Nasty jolts to the economy

By Shahid Javed Burki

PAKISTAN�S economy received several nasty jolts in the last several months. Some were delivered by the developments over which the country�s policymakers did not have any control. These included the inexorable increase in the price of oil which has affected all oil-importing countries including Pakistan.

There has also been an increase in the price of agricultural commodities Pakistan must import to meet domestic demand. These include wheat and oil seeds.

There were other jolts to the economy for which policymakers must take full responsibility. These include the shortage in the generation of electric power which has resulted in load-shedding that is taking a heavy toll in terms of both lost output and great discomfort to the citizens. Most affected by this shortage are the less well-to-do segments of society who cannot afford to buy alternate sources of electric supply such as portable generators.

These shortages should have been estimated by the previous administration and appropriate investments should have been made. Instead, for eight years, Pakistan did not make investments in electric power generation while the demand for electricity continued to increase at nearly seven per cent a year. This has left the country with a demand-supply gap estimated by the government at 4,000 megawatts.

Compounding these problems were the decisions taken by Islamabad to spend carelessly in order to help the party in power in the elections of Feb 2008. Public expenditure was allowed to increase way beyond the resources available to the government by way of tax and other revenues. The result was a ballooning of fiscal deficit estimated at 9.5 per cent of GDP by Ishaq Dar who was the minister of finance in the first coalition government to take office after the elections.

A significant part of this deficit was financed by borrowing from the central bank which added to the inflationary pressures already present in the economy. This produced price increases without precedence in Pakistan�s history. Once again it is the poor and the not-so-well-off segments of society that are suffering. Unless help arrives soon, Pakistan may begin to see political and social pressures building up. Considering the weak state of institutional development in the country, it would be hard to contain these strains.

The new set of political leaders, who have come to power, is being advised to adopt adjustment measures to deal with the pressures under which the economy is labouring these days. The prescriptions being offered are the usual ones: contain government expenditures by cutting spending on both current and development parts of the government budget, raise resources by expanding the tax base, provide relief to the poor by giving them cash transfers and by creating jobs for them by starting rural and urban works programmes, take advantage of the fall in the value of the rupee by encouraging exports, and make non-essential imports more costly.

In a report released by the new Lahore-based Institute of Public Policy that I chair, the government was also advised to transfer greater authority to the provinces and to the institutions of local government. This will help with the process of adjustment since it would bring economic governance closer to the people. We also advised the government to make sure that the design of adjustment policies ensured that future growth was not compromised. This was done in the 1999-2002 period when, following the advice of the International Monetary Fund, the then administration applied hard breaks to the economy.

This, as indicated above, is the standard advice given to most governments dealing with difficult economic situations. Pakistan, however, needs to do much more than follow the standard prescription. It needs to adopt an approach and develop a strategy that lessens the grip on the economy of several powerful vested interests. Over time, the Pakistani economic elite has increased its influence on the making of public policy.

The extent to which this has happened is clearly shown by some simple calculations. The latest World Development Indicators published by the World Bank provide estimates for all countries of the share in national income of various segments of the population. In Pakistan, the top 10 per cent of the population claims 26.3 per cent of the total national income while that of the bottom 10 per cent is only four per cent. This is one of the sharpest differences in the developing world: the rich receive 6.8 times the amount of national income that accrues to the poor.

However, a comparison of the shares in national income does not fully reflect the amount of real inequality between different classes of people. The rich have much better access to public services than the poor; the state generally looks after their interests much more than it does for the poor.

What makes these income differences even more problematic is that they are widening as a consequence of the growth model followed by the Musharraf government which favoured the rich. The sectors that flourished under President Musharraf did little for the poor while they provided large amounts of incomes and asset appreciation for the rich. The recent price increases in food commodities have added further insult to the injury inflicted by the pursuit of the growth model.The poor�s real income will decline significantly if food and fuel prices are allowed to eat into their disposable incomes. Not only is the price increase hurting the poor, the latter are also being affected by the various shortages that have appeared in the economy against which the rich can protect themselves but the poor are left to fend for themselves.

In fact, the rich have succeeded in creating large cocoons around themselves, thus isolating themselves from the less fortunate citizenry. They have built gated communities, protected by private security companies; they send their children to expensive private schools that provide education of reasonable standards; they go out over the weekends to shop in the malls of Dubai and go for summer vacations to various watering spots in Europe.While one should not grudge this lifestyle, it cannot be sustained in the midst of great and growing poverty. And it must not be sustained at the expense of the poor. Public policy must address this problem to ensure not only sustained economic growth but also social and political stability.

DAWN - Editorial; June 10, 2008

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And, who invented daylight saving?

By Salman Rashid

JOHNNY Hart's absolutely hilarious comic strip �BC� has the kid ant asking the dad ant who invented daylight saving. Dad ant tells the kid that it was Edison, but not Thomas as is commonly believed. It was his brother Mason, the inventor of the Mason Jar, who did it.

Every day, so dad ant tells the kid, Mason would go to his workshop, blow a jar as they used to blow glass jars in the old days and set it out in the sun to dry before capping it.

Little did old Mason realise that his jars were filling up with daylight and when he capped them, he got a jar full of daylight. Since blowing glass jars was his business, he soon had a whole great bunch of them all duly filled with daylight. Then one day the expected happened: just about sunset, one of the jars, perhaps too overfilled with daylight, blew the top. And, presto! the world had an extra hour of daylight.

Satisfied, kid ant turns around while dad ant nonchalantly spits out his wad of tobacco and says to himself, �This home schooling could turn out to be a lot more fun than I thought.� This, I suspect, is the sentence with a little variation that some bureaucrat in Islamabad, having high-fived his lesser crony, said.

With the variation the bureaucrat�s sentence would be something like, �Could you believe these moronic politicians would fall for this one so soon again? Making them look like fools is going to be a lot more fun than we thought.�

As the late great Peter Ustinov once said that he suspected there was a room in the foreign office where they taught future diplomats to stammer, so too do I suspect there are several rooms in every department in the Islamabad secretariat where sinister characters concoct such imbecile ideas to be inflicted upon us poor masses via our unthinking herds of politicians. It might work for the West with its high literacy to put their clocks forward by an hour every spring and back every autumn, but in a country of just about 10 per cent actually literate people, it does not.

Go back 19 years and you first find this absurd idea almost being inflicted upon us by the first PPP government. It was the winter of 1989-90 when out of the blue came the announcement that Pakistani clocks were being set ahead � yes, ahead � in a few days� time.

The nation immediately went into turmoil. Thank heavens we only had PTV to tell us how our lives were going to be revolutionised by this one hour of jiggery-pokery. Had private channels been then inflicted on us as now, they would have gone into overdrive screaming about how the Zionist-Hindu lobby had launched the final solution for the unmaking of Pakistan.

Good sense prevailed and the idiotic idea was killed before it could actually be put into practice. Years stumbled by and then we had The Man Who Would Refuse To Ever Know His End Is Come. One summer (was it 2002 or the year after?) it was announced that like most of the western world, we too were to put our clocks ahead by one hour.

Those very same bureaucrats, having sold their crazy idea to generalissimo-politico, were once again sniggering up their sleeves. They could hardly believe that the person who thought he was the smartest thing ever to happen to this sorry land was so easy to fool.

Shortly after we began revelling in the extra hour of General daylight, the people of Sibi being particularly enamoured of it especially when temperatures there hit 52 Celsius, I went cycling around rural Punjab. As I waited for my cup of tea at a village teashop, an elderly woman came along to ask the man what time it was. He told her and she looked a little uncertain as she turned to go. Then she stopped and asked if this was the �real� 10 o�clock or Musharraf�s 10 o�clock.

This woman of rural Punjab, like all those of her kind sprinkled across the villages of the entire country, was a real Pakistani: simple, with little or no education, whose daily timetable was guided less by clocks, more by the rising and setting of the sun.

When she needed to milk her buffalo, she did not give a fig about what the clock said. She milked it when the stars above still blazed and the horizon had just a touch of colour. Summer or winter, it was the sun that set the pace for her chores of the day, the same way it did for those millions of other real Pakistanis.

The foolishness was permitted to persist for a full six months because generalissimo did not want to admit he had made a very foolish mistake. Reversion to Pakistan Standard Time was greeted with a great sigh of relief. Speaking of PST, here�s another gem which shows why we should not indulge in this gimmickry that suits only 100 per cent literate nations. Radio Pakistan and PTV announcers would tell you what o�clock it was Pakistan Standard Time. No one told those morons that the time we were going by was not PST but summer time.

If you have kept your eyes open and watched the pattern of life in Pakistan, you will know that it was the introduction of satellite TV that turned our lives around. Until then, ordinary folks would watch the nine o�clock news on PTV and hit the sack. Then came �The Bold and the Beautiful�, and people who could not understand a word of English stayed awake all night watching the same inanity again and again and again. And so it was since the onset of the Nutty Nineties that our lives were no longer guided by the sun.

Now when the government told the traders to do business on Sunday instead of Friday in order to stagger businesses and offices, the traders duly thumbed their noses at the government. They also told it to go to hell about closing at 9 pm. Why, it was their business and they had every right to carry on until whenever they wished, they are now on record as having said. They have every right to go home about midnight and watch Indian soap operas until the muezzin calls them to their first duty of the day. Saving electricity be damned.

Frankly, if you ask me, I say why settle for just one hour of daylight saving. We can have as many Mason Jars of daylight as we want if we set our clocks forward by, say, five or even 10 hours. Maybe even a few years. Why not claim to be living in the year 2199? Imagine the daylight and the electricity we will save by eliminating the intervening years. No half measures, I say, go the whole hog.

The writer is the author of several travel books.

odysseus@beaconet.net

DAWN - Editorial; June 09, 2008

An interesting piece of writing :)

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Mukhtar on drone attacks in tribal areas

United States (US) troops are not violating the sanctity of Pakistani borders as “they use pilotless drones to hit Al-Qaeda hideouts in Pakistani tribal areas, according to Defence Minister Chaudhry Ahmed Mukhtar.

The minister, apparently justifying the unmanned drone attacks, told a press conference on Thursday the US had claimed to have killed senior Al-Qaeda operatives in Damadola. A drone attack on the village on May 14 claimed 12 lives, who, according to locals, were children and women, while security forces in Afghanistan claimed top Al-Qaeda militants were killed in the fourth attack on the village.

Mr Mukhtar said the government lodged protest if the US violated the borders. He said Al Qaeda operatives should not use Pakistani territory for their militancy.

The minister said that Pakistan Muslim League-N Nawaz Sharif and other coalition partners were evaluating the constitutional package. He said President Pervez Musharraf should fulfill his promise of quitting the Presidency as the PML-Q had lost the elections.

He said the government was working to improve conventional deterrence against its enemies and the armed forces were doing well within the restricted funds provided to them.

About an inquiry into the Kargil issue, he said that the interview of Lt-Gen Jamshed Kiayni (retd), broadcast on a television channel, was not good because he had served with President Musharraf and enjoyed benefits under his command.

Mukhtar on drone attacks in tribal areas -DAWN - National; June 06, 2008


:(... great justifications

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PML-N hits out at decision to scrap Kalabagh project

Several legislators belonging to the Pakistan Muslim League-N have expressed concern over Pakistan People’s Party’s decision to abandon the Kalabagh dam project without taking their party into confidence, although it was part of the ruling coalition.

At a parliamentary party meeting held here on Monday, the legislators are also reported to have objected to the PPP decision of appointing Salman Taseer as the Punjab governor.

They'll do similar things in future... guys wake up n leave the coalition... NOW!
...
PML-N president Shahbaz Sharif said the party was sitting with the treasury to protect the PPP from horse-trading and it would support or oppose on merit all government’s decisions, including the federal budget, in parliament.

He directed the MNAs to support the lawyers’ long march on June 10 to press their demand for reinstatement of the deposed judges.

He briefed the party MNAs on salient features of the proposed constitution amendment package prepared by the PPP.

He reiterated that the PML-N wanted the judges to be reinstated in accordance with the Murree Declaration.

APP adds: PML-N spokesman Siddiqul Farooq told a TV channel that the party would endorse all those clauses in the package which reflected the mandate given by the people in the elections.

He said the PML-N was against indemnifying the actions taken on Nov 3, 2007, because the people of the country had given a clear mandate to undo those steps.

Indemnity to the steps would mean maintaining the status quo, while the people wanted a change in the system, he said.

He said it was the responsibility of the leadership of the coalition parties to respect the mandate of the people in letter and in spirit.

Replying to a question, he said the PML-N, despite having reservations about the PCO judges, had agreed to accommodate them in the interest of the coalition. He said the five judges of the Supreme Court who were part of the pre-Nov 3 judiciary and who had taken oath under the Provisional Constitution Order should return to their previous position while the newly-inducted judges should work as ad hoc judges.

He said regularisation of the ad hoc judges could be considered by the judicial commission envisaged in the Charter of Democracy.

The spokesman said there would be no problem in getting the constitutional package approved in parliament if it was in line with the mandate given by the people. A consensus package could be approved by both the houses within a week, he said.

PML-N leaders Chaudhry Nisar Ali Khan, Khwaja Mohammad Asif and Ahsan Iqbal and legal experts Khwaja Haris and Fakhruddin G. Ebrahim are members of the party’s committee led by Raja Zafarul Haq that will study the draft of the package.

PML-N hits out at decision to scrap Kalabagh project -DAWN - Top Stories; June 03, 2008

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Attack or Way of Expressing ???

Danish Prime Minister Anders Fogh Rasmussen vehemently condemned a suicide bombing on his country's embassy in Pakistan on Monday, describing the attack as “cowardly” and unjustifiable.

- DAWN - Latest Stories; June 02, 2008

I wonder if we can put such an attack in the category of freedom of expression??? cannt we say that this was the way of the bomber to express his anger or he did this for his satisfaction may be... why dont we think out of box???

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Article inserted in constitution by Musharraf

The following is the text of Article 270AAA inserted in the Constitution by President Pervez Musharraf last year.

In the Constitution, after Article 270AA, the following new Article shall be added, namely:- “270AAA. Validation and affirmation of laws etc. (1) The proclamation of Emergency of 3rd November, 2007, all President’s Orders, Ordinances, Chief of Army Staff Orders, including the Provisional Constitution order No.1 2007, the Oath of Office (Judges) Order, 2007, the amendments made in the constitution through the Constitution (Amendment) Order, 2007 and all other laws made between the 3rd day of November, 2007 and the date on which the Proclamation of Emergency of the 3rd Day of November, 2007, is revoked (both days inclusive), are accordingly affirmed, adopted and declared to have been validly made by the competent authority and notwithstanding anything contained in the Constitution shall not be called in question in any court or forum on any ground whatsoever.

“(2) All orders made, proceedings taken, appointments made, including secondments and deputations, and acts done by any authority, or by any person, which were made, taken or done, or purported to have been made, taken or done, on or after the 3rd day of November, 2007 in exercise of the powers derived from any Proclamation, Provisional Constitution Order No. 1 of 2007, President’s orders, ordinances, enactments, including amendments in the Constitution, notifications, rules, orders, bye-laws, or in execution of or in compliance with any orders made or sentences passed by any authority in the exercise or purported exercise of powers as aforesaid, shall, notwithstanding anything contained in the Constitution or any judgment of any court, be deemed to be and always to have been validly made, taken or done and shall not be called in question in any court or forum on any ground whatsoever.

“(3) All proclamations, President’s orders, ordinances, Chief of Army Staff Orders, laws, regulations, enactments, including amendments in the Constitution, notifications, rules, orders or bye-laws in force immediately before the date on which the Proclamation of Emergency of the 3rd day of November, 2007 is revoked, shall continue in force until altered, repealed or amended by the competent authority.

“Explanation.- In this clause, “competent authority” means,- (a) in respect of President’s orders, ordinances, Chief of Army Staff Orders and enactments, including amendments in the Constitution, the appropriate Legislature; and (b) in respect of notifications, rules, orders and bye- laws, the authority in which the power to make, alter, repeal or amend the same vests under the law.

“(4) No prosecution or any other legal proceedings, including but not limited to suits, constitutional petitions or complaints, shall, notwithstanding anything contained in the Constitution or any other law for the time being in force, lie in any court, forum or authority against any person or authority on account of or in respect of issuance of the legal instruments referred to in clause (1) and on account of or in respect of any action taken by the Chief of Army Staff, the President or any other in exercise or purported exercise of the powers referred to in clause (2).

“(5) For purpose of clauses (1), (2) and (4) all orders made, proceeding taken, appointments made, including secondments and deputation, acts done or purporting to by made, taken or done by any authority or person shall be deemed to have been made, taken in good faith and for the purpose intended to be served thereby.”

Rise of Pakistan: Article inserted by Musharraf

This article could have been in simpler language if they'd have used the word 'Musharraf' in in place of the bold text in the post. For example the text in clause 4 would look like "... on account of or in respect of any action taken by musharraf in execise or purported..." See, the govt. itself has complicated the text. Such simplifications could have been easier to understand and implement. Those would also have told ppl tht mush is undoubtedly the sole king of a 'sovereign' state. Oh it could even be further simplified by using the following text: "Any thing done by Musharraf in Pakistan since the time he has been living in pakistan has been done validly and notwithstanding anything contained in the Constitution shall not be called in question in any court or forum on any ground whatsoever. Musharraf always does everything in a good faith, whether he does it as a president, or a chief of army staff or in any other role." Be it the 1999 govt. take over or 2007 coup, he did not do anything for himself, it was infact in greater interest of the country. For example removing 60 judges who oppose a single spoiled child is for the greater good of the country. Obviously almost 70% of the judiciary can be wrong but absolute mush cannot be. It is written in the constitution article 270AAA that he does every such thing it in good faith. May Allah bless him and show him the right path. And if he cannot be blessed, then Allah may bless us by removin him from presidency.

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