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| June 20, 2008 | Friday | Jamadi-us-Sani 15, 1429 |
Autonomy for Balochistan
Dysfunctional schools
OTHER VOICES - Pushto Press
Budget — on a wing and a prayer
The worldly life and the Hereafter
THE PPP government had, admittedly, inherited a difficult situation. Unfortunately, however, it took a casual view of the challenges that lie ahead. The finance minister’s budget speech did not articulate a vision or medium-term strategy to address these, partly because the government has been thrown into the deep end, given the political uncertainty and the timing of election.
BY studying the Holy Quran, one can know the exact purpose of the creation of the universe, man’s role in it, the mysteries of life and death and above all, the life Hereafter.
THE government deserves full credit for submitting to parliament for the first time in 40 years a more detailed expenditure proposal for the next fiscal year than the usual one-liner that went under the head of defence spending previously. And by agreeing to divulge the details willingly, the top leadership of the armed forces has recouped some of the national trust it had lost over the years for being unduly secretive about its annual budgets. No one is suggesting that putting all your defence cards face up on the table is in the national interest. But keeping from your parliament what is public knowledge the world over is neither a healthy democratic practice nor an economically prudent norm. Moreover, the practice raises suspicion about one’s intentions.
However, even the two-page submission for the next year gives only cursory information about what is to be spent on the tail. There is no information here about the teeth. And talking about the tail, who does not know that the pension part of the armed forces’ budget is being consistently passed off as civil expenditure since the mid-1980s? It is also a well-known fact that the one-liners never included foreign military aid, expenditure on missile programmes and procurements using foreign credit. Moreover, the income generated by the armed forces’ diverse business interests, which alone accounts for at least three per cent of GDP estimated by a rule of thumb and is almost equivalent to the entire annual budget for the tail in recent years, was never made part of the defence budget.
The secrecy that shrouded our ‘basement’ bomb was understandable and nobody had any idea about what we had (until we ourselves went public in May 1998) because it was entirely an indigenous effort. But then for conventional arms we are crucially dependent on foreign suppliers and foreign donors and the two are not obliged not to make public our purchases. Just the other day, the Defence and Security Organisation of the UK disclosed that over the last five years Pakistan had purchased arms worth $6bn. From US public announcements we have learnt much about the weapons, fighter aircraft and other defence equipment it has sold to Pakistan under the $1.5bn five-year military assistance programme concluded in 2003. It is these defence deals that need to be debated by parliament to see if what we are purchasing is what we really need and at the right prices. No matter who is paying for these deals at the moment, the final burden of these purchases would have to be borne by the nation and it has all the right to know the details before deals are done.
A PRIME ministerial grant of Rs3bn to Balochistan and an equivalent amount to be paid to the province — apparently as part of delayed gas royalties — are no doubt positive steps towards rectifying past wrongs. But will such measures to boost Baloch confidence in the centre and facilitate development in the province be ad hoc? They must be consistent if the threat of separatism is to be staved off. On Tuesday, prior to the announcement of the grant or the subsequent royalty agreement, deputy Senate chairman Jan Mohammad Jamali highlighted the fragility of the political situation. Demanding provincial autonomy, especially for Balochistan, he said that time was ‘running out fast’ and warned of the state’s disintegration if matters persisted. If such emotions run high among those whose parliamentary office enhances their credentials as supporters of the Pakistani federation, one can only imagine the kind of disillusionment that has set in. The recent resignation of Senator Sanaullah Baloch was another indicator of this growing bitterness over not giving the Baloch greater control over their resources as well as other issues such as the continuing military presence. Time is indeed of the essence in this case. Unless the government acts fast to undo the wrongs of the previous dispensation and to tackle a long list of complaints, the number of rabid nationalist elements demanding outright independence will grow.
Even if it is guilty of a certain amount of foot-dragging, this government, at least outwardly, seems to have its heart in the right place. Apologising for past excesses and releasing high-profile Baloch leaders from jail have been key measures in its attempt to win the trust of the province. In a move to give the provinces greater autonomy, Prime Minister Yousuf Raza Gilani has also promised to do away with the Concurrent List. But these initial actions must be followed up with those that speak of a firmer resolve to eliminate political and economic injustices. For instance, urgent revisions are due when the next National Finance Commission, that distributes resources amongst the provinces, is constituted. While it may suit Punjab with the largest number of people in the country that population is one of the criterion for the division of resources, the smaller provinces do not favour this. Other criteria, such as poverty, underdevelopment and a province’s contribution to revenue-generation, must also be adequately factored in — otherwise the whole package will be deemed inequitable. Before the tone and tenor of Baloch politics turns more strident, the government would do well to start giving the province its due political and economic rights.
EDUCATIONAL institutions: bastions of learning, knowledge and training? They should be, but are they? In Pakistan, some schools, especially in the rural areas, present an entirely different picture. According to a report, in Fata schools have emerged as hotbeds of corruption. Political authorities are said to hand out contracts for the construction of school buildings to the tribal elders to win their support for government plans. It is then left at the discretion of these chiefs to determine the fate of these buildings. Usually buildings are constructed but not all of them are run as schools. Some are used as hujras — male guest houses. Directorate officials claim that the political turmoil, the worsening law and order situation and burgeoning levels of poverty have raised the dropout rate. That may explain why some schools are not functional. But what about the others?
It is disquieting that this trend is part of the larger phenomenon of dysfunctional schools all over the country. Thousands of ghost schools exist in different provinces — they are shown in the records with a teaching staff that draws salaries but no institution functions on the ground. This, along with widespread absenteeism and the ‘visa system’ through which teachers pay a portion of their salaries to high-ups in order to secure their absences, has contributed to impaired functioning. It is a pity that education which is the harbinger of hope for the future is being thwarted so blatantly. Dysfunctional schools put the entire system in disarray. They exacerbate the problem of the dearth of schools as the ones that exist and consume funds do not serve the purpose they were meant for. There is a relentless demand for a rise in the amount of funds that should be allocated to the education sector. But with existing resources being brazenly misused for purposes which have nothing to do with education, is this demand valid? Given the low level of spending on education in Pakistan no one would deny the need to enhance the education budget. But it is important that the focus should be on capacity-building, monitoring and accountability.
Reactions to Karzai’s comments
Tolafghan, Kabul
While talking to the media, the spokesperson of the Afghan president, Hamid Karzai, said that Mr Karzai’s comments regarding the attack on the militants in Pakistan were meant to convey a message to authorities in Islamabad. According to the spokesperson, the president wanted to make it clear to Pakistani authorities that Pakistan, as a sovereign state, was to be held accountable for attacks emanating from its soil on another sovereign state. The spokesperson added that it was not the intent of the president to declare war on Pakistan.
The prime minister of Pakistan, in response to Karzai’s comments, had earlier said that Pakistan wanted to have brotherly relations with Afghanistan and would never want to ignite a scuffle with the neighbour.
Meanwhile, the provincial legislature of Nangarhar, Afghanistan, has supported the latest remarks by President Hamid Karzai...
The Government of Pakistan had dubbed the remarks of the president as an intervention in the internal affairs of Pakistan and has called the Afghan ambassador in Islamabad to register a protest. Nangarhar Shura’s Maulvi Kherkhwa has further said that since the president has expressed his resolve to defend the sovereignty of the Afghan nation, the people of all eastern and south-eastern provinces have been writing to him to express their support….
It should be recalled that a member of the Pakistani parliament from PML-Q has expressed his protest against the remarks of Hamid Karzai, attacking Baitullah Mehsud and Mullah Omar and has said that the remarks are against the sovereignty of Pakistan.
The provincial chief of the ANP, Afrasiab Khattak, has stated in a news conference that the process of regional peace jirgas needs to be revitalised. Khattak added that the international forces had made the Pashtun belt an arena for their geo-strategic interests and that his party was concerned because the blood of Pashtuns was being spilt on both sides of the Durand Line. Afrasiab Khatak also maintained that his party was prepared to play its role in reconciliation between the two neighbouring countries. — (June 18)
— Selected and translated by Khadim Husain
That we find ourselves in this situation is not just because of the unparalleled increases in international prices of commodities like oil and food grains but because government expenditures had run wild. It is important to understand our predicament because of this factor, since the foremost issue is not the level and volume of taxation but what tax payers are being provided from their tax contributions. To illustrate the point take the following examples of what has been happening to expenditures with tax revenues increasing from Rs386bn in 1999-2000 to a trillion rupees in 2007-08.
Defence expenditures have risen from Rs150bn to Rs320bn (including military pensions), this works out to US$34 per capita against US$23 for education and health combined. New F-16s are being purchased and Rs75bn were overspent during the year just ending.
And there is no debate on whether we are getting value for our money.
Similarly, take the case of civil administration. The expenditure has grown from Rs48bn to over Rs140bn. Six aircrafts were bought in recent years for the president, the prime minister and the four chief ministers, with countless bullet-proof and luxury high fuel consuming cars, innumerable lavish foreign trips of VIPs (and nothing has changed with the prime minister, who two weeks ago took an entourage of 84 for Umrah).
Again, the Public Sector Development Programme (PSDP) of Rs550bn supports additional homes for federal ministers although the concurrent list is being abolished. Add to this list the schemes that should be implemented by the provincial or local governments, low priority projects not being dropped, etc. and you get a flavour of the quality of the much celebrated PSDP.
The assumptions on the budget deficit (4.7 per cent of GDP) and inflation (12 per cent) are optimistic. Although the announcement to freeze non-salary expenditure components, the ban on purchase of new cars and the reduction in the budget for the PM’s secretariat (the latter having symbolic importance) deserve praise, we do not see a serious effort to cut expenditures.
And these are our bane — particularly the spending on defence, administration and the general untargeted subsidies on oil, fertilisers and electricity consumption of the more affluent. The target of the budget deficit is ambitious for the following reasons:
a) The current expenditures appear to be significantly underestimated, the best example being provided by the decision to allow interest charges to go up nominally despite the increase by almost 20 per cent in debt, to raise interest rate by two percentage points on the National Savings Schemes and shift borrowing to sources other than the State Bank.
b) The full cost of the 20 per cent salary increase and the enhancement of pensions of retired civil and military personnel have not been fully factored in, with this bill being particularly steep for the provinces.
c) While increased reliance on indirect taxes has been preferred, it is estimated that collections from direct taxes could go up by another Rs100bn with little additional tax effort. But this may not actually happen.
d) The target of 25 per cent growth in tax revenues looks unreasonable even if we factor in the tax mobilisation proposals of Rs66bn.
This is so because industrial production and competitiveness (and thereby economic growth and government tax revenues) are expected to be hit by energy shortages, the increase in interest rates as monetary policy is tightened further, the L/C 35 per cent cash margin requirement and the phasing out of oil and electricity subsidies. In other words, the budget deficit may well be two percentage points of GDP higher.
Sadly, no attempt has been made to begin to tackle the structural and systemic issues that saddle the tax regime. The government has chosen to tax the already taxed sectors (by simply increasing GST to 16 per cent and by enhancing excise duty on cement, telecommunications, financial services) rather than improving the structure, removing the distortions in the incentive systems and expanding the coverage/base to other exempted (agriculture) or lightly taxed sectors like services and trading in listed shares.
This will simply incentivise evasion. Nor has the issue of definitions been resolved, with trading incomes of stock market and real estate brokers continuing to be treated as capital gains and exempted from taxation, without the Capital Value Tax (CVT) on transactions being raised.
Yet another — fourth one — amnesty whitener scheme at two per cent has been announced despite the tried, tested and failed experience of such initiatives.
Duty on all imports has been increased by one per cent and on 300 ‘luxury items’ by 30-35 per cent — ostensibly to narrow the trade deficit by discouraging imports. Although the measure is well-intentioned given our weak administrative mechanisms and systems this is more likely to succeed in encouraging under-invoicing and smuggling.
Also, while passing on the increase in international prices of oil over a shorter period there is a need to consider reducing the GST to five per cent (or to a specific subsidy) to ensure no revenue loss for two years to raise it back to 15 per cent when the economic situation improves.
Moving to the direct poverty addressing measures, the scope of the cash transfer programme (the Benazir card) is disappointing considering that there are around 10 million households below or hovering around the poverty line that need help urgently for the next year or so. Moreover, the use of this card as an instrument of payment will not be transparent. To prevent leakages we need public display of the names of the beneficiaries and public distribution of the grant.
The other worrying aspect for which there are no easy answers, except that perhaps the untargeted subsidies should only be withdrawn (with all the implications for the budget deficit) when the system of cash transfers is fully in place.
Whereas the demand is for immediate relief setting up the system could take as much as six months, and is likely to continue to exclude a sizable chunk of eligible beneficiaries (in Fata, Balochistan, interior Sindh) with no ID cards.
The government has chosen not to spell out its strategy to finance the massive current account deficit projected at US$13bn for next year, especially if the domestic and international environment for privatisation and floatation of Global Depository Receipts (GDR) remains murky. Although there has been a net capital inflow, the bulk of them are sources either volatile or tenuous in nature, raising serious questions about the stability of the external sector.
However, the biggest challenge for the government will be the management of public expectations. This holds especially true with respect to subsidies (particularly of wheat flour from the three million tons of high cost imported wheat and the R&D subsidy for industry). The planned reduction in subsidies will require significant increases in electricity tariffs, oil and wheat flour prices, a politically daunting task.
kardar@systemsltd.com
One of the important fundamental doctrines of Quran is the belief in the life after death (2:4 and 6:92). Man generally prefers the life of this world, although Hereafter is better and more lasting (87:14-19). The worldly life stands no comparison with the life Hereafter as the later is higher in rank and gradation and more in excellence (17:21).
There are numerous verses in the Holy Quran, which eulogise the life Hereafter. In Surah 57:20, the comparison between the worldly life and the life Hereafter has been made beautifully. Its translation reads as follows:
“Know that the life of this world is only play and idle talk and pageantry and boasting among you and rivalry in respect of wealth and children; as the likeness of vegetation after rain whereof the growth is pleasing to the husbandman, but afterwards it drieth up and then seest it turning yellow, then it becometh straw. And in the Hereafter there is grevious punishment (also) forgiveness from Allah and His good pleasure, whereas the life of the world is but a matter of illusion.”
The fruit of Hereafter is, however, only for righteousness (6:32, 12:57, 20:132, etc). A grievous penalty is inflicted upon those who are transgressors and buy the life of this world at the expense of the Hereafter (2:86, 3:77 & 152 etc.). The life Hereafter is preceded by the Dooms Day, Resurrection and Day of Judgment. On the Dooms Day when everything in this world will perish, Allah will raise up those who are in the graves (22:5-7).
Thereafter, the process of accountability will be set in motion which will be quite logical, because justice and wisdom demand it for the sake of just retribution for one’s deeds. According to Quran, the deeds, good or bad, will be embodied in a scroll, which will be quite open in the light of the Day of Judgment (17:13-14). The judgment will be of the highest standard of justice and grace. Not the least merit will go unrewarded though the reward will be for the righteous… (36:54). None will have powers to intercede except the one who has obtained permission or promise from Allah (19:87).
The righteous will be admitted to Paradise while the wrong doers to the Hell. The Holy Quran uses a number of similes and metaphors to describe the eternal bliss of Paradise and the terrible agony of the Hell, but in this earthly life none can form even a remotely precise idea of that bliss or agony. The graphic description of Paradise has been given in various verses of the Holy Quran.
To be exact, those who believe and do deeds of righteousness will be admitted to gardens and rivers flowing beneath their eternal homes with crystal water and fruit trees. They will have companions pure and holy (2:25, 4:57 & 122). On the contrary, the Hell being the abode of unfaithful, wrong doers, sinners etc. will be like an eternal fire. Those who reject Allah’s signs will be cast into the fire. There will be no escape from there (4:56, 14:16-17, 44:43-50 etc). It will be observed from the foregoing verses that there will be a marked contrast between Paradise and Hell.
No doubt the worldly life is ephemeral, but it has a tremendous instrumental value. In fact, it is the key to the life Hereafter. The earth is a testing ground and one’s performance here will be the determining factor of one’s final destiny in the life Hereafter.
To conclude, man has not been created just to live for a few moments and then get completely vanished. His earthly life has a definite purpose to serve. And that goal is the life Hereafter. Man will enjoy eternal bliss in the life Hereafter, only if he strictly follows the Quranic injunctions and the traditions of our Holy Prophet (PBUH).
Besides, one should also seek forgiveness of Allah for his misdeeds. Forgiveness is granted by Allah in His infinite mercy, when the evil deeds are done in ignorance and repentance is offered earnestly. (2:159-160 & 20:81-82). Repentance, however, is of no consequence, if the sins continue to be committed. (4:18&31 and 6:54).
