Sharia be imposed in Pakistan. The TTP has killed at least 10,000 Pakistanis over the last five years and recently shot and wounded a 15-year-old girl for demanding education. Why, then, does Mr Khan refuse to take them seriously? And why does he forget their reign of terror when they took over power in Swat?

Second, Mr Khan’s assessment is wrong that the residents of Fata and the traditional tribals will control militancy once the justification for jihad disappears. Mr Khan likes to support this contention by referring to how the Fata leaders, back in 2004, used to hand over al Qaeda militants. Unfortunately, that tribal culture is now dead. This is because the TTP have killed hundreds of tribal chiefs, or Maliks, and brutalised many others into submission. Yes, if the US leaves Afghanistan, the Taliban will stop their jihad against the US. But the TTP will continue its jihad against Pakistan because it sees this state as deeply illegitimate. And the residents of many parts of Fata will not be able to stop them.

Third, the US has stated it will be keeping forces in Afghanistan even after 2014. If Pakistan’s avowed foreign policy becomes one of open “moral, political and diplomatic support” for the “jihad” in Afghanistan, we will effectively be declaring war on the US. Has anyone in Mr Khan’s stable of former foreign ministers seriously considered the ramifications of that step?

For the record, my difficulties with Mr Khan’s policies should not be taken as an endorsement of any other party. I have written repeatedly and unambiguously about thefailures of the PPP and the PML-N. My problem, in the end, is that I had expected more of Mr Khan than what is offered by the PPP and the PML-N. Apparently I was wrong.

Published in The Express Tribune, October 23rd, 2012.

Shame on you, Mr. Khan

In Uncategorized on November 14, 2012 at 4:12 am

Two days after Malala Yousufzai was attacked by the Tehreek-e-Taliban Pakistan (TTP), Imran Khan went to the hospital in which she was being treated to show his concern regarding her condition. And yet, when asked a day earlier why he didn’t directly condemn the TTP, Mr Khan had responded as follows:

‘We have local affiliates and supporters. Sure I can give big statements against the Taliban but that would make them [supporters] Taliban targets.”

Shame on you, Mr Khan.

Since you have chosen to present yourself as a potential leader of this country, let me make something clear to you: leaders can’t be cowards. And for you to make that statement while also purporting to sympathise with a girl injured precisely because she stood up for principles that you don’t have the courage to defend is not just cowardice but hypocrisy of the highest order.

Let me break down my last statement. Malala Yousufzai was attacked by the TTP because she stood up for things like the right of girls to a fair education. You have condemned that attack. That means you think Malala was right and her attackers were wrong. At the same time, you refuse to display the same bravery as Malala by openly condemning her attackers.

What does it say about you, Mr Khan, that a 14-year-old girl has more guts than you do? Had she been awake, what would you have said to her? Would you have told her not to be so stupid next time? Would you have told her to just accept the TTP’s belief that women are inferior? Would you have told her that Pakistan needs more cowards, not people like her?

Shame on you, Mr Khan.

Since Mr Khan dropped his clanger, the sentient part of the PTI has attempted to cloak his cowardice with a lot of doubletalk about drones, the war in Afghanistan and the root causes of evil. None of that suffices to excuse Mr Khan’s cowardice.

Let’s begin with drones. So far as I understand it, his argument is that the root cause of the evil is the US war in Afghanistan and that militants like the TTP are driven into acts of hatred by the violence unleashed by the US and now perpetuated through drone attacks.

This is bullshit of a high order.

The fundamental fact that Mr Khan and his cohorts either fail or deliberately refuse to appreciate is that the TTP and the Afghan Talibs are two very different groups.

The Afghan Talibs consist of groups indigenous to Afghanistan whose primary aim is to overthrow the US’s supported government of Afghanistan and to take over power in Afghanistan. Afghan Talibs have a beef with the state of Pakistan only to the extent that the state of Pakistan helps the US in fighting those Talibs. Many of the leaders of the Afghan Talibs have taken up residence in Fata and Balochistan, just across the Pak-Afghan border. It is these leaders in Fata who have been targeted by the US through drone attacks. If the US was to leave Afghanistan tomorrow and if the Afghan Talibs were to retake power in Afghanistan, the Afghan Talibs would have no fundamental dispute with Pakistan.

The Tehreek-e-Taliban Pakistan consists of groups indigenous to Pakistan whose primary aim is to overthrow the elected government of Pakistan and to take over power in Pakistan. The TTP does not accept the legitimacy of the Pakistani state. The TTP attacks the citizens of Pakistan through suicide bombs and kills Pakistani soldiers. Even if the US leaves Afghanistan tomorrow and even if the Afghan Talibs take over Kabul, the TTP will continue to fight in Pakistan, continue to kill Pakistani soldiers and continue to attack people like Malala Yousufzai. Conflating the TTP with the Afghan Talibs into one giant amorphous mass is not just stupid, it’s criminally stupid. It is at the same order of analysis as “two legs good, four legs bad.”

The distinction between the two groups is in fact made more evident by drone attacks. The state of Pakistan does not have drones and therefore does not use drones to fight the TTP. The US does have drones and it does use them to attack the Afghan Talibs but with a few very limited exceptions such as Baitullah Mehsud, there have been no drone attacks against the TTP. Trying to justify the TTP’s actions with reference to drones is therefore idiotic. One may as well justify the TTP with reference to poverty in Swaziland or Pakistan’s failure to win a World Cup match against India.

Please note that distinguishing between the TTP and the Afghan Talibs is not the same as saying that drone attacks are justified: that is an entirely different debate. It probably does not behove the sovereign state of Pakistan to meekly accept the invasion of its airspace by the US. But even if Pakistan should be aggressively acting against drones, that has nothing to do with the challenge to Pakistan’s sovereignty by the TTP. And if you, Mr Khan, cannot understand that logic, then you are unfit to lead this country.

Let me make another thing clear: Mr Khan says that it is a tragedy for Pakistan to be bombing its own people. Actually, no.

States use violence against their own citizens their whole time. A citizen who steals is jailed for theft. A citizen who kills another person is executed for murder. And citizens who take up arms against their own country are guilty of treason and thereby liable to be shot.

The same goes for the “root cause” argument. Frankly, I couldn’t care less what inspires or motivates the TTP. I know that the TTP doesn’t accept the legitimacy of my country or my elected government. I know that they kill my fellow citizens. I know that they kill the soldiers who fight for my security. I don’t need to know the “root cause” of the TTP’s beliefs any more than I need to know about the childhood traumas of a psychopath threatening my family.

Pakistan doesn’t need cowards, Mr Khan. Shame on you for adding to their number.

Published in The Express Tribune, October 16th, 2012.