planning
Reality of poor 
governance
The state has no option but to perform, both on account of
service delivery and
expectations management, or wither away
By Rashid
Mahmood Langrial
Were Rip Van Winkle to wake up in the year of our Lord Two Thousand and Eleven and fed on the diet of Pakistani newspapers and TV talk shows for a week or so, he would conclude that Pakistanis are a people who have lost their paradise; and Pakistan is a place where governance and service delivery have suddenly got muddied. Having gone asleep in the Catskill Mountains, Rip would not know much about our past except what transpires through the nostalgic pieces of columnists and doomsday warnings of the commentators. Such stories of state failure would convince him that we are living through the worst time of our history and that we were a splendid people before.

firstperson
Academic concerns
Half of all the students in madrassas have been pushed out from government schools
By Raza Khan
Dr Christopher Candland is an American professor of Political Science who teaches Comparative Politics and Political Economy at the Wellesley College near Boston, Massachusetts. Born and raised in central Pennsylvania, as a teenager he lived in South India for a few years where his interest in South Asia began. After attending college, he worked for three years to assist Tibetan refugees in India, Afghan refugees in Pakistan, and internally displaced people in Sri Lanka. He did his M.Phil in Political Science in 1992 and PhD in the same subject in 1996 from Columbia University.

Keeping things in perspective
The elite remains too self-indulgent and
preoccupied to be even aware of the nature of challenge that society faces
By Aasim Sajjad Akhtar
With the deepening of winter the gas shortage throughout the country’s largest province and major metropolitan centres is becoming increasingly acute. Queues outside petrol pumps extend for hundreds of metres while a substantial proportion of household consumers is having to find alternative ways to light stoves and put food on the table. Unsurprisingly, there are more and more reports of spontaneous protests erupting in many cities across the country.

trade
Dumping ground
Will our exporters gain anything from the $35bn
Pak-China trade deals?
By Shahzada Irfan Ahmed
The recent visit of Chinese Premier Wen Jiabao to Pakistan and signing of economic deals worth $35 billion are being widely discussed at different forums. The deals include 17 agreements and four memorandums of understanding (MoUs). There is also an agreement between a Chinese company and the Alternative Energy Development Board (AEDB) of Pakistan for setting up wind power and solar energy projects in the country.

Outside the tax net
Tax scams can only be countered through a permanent commission, representing the people of Pakistan
By Huzaima Bukhari and Dr Ikramul Haq
The Federal Board of Revenue (FBR), even after eight years of Tax Administration Reforms Programme (TARP) symbolizes an institution which has failed to deliver. The persistent episodes of tax scams: fake refunds, flying sales tax invoices, rampant smuggling, under and over-invoicing, clearance of goods without duty and excessive payments of export rebates, just to mention a few, confirm the existence of an alliance between corrupt tax officials and unscrupulous businessmen that is depriving the nation of billions of rupees and criminally shifting the incidence of taxes to the poor.

treatment
From survivors to victims
Those who have survived terror attacks need more attention than we think they do
By Dr Noman Ahmed
On the occasion of Benazir Bhutto’s death anniversary, many voices of the directly affected people from terror attacks were heard once again. Households who lost bread-earners were a special mention. Most of them were asking the government to generate sustainable means for generating daily livelihood. And these pleas are not limited to this tragic episode alone.

Progress or
disappointment?
The summit on climate change in Cancun seems to have failed in leaving an impact
By Irfan Mufti
The United Nations Climate Change Conference took place in Cancun, Mexico from 29 November to 10 December 2010. The event encompassed the sixteenth Conference of the Parties (COP) and the sixth Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol (CMP).

The question of leadership
Politicians, it seems, are not hesitant in exposing themselves one more time
By Salman Abid
The question whether Pakistan’s leaders believe in democratic values and practices is perhaps not very difficult to answer, especially after the recent no-holds-barred fight between politicians from the PML-N and MQM, we now know quite well. The gap between leaders, workers and common people is widening by every day passing and all of them seem to be living a life in isolation.

 

 

planning

Reality of poor

governance

The state has no option but to perform, both on account of
service delivery and
expectations management, or wither away

By Rashid

Mahmood Langrial

Were Rip Van Winkle to wake up in the year of our Lord Two Thousand and Eleven and fed on the diet of Pakistani newspapers and TV talk shows for a week or so, he would conclude that Pakistanis are a people who have lost their paradise; and Pakistan is a place where governance and service delivery have suddenly got muddied. Having gone asleep in the Catskill Mountains, Rip would not know much about our past except what transpires through the nostalgic pieces of columnists and doomsday warnings of the commentators. Such stories of state failure would convince him that we are living through the worst time of our history and that we were a splendid people before.

Are we really worst ever in terms of governance and service delivery? Let’s not forget that but for panegyrics of the court historians, we always had a predatory state in this part of the world: living on the Western marches of the Delhi Sultanate, we were a fair kill both for the invader and the warden; sight of a Mughal soldier was a bad luck omen for the countryside and lucky were the villages that remained deprived of the ‘largesse of the state’. Babur-bani, Guru Nanak’s hymns about Babar’s invasion of India, reflect the pangs of a thinking soul in this land of five rivers over the machinations of the statecraft those days. British sojourn in areas now comprising Pakistan was a little more than a hundred years and while railways were laid and canals were built, schooling and health facilities were made available to only a tiny part of the population, mainly in cities and larger towns.

Since independence, there has been a slow but sure improvement in productivity, in schooling and in health coverage. Both in terms of purchasing power and service delivery, society has experienced significant gains. Infant mortality has declined from 160 deaths per 1000 live births to less than 70 deaths per one thousand live births and per capita health expenditures have gone up over time. Likewise, the schooling coverage has seen a mind-boggling growth: during 100 years of British rule just 6444 schools were established at all levels in what is today Punjab province of Pakistan; since then, in 63 years, some 53718 schools have been established in the public sector alone. Inflation-adjusted per capita purchasing power in Pakistan has also improved from 1393 US dollars in 1980 to 2678 US dollars in 2010.

This is a phenomenal increase in purchasing power over three decades, though slower than in neighbouring India where purchasing power has grown by more than three times in the similar timeframe. Even in case of India, Pakistan has fared better on this account till 2005 and it is only since then that our per capita purchasing power has lagged behind that of India. One might recall that per capita national income in the United States has grown by just 72 percent in the same period of time.

Confronted with this kind of data, doomsday prophets point to other ills of the state like systematic political corruption. There is no denying the fact that these ills are eating at the very élan of our state and society but are these ills unique to our nation or to our times? A cursory survey of Indian statecraft reveals that use of public money for personal and or family benefit has been a norm rather than an exception. In Mughal times, the imperial household was the centerpiece of the empire and bribery was institutionalised as peshkash/nazrana from the lower to higher officials. Both Ain-i-Akbari and Hidayat-ul-Qawaid justify the practice of gifts on the analogy of religious offerings to dead saints.

Office holders across the empire accepted bribes and offered bribes either to retain office or to seek forgiveness for excesses against the state or people. Shaikh Ilm-ud-din Ansari, a native of Chiniot, first a court physician to Shah Jahan and later, the Governor of Lahore, was famous for taking huge bribes, sometimes Rs30,000 a day. We, however, know him only as builder of Masjid Wazir Khan. Nur Jahan, another icon on Lahore’s landscape, got Jala’ir Khan appointed as Governor of Orissa in return for 300000 rupees. On the other side of the globe, graft under ‘machine politics’ was a norm in the United States well into 1930s where a boss would use public goods to buy voters and ran all major American cities essentially on mafia lines.

Then is the rumpus about nothing? It cannot be; probably the rumpus is genuine, the diagnostics are not. Citizens are genuinely disenchanted with the state of affairs: there is a definite gap between the level of expectations and level of delivery of the state services. Let’s not forget that the rumpus is not very old; at best it has been there for a decade. So either the state’s services have deteriorated very sharply in a decade or so or the expectations of the people have followed a vertical trajectory. We have seen that people of this part of the world have lived in peace with much worse level of governance and service delivery since times immemorial. So what has changed is the ‘set of expectations’ from the state.

Information revolution (internet, satellite TV and mobile telephony) has exposed the people to better models of service delivery elsewhere in the world and they are no more content to be left alone by the state; they see live images of accident rescue, emergency health coverage and better functioning schools; they also see how democratically elected leaders are held accountable elsewhere in the world; therefore, they want at least a fraction of the quality of state services for themselves and their children. Unique about this republic is not a sudden failure in delivery of state services but an accelerating surge in expectations, made possible on account of an exogenous variable i.e. information technology. Expectations that would have taken decades to firm up in normal course of events, have come of age in years: classic case of asymmetric development, generating a system-wide disequilibrium.

Every state has two essential functions to perform: to deliver services where market either cannot deliver or fails to deliver and to coordinate divergent expectations of various players in delivery of such services. While state in this part of the world had always failed in delivery of services, its failure in expectations management is a recent phenomenon. While national, sub-national and local governments are collectively as well as individually responsible for improving service delivery, service delivery levels are not likely to even get close to expectation levels in the foreseeable future, howsoever hard these governments strive; therefore, the entire ruling class, whether in power or in opposition and the commanding heights of other branches of the state are all jointly and severally responsible for managing expectations.

In this age of almost zero-cost information, the state has no option but to perform -- both on account of service delivery and expectations management -- or wither away; either the state’s service delivery curve and the expectations curve in the stylized figure above move towards each other or the gap would become too huge to be sustained by either the force of arms or the mantra of democracy.

[email protected]

 

 

 

firstperson

Academic concerns

Half of all the students in madrassas have been pushed out from government schools

By Raza Khan

Dr Christopher Candland is an American professor of Political Science who teaches Comparative Politics and Political Economy at the Wellesley College near Boston, Massachusetts. Born and raised in central Pennsylvania, as a teenager he lived in South India for a few years where his interest in South Asia began. After attending college, he worked for three years to assist Tibetan refugees in India, Afghan refugees in Pakistan, and internally displaced people in Sri Lanka. He did his M.Phil in Political Science in 1992 and PhD in the same subject in 1996 from Columbia University.

Candland has deep interest in Buddhist arts, Islamic social thought, soccer, and squash. He came to Pakistan for the first time in early 1990s to conduct research on labour unions for his doctoral dissertation. This was a comparative study of the impact of labour unions on the economy and politics. He has been visiting Pakistan on some occasions ever since. Candland is the Co-Founder and Advisor of Center for Religious and Community Studies, Surabaya Indonesia. His major publications include: "Core Labour Standards under the Administration of George W. Bush," (International Labour Review 2009), "Labour, Democratization, and Development in India and Pakistan", (Routledge 2007), and "Education Reform in Pakistan", (Wilson Center, 2005), among others.

Candland recently visited Pakistan to conduct a Workshop organized by American Institute of Pakistan Studies and Higher Education Commission of Pakistan (HEC) for doctoral candidates. The News on Sunday had an opportunity to know his views on various issues about Pakistan and the rest of the world. Excerpts from the interview follow:

 

The News on Sunday (TNS): You have done research on Pakistani madrassas. Do you believe madrassas teach violence to their students?

Christopher Candland (CC): I did not use research methods that would have allowed me to determine whether madrassas teach students violence. I don’t know of any study that has used such methods. To prove that an education, and not other factors, makes students violent, one would need to do experimental research, sending identical twins to different schools and monitoring them over years for violent behaviour. My survey did find that students in madrassas, in government schools, and in private schools were no more likely to advocate violence to address perceived injustices, with the significant exception of Kashmir. Madrassa students, in my survey, were more likely to advocate violence to address perceived injustices in (Occupied) Kashmir.

TNS: What aspects of madrassas in Pakistan negatively affect their students?

CC: Madrassas were designed to impart knowledge of Islam to the younger generations who begin in a madrassa and would then go onto study in a Darul Uloom and then a Jamia. Since the late 1970s, however, madrassas have also become institutions of social welfare. Many of them are struggling with the rival responsibilities of providing basic education in Islam and serving as welfare centres. By one account, half of all the students in madrassas have been pushed out from government schools. I think that it’s more a matter of substandard national education system having an adverse impact on madrassa education than a madrassa education having a negative impact on their students’ education. Madrassas are doing a lot of good for many with very limited resources.

TNS: There have been many initiatives in Pakistan for reforming madrassas. Why have they failed?

CC: Interestingly, the reforms that were initiated by the Ayub Khan government succeeded in East Pakistan after the creation of Bangladesh. Bangladesh now has a system of government-operated madrassas, separate from its system of private madrassas that provide students with an excellent education. My sense is that reforms in Pakistan have failed because, historically, governments have not worked in good faith with madrassas but have rather threatened madrassa educators with closure if they failed to comply with government policy.

TNS: What kind of reforms do Pakistani madrassas need?

CC: I think that’s a question best answered by madrassa teachers. I think teachers are in the best position to know what their students needs are. The population of Pakistan, of course, is predominantly Muslim, but Pakistan is a very culturally diverse society. My sense is that many madrassa teachers would like to prepare their students for a productive and fruitful life in this culturally diverse country.

TNS: What is the general perception within American academia about Pakistan’s future?

CC: Unfortunately, there are fewer American academics thinking about Pakistan now than there were just a decade ago. Those of us who do think about Pakistan are concerned with the same things that our counterparts in Pakistani academia are concerned about. Pakistan’s natural resources are under severe strain. Readily curable diseases and illnesses kill tens of thousands of people every year. Unemployment is high and increasing. The supply of education is far lower than demand. Clean air and water is increasingly scarce. The population growth rate is unsustainable. These are life and death concerns that are not being given the attention that they demand.

TNS: In a nutshell, how would you evaluate the relationship between the United States and Pakistan? Has it been a client-patron relationship or has Pakistan also influenced US politics?

CC: In a nutshell, my view is that the relationship has been badly distorted by what governments call national security concerns. As you know, the relationship has been primarily mediated by military and intelligence agencies. This has not been good for ordinary people. As for the relationship between the people of Pakistan and the people of the United States, unfortunately, it has been one-sided. Many Pakistanis know the United States very well. Hundreds of thousands of Pakistanis live in the United States. But few citizens of the United States have any real sense of Pakistan.

TNS: Do you think that WikiLeaks revelations will affect Pak-US relations?

CC: I imagine that you are referring to relations between the government of Pakistan and the government of United States and to the leak of the US Department of State cables. Whatever was said by Pakistani officials to US Department of State officials and then reported to Washington must have been said knowing, perhaps even hoping, that US Department of State officials would report these comments back to Washington. Thus, I think it unlikely that disclosures of US Department of State reporting would affect Pakistan-United States government-to-government relations. As for relations between Pakistani and American people, I suspect that those who closely follow politics between the two countries will not have learned much.

TNS: Do you think that absence of constitutional government and democracy contributed to rise of Islamic extremism and terrorism in Pakistan?

CC: I would not like to talk in terms of "absence" of constitutional government or "absence" of democracy. I think that constitutional government and democracy are not so much things that either exist or do not exist, as much as they are established patterns of behaviour and of thought that must be constantly defended and protected. As for extremism and terrorism, I think that everywhere violence is bred by violence.

 

Keeping things in perspective

The elite remains too self-indulgent and
preoccupied to be even aware of the nature of challenge that society faces

By Aasim Sajjad Akhtar

With the deepening of winter the gas shortage throughout the country’s largest province and major metropolitan centres is becoming increasingly acute. Queues outside petrol pumps extend for hundreds of metres while a substantial proportion of household consumers is having to find alternative ways to light stoves and put food on the table. Unsurprisingly, there are more and more reports of spontaneous protests erupting in many cities across the country.

Perhaps it should also come as no surprise that this forced ‘hardship’ is not giving rise to a realisation about the bitter realities of life outside of Punjab and urban centres elsewhere. In large parts of the rest of the country, gas shortages are not seasonally experienced; most ordinary people face perennial shortages, or even make do with gas altogether (and, for that matter, other basic amenities).

It would not be inappropriate to start by reiterating what most informed observers already know -- that in the very home of ‘Sui’ gas, most ordinary people can only dream about uninterrupted supplies of this form of the black gold. In recent decades, Balochistan has been overtaken by Sindh as the major supplier of oil and gas to the rest of the country, but here too there are too many regions that do not enjoy access to the resource being extracted from their own lands and provided to the rest.

If those of us living in the Pakistani heartland are seething at the gas shortage that we are currently confronting, imagine the fury of those who do not benefit from gas even when supply is unceasing in our homes, workplaces and schools. For too long too many of us have conveniently depicted this as a classic case of the Baloch and Sindhi elite depriving their own people of basic amenities. It is high time that we moved beyond this tired argument and recognise the facts for what they are.

This brings me to the next and related point about our overwhelming dependence on imported oil to meet our energy needs. Of particular significance is the relationship that we have cultivated over time with our Gulf neighbours. While we have always imported oil from Saudi Arabia and the United Arab Emirates (UAE), since the 1970s greater links have been forged between Islamabad and the Gulf States. It was during Zulfikar Ali Bhutto’s time in office that the policy of sending migrant workers to the Gulf was initiated, and since then the scale of oil imports are also increased dramatically.

In the last decade or so, Pakistan has been awash with Arab capital: a substantial proportion of investment from the Gulf has been in telecommunications and banking, but there is also major investment in land and the stock market. This money is largely unaccountable and is both cause and consequence of the tremendous influence that the autocratic rulers of Saudi Arabia and the UAE exercise on Pakistani politics.

So, if on the one hand the relatively limited reserves of oil and gas within Pakistan are the cause of significant social and political conflict across provinces and ethnic groups, then on the other hand the import of oil and gas from the Gulf is fast making us into a colonial dependency of Arab princes. Let us not forget that the latter ‘relationship’ has also been one of the major contributing factors to the emergence and spread of militant Islamist ideology within the wider society.

There is hence an urgent need to think deeply about how to address the serious energy problems we currently face. I do not believe that it is healthy to think about this question in a purely utilitarian manner. I wrote some weeks ago about the impossibility of increasing our energy demands indefinitely into the future. Of course, it would be foolish to assume that a rapidly-growing population will not demand more and more energy in years to come. But it is imperative that we in the Pakistani heartland recognise that it is primarily our responsibility to make sense of the serious structural problems that lie at the heart of energy shortages and also to make necessary sacrifices that may reduce political and social conflicts within, and undo external dependence.

As always this is a challenge that should be taken on primarily by the educated elite. It is the elite that consumes energy in unsustainable ways and it is largely to maintain this lifestyle of the elite that the rest of the country -- including the subordinate classes within Punjab -- slave away their lives. Sadly, this elite remains too self-indulgent and preoccupied to be even aware of the nature of the challenge that society faces in this regard. I might even add that this elite is fully convinced of its right to live as ostentatiously as it does, in spite of the miseries and injustices that surround it.

The elite is relatively synonymous with our policymakers, who have demonstrated little foresight till now. We have been reading in the news for some years now about a prospective gas pipeline from Iran (and to which India was, at least for a while, also party). But as of now nothing has come of this project -- in any case, the Asian Development Bank (ADB) appears to be in the mix and this hardly bodes well for us given how the ADB and its sister institutions have treated us in the past. There is little else that has been tabled aside from this proposal, and definitely nothing along the lines of a public transport system which would arguably be a much better investment than exploiting any fixed-term renewable energy source.

In short, there is little reason to feel positive about things as we wait in lines and wonder when our stoves will be lit. But as we ‘suffer’ through this winter season it is important not to lose sight of the fact that most of city dwellers are still very privileged vis-a-vis the rest of society and that it is irresponsible of us to continue to thinking about the ‘crises’ that afflict Pakistan only in terms of how they erode our comforts. A much broader perspective is called for and if we fail to develop one we will have only ourselves to blame.

 

trade

Dumping ground

Will our exporters gain anything from the $35bn
Pak-China trade deals?

By Shahzada Irfan Ahmed

The recent visit of Chinese Premier Wen Jiabao to Pakistan and signing of economic deals worth $35 billion are being widely discussed at different forums. The deals include 17 agreements and four memorandums of understanding (MoUs). There is also an agreement between a Chinese company and the Alternative Energy Development Board (AEDB) of Pakistan for setting up wind power and solar energy projects in the country.

The figure seems highly appealing to the eye but in press reports there is hardly a mention of the respective share of both the countries in this trade. An analysis of mutual trade statistics reveals that since the signing of Free Trade Agreement (FTA) between the two countries in Nov 2006, China has exported goods worth around $ 11 billion whereas Pakistan’s exports could hardly reach $ 0.25 billion.

Another misbalance in this respect is that Pakistan imports about 1,000 items from China while the latter’s export-basket is limited to hardly 50 items. Pakistan exports items like seafood, cotton yarn, leather, marble, fruits, sports goods, rice, raw hides and vegetables. On the other hand, China exports almost every thing available under the sun to Pakistan and that also at very low prices. Mass availability of these goods at low rates has pushed local industry out of competition.

Pakistan’s local industry alleges that the absence of government patronage and lack of supporting infrastructure, like energy, water, roads, has spurred import of cheap Chinese goods into Pakistan. Industrialists say China dumps a lot of goods into Pakistan but no action is taken for various reasons. The biggest of these is that Pakistan does not want to take even a symbolic step that harms friendly relations between the two, they add.

Complaints about dumping have to be filed with the World Trade Organisation (WTO) which inquires into them. "Dumping means export of goods by a country at prices lower than those at which these goods are being sold in the exporting country’s local market," says Tahir Fayyaz, a garment importer based in Karachi. He says such countries manufacture products in excess of their local demand to benefit from economies of scale and dispose off the surplus in countries where similar industry is in a stage of infancy or on a decline.

The countries dumping goods in other countries are not worried about the price at which they are exporting them as they earn sufficient revenues from collective sales. Tahir adds that many industrialists have shut down their units and turned to imports. "This is a hassle-free business where you do not have to tackle officials of dozens of departments, as is the case with industry," he says.

The question that arises here is how Pakistan can increase its share in mutual trade and boost its industrial sector’s contribution to exports to China. Critics say Pakistan should not shy away from raising dumping issues with China. However, this is something difficult, keeping in view the dependence of Pakistan on China in almost every field of life, ranging from education, technical assistance and engineering to defence, energy, and what not.

India, on the other hand, has still not signed free trade agreement with China and imposed anti-dumping import duties on yarn, fabric, nylon being imported from China. The country even has a Directorate General of Anti-dumping and Allied Duties (DGAD) which functions under the Commerce Ministry. The fact that India has filed a record number of anti-dumping cases against China at the World Trade Organization (WTO) also explains how protectionist the former is of its industry.

According to the WTO, a company can be charged with dumping if it exports a product at a price lower than what it normally charges in its own home market or if the import volume grows to an extent that leaves domestic manufacturers at a disadvantage.

Pakistan’s local industries have launched reports that call for taking up of this matter with WTO but so far nothing concrete has been done. For example, a report prepared by the Lahore Chamber of Commerce and Industry (LCCI) reveals that due to the dumping of China clay crockery from China, the pottery industry of Pakistan has disappeared from centers like Gujranwala and Gujrat.

The report says out of a total of five units, four have closed their commercial operations. These are Prey China, Dada Bhoy, Pakpur, and Regal China while the last one -- Lone China -- is on the verge of collapse. It adds the price of imported Chinese crockery has gone down drastically during the last one year, despite the fact that there has been no significant change in the cost of inputs.

Another major objection of Pakistani industrialists is that the system of export refinancing by the Chinese government falls under the definition of dumping under the World Trade Organisation (WTO) regime. Their claim is that Chinese exporters, who secure orders from foreign buyers, are given interest free loans equivalent to the amount of export orders. "Besides, different other subsidies like those in freight, etc, put other countries at a disadvantage," they say.

Despite all these contentious issue, there is no denying the fact that China is Pakistan’s major ally when it comes to strategic international alliances in the world. But this must not translate into death of Pakistan’s local industry which gives employment and sustenance to millions of its citizens. In this scenario, Pakistan government must ensure that the matter is taken up with China in a friendly manner and a solution found.

 

Outside the tax net

Tax scams can only be countered through a permanent commission, representing the people of Pakistan

By Huzaima Bukhari and Dr Ikramul Haq

The Federal Board of Revenue (FBR), even after eight years of Tax Administration Reforms Programme (TARP) symbolizes an institution which has failed to deliver. The persistent episodes of tax scams: fake refunds, flying sales tax invoices, rampant smuggling, under and over-invoicing, clearance of goods without duty and excessive payments of export rebates, just to mention a few, confirm the existence of an alliance between corrupt tax officials and unscrupulous businessmen that is depriving the nation of billions of rupees and criminally shifting the incidence of taxes to the poor.

According to a Press report, the FBR on December 27, 2010 blacklisted some 102 companies, allegedly involved "in minting money on fraudulent sales tax refund claims". It is revealed that the Office of the Directorate of Intelligence and Investigation, Islamabad, received a tip-off that some 102 registered units were getting fake sales tax refunds, with the connivance of tax officials. The loss of revenue is estimated to the tune of Rs1 billion.

In recent years, FBR has been making tall claims about its automation efforts. Chairman FBR has informed the public time and again that after introduction of automated procedures in all departments, possibilities of tax fraud were countered effectively. On the contrary, figures show that since 2005 after introduction of computerized procedures, the incidences of tax frauds increased many a times as compared to the days when manual procedures were in vogue. It shows that before going for automation, system analyses were not properly conducted and human resource development was completely ignored. Increases in tax scams testify to the fact that there is complete failure on the part of FBR to implement pre-emptive measures against possible tax frauds.

Tax frauds recently surfaced and reported in Press have been detected by the Directorate-General of Intelligence, FBR or teams of Auditor General of Pakistan. These represent only a tip of the iceberg. The actual number of tax frauds committed during the last 20 years and quantum of tax involved are yet to be determined. The government must immediately form a commission comprising of anti-corruption officials, judges, auditors and tax experts to thoroughly probe the record of the last 20 years of all the tax departments and unearth all cases of tax frauds. Retrieval of public money through this commission would substantially increase tax collection for the current year, which is already adversely affected due to recession and devastating floods.

Summary of major tax frauds recently reported in the Press seem to establish criminal culpability of the staff and high-ups of FBR:

On December 14, 2010, Directorate of Intelligence and Investigation, Lahore, registered an FIR against 32 tax evaders, involved in claim of illegal input tax adjustment on the basis of fake sales tax invoices, issued by a cartel of deceivers. The quantum of evasion detected in this scam was Rs613 million.

On August 1, 2010, the Directorate General, Intelligence and Investigation, Karachi, unearthed a tax fraud involving millions of rupees, against some prominent importers of low carbon wire rods. The action was taken on a tip-off, which said that some importers, with the connivance and collusion of their clearing agents and the concerned customs staff, were involved in clearance of imported consignments of low carbon wire rods, at nominal value, through Model Customs Collectorate.

During 2009-10, Directorate General, Intelligence and Investigation, Karachi alone detected tax fraud cases involving Rs1.377 billion revenue. There were 35 customs seizures of Rs38.79 million, while the anti-smuggling organisation wing made 245 seizures of Rs490.56 million. Statistics further revealed that 9 tax fraud cases of the federal excise and sales tax involving Rs237.96 million were detected.

On 14 January, 2008, Directorate-General of Intelligence and Investigation detected an organised tax fraud in Punjab involving a gang of income tax officials, who issued fraudulent refunds to fake government contractors. According to details, "the nature of this tax fraud was entirely different from the modus operandi of the income tax gangs recently busted in Enforcement Zone, Companies-IV, Karachi and Lahore".

On 5 January 2008, a report was published in leading newspapers disclosing that FBR unearthed a scam in Lahore involving a senior income tax official (Grade-20), who allegedly issued bogus refunds of over Rs103 million in 39 cases on forged documents during 2003-2007. Earlier a similar scam was reported in Karachi.

On 22 October 2007, Directorate-General of Intelligence, Customs and Excise, instituted criminal proceedings against 14 industrial units of Punjab for claiming illegal sales tax refunds by filing bogus invoices. The fraud took place two years ago when many commercial exporters had claimed illegal refunds on the basis of fake documents (FBR took two years to take notice of the crime). Obviously, the beneficiaries were giving huge bribes to concerned officials, who are still working without any fear of accountability.

On 14 May 14 2006, the apex court rejected the bail application of one Raja Zaraat, "who had been wielding far larger financial clout than originally estimated" in getting billions of rupees as tax refund on forged documents (according to a Press release of FBR). FBR disclosed that although the first compliant against the accused was received by it in December 2005 yet no action was taken till 4 May 2006 when the accused was arrested in Islamabad. It is obvious that this colossal tax fraud was not possible without the connivance of tax officials.

It is strange that on the one hand tall claims about improvements in integrity levels under the TARP have been made and, on the other, blatant acts of tax fraud and fraudulent refunds have increased manifold. The refund scams and tax frauds unearthed in Karachi, Lahore and other parts of the country during the last few years are a slap in the face of FBR high-ups who have been misleading the nation by claiming that "wonders" have been achieved under the TARP.

The increased number of refund scams and unfettered tax evasion confirm that nothing has changed. It is a sad reflection on FBR’s top management. The corrupt and resourceful are still holding key posts and are issuing refunds on forged documents. They are still encouraging profit-hungry traders and businessmen not to pay taxes by just giving them their due ‘share’. In the mornings, they sit in offices while their evenings are spent in rendering ‘professional’ services. It is beyond any doubt that the prevalent mass-scale evasion of taxes is not possible without the connivance of tax administrators.

Tax-evaders and tax administrators together constitute a mafia that has made Pakistan a haven for tax dodgers and plunderers of national wealth. Tax officials holding key posts are directly connected with these people. They design and get implemented policies for mutually-beneficial relations between them while the whole nation watches as a silent spectator. The outcome is total destruction of our socio-economic system (ever-increasing rich-poor divide, chaos and lawlessness). The indomitable civil-military complex, mighty politician-cum-industrialists and tax evaders are ruling Pakistan. The policies of appeasement towards politician-cum-industrialist, unscrupulous traders and businessmen are obviously not without any personal interest. In such circumstances, tax scams can only be countered through a permanent commission, representing the people of Pakistan, which should probe the cases and release reports in the Press on a monthly basis while the judiciary, taking suo motu action should give exemplary punishments.

The writers, tax lawyers, are Adjunct Professors at Lahore University of Management Sciences (LUMS)

 

treatment

From survivors to victims

Those who have survived terror attacks need more attention than we think they do

By Dr Noman Ahmed

On the occasion of Benazir Bhutto’s death anniversary, many voices of the directly affected people from terror attacks were heard once again. Households who lost bread-earners were a special mention. Most of them were asking the government to generate sustainable means for generating daily livelihood. And these pleas are not limited to this tragic episode alone.

Incidents of terror have left thousands dead, tens of thousands maimed, and hundreds of thousands directly affected in many ways. Direct social and economic outcomes include loss of bread-earners in extended families, loss of spouses, rise in the number of widows and orphans, destruction of houses and means of livelihoods, and physical and mental disabilities.

Many school-going children have been forced to discontinue their education due to the inability to bear the expenses. Several people had to abandon their house as they could not afford rents. Those who suffered serious injuries or lost a limb are also at the receiving end. In this situation, an effective policy is urgently needed to socially, economically, and psychologically rehabilitate the affected people. The most affected districts in Khyber Pakhtunkhwa should be priority areas followed by other affected areas.

The foremost requirement is the preparation of an accurate database of affected populations. A desk review of media reports about terror damages can be the starting point. Thanks to the multiple sources of print and electronic media, an effective way for baseline information can be called in to devise a strategy for swift documentation of individuals. The assignment shall demand creation of multiple layers of information about household characteristics, minors, original places of residence, and changes in the family status, etc.

This baseline information must be made a basis for developing need-based incentives for the target population. For instance, in places where widows and orphans are in large numbers, emphasis must be laid on skill development amongst women to earn a decent living. The contours of rehabilitation programme need to take into account cultural and religious sensitivities associated with the people. Orphans can be supported in a wide variety of ways. Concepts of gender-based orphanages under the supervision of trained managers may be promoted. There are many non-governmental organisations and welfare agencies that have significant experience of working in various locations. They deem basic facilitation and policy support from the government to launch their initiatives under a speedy approach.

Creation of opportunities for quality education and their protection is a foremost requirement. Incidents have shown that terrorists consider modern education as their biggest enemy. Hundreds of school buildings have been partly or completely destroyed whereas many school teachers have been murdered in cold blood. It is obvious that spread of modern education makes the most tenacious defense line against terrorism.

A multi-pronged strategy is required in the prevailing circumstances. Educational institutions must become recipients of generous governmental subsidy. Public schools and colleges must be reconstructed after fulfilling security pre-requisites. Educational activities should be revived with assistance from the local communities and reinforcement from governmental institutions. There are many non-governmental outfits that have credible record and experience in managing formal education.

The Citizens Foundation (TCF) is one example. It has begun its operations in Khyber Pakhtunkhwa during 2008. It will be most useful if TCF and similar institutions are assisted in taking up the task of setting up schools in terror-hit areas. These networks can also be entrusted the responsibility of teachers training. For involving local communities, endowments should be created under the trusteeship of area elders after careful scrutiny.

Allies in war on terror can be called in for help on this count. Exclusive institutions can be set up with active assistance and collaboration of United States Educational Foundation, British Council, and similar bodies after proper preparation and effective negotiation for collaboration. Friendly Muslim countries may also be invited to contribute in this social rebuilding task. Benefits of military operation will not be fully utilised until and unless affectees of terrorism are given the hope of a bright future. This feat cannot be achieved without imparting quality education.

Threats and consequences of terrorism can be turned into opportunities of action in some sectors. Healthcare is the most important. Public sector healthcare facilities have performed exceptionally well in minimizing the agonies and trauma of such heinous acts, their meager resources and capacities notwithstanding. However, many targeted measures still wait to be launched. Monetary and insurance incentives must be extended to those medical practitioners and paramedical staff who have served under most adverse circumstances. Certain units and fields of specialisation must be bolstered. Burns units and trauma care are two mentions.

Blast victims suffer from burn injuries of very serious nature. In many cases, other complications evolve due to limited facilities. Public healthcare institutions must be bolstered to develop and equip such facilities on an emergency basis. A district wise strategy must be worked out to consolidate district headquarter hospitals in terror-affected areas. Charsadda, Mardan, Noshehra, Dera Ismail Khan, and other districts in Khyber Pakhtunkhwa require immediate action.

Psychological treatment to mitigate the effects of trauma is also an important task. Disillusioned youth and the destitute can become instant fodder for the nefarious designs of terror planners. There are many social and economic options that are already available. Nationwide initiatives such as Benazir Income Support Programme (BISP), Pakistan Poverty Alleviation Fund (PPAF), Benazir Bhutto Shaheed Youth Development Programme, and micro finance institutions have many support options that can extend help to different sub-groups in target areas.

 

Progress or
disappointment?

The summit on climate change in Cancun seems to have failed in leaving an impact

By Irfan Mufti

The United Nations Climate Change Conference took place in Cancun, Mexico from 29 November to 10 December 2010. The event encompassed the sixteenth Conference of the Parties (COP) and the sixth Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol (CMP).

At Cancun, community representatives from all across the world, especially representing underdeveloped regions of Africa, Asia, Latin America and Oceania demanded of their government representatives to support the establishment of one common climate fund to help developing countries adapt to climate change, develop in a low-carbon way and protect their forests.

At the end of the Cancún summit, participants observed some progress was made. A global Climate Fund has been established. This is a strong step towards ensuring developing countries are provided with desperately-needed assistance in fighting the effects of climate change. This was a key issue - Third World people have been campaigning about it throughout the year. In the coming months, it will be crucial that decisions are made on where money will be raised from to fill the Fund.

During summit’s final discussions text of the statement on women was changed to "women in poor communities more likely to be at risk from the impacts of climate change", and "efforts are needed to make sure they are protected and supported" as a major shift in thinking of these world leaders.

The Cancún text falls short of meeting emissions cuts demanded by the science. It does, however, prevent backsliding on the targets presented in the summit, and laid a path to move toward them. Crucially, this takes us a step closer to the global deal that eluded last year’s summit in Copenhagen and will be further discussed in next summit.

In the coming days, several experts and campaigners will continue to crunch through the detail of the summit resolutions. They’ll be unpicking the meaning and deciding where to go next. But in the meantime, one thing is clear, progress wouldn’t have happened in Cancún without the pressure exerted by campaigners throughout 2010.

The basic conclusion so far is that the conference largely failed to come up to the basic agreements to save the planet from affects of climate change and forced its developed country members to abide by basic standards needed to reverse the adverse effects of climate change and global warming.

However, a parallel event International Forum of Communities Affected by Climate Change was also held in Mexico City on 29 November, 2010. The event was part of the activities of the Coalition of Communities Affected by Climate Change which came together spontaneously in Copenhagen during COP15 and has continued to grow, having been officially launched at the People’s Conference on Climate Change in Cochabamba, Bolivia in April of 2010.

The Forum, unlike official summit, made promising progress and concrete resolutions. The forum brought together community leaders from all over the world to take leadership in providing genuine and sustainable solutions to tackle climate change and poverty.

The Mexico Forum strengthened the voices of poor communities affected by climate change as the sector with the moral authority to demand and define an effective global policy on just and sustainable development, with a particular focus on the key role played by women in tackling climate change.

At the forum, communities defined and prepared their own policy demands and lobbied their national delegation on UNFCCC’s earlier commitments. It contributed in raising awareness and sensitizing public opinion to very real effects of climate change on the lives of communities across the world. The forum also coincided with mass demonstrations on November 30 in Mexico City, pressing for environmental and social justice at the global and national levels.

The caravans then travelled to Cancun making stops on the route in key communities affected by climate change. Some of the community leaders attending the forum and later in the caravan made strong pledges to continue their journey till they convince the world leaders to abide by the basic standards of environment sustainability.

Efforts were made in the forum to explore new and innovative sources of finance, including revenue from measures to tackle aviation and shipping emissions, and a levy on financial transactions, because these public funds can leverage trillions of dollars of private finance.

Discussion on a legal minimum energy efficiency standard for the private rented sector was important so that by 2016 at the latest, no home is left without an increased energy performance rating.

For fossil fuel energy the demand was to enact legislation so a strong Emissions Performance standard (EPS) for fossil fuel power stations can be set to enable delivery of a de-carbonised electricity supply by 2030.

What remains to be discussed and needs serious public attention are issues which are rejected by strong lobbies and developed countries to protect their own industrial interests. It seems economic interests and profit greed overrides global and human interests.

Stakes at the conference were very high. The political stakes were high because effectiveness and credibility of multilateral intergovernmental process is in danger. And the environmental stakes are high because the globe is quickly running out of time to safeguard our future.

When it comes to measuring our actions in life, we can never afford to assess them with respect to their impact on the most privileged; rather we should honestly assess them with respect to their effect on those who are most vulnerable to our actions. In the arena of climate change, the list of vulnerable nations is long, and growing.

Tuvalu, Maldives, Kiribati, and Vanuatu are looking for ways to evacuate their entire populations because of salt water intrusion and rising sea levels. Sooner rather than later, island nations will have to seek refuge in other, higher lying countries.

Their fate is a wake-up call to the world and its leaders. The floods that devastated Pakistan, Venezuela, and Colombia this year are a wake-up call too. The wildfires that gripped Russia; this year’s hottest summers to date in Japan and China are a wake-up call too. There will be worse impacts, and no country will be exempt from facing the consequence. The question is, has the world woken up and can the world respond to this? The answer can be found from those planners and leaders that need to take these challenges seriously.

A solid response to climate change demands nothing less than putting international climate policy firmly back on track. We can only do that by moving beyond the boundaries of short-term national interests to converge in that space which is common to all human race, that space where all human beings are dependent on the well-being of this fragile planet and where we all are jointly accountable to future generations.

The failure in Cancun has not only disappointed all those that had some expectations from the conference. Cancun should have delivered as the eyes of the world were measuring UN work, they will be reporting, and they will certainly verify!

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

[email protected]

 

The question of leadership

Politicians, it seems, are not hesitant in exposing themselves one more time

By Salman Abid

The question whether Pakistan’s leaders believe in democratic values and practices is perhaps not very difficult to answer, especially after the recent no-holds-barred fight between politicians from the PML-N and MQM, we now know quite well. The gap between leaders, workers and common people is widening by every day passing and all of them seem to be living a life in isolation.

In the backdrop of WikiLeaks, the credibility of our political and military leadership is being discussed seriously in the country and outside. Not one political and military leader has denied the stories of WikiLeaks .On the contrary, they are trying to justify their own actions. Most of the people do not have any doubt about the role of our leaders.

The information disclosed by WikiLeaks is not new because mostly people are aware of the American role in our politics. The alarming and shocking news was the role of United State’s ambassador in the political management through discussion and consultation with our government and state representatives and political and military leaders, all following diligently the guidelines form the United State. These notes actually reflect our real leadership’s character, where they stand to defend democratic norms and values.

Unfortunately, the military regimes, especially that of General Ziaul Haq and his de-politicisation agenda created negative implications for our political process. We can criticise political leaders for their strategies and actions but by no means should we challenge their political commitment for change. The larger political movements of political activists over the few decades in the country brought change and that was remarkable.

Political dynamics of the day are based on power politics. Most of leaders seem to have lost belief in mass mobilization and people’s empowerment and have developed strong linkages with the establishment forces. WikiLeaks, similarly, reflects actions of our major political and others forces.

The whole political scenario from 2006 to 2010 proves that both national and international ‘establishment forces’ as we may call them, wield real power in politics. Our political leadership’s role, some argue, is only to facilitate and accept their dictated agenda. No real resistance, it has been observed by some critics, has come from political forces against dictatorship and international interventions.

Issue-based politics and leadership role is to strengthen each other and create space to work together. But what we are doing is totally opposite as some of our leaders are just focusing on their own agenda and personal interests at the expense of national interests.

Unfortunately, in the past, our leadership has come through the backdoor and not through the political process and people’s support. Since the political parties are weak and anyone can intervene easily within their framework, the threat is not only from internal forces but also from external forces’ intervention and the intention of capturing the decision-making process of political parties.

It’s very easy to criticise the external forces and ignore the question why we are allowing them space? We should openly admit the major crises that we presently have. Since our political system is largely based on individuals, and not on political institutions, our leadership is not accountable at any stage. Our leadership knows very well where the ‘intervention’ can be utilized to getting support. When a leadership behaves in undemocratic manner then obviously it affects the whole party and its structure.

Another vital question is how our political leadership can be held accountable? If the leadership comes with public and party support then we can achieve something in a better way. The intelligentsia can play a very significant role in democratisation of the society. Here, again, the major problem is that some of our intellectuals are affiliated with some individuals and their party and do not openly criticise undemocratic attitude and behaviours due to favouritism and personal interest. This does not augur well at a time when the country faces serious crises in the shape of the war on terror, bad governance, poor economic situation, and social and economic disparities, etc. As a nation, we expect from our leadership and their agenda to be based on peoples’ needs. Unfortunately, there are some who justify the current leadership role and their actions. They insist the practice of politics and their realties are different as compared to the bookish knowledge of politics in academic discourse.

The popular leadership has played its cards well for getting into the corridors of power like MQM and JUI, with the government and state forces. At this critical juncture, we need to insist politics and their leadership should be fair, accountable, transparent, and behave according to democratic norms. These values are very important and without these we cannot strengthen the democratic leadership in the country. So, we should be able to come out of the game of power politics and challenge the current practices of leadership in the name of democracy. One thing that also needs to be realized is the role of the political workers in the country to evaluate the internal leadership crisis and then re-define their own role in politics.

The writer is a political analyst and human rights campaigner. He can be reached at [email protected]

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