Who’s more powerful, Taliban or the sugar barons?

The army and air force have taken on the Taliban and loosened the grip of the Taliban on our collective psyche. The threat of terrorism may not have vanished but it has definitely receded. But who will take on the great baronies of industry, commerce and banking against whose clubs, or cartels, the government in all its power and glory is helpless?

The sugar crisis represents only one aspect of the power of this multi-layered mafia. What the people of Pakistan are paying for sugar is a price determined not by the market but by the manipulation of this powerful lobby. When the government, employing some foresight — admittedly, a hard commodity to come by in our climate — should have imported some sugar to stabilize domestic prices, it did nothing of the kind. Whose pressure was it which forestalled this move?

In General Ziaul Haq’s heyday, a sign of power was to own a sugar mill. So anyone who was anyone sought a licence to set up the same. Today sugar-mill ownership cuts across the political spectrum, the who’s who of the sugar industry reading like a who’s who of politics. When in the veins of the country’s power structure runs not blood or national sentiment but sugar, is it conceivable that this power structure will turn against its kind and devour its own children?

Parliamentary sovereignty is one of the great myths democracies cherish and, in their wilder moments, even promote. But think for a moment: can parliament tinker with the price of cement? The cement cartel is one of the most powerful clubs in the country. Between themselves cement producers — some of the biggest names on the country’s industrial roster — set the price of cement and there is nothing than anyone can do about it.

The original sin — and I hate to say this — was committed in the early 1990s (I will not say who was then in power) when the State Cement Corporation was denationalised. From that fateful moment on the price of cement went up and up. Yes, yes, I know the refrain: it is no business of the government to own and run industry. But denationalisation should not mean complete deregulation, a total absence of check and control, which is what has happened with the cement industry, whose unchecked profits have come at the expense of the Pakistani people.

There is no better museum displaying the power of the cement industry than my district of Chakwal. When DG Khan Cement and a company owned by one of Queen Elizabeth’s knights — I joke not — wanted to set up cement plants in Tehsil Choa Saidan Shah of District Chakwal, they were backed by the whole might of the Musharraf regime — from Musharraf himself to Shaukat Aziz, to Punjab chief minister Pervaiz Elahi, down to the district administration.

DG Khan Cement played ducks and drakes while acquiring the land for its project but not as much as the company owned by the Queen’s knight which, with the help of the powers that be, misused the Punjab Land Acquisition Act — one of the most iniquitous pieces of legislation on our statute books — to forcibly acquire land around Village Tatral, next to the Hindu monuments of Katas Raj.

Because of the unholy incentives given to the cement industry Pakistan now produces more cement than it needs. Which means we are exporting cement at the cost of our natural environment, cement production being one of the biggest degraders of the soil and the environment known to man.

There has been a hue and cry about the damage done to the Margalla Hills by limestone quarrying and by a cement plant with a 1300-acre lease over a part of the Margalla range (this a gift from General Zia). But the devastation to the fauna, flora, soil, landscape and air of Choa Saidan Shah (or, more specifically, the Kahoon Valley over whose creation, so beautiful it is, the Almighty must have paused when He was creating Heaven and Earth) is on a scale much greater than anything happening to the Margallas.

Khalid Mirza, Chairman of the Competition Commission of Pakistan, is to be commended for the hefty fine he has recently levied on the barons of the cement industry. More power to his efforts and may there be more like him in the arid wastes of the Islamic Republic.

Banking is another cartel playing snakes-and-ladders with the country’s plight, its gaming skills again totally unchecked. Its patron saint during the Musharraf era was a smart banker himself, Shaukat Aziz (why does his name occur again and again in the roll call of our economic misfortunes?). What this sector received from his hands was not velvet but platinum treatment. While banking profits soared, the people — as usual — found themselves ripped off.

This sleight of hand was achieved through a simple mechanism. I’ve just called my bank to get my facts straight. The rate of return on deposits is five per cent while the interest rate on loans is almost 19 percent. During the Musharraf years the return on deposits went as low as two per cent. This is less sleight of hand than daylight robbery.

The high and mighty of course follow a well-trod route around this conundrum. Whatever the interest rate on loans, they are scarcely bothered because, if sufficiently high and mighty, they manage to avoid the entire inconvenience of having to return their loans.

The loans written off every year by our leading banks would be a scandal anywhere else. Here it is normal practice which doesn’t even elicit much comment any more. In Musharraf’s early days, after I had once commented on the business skills of Chaudhry Shujat Hussain and Pervaiz Elahi, I was invited to lunch by them so that they could explain their side of the story. With a solemn face Chaudhry Shujat assured me that all their affairs with banks were properly regularised. I said that I did not doubt that for a moment. All their loan write-offs — and those were massive — were done by the book.

These two chaudhrys have always been famed for their hospitality. I had written that if I had only a hundredth of the loans they took and never had to pay back, my table would spread from the Himalayas to the Arabian Sea.

The benign practice of doing things by the book remains alive and well. Prime Minister Gilani’s respected wife, Madam Fouzia Gilani (widely admired for her grace and charm), along with some business partners of hers took two loans from the Agricultural Bank –71 million and 100 million — way back in the 1980s. As, quite correctly and entirely in keeping with the prevailing norm, they paid back not a penny of those loans; they had cases for recovery filed against them. Now, Allah be praised, we stand informed that matters have been settled between Madam Gilani and the Agri Bank and the cases have been withdrawn.

Prime Minister Gilani is all for transparent government. Things can hardly get more transparent than this.

The only high-flying banker friend I have is Ali Raza of the National Bank whose smartness and banking prowess can be judged from the fact that so far the only thing I have received from him are compliments, nothing that looks like a loan I would not have to return, the only true status symbol in Pakistan.

Leona Helmsley, the New York billionaire and hotel investor — later convicted of income tax evasion — famously said, “We don’t pay taxes. Only the little people pay taxes …” In Pakistan, as the example of First Lady Gilani freshly illustrates, only the little people return their loans.

Politicians in Pakistan live under a great illusion. They think they run the country when actually they do nothing of the kind. More than even the red-stripe wearers in General Headquarters, it is the captains of industry, commerce, banking and real estate who run things from behind the scenes and wield real power. Politicians represent the face of things. The string-pullers are different.

Malik Riaz of Bahria Town has been in with every government. Retired military high-rankers are on his payroll. He was thick with Musharraf, thick with the Chaudhrys (the ones famous for their hospitality), and now very thick with President Zardari. And he is only one instance of a phenomenon much greater than him.