Pakistan's military steps away from politics

An announcement that Pakistan's notorious military-run Inter Services Intelligence is shutting down its political wing is greeted by a mix of cautious optimism and a degree of scepticism. The military has been gradually withdrawing from the political arena for over a year. Even so, ISI chiefs have often wielded as much influence from outside as inside the organisation. In the US, the president-elect Barack Obama's economic team wins praise while the bailout for Citigroup raises doubts.

"In a move which may have far reaching effects on the country's politics and democratic set-up, the premier intelligence agency, Inter Services Intelligence (ISI), has decided to disband its so-called 'political wing' that for the last over three decades had been actively involved in monitoring and managing political activities inside and outside the government," Pakistan's Dawn newspaper reported. "A highly authoritative source told DawnNews that not only the 'political wing' was being disbanded, the officials working there have been given other assignments linked to the agency's original role of counter-intelligence." In an editorial, The News International said: "The military have been drawing back from the political arena almost since the appointment of Gen Kayani in October 2007 - his previous position having been none other than director-general of the ISI from October 2004 until his appointment as the Chief of Army Staff. Foreign Minister Shah Mehmood Qureshi has announced that henceforward the ISI will concentrate on counter-terrorism operations and no longer take a close interest in the private lives of political figures or in the manipulation of elections and political parties. The political wing of the ISI was a key player both during the Musharraf years and in the decades before that; and there were those that said - indeed many who still believe - that the ISI had become ungovernable and was a state within a state, accountable neither to the president not the prime minister." Nevertheless, the editorial concluded: "we would be wrong to assume that the ISI is ever going to take its eye off the political ball". An editorial in the Daily Times said: "The last time the Pakistan People's Party tried to make changes in the ISI was some months ago when orders subordinating it to the Interior Ministry had to be hurriedly rescinded on the ground of some 'misunderstanding' in drafting the relevant notification. Presumably, the abolishment of the internal political wing of the ISI would be the next best thing if it could get it in the circumstances. But has this really happened? Is Mr Qureshi levelling with us? We are not convinced." The editorial went on to note that: "Fired ISI chiefs have boasted their lingering hold on the organisation while appointed chiefs keep swearing that the organisation is obedient to them. After leaving the top job some generals don't mind dabbling in politics, clearly showing their bias in retrospect. One ISI chief actually created a political alliance against the PPP and today inspires the jihadi-religious elements. Another chief is informally leading the mammoth congregation of Deobandi Islam from where most of the banned jihadi organisations are drawn. Another has a case pending at the Supreme Court for handing out cash to politicians to affect the results of the 1990 elections. The 'political wing' was also busy preparing grounds for victories in elections held by Gen Musharraf in 2002. Those who lost complained bitterly of 'pre-poll' manipulations and clearly named the ISI. Yet, those who compelled the ISI to dabble in politics were finally punished by fate and the ISI could not save them. "If we want it, we can have a professional ISI. The wrong has been committed by giving the ISI - which is supposed to guard against external threats to security - a charter which undermines its professionalism. In the past, personnel were selected according to an ideological yardstick that may not be relevant any more. Many of the men who serve the ISI are still more fired by faith than intellect, which makes them vulnerable to the attraction of jihad and those who operate it. When the time comes to choose between the state and the people they have been handling, they tend to reveal clear signs of 'reverse-indoctrination'." The Financial Times reported that the change in the ISI: "will be welcomed in Washington, where the incoming administration of president-elect Barack Obama is preparing for a renewed engagement with Islamabad to counter the Islamist threat. A senior US official this year appealed to the newly elected Pakistani government to bring the ISI under greater control to prevent it aiding terrorist attacks and supporting the Taliban. "Mr Qureshi's announcement coincided with the arrival of Pervez Musharraf, Pakistan's former military ruler, in London. His visit has fuelled speculation that he may be scouting for residence outside Pakistan. "'The direct consequence of this decision [on the ISI] should be the evolution of democracy without interference from the military,' said Nasim Zehra, a Pakistani newspaper columnist. "However, Tariq Azim, a former minister and now leader of the opposition Pakistan Muslim League-Quaid e Azam, warned that a permanent end to the military's role in politics would only be achieved when civilian governments were more robust and effective. "'The quality of governance remains very weak in Pakistan and the government today has failed to take charge on a number of fronts,' he said." A BBC News report yesterday cast doubt on the accuracy of some aspects of Dawn's initial reporting: "A senior security official, requesting anonymity, told the BBC Urdu service on Monday: 'The ISI is changing, it wants to keep out of politics and concentrate on counter-intelligence.' "However the official said that the wing had only been rendered inactive and its staff had not been given any new assignments."

"President-elect Barack Obama has now made three things clear about his plans to bring the economy back: He wants his actions to be big and bold. He sees economic recovery as intimately linked with economic and social reform. And he is bringing in a gifted brain trust to get the job done," wrote EJ Dionne Jr, in The Washington Post. "Just three weeks after Election Day, Obama has already expanded his authority by seizing on 'an economic crisis of historic proportions,' as he described it yesterday, to call for a stimulus package that will dwarf anything ever attempted by the federal government. "But Obama is also using the crisis to make the case for larger structural reforms in health care, energy and education - 'to lay the groundwork for long-term, sustained economic growth,' as he put it. Obama clearly views the economic downturn not as an impediment to the broadly progressive programme he outlined during the campaign but as an opportunity for a round of unprecedented social legislation. " 'He feels very strongly that this is not just a short-term fix but a long-term retooling of the American economy,' said one of Obama's closest advisers. 'Obama has a holistic view of the economy. Health care is going to be part of it,' the lieutenant told me, and so will green energy investments, education reform and a new approach to regulating financial markets." Nouriel Roubini, a professor of economics at New York University whose pessimism has led him to be dubbed "Dr Doom" yet whose predictions have turned out to be prescient, was asked by Newsweek for his opinion about Mr Obama's selection for an economic team and what his choice portends. "Look, he wants to get things done, so he's choosing a really terrific team. To me, it says that he's choosing people who have great experience. He's choosing people who are pragmatic and who realise the severity of the national problem we're facing. They're knowledgeable about markets, about the economy and the political process in Washington. These are the very best people he could have chosen. I can't look too far, but it's a very good signal of what he wants to do." Meanwhile, after the US government's latest bailout, BusinessWeek said: "Federal regulators got a fresh inside look at Citigroup's books over the weekend - and it wasn't pretty. "The result: a new $306 billion federal bailout for the bank. On the one hand, it provides more clarity as to the lengths the government will now go to shore up the US financial system. On the other hand, investors continue to be wary about whether Citi was worth saving from oblivion. Worse, some of them worry that if a bank with one of the highest capital ratios nearly went under, who's next? "You had a tremendous amount of people looking inside at Citi in the last few days to figure out how bad it was, and they came away thinking that the capital markets can't handle this,' says David Ellison, manager of the $185 million FBR Small Cap Financial Fund. 'So, Citigroup wasn't a going concern. What does it tell you about the industry and everybody else all around the world that has the same assets?'" The New York Times said: "Almost overnight, Citigroup went from being the sick man of the industry to an institution with an edge over its competitors. The government is guaranteeing $250 billion of risky assets and pumping an additional $20 billion into the bank. "With the government behind it, Citigroup may now be able to borrow money in the capital markets at lower interest rates than its peers. "'Citi has a decided advantage over them because of the loss-sharing agreement,' said John Kanas, the former chief executive of North Fork Bank of Long Island. While banks may hold out for now, it may be only a matter of time before they too line up, several analysts said. "Indeed, a big question is how Bank of America, JPMorgan Chase and Wells Fargo will respond. Spokesmen for Bank of America and JPMorgan Chase declined to comment on Monday. A Wells Fargo spokesman did not return telephone calls. "Each of these giant banks, like Citigroup, is sitting on piles of residential mortgages, credit card debt, and corporate and commercial real estate loans that are rapidly losing value. Each is trying to absorb new businesses that were recently acquired." In The Washington Post, Robert J Samuelson looking at the wider economic picture wrote: "The stock market is nothing if not a psychological barometer. The present signal is unmistakable: fear. It's not just that the market has dropped by more than half; that decline parallels some previous post-World War II bear markets (48 per cent in 1973-74 and 49 per cent in 2000-02). More revealing are the day-to-day movements. From mid-September to Nov 21, there were 50 trading days; on 25, the market moved 4 per cent or more (16 down, nine up), reports Wilshire Associates. In the previous 25 years, there were just 25 daily moves of 4 per cent or more. We've gone from one a year to one every other day. "The wild stock swings confirm the palpable fear and uncertainty. On average, households expect to spend only $418 on holiday gifts this year, down 11 per cent from last year's $471, reports the Conference Board. Unemployment remains well below the average peak of post-World War II recessions (7.6 per cent). What terrifies Americans is the prospect that the slump will become much worse than average - and that the government has lost control of events. "This last occurred in 1979 and 1980, when inflation reached 13 per cent and government seemed incapable of suppressing it. No one knew what might happen. By 1980, interest rates on 30-year mortgages neared 13 per cent. Would inflation go to 15 or 20 per cent? (The brutal 1981-82 recession ended the high inflation.) There is a comparable foreboding today. Perhaps Barack Obama will change that, but so far, government officials, business leaders and economists seem overwhelmed. They're constantly playing catch-up and losing." In RFE/RL, Kathleen Moore said: "The global economic downturn is likely to cut the amount of cash sent by millions of migrants worldwide to their families back home, the UN and other agencies have warned, and the impact is likely to be felt keenly in Eastern Europe and Central Asia. "The decline in remittances to Eastern Europe and Central Asia is compounded by soaring food prices that have left many people in the region's poorest countries on the breadline. "'A number of our countries - Tajikistan, Moldova, for example - have very, very high dependence on remittances,' says Pradeep Mitra, the World Bank's chief economist for Europe and Central Asia. "'Therefore, as the world economy slows, as we expect it will - there will be a slowdown in Russia, Kazakhstan, and Ukraine - the poorer countries are going to be hit because the flow of remittances is going to go down.'" [e-mail]