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The one trillion rupee question?

IMF considers Pakistan economic teams deceitful, liars

ISLAMABAD: Pakistan’s former representative in the International Monetary Fund (IMF) board Dr Ehtisham Ahmad Monday disclosed that a last moment favour by the White House helped Pakistan gain $11.3 Stand-by Arrangement in 2008 with the IMF, which initially turned down Pakistan’s request saying the economic managers lied on tax reforms, a perception that has now become reality in 2010-11.

Now after two-and-half-year the IMF considers the economic policymakers ‘cheaters and liars’, said the former official. He was addressing a seminar on ‘Urgency of Tax Reforms-The challenge to the Macroeconomics Situation and Development’ organised by the Institute of Development Economics and Alternatives, known as IDEAs, funded by the Open Society Foundation of New York.

IMF has had very low opinion about Pakistan that became a reason for initially refusing the bailout programme, sought to avoid defaults on international payments. “The White House had to intervene (to secure a programme for Pakistan) as even the friends on the IMF board said Pakistan’s economic team lied on the promise of levying (the value-added tax).”

He said the 2008 programme was approved on a plan prepared by Finance Secretary Dr Waqar Masood and the key element of Masood’s plan was that Pakistan would finally address the domestic resources mobilisation issue and generate additional tax revenues equivalent to 1.0 percent of the total national income for consecutive three years The IMF wanted Pakistan to enhance tax to gross domestic product (GDP) ratio to 14 percent from the lows of 9.0 percent till 2013 and reduce the budget deficit to 3.0 percent of the total size of the economy. And after two-and-half-year the programme is suspended due to failure in implementing tax reforms and we are standing nowhere. Dr Ahmad said it would not be easy for Pakistan to have another bailout programme with tainted reputation. “It is now a different IMF that will seek prior implementation of conditions before agreeing to a new programme.”

He said even the Kerry Lugar money is not coming without the IMF Letter of Comfort. On a question whether the US can tide the new loan programme with North Waziristan operations, he said North Waziristan could be an American card, but now even the US has been finding it very hard to convince the IMF to release the withheld tranches.

He said the Federal Board of Revenue (FBR) opposed the value-added tax implementation, as it also would have taken away the FBR’s powers to issue Statutory Regulatory Orders, which is an important tool for maintaining ‘cozy relations with individual companies’. He said the general sales tax has mutilated over 10 years by the FBR, which has traditionally known for rent seeking. He said SRO 283 that reduced the sales tax rate on textile, carpets, leathers, surgical and sports goods from 17 percent to 4 and 6 percent, is an ‘April fool gift to the nation by the FBR’. He said the SRO 283 has killed the tax reforms. He said the 7th National Finance Order was on an assumption of the VAT implementation and now without VAT this and the successive governments will be in jeopardy. “Now the unfunded devolution has put the 18th Amendment under risk.” Dr Ahmad said the government should disband the inefficient and corrupt FBR and form another agency on the model of the central bank. He said to minimise the gap between expenditures and income. The government should levy wealth tax at district levels. The colonies like Clifton, Gulburg, Raiwand and GOR would be taxed in the new budget. He said the government should consolidate corporate income tax and also tax all incomes irrespective of source. “Windows of opportunity are fast closing on Pakistan due to the credibility issue,” said Dr Faisal Bari, a renowned economist. He said the government should tax all the sectors irrespective of size of revenue to ensure equity of tax.
staff report
 
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Not that i want to contend you, but then i am sure that the writer does not have any love for the military either, it's just that he was unable to find any similar examples to add to his article. The reason, well the military hasnt 'institutionalized' corruption. At best, the writer could have sought examples of certain bad eggs (corrupt jarnails) or the very top military brass.

well he never really said anything about corruption in civil services. all he talked about is monetary and non monetary perks which the officers are getting.

and you are right. its close to impossible to get any data when it comes to our armed forces :)
 
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well he never really said anything about corruption in civil services. all he talked about is monetary and non monetary perks which the officers are getting.

and you are right. its close to impossible to get any data when it comes to our armed forces :)

Yeah, he never said anything about the word corruption, but he said alot about the phrase 'institutionalized corruption'. May concern was the latter.

As for your last part, well if you are trying to imply that jarnails are either not pointed out or something, than i think you missed the Opposition Benches during Musharraf's rule. Also had that been the case, people would not have used Karor Commander for a Corps Commander.

In the end, please if you want to bring out something, i'll happy to argue it out. Let's not behave like the masi jo teeli laga k saide pe hojati hai ;)
 
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Yeah, he never said anything about the word corruption, but he said alot about the phrase 'institutionalized corruption'. May concern was the latter.

As for your last part, well if you are trying to imply that jarnails are either not pointed out or something, than i think you missed the Opposition Benches during Musharraf's rule. Also had that been the case, people would not have used Karor Commander for a Corps Commander.

In the end, please if you want to bring out something, i'll happy to argue it out. Let's not behave like the masi jo teeli laga k saide pe hojati hai ;)

once again, those two three army officers were involved in mega corruption. im more interested in knowing which officer is costing the tax payer by how much (at least the top slots)? just like the article pointed towards monetary and non monetary perks which the civilians are getting on average.
 
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once again, those two three army officers were involved in mega corruption. im more interested in knowing which officer is costing the tax payer by how much (at least the top slots)? just like the article pointed towards monetary and non monetary perks which the civilians are getting on average.

That's what i was trying to say.

Let's compare what a civilian bureaucrat and his counterpart in the military receives in terms of perk and privileges. The writer cites Commissioner as an example, i.e. a grade 20/21 officer, i will try to do the same. But most importantly i would also like to put forth other officer down below the chain so that we can have a better assimilation of the situation.

Let's start with a District Officer who is a grade 17, pay scale wise he is equal to a 2/Lt, Lt and a Captain who all are grade 17 officers. When a DO gets his appointment he ought to be an officer-holder/bearer. A 2/Lt on the other hand does not has any such luxury. He either has to rough it out in the field with the Jawans for the entire day or may be if the govt accommodation permits he can lay his arse to rest in one of the offices held by some other officer senior to him. This practice hold valid for officer till the rank of Captain. Officers of the rank of 2/Lt to Capt are field appointments, expect those Lts/Capt who are appointed as Staff Officer, are supposed to rough it out in the field, meaning thereby that virtually they are not supposed to have an office appointment. There goes the luxuries of an established Office. DOs on the other hand enjoy all the perks and privileges of a well furnished office from the very start.

Now a word about the luxury of vehicle. Every civilian bureaucrat whether junior or senior enjoys this luxury from the very start of his service. Military Officers on the other hand dont have the same till the rank of a Lt Col (grade 19) that too for strict official use. Normal routine official visits within the cantts are made on private vehicles most of the time, unless a very senior khangar type superseded Major Saab having an attitude problem refuses to do so. Otherwise, almost most of such trips are from ones own pocket. Lt Col (COs) are provided with a vehicle that they can ONLY use for official trips. As a routine the same vehicle is also used for his pick and drop from his residence and his unit (which are normally with a turning radius of 3-8 KMs) but then this luxury can be temporary, because i have seen strict Formation Commanders barring COs from using sarkari vehicles for pick and drop service, resultantly these Officers (the COs) ply between their residence and office on their private cars. It is a normal practice that formation commanders would bar the use of vehicles for pick and drop. Imagine a grade 19 officer (having a service of 15-20 years) towing his own vehicle (though there's NOTHING bad in it). But on the other hand a grade 17 civilian having 1 year of service enjoys the same luxury at will. i have seen COs walking their way out to offices as either they didnt have a car or their car had broke down.

Another aspect that should be kept in mind is the practice of a Dry Day in the military. Dry Day implies that on this particular day of every week NO military vehicle would ply the road whatsoever. This means that in cantts where COs use sarkari vehicles for their pick and drop would have to use their personal cars for the same on this particular day. This practice help the military save some POL on monthly basis. We dont see such practices in the civilian arena. Also the way even a DO screws (i used the word deliberately) is sarkri vehicle is no way near what a military officer does. i mean DO or DCO or Commissioner dont have to ask permission from anyone to use their vehicle, military officers on the other hand MUST have executive orders if they are using a vehicle even for official use, or else it's a normal routine that a Military Police chap would stop you (within the cantt) and ask for the documentation which allowed you to use a vehicle for that purpose. A Do can travel from Laiya to Sahiwal without informing anyone, a fauji on the other hand cant leave a cantt unless there are specific orders from the highest authority e.g. leaving for firing training or collective training. A military vehicle would be stopped at the gates by the MP if the vehicle doesnt have the permission to go outside. As i have mentioned in one of my posts in the TT section that i know of DOs and DCOs who would go from Sarai Alamgir (their place of duty) to Gujrat (their home town) on almost daily basis and would then cite the reason of family partition though they should have their family residing with them at their place of duty. A fauji cannot think of doing the same.

Ok this discussion was till the rank of a Lt Col (grade 19). i know senior officers Cols/Brig and above enjoy a little immunity in this regards. And the immunity being that they would not be stopped by the MP as a routine and they can go out from the cantt at will, but in no case they would be visiting their home towns on sarkari vehicles that too in sarkari time. The first Staff Car that any military officer gets for his executive personal use is at the rank of a Brig (grade 20/21). This vehicle is for his personal use mostly inside and around the cantt after officer hours. The same cannnot be put to use for visiting Muree etc. On the other hand even a DO (grade 17) can take his vehicle to Lahore from Faisalabad at will, no questions asked. i say this because i have empirical evidence of such instances. Now let's talk of Generals. They being seniors can move anywhere within their command jurisdiction without any bar, but you wont find them shopping or recretioning on the same vehicle. At the most his Staff Car can be seen plying around WITHIN the cantt, doing chores like pick and drop of their children from the schools or his family doing grocery. Oppositely, children and families of civilian grade 17 officers are at liberty to make use of sarkari vehicle at will. Even a CO cant use any sort of sarkari vehicle for his personal use in any form.

i have seen offices of DOs furnished with ACs (as a routine), in the military even a CO (equivalent to a DCO) is NOT supposed to install an AC in his office. Moreover, i can cite you instances where formation commanders have barred everyone (including Brigs and himself) from installing ACs in their Offices and Vehicles. i know Generals who while visiting COs/Brig would inspect the offices for ACs and while traveling around the cantt would stop and check vehicles to see if they are using ACs therein. Now to do this the general had to set a personal example by removing his ACs, which he gladly did. He did this not because he was a sadist, but he wanted to do his part in saving energy. Even if you dont find such generals everywhere, as a policy only the Brigs and above can have an AC in their offices as compared to a DO. Even then this may not be a matter of concern, but what bothers me is the ruthless use of such gadgets. Once i had to visit a DO (communication and works). The Saab was not in his office and had gone to visit some place, though he had given me an appointment ;). i had to wait in his office from 8 in the morning till 1 in the afternoon. For the entire duration his AC was turned on. i asked his peon regarding the AC as i though he had turned it on for me. The reply surprised me. O sir ji...fikar na karain ye chalta he rehta hai, saab tu 9-10 bajay ata hai, arder yehe hain k isy subha 8 bajay chala dyna hai!!

i have seen their worker class making guud use of the AC and heaters after office hours. i then wondered why would i and the other officers made sure that even their energy saver are turn off once they leave the office for may be half an hour? As a routine i had my runner to switch on the electric appliance only when i would come in my office in the morning. Once i remember traveling with another DO, while we were short of his office for may be like 40 kms he calls his peon on mobile and instruct him to turn on the AC, surprising me to the core! On query from my side in this regards the reply was not too pleasant to be quoted here. The same hold guud for gas/electric heaters. On the other hand i have seen Adjutant and Quartermaster (both staff officers) of units circling around that one fringging electric rod heater (there was no gas in that far flung area of Balochistan).

When a DCO/DPO moves out of his officer or residence he move out with complete protocol with all the security squad and stuff. His counter part in the military (also grade 19) dont have any such luxury. Yes Generals, that too at the level of Corps Commanders and above to make use of such squads but that too when traveling outside the cantts. i know formation commanders baring the use of squad vehicles while traveling inside the cantts. Picketing on roads is a normal routine when DCOs/DPOs (Commissioner is senior to them) move in and out, the same luxury is only extended to COAS or may be the VCOAS.

The size of the house in which a DCO/DPO resides is nowhere near to what his counterpart has in military. A 2/Lt or a Lt Col and all in between can employ one NCB/Batman. DCO/DPOs on the other hand have an army of servants at their disposal. Not that senior officer in the military dont employ Cooks at their homes, but these cooks are not dedicated for them. This one cook would come from the Garrison Mess which has to feed may be like 100 officers. A unit having 12/15/20 officers is only authorized one mali, how many officer would/can utilize that mali for their personal use when the same mali is also supposed to/primarily supposed to look after unit lawns? DCOs/DPOs have these dedicated to them. They also have telephones exchanges and operators at their residence, here in the Army even Brigs dont have any.

The first time i visited a DPO, i was surprised to see the way his office was furnished, i could only compare the same office to a GOC's or Corps Commander's office. i have this relative of mine who once was a DCO. i visited him and pumped him on way he has his office furnished. It was then he revealed that this huge wall clock was gifted by falana Contractor, this office was tiled by the grace of falana thaikedar and the furniture is the grace of a local big shot who own furniture showrooms in the area.

i once had to operate in an area where a class fellow of mine was doing DO (Revenue). As usual on one weekend he was away to his home (about 100 kms away from his place of duty, on sarkari vehicle ofcourse), i once had shown him a desire that i would like to dine at one of the famous restaurants in his city of residence and told him that i will try to get a weekend pass and hire a taxi when he would be at his home. This weekend he calls me and tells me that he is sending his sarkari Potohar Jeep to pick me up from where i was operating (100 kms away). He knowing how leechar i was in this regards than had to refrain from doing so, instead he said that he has coordinated with a friend of his who happens to be going to his city and that he would pick me up. i agreed. When the dude came to me to pick me up i was surprised to know that the dude was the same guy who was a govt contractor working with the DO. What were the odds that the contractor saab was just visiting his city on the same weekend? Keeping in mind the presence of an 'outsider' (the contractor) i did raise the issue. Well we reached Sir DO's city. We planned that we would first go for a little shopping and then to eat. Another DO saab was also supposed to meet us at the market. We all met there and started choosing what we had to buy. When it came to the payment issue, i paid for stuff (i was the only one who purchased a few items and a few were purchased by the contractor bhai, both the DOs being local didnt feel compelled to buy anything). While i was paying, with a sudden jerk the other DO stopped me from doing so and started paying for my items. My class-fellow didnt dare to the same because he knew how i was in these matters so he had coordinated with the other DO to do it in his place as i being knew to him might accept it. An argument ensued and i in sheer anger left the place without the items and came back to the vehicle. The contractor followed me. He, after seeing that i have cooled down told me and i quote 'o sir ji is may kaya hai..mehmaan o tusi, waikho na di, aye (the DOs) jidon we saday kol anday nay, pawain punj (5) howan, sath (7) ya dus (10), asi roti we khawai de aye they shapping we karwai di aye'. i sensing his background told him politely that this may work between a contractor but it wont between two sarakri mulazims, bhai tankhowa he kitni hoti hai hamari??!! Anywaz, latter i was told by my class-fellow that he didnt buy anything as last time when he visited the place he was with the DPO, and the DPO was generous enough to buy him 10 Cambridge Shirts, so he dont need more. And i was like, WTF a DPO was paying for you? 10 shirts bhai maiany kabhi nahi li akhatin..!! After this i became baysta. Later we met another big shot (his son) of the area, we then went to eat. The food was paid for by the 'son', the icecream was borne by the Contractor and the same contractor took us back to our place of duty. Later i found out that the contractor was specially told to pick me up, and as a mutaul understanding, the recreation of Saab's is the responsibility of any of the chosen contractors. It's understood that jab saab k bulawa aye tu they are supposed to oblige. Infact, it;s taken as an honor for that contractor that he is called in for services! Kyn theek nahi hai? sawari kisi ki, khana kisi say or saray khush?

This is something i am telling you concerning someone with the status of a DO, dont ask me to get started for what a DCO/DPO/Commissioner/IG do!
 
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Capital suggestion

Dr Farrukh Saleem
Sunday, April 24, 2011

Rs1,000,000,000,000 is the difference between what the government of Pakistan (GOP) earns and what it spends. In effect, the GOP loses Rs300 crore a day, every single day. That amounts to loosing Rs11 crore per hour or Rs20 lakh per minute for every single minute of the entire year. The GOP would have lost Rs60 lakhs by the time you will finish reading this brief commentary. Might as well stop right here!

Rs1,000,000,000,000 is also roughly the amount by which Pakistan’s money supply is expanding per year. In effect, the GOP is printing Rs300 crore per day, every single day. That amounts to printing Rs11 crore per hour or Rs20 lakhs per minute. The GOP would have printed Rs60 lakhs by the time you will finish reading this brief commentary. And, whether you stop right here or not, the GOP will continue printing.

How do we get out of our Rs1,000,000,000,000 black hole? Consider this: Operating Expenses of the federal government Rs400 billion and losses at State Owned Enterprises (SOE) Rs400 billion – that’s 80 percent of the black hole right there. Pepco has lost Rs180 billion, PIA has lost Rs77 billion and Pakistan Steel Rs44 billion. How about an international tender to recruit the best brain available to run these hematophagous leeches?

How do we get out of our Rs1,000,000,000,000 black hole? It is budget time and Islamabad is flooded with ‘Demand for Grants’. The President of Pakistan demands Rs10 lakhs per day or Rs36 crore per year as ‘staff, household and allowances’ for 6-dozen gardeners, 175 servants and 263 household staff. The president also demands six lakhs per day or Rs22 crore per year for his foreign junkets. The Prime Minister of Pakistan demands Rs33 lakhs per day, Rs10 crore per month, Rs120 crore per year for his foreign tours. Each and every one of the ministers costs the treasury a lakh a day, Rs30 lakhs a month. That’s Rs200 crore a year for the entire army of ministers (and we have parallel armies in all the four provinces).

How do we get out of our Rs1,000,000,000,000 black hole? Remember; 94 percent of government employees, both at the federal and provincial level, are below BPS 17. The combined salary bill of all provincial and federal government employees is close to Rs500 billion. Non-monetary perks for government employees are estimated to be upwards of Rs50 billion. Depending on one’s connections a high ranking, well-connected government servant could cost the treasury between five to10 lakhs a month. Khusro Pervaiz, the commissioner for the city of Lahore, for instance, reportedly cost the treasury Rs10 lakhs a month. Monetising all perks is the way out.

The good news is that the Rs1,000,000,000,000 being talked about here has already gone down the tubes – it’s history. The bad news is that the GOP has once again begun burning midnight oil, preparing outlays and firming up plans to lose an additional Rs1,000,000,000,000 over the following 12 months. In Islamabad, losing a trillion a year, every year, is referred to as the annual ‘budget exercise’.

So, how do we get out of our Rs1,000,000,000,000 vicious cycle? Political will, just by itself, can get us out. Sad that 90 percent of our decision makers give the other 10 percent a bad name.



The writer is a columnist based in Islamabad. Email: farrukh15@hotmail.com

HOW ABOUT A NEW AND IMPROVED CIVILIAN GOVERNMENT!!!

Plainly this method does not put the numbers in perspective. Either go by the %age of the budget or then look at major heads of expenses together. It is important because in this post the salaries of federal and state employees are listed at 500 billion Pakistani rupees. Is the defence also within this? Because the first link on google gives the Pakistani Army spend at 6.41 Billion USD or over 600 Billion Pakistani Rupees!!
 
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Something related to the topic, I'm not sure why an MPA's total earning and spending is 3+ crore rupees Per Year. I was reading the salary and it was an old figure from 2006, estimated at 16 crore rupees for a single MPA for his office,salary, expenses, travel, housing for a period of 5 Years...

Just imagine the figure.
 
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Opinion A state of dysfunction


Kamila Hyat

Friday, April 29, 2011


With the temperature rises of summer, the first instances of loadshedding are being experienced. Life, for those who can afford them, revolves around talk of generators, UPS devices and the endless challenges of keeping them functional. For the rest, there is of course no choice but to suffer.

Even before summer arrives in earnest, there have been protests in towns in Punjab over power outages that last up to 20 hours. Even in Lahore, cuts of three hours or so are becoming routine. No one appears to say exactly why it is so.

There are scattered claims of major flaws, other Wapda personnel say this is simply loadshedding, like the gas cuts in winter that had people cooking their meals on bits of wood. No one is willing to say precisely what the problem is. This, of course, adds to anxiety among people as to what may lie ahead.

Solutions seem to be in sight. India is reported to have offered to sell electricity to Pakistan. Surely nothing would be simpler than pulling a few cables across the Wagah border. But, mysteriously enough, no one seems to be jumping for joy at the prospect of power from India.

Is there an ideological reason for this lack of enthusiasm, we wonder? Are there fears that power from an “enemy” state could somehow seep into innocent minds and poison them?

Even though the offer has yet to take any concrete form, surely we should be doing more to push it through. For the same reasons every possible effort should be made to acquire electricity from somewhere or the other. Vague talk has been heard of obtaining this from the Central Asian Republics or Iran but nothing seems to have materialised thus far.

What is the reason for this? Why is there so much indifference? Is the lust for profit and illegitimate gain a factor? Is incompetence involved? It is evident that in this, as in the case of so many other crises, there are more questions than answers floating around..

Oddly enough, solutions such as exploiting the coal of Thar have not been adequately explored. Even work on smaller hydro-electric projects has not taken off at an urgent pace. The result is not only a dramatic disruption in domestic life but a devastating impact on industry and commercial ventures. Many businesses have been crippled already. Others will be, if things continue as they are now and more concrete efforts to resolve the energy crisis are not made.

The rather half-hearted approach we have seen over the past three years has led us nowhere. All that has changed is that the scale of the crisis has grown. And those in power seem to do nothing more than twiddle their thumbs and make occasional statements promising rapid change.

Chronic power outages affect many. But these are not the only examples before us of state dysfunction. We see dysfunction everywhere. Very little seems to work, and we are all surprised when it does.

Even a flight taking off on time brings delighted relief from passengers. Well-meaning travel agents with the interests of their clients in mind advise against flying with the PIA, given its tendency for long delays or even the sudden cancellation of flights.

Even though there is still good within the state, and in fact, plenty of it, much of it has dissipated within the pools of inefficiency and neglect that grow quickly in size.

While all these factors influence the lives of millions and consume tremendous energy and time, they are not the only examples of a state that has lost its map to the future. Take the case of the tribal areas; no one seems to know what is going on.

The issue of North Waziristan and the operations of the Haqqani network there have the Americans up in arms. The conviction that the ISI remains in cahoots with the aging warlord Jalaluddin Haqqani and his sons has now been clearly expressed – and denied. It is unclear if the civilian and military leadership sees eyes to eye with each other on this, or indeed other issues.

President Zardari, regarded as the blue-eyed boy of the Americans, must be concerned about losing the favour of his key ally. Certainly, he has few at home, and even traditional allies, the Saudis, judging by the Wikileaks documents and fly-on-the-wall accounts, do not seem especially impressed with either his intellect or his sense of protocol.

It sometimes seems as though we live in a kind of mad house. The attempt to reopen the Zulfikar Ali Bhutto case and the dishonour done to the former prime minister by having Babar Awan defend him, makes little sense. There are other matters that are far more important in our current times. There is also the risk of the whole matter being turned into a farce.

An attempt to retry the 1929 murder of Ghazi ilm-ud-din Shaheed has also been reported. Who knows what other cases, perhaps dating back decades or centuries, may be put before the courts – consuming time that could be better spent resolving today’s problems.

We see also an increased collapse of the rule of law. The incident in Karachi in which a cracker was lobbed into the Defence residence of a trader who declined to pay five million rupees in extortion money, reflects still bolder action by the mafia that appears to have engaged in this business for many years. Quite evidently despite all the claims made, no one is able to stop them or protect those who wish only to go about their businesses without facing a threat to their lives.

There are other examples of a state of anarchy. We hear of them every day. In the north there has been little attempt to bring life back to normal for people who have remained caught up in conflict for years. An international agency reports that many school buildings are so badly damaged that children are unable to attend classes. The volatile security situation and the sense of fear left behind by the Taliban meanwhile mean that female teachers are reluctant to resume their professions.

So how will all this change? It is time to think deeply about the situation we face. Nothing can be resolved in one stroke but the process of putting things right needs to begin immediately. For now, there is no sign of this happening.



The writer is a freelance columnist and former newspaper editor.

Email: kamilahyat@hotmail.com
 
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Last I heard was Iran was willing to sell oil in any currency. Why don't we just buy oil and gas from Iran and save billions of dollars that we hand out to the Gulf States?? It improves relations with Iran while helping us maintain foreign reserves.
'Any currency' does not include rupees(whether Indian or Pakistani). They are willing to accept euro, yen, renminbi and of course dollar.
 
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Opinion Rs1,000,000,000,000

Dr Farrukh Saleem

Sunday, May 01, 2011

Here’s a paragraph from last week: “Rs1,000,000,000,000 is the difference between what the Government of Pakistan (GOP) earns and what it spends. In effect, GOP looses Rs300 crore a day, every single day. That amounts to loosing Rs11 crore per hour or Rs20 lakh per minute for every single minute of the entire year. GOP would have lost Rs60 lakh by the time you will finish reading this brief commentary.”

GOP is now less of a government and more of a black hole. Last week, Munawar Mir sent me an email from Vancouver, Canada. The email reads: “When nature creates a black hole, nothing can come out of it because its density and gravity increases to infinity while its size shrinks to zero. Pakistan’s one trillion rupee black hole created by the GOP has no chance of shrinking because it is just like cosmic drain which is going to suck jobs, dreams, aspirations and wishes of the Pakistani public.”

Last week, Dr Ashfaque Khan, one of my favourite economist (economists are hard to love), disclosed how our economic wizards make budgets. The President of Pakistan says out loud that the presidency cannot survive without a Rs3.5 crore injection a month, every month of the year. The Prime Minister of Pakistan sends out a high priority communiqué that the PM Secretariat cannot survive without devouring Rs50 crore a year.

Then there’s an army of ministers and their ministries. The cabinet secretariat gobbles up Rs100 crore a month. Then there are ‘developmental funds’ – nay political bribes – to be paid to all of our honourable senators, MNAs and MPAs. At 100 senators, 342 MNAs and 728 MPAs that’s a cool Rs300 crore a month down the drain every month of the year. Imagine; lawmakers doing gutters. Then there are at least half a dozen black holes within the real black hole; Pakistan International Airlines, Pakistan Steel Mills, Pakistan Electric Power Company, Pakistan Railways, Pakistan Agriculture Storage and Utility Stores Corporation. Among them they loose at least Rs250 billion a year or Rs70 crore a day, every day of the year.

Then there are others: Tomato Paste Plant, Roti Corporation of Pakistan, Pakistan Stone Development Company, Pakistan Hunting and Sporting Arms Development Company, National Institute of Oceanography, Pakistan Gems & Jewellery Development Company, Technology Commercialisation Corporation of Pakistan, National Industrial Parks Development & Management Company, Technology Up-Gradation and Skill Development Company, National Productivity Organisation, Centre for Applied & Molecular Biology, Council for Work and Housing Research, National Institute of Electronics, Pakistan Council for Science and Technology, Pakistan Council of Research in Water Technology, Pakistan Council of Scientific and Industrial Research, Pakistan Standards and Quality Control Authority and Central Inspectorate of Mines.

Wait there are more: National Insurance Corporation, Heavy Electrical Complex, Machine Tool Factory, Services International, National Power Construction Company, National Fertilizers Corporation, State Engineering Corporation, National Construction Limited, Pakistan Steel Fabricating Company Limited, Pakistan Mineral Development Corporation, Ghee Corporation of Pakistan, Republic Motors, Pakistan National Shipping Corporation, Pakistan Railways, State Cement Corporation of Pakistan, State Petroleum Refining & Petrochemicals Corporation, Trading Corporation of Pakistan, Cotton Export Corporation of Pakistan, Rice Export Corporation of Pakistan, Pakistan Industrial and Technical Training Centre and Pakistan Engineering Company.

From here onwards budget making is a piece of cake – add every ‘Demand for Grant’ from the president downwards, deduct the IMF-allowed budgetary deficit and surprise, surprise you have the final revenue figure. By the end of the next fiscal year, the president, the prime minister and everyone below them would end up overshooting their allocations by 10 percent to 20 percent. Surprise! Surprise! By the end of the next fiscal year GOP will give mother nature another Rs1,000,000,000,000 black hole. Talk about sovereignty and talk about Kerry-Lugar. Talk about public money, private greed.



The writer is a columnist based in Islamabad. Email: farrukh15@hotmail.com
 
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