firstperson
Master planner
By Saadia Salahuddin and Naila Inayat
Born to Abdul Rashid Khan, a leather worker, in Lahore in 1960, Nazim Khan (now James Caan) is a British Pakistani investor, entrepreneur, television personality, and a philanthropist. The Khan (not Caan) family moved to the East End of London in 1962, when Caan was two. His father started a business of making leather jackets and, in his youth, Caan worked for his father. He left school without qualifications at the age of 16, and left home shortly afterwards to pursue his ambitions of founding a business. He went to Harvard Business School at 40.

food security
Hunger pains
Dr Abid Qaiyum Suleri
Despite the claims and efforts of our economic managers to bring macro-economic stability in Pakistan, the miseries of a common person don’t seem to end. Six "F" crises (Food, fiscal, fuel, frontiers, fragility of climate and functional democracy) are getting aggravated with every passing day.

Vanishing Voices
Taking stock of the tripartite challenges to the survival of indigenous languages of Gilgit-Baltistan posed by
globalisation, communication and modernity
By Aziz Ali Dad
"There is no document of civilisation that is not at the same time a document of barbarism." Walter Benjamin
Because of the compression of time and space under the influence of technology the contemporary age is known as "Global Village". This is the first time in the history of mankind that local, national, regional and international events influence one another in various ways. Gilgit-Baltistan is also not immune to globalisation. My main focus here would be to take stock of the tripartite challenges posed by globalisation, communication and modernity for the survival of indigenous languages of Gilgit-Baltistan. Examining the current situation of indigenous languages in the region vis-à-vis exogenous forces, which include, market forces and their repercussions on local vernaculars.

visa
Price of peace
By Waqar Gillani
If you are a peace activist and want to raise voice for peace between India and Pakistan by exchanging delegates, it is hard to be on either part of the border. You might consider yourself an activist but the mighty establishments and security agencies think otherwise – for them you are either a "spy" or worst still a "terrorist".

These forces have a leading role in scanning each and every visa application before stamping it.

The MEPIC dimensions
The project aims to bring the students and the faculty from across the region to come together on a single platform and work for social, economic and political stability
By Rafay Mahmood
The department of Social Sciences at SZABIST (Shaheed Zulfikar Ali Bhutto Institute of Science and Technology) has established a study centre for regional peace and development which includes MEPIC (Mid East Pakistan India and China). The goal behind the formation of this society, which will be launched soon, is to cultivate a genial relationship with the neighbouring countries, especially India, and to try to learn from their strengths and weaknesses.

Let’s keep it going
Dilip D’Souza and Beena Sarwar continue their correspondence from last week, attempting to share thoughts honestly, without fear and hostility, exploring what divides our countries, and seeking ways to bridge the divide
Feb 23 2010
Dear Beena,
That was a good start, thank you. While I know that terrorism continues unabated in Pakistan, I had no idea of the numbers you quoted to me. 8,000 civilians and 3,000 security personnel killed in seven years, is a tragic, horrifying toll. I think more of us in India need to comprehend the magnitude of what’s happening today in Pakistan.

issue
Local problems
By Salman Abid
Democracy is always linked with strong grassroots political and social institutions. Unfortunately, in Pakistan, we have faced a serious crisis of democracy especially at the grassroots level. And not always because of military dictators. Recently the Punjab coalition government run by the two largest political parties Pakistan Muslim League (N) and Pakistan People’s Party (PPP) have unanimously passed a proposed amended bill of local government 2010 in the name of democracy and decentralization in the country.

Treasure hunt
Properly trained human resource can make a difference in oil and gas exploration
By Latif Ahmad Rana and Alauddin Masood
Pakistan has the potential to increase indigenous production of oil and gas reserves. The country’s energy resources remain inadequately tapped due to absence of proper planning and resources necessary to undertake this vital task. Pakistan is presently producing 67,000 barrels of oil and 3,950 million cubic feet (MMSCFD) of gas per day against the country’s daily requirement of 400,000 to 450,000 barrels of oil and 5,900 MMSCFD of gas. In other words, the country is facing a daily shortfall of 330,000 to 380,000 barrels of oil and 1,950 MMSCFD of gas.

Fiscal consolidation
The government needs to balance the economy rather than the budget
By Hussain H. Zaidi
According to the Fiscal Policy Statement 2009-10, recently issued by the Federal Finance Ministry, fiscal consolidation remains at top of the government’s macro-economic stabilisation efforts. Fiscal consolidation is a euphemism for reducing fiscal deficit, which during last two years has been a major macro-economic challenge for the PPP government.

 

firstperson

Master planner

By Saadia Salahuddin and Naila Inayat

Born to Abdul Rashid Khan, a leather worker, in Lahore in 1960, Nazim Khan (now James Caan) is a British Pakistani investor, entrepreneur, television personality, and a philanthropist. The Khan (not Caan) family moved to the East End of London in 1962, when Caan was two. His father started a business of making leather jackets and, in his youth, Caan worked for his father. He left school without qualifications at the age of 16, and left home shortly afterwards to pursue his ambitions of founding a business. He went to Harvard Business School at 40.

At 12 he knew he was going to become an entrepreneur. "My father never understood why I didn’t join the family business. When I opened the 100th global office of my company he said maybe it was the right thing for me to do," he says.

He is the founder and CEO of Hamilton Bradshaw, a UK-based private equity company. He also founded Alexander Mann, a multinational recruitment company, and co-founded Humana International, a multinational headhunting firm. Caan joined the fifth series of BBC2’s Dragons’ Den in 2007.

James Caan was in Lahore last week to lend his support to the £250 million UK aid education initiative in Pakistan. During his stay he visited UK Government programmes aimed at providing better quality education reaching all children in Pakistan, in partnership with the Pakistani Government.

Following are the excerpts of his interview with The News on Sunday.

The News on Sunday: What is the initiative in Pakistan that you are working on?

James Caan: UK’s prime minister made an announcement that he is going to invest 250 million pounds in education in Pakistan. This is our taxpayers’ money. It will be very useful for them to have an independent view on the viability of some of these projects. That’s how I am here — to understand the challenges and I have made 20 trips to Pakistan.

TNS: Where does Pakistan lack in your opinion?

JC: Pakistan lacks commitment from the government to address these issues on the ground. Leadership of other countries has given far more priority to education. India and Bangladesh have recognised the greatest asset of their country is an achievement capital. Pakistan has not woken up to this fact. This is why Pakistan will lag behind economically.

There are many jobs here but there isn’t an educated force available at middle level. The biggest challenge is that they can’t find enough good people. Yet Pakistan has the largest under-25 population. Pakistan has some of the brightest people and they are not developing them.

Pakistanis are very driven. They are incredibly motivated and they have a passion and a drive to succeed. In addition, family values remain high. The children want to do good for their parents. There is more reason here for people to succeed than at other places I have seen.

TNS: What are the challenges for entrepreneurs in Pakistan?

JC: In other parts of the world there is a more established venture capital which means the entrepreneur has availability of capital. All bright ideas were created by entrepreneurs but what they had was a capital to create these ideas. Pakistan has no venture capital. It has no ability to attract capital. In my opinion, thousands of wasted entrepreneurs with amazing, fantastic ideas are unable to launch businesses if there is no venture capital.

TNS: You are chairman of the Big Issue Magazine. What’s that?

JC: The Big Issue is one of the most successful projects we have for homeless people. In Britain people should not beg on streets. As modern economies grow I don’t think its right for you having to beg. What The Big Issue does is that it gives people dignity back. We have a publication and if you are a homeless person you come to my office every day and buy a copy of the magazine which I will sell to you and then you can go and sell that on the street. I charge cost. I make no money. I sell at 75 pence, the person who buys sells for 1.50 pounds and they make between 50 and 60 pounds a day profit from selling the magazine. The money, which they make, is enough to buy food and shelter. Today there are thousands of people in England who are not homeless because of The Big Issue Magazine. It is the most respected, philanthropic projects in the UK. It’s highly respected by the government and the Queen. We have been publishing the magazine for 20 years.

The Big Issue Foundation and we are looking at Pakistan from the poverty perspective to see whether some of the lessons the people learnt from The Big Issue can be translated in Pakistan. I am going to meet this weekend a number of publishing houses to see whether we can collaborate a joint venture with a Pakistani publishing organisation with a view to launching The Big Issue in Pakistan.

TNS: What are you doing at James Caan Foundation?

JC: We support schools in Pakistan. We fund the entire 320 children, their fee, their uniform, mini buses to collect them and drop them. The Foundation bears the whole cost. In addition to that we are significant donors to the area of cancer research. There are children who are abused and the Foundation supports that. There are eight different activities that the Foundation covers. We either invest directly like in Pakistan. At other places we tend to work through other established organisations.

TNS: There are children who work in workshops and markets. Do you have any plans for them?

JC: Punjab Education Foundation which supports 1300 schools in Lahore gives education for free and also gives milk, snacks, food to children. There are 600,000 children they are educating and it pays for them. There are such projects that are not well-publicised. The reason why the UK government asked me to come here was that they wanted somebody to do a proper review of what is available in the local community and see which projects work and which don’t. I am here representing the UK government.

We are addressing the issue of taking kids off the streets. There are six million children who do not go to school. That is the biggest waste of human talent. To me the responsibility of good government is to ensure that you develop your manpower. If the vast majority of your human capital sits around idle, how will you create an economy, how will you create an industrialised nation? You can’t.

TNS: You are one of the two people selecting the best works in science and technology. How do you view science education in Pakistan?

JC: We are not attracting enough graduates into science in England because they want to be bankers, they want to be in marketing because there is a glamorous perception. The concept of science doesn’t have glamour so what I did was to launch a huge campaign in England to publicise science. Look at Nokia – it has become one of the largest companies because it attracts people who have very good scientific brains and we are trying to give examples that it’s not just man in the white coat, there is marketing technology, online website and actually it’s a young and striving industry that is massive.

The question is how do you market industry to young people? You have to celebrate success. You have to tell people how technology industries have become some of the great successes in the world. So that people can see where the opportunity is.

TNS: A lot of children drop out from school before completing their school certificate. Do you think we need to promote technical education here?

JC: No. There are very basic issues, which if addressed can make a huge difference, like the teacher doesn’t turn up, only 20 per cent of the children have books. To me there are some very fundamental reasons why children drop out. A lot of schools don’t have boundary walls.

It is the responsibility of the government and it has to treat it as priority. Other countries have put education on the top. As a result these countries have seen their economies thrive because people are productive. They are giving services. If you look at India, Gandhi, years and years ago, had a vision for India. He had that vision of educated workforce fifty years ago. That is what it takes – Vision. And they have population of 1.4 billion people and the will to educate it. We are not committed, not serious about the issue.

Look at the Pakistanis who live abroad. They are some of the smartest people you find in the world. What have they in common? They all are educated.

TNS: Where have you spotted talent in Pakistan?

JC: There are some amazingly talented people here in business and politics. One of the things I am very impressed with is that in government there are more women than I had expected. When you are living abroad, the perception is different. You don’t think there are so many women at high positions here. Women are in business here, they are in politics here and that’s a very good sign of modernising your economy. I think women are the biggest untapped talent in this country. We have just scratched the surface. We are not addressing the issue.

TNS: How well does Pakistani talent fit in an industrial society?

JC: Pakistan will not become an industrialised nation. If all you are is a low cost manufacturing economy, how will you compete with countries like Philippines and Vietnam. Even Bangladesh is very competitive.

The key question for me is, what is Pakistan’s Unique Selling Point (USP). I don’t see what that is. If you are not competitive, you will be left behind. Where do you see yourself if you don’t develop and educate your workforce. India produces quality workforce today.

TNS: On a slightly different note, tell us about the programme Dragon’s Den you do on BBC TV.

JC: It’s one of the most successful programmes on BBC. It is viewed in the US, in Australia, in Japan, in Eastern Europe. It can be viewed in India as well. Young entrepreneurs, people who have good ideas and want to launch new business approach BBC. If the BBC likes the idea I give the entrepreneur three minutes to present his idea in my programme. We can quiz them for 25 minutes. We give money in it. The money can be seen on the table. To raise so much money in 20 minutes is not possible. It’s quite an amazing show. I have given away one million pounds – my personal cash on television. A million pounds is a lot of money. Because of the show, I was asked to write a book, The Real Deal: My Story from Brick Lane to "Dragons’ Den", which has become a bestseller and has created a lot of millionaires now.

 

food security

Hunger pains

Dr Abid Qaiyum Suleri

Despite the claims and efforts of our economic managers to bring macro-economic stability in Pakistan, the miseries of a common person don’t seem to end. Six "F" crises (Food, fiscal, fuel, frontiers, fragility of climate and functional democracy) are getting aggravated with every passing day.

The effectiveness of government’s response to 6F crises is dependent on how it prioritises among four levels of securities i.e., individual, national, regional, and global security. It goes without saying that huge influence of Khaki presidents and Khaki backed civilian governments has resulted in "national" security taking priority over all other security concerns. On top of this, the "establishment" has complete monopoly over what it defines as national security interests and also in deciding on who is posing threat to those security interests.

However, one needs to understand that neither the "six F crises," nor the four levels of security mentioned above are mutually exclusive; rather they are interconnected and cumulative. Their interconnectedness has made it extremely difficult to address the national security when other levels of security are being compromised.

Various groups find it extremely easy to create parallel states within the state, when the "national" state fails to take care of individual security and cannot provide basic services such as food, shelter, health, and education to everyone. Growing militrisation in Pakistan can be understood in this context. Generally "militants" are perceived to be Islamic hard-liners. However, many "militants" are those who are outraged by chronic hunger, endemic corruption, unfair courts, and the government’s inability to supply basic services.

Socio-political instability in Pakistan emerging from individual insecurity may affect regional as well as global security providing an excuse to external actors for interference — such as the drone attacks by US forces.

Food insecurity and militancy

Food security ranking of 131 districts in Pakistan, according to FIP 2009, indicates that 48.5 percent of the total population in 76 out of 131 districts of Pakistan is food insecure. The population in another 26 districts is on borderline and extremely vulnerable to any external shock.

The 10 most food insecure districts according to this report include Dera Bugti, Musa Khel, Upper Dir, North Waziristan, Muhmand, Dalbidin, South Waziristan, Orakzai, and Panjgur. Other worst food insecure districts, according to FIP2009 are Bajur, Laki Marwat, Lower Dir, Shangla and Malakand etc. The international community might not have heard of these districts in the context of food insecurity. However, many people would easily recall that these districts are perceived as the "axis of evil" within Pakistan. There is no empirical evidence to prove that food insecurity is the only cause of militancy in the above-mentioned districts. However it is an established fact that food insecurity leads to violence and conflict.

Recognising food insecurity as a major cause of militancy and violence, many analysts believe that in Pakistan, a mullah-marxist nexus is operating where religious forces are exploiting the (anti-elite) feelings of lower and lower middle class food insecure people, motivating their unemployed youth to commit suicide attacks against innocent people.

Compromised security at one level (individual security in our case) compromises security at each of the other levels (national, regional, and global). Food scarcity heightens the potential for conflict, which translates into a security threat. Individual cases of relative hunger, marginalisation, and poverty can turn into collective deprivation. This collective deprivation when gets an identity be creed, gender, class, or nationality, always leads to class conflict and ultimately to violence.

The Baloch national movement offers an example here. Dera Bugti is the worst food insecure district in Pakistan. Natural gas was discovered in Dera Bugti back in the 1950s, and since the 1960s has been supplied to the rest of Pakistan for domestic and industrial consumption. Only in 1984 was Questa, the Balochistan capital, supplied with natural gas. Chronic food insecurity in Balochistan and especially in its gas producing districts aggravated the sense of marginalisation and deprivation to an extent where many Baluchis started believing that Punjab and Sindh provinces were exploiting their resources. As a consequence, Balochistan has seen the rise of many anti-federation movements. A widely publicized reaction to the perceived hegemony of the federal government was the 2009 kidnapping in Quetta of John Solecki, the regional head of UNHCR, by a nationalist group the Balochistan Liberation Union Front.

Extraordinary behaviours

The point that one needs to understand is that a high prevalence of food insecurity leads to intensified "extraordinary behaviour" of individuals. These extraordinary behaviours may include anti-social activities, working as bonded labour, selling of kidneys, selling of children, and committing suicides. Half of the total population of Pakistan, where 22 percent of the elites own 85 percent of the farmland, while 78 percent of the population own only 15 percent of the land, is behaving extraordinarily. This situation results in large numbers of individuals who might do anything in sheer desperation and frustration.

For many desperate individuals, shrines and madrassas are the complete solution for the problems they face in their day-to-day lives. They go to shrines for spiritual healing when the public health system fails them and they can’t afford private healthcare. Most shrines, moreover, are assured places where one can get free meals that pilgrims and believers offer there. They send their children to cost-free boarding schools — madrassas — when the public education system cannot absorb them and again private education system is beyond their access. Madrassas also become handy where public schools simply do not exist. As a matter of fact, religious groups offer complete social safety nets that the government sector cannot, due either to fiscal constraints or to governance issues. Hence, people tend to have very strong belief in these institutions due not only to religious reasons but also to economic reasons.

While most of the madrassas in Pakistan are symbols of peace, tolerance, and harmony, there are quite a few which are being run by religious hardliners who believe in a particular version of Islam. On many occasions, they have challenged the writ of the state, declaring state institutions as un-Islamic. They can easily get support from the poor and marginalised sections of society who are often let down by Pakistan’s inadequate public service delivery system. Chronically food insecure people who are often illiterate and marred by poverty become an easy prey and can be brainwashed by their leaders who offer complete economic security to their dependents, assure them a confirmed place in heaven, and turn them into suicide attackers to eliminate the perceived nexus of imperialist forces led by United States.

According to the law enforcement agencies, a suicide bomber is paid up to US$12,000, an amount that would be sufficient for his dependents to live a decent life. These groups behaving extraordinarily create socio-political instability, jeopardise the country’s economic activities, and threaten all foreign direct investors, but also pose a challenge to regional and global security.

In the aftermath of the 9/11 attacks, the United States provided around $11 billion to Pakistan in the shape of budgetary support, economic assistance from USAID, military assistance, and Coalition Support Funds from 2002 to 2008. This money, if spent judiciously and with a political will, could have alleviated millions from extreme poverty and chronic hunger, thereby saving Pakistan from growing militancy. Alas, it was not.

Paradigm change

So what needs to be done differently? First, the situation requires a change in paradigm where individual hunger is perceived as a national security threat. Such a paradigm shift would result in greater resources being channelled to improve food security. It would also result in reprioritization of public spending, so that social development would be given priority over national defence, and the benefits of such spending would accrue to individuals and not only to the state.

Second, perceiving hunger as a national, regional, and global security threat, UN agencies, bilateral donors, and international financial institutes should realign their strategy in Pakistan to turn the pain of hunger into opportunity for social transformation, better awareness about human rights, women’s empowerment, girls’ education, adult education, and exposure to a secular face of the world. The international community should start investing in developing the social and human capital of the chronically food insecure people of the FATA, NWFP, and Balochistan. This would not only directly aid those harmed because of ongoing military operation, but also go some way towards fostering a more stable environment.

It is about time that the government of Pakistan and its international partners step up activities that ensure distribution of food to those in need, increase food absorption capacities in conflict hit and conflict prone zones, and institutionalise an independent impact assessment system in place to assess what worked and what did not work vis-à-vis social sector development.

The writer is the executive director of SDPI. He is the lead author of the forthcoming Food Insecurity in Pakistan 2009 report. [email protected]

 

Vanishing Voices

Taking stock of the tripartite challenges to the survival of indigenous languages of Gilgit-Baltistan posed by

globalisation, communication and modernity

By Aziz Ali Dad

"There is no document of civilisation that is not at the same time a document of barbarism." Walter Benjamin

Because of the compression of time and space under the influence of technology the contemporary age is known as "Global Village". This is the first time in the history of mankind that local, national, regional and international events influence one another in various ways. Gilgit-Baltistan is also not immune to globalisation. My main focus here would be to take stock of the tripartite challenges posed by globalisation, communication and modernity for the survival of indigenous languages of Gilgit-Baltistan. Examining the current situation of indigenous languages in the region vis-à-vis exogenous forces, which include, market forces and their repercussions on local vernaculars.

Till now the region of Gilgit-Baltistan remained incommunicado with the outside world. There are many disadvantages of remaining in isolation. But the situation of isolation was not without benefits. Owing to the inaccessibility of Gilgit-Baltistan, the locals had to rely on their own resources to cope with the challenges emanating from nature and management of the society. The traditional system of governance in the region is one of the examples of indigenously developed governance mechanisms. But the finest illustration of creativity of the closed society is the development of various languages within the boundaries of Gilgit-Baltistan. Balti, Brushaski, Shina, Khowar, Wakhi, Domaki and other languages are pieces of creativity on the cultural tapestry of Gilgit-Baltistan.

The isolated status of Gilgit-Baltistan started to wane with the advent of the British Empire. The British arrived here with governance structure and rational institutions, which were a product of modernity. These developments played instrumental role in opening of hitherto isolated societies to the forces of modernity and communication.

After the British, the region got connected with the southern parts of Pakistan a through jeep able road in 1950s. During the 1970s the region witnessed opening of the Karakoram Highway. It connected Gilgit-Baltistan China and facilitated easy flow of exogenous goods, people, lifestyle and trends into the region. Although, the KKH and modern means of communication benefited it was not without cost. One of the costs of modernisation is increasing threat to the survival of vernaculars.

Since the society, economy, lifestyle and governance of Gilgit-Baltistan have undergone drastic changes in last four decades, it is natural to have repercussions of these changes on language. Previously, the local languages were organically interfused with local power structure, culture and society.

The autochthonous languages have become marginalised in different spheres of life. With urbanisation of various places in Gilgit-Baltistan and migration of native people have made the vocabulary associated with hunting, agriculture, shamanism, local arts and crafts irrelevant. Hence, various life worlds connected with these areas disappeared.

Introduction of mass literacy and service sector through rationalization of society and economy proved conducive in bringing about change in the socio-economic lot of the society. Nevertheless, local languages are disconnected with the power structure that determines the contours of society, economy, and education sector, administrative and political structure. As a result, people have opted for Urdu and English languages, which open new opportunities and bring power and prestige. Native languages are not part of the medium of instruction in educational institutions and government offices. The disconnection between power and language has far reaching consequences. This factor will determine, to great extent, the fate of local languages in the future.

Other than exogenous factors, local socio-cultural ethos and pressures have contributed to the extinction of local languages. The case of Domaki language is a case in point. This is a language spoken by artisan class of Hunza. In the traditional social and tribal set up Domaki speakers were marginalized group and fall in the lowest stratum in social hierarchy of Gilgit. Hence, power structure and social ethos also treated them as anathema. In reality they were repository and creators of arts, indigenous engineering, crafts and music. In this sense they were guardians of indigenous knowledge.

Mass education has opened new vistas of progress and social mobility to subaltern groups like Doms — people who speak Domaki language and musicians. Ashamed of their heritage and knowledge they were forced to relinquish their centuries old heritage and professions and opt for modern occupations.

True empowerment is that which enables one to progress without losing one’s right to being linguistically and professional dissimilar or having different identity. These are the people who did not find a modus vivendi in either tradition or modern structures. The former kept their role and identity fixed by denying opportunities available to other members of the society, whereas the latter, in a Faustian bargain, has offered them opportunities by depriving them of their very identity. It encapsulates the failure of the society that failed to strike a balance between tradition and modernity.

The story of the moribund Domaki language is a snippet of the bigger picture regarding the vanishing voices in Gilgit-Baltistan. To counter existential threats to local language it is indispensable to engage critically with modernity and chalk out policies and strategies that enable local languages to survive. In this context we have to take into consideration the devastating impact of the modernity on local languages and raise questions about some of the assumptions implicit in the discourse of modernization.

To preserve local language in the times of rampant globalisation three important steps need to be taken. First is the study and preservation of language by the means of the science of linguistics. All the languages of Gilgit-Baltistan are oral. With the rise of printing press, written word has dominated spoken word and transformed oral cultures into written one. By learning and utilizing the modern science of languages we can equip native speakers with required knowledge and tools to survive in the age of language cannibalism. Oral culture is a product of memorization or learning by heart. Linguistic is a product of mind. To preserve local languages it is imperative to acquaint oneself with the science of language by engaging our minds.

Second, modern electronic media has provided us tremendous opportunities to save native languages. A salient feature of media is that it fuses word and image. Thus, it enables us to see things and hear words synchronically, which is not possible in print media. The cumulative result of this process is permeation of local languages into society and native speaker who ears are avoid their languages.

Third, there is a dire need to explore the society and literature by employing modern technique of humanities and social sciences through a proper research institution. Only by aligning efforts of language preservation on scientific lines and employing the tricks of the trade of modern cultural industry, we can be able to save local languages from falling them into the dustbin of history. The pronouncement of ‘The End of History’ by liberal ideologues is not just declaration of the demise of alternative ideologies or worlds, it is also a veiled pronouncement of the impending death of small cultures, local languages and life worlds under the pressures of monolithic globalization across the world.

The writer is associated with Strengthening Participatory Organisation (SPO), Islamabad. Email: [email protected]

 

 

 

visa

Price of peace

By Waqar Gillani

If you are a peace activist and want to raise voice for peace between India and Pakistan by exchanging delegates, it is hard to be on either part of the border. You might consider yourself an activist but the mighty establishments and security agencies think otherwise – for them you are either a "spy" or worst still a "terrorist".

These forces have a leading role in scanning each and every visa application before stamping it.

Pak-India Peoples’ Forum for Peace and Democracy (PIPFPD) is a registered forum of peace activists from both sides, established about 16 years ago. A joint meeting of the forum has not been possible in the past four years because of non-issuance of visas to activists on both sides.

This is not the first time that the peace activists have been denied visa. "Even Pakistani activists scheduled to go to India for a joint convention could not make it and the joint convention had to be cancelled," Kamran Islam, coordinator PIPFPD tells TNS.

"We are unable to hold a joint convention either in India or Pakistan. This time, the forum has scheduled its convention in Jammu. The date of the convention has twice been postponed because of visa rejection and it is feared that it may not be held even on the scheduled dates in March because delaying tactics are still being used by the Indian embassy," he says.

Islam points out that Pakistani embassy had not issued visa to the 11 members of the core committee of the forum to attend a meeting scheduled in Pakistan in February.

"This is the price for raising voice for peace which we are paying," he says.

These are the activists who have accepted that certain issues like Kashmir are controversial, a stance denied by the Indian establishment and the governments. "This is what we have achieved through peace activism in 60 years. We have declared Kashmir as a disputed area which the establishment and the government of India always deny," says IA Rehman, secretary general Human Rights Commission of Pakistan and an active member of the PIPFPD.

"Peace activists on both sides have done something positive which governments on both sides could not do in the past 60 years," he maintains.

South Asian free Media Association (SAFMA), another established forum working for regional peace and harmony, has also proposed a visa free regime for recognised journalists in South Asia. It has managed exchange of journalists on both sides of border frequently and proposed a protocol for starting liberal visa regime through SAARC (South Asian Association for Regional Cooperation) framework.

Such peace prompting organisations have always been rejecting the current restrictive visa regime and restrictions on the free movement of people, goods and information. They call upon the governments and the people to revise visa regime and allow a liberal visa on the border posts and other entry-exist points while exempting journalists, business people, academicians, artists, writers, students and elderly from the formalities of visa.

The interesting point is that both countries do not issue visa for tourism but mostly for religious rituals etc. "It is not a tourism visa regime," says Tapan Bose, the secretary general of Indian chapter of the PIPFPD, who recently visited Pakistan to raise the voice for making visa procedures easy.

"We want visa on arrival like its happening in many other countries of South Asia such as Nepal, Sri Lanka etc," he says. "This can serve as clear example that bigotry between the both countries is decreasing and there is an openness to allow the peoples on both sides to come and go."

This also can promote tourism, trade and business activities. But instead of focusing on such peace promoting steps like making a liberal visa regime, both nuclear states have fast increased their defence expenditures, says Bose. "Both nuclear states failed to decrease their conventional arms and forces despite promises after attaining the status of nuclear power. India is even ahead in defence expenditures."

Pakistan and India had many consulates on both sides before 1990s. Pakistan had its consulates in Mumbai and Kolkata while India had in Karachi. But these consulates were closed after serious blow to the Pak-India ties in 1990s.

The visas issued by Pakistan to Indians are mostly on religious grounds — to the Sikh community. The visa clearance on both sides involves security agencies. The visitors on both sides also require a "police report" after they cross either side of the border to keep proper eye on their activities.

This lengthy and cumbersome procedure of visa adds to the worries of peace activists.

"We want more consulates and reopening of the previously closed offices of both countries on the other side of the border," says Dr Mubashir Hasan, noted peace activist. He suggests that there should be one window operation for the issuance of visa to ease out the problems of the activists. "Visa is the first and primary but the most important permit to promote peace which should be made easy," he demands, adding, "That is why the governments on both sides have made it strict so that there should be least exchange and less talks of peace by people."

Peace activists on both sides firmly believe in continuing to raise voice for peace despite visa odds. "We hope that the start of composite dialogues between the both countries after more than one year gap because of Mumbai attacks will be helpful in prompting peace through exchanging more and more delegations," wishes Bose.

"All issues should be resolved issues while continuing talks and friendship."

Email: [email protected]

 

The MEPIC dimensions

The project aims to bring the students and the faculty from across the region to come together on a single platform and work for social, economic and political stability

By Rafay Mahmood

The department of Social Sciences at SZABIST (Shaheed Zulfikar Ali Bhutto Institute of Science and Technology) has established a study centre for regional peace and development which includes MEPIC (Mid East Pakistan India and China). The goal behind the formation of this society, which will be launched soon, is to cultivate a genial relationship with the neighbouring countries, especially India, and to try to learn from their strengths and weaknesses.

"This is human psyche; an individual is not at peace if he has an antagonistic relationship with his neighbours because, in good and bad times, they are the people he looks towards," says Dr Fouzia Khan, leading psychiatrist and dean of the department of Social Sciences at SZABIST, talking to TNS.

Dr Fouzia is of the opinion that with the launch of the MEPIC study centre, "Pakistani intelligentsia and policy makers will be moved to understand that old thinking needs to be replaced with the reality of present times". And, the reality, she contends, is that the MEPIC countries have much to offer to each other in terms of ideas, human resource, technology and finance. "The MEPIC region aside, even if we concentrate only on building a strong and healthy relationship with India, a lot of our problems will be solved.

"The focus of MEPIC is on issues of environment and renewable energy which are the need of the day."

Quoting the example of India, she says, "[Their] industry has grown tremendously over the past few decades. And, it is because they have taken the right measures."

At the recent International Renewable Energy Association (IRENA) conference, held in Dubai, the Indian Minister for Renewable Energy Farooq Abdullah is said to have raised the water issues faced by Pakistan due to the melting of Himalayan glaciers. "He showed a keen interest in developing mutual cooperation in related matters. It means the [India’s] intent to work in collaboration with Pakistan is there but it doesn’t get noticed," says Masood Ahmed, the project head of MEPIC.

Highlighting the key benefits of the project, he says that if India and Pakistan come on board to discuss renewable energy, then the Hyderabad-Keti Bander Wind corridor that leads up to Rajasthan in India has the capability of producing 50,000MW energy. Eventually, if the project is successful, it will be of great benefit to both the countries.

"Both India and China are far ahead [of Pakistan] in renewable energy technology as well as policy. Pakistan requires these, too. In this connection, the overwhelming response given by the Indian experts at IRENA acted as a huge morale booster for us," he adds.

R K Pachauri, Nobel laureate and a global authority on environment issues who also heads the Energy Resource Centre in India, has reportedly agreed to attend the official launch of MEPIC in Karachi.

"While the whole world is talking about saving lives and resources we are stuck on the borders. The common man in the street harbours no negative thoughts for the people on the other side [of the border]. We have a common language and we share cultural values and heritage. All these things make Pakistan and India most suitable partners in the region. Hence they must solve whatever issues they have between them amicably. ‘Aman ki Asha’ is the perfect platform to start the process."

The MEPIC members aspire to expand the project so that the students and the faculty from across the region can come together on a single platform to work for social, economic and political stability and, in turn, prove to be messengers of peace and prosperity for the whole region.

 

Let’s keep it going

Dilip D’Souza and Beena Sarwar continue their correspondence from last week, attempting to share thoughts honestly, without fear and

hostility, exploring what divides our countries, and seeking ways to bridge the divide

Feb 23 2010

Dear Beena,

That was a good start, thank you. While I know that terrorism continues unabated in Pakistan, I had no idea of the numbers you quoted to me. 8,000 civilians and 3,000 security personnel killed in seven years, is a tragic, horrifying toll. I think more of us in India need to comprehend the magnitude of what’s happening today in Pakistan.

There’s plenty in your letter that I’d like to discuss. But for now, I’d like to focus on one theme you brought up.

You point out that since Pakistan has been "unable to protect its own territory" from these attacks, how can it stop them crossing into India? You also point out that this violence is the legacy of years of "pro-jihadi, anti-India" posturing of Pakistani governments that ordinary Pakistanis did not elect anyway.

Now there are those in India who would say, well, Pakistan is just reaping what was sowed in the years that the country rode that particular tiger (if you’ll excuse the mixed metaphors). Perhaps there’s not much point in going over the past like that — after all, what do we do now? But those same folks might also say this: there were indeed the occasional Pakistani governments that people did elect — Benazir Bhutto and Nawaz Sharif ran a few of those — and yet those elected governments were also distinctly "anti-India".

What might our relationship look like today if there had been popular pressure on at least those governments to abjure the "anti-India" stance? Put another way, just how popular is the "anti-India" stance anyway, among ordinary Pakistanis?

Actually, I ask this in the hope that it will be a mirror for Indians. We might have elected (and voted out) our governments, and so maybe democracy has stronger roots here than in Pakistan — yet I don’t think we’ve done well in toning down the anti-Pakistan stances our governments have taken. From Indira Gandhi’s infamous "foreign hand" to nuclear tests to plenty more, our political players have shared one characteristic across the board: the animus towards Pakistan as a distraction from our own failures. Yet my feeling is that this animus has substantial roots too, among ordinary Indians.

In other words, am I right in thinking that the anti-the-other-country feeling is more widespread in both our countries than either of us would like to believe?

If it is, that’s of course the best reason for this exchange we’re attempting. So let’s keep it going.

yours always,

Dilip

February 25

Dear Dilip

Thanks for your email. Yes, the casualty figures are quite hair-raising. I remembered reading somewhere that thousands had been killed but didn’t quite believe it, so did a search, found these horrific figures at the South Asia Terrorism Portal website. I assume they’re extracted from media reports. Even if they’re not dead accurate (pardon the pun), they indicate the mess we’re in and the price Pakistanis are paying.

I agree that there’s a need to focus on what do we do now rather than going over the past like that but it is important to understand the past in order to move on to the present and visualise the future.

However, I would disagree that Benazir Bhutto and Nawaz Sharif were ‘distinctly "anti-India"’. Remember, it was Benazir who came to an agreement with Rajiv Gandhi to end the insurgency in the Indian Punjab. Nawaz Sharif hosted Vajpayee’s famous bus yatra and started a peace process that was sabotaged by the Kargil debacle, which he has always maintained he never knew about until it was too late (it was the brainchild of his army chief Gen. Musharraf). Nawaz Sharif in fact was elected despite, or because of, his pro-India stance in his election campaign the last time round.

Yes, they were elected governments, but they were never fully in control. Perhaps it was because of this lack of control that their policies never reflected a ‘pro-people’ stance. They were not allowed to make or run policy. That remained, and has largely remained in the hands of what we call the ‘establishment’ — that combination of army, agencies and bureaucracy, which continues to tug one way while the government is pulling another.

Regarding your question about the "anti-India" stance among ordinary Pakistanis, see the response to the survey undertaken in Dec 2009, seeking a response to ‘aman ki asha’, which confirms what anecdotal evidence suggested: the majority of respondents (72% Pakistanis and 67% Indians) expressed the desire for peace between the two countries.

There may be hostility towards each other’s governments’ policies — but on a personal level, as people, Indians and Pakistanis on the whole want at least peaceful relations. This is something that we experience first hand when we visit each other’s countries. Yes, there are pockets of hard-liners — almost all situated within the self-styled ‘religious’, ‘nationalist’ groups (on both sides of the border, mind you).

Maybe I’m overly optimistic or idealistic. But I do believe that if the voices for peace are allowed as much public space as the voices for hostility have been allowed, the former will simply overwhelm the latter.

And on that note, for now, I’ll end. Take care

Shanti

Beena

‘Conversations’, conceived by Dilip D’Souza, is based on the premise that, despite setbacks, it is critical to stay on the road to peace. This road, the process and the hard work of peace — rather than easy hatred and vilification — are part of this crucial journey.

 

issue

Local problems

By Salman Abid

Democracy is always linked with strong grassroots political and social institutions. Unfortunately, in Pakistan, we have faced a serious crisis of democracy especially at the grassroots level. And not always because of military dictators. Recently the Punjab coalition government run by the two largest political parties Pakistan Muslim League (N) and Pakistan People’s Party (PPP) have unanimously passed a proposed amended bill of local government 2010 in the name of democracy and decentralization in the country.

As soon as the bill of local government amendment was passed with popular vote in the Punjab Assembly, the government immediately issued orders to end the term of existing local government, elected representatives including nazims. It also issued orders to create an election authority to conduct polls and appointment of administrators in place of nazims. The ruling party also rejected 26 amendments move by the opposition members. The new act, which carried some 21 amendments, has given the provincial government the authority to instantly abolish the current setup, which otherwise could have survived till the arrival of the new elected local government. Interestingly, the provincial government gives 180 days (six months) to the provincial election authority to announce and finalise the local government election in Punjab. After this process, the local election authority will take minimum ninety days for announcement of the election schedule.

Democratic forces, including civil society organisations, fear the provincial local election authority and its members would be appointed by the provincial government; thus it would be under the political control and influence of provincial government which clearly means it would be difficult to ensure transparency, independence and impartiality of local government election credibility. In the Charter of Democracy both the parties showed strong commitment to strengthen an independent election commissions and not the local election authority. Now the decision is totally different and not only violates the charter’s essence but also the democratic norms and values of the state.

The amendment of the section 179-A of LGO stated that under this amendment for the purpose of holding the next election to the local governments, district council, tehsil council, town council and union council shall stand dissolved with immediate effect. The government shall appoint a person (government official) as an administrator for a local government to perform functions and exercise the powers of nazim, naib nazim and council under the ordinance of any other law. The appointment of the administrator in place of nazims is against the spirit of article 140-A of the constitution which provides each province shall by law establish a local government, devolving political, administrative and financial responsibilities and authority to the elected representatives. These amendments finally shift powers to bureaucracy as opposed to elected representatives and weaken the democratically elected public representatives and their councils at the grassroots.

PPP has also supported the proposed bill of the local government 2010. It did raise its concerns in the assembly but stated that it is supporting the bill due to President Zardari’s decision of strengthening and protecting democracy. Interestingly, the PPP Punjab and the parliamentary party both criticised the local government’s amended bill 2010.

Unfortunately, the PML-N has destroyed the concept of decentralisation and minimised and restricted the powers of the elected public representatives. Actually the Punjab provincial government wants the local council structure and not the local government as the third tier of the government. The local council will totally be dependent on the provincial government with very limited powers of the council. The Punjab government is already facing serious criticism on the governance model based on bureaucracy and non elected representatives from different political forces and intelligencia. The PML-N has always been critical of the local government ordinance 2000-01 and strongly stated it will not support the dictator General (R) Pervaiz Musharraf Model .On the other hand, it wants to restore the Gen (R) Zia ul Haq 1979 model of local governance in the name of democracy.

Another serious concern in the delay and demolition of the local government structure is that the provincial government wants to avoid the local government elections. Or maybe the provincial government wants more time for further consultation processes regarding the new ordinance of local government and also for the process of formation of the local election authority.

In either case conflict will arise between the coalition partners on the appointment of the administrator at the district level; the PPP will insist on 40 percent sharing formula within the government which the PML-N might find difficult to accept.

Unlike other democracies in the world, we still insist on the centralised approach as compared to decentralisation. Another major problem in Pakistan is that every political institution — like local government, provincial government, central government and all elected representatives — just focuses on development funds and not in development in its true sense. No one is interested in legislations and policy making issues .If the situation remains as it is now, how will the systems run in this country.

Our political elite should realize that the country is facing serious crisis of governance and especially local governance .They should understand that without empowering the local democratic political institutions like local government, nation cannot resolve its inherited problems.

The writer is a political analyst and can be reached at [email protected]

 

 

Treasure hunt

Properly trained human resource can make a difference in oil and gas exploration

By Latif Ahmad Rana and Alauddin Masood

Pakistan has the potential to increase indigenous production of oil and gas reserves. The country’s energy resources remain inadequately tapped due to absence of proper planning and resources necessary to undertake this vital task. Pakistan is presently producing 67,000 barrels of oil and 3,950 million cubic feet (MMSCFD) of gas per day against the country’s daily requirement of 400,000 to 450,000 barrels of oil and 5,900 MMSCFD of gas. In other words, the country is facing a daily shortfall of 330,000 to 380,000 barrels of oil and 1,950 MMSCFD of gas.

The shortfall of gas is projected to increase to four billion cubic feet per day by 2025 if new gas fields are not discovered and added to the national network. According to conservative estimates, the country is suffering a loss of Rs450 billion annually due to the continuing energy crunch. These losses are projected to grow substantially if new discoveries are not made to secure Pakistan’s future energy needs.

According to one estimate, the Oil and Gas Regulatory Company Limited (OGDCL) has the infrastructure and capability for substantially increasing exploration activities and also has the potential to make Pakistan self-sufficient in oil and gas within 10-15 years if it adequately plans acquisition/training of additional technical manpower and equipment over a period of 5-8 years.

For realising this goal, it is, however, imperative for OGDCL to acquire the services of fully qualified and adequately experienced and motivated Exploration and Production (E&P) management team, and allowing them the independence to make technical and financial decisions solely on merit, without unnecessary interference from official quarters.

The exploration and production of oil/gas is a very complex business, involving all sorts of technologies from simple workshop work to complex space technology, which brings to the fore the capability and experience of the E&P management to fully comprehend the affecting parameters and take appropriate decisions after listening to various specialists. However, OGDCL is presently staffed by a small number of qualified and experienced personnel.

With the available resources, OGDCL cannot undertake exploration activities such as drilling wells during this financial year. Any shortcuts in the proper evaluation of prospects could result in more dry/unproductive wells causing colossal financial losses and marring OGDCL’s repute.

The exploration process of any E&P company comprises of various stages, involving evaluation of existing data of available areas, establishing additional data requirements for each area, planning and carrying out surveys for acquiring data, and rationalising/processing the acquired data, etc.

The completion of this process may take a minimum of 3-5 years, from taking over an area and drilling wells there, depending upon the terrain and accessibility of the area. As most of the easily identifiable oil/gas structures/traps have already been exploited, now a lot more work is required in the form of evaluating the existing data to come up with identifiable prospective locations for the drilling exploratory wells.

If exploration activity is to be increased, there would be need for more prospective petroleum concession areas, along with qualified, well-trained and experienced E&P professionals not only for data collection and evaluation but also for drilling productive wells. Following acquisition of additional concession areas, OGDCL can proceed by hiring consultants to fill the gap till it can train the additionally hired professional staff for effective handling of their responsibilities.

Generally, all E&P companies prepare their plans on short, medium, and long term basis for 5, 10, 15, and 20 years period and accordingly plan the availability of manpower and financial resources to meet the set targets. Therefore, for planning any level of exploration activity, OGDCL will have to follow the well laid-down planning processes. It will be required to:

1. Acquire/hire staff and get it adequately trained by enlisting the services of competent consultants as and when required;

2. Prepare plans and acquire areas for a continuous, planned, and sustained activity;

3. Prepare plans for data collection/acquisition and take practical measures, including increasing its stock of seismic equipment as well as manpower, or, alternately hire private services for seismic activities aimed at acquiring and processing 2D/3D seismic data for evaluating the prospects for success of each and every area;

4. Prepare plans and take practical steps to process 2D/ 3D seismic data and thus facilitate the job of professionals to interpret it and come up with oil/gas prospective well-drilling locations; and finally,

5. When they get some leads and are able to identify prospective well locations, with planned drilling depths, the supporting departments will be required to put resources together to procure well consumables and services required for practically drilling and possible completion of wells.

For minimising project costs, it is important not to use over-designed and oversized service equipment/rigs. As E&P business is capital intensive, it is essential that the top technical team of each department is professionally competent, has best managerial and technical skills and the ability to efficiently manage and coordinate with sister departments so that the technical as well as administrative decisions are made well in time for best possible results.

Latif Ahmad Rana is a former Executive Director of OGDCL.

E-mail: [email protected]

Alauddin Masood is a freelance columnist based at Islamabad.

E-mail: [email protected]

 

Fiscal consolidation

The government needs to balance the economy rather than the budget

By Hussain H. Zaidi

According to the Fiscal Policy Statement 2009-10, recently issued by the Federal Finance Ministry, fiscal consolidation remains at top of the government’s macro-economic stabilisation efforts. Fiscal consolidation is a euphemism for reducing fiscal deficit, which during last two years has been a major macro-economic challenge for the PPP government.

Contrary to popular view, fiscal deficit is not inherently a vice. Whether the government should have fiscal deficit or surplus depends on the state of economy. As famous economist Lord Keynes remarked, "The government should seek to balance the economy rather than the budget. In case of widespread unemployment and deficiency of aggregate demand, fiscal deficit should stimulate the economy, whereas in case of inflationary boom, fiscal surplus should be preferred. However, at any rate fiscal deficit needs to be kept within manageable limits, otherwise it can destabilise the economy."

Though both developed and developing economies face fiscal deficit, the problem is more serious in case of the latter. This is for more than one reason. Whereas for developed countries, the major economic problem is to maintain a steady growth rate, for developing countries it is both to accelerate the growth rate and maintain economic stability. Hence, developing countries need a higher investment-GDP ratio to add to the capital stock and accelerate the rate of capital formation. The government also needs to create the social capital — education, health, public utilities — and physical infrastructure, which make an expansionary fiscal policy necessary. On the other hand, due to low level of business activity and income and a culture of tax evasion, it is difficult for public revenue to match public spending.

Coming to Pakistan, fiscal deficit rose dramatically to 7.6 percent of GDP in financial year (FY) 08 from 4.3 percent of GDP in FY07. During FY09, fiscal deficit was reduced to 5.2 percent of GDP though the budgetary target was 4.3 percent. For FY10, the current fiscal year, the fiscal deficit target is 4.9 percent of GDP. This envisages expenditure-GDP ratio of 19.4 percent (compared with 19.3 percent during FY09) and revenue-GDP ratio of 14.5 percent (compared with 14.1 percent during FY09). The GDP growth target for FY10 as set out in the budget was 3.3 percent. However, as per State Bank of Pakistan (SBP) projections, the economy will grow at 3 percent.

It may be mentioned that during 1990s, average fiscal deficit-GDP ratio was 7 percent, well above the current level of around 5 percent. However, decline in fiscal deficit has more to do with fall in expenditure than increase in revenue. During 1990s, average expenditure-GDP ratio was 23.6 percent, while revenue GDP ratio was 16.8 percent, well above the current levels of expenditure (19.3 percent) and revenue (14.1 percent).

In theory, the simple way to contain the fiscal deficit is to reduce expenditure or increase revenue. However, this is easier said than done. Given the political economy of Pakistan together with the war on terror, which is consuming a sizable portion of public resources, if there are to be any drastic cuts in public spending, these have to be on development expenditure or subsidies. Development spending for FY08 (including both federal and provincial) was Rs 452 billion. The FY09 budgetary estimates for development spending were Rs 516.6 billion; however, actual spending was Rs 448.8 billion. For FY10, development spending estimates were Rs 763.1 billion, which were revised to Rs 616 billion and are now projected to be only Rs 510 billion. During the first half of FY10, the actual development spending was Rs 116 billion, which suggests that even Rs 510 billion projections are on the higher side.

On the other hand, current expenditure in FY08 was Rs 1.86 trillion. The actual expenditure during FY09 was Rs 2.04 trillion against the budget estimates of Rs 1.86 trillion. For FY10, budgetary current spending estimates were Rs 2.10 trillion, which were revised upward to Rs 2.26 trillion and are projected to be 2.40 trillion.

Now we come to the other side of fiscal deficit — public revenue. Total revenue in FY08 was Rs 1.50 trillion including tax revenue of 1.05 trillion and non-tax revenue of Rs 414 billion. The revenue collected during FY09 was Rs 1.85 trillion (including tax and non tax revenue of Rs 1.20 trillion and Rs 646 billion respectively) against the budget estimates of Rs 1.80 trillion. For FY10, budgetary revenue estimates were Rs 2.15 trillion, and are projected to be 2.18 trillion. During the first half of FY10, revenue collected was Rs 427 billion.

Though public revenue is on the increase in absolute terms, in relative terms i.e. as part of the GDP it has come down. For instance, revenue-GDP ratio in FY07 was 14.9 percent, which came down to 14.6 percent in FY08 and further to 14.1 percent in FY09. For FY10, the revenue-GDP target is 14.5 percent. In particular, Pakistan has one of the lowest tax-GDP ratios in the region, which came down to 9.2 percent in FY09 from 10.6 percent in FY08. Even during robust economic growth of 7 percent on average from FY03-FY07, the revenue GDP ration stuck around 14 percent. In fact during FY05 when the economy grew at 9 percent, arguably the fastest ever in the country’s history, revenue-GDP ratio was only 13.8 percent — one of the lowest ever.

Thus the GDP growth has not been matched by revenue growth, particularly that of tax revenue. According to the Fiscal Policy Statement 2009-2010, in real terms tax revenue has registered sluggish growth of 1.4 percent during last five years (FY05-FY09) compared with fairly healthy average GDP growth of 5.5 percent during this period. The reason, as the statement itself points out, is that major contributors to economic growth — services and agriculture — are outside the tax net.

In order to increase tax revenue, either direct or indirect receipts will have to be increased. Any increase in indirect taxes shifts the burden to the consumer and results in price increase. Moreover, indirect taxes are essentially regressive as the burden is shifted equally regardless of income. Another problem with indirect taxes is the elasticity of demand. Since demand for essential goods is inelastic and that for luxuries elastic, increase in taxes on luxuries may reduce revenue while that on essential goods increase revenue. Though economically it may be a better option to increase taxes on essential goods, socially and politically such a move is difficult as it will further reduce disposable real income of low income groups, who spend a major portion of their budget on such goods. Thus, any increase in taxes has to be in direct taxes. However, the problem with direct taxes is that these are easier to evade and require an efficient tax collection machinery and tax culture.

At the behest of the International Monetary Fund (IMF), the government is planning to introduce value-added tax (VAT) from the next financial year. The VAT will be levied on both goods and services to be collected by the federal government and the provinces respectively.

Pakistan needs an expansionary fiscal policy to stimulate the economy and maintain healthy growth momentum. However, to avoid serious fiscal and other macro-economic imbalances, such as inflation, public revenue needs substantial appreciation. Economic growth feeds on itself. Growth creates jobs, revenue and additional incomes, which in turn spur growth.

E-mail: [email protected]

 

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