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Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts

Monday, 4 February 2013

Education is not just about how many As you score


The following blog was originally published in Tribune Blogs, 4th Feb, 2013.


Education is not just about how many As you score



Recently, the British Education Secretary announced that students starting their A’ levels in England from fall 2015, will return to the previous system of an “all or nothing” exam at the end of two years of study.

Eventually, these changes will not only impact exams in England, but will also trickle into tweaks to the manner in which Cambridge International Examinations and EdExcel International exams are organised. It is still not clear whether Wales and Northern Ireland will adopt these changes; Scotland has a separate system.
The current system of units or modules has been criticised for allowing examination retakes and grade inflation. Policy makers hope that a return to the two-year exam cycle will help make A’ levels more rigorous and help prepare students for higher education. Universities have criticised the quality of GCSE and A levels in the UK, rather than preparing students for higher education or vocational training; A’ levels train students to succeed in exams.
This is a criticism that may sound familiar in Pakistan.
Over the past fifteen years, the mushroom growth of tutoring and a proliferation of schools and colleges that judge their reputation and success on exam results, a vicious cycle has been created where students seem to appear in exams perpetually during their O’ and A’ levels. A perverted mix of peer pressure, aggressive advertising and devaluing education to a series of grades, ensures that each year students are nudging more and more towards sitting exams in a wider array of subjects.
Whether it is in the UK or Pakistan, tinkering with syllabuses and changing exam timetables is a swift and neat way to “reform education”.
Politicians love such interventions as these are easily implementable and success can be declared once the changes are made. However, the outcome of these changes is someone else’s headache.
Over the past couple of years, a lot has been made of abolishing foreign qualifications and implementing a uniform curriculum across the country. Such rhetoric means well, but like the changes to A’ levels announced in England today, such measures don’t reform – they just tinker with the status quo. Across the globe, the best educational systems cater for a devolved curriculum and provide greater focus on pre-school and primary education.
An example would be that of Finland, where the system caters on fewer exams, recommends little or no homework, and recruits teachers from amongst the best candidates. In Pakistan sadly, debate on the curriculum revolves around how much importance the chapter on jihad should have, whether illustrations of boys and girls playing together is Islamic or not, or whether the chief minister’s message to students should appear at the front or the back of the textbook
Adopting the Finnish system of education or any other “model” is still a very far off goal. A massive number of school age children do not attend school and our first goal should be to ensure that no child is deprived of education. However, for education to be “fixed” we require a change of attitude towards what we mean by an “education”.
This will have to start amongst the affluent, partly because education providers for lower income groups aim to emulate their affluent peers. If the schools at the top consider exam success as the gold standard of a quality education, the same attitude trickles down, shaping the attitudes of both schools and parents.
While examination success is indeed important, the appropriateness of what we are taught and how we are taught is also important. Some imperfect albeit illustrative examples include students who complete O’ and A’ levels, but then struggle to appear in Central Superior Services (CSS) exams due to the perception that they favour the pedagogy of matriculation and Faculty of Science (FSc) students. Students hoping to attend state-run medical schools are encouraged to complete FSc rather than A’ levels as it is believed that it provides better preparation for competitive admission tests.
It is here where an examination focused approach towards education fails us. Education should aim to widen choice and facilitate flexibility.
Students should not have to bear the costs of short-sighted educational reform choices; their choices from five years ago should not impact their higher education pursuits in the present.
We must appreciate that education reforms take a long time to implement, and that changes to exams schedules or efforts to unify curricula (as favoured by politicians) will have limited impact. Instead, investing in teachers, focusing on basic and primary education, and recognising that the learning requirements of each and every child is unique, will truly usher in a much needed reform.
Utopian idealism? Perhaps. But the first important step must be the recognition by policymakers, education providers and parents, that such concerns are worthy of consideration.

Tuesday, 27 March 2012

The Teach a Child School; standardize opportunity not exams

The Teach a Child School, Lahore, video was being shared around yesterday.




Much like the 1 Rupee school profiled in Karachi last year, this school also aims to empower its students, charging an honorific Rs 5 a month, so that students claim ownership over their experiences.

A more detailed profile of the school from its website:



Support:TAC: Teach A Child School System, Lahore, Pakistan (low-res version)

A lot of the points that come up in these sort of interventions and efforts has a lot to do with motivating students, building aspirations, involving teachers and parents in learning and developing an enabling environment. It really pulls the rug from beneath the single point agenda of all political debate on education; the now ubiquitous goal to "standardize" education.

One comment that is notable from the profile is above is about giving students from vulnerable backgrounds, similar opportunities as those from affluent backgrounds.

Now, we should do what we can to support such organizations. The students that come out of these schools will definitely have advantages amongst their peers who attend public schools. However, when we talk about doing our best to help students from poorer backgrounds in general, standardizing education and exams is the last of what should be our concern. This school may be offering better opportunities within its four walls, but what happens once they leave the school?

Whenever one profiles successful interventions in education, you see children accommodated, their needs analysed and provided for and their unique circumstances considered. If we had a standardized curriculum, that would ignore individual circumstances which would do more harm than good.

Supporting campaigns and NGOs is well and good. Granted these help, but actual change of any nature wont come until the children profiled above are not only able to access the same education as their affluent peers, but are able to access support such as tutoring, admission test preparation, work placements and internships, guidance for university application etc.

Its the inequality in opportunity that needs to be reduced, and access to opportunity "standardised". 

In the mean time, we should all support the Teach a Child School and similar initiatives. But also remember that putting kids in brick and mortar schools, and giving them uniforms to wear will help, however, wider society is very unequal; while these kids make their way through school, those at the top are increasing the gap at an accelerating rate.

And just to be clear dumbing everyone down in the name of equality is not the solution either! 

Wednesday, 1 February 2012

Energy prices...let them rise

The price of oil has gone up again.


Predictably comments of how this is "democracies revenge" on the hapless people of Pakistan, and how Zardari's corruption means we pay more at the pump.


What is frustrating is the expectation that, "if there is a shortage of gas, alteast it should be cheaper". Every few days, some article or the other comes out where the author writes something along the lines that:


"if it wasnt enough that the people of Pakistan are suffering from electricity and gas shortages, they will be shocked to hear that the prices of the oil and gas are on the rise!"


A good example is the following:


The apathy and indifference of the members of the federal cabinet is evident from the fact that none of them paid any heed to the woes of the people who have been massively burdened with the hike in the prices of petroleum products and the imposition of a 10 percent cess on the compressed natural gas (CNG). Minister of State for Human Resource Development Shaikh Waqas Akram made a point that the increase in POL prices was too much, but no one bothered to discuss or raise the issue and all, including the prime minister, kept mum and the meeting was called off.


For one that is quite judgemental, and the article lacks facts as to what exactly was going on in the meeting. But more to the point, what does "POL prices was too much" mean exactly? What exactly is acceptable increase? And why does everyone believe that its the government responsibility to make prices lower? Who does it benefit? 


Have less therefore cheaper? 


Now it doesn't seem to make any sense to alot of people, but it makes perfect sense to me. If a commodity is increasingly scarce its price will increase. Why does anyone expect it to fall?


The price of oil is determined by international market forces. Not free of course: OPEC tries to influence oil prices by manipulating price. Demand from China is a factor affecting energy prices. And recently, the increasingly aggressive tone between Iran and the US, and the Iranian threat to blockade the Straits of Hormuz, has contributed to rising oil prices. Then there are issues of limited refinery capacity that also contributes to higher prices.


Yes, we can argue that petroleum products are heavily taxed. Should the government lower the tax when oil prices increase to give the masses "relief"?


Spoilt silly


The problem with our consumption behaviour is that oil pricing uptil the end of the Musharaf era spoilt us badly. We became used to cheap petrol and diesel. Both were heavily subsidised.


The subsidy on petrol was plainly criminal. It resulted in a massive transfer of wealth from the have nots, to the haves. During 2002-2007, when banks were offering cars on two photocopies of an ID card and a utility bill, it was the urban, salaried class that benefited. The richer you were, the bigger your car, the more extravagant the use. And it was these people who went around filling there tanks with subsidised petrol. Who footed the bill? The taxpayer, and they continue to do so. The debt that was accumulated during this period to keep energy prices at bay in the lead up to the early 2008 elections, still remain.


The burden of that debt and the inflation that increased government borrowing caused hit the poorest hardest. The costs of inflation are dis-proportionetly felt by those on low incomes. While the well off, those people who had taken out consumer goods, including cars on finance and debt, experienced a decline in real terms, as inflations benefits debtors rather than creditors. Further, a salaried individual is more likely to enjoy annual increments in wages, not equal to, but in line with inflationary expectations. The small man is screwed both ways.


Alot of hot air


History will probably judge our move towards CNG as a major disaster. At most it should have been a source of fuel for public transport to cut down its cost. Again, its criminal to see brand new cars converted to CNG. If you can afford to own a Honda Civic or Toyota Corolla, you can afford to pay for petrol. After a decade of cheap CNG, people dont expect its price to rise. Or when it rises they expect the difference between petrol and gas prices to remain the same. However, that is neither sustainable, nor desirable. Households on low income which cant afford UPS's and Generators, should at least be able to cook and heat there homes. Instead, the CNG Pump Owners lobby not only wants the price to fall and taxes removed, but a reduction in gas load shedding as well. Why should those with the least, have to bear the cost for some guy who can afford to buy his/her own car, but prefers to put gas in it?


Subsidies are generally a bad idea. They encourage over production and/or over consumption. It is also very difficult to make sure that those who the subsidy intends to benefit, actually benefit. Worst off, the economics of energy pricing have been co-opted by political rhetoric.


Every energy price increase is met with accusations of corruption and how democracy has brought us the gift of higher petrol/diesel prices.


The other day I read a comment on the Express Tribune which something something along the lines:


"Even when global oil prices were $142 a barrel, petrol in Pakistan was cheaper than it is now"


Well no surprises there, at that time the Musharaf government maintained the subsidy, by stopping oil prices from rising. It didnt help win him the elections, but it did insure that the new government was setup for failure.


Promises, promises, promises


The worst thing now is for opposition parties to promise lower energy prices. Its high time they all stuffed the rhetoric and say whats needed. Energy prices are going to keep on rising. What they should be focusing on, rather than promising to throw untold, 100s of billions of rupees on subsidies,  is on incentivising energy audits, improved insulation and building design, conservation etc. Car producers in Pakistan, who year on year demand tariffs to protect them from foreign competition, need to spurned towards energy efficient engines and design.


Thar coal, more gas in Baluchistan etc etc, are all mirages offered as possible future solutions. They are no closer to reality than they were a few years ago. No one is going to give us free oil, and its economic suicide to expect the state to foot the bill. Its also corrupt on our part to expect subsidies, the burden of which is borne by those who hardly consumer any of it. The poorest and most vulnerable, must and should be protected from inflationary pressure. However, we need to draw a line somewhere. The guy sitting in his brand new Honda Civic, being interviewed on GEO News on how the government should cut petrol prices doesn't deserve a poor states economic protection.


So gear up for higher prices, and continue to blame corruption, Zardari, democracy, PPP for our ills, just do so while economizing energy use in your surroundings.



Saturday, 7 January 2012

To franchise or disenfranchise overseas Pakistani's?


Overseas Pakistanis have been coming under some stick recently. The Election Commissions recent decision that dual nationals will not be allowed to contest the upcoming elections has been challenged in the Supreme Court.

The current PPP government first suggested allowing overseas Pakistanis to caste votes a couple of years ago and a consultation process was initiated. Recently, the PTI moved a petition in the Supreme Court, calling on it to allow overseas Pakistanis to vote.

So on the one hand, votes count but standing in the same elections is to be allowed.

A question of patriotism

Living overseas is enough for ones patriotism to be questioned. Having a second nationality doesn’t help ones cause either. Some people say that,

if you want to join politics, and serve Pakistan then giving up a second passport is a small thing to ask”

Perhaps, but what happens if you stand in elections and don’t win? No one is going to compensate you if one fails. At the same time its also a small thing to ask for voters of a constituency not to vote for such an individual if they consider his or her second nationality unappealing. 

Fast track corruption

The second line of argument goes something like:

All these dual nationals can pack up and leave whenever they like. They line their pockets and leave”

Does that mean that people who have only Pakistani nationality are less corrupt? Or conversely, does this mean that overseas Pakistanis, because they presumably have the opportunity to dabble in corruption are necessarily corrupt? Essentially, they are being accused of being petty opportunists.

The second argument that they can pack up and leave is the one that I find most frustrating. Yes, I guess, people with second passports can leave when they like. But then again, politicians in Pakistan , given their social and economic status in the country are also quite mobile internationally. To think that the colour of their passport effects their mobility to the same degree as the average Pakistani is a gross exaggeration.

If people are behaving in a corrupt manner, they do so because they are confident that they can get away with it. They weigh the pros and cons and realise that the benefits of behaving in a corrupt manner is greater than the perceived risk or costs. The nationality of the individual is inconsequential to the extent that a foreign passport does not give an individual immunity when prosecuted for a crime. The fact that a Pakistani, overseas Pakistani or dual national knows that he or she can get away with a crime in the first place determines his or her ability to indulge in illegal activity. A second passport may be a convenience, however, its the system that is at fault, not the individual.

Men and women of a lesser God

Now when it comes to overseas Pakistanis, not all overseas Pakistanis are equal.

The vast majority constitute Pakistani labourers, who toil away in the Gulf, North Africa and to a lesser degree in places such as Malaysia. Now these workers, who primarily leave Pakistan in search of work, save a high propensity of their income. In doing so, they remit most of it. Thankfully, due to their efforts over the past few years, Pakistan has managed to contain its Current Account deficit given the massive inflows from such workers.

On the flip side, these overseas Pakistanis are the ones that are conveniently ignored. Before our grand Arab masters, the Pakistani state is unable or unwilling to voice any concern over the treatment that is meted out to them. For example, the seizing of labourers passports in the Gulf is a common practise which breaks the International Covenant on Civil and Political Rights. The city state of Dubai, which effectively went bankrupt a year and a half ago, saw many managers and business owners leave the city in a rush. In doing so, they left without returning passports to labourers or clearing their wages. What did the government of Pakistan offer to such workers? Nothing. The BBC's Panorama looks at migrant workers in the UAE:






I dont even blame the government for such inaction. Dubai and the wider Gulf region has become a playground for the upper-middle and upper economic class of the country. The same people who buy second homes, work in managerial positions and enjoy vacations in these cities have no qualms about enjoying the fruits of the mass, systematic exploitation of their fellow countrymen in a foreign land, while complaining about corruption and injustice in Pakistan itself.

Return to Pakistan, and its these same labourers who are welcomed by rent seeking customs and immigration officials. When these same Pakistanis leave the country, they have to pay of immigration officials due to the “protector law”.

Most people think that all the people working in the Gulf are happy to do so, should consider that a few years ago the UAE government launched a scheme where they offered free tickets to workers who wanted to leave. The number of people who came forward was so large, that they had to eventually stop the entire project due to its cost and the poor press it received. If everything was so hunky dory the government of the UAE wouldn’t have paid the founder of Blackwater to hire and train mercenaries from Columbia, Angola, Namibia and South Africa as a rapid reaction force to put down any labour protests.

No, these overseas Pakistanis, have little hope of support from their host governments or their governments, but nevertheless the Pakistani state is grateful for their remittances. Effectively, the savings of poor labourers overseas, cross subsidises the tax dodging opulence of the Pakistani upper class, for without their remittances, the Pakistani economy would be in a much, much worse state at present.

Giving these Pakistanis the right to vote is little consolation given the injustice and exploitation they face. However, when we talk about overseas Pakistanis, we are not thinking about the poor labourers. Instead, we are looking at those living in the West. For they, supposedly have sold their souls to a foreign master. However, the Pakistani state selling Pakistanis into second class citizenship in the Arab world is well...just brotherly relations. 

The “Western” Pakistanis

No, the problems and the question of loyalty really comes up when we talk about Pakistanis who have dual nationality with Western countries. Pakistani-Brits, Pakistani-Americans etc. Another point that Pakistani commentator like to take up over and over again is to quote the American oath of allegiance. In all its glory:

I hereby declare, on oath, that I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty of whom or which I have heretofore been a subject or citizen; that I will support and defend the Constitution and laws of the United States of America against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I will bear arms on behalf of the United States when required by the law; that I will perform noncombatant service in the Armed Forces of the United States when required by the law; that I will perform work of national importance under civilian direction when required by the law; and that I take this obligation freely without any mental reservation or purpose of evasion; so help me God.

People complain that how can someone who has taken this oath be patriotic towards or have Pakistan's best interest at heart? That is utter nonsense. We live in a globalised world where people move not because of changing nationalistic sentiments, but because of economic opportunity or familial pressure. If someone takes this oath that does not make them any more American or any less Pakistani. If you believe that this is infact the case, then you should also believe that when a girl marries a boy and moves to her boys household, her love for her parents and siblings is compromised. You then, should also believe that if a non-Muslim, in school in Pakistan, happens to sit through an Urdu class and comes across a chapter related to Islam and reads through it, he or she will become more Muslim and his or her faith in their religion is also compromised.

Why do British-Pakistanis support Pakistan in a England vs. Pakistan cricket match? I am sure they have sand God Save the Queen at some point in their life or attended a civics class in school?

I am not saying that overseas Pakistanis will always be patriotic towards Pakistan. I am sure they are now third or even fourth generation British or American Pakistanis, who probably have no link with Pakistan at all and no attachment. However, what I do disagree with are the nonsensical arguments that are made to disenfranchise overseas Pakistanis. 

Citizenship for another age

The primary function of oaths and citizenship was to make sure that they were always men that could be called upon to fight a war if need be. Through conscription, individuals could be drafted into military service. However, Pakistan doesn’t draft citizens into the military. And we are not fighting battles for local chieftains (or are we?).

The issue here isn't about the colour of ones passport.

To move beyond questioning ones patriotism, same sensible rules can be established for overseas Pakistanis who may want to participate in elections.

More important than citizenship is residency. For example, the UK along with many EU countries allow non-EU citizens to vote in local or city elections. An overseas Pakistani may be asked to reside in Pakistan for a qualifying period before being allowed to stand for office. He or she should make a declaration of income and assets, and if liable show a history of paying taxes in Pakistan.

The issue here is not about excluding individuals from running from office. The issue here is that constituents are being deprived of choice on the ballot. If the voters of X, Y or Z want to vote for an overseas Pakistani that’s their choice. What however, needs to be discouraged is for potential candidates not declaring dual citizenship, not because there is something wrong in having a second passport, but because that may raise questions on what else he or she is hiding.

In a future post I hope to talk about the economics of overseas Pakistanis and the role immigration plays in supporting our economy. However, in terms of politics, disenfranchising individuals should not be our goal, to serve some warped understanding of patriotism. On the one hand lobbying for overseas Pakistanis to vote, while denying them the right to stand in the same elections is setting dual standards and denies voters a full spectrum of choice.

Monday, 2 January 2012

No civil military balance, without divesting military commercial interests


A poor attempt at a balancing act

Asma Jahangir has spoken on the issue of military-civil imbalance today. Quite rightly, any deference to the words of General Kayani and Pasha that compromises individual rights doesn't say much for either the supremacy of the law, or a “free judiciary”.

Back in May, right after the Abbottabad raid, a lot of people quite excitedly, heralded this as a unfortunate, but at the same time fortunate opportunity to put the military in its place. Get it back into the confines of its constitutional mandate. Then came the in camera briefing in the National Assembly, but after a few weeks it was obvious that the military was running the show.

The PPP government started off by emphasising its determination to guide Pakistan's security and foreign policy. Zardari spoke of a grand free trade area and our then foreign minister SMQ smiled sheepishly with Hillary Clinton as Kayani looked on from the margins. Alot of choreographing, but Zardari's ideas didn't come to much and SMQ is well, batting for the other team now. Even then, few believed that the Army had relinquished influence over foreign and security affairs. Effectively, it could exercise its veto over civilian decisions if and when it wanted.

In the recent past, one has to be quite naive to still believe that its Zardari who shapes Pakistan's foreign policy. Unlike most PTI supporters and reactionary critics, its not as if Zardari allowed drone strikes or handed over Pakistani airbases to US control. Neither was it Zardari who extra-judicially handed over foreign and Pakistani citizens to the US without due process who later ended up in Bagram, Guantanamo etc. And before I forget, the most hated of documents, the infamous NRO was facilitated and negotiated by our very own COAS General Kayani, however, being in khaki he's above criticism or responsibility.

That said, whenever the issue of civil-military relations come up and people talk about balancing it, a lot of emphasis is placed on politicians doing the “right” thing and exercising their mandate and forcing the military to relent before there constitutional superiority. That's why the mere mention of the possibility of the PM sacking Kayani and Pasha unleashed a storm. Mind you that storm was much louder in regards to a possible decision that a sitting PM might which is his prerogative and constitutional, while a coup, orchestrated by the military unleashes jubilation and a fiscal stimulus for mathai shops.

The biggest slice of the cake

I would argue that any balance between the civilian side and the military side of the state can only be achieved if the military economic influence is decreased. The military through its various arms has its fingers in every commercial pie. Resources are skewed favourably in the hands of those in khaki and their institutions; for the industrial, capitalist class knows who to deal with if they want to get things done.

Now the military property empire is a ubiquitous part of Pakistani urban life. The nexus between Bahria Town-HRL-DHA for a few is “national progress” but for those forcibly displaced, the state that misses out on tax revenues, the banks that are forced to offer concessional loans and later write them off, the abrogation of the constitution within these areas; the costs are massive and they keep on piling up. The following DAWN Reporter Episodes paint an ugly picture of the cartel that is now the military-commercial interest which is a law unto itself. (Thanks to @shahidsaaed)



You can tick through a list of industries in Pakistan, and one way or the other, either through outright ownership or in partnership the military is a major stakeholder. Nothing comes of cases of corruptions against generals, so there is no surprise that ex-military types pack commercial organisations. Capitalists vote with their feet, and it shouldn't come as a surprise to anyone that they vote for the team with the bigger stick.

Incentives in action

Now politicians are a fragmented and competitive group. Sure, they make poor decisions and may be corrupt, however, they act in their self interest, where ever that might take them. Given the might of the military, its monopoly over the use of force, coupled with its huge economic clout, a fragmented group of politicians have no chance to exercise their will over the military. Instead, they are co-opted by the military to do their bidding, and why wouldn't they? 

Now the next obvious question is: Do we want these incompetent civilians dictating policy to the military?

The answer to that is yes. The simple reason is this: Given Zardari's 11% approval rating, the dismal approval rating of the PPP, and overall image of politicians as incompetent, we can be assured that every decision they take is the talk of the evening news cycle. Columns are written, opinions are formed, news is shared and retweeted.

However, decisions taken by the military fall under two categories. Either the military makes a decision, and then civilians are made to face the negative fall out of it. Or the military makes decisions and no one is the wiser. When questioned, you are not offered a policy outline. Instead you get a long emotive speech about sacrifices and bravery which somehow qualifies someone to make decisions on a nations foreign policy or other associated matter that is not even that persons job.

Do as the Chinese do

In China the Divestiture Act of 1998 banned all the commercial activities of the People’s Liberation Army (PLA). Like their Pakistani counterparts, the PLA had invested itself in banks, hotels, factories, property developments, retailing etc. During the Tienanmen uprising in 1989, China came dangerously close to a military coup. As the vanguard of the revolution the PLA, was a central part of the Communist Party and the Party heavily invested in the PLA. The PLA eventually sided with the pulitburo and the Tienanmen protesters, and protesters across the country were crushed. These events helped accelerate the PLA's independence from CCP control and widen its economic activities. By the mid-1990s as China bombed, so did the PLA's financial interests. In an effort to encourage professionalism in the PLA and in a display of its authority, the CPC promulgated the Divestiture Act of 1998 banning its commercial activities. Without it, the PLA would have gained undue influence, both by wielding weapons and cheque books.... Sound familiar?

Without reducing the military's economic dominance and access to resources the dream of civil authority over the military will not come to pass. This is not a matter of budgetary allocations. Its about a parallel economy that sucks away resources without any accountability. It rewards itself for taking the risks, but given that its “too big to fail”, the costs are passed on to the losers. The military and those associated with it, sail through bureaucratic red tape, judicial and legislative oversight, and political interference.

This is also why, I don’t agree with suggestions that the only way to save the Railways or PIA is to privatise it. Pakistan has toothless regulators that are easily co-opted. Recently, a newspaper report claimed that the National Logistics Cell, which has single handedly destroyed the Railways freight transport market is going to take over parts of the organisation to run as a “private” initiative. Then again, NLC, with its association with the military is above any critique. Until the state has a capacity to regulate privatised industries, there is no point in transferring a public monopoly to a private one. Tax payers keeping a state organisation afloat for better or worse is one thing, however, tax payers of inflationary borrowing doing the same to prop up a privatised industry to line the pockets of shareholders is criminal.

If I may digress for a paragraph, this is also another reason why I dont buy Imran Khan's and PTI's rhetoric on jusitice and ending corruption. How can they talk about justice and reducing corruption when they remain silent on the military and its role in the economy? Why the silence? PTI supporters like to talk about Turkey's example and the Erdogen model of gradual civilian dominance, but Erdogen as an activist and campaigner would not shy away from putting the Turkish military in its place.

Given that the military is the “winning horse” in the race to the bottom, its not surprising that those seeking an economic advantage find one way or another to cling to it. Some argue, that this proves that the military is a disciplined institution and people trust it with its money. However, the flip side is that no competitor is allowed a fair chance to compete with the military's might. And those individuals and organisations who are lucky enough to tag along under the khaki umbrella...well not only are they minting money, but they are also called national heroes. And when there great money making enterprises go belly up, it will be the patriotic duty off every Pakistani to bail them out.

Sunday, 1 January 2012

Taxing problems: few winners, many losers

Since the early 1990s, inequality has intensified in Pakistan. The consumer boom under the Musharaf regime, coupled with high inflation since 2007 has widened the gap between the rich and the poor.

While the rhetoric in the media is largely made up about issues of access to resources and state services, the wider implications for ignoring inequality are ignored.

Some quick thoughts on this.

1) Given the minuscule number of tax payers in the country, the idea of having a progressive taxation system that redistributes wealth from the rich to the poor is non-existent. We still live in a system where individuals, even those who can well afford it, expect the state to provide them services for free.

2) The states inability to raise enough taxes forces it to borrow money from the State Bank, commercial bank or foreign sources. In all of these cases the increase in inflation and the burden of repaying the debt is borne primarily by those who the state should be protecting. The "haves" however are net beneficiaries through low or non existent tax obligations.

3) Links between politicians, civil servants, the military, industrialists and feudal networks insures that resources are allocated in a manner that serves their own interests. Laws, systems and methods that would help to reduce inequality either by redistributing wealth from the rich to the poor, or by improving the state of the poor are non-existent or co-opted to suit the interests of a small segment of society.

This list could go on for several more points, but I think you get the picture. As we rally against price hikes, increase in the cost of gas, oil and electricity, corruption and mismanagement, we should stop to remember that even in the worst of times, they are winners and losers. The winners continue to win big, while the losers lose more badly. The long term costs of increased inequality are mostly ignored.

The following talk best summarises alot of the points I would agree with.