Chak Bamu
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Its Eid. Do not tag me. Take your voyeurist pleasure from this article but do not disturb me.
“CPEC is not a game-changer, it’s game over” : Kaiser Bengali
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PAKISTANFOREVER
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YAWN......YAWN........indians said EXACTLY the same with regards to Pakistan becoming a nuclear weapons state. We all know what happened to that indianism. Just as then so is now.
The OP is extremely laughable as it conveys and truely reflects how desperate and rattled indians are about CPEC. So much so they have to post articles about it.........
The indians still havn't got over the fact that they are far too weak, powerless and helpless to do anyrhing to a nation that is more than 7x smaller than it and doesn't habe abundant access to the world's most advanced weapons systems like india does........absloutely PATHETIC...........
Arsalan 345
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I think he raised some good points specially related to local companies.local companies might get affected.we still don't know the details of this project but I know china,they are not enemy.they are best friends and it's possible that Chinese will guide this country towards prosperity.
Indus Pakistan
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I read the article. Honestly there is nothing and I mean nothing new there that I have not read before. Typical doom and gloom for sake of it by KB. There are long list of failings by the current government which are true but no differant [indeed slightly better] then the previous governmrents. So nothing new there.
That brings us to the subject of CPEC. KB has declared that as "game over" on what grounds? To sum them up they are -
1. CPEC is costing money which we will have to pay back. Well like any investment you spend [invest in something] hoping to make profut from that investment. Time will tell like any investment whether this investment will be a success. I cetainly think so. Take for example the Karachi-Peshawar motorway. I drew this model of the Pakistan economy [below[ which shows how everything moves to and from Karachi for 200 million people. The motorway will reduce the costs and speed up the trading of goods. This will give a return to the economy far greater then the cost of the motorway. For example if I set up a manufacturing plant in Taxila my products can reach Karachi for export faster and cheaper then before. This will improve efficiency.
2. Power Plants. This is where the report is even more silly by KB. Power plants have to use some type of energy source. Hydel, windpower, solar, coal, gas, furnace oil. Even a quick glance at Pakistan's energy profile shows that too much is sector relies on furnace oil. This is the most expensive way of producing electricity and ubject to international oil price hikes. On the contrary Pakistan's energy profile is conspicious by the absence of coal production. This is amazing. 35% goes on expensive oil imports. Compare this with India which has 1% oil and 70% coal.
Pak Coal - Less then 1%
India Coal- More then 69%
Expensive Oil
India - Less then 1%
Pak - More then 35%
If you look at other countries coal always forms a significant chunk of production. Oil is the most expensive way of producing power. Only filthy oil rich countries like Saudia or UAE can afford oil as power. Yet our governments have made one of the most poorest countries on earth Pakistan turn to oil. I mean somebody somewhere needs hanging for doing this. What sort of perverted logic is this?
The ideal way forward is hydel/solar and coal. And that is exactly what is being done under CPEC. Indeed the biggest % of CPEC investment is on energy sector. Once these projects switch on they will save Pakistan the massively expensive oil imports. That real saving can be used by Pakistan to either pay off the debts or gave cheap electricty to the poor. Of course this is Pakistan. No one magic pill can fix problems. There are also problems of theft, line lossess etc but they also need tackling but that does not mean you don't start with the biggest source of problem. Using the most expensive energy source - oil.
India
@SpArK Can you please look at the electricty generating source charts for Pak/India. Anything striking about them?
That brings us to the subject of CPEC. KB has declared that as "game over" on what grounds? To sum them up they are -
1. CPEC is costing money which we will have to pay back. Well like any investment you spend [invest in something] hoping to make profut from that investment. Time will tell like any investment whether this investment will be a success. I cetainly think so. Take for example the Karachi-Peshawar motorway. I drew this model of the Pakistan economy [below[ which shows how everything moves to and from Karachi for 200 million people. The motorway will reduce the costs and speed up the trading of goods. This will give a return to the economy far greater then the cost of the motorway. For example if I set up a manufacturing plant in Taxila my products can reach Karachi for export faster and cheaper then before. This will improve efficiency.
2. Power Plants. This is where the report is even more silly by KB. Power plants have to use some type of energy source. Hydel, windpower, solar, coal, gas, furnace oil. Even a quick glance at Pakistan's energy profile shows that too much is sector relies on furnace oil. This is the most expensive way of producing electricity and ubject to international oil price hikes. On the contrary Pakistan's energy profile is conspicious by the absence of coal production. This is amazing. 35% goes on expensive oil imports. Compare this with India which has 1% oil and 70% coal.
Pak Coal - Less then 1%
India Coal- More then 69%
Expensive Oil
India - Less then 1%
Pak - More then 35%
If you look at other countries coal always forms a significant chunk of production. Oil is the most expensive way of producing power. Only filthy oil rich countries like Saudia or UAE can afford oil as power. Yet our governments have made one of the most poorest countries on earth Pakistan turn to oil. I mean somebody somewhere needs hanging for doing this. What sort of perverted logic is this?
The ideal way forward is hydel/solar and coal. And that is exactly what is being done under CPEC. Indeed the biggest % of CPEC investment is on energy sector. Once these projects switch on they will save Pakistan the massively expensive oil imports. That real saving can be used by Pakistan to either pay off the debts or gave cheap electricty to the poor. Of course this is Pakistan. No one magic pill can fix problems. There are also problems of theft, line lossess etc but they also need tackling but that does not mean you don't start with the biggest source of problem. Using the most expensive energy source - oil.
India
@SpArK Can you please look at the electricty generating source charts for Pak/India. Anything striking about them?
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SpArK
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- Manufacturing is constantly on the decline so the domestic demand is fulfilled by importing products from abroad. Even in this process, easy and quick money is made by importers by under-invoicing and evading duties in collusion with the Federal Board of Revenue (FBR) officials.
- The cost of doing business is too high and it’s a fact that they have to pay different taxes whose value adds up to around 51 per cent.
- Even worse is the government’s habit of seeking expensive loans and raising funds through floating financial products such as Euro Bonds and Sukuk Bonds in the international market. The promised rate of return is too high when compared to similar products launched by other countries.
- The Chinese companies play smart and get excellent returns on their investments. It has proven difficult to extract much from them. China has a 10-year control of the Saindak Copper and Gold Project and gets gold as a by-product of the mining.
- And one more thing; people believe all the money is coming from China. This is not so. Pakistan is spending a lot from of its own resources without calculating what it stands to gain or lose. All the CPEC roads are being built by Pakistan. Besides, the cost of providing security to the CPEC-related Chinese workforce and infrastructure falls on us.
- Gwadar cannot become Dubai. It is a seaport built for the purpose of re-exporting Chinese products brought into Pakistan via a land route. I think it is not possible to establish industrial zones and a mega city in Gwadar because there is no water available to support this development.
All the above points must be lie and just imaginary literature by some guy with bengali as second name.
So I fully agree with Pakistani members who are shouting bharti have constipation, they are jealous, they envious.. etc etc.
Pakistani members are spot on.
PakSword
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At least two big four accounting firms have planned to open their offices in Gawadar in the next three to five years..
One firm has already taken the Pakistani office under Middle East office organization.. This shows what's ahead..
One firm has already taken the Pakistani office under Middle East office organization.. This shows what's ahead..
Indus Pakistan
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Look at these figures @SpArK and I want your comments about them?Look at these shocking facts about Pakistan's power sector. A enemy of Pakistan could have not have done a better job of punishing the country.
Pak Coal - Less then 1%
India Coal- More then 69%
Expensive Oil
India - Less then 1%
Pak - More then 35%
You do understand that the biggest chunk of CPEC investment is going to change Pakistans addiction to oil. Dams and coal fired stations are being built to reduce the oil addiction. Please tell me what effects that will have and why that is so bad?
Pak Coal - Less then 1%
India Coal- More then 69%
Expensive Oil
India - Less then 1%
Pak - More then 35%
You do understand that the biggest chunk of CPEC investment is going to change Pakistans addiction to oil. Dams and coal fired stations are being built to reduce the oil addiction. Please tell me what effects that will have and why that is so bad?
SpArK
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Traditionally we dont encourage oil based power projects and are expecting the share percentage of renewable and nuclear based power projects to increase.
And regarding Coal being the preferred is we produce around 605 million tons, making us the third largest producer globally. We are also the third largest importer of coal with a total of 160 million tons in imports, trailing behind China and Japan and has a healthy reserve. But not much new projects will come up as renewable big projects in more numbers are encouraged.
Your observation regarding more coal consumption in future by Pakistan to reduce oil demand is true but this is not a right time to begin on such projects as evident from the ecological changes we are facing worldwide over recent years.
Pakistan like India situates near equator and must negotiate with China regarding more and more solar plants , not massive but more in numbers as Pakistan gets more than sufficient sunlight through out the year in most areas.
VCheng
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my2cents
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If you are going to run these coal powered stations on imported coal then you have just replaced oil with coal. Both are commodities that you need to import and net effect on your exchequer is the same.
Indus Pakistan
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One look at the facts below tells us simple facts. A friend of Pakistan would want to free Pakistan's oil addiction. A enemy would want Pakistan to continue to be addictd to expensive oil.
Pak Coal - Less then 1%
India Coal- More then 69%
Expensive Oil
India - Less then 1%
Pak - More then 35%
So what is China doing? Most of the $60 billion under CPEC is going into electricty power generation. Only a small amount - I believe about $8 billion of the $60 billion is going on roads etc. Rest is all going on hydel dams, coal fired generating stations, wind farms, solar farms all intended to tackle the crippling shortage of electricty and reduce is even more crippling oil import costs. Is this not exactly what a good friend would advise and help to do? Please look below at the CPEC chart. 15 of the biggest [most] under CPEC are energy related and designed to free Pakistan from the curse of oil addiction and and expensive oil imports that wreck the trade balance every year.
As can be seen only few are on roads and other infrastructure. Indeed when I looked at the CPEC projects honestly I know it was not Pakistani designed. It was too good to have been designed by our corrupt officials or inept people like this Kaiser Bengali. It is baskets like him to made Pakistan hostage to oil imports.
Here below is extract from Diplomat -
Of course, Chinese investment in Pakistan’s energy sector predate the CPEC — just look at perhaps the most famous joint project, the $10 billion expansion of the Karachi nuclear power plant. But the scale of the CPEC energy projects are mind-boggling.
All told, 14 Chinese-constructed energy projects in Pakistan tied to the CPEC are supposed to provide an additional 10,400 MW of electricity by March 2018 – more than enough to make up for Pakistan’s 2015 energy shortfall of 4,500 MW. And that’s only part of the story. According to China Daily, there are a total of 21 planned energy projects in the works under the CPEC framework. Altogether, these projects should eventually produce 16,400 MW of power, roughly the same as Pakistan’s current capacity.
As they say, the best-laid plans often go awry, so it’s likely not every project will be completed on schedule (or even at all). But the sheer scale of China’s energy plans for the CPEC ensures that it has a chance to be a game-changer for Pakistan, where rolling blackouts are common due to energy shortages.
http://thediplomat.com/2016/01/china-powers-up-pakistan-the-energy-component-of-the-cpec/
The only issue left is that bane of the developing countries. Will these projects ever be built or will it be all talk and on the ground one brick laid every year. Well I have been following the CPEC projects. True to Chinese form like they have done inside their own country the speed at which these projects are taking shape is shocking. Entire new coal fired generating stations have sprouted out on the flat Indus basin in less than year. Entire new motorways have coursed through the country like weeds. The speed of construction is gobsmacking.
So what is the worse that could happen to Pakistan at end of CPEC?
1. Pakistan's expensive oil addiction is over. Saving billions of dollars in imports of expensive oil.
2. Pakistan's crippling load shedding is over. Saving industry and normal citizens from degradation.
3. A class motorway network linking the entire length of country to the port of Karachi making import and export easier. driving down costs and saving money. In doing so improving efficiency.
All I can say is thank you China !
Electricity coal generating stations being built under CPEC
@Chinese-Dragon
Pak Coal - Less then 1%
India Coal- More then 69%
Expensive Oil
India - Less then 1%
Pak - More then 35%
So what is China doing? Most of the $60 billion under CPEC is going into electricty power generation. Only a small amount - I believe about $8 billion of the $60 billion is going on roads etc. Rest is all going on hydel dams, coal fired generating stations, wind farms, solar farms all intended to tackle the crippling shortage of electricty and reduce is even more crippling oil import costs. Is this not exactly what a good friend would advise and help to do? Please look below at the CPEC chart. 15 of the biggest [most] under CPEC are energy related and designed to free Pakistan from the curse of oil addiction and and expensive oil imports that wreck the trade balance every year.
As can be seen only few are on roads and other infrastructure. Indeed when I looked at the CPEC projects honestly I know it was not Pakistani designed. It was too good to have been designed by our corrupt officials or inept people like this Kaiser Bengali. It is baskets like him to made Pakistan hostage to oil imports.
Here below is extract from Diplomat -
Of course, Chinese investment in Pakistan’s energy sector predate the CPEC — just look at perhaps the most famous joint project, the $10 billion expansion of the Karachi nuclear power plant. But the scale of the CPEC energy projects are mind-boggling.
All told, 14 Chinese-constructed energy projects in Pakistan tied to the CPEC are supposed to provide an additional 10,400 MW of electricity by March 2018 – more than enough to make up for Pakistan’s 2015 energy shortfall of 4,500 MW. And that’s only part of the story. According to China Daily, there are a total of 21 planned energy projects in the works under the CPEC framework. Altogether, these projects should eventually produce 16,400 MW of power, roughly the same as Pakistan’s current capacity.
As they say, the best-laid plans often go awry, so it’s likely not every project will be completed on schedule (or even at all). But the sheer scale of China’s energy plans for the CPEC ensures that it has a chance to be a game-changer for Pakistan, where rolling blackouts are common due to energy shortages.
http://thediplomat.com/2016/01/china-powers-up-pakistan-the-energy-component-of-the-cpec/
The only issue left is that bane of the developing countries. Will these projects ever be built or will it be all talk and on the ground one brick laid every year. Well I have been following the CPEC projects. True to Chinese form like they have done inside their own country the speed at which these projects are taking shape is shocking. Entire new coal fired generating stations have sprouted out on the flat Indus basin in less than year. Entire new motorways have coursed through the country like weeds. The speed of construction is gobsmacking.
So what is the worse that could happen to Pakistan at end of CPEC?
1. Pakistan's expensive oil addiction is over. Saving billions of dollars in imports of expensive oil.
2. Pakistan's crippling load shedding is over. Saving industry and normal citizens from degradation.
3. A class motorway network linking the entire length of country to the port of Karachi making import and export easier. driving down costs and saving money. In doing so improving efficiency.
All I can say is thank you China !
Electricity coal generating stations being built under CPEC
@Chinese-Dragon
Well if your prepared to lend you a*ss as source of free gas supply we don't need to import anything. But since you are not prepared to let your backside get tapped we have no other choice. The mix Pak is going for is Hydro, solar, wind but we also need coal. Between coal and oil the former is cheaper and less liable to price fluctuations. In addition some of the coal will be poor grade local Thar coal which will be mixed with the imported coal to create the right mix.
Developing countries do not have the luxury to play "green footprint" games. That is developed world problem. Right now Pak needs to substitute oil for coal. Over the horizion hydro and solar is the way forward but that has long gestation period. Coal can sort out the immediate issues. Developing coountry like Pakistan does not have luxury to have load sheding for 12 hours for next decade and half while the hydro projects gestate.
kris
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YAWN......YAWN........indians said EXACTLY the same with regards to Pakistan becoming a nuclear weapons state. We all know what happened to that indianism. Just as then so is now.
The OP is extremely laughable as it conveys and truely reflects how desperate and rattled indians are about CPEC. So much so they have to post articles about it.........
The indians still havn't got over the fact that they are far too weak, powerless and helpless to do anyrhing to a nation that is more than 7x smaller than it and doesn't habe abundant access to the world's most advanced weapons systems like india does........absloutely PATHETIC...........
Does this make you happy??
Why to give blank check to China when you have a far too weak, powerless and helpless to do anything nation - india
Article is an interview of a Pakistani economist...
Never live a life of hatred, it hurts you more than anyone
PAKISTANFOREVER
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Kaiser Bengali is a senior economist who has served as advisor to the chief minister Balochistan as well as consultant/national coordinator for Benazir Income Support Programme (BISP), Government of Pakistan. Besides, he has headed research institutions including Social Policy and Development Centre (SPDC), Karachi, and Sustainable Development Policy Institute (SDPI), Islamabad. He has done his Masters in Economics from Boston University, USA, and has a PhD from Karachi University. He has vast experience in the fields of teaching, research, publications and finance.
Here he talks to The News on Sunday (TNS) about the country’s economic policies, the priorities of those managing the economy, the economic challenges faced at local and international levels, the China-Pakistan Economic Corridor (CPEC) and its relationship with Gwadar, development of the social sector, our falling exports and foreign reserves and other related topics. Excerpts of the interview follow:
The News on Sunday (TNS): The sitting government regularly boasts of robust growth figures. Are these real?
Kaiser Bengali (KB): I would simply say Ishaq Dar, who had been heading the team, follows a revenue-based approach to show growth and his focus is on increasing taxes. The result of this is that those already in the tax net get further burdened. The World Bank is also pressuring the government to increase revenue collection. We can call it a neo-liberal economy. The policies are nothing but patchwork and are quite similar to those pursued by Shaukat Aziz.
Shaukat Aziz would probably claim Pakistan was becoming a services-oriented economy. But my point is that for a country of 200 million, it is not a good choice to have two-thirds of it unskilled. This country needs jobs for which the manufacturing sector will have to be strengthened. Even Donald Trump is talking about reviving manufacturing and creating jobs this way.
The growth figures shared with us do not have any credibility as there is no reliable data to back them. In fact, the calculations are based mainly on the revenue collected and not on other important indicators that should have been considered.
As I said earlier, the World Bank is a party to all this so it does not question the credibility of these figures. Here I would quote the example of the livestock survey presented by the government which is completely flawed and based on estimates. Much after the results were revealed, we found that no proper ground work was conducted to reach the conclusions they were claiming.
The government just paints a flowery picture: so while sharing the attractive growth figures, they do not share that the manufacturing and agricultural sectors are nosediving. The growth of manufacturing should be around eight per cent but in Pakistan it is just four-and-a-half per cent per annum. Similarly, the growth of agriculture sector has hovered around one per cent per annum on average and there have been times when it has experienced negative growth as well. The government must explain why this is happening; especially why a purely agriculturally country cannot even feed its agro-based industry properly. It is common knowledge that the cotton crop has suffered in the past couple of years. The growth of the manufacturing sector is vital as it helps reduce unemployment but unfortunately it is not a priority here.
“I think our economy can best be described as a casino economy. This means that we are investing in real estate, stocks etc. in anticipation of high returns within a small span of time; there are no long-term goals in sight. Manufacturing is constantly on the decline so the domestic demand is fulfilled by importing products from abroad.”
TNS: In the current scenario, what do you think are the driving forces of our economy?
KB: I think our economy can best be described as a casino economy. This means that we are investing in real estate, stocks etc. in anticipation of high returns within a small span of time; there are no long-term goals in sight. Manufacturing is constantly on the decline so the domestic demand is fulfilled by importing products from abroad. Even in this process, easy and quick money is made by importers by under-invoicing and evading duties in collusion with the Federal Board of Revenue (FBR) officials.
There is hardly any realisation about how dangerous this practice can be for the country’s economy and its manufacturing sector. It’s pitiful that while importers are being facilitated, manufacturers are getting crushed. The cost of doing business is too high and it’s a fact that they have to pay different taxes whose value adds up to around 51 per cent.
Even worse is the government’s habit of seeking expensive loans and raising funds through floating financial products such as Euro Bonds and Sukuk Bonds in the international market. The promised rate of return is too high when compared to similar products launched by other countries. After launching such products, the government claims success, stating these have been oversubscribed in the international market. It’s a matter of common sense to understand that buyers rush for products that offer an exorbitant rate of return. The real test of the government will be when these mature and it has to pay dividends to the buyers.
TNS: The PML-N government promised an end to the power crisis. How successful have they been?
KB: Yes, it’s true that they capitalised on this promise and got political mileage out of it. They are pursuing several projects but my point is that the basic issues persist and are yet to be resolved. For example, the circular debt is once again out of control and close to Rs800 billion.
When the incumbent government came into power, it printed currency notes to pay off the circular debt. This solved nothing. You see the problem is still there and it will remain there till the structural issues of the power sector are resolved. It is not possible to produce expensive electricity and sell it for less than its cost, and at the same time offer preferential tariffs to certain sectors. Power theft and line losses further add to the burden.
The Chinese companies play smart and get excellent returns on their investments. It has proven difficult to extract much from them. China has a 10-year control of the Saindak Copper and Gold Project and gets gold as a by-product of the mining.
TNS: A lot of hopes are pinned on CPEC. Do you think it can really be the game-changer?
KB: I do not think Pakistan will gain a lot from the CPEC initiative which is still shrouded in mystery. There are no details available and the government is not ready to answer any questions. Instead of a game-changer; CPEC may signify a game over. I see the Corridor creating threats for local businesses and fear that it won’t be a win-win situation for both countries.
For example, since Chinese companies are tax-exempt they will bring everything from China and hence they will have no reliance on Pakistani businesses to fulfil their demands. This has shattered the dreams of many local companies that planned to expand their production facilities in anticipation of receiving orders from these Chinese companies. The association of cable operators in Pakistan is one such entity that was expecting a big boost in its sale volumes, but now they are struggling to sustain their existing sale figures.
The Chinese companies play smart and get excellent returns on their investments. It has proven difficult to extract much from them. China has a 10-year control of the Saindak Copper and Gold Project and gets gold as a by-product of the mining. Also, China does not share how much ore it is taking from Pakistan or how much copper it is extracting or what is the quality of gold obtained as a by-product. And nobody can ask them these questions.
They will definitely watch their interest this time also, so it becomes the duty of the government to secure the country’s interests. I raised this issue and presented 12 questions on CPEC to the government but it has not provided any answer except one “yes” to the question about whether any feasibility has been conducted on CPEC. However, they have no documents or figures to support this claim. Furthermore, there is no document on how the toll money, if at all, will be shared between the provinces through which the CPEC routes passes.
And one more thing; people believe all the money is coming from China. This is not so. Pakistan is spending a lot from of its own resources without calculating what it stands to gain or lose. All the CPEC roads are being built by Pakistan. Besides, the cost of providing security to the CPEC-related Chinese workforce and infrastructure falls on us. There are reports that NEPRA has allowed transferring this security cost to the citizens of Pakistan. This will be done by adding it to our electricity bills just like the PTV license fee that they have to pay.
Those celebrating it must know that the above USD 50 billion loans and Foreign Direct Investments (FDI) will ultimately impact the country when there will be an outflow of loan payments and profit remittances to Chinese companies. This will put immense pressure on foreign reserves which are already dwindling. Unfortunately, Pakistan has done no planning on how funds and revenues will be generated for these payments.
Another fear is that the trade imbalance with China will further widen. The Free Trade Agreement (FTA) between Pakistan and China has already resulted in trade imbalances with Pakistani exports being far less than its imports from China. This is about formal trade; the flooding of Pakistani markets with Chinese products is in addition to it. You will be surprised to know that many Pakistani manufacturers have stopped production at their units. Instead, they import products from China and supply them to the market in Pakistani packaging. Buyers think the product is manufactured in Pakistan which is not the case.
The environmental cost of CPEC will also be big. One reason is that no EIAs have been done to offset this. Several coal-powered projects based on imported raw material have been launched. This dependence on imported fuel will increase pressure on rupee. The effective rate of US dollar is already Rs120 but it has been kept between Rs104 and Rs106 artificially. Just imagine what will be the situation when Pakistan will have to honour the payback commitments.
TNS: How much does Pakistan stand to gain from the development of Gwadar?
KB: I have said it earlier and will say it again that Gwadar cannot become Dubai. It is a seaport built for the purpose of re-exporting Chinese products brought into Pakistan via a land route. I think it is not possible to establish industrial zones and a mega city in Gwadar because there is no water available to support this development.
The environmental cost of CPEC will also be big. One reason is that no EIAs have been done to offset this. Several coal-powered projects based on imported raw material have been launched. This dependence on imported fuel will increase pressure on rupee.
If we recall, Gwadar came into the spotlight after the Kargil war because a need was felt to have a port for naval purposes. India tried to blockade the port at Karachi and sent ships but this plan failed. As the sea is rough in the summer, the crew got sea-sick and returned. The Karachi-Gwadar Road (Coastal Highway) was also constructed during that time, mainly for defence reasons. Till then it had been completely neglected and its economic potential had not come under discussion. I am not against building infrastructure for security reasons; my point is that we must acknowledge it was for defence reasons and not to exploit its economic potential.
Can one believe it is for the first time that Gwadar and Quetta have been connected via a direct road?
The issue is that one tanker of drinking water brought from as far as Mirani Dam (150 kilometres away from Gwadar) costs around Rs25,000. You will be amazed to hear that water theft from houses in Gwadar is quite common. What happens is that thieves enter houses and walk away with household containers carrying drinking water. They won’t steal motorcycles or other belongings, it’s water that they want.
The government does talk about the option of setting up a desalination plant but I do not think it is workable because of its huge fixed and operational costs. It is estimated that it will cost Rs750 million a year to run such a plant. China is apparently not ready to give funds, so Pakistan will have to cover the cost. I do not think Pakistan will be able to take this responsibility because its share of revenues from Gwadar Port is only 9 per cent while China has 91 per cent of the share.
TNS: The government talks of increasing the tax net but this has not happened. Why?
KB: I think this is because the moral legitimacy to demand taxes has been lost and the reason for this is that people do not recieve anything in return. In developed countries with a high tax-to-GDP ratio, people are motivated to pay taxes because they get services and privileges in return. They believe they are paying taxes that are ultimately being spent on their welfare and well-being, but in Pakistan there is a strong mistrust among citizens and the state. In Canada, the tax rates are high but people pay happily because facilities like education and health are free and of high quality.
In Pakistan this is not the case. Take the example of Sindh Industrial and Trading Estate (SITE) and the Korangi industrial area in Karachi. The owners of industrial units set up here pay billions of rupees in tax but the government cannot even provide proper roads to them. They have to pay bribes to have their petty issues resolved and are harassed by the state machinery.
The government is only interested in having a good budget to show and for this it plays with figures and deviates and digresses from original plans. It is quite common to find block budgetary allocations made for certain sectors without going into specific details. Besides, as I mentioned earlier, it takes further loans to pay off earlier loans and build up foreign reserves —- although this helps paint a pretty picture, it has severe repercussions in the long run. Similarly, the government of Pakistan received USD1.5 billion to maintain its reserves. This is just like borrowing money from someone to show a healthy bank statement at the time of applying for a visa and later on returning it to the lender.
Without a doubt, well-planned, comprehensive and sustainable policies with long-term objectives are the need of the time. We will have to do away with patch-work and short-lived quick fixes.
@MastanKhan ; @Kaptaan ; @Horus
@Windjammer @CriticalThought ; @HAIDER
How much do you think our enemies paid this muppet to write this article?
I'd say $75,000.
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