Friday, March 5, 2010

Privatization of Key State Functions in Pakistan

The last few years in Pakistan have seen significant proliferation of privatization of traditional state functions. There are a growing number of private security companies providing armed guards, private toll roads, private education at all levels, private hospitals and clinics, private water delivery businesses, and private clubs. Instead of helping improve the situation for all of their fellow citizens, it seems that the Pakistani elite are retreating into their own shells to isolate themselves from the terrible effects of deteriorating governance in their land.

Privatization wave is not limited to Pakistan alone. Prompted by growing security concerns and faced with huge budget deficits, the United States is seeing increasing privatization of security functions, often referred to as "dual law enforcement". Gated communities patrolled by private security guards are popping up all over the United States. Privately operated prisons are also growing, along with private police forces in America.

The US wars in Afghanistan and Iraq have seen new highs in levels of privatization in intelligence and combat support roles. The number of US contractors working for the US military and the CIA in the Afghanistan and Pakistan region exceeds the total strength of the US troops and CIA personnel, according to estimates by Jimmy Scahill who has researched and written extensively about Blackwater (aka Xe Services). The presence of over 80,000 US military and intelligence contractors in Afghanistan and Pakistan makes the level of privatization of war unprecedented. US is reportedly employing private security contractors provided by the American private military company (PMC) Dyncorp to carry out intelligence and security operations in Pakistan.

Pakistan's neighbor India, too, has hired, armed and trained private militias like Salwa Judum in its war against the Maoists in Chhattisgarh and other Indian states. There have been allegations in the past two years of rape, murder and extortion by Judum and other such private armies backed by the state.

Sweden based security firm Securitas is emerging as one of the largest private security contractors in the world. Securitas has acquired companies to become a player in many countries from the Czech Republic to Mexico and Morocco.

Another private global security company G4S Wackenhut has presence in Pakistan, with its headquarters located in Karachi. It provides services such as armed guards, cash services, security systems, facility management, research & collection services, canine services, consultancy & risk management, to its Pakistani clients.

“These recent acquisitions (by private security corporations) reflect opportunities created by the current economic crisis. Global security providers like Securitas aspire to continual global growth and expansion, and their biggest profit margins are generally in emerging markets. As profits come under pressure in the more mature markets of Europe and North America, a global acquisition strategy becomes even more important,” Professor Rita Abrahamsen and Professor Michael C Williams of the Graduate School of Public and International Affairs at the University of Ottawa, told ISN Security Watch.

Local government services are being cut in many areas in the United States. California city of Tracy has decided to charge residents for responding to emergency calls. Residents can pay a $48 voluntary fee for the year which allows them to call 9-1-1 as many times as necessary. Or, there's the option of not signing up for the annual fee. Instead, they will be charged $300 if they make a call for help.

At a recent debate organized by Intelligence Squared, the attendees voted in the affirmative for the motion that "California is the First Failed State", because of its inability to provide basic services to its residents, like those in Tracy, California.

Here's a tongue-in-cheek guest post by freelance writer Syed F. Hussaini. It pushes the envelope by proposing privatization of police functions for improving the deteriorating law and order situation in Pakistan:

Pakistanis were heartbroken to see The National Geographic casually listing their country as a failed state in its September, 2009, issue.

There is no calibrated scale to measure how bad is the breakdown of law and order in Pakistan. One convenient barometer can be the personal experience. How many people an ordinary Joe knows who had been a victim of a recent crime? This simple, first hand approach would tell us that the gravity of the problem has reached a level where almost every single individual has a recent story to tell of how he himself or, a family member or friend, became a victim of a crime. It was not so in the 1970s. Back then, incidents of pickpocketing aside, a common man had to search his mind hard to think of somebody he personally knew as a crime victim.

The inability of the state to maintain law and order created a market which has since been growing steadily. Private security companies provide armed guards at the homes of the rich who now travel in convoys of sport utility vehicles loaded with gunmen. Private citizens are dispensing ready justice on the streets of big Pakistani towns burning robbery suspects alive. And, security service providers appear to be working hard to catch up with the enormous needs of this vast market of 173 million consumers.

It is not the first time the private sector is seen marching into the domain of the state and bringing in some positive change. Once upon a time, you needed good connections to get a telephone connection in Pakistan. Or, you had to pay tens of thousands of rupees as bribe to the government officials at the telephone department to have a phone line brought to your home or office.

Things changed. The winds of privatization blew away the monopoly of the telephone department and the advent of the cell phone sent armies of sales personnel chasing the consumers. Overnight, the culture of bribes disappeared from the telephone industry; at least, at the consumer end. Pakistanis would love to see a similar change in the law and order business.

If a guy goes to a police station in Pakistan to report that his car had been stolen, he has to pay thousands of rupees as bribe to have his complaint registered in the precinct records. He is robbed twice, unless he has connections.

Newspapers report robberies committed by police officers. Legend goes that the top police officials auction off the precincts to subordinate officers. The highest bidder is appointed the station house officer as the auction proceeds precinct by precinct.

Gangs run gambling, narcotics, alcohol, prostitution and other illicit businesses and pay the police off to look the other way. The police make additional money by extorting side-walk vendors, transport operators or the law-abiding motorists.

Then, there are the walk-ins seeking justice. They come in to report they had been robbed at gunpoint out on the street or at home, of their wallets, cell phones, motorcycles, automobiles or other possessions. At the precinct, everybody has to pay to have a report registered. That is good, sound, multi-billion-rupee business.

This huge revenue would be the greatest incentive for the private sector to jump into the arena of law-enforcement. Privately-owned companies can set up offices right next to the police stations and start registering First Investigation Reports (F.I.R.) for a fee. Competition between these companies would guarantee fair prices for this service.

Armed with proper government licenses, permits and authority and escorted by lawyers, these private companies can take these reports to the police precinct and have them entered into the government records.

The extortionist police officers at the precinct would lose their leverage over the lone, helpless, scared and stressed out crime victim trying to file an F.I.R. He would never set foot in their den. The police officers would think twice before they mess with the representatives of a licensed, multi-billion-rupee law-enforcement company with its corporate offices adjacent to the interior ministry in Islamabad and at the four provincial capitals.

These private companies in Pakistan can bring some law and order back to the streets of rough neighborhoods by arrays of surveillance cameras and patrols paid for by the crime-weary residents and businesses.

Such companies can set up competent crime scene investigation units and modern forensic and DNA testing labs. Their possible clients would be the families of missing or kidnapped persons and the insurance companies trying to recover stolen property, like automobiles, insured by them.

Pakistan's political leaders are mostly feudal lords or tribal chiefs. It is almost a master-slave relationship between the elected politician and the common man. A government job in Pakistan is a license to steal and extort. It is a parasite-host relationship between a government official and the common man.

However, the relationship between the industrial-business class and the common man in Pakistan is essentially a retailer-consumer one; in essence, an interactive business relationship. It is not an oppressively lopsided master-slave or parasite-host relationship. That is a great qualitative difference, a beacon of hope and solid ground to start working together for a change in the country to bring back the rule of law for mutual benefit.

Another common factor between the industrial-business class and the common man is the fear of being kidnapped for ransom. As the poor common man walks down the street looking over his shoulder, the poor rich man is firmly denied the simple pleasure of a stroll around his own mansion. The rich generate more ransom revenue, run more risk of being kidnapped and live in more fear. They, too, would like to leave their palaces by themselves any hour of day or night without any armed escort and just walk up to the roadside restaurant next block for an ice-cream or, a cup of tea, the way they did back in the 1970s.

True administration of justice, the firmest pillar of good government, is a related issue. Pakistani courts are overwhelmed with a backlog of unresolved cases. There are instances where the complainant and the respondent both have long been dead, killing the case itself. The courts do not know this because they do not have the resources to sift through their backlog for dead cases. There are cases where two parties are just looking for mediation, a fair adjudication, a lawful compromise. Buried in the backlog, the courts are unable to provide even this simple judicial service.

However, government-licensed private courts can provide these simple but essential judicial services swiftly. It would drastically reduce the backlog at the state courts. With their performance and quality of adjudication, these private courts may prompt the state courts to improve their own image.

Over decades, private companies moved into education, water supply and health care as the state failed to perform in these sectors. Now is the time for Pakistani tycoons to move into the business of maintaining law and order and administration of justice.

Free enterprise and competition compel the cell phone companies in Pakistan to offer the best price and the best service to their poorest consumers.

The market forces would compel the private sector to guarantee true administration of justice in Pakistan.

Related Links:

Crises Worsen Class Divide in Pakistan

Are India and Pakistan Failed States?

Eleven Days in Karachi

Armed and Dangerous: Private Police on the March

Pakistan Telecom Boom

US-induced Privatization of Security in Pakistan

Jinnah's Pakistan Booms Amidst Doom and Gloom

Incompetence Worse Than Corruption

Creative Financing of Pakistan's Energy Projects

Pakistan's Energy Crisis

Light Candles, Do Not Curse Darkness

Taliban Exploiting Class Rifts in Pakistan

Water Scarcity in Pakistan

Salman Ahmed Rocks Silicon Valley

Life Goes On in Pakistan

Pakistan's Higher Education Reform


Riaz Haq said...

Here is a BBC report on kidnap-for-ransom criminal business in Pakistan, highlighted by the kidnapping of a British Pakistani child in Jhelum:

The kidnapping of young Briton Sahil Saeed has focused the international spotlight on one of Pakistan's more murky secrets.

Kidnapping for ransom is one of the most profitable and widespread criminal enterprises in the country. But it is one that has, until now, been fairly well hidden.

Five-year-old Sahil was kidnapped after armed men broke into his family home in the town of Jhelum in central Punjab province.

Since then, amid huge media attention, the police have been making an all-out effort to recover him.

Those efforts at the moment appear to have reached an impasse.


"The main thing to do at the moment is not to lose hope," says Jameel Yusuf, one of Pakistan's top anti-kidnapping experts.

Mr Yusuf is the former head of the Citizen Police Liaison Committee (CPLC), a unique joint venture between officers and citizens in Pakistan's largest city of Karachi.

The committee was formed in 1990 to tackle abductions in collaboration with government security agencies.

While the CPLC has broadened its functions, kidnapping for ransom has remained its forte.

Mr Yusuf has been involved in the investigation of more than 400 cases, most of which have been solved.

He was instrumental in the investigation into the kidnapping of US journalist Daniel Pearl, playing a key role in the arrest of the culprits.

Of the Sahil case, Mr Yusuf says: "Whoever made the decision to go public made a mistake.

"In a kidnapping for ransom, the best thing you can do is to keep the matter as quiet as possible.

"This goes doubly for a child, who is much more difficult to handle than an adult."

Mr Yusuf says it is clear from the facts that these are not professional kidnappers - the gangs who make abduction for ransom a regular trade in Pakistan.

It is a big business. In 2009, 480 people were officially recognised as having been kidnapped for ransom in Pakistan.

But the figure is misleading - as police try to separate kidnapping for ransom from simple kidnappings, which are related to what they term family incidents.

"The police often do this to lower crime statistics", says Mr Yusuf.

"A person is listed as having been 'kidnapped' if a family member, or a close friend or associate, is involved.

"The police only register the case as being 'kidnapping for ransom' if a known gang of professional kidnappers is involved."

Such gangs abound in Pakistan.

They are especially active in the industrial regions of the Punjab and in Karachi.

The targets are mostly rich businessmen and entrepreneurs or their family members.

The gangs often have a threefold set-up.

One team stakes out and kidnaps the target and then hands the victim to a middleman.

The middleman then transfers the person to a third party, who keeps the victim until a successful bargain is made.

This is usually in an area such as Pakistan's tribal region, where police have no control.

Death penalty

While such organised gangs play a large role in Pakistan's kidnapping industry, they are not the only ones involved.

Many smaller gangs or petty criminals are also active, especially in small rural communities or within the baradari (trade-based community) network of the Punjab.

The victims are usually known, or even related, to the culprits.

Mr Yusuf says "kidnapping" carries a penalty of up to life in jail, whereas "kidnapping for ransom" can carry the death penalty, which is often enforced.

If the cases of "kidnapping for ransom" in 2009 were below 500 in all of Pakistan, "kidnap" cases in Punjab alone were more than 11,000 in the same year.

Riaz Haq said...

Here's recent piece in the Guardian from its departing Indian correspondent Randeep Ramesh after six years in India:

In my six years there, it was hard not to be infected by the hubris of India – a nation that feels part of history, an essential actor on the global stage. Yet even as I admired a country that had thrived as a democracy despite unbounded poverty, mass illiteracy and entrenched social divides, experiencing India as a reporter was a string of enervating and dispiriting episodes.

Whether I was visiting a rural police station where half-naked men were hung from the ceiling during an interrogation, or talking to the parents of a baby bulldozed to death in a slum clearance, the romance of India's idealism was undone by its awful daily reality. The venality, mediocrity and indiscipline of its ruling class would be comical but for the fact that politicians appeared incapable of doing anything for the 836 million people who live on 25p a day.

The selling of public office for private gain was so bad that the only way to make poverty history in India would be to make every person a politician. Last year the wealth of local representatives in the northern state of Haryana rose at an astonishing rate of £10,000 a month. Their constituents were lucky if their income increased by a few pounds.

Riaz Haq said...

Here's News story on gated communities in Karachi:

KARACHI: Nestled between Safari Park and apartment complexes that define Gulistan-e-Jauhar; lies the KDA Overseas Housing Society. Getting inside the securely guarded compound means offers a glimpse into a lifestyle very different from the crime infested areas that surround the society.

Children are seen riding merrily on their bikes with no adult supervision, while families and individuals can enjoy a peaceful evening along tree covered lanes.

It’s a scene that is at odds with what goes on outside. In general, Jauhar – as it’s called – remains crime ridden and violence prone. Most residents wouldn’t dream of a walk on their own, let alone with families. Increasingly, those who can afford it are moving to safer locales – the overseas society amongst them.

It’s a trend that’s increasing across the city. Gated communities in Karachi have increased by at least 20 percent due to the volatile law and order situation.

The rising threats of kidnapping for ransom and extortion are also major reasons that citizens prefer to live in barred streets.

However, as supply remains limited, gated communities tend to be expensive. Aqeel Karim Dhedi, Chairman of AKD Group, said peole prefer Clifton and Defence due to stability in rental and sale prices.

Dhedi said gated communities have better security arrangements. No outsiders are allowed to enter without reference from residents. This enables residents to enjoy a peaceful environment with their families. Children can move around without any fear. He added that new gated communities are offering a variety of facilities including sports complex, parks, health club, and play grounds, super markets, mosques, schools, shopping arcades, health centers and much more.

Besides the luxuries, another reason to move into a gated community is that it reduces the maintenance cost for security, sanitation, and other general utilities as a fixed monthly charge. The same is much higher in case of a normal residence. For example the maintenance cost in Creek Vista apartment is Rs.10,500 with additional charges for generator and water.

But it’s the new upcoming projects - apartments and houses that redefine the elite urban living experience- that are gated communities in the real sense. Apartment complexes include high speed and personal elevators, servant quarters and backup power. All things required for everyday existence will be available within their barriers.

Mohammad Shafi Jakvani CEO CITI Associates deals with properties in Defence, Clifton, and Shara-e Faysal. He said that the demand for gated community has made their prices appear to be on fire.

This demand that has led to the development of schemes such as LuckyOne at Rahid Minhas Road, BT Icon in Clifton, Com3 Clifton and AKD’s ARKADIAN in Defence Phase VIII. A joint venture between DHA and AKD group, it’s expected to be launched just after Eid. The prices are expected to be in the range of Rs.40million to Rs.50 million, Mohammad Shafi Jakvani said.

Com3’s prices are in the range of Rs.20million to 40 million depending upon the size and location of the property. Three to four bed rooms apartments and duplex houses (two floor apartments) are being offered on 40 months installments, a Com3 Official told the News.

LuckyOne is the first project to offer high end residences for the upper middle income group in the down town area. There will eight towers 1232 apartments of three and four bedrooms, with all facilities available in any of the upcoming gated communities. The most important thing is that the project will generate power itself to avoid load shedding, said Nasir Aziz, technical director at Luckyone .