That government is best which governs the least, because its people discipline themselves.
-Thomas Jefferson
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CONTENTS:
0 Words of Wisdom from an Ex-Pakistani Cabby
By Tibor R. Machan
0 The Absurdity of Egalitarianism
By John Kekes
0 Letters from the Press
0 FreePakistan News Briefs
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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!
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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
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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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SCHOOL CHOICE IN OTHER COUNTRIES 5/27/04 CATO INSTITUTE CONFERENCE
Register Now!
The Cato Institute invites you to a Conference on school choice policies and practices around the world.
Looking Worldwide: What Americans Can Learn from School Choice in Other Countries
Thursday, May 27, 2004 8:15 a.m.-3:45 p.m. Cato Institute, 1000 Massachusetts Avenue, N.W., Washington, D.C. 20001
Speakers include
Charles Glenn, Professor of Education, Administration, Training, and Policy Studies, Boston University
James Tooley, Professor of Education Policy, University of Newcastle, England
Andrew Coulson, Senior Fellow in Education, Mackinac Center for Public Policy
Parents in many other countries enjoy more freedom of choice in education than Americans do. In Australia, France, Germany, Belgium, Sweden, and the Netherlands, parents can choose private, even religious, schools without incurring any financial penalty. School choice policies in those countries offer some surprising lessons for America. Although there is more choice, increased regulation in some countries has decreased the independence and autonomy of private schools.
This conference will examine school choice policies around the world and seek to draw out critical lessons for the school choice movement in America. A select group of international scholars will examine to what degree school choice policies have increased government control or encouraged competitive, free, and thriving education markets.
For more information and online registration, visit http://www.cato.org/events/schoolchoice/index.html
News media inquiries, please call (202) 789-5200.
The Cato Institute is a nonprofit, tax-exempt educational foundation under Section 501(c) 3 of the Internal Revenue Code.
Cato Institute 1000 Massachusetts Avenue NW Washington, DC 20001 USA www.cato.org
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WORDS OF WISDOM FROM AN EX-PAKISTANI CABBY
By Tibor R. Machan
[Tibor Machan is a professor of business ethics and Western Civilization at Chapman University in Orange, California, USA, and author of "Putting Humans First" (Rowman & Littlefield). He advises Freedom Communications, parent company of Freedom News Service. We are grateful to him for allowing us to reproduce this article here.]
After recently landing at Chicago’s O’Hare Airport, I took a cab to my hotel in the Chicago Loop. I was in town to attend the American Philosophical Association Central Division meetings, where I had the honor of having one of my books critiqued in a session of the American Society of Value Inquiry.
OK, to the point: My cabby into the city hailed originally from Pakistan, and he and I got into a conversation about current affairs. We both came from abroad, we both have lived here for a couple or more decades, and we both follow current events closely enough to have formed views.
My cabby was understandably miffed about having to endure a lot of personal and official profiling these days, given that he looks Arabic and many therefore carelessly group him with those who look like him and have committed terrorist acts. He noted, "My wife, kids and I are now under constant suspicion, when we travel, even when we walk around in a mall."
He added, "My kids are as American as George W. Bush’s kids, yet they are now picked on constantly."
After some more lamentation along these lines I asked him whether he regrets having come here in the first place.
"No way. It is still much better than in Pakistan. There is far more religious tolerance in America, a much better chance to speak one’s mind. And, of course, the economic opportunities are still much greater," he said.
Of course, anecdotal evidence like this doesn’t get you very far these days when experts must conduct studies before anything can be treated as true. Common sense, ordinary personal reports count for very little. But, actually, they should not.
My own experience pretty much confirms what my ex-Pakistani friend told me. Whenever I travel abroad I speak to train riders, students, workers and waiters — very rarely to diplomats and intellectuals or the clergy. It is usually these latter whose views are talked about so much in the papers, while those others do not get a chance to chime in with their opinions.
The workers, waiters, and train riders, however, know things better. They are closer to the action in most countries than are writers and diplomats. And these folks still think that America offers a better chance for them to flourish in their lives than where they live. This is so not just with Bulgarians or Poles or Slovakians, all of whom are emerging from a half-century of dictatorship and economic disaster. It is even so with the ordinary folks from Spain, Italy, France and Germany. Such folks, if my sample isn’t terribly askew, testify to the fact that the American idea — not always the practice, of course — that individuals count for most (not classes, races, ethnic or religious groups, and nationalities) resonates with millions abroad.
Is it any wonder that people are still lining up everywhere to immigrate to the United States? Sure, this country has never quite lived up to its reputation to be free, to respect and protect everyone’s rights. But it still has the reputation of doing that more so than other countries. The momentum hasn’t died completely, even if America’s politicians and intellectuals care little about the ideals for which the country is famous.
It is too bad that this point is rarely mentioned by political candidates these days. Perhaps the reason is that their agendas are so far from living up to their oath — to secure our rights — that they want to hide the fact from us. But to the rest of the world, to those who aren’t among the privileged in various parts of the globe, America is still sought out for being free.
Maybe that’s because most of those folks, like I did when I was a kid back in Budapest, get their impression of the country from its fiction — dime novels, old-fashioned Hollywood movies and television shows — not from what the eggheads are saying about it. And maybe those images are truer to the essence of America than what scholars and pundits say about the place these days.
THE ABSURDITY OF EGALITARIANISM
By John Kekes
[John Kekes is the author of many books, the most recent of which is The Illusions of Egalitarianism, published by Cornell University Press in 2003. This article first appeared in Tech Central Station http://www.techcentralstation.com/index.html and is reproduced here with due permission.]
Egalitarians believe that inequality is unjust and justice requires a society to move steadily toward greater equality. This is the aim and the justification of proportional taxation, affirmative action, equal opportunity programs, and of the whole panoply of anti-poverty policies that bring us ever closer to the socialist dream of a welfare state. These policies cost money. The egalitarian approach to getting it is to tax those who have more in order to benefit those who have less. The absurdity of this is that egalitarians suppose that justice requires ignoring whether people deserve what they have and whether they are responsible for what they lack. They suppose it just to ignore the requirements of justice.
Here is a consequence of egalitarianism. According to the Statistical Abstract of the United States, men's life expectancy is on the average about 7 years less than women's. There is thus an inequality between men and women. If egalitarians mean it when they say that "it would be a better state of affairs if everyone enjoyed the same level of social and economic benefits," or that "how could it not be an evil that some people's prospects at birth are radically inferior to others," then they must find the inequality between the life expectancy of men and women unjust. As they say, "those who have been favored by nature … may gain from their good fortune only in terms that improve the situation of those who have lost out."
Egalitarians, thus must see it as a requirement of justice to equalize the life expectancy of men and women. This can be done, for instance, by men having more and better health care than women; by employing fewer men and more women in stressful or hazardous jobs; and by men having shorter work days and longer vacations than women. Such policies will not diminish productivity if loss in man-hours is compensated for by gain in woman-hours.
Yet a further policy follows from the realization that since men have shorter lives than women, they are less likely to benefit after retirement from Social Security and Medicare. As things are, in their present inegalitarian state, men and women are required to contribute an equal percentage of their earnings to Social Security and Medicare. This is clearly unjust from the egalitarian point of view: Why should men be required to subsidize the health and wealth of women? The policy this suggests is to decrease the levy on men, or increase it on women, or possibly do both at once. There is thus much that egalitarian policies could do to reduce the unjust inequality in the life expectancy of men and women.
However much that is, it will affect only future generations. There remains the question of how to compensate the present generation of men for the injustice of having shorter lives than women. No compensation can undo the damage, but it may make it easier to bear. The obvious policy is to set up preferential treatment programs designed to provide for men at least some of the benefits they would have enjoyed had their life expectancy been equal to women's. There is a lot of pleasure that could be had in those 7 years that men are not going to have. And since those years would have come at the end of their lives, when they are more likely to know their minds, their loss affects not only the quantity but also the quality of their not-to-be-had pleasures. One efficient way of compensating them for their loss is to set up government sponsored pleasure centers in which men may spend the hours and days gained from having shorter working days and longer vacations.
CAN THESE ABSURDITIES BE AVOIDED?
These absurd policies follow from egalitarianism, and their absurdity casts doubt on the beliefs from which they follow. This ought to lead to the suspicion that the policies more usually associated with egalitarianism, namely anti-poverty programs, various welfare legislations, proportional taxation, the preferential treatment of minorities and women, and so forth, suffer from analogous absurdity. One may actually come to suspect that the familiar egalitarian policies do not appear absurd only because they are made familiar by endlessly repeated mind-numbing rhetoric that disguise the lack of reasons for them.
Can egalitarians avoid these absurdities? They might claim that there is a significant difference between the unequal life expectancy of men and women, and the inequality of rich and poor, whites and blacks, or men and women in respects other than life expectancy. The difference, egalitarians might say, is that the poor, blacks, and women are unequal as a result of injustice, such as exploitation, discrimination, prejudice, and so forth, while this is not true of the life expectancy of men.
A moment of thought shows, however, that this claim is untenable. The group of men includes blacks and the poor who, according to egalitarians, have suffered from injustice in the past. And blacks and women include high achievers, middle and upper class people, people with considerable wealth, as well as recent immigrants who came to this country voluntarily and who could not have suffered from past injustice here. It is but the crudest prejudice to think of men as Archie Bunkers, of women as great talents sentenced to housewifery and of blacks as ghetto dwellers doomed by injustice to a life of poverty, crime, and addiction. Many men have been victims of injustice, and many women and blacks have not suffered from it.
It will be said against this that there still is a difference because the poor, blacks, and women are more likely to have been victims of injustice than men. Suppose this is true. What justice requires then, according to egalitarians, is to redistribute resources to them and to compensate them for their loss. But these policies will be just only if they benefit victims of injustice, and the victims cannot be identified simply as poor, blacks, or women because they, as individuals, may not have suffered any injustice. Moreover, those members of these groups who do lack resources may do so, not because of injustice, but because of bad luck, personal defects, or having taken risks and lost. Overcoming injustice requires, therefore, a much more precise identification of the victims than merely membership in such amorphous groups as those of women, blacks or the poor. This more precise identification requires asking and answering the question of why specific individuals are in a position of inequality.
Answering it, however, must include consideration of the possibility that people may cause or contribute to their own misfortune and that it is their lack of merit, effort, or responsibility, not injustice that explains their position. Egalitarians, however, ignore this possibility. According to them, the mere fact of inequality is sufficient to warrant redistribution and compensation. They say, for instance, that "a distribution of wealth that dooms some citizens to a less fulfilling life than others, no matter what choices they make, is unacceptable, and the neglect of equality in contemporary politics is therefore shameful." Regardless whether egalitarians are right about this, they face a dilemma. If the policies of redistribution and compensation do take into account the degree to which people are responsible for being in a position of inequality, then the justification of these policies must go beyond what egalitarians can provide. For the justification must involve consideration of the choices people make, as well as their merit, effort, responsibility. To the extent to which this is done, the justification ceases to be egalitarian.
If, on the other hand, the policies of redistribution and compensation do not take into account the responsibility people have for their inequality, then there is no difference between the inequality of men and women in respect to life expectancy, and the poor, blacks, and women who are unequal in other respects. Consistent egalitarian policies would then have to aim to overcome all inequalities, and that is just what produces the absurd policies noted above.
Egalitarians may try to avoid absurdity in another way. They may say, "how could it not be an evil that some people's prospects at birth are radically inferior to others?" The expectation is that the question will be regarded as rhetorical, since the answer to it will be obvious, at least to right-minded people. This expectation, however, is mistaken. That some people's prospects at birth are radically inferior to others is a statistical necessity. Being a necessity, it holds in all societies, even in a socialist heaven. Given any population and any basis of ranking the prospects of individuals in the population, some will rank higher and others lower. Those who rank lowest will have prospects radically inferior to those who rank highest. Complaining about this unavoidable fact of life is as reasonable as lamenting differences in height or weight. To call this statistical necessity evil is a sentimental cheapening of the most serious condemnation language affords. And the refusal to call it evil shows respect for facts rather than insensitivity.
A NAGGING DOUBT
Suppose that egalitarianism is seen for what it is: an absurd attempt to deny in the name of justice that people should be held responsible for their actions and treated as they deserve based on their merits or demerits. A nagging doubt remains. It is undeniable that there are in our society innocent victims of misfortune and injustice. Their inequality is not their fault, they are not responsible for it, and they do not deserve to be in a position of inequality. The emotional appeal of egalitarianism is that it recognizes the plight of these people and proposes ways of helping them. Counting on the compassion of decent people, egalitarians then charge their society with injustice for ignoring the suffering of innocent victims.
There are several things that need to be said in response to this frequently heard charge. First, anyone committed to justice will want people to have what they deserve and not to have what they do not deserve. Innocent victims do not deserve to suffer, yet they do. A decent society should do what it can to alleviate their suffering. But this has nothing to do with equality or egalitarianism. What is objectionable is not that some people have less than others. It is not unjust that millionaires have less than billionaires. What is objectionable is that some people, through no fault of their own, lack the basic necessities of nutrition, health care, education, housing, and so forth. They are our fellow citizens, and because of that we feel compassion for their plight.
Second, the plight of innocent victims who lack the basic necessities is not ignored. On the contrary, they are being helped by their fellow citizens who are taxpayers. Take a family of four with an annual income of $70,000. They are likely to pay about $25,000 in federal, state, property, and school taxes. Approximately 60 percent of the federal and state budget is spent on social programs. Thus roughly 60 percent of the family's annual taxes, that is, $15,000, is spent on social programs. The family, therefore, contributes over 20 percent of their income, more than one dollar out every five, to helping others, including the innocent victims. This is more than enough to acquit them of the charge of shamefully ignoring the plight of their fellow citizens that egalitarians baselessly level against them.
Third, the relentless egalitarian propaganda eagerly parroted by the media would have us believe that our society is guilty of dooming people to a life of poverty. What this ignores is the unprecedented success of our society in having less than 13 percent of the population live below a very generously defined poverty level and 87 percent above it. The typical ratio in past societies is closer to the reverse. It is a cause for celebration, not condemnation that for the first time in history a very large segment of the population has escaped poverty. If egalitarians had a historical perspective, they would be in favor of the political and economic system that has made this possible, rather than advocating absurd policies that undermine it.
Letters from the Press
PROBLEMS OF THE LOWER JUDICIARY
[Abdul Rehman, Lahore]
It is regrettable that the government seems oblivious to all legitimate concerns of the lower judiciary as regards their poor service conditions. For instance, up to the rank of additional sessions judge, judges of the lower courts have to perform their duties in small, packed and suffocated courtrooms, with no provision of official transportation and little chances of getting official accommodation, in addition to very low pay scales.
It is a common perception among the members of legal fraternity that judges of the lower courts are dissatisfied and are not committed to their jobs. This is why people have lost faith in the judiciary. As people want their cases to be decided speedily with proper application of mind, the judges in order to decide cases expeditiously need better service conditions and realistic pay scales.
No incentives are offered to the lower judiciary for ensuring speedy disposal of cases. So long as the government keeps the lower judiciary underpaid, overworked and less privileged, litigants will continue to suffer from the practice of unnecessary adjournments. To end their suffering it is incumbent upon the government to provide them with basic facilities like proper courtrooms, transportation, accommodation and security.
This is the only way to hold them responsible for delay in deciding cases; otherwise judges can rightly blame the system for not providing them with enough support which is necessarily required to effectively curtail the number of pending cases. It is time the government addressed this key issue as the Asian Development Bank has provided substantial assistance to it under an Access to Justice Programme, which is aimed at improving the judicial systems in all developing countries of Asia. [Dawn]
NEED FOR POLICY INSTITUTIONS
[Ayesha Ather, Missoula, MT., USA]
It seems Pakistan is always embroiled in some international issue, the latest being nuclear proliferation. As a nation it should be of grave concern to us that we are usually at the receiving end. It seems like this problem has always been there, and I believe it will continue to be there as long we follow "one-person" policies.
From the times of Liaquat Ali Khan to General Ayub, Z. A. Bhutto, General Ziaul Haq, Benazir Bhutto, Nawaz Sharif and now General Pervez Musharraf, we have been continuing to be led by personal motives of totalitarians. For the betterment of Pakistan we need to change that and do it fast.
We cannot leave it on democracy alone because parliament has never been fully independent and is unlikely to be so in the near future.
Something that Pakistan desperately needs is independent think-tanks and public policy institutes along the lines of the Brooking institute, CATO and RAND. We need the best and brightest among us to independently and objectively address the most important issues, define current and long-term issues and give policy alternatives of best handling them. One-person shows have continued to lead us through slippery slopes of destruction, and we should not let this happen again.
We should seriously ponder this issue. If we want to survive as a nation, we need long-term strategic policy institutes just as much as we need schools and health facilities. [Dawn]
RELIGION AND STATE
[Sania Saeed, Sydney, Australia]
Religion, morality and state laws have been intertwined in Pakistan and can no longer be distinguished. These three concepts should be kept separate and apart for two reasons:
First, morality is an individual's interpretation of what is right and wrong. Religion is a belief system reliant on faith and self-discipline. Governments need to ensure the safety of their citizens regardless of colour, creed, race, religion, and gender through the state legislation and the law-enforcement agencies. Since morality and religion should be left up to choice rather than be enforced, Pakistan should separate state from religion.
Secondly, using common sense and interpreting God's messages are a requirement of Islam. Significant power should not be given to individuals who sit in judgment on other people in accordance with their own interpretations and their own 'common sense'.
Such significant power can be abused and corrupted as has been witnessed Pakistan's human rights abuse, especially as regards women and minority groups.
Therefore, let individuals worry about their faith and morality and let the state worry about the protection of its citizens. [Dawn]
DEMOCRATIC DISCOURSE
[A. A. Hanafi, Islamabad]
Shall we ever hear voices of reason, moderation, and sanity from extremist elements in the political opposition in this country? We have scarcely had a genuine democratic culture in Pakistan; our society has long suffered from lack of tolerance, moderation and accommodation. A democratic attitude essentially consists in accommodating another person’s point of view, or at least respecting his right to dissent. As Voltaire said, "I disapprove of what you say, but I will defend to the death your right to say it." It is only an authoritarian or totalitarian state or regime that is intolerant of dissent. In a democracy, honest differences of opinion and genuine dissent are essential features of the political discourse and debate. [The News]
OMBUDSMEN
[Hiranad Mohandas, Mirpurkhas]
The Sindh Local Government Ordinance provides for appointment of an ombudsman in every district of the province to entertain public complaints relating to mismanagement, misconduct and inefficiency at district level as regards public grievances which are not entertainable by the Sindh ombudsman.
The relevant provision proposes a committee /commission, consisting of the chief justice of the Sindh High Court, the provincial ombudsman, etc., for appointing district ombudsmen. However, it is very shocking and surprising that the provincial government has not yet taken any measures for the appointment of district ombudsmen.
The governor of Sindh and the president of Pakistan should take serious notice of this lapse and inefficiency on the part of the relevant authorities and do the needful. [Dawn]
CONFUSION IN POST OFFICES
[A Citizen, Karachi]
In Karachi's post offices there is great confusion about the correct procedure of getting a job done and the charges for different mail services. Each post office, it appears, has laws of its own, and the bigger the post office, the greater the confusion.
Some post offices still insist on inland parcels being wrapped and stitched in a cloth-sheet and sealed at the stitched seams. From all over the country inland parcels are being received wrapped securely in paper and fastened by tapes. This is also observed in parcels received from overseas, all of which are packed in cardboard cartons or strong paper-sheets.
Even on letters and postal articles for abroad, different post offices charge different rates. This proves that postal staff are not duly trained. Each public service department, it appears, is commissioned to create hurdles for rather than facilitate the people. Will the authorities concerned take some corrective measures?
[Dawn]
ECONOMIC REVIEW
[Editorial The News]
While the economy is expected to grow at around six percent, the rate of inflation will be contained to no more than five percent this year. Should inflationary pressure continue, the monetary policy will be further tightened? The IMF mission, which was on a visit in connection with the review under Poverty Reduction and Growth Facility (PRGF), has concluded its discussions on the economic reforms programme under this facility. The IMF has supported the planned revamping of the savings institution to a market-based organisation and eventual transformation of National Savings Schemes (NSS) to a mutual fund. It has also asked the authorities to reduce subsidies to the state-owned enterprises. It has urged to implement as early as possible reforms in the power sector and supported plans to privatise energy, industrial, financial and transport sectors. Supporting the continuity of structural reforms, it has emphasised the need to monitor social welfare indicators.
These observations give some indication about some of the key economic issues currently being addressed. Though inflation is said to be under control, there is clear need to keep it under focus with state-of-the-art monetary policy adjustments as and when required. The growth rate at 5.8 percent this year is encouraging and the trend should be sustained. Growth per se is not enough. It ought to be pro-poor and sustainable. After maintaining an annual average of six percent until the eighties, the rate of economic growth had declined in the nineties. It had started improving in recent years. The sustainability of economic growth is essential to create jobs and reduce poverty. Acknowledged as big challenges by economic planners and policy makers, the articulation of a still more effective response to these challenges should remain high on the government’s reform agenda. The improvement in debt situation should help create some additional financial space during the next financial year that could be made available for enlarging public sector development spending.
As for the subsidies to state enterprises, they ought to be reduced and eventually eliminated, as they have been a big burden on the expenditure side. Public sector enterprises are often estimated to have been causing an annual loss of around Rs 100 billion that should not be allowed to persist. The need for early implementation of reforms in the power sector is also obvious. So is the case with privatisation of different public entities. The idea is to control avoidable expenditure and introduce greater transparency with regard to the remaining government interventions based on social considerations. It seems that the forthcoming economic and fiscal policies will be concentrating on investment and growth, containment of inflation, accelerating the reform process and enlarging the outlay of the annual development programme. However, the implementation of the policy agenda should also ensure that the benefits of economic reforms and progress reach the consumers.
FLAWED BANKING POLICY
[S. M. F. Hassan, Lahore]
Recently a bank has announced its annual accounts showing 16 per cent increase in deposits, zero per cent increase in advances and yet 86 per cent increase in profit. The profit of a bank invariably comes from interest on advances. Zero per cent increase in advances reveals, firstly, that in spite of so-called several incentives, there has been zero activity in industrial and commercial sectors and, secondly, that 86 per cent profit has accrued directly from drastic reductions in profits on deposits to a negative level, discouraging the people to save for future security. National Savings that used to collect about 40 billion annually till a few years ago could collect only 2 billion during 5 months of July-November 03. People’s savings, if any, are now being wasted on unproductive investments in real estate or gambling in Stock Exchange. These are the bitter fruits of the banking policies introduced by the two banking experts imported from America as guided by international lenders. [The News]
REALISTIC ASSESSMENT
[Editorial The News]
Pakistan’s macro-economic indicators are registering improvement and are stabilising. Its exports are growing, foreign exchange reserves are reducing the economy’s vulnerability to endogenous and exogenous shocks, large-scale manufacturing sector is becoming vibrant, public debt as percentage of GDP is declining, and inflation rate is under control. Most importantly, per capita income is nearing $600, which will move Pakistan’s into the bracket of middle-income countries. This was more or less the crux of Finance Minister Shaukat Aziz’s address at a workshop on Poverty and Social Impact Analysis held in Islamabad.
However, his precise analysis of macroeconomic conditions was not matched with facts and figures at micro-economic level where the situation is rather too bleak. Rising poverty, a high unemployment rate, inequitable distribution of wealth, a collapsing system for the delivery of public goods and general public discontentment are all manifestations of the state’s inability to distribute the dividends of macro-economic stability among people. A lot of expectations appear to be placed on the outputs of the Poverty Reduction Strategy Paper, which identifies long-term investment in developing economic infrastructure to directly benefit the people, stimulate micro-economy and generate growth potential for small and medium enterprises. The questions of when and how the government will deliver the promised outputs to people, however, seems to be beyond the scope of the official economic managers, who have full faith in the market’s ability to distribute the resources among people more efficiently.
Considering past experiences of economic growth, the government must realise that the "trickle down" factor has never worked. While the government creates an enabling environment for businesses, it needs to maintain an equally important role in the delivery of public goods and ensuring equitable distribution of wealth at the societal level. The teeming poor cannot be left alone to be taken care of by the market forces when the PRSP begins to yield outputs. They need support as well as protection through an active state involvement. The recommendations made by the Planning Commission in its recent Pakistan Participatory Poverty Assessment report needs to be looked into. There is good data available on the condition of every third Pakistani, who continues to live below the poverty line, afflicted by a crisis of access to land, water and natural resources and faced with extreme vulnerability amid weak safety nets. While basic services are failing people and rural unemployment is growing, continued emphasis on abstract, rather discarded, ideas like growth in per capita income appears misleading. Only a realistic assessment of "what is" would lead to a genuine policy framework harmonising the interests of the market and the people.
BAN ON WHEAT MOVEMENT
[Prof Mukhtar Ali Naqvi, Orlando, Fl., USA]
The ban imposed by the government of Punjab on the movement of wheat out of the province has led to an acrimonious dispute. Angry protests have come from the NWFP which seems to have been immediately hurt by it.
The Punjab government has explained that the ban is temporary and will continue till such time as the target of procurement is achieved, which seems to to mean that the step is of an administrative nature.
One may not be able to understand the relevance of the imposed ban to the procurement drive unless it is known that the price to be paid to the farmers is below the prevailing market price. Whatever the facts are, it is sad to find that the ban has led to bitter protests from one side which are not wholly unjustifiable.
It is obvious that the provincial administration of Punjab was not aware of the constitutional provision regarding inter-provincial trade which countermands any ban on the movement of any merchandise from one province to the other.
Article 151 (3) of the Constitution clearly lays down that "a provincial assembly or provincial government shall not have power make any law or take any executive step prohibiting or restricting the entry into, or the export from the province of goods of any class or description".
In view of this provision the ban constitutes a gross violation of the Constitution and needs to be lifted immediately. The federal government has remained a mute spectator and has failed to apprise the Punjab government that its order is without jurisdiction and, hence, ultra virus of the Constitution. [Dawn]
FreePakistan News-Briefs
LUXURY MERCEDES AMBULANCE FOR VVIP PATIENTS
The Federal Government has placed an order for the purchase of a luxurious Mercedes cardiac ambulance at a cost of Rs.13.09 million exclusively for the use of a selected group of VVIP patients of Islamabad.
EU COULD TAKE UP PAKISTANI AUTO MARKET ACCESS ISSUE
A business leader, Engineer M. A. Jabbar in his lecture before the officers of the Commerce Ministry at the Export Promotion Bureau, has warned that the European Union or for that matter any interested group I some countries with automobile export potential to Pakistan could take up the issue of market access for their vehicles to Pakistan.
SENATE BODY RECOMMENDS RECONDITIONED VEHICLES IMPORT
The Senate Standing Committee on Industries and Production has recommended to the government to allow import of reconditioned vehicles.
PAPAAM DEMANDS CONTINUATION OF TARIFF
Pakistan Association of Automotive Parts and Accessories Manufacturers has asked the policy makers to continue with its current tariff policy on Completely Knocked Down (CKD) kits of vehicles because any relaxation may hurt local industry.
GOV NEGOTIATING WITH RUSSIAN, FRENCH FIRMS TO ASSEMBLE VEHICLES
Government is negotiating with Russian and French companies to start assembling of their vehicles at state owned Sindh Engineering Limited with maximum indigenization.
GOV TO BRING RENT-A-CAR COMPANIES UNDER TAX NET
Punjab Transport Department is conducting a survey to ascertain the total number of rent-a-car companies operating in the province to bring them under the revenue net.
GOV SHOULD FOCUS ON ‘SUPPLY-SIDE ECONOMICS’
According to a survey conducted by the daily Dawn, Business and Industry leaders want the government to focus on ‘supply-side economics’ in the next budget (2004-05) by adopting liberal import policy and removing duties on industrial raw materials and capital goods. Instead of framing revenue-oriented policies, the government should take care of the supply-side which would enhance revenue by increasing business and industrial activity in the country.
CALL TO ENHANCE TAXABLE INCOME LIMIT
The Lahore Chamber of Commerce and Industry has asked the Central Board of Revenue to increase the upper limit of tax-free income to 0.2 million rupees to provide a relief to fixed income people. In the budget proposals forwarded to the CBR, the LCCI President said that keeping in mind the low income earners like salaried people, small businesses and Small and Medium Enterprises, Income Tax exemption limit should be increased from Rs.80, 000 per annum to Rs.150, 000 and following tax slabs should be introduced to facilitate the tax payers.
GOV URGED TO EVOLVE A TAXPAYER EDUCATION SYSTEM
The Lahore Chamber of Commerce and Industry has urged the government to evolve a taxpayer education system. Changes in the Sales Tax law, SROs, etc., are clothed in legal jargon and not easily understandable to most of the taxpayers. As these changes have far reaching consequences for future tax liabilities of tax payers, it is important that changes in law are informed to the taxpayers I understandable manners and should be duly circulated to all taxpayers.
GOV URGED TO OVERHAUL TAX STRUCTURE
The Chairman Alliance of Market Associations, Karachi, has demanded the overhauling of taxation structure in the coming federal budget for 2004-05.
GOV URGED TO REDUCE PHONE CHARGES
One of the Executive Committee members of Lahore Chamber of Commerce and Industry has urged the government to reduce the telephone charges so that the communication network could be broadened and affordable to the common businessmen to boost the economic development in the country.
GOV TO LEVY 15 % GST ON SERVICES
The Federal Government has assured the multi-donor agencies to levy 15 % General Sales Tax o services in the upcoming federal budget.
GOV TO INTRODUCE RETAIL TAX IN THE BUDGET
The government plans to introduce retail tax in the forthcoming budget. Half a million retailers of 13-15 major towns of Pakistan are expected to be brought under the GST net through a system being devised on the instructions from the Ministry of Finance.
FEDERAL MINISTER PROPOSES ABOLISHMENT OF CED
The Federal Minister for Industries and Production has proposed the abolishment of the Central Excise Duty, reduction in sales tax on local scrap and detergent industry and increase in the import duty in order to protect these products.
GOV MAY ABOLISH DOUBLE TAXATION ON INDUSTRIES
The government is likely to abolish the double taxation of industries through the GST and Central Excise Duty in the forthcoming budget.
WORKERS REJECT WTO AS RICH STATES’ TOOL
Speakers at a meeting of workers described the World Trade Organization as a tool through which industrialized and rich economies intended to control the economies of developing countries.
PRIVATIZATION TO SAFEGUARD WORKERS INTERESTS
The Federal Minister for Privatization and Investment has said that the government considers workers as strong stake-holders of public sector entities being offered for privatization and it is the prime objective of the privatization policy to safeguard the interests of these workers. He said that as compared to any other international privatization experience, Pakistan has the distinction of offering most generous schemes to workers.
RAISE IN PETROL PRICES SLATED
The Korangi Association of Trade and Industry and many other parties and groups from various walks of life have strongly condemned the rise in petroleum products prices terming it as a threat to the country’s economy.
PROPOSED HIKE IN GAS TARIFF SLAMMED
Sui Southern Gas Company’s application to Oil and Gas Regulatory Authority seeking increase in gas tariff by 18 % has drawn criticism from stake-holders who have decided to put up every possible resistance to block the move.
PROTEST AGAINST TAXES ON KEEPING ANIMALS
People took out a rally against the Jaranwala Tehsil Administrator for imposing unjust taxes on keeping animals.
POOR LAW AND ORDER AFFECTING TOURISM
The Chief Secretary Northern Areas has said that insufficient steps for restoring confidence of foreign and domestic tourists coupled with a loose administrative grip over the miscreants have played havoc with the nascent tourism industry in the Northern Areas of Pakistan.
CONCERN OVER LAW AND ORDER
The industrialists of provincial metropolis, Lahore, have expressed concern over the worsening law and order situation especially in the suburbs which is threatening to the working of the companies.
PAKISTAN ARMY TO BE CUT BY 50, 000 MEN
The Formation Commander Conference has affirmed a restructuring plan of the army that envisages shedding of 50, 000 men.
PUBLIC EXHIBITION OF INDIAN FILMS DEMANDED
Pakistani filmdom has joined hands to go together for survival and revival of the industry and its mainstay, the cinema houses, by establishing a new Film Action Committee which has announced to give another 15 days to the government for action on their demands. In the course of meeting, the Committee agreed that exhibition of Indian films will not bring any harm but will give an element of sustenance to the dying cinema and also agreed to appeal to the government to allow the exhibition of Indian films to revive the cinema going habits in the people.
ASIA, “WORLD’S BIGGEST PRISON FOR THE PRESS”
According to a report issued by the Reporters Without Borders, Asian nations detained more than 200 journalists last year, while three were condemned to death and at least 16 murdered. In May, 2004, 27 journalists were in jail in China, second only to Cuba’s 29, while 11 were imprisoned in Myanmar; and, 4 were arrested in Pakistan over the year.
INDIA, PAKISTAN, SAUDI ARABIA: RELIGIOUS RIGHTS VIOLATORS
An independent US commission monitoring global religious rights has included India, Pakistan, Saudi Arabia and Viet Nam in its list of violators of religious freedom.
GETTING SUCCESSION CERTIFICATES AN UPHILL TASK
Obtaining a succession (legal heir) certificate from the civil courts for succeeding a relative is an uphill task for the relatives of the deceased person. The cases of succession are also increasing the backlog in these courts where 1,230 succession cases are pending. The whole process does not decide anything less than three months, and the process may evolve over many months.
SBP LIBERALIZES BOOKS’ EXPORT
The State Bank of Pakistan has announced further liberalizing the export of 4-type of books to foreign countries. The SBP said that books falling under the categories of literature, religious, educational and general books could be exported without prior NOC of the central bank subject to the condition that value of the individual shipment or export does not exceed US $ 10, 000. However, the two conditions of endorsement by Custom authorities on NOC of each shipment and submission or reporting to foreign exchange operation department of the SBP Banking Services Corporation shall continue as existing for the purpose of the record.
REDUCING THE OFFICIAL PENSION BILL
Experts engaged by the government to help reduce the pension bill have recommended enhancement in the retirement age of civil servants from 60 to 65 to stagger the cost.
PUNJAB POLICE CHIEF ORDERS REMOVAL OF PRIVACY CABINS
The Inspector-General of Police, Punjab, has ordered the police to ensure that all internet cafes remove their screened-off cubicles around computer terminals and replace them by glass walls.
TREATMENT PLANT, WATER TANK MUST FOR NEW HOUSING SCHEMES
The Punjab government has declared the installation of waste water treatment plant and the construction of over-head water tank as mandatory and essential for new housing schemes.
ADB THREATENS TO STOP LOAN
The Asian Development Bank has threatened not to release $ 100 million (Rs.6 billion) for judicial and police reforms program after it found the Prime Minister Secretariat and Finance Ministry dragging their feet on agreed roadmap to improve the sorry state of Judiciary and Police in Pakistan.
POPULATION EDUCATION TO BE A PART OF THE CURRICULUM
The Federal Ministry of Education in collaboration with the United Nations Population Fund is working on a plan to include contents related to population education in the textbooks of Matric and Intermediate students.
CONSUMER PRICE INDEX UP IN 10 MONTHS
According to the Federal Bureau of Statistics, the Consumer Price Index is up by 3.93 % in the first ten months of current fiscal year as compared to the same period of the last fiscal year.
AN AD: HELPING PAKISTAN TO ECONOMIC RECOVERY
An ad from the Central Board of Revenue, Government of Pakistan, reads as: Wise and bold initiatives of the Government . . Helping Pakistan to economic recovery. The far-reaching changes incorporated at CBR have helped us make a major contribution by putting Pakistan on road to economic recovery. This is a tribute to the wise, pragmatic and future-oriented policies of the present Government. This will go a long way in the attainment of the ideals of self-reliance and national sovereignty. The spirit must not falter! CBR has taken bold new initiative by introducing Universal Self-Assessment across the board in all taxes, for all tax payers. Our on-going and future plans include: further simplification of tax laws/procedures; facilitation of tax payers; automation of business processes; and broadening of Tax Base. Everything we do is for your convenience and your comfort. Step forth, make use of the new tax culture and contribute to national development. A Glimpse of Our Achievement: Collection up to 30-04-2004: Rs.395.7 billion; collection last year up to 30-04-2003: Rs.352.1 billion; overall growth: 12.4 %.
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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.]
