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                        <title>The Express Tribune</title>
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                        <description>The Express Tribune keeps you up to date with all the latest happenings from Pakistan and across the world!</description>
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			<title>PM reviews five-year roadmap for economic progress</title>
			<link>https://tribune.com.pk/story/2459402/pm-reviews-five-year-roadmap-for-economic-progress</link>
			<comments>https://tribune.com.pk/story/2459402/pm-reviews-five-year-roadmap-for-economic-progress#comments</comments>
			<pubDate>Fri, 15 Mar 24 05:24:43 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2459402</guid>
			<description>
				<![CDATA[Five year roadmap focused on decrease in inflation, poverty alleviation, and provision of employment]]>
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				<![CDATA[&nbsp;

Prime Minister Shehbaz Sharif on Thursday chaired a high-level review meeting on a five-year roadmap for economic progress of the country.

The five-year roadmap focused on decrease in inflation, poverty alleviation, and provision of employment.

The prime minister said consultation should be held on this plan with all stakeholders of different sectors of the economy.

Without wasting any time, implementation of projects for the economic stability and progress of the country should be ensured, he added.

The prime minister said a schedule of implementation for the projects should be presented, adding steps should be taken on priority basis to speed up progress in the sectors of agriculture, livestock, information technology, foreign investment and small and medium industries.

&nbsp;

He said the government would reduce its expenditure and he would not allow further waste of money of poor people.

He said in the next five years, the country&rsquo;s economy would be stabilized to put the country on the path of progress.

The PM said tax revenue would be increased with digitalization and technology, while the per acre yield in the agriculture sector would also be increased with the use of technology. The loss-making government institutions would be privatized on priority basis, he added.

The meeting was informed in detail about the roadmap for economic progress and about proposed measures in important sectors including electricity, agriculture, livestock, exports, small and medium enterprises, taxes, information technology, small and medium enterprises, investment, and privatization.
Federal ministers Ahsan Iqbal, Muhammad Jehanzeb, Ahad Khan Cheema, Dr Musadiq Malik, Minister of State Shiza Fatima Khawaja, Jehanzeb Khan and high-ranking officers attended the meeting. APP]]>
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			<title>Traders call for promotion of industry</title>
			<link>https://tribune.com.pk/story/2459100/traders-call-for-promotion-of-industry</link>
			<comments>https://tribune.com.pk/story/2459100/traders-call-for-promotion-of-industry#comments</comments>
			<pubDate>Mon, 11 Mar 24 20:06:27 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Punjab]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2459100</guid>
			<description>
				<![CDATA[Say business community has been facing tough challenges]]>
			</description>
			<content:encoded>
				<![CDATA[The Federation of Pakistan Chambers of Commerce and Industry&rsquo;s (FPCCI) Businessmen Panel (BMP) has said the business community has been facing tough challenges because of limited business.

In this context, it sought the attention of the government for the formulation of regional, provincial and central level task forces, and formulation of sector-wise regional policies which would help the government address the problems confronted by exporters.

Former FPCCI president and Businessmen Panel (BMP) Chairman Mian Anjum Nisar called for promoting industrialisation and enhancing exports by lowering the cost of production, paying early refunds to solve liquidity crunch and relaxing import policy for industrial raw materials.

He suggested that One Window Operation should be introduced the replace the lengthy procedures that involve the interaction of manufacturers with various agencies. The government agencies were harassing the textile industry every day. Social Security, EOBI and other taxes should be merged and deducted at the source.

Nisar asked the government to appreciate the role of industry for its potential to harvest maximum benefits, providing mass employment to the jobless population of the country. He also sought the government&rsquo;s attention for formulating aggressive marketing plans and hurdle-free policies as well as urgent decisions in favour of exports while taking on board major stakeholders.

He called for concerted efforts to explore new markets both traditional and non-traditional to introduce homemade products. He urged the government to announce favourable policies and allow duty-free import of raw materials and accessories. This move will attract investors and help in setting up new industries in the country which will create wide employment opportunities.

We direly need a stimulus economic plan coupled with a relief package by the government to maximise production. He also emphasised the need for seeking technical know-how from China and other countries for the sake of innovation, and improvement of products.

The BMP chairman said the sustainable solution to Pakistan&rsquo;s problems lies in reforms, as we can see very large inefficiencies in tax collection. So, tax compliance must be improved and the tax base be broadened. This cannot be achieved with a single policy change, but by a systemic approach, he added.

He observed the government preferred direct taxation to meet revenue shortfall as opposed to resorting to increasing indirect taxes because direct taxes tend to be more progressive; therefore, the burden on the lower income strata of the population is lesser.

Published in The Express Tribune, March 12th, 2024.

&nbsp;]]>
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			<title>Private sector takes charge of capital’s decor</title>
			<link>https://tribune.com.pk/story/2458807/private-sector-takes-charge-of-capitals-decor</link>
			<comments>https://tribune.com.pk/story/2458807/private-sector-takes-charge-of-capitals-decor#comments</comments>
			<pubDate>Fri, 08 Mar 24 20:28:42 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Punjab]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2458807</guid>
			<description>
				<![CDATA[Civic body seeks bids from interested firms]]>
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				<![CDATA[The Islamabad administration has decided that the work of decorating and lighting government buildings on the arrival of foreign leaders and VVIP personalities to Pakistan as well as on the occasion of national religious festivals will be awarded permanently to the private sector.

Government buildings from the New Islamabad Airport to the Prime Minister&rsquo;s Secretariat and the VVIP buildings across Islamabad will be decorated and lit on special occasions. The assignment will include installing flags beginning with the celebration of Pakistan Day on March 23.

After this decision and approval, the Metropolitan Municipal Corporation Islamabad asked for formal tender offers from big companies for the decoration of Islamabad on March 23.

According to this decision the decoration and lighting will be required on the occasions of Pakistan Day on March 23, Kashmir Black Day, Independence Day on August 14, Pakistan Defence Day on September 6, Eid Milad-un-Nabi, the arrival of VVIP delegations in Islamabad and the visits of foreign leaders.

The decorations are supposed to be arranged from Islamabad Airport to the Prime Minister&rsquo;s Secretariat, while on national festivals, the entire Islamabad will be decorated with colourful lighting, flags, cultural floats, Panaflex banners and beautification of roads.

The private companies will be paid the decoration rent for three days. All the equipment, lighting and flags will be arranged by private companies while slogans and pictures for the big hoarding boards will be provided by the administration.

The company that wins this contract will require security clearance for all its employees. 

This security clearance will be approved by the Islamabad Police Special Branch. 

The company that will be decorating the capital for March 23 will be awarded the contract on March 19. The administration will provide the company with a complete list of the areas that are to be beautified.

Published in The Express Tribune, March 9th, 2024.

&nbsp;]]>
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			<title>Economy, my first and last priority: Nawaz</title>
			<link>https://tribune.com.pk/story/2440090/economy-my-first-and-last-priority-nawaz</link>
			<comments>https://tribune.com.pk/story/2440090/economy-my-first-and-last-priority-nawaz#comments</comments>
			<pubDate>Mon, 09 Oct 23 04:15:22 +0500</pubDate>
			<dc:creator>
				<![CDATA[AGENCIES]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2440090</guid>
			<description>
				<![CDATA[PML-N supreme leader is scheduled to return to Pakistan on October 21]]>
			</description>
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				<![CDATA[&nbsp;

In what appears to be a softening of his stance, former Prime Minister Nawaz Sharif has declared that his foremost and ultimate priority upon his return to Pakistan is the country&#39;s economic revival.

He stated, &ldquo;The journey of progress will resume from where it was interrupted, and we are committed to ensuring that the nation overcomes economic challenges, inflation, and unemployment.&rdquo;

The PML-N supreme leader, scheduled to return to Pakistan on October 21, expressed these views on Sunday during a meeting with overseas Pakistanis in London.

On September 19, Nawaz had called for holding accountable a former army chief, a former Inter-Services Intelligence (ISI) chief, as well as some former and current Supreme Court judges, for their alleged role in plunging the country into crises during a television interview that sent shockwaves across the nation.

However, the PML-N later backtracked from this position, with several leaders advocating for moving forward.&nbsp; On Sunday, the PML-N supreme leader adopted a more moderate tone, asserting that those who obstructed the country&#39;s progress and well-being would not be forgiven by the people.

Without mentioning any names, he affirmed that accountability would be ensured &ldquo;through the power of the vote.&rdquo; Nawaz also emphasized the crucial role of overseas Pakistanis in revitalizing investment and rejuvenating industries in the country.]]>
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			<title>With 6% growth rate, Pakistan’s economic size jumps to $383 billion</title>
			<link>https://tribune.com.pk/story/2357283/with-6-growth-rate-pakistans-economic-size-jumps-to-383-billion</link>
			<comments>https://tribune.com.pk/story/2357283/with-6-growth-rate-pakistans-economic-size-jumps-to-383-billion#comments</comments>
			<pubDate>Thu, 19 May 22 03:43:53 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2357283</guid>
			<description>
				<![CDATA[Per capita income grows to $1,798]]>
			</description>
			<content:encoded>
				<![CDATA[Fueled by imports and consumption, Pakistan&rsquo;s economic growth rate accelerated to 6% during the last year of Imran Khan&rsquo;s government&nbsp; &ndash; the highest pace in four years &ndash; helping to increase the size of the nation&rsquo;s economy to $383 billion besides jacking up per-capita income.

The provisional Gross Domestic Product (GDP) growth rate for the year 2021-22 is estimated at 5.97%, announced the Planning Ministry after a meeting of the National Accounts Committee. The broad-based growth was witnessed in all the sectors of the economy, it added. The GDP is the monetary value of all goods and services produced in a year.

The nearly 6% growth rate is higher than the official target of 4.8% and far higher than the estimates of the Ministry of Finance, State Bank of Pakistan, International Monetary Fund, World Bank and the Asian Development Bank.

The figure is provisional and subject to variations once the final results are available at the end of the fiscal year. The economic growth rate during the last two years of the PTI rule was slightly better than the PML-N&rsquo;s last two years but both the governments failed to address structural problems of Pakistan&rsquo;s economy.

An attempt had been made to downplay the growth figures in the last year of the PTI government but the authorities dropped the plan after a report appeared in The Express Tribune.

I have asked the Pakistan Bureau of Statistics to certify that the methodology to work out the GDP growth was consistent with the past, said the Planning Ministry secretary in-charge Dawood Barech.
He maintained that the Planning Minister Ahsan Iqbal did not influence the NAC proceedings.

The details showed that the massive surge in imports and consumption greased the economic growth rate, which has already triggered a serious external sector crisis &ndash; an identical pattern witnessed in 2018 when the country fell in the lap of the International Monetary Fund.

READ&nbsp;Experts raise red flag for economy

The 6% growth rate at the end of the Pakistan Tehreek-e-Insaf government was the highest in four years. Last time, the country attained a 6.1% growth rate in 2017-18 &ndash; the last year of the PML-N rule, which had also been driven by consumption and imports and took the country back to the IMF.
During 2017-2018 and 2021-2022, Pakistan&rsquo;s growth was largely financed through foreign savings, which is highly unsustainable.

The agriculture sector is provisionally estimated to grow by 4.4%, nearly 1% better than the previous year. On the back of the Large Scale Manufacturing sector, the industrial sector grew at the rate of 7.2%, lower than the previous fiscal year. The growth in the services sector was slightly better than the previous fiscal year, standing at 6.2%. The mining sector witnessed contraction.

Had the annual imports remained at the projected level of $55 billion in this fiscal year, the overall economic growth rate would have remained around 5%, according to a senior official of the Planning Ministry. The better crop production also supported the higher growth, except for wheat whose output decreased by one million metric tons to 26.4 million metric tons.

The size of the economy reached nearly Rs67 trillion in 2021-22 &ndash; about Rs3 trillion higher than the estimates, which will also help the government to get additional fiscal spending space. In dollars terms, the volume of the economy in 2021-22 stands at $383 billion, according to the Planning Ministry.

Similarly, the per capita income that had been estimated at $1,676 in the last fiscal year increased to $1,798 &ndash;a surge of $122 or 7% per person. In rupee terms, per capita income jumped from Rs268,223 in 2020-21 to Rs314,353 in 2021-22.

The NAC also revised the economic growth rate upward for the second last year of the PTI government from 5.6% to 5.7%. The final growth rate of GDP for the year 2019-20 contracted 0.94%.

Agriculture

The growth of important crops during this year is 7.24% -significantly better than last year. The growth in production of important crops namely cotton, rice, sugarcane and maize are estimated at 17.9%, 10.7%, 9.4% and 19.0% respectively.

The cotton crop increased from 7.1 million bales reported last year to 8.3 million but remained shy of the target of 10.5 million bales. Rice production increased from 8.4 million tons to 9.3 million tons; sugarcane production increased from 81 million tons to 88.7 million tons; maize production increased from 8.4 million tons to 10.6 million tons respectively.

READ&nbsp;Govt signals growth slowdown

Other crops showed growth of 5.4% mainly because of an increase in the production of pulses, vegetables, fodder, oilseeds and fruits. The livestock sector is showing a growth of 3.26%. The growth of forestry is 3.13% and fishing is at 0.35%.
Industrial sector

The overall industrial sector showed an increase of 7.2 &ndash;lower than the previous fiscal year. The mining and quarrying sector has contracted by 4.5% due to a decline in the production of other minerals as well as a decline in exploration costs.

The Large Scale Manufacturing industry is driven primarily by QIM data, which showed an increase of 10.4%. The value-added in the construction industry, mainly driven by construction-related expenditures by industries, has registered a modest growth of 3.1% mainly due to an increase in general government spending. This is despite the fact that former Prime Minister Imran Khan had heavily focused on the construction sector and gave two tax amnesty schemes.

Services

The services sector showed a growth of 6.2, marginally better than the last year. The wholesale and Retail Trade industry grew by 10% -lower than the previous fiscal year. It is dependent on the output of agriculture, manufacturing and imports.

The transportation and Storage industry has increased by 5.4% due to an increase in gross value addition of railways (41.85%), air transport (26.56%), road transport (4.99%) and storage.

Whereas, accommodation and food services activities have increased by 4.1%. Similarly, Information and communication increased by 11.9% due to improvements in telecommunication, computer programming, consultancy and related activities.&nbsp;

The finance and insurance industry showed an overall increase of 4.93% mainly due to an increase in deposits and loans but the rate was slower than the previous fiscal year. Real estate activities grew by 3.7% while public administration and social security (general government) activities posted negative growth of 1.23% due to high deflators.

Education has witnessed a growth of 8.65% due to public sector expenditure. Human health and social work activities also increased by 2.25% due to general government expenditures. The provisional growth in other private services is 3.76%.]]>
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			<title>Market economy, govt regulations</title>
			<link>https://tribune.com.pk/story/2315776/market-economy-govt-regulations</link>
			<comments>https://tribune.com.pk/story/2315776/market-economy-govt-regulations#comments</comments>
			<pubDate>Mon, 16 Aug 21 04:40:01 +0500</pubDate>
			<dc:creator>
				<![CDATA[HUSSAIN H ZAIDI]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2315776</guid>
			<description>
				<![CDATA[Too many regulations will stifle economic activity, will be difficult to enforce]]>
			</description>
			<content:encoded>
				<![CDATA[Are market economy and government regulations mutually compatible? Most of the businesses in Pakistan &ndash; or for that matter in most other developing countries &ndash; are likely to answer this question in the negative. Their reasoning would run like this: in order to bring about an optimal outcome, market forces need to be given a full play.

Government intervention or regulations will increase the cost of doing business and bring inefficiencies to the operation of micro-economy. In case, however, the same businesses were asked whether the government should protect them against foreign competition through, for example, import taxes and subsidies, they would answer the question in the affirmative. Why do businesses by and large resist government intervention in the domestic economy but look to it when they face foreign competition?

The above contradiction in the approach of businesses towards the role of the government is largely due to a widespread misunderstanding of the relationship between a market economy and government regulations. The purpose of regulations is not to give the government control over businesses or slow down their operations but to ensure that resource allocation and outcome through profit-maximising private enterprises is optimal for both the corporate sector and society at large.

Not only that, left completely to itself, the market mechanism will break down in at least nine out of 10 cases because of its inherent contradictions. A market or liberal economy can be, and ought to be, a regulated economy. There&rsquo;s little need for regulations in a planned economy. That&rsquo;s the reason the process of privatisation is accompanied by setting up regulatory institutions. The United States, which is one of the most liberal economies in the world, is also a highly regulated economy.

It was the laxity on the part of the Federal Reserves, the US central bank, in oversight of the banking sector that led to the 2008 global financialturned-economic crisis. Regulations are necessary for several reasons, such as (a) checking anti-competitive practices by enterprises; (b) safeguarding consumers against unfair business practices and promoting consumer welfare; (c) reducing negative externalities; and (d) protecting the rights of employees.

Rent-seeking

As opposed to the state-controlled economy, the market economy is supposed to be highly competitive due to a fairly large number of suppliers in an industry. The competition among the suppliers leads to efficiency in production and lower prices for consumers. However, at times the suppliers may collude to fix output, create shortages and jack up prices, thus racking up higher profits at the expense of consumers.

Such rent-seeking behaviour is from time to time witnessed in Pakistan&rsquo;s sugar industry, where despite sufficient sugarcane production, either cane crushing is delayed or sugar suddenly disappears from the market. The sweetener&rsquo;s shortage bids up its price, often exorbitantly, leaving buyers high and dry. Once the price has escalated, the sugar shortage suddenly disappears. Cartelisation also tends to make the firms less efficient, because the competition-induced incentive to cut costs is removed.

That&rsquo;s one reason the price of Pakistani sugar is much higher than the commodity&rsquo;s international price, making it difficult for the local suppliers to compete in foreign markets. Hefty subsidies are needed to enable Pakistan to export its surplus sugar. The antidote to such anticompetitive behaviour is regulations, which promote competition &ndash; the Competition Act 2010 &ndash; and an independent institution to effectively enforce them &ndash; the Competition Commission of Pakistan (CCP).

The efficacy of the CCP in curbing anti-competitive behaviour is open to debate but it&rsquo;s indisputable that government intervention is essential for safeguarding not only consumers but smaller businesses as well from the predatory practices of big enterprises.

Deceptive marketing 

Consumers need to be saved from deceptive marketing practices as well. Such practices pertain to giving false, misleading or incomplete information to the consumers with regard to any matter, which bears upon their purchase decisions. These include product quality, ingredients, uses, performance, origin, warranty, price and qualifications (in case of service providers, such as doctors).

For instance, the consumers may be kept in the dark until the transaction is over whether the price of a service includes taxes or whether a product, such as cosmetics or drugs, can have unintended injurious effects. In Pakistan, the two major laws prohibiting deceptive marketing are the Competition Act 2010 and the provincial Consumer Protection Acts.

Deceptive marketing is not only harmful to the consumers, it&rsquo;s also detrimental to the national image and the company&rsquo;s growth prospects. For example, the companies which provide substandard products in the domestic market and get away with it will often fail to get a foothold in foreign markets, where product standards are stringently enforced.

Because of unscrupulous behaviour of a few firms, a country may come to be known internationally as a producer of low quality or substandard products and may lose potential markets for its products. While calculating the cost of producing or supplying a product, businesses take into account only the cost that they have to bear.

However, the process of production may also create costs for third parties. Such costs are called negative externalities. Classic examples are air pollution, disposal of industrial waste in rivers and lakes, and over-exploitation or wastage of natural resources, such as water. Negative externalities often result in production levels which are higher than socially desirable. Appropriate government intervention such as fines or legal action against polluters and progressive water pricing is needed to curb negative externalities.

Protecting workers

Finally, it&rsquo;s important to protect not only consumers and third parties against unfair business practices but the workers as well. Such intervention may take the form of stipulating minimum wages, maximum working hours, job security, social security, decent working conditions and compulsory worker training. In the short run, such stipulations would add to the overhead costs but in the long run they will make for a more productive labour force and contribute to making an enterprise competitive.

Regulations have their downside as well. If regulations are too many or too stringent, they will stifle economic activity, will be difficult to enforce and may create rents for the officials responsible for enforcing them. A regulation should pass two essential tests: one, regulations shouldn&rsquo;t be framed for giving the government power over businesses but to achieve a definite policy objective. They shouldn&rsquo;t unnecessarily burden businesses.

There shouldn&rsquo;t be two laws if one law can serve the purpose. Two, regulations should be framed realistically, otherwise businesses either wouldn&rsquo;t be able to show compliance or would find a way of contravening them. For example, minimum wages should be set as per the state of the economy, otherwise businesses will either downsize their workforce or make workers agree to work on less than the minimum prescribed wage.

THE WRITER IS AN ISLAMABAD-BASED COLUMNIST]]>
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			<title>An economic ‘dressing-up’</title>
			<link>https://tribune.com.pk/story/1009357/an-economic-dressing-up</link>
			<comments>https://tribune.com.pk/story/1009357/an-economic-dressing-up#comments</comments>
			<pubDate>Sun, 13 Dec 15 17:47:11 +0500</pubDate>
			<dc:creator>
				<![CDATA[editorial]]>
			</dc:creator>
			<category><![CDATA[Editorial]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=1009357</guid>
			<description>
				<![CDATA[Pakistani governments have the tendency to make most things look good on paper]]>
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				<![CDATA[Not for the first time, the government’s economic managers have applied certain ‘tactics’ to make the country’s economic performance look better than it is. While the government blows the trumpet on increasing foreign exchange reserves, it conveniently ignores the fact that public debt forms a significant portion of the increment. It cites improved macroeconomic indicators, but ignores the help received through tumbling oil prices. Circular debt is parked in a holding company to reduce the budget deficit, but efforts aimed at decreasing that amount through power sector reforms are absent. At least technically, there is nothing wrong with such measures.

But the government’s latest such tactic is to exclude a certain portion of the loans it has taken, from the public debt figure, as it aims to decrease the debt burden on paper. The move will help the authorities in meeting an IMF condition that caps the maximum borrowings the government can make for budget financing. All this would have been easier to swallow if there were assurances that efforts would be made to reduce future borrowings. However, this move is only aimed at enabling subsequent borrowings. This is nothing new. Pakistani governments have the tendency to make most things look good on paper. They, however, ignore that regardless of which head the debt amount is parked under, nothing can change the fact that the country owes that money and will need to pay it back to the lenders. By moving it from one column to another, Pakistan’s fiscal position will not improve in reality. No short-term measure can relieve us of the debt burden. It can only reduce in actual fact if more Pakistanis contributed towards tax revenue than they currently do. By increasing its debt portfolio, Pakistan is sacrificing crucial development spending that could benefit us. The SBP and the finance ministry differ on the amount of public debt the country owes. What can be agreed upon is that it is definitely more than Rs18.14 trillion and needs urgent attention.

Published in The Express Tribune, December 14th,  2015.

Like Opinion &amp; Editorial on Facebook, follow @ETOpEd on Twitter to receive all updates on all our daily pieces.]]>
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			<title>Govt re-introduces austerity policy amid declining revenue</title>
			<link>https://tribune.com.pk/story/954003/income-and-expenditure-govt-re-introduces-austerity-policy-amid-declining-revenue</link>
			<comments>https://tribune.com.pk/story/954003/income-and-expenditure-govt-re-introduces-austerity-policy-amid-declining-revenue#comments</comments>
			<pubDate>Thu, 10 Sep 15 01:45:04 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=954003</guid>
			<description>
				<![CDATA[Bans purchase of new vehicles, but makes room for exceptions]]>
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				<![CDATA[Hit by declining revenue, the government, after a gap of one year, has re-introduced the austerity policy, banning the purchase of all types of vehicles and creation of new posts, according to a notification issued by the Ministry of Finance.


As the gap between income and expenditure grows, amid a steep decline in revenues and increasing expenses on defence and debt payments, the ban has been imposed with effect from July.

However, experts do not see a major shift in expenditure patterns, given the past record of the Ministry of Finance that has violated the austerity policy itself. The government has also excluded major expenditure heads from the policy, which would minimise its impact.



Furthermore, this policy may also create operational difficulties for the federal bureaucracy, as the non-salaried budget has already been significantly reduced in real terms, they added.

According to the notification, there will be a ban on purchase of all types of vehicles from both the current and development budget. However, there will be no ban on purchase of vehicles for operational purposes by law enforcement agencies. These agencies will have to seek a no-objection certificate from the Ministry of Finance.

The government has also imposed a ban on creation of new posts except those required for development projects and approved by the competent authority.

The entitlement of periodicals, magazines to officers will remain restricted to one daily newspaper. There will also be restrictions on serving official lunches and dinners.

Principal Accounting Officers have been asked to ensure rationalisation of utility bills. The ministry has directed them to remain within the limits of approved budgets, adding that re-appropriation of budget will not be allowed.

History of the policy

After assuming power in June 2013, the PML-N government had introduced the austerity policy, hoping that it would save about Rs40 billion in a single year. However, the policy could not yield the required results and the government discontinued it in 2014.

While addressing the post-budget press conference in June last year, Finance Minister Ishaq Dar had stated that there was no more room available for cutting expenses.

The government’s past record suggests that the austerity policy will largely remain on paper. The PML-N government has purchased luxury vehicles for the use of the premier by relaxing the austerity policy.



An audit objection pertaining to Rs3 million in expenses on refreshments by the Ministry of Finance during the austerity policy period is currently under discussion of the Public Accounts Committee (PAC). In its last meeting, the office of Auditor General of Pakistan had recommended settling this audit objection but PAC did not agree.

The government’s decision to reintroduce the austerity policy underlines the growing challenges that it faces in balancing its books. Its tax revenues remained short of the first two months target of Rs365 billion by Rs33 billion, indicating the problems that the government is facing in enhancing revenues despite levying unprecedented level of taxes in past two years.

The Coalition Support Fund, being disbursed by the United States, may also dry up soon, which will also create problems for the government. The Ministry of Finance has budgeted $1.5 billion CSF disbursements for the current fiscal year.  The US has threatened to block $300 million due to its concerns that Pakistan military was not taking action against the Haqqani network.

While revenues are falling short of expectations, expenses on debt servicing and defense are increasing rapidly. The government has been borrowing heavily since June 2013, resulting into increase in cost of servicing despite significant reduction in discount rates.

Published in The Express Tribune, September 10th,  2015.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.]]>
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			<title>Greece, lenders clinch bailout deal after marathon talks</title>
			<link>https://tribune.com.pk/story/936043/greece-lenders-clinch-bailout-deal-after-marathon-talks</link>
			<comments>https://tribune.com.pk/story/936043/greece-lenders-clinch-bailout-deal-after-marathon-talks#comments</comments>
			<pubDate>Tue, 11 Aug 15 07:56:03 +0500</pubDate>
			<dc:creator>
				<![CDATA[reuters]]>
			</dc:creator>
			<category><![CDATA[World]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=936043</guid>
			<description>
				<![CDATA[Finance ministry official says agreement has been reached but some minor details are being discussed]]>
			</description>
			<content:encoded>
				<![CDATA[Greece and its international lenders clinched a multi-billion-euro bailout agreement on Tuesday after marathon talks through the night, officials said, raising hopes aid can be disbursed in time for a major debt repayment falling due in days.

After a 23-hour session that began Monday afternoon, exhausted Greek officials emerged in a central Athens hotel to announce the two sides had agreed details of the deal though a couple of minor issues remained to be ironed out.

Read: Germany gained 100 bn euros from Greece crisis: study

"Finally, we have white smoke," a finance ministry official said. "An agreement has been reached. Some minor details are being discussed right now."

The pact is expected to be worth up to 86 billion euros ($94.75 billion) in fresh loans for debt-ridden Greece, but there was no immediate confirmation of its size.

Greek officials have said they expect the accord to be ratified by parliament on Wednesday or Thursday and then be vetted by euro zone finance ministers on Friday. This would pave the way to aid disbursements by August 20, when a 3.2 billion euro debt payment is due to the European Central Bank.

An agreement would close a painful chapter of aid talks for Greece, which fought against austerity terms demanded by creditors for much of the year before relenting under the threat of being bounced out of the euro zone.

Still, popular misgivings run deep in Germany, the euro zone country that has contributed most to Greece's two bailouts since 2010, about funnelling yet more money to Athens.

During talks which dragged through the night, the sides agreed on final fiscal targets that should govern the bailout effort, aiming for a primary budget surplus — which excludes interest payments —from 2016, a government official said.

Adapted from an earlier baseline scenario, the targets foresee a primary budget deficit of 0.25 per cent of gross domestic product in 2015, a 0.5 per cent surplus from 2016, 1.75 per cent in 2017, and 3.5 per cent in 2018, the official said.

Read: Up two notches: S&amp;P raises Greece’s credit rating

Dealing with a mountain of non-performing loans (NPLs) in the banking sector were among the sticking points in talks. Athens wanted to set up a "bad bank" to take on the problem loans, while creditors want NPLs bundled and sold to distressed debt funds. It was not immediately clear how that was resolved.

Officials had also argued over how to set up a sovereign wealth fund in Greece designed to raise 50 billion euros from privatizations, three-quarters of which would be used to recapitalise banks and to reduce the debt.

Both sides had agreed to deregulate Greece's natural gas market, finance ministry sources said.]]>
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			<title>Deepen reforms and invest in development: World Bank</title>
			<link>https://tribune.com.pk/story/932327/managing-directors-visit-deepen-reforms-and-invest-in-development-says-world-bank</link>
			<comments>https://tribune.com.pk/story/932327/managing-directors-visit-deepen-reforms-and-invest-in-development-says-world-bank#comments</comments>
			<pubDate>Wed, 05 Aug 15 02:26:19 +0500</pubDate>
			<dc:creator>
				<![CDATA[our.correspondent]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=932327</guid>
			<description>
				<![CDATA[Impressed with govt’s success at stabilising economy; wants focus on infrastructure]]>
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				<![CDATA[Pakistan needs to improve governance, prioritise spending and deepen economic reforms, said World Bank Managing Director Sri Mulyani Indrawati on Tuesday, indicating that the country’s largest lender is not fully satisfied with the current pace of reforms and wants a change in priorities.


The managing director also underscored the need to strengthen the capacity of government’s institutions aimed at improving the service delivery in areas of energy, health and education.

While the World Bank highlighted the importance of strengthening capacity of the institutions, the lender has been funding capacity-building programmes for many years, but no concrete results have been achieved so far.

“Sri Mulyani Indrawati underlined the importance of deepening Pakistan’s reforms and investments in priority development areas so that the country could achieve a higher level of economic growth to reduce poverty and increase shared prosperity,” according to a handout issued by the lender’s country office.

The press statement was issued after the conclusion of her three-day visit to Pakistan. She, along with Prime Minister Nawaz Sharif and Finance Minister Ishaq Dar, heard updates on the progress of economic reforms implemented by the government.

The MD’s emphasis on deepening reforms indicated that the Washington-based lender considered the current economic reforms superficial, said an independent expert, well-acquainted with the working of international financial institutions. He also added that no serious reforms had been introduced in the energy sector.

Instead of undertaking administrative and governance reforms in the energy sector, the government’s emphasis has so far been limited to increasing the electricity prices through multiple surcharges.

Due to delay in energy reforms, the World Bank has already withheld approval of $500 million loan for the sector.

The lender has also asked Pakistan to change its priorities and invest in areas where more is required.

“The priorities that we discussed include initiatives to improve people’s everyday lives, such as energy, health, education, and the social safety net, as well as expanding the tax base and strengthening governance and capacity of key institutions to support these services,” stated the handout.

Instead of investing more in the energy sector, the current fiscal year’s federal development spending is heavily focused on transport and communication sector, as almost half of the funding is earmarked for this sector.

The official pointed to the youth bulge as a potential asset for Pakistan’s development, but to benefit from this would require improvements in education and training, including for girls and women.

“Increasing numbers of young people in Pakistan mean job creation is a priority, and this will require improvements in the business and investment climate, privatisation, and tapping the potential of regional integration,” said Indrawati.

In what appears to be a balancing strategy, the World Bank stated that Indrawati was impressed with the government’s success at stabilising the economy under difficult circumstances.

She also appreciated the joint efforts of the federal and provincial governments to expand the Benazir Income Support Programme (BISP) through conditional cash transfers for education outcomes.  She also met with Punjab Chief Minister Shahbaz Sharif and learned about provincial-level reform efforts and development projects under implementation and preparation with World Bank Group support.

Indrawati emphasised on the importance of private sector’s contributions towards the development of Pakistan during her visit.

Currently, as many as 25 schemes are financed by the World Bank with a total net commitment of $4.95 billion. The International Finance Corporation, the World Bank Group’s private sector arm, has a committed portfolio of about $1.2 billion in 47 companies, of which infrastructure energy, ports, and transport sectors account for 53%, general manufacturing and services 15% and financial markets 32%.

Published in The Express Tribune, August 5th, 2015.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.]]>
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			<title>Stagnant exports</title>
			<link>https://tribune.com.pk/story/923297/stagnant-exports</link>
			<comments>https://tribune.com.pk/story/923297/stagnant-exports#comments</comments>
			<pubDate>Mon, 20 Jul 15 20:22:37 +0500</pubDate>
			<dc:creator>
				<![CDATA[editorial]]>
			</dc:creator>
			<category><![CDATA[Business]]></category><category><![CDATA[Editorial]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=923297</guid>
			<description>
				<![CDATA[Now that govt has averted a balance of payments crisis , it can get down to increasing the export base]]>
			</description>
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				<![CDATA[When the Pakistan Bureau of Statistics announced that the country’s exports had touched a four-year low, amounting to $23.9 billion during the recently-concluded fiscal year, not a lot of eyebrows were raised. Like most of its targets — some more ambitious than the others — the government missed this one too, by a margin of $3.1 billion. While regional peers increase their share in global trade, Pakistan’s exports have remained stagnant, a fact that was admitted by the country’s latest economic survey. While the GSP Plus status — that granted Pakistan duty-free access to the European Union (EU) — should have helped the country increase its overall exports, the economic survey admitted that it came “at the cost of other markets”. Pakistan’s share in global trade remained at 0.15 per cent, even though its exports to the EU increased by 21 per cent. One wonders why there is a tendency to boast about the country’s GSP Plus status in official circles if it has only meant that exports to other markets have been marginalised. It is clear that Pakistan does not have the potential to increase its exports to the EU without exporting less to other countries.

Here is where the annoyingly cliched reasons for the low exports come into play. As the rest of the world witnesses a decrease in prices of commodities, Pakistan’s exports of these have witnessed a plunge in value. But the economic survey continues to criticise the country’s export trend by saying that a narrow base, unexplored markets and focus on the EU, the US and the UK — where a slowdown in economic activity has occurred — have led to stagnant growth. The country’s inability to produce value-added goods, the increase in the cost of doing business, the energy crisis and a lack of research and development are core reasons for the stagnant level of exports. Exporters have also been unable to create brands out of their products. Maybe now that the government has averted a balance of payments crisis — with the help of donors and lenders — it can get down to increasing the export base. It needs to focus its attention on exporters and institute measures that incentivises them to invest in brand development, research and explore markets other than the traditional ones. The world is a big place. 

Published in The Express Tribune, July 21st,  2015.

Like Opinion &amp; Editorial on Facebook, follow @ETOpEd on Twitter to receive all updates on all our daily pieces.]]>
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			<title>Pakistan Development forum kicks off</title>
			<link>https://tribune.com.pk/story/77052/donors-disappointed-ahead-of-meeting</link>
			<comments>https://tribune.com.pk/story/77052/donors-disappointed-ahead-of-meeting#comments</comments>
			<pubDate>Sun, 14 Nov 10 10:10:16 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=77052</guid>
			<description>
				<![CDATA[Provincial representatives claim they have overcome differences with regard to the reformed general sales tax.]]>
			</description>
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				<![CDATA[Provincial representatives claim they have overcome differences with regard to  the reformed general sales tax (RGST) today (Sunday). Finance Minister Abdul Hafeez Sheikh added that attention must  be paid to help the poorer segments of society.

This was stated during day one of a two-day meeting of the Pakistan development forum. Delegations from 30 donor countries, consisting of 264  representatives and five major aid lending institutions attended the  meeting.

The United States, United Kingdom, and Japan have promised  minister-level participation. Chief Ministers of all provinces are also expected to present their development  agenda before the donor community.

Updated from print edition below.

Donors disappointed ahead of meeting

Miseries of millions of flood-stricken people may not ease even after a meeting of the Pakistan Development Forum (PDF) because of the government’s seemingly unenthusiastic approach and the donors’ lukewarm response to the United Nations appeal for assistance.

A two-day meeting of the PDF is going to start in Islamabad on Sunday where Pakistan will present its economic reform agenda to hundreds of participants from all over the world.

According to Finance Minister Dr Abdul Hafeez Shaikh, the forum is not a pledging session. For the donors, it is an opportunity to get knowledge of Islamabad’s plan to deal with the aftermath of floods and more importantly the use of their money.

Background interviews with officials of key donor agencies in Islamabad reveal that they are somewhat disappointed with the PDF’s agenda since the donors were expecting that the government would present an outcome-based plan that would highlight sector-specific rehabilitation and reconstruction plans.

“Various aspects of the damage and need assessment report should have been part of the meeting agenda,” said an official of a European country’s embassy. The official said that so far the government has not provided a copy of the assessment report that discusses sector-wise damages and reconstruction requirements.

In late July through mid-August, the floods submerged ten per cent of Pakistan and affected 20 million people. A joint report of the World Bank and Asian Development Bank put damages caused by the floods at $10.07 billion and said that Pakistan needs over $6 billion for reconstruction.

“An overview of the agenda shows that the government is going to talk about what it has already been telling the donors,” said an official of a key lending agency.

According to the agenda, on November 14 the four provincial governments will give presentations but the topics have not been mentioned. Only the presentation by the National Disaster Management Authority chairman on relief, early recovery and disaster reduction may shed some light on the floods.

National Database and Registration Authority Chairman Ali Arshad Hakeem will give a presentation on Watan Cards to address donor concerns about the misuse of their money.

The second day of the conference will focus on fiscal expenditure management, monetary policy, inflation, the economic growth model, power sector reforms and a few words on aid effectiveness by Hina Rabbani Khar, the Minister of State for Finance and Economic Affairs.

On the other hand, the response of donors to the disaster and rehabilitation has also not been encouraging at all. The United Nations had appealed for $2 billion for early relief and rescue, but official documents show that so far the international community has pledged $1.8 billion, of which 74 per cent has not been honoured.

Donors are defending themselves by saying that they suspect misuse of their taxpayers’ money due to corruption in Pakistan.

Out of the total pledges, $739.4 million or around 40 per cent are in cash but disbursement has been only $287.5 million, which is just 15.4 per cent of the pledges. The donors also committed $631.2 million worth of goods but released items worth only $202 million.

Despite a considerable lapse of time, the status of $490 million worth of pledges is not clear as to whether these pledges are in the form of goods or cash, said the documents. The finance minister has said that some of these countries do not want to help Pakistan and are using corruption as a pretext.

Published in The Express Tribune, November 14th, 2010.]]>
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			<title>Fighting the sugar mafia</title>
			<link>https://tribune.com.pk/story/76950/fighting-the-sugar-mafia</link>
			<comments>https://tribune.com.pk/story/76950/fighting-the-sugar-mafia#comments</comments>
			<pubDate>Sat, 13 Nov 10 18:55:22 +0500</pubDate>
			<dc:creator>
				<![CDATA[javed.chaudhry]]>
			</dc:creator>
			<category><![CDATA[Opinion]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=76950</guid>
			<description>
				<![CDATA[If the government were a little wiser, it would use the sugar crisis to increase its goodwill and establish its writ.]]>
			</description>
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				<![CDATA[Every event that happens in our lives has various aspects to it. One aspect of the invasion of Muhammad Bin Qasim at Deebal (near present-day Bhambore) is that Hajjaz bin Yusuf had sent an army, under Qasim’s command, to help and free Muslim pilgrims captured in territory under Raja Dahir’s control. But there is another important aspect to all of this as well. Muslims were a rising power in those days and were trying to spread their influence to Asia, Africa and even Europe. However, in this they couldn’t afford to let even a small ruler like Raja Dahir plunder Muslim ships and enslave Muslim women and children because that would put the writ of the whole Muslim state at peril.

States rarely get the chance to fight big adversaries like Alexander the Great but small rulers like Raja Dahir provide them an easy opportunity to establish their writ. With this in mind, one should look at present day Pakistan and, in particular, the unfolding sugar crisis.

Some years ago, a situation arose whereby it became known that some federal ministers, including then federal minister for industries and production, had hoarded large amounts of sugar. As a result, the price of sugar began to rise. Eventually, the Supreme Court stepped in and ordered the government to ensure the supply of sugar at Rs40 per kilo. But the crisis didn’t end.

Meanwhile, the then finance minister said something to the effect that the sugar thieves were sitting in the cabinet and had earned Rs25 billion as a result of this manipulated crisis. One may blame Shaukat Tareen for many things but his honesty and courage cannot be questioned.

The sugar mafia forms part of our parliament since most of the 82 sugar mills in the country are owned by politicians. Therefore, the government was unable to control the sugar crisis. This, in turn, encouraged small thieves, hoarders and profiteers. The result is that sugar is now being sold at Rs130 per kilo.

If the government were a little wiser, it would use the sugar crisis to increase its goodwill and establish its writ. It could initiate a crackdown against all criminals involved, publish the names of powerful sugar mills owners (and this includes several ministers and senior politicians) and arrest the hoarders. It should also have promptly arranged for the import of sugar, so that increased supply would have led to a fall in prices — but it failed to do any of this.

People are now saying that a government that cannot do small things like provide sugar to its people is unlikely to solve big problems. Our government is preparing itself to fight the Alexanders of the world but doesn’t want to fight the Raja Dahirs that make up the sugar mafia. Why?

Published in The Express Tribune, November 14th, 2010.]]>
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			<title>Zardari seeks major economic deals with China</title>
			<link>https://tribune.com.pk/story/76734/zardari-seeks-major-economic-deals-with-china</link>
			<comments>https://tribune.com.pk/story/76734/zardari-seeks-major-economic-deals-with-china#comments</comments>
			<pubDate>Sat, 13 Nov 10 05:51:48 +0500</pubDate>
			<dc:creator>
				<![CDATA[]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=76734</guid>
			<description>
				<![CDATA[President discusses ways to increase regional trade with Chinese Premier.]]>
			</description>
			<content:encoded>
				<![CDATA[Chinese Premier Wen Jiabao and Pakistan’s President Asif Ali Zardari held a bilateral meeting on issues of common interest, on the sidelines of the 16th Asian Games being held in the Chinese city of Guangzhou.

The Chinese premier reiterated his intention to visit Pakistan next month to “deepen strategic cooperation” and develop a formal and structured dialogue at the ministerial level.

President Zardari called for a currency swap agreement to enable both countries to take full advantage of the Free Trade Agreement, which would allow bilateral trade to reach $15 billion. He also stressed the need for enhancing connectivity by working together on developing pipelines, rail links and fibre optic links.

Zardari urged China to invest in water and energy projects in Gilgit-Baltistan (G-B) and in the Thar coal project in Sindh, while suggesting the institutionalisation of co-operation in the energy sector by setting up China-Pakistan Energy Corporation. The president said that the 14th session of Joint Economic Commission, to be held early next month in Islamabad, will be a great opportunity to review the range of bilateral relations for closer economic cooperation.

The President reiterated Pakistan’s full support to China on a host of issues, including Tibet, Taiwan and Xinjiang. Zardari described Pakistan-China strategic cooperation as vital for defending common interests and for countering forces of destabilisation. “China’s support for Pakistan’s stability and social development in these challenging times is a source of strength for us,” he said.

Speaking of Afghanistan, the President said “We welcome trans-regional economic co-operation between China, Pakistan and Afghanistan. Chinese companies can use Pakistan as a logistical and transportation base for their investment in Afghanistan.”

Talking to the Chairman of the Guangdon Automobile industry, the President offered the Chinese automobile giant incentives to invest in Pakistan. The President asked the Chairman of Board of Investment Saleem Mandviwalla to stay behind in China for further discussions on the prospects of Chinese investment in the auto sector in Pakistan.

Spokesperson Farhatulluh Babar said that the second installment of commodity aid to G-B from China will begin next week. The consignment will consist of diesel, coal and food supplies, he added.  China has donated $250 million for flood relief and reconstruction, besides providing assistance to the stranded people in the upper Hunza Attabad Lake region.

Welcoming President Zardari, the Chinese Premier said: “Every visit of the President has further deepened the Pak-China cooperation”.

President Zardari also held a bilateral meeting with the Thai prime minister.

Bilawal Bhutto-Zardari, Minister of State for Foreign Affairs Malik Amad Khan, Ambassador Masood Khan, Chief Minister G-B Syed Mehdi Shah, Chairman Board of Investment Saleem Mandviwalla and spokesperson Farhatullah Babar also attended the meetings.

Published in The Express Triubne, November 13th, 2010.]]>
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			<title>Old wine, new bottle</title>
			<link>https://tribune.com.pk/story/76729/old-wine-new-bottle</link>
			<comments>https://tribune.com.pk/story/76729/old-wine-new-bottle#comments</comments>
			<pubDate>Sat, 13 Nov 10 05:30:40 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=76729</guid>
			<description>
				<![CDATA[The new bill carries only cosmetic changes from the withdrawn VAT bill.]]>
			</description>
			<content:encoded>
				<![CDATA[The Reformed General Sales Tax bill, tabled in parliament on Friday amidst opposition from PPP allies and opponents alike, carries only cosmetic differences from the Value Added Tax bill which was withdrawn after being introduced earlier this year because of resistance from political parties and vested interests.

In what appears to be a clever move, the government has tried to pass off the original VAT bill as RGST by adding nine more clauses and a dozen sub-sections to the older rejected version – primarily in an attempt to simplify its procedures and clear the ambiguities, according to the bill’s authors.

Moreover, the government has vowed to get it passed and implemented from January 1 under intense pressure from the International Monetary Fund.

The draft of the original VAT bill had been passed by the Senate’s and the National Assembly’s Standing Committees on Finance. But it was not approved by parliament after the business community threatened countrywide strikes.

The government’s failure to implement VAT from July 1 resulted in the IMF withholding $1.8 billion of the second loan tranche.

The key to the next possible IMF programme has also been taken away as the government cannot get it until the first one matures. And the first one will not be completed until the RGST and power sector reforms are implemented.

This next IMF programme is a must to pay back IMF loans, according to independent economists. The government has already started negotiations for the second programme, as admitted by Principal Economic Adviser, Saqib Sherani in September.

A compulsory documentation and withdrawal of exemptions on domestic sales of fertiliser, tractors, textiles, leather, sports goods, surgical instruments and carpets have become the bone of contention between the government and the business community.

The integrated Reformed GST also envisages taxing services in the federal capital territory and in provinces, subject to the provincial governments’ approval. However, just as it was in the past, the provinces are still not fully on board despite having made some progress on the issue.

The circumstances of the current RGST bill are worse than those in June 2010 when the government decided to withdraw the VAT and introduce the Reformed General Sales Tax bill.

The government’s main political allies, the MQM and the JUI, have publicly opposed the bill in contrast to the situation in June when the Senate Standing Committee on Finance, led by MQM Senator Ahmad Ali, had cleared the bill.

“This time the MQM will not budge from its stance, come what may, because the government has hit the poor man below the belt,” said Senator Ahmad Ali. He said that the Senate panel had earlier recommended that the government reduce the VAT rate to 12 per cent from the originally proposed 15 per cent and defer it for one year. But he says that now the MQM would not compromise even if the government reduced the rate ‘because times have changed’.

Some political pundits say that the government has been wasting time and that it is non-serious about the GST implementation. While others termed the move to defer the implementation to June as a political one.

“The government played it well in June when it bought time from the IMF as it had to choose between passing the federal budget or indulging in controversial debate on VAT. So it decided to do the most important job first,” said PML Senator Haroon Akhtar Khan, who is also a member of the Standing Committee on Finance.

However, being a businessman first and foremost he is wary of the extraordinary powers that the bill proposes to give to the Federal Board of Revenue to ensure the recovery of tax arrears. “The FBR is becoming draconian, as these powers will be detrimental and hurt the businesses,” said Haroon.

According to the bill, an FBR official can seize business premises, stop clearance of imported or manufactured goods, attach bank accounts and sell moveable or immovable property belonging to defaulters. On top of that the bill proposes imprisonment of up to three years for defaulters.

“The new Finance Minister, confused Finance Ministry, public pressure and hostile media compelled the government to withdraw the VAT in June,” said PPP Central Information Secretary, Fauzia Wahab and Chairperson of National Assembly Standing Committee on Finance.

She said that the government was serious about implementing the Reformed GST, as the country could not run well within the available fiscal space, a fact well understood by both the MQM and the PML-N. Fauzia admitted that nothing significant had changed in the GST bill except the name.

Published in The Express Tribune, November 13th, 2010.]]>
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			<title>Heckles greet controversial bills in NA</title>
			<link>https://tribune.com.pk/story/76330/govt-tables-opposition-rejects-rgst-bill</link>
			<comments>https://tribune.com.pk/story/76330/govt-tables-opposition-rejects-rgst-bill#comments</comments>
			<pubDate>Sat, 13 Nov 10 04:40:16 +0500</pubDate>
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				<![CDATA[express]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=76330</guid>
			<description>
				<![CDATA[MQM calls RGST, flood surchage bill last nail in economy's coffin; PML-N calls it a recipe for complete disaster.]]>
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				<![CDATA[The government on Friday presented to the parliament two separate bills aimed at reforming an ‘outdated’ taxation system and levying one-time surcharge to rebuild flood-hit areas amid renewed threats by its allies and opponents to fail the move.

There were clear doubts about the passage of both the Reformed-General Sales Tax (R-GST) and flood surcharge bills as another government ally refused to support them immediately after their presentation to the National Assembly and the Senate.

Following Muttahida Qaumi Movement (MQM), it was Jamiat Ulema-e-Islam (JUI) of Maulana Fazlur Rehman that announced not to vote in favour of the legislation the government was under pressure to carry out to meet a demand of international donors.

“It is like killing people. We cannot support this bill,” JUI-F’s Maulana Ghafoor Haideri said in the Senate in the latest blow to the government’s efforts to seek the approval of the bills.

With this, the Awami National party (ANP) and lawmakers from the tribal areas were the only remaining supporters of these legislations but their votes would not be enough to give the administration a numerical majority in both the houses.

Members from opposition parties – N and Q factions of the Pakistan Muslim League (PML) – and MQM were instantly on their toes to chant slogans and thump desks as soon as Finance Minister Dr Abdul Hafeez Sheikh introduced the bill to the National Assembly.

“No, no” and “anti-people GST unacceptable” were the slogans they chanted to send the house in a chaos in the presence of Prime Minister Yousaf Raza Gilani who later manoeuvred to calm down the hyped tempers but even his words remained ineffective.

Gilani thought it was unfair that all the parties and provinces which had earlier agreed on the R-GST in a high-powered Council of Common Interests (CCI) were now turning against it.

“I summoned all the four provincial ministers and all of them unanimously approved,” he said.

Only the Sindh government, the premier added, had reservations on the bill but those were addressed in a long round of negotiations between the central and provincial authorities over a span of six months.

The premier warned that the government might not have enough resources to undertake  a daunting task of rehabilitation of flood affected areas if the bill was not taken through the parliament immediately.

Earlier, central leader of the MQM and Federal Minister for Overseas Pakistanis Dr Muhammad Farooq Sattar said, “This bill will amount to striking the last nail in the coffin of Pakistan’s economy.”

Opposition leader in the National Assembly Chaudhry Nisar Ali Khan also said his party and the rest of opposition groups would never let the government take the bill through the parliament at any cost.

Later a statement by Nisar’s Pakistan Muslim League-Nawaz (PML-N) said: “Our party, in unison with other political groups, will not allow this tax to be enforced because the R-GST is a recipe for a complete economic disaster.”

“A boost in revenue generation is possible only after all the openings of corruption are plugged and the economy reprioritized with the welfare of the people placed on the top of national agenda,” PML-N Information Secretary Ahsan Iqbal said.

Published in The Express Tribune, November 13th, 2010.

Read the complete RGST bill here.]]>
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			<title>No buyers while prices of sugar rocket</title>
			<link>https://tribune.com.pk/story/76636/no-buyers-while-prices-of-sugar-rocket</link>
			<comments>https://tribune.com.pk/story/76636/no-buyers-while-prices-of-sugar-rocket#comments</comments>
			<pubDate>Sat, 13 Nov 10 04:27:30 +0500</pubDate>
			<dc:creator>
				<![CDATA[express]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=76636</guid>
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				<![CDATA[TCP sells just 6,000 tons against offer of 19,000 tons, as senate body hold government responsible.]]>
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				<![CDATA[The Trading Corporation of Pakistan (TCP) has sold another 6,000 tons of sugar in the open market through a tender.

According to an official release issued by TCP on Friday, “TCP received bids from 14 different parties from all over the country” and “the highest price offered was Rs64,550 per ton, which was below landed cost.”

A TCP official explained that the average landed cost of the sweetener was Rs65,000 per ton for the corporation, adding that all bidders were contacted and offered sugar stocks if they were to revise their offers to match this landed cost.

“Four bidders agreed to match the price,” declared the official release, adding that 6,000 tons of the commodity have been awarded to these parties.

The official spokesperson for TCP also revealed that “about 6,000 tons of sugar were supplied to the Punjab government while another 7,000 tons were given to Utility Stores Corporation and private parties on Friday.”

He asserted that the corporation “is releasing 200,000 tons of sugar to provinces, in pursuance of a recent government decision.”

“The deliveries will continue during the weekend and Eid holidays, except for November 17 and 18,” said the official release.

TCP also intends to sell another 23,000 tons in the open market through an auction on November 15. Industry analysts were of the view that low participation in recent sugar auctions shows that there is ample sugar available in the country and that dealers expect prices to plummet in coming days.

Sugar prices continued to ease in markets following increased supply from TCP and crackdown on suspected hoarders. The wholesale price of sugar in Karachi oscillated between Rs82 and Rs84 per kilogramme, according to market sources.

Meanwhile, the Lahore city district government has fixed the wholesale price at Rs69 per kg while the retail rate has been marked at Rs72.

Senate body holds govt responsible

The Senate standing committee on industry and production was informed that all provinces were asked a number of times to purchase 100,000 tons of sugar from TCP but it never happened.

Federal Minister for Industries and Production Mir Hazar Khan Bijarani told the committee’s chairman, Ishaq Dar, that 350,000 tons are consumed monthly in Pakistan and the federal government is in the process of consultation with the provinces in order to control the sugar price and several steps have been taken in this regard.

Earlier, Dar, while chairing the senate committee meeting, said that the sugar crisis is the result of failure of federal as well as provincial governments because the crisis could have been avoided had the government taken timely decisions.

Sugar output estimate raised to 3.7m tons

Pakistan has revised a forecast of 2010-11 sugar production to 3.7 million tons, up by about 500,000 tons from an earlier estimate, despite flood damage to the sugarcane crop, officials said on Friday.

The government had earlier expected up to 3.2 million tons of sugar from the crop, after the country’s worst floods washed away nearly 10.5 million tons of sugarcane.

But after recent surveys of the flood-hit areas in the main cane-growing provinces of Punjab and Sindh, government and industry officials told a meeting on Thursday that yield would be higher in areas where there were rains but no floods.

“Although floods damaged the crop, because of excessive rains we are expecting a healthy crop and up to 20 per cent increase in yield per acre,” Javed Kayani, chairman Pakistan Sugar Mills Association (PSMA), told Reuters.

An official at the Ministry of Industries and Production confirmed that sugar output estimates had been revised to 3.7 million tons. Fearing shortages, the government in September waived a 25 per cent regulatory duty and allowed millers and traders unlimited imports of raw sugar to meet demand.

Traders have since booked orders for about 70,000 tons of raw sugar, according to government officials.

Published in The Express Tribune, November 13th, 2010.]]>
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			<title>Centre, province to file report on price raise</title>
			<link>https://tribune.com.pk/story/76533/centre-province-to-file-report-on-price-raise</link>
			<comments>https://tribune.com.pk/story/76533/centre-province-to-file-report-on-price-raise#comments</comments>
			<pubDate>Sat, 13 Nov 10 03:44:40 +0500</pubDate>
			<dc:creator>
				<![CDATA[express]]>
			</dc:creator>
			<category><![CDATA[Punjab]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=76533</guid>
			<description>
				<![CDATA[LHC issued notices, seeks detailed report from Federal, Punjab govt on a petition against increase in sugar prices.]]>
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				<![CDATA[The Lahore High Court on Friday issued notices and sought a detailed report from the Federal and Punjab government till November 22 on a petition against increase in sugar prices.

Justice Sheikh Azmat Saeed said that the sugar mafia had created an artificial shortage of sugar by hoarding it and selling it at inflated rates.

He said, “If the sugar crisis is a result of hoarding by the dealers then it is the government’s job to keep a check on them. The government should take needful legal action under the anti-hoarding laws against those involved.”

He said that the court may pass directions for inspection of the bank accounts of the sugar dealers and traders to determine whether they had drawn money from their accounts to buy and hoard sugar.

The court remarked that the sugar crisis had reached its high point due to the ‘government’s inefficiency’.

Pleading his case, petitioner-counsel Advocate Muhammad Azhar Siddique submitted that the unprecedented and unchecked surge in the sugar price had been caused by influential politicians enjoying the support of the government officials, unscrupulous traders, profiteers and hoarders.

The counsel requested the court to seek a report from the respondent in this regard till Monday, November 15. The court, however, stating that it might be ‘hard’ for the government to reply in such a short period, gave the government time till Nov 22.

Published in The Express Tribune, November 13th, 2010.]]>
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			<title>Minto opposes aid-oriented economic policies</title>
			<link>https://tribune.com.pk/story/76679/minto-opposes-aid-oriented-economic-policies</link>
			<comments>https://tribune.com.pk/story/76679/minto-opposes-aid-oriented-economic-policies#comments</comments>
			<pubDate>Sat, 13 Nov 10 02:34:48 +0500</pubDate>
			<dc:creator>
				<![CDATA[azam.khan]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=76679</guid>
			<description>
				<![CDATA[Said expenditure on defense,debt-serving(70 per cent of total govt expenditure)must be slashed unequivocally, instead.]]>
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				<![CDATA[Speakers at a seminar asserted that it is essential for Pakistan to extricate itself from a dependant position in the capitalist world economy by devising and implementing an alternative economic paradigm to the current aid-oriented development model.

They said that the conditions imposed by the International Financial Institutions (IFIs) who are backed by rich western governments had negatively affected the already hard-pressed people of third world countries like Pakistan.

The seminar was organised by the Workers Party Pakistan (WPP) Friday at the National Press Club to coincide with and highlight the inadequacies of the upcoming gathering of bilateral and multilateral donors in Islamabad on Monday under the auspices of Pakistan Development Forum. In the upcoming meeting, another aid package for Pakistan in light of the recent floods will be discussed.

Abid Hassan Minto, President of WPP, termed the dept as a curse. He suggested that an alternative programme was required to overcome the present economic crisis while introducing structural reform. He said that the parliament should turn down the decision of Shariat appellate bench of Supreme Court against land reform. Parliament should focus on important issues rather than discussing irrelevant ones.

He said that it was a challenge for the independent judiciary led by Chief Justice Iftikhar Muhammad Chaudhry to implement its decisions at the rural level.

Minto laid out several steps which could form the basis of an alternative development paradigm. He stated that expenditure on defense and debt-serving (70 per cent of total government expenditure) must be slashed unequivocally.

“The revenue base must be expanded through generation of the political will to tax the otherwise exempt urban and rural rich, including private and military corporations, landed estates, traders and religious groups,” he suggested.

He further stated that financial and trade liberalisation must be stopped, to remove the uncertainties surrounding entry and exit of capital in the country - foreign investment, he held, should be mandated by law to invest in productive and job generating infrastructure.  He stressed the urgent need for land reform in order to counter the immense problem of landlessness in rural areas, where around 30 million are now landless.

“The privatisation of public assets as well as universities should be halted and inefficacies in said public institutions be dealt with through the induction of workers into the management rather than selling them to the highest bidder,” he held.

Economist Mushtaq Gaadi said that IFI has proven highly destructive for Pakistan over the past few decades. He also highlighted the ecological impact of these projects on the people.

Published in The Express Tribune, November 13th, 2010.]]>
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			<title>Get your sweet revenge</title>
			<link>https://tribune.com.pk/story/76406/get-your-sweet-revenge</link>
			<comments>https://tribune.com.pk/story/76406/get-your-sweet-revenge#comments</comments>
			<pubDate>Fri, 12 Nov 10 19:13:25 +0500</pubDate>
			<dc:creator>
				<![CDATA[mahreen.khan]]>
			</dc:creator>
			<category><![CDATA[Opinion]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=76406</guid>
			<description>
				<![CDATA[Consume less sugar. Help thwart the nefarious designs of a vile bunch of bloodsuckers holding this country hostage.]]>
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				<![CDATA[These pages, and publications across the country, are filled everyday with countless accounts of massive corruption, naked graft, official deception and injustices of medieval proportions. Mostly, you and I read these reports, columns and editorials, fume with righteous indignation for as long as it takes to flip the page, then finish our cup of tea and with heavy hearts, a burdened conscience and a weary acquiescence to our powerlessness, we trudge on with the rest of our day.

Well today is different. You have an opportunity to take a stand and make a difference, with minimal effort and no cost. You can help the impoverished millions of your country, enhance your own personal well-being and simultaneously thwart the nefarious designs of a loathsome, vile bunch of bloodsuckers that are holding the impoverished masses of this country hostage.

Since it is now so outrageously expensive, I cannot afford to sugar-coat the following words. Sugar-mill owners, hoarders, distributors, TCP (Trading Corporation of Pakistan) officials, ministers, smugglers, parliamentarians and bureaucrats in government and opposition — who are maliciously restricting sugar supply, causing extortionate price rises — you are squeezing the lifeblood from a poor people already drowning in torrential inflation. The poorest of the poor are suffering the most from the rise in sugar prices to around Rs125 per kg, a 400 per cent increase from Rs25 kg, since this government came to power on the promise of serving the ‘ghareeb awam’.

Poorer households tend to rely on refined white sugar for their daily calorific input. However, now that one kilo of sugar is more expensive than most fruits and vegetables and costs almost as much as two litres of milk, even low-income households should start to switch from sugar to other foods, to meet daily calorie requirements. With long queues at the utility stores, most middle class families will be inclined to reduce consumption also. This behaviour change must be led by higher income educated groups and civil society, who may be more cushioned against high prices but need to take a stand against this illegal price manipulation.

It is a rare occurrence, indeed, when we can actually play an active part in tackling a social menace, instead of just pontificating. Now there is an opportunity to do just that. A drastic reduction in the demand for sugar would not just exact sweet revenge on the sugar mafia, by leaving them with unsold stocks, but would also benefit our nation’s health and economy. Pakistanis consume too much sugar. We go through a coma-inducing 28 kilos per person per year. That’s more than a kilo every month for each individual and almost matches consumption in developed countries, which average around 30 kilos. In comparison, Indians consume 19 kg and the Chinese only 11 kg, per person annually.

In western societies, millions have been spent on research and studies show that sugar is nutritionally valueless and even toxic. Listed as the number one habit to kick by health practitioners, even beating smoking, sugar is now public enemy number one. It causes weight gain, vitamin deficiencies, tooth decay, hormone and insulin imbalances, behavioural problems, mood swings and can be highly addictive. Whether you are rich or poor, young or old, sugar is toxic for your well-being, even contributing to accelerated ageing. In short, dropping the use of this chemically-laden, nutritionally devoid, high-calorie non-food is the best thing you could do for your health. On a national scale, reforming our dietary habits will not just improve our health indicators it will also help the economy by eradicating the need to import sugar.

So as you abstain from sugaring your cup of coffee, you can derive sweet satisfaction from the fact that you are doing your bit to thwart greedy exploitation, as well as improving your own health. Reducing sugar consumption will dampen demand and bring prices down. A widespread boycott of sugar, even for a short period, will send out a strong message to the illegal cartels and dent their ill-gotten gains. This is a real opportunity to take a stand and show solidarity with our fellow citizens — salvation has seldom been just a teaspoon away.

Published in The Express Tribune, November 13th, 2010.]]>
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			<title>President Zardari’s China trip</title>
			<link>https://tribune.com.pk/story/76483/president-zardari%e2%80%99s-china-trip</link>
			<comments>https://tribune.com.pk/story/76483/president-zardari%e2%80%99s-china-trip#comments</comments>
			<pubDate>Fri, 12 Nov 10 19:05:15 +0500</pubDate>
			<dc:creator>
				<![CDATA[sirajuddin.aziz]]>
			</dc:creator>
			<category><![CDATA[Business]]></category><category><![CDATA[Opinion]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=76483</guid>
			<description>
				<![CDATA[The only leader who seems to have an understanding of the need for strengthening economic ties with China is Zardari.]]>
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				<![CDATA[President Zardari’s visit to China must be used to strengthen bilateral trade and economic relations with Beijing. Post-Zulfiqar Ali Bhutto, the only leader who appears to have a fair understanding of the need for strengthening economic ties with China is Zardari. To maintain economic and strategic connectivity with South Asia, China requires a safe passage through Pakistan. This has acquired greater relevance after China became the second largest importer of oil in the world. On the strategic front, the Chinese dream of getting a foothold in the Indian Ocean, without having an aircraft carrier, is being fulfilled with the development of the Gwadar port.

Pakistan, since the 50s, has enjoyed an excellent relationship with China. There was, however, no concrete plan to transform this relationship to a binding economic friendship. Our annual export target can easily match the exports of any medium-sized Chinese corporation. And that leads us to see the potential this friendship offers. Our gains are small given the opportunities that exist. China’s economy is poised to surpass that of the US by 2025-30. Pakistan must up its economic relations, already a lot of ground has been lost.

China is not one of Pakistan’s major export markets, it does not even figure in the list of top 10 export destinations. However, as regards imports, China has become one of the top five import sources of Pakistan. China supplies the bulk of cheap commercial goods all over the world and for Pakistan as well, despite a common preference for western goods in Pakistan’s market.

The Foreign Office in Islamabad needs to focus its policy strategy towards China. It is imperative for Pakistan to engage with Chinese political and economic leadership at all levels. President Zardari’s visits are small steps towards that purpose, but these need to be supplemented by joint ventures in the economic arena. Many a project with China have disappeared in the ruins of Islamabad’s bureaucracy — Saindak and the Thar Coal Project being cases in point.

President Obama’s preferred visit to India, in total disregard to us being their ally in the war against terror, should serve as jolt for our policymakers to look at the east for economic growth. Our political system, despite its flawed contours, can succeed only if we strengthen our masses economically.

We cannot undermine the formidable Chinese foreign exchange reserves, skyrocketing at $1 trillion, which should ring gigantic alarm bells in our leader’s heads telling them that they need to capitalise on this vast bank of resources. This can be done by encouraging the establishment of Chinese assets in Pakistan in the capacity of investments of Chinese corporations and the establishment of financial institutions to allow the banking industry to flourish.

President Zardari, besides being politically bright, has a keen business acumen which he must bring to full use during the Asian Games visit and induce Chinese investment into Pakistan.

Published in The Express Tribune, November 13th, 2010.]]>
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			<title>Media watch: Taxing times</title>
			<link>https://tribune.com.pk/story/76342/media-watch-taxing-times</link>
			<comments>https://tribune.com.pk/story/76342/media-watch-taxing-times#comments</comments>
			<pubDate>Fri, 12 Nov 10 12:05:23 +0500</pubDate>
			<dc:creator>
				<![CDATA[ali.syed]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=76342</guid>
			<description>
				<![CDATA[Media discusses the possibility of the the RGST and flood tax being implemented and its implications for the country.]]>
			</description>
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				<![CDATA[Media watch is a daily round-up of key articles featured on news websites, hand-picked by The Express Tribune web staff.

Financial measures

Clearly, the government has not handled the fiscal side well, allowing the deficit to mushroom by doing little to enhance revenue or cut non-essential current expenditure. Moreover, when it comes to inflation, especially of foodstuff, fuel and electricity, the casualness of the government`s approach has allowed matters to grow substantially worse than they should have been. (dawn.com)

More misery

It appears the government wishes to bulldoze the bill through parliament as swiftly as possible – perhaps hoping to stifle debate and discussion. It should be aware that this may not happen. Anger is being widely expressed in many places. While Finance Minister Hafeez Shaikh has said the cost of items of everyday use will not go up, the fact is that the tax burden on people through the GST imposition will increase markedly. (thenews.com.pk)

The burden increases

Both measures are extremely shortsighted, and both, especially the GST revision, have been undertaken at the behest of the IMF. One of the purposes of the GST revision, to broaden the tax base, cannot be achieved with the current taxation machinery, which is thoroughly corrupt, and will administer the revised GST in the same corrupt way. (nation.com.pk)

The tax blues

Once again the salaried class has come under direct fire at a time when inflation is breaking the backs of the masses. It is a wonder that the issue of tax evasion and holding to account the culprits who indulge in this practice has been shunned in favour of further taxing the already heavily taxed. (dailytimes.com.pk)

The tax bomb!

Much is understandably being made of the fact that those who approved the levy of a one-time rise in income tax rate are exempt from the payment of income tax. Agricultural landlords with an income comparable to that earned by the country's big industrialists as well as commercial houses, a category in which the majority of PPP cabinet members including the Prime Minister and his Minister of State for Economic Affairs belong, would remain tax-exempt. (brecorder.com)]]>
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			<title>Tax reform in a season of turmoil</title>
			<link>https://tribune.com.pk/story/75809/tax-reform-in-a-season-of-turmoil</link>
			<comments>https://tribune.com.pk/story/75809/tax-reform-in-a-season-of-turmoil#comments</comments>
			<pubDate>Fri, 12 Nov 10 05:59:05 +0500</pubDate>
			<dc:creator>
				<![CDATA[editorial]]>
			</dc:creator>
			<category><![CDATA[Editorial]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75809</guid>
			<description>
				<![CDATA[It is true that RGST is unavoidable,even in these days of economic contraction, IMF or no IMF.]]>
			</description>
			<content:encoded>
				<![CDATA[A besieged government has been forced by its creditors to enforce the ‘reformed general sales tax’ (RGST) to raise its tax-to-GDP ratio and have enough money devolved to the provinces to help an economy that is in the process of contraction but under high risk of inflation. The cabinet, on November 11, also gave concrete shape to an earlier warning by Finance Minister Hafeez Sheikh, that the well-to-do will have to be taxed to lessen the burden of compensations the government has to make to the flood-affected population. But the well-to-do also include salaried people who believe, and perhaps rightly so, that they already pay more than their fair share in tax.

Needless to say, the measures have been immediately opposed from within the ruling coalition and the powerful Punjab government. This is not a good augury for a state that is definitely in for a period of belt-tightening while resting in the oxygen tent of the IMF. Tragically, Pakistan’s resort to the IMF too has been politicised and a very ill-informed and isolationist rhetoric is being unleashed by TV commentators on the ‘slavery’ of the Fund which is ‘determined to destroy Pakistan’. The truth is that if Pakistan is not on the IMF roster no one will do business with it and it will not have enough dollars in the kitty to buy its imports.

The ongoing sugar crisis, ill-advisedly interfered with by the Lahore High Court and the Supreme Court in 2009, is still with us and being exacerbated by TV coverage showing people, who should be abstaining to bring the prices down, actually announcing ruefully that they are buying it at Rs110 per kilo as against the price of approximately Rs50 by the courts in 2009. Last time when the suo motu courts got the provinces to clamp down on the ‘sugar chain’, it caused the private sector trucking business to stop plying, which the state was simply in no position to replace.

Luckily, there are young people in the business programmes of TV channels saying that the RGST is unavoidable, IMF or no IMF. That is true, even in these days of massive economic contraction. The general sales tax (GST) had simply withered away as an efficient taxation tool with the passage of time. The taxation gap continued to linger and the tax-to-GDP ratio actually declined during its operation. There were exemptions in it that spared the agricultural sector — where income tax stayed uncollected because of the incapacity of the provinces — and the fast growing services sector was allowed a holiday.

This gradual failure of GST as a revenue collection device kept Pakistan’s retail sector out of the tax net; the economy remained unregistered and those not announcing their business to the Federal Bureau of Revenue were able to accumulate wealth that undermined the economy. Over the years the GST system was adversely affected by the ‘concessions’ that various powerful lobbies were able to extract from the government. And the system of refunds that came with it persisted in its malfunction and will now have to be massively reformed if the RGST is to succeed.

The RGST will target consumption, barring food and education, and therefore will fall on the well-to-do in the population. It will be collected at various stages and at each stage the seller will charge ‘output tax’ from the consumer on the value of supply of goods or services and will deduct the ‘input tax’ he has paid earlier on a monthly basis. At each stage, the economy will become ‘registered’ and this will make it easy for the state to impose a better system of collection in the future. The retail sector, which is out of the tax net altogether, will thus become a source of revenue, even if this will not happen fully in the first year because of the exemption given under the present RGST to a large segment of it.

The RGST will net an extra Rs200 billion, but the government is in dire straits for the post-flood subsidy it wants to give to the flood-affected. Another Rs70 billion is targeted through a 10 per cent tax for six months on those who earn over Rs300,000 annually. As per the conditionalities it has agreed with the IMF on, not subsidising oil and gas — and removing the old subsidy gap — the government is also ratcheting up petrol prices. If you count all the money the government wants to squeeze out of an economy being made to contract with high interest rates, it looks like a bombshell that the people won’t survive.

Even if the economist tells you that the RGST is not going to hit the poor and the middle class, the scenario is tailor-made for the politics of toppling governments in Pakistan. The most ominous reaction has predictably come from the MQM, whose leader Altaf Hussain has put on the war paint on the RGST and has warned that his party will campaign against it. If Karachi doesn’t pay up — and segments of the economy there are already protesting the tax — then Sindh will have less revenue to work with and the centre will come under pressure. Luckily, the MQM boycott of the RGST can be watered down with political concessions that the party would like to receive.

The revolt of the PML-N is also in high gear in parliament. And despite Nawaz Sharif’s low-tone aggression the party seems to be gearing up for a mid-term change of government, with its leader in the National Assembly Chaudhry Nisar Ali Khan saying ‘removal’ is possible even if the army doesn’t intervene. Punjab Chief Minister Shahbaz Sharif has raised the standard of revolt against the petrol price hike, hoping that unrest among the transporters and the common man will strengthen his hand. He could actually be responding to yet another move by the PPP and the PML-Q to deprive him of his majority in the Punjab Assembly after the 18th Amendment has made it impossible for PML-Q rebels to bail him out.

Nowhere in the Third World does economic discipline sit well with democratic politics, unless it is leveraged with some mixture of authoritarianism, as happened in Indonesia, where the army stands behind the elected government. In Pakistan, we have an army that has not yet been sensitised to the economy.

Published in The Express Tribune, November 12th, 2010.]]>
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			<title>Sugar: The profits of scarcity</title>
			<link>https://tribune.com.pk/story/75755/sugar-the-profits-of-scarcity</link>
			<comments>https://tribune.com.pk/story/75755/sugar-the-profits-of-scarcity#comments</comments>
			<pubDate>Fri, 12 Nov 10 05:22:25 +0500</pubDate>
			<dc:creator>
				<![CDATA[dr.adeel.malik]]>
			</dc:creator>
			<category><![CDATA[Opinion]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75755</guid>
			<description>
				<![CDATA[The recurring nature of the sugar crises reveal the interlocking nature of the economic and political interests.]]>
			</description>
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				<![CDATA[The sugar crisis has returned again, with all its ugly manifestations. The absence of effective remedial measures and the recurring nature of the sugar crises reveal the interlocking nature of economic and political interests in Pakistan. This crisis — like the ones before — provides an apt reminder that the production and trade of sugar doesn’t simply form an economic market, it is also a political market. Or, more appropriately, a market controlled by political agents. The operating principle of Pakistan’s sugar industry is not the economics of abundance based on free, fair and competitive markets. Quite the opposite: it has thrived from the profits of scarcity.

The industry is built on a vested advantage for political incumbents, not the comparative advantage of economic agents. In fact, Pakistan has no natural advantage in the production of sugar. Sugarcane is a water-intensive crop, carrying significant costs for a water-scarce country like Pakistan. There is a high opportunity cost for resources used in its production — whether they are land, water or capital.

With disproportionate amounts of water and more than one million hectares of agricultural land devoted to its cultivation, sugarcane production is a high-cost proposition. Agricultural productivity remains abysmally low, as demonstrated by the low yields per acre. Despite this, the cultivation area for sugar has expanded more rapidly over the last 60 years than any other crop. There are widespread market distortions in all stages of the value chain, from the purchase of sugarcane to its processing and distribution. And there is strong evidence of collusive practices in the industry.

These inefficiencies drive a wedge between domestic and world prices of sugar, increasing the industry’s dependence on state support. Even when sugar fetches a high price in the retail market, it does not necessarily translate into better incentives for farmers. With much of the profit skimmed away by mill owners and intermediaries, farmers often get a raw deal. Sugarcane growers have weak bargaining power, making them susceptible to manipulation by processors. Frequently, there are delays in the crushing season and farmers have to wait for months before their arrears are paid. Any astute observer of agricultural markets would confirm that the timing of the crushing season is itself political, designed to secure an advantage to mill owners.

Given these inefficiencies, sugar has a limited potential as an export crop. There is little prospect of obtaining a comparative advantage in future: export parity prices are higher in Pakistan than those prevailing in the international market. Perhaps, the only limited case for sugar production rests on the arguments for self-sufficiency — the idea that we can save precious foreign exchange by substituting for imports. But despite all the implicit subsidies that the industry has received, we are becoming increasingly dependent on imports. Thus, judged by any economic criteria, domestic production of sugar is not based on a rational allocation of resources.

While there is limited economic logic to producing sugar, there is an important political rationale for the industry’s existence. It offers a creative avenue for extracting resources from society and transferring them to private pockets. Back in the 1980s, entry into the sugar industry offered quick gains to old agricultural elite and new industrial barons. Sugar mills were officially sanctioned to connected individuals and financed through loans given by state-owned banks — loans that were seldom paid back. Heavily over-priced sugar plants from Ittefaq Foundries, duly paid for by national banks, were simply an icing on the cake for our new prophets of good governance, the Sharif brothers of Punjab.

And, even as economic competition is noted for its absence, political elite actively competed for spoils. Today, members of the PML-N own the largest number of mills, followed by leaders of the PML-Q. Stalwarts of the People’s Party, most notably President Asif Ali Zardari and the Mirzas from Sindh, are also major stakeholders. In fact, mapping the pattern of ownership in the sugar industry can allow us to map the power structure of Punjab and Sindh. This poses a dilemma for some of our media pundits who are impatient for political change. A regime change is likely to replace one set of rentiers with another. There is no hope for meaningful change unless we can alter the underlying distribution of economic power.

Published in The Express Tribune, November 12th, 2010.]]>
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			<title>Putting Humpty Dumpty together again</title>
			<link>https://tribune.com.pk/story/75754/putting-humpty-dumpty-together-again</link>
			<comments>https://tribune.com.pk/story/75754/putting-humpty-dumpty-together-again#comments</comments>
			<pubDate>Fri, 12 Nov 10 05:15:23 +0500</pubDate>
			<dc:creator>
				<![CDATA[ayesha.tammy.haq]]>
			</dc:creator>
			<category><![CDATA[Opinion]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75754</guid>
			<description>
				<![CDATA[It’s time for us the citizens of Pakistan to take a stake, to field our own candidates and it's time we changed.]]>
			</description>
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				<![CDATA[A couple of days ago I overheard a conversation among a group of people at least a generation older than me. They were talking about how bad things had become, about this rot that had set in and was eating away at everything. They talked about falling standards, ethics and moral values. They rabbited on about security and rising prices, about garbage on the streets and in positions of power. They talked of better times and wondered how it got this bad and who would put Humpty Dumpty together again?

What is truly amazing is how generations of Pakistanis have allowed the rot to set in and eat away at the wall making it so unstable that Humpty Dumpty fell and broke. Of course if you say this to them you are met with blank and vacant stares. It’s difficult for people to understand that the government, the cricket board, the sugar mafia and all the other mafias are not the problem; they are symptoms of the disease that has overtaken this society.

Inordinate amounts of time are spent finding fault without actually identifying the fault. It’s mostly our own fault. We sit back and allow things to happen. If the crime rate becomes alarming we raise the boundary walls, put in an alarm system and hire an armed guard. If it hits too close to home there is always the Canadian option, which can be exercised until things quieten down. However, there is always a danger that things could flare up again at anytime. What we don’t seem to realise is that each flare-up only accelerates the rot and eventually makes Canada the option. But that’s an option for the ones we like to call the ‘privileged few’. What happens to the rest, do they just continue to fight and struggle to keep their heads above the poverty line? Or will those of us in a position to affect change move out of the bubble we have taken up residence in and do something?

Doing something sounds vague but it’s definitely doable. All of us, reading this newspaper, have one very powerful tool — education — and with that the ability to articulate our thoughts and make ourselves heard. A few years ago a scheme was floated to build Karachi’s new US consulate in Clifton next to the Karachi Grammar School (KGS). Alarm bells went off and much protest later, including a march led by grandparents and parents of students, the consulate was moved to another location. A few weeks ago the parents of children attending KGS managed to stop the building of a high-rise tower. It wasn’t that they needed to use influence or favour, it was purely on legal grounds that they argued their case so eloquently at the public hearing. In doing so, and probably without realising the impact of their actions, they have created a precedent whereby other illegal construction can be stopped.

This is the power of those who are in a position to do that vague ‘something’. In the case of the illegal high-rise their collective energy and intellect was channelled by a group called Shehri — Citizens for a Better Environment, who have been trying to keep Karachi’s unchecked developments within the law and make it a better place for all of us to live in. The KGS precedent can now be used by Shehri to stop illegal use of amenity plots, stop the construction of unregulated buildings and more. So having discovered that things can change perhaps we will all be convinced that we can do much more than just stop the construction of a high-rise building.

It looks like Humpty Dumpty has taken a really bad fall and so far all the kings horses and all the kings men, their financial advisors and their friends in Washington have not been able to put poor Humpty together again. It looks like they need our help. Surely our stake in Pakistan runs beyond personal concerns, if we claim to be stakeholders its time to take a stake. It’s time to change the way we look at the political landscape of this country, time to field our own candidates and it's time we changed.

A version of this article appeared in The Express Tribune, November 12, 2010.]]>
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			<title>Inflation hovers above 15%</title>
			<link>https://tribune.com.pk/story/75960/inflation-hovers-above-15</link>
			<comments>https://tribune.com.pk/story/75960/inflation-hovers-above-15#comments</comments>
			<pubDate>Fri, 12 Nov 10 04:53:18 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75960</guid>
			<description>
				<![CDATA[October figure suppressed because of drop in prices of perishables, trouble expected next month.]]>
			</description>
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				<![CDATA[The inflation figure has been recorded above 15 per cent for the second month in a row, underscoring flaws in government policies that are solely targeting the interest rate but not doing enough to improve the supply chain or curb public spending.

The Consumer Price Index, an indicator showing movement in prices in retail markets, went up by 15.33 per cent in October compared with the same month last year, according to data released by the Federal Bureau of Statistics (FBS). In September, the aggregate increase in prices was recorded at 15.71 per cent.

The numbers for October, however, are below the expectations of the government and economic analysts alike, mainly because of an ease in prices of certain perishable food items.

“Last month, the prices of onions, tomatoes, chicken, potatoes and fresh fruits dipped significantly and this has helped restrict inflation below 16 per cent,” said an FBS analyst.

Finance ministry officials admitted that October’s numbers highlight inconsistencies in monetary and fiscal policies. The government has been trying to arrest the spike in prices by increasing interest rates in a bid to curb demand but has not been doing enough to curtail current expenditure, they added.

Moreover, the hike has been attributed to the disruption in the food supply chain caused by the recent floods.

“The core inflation minus food and energy figure rose 9.3 per cent in October and this shows that there is no need to increase the interest rate further,” said Dr Ashfaque Khan, Dean of the business school at NUST.

However, ministry officials say the worst is likely to come in November, as the increase in rates of petroleum products and the abnormal surge in sugar prices will be reflected in next month’s figures. They are also expecting import pressure in the wake of reconstruction activities. “In order to curb import pressure, policymakers are being pressed by the International Monetary Fund (IMF) to let the rupee depreciate further by three per cent,” said an official who participated in the recent dialogue held with the IMF.

Average inflation for the first four months (July-October) of the current fiscal remains at 14.2 per cent.

Published in The Express Tribune, November 12th, 2010.]]>
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			<title>A monetary policy too frequent</title>
			<link>https://tribune.com.pk/story/75831/a-monetary-policy-too-frequent</link>
			<comments>https://tribune.com.pk/story/75831/a-monetary-policy-too-frequent#comments</comments>
			<pubDate>Fri, 12 Nov 10 04:35:27 +0500</pubDate>
			<dc:creator>
				<![CDATA[]]>
			</dc:creator>
			<category><![CDATA[Opinion]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75831</guid>
			<description>
				<![CDATA[Monetary policymaking suffers from 'time inconsistency'; people expect the opposite of what policymakers announce.]]>
			</description>
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				<![CDATA[Monetary policymaking suffers from what economists call ‘time inconsistency’. Simply put, it refers to the gap between what is announced and what is actually done. The result is that when policymakers announce that inflation will be brought down, people tend to believe the opposite. This is a crucial factor in determining the frequency of announcing monetary policy. The extent of time inconsistency depends on how good and recent the information available at the time of announcement is. Needless to say, this is also a key determinant of policy credibility.

The State Bank of Pakistan (SBP) announces its monetary stance or policy rate every two months. The last such announcement was made on September 29. It coincided with the end of the first quarter of the current financial year, 2010-11. What information was available in the “Monetary Policy Information Compendium” issued with the policy announcement? Virtually nothing in the real sector, as we do not yet produce quarterly estimates of GDP. Even the full year data related to the year 2009-10 consisted of provisional estimates. The only information available during the year relates to large-scale manufacturing sector and that too with a lag. Depending on the timing, it is also possible to make an assessment about the output of major crops. However, the Compendium contained the July-June (2009-10) information about large-scale manufacturing and crop targets for 2010-11. There is no problem in the monetary data collected by the SBP itself. It also has better access to selected financial data, though the financial soundness indicators related to April-July, 2010.

This state of information suggests that announcing the monetary policy every two months is a bit too frequent. Now, all kinds of frequencies are practiced around the globe — monthly, quarterly and semi-annual. But the frequency rises with the size and stage of the development of the economy. India, for instance, announces monetary policy every quarter. On the other end, the United States announces its stance eight times in a year and Japan twice a month. In our situation, which is not much different from India, quarterly announcement is the best we can hope for.

Of course in a crisis situation, a central bank does not have to wait for the pre-determined date of announcement. The SBP used to issue its monetary policy statement twice a year. In the midst of an economic and financial crisis, it deviated from its normal frequency and announced interim monetary policy measures in November 2008. This was followed by the decision to make quarterly announcements. The first quarterly monetary statement was announced for January-March 2009. In September 2009, however, the frequency was reduced to two months, with a one-line explanation that it would “help in addressing the uncertain and rapidly changing economic conditions.” Far from it. Apparently, it was an attempt by the then governor to create a feel-good factor for the increasingly restive business class by maintaining the rate at 13 per cent, followed by a negligible-but-government-inspired cut of 50 bases points (by half a per cent) in November 2009 and then maintaining it in January, March and May 2010. This do-nothing policy was pursued to please the government, appease the business class and confuse the public. The return to the policy rate of 13 per cent in July laid bare the gamesmanship involved in the two-monthly announcements. The sooner the SBP returns to a quarterly monetary policy announcement, the better. Given the frequency of the information available, this would lead to some reduction in uncertainty and allow people to form somewhat reasonable expectations.

Published in The Express Tribune, November 12th, 2010.]]>
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			<title>Final price: Sugar to be sold at Rs71 per kg</title>
			<link>https://tribune.com.pk/story/76099/final-price-sugar-to-be-sold-at-rs71-per-kg</link>
			<comments>https://tribune.com.pk/story/76099/final-price-sugar-to-be-sold-at-rs71-per-kg#comments</comments>
			<pubDate>Fri, 12 Nov 10 03:26:48 +0500</pubDate>
			<dc:creator>
				<![CDATA[Hafeez Tunio]]>
			</dc:creator>
			<category><![CDATA[Sindh]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=76099</guid>
			<description>
				<![CDATA[Sindh govt fixes retail price of sugar at Rs71 per kilogramme, retracting earlier assessment of Rs61 per kilogramme.]]>
			</description>
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				<![CDATA[The Sindh government has decided to fix the retail price of sugar at Rs71 per kilogramme, retracting its earlier assessment of Rs61 per kilogramme.

District Coordination Officers (DCOs) have been directed to complete all arrangements immediately to ensure sugar supply at the final retail price, according to a press release issued by the Chief Minister’s House. Stern action will be taken against people found selling sugar at rates higher than the prescribed price,  the statement added.

Meanwhile, the provincial government is yet to decide whether a special stall will be setup for providing sugar at subsidised rate or whether it will be made available through utility stores at a cheaper rate.

A spokesperson for the Sindh chief minister said that the government will take stiff action against hoarders and profiteers.

Officials also said that the provincial government has made adequate arrangements for receiving 70,000 tons of sugar of the stock being offloaded by the Trading Corporation of Pakistan.

On Wednesday, a meeting was held at the Chief Minister’s House to review the prices of essential commodities, including sugar. The meeting decided to set the retail price of sugar at Rs61, but within 24 hours the decision changed.

Talking to The Express Tribune a spokesperson for the chief minister said that the retail price of sugar has been fix at Rs71 per kilogramme.

Talking to the media at the interior ministry in Islamabad on Thursday, the Director-General (DG) of the Federal Investigation Agency (FIA) Waseem Ahmed described the sugar crisis as a “burning issue”. He said that Interior Minister Rehman Malik has finalised an inquiry into the Trading Corporation Pakistan (TCP) case, adding that senior officials were found to have been involved in the case. “The (findings) of the inquiry are being finalised. We will certainly take action against hoarders if (enough) sugar is not brought out (in the open market) in the next 24 hours,” he said.

Published in The Express Tribune, November 12th, 2010.]]>
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			<title>RGST plan finds no takers</title>
			<link>https://tribune.com.pk/story/76098/rgst-plan-finds-no-takers</link>
			<comments>https://tribune.com.pk/story/76098/rgst-plan-finds-no-takers#comments</comments>
			<pubDate>Fri, 12 Nov 10 03:23:51 +0500</pubDate>
			<dc:creator>
				<![CDATA[zia.khan]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=76098</guid>
			<description>
				<![CDATA[Friends and foes alike vow to block legislation, ignoring PM’s sweet talk in NA, calling the tax 'anti-people'.]]>
			</description>
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				<![CDATA[A promise by the government to evolve a national consensus on proposed taxation reforms appears to have gone unheard as its allies and opponents vowed to put their strength together to block the legislation, calling it anti-people.

Hours after Prime Minister Yousaf Raza Gilani said he would reach out to coalition partners and opposition parties to win their support for the Reformed General Sales Tax (RGST), political groups rejected the move with threats to obstruct it.

“We will take everybody into confidence on the GST reforms bill,” Gilani told media here on Thursday as the government prepares to move the draft legislation in the National Assembly on Friday.

Members of the federal cabinet on Wednesday approved new taxation measures of around Rs70 billion through reforming an outdated sales tax regime, increasing regulatory duty on imports and announcing to impose one-time surcharge to rebuild flood-devastated areas. The government insisted the new system known as RGST would not impact the lives of impoverished segments of society already facing hard times due to an unprecedented price hike.

But other political parties – allies of the government and its opponents – do not buy this argument. They believe the taxation would make it hard for low-income groups to continue their everyday battle for survival.

“It is criminal to support this (RGST),” Opposition Leader in the National Assembly Chaudhry Nisar Ali Khan told media outside the parliament as his Pakistan Muslim League-Nawaz (PML-N) continued to press government on price hike inside the house for third day running.

Members from the PML-N resumed their overnight sloganeering and desk-thumping against the recent wave of price hike, especially this month’s increase in the rates of petroleum products. Unlike on previous occasions, the party got a boost from other opposition groups whose lawmakers put their weight behind a demand by the PML-N to let it table a resolution against inflation.

The entire opposition, though faced with internal fractures, put up a united show to seek the approval of the resolution from the lower house, a demand the government called an attempt to politicise the ‘miseries of the people’.

Voices were also heard from the allies of the government – Awami National Party (ANP) and Jamiat Ulema-i-Islam-Fazl (JUI-F) – which called it a move that would further compound the problems of the poor.

But the loudest objection to both the RGST and the proposed flood surcharge came from the Muttahida Qaumi Movement (MQM).

The party’s parliamentary leader in the National Assembly Dr Farooq Sattar told media at a hurriedly-called news conference in the evening that the group would not support the legislation at any cost.

“It is an anti-people bill. A tsunami of inflation will follow if it is approved. It will put an unbearable burden on masses. It will slow the pace of economic growth,” Dr Sattar told media, making his party’s stance on the RGST crystal clear.

Sindh Assembly walkout

In Sindh Assembly, the MQM staged a walkout against the one-time flood tax on Thursday.

Parliamentary leader of MQM Syed Sardar Ahmed announced a walkout against the speeches of PPP members in which they said the flood tax bill would be tabled in the assembly soon.

Published in The Express Tribune, November 12th, 2010.]]>
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			<title>Sugar crisis to be resolved in 3 days: Sattar</title>
			<link>https://tribune.com.pk/story/75832/sugar-crisis-to-be-resolved-in-3-days-sattar</link>
			<comments>https://tribune.com.pk/story/75832/sugar-crisis-to-be-resolved-in-3-days-sattar#comments</comments>
			<pubDate>Thu, 11 Nov 10 14:59:24 +0500</pubDate>
			<dc:creator>
				<![CDATA[express]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75832</guid>
			<description>
				<![CDATA[Farooq Sattar stressed on the need to introduce an agriculture tax in the country.]]>
			</description>
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				<![CDATA[Muttahida Qaumi Movement (MQM) Deputy Convener Dr Farooq Sattar said on Thursday that all efforts will be made to bring the sugar crisis to an end within the next three days.

He said the MQM is very concerned over the rising inflation in the country adding that Federal Minister for Petroleum Syed Naveed Qamar and Finance Minister Abdul Hafeez Sheikh had assured the MQM that the government will overcome the sugar crisis in next three days.

He stated that people have the right to know whether prices are increasing due to artificial inflation or due to the inefficiency of government officials.

The MQM leader also stressed on the need to introduce an agriculture tax in the country. He contended that the flood surcharge is being imposed on the people who are already under heavy burden of taxes.

MQM opposes flood tax

Earlier in the day the MQM had walked out from the Sindh Assembly session after the federation's insistence on imposing a flood-tax.

While debating on the issue, MQM's Parliamentary leader Syed Sardar Ahmad had said that inflation was already beyond control and his party would not let any other tax be imposed on the people.

However, Sindh Finance Minister Syed Murad Ali Shah and Sindh Law Minister Ayaz Soomro had said that the flood tax would be imposed at every cost.]]>
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			<title>EU capitals approve trade aid package for Pakistan</title>
			<link>https://tribune.com.pk/story/75811/eu-capitals-approve-trade-aid-package-for-pakistan</link>
			<comments>https://tribune.com.pk/story/75811/eu-capitals-approve-trade-aid-package-for-pakistan#comments</comments>
			<pubDate>Thu, 11 Nov 10 14:44:21 +0500</pubDate>
			<dc:creator>
				<![CDATA[reuters]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75811</guid>
			<description>
				<![CDATA[The package covers 75 Pakistani exports which will be allowed to enter the EU duty-free from 2011.]]>
			</description>
			<content:encoded>
				<![CDATA[European Union (EU) governments have approved a raft of trade concessions for Pakistan, diplomats said on Thursday, a move to help the country rebound from the floods which caused nearly $10 billion of damage.

The final package is less extensive than the EU had hoped to agree but still covers 75 Pakistani exports, from cotton sheets to clothing and ethanol, which will be allowed to enter the EU duty-free from 2011, an EU spokesman said.

The duty waiver now needs approval from the World Trade Organization (WTO) and the European Parliament.

Following pressure from EU industries that feared losing market share to cheaper Pakistani imports, the tariff suspensions will now apply for two years, with a third year only granted after an assessment, EU diplomats said.

The compromise also sets a duty-free quota on the most sensitive products on the list: some fabrics, towels, women's jeans and socks will lose their duty-free status if exports to Europe rise by more than 20 percent per year, diplomats said.

All remaining items may also lose their tariff suspension if there is a surge in their exports to Europe, under a safeguard mechanism whose method is yet to be agreed, diplomats said.

Finally, the compromise has cut the duty-free allowance of ethanol imports from Pakistan to 80,000 tonnes, from an originally proposed 100,000 tonnes, diplomats said.

"These adjustments are not expected to lower considerably the expected benefits for Pakistan's flood-stricken economy," said John Clancy, trade spokesman for the EU's executive Commission, which drafted the original plans.

Reactions to the compromise

But some EU diplomats warned that Europe's concern for its own industries could undermine the credibility of its stated aim of using trade as a security and development tool.

"Some member states believe Europe has watered down its aid to Pakistan too much. This creates a credibility problem, after all this was supposed to be the method by which the EU helps Pakistan reconstruct," said one EU diplomat.

Another involved in the negotiations said: "It's not ideal, but at least we have a deal that we can put to the WTO."

The original plan unveiled in October, said duty suspensions would affect about 900 million euros worth of Pakistani exports to the EU and estimated Pakistan could boost sales to the EU by 100 million euros.

Most of the trade concessions will be on textile products, though there are no tariff cuts for bed linen, Pakistan's main export product, because of EU industry opposition.

Britain, Germany and Sweden have led calls for trade the concessions but countries with large textile and clothing industries such as Italy, Spain and France were reluctant.

The EU is drafting separate plans that could allow Pakistan access to long-term trade discounts from 2014 under the so-called GSP Plus regime, though that also faces opposition.]]>
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			<title>'Supporting new tax is a crime'</title>
			<link>https://tribune.com.pk/story/75721/supporting-new-tax-is-a-crime</link>
			<comments>https://tribune.com.pk/story/75721/supporting-new-tax-is-a-crime#comments</comments>
			<pubDate>Thu, 11 Nov 10 12:46:20 +0500</pubDate>
			<dc:creator>
				<![CDATA[express]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75721</guid>
			<description>
				<![CDATA[Nisar slams RGST, flood tax, as opposition parties jointly vow to block the passage of imposing new taxes on masses.]]>
			</description>
			<content:encoded>
				<![CDATA[Opposition leader in the National Assembly, Chaudhry Nisar has said that suppporting  the reformed general sales tax (RGST) would be tantamount to committing a crime. He warned of stern opposition if the government tried to impose  it.

Nisar made this categorical statement in the National Assembly's  session today (Thursday). Opposition parties boycotted the meeting and vowed to block the  passage of imposing new taxes on the masses. The MQM has also openly protested the RGST today.

ANP's minister Ghulam Ahmed Bilour termed the RGST and flood relief  surcharge a 'sin' by the government of Pakistan. At one stage the PPP's minister Syed Khursheed Shah blamed the PML-N  for point scoring on price hike and other issues.

PML-N and PML-Q have also joined hands to move a resolution against hike  in petroleum products prices in the National Assembly. The speaker adjouned the session till Friday.

Background

The federal cabinet has approved a bill to overhaul the tax regime, announcing new tax measures of Rs69 billion, primarily to rebuild flood-hit areas, initiating a process of ‘correcting past mistakes’.

Allied parties remained wary of the new tax and major coalition partners like the Muttahida Qaumi Movement (MQM), Awami National Party (ANP) and Jamiat Ulema-i-Islam-Fazl (JUI-F) expressed reservations, insisting that they had not been taken into confidence on the bill. (read the full report here).

International lenders have been urging Pakistan to reform its taxation regime and power sector tariffs as a prerequisite for continuing support for the country’s ailing economy.]]>
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			<title>Inflation rises over 14%</title>
			<link>https://tribune.com.pk/story/75710/inflation-rises-over-14</link>
			<comments>https://tribune.com.pk/story/75710/inflation-rises-over-14#comments</comments>
			<pubDate>Thu, 11 Nov 10 12:03:06 +0500</pubDate>
			<dc:creator>
				<![CDATA[express]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75710</guid>
			<description>
				<![CDATA[The Federal Bureau of Statistics says inflation rate for the first 4 months of current fiscal year is 14.17 per cent.]]>
			</description>
			<content:encoded>
				<![CDATA[Inflation rate for the first four months of the current fiscal year is 14.17 per cent, says Federal Bureau of Statistics.

According to the bureau, inflation rate for the month of October reached 15.33 per cent while the rate in June was 12.69 per cent.

The average rate of inflation from 2003 to 2010 was 10.15 per cent whereas a historic high of just over 25 per cent was recorded in August 2008.

Pakistan's inflation rates are amongst the highest in the region but the Governor of State Bank of Pakistan (SBP), Shahid Hafeez Kardar, has argued that rates would stabilize once crops are harvested from flood-hit areas.

He said last month that the federal government’s borrowing from SBP to finance soaring expenditures, a delay in the disbursement of spending on the war on terror and a dip in revenues had squeezed the economy’s breathing space.]]>
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			<title>Media watch: Nawaz's speech and the sugar crisis</title>
			<link>https://tribune.com.pk/story/75706/media-watch-nawazs-speech-and-the-sugar-crisis</link>
			<comments>https://tribune.com.pk/story/75706/media-watch-nawazs-speech-and-the-sugar-crisis#comments</comments>
			<pubDate>Thu, 11 Nov 10 11:48:42 +0500</pubDate>
			<dc:creator>
				<![CDATA[ali.syed]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75706</guid>
			<description>
				<![CDATA[Media analyses Nawaz Sharif's speech against the government along with the ongoing sugar crisis .]]>
			</description>
			<content:encoded>
				<![CDATA[Media watch is a daily round-up of key articles featured on news websites, hand-picked by The Express Tribune web staff.

Angry Nawaz

It is not just in the economic sphere that we have a mess. The tussle between the executive and the judiciary poses a huge threat to the system while the consistent failure to abide by court decisions means the government has lost respect in the eyes of people. It has also floundered as far as offering flood relief is concerned, with reports of mismanagement now pouring in. (thenews.com.pk)

Noises of discontent

Mian Nawaz’s remark about martial law deserves some attention for he was addressing a genuine concern, though it reflected upon both the performance of the government and the commitment of the military to democracy. There is a genuine danger, because the government’s ability to control the present price hike will determine whether it can survive, or whether it will be overthrown. (nation.com.pk)

Breaking the begging bowl

Mian Nawaz Sharif should not be playing politics at a time like this, as there is a serious economic crisis. It is a well-documented phenomenon that in order to sustain our economy, we have always used the ‘begging bowl’. Mr Sharif is right in pointing out that most of the economic policies are anti-poor, but to change all this we have to revolutionise the economy. (dailytimes.com.pk)

The sugar spiral

It is unfortunate that the federal government disregarded all warnings of insufficient domestic production during the last crushing season and failed to import the required quantities of the commodity to leverage its position in the market. Also, it did not release the state reserves well in time to ward off shortages in the market and allowed matters to go from bad to worse. (dawn.com)

Avoid conflict of interest

There is a consensus and it makes perfect economic sense from a theoretical standpoint to allow the market to set itself the price of sugar - a commodity that operates within perfect competition conditions in most countries whereby supply and demand determines price. The cost of growing sugarcane in Pakistan is uneconomical at present. (brecorder.com)]]>
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			<title>Uproar over sugar price hike</title>
			<link>https://tribune.com.pk/story/75687/uproar-over-sugar-price-hike</link>
			<comments>https://tribune.com.pk/story/75687/uproar-over-sugar-price-hike#comments</comments>
			<pubDate>Thu, 11 Nov 10 10:54:34 +0500</pubDate>
			<dc:creator>
				<![CDATA[express]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75687</guid>
			<description>
				<![CDATA[Sugar prices continue to rise as the commodity is available for no less than Rs115 per kilogramme across the country.]]>
			</description>
			<content:encoded>
				<![CDATA[Sugar prices continue to rise as the commodity is available for no less than Rs115 per kilogramme across the country on Thursday. 

A shortage of the commodity is observed at sale points set up by the Lahore district administration where sugar is available for Rs62 per kilogramme. In Dera Ghazi Khan, 13 sale points have been set up to facilitate consumers. The prices of the commodity are ranging from Rs120 to Rs140 per kilogramme in Rahim Yar Khan Rs115 per kilogramme in the open market in Faisalabad.

Political uproar

The National Assembly session today was adjourned after an uproar erupted in the House over the sugar price hike.

PML-N MNA Hamza Sharif, speaking to Express 24/7 correspondent Sumaira Khan, in Islamabad said that the government had been forewarned that sugar prices will skyrocket. He blamed the government for the problem saying that “just because of inactivity on the part of the government, the people are facing the problem”.

The Competition Commission of Pakistan (CCP) said yesterday that its findings show that sugar barons are fleecing consumers by making cartels at three different tiers.

While talking to the media at the Interior Ministry office in Islamabad today, the Director General (DG) of Federal Investigation Agency (FIA) Waseem Ahmed described the sugar crises as a “burning issue”. He said that Interior Minister Rehman Malik has finalised the inquiry on the Trading Corporation Pakistan (TCP) case, revealing that according to their findings, senior officials are involved.

“The inquiry has started and we are at the finalising state. If the sugar is not brought out in the next 24 hours, we will certainly take action against the hoarders,” he said.

Meanwhile, the Sindh government has decided to acquire 70,000 tons of sugar from the Trading Corporation of Pakistan (TCP) on an emergency basis and sell it in the market at a fixed rate of Rs61 per kilogramme. The Sindh ministry for trade and industry also cancelled the no-objection certificates (NOCs) for eight sugar mills who failed to set up units in the agreed period of time.

Punjab is also set to receive up to 100,000 tons of the commodity from TCP. Punjab Chief Minister Sharif has issued orders for direct off loading of sugar from Karachi port.]]>
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			<title>KESC suspends power supply to police stations</title>
			<link>https://tribune.com.pk/story/75662/kesc-suspends-power-supply-to-police-stations</link>
			<comments>https://tribune.com.pk/story/75662/kesc-suspends-power-supply-to-police-stations#comments</comments>
			<pubDate>Thu, 11 Nov 10 08:37:29 +0500</pubDate>
			<dc:creator>
				<![CDATA[express]]>
			</dc:creator>
			<category><![CDATA[Sindh]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75662</guid>
			<description>
				<![CDATA[A KESC spokesman said that police stations have outstanding dues worth Rs330 million.]]>
			</description>
			<content:encoded>
				<![CDATA[The Karachi Electric Supply Corporation (KESC) has suspended the power supply to 15 police stations and training centers in Karachi.

A KESC spokesman said that police stations owe the KESC Rs330 million. Nonpayment has forced the corporation to cut their power supply.

Stations and training centers now without power include Headquarters Garden Road, Nazimabad Police Station, Soldier Bazaar station, Central Station, I-I chundrigar road, and Shaheed Benazir Bhutto Training Center Razzaqab.]]>
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			<title>PIA seeks state bail out to survive</title>
			<link>https://tribune.com.pk/story/75564/pia-seeks-state-bail-out-to-survive</link>
			<comments>https://tribune.com.pk/story/75564/pia-seeks-state-bail-out-to-survive#comments</comments>
			<pubDate>Thu, 11 Nov 10 05:08:49 +0500</pubDate>
			<dc:creator>
				<![CDATA[afp]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75564</guid>
			<description>
				<![CDATA[PIA promises to make cutbacks and better its fleet in a bid to improve fortunes, if treasury agrees to cancel debt.]]>
			</description>
			<content:encoded>
				<![CDATA[Ailing state carrier Pakistan International Airlines (PIA) is asking the government, saddled with its own mounting debt, to write off losses of 1.7 billion dollars to save it from looming bankruptcy. 

In a five-year survival plan submitted to the government, PIA has promised to make cutbacks and better its fleet in a bid to improve its fortunes, if the treasury agrees to cancel its debt and pay off other creditors.

Blaming "bad policies of the past" for accumulated losses of 80 billion rupees (936 million dollars) and liabilities of 144 billion rupees, PIA spokesman Sultan Hassan insisted the airline is capable of future success.

Defending the company against long-standing allegations of graft and staffing problems, he told AFP that operational profits show PIA can become self reliant. "We want to reform the airline. If the government helps us by taking on our previous losses and loans so that we can invest capital, we will be able to revamp the company for the future," said Hassan.

But the burden would be a massive undertaking for a government dependent on US aid to survive.

"I don't think it is viable," said an international finance official in Islamabad on condition of anonymity.

"The Pakistani economy is already weak, the government is under billions of dollars in debt -- if they accept PIA's request to pay off their loans it would be an additional burden."

A former financial adviser to the government, Ashfaq Hassan, said privatisation was the only long term solution for the airline, which has failed to turn a net profit since 2004 according to its last annual report.

"This is a plan that the Ministry of Finance should never accept. It would leave a huge impact on the national budget," said Hassan, now dean of Islamabad's National University of Sciences and Technology.

"If the government injects any money into PIA it would only help it to survive for another year and nothing more. The only solution for this corporation is privatization. Anything else is a waste of time and money."

PIA was created out of private airline Orient Airways in 1955, just eight years after Pakistan came into existence, and today has a fleet of 40 planes, a combination of Boeing 747s, 777s, 737s, Airbuses and ATR aircraft.

Performing well until the 1970s when corruption and overstaffing hit company fortunes, PIA's reputation was further battered in the 1980s as it failed to maintain its fleet, said economic expert Shahidur Rehman.

He said 1990 signalled further defeat for PIA, when legislation liberalised to allow more competition in the flight market. The state carrier remains the largest operator on Pakistan's international and domestic routes. But union officials say years of corruption, nepotism, bad management and poor planning have pushed the corporation to its lowest ebb.

"Every PIA contract is awarded against kick-backs and commission to the relevant authorities. This is employees' money being looted by corrupt officials," said Ashraf Bilo, a PIA union leader. Relations between PIA management and its more than 18,000 employees in Pakistan and its global offices are in disarray.

"Merit has always been ignored," said Bilo. Bilo said PIA's 500 pilots each earn around 500,000 rupees (6,000 dollars) per month and can claim a pension of 4,000 rupees a month after 15 years of service -- huge sums in Pakistan.

But the airline recently imposed new rules to force pilots to fly on its terms, after a row over working hours and pension benefits led pilots to adopt an unofficial "go slow" protest leading to flight delays, said spokesman Hassan.

Pilots said they were routinely forced to fly 12 hours per day, two hours more than the civil aviation rules allow, and occasionally for as long as 18 hours.

This "is impossible and a serious violation of airline safety conduct," said PIA pilot Sohail Balouch, also the spokesman for Pakistan Airlines Pilots Association. "The management is unwilling to solve this crisis."]]>
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			<title>Altaf says no to new tax</title>
			<link>https://tribune.com.pk/story/75077/federal-cabinet-approves-rgst-bill</link>
			<comments>https://tribune.com.pk/story/75077/federal-cabinet-approves-rgst-bill#comments</comments>
			<pubDate>Thu, 11 Nov 10 04:18:23 +0500</pubDate>
			<dc:creator>
				<![CDATA[Salman Siddiqui]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75077</guid>
			<description>
				<![CDATA[The MQM chief opposes the imposition of the RGST, while the cabinet approves it along with the flood tax.]]>
			</description>
			<content:encoded>
				<![CDATA[Muttahida Qaumi Movement (MQM) chief Altaf Hussain has called for the withdrawal of the Reformed General Sales Tax (RGST).

In a telephonic address to party workers at the Lal Qila Ground in Azizabad on Wednesday, he strongly criticised the federal cabinet’s decision to impose new taxes in the country as “not only cruel, but also unjust.”

“Oppressed and downtrodden people are already forced to live under the heavy burden of inflation on essential items; the imposition of the RGST will result in a tsunami of price hikes,” Hussain said.

He regretted that instead of bringing the income of feudal lords and influential people under the tax net, introducing tax reforms in the country and stopping “corruption of billions of rupees,” an additional burden was being put on the public. People who evade taxes are benefitting and those already oppressed are being burdened more, he alleged.

He criticised the government for its failure to control corruption in the country. “Whether it is a provincial or federal government department, there is uncontrolled corruption,” Hussain said.

The MQM chief claimed that the rate of suicide is skyrocketing as people are unable to make ends meet. He asked whether the cabinet’s decision to impose the RSGT and flood surcharge would affect those who had amassed ‘ill-gotten wealth’ or ordinary people.

Hussain appealed to the “patriotic people” of Pakistan, students, peasants, labourers, and salaried people to stop supporting political parties which loot and plunder national wealth.  He claimed that it was only the MQM that talks about ridding the country of corruption.

MNA Haider Abbas Rizvi elaborated on his party chief’s statement and said the MQM would neither support the RGST nor the flood tax bill expected to be tabled in the National Assembly and provincial assemblies in the current session. He said that according to the federal cabinet’s approved measure, 16 per cent additional tax will be placed on people immediately. Rizvi pointed out implementation flaws in the RGST and warned that the economy will suffer. However, in a possible indication of keeping the door of negotiations open, Rizvi said: “No final decision has been made yet, but the party will oppose the (RGST and flood tax) bills.”

The MQM has 25 seats in parliament, said MNA Waseem Akhtar. If other opposition parties like the PML-N, who have indicated that they will not support the federal government’s move to impose the tax, support our stance then there is no way the bill can pass, he said. “But even if we end up without any other party’s support and are not able to stop the passage of the bill, we will oppose it,” he added.

Earlier, in his telephonic address that was beamed to 31 locations across the country, Hussain demanded that the government stop arresting and killing political leaders in Balochistan.

Published in The Express Triune, November 11th, 2010.]]>
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			<title>Price hike: Opposition raises uproar</title>
			<link>https://tribune.com.pk/story/75489/price-hike-opposition-raises-uproar</link>
			<comments>https://tribune.com.pk/story/75489/price-hike-opposition-raises-uproar#comments</comments>
			<pubDate>Thu, 11 Nov 10 03:42:45 +0500</pubDate>
			<dc:creator>
				<![CDATA[irfan.ghauri]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75489</guid>
			<description>
				<![CDATA[Opposition pressed govt to let it move a resolution in the NA for a vote against price hike in the country.]]>
			</description>
			<content:encoded>
				<![CDATA[The rejuvenated opposition, playing tactfully, put the government on the back-foot on Wednesday by consistently pressing it to let it move a resolution in the National Assembly for a vote against price hike in the country – a move that could prove embarrassing for the treasury benches.

Divided opposition parties like Pakistan Muslim League-Nawaz and Pakistan Muslim League-Quaid joined hands in the lower house of parliament and started pressing the Speaker to allow them to move a resolution instead of having a general debate on price hike.

The opposition also vowed to resist the government’s plan to table a bill in parliament for a flood-tax. The resistance from opposition is likely to plunge the cash-starved government into a difficult position regarding the rehabilitation and reconstruction process in flood-hit areas.

“The only way the government can pass such a legislation is if it opts to throw us out … there is no other way,” said Chaudhry Nisar, the leader of the opposition, while referring to cabinet’s decision of imposing a one-time flood tax to generate additional resources for flood survivors.

“Put up or Shut Up” were the remarks of an enraged Chaudhry Nisar who, along with combined opposition stood up and chanted slogans in support of their demands. The uproar on the issue consumed at least three hours with the two sides making no headway on the issue.

As arguments over the issue intensified, many treasury members left the assembly, leaving the field wide open for the opposition. In either case, winning or losing a vote on such a resolution can provide the opposition a tool to further castigate the government.

After a heated debate, Speaker of the National Assembly Dr Fehmida Mirza came to the government’s rescue by abruptly adjourning the session to save the treasury benches from a possible embarrassment.

Opposition stands with Marvi

The Leader of the Opposition also raised the issue of Marvi Memon’s dislodging from her apartment in the Parliamentary Lodges. Deputy Speaker Faisal Karim Kundi promised to conduct an inquiry into the incident.

FM promises briefing

Foreign Minister Shah Mahmood Qureshi also promised to take the National Assembly into confidence over the recent Pakistan-US strategic dialogue. Qureshi also shared the concerns of opposition members over President Obama’s announcement of supporting India’s bid for permanent seat in the UN security council.

Published in The Express Tribune, November 11th, 2010.]]>
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			<title>Sindh to fix price at Rs61 per kg</title>
			<link>https://tribune.com.pk/story/75524/sindh-to-fix-price-at-rs61-per-kg</link>
			<comments>https://tribune.com.pk/story/75524/sindh-to-fix-price-at-rs61-per-kg#comments</comments>
			<pubDate>Thu, 11 Nov 10 03:38:57 +0500</pubDate>
			<dc:creator>
				<![CDATA[Hafeez Tunio]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75524</guid>
			<description>
				<![CDATA[Govt of Sindh decided to acquire 70,000 tons of sugar on an emergency basis.]]>
			</description>
			<content:encoded>
				<![CDATA[The Government of Sindh has decided to acquire 70,000 tons of sugar from the Trading Corporation of Pakistan (TCP) on an emergency basis and sell it in the market at Rs61 per kilogramme.

The decision was made at a meeting held on Wednesday at the Sindh Chief Minister House to discuss the rising prices of essential commodities, including sugar, in Sindh. Sindh Chief Minister Qaim Ali Shah took serious notice of hoarding and black marketing of sugar and ordered all district coordination officers (DCOs) to act against the culprits.

Sources privy to the meeting told The Express Tribune that the meeting was informed that 3.75 million tons of sugar stocks were available in the TCP’s warehouse but no dealer was willing to acquire sugar from them. “The Punjab government will be provided 0.15 million tons of sugar while Sindh will be provided 70,000 tons,” sources said.  Sources said that the TCP would provide sugar to dealers at Rs56 per kg, which will then be sold in the market at Rs61 per kg.

Speaking at the meeting, Shah said that it was the responsibility of all DCOs and their staff to be vigilant against illegal profiteering so that people were not looted.

Shah said that DCOs were incharge of their respective districts as far as price control cells were concerned. He said that it was the prime responsibility of the government and its agencies to ensure proper and prompt control of prices of essential commodities.

He directed that hoarders, black marketers and profiteers should be fined and a charge-sheet be produced against them. He said that they must be apprehended under the Price Control Act and the anti-hoarding and profiteering law, for which executive district officers (EDOs) and inspectors must launch immediate action.

He told all DCOs that he would hold a meeting with them through video-conferencing at 2 pm on Thursday and asked them to be present in their offices. In the meeting, he said, he will inquire about the action taken so far.

It was decided that all DCOs will immediately present their requirements and give details about disbursement.

Published in The Express Tribune, November 11th, 2010.]]>
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			<title>PM's Labour Day announcement: Another promise goes unfulfilled</title>
			<link>https://tribune.com.pk/story/75342/another-promise-goes-unfulfilled</link>
			<comments>https://tribune.com.pk/story/75342/another-promise-goes-unfulfilled#comments</comments>
			<pubDate>Thu, 11 Nov 10 03:34:23 +0500</pubDate>
			<dc:creator>
				<![CDATA[saleha.rauf]]>
			</dc:creator>
			<category><![CDATA[Punjab]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75342</guid>
			<description>
				<![CDATA[PM announced on Labour Day that minimum wage for the unskilled to be Rs7,000, the implementation still seems far away.]]>
			</description>
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				<![CDATA[A 16-year old working in a shop, a former hospital aaya who now works as domestic help and a middle aged guard have one thing in common despite the difference in age and experience: All of them do not get the minimum wage that was promised by Prime Minister Gilani in May this year.

Aijaz who works in a shop in a shopping mall on The Mall Rs5,000 per month. He works e whe wo10 hours a day and gets one meal on the job. Eid brings with it a bonus of Rs3,000.

Masi Nazeeran works in a house in Muslim Town. She is paid Rs4,000 for the work she does from 8 am to 5 pm, six days a week.

This is the maximum she has made in the 6 years she has worked as a maid.

Ali, a guard of a private firm, said, “I get Rs7,500 monthly, for working 10-hour shifts, six days a week.”

Prime Minister Yousaf Raza Gilani had announced on Labour Day that the minimum wage for the unskilled would be Rs7,000. However, the implementation still seems far away.

Farooq Tariq, the spokesperson of the Labour Party Pakistan, said, “Almost 70 per cent labourers in factories are getting less than the minimum wage fixed by the government. Those who are paid Rs7,000 work for 12 hours instead of 8, which again is not implementing the order because they do not get paid overtime.” Tariq added that the lack of implementation was because “there is no body to enforce the order”. “The chief minister’s aversion to labour unions in factories also makes the exploitation of workers easy,” he said.

“The government only notifies a few factories when the minimum wage is revised. It is just an announcement. There is no implementation,” said the National Trade Union Federation general secretary Niaz Khan.

“In 2003, the then chief minister Chaudhry Pervaiz Elahi took away the Labour Welfare Department’s powers to inspect factories. The government has changed but that ban is still on,” he added.

Khan said that the Punjab Labour Minister Ashraf Sohna inspected two factories – one in Chiniot and the other in Daroghawala – with the help of the police after the factory owner did not let him enter the premises. “Now the factory owner has filed a case against officials of the labour ministry in September 2010,” the general secretary said.

Hajra, who works at a hosiery factory on Ravi Road, is paid Rs200 per day for an 8-hour shift. Out of this she spends Rs60 on commuting. According to her, “The money I make barely puts food on the table. For all other expenditure, I seek Zakat or ask some people I know for financial help.”

Aima Mehmood, the Working Women Organisation director said, “Most of the factories do not issue appointment letters and the unregistered worker can be exploited easily.”

District Officer Labour, Zaigham Abbas Mazhar, said that his hands were tied unless the workers decided to stand up and fight.

“We can only take action if somebody files a written complaint against their employer. When we have a complaint, we file a case and prosecute,” Mazhar said.

But most of the workers do not want to complain because that means they won’t have the job, even the one that pays less than the promised Rs7,000. “I’m afraid of being dismissed if I demand a fair wage or complain. Then where will I go?” said Ali.

Published in The Express Tribune, November 11th, 2010.]]>
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			<title>CCP unearths cartel in sugar industry</title>
			<link>https://tribune.com.pk/story/75512/ccp-unearths-cartel-in-sugar-industry</link>
			<comments>https://tribune.com.pk/story/75512/ccp-unearths-cartel-in-sugar-industry#comments</comments>
			<pubDate>Thu, 11 Nov 10 03:31:08 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75512</guid>
			<description>
				<![CDATA[Sugar barons fleecing consumers by making cartels at three different tiers, making them liable for maximum penalty.]]>
			</description>
			<content:encoded>
				<![CDATA[Sugar barons are fleecing consumers by making cartels at three different tiers, which makes them liable for the maximum penalty, says the findings of the Competition Commission of Pakistan (CCP).

Official sources told The Express Tribune that according to the provisional order of the CCP, the Pakistan Sugar Mills Association (PSMA) had made a three-tier cartel in the industry. However, the CCP cannot make its order public as the PSMA has obtained a stay order from the Sindh High Court (SHC), which is present in the Registrar’s Office.

Sources said that violation of the anti-trust law makes the PSMA liable for a penalty of Rs75 million or 10 per cent of the annual turnover, whichever is higher. However, PSMA President Iskandar Khan was not available for comment.

In 2009, the CCP initiated an investigation against allegations of cartelisation in the sugar industry and submitted the order in the SHC in July 2010. The PSMA challenged the CCP’s proceedings in court and obtained a stay order. The CCP then challenged the stay  order in the Supreme Court, which allowed the CCP to submit a report in the SHC but restrained it from issuing a final order.

The CCP’s investigation proves the presence of a strong sugar mafia in the country. Despite ample availability of sugar, it is being sold at Rs125 to 135 per kilogramme against a production cost of less than Rs55 per kg.

Information Minister Qamar Zaman Kaira admitted on Wednesday that 725,000 metric tons of sugar were still available, which was more than the amount required for two months. Without confessing his government’s inability to arrest the culprits, he said that there was no shortage of the commodity but certain influential people were involved in hoarding.

“The record that was confiscated during raids on the offices of the PSMA proved that the members of the association colluded with each other and fixed a minimum support price – a rate at which they bought sugarcane from farmers,” official sources said on the condition of anonymity.

At a second tier, sources said, mill owners submitted joint bids to the Trading Corporation of Pakistan (TCP) for import of sugar, which was designed to keep the strategic reserves. But, the PSMA members foiled the move.

At the third tier, the provisional order states, the government too got involved in the cartelisation as it negotiated with the PSMA to fix sugar prices, which is against the spirit of free market and open competition.

CCP Chairperson Rahat Kaunain Hassan said that the matter was sub judice in a court that “restricts her from commenting on the provisional order”. Responding to a question on the ongoing sugar crisis, Hassan said that the CCP was not responsible for regulating prices. However, “the CCP is closely monitoring the crisis and if collusive behaviour is found, we would take action against those responsible.”

Published in The Express Tribune, November 11th, 2010.]]>
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			<title>Flood tax, RGST get cabinet nod</title>
			<link>https://tribune.com.pk/story/75523/flood-tax-rgst-get-cabinet-nod</link>
			<comments>https://tribune.com.pk/story/75523/flood-tax-rgst-get-cabinet-nod#comments</comments>
			<pubDate>Thu, 11 Nov 10 03:29:28 +0500</pubDate>
			<dc:creator>
				<![CDATA[zia.khan]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75523</guid>
			<description>
				<![CDATA[Federal cabinet approves bill to overhaul tax regime primarily to rebuild flood-hit areas.]]>
			</description>
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				<![CDATA[The federal cabinet approved on Wednesday a bill to overhaul the tax regime, besides announcing new tax measures of Rs69 billion, primarily to rebuild flood-hit areas, initiating a process of ‘correcting past mistakes’.

Economists said that the move is likely to pave the way for the withdrawal of exemptions.

However, the Reformed General Sales Tax (RGST) bill and a one-time flood tax apparently do not have the support of major coalition partners and is also being opposed by key opposition party PML-N, which has a strong vote bank in the traders’ community.

Allied parties remained wary of the new tax and major coalition partners like the Muttahida Qaumi Movement (MQM), Awami National Party (ANP) and Jamiat Ulema-i-Islam-Fazl (JUI-F) expressed reservations, insisting that they had not been taken into confidence on the bill.

The measures are designed to broaden the tax base by netting exempted sectors and charging all income groups at a rate of 10 per cent of their payable liability.

The government has also doubled the rate of federal excise duty on all non-essential and luxury imports, including cigarettes and cosmetics. The passage of the bill will enable the government to tax 198 services.

However, Sindh and Punjab still have to sort out differences on the issue of the right to receive revenues on seven services, including ports, export and imports.

Briefing reporters after the cabinet meeting, Finance Minister Dr Abdul Hafeez Shaikh said a salient feature of the Reformed-General Sales Tax (RGST) is that there will be a uniform sales tax rate of 15 per cent, instead of rates ranging between 17 and 26 per cent.

He said the RGST would be implemented from January 1 next year and may enable the government to earn Rs30 billion in the remaining six months of the current fiscal year.

“The government has decided to levy a one-time flood surcharge at the rate of 10 per cent of payable tax on all income groups which will generate Rs28 billion,” said Dr Shaikh.

He said a person earning Rs25,000 per month will pay an additional tax of Rs30 a month while a company earning Rs10 billion annually will pay an additional Rs170 million.

He said by increasing special excise duty rate from one per cent to two per cent, the government would generate additional Rs11 billion in the same period.

Chairman of the Federal Board of Revenue Sohail Ahmad said that the draft legislation has proposed to withdraw tax exemptions on domestic sales of five export-oriented sectors, including garments, leather, surgical goods and support goods. He said the government has also proposed to withdraw tax exemptions on the sale of fertiliser and tractors.

Sharing details of the meeting with the media, Information Minister Qamar Zaman Kaira tried to dispel an impression that the bill was being stormed through parliament.

Meanwhile, political opponents of the government said that the bill was introduced in parliament without consent and they simply could not blindly support it.

There were also fears that at least one federating unit might still not be in favour of RGST because it did not want to allow the federal government’s agencies to collect sales tax on certain services on its behalf.

These apprehensions stemmed from a statement by the Muttahida Qaumi Movement’s (MQM) parliamentary leader in the National Assembly that his party wanted more brainstorming before approving such an important legislation.

Kaira said the introduction of the R-GST would help Pakistan’s bid to put its economy on the path of self-reliance by broadening the tax base.

International lenders have been urging Pakistan to reform its taxation regime and power sector tariffs as a prerequisite for continuing support for the country’s ailing economy.

International donors plan to hold a crucial meeting with Pakistani economic managers from November 14. The government appears to have rushed the tabling of this bill to meet a key demand by members of the Pakistan Development Forum (PDF).

Crackdown on hoarders

The cabinet has also given a free hand to intelligence and law-enforcement agencies to move against millers and wholesalers allegedly involved in hoarding sugar in anticipation to earn more profits.

But Interior Minister Rehman Malik said his agencies would now hunt hoarders and millers would be pushed for kick-starting the crushing season.

“You will not like my boys raiding your premises … so bring sugar stock into the market,” Malik warned hoarders. (WITH ADDITIONAL REPORTING BY SHAHBAZ RANA)

Published in The Express Tribune, November 11th, 2010.]]>
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			<title>Stern measures await tax evaders</title>
			<link>https://tribune.com.pk/story/75522/stern-measures-await-tax-evaders</link>
			<comments>https://tribune.com.pk/story/75522/stern-measures-await-tax-evaders#comments</comments>
			<pubDate>Thu, 11 Nov 10 03:24:14 +0500</pubDate>
			<dc:creator>
				<![CDATA[rauf.klasra]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75522</guid>
			<description>
				<![CDATA[Those involved in tax fraud will be put on trial and awarded a jail sentence of up to five years.]]>
			</description>
			<content:encoded>
				<![CDATA[Those involved in tax fraud and default under the new Reformed General Sales Tax (RGST) regime will be put on trial and awarded a jail sentence of up to five years by special judges in addition to a cash penalty of Rs500,000, or one hundred per cent of the amount of tax involved – whichever is higher.

According to a 62-page bill set to be tabled in the Parliament to introduce broad-based tax on sales and purchase of goods across Pakistan, the federal cabinet has agreed to give powers to the Federal Board of Revenue (FBR) – which will be able to appoint special judges empowered to punish everyone found guilty of breaching the new tax act after it is enacted.

The FBR can appoint as many judges as it deems necessary, but they must be a sessions judge.

According to a copy of this bill obtained by The Express Tribune, which was approved by the cabinet on Wednesday, an officer of inland revenue not below the rank of an assistant commissioner after prior permission from a special judge, may arrest for prosecution any person believed to have committed tax fraud or offences liable to be prosecuted in accordance with provisions of the criminal procedure code.

According to the penalties proposed in the new act, were a company believed to have committed tax fraud, every director or officer of such company suspected or believed to have been personally responsible for the commission of such tax fraud, may be arrested and such arrests shall not absolve the company from any tax liability or other obligations under this act.

The bill reads that anyone found involved in committing – or causing to commit, or attempting to commit, or even abetting – tax fraud will be liable for a fine and/or imprisonment upon conviction by a special judge.

The minimum penalty on failure to obtain registration or noncompliance of compulsory registration has been proposed at Rs100,000. Late filing or non-filing will be punishable with Rs5,000 provided that if a return is not filed within 15 days of the due date, a penalty of Rs100,000 for each day of default shall be paid.

Failure to issue tax invoice will be punishable with Rs5,000 or three per cent of the amount of tax involved. Failure to notify a change of address or increase in business capacity of material nature in the particulars of registration would be punishable with Rs50,000.

Failure to deposit the tax will  be punishable with Rs10,000 or five per cent of the tax involved. Ten thousand rupees is the fine for non-maintenance or defective maintenance of record.

The bill also says that failure to furnish any information required under this act will be punishable with Rs10,000. Any person who submits a false or forged document to the board or makes a false statement will be punishable with Rs25,000 or one hundred per cent of the amount tax involved and may also be convicted in jail.

Anyone who denies or obstructs the access of any officer of inland revenue to the business premises or registered office, will be fined Rs25,000 or 100 per cent of the amount of tax involved and a conviction. Anyone obstructing an officer of inland revenue in the performance of his official duty is also liable to the same action.

Failure to fulfill any of the conditions, limitations or restrictions specified or prescribed in a notification issued under any provision of this act will be punished with Rs5,000 or three per cent of the amount of tax involved, whichever is higher.

Whosoever submits fake documents to claim tax refund will be fined Rs50,000 and five years jail.

Failure to withhold tax as required under any provision of this act will be punished with Rs10,000 or three per cent of the tax, whichever is higher. Repetition of an offence for which a penalty is provided under this act shall be twice the amount of the initial penalty.

Any person who repeats erroneous calculation in the return whereby the amount of the tax is less than the actual due amount of the tax will be fined Rs5,000 or three per cent of the amount of tax involved, whichever is higher. Any person who fails to make payment in the manner prescribed under this act shall be fined with Rs5,000.

Punishments have also been proposed for the officers authorised to act under this act.

Any act that causes a loss in sales tax revenue or otherwise abets such an act, shall be liable to conviction by a special judge for three years in jail or with a fine which may be equal to the amount of the tax involved.

A one-year jail term has also been proposed for persons who gain access to or attempts to gain access to the computerised system.

Published in The Express Tribune, November 11th, 2010.]]>
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			<title>Curbing inflation, poverty</title>
			<link>https://tribune.com.pk/story/75445/curbing-inflation-poverty</link>
			<comments>https://tribune.com.pk/story/75445/curbing-inflation-poverty#comments</comments>
			<pubDate>Thu, 11 Nov 10 02:25:41 +0500</pubDate>
			<dc:creator>
				<![CDATA[express]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75445</guid>
			<description>
				<![CDATA[Experts, rights activists, economists suggest greater investment in agro-based industries, consistency in policies.]]>
			</description>
			<content:encoded>
				<![CDATA[Development experts, rights activists and economists at a discussion on Wednesday called for increased investment in agro-based industries and consistency in policies to tide over high inflation and poverty.

They attributed the alarming rise in suicide incidents and other social ills to high inflation and uneven distribution of resources.

The discussion on the impact of inflation on people was organised by the Women Action Forum (WAF) at the South Asian Free Media Association (SAFMA) office.

Noted writer, poet and independent development expert Harris Khalique, agriculture economist Dr Mohammad Azeem and Head of Trade Policy, ActionAid Aftab Alam were among the participants of the discussion.

They said poor management of the economy and lack of value addition in production were exacerbating inflation in the country.

“Considering the current level of inflation, government should stop exporting food items and use its resources at the maximum level for the betterment of people. Our resources are being wasted due to faulty policies,” they said.

Flood survivors are dying due to hunger and the government is busy in purchasing F-16s, they lamented.

Speaking on the occasion, Harris Khalique, adviser to the National Disaster Management Authority (NDMA) held global commodity pricing, surge in oil prices, deregulation and liberalisation of economy, population explosion and poor agricultural growth responsible for high inflation and poverty.

“For the past 15 years there has been no growth in agriculture in our country,” he said.

Khalique also said that a large number of youth was unemployed and if inflation continued in the same pattern, they would be compelled to indulge in social ills. “There is no second opinion about the fact that unemployment coupled with skyrocketing inflation breeds crime,” he said.

The social activists added that 50 per cent of children in the country were not enrolled in schools.

Highlighting the government’s management of flood, Aftab Alam said that it was not focusing on the ‘right areas’ for rehabilitation of the affected people.  “There are many people living in camps who did not have the money to go back to their homes. Children are being abused and women are being trafficked to other areas,” he said while explaining the lack of security and mismanagement at the relief camps.

Stressing the need for better planning for the agriculture sector, he said that the government was distributing wheat among producers who actually needed oilseeds or other crops. Similarly, every province has its own needs and demands as far as agriculture was concerned. These should be catered to accordingly, he maintained.

According to Alam, government needed to come up with a long-term livelihood programme for the growers, rehabilitating irrigation system, redistributing livestock and poultry and empowering women. “Proper water management and price control mechanism should also be introduced and more importantly monitored,” he stressed.

Mohammad Azeem said the current inflation had given rise to malnutrition and food insecurity in the country.  “There is no concept of nutritional poverty in the country,” he added.

The subsidy on wheat is not at all benefiting the producers or the consumers but the middle man.

He said currently the people of Pakistan are facing iron, protein and calcium deficiency as “they cannot afford to purchase food rich in these nutrients.”

He said about 24-25 per cent people in the country had iron deficiency, 11-14 per cent were calcium deficient and about 85 per cent were lacking in Vitamin-A.

He further said social security net programs are of no use in the country.

Published in The Express Tribune, November 11th, 2010.]]>
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			<title>Iranian restrictions may hit kinnow exports</title>
			<link>https://tribune.com.pk/story/75403/iranian-restrictions-may-hit-kinnow-exports</link>
			<comments>https://tribune.com.pk/story/75403/iranian-restrictions-may-hit-kinnow-exports#comments</comments>
			<pubDate>Wed, 10 Nov 10 20:45:15 +0500</pubDate>
			<dc:creator>
				<![CDATA[kashif.hussain]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75403</guid>
			<description>
				<![CDATA[Pakistan to lose out on 80,000-100,000 tons of exports if Iranian market remains closed.]]>
			</description>
			<content:encoded>
				<![CDATA[Kinnow exports have started this month as more than 500 tons of the fruit were exported to Dubai and Sri Lanka in the first 10 days of November.

The kinnow export target for the current year is 260,000 tons, which is only 10,000 tons more than last year’s target of 250,000 tons. The target last year was met successfully.

Explaining this slight increase in the export target, Waheed Ahmed, the former chairman of the All Pakistan Fruit and Vegetable Exporters Importers and Merchants Association, said that kinnow production declines in the year after a bumper crop. The country witnessed a bumper crop last year of two million tons, he informed, adding that production this year is expected to be between 1.6 and 1.7 million tons.

He also explained that due to heavy rainfall this year, the size of the fruit is expected to be very large but demand from Europe and Russia is for smaller sized fruits.

Despite the slight increase in the export target in light of these facts, the target itself presents a challenge since the Iranian market remains closed this year, explained Ahmed.

Iran, along with the Middle East and Far East, is the country’s largest export market for kinnow and almost 40 per cent of exports end up in these markets, he said, adding that Iranian restrictions for its importers are presenting a challenge for kinnow exporters.

The Iranian government has not granted permission to its importers yet, he informed and said that the issue needed to be resolved between respective governments.

Ahmed said that if the Iranian market remained closed, then the country will lose out on 80,000-100,000 tons of kinnow exports.

Kinnow exports to Russia are also expected to halve in volume from last year’s size of 78,000 tons to this year’s expected export of 40,000 tons.

Ahmed also said that increasing costs of production have become a problem for exporters. A 30 per cent rise in packaging and transportation costs have meant that prices of kinnows at the start of the season have increased from Rs300 per maund last year to Rs500 per maund this year, he said.

Published in The Express Tribune, November 11th, 2010.]]>
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			<title>Sugar price manipulation</title>
			<link>https://tribune.com.pk/story/75263/sugar-price-manipulation</link>
			<comments>https://tribune.com.pk/story/75263/sugar-price-manipulation#comments</comments>
			<pubDate>Wed, 10 Nov 10 17:40:22 +0500</pubDate>
			<dc:creator>
				<![CDATA[editorial]]>
			</dc:creator>
			<category><![CDATA[Editorial]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=75263</guid>
			<description>
				<![CDATA[In order to bring prices to normal levels, collusion within the sugar industry must be effectively banned.]]>
			</description>
			<content:encoded>
				<![CDATA[The influence of industrial lobbyists on the government appears to be getting out of hand. The latest example of this is the rapid rise in sugar prices, an increase severe enough to have a noticeable effect on the overall measure of inflation: the consumer price index. While consumers struggle to cope with the rising prices shrinking the purchasing power of their incomes, the government seems content with taking only cosmetic measures.

The Competition Commission of Pakistan (CCP), the regulatory body charged with preventing collusive behaviour amongst industrial groups, has on more than one occasion pointed to oligopolistic behaviour amongst the sugar industry. It is alleged that the sugar industry creates deliberate shortages of supply by hoarding sugar in large warehouses in a bid to create an artificial price increase. Consumer lobbyists allege something further: that the Trading Corporation of Pakistan was pressured to deliberately mistime its purchases of sugar in order to ensure higher import prices so that domestic prices remain high. These are serious allegations indeed and given the CCP’s earlier misgivings and litigation regarding the sugar industry, they deserve to be investigated.

We would also like to point out some of the techniques that the government has used in the past to create the illusion of action. Perhaps the most commonly used one is that of price controls. Even the courts have been persuaded to establish a legally binding price at which it is declared that a given commodity must be sold. The problem with this approach is that, to the common man, it sounds like a solution whereas it does absolutely nothing to address the underlying problem. As proof, sugar is retailing for Rs120 per kilogramme when its legally mandated price is Rs45 per kilogramme. Prices are not high simply because the sugar industry deems it so. They are high because market conditions have been manipulated to force buyers to pay more. The difference may seem subtle, but it is critical. In order to bring prices to normal levels, collusion within the sugar industry must be effectively banned. It is time for the government to swing the regulatory bat of the recently passed Competition Act.

Published in The Express Tribune, November 11th, 2010.]]>
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			<title>G-B’s corporations, not people to be taxed: Baig</title>
			<link>https://tribune.com.pk/story/74846/g-b%e2%80%99s-corporations-not-people-to-be-taxed-baig</link>
			<comments>https://tribune.com.pk/story/74846/g-b%e2%80%99s-corporations-not-people-to-be-taxed-baig#comments</comments>
			<pubDate>Wed, 10 Nov 10 04:30:50 +0500</pubDate>
			<dc:creator>
				<![CDATA[shabbir.mir]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=74846</guid>
			<description>
				<![CDATA[Taxes will not be levied on the economically challenged people of G-B and corporate organisations will be taxed.]]>
			</description>
			<content:encoded>
				<![CDATA[Taxes will not be levied on the economically challenged people of Gilgit-Baltistan and corporate organisations will be taxed, the acting governor of Gilgit-Baltistan, Wazir Baig, said.

“It will be a corporate tax and will not be levied on the people of Gilgit-Baltistan,” the governor clarified to The Express Tribune on Tuesday when contacted. The people are not very rich and their being taxed will not increase the resources of the region.

Last week, a computer error in the pay slips of some government officials had led to the deduction of three per cent ‘income tax’ from their salaries. The Accountant General Pakistan Revenues (AGPR) later clarified the situation, saying that it was a mistake and that the officials would be paid back the deducted amount next month. However, politicians, especially nationalists leaders, vehemently opposed it and termed it as unconstitutional because Gilgit-Baltistan is not a part of Pakistan as per the constitution.

“It may be like taxing the multinational companies working in the region in the telecom sector,” said Baig when asked to explain about the corporate tax. Baig is currently looking after the region’s affairs as Gilgit-Baltistan’s governor after the death of the Dr Shama Khalid.

He said that the issue of taxes would not be debated in the assembly. "We will discuss the issue once we get the minutes of the meeting which was held with the Prime Minister Yousaf Raza Gilani."

Sources said that the prime minister had in principle agreed that taxes would be imposed but the terms are yet to be decided, such as the items and whom it would be imposed on.

"We are analysing the system before imposing it formally," said the region's Finance Minister Muhammad Ali Akhtar on Tuesday. "Everything is being done in the best interest of the people and the region," he said.

Published in The Express Tribune, November 10th, 2010.]]>
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			<title>Federal budget faces major squeeze</title>
			<link>https://tribune.com.pk/story/74890/federal-budget-faces-major-squeeze</link>
			<comments>https://tribune.com.pk/story/74890/federal-budget-faces-major-squeeze#comments</comments>
			<pubDate>Wed, 10 Nov 10 03:22:33 +0500</pubDate>
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				<![CDATA[Shahbaz Rana]]>
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			<category><![CDATA[Pakistan]]></category>
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				<![CDATA[Government considering applying a major cut of Rs330 billion, levying time-bound regulatory duties.]]>
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				<![CDATA[The government is contemplating executing a major cut, to the tune of Rs330 billion, in the federal budget and levying time-bound regulatory duties on imports to create fiscal space for undertaking flood-zone reconstruction.

Finance ministry sources said that the proposed plan stipulates over a Rs200 billion cut on development spending to divert money to flood-related expenditure and limit the budget within the available fiscal envelope.

The cut is primarily to be applied on ongoing projects, social safety nets and rehabilitation programmes for internally displaced persons affected by the military operation in the Malakand Division launched in 2009.

The current expenditure allocation, at present pegged at Rs1.97 trillion, is proposed to be slashed by Rs127 billion through transferring certain responsibilities to the provincial governments. However, an official of the finance ministry’s budget wing said that this transfer will not have any effect on the size of the national budget.

“There is no room to cut the current expenditure as interest  spending has increased due to a rise in interest rates while defence expenditures are bound to climb further,” said the official.

Pakistan is being pushed by the international community to generate additional resources or create a space from within instead of looking towards taxpayers of other nations.

Pakistan requires at least Rs578 billion over three to four years to rebuild the flood-ravaged areas, according to Secretary Planning Ashraf Hayat.

Subject to parliament’s approval, the size of the federal budget will be around Rs2.43 trillion against the approved budget of Rs2.76 trillion for the ongoing fiscal year 2010-11.

The federal government is pushing the provincial governments to slash their development budgets by a collective Rs143 billion and bring them down to Rs230 billion. If the provinces agree, the total size of the budgets, including provinces, will still hover around Rs3 trillion, as some of the current expenditures cut by the federal government will be reflected in the provincial budgets. The total size of the approved budgets is Rs3.3 trillion.

Another senior government functionary involved in the budget readjustment exercise said that the final cut would be dependent upon the budget deficit target that is proposed to be at Rs869 billion or 4.7 per cent of the total size of the economy. The International Monetary Fund has informally allowed Pakistan to take the deficit to 4.7 per cent of GDP, which is 0.7 or Rs184 billion more than the target agreed to in the pre-flood scenario.

According to the proposal, the authorities will slash development spending by Rs140 billion, bringing the uplift budget down to Rs150 billion.

The Benazir Income Support Programme (BISP) budget may be cut by Rs28 billion. The total available budget is likely to hover around Rs42 billion against an earlier allocation of Rs70 billion.

This may not significantly affect the social safety net programme, as because of administrative weaknesses the programme could not be extended to the targeted beneficiaries. According to the BISP website, the total beneficiaries are slightly over 3 million against a target of 7 million.

The government is also likely to cut the IDP budget by Rs35 billion. It had approved Rs53 billion for the affected persons.

The authorities are facing difficulties in achieving the revenue target and are contemplating over Rs51 billion worth of revenue-generating measures.

On the revenue side, the government has informed the IMF that it may impose a 3 per cent special regulatory duty on commercial imports and 2 per cent on non-commercial imports for a period of three years, said an official of the Federal Board of Revenue. The duties are part of the Reformed General Sales Tax package that will help generate Rs13 billion in six months if the new tax goes into effect from December 1.

The sources said the authorities are again considering levying flood surcharge at a rate of 10 per cent on all income groups. Finance Minister Hafeez Shaikh had earlier stated that the flood surcharge rate would be less than 10 per cent.

The government is also considering increasing the ex-factory sugar rate to Rs65 per kilogramme from the outdated rate of Rs28 per kg. In order to calculate the sales tax on sugar, the government is still using the Rs28 per kg benchmark at a time when sugar is sold at over Rs120 per kg. The change will be made through a notification and will help generate Rs3.5 billion in six months.

Depending on provincial consent, the government is still considering generating Rs34 billion by implementing the reformed GST regime from December 1. The new tax collection target is likely to be Rs1.655 trillion. If the government remains unable to levy the RGST, special regulatory duties and flood surcharge then the tax target would be Rs1.6 trillion.

Published in The Express Tribune, November 10th, 2010.]]>
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			<title>Price rises by Rs30 in less than a month</title>
			<link>https://tribune.com.pk/story/74730/price-rises-by-rs30-in-less-than-a-month</link>
			<comments>https://tribune.com.pk/story/74730/price-rises-by-rs30-in-less-than-a-month#comments</comments>
			<pubDate>Wed, 10 Nov 10 02:49:04 +0500</pubDate>
			<dc:creator>
				<![CDATA[manzoor.ali]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
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				<![CDATA[Dealer says main reason for sugar shortage TCP’s decision to not release its stocks.]]>
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				<![CDATA[Sugar prices have gone up by around Rs30 in the market in less than a month over the past two weeks in the provincial capital, traders said.

The price of a 50 kilogramme bag of sugar, which was Rs 3,900 in the wholesale market towards the end of the October, has now risen to Rs 5,250- an increase of Rs 1,350 per bag.

Retail prices of the commodity which was previously available for Rs 80, has now reached to Rs 110.

However, dealers predict that prices will come down as no one is willing to buy commodities at these high prices.

Mamoonur Rashid, a dealer in Rampura Bazaar, told The Express Tribune that a 50 kilogramme bag of sugar was being sold for Rs 5,250, at the rate of Rs 105 per kilogramme. Contradictory to that, a retailer told The Express Tribune that they were buying sugar at the rate of Rs 106 per kilogramme and selling it at Rs 110.

However, Rashid said that the during the coming week, prices are destined to come down, as the Trading Corporation of Pakistan (TCP) has decided to release its stocks to the market and there was less consumption in the market due to the sudden increase in the prices of the commodity.

He said that the main reason for the shortage of this commodity was the TCP’s decision of not releasing its stocks, besides the sugar mills had not yet begun the crushing of sugarcane.

“Sugar mills have no stocks left and crushing season is yet to start, prices have shot up in the local market, however, this price hike is likely to continue for a bit longer, as the approaching Eid holidays will further delay the start of the crushing season.”

However, the projection of prices for the month of December shows that prices will come down to Rs 90, after new produce arrives in the market.

Published in The Express Tribune, November 10th, 2010.]]>
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