It is now over two months since the proclamation of martial law by former President Mirza on October 7, and seven weeks have elapsed since the second phase of the peaceful revolution occurred on October 27 with the resignation of Mirza and the assumption of office as President by General Mohammad Ayub Khan. In the interval, and particularly since October 27, the new administration has been vigorously tackling some of the country's basic problems. At this stage, it may be worthwhile to review broadly the form and direction the new régime's efforts are taking.

2. The military, never at any time dominant in running the country's affairs, have been largely withdrawn from civilian duties and have returned to their normal occupations. The military courts set up to enforce the martial law regulations during the early days of the régime have been abolished over large sections of the country, although still retained in a few trouble spots like the East Pakistan border areas to deal with smugglers. The martial law regulations still continue but over most of the country are now enforced by the ordinary civil courts. Senior army officers still function as martial law administrators with the primary task of enforcing the martial law regulations, but with the exception of East Pakistan, their role is less prominent and the handling of day to day affairs rests almost entirely with civilian officials. In the final analysis, authority rests with those administering martial law backed by the army which can always be called in again if the need should arise, but there is little evidence of interference by the military in ordinary day to day administration. For the most part, the military have concentrated on reinforcing the police in the suppression of smuggling, black marketing and hoarding, in the investigation of alleged profiteering, and in the enforcement of order and discipline among the populace. A number of improvements are already evident; rubbish and filth has disappeared from the streets in urban centres; stalls and booths no longer clutter the public sidewalks; people are queuing in a more or less orderly fashion for buses, ration shops and theaters and are standing at attention during the playing of the national anthem; beggars and panhandlers have largely disappeared from the cities; and both motor and pedestrian traffic proceeds in a more orderly manner although the standard still leaves a good deal to be desired.

3. On the constitutional side, there are a few indications of a gradual movement towards a more centralized unitary form of government. President Ayub now functions as Head of State and chief executive and normally presides over the 12-man Presidential Cabinet. From this body, decisions on policy matters flow to the central ministries and to the Provincial authorities, occasionally in the form of Presidential directives to the Governors of East and West Pakistan, or more normally direct to the appropriate government departments through the responsible Minister. Some thought has been given to a redistribution of functions between the centre and the provinces in order to streamline and simplify administration and to eliminate duplication and overlapping, but so far few substantive changes have been made. However, a high level Administrative Reorganization Committee has been set up to review and to recommend improvements in the organizational structure, functions and procedures of government departments and agencies, to review the staff position, and to recommend measures for close liaison between the central and provincial administrations.

4. During a visit to East Pakistan early in November, President Ayub emphasized in public statements the importance of developing a feeling of national consciousness and cohesion within the country. While there was no harm in developing local culture and language, the President stressed the importance of preserving national unity, and doing nothing to damage the nation's security. Hetook pains to explain that his régime represented no threat of domination by the west wing or the centre. This theme of a united Pakistan was repeated in a slightly different context by Finance Minister Shoaib who at a press conference in Dacca on December 8 firmly rejected the theory that each wing had its own economy which should be developed separately in its own way. Mr.Shoaib emphasized the importance of considering the economy and resources of the country as a whole and went on to state bluntly that Pakistan is going to be a one economy state under the new régime.

5. Recently the government has announced a review of import licensing procedures in order to effect more direct control by the centre and to bring import policy into line with the desperate foreign exchange position. Henceforth, there will be reduced emphasis on the regional allocation of import licences. Again, in line with its policy to assert central control over all matters relating to national development, the centre has taken over from the West Pakistan government the Mineral Development Corporation, a quasi-government body responsible for the planning, surveying, prospecting and industrial exploitation of minerals.

6. The Presidential Cabinet is comprised of men of good character and honest purpose who are clearly putting national interest above self-interest. All of them are spending long hours at their desks when in Karachi and are also travelling extensively throughout the country to acquire a first hand knowledge of the problems with which they are faced. The fact that they have been given wide authority in their respective fields is evidenced by the numerous statements and comments they are making to the press which obviously could not have been cleared in advance by the President or by the Cabinet as a whole.

7. The most active Minister is Lt. Gen. Azam Khan, Minister for Rehabilitation who has attacked the refugee problem with energy and vigour. A forceful man of tremendous drive and outstanding determination, General Azam has succeeded in putting new life into the somewhat moribund refugee administration and bids fair to uphold his reputation as a man who will brook no obstacle in getting things done quickly. Already he has gone a good way in sorting out the tangled problem of evacuee property. Hehas launched the construction of a new satellite town in the Karachi area for 40,000 refugees and is actively planning a second to provide for 50,000. In several tours around the country, General Azam has attracted the headlines by statements that refugees are the number one problem which must be solved quickly and on humanitarian lines.

8. On the economic side, Mr.A.K. Khan at Industries, Works, Irrigation and Power, and Mr. Shoaib at Finance, have already shown their mettle. The former has been indefatigable in touring the country, particularly East Pakistan, and in helping to formulate economic policies. Mr. Shoaib got off to a late start when his departure from Washington where he was a senior executive of the I.B.R.D. was delayed by the death of his wife, but since his arrival has wasted no time in grappling with the problem of putting the country's finances on a sound footing. When I talked with him recently, he stressed the need to reduce expenditures to bare essentials as a first step in combating the serious inflation which threatens Pakistan. Foreign Minister Manzoor Qadir, a brilliant constitutional lawyer with an untarnished reputation, is shy but unquestionably able. Notably articulate, he has the skill to marshal his thoughts in a logical way and he presents his arguments with quiet persuasiveness. Mr.Qadir does not pretend to be an expert on foreign affairs; for the present he is spending a good deal of time working behind the scenes on proposals for a new constitution. Apart from his position as the second man in the Cabinet, and the top civilian, there is a good deal of evidence that President Ayub relies on him for advice on matters beyond the scope of his Foreign Affairs portfolio.

9. I have some reservations about a few of the other Ministers. The Minister for Commerce, for example, is only 30 and is without much practical experience in business affairs. Hecomes from a wealthy landed family in Upper Sind with a largely academic background in political science and constitutional law. Mr.Hafizir Rahman, Minister for Food and Agriculture, is an elderly retired civil servant who has yet to demonstrate the energy or capacity to handle the country's food problem on a realistic basis. Although technically well qualified by virtue of long service with the railways, the Minister for Communications, Mr.F.M. Khan, seems to have adopted a more casual approach to his job and is the only Minister who had close associations with ex-President Mirza. In the public mind, he may therefore be suspect as a hangover from the old régime. Not much has been heard of Mr.Mohammed Ibrahim, the Minister for Law and former Vice-Chancellor of Dacca University, who has so far shown little grasp of government problems and may have been included simply to fill up the quota from East Pakistan.

10. During its first six weeks in office the government has marked out a number of fields in which reforms or development are urgently needed. The rehabilitation of refugees is one of the tasks given top priority. Another is land reform. At an early stage ex-President Mirza appointed a Land Reforms Commission, to consider problems relating to the ownership and tenancy of agricultural land and to recommend measures for ensuring better production and social justice as well as security of tenure for those engaged in cultivation. Following the second stage of the revolution, one of President Ayub's first acts was to direct the Commission to propose a comprehensive scheme for effective land reforms as soon as possible. Subsequently, General Ayub has spoken of the need for sensible land reforms and a scientific solution to our land problem one that is just and fair, and does not lead to class war. Hehas on occasion described himself as the landlord's friend, has stressed the desirability of limits for the smallest as well as the largest holdings, and of the need for changes in the inheritance laws to prevent uneconomic fragmentation. Because of the power, position and privilege of the landowning class, which over much of West Pakistan still operates on quasi-feudal lines, a good deal of interest attaches to this subject and in many quarters it is regarded as the new régime's first big test. Certainly, if the problem is approached on the basis of widespread redistribution to tenant farmers with firm and low ceilings for large estates, the effect will be to bring about a social and political as well as an economic revolution with far-reaching consequences on the social structure of the western wing. The Commission, which has been meeting periodically in Karachi and Lahore, hopes to have its report ready for submission to the government before the end of the year.

11. In the economic sphere, it can be said that the new régime got off to a slow and somewhat uncertain start but is now showing signs of settling down for the long haul. The immediate effect of lower prices which followed the proclamation of martial law, and firm action against the profiteers, the smugglers and black market operators was a wave of panic buying which threatened for a time to drive some goods off the market entirely. In a number of centres, the authorities were forced to take urgent measures to restrain would-be purchasers and rough and ready rationing devices were enforced for certain types of goods. Within a matter of days a few shortages began to appear; although fruit and vegetables were now cheaper, the quality was poor and supplies were short; eggs, although available at a lower controlled price, were hard to get; and milk, no longer watered, was insufficient to go round. Recently there has been some improvement in the supply situation though occasional shortages still occur.

12. On the national scale, the régime has done a number of things in an attempt to persuade trade and industry to function in a normal healthy manner while at the same time keeping national interests above personal gain. Profiteering and black marketing have been defined by martial law regulation and a number of offenders have been tried before military courts and punished. Improper declaration of income has been made a martial law offense and firms as well as individuals have been given a deadline before which to make new and more honest declarations dating back to 1953-54, with the promise that action will not be taken against them. Firms and individuals have been directed to declare and turn over to the State Bank of Pakistan their holdings of foreign currency both at home and abroad. By far the most far-reaching measure has been a comprehensive set of price control regulations which aimed initially at limiting profit to a certain percentage of capital at each stage of manufacture and distribution. On the whole, the reaction of the business community was unfavourable; the scheme was rigid and inflexible and involved computations based on information not always available. While more or less satisfactory for firms with a large capital investment, it was considered unworkable for small businesses with limited capital, of which there are a great many in Pakistan. After representations from the business community, the government modified the price control regulations, limiting profit at each stage to a percentage of production costs. The new regulations are to come into force from the beginning of the new year and seem likely to prove more satisfactory.

13. There is little doubt that the new régime's initial impact on business was disquieting. In the early stages, traders found it difficult to know what government policy was since many regulations drafted in haste were ambiguous or obscure. This state of affairs, combined with sharp attacks on business ethics, produced a state of uneasiness and fear among the commercial community and resulted in loss of confidence and a good deal of confusion and stagnation. During the latter half of November, the Minister of Commerce found it necessary to tour commercial centres in West Pakistan to urge that normal trade be resumed, to explain the government's policy and to listen to representations. More recently, there has been some return of confidence as the government has shown its willingness to listen to the commercial community and to modify its policies in certain directions.

14. The controversy between the advocates of an active agricultural policy and those who favoured rapid large-scale industrialization has been resolved, for the time being, in favour of the former. In several pronouncements, the government has declared the production of more food a priority objective and has taken a number of steps in furtherance of this aim. In a recent statement, the energetic and able Minister for Industries made it clear that in the industrial field the emphasis in the immediate future would be placed on the development of medium, small-scale and cottage industries throughout the rural areas using local raw materials. Significantly, Mr.Ghulam Faruque, an ardent advocate of rapid large-scale industrialization and former head of the PIDC, has been transferred to Lahore where he will head the Water and Power Development Authority under the West Pakistan Government.

15. Other objectives announced during the early stages of the revolution have been dealt with by appointing commissions to study the subject and report back. For example, a Law Reforms Commission has been appointed to look into the administration of justice and to make recommendations for the speeding up of judicial procedures. Another commission with very broad terms of reference has just been established to study the type of education required in Pakistan and to formulate proposals for overhauling the educational system. New studies are under way by the Planning Commission to draw up an interim plan for achieving certain economic objectives, and the whole field of trade policy is under review by a top level interdepartmental committee under the direction of the Minister for Commerce.

16. Having so much to do at home, the new régime has shown relatively little interest in foreign affairs. The tone was set at General Ayub's first press conference as Chief Martial Law Administrator when, in reply to a question about possible changes in foreign policy, he countered somewhat tartly What's wrong with Pakistan's foreign policy?

17. Relations with India, however, are an integral part of Pakistan's life and are never long out of the headlines. Within days of taking office as President, General Ayub was proclaiming, We must have a satisfactory solution in Kashmir as it affects our security and our whole existence. Should we be forced to adopt extreme measures, even war, the responsibility will be that of India. On canal waters, he said Unless we get the water we used to get, our land will go barren and we will have no recourse but to take any measure open to us.

18. For more than five weeks, statements by Indian leaders at press conferences and in Parliament that democracy in Pakistan had been replaced by naked military dictatorship, that this state of affairs was incompatible with continued membership in the Commonwealth, as well as allegations of aggression in border incidents were ignored by government spokesmen. However, at Lahore on December 12, the President returned to the charge, accusing India of deliberately organizing a campaign of vilification in an attempt to render Pakistan friendless and defenceless. Hewarned that Pakistan knew to deal with border clashes and encroachments which were nuisances and the sooner stopped the better. Kashmir and Canal Waters are questions of life and death constituting a challenge to humanity and international morality. Pakistanis would never fail to accept this challenge boldly and courageously. President Ayub denied Indian allegations that Pakistan had been rendered bold by massive U.S. military aid, pointing out that Indian military strength was three times Pakistan's even after U.S. assistance. Heaccused India of harbouring aggressive designs against this country and engaging in an aggressive military build up at the expense of national development. Unfortunately, it cannot be said that Indo- Pakistan relations show promise of any improvement.

19. The only other discernible trend in foreign policy seems to be a possible shift towards closer relations with the U.A.R. and increased support for Arab causes. Early in November, without apparent cause, Foreign Minister Qadir warned Israel that any attempt to occupy the west bank of the Jordan would have grave repercussions throughout the Middle East; ten days later, the Pakistani representative at the U.N., in a particularly spirited plea, criticized Israeli proposals to compensate the Arab refugees and urged that Israel permit them to return to their homes instead. And in the debate on Algeria this year, Pakistan seems to have come out more strongly in favour of the nationalists than in former years.

20. The possible rapprochement with the U.A.R. stems from a visit to Cairo by the Minister for Education, Information and Broadcasting, Mr.Habibur Rahman, who stopped over on the way back from Brussels where he had gone to say his farewells as Pakistan's Ambassador to Belgium. The visit is described by Foreign Secretary Baig as unplanned but fortuitous. In Cairo Mr. Rahman had talks with the U.A.R. Ministers for Education and Culture and National Guidance, and had a 90-minute interview with Colonel Nasser whom he found extremely amicable and full of friendly sentiments towards Pakistan. In a broadcast over Cairo Radio, Mr.Rahman referred to the importance of clearing the political atmosphere on a number of problems and said that the hopes and aspirations of the Arabs are very close to our hearts; Pakistan has steadfastly supported and will always support their rightful cause. Subsequently, there have been rumours that the Egyptian Minister for Education might visit Pakistan to offer advice on educational problems here but nothing definite has emerged. However, at a press conference in Rawalpindi recently, President Ayub remarked that relations with the U.A.R. were now very good and added that President Nasser would be received with open arms if he wished to visit Pakistan.

21. By far the most outstanding achievement of the new régime is the extent to which President Ayub has succeeded in identifying himself and his government with the aspirations of the people. Travelling about the country, one senses a feeling of purpose, an air of confidence, a return almost to the patriotic fervour which gripped Pakistan in 1947 and 1948, and a conviction that having got rid of corrupting influences, the nation can now get down to work and show what it can accomplish. There is no doubt that the government, at the present time, enjoys widespread and genuine support and that most of the people are prepared to accept hard work and a good deal of austerity in the expectation of achieving a better future.

22. As was to be expected, the achievements on the practical side are not yet great. While starts have been made on reforms in several directions, most projects of this kind are still in the planning and study stage and some time must yet elapse before the results become apparent. In the meantime, the new feeling of confidence, of purpose, and of discipline which is taking hold offers hope that President Ayub may achieve some success in the tremendous task of reforming the character and way of life of a considerable proportion of the population.

H.O. MORAN