I think it is clear that PTI can only make government in KPK. It will be a split mandate and in sha Allah PTI will not join any status-quo party for power.
Situation is not ideal but everything is not lost. The good thing will be that they can still show performance in KPK. They can:
a) Eliminate corruption in KPK
b) Raise strong voice against this war and drones by passing resolutions and active protests on the streets or even blocking supplies
c) Strength the system of justice in KPK
d) Conduct local bodies elections
e) Help promoting peace and local businesses to improve employment situation
f) Make it a good place to invest for private sector especially in hydel power, gem stones, engineering etc
g) Give incentives to the private sector to invest in research and development through universities
h) Give results in other key areas which are part of their manifesto
In National Assembly, they can make strong noise on policy issues related to local and international affairs.
Transparency International Pakistan says Gilani tenure has given a loss of Rs 8,500 billions in corruption so far. Still nincompoos and corrupts in government expect people to pay taxes like “responsible” citizens. Yes, people like us who pay taxes despite corruption are responsible and they are responsible for beeing ignorant.
People should go for a collective boycott of taxes and take back the country from these evil ruling elite.
by Ansar Abbasi
ISLAMABAD: Pakistan has lost an unbelievably high amount, more than Rs8,500 billion (Rs8.5 trillion or US$94 billion), in corruption, tax evasion and bad governance during the last four years of Prime Minister Yusuf Raza Gilani’s tenure, Transparency International Pakistan (TIP) claims.
The TIP advisor, Adil Gillani, told The News that the real impact of corruption in the country’s economy is far more than what is generally estimated or what is formally uncovered. He believes that Pakistan does not need even a single penny from the outside world if it effectively checks the menace of corruption and ensures good governance.
It is generally believed that the four years of the present regime under Gilani had been the worst in terms of corruption and bad governance in the country’s history. Past records of corruption were broken and Pakistan started rising in the ranks of the most corrupt nations of the world.
There has been no check on corruption as the anti-corruption institutions like the National Accountability Bureau and Federal Investigation Agency instead of checking corruption have been siding with the corrupt.
These institutions have been helping the corrupt to get off the hook by distorting and mutilating the evidence in favour of the influential accused.
Adil Gillani, the TIP representative, who too has been haunted by the government during these years for producing corruption reports, explained that the TIP pointed out corruption of Rs390 billion in 2008, Rs450 billion in 2009, Rs825 billion in 2010 and Rs1,100 billion in 2011 under the present regime. The total of these identified cases of corruption is Rs2,765 billion.
In addition to this, he explained the following:
The minister of finance of the present regime himself confirmed corruption in FBR of over Rs500 billon per year, which makes the total Rs2,000 billion; Auditor General of Pakistan pointed out Rs315 billion corruption in 2010; Public Accounts Committee recovered Rs115 billion in 30 months till 2011; circular debt is Rs190 million; KESC was given Rs55 billion illegal benefits per annum since 2008; state-owned enterprises like PSO, PIA, Pakistan Steel, Railways, SSGC, SNGC are eating away Rs150-300 billion per annum; tax to GDP ratio in 2008 was 11%, which in 2011 has reduced to 9.1% instead of being increased.
Gillani explained that Pakistan’s Gross Domestic Product is worth US$175 billion and in the light of this the drop of 1.9% in the tax GDP means annual loss of US$ 3.3 billion. This confirms that FBR is losing Rs300 million per annum, which is annual additional loss since 2008 and stands at Rs1,200 billon in four years
The TIP adviser added that India’s tax-GDP ratio is 18%, and at that rate, Pakistan’s tax evasion/corruption in FBR is 9% of $175 billion, which is US$15.5 billion per year, i.e. Rs1,400 billion per year.
It is worth mentioning here that it is not only the Transparency International but there have been different international bodies including the World Bank and world capitals, which have been showing their concern over rising trend of corruption in Pakistan under the Gilani’s regime. It was mounting corruption and extremely bad governance, which even dithered the outside world to offer cash to Pakistan during 2010 and 2011 floods, which devastated different parts of Pakistan and affected millions of people.
At home the corruption became a fashion in such a shameless manner that even the cabinet ministers started openly pointing fingers at each other and even at the highest levels including the prime minister. Some even approached the Supreme Court but despite all this, corruption remained the hallmark of the present regime, which instead of curbing it started defending it in the name of democracy.
Before the concepts of agrarian and market economies, ancient societies especially the Roman Empire used to have a system based on Manorialism. In that society ruling elite comprising mostly of feudal elite and others used to control the land resources of the state through their political and military influence. The ruling elite support their finances and lifestyle by collecting obligatory contributions from the peasants and slave population under their jurisdiction. The contributions were in the form of coins, mandatory labor or even in the form of usable items and kinds. The dependent in return only used to get the right of living, earning just enough to live and a false sense of security.
The way situation in Pakistan is going, it seems we are moving very fast in backward direction of time to the point where Manorialism was at its peak and few lords used to enjoy enormous economic and ruling power. Recent debate on imposing new taxes or increasing the percentages of the old ones to serve the expenses and corruption of our ruling elite is a good example of this.
The reality of our situation is that few classes of our people are working like bonded labour to pay most of the taxes so that they can ensure their living and also serve the ruling classes of the state. The Tax to GDP ratio debate and the methods which are devised to increase it in order to bring it to so called international standards seems to be leading a common salary class person in a position where he will only be able to serve the ruling elite with his hard work and his own survival will be just enough to keep him available for work.
The problem with our country is not of low Tax to GDP ratio but the real problem is wastage of resources and money for serving the huge size of governments comprising of around hundred of federal ministers and equal positioned offices. Also in provinces the situation is no different with lots of illicit ministries and offices working just to accommodate the supporters of ruling elite and ensure a regular income through kick backs and percentages.
Major area of our budget goes into debt retirement and interest payments. With Debt to GDP ratio of over 60 percent resulting in high interest payments and no policy of reducing or controlling the expenses, we cannot expect any improvement in our current economic crisis. In fact the current tax debate is for RGST which is being imposed to fulfil the demand of IMF to get more loans.
Another area where we are suffering badly is unaccounted defense budget and useless expense on an unwanted war. The war is not only hitting some estimated 13.5 billion dollars annually but it is taking the investment and business opportunities away from the country resulting in unemployment and economic slow down. This economic slow down and unemployment is also resulting in high crime rate and low standard of living. This shows a real sorry situation and it seems we are in a self-destruction mode.
Now the question is how to come out of this mess keeping in mind our problems, limitations, resources and opportunities. The problems and limitations discussed above are obvious and only an average mind is required to understand them. The real thing is to look what resources we have and what opportunities we can produce for the economy of our country.
First thing to do is to reduce government expenses and for that reduction in the size of government is must. Government should limit itself in areas where it is required most or if required at all. Most of the departments and ministries like housing, women development ,defence production and many others are simply there to accommodate political allies and cronies. Also we need to see how much burden the government-owned organizations put on our economy. Not only illicit expenditures are a problem but the real problem is corruption and resulting loss of money. Not only ending corruption in these institutions is required but giving them to private sector through privatization or if no buyer is there then involving private sector through public-private partnership on merit and transparent accountability can help in reducing the expenses.
For debt retirement, not only steps like privatization based on merit, transparency and fair value can help but selling the prime commercial land which our institutions hold can help the cause. There is simply no reason to have military bases or armed forces colonies on prime commercial area such as Shahra e Faisal or Sadar. In most of the countries military bases are planned outside the cities which not only help in controlling the problem of population congestion and development of new areas but the commercial value of land can give billions of dollars which can be used for debt reduction. If we are able to reduce or eliminate our debt then instead of putting more taxes on people, our country can afford some tax relief for them.
We also need to end non productive politically motivated programs such as Benazir Income Support Program which are making people beggars. For welfare of extremely needy a community driven Zakat system can help the cause with checks and balance from the society, where it is collected from. There is a serious requirement of revising our defense and intelligence budget and for this transparency and accountability are must. We need to see where the money is going and whether it is required in the area or not. This is every taxpayers right to know that the money is spent in the right direction.
We have also invested heavily in defense technology areas including nuclear technology, military vehicles and aeronautical technology. It is right time now to open the opportunities for private sector and share the research with private sector in return of royalty or going for joint ventures with government only contributing with technology base or in rare cases land. This can help us a lot in developing a strong private sector base in automobile, aeronautical, energy and other areas of industry. Not only huge revenue can be generated but job creation without burdening the budget and taxpayers will be possible with this.
Instead of taking flood taxes, value added taxes or useless surcharges on energy which make the economy slow and increase the cost of living and business. Again a community driven Aushur system for agriculture and natural resources areas can help bring those people in contributing classes who only know how to get more out of the economy i.e. feudal-corporatist ruling elite. Also the plot and agriculture land distribution culture is needed to be ended. Currently prime residential and agricultural land is being distributed in influential sections of our society especially related to military and political elite. This culture of giving exclusive control of land based on influence is a sign of slave society discussed in the beginning.
Apart from reducing cost of business to ensure economic growth and progress of business, Rule of Law is must. Not only terrorism and government created energy crisis are making the business difficult but red-tapism, extortion money collected by mafias and political parties, illicit licensing and quotas for political corruption are making it harder for a genuine business to flourish or even start. Independent and strong judiciary, protection of human rights and freedom are must for the progress of any country.
It is wrongly assumed that government has every right or authority to get taxes out of the hard-earned money of its working classes. Government needs to justify the taxes they take and expenditure they make. Its high time for nation to see what their ruling elite is doing and whose interest they are serving. We need to decide whether we live in a free country or a medieval slave society.
Recently, Transparency International published their Corruption Perception Index in which Pakistan was placed at 34th position. Also in UN Humanitarian Development Index, Pakistan is proudly placed at 125 with Zimbabwe at lowest on 169 and small countries like Srilanka and Maldives in better positions of 99 and 107 than World’s 7th Nuclear Power. Many people especially those with some sort of sympathies with our ruling elite criticize the authenticity of these indexes.
One of the main argument presented against the results is lack of understanding by these institutions about the local conditions and environment. This criticism seems to be valid and genuine because if the analysis is based on real conditions then the results might come out worse.
If we look at the problems a common person faces due to corruption, law and order situation, and incompetent governance then the seriousness of the issues become a bit clear. Reality on the ground is that not only corruption is destroying our so-called national institutions and costing us billions but it has buried a common man straight under.
From cartelization to paying forceful unnecessary taxes, there is no justification of calling the present situation even near satisfactory. High inflation and energy crises are a result of government sponsored cartelization and corrupt privatization without merit. If things are done in transparent way and Rule of Law is established then we can expect some improvement in turbulent economy, if it has not crashed yet.We are already moving around 4 percent GDP growth which is very low as compared to countries like India and China in the same region.
If a common man saves enough money through his hard work, even in this time of government sponsored inflation, and decides to build his house then a new series of hurdles and problems start for him. First one is to go through the government doors for transferring the plots, passing the site plan and other unnecessary approvals which not only cost huge amount of fees but a big amount is taken from his through forceful corruption otherwise his file disappears somewhere in hell.
Once he goes through the process then the process of construction comes, if high prices of construction material due to unjustified sales taxes is not enough then extortion money will surely take a lot juice out of him. All the major government parties and their allied mafias are involved in this game. In case of Karachi, areas are distributed and in each area people are bound to pay this money if they want to make their houses or they want to do business. If someone denies then Shersha Kabari Market incident is not that old to remind us what can happen.
Recent target killing also has some touch of this mafia war for taking more and more area under control. Many times where demarkation of areas is not clear people have to pay extortion to multiple parties. The situation has gone worse after floods, especially in Karachi, not only due to chanting demographics but also due to further slowdown in economy and high inflation.
Cost of doing and initiating business is also a major problem. Not only permits, licensing and quotas are a major problem but red-tapism, corruption, security issues and high electricity are things which in any country can break the backbone of business. Load shedding of 12 hours in a commercial hub like Karachi cannot send a positive message for any investor whether local or international.
The situation is not only resulting in the flight of capital but it has created unemployment issues as well which directly impacts the standard of living. We often demand overseas Pakistanis to bring their money in the country but if we honestly analyse the situation then the demand looks a bit unjust.
At the moment our country is facing worst kind of shameless plutocracy in the name of democracy with mafias and government cronies hammering the life out of our people.
The responsibility also lies on the shoulders of people as they are the ones who chant slogans for these leaders and support either corrupt politicians or dictators.
The real issue is not just that how long this situation can go on but the real issue how long our country can sustain it. We need to come out of this situation otherwise time doesn’t wait for anyone and if worse becomes worst and worst becomes unchangeable then collapse of everything becomes inevitable. So the choice is ours and we are already getting late for the right choices to be made. Instead of cursing institutions for bringing out reports reflecting our dismal performance we need to focus on improving the situation and coming out of this mess.
- Also on : http://blogs.aaj.tv/2010/11/shameless-plutocracy-and-turbulent-economy/
Issue of power sharing between center and different units of federation has always been a topic of great importance in Pakistan. In a country, which was founded on the basis of a common ideology of Islam but itself is consisted of a diversified demography, adapting a centralized common system becomes a very tricky question.
The diversity in our society is not only in terms of culture, linguistics, races, life style and living standards but if we look at religion, diversity is their to a large extent despite us being an Islamic State and vast majority is Muslim. Not only religious diversity is there in the form of different religious minorities but within the majority Muslim population presence of different sects with range of conflicting issues have created many problems in terms of legislation and implementation of law.
Distribution of resources and authority to run their affairs has also seen its share of conflicts in our country. The biggest example is the fall of Dhaka when more than half of our population felt that their rights are not been given by the authorities controlling the center. Even after the fall of Dhaka smaller provinces have felt the similar feelings. This issue of provincial autonomy has always played an important part in the electoral politics of the country. Even if we see the current parliament, we can clearly see the strong provincial and ethnic color of our political base.
The history of our country shows that these demographic diversity and provincial autonomy issues are not tackled well by our mainly centralized system. Whether we see feudal-corporatist democratic periods or military dictatorships, the tensions between different communities and regions have increased over the time. This situation indicates us of adapting a different approach of running our affairs related to governance, legislation and economy which will not only cater the problems mentioned above but ensure a sustainable progressive path for our future. This type of system will require the loosening of grip by centralized power structure over our national affairs, in other words we need a decentralized governance, legislative and economic structure.
Decentralization of governance means a state gives majority of authority and control to the lower levels of administration for e.g. provinces and local bodies. In this the decision making process will be in a bottom-up model i.e. decisions are taken at the local and gradually passed on to the center and in most cases passing on to the center is not required. This type of governance model will ensure that governance decisions and structuring of institutions is done according to the needs of local requirements for e.g. policing system of Karachi may not work well in FATA and Dera-Bugti.
If we see in past several steps have been taken like setting up local bodies, establishing alternate policing structure in the form of FC or giving some departments to the provinces. But the main problems was and still is the upper hand of central government and flow of resources from center to the federation constituents. The big size of the government also plays a negative role in implementing decentralization of governance as we see several ministries and departments work where there is no requirement of government at all.
The other thing which we need to do is to decentralize the process of legislation. Even thought we are a dominant Muslim state but still our customs and cultures vary from area to area in our country. Also the presence of different religions, sects and social communities demands for a legislative system flexible and capable enough to cater the needs of regional and social diversity. This can be achieved by keeping the centralized common laws as minimum and delegate the legislative powers to regions and social communities. By giving legislative powers to social communities means law making related to a particular social community should be done by the representatives of those communities. Careful provisioning can be done to ensure basic human rights and conflicts of interest.
Now the issue will come of handling the situation where different people from different social and religious backgrounds are involved in a dispute. This can be done through social contracts between communities like “Meesaq e Madina”, empowering civil courts to resolve disputes based on social customs and some careful central legislation just to resolve disputes between different social communities can be made.
After governance and legislation, we see how we can run our economic affairs more efficiently and transparently. It is again an issue of great discussion in Pakistan whether the state should control the economy and run the institutions like steel mills, PIA itself or not. But if we look our history more than having the issue of it should or should not, the issue is the capability of the state of doing it. We have seen huge corruption scandals involving key government and establishment personalities being highlighted in media and taken up by courts. Most of the time the main reason behind other than greed is having too much discretionary powers. If we see many of these powers are a result of unnecessary state involvement and undesired regulations. All these not only lead to corruption but also result in economic loss as a result of inefficiencies created.
Therefore regulation, in areas other than where it is required to cater corruption and social benefits, should be removed and free market economy is needed to be promoted. The discretionary powers of licensing and quotas needed to be eliminated so that fair play can take place and more economic opportunities are created. Privatization is also a key element of decentralization of economy but it needs to be fair and transparent otherwise it will be counter productive and will result in more economic instability.
The two key steps we need to do to achieve decentralization and reap its benefits are strengthening the judiciary and to reduce the size of state. Strengthening judiciary is necessary in order to ensure smooth running of affairs between different federal constituents and social communities. In absence of a strong, independent and impartial judiciary we cannot expect any smooth running and harmony among different constituents of our country. Luckily through recent lawyers movement we have at least come to the point where a big portion of our society has realized the importance of having a strong and effective judicial system. The other thing which we need and as discussed above is reducing the size of our government. This is necessary to create more economic opportunities and more freedom.
If we look at the 18th amendment, the situation is not that promising. On one hand if they have dissolved the concurrent list, the parliament on the other hand has strengthened an unelected party head who will be in actual the ruling authority whether in center or in provinces. The biggest thing which happened in 18th amendment is weakening the judiciary and making them dependent on parliamentarians by forming judicial commissions and parliamentary review committee. This will not only pave way for corruption and lack of accountability but it will also endanger the rights of people not represented by the elected parliamentarians or not represented by the government as judiciary is supposed to be an institution safe guarding the basic human rights of all people including those who didn’t vote for the government or don’t give votes at all.
If we look at our history main challenge we face towards achieving decentralization is political will not the lack of capacity and resources. Our national politics is mainly dominated by our military establishment and feudal-corporatist political class who are mainly interested in having the tight grip over the country affairs, economic resources and political decision making. This totalitarian approach has given us nothing except for miseries and sense of deprivation and hopelessness for our people.
Even though slogans like provincial autonomy, provincial harmony, devolution of power have played key roles in country politics but not much in true sense has come out. Its high time for us to re-think our strategy as a nation and decide how we should proceed towards our future course in time. Decentralization is not only necessary for efficient and smooth running of our affairs but it will give more freedom, confidence and sense of ownership to our people.
- Faisal ur Rahman
Isn’t this a familiar name “Abdul Hafeez Sheikh”. Musharraf team still rules the country like his destructive policies.
Islamabad- Pakistani Prime minister Yusuf Raza Gillani has shown his optimism with the appointment of Abdul Hafeez Sheikh as his Finance advisor.He said appointment of an experienced economist as advisor will give fresh impetus to the management of Pakistan’s economy.
Mr. Abdul Hafeez Sheikh is well known in banking and financial sector for last 30 years. He was the investment and privatization minister from 2003-2006 and the Sindh finance during the tenure of Shaukat Aziz as PM and Finance Minister. He also served as planning and development minister from 2000-2002 when General (R) Musharraf was the Chief Executive of the country. He is also a former country head of World Bank Saudi Arabia.
The position of Finance advisor in the federal government was vacant since the resignation of Shaukat Tarin.