| 17 June 2004 | Thursday | 28 Rabi-us-Saani 1425 |
Reagan years in perspective
It's time to stand up
Will trade, industry play fair?
The budget for the year 2004-05 announced by the finance minister the other day marks, with a broad sweep, a very welcome shift in the mindset and direction of government policy, away from the standard approach of bringing change through incremental adjustments.
For launching this second generation reforms, anchored in the aggressive push for a sharp reduction in the costs of doing business, the finance minister and the government deserve all praise.
A host of investment friendly measures have been proposed to address the intent to lower the cost of doing business, which should stimulate growth. Tedious though this may seem, it is worth recounting some of the key ones:
a) The reduction in the duties of 469 raw materials critical to the sectors of iron and steel, plastics, chemicals and locally manufactured plant and machinery.
b) The decision to simplify the GST regime of multiple rates by adopting a uniform rate of GST on goods, which will help check evasion and also make the tax structure more convenient to administer.
c) The withdrawal of the additional three per cent GST payable by unregistered enterprises, thereby reducing the cost of inputs for SMEs. However, this also means that after the elimination of this penalty there will no longer be any incentive to register for sales tax. This could adversely impact on the government's revenue collection.
d) The withdrawal of GST on ginned cotton, hides and skins and raw wool will help lower the working capital costs of exporting units, thereby enhancing their competitiveness.
e) The government's determination to reduce the time to process GST refunds, thereby improving the liquidity and cash flows of businesses.
f) The reduction of import duty on new plant and machinery to five per ent and the exemption of such imports from GST and withholding tax.
g) Reduction, albeit not massive, in the electricity tariffs, especially for commercial and industrial establishments.
h) Improvement in customs procedure to facilitate clearance of goods within 24 hours.
i) The elimination of the requirement to deposit 15 per cent of the disputed tax amount at the time of filing of an appeal against an income tax order and the introduction of a provision for alternative dispute resolution mechanisms.
j) The decision to permit the payment of advance tax on estimated liability, as against the existing system based on a tax-to-turnover ratio.
k) The increase in the limit of income liable to tax to Rs. 100,000.
l) The removal of the excise duty on fruit juices and squashes.
m) Exemption from income tax of the written-off mark-up/interest on loans.
n) The reduction in the interest rate on agricultural loans from 15 per cent to nine per cent and the lowering of the electricity tariff on tubewells in Punjab and Sindh.
o) Reduction in import duties, GST and withholding tax on tractors and agricultural implements and equipment of educational institutions and hospitals.
The decision to increase the size of the PSDP by 26 per cent is also laudable as lack of decent physical infrastructure of communication networks, energy, ports and water was beginning to stifle growth.
Some of the other commendable measures are: The requirement for filing a wealth statement to apply now only to those with incomes above Rs. 500,000; and the raising of the investment limit in Bahbood Certificates of widows and retired persons to Rs. two million rupees and the exemption of the incomes from this investment from 10 per cent withholding tax.
However, some weaknesses remain. These and other recommendations for the government's consideration are summarized below: The assumption that the 0.1 per cent CVT on trade (which will operate as a turnover tax on all purchases of shares) will raise in excess of seven billion rupees based on a turnover of Rs. 70 billion per day is highly exaggerated.
The introduction of the tax at this apparently innocuous rate is almost certain to reduce transaction volumes substantially thereby affecting overall revenues from such a measure. It will in the short-term also put great pressure on the stock exchange index.
The above discussion also raises doubts about the ability of the CBR to raise tax revenues of Rs. 580 billion, even if we accept the government's estimates that the net impact of the reliefs announced in the budget will be just Rs. 7.5 billion.
The government is essentially placing its bets on the achievement of such an ambitious target on the economy growing at 6.6 per cent in real terms and on increased revenues from a marked improvement in tax administration.
The government has balked at extending the net of GST on services. It has no strong reason to levy a politically difficult tax on vocal professionals, like lawyers, income from which would go to provincial coffers.
Instead, it has chosen to introduce excise duty in VAT mode (since the provinces will get only 37.5 per cent from such revenues) on advertisements on cable TV networks and services rendered by shipping agents.
The decision to raise the exemption threshold for inclusion in the GST net tenfold to five million rupees will be patently unfair to larger enterprises, affecting their competitiveness. The government should be promoting and ensuring the installation of a uniform tax regime and a level playing field.
The government should consider the following measures, since they will bring relief to a large proportion of the poor. The resources for financing these proposals can partially come from realigning some of the other recommendations, with the bulk coming from the pruning of the bloated Rs. 194 billion allocation for defence.
(i) Raise the life line slab of 50 units for electricity and gas to 100 units, freezing the tariffs applicable to such small consumers and also exempt this consumption from GST. The cost to government of such a relief to poor households will be less than two billion rupees.
(ii) The incentives announced for agriculture will principally benefit the large farmers with the wherewithal and not the small farmers with little staying power. And to improve the growth rates of the sector, already tottering at a low level, of 2.6 per cent, it is the productivity of the small landowners that needs to be raised.
Agriculture, being an exempt sector under the sales tax regime, is beset by rising cost of inputs, partly because of the protection provided to the industrial sector manufacturing tractors and agricultural implements and especially on account of the high 15 per cent GST rate on key inputs like fertilizers and pesticides for which it cannot get a refund.
This is adversely affecting its profitability and competitiveness. There is an immediate need to support this sector, since the benefits of the programme on the lining of canals will only accrue in the medium to long term.
Therefore, the government should have ignored the dictates of the IMF (now that we are bidding them farewell) and withdrawn the GST on pesticides (the decision to eliminate the duty on raw materials for pesticide will be inadequate for reducing costs of production), and, perhaps even, on fertilizers.
(iii) Reduce the cost of atta for the poor by declaring flour mills as zero-rated, allowing them to adjust the GST they pay on their consumption of utilities like electricity, gas and telephone or the scope of the food stamp scheme should be expanded.
e) The ripple effect of the 15 per cent increase in salaries of government employees will severely burden the budgets of provincial and local governments, especially in the absence of a new NFC Award which would have provided them with additional resources.
The district governments in the three smaller provinces would be particularly stretched and would be hard pressed to finance their salary bills, let alone meet their other expenditure obligations. The latter is likely to result in a reduction in expenditures on non-salary inputs in education, health and water supply.
Irrespective of why the new NFC Award could not be finalized, the federal government had indicated to the other stakeholders its inability to give more than 47.4 per cent to the provinces from the divisible pool in view of its other critical and pressing commitments.
It is instructive that its own PSDP includes construction of provincial roads (like those connecting Chaman and Quetta and Quetta and Kila Saifullah), an education programme of Rs. 13 billion, allocations for health of six billion rupees and initiatives like the technical and vocational training authority, all of which are the constitutional obligations of the provincial and local governments, and being performed by them now.
Other than problems likely to be encountered on account of poor coordination between different tiers of government and duplication of effort and expenditures, the programmes are also likely to suffer from poor design and lack of prioritization, - activities that provincial and local governments are much better placed to carry out according to local needs and priorities. It is just that the federal government will simply not let go of functions and resources that rightfully belong to lower tiers of government.
Other than the shortcomings described above the two challenges for the government in the course of the next year will be the containment of inflation and the faithful implementation of the policy pronouncements by designing procedures and mechanisms that are in keeping with the spirit underlying the measures proposed to achieve the envisaged objectives.
The writer is former finance minister of Punjab.
Reagan years in perspective
It is generally considered "bad form" to speak ill of the dead: whatever their flaws and failings, in death everyone should be treated with respect, or at least allowed to rest in peace. Many would say this rule should be applied to the late Ronald Reagan. Now that he has passed away, it would be wrong to criticize his presidency.
But if there is an onus on his critics to remain silent, then the same goes for his supporters. They too should refrain from using his death as an opportunity to engage in blatant propaganda - to tout achievements that were never achieved.
When supporters insist on eulogizing a presidency that so little deserved it, the critics have a duty to speak out. Death is not - and cannot be allowed to be - an excuse to indulge in untruths.
There have been many of those over the past few days. Ronald Reagan has been touted as the best thing to happen to America in a very long time - before or since. Here was a president who knew what he wanted, who had his principles and stuck to them.
One of those principles was implacable hostility to communism and "the evil empire", which eventually led - so we are told - to the collapse of the Soviet Union.
At home, he gave Americans a sense of pride in themselves, and optimism about the future. His supply-side economic policies delivered growth and prosperity. He was the great communicator, the most popular president in history.
Enough of the spiel. Probably only two lines in the above paragraph are true: Ronald Reagan was a great communicator, and he did make some Americans feel good about themselves and optimistic about the future. Everything else, though, is at best distortion and at worst, blatant lies.
Take the end of the cold war - supposedly the biggest "achievement" of the Reagan Presidency. In reality, it had very little to do with Reagan. As some analysts had predicted, Moscow's state-controlled economy simply could not keep up in the arms race with the US.
Reagan just happened to be on watch at the time. Furthermore, if it hadn't been for his insistence on the fantastical SDI, an agreement to cut the superpowers' nuclear arsenals could have been achieved years earlier.
Ronald Reagan's obsession with communism did, however, lead him to back all manner of anti-communist governments and forces - despite the fact that many had very bloodied hands.
Prominent in the list are the Khmer Rouge, Rios Montt of Guatemala, Jonas Savimbe of Angola's Unita and Saddam Hussein. Between them all these groups/leaders hailed by Reagan as "defenders of the free world" were responsible for hundreds of thousands of deaths.
But so long as they proclaimed to be against communism, Reagan had no problem with their other activities. The same blinkered obsession led to the Iran-Contra affair - a totally audacious and outrageous violation of not one, but two, Congressional bans: selling arms to Iran, and supporting the South American contras.
The scale of the violation is staggering: especially given that it stemmed from the Oval Office. By comparison Clinton's pecadilloes and even Nixon's tapes seem positively mild. It is a miracle that Reagan was never impeached for Iran-Contra - a miracle, or testimony to his "teflon presidency".
When the sordid affair finally came out, the geriatric leader claimed he had no knowledge of what his staff were doing. Both the possible conclusions to be drawn from that defence - either Reagan lied, or his staff were out of control - reflect badly on his leadership. As a Congressional report pointedly observed: "if he didn't know, he should have."
(Reagan could not deny knowledge or responsibility for another shocking policy decision: the invasion of Grenada. Portrayed as a heroic mission to rescue stranded American students, it was in fact just a calculated exercise to deflect attention from the killing of 241 Marines in Beirut.)
In the case of Iran-Contra - given Reagan's pathological hatred of the democratically elected Sandanista government in Nicaragua - the first conclusion above was probably correct: he did not tell the truth. But in many other cases, the president really didn't know what was going on, and did leave important decisions to his staff.
The picture that emerged after he left the White House was of a leader quite happy to watch TV, have his daily naps, take time off with his wife, a leader with the most minimal grasp of detail. Given the power that goes with the title of US president, even in hindsight it is terrifying to think that a mind such as his held it for so long.
Reagan's supporters fight back with claims that the president focused on basic concepts and principles rather than details. His simplicity is touted as an attribute.
The supply-side economic theory that he practised is cited as an example: cut taxes, giving the rich more money to invest, leading to economic growth and benefits for all - simple.
George Bush senior, in his pre-Veep days, described that simple, brilliant theory as 'Voodoo economics'. He might have changed his tune later, but the description remained all too apt. Reagan's economic policies benefited only his fat-cat cronies. Ordinary Americans suffered.
Reagan didn't see their suffering. Nor did he see the impact of his cutbacks on social spending, or of his refusal to face up to problems like AIDS. A leader who wore his religion very much on his sleeve, Reagan had little sympathy for the many who didn't fit his white, Christian middle-class America: AIDS victims, homosexuals, blacks, ethnic minorities - for all these groups, talk of "the Reagan-era optimism" is like a cruel joke.
Why does all this matter now? Aside from historical accuracy, what does it matter if his widow (who, for all her faults, deserves immense credit for her unflinching loyalty and service to her husband) and other supporters try to present the Reagan presidency as America's golden era?
Historical accuracy - keeping the record straight - is important. But even more than that, the Reagan years have to be presented as they truly were because they have implications for what is happening in American government today.
Reading through the above (very abbreviated) story of Reagan's two terms, the parallels with the current Bush presidency are striking. The poor-to-nonexistent grasp of detail; the frequent holidays; the pampering to rich campaign backers; the failure to see, let along empathize with, America's under-classes; the simplistic, blinkered foreign policy - all Bush traits that could as easily belong to Reagan.
Many similarities. The difference between Bush junior and Reagan, however, lies in the impact of their vacuousness, ideological narrowness, kowtowing to rich supporters and so on.
Reagan's led to record budget deficits, continued oppression by cruel regimes abroad, widening of the gulf between the haves and have-nots at home, and delayed detente with the USSR. Incredibly serious consequences, but they pale in comparison with the impact of Bush's policies.
In the space of under one term, the 43rd American president has managed to create a new global order. One characterized by unilateral assertion of power, defiance of international law and norms, war, turmoil throughout the Middle East, a growing clash of civilizations, and greatly heightened global terrorism.
Should Bush continue on his current course - something the ongoing eulogization of Ronald Reagan is encouraging - both America and the wider world are heading for disaster.
Reagan, even in death, has to be criticized: doing so might just make the American public wake up to the dangers being unleashed by another incompetent and failed president.
It's time to stand up
The killing of ten military personnel and civilians on June 10 in Karachi was apparently in response to the recent resumption of military operations by Pakistan Army forces a day earlier in Wana.
For all practical purposes, Karachi has become the favourite battle field for religious and ethnic militants, forces of sectarian hatred and Afghan-linked warriors. Rarely has a city changed so dramatically from a reasonably civilized and relaxed South Asian metropolis to hotbed of conflict and chaos.
While the new repercussions of Wana can be discussed separately, the urgency of safeguarding Karachi's interests can be met by neutralizing the forces of militancy and hatred, set loose by an interaction of groups linked to religious militancy and anti-state activities. Sectarian hatred and the anti-American feelings also come into the equation.
The inauguration of the OIC seminar on "enlightened moderation" in Islamabad coincided, to our eternal shame, with the killing spree at the Ali Raza mosque in Karachi.
The way Pakistan's interests have suffered at the hands of its own people is a source of deep concern. Prospects for development, stability, investment and national cohesion have been repeatedly undermined by the continuing terrorist activities.
Overnight, scores of innocent women have been widowed. Large, needy families have lost their bread winners and religious leaders such as Mufti Shamzai, are brutally gunned down.
A bystander offering his blood at a blood-bank loses an eye to a law-enforcing agency's bullet. Enraged youths turn their frenzy on the property of the poor and the state.
The Pushcarts and petrol pumps, scooters and banks are burnt down. Sensitive and patriotic hearts, mourning the killings of innocent people receive fresh jolts at the destruction of the nation's property.
A British headmaster, teaching for years in Multan is killed while sectarian protesters in Gilgit lead to the flight of hundreds of western tourists and diplomats from the Northern areas.
Since the terrorist killings of the namazis at two mosques in Karachi in quick succession in recent days, one experiences a deeply poignant sensation at the sound of the azan from a nearby mosque, with the shocking realisation that millions of Muslims, belonging to a particular sect of Islam, have been put on notice of death if they dare to join a namaz congregation!
A Dawn editorial has rightly pin-pointed the disturbing absence of any visible, strong sense of outrage by concerned citizens at the mayhem being inflicted by terrorists on Pakistan's vital interests.
It has also made the observation that "since the elite live in their own cocoon and are not likely to be in a crowd when a suicide bomber blows himself up, they (the elite) are likely to be less concerned about the fate of their less fortunate brethren."
Although the targets have been diverse, including state institutions and western interests, the main focus of attacks have been the more vulnerable Shia Muslims; a group which has been an integral part of Islam for fifteen hundred years and has given more than its share of blood, toil and tears in the creation, defence and service of Pakistan.
The mainstream political parties must close ranks for confronting the perpetrators of terrorism. Unfortunately, they have shown neither the courage nor the idealism to court the risks and challenges involved in facing up to the monster of benighted obscurantism and terrorism with a sectarian face.
In fact it is the religio-political parties, which have a greater say and influence in circles, which tend to nourish fundamentalist, and militant elements.
While the leaders of these religio-political parties (as also the mainstream political parties) tend to make customary noises of disapproval, there has never been a widespread, sustained campaign by these parties to confront the terrorist monster which stand ready to destroy Pakistan.
Does the Government not have the necessary leverage with their political partners, the religio-political parties, with a view to the use of their influence with militants in the interest of preserving Islamic unity, national cohesion, political stability and socio-economic development? The statement by a few Ulema, after the May mayhem, is an encouraging step in the right direction, but much more needs to be done.
After the May killings, the Human Rights Commission of Pakistan has adopted a strong posture which, however, has to be sustained, if the present situation is to be reversed.
The English language print media has played a constructive role in raising public concern about the serious implications of continuing terrorism. But the vernacular press, with far greater reach, should adopt a more fortnight and unreserved attitude in impressing on the public mind the dangers to the state from hate propaganda and from sectarian and political terrorism.
But it's the government which has obviously the pre-eminent responsibility for safeguarding stability, development and the security of its citizens. In facing up the escalating crisis, the authorities have regrettably not displayed the required sense of urgency.
A dangerous impression is gaining ground that the government considers the people as an expendable item, whose security is not worth the antagonism of the extremist elements including those in the law-enforcing agencies. As for the judicial process, the percentage of those actually convicted of terrorist killings is so low, that they constitute no deterrent.
Where the requirements of relations with the US is concerned, the government is prepared to pay a price as is evident from the repercussions of the Wana campaign. The government is however, not prepared to pay a price in safeguarding the Islamic Umma in Karachi or elsewhere.
With regard to the goal of an enlightened, stable Pakistan, President Musharraf's heart is in the right place, as are his priorities and his sense of direction. Unless his regime musters the genuine motivation and the will to confront these domestic terrorists (apart from the anti-US Al Qaeda), it is the legacy of General Zia and not the aspirations of President Musharraf that will determine the fate of Pakistan.
Will trade, industry play fair?
There are two approaches to combating poverty in a country in which about a third of the people live in abject poverty and the standard of life of the other one-third is not far higher: Either provide direct or instant relief to the poor on large numbers, and for quite a while, with the limited financial resources available or opt for long term measures to stamp out poverty.
A third option of course, is a mix of both the approaches and the composition of each would continue to be arguable. The government on its part has chosen the long term approach to eliminate poverty, along with immediate relief to a certain number of people.
Economists say that it is better to teach a starving man to fish than simply give him a fish. Much of the new budgetary outlay of Rs. 903 billion for 2004-05 could be spent on poverty reduction directly.
But a substantial part of that money is borrowed, internally and externally. And the capacity of the government to borrow more is not infinite, though the external debt has come down marginally as new loans replace the old loans repaid.
And the World Bank and the Asian Development Bank which are to provide about two billion dollars next year, may not furnish those loans if too much of resources are used for direct poverty relief.
The opposition parties stand for more of the resources to be devoted to poverty relief directly. So the trade unions and other low income groups want specific measures to reduce the prices of essential items like atta, edible oil, pulses etc., and denounce the budget as a rich man's budget and an anti-poor budget quoting particularly the fact of low income electricity consumers have been given a 10 paisa relief per unit on electricity while the industrialists got 58 paisa per unit relief.
Hence the poverty reduction measures are being described as "cosmetic" by the critics of the budget, who are great many. In the prevailing socio-economic conditions, talking a long range view of the problem and prospects, we have to see whether the budget fulfils three basic conditions for its success.
1. Will the budget promote large scale investment in industry as well as modernised agriculture? 2. Does it reduce poverty and create employment. 3. Can it help sustained economic growth at a high level with the efforts of the industrialists and farmlords who have been given a variety of concessions.
Admittedly a budget or two alone cannot solve the large socio-economic problems of the country, but only form a part of a larger medium term or five-year plan which the prime minister Mir Zafarullah Jamali is reported to prefer.
Meanwhile the government has come up with a series of relief measures and incentives to promote large scale investment. It has slashed the import duties, particularly on the machinery not made in Pakistan and reduced other taxes.
If the cost of setting up the industry has been reduced in this manner, the cost of running the business has also been cut through reduction of sales tax and other levies. The electricity rate for industry has also been reduced by 58 paisa per unit to make cheap power available to industry, including the existing industries.
In addition, the interest rates are very low and the banks have plenty of money to lend to credible customers. And the ebullient and now rebellious stock exchange and some of the successful mutual funds are also financing the industrial ventures.
That financial availability as it is now is far better than it was five years ago. In addition, the government is seeking foreign investment avidly and much of that is going into the essential oil and gas sectors as well as banking.
Total foreign investment expected this year is one billion dollar, but a quantum jump in this area can come only if the law and order situation improves and Pakistan is not hit by the excess of the violent fall out of the deadly conflict in Afghanistan.
The small and medium scale industries, too, are to be helped in big way. The sales tax reform which reduces the four slabs of taxes 15, 18, 20 and 23 per cent into a single 15 per cent tax should also be helpful to them. This is the sector that can provide the maximum of employment with the minimum of investment and has a very early start-up periods.
The success of the budget and the government depends on the actual performance of the private sector. The government can only offer relief and provide incentives to the private sector and not force the businessmen to invest in preference to seeking to profit by the informal sector.
To what extent will they now use the extremely favourable conditions created and invest more and more? Now their fat is on fire following the acceptable most to their demands by the government in the fiscal, financial and other sectors.
In fact the success of the entire budget depends on trade and industry as a whole. Will they pass on the benefit of the reduced duties and taxes to the consumers, including those of edible oil. Mr Shaukat Aziz says the sales tax reform affects 500 items will the benefit of he reduced prices of these items be available to the consumers soon?
Over the years they have not been passing on the benefits to the people or passing them on very particularly or very late. The same should not happen again, or happen now in the face of vast concessions which trade and industry have got.
They could argue that have raised industrial production in the current year by 13.4 per cent from 6.9 per cent last year and 4.5 per cent the year before. But in view of the economic growth rate of 6.6 per cent set for next year the industrialists have to play a far larger productive role now than earlier.
The government has other good reasons to reduce import duties and other taxes. If Pakistan's own prices do not come down more and more goods will be smuggled in and both the government and the business community stand to lose on that score.
The competition from China and India will have to be kept in mind. The IMF says that production in China will continue to increase and other countries will have to learn to adjust to that instead of merely complaining of China capturing their markets through low prices.
Of course, Pakistan's trade with India is bound to increase. If open and fair competition is not allowed, smuggling will be on the rise and both the governments and open economies stand to lose.
The government is on one side following a low interest policy along with liberal credit and on the other side lowed duties and taxes on the industry. Power rates for industry, too, have also been reduced.
Globalization which Pakistan cannot resist demands that our products become more competitive and that holds good of the agricultural products as well. The government is hence clearly preparing the ground for Pakistan's economy to become more competitive not only in textiles but also in other manufactures.
Total investment in the current year rose to 18.1 per cent from 16.7 per cent last year, and fixed investment has risen to 16.4 per cent of the GDP from 14.8 per cent. The finance minister hopes investment would rise to 20 per cent of the GDP next year in view of the diversity of incentives provided by the budget.
The government on its part has raised the public sector development outlay to Rs. 202 billion from Rs. 160 billion in the current year, which is a real quantum jump for infrastructural development and social sector progress. But the government must make sure what is committed is actually spent and the implementation of the projects is not delayed.
For that purpose quarterly review of the progress achieved is to be done instead of half yearly reviews. The finance minister hopes the enhanced public sector spending would create a million jobs, which is quite possible.
And if the private sector makes the kind of contribution that it should, the employment opportunities could be far more, including those in the agricultural sector. When it comes to poverty reduction there is dispute over the figures as the government and its critics have different paradigms.
The public talks of those living below the universal poverty line of a dollar a day; but the government had come up with the base line of Rs. 748 per year which is far less than half a dollar day. Hence the official figure of those living below the poverty line if far less than 40 per cent of the people.
Secondly the government is talking of an expenditure survey in Pakistan, which has to accommodate the extent of inflation in the country, and not of the quantity of goods and services consumed by the poor.
The fact is the real inflation in Pakistan is far higher than 4 or 5 per cent. Hence the poor are consuming far less and spending far more, beginning with food, as the Sensitive Price index has shown a rise of 10.5 per cent in a year.
In a country whose population is rising by over 2.5 per cent and has touched 151 million, the economic growth has to be accelerated to provide jobs and increase production all round.
Hence, the current year's remarkable growth rate of 6.4 per cent is to be followed by 6.6 per cent next year and will touch 7.5 to 8 per cent within three years. And that can create a good many more jobs in the private sector, beginning with the rural areas. And that high growth rate has to be assisted by a good law and order situation, good governance and elimination of corruption.
For all the tax relief and other incentives announced by the finance minister the loss of revenue would be only Rs 7.5 billion. And that, along with the rise in dearness allowance of 15 per cent and rise in pensions will raise the expenditure by Rs. 22.5 billion.