PTN: Pakistan Tehreek Nizam

Dr. Shahzad Latif's Recent Writings

Pakistan: In need of Political, Economic & Social Revolution
by Shahzad Latif Ph.D. (Political Economist)

Ever since I have come to maturity I have been hearing that to root out corruption there is a big revolution coming to Pakistan.

Can anybody please tell me when is this revolution coming and who is bringing it?

I believe the time is now and every individual has to part-take in bringing this revolution. This has to be comprehensive. For all the nation’s shortcomings to be properly addressed, attention should be given to aspects of political, economic and social change.

Political Revolution:

One thing is certain -- as long we continue on this path of Parliamentary system of Democracy we will not see the change. Because this suits the corrupt politicians, based on a you scratch my back, and I scratch yours principle. Unfortunately, this particular system has proven to be such in many countries.

A formed government which has the majority of the votes in parliament (whether collusion or one party) tries to continue to remain in power by indulging itself in corrupt practices and ignoring corrupt actions of its supporters. Thus all involved in the government take advantage of the system. Also, under this system, the political parties fight over who supports whom, rather than concentrate on issues of the public.

Pakistan unfortunately is in a parliamentary democracy quagmire. I call this quagmire because unless the elected parliamentarians amend the constitution to change the system, real change will not happen.

However, many politicians will resist such an effort because it is akin to relinquishing their power. The only way to make these elected officials to bring such a change is through a Lawyers' Movement, like the action we experienced a couple of years ago. There is a need to mobilize students and journalists for this purpose as well.

This parliamentary system needs to be replaced by presidential system of democracy if we have to remain as a democratic country. See, in Pakistan let us be straight we can find at least one person who is honest and sincere, and who can lead the country to a better future. Also, that person can bring in people as ministers who have pain for the country and want to do something good for the country.

A presidential system has better check and balance built in. Most of the power rests with the president. This system is also closer to Islamic Caliphate way of government. President gets elected straight by the people. No way a person who puts his or her own personal interest ahead of the nation can attain such position. People can scrutinize the person being elected thoroughly, rather than an individual being “selected” as president by the parliamentarians who suits them.

Additionally, under this system, people also elect parliamentarians (or members of Mujlese Shura) as their representatives, therefore they can elect people who provide an effective check and balance as well as bring their regional issues to the forum.

Under presidential system President appoints ministers as per their expertise rather than against the support to form the government. There is no pressure on president to have unnecessarily huge cabinet, and thus carry superfluous financial burden.

Also, president must be the commander-in-chief of the Armed Forces thus diminishing the chances of perpetual martial law. This will also help control the wasteful defense budget. This system will curtail discretionary powers which tend to be corruptible.

At provincial level we should have structure similar to the federal level i.e; governorship and provincial parliament.

We have experienced the parliamentary system and its consequences over the past 63years. Now it is time to make a change. There is a need to start the movement to change the system.

Journalists, students and lawyers need to take the lead and force the parliamentarians amend the constitution to bring in presidential system of government in Pakistan.

Economical Revolution

We have to revert to quasi-socialist economic system for a short period of time. I see no other way to put a break on this unfortunate hyper inflationary vicious cycle we are experiencing.

As people know economic activity is controlled by monetary and fiscal policies. Fiscal policy is something controlled by the executive branch of government and monetary policy by the State Bank.

Fiscal policy in a nutshell is ideally based on balance of revenue and expenditure. It is OK to carry deficit finance in order to run economic developmental programs, however, in Pakistan the problem is two-edged sword. On the one hand, revenues are way low because of the lax tax laws as well as tax collection issues. On the other, there is corruption in spending. These factors result in a huge deficit and prompts relentless borrowing both domestically and internationally. Thereby we end up in a position where we have to take dictations from outside for our policies.

On the Monetary policy side, State Bank is supposed to control circulation of money by keeping the inflation situation in view. It is commonly understood that inflation is a cause of high demand. However, it is imperative to understand that in Pakistan's case inflation is not predominantly result of too much money circulation or in other words high demand. Our case unfortunately is totally opposite. In our case inflation is due to shortage of supply.

Our poor people cannot afford basic food, gas, electricity, CNG etc. How would they add to inflationary pressure?

State Bank of Pakistan tends to control inflation by increasing interest and other money controlling monetary policy instruments. In case of Pakistan money needs to be made available so that it is invested, basic necessities are made available and jobs are created.

We need to eliminate supply side frictions so that basic necessities of the poor masses are met.

We are an agrarian country. We need to take a hard look at our this sector. First we need to make sure our masses are fed, and then use the rest of the food to create jobs i.e; in food processing industry.

To start with we will need to highly subsidize the production factors involved in this sector i.e; seeds, fertilizer, technology, and extend the availability of water etc. Crops must be better managed, and directions and incentives should be given to farmers what to grow and when.

Think about it. If our masses are not properly fed then how productive can they be?

We need to build cold storages so that we can save food products until the new crop comes in. When the new crop is about to come then allow export of processed food stuff. We simply cannot afford to export foodstuff when we have hyper inflation at home due to low supply of food items. Disallow export of any raw materials. Only value added products i.e; textiles/garments, processed food (beyond domestic needs), leather goods, etc. must be allowed. We need to create jobs at home.

We must subsidize petrol/CNG/electricity/gas no matter how much we annoy i.e; IMF. High prices of these are hurting all of industry. We need to find immediate alternative ways to eliminate shortages of these.

We need to pay serious attention to encouraging research and innovation. Research and innovation are basic elements of economic development. New products must be manufactured and exported. Our exporters for the most part tend to compete amongst themselves so much that they end up working on minute margins. Thus they start exporting low quality goods.

There is a huge need of building infra-structure. This will help reduce inflation as it will help bring consumables to consumers fast. It'll help the redistribution of wealth as under-developed areas will develop. This will also reduce rural-to-urban area migration thus reduce pressure on major cities.

It is imperative to increase education budget to 20%. Improve condition of existing schools. Establish vocational schools where youngsters can learn and earn simultaneously because basic reason for high drop out rate is that poor parents need kids to work in order to supplement family income.

We must divide up lands and give to poor farmers. This will serve two purposes one poor farmers will be on their own and be able to earn decent living for their hard work. And secondly and very importantly, political clout of the landlords will be diminished.

How we are going to pay for all this if you ask. First we need to stop making wasteful projects and channel the money to the right things. Secondly, tax laws need to be revisited and must be enforced without prejudice to enhance tax collection.

Social Revolution:

There is a need to take concrete steps to eradicate current state of mind of the nation which is resulting in corruption at every level, including individual, bureaucratic and governmental.

After all the needs are met it is imperative that individuals focus on something good. And that good isvolunteerism.

Volunteerism teaches how to lead, how to follow, politeness, sense of service, ownership of the society & country and pride of being a citizen. It will help change wrong attitudes towards education, cleanliness, carelessness about others, most of all lack of respect for others' rights. It will help individuals stay busy with good and keep them away from things considered socially evil.

Volunteerism must start at the grass roots level like muhala (street), school and college. They could help keep the street clean, help educate people etc.

There are two ways to eliminate terrorism, corruption and criminal activities. The most importantly being the availability of jobs. People have to fulfill their hunger as it is the very basic need of a human being. Unfortunately, due to lack of income they follow the wrong way. We need to do everything humanly possible to create and provide jobs.

Secondly, we need to make tough laws, establish and enforce harsh punishments against corruption and other criminal activities. Hire and train young police personnel at very high salaries so that they do their job diligently and honestly.

All three aspects of revolution needs to be brought out simultaneously so that we can root out the common thinking where individuals opt out by simply saying “how will my individual change help when others in government and bureaucracy are corrupt”.

This revolution has to be unanimous and in a manner it is taken very seriously.

Keep in mind we have some good friends in the world. Once they see we are embarking on a plan to change ourselves for the better they will come forward and help us get through.

I think we have talked enough. Talk show hosts need to help bring new faces to the horizon. Tell the masses about them and discuss their ideas and show what they could do for their good.

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Does a Government based on Parliamentary system of Democracy has the Will and Power to Eradicate Corruption in Pakistan?

by Shahzad Latif Ph.D. (Political Economist)

When a minister in Pakistan, from an important collusion party is caught allegedly involved in corruption it creates a highly embarrassing situation for the government. He is let go in order to show that the government is doing everything possible to eradicate the nuisance of corruption from the country. This action of the government puts it in a very dire political situation.

However, is this removal because of government's will to eradicate corruption or simply to save itself from a bigger and potentially higher danger i.e; its collapse. When this episode happened the situation in Tunis was very fluid. Everybody was guessing that this sort of a situation could occur in Pakistan as well. In order to avoid this potentially bigger problem the government took this very delicate action.

Also, it was hoping that this action will keep the cover on other many corruption cases taking place behind the curtain.

When a political worker joins a party and works so hard for it, he has some dreams. One is to attain certain position at a level depending on time spent and work done for that party. He ultimately likes to become a minister. In a parliamentary system ministership is a trophy he attains when his party comes in power as a majority party or through a collusion.

When they attain such position(s) they do everything within their capacity and approach to get rewarded for all the work they have done for their party. They embezzle billions of ruppees.

Some borrow money and take it outside the country to invest. This is because they do not have the intention to pay back the money to the banks they borrowed from. Some get licenses for things illegally. Some get lands those are not supposed to be sold.

By many individuals who have been able to steal or borrow, billions have been stashed away in other countries. This parliamentary set up of government cannot take any action to have that money brought back because of two reasons; one being they have support from those individuals which is extremely important to stay in power, and secondly the people who are part of the government themselves are culprits of such actions.

Therefore the government has to look away from the corrupt actions of these individuals.

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An Article by Dr. Shahzad Latif reported by Associated Press of Pakistan and published in Business Recorder, Pakistan Observer, Lahore Observer & other newspapers:                                                                               Sep 12th, 2011

WASHINGTON: Ten years after Pakistan joined the fight against terrorism, its economy has been severely hurt by unrest emanating from the Afghan border and the US should now bolster American investment and trade access to help its partner regain growth momentum, a Pakistani economic expert in US, said.

At the same time, Pakistan needs to reform various sectors of the economy boldy to attract greater inflows of international investment, Dr. Shahzad Latif, a Chicago-based political economist, said.

"The United States continues to call Pakistan an important ally in the war on terror. For the US to prove that point, it is imperative that it does something concrete (economically) in return (for Pakistan's anti-terror efforts)," added the political economist.

Islamabad announced last week that economic losses the country has suffered in the decade - since 9/11 attacks on the US and subsequent American invasion of Afghanistan - have now climbed to $ 68 billion.

Dr Latif particularly wants Washington to open up its markets for Pakistani goods, especially agro-based products such as textiles - the mainstay of Pakistani exports.

The economist says he cannot fathom the lack of progress towards a preferrential trade initiative for Pakistan during the last ten years while some other countries in the region have had generous access to the US market for a long time.

Pakistan has not only served as the key route for Afghanistan-bound NATO and US supplies but also suffered immensely in the face of retaliatory terrorist bombings for its anti-militant campaigns, with 35000 deaths and resultant shrinking investment in several sectors.

Islamabad has captured and eliminated hundreds of al-Qaeda linked militants, who fled into its tribal areas from Afghanistan after the US-led forces toppled the Taliban government in Kabul in late 2001.

A study unveiled last week by Carnegie Endowment Fund for International Peace in Washington made a similar case for easing access for Pakistani textiles, reminding policy makers that employment generation cancels out appeal of violent extremists.

"Pakistani goods suffer from extremely high tariffs that make it difficult for Pakistan to compete with other low-income, textile-producing nations ----- protectionist interests in Congress have kept the United States from reducing tariffs---- lowering tariffs on Pakistani apparel and textiles would not be a panacea but it would help attract investments and spur economic growth in Pakistan," stresses the study entitled Stop Enabling Pakistan's Dangerous Dysfunction.

Dr Latif, for his part, notes that 80% of the political and social problems stem from economic issues.

"The US needs to target these economic problems of Pakistan and invest in industries through private companies such as guaranteed loans by US Import Export bank --- when people have jobs, they do not come under influence of miscreants," he said in reference to Washington's avowed commitment to assist economic uplift of Pakistanis.

On Pakistan putting its economic house in order, Dr. Latif says steps must be taken to curb inflation, develop human resource, encourage value added products, enhance production, and overcome energy crisis.

Copyright APP (Associated Press of Pakistan), 2011

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An Interview of Dr. Shahzad Latif by Associated Press of Pakistan and published in Business Recorder, Pakistan Observer, Sri-Lankan News & other newspapers:                                                                               Nov 21st, 2011

US asked to Assist Pakistan in Development of infrastructure


Washington—The United States, whose endeavor to bring peace and security to Afghanistan and larger South Asian region depends critically on Pakistan, should invest in developing infrastructure in the South Asian country, a political economist said.

“If Pakistan is to serve at the center of trade between South Asian countries and the Central Asian region, then the U.S. and its allies must devote resources to helping Islamabad step up the process of building roads, bridges and rail links as well as energy projects,” Dr Shahzad Latif said in an interview.

The Chicago-based economist cited President Dwight Eisenhower’s achievement in this respect, saying in 1930s the American leader envisioned and embarked on a plan to build roads stretching all across America thus connecting all of its cities and towns to each other.” This proved to be a major reason in making the United States an economic might.”

Besides, infrastructure facilities help bridge the divide between the rich and the rural underprivilged communities as the network gives everyone a big chance to transport their goods and intrdocuce them to the main market. Islamabad, he said, should present to its friends in the international community a plan to build road infrastructure that would establish new economic hubs and fuel both agricultural and industrial growth.

Dr Latif noted that a network of infrastructure will give economic opportunity to people and help reduce real estate inflation and also help subside migration pressures on urban areas. Besides, he said, having good and safe roads to tourist destinations boosts tourism economy. he added.

“It is very important to strategically plan the infrastructure keeping in view different factors such as ports, connection with international roads, availability of production input factors like agriculture, minerals, stones, and tourist spots in order to makes the most of resources.” —APP

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Comments on Indian Trade Policy

(Per invitation of US Congress Ways and Means Committee)

Ways and Means Committee
US Congress
Washington, DC
Honorable Members:
India with population of 1.15 Billion has the potential to be a huge market for US goods and services.
However, India is continuing to pursue its first Prime Minister Jawarherlal Nehru’s ideology of inward looking. While the rest of the world is moving towards free trade, India is holding on to its old ways. Unfortunately, India’s protective trade practices even this day and age, are hurting export opportunities for US companies.
Indian government has made it next to impossible to attain import licenses by businesses.
India’s hegemonic design culminating from Hindu-extremism, is certainly not good sign of its future policies either. One extreme example of this is blockading of neighbors’ water resources.
Exchange rate in respect to US Dollar has been artificially lowered to make imports expensive.
There are other covert trade barriers in place those are hurting exports of US companies to India.
Low minimum wages, lack of and un-enforced labor laws, child labor all are impetus to reduced imports. These not only keep domestic products in India cheaper than imports but also keep the consumption of imported goods at drastically reduced levels.
Additionally, these give unfair trade advantage to India in other markets.
Un-enforced intellectual property laws in India, are hurting US producers because India indiscreetly allows manufacturing of US brand name goods. One can see these goods being sold which are illegally manufactured in India.
As a Political Economist and a businessman, I recommend certain restrictions be placed against Indian imports until India takes concrete steps to relax its import policy towards US goods and services.
Respectfully submitted;
Dr. Shahzad Latif
Political Economist

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Suggested Steps to Eradicate Corruption

It is a common practice among political parties to condone corrupt acts of previous government to ensure there is no political instability during their tenure. This way there is continuity of democracy thence they can complete their five years of government. This period of stable governance bestows opportunities of such corruption on them as well.

Condoning of corruption is a heavy cost of democracy in Pakistan. It would be safe to assert that Pakistan has the most expensive democracy per capita in the world! Writer leaves a question for readers to ponder upon: Is it worth to have such an expensive democracy?

Our political system with multi-layered redundant governments, gives such corruption opportunities and helps hide these acts as well, to these political actors and their beloved bureaucrats.

It is simply amazing, politicians who have had meager means have become multi-billionaires and no one questions them about the source of all their wealth.

Similarly, bureaucrats whose salaries are known fact, drive around in expensive cars and live in big bungalows. For God’s sake that should be easy enough to figure out that this all came from corruption! Yet no one is there to question them.

Trillion of rupees have been looted by these politicians and bureaucrats in last few years alone, but no steps have been taken to retrieve such huge amount. National Accountability Bureau, essentially an arm of the government is expected to be neutral, fair and actually go after perpetrators of corruption. But can it be?

This situation gives others encouragement that they could indulge insuch corruptionand not be questioned let alone punished.

Why would businessmen and other income earners pay taxes? They know that a big percent of the money government collects is wasted and looted in corruption.

In writer’s view there are two kinds of corruption that prevails in Pakistan; financial and non-financial:

Non-financial corruption could be explained as position holders not owning their position meaning; not doing job properly or use their position to drive non-financial benefits such as giving jobs to people of their liking whether they are qualified or not, in other words indulge in nepotism.

On the other hand, financial corruption is when a position holder takes advantage of his position to make money which he is not supposed to.

Steps Needed to Drastically Reduce Corruption:

Like they say when there is a will there is a way. Here are certain stern steps need to be taken to eradicate this menace from our society.

---Reduce Size of Government by Changing the Structure: We have multi-level overlapping redundant government structure. This provides opportunities for corruption in many different levels, i.e; from top to bottom and many levels in between.These are further multiplied at provincial levels and local government levels.

This multi-level government structure sophisticatedly help the hiding of corruption by playing the blame game.

We are a poor country thus cannot afford such government structure.

Pakistan must adopt a simplistic hierarchical government structure proposed by the writer elsewhere, in order to ensure least chances of corruption and save funds so they can be usedon the betterment of poor masses.

---Eliminate Develop Funds: Develop funds are intended for developmental and social programs. However, the most of these funds are used for political gain or end up in personal pockets of MNAs or MPAs. These funds must be expended on the people in proportion of population by pertinent ministries instead of giving to members of the parliament.

---Disallow Discretionary Funds be expended by Politicians: These funds must be appropriated to department budgets rather than leaving on political leaders’ discretion to give when and how they will. Examples being announcing rewards to players who perform well in a certain sportor announcing help to flood victims, however, not promulgating a concrete policy and making funds available for sports teams and planning to control floods.

These kinds of announcements provide photo-ops and helps leaders with political point scoring. Similarly for floods, nation faces flood disaster every year but no planning is done and no money is spent on permanent solutions. This is a prime example of political corruption.

---Enforce Accountability: State should confiscate all the assets of politicians and big bureaucrats say from past 25years (randomly selected) which reflect beyond their filed income taxes. Let them prove (burden of proof be on them) that they made these assets through legitimate means and then get their assets redeemed. However, then state must question their taxes filed (whether in Pakistan or abroad) if their income reported does not reconcile with their claimed income.

----All Systems must be in Place: All systems starting from exposure, conviction and public punishment of corrupts should be in place and applied consistently. Exemplary punishment should be given to convicted corrupts so no one will consider doing even iota of corrupt act.

Laws should be enacted and fiercely enforced. If a foreign or domestic company offers kickbacks to politicians or bureaucrats then that company should be banned for life from participating in state business.

----All Institutions must be made Small, Strong and Independent: Every effort must be made to make institutions strong and independent. Reduce size of institutions but make them stronger. Judiciary, FBR, FIA, Police, etc. must be independent of political pressures. Bureaucracy should be replaced with technology as much as possible.

---Bring in Transparency by Extensive use of Technology: Transparency is one of the best ways to control if not totally eliminate corruption. If technology is used to show flow of finances intra and inter-departments then people cannot hide funds and use ways to get them in their pockets.

All the government departments should have a website with complete details including finances that department is handling.

Decision making must be computerized by point-system or Yes/No answers so decisions are not on total discretion of power that be. This will help control or eliminate nepotism as well as awarding of business to companies which do not qualify against kickbacks.

Organizational structure of all departments must be made public so unnecessary hiring is checked.

Use of extensive technology will help place internal controls within organizations.

---Watch & Tell and Whistle Blower Protection: Laws must be enacted that will give full protection to people who watch within an organization and tell what is going on. People should feel at ease to expose corrupt acts of their colleagues whether they are their bosses or subordinates.

---Give Public Access to Technology at grass root level: Public must be able to get their business done with the government using technology so they are not on the mercy of bureaucrats. Public should be able to access records of different departments and be able to question in case of being incorrect.

---Computerization of All Public Records: Computerized records cannot be easily manipulated. Bids on projects and auctioning of state owned assets should be put on department websites so public knows who bid what and who ended up buying the asset. Similarly, same procedure used be employed when purchasing goods or services.

----Departments e.g., NADRA & FBR, FIA, Police must be interconnected: Information sharing between departments makes it easy to check on records and makes it easy to catch miscreants.

----Journalist Duty: Journalists feel they have done their job by pin pointing corruption. However, they fail to follow through and ensure these corruption episodes are brought to justice. They must stick to their story and force departments or people in charge to take action.

---Social Engineering: Graph of corruption has gone up many folds over the past 50years of our nation’s history. In order to control it, we need to educate coming generations about corruption, what corruption does to society, how this damages the very fabric of the nation and work on ways to keep our coming generations from indulging in this nuisance.

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Democracy has become a cliché in Pakistan            

Politicians do not get tired of telling again and again in media how much they have done for “democracy.”

Some politicians have become “shaheed” and some proudly claim they have spent many months or years in prison for the sake of democracy yet poor are getting poorer, people are selling their kids, babies are dying! 

Politicians are backing each other to preserve democracy because its present form suits them. We have lost the essence of democracy i.e. democracy by the people and for the people. Alas! We don’t want this type of democracy.

Believe you me we’ll be better off under autocracy like the kind they have in Arabian Gulf countries rather than the current form of democracy we have. At least the general public’s basic needs like food, shelter, education and health needs are being met by those states.

Think in terms of psychologist Abraham Maslow’ theory of Self Actualization or Hierarchy of Needs. According to Maslow the basic need an individual has is of food and security/shelter. Self-respect and actualization come towards the last stages.

Under our democratic system the very basic needs of food and shelter are not being met. How can masses achieve the stages of self-respect and actualization?

That is perhaps the motto of our political parties that to keep the masses dwelled in the rat race of constant efforts to attain basic needs.

Two major parties in Pakistan under Charter of Democracy (COD) have a covert pact that they will do whatever necessary to back each other so that no third force, any reformist party or military comes in a position to take reign of government away from them. 

Everybody knows Zardari & company and Shareef & company have stashed away billions of dollars of corruption money but no one is doing anything or willing to do anything to bring the money back.

Billions of rupees are spent on political supporters to keep them as political party workers. They are given political bribery, on whose bases these parties win elections.

Even recent deal in name of economic development and cooperation with China, so called Shareefs are benefiting and also awarding close political associates. These deals are bringing Pakistan under further financial burden.

In a nut shell these politicians are worried about their own selves or their political carriers rather poor masses. 

Hundreds of poor children are dying because of malnutrition in their constituencies yet these politicians are playing the blame game instead of doing something about it. There is no proper nutritional or health support available for these down trodden people. Pakistan People Party whose slogan is “Provision of Food, Clothes & Shelter”, is itself not doing anything for their people. They have ruled Sind for past decades but they have not delivered what they were elected for.

Yet these politicians are proud to have democracy!

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PAKISTAN RELATIONS WITH INDIA: Accept the Status Quo or Dictate the Change

India has never accepted existence of Pakistan. It is interested to have continuous cold-war like situation by not resolving any outstanding issues between the two countries.

We feel content and at ease when India accepts our request to have leadership meeting. Hands are shaken and meetings at certain levels are agreed to. Nothing concrete comes out of these meetings. This has been going on for years.

All the issues are pending as is with resolution for none. India is not serious about resolution of issues like Kashmir, Sir Creek, Siachen, Distribution of Water etc.

India does not spare an opportunity to overtly or covertly hurt Pakistan economically and politically in international fora and try to isolate Pakistan.

How dare India accuse Pakistan of supporting terrorism while her leaders have openly admitted supporting separatist forces in East Pakistan (now Bangladesh) and recent and ongoing case of RAW funding and training political party and separatist forces in Pakistan.

President of Afghanistan Ashraf Ghani recently declared that RAW is involved in spreading unrest in Afghanistan and Pakistan. This is a concrete evidence of such illicit actions on part of RAW.

India is employing among other means of terrorism, water blockade and flooding strategically in order to ruin Pakistan’s agriculture.

We must bring India to comity of nations and make a case that India is directly involved in state terrorism within its own boundaries against Muslims and in other countries.

Pakistan must stop economic cooperation and cease imports from India immediately. We can, in order to get our issues resolved buy from other countries at little higher prices.

We must absolutely not agree to provide India access to Afghanistan through our land.

Pakistan must stop cultural exchange immediately and ban showing Indian movies in Pakistani cinemas. These movies are being used unfortunately successfully, to nullify two nation theory.

No Aman Ke Asha. It has not worked and will not work. Just a few individuals and organizations are driving benefits out of it.

Pakistan should unilaterally abrogate Simla agreement, as India has violated many agreements numerous times. And we must run strategic campaign among comity of nations to push United Nations to enforce its resolution on Kashmir.

If these steps are taken then I am certain India will come to its senses and get serious about resolving outstanding issues.

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Revolutions Do Not Take Place every Day. Imran Khan & Dr. Tahir ul Qadri must hold their Ground!
Our nation of about 200 million has been waiting for a revolution to get rid of corrupt political system for almost the time Pakistan came into being. Now that efforts are being made by two forces, we should support them wholeheartedly.
People who believe change will happen gradually, are wrong. Instead of problems of people being tackled properly corruption is rampant. Situation in Pakistan is going backwards instead of improving. Leaders who are multi-billionaires are paying taxes in thousands of rupees!  

It will take (like any real revolution does) bloodshed to bring about real and concrete change. Else the status quo will prevail with no end and Pakistan will continue to go down.
BoBoth Imran Khan and Dr. Tahir ul Qadri should join hands and come up with one united agenda and fight for it.
This agenda should be to change the political system to that of Presidential and devolution of provinces into division level. These both ideas go hand in hand as having simply Presidential system will not resolve all the issues we have.

 I understand Dr. Qadri has been using some of the ideas I presented four years ago. I take that as an acknowledgement. For details see Proposed Government Structure on
I propose the following course of action for this revolution;
1. Firmly negotiate an amendment to constitution for conversion to Presidential system and further amendment for devolution of provinces to divisional level governments.
2. Keep the assemblies working and Nawaz Sharif as Prime Minister during this process (Maximum time limit of 8months to hammer out details).
3. After these constitutional amendments have been made, elections should take place under a care-taker government for President between Imran Khan, Dr. Qadri, Nawaz Shareef, whoever People's Party nominates and others (since a limit cannot be set). Have a run off election if one individual does not attain a simple majority.
All parties involved should agree to and announce an agreement together on live TV transmission, so that the whole nation is the witness, then the dharnas should immediately be stopped.

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Dr. Tahir Qadri endorses Govt. Structure Plan proposed by Dr. Shahzad Latif, a Pakistani Political Economist based in Chicago, USA.

Dr. Latif proposed a comprehensive plan three years ago. See:
Dr. Latif, who resides in US but is a Pakistani citizen, considers adopting some of his ideas by Dr. Qadri as an endorsement. However, he said a reference would have been appropriate.
Dr. Latif proposed, simply changing Parliamentary system to Presidential system is not enough unless dissolution of Provinces to Divisional level takes place. This dissolution will help bring equal and uniform economic and social benefits to every Pakistani throughout the country.
This will help reduce the difference that exists between haves and have-nots. And will further eliminate the feelings of inequality in different parts of the country.
This proposed structure will bring government by the people-for the people closer to each individual.
Dr. Latif also suggests providing job opportunities to Pakistanis from one part of the country to the other so that lingual portions those have been established are diminished over the long term.
Dr. Latif believes fundamental changes to the constitution need to be made in order to ensure these changes are permanent and not left on the discretion of the government of the time.

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Economic remedy hinges on oil prices, political will

Evolution of oil prices 1987-2011 (average Bre...One of the major causes of the current global economic slump is higher price of the crude oil. Oil prices have doubled over the past five years.

 Gas (petrol) is proportionally a high cost production factor in millions of different products and also is used to bring the product to the consumer, affecting the final cost significantly.

 Currently, a major portion of disposable income is being expended towards buying gas (petrol), and buying other high-priced necessities, mainly because the oil prices have soared so high.

 During this time of global contraction, where incomes of people are considerably down this continuing oil prices trend is a major worry.

 Even governments are forced to not promulgate job-creating fiscal policies. Poor and developing countries particularly are at the rough end of the stick.

 The trend gives rise to fears that the world will spiral into stagflation where the prices will continue to rise while economies will become stagnant. Let us take United States as an example, where recent reports show increase in unemployment while it desperately needs to have an improved labor market.

 Higher inflation reduces the net worth of people causing even further reduction in economic activity as psychology comes into play.

 At this stage of supposed recovery, the US economy should be growing at the least rate of 3.5 to 4% but recently revised numbers show it hovering around 2%.  Several economists argue if the situation does not improve fast enough, the US economy might go into a double dip recession. This is also true with majority of economies around the globe including the fast-growing economies like China and Brazil.

 Though demand for petrol and petroleum products have doubled, the production cost of these have remained virtually unchanged.

 The  only beneficiaries of this global scenario appear to be  the group of oil producing and exporting countries and oil companies while people are being pushed into a vicious economic cycle.

 A crucial remedial step towards boosting the global economy could be for the OPEC  to voluntarily increase oil production to an equilibrium where prices subside to a level of prices in 2005.

 This global issue needs to be addressed rather swiftly. In absence of some quick measures, the world will continue to face double dip prospects.

 Another factor that could help the world in these tense times could be the role of major political players of the world towards resolution of longstanding disputes. The world powers should try to work out solutions in a peaceful manner but outside the media limelight. That would reduce the chances of an excuse for oil companies to artificially increase prices.

 The mix of economic downturns and festering political problems are hanging like a double-edged sword on peace prospects and economic recovery.

 A sustainable way out of trouble demands a long-term thinking based on the action that  tackles the issue of oil prices expertly and concurrently addresses political disputes deftly. The world needs inclusive reforms on both counts.

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US should invest, spur Pakistan trade in face of terror-related losses: Political Economist

pak_us_flagWASHINGTON: Ten years after Pakistan joined the fight against terrorism, its economy has been severely hurt by unrest emanating from the Afghan border and the US should now bolster American investment and trade access to help its partner regain growth momentum, a Pakistani-American economic expert said.

At the same time, Pakistan needs to reform various sectors of the economy boldly to attract greater inflows of international investment, Dr. Shahzad Latif, a Chicago-based economist, said.

"The United States continues to call Pakistan an important ally in the war on terror. For the US to prove that point, it is imperative that it does something concrete (economically) in return (for Pakistan's anti-terror efforts)," added the economist.

Islamabad announced last week that economic losses the country has suffered in the decade - since 9/11 attacks on the US and subsequent American invasion of Afghanistan - have now climbed to $ 68 billion.

Dr Latif particularly wants Washington to open up its markets for Pakistani goods, especially agro-based products such as textiles - the mainstay of Pakistani exports.

The economist says he cannot fathom the lack of progress towards a preferential trade initiative for Pakistan during the last ten years while some other countries in the region have had generous access to the US market for a long time.

Pakistan has not only served as the key route for Afghanistan-boundNATO and US supplies but also suffered immensely in the face of retaliatory terrorist bombings for its anti-militant campaigns, with 35000 deaths and resultant shrinking investment in several sectors.

Islamabad has captured and eliminated hundreds of al-Qaeda linked militants, who fled into its tribal areas fromAfghanistan after the US-led forces toppled the Taliban government in Kabul in late 2001.

A study unveiled last week by Carnegie Endowment Fund for International Peace in Washington made a similar case for easing access for Pakistani textiles, reminding policy makers that employment generation cancels out appeal of violent extremists.

"Pakistani goods suffer from extremely high tariffs that makeit difficult for Pakistan to compete with other low-income, textile-producing nations ----- protectionist interests in Congress have kept the United States from reducing tariffs---- lowering tariffs on Pakistani apparel and textiles would not be a panacea but it would help attract investments and spur economic growth in Pakistan," stresses the study entitled Stop Enabling Pakistan's Dangerous Dysfunction.

Dr Latif, for his part, notes that 80% of the political and social problems stem from economic issues.

"The US needs to target these economic problems of Pakistan and invest in industries through private companies such as guaranteed loans by US Import Export bank --- when people have jobs, they do not come under influence of miscreants," he said in reference to Washington's avowed commitment to assist economic uplift of Pakistanis.

On Pakistan putting its economic house in order, Latif says steps must be taken to curb inflation, develop human resource, encourage value added products, enhance production, and overcome energy crisis.

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Pakistan Knee Deep in Debt: Lessons to be Learned from Greece

John Adams, sixth President of United States once said; “There are two ways to conquer and enslave a country. One is by the sword. The other is by debt.”

If we reflect on our past we can say that our governments’ policies have driven Pakistan on the path of ultimate slavery to institutions such as IMF and big powers like USA.

Pakistan is under a huge debt and digging deeper into this hole day by day. As of now, Pakistan owes more than Rs.181,000billion!   This translates into more than debt of Rs.100,000 per person.  

Debt has doubled in last four years alone. Every month for last 30months one trillion Pak Rupees debt has increased. Current government has broken all records of borrowing and spending on wasteful projects.

The debt-to-gross domestic product (GDP) ratio stands at 66.4%. One of the highest in the world!

Good debt, which writer describes as borrowed money used in transparent investment in productive projects such as job creating industries, is fathomable. However, unfortunately 80% of the debt that Pakistan owes is either being used in projects the nation can live without or is being looted in corruption.

Mega projects such as Orange Train and Metro Bus perhaps bring some comfort to a few thousands of people out of 200 million estimated Pakistani population, however, it does not generate any economic activity, or create income source for millions who are unemployed.

Pakistan will have to service about $50billion between July to September of this year as the bill is maturing. It is a common talk among economic analysts that whether Pakistan will be able to pay this amount and not default.

Continuous borrowing will for sure increase the chances of default as it not only rises the debt amount but it also help raise the borrowing cost i.e; interest charged or discount rate. This is because higher debt to GDP ratio alarms the creditors and thus they charge higher interest to cover their risk.

As is out of Pakistan’s national income fifty percent goes towards debt servicing. The common practice in Pakistan is to borrow more to debt service the due debt.

This cycle is very alarming if the government puts some thought into this.

We are heading the same path where Greece found itself in 2014-15.

Writer spent a week in Greece during the economic crisis to experience firsthand the situation. There was hardly any economic activity. Businesses were closing. There was high unemployment. Imports were drastically cut down as the consumption affordability was down. Government was facing resistance in its austerity measures.

We in Pakistan should not think that we are immune to have Greece like circumstances. Our economic situation is unfortunately exactly same as it prevailed in Greece.

We are knee deep in debt. Industrial manufacturing is close to none. Unemployment has risen considerably over the past year or so. We have record low exports with high trade deficit.

With failing financial situation, exchange rate will deteriorate thus causing domestic prices to shoot up. Even our exports will get expensive, an unusual result of lower exchange rate, because many of our exports use imported materials such as chemicals, etc. Further, unemployment situation will exacerbate.

Overall bad business moral will tremendously hurt economic confidence and activity.

We do not have the room to implement austerity measures to save money because as is we hardly have any social services. If the government tries to cut any further it will bring people out on streets and create political and social chaos.

In case of Greece, European Union had to come to its rescue because of its own integral reasons. However, for Pakistan I do not see any institution or economic power jumping in to help it stay afloat.

I do see these powers taking advantage of the situation and try to get their way by forcing Pakistan to for example, curb its nuclear program and perhaps do away with it all together. This will further jeopardize our security situation.

Economic management is faulty. Managers of Pakistani economy need to look into the future and adjust their policies accordingly. Believe me there is not much of a time left. They need to act and rather act swiftly!

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TERRORISM in PAKISTAN: Heading towards a zero-sum result

We have to understand one thing Terrorism is here to stay until one of the parties win; that is extremists or the state of Pakistan as we know it with freedom of expression and choice of living our lives with liberty.

I seriously doubt there would be a win-win solution. It would end up to be a zero-sum game.

We have let the snake out by simply ignoring overtime what these extremists could do to the humanity.

They are there and will not be easy to overcome them because they don’t care of their lives and are willing & prepared to take as many lives with theirs.

Our leading a peaceful life and national economy is at stake.

Just condemning and mourning is not sufficient. As usual habitual ad-hocism is prevailing in dealing with terrorism as well. And this is very dangerous.

Short term steps will perhaps bring short term benefits however, will not reap long term conclusive desired results.

If at any stage army operation is slowed down or stopped, I am certain all these miscreants will come back and the terrorist activities unfortunately will increase. So along with this operation government needs to have a concrete long term policy not just superficial moves, to eradicate this menace for the long haul.

Unprecedented circumstances call for unprecedented steps. It warrants concerted effort on part of the government, army and the people to deal with them.

Pakistan needs to be a security state to protect its people. Also economic cost must be brought into calculations in reaching policy to eradicate extremism and terrorism for good.

Question is, how do you defend against a terrorist who is prepared and willing to kill himself along with his targets. The answer is by taking vigorous preemptive preventive measures and strategic steps.

Here are some suggestions;

---We need to have a national level police force in form of rangers. Police stations are a business. They cannot be counted on to effectively pursue terrorist and enforce laws of the land. They lack will, not properly equipped and trained. Police is always politicized by leaders to drive political benefits.

Terrorism is a national issue. We need to have a national level force to tackle such issue. Police functions (other than domestic and local laws enforcement), and Frontier Core must be inducted into national rangers in all cities with a common command and control.

Our intelligence agencies must work very closely with rangers to pursue terrorist in all cities, towns and villages to apprehend them. Because by the time intelligence reaches police and they plan to act against the terrorist, it is too late. Even with red alerts by security agencies these terrorists are successful in striking. That is what happened in Bacha Khan University and in Lahore Park, thus we lost so many young lives.

Army, intelligence agencies and national rangers must work closely and in coherence.

---The size of army should be increased by at least 50%. Army must be in total control of all borders and especially man the porous areas between Afghanistan and Pakistan to stop terrorist from sneaking in. Army should be trained better and provided updated weaponry and technology as well. Benefits of such a move will far out way the cost.

We must keep in mind we have threats on both east and west borders. Additionally, army is never redundant because we use army in my ways; rescuing and rehabilitation during floods, earthquakes etc.

---There should be only one internal intelligence agency in addition to ISI, that is to stop redundant work and reduce communication gap.

---Customs must be under control of rangers. Customs dept. is notoriously corrupt. They will not care to let terrorist bring in weapons or any harmful things into the country against few lakh rupees bribery.

---Immigration must be supervised by rangers to ensure only people with good intentions are let in the country. Strict laws for immigration must be enacted.

---National Cadet Core (NCC) program to train youngsters in colleges with military skills should be brought back. Those trained cadets should be drafted if needed.

---Licensing of ammunition must be controlled by rangers. There is no more room for culture of ammunition in northern areas. Rangers must immediately start a program to confiscate any ammunition out there. Politicians should not be able to issue licenses.

---Corruption of political parties who covertly support terrorist must be uncovered and all who are responsible must be brought to justice and given swift and exemplary punishment in military courts.

---We tend to politicize everything: The Whole Nation Plan or National Action Plan those political parties and army put together and agreed on is not working. We cannot let political parties play any province or language card. Enough is enough with politics.

---Pakistan armed forces must form a cohesive policy and work in close conjunction with Afghan and US forces to corner all the miscreants and deal with them appropriately. Pakistan must have open communication with Afghanistan to ensure there is no misunderstanding when there is a terrorist act on either side of the boarder.

---There should not be a distinction between a good or a bad Taliban. If we treat so called good Taliban preferentially then they will for sure play us when the time is appropriate for them. They both must be dealt with evenly.

---Pakistan must convince Afghanistan, USA and UN that India is not part of this conflict and must be stopped to further ignite the situation. India perpetrates Pathankot like incidents on herself to forcefully become part of the nexus to show herself as a victim of terrorism. Her only intention is to undermine Kashmir issue.

---Government tends to be hesitant in bringing up role of RAW in terrorism in the region. We must have a transparent policy towards India. India cannot be a friend(period) If they do show gesture it is for their own short or long term benefit. They want access through Pakistan to Afghanistan and other Central Asian countries. They want to be permanent member of UN Security Council. Pakistan government must never agree to these things because they will be very much counterproductive for us in resolving our issues of Kashmir and terrorism.

---Perpetual bad governance will definitely will not help. Redundant government structure is hurting us in fighting terrorism.

We have DPOs, DCOs, Commissioners, Mayors, Administrators, Home Secretaries, Chief Ministers, God knows what else. It is so difficult to pin point responsibility of anything anywhere. They are all there to pass the blame for bad job or lack of responsibility.

These layers just pass the buck! And nobody owns their job, duty and responsibility. We have to do away with these positions.

---Education in madrasahs needs complete overhaul to ensure students are part of main stream society.

---Social engineering is needed to stop brain-washing of people especially youngsters. Public service messages should be broadcast to educate true face of extremism. Also to get people involved to fight these miss-guided individuals.

---Social media must be monitored carefully to ensure miscreants do not use it to sway away youngsters from the right path. We should learn psychology of these terrorists and deal with them properly.

---It is ok to communicate with Talaban however with stick in hand policy.

In short, systemic changes must be made to deal with extremism and terrorism in order to bring about peace for the long haul.

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WE THE PEOPLE OF PAKISTAN: In Need to Make Fundamental Change & Reshaping of the Narrative

They say people get leaders they deserve. Looking at the leaders we have, what do you see?

Pakistanis have been saying for past 70years that we need change, a revolutionary change. However, have we taken concrete steps on that path?

The answer is vehemently, No!

Unfortunately, the things instead of improving are going backwards. The situation is bleak.

We celebrate Aug 14th, our independence day as if there is no tomorrow. However, if we get an opportunity to steal something from our beloved country we will not hesitate. We lack sincerity towards Pakistan. Exceptionism in reality is replacing nationalism.

Hardly a few percent pay income tax. Businessmen do everything possible to pay least amount of customs import duty.

Corruption is rampant from top to bottom. We cannot get our rights unless we bribe someone. Not just super rich, middle class or the poor, the whole nation’s attitude is corrupt. We must accept the reality.

“Shareef (noble) is one only who didn’t get a chance” (with exception of very few).

Education standard has gone down. Our teachers, who are supposed to be the builders of nation get their attendance registered while they remain at home. They rather teach in private tuition centers to make extra money.

Contractors who are awarded projects use substandard materials to cut cost so they can pocket more money. They are indifferent that it might kill a fellow citizens because of their bad work.

People in a very responsible institution are willing to issue National ID cards for money, to non-Pakistanis and on top who are terrorists.

Political parties rely on corruption to come in power. They use the money they loot using corrupt means to stay in power, by distributing this wealth amongst political workers and by feeding them “khapae”. Just analyze our state of mind; that we are willing to vote for and bring in power political leaders or political party who fed us good food!

We want to bring in power political party who gives us jobs in institutions where we do not have to work. It does not matter we ruin these state owned institutions in the process causing billions of rupees loss to Pakistan.

Cheating and lying has, unfortunately become our national trait. There is no such thing as thinking about integrity when it comes to illicit activities.

Because of this we as a nation has become so cynical that we don’t trust who we should.

Value of life has become just negligible. We are willing to ignore a patient and let him/her die rather than do away with our protocol. Our leaders say things those are simply unfathomable. “Kids die every day in Pakistan, so what a few die in Thar”. Simply incredible!

We suppress our conscience in order to do what our heart desires which in most cases is bad. Bad for the society and the country.

Unfortunately we are on top of many world indices such as level of corruption, uncleanliness, nation who pays the least tax, least law abiding etc.

Our attitudes and behaviors have rendered us weak and vulnerable. So much that others dictate us their terms and we find ourselves in situations that we do not have a choice but to abide by. We have become dependent on others.

It is our common rhetoric to blame others for everything we face. We must blame ourselves before others. We are turning ourselves into conspiracy theorists, rather than focus on our own faults and weaknesses.

We need to get out of self denial and must own our shortcomings and mistakes we the people of Pakistan have made over the past years and are constantly making.

We need to pause and think do we continue on this path or make fundamental and concrete change in ourselves, in our attitude towards our fellow countrymen and the country itself.  

If we induce change in ourselves we can eliminate extremism/terrorism, fix our economy and our social issues.

We need to make Pakistan our identity and ensure to actually celebrate its existence!

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When someone attains a position he makes a moral pact that he will do a job that is expected of him. However, the question is in our society does anyone actually keeps that promise?

Failure of performance at any level is a common denominator be it a leader governing the country or a worker sweeping the streets.

Unfortunately, all the efforts are made to attain a position so that the individual can get power or be able to get income rather than putting any effort towards the performance.

There are thousands of examples of lack of performance at all levels. However, it is not the writer’s intention to cite examples of such, but to indulge and to prove his thesis that it’s not the lack of education that is commonly thought of as the main cause of all issues in Pakistan but rather failure of ownership of one’s position.

It is the least common denominator of all the issues we are facing in Pakistan.

We can see millions of educated individuals earning handsome income but their job results are practically equivalent to zero. An individual who is educated enough to be hired as a teacher is shirking from his duties and producing students who are inadequately prepared to be a good citizen of the country. They could care less if they are destroying the generations to come.

A policeman who is there to protect and serve lacks the interest to do what he is expected of him. However, he will do that if he is paid under the table beyond his salary.

A bureaucrat who is made responsible to take up a project perhaps millions of dollars’ worth, will not care if all that money goes down the drain because the money did not come from his pocket, yet if opportunity knocks he will do everything to make money for himself from that project.

Politician will not perhaps mind to touch feet of his constituents when begging for votes at time of elections. However, if he does win, same constituents will hardly see the elected individual let alone he does anything positive for them.

People want to have titles such as President or Director of organizations, however their performance leaves much to be desired even if Pakistan as a country holds a great stake in their position or organization. People lack the drive to do something good and positive.

Everyone acts like a monarch from top to bottom because he knows there is no accountability if he does not perform at his job or not as per expectations.

Corruption that we are facing today is due to lack of such ownership in different departments. People lack the intention and drive to do justice to their position.

If everyone does his job properly and performs as his position calls for, then almost all of the problems Pakistan faces will vanish and she could progress economically and socially.

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Political Economy of Pakistan: A review  

Political economy management by simplistic definition means economic decision making keeping in view political benefits to the decision maker who is most likely a political actor and/or a bureaucrat on behalf of a political party.

Political economy decision making could be short term or long term, depending on how long such benefits need to be had and their effectiveness. Other form is indecision which also has such benefits and would be discussed as this topic is expanded below.

Political economy managers also manipulate figures to show health of economy and social trends to their desire. Some of the agencies inside or outside the country use data provided by the government to interpret how well the country is doing.

In Pakistan, political actors use political economy decision making very effectively to present themselves doing well and also to use these economic decisions for their personal or party advantage. They have unfortunately put the interest of Pakistan as a nation on back burner.

On top of this their ineptness and corruption has played a big role in keeping Pakistan from attaining its full potential. These factors also have created wide gap between haves and have-nots resulting in many political, economic and social issues such as rise of deprivation feelings in certain groups.

These groups (especially Baluch and muhajirs) must understand that these political leaders have not intentionally been depriving them. It is the ineptness of these leaders that has instilled this sense of deprivation in these groups. If you look overall, the whole nation has been deprived by these politicians. Punjabis themselves who are commonly blamed for this, lack jobs, basic necessities like clean water, health, proper sanitary etc.

Since these groups are in minority they feel they are being ignored intentionally and Punjabis are better off on their expense. Which was and is far from the truth. This claimed ignorance is based on fallacy.

It would be safe to assert that our political leaders have been “equal opportunity” depriver.

Political economy managers also tend to avoid difficult decision (or indecision) so they have smooth tenure of government. One prime example of political economy indecision is to not levy any tax on agriculture production. This is to protect interest of many political leaders as many of these are landlords owning agriculture land. This one sector alone if taxed fairly it can get Pakistan out of the debt.

Pakistan is a poor country and falls in 3rd world group. It must enhance its tax base to generate funds to use on development projects. In order to not deplete its vote bank politicians instead tend to rely on borrowing rather than enact and vigorously implement existing tax laws.

Money is being borrowed on record levels like there is no tomorrow and creating huge debt. If this debt is used in a right way to establish industries then it is understandable. However, one cannot see this money being invested in a manner that would be beneficial and productive for the long haul. In fact most of it is being looted in corruption.

Unemployment is very high. Inflation is high. Corruption is way up there!

All this debt instead of helping the economy will further exacerbate the economic and social issues of the country. There are an array of barriers, including poor power, lack of logistics infrastructure, high administrative burden, high interest rates, etc. that are making our manufacturers uncompetitive.

It is imperative to have a well thought-out manufacturing sector-led job creation strategy in place to fire up the country’s jobs market. Unfortunately, government’s concentration is on political strategic projects simply because those suit them.

This has been and will continue to widen the gap between haves and have-nots. This is pure and simple failure of political economy management.

Instead of having set policy to do something corrective for the long haul, for example plan in a way that floods do not bring destruction to poor masses every year, politicians rather have the opportunities to get in water with long boots, to have pictures taken showing themselves giving away tents and food to affected. They use this help as a tool to portray their party cares for them and woo votes. If politicians do something about the floods for the long haul and once for all, it’ll not help them politically on perpetual basis. This is political economy decision making at its worst!

Political economy decision making is time-sensitive also. Politicians make economic decision when it suits them the best.

Pakistani nation tends to have short term memory. Politicians know and use that to their advantage. Current prime minister recently announced that his government will establish 39hospitals. Alas! Why wait until next to last year to work on public health which is such a crucial sector? Think about it.

Also now government is guaranteeing that load shedding will be done with by 2018, the election year! One must understand our industry has hurt a great deal due to lack of electric power. However these politicians have the audacity to wait till year before last of elections to work on electricity projects.

To political economy manager his elect-ability is more important than plight of masses.

Even CPEC is somewhat delayed to have its inauguration towards the end of 2017, closer to election year. This way government can decorate another achievement award on its chest just before elections.

It is safe to say that these political economy managers think of themselves first rather than the nation.

Instead of having a long term strategy for education government rather give laptops because that helps them gain votes. This is pure form of political economy decision making to gain political benefit on the expense of nation’s treasury.

Our supply-side led inflation has caused high inflation and also our exports to be expensive. Our many political economy managers are also landlords and industrialists. One example that can be cited is of sugar. Many sugar mill owners are political leaders. By controlling production or put a check on supply it helps keep price artificially high. Thus help increase wealth for the political actors who own mills.

Stock market rise is not due to any current government’s extra ordinary steps. The increased confidence in stock market is due to betterment of army led peace and security situation especially in Karachi which is the hub of our economy. People have started to invest in companies whose products are in demand such as food, cement, power, etc. However, writer does not see any concrete change that would give stock market a reason to go up steadily. Remember, most of the moves in stock markets are speculative. And it would be safe to predict an unfortunate bubble-burst in short term, since writer sees stock market as artificially inflated to show how well the economy is doing.

Regional politics also plays a role in political economy decision making.

Government projects such as metro bus and orange train are concentrated in a very small area of the country where ruling party has better chance of getting votes and parliamentary seats. While these projects have eaten up very high valued investment these projects will not going to create any long term jobs. On top these projects will be continually subsidized at the expense of other people who will not be using these transportation means.

These projects are awarded without any tenders to benefit political supporters, yet another form of corruption. These projects drive good political economy benefits for these politicians.

One must understand that in our country only 2% of people hold about 80% of the wealth. Most of this wealth this 2% people are holding came from corruption. This money is either being held idle or has been illegally transferred overseas which could have been used on projects for the betterment of economy and social services level for the masses.

This corruption helps the governments under the prevailing political structure, because this looted money is used for political purposes such as elections. Our current political government structure provide political parties and leaders to hold positions at different redundant levels. It is not in the interest of any government in power to work effectively to eradicate corruption because they use this money to fund cronies to run in elections.

Unless new government structure is adopted (as proposed by writer elsewhere), Pakistan will not develop uniformly as it must and at pace it must.

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In Afghanistan-India nexus, Afghanistan is on the losing side  

(Published in Times of Islamabad)

When Soviet Union back in 1970s & ’80s occupied Afghanistan, Pakistan played a vital and ultimate role in having it liberated. Also, Pakistan let in millions of Afghan refugees thus over burdening its frail economy as well as deteriorating its security situation and social fabric.

India on the other hand was part of Soviet Union block during that time and essentially had kept quiet.

Now that Afghanistan needs Pakistan again, instead of cooperating and seeking help from Pakistan, it has sat in the lap of India. India cannot help Afghanistan in getting it out of this predicament it is facing currently rather most likely India will further push it into the quagmire.

Investing few millions of dollars by India perhaps will show Afghanistan that India is interested in its development but the case is totally opposite.

India in reality is not out to help Afghanistan, but to drive strategic benefit on expense of Afghanistan’s peace. India’s main target is Pakistan. It wants to use Afghanistan’s permeable boarders to perpetrate terrorism in Pakistan.

NDS (Afghan intelligence agency) is playing in the hands of RAW (Indian intelligence agency) and helping India in this cause. Indian consulates across the border from Pakistan play a vital role in training of miscreants and cross border terrorism within Pakistan. Capturing of Indian agents within Pakistan with malicious intent, carry clear evidence of such Indian intentions.

The reason India is so desperate that it is using terror as a weapon to destabilize Pakistan and the region as whole so it does not let Pakistan drive potential benefits of China Pakistan Economic Corridor (CPEC) and the regional economic cooperation which is on the cards. Additionally India wants to divert attention of the rest of the world from the atrocities it is perpetrating on Kashmiris, who are fighting for freedom from India for past 70years.

Afghanistan playing a part in this terror nexus and hurting Pakistan will prolong this war on terror in the region and hurt Afghanistan itself for the long haul as coming Afghan generations take up arms.

Pakistan is on the road to get into a regional cooperation with China, Russia and Iran. There is a very good chance other Central Asian countries will also join as there are great deal of economic benefits to be had by being part of this regional cooperation. If Afghanistan does not come to its senses then it will be isolated as India will be in coming years.

Afghanistan must foresee what future holds for this region and do away with helping terrorists perpetrate terror acts inside Pakistan and instead join hands for betterment of its own people.

Economic prosperity will only come when Afghanistan grabs such opportunities rather than by becoming a colony of India.

By making use of such economic opportunities Afghan government will create jobs thus Afghans will earn livelihood for their families and educate coming generations rather than have perpetual uneducated extremist generations.

Government of Pakistan and its foreign missions need to workup a steadfast approach to ensure powers that be are made aware of true intentions of India. They must be convinced that in order to have peace in the region and globally for that matter, Afghanistan must be taken out of grasp of India and forced to sit down with Pakistan to sort out bi-lateral differences.

On the other hand United States of America must understand that it cannot have its cake and eat it too. Either it needs to work wholeheartedly to bring peace in the region or collaborate with India for its own geo-politics.

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Perhaps a Surprise but not so Pleasant: The reality of Pakistani Economy *  

(Published in Kashmir Times)

We Pakistanis tend to rejoice when we hear news about Pakistan doing well in certain fields. Unfortunately commoners lack knowledge and ability to question the basic facts mentioned in reports those are so celebrated by the government.

It is given that Pakistan is a developing country. By definition a developing (a real process of being on the road to development) country must attain at least 7 to 7.5% GDP growth annually. Pakistan is lacklustering at 3 to 4.5% over the past 5years!

This performance leaves much to be desired.

Pakistan is an agrarian country or at least perceived to be one. Over the past decade in Pakistan which is the hub of agriculture no reforms have been implemented to stabilize let alone enhance agricultural production. Situation of farmers is real sad.

There is a huge agricultural and dairy market both domestically and internationally which is not being explored.

No land reforms have been done. No tax reforms on agriculture has been done. Cities are getting over crowded because of sad situation in rural areas. Farmers are leaving agriculture and moving to cities to find better economic opportunities. This exodus is causing cities to have problems of their own such as sanitation and social issues.

No export enhancement reforms have been done. Exports have dwindled down and trade deficit has sored to one of the highest levels in decades.

Stock market rise is not due to any current government’s extra ordinary steps. The increased confidence in stock market is due to betterment of army led peace and security situation especially in Karachi which is the hub of our economy. Most of the moves in stock markets are speculative. Some improvement in the stock market could be attributed to CPEC’s potential benefits.

Government is totally counting on CPEC. It is a good project, but it will take at least six to eight years before its fruits can be fully enjoyed! However, we should keep in mind the benefits will come if we plan better. Simply having road links between Gawader and China will not do us any good. Government needs to establish job-creating industries. Find new export markets.

We do need to produce products cheaper than China in order to stay safe from the effects of this corridor, else Chinese products will take over the domestic market and further ruin our industry or what is left of it.

Debt already is very high. This could have very drastic results in near future. Government is borrowing like there is no tomorrow both domestically and internationally creating crowding out effect for the public. Public cannot borrow at good rates and invest in job creating industries.

Government is continuing to sell bonds at high discount rates. Money borrowed is being used in non-developmental projects. Additionally, putting future of Pakistan at stake.

Corruption is rampant with no let. No concrete action is being taken to eradicate this menace. Money looted in corruption is being sent off shore in record levels thus depriving the potential projects those need funds so desperately.

Increasing oil prices will have further very negative effect on our competitiveness and exports. This along with continuous borrowing by the government will have drastic effect on balance of payments and budget deficit.

Electricity and gas situation has not improved much.

Inflation which writer believes in Pakistan is supply-driven rather than demand-driven as in many other countries, is not being dealt with properly. Manufacturing as well as service industry has rendered exports expensive because of overall inflation.

Foreign investment is minimal. Government’s performance has been poor in making Pakistan a welcoming country. For a developing country investment to GDP ratio should be around 25% however in Pakistan it is hovering around 15%. In order to enhance its industrial base government needs to take rigorous steps to invite and encourage both domestic and foreign direct investment.

No concrete steps have been taken to market our young labor. There is no training programs in place for new potential industries. Graduates coming out of colleges with BA and BS degree are no good unless they are trained for specific industries and equipped with skills.

Government needs to focus on value added industries. For example, Pakistan is positioned highly in milk producing countries. There are so many potential value-added products those could be produced for both domestic and foreign markets.

Since there is high unemployment government needs to encourage entrepreneurship. It should direct banks with certain guarantees to loan new start-up ideas.

Cost of production factors must be kept low so that items manufactured in Pakistan can be competitive.

In short there is a lot to be done in order to have a pleasant economic surprise.

* In response to an article by Tyler Cowen in Bloomberg

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