Tag Archives: Sector

Pakistan is defaulting on sovereign debt

Power sector dues: Govt defaults on sovereign guarantees

By Shahbaz Rana

ISLAMABAD: Failure to honour its financial commitments to Independent Power Producers (IPP) has led to the first-ever sovereign default by the government in Pakistan’s history.

The default on sovereign guarantees – assurances the government provides to foreign investors – may not only unnerve the financial markets, but also downgrade the government’s creditworthiness, making it more expensive to borrow money.

“Today, the government of Pakistan has committed a sovereign default for the first time in the history of the country”, announced the IPPs Advisory Committee here on Tuesday.

“The government has defaulted on payments of roughly Rs45 billion to nine IPPs that generate 1,700 megawatts of electricity”, said Abdullah Yusuf, Chairman IPP Advisory Committee while talking to The Express Tribune. These nine IPPs started operations in 2004 and their total receivables amount to almost Rs232 billion.

Taking legal course

The IPPs gave a 30-day payment notice to the power purchaser, the Central Power Purchasing Agency (CPPA), followed by a 10-day notice to the government. Neither the CPPA nor the government cleared the overdue amounts, said the advisory committee.

The IPPs have exhausted all avenues available and the notice served to the government expired on Tuesday, the committee said.

After the default, the IPPs have issued a legal notice to the government for recovery by Thursday, May 10th, 2012 failing which the IPPs will follow a legal course.

Yusuf said the IPPs will go to the Pakistani courts.

“The default is a very serious matter and carries negative implications for the country”, Yusuf added. ….

Read more » The Express Tribune

Gen. Kayani rules out Pakistan’s unilateral withdrawal from Siachen

Should discuss all disputes including Siachen with India: COAS Kayani

Excerpts;

…. Talking to media, after reviewing search operation underway to bring out 139 martyred troops in Gayari sector buried under tons of snow, he said Pakistan was open to talks with India to de-militarize Siachen. ….

… COAS also made it clear that army was protecting country’s borders on Siachen. ….

…. To a question, he said Siachen was an enormous burden on the taxpayers of both the neighbours.

“Siachen consumes a mammoth amount of national exchequer, which must be diverted to the people of both countries respectively”, said Gen Kayani. ….

…. To a question, he refused to comment on PML-N’s Mian Nawaz Sharif’s statement on Siahcen.

Sharif in a statement on Tuesday had exhorted Pakistan and Indian governments to withdraw their troops from Siachen sector and resolve the issue through dialogues.

Read more » Geo Tv

Pakistan is near to declare bankruptcy

Rs100 crore a day

By Dr Farrukh Saleem

Pakistan’s Public Sector Enterprises (PSEs) are falling like nine pins. The Pakistan Railways, the Pakistan International Airlines, the Pakistan Steel Mills, the Pakistan Electric Power Company (Pepco), the Pakistan Agricultural Storage and Services Corporation (Passco) and the Utility Stores Corporation (USC) collectively end up loosing Rs360 billion a year – Rs100 crore a day every day of the year. That’s a hundred crore the government does not have – so it begs, borrows, steals and prints.

Currently, Nadeem Khan Yousufzai, MD PIA, is managing to lose Rs7 crore a day every day of the year. Haji Ghulam Ahmad Bilour, Federal Minister of Railways, is managing to lose Rs5 crore a day every day of the year. PIA’s half yearly report titled “Flying towards a prosperous future” reports that liabilities went up from Rs62 billion in 2005 to Rs200 billion in 2009. PIA’s annual report titled “We stand for national values” reports that net losses at the PIA have gone up from Rs4.4 billion in 2005 to Rs35 billion in 2008. At the Pakistan Railways, the overdraft now floats around a hefty Rs48 billion.

In mid-2009, the Pepco’s circular debt had reached a colossal Rs300 billion and that’s when the Government of Pakistan gave birth to another illegitimate dragon – Power Holding Company. The new dragon took over all of the Pepco’s sins by borrowing heavily from the banking sector but within two years of that take-over the Pepco committed 300 billion additional sins. And now the banks have not much left to lend.

The power sector debt – Rs485 billion and rising fast – just by itself has the potential of landing Pakistan’s entire banking sector into the gutter. Loosing Rs100 crore a day every day of the year will land the government into a ditch deeper than the government has ever been in.

We desperately need a Public Sector Turnaround Strategy (PSTS) without which our very survival as an effective nation-state is at stake. Our survival is at stake and yet our decision-makers are all about political rallies. I was once told that politics is the second oldest profession but the way our politicians are practicing politics it bears a close resemblance to the first. ….

Read more » The News

Dangerous Minds: Noam Chomsky on the Wall Street protests

Noam Chomsky sends a “strong message of support” to the organizers of the Occupy Wall Streetprotests:

“Anyone with eyes open knows that the gangsterism of Wall Street — financial institutions generally — has caused severe damage to the people of the United States (and the world). And should also know that it has been doing so increasingly for over 30 years, as their power in the economy has radically increased, and with it their political power. That has set in motion a vicious cycle that has concentrated immense wealth, and with it political power, in a tiny sector of the population, a fraction of 1%, while the rest increasingly become what is sometimes called “a precariat” — seeking to survive in a precarious existence. They also carry out these ugly activities with almost complete impunity — not only too big to fail, but also “too big to jail.”

The courageous and honorable protests underway in Wall Street should serve to bring this calamity to public attention, and to lead to dedicated efforts to overcome it and set the society on a more healthy course.” …

Read more » Dangerous Minds

‘Killer’ alleges MQM has militant wing

by Ansar AbbasiTHE NEWS

ISLAMABAD: One of the most dangerous alleged target killers, who confessed to have killed many, including police officers in Karachi, has reportedly claimed his association with the Muttahida Qaumi Movement’s “militant wing”, and has named Dr Imran Farooq as the contact person for many party militants. He further said that Ajmal Pahari was one of the MQM’s men.

Arrested and interrogated in 2010 before the murder of Dr Imran Farooq, the accused target killer, Muhammad Ishtiaq, alias Salman, alias Police Wala, confessed before the Joint Interrogation Team comprising representatives of the ISI, IB, Rangers, CID, Sindh Police and Special Branch, as reported in an official document, that Ajmal Pahari (who was arrested recently in Karachi and is alleged to have been involved in the killing of 100 people) also belongs to the MQM.

Continue reading ‘Killer’ alleges MQM has militant wing

HEC: Planning New Institutions

by Dr. Azhar A. Shah

When asked why almost all the federal universities are located in Islamabad and why there are thick clusters of public sector universities in the capital cities while other regions of each province have been deprived of both provincial or federal public universities; the beneficiaries of the centralized Higher Education Commission (HEC) claim that it is the fault of the politicians who are not interested in the education of their local people and that HEC has nothing to do with the location of the universities!

Can we ask these supporters of the Higher Education Commission (HEC) to kindly read what HEC claims on its website:

“Since its inception, HEC has established about 31 new universities and more than 50 sub-campuses of the existing universities in public sector throughout the country. As a step forward, Planning and Development Division has prepared a map to get the clear view of geographical areas where there is a potential for new institutions.”

This said, the website continues:

“The Division is planning to identify the potential areas where new institutions for higher education can be developed. In this regard P&D Division is acquiring the discipline wise data of students appeared in higher secondary examination from all the education boards of the country from 2005 to 2009. On the basis of that data P&D division will identify the potential areas where new institution may be developed.”

(http://www.hec.gov.pk/InsideHEC/Divisions/FPD/Pages/GoalsObjectives.aspx)

One really wonders which statistics and criteria did HEC use for the establishment of its 30 universities and 50 sub campuses? How much expenses were incurred on each university/campus? Will it be possible for HEC to make the list of these new universities along with their expenditures available on its website? This list is essential to see where the returning thousands of PhDs will be inducted in!

From what we can see on its website, we can observe the severe failure of central planning and development that is being advocated by Prof Attaur-Rahman and others. It has made over-provision of higher education services to the a few big cities, ignoring the bulk areas/ regions of our country. Universities are the agents of social change and we should have at least one comprehensive public sector university in each city/ town so that the development, the change, gets shared homogeneous across the regions and across the country!

PS: Please compare the central planning of Pakistani much acclaimed Higher Education Commission (HEC) with that of Indian UGC to see how Indian central universities are dispersed throughout the country (http://www.ugc.ac.in/inside/centraluni.html).

Courtesy: Sindhi e-lists/ e-groups, April 15, 2011.

SINDH NEEDS INDUSTRIAL DEVELOPMENT

by Dr Ali Akbar Dhakan, Karachi, Sindh

All the macro economic objectives can be obtained through the development of industries both small and large scale because they provide employment facilities, increase supply of goods, boost up exports, control inflation and price hike, reduce poverty and provide chances of prosperity through improvement of purchasing power of the common people .The problem of unemployment in Sindh particularly in Rural areas is due to lack of focus and attention to be given to the development of this sector.

Continue reading SINDH NEEDS INDUSTRIAL DEVELOPMENT

Injustices in Pakistan: Startling Disclosures of Federal Employment Figures

 

By Aziz Narejo

 

Sindhis and Baloch have been complaining about injustices to them since the inception of Pakistan. Be it the distribution of resources, apportionment in budget, provincial autonomy, water rights, share in economic development, expenditure in social sectors, education, health and infrastructure development, their involvement in the decision making process or their share in the military, the most powerful institution in the country, they are ignored everywhere. Their cries are never heard or even noticed at the highest levels.

It is even more unfortunate that the so-called human rights advocates, champions of the civil society, the ‘democratic forces’ and others proclaiming to be on the side of fairness in society also always ignore the voices from Sindh and Balochistan. After losing all the hope for any positive change, Baloch have finally decided to part ways with Pakistan. If it continues, Sindhis may have to make a decision too. …

Rea more : Indus Herald

Pakistan’s new economic agenda

by Manzur Ejaz

Then let’s start. Let’s take the economic agenda first:

1. Feudalism should be abolished completely

2. It will be a Social Democratic Economy…Public sector along with largely private enterprises. Public sector should be expanded to provide universal education and health services….

3. Everyone pays taxes to get services. At least everyone files taxes whether rich or poor. Role of indirect taxes should be minimized which is regressive but main source of government income. In a mixed economy taxes are the only instrument to distribute wealth on equitable basis. It is the only way to fund government operations without borrowing. And inflation or rising prices can only be checked if government borrowing is brought down to zero.

4. Electricity and gas should be supplied on continuous basis to run the industry and trade smoothly.

5. People living beyond their means and having wealth beyond known sources should be prosecuted and brought to justice.

6. End of monopolies or they should be regulated wherever necessary. Monopoly in media should be ended: Like the US one group should not have major newspaper in more than one region.

Read more : Wichaar

The Downfall of Political Islam

by Samir Yousif

Finally I would point out that political Islam has failed to provide a political model that can compete with other contemporary political models, such as the Chinese model, Western democracies, or even developing democracies such as India and the other Asian countries. That comes with no surprise, as religion, any religion, keeps itself centuries behind.

The theme of my argument is the following statement: Islam, as a religion, has nothing to offer to economic or political theory. This simple idea has serious consequences. Political Islam, when it runs the country, will ultimately fail. It has no appropriate agenda that provides solutions to real political or economic challenges such as underdevelopment, unemployment, inflation, recession, poverty, just to mention a few.

(I will not touch upon the most significant political-socioeconomic issue which is income inequalities, because Islam accepts a society composed of very rich classes living side by side with very poor classes- examples can be found from history or from today’s Muslim countries like Saudi Arabia, and Iran). While some Islamists continue to claim the existence of “Islamic economics,” they have failed in producing anything close to a simple theory of economics.

I believe that the main reason for the downfall of Muslim civilisation was the inherent social crisis: a society composed of few rich surrounded by the poor masses kept going by a strong religion. Social and political revolutions took place several times during the heyday of Muslim civilisation, as happened during the Umayyad Caliphate, the Abbasid Caliphate, in Muslim Spain, and the famous Zanj Rebellion during the year 869 in Basra. But historians have ignored such revolutions. Muslim economies have failed throughout history to solve the very basic problem: the wage equation. Unskilled and skilled workers were downgraded to the lowest classes in Muslim societies, and were paid the minimum. History has showed that under Islam the wealth of the country went mainly to the Calipha, feeding his palace, army, the royal family, and to the vested interest that the Calipha has chosen himself. The tax system was mainly imposed on the agricultural sector, what was known as the produce tax (Kharaj).

“Islamic economics” is a term used today to justify the significant income inequalities in such societies and to find religiously- accepted investment opportunities for the rich. …

Read more : http://www.document.no/2011/01/the-downfall-of-political-islam/

Pakistan – Borrow until broke: how to make a nation fail

– Dr Manzur Ejaz

The lack of governance, irresponsible spending by the governing elite and non-collection of income taxes are the biggest hurdles. Power shortages, corruption and nepotism are major hurdles for the private sector to increase production. The opportunism of different political parties does not allow any government to devise a rational policy …

Read more : Wichaar

New corruption scandal deals blow to India’s image

By Paul de Bendern and Jui Chakravorty

NEW DELHI/ MUMBAI (Reuters) – India’s reputation as a place to do business took another hit after the scandal-tainted government charged top public sector bankers with accepting bribes initially estimated at hundreds of millions of dollars.

The scandal is one of the biggest to taint India, potentially harming the image of Asia’s third-largest economy as destination for foreign investors, especially as it comes a few days after Prime Minister Manmohan Singh has had to defend his government in another graft scandal involving telecoms licences sold at rock-bottom prices. …

Read more : Reuters