Loud Thinking

Archive for the ‘Action Plan to Revive Pak Economy’ Category

What NAP missed?

By Rauf Khattak.

LOOK closely at the National Action Plan. The minds working to address one of the most serious challenges in our history — perhaps second only to the East Pakistan crisis — came up with a laundry list to confront the danger.

The best that the best minds could think of included measures ranging from setting up special courts, banning armed militias, revitalising Nacta, cracking down on hate speech, etc.

Does this lead us to conclude how this fitna emerged? Was it because of money; foreign meddling; zealots travelling from the Middle East via the Afghan jihad; our own policies to outsource our wars? Yes, it is all of this, but that is not all.

There is one grievous omission from the measures which NAP outlined. It is social and economic justice and equality between classes and regions. Why is it that there are so many men who blindly follow the merchants of death, to do the dirty work for them in exchange for money? The answer is simple: they have no stake in this life and in this country.

Terror was unleashed by the disenfranchised of yesterday.
They are not the enemies of this country. The system is their enemy. They have no decent clothes on their backs and no nourishing food in their bellies. Fire burns in their bellies. That is why no act is gruesome enough for them. A hungry man is an angry man. According to a Chinese proverb, he who has no shoes on his feet is never afraid of one who has boots on.

Make an economic and regional profile of all those that we have arrested, hanged, killed and are fighting against and only one dark picture will emerge — a pathetic, miserable figure. He talks about great ‘jihad’, Islam in danger and says that anyone who does not take up arms in order to establish ‘God’s law’ in this country and drive away all ‘infidels’ from Muslim lands, is a kafir.

He will kill all such men in bazaars, mosques, their children in schools and colleges, anywhere in fact. You look more closely at this miserable figure and you will be convinced that he is totally ignorant and may not even be saying his five daily prayers correctly. Yet he lectures us on what real Islam is. He only parrots his mentors who are connected to remote ideologues. He does not know the message of peace in Islam.

And that there are more sensible views than what Sayyid Qutb of Egypt preached and Osama bin Laden of Saudi Arabia practised. Our hungry man has got a platform and poisonous words placed in his mouth to froth out and take his revenge on the rest of the society.

NAP is indulging in administrative and military whip-cracking. This is fine but we have been using these methods for the last decade. Our wound is large and cannot be covered by band-aids. Where is the statesmanship? Statesmen do not create history. They seize the opportunity presented by history. President Obama in his last State of the Union address alluded to decades of instability in Pakistan and Afghanistan. Some of our nationalists were not amused. Obama was dead right.

Our response is to wish away the problem by announcing each day that the back of the militants has been broken. They, in turn, present us with a new horror the next day.

There cannot be complete equality on earth. Men and regions have been created with different potentials. Will Durant in The Lessons of History said: “We conclude that the concentration of wealth is natural and inevitable and is partially alleviated by violent or peaceable partial redistribution.” The lower classes will rebel if inequality is extreme.

The militants may have been pushed back. But the problem is not going away. The ruling classes of Pakistan were lucky this time. Remember how young, un­­known men around 2002 started appearing in one place after the other in KP to ‘spread virtue and eliminate vice’ from the society? Terror was unleashed by the disenfranchised of yesterday whose ranks were swelling by the angry unemployed — both educated and uneducated — criminals and the ‘pious’ alike.

The denouement was reached by 2009 when the local Taliban were at a striking distance from Islamabad. The state was alarmed and in May 2009, operation Rah-i-Rast was launched with full fury and the militants were rolled back.

The Taliban failed this time not because of the operations against them but because they espoused non-issues like beards, banning music and religious orthodoxy. Had they stressed the right issues such as social and economic injustice, the flood would have swelled from every city, village and valley in Pakistan drowning the exploitative class. Islamabad would have been theirs. Prevent the next storm by adding social and economic justice to NAP.

The writer is a former federal secretary and has authored a book on the Taliban.

raufkkhattak@gmail.com

Published in Dawn, February 17th, 2016

How the hell some wise men of the country blame the PIA employees for its sufferings, when the top management appointed during the tenures of PPP and PMLN shook the foundations of PIA by anti PIA decisions?

All such RESPONSIBLE  persons MUST be tried in the military courts for their ECONOMIC TREASON with Pakistan.

PIA suffered more because of giving landing rights to other airlines without ensuring a reciprocal treatment.

Please read the full news item published today by the daily The Express Tribune at the following link.

However, the relevant excerpt of the news item is quoted below:

Quote.” Recent briefings by the PIA management to the National Assembly Special Committee on PIA Privatisation revealed that the national flag carrier suffered more because of giving landing rights to other airlines without ensuring a reciprocal treatment and a wrong marketing strategy.” Unquote.

..http://tribune.com.pk/story/1040018/change-of-plans-imf-agrees-to-delay-pia-sell-off-for-six-months/

Dear Mr. Prime Minister,

AoA.

Sir,

Please accept heartiest congratulations on the success of today’s (Friday, 15 January, 2016) All Party’s Conference (APC) convened by you to resolve contentious issues on China Pakistan Economic Corridor (CPEC).

This news is very satisfactory for the nation that our politicians and PMLN government’s team, under the guidance of its Prime Minister, is fully capable of resolving national issues, with mutual consultation and cooperation.

Today’s national leaders success is another step in strengthening peoples belief, in our democratic system, main credit for which goes to the PM and its dedicated team.

Best Regards,

Syed Nayyar Uddin Ahmad
Lahore.
PS. Please advise Mr. Ishaq Dar who is currently in China, to request the AIIB, to take-over/swap all our foreign debts, zero or on minimum rate of interest, to reduce our huge debt SERVICING burden.

Dear Mr. Prime Minister,

Sir.

May Allah Bless you for the auspicious launching of the National Health Program, on the advent of the New Year 2016.

In fact, history will record this fact and posterity will stand as a witness that no ruler in this region, launched such a life touching and innovative welfare initiative, for the poorest of the poor.

In this regard, you, your team and your government deserve fullest Kudos and appreciation for the awesome gift on the eve of the New Year 2016, to the poor people of Pakistan, living below the poverty line.

Here, it will be very appropriate to remind that Islam considers all life forms as sacred. However, the sanctity of human life is accorded a special place. The first and the foremost basic right of a human being is the right to live.

I am more than sure that the NHP will save many lives of the poor sick Pakistanis, by way of affording them best possible treatment, available in the country.

Sir, it is also to be kept in consideration that not only diseases kill people, but poverty and unemployment is also a big killer and a cause, for the lawlessness and severe unrest in the country.

As such, your government should also consider launching of mega projects like Kalabagh dam, (only statesmen like you can take tough decisions like nuclear explosion and NAP’s strict implementation) huge water reservoirs and new water canals to channelise flood waters for productive agricultural usage.

Building of new most modern and absolutely world class sports cities, in Public Private Partnership mode, in each province, can also provide jobs, channelise the energies of youth and improve the level of sports in the country; and may be in the coming years, help in the holding of world sports championships and games, like commonwealth games etc.

Moreover, Pakistan also has one of the biggest tourism potential in the region. Acountry like Turkey (which is also facing terror problem) is earning almost $20 billion annually, only from tourism.

The beauty of our hilly areas is second to none in the world.

Similarly, beach facilities from Karachi to Gawadar, if developed on modern lines, can attract huge number of tourists from Russian States and other countries.

Pakistan should also harness the opportunities of medical tourists from abroad, specially in the field of comparatively very cheap dental treatment.

It is hoped that the day is not far away, when InshaAllah, Pakistan will turn into a land of peace and opportunities, for the entire region.

With best wishes and kind regards.

Syed Nayyar Uddin Ahmad

Ensure Corruption Doesn’t Pay..!

In Pakistan, every body knows that we are no less behind any nation in corruption.

The NAB chairman during last PPP government’s tenure of 2008-13, himself disclosed that the daily value of corruption in Pakistan, was a staggering amount of Rs.12 billion per day or Rs.4320 billion per year.

Now, this huge amount of corruption in Pakistan is more than the Rs.4.0 trillion budget of the country; and almost 17% of the country’s whole GDP of 250 billion USD.

A state bank report published today on 23 December, 2015 by the daily “Express Tribune” also sheds light on the very high level of “Informal Pakistani Economy” quoted as below.

Quote.

“Currency in circulation as a percentage of GDP is a measure that reflects the scale of the informal economy: a higher ratio means a larger informal economy and a heavier dominance of cash.

According to the SBP annual report, this ratio is 9.4% in Pakistan, which is the second highest after India (10.6%). It is 3.4% in Sri Lanka, 3.7% in Malaysia, 5.9% in Bangladesh and 7% in the Philippines.

Similarly, the ratio of broad money (M2) as a percentage of GDP is another proxy that helps determine the size of the undocumented economy. A lower ratio of M2-to-GDP reflects a larger informal economy. This ratio is 41.2% in Pakistan as opposed to 62.7% in Bangladesh and 76.7% in India.” Unquote.

Moreover, we are also no less behind in raising hue and cry against corruption.

But, the problem is that corruption can neither be curbed with hollow slogans nor by declaration of assets by the politicians and government employees.

Times of India reported on 19 November, 2011(Link:-http://timesofindia.indiatimes.com/india/Black-money-India-to-sign-agreements-with-42-more-nations/articleshow/10793795.cms) that After signing agreements with 48 countries, India will shortly ink pacts with 42 more nations to bring backblack money stashed abroad, Union minister of state for parliamentary affairs Harish Rawat said. Once these agreements are signed, India will be in a position to bring back black money stashed in different banks abroad, he told reporters here.

Corruption can only be minimised by deterrent legislation; which ensures that crime of corruption will not pay, neither in the short, nor in the long term.

And effective judicial verdicts, like the one announced today by the Delhi court in which former Indian 86 years old telecom minister Sukhram, has been sentenced for five years jail, for taking Rs 3 lakhs as bribe to give a lucrative contract to a private firm in 1996. He pleaded for leniency in court on grounds of his old age while the CBI called him a “habitual offender” and sought maximum punishment for him.The 86-year-old former minister was held guilty for misusing his official position during his tenure as telecom minister in P V Narasimha Rao’s cabinet in giving a contract worth Rs 30 crore to a private company, Haryana Telecom Limited (HTL), to supply 3.5 Lakh Conductor Kilometers (LCKM) ofPolythene Insulated Jelly Filled (PIJF) cables to the telecom department.

We in Pakistan, must realise that our main problem is not the existence of corruption. Rather, the fertile culture which help breeds corruption pay, as the most lucrative and profitable activity in Pakistan.

Till such time, we attack the very roots of this cancerous culture of corruption in Pakistan, no positive improvement should be expected in any sphere of life.
And we must be aware of the fact that, corruption is a bigger menace than terrorism.

Since, we have all the required institutions and no dearth of honest and honourable people, what is required is developing a system to post these DYNAMITE people to be head of NAB, FIA and Anti-Corruption departments of provincial governments.

Towards the achievement of this goal, a committee is proposed to be constituted, consisting of Chief Justice of Supreme Court, all Chief Justices of High Courts and leader of the opposition of National and all provincial assemblies, for appointing on a tenure post, all heads and key personnel of NAB, FIA and Provincial anti-Corruption departments.

Moreover, NO person in the country from civil, military, judiciary and any other department should have the immunity from interrogation, on corruption matters, before; these departments.

It is earnestly hoped that the above said mechanism if, put in place, will strike such a fear in the hearts of all and sundry, that no one will dare even think, of doing corruption in Pakistan.

 

Mian Muhammad Nawaz Sharif,

AoA.

Sir,

Please note that it is the prime duty of the PM Pakistan to use all his abilities and resources at his disposal, to free Pakistan from the foreign debt, rather than allowing taking of more burden of loans, to pay off the old loans.

Already, the debt repayment situation has reached an extremely alarming level to the extent that almost more than 40% of the tax revenue goes into the debt repayment. And in the coming years, the current high interest rate loans repayments may eat up almost the entire tax revenues.

This grave situation may not only create unprecedented economic hardships; but can badly erode the military capabilities as well; resulting in virtual collapse of the economic and geographical sovereignty of Pakistan.

Under the circumstances, no one else in the country but you Mr. Prime Minister, may take this challenge to utilise all your abilities and resources, to arrange a 100% foreign debt write-off for Pakistan.

In this regard, as a first step, since you are visiting Germany from Monday, this issue may please be taken up with the German leadership, for garnering support for the write-off of the entire Pakistani foreign debt, in consideration for its services, in the War on Terror (WOT) plus the permission granted for the FREE use of Pakistan’s air space, to all the 49 nation coalition of NATO forces: which if had been charged during the last 15 years of WOT, would have amounted to earnings to Pakistan of about a trillion US dollars (1000 billion USD). Against which amount our entire foreign debt is much less than $100 billion.

Mr. Prime Minister, besides the German leadership, you should also take up this case individually, with all the 49 countries of the NATO’s alliance on WOT in Afghanistan.

Last but not the least, most of the financial experts will advise you that this is a pipe dream and well neigh impossible. Sir, simply tell such advisors that in order to achieve the impossible, it is precisely the unthinkable which must be thought. Moreover, in the past as well, most of the people discouraged the Quaid-e-Azam, by saying that carving an area for the creation of Pakistan from India, was impossible. However, his sheer determination, unflinching conviction for his just cause and focus on solution instead of the problems, enabled him to achieve the once impossible looking task.

With best wishes and kind regards.

Syed Nayyar Uddin Ahmad
10 November, 2014.

Mr. Prime Minister please ask Mr. Ishaq Dar why his performance is NIL on this account which was your ELECTION promise also.

Indians declare $500 mn in black money in tax crackdown.

Link:- http://www.dawn.com/news/1210191/indians-declare-500-mn-in-black-money-in-tax-crackdown

Indians declare $500 mn in black money in tax crackdown
AFP — PUBLISHED ABOUT 2 HOURS AGO

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NEW DELHI: Indians declared $500 million in black money, the government announced Thursday, a fraction of the total amount feared hidden, as a deadline for coughing up assets hidden from the taxman expired.

Indian Prime Minister Narendra Modi took power last year pledging to crack down on black money, a systemic problem in India that sees billions of rupees hidden in foreign bank accounts or funnelled into property abroad.

The finance ministry said more than 600 tax evaders had made declarations by midnight on Wednesday — when a three-month window for unveiling stashes and avoiding prosecution ended.

The Indian ministry said “638 number of declarations have been received under the compliance window declaring undisclosed foreign assets,” amounting to 37.7 billion rupees.

The government has announced a string of measures to crack down on black money, including a 10-year jail term for evaders who get caught from now on.

But Ashutosh Kumar Mishra, executive director of Transparency International in India, doubted whether the government could find the money offshore given how deeply entrenched the phenomenon has become.

“It’s not easy. You need a set of clear reforms and determined political will and it will take years,” Mishra told AFP.

India is one of the most cash-intensive societies in the world, corruption is endemic, and strict tax laws encourage people to keep money off the official books.

Estimates of Indian black money abroad vary widely.

Some $439 billion left the country illicitly from 2003-2012, according to estimates from the Global Financial Integrity group in Washington.

The wealthy channel money to tax havens such as Switzerland or Singapore, convert it into jewellery, antiques, paintings or property, or send a relative abroad for half the year to avoid tax.

Only 2.89 per cent of Indians pay any income tax at all, India’s previous finance minister told parliament in 2013.

Dear Mian Muhammad Nawaz Sharif PM Pakistan.

Sir,

The below mentioned analysis of Mr. Asad Omar is really alarming and needs an impartial high level inquiry into the fact that why certain key indicators of Pakistan’s economy and business have gone down in your current tenure, to the level even below than than the previous PPP government led by Asif Ali Zardari during 2008-2013.

Quote.
“Pakistan’s ranking in the world economic forum global competitiveness index has dropped from 124th at the end of the Zardari era to 129th this year. The doing business report of the World Bank dropped Pakistan from 107th to 128th. The combination of this eroding competitiveness and the piling of exorbitantly expensive debt is sinking Pakistan further into a debt trap imperiling future generations of the country.”
Unquote.

Dear Mr. Prime Minister,

Sir,

Please peruse the below quoted analysis of Mr. Asad Omar, which is a fit case for a highest level inquiry to find out the reasons for playing with the economy and destiny of Pakistan right under your command:

Quote.” The Government in its latest offering last week was only able to sell 500 million dollars at a yield of 8.25% which is the same pricing it got last year when Pakistan had re entered the international bond market after several years gap. Everything else remaining the same the pricing this time should have been lower as there was no re entry premium to be paid. Hence, the markets were essentially saying that things are getting worse. Umar stated that comparison with recent bond issues by other emerging market countries makes for shocking reading. Just two examples would suffice. Kenya doing its first ever issue last year and raising 1.5 billion dollars at a yield of 6.875%. Similarly Sri Lanka just a few months back raised 650 million dollars at a pricing of 6.125% which is more than 2% lower than what Pakistan is going to pay!”Unquote.

---

 

Mr. Ishaq Dar, the nation wants to know why you issued Euro Bonds at 8.25% when for comparison, Nigeria’s dollar debt carries a yield of 7pc these days, and the average for other African and Middle Eastern countries surveyed by Bloomberg was 2.8pc?

Link:- http://www.dawn.com/news/1209679/analysis-eurobond-attracts-controversy

 

Analysis: Eurobond attracts controversy
KHURRAM HUSAIN —
THE latest Pakistani Eurobond, issued last week, has hit controversy even before the finance team has returned to the country.

Pakistan offered 10-year paper at an 8.25pc yield, and received bids worth $1 billion. The last Eurobond was issued in April 2014, when the government also targeted to raise $500 million, but attracted bids worth almost $6 billion and ended up raising $2bn from the exercise. The yield then was also 8.25pc.

The diminished participation, as well as the unchanged yield from the last bond offering in 2014, has led people to suggest that the exercise ought to have been delayed, since markets were still in the grip of jitters following a steady stream of unnerving news from China and hints from the US Federal Reserve that a hike in interest rates may be coming soon.

Also read: Pakistan issues $500 million Euro bond

According to data obtained from Reuters, Pakistan’s 10-year US dollar-denominated bond issued in April last year traded at 104.883 cents on Monday — still well above its issue price but below the record high of almost 110 cents hit earlier in the year. The premium suggests investors see those bonds as a lucrative asset, although it would be necessary to know how long they intend to hold the bond to determine whether the premium means the bonds may have been overpriced.

“It’s important to keep a presence in the private debt markets,” says a high-level source in the banking industry who closely follows the money markets, “but in this particular situation, the timing could have been changed in the light of negative sentiments in global markets. This bond is also likely to be traded at a premium right away, given its pricing.”

The finance ministry justified the issue, saying in a press release that it was necessary to cover repayment of a maturing bond of the same size that was issued in 2006. That bond matures in March. The ministry also saw it as a positive sign that despite difficult global conditions, “the bond was twice oversubscribed”.

Former State Bank governor Salim Raza agrees that the timing presented challenges, and adds it is reasonable to expect that the yield on this bond should have been lower than the last one. “With improvement in underlying inflation and current account flows, compared with the last issue, we should have seen a better coupon rate,” he says, expressing some puzzlement at the urgency with which the government pursued the bond. “Perhaps they have a reserve target in mind which would warrant additional borrowing.”

The relatively secure position of the reserves, at the moment, leaves many confused as to why it was necessary to go ahead with the exercise at a time when global markets are spooked by a sustained rout on Chinese stock markets as well as possibilities of rate hikes in the US.

“It really doesn’t make sense why they were so keen to pick up $500m at a high price when they have $18.5bn in reserves,” says Sakib Sherani, former adviser to the finance minister who has advised the government in earlier Eurobond flotations. “It’s not just $500m, it’s expensive $500m,” he says.

For comparison, Nigeria’s dollar debt carries a yield of 7pc these days, and the average for other African and Middle Eastern countries surveyed by Bloomberg was 2.8pc.

Pakistan’s credit rating was upgraded by Moody’s right after the budget this year. The credit rating agency cited “continued strengthening of the external payments position; and sustained progress in structural reforms under the government’s programme with the IMF” as the key reasons behind the move.

But on Sept 18, days before the bond exercise, it issued a more guarded assessment of Pakistan’s creditworthiness. That assessment, which assigned a provisional rating of B3 to the Eurobond, spoke of “factious relations between the executive, military and judicial branches of government” as well as “very low fiscal strength and high susceptibility to event risk” as key weaknesses holding back Pakistan’s creditworthiness.

That same assessment pointed to a key concern regarding the rising reserves: they are primarily driven by borrowed money. Moody’s said any strength in Pakistan’s creditworthiness stems from “support from multilateral and bilateral lenders”, underlining the importance of Pakistan’s relationship with international financial institutions like the IMF and the World Bank as principal drivers behind its strengthening reserves.

That concern appears to have been raised during the road shows leading up to the bond issue, prompting the federal finance secretary to say on record that Pakistan may yet consider another IMF programme once the current one ends next September. The secretary’s remarks indicate that investors attached high importance to Pakistan’s ongoing programme as a driver of reserve accumulation and sound fiscal management.

Despite its many problems, investors remain interested in Pakistani debt mainly because of the high yields that it offers, and an abiding faith that great powers will never let the country veer towards default. Pakistan’s external debt repayments eased in recent years as the major repayments to the IMF from the 2008 facility drew to a close. But in its last Annual Report, the State Bank cautioned that these are going to rise again from 2017 onwards, “with the onset of repayments of rescheduled Paris Club debt, Eurobonds” as well as repayments from the ongoing IMF programme. “This scenario emphasises the need for caution while framing debt management strategy of Pakistan.”

Published in Dawn, September 29th , 2015