Urge to purge
Are tax evaders and loan defaulters ‘good’ 
Muslims even if they possess ‘adequate’ 
knowledge of Islamic teachings?
By Huzaima Bukhari & Dr. Ikramul Haq

On Aril 4, 2013, the Lahore High Court stopped Deputy Governor of the State Bank of Pakistan from working, but withdrew the order on April 9, 2013 after no objection from the Election Commission of Pakistan (ECP). The court passed the orders on a petition seeking directions for fair elections and implementation of Article 62 and 63 of the Constitution.

The court observed that appointments made by the formal federal and provincial governments, despite ban by the ECP, amounted to pre-poll rigging. The petitioner’s counsel also contended that the Federal Board of Revenue (FBR) had not issued details of income tax returns/defaulters and therefore objections could not be filed on nomination papers. The court directed that “all these details should be available at the ECP’s website”. The order of the court has since been complied with by the ECP.

We have been writing since long in these columns that the FBR should publish annual directory of taxpayers and post on its website the names of tax evaders and defaulters so that tax culture can be made to flourish, but till today the apex revenue authority has remained silent on this front. As a consequence, in the election days there is no information available to the public to adjudge who defaulted on their tax obligation.

On the contrary, there has been more emphasis on finding who fulfills the conditions of Article 62(d) and (e) that are purely subjective, lacking any clear-cut criterion — nobody can define what “adequate” knowledge of Islam is! Are tax evaders and loan defaulters ‘good’ Muslims even if they possess ‘adequate’ knowledge of “Islamic teachings” and “practicing obligatory duties prescribed by Islam”? Even if they remain good Muslims after not fulfilling tax and contractual obligations, they are certainly hit by Article 62(f) which says that no person can qualify as candidate unless “he is sagacious, righteous and non-profligate, honest and ameen....”

On completion of scrutiny of papers on April 7, 2013, it was found that 90 per cent successful candidates were those who paid no or nominal tax and many of them even did not obtain National Tax Numbers (NTNs). The notable case is that of Pervez Musharraf who showed assets worth over 600 million without disclosing their source vis-à-vis payment of tax. The same is true for many ex-legislators who are contesting again but never filed tax returns. This confirms that payment of taxes is not a stigma in our polity. In this context, it is understandable why the FBR remains a toothless organization — it suits all. Non-availability of tax record on websites of the ECP or the FBR during the scrutiny period facilitated tax evaders and defaulters to escape purge by the returning officers.

The Lahore High Court in W.P. No.7651/2013 posed a pertinent question to the counsel of the ECP: Whether returning officers were provided record for scrutiny of nomination papers: if a candidate did not provide details of NTN and tax returns then how his assets could be verified? The court observed that apparently the ECP did not seek help from other institutions including the FBR. On another petition seeking action against former parliamentarians who were tax and loan defaulters, the court ordered the ECP to submit notifications issued to the FBR, National Accountability Bureau (NAB), Security & Exchange Commission of Pakistan (ECP) and others for details of defaulters. The ECP later provided this—see http://ecp.gov.pk/SResponses.aspx.

The FBR Chairman was restrained from performing duties by Islamabad High Court on April 8, 2013 through an interim order. He took no action against 70 per cent ex-legislators who did not bother to file tax returns, wealth statements and details of personal expenses, violating express provisions of Income Tax Ordinance, 2001[Tax cheats in the House, The News, December 16, 2012]. They pleaded that their only source was ‘salary’ and since tax was deducted at source they were not defaulters. If their only source of income was ‘salary and allowances’ how had they been enjoying a life of luxury — sprawling bungalows, army of servants, expensive vehicles and foreign trips? This question remains unanswered. On this point alone, a vast majority of former parliamentarians can be disqualified.

The appointment of Ali Arshad Hakeem as FBR Chairman on 11 July 2012 directly under the command of President Asif Ali Zardari was definitely meant to play “due role” in the forthcoming elections which he proved by resisting any action against the defaulting parliamentarians representing all political parties and not publishing data of tax defaulters despite instructions of the Federal Tax Ombudsman (FTO). The rich and mighty players in politics were thus saved from being purged. However, the order of Islamabad High Court declaring his appointment unlawful could change this scenario.

Political elites have been salvaged from disqualification for not paying taxes but the country has suffered immensely. Pakistan is facing the worst fiscal crisis of its history. On assumption of charge, the suspended Chairman made the tall claim of surpassing revenue target of Rs2381 billion by “using extraordinary managerial skills, innovative IT tools and meaningful amnesty schemes.” However, a few weeks before the exit of the government, the revenue target was reduced to Rs2190 billion. According to experts, even this substantially reduced target is not expected to be met — the estimated shortfall of Rs400-500 billion would certainly cripple the new government financially, starting its tenure just one month before the end of the financial year 2012-13 with a colossal fiscal deficit [more than 8 per cent of GDP] and an almost collapsed economy with debt-to-GDP ratio going as high as 65 per cent and inflation over 10-12 per cent.

During the first eight months of the current fiscal year, the FBR collected only Rs1107 billion and then in March 2013 it resorted to all kinds of ugly methods — blocking of refunds, creating fictitious demands and taking huge amounts from the banks as advance (sic) even when billions are still payable to them as refund — to show extraordinary (sic) results. The claim of “historic achievement” in March 2013 by collecting about Rs185 billion, as compared to Rs149.6 billion during the same period as last year, reflecting a growth of 22 per cent, is just a farce — the reality is that in this period quarterly advance tax becomes due and secondly, the FBR has borrowed funds from many large taxpayers even when refunds are due!

The Chief Election Commissioner and caretaker prime minister have not taken any notice of these malpractices and the role played by the FBR in providing protection to tax defaulters. Had the parliamentarians and other rich people paid due taxes, Pakistan could have been saved from unsustainable debt burden, now 65 per cent of GDP, and fiscal deficit nearing the dangerous level of 10 per cent of GDP this year.

Since the Chairman was a “political appointee”, acceptable to all, the opposition also did not raise any objection about the FBR’s failure in ensuring purge of tax defaulters from electioneering.

Earlier, the Islamabad High Court on April 3, 2013 restrained Member Administration of the FBR from performing his duties — he was brought by suspended Chairman as his close confidant. The petitioner has contended that the Chairman does not possess requisite qualification and experience for the post. He is a former civil servant — selected in Accounts Group in 15th Common Training Programme (CTP) and re-appeared to get Customs Group with 17th CTP. He resigned from the FBR after a few years allegedly in the wake of disciplinary proceedings. It is claimed in the petition that the outcome of inquiry against him was never known and that “his company was doing business with the FBR” — the appointment thus involves conflict of interests.

During election year, political appointees can play havoc with the election process. Fortunately higher courts are vigilant now as evident from the decisions cited above. It is worth mentioning that though the Lahore High Court took notice of non-disclosure of names of the tax defaulters, the majority was cleared by the returning officers. Now data is available at the ECP’s website of tax payments and loan defaults. But the question is: Are our voters aware of this and can vast majority of them read it in English or have capacity and inclination to exercise their right diligently by rejecting tax and loan defaulters?

The process of constitutional purge depends not only on availability of reliable information but also prompt and effective mechanism of across the board accountability without any favour or fear, which is presently missing in Pakistan.

The writers are members of Visiting Faculty of Lahore University of Management Sciences (LUMS).

Education for every girl
Like other parties, the Jamaat-e-Islami also places
 emphasis on education for all to woo voters
By Javed Aziz Khan

Almost all the political parties have announced their election manifestos with claims to bring revolutionary reforms into the system and make Pakistan a model state. The season of claims and promises is on and political parties are trying something new to attract more voters and get their sympathies for election candidates.

Most of the political parties are claiming to give top priority to education once they come into power in the country. There are claims of establishing more universities, upgrading the already existing institutions with providing them all the basic facilities and setting up more primary schools to improve the literacy rate.

The Jamaat-e-Islami (JI) has also announced its election manifesto recently with more emphasis on educating every child with quality education for free.

“Our slogan is Ilaj, taleem, rozgar har fard kay leye….Saaf pani, bijli aur gas har ghar kay leye (health, education and job for every individual and clean water, electricity and gas for every house),” says deputy chief of the Jamaat-e-Islami Pakistan, Sirajul Haq.

Siraj, who has served as senior minister in Khyber Pakhtunkhwa during the Muttahida Majlis-e-Amal government, is of the opinion that this is the responsibility of the state to provide free quality education to its people.

The JI is more focused on education for girls and want to launch educational emergency in the country for this purpose. “We want to launch educational emergency in the country so that every girl gets education because an educated female can prepare a better nation,” says Sirajul Haq, who headed Islami Jamiat Talaba, a student wing of the JI, for years. He stresses for arrangements so that every girl can get higher and professional education without any harm to culture as well as local and Islamic values.

The Jamaat-e-Islami wants a law that could penalise parents for not sending their children to schools. “We want the private educational institutions should work in partnership with the government. Private schools, colleges and universities should not be an industry but it should be part of the mission to educate the Pakistani nation,” says Sirajul Haq.

The JI was part of the Muttahida Majlis-e-Amal, a six-party alliance of the religious groups that ruled the Khyber Pakhtunkhwa province between 2002 and 2007. The MMA was part of the opposition in the center during the five years. In 2008 general elections, the component parties of the MMA parted ways. The Jamiat Ulema-e-Islam-Fazl, the largest party in the MMA, and other parties contested the polls while the JI boycotted the last general elections.

The Jamaat is contesting the coming general elections without forming any alliance with religio-political groups. It has, however, started negotiations with various political groups for seat adjustment in Punjab, Khyber Pakhtunkhwa and other parts of the country.

Besides improving the education standards, the JI manifesto has a number of targets to achieve after winning the general elections. “We want to make Pakistan an Islamic welfare state. Our model is the Islamic state established in Madina where people will rule the country and there will be no difference between a common man and a ruler,” says Sirajul Haq.

In the sector of education, the party wants changes in the syllabus as its leadership believes that every year changes are made in the curriculum on foreign pressure. He believes that primary education would improve if the nation starts giving respect to teachers.

“We will develop a system under which a student will be required to choose his profession after 12th grade. After intermediate level, every student will be given education in a specialised field so we can produce more specialists in every field,” says the JI deputy central chief.

As a religio-political party, the JI wants to bring reforms in the seminary system too. “We want to develop a system in seminaries where a student graduating from these institutions would have adequate knowledge of literature, science, computer and other required fields. We also want to introduce one system for all the religious schools in the country so that no one could trigger any sectarian issue,” says Sirajul Haq. He says there are five different boards of the religious schools all over the country which have thousands of schools affiliated with them. “We will bring reforms and introduce one standard course for these schools after consulting heads and senior members of all the five boards. This will help end sectarian differences.”

Some JI leaders are running modern seminaries while others are supervising few chains of regular schools with a touch of religious education all over the country. The party is having a student wing which is organised in most of the universities and colleges of the country. The student wing arranges educational related activities on regular basis.

The JI has floated a novel idea of planting one tree by every student. “A student will be asked to plant a tree and take care of it. This way, we will have millions of trees planted every year to help us improve the environment,” Siraj suggests.

“Our government in the Khyber Pakhtunkhwa had established a female university and a medical college so that female students could get higher and professional education without any difficulty. We also established 61 new colleges and recruited 46,000 teachers on merit. There was no college in Kohistan and other remote areas, but we established colleges and schools there. If we come into power, we will establish a separate university, medical college and engineering college in Fata,” says the JI deputy amir.

“We will increase the budget for education from 2 per cent to 11 per cent so we are not left behind India and Bangladesh,” says Sirajul Haq.

The writer is senior reporter of The News at Peshawar and can be contacted atjavedaziz1@gmail.com and followed on twitter @JavedAzizKhan

Rise of the South
As developed economies stopped growing during the 2008-2009 financial crisis, developing economies kept growing transforming the global power balance
By Irfan Mufti

Financial crisis now spans more than half a decade and has caused enough damage to western economies. Though some balancing acts occurred due to policies of governments and European economic blocks, the crisis is far from over.

It is also a fact that when developed economies stopped growing during the 2008-2009 financial crisis and developing economies kept on growing, the world took notice. The rise of the South, seen within the developing world as an overdue global rebalancing, has been much commented on since. This discussion has typically focused narrowly on GDP and trade growth in a few large countries. Yet there are broader dynamics at play, involving many more countries and deeper trends, with potentially far-reaching implications for people’s lives, for social equity and for democratic governance at the local and global levels.

The rise of the South is the result of continual human development investments and an opportunity for still greater human progress for the world as a whole. Making that progress a reality will require informed and enlightened global and national policymaking, drawing on the policy lessons. Massive poverty reduction, middle-class expansion form major development gains in Africa, Asia and Latin America.

The rise of the South is radically reshaping the world of the 21st century, with developing nations driving economic growth, lifting hundreds of millions of people from poverty, and propelling billions more into a new global middle class, says the United Nations Development Programme’s (UNDP) 2013 Human Development Report. “The rise of the South is unprecedented in its speed and scale,” the 2013 report says. “Never in history have the living conditions and prospects of so many people changed so dramatically and so fast.”

“This phenomenon goes well beyond the so-called BRICs, middle income countries often represented by Brazil, Russia, India and China,” the 2013 report stresses. The report analyses more than 40 developing countries that have made rapid human development gains in recent years through sustained investment in education, health and other social services, and strategic engagement with the world economy.

The report looks at the evolving geopolitics of our times, examining emerging issues and trends and also the new actors which are shaping the development landscape. It argues that the striking transformation of a large number of developing countries into dynamic major economies with growing political influence is having a significant impact on human development progress.

The report notes that, over the last decade, all countries accelerated their achievements in the education, health, and income dimensions as measured in the Human Development Index (HDI) — to the extent that no country for which data was available had a lower HDI value in 2012 than in 2000. As faster progress was recorded in lower HDI countries during this period, there was notable convergence in HDI values globally, although progress was uneven within and between regions.

Looking specifically at countries which lifted their HDI value substantially between 1990 and 2012 on both the income and non-income dimensions of human development, the report examines the strategies which enabled them to perform well. In this respect, the 2013 report makes a significant contribution to development thinking by describing specific drivers of development transformation and by suggesting future policy priorities that could help sustain such momentum.

By 2020, according to projections developed, the combined economic output of three leading developing countries alone — Brazil, China and India — will surpass the aggregate production of Canada, France, Germany, Italy, the United Kingdom and the United States. Much of this expansion is being driven by new trade and technology partnerships within the South itself.

A key message contained in this and previous reports, however, is that economic growth alone does not automatically translate into human development progress. Pro-poor policies and significant investments in people’s capabilities — through a focus on education, nutrition and health, and employment skills — can expand access to decent work and provide for sustained progress.

The report identifies four specific areas of focus for sustaining development momentum: enhancing equity, including on the gender dimension; enabling greater voice and participation of citizens, including youth; confronting environmental pressures; and managing demographic change.

The report also suggests that as global development challenges become more complex and trans-boundary in nature, coordinated action on the most pressing challenges of our era, whether they be poverty eradication, climate change, or peace and security, is essential.

As countries are increasingly interconnected through trade, migration, and information and communications technologies, it is no surprise that policy decisions in one place have substantial impacts elsewhere. The crises of recent years — food, financial, climate — which have blighted the lives of so many point to this, and to the importance of working to reduce people’s vulnerability to shocks and disasters.

To harness the wealth of knowledge, expertise, and development thinking in the South, the report calls for new institutions which can facilitate regional integration and South–South cooperation. Emerging powers in the developing world are already sources of innovative social and economic policies and are major trade, investment, and increasingly development cooperation partners for other developing countries.

Many other countries across the South have seen rapid development, and their experiences and South–South cooperation are equally an inspiration to development policy. There is a need for critical look at global governance institutions and outdated structures, which do not reflect the new economic and geopolitical reality. It also calls for greater transparency and accountability, and highlights the role of global civil society in advocating for this and for greater decision-making power for those most directly affected by global challenges, who are often the poorest and most vulnerable people in our world.

Certainly, the report refreshes our understanding of the current state of global development, and demonstrates how much can be learned from the experiences of fast development progress in so many countries in the South.

Mexico City, Norway, Australia and the United States lead the rankings of 187 countries and territories in the latest Human Development Index (HDI), while conflict-torn Democratic Republic of the Congo and drought-stricken Niger have the lowest scores in the HDI’s measurement of national achievement in health, education and income.

Yet Niger and the Democratic Republic of the Congo, despite their continuing development challenges, are among the countries that made the greatest strides in HDI improvement since 2000.

Over the past decades, countries across the world have been converging towards higher levels of human development. All groups and regions have seen notable improvement in all HDI components, with faster progress in low and medium HDI countries. On this basis, the world is becoming less unequal.

Fourteen countries recorded impressive HDI gains of more than 2 per cent annually since 2000 — in order of improvement, they are: Afghanistan, Sierra Leone, Ethiopia, Rwanda, Angola, Timor-Leste, Myanmar, Tanzania, Liberia, Burundi, Mali, Mozambique, Democratic Republic of the Congo, and Niger. Most are low-HDI African countries, with many emerging from long periods of armed conflicts. Yet all have made significant recent progress in school attendance, life expectancy and per capita income growth, the data shows.

In South Asian region, the average value remains at 0.558 which is the second lowest in the world. Between 2000 and 2012, the region registered annual growth of 1.43 per cent in HDI value, which is the highest of the regions. Afghanistan achieved the fastest growth (3.9 per cent), followed by Pakistan (1.7 per cent) and India (1.5 per cent). In a sharp contrast sub-Saharan Africa achieves an average HDI value of 0.475, the lowest of any region, but the pace of improvement is rising. Between 2000 and 2012, the region registered average annual growth of 1.34 per cent in HDI value, placing it second only to South Asia, with Sierra Leone (3.4 per cent) and Ethiopia (3.1 per cent) achieving the fastest HDI growth.

With these averages, Pakistan is ranked lower than several African states and most interestingly has ranked lower then its most impoverished regional neighbour Afghanistan. This shows sorry state of affairs within the country and painful and criminal negligence of the ruling class to the human development needs. The report is an eye-opener for the policy makers of this country and poses challenges for the future governments.

The writer is Deputy Chief of South Asia Partnership Pakistan and Global

Campaigner. irfanmufti@gmail.com

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