A debate on energy issues took up most of the two and a half hours dedicated to the discussion.
KARACHI: An intense political rivalry between the Pakistan Muslim League-Nawaz (PML-N) and the Pakistan Tehreek-e-Insaf (PTI) has already done one good thing for Pakistan: it has generated serious debate on the real economic issues of the country as part of electioneering activities.
One such debate, titled ‘Pakistan’s Future Economic Outlook and Model Economic Policy’, was organised here at the Institute of Business Administration (IBA), Karachi – one of Pakistan’s premier business schools.
Asad Umer, former CEO of Engro Corporation and current senior vice president of PTI, was pitted against Dr Miftah Ismail, director of Ismail Industries and former VC and head of the Punjab Board of Investment and Trade, who has been affiliated with the PML-N.
Organisers had envisioned a debate purely on economic policies, but the discussion was bound to touch on the core policies of the PML-N and PTI, as both speakers used their parties’ names in presentations.
Other expert panellists who took part in the discussion included former State Bank governor Salim Raza and State Bank’s Chief Economic Advisor Dr Mushtaq Khan.
Solutions to the energy crisis
A debate on energy issues took up most of the two and a half hours dedicated to the discussion. Umer – who was extremely popular among the students as an IBA alum – said that almost each and every aspect of Pakistan’s economy is linked with the energy crisis, so its solution will remain on top of PTI’s economic agenda.
“The energy sector is one of the most mismanaged sectors in Pakistan,” Umer said. “With abundant energy resources – both conventional and unconventional – the biggest export of Pakistan to India should have been energy.”
“Pakistan should have established a 5,000 megawatt lignite [coal] plant in Karachi,” said Dr Ismail, while listing down the priorities of the next government. “That plant should initially be run on imported coal, and then switched to Thar Coal.”
Both speakers stressed on the need for increasing the share of coal in the energy mix, and said that any new government would have to introduce immediate reforms in the energy sector
Tax on agricultural income
On increasing the tax net, Umer said Pakistan cannot increase the tax-to-GDP-ratio unless it taxes the rich, and especially the agricultural sector. “Unless you slap taxes on the agricultural sector and the rural rich, you can never succeed in taxing the urban elite in Pakistan,” Umer said. “Both should go hand in hand.”
“If our party comes to power, we will surely tax the agriculture sector at all costs,” he added.
Participants stressed upon the fact that provincial assemblies have been reluctant to tax agricultural incomes, while the federal government has hidden behind the 18th Amendment, saying that this is now a provincial matter.
State-run enterprises
On public sector enterprises, Umer was of the opinion that one cannot solve their problems by just laying off surplus employees. “Instead of laying off additional staff, you first need to introduce basic reforms in,” said Umer. “Inefficiency is a bigger killer than the financial burden of extra salaries in all such organisations,” he observed.
Mass transit systems or investment in other projects?
Although the PTI has officially assured the nation that it will continue pursuing projects like the Lahore Mass Transit System, Umer said his party would invest in projects that provide greater economic returns to the economy.
“Rather than focus on mass transit systems, we will invest in energy projects that produce employment opportunities,” said Umer.
Ismail, on the other hand, defended the Lahore Mass Transit System and said that the first thing the PML-N government would do is to build a similar one for Karachi.
Published in The Express Tribune, March 27th, 2013.
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COMMENTS (57)
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Isn’t PMLN the very party, who couldn’t push the provincial taxation responsibility post 18th Amendment above 0.5% of GDP? In fact tax revenues as % of GDP have declined in Punjab (if I remember it correctly). If they are so scared of losing votes that they are not willing to raise tax in a single province, how will they raise the level of taxation in the whole country? And if their vision of spending on education is Danish Schools and laptop schemes, they better give this money to someone who can spend it more wisely.
@sakha: Sir go with the honest clean one. We are not to think if imran will win the election. Our thinking should be that its my duty to vote for the person who would do justice to us and is honest. Allah will ask us about the choices we make because all choices leads to decisions and every decision have consequences. You vote for the right person not the politician who u think might win. Because if u vote and thousands like you vote the clean, honest and corruption free politician, then we can make a change. 1 vote counts brothers and sisters, Ech and every vote counts if u make it count. Ik doesnt need to be the PM, he has all the fame, money and influence. We need Allah and need Allah to give us an honest, and clean leader. We need him more than anything. He is the only viable choice. He is not running the race of the fastest and strongest horse but the race of priciples and choosing candidates that can bring change and not just win seats. Please we need to suport him. For our seleves and our future.
@Irfan Sahotra: Seasoned in what brother? Please check the stats from 1990 to 92/93 and 1996 to 1999. Also please check stats of punjab from 2008 to 2013. Only after October-30-2013 jalsa of PTi did the N-league woke up and tried to do something in punjab. Before that they were busy in mukh muka and making money and yes some development here and there. In 2012 they just has one and half years to go and all they could do was big projects that show on ground so they can show t ppl and fool them to get re-elected. No economic boost was brought by the seasoned economic team of PML n in all their five temrs in punjab. Seriously, making fly overs and roads is not an economic change but using tax money on roads and using borrowed money on roads that wont return money for ages. Please re think your vote. We have tried and tested these guys before. nawaz and shahbaz might be good ppl, may be a little better than PPP but now we have a very good choice in Imran khan. He is a clean person, and no one can say negative about his character and personality. No corruption in any welfare or social / govt program. He is been trying to change pakistan through every means possible. Its our duty for our kids and our future to vote someone who is honest and not greedy and dont have greedy ppl with them. Vote Ik VOTe pakistan!
@Asad: Taxing income rather than consumption is what PTI is going for as well. But that is easier said than done in an under-documented economy like ours. In fact, the very reason to tax consumption is to bring money flowing in from black economy into the tax net. However, I agree regardless of the challenges, we need to move towards direct taxation since indirect taxes are regressive and inflationary.
@MK, yes you child i have graduated in tax law, I don't need the schooling you do, land lords pay property tax, the tax proposed is not property taxed but income tax, land lords also control the price of food you eat (for the most part, some is controlled by the govt), they will raise prices to combat the tax and in the end the poor people will suffer, get an education you clown
@M. Khawar Iqbal: Bad logic. You have to look at the opportunity cost of investment. Question is this project going to provide Pakistan the highest level of return of all the other alternatives?
@Asad: A very knowledgeable comment. Won't comment on rest of what you have stated. But to the corruption issue, I did see a report on Dawn that transparency international had raised concerns on their name being used by Punjab Govt when TI had not cleared all parts of the projects (specially a part tied to PKR 2 billion).
@Asad: with due respect sir, my comments were factually correct, i think u need to go back to check your numbers from the economic survey and the SBP. even if we ignore PML-N's tenure with the nuclear test, the earlier PML-N government Alhamdolillah posted a record high average fiscal deficit of 8% higher than that of the present government at 6%, in fact the highest in the past 20 years of available data; annual PKR deval averaged almost 9% not far off from the 11% during this government's tenure; yes, average GDP growth was higher but inflation was high at almost 11%, again not far off from 14% by this government.
@Tax: Do you have slightest Idea how Taxation works and what they are proposing??? Bringing agri sector in the network means big fish (ones who make money above a certain amount) in that sector ie (Feudals) will have to pay taxes now. If a salaried person making 30 to 50 thousand a month pays tax a landlord making 30 to 50 lacs a month should also pay tax.
@confused: ohhh pti's policiiiieeesss......... hahaha
@Hassan: so why didn't they do so in the 5 years they had?
@Asad: with all due respect sir, all my figures were factually correct, kindly check the economic survey again and rectify your perceptions. it was a surprise to me as well on first glance. even if we ignore the tenure of PML-N with the nuclear test, its earlier tenure resulted in an average fiscal deficit of 8% against this government's average of 6%, in fact that 8% was the highest during any government's term in the last 20 odd years; annual PKR deval rate of almost 9%, which was not far off from the 11% deval during this government's tenure; GDP growth was higher yes but inflation averaged 11% again not far off from this government's 14%.
@Tax - I like PML-N's approach to taxes. Tax the income not the consumption! As Dr Miftah pointed out - sales tax hurts the poor people the most! Rather than taxing a farmer's sales it maybe best to tax the farmer's inccome that way a small farmer doesnt have to pay taxes till he crosses the threshold of being eligible for income tax and the consumer isnt burdened any further by having to pay tax on food items.
I have read through the entire coverage of the debate yesterday. In newspapers as well as on twitter! Not once was the attitude of asad umer mentioned in the entire coverage. No mention of him arriving an hour late and in the most casual attire. I wonder how he felt about being the only person on stage without a tie or socks! I for one took serious offense to the gum chewing and tweeting while on stage. It just shows a lack of respect for his fellow speaker, the elite panelists, teachers and most of all the students of IBA who must have worked very hard to put on the event. His generic presentation created for all audiences, with more rhetoric than substance left a lot to be desired especially when compared to Dr. Miftah Ismail's presentation which was tailored for an audience of well read students. Asad Umer's blasé approach seemed almost condescending. For a party that is banking on youth votes it seemed that the PTI leader didnt really give the intelect of the IBA students much credence.
On the other hand, it was nice to see Dr. Miftah Ismail relating the theory that has been taught to the audience at IBA with the actual economic situation of Pakistan. Shows which party truly believes in the intelectual capacity of the Pakistani youth!
If by any stroke of luck PTI does end up governing the country I hope their approach towards governance is not as casual as their approach towards the youth that forms the core of their supporters! Vote wisely!
Agricultural tax merely not means that it is a tax on poor landowners,bt its a tax on sector providing main share in GDP,How can it be possible to ignore 1 sector n squeeze other sectors.PML-N has no vision,Taxi schemes 20 years ago same now but to make the graduates taxi drivers.buses and roads r the only vision of PMLN.y should not they open the transport business,All the other things r no need 4 them.what progress have they made in Punjab in last 5 years. 30 arab rupees could be used on energy projects becoz after 18 amendment they were free to do so. what sort of research a student can do on laptop without internet n light facility,secondly a student who can afford university fee cannot buy a laptop,health sector n poor students were the priority instead of wasting such a money of public tax,What a joke,hahahaaaa. PTI must be tested once becoz they r not corrupt,no foreign acconts n no family politics.
If you tax agriculture the poor people will be able to afford even less then they do now, PTI economic policy fails on such a basic level it is deplorable
It's a great sign to see parties debate economic policy, but would like to point out that PTI saying we will over come the energy crisis without saying how is not too convincing. Even tho the broad stroke ideas are great I just don't see how PTI can execute on their plans with the lack of a strong economic team! Although Asad Umer could probably pull it off by being minister for finance, power, commerce, petroleum and a few others. But then PTI should really stop harping on Shebaz shareef's heading up multiple ministries.
Vote will be for PTI, no for others. PTI keep it up we are with u
Having attended the event i must say it was heartwarming to see so many students take such a keen interest in the economic situation in Pakistan. And the insightful questions that were asked by the audience shows just how well institutions like IBA train their students for the future. However, the unfortunate incident where an obvious PTI supporter got up to declare Transparency International corrupt for stating that the Metro Bus project was clean and transparent left at least me wondering what PTI actually gains from such incoherrent outbursts. While the leadership is trying its levels best to present solutions to the nation's problems the average PTI supporter is abrasively yelling corruption in the face of anyone disagreeing with them hurting not only their own credibility but also that of their leadership for failing to control the rowdiness and bullying of their supporters. @confused - Actually it was PML-N who published their energy policy first and infact as Dr. Ismail stated Mr. Asad Umer was part of the energy conference that PML-N held before the publication of the policy. @irfan sahotra. PTI may not have a full 11 man cricket team but Mr. Umer definately is someone who can carry the bat. That was infact very clear from the praise and respect shown by the PML-N rep post the debate while talking to the attendees. @salman - your comments are factually incorrect. The deficit today is the highest it has ever been. The PKR depreciation was the highest during the recent economic crises. Infact all measure you have stated have made records in the recent past and not during the tenure of the PML-N. Remember that the Nuclear tests gave us a deterrent such that we wouldnt have to enter into an arms race with our much larger and much wealthier neighbors saving Pakistan enormous amount of resources @Akbar - As Dr. Ismail said the PML-N will rationalize the taxes and infact tax income not consumption which they believe to be a regressive tax so no we will not see inflation in the prices of fruits and vegetables. @Khalid Khan - Mr. Umer may "just" be an MBA but he did a fabulous job of running Engro and lets be honest we have seen more educated people make a mess of the situation already. Doubting his credentials is unfair especially for someone who has proven his worth so well over the years. @maj Can you please state how much of the loss in acreage and yields was the result of the massive floods that devasted so much of the Indus basin? and how much of it was due to unaffordable prices of diesel to run tractors and load shedding to run tubewells? I would also like to point out one error in the report published above the statement attributed to Mr. Umer regarding improving the efficiency of the PSE rather than laying off workers was infact made by Dr. Ismail. I would also point out that it may be hard to transport coal from Thar to the converted power plants up country without the motorway so in my opinion transportation and logistics infrastructure and energy projects are not mutually exclusive. The strength of a government lies in planning and running projects in parallel. A long terms strategy is not built upon sequential projects being undertaken but having the foresight to conceptualize and manage projects that come together at a later point in time to provide maximum economic benefits.
PTI has overall very small team. We only see just a single person as their economic expert. PTI needs lot more in establishing its party. While PMLN has learned a lot from past experiences and has a managed team of experts. Of course they will like to deliver if they come into power considering their chances in next elections. Otherwise they will have same fate like PPP. Any how I pray for both PTI and PML N. As we need fair and strong parties in Pakistan.
The reviewer seems highly impressed with Mr Umer - undoubtedly for sound reasons. It's never a good idea to let bias go too far though. Case in point being that it was actually Dr Ismail's observation that mismanagement is the big issue for state-run enterprises. Lets not let hero worship blind us to the facts, please!
I am not sure why this article has been captioned as "PTI, PML N lock horns over economic policies" and states that healthy debate on economic issues of Pakistan is a result of intense rivalry between PTI & PML N. I believe infact it is a result of emergence of PTI as the 3rd force in Pak politics. The intense rivalry they are referring to also existed between PML N & PPP before but of no use as their motive of politics was personal gain only. ET and other media affiliates should start applauding the positive impact of PTI on politics.
So basically this article is titled about both parties point of view but isactually just about pti and their policies?why is only one side of the debate being discussed
@Azmat Ali: And who in the world appreciates them Afghanistan, Somalia.
Now that's what we call healthy competition. Even though I have Sharif brothers but I must admit, atleast they are playing well, and PTI has literally changed the thinking of PML-N after October 30. Prior to that they only talked about. "Zardari ko tang dein gay" yellow cab scheme" motorway". OH I am sorry. they still talk about peeli taxi sasti roti danish school metro bus and economic project. hahaha.
Important: No one is talking about role of IMF (the devil force) in our country.
We cannot succeed until IMF is kicked out of the country. That will make US very upset, so do we the guts to do that.
Also need to discuss what to do with Gawadar port, why should China or any other country run it for us.
What to do with mega reserves of gold like Reko Dek, and many others
What about how to give progress to Baluchistan and Khyber and how to control the anti-Pakistan emotions there.
Lahore to Karachi motorway (3 lanes each side) that can accommodate 40 ft loaded containers, not like the one Nawaz made between Isb and Lahore tat can not take 40 ft loaded container truck because of kalar kahar, many people don't know this. Nawaz did this to make some people happy so motor can pass near to their lands. This can b verified with company that constructed the motor way.
New railway tracks all over the country
More budget for education over all
Improve the current education system. make the university curricula in synch with the industry.
Invest in IT and telecom sector
Kick out etisalat from PTCL and make it 100% Pakistani
make electricity free for the businesses
Noorullaht@gmail.com if some one wants to make me advisor
@Khalid Khan: Truly speaking... PMLN has more think tank as for as economic sector is concerned. The PMLN Economic team is not only appreciated in Pakistan but all over the world.
@ Khalid khan... Whose ever side people like Asad umer are makes a huge impact.. And despite of his MBA in marketing do you know where he took engro to as a CEO... Engro sales grew by 10 times during his tenure.. It is more than a commendable achievement.. Your statement has certainly surprised me and goes to show how shallow your thinking is.
See how well the PUNJAB govt under PML N has done QUOTING Pakistan Economic Survey, the Pakistan Agriculture Scientist Association has come up with some statistical realities about agriculture stagnation in Punjab.
According to these figures, during the first four years of the incumbent government (2007-2010), the province either kept losing acreage of all major crops, or witnessed productivity (per acre yield) going down.
Holding the Punjab government responsible, the association maintains that precisely because of its failure, food insecurity has increased in the country. The World Bank has put the percentage of ‘malnourished and food insecure’ Pakistanis at a whooping 51 per cent. This compares with 22 per cent five years ago, and shows an increase of 131 per cent.
According to the association’s figures, the area under wheat in Punjab increased by 0.20 per cent during these four years, but overall productivity declined by 9.7 per cent. The per acre yield fell by 9.90 per cent. On the other hand, when compared with Punjab, area under cultivation for wheat in Sindh expanded by 4.75 per cent. Its production increased by 13 per cent and the per acre yield by 8.25 per cent.
Meanwhile, area under cultivation of rice in Punjab grew by 4.07 per cent, with production increasing by 2.31 per cent. But its per acre yield declined by 1.76 per cent. In Sindh, the area under cultivation of rice went up by 9.96 per cent, while production increased by 12.84 per cent and per acre yield by 2.88 per cent.
For cotton, the area under cultivation in Punjab reduced by 2.34 per cent. Production went down by 11.81 per cent and the per acre yield declined by 9.47 per cent. On the other hand, in Sindh, the area under cultivation for cotton increased by 1.53 per cent, while production went up by 28.57 per cent and the per acre yield by 27.04 per cent.
Sugarcane performed relatively better, mainly because of better seeds. While the area under cultivation for the crop in Punjab reduced by 0.94 per cent, its production increased by 2.48 per cent. The per acre yield for the crop also increased by 3.42 per cent. However, Sindh remained better off, as the area under the crop there increased by 14.49 per cent, and production by 12.98 per cent.
Meanwhile, for maize, area in Punjab declined by 0.94 per cent, but productivity and per acre yield increased by 2.48 per cent and 2.48 per cent respectively. On the other hand, Sindh saw a reduction in the area for the crop by 6.66 per cent, but its productivity still increased by 11.11 per cent and per acre yield went up by 17.77 per cent.
Meanwhile, the area under other crops in Punjab, like gram, lentil, mung, mash, canola and sunflower, declined by 0.85, 55.60, 17.12, 29.46, 45.79 and 16.67 per cent respectively.
Due to declining performance of the sector, as well as increasing cost of inputs and resulting inflation, the cost of food per head in the province has gone beyond Rs3,000 per month. For an average-sized family (5.5 persons), every household needs Rs16,500 per month only for ensuring the provision of basic food. How can people be expected to spend Rs16,500 only on food every month, given that the minimum monthly wage is only Rs8,000? The people would also be neglecting education, health, and social obligations. That is where the province has landed in the last few years, the association maintained.
These five years also saw two international spikes in food prices, which pushed over 900 million people worldwide down the poverty line. It was hard to insulate Pakistan from the consequences. But this should not have been an excuse for the failure to form an effective farming policy. The present Punjab government is certainly guilty on this account.
PML-N has a very seasoned economic team comprising of Sartaj Aziz, Ishaq Dar, Ahsan Iqbal and many others. The entire PTI team is comprised of Asad Umer only who is not even an economist but an MBA in marketing.
As a PMLN fan , I can not understand why PMLN leadership is so much afraid of PTI. PMLN must concentrate on PPP, no?
@Hassan: surely they have and they have consistantly been making policies for "prosperity" of Pakistan, that's the reason we are far ahead of CHINA, Inida and even US.
hats off to plm-N from 1985-2013 they have been "awsome".
overseas pakistani with you Mr. Imran Khan,,just win this damn election,,vote for PTI guys
@Usama: Universities in Punjab may bring it down to 50/ 50.
In Pakistan more than 95% farmers are very small land owners. They are already paying four different kind of taxes. They are to poor to evade these taxes like rich and powerful do. Ever since the existence of Pakistan they had no choice but to pay and it kept the country running. thats the only reliable source of revenues. It will be a mistake to tax them again. They already destroyed every other industry taxing agricultural will be the last nail in the coffin. Solution work with the existing revenue base, make every fat cat pay, Do not let the leaders distribute Pakistani land distribute among themselves free. Guard the national treasury. No free rides for P.I.A and railway employees. Have them buy tickets at discounted price. Invest in education and police. Educate the dumb politician before they take the oath of national office just to remind them that you are a public servant not a king. People in the Government should not be called Govt servants instead they should be called public servants.
@Irfan Sahotra: if army is deployed in polling stations of Karachi PTI might beg 2-3 NA seats.
Where can we watch this debate, is it published on the internet ?.
As for increase in tax-to-GDP ratio the PML(N) did not take measures to increase revenues through direct taxes like personal and corporate income tax during its previous two tenures of power.Likewise, it refrained from imposing tax on agriculture income because PML(N) is a political party dominated by feudal lobby who also owns sugar and cement industries.In his speech at a public meeting in Mansehra (KPK) the other day, Mian Nawaz Sharif promised economic explosion like the nuclear counterblasts of 28th May,1998.Will he fulfill this promise made to the people, or once again be fool them with the hollow slogans like making Pakistan World Tiger, futile scheme of Qarz Utaro Malk Swanroo and whimsical program "Pakistan 2020", the dominant political themes of his second tenure of government?
PTI has already brought change to Pakistan without using a penny from the tax money...
PTI it is, enough is enough.
Hats off to Asad Umer
@Hassan: Mentioned names or brains are already testified and nothing came out of them. Punjab is still struggling with huge problems since PMLN ruled for 15 years in this province. We need to test new and young party with good leadership, Imran Khan.
PTI has made detailed policies on all major areas. Do look up on them.
its an honour to have ppl like Dr Miftah in PMLN. My vote is for PMLN bcz they have a team having Sartaj Aziz, Ahsan Iqbal, Gen Abdul Qayum, Dr Umar etc. to bring economic revolution in Pakistan.
@ Usama: I believe most of IBA Karachi students are from this city where no one can even imagine PTI winning against MQM. So moral support aside, PTI has no chances of winning from Karachi and not even from rural Sindh. PTI's real playing ground is Punjab where PML-N is extremely strong except in some constituencies like that of Shah Mehmood Qureshi etc.
But I must admit, PTI gave genuine positive competition to PML-N in terms of exploring new ideas for socio-economic development and they will capitalize on that.
i also like pti the most in this election.....! but its way too early, as nawaz league is experienced as they knows how to change the game.... but the honest one is pti.......
MTS saves national resources in term of Foreign exchange. If one million vehicle in a city remains stopped with running engines for just two hours, these spend fuel costing 2.00 million US $ per day and annually it becomes US $ 730.00 million. Just think that same thing is happening in Pakistan 6 main cities. Annual loss of 7.00 million US $ and for 6.00 million US $ we have to approach to IMF. MTS is an excellent way to get economic prosperity and reduce the debt burden.
Khawar bhatti
My vote for PML-N and their seasoned economic team. PTI is nothing more than pep talk and presentations!
PTI, All the way!
my vote for PTI.....PTI ALL THE WAY
Lock horns? You meant N copied PTI's policies again and tried to present them as their own?
PTI has done the the research work...My vote for PTI
RT @Asad_Umar: Of course it was fun watching the PML rep ask how many of you support PTI and 80% of the hands going up :)