Dare to Question?

By Bader Al Hussain

Since the independence, Pakistan has been shrouded in conundrums of mystified bomb blasts, plane crashes, assassinations of major influential political figures and military dictators plus the befalling of disconsolate events like disintegration of Pakistan. After every incident or juncture, it had been customary in Pakistan that a committee was formed by the government to investigate that particular advent but unfortunately, never in the history of Pakistan, the findings of the committee came out. As far as public is concerned, there is inveterate initial outbursts and then everything goes buttoned up.

It is pertinent to mention the past instances which still contribute to the confusion and travails in understanding them wholesomely to the Pakistani nation. Abstaining from going into past, let’s start from the Kargil issue; it is a contention which has never been addressed contemplatively by the government, even today it still is the flash point between Nawaz Sharaif and Musharraf’s rivalry. One claims complete obliviousness to the issue while the latter one declares Pakistan’s victory.

Moreover, the most important and foremost issue that has caused great affliction and depredation to Pakistan is so called United State’s “War of Terror”. As a result of this war, Pakistan has lost 35000 precious civilian lives and 5000 men in uniform. The country’s economy has borne the toll of more than 68 billion dollars according to economic survey of Pakistan. In addition, Pakistan army has also endured numerous attacks on its vital installations including General Head Quarters (GHQ) located in Rawalpindi.

After the ouster of Pervaz Musharraf, U.S. wanted his (Pervaz Musharraf) polices to be continued as her (U.S.) interests were well-protected under his regime. Therefore US along with other elements of establishment formulated NRO and engineered 2008 elections in which PPP won the majority and formed government in which nearly every party in the parliament was entailed in power.

United States’ and its coalition partners’ war in Afghanistan , in any expert’s view, is a complicated and convoluted war in which myriad of regional and non-regional players have drawn themselves into it, in order to pursue their covert agenda and ulterior strategies but overtly they all are on one page; to bring stabilization and peace in this region. Pakistan has unfortunately being enmeshed and entangled in this war and henceforth, suffered the maximum.

Pakistani public has never been able to ask the question from their incumbent governments since 9/11, what is our policy in “War on terror”. In fact our policy was driven on the basis of fear plus carrot and stick policy adopted by US as far as Pakistan is concerned. Our leaders in arrant fear, cowardice ad for the sake of dollars dragged someone else’s war initially into Pakistani tribal areas and eventually inside the rest of the country.

 Blatant and incessant drone’s attacks by Americans with the tacit agreement and understanding of their counterparts in Pakistan has proved to be counter-productive and hence, fuelled anti- Americanism, insurgency and bomb blasts inside the Islamic republic.

The youth of Pakistan ought to realize the dynamics and veracity of the problem we are in, as they are future leaders of this country which has abundance of potential to rise and become one of the power centers of the world. Pakistan is in this mess because of the inability of the masses to question their leaders’ doings and activities since its inception.

We have never asked, what Raymond Devis was doing in Pakistan and more important his network that is still operating inside Pakistan. He was released, exonerated of all charges, keeping into account his covert activities. Only two political parties (i.e. Jamaat-e-Islami (JI) and Pakistan Tehrik-e-Insaf (PTI)) have protested against his release while rest of the nation was in utter apathy. We should question the authorities about the level of involvement of external factor which directly and actively contribute to the ever deteriorating law and order situation of Pakistan. Recent arrest of Pakistani Hindu singer, Asma Lata, by secret agencies on account of spying for Indian in terror ripped KP; raise eye brows and signifies the extent of Indian role in whatever is happening inside the geographical boundaries of Pakistan.
  

Moreover, committee reports of incidents such as Abbotabad operation and Mehran base attack got to be made public as the whole nation has confronted the catastrophe. Additionally, an effort has to be made to make all institutions accountable for every deed and action they take and punitive action with stern hand should be taken against defrauders and swindlers.

The writer is currently a student at NBS

Why south asians are sensitive about western borders ?

By Bader Al Hussain

South Asian which mainly includes Pakistan, India and Bangladesh, has its own unique security and military doctrine and threat perception. The threat discernment has not always been defined by the capability of the adversary but by the direction from which it is emanating. Even today, the precedent continues after taking into consideration, the ground realities and also due to prevailing security conditions. In order to understand this unique peculiarity, we need to analyze it in retrospect.  

Starting from classical period, the Delhi Sultanate conquered India from the west, initiating from the northern areas and ruled India from 1206 A.D. to 1527 A.D. They were successful in quelling attacks of Mongols from central Asia, which is in north-west of India, but were also weakened by it. Subsequently, Zahir ud-din Muhammad Babur, who was then ruler of Kabul invaded Delhi in a Battle of Panipat, due to his superior generalship, vast experience in warfare, effective strategy and appropriate use of artillery, in which Ibrahim Lodi was killed on the battlefield.

Other empires included, Vijayanagara Empire which rose into prominence as a culmination of endeavors against Islamic invasion from north-east by the end of thirteenth century. It lasted till 1646 after facing major setbacks militarily by Deccan sultanates. Moreover, Deccan Sultanates were also conquered by Mughals till 1686.

Mughals ruled the subcontinent for about 300 years, eventually they embarked to enfeeble in eighteenth century after the death of Aurangzeb. One of the contributing factors of abatement was incessant invasion attempt of Nadir Shah of Persia and Ahmed Shah Abdali of Afghanistan from the west.

After the partition of Indian in 1947, India regarded Pakistan as its arch-enemy. Even though, at that time, Indian was ten to seven times copious militarily and economically than its rival but had never renounce it as an enemy.  Even after 1971 war, when East and West Pakistan was disintegrated into two different countries i.e. Bangladesh and Pakistan, the obsession of India’s towards Pakistan continues. Pakistan rightfully considers India as an existential threat since its inception because of activities of Indian armed forces along Indo-Pak border. Pakistan excogitates India on the basis of capability not otherwise.

 Historically, whenever attack or offensive is launched on sub-continent it came through western or north-western front through the lands of Iran or Afghanistan with an exception of Britons; therefore, whether it is Pakistan or any other country it views its western borders very sensitively. In case of Pakistan, the theory of strategic depth and strategic defiance was envisaged by Pakistan armed forces to protect its interests on western fronts.

 Today excessive force is deployed by Pakistan to stabilize its western region, even though, terrorist threat from that are is not as grave where artillery, fighter jets and tanks has to be deployed. According to some scholars, during Afghan Jihad in 1980s, if Pakistan would not have thwarted the communist through its Islamic Ideology, then even India could not stopped it. And the whole sub-continent might have come under soviet influence.

It is understandable why India is exercising its dominion in Afghanistan, through which it is destabilizing Pakistan, weakening its defense deterrence in order to encroach upon its hegemony in the region as it sees herself as a rising Superpower in the global arena of multi-polar world.  Ironically, India enunciated China as its future rival both militarily and economically but has maintained eighty percent of its troop’s deployment against western border i.e. Pakistan. All its fighter squadrons and forward air bases are aimed towards Pakistan.

After the nuclearization of South Asia, its stability depends upon the resolution of Kashmir dispute which is only possible through dialogue with the consent and aspirations of Kashmiris on both sides.   

The writer is currently a student at NBS

Why youth ?

Pakistan is going through turbulent and tremulous times with external and internal factors adding to its precariousness. General population especially the youth of Pakistan is in vexation over the future of Pakistan’s   on-going situation.

Nevertheless, Pakistan has immense geo-strategic importance because of which it is said to be a playing ground for numerous secret agencies of the world’s powerful nations in order to pursue their interests. The game is being played in our fields, we as a future of Pakistan should know who these players are and what the score is.

According to prominent American security analyst, who is the author of “Monsoon: The Indian Ocean and the Future of American Power”   in 2010 which is about the Indian Ocean region and the future of energy supplies and national security in the 21st century. He said, “If the Mediterranean was the focal point of Global politics in twentieth century, we might think of the Indian ocean as a focal point of Global politics in twenty first century”. 

Don't be in despair

By Bader Al Hussain
Pakistan is blessed with fertile land, dynamic manpower and diversified landscape which ranges from world’s highest mountains in the north to the plains of Punjab, from sandy topography of Sindh and Baluchistan to the coastal areas. One also wonders an equal assortment in weather conditions which extends from negative 50 in the north to the positive 50 in the south.

As far as Pakistan’s natural resources are concerned, northern parts of Pakistan are shrouded by numerous varieties of minerals which includes peridot, aquamarine, topaz (various colours: violet and pink, golden and champagne), ruby, emerald, rare-earth minerals bastnaesite and xenotime, sphene, tourmaline, and many varieties and types of quartz.

Moreover, copper-gold reserves in Baluchistan which are initially estimated to be 250 billion dollars are also discovered. Baluchistan is rich in other minerals such as marble, coal, oil and gas etc. But the problem remains the prevailing law and order situation which could be made better by giving legitimate rights to the deprived and impoverished people of this largest province of Pakistan.

In addition to that, unearthing of coal from Thar is another prodigious breakthrough. According to Dr. Samar Mubarakmand, a distinguished nuclear scientist of Pakistan said at an occasion that besides producing cheaper electricity, 100 million barrel diesel and gas could be produced through Thar-coal which would be sufficient for 30 years. According to some sources, we can generate about 100,000 MW of electricity for 300 years.

Thar coal reserves have 175 billion tonnes of coal, which is equivalent to 618 billion barrels of crude oil recently informed by VC of The University of the Punjab. Following is the list of top 5 oil reserve countries of the world:
Country            Reserves (bbl)        Production/day (mbl)      Reserve life (yr)
Saudi Arabia          260                            8.8                                81
Canada                  179                            2.7                              182
Iran                      136                            3.9                                96
Iraq                      115                            3.7                                85
Kuwait                  99                                2.5                              108
175 billion tons of Thar according to Professor Dr Mujahid Kamran equal 618 billion barrels of crude oil.
This is more than twice if we compare it with oil reserves of KSA and equal to total oil reserves of top 4 countries.
If like KSA, we utilize about 10 million of it per day, it would suffice for more than 200 years. Not to forget other resources that Pakistan have when compared with KSA. For example, we have largest gold/copper ore deposits at Saindak (Baluchistan) dying to be exploited.
Under the barren mountains of Baluchistan and hot sands of Sindh, there is unlimited amount of oil and gas reserves not touched yet. And still further, we have furtile lands of Punjab, ready to feed a population twice as big as we are now, the best irrigation system (waiting for more water reservoirs to enrich it), and the best quality cotton and rice.

In Pakistan, about 63% of the population is under 25 years of age. In other words, Pakistan has energetic, indefatigable and young population. This segment has to shape the future of Pakistan. No doubt, Pakistan is going through tiring times but, on the bright side, the juvenescence of this country is getting ready and resilient to confront boldly the future challenges of the world which would be faster, complicated, informative and dynamic than today.

In a novel “Moths Smoke”, written by Mohsin Hamid, Phoenix is mentioned; Phoenix is a mythical bird having life cycle of 500 to 1000 years and at one point of time it burns and reborn. But in Moth’s Smoke Prof. Julius Superb writes in an article that after phoenix is re-created by the fire its funeral pyre, it could either emerge as a stronger creature in a young new body or transform into soulless shadow of its former being. Today, as in Pakistan the transition would be taking place from old lethargic and inept leaders to a new dynamic, energetic and more patriotic juvenile community, it is up to this very wedge of the population to make up this state which is failing in its duties, tasks and governance or to maintain the status quo.

 It is appropriately said by Imran Khan that Pakistan has touched its rock bottom and it is a time to rise and show to the world, what truly a great nation we are. Just as Ali Moeen Nawazish has made a world record it by scoring 21 As out of 23 subjects that he had opted in A’ levels and by following the suit Ibrahim Shahid also made world record by attaining 23 As in 24 subjects in the Cambridge examination. Moreover, there are many more examples could be quoted, followed and inspired from.

Hence, it is rightly said Pakistan is not a poor country but it is a poorly managed country.

The writer is currently a student at NBS (Nust Business School)

NRO and Aftermath of 2008 elections

By Bader Al Hussain

Today, undoubtedly Pakistan is going through abominable and atrocious times with its economy growing at the lowest rate in the region, terrorism engulfing major areas of Pakistan and the morale, dignity and respect of Pakistan armed forces is all-time low since 1971.

Under these tiring times 2008 elections has blessed this country with the most corrupt government since its inception. The government which came into power through NRO (National Reconciliation Ordinance) that was formulated by USA and some elements of establishment; hence, there should be no diffidence that the elections were engineered as 45.67% of the votes were bogus according to The Supreme court of Pakistan.

Thus, these fictitious elections were held with the purpose to elect subservient government, in which nearly every party is in power, to pursue Musharraf’s policies that were pro-American and perfidious to Pakistan.

As a result of this inept and lethargic government, law and order situation in the country has only gone worse as number of terrorists attacks are increasing year by year.  Some of these attacks are in response of drones’ attacks which has claimed numerous innocent lives, Prime minister on one hand term such actions as “counter-productive” but tacitly has granted USA a permission to carry on with these attacks.

According to Obama’s War, a book written by an American investigative journalist, wrote; “Kill the seniors,” Zardari said. “Collateral damage worries you Americans. It does not worry me.”; Reporting this startling statement. If our President says such words about killing of his fellow citizens by a foreign force then God knows what would happen to this country.

As far as economy is concerned, it is in nosedive situation since the People’s party (PPP) government has taken over. If we take a look at past three governments of PPP, economy had always in peril even during Bhutto’s era. But now it has gone bummer, the inflation rate has never been in double digit for three years consecutively, in a history of Pakistan. Moreover, Pakistan has borrowed more money in 3 years from international multilateral institutions, than it has since its inception. 

Public enterprises are being plundered by various incompetent cronies of the government. Recently an opinionated article was written by Harris Khalique in “The news”, which clearly shows the mockery of merit in state institutions. In addition to that, due to maladroit behavior towards state owned enterprises, today these corporations are occurring more than 300 billion loss to national treasury which is in a way bleeding the Pakistan’s economy.

In conclusion, after three years today, Pakistan does not have full time foreign minister. Other federal and state ministers are in utter state of torpor, marauding as much as possible, building stock of worriment for abutting government.

The writer is currently a student at NBS

Biased Against The Army?

By Muhammad Sannan

Americans came. Americans did their job. Americans went home, and all this while our army slept. That is what is being shouted around by the citizens of Pakistan, the analysis of the operation now colloquially known as the ‘Abbotabad Raid’. The aftermath of this military operation has had it all. Feelings of Joy on the end of terror, Spasms of angst on the great Martyrdom, Allegations of incompetence by the media, Some allegations of complicity by the same media, a lonely few cries proclaiming the breach of sovereignty. And the ultimate conclusion put up by our countrymen, announcing that for all its purpose, the army has come out as being practically useless. What were they being paid for?

It couldn’t even defend its own territory.

Fine. Lets discuss this. We’re saying that the ‘Army Walay’ couldn’t hold their own against an army, implying that they are utter losers, incapable of defending the land whose existence isn’t justified anymore. Normally, I would agree with this. But against which military were we (supposedly) trying to defend ourselves. The American Army. Yup, that’s right. The same army which is waging war on two fronts simultaneously and still has enough force left to monopolize UNSC and NATO. The same army, of which all the countries worldwide import equipment, including Pakistan. The same army which has a defense budget of more than 600$ Billion against Pakistan’s tiny 5$ Billion. I can simply go on and on about it….Against them, Yes, a failure means our army is incompetent!

Preposterous!

But still, most of our countrymen do think this way. And this is wrong in fundamentals.
And even worse is, our ‘youth’, the ultimate deliverers of Pakistanis from their drudgery, the personification of objectivity and liberalism, is taking it all in quite a similar way. And they have been demoralized because of it all, I fear, almost irreparably.

I remember the time in my university, right after the attacks. All of us, had suddenly started liking library a little more. Not for any academic purposes though, rather only to discuss the current news. Normally a dull place, It had become pretty active, with loud discussions going on everywhere. They were a charged few days, and I got to hear all sorts of post-action analysis by the students. And they weren’t optimistic.

' It’s a defeat ….', said one of my friends.

‘We have totally lost our honour…….’, said another.

Loud debates were going on all around me, and I remember myself thinking at that time, is this even an issue?  Is basing the performance of our military against that of Americans, a legitimate comparison?

I think I saw a pattern in those few days. Today, as we all happily blast away at the failures of the armed forces, the issue doesn’t even remain one of this particular incident. It is now about the thoughts pervading in the society. The mentality that the ‘Army’ is useless for all but property dealing.

 Regarding that, I asked another one of my friends, Muhammad Saad, about what he thinks about the competence of our Military. And again, I didn’t quite get the attitude I was looking for.

“When has Pakistan ever been able to defend this land? Take any statistics from war of 48' to the war on terror; we have always lost our land. If only our generals made some effort to resolve the conflicts within the army and the establishment. They can’t seem to get enough time from playing golf and buying plots in the Defense Society…..”

And he went on and on…..

“……As testified by the former Naval Rear Admiral, radicalization is on ever high with the armed forces. Many of the air force pilots refuse to fly their planes to Waziristan area because they "supposedly don’t want to kill their fellow innocent country men”. According to NY Times "Everyone seems to know ISI's job except the ISI……"

Alright.All I want to ask is, why are we even so fussed about the Army’s incompetence and not so much about the failures of the nation in general? Whatever has happened, be it the ever continuing terrorist activities, or the Military's internal conflict and politics, it is not a thing that should cause us all to be so finicky about the Army. The Military is an institution of this land, and just like the whole society that already has, it is going to be affected by the ongoing crisis as well. Of course there are going to be some shortcomings then. So, why are we still so critical in our judgments about the army? May be it is because we have always considered them to be the flawless, ever present reset-button that will set things straight after we have messed up all that we can. But this reset button is not functioning anymore. Load-shedding is the order of the day, and there is no electricity left in the military ‘machine’ to protect us from the consequences of our actions.

The thing to be understood is that we should take all the events surrounding the armed forces in an objective manner.  We complain about the military being unable to stop the suicide attacks? Just take a minute and imagine yourself tasked with stopping an anonymous looking terrorist among millions in (let's say) a market, or protecting the base under your command from a terrorist attack, not knowing when a person might emerge from the swarm of people and explode. It must be pretty straightforward right? NOT!

 Or is it that we complain about the army subjugating to Americans? Then, put yourself in Gen. Kiyani’s position. You are the protector of each and every citizen of Pakistan, with the fate of millions thrust in your hands. What would you do? Wage a blind war against the ‘infidels’ for daring to encroach on our airspace or try to prevent a conflict, and stop the utter annihilation of your countrymen.

Now, dont even think, as many will, that i am being an 'Army' lover zealously trying to defend it's actions, as i'm not. I am in no way trying to justify their failings. The fact that our military isn’t prepared for unconventional threats as the terrorists, doesn’t absolve them of the responsibility of protecting us, the Pakistani citizens. Nor is the inferiority of the army, a justification for them to continue bowing to their American masters. No matter how hard it may be to deal with these influences, a failure is a failure nonetheless. It is necessary for us, however, to take it all in a patient and rational manner, not letting our emotions cloud our thinking and putting it all in context. That's all i'm saying.

In the end, what is required is that we look at the performance of the Military in a manner, unburdened by biases. We should not let the Anti-Army hatred get the better of us. Instead, we can serve our energies in a positive way. By providing a solution to various command deficiencies in the military, or about other inefficiencies like the ones stated by Saad, the tendency of the army to focus more on their comforts rather than on the battlefield. But again, it is vitally important not to let the Anti-army bias creep in. Objective discussion and debate is the order of the day, and is the only way we can move forward.

                                                     The writer is currently a student at NBS

  

Erdogan, An Emerging Turkish Leader and Zardari

By Bader Al Hussain
Recep Tayyip Erdogan is a Turkish prime minster and a chairman of AK party (also called Justice and development party) which holds majority of seats in Grand National Assembly of Turkey since 2002.

As a teenager Erdogan used to sell lemonade sesame buns in the streets of Istanbul to earn extra money. He started his political career as a student activist by joining National Turkish Student Union (anti-communist action group) in Marmara University where he studied business administration. In 1976, he became head of Beyoglu youth branch of the Islamist National Salvation Party (MSP). Later in 1980’s military coup, Mr. Erdogan was among the follower’s of Erbakan whose welfare party which was dissolved in 1998 after coming into power because it was suspected of having Islamist agenda and accused of violating the principle of secularism embedded in sacred Turkish constitution.

  Moreover, Mr. Erdogan became the party’s Beyoglu district chair in 1984, and in 1985 he became the chair of the Istanbul city branch. He was elected to parliament in 1991, but barred from taking his seat. In 1994 local elections he was elected as a Mayor of Istanbul and initiated numerous development projects and solved most of the problems that the city was confronting.

In 1998, Welfare party of Erbakan was banned in Turkey after military coup. Mr. Erdogan became a constant speaker at the demonstrations held by his party colleagues of Welfare party.He was given a 10 month prison sentence (of which he served four) for reading a poem in Siirt in December 1997, which, under article 312/2 of the Turkish penal code was regarded as a violation of Kemalism by the judges. It included verses translated as "The mosques are our barracks, the domes our helmets, the minarets our bayonets and the faithful our soldiers...." The poem was a work by Ziya Gökalp, a pan-Turkish activist of the early 20th century. Mr. Erdogan has in his defense said that the poem had been approved by the education ministry to be published in textbooks.

With the conviction, Mr. Erdogan was forced to give up his mayoral position. The conviction also stipulated a political ban, which prevented him from participating in parliamentary elections. He completed his sentence on 24 July 1999.

In 2001, Mr. Erdogan established a moderated Justice and development Party (also known as A.K.P.) which won landslide victories by scoring 34%, 46.6% and 50% votes in 2001, 2007 and 2011 general elections respectively. Hence, showing vividly the increasing popularity of Mr. Erdogan’s A.K. party, this was due to political stability, economic growth and growing Turkey’s international stature.

During this period, Turkish economy was tripled, from 39^th largest economy it became 17^th biggest economy of the world and joined the elite club of G-20. As aspiration grows, Turkey is aiming towards becoming one of the top ten economies of the world in 2023 and second voluminous economy in Europe after Germany in 2050. Turkish exports which were merely 36 billion dollars in 2002, now sprang up to about 135 billion dollars approximately. Turkey has a large and growing automotive industry, which produced 1,147,110 motor vehicles in 2008, ranking as the 6th largest producer in Europe (behind the United Kingdom and above Italy) and the 15th largest producer in the world ranking as the 6th largest producer in Europe (behind the United Kingdom and above Italy) and the 15th largest producer in the world.

Furthermore, according to Semih Idiz, a columnist for the newspaper Milliyet and foreign policy specialist, Turkey under the current leadership of Mr. Erdogan is reaching out to the people rather than the establishment” of countries around the region, Mr. Idiz said. “It’s a new approach” to the challenges of the Arab Spring, he added. “Human rights and democracy remained in the background” under that approach, Mr. Idiz said. Now that is changing, he said, and Turkey is casting itself as a “champion of human rights and democracy” in the region.

Recently, youths from countries around the region visited Turkey after an invitation by the governing party to observe the election campaign and learn how to run a democratic election.

“It is this kind of ‘soft power’ engagement Turkey is trying to project,” said Ozgur Unluhisarcikli, director of the Ankara office of the German Marshall Fund of the United States. The policy is also about moving Turkey out of the shadow of the United States, its traditional ally, and making it a regional player on its own terms.

On the other side, Asif Ali Zardari who is the current president of Pakistan brought up in a wealthy family, and after graduating from the University which did not exist on the face of this earth, came into politics and joined Pakistan Peoples Party (PPP). Faced by the charges of corruption after every PPP government, he was sent to jail for about eight years.

Furthermore, he also earn the title of “Mr. 10 percent” which after becoming president in September 2008 changed to “Mr. 90 percent”. Embroiled with mega scandals such as Swiss bank black money, kick-backs from purchase of Agosta submarines etc., but such discoveries had a little impact on his voters.He came back in politics after the assassination of his spouse (Benazir Bhutto) who was at that time was PPP chairman and till that time served twice as Prime minister of Pakistan.  

Zardari’s political party came into politics through NRO deal which was formulated jointly by US and some elements of Pakistani establishment. As a result shame democracy came to power, after getting 24% votes in 2008 elections. In addition to that, later on 46% votes in this election were declared bogus by the Supreme Court.

During his Presidency, Pakistan’s economy went haywire accompanying with double digit inflation, stagnant growth in GDP and exports and rising unemployment. Pakistan went up among the most corrupt nations according to the transparency international Pakistan. With his popularity nose diving, he is struggling to save his government by allying to almost every opposition party in parliament even to those, to whom he accused of the murder of his wife. Moreover, he blatantly rejected most of supreme courts verdicts. 

In conclusion, Pakistani leaders should learn the lesson from their Turkish counterparts by making Turkey a role-model. Recep Tayyip Erdogan has changed the course of Turkey from lethargic secular state into more progressive welfare state.
The writer is currently a student at NBS

Stabilizing Macroeconomic Indicators

By Bader Al Hussain

Pakistan’s economy is being confronted by chronic current account and fiscal deficits for decades, the result of which is an increase in internal and external debt in order to mitigate the gap between the deficits.

Fiscal deficit is often financed by internal borrowing, international financial institutions like World Bank, and this deficit financing in return increases inflation and depreciates the rupee. Consequently the central bank, or in our case, The State Bank of Pakistan raises the nominal interest rates resulting in crowding out of private sector.

Whereas Balance of Payment deficit is being financed by loans from International multilateral financial institutions such as IMF (International Monetary Fund) and from foreign countries particularly from USA. In addition to that, depreciation of national currency increases the strain on Pakistan national budget. For example, currently Pakistan’s foreign debt stands at $59.5 dollars and an appreciation of dollar by one rupee would have incurred an additional burden of 60 billion rupees on national debt, which increases the amount allocated for debt servicing in the national budget. As a matter of fact, the rupee has been depreciated by Rs 26 against dollar from 2007 to 2011.

 The accumulated net impact of the imbalance in macroeconomic indicator is stagflation whereby the overall growth rate in GDP is stagnant and there is raising trend in inflation, furthermore increasing poverty and unemployment rate.

The systemic problem to the long-ranging miseries of the Pakistani economy is a low tax-to-GDP ratio, which is the lowest in the region below than 10 percent because of which government accrues huge deficits. Hence, tax net should broaden. It is an economic principle that private savings plus public savings i.e. (government expenditures less revenues) equals net exports. So, in order to have balance of payment surplus a country needs to have surplus budget which can only come through increase in revenues as Pakistan, due to some quite understandable reasons, cannot cut back or curtail raising expenditures.

Hence, in order to increase revenues, tax net need to be broadened and more untaxed sectors of an economy should be subject to taxation. For instance, there is no tax levied on the real state sector, therefore Pakistanis residing inside their country or abroad invest in it because of its lucrativeness, which according to some economist is dead investment. Government ought not to encourage such investments rather it should tax it because of numerous reasons. Predominate rationale includes that as such investments give rise to speculation thereby resulting in soaring property prices, which is detrimental industrial development. Moreover, such sectors do not produce any goods for the economy henceforth does not contribute sufficiently to the overall GDP and economic development. Likewise, other sector of an economy which includes agriculture and services needed to be exploited. Simultaneously, the quandary of tax evasion by the corporate and business sector of Pakistan should also be taken into account.

Side by side, the government needs to address predicament of “loss making public enterprises” that are draining about Rs 300-350 billion from national kitty annually. The solutions entail transparently privatizing such loss making entities and operate them under public-private partnership whereby administration is controlled by private sector and thorough monitoring is to be done by the government.

As far as private sector of Pakistanis concerned, policies should be formulated in order to encourage, facilitate and regulate investment particularly in agriculture and manufacturing sector. Additionally, government has to encourage indigeanous-ization of products imported from abroad particularly automobile parts. A large chunk of Pakistani imports is composed of crude oil in order to fuel power plants, vehicles etc.; efforts should be materialized in tapping alternative source of energy such as solar, wind and hydel power  plants and for powering vehicles research and development has to be intensified in the fields such as biodiesel.    

To conclude, it is possible for Pakistan to come out of the economic crises on its own without getting help from anywhere else in the world but there is need of strong and staunch political will to rectify the flawed policies made in favor of the political elite and landlords of Pakistan. The solution lies within Pakistan not outside it.    

 The writer is currently a student at NBS