The one trillion rupee question?

[fatman17]

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!!!

 

[Cheetah786]

Monopolized crown corporations loosing money and no one can figure out how to fix it funniest joke on the planet.

How about for starters All military personals installed in these corporations fired all political appointments fired complete audits to find every stolen penny.

Dr. Farrukh Saleem is on right track but thinks small prime ministers office expenses are not a big deal and a necessary evil nor are they that big that it will make a 400billion difference problem is simple crown corporations must be at all cost privatized regardless if tax payers get fair share or not as it will immediately stop the bleeding.

oh and privatizing means privatizing not pre chosen blessed ones also known as friends of the family morons who could not run comb through there own hair never mind run a corporation.

 

[Xeric]

Capital suggestion

Dr Farrukh Saleem
Sunday, April 24, 2011

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?[/U]

That's what some people miss for the 'trees'

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[/U].

So now you believe me, dont you?

A Commissioner costs us 10 lac, we can interpolate and find out how much a DCO would cost us and similarly we can calculate how much a DO would cost us and so on and so forth.

HOW ABOUT A NEW AND IMPROVED CIVILIAN GOVERNMENT!!!

Spot on!

 

[RazorMC]

Very good points in the article. We have white elephants in the form of state-owned corporations and more sitting in the government.
Privatize a small part of the company and let the bidder also run the company with full management rights. PTCL is a prime example of this strategy.

But take Pakistan Steel: thousands of people have been hired in excess, that is to say they are dead weight. Fauzia Wahhab claims that they were wrongfully fired earlier and that's why they have been given the jobs again. OK lady, ever heard of a Court ?? Try prosecuting those involved instead of persecuting the people of Pakistan for your pockets.

I guess instead of privatizing companies, PPP has privatized itself. Highest bidder commands PPP-led stooges.

New civilian government: Definitely.

 

[muse]

Well selling off loss making enterprises is a given - but lets be real, politically, it's a non-starter, especially when the economy is growing less than optimally, And of course the number one reason, politicians like state enterprises as vehicles for their nepotistic impulses and for the patronage opportunities these enterprises are for them.

But lets just for arguments sake, agree that Pakistan managed to sell off these loss making enterprises, will that mean that the govt of Pakistan will suddenly be taking in as much as she hopes to spend??

See, expenditures for such things as education and social sector will not be going down - ever - they will only go up -- so the real problem, is how the govt can increase the amounts it collects, right? And therefore it needs a much wider, more vibrant economy and documentation and collection mechanisms?

 

[Safriz]

Democracy costing us too much. We need a king. Thankyou.

 

[AZADPAKISTAN2009]

Money is being lost

a) Low taxation
b) Lack of ability to catch tax evadors and confiscate property
c) Lack of energy , and reliance of expensive crude oil products from imports
d) High luxury salairs of politicians on part with White house employees which our nation can't afford
e) Smuggling of goods in and out of pakistan , with no taxes paid on duties
f) Importation of cars from Japan and Middle east , killing local industries
e) National Corporations not being run for profit , and accoutability lacking to punish
people if profits are not made
g) Crippling strikes , shut down economy regularly loss revenue
h) Maintenance cost on old military equipment that is obsolete planes like Mirages
or old tanks or artiliery
i) Lack of HST , a automatic tax collection system in Pakistan
j) 10% is upper class in Pakistan , 15% is middle class , and 75% lives poverty lines and close to it
h) Billions being lost due to illegal financial transfer of money because Pakistani financial system is so complicated
people are scared to send money via banks at leats 2-3 billion funds annually lost

j) LACK OF PRODUCTIVITY IN CORPORATIONS - example 1-2 corporations in US make more then pakistain's 80%
corporations, companies like PIA - specially are rusting with old mentality no added value to flyers, expectations by the CEO that government will bail them out

K) Lack of taxation system on Zameen Dar's and applying property tax on agricultural land vs revenues

Case Study:
KARACHI stock exchange , so confusing I went to their site , they have no instructions how can someone invest in any pakistani company or setup a portfolio ... that KSE website sums up Our problem - lack of process and structure, I spent 1-2 hours vs if you go to North American site in 4 minutes you can register yourself, and in 2 days you can verify your credentials , and you can start investing in North American companies by doing trade.

L) Political animosity : when a government changes all the programs of previous government which are 86% complete are shut down and billions are lost every 2-3 years

1) Current examples : HEC initiative by Musharif gov shut down
2) Gawadar : Project started by Musharif , now its being targeted by Navy/Army for take over
3) Dairy farm projects started by Musharif , did well but there is no continuation.

What has PPP and democracy has done in last 4-5 years??

NOTHING !!! NOTHING FOR PAKISTAN - DEMOCRACY DOES NOT WORKS IN PAKISTAN becasue out 70% population
in uneducated , and they vote on ethnic lines , rather political mandates

With 2-3 Billion investment into Solar infrastructure , we can fill 20% of our cities's energy needs but still be prefer to invest 5 billion in oil that burns once and its gone for ever because BIG people have stake in success of petrolium ministries, all lights could be converted into solar pannel based lights and small apppliances can all run on solar power !!! BUT NO INITIATIVE ...


Example:

2011 - 3 billion gets spent , on solar infrastructure it will last for 20 years ,
2012 -2015 You EXPAND GRID by 1 billion more in rural areas

But we opt to go for Oil

2011 - cost 5 billion
2012 - cost 6 billion
2013 - cost 6.5 billion
2014 - cost 7.0 billion
2015- cost 8.0 billion

Money lost !!! 30+ billion dollars in 5 years , vs solar energy spend 3 billion and it runs for 20-25 years

The 30 Billions saved over 5 years could be used for public sector , and infrastructure , and job creation !!!

But currupt politicians want the AID money coming in , because its easy means to steal and divert the funds to UK or swiss accounts -

Because majority of our Politicians are not graduates most are just 5th class pass , drifters they do not have the capacity to think strategically most of the educated class of Pakistanis , end up working in Middle east/Europe world -
what is left are the 5th class pass , politicians making legislation and passing laws in Pakistan. Sure 1-2% are educated but rest are all uneducated drifters

 

[Khalistan Patriot]

more money should be spend on Pakistan's poor.

 

[ajpirzada]

writer has hit the right nail.... a similar stat for military perks etc would have cleared the picture even further

 

[RazorMC]

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.

 

[fatman17]

Because majority of our Politicians are not graduates most are just 5th class pass , drifters they do not have the capacity to think strategically most of the educated class of Pakistanis , end up working in Middle east/Europe world -
what is left are the 5th class pass , politicians making legislation and passing laws in Pakistan. Sure 1-2% are educated but rest are all uneducated drifters.

fake degree holders deciding the fate of 180m people !!!

 

[fatman17]

writer has hit the right nail.... a similar stat for military perks etc would have cleared the picture even further

tali dhono hatoon say bajti hai!

 

[Veeru]

Efficiency and accountability are the real game changers for it you need reforms.

It can be achieved by both military or civilian govt. if it have its heart for right issue.

Since military is not accountable to public and you can't kick them out if they don't perform. (Unless and until a bloody revolution.)

The other option left is democracy where you can kick out bad leaders and govt. But to achieve that privilege you need to have real democracy fully functional where people have power.

And where a bad government is replaced by good govt not the in case where bad civilian govt. is replaced by bad military govt.

 

[RazorMC]

Because majority of our Politicians are not graduates most are just 5th class pass , drifters they do not have the capacity to think strategically most of the educated class of Pakistanis , end up working in Middle east/Europe world -
what is left are the 5th class pass , politicians making legislation and passing laws in Pakistan. Sure 1-2% are educated but rest are all uneducated drifters.

fake degree holders deciding the fate of 180m people !!!

Exactly right. It is appalling to think that these people are voting on crucial issues like Finance Bill etc. Do they even understand anything at all ??

Stupid comments like, "You don't have to have a degree to love your country," and, "Degree ki requirement aik kala kanoon he," are all that the current govt. can give us. Ignorant and retarded.

Loving your country is one thing and voting on important bills without the faintest idea is another.

 

[Xeric]

writer has hit the right nail.... a similar stat for military perks etc would have cleared the picture even further

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.