need to do more than just react
agricultural inputs, why?
The News on Sunday: You have recently authored a draft paper that argues for retaining a "national role" in health. Coming in the wake of implementation of the 18th Amendment what does it essentially seek and do you think there is still time for it?
A rare breed
An amended, rationalised HEC needs to stay in place
By Raza Rumi
The 18th Amendment approved by the Parliament in 2010 signified a new era in Pakistan’s troubled federalism. Given our turbulent constitutional history, the new governance arrangements approved by all parties and federating units settled for a leaner centre and addressed long-standing demands of provincial autonomy. But the implementation of this amendment has been slower than expected, largely for reasons of capacity both at the federal and provincial levels. Despite the constraints, the Implementation Commission has delivered fairly well. Thus far, ten ministries have been devolved. Five ministries -- local government, special initiatives, zakat & ushr, population welfare and youth affairs -- were devolved in late December 2010. The recent batch of the federal ministries includes: ministries of education, social welfare and special education, Tourism, livestock and dairy and culture.
In recent days, a new controversy on the devolution of the Higher Education Commission (HEC) has plagued the implementation process with respect to the 18th Amendment. Television channels have aired the views of technical experts as well as the usual suspects who rant on every talk show on almost every subject under the sun, be it defence, culture, or cricket. The move towards the devolution of the HEC’s powers and functions to provinces has been construed as another move by the semi-literate and ‘corrupt’ politicians to thwart the degree validation process, which has been part of our pseudo political discourse. Such an argument is pretty lame, as the rule to have a degree to be eligible for an election has been done away with. The Musharraf scheme of a grand HEC, BA-holding legislators and ‘controlled democracy’ obviously failed in 2008 when the electorate rejected his party and sent representatives who sent him home.
Most of what has been said on the HEC constitutes a plethora of comments, hysterics and ‘opinions’ on the subject, which has sidetracked the debate altogether. From a national discourse on fostering federalism, we are now arguing whether HEC was an effective body or not? There have been sporadic protests -- overplayed by the media -- and random statements of Vice Chancellors who seem to be vacillating from one position to another. Furthermore, former head of the HEC, the talented Dr Atta-ur-Rahman, has not helped matters either. His direct invitation to the Army to step in and rescue the HEC is simply problematic. What do the armed forces have to do with this issue: they are legally not in charge; and by an educationist to make such wild calls, we can easily surmise that Pakistan’s democracy remains a sham, especially when it comes to the educated elite.
Sanity, at last:
Najam Sethi on his TV show argued for a reasoned debate on the HEC issue and emphasised that devolution of powers or functions to the provinces cannot be compromised. In a follow-up tweet on the Internet, he added: "HEC debate should be how to minimally retain its best federal and international aspects while gradually transiting to maximally efficient devolution." Dr Pervez Hoodbhoy, otherwise a fierce critic of the HEC, has also alerted that a sudden dissolution of HEC will result in a ‘free fall’, due to a lack of technical capacities in the provinces and the important work that the HEC was undertaking. Similarly, Dr Pervez Tahir, former Chief Economist of the country, has also argued the HEC case in his op-eds published in an English daily. (8 April, 2011). Skeptics have also argued that we may lose nearly half a billion dollars of foreign aid due to be directed towards higher education reform in the country. Feisel Naqvi has made an important point that specialized regulation of higher education requires advanced capacities that are missing in the provinces.
Devolution, a must:
Conversely, the passionate proponents of total devolution of HEC -- unsurprisingly from the smaller provinces -- argue that this body had not created a revolution despite the sevenfold increase in its budget during the Musharraf era. Instances have been cited where the HEC failed to regulate many institutions, especially those related to the armed forces and had let many malpractices continue in the country. One firebrand MNA from Awami National Party opined during a-discussion, "I am convinced standards of education in general and higher education in particular will improve when HEC is devolved to the provinces. I think we should all welcome the change and extend support to the provincial governments to ensure the devolution process is effective and smooth." Dr Ayesha Siddiqa, the bold critic of Pakistan’s security establishment has also questioned the efficacy of HEC discussions and supported its full devotion.
Unpacking the issues:
Centralisation of HEC planning and resource management is the issue here, not the regulatory aspects per se. What needs to be understood is that the provinces, as the revenue generating units, want full control over the HEC budget and spending priorities. This is a fair demand given that we have a decentralised governance framework and the National Finance Commission Award of 2010 has increased the provincial shares in national revenues. It would be senseless for a body such as the HEC to fund laboratories in universities from Islamabad when education is a provincial subject. Therefore, we need to separate the two issues: the regulatory powers of the HEC which determine quality control, and the actual execution of ‘schemes’ to use the favored parlance of Pakistan’s public sector development process. Therefore, we have three aspects to address: a) standard-setting and quality control; b) foreign education and aid management; and c) physical works and improvements in the facilities within universities.
The Council of Common Interests (CCI) formulates the policy in part II of the Federal Legislative List contained in the Fourth Schedule of the Constitution as amended in 2010. Section 7 of this list states that "coordination of scientific and technological research" is a federal function. Similarly, section 12 is clear that the federation is also empowered to set "standards in institutions for higher education and research, scientific and technical institutions" along with ‘education’ with respect to "Pakistani students in foreign countries and foreign students in Pakistan" (sec 17). Thus, the ultimate arbiter of this issue is the Council of Common Interests -- the apex mechanism in the Constitution, which mediates federal relations.
Given this clear prescription in the Constitution, the HEC devolution can be phased in a manner in which functions such as quality assurance, foreign scholarships, and donor-financed programmes ought to be retained under federal control. All other functions can swiftly be devolved to the provinces, as the momentum to change Pakistan’s governance cannot be halted. This is a rare opportunity, which cannot be squandered. Therefore, an amended, rationalised HEC needs to stay in place.
Learning from past
A major wave of devolution came about in the wake of Musharraf’s devolution reform in 2001-2002. Admittedly, that was done in haste under a particular authoritarian agenda, but there are lessons inherent in this experience. Overnight transition did not work out well as the districts and tehsils did not have required capacities or resources; and often faltered in discharging their functions under the new governance architecture. We are not known for managing change as it is induced through military ‘revolutions’, executive diktats and foreign advisories. Managing change is a sophisticated process that needs to be carefully deliberated and planned. The HEC is no exception. All of its good work, notwithstanding many failures, cannot be undone in one stroke. A hasty devolution will result in a crisis of sorts as the provinces are not yet ready with the requisite capacities to manage universities and deal with specialised problems that are associated with such oversight.
Which way now?
The way forward therefore, comprises four major steps. First, the unbundling of HEC mandates and functions needs to take place and considered by CCI as well as the implementation commission tasked with devolution of powers to the provinces. Second, regulatory and policy issues need to be kept federal in a single institution instead of diffusing them to the Cabinet Division (validating degrees), Ministry of Foreign Affairs (international scholarships) and Ministry of Inter-provincial coordination (administration of the National College of the Arts), which would read like a recipe for disaster. These federal ministries have generalist cadres of civil servants whose record of handling their normal work routines is unenviable to say the least.
Thirdly, to fulfill the demands of constitutional governance, the budgets and projects can be transferred to the provinces, which have sufficient capacities to handle physical works and even management through their higher education departments or wings. Lastly, a detailed programme for capacity assessment and development with the provinces needs to be designed immediately and implemented in the next 12 months whereby, some of the regulatory functions can be handed over to the provinces by April 2012. Thereafter, a smaller and more efficient HEC can operate under the Cabinet Division carrying out the essential standard setting, internal and external coordination and quality assurance and monitoring functions.
he writer is a policy adviser based in Lahore. He blogs at www.razarumi.com and manages webzines Pak Tea House and Lahore Nama Email: firstname.lastname@example.org
For an egalitarian society
In Turkey, you cannot have a religious party in power
By Zaman Khan
Dr. Yesim Arat is Professor in the Department of Political Science and International Relations at Bogazici University, Istanbul, Turkey. Having done her PhD from Princeton University, Department of Politics, in 1983, Yesim has worked on the question of women’s political participation and democracy. Her scholarly works include books, Patriarchal Paradox: Women Politicians in Turkey and Rethinking Islam and Liberal Democracy: Islamic Women in Turkish Politics. She has also contributed numerous articles in academic journals, including International Political Science Review, Political Psychology, Social Politics Journal of International Affairs, and Third World Quarterly. She is presently provost of her university. While in Lahore recently to attend the International Conference on Women, Religion and Politics, she presented a paper on "Religion, Politics and Gender Equality in Turkey: Implications of a Democratic Paradox". She argues that a more threatening development for women is the propagation of patriarchal religious values sanctioning secondary roles for women through public bureaucracy, educational system, and civil society organisations. The News on Sunday caught up with Dr Arat. Excerpts of the interview follow:
The News on Sunday: What inspired you to take up the cause of women’s rights?
Yesim Arat: My mother was a working woman. She was a professor in a medical school. I always saw her doing what the feminist call double shift. I had to write a paper and I started thinking about double shift and became interested in women issues. I did my PhD on, "Why women are not in politics in larger number" in 1983.
TNS: What were your findings?
YA: My findings pointed to patriarchal reasons. There were economic and social issues, even for those who were able to surpass these. Men did not want women to be in politics and women were not able to get into parliament which would enable them to be included in parliament in a large number. I interviewed men too. Men would say it is not an issue and that we would love to have more women.
There were biases against women being in politics even when there were hosts of other reasons beginning from the carrier pattern. There were old parliamentarians educated in university. All the educated women were not able to fulfill the demands of career lines that parliamentarians had. Now it is changing but, frankly, the number of parliamentarians has not increased that much since I was doing my research at that time. It was 4 percent then, now it is only nine percent. So numbers are very small. We have a parliament of 550 members and we now have 48 women in it.
TNS: As a feminist, how do you look at the revolution?
YA: I think it was a very important breakthrough for women. It provided them opportunities that they did not have. I think the introduction of civil code lifted many restrictions that traditional interpretation of ‘sharia’ have for women, did away with polygamy, unilateral divorce, inheritance, unequal inheritance rights for women. It also gave women opportunities for education, engaging in public life.
TNS: Are women, boys and girls given equal property rights in Turkey?
YA: Yes, because it has a civil code, not a religious code.
TNS: How do you look at the present regime in Turkey and the status of women?
YA: I think after the Kemalist regime and other political developments, many problems in the country, including inequality between the centre and periphery were not resolved. I think the new government is the emergence due to inability of the secular-minded political groups being unable to solve some of these problems. I am concerned about some of the steps this government has taken or some of the results of politics this government has implemented. I think it has serious implications for women exercising their rights.
TNS: Would you give some examples?
YA: Women’s economic participation in Turkey is very low now. It is something like 22 percent. The government is actually encouraging women to become mother of at least three children and encouraging them to be mothers rather than coming up with policies to allow them to have opportunities. Women can be encouraged and given opportunities to work outside the house. There is very little opportunity to do that. Orthodox interpretation of religion encourages women to be mothers and wives and there is a very strict division of labour between men and women. In educational institutions teachers are recruited from within the religious political parties in power. These teachers encourage students to go to religious schools and stay in dormitories run by religious communities. Turkey is a secular country. Being a secular country the directorate began advocating that good Muslims cover head and good Muslims don’t use perfumes and things like that. This interpretation was not in the constitution. If you are a secular country, your tax-payers’ money should not be channeled to promote religious worldview. These are problematic issues.
TNS: Why, in your view, people use the channel of religion to redress their grievances?
YA: I am not saying the political party in power in Turkey is an orthodox religious party. Absolutely not. In Turkey, you cannot have a religious party in power. There is a constitutional prohibition. But the society chooses the party in power that has Islamic roots because the other parties were unable to respond to people’s problems. I think the military coups also played a crucial role in this process that prevented the development of secular political parties. Had these coups not taken place, the secular political parties would have been stronger. Military coups undermined the development of secular political parties.
TNS: So, you are for political reforms, saying the military should not intervene in politics?
YA: Absolutely. I am against military interventions but I don’t want to argue what should be done. There is a series of court cases public prosecutors have initiated. They should not be doing that because they are just causing problems. Military is being given an opportunity to intervene to control opposition forces. They are taking journalists into custody and detaining them. I am very much against that. They say we can’t intervene in the justice system but of course the justice system right now has been totally subverted and higher court of justice is really under the control of the government. So many journalists have been detained and they are waiting for justice to be delivered, waiting for more than two years in prisons.
TNS: What is your comment on Turkey’s education system?
YA: I know the influence of ‘course guide books’. There have been changes and there have been issues because the ‘course guide books’ encouraged a particular teacher to use discussions to promote a religious view. The government has increased quota for the number of students to religious schools.
TNS: Don’t you think these steps would lead to religious extremism?
YA: I don’t know. That could be saying a little too much. Religious extremism is something else. Right now there seems to be a slow penetration of conservative elements. That does not necessarily bring extremism. Extremism is a different scenario. In Turkey, Islam has not been all that violent.
TNS: How do you see the European Union looking into these developments?
YA: The European Union is a remote possibility. We all know that France and Germany do not want to give Turkey membership of the EU. They have double standards. They have been very unfair. They have changed rules of the game.
TNS: What is your first impression about Pakistan?
YA: When I was doing PhD I had a very good Pakistani friend so I have heard a lot about Pakistan. I am very excited to be here. Pakistan is the only real friend Turkey has. Unfortunately, I did not have the time to see many places of Lahore. I have been surprised to see such a security apparatus in Lahore. I was told that 30 per cent of Lahore is military’s property. It was striking for me. Turkey had a very extensive military presence. But 30 per cent of Lahore is a striking figure.
Many of those writing in newspapers and pontificating on TV shows have very little awareness of the conditions of the masses
By Aasim Sajjad Akhtar
When my weekly deadline for this column approaches I rarely find myself struggling to come up with something to write about; there are so many political and economic developments in this land of the pure on a daily -- let alone weekly -- basis that there are always many possible subjects for a weekly column. Over the past week, for example, the controversy over devolution of the Higher Education Commission (HEC); the release of the latest ‘Afpak progress report’ and reactions to it; the reopening of the Zulfikar Ali Bhutto ‘judicial murder’ case; and the latest suicide attack on the Sakhi Sarwar shrine in DG Khan could all feature as the centerpiece of any commentary on Pakistani state and society.
Indeed, a substantial public debate is already underway on the question of HEC and the future of higher education in Pakistan (although there is far too much tit-for-tat posturing going on). Likewise, the ZAB case has always polarised opinion in this country and over the past few days it has become obvious that little has changed in this regard.
However, the point I wish to highlight -- one that I have highlighted on numerous occasions in the past as well -- is that too much of what qualifies as public debate in Pakistan is reactive and all too often the deeper sociological, economic and political questions that need to be asked are simply glossed over. In other words, the trend is for a particular issue to suddenly erupt into the public spotlight -- usually on account of a particular decision of the powers-that-be -- to be followed by a short and spasmodic ‘debate’, and then eventually a rather anti-climatic end. The dust then settles on the matter until the next round of reaction is precipitated.
If this is a function of the poor state of our intellectual resources on the one hand, then on the other it is also a reflection of the dominance of professional intellectuals over more organic ones. By professional intellectuals I mean (following Gramsci) those that are designated the role of thinkers and shapers of public discourse. They are paid for their troubles and their intellectual output helps sustain the dominant mode of thinking and politics (alongside the unequal and unjust distribution of resources) in society. Organic intellectuals are those that reflect the real, living sentiments and perceptions of particular constituencies. They do not necessarily have professional affiliations and they do not claim to represent all segments of society.
A contemporary example might help illuminate both the difference between these two types of intellectuals and the shallowness of public debate to which the lack of organic intellectual input gives rise. Last summer’s floods were widely recognised as having caused immense destruction across the length and breadth of Pakistani society. Many professional intellectuals raised alarmist scenarios and continue to lament the conditions of those affected whilst simultaneously arguing that faith in public institutions has been irreparably shattered.
While the stand-alone organic intellectual hailing from, say, Kot Addu, or Dera Allah Yar would not necessarily disagree with the claim that the floods caused great human suffering, the subsequent prognosis might appear quite startling to those of us who otherwise have very little contact with these regions and their people. Many local observers noted at the time of the flood that, while the situation would not be uniform by any means, many agricultural lands would actually be fertilised by the floodwaters (or more specifically by the sedimentation that the floodwaters brought with them), and that the doomsday scenario of famine was way out of line with on-ground realities. And so it is that a number of the worst flood-affected regions are now expecting a bumper wheat crop.
In similar vein, the refrain of professional intellectuals in Lahore, Islamabad and Karachi that faith in public institutions has been destroyed by the weak and inefficient response of the government to the suffering of the flood affectees is tempered by the argument of the organic intellectuals who claim that the Pakistan People’s Party (PPP) in particular has actually consolidated much of its traditional vote in rural areas in the Siraiki belt and Sindh by issuing substantial cash transfers to flood affectees. Add to this the fact that a relatively high food support price for growers has been maintained in the face of donor pressures, and one can conclude that, even if the general perception of state institutions is far from positive, the PPP has not suffered anything like a beating to its popularity from the fallout of the floods.
Is the PPP committed to the kind of social transformation that -- some would argue -- it propagated in its heyday in the 1970s? No. If there were a political party on the scene that was committed to socialist upheaval it might be the case that the PPP would be highly unpopular in its traditional strongholds. But that is neither here nor there, because there is no such party on the scene at present. I am simply calling attention to the fact that informed local observers in the peripheral regions of Pakistan -- or those I am terming organic intellectuals -- deserve to be taken much more seriously and the reactive and shallow debates led by our professional intellectuals need to be taken with a grain of salt.
I believe that the gulf between professional and organic intellectuals was not so acute a couple of decades ago, when many individuals educated in fancy English-medium schools and universities actually perceived themselves to be part of a wider social and political movement for change. While there was always a powerful intellectual elite closely implicated in the machinations of state and imperialism, the counter-elite had significant influence and was organically connected to ordinary people. Things have changed -- alienation is rife, and many of those writing in newspapers and pontificating on TV shows have very little awareness of the conditions and psychology of the masses whose fate they often lament. Indeed, all too often the attitude is patronising and ordinary people are either invested with too much agency (e.g. everyone thinks like Mumtaz Qadri) or none at all (the poor are easily manipulated by ‘feudals’, sardars, etc. etc.).
Even where professional intellectuals who call themselves progressive overtly associate themselves with progressive causes, a certain cultural elitism rears its ugly head. For instance, over the past few months a plethora of cultural and political events have been held to commemorate the 100th birth anniversary of Faiz Ahmed Faiz. Even as an admirer of Faiz, I have been amazed at the lack of interest demonstrated by the urban intelligentsia in intellectual and artistic output that emanates from the peripheral regions. Ziaul Haq succeeded to a significant extent in suppressing the tradition of intellectuals that is synonymous with names such as Faiz, Eqbal Ahmad, Feroz Ahmed, Hamza Alavi and the like. But Pakistan did not become a veritable cultural wasteland.
There is substantial cultural production taking place in Sindhi, Siraiki, Balochi, Pashto and even Punjabi. The fact that parochial tendencies have become more and more pronounced in even progressive intellectual and political circles in recent years is explained in large part by the fact that too many of our professional intellectuals are confined to ivory towers and have not played the role they could have in bringing together all of the cultures and politics of resistance that exist in this country. Things can change, and they must, for the doomsday scenarios to give way to a shared vision for progress in which we all proceed as equal partners.
Between the debt and deficitMoney financed through debt and spent unwisely will surely be a burden for our future generations
By Syed Bakhtiyar Kazmi
My claim to fame is accountancy and since changing horses in midstream is never a winning strategy; my views correspond to what some would refer to as an accountant’s tunnel vision. Notwithstanding, one of the key strengths we accountants develop through rigorous training is the ability to balance numbers.
Generally focused on historical data and sometimes involved with future projections, double entry accounting and balancing debit and credit, including budgets, comes naturally to us. However, we remain conscious that balancing anything, let alone numbers, is never an easy task. Hence our fascination with the annual budgets and our admiration for those who balance it!
Kudos to the country’s financial team for coming up with a revised budget which facilitates IMF’s return to the negotiating table. This time around, the resolve to restrict the budget deficit at around 5.3 percent is going to be a challenging task, considering the limited ability to manoeuver. For a layman, however, the acceptable level of deficit will always be a mystery. A cursory search on the internet reveals that deficit is around 8 percent for a lot of developed nations, with the US and UK over 10 percent. In most of these countries national debt as a percentage of GDP by far surpasses Pakistan. So, why does IMF want us to restrict national debt and budget deficit?
That deficit results in inflation is a myth and empirical evidence as yet has not conclusively established the relationship. Borrowing to meet government spending is a substitute for enhanced taxation and the impact on inflation in either case may even be equitable. On the other hand, (although this reminds me of US President Harry Truman who wanted to hire a one-armed economist) deficit financing through borrowing is considered a growth strategy which funds the investment gap. The fact that we have reduced the development budget suggests that we have compromised economic growth.
Learning from the motto, cherished by businessmen, that risk is best taken with "other people’s money", we should be borrowing as much as we can. The corporate world has established that debt is always cheaper than equity and as long as future cash inflows allow, a preferred option. Fundamentally, equity has an opportunity cost, money not invested in one project is always available for the next project. Debt is surplus money available with lenders which needs to be profitably employed. A perfect match!
On a personal level, in the absence of consumer finance, quite a few of us may not be driving cars and probably be living in rented houses. The other option is to save money all your life to buy a house, and considering inflation, this is definitely the riskier option. To own a house is everybody’s dream and borrowing today against future salary inflow is always better.
On a country basis, debt is also payable through future cash inflows which in this case are taxation revenues. Deficit in essence is deferment of taxation which is consequently financed through debt and repaid through future tax revenues -- one of the reasons why most of our current tax revenues are utilized towards debt repayment. Compared with 2009, Pakistan’s tax revenue in 2010 grew by about 15 percent; this suggests that we can borrow more.
Interestingly, inflation in a manner of speaking is also, even if indirectly, revenue for the borrower. While debt remains constant in absolute terms, time ensures that it loses value. Without getting into the theory of interest rates, inflationary pressures require that money is spent even before it is earned. With inflation around 15 percent in Pakistan everything gets dearer with time. The resultant appreciation in asset valuation, tangible or intangible, more than make up for the debt burden.
I for one don’t subscribe to the view that debt is burdensome for our future generations. In theory, if national debt is invested in revenue generating assets than on the balance the future generations are better off. It is only when funds are spent on current consumption or wasteful projects does debt become burdensome. Is reduction of deficit and debt then an acknowledgement that our investment was targeted towards non-productive activities?
If that be the case, why leave the balance development budget of Rs180 billion? Considering the corruption scandals which have erupted over the recent months in relation to public spending, it would appear more appropriate to restrict spending to key government functions.
There is already a strategy to reduce the number of ministries and devolve certain functions to the district level which are expected to generate savings and efficiencies. May be we could go a step further and restrict government spending to security, existing debt obligations, judiciary for maintaining property rights and law and order and bare minimum functions such as finance, foreign affairs, petroleum, power, etc. Imagine the savings!
Continuing with this flight of fancy, the savings can then be passed on to the private sector in the form of reduced taxation. This should, in turn, boost consumption as well as savings creating the necessary impetus for growth. In the absence of government borrowings, private credit will increase. Necessary infrastructure projects and public facilities can then be contracted out under public private partnership where the developers are allowed to charge rent to recover their investments, which already is a key initiative in the developing nations. Profits ensure more work and growth with consequent less consumption and everybody lives happily ever after.
Unfortunately, the real world has already gone through these motions and concluded that this kind of utopia alas, is but a dream. Excessive regulations and enhanced government intervention have evolved over the years primarily because the rich get richer at the expense of the masses. Case in point is the recent sub-prime fiasco which has enabled regulators all across the world to dictate to the private sector for genuine causes. Is this the beginning of the end of capitalism? Only time will tell. What has been clearly established is that government’s responsibility for critical public utilities and infrastructure cannot be outsourced.
Retracing our steps, it is, however, established that debt is a critical resource for project finance at a personal, corporate and country level since it allows much-needed funds for projects which otherwise would not be initiated in the first place. It can also be concluded that budget deficits and national debt are directly linked to government-spending. The less you spend the lesser the deficit and consequently lesser the borrowing. Finally, increased taxation also has an inflationary impact with an additional consequence of depriving the private sector of capital necessary for growth.
It all boils down to the quality of government spending and consumption. Deficits are not bad, as long as they play a catalytic role for economic growth. In the absence of complete information, the benefit of the doubt vests with the country’s financial manger on what should be the deficit and the need to enhance taxation while reducing development budget. One can only hope that it was a conscious decision to compromise economic growth.
What, however, needs proactive management is government spending. The positive sign is the reduction in current spending. A necessary strategy is the selection of development work. Projects should not be initiated or pursued on political compulsions. The development plan needs to focus on projects necessary for economic growth either through infrastructure or through education. I have always been curious on the policy behind enticing private investment for power generation at extremely high costs, would it not have been cheaper under public ownership? In either case, the consumers pay the cost, so why contract debt and equity at such high returns.
Considering that more than 60 percent of the population is under the age of 25, why should the development budget not be significantly directed towards education? It is not the quantum of development but the quality. Money financed through debt and spent unwisely will surely be a burden for our future generations. It is not about deficit, spending is where we should focus.
The writer is a chartered accountant based in Islamabad
The mechanism of taxing agriculture products is going to make things even worse for the farmer
By Huzaima Bukhari and Dr Ikramul Haq
The Pakistan People’s Party made pledges to follow Zulfikar Ali Bhutto’s legacy on the eve of his 32nd death anniversary on 4 April 2011. This of-repeated rhetoric needs to be actually reflected in action. For example, on March 15, 2011, the government levied taxes on agricultural inputs burdening the poor farmer even more rather than imposing personal income tax on feudal lords.
Those at the helms of affairs of PPP these days are not even aware of the historic decision taken by Zulfikar Ali Bhutto of taxing "agricultural income" through Finance Act 1977. The law, passed by Federal Parliament, was thwarted by the dictator, General Ziaul Haq, who overthrew a legitimate government on July 5, 1977. Zia not only used judiciary to hang Bhutto but also forced this country back into the dark ages. He and his successor, General Musharraf, ably protected the feudal lords (including mighty generals-turned-landlords receiving lands as gallantry awards or otherwise.).
Successive governments after Zulfikar Ali Bhutto -- military and civilian alike -- did not deem it necessary to remove oppressive taxes levied on small farmers by our colonial masters. They have faithfully protected the colonial heritage and even Benazir Bhutto during her two terms in office did not bother to implement any revolutionary measure of taxing "agricultural income" as was done by her illustrious father in 1977. This shows the departure in ideological mind-set of PPP overtime, especially after the party was hijacked by Asif Ali Zardari and his cronies.
The feudal class sitting in the Punjab Assembly is not at all interested in collecting agricultural income tax. The Punjab government is least pushed about implementing the existing Agricultural Income Tax law in the province. The chief minister criticises the federal government for levying regressive taxes, but makes no effort to tax the rich and mighty by reintroducing estate duty (now a provincial subject after 18th Constitutional Amendment) and capital gain tax -- progressive taxes abolished by their political mentor General Ziaul Haq.
The Punjab Assembly passed a resolution on 31 March 2011, asking the federal government to review its decision of imposing 17 percent tax on agricultural inputs through a Presidential Ordinance.
Would the Punjab Assembly, dominated by feudal MPAs, inform its voters why many of its honourable members are not paying agricultural income tax? Under the Punjab Agricultural Income Tax of 1997, as amended from time to time, no effort was made until 2000 to impose income tax on total income earned from this source.
A face-saving device was introduced to levy yet another tax on acreage basis at different rates in respect of irrigated and non-irrigated lands. The Chief Minister has never bothered to tax the rich absentee landlords of his province -- many of whom dominate PML-N. His government could have surplus of billions of rupees, had the law to tax the Khosas, Gilanis, Qureshis, Tiwanas, Sardars, Chaudharis, Maliks -- just to mention a few -- been implemented.
The imposition of 17 percent sales tax on agricultural inputs will have disastrous impact as the overall contribution of agriculture sector in GDP growth may decline by 2pc-3pc. Certainly, the growers would suffer Rs70-80 billion losses as a consequence of this levy. The decision was taken without considering its negative effects on the overall agricultural productivity of Pakistan. The poor growers would have to pay heavily for agricultural inputs, for e.g. fertilisers, pesticides, tractors etc. after the exorbitant levy of 17 percent sales tax on these items.
The Chairman of Agri-Forum Pakistan in an interview claimed that the decision would not only be detrimental to the agricultural sector but could lead to more poverty in rural areas, where a majority is undernourished or starving in the wake of devastating floods.
About 80,000 tractors are purchased by the growers annually and after imposition of sales tax, they would have to pay Rs8 billion more. Rs300 billion are required each year to purchase fertilisers and now the growers would need additional Rs50-55 billion.
For pesticides, an additional amount of Rs7-8 billion would be spent. Contribution of the agriculture sector to GDP growth is 24 percent, which may decline to 19-20 percent after this tax. With extra burden of Rs70-80 billion on the agriculture sector, the total number of people living below the poverty line is expected to increase from 80 million to 110 million.
In the aftermath of the imposition of 17 percent sales tax on agricultural inputs, there was sharp surge in the price of flour from Rs32 per kg to Rs40/kg, rice from Rs95/kg to Rs150/kg, eggs from Rs62 per dozen to Rs100 per dozen, goat meat from Rs500/kg to Rs600kg, beef from Rs250/kg to Rs300 per kg, chicken from Rs240 per kg to Rs300/kg.
Undoubtedly, there would be multiple negative impacts on the fragile economy of Pakistan with an overall decline in agricultural productivity that would lead to an increase in unemployment -- at least 5 million tenants may be unemployed in the long run. This bleak scenario is certainly not the legacy of Zulfikar Ali Bhutto.
The PPP government in Sindh is keen to collect sales tax on services (which it should as its constitutional right) but has no desire to tax the filthy rich. Would this nation be informed as to how much tax is paid by the Chief Minister Qaim Ali Shah, Makhdoom Amin Fahim and many other feudal-cum-pirs of Sindh on their agricultural income?
Vested interests in the establishment -- civil-military complex -- and parliament are not ready to change these structures as this would disinvest them of essential tools to exploit and control the masses.
If we want to make Pakistan an egalitarian society, we need to strive for empowering the masses and the government, not just a few people. This requires surrendering power to levy and collect taxes at the local level. Decisions would then be taken by the residents -- through elected council members -- and not bureaucrats sitting in Islamabad or provincial capitals in palatial offices oblivious of the ground realities.
The elected members would be directly answerable to the residents. Local courts should be set up where justice is provided at the people’s doorsteps rather than requiring them to go through expensive and long-drawn litigations under the conventional system. We need to move quickly and decisively -- go for massive reforms in all spheres. If the PPP is sincere to Zulfikar Ali Bhutto’s legacy, it should imitate the processes he established, instead of scarring his image as a great benefactor of the people.
The writers, authors of many books and tax advisers, are Visiting Professors at Lahore University of Management Sciences (LUMS).
"Constitution provides space for national role in health sector" -- Dr. Sania Nishtar is Founder and President Heartfile
By Farah Ziaand Ather Naqvi
The News on Sunday: You have recently authored a draft paper that argues for retaining a "national role" in health. Coming in the wake of implementation of the 18th Amendment what does it essentially seek and do you think there is still time for it?
Dr. Sania Nishtar: The paper recognises the political and constitutional imperative of provincial autonomy and the need to devolve functions, including health, but it also draws a distinction between health systems functions that can and should be "decentralised" and others that need to be "centralised" even in health systems that are fully devolved in federating systems. It refers to the latter as "national functions in health". Five functions have been described in the paper. Constitutional mechanisms through which these functions can be retained federally in the post-18th amendment scenario have been discussed. Even after the amendment, the constitution provides space for the federal level to assume responsibilities for most of these functions. The only exception is drugs and where the constitutional prerogative to retain the federal role, without the consent of the concerned provincial legislature is less clear. Institutional modalities of change have been discussed in each of the health systems domains.
Yes, I think that there is still time to factor the paper’s recommendations into consideration. Definitive decisions will be taken before the June 2011 deadline, and I am of the opinion that there are some very reasonable people in the Implementation Commission who would be driven towards evidence-based decisions.
TNS: Your paper seeks to keep health information, and disease security, international commitments and drug regulation and certain aspects of human resource regulation, etc, in the federal domain. Why can’t these be dealt with at the level of provinces?
DSN: There are reasons specific to each of the areas. Federating countries need to have centralised systems for health information so that common tools, indicators and standards can be developed and maintained. Pakistan, in particular, needs to enhance its capacity in this area in view of the country’s abysmal performance in complying with IHR 2005, a WHO-negotiated global inter-governmental treaty.
Pakistan is signatory to many international commitments. These range from negotiated formal conventions, treaties, and rules, with binding stipulations to others that only have a moral binding, such as resolutions, charters, statements and declarations, codes of conduct, strategies, etc. Each of these has been signed by the federation of Pakistan and not its individual units -- the responsibility for follow up action corresponds. Other contractual commitments enable resource mobilisation through bilateral and multilateral donors and international partnerships, such as the Global Alliance for Vaccines and Immunisation, the Global Fund to Fight AIDS, Tuberculosis and Malaria. Currently, donors are dealing with just one level. There is neither institutional capacity within the provinces to take on that responsibility nor the inclination on part of donors to expand their points of engagement. Lessons from devolving the Higher Education Commission are instructive in this regard.
On the issue of drug regulation, three aspects merit consideration. Intellectual Property Rights Regulation will not be affected, as it is already a subject in the FLL. Product, quality and price regulation are now envisaged as provincial subjects. However, there are many arguments against devolution of regulation in this area.
Drugs and related products are regulated centrally in almost all countries of the world including federations. Notable examples are the USA, Germany and Switzerland. In other parts of the world such as in the Gulf Cooperation Council countries, ASEAN, Latin America and the European Union, regulation is moving from national to regional models. The move to decentralise drug regulation in Pakistan would, therefore, be a unique experience in contrast with the internationally prevailing trends. Pakistan would become the first country in the world to devolve drug regulation. This would entail unnecessary duplication in the face of capacity and resource constraints. It would do nothing to address endemic collusion in this area, which is the core problem and may even exacerbate existing problems. Inter-provincial trade norms guaranteed by Article 151 of the Constitution obviate the need to devolve drug regulation in any case.
TNS: What is the concept of a Health Division? And how is it going to remove the systemic challenges, which in your words plague the current ministry of health?
DSN: The core objective is to retain a federal structure, with capacity to serve national functions in health in a coherent manner without the fragmentation of institutions, which is inevitable in some of the currently mooted options. Ideally, the Ministry of Health should not be abolished as it is symbolic of the significance of health at the national level. However, since ministerial abolition has become symbolic of provincial autonomy, the next option should be explored. The idea of a Division is in conformity with government of Pakistan’s Rules of Business (Article 99), according to which a Division is responsible for the conduct of business of the federal government. It is also in keeping with the spirit of times vis-à-vis devolution of powers, as converting a ‘Ministry’ into a ‘Division’ would mean stepping down hierarchically. As "health" is not a legislative subject per se, in the Constitution, the creation of a ‘Division’ will not be regarded as unconstitutional.
Different options have been discussed for housing this division. Creation of a new Ministry of Human Development in line with recommendations of the National Commission for Government Reform (NCGR) 2005 is one option. Others have also been discussed in the paper.
TNS: Are you arguing for some kind of a regulatory role for the federal government and what is the position of the 18th amendment regarding this?
DSN: Not across the entire regulatory spectrum. Regulation in the health sector can be relevant to quality, price or numbers in the domain of health services delivery, medical education, human resource and medicines and technologies. Regulation of service delivery and medicines and related products stands devolved after the 18th Amendment. The former is a positive change as it can be used as a tool to improve quality of services in provinces and districts. However, devolution of drugs and medicines has created a problem since the policy rationale for retaining the federal role in this area is strong. As regards human resource and medical education, several entries in Part I and Part II of the FLL enable the Parliament and the federal government to retain a role in these areas.
There is a degree of ambiguity in terms of how the Constitution can be interpreted with respect to regulatory functions. On the one hand, Entry 6 in Part II of the FLL gives the Parliament the prerogative to legislate in order to create federal regulatory authorities. However, the subject for which a regulatory agency is created may have been devolved by the 18th Amendment, in which case the jurisdiction assumed and exercised by a regulatory authority established under a federal law in respect of a matter which has otherwise been clearly devolved to the provinces (e.g., through omission of subjects in the Concurrent List), may be open to question.
TNS: Please elaborate in layman’s terms, for our readers what health information systems are?
DSN: These are institutions that give us information about disease and health system status so that we can take stock of the present situation, tackle problems, and plan ahead. Pakistan has many health information systems in place. The Pakistan Demographic Surveys conducted by the Federal Bureau of Statistics (FBS) are the country’s system of registering vital events. FBS also conducts Pakistan Social and Living Standards Measurement Surveys, and houses the National Health Accounts cell. The Health Management and Information System and the District Health Information System collect information from health facilities and report them to the Ministry of health. The biostatistics divisions to which hospitals report does likewise. Additionally, there are 14 infectious disease surveillance systems. Cancer registries and research in academic and think tank settings also form part of Pakistan health information landscape. However, there is fragmentation of this system, in particular of infectious disease surveillance. Absence of Integrated Disease Surveillance and Response creates problems in the wake of disease security threats.
Recommendations of the paper present health information as an important federal responsibility, and elaborates how Constitutional provisions potentially enable the function to be retained federally. However, it also makes an equally strong case for reform in this area.
TNS: What does the analysis state about devolving service delivery responsibilities in health and how does it see that interplaying with the local system of governance?
DSN: The analysis is fully supportive of devolving service delivery responsibilities in health and regards it as being complementary to the democratic process. It does caution though that decentralising Pakistan’s health system would be a complex process and that a strong administrative infrastructure, managerial capacity of local institutions, technical expertise at the planning level, and effective accountability mechanisms, and an appropriate balance of authority and accountability are prerequisites of successful devolution. In this regard, current uncertainties in the design of local government system, lack of accountability, and endemic graft should be brought to bear.
TNS: What about budgetary allocation; do you think devolution to provinces will improve the budgetary impact?
TNS: Devolution of fiscal responsibilities is one of the policy tools to improve budgetary impact, but there are other more important considerations. Ingraining transparency in management of resources, being the foremost. There is also the need to improve returns on spending, and enhance the quality of expenditures, equity in utilisation, and effectiveness of targeting.
The interview was conducted via email.
Fatehyab Ali Khan did not seek anything at the cost of his principles and that was the difference between him and others
By B. M. Kutty
Fatehyab Ali Khan was a remarkable person. It is about six months since he said the last good bye and left this world. Fatehyab’s friends from his college and university days have spoken at memorial meetings and written in newspapers and journals, lauding his outstanding role as an inspiring leader of the student movement against Ayub Khan’s military dictatorship.
I have a feeling that Fatehyab Ali Khan, the politician, whose rock-like steadfastness and unflinching conviction in what he thought was right, also deserves special recognition, especially considering the type of politicians and politics we are forced to live with today.
I had had the privilege of working with Fatehyab Ali Khan in the Movement for Restoration of Democracy (MRD) during General Ziaul Haq’s ‘Islamic’ military dictatorship and in the subsequent years of half-baked democratic dispensations. That was when I came to know him more, as we used to argue, agree, disagree and occasionally discipline each other, spending time in jail together and in interrogation camps and umpteen times at informal ‘ideological encounters’ at his Karachi residence, umpired occasionally by Dr. Masuma Hasan.
Fatehyab’s status and stature as a politician in his capacity of President of the Pakistan Mazdoor Kisan Party were essentially different from most of his contemporaries. Some of them did not understand him or did not want to. With a few exceptions, many of them had taken to politics with their eyes fixed on gainful positions in the corridors of power. No doubt, the ultimate destination of politics by political parties is power, without which they cannot hope to implement their party manifestoes.
But in our country’s 65 years’ history, we have had few politicians who did politics as a matter of one’s duty to the society, irrespective of whether or not his/her party would come to power. I am sure that at least some of those who knew and worked with Fatehyab Ali Khan in the chronically chaotic jungle of Pakistani politics will agree with me that Fatehyab was one such rare specimen. May be, that explains the very close rapport Fatehyab developed with Begum Nusrat Bhutto in those rough and tough years when a fragmented democratic opposition was struggling to unite and challenge Ziaul Haq’s loathsome dictatorship and Nusrat Bhutto was playing a leading role in that struggle.
One may recall the stories of how Fatehyab evaded the CID and police spooks for months on end and went round the country incognito to consult interned political leaders and obtain their approval on a consensus document to be signed by all the parties as the first step towards formation of MRD. In one such ‘expedition’, he had visited Air Marshal Asghar Khan, then under house arrest in Abbottabad, traveling with late Omar Asghar Khan in latter’s car as a family friend. I remember late Mir Ghous Bakhsh Bizenjo narrating to us with genuine admiration how Fatehyab Ali Khan called on him at his residence in Nal in Khuzdar District, where Mir Saheb was staying after his entry into Karachi was banned. According to Mir Saheb, Fatehyab had secretly arrived in Khuzdar city, where he took help from Mir Amanullah Gichki and the two then braved the heavy rains and dangerous potholes on the crack-filled track that was the Khuzdar-Nal road, and traveled to Nal in a jeep to obtain Mir Saheb’s endorsement of the Draft Declaration as President of Pakistan National Party.
I came to know Fatehyab Ali Khan, the political practitioner, during our internment in Karachi Central Jail in the first months of 1981, following the mystery-shrouded hijacking of a PIA plane by Salamullah Tipu, allegedly one of the Al Zulfiqar desperadoes. The youth wing of the PPP, headed by Zulfikar Ali Bhuttto’s sons Murtaza and Shahnawaz, had formed a resistance group called Al Zulfiqar. On 28th February 1981, a week after the signing of MRD’s joint declaration by nine political parties, a PIA plane was hijacked to Kabul.
Murtaza Bhutto claimed that Al-Zulfiqar had carried out the hijacking under his orders but the timing of the deed, seven days after the signing of MRD’s founding declaration, raised many doubts. It was suspected that Tipu was acting at the behest of some other forces who wanted to provide the excuse to Zia regime to crack down on the entire progressive political cadre in the country and undermine the MRD in its very infancy. On the night of the hijacking, a large number of political activists, not only of PPP but also other parties, including PNP to which I belonged, were arrested and thrown into jail. Fatehyab Ali Khan and Pyar Ali Allana had played important roles in the preliminary efforts that eventually led to the signing of the joint declaration by leaders of nine parties on February 21, 1981, paving the way for the formation of the MRD. Both were detained in the same barrack of Karachi Central Jail. I liked both of them, but the difference between the two was that while Allana was too much of an extrovert, very outgoing even when not necessary, Fatehyab was reserved, not talking unduly, at times almost creating an impression of being arrogant, as I felt in the beginning. It was only later on that I discovered the brooding, thinking politician that was Fatehyab Ali Khan, unlike the ‘trying-to-be-populist’ Allana.
We were originally detained for ninety days but at the end of the 90 days period, a new order came extending the detention for another 90 days. Then one morning, without any prior warning, Fatehyab Ali Khan and I were taken out and transported to the Frontier Corps camp in Baldia Town and put in separate lockups. An interesting thing happened there. Fatehyab, while passing by my cell to go to the washroom, whispered to me that the whole Iranian Majlis had been blown up. He had brought his mini pocket radio with him without being detected by the police escort.
Between 1981 and 1988 -- the period of democratic struggle against Zia’s dictatorship under the banner of MRD, Fatehyab played the role of a strong pillar of strength for the movement. He had a hand in the drafting of some of the most important policy documents, so much so that after the end of Zia regime he persuaded me to join him in putting together a collection of all resolutions, statements, and other documents adopted by the MRD Central Committee over the years, which was duly done and disseminated to various political parties before the 1988 elections.
Fatehyab was a restless soul when it came to having to put up with the distortion of constitutional provisions or violation of democratic values and norms, irrespective of whether the culprits were military or civilian rulers. He would invite friends like me to his house and express his agony at what was happening, share his views with us and before long he would come out with the draft of an article or a petition and invite our comments. I had had many such interactions with him invariably at his initiative. Besides authoring dozens of such articles on a variety of political and constitutional issues, electoral reforms, anomalies in the judicial system, foreign relations and inter-state disputes, provincial autonomy, labour rights and so on so forth, Fatehyab was also known for agitating such issues through constitutional petitions in the superior courts, as a matter of ‘self-assumed duty’, I should say.
At this point, one cannot forget the epic legal battle he waged since 1980 against the illegal seizure of the Pakistan Institute of International Affairs by Ziaul Haq’s predatory martial law regime, eventually wresting it back through an order of the Supreme Court in 1993, restoring its prestigious status as the pioneer institution of its kind in the country. He also steered it for the next 15 years as its elected Chairman, while still continuing to keep a close watch on the country’s political process through interactive intellectual discourse on various national and international issues at the Institute. Today, as I look back at those years of my association with Fatehyab, I cannot but admit that he was an empathetic visionary who not only internalised problems of the deprived and marginalised sections of society but also regarded it as his obligation and commitment as a man who had led a political party that stood for the rights of workers and peasants, to seek and suggest democratic solutions.
Fatehyab Ali Khan lived his life the way he wanted to, but it is a national tragedy that people like him never made it to parliament and policymaking positions. He could have become whatever he wanted but he did not seek anything at the cost of his principles and that was the difference between him and the others.
The writer is Secretary General, Pakistan Peace Coalition (PPC)
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