Tuesday, 24 June 2014

Deadlier than terrorism

Courtesy:- S M Hali  

Pakistan is losing precious lives due to terror attacks but few people realise that road accidents take a higher toll of lives. According to a World Health Organisation (WHO) report, in the last decade, Pakistan suffered a loss of 50,987 lives due to terrorism while, in the same period, traffic accidents claimed 130,000 lives. Thus, while every effort is being made to counter terrorism, from negotiations with the Tehreek-e-Taliban Pakistan (TTP) to surgical strikes and now the ongoing military operation Zarb-e-Azb to root out terrorists from North Waziristan, little or no attention is being paid to eradicate the menace of road accidents.

Friday, 20 June 2014

PM's letter a goodwill gesture

Courtesy:- S Rahman

Common Economic Destination is not merely a collection of three words mentioned in PM Nawaz Sharif’s letter to his Indian counterpart Nirandera Modi but a solid objective that the leaders and people of both the countries ought to pursue to come out of the ever-deepening abyss of abject poverty and miseries.

Tuesday, 17 June 2014

Nation at war


After exhaustive and determined efforts to sort out issues with the TTP through dialogue as authorized by the APC held in September 2013, notwithstanding the continued terrorist acts against the security forces and security installations, the government perforce has instructed the Army to launch a full-fledged ground assault against the terrorists based in North Waziristan, supported by airstrikes at the hideouts and communication installations of the terrorists by PAF jets. The operation named ‘Zarb-e-Azb’ as stated by the Prime Minister and the COAS will continue until the last terrorist is eliminated. According to the ISPR and media reports, the operation is proceeding successfully and more than 150 terrorists, mostly Uzbeks including the mastermind of the Karachi attack have been killed. To make sure that the terrorists do not cross over to Afghanistan, the Afghan National Army and Afghan border security force have also been contacted to seal the border.

Friday, 13 June 2014

Budget strategy beyond reproach


It has taken care of all the segments of the society
The budgets that the governments all over the world announce annually are of immense interest to all segments of the society, as they embody strategies to propel growth in the economic and social sectors as well as the fiscal and monetary measures that not only provide necessary fiances to the governments for their obligatory undertakings but also affect economic situations of the masses in varying degrees. The judgment on whether a budget is good or bad is based on the overall impact that it is going to create in surmounting debilitating economic factors, developmental activities that it envisages to generate, the scheme of distribution of resources it contemplates and above all the range of relief measures that it stipulates for the poorer sections of the society.
The budget for 2014-15, the second by the incumbent government, announced by the finance minister, like the budget for 2013-14 which was a trend setter in effect, also aims at reducing the budget deficit which is the mother of all economic ills, broadening of the tax base, lays greater emphasis on private-sector led growth through myriad of measures aimed at nudging business and industrial activity in the country and protecting the poorer segments of the society.
It is an irrefutable reality that the present government inherited an economy in complete disarray. The grimness of the economic landscape warranted some tough and courageous decisions by the government in conformity with the ground realities, rather than politically motivated approach to appease the electorate and further precipitate the economic melt down. The country had a fiscal deficit of 8% of the GDP. There is an unqualified consensus on the point that for securing and promoting the wellbeing of the masses and sustaining the health of the economy, it is imperative to curtail this deficit through the only available options of cutting the non-developmental expenditure and broadening the tax net. The government did adopt a rational approach.
The government did adopt a rational approach. The economic management strategy implemented by the government has produced very encouraging results in all sectors of the economy though some of the targets, like revenue collection and pace of development envisaged in different sectors have not been met, as indicated by the economic survey. But the overall GDP growth of 4.1% does represent a substantial headway as compared to growth rate during the last six years, as a result of the policies aimed at promoting business and industrial activities within the country and attracting foreign investment. Fiscal deficit has been brought down to 5.1% and inflation contained at 8.5%. The success of the government policies has also been endorsed by the IMF, World Bank and the Gallop Survey report for the year 2014.
The budget for 2014-15 in fact represents the consolidation of the gains made during the last fiscal year, winching the country out of the economic quagmire and setting the stage for a self-sustained growth in the years to come. With a view to broaden the tax base and moving toward terminating excessive reliance on foreign borrowing, the government has set an ambitious revenue target of Rs2810 billion which would be supplemented by non-tax revenues of Rs319 billion. A conscious and deliberate effort has been initiated to bring the fiscal deficit down to 4.1 per cent by the end of the financial year.
The share of direct taxes in the new tax regime would be 66% per cent, a measure which apart from generating more revenues would also help in containing inflation. Bringing retailers and other non-tax paying sectors into the tax net through direct taxation is a commendable effort. The measures announced by the government would also help in documenting the economy. Increase in the development allocation and defence budget are good necessity-driven steps. Similarly, incentives announced for the exporters, investors and foreign investment in the form of reduction in corporate tax are right steps towards nudging economic activity in the country. For these measures, many critics are terming the budget as pro-business community and rich segments of the society. The notion is rather exaggerated. The concessions and incentives given to the business community are necessity-driven policy initiatives which were needed to create conducive conditions for the revival of business and industrial activities in the country and injecting new steam into the economy.
The government has not neglected the poorer sections of the society and has announced a number of steps to promote their well being and providing relief to them. The allocation under the BISP has been increased from Rs85 billion to Rs118 billion, with monthly support enhanced from Rs1000 to Rs1500. The government servants and pensioners have been given10% raise. Though it might seem insufficient to the relevant circles but the fact remains that it is more than the rate of inflation recorded during the year. The resource constraint faced by the government also did not permit any benign action. Provision of house building loans to those who cannot afford to construct a house for themselves through their own resources, the contemplated scheme of health insurance and already initiated measures for the youth are commendable moves towards well-being of less privileged classes.
The most redeeming factor in regards to the preparation of the budget is that the government consulted the business and industrial community and other stakeholders in regards to the imposition of new fiscal measures. The business community has already endorsed the budget proposals. My personal view is that the budget has taken care of all the segments of the society. It may not have addressed all the problems in consonance with the wishes of all the stakeholders, but it is the best possible effort in view of the prevailing economic situation of the country. The vision and strategy to achieve economic objectives, both in the short and long term, is simply beyond reproach. Economic management is not an easy task and even the governments in the most developed countries are never able to satisfy all the people all the time.

Thursday, 12 June 2014

Pro poor budget 2014-15

Courtesy:- S Rahman

Pragmatism and concern for the poor are the salient features of the Federal Budget 2014-15 announced the other day by Finance Minister Ishaq Dar. At no point in the budget speech, the minister has tried to draw a rosy picture of ‘all okay on all fronts’ as has been usual with many of our finance ministers of the past.

Even at the first, cursory look, the budget gives the impression of a realistic outlay of incomes and receipts of a country where the government has taken it upon itself to try in dead earnest to fulfill all the state obligations towards its citizens. That means the protection of the masses against impoverishment, food insecurity and against homelessness and despondency.

Finance Minister Ishaq Dar has himself pinpointed in his post-budget press conference that 90 million people live in this country below the poverty line. “They are our target.” He aimed to reach to the poorest of the poor.

Monday, 9 June 2014

Youth programmes - Am engine of socio-economic change

Courtesy:-  Nauman Ashraf

Prime Minister Nawaz Shrif presided over the second computerized balloting for grant of 6000 loans to the youth including women, under Prime Minister’s Youth Business loans Scheme on Wednesday. The first balloting held recently also disbursed loans to the same number of men and women. The Youth Business Loan Schemeinitiative differs from the previous failed schemes in many respects. 
It is being implemented through commercial banks who can take care of all aspects of the loans without political interference in line with the policies chalked out by the government. Another aspect is the commitment of the government to ensure utmost transparency in advancing these loans to make sure that the loans are given only to the really deserving individuals. 

Friday, 6 June 2014

Slaves of necessity


And politics of opportunity

Forming alliances is a democratic right of the political entities, desirous of orchestrating strong opposition to the policies of the sitting government and resisting its indiscretions contemplated not to be in the public interest, with the underlying purpose of strengthening democratic culture in the country. We in the land of pure have not had an enviable experience with the politics of alliances which were mostly formed to dislodge the incumbent elected governments or prevent certain political parties from winning the right to rule, with the connivance and backing of the anti-democratic praetorian powers. The result is that even after more than six decades of our existence as an independent state, we are still groping in the dark to find the avenue that could lead us to our cherished destiny of a truly democratic polity.

Thursday, 5 June 2014

Pak-China growth


The reliable friendship between China and Pakistan is exemplary. Regardless of the detrimental law and order situation in Pakistan, Chinese investment has consistently increased. Along with governments of both countries, the business leaders of private sectors are also playing an important role in strengthening economic relations.
Pakistan’s relationship with China complements the elements of growth. Now, the need of the hour is proper planning and its implementation. The increasing trade deficit, inflation and energy crisis in Pakistan has decelerated the movements of our industrial wheel. The economic crisis has brought us to a crossroads: either we continue to run crippling government corporations with public-private partnerships or we privatize them. By relieving the government treasury of this burden, consequently we may bring the trade deficit down.
Nowadays, safeguarding ones’ economic benefits is the first priority of every country. Focusing on economic gains, we shall promote trade and mutual investments with neighboring countries. The cruelest enemies of yesterday have turned into friends. European countries fought with each other for hundreds of years but mutual economic benefits have united them in the form of the European Union. In order to safeguard a country’s ideological and geographical boundaries without compromising national interests, trade agreements with neighboring countries should be signed and maintained. In this way, regional trade flourishes.
Shah Faisal Afridi, the President of the Pak-China Joint Chamber of Commerce and Industry, shares these views and insists that local and international investors must be provided with constitutional protection for the establishment of their businesses and protecting their valuable investments. For this purpose, immediate legislation is required to rebuild the lost confidence of investors and businessmen. According to him, a peaceful environment and conducive policies are important components for the success of a business and these can only be possible if private and public sectors work hands in gloves to formulate constructive policies.
Under the leadership of Chairman Mao Ze Tung, China developed a plan for economic development which is still being practiced. An enormous part of the economy is under the control of government, in which production targets, determination of prices and division of resources are included. If we take a look back in history, in the year 1820, China was even then, amongst the world’s big economies. According to new estimates, in the year 2030, China will have more than 30 percent share in the global economy. After the Economic reforms of 1979 till 2011, China’s average GDP growth has remained at 10 percent. In other words, China has doubled its economy after every eight years. The Chinese leader, Yang Zuang is considered the founder of economic reforms in China. Due to his vision, the Chinese economy has become an economy of scale, which means that transportation expenditures of a product are more than its cost of production.
In 1979, to facilitate foreign investors, special economic zones were established in China and their purpose was to increase export and to import modern technology. Moreover, decentralized economic policies were implemented which resulted in the endorsement of free market trade rules. Un-necessary paper work proceedings were eliminated and conditions for doing business were softened. These measures accelerated the process of attracting foreign investors to China. In short, China’s rapid economic growth is due to attracting large scale investments and accelerating the process of production along with strict implementation of the economic reforms.
Additionally, China has its place as a strong pillar in Pakistan’s foreign policy. The project of Gawadar port is an important sign of stronger Pak-China relations. In May 2013, Gawadar port project was officially handed over to China. According to the agreement, 750 million dollars would be invested in the project initially. The reason behind its importance is that 60 percent of oil is being imported by China from the gulf countries and reaches it after covering a distance of 16000 km. After the completion of Gawadar port project, the distance will reduce to 2500 km. In the year 2007-2014, many practical measures have been taken for the development of the Gawadar Port Project, which will benefit Pakistan’s economy. It is time for our business community to stop criticizing the project and support the national interests of the country.
A new Silk Route is now being constructed between China and Pakistan. Meanwhile, China-Pakistan Economic Corridor (CPEC) project has been initiated and a Joint Working Group has been devised, which has conducted its first meeting in January 2014 and second meeting was held in February 2014 at Beijing. The objective of this project is to facilitate trade between both countries by building an economic corridor. According to the details, the trade route will start from Kashghar towards Khunjerab and passing through Islamabad, Multan, Lahore, Sukkur shall reach its end at Karachi and Gawadar port.
The mutual five-year development plan for trade and economic cooperation plays a most significant role in Pak-China economic relations.
In such an encouraging environment, created with support from the governments of China and Pakistan, the business community should come forward proactively to promote regional and global trade. The Government of Pakistan should, however, take concrete measures to provide protection to the local as well as foreign investors so as to make Pakistan an emerging economic power of the region.

The writer is Media Manager, Pak-China Joint Chamber of Commerce and Industry.