By Dr Ishtiaq Ahmed
There is no denying that the erstwhile modernist Pakistani leadership tried to make Pakistan both democratic and Islamic, but no constitutional formula could find the proper balance Read more »
There is no denying that the erstwhile modernist Pakistani leadership tried to make Pakistan both democratic and Islamic, but no constitutional formula could find the proper balance Read more »
Is Pakistan’s middle class around 70 million (or nearly 40% of Pakistan’s population) as a recent article published in the daily DAWN suggested? After the publication of this article titled “Consumption conundrum” by Sakib Sherani (an ex-Banker), a former World Bank official Shahid Javed Burki writing in the Express Tribune Read more »
A growing rivalry between India, Pakistan and China over the region’s great
rivers may be threatening South Asia’s peace
Nov 19th 2011 | DELHI, DHAKA, ISLAMABAD AND SRINAGAR |
from the Economist
SONAULLAH PHAPHO has spent half a century picking a living from Wular lake high in Indian-controlled Kashmir. Today he is lucky if he scoops a fish or two out of the soupy mess. Read more »
Pakistan’s foreign exchange reserves hit a record high of $18.25 billion during the week ended July 2, following inflows of $411 million from World Bank and Asian Development Bank under programme loans, a senior central bank official said on July 8, 2011. Is this a reason to cheer? Read more »
A lot of statistics are just that statistics but some can be quite revealing. While there is almost a consensus that Pakistan spends too much on defense, the common perception its economic development is constrained by an unfvaourable business environment or high subsidies on fuel or food is not supported by the World Bank indicators for 2009.
First published October 2010, Updated April 2011
Admiral Mike Mullen (first from left), the U.S. Joint Chiefs of Staff, Pakistani Army Chief Gen. Pervez Kayani (third from left) and next to him, the I.S.I. Chief Ahmed Shuja Pasha (then Major Gen. and Director General Military Operations) aboard the U.S. naval carrier Abraham Lincoln Read more »
An edited version of this appeared in the Express Tribune, Oct. 25, 2010
Pakistan needs to revive its ailing and stagnating economy now and control galloping inflation. The chronic issues of fiscal profligacy and narrow tax base have assumed crisis levels and the government does not have any plan except to carry around the begging bowl to the western capitals. Read more »
By JANE PERLEZ
ISLAMABAD, Pakistan — The Pakistani military, angered by the inept handling of the country’s devastating floods and alarmed by a collapse of the economy, is pushing for a shake-up of the elected government, and in the longer term, even the removal of President Asif Ali Zardari and his top lieutenants. Read more »
The country lost 2.39 million metric tons of rice and 10.4 million tons of standing sugar cane, the minister said in an interview today in Islamabad. The nation may also import 2.8 million bales of cotton, he said. Read more »
3.5 millon children at risk , economy and exports to contract as losses could exceed $15bn
Pakistan seeks restructuring of $10bn IMF loan as the United Nations urges help and raises $500 million
On Aug. 21, around 150,000 Pakistanis in Sindh province were evacuated to higher ground because of the swollen Indus River, a government spokesman said. Officials expect the floodwaters to recede nationwide in the next few days as the last river torrents empty into the Arabian Sea. But survivors may find little left when they return home – the waters have washed away houses, roads, bridges and crops, and leaving millions homeless and penniless. In Sindh, there are already 600,000 people in relief camps set up during the flooding. Read more »
Commentary by Laurence Kotlikoff
Aug. 11 (Bloomberg) — Let’s get real. The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills.
What it can and must do is radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess. But this is the good news. It means they can each be redesigned to achieve their legitimate purposes at much lower cost and, in the process, revitalize the economy. Read more »
A survey of 104 developing countries by the Oxford Poverty and Human Development Initiative at the University of Oxford measures the incidence of poverty using overall living conditions for households. According to this survey , the percentage of poor in Pakistan is 51% compared to 17%to 22% poverty rates cited in the official statistics. Pakistan’s rank is 31st from the bottom among these developing countries. Not surprisingly virtually the the entire South Asia and the African continent is among the poorest in the developing world. Read more »
Published in DAWN
It is unfortunate that while acknowledging that the inflation is creeping up again due to rising energy costs and will be 12 per cent, the official budget documents have put the inflation (GDP deflator) at 10 per cent which does not appear to be credible. It is easy to show that if this measure of inflation (GDP deflator) was 11 per cent, last year`s real GDP growth was three per cent and worse, if it was 12 per cent, then the GDP growth was just 2.1 per cent.
Now who and why the government`s economic mandarins are trying to mislead? The people? They could not care less about the number with so much inflation, long hours of load-shedding, and terrible security conditions. The IMF or the World Bank? They know the reality too well. That leaves the political leadership. If that is the case, it does not speak much about the level of involvement and competence of the cabinet that led by Yousuf Raza Gilani.
In practical and political terms, what all this numbers game boils down to is that the economic managers are trying to hide the fact that the people are poorer and their real incomes have fallen more during the last 12 months than they would have us believe. In Pakistan, a GDP growth of three per cent or less, taken together with a population growth rate of 1.7 per cent and highly inequitable income distribution, usually implies that the real income of about 80 per cent of the population is falling.
This should raise alarm bells for any political government. Another reason for concern is that the global economy might be about to relapse into a period of slower or little growth if the contagion from the European debt crisis spreads beyond Europe and affects global economy and the credit markets as did the US sub-prime crisis in 2008.
The situation calls for a realistic and candid assessment of the economy. Overstating economic growth and understating fiscal deficits may buy some time but ultimately is going to land Pakistan into more trouble and deeper into debt as it may have to ask the IMF for more money. Greece made a similar mistake and tried to hide its deficit numbers using wrong data and creative accounting but eventually it had to pay the price. Let`s face the facts.
The IMF programme bought Pakistan some time but difficult days seem to lie ahead. The inflation is rising again. Agriculture growth is faltering due to water and energy crises after a pickup in 2008. The prospects for exports growth are clouded by the European sovereign debt crisis and the European Union is our largest market. The stability in the foreign exchange reserves is just a mirage because it merely reflects the money that has come from the IMF.
And we are spending more on weapons and providing relief to higher income groups on their electricity bills, while wasting Rs245 billion or almost one-third of the entire budget deficit on money losing government corporations due to sheer incompetence and corruption. If only, the technocrat finance minister had come up with a plan to plug this gargantuan hole, one would have condoned questionable actions.
But it feels like we have chosen to live in a state of denial. No wonder, self-respecting professionals like former finance minister and the state bank governor found it difficult to work in such an environment. For the PPP that hardly has anyone with right expertise in economic management, this should be a cause for reflection and critical self-evaluation.
It does not have much influence over defence and foreign policies. It should pay more attention to the economy.
Security issues and foreign policy is fine stuff. Aid never helped us nor it will now. We must pay attention to water security, energy, and overall economy. We have a serious intellectual deficit. Instead of consulting mediocre World Bank officials, why not engage some one like MIT Professor Raghuram Rajan for occassional consultation. But Why? He is an Indian. That is irrelevant. He is currently an eminent professor of economics at MIT and a former chief economist of the IMF but with a different perspective. Please read the following news story: Read more »
Wall Street Journal
April 5, 2010
A feud over water between India and Pakistan is threatening to derail peace talks between the two neighbors
|From John Briscoe|
Anyone foolish enough to write on war or peace in the Indus needs to first banish a set of immediate suspicions. I am neither Indian nor Pakistani. I am a South African who has worked on water issues in the subcontinent for 35 years and who has lived in Bangladesh (in the 1970s) and Delhi (in the 2000s). In 2006 I published, with fine Indian colleagues, an Oxford University Press book titled India’s Water Economy: Facing a Turbulent Future and, with fine Pakistani colleagues, one titled Pakistan’s Water Economy: Running Dry. Read more »
At a briefing at the Pakistan Embassy, Gen Kayani also said that there had been a marked change in the US attitude towards Pakistan because of the army’s success in South Waziristan and Swat.
“I told Senator John Kerry and Senator Richard Lugar that in order to make sure that Pakistan’s economy and energy needs are met, we are willing to forgo the military equipment that we have asked for,” he said.
“The most important concerns for Pakistan today are economy and energy and we have emphasised that with the American administration that these are the needs that need to be met,” he added.
Gen Kayani met the two senators earlier this week when he arrived in Washington for the two-day strategic dialogue, which concluded on Thursday.
Published in DAWN
IN a rare press briefing last month, Gen Ashfaq Kayani said the success of military operations in the tribal regions have caused a substantial decline in cross-border attacks on Nato forces in Afghanistan and warned that it was essential to address Pakistan’s long-term strategic concerns for stability in the region. Read more »
By Yousuf Nazar Read more »
By Andrea Hart
Circle of Blue
Photo ©2009 J. Carl Ganter
Raw sewage flows beneath an elevated pipeline toward the Yangtze River in Chongqing, China. According to the McKinsey report, 21 percent of China’s surface water resources are unfit for agriculture.
Global water demand will grow at an accelerated rate — from 4,500 billion meters cubed to 6,900 billion cubed — by 2030 increasing the water gap.
If water consumption continues without reform or regulation over the next 20 years, 40 percent of global demand will not be met, according to a McKinsey & Co. report released last week. More than one billion people already don’t have access to clean water. Read more »
[Note: Pakistan's Low Tax to GDP Ratio is as important an issue as any for the country]
WASHINGTON: US Secretary of State Hillary Clinton has urged wealthy Pakistanis to pay a larger share of taxes to reduce their country’s dependence on foreign aid.
In a testimony before the Senate Foreign Relations Committee, the top US diplomat reminded rich Pakistanis that they had a duty to enable their government to fund schools and hospitals and to spend more on other social projects by paying taxes.
“The very well-off” in Pakistan “do not pay their fair share for the services that are needed, in health and education primarily,” she observed. Read more »
Taxation system is unjust and so is the oil pricing formula. However, that has been the case for a long time. Carbon tax is nothing but a new name given to Petroleum Development Levy (PDL). In fact, Rs10 is less than the PDL of Rs. 10.54 that was being charged on petrol in June. The net increase in the taxes (sales and carbon minus PDL) was just 28 paisas a litre while the freight, OMC, and petroleum dealer margin combined accounted for 96 paisas of the total increase of Rs 5.92. Therefore, out of the total increase of Rs 5.92 in the price of petrol, most of the increase was due to (besides the rise in international prices) higher commissions and charges paid to the oil companies and petroleum dealers as shown below:
The State shall exercise its powers and authority through chosen representatives of the people. [Preamble para 3]
The “State” means the Federal Government, Parliament, a Provincial Government, a Provincial Assembly, and such local or other institution or other authorities in Pakistan as are by law empowered to impose any tax or cess [Article 7]
Any Law, or any custom or usage having the force of law, in so far as it is inconsistent with the (fundamental) rights conferred by Chapter 1, shall, to the extent of such inconsistency, be void. [Article 8]
No tax shall be levied for the purposes of the Federation except by or under the authority of Act of Parliament [Article 77]
Article 89 gives the President to promulgate ordinance and states that:
An ordinance promulgated under this article  shall have the same force and effect as an Act of Parliament and shall be subject to like restrictions as the powers of Parliament to make law, but every such ordinance-
(a) shall be laid-
(i) before the National Assembly if it [contains provisions dealing with all or any of the matters specified in clause (2) of Article 73] and shall stand repealed at the expiration of four months from its promulgation or, if before the expiration of that period a resolution disapproving it is passed by the Assembly, upon the passing of that resolution.
Clause (2) of Article 73 relates to money bills including finance or budget.
In view of the above provisions of the Constitution, it is clear that only the State through the Parliament has the exclusive jurisdiction in matters of taxes and the Supreme Court can only interfere in accordance with Article 8.
The Mochi darwaza language of the remarks of the bench is highly inappropriate and politically motivated and has nothing to do with the fundamental rights contained in Chapter one of the constitution. Judges have no business meeting US diplomats and holding televised meetings, addressing conventions, and making rhetorical populist speeches. They must stick to the business of dispensing justice and speak only through their judgements.
Are some powers trying to build up judges so that they can serve in a future set up? If one looks at the usual indicators, the choice of cases, rhetoric from the bench, its support from quarters who have always been in the pay of agencies, the answer seems to be yes. Pakistanis, brace yourselves for President Iftikhar Chaudhry.
P.S. What has been the practice in the United States?
Quote from “The Taxing Power” by Professor Erik M. Jensen who is an academic and author:
In general (and to the dismay of some Supreme Court justices), the Court has bent over backwards not to challenge levies that Congress has characterized as taxes. In McCray v. United States (1903), the US Supreme Court considered federal taxes on margarine. In an 1886 act, Congress provided for taxing yellow margarine at ten cents per pound, while margarine of other colors was taxed at only one-quarter cent per pound. The purpose behind the taxes was clear – to make margarine less competitive with butter – but the Court refused to look beyond the form of the statue. The Court quoted an 1888 opinion to the effect that “[t]he judicial department cannot prescribe to the legislative department limitations upon the exercise of its acknowledged powers. The power to tax may be exercised oppressively upon persons; but the responsibility of the legislature is not to the courts, but to the people by whom its members are elected.”
By Walter Pincus and Joby Warrick
Washington Post Staff Writers
Director of National Intelligence Dennis C. Blair told Congress yesterday that instability in countries around the world caused by the current global economic crisis rather than terrorism is the primary near-term security threat to the United States.
Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world’s monetary system with liquidity, according to an internal client note from the US bank Citigroup.
The bank said the damage caused by the financial excesses of the last quarter century was forcing the world’s authorities to take steps that had never been tried before.
This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.
“They are throwing the kitchen sink at this,” said Tom Fitzpatrick, the bank’s chief technical strategist. Read more »
Published in DAWN
Given that the current account deficit is now likely to continue to shrink for the next several months, the month-on-month core inflation rate has fallen every month since May 2008, the fuel subsidies (the principal cause of deterioration in the fiscal position) have been withdrawn, and the manufacturing production is falling, the balance of risk in Pakistan’s economic outlook has shifted from inflation to growth. Do the IMF and Pakistani officials, who are negotiating the package, understand this? Have they taken into account these recent developments and trends, and their policy implications? Read more »
Given the current ‘political realities’, Pakistan seems to have little option but to go to the IMF. But the truth is Pakistan can raise $5 billion in the next 30 days if it wants to; even if Saudi Arabia does not extend oil credit facility.
The United States wants Pakistan to work with the IMF and the government does not want to upset Washington. Otherwise why would it sit on proposals (like the exchangeable bonds and the securitisation of remittances) for months that could have raised a few billion dollars? The proposal from the Chinese to buy minority stake in the National Bank of Pakistan, likewise, was put in cold storage. Read more »
Pakistan’s current economic meltdown is a crisis of competence if judged in light of the recent past. In the context of history, it represents a colossal failure of the establishment’s long-term foreign and economic policies. Pakistan desperately needs four to five billion dollars to avoid default on its external obligations. The government is working on the multilateral institutions and Friends of Pakistan to raise this sum failing which it will go to the IMF. The government does not want to borrow from the IMF to keep its hands relatively ‘free’ and avoid the likely political fall out from following the IMF’s prescriptions. Does Pakistan have an option? Unfortunately, no. Read more »
The 43 nations participating in the Asia-Europe Meeting summit reconvened for a second day of meetings in China’s capital Saturday, a day after adopting a statement calling on the IMF and similar institutions to help stabilize struggling banks and shore up flagging share prices. Read more »
BEIJING — For three decades, China has fueled its remarkable economic rise by becoming the world’s workshop and unleashing a flood of low-priced exports. But faced with a possible global recession and weakening demand for Chinese exports, the question now is whether the ruling Communist Party can prevent the financial crisis from derailing the country’s economic miracle. Read more »
By David Rothkopf
Published: October 21 2008 18:59
For weeks, the headlines have been dominated by banks faltering and countries propping them up. But we have entered a new phase of this crisis in which countries themselves are starting to struggle. Where these battered countries are first turning for help illustrates that what we are witnessing is different from anything we have seen before. It also lays out a clear challenge for those who are hoping the global financial summit announced over the weekend will produce an effective Bretton Woods II, a new international system reflecting a new financial order. Read more »
Sat Oct 18, 2008
ISLAMABAD (Reuters) – The top U.S. diplomat for South Asia began a series of meetings with Pakistan’s leaders on Saturday, with the U.S. ally facing a looming balance of payments crisis as well as rising Islamist militancy. Read more »
Following a packed weekend of meetings here, many of the world’s top economic officials are returning to their home countries Monday to deal with the next stage in the ongoing financial crisis. Read more »
October 15, 2008
President Zardari’s visits China at a time when the global economic power balance is undergoing a historic shift. “End of US era – now China calls the tune”, declares a headline of Sydney Morning Herald, Australia’s oldest and most respected newspaper. “Can Chinese Cash Save the World’s Banks? “, runs a lead story in Time. “Is this the end of the American era?” is the title of an op-ed by noted historian Paul Kennedy in the UK’s Sunday Times. Read more »
By Peter Boone, Effective Intervention
and Simon Johnson, Peterson Institute for International Economics
Op-ed in the Washington Post
October 12, 2008
The global financial outlook grows more dire by the day: The United States has been forced to shore up Wall Street, and European governments are bailing out numerous commercial banks. Even more alarmingly, the government of Iceland is presiding over a massive default by all the country’s major banks. This troubling development points not only to an even more painful recession than anticipated, but also to the urgent need for international coordination to avoid something worse: all-out financial warfare. Read more »
The IMF has warned that the world’s financial system is on the brink of meltdown. The worst global financial crisis since the 1930s is more than just an economic phenomenon. It may turn out to be the most important event since the collapse of the Soviet Union and the fall of the Berlin Wall in 1989. A unipolar world emerged following the disintegration of the Soviet Union. The year 2008 may go down in history as the year in which the Anglo-Saxon financial model collapsed and global economic power shifted from the West to the East. Read more »