Charity is no part of the legislative duty of the government.
-James Madison (1751-1836)
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CONTENTS:
0 Is Anti-Child Labor Legislation Anti-Children?
By Gautam Bastian
0 Buying a Car in Pakistan
By Khalil Ahmad
0 Letters to FreePakistan
0 Letters from the Press
0 FreePakistan News Briefs
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CELEBRATE CAPITALISM™ 2004
"For the love of freedom! And the glory of human creativity!"
Sunday, June 6 2004, is International Capitalism Day!
Worldwide rallies, concerts, debates, awards, street parties, workshops, fun and festivities!
For details, please visit: http://celebratecapitalism.org/ http://celebratecapitalism.org/bernsteindeclaration/index.html
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DISCOVER YOUR POLITICAL LEANINGS! World's Smallest Political Quiz
Take the Quiz now and find out where you fit on the political map!
http://www.theadvocates.org/quiz.html
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What is Philosophy of Liberty? A screensaver by Lux Lucre and Ken Schoolland explains it.
Download and install it. http://www.free-market.net/rd/321907219.html ; http://www.jonathangullible.com
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ALTERNATE SOLUTIONS INSTITUTE PUBLISHES ITS FIRST BOOK OF TRANSLATION
Alternate Solutions Institute, Lahore, Pakistan, has published its first book of translation, Ken Schoolland's "The Adventures of Jonathan Gullible: A Free Market Odyssey," in Urdu which is understood not only in Pakistan but throughout South Asia. Ken's modern fable has so far been published in 29 languages of the world Urdu being the 30th. This book explains the principles of market economy in a simple manner and helps promote the concepts of open market and property rights. The book has been translated into Urdu by Khalil Ahmad. A. S. Institute is indebted to Irshad Ameen for his tireless efforts in getting the book out of the press.
It is hoped that the book will give a new direction to the discussion of welfare state in Pakistan.
If you want to purchase the book, contact at asinstitute@hotmail.com ; khalilkf@hotmail.com
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HOW TO END ALL WARS FOREVER
Aslam Effendi, an old and unsung Libertarian of Pakistan, has written three books on free market philosophy: HOW TO END ALL WARS FOREVER, HARD FACTS OF HISTORY, and, ECONOMICS FOR THE CONFUSED. When no publisher agreed to invest in the project, he spent out of his own pocket to get HOW TO END ALL WARS FOREVER printed. But, for want of a distributor, this book which has been praised as a classic remained dumped and could not find its way to the market. For details, read ‘Aslam Effendi: A Free Marketeer in Pakistan’
or visit http://asinstitute.org/articles.php. Alternate Solutions Institute, Lahore, Pakistan, has purchase all the copies of the book from Aslam Effendi to make it available to the right persons and to compensate the author as well.
If you want to purchase the book, contact at asinstitute@hotmail.com ; khalilkf@hotmail.com
A. S. Institute intends to publish all of his books; if you are interested in this project, please contact at the above-given email addresses.
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FREE MARKET THINK TANK OFFERS $10,000 FOR BEST ARTICLES
The International Policy Network (IPN), a London based free market think tank, is offering a $10,000 prize to writers anywhere in the world whose published articles work to promote the institutions of a free society – free speech, property rights, the rule of law, free markets and sound science.
The Bastiat Prize for Journalism, first held in 2002, is inspired by the 19th century French philosopher Frédéric Bastiat and his compelling belief in free trade and the defence of liberty. Bastiat's brilliant use of satire enabled him to turn even the most complex of economic issues into a tale to which the average person could relate. In keeping with this legacy, prize entries are judged according to the intellectual content of each article, the persuasiveness of the language used and the type of publication in which they appeared.
Last year the competition attracted over 140 entrants from 28 countries across the developed and the developing world: writers came from China, Zimbabwe, Pakistan, Israel, UK, Sweden, Australia and the US.
Entries will be accepted between now and June 30th 2004 and must be in English. They can be in the form of one or more published articles totalling no more than 4,500 words inclusive.
Rules, regulations, judging criteria and previous entries can be found on IPN’s website: www.policynetwork.net
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IS ANTI-CHILD LABOR LEGISLATION ANTI-CHILDREN?
By Gautam Bastian
[The author of this story is a native of India pursuing his Masters of Arts in Economics at the University of Mumbai, India. This article first appeared on http://www.aworldconnected.org and is reproduced here with due permission.]
“The task before the policy reformer is indeed overwhelming. The situation provokes the prayer;
‘Good Lord, protect me from my friends; against mine enemies, I can defend myself.’”
B. R. Shenoy
They deliver tea, make firecrackers, embroider intricate designs, manufacture bangles, and most of them don’t go to school. Policymakers and moralists claim it is contemptible, yet these little laborers are holding out a slim lifeline to impoverished families in the hinterland, or are just trying to keep themselves from starvation. The child laborer has a tough life, but those that loudly proclaim themselves to be his saviors may in fact be making his life more difficult.
Since 1933 there have been laws in force that ban or regulate child labor, including Article 24 of the Constitution [of India] that expressly prohibits it. None of these provisions has been effective in curtailing its proliferation. This invites quite a few questions, both about the nature of the problem and these legislative “solutions.”
A rigorous implementation of the laws could have some rather undesirable consequences. Many services and products that people take for granted today would disappear or become far more costly; the corner tea shop would no longer deliver ‘chai’ at Rs.2. However, the greater cost would fall in the lap of child laborers and their families, who without work, would be pushed to the brink of starvation.
This is not to say, however, that everyone is worse off because of these laws. Police officials regularly threaten child labor employers and are paid a ‘hafta’ in order to ensure that they don’t “see” the child labor units. There are also the “socially aware” elites who want to see the “scourge” of child labor lifted from their civilized society and are placated by the existence of these laws. Bertrand Russell points out (in his essay ‘The Superior Virtue of the Oppressed’) that insulated from the grave realities of deprivation and poverty, they harbor romantic notions of childhood and innocence. This is especially poignant because India is quite similar today to the United States or Europe in the 19th century, where children played an important role as industrial laborers, and even today work on farms and in small businesses.
Repealing the ban on child labor, though politically difficult, would eliminate police rent-seeking behavior, decriminalize these marginalized industries, and grant social workers a chance to educate both employers and workers through health and literacy programmes, something currently hindered by the former’s misgivings, and reluctance to cooperate. In an effort to draw neat distinctions between oppressor and oppressed, it is often forgotten that the entrepreneurs in many of these cases are also of meager circumstance, and are engaged in trades to which they were introduced as child laborers. Eliminating the stigma of criminalization would allow them to legitimize their businesses and proudly contribute to the economy, rather than eke out a living on the margins.
Indeed, we must draw a lesson from the facts: despite strong opposition from policy makers and international organizations, child labor thrives. The demand for and supply of child labor will only diminish as the economy develops and the value of education rises along with income. It will then be possible and even preferable for children to spend more time at school and less at work.
Undoubtedly there are instances of cruel, unjust, and deceptive employers as well as harsh working conditions in hazardous industries. But this is true for all workers, not just children, and the health implications are equally grave for all. Only technological developments and an increase in capital intensity can ameliorate these circumstances, neither of which can be accomplished by this policy. Forcing the poor into destitution, by demeaning their efforts to help themselves, is the cruel reality of ant-child labor legislation.
BUYING A CAR IN PAKISTAN
By Khalil Ahmad
[This article first appeared in Tech Central Station http://www.techcentralstation.com/051904B.html and is reproduced here with due permission.]
Last week, the Pakistani government placed an order for a luxurious Mercedes Cardiac ambulance at a cost of more than 13 million rupees (about $225,000). The vehicle, first of its kind, will be used exclusively by a select group of VIP patients in the capital, Islamabad. No doubt the privileged few will include civil and military bureaucrats and so-called "representatives of the people."
But, at the same time, a large number of taxpaying people eager to buy a car are being denied a fair deal. Over the past couple of years the local car industry, which suffered negative growth of 24 percent during 1999-2000 due to lax demand, has witnessed a steep rise in demand that it is unable to meet. Needless to say, local car manufacturers and vending industries are exploiting this gap between supply and demand to their maximum benefit, and to the detriment of the consumer. Various factors, including car financing schemes introduced by local and foreign banks and a disarrayed transport system, have conspired in this situation. But the government ministries and officials concerned are also accomplices.
Misusing high tariff protection, which currently reaches to 150 percent on some vehicles, car manufacturers are selling their cars at twice the international market price. They charge full down payment at the time of booking and give a delivery date ranging from two to eight months. (According to some estimates, this period may extend from six months to two years.) For a spot delivery, the buyer has to pay a premium of 30,000 to 150,000 rupees, depending on the make and model of the car.
After persistent complaints from the few quarters advocating the interests of consumers, the federal cabinet agreed in February to reduce the import duty on completely knocked-down (CKD) and completely built-up (CBU) cars by 20-50 percent. Car dealers saw this as a mere eyewash -- a gentle rebuke to local car manufacturers that won't encourage the import of new cars. How can it? Even under the new duty structure, the price of an imported 800cc car is still higher than the price of the same locally assembled 1000cc car. A substantial reduction could make a difference; but that would harm that sacred cow; local industry.
The local car industry, even after years, is still heavily protected. Its vending industry, which provides it with parts and accessories, enjoys zero import duty on raw materials, and just 5 percent duty on the import of sub-components. What else do they need? A hapless people in need of personal cars with no free choice! Thanks to the government's protectionist policy, they already have these in abundance. People have no choice but to buy whatever the local auto industry offers them: no variety, no quality, an inflated price and a long wait. There are hardly 12 models in the local market, but if Pakistan opted for free trade, Pakistanis could choose from a range of more than 150 models with various prices and far better quality.
The crux of the matter is free trade: high tariffs on the import of new cars and a restriction to import re-conditioned cars have thrown cars way out of the reach of many people. So who does it benefit? Only the few that work in the local auto industry. To safeguard these few, the interests of the majority are being sacrificed on the altar of Localism, Nationalism, and Local Industry. So what if we are self-sufficient in car production! What does that mean for the consumer? Nothing!
Some time ago, the government was peddling the slogan: "Be Pakistani, Buy Pakistani." What that really meant was: Be patriotic, buy low-quality, over-priced goods. Conversely, if the government reduces or minimizes the duty on the import of new cars, the price of cars will slide to an affordable level and the number of car owners in Pakistan will almost be doubled. If the restriction on the import of re-conditioned cars is lifted, this number may treble.
The fight is on. Local auto industry and its allied units enjoy a privileged position, which naturally they wish to defend. (They had a victory last year when they succeeded in stopping import of low priced Chinese 600cc car.) They are putting maximum pressure on the government not to reduce duty on the import of new cars, and not to allow the import of second-hand cars either. Meanwhile their opponents, car importers and consumer advocacy groups, are demanding at the very least a reduction in the import duty on new cars and a limited-period permission to import used cars.
But even if they win, the victory is likely to be short-lived. The official political philosophy in Pakistan hinges on a stolid protectionism. The government has applied for yet another exemption from WTO trade rules which are due to be implemented from 2005.
Only a demonstrable shift in public opinion disfavoring restrictions on free trade is likely to bring lasting change to the protectionist climate. Meanwhile it is tragic that in a world of countless cars, where high quality vehicles are churned out of plants every day, political boundaries have divided the world market into a plethora of smaller closed markets where people are tantalized with the idea of owning a car, but are denied the right to have one.
Letter to FreePakistan
Aslam Effendi writes from Islamabad:
Thank you for sending me a copy of your book (the Urdu translation of Jonathan Gullible-Khalil). It has been very beautifully translated into excellent Urdu prose. I am also glad to note that you have established the Alternate Solutions Institute which is badly needed to enlighten the people about the ground realities relating to individual liberty, economic liberty, etc. I would suggest that you arrange a meeting of business-minded persons to decide how best the ASI can generate funds so that it becomes a profitable and productive organization. Besides, income from publications, the institute could earn from holding classes.
Please keep me in touch with your progress. With best wishes,
Yours for Individual Liberty (Aslam Effendi)
Letters from the Press
EDUCATION
[Mohammed Iqbal Abid, Karachi]
One can imagine the appalling state of education in Pakistan by a single example: Ibrahim Hyderi, situated on the outskirts of Karachi, has only one government-run primary school to cater for a population of 100,000. Need one comment any further on our priorities? [Dawn]
THIRD METER BLUES
[Khurshid Imadi, Islamabad]
This letter is neither an accusation nor a complaint but a genuine concern to all affected persons such as me. I have been visiting from one office to another of Wapda for over a year in order to be able to succeed in getting a third meter. I have built a house with three floors — basement, ground and first floors. I have succeeded in getting two meters and for the third meter my request is denied by Wapda on the pretext that as per the policy only those who have minimum of 10 marlas are eligible for third meter. My argument is: policies should be chalked out to help and facilitate public. If somebody has built three floors, he should be allowed to have three meters. Why is he being denied this facility?
May I request the authorities to consider providing three meters to all the houses owners who have constructed three floors? Waiving off the condition of plot size. I trust this request will definitely meet the approval of concerned authorities as I feel it is justifiable. Conditions may be put to consider only those who have three floors not on the basis of plots size. [The News]
FROM SUI GAS TO WAPDA
[Sardar Ali, Rawalpindi]
Apropos budget 2004/5. There is a big proposal, disclosed by the rulers with great fanfare before the announcement of the forthcoming budget. It is to provide ‘relief’ to the poor through reduction in electricity tariff. Simultaneously, there are also plans to increase the gas tariff in the same budget. Notwithstanding the real face of this ‘relief’ in electricity (meant only for industrial consumers to attract investment), the government is better advised to avoid complicating simple official procedures. A single bank transaction from Wapda to the Sui gas department will protect the nation from much agony, save millions of men hours and tons of stationery. [The News]
FLABBY CIVIL BUREAUCRACY
[Syed Afzaal Husain Zaidi, Islamabad]
The decision of the GHQ to reduce the size of the army by 50,000 suggests a similar operation in the civil bureaucracy. Here the ratio between the teeth and the tail is 1 to 22.
Some time ago the government had appointed a committee under the chairmanship of Mr. A. G. N. Kazi, an eminent administrator, to suggest measures to improve the mobility and efficiency of the civil administration. It was reported that the committee recommended reducing the basic pay-scales from 22 to 11.
This measure would make the ratio between the teeth and the tail 1 to 11. In the process, the civil bureaucracy would shed its unnecessary weight and cut red tape and dispense with an army of naib qasids and clerks. The report is gathering dust in the establishment division. [Dawn]
AGONY OF SUFAID POSH
[Muhammad Anwar, Peshawar]
Every now and then Mr. Shaukat Aziz, the learned finance minister, argues with pride that the foreign exchange reserve has risen above twelve billion dollars and the economy is absolutely in a stable condition. The economy may be stable for the rich and corrupt of this country but the situation is getting worse every passing day for sufaid posh (middle class). The everyday rise in electricity, gas and telephone bills, the unprecedented hike in the prices of diesel, petrol and other essential commodities has made the life of sufaid posh miserable to the extent that suicide ratio has gone up and is increasing at alarming proportion. Further rise in the reserves of foreign exchange up to 15 billion dollars, by the grace of God Almighty the sufaid posh will then be totally eliminated. There will be no sufaid posh left to suffer and sustain miseries of this burdened, humiliating and disgraceful life. The worthy finance minister must have won the battle of dollars against the sufaid posh, the sufaid posh too will be free from the cords of the heavens and the world and will be better placed in graves free of mental agonies. [The News]
TAKE OFF STAGE
[S. M. F. Hasan, Lahore]
After one year as the finance minister proudly declared that Pakistan’s economy had reached take-off stage. This he repeats annually. Recently, he again stated in Singapore that Pakistan’s economy had achieved take-off stage. The minister does not explain why Pakistan’s economy is glued to take-off stage and has not actually taken off for the last four years. The basic statistics, however, show that national economy has been declining due to the minister’s awry policies. No new industry has been set up during last four years, hundreds have closed. Wheat is being imported. Cotton and sugar are in disarray. Prices of food items have increased manifold. Savings are lowest in the region. Unemployment and poverty are rampant. Instead of income tax, customs and excise duty, 50 per cent revenue was extorted through GST during 2002-03.
Ye the minister claims growth at 6 per cent and inflation at 3.5 per cent, never before was a nation fed with fabricated figures of such magnitude. Whether the prime minister is innocent of economics or is bound to keep a banker as finance minister, a job alien to his experience and knowledge, is not clear. But let it be known that the major cause of people’s growing discontent against the government is not the guided unguided democracy, but its disastrous economic policies. A much better choice would be Dr. Hafeez Sheikh, privatization minister, with a brilliant record as finance minister, Sindh, and at his present post, a committed Pakistani with no interests abroad, a native who shares the limitations and aspirations of his people. [The News]
ADVISOR’S SOMERSAULT
[S M F Hasan, Lahore]
In a recent pre-budget seminar, an advisor in finance ministry proudly declared "Nawaz Sharif government had completely ruined national economy and it were the tireless efforts of the present finance minister that the country now was progressing rapidly in all economic sectors." In an interview in Daily Jang magazine of August 14, 1999, less than two months before the ouster of Nawaz Sharif, the same advisor, then serving under Nawaz Sharif had highly commended the Nawaz government for its measures to develop national economy and confidently revealed that "after atomic explosion in May 1998, foreign exchange reserves dwindled to 415 million in November 1998 in consequence of suspension of loans and aid by international lenders and other countries, and it was an economic miracle of Nawaz government that it steered the country to rapid development in spite of these handicaps."What a somersault. Gentlemen of such convenient conscience really deserve to be close advisors of a minister who has pushed the country into a vicious circle of decimation of industry and commerce, growing unemployment and poverty, rapid decline in people’s purchasing power, steady decrease in demand of goods leading to further closure of industrial and commercial enterprises, and yet unabashedly posing as ‘saviour’ of Pakistan’s economy. [The News]
FEATURES OF FISCAL POLICY
[Editorial The News]
Over the last five years, the overall complexion of Pakistan’s budget has undergone important changes that merit attention. On the income side, as well as on the expenditure side, the impact of reforms is distinctly visible. The most striking feature is that the entire current expenditure is being financed out of domestic resources. On the one hand, the government’s resource position has shown substantial improvement and, on the other, it has been able to control unproductive expenditure. This stands in sharp contrast to the decade of the nineties when part of the current expenditure was funded by borrowed funds that obviously led to a higher debt burden. This year’s budget in brief reveals that the government had estimated to spend about Rs.70 billion for running of the civil government and the estimated allocation for pensions was kept at around Rs.37 billion for the same period. Grants and subsidies have been there but the effort to reduce current expenditure is particularly noticeable.
Another point to note is that only such external assistance is being obtained which is required for essential projects and is available on soft terms. The total debt-servicing liability is said to have come down from 66 percent to 36 percent of the revenues creating considerable fiscal space to enhance development spending. The biggest burden on the country’s economy was debt, which the government has been trying to reduce on a sustained basis. It is, therefore, necessary that the finance minister’s budget speech should deal with this issue in some detail. The issue relating to the heavy burden of losses being incurred by state enterprises and picked up in the budget also needs to be fully settled. This can at least save Rs.50 billion on an annual basis and a determined effort should be made in the forthcoming budget to address the problem without further loss of time. This financial burden has been officially also acknowledged and needs to be eliminated.
On the income side, revenue has shown a big increase meeting the target set at the beginning of the year. Sales tax and income tax have emerged as the main sources of revenue. This year the estimated surcharges on petroleum and natural gas were estimated at Rs.61 billion. The lower incidence of customs tariff and excise duty is meant to enhance economic activity and accelerate the process of growth. A budget should be able to create enough resources to meet at least current expenditure and even a part of the development outlay. But that should mainly come through accelerated economic activity. It should focus on attracting investment and promoting growth. The fiscal policy should be used as an instrument to further boost economy and social welfare.
POWERS OF TAX OMBUDSMAN
[Syed Mumtaz Saeed, Karachi]
As a (salaried) taxpayer and as someone who greatly values any initiatives towards making the bureaucracy accountable to the citizens, I was happy to read Taxpayer's letter on the above subject (May 23).
I fully agree that the creation of the federal tax ombudsman (FTO) in 2000 was a step in the direction of making less-than-careful CBR (Central Board of Revenue) officers accountable to an independent body representing the interests of taxpayers.
In addition to disposing of 4,000 cases since its inception, the FTO has played a pivotal role in tax refund matters. I was, however, dismayed by what 'Taxpayer' has reported as curtailment of FTO's original powers and jurisdiction.
I agree that the imperative for the CBR is maximizing tax revenue, but that should not be at the expense of oversight over the ways and means adopted by it to achieve that objective.
My perception is that for some reason, the FTO chooses to remain in low profile; if it was created to provide a mechanism for taxpayers to seek redress and relief, that fact should be as widely known as possible.
Is it that the FTO lacks resources, or does it feel discouraged to come out fully into wide public knowledge due to outdated paradigms obtaining among those who apparently enjoy clout with the powers that be? [Dawn]
POWERS OF TAX OMBUDSMAN
[Chaman Lal Oad, Karachi]
This has reference to the letter "Powers of tax ombudsman" (May 23). The president had ruled in the case of Chenab Fibers Ltd, Faisalabad that the federal tax ombudsman (FTO) had no jurisdiction to investigate matters relating to assessment of income or wealth, determination of tax or duty liability, etc., when the legal remedy of appeal and review or revision was available under the relevant legislation. The writer of the letter has mentioned that the jurisdiction of the FTO was effectively curtailed.
The writer appears not to be conversant with the provisions of the FTO Ordinance 2000 which bars the jurisdiction of the FTO in such matters where the legal remedy of appeal is available.
The president has simply clarified the already existing statutory provisions and has not curtailed the jurisdiction of the FTO. Rather the president simply clarified the existing status of the FTO's jurisdiction.
The writer ought to have realized that the office of the FTO is a creature of the FTO Ordinance 2000 itself and the apparent excess of jurisdiction was rightly corrected by the president.
The writer should not be disappointed because apart from such matters where a legal remedy is available, there is much to be done by the FTO, whose jurisdiction extends to all the procedural deviations and not to the substantive provisions of law.
The proposal by the writer to confer jurisdiction upon the FTO to adjudicate questions of law where, in the opinion of the taxpayer, the order passed by an income tax functionary is void and without jurisdiction is not sound one.
It is based on the stated justification that small taxpayers have meager resources and can't fight against the injustice of the department in the superior courts.
The writer has further proposed that the taxpayer, as well as the department, may file an appeal against such order of the FTO only with the Supreme Court. An appeal before the Supreme Court is not only very costly, but the Supreme Court is an apex judicial forum while the FTO is an "administrative forum".
In fact, the remedy with the FTO being of an administrative nature, the appeal remedy has rightly been conferred upon the highest administrative authority, i.e., the president. [Dawn]
SOLAR & WIND GIMMICK?
[Nasrullah Khan Shinwari, Peshawar]
A large advertisement in some newspapers on May 12, 2004 has told the nation the benefits of solar and wind energy as if recently discovered by a new organization created under the name of Alternate Energy Development Board located in Prime Minister’s Secretariat. Credibility of this board can be ascertained only if the expertise and practical achievements of its chairman are made public. In fact, similar organizations were created in the past as well to accommodate some favorites but disappeared after seminars, foreign visits by the officials and wide publicity through various means thus wasting poor taxpayer’s money in terms of crores of rupees without achieving any tangible result.
Actually, the entire equipment for the subject energy will have to be imported and installed under supervision of foreign experts with publicity as if achievement of the board. As such, the government will be well advised to make import of the equipment duty-free for some years and let the private sector make it a success. [The News]
FreePakistan News-Briefs
A TREAT FOR THE READERS:
PERKS OF TOP 100 OFFICERS COST HALF A BILLION
Pakistan's civil bureaucracy may be the top heaviest among Third World countries with its 100 front-line civil servants costing the government nearly half a billion rupees annually. This would also make it the most expensive civil cadre. On average, a grade-22 officer, the highest civil servant, costs the government about Rs.400, 000 per month. Collectively, this elitist band of about 100 grade-22 officers, including 36 federal secretaries, provincial chief secretaries and heads of police, and senior members of the provincial boards of revenue cost over Rs480 million annually. Many officers and their families may in cases cost the taxpayers as much as Rs.1 million per month. The Civil Service Reform Unit (CSRU) at the cabinet bloc, which has been given the task of making suggestions in this regard, feels that if these officers are given just 30 per cent in a lump sum of what they cost the exchequer, they would live even more comfortably.
This is how it is done all over the developed world. For instance, says a CSRU expert, the only two people who get official residences in the US are the president and the vice-president. On average, a grade-22 officer in Pakistan gets a salary of Rs.40, 000 (between Rs.36, 000 and Rs.43, 000). The average cost of housing provided to the top 100 officers, taking into account the market value of rent and maintenance cost has been worked out at Rs.125, 000. The value of government housing varies immensely, depending on the city and locality. For instance, a government house in F/6-3 sector of Islamabad, spread over 3.5 kanals with servant quarters sized over 10 marlas, values at Rs50 million. These dream houses, facing the picturesque Margallas and located in what is called 'Baaoo Mohalla' by local cabbies, can be rented at anywhere between Rs.170, 000 to Rs.285, 000 a month. Government houses in G-6, valuing at Rs30 million each, can be rented, on average, at Rs.85, 500 and the ones in I-8 and G-10 sectors at approximately Rs.57, 000 each. According to CDA sources, the cost of housing maintenance in Islamabad alone comes to around Rs360 million annually.
A grade-22 officer is entitled to a telephone connection with unlimited billing at his office as well as at his residence. This is in addition to the prestigious green connection and a mobile phone with, again, unlimited billing. The minimum average cost of these telephone facilities, excluding official usage, has been worked out at Rs.50, 000. In many cases, the residence phone bill alone can be Rs.50, 000. It can go higher in families that have children living abroad.
A grade-22 officer is generally entitled to two vehicles along with drivers, free fuel and maintenance. But the general practice is to use as many vehicles as required from the fleet of vehicles available at the disposal of the officer's ministry or department. The family uses them for shopping and for children to go to school. The older children are often seen showing off dad's sleek official cars at popular city hang-outs. The average expenditure of these vehicles is at least Rs.30, 000.
Technically, federal secretaries are not entitled to be paid for utilities like electricity and gas. But the heads of autonomous bodies and corporations are. So there lies the loophole.
Almost all federal secretaries are ex-officio chairmen of one or more autonomous bodies or corporations. For example, the ministry of petroleum has the OGDC (Oil and Gas Development Corporation), the ministry of industries has PICIC and the ministry of commerce the State Life Corporation under its wings.
The ministry of Information has PTV, Radio Pakistan and Shalimar Recording. The average of utility bills could be Rs40, 000 a month. A grade-22 officer is entitled to two servants.
Only the hapless OSDs restrict themselves to this number. Some grade 22 officers are said to commandeer as many as 30 servants. A grade-22 officer and his family are entitled to first class medical treatment.
The list of hospitals on the panel reserved for them are the country's most expensive. On average the monthly cost of medical facility could be around Rs. 30,000.
A grade-22 officer, during official travel, is entitled to a daily allowance of Rs.530 and (multiplied into three) Rs.1, 590 as hotel accommodation. So how do they justify staying in five-star hotels? Simple. Their personal secretary makes a call to the protocol officer in the respective city and things get arranged. Nobody, including the audit people and the NAB authorities, has ever bothered to question this.
In the case of more lucrative ministries, like commerce, which has State Life in its domain, the latter maintains classy rest houses not just in all major cities but also in Dubai, London and New York. There is no way that the cost of staying at these rest houses can be worked out.
The living of grade-22 officers in provinces is even more luxurious. A provincial chief secretary has his house on 25 kanals that inhabits a whole colony of servants, including a Dhobighaat.
Some still live like in the good old days of the Raj with their houses stretching into acres. They throw parties that become talk of the town; their children get married in ways that makes even the richest green with envy.
Interestingly, this is the story of the legal side of their careers. Most of what has been mentioned is perfectly legal and there is hardly anything they can be nabbed for. Of course, there are anomalies in the system.
For instance, it makes no sense that the grade-22 officers should have Rs.15, 000 as house rent whereas they are allowed to use unlimited amounts on their residential telephone. And then, after giving them such luxuries, you cannot expect them to live in a hotel in Rs.1, 590.
In the meantime, the cost of general administration continues to balloon to Rs.62.9 billion, which is 9.8 per cent of the country's total expenditure. The GORs (Government Officers’ Residence) are becoming lavisher, their officer messes more opulent and their golf grounds turning greener by the day-all of this at the cost of taxpayers who are sometimes barred even from passing through these GORs, like it happened in Lahore recently. [Courtesy Dawn]
IMMUNITIES TO CIVIL SERVANTS BEING REMOVED
All kinds of extraordinary immunities presently available to powerful civil servants on their acts of “omission and commission” and torts are finally being withdrawn before June, 2004 on the pressure of Asian Development Bank under Rs.20 billion ($ 350 million) Access to Justice Program. A draft law to the effect has already been sent to the federal cabinet for approval and subsequent tabling in the parliament to be enacted as new law.
HUDOOD LAWS TO BE REVIEWED
President General Pervez Musharraf has called for a review of “controversial” Islamic laws that human rights groups say are discriminatory against women and minorities. The President also announced the establishment of an independent commission to facilitate the implementation of human rights standards in the country.
LHC REBUKES GOVERNMENT OFFICIALS
Lahore High Court has observed that the poor citizens were being penalized by the inaction of public functionaries which was resulting in the increase of workload of the court. The court further observed that people had to file petitions even for the copies of public functionaries’ orders which were not in consonance with the mandate of the constitution and not healthy sign to keep the society progressive.
PREMIUM ON NEW CARS’ SALE GOES UNCHECKED
The charging of underhand premium on the sale of new cars has become a lucrative business for the ‘hidden’ investors resulting in sheer unrest among the intended buyers who are illegally being compelled to pay extra money (10 to 15% on the declared car price) for prompt delivery.
CAR PREMIUM TO GO UP
Premium paid on the purchase of new cars may go up further in coming days if the country’s economic managers continue with the existing policy of not allowing the import of refurbished and second-hand cars.
BODY ON IMPORT OF REFURBISHED CARS SUBMITS REPORTS
The ministerial committee constituted by the federal cabinet for drafting the import strategy of reconditioned cars and suggesting tariff protections for the domestic auto assembling industry has submitted its report to the Prime Minister.
FOREIGN FIRMS TO PLUG TAX EVASION
The government is considering allocations in the budget for engaging private foreign sources to acquire information on international price of imports as large scale cheating for duty and tax evasion has been reported.
LCCI CONCERNED OVER LAW & ORDER SITUATION
The Lahore Chamber of Commerce and Industry has expressed concern over the worsening law and order situation in the Lahore city saying that mounting incidents of lawlessness were bound to repel local as well as foreign investment.
EXPORTERS CONCERNED OVER LAW AND ORDER
Textile exporters have threatened to close down the industry if the dacoities are not controlled and the security of the businessmen is not assured.
CRIME RATE SHOOTING UP
The crime rate in the Lahore city shot up by 18.81 % during the first two months of 2004 against the corresponding period of 2003.
PUNJAB ASSEMBLY ADMITS CRIME RATE UP
The Punjab treasury and opposition benches were of the unanimous view that that the crime situation in the province was on the rise because of the partial implementation of Police Order 2002.
676 POLICEMEN DISMISSED FOR CORRUPTION
As many as 676 police officials including 43 inspectors were terminated from service while 115 other officials were compulsorily retired for corruption and poor performance during the first four months of the current year.
SUPREME COURT DISMISSES IPPs PLEAS
The Supreme Court of Pakistan has turned down seven pleas by four Independent Power Producers challenging the imposition of tax by the government of Pakistan. The IPPs had filed petitions against the imposition of income tax as “the government had exempted them from any such imposition.”
OVER $ 5 BILLION LOANS IN 3YEARS
According to the figures issued by the federal finance ministry, Pakistan borrowed over $ 5 billion as loans during the last three years (2000-03) from the World Bank, Asian Development Bank, IMF and other lending sources. During the same period, Pakistan received $ 1.3 billion as grant from other countries and lending agencies.
HUGE RENEWAL FEE JOLTS MOBILE FIRMS
A huge bid of US $ 291 million for getting license by each of the two new cell phone companies has shocked the existing four players who have to pay the same for license renewal, but they fear it would affect future investment plans also.
PEOPLE LOSE TRUST IN JUDICIARY
Chief Justice of Pakistan, Nazim Hussain Siddiqui, has regretted that due to delay in justice people have lost their confidence in judiciary. “Unfortunate poor people sue to resolve dispute but can’t see justice in their life. In most cases, sons and grandsons do suffer due to delayed justice,” he added.
WB OFFERS $ 1 BILLION FOR POVERTY REDUCTION
The World Bank will extend over one billion dollar through Poverty Reduction and Support Credit over the next three years beginning with the first $ 350 million tranche due for approval on July 1, 2004.
GAS PRICES LIKELY TO BE RAISED
The government is likely to announce an increase in gas prices in July once the Oil and Gas Regulatory Authority gives its approval.
NBP WRITES OFF BILLIONS OF RUPEES LOANS
The State Bank of Pakistan has revealed in its review of the Audit Report of NBP that billions of rupees outstanding loans against 346 industrialists, politicians, businessmen, etc. were written off in violation of rules and regulations by the National Bank of Pakistan, a state-owned bank. Besides written off loans worth Rs.5.677 billion, prescribed procedure was also violated in provision of financial relief in 344 cases. The report said the NBP administration also violated guidelines issued by the State Bank of Pakistan under BPD-29 clearing the defaulters in various cases, instead of receiving outstanding dues against them which resulted in billions of rupees loss to the national exchequer.
PUNJAB SET TO DE-REGULATE TEXTBOOKS PRINTING
The Punjab government is set to de-regulate the printing of textbooks by fiscal year 2005-06 as part of the Education Sector Reforms program under a three-year understanding with the World Bank.
DE-REGULATION OF TEXTBOOKS PRINTING SLATED
Punjab Publishers and Book-sellers Association and All Pakistan Teachers Federation, in a joint press statement, have condemned the proposed de-regulation of the printing of textbooks. They said that the decision was aimed at secularizing the contents in curriculum of various subjects and would introduce vested interests in the printing of textbooks against the ideology of the dear homeland. They warned the government to refrain from allegedly implementing the agenda of western powers.
KCCI URGES GOV TO REDUCE TAXES
The Karachi Chamber of Commerce and Industry has urged upon the government to reduce the rates of income tax as well as corporate tax in the forthcoming budget.
FINANCE MINISTER INDICATES AGGRESSIVE TAXATION
The Federal Finance Minister has indicated at giving relief to the general masses while at the same time going for aggressive taxation.
AN AD: SAVE THE SUNFLOWER FARMER FROM DISASTER
Appeal: General Pervez Musharraf, President of Pakistan; Mir Zafarullah Jamali, Prime Minister of Pakistan; Minister for Finance; Minister for Agriculture; Minister for Industries; Chairman CBR. Sir, Pakistan spends almost US $ 1000 million on import of oil and oilseeds, being the highest import bill for food items, and second highest import item after petroleum oil. Due to continuous efforts made by the government and the all Pakistan solvent extractors associations (APSEA), by the grace of God Pakistan achieved record sunflower planting of about 600, 000 acres in the years 2003-2004. To the utter dismay of the domestic oil seed farmer, at the time of peak harvest of the local crop, international oil prices have collapsed from US $ 590 to US $ 460 (per metric ton) and are still falling. As a result, the prices of local sunflower seed have fallen from Rs.840/Maund to Rs.650/Maund and oil in local market has fallen from Rs.1925/Maund to Rs.1700/Maund. Sir, in order to keep moving towards self-sufficiency in edible oils we have to support the farmer of this vital item. We, therefore, propose an immediate temporary suspension of import of both oilseeds and edible oils for a period of 3 months. We assure you that the local sunflower crop and domestic oil stocks are sufficient to ensure adequate supply of edible oils and ghee in the market at present rates. Sir, unless this measure is adopted immediately, it would have disastrous economic consequences for our oilseed farmers and setback to all the progress made over the last several years in promoting the local cultivation of oilseed. All Pakistan Solvent Extractors Association.
BAN ON INTER-DISTRICT MOVEMENT OF FLOUR
Besides ban on wheat, Punjab has imposed inter-district restriction on the movement of flour also.
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Edited and prepared by
Khalil Ahmad
[No opinion expressed here should necessarily be taken as reflecting the view of FreePakistan Newsletter.]
