Tag Archive: Express Tribune


Would Pakistan be any different today if the tragic incident of December 27, 2007 had not taken place? It certainly would be a different country even if Benazir Bhutto was in opposition. She had the benefit of having first-hand experience of dealing with the power-brokers and the real stakeholders of the country’ politics and she knew exactly how to deal with each of them. Some scenario-builders have developed various scenarios with BB still alive. They have different scenarios to conceive but the most interesting estimation of the country with BB in power has been written by Mr. Khaled Ahmed which appeared in the latest issue of Express Tribune.

According to this account, BB’s pre-election politics would have been aimed at not threatening to upset the Afghanistan strategy, a strategy with which she clearly did not agree. She would have talked to the Americans constantly through their ambassador but would have also realized that the Democrats were certainly going to win the 2009 election and that pressure on the next incumbent for US-NATO withdrawal would increase. She wanted to prevent the ‘political memory’ in Pakistan from dropping her party from the popular radar. She would have been cautious rather than rash in the country’s changed environment. But her relationship with Musharraf and the PML Q would have run into rough waters — as she had indicated in her last book and her letter to Musharraf in which she feared that certain members of the PML Q and elements in the intelligence agencies would plan to get rid of her.

Once in Pakistan, she would have taken a stance closer to the PML N– there were signs of this after the attack on her in Karachi. Her relationship with the MQM would have remained sour because of the latter’s close working partnership with Musharraf, but she would have applied pragmatism to her handling of the ANP. Returning from the wilderness and seeing all the changes in Sindh, she would have learned, however, to accept the MQM’s own ‘realism’ in not provoking the dominant Sindhi party.

Her post-election presence in the government would have been dicey because the 17th Amendment debarred both Nawaz Sharif and Benazir from premiership. In case the 17th Amendment ban was removed, Benazir as coalition prime minister would have worked, but it would have been ‘overbalanced’ by Musharraf in the presidency, calling all the shots as far as foreign policy was concerned. The coalition would be rancorous and unstable. She would have therefore relied on her counterbalancing alliance with Nawaz Sharif on the basis of the 2006 Charter of Democracy.

Nawaz Sharif, of course, would have been back, his return forced by the Saudis. Benazir would have persuaded him to take part in the elections. The post-election government in Punjab would have belonged to PML Q, but would have been harassed by the two big parties in opposition. The Mumbai attack in 2008 would have caused a political earthquake, giving Benazir more leverage over Musharraf and the army. It would have been a very divided and internecine coalition over which Musharraf would have had to preside.

Benazir would have quickly realized that Prime Minister Shaukat Aziz had erred in not passing on the oil price hike the world was hit by in 2007. The Indian summer of the economic boom under him would clearly have been at an end when the 2008 worldwide crisis broke and found Pakistan with its pants down, with a circular debt overhang of 300 billion rupees. She would have severely rocked the coalition boat and worked for a mid-term election.

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Remember the export of wheat about three years ago by Pakistan triggering a very serious food shortage in the country leading to phenomenal rise in food prices? The same wheat was imported back at exorbitant prices. Since then the price of wheat and flour is constantly on the rise. This was perhaps one of the biggest corruption scandals of the Shaukat Aziz government. It seems that the present government has learnt only one lesson from this regrettable decision; do it again and make billions at the cost of millions of hapless “voters” who you will need only in the next season of “democracy”. Interestingly, this decision, which has been taken to be able to pay off central bank loans, has been taken at a moment when wheat prices are at the lowest in the international market.

It is simply beyond comprehension why export is needed to pay off SBP loans which essentially are in local currency. It seems that the driving factor behind this imprudent decision is dollar-lust. Express Tribune has reported that after a ban stretching more than three years, the government on Tuesday allowed the export of wheat in a bid to pay back central bank debt, a move that could result in a serious food crisis since a World Bank (WB) report has already warned of a five-million-ton drop in production in the next crop. The Economic Coordination Committee (ECC) of the cabinet allowed the grain export without imposing any cap on quantity. It is expected that wheat will be exported in massive quantities since Russia, the world’s largest wheat producer, has banned the grain export resulting in price surge in the international market.

The ECC assessed a $300 per ton (Rs1,040 per 40 kilogram) wheat price in the international market, anticipating a further hike in coming days. Although the government has fixed the wheat price at Rs950 per 40 kg in the domestic market, farmers usually receive an average Rs850. Pakistan is the third largest wheat producer. The ban on export of wheat was slapped in June 2007 when because of incoherent policies the country first exported the commodity and then had to spend over $1 billion to import the same for domestic consumption.

The ministry of food and agriculture’s summary to the ECC proposed lifting the ban primarily to pay back debt taken from the State Bank of Pakistan (SBP) to buy wheat, make room for next year’s crop storage and capitalize on higher prices in the international market. Total wheat stocks are estimated at 9.07 million tons, of which 6.1 million tons are in Punjab. “The Punjab government is paying Rs77.5 million per day interest on loans,” obtained for buying wheat, says the summary. The federal government is picking up Rs24.6 million from the amount.

The production target in the pre-flood scenario was also estimated at 25 million tons. According to the Damage and Need Assessment Report of the World Bank and the Asian Development Bank, “wheat production may reach only 20 million tons opposed to an average production of almost 23 million tons in the last three years.”

The report goes on to say that there is concern about the possible impact of reduced wheat output in the coming season on food security. Around 78,000 tons of wheat were either destroyed or damaged in Punjab during the recent floods.

One of the major reasons for imminent collapse of Pakistan’s economy is senseless injection of liquidity into public sector corporations who suddenly started posting huge losses after the installation of the present government. This remarkable “turnaround” is rather mysterious. It is not so mysterious if a dispassionate analysis is undertaken with a non-political angle. These corporations including PIA, PSM etc have suffered due to the “doctrine of cronyism”, a hallmark of the governance of ruling party. This doctrine affected the economy every time the party came to power. According to a conservative estimate, the government in one year alone has injected liquidity close of half of its revenue receipts to keep these corporations afloat, and cronies happy.

In order to overcome its economic problems, the government was forced the other day to impose RGST and flood tax which can have severe political consequences for the ruling party. But oblivious to the ramification of its style of economic management, it is still considering injecting liquidity into the loss making corporations. It is like putting the blood of poor taxpayers into the veins of these corporations. Express Tribune has reported that the ailing state carrier Pakistan International Airlines (PIA) is asking the government, saddled with its own mounting debt, to write off losses of 1.7 billion dollars to save it from looming bankruptcy.

In a five-year survival plan submitted to the government, PIA has promised to make cutbacks and better its fleet in a bid to improve its fortunes, if the treasury agrees to cancel its debt and pay off other creditors. Blaming “bad policies of the past” for accumulated losses of 80 billion rupees (936 million dollars) and liabilities of 144 billion rupees, PIA insisted the airline is capable of future success.

The burden would be a massive undertaking for a government dependent on US aid to survive. A economic financial adviser to the government, Ashfaq Hassan Khan, said privatization was the only long term solution for the airline, which has failed to turn a net profit since 2004 according to its last annual report.

PIA was created out of private airline Orient Airways in 1955, just eight years after Pakistan came into existence, and today has a fleet of 40 planes, a combination of Boeing 747s, 777s, 737s, Airbuses and ATR aircraft. Performing well until the 1970s when corruption and overstaffing hit company fortunes, PIA’s reputation was further battered in the 1980s as it failed to maintain its fleet, said economic expert Shahidur Rehman.

He said 1990 signaled further defeat for PIA, when legislation liberalized to allow more competition in the flight market. The state carrier remains the largest operator on Pakistan’s international and domestic routes. But union officials say years of corruption, nepotism, bad management and poor planning have pushed the corporation to its lowest ebb.

Secretary of State Hillary Clinton has put across her message without mincing words, “the Pakistani elite also need to pay up so that the world follows suit”, more or less like that. The issue of paying taxes by the salaried middle-class alone and the unjust taxation system has assumed so much significance and attracted so much attention that some pundits have started foretelling a public revolt, if not a revolution. And if Hillary can see it coming then it is coming, for sure. This elite-based taxation system will have to go away to make space for a just and equitable system in which all pay taxes according to their capacity.

So much has been written on this subject which is dry in nature and which creates bad taste at the end of reading an article on it. However, Saqib Omer Saeed, in his article appearing in the Express Tribune has approached this subject in an interesting manner. In view, the tax is a product which the government has failed to sell. Here are excerpts from the article:

Due to negative media portrayal, people look upon taxation as a monster. I can’t agree with classical economists, nor with the conventional discipline of tax science. To me, taxation is merely a product of the government. I know the objection can be raised that if tax is a product, we can avoid buying it. I think we need to ignore this aspect, however, and try to make one point: everybody has to buy this product. It is a product that works for the well-being of society and helps governments work towards social and infrastructural development. That means by ‘selling’ tax, the government can generate revenue that allows it to fund projects for the public good. As I previously stated, tax is a product; therefore it follows that we, the clients, are the kings.

They need to be careful not to make the “product” (i.e: tax) too expensive. It is actually revenue that is taxed, not businesses or individuals. The government needs to make sure that they take care of their clients’ revenues, for their own good. It is not advisable for them to develop tax in a way that would harm businesses, or make people poor. The focus should be on increasing prosperity, for their own long-term benefit. In order to a good relationship with their “clients” (i.e: citizens), the government needs to help people earn. This means that they have to market effectively by increasing people’s wealth, so that they are able to afford taxes. No government can be efficient if they simply collect tax, rather than investing in it. Investment in taxes means that it is necessary to multiply the number of clients-those with income and earning. The best would be to invest in establishing businesses that can increase tax revenue in the long run.

It is always advisable to diversify the tax portfolio, rather than putting pressure on selling tax to just one strata of the economy. Diversification of taxes would be a great step in reducing the economy’s unrest. In countries like Pakistan, agriculture or capital gains are wholly exempt from taxation and only the salaried classes are taxed. This can lead to a point when people would rather ignore taxes than pay them. Those who are responsible for collecting taxes need to behave like salesmen. They need to discuss the means for increasing people’s revenue, so that they are able to pay more taxes. It is advisable for the government to survey tax-buyers to find out means for improving people’s cash flow. To create a tax culture, it is best to convince people that taxes are not there to harm them, but help create a more prosperous society in the long run.

New client development is another thing that would help promote taxes. The government has to plan a fixed percentage of tax revenue that will be invested in promoting entrepreneurs and small businesses. When businesses grow, it would automatically increase tax revenue as well. As a business, the government has to care for its own costs. They have to use intelligent means for tax collection and need to be cost efficient. During phases where the government is investing in taxation procedures, it must keep its running costs low.

In countries like Pakistan, taxes are becoming a symbol of terror. This is mainly because of the performance record of the government and their reputation for corruption. It would be best if people could pay taxes knowing that the money will be used for their own benefit. Generally, the government is thankful if if people pay the taxes that are imposed on them. Taxation should be a process whereby the taxpayer thanks the government for using his money to improve society. A little change of perspective is always required to cultivate an acceptance of something that is considered bad but may actually be very beneficial. If the reality can’t be changed for the time being, then changing perceptions may help create that change.

I think it is time for tax authorities and governments to rework the concept of taxes in Pakistan. They need to build credibility and educate people about how taxes are the way to a bright future, rather than a monstrous thing to be avoided. This would require a massive endeavor from the government. I know my post of will receive a lot of criticism, but if companies can sell cigarettes that are harmful to consumers, why can’t the government sell tax, which is highly beneficial (if used sincerely). It is a time to design a framework for developing taxes, rather than imposing them by force. The best way is to take the middle path. This will come from brainstorming: our country is unique and therefore needs unique solutions.

 

The government of Punjab province of Pakistan has introduced certain revolutionary changes in marriage laws. Some of these changes are welcome developments, like medical examination before nikah to prevent future complications like birth of handicapped children due to blood group incompatibility. But some changes have been severely criticized which enhance the role (read: consent] of parents which to the critics mean encouraging forced marriages.

Express Tribune has reported that the Punjab Government made eight amendments to the Nikahnama Law on Thursday. A circular was issued by the Local Government and Community Development Department and sent to all DCOs in Punjab, describing the Punjab specific amendments. The new amendments make it necessary for both the bride and bridegroom to undergo a blood test, which is made compulsory to prevent disabled and handicapped births.

The amendments also make it mandatory for parents/guardians of both bride and bridegroom to sign the Nikahnama document as witnesses. Mention of the bride and bridegroom’s date-of-birth has also been declared binding. The amendments in the circular are as follows:

  1. Additional columns and space shall be provided for dowry articles in the Nikahnama
  2. In addition to the names of fathers of both the bride and bridegroom, the names of mothers of both the bride and bridegroom shall be recorded with their CNIC numbers and dates of births.
  3. Father and mother of the bride and bridegroom shall sign in the witness to the marriage column.
  4. Marks of identification of both the bride and bridegroom shall be incorporated in the Nikahnama.
  5. Medical check up and report of the bride and bridegroom shall be mandatory to obviate any problem in their matrimonial life and subsequently any chance of having abnormal children. Blood groups of the bride and the bridegroom shall be entered in the marriage certificate.
  6. The name of the bride usually changes after the marriage is solemnized which then appears in future documents of the new family. Such a projected change shall be recorded in the certificate.
  7. Instead of mentioning only the age of the bride and bridegroom, their exact dates of birth shall be recorded as in their school certificates/CNIC/Passports.
  8. The latest passport size photos of the bride and bridegroom shall be pasted on the certificate.

The handout says the amendments are effective as of today (Thursday) and no nikah document will be registered without fulfilling these requirements. According to a report, PPP MNA Sherry Rehman criticized the amendments and said that they would strengthen the organizers of forced marriages.