The brutal assassination of Governor Punjab, Salmaan Taseer, by a staff member of Punjab’s supposedly professional ‘elite force’ has virtually exposed every fault line of contemporary Pakistan. That a constitutional figurehead of a province with no executive authority or legislative power could be murdered simply for dissenting with the extremist worldview, is shocking to say the least. However, the tragedy has compounded further, much like the dark denouement of a Greek tragedy.

The well-organised, ruthless, and all-powerful extremist forces have jumped into the fray and challenged the actuality of a cold-blooded murder. Clerics of all shades and varieties have tried to condone this act of barbarity and reactionary lawyers have promised to defend ‘ghazi’ Mumtaz Qadri -- a self-confessed killer -- free of cost. Above all, public opinion has never been shamelessly manipulated in Pakistan as it is being done today by sections of electronic media that has gone out of their way to dilute the immensity of this event, and short of condoning it, have, attempted to justify the motives of the criminal Mumtaz Qadri and his followers.

Identity mess

Much has been said about Pakistan’s warped identity, and it is a cliché to say that it is a tottering society in search of an identity. It should be clear to all and sundry now that large numbers of its residents, thanks to state-led indoctrination and a poisonous educational system, have espoused the right-wing interpretation of Pakistan as a theocratic state and that too of a particular variant of Sunni Islam. This dangerously imagined polity excludes a large number of Muslims who belong to different schools of thought within the plural and complex range of Islamic faith. The minorities in Pakistan have suffered throughout their history, and their invisibility and insecurity is now a given fact of life.

Taseer struggled to raise voice from his public office and challenged the hegemony of Islamicist discourse, which makes this imploding ‘fortress of Islam’ as a repository of a faith-based nuclear bomb, thousands of armed militants ready to die in jihad and irrationality driving all forms of decision-making -- from foreign policy and economy, to municipal issues (such as the regulation of loud speakers in neighborhoods). In effect, Jinnah’s Pakistan is long dead and Zia’s Pakistan lives on in its full glory.

State failure: no longer a myth?

We have been rejecting the various pronouncements of state failure in the past, terming them as conspiracies to destabilise Pakistan. Leading Western think-tanks, experts and some Pakistani analysts have been alerting us all in the past. But in the imagined fortress of Islam, such realistic prognosis has found little resonance. An extremist mindset has infiltrated state agencies, from the sensitive to the less sensitive, and the governments of the day and their large, unwieldy bureaucracies can do nothing in the face of this ideological onslaught.

The policeman who killed Taseer was removed from sensitive duties. He crawled back into the system and manipulated his posting as Taseer’s personal guard. These are the parables of our times: the protectors are turning into the killers and the defenders are turning into attackers. A day later, when Pakistan’s "last man standing" (Taseer’s description of himself posted on Twitter) was brought back from the dehumanized precincts of Islamabad to Lahore, all state-employee mullahs refused to offer his namaz-e-janaaza (funeral prayer).

The mighty federal government and the besieged provincial government took no action against these recalcitrant bigots who were not satisfied with the 29 wounds that killed an enlightened man within a few seconds. Worst of all, the ruling party i.e. the PPP appears to be in a state of ideological chaos, as it has termed the murder "a political assassination", while it is a simple case of extremism at its ugliest. Senior ministers of the PPP are on the defensive, saying that they would kill blasphemers themselves, or that they are better Muslims than the mullahs. Taseer’s murder has churned out a new tragedy by the hour.

Progressive political space?

In the last two years, Salmaan Taseer had emerged as a pillar of enlightenment and rationality in Pakistan’s opportunistic and dismal political discourse. He had consistently taken positions against Talibanisation, growth of militancy in the Punjab, blasphemy laws, minority and women’s rights. He expressed his views without fear and displayed no sign of regret, even when his party distanced itself from his unadulterated, principled stance on such issues.

This progressive political space which had already shrunk after the death of Benazir Bhutto and the rise of the Taliban is now receding at an alarming speed. The myth of Deobandi sect as being the only variant of militant Islam has now been exposed, as the otherwise peaceful Barelvis have openly expressed their penchant for violence over the issue of blasphemy. Unless the political forces join hands to counter this new wave of Islamism, Pakistan is drifting towards a stage where Al Qaeda and its local hosts would find public support in reshaping the old Pakistan in favour of a new radical, totalitarian country.

Political instability and further chaos?

While the extremists are busy pursuing multiple agendas of harassment, violence and deepening of their discourse, the so-called moderate political parties are engaging unwittingly in a crazy, death dance. The MQM, the PML-N, and the JUI-F are scrambling for power and patronage. Either they are oblivious to the mammoth challenges in front of them, or their short-termist goals have beclouded their political understanding of a Pakistan which is changing quite rapidly.

This new Pakistan hosts nearly 105 million inhabitants under the age of 25 with inappropriate skills, little or no education and a shrinking economy which only provides black market options as means of subsistence and survival. The black market, or what the experts would sanitize as informal economy, comprises smuggling, criminal gangs, militant groups, and urban mafias, further adding to the impending chaos in the country.

The irrational political parties want the PPP government to refrain from raising taxes, increasing fuel prices, and balancing its books as it wants the government to fail in the short term. Such lack of vision and sagacity is truly alarming and perhaps the day is not too far when the extremist ideological narratives will be the only option for Pakistanis to cherish. It is a separate matter that such ideological upheavals seldom lead to solutions in the long term. However, we seem to be doomed to follow a trajectory that history has time and again shown as a natural outcome of oppression, economic exploitation, and arbitrary modes of governance.

A drift to Taseer’s murder, therefore, is not an isolated incident. It fits well into the game plan of Pakistan’s move towards extremism where the liberal or the moderate is a fictional character: this curious species has to either espouse a grand exclusivist narrative or be silenced.

The curse of geo-politics

The year 2011 may actually be the last chance for Pakistan and its ruling classes to make existential choices. In June 2011, the exit plan by the US/NATO might be finalised in consultation with Pakistan’s security establishment. The current features of this plan include power-sharing arrangements with the ‘good’ Taliban. In the short term, that may be an elusive victory for Pakistan’s strategists. However, in the long term, it means that Talibanisation of Pakistan would be unstoppable, creating more fissures within state policy. The Taliban rulers in Kabul would not be content with limited area of operations, as they would seek power space in Pakistan’s Khyber Pakhtunkhwa in continuation of ideological emirates in the Federally Administered Tribal Areas.

How would any strategy to counter extremism be effective in such a scenario? Several analysts are of the view that the pursuit of such policies at home and abroad may worsen Pakistan’s current predicament in the medium term. Similarly, the refusal to engage with India will exacerbate the irrational worldview that drives an extremist mindset. It is in 2011 that we need to determine where we would like to go towards a more rational future, or remain embroiled in a state of perpetual fight with history and the plural values of our society.

We have reached a point where if the ‘silent majority’ -- a phrase which has become questionable in the context of mainstream support for the murder -- does not take a united stand against the forces that are out to impose a neo-fascist ideology on the denizens of the country, then Pakistan as envisioned by Jinnah, will cease to exist. The political forces have the last chance to stop Pakistan from slipping into the abyss of a totalitarian system, which idealises barbarity, promotes further intolerance, and alarm the world as a lunatic society with nuclear weapons. About time, we all woke up!

The writer is a policy adviser based in Lahore. He blogs at www.razarumi.com and publishes Pak Tea House. Email: razarumi@gmail.com

It is seldom that debates are cannily framed such as the current national debate on Reformed General Sales Tax (RGST); the hitherto exempted and tax-evading businesses have successfully laid the table by asserting that the state, instead of controlling leakages in collection of revenue and wasteful expenditure in the system, is attempting to unreasonably tax the citizens and that such taxation is anti-poor because of its inflationary impact.

So, here are the socially responsible businesses pitted against a state that is acting in bad faith and playing into the hands of a foreign ‘other’; deities of patriotism stand invoked.

The outcome of the RGST controversy is so critical in terms of public policy formulation and process that one must step out of the heat of argument and take stock of what really is at stake, who the stakeholders are, and what options are out there.

State collects taxes to provide goods and services which are not provided by the private sector either because of the inherent nature of such goods and services (i.e. national defense, policing, adjudication) or because such goods and services are less likely to be provided by the private sector due to their higher cost coupled with spillover benefits to others (research and development, environment).

Societies are free to choose the level of public expenditures and consequent quantity and quality of public services as long as they are willing to pay for it through taxes. Traditionally, there have been taste differences across cultures regarding the priority assigned to public (shared) space versus the private (family) space. Societies that are more open are likely to have modest houses but clean streets and lively parks; societies with inward-looking family ethos are more susceptible to palatial houses amidst poorly managed neighborhoods.

These taste differences coupled with level of development primarily determine the quantity and quality of common services that a society generates for itself. Globalisation has, however, created a certain disconnect in this otherwise stable state of nature. Now taste for public goods and appetite for tax payment are moving at dissimilar speed; in the third world, while the citizens aspire for same quality of services as provided elsewhere, especially in the developed world, willingness to pay taxes to finance such quality of services is significantly missing, partly due to perceived reputations of successive governments.

Tax-GDP ratio is a good measure of how much a society allocates of its annual income to public goods and services and how much it retains for private use. Norway and United Kingdom allocate around 30 percent of their income to publicly provided goods and services while Pakistan last year collected less than nine percent in taxes; it may not be out of place to mention here that Sri Lankans collect above 13 percent and Indians collect above 12 percent to provide common goods and services.

Given the genuine demands of a burgeoning population, Pakistan spends roughly double the amount of tax collected on provision of public goods and services. While there are significant inefficiencies and leakages in such expenditures, there is no way to meet the demand of public goods and services with current levels of tax collection even if these leakages are removed.

The only viable option left for the society is either to rationalise its expectations from the state and consequently move backward to the pre-modern times or get ready to pay more through taxes. There is sufficient evidence now in the field that there is a huge gap between the potential tax and the actual tax collection; for every hundred rupees collected, another seventy rupees are not collected; in case of sales tax Rupees 30 are lost and in case of income tax, Rupees 150 are lost.

While income tax is the most evaded tax, there is no way to get correct declarations from tax payers except through documenting the transactions that take place amongst businesses and get such transactions reported to the tax authorities. Domestic transactions are difficult to get reported except through an exemptions-free general sales tax. Reformed GST bill, laid before the parliament, proposes to abolish pervasive exemptions granted under the current sales tax arrangement and thus intends to plug the transactions-reporting black hole.

Businesses understand the algorithm of the proposed reform too well and do not want to be deprived of public money retained through underreporting the transactions as well as the income. Bogey of price hike has been created to seek the sympathy of people and, by extension, the opinion leaders of the society for an essentially anti-people demand. What happens if the reform of the GST is stalled? Given the downward-rigid nature of the public expenditures, the government would resort to deficit financing and there are just two ways to finance the deficit -- to borrow or to print money.

Printing money is essentially a taxation measure whereby the government transfers the purchasing power of citizens to its account without legislative cover and without debate. When you print money, the value of money held by citizens is eroded by an equivalent amount. While reform of the sales tax is going to hit the businesses more, printing of money (more aptly called inflation tax) is going to hit everyone in equal measure.

At an annual inflation rate of 15 percent, a housemaid earning Rs3000 a month is going to pay Rs450 as a tax to the state. The compassionate businesses in their love for the poor are essentially planning to tax the poor. While the businesses have the lobbying power and hence voice in the process of any taxation reform, the poor who are going to be hit most in case the reform is stalled, have not even been heard.

The opponents of the reform of GST argue that more vigorous collection of GST would affect prices and incidence of tax would fall on the end consumer, including the poor. Framers of the reform have intentionally left all unpackaged food items and routine medicines outside the purview of the sales tax. Poor man’s food basket remains largely protected.

In case the government decides not to print money, it will have to borrow money. Borrowing money is essentially transferring purchasing power of future generations to the current generation. Now interestingly a generation of businessmen that is evading taxes to the tune of 42 percent today is primarily trying to defer its tax liability to our children and our children’s children. ‘Fair is foul and foul is fair’ would be heard afar provided the unborn children could speak.

While public policy is often about hard choices, here the choice is straight: reform the GST and make those pay that have defaulted for decades; do not reform and make either the poor or the future generations pay. Unfortunately, of the four primary stakeholders in this debate about the reform of the GST, the government, the business, the poor and the future generations, the two most likely to suffer are unrepresented on the table laid for deciding the course.

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Verily, His command, when He intends a thing, is only that He says "Be!" - and it is! (Al-Quran)

Several factors made 2010 a difficult year for the economy. The modest economic recovery made during financial year 2009-2010 (FY10) was washed away by the havoc wrought by unprecedented floods in the country’s history -- to the tune of $10 billion -- and led to downward revision of most of the targets set in the budget for the current financial year (FY11).

Failure to bring about fiscal reforms, particularly imposition of the reformed general sales tax (RGST), forced the government to approach the IMF for a nine-month extension of the credit programme.

A modest economic recovery was made in FY10 as the growth rate increased to 4.1 percent surpassing the 3 percent target and 1.2 percent revised growth rate for the previous fiscal year. Large scale manufacturing, which accounts for more than 70 percent of industrial output, grew by 4.4 percent compared with negative growth of 7.4 percent during the preceding year.

Current account deficit came down to 2.3 percent of the GDP from 5.7 percent a year earlier. Exports grew by 2.9 percent to reach $19.67 billion compared with negative growth of 6.4 percent during FY09. Remittances increased to $8.9 billion.

Fiscal deficit, however, exceeded 6 percent of GDP against the revised target of 4.9 percent and actual figure of 5.2 percent during FY09. Average CPI inflation was registered at 12 percent exceeding the 9 percent target however far less than 20.8 percent in FY09.

The major budgetary targets for the current fiscal year included (a) economic growth of 4.5 percent, average inflation of 9.5 percent, (c) fiscal deficit of 4 percent of GDP, (d) development expenditure (of both federal and provincial governments) of Rs766.5 billion, and (e) projected tax revenue of Rs1. 66 trillion, including direct taxes of Rs657.7 billion and indirect taxes of Rs1.12 trillion--9.8 percent of GDP.

The havoc wrought by the floods necessitated revision of these targets. The floods have washed away at least 1 percentage point of the potential GDP growth; therefore attaining growth rate in excess of 3 percent will be a tall order.

Most of the development funds have been diverted to rehabilitation and repair activities. As the economic growth shrinks, revenue receipts will come down and inflation will go up. Average inflation is likely to surpass 20 percent during the current fiscal year.

During July-November FY11, current account deficit was recorded at $708 million (0.7 percent of GDP) significantly less than $1.88 billion (2.5 percent of GDP) during the corresponding period of FY10. Exports were $9.03 billion compared with $7.69 billion during the corresponding period of the previous year showing 17.3 percent growth, while imports were $13.56 billion compared with $12.43 billion showing 9.1 percent growth.

Remittances rose to $4.42 billion from $3.83 billion a year earlier. Foreign direct investment (FDI), however, fell to $574 million from $731 million. In FY10 as well FDI had dropped to $2.15 billion from $3.72 billion in FY09.

Throughout the year 2010, the State Bank of Pakistan (SBP) maintained high interest rates with a view to controlling inflation. On August 2, 2010, the interest rate was increased by 0.5 percentage points to 13 percent.

On September 30, the interest rate was increased to 13.5 percent and subsequently to 14 percent on November 30. However, notwithstanding the increase in the interest rate, inflation remains high. Average CPI inflation during July-November 2011 was 14.4 percent, including food inflation of 18.1 percent compared with average inflation of 10.3 percent for the corresponding period of FY10.

Fiscal deficit, whose containment is the main pillar of the edifice of the government’s IMF-sponsored stabilisation policies, was to be reduced to 4.9 percent of GDP during the last financial year (FY10). However, that revised target could not be attained as fiscal deficit rose to 6.3 percent of GDP compared with 5.2 per cent in FY09.

For the current financial year (FY11) fiscal deficit target of 4 percent of GDP was announced initially, which was revised upward to 4.7 percent with the consent of the IMF on account of expenditure on the rehabilitation of the floods hit people and reconstruction of infrastructure. However, it is apprehended that the fiscal deficit may reach 7 percent of GDP.

The government has increased its reliance on the central bank borrowing as a source of deficit financing. The borrowing from the SBP was recoded at Rs416 billion between July and December, 2010 compared with Rs278 billion during the last year’s corresponding period. The increased central bank borrowing is the principal cause of rising inflationary pressures.

An important issue for the economy is resumption of the IMF assistance. The IMF has so far disbursed $7.27 billion to Pakistan out of total agreed credit of $11.3 billion under a 25-month stand-by agreement (SBA) effective since November 2008.

The programme was supposed to conclude at the end of 2010 but has been extended by nine months on the request of the Pakistan government to enable it to undertake the measures earlier agreed with the fund. At the top of these measures is introduction of the RGST, which has become a contentious matter between the government and the opposition.

There is no gainsaying the fact that Pakistan, which has one of the lowest tax-GDP ratios (9 percent of national output) in the world, needs to shore up public revenue. However, how this is to be done -- by imposing new taxes direct or indirect, or widening the tax net and curbing tax evasion -- is the bone of contention.

Hence, not surprisingly, the RGST, which is to replace the current GST, was originally supposed to be introduced with effect from July 1, 2010 and subsequently on September 1, 2010 and then on January 1, 2011. But given strong opposition both within and outside parliament, its imposition seems to be a difficult proposition.

The most obvious consequence of the failure to impose the RGST will be further delay in IMF disbursement. Not only will it put pressure on Pakistan’s already difficult balance of payment (BoP) position but will also affect credit supply from other international institutions.

As an alternative, the government may withdraw exemptions available in the current GST regime, such as those available to textile and fertilizers sectors. This option is easier to exercise, because removal of the exemptions will not require the approval of parliament at a time when the government is struggling to retain its majority in both chambers. However, whether this option will bring in the same amount of revenue as the RGST is not clear.

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Verily, His command, when He intends a thing, is only that He says "Be!" - and it is! (Al-Quran)

The National Assembly’s Standing Committee on Education recently said that there should a unified curriculum across the country. How and when are questions that remain to be answered. The sources of tension and conflicts are many in the Pakistan. Curriculum in the public and private sectors is one.

All the schools promote distinct cultures and inculcate different habits and manners in their students. Some students brainwashed with a certain ideology can cause trouble in the society.

With students in each of these separate tiers being educated in different approaches and for dissimilar purposes, to hope for and think of national unity in this situation seems naïve. The class system in education keeps the nation divided.

It’s impossible to think and hope of national cohesion and development if this situation persists. The national divide will increase if the class system in education is not abolished.

On the 7th of October last year, the government signed an agreement with the Ittehad-i-Tanzeemat-i-Madaris Pakistan, allowing the five boards of ITMP to design the contents of religious education and compulsory subjects in accordance with the syllabus prescribed by the government.

A curriculum must reflect and cater to the philosophical, psychological, social and economic realities and needs of the time for a society. Pakistan, faced with problems created by extremist and linguistic tendencies, must introduce a curriculum that can ensure national cohesion, promote moderation and modernisation besides inculcating the spirit of tolerance in the future generation of Pakistan.

According to a 2008 estimate, there were around 12,448 madaris in the country which provided education to around 1.6 million students with male enrolment of 0.999 million and the female one 0.604 million. Latest estimates put the figure of seminaries at over 21, 000 countywide.

There are, at present, at least five separate independent religious boards in the country that represent the Deobandi, Berailvi, Ahle-hadith and Shiite sects and the Jamat-e-Islami’s school of thought. Many seminaries are not even affiliated with any religious board and are financed or administered by individuals linked to the Tablighi and other sub-sects from the above schools of thought.

The general impression is that in some of these institutions, students are kept aloof from the outside world and exposed to a certain type of education. Each student, as a result, judges things, issues and people on the basis of ‘we and the others’. When these students enter life and society with their stereotypes, tensions and extremism are but natural to grow.

The situation in the mainstream educational institutions is not better either. They are further divided in public and private schools. In 2008, there were 182,477 education institutions in the public and 73,611 ones in the private sector. Enrolment in former stood at 25,213,894 (67 percent) whereas 12,248,990 (33 percent) students were reading in the latter.

Apart from drawbacks such as low standard, lack of facilities, overcrowded classrooms, weak supervision, and outdated curricula, etc, most astonishing is the fact that not only there is disparity between the provincial and federal curricula but there is inter-provinces disagreement on this as well.

Private schools, as per their administration and source of funding, can be divided into foreign-affiliated, individual-parties’ managed and semi-governmental civil and military-run schools. The 2009 education policy envisages a regulatory authority for private educational institutions in Islamabad but there seems to be no progress over the issue on both provincial and federal levels.

Some English medium schools and colleges have low standard and are run purely under financial considerations. Barring a few, especially owned by individuals and groups, many give little attention and resources to developing teachers and students’ skills. They have their separate curricula prepared by private local or international organisations.

Security forces too run a vast network of cadet schools throughout the country besides many other schools in the cantonment areas under their indirect supervision.

Some other schools and colleges are academically related with foreign universities. These elite institutions offer expensive education to the children of affluent class with all facilities and excellent learning environment from the very childhood.

We should learn from the experiences of the other countries. Developed countries around the world have established uniform system of education. The US and Britain have done the same and reached new heights.

In the Republic of Korea, there is a strongly prescribed national curriculum and all its details are determined by the Ministry of Education. In Japan, too, the ministry prescribes guidelines for curriculum and authorises textbooks in elementary and secondary schools. Throughout the country, the school year begins in April and ends the following march.

Malaysia has also evolved a common curriculum and common system of education. All schools, whether private or public, have to abide by the contents and curriculum approved by the ministry. All of them operate on semester system and the school calendar begins simultaneously throughout Malaysia in the first week of December. In Sri Lanka, there is a common national curriculum from class 1 to 11 and the school year lasts from January to December in the entire island.

There is a need to remove the discrepancy between the curricula of religious and mainstream educational system of education. Religious seminaries should be included in the mainstream educational network. For this purpose, a spirit of give and take is required on part of both the government and management of madaris.

There should be a uniform curriculum from class one to twelve. At the intermediate level, all the students should take a federal examination on the pattern of developed countries. Preferably, this examination should be conducted by reputable private institutions to ensure fairness, transparency, and reliability and to minimise the chances of malpractices in them.

Equal opportunities of quality education should be made available to all. For this purpose, education should be made free and compulsory. English should be made the medium of instruction. Science subjects should be taught in English from day one. Universities should be research centres only and should not conduct graduate or post graduate examinations.

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Verily, His command, when He intends a thing, is only that He says "Be!" - and it is! (Al-Quran)

In a recent TV show, noted scientist and former Chairman of Higher Education Commission, Prof. Dr. Atta-ur-Rehman stressed upon pulling the nation up through the prescriptions of knowledge-based economy.

Key ingredients of this timely and wisely recipe include: development of education with a focus on innovation, discovery, and inventions pertinent to spread-out sectors of economy; motivating the youth to become progressive entrepreneurs; application of basic (and advanced) scientific wisdom towards improvement in production modes, sustained development of human resources as well as incremental enhancement in quality of life of ordinary people.

It is deplorable to note that while many voluminous and exhaustive studies have been undertaken by various departments, think tanks, universities, and non profit bodies, very little headway seems to have been made in the practical respect. A review of the scenario refers to some core aspects which can be considered for speedy implementation.

Knowledge-driven economy cannot kick start without widespread and comprehensive usage of information and communication technology. A very interesting paper by Dr Rukhsana Kalim and Suleman Aziz Lodhi proves the fact that usage of personal computers and related components of technology is extremely limited in our context. Whereas the value of productive output of intangible objects is increasing across the globe, our economy is mostly dependent on physical commodities of very primitive nature.

The usage of information and communication technology across the productive sectors has to be promoted through an all out strategy. The development of a human resource at various slabs of competence is the first step. From the top crest of research scientists to the basic level of technicians, there is a widespread need that needs to be addressed. Other attributes include a credible infrastructure of power supply and its alternatives, dependable communication system and security.

The country possesses strategic advantage in several sectors and sub-sectors which can be shored up and expanded. Banking, finance, and commercial wisdom are avenues which have been stabilised in the country with a long history and background.

Well-known figures such as Agha Hasan Abedi and Moin Qureshi have been performers and achievers who earned worldwide recognition. Sadly, inept politicisation of nationalized commercial banks and state-owned enterprises has brought a bad name to this sector where our professionals have excelled in a wide variety of domains.

Due to domestic turmoil and political upheavals, it is not possible to draw an extraordinary response from choosy and demanding barons. But a focused strategy to train and prepare banking professionals for overseas locations could be a desirable option. Introduction of cutting edge educational and training programmes, affiliation with most competitive certification bodies, and exposure to the sophisticated technological and procedural discourses can truly help bolster this already rising sub-sector of our human resources.

A knowledge-driven economy essentially requires continuous support of vendor operations of various kinds. The expansion of IT, electronics, telecom, and computer hardware is a core factor for fulfilling the rising complex demands in the various sectors.

A dependable zero fault service in every domain is the ideal yardstick to gauge the performance criteria. Needless to say, a rational expansion of small and medium enterprises in the domain of maintenance, repairs, and replacement of such systems is utmost vital.

The technical and managerial human resource with effective skills and application capacity is the first requirement. At present, technicians and helping hands pick up the skills through the tedious path of on-job learning.

The technical and vocational training bodies will have to be activated to perform this task. Fortunately, all the four provinces have a reasonable infrastructure of such training facilities. A vision building with logical tenets and rigorous follow up in respect to timely implementation is required with unabated commitment from provincial governments.

Pakistan will do well if it focuses on English language teaching. An estimate informs that the country has over half a million schools, learning centres, and literacy imparting units. Shortage of English teachers is a problem. Dr Jilani Warsi, an academic, has highlighted several handicaps in one of the papers. Limited capacity of teachers to understand educational objectives, lack of skills in respect to English teaching, inappropriate teaching methods, materials and books, defective examination system, lack of supervision and limited motivation are some of the recurring shortcomings.

By addressing this one issue alone through focused interventions, many multiplier effects can be generated. Proficiency in English language can help incumbents enhance their job prospects, tap diversified sub-sectors in economy and help raise personal and cumulative incomes.

With innovative combination of allied skills, the recipients of English language training can become a most valuable human resource in education, e-business, e-government, trading and commercial domains, etc. Time is fast running out. It is a moment to take action before the forces of time push us into the annals of redundancy.

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Verily, His command, when He intends a thing, is only that He says "Be!" - and it is! (Al-Quran)

Aman ki Asha, a peace initiative started by the Jang Group and Times of India, is celebrating its second anniversary. The campaign has had its presence felt in the media throughout, with events like holding a welcome lunch for Aisam-ul-Haq in Karachi after he reached the Grand Slam final in September 2010.

A Baton Relay and Peace Chain was made in June last year, along with a Hakies Peace chain which required schoolchildren to send messages of peace across border. A series of seminars were also held in April last year to have a deeper look at the problems and a "Talking Peace" conference in Karachi the same month, to discuss public interaction and media issues. In March, an Indo-Pak mushaira (poetry recital) took place in March.

"Aman ki Asha is a brave and a very correct step in the direction of encouraging peace and harmony between India and Pakistan," says Parijat Kaul, a Delhi based filmmaker.

"And perhaps peace can be achieved only by the youth of the two countries. Like "asha" (hope), the word youth is also indicative of future. The two go hand in hand. Both denote change from current situation. Both offer change for the better. Youth of both the countries will certainly benefit from this programme and look for ways to contact each other across the border and work together to create a larger audience for peace and harmony," says Parijat.

"If the two countries can understand the meaning of peace," says a 19-year old Abha Sharma, a law student at the Punjab University, Chandigarh, "They can stop killing each other and causing bloodshed. Maybe then these people can become doctors, lawyers, and engineers rather than dying in the battlefield."

Bollywood movies are very popular in Pakistan and this gives producers the benefit of exploring a market here. Pakistan’s own film industry has been battling a downfall since the last three decades now, and though the competition in the Indian market is immense, Lollywood can definitely benefit by getting its post and pre-production work done in India where the level of expertise is much higher than here. There is ample room for technical training for not only Pakistani films’ technical staff but also other media like news channels and television industry. There is, of course, room for greater technical co operation on both sides.

"Aman ki Asha is a great initiative and important for our region to learn to co-exist. There should be more such cultural, business, and social exchange," says Ali Saleem of Begum Nawazish Ali fame who recently tested his luck in the reality show Big Boss, based in India. "However, it has not made much difference in showbiz and this is sad because Indian flicks are allowed here but artists cannot easily find work in the market across border. Often, there is a visa issue and they are not allowed to cross borders."

Pakistan has many economic strains. Yet the economy next door is working a lot better, with an immense scope for economic co-operation and trade. This is why a small but representative group of Indian CEOs and VPs traveled to Lahore and Karachi in early December 2010 to participate in discussions with the members of the IT community in the two cities.

"There is a market for products on both the sides, but the Indian market is of course eight times larger. This is basic economics that whenever there is trade, investments, and jobs, etc, between two countries, it will generate prosperity, "says Amin Hashwani, the CEO of Pakistan India Business Forum. "SAARC has little trade as compared to EU or ASEAN, which have four to six-fold more trade among themselves. And this Indo-Pak trade is stagnated due to the politics. The civil society can play a major role in building an atmosphere of peace."

But people like Parijat Kaul are more skeptical. "While there is much scope now for people-to-people contact, the movement Aman Ki Asha may not directly benefit trade. We cannot cooperate in the trade and economy matters ranging from trade of onions to transportation of crude oil and buying and selling power. However, it surely can create ground for increased discussion between the two nations on issues related to trade and commerce," Parijat says.

"We business people are problem-solvers on a daily basis," adds Hashwani. "Though the level of skills in Pakistan’s IT sector equals that of India the labour here is much cheaper. Similarly, Pakistani minerals like marble and agricultural products like cotton have a huge market and competitive advantage in India but trade barriers are hampering this traffic," he says.

The two countries are among the most densely populated regions in the world. It is all the more important that there be peace between the two nations. We share a common culture, natural resources, river basins, history and even problems like unemployment, poverty and illiteracy. It is hoped the two countries learn to resolve these issues together with the help of platforms like Aman ki Asha.

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Verily, His command, when He intends a thing, is only that He says "Be!" - and it is! (Al-Quran)

Despite having some robust economic growth spurts of 6 percent to 9 percent, Pakistan can hardly be portrayed as a good example either of consistent rapid growth or enviable advances in human development and social protection.

In fact, the country needs to seriously consider overhauling and reengineering of social protection and human security machinery, which is both inadequately oiled and badly designed.

The economy, at present, cannot enable the state or vice versa to ensure people’s right to life with dignity, let alone build capabilities of society to function in a desirable fashion.

Some basic statistics make a case for policy interventions in the direction of increased social protection. Comparatively speaking, despite having better growth rates between 1990 to 2009 than Bangladesh, Nepal and Maldives, Pakistan could add 5 more years in life expectancy at birth while these countries added 13, 12, and 11 years respectively.

It must not be surprising that Pakistan is the lowest on social protection spending with 1.6 percent of GDP in South Asia while offering social protection to around 5 percent of its population who are mostly working in formal sector. In comparison, Sri Lanka is the highest 5.7 percent of GDP utilised for the purpose.

Pakistan, however, has shown some progress in decreasing gender disparity in net enrolment rate but disaggregated data shows much of the progress concentrated in Punjab with Sindh and Balochistan getting worse off while Khyber Pakhtunkhwa shows no major change. Such skewed developments for whatever reasons create disparities in the short run and conflicts in the longer run.

On another account, taking a global picture, the effects of Washington Consensus approaches religiously followed during last many years have not benefited a sizable majority of wage earners.

The share of incomes from labour has actually declined. Pakistan’s economy seems to be consistent with global trends of economic growth which have disproportionately benefited owners of land and capital more than owners of labour.

Even in the US, as in many parts of the world, the income share of labour has gone down relative to the productivity gains in the economy. Some analysts like Michael Lim Mah-Hui in his latest book, Nowhere to Hide have claimed that these trends have played a significant role in global economic and financial meltdown.

In Pakistan, while the industrial fortunes have not really created a robust turnaround for more jobs in the formal manufacturing sector, the plight of home-based workers has increased many folds.

Apart from inflation and increasing poverty, the 8.2 million poor women who are working as home-based workers have much to worry about in their lives. They are not recognised as workers so they do not qualify for formal social protection mechanisms.

Many of home-based roast pine nuts, stitch footballs, cut, trim, and stitch garments, make shoes and prepare fancy clothing. While they form 65 percent of total women workforce, they are the least paid and most exploited in the value chain of production processes being in an extremely disadvantageous social and cultural positions.

Likewise, a recent research by Pakistan Institute of Development Economics claims that trade liberalisation in Pakistan has adversely affected women in relatively poor households by increasing their workload, deteriorating capabilities, and increasing relative income poverty.

Talking of inequality generating effect, it claims that the effects remained gender neutral or favoured women in the richest group of households. Such researches ask policy makers to emerge out of the dream world of neo-liberal orthodoxy, which claims that free trade and free-markets can ensure the welfare function of economy by making everyone better off.

The above-mentioned examples argue that the government should try to build a national social protection arc by bringing together employers, workers, civil society organisations and government departments.

The monsters of disease, inadequate housing, poor water and sanitation, and expensive education and transportation all collectively put a premium on our national economic growth. We need to seriously address such issues. We should realise that national security lies in ensuring human security at the local and individual level and from such foundation emerges a successful and cohesive nation state.

The writer is Executive Director of Institute for Development Initiatives, Islamabad and can be contacted at abbasi.zubair@gmail.com

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Verily, His command, when He intends a thing, is only that He says "Be!" - and it is! (Al-Quran)

My primary gripe with the present political dispensation is the lack of courage that has been demonstrated by the elected government in terms of challenging entrenched state policies. Most important in this regard is the military establishment’s monopoly over foreign, economic and educational policy. Where some individuals have taken on the establishment they have been isolated by their own parties. Only when there is a critical mass of political forces willing to challenge the dictates of the men in khaki will Pakistani democracy establish meaningful roots.

Having said this it would be unfair to completely disregard what parliament has managed. Lots of things were not put into the 18th amendment (and have not been put into the 19th amendment either), but the fact that such an amendment was formulated and then passed by both houses of parliament was in itself a significant development. However, as a number of commentators have noted in the months since the passing of the 18th amendment, there are some serious fallouts that need to be addressed if the prospective decentralization of powers envisaged by the authors of the amendment is not to be thwarted by petty politics and legal/technical cul-de-sacs.

Among the many subjects that were previously under the purview of the centre (and therefore legislation by the federal government) but are now very much provincial matters is the legal status and rights of the working class. In recent weeks, the Punjab Industrial Relations Ordinance 2010 (IRO-2010) has been formulated and passed, thereby filling a vacuum that has existed since April 30, 2010 when the Industrial Relations Act – 2008 (IRA-2008) expired.

That approximately eight months passed before the relevant authorities got their act together speaks volumes about the priorities of our elected representatives (although the problem goes deeper than a simple disdain for worker’s rights). In the event, the Punjab IRO-2010 is a piece of legislation that does anything but grant relief to this country’s beleaguered working people. It is effectively modeled on the IRA-2008, which in turn was scarcely different from the IRO-2002 promulgated by General Pervez Musharraf.

In short, labour laws that have been passed in the last decade or so are part of the general -- and global -- trend towards erosion of worker’s rights. The IRO-2002 precipitated a fairly uniform response on the part of established trade union federations in Pakistan on account of the fact that the basic worker’s rights of organisation, assembly and strike were substantially curtailed. The general premise of labour law was of course maintained, namely that workers, owners and government should together deliberate and develop consensus on all matters relating to relations at the workplace. But IRO-2002 reflected just how much the balance of power had shifted away from workers and towards owners and government.

Indeed, much has changed since the original IRO was promulgated in 1969 under the Yahya Khan regime. Formulated on the back of arguably Pakistan’s most militant and widespread social movement in which industrial workers played a defining role, IRO-1969 reflected the power of the working class vis-a-vis owners and government. Many trade unionists and political workers lament that IRO-1969 actually marked the beginning of the end for the labour movement insofar as the autonomy of worker’s organisations was eroded and a labour aristocracy was created in the form of collective bargaining agent (CBA). There is an element of truth to this claim, but elected representation and formal bargaining under a stipulated legal code is the very basis of formal trade unionism, and in this respect IRO-1969 provided workers with formal recourse where previously there was none.

Subsequent legislation reaffirmed the basic political entitlements of industrial workers while gradually creating auxiliary categories of workers. So, for example, many state employees do not enjoy the status of industrial workers per se and can organise themselves only in the form of (elected) associations with considerably fewer political rights than CBAs.

When fiscal disciplining emerged as a major policy instrument of the international financial institutions (IFIs) in the 1980s, there was a parallel reassertion by government and owners of state and class power respectively. This was eventually reflected in labour laws such as IRO-2002 and its subsequent offshoots.

Alongside the latest draconian piece of legislation that is the Punjab IRO-2010, recent Supreme Court (SC) verdicts in cases pitting Pakistan Telecommunications Company Limited (PTCL) workers against their Arab management evince a startlingly paternalistic attitude that flies in the face of the SC’s carefully crafted populist image. Specifically, the SC has suggested that the management-worker relationship is akin to a master-servant tie in which the servant necessarily has limited rights and is reliant on the largesse of the master to secure a living wage and decent working conditions.

In short, workers are slowly but surely having rights secured over a long period of time taken from them through the law. To be sure, this is a period of retreat for working class politics around the world. There have been objective changes in capitalist production that have been coeval with this working class retreat, namely the shift from the concentrated factory unit to contract-based labour operating in fragmented workshops or even in the home. The ability of capital to traverse space and time and the attendant limits placed on labour mobility have increased the power of owners (and governments) while underlining the weaknesses of the working class.

Nevertheless, working class resistance continues in some shape or form. In many cases, workers are struggling simply to be recognised, be given some kind of legal cover, and lay claim to governmental benefits as well as adequate remuneration from owners. Instead of guaranteeing these rights, established labour laws -- including those that are being drawn up by the provinces in the wake of the 18th amendment -- actually squeeze more and more out of workers in the name of austerity, efficiency and security.

Workers, peasants, students and all others who struggle for their rights -- and have historically been at the forefront of all progressive political movements throughout this country’s existence -- are, in fact, being harassed in the name of security. Anti-terrorist legislation is now quite regularly invoked against working people, even while the individuals and entities propagating hate and bigotry continue to be given free reign by the state. It is a sordid story, but one that must be told again and again so that an unapologetic and militant labour movement can once again be built in this country that can reclaim the working-class rights that could be taken for granted until a decade and a half ago, and also contribute to the transformation of state and society that we so desperately need.

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Verily, His command, when He intends a thing, is only that He says "Be!" - and it is! (Al-Quran)

In an unexpected move, the government of Pakistan enhanced the limit for import of used cars from three to five years early last month. The step was reportedly taken in a bid to break the monopoly of local car manufacturers. The general public, mainly the potential buyers of cars, were pleased by the decision as they expected an immediate fall in the prices of cars assembled locally. However, this feeling remained short-lived as the government reversed the decision the same month, leaving an impression that there was something questionable in the whole affair.

The perception that local assemblers were making undue profits has also been backed by a study conducted by the Competition Commission of Pakistan (CCP) on the country’s automobile sector. The study highlighted the anti-consumer practices of the car manufacturing industry, where local assemblers have constantly been increasing prices over the years. For example, during the period starting from January 2008 and ending in March 2010, local car manufacturing companies raised the prices of their products almost 10-15 times up to 68 percent.

Critics claim the ban on import of re-used vehicles has given a free hand to the local assemblers to charge as much as they can from customers. On the other hand, those associated with the local auto assembling and vending industry say such measures would harm the local industry and render hundreds of thousands of people jobless. They also allege the importers mostly misuse such relaxations in connivance with customs officials, etc.

The import of reused cars is allowed under schemes like transfer of residence and gift schemes in case of Pakistani expatriates who want to import vehicles for their own use or their families. Similarly, under the special regime, taxes are levied on the basis of engine capacity and irrespective of the value of the vehicle, brand and additional accessories fitted in it.

It was on the proposal of the All Pakistan Motor Dealers Association (APDMA) that the federal ministry of commerce had allowed import of cars as old as five years and less under personal baggage, gift and transfer schemes.

It was expected that maximum imports could be seen in low-end car segment, meaning those vehicles having engine capacity in the range of 1000cc to 1300cc. The decision was also being seen as a strong message of displeasure to domestic car assemblers for their constant ignorance to the government’s demand to lessen car prices.

"Despite increase in prices, the quality of material used in locally assembled car is of bad quality", says Nadeem Khan, a car dealer based in Karachi. He tells TNS that all over the world production of Suzuki Alto and 1300cc Toyota has been stopped but in Pakistan these models are being assembled endlessly. He says it has become a practice all over the world to place safety bags in new cars but in Pakistan there is no such concept. "Unfortunately, the interest of consumers comes in the end and the protection to the so-called local industry comes first", he adds.

Nadeem says, "Rumours are abound that whenever such a decision is taken, the diplomatic circles of countries like Japan and China come into action. These countries give huge development assistance to the country and are always in a position to influence the government in protecting their investments in the country," he adds. For example, he says it has been quoted widely that Japan International Cooperation Agency (JICA) gives $900 million in grants to the country. "How much we depend on China in almost every field of life is no secret at all," he adds.

However, the auto industry stakeholders have their own story to tell. They say they appealed the government to ensure fair use of car and auto-parts imports so that the local industry is not destroyed altogether.

Pakistan Association of Auto-Parts and Accessories Manufacturers (PAAPAM) Vice Chairman, Nabeel Hashmi, tells TNS that "the misuse of this provision can be judged from the fact that less than 3,900 used cars were imported in Pakistan during the last fiscal. These included commercial vehicles besides passenger cars," he says adding that 6000 used cars were booked within only two weeks of the passage of this order. He says it shows the importers knew that an SRO would be issued in this regard and that’s why they had done their homework.

PAAPAM’s point of view is that there is no need to take decisions like allowing import of five-year-old cars to bring the prices of locally produced cars down. The problem it says can be resolved by adhering to the Auto Industry Development Programme (AIDP).

The association has hailed Prime Minister Yousaf Raza Gilani for rescinding the decision, and saving the vendor industry and its 200,000 skilled workers from imminent disaster and massive closures. The statement said that in the year 2005, the government had succumbed to the pressure of cars import lobby resulting in import of more than 120,000 used cars over a period of three years.

PAAPAM leaders say the country’s auto industry constitutes more than 1,600 vending units specialising in various technologies, including sheet metal, plastics, rubbers, castings, electrical, etc employing latest technical know-how and producing parts, as per global quality standards. All of these will suffer badly in case the government allows used cars to arrive in the country.

PAAPAM Vice Chairman Nabeel Hashmi tells TNS that they are asking the government to impose high tariffs on high-tech auto parts and give the local vendors the task to supply them. He says there’s a need to rationalise the prices of locally assembled cars and the government must adopt AIDP in true spirit. So far, the components related to the assemblers have been implemented but those related to the development and capacity-building of auto vending industry have not been executed properly.

Nabeel says the devaluation of Pakistani currency vis-a-vis US dollar and Japanese yen is also a major cause behind rise in car prices. "This is a blessing in disguise for the local vendors as dependence on local products increases whenever a need arises to save foreign exchange," he adds.

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Verily, His command, when He intends a thing, is only that He says "Be!" - and it is! (Al-Quran)

The worst fears have come true. Flood victims, mostly facing hardships in temporary shelters or relief camps or makeshift arrangements, are left alone to face the burden of harsh realities. Food supplies have reduced, the number of visits of political figures and philanthropists has come down and Watan Cards have become useless without the promised money.

The government has not been wholly successful in fulfilling its basic promises and addressing the situation in a more comprehensive manner. Effects of floods have now started to appear in the country’s economy and its politics. Most of these effects were predicted earlier but not heard at the policy level.

Cries of the IDPs seem to have not reached to anyone in power and authority. This neglect will harm lives and livelihood of millions of families but will also irk country’s economy and politics for several years.

Early signs of downfall in agriculture production are already appearing. The biggest effect so far has been seen in agriculture and its sub-sectors. Food production has suffered biggest shortfall during the last 10 years. Agricultural crops such as cotton, rice, and sugarcane and to some extent mangoes, are badly affected in Punjab.

World Food Program (WFP) has recently announced that about 70 percent of Pakistan’s population does not have adequate access to proper nutrition. Most of this population with less than adequate nutrition lives in rural areas of the country.

Already resurgent in the Federally Administered Tribal Areas and Khyber-Pakhtunkhwa province, agricultural devastation brought on by the floods leaves much of the province susceptible to serious shortfall in fruit production, wheat and sugarcane and increase in poppy cultivation.

The government stated that $15 billion were wiped out of the economy -- that’s about 15 percent of the GDP. This indicates serious crisis emerging in the coming months if agriculture and industrial sectors do not perform well and affects of flood on agriculture are not defeated soon.

The areas that are agriculture powerhouses of Pakistan -- where the bulk of agriculture and food production takes place -- have been mostly devastated. Areas that produce cash crops for export and agro-industries in southern Punjab, KPK and Sindh were largely damaged, so the government’s assessments are clearly realistic. Rural agriculture and the rural economy have been hit the hardest. The agrarian sector that provides significant proportion to our economy (approximately 23 percent of GDP) has faced serious setback.

Though the immediate effects of flood were highly localised in areas where flooding was at its worst, however, the recent wave hit agriculture production and consumption all over the country. Supplies of fruits, vegetables, and grains (rice, malt, etc.) have already 21 percent lower than last years’ figures. Similar shortfall in cash crops, including cotton and tobacco was also recorded. Prices of food (onions, tomatoes, etc.) and grains have increased and consumers are facing the brunt.

The loss of over 10 million livestock along with the loss of other crops has brought down the total agricultural production by more than 15 percent. Manufacturing sector has also reported that floods have sapped growth as people are still struggling to cope with the destruction.

Milk supplies have also fallen by 15 percent, which has increased the retail price of milk by 15-20 percent per liter in cities. Some investors have started to buy the devalued stock in the hope that they will rise again. The recent sharp rise in rice and wheat prices can be attributed to last year’s crop losses owing to floods. Though some local dealers claimed the new crop was comparatively better and prices may come down but the Kharif crop will take another 2-3 months to reach to the market.

On the other side, International Labour Organisation has reported that more than 5.3 million jobs have been lost due to floods, forcing productive labour into poverty and further marginalisation. The GDP growth rate of 4 percent prior to the floods has turned negative with the estimates ranging from -2pc to -5pc of GDP. Though with current trade and industrial growth and focused government actions the GDP growth may improve in 2011 and beyond, it will be several years before it can return to the 4pc level of 2009.

As a result, Pakistan is unlikely to meet the IMF’s target budget deficit cap of 5.1pc of GDP, and the existing $55 billion of external debt is growing without any immediate possibility of recovery. The loss of crops has hit the textile manufacturing, the largest export sector of Pakistan.

It is important to note that despite militancy, terrorism, war, high inflation, and a global meltdown, the economy has still managed to grow in the past. It grew by 4 percent last year and it was predicted to be 4.5 percent this year before the floods. In post-flood situation, economic growth will undoubtedly slow, but it is predicted that growth will be at least 2 percent this year compared to 1.2 percent growth during the first year of People’s Party government.

Post-floods situation is also causing political consequences mostly due to public perception of governance inefficacies and it has been said that if the situation is not adequately addressed, especially in fight against terrorism, it might lead to future political unrest. The government must also simultaneously take into account two ongoing insurgencies in Balochistan and Waziristan, and the growing urban sectarian discord.

There is a growing concern that militant groups will now gain a new foothold after providing relief to local populations. The recent military operations against Taliban have helped push militants out of certain areas, including Swat, Malakand and South Waziristan. Charity and social welfare organisations are providing support on the ground and will gain local support, but this may translate into new backing for their militant wings. Extremist organisations that are mobilising humanitarian operations are getting support from the masses, especially in flood-hit areas. This must be checked and addressed through bigger role and focused inputs from government and civil society.

While this has been an opportunity for the government and opposition groups to come together and devise long-term solutions for economic and political revival and Pakistan’s protracted problems, it has already been wasted in other petty battles. Pakistani elite has so far failed to look beyond immediate concerns and look for ways to limit corruption, improve accountability and transparency, and increase the government’s financial resources by raising taxes and cutting exemptions.

In early signs of slower economic growth, the government is not taking internal reforms and medium-term economic and political reform agenda seriously. There is more reliance on foreign aid. Instead of relying on foreign aid to bail the country out, this is a real chance to expand the country’s own resource base. And foreign governments should put pressure on Islamabad to put its own house in order before they ask for more aid.

Government is still hesitant to undertake the far-reaching, unpopular, but critical measures that the country needs. Yet another opportunity will surely be missed.

Foreign assistance and aid will be only a small piece of the solution in the long term. What’s most needed are policy reforms so the government can collect more in tax revenue, strengthen the education and health systems, ensure land rights to tillers and put the energy sector on a sustainable financial footing.

Unless the government brings in economic reforms, there’s really no chance that foreign aid can transform the country. Wise and proper use of aid money can make a real difference in how quickly Pakistan is able to recover from the floods. Redirecting unspent aid money towards flood reconstruction can bolster Pakistan’s economy at a critical moment and lay the foundation for growth.

The writer is Deputy Chief of South Asia Partnership Pakistan and Global Campaigner

irfanmufti@gmail.com

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Verily, His command, when He intends a thing, is only that He says "Be!" - and it is! (Al-Quran)