is so bad the tax revenues fell by 21.1 per cent in February to Rs 27.6 billion from the target of Rs 35 billion. And the situation is not expected to get any brighter unless draconian measures are adopted which can backfire much too soon.

But to make further tax collection easy, urea, too, is to be brought under GST. If GST is imposed on tractors and then on fertilizers the cost of food production would go up. And if to add to that edible oil and vegetable ghee are also brought under the 15 per cent GST the cost of living will go up sharply.

Succumbing to the pressure of the IMF on all these areas means the people will reduce consumption of such heavily taxed goods and services, the demand for them will go down nation-wide, and thereafter production. And industrial output which is already stagnating will then take a heavy hit and revenue collection will fall further. Can we afford all that? The IMF talks of short-term pains for us and then long term gains. What we are seeing is short term gains and long term pains for us as the economy goes for a tail-spin. Look at what the Tea Association of Pakistan is saying. Since the import duty was raised in the current year from 25 per cent to 30 per cent the quantum of smuggled tea has increased from 25,000 tonnes to 30,000 tonnes last year to 35,000 to 40,000 tonnes. As a result while the duty is higher the revenues will be lower. And that is because while the smugglers have to pay little the tea companies have to pay 67 per cent as taxes and duties, they say. Hence the PTA wants the import duty to be reduced from 30 percent to 15 per cent. The government may find this demand ghastly. But higher duties and lower revenues have been a common feature of our fiscal system.

Pakistan’s salvation lies in seeking a far larger economy through higher economic growth and value-added output rather than in taxing a small economy more and more and making it smaller while the population growth goes on at three per cent per year.

But we are now in the clutches of the IMF and accept its conditionalities rod, hook and sinker since the previous rulers breached their commitments to the IMF. While the previous rulers who brought us to this sorry state are doing pretty well, though out of office, more and more hardships are heaped on the masses as if they were responsible for the current mess. After wealth tax has been done away with, they must pay more and more of sales tax which has now become the No. 1 revenue source.

The tendency around the world is to reduce the taxes and duties to refloat the economy and increase employment and production. Along with that the interest rates are being reduced so that more investment can take place and the unemployed absorbed by the industry, old and new.

But in Pakistan consumption is being reduced through the spread of sales tax to new areas. So GST is to yield Rs 185 billion this year against Rs 144 billion through income tax. And that is jump of Rs 30 billion from last year’s GST revenues. But this target too is slipping as prices of imports fall, the economy contracts, particularly the tax paying part and revenue collection falls like the 21 per cent drop in February. In such an environment the government collects less revenues and spends more and more on law and order or on fighting terrorism which is an exasperating exercise in our kind of environment.

If the present tendency persists we will soon have the 15 per cent GST on electricity as well at the domestic consumer end. Gen. Zulfiqar Ali Khan, chairman of WAPDA, is opposed to that as he holds that as it is, electricity in Pakistan is the highest priced in the region. But after gas and telephone have been brought under the 15 per cent GST, electricity cannot be beyond the reach of GST for long.

But before GST on power, KESC’s electricity rate will go up by 10 per cent or more so as to mobilise larger revenues and make it more attractive for the buyers through privatisation which is to start now. And prior to that KESC has to pay Rs 10.6 billion to WAPDA, Sui Southern Gas and PSO. The GST of 15 per cent rise in power rates will be excessive; but that is what the IMF and the World Bank want if KESC cannot check the 40 per cent theft and loss of power within the system.

And now the World Bank wants Pakistan to do away with subsidy on gas for domestic consumers and do away with gas subsidy of Rs 11 billion for the fertiliser factories from July 1.

From the frying pan into the fire?

By Tahir Mirza

FOUR Pakistani members of a ship’s crew have disappeared after they were allowed on shore by a customs and immigration officer in the port of Norfolk in Virginia.

This has happened at a time when Pakistanis and Muslims are under heightened security and scores of Pakistanis remain in detention, with many others deported, and when federal agents have begun a second round of questioning of Muslim immigrants after having interrogated over 2,000 in the first stage of a post-September 11 vigilance drive.

One Pakistani young man in New York state faces the prospect of his green card being revoked because he was found to have signed the rental papers for a family that did not have legal status. Many Pakistanis settled here for years are debating whether they should pack up and return.

There have always, of course, been Pakistanis who have entered the United States illegally and managed to stay on. A baseball team was raised in Pakistan some years back; it came to the US for a tournament, and the entire team vanished. Some of its members later acquired legal status and did yeoman’s service for crickets teams raised by South Asians. Once, members of no less than an army band had deserted their contingent, quietly left their drums and bagpipes, and opted to settle in America.

Those were days when visa violations were often overlooked. All that has changed after 9/11. But that even in such circumstances, there are Pakistanis, like the four crew men, prepared to take the risk of illegally disappearing into the vast landscape of America should be seen as a devastating commentary on conditions at home. Deprived of decent incomes and education opportunities for their families, many Pakistanis still look for a chance to somehow leave their country and settle in the United States or a European country.

They are ready to face the ignominies of an anti-immigrant witch-hunt and the agonies of coping with an alien culture so that they can ensure some kind of a life worth living for their families and themselves. The New York young man whose green card, legitimately earned, may be taken back, worked in a pizza establishment and managed to send $400 home to his parents in Pakistan every month. He doesn’t know what he will do now when he is deported home.

America has changed, and for countless immigrants become a terribly discriminatory society. The policies unleashed by Attorney-General John Ashcroft have appalled American civil rights advocates as much as they have people abroad. Immigrant organizations, while noting America’s security concerns, nevertheless criticize these policies on almost a daily basis. This situation is going to continue for the foreseeable future. But nothing can hide the sorry failure of our own societies to keep our young people at home and of virtually forcing them out into a hostile world.

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IN THE latest crackdown on Islamic organizations, a think tank and a couple of other concerns are being investigated for possible financial links to Al Qaeda. The homes of directors of some of the Islamic charities have been raided with agents brandishing guns.

It is said that the federal government is inquiring into a complex and complicated web of financial dealings between terrorist outfits and religious organizations here. Donations or money transfers are being scrutinized. It is tempting to recall that in the run-up to the presidential elections in 2000, many Muslim groups had backed the Republican Party, and many Muslims have over the years, routinely raised funds for senators and Congressmen. All Muslim donations made to political parties or personalities should also logically be looked into. Perhaps even some of the Islamic organizations now under suspicion may have made political contributions to legislators or other politicians.

Would it be legitimate, in such cases, to discover, post 9/11, a link with terrorism and accuse those who received donations of being accessories? Many Muslim organizations and individuals may have raised money for and made donations to what they genuinely believed to be good causes. Is it right to now treat all of them as part of worldwide network of terrorist financing and support?

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THE dilemma caused for the US by General Pervez Musharraf’s decision to legitimize his presidency for five years through the device of a referendum is underlined by the reply given by the State Department to a taken question”, a question accepted at the daily briefings but answered later on.

The question, taken at the briefing on March 21, asked for a comment on the general’s announcement of a referendum. The reply was:

“There is speculation in the Pakistani press about a referendum of approval for President Musharraf but there has been no announcement of such a step.

“We are pleased by President Musharraf’s reaffirmation earlier this year of his commitment to hold provincial and national elections by October. We welcome this further step toward return of civilian rule and will continue to encourage and support this process.

“Restoration of democratic, civilian rule is critical to Pakistan’s economic and political development.”

Is the further step” referred to in the statement a reference to the referendum or in a general sense to the military regime’s commitment to return Pakistan to civilian, democratic rule?

Other senior administration officials have said they had no comment to make on any specifics of the process involved in restoration of democracy in Pakistan. Actually, America’s options about Pakistan are fairly limited at the moment. At least as long as the campaign in Afghanistan continues, it is unlikely to and perhaps cannot put any pressure on Gen Musharraf with regard to his domestic policies.

The New York Times, meanwhile, has been forthright: it said editorially on Monday that the referendum proposal was unacceptable.

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THE New York-based Committee for the Protection of Journalists (CPJ) released its annual report on attacks against the press at a news conference at the National Press Club on Tuesday and later hosted a reception in association with the Brookings Institution.

The reception drew many US and foreign journalists, who heard the committee’s executive director, Ann Cooper, say that several years of involvement in major areas of press freedom had ben followed by a marked deterioration in 2001. Particularly since Sept 11, she said, some governments had tried to exploit the situation to crackdown on independent media in their countries, and she made special mention of Nepal and Eriteria.

The CPJ annual reports had begun with a 10-page typed document in 1986 and have now assumed the shape of a well doumented and printed 100-page publication.

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AN ESTIMATED 46 million Americans watched the Oscar awards ceremony on Sunday night when the surprise was that, for the first time in the history of the Oscars, both the best actor and best actress awards were won by African Americans, by Denzel Washington and Halle Berry.

But whether this should be seen as marking a shift in attitudes in America’s entertainment industry