Mar 21, 2011

Education: data first

Ahsan Iqbal
Monday, March 21, 2011
The wording of Article 25a of the Constitution of Pakistan is clear as day. Education is a fundamental right – “The State shall provide free and compulsory education to all children of the age of five to sixteen years in such manner as may be determined by law.”

The ground realities in Pakistan are also clear, stark and frightening. Pakistan is in the throes of an education crisis that threatens the future of the country in the wake of the new “Knowledge Revolution” paradigm for development, under which the quality of human resource of any nation will define its destiny.

More than 25 million children are denied the right to be in school. The children that are in schools, study in broken buildings, often with no teachers, or poorly skilled ones. The system fails not only those children who are not in school. It also fails those children who are in school as they study a curriculum that is outdated and irrelevant to the demands of a new knowledge-based economy. Rich and poor parents alike are choosing to pay for education, with one-third of all enrolled children now being educated in private schools.

We have a moral obligation to fix this problem. Globalisation is bringing down national boundaries. Nations today need to compete on global benchmarks which means we owe to our people an education system that is world class. The devolution process, triggered by the 18th Amendment, is changing the way public policy is formulated in Pakistan. We need to ask ourselves if we are prepared to fulfill the moral obligation to fix education, and to do so in a manner consistent with the 18th Amendment.

I fear that at the present time, we are unprepared. The truth is that Pakistani policy makers have little handle on what is currently being spent on education. The picture is becoming even more fragmented in light of the 18th Amendment as now we are left with no mechanism at the national level to set, monitor, and evaluate national standards.

We urgently need to gain greater clarity over the current situation and also to analyse what needs to be spent if governments are to meet their constitutional obligations on education. This cannot be done by the provinces acting on their own. Both federal and provincial governments need to work together, assisted if necessary by Pakistan’s top economists, to discover what we know about financing, and – just as importantly – what we don’t know.

According to the Pakistan Economic Survey 2009-10, Pakistan spends 2.1 percent of GDP on education, which is less than Bangladesh (2.6 percent) and India (3.3 percent), and much below levels of expenditure seen in countries such as Malaysia (4.7 percent) and Vietnam (5.2 percent).

Figures for how much of this money is spent on schools (as opposed to universities and colleges) are not readily available. However, a rough estimate suggests that school-level expenditure accounts for around 65 percent of total expenditure, or somewhere in the region of 1.4 percent of GDP.

Of course, the problem is not just that allocations are low. It is that they are based on the wrong things. Budget allocations are not determined by any clear analysis of need. If they were, the lion’s share of the budget may be spent on development, for fixing existing schools and possibly upgrading, or even building new ones.

Yet more than 80 percent of education budgets at the district level are routinely spent on recurring costs, especially salaries. The number of teachers on payroll and their place on the pay scale are largely responsible for determining how much is spent on school-level education. This irrational way of allocating money is actively hurting Pakistan’s future.

One of the only sources for reasonable quality data on education expenditure is available from PIFRA, the government’s computerised accounting system. However, no one sees it as their job to submit it to the robust financial analysis that would enable proper planning for the future.

What is spent on the school system as a whole? We can make a reasonable estimate, but this figure is rarely cited and, seemingly, never used. What is spent per pupil in primary, middle, and secondary schools? How does expenditure vary from province to province, and between rural and urban areas? How does value for money compare with that provided in the private sector? What is the marginal cost for each new student added to the existing system? To these questions, and many others, at the moment we can provide little better than a guess.

One striking problem is the lack of data on the school-age population. In the absence of a population census since 1998, we simply do not know how many children there are between the ages of five and 16, much less how this number, and its distribution between age groups, will change over time. The estimates that are available project forward from the census and are therefore only valid at a population level (even then they will be inaccurate if birth rates have fallen at a different rate than expected).

Disaggregated estimates at district level are not possible as internal migration cannot be calculated with the given information sets. This seriously impedes decentralised decision making. As a result, we are over-reliant on household surveys, such as the Pakistan Social and Living Measurement Survey or the Annual Status of Education Report for rural areas. These provide some alternative to an up-to-date census, but are not a replacement for one.

We are also faced with the problem that there is extremely poor information about the functioning of the private sector, which has grown explosively and probably educates around a third of Pakistan’s children. Only one province includes private schools in its Education Management Information System (EMIS). The Ministry of Education figures for private schools are therefore estimates and may underestimate the growth of the sector.

We certainly lack any figures regarding how much parents are spending on private education, although the amounts are substantial and growing. It is an extraordinary situation. An alternative school system has emerged that caters to as many as 12 million children and it has barely been factored into our education planning.

With this kind of a baseline of data and information about schooling in general, one has to ask: If we can’t measure the problem, how will we possibly fix it? The March for Education campaign has brought to light several big picture challenges to education reformers. It has helped underscore the obvious education emergency in Pakistan.

If we are to be successful in addressing this paramount challenge, we will need to do so with a vastly improved baseline of data. This is not an impossible task. The amount of talent at Pakistan’s disposal is enormous. With the right set of instructions and a broad ownership, a small group could fix the data problem rather quickly. That would be a bold and important first step in the long march toward an educated Pakistan, a better Pakistan, and a Pakistan that can live up to the aspirations of its founders.

The writer is PML-N MNA, a former federal minister for education and a former deputy chairman, planning commission. A detailed paper by Mr Iqbal on the state of education financing and the problem of data is available at

Raymond Davis and Aimal Kansi

Taj M Khattak
Monday, March 21, 2011
On a cold January morning nearly forty years ago, when I was a PoW, I found myself pushed into an Indian interrogation cell for some softening up. Forced to strip and subjected to incessant baton blows, I soon ended up in a corner and on the ground, shivering with cold. When my humiliation was complete, I experienced a feeling which can be best expressed by what Mao Zedong once said: Strongest is the man who has nothing more to lose.

I got straight up and shouted some full-throated invectives at my tormentor. Soon the burly man backed off, noticing that his baton wasn’t inflicting the same physical pain any longer. My shouting at least got me back my clothes, even though my dignity wasn’t restored; not in terms of my mistreatment, that is.

The relatives of the two men shot dead by Raymond Davis in Lahore may have received some compensation for the loss of their loved ones. But for the rest of us Pakistanis, getting their self-esteem and dignity back will take much longer, if we get it at all. The fact that the government, the opposition, the military establishment and the judiciary, all have contributed to the release of Raymond Davis is the biggest disappointment.

Davis’s release was in sharp contrast to what happened to Mir Aimal Kasi, who was accused of shooting down two CIA men outside their Langley Headquarters in Virginia in 1993. Davis and Kasi were accused of the same crime: murder. In the American’s case sham legalities and fake diplomatic immunity came into play to win him freedom. If there were such a thing as justice in the world, Davis would have met the same fate which Kasi did. Either both would have been executed, or both freed. But Davis went scot-free, by paying for his release and flown out of the country in which he had committed the crime. Kasi – betrayed by the rulers, some even receiving head money-was abducted from his own country back to the United States to be executed.

While Davis may still have been in neighbouring Afghanistan, our “strategic partners” in their endless “war on terror” killed another 41 Pakistanis in a jirga in Khyber-Pakhtunkhwa in a drone attack on Thursday. Such gatherings have been subjected to suicide bombings in the past, but now lives are in constant danger from drone attacks as well. These people are not safe at any given time and anywhere in their own country today, and that is a sobering thought. How are they expected to react, or what they should logically be doing in such a situation, is a question the think tanks in Washington need to address with some urgency.

The routine, non-serious messages of sympathy from the Presidency and the Prime Minister’s Secretariat in Islamabad should cease, especially since the attitudes of the occupants of these two high offices towards drone attack victims are now well known, attitudes which can only make Pakistanis hang their heads in shame. The real message from ordinary Pakistanis to the occupants of these exalted offices should be that if you cannot protect your own citizens as your first duty, at least please refrain from rubbing salt into their wounds.

The drone attack was criticised in strong words by the chief of the army staff, but this should have been done when the first drone attack took place under his watch. Those who died in the latest raids were as innocent as most of those 1,700 Pakistanis who have perished in these attacks so far. The ISPR release was therefore too little, too late. Coming in the wake of the release of Raymond Davis, in which the military establishment reportedly played an important role, this condemnation rang with the same hollowness as the words from the Presidency and the Prime Minister’s Secretariat.

In April 2010, the chief of the PAF visited the Combined Air and Space Centre of the US Air Force in Southwest Asia. His host, Lt Gen Mike Hostage, later called it an opportunity for the chief of the air staff to meet the “terrific” US airmen, some of whom obviously used their childhood skills in video games to good effect on Predators and Reapers now raining hell on defenceless Pakistanis.

These “terrific” airmen have the blood of innocent Pakistanis on their hands, and shaking their hands can only mean condoning their crimes. If the guardians of our airspace cannot protect their fellow Pakistanis from drone attacks, the least they can do in dignified protest is to keep away from visiting such Command Centres.

One’s heart goes out to the people of Khyber-Pakhtukhwa, who are routinely battered by suicide bombers on the ground and by drones from the air. They cannot even assemble to resolve their disputes in accordance with their age-old customs and traditions, as were the unfortunate participants of Thursday’s jirga. The legality of these attacks has been questioned by UN human rights investigators. But beyond questioning the legality, the United Nations has done little to stop this carnage.

It is said that during World War II, President Franklin Roosevelt and Prime Minister Winston Churchill were looking for a name for the newly formed world body to replace the League of Nations. After hitting upon the present name for the world body early one morning, FDR, paralysed by polio from the waist down, excitedly wheeled to Churchill’s room and knocked. He pushed the door open when there was no response.

There he found Britain’s prime minister drying himself after a shower, without a stitch on. Roosevelt announced the words “United Nations” and Churchill reportedly responded, “That is it.” The United Nations was born that moment, but ever since then it remains a paralysed organisation helpless in the face of naked injustices.

Karim Khan, the Islamabad-based journalist from Machikhel village in North Waziristan, has started the initiative of filing a class action suit in a US court against Defence Secretary Robert Gates, CIA director Leon Panetta and the CIA’s former Islamabad station chief, Jonathan Banks. The action has already forced Mr Banks to leave Pakistan. It is believed that more families want to follow Mr Karim’s example, not so much in the hope of winning lawsuits but to gain international publicity for this illegal employment of the CIA by the US administration to kill innocents in other countries.

Karim Khan and others need to be helped to appeal to the sensitivities of the American people whose conscience hopefully is not as dead as their government’s. Our rulers have disappointed us completely and there is hopelessness all around. Organisers of civil society protests on Constitutional Avenue in Islamabad should seriously consider collaboration with Karim Khan and others for action in US courts.

As for my grilling four decades ago, after I was back from the interrogation centre that evening I entered in my small diary a sentence which I had read in Leonid Brezhnev’s biography. Then a colonel in the Soviet Red Army and holed up in his bunker which was pounded relentlessly by German artillery, he vowed that if ever he got a chance to plan the defences of his fatherland, he would never let this happen again. Brezhnev went on to become president of the USSR and the Soviet Union’s defences were at their peak during his rule. Of course, I cannot follow through on what was said in those borrowed lines.

But others can. From now on, we Pakistanis should seriously start thinking in terms of exercising our options – through actions, not merely through protests.

Minorities more privileged in Pakistan than elsewhere: Mufti Muneeb

By Saad Hasan

PakistanÕs leading Muslim scholars stand united on the fact that minorities enjoy equal rights in every aspect of life. Islam makes no distinction between a Muslim and non-Muslim in matters of business, property and honor. Yet, Christians, Hindus and Ahmedis have continuously been attacked and killed in recent years because of their beliefs.

At a time when the country is faced with many problems, the Islamic parties generally tend to play down the issues of the minorities. After all, they say, the government is running short on cash, the ruling Pakistan Peoples Party (PPP) struggling to keep order within its ranks, militants blowing themselves up in mosques, political rivalries resulting in everyday deaths in Karachi, all this makes the plight of the minorities their last

Maulana Tanveer Ul Haq Thanvi, a well-known authority on matters of religion, said that when it comes to life, Islam gives protection not just to humans. ÒProphet Muhammad (PBUH) was even against the cutting of trees. How can Islam then preach killing?Ó

Minorities in Pakistan suffer at the hands of misguided individuals and not because of any thought-out Muslim movement, he said. ÒSurely, the blame for this lies with government. Authorities want to be seen close to the scholars who side with the extremist interpretation of Islam.Ó

In recent years, the perception about the scholars has also changed with the rise in suicide bombings and the hard stand taken by religious parties against the participation in the war on terror, he said.

ÒWe condemn every act in which the minorities are targeted. I wonÕt agree with the reports that Ulema remained silent when Federal Minister for Minorities Affairs Shahbaz Bhatti was killed. We actually held a meeting of leading scholars in Karachi to condemn it.Ó

History, he said, was replete with examples of minorities enjoying unprecedented rights under the rule of Muslim leaders. ÒIslam is a religion of peace and practicality. There is no place for wild behavior in it,Ó he said referring to the senseless murder of non-Muslims.

Being a sensitive matter, many Muslim scholars prefer not to discuss the issue of the blasphemy law, which is seen by the minorities and human rights organisations as being misused for the victimisation of many non-Muslims.

The fact that hundreds of people have been killed by US drone attacks has further complicated the situation. It has provided room for extremists to exploit the feelings of the people to their advantage.

Minorities, especially the Hindus, have been complaining for some time about the growing number of forced conversions to Islam. ÒThis is unacceptable in light of the teachings of Islam. Muslims cannot even offer any privileges to lure a non-Muslim into the folds of Islam,Ó Maulana Thanvi said.

Some scholars lay all the blame for rising extremism and intolerance on the governmentÕs policy of cooperating with the US in the war in Afghanistan.

Mufti Muneeb-ur-Rehman said that government has also willingly allowed the more extremists of the scholars to have a larger say in matters of religion. ÒThe groups, which have AK-47s, easily enforce their ideals on the state.Ó

However, he said that Pakistan gives far more rights to minorities than a lot of other countries. ÒI donÕt think there are many countries where minorities have reserved seats in parliament.Ó

About the attacks on the minorities, he said that these had been scattered incidences. ÒThese are nothing like what we witness in India where Muslims and Sikhs have been targeted under a proper plan.Ó

The silenced minorities

By Rabia Ali

Their hands tied. Their mouths hushed. Their eyes moist. Their identities lost. They are the religious minorities. They are part of our country.

In the Islamic Republic of Pakistan, the religious minorities, who had once dreamed of living a peaceful and secure life, are increasingly finding life insecure and looking for ways to protect themselves.

With problems of illiteracy, discrimination and poverty already plaguing them, the minorities have to deal with incidents of kidnapping and rape, illegal encroachment of their land and properties, social and employment discrimination and new wave of extremism and intolerance directed towards them.

With the rise in discriminatory incidents, and the number of cases registered against them under the blasphemy laws increasing, the community is forced to look for better ways and means to safeguard their endangered lives.

A Christian, Farrukh Harrison, is the only one amongst his family who has decided to stay back in the country. A year ago, his family moved to Holland and sought political asylum there.

ÒI see no future for the religious minorities in Pakistan. My relatives moved abroad, and they keep on pressing me to leave as well. The way the extremists are taking over the country, it seems that very soon all the minorities would be forcefully converted or would be killed, he says emotionally.Ó

He continues, saying that a number of well-to-do Christians have left for safer abodes, and others are in process of doing the same.

Running a small non-governmental organization for Christian rights, he said that it is a viable option for those who have money in their pockets to leave the country.

ÒHundreds of our community have left and seek asylum abroad. It is sad that despite being the sons of the soil, and playing a major role to progress in health and education, we are the ones who are forced to pack our bags.Ó

Harrison feels that the cloud of extremism which blanketed the country was formed when General Ziaul Haq took the country towards a new path of Islamisation.

While the more affluent have made arrangements to leave, for the poor, there is no choice exist to stay within their four walls, and restrict their activities. A sanitary worker in a government office, Asif Masih, feels that they have no option but to stay behind and be more conscious of their surroundings.

ÒThese days, not many people of my area go to church as they fear that the worship place might be attacked. In these troubled times, it seems as if extremists are going berserk against the minorities.Ó

At work too, Masih faces frequent discrimination, and is not allowed to mingle freely, talk or eat with his Muslim colleagues, said this resident of old Golimar.

Hankook Khan, a member of the Christian community, believes that the religious leaders and representatives are now scared to demand rights for their people, and are avoiding being vocal on their issues. ÒThe way our leader Shahbaz Bhatti was gunned down has sent a message to our leaders and us that we should remain silent on our issues and remain suppressed. When our leaders are not safe, how can a common man be?Ó

The Hindu community too is facing the heat from the upsurge in extremism. Amarnath Motumal, a Hindu lawyer, says that his community is now afraid to tell anyone that they are Hindus. ÒForced conversions and kidnapping have increased amongst our community since last year. To avoid such a fate, people are now reluctant to reveal in public that they are Hindu.Ó

He said that Hindu businessmen are being threatened and those who can afford to leave, are going away. He cited the example of a Hindu parliamentarian who recently moved to India.

Motumal feels that his community often feels that no justice even in the lower courts. Court. On issues such as forced conversion, the judiciary often sides with the converting party, out of fear or conviction. .

Apart from the two largest religious communities in Pakistan, others are also feeling the heat of growing bigotry. A member of a Sikh community which has 3,000 people in Karachi, says that it is better to keep mouths shut and talk less in such circumstances.

ÒIn these times, where every word can be used against us, we believe that a less-talk policy should be followed. For years, the community has been living in peace but now feel threatened that our words might be manipulated and used against us,Ó says Sardar Ramesh Singh said

Meanwhile, commonly considered to be as the most vulnerable community, the Ahmadis are now opting for self-defence. An annual Persecution Report by the JamaÕat Ahmadiyya states that as many as 99 Ahmadis were killed in sectarian attacks and around 67 cases were registered against community members on religious grounds in the year 2010.

Chaudhry Muneer said that although their religion forbids them to seek revenge and become violent, they have been forced to go for ways to defend themselvesÓ. Apart from the everyday violence, such as mobile snatching, we have to face targeted killings, hate speeches and discriminatory stories against us in the media.Ó

Since their places of worship were attacked last year in Lahore, they now look after their religious places deploying their own security.

Those who can afford to, prefer to go abroad. ÒFor the last few years, several doctors have been gunned down therefore those who are going abroad and settling in UK, Canada and other countries comprises doctors and their families.Ó He said that doctors are targeted as the terrorists wants to demoralize their community by targeting educated people.

The dilemma of being a Pakistani Ð a letter from a Christian

A Christian faces a painful dilemma: should he stay on in the country he belongs to? Or should he fly away to greener pastures?

I am on the verge of taking a very important decision in my life. It will definitely affect the life of my loved ones. On one side, I have family members who have migrated from Pakistan and on the other side I donÕt have a single person in my family or friendsÕ circle who favours my decision to stay in Pakistan. I see them all happy and satisfied with their lives, having comparatively ÔokayÕ jobs, a better standard of living, a life which has made them able to do things and exercise all their rights. They have given me millions of reasons to leave Pakistan and they are right. But I have one reason not to leave: I am a Pakistani.

Good or bad, whatever Pakistan is, or whatever it has made me, is mine.

In the mid Ô70s and early Ô80s many Pakistanis left Pakistan. At that time, there was no Talibanisation, the price hike was non-existent. Lives were being lived not just spent. Still, even in those times, people chose to leave and those people, trust me, are much better off now.

Today I fear speaking my heart, I am compromising my standard of living, I face discrimination every day. Still, there is something that is stopping me from going: the fact that I belong here.

Please help me decide, if I stay in Pakistan, I intend to fight for my country, my right to be a Pakistani for I feel it is no use to be a part of a country and not participate in its growth and development. Ultimately, I fear that if I do, I might make a lot of enemies, possibly face death at the hands of the extremist and corrupt elements in our society.

If I leave Pakistan, then I have nothing to lose. Let this place go to hell. Let the people die they way they are. It is not my responsibility but my heart will be broken.

Should I let Pakistan go to hell or try and make it heaven? Should I think about my wife and children or should I just worry about my motherland? Should I worry for the responsibilities on my head rather than worrying about the people who donÕt even care if I survive to make this nation a better place?

Your advice matters!


Terrance A. Francis

Moving in circles

A review of the reform agenda pursued in various education policies

By Aamir Riaz

From the Colombo Plan of 1950s to the last education policy announced in 2009 and the recent task force report “Education Emergency”, we are moving in circles. Campaign against the ghost schools of 1990s, Parha Likha Punjab of the former government and Danish Schools of 2011 have all been launched with much fanfare and lucrative funding from international donors and business corporations to solve the riddle of education.

In order to be successful, a reform agenda depends upon three major factors — political will, public support (especially in the form of popular political parties) and a well-researched vision. Comparatively speaking, during Ayub Khan’s era, the vision and the will of the government was there; the proof was, the best education policy was a consequence of Sharif Commission (1959). Yet, in the absence of popular support, the reform agenda failed terribly.

Bhutto’s nationalisation of education showed the political will and had enormous popular support but a well-researched vision was missing. Instead of developing a pool of trained teaching faculty as mentioned in the earlier education policies, the 1972 policy announced that education would be free and universal up to Class X for all children throughout the country. ZAB’s ‘talented’ education minister, Abdul Hafeez Peerzada, failed to translate the spirit of the 1973 constitution in the education sector. In retrospect, it can be said that the nationalisation was only a safety valve against the shock waves of 1971.

Under General Ziaul Haq, an aimless denationalisation gave way to unprecedented mushroom growth of elite as well as low-end private educational institutions. According to the 2009 education census, privatisation touched only 30 per cent of Pakistani education system.

It is interesting that 1980s onward, the state would not listen to any criticism on curriculum and education reforms in the public sector but allowed elite private schools and madrassas to work without any regulation. The 2009 record shows that 97 per cent madrassas belonging to all sects are privately run. In the absence of any regulatory mechanism, one cannot bind the private investor to have a socially responsible business.

The education policies under Mian Nawaz Sharif’s rule in 1992 and 1998, by and large, followed the blueprint of 1980s and for obvious reasons.

The latest attempt to reform education came in the wake of the post 9/11 world and the ensuing pressures, under which another wave of haphazard efforts were made.

The new democratic government approved an education policy in 2009 following which came the passage of 18th Amendment that restricted the role of federal government. In 2011, majority of the education projects in federation and provinces are donor-driven. Donor politics reminds us of the 18th century Hind-Punjab in which Portuguese, British, Scottish and French companies were busy in their respective agendas. The new donor-driven agenda has already engaged numerous political actors, media-men, consultants and intellectuals. Donors and civil society along with concerned citizens like lawyers, doctors, and journalists should pressurise popular political parties for a permanent education vision.

Vision devolves

National Education Policies stand redundant as provinces take charge under the 18th Amendment

By Shahzada Irfan Ahmed

Last week, a petition was filed in the Supreme Court of Pakistan against the devolution of the federal education ministry under the 18th Amendment. The petitioner, Barrister Malik Mehboob Ellahi, has taken the plea that the devolution of this ministry would jeopardise the integrity and solidarity of the federation.

One of the arguments was that if the provinces were empowered to prepare curriculum and policies then it would be difficult to stop the wave of provincialism in the federating units. He also asserted that the Implementation Commission had no mandate to decide about subjects or functions given in the Federal Legislative List and it could only deal with the concurrent list.

It must be pointed out here that under the 18th Amendment of the Constitution, subjects like education, policymaking and curriculum development have become provincial matters. In layman’s language, the provinces will be in a position to chalk-out their own educational policies, create their respective curricula, even decide the medium of education, and negotiate with foreign donors on financial and technical support required to achieve particular goals.

The supporters of provincial control on education are many and they think all that provinces lack is finances and nothing else. “Every province has its own challenges and all of them have identified the priority areas related to education for their people,” says Shahid Ghani, a certified teacher trainer and education consultant who has worked in different provinces of the country.

He argues an education policy good for Punjab may not be equally good for Balochistan or for that matter Sindh. Explaining his point, he says, the Education Emergency report states that universal education in Balochistan cannot be achieved till 2100 if things progress at the existing pace while the situation is much better in other provinces — “Education policy for Balochistan should be infrastructure-centric while in Punjab the quality issues should be taken up on priority basis”.

On curriculum, he cites an interesting example where the books for children and adult education had to be changed as many topics and images printed in them were new to students. This, he says, happened in the backward areas of Balochistan where the National Commission for Human Development (NCHD) intervened during the Musharraf government under a fast-track initiative to achieve development goals. “What I want to establish is that we must not have a centrally devised and enforced policy for geographical areas having different indicators, demographics, priorities and traditions,” he adds.

The likely direct interaction between international donors and provinces in future is another factor that will empower provinces. The existing projects, in which the government of Pakistan has been a signatory, will be executed by the Economic Affairs Division (EAD) as the federal education ministry has been abolished. New multi-lateral initiatives in education will involve provinces instead of the federal government.

This development questions the logic of having education policies drafted at the national level at a time when the provinces are bracing to take control of things themselves.

The transfer of education was opposed by the federal education minister, Sardar Aseff Ahmed Ali, the National Assembly Standing Committee on Education and Abid Sher Ali, an MNA from PML-N in the parliament. Their point was issues like curriculum development, policymaking and pursual of goals like achievement of universal primary education were too sensitive to be taken up by provinces plagued by capacity issues. However, the objections were not paid heed to and the ministry devolved because not doing so would have been akin to violating the Constitution of Pakistan.

A look at the white paper issued by the Federal Ministry of Education in 2007 states something totally opposite to what the federal minister has set to validate his claims. The document titled “Education in Pakistan: A White Paper — Document to Debate and Finalize the National Education Policy” says under the heading “Textbooks and Learning Materials,” that the “administrative control of the federal government on the preparation of curricula and textbooks has been responsible for stagnation in this area. Textbooks are of poor quality, overflow with “information narrated in a confusing manner,” and, in many cases, are “full of printing errors.” On the other hand, the paper states, books used “in the relatively affluent private sector schools” are “normally well-written and interesting.”

Ghulam Haider, Senior Management Executive at Pakistan Poverty Alleviation Fund (PPAF) hopes things will work out smoothly even after this transition. He tells TNS that PPAF directs money coming from world donors to schools at district government level and there is zero involvement of the federal government in deciding where it goes.

He says the organisation establishes schools in areas where there are none in the radius of five kilometers and also takes up educational facilities abandoned by the government, like ghost schools where only buildings or its ruins exist.

Haider says the international donors are becoming highly watchful of how their funds are being utilised. Devolution or no devolution, it will now become difficult for politicians to direct money to their constituencies and discriminate against others, he adds.

As things stand

The prospects may seem grim but with political will Pakistan can reduce the yawning population-education gap

By Abbas Rashid

Failing education in Pakistan has become a chronic condition that successive governments have been unable to cure. At one level, as shown by the declaration of education as a fundamental right under the 18th constitutional amendment, the incumbent government seems firmly committed to the task of providing education to its people. Pakistan is also a signatory to the UN Millennium Declaration which aims at universal primary education.

At another level, however, as shown by the state of our falling human development indicators, the government also seems unable to make any progress in relation to its own commitment. Meanwhile, our net literacy rate, hovering at 57 per cent, has only jumped up by one percentage point. As the things stand, Pakistan is behind almost all other countries in the SAARC region in terms of literacy and public spending on education.

Education is about access of all children to quality schools, both must go hand-in-hand for an education system to work. Both are out of sync in the case of Pakistan. Despite two decades of efforts to put children in schools, over 10 million of primary school going age children are out of school and about one-third of those who enroll dropout before completing the primary cycle. Many of those who do manage to complete the primary cycle will be found lacking in literacy and numeracy, civic education and other basic competencies. This learning deficit continues into the secondary cycle. Across the spectrum, reform has almost exclusively been concerned with access. Such an unbalanced focus on access is politically attractive for governments simply because more schools mean better publicity and political capital in the short term. Ensuring quality education, however, is a difficult and painstaking enterprise often impinging on traditional mores and vested interests with results only available in the medium to long-term. But without equal emphasis on both access and quality, merely providing more schools becomes a meaningless exercise.

Education reform must aim at providing all children with an environment conducive to learning, a competent teacher, and a high quality curriculum. But while the various initiatives, including those supported by the multilateral and bilateral donors have resulted in larger classes, there have been no commensurate efforts to rationalise teacher deployment, introduce quality textbooks and reform the examination system.

With the public school system perceived as failing, the focus of reform has shifted towards private schools. These schools, especially the low-fee variety, have experienced spectacular growth and are perceived to be more efficient and cost effective as compared with the public schools. The 2007 LEAPS report, among other research, supports this claim.

However, not all is well with the private schools. The report concedes that they look better than they are simply because government schools establish such a low baseline for quality. The LEAPS report also admits to the difficulty of attracting the private sector to large regions of the country such as Balochistan, rural Sindh and southern Punjab characterised by a high incidence of poverty.

Another recent report prepared by the Pakistan Education Task Force, while lauding the performance of the private sector, notes that the, “Vast majority of school places across Pakistan will remain in the traditional public schools for the foreseeable future.”

Dianne Ravitch, a widely respected US educationist, recently attributed a shift in her views — from being a pro-market education reforms enthusiast to a strong supporter of US public schools — to lessons she learnt from Pakistan’s school education experience. Our position is that given the large numbers of student beneficiaries served by the public schools, the private sector schools should not be seen as a lifeline for the government. However, for the public sector to improve, the policy must reconsider the preparation of teachers, the quality of textbooks, and the perennial question of language of instruction.

First, whether in public or in private schools, teachers are a key ingredient of a functional education system. Pakistan has made heavy investments in teachers’ professional development. However, most of this effort is focused on pedagogical practices, which can do little to make-up the deficit in teachers’ content knowledge. The latter has to do with the state of our colleges and universities, whose degrees represent progressively less subject knowledge.

Second, while there have been some improvements in the curriculum, the quality of textbooks remains poor with little attention to critical thinking and problem solving skills. The assessment system continues to test memory recall more than any other competency. Assessment, it should be kept in mind, is the driver of teaching and learning in the classrooms.

Third, there is the issue of the language of instruction. The emphasis on English runs the risk of ignoring increasingly available evidence that the mother tongue or first language must be seen as a ‘cognitive resource,’ rather than simply one language among many. Ignoring this well-established fact has major impact on learning, overall. This is not to deny the importance of English but to argue that, along with other subjects, our students stand to learn it better in the later years if early schooling is geared to aid their cognition through the use of their mother tongue. A recent report, commissioned by the British Council, argues yet again that the first three years of primary education should take place in one of the seven local languages.

Fourthly, public expenditure on education in Pakistan has been 2 per cent of GDP or less over the last few years. This is close to the lowest in South Asia and half the minimum of 4 per cent of GDP recommended by UNESCO. Serious as this shortcoming is, as important may be the system of governance and management of the public sector that provides few incentives for outstanding performance and virtually no accountability for a dismal one. Both aspects will have to be simultaneously addressed if we are to break through the cycle of failure. On both counts, political will stands out as being critical.

Finally, in addition to the measures recommended above, Pakistan must focus on a serious attempt at quality and accessible distance education, as opposed to what the current set up is delivering. Radio and TV have to be innovatively used to that end. This can help reduce the yawning population-education gap.

As things stand, the prospects are grim. Over 50 per cent of the children of ages 5-9 (primary level) and a higher proportion of those aged 10-14 (secondary level) are out of school, according to the Population Council. By 2015, the year for assessing the achievement of MDGs, over 15 million will have never attended school. Secondary level education is even less accessible, which has serious implications for access to the labour market and its improving prospects in life. Tens of thousands of new schools will need to be built to accommodate out-of-school children and there are no signs of that taking place in the next few years.

SharifsÕ about turn

Is the PML-N serious about inviting the military and judiciary in national politics?

By Salman Abid

What are the Sharifs up to? This is the question that comes to oneÕs mind while looking at the statements they have given in the recent past. But first let us peep into Pakistan political history which is marked by military regimes.

The political process in Pakistan never gained a sound footing, especially during the military regimes such as that of Gen Ziaul Haq the agenda of de-politicisation very badly affected the political process.

The process suffered a huge setback during the long military regimes, starting form Gen Ayub Khan and ending (hopefully) with Gen Pervez Musharraf. Direct and indirect intervention of military in different eras in politics resulted in weakening of democratic and political institutions. As a matter of fact, militaryÕs role under democratic governments has remained dominated.

During Gen Pervez MusharrafÕs regime major political forces Ñ PPP and PMLN Ñ became victims of military leadership and later also admitted of their own mistakes in national politics. That was why both the parties signed the Charter of Democracy and resolved not to repeat the same mistakes. They showed strong commitment for strengthening political institutions in the country and avoid any military and any other non-democratic forcesÕ intervention.

Once driven out of power, Nawaz Sharif and his party strongly criticised military role in politics, to the extent that his being vocal against the military regime of Gen Pervez Musharraf was seen as a personal reaction. But today, their stated position seems to have changed as, interestingly, the PMLN leadership has suggested engaging the military and judiciary to cope with the current political and economic crisis in the country.

In Punjab Chief Minister Shahbaz SharifÕs words, ÒPakistan is in a critical phase and is facing internal and external threatsÓ and that Òcollective efforts are needed to resolve the problems faced by the countryÓ.

One major question that arises here is that if military and judicial leadership becomes a party in national politics then their credibility and neutrality would be at stake. And more importantly, what message are we giving to the international community?

The issue here is the strengthening of institutions under the rule of law. Can we justify military leadership and judiciary sitting with political forces? As a matter of fact, the Constitution does not allow such forces to directly intervene in political decision-making process. Why are we so reluctant to take decisions though parliament and others political institutions?

Parliament is the best place for political decision-making and all parliamentary parties are major stakeholders. By justifying military and judiciaryÕs participation in political decisions we admit our political failure.

One agrees with Shahbaz Sharif in that the country is facing a serious political and economic crisis, requiring a political consensus. But, if we agree with ShahbazÕs view, why did we fail in the past in forging military and civilian collaboration?

Ironically, our political forces talk about democracy and elimination of military role during the military regime, but once under democratic rule some political forces try to engage the military. Actually, the idea put forward by the PMLN is still not very clear. If it only prescribes consultation then we already have the defense committee of the parliament where matters about national security issue can be discussed.

Secondly, the President, Prime Minster and chief ministers meet regularly with military leadership as per requirement. So, when forums are available why are we insisting on inviting these forces?

If we are talking about some idea on the lines of the National Security Council, we should not forget that the idea had failed during Gen MusharrafÕs regime. The positive aspect is that a majority of the political leadership has criticised the idea of PMLN and declared that this step would be dangerous for the country as the idea is unconstitutional. We cannot link this idea with 1973 ConstitutionÕs Article 62 and 68. In the past, the experience of military and civil leadership working together provoked conflicts instead of resolving them.

Is it a message to the establishment forces for jointly working once again in a clear shift in PMLNÕs own policy? This is interesting that the PMLN leadership has strongly criticised MQM leadershipÕs views on military to play a pro-active role to resolve the crisis. If the MQM is wrong, how the PMLN can be right on this issue? This can also be seen as an attempt in the direction of holding midterm elections. It seems the PMLN has been left in isolation and major political forces have reservations to engage other forces.

PMLN fears the ÔestablishmentÕ is forging an alliance of political forces against the PMLN and is also conscious about the efforts of Maulana Fazalur Rehman for the joint alliance of opposition parties.

The partyÕs leadership and party should seriously evaluate their stance because they have changed their slogan of democracy and civilian rule to military and judiciaryÕs role in politics. If the PMLN wants to build social harmony and resolve countryÕs acute political and economic problems it must try to engage more with political forces. There is no other option in a democratic framework.

Left on its own

There are signs that the ship-breaking industry is ready to show positive results

By Alauddin Masood

Measures for the revival of ship-breaking industry have yielded good results and the prospects for the development of Gaddani Ship-breaking industry now look bright.

A major indicator for the revival of the ship-breaking industry is the number of ships Ñ 64 Ñ brought to Gaddani ship-breaking yard for dismantling during the first six months of the current financial year. After the financial year 2009-2010, Pakistan has received such a large number of ships for the second time during the last two decades.

In addition to providing jobs to thousands of workers directly, the 64 small and medium-sized old ships, which are presently docked at the Gaddani ship-breaking yard, are expected to produce around 400,000-500,00 tons of scrap while the government has received about one billion rupees in customs duty and income-tax.

As compared to last year, the scrapping activity is slow this year because of high prices of ships in the international market, still some 20-22 ship-breakers are working at Gaddani, employing about 8,000 workers on an average salary of Rs10,000 per month.

Once occupying the second top position on the globe after Taiwan, PakistanÕs Ship-breaking industry was virtually pushed to the verge of collapse by vested interests in the mid 1980s; while merely a decade earlier (in the 1970s) it used to handle about 150 ships at a time, providing direct jobs to some 100,000 persons and meeting major demand for steel and steel related material in the country.

In 2007, ship-breaking industry made available 152,260 LSD steel and metal scrap through dismantling of 34 ships of various sizes. In the last 10 years, it had produced 926,067 LDT scrap by breaking 64 vessels of different sizes, and contributed Rs3.53 billion to the national exchequer in taxes and duties. In its hay days, the industry contributed Rs5.3 billion to the national exchequer in taxes in one financial year.

In addition to high quality steel, the dismantled ships also provide cheapest possible material, like copper, brass, aluminum, machinery, generators, boilers, wood and tools of international standard, for meeting the ever-growing demand of the countryÕs fast developing industrial and commercial sectors.

India, Sri Lanka and Dubai benefited the most from the decline in PakistanÕs ship-breaking industry and consequently emerged as regional hubs of ship-breaking because most of foreign clients turned to them.

Measures adopted by the government some five years ago, in particular cut in duties on import of ships for dismantling, had kindled hopes of the revival of this industry as it had started to attract entrepreneurs once again. The steel re-rolling mills in the country received 0.500 million tons of scrap from 75 old ships, which were berthed at Gaddani yard between September 2008 to May 2009 for dismantling.

The present capacity of steel production in the country is about four million tons against a demand of over six million tons and the deficit is met through imports. It is envisaged to raise the steel production to 15 million tons by 2015. Presently, steel production units are working below capacity for want of raw material and slack demand.

Spread along BalochistanÕs Gaddani beach, about 50 kilometres north-west of Karachi, ship-breaking had started in the region much before PakistanÕs independence in August, 1947. However, the industry registered a spectacular growth after PakistanÕs independence, enabling it to gate-crash into the club of top ship-breakers of the world by the mid sixties.

In 1985-86, the industry helped the country in making an annual saving of Rs1,500 million, which would otherwise have been spent on import of iron and steel. It earned another Rs500 million in foreign exchange through the export of surplus ship scrap, second hand machinery, generators, air-conditioners and other equipment. It also contributed to the national exchequer, during that financial year, an amount of over Rs1,035 million in customs duty, sales tax and income-tax.

Before independence, Gaddani beach lacked the necessary infrastructure facilities like carpeted roads and utilities like electricity, potable water, telephone and even arrangements for providing first aid or medical help to the workers. The place was uninhabited and there was an acute shortage of labour as well. Majority of workers were uneducated, unskilled and migratory. Even businessmen, who entered the trade, possessed little knowledge of the industry, but they were infused with self-confidence.

Initiation by countries of a process of replacing their unserviceable WW-II vintage war ships with modern and sophisticated vessels provided an international market for the sale of obsolete ships.

A number of other factors also contributed to the rapid growth of the ship-breaking industry in Pakistan. Among others, these included a growing demand for iron and steel for the countryÕs rapidly developing mills, engineering, and other ancillary industries, which consumed iron, steel as well as other non-ferrous metals.

The disruption of normal trade relations with India following the 1965 and 1971 wars, discontinuity in supply of steel and iron products from PakistanÕs only steel mill at Chittagong after the emergence of Bangladesh, and massive devaluation of rupee in 1972 made import of iron and steel products much costlier. This provided a chance to the ship-breaking industry to meet national demand for raw material.

The years between 1969 and 1983 are considered to be the golden period of ship-breaking industry in Pakistan. It was during this period that the activities witnessed a boom and this industry beat many of its international rivals.

Like it or not

Climate change is going to affect the population living in this area, notably in the shape of water scarcity

By Reema Murad

United Nations Climate Change Conference which took place in , Mexico from 29 November to 10 December 2010 offered low expectations due to the results of the 2009 which, unfortunately, only resulted in non-binding agreements.

The draft documents that were drawn up during the Cancun summit admit that deeper carbon cuts are needed but they do not launch a mechanism for achieving the pledges countries have made.

That is not to say that there were no concrete steps taken. A fund was formed with the aim of assisting developing countries to deal with climate change. The Green Climate Fund is intended to raise and disburse $100bn (£64bn) a year by 2020 to protect poor nations against climate impacts and assists them with low-carbon development. Also, a new Adaptation Committee will support countries as they set up climate protection plans. In addition to these agreements reached at the Cancun Summit, parameters for funding developing countries to reduce deforestation have been outlined.

In spite of these agreements, there is a serious question regarding climate change that whether carbon emission cuts on countries will be legally binding.

The Pakistan delegation held a side event at the UN climate talks in Cancun to bring attention to the extreme floods in PakistanÕs history, which was organised by LEAD-Pakistan and was attended by a number of journalists and NGO officials.

Experts have warned that climate change could alter the timing and rate of snow melting, with an initial increase in annual runoff followed eventually by a steep decrease that will severely curb river flows.

Another negative effect of this climate change for Pakistan could be of provoking conflict between Pakistan and India, particularly as India develops dams along the upper riches of the Indus, raising questions in Pakistan over whether falling water availability is due to climate change or to IndiaÕs reservoirs.

The painfully negotiated Indus Water Treaty of 1960 owes its roots to the 1947 separation of India and Pakistan into separate countries. It provides India rights to the natural flow of water of the IndusÕ three eastern tributaries Ñ the Ravi, Sutlej and Beas Ñ while Pakistan controls the main Indus channel itself and two Western rivers, the Jhelum and Chenab.

However, determining what amount of water represents a riverÕs natural flow is growing more difficult as climate change affects glacial runoff and the monsoon. Pakistan has increasingly raised concerns about data sharing and transparency, especially because the upper reaches of all of the rivers lie in Indian-controlled territory, giving that nation greater ability for control of the entire Indus river system.

PakistanÕs anxieties have a great deal to do with its lack of alternative water resources. Seventy-seven percent of its population survives on water from the Indus basin.

The changes threaten to have a major impact on agriculture in both nations as well. According to the U.N Environmental Programme, changes in temperature and precipitation patterns will alter crop yields and growing seasons with a predicted increase in more extreme storms, rainfall and drought. Experts also believe new pests and diseases will emerge, and could seriously leave a negative impact food security in both nations.

Another worrying point to note is that PakistanÕs meteorological department has recorded a 10 to15 percent decrease in winter and summer rainfall in the countryÕs coastal belt and arid plains, with a temperature rise of 0.6 to 1.0 degree Celsius over historical levels.

Per capita water availability in Pakistan has dropped in the last 50 years from 5,600 cubic meters to 1,038 cubic meters today. By 2025 it is predicted to be 809 cubic meters, according to the Pakistan governmentÕs Water and Power Development Authority.

Humid areas of Pakistan, on the other hand, have seen an 18 to 32 percent increase in monsoon rainfall. In India and Pakistan, 70 percent of rain falls during monsoon periods, which cover four months of the year.

In PakistanÕs western Himalayan foothills, where farmers rely on glacial melting from the Karakoram Range and year-round rainfall, both water sources are now reducing. Fruit farmers in the area have already responded by harvesting summer stream water into 3,000 litres gravity-fed storage tanks.

In other areas, flooding is the problem. Pakistan records floods almost every year now, and in India the area affected by flooding more than doubled between 1953 and 2003, and currently represent about 11 percent of its geographic area, according to the World Bank.

The problems facing both sides of the India-Pakistan border are serious because water management systems are inefficient. Poor water management is to a great extent responsible for PakistanÕs water worries, According to a 2006 World Bank report, ground water is being overused with a resultant 20 million tones of salt accumulating in the water system.

India and Pakistan need to form and implement mutually beneficial strategies to overcome the issue of water management as well as to cope with climate change.

Give it a try

Proper solid waste management can be a reality if there is a collective will

By Erum Ashfaq

Proper disposal of solid waste in urban areas is a big issue. With the increase in population, cities encounter a host of problems, solid waste management (SWM) being one of them. Implications of scattered solid waste are many. Developed nations have managed their solid waste by improved collection and disposal techniques.

Less developed countries are generally short of finances, since their priorities are related to the provision of basic necessities and utilities to people. Therefore, the SWM remains lower on priority list. As a result, the entire cites remain crowded with uncollected waste, thus deteriorating living conditions.

Punjab Municipal Services Improvement Project (PMSIP) through Punjab Municipal Development Fund Company (PMDFC) in collaboration with World Bank have initiated a project of solid waste management in Chiniot. The key components of this project are: 1. Equipment, 2. Training, and, 3. sanitary landfill site.

For the purpose, the TMA officials were sent to Korea (worldÕs largest landfill site is in Korea) to learn best practices in the field of solid waste management in the world. A sanitary land ill site is a place where solid waste, generated by the people, is buried between layers of soil and other materials to reduce contamination of the surrounding land.

The landfill sides and bottom are clay lined to keep pollutants from leaking into the soil and water. An approach road is constructed for efficient maneuvering of waste trucks from collection points to the landfill site. The site, a 15 acre land, is a dumping ground of solid waste of Chiniot city for the last ten years.

To dispose of solid waste, preliminary requirement is its adequate collection. Solid waste management cannot be successful if people do not have knowledge about the disposal mechanism. Therefore, it is important to involve stakeholders, who are to play a vital role in the implementation of the project. Otherwise, heavy investment will go waste unless there is cooperation from the public.

The responsibility may not rest solely with the TMA staff. Therefore, a well-coordinated plan involving all stakeholders will lead to an efficient collection system.

One can make educational institutions and mosques the starting point of campaign. The reason being, youngsters have a great adaptability and acceptance for whatever they learn. Specifically, their teachers greatly influence their views and persuade personality development. Children always follow and abide by what they learn in their school for the rest of their lives.

No solid waste programme can run efficiently if the general public is not aware. The awareness campaign is a step forward in bringing about attitudinal change. It always begins at educating the younger lot, inculcating practices at the very beginning of personality development, and years of follow up. Therefore, solid waste management should be made an integral part of primary syllabus.

The core message should be focused on convincing the house wives through their children for adequately disposing off the solid waste. This little effort would add enormously to the waste collection system.

In our campaign for proper disposal of waste in Chiniot, a total of 2523 students, 258 teachers that were randomly selected were conveyed the message. The average household size in Chiniot is 7 persons, assuming each person representing single household, we get 17,661 persons that actually received the message.

Consequently, 16 mosques were selected from 8 Union Councils, where somewhat 1120 persons were addressed. In the same manner, each UC office was assigned to disseminate the information in their respective jurisdiction at the preliminary stage.

The experience in Chiniot led to varying findings. Most of the people were not aware of the massive sanitary landfill project in their town.

Moreover, the success of SWM project in Chiniot greatly depends on TMA handling of operation and maintenance. For TMA needs, adequate staff, i.e., drivers, operators, sanitary workers be inducted on a priority basis, otherwise heavy investments made on project will go waste.

Getting to the point

Expanding the tax base and capping the leakages is the only option to raise the much-needed revenue

By Tahir Ali

No state can operate without a proper and fair tax collection mechanism. But a balanced tax structure has affordable rates, proper load distribution and broad range unlike the present structure which has narrow base, and ever increasing rates.

Pakistan must increase its dismal tax-to-GDP ratio (9 percent) to meet the financial requirements for sustainable development and rehabilitation of the ailing economy. The Federal Board of Revenue (FBR) aims to increase the ratio to 15 percent by 2015 which is a must as high tax to GDP ratio means sustained socio-economic development as more money is there for developing different sectors of economy and for uplifting the living standard of the people.

World powers have been repeatedly urging Pakistan to raise its tax to GDP ratio and that the rich should contribute to the efforts first before asking the international community for money.

US foreign secretary Hillary Clinton has been quoted as saying the most important step Pakistan can take is to pass meaningful reforms to expand its tax base and that the rich and elite support the government and people of Pakistan in their hour of need.

The ratio, unfortunately, has been on the decline due to weak and corrupt tax collection machinery, smuggling, and frail commitment to raise new taxes and bring untapped areas under the tax net. According to an estimate, the government is losing around Rs500 billion annually in tax theft. Governments have always expressed their concerns on the issue but the remedy often resorted to has been defective.

According to a rough estimate, only 2.5 million of the total population of 170 million pays direct taxes which include 1.8 million salaried taxpayers. Most tax payers come in the lowest tax bracket paying meager taxes than they should.

A report jointly released by FBR, Georgia State University, and the World Bank last year said that every man, woman and child in Pakistan is evading taxes worth Rs4,800 per annum and the existing tax gap stood at 67 percent of the actual tax receipts.

The report said narrow tax base, tax evasion, distrust of taxpayers and administrative weaknesses have taken a toll on tax collection and some sectors are more heavily taxed than others. ÒAgriculture contributes about one-fifth of GDP, and amounts to no more than one percent of revenue. Given the shortfall in agriculture and services, industry carries the brunt of the tax burden, and its tax share is three-times as high as its GDP share,Ó it added.

Pakistani leadership has not created good precedents for the people. Hesitant as Pakistani leadership is to cut down on their bourgeoning current expenditure, the shortage of funds in wake of fewer taxes leaves little room with the government other than either to slash development budget or seek expensive foreign debts as has been witnessed in post-flood situation in the country.

Rather than expanding the tax-base by bringing more people into the tax net, the existing tax-payers, mainly the salaried class, have been subjected to increased tax ratio by successive regimes. This has been done this week as well by increasing the ratio of sales tax.

This strategy has been adopted by all the public service departments as well that have increased their tariffs but done little to curtail the theft that has resulted into a loss of an estimated Rs75 billion for Wapda alone. This has resulted in an increased resort to theft in taxes and services by the people and entrepreneurs.

Tax exemptions are making things even worse. The economic survey 2009-10 states that the influential sectors and individuals have managed to secure tax exemptions worth Rs147 billion in major taxes.

The national economy has also received both internal and external shocks during the past more than thirty years. Prolonged load-shedding and law and order situation has dealt severe blows tot the industrial sector in the country.

Direct taxes were Rs520bn as against the initial target of Rs544bn last year. This year it is Rs633bn which also seems impossible given the straight record of the tax collection machinery. This explains why a tax collection target has been lowered recently.

A broadened but rational and balanced tax structure with minimal exemptions is needed but it requires a strong political will to do so on the part of the government.

Shaukat Tarin, former finance minister, had promised to bring agriculture, stock exchanges and real estate business in the tax net for increased revenues, but he was resisted and, instead, shown the door by powerful lobbies.

Last year, former finance minister Hina Rabbani Khar, had said Pakistan had devised a three-year plan for shifting from indirect to direct taxes, expanding the tax base and taxing the untaxed sectors but the idea seems to have been abandoned to the detriment of the people and development.

For industrial growth and to tap the full potential of the industries, the government should overcome energy shortage and build as many big and small hydro-power generation units as possible. More economic activities and development would yield more taxes.

Smuggling to and from Afghanistan and Iran would have to be stopped or controlled and trans-border trade would have to be regulated for raising the tax to GDP ratio. The informal economy is thought to be two times bigger than formal economy of Rs16000 billion. Corruption will have to be brought down.

PakistanÕs tax rules and regulations are complicated, especially for indirect taxes, and some taxpayers have little knowledge on their obligation. This problem needs to be given due attention.

It is strange that the introduction of universal self-assessment scheme, a scheme to allow taxpayers to determine their tax themselves without being questioned by the tax officials and in the absence of income tax audits, has also failed to augment revenue from taxes. What is probably lacking is a commitment on part of the wealthy to support the state. A robust but fair accountability mechanism is the other option to force compliance.

Provincial taxes contribute no more than 0.4 percent of the national GDP, and as a result provincial governments largely depend on fiscal transfers from the central government to meet their expenditures. The inability of provinces to increase their provincial receipts will have to be tackled.

Quick solutions

It remains to be seen if the targets set in the mini budget prove to be too ambitious

By Mehtab Haider

The government has finally taken the crucial decision on the political and economic status quo by unfolding the mini-budget and releasing US national Raymond Davis. These steps , it is believed, would pave the way for far-reaching impacts on PakistanÕs struggling economy and ensure external inflows from multilateral and bilateral creditors to keep budget deficit within the desired limits.

The government took additional measures such as cutting down expenditures by Rs120 billion and imposing new taxes of Rs53 billion through controversial Presidential Ordinances to curtail fiscal deficit below 5.5 percent.

With corrective measures on economic front coupled with release of Raymond Davis, the economic team of the PPP government is expecting that multilateral creditors, including the World Bank and Asian Development Bank will extend budgetary support of over $1 billion before the end of the ongoing fiscal year and that the US would release a maximum amount out of the total commitment of $1.5 billion under the Kerry Lugar Law.

Economists say the government should have taken these steps much earlier with the aim to improve budgetary conditions. Also, the additional measures of Rs173 billion are quite ambitious as the governmentÕs target to generate Rs90 billion during the last three and a half months, including generating Rs37 billion through improving administration and efficiency of FBR and Rs53 billion by imposing 15 percent flood surcharge, etc, might not yield the desired results.

Former Economic Advisor, Dr Ashfaque Hassan, who is currently serving as Dean NUST Business School (NBS), tells TNS that one should appreciate that the government has taken corrective measures though after a delay as these should have been taken soon after floods struck the country and caused a loss of over $10 billion. ÒThe economic team lost the opportunity for taking additional revenue measures in October or November 2010 that could have beneficial economy of this country,Ó he says. Ashfaque also raises doubts about the FBRÕs ability to achieve Rs1600 billion revenue target for June 2011, saying when the tax authorities failed to achieve the desired results during the last eight months, how would it be possible for them to get all targets in the remaining months?

Deputy Chairman Planning Commission, Dr Nadeem Ul Haq, is optimistic that the government took corrective measures after doing a lot of homework and the budget deficit would be curtailed at 5.3 percent of GDP for the ongoing financial year. He says the envisaged budgetary targets are quite achievable and financial discipline would achieve the desired results. The government aims at increasing revenues by improving administration of the FBR to the tune of Rs37 billion and by imposing new taxes to fetch Rs53 billion in the last three and a half months of 2010-11.

Pakistan and the IMF have assessed that the FBR can collect Rs1510 billion and it requires additional measures for netting Rs90 billion for displaying the desired target of Rs1600 billion by June 30, 2011. To achieve the target of Rs37 billion through improving administration of the FBR, tax authorities have identified 0.7 million potential taxpayers who are not included into the tax net. The FBR has estimated that it can collect Rs3 billion by identifying 0.7 million new taxpayers but it is a lengthy process that will take time.

The additional revenue measures have been taken in three major taxes, including one-time 15 percent surcharge on income tax that would yield Rs20 billion, abolishing crucial sales tax exemptions for generating Rs25billion and hiking excise duty up to 2.5 percent to raise Rs8 billion in the remaining period of fiscal year 2010-11. ÒWe will generate Rs53 billion in three major taxes in the remaining period of the current fiscal for achieving the revised target of Rs1,600 billion,Ó Member FBRÕs Inland Revenue Service (IRS), Khawar Khurshid Butt, says while talking to TNS. He is of the view that the envisaged target is not ambitious and the FBR possesses the capacity to achieve the desired results.

The Presidential Ordinances, to this effect, has been issued for imposing 17 percent GST on tractors and jacking up the rate of sugar up to Rs55 per kg from earlier rate of Rs28.88 per kg for imposing 8.5 percent GST. In order to slash down expenditures by Rs120 billion, the government axed development programme by cutting it down to Rs100 billion, revising downward the Public Sector Development Programme (PSDP) from Rs280 billion to Rs180 billion for the current fiscal year.

It has also been decided that the allocation meant for petrol and other entitlements for bureaucrats and parliamentarians will be slashed down.

Ban on recruitments and purchase of new cars, furniture, air-conditioners and computers will save another Rs20 billion in the current fiscal year. The government has also banned unnecessary foreign tours, freezing supplementary grants and reducing all kind of other non-essential expenditures to get the desired results.

Federal Secretary Finance, Dr Waqar Masood, said in a press conference recently that there is no sacred area in terms of cutting down the expenditure side as the full support extended by President, Prime Minister and Pakistan army paved the way for achieving the desired results. The budget deficit, according to him, was projected in the range of over 8 percent of GDP equivalent to Rs1,376 billion for the current fiscal year at one stage which was curtailed by bringing it down to below 5.5 percent of GDP by taking measures both on expenditure and revenue mobilisation sides.

The government has increased prices of POL products by 5 percent and electricity tariff by imposing 2 percent additional surcharge with the aim to cutting down on energy subsidies in the current fiscal year. Officially, the government has passed on only 5 percent burden to domestic consumers in terms of POL products against an increase of 26 percent in prices of international market. The government has absorbed around Rs20 billion by not passing on full burden of POL products in last few months.

Despite raising tariff by 100 percent during the last three years, there is still a gap of 16 percent between the cost of power generation and receivable of cash bleeding the power sector. There is a need to analyse the whole sector in detail and introduce desired reforms to improve the crucial sector.

More taxes, so what?

Are we heading towards economic
stability after the imposition of new taxes?

By Abid Qaiyum Suleri

Taxes imposed through presidential ordinance to add another 53 billion rupees in the national exchequer was a predictable move: not only because it was part of the commitments that the government of Pakistan made with the IMF, but also due to the fact that the government wanted to send a signal to the international community that it can mobilise domestic resources to face emerging economic challenges.

One needs to recall the budget speeches made by Shaukat Tareen and Hafeez Sheikh in 2009 and 2010 respectively. Both of them mentioned that Public Sector Development Programme (PSDP) would be funded through external assistance. Shaukat Tareen was banking on Tokyo Pledges (made during Friends of Pakistan (FoP) forum in Tokyo) to meet fiscal deficit, whereas Hafeez Sheikh had been relying on Kerry LugarÕs (KL) money.

Unfortunately, neither the Tokyo Pledges nor Kerry Lugar aid materialised. Out of the US$ 1.5 billion, KL money allocated for the fiscal year 2010-11, we only received US$210-250m during the first eight months. On top of it, Pakistan faced one of the worst floods in its modern history, which did not only affect economic activities and overall economic growth, but also had a direct cost on flood relief, rehabilitation, and reconstruction.

Pakistan was hoping to receive external assistance to cope with floods, just as it received during the earthquake of 2005. However, it got very strong messages from almost all donor countries for mobilising its domestic resource to increase its revenue.

The budgeted revenue was already short of meeting expenditures. Floods had their direct and indirect impact. Suspension of the last two tranches of IMF programme (due to non-implementation of RGST, lack of reforms in power sector, and lack of reforms in public sector enterprises) further aggravated the fiscal deficit. The suspension also had an impact on other lender and donors. A country where an IMF programme is active has to produce a letter of comfort from IMF if it wants to borrow from other lenders such as the World Bank and Asian Development Bank. Pakistan was not able to produce this letter of comfort for last many months.

Economic situation became worse when the government could not pass on the impact of rise in international fuel prices to domestic consumers due to political compulsions. Likewise, reform in the public sector enterprises were also shelved due to political compulsions.

One completely agrees with some political parties that these measures are painful, especially for poor and lower-middle class. One also agrees that bringing in new taxes through presidential ordinance can never be appreciated in a democratic regime. It is also true that 50 percent of Pakistanis are food-insecure and would not be able to absorb shock from increased power tariffs and increased fuel prices. There is no doubt that the imposition of sales tax on agricultural input would escalate production cost that would not only affect the production capacity of small farmers but would also affect the consumption power of urban consumers.

However, it is also a fact that Pakistan is no more in a position where it can continue providing non-targeted subsides. Having said that, one should not imply that nothing needs to be done for poor and lower-middle class that will face the maximum brunt of macro-economic measures.

I have been writing on these pages that the solution to economic issues lies in political wisdom and not in their politicisation. One can blame the PPP government for various mistakes that it made during last three years. They could not formulate and implement a viable economic agenda. They could not get rid of the accusations of corruption. They did not implement austerity measures, and so on. However, one must be mindful that if interim elections are held today, none of the opposition parties would be willing to form government in the centre as none of them has an easy solution to tackle economic crisis.

Without using the ground realities as excuse to give grace marks to PPP government, one must realise that we would hardly be able to generate 1.6 trillion rupees as revenue. Out of which 860 billion would be spent on debt-servicing. Another 600 billion would be spent on defence and security budget. Thus, the government has around 150 billion rupees in hand to take care of its lavish expenses, day-to-day administration, federal public sector development programme, flood reconstruction, payments to provinces through NFC Award, and petroleum subsidies.

We are back to square one. In order to reduce the gap between income and expenditures the government needs to increase its revenues and reduce its expenditures. While doing this, it also needs to operationalise a well thought-out social protection system to protect the poor and lower-middle class from inflation.

Preparations for the next budget are already on. We would again be relying on loans and external assistance to fill in the wide gaps between budgeted revenue and budgeted expenses. External assistance and loans would not come unless we document our economy, we plug in resource leakage by implementing power-sector reforms, and we reshape loss-making public sector enterprises.

Reliance on external resources can be minimised by boosting our economy through uninterrupted energy supply to small and medium industries that would lead to job creation and economic growth. On top of it, broadening our tax net by bringing non-tax payers in the loop not only through punitive measures but through incentives would also help in reducing loan dependency. Based on a thorough homework, an upper threshold should be determined for tax-free income from agriculture, real estate, services, and wealth gain from stock markets. Beyond that threshold, all type of income should be taxed.

To reduce our expenditures, public sector development programmes should be the last one to face budget cuts. We have to freeze all non-developmental expenditures. The austerity at government level should not mean freezing of budget of various ministries and line departments, thus turning them non-functional. The austerity should come from top and should curtail all discretionary expenses as well as entitlements.

Finally, political parties should propose a convincing and viable social protection system for fifty percent of Pakistanis who are food-insecure. One can learn from Malaysia, Indonesia, and Chile about their fuel subsidy programme. Likewise, the Indian experience of Òminimum employment guarantee schemeÓ can also be improved and replicated in Pakistan.

To me, both the people as well as the government feel the heat Ñ the government because it has to take non-popular decisions, the people due to the impact of those decisions. But the worst crisis that the country is facing today is that of the crisis of trust that does not exist between the government and the international community and between the government and people of Pakistan. Same is the situation between the people of Pakistan and the international community. Trust cannot be built through presidential ordinances and requires a thorough political discussion to reach a broader consensus. The challenge is can we use political wisdom without politicising these issues any further?

Putting the myth to bed

The CIA-ISI nexus has gotten us into a quagmire that can only be redressed if and when
we clearly enunciate what has happened and who has done it

By Aasim Sajjad Akhtar

I have to admit that I had planned to write this week on the massive destruction that was visited upon Japan by nature last week, and the subsequent nuclear fallout. It is true that no country in the world could have been equipped to cope with such a monstrous natural disaster, but it is also true that the global scientific community, politicians, armies and even lay-people know that developing and sustaining nuclear programmes is potentially catastrophic. That the world should have to witness an unfolding Japanese tragedy to be reminded of the perils of nuclear energy is a sad testament to the fallibility of human rationality.

I was then so infuriated by the passing of a resolution by the United Nations Security Council (UNSC) okaying bombing raids on Libya that I started to sit down and write about the sham that are the Ôglobal governanceÕ institutions. It should not be lost on anyone with an interest in international affairs that it has been 10 years since the UNSC approved the invasion and occupation of Afghanistan. Those who supported that decision probably believe that the Afghan people are well on their way to establishing full-blown democracy and are enjoying unbridled levels of freedom, no less. I suppose they will argue that such an international mission of conscience has to be launched at least once a decade.

As it turns out, I will write about neither Japan nor Libya, for the sudden developments in the Raymond Davis affair since Wednesday evening have been compelling enough Ñ even if they are utterly predictable Ñ to divert my gaze away from the rest of the world back to the land of the pure. By chance or design, the controversy generated by Mr. DavisÕs swift departure from the country was compounded on Thursday by a most destructive drone attack in North Waziristan in which a reported 40 civilians were killed.

As I write this, religious parties are gearing up for their standard protest after Friday prayers Ñ they are hoping for large numbers, but the protests that took place on Wednesday evening and Thursday were conspicuous for how small they were. Even so, the government has taken numerous precautions, while the Americans have shut up shop completely, and will only reemerge once they are sure that any commotion has completely died down.

But the commotion will not die down. The invocation of ShariaÕt in the court decision to free Davis notwithstanding, the right-wing lobby has been baying from blood since the day Davis decided to make himself famous. Polarisation across the length and breadth of this country between the ÔsecularistsÕ and the ÔtheocratsÕ has been on the up for years, and in recent months has become acute. The Americans are not about to abandon their strategic interests in the region anytime soon, just as the Pakistani establishment refuses to abandon its strategic assets. And so some other sensational story will emerge in days to come when the furore over Davis dies down. And ordinary Pakistanis will continue to be held hostage to the whims of those who play Great Games, save the world for freedom and democracy, and project the cause of national security.

If there is a silver lining to all of this it is the fact that the machinations of the spymasters are coming under intense scrutiny in a manner that is surely unnerving to both those under the spotlight and their yes-men in the media, religious parties and the intelligentsia. The Central Intelligence Agency (CIA) had already received a good deal of stick even before DavisÕs release, and rightfully so. The CIA has for decades been at the forefront of every major imperialist adventure across the world, employs unspeakable methods in the most cynical ways, and yet remains the most unaccountable government institution since the inception of the modern state. But in the aftermath of the Davis fiasco the CIA can only be condemned as much as its Pakistani counterpart, the Inter-Services Intelligence (ISI).

For the very first time Ñ and this is what happens when the state and dominant classes are riven by potentially irreconcilable internal contradictions Ñ commentators and politicians alike have been forced to admit that the Ôgreater national interestÕ has not been served by the ISIÕs cutting of a deal with the CIA. The judiciary too, the darling of the right, the other ÔincorruptibleÕ institution, has also been exposed. The establishmentÕs delicate public relations act is teetering on the brink.

Having said this, the right-wing has been careful to make sure that it reserves the strongest condemnation for the elected government, reminding the general public that it is the ÔspinelessÕ Pakistan PeopleÕs Party (PPP) at the centre, and the slightly less spineless Pakistan Muslim League Ñ Nawaz (PML-N) in Punjab, that are basically responsible for signing away PakistanÕs sovereignty and the usual garb.

But that is to be expected. As I argued following Shahbaz BhattiÕs death, the right-wing will continue to pitch the tired and simplistic narrative of national security and Islam. It is now up to the rest of us to take the game to the right, for a change, and expose the innumerable holes in their argument. This cannot be done, as our liberals insist on doing, by defending the Raymond DavisÕs of the world (or at the very least not condemning them), but by asserting the simple fact that the CIA-ISI nexus has gotten us into a quagmire that can only be redressed if and when we clearly enunciate what has happened and who has done it. The debate over whether the mullahs have become an autonomous force that is willing and able to challenge the establishment can go on forever. What matters in the here and now is that the establishment and its imperial patron continue to be the bane in the existence of working people. The cause of PakistanÕs long-suffering people will be greatly helped if this basic fact is openly asserted, again and again and again.

In closing, even though I am not one for conspiracy theories, is it not intriguing that the drone attack that followed DavisÕs release was condemned so forcefully by not only the government, but the Chief of Army Staff (COAS) himself? There has been much debate about whether the drones kill ÔterroristsÕ or civilians, and this latest attack will not alter the terms of this debate. The outspoken reaction to the attack is what truly stands out given what has happened in recent days. It surely does not take a rocket scientist to figure out that this is a classic case of the proverbial defenders of the nation reclaiming their mantle as the guardians of our sovereignty. Now is surely the time to put this myth to bed, once and for all.

Mar 9, 2011

An uneasy relationship

Will the PML-N and PPP evolve a working relationship in Punjab?

By Salman Abid

Among other things, the situation in Punjab politics is a throwback to the 1990s in a way. The pronounced conflict between the two major political parties has come on top of agenda in our political discourse. Whether the two political parties would be able to evolve mutual understanding for strengthening the present democratic system in the province and in the country at large is still a big question mark.

The two leading political parties signed the Charter of Democracy (CoD) and made a promise to each other and to the nation to promote democratic values in politics and avoid past mistakes. But that has not happened.

The common people appreciated the idea of the two parties working together to resolve country’s problems by supporting each others’ initiatives. Under the political commitment, the PPP and PML-N formed a coalition government in the Center and in Punjab. But the coalition did not work.

Nawaz Sharif announced to separation of the PML-N from the government at the national level. Later, he also warned that PPP ministers in Punjab government would be shown the door and a new government with the support of PML (Q) unification block would be formed, excluding the PPP.

The major problem is the trust deficit between both the political parties in each other. Unfortunately, at the very initial stage both the parties did not develop trust with the PML-N walking out from the federal cabinet on the issue of restoration of judges. Interestingly, according to one analysis, PML-N did not openly resist the government and continued supporting the PPP as an opposition party in the national interest. The same happened in Punjab.

But now the game is over and both the parties are openly standing against each other, especially PML-N. At many occasions, the aggressive elements in PML-N have stood against the PPP by challenging it and demanding their ministers resign from the provincial cabinet. At first, the PPP did not pay heed and refused to resign. Eventually they did.

Interestingly, when the coalition government was being formed in Punjab, the PML-N had started supporting PML-Q’s unification block. This became the turning point of the relations between the two political parties. The formation of unification block with the support of PML-N) served as a serious wake-up call for PPP in Punjab. The process had started when former Governor of Punjab Salman Taseer and PML-Q were noticed forming an understanding to bring some big changes to the provincial government.

It is now clear that both the parties have some aggressive elements within them. That is abundantly clear from the PML-N’s 10-point agenda for the ‘larger national interest’. The PML-N leadership loudly criticised the PPP for having failed to implement the 10-point agenda.

It is important to discuss and highlight where the PML-N stands on issues. While the PPP agrees in principle to implement the agenda the point of conflict is regarding the time table for the implementation. Nawaz Sharif flayed the PPP for having failed to implement the 10-point agenda within the given time frame of 45 days. Who form PML-N is answerable to disclose the progress and process towards implementation of 10-point agenda in Punjab?

Nawaz Sharif is considered by his supporters as a leading political leader with a commitment to strengthen democratic institutions in the country and avoiding undemocratic norms in the political process. But, unfortunately, the situation is worsening and lots of issues are at a critical stage in politics.

People are seriously criticizing Shahbaz Sharif for his centralised approach in dealing and handling issues in the province. Everyone, including bureaucracy, public representatives and civil society have serious reservations on the centralised approach of governance in Punjab. The Punjab Chief Minister Main Shahbaz Sharif does not seem to believe in decentralization of power. The avoidance of local government elections and appointment of administrators is one example. Javaid Hashmi, a senior PML-N leader, once criticised party’s internal democratic norms openly and suggested that party leader needs to re- visit current political practices.

The common man is also confused about what is going on in the country. People are questioning where Nawaz Sharif stands, what he expects, and will do in response to the current political crisis of the country. There is no denying that there is a crisis of governance in the country and the PPP government is not dealing with it in a proper manner. But is it only the PPP which failed in handling governance crisis? Yes, the major responsibility lies with the central government but we should understand that if we only criticise the PPP, it would be unfair.

Some voices in the PML-N want midterm elections in the country and are insisting the PPP government take a fresh mandate from the public. But we should remember that if the political system derails once again the ultimate beneficiary would be undemocratic forces. Having said that, the PPP should also evaluate its own performance.

The politics of horse-trading pushed the country to a point where there was a deadlock. The formation of unification block is against the CoD. The PML-N has proved they have not learned from their past mistakes and are repeating the politics of the 1990s. The PML-N should realise the implications of the steps they are taking. Leaders of both the parties should display political maturity and know the political implications faced by the country at the moment.

Both the political parties should realise why people are not accepting their political and economic ‘achievements’ either at the center or at provincial level.

Both of them have to realise that democracy and democratic practices in the country have not taken root as yet.

With strings attached

Has the Raymond Davis case choked the US aid flow to Pakistan?

By Mehtab Haider

The increasing strain between the US and Pakistan relations over Raymond Davis issue is having an impact on the fragile economic situation of our country. Even earlier, the US had used delaying tactics in releasing funds under the Kerry Lugar Law (KLL) by citing different excuses, thus increasing the problems of the economic managers.

The PPP government is also adding fuel to the fire by demonstrating its indecisiveness on key economic issues. Despite making commitment to provide $1.5 billion under KLL on per annum basis, the US has so far released around $200 to $250 million in the first eight-month (July-Feb) period of the current fiscal year.

The US reimbursed around $732 million under the Coalition Support Fund (CSF) for the services rendered by Pakistan to flush out Taliban and Al-Qaeda supporters from the tribal areas of the Pak-Afghan border against the bills of $3 billion.

After Raymond Davis case, the US has not paid any fresh installment under the CSF and there is a growing concern in Pakistan that Washington would use this money as leverage to convince the PPP government to provide diplomatic immunity to Raymond Davis. The issue of diplomatic immunity is going to be decided by the government and subsequently by the courts.

To come out from the fiscal morass, there is no other solution but to generate domestic resources by broadening the tax base and impose taxes on agriculture income, real estate, and services sectors. This may sound an abrupt conclusion but fearing the international community led by the US is not ready to assist Islamabad without fulfilling its political and strategic agenda, options should be explored. But is that logical to think in these terms at this point in time?

The government had estimated to get Rs186 billion external resources from multilateral and bilateral creditors to finance its budget deficit target of 4 percent of GDP which was equivalent to Rs688 billion for 2010-11. In the post flood situation, the government was forced to jack up the budget deficit target to 4.7 percent of the GDP in the wake of increased resource requirements to compensate the victims of floods.

Now the emerging economic realities show that the government was failing miserably on all fronts, including evolving a consensus on taxation measures, including imposition of Reformed General Sales Tax (RGST), flood surcharge and hike excise duty, reducing expenditures as well as obtaining the desired budgetary support from the World Bank, Asian Development Bank, USA, and others.

Estimates prepared by the finance division show that the government plans to impose 15 percent flood surcharge as against the earlier rate of 10 percent and excise duty to 2.5 percent from the rate of 1 percent from April this year through Presidential Ordinance to generate Rs26 billion in the last three months (April-June) period of 2010-11.

If taken, these taxation measures would help the government to jack up the FBR’s target to Rs1,630 billion from Rs1604 billion and would help curtail the deficit in the range of 5.5 to 6 percent of the GDP. But this desired fiscal deficit target will mainly depend upon the government’s ability to reduce its expenditures as well as generate the required budgetary support from external inflows.

Renowned economist, Dr Ashfaque Hassan Khan, who is Dean NUST Business School tells TNS that “Pakistan requires letter of comfort from the IMF for obtaining budgetary support from other donors as the IMF team analysed debt sustainability of the country to demonstrate that the recipient country’s debt situation was comfortable and there will be no issues for making repayments of their loans.”

Ashfaque also says that the team of the IMF, which visited Pakistan recently, was not meant to undertake review of the economy but to gauge whether Pakistan possessed the capacity to deliver on key economic reforms agenda in the shape of imposing RGST, approving State Bank of Pakistan’s fresh act and doing away with power subsidies and tackling the monster of circular debt. “If nothing has been achieved substantially on key reforms agenda then the IMF staff will not be able to convince its Board of Directors for the release of funds.”

A senior official of the finance division, who does not want to be identified, says the government had committed itself to economic reforms. One way of doing it is by raising the POL prices. This is not an easy decision to take keeping in view its political cost, he says, adding, “We are quite confident that the IMF team would show its confidence as we are going to unveil our macro-economic and fiscal framework by making efforts to restrict budget deficit within the desired limit of less than 5.5 percent of the GDP for end June 2011,” he maintains.

The official data of the finance ministry shows a different picture. It says financial assistance from the international community for budgetary support declined by over 50 percent during July-Dec 2010 compared to the same period in 2009. The government received external inflows to the tune of Rs46.999 billion in July-Dec against Rs110.251 billion in the same period of the previous fiscal, indicating a drop of Rs54 billion. Out of much trumpeted Tokyo pledges of $5.2 billion that was termed as major success by the PPP government, the received inflows amount to a paltry $18 million (Rs1.491 billion) in the first six months of the current fiscal year.

Donors apply three conditions for releasing funds to Pakistan -- imposition of Reformed General Sales Tax (RGST), ending power sector subsidies, and increasing POL prices in months ahead.