Freedom is, above all, the right of ordinary people to find elbowroom for themselves and a refuge from the rampaging presumptions of their 'betters'.
-Thomas Sowell
CONTENTS:
0 Pakistan's First Free Market Think Tank
0 Freedom of the Internet
0 Economic Realities of Pakistan
0 Letters
0 FreePakistan News Briefs
PAKISTAN'S FIRST FREE MARKET THINK TANK
Pakistan's first free market think tank, Alternate Solutions Institute, has recently been launched in Lahore, metropolis of the Punjab province and a historical city known for its intellectual and cultural importance, learning institutions, and, last but not least, a sort of opinion center of the country. Here is what the A S Institute is all about:
Alternate Solutions Institute
[Our Motto: Welfare of the People By the People]
Alternate Solutions Institute is a non-profit, non-political educational organization. Its mission is [1] to seek solutions of the challenges especially in the area of economy, law, education and health in accordance with the principles of Classical Liberalism and [2] to promote the implementation of these solutions.
In short, A S Institute aims at promoting the concept of a limited responsible government in Pakistan under the rule of law protecting life, liberty, and property of all of its individual citizens.
To achieve these ends, A S Institute pursues the following activities:
Translation and publishing of relevant texts from other languages into Urdu; Preparation of original texts based on research suggesting particular solutions of the particular challenges ; and, conduct seminars, workshops, conferences, to educate interested students, teachers, and journalists in the principles of Classical Liberalism.
If you need further information and want to support A S Institute's efforts, please contact at the following address:
Email: asinstitute =at= hotmail.com
FREEDOM OF THE INTERNET
[As the quote above says, the "betters" of Pakistan has started 'protecting' the young from what they presume is not good for them, that is, obscene websites. Though, they think that every young man of 18 is mature enough to decide whom to vote or whom not to vote; but, why he is not considered mature enough to decide on his own what is good and what is not good for him? In the case of young below 18, it is the responsibility/duty of the parents, not the state, to protect them from what they consider is not good for them. Apart from the common statist view on this matter, here are two extremely different opinions from the citizenry.]
NAWEED AHMED writes: Internet is a medium which grew so popular globally due to the mere fact that there is no boss or manager of this medium and there is no hierarchy in this domain. It is a free and accessible to all classes of the society world wide. There is no group or organization claiming to own it and anyone any where can get connected to it.
But, here in Pakistan, the state and its machinery is having pains and aches as to how to control and curb this freedom from a common insignificant citizen and why he should not be dictated by us in using this medium as well, like majority of other state controlled areas.
The recent statement of the Minister for information on the blocking of certain websites, via PTCL (Pakistan Telecommunications Company Ltd.) gateway, speaks volumes of his feudal mentality. This stupid act has simply slowed down the internet browsing speed. The ISP's Internet Cafe owners and general public were never consulted for their opinion and permission before taking up this unilateral step that affects the end users.
Had he been a common man or from an educated middle class, he would have an intellectual and liberal outlook and people friendly approach and would have never thought of controlling or blocking things which are not provided by his government. But he being a typical feudal cannot help his narrow and exploitative mindset. He belongs to that hypocrite ruling class for whom everything under the sun is allowed and alright, but for others the rules of the game are different and they do not need to be consulted or asked even!
Instead of improving areas under their ministries, these so called graduate ministers are simply mimicking their predecessors who were tools in the hands of establishment doing nothing for a common man but only for themselves.
Every other day we hear of controlling or blocking or censoring one facility or the other whether it is VIP MSN chat, satellite channels and cable. The deciphering of mobile phones, the amateur radio, dance on stage, pillion riding etc, the list is endless. I do not why they hide their inefficiencies by controlling facilities and privileges of common citizens.
It is time to change this old practice of controlling everything. Look what the state machinery have achieved so far by doing all this? We have become a notorious, uncivilized, violent, illiterate, intolerant and rigid nation. The youth has turned to arms and crime instead of music and arts.
Let the users have a free and unfiltered access to internet without any state control! Let them have their own personal censorship and let them decide what to see and what not to! The state should stop this practice of spoon feeding the users. Let the internet be free from state interference at least! [Courtesy: The News June 26, 2003]
BILAL MAZHAR writes: I have noticed that for the past three years the public in Pakistan is concerned about young people visiting pornographic sites on the web.
Some people have advised the parents to keep an eye on their children and discourage Internet cafes while others have suggested that such websites should either be banned or blocked. These measures will not help solve the problem because of various reasons. Keeping an eye on the children for the whole day is a tough job.
If the Internet cafes are closed, the spread of IT in Pakistan will get affected. Moreover, it is not possible for the government or any other organization to block access to millions of web pages which are growing fast.
The only realistic and possible solution to the problem is to let both sexes communicate to allow their behavior and mental state to mature. This solution has been applied, with good results, in many modern Islamic countries, including Egypt, Turkey. [Courtesy: Dawn June 29, 2003]
ECONOMIC REALITIES OF PAKISTAN
By Zafar H. Anjum and Syeda Quratulain (1)
[Bazaar Chintan (Hindi for "Ideas Market"), based in New Delhi, India, is a think tank comprising eminent economists working on ideas that free society. Bazaar Chintan publishes a working paper series, conducts workshops, researches issues of contemporary interest and organizes seminars and discussions on India's political economy. Some of the relevant parts of its Working Paper No. 3 Bazaar Chintan October 2002 "A Tale of Two Countries: Comparing India's and Pakistan's Economies: A Survey" (What ails these economies at war with each other for more than half a century?) analyzing the economy of Pakistan are copied here. If you are interested in reading whole of this paper, please go to the link: http://www.bazaarchintan.net/pdfs/paper3_indiapakistan.pdf]
Abstract
In September 2002, Bazaar Chintan conducted a study on the state of the Indian and
Pakistani economies. An eclectic group of economists were asked questions on major
economic concerns for the two countries. The answers not so surprisingly were common,
as were the issues raised. The first part of this paper deals with economic history; the
second part with the Indian and Pakistan issues after independence, and is a comparative
study of the two economies, comprising the survey findings.
Both countries obtained their freedom from British colonial rule in the August of 1947.
And like most developing countries, embarked on an import substitution based policy of
industrialization. A protectionist climate was set up and a selective foreign investment
strategy was evolved. As domestic industry and resources grew, these countries initiated
a series of policy reforms in the 1980s, which were expedited in the 1990s. Both India
and Pakistan are members of the WTO, and this galvanized their efforts at integrating
their economies with the rest of the world. Opposition to international trade and
globalization was articulated rather vocally through the entrenched business class
accustomed to protectionism. The arms race continued till both achieved nuclear
capabilities having spent enormous moneys in doing so. Both faced sanctions after their
nuclear tests, and are now grappling with worries on the economic front.
Part 1
A common fate
Historically the Indian subcontinent has been an agricultural country. The 1871 census
reports that 56% of adult male population was engaged in agriculture. The manufacturing
sector coexisted in the form of labor intensive industry based on handicrafts. Technical
skills available paved the way for a relatively strong spinning weaving, dyeing, gold,
silver, and perfume industry. However, trade suffered, as communication systems were
poor, and transportation meager. Yet there was enough evidence of external trade. India
enjoyed surpluses and received gold and silver. There were really no roads, though the
shipping infrastructure was of a high standard. The banking sector was one where
individuals and families operated banks.(2) The predominance of rural life saw an
economy that was almost entirely rural. A simple form of division of labour based on
hereditary skills needed only a small urban population.
The British period was significant in its colonial undertones. Stagnation under the British
rule resulted in tremendous impoverishment and therefore India became an
underdeveloped economy. The downward slide, it is argued came about as a result of
some major factors like
a. A steady reduction in the per capita income - The per capita income recorded in terms
of paddy production fell from 15.4 in 1867 to 12.7 in 1899, and from 100 in 1905 to 91 in
1945.
b. A fall in living levels evidenced in a high birth rate of 45 per thousand considered the
biological maximum rate. The death rate went up to 47 per thousand. In 1941 only 17%
of the population was literate.
c. Low growth in national income coupled with little addition to stock of real capital. The
level of net investment was low. Capital stock in fact declined due to the world war. And
if this was not enough, the partition in 1947 further depleted capital. Both new countries
faced tremendous constraints and inherited a landlord tenant relationship encouraged by
the British.
d. The number of workers in agriculture had steadily gone up. 74% of the population was
engaged in agriculture in 1881 and this figure went up to 76 in 1931. On the other hand
the workforce in manufacturing that was at 18% in 1881 went down to 15 in 1931.
There have been several explanations offered for this decline. Among the prevalent ones
are the level of technology employed, a prevalence of anti growth attitudes,(3) religion,
rigid caste structure and a moribund class hierarchy. Another oft-quoted reason has been
population pressure and Kinsley Davis has further argued that it was not population
alone, but a case of growth growing far slower than population. Dadabhai Naoroji and
Romesh Dutt have put the blame squarely on the Government's colonial policy where the
state apparatus was used in the interest of British industry and against Indian economy.
Heavy import duties in Britain were accompanied with high excise duties in India. The
entire government procurement system was lop-sided. On top of all this the country was
squeezed of its surpluses from the budget and the foreign trade sector. Several payments
were effected for which there was no return.(4)
Part 2 - Pakistan
State of the Economy: Pakistan
Introduction
Pakistan's economy has traditionally been heavily dependent on external sources. The
phase of high growth in the 1960s came to an end with the break up of Pakistan in the
early 1970s. And the economy registered falling rates of growth. In the 1990s, the
country's GDP growth rate slided down from 6 percent to 3 percent. The shortfall was
mainly due to agriculture where production declined by 2.5 percent. The fall in
investments did not help. The government's debt started accelerating to reach a level
above 100 percent of GDP. And the September 11 damage on account of the Afghan war
is estimated to be upwards of $2 billion. Debt rescheduling and promises of grants and
open markets from western countries have yet to register their presence. On a positive
note, the rupee strengthened from Rs. 64 per US dollar in October 2001 to Rs. 60 per US
dollar in January 2002. This has possible due to a regulation of the banking sector and
remittances, and crackdown on hawala transactions.
Pakistan's economy has been hampered by the following factors:
1. Lack of an industrial Base: Over the decades, Pakistan developed a modest
industrial base in steel, textiles, sugar, cement, leather goods, chemicals and
plastics. Agriculture's contribution to the overall output in the country has come
down from 39 percent in 1969-70 to 25 percent in 2000-2001. At the same time,
the share of the services sector increased from 38.4 percent to 50.3 percent during
this period. The share of manufacturing has consistently remained around 16-17
percent during the past three decades. Large-scale manufacturing sector that grew
at an average rate of 8.2 percent in the 1980s slowed down to an average rate of
4.4 percent in the first half of the 1990s and further to 2 percent in the latter half.
2. Low Investments and Savings: In the second half of the 1990s, total and fixed
investment rates went down to 17 percent and 15.2 percent of GDP respectively,
from 19.5 percent and 18 percent in the first half of the decade. Also, foreign
investment has been consistently coming down since 1995-96. From $1400
million in 1995-96, it declined to $403 million in 1998-99. In 1999-2000,
however, investments rose ever so slightly to $543 million.
3. Reliance on External Borrowings and Remittances: In the 1990s, remittances
declined and export growth slowed down. As a result, the current account balance
of payments deficit increased, touching 7 percent of GDP in 1995-96. Also,
external debt quadrupled from $10 billion in 1980 to $40 billion in 2001. Pakistan
has received foreign aid in the wake of the Afghan War in 2001, but the country is
yet vulnerable to a debt trap.
4. Weak social sector development: Growing poverty and low standards of health
and education have been a nagging problem. Nearly 35 percent of the population
lives below the poverty line. Infant mortality rate is high (ten percent). Similarly,
the drop out rate of children at the primary school level is as high as 50 percent.
Unemployment is also a big problem. At least one out of every ten men in the
organized sector is jobless. And while the country's defense expenditure
accounted for 4.5 percent of GDP, its development expenditure hardly accounted
for 3.2 percent of GDP.3
1998 1999 2000
GDP per head (USD) 431 455 472
GDP (% real change pa) 6.08 7.20 5.90
Government consumption 12.04 12.85 12.80
(% of GDP)
Budget balance (% of GDP) -4.81 -4.18 -5.00
Consumer prices 13.21 4.72 4.02
(% change pa; av)
Current-account balance/GDP -1.65 -0.62 -1.10
Foreign-exchange reserves (m$) 27,341 32,667 37,902
Source: The Economist country briefings
Population: 137.5m (2000)
Population growth: 2.4% (average, 1996-2000)
Land area: 796,095 sq km (excl Jammu & Kashmir)
Fiscal year: Starts July 1st
Currency: Pakistan rupee (Prs); PRs60.0:US$1 (Jun 24th 2002)
GDP(b) (at market prices): PRs3.2trn (1999/2000); US$61.3bn (1999/2000, at market
rate); US$254.4bn (1999/2000, at PPP)
GDP growth(b) (at factor cost): 3.2% (average, 1997/98-2001/02)
GDP per head: US$450 (1999/2000, at market rate) US$1,840 (1999/2000, at PPP)
Inflation: 7.3% (average, 1996-2000); 3.2% (2001, average); 1.9% (2000, year-end)
Background
According to the State Bank of Pakistan (SBP, the central bank), the merchandise trade deficit in the first eleven months of fiscal year 2001/02 (July-June) narrowed by 23.1% to US$1,195m. The fall was attributed to lower import volumes and oil prices.
Taxation
From 2002/03, the surcharge on corporate incomes has been abolished and listed
corporations pay 35% tax on profits. Banking corporations pay 50% tax in 2002/03. The
number of personal income tax bands have been reduced from seven to five, with a
minimum of 7.5% and maximum of 35%. Preferential rates apply in special industrial
zones. Non-residents are exempt from tax on income earned from government securities
and capital listed on the stock exchanges. Simplified rates of tax, from 0.5% to 1%, apply
to income from the export of goods.
Major exports (2000/01) % of total
Cotton 58.9
Leather 7.5
Synthetic textiles 5.9
Major imports (2000/01) % of total
Petroleum & products 31.3
Chemicals 20.0
Machinery 19.3
Leading markets (2000/01) % of total
US 24.2
UK 6.3
Hong Kong 6.3
Germany 5.3
Dubai 5.3
Leading suppliers (2000/01) % of total
Saudi Arabia 11.7
Kuwait 8.9
US 5.3
Japan 5.3
Malaysia 3.9
Source: The Economist Country Briefings
Conclusion: Indo Pak Trade
During his famous 'bus journey' in February 1999, the Indian Prime Minister announced
the formation of the India-Pakistan Chamber of Commerce and Industry. But then Kargil
happened and ruined relations between the two countries. India categorically refused any
talks with Pakistan - on any matter. In recent years, there has been increased consensus
regarding the significant trade potential that exists between the two countries. India's
unofficial and smuggled exports to Pakistan are estimated at US$1 billion, while the
official figures are a mere US$ 94 million. Though officially only 600 items are under the
list of imports to Pakistan, a much larger number find their way into Pakistan, from India
to Bandar-e-Abbas in Iran, to Kabul and later to Peshawar. The selling price of these
goods in Pakistan's markets is that much more inflated due to this circuitous trading
route.
Pakistan imports iron ore at a higher cost from Brazil and Australia. Cars and scooters
produced in Pakistan are priced 50 per cent higher than Indian vehicles. Pakistan is the
second-largest consumer of tea in the world, a market that can be exploited by India.
Indian drugs are 30 per cent cheaper. Pakistan has banned the import of textile machinery
from India and manufacturers import the machinery mostly from Germany. Pakistan's
annual demand for tyres stands at 10,00,000, whereas it produces only 200,000. Yet, it
has imposed a 46.6 per cent duty on popular Indian truck tyres. Indian coffee is smuggled
into Pakistan in a big way due to lack of official recognition.
It is quite obvious that trade between India and Pakistan is fraught with possibilities and
would clearly result in handsome rewards for both sides. Indian goods have ready-made
markets in Pakistan and its neighboring manufacturers could easily tap India's large
market size.
Footnotes:
1 Zafar H Anjum is an editor and writer based in New Delhi, India. Syeda Quratul Ain
studies Economics at the Punjab University and is a Goodwill Ambassador of students.
She is an international debater as well as All Pakistan best student writer.
2 The main instrument of credit was the Hundi - and the two types of hundis were the
Darshni Hundi and the Mudati Hundi
3 As argued by Knowles in The Economic Development of the British Overseas Empire.
4 The drain is estimated to be at least 2 to 3 per cent of national income 1757 - 1939.
Romesh Dutt - 'the lifeblood of India in a continuous ceaseless flow was drained away.'
[Courtesy: http://www.bazaarchintan.net]
LETTERS
MY pessimism is somewhat different. I am optimistic - or, at least, somewhat
hopeful - that, mankind may, eventually, embrace freedom; but, not in my
lifetime; nor a thousand lifetimes! Indeed, one day, should mankind
survive the consequences of its own follies that long, it will have
little choice, but to (eventually) accept freedom as the ONLY workable
system of "governance". But, as I say, I believe this will be a VERY
long, LONG time coming.
I'm not sure what such an outlook classifies me as (definitely not a
"conservative," . . .) but, I have yet to
see any evidence that my conclusion is not a valid one; or, that my
(short-term?) pessimism is unwarranted.
Thanks again! - CAB
One added note, in view of my most recent comments. A quote:"Of all things
that human beings fear (and they are a timorous race) the
one that strikes them with abject and utterly demoralizing terror is
freedom. They are so afraid of it for other people that almost
simultaneously they come to dread it for themselves... They are willing
to go to the most fantastic lengths in restriction and repression; but
the one thing that they never yet have shown the courage to try is simple
freedom, which some day they will have the happy surprise of discovering
to be the only thing that really works." - Albert Jay Nock, "Miscellany,"
The Freeman, October 3, 1923
One day, many, many years from now. Good day!
CAB
FreePakistan News-Briefs
ISP'S OPPOSE BLOCKING OF THE WEBSITES
Internet Service Providers have voiced strong opposition to PTCL's (Pakistan Telecommunications Company Ltd., practically a government monopoly) efforts to block porno websites which they say is slowing down the internet browsing speed. "Decisions about blocking of content and packets must not be implemented without considering their implications for network and its throughput. This will stop Denial of Service attack generated by slow routing," the Internet Service Providers Association of Pakistan said in a paper it submitted to federal minister for information and technology and telecom.
PROTECTING THE YOUNG FROM PORN
The ministry of IT would soon distribute free computer software among parents in a effort to guard children and the young from pornography and lewd content on the Internet. The IT minister has approved funding for a project to develop content blocking software by Pakistani software companies.
PROVISION OF JUSTICE IS NOT IDEAL
Addressing a seminar, the advisor to chief minister Punjab on human rights and law affairs admits that the role of judiciary and administration in the provision of justice and relief to the public is not ideal.
ENSNARING THE TAXPAYERS
Central Board of Revenue will set up fully furnished modern air conditioned offices to facilitate and provide VIP protocol to first 300 big taxpayers in all metropolitan cities across the country.
ILO CONTRADICTS A SOUND PRACTICE OF PROSPEROUS ECONOMIES
An International Labor Organization report presented at a seminar says that at least one third of Pakistan's population is under poverty line owing to the macroeconomic policies regarding withdrawal of subsidies on food, education and health.
PETITIONS AGAINST PRIVATIZATIONS DISMISSED
A full bench of the Lahore high court with a unanimous decision dismissed three constitutional petitions which questioned the privatization process of the public assets through the means of Privatization Commission by the Federal Government.
DONORS DISLIKE SUBSIDIES
The International Monetary Fund and World Bank have delayed new loans for Pakistan due to growing power sector losses. The Asian Development Bank also showing concerns expected the government to phase out subsidies on wheat and fertilizers.
SELL YOUR WHEAT ONLY TO GOVERNMENT
Acting totally contrary to the norms of free market phenomenon and fair competition, four district governments of Punjab have barred wheat growers from selling their produce to private parties. According to market reports, private investors were offering the farmers a rate of Rs 285 per maund which was satisfactory and farmers were trying to sell their wheat to the private parties instead of the government. By selling their wheat to private parties, the farmers can save a handsome amount by avoiding the heads of transportation, and loading and unloading charges.
BUSINESSMEN BEMOAN RED-TAPISM
Exporters and industrialists of Sialkot (the biggest sports goods manufacturing center of Pakistan) have criticized the indifferent attitude of various government departments towards their problems.
PRIVATIZING KARACHI ELECTRIC SUPPLY CORPORATION
The federal minister for Privatization and Investment announced that Karachi Electric Supply Corporation (KESC, a government monopoly) would be privatized within three months.
THE DEBT IS DOWN BUT THE POVERTY SHOOTS UP
According to official sources, poverty in Pakistan has increased by 2-3.5 percent since 1989-99 whereas net debt (total external loans and liabilities excluding official reserves) is down by $ 10. 4 billion.
INVOKING THE STATE AGAINST THE COMPETITORS
Pakistan Film Producers Association has demanded that excise duty be imposed on 9000 cable operators and film industry be declared tax free for at least two years.
POVERTY LINE AND GST
In an interview, the United Nations Assistant Secretary General and Director UN Development Programs, Dr. Hafeez Pasha said that Pakistan should draw a basic lifeline consumption basket and must exempt it from general sales tax. To cushion the people living below the poverty line, he proposed entire food items, first 50-100 units of users of electricity and gas and medicines, as some of the key items of this lifeline consumption basket.
KITE-FLYING BAN CHALLENGED IN THE COURT
Kite-sellers of Lahore city challenged the order of the Punjab government which had extended the ban on kite-flying imposed by the city district nazim (administrator). The counsel has submitted that the Punjab government had already issued a notification under which sale, purchase, storage, manufacturing, use of metal wire and nylon-chemical fibre for kite-flying was banned. He further stated that instead of proper implementing the notification, the government totally prohibited the kite-flying which was a violation of court judgment in which the sale, display for sale and kite-flying was held not to be covered by mischief of Section 144 and the orders issued by the magistrates were held unlawful.
Edited and prepared by
Khalil Ahmad
Email: khalilkf =at= hotmail.com
khalilkf =at= yahoo.com
[No opinion expressed here should be taken as reflecting the view of the FreePakistan Newsletter.]
