Correlates of climate change
The environs of developed countries should be impacted by climate change, since they are responsible for 72 percent of global carbon emissions
By Ambreen Saadat
There is a growing realisation that human activity has become the agent of large-scale climate change. Actions taken in climatic oblivion have led to the depletion of the O Zone layer, global warming and acid rain. For the first time in the history of the world, concentrations of carbon dioxide in the atmosphere have crossed the permissible limits of 350 parts per million (ppm), and stand at 390ppm today. Such an increase in carbon emissions, which catalyses global warming, means that our planet is undergoing an irreclaimable distortion.

Costs and benefits of RTAs 
The emergence of RTAs as a potent factor on global trade scenario has a special significance for Pakistan which is not a member of a vibrant RTA 
By Hussain H. Zaidi 
The concept of Regional Trade Agreements (RTAs) runs counter to the Most Favoured Nation (MFN) principle, which lies at the heart of the multilateral system put in place by the World Trade Organisation (WTO). The MFN principle stipulates that any favourable treatment given by one member of the WTO to another, such as lower tariffs, shall be extended to imports of similar products from all other member countries. However, despite being a departure from the MFN principle, RTAs are allowed by the WTO under Article XXIV of the General Agreement on Tariffs and Trade (GATT), which forms part of the broader WTO Agreement.

Living under delusions
The FBR is taking credit of extra 209,376 returns but is completely silent on the failure to compel 20 million persons to file their tax declarations
By Huzaima Bukhari and Dr Ikramul Haq
The past few days have witnessed much self-praise by the bosses of Federal Board of Revenue (FBR) on all fronts -- revenue collection, widening of tax base, recovery of arrears, voluntary compliance, reform process and what not. They have claimed "satisfactory performance" (sic) during the first quarter of the current fiscal year to convince the foreign masters at IMF that Pakistan deserves more lending. This is the same propaganda that Shaukat Aziz and his team used to indulge in to hoodwink the nation that "economy is more vibrant than ever before and a new era of higher growth has just started".

The issue of resource distribution among the federal and provincial governments of Pakistan has been a subject of vigorous debate for decades. Different provinces had always been desirous of getting maximum share from the resources available with the federal government. It's a fact that more than 90 per cent of country's resources have been with the federal government which it shares with the provinces under the National Finance Commission, formulated from time to time.

So far, the formula of resource distribution has been based primarily on the single-point criterion of population of a particular province. It is believed that the said formula has always benefited the most populous province of Punjab. Over the years there had been calls of revising the formula but in the end the status quo would prevail and the distribution was made on the same one-point population criterion.

Fortunately, this time, there are assurances that the multiple criteria forwarded by the provinces will be weighed while finalising the 8th National Finance Commission. These criteria include population, poverty, revenue generation, backwardness of the provinces and so on.

Recent deliberations on NFC have been held in a very conducive environment and attended by chief ministers, technical members and representatives of different governments. Besides, there seems to be a strong realisation among the parties that the existing formula has given birth to a sense of deprivation among provinces and estranged them from each other.

The last meeting on NFC, which was held on Thursday (Oct 29), concluded in a day though it was scheduled for two days. The Finance Adviser Shaukat Tareen said there was no need to extend it to the second day as major decisions were taken in just one day.

The latest news is that all the provinces and the federal government have agreed in principle to revise the criteria. Now it is up to the technical committees, formed to look into the matter, to come out with suggestions and workable solutions acceptable to all. Tareen has hoped that they will be in a better position to make some announcement in the next NFC meeting to be held in Karachi on November 18.

Though the situation appears rosy so far, it has to be seen how acceptable the proposals are to the provinces when they see everything in black and white. There will be parties who'll benefit and those also who'll lose. In short the success of the award will lie in the willingness of the parties to uphold the spirit of sacrifice and trust on each other.

In general Sindh wants its share to be calculated on the basis of revenue generation; the NWFP has asked for due consideration to its population, backwardness and the losses it has suffered in the war on terror whereas Balochistan wants a big share of the natural resources it boasts of and funds for development of its backward areas.

NFC Committee Member Dr Kaiser Bengali tells TNS that the advancements on the new formula are phenomenal. He says the NFC meeting held in Quetta was highly successful as a decision was made on two points: distribution of Gas Development Surcharge among provinces and declaration of sales tax on services a provincial subject.

He says the last meeting held in Peshawar discussed the horizontal and vertical distribution of resources among the federal government and provinces. "Here, clarity emerged on different points that were under consideration for long," he says.

Bengali tells TNS that different formulas to share resources and criterion to qualify for them were discussed. There were proposals to give 50 percent, 52 percent or 55 percent share to provinces, he says, adding Punjab even asked for calculation on 60 percent.

He says three provinces have agreed on implementation of multiple-criterion formula whereas Punjab has given an evasive answer. The success of the meetings depends primarily on the response of Punjab. "If it refuses to accept multiple criteria there would be a deadlock and there would be no NFC," he adds.

Balochistan and Sindh are bound to benefit from the backwardness criteria as both of these provinces were found to be the most neglected federating units in terms of Human Development Index (HDI). 'A Brief on HDI by Provinces' -- a special presentation prepared on the request of the Finance Ministry, takes into account four sectors, including education index, health index, facility index and economy index to come up with HDI for a particular province.

Haji Adeel, member from NWFP, says the last meeting has been very successful in terms of decisions on net hydel profit for NWFP. He tells TNS that an announcement on payment schedule of Rs 110 billion under this head will be made in a couple of days. A technical committee will also start working on payment of the remaining Rs 150 billion.

Adeel says all the provinces agreed on the three criteria suggested by NWFP i.e. population, poverty and war. He says his province has also demanded compensation for the damage caused in the province due to the ongoing war against terrorism. But this will not be a part of the NFC award, he says.

Adeel says there are differences as well among the provinces. "For example, provinces are asking for share on the basis of tax collection and generation. Our province can neither generate nor collect share as there has been no major investment in the province for the last 62 years," he says. "Therefore, this criterion will not be acceptable to us."

Similarly, he says, Balochistan has asked for sharing of resources on the criterion of inverse population (density). This, again, is unacceptable to other provinces as they are bound to suffer a lot in this case, he adds.

Adeel says a major demand of smaller provinces is that they should be given share in the divisible pool and not accommodated through grants. He says smaller provinces have been compensated in the past through grants but this practice should be discontinued. "It seems more like charity than the right of a province," he says.

NWFP cabinet ministers, officials and politicians, both from treasury and opposition benches, are optimistic that their long awaited demand of Net Hydel Profit (NHP) may finally be met during the National Finance Commission (NFC) meeting in Peshawar or shortly afterwards.

Several unanimous resolutions by the NWFP Assembly and attempts by successive governments seeking payment of the NHP as per article 161 (2) of the Constitution of Pakistan have failed to attract a favourable response thus far. But the new initiative launched by the NWFP NFC team, wherein it successfully pleaded its case for the NHP in the NFC, is likely to bear fruit, they say.

NWFP Finance Minister Muhammad Humayun Khan and the Awami National Party (ANP) Acting Central President and the NWFP NFC member Muhammad Adeel said that the province would hopefully succeed in getting a presidential proclamation order for the schedule of the outstanding NHP amount shortly.

"The payment of Rs 110 billion to Frontier was agreed upon. Its schedule would be announced soon. The schedule for Rs 141 billion would also be announced with it," they said.

Khalid Aziz said the NHP total they had calculated was Rs 251.5 billion. "It included Rs 110.1 billion for the period up to 2004/5 as per the Arbitration Tribunal Award (ATA), another Rs 30 billion of unpaid interest on that money, additional arrears of Rs 98.1 billion for the period from 2005/6 to 2008/9 and Rs 13.3 billion of unpaid interest on additional arrears form part of our demand," informed Aziz.

When asked whether Water and Power Development Authority (Wapda) would challenge it in court as it did against the ATA, Adeel said they had no concern with Wapda, "Wapda is too weak financially to arrange for the money. We want the federal government to pay the amount as it is guarantor of the ATA," he added.

Mian Iftikhar Husain, NWFP Information Minister, said there had been many discussions and meetings but the problem wasn't solved. "Now it is time to see the fulfilment of wishes and make decisions. You will hear some good news on the issue," he said.

He thanked President Zardari, PM Gilani and Shaukat Aziz for their support, and hoped that they would give what others could not in the 60 years of Pakistan's history.

NWFP relies for 93 per cent of its fiscal needs on outside funding including federal grants and the NHP. Delays in its payment -- which are quite frequent -- have been causing problems for the fund deficient province.

The matter of payment of the NHP to the provincial governments remained unattended till 1978. General Ziaul Haq, in his visit to Frontier in March 1978, directed that the provinces be immediately given the NHP dues.

A committee headed by A G N Qazi was formed in November 1986 which submitted its report. The report was unanimously endorsed by the NFC meeting in February 1988 and submitted to the Council of Common Interests (CCI). The CCI also approved it in January 1991.

In support of the decision, the President of Pakistan through Order No.3 of 1991 ordained that the power generating provinces would be paid NHP and that the federal government shall guarantee payment of net profits to the provinces.

For the first time a sum of Rs 6 billion NHP was paid in 1991-92. It was the year prior to restructuring and also no surcharges were levied at that time. The said amount has been capped since then despite the fact that power tariff has been increased manifold.

According to Aziz, the capped amount of Rs 6 billion has lost much of its value. "In 1991, at the time of the award, the amount equalled $200 million. Now Rs 6 billion can fetch around $74 million with the current rate of return. The amount should be increased," he said.

Adeel said the issue of capped annual installment of Rs 6 billion NHP is going to end. "We have based our claim on the AGN Qazi formula. We have put a demand of Rs 38 billion for this year in the light of increased tariff as decided by the AGN Qazi tribunal and endorsed by the ATA."

There is general perception in the province that it is not being properly compensated for the hydro-power generation. "The 81MW Malakand III HPG project, built and controlled by the provincial government, is earning the province Rs 2 billion annually while Wapda pays us only Rs 6 billions for the rest of the 4,000MWs that the province produces," an expert said on a TV show sometime back.

NWFP has great hydro power potential. According to an estimate, out of an estimated 50,000 MW hydropower potential, around 70 percent (35,000MWs) is located in the province. Former PM Zafarullah Jamali had increased the amount to Rs 8 billion but after his resignation the amount was denied.

Later, when differences on the NHP surfaced, an arbitration tribunal headed by Justice Ajmal Mian was formed to decide the issue. NWFP filed a claim of Rs 595 billion for the period of 1991-92 to 2004-05 before the tribunal.

The ATA was given in October 2006. Made in accordance with the decision of the NFC, the ATA was final and binding on all parties. It had been signed by Wapda Chairman Tariq Hamid and Secretary Finance NWFP. The Federal Secretary, Water and Power, had endorsed it on behalf of the federal government with reference to the guarantee given under the presidential order of 1991.

But when the time for payment came, Wapda went to court against the ATA. NWFP went to Supreme Court against this move and the matter is pending trial since then.

In September 2008, a jirga led by incumbent NWFP Chief Minister Hoti met PM Gilani. The PM formed a committee of experts from the NWFP government and Wapda to present its report within two months on the issue. The experts' committee was also asked to present its report on the Rs 6 billion-capped NHP amount. Gilani also promised reduction of the power tariff and an out-of-court settlement of the NHP issue.

The Frontier government has taken all parties on board on the issue. A Provincial Coordination Council (PCC) of all parties has been formed which will decide the next course of action if federal government failed to solve the matter. The PCC had expressed its disappointment over the delay on the ATA and asked the federal government to immediately implement the decision.

Former senior minister and a central leader of Jamaat-e-Islami (JI) Sirajul Haq said that at a time when Pakistan was ruled by the ANP-PPP alliance, they should be no problem in getting the issue resolved.

"But it appears there is no ground work on the issue. There is only the allocation of payment of NHP of Rs 6 billion in federal budget. There is no enlarged allocation for the purpose which creates doubts in minds," he said.

Haq added that even though the ANP-PPP alliance had opposed the arbitration tribunal as harmful to provincial autonomy, their insistence on the same now vindicated the MMA's strategy.

Responding to a question, Siraj said they would support the government in this bid. "If the arrears of the NHP are not paid, we will jointly work out our future strategy in the PCC meeting," he declared.

"They were bound to accept the ATA as it was signed by an elected government. Yes, I had personally opposed it on several grounds -- the MMA failed to include the period from 1973 to 1991 for NHP arrears. It also didn't include the interest for the award period."

Amir Muqam, NWFP president of Pakistan Muslim league (Q), said it would be a great injustice if the agreed upon amount settled by the ATA was not provided. "Our province is hit hard by militancy and terrorism. It deserves additional funds for that matter. But if additional funds are not to be given, then at least our due should be given to us. There is a golden opportunity. A coalition rules entire Pakistan. It can easily do that. ANP and JUI are part of the government and have a great bargaining position. They can dictate things they like, provided they make sincere attempts and don't run after non issues," he said.

Muqam resolved his party would fight for the rights of the province along with others on all fronts.

"The Frontier government would invest the money in various important development projects which would be made public soon. The Provincial Finance Commission would also be amended accordingly," added Khan.

"ANP and JUI should quit the federal government if it (federal government) doesn't pay the amount," urged a political worker.

That provinces should have complete financial autonomy over the resources found therein, is the call of the day. It should be done soon. Decisions like these are long overdue. Any delay in awarding the provinces full control over their indigenous resources could be catastrophic for the federation.

There are some apprehensions in the official circles on the actual outcome of the initiative. "When Wapda and the federal government are not ready to clear the Rs 6 billion annual NHP dues regularly and delay the payment more often than not, how can it be expected it will give this great amount that easily?" asked an official requesting anonymity.

firstperson

Veteran Tahir Muhammad Khan belongs to a political family of Balochistan. He was deputy chairman Senate and federal minister for Information in Z A Bhutto's government. He was put behind bars for demanding restoration of democracy during General Zia's dictatorship. Earlier, he left college teaching to take part in the election campaign of Mohtarma Fatima Jinnah against General Ayub Khan. He was first associated with National Awami Party but later joined PPP in 1969.

Khan's personality has a rare blend of politics and literature. He has to his credit a number of books in Urdu, English and Balochi and hundreds of articles. His prime interest is history and his books on Balochistan have become reference material. He has also produced a book of short stories, titled Zood Pashemaan. His other publications include Balochi Zuban-o-Adab, Islami Riyasat -- Tasawar aur Haqiqat, Balochistan Soobai Khudmukhtari Aur Qaumi Masla, Balochi Azmanak (short stories in Balochi), Balochistan Key Barguzida Shakhsiat, Customary Law-Human Rights, Balochistan Resources and Development and Religious Minorities in Balochistan. He is former Chairperson of Human Rights Commission of Pakistan (HRCP).

The News on Sunday got an opportunity to chat with a busy Tahir Muhammad Khan who is working on more than one book on different aspects of life in Balochistan. Excerpts follow:

The News on Sunday: How did you become interested in politics?

Tahir Mohammad Khan: My family has political roots. Two of my elder brothers joined the nationalist movement in British Balochistan in 1930s. Khan Abdus Samad Khan Achakzai formed the Anjuman-e-Watan Party which, along with reforms, demanded freedom. Most of the educated Pushtoon young men were behind him. The number was not so large whereas loyalist Sardars and Maliks were at the beck and call of British Rulers. Same was the case in Kalat Princely State. The Nawabs were honestly and sincerely camp followers of the Indian Empire. They had bound themselves in stringent treaties. A British agent regulated the affairs of the state and steered the foreign policies. The Kalat National Party (1932) initiated the movement for reforms and throwing away the yoke of slavery. My family having both Baloch and Pushtoon connections was associated with both the parties, whereas both the parties were associated with the Indian National Congress. My brother Mirza Faizullah Khan and Mirza Rehmatullah Khan held offices in Kalat and Kharan States. At the same time, they were office holders in these parties. This family background attracted me to politics.

I started my career as a lecturer, but in 1965, on the eve of the election of Mohtarma Fatima Jinnah (1965), I resigned from my job and joined her election campaign. At that time, a majority of youth were sympathisers of National Awami Party. So was I because, during Ayub Khan's tenure, Balochistan was governed by a draconian law -- the Frontier Crime Regulation (FCR). Therefore, open political party affiliation was not permitted under section 40 FCR. In 1969, some of us joined Pakistan Peoples Party.

TNS: What is the current situation in Balochistan? One gets the impression that the Baloch youth is demanding independence and would not accept anything short of that?

TMK: You are right. Balochistan is going through a turmoil. The Baloch Pushtoon society has opened up. The tribal ties are eroding. Bhutto gave impetus to education, opened schools and colleges almost at tehsil levels. The professionals and graduates have grown diametrically. The youth is unemployed or under-employed. There is agony of joblessness while the world around is glamorous. They can't reach the goals set for themselves. There are serious impediments including political and executive bottlenecks. This has caused disenchantment. They are just angry young men.

The growth of politics in Balochistan has not been healthy. Both British and Princely Balochistan were poor, totally undeveloped but independent. You couldn't blame anyone. But, the creation of one unit (1955) snatched everything. It made us totally dependent on Lahore. Everything rolled out from here. No one from Balochistan could reach or could get anything from Lahore. The jobs were lavishly given to people from Punjab. The development programmes could not reach the grassroots. First, the demands had increased; second, the administrative Punjabi machinery was unsympathetic; third, it was dishonest and corrupt. These factors added to miseries leading to frustration. The sheer frustration gave birth to politics of hatred. The hatred devolved and became an epidemic. Balochistan is going through those pangs. The nationalists think that the nail of neo-colonialism is so deeply engraved that it cannot be redeemed without full independence.

TNS: What are the historical reasons -- factors which led to this stage?

TMK: When General Yahya Khan restored the provinces, he did not give the same autonomy to the provinces which was taken away in 1955. During the Ayub/Yahya dictatorship, the authority of federal government increased. The concept of a strong centre was not only pleaded but enforced. It was done because the rulers thought the wave of secession of East Pakistan can only be avoided by a rigorous strong centre. This policy was defeated in the 1970 general elections. However, the policy continued in West Pakistan, mainly because the rulers thought there are separatist movements of Pushtoonistan, Sindhudesh and Balochistan. These feeling strengthened two types of movements, increasing militarisation and extending the role of Army through intelligence agencies.

At the same time, it enhanced the fear of the provinces by allowing the agencies, the Anti-Narcotics Force, the induction of Frontier Corps, the Coast Guards and civil administration to yield parallel powers in control of smuggling etc.

These uniformed forces exercised uncontrolled authority in Balochistan. They interfered in the day-to-day life of citizens which created uneasiness. They also fleeced citizens on every level. Over and above, the government also announced construction of cantonments in Gwadar, Pasni, Ormara, Dera Bugti and Kalat. It was also asserted that the existing cantonments will be strengthened. This created threat and fear among the people. The politicians capitalised on these existing fear factors. This has promoted the old, prevailing apprehension -- that Pakistan by means of militarisation intends to capture the mineral resources of Balochistan. This mindset activated the youth, women and nationalist forces.

TNS: There are complaints of serious human rights violations, torture and humiliation of people?

TMK: Yes. That is why this independence movement is gaining momentum. The policy of picking, torturing and killing of the activists at the hands of the agencies has given birth to the feeling of revenge. This, in fact, is a reaction to the use of force. This has now seeped into women and children as well.

TNS: Militarisation in Balochistan has created all political problems. How can more militarisation (of people) solve its problems?

TMK: The first military action was taken in Kalat in 1958. It was extended to Marris and Bugtis in 1962 and continued up to 1969. The third action started in 1973 and continued till 1979. But in the thinly populated mountainous Balochistan, the military operation could not achieve one percent of its objectives. Hence, operation is not the solution.

Now the issues are purely political, which cannot be resolved in any other manner except through dialogue and negotiation.

TNS: Can Balochistan survive as an independent state?

TMK: No economic study is undertaken by the locals, nor is there any data with us. The proponents claim that gas, expected oil, copper, marble, tin and nickel are the resources which could maintain Balochistan. But all these activities require 30 years to develop. What about these 30 years? International trade i.e. Gwadar and other parts need another 40-50 years. These are capital-intensive projects, require articulate negotiation and more concessions. Can the new leaders of Balochistan achieve this? It is a mere hypothesis.

TNS: How do you look at the situation in Balochistan in the regional context?

TMK: Pakistan's strategic importance is thanks to Balochistan. Balochistan has 750 kilometres of coastline in the Arabian Gulf. It is located on the mouth of Strait of Hurmz. (An independent) Balochistan creates an alarm for all small states of Gulf. It might pose a threat for Iran, because of its Baloch entity. An equal number of Baloch lives in Iran where the Baloch nationalism has gained roots. The most important aspect is the rivalry between USA, Russia and China for control of oil and gas of Caspian Sea. Balochistan and its coastline is the only option of trade and access to international markets. Hence, it has an immense strategic importance not only for itself but for Punjab as well. Without Balochistan, Punjab is a landlocked area like Afghanistan, which reduces its international efficacy. The creation of independent Balochistan will provide new dimensions in the region.

TNS: Can there be peace here without peace in Afghanistan?

TMK: Peace in Afghanistan has no nexus with the struggle in Balochistan. The dream of an independent Balochistan is over 80 years old. The Baloch are in search of their identity. They possess territory, they own resources, they have their language and culture, they take pride in their history, unconquered by any one. The creation of Muslim Pakistan was a romantic division; that dream is over. Therefore, the classic nationalism is once again reemerging.

TNS: There is accusation of outside help, particularly from India through Afghanistan?

TMK: There is no direct testimony of any foreign assistance for the movement. The presence of Brahamdagh Bugti is considered an evidence of assistance by the Indians through Afghanistan. It may be true to the extent of keeping the pressure on both India and Afghanistan. But both of them may not like to involve themselves when other international players feel any vacuum.

TNS: Don't you think mere military might will not solve the issue of Balochistan?

TMK: The active presence of Army and civil armed forces in Quetta and other places is an exhibition of brute force. But, at the same time, it is a sign of weakness because the militants attack those forces without any impunity. It is seriously eroding the myth of the military's power.

TNS: Quetta is like a cemented fort with a lot of checkposts. Its cantonment does not seem to be a part of the city while people complain about humiliation, army excesses, target-killings and missing persons. Comment.

TMK: The humiliation has been a manner of governance for years. But recently, the FC and the police have indulged cutting moustaches of people, taking off and throwing away regional caps, cutting trousers with scissors, and abusing the people for being Baloch. The reaction, perhaps, was not to the government policy, but to the expression of force by the militants. However, such measures alienate the common Baloch who is not with the militants.

TNS: How do you see the future of the Baloch Liberation Army? Has Baloch tribal leadership, such as Brahamdagh Bugti, any future?

TMK: Bramadagh Bugti is not a Baloch leader. He has yet to establish his credentials. But he is commanding a group of militants, inspired by Nawab Akbar Khan Bugti. They are effective in Dera Bugti District which has been the constituency of Bugti. The tribal leadership yields influence in its tribal territories but all of them do not subscribe to the separatist/militant movement.

TNS: What is your take on Nawab Akbar Bugti's murder?

TMK: Akbar Khan Bugti has become a classical war hero. He is revered and idolised as a great fighter and a brave soldier of the Baloch. Poems and short stories have been written about his martyrdom. He has left permanent imprints on the Baloch history.

A history of duplicity

The right-wing's proverbial mission is alive and well. With the ever reliable Jamaa't-e-Islami (JI) in the lead, the rightists in the media, educational institutions and political organisations both within and outside the parliament are going out of their way to drum up hysteria over the 'Americanisation' of Pakistan. Their objectives were outlined most poignantly on a JI banner publicising the recently held 'referendum' on the Kerry-Lugar bill which stated: Roos ko bhagaya tha, ab amrika ko bhagainge (We forced the Russians out and now it is the Americans' turn).

In other words, the non-militant rightists, regardless of their token opposition to their militant brethren, are in total agreement with the agenda of the jihadists. As a sworn anti-imperialist, I am always likely to sympathise with anyone who opposes the Empire. But I have only contempt for the JI and others of its ilk. After all, if the JI was part of the unholy alliance that fought the Russians, then it was the Americans who were the alliance's moving force. It is indeed the mess that was created by the Americans, the Pakistani security establishment and the religious right that has brought us to the brink. Things can change in politics, but the duplicity and the inherently anti-people nature of the religious right cannot.

Besides, the hugely influential rightist lobby in this country is anything but anti-imperialist. The right promotes xenophobia of the worst kind by insisting that anything to do with 'America' is necessarily inimical to 'Islam'. Anti-imperialists do not hate any culture or people per se, and indeed call for the unity of all humankind against any kind of aggression. By consistently harping on about the cultural specificity of America, the right actually obscures the reality of modern American imperialism which is political, economic and cultural.

The right's strategy at the present time attempts to build on a deep anti-imperialist sentiment within Pakistan (as indeed there is throughout the third world). The left opposed the Pakistani alliance with the United States from the time that the first major security pact was signed in 1954. This principled opposition continued through the next three decades, and was particularly acute during the Zia dictatorship. The right was a willing accomplice of the state and imperialism throughout the Cold War.

There is an argument that the end of the Cold War has dramatically changed things, and that a fundamental and irreconcilable contradiction has emerged between political Islam and the liberal West. But this by now banal thesis of the 'clash of civilisations' completely marginalises political economy, the primary bone of contention in the Cold War era of ideology. In other words, 'culture' is being propagated as the major dividing line of the 21st century, with the implication that the questions of capital and class that dominated the 20th century have been definitely resolved.

But this is pure obfuscation. The world is more acutely divided between haves and have-nots than ever. And if there is a rise in millenarian Islamic ideology then this is at least partially because the right has projected itself as the voice of the oppressed (even while offering vague 'culturalist' solutions to what are material oppressions). The right has been helped by the insistence of the Empire's ideologues on making 'Islamic civilisation' into the new 'seen' enemy of the 'free world'.

It is thus that the JI in the mainstream and militants outside of it have become identified as the primary opposition to the American agenda in Pakistan. It is a sad reality that the left has fragmented and is unable to expose the hollow sloganeering of the right-wing. But it is also a fact that many within progressive circles seem to have taken as truth the notion that the 20th century politics of capital and class is now an anachronism and that 'culture' really is the new global flashpoint.

In any case, there is no question that the religious right is a retrogressive political and social force and that it cannot steer Pakistani society out of the multiple crises that currently engulf it. Indeed it is the need of the hour that the religious right be challenged on the political front, and not just as a military foe which is the incumbent strategy. If progressives can do nothing else, they should continually remind the public of the history of complicity of the right with imperialism.

In doing so, progressives will necessarily set themselves apart, both from imperialism and from the right. And this is the only logical and principled stand. Neither is it possible to condone the heinous bomb blasts that kill civilians in Pakistan's cities nor the aerial bombings in FATA and Malakand that do not discriminate between 'terrorists' and ordinary people. There can be no question of accepting the logic of one set of killings and rejecting the other. This is what Munawar Hasan and Hilary Clinton do. Both claim that their 'culture' is superior to the other. Progressives must argue that no 'culture' is superior to any other and that the common enemy of all cultures is oppression and exclusion of all kinds.

If this third option does not emerge, and the imagination of people is not moved by an alternative worldview, it can be expected that the religious right will maintain a major public profile, especially given its infiltration into so many spheres of public life. The Empire's growing presence in Pakistan and the wider region will allow the right to continue creating alarm about the impending destruction of Pakistan (even though it is the right itself which has historically welcomed Empire into the region).

The right wants Empire to give it back the historical importance that it enjoyed until 2001. It is willing to negotiate for this share; only a small sub-section of the right is actually committed to fighting the Empire indefinitely. Even this small sub-section will recede into the memory if and when genuine anti-imperialist resistance comes to the fore.

swat

Swat makes interesting copy, both for electronic and print media these days. The world community seems to have perceived the people of this historic area as barbaric, vandals and religiously bigots. Few locals and non-locals have written about Swat but a comprehensive and holistic study of the area is still awaited.

The valley of Swat has a great importance in the annals of world history. Human development owes much to this historic area, a fact that is well-reflected by its various historical names such as 'Suvastu' (having good dwellings) of Rig-veda, 'Soastene' of Greeks and U-Chang of the Chinese pilgrims of which Ujjana (Pali) and Uddiyana (Sanskrit) are cognates.

If Swat is contextualised against its 3,000 to 4,000 years long history, it will appear as the land of significant social, cultural, religious and political developments. And all of this will rightly be attributed to its geographical location as a crossroad and melting pot of different people and cultures.

For a proper understanding of the history of Swat we must take into account all the historical developments in the area such as migrations, invasions and proselytism. From these phenomena stem the subsequent syncretism and progress in culture, religion and politics of Swat.

Its central position in Asian continent destined Swat to witness the incomings of the Aryans, Persian domination, Greeks' invasion, Mauryan rule, Kushan suzerainty, Huns' overlordship, supremacy of Turki Shahi and Hindu Shahi and, lastly, the invasion of Mehmud of Ghazni. Mehmud's subjugation of Swat resulted in the migration of Afghans from various areas of modern Afghanistan. The Yusufzai tribe ousted these Afghans in the first quarter of the 16th century. The Yusufzais still dominate the valley to a large extent but other ethnic groups also make integral part of the Swati social structure/ set-up.

All of these developments in terms of migrations, invasions and missionary activities have rendered Swat a home of different moral, philosophical, political and religious influences. Thus, the fabric of Swati society represents the geniuses of myriad of people and their worldviews.

In the story of human development migration plays a crucial role. "It might even be documented that human progress, no matter how this phrase is interpreted, is closely correlated with such movements." (J. J. Mangalam) Similarly, wars and invasions also bring different people in contacts. Needless to say, the importance of proselytism or missionary work in this regard cannot be ignored at all. And all of these attributes make Swat an attractive locale of study for historians, archaeologists and anthropologists. But, unfortunately, all the works of history, archaeology and anthropology todate conspicuously seem bereft of highlighting the process of syncretism, something which if given due attention will help in the proper understanding of the past, present and even future of Swat.

Currently, Swat is experiencing a wave of terror, extremism and violence. The situation is analysed in different ways. Most commonly, the crisis in the area is connected to the religious stereotype that since Pakhtuns are extremely devoted to religion, therefore whatever is happening in Swat is the direct outcome of that form of Pakhtun religiosity.

Some other analysts, confidently, interpret the mess as a class war and present orthodox Marxist arguments in support of their position. Still others see the spate of violence in the valley in the backdrop of Afghan issue and the presence of the NATO forces in Afghanistan.

But all of these interpretations can safely be waved aside if the historical developments in Swat were kept in view especially the valley as a scene of a mélange of different cultures in the human drama. There is, in the historical tradition, no place for religious extremism and the apartheid psyche or intolerance towards "otherness" in Swat.

Swat has smoothly assimilated people of different backgrounds be it religious, cultural, political or regional throughout its history. The traces of this phenomenon are most apparent both in material and non-material culture of the valley.

In the art and architecture of the valley Graeco-Roman, Hindu, Buddhist, Zoroastrian and Islamic influences in addition to the native element are most conspicuous, making it a valued heritage of Swat. We must not lose sight of the importance of this point as it points to the element of syncretism and cultural space in the development of civilization in Swat.

In the superstitions of the area, a bulk of Zoroastrian, Hindu and Buddhist traces can easily be found. There are many superstitions about oor (fire) in Swat that reinforce Zoroastrian influence on the valley. Most of the villages still bear the names, which have pre-Islamic origin (for instance "Muthra-Pindai." Maitreya-Pindi meaning village of the Maitreya, according to the Buddhist holy scriptures Maitreya is Future Buddha, in the vicinity of Saidu Sharif). Some other stories that are now generally associated with Islam clearly seem as distorted versions of the pre-Islamic religiosity of the area. This, again, reflects the cross-cultural historical amalgamation in Swat.

Another watershed example of cross-civilisational confluence in Swat is the origination of Vajrayana school of Buddhism in the valley. This sect mostly represents the reconciliation of many Hindu, Buddhist and Tantric traits, an obvious example of assimilation giving Swat the status of the most holy place on earth throughout the Tantrayana/Vajrayana Buddhist world. It testifies that Swat has, historically, the capacity of adaptation, an attribute that leads to progress and cosmic unity.

This interpretation of Swat's history aims to assert that Swat per-se has adapted itself to change whether it is related to religion, politics or culture. And here lie the secrets of Swat being an earthly paradise.

Now the question that how did the historic Swat eclipse into the current tenor of violence is to be dealt with in the context of systematic and imposed obscurantism, a clear-cut but at the same time, an indiscernible story. It starts with the Walis of Swat (1917-1969). There is no doubt that they were often progressive in the affairs of statecraft but still they could not get rid of some undesirable temptations.

In the first place, the Walis introduced religion, for all practical purposes, into the traditional secular politics of Swat and, thus, added a new dimension to the secular national culture (Pakhtunwali) of the Swati Pakhtuns. Secondly, the Walis gradually deprived the Swatis of freedom of expression and freedom of choice (in Fredrik Barth's words "free choice and contract"). Exemplary punishments were inflicted upon political dissenters. Such an obscurantist tendency, definitely, led to stagnancy in the context of political consciousness and development of the people of Swat.

As a matter of fact, this callous obscurantism reached its zenith with the merger of Swat state into Pakistan in 1969. An already politically-numbed and religiously-betrayed society drifted into a new wave of extreme suppression and obscurantism. This unfortunate story, at last, came down the pike in the wake of Afghan Jihad and Zia-ul-Haq's ideologically obsessed regime and its subsequent aftermath.

Prior to these unfortunate dark phases, the socio-cum-religio-political history of Swat valley depicts rhythmic pluralism, tolerance, harmony, and syncretism. Let me call it a mythical cosmos, a new perspective about Swat and the story of Swat.

Correlates of climate change

There is a growing realisation that human activity has become the agent of large-scale climate change. Actions taken in climatic oblivion have led to the depletion of the O Zone layer, global warming and acid rain. For the first time in the history of the world, concentrations of carbon dioxide in the atmosphere have crossed the permissible limits of 350 parts per million (ppm), and stand at 390ppm today. Such an increase in carbon emissions, which catalyses global warming, means that our planet is undergoing an irreclaimable distortion.

Every now and then scientists and researchers make shocking disclosures. The US Geological Survey has predicted that reduced ice floes in the Arctic will cause two thirds of the world's polar bear population to be extinct by 2050. Peter Wadhams, the head of the department of Ocean Physics at Britain's Cambridge University, declared recently that the Arctic ice cap would vanish completely by 2040.

If nature were to do poetic justice, it should be the environs of developed countries, which should be impacted by climate change, since they are responsible for 72percent of global carbon emissions. But research suggests that Mother Nature threatens to punish all and sundry without exception. So, the punishment will not fit the crime and a country like Pakistan, which adds nominally to carbon emissions, will be hit hard by climate change. A report by Sir Nicholas Stern conducted under auspices of Intergovernmental Panel on Climate Change (IPCC) has affirmed that climate change will exacerbate Pakistan's water, food and energy insecurities and have an adverse impact on human health and marine ecosystems.

A Climate Change Vulnerability Index, calculated by Maplecroft, which is a Britain based firm, rated Pakistan as the 12th most at risk country in the world from climate change This classification should come as no surprise because the fingerprints of climate change and its correlates have been evident for a long time. The declining Indus, the growing cases of dengue fever, the torrential rains, which lashed Karachi this summer and the transformation of the prosperous delta village of Keti Bunder into a wasteland awash with saline water from a protruding sea, are all signs of a degenerate environment.

Definite predictions have been made about the nature and extent of the change expected to occur in Pakistan. Temperatures are likely to ratchet upwards over the next century by 3-5oC, with the possibility of the northern areas warming more than the Southern, in both summer and winter. Warmer weather will mean extended seasons of malaria and dengue activity in the North. But the implications of a temperature rise extend beyond the fact that we will have sweltering summers and more cases of malaria and dengue. Firstly, monsoonal rainfall will become more erratic and uneven with the Northern regions expected to receive 20percent more rain than the southern regions, which will experience a 5percent deficit in rainfall. Since our agriculture is finely tuned to the monsoons, variability of rainfall may lead to a fall in crop yields, thus adding to our food security woes.

Secondly, as the Indus River builds up in the Himalayas, the recession of Himalayan glaciers will lead to a significant change in its flow. The glaciers have already been melting at a faster rate than the world average as a consequence of global warming. Initially, glacial melting will increase the annual runoff but eventually the melting will run out its course and when the evaporation effects of higher temperatures begin to dominate, the river flow will be permanently decreased. The change in the dynamics of the Indus hydrological system will coincide with an increase in the frequency of drastic events such as flooding and glacial outbursts. Since the flow of the Indus has been declining over the years, further fluctuations in the flow will negatively impact domestic and industrial water supplies and hydropower generation. Because the Indus is a major irrigator of our fertile plains, a lasting water shortfall will raise the likelihood of our grain belts turning into dust bowls.

Thirdly, the ongoing environmental degradation in the Indus delta will be exacerbated by climate change. Already, the delta landscape and the lives of its 150,000 inhabitants have changed beyond recognition. Human activity and urbanization have disturbed the ecological balance, damaged the habitats of commercial fish and shrimp species and obstructed the vast network of creeks, which yielded bumper rice crops. The mangrove forests, which covered 260,000 hectares of coastal areas and provided the best protection against extreme weather, have now shrunk to 80,000 hectares. The forecasted temperature rise will increase the Arabian Sea level and thus erode beaches and estuaries on which fisheries are dependent; and as freshwater flow down the Indus decreases, the remaining mangrove forests will also disappear. In this event cyclones and rainfall will become more intense and frequent .We should assume that the devastating cyclones of 1999 and 2007 were a mere foretaste of a more serious future to come.

Fourthly, Karachi runs the serious risk of becoming another Keti Bunder. This sprawling urban centre, which lies in a low elevation coastal zone, will become vulnerable to flooding due to a rising sea level. This is most worrying since Karachi generates over 60percent of the country's revenue and is home to 18 million people. Furthermore, a dwindling Indus and a burgeoning population will mean that the domestic water demands of Karachi's residents will become increasingly unmet.

Although there is no easy panacea for the perils entailed by environmental degradation, we cannot simply resign ourselves to the worst. Remedial measures, which will not only halt the damage but also confer other benefits, can be taken. For starters, environment and economics should be merged in decision-making. Currently, most of our energy comes from coal and petroleum combustion. Though coal fired plants are a major cause of carbon emissions, it is impossible to make an overnight switch to renewable energy. However, we can reinvent energy use along environmentally safer lines by specifying a maximum allowable rate of emissions per megawatt-hour of electricity generated or sold, or requiring a percentage reduction in potential emissions. Provisions should be made in this regard before production begins at Thar Coal Project.

Slowing or stopping deforestation would be a monumental achievement towards limiting global warming and checking the rate of species extinction. At present only 3percent of Pakistan's land area is under forest cover. It is heartening to note that attempts at re- growing some of our forests have already been undertaken. Pakistan recently set the Guineas world record for tree plantation, when 300 fishermen planted 541,176 mangrove saplings in one day. The World Wildlife Fund conferred upon Pakistan "Leaders of the Planet" award in recognition of the people's efforts to conserve natural resources.

Finally, our environmental agencies and the Ministry of environment should be given more power and capacity to affect government policies. Their budgets and mandates should be enhanced. If we succeed in reforming our policies, there is a possibility of us catching up with the increasing rate at which our natural capital is being depletion.

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On October 18, 2009, a powerful bomb exploded in Iran, killing 49 people including the elite revolutionary guards. The suicide attack took place in the city of Pishin in the province of Sistan-Baluchestan, the eastern-most province of Iran which is bordered by Pakistan's Balochistan province to the east. According to reports, the attack has been carried out by Jundallah, a radical group that aims to fight against the Shia theocracy of Iran; given the group's presence in Pakistan, Iran has come down harsh on Pakistan asking to put Jundallah's leaders behind the bars.

Single-track policy?

While this may come as a shock to many, the fact remains that Iran had been repeatedly complaining about Jundallah's presence in Pakistan for its terror activities inside Iran since last year. While the small-scale presence of these attacks might have missed the television audience, the government channels were regularly contacted for taking action against the group. To be fair to the government, it has been trying to allay Iran's fears by alerting the state apparatus against the terror group.

Despite government's efforts to address the concerns, no one seems satisfied at all. Not least, Chaudhry Nisar Ali Khan who, while speaking on the floor of the House, lamented about the modern times when a country like Iran which used to "provide strategic protection" to Pakistan would level charges against Pakistan. Fair enough. Nisar has also asked government to shun what he called as the "single-track foreign policy."

One can allude that the reference of "single-track" policy is Pakistan's allying with United States after 9/11 in the on-going war against terrorism. The truth is that if there ever could be Pakistan's single-track foreign policy, it would be obsession with India.

As known, after the Soviets left vanquished in the late 80s, Pakistan found an opportunity against using the jihadists against India. Strategically, there can be a debate over the efficacy of the actors but as was seen later on, the control over non-state actors cannot be guaranteed. Although the state thought them subservient to their orders, these actors were inter-connected with other actors who the state didn't want to patronise. A case in point is the networked relation between numerous militants groups, some of which primarily harm state's internal security.

Pakistan's usage of them maybe a smart move of concealment against India and aimed at expanding influence in the region, but for jihadists, anyone not professing their version of Islam was condemned. Even the state, society, and the soldiers of Pakistan are not pardoned, as is verified by the latest events.

Neglect of Iran

Iran is a theocratic state, practicing the Shia version of Islam. When the revolution of 1979 took place, it sent ripples across the region with more and more states donning a garb of religion. Politically, Iran sent shock waves to neighboring countries; as is the case with every state which gets distinguished from other states, Iran came to be associated as a country with Persian, Shia identity which was threatening the Arab, Sunni identity in the region. Just immediately after the revolution, Iran and Iraq went to war; more so, Saudi Arabia saw a regional rival in the shape of Iran.

Back then, Pakistan, with a Sunni-majority population, was getting closer to Saudi Arabia which was then also a major financier in the war against Soviet Union. Included in their fold was US, for which the Iranian revolution still remains a symbol of anti-Americanism. At the same time, the Shias in the region became politically-charged after the revolution.

The worst to be hit from this wave and regional setting of power was Pakistan, which saw an erosion of its religious fabric. Pakistan became a battlefield for proxy wars in the shape of Sunni and Shia militant groups. This is a classic example of how immediate foreign relations can affect you.

Iran was increasingly getting cornered when it saw the rise of Taliban in mid-1990s. When 9/11 happened, it was one of the first countries to condemn the attack. Iran couldn't find any opportune time than to find US going against both the Taliban in Afghanistan and Saddam Hussein in Iraq. Having removed its adversaries from power, Iran once again rose to power. Today, Iran sees the global powers and neighboring states trying to tame down Iran's resurgent mood. Pakistan's relations with Iran, despite what is being said in public, journeyed through a bumpy ride, on and off.

Nationalism or Islamism

The latest is the sudden presence of Jundallah group, which is reported to have carried out the attacks the other day. Jundallah is a militant group which claims to be fighting for Baloch-Sunni Muslims in Iran, a country largely dominated by Persian ethnic group who profess Shia Islam. However, it is important to make a distinction between fighting for the sake of ethnicity or that of religion (sect in this case.) If one were to compare the suicide tactic of Jundallah as well as the religious message they relay, one would call it more of an Islamist movement than a nationalist movement.

The distinction is important to avoid pitfalls. In neighboring Pakistan, the province of Balochistan is populated by Balochis whose expression of Baloch nationalism was intense during the previous regime of Musharraf; till this day, the desire for Baloch autonomy rings loudly and the issue of Balochistan is arguably the greatest challenge the federation of Pakistan is facing right now.

If you identify the problem primarily as being manufactured by external states, you tend to look towards the problem as external instead of an internal mess that popped out of state's wrong policies in the past. But this is not the end. If you start to believe that Jundallah is a Baloch nationalist movement causing trouble in two states, you are not only mixing two separate issues but living with an ignorance which resorts to inaction by not rectifying the mess.

This is not to say that Jundallah is purely a pan-Islamist group; Jundallah's Sunni-Balochi roots are similar to Taliban's Sunni-Pashtun roots. Just like it is absolute nonsense to associate Taliban as being an expression of Pashtun nationalism, so is the case with Jundallah. Far from it, nationalists -- be it Pashtuns or Balochs -- have always admitted the presence of Islamists in their neighbourhood.

It is important to make distinction for the two states to address their part of the problem. While Iran's Shia theocracy alienates Sunni Muslims, who may find recluse within Islamist groups, the problem in Pakistan is purely of rights. Despite what hawks may want us to believe about the Baloch provincial issue, the two need not be abutted.

How do the above issues connect with each other?

Iran's finger-pointing towards elements of state in Pakistan comes from a neither-sour-nor-sweet relations in the past when Pakistan supported an ideology which didn't go with Iran's own ideological moorings. The "single" focus was curtailing the influence of the neighbour in the East. Worst of all, there is a tendency that the recent attack in Iran is being wrongly interpreted leading to a justification of that single focus. Pakistan has been paying its blood since the 1980s due to regional and global power imbalances; it is time that the state pursues a policy which is resistant enough not to be negatively influenced by changes in the region.

The writer is a graduate student, International

Costs and benefits of RTAs 

The concept of Regional Trade Agreements (RTAs) runs counter to the Most Favoured Nation (MFN) principle, which lies at the heart of the multilateral system put in place by the World Trade Organisation (WTO). The MFN principle stipulates that any favourable treatment given by one member of the WTO to another, such as lower tariffs, shall be extended to imports of similar products from all other member countries. However, despite being a departure from the MFN principle, RTAs are allowed by the WTO under Article XXIV of the General Agreement on Tariffs and Trade (GATT), which forms part of the broader WTO Agreement.

The principal reason for this exception or departure is the belief that regionalism will prove a catalyst for globalisation. In other words, integration of economies within a region will presumably pave the way for global or multilateral integration. It is maintained that the best way to effect trade liberalisation is to do that in stages. Once a country opens its market to goods and services of other members of a trading bloc, it will facilitate opening of markets to countries outside the bloc. A related argument is that of trade creation, which takes place when less efficient or competitive domestic suppliers are replaced by more efficient or competitive suppliers within the RTA.

But do RTAs necessarily support multilateralism? The answer can be given by looking at the various factors that lie at the bottom of RTAs creation. To begin with, regional integration is an easier option to pursue than global integration. Economies used to protectionism may find it more difficult to open themselves to the world than to a small group of regional partners. In case regional integration proves fruitful, integration on a wider basis is likely to appeal more and also appear less painful. It is in this sense that regionalism can be a catalyst for multilateralism.

Two, regionalism may yield a higher degree of integration than possibly multilateralism in a shorter span.

Three, geographical and cultural proximity with other countries of the region may give a country competitive edge, which regional integration can strengthen.

Four, traditional rivalry may also be a catalyst for RTAs. Hence, when the USA, along with Canada, entered into an FTA with Mexico (called North Atlantic Free Trade Agreement or Nafta), the EU responded by making an FTA with Mexico. 

Finally, regionalism can be a shield against having to compete in sectors where more competitive or efficient firms are located outside the region. This can be done by having a free trade within a region but imposing high tariffs on imports from outside the region. One result is that efficient suppliers outside an RTA are replaced by less efficient or inefficient suppliers within an RTA. This is called trade diversion. Another outcome is that instead of non-discriminatory trade liberalisation as envisaged by multilateralism, discriminatory liberalisation gains currency. It is here that regional blocs have an adverse effect on multilateralism and thus pose a challenge to it. The strength of this challenge depends on MFN tariffs, that is, tariffs applicable to all WTO countries on an across-the-board basis. The higher the MFN tariffs, the larger the gap between them and preferential or RTA tariffs--technically called margin of preference--and thus the more serious is regionalism's challenge to multilateralism.

The emergence of RTAs as a potent factor on global trade scenario has special significance for Pakistan, which is one of few countries who are not a member of a vibrant RTA. At present, Pakistan is a member of two RTAs: South Asian Free Trade Agreement (Safta) and ECO Trade Agreement (Ecota). In addition to Pakistan, Safta consists of India, Sri Lanka, Bangladesh, the Maldives, Nepal, Bhutan and Afghanistan. The agreement, which came into force on January 1, 2006, provides that members will reduce their tariffs to 0-5 percent by December 31, 2015. Safta is yet to come of age as intra-Saarc trade accounts for less than 5 percent of the global trade of the eight member countries. The major reason for this is the low volume of trade between Pakistan and India, the largest economies and trading nations in the region.

Though formal Pak-India trade (the two countries have informal trade of more than $3 billion a year) has increased from $236 million in 2001-2002 to $1.95 billion in 2007-08, it still constitutes less than 1 per cent of the global trade of the two countries! In total, the share of Safta or Saarc countries in Pakistan's global trade is less than 5 percent. Pakistan has not even granted MFN status, a basic requirement under the WTO, to India. On its part, India maintains high tariffs and non-tariff barriers on products of export interest to Pakistan. More than any other factor, the volatile character of Pak-India political relations makes one skeptical about the success of Safta.

Ecota was signed in 2003 by five out of 10 countries of the ECO region namely Pakistan, Iran, Turkey, Afghanistan and Tajikistan. It provides that members shall bring down tariffs on nearly 80 percent of goods in eight years. However, tariff preferences under Ecota have yet to take effect. Intra-ECO trade accounts for only 6 percent of the total trade of the members, while the share of ECO countries in Pakistan's global trade is merely 4.60 percent.

On bilateral level, Pakistan has inked Free Trade Agreements (FTAs) with China (operational since July 1, 2007 building on an EHP of January 2006), Sri Lanka (operational since June 2005), and Malaysia (operational since January 2008). Pakistan has also preferential trade agreements (PTAs) with Iran (operational since September 2006), and Mauritius (operational since November 2007).

In the wake of EHP/FTA with China, Pakistan's exports have risen from $354 million in FY05 to $685 million in FY08 by 94 percent. However, during the same period, Pakistan's imports from China have increased from $1.84 billion to $4.69 billion by 155 percent. In the wake of FTA with Sri Lanka, exports have gone up from $156 million in FY05 to $215 million in FY08 by 38 percent. During the same period, Pakistan's imports from Sri Lanka have increased from $45 million to $62 million in FY08 also by 38 percent. Pak-Iran PTA has been instrumental in pushing up Pakistan's exports from US$147 million in FY05 to US$214 million in FY08 by 46 percent. However, during the same period, Pakistan's imports from Iran have increased from $242 million to $556 million by 130 percent. Thus though Pakistan's bilateral FTAs/PTAs have contributed to increase in exports, imports have also gone up and in case of China and Iran by a much higher margin.

One may draw the conclusion that bilateral or regional trading arrangements have not much benefited Pakistan either because RTAs (Saarc and ECO) of which Pakistan is a member are not vibrant or because of supply-side constraints. Exporters have not been able to make use of the enhanced market access. This underscores two things: One, multilateralism may be a better option for Pakistan than regionalism. Two, increased or even duty free market access cannot be of much use unless the supply-side situation is improved.

Email: hussainhzaidi@gmail.com

The past few days have witnessed much self-praise by the bosses of Federal Board of Revenue (FBR) on all fronts -- revenue collection, widening of tax base, recovery of arrears, voluntary compliance, reform process and what not. They have claimed "satisfactory performance" (sic) during the first quarter of the current fiscal year to convince the foreign masters at IMF that Pakistan deserves more lending. This is the same propaganda that Shaukat Aziz and his team used to indulge in to hoodwink the nation that "economy is more vibrant than ever before and a new era of higher growth has just started".

The reality is that great tax potential of at least Rs 4 trillion is not even considered by FBR -- obviously it requires bringing the ruling elite into tax net and relieving the poor from unnecessary tax burden. This is not desirable in today's Pakistan due to criminal culpability of the ruling elite comprising civil-military bureaucracy, inefficient-cum-corrupt politicians and greedy businessmen.

According to official spokesman of FBR, the department received 12,82,118 returns/statements for tax year 2009 as compared to 10,72,742 during Tax Year 2008, reflecting growth of 20 percent. The FBR collected around Rs 4 billion tax along with the returns/statements during tax year 2009 against Rs 2.5 billion in tax year 2008, reflecting a growth of 58 percent. It is admitted by FBR that even after "great efforts" (sic) less than 1.3 million Pakistan have filed income tax declarations for tax year 2009.

In Pakistan, the number of mobile users, who pay more than Rs100,000 as annual bill, is not less than 20 million. Why have they not been brought in the tax net? Does FBR need any further proof to show how inefficient and ineffective it is? FBR stalwarts cannot at least, convince us of their "wonderful performance" (sic) by just maneuvering and playing with figures. The FBR is taking credit of extra 209,376 returns, which it admits is under voluntary compliance, but is completely silent about failure to compel 20 million persons to file their tax declarations despite the available data that they earn taxable incomes.

Financial wizards and tax managers sitting in the Ministry of Finance and FBR have been persistently claiming that tax base of Pakistan is disappointingly narrow and majority of the people do not pay income tax. Actually, the reality is completely opposite. The people of Pakistan are the most heavily taxed (rather over-taxed) nation in the entire Asian region as per official facts and figures. As far as tax base is concerned, not only total taxable population but also millions of those having below taxable incomes are paying taxes at source or through voluntary filing of returns. In most of the cases, tax deducted is the full and final discharge of liability; hence the taxpayers do not file statements (required under section 115(4) of the Income Tax Ordinance, 2001), which has created a wrong impression that our income tax base is narrow.

For a long time now, FBR has been apologetic (specifically before the IMF and the World Bank) that total income tax payers (registered) in Pakistan are just 1.5 to 2.0 million in a population of 170 million. This is a myth. The reality is that since July 1, 1992 all commercial electricity consumers (including about 3.2. million retail outlets in urban areas) are paying minimum income tax of Rs 60 per month whether their income is chargeable to tax or not. People earning interest on bank deposits -- their number is not less than 15 million -- pays 10 percent mandatory withholding tax irrespective of their quantum of income.

The total number of commercial electricity consumers in Pakistan, according to Economic Survey of Pakistan 2008-09 is about 9 million. The FBR in its Year Book 2007-08 admitted that tax collection from telephone/mobile and electricity users and transport owners was over Rs20 billion. Total number of mobile and landline telephone users, subjected to withholding tax, in the country, is in excess of 60 million -- yet FBR claims that our tax base is narrow. The reality is that FBR is incompetent -- it has failed to book all of them on tax roll. Had it been done, we could today have boasted of nearly 20 million taxpayers.

The people of this country are accused of not paying income tax; whereas the reality is that even a petty shopkeeper in a village (whose total income is much below the minimum taxable limit of Rs100,000) is paying tax as high as Rs720 per annum. On the contrary, the big absentee landlord of his village, who is earning millions by merely leasing out orchards, is not paying even a single penny as personal income tax.

Out of total population of Pakistan, 43.1percent are below the age of 15 years -- overwhelming majority of them will not have taxable income. Rural labour of 40 million earns meagre income. Thus, the total income tax paying population of having taxable income of Rs100,001 can safely be around 25 million. The FBR is taxing all these and even many others having incomes below taxable limits. The poor are paying not only indirect taxes but also income tax at source under various provisions of the Income Tax Ordinance, 2001 -- section 148 to 156A, sections 234 to 236. Thus in reality the people -- except the ruling trio -- are over-taxed. In return they get nothing. The successive governments have failed to fulfill even their basic obligation of safeguarding life and property of people, not to talk of providing them basic facilities of health, education, water and other civic amenities.

It was the duty of FBR to allot National Tax Numbers (NTNs) to all those who paid tax under sections 148,149,150,151,152,153,154,155,156, and 233, 234 and 235 of the Income Ordinance, 2001. Had the FBR just issued notices for filing of return to all commercial electricity consumers, mobile and land-line users (paying bill of Rs 100,000 or more) and vehicle owners, today we would have over 20 million registered taxpayers The FBR did not bother to prepare a database of such persons though millions of rupees were spent (rather wasted) on so-called automation.

The FBR is guilty of criminal negligence in reporting the incorrect figures regarding income taxpayers in Pakistan and not compelling those having taxable income to file returns. Its performance is pathetically abysmal. It is just thriving on withholding taxes and voluntary payment -- constituting 92percent of total collection. The contribution of field officers [collection on demand through investigation or audit] is just 8percent of total collection. It proves beyond any doubt how unproductive this organisation is. The crumbling, inefficient and corrupt tax apparatus is the root cause of the present scenario. The tax officials persistently squeeze and penalise the existing taxpayers on the one hand but on the other join hands with and protect the big tax evaders -- massive over and under invoicing is not possible without their criminal culpability. The small business houses, already heavily taxed through withholding tax mechanism are victims of their highhandedness. It is high time that the FBR should put its own house in order.