Tag Archives: revenue

Deadly debt trap

The only way to come out of prevalent economic mess is to accelerate growth and enhance tax revenues

By Huzaima Bukhari & Dr. Ikramul Haq

Pakistan trapped in deadly ‘debt prison’ needs concentrated short and long term efforts to come out of it. Unfortunately, till today no workable plan and viable strategy is devised by the government or any political party in opposition to tackle the issue. The debt burden — Rs14.5 billion internal and $60 billion external — is becoming unmanageable as major resources are consumed by debt servicing. The budget allocation of Rs1.52 trillion for retiring public debt and payment of interest during fiscal year 2013-14 would prove short as there was surge of Rs180 billion in external debts alone during July 2013.

On July 29, 2013, the rupee recorded its lowest value against the dollar: Rs102.4 in the interbank market, Rs104.7 in open market, but actual rate was Rs105.5. Continuous slide of the rupee is not merely due to widening demand-supply gap or maneuverings by unscrupulous elements. Other factors are external debt repayments of around $1billion and speculations about official devaluation in the wake of IMF bailout.

Devaluation will have devastating effects e.g. tremendous surge in public debt (one rupee loss in the exchange rate adds Rs60 billion to public debt), enhancement in debt servicing, further widening of fiscal deficit and more expensive imports, especially of crude oil raising cost of all goods and services.

Already huge debt servicing is taking a heavy toll on economy — fiscal deficit for financial year 2012-13 jumped to 8.8 per cent of GDP as shortfall on the part of Federal Board of Revenue (FBR) alone was Rs442 billion. The fast depletion of foreign exchange reserves — from $14.776 billion in July 2011 to $5.153 billion by July 2013 — aggravated the situation. Heavy repayments to the IMF and others plus financing of current account deficit amounting to $2.3 billion in 2012-13 forced the new government to approach the IMF for a bailout package.

The situation on internal debt is equally disturbing. The government, for the first time in the history, borrowed from local banks Rs one trillion during the fiscal year 2012-13. The net government borrowing from domestic banks increased to Rs1.012 trillion between July 1, 2012 and June 28, 2013 against Rs629.9 billion over the same period last fiscal year. The federal government borrowed Rs1.005 trillion for budgetary support as compared to Rs696.5 billion during the corresponding period fiscal year.

The reckless and unabated borrowing from commercial banks is not only retarding growth but also depriving private sector of the much-needed funds for investments. It is but also forcing State Bank of Pakistan (SBP) to inject heavy amounts of liquidity in the banking system through frequent open market operations as high borrowings wipe out liquidity from the money market.

The only way to come out of prevalent mess is to accelerate growth, generate employment, enhance tax revenues, and stop financing luxuries of elites and losses of public sector enterprises (PSEs). But the present government, like the PPP-coalition government, is not serious about it. During its election campaign, the Pakistan Muslim League-Nawaz (PML-N) made tall claims that on assuming power it will get rid of the “cancer of external debts”.

Continue reading Deadly debt trap

The Plight of Sindh and Sindhis in Pakistan – the Facts and Figures

By: Ayaz Latif Palijo

Sindh has 6th largest Coal reserves in the world. Sindh contributes 71.6% of total Gas reserves of Pakistan. Sindh contributes 58.5% of total Petrol reserves of Pakistan. Sindh contributes 71% of total revenue of Pakistan. Sindh has 2 international standard ports of Pakistan.

YET

55% of population in Sindh lives below the poverty line. Sindh gets just 24.55% from the divisible pool. More than 30% people of Rural Sindh are unemployed. More than 68% of the girls in Sindh can not join schools. Sindh has worst roads, hospitals & schools in the entire South Asia.

WHY???

Via – Facebook

Excerpt of Naseer Memon oped published in Sindhi Daily Kawish on the issue of controversail local govt. law

Creation of Metropolitan Corporations

· Government will create Divisional Head Quarter of Karachi, Hyderabad , Sukkur, Larkano and Mirpurkhas as Metropolitan Corporations But Karachi Metropolitan will be consist of five districts [Note: only Karachi is different from all other Metropolitan all other metro will be consists of only one district while Karachi five]

According to 1998 census MQM has only majority in two districts out of five. If Karachi Metro consists of five District Councils then MQM can have control on only two district councils and they cannot even win mayor ship of Karachi Metro! So MQM knowingly using this Ordinance created Karachi Metro based on five districts instead of 18 towns.

· Union Council boundaries with in the Metro area cannot stretch into any Talku or town

Please note that this doesn’t apply to Town boundaries, there are 5 districts and 18 towns are in Karachi. 18 towns were created in dictator Gen. Musharaf period gerrymandering so that MQM elect their Mayor. It was not possible before since out five districts MQM can only elect two districts only.

This also shows that Karachi is different from other Metro areas.

· Through this ordinance Mayor and Chairman have authority to remove encroachment and maintain peace using Criminal Procedure Code 109, 133, 143, 144 and 145 under the Police act of 1861 and under section 30A-34B. Also they have section 144 under their authority.

Using this authority MQM Bulldoze any Sindhi area, do not allow any political rally and activity, remove any flood relief camps etc.

· Using their financial resources councils have authority to create any new department

Obviously only Karachi and Hyderabad has revenue to create any new department. We already had seen how MQM created city police by recruiting its entire party worker. Rest assured how will these departments server the city.

· Using this ordinance Deputy Commissioner office becomes irrelevant and all the powers are transferred to Chief Officer, who reports to Metro Government. Only revenue matters left to DC office but Karachi will be different again.

Now you can imagine how MQM will utilize Chief Officer Office.

· Financial grant of Metro based on its financial needs, revenue potential and revenue generation

In other words since Karachi and Hyderabad generate most the revenue hence they need more money and rest of Sindh will go to hell. There is no parity for poverty which considers in federal divisible pool.

· Using this Ordinance there are many departments moved to Metro area but most consequential are primary education and fisheries

If Karachi metro can regulate primary education it means the small number of Sindhi medium school running will be closed and there will be no new sindhi medium school will open. Also fisheries department transferred to Karachi Metro mean they will regulate all the harbors where majority of Balochs and Sindhi currently works. They will also not allow any new fishermen housing society in future.

· Military dictator Gen. Musharaf police Ordinance only reactivated in Karachi only, rest of Sindh will still in 1861 act

Courtesy: Sindhi daily Kawish, 05 October, 2012

Via – World Sindh Congress (WSC) facebook wall.

The Punjabi hegemony on Pakistan

The Punjabi hegemony

By Raza Habib Raja

The selective way of presenting history in Pakistan conveniently ignores the fact that at its creation, there were two large sometimes contrasting and sometimes overlapping movements. The first was primarily centred around Muslim identity and tried to actually bargain a better position for its bearers. This movement though ended up in carving a separate homeland for the Muslims, nevertheless did not have that strong separatist thrust at least in the beginning.

Continue reading The Punjabi hegemony on Pakistan

Goodbye Pakistan Resolution, says JSQM chief

By Ammar Shahbazi

Karachi – As the nation celebrated the 72nd Pakistan Day with much enthusiasm across the country, Jeay Sindh Qaumi Mahaz chairman Bashir Qureshi bade “farewell” to the 1940’s Pakistan Resolution and demanded independence for Sindh.

Speaking at a rally, which was, ironically, organised on M A Jinnah Road close to the mausoleum of the founder of Pakistan, Qureshi said that Sindh contributed 80 percent of revenue to the federal budget and the Sindhis had therefore the right to make their own decisions.

He said that “Punjab has usurped the resources of Sindh in the name of Pakistan [and Islam]” and that there was no country named Pakistan in history. “Pakistan is not a country and Pakistanis are not a nation.” The JSQM leader said that for the past 65 years “the Punjabis have usurped the resources of Sindh.”

The party had announced an “Azadi March” on the 8th of this month and since Friday morning activists of the party, carrying their red party flags on motorbikes, private cars and trucks, had been reaching the rally site from various part of the city.

The activists were shouting the party slogan: “Tunjho Desh, Munjho Desh, Sindhu Desh Sindhu Desh” on their way to the rally. The rally caused a major traffic jam on Sharea Faisal bringing vehicles to a standstill.

Addressing a crowd holding the party flags, the JSQM chief said that the he believed that the Urdu-speaking people were part of the Sindh nation and that “their future lies in Sindhu Desh”.

On the issue of Balochistan, he said that the largest province of the country deserved freedom from Punjab’s hegemony as did the province of Sindh. He said his party did not believe in violence.

Delving into history, he said that the British merged Sindh with Bombay. Warning the people of Sindh, he said that the “enemies always have had an eye on Sindh’s quota”. Qureshi also warned that projects like Zulfikarabad City were a conspiracy hatched against the people of Sindh to turn them into a minority in their own province.

Courtesy: The News

http://www.thenews.com.pk/Todays-News-4-99166-Goodbye-Pakistan-Resolution-says-JSQM-chief

Fai pleads guilty to working for ISI

By Anwar Iqbal

WASHINGTON: A US-based Kashmiri leader Syed Ghulam Nabi Fai pleaded guilty on Wednesday to federal charges of lobbying for Kashmir without registration and spying for the ISI (Inter-Services Intelligence).

Mr Fai also acknowledged receiving money from the Pakistani spy agency through clandestine routes and causing revenue losses.

Pleading before the US District Court in Alexandria, Virginia, Mr Fai conceded that he received at least $3.5 million from the ISI between 1990 and 2011. This resulted in a revenue loss of between $200,000 and $400,000 to the US government. …

Read more » DAWN.COM

FBR confirms 24,000 containers missing from Karachi Port

by Ansar Abbasi

ISLAMABAD: Thousands of Nato, ISAF and US Military containers have reportedly gone missing inside Pakistan during the last four years amid serious fears that many of these may have contained arms and ammunitions, which may have gone to terrorists.

Almost corroborating the grave charges levelled by PPP leader Dr Zulfiqar Mirza that a senior minister of MQM was responsible for these missing containers being in-charge of Ports and Shipping Ministry, sources in the Federal Board of Revenue say in addition to more than 24,000 missing containers of Afghan Transit Trade Commercial side, thousands of the unchecked containers belonging to Nato, ISAF and US Military had left the Karachi Port, but did not cross the Pak-Afghan border during the last four years. The sources, ….

Read more → The News

Mujib’s 6 points

1. The constitution should provide for a Federation of Pakistan in its true sense on the 1940 Lahore Resolution and the parliamentary form of government with supremacy of a legislature directly elected on the basis of universal adult franchise.

2. The federal government should deal with only two subjects: defence and foreign affairs, and all other residuary subjects shall be vested in the federating states.

3. Two separate, but freely convertible currencies for two wings should be introduced; or if this is not feasible, there should be one currency for the whole country, but effective constitutional provisions should be introduced to stop the flight of capital from East to West Pakistan. Furthermore, a separate banking reserve should be established and separate fiscal and monetary policy be adopted for East Pakistan.

4. The power of taxation and revenue collection shall be vested in the federating units and the federal centre will have no such power. The federation will be entitled to a share in the state taxes to meet its expenditures.

5. There should be two separate accounts for the foreign exchange earnings of the two wings; the foreign exchange requirements of the federal government should be met by the two wings equally or in a ratio to be fixed; indigenous products should move free of duty between the two wings, and the constitution should empower the units to establish trade links with foreign countries.

6. East Pakistan should have a separate militia or paramilitary forces.

Source – Sindhi e-lists/ e-groups, April 21, 2011.

Pakistan nears bankruptcy, yet its Army poaches most of the resources of the nation

As Pakistan nears bankruptcy, patience of foreign lenders wears thin

BY GRAEME SMITH

ISLAMABAD — A terrifying kind of mathematics has become popular among aid workers, analysts and others who spend their lives tracking the fate of Pakistan. It’s a back-of-the-envelope calculation about how the country will get through the coming years without declaring bankruptcy: take the country’s foreign debt ($53-billion), add interest, subtract the $1.8-billion that won’t arrive as scheduled on Jan. 1 from the International Monetary Fund because Islamabad failed to meet loan conditions. Add the staggering cost, perhaps $10-billion, of rebuilding after summer floods.

The numbers seem bleak. The government floated the possibility last week of running a deficit for the coming year of $15-billion.

Islamabad’s latest plan to raise revenue, a reformed tax law, has become bogged down by stubborn opposition parties, front-page criticism and street protests. The cabinet’s economic team is threatening to quit.

Pakistan needs a bailout. But is the country still a good investment?

“That’s the conversation people are having now, about whether you’d be throwing good money after bad,” said Mosharraf Zaidi, a development expert and policy analyst based in Islamabad.

The international community has accused Pakistan of poor financial management for years. Cables recently posted by the website WikiLeaks show a U.S. intelligence official complaining in 2008 about the country’s preference for spending money on strategic military hardware instead of development: “Despite pending economic catastrophe, Pakistan is producing nuclear weapons at a faster rate than any other country in the world.” …

READ MORE : Globe and Mail

SOUTH ASIAN PERSPECTIVE ON REGIONAL STABILITY

Toronto, Canada : International Center for Peace and Democracy (ICPD) is a Toronto based think tank advocating secular democracy and peace in South Asia . Executive Director of ICPD, Muhammad Mumtaz Khan, who comes from Pakistan, administered Kashmir (PAK), has a thirty-year experience in the field of rights’ advocacy. Currently, he also represents International Kashmir Alliance (IKA) and All Parties National Alliance (APNA) in the European Parliament, North America and the United Nations.

Continue reading SOUTH ASIAN PERSPECTIVE ON REGIONAL STABILITY

Most of the leaders of third world countries on sale, but Pakistan’s ruling elite is exception & it is very lower level satrap and slave

ANALYSIS: Schamlosigkeit! — Mir Mohammad Ali Talpur

….. Here, our easily purchasable politicians and bureaucrats do not hesitate to barter away their souls and, in Reko Diq’s case, the asking price is not their souls but the easily dispensable rights and future of the Baloch people.

The rights of the Baloch people seem inconsequential to the centre and they flout them with brazenness. Recently, Balochistan Assembly Speaker Mohammad Aslam Bhootani minced no words and exposed the immense pressure being put on them by the Prime Minister’s House to allot 70,000 acres in the environs of Hingol National Park to Arab princes for rest and recreation. He emphasised that the Balochistan government had earlier refused this land to a federal security institution because of the local people’s opposition. The Arab princes would do well to remember that in Balochistan they will not enjoy the tranquillity that Cholistan offers because here the people will definitely resist their unwanted presence.

Sheikh Khalifa bin Zayed Al-Nahyan, president of the UAE, alone has been allotted hunting permits in Zhob, Ormara, Gwadar, Pasni, Panjgur and Washuk districts. Pakistan is a signatory of the UN Bonn Convention on migratory species, which protects the endangered Houbara Bustard. But expecting respect for ‘bird rights’ where ‘human rights’ suffer immeasurably is infantile fantasy.

The Arab royalty have also been granted tax exemptions for all their property and imports for hunting purposes. The Federal Bureau of Revenue (FBR) clarified that “similar exemptions were also given to the United Nations, charitable organisations and diplomats”. The Arab rulers certainly qualify as ‘charitable organisations’ for the rulers and politicians here. They give them asylum and plead their case with the US.

The Pakistani politicians and the establishment are very fragile and vulnerable to pressures as is amply proved by the WikiLeaks or rather the ‘Wikitorrents’ that they have turned into. WikiLeaks certainly threatens to sweep away many a reputation and career around the world except perhaps in Pakistan and the Middle East where phenomenally shameless unashamedness or Schamlosigkeit exists as a unique quality in the rulers and establishments; the worse the reputation, the better are the chances of success.

The respect that the Arab princes and rulers accord to the rulers and politicians here is apparent from the choice epithets used for them in WikiLeaks. Some are considered dirty but not dangerous and others are dangerous but not dirty, and yet these shameless people go grovelling to their liege lords like serfs and subjects.

These rulers and politicians and the establishment sacrifice self-respect for material benefits; they cannot be expected to stand up for the rights of the Baloch people over their resources and land. And, moreover, because the Baloch do not expect them to protect their rights, they will resist Tethyan and the Arab princes’ encroachments on their land and resources in the same way that made, in spite of the huge military presence, Amoco Oil Company give up oil exploration in the Marri area in 1974.

To read full article : Daily Times

The writer has an association with the Baloch rights movement going back to the early 1970s. He can be contacted at mmatalpur@gmail.com

Sindh – very sad state of affairs!

Centre wins over Sindh on GST collection – By Khaleeq Kiani

ISLAMABAD, Nov 25: In a major breakthrough, the Sindh government has agreed to surrender its rights over collection of general sales tax on 10 crucial services to the Federal Board of Revenue for one year, paving the way for the smooth adoption of new tax laws by four provincial assemblies. …

Read more : DAWN

EDITORIAL: Pakistan for sale!

A bombshell by Balochistan Assembly speaker Mohammad Aslam Bhoothani was dropped on Friday that the office of the prime minister was ‘pushing’ to sell 70,000 acres of land in Balochistan. According to Mr Bhoothani and media reports, the Prime Minister’s House is pressurising the Balochistan government via the Revenue Department to quickly approve the summary for selling the land to Arab sheikhs. …

Read more : Daily Times

Pakistan economy on the verge of collapse?

Economy: on the verge of collapse?

Finance Minister Hafeez Sheikh’s warning to officials of the state, delivered in a sombre meeting late last month, could not be clearer: the government, federal and provincial, is on the verge of financial collapse. So dire is the state of affairs that the government may not have money to pay salaries in a few months. Lest this be dismissed as hyperbole, Mr Sheikh’s comments have been echoed privately by many economists and experts familiar with state finances in recent weeks. In fact, if anything the finance minister’s comments are on the more optimistic side of dire.

The basic problem is clear: the Pakistani state, all tiers of government, spends twice as much as revenue generated, while neither is expenditure being curtailed nor are revenues being meaningfully increased. At the level of the citizenry, the immediate impact is felt in the form of rising inflation (sustained budget deficits of the kind Pakistan has had over the last few years are highly inflationary in nature) while in the long term it will be felt in terms of debt servicing crowding out investments in development and infrastructure.

The blame must be shared by everyone. …

Read more >> Dawn Editorial