Pakistan in Media

What are those values? A social market economy, rather than unbridled market capitalism; an export economy built on a large and technically innovative manufacturing base; a large network of small and medium sized enterprise, often family-owned, that is open to the global economy; a sense of environmental responsibility; and a suspicion of financially driven Anglo-Saxon style globalisation and corporate capitalism. Indeed the sense that Germany had the opportunity to show off the unique strengths of the “German model” was a key to Merkel’s appeal, and she repeatedly noted what a tough line she had taken against the position of banks.

The federal and provincial governments have finally decided to inform the Supreme Court of the “reality” factors that have delayed the implementation of a Lahore High Court order regarding the sale of sugar at Rs 40 per kg in the country. The prime minister having failed to tactfully by-pass the High Court order, the only course left to avoid contempt of court was to engage the Supreme Court in some kind of dialogue.

We don’t know what the four governments have resolved but the argument will have to realistically describe the much curtailed capacity of the state to control a free-market situation complicated by profiteering at all levels. In India, such a situation was resolved by arranging a meeting between all the chief ministers and all the judges of the higher judiciary. The chief ministers’ bottom-line plea was: run the provinces yourself!
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ISLAMABAD: The International Finance Corporation (IFC)-World Bank Doing Business Report 2010, on Wednesday reported no improvement in Pakistan doing business and the country continues to be ranked at 85th in the world among 131 countries.

Ease (easiness) in doing business ranking of Pakistan has been determined at 85 in the Doing Business Report 2010 where as in Doing Business Report 2009 Pakistan was also ranked at 85 in the world showing no improvement.
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PARIS, Sept 7: Most of sub-Saharan Africa and South Asia are facing extreme or high risk of food shortages, according to a Food Security Risk Index ranking of 148 nations.

Pakistan, ranked 11th on the index, is at “extreme risk”, while Bangladesh and India are both at “high risk”, ranked 20th and 25th.

The United States is least at risk followed by France, Canada, Germany and the Czech Republic, according to the study by Maplecroft, a Britain-based firm that provides risk intelligence for businesses.
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MILITARY might depends on economic might which, in turn, is dependent on the control of global financial and physical resources. Pakistan’s economic dependence on certain nations and institutions will ensure that the plight of its people gets worse, leaving the population vulnerable to extremism of all kinds — religious, political or economic.

While the government is busy looking at how to convince the US to lend more, major resource-earning sectors in the country are still looking for a strategy to build the economy. With the economy already reeling from high debt can the solution to our economic woes be the IMF and further loans? Most certainly not; it is institutions like the IMF which have caused economic terrorism in the world.
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In talks with a Pakistan delegation in Washington, the IMF has approved additional financing for Pakistan which has taken the total loan up to US $11.3 billion. The new pledges are intended to bridge any gap that may arise if funds pledged to Pakistan at a donor's conference in Tokyo in April do not come in on time. The immediate problem has thus been resolved; the longer-term crisis grows. The IMF deal of course means Pakistan's debt burden continues to mount. The same holds true in the case of loans taken from other bodies. The situation is largely unsustainable. A glance at the budgetary pie shows how debt eats away at our resources. We simply cannot afford to dish out an ever-increasing slice to it year after year, decade after decade. The crisis Pakistan faces today is largely rooted in its economy. The socio-economic slide over the past decades has contributed to the immense sense of grievance and acted to fuel the militant fires. The rising rate of crime, the growing sense of insecurity, the flight of capital, for which another Forex firm, Zarco, is now being investigated, and the damaging human brain drain are all tied in to this factor.
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Dawn, Pakistan, Saturday, 04 Jul, 2009
PRIME Minister Gilani has announced the doubling of development funds allocated to members of parliament for projects identified by them in their constituencies.

This hefty addition to development allocations made after the approval of the budget by parliament leaves no doubt where the control of the budget lies.

Interestingly, a day later, the prime minister told ministries to hold monthly review meetings to avoid supplementary demands for grants.
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The News International, Thursday, June 25, 2009
ISLAMABAD: The National Assembly on Thursday passed the Rs 2.9 trillion federal budget for the year 2009-10 after the passage of finance bill.

All the amendments by the government in the bill presented by Minister of State for Finance Hina Rabbani Khar were passed by the house.

The budget, presented in the National Assembly on the 13th of this month would be effective from July 1st.

The budget focuses on achieving the goal of sustainable economic growth and ensuring welfare of the people on equitable basis.
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Dawn, Pakistan, Tuesday, 23 Jun, 2009
There is a reason why I have begun this article on the budget with a reference to the ongoing struggle between the state and non-state actors and why I said that extremism is not the only problem the country faces. There is also the problem of an economy that has suffered perhaps the most severe shock in the country’s history.
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Daily Times,Pakistan, Monday, June 15, 2009
comment: Shahzad Chaudhry
Dependence on donors’ pledges is so pervasive that most television channels now need to run a line asking the nation to pray for the success of the prayer on which the Budget is premised!

In the days leading up to the next fiscal year’s budget, what has been keeping the mandarins of the finance ministry engaged has been another matter — how poor are Pakistanis?

By all accounts, and some verified numerical processes of none other than the World Bank, the poverty rate for 2007-8 had been determined at 17 percent. This would have been a six percent reduction in poverty over the 2006-7 performance of the economy when the poverty figure came down from thirties to around 23 percent.
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Daily Times, Monday, June 15, 2009
The Budget 2009-10 has an outlay of Rs 2.48 trillion with an anticipated deficit of Rs 722.5 billion or 4.9 percent of GDP, aiming at a growth rate of 3.3 percent of the GDP. A negative reaction to it at the national level has already set in, which is intense despite the fact that this kind of thing happens routinely every year, starting many decades ago when the country first tilted into political instability, bad law and order and terrorism. Budgets have always “disappointed” everyone and not lived up to their projections. Hence the lack of confidence in budgetary predictions.
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The News International, Pakistan
Sunday, June 14, 2009
We made a similar prediction when we wrote the editorial for fiscal 2008-09’s budget and regrettably what we said last year seems to apply this year as well – that many of the targets mentioned by Minister of State for Finance and Economic Affairs Hina Rabbani Khar in her budget speech on Saturday seemed overly optimistic. Consider the basics: the government foresees a 23.5 per cent increase in total expenditure to 2.48 trillion rupees (around $30.5 billion) with development spending (the PSDP allocation) increasing by around 17.45 per cent to 646 billion rupees. The official news agency which gave details of this on the wires as the speech was being delivered in parliament did not shy away from calling the PSDP (Public Sector Development Programme) allocation the “highest in the country’s history”. Obviously, whoever used such a phrase is not familiar with the fact that such allocations need to rise over time, mainly because more funds and resources are needed to supply an ever-growing population the same amount of basic services and amenities. This would mean that in all likelihood the PSDP allocation for next year would be even higher and the one for the year after that higher still – and so on and so forth – and should not mean any singular achievement in this regard by the present government. Furthermore, the outgoing fiscal saw several cuts in 2008-09’s budget PSDP allocation so there is no guarantee that the same thing will not be repeated during 2009-2010, especially since we now have a massive IDP situation.
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The News International, Pakistan

Friday, June 12, 2009

Much of what was unveiled by the ministry of finance via the Economic Survey 2008-09 was expected and served to only confirm that the economy is well and truly in recession. A telling statistic was the reduction in imports for 2008-09 -- by over 26 per cent compared to the previous year. Since a country's imports are a direct correlation of its income and GDP, the single statistic alone should be enough to confirm that the economy is now on a recessionary path. Another related statistic is growth in the manufacturing sector which actually shrank by 3.3 per cent during 2008-09 compared to an increase of 4.8 per cent last year (large-scale manufacturing, a sub-head, shrunk by 7.7 per cent). The economy's growth rate was markedly down from estimates made at the beginning of the financial year – when it was predicted to be well above five per cent – at a worryingly low two per cent. This is more or less half of what the economy managed to achieve during 2007-08 which was first put at 5.8 per cent and has now been clipped to 4.1 per cent – which means a reduction by almost 50 per cent! This is to be expected given the significant pressures on the economy: the worldwide recession (other countries have suffered far worse, a case in point being several EU states where GDP is predicted to actually in real terms) and the fallout of the war on terror in terms of a vastly deteriorated law and order situation and its obvious consequence in terms of a negative outlook for business and investment prospects.

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Dawn, Pakistan
By Zafar Iqbal
Thursday, 11 Jun, 2009

WE do not seem to be doing anything serious at present except obeying the IMF which has not changed its views about developing countries. This is not entirely wrong. A country which continues running current account deficits and fiscal deficits does need checking.

The ADB has now said that Pakistan is living beyond its means. Why was it quiet when Shaukat Aziz’s financial prime ministership was doing so through his policy of liberalisation, deregulation and privatisation? Liberalisation meant increasing imports; deregulation meant allowing people to do as they pleased — in the stock market.

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By Kaiser Bengali
Wednesday, 10 Jun, 2009

THE budget for the year 2009-10 is about to be presented to parliament. There are huge expectations, given the scale of the economic crises the people are facing. These cannot and should not be subsumed as an appendix to the crises the economy is facing.

For the economy, there are concerns about revenue generation, budget deficit, current account deficit, foreign exchange reserves, GDP growth rates, industrial growth rates, stock market indexes, corporate profits, etc. It is, however, important for budget-makers to be reminded of the real purpose of all economic-planning exercises, including budget-making: the welfare of the people. And the variables that concern the people directly are unemployment, poverty and inequality.

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Dawn, Pakistan
Wednesday, 10 Jun, 2009

PRIVATISATION works when it builds capacity and improves products or services. In the case of Pakistan Railways, any sale by the state will most likely fail to meet the first criterion. Services may — and that’s a big ‘may’ — improve under private ownership. Train travel could conceivably become safer and more comfortable and dependable. At the same time, however, it is inevitable that loss-making routes will be done away with, which means that fewer stations will be serviced. Capacity will thus be reduced, not enhanced. In many remote areas, the train service represents a lifeline to the rest of the country and this link that sustains both travel and trade ought not to be severed. Britain’s privatisation of the rail system saw several stops disappear from the map for reasons of profitability. The same is bound to happen in Pakistan, with far greater adverse effect, if Pakistan Railways is sold. Jobs too will be lost in the downsizing effort and fares are likely to increase, again to the detriment of the public. What’s more, firing poorly paid workers is unlikely to turn Pakistan Railways around. What is needed instead is a complete rethink of the organisation’s top-heavy administrative structure. This can be done without selling the railways.

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Dawn, Pakistan
Saturday, 06 Jun, 2009

THE federal government will spend Rs421bn to build socioeconomic infrastructure under its Public Sector Development Programme during the next fiscal. Such measures are even more crucial in these times of economic slowdown and falling private investment. The PSDP spending must kick-start the economy and revive growth, which is projected to drop to just two per cent this year from 5.8 per cent last year. Also, it is a tool to help remove structural rigidities and imbalances like energy and communication infrastructure shortages that have hampered economic growth in the past. Besides, it can create thousands of new jobs and alleviate poverty.

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The News International, Pakistan
Friday, June 05, 2009

ISLAMABAD: Prime Minister Syed Yusuf Raza Gilanion Friday called upon the United States to write off its debt to help Pakistan overcome the present economic difficulties accentuated by the war on terror, growing crisis of IDPs and the negative impact of global recession.

The Prime Minister was talking to Richard Holbrooke, US Special Envoy for Pakistan and Afghanistan who called on him at PM House.

The Prime Minister urged the US administration to initiate action through the US Congress for substantial increase in aid for Pakistan as well as fast track much-needed military supplies for Pakistan's campaign against terrorism.

The Prime Minister acknowledged that the US had assisted Pakistan in providing relief to the dislocated people of Malakand Division by providing an aid package of more than US $300 million.

He hoped that the major European and Muslim world countries would follow the United States and come forward with their timely assistance.

The Prime Minister said the nation was united on the vitalissue of army operation against Taliban.

The Government of Pakistan and all the national institutions were fully on board in fighting the menace of terror and there was national cohesion and spirit of reconciliation on national issues among all the political stakeholders, he added.

Ambassador Richard Holbrooke responded that the US would look into Pakistan's request for the debt write-off and measures were being taken to accelerate the pace of military supplies to Pakistan.

Holbrooke while dilating upon his trip to the camps for dislocated persons expressed appreciation on the overall conditions there.

He praised the tradition of Pashtoon-wali and the traditional hospitality of the people of Pakistan in accommodating the displaced people in their homes and catering for IDPs needs despite their own meagre resources.

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By Moazzam Husain
Monday, 01 Jun, 2009

A SKILLED female worker in a garment factory in Bangladesh or Sri Lanka generates $2 in value added per hour. In terms of the $2-per-day poverty line this pulls a family of six out of poverty. A call centre attendant in Mumbai or Bangalore generates $5 per hour and a computer programmer could do upwards of $20 per hour or $40,000 GDP per capita.

If finance adviser Shaukat Tarin were to do a back-of-the-envelope calculation, he may find, arguably, that each gun-toting militant in Pakistan perhaps destroys economic value equivalent to 25 times this — to the tune of $1m. This is the cost each militant imposes on the economy each year. We will turn to the numbers in a moment.

According to early reports on the electronic media, the cost of Operation Rah-i-Raast in the first few days had blown a hole in excess of Rs50bn in the exchequer. By the time the operation is over, the cost could well have touched $1.5bn. Every dollar here will be incremental to the defence budget.

Add to that, the cost of relief efforts for the IDPs which adviser Tarin himself estimates at $800m and the forgone earnings of the three million people of Swat from agriculture, tourism, mining, trade and transport. That will be another $750m taken at Pakistan’s per capita average of $1,000 for three months’ losses. You see where we are getting at? Yes we’re getting to $3bn and we’re also getting to next week’s budget speech. Sitting deep in an impregnable base in the Hindu Kush mountains, Al Qaeda will be listening to this speech with a lot of interest.

In addition to tough fiscal measures, expect to see government borrowing rise and inflation and interest rates creep up again. With little fiscal room, the government will resort to borrowing and printing money to finance Rah-i-Raast. Time is on the opposite side here and Al Qaeda’s planned strategy would quite predictably be to switch to a low-intensity war of attrition mode, keep the army in Swat, keep the IDPs out and bleed the exchequer till the State Bank says “ouch”. To frustrate this strategy, it is important to deny Al Qaeda any operational sanctuaries in Swat. The hand of effective governance must also move into Swat as IDPs return.

Back to the numbers: $3bn to rid Swat of 3,000 hard-core militants. At the rate of $1m each, every long-haired, bearded gun-toting militant has negated one year of work of 25 software programmers or of a small software house or of a 100-seat call centre. Alternately each Taliban has destroyed the economic value created by 250 garment workers, a rather not-so-small garment factory, in addition to driving away business for many others. And that is counting tangible losses only. We have not factored in the image loss to Pakistan that my friends in advertising refer to as “negative brand equity”.

We have not counted the sufferings of the genuine visa-seekers, and the distress caused to the overseas diaspora of patriotic Pakistanis, the cost of export orders lost and better prices our products could have commanded in international trade and the loss of investment that Pakistan had to suffer.

Add to this the cost of scaring away potentially lucrative business joint venture relationships, the cost of scaring away airlines, tourism, cricket teams. The loss of not seeing the delightful sight of thousands of foreigners coming to Pakistan each year on exchange visits, as students, volunteer workers in NGOs and charities, on internships and for adventure tourism. The loss of similar opportunities that would have been accorded to the youth of Pakistan to go on reciprocal exchange visits. The numbing

down of the feeling that Pakistan is part of a bigger world and that Pakistanis are global citizens.

I had ended my article last Sunday on the note that “the post Taliban era must soon begin”. This was intended in a rhetorical sense only. We need to in fact prepare for a long war. My sense is that given a few right tools the Pakistani military may be able to get the job done faster and at a lower cost. It can get it done at fewer risks to itself and with lower collateral damage.

One of these tools is the JDAM (joint direct attack munitions). Basically this is a GPS guidance kit that can retrofit onto a 1000-2000 lb conventional bomb. Using the F-16s’ advanced avionics, continuously updated GPS data steers the bomb to target accuracy within 6-8 metres. At a cost of $14,000 it turns a dumb bomb into a ‘near smart’ munitions with target homing capability approximating a high-precision laser-guided weapon. The JDAM has been successfully battle-tested. During the peak of Operation Enduring Freedom in Afghanistan, 3,000 of these were being used each month by the US air force and navy.

In my article of May 10 I had suggested the need for the information ministry to develop a counter-narrative to Al Qaeda’s ideology of global jihad to disabuse the notion that we are fighting ‘America’s war’. Three war-fighting weeks later there are no signs of effort from this white elephant ministry; so before the Pakistan Air Force begins mounting the JDAMs on the pylons of its F-16s, and as Al Qaeda prepares to listen to the budget speech, I would like to use the opportunity accorded here. Our message is this:

‘We are the children of the Indus basin, one of the world’s largest natural resource and a cradle of ancient civilisations like Moenjodaro, Harappa and Gandhara that go back thousands of years. Today we are a multiethnic society sharing a rich history. Indeed our national language Urdu is an amalgam of Persian, Turkish, Arab, Central Asian and North Indian influences.

‘Pakistan is our land, our home, rich in agriculture and mineral resources and alive with the spirit of enterprise of our hardworking people. Every inch of it is sacred and we treat it with reverence; and so we expect others who come here would behave, as one is supposed to behave when in someone else’s home. You have come in here uninvited, of your own volition and have not treated our soil with the respect it is worthy of. Do not mistake our smiling faces, our large-heartedness and our simple manners for fickle-mindedness.

‘Our God is benevolent, not angry and vindictive. Whilst proud of our homeland we are also citizens of a larger world that offers us opportunities to realise our larger aspirations. We can understand that the presence of American forces in Saudi Arabia during Operation Desert Storm in 1991 may have stoked your feelings, but today, your declaring jihad against your enemies, sitting on our soil outrages us.

‘We are a nuclear-weapons state; we are proud of our military and our courageous people. We have friends around the world. We can look after our interests. We do not need you to fight for our causes. If you must fight for yours, then please go elsewhere. Take your foreign fighters and please leave. We ask you to leave and go find a home somewhere else.’

http://moazzamhusain.wordpress.com

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Editorial, Dawn, Pakistan
Monday, 25 May, 2009

ON Friday, Sardar Assef Ahmed Ali, deputy chairman of the Planning Commission of Pakistan, told the media in Islamabad that the controversial Kalabagh dam remained on the list of key water and power projects. The dam had been announced as scrapped by the water and power minister shortly after the inauguration of the new government last year because of the opposition to the project by the smaller provinces. Now we are told that the dam would be built but only after the removal of objections. There appears to be little likelihood of consensus on this issue in the foreseeable future. The Musharraf government’s effort to build consensus on the project boomeranged and the three small provinces passed resolutions against it in their assemblies. In Sindh, for the past 16 years, the Thar coal project has also been subjected to delays. But here, the delay has been caused by a dispute between Islamabad and Karachi over the managing rights. The good news is that the president is trying to find a middle way to kick off work on the project that promises the country pure gold: 10,000 megawatts of electricity.

The dispute over the two projects considered crucial for cheap energy production and water storage for agriculture is indicative of the deeper, long-standing issue of provincial autonomy. The 1973 Constitution, and other previous documents for that matter, allow free inter-provincial movement of labour, goods and services — although Punjab sometimes tends to curb wheat movement out of its territory — which have largely fostered a ‘common economic market’ in the country. This generally free movement is a remarkable achievement given the tensions such an issue can generate and has done so all over the world. On the other hand, the centre seeks to maintain its control on many subjects that should have long been transferred to the provinces. Besides, the smaller provinces suspect the centre is tilted towards protecting the rights of Punjab. Working against the federation as these suspicions do, they also jeopardise collective economic interests. The controversy over Kalabagh dam and the dispute over the Thar coal project are just two examples.

Inter-provincial disputes are hurting the country’s economic interests. The situation demands that the centre scrap the concurrent list as promised by the prime minister soon after he took oath. Punjab could also contribute to inter-provincial harmony by supporting the smaller provinces’ demand to change the formula for inter-provincial distribution of funds under the National Finance Commission. It could make up for its loss on account of the changed formula by convincing Islamabad to substantially increase the provincial share from the divisible tax pool and hand over revenue-generating provincial sales tax on services to the provinces. If it does so, Punjab will find the smaller provinces supporting it.

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