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War reminiscences trade By Afshan Ahmed Over the last few decades, business schools have went through a phase of mushroom growth in Pakistan. Almost all academic institutes have extended their curriculum to the field of business management and have opened enrollment for bachelors and masters of business administration. There can be many objectives of establishing a business school, teaching students from a well accredited published book of foreign authors who may be considered gurus in their respective fields, to absorb graduates in the job market with affluent employers, or to produce entrepreneurs for the MNCs or big national companies. Shifting focus of education to technical and vocational training in keeping with market demand is the need of the hour By Alauddin Masood There is always room at the top, says a popular maxim. But, this position often remains vacant as if waiting for the right man -- an appropriately educated and skilled professional, possessing the capability to communicate with others, lead workers, and motivate them to give their best. Those who strive and struggle for achieving excellence, finally, they succeed and make it to the top. But, in practical life, we see a majority of people grumbling and complaining that they have not been able to succeed in their careers or could not be hired for a particular position because they did not have the right connections or appropriate recommendations. These grumbling souls forget that many hundred thousands of successful people who made it to the top belonged to the middle class or average families, who did not possess any social props considered necessary for success in life.
Freedom versus responsibility Electronic and print media have to work quickly towards a regulatory framework By Raza Rumi Much has been said about media accountability and the
dire need of a regulation framework for Pakistan's new power centre.
Pakistani media has earned its freedom and independence after a long,
often bloody, struggle against military dictators and civilian autocrats.
Countless journalists were imprisoned, harassed, even killed in this
decade's long fight for free speech, otherwise a much-touted fundamental
right in every Pakistani constitution. There is no question that a viable
democracy and a culture of accountability cannot exist without a robust
and independent media. Globalisation and the rise of electronic media in Pakistan, ironically under General Musharraf, is a relatively new phenomenon and has changed the contours of power matrix in Pakistan. If anything, electronic media and its older cousin, the print media, with a plethora of columnists, are now an established group with considerable influence and nuisance value. Actualisation of the newly acquired powers was best demonstrated during the anti-Musharraf movement from 2007-2008. This was a startling development and pleased most Pakistanis as they found the echo of their daily trials and tribulations in the direct and frank reporting by the numerous TV channels. Ambiguous regulatory framework The sudden liberalisation of private television channels took place in an environment when a regulatory framework had barely been established. The Pakistani Electronic Media Regulatory Authority (PEMRA) came into existence during an unrepresented regime and, therefore, it lacked the essential process of consultation, ownership, and national consensus. On the one hand, media oligarchies emerged despite the vague announcements that cross ownership would not be permitted. On the other hand, electronic media showed little interest in developing a common code of conduct and finding ways of self-regulation. The results and the initial phase were disasters. Human limbs and heads found ample air time thereby glorifying terrorism and violence, and impacting the collective psychology of the viewers through a gradual process of desensitisation. Furthermore, objectivity was thrown out of the window and partisan, one sided rants became the order of the day. Lawyers and media alliance This was a type of intense civil activism and unprecedented representation of the Pakistani middle class in mainstream politics. Seemingly, a momentous development, the foresighted mobilization, came into public domain regurgitating the 'anti-politics' biases of Pakistan's conservative middle class. This automatically resulted in severe distortions of the political expression. The first rule of law was personified by a handful of judges who had been linked to Pakistan's regressive establishment throughout their careers; and a misconception that rule of law would lead to political, economic, and social transformation became a 'truth'. Minority voices such as this scribe, alerted to the inherent contradictions of these developments. In short, intra-bourgeoisie struggles could be disruptive but rarely led to transformative social change. The results today are clear. The lawyers are beating up every public official and media representative who attempts to question their activities. After heroic battles the conduct of judges has been called into question. Holy-cow syndrome Pakistan's security establishment returned as the holy cow. Anyone who ventured to challenge the predominance of the national security apparatus was immediately branded as unpatriotic and a new divine to rule was crafted by the nefarious Generals: Musa, Ayub, Yahya, Zia and later Musharraf. These 'saviours' took the reins of power with identical intentions and left the country in a huge mess. General Ziaul Haq, during his eleven-year rule (1977-88) tops the list of willful destroyers of Pakistani society. Ironically, the holy cow status of Pakistan army was shaken under General Musharraf and the street agitation of 2007 in which Pakistan army was challenged in its recruitment grounds i.e, the Punjab. This was the turning point of our history. However, due to the uncertain commitment to democracy by Pakistan's chattering classes and the upwardly mobile segments this grand moment of political course correction was squandered by the emergence of two other holy cows: the Judiciary and the media. Purist discourse Such has been the trajectory of the national affairs that any objective or independent comment on the two new holy cows is instantaneously construed as an attack on these arguably vital institutions of polity. For instance, judges are very much part of the Pakistani mainstream. Therefore, their decisions in a free society are open to academic and reasoned comment. However, we have witnessed the unfortunate trend of complete deification of the superior court judges by media activists. Similarly, any informed or well-meaning comment on media transgressions has been greeted by the same fate. More of the same Thus far, the two established trends in Pakistan, anti-politician rhetoric and glorification of religion continue to remain in the ascendant in public discourse. Until the Pakistan army decided to fight the Taliban in the North West and the FATA, the media on balance glorified the so called resistance of warriors to the infidel Western imperialism. This came as a major blow to the moderate politics espoused by Pakistan People's Party and Pakistan Muslim League (Nawaz). Concurrently, the vilification of the politicians from 2008 to the present is a major pastime of the media and now the judiciary on the fake degrees issue. Partisan politics and media In light of the above-mentioned developments, the media has been consistently in awe of the changed priorities of PML-N in terms of supporting the lawyers and judges' movement and the allied media freedoms given that General Musharraf resorted to censorship and a brute crackdown in November 2007. President Zardari was a hero until he played the media-lawyers game and thereafter with his wavering commitment to the judges' issue he overnight turned into the worst thing that happened to Pakistan. Such was the nature of media hysteria, which Zardari and Musharraf were bracketed in the same category without any understanding of Pakistan's history, the fragility of its democratic dispensation and the principle of objectivity in reporting and analysis. Dates of Zardari's ouster and a bloody end were announced with impunity. All this while, the PML-N remained the preferred choice of our daring activists. This honeymoon ended with the issue of fake degrees. Demolishing the politician Fake degrees of several legislators is now the hottest news item and yet another opportunity to malign democracy. Over a hundred and fifty legislators at various levels are reported to have submitted fake degrees to the Election Commission in 2008. The debate, however, has provided the ammunition to deride the entire political class for being immoral, unfit to govern by ahistorical TV presenters and civic activists. They have conveniently forgotten that many of these fake degree holders were creatures of the establishment, responding to unjust laws and banished by the military and the judiciary time and again. In fact, there is no crisis as bye-elections can resolve the issue. But the hysteria around this fact was so intense that the legislators with proper degrees also felt offended and had to strike back. Punjab Assembly resolution In this context, the provincial assembly passed a resolution with consensus chiding the irresponsible sections of the media. Evidently, there was nothing wrong with a particular view of the politicos but soon this resolution turned into a moralistic and heated debate with the journalists protesting over the impending censorship. No such action was either announced or deliberated by the elected governments. This was a particular view, which could have been countered through reasoned debate and rational discourse. But emotionalism held sway and within a few days the same assembly had to undo this resolution and pass another resolution that favoured the media. Many pertinent questions have arisen from this conduct of journalists as well as the legislators. The political parties have to display more scrutiny and devise ways of achieving internal accountability. The media at its end has to work towards self-regulation and setting a code of conduct. It should be reiterated that freedom of media is linked to democratic development. By tarnishing the image of civilian politicians and diminishing the trust in democracy the media would be doing a big disservice to its future and credibility. Three important policy imperatives must be kept in view. Electronic and print media have to work quickly towards a regulatory framework. The state should have nothing to do with this process and it should remain within the realm of the media. Political parties must also show restraint while engaging with media and they should demonstrate that their internal processes are transparent and rule-based. Finally, media barons and owners of newspapers must ensure that the media does not become another interest group like the lawyers fluent in occasional violence and drunk on moral superiority. The writer is a policy expert, writer and editor based in Lahore. www.razarumi.com
A crisis of imagination Those who harp on about China refuse to pay the same kind of attention to the experiments currently being undertaken elsewhere in the world By Aasim Sajjad Akhtar China is increasingly becoming the poster-child of a
new 21st century model of economic development. Without doubt, the
'miracle' that began with Deng Xiaoping's reforms in 1978 following the
end of the Maoist era is staggering for just how long it has been
sustained. China dominates world trade, and is widely viewed as the engine
of world growth. Where economists once talked about the 'Washington
Consensus' they are now waxing lyrical about the 'Beijing Consensus'
(although the World Bank and its sister institutions appear to be
remaining loyal to the former). More generally commentators have, for some time now, been predicting that the balance of economic and political power in the world will shift to the Asia-Pacific region in upcoming decades. The political and economic crises currently afflicting North America and Europe have reinforced the notion that the forthcoming century will be Asia's; China, with India close behind, is touted to become a bonafide challenger to the United States as global superpower. I do not share the optimism of the Asian nationalists who downplay the fact that the fate of China, India and the rest of the continent's 'emerging economies' is inextricably tied to the fortunes of everybody else, including North America and Europe. Even if stylized economic growth statistics were an adequate measure of overall social progress, the interdependence of all of the world's economies is such that that economic recession in the Western countries has and will dampen growth prospects in Asia. China and India may have survived the global financial crisis relatively unscathed (alongside special cases such as Australia), but this does not mean that there is nothing to worry about. How different is the Chinese model from the American or European one? After the 2nd World War, three distinctive capitalist trajectories evolved in the United States, Western Europe and Japan. The differences between these three capitalisms - and the various permutations in other countries that followed the lead of the three major protagonists - were not insignificant. Yet at the same time there was no fundamental divergence in terms of the principles that underlay the development model in all three countries. Today these capitalisms are crisis-stricken, while the liberal democratic regime that exists in all three heartlands is facing a major legitimacy crisis. China is far from a liberal democracy, and is unlikely to become one anytime soon. Chinese capitalism is also at least as different from the American, European, and Japanese versions as the latter three were from one another. Academics emphasise that China's 'success' derives from its grooming of powerful technocratic elites, a strong work ethic which derives from cultural homogeneity (driven in large part by the unique language structure in spite of differences in dialect across the length and breadth of the country), and the balancing of private and public enterprise. But there are inescapable contradictions that are emerging, and fast. While absolute poverty may have been reduced in China, relative poverty is increasing rapidly. Very few 'experts' singing the praises of post-Mao China are willing to acknowledge that without the infrastructural and social base that was created between 1949 and 1979 China would not be where it is today. But while Deng and future leaders embraced capitalism and are accredited with being architects of the 'miracle', they also initiated a process through which China went from being one of the most equal to one of the most unequal societies in the world. Even the Chinese government admits to a lot of rural unrest - it is the rural poor who are the biggest victims of Chinese capitalism. Meanwhile responses to the brute exploitation of neo-liberal capitalism are becoming more and more acute in other Asian 'success stories' such as India (Naxalites) and Thailand (Red Shirts). Then there is the very real prospect that even if China continues to grow fast, it will sooner rather than later face decisive constraints due to an increasingly acute shortage of energy resources globally. The Copenhagen conference only scratched the surface of the sustainability problems that burden global capitalism. It is another matter that the western industrial countries continue to demonstrate outrageous hypocrisy in calling attention to the carbon emission levels of China and India while refusing to acknowledge historical responsibility for the precarious state of the environment. But the point is that as far as ecological imperatives are concerned China and India appear to be acting more and more like irresponsible 'Great Powers' themselves. In charting the history of the economic ascendancy of western Europe and then later the United States, serious scholars always come across the small matter of colonialism/imperialism. China's dumping of cheap consumer durables on third world markets is a practice that cannot help but revive memories of bygone eras of 'free trade imperialism' in which the rhetoric of mutual benefit was employed by Britain and the United States to give license to blatant economic exploitation. Those who believe that China will be at the forefront of the challenge to American imperialism would do well to ask whether or not they may be unwittingly calling for the establishment of Chinese imperialism in place of the incumbent. It is telling that those who harp on about China refuse to pay the same kind of attention to the experiments currently being undertaken in Latin America by popularly elected regimes. Venezuela, Bolivia, Ecuador, Cuba and Brazil (among others) have operationalised a regional economic integration strategy which features an alternative continent-wide financial system. In at least some of these countries attempts are afoot to at least counter-balance the profit-motive which powers capitalism with non-material incentives that emphasise human needs and promote social solidarities. All in all I believe that there is ultimately little to distinguish Chinese capitalism from the other prototypes. Capital is, by definition, prone to short-termism and unable to create a balance between profit and the imperatives of human and nature's survival. Combined development on a global scale is always uneven, and thus social and political conflict can never be transcended. Whether or not humanity's imagination has become too stunted to think beyond capitalism is another debate altogether. If so we should be prepared for conflict to escalate and for nature to turn on us.
water Controversial canal The solution lies in building the multipurpose, 35-maf Katzarah Dam, generating up to 15000 MW hydropower on the Indus, 20 miles downstream Skardu Town By Khalid Mustafa Pakistan has experienced water deficit for a long time. In the wake of acute water deficit, both in Rabi and Kharif seasons, Punjab and Sindh are found disputing water distribution. No solid measures have been taken by the incumbent political regime so far to bridge the trust deficit that emerged out of the Chashma-Jhelum Link canal's opening and closure and then re-opening. General Musharraf took a decision on July 10, 2000 to
appease the lower riparian federating unit under which a federal member
for Irsa was to be taken from Sindh despite Punjab protest. Owing to this
unpopular decision, since then Sindh got 40 percent representation in the
water regulatory body and maintained its hegemony as decisions pertaining
to water distribution are made through majority votes. Punjab caters to the food requirements of 80 percent of the population and, under para-2 of the water accord, shares 55.84 million acre feet (49 percent) in water resources of 114.35 million acres of feet (MAF). It possesses only 20 percent share in decision-making at Irsa, whereas Sindh that owns 48.76 MAF (43 percent) water share has 40 percent share in decision-making. Likewise, Khyber-Pakhtunkhwa (KP) has water share of just 5.78 MAF (5 percent) in 114.25 MAF water resources, and Balochistan 3.78 MAF (3 percent), but both the small federating units also enjoy 20 percent share each in decision-making. According to Punjab Water Council Chairman, Mr Hamid Malhi, weightage in decision-making to very province should be based on the water share each province has under the accord. Malhi believes water allocation should be revised and based on food targets to the provinces both for Rabi and Kharif seasons. However, Punjab Irrigation Department has since long been demanding the reconstitution and expansion of Irsa to neutralise water regulators, depoliticise entity which could ensure the water distribution based on justice. "Under Irsa Act, however, all the decisions pertaining to water distribution are made with a majority vote. With the Chief Executive Order in 2000, Sindh manages to monopolise Irsa's decision-making on water distribution in its favour with 40 percent representation," says Malik Rab Nawaz, Secretary of Punjab Irrigation and Power Department. "Punjab registered its strong protest when General Musharraf gave this order. Now, Punjab seeks the expansion of Irsa by including two more members, each from Gilgit-Baltistan and Azad Jammu and Kashmir since Gilgit-Baltistan and AJK also share water of Indus River," he adds. According to Nawaz, Punjab "also demands that chairman of Irsa should not be less than a retired Supreme Court judge with strong credibility and his appointment should be for three years as currently the chairmanship of Irsa rotates between provinces owing to which Irsa has become highly politicised." M H Siddiqui, Advisor to Punjab government on water issues, says Chashma-Jhelum Link Canal originates from the Indus and irrigates 30 lakh acres of land of Jhang, Muzaffarabad, Multan, Lodhran, Vehari and Bahawalpur. Taunsa-Punjnad irrigates 15 lakh acres of land of some portion of Bahawalpur and Rahim Yar Khan. Siddiqui reveals that when Pakistan surrendered three rivers of Punjab to India under the Indus Waters Treaty, it was decided that in lieu of the three rivers, a system of water works will be constructed. As per the Indus Basin Development Fund Agreement, signed under the Indus Waters Treaty, Chashma-Jhelum Link canal was constructed to cater to the southern belt of Punjab which would get water from Satluj and some water from Ravi. "The said three rivers used to provide 4.5 million acres feet of water which Punjab has the right to withdraw from Indus River," says Nawaz. Siddqui provides documents to TNS about the Chashma-Jhelum Link canal that are clear about the fact that the canal is perennial and that the World Bank consultants designed the canal and Taunsa-Punjnad to run every month both in Rabi and Kharif seasons to feed the canals. Murad Ali Shah, Sindh Irrigation Minister, is of the view that "Sindh is not against the opening the canal but we want that its water requirements should be first fulfilled." Bashir A Dahr, Federal Member Irsa from Sindh, says the canal has been operational in the past both in Rabi and Kharif seasons but in Rabi it would run only when Punjab did not have water both in Chenab and Jhelum rivers. He adds that Sindh is of the view that the canal should be opened after catering to its water needs and those of Balochistan province. On the question of Punjab's demand, seeking restructuring of Irsa, Dahr says the existing system needs no restructuring. "However, it needs to be depoliticised," he asserts. Engineer Fateh Ullah Khan Gandapur, former Irsa chairman, believes no amount of Irsa re-composition will solve the issue as the dispute is due to a shortage of water. Musharraf, he says, appointed additional members to Sindh in violation of the water accord. "The federal member of Irsa should be from Gilgit-Baltistan. There is no need to appoint a Supreme Court judge in a technical body. It will be in violation of Article 4 of Irsa Act as it requires a high-ranking irrigation engineer as member and chairman. He further says that federal and provincial governments seem "unconcerned about implementing the basic water accord laws: paras 2, 4, 6, and 14 (e)". The acting chairman holds the view that it is not Irsa's duty to initiate the implementation of schemes under these paras. "Irsa's duty is only water distribution. If the above vital paras of the accord had been implemented, there would have been no water dispute between the two provinces. As Chairman Irsa in 1994, I requested the government to implement the rules required under para 13 of the accord," he adds. In accord's para 2, 117.35 maf of water was distributed in 1991. At that time, the average available annual river flow was 142 maf. The total water requirement of the provinces and the canal's capacity was 105 maf. Water Accord para 4 provides to store (142-105) 37 maf of balance floodwater that goes waste to sea. If this water was stored, Sindh and Punjab, having equal share of 37 percent, would get 13.69 maf of additional water, though Sindh has less irrigated area than Punjab. Presently, water availability is less by 10 maf (105-95). This shortage can only be removed by building the 35 maf Katzarah dam. Water accord para 14 (e) requires avoiding all wastages. This means storing floodwater by dams and carrying out water management of the 150 years old, obsolete, wasteful and incompatible canal irrigation system that wastes 50 percent of 105 maf of water due to seepage. The basic function of the canal is to transfer water from the Indus river to Jhelum river. CJLC is not a regular canal. It is basically a link canal. It may also serve as the flood channel. If Punjab does not exceed its share of water, Sindh should not object to its share through CJLC. Sindh believes Jhelum river water belongs to Punjab and Indus to Sindh. Balochistan always suffers at the hands of Sindh. The solution lies in building the multipurpose, 35-maf Katzarah Dam, generating up to 15000 MW hydropower on the Indus, 20 miles downstream Skardu Town.
The capacity to generate revenue from local resources is a crucial determinant By Dr Noman Ahmed According to baseline administrative requirements,
various municipal organisations across the country have announced budget
estimates for the forth coming financial year. Remarkable similarity can
be discerned from this exercise despite contextual differences. The statements have been prepared on the basis of figures that existed during the previous year. That is to say the present outlays are stretched a few percents ahead of the previous year's figures. Main heads of development, recurring expenditure, and departmental allocations do not go beyond the exercise of number adjustments, to say the least. Local government institutions, in whatever form they exist, represent the basic unit of policy making and governance. When structured on elected representatives, these institutions become the training ground of future political leadership for respective regions and the country. In situations, when provincial governments manage them as quasi-satellite outfits, these units depict the cumulative vision of regime towards the general well-being and welfare of people. One of the most powerful tenets of this vision is the outlay of spending that is charted every year. If the provincial administrations intend to take the tasks of local area management seriously, the exercise of budget-making automatically becomes a vision-building discourse. It is most disappointing to note that local government budgets across the country only display a routine adjustment of figures to enable the management of the conventional functions. No fresh need analysis at various layers of governance has been taken into account despite the enormous transformations experienced by various cities and districts. In municipal functioning, the capacity to generate revenue from local resources is a crucial determinant. A municipality that is able to meet its expenditures from a comparable revenue generation can maintain reasonable financial autonomy in ordinary functioning. Lessons from other similar contexts offer examples. The municipal government in New Delhi is known to have a progressive taxation system. It plans to enlist about three million properties and structures for collection of property tax in order to raise a whooping target of over two billion dollars worth of revenue from this source alone. In contrast, our cities paint a gloomy scenario. This has not happened, even in the case of larger municipalities such as the City District Government Karachi. It is a matter of concern to note that water, sewerage, and conservation charges have not been recovered. The Karachi Water and Sewerage Board (KWSB) manages to collect less than one third of the issued bills. Billions of rupees are still payable to the utility by government departments, autonomous bodies, other utilities and some bulk consumers. City District Government Lahore was criticised for not being able to tap available avenues of revenue collection. Few months back, concerned officers were admonished for their inability to charge the corresponding levy from mobile phone towers that exceeded 4000 in number. A healthy balance sheet is the cornerstone of potent municipal governance. Spiraling compound debts make the municipal bodes ungovernable. And the adverse impacts of this state of affairs fall on the citizens, earning their scathing criticism and distrust. The sectors where the district/city governments and lower tiers have failed to deliver are solid waste management and sewerage. Most of the urban locations literally appear to be an extension of a big wasteland in many of its localities. Apparently, the division of responsibilities between the internal tiers of local government did not work efficiently. The union councils' administrations were supposed to organise garbage picking from household to an area bin. Town councils were to lift this garbage and transport it to the landfill site. The district/city governments were to coordinate the landfill site development and the overall system. However, the system is showing signs of serious weakness. Distribution of vehicles and equipment among towns, long distances to landfill involving high transportation costs, lack of proper planning, absence of trained manpower (especially, at the level of supervisor of field operations), huge backlog piles of waste and indiscriminate burning of garbage have caused huge problems for this sector. These problems are far from over. In the recent past, several high profile consultancy assignments were done to assess the solid waste situation and find out solutions in many cities of Punjab and Sindh. So far, it appears, the wisdom shared by foreign consultants of those times is locked somewhere in official cupboards. The more chronic issues related to safe disposal of hospital waste: installation of municipal incinerators for public sector hospitals, appropriate sitting of re-cycling industry in the proximity of landfill, cleaning solid waste from large drains and scientific location assessment for garbage stations remained largely unattended. The recent attempts of privatising solid waste management services need a thorough evaluation. From the preliminary findings, it appears that the level of efficiency is far below a minimum desirable level. Time has come to address the pressing important urban development and management issues on a priority basis. To create a performance-monitoring mechanism, the district/city governments must be directed to institute the preparation and circulation of quarterly reports. This approach will be beneficial for its stock-taking as well as identifying any short coming in the performance. The sources of revenues need to be explored in a scientific manner. Revision of rates of existing local taxes and possibilities of levying fresh taxes need to be analysed in an objective manner. On the basis of findings, fresh approaches must be developed to enhance the autonomy at least to make the district capable and responsible to manage routine urban development and management without interference from the upper tiers.
Time to probe Swiss accounts The government needs to introduce asset-seizure legislation to confiscate mammoth reservoir of untaxed black money By Huzaima Bukhari and Dr Ikramul Haq Unscrupulous individuals and companies can no longer
hide their untaxed Swiss bank accounts. Succumbing to international
pressure, Switzerland has recently ended its 300-year banking secrecy.
Like Liechtenstein, Luxembourg and Andorra, Switzerland has now agreed to
share information regarding bank accounts on request from foreign
governments. Pakistani tax authorities -- knowing that there exists a
treaty of avoidance of double taxation and exchange of tax information
with the Swiss government -- have not yet taken any step to probe into
hidden Swiss accounts of Pakistanis. The Swiss House of Representatives following the Senate on June 9, 2010 accepted the demands of the Organisation for Economic Co-operation and Development (OECD) that it would follow Article 26 of the OECD's Model Tax Convention, which countries agree to share relevant data in cases of suspected tax fraud. In practical terms, Switzerland from now on cannot restrict its administrative assistance to cases of presumed tax fraud (which involves the falsification of documents). It is legally bound to provide information where tax evasion is suspected -- in other words, where money not declared to national tax authorities, has been deposited in a Swiss bank. It is no secret that Pakistani tax evaders have been transferring huge amounts of money to Swiss banks -- generated through illegal activities by some politicians, bureaucrats, terrorist networks and businessmen. Pakistan is facing the challenge of measuring and countering enormous revenue leakages and black money -- its size estimated to be three time the regular economy. Till today, no effort appears to have been made by the National Accountability Bureau (NAB), Federal Board of Revenue (FBR), Federal Investigating Agency (FIA), Anti Narcotics Force (AFN) or Narcotics Control Board to conduct an in-depth study to quantify the magnitude of black money and amounts shifted to Swiss banks. According to an estimate, it is not less than 200 billion dollars -- four times the external debt of Pakistan. The process started when US Department of Justice (DOJ) took the Swiss bank UBS to court to obtain the names of 52,000 clients of the bank: US citizens who, the US government claimed, did not declare to the Internal Revenue Service (IRS) all details of their financial information. NAB and/or FBR have learnt no lessons from this move by the US authorities. "At a time when millions of Americans are losing their jobs, their homes and their health care, it is appalling that more than 50,000 of the wealthiest among us have actively sought to evade their civic and legal duty to pay taxes," says John DiCicco, acting Assistant Attorney general for the DOJ's tax division. In the wake of US success, the European Union also announced its intention to seek a similar agreement with Swiss banks, to release the names of clients who are citizens of EU countries. According to an estimate, the money lying in Swiss banks of Pakistanis is to the tune of US $200 billion which appears plausible as parallel economy is growing at an alarming rate of 20 percent per annum. The volume of black money generated in the year 2008-09 alone was not less than US$40bn. This is still not final. It does not account for kickbacks in foreign trade, smuggling and foreign exchange racketeering, apart from trade in narcotics and other criminal activities by terrorist outfits. According to various studies, the underground money generated through smuggling in goods and narcotics trade alone is between US $50 billion. Policymakers must realise that a sound development strategy seeks to reduce the size of the informal economy and bring into the open resources that lie in the form of black money. Apart from such mechanisms as foreign exchange and tax amnesties, taxation is used as a tool to tap the resources inherent in these areas. According to a conservative estimate, tax evaders in Pakistan annually deprive the country of revenue of over US $10 billion -- but the government, instead of putting them behind bars, encourages their unlawful activities. Politicians, policymakers and tax managers during the last many years have miserably failed to tap untaxed money despite borrowing a whopping US$ 100m for Tax Administration Reforms Programme (TARP) -- every year billions of rupees are transferred from Pakistan to Zurich, Dubai, Johannesburg and elsewhere. It is not possible to determine the precise amount of revenue loss and size of black money or shifting of money abroad. Revenue loss on account of smuggling of Afghan transit trade alone, as estimated by the World Bank, amounted to US$ 35 billion in 2008-2009. Apart from direct monetary costs of corruption, both Pakistani and international literature pinpoint many other costs, such as loss of government credibility, spread of injustice, distortions in resource allocations and loss of foreign and local investment. When the presence of black money is so apparent, its criminal accumulation and generation are not revealed and the offenders punished, is a question which continues to baffle honest citizens. The ugliest face of black money emerges in the corridors of power, political as well as administrative. Pakistan is passing through the worst financial crisis of its history, i.e., the crisis of resources manifested in the huge budgetary deficits. Revenue has to be collected and all measures both stringent and persuasive have to be taken in that direction. The government, therefore, needs to introduce asset-seizure legislation to confiscate the mammoth reservoir of the untaxed black money -- huge chunk of which is lying in the Swiss banks. It is now time to seek information from Swiss government as has been done by the US, EU countries, and many other countries in Asia and Africa. The writers, tax consultants and authors of many books on Pakistani tax laws, are visiting Professors at Lahore University of Management Sciences (LUMS)
Challenges of climate change and fast-growing population are diminishing water supplies By Asma Rashid How does one see the situation where humans and animals
drink from the same pond? What would such a practice or instance signify?
Negligent governance, violation of human rights, failed environment
strategy, etc. In many rural areas of Pakistan, humans and cattle quench
their thirst from the same water source. The scenario exhibits lack of
facilities of safe-drinking water and sanitation. When we look at the picture of water provisions in a more comprehensive manner it is clear that more than 42 percent of population of Pakistan does not have access to safe-drinking water. The situation in rural areas is even worse where 80 percent lack access to clean water. It is important to remember that mere access to drinking water is different from access to safe drinking water. The standard of quality and quantity of water makes the situation complex. The quantity of water available for drinking and personal uses in Pakistan is also questionable. Only 3-7 percent of fresh water is used for the purpose. Pakistan is already a water-stressed country moving fast towards being water scarce. The ever-mounting challenges of climate change and fast-growing population are further diminishing water supplies. In desert areas of Pakistan women have to travel miles in search of water. And when water is found it is not fit for drinking. Statistics of water quality in Pakistan are startling. According to one report, clean water, free from contamination, is available only to one-quarter of the total population of Pakistan. It means that majority of population compromises health issues when it consumes water. Pakistan's water quality ranks 80th out of 122 countries, portraying a very grim picture. Tones of municipal, industrial and agriculture sewage is disposed unabatedly in fresh water sources. Only three out of 100 industries of Lahore chemically treat their waste-water, as reported by Asian Development Bank (ADB) in 2007. Only one percent of urban sewage and waste is treated before draining it into water bodies, the report says. Keeping in view fresh water contamination one may pin his/her hopes on bottled water. But that too is a sham. More than 50 percent of branded bottled water has been declared unsafe by Pakistan Council of Research in Water Resources (PCRWR) recently after conducting a scientific analysis of the samples. Out of 63 samples collected from nine major cities of Pakistan 22 were found contaminated with bacterial growth and 14 were found chemically contaminated. The scenario poses a serious health risk leading to economic losses. According to a report by World Bank in 2007, health risks associated with drinking water costs up to 2 percent of the annual GDP of Pakistan. The PCRWR estimates that 40 percent of all reported illnesses, such as diarrhea, hepatitis and typhoid, are water-related. According to a careful calculation about 200,000 children die of diarrhea every year. World Health Organisation reports that 60 percent of infant deaths are caused by water infections. Looking at the picture from a global perspective: more than 1 billion people have no access to safe drinking water, 2.4 billion people suffer from water-related diseases, 1.8 million people die annually of diarrhea, 133 million people suffer from intestinal infections, with the highest rate of infection among school-age children, and 1.5 million people are reported to be suffering from Hepatitis A. Investment in safe drinking water and sanitation has multiple economic and social returns. For every US$1 invested there is a projected US$ 3-34 benefit gained. The WHO estimated that achieving the Millennium Development Goal of providing access to safe water and sanitation could bring a benefit of more than US$ 84 billion annually. In Pakistan, expenditure on water supply and sanitation is less than 0.2 percent of the GDP. Pakistan aims to providing access to safe drinking water to 96 percent of urban and 75 percent of rural population in its Vision 2025 plan. The cost estimates are US$ 50.66 billion for urban areas and US$ 21.57 billion for rural areas, a virtually gigantic target to achieve. The budget for water sector focuses on irrigation projects rather than provisions of drinking water. A National Drinking Water Policy has been designed to provide safe drinking water by 2025, but it is not important to merely devise or approve a policy but its implementation and strict monitoring system. As a matter of fact, for a developing country like Pakistan with dwindling water quality and quantity, both government and people should share responsibilities to combat challenges of water quality and ensure provision of safe drinking water. One thing we know that it is an uphill task requiring institutional, technical, participatory, and regulatory framework, otherwise safe drinking water will remain a distant dream. Having its direct impact on human health and well-being, quality of water cannot be compromised. The writer can be reached at asma.ras@gmail.com
Unlike the Cold War era, both the Russian and US governments have not allowed espionage issues to interrupt diplomatic relations By Rana Musa Tahir After the Russian President Dimitri Medvedev's visit to the United States, on June 27, 2010, ten people were arrested and accused of being part of a Russian espionage ring, living under false names and deep cover in a long-term mission to penetrate, what one of their coded message called, American "policy making circles." The FBI (Federal Bureau of Investigation) claimed that
it had kept these agents under surveillance for more than seven years and
the arrests were made when it was feared that some of them were leaving
the country. The F.B.I also claimed that these "sleeper" agents
were unable to gather any important information or state secrets
therefore, in the courts they were not accused of espionage but were
charged for money laundering and for failing to register as agents of a
foreign government. Although the case had been discussed with President Obama even before Dimitri Medvedev's visit, he did not allow any action to be taken while the Russian President was in the US; any arrests during the visit would have been politically explosive. Immediately after the arrests, the Russian Foreign Ministry denounced the espionage allegations as "baseless and improper". The evidence, however, was undeniable. The CIA (Central Intelligence Agency), under the supervision of its director Leon Panetta, contacted the Russian foreign intelligence agency, the SVR, and proposed a spy swap. In return of the 10 agents the United States demanded 4 of its spies held in Russian prisons. The deal was finalised and the Russians removed the initial statement, denouncing the charges, from their Foreign Ministry Web site, replacing it with a new one in which they accepted that some of the spies in the US were Russian citizens. On both sides the spies confessed their crimes. After the confessions they were flown to the Austrian capital, Vienna, and the exchange took place in one of the biggest spy swaps since the Cold War. This brought to a prompt end, an episode that threatened to shatter President Obama's efforts to rebuild Russian-American relations. The American media repeatedly mentioned the weakness of the Russian intelligence agencies and claimed that the information collected by the agents could have easily been obtained by surfing on the internet. An article in the The New York Times described their conventional methods of spying, for example using invisible ink, as "a glimpse into grandmother's attic". The claims of the FBI that the Russian spies were unaware of the fact that they were under constant surveillance for almost a decade are inconceivable due to many reasons. The SVR is the direct descendant of the highly efficient Cold War era KGB, the same agency whose spy ring gave Stalin secrets of the atomic bomb and thus, triggered a nuclear-arms race. Keeping in mind the achievements of the Russian intelligence agencies, the question arises; did the Russians fool the FBI? Victor Ostrovsky, a former Mossad operative revealed that the Israelis taught trainees about counter-surveillance by studying real Russian spies at work. "The techniques we learned were for the most part gleaned from watching Soviet operatives and from information received from KGB…..." he said. He also said "Over the years we had perfected the methods but were always aware that the leaders in that field were the Soviets". It is, therefore, close to impossible that the Russians, highly trained in counter espionage, were unable to detect any of the FBI surveillance. One possibility is that the after detecting the surveillance, the agents were under orders from Moscow to pretend that they did not know the FBI was watching them, in order to divert its attention from other important operations. Maybe there is another spy-ring they preferred to steer the US counter intelligence teams away from. This explains why the FBI was not able to get any important information from the Russians in more than seven years. Whatever the facts maybe, it is certain that unlike the Cold War era, when cases of espionage were enough to break the ties between the two countries, nowadays those high up in both the governments do not allow these issues to interrupt diplomatic relations.
trade Getting down to business Do we need a World Bank report to tell us the state of business environment in Pakistan is far from satisfactory? By Ather Naqvi Doing a business in Pakistan, or starting a new one,
has never been hassle-free owing to various factors such as bureaucratic
and institutional hurdles, rising inflation, and lack of skilled
workforce, etc. Things seem to have gone from bad to worse over the last
few years affected by apparently as remote a factor as economic recession.
If people who are running various small and medium businesses are to be
believed, the cost of doing a business in Pakistan has sky-rocketed during
the last few years and is multiplying with every passing day. This is well
beyond the shock-absorbing capacity of a businessman who has invested
millions of rupees in a business. Lack of institutional support, according to businessmen, and unavailability of loans on easy terms has limited their capacity to make an investment. This is in addition to uncertainty in the market due to the worsening law and order situation. In this backdrop, a yearly report issued by the World Bank on the costs of doing business in Pakistan offers a glimpse into issues that are faced by a businessman who intends to start a new business or plans to expand an existing one. "Doing Business 2010: Reforming Through Difficult Times", is the seventh in a series of annual reports by the World Bank "investigating regulations that enhance business activity and those that constrain it". Doing Business gives "quantitative indicators on business regulations and the protection of property rights" that can be compared with 183 economies of the world. In the light of the issues hinted at above Pakistan is ranked 85th out of 183 economies which indicates clearly that environment is not conducive for businesses and has a lot of room for reforms. To judge the state of business environment in Pakistan the report identifies, "a set of regulations affecting 10 stages of a business's life", including: "starting a business, employing workers, registering property, getting credit, paying taxes, trading across borders, and closing a business" among other things. The report is significant because it "not only highlight(s) the extent of obstacles to doing business" but it "also help(s) identify the source of those obstacles" that can be used to guide policymakers. While the report focuses on various factors that have affected business prospects in Pakistan, it mentions one area where some progress seems to have been made. It states, "Pakistan simplified business start-up by introducing a system that allows online registration for sales tax and removing the requirement to make a declaration of compliance on a stamped paper. These moves removed four days and one procedure and halved the cost of the business start-up process." But a businessman, who sweats blood in the volatile business market knows precisely where the faults lie, "One indicator of how serious the government is taking the poor business environment is that it has applied a major cut in the Public Sector Development Programme (PSDP) recently. That means many people are not going to get business as there will be less development activity, resulting in less business," says Omer Akram Sheikh, a businessman in dairy products. "Long hours of loadshedding means a decrease in the per unit manufacturing capacity of a business," Sheikh adds. He mentions a couple of steps that can improve the prospects of a business, "Our power tariffs are very high. They have to be brought down. Then, we also have very high mark-up rates. In this scenario, I think more people are closing down businesses than those who are doing a business or planning to start one." Sheikhs' claim is borne out by Zeeshan Ali, a businessman who deals in lubricant products in Gujranwala, "One main problem is that we have not been able to develop enough institutions where we can train workforce for our industries and small and medium businesses. Trained workforce produces quick and better results and can also compete in the international market. That in turn reduces your cost and enhances production." While a trained workforce is essential to get a business going, there are other factors that have added to the problems faced by a businessman. Zulfiqar Thawar, President Union of Small and Medium Enterprises, believes the rise in the cost of production, among other things, has landed businessmen in a position where they think twice before starting a new business or expanding the existing one, "The cost of production has increased many times and that includes cost of energy and cost of transportation. These two factors alone lay the ground for a business to survive," he says adding. "Initial steps to start a business such as applying for a National Tax Number (NTN) and opening a bank account sometimes take quite a few days. This is a very negative practice that has to change." Thawar believes the impression that every government institution is corrupt is exaggerated, "Sometimes it is the people who pressurise government officials to accept bribery and deliver services even before the minimum duration. One thing we have to improve is the lending facility for the SMEs," he says. Sultan Tiwana, General Manager, Small and Medium Enterprises Development Authority (SMEDA) does not fully agree with Zulfiqar when he says, "Though lending facilities should be improved for those who actually need money, a businessman whose first priority is getting a loan cannot be trusted. There are people who seem to be more adept at wasting money than actually benefiting from it." "The most important part is the planning of a business followed by execution and implementation stage, including risk assessment." Tiwana laments the fact that the lending percentage has reduced over the last one year, "There is a seven percent reduction in the current lending facility for small and medium businesses. So, that clearly means that the picture is not very positive." Tiwana identifies businesses where the government provided support and made a difference such as textiles, sports goods, leather garments, and surgical goods in Punjab, marble, granite, and gems industries in NWFP, and fisheries in Balochistan. "The increase in the cost of production has risen to about 40 percent," says Tahir Malik, Chairman, Regional Standing Committee for Export and Trade, FPCCI. "This has left us well behind our neighbours such as India, Bangladesh, and China. Bangladesh now tops the list of countries in the region that has very low cost of production."
A new insight into educational system will help tap vast amount of human resource that Pakistan has By Afshan Ahmed Over the last few decades, business schools have went through a phase of mushroom growth in Pakistan. Almost all academic institutes have extended their curriculum to the field of business management and have opened enrollment for bachelors and masters of business administration. There can be many objectives of establishing a business school, teaching students from a well accredited published book of foreign authors who may be considered gurus in their respective fields, to absorb graduates in the job market with affluent employers, or to produce entrepreneurs for the MNCs or big national companies. Every business school aims to providing the best
quality education and teaching in limited resources. Few names can be
counted. Students who desire to have an MBA degree from reputed
educational institutes have better chances to grab a job that promises
high paid salary. Leading institutes, to extend their dominance in the job market, develop linkages with the corporate sector through their placement cells, job fairs, and alumni gatherings, etc. Thus, everything seems well-connected. However, something is lacking. If the curriculum of local business schools is compared with international business schools, our schools are undoubtedly striving to be at par with them. Yet, the issue is not to match the curriculum of MBA or BBA with that of a reputed American School, but to meet requirements of local businesses. With the current mix of courses students are well-trained about their skills, such as communication and presentation skills which help them in entering an organisation through job interview. However, they lack an in-depth knowledge of problems being faced by businesses in Pakistan, as they rarely get a chance to go through any Pakistani case study. Keeping in mind the unemployment rate of nearly 6 percent where the total labour force participation is approximately 49 million out of a total of 170million, there is definitely a big gap between employment avenues and an available workforce. This gap can be filled if students are encouraged to take up planned risks in their practical life and invest their time and energy for setting up their own businesses. The labour force participation is 29 percent for the whole population and out of this, almost 47 percent is still engaged with the agriculture sector. It means avenues about services and manufacturing sector still lag behind the minimum required level because of lack of new business activities. In Pakistan, the percentage of total employers is just 0.88 percent in the total employment market, which is definitely a sign that we are producing good entry level mangers to serve for an MNC rather than bringing out new business persons who can themselves become potential employer and fuel up the engine of economy. Students are taught one course on entrepreneurship at degree level along with one semester of a mini project. If such courses can be extended over the period of two semesters and linked with government initiatives and SME bank incentives to facilitate business venture, we might potentially be creating CEOs rather than mere operational level managers. Business students should be given a more practical insight aimed at facilitating their private set-up of businesses. Thin percentage of students actually knows the procedure of registering a business firm or attaining an ISO certification through proper procedure. Many of them are also not trained in making original and good business proposal for getting funds and credit, etc. On asking MBA students as to who would like to start working as businessmen after their education, only few responded in the affirmative. Besides the obvious reason of avoiding to take risks due to domestic and social obligations, one major reason is lack of support on raising initial capital and knowledge of procedural requirements by financial institutions. There are lots of initiatives that have been taken by government and private financial institutes to support borrowing facilities on easy terms. Different business incubation centers have been established to help those who want to initiate business ventures. But, again, very few students actually have any knowledge about them. According to World Bank's recently released report, "Cost of Doing Business in Pakistan 2010", doing business in Pakistan is difficult on account of various issues such as governance issues at various regulatory bodies, etc. It is true that doing business in Pakistan is extremely difficult due to fragile security situation, among other things, there is very little business schools can do to overcome these problems. However, our business schools can certainly focus some of their case studies around factors mentioned in the World Bank report to familiarise their students with the practical life difficulties that businesses in Pakistan face. In fact revising the curriculum in our business schools to match our ground realities is one way of improving our cost of doing business ranking. Making students aware about the ground realities and offering work exposure should be taken seriously by policy makers at institutional level. By broadening the vision of business schools to produce business persons, the result would be a transformational change that would help in addressing issues of job saturation as well as developing strong linkages between the academia and the corporate world. Perhaps a new insight into the educational system will pull Pakistan out of the economic crisis and tap the vast amount of human resource that Pakistan has. The writer is a research associate at Sustainable Development Policy Institute. She can be reached at afshan@sdpi.org
Shifting focus of education to technical and vocational training in keeping with market demand is the need of the hour By Alauddin Masood There is always room at the top, says a popular maxim.
But, this position often remains vacant as if waiting for the right man --
an appropriately educated and skilled professional, possessing the
capability to communicate with others, lead workers, and motivate them to
give their best. Those who strive and struggle for achieving excellence,
finally, they succeed and make it to the top. But, in practical life, we see a majority of people grumbling and complaining that they have not been able to succeed in their careers or could not be hired for a particular position because they did not have the right connections or appropriate recommendations. These grumbling souls forget that many hundred thousands of successful people who made it to the top belonged to the middle class or average families, who did not possess any social props considered necessary for success in life. At a time, when there is over six percent unemployment in the country, hundreds of positions remain vacant in trade and industry for want of appropriately qualified and skilled manpower. On the other hand, persons possessing educational qualifications and skills in tune with the market demand are hired immediately after graduation by various industries. Ultimately, they rise to top positions in their professions. This highlights the need for shifting the base of education from general education to technical and vocational education in keeping with the actual market demand. What has been preventing Pakistan from creating the necessary linkages between the supply of manpower and the market demand, in particular when the history of education planning in the country is very old? In fact, it dates back to November 1947, immediately after the country's independence, when the first educational conference was held on the directives of the Quaid-i-Azam. Till now, 12 educational conferences have been held. Interestingly, all have emphasised the role of vocational and technical education in the country, but in practice nothing tangible seems to have been done so far. Furthermore, instead of producing technical hands in keeping with market demand, our institutes churn out manpower on the principle of supply, following the band wagon mentality. For example, at present, the country is producing air-conditioning and auto mechanics in large numbers without considering market demands. Even those who pass out from these technical and vocational institutions lack practical training. This brings to the fore the need for shifting the base of technical and vocational education from supply to demand with a heavy tilt towards comprehensive practical training of the students in order to make the education more beneficial to them. It is because of clear direction in the education sector that countries have emerged as global leaders whereas states having illiterate segments in their ranks figure low on the development index of nations. Because of lacking in knowledge and skills, donor countries and institutions maintain that some Muslim countries, including Pakistan, are not able to efficiently utilise their aid and loan allocations. Since we lag behind the developed countries in Human Development Index, this remains the prime cause of all challenges that we face today. It is because of highest level of learning that some nations, despite their small numerical strength, have positioned themselves as one of the most powerful and influential communities in the contemporary world. Just take Israel, a country which emerged on the globe in 1948 and which was bereft of all vital prerequisites necessary for development, except the human resource. Within six decades, Israel has become a rich country, with a median income around US$ 37,000, which is higher than Singapore, Hong Kong, Ireland, and some US states, and just below England and Switzerland. Today, "Israel has more companies listed on the NASDAQ than any country other than the United States -- more than China or India or Britain", says Newsweek (March 29 and April 5, 2010). How did Israel succeed in achieving this distinguished position? No doubt, through their quest for acquiring knowledge. Here, one would like to quote an event of 1969 when the global Jewish society planned to build a gigantic synagogue in Jerusalem. To accomplish this task, they collected one billion US dollars, an enormous figure in the late 1960s, and handed it over to the chief rabbi for the construction of the proposed monument. Accepting the funds, the rabbi contended that educating the Jews was more exalted a cause than building a synagogue. And, instead of investing the funds in the construction of a religious building, he established the world's great educational trust so that not a single Jew remained uneducated. Of late, some leaders in Pakistan have been trying to assign education its rightful place, but somehow they have not succeeded in their efforts so far. That explains why we have failed to raise the allocations for education despite all the rhetoric. It still remains dismally low around two percent of the country's GDP. Still, one must acknowledge the efforts of the wise that are bearing some fruit. Here, one would like to make a mention of the Skill Development Council of Pakistan (SDCP), which was set up by the federal government five years ago to sharpen the skills of the Pakistan youth and to fill the gaps in the market demand and trained manpower. At the time of its establishment, the government had given a paltry allocation of Rs1.5 million to SDCP. If the management of SDCP was left to the run-of-the-mill bureaucrats, they might have consumed the entire amount within a few months and approached the government every year for budgetary allocations. While during its five years of existence, the Council has trained 15,000 people in the market-oriented skills, it has not ever approached the government again for further allocation after the initial and the first allocation of Rs1.5 million. The Skill Development Council is a self-paying organization, meeting its entire expenses, including the rental of buildings, from the funds it generates from training courses. Indeed, this is a precedent worth emulating. The government should also recognise the vision and services of the Chairman of the Skill Development Council, Imtiaz Rastgar, for managing without obtaining allocations from the government while keeping tuition fees of courses, offered by Council, modest. At present, the Council is offering training facilities only in Islamabad. The government must encourage it to also offer technical education and vocational training in the most sought after professions and skills nearer to the towns that have the concentration of trade and industry. These centres can be established on the principle of public-private partnership with the chamber of commerce and industry, providing premises for vocational training. The writer is a freelance journalist based in Islamabad. E-mail: alauddinmasood@gmail.com
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