Time for political talks

THOSE who thought Nawab Akbar Bugti’s death had solved all problems in Balochistan must have been rudely awakened by what happened in Kohlu on Tuesday. Militants in the Bhombor area attacked a convoy, killing three security force personnel and wounding at least two. The use of rockets in the attack on the security convoy means that the sources of the militants’ supply of weapons are intact and the guerillas are strong enough to attack and escape. The same day, the government announced that 100 tribesmen belonging to various sub-tribes and clans of the Marri group had surrendered. The Anjuman-i-Ittehad Marri, however, rejected the claim and said that the surrender ceremony was a government drama enacted by Hazar Khan Bijarani, a former guerilla leader who the Anjuman claimed had defected. The action in Bhombor is not the only instance of insurgency in the post-Bugti era; bomb blasts, acts of sabotage and attacks on security forces have continued, though no doubt with lesser frequency. It may also be conceded that the Bugti chief’s killing might have led to demoralisation in the rank and file of those behind the insurgency, but there is nothing to suggest that the causes that led to the trouble in Balochistan have disappeared or that the guerilla movement will not be able to recover from the setbacks it has suffered. What matters is the need for removing the cause of the insurgency and tackling the source of the fire.

The events of winter 2004-05 in and around Sui had rocked Pakistan. Tribesmen loyal to the late Nawab Akbar Bugti fired hundreds of rockets on gas installations in one given night, blew up pipelines and attempted to take over gas company headquarters. The reverberations of the attack were felt throughout Pakistan not only because gas supply was cut off to large parts of the country but the level of insurgency looked like an act of war against the state. The insurgency was not confined to the Sui area: attacks on railway tracks and power lines and the killing of foreign engineers from countries friendly to Pakistan continued elsewhere in Balochistan. The government response relied less on politics and more on force to solve a situation that stemmed basically from Balochistan’s economic deprivation.

Occasionally, there were moves by the government to seek a negotiated solution of the trouble. In fact, two parliamentary committees, one headed by Mr Mushahid Hussain and the other by Mr Wasim Sajjad, seemed to make considerable progress in talks with Nawab Akbar Bugti and came up with some useful suggestions aimed at rectifying the injustices the Baloch people had suffered for long. However, nothing was heard about implementing the committees’ recommendations which have remained where they were since before Nawab Bugti’s violent death. The government must adopt the same political approach which it did in clinching a deal with the Maliks of North Waziristan last month. When the military-led government can deal politically with foreign militants and their backers and protectors, there is no reason why it cannot show the same flexibility and realism in dealing with the Baloch problem. In fact, the time is ripe for a political settlement because the government is now in a stronger position to initiate a pacification process along with a comprehensive economic development programme. The government will be surprised by the militants’ positive response if it reaches out to them in a spirit of accommodation and generosity.

Hudood laws in the dock

THE fate of the Women’s Protection Bill continues to hang in the balance. By dillydallying with it, the government has created a dilemma for itself and has lost the goodwill of the moderates while failing to win the support of the MMA. It is now being said that the ruling party will not be able to reintroduce the bill during the coming session of the National Assembly as it had promised, thus proving its own weakness. Meanwhile, something good has happened. The Chief Justice of the Supreme Court, who has won the acclaim of women’s rights bodies for many of his suo motu actions, has entered the scene. In a case involving a 13-year old rape victim, Justice Iftikhar Mohammad Chaudhry has called for the opinion of an amicus curiae (on the Hudood Ordinance) who has categorically stated that in their present form the Hudood laws cannot protect women. Now the Federal Shariat Court will be asked to look into the matter.

One hopes that the judiciary will do what our lawmakers have failed to do: provide justice to women. Apart from a few obscurantist MMA members and some misogynist conservatives from the PML-Q, everyone with a sense of justice has admitted that the Hudood Ordinance of General Zia inflicts gross injustice on women. Yet the government that claims to have the backing of a majority in the National Assembly, has shown itself to be confused and weak-kneed in this matter. The five-member committee that was set up to steer the bill in parliament has proved to be quite ineffective. It was supposed to draw up a strategy for the smooth passage of the bill but this it could not do. It is here that the Chief Justice with his reputation for judicial activism can step in and do what the members of parliament have so far failed to do and win the gratitude of the women of Pakistan. After all, a large section of legal opinion has declared the Hudood laws to be oppressive and highly unjust. If the Federal Shariat Court finds them to be repugnant to the injunctions of Islam, under Article 203-D of the Constitution the president will be required to take steps to amend the law. Until then, wouldn’t it be best to repeal the Hudood laws and restore the legal position on rape as it was before 1979?

Enforcing ban on ‘gutka’

WEDNESDAY’S decision by the Sindh government to ban the production and sale of ‘gutka’ is likely to be met with scepticism. It is not the first time that a decision meant for the benefit of people’s health has been taken but none of the earlier ones have been enforced in the right spirit, including previous attempts at banning gutka. After all, the ban on smoking in public places, to cite just one example, was prescribed for the reason that smoking is injurious to health, yet it is widely flouted. The same is true of the motorcycle helmet law, which was strictly enforced for the first few weeks before the police lost interest. Those involved in the production and sale of gutka too are likely to remain unaffected by the ban for they will find ingenious ways to sidestep the prohibition. This must not be allowed to happen. And for that, the government will have to remain alert and watchful and ensure that its prohibition is strictly followed and enforced. Those found violating the ban — or abetting the violators — should be strictly dealt with. Unless this is done, no one will take the ban seriously.

The point is that the prohibition will prove ineffective if it is not supported by wide public awareness campaigns on the hazards of consuming gutka. People must be made aware of how gutka can cause serious illnesses, including oral cancers. These campaigns must be aggressively pursued at schools, which is where many youngsters first start indulging in bad habits like smoking. Parents too need to play a responsible role in ensuring that their children are not buying gutka and chhaliyan. TV campaigns must be a round-the-year process to ensure that the message is effectively heard.

Gross distortion in taxes

A TOTAL of one 1,384,309 persons filed their income tax returns until the deadline for filing them expired on September 30. And that is a 20 per cent increase over the returns filed last year. The total amount paid along with the returns were Rs11.98 billion against Rs4.5 billion paid last year, an increase of 170 per cent.

When the late filers too submit their returns by October 31, following the extension of the deadline, the number of taxpayers can exceed 1.4 million. In Karachi the number of taxpayers in the medium tax payers unit exceeded 40 per cent over last year. And the number of large taxpayers in Lahore and Karachi has increased by 12 big companies, raising the number of such companies in Karachi to 317 and in Lahore to 152 — a total of 469 companies.

Evidently the earnings in the middle income sector are increasing rapidly in an environment of unbridled high profits and the Central Board of Revenue’s helpful attitude towards the taxpayers. And during the first quarter of the new fiscal year ending September, the tax returns at 187.38 billion jumped by 23.2 per cent over the first quarter’s collection last year and 5.1 per cent above the target. The direct taxes paid — Rs66.3 billion increased by 36.7 per cent over the collection in the first quarter of last year.

All that should help the ratio of tax revenues to the GDP raise far above the dismal 10 per cent against which both the World Bank and the IMF have been protesting. As earnings rise and profits of the companies increase their tax payments are also rising. But the sector which pays the least tax is the farm sector which has a share of 20.2 per cent in the economy, but pays only 1.2 per cent of the total tax revenues.

Compared to that the industrial sector has a 17.3 per cent share of the GDP, but pays 62 per cent of the tax, apart from provincial and local taxes and the service sector has a share of 50 per cent of the GDP, but pays 32.8 per cent of the tax. The efforts of the CBR to persuade the government to levy income tax, though persistent have been in vain.

While the farm sector pays a token income tax, it enjoys generous support prices on a variety of products including wheat, rice, sugarcane and a variety of minor crops. Right now while the Punjab government has fixed Rs 60 for 40kg of sugarcane, the Sindh government has raised that figure to Rs 67.

The farmers also enjoy a large subsidy on fertilisers, now confined to phosphate fertilisers. That will cost the government Rs 6.18 billion for a maximum subsidy of Rs 250-257 per bag. In addition farming loans from banks are increasing and last year exceeded Rs 100 billion at concessional interest rates. All that increases the crop output in a big way and the financial returns from them in a bigger way. And yet loan default by the farmers is a big deal.

Over and above such large economic gains for the farm lords as against the subsistence farmers who benefit too little from such varied concessions from the government, they enjoy a great deal of political power along with representation in the assemblies and the cabinets. Their absolute gains are infinite and in return for all that they pay 1.2 per cent of the total federal income tax.

The industrialists who pay 62 per cent of the income tax complain that there are too many taxes on them and until recently used to say they had to pay a total of 40 provincial, federal and local taxes. The monetary burden of such levies apart, the physical task of paying the tax is exhausting and breeds petty corruption aplenty.

In the service sector which pays 32 per cent of the tax, there are too many loopholes. In fact it is doubtful whether the sector has a 50 per cent share in the GDP which is more common in the developed countries with a very large service sector than in the developing countries like Pakistan with a modest service sector.

In fact the whole question of who pays income tax and how much has become rather academic after the introduction of the hefty sales tax on too many consumer items including soft drinks and people as a whole are made to pay a high rate of sales tax. The total revenues from sales tax now far exceed the revenue from income tax. And now the government has decided that only those persons with a national tax number can buy cars. This could be some check on the tax evasion by the affluent, but there can be corruption in this area too and that has to be checked.

Two of the largest areas of commercial activities in the country today are the real estate and the shares market. Both are exceedingly gainful for the smart and market-savvy operators who are resourceful. The CBR does not get its share of the taxes from either sector. The exemption from capital gains tax makes it forgo the large gains made on the stock exchange. The real estate is supposed to be in the provincial domain for taxation. So the CBR is now only trying to collect the data before pressing the federal government to tax the real estate gains.

So we have at one end the farm sector with its 20.2 per cent share in the economy paying 1.2 per cent of the total tax and two of the currently flourishing sectors with their large profits not paying their share of the taxes. So the tax to the GDP ratio has to be a very low 10 per cent. When it comes to the CBR reforms its efficiency and integrity would be acknowledged by the tax payers only if the refunds are made quick and not unduly delayed which breeds corruption. A beginning has been made by the CBR, but that should be speeded up. But the people believe the CBR would refund their dues quickly, they may be ready to pay taxes even in excess of their dues.

Meanwhile, a major industry is facing serious problems and that is the key textile industry with a 66 per cent share in exports. It is now confronting a 15 per cent shortfall in cotton output. The shortage has to be met through imports, apart from importing a million bales of fine cotton to produce better cloth.

The cotton output this year is expected to be 12.5 million bales against the target of 13.82 million bales. At its peak two years ago, the output was 14.3 million bales and that could not be replicated last year or this year because of excessive unseasonal rains in the cotton belt. Prime Minister Shaukat Aziz now wants cotton output of 20.7 million bales by 2015. That has to be achieved through higher yield per acre and by improving the quality of cotton. Otherwise more cotton could mean less of other crops which we cannot afford.

The prime minister wants the Textile Vision 2005 to be reviewed and revised in the light of the new realities in the post-textile quota world and the fierce competition in the global textile trade. He has asked the National Textile Strategy committee to redraft the Textile Vision by December 31 and has appointed a sub-committee headed by Tariq Saigol to submit its report.

Other countries are helping their textile industry in a big way and they include China, India and Bangladesh with whom Pakistan has to compete. Pakistan has to go all out to help its textile industry facing several problems relating to export.

Another basic industry facing a crisis — in fact a perpetual crisis — is sugar industry. Every year the beginning of the sugarcane crushing season is a highly contentious one with the varied interests setting different dates.

The sugarcane growers want the crushing to start early so that delay does not dry up the cane and the mill owners want it late — after they had exhausted their existing stocks of sugar and the imported sugar in the market. The same is happening this year with the different interests suggesting varied dates and the government preferring October 15. Meanwhile after the Punjab government had announced the price of Rs 60 for 40 kg of sugarcane, the Sindh government announced Rs 67 for the same.

The millowners in Sindh preferred Rs 61. The Sindh cane is supposed to be more juicy and hence deserving a higher price, but the millowners stayed away from the hurriedly convened meeting by the chief minister who took unilateral decision. Meanwhile, the millowners want to delay the crushing so that stocks with them against bank loans were exhausted and the stocks in the market too become far less.

And they have asked for an import duty of 20 per cent on sugar. So that they can sell the sugar at higher prices. The government is not too ready to accept it and sustain high prices in the open market

The system is loaded against the consumer and this Ramazan is no different from the earlier ones despite the prime minister’s efforts to hold down the prices through the utility stores.

The ozone layer

IT was scientists at the British Antarctic Survey, led by Dr Joe Farman, who in 1985 first charted the alarmingly low ozone concentration over Antarctica - better known as the “ozone hole”. It fuelled international concern about ozone depletion caused by chemical compounds such as chlorofluorocarbons (CFCs) — then in widespread use as a spray propellant, coolant or cleaning solution — and the prospect of the Earth’s shield against ultraviolet-B radiation being stripped away.

What happened next is an object lesson in international cooperation. A series of meetings culminated in 1987 in the Montreal protocol on substances that deplete the ozone layer. More than 180 countries signed up to phase out the use of halogenated hydrocarbons such as CFCs.

The fruits of that agreement are seen in new research, published this week, that the dangerously thin layer over Antarctica will heal within 70 years.

— The Guardian, London