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Guantanamo Bay trials: the horrors they reveal

The setting for Budget 2012-13

Utilizing the Wastelands of Pakistan

Bank finance for book debts: how to facilitate it

When will they listen to Private Sector?

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Of the two great Prime MinistersBurying an admirable past, and sliding into immorality

What Went Wrong?Chicago conference: chatter of the egoists?Do more, don’t ask for helpHistory being made in Pakistan

Highlights of the Economic Survey 2011-12Highlights of the Federal Budget 2012-13Devaluation of Indian RupeeA rudderless world courtesy leadershipThe looming tragedy: are we prepared for it?

Security guards–their inability to deliverFacebook–the world’s dominant social network goes public

Central Banking: the emerging challengesJPMorgan’s losses manifest a refusal to learn lessons

Karachi: an emerging ‘global’ city?

Hunger and Malnutrition47-48

Hasty, tactless NATO exit from AfghanistanBudget 2012-13: anomalies and prospects

Your Horoscope - May 2012

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Volume - 2 Issue - XIV June - 2012

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Price: PKR -150

Disclaimer: The views expressed by the writers do notnecessarily reflect those of the magazine or its editorial staff.

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18. Is he a patriot and if so for which country?

20. A patriot without any doubt at all

43. Was he a clever-by-half CEO or pretending to be innocent?

19. A great Prime Minister of our time, is he?

17. Telling the truth can sometimes cost very heavily

CONTRIBUTORS

Global & National BriefsVoice of Industry - In brief

Monthly Commodity ReviewMonthly Stock Market Review

11-1415-16

5556

Sports71-72

Regulatory Compliance45-46

Events61-65

History70Travel & Tourism67-68Science & Technology66

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51-54Indiscipline at examination centres: what should be done? SOCIAL ISSUE

59EDUCATION & TRAININGPMEX holds Technical training for brokers & investersFWBL training program for women empowerment

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etters to the EditorL

The peak of irresponsibilitySir, Becky Anderson of the CNN deserves accolades for what she did to Yusuf Raza Gilani when she interviewed him on his latest visit to Britain. Of the several questions she asked him the two that were most appropriate to elicit his views on his government’s credibility required him give his reaction to the fact that 79% of the Pakistanis no longer trust his regime and one-third of the Pakistanis think that they must leave Pakistan since the country’s condition is extremely bad; a fact none can deny.Mr Gilani’s responses to both questions were shocking. All he could say was “Who is stopping them? Why don’t they leave?” He may be bluntly refusing to comply with the verdict of the Supreme Court that asks him to quit but, such responses establish very credibly the fact that he is no longer fit to remain the Prime Minister. Shahid RazaKarachi British concern for democracySir, the way David Cameron went about ‘certifying’ the miserable conduct of Yusuf Raza Gilani in ‘consolidating’ democracy in Pakistan, was an awful reflection of the depth to which Britain’s values have fallen. It is indeed shocking that prime minister of the democracy that claims to have the ‘mother’ of all parliaments complimented a law-defying prime minister.Salman SiddiquiKarachiUnfulfilled promises Sir, the chaos that cripples every indus-trial town in Punjab, and to a lesser extent the rest of the country, appears directed at crippling Punjab’s economy because it is ruled by an opposition party. Perhaps the idea is to use this chaos for blaming the opposition during the next elections.

But a bigger disaster building up is pace of job losses, and rising poverty that propels petty crime and suicides. Mr Zahir Khan (Value Chain May 2012) rightly pointed to the fact that over a million have lost their daily livelihood. Much before the elections it could cause the downfall of the system, as warned by Justice Iftikhar Choudhury. The one thing that defines the conduct of our politicians is “lying shamelessly” about their failures. It applies to all of them.Abdullah AhmedLahoreAbout Value ChainSir, I acknowledge with thanks receiving a copy of your monthly magazine “Value Chain” (May 2012) sent by you to me for our record and ready reference. I congratulate you on the publication of informative and educative magazine and wish you continuing success. Thank you very much for sending the copy of your magazine.Prof. Dr. Khawaja Amjad SaeedLahoreSir, three cheers for an incisive and well articulated article (The eventual death of a promising bank) on our ‘alma mater’ in the May issue of the Value Chain. Great.Sirajuddin AzizKarachiExchange rate ‘tsunami’Sir, I write with reference to Mr Azeem Shaikh’s letter (Value Chain, April) on the subject. Indeed PTI’s promised tsunami may drown the corrupt, but a devastating exchange rate tsunami may hit Pakistanis without making any distinction.As witnessed on May 23, the Rupee will depreciate further each time SBP buys dollars from the banking system to repay IMF’s standby facility, or a large payment for oil imports is effected by the banking system. The growing trade deficit due to reduced export earnings can’t be met by inward remittances alone; foreign investment flows are equally important. But, given the awful governance scenario in Pakistan and its worsening perception abroad, this won’t happen and its foreign exchange reserves backing the Rupee will diminish thereby weakening the Rupee. Shakeel AnsariKarachiSir, the recent disclosure by the IMF that, in 2012-13 Pakistan’s foreign exchange reserves (up to US$10.5 billion) would be consumed by debt repayments, was a shocker. Mr. Azeem Sheikh (Value Chain, April) is correct in his estimates; without higher foreign exchange inflows in the form of FDI, development or standby loans, and external deposits, the reserves may drop to US$6 billion. This extent of the reserves simply cannot support the

exchange rate of the Rupee, and higher inflation will be its killing side effect.Sameen Siddiqui Lahore Re-opening NATO supply routesSir, NATO’s leadership, especially the US leadership, has made it manifestly clear that democratic values too could become sacrificial lambs if respecting them hurts NATO’s interests. The way the NATO leadership collectively brushed aside the demand by Pakistan’s parliament for an apology by the US over its visible role in the Salala tragedy proves that beyond any doubt. The West practices only one value i.e. compliment-ing all those who serve its interests at the cost of their own. Sadiq AliSialkotSir, the West is emphasizing the fact that the dispute over resumption of NATO’s supplies via Pakistan is only over the fee that Pakistan wants to charge for use of its highways. How wholly nonsensical! The West can never compensate Pakistan for the cost it paid since 1979 for joining the US in the Afghan insurgency. Does the West have any idea of the cost of the image loss Pakistan has suffered? Today, Pakistan is considered one of the most risky places for investment. This is turning it into a failed state. The leaders in the West haven’t learned any lessons. Do they know the cost of hastening the failure of the world’s seventh largest state and its consequences for the world? Sohail AnwarLondon Should black wealth be welcomed?Sir, the debate over permitting inflows of foreign investments may have its merits from a security point of view, and threat to the image of financial markets, but do we right now have an alternative to letting Pakistanis bring back their wealth?Amin DadaKarachi

June 20129

Awan Trading Co. is Pakistan based Coal trading entity which was incorporated in the year 2002. The company started its operation as an importing company and for the last two years it has also started supplying domestic coal (Pakistan coal). So far the company has imported and supplied 5 million tons of coal, from South Africa and Indonesia, to the cement factories.This opportunity of supplying coal to cement factories was created due to their (Cement factories) shift from furnace oil to coal as the main energy fuel. Since then the company has been sincerely committed in its mission of

supplying coal to factories as a source of energy. What you sell is important! So we source our Coal from best suppliers around the world. Developing longterm relationships has been the hallmark of our company. Our promise that “we deliver, no matter what the situation” has earned us, the confidence of our buyers.The success of our trading can be gauged from the fact that we are now importing 21 vessels (1 million ton) of coal in a year which as resulted in 30% market-share for Awan Trading Co and hopefully the share will increase in the coming years.

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US President Barack Obama and Afghan President Hamid Karzai have signed a strategic partnership accord that charts the future of US-Afghan relations beyond the end of the NATO combat mission in the country.

The IMF on May 1 rejected a call by a US anti-Iran group for it to cut its relations with Tehran’s central bank in order to adhere to US and European sanctions.

The Hungarian parliament on May 2 confirmed Janos Ader, a co-founder of the ruling Fidesz party and close ally of Prime Minister Viktor Orban, as the country’s president.

Afghan President Hamid Karzai on May 3 criticized the role of US soldiers in their decade-long fight against the Taliban. He accused the US and NATO allies of carrying out arbitrary actions in Afghanistan.

The European Union on May 3 agreed to set up an energy partnership with China ensuring open access to each other’s markets.

Iran’s foreign ministry on May 6 denounced the new strategic pact signed between Afghanistan and the United States saying it would give rise to instability in the neighbouring country rather than resolve Afghanistan’s security problems.

A UN nuclear inspector of South Korean nationality was killed in a car accident in central Iran on May 8. He was on a mission with an IAEA colleague near the Khondab complex in the province of Markazi.

Support for the war in Afghanistan has reached a new low, with only 27 percent of Americans saying they back the effort and about half of those who oppose the war saying the continued presence of American troops in Afghani-stan is doing more harm than good.

An Afghan soldier opened fire on NATO troops in eastern Afghanistan on May 11, killing an American and leaving two others wounded.

Poland’s Parliament on May 11 agreed to gradually raise the retirement age to 67, despite strong opposition from trade unionists.

Two-time Pulitzer – prize winning German photographer Horst Faas, known for his haunting pictures of the Vietnam War, died on May 10 at the age of 79. He covered the Vietnam War from 1962 to 1974 and won a Pulitzer award in 1965 for his war photographs. He won a second Pulitzer in 1972 for his coverage of the conflict in Bangla-desh along with another AP photogra-pher, Michel Laurent, for the series “Death in Dacca.”

US authorities reportedly seized $ 1.5 million worth of proceeds from coun-terfeit goods made in China and sold online in the United States. The move was stated as the latest effort to target commercial intellectual property crime on the Internet, as part of the US government’s “Operation In Our Sites.”

China on May 11 accused the Philip-pines of escalating an already tense territorial dispute over the South China Sea following a noisy anti-Beijing protest in Manila.

Iranian MPs on May 14 condemned a planned union between Saudi Arabia and Bahrain and warned that the crisis in Bahrain will be transferred to Saudi Arabia and will push the region towards insecurity.

Donors pledge $ 4 bn aid for Yemen: Donors, with Saudi Arabia in the lead, pledged $ 4 billion in aid to impoverished Yemen on May 23 as it grapples with a fragile political transition and struggles to contain a growing threat by Al Qaeda.

Russia tests new missile after Nato summit: Russia staged on May 23 the first successful test-launch of a new interconti-nental missile designed to pierce the defence system now being deployed by Nato despite Moscow’s fierce complaints.

Five uncapped Indian cricketers have been provisionally suspended following allegations of corruption in Indian Premier League.

Francois Hollande who beat Nicolas Sarkozy in Presidential election 2012 was sworn in as President of France on May 15 with a solemn vow to find a new growth-led strategy to end the debt crisis threaten-ing to unravel the eurozone.

Japan successfully put a South Korean satellite into space in its first foray into the European-and Russian-dominated world of commercial launches.

In a meeting on the sidelines of the 25th NATO summit in Chicago on May 20, President Asif Ali Zardari and President Hamid Karzai agreed in princi-ple to extend the Afghanistan-Pakistan Transit Trade Agreement beyond Afghani-stan to the countries in Central Asia.

China sends more ships to disputed shoal: China has deployed more ships to a disputed shoal in the South China Sea amid a tense stand-off with the Philippines. Manila has lodged a fresh protest with the Chinese embassy over the build-up.

Leaps from plane without parachute: A British stuntman Gary Connery became the world’s first skydiver to land without a parachute on May 23, falling 731 meters to drop safely onto a crash-pad of cardboard boxes.

Hundreds of ‘Occupy Protesters’ took to the streets of the City of London on May 12 calling for an end to “predatory capitalism” after their move-ment declared a global day of action.

Global events

lobal BriefsG

June 201211

Global economy

On May 11, the Interna-tional Energy Agency (IEA) raised slightly its outlook for growth of oil demand this year but warned that risks of a shock from Iran persisted despite easing prices and a supply boost by OPEC.

A Memorandum of Understanding between Turkey’s Bayegan and Saudi Arabia’s Advanced Petrochemicals was signed on May 3 in Istanbul to invest 1 billion dollars in constructing a plastic plant on Turkey’s eastern Mediterranean coast. A full joint venture agreement for the plant will be signed before September.

Republican–controlled House panel has cut the US foreign aid budget by some 9 percent, targeting the cuts on economic aid and contributions to the United Nations and the World Bank.

According to government data released on May 10, the US trade deficit widened to $ 51.8 billion in March as imports surged to an all-time high.

Fitch Ratings on May 22 cut Japan’s long term foreign currency rating by two levels from AA to A plus. It cut the more impor-tant local currency rating by one notch from AA minus to A plus. Fitch warned further downgrades were possible unless the government takes new fiscal policy measures to stabilize public finances and its ratio of debt to gross domestic product.

Banking shares around the world tumbled on May 11 after the US biggest bank, JP Morgan Chase & Co., said it had racked up losses of 2 billion dollars in risky trading since the start of April.

Hong Kong’s economic growth slowed sharply in the first quarter of the year due to sluggish exports and a weak global economy. The economy grew 0.4 percent year-on-year in the first three months of the year compared with 3.00 percent in the fourth quarter of 2011.

on May 11 as the economy recovers from last year’s historic flooding.

German Finance Minister Wolfgang Schaeuble forecast on May 18 that market turbulence at the heart of the eurozone’s sovereign debt crisis would calm within a year or two.

China’s economy showed unex-pected signs of weakness in April with lower than expected output data, soften-ing retail sales and easing prices suggest-ing economic headwinds might be stiffer than thought, requiring more robust policy responses to counter them.

Addressing a gathering of EU diplo-mats at the “50th Anniversary of Pak-EU Relations” at Presidency on May 9, President Asif Ali Zardari said that Pakistan is now ready to engage with the European Union on General-ised System of Preferences plus and a Free Trade Agreement.

Prime Minister Tayyip Erdogan said on May 20 that Turkey’s debt to the IMF has fallen to $ 1.9 billion and the country will clear the debt by April 2013.The amount owed to the IMF stood at $ 2.9 billion at the end of January.

Thailand’s economy grew a record 11.0 percent in the first quarter from the previous three m onths, rebounding from last year’s severe flooding and strong full-year growth is expected due to a jump in consumption and invest-ment after the disaster.

The IMF on May 22 said Britain might need to further slow the pace of its tough austerity measures to lift the country’s growth amid the risk of a major eurozone ‘shock.’

Japan was the world’s major creditor in 2011, for the 21st consecutive year, reflect-ing corporations’ aggressive foreign acqui-sitions and Japan’s prodigious foreign currency intervention.

Presenting its twice-yearly economic forecasts on May 11, the Euro-pean Commission said that Spain would run a deficit of 6.4 percent of economic output this year and 6.3 percent next year, with both targets substantially above levels already agreed with EU. The report further said that France, the euro zone’s second largest economy, will also miss its 2013 budget deficit goal of 3 percent by a wide margin.

India’s inflation reportedly acceler-ated in April to 7.23 percent as price pressures for food, fuel and manufac-tured items all picked up.

Governing Council member Luc Coene reportedly said on May 13 that the European Central Bank is likely to lower its growth forecast for the euro zone in June and could cut interest rates further if necessary.

The Asian Development Bank said on May 5 that corruption and bad governance have been major obstacles to reducing poverty at a faster pace in the Asia-Pacific region. The Bank was of the view that corruption must be avoided and governance must be substantially improved.

China’s annual economic growth could slow to 7.5 percent in the second quarter, largely due to curbs on the property sector and headwinds from external demand.

The Bank of England on May 16 cut its forecast for British growth and warned that the eurozone debt crisis was the biggest threat to recovery.

Bank of Tokyo-Mitsubishi UFJ, which handles most of Japan’s payments for oil imorts from Iran, has reportedly frozen transactions with Iranian banks after being ordered to do so by the New York District Court.

The Spanish trade deficit fell by 29.4 percent in March from the figure 12 months ago, providing a glimmer of hope for the recession hit eurozone country.

US President Barack Obama has announced $3 billion in private sector pledges to help boost agriculture and food production in Africa.

Thailand’s central bank, The Bank of Thailand, raised its 2012 economic growth forecast to 6.0 percent from 5.7 percent

lobal BriefsGG

June 201212

Pak politics

Army and civilian leadership of Pakistan in Islamabad on May 2 discussed new rules of engagement with United States following the signing of a highly important strategic agreement between US and Afghanistan on May 1.

US Defence Secretary Leon Panetta has said the US will continue to launch drone strikes against militant sanctuaries in Pakistan even if Islamabad keeps opposing them.

Top Bar associations of the country at a meeting held on May 5 in Lahore rejected appointment of ad hoc judges in the Supreme Court. They also demanded their representation in the Judicial Commission of Pakistan for the appointment of superior court judges.

The Supreme Court released on May 8 the detailed verdict in contempt of court case against Prime Minister Yousuf Raza Gilani. The verdict raised the possibility that the Prime Minister could face a five-year disqualification from being elected to parliament or a provincial assembly.

Addressing a press conference in New Delhi, India on May 8, US Secretary of State Hilary Clinton pressed Pakistan to do more to stamp out home-grown terrorism making sure that its territory is not used as a launching pad for terror-ist attacks anywhere, including inside of Pakistan.

The Punjab Assembly on May 9 adopted resolutions demanding the restoration of Bahawalpur’s status as a province and creation of a separate province “Southern Punjab”.

The US Congress on May 10 proposed stopping preferential trade with Pakistan and reducing aid to just 10 percent of available funds unless Islamabad re- opened NATO supply routes. The law-

makers also approved a proposal to stop all reimbursements to the country if Pakistan continued to ignore US demands.

After a meeting with Prime Minister Yousuf Raza Gilani, David Cameron, Prime Minister of UK resolved to build on a deeper and stronger relationship with Pakistan and said that the future of Pakistan matters greatly to Britain. He agreed on building up ties in trade, defence, health and education sectors.

Chaudhry Pervez Elahi, Senior Federal Minister, addressing workers’ convention of his party on May 13 said that PML-Q would consider parting ways with the government if PPP did not resolve the problem of load shedding.

Addressing a women convention on May 14 in Karachi, Jamaat-e-Islami Pakistan chief Syed Munawwar Hassan said that restoration of NATO supply to Afghanistan would lead to repetition of incidents like Salala.

Addressing a press conference in Islamabad on May 22, the Turkish premier Recep Tayyip Erdogan endorsed Pakistan’s demand for an apology from the US for the Salala border post attack that left 24 Pakistani troops dead. About the government- opposition confronta-tion in Pakistan he advised the opposi-tion to be constructive and serve the country and people.

Barrister Aitzaz Ahsan told reporters on May 15 that the conviction of Prime Minister Yousuf Raza Gilani through a short order by the Supreme Court was illegal and unconstitutional.

Pakistan has reportedly yet to get 2.9 billion dollars under Coalition Support Fund while an amount of 8.7 billion dollars of the total 11.6 billion dollars has been received under the Fund since 2002.

Australian High Commissioner Tim George on May 17 said that Pakistan and India had different cases and both could not be treated equally for provi-sion of civil nuclear technology from Australia. However, the envoy said, there was much scope to boost links in the fields of trade, investment, and joint ventures.

Balochistan Chief Minister Nawab Aslam Raisani has demanded the federal government to review its agree-ment with Port of Singapore Authority on Gawadar Port , as it is unable to operate the port and has also made no significant investment for development of the port.

Although, the reopening of the ground lines of communication for NATO supplies is yet to be formally announced, Pakistan on May 18 allowed four containers of office supplies for the US Embassy in Kabul to cross into Afghanistan.

Nato leaders sealed a landmark agreement on May 21 to hand control of Afghanistan over to its own security forces by the middle of next year. They also called on Pakistan to reopen a key supply route into Afghanistan “as soon as possible”.

Chief Justice of Pakistan, Justice Iftikhar Muhammad Chaudhry on May 23 said the Constitution will take its course if the prime minister fails to take steps, with immediate effect, to resolve the crisis in Balochistan, warning that imposition of emergency could be one of the options to restore sanity to the province.

NAB has reportedly initiated investigation into allegations leveled by Interior Minister Rehman Malik against PML-N leadership regarding $ 32 million money laun-dering.

ational BriefsNN

June 201213

Pak economy

Prime Minister Yousuf Raza Gilani on May 1 announced increase in minimum wage of workers from Rs.7000 to Rs. 8000 per month. Mean-while, Punjab Chief Minister Shahbaz Sharif announced a raise in the minimum wage of labourers from Rs.7000 to Rs.9000 per month.

President Asif Ali Zardari on May 7 signed the Stock Exchanges ( Corporati-sation, Demutualisation and Integration) Act 2012 to further strengthen the country’s stock markets.

Pakistan Workers Federation on May 1 reportedly rejected the Prime Minister’s announcement of chipping Rs. 1000 in minimum monthly wages and suggested that the minimum monthly wages should be Rs. 14000.

Indian investors have reportedly shown willingness to invest $ 20 to 50 billion in Pakistan in mining, petroleum, energy, power and infrastructure projects.

South Korea has reportedly expressed keen interest to invest in setting up solar power projects of 300MW power in Pakistan. The projects will be both off-grid and on-grid and will mostly be established in Sindh province.

Massive rise in debt servicing cost has reportedly resulted in increasing the budget deficit to 4.2 percent of the GDP in July to March period of the current fiscal year 2011-12 as against the upward revised target of 4.7 percent of GDP for the whole fiscal year.

China has reportedly expressed willingness to set up an oil refinery near Karachi with an investment of $ 5 billion and has requested the Government of Pakistan to identify 4000 acres of land for this purpose.

European Union is likely to increase the number of quota restricted items from 20 to 23 in the EU package for Pakistan, which will hamper prospects of export growth and better price realiza-tion for the country.

Pakistan and United Kingdom on May 10 agreed to take effective steps to increase bilateral trade to about $ 4.1 billion by 2015 and to ensure that Pakistanis illegally residing in the UK return home under existing agreements.

The United Nations Economic and Social Survey of Asia and Pacific projected the economy of Pakistan to grow by 4 percent during the year 2012 compared to 2.4 percent growth in 2011.

Overseas Pakistanis reportedly remitted $ 10.877 billion in the first 10 months of the current fiscal year showing an impressive growth of 20.23 percent over the remittances during the same period last year.

According to Pakistan Bureau of Statistics, the trade deficit of the coun-try surged by 45.01 percent to $ 17.649 billion during the first 10 months of the current fiscal year as against $ 12.171 billion during the same period last year.

Australian High Commissioner to Pakistan Tim George has said that the Australian government will provide an estimated A$ 96.4 million or Rs. 8.83 billion in official development assistance to Pakistan in 2012-13.

Pakistan’s nuclear scientist Dr. Samar Mubarakmand has said that through underground gasification (UGC) technology, electricity can be generated at Rs. 3 to 4 per unit while diesel can be produced at $ 40 per barrel.

Speaking at a reception in his honor at Hyderabad Chamber of Commerce and Industry on May 14, the Consul General of Germany Dr. Tilo Klinner told the business-men that the German companies were interested in increasing agricultural imports.

The federal government’s borrowing for budgetary support spiked to a record level of Rs. 1.058 trillion, swelling by 58 percent during the current fiscal year. The borrowing includes Rs. 445.144 billion from the State Bank of Pakistan and nearly Rs. 613 billion from other scheduled banks.

According to SBP, FDI stood at $ 666.7 million during July- April of current fiscal year as compared to $ 1.292 billion in corre-sponding period of the last fiscal year.

According to State Bank of Paki-stan, the country’s current account deficit deteriorated to $ 3.3 billion during the first 10 months of current fiscal year primarily driven by high deficit of trade and services sector, besides slow foreign inflows.

Russia has expressed its willingness to invest $ 500 million in Tetra-partner power import project under the head of Central Asia-South Asia (CASA-1000), while other leading financial institutions including World Bank and Islamic Development Bank made commitments of financial support for 1,000 mega-watts power import project of Pakistan via Central Asian states.

The Planning Com-mission has report-edly observed that Pakistan’s economy performed below its potential during 2011-12 due to structural problems in regulatory and institutional infrastructure, intensity of energy outages and weaker global demand for exports.

Turkish Ministers, accompanying Prime Minister Recep Tayyip Erdogan, have termed Pakistani bureaucracy, high taxes and customs tariffs as main obsta-cles to investment by Turkish companies.

The Economic Coordination Com-mittee of the Cabinet has approved reduction of customs duty on import of secondary quality Electrolytic Tin Plate from 15 percent to 10 percent despite FBR opposition to the proposal.

Turkmenistan on May 23 signed agreements with India and Pakistan to deliver gas through a new pipeline that will transit Afghanistan.

The National Economic Council on May 24 approved the annual plan for the year 2012-13 with growth rate of 4.3 percent, national development outlay of Rs. 837 billion, including federal Public Sector Devel-opment Programme of Rs. 360 billion.

ational BriefsNN

June 201214

Trade & Industry briefs

Restoration of PACCS demanded: The business and industrial community of the country has demanded of the government to restore Pakistan Auto-mated Customs Computerised System.

MOU with CCC signed: Rawalpindi Chamber of Commerce and Industry signed a MoU with Ceylon Chamber of Commerce of Sri Lanka which aims to encourage mutual understanding and promote business and friendly relations among the industrial, trade and business communities of Pakistan and Sri Lanka.

Need stressed for ensuring uninter-rupted power supply to textile sector: Chairman, All Pakistan Textile Mills Association (APTMA) Mohsin Aziz has appreciated the government efforts for ensuring five days a week gas supply to captive power plants of industry and exemption from load shedding to independent feeders of textile industry. He said that the textile industry is fully capable of achieving $ 20 billion exports target if it is guaranteed uninterrupted supply of electricity and gas for 24/7 throughout the year and its financial problems are appropriately addressed.

Strategy to Explore Natural Resources: The Islamic Chamber of Commerce and Industry on May 11 stressed the need for developing a comprehensive strategy to explore and utilize natural resources to contribute towards the economic development of the country. Trade between Pakistan and Sudan: In his meeting with the Governor of Khartoum in Sudan, LCCI Senior Vice President said that Pakistan and Sudan need to enhance the two-way trade volume which at present was below the trade potential. He said that the bilateral trade analysis of the last three years calls for greater efforts to be made to initially get it over the $ 100 million mark.

Pak-Korea Trade Potential: President, Karachi Chamber of Commerce and Industry, Mian Abrar Ahmad has under

Indo-Pak Investment Treaty: Speak-ing at Indo-Pak economic conference in Lahore on May 8, former President of Confederation of Indian Industry and Chairman Bajaj Auto Limited, Rahul Bajaj called for finalization of bilateral investment treaty between India and Pakistan that will encourage foreign direct investment in both the countries. He dispelled the impression that open-ing the door for Indian investment in Pakistan will hurt the interests of Pakistan business community.

Indo-Pak Trade Potential Fantastic: Business Forum of Punjab President, Ibrahim Qureshi said on May 8 that potential for Indo-Pak trade was fantas-tic and time had come to open trade relations between the two countries. He said that the business community should act as a pressure group to lobby for a congenial environment to bilateral trade between India and Pakistan.

Power load shedding: Pakistan Indus-trial and Traders Association Front (PIAF) has urged the government toexempt industrial estates from electricity load shedding to avoid irreparable losses to the national economy.

Import of medicines from India opposed: Chairman, Pakistan Pharma-ceutical Manufacturers’ Association (PPMA) Muhammad Asad told a select group of journalists on May 9 that the domestic pharmaceutical industry may face a tough time if the government allows import of medicines from India after granting the country MFN status.

Pak-Iran Banking Channel: Talking to Mashhad Mayor Syed Muhammad Pejman, KCCI President Mian Abrar Ahmad called for introducing banking channel and making arrangements for currency swap to enhance Pak-Iran bilateral trade.

Cut in Fuel Tariffs: Small traders have demanded of the government to imme-diately cut fuel tariffs by 30 percent and freeze price for at least three years.

lined the need for building trading blocks of Pakistan with Asian countries, Central Asian Republics and SAARC countries. Exchanging views with the ambassador of South Korea to Pakistan, Choong Joo Choi, he said that immense opportunities exist to enter into joint ventures in Pakistan in alternate energy, agriculture and engineering sectors.

Furniture Industry Potential for Export Earnings: Members of the Pakistan Furniture Council on May 5 said the government has totally ignored the furniture industry which has a vast potential to get its due share from the international trade volume of $ 32 billion, out of which Pakistan is getting only $ 8 million. They suggested the government must reduce duty on furni-ture raw material, control deforestation, support industry and consider it as the sixth duty-free industry of Pakistan.

Indonesian MPs Visit LCCI: A 5-member parliamentary delegation from Indonesia visited Lahore Chamber of Commerce and Industry on May 5 and desired to further strengthen the existing trade and cultural relations with Pakistan.

LCCI, ACCA Strategy for Economic Growth: At a pre-budget discussion on May 3 in Lahore, the Lahore Chamber of Com- merce and Industry (LCCI) and Associate Chartered Certified Accountants create opportunities for investment, industrialization and employment generation.

Lay-offs and Industrial Closures: President, Lahore Chamber of Com-merce and Industry, Irfan Qaiser Sheikh has expressed deep concern over prolonged load shedding and demanded of the government to seriously resolve the energy crisis that are hitting all sectors of the economy including trade, industry and agriculture.

Commercial Import of Used Vehi- cles: All Pakistan Motor Dealers Associa-tion on May 9 demanded of the govern-ment to allow commercial import of used vehicles of up to 10 years to provide relief to the common customers.









oice of IndustryVV

June 201215

Trade & Industry briefs Federal Budget-Saarc CCI Proposals: Vice President, Saarc Cham-ber of Commerce and Industry, Iftikhar Ali Malik, while addressing business community at FPCCI Capital Office, on May 19, said that the govern-ment should introduce a budget that could trigger economic activity in the country. He said that foreign funds and investments had dried up which called for focused efforts to mobilize domestic resources. He proposed a powerful economic council comprising former finance ministers, SBP governors, FBR chairmen, judges, business leaders, and technocrats which could guide the government on economic matters.

Funds for Thar Coal: Pakistan Industrial and Traders Association Front has demanded of the Federal Finance Minister to immedi-ately release funds for Thar Coal project.

Trade with India: All Pakistan Textile Mills Association Chairman, Mohsin Aziz has adopted a cautious approach towards trade with India, saying that bilateral trade between Pakistan and India, though being need of the hour, should be based on level playing field, reciprocity and comparative advantage.

Electricity Price Freeze: Textile export-ers in their meeting with Federal Power Minister Syed Naveed Qamar demanded to freeze the electricity prices for six months, abolishing the fuel adjustment surcharge as frequent increase in prices and surcharges was hitting all sectors of the economy, disrupting the economic cycle and jacking up inflation in the country.

Discrimination in Tax- able Income: Multan Chamber of Commerce has demanded that all types of income should be taxed and there should be no discrimination in taxable income to end corruption. The Chamber demanded inclusion of 0.7 million wealthy people in tax net who were not paying direct taxes to the government.

LCCI President Irfan Qaiser Sheikh also criticized the 16 percent hike in power tariff and said it would not be doing any service to the government unless it chalks out a plan to control line losses and electricity theft, and convert oil based power generators to coal as in India where more than 60 percent of electricity is produced through coal.

SCCI Recommendations for Federal Budget: Sarhad Chamber of Commerce and Industry in its recommendations for Federal Budget 2012-13 called for broad-ening of tax base, reducing the tax rate and preventing from passing further burden on the existing tax payers.

Direct taxes model proposed: The Lahore Chamber of Commerce and Industry on May 19 advocated the implementation of direct tax model in line with the advanced economies instead of indirect taxes.

Kalabagh Dam: Former Chief Minister of Khyber Pakhtunkhwa, Engr. Shamsul Mulk said on May 21 that the country is suffering a loss of Rs. 132 billion annu-ally and this amount can be saved by initiating construction of Kalabagh Dam . LCCI President Irfan Qaiser Sheikh also supported the idea and said that further delay in construction of Kala- bagh Dam will cost this country.

Decline in Foreign Investment: Business community on May 22 expressed grave concern over sharp decline in foreign investment that fell sharply by $ 926.6 million or 66.5 percent to $ 466.5 million during July-March 2011-12 against $ 1.393 billion in the corresponding period last year.

Law & Order Situation in Karachi: President, Lahore Chamber of Com-merce and Industry, Irfan Qaiser Sheikh, has expressed grave concern over deteriorating law and order situation in Karachi and suggested that the government should immediately convene an All Parties Conference wherein business leaders should also be invited to find out a strategy to cope with this menace once for all.

Single Tariff of Electricity: Textile exporters have demanded single tariff of electricity abolishing all surcharges, which would help the industrialists to schedule their production plan and control their production cost.

Iranian Ambassador visits LCCI: Speaking at the Lahore Chamber of Commerce and Industry (LCCI), the Iranian Ambassador to Pakistan Ali Raza Haghighian pledged to enhance the volume of two-way trade to 10 billion dollars from existing a bit over one billion dollar. He said that talks on gas and electricity projects are well on way and would be materialized soon. Speaking on the occasion, LCCI president called for measures to curb smuggling that is coming in the way of expansion of two-way trade.

Bilateral Trade with Iran: Vice Presi-dent, Federation of Pakistan Chamber of Commerce and Industry (FPCCI), Zubair Ali, while talking to Iranian Consular General, Hassan Darwishwand called for promoting trade relations between Pakistan and Iran as this can usher economic revolution in the region.

Pak-Africa business relations: Speaking at Africa Show, arranged by LCCI in Lahore on May 24, African ambassadors underlined the need for strengthening bilateral and business relations between Africa and Pakistan. The Ambassadors pledged to work for promotion of Pak-Africa trade and announced formation of Africa-Pakistan Friendship and Business Association comprising ambas-sadors and high commissioners of African region and three Lahore Chamber of Commerce and Industry representatives.

US firms keen to invest in KP: Address-ing businessmen and industrialists during a visit to the Sarhad Chamber of Commerce and Industry on May 24, US Commercial Counselor Brian McCleary said that American companies are keen to invest in Khyber Pakhtunkhwa and elsewhere in Pakistan. He expressed optimism about bilateral trade engagement between Pakistan and the US and said there were a number of projects on ground to boost up economic relations between the two countries. Speaking on the occasion, SCCI President Afan Aziz said that balancing trade relations were essential for improving bilateral ties between Pakistan and the US.









oice of IndustryVV

June 201216

Budget 2012-13:anomalies and prospects

s this issue of the Value Chain went for printing, the federal finance minister

presented the Federal Budget 2012-13 amid fist-fights between coalition and opposition parliamentarians. All credit to PPP and PML-Q parliamentarians who protect-ed Mr Yusuf Raza Gilani and the finance minister, giving the finance minister just enough time to read the budget speech. Did the parliamentar-ians hear the speech, is anybody’s guess. The other shocker was that taxation proposals– always kept confidential till the last minute–were somehow leaked to the media earlier in the day.The finance minister prioritized the ‘popularity’ aspect of the budget by announcing over a dozen minor tax reliefs such as allocation of Rs 70bn for BISP, additional discounts to BISP cardholders by Utility Stores, 20% ad hoc relief to the federal government employees in pay and pension, and income tax exemption for those earning less than Rs 0.4mln a year. This provided the pro-regime MPs a fair amount of ammunition to confront the budget’s critics. Commendable smart work.That said, the bigger issues can’t be sidelined. The fact is that the economy is hardly growing. The claim that LSM output grew by 1.8% over last year is indeed amazing because, given the year-long power load-shedding, it would be miraculous if the LSM sector in Punjab actually produced higher output. A factor that adds to the doubts is the revision of growth rates in the past two months (down to 3.67% from earlier claimed 4.2%) as well as the growth rates in 2009-10 and 2010-11. It is highly likely that the presently claimed rate of 3.67% may be revised downwards following consolidation of the figures after June 30. Equally questionable is the rate of inflation. A growth rate of 10.8% over last year would be miraculous given just three big factors: continuous rise in fuel price and power tariffs and a steady slide in the exchange rate of the Rupee. Just sum up these rates of change and the total exceeds 13%. For 2012-13 the budget envisages inflation to fall to a single digit. But in 2012-13, power sector subsidy would also be slashed from its current level of Rs 464bn to 187bn. In this backdrop, hopes of inflation coming down seem optimistic. If inflation stays high, it would be hard to justify lowering or even freezing of mark-up rates, and the Rupee too will depreciate. Then how will the cost of doing business come down to cut inflation?The killing weakness, however, would be caused by a slide in the exchange rate of the Rupee. We may fault the Governor SBP for telling what he told the Wall Street Journal although he was only repeating what the IMF said in its latest report; that Pakistan’s foreign exchange reserves would deplete by a hefty $10bn during 2012-13 after servicing of external debt. What the regime must honestly accept is that its mismanagement of the economy and internal security has worsened the crisis because foreign investment which is badly needed, and for which huge potential exists, is now virtually coming to a halt leaving little hope for build-up of exchange reserves.

The clear indicators of consistent economic mismanagement since March 2008 are the persistent slide in the tax-to-GDP ratio, public debt to GDP rising to over 58% and servicing of public debt now accounting for nearly 75% of tax revenue after transferring 57% thereof to the provinces. The build up of resource shortfall is amply portrayed by the fact that since June 2008, public debt has doubled because, each year since June 2008, borrowing by the federation overshot its target by as

much as 100%. As admitted by the finance minister in his budget, the reason therefor is FBR’s inability to tax the rich.The finance minister claims that tax collection may go up by 28% in 2011-12. Fine, but the fact that the tax-to-GDP ratio keeps declining proves that this isn’t enough. The way FBR compromises with the powerful on the subject of taxing just the assets (not income that is hard to ascertain), is shocking. FBR has yet to effectively impose and recover capital gains tax on real estate and stock trading. What the people expect from the state is action, not regrets for its failures.Besides often incorrectly blaming the previous regime for the distortions in the economy, losses caused by floods in 2010 and 2011 are quoted as the reason for excessive borrowing by the federation. True; the losses did occur and had a huge impact since they also forced import of essential food items and drained Pakistan’s foreign exchange reserves. But gross waste of resources on repair work was unfortunate. What the finance minister overlooks is the fact that devastating floods have been forecast for 2012. Without providing for the drain on resources they will cause, the projected fiscal deficit is Rs 1,105bn; what will be the deficit after incurring those losses?Add to this scenario the almost unchecked rise in the losses of the state-owned enterprises that have been on the list for privatization since 2008. With prospects of foreign inflows fading away, reliance will be on inward remittances from the Pakistanis living abroad. But that will not be enough because depletion of exchange reserves and the expected widening of trade deficit will hasten the slide in the exchange value of the Rupee and will escalate inflation much faster leading to even more threatening civil unrest than it is now. The only option that the government will have is to print more currency, and add to the already killing inflation. All this paints a worrying picture of the economy 2012-13 onwards. Should these be the fruits of democracy? For once Shahbaz Sharif–a great supporter of democracy–has finally admitted that people place good economic management above their love for democracy. This is an implied admission of the fact that the slogan-mongering politicians have proved incapable of economic management–the harsh truth–but the coalition partners don’t accept it. What worries the students of history is the clear sign of anarchy seen recently in Faisalabad and now spreading to other towns and cities including Karachi that is already crippled by frequent economic activity freeze caused by target killings that occur virtually every day.

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EEditorial

June 201217

Hasty, tactless NATO exit from Afghanistan

t the Chicago summit of the NATO heads of government, President Barack

Obama said that NATO’s decision to end combat operations in Afghanistan by next summer and withdraw all Western troops by 2014 is irreversible. The promise has less to do with political rationality, but far more with the economic distress the West confronts that forced this policy. But a hasty withdrawal without fulfilling NATO’s promises–security, sustainable economy, democracy, women’s rights, or anything close to that–is an abject failure. Tom Donilon, Obama’s National Security Adviser, said “the goal [now] is to have an Afghanistan again that has a ‘degree’ of stability so that forces like al-Qaeda and associated groups cannot have unimpeded safe haven.” In other words, instead of ‘eliminating’ al-Qaeda from the region, the revised aim is a ‘degree of stability’, but with Kabul and just a few other cities protected by Afghan forces while the coun-tryside falls back into the hands of the Taliban, that ‘stability’ may be a dream. NATO leaders acknowledge that, following the withdrawal of their forces, large portions of the Kanda-har and Helmand provinces would slide back into chaos. With the Afghan economy almost at a standstill, even limited targets like a functional physical infrastructure, essential civic services and a functioning civil service and judiciary, that are necessary to assure basic economic stability, would be hard to achieve. Given this setting, it would be impossible for any regime in Kabul to afford the 350,000 strong defence force that NATO promises to put in place before its exit. Experts believe that this force could soon be downsized to 100,000 because NATO’s annual funding support of $4.2bn (proposed by president Obama) for Afghanistan appears inadequate for the purpose. Without reaching an understanding with the Taliban (despite German and Qatari efforts), Afghanistan could yet again turn into a battleground wherein tribal rivalries, ruthlessness, and greed would rule supreme–a possibility accepted by president Obama while winding up the NATO summit by saying “Are there risks involved in it? Absolutely.” This was an indication of the fact that the summit failed to outline and agree upon a strategy that could protect the Afghan government against a threat of overthrow, acute ethnic divisions and civil war, or an internal collapse precipitated by economic crisis. The scenario reminded many of the chaos that Viet Nam inherited when the US finally exited from the country that it had divided and destroyed. Outcomes like these undermine the credibility of NATO and raise questions about its ‘peace-keeping’ efforts. After Iraq and Libya, Syria too may become another example of the gulf between NATO’s proclaimed aim and its real aim. Even Obama admitted that departure of NATO forces will leave behind a mess. “I don’t think there is ever going to be an optimal point where we say, ‘this is all done,’ this is perfect; this is just the way we wanted it. It is a [dirty] process, and it’s sometimes a messy process.”

Obama isn’t honest while claiming that, by 2014, the war “as we understand it” will be over. This war won’t be ‘over’ until the Taliban, Americans, and president Karzai reach an agreement whereby peace returns to Afghani-stan. While it is now fashionable to blame Pakistan for every evil that goes on in Afghani-stan, the fact is that the Saudi-backed Wahabi Sunnis and their wholly non-compromising attitude (in true Saudi style) is to blame for the ongoing conflict, and the failure to form a

coalition composed of a ‘balanced’ leadership. After the summit, the Taliban are reported to have said in a statement that once NATO occupation of Afghanistan ends, “Afghans can reach a resolution regarding their country.” It was a statement that deserved a response to elicit a Taliban clarification on exactly how this reconciliatory process would begin. Will it actually lead to what the US diplomats now call a “good enough Afghanistan”? It may be “good enough” for a relieved West, but what prospects does it hold out for the neighbours of Afghanistan? If the Tajik, Uzbek and Pashtun factions again go for each other’s throat, will its neighbours again not become hosts to millions of refugees?This lasting misery was started by the Soviet Union and then sustained and exploited by the US and its allies, wholly to the disadvantage of Afghanistan and its neighbours. But despite this undeniable reality, the West still claims to be the peace-keeper and insists that it be allowed to play that role globally. The reality is that the world has to pay for what in the West’s view is right or isn’t; traditional civilized values don’t matter anymore. An example thereof is the support for Dr Shakeel Afridi who is openly being defended by every US diplomat, and they may soon be joined by president Obama. The merit this fellow has is that he was a covert US agent in Pakistan.Given this backdrop the task of image building also becomes partly the job of a Hollywood-Pentagon combo. Despite losing the Vietnam War the US won it on the cinema screens. Once again it is time for director Kathryn Bigelow to make a movie on the events prior to operation ‘Get Osama’, and the subsequent raid on Abbottabad, with the US president as its hero. The film is a 90-minute multi-million dollar commercial campaign to be made available across the US by October 12– in time for promoting president Obama’s re-election bid by depicting him as the saviour of America.The resolve to get out of Afghanistan by 2014 is also part of president Obama’s election campaign because two-thirds of the Americans now resent the Afghan war. But, should wars be started and ended (not to be the case in Afghanistan) to win elections? A long time ago, it was suggested by the saner commentators that NATO must handover peace-keeping to a force consisting of the armies of Afghanistan’s neighbours to assure end of this conflict on a credible and lasting basis, but it was rejected by NATO because it didn’t serve its aims–its presence in the Middle East and Central Asia. What will happen now remains to be seen.

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Anders Fogh Rasmussen

ditorialEE

June 201218

In May, Mr Yusuf Raza Gilani paid a longish state visit to the United Kingdom

where he got what he can very proudly call a ‘certification’ of his efforts in ‘consolidating’ democracy in Pakistan, from the British prime minister. In confronting a host of challenges that Mr Gilani now faces (especially to his status as a legitimate prime minister), this certificate could be handy because it comes from a person no less than the chief of the government in the country that has the distinction of having the ‘mother of all parliaments’.Unfortunately, however, this won’t work. While Mr Gilani is a convict, two thirds of the British voters now disapprove of Mr David Cameron’s performance, and three-quarters have the same feelings about Dy. Prime Minister Nick Clegg. That being the case, this certification is as doubtful as the degrees of many members of Pakistan’s parliament. Besides, the two prime ministers are following radically differing policies; that is why you wonder about the British prime minister’s being overly generous in complimenting his Pakistani counterpart for what he called ‘consolidating’ democracy in Pakistan.Courtesy Mr Cameron’s austerity drive and out-sourcing of basic public services (education, healthcare, civic amenities, and preparatory work for criminal case), since 2010, around 381,000 public-sector employees were laid-off but the private sector (now serving government offices) added over 634,000 to its ranks logically, it seems, at slightly more than half the salaries they were getting as government servants. However, Conservative MPs are not permitted to label the process as ‘out-sourcing’ because it offends the Liberal Democrats, who still want to be seen as the ‘left of centre’ politicians. In 2012, excluding London city, 41 English and Welsh constabularies will get ‘elected’ Commissioners, which is a radical departure from the current practice. This contrasts sharply with the policies pursued by Mr Gilani in the past four years of his tenure. Public sector enterprises, instead of being restructured for privatization, were saddled with ever-higher load of employees, in several cases twice the number required. There is no concern for adopting austerity. Mr Gilani has done practically nothing to trim the state offices whose huge expen-ditures account for almost the entire tax revenue that the country collects. For Mr Cameron, the cause of his losing popularity among the electorate is adoption of austerity.At the cost of annoying his electorate (the case everywhere in the over-exuberant EU member states), Mr Cameron managed to bring down the soaring public debt and fiscal deficit. It was just the opposite in Pakistan; under Mr Gilani, public debt, as well as fiscal deficit has broken all past records, and there is no chance that either will be brought down quickly enough to prevent Pakistan defaulting on repayment of both external and domestic debt. A begin-ning in this context has already been made, as several Inde-pendent Power Producers (IPPs) supplying electricity to the state on credit secured by sovereign guarantees have filed court cases on account of the state’s initial refusal to pay IPP

claims filed under these guarantees. This default was subsequently reversed after payment of Rs 32bn to the IPPs. Fears are now being expressed that the government may also default on its debt repayment commitments to commercial banks from which it borrowed heavily in the past two years. Should that happen, stability of the banking system could be at risk. Power shortages–result of non-payment of IPP bills–have shut vast sectors of the industrial

base, and thus forced the lay-off of over a million workers, just from the textile sector. Yet, no respite is in sight.Besides these glaring differences in the profile of governance under Mr Cameron and Mr Gilani, there are similarities too. The rise in lay-offs is fuelling the ‘Occupy’ movement in the whole of United Kingdom. In the demonstrations on May 9 and 10, over 30,000 policemen (in plain clothes) joined the demonstrators. What goes on in most Pakistani cities bears a marked resemblance, but people are on the streets not only because of job losses, but as much to protest over the long, unannounced power cuts that make life miserable for every-one-infant, child, man, or woman. In United Kingdom, the incumbent regime, particularly the prime minister, is labelled ‘out of touch with reality’ even by the Conservative MPs, and more seriously, there are growing doubts about the regime’s competence because it ‘struggles’ to foresee trouble before it unfolds. That’s not all; there are cases wherein the regime undid the Labour regime’s actions, realizing soon thereafter that it was a mistake. A delegator by nature, Mr Cameron is tied to his circle of long-standing aides, although the number of gaffes of his regime is rising. This is another stark similarity between Mr Cameron and Mr Gilani though, in this respect, Mr Gilani has done far worse; it is reflected in the number of cases wherein the Supreme Court of Pakistan was forced to take suo moto action. The final court action was Mr Gilani’s conviction, for which he and his party are openly insulting the Supreme Court, day in, day out. Mr Gilani has set some other amazing records as well; for instance, the frequency with which he removed the heads of National Accountability Bureau, Chief Prosecutors of Federal Investigation Agency, and the Attorney Generals– the worst in history. These changes reflect the corruption of the system because they involved individuals who were either investigating crimes or accepted state misconduct in courts. That’s not what Mr Cameron will ever do, nor should he pat anyone on the back, who is doing that. Why then he chose to commend Mr Gilani’s performance? Extending protocol to a visiting head of government (even if convicted) is not an odd phenomenon, but commending the ‘democratic’ performance of a head of government with Mr Gilani’s track record is indeed odd. Perhaps, it had more to do with a compromise whereby the ban on transportation of NATO supplies to Afghanistan would be lifted. It seems that the trick has worked. Signs are there that the ban would be lifted soon. How the Defence of Pakistan Council reacts thereto remains to be seen.

Of the two greatPrime Ministers

ditorialEE

June 201219

The peak of irresponsibilitySir, Becky Anderson of the CNN deserves accolades for what she did to Yusuf Raza Gilani when she interviewed him on his latest visit to Britain. Of the several questions she asked him the two that were most appropriate to elicit his views on his government’s credibility required him give his reaction to the fact that 79% of the Pakistanis no longer trust his regime and one-third of the Pakistanis think that they must leave Pakistan since the country’s condition is extremely bad; a fact none can deny.Mr Gilani’s responses to both questions were shocking. All he could say was “Who is stopping them? Why don’t they leave?” He may be bluntly refusing to comply with the verdict of the Supreme Court that asks him to quit but, such responses establish very credibly the fact that he is no longer fit to remain the Prime Minister. Shahid RazaKarachi British concern for democracySir, the way David Cameron went about ‘certifying’ the miserable conduct of Yusuf Raza Gilani in ‘consolidating’ democracy in Pakistan, was an awful reflection of the depth to which Britain’s values have fallen. It is indeed shocking that prime minister of the democracy that claims to have the ‘mother’ of all parliaments complimented a law-defying prime minister.Salman SiddiquiKarachiUnfulfilled promises Sir, the chaos that cripples every indus-trial town in Punjab, and to a lesser extent the rest of the country, appears directed at crippling Punjab’s economy because it is ruled by an opposition party. Perhaps the idea is to use this chaos for blaming the opposition during the next elections.

But a bigger disaster building up is pace of job losses, and rising poverty that propels petty crime and suicides. Mr Zahir Khan (Value Chain May 2012) rightly pointed to the fact that over a million have lost their daily livelihood. Much before the elections it could cause the downfall of the system, as warned by Justice Iftikhar Choudhury. The one thing that defines the conduct of our politicians is “lying shamelessly” about their failures. It applies to all of them.Abdullah AhmedLahoreAbout Value ChainSir, I acknowledge with thanks receiving a copy of your monthly magazine “Value Chain” (May 2012) sent by you to me for our record and ready reference. I congratulate you on the publication of informative and educative magazine and wish you continuing success. Thank you very much for sending the copy of your magazine.Prof. Dr. Khawaja Amjad SaeedLahoreSir, three cheers for an incisive and well articulated article (The eventual death of a promising bank) on our ‘alma mater’ in the May issue of the Value Chain. Great.Sirajuddin AzizKarachiExchange rate ‘tsunami’Sir, I write with reference to Mr Azeem Shaikh’s letter (Value Chain, April) on the subject. Indeed PTI’s promised tsunami may drown the corrupt, but a devastating exchange rate tsunami may hit Pakistanis without making any distinction.As witnessed on May 23, the Rupee will depreciate further each time SBP buys dollars from the banking system to repay IMF’s standby facility, or a large payment for oil imports is effected by the banking system. The growing trade deficit due to reduced export earnings can’t be met by inward remittances alone; foreign investment flows are equally important. But, given the awful governance scenario in Pakistan and its worsening perception abroad, this won’t happen and its foreign exchange reserves backing the Rupee will diminish thereby weakening the Rupee. Shakeel AnsariKarachiSir, the recent disclosure by the IMF that, in 2012-13 Pakistan’s foreign exchange reserves (up to US$10.5 billion) would be consumed by debt repayments, was a shocker. Mr. Azeem Sheikh (Value Chain, April) is correct in his estimates; without higher foreign exchange inflows in the form of FDI, development or standby loans, and external deposits, the reserves may drop to US$6 billion. This extent of the reserves simply cannot support the

The miseries of life are taking the better of the Pakistani’s senses. Yet another proof

thereof is the fact that, except the Karachi Art Council (KAC), no one remembered that May 13 was the death anniversary of Maulana Syed Faz-lul-Hassan Hasrat Moohani, the only politician to demand total independence for India, not the dominion status that it acquired in 1947. KAC forum too dwelt on his literary achievements.It is ironic that throughout the week begin-ning May 6, there was extensive coverage of the social stance of Sadat Hassan Munto–a unique though controver-sial novelist. Compare the achievements of both and you see the difference between the two. Hasarat Moohani was a poet par excellence, a journalist who set the highest examples of journalism and of protecting his columnists (by going to prison for publishing articles in his magazine authored by them) and, above all, a politician who spoke nothing but the truth and confronted the British imperialism steadfastly.Speaking at the Karachi Art Council’s conference on Hasarat Moohani, writer Masood Ashaar, who arrived from Lahore to participate therein, began his speech with a valid question asking why Moohani was being remembered only in Karachi when his literary works reach out to all Pakistanis. “It’s about time people get to know more about him” he added. He was right in making that comment because by ignoring our links with our admirable past, we are sinking more deeply into the pit of immorality, corrup-tion and inhumanity.The fact is that after graduating from Aligarh University in 1903, he began publishing a monthly magazine by the name of “Urdu-e-Moulla” which, aside from literature, was focused on Indian politics. His journalistic writing highlighted what-ever was happening around him, and his work reflected the bigotry of the British during that time. That’s why in the May 1904 session of the Indian National Congress, he was invited as a delegate and in 1905 he was requested to address the All India Industrial Conference that heralded what later became the “Sudeshi” movement.Dissatisfied with the Congress’s stand on many issues, along with Ganga Dhar Tilak, he left the Congress. There-after, the division of Bengal and then the beginning of WW-I were the events that galvanized his political thinking and his stand on these issues. As a result, he was again imprisoned–this time for his contacts with foreign powers; all he had done was to plan a visit to Kabul along with Mau-lana Abul Kalam Azad. In 1921, he committed the ultimate “crime” i.e. demanded total independence for India–a stand he never gave up–and much to the displeasure of Mahatma Gandhi, took a blunt stand by rejecting the Simon Commis-sion. In 1936 he finally agreed to join Muslim League that delighted Quaid-e-Azam, and in the 1945 elections, that installed a coalition regime comprising the Muslim League and Congress, he was elected a member of UP.

Assembly on Muslim League’s ticket and was also appointed a member of the Constituent Assembly. He served as an MP until the parti-tion of India, but decided to stay back to protect the rights of the Muslims left behind–a job he performed until his death in 1951, with exemplary courage and sincerity. The Quaid-e-Azam gracefully accepted Hasrat Moohani’s stand, and wished him well.To the Muslims left behind in India, he was infallible, and a staunch defender of their

rights. He was respected by India’s leadership for his struggle in securing India’s independence, and the indomi-table courage he demonstrated in confronting injustice and denial. In spite of his staunch religious beliefs, he was not one who would indulge in intolerance or bigotry; the Congress could not dare take any step that defied or even diluted these basic values. The mere fact that he could stay behind in India and vow to defend the Muslims reflected his political stature. In this context, the way he took the Congress to task over the anti-Muslim riots in 1949 remains an exemplary chapter in Indian history because Prime Minister Pundit Jawaharlal Nehru had to virtually shut up Sardar Patel and submit to the stand Hasrat Moohani had taken on the issue. Together, they convinced the people that, without peace their indepen-dence could yet again be at risk. Hasrat Moohani was among those who sacrificed everything for the sake of indepen-dence, but never considered it too high a price to pay.Should Pakistanis ignore such freedom fighters who gave up everything for the creation of Pakistan and for defend-ing the Muslims left behind in India? From the look of things, they do. A frail but passionate Mairaj Mohammad Khan lamented this harsh reality when he said “In our society, anyone who raises his voice against poverty, intoler-ance and vice, is shut up under a covert ban. People who stood by their principles and lived by their admirable rules now find no space in our history.” No wonder we now have a leadership that is devoid of a sense of morality and its obligations to the people.By forgetting the likes of Hasrat Mohani, we are commit-ting a serious error because we are depriving the next generation of a chance to understand and appreciate the merits of values that they must imbibe to become better human beings. What this will lead to, was amply demon-strated by recent incidents of copying during school and college examinations, a violent conduct of students when asked to desist from malpractices, and the gross disrespect they showed to their teachers. These are dangerous signs because they show that the next generation has little concern for civilized and moral conduct. Being bent on passing an examination without having the requisite knowl-edge reflects a mindset that ignores the illegitimacy of this act. Achieving success using fair means, which is crucial for developing a fair and just society, is fast losing its value.

Burying an admirable past, and sliding into immorality

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possibly make the US stand in line with the terrorists in the context of ruthlessness. Should that be the image of America? Surely, the American voters did not elect the present as well as the past regimes to manifest sheer ruthlessness? Or did they? It is time the Americans held their administrations responsible for exceeding their mandates in dealing with other nations.Undoubtedly, Americans have the right to defend their state and its sovereignty; there can’t be two opinions on this issue, but it can’t react in the ruthless Roman style, which is what it appears to be doing, and then wonder “why the world hates America?” The response of a developed (the most developed according to its own claim) state must not manifest only its muscle power, but one that induces other nations to look at their less than civilized conduct and realize the need to fall in line. Sadly, since the 1980s, the residents of the White House seemed inclined towards shouting louder, hitting harder, and destroying more than the foreign adversaries of the US. This trend virtually destroyed values such as moderation, decency, and justice in international affairs. The ruthless responses of the US, like the drone attacks that always kill many innocent without often targeting ‘supposed’ US enemies, have spread hatred for the US. On top thereof come reports about US plans to attack seven Middle Eastern states by 2015, and even such shocking reports that a senior instructor in the US military taught its future leaders that a “total war” against the world’s 1.4 billion Muslims would be necessary to protect US from Islamic terrorists. Among the options considered for that conflict were: using the lessons of Hiroshima or Malia (Vietnam) to wipe out whole cities in one go by targeting civilian population, wherever necessary.This course, held at the Defense Department’s Joint Forces Staff College, has since been cancelled by the Pentagon brass. It is only now, however, that details of the course have come to light. The course participants received hundreds of pages of course material along with reference documents. After all this, Chairman Joint Chiefs of Staff instructed the entire US military to scour its training materials to make sure it doesn’t contain similarly hateful material–an exercise that has been going on ever since. But the officer who delivered lectures in that course–Army’s Lt. Col. Matthew A. Dooley, has retained his position at the Norfolk, Virginia College, pending an investigation into this affair. All commanders (Colonels, Lt. Colonels and Captains) who sat in Dooley’s classroom listening to the inflammatory material week after week, have now moved into higher-level assignments throughout the US military. How will those who hear this react towards the US? It is tragic that a nation that has been blessed with every resource and ability to do good is being swayed away by the myth of power that never lasts.

he trial of the alleged terrorists imprisoned in Guanta-namo Bay by the US for years, has finally begun. Besides

exposing the crimes of the terrorists, the trial holds out some pretty embarrassing prospects for the US too because it will expose how prisoners were tortured, and may also force ‘discounting’ of the truth recorded by interrogators in prisoners’ statements of ‘admission of their crimes’. The fact that all the videotapes of the torture sessions have been destroyed places the US in a truly difficult position.The most controversial of all the torture techniques used was ‘water-boarding’ – invention of Jose Rodriguez, the top CIA torture expert. In a BBC TV programme telecast on May 11, CIA’s legal Counsel admitted that he could foresee the many legal complications the US government would confront, and had ensured that use of controversial torture techniques was approved by the highest authority in the US. But he admitted that he too couldn’t imagine the kind of pain water-boarding could inflict. He did admit that he saw the 92 videotapes of water-boarding of Abu Zubaida, but when asked to confirm whether it was true that Abu Zubaida experienced immense pain and even vomited during torture, he avoided answering the question clearly. While he admitted that the sanction for water torture existed, destroying the video tapes exceed that sanction. The fact that Abu Zubaida was water-boarded 183 times and those scenes were recorded on 92 videotapes, is now a known fact, which Jose Rodriguez couldn’t deny while responding to queries by the BBC reporter. He said his prime concern was protecting the CIA operatives who conducted the interrogation. This is an implied admission of the fact that what he and his fellow interrogators indulged in wasn’t legal–even under US laws.But he very emphatically justified his acts–developing water-boarding technique, using it on the prisoners, destroying the evidence thereof–all in the name of his total commitment to defending the US and its interests; his attitude suggested that he placed defence of the US above morality and justice with zero concern for the fact that the conduct of the state cannot even slightly resemble that of ruthless terrorists. How could an individual with such confused values rise to a top position in the CIA is amazing. Don’t the extended lectures of the US diplomats to the rest of the world on ethics and civilized way of governance lose their credibility courtesy Jose Rodriguez?Jose Rodriguez was not the least regretful about what he and his colleagues did at Guantanamo Bay. When asked about his views on his conduct, that exceeded his authority, at least to the extent of destroying critical evidence, his responses were brimming with hatred for Guantanamo Bay prisoners, show-ing clear bias that disqualified him to head the interrogators assigned to discover the truth. When asked to give his view on whether Khalid Shaikh Muhammad be hanged or given a life sentence, he said he didn’t want Khalid hanged; instead, he wanted Khalid to rot in prison until death. As the trial proceeds, more astonishing revelations are to be expected. The worrying aspect thereof is that the disclo-sures could further damage the image of the US. It could

Guantanamo Bay trials: the horrors they revealT

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An Afghan soldier opened fire on NATO troops in eastern Afghanistan on May 11, killing an American and leaving two others wounded.

Poland’s Parliament on May 11 agreed to gradually raise the retirement age to 67, despite strong opposition from trade unionists.

Two-time Pulitzer – prize winning German photographer Horst Faas, known for his haunting pictures of the Vietnam War, died on May 10 at the age of 79. He covered the Vietnam War from 1962 to 1974 and won a Pulitzer award in 1965 for his war photographs. He won a second Pulitzer in 1972 for his coverage of the conflict in Bangla-desh along with another AP photogra-pher, Michel Laurent, for the series “Death in Dacca.”

US authorities reportedly seized $ 1.5 million worth of proceeds from coun-terfeit goods made in China and sold online in the United States. The move was stated as the latest effort to target commercial intellectual property crime on the Internet, as part of the US government’s “Operation In Our Sites.”

China on May 11 accused the Philip-pines of escalating an already tense territorial dispute over the South China Sea following a noisy anti-Beijing protest in Manila.

Iranian MPs on May 14 condemned a planned union between Saudi Arabia and Bahrain and warned that the crisis in Bahrain will be transferred to Saudi Arabia and will push the region towards insecurity.

Donors pledge $ 4 bn aid for Yemen: Donors, with Saudi Arabia in the lead, pledged $ 4 billion in aid to impoverished Yemen on May 23 as it grapples with a fragile political transition and struggles to contain a growing threat by Al Qaeda.









rancois Hollande made history when on May 15, in a digni-fied ceremony in the Elyse Palace, he signed the formal

notice of takeover of power (from the out-going president) as the first leftist chief of the state after Francois Mitterrand who had been the president of France from 1981 to 1995. Mitter-rand was the first socialist to be elected by popular suffrage. The next socialist–Hollande–became the president by bagging 50.8 percent of the votes cast, compared to 49.2 percent for Nicolas Sarkozy who was the first sitting president since 1981 to lose a re-election bid, despite media support for his promise to “mod-ernize” France’s economy and institutions. Sarkozy’s defeat was not surprising; he had already read the writing on the wall when, on the narrow street outside the Palais bar in the Basque town of Bayonne, he saw the crowds raising the slogans “Sarkozy out” and “Sod off Sarko.” Even before he launched his re-election campaign, Sarkozy had told newsmen how he had contemplated the possibility of his defeat.

The eurozone debt crisis and France’s sluggish growth, coupled with high unem-ployment, hung over the entire election campaign. Paradoxically, therefore, one of the only ways Sarkozy could have won was by selling himself as an international fire-fighter and problem-solver, protecting France from the eurozone crisis. But, instead of diverting his skills and energies towards solution of the crisis, he plunged

himself into a crusade against immigration, halal meat, blaming Islam for the troubles in the French society, and claiming to protect the Christian roots of Europe. Sarkozy is blamed for trapping France in a downward spiral of austerity and job losses. The French dislike ostentation so much that they have named it twice—“bling, bling”, and Sarkozy became known as “the president of the rich.” He had promised to restore the values of work and reward. Instead, he turned out to be the one who left France with around one million more unemployed and millions others struggling to make both ends meet. The rich got richer on the back of his tax breaks for them. There was wage increase for the presidency which he claimed he deserved for working hard, a 55,000 euro watch, and the ex-supermodel wife. In his capacity as interior minister during 2002 to 2004, Sarkozy was known as a blunt and tough man but when he became the president of France he was a changed man altogether-transformed into a man with a thin skin and short temper and vindictive against anyone who dared to cross him. His sex scandals, instances of exercising undue influence on the media, accusations of racism, especially Islamophobia, also contributed to his downfall. Allegation that the country’s richest woman, Liliane Bettencourt, illegally financed his election campaign in 2007 also played a role in Sarkozy’s defeat. There were reports that Bettencourt’s staff handed over envelopes full of cash amounts of 50,000 euros to Sarkozy’s aides to finance his election campaign in 2007 in open violation of France’s electoral code where individual election campaign contribution must not exceed 4,600 euros.

What Went Wrong?

F But the decisive factor that contributed the most to Sarkozy’s defeat was his inability to overcome the economic crisis which had engulfed the whole of Europe, France included. He had promised a free-market France to prosper in a globalised world. But what France experienced under him was an unprec-edented rise in unemployment, closure of factories and other businesses, and high growth in the number of those who felt that the country’s economic security was on the edge. Whether Sarkozy will have a chance to “have a great life in politics” as he said just weeks ahead of the election results or, as he said previously, he would engage himself in money-making exercise in the private sector, it is hard to suggest at this point of time. The first pressing issue for him at present would probably be to face the justice system once he loses his presidential immu-nity and is called upon to testify to judges investigating allegations of illegal campaign funding. Another investigation he has to face is the allegation of kickbacks from French arms sales to Pakistan in the early 1990s that secretly funded the failed presidential campaign of Sarkozy’s mentors Edouard Balladur of whom he was campaign spokesman. Sarkozy has denied his involvements in either but will have to substantiate his denial before the court of justice.The presidency of France would be tough and testing for Hollande too. In his election campaign, Hollande, vowed to turn the page on austerity and invest in the future. What he said during his electoral campaign raises questions as to how France will change its approach to economic policy in the context of the eurozone crisis engulfing the whole of Europe. Hollande seems to have a clearer strategy to move in this direc-tion. His strategy consists of three main ideas viz growth, social inclusiveness and budgetary discipline, adoption of the supply side approach to growth (impliedly increasing output to bring down inflation, and earn higher returns via higher turnover, not higher prices), and need for EU to pursue both budgetary discipline and a complementary growth package. After his investiture he promised a presidency of dignity, simplicity and soberness. He vowed that the state will be impartial because it belongs to all of its citizens and insisted that a united France could meet the challenges on the social and economic fronts.What Hollande said at the investiture ceremony raises hope of optimism. “I take stock today of the force of the pressures our country is under: massive debt, feeble growth, high unemploy-ment, damaged competitiveness, a Europe that is struggling to get out of the crisis,” Hollande said adding “but nothing is inevitable as long as a clear course has been set, and we apply all our strengths and the assets of France [to deliver a more prosperous society].” The new Socialist government under Francois Hollande got down to work with the first order of business as symbolic 30 percent cut for the President and his ministers thus setting an example as the government looks to tackle France’s troubled public finances. It remains to be seen just how much will things change with him as the President of France. The challenges are far too great.

Nicholas Sarkozy Francois Hollande

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On May 11, the Interna-tional Energy Agency (IEA) raised slightly its outlook for growth of oil demand this year but warned that risks of a shock from Iran persisted despite easing prices and a supply boost by OPEC.

A Memorandum of Understanding between Turkey’s Bayegan and Saudi Arabia’s Advanced Petrochemicals was signed on May 3 in Istanbul to invest 1 billion dollars in constructing a plastic plant on Turkey’s eastern Mediterranean coast. A full joint venture agreement for the plant will be signed before September.

Republican–controlled House panel has cut the US foreign aid budget by some 9 percent, targeting the cuts on economic aid and contributions to the United Nations and the World Bank.

According to government data released on May 10, the US trade deficit widened to $ 51.8 billion in March as imports surged to an all-time high.

Fitch Ratings on May 22 cut Japan’s long term foreign currency rating by two levels from AA to A plus. It cut the more impor-tant local currency rating by one notch from AA minus to A plus. Fitch warned further downgrades were possible unless the government takes new fiscal policy measures to stabilize public finances and its ratio of debt to gross domestic product.

Banking shares around the world tumbled on May 11 after the US biggest bank, JP Morgan Chase & Co., said it had racked up losses of 2 billion dollars in risky trading since the start of April.

Hong Kong’s economic growth slowed sharply in the first quarter of the year due to sluggish exports and a weak global economy. The economy grew 0.4 percent year-on-year in the first three months of the year compared with 3.00 percent in the fourth quarter of 2011.

on May 11 as the economy recovers from last year’s historic flooding.

German Finance Minister Wolfgang Schaeuble forecast on May 18 that market turbulence at the heart of the eurozone’s sovereign debt crisis would calm within a year or two.

China’s economy showed unex-pected signs of weakness in April with lower than expected output data, soften-ing retail sales and easing prices suggest-ing economic headwinds might be stiffer than thought, requiring more robust policy responses to counter them.

Addressing a gathering of EU diplo-mats at the “50th Anniversary of Pak-EU Relations” at Presidency on May 9, President Asif Ali Zardari said that Pakistan is now ready to engage with the European Union on General-ised System of Preferences plus and a Free Trade Agreement.

Prime Minister Tayyip Erdogan said on May 20 that Turkey’s debt to the IMF has fallen to $ 1.9 billion and the country will clear the debt by April 2013.The amount owed to the IMF stood at $ 2.9 billion at the end of January.

Thailand’s economy grew a record 11.0 percent in the first quarter from the previous three m onths, rebounding from last year’s severe flooding and strong full-year growth is expected due to a jump in consumption and invest-ment after the disaster.

The IMF on May 22 said Britain might need to further slow the pace of its tough austerity measures to lift the country’s growth amid the risk of a major eurozone ‘shock.’

Japan was the world’s major creditor in 2011, for the 21st consecutive year, reflect-ing corporations’ aggressive foreign acqui-sitions and Japan’s prodigious foreign currency intervention.

Presenting its twice-yearly economic forecasts on May 11, the Euro-pean Commission said that Spain would run a deficit of 6.4 percent of economic output this year and 6.3 percent next year, with both targets substantially above levels already agreed with EU. The report further said that France, the euro zone’s second largest economy, will also miss its 2013 budget deficit goal of 3 percent by a wide margin.

India’s inflation reportedly acceler-ated in April to 7.23 percent as price pressures for food, fuel and manufac-tured items all picked up.

Governing Council member Luc Coene reportedly said on May 13 that the European Central Bank is likely to lower its growth forecast for the euro zone in June and could cut interest rates further if necessary.

The Asian Development Bank said on May 5 that corruption and bad governance have been major obstacles to reducing poverty at a faster pace in the Asia-Pacific region. The Bank was of the view that corruption must be avoided and governance must be substantially improved.

China’s annual economic growth could slow to 7.5 percent in the second quarter, largely due to curbs on the property sector and headwinds from external demand.

The Bank of England on May 16 cut its forecast for British growth and warned that the eurozone debt crisis was the biggest threat to recovery.

Bank of Tokyo-Mitsubishi UFJ, which handles most of Japan’s payments for oil imorts from Iran, has reportedly frozen transactions with Iranian banks after being ordered to do so by the New York District Court.

The Spanish trade deficit fell by 29.4 percent in March from the figure 12 months ago, providing a glimmer of hope for the recession hit eurozone country.

US President Barack Obama has announced $3 billion in private sector pledges to help boost agriculture and food production in Africa.

Thailand’s central bank, The Bank of Thailand, raised its 2012 economic growth forecast to 6.0 percent from 5.7 percent

T

Chicago conference: chatter of the egoists?

he meeting of the NATO members’ heads of state failed to achieve one of its key objectives–persuading

Pakistan to lift its ban on transportation of NATO supplies to Afghanistan from Karachi’s seaports. It was largely because of US refusal to apologize for its deadly attack on the Salala check post on the Afghan-Pakistan border in November 2011 that resulted in the death of 24 Pak soldiers.At the Chicago summit, NATO’s Secretary General Anders Fogh Rasmussen admitted that “We can’t solve the problems in Afghanistan without the positive engagement of Pakistan.” But the fact that he and the US president Obama made it a point to openly snub President Asif Ali Zardari did not reflect a mindset committed to resolving the problems, of which there are plenty now.No one has any doubts about the fact that the regime led by Asif Ali Zardari is probably the most pro-US regime that this country has ever had. This regime came into power because of the National Reconciliation Ordinance that was brokered by the US and Britain to thrust on Pakistan a regime that was going to be unsupportive of Pakistan’s military and judiciary. Not surprisingly, these NATO allies kept their mouths shut throughout the past four years over the regime’s conduct as reflected in the mismanagement of the state via its cronyism, corruption, embezzlements and blatant defiance of the court verdicts. This silence proved beyond doubt that the Western rhetoric about democracy is a cover for what it wants, which is to install a regime that is incompetent and corrupt.How dumb or, perhaps distress-ridden, are the regimes in the US and NATO member states was proved by the fact that they snubbed their trusted rulers of Pakistan at a time when these rulers are under threat of being overthrown. Was this the time to do so? What the Western governments can’t see is that the demand for a US apology–a part of the long list of demands passed by Pakistan’s parliament–must be respected to sustain the Zardari regime since defying it would mortally hurt this regime that claims, almost every day, the supremacy of the parliament even over the highest courts of law.Fulfilling at least this demand (if not the others) would have afforded some credibility to the collapsing Zardari regime; to denigrate this demand of the country’s parliament amounts to strengthening the view that even the staunchest backers of the regime–US and Britain–too have lost faith in its ability to deliver on any promise. It is amazing that the NATO leaders don’t seem to realize where they stand in the context of exit from Afghanistan at a time when almost every one of them is short of resources. Squeezing another yet bad deal purely on the strength of NATO’s muscle is a dumb strategy. If the regime in Pakistan fails to re-open its land routes for NATO supplies, will NATO invade Pakistan? Or, will agreeing to Pakistan’s terms under pressure strengthen NATO’s image? Apparently, leadership is now in the hands of those who lack two key attributes–tact and vision; only ego drives them. It is manifestly wrong to deny the losses suffered by Pakistan in the past, as well as those that it continues to suffer due to the Afghan war. Besides all other losses, damage to

its highways on account of movement of some 35,000 NATO containers a year runs into billions of Rupees. To refuse admit-ting this fact and, in the process, further damage Pakistan’s already shattered physical infrastructure, is hardly a civilized conduct.A classic blunder of the Pakistani regime led by Yusuf Raza Gilani–praised by David Cameron for ‘consolidating’ democ-racy in Pakistan–was the line it took in dealing with NATO over re-opening the supply routes. Over time it should have become obvious to this regime that seeking aid was a dumb policy; Americans don’t believe in it anymore. Seeking higher charges (on cash basis) for transporting NATO’s containers was the non-controversial route to adopt.It is odd of NATO to label Pakistan’s revised transportation charges as ‘extortion’. It reflects how it looks at Pakistan–its ‘strategic ally’. NATO isn’t bothered about Pakistan’s losses, the biggest of them being the ‘image loss’, and its huge cost that Pakistan will go on paying for years, more so if regimes like the present ‘democratic’ regime are thrust on it courtesy its NATO ‘allies’. Pakistanis now believe that the US cares only for its interests no matter what it costs the rest of the world. It is defending Shakeel Afridi because he was serving US interests not Pakistan’s and the demand that he shouldn’t be tried may also have to do with ensuring that he does not tell who really was the fellow killed in the raid–Osama or...... US demand that he shouldn’t be tried since he helped locate an entity considered a common enemy by Pakistan and the US, could have sounded credible if the raid on Abbottabad to kill Osama (or his duplicate) was carried out jointly by the US and Pakistan. But that was not the case. What should the Pakistanis think? Should they believe that the US is the ‘Over Lord’ that can have its agents here to do things without the knowledge of the country’s government, and the agents of the Over Lord can’t be held accountable. Sounds similar to the philosophy being touted by Pakistan’s regime according to which anyone elected to the parliament is beyond accountability even by superior judiciary. Isn’t this the setting for an era of total lawlessness or the supremacy of the powerful no matter how evil? Is this what is being taught at the highly-rated American and European universities? From the look of things, that seems to be the case. Barack Obama, Hillary Clinton, Leon Panetta, David Cameron, Anders Fogh Rasmussen and the others, acquired education in these very universities and based thereon developed their mindsets and abilities that they reflect in their conduct. Besides failing to do what was required on the key issue–NATO-Pak relations–the meeting also didn’t do much to resolve the problems of the Eurozone, the European missile defence system, or the entry of more former Soviet republics into NATO, because exit from Afghanistan took most of the conference’s time.

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Army and civilian leadership of Pakistan in Islamabad on May 2 discussed new rules of engagement with United States following the signing of a highly important strategic agreement between US and Afghanistan on May 1.

US Defence Secretary Leon Panetta has said the US will continue to launch drone strikes against militant sanctuaries in Pakistan even if Islamabad keeps opposing them.

Top Bar associations of the country at a meeting held on May 5 in Lahore rejected appointment of ad hoc judges in the Supreme Court. They also demanded their representation in the Judicial Commission of Pakistan for the appointment of superior court judges.

The Supreme Court released on May 8 the detailed verdict in contempt of court case against Prime Minister Yousuf Raza Gilani. The verdict raised the possibility that the Prime Minister could face a five-year disqualification from being elected to parliament or a provincial assembly.

Addressing a press conference in New Delhi, India on May 8, US Secretary of State Hilary Clinton pressed Pakistan to do more to stamp out home-grown terrorism making sure that its territory is not used as a launching pad for terror-ist attacks anywhere, including inside of Pakistan.

The Punjab Assembly on May 9 adopted resolutions demanding the restoration of Bahawalpur’s status as a province and creation of a separate province “Southern Punjab”.

The US Congress on May 10 proposed stopping preferential trade with Pakistan and reducing aid to just 10 percent of available funds unless Islamabad re- opened NATO supply routes. The law-

makers also approved a proposal to stop all reimbursements to the country if Pakistan continued to ignore US demands.

After a meeting with Prime Minister Yousuf Raza Gilani, David Cameron, Prime Minister of UK resolved to build on a deeper and stronger relationship with Pakistan and said that the future of Pakistan matters greatly to Britain. He agreed on building up ties in trade, defence, health and education sectors.

Chaudhry Pervez Elahi, Senior Federal Minister, addressing workers’ convention of his party on May 13 said that PML-Q would consider parting ways with the government if PPP did not resolve the problem of load shedding.

Addressing a women convention on May 14 in Karachi, Jamaat-e-Islami Pakistan chief Syed Munawwar Hassan said that restoration of NATO supply to Afghanistan would lead to repetition of incidents like Salala.

Addressing a press conference in Islamabad on May 22, the Turkish premier Recep Tayyip Erdogan endorsed Pakistan’s demand for an apology from the US for the Salala border post attack that left 24 Pakistani troops dead. About the government- opposition confronta-tion in Pakistan he advised the opposi-tion to be constructive and serve the country and people.

Barrister Aitzaz Ahsan told reporters on May 15 that the conviction of Prime Minister Yousuf Raza Gilani through a short order by the Supreme Court was illegal and unconstitutional.

Pakistan has reportedly yet to get 2.9 billion dollars under Coalition Support Fund while an amount of 8.7 billion dollars of the total 11.6 billion dollars has been received under the Fund since 2002.

ome of the market observers found it odd that US Secretary of State

chose to pay a quick visit to India precisely when the biggest-ever Indo- Pak business parlays were on in Lahore to begin a process of reconciliation, and increase bi-lateral trade to the level where it ought to be, given the critical advantages afforded by the fact that these neighbours can minimize the impact of transportation cost that has soared because of the rise in oil price. What rendered the Secretary of State’s visit more suspect was the fact that she also chose this visit to announce a discovery – that, like Osama Bin Laden, Ayman Al Zawahiri too was in Pakistan and pressed India to push Pakistan to hand over an alleged terrorist–Hafiz Saeed–who the US has not accused of terrorism in the US but has nevertheless announced a reward on his head. When Pakistan seeks clues about locating a US-identified terrorist, the response is “sorry, that’s secret”. This makes it seem like a well-planned strategy to establish as firmly as possible that Pakistan harbours terrorists and can’t be trusted to catch them. In turn, it also justifies US aerial raids like the one on May 2 last year to ‘kill’ a fellow that we must accept was Osama Bin Laden, though no independent witness was there to confirm the dead man being Osama Bin Laden. Above all, it justifies the drone attacks and now the US firmly believes that its drone strikes are wholly legal and within the parameters of international law. At the end of her visit, the Indian Foreign Minister renewed the call for handing over Hafiz Saeed. Besides, the visit also triggered a big goof. The following day, an Indian TV channel telecast a story in which photographs of two small Lahore- based businessmen, and a security guard of the mall where they have their shops, were flashed labelling them as terrorist hiding in Bombay with the intent of carrying out a terrorist attack. The day the attack was to occur, all three appeared in a TV talk show in Lahore and none appeared a terrorist. The show had its desired effect; the participants were furious and voiced anger at the ongoing Indo-Pak business parlays. Interestingly enough, while the Indian secret services showed their calibre in handling the issue that could have substantial self-damaging fallout, it was exploited as the manifestation of India’s traditional enmity–something least desirable for both India and Pakistan. All this happened on a Lahore-based TV channel that now regularly shows advertisements of USAID. The other purpose of the US Secretary of State’s visit was to convince India not to buy Iranian oil, a sacred cause that she has been pursuing for the past several months. But if you ask her “whether the US can provide oil”, she will look at you in amaze-ment implying what a dumb question it is. Where you buy oil from is not her worry; all she tells you is not to buy from Iran. It is the epitome of diplomacy, American style. In spite of the genius reflected in its diplomacy, the US insists that the world should follow its advice (i.e. command).

Pakistan, Iran’s next door neighbour, is the worst victim of America’s campaign of hatred against Iran because Pakistan is virtually on fire due to energy short-ages that are crippling its business and industry and, the resulting protests all over the country are adding a lethal dimension to its internal security prob-lems, all of them rooted in its tactless partnership (under Gen. Zia-ul-Haq) in American intervention in Afghanistan beginning the 1980s.

During the past four years, the projects that could transmit Iran’s energy to Pakistan (one for transmission of natural gas and the other for transmitting electric power) were opposed tooth and nail by the US escalating Pakistan’s woes, more so under a regime, which is simply incapable of doing anything right, especially plugging the country’s energy gap which calls for, to say the least, focused efforts in conserving energy and tapping the leaks in its transmission system.The US has nothing to offer to remedy this problem–the one that could destabilize Pakistan to the point of no return. This scenario strengthens the view that, destabilizing Pakistan to that point is what the US actually wants. But you can’t blame the US for not being bothered about how nations face their problems, especially resource deficits, because the US is not bothered anymore about helping other countries–including its strategic allies–courtesy its war on terror that it blames on religious extremism.The fact, however, is that what triggers terrorism is poverty thrust on people in the poor Muslim states by the US-backed oil-rich regimes in the Middle East via continuously rising oil price since early 1990s. You can’t ask the US why it couldn’t do something sensible, fair and compassionate to resolve this global mess rather than use the gun. The country that ended WW-II by dropping atom bombs on Hiroshima and Naga-saki, can’t offer a solution other than the use of the gun (thank God, not atom bomb, at least as yet). By all counts, this profile of the US is the biggest tragedy on this planet because, given its massive industrial base and 60 percent of the world’s gold reserves back in 1945, it had the muscle to make the world a prosperous and less volatile place to live. A well orchestrated campaign of US parliamentarians (now joined in by NATO’s Secretary General) wherein Pakistan is being threatened with tough economic sanctions, is aimed at pushing Pakistan into reopening the land route for NATO supplies to Afghanistan. Shortly before the US Secretary of State arrived in India, Pakistan’s Defence Minister too warned at a press talk that if Pakistan does not lift the ban on transport of NATO supplies to Afghanistan via land route, it would be slapped with economic sanctions. He was merely conveying (on behalf of the US and NATO) a warning to the Pakistanis to behave and let the ban be lifted. Helping Pakistan out of its economic mess isn’t a priority of the US and NATO who are Pakistan’s strategic allies; they only ask for “doing more.”

Do more, don’task for helpS

oliticsPPoliticsPP

June 201224

Prime Minister Yousuf Raza Gilani on May 1 announced increase in minimum wage of workers from Rs.7000 to Rs. 8000 per month. Mean-while, Punjab Chief Minister Shahbaz Sharif announced a raise in the minimum wage of labourers from Rs.7000 to Rs.9000 per month.

President Asif Ali Zardari on May 7 signed the Stock Exchanges ( Corporati-sation, Demutualisation and Integration) Act 2012 to further strengthen the country’s stock markets.

Pakistan Workers Federation on May 1 reportedly rejected the Prime Minister’s announcement of chipping Rs. 1000 in minimum monthly wages and suggested that the minimum monthly wages should be Rs. 14000.

Indian investors have reportedly shown willingness to invest $ 20 to 50 billion in Pakistan in mining, petroleum, energy, power and infrastructure projects.

South Korea has reportedly expressed keen interest to invest in setting up solar power projects of 300MW power in Pakistan. The projects will be both off-grid and on-grid and will mostly be established in Sindh province.

Massive rise in debt servicing cost has reportedly resulted in increasing the budget deficit to 4.2 percent of the GDP in July to March period of the current fiscal year 2011-12 as against the upward revised target of 4.7 percent of GDP for the whole fiscal year.

China has reportedly expressed willingness to set up an oil refinery near Karachi with an investment of $ 5 billion and has requested the Government of Pakistan to identify 4000 acres of land for this purpose.

European Union is likely to increase the number of quota restricted items from 20 to 23 in the EU package for Pakistan, which will hamper prospects of export growth and better price realiza-tion for the country.

Pakistan and United Kingdom on May 10 agreed to take effective steps to increase bilateral trade to about $ 4.1 billion by 2015 and to ensure that Pakistanis illegally residing in the UK return home under existing agreements.

The United Nations Economic and Social Survey of Asia and Pacific projected the economy of Pakistan to grow by 4 percent during the year 2012 compared to 2.4 percent growth in 2011.

Overseas Pakistanis reportedly remitted $ 10.877 billion in the first 10 months of the current fiscal year showing an impressive growth of 20.23 percent over the remittances during the same period last year.

According to Pakistan Bureau of Statistics, the trade deficit of the coun-try surged by 45.01 percent to $ 17.649 billion during the first 10 months of the current fiscal year as against $ 12.171 billion during the same period last year.

Australian High Commissioner to Pakistan Tim George has said that the Australian government will provide an estimated A$ 96.4 million or Rs. 8.83 billion in official development assistance to Pakistan in 2012-13.

Pakistan’s nuclear scientist Dr. Samar Mubarakmand has said that through underground gasification (UGC) technology, electricity can be generated at Rs. 3 to 4 per unit while diesel can be produced at $ 40 per barrel.

Speaking at a reception in his honor at Hyderabad Chamber of Commerce and Industry on May 14, the Consul General of Germany Dr. Tilo Klinner told the business-men that the German companies were interested in increasing agricultural imports.

The federal government’s borrowing for budgetary support spiked to a record level of Rs. 1.058 trillion, swelling by 58 percent during the current fiscal year. The borrowing includes Rs. 445.144 billion from the State Bank of Pakistan and nearly Rs. 613 billion from other scheduled banks.









O

History being madein Pakistan

n May 26, Mr Yusuf Raza Gilani became Pakistan’s longest serving Prime Minister. That’s not the only

distinction he has earned; he is also the PM during whose term the largest-ever variety of new records was created. It includes the frequency with which the top brass in federal ministries was changed to replace the more principled with the more pliant ministers, chief secretaries, attorney generals, heads of FBR, NAB, FIA, ANF, ABP, etc. Then there is the longest-ever list of acts of mismanagement, corruption, and embezzlement committed during a four year period because key administrative positions in offices of the state and the state-owned enterprises (SOEs) were provided to his regime’s favourites and investigations into their acts of misconduct were thwarted to secure the vested interests. However, the crowning event was Mr Gilani’s conviction on the charge of contempt of Supreme Court and his interpreta-tion of the court verdict was interpreted by majority of legal experts another contempt of the court. Meantime, complying with instruc-tions of the court, its Registrar notified Speaker National Assembly and the Chief Election Commissioner (CEC) the verdict convict-ing Mr. Gilani, asking both to take appropriate action in their respective capacities i.e. Speaker National Assembly should advise the CEC to suspend Mr Gilani’s membership of the parliament.But for very special reasons, the Speaker National Assembly decided not to do so because according to her, Mr Gilani did not commit contempt of court and it was inappropriate on the part of the Supreme Court Registrar to notify her (even though on behalf of the Supreme Court) to take appropriate action because it amounted to portraying the Speaker’s office as a post office. Should the court have suspended the membership of Mr Gilani’s itself or, for the sake of decorum, left this step to be taken by Speaker of the National assembly? Is that not how a responsible court must act in the matter? The Speaker National Assembly did not notice the fact that some parliamentarians too had committed the same error– contempt of the court–while defending Mr Gilani in public meetings and in the media. The PPP now insists that its MPs holding public offices can’t be accused of contempt of court since they have been elevated to their respective positions by ‘public mandate’. The sole logic behind this line of argument is numbers, neither morality, nor principles, and above all, no respect for the law. That’s another ‘first’ in Pakistan’s history. Aitzaz Ahsan–a PPP stalwart–says his party does not accept the short order in the case as well as the June 7 deadline for filing an appeal against the detailed verdict. He said, after the ruling given by Speaker of the National Assembly, the CEC cannot pass a suspension order against Mr Gilani. Endorsing the speaker’s ruling he said in the 1962 Constitution, Speaker had the role of a post office, but not anymore. Impliedly, the Speaker can now overrule even the Supreme Court. That is yet another ‘first’ in Pakistan’s history. The Speaker’s view that Mr Gilani did not defame or ridicule the judiciary denies clear references to the PM’s disregard of the judicial direction to write to Swiss authorities to re-open money laundering cases against President Asif Ali Zardari as stated in

the December 16, 2009 verdict against the National Reconcilia-tion Ordinance, and thus committing contempt of court.Immediately upon his convic-tion, Mr. Gilani had said that he will file an appeal for review of the Supreme Court’s verdict. That appeal was prepared for filing, but only after PPP’s top brass gave its green signal. Accord-ing to Aitzaz Ahsan, that appeal contained 146 objec-tions to the Supreme Court’s ver-dict, and was to be filed on May 25, but at the last minute the PPP leadership decided against filing the appeal. Impliedly, Mr Gilani remains a convict – yet another ‘first’ in Pakistan’s history. But why should the PPP worry about this stigma? Hasn’t Mr Gilani been certified by the British Prime Minister as the man who is ‘consolidating’ democ-racy. That is some certificate! Not surprisingly, Mr Gilani has used that certificate more than once by to establish his credentials as the PM despite being a convict. Former law ministers and legal experts think that Mr Gilani did not file an appeal because he feared that Supreme Court may formally disqualify him in the appeal, rather than leave it to the Speaker National Assembly or the CEC. The last thing the PPP wants is a humiliation of this sort; it finds nothing wrong with Mr Gilani staying a convict because that, at least assures retaining power for a few more months. But these experts claim that there was no legal protection to the ruling of the Speaker National Assembly, and it can be contested in the court, which is what Pakistan Tehreek-e-Isaf and PML-N have done, but what if the Speaker National Assembly again consigns the court verdict to the dustbin?The regime is overjoyed at its backing by Britain and the US, and finds it odd why Pakistanis now question its credentials; what doesn’t occur to the regime is the killing impact of the political and economic mess that it has nourished over the last four years. The people, whose mandate the regime claims as its authority to rule supreme, are now on streets all over Pakistan, and are demanding the regime’s exit. According to the last Gallup poll 79% Pakistanis want just that; oddly, Mr Gilani thinks he has fulfilled 80% of PPP’s election mandate.Even if one sets aside all other deficiencies and distortions of the system the two that are eating away the very roots of the country’s unity and stability are the slide in internal security arrangements, and power load-shedding. In fact, power load- shedding is compounding lawlessness. This scenario did not develop overnight; it was developing but those who couldn’t see it were Pakistan’s ‘democratic’ regime and all its strategic allies who have been using it for their purposes, nothing else. The saga is that they both claim always being right and also being above the law. Some combination, isn’t it?

oliticsPP

June 201225

Restoration of PACCS demanded: The business and industrial community of the country has demanded of the government to restore Pakistan Auto-mated Customs Computerised System.

MOU with CCC signed: Rawalpindi Chamber of Commerce and Industry signed a MoU with Ceylon Chamber of Commerce of Sri Lanka which aims to encourage mutual understanding and promote business and friendly relations among the industrial, trade and business communities of Pakistan and Sri Lanka.

Need stressed for ensuring uninter-rupted power supply to textile sector: Chairman, All Pakistan Textile Mills Association (APTMA) Mohsin Aziz has appreciated the government efforts for ensuring five days a week gas supply to captive power plants of industry and exemption from load shedding to independent feeders of textile industry. He said that the textile industry is fully capable of achieving $ 20 billion exports target if it is guaranteed uninterrupted supply of electricity and gas for 24/7 throughout the year and its financial problems are appropriately addressed.

Strategy to Explore Natural Resources: The Islamic Chamber of Commerce and Industry on May 11 stressed the need for developing a comprehensive strategy to explore and utilize natural resources to contribute towards the economic development of the country. Trade between Pakistan and Sudan: In his meeting with the Governor of Khartoum in Sudan, LCCI Senior Vice President said that Pakistan and Sudan need to enhance the two-way trade volume which at present was below the trade potential. He said that the bilateral trade analysis of the last three years calls for greater efforts to be made to initially get it over the $ 100 million mark.

Pak-Korea Trade Potential: President, Karachi Chamber of Commerce and Industry, Mian Abrar Ahmad has under

Indo-Pak Investment Treaty: Speak-ing at Indo-Pak economic conference in Lahore on May 8, former President of Confederation of Indian Industry and Chairman Bajaj Auto Limited, Rahul Bajaj called for finalization of bilateral investment treaty between India and Pakistan that will encourage foreign direct investment in both the countries. He dispelled the impression that open-ing the door for Indian investment in Pakistan will hurt the interests of Pakistan business community.

Indo-Pak Trade Potential Fantastic: Business Forum of Punjab President, Ibrahim Qureshi said on May 8 that potential for Indo-Pak trade was fantas-tic and time had come to open trade relations between the two countries. He said that the business community should act as a pressure group to lobby for a congenial environment to bilateral trade between India and Pakistan.

Power load shedding: Pakistan Indus-trial and Traders Association Front (PIAF) has urged the government toexempt industrial estates from electricity load shedding to avoid irreparable losses to the national economy.

Import of medicines from India opposed: Chairman, Pakistan Pharma-ceutical Manufacturers’ Association (PPMA) Muhammad Asad told a select group of journalists on May 9 that the domestic pharmaceutical industry may face a tough time if the government allows import of medicines from India after granting the country MFN status.

Pak-Iran Banking Channel: Talking to Mashhad Mayor Syed Muhammad Pejman, KCCI President Mian Abrar Ahmad called for introducing banking channel and making arrangements for currency swap to enhance Pak-Iran bilateral trade.

Cut in Fuel Tariffs: Small traders have demanded of the government to imme-diately cut fuel tariffs by 30 percent and freeze price for at least three years.

lined the need for building trading blocks of Pakistan with Asian countries, Central Asian Republics and SAARC countries. Exchanging views with the ambassador of South Korea to Pakistan, Choong Joo Choi, he said that immense opportunities exist to enter into joint ventures in Pakistan in alternate energy, agriculture and engineering sectors.

Furniture Industry Potential for Export Earnings: Members of the Pakistan Furniture Council on May 5 said the government has totally ignored the furniture industry which has a vast potential to get its due share from the international trade volume of $ 32 billion, out of which Pakistan is getting only $ 8 million. They suggested the government must reduce duty on furni-ture raw material, control deforestation, support industry and consider it as the sixth duty-free industry of Pakistan.

Indonesian MPs Visit LCCI: A 5-member parliamentary delegation from Indonesia visited Lahore Chamber of Commerce and Industry on May 5 and desired to further strengthen the existing trade and cultural relations with Pakistan.

LCCI, ACCA Strategy for Economic Growth: At a pre-budget discussion on May 3 in Lahore, the Lahore Chamber of Com- merce and Industry (LCCI) and Associate Chartered Certified Accountants create opportunities for investment, industrialization and employment generation.

Lay-offs and Industrial Closures: President, Lahore Chamber of Com-merce and Industry, Irfan Qaiser Sheikh has expressed deep concern over prolonged load shedding and demanded of the government to seriously resolve the energy crisis that are hitting all sectors of the economy including trade, industry and agriculture.

Commercial Import of Used Vehi- cles: All Pakistan Motor Dealers Associa-tion on May 9 demanded of the govern-ment to allow commercial import of used vehicles of up to 10 years to provide relief to the common customers.









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Federal Budget-Saarc CCI Proposals: Vice President, Saarc Cham-ber of Commerce and Industry, Iftikhar Ali Malik, while addressing business community at FPCCI Capital Office, on May 19, said that the govern-ment should introduce a budget that could trigger economic activity in the country. He said that foreign funds and investments had dried up which called for focused efforts to mobilize domestic resources. He proposed a powerful economic council comprising former finance ministers, SBP governors, FBR chairmen, judges, business leaders, and technocrats which could guide the government on economic matters.

Funds for Thar Coal: Pakistan Industrial and Traders Association Front has demanded of the Federal Finance Minister to immedi-ately release funds for Thar Coal project.

Trade with India: All Pakistan Textile Mills Association Chairman, Mohsin Aziz has adopted a cautious approach towards trade with India, saying that bilateral trade between Pakistan and India, though being need of the hour, should be based on level playing field, reciprocity and comparative advantage.

Electricity Price Freeze: Textile export-ers in their meeting with Federal Power Minister Syed Naveed Qamar demanded to freeze the electricity prices for six months, abolishing the fuel adjustment surcharge as frequent increase in prices and surcharges was hitting all sectors of the economy, disrupting the economic cycle and jacking up inflation in the country.

Discrimination in Tax- able Income: Multan Chamber of Commerce has demanded that all types of income should be taxed and there should be no discrimination in taxable income to end corruption. The Chamber demanded inclusion of 0.7 million wealthy people in tax net who were not paying direct taxes to the government.

LCCI President Irfan Qaiser Sheikh also criticized the 16 percent hike in power tariff and said it would not be doing any service to the government unless it chalks out a plan to control line losses and electricity theft, and convert oil based power generators to coal as in India where more than 60 percent of electricity is produced through coal.

SCCI Recommendations for Federal Budget: Sarhad Chamber of Commerce and Industry in its recommendations for Federal Budget 2012-13 called for broad-ening of tax base, reducing the tax rate and preventing from passing further burden on the existing tax payers.

Direct taxes model proposed: The Lahore Chamber of Commerce and Industry on May 19 advocated the implementation of direct tax model in line with the advanced economies instead of indirect taxes.

Kalabagh Dam: Former Chief Minister of Khyber Pakhtunkhwa, Engr. Shamsul Mulk said on May 21 that the country is suffering a loss of Rs. 132 billion annu-ally and this amount can be saved by initiating construction of Kalabagh Dam . LCCI President Irfan Qaiser Sheikh also supported the idea and said that further delay in construction of Kala- bagh Dam will cost this country.

Decline in Foreign Investment: Business community on May 22 expressed grave concern over sharp decline in foreign investment that fell sharply by $ 926.6 million or 66.5 percent to $ 466.5 million during July-March 2011-12 against $ 1.393 billion in the corresponding period last year.

Law & Order Situation in Karachi: President, Lahore Chamber of Com-merce and Industry, Irfan Qaiser Sheikh, has expressed grave concern over deteriorating law and order situation in Karachi and suggested that the government should immediately convene an All Parties Conference wherein business leaders should also be invited to find out a strategy to cope with this menace once for all.

Single Tariff of Electricity: Textile exporters have demanded single tariff of electricity abolishing all surcharges, which would help the industrialists to schedule their production plan and control their production cost.

Iranian Ambassador visits LCCI: Speaking at the Lahore Chamber of Commerce and Industry (LCCI), the Iranian Ambassador to Pakistan Ali Raza Haghighian pledged to enhance the volume of two-way trade to 10 billion dollars from existing a bit over one billion dollar. He said that talks on gas and electricity projects are well on way and would be materialized soon. Speaking on the occasion, LCCI president called for measures to curb smuggling that is coming in the way of expansion of two-way trade.

Bilateral Trade with Iran: Vice Presi-dent, Federation of Pakistan Chamber of Commerce and Industry (FPCCI), Zubair Ali, while talking to Iranian Consular General, Hassan Darwishwand called for promoting trade relations between Pakistan and Iran as this can usher economic revolution in the region.

Pak-Africa business relations: Speaking at Africa Show, arranged by LCCI in Lahore on May 24, African ambassadors underlined the need for strengthening bilateral and business relations between Africa and Pakistan. The Ambassadors pledged to work for promotion of Pak-Africa trade and announced formation of Africa-Pakistan Friendship and Business Association comprising ambas-sadors and high commissioners of African region and three Lahore Chamber of Commerce and Industry representatives.

US firms keen to invest in KP: Address-ing businessmen and industrialists during a visit to the Sarhad Chamber of Commerce and Industry on May 24, US Commercial Counselor Brian McCleary said that American companies are keen to invest in Khyber Pakhtunkhwa and elsewhere in Pakistan. He expressed optimism about bilateral trade engagement between Pakistan and the US and said there were a number of projects on ground to boost up economic relations between the two countries. Speaking on the occasion, SCCI President Afan Aziz said that balancing trade relations were essential for improving bilateral ties between Pakistan and the US.









reserves were expected to decline to $8.2bn from their level of $11.4bn till June 2012 due to a substantial rise in external debt servicing burden. Projections about end-2011-12 indicators and targets set based thereon were considered over-optimistic by the market observers.PSDP–most important given a backdrop of expanding gaps in the country’s physical infrastructure–was considered too little. What made the implementation of the PSDP doubtful was its make-up; federal share Rs 350bn and provincial share Rs 425bn. Could the provinces actually accumulate a surplus of Rs 425bn for investment in the PSDP? Such prudence has been a rarity in the past.What made the official hopes, estimates and predictions even more doubtful was the fact that it was assumed that, besides generating a surplus of Rs 475bn for investing in the PSDP, the provinces will also generate additional revenue surplus of Rs 110bn. Finally, what made the analysts wonder were the repeated promises by the Prime Minister, Finance Minister and Chairman FBR that no new taxes would be levied, and the rates of the existing taxes too will remain un-changed.Pakistan’s current internal and external circumstances, a huge rise in the burden of domestic and external debt servicing, a depressed investment environment due power load-shedding and rampant lawlessness on the streets, and Pakistan’s rising country risk perception doesn’t justify over-optimism. In fact a frightening aspect of this chaos is the slide in law enforcers’ confidence in their abilities and rising public hatred for them. According to Zafar Iqbal Qadri, Chairman National Disaster Management Authority, Pakistan will experience "a terrible" flood in the coming monsoon due adverse climate changes; that flood could affect 29 million people across the country.That, belatedly, the government too realized the importance of paying attention to the ground realities, was proved by the last minute efforts to, at least for once, sound credible on its promises of eliminating unannounced power load-shedding. Besides, the government also took steps to slow the ongoing slide in popularity such as asking Malik Riaz to cough up the amount sought by Somali pirates to free Pakistani mariners. The other publicity gimmick was to send a plane to India to bring back Dr Khalil Chishti–a job that could be done at a far lower cost by asking the Pak High Commission in India to arrange Dr Chishti’s travel by PIA, and ask two officers to accompany him on the flight to take care of him. But such moves only added to the analysts’ doubts about any realism being reflected in the budget 2012-13, because their fore-gone conclusion was that the budget was being twisted to fulfil the publicity needs of the regime in an election year.

�e setting forBudget 2012-13

n Baluchistan and Khyber Pukhtunkhaw, terrorism goes on as before. After the botched ‘Layari operation’, crime is

again rising on the streets of Karachi. In the rest of Pakistan, on a daily basis, power load-shedding brings thousands of angry citizens on to the streets and, to everyone’s amaze-ment, they damage the power distribution infrastructure, and set on fire public transport vehicles–all self-damaging acts. Surely, they are not the frustrated Pakistanis; in their ranks are those who have been asked to destroy whatever they can. Bank robberies have again picked up. A recent investigative exercise to screen the identity and capabilities of the security guards employed by private security agencies (prompted by the rise in bank robberies) revealed that many of the guards were untrained, and knew nothing about the use of the arms they were carrying; many were laid-off labourers, launderers, plumbers, gardeners, even ex-criminals.During a recent TV interview of Mr Yusuf Raza Gilani (that he gave to the CNN) the anchor had to ask him to look into her eyes. She also informed him that, according to a recent opinion poll, only 20 percent of the Pakistanis consider him a competent Prime Minister and nearly a third are frustrated with governance in Pakistan to the point where they want to leave Pakistan. In response Mr Gilani said “Why don’t they? Who’s stopping them?” His reply stunned the anchorperson. Rumour has it that the banking sector has finally expressed its reluctance to reduce the circular debt of the power sector that is again close to Rs 740bn, by investing in more T-bills or GoP bonds. Consequently, the government is planning to sell these T-bill/bonds to those few state owned enterprises that still have some liquid resources. What will happen once this resource too has been consumed is anybody’s guess. According to the latest statistics released by the State Bank of Pakistan, during the current fiscal year, fresh investment, both domestic and foreign, dropped to about half its level of last year. But in this chaotic environment (to contain which the government has yet to show any credible concerns or its commitment,) it’s officials are coming up, almost every day, with high economic growth promises that are amazing.In the Annual Plan Coordination Committee (APCC) report released in mid-May, the prediction was that, during 2012-13, almost every sector would grow by 4 percent or above, and foreign direct investment (FDI) inflow would be $1.940bn, although FDI in the first ten months of the current financial year amounted only to $590mln. APCC’s 2012-13 estimate of FDI was based on the assumption that by June 30, 2012 FDI inflows would touch $840mln.It was also assumed that exports will touch $26bn implying a growth of 7.3 percent over the 2011-12 target of $24.8bn but exports actually recorded until April 2012 amounted to only $19.4bn and there is no way they could touch the target of $24.8bn. However, assuming that this would happen, it was predicted that the trade deficit would drop to $16.8bn from its projected level of $17.65bn for June 2012. In spite thereof current account deficit was expected to rise to $5.2bn from its level of $4.2bn targeted for June 2012 and official foreign exchange

II

EEconomy

June 201227

s this issue of the Value Chain went for printing, the federal finance minister

presented the Federal Budget 2012-13 amid fist-fights between coalition and opposition parliamentarians. All credit to PPP and PML-Q parliamentarians who protect-ed Mr Yusuf Raza Gilani and the finance minister, giving the finance minister just enough time to read the budget speech. Did the parliamentar-ians hear the speech, is anybody’s guess. The other shocker was that taxation proposals– always kept confidential till the last minute–were somehow leaked to the media earlier in the day.The finance minister prioritized the ‘popularity’ aspect of the budget by announcing over a dozen minor tax reliefs such as allocation of Rs 70bn for BISP, additional discounts to BISP cardholders by Utility Stores, 20% ad hoc relief to the federal government employees in pay and pension, and income tax exemption for those earning less than Rs 0.4mln a year. This provided the pro-regime MPs a fair amount of ammunition to confront the budget’s critics. Commendable smart work.That said, the bigger issues can’t be sidelined. The fact is that the economy is hardly growing. The claim that LSM output grew by 1.8% over last year is indeed amazing because, given the year-long power load-shedding, it would be miraculous if the LSM sector in Punjab actually produced higher output. A factor that adds to the doubts is the revision of growth rates in the past two months (down to 3.67% from earlier claimed 4.2%) as well as the growth rates in 2009-10 and 2010-11. It is highly likely that the presently claimed rate of 3.67% may be revised downwards following consolidation of the figures after June 30. Equally questionable is the rate of inflation. A growth rate of 10.8% over last year would be miraculous given just three big factors: continuous rise in fuel price and power tariffs and a steady slide in the exchange rate of the Rupee. Just sum up these rates of change and the total exceeds 13%. For 2012-13 the budget envisages inflation to fall to a single digit. But in 2012-13, power sector subsidy would also be slashed from its current level of Rs 464bn to 187bn. In this backdrop, hopes of inflation coming down seem optimistic. If inflation stays high, it would be hard to justify lowering or even freezing of mark-up rates, and the Rupee too will depreciate. Then how will the cost of doing business come down to cut inflation?The killing weakness, however, would be caused by a slide in the exchange rate of the Rupee. We may fault the Governor SBP for telling what he told the Wall Street Journal although he was only repeating what the IMF said in its latest report; that Pakistan’s foreign exchange reserves would deplete by a hefty $10bn during 2012-13 after servicing of external debt. What the regime must honestly accept is that its mismanagement of the economy and internal security has worsened the crisis because foreign investment which is badly needed, and for which huge potential exists, is now virtually coming to a halt leaving little hope for build-up of exchange reserves.

The clear indicators of consistent economic mismanagement since March 2008 are the persistent slide in the tax-to-GDP ratio, public debt to GDP rising to over 58% and servicing of public debt now accounting for nearly 75% of tax revenue after transferring 57% thereof to the provinces. The build up of resource shortfall is amply portrayed by the fact that since June 2008, public debt has doubled because, each year since June 2008, borrowing by the federation overshot its target by as

much as 100%. As admitted by the finance minister in his budget, the reason therefor is FBR’s inability to tax the rich.The finance minister claims that tax collection may go up by 28% in 2011-12. Fine, but the fact that the tax-to-GDP ratio keeps declining proves that this isn’t enough. The way FBR compromises with the powerful on the subject of taxing just the assets (not income that is hard to ascertain), is shocking. FBR has yet to effectively impose and recover capital gains tax on real estate and stock trading. What the people expect from the state is action, not regrets for its failures.Besides often incorrectly blaming the previous regime for the distortions in the economy, losses caused by floods in 2010 and 2011 are quoted as the reason for excessive borrowing by the federation. True; the losses did occur and had a huge impact since they also forced import of essential food items and drained Pakistan’s foreign exchange reserves. But gross waste of resources on repair work was unfortunate. What the finance minister overlooks is the fact that devastating floods have been forecast for 2012. Without providing for the drain on resources they will cause, the projected fiscal deficit is Rs 1,105bn; what will be the deficit after incurring those losses?Add to this scenario the almost unchecked rise in the losses of the state-owned enterprises that have been on the list for privatization since 2008. With prospects of foreign inflows fading away, reliance will be on inward remittances from the Pakistanis living abroad. But that will not be enough because depletion of exchange reserves and the expected widening of trade deficit will hasten the slide in the exchange value of the Rupee and will escalate inflation much faster leading to even more threatening civil unrest than it is now. The only option that the government will have is to print more currency, and add to the already killing inflation. All this paints a worrying picture of the economy 2012-13 onwards. Should these be the fruits of democracy? For once Shahbaz Sharif–a great supporter of democracy–has finally admitted that people place good economic management above their love for democracy. This is an implied admission of the fact that the slogan-mongering politicians have proved incapable of economic management–the harsh truth–but the coalition partners don’t accept it. What worries the students of history is the clear sign of anarchy seen recently in Faisalabad and now spreading to other towns and cities including Karachi that is already crippled by frequent economic activity freeze caused by target killings that occur virtually every day.

It may sound odd, but the vital economic survey was released just a day before the annoucement of the federal

budget leaving virtually no time to read and understand how the economy perfromed during the first nine and in some cases ten months of the current fiscal year. That is not all; in many cases, comparative figures pertained to periods that were not logically comparable. The most amaz-ing revelation was that ninety three percent of Pakistan’s population has access to clean water. Then there were usual doubts about the accuracy of statis-tics about GDP growth, fiscal deficit, public debt and servicing - all key indicators reflecting the perfromace of the regime and the level of prudence that it exercised in making optimal use of taxpayers’ money. As can be seen in the statatics, either the targets set for 2011-12 have not been met or have been exceeded marginally because of fiscal indiscipline that was rampant throughout the year and was also repeatedly exposed by reports about resource misuse. Given below are the highlights of the economic survey.

• Real Investment has declined from 13.1% of GDP last year to 12.5% in 2011-12; fixed investment declined to 10.9% of GDP in 2011-12 from 11.5% last year.

• Private investment also contracted to 7.9% of GDP in 2011-12 as compared to 8.6% of GDP last year.

• Public investment was 3.0% of GDP in 2011-12 vs. 2.9% last year.

• National savings formed 10.7% of GDP in 2011-12 vs. 13.2% in 2010-11.

• Foreign Direct Investment stood at $668mln during July-April 2011-12 vs. $1,293mln last year.

• Workers’ Remittances grew 25.8% in 2011 over their 2010 level. Monthly average during July-April 2011-12 was $1.09bn compared to $0.90bn in the corresponding period last year.

• Overall fiscal deficit was at 5.0 % of GDP in July-April 2012 against 5.5% during the comparable period last year.

• Under PSDP, Rs 304 billion were released that facilitated completion of 200 projects.

• SBP lowered the discount rate by 200 bps to 12%.• Net Domestic Assets during July-May 2011-12 rose to Rs

881bn vs. Rs 482bn during the same period last year; rise in this indicator mainly reflected a rise in public borrowing.

• The weighted average lending rate (including zero mark- up) on loans was 12.8% p.a. while weighted average deposit rate (including zero mark-up) was 6.98% p.a. and in March 2012, the spread stood at 5.8%.

• KSE 100 index was at 12,496 on June 20, 2011; at 14,618 on 7th May, 2012. and closed at 13,877 on June 1, 2012

• During July-March 2011-12, stock markets experienced a net outflow of $176mln.

• Food and non-food inflation averaged 11.1% and 10.7% respectively during July-March 2011-12 vs. 18.8% and 10.8% in the same period last year.

• Exports during July-April 2012 were $20.5 billion compared to $20.46 billion last year.

• Imports grew by 14.5% touching $33.1bn during July-April 2012.

• Current account deficit stood at $3.4bn.• Foreign exchange reserves fell to $16.5bn at the end of

April 2012 vs. $17bn at end-April 2011.• Pak Rupee depreciated by 3.4% during July-April 2011-

12 vs. depreciation of 2.2% in July-April 2010-11.• Public debt stood at Rs 12,024bn on March 31, 2012 and

was 58.2% of the GDP. • At end-March 2012, servicing of public debt amounted to Rs

720.3bn vs. budgeted amount of Rs 1034.2bn for full year. • Total of mobile subscribers reached 118.3mln by end-

March 2012.• During July-March 2012, Rs 8 billion has been disbursed

to 350,485 beneficiaries by EOBI. • The level of access to drinking water is quite “impressive”.

According to Pakistan Bureau of Statistics, Pakistan Social and Living Standards Measurement Survey 2010-11, access to drinking water to urban and rural population of Pakistan is 94% and 84%. The MDG target is a ratio of 93% by 2015.

EEconomy

June 201228

Highlights of the Economic Survey 2011-12

• GDP growth in 2011-12 is estimated at 3.7% vs. 3.0% last year.

• Remittances are estimated close to $13 billion, a rise of 16%.• FBR’s tax collection target for 2011-12 was Rs 1,952bn.

During July-April, collection stood at Rs 1,445bn against Rs 1,149.8bn in July-April 2010-11, showing a growth of 24%.

• Agriculture recorded a growth of 3.1% vs. 2.4% last year. • The Large Scale Manufacturing (LSM) growth was 1.1%

during July-March 2011-12 against 1.0% last year.• The total flood damages were estimated at Rs 324.5bn

($3.7bn). Rehabilitation and cost of recovery is estimated at Rs 239 billion ($2.8bn).

• Commodity sector grew by 3.3% against 1.5% during 2010-11. • Major Crops registered growth of 3.2% compared to a

drop of 0.2% last year. • Forestry grew by 0.95% compared to contraction of

0.40% last year. • Construction Sector grew by 6.5% compared to a drop

of 7.1% last year. • Mining and quarrying grew by 4.4% during July-March

2011-12 compared to a drop of 1.3% last year. • Electricity and gas distribution witnessed negative growth

of 1.6% against negative growth of 7.3% last year. • Services sector grew by 4.0% during July-March 2011-12

vs. 4.4% last year. • Finance and Insurance grew by 6.5%, Social and Com-

munity Services by 6.8 % and Wholesale and Retail Trade by 3.6%.

• Private consumption grew by 11.6% compared to 3.7% last year and government consumption grew by 8.2% compared to 5.2 % last year.

• Private consumption expenditure reached 75% of GDP and public consumption reached 13% of GDP.

• Per capita real income grew by 2.3% compared to 1.3% last year i.e. from $1,258 in 2010-11 to $1,372 in 2011-12.

t the Chicago summit of the NATO heads of government, President Barack

Obama said that NATO’s decision to end combat operations in Afghanistan by next summer and withdraw all Western troops by 2014 is irreversible. The promise has less to do with political rationality, but far more with the economic distress the West confronts that forced this policy. But a hasty withdrawal without fulfilling NATO’s promises–security, sustainable economy, democracy, women’s rights, or anything close to that–is an abject failure. Tom Donilon, Obama’s National Security Adviser, said “the goal [now] is to have an Afghanistan again that has a ‘degree’ of stability so that forces like al-Qaeda and associated groups cannot have unimpeded safe haven.” In other words, instead of ‘eliminating’ al-Qaeda from the region, the revised aim is a ‘degree of stability’, but with Kabul and just a few other cities protected by Afghan forces while the coun-tryside falls back into the hands of the Taliban, that ‘stability’ may be a dream. NATO leaders acknowledge that, following the withdrawal of their forces, large portions of the Kanda-har and Helmand provinces would slide back into chaos. With the Afghan economy almost at a standstill, even limited targets like a functional physical infrastructure, essential civic services and a functioning civil service and judiciary, that are necessary to assure basic economic stability, would be hard to achieve. Given this setting, it would be impossible for any regime in Kabul to afford the 350,000 strong defence force that NATO promises to put in place before its exit. Experts believe that this force could soon be downsized to 100,000 because NATO’s annual funding support of $4.2bn (proposed by president Obama) for Afghanistan appears inadequate for the purpose. Without reaching an understanding with the Taliban (despite German and Qatari efforts), Afghanistan could yet again turn into a battleground wherein tribal rivalries, ruthlessness, and greed would rule supreme–a possibility accepted by president Obama while winding up the NATO summit by saying “Are there risks involved in it? Absolutely.” This was an indication of the fact that the summit failed to outline and agree upon a strategy that could protect the Afghan government against a threat of overthrow, acute ethnic divisions and civil war, or an internal collapse precipitated by economic crisis. The scenario reminded many of the chaos that Viet Nam inherited when the US finally exited from the country that it had divided and destroyed. Outcomes like these undermine the credibility of NATO and raise questions about its ‘peace-keeping’ efforts. After Iraq and Libya, Syria too may become another example of the gulf between NATO’s proclaimed aim and its real aim. Even Obama admitted that departure of NATO forces will leave behind a mess. “I don’t think there is ever going to be an optimal point where we say, ‘this is all done,’ this is perfect; this is just the way we wanted it. It is a [dirty] process, and it’s sometimes a messy process.”

Obama isn’t honest while claiming that, by 2014, the war “as we understand it” will be over. This war won’t be ‘over’ until the Taliban, Americans, and president Karzai reach an agreement whereby peace returns to Afghani-stan. While it is now fashionable to blame Pakistan for every evil that goes on in Afghani-stan, the fact is that the Saudi-backed Wahabi Sunnis and their wholly non-compromising attitude (in true Saudi style) is to blame for the ongoing conflict, and the failure to form a

coalition composed of a ‘balanced’ leadership. After the summit, the Taliban are reported to have said in a statement that once NATO occupation of Afghanistan ends, “Afghans can reach a resolution regarding their country.” It was a statement that deserved a response to elicit a Taliban clarification on exactly how this reconciliatory process would begin. Will it actually lead to what the US diplomats now call a “good enough Afghanistan”? It may be “good enough” for a relieved West, but what prospects does it hold out for the neighbours of Afghanistan? If the Tajik, Uzbek and Pashtun factions again go for each other’s throat, will its neighbours again not become hosts to millions of refugees?This lasting misery was started by the Soviet Union and then sustained and exploited by the US and its allies, wholly to the disadvantage of Afghanistan and its neighbours. But despite this undeniable reality, the West still claims to be the peace-keeper and insists that it be allowed to play that role globally. The reality is that the world has to pay for what in the West’s view is right or isn’t; traditional civilized values don’t matter anymore. An example thereof is the support for Dr Shakeel Afridi who is openly being defended by every US diplomat, and they may soon be joined by president Obama. The merit this fellow has is that he was a covert US agent in Pakistan.Given this backdrop the task of image building also becomes partly the job of a Hollywood-Pentagon combo. Despite losing the Vietnam War the US won it on the cinema screens. Once again it is time for director Kathryn Bigelow to make a movie on the events prior to operation ‘Get Osama’, and the subsequent raid on Abbottabad, with the US president as its hero. The film is a 90-minute multi-million dollar commercial campaign to be made available across the US by October 12– in time for promoting president Obama’s re-election bid by depicting him as the saviour of America.The resolve to get out of Afghanistan by 2014 is also part of president Obama’s election campaign because two-thirds of the Americans now resent the Afghan war. But, should wars be started and ended (not to be the case in Afghanistan) to win elections? A long time ago, it was suggested by the saner commentators that NATO must handover peace-keeping to a force consisting of the armies of Afghanistan’s neighbours to assure end of this conflict on a credible and lasting basis, but it was rejected by NATO because it didn’t serve its aims–its presence in the Middle East and Central Asia. What will happen now remains to be seen.

O

EEconomy

June 201229

Highlights of theFederal Budget 2012-13

n June 1 the federal finance minister announced the federal budget amid angry demonstrations by the

opposition parties. The key aspect of the taxation proposals was many minor tax reliefs whose net impact would be additional tax revenue of Rs 31.77bn but they made the budget truly an ‘election-year’, and hence apparently ‘popu-lar’ budget. But, as this magazine went for printing, the proposals came under harsh scrutiny for their miniscule effect and prospects of even higher public debt given the existing load of unpaid public debt.Budget Highlights • Inflation reduced to 10.8%.• Current expenditure registered 10% decrease.• Total budget volume for 2012-13 is Rs 2,960bn.• Gross revenue receipts in 2012-13 would be Rs 3,234bn.• FBR’s tax collection target for 2012-13 is Rs 2,381bn.• Budget deficit is likely to remain at Rs 1,105bn (net of

surplus of Rs 80bn to be generated by provinces).• Rs 1,459bn would be transferred to provinces under

NFC Award.• Remittances by overseas Pakistan will cross $13bn mark

during 2012-13.• GDP growth rate is expected to be 3.7% as compared to

3.4% during last two years.Major achievements in 2011-12• Industrial growth would be 3.4% against 3.1% last year.• Subsidy of Rs 390bn has already been given to electric-

ity sector during 2012-13.• Govt gave relief of Rs 70bn on petroleum products.• Govt injected 3500MW of electricity to the National Grid.• Total volume of grants reaches 70% of Divisible Pool.Support for education in 2012-13• 100,000 youth to get internships, technical training.• 20,000 graduates will be imparted skilled training to fulfil

domestic and foreign manpower demand.• Federation will finance 11,500 jobs for Baloch youth.• Bachelor and master’s degree holders will get 40,000 intern-

ships each, in public and private sector.• Rs 16bn will be allocated for Higher Education.• Federation will pay fees of students (for PhD and masters

courses) from Baluchistan, Fata, and Gilgit-Baltistan.• 18 raw materials and 9 components used in textbook printing

will be exempted from Customs Duty.Relief to citizens in 2012-13• Rs 70bn will be allocated for BISP.• Utility Stores will offer 10% additional discount to BISP

cardholders.• Federal government employees will get 20% ad hoc relief

in pay and pension.• Income exempted from tax enhanced up to Rs 400,000.

Taxation measures for 2012-13• Minimum gross turnover tax reduced from 1% to 0.5%.• Withholding tax ceiling for cash withdrawal from banks

enhanced from Rs 25,000 to Rs 50,000.• FED abolished on 10 items.• FED on cement cut from Rs750 to 500 per metric

tonne.• Customs duty reduced from 10 to 5% on 88 raw materi-

als of Pharmaceutical Industry. • Sales Tax rate reduced from 17% to 16%.• Subsidy of Rs 50bn will be given on fertilizer.• No withholding tax on profit on intra-group debt. • All manufacturers made withholding agents to collect

1% advance tax. • Excise duty on cigarettes has been increased. • Sales tax on steel sector has been enhanced. • FED on air travel in economy and economy plus classes

has been reduced but raised for business and first classes. • Sales Tax on tea imports has been cut to 5% from 16% • Tax arbitrage enjoyed by banks on money market funds

has been closed; it will now be taxed at 25% for tax year 2013 and at normal rate of 35 % in 2014.

Development• National Economic Coordination Council has approved

Annual Development Plan of Rs 873 bn.• Federation will provide additional Rs 154bn for projects

(recommended by parliamentarians) outside PSDP.• Federation has allocated Rs 360bn under PSDP for 96

ongoing projects.• Rs 69bn earmarked for Electricity sector, and WAPDA

and electric companies will be given Rs115 bn.• Rs 84bn allocated for Transport and Communication

(Rs 51bn for NHA, Rs 23bn for Railways).• Baluchistan share increased to 9.09% in Divisible Pool.• Block Development Allocation enhanced up to Rs 16bn

for Gilgit-Baltistan.• Rs 10bn allocated for mega projects in Gilgit-Baltistan.• Rs 17bn allocated in PSDP for Fata.• Rs 12bn allocated for development projects in Azad

Kashmir, and Rs 16.5bn for current expenditure besides a loan of Rs 8.5 bn.

• Major aims to be achieved in 2012-13: • Inflation would be cut down to single digit.• Government will set up 2,000 new Utility Stores.• Pakistan will get 2bn cubic feet of gas from Pak-Iran gas

pipeline, Turkmenistan-Afghanistan-Pakistan-India gas pipeline.

• 500mln cubic feet of LNG will be made available.• Rs 10 billion will be allocated for Export Development

Fund.

n May, Mr Yusuf Raza Gilani paid a longish state visit to the United Kingdom

where he got what he can very proudly call a ‘certification’ of his efforts in ‘consolidating’ democracy in Pakistan, from the British prime minister. In confronting a host of challenges that Mr Gilani now faces (especially to his status as a legitimate prime minister), this certificate could be handy because it comes from a person no less than the chief of the government in the country that has the distinction of having the ‘mother of all parliaments’.Unfortunately, however, this won’t work. While Mr Gilani is a convict, two thirds of the British voters now disapprove of Mr David Cameron’s performance, and three-quarters have the same feelings about Dy. Prime Minister Nick Clegg. That being the case, this certification is as doubtful as the degrees of many members of Pakistan’s parliament. Besides, the two prime ministers are following radically differing policies; that is why you wonder about the British prime minister’s being overly generous in complimenting his Pakistani counterpart for what he called ‘consolidating’ democracy in Pakistan.Courtesy Mr Cameron’s austerity drive and out-sourcing of basic public services (education, healthcare, civic amenities, and preparatory work for criminal case), since 2010, around 381,000 public-sector employees were laid-off but the private sector (now serving government offices) added over 634,000 to its ranks logically, it seems, at slightly more than half the salaries they were getting as government servants. However, Conservative MPs are not permitted to label the process as ‘out-sourcing’ because it offends the Liberal Democrats, who still want to be seen as the ‘left of centre’ politicians. In 2012, excluding London city, 41 English and Welsh constabularies will get ‘elected’ Commissioners, which is a radical departure from the current practice. This contrasts sharply with the policies pursued by Mr Gilani in the past four years of his tenure. Public sector enterprises, instead of being restructured for privatization, were saddled with ever-higher load of employees, in several cases twice the number required. There is no concern for adopting austerity. Mr Gilani has done practically nothing to trim the state offices whose huge expen-ditures account for almost the entire tax revenue that the country collects. For Mr Cameron, the cause of his losing popularity among the electorate is adoption of austerity.At the cost of annoying his electorate (the case everywhere in the over-exuberant EU member states), Mr Cameron managed to bring down the soaring public debt and fiscal deficit. It was just the opposite in Pakistan; under Mr Gilani, public debt, as well as fiscal deficit has broken all past records, and there is no chance that either will be brought down quickly enough to prevent Pakistan defaulting on repayment of both external and domestic debt. A begin-ning in this context has already been made, as several Inde-pendent Power Producers (IPPs) supplying electricity to the state on credit secured by sovereign guarantees have filed court cases on account of the state’s initial refusal to pay IPP

claims filed under these guarantees. This default was subsequently reversed after payment of Rs 32bn to the IPPs. Fears are now being expressed that the government may also default on its debt repayment commitments to commercial banks from which it borrowed heavily in the past two years. Should that happen, stability of the banking system could be at risk. Power shortages–result of non-payment of IPP bills–have shut vast sectors of the industrial

base, and thus forced the lay-off of over a million workers, just from the textile sector. Yet, no respite is in sight.Besides these glaring differences in the profile of governance under Mr Cameron and Mr Gilani, there are similarities too. The rise in lay-offs is fuelling the ‘Occupy’ movement in the whole of United Kingdom. In the demonstrations on May 9 and 10, over 30,000 policemen (in plain clothes) joined the demonstrators. What goes on in most Pakistani cities bears a marked resemblance, but people are on the streets not only because of job losses, but as much to protest over the long, unannounced power cuts that make life miserable for every-one-infant, child, man, or woman. In United Kingdom, the incumbent regime, particularly the prime minister, is labelled ‘out of touch with reality’ even by the Conservative MPs, and more seriously, there are growing doubts about the regime’s competence because it ‘struggles’ to foresee trouble before it unfolds. That’s not all; there are cases wherein the regime undid the Labour regime’s actions, realizing soon thereafter that it was a mistake. A delegator by nature, Mr Cameron is tied to his circle of long-standing aides, although the number of gaffes of his regime is rising. This is another stark similarity between Mr Cameron and Mr Gilani though, in this respect, Mr Gilani has done far worse; it is reflected in the number of cases wherein the Supreme Court of Pakistan was forced to take suo moto action. The final court action was Mr Gilani’s conviction, for which he and his party are openly insulting the Supreme Court, day in, day out. Mr Gilani has set some other amazing records as well; for instance, the frequency with which he removed the heads of National Accountability Bureau, Chief Prosecutors of Federal Investigation Agency, and the Attorney Generals– the worst in history. These changes reflect the corruption of the system because they involved individuals who were either investigating crimes or accepted state misconduct in courts. That’s not what Mr Cameron will ever do, nor should he pat anyone on the back, who is doing that. Why then he chose to commend Mr Gilani’s performance? Extending protocol to a visiting head of government (even if convicted) is not an odd phenomenon, but commending the ‘democratic’ performance of a head of government with Mr Gilani’s track record is indeed odd. Perhaps, it had more to do with a compromise whereby the ban on transportation of NATO supplies to Afghanistan would be lifted. It seems that the trick has worked. Signs are there that the ban would be lifted soon. How the Defence of Pakistan Council reacts thereto remains to be seen.

Analysts have identifiedseveralreasons for the decline of the Indian rupee. One of the reasons given is trade imbalance.

Devaluation of Indian Rupee

Currency devaluation is not a new phenomenon; it has been around in all times and ages. It is a natural process

in the history of financial markets. One of the biggest devalu-ation wave in history was in 1930s when at least nine of the leading world economies devalued their national currencies. In the recent past, world currencies have passed through a difficult phase of history in terms of devaluation. Indian Rupee is no exception. During the last about a year or so, India’s rupee is in freefall losing value against US dollar. The slump has been quite appreciable. Since July last year, the Indian rupee report-edly fell by more than 27 percent against US dollar—one of the biggest declines among Asian currencies. The rupee hit a record low to the US dollar for the fifth straight session on May 22, weighed down by large dollar demand from oil firms and weak global risk sentiment, especially after Fitch downgraded Japan's ratings. The Reserve Bank of India (RBI) announced a string of measures to curb the rupee's fall. It also intervened aggressively earlier this month. But none of the measures taken by RBI succeeded in yeilding any positive results. The falls came even after the Reserve Bank of India announced measures to target arbitrage and speculation in futures and options markets, with traders saying this market segment was too small to have a big impact. Some traders said the market had become too volatile because of the worsening global environ-ment and the RBI’s presence would only add to that volatility. "There was huge demand from oil firms. Later it turned into complete panic with the Japan downgrade, euro and pound falling and equities also turning negative," said Vikas Chittiprolu, a senior foreign exchange trader with state-run Andhra Bank.On May 23, the rupee fell to an all-time low of 55.47 per dollar, before closing at 55.39/40, compared to its May 22 close of 55.03/04. Experts who, a few weeks ago, predicted that the Indian currency might stabilize at 55 rupees to the dollar, now say this may happen at 60 rupees. Although the rupee is now well below the key psychological level of 55 to the dollar, the RBI has refrained from intervening.

The analysts have identified several reasons for the decline of the Indian rupee. One of the reasons given is balance of trade. Since India’s imports exceed its exports (in value terms) it results in a huge imbalance in trade. In the financial year ending March 2012, the deficit rose to $185bn (£118bn) compared with the original estimate of $160bn. There are expecta-tions, however, that the trade

deficit may be slightly lower in 2012-13, due to falling global crude prices and recent government curbs on gold imports. Although India has become an attractive destination which can attract foreign capital as well as money from non-resident citizens, it is not enough to make up for the trade deficit. In 2011-12,

India received foreign direct investment of more than $30bn, in addition to a net inflow of $18bn from foreign institutional investors in stocks and bonds. But uncertainty about India's commitment to economic reforms, retrospective taxes, and policy paralysis within the government have forced foreigners to either postpone their investment decisions, or take money out of Indian stock markets leading to consequent increase in the country's current account deficit - a broader measure of the trade deficit. In 2011-12, this deficit was more than $74bn, a huge jump from less than $46bn a year ago. As a result India's foreign exchange reserves have dropped from a peak of $320bn in September 2011 to $290bn now. According to estimates, in 2012-13 the trade deficit may be even higher at $77bn. Such a scenario encourages more people to sell rupees to buy dollars (or any other foreign currency that they require). Importers go for dollars to cater for their needs to buy goods abroad while exporters keep their foreign earnings abroad as they expect the rupee to fall further. Meanwhile, foreign inves-tors increase the demand for dollars as they convert their rupee assets into dollars to take their money out. This demand-supply gap between the dollar and the rupee leads to devaluation. This trend was further accentuated by low growth and high inflation in India. According to reports, India’s annual economic growth hovered around 6.5% in 2011-12. The expec-tations for 2012-13 are also not too encouraging. Couple this with high inflation which, according to analysts, may rise this year to double digits, due to high food and fuel prices, if the government is unable to curb its fiscal deficit. In this scenario, most foreigners as well as Indians will tend to take money abroad, or keep it away from India.Global investors are also hesitant about making any investment abroad in countries such as India due to the economic crisis in their respective countries. That has added further selling pressure on the Indian rupee.In the recent past, the Reserve Bank of India's bid to sell dollars in the open market to restrict the rupee slide not only failed to produce any positive results but it complicated the situation further because once the currency traders and speculators realize that India's central bank is unable to manage its exchange rate, and reduce the adverse impact on its currency, they may enter the market in a big way to sell the rupee which may result into further devaluation of the Indian currency.

EEconomy

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Assembly on Muslim League’s ticket and was also appointed a member of the Constituent Assembly. He served as an MP until the parti-tion of India, but decided to stay back to protect the rights of the Muslims left behind–a job he performed until his death in 1951, with exemplary courage and sincerity. The Quaid-e-Azam gracefully accepted Hasrat Moohani’s stand, and wished him well.To the Muslims left behind in India, he was infallible, and a staunch defender of their

rights. He was respected by India’s leadership for his struggle in securing India’s independence, and the indomi-table courage he demonstrated in confronting injustice and denial. In spite of his staunch religious beliefs, he was not one who would indulge in intolerance or bigotry; the Congress could not dare take any step that defied or even diluted these basic values. The mere fact that he could stay behind in India and vow to defend the Muslims reflected his political stature. In this context, the way he took the Congress to task over the anti-Muslim riots in 1949 remains an exemplary chapter in Indian history because Prime Minister Pundit Jawaharlal Nehru had to virtually shut up Sardar Patel and submit to the stand Hasrat Moohani had taken on the issue. Together, they convinced the people that, without peace their indepen-dence could yet again be at risk. Hasrat Moohani was among those who sacrificed everything for the sake of indepen-dence, but never considered it too high a price to pay.Should Pakistanis ignore such freedom fighters who gave up everything for the creation of Pakistan and for defend-ing the Muslims left behind in India? From the look of things, they do. A frail but passionate Mairaj Mohammad Khan lamented this harsh reality when he said “In our society, anyone who raises his voice against poverty, intoler-ance and vice, is shut up under a covert ban. People who stood by their principles and lived by their admirable rules now find no space in our history.” No wonder we now have a leadership that is devoid of a sense of morality and its obligations to the people.By forgetting the likes of Hasrat Mohani, we are commit-ting a serious error because we are depriving the next generation of a chance to understand and appreciate the merits of values that they must imbibe to become better human beings. What this will lead to, was amply demon-strated by recent incidents of copying during school and college examinations, a violent conduct of students when asked to desist from malpractices, and the gross disrespect they showed to their teachers. These are dangerous signs because they show that the next generation has little concern for civilized and moral conduct. Being bent on passing an examination without having the requisite knowl-edge reflects a mindset that ignores the illegitimacy of this act. Achieving success using fair means, which is crucial for developing a fair and just society, is fast losing its value.

by Khalid MZ

A rudderless worldcourtesy leadership

t is hard to recall chaos of a profile matching the one that is now engulfing

the world. Tragically, it is the outcome of the blind exuberance that was encouraged by the democracies pursuing market deregulation and globalization of trade to justify closing their industrial units since importing cheap goods (instead of produc-ing them) made fair economic sense– without any concern for the eventual consequences of opting for this reckless route to governance of the state.In Europe, Greece, Spain, Ireland and Iceland are the classic examples of how living on borrowed money becomes a part of a nation’s faith. To a lesser extent, this is also true of Italy, France and Britain; where they all went wrong was to believe that following the US–promoter of these tendencies–was the sensible strategy to adopt. Sadly, the combined genius of the EU (except Germany) couldn’t visualize where its members were headed. The collective failure of the EU to popularize austerity in its ranks clearly manifests that Europe’s population has become too exuberant to adopt even a basic discipline such as giving up wasteful consumption. The Greek simply refuse to do so, showing zero concern for the nation’s inde- btedness as well as for the fact that no one is ready to lend them anymore, let alone being in a position to do so.They don’t seem to realize that despite being incredibly over-burdened by debt the US can afford to persist with its flawed conduct because of its being an awe-inspiring ‘super’ power. No European country, least of all Greece, has that muscle; to recapture their many former colonies in Asia and Africa– which is now considered the way out for indebted European nations –they need US support, as proved in Libya, and to be proved in Syria, and in the invasions thereafter. China may have the biggest share in this tragedy, but so have the others includ-

ing the Saudis and the Persian Gulf oil-exporting states.In a public address in late March, Congressman Walter Jones from North Carolina referred to “Uncle Chang”; it hit his audience with an awk- ward clang because Walter was admitting a harsh truth whether one liked it or not.He said “We are spending $10 billion a month that we can’t even pay for…..Uncle

Chang is lending us the money to pay what we are spending [on the war] in Afghanistan.” Walter is a Southern Republi-can dove who, very oddly, is blessed with a fair sense of where the US is headed.This isn’t a reflection merely on the mindset of the past and present US administrations, but as much on those countries

that blindly kept their currencies tied to the US dollar and so kept invest hard-earned wealth in the US public debt that indirectly helped the US turn into the monstrosity it has become over time. Bigger a country’s investment in US public debt bigger is its share in nourish-ing a more visionless leadership in the US. Had that not been the case the US

would have been forced to shift its attention on its economy much earlier. Put together, this global scenario paints a shocking picture of the collective leadership of the world; it makes you wonder whether any world leader thinks even about tomorrow, let alone five or ten years ahead; these leaders specialize in glib talking, not in telling their nations the ground realities because they don’t have the guts to push for adopting austerity by their nations. Instead, they come up with dreadful options to remedy resource scarcity. Re-colonizing resource-rich Asia and Africa is an option that Europe and the US can go for via the popular revolt route, and with the UN covertly with them, they could materialize this plan starting with economic sanctions and then invasion, both to restore peace. What make this plan workable are the power- thirsty leaders in Asia and the Middle East–the one in Syria is providing a horrible example thereof. Closely following the footmarks of Syria is Pakistan – a state with insurgencies going on in every one of its provinces, the latest addition to this scenario being the port city of Kara-chi. But the political leadership is not even partly focused on this developing threat to the country’s existence. On the contrary its focus is on defending its wholly illegal actions to the point of defying the highest courts of the country. Parliamentarians claim immunity from accountability, because they have been ‘elected’ by ‘the court of the people’ that is far above any law court. Doesn’t it border on sheer dictatorship? In many other countries things are slightly better in the sense that state officeholders resign after being accused of corrupt conduct; mismanaging the state, cronyism and corruption, all rampant in connivance with business and industry. These trends are particularly deplorable in democracies yet they go on. The most recent example thereof all over the world was the way governments ‘bailed out’ the visibly reckless entities in their private sectors without punishing their owners and managers for initially making these entities what they now call ‘too-big-to-fail’, and then managing them in as reckless a fashion in the pursuit of profit. That all this went on under the noses of parliaments has yet to be dealt with to mend the flawed democracy we all practice.The ‘occupy’ movement that began in New York and spread all over the world manifests people’s loss of confidence in a leadership that is heralded by elections; what the world needs are visionary managers not glib-talking, tactlessly self-centred slogan mongers. This rudderless world needs real leaders.

I

“Uncle Chang islending us themoneyto pay whatwe arespending (onthe war) inAfghanistan” -US CongressmanWalter Jones

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possibly make the US stand in line with the terrorists in the context of ruthlessness. Should that be the image of America? Surely, the American voters did not elect the present as well as the past regimes to manifest sheer ruthlessness? Or did they? It is time the Americans held their administrations responsible for exceeding their mandates in dealing with other nations.Undoubtedly, Americans have the right to defend their state and its sovereignty; there can’t be two opinions on this issue, but it can’t react in the ruthless Roman style, which is what it appears to be doing, and then wonder “why the world hates America?” The response of a developed (the most developed according to its own claim) state must not manifest only its muscle power, but one that induces other nations to look at their less than civilized conduct and realize the need to fall in line. Sadly, since the 1980s, the residents of the White House seemed inclined towards shouting louder, hitting harder, and destroying more than the foreign adversaries of the US. This trend virtually destroyed values such as moderation, decency, and justice in international affairs. The ruthless responses of the US, like the drone attacks that always kill many innocent without often targeting ‘supposed’ US enemies, have spread hatred for the US. On top thereof come reports about US plans to attack seven Middle Eastern states by 2015, and even such shocking reports that a senior instructor in the US military taught its future leaders that a “total war” against the world’s 1.4 billion Muslims would be necessary to protect US from Islamic terrorists. Among the options considered for that conflict were: using the lessons of Hiroshima or Malia (Vietnam) to wipe out whole cities in one go by targeting civilian population, wherever necessary.This course, held at the Defense Department’s Joint Forces Staff College, has since been cancelled by the Pentagon brass. It is only now, however, that details of the course have come to light. The course participants received hundreds of pages of course material along with reference documents. After all this, Chairman Joint Chiefs of Staff instructed the entire US military to scour its training materials to make sure it doesn’t contain similarly hateful material–an exercise that has been going on ever since. But the officer who delivered lectures in that course–Army’s Lt. Col. Matthew A. Dooley, has retained his position at the Norfolk, Virginia College, pending an investigation into this affair. All commanders (Colonels, Lt. Colonels and Captains) who sat in Dooley’s classroom listening to the inflammatory material week after week, have now moved into higher-level assignments throughout the US military. How will those who hear this react towards the US? It is tragic that a nation that has been blessed with every resource and ability to do good is being swayed away by the myth of power that never lasts.

he trial of the alleged terrorists imprisoned in Guanta-namo Bay by the US for years, has finally begun. Besides

exposing the crimes of the terrorists, the trial holds out some pretty embarrassing prospects for the US too because it will expose how prisoners were tortured, and may also force ‘discounting’ of the truth recorded by interrogators in prisoners’ statements of ‘admission of their crimes’. The fact that all the videotapes of the torture sessions have been destroyed places the US in a truly difficult position.The most controversial of all the torture techniques used was ‘water-boarding’ – invention of Jose Rodriguez, the top CIA torture expert. In a BBC TV programme telecast on May 11, CIA’s legal Counsel admitted that he could foresee the many legal complications the US government would confront, and had ensured that use of controversial torture techniques was approved by the highest authority in the US. But he admitted that he too couldn’t imagine the kind of pain water-boarding could inflict. He did admit that he saw the 92 videotapes of water-boarding of Abu Zubaida, but when asked to confirm whether it was true that Abu Zubaida experienced immense pain and even vomited during torture, he avoided answering the question clearly. While he admitted that the sanction for water torture existed, destroying the video tapes exceed that sanction. The fact that Abu Zubaida was water-boarded 183 times and those scenes were recorded on 92 videotapes, is now a known fact, which Jose Rodriguez couldn’t deny while responding to queries by the BBC reporter. He said his prime concern was protecting the CIA operatives who conducted the interrogation. This is an implied admission of the fact that what he and his fellow interrogators indulged in wasn’t legal–even under US laws.But he very emphatically justified his acts–developing water-boarding technique, using it on the prisoners, destroying the evidence thereof–all in the name of his total commitment to defending the US and its interests; his attitude suggested that he placed defence of the US above morality and justice with zero concern for the fact that the conduct of the state cannot even slightly resemble that of ruthless terrorists. How could an individual with such confused values rise to a top position in the CIA is amazing. Don’t the extended lectures of the US diplomats to the rest of the world on ethics and civilized way of governance lose their credibility courtesy Jose Rodriguez?Jose Rodriguez was not the least regretful about what he and his colleagues did at Guantanamo Bay. When asked about his views on his conduct, that exceeded his authority, at least to the extent of destroying critical evidence, his responses were brimming with hatred for Guantanamo Bay prisoners, show-ing clear bias that disqualified him to head the interrogators assigned to discover the truth. When asked to give his view on whether Khalid Shaikh Muhammad be hanged or given a life sentence, he said he didn’t want Khalid hanged; instead, he wanted Khalid to rot in prison until death. As the trial proceeds, more astonishing revelations are to be expected. The worrying aspect thereof is that the disclo-sures could further damage the image of the US. It could

















�e looming tragedy: are we prepared for it?On May 17, Zafar Iqbal Qadri, Chair-

man National Disaster Management Authority (NDMA) had warned that, as in the past two years, in the 2012 monsoon, Pakistan is again likely to experience what he called a "terrible" flood because of the unfavourable climate changes in 2012. These changes could cause heavy rains and consequent over flowing of the Swat and Kabul rivers causing floods that could affect 29 million in Charsada, Peshawar, Nowshera, Muzzafargarh, Rajanpur, Laiyyah, Khushab, Muzz- afarabad and Sargodha, and lower Sindh. Besides, land-sliding was expected in Gilgit-Baltistan. In its March issue, this magazine had warned its readers that this scenario was expected because of the heavy snowfall in the north of the country, and the strong possibility that this could cause both rains and flooding of the rivers when snow starts melting. Also, that a climate-change, whereby rain fall in the Rajasthan, Sindh, Punjab and Baluchistan belt, would continue for years. As per recent research-based assessments by the Intergovernmental Panel on Climate Change, Pakistan is now among the world's most climate-vulnerable countries including Nepal, Bangladesh, Afghanistan, and lower China.The NDMA warning calls for long-term planning–dredging of river beds, complete review of the state of the river banks, their strengthening on lasting bases, and building small dams that could be used to store rain and flood water to assure its year-round availability for the agriculture sector. These steps could increase crop output and employ-ment opportunities in the agriculture sector.Based on the sad experiences of 2010 and 2011, the NDMA forecast warns of another round of devastating floods, unless repairs to canal banks that were not repaired since the 2011 floods, are completed before end-July. In the March issue of Value Chain, we had recommended the commencement of this repair work on an urgent basis by: • assessing the existing damage-types in various areas,• designing technical strategies to repair the various damage-types, • segregating the task into two major categories: - jobs that can be executed by irrigation department, and- those for which private sector participation is required.The last step was floating of tenders to select the lowest bids provided they were offered by contractors with a satisfactory track record of finishing work on a timely basis evidenced by their experience, expertise and resources (requisite hardware) but indications are that the government is not aware of what the future holds in terms of increased water-flow in the river system, and how it would be regulated to forestall chances of overflow and flooding of the towns on river banks. Planning repair work and imple-menting a remedial emergency strategy could spare millions the miseries they were made to confront during floods in 2010 and 2011–miseries that have not been addressed yet in

some towns in interior Sindh despite claims about remedying them. UN estimates of the losses inflicted by the 2010 floods highlighted the fact that this disaster was much more devastating than the tsunami that hit South Asia in 2004, the 2005 earthquake in Pakistan, and the earthquake that hit Haiti in 2010. By the time flood losses were assessed, their figure went up and was revised upwards to over $10bn. But that was just

the start; the massive crop losses later led to food shortages implying tougher days for all. Food grain and sugar import increased the trade deficit that was already high due to expensive oil imports. The tragedy, however, is that on the one hand we continue to have one of the lowest tax-to-GDP ratio and on the other a track record of wasting bulk of the tax revenue, and the habit of slashing budgetary allocations for devel-opment spending which, to begin with, are too little com-pared to the needs–a tendency that resulted in the building-up a huge backlog of inadequacies in the physical infrastructure, which are being compounded by continued high population growth. In 2011-12 too, PSDP allocations were not utilized fully primarily due to scarcity of funds. In 2012-13, that’s what is expected since the fiscal deficit can’t be contained otherwise.That the expanding gap between development requirements and the outlay thereon is impacting economic growth is not a secret anymore; for the fourth consecutive year, Pakistan will register a GDP growth rate below 7%–the minimum needed to contain the escalating, in fact threatening, poverty level as a consequence of contraction in Pakistan’s industrial base.In 2010 and 2011, the uncared for flood affected headed for the big cities where a minority was housed in relief camps but the majority stayed on the pavements. It was no surprise that during that period petty crime rate went up. A repeat thereof is likely when the flood affected people again head for head for the cities.For a regime that calls itself the ‘peoples’ regime, it is politically important, if not for any other reason, that the flood tragedy is contained so that millions of Pakistanis are spared the pain and miseries they suffered in the 2010 and 2011 floods. These Pakistanis, who work hard to produce the food that each and every Pakistani eats, mustn’t suffer; failure to ensure that will show how little the regime cares the ‘people’. What appears more likely though is a repeat of the 2010 and 2011 tragedies because damage caused to canal networks has not been completed. City dwellers must prepare not just for sending relief supplies to the flood affected areas but also for shelter to the flood affected in a manner that doesn’t push them to opt for petty crime. Given their vital contribution to the economy, they deserve much better, even though, as before, the state may fail to fulfil its obliga-tions in this context.

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rancois Hollande made history when on May 15, in a digni-fied ceremony in the Elyse Palace, he signed the formal

notice of takeover of power (from the out-going president) as the first leftist chief of the state after Francois Mitterrand who had been the president of France from 1981 to 1995. Mitter-rand was the first socialist to be elected by popular suffrage. The next socialist–Hollande–became the president by bagging 50.8 percent of the votes cast, compared to 49.2 percent for Nicolas Sarkozy who was the first sitting president since 1981 to lose a re-election bid, despite media support for his promise to “mod-ernize” France’s economy and institutions. Sarkozy’s defeat was not surprising; he had already read the writing on the wall when, on the narrow street outside the Palais bar in the Basque town of Bayonne, he saw the crowds raising the slogans “Sarkozy out” and “Sod off Sarko.” Even before he launched his re-election campaign, Sarkozy had told newsmen how he had contemplated the possibility of his defeat.

The eurozone debt crisis and France’s sluggish growth, coupled with high unem-ployment, hung over the entire election campaign. Paradoxically, therefore, one of the only ways Sarkozy could have won was by selling himself as an international fire-fighter and problem-solver, protecting France from the eurozone crisis. But, instead of diverting his skills and energies towards solution of the crisis, he plunged

himself into a crusade against immigration, halal meat, blaming Islam for the troubles in the French society, and claiming to protect the Christian roots of Europe. Sarkozy is blamed for trapping France in a downward spiral of austerity and job losses. The French dislike ostentation so much that they have named it twice—“bling, bling”, and Sarkozy became known as “the president of the rich.” He had promised to restore the values of work and reward. Instead, he turned out to be the one who left France with around one million more unemployed and millions others struggling to make both ends meet. The rich got richer on the back of his tax breaks for them. There was wage increase for the presidency which he claimed he deserved for working hard, a 55,000 euro watch, and the ex-supermodel wife. In his capacity as interior minister during 2002 to 2004, Sarkozy was known as a blunt and tough man but when he became the president of France he was a changed man altogether-transformed into a man with a thin skin and short temper and vindictive against anyone who dared to cross him. His sex scandals, instances of exercising undue influence on the media, accusations of racism, especially Islamophobia, also contributed to his downfall. Allegation that the country’s richest woman, Liliane Bettencourt, illegally financed his election campaign in 2007 also played a role in Sarkozy’s defeat. There were reports that Bettencourt’s staff handed over envelopes full of cash amounts of 50,000 euros to Sarkozy’s aides to finance his election campaign in 2007 in open violation of France’s electoral code where individual election campaign contribution must not exceed 4,600 euros.

But the decisive factor that contributed the most to Sarkozy’s defeat was his inability to overcome the economic crisis which had engulfed the whole of Europe, France included. He had promised a free-market France to prosper in a globalised world. But what France experienced under him was an unprec-edented rise in unemployment, closure of factories and other businesses, and high growth in the number of those who felt that the country’s economic security was on the edge. Whether Sarkozy will have a chance to “have a great life in politics” as he said just weeks ahead of the election results or, as he said previously, he would engage himself in money-making exercise in the private sector, it is hard to suggest at this point of time. The first pressing issue for him at present would probably be to face the justice system once he loses his presidential immu-nity and is called upon to testify to judges investigating allegations of illegal campaign funding. Another investigation he has to face is the allegation of kickbacks from French arms sales to Pakistan in the early 1990s that secretly funded the failed presidential campaign of Sarkozy’s mentors Edouard Balladur of whom he was campaign spokesman. Sarkozy has denied his involvements in either but will have to substantiate his denial before the court of justice.The presidency of France would be tough and testing for Hollande too. In his election campaign, Hollande, vowed to turn the page on austerity and invest in the future. What he said during his electoral campaign raises questions as to how France will change its approach to economic policy in the context of the eurozone crisis engulfing the whole of Europe. Hollande seems to have a clearer strategy to move in this direc-tion. His strategy consists of three main ideas viz growth, social inclusiveness and budgetary discipline, adoption of the supply side approach to growth (impliedly increasing output to bring down inflation, and earn higher returns via higher turnover, not higher prices), and need for EU to pursue both budgetary discipline and a complementary growth package. After his investiture he promised a presidency of dignity, simplicity and soberness. He vowed that the state will be impartial because it belongs to all of its citizens and insisted that a united France could meet the challenges on the social and economic fronts.What Hollande said at the investiture ceremony raises hope of optimism. “I take stock today of the force of the pressures our country is under: massive debt, feeble growth, high unemploy-ment, damaged competitiveness, a Europe that is struggling to get out of the crisis,” Hollande said adding “but nothing is inevitable as long as a clear course has been set, and we apply all our strengths and the assets of France [to deliver a more prosperous society].” The new Socialist government under Francois Hollande got down to work with the first order of business as symbolic 30 percent cut for the President and his ministers thus setting an example as the government looks to tackle France’s troubled public finances. It remains to be seen just how much will things change with him as the President of France. The challenges are far too great.

by Majyd Aziz

oday, there are 196 countries

spread around the globe. Various multilateral organizations determine the status of these countries by benchmarking their economic and social development. Some are termed as devel-oped nations, while others are known as developing or least developed countries. In the past, corre-spondingly, these countries were also categorized as First, Second and Third World countries. Pakistan is classified as a developing country, although those harboring deep animosities against this Republic love to hype these feelings by calling it a failed or rogue state.Over the past many decades, Pakistan has experimented with various models to usher in a sustainable economic development status. However, the country has vacillated between a centralized structure, military dictatorship-driven capitalism, pseudo socialism (invariably always a failure as being proved even now), and provincialism. The unfortu-nate mindset prevailing in the corridors of power that policies of the past governments did not reflect their desired manner of governance, has widely affected the progress of the country.The successive governments have all been hampered by the obvious lack of political and moral will to enforce pragmatic legislation, and policies that would have been deciding factors in ensuring economic deliverance. The inability of the governments, as well as officialdom, in broadening the tax base has been a debilitating feature of political will. Tax-to-GDP ratio is pathetic when compared with world standards. It is less than 9% at a time when this nation requires a firm ground to base its economic progress. Revenue collection inches up rather than hopping and jumping. For fiscal year 2011-2012, the Federal Board of Revenue (FBR) has estimated collection of only Rs 1,952 billion whereas the ideal figure should be over Rs 3,000 billion. Relentless efforts should have been initiated by FBR to revamp the rules and regulations to achieve the desirable target. Even Rs 2,500 billion in today’s scenario would have enabled an inflow of an additional half-a-trillion Rupees that would have empowered the government to earmark and disburse the required funds for Public Sector Develop-ment Programs (PSDP) as well as to drastically reduce dependence on bank borrowings.It is to be noted here that whenever governments get caught in the whirlpool of low financial resources, the first

casualty is the PSDP. The Finance Minis-ters blatantly announce on Budget Day that the government is planning to spend the “highest” amount on PSDP but by the time the fiscal year is about to come to a close, the concerned committee quietly announces that, due to financial constraints, planned alloca-tions for the PSDP have been slashed. This is bad economics, because relatively few or

generally casual steps are taken to control the non-developmental expenditures that, invariably always, are allowed to escalate unchecked.The Finance Ministry bases its revenue projections on the assumption that budgetary deficits would be tackled by knocking at the portals of multilateral agencies, harnessing domestic savings and bank borrowings, focusing on the expected revenue through taxes, duties, and levies, and heavily relying on remittances by the Pakistan Diaspora around the globe. A tremor in any of these sources results in the budgetary projections going haywire. Fiscal gimmickry is adopted as a matter of routine to present a rosy picture, ostensibly to shield the government from public outcry or to drape the negative factors from foreign lenders or investors. No matter what methods are used, the outcome becomes a disappointing nightmare. Dependence on IMF does provide much needed financial assistance, but the conditionalities imposed by this organization are back-breaking, and instead of addressing the welfare and quality of life of the borrowing country’s citizens, the net result is increased hardship for them. When the time comes for repay-ment of these loans, the borrowing country is already hard-strapped for mustering the required foreign reserves, and then the Finance Ministers (along with economic managers) make a beeline to hop on a plane to Washington.The key problem in the scenario mentioned above, lies in the fact that the finance managers and policymakers have a penchant for considering themselves “the” experts and, in their self-created arrogance, debase all practical and worth-while proposals, suggestions, and ideas of the private sector. This is the norm, not the exception although private sector organizations assiduously deliberate, discuss, and then formulate budgetary proposals every year. Countless trips are made to Islamabad and intense lobbying is undertaken to bring about positive change. Political parties are invited to private sector organizations to hear the business community’s point of view. Alas, tall promises are

When will they listen toPrivate Sector?T

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he meeting of the NATO members’ heads of state failed to achieve one of its key objectives–persuading

Pakistan to lift its ban on transportation of NATO supplies to Afghanistan from Karachi’s seaports. It was largely because of US refusal to apologize for its deadly attack on the Salala check post on the Afghan-Pakistan border in November 2011 that resulted in the death of 24 Pak soldiers.At the Chicago summit, NATO’s Secretary General Anders Fogh Rasmussen admitted that “We can’t solve the problems in Afghanistan without the positive engagement of Pakistan.” But the fact that he and the US president Obama made it a point to openly snub President Asif Ali Zardari did not reflect a mindset committed to resolving the problems, of which there are plenty now.No one has any doubts about the fact that the regime led by Asif Ali Zardari is probably the most pro-US regime that this country has ever had. This regime came into power because of the National Reconciliation Ordinance that was brokered by the US and Britain to thrust on Pakistan a regime that was going to be unsupportive of Pakistan’s military and judiciary. Not surprisingly, these NATO allies kept their mouths shut throughout the past four years over the regime’s conduct as reflected in the mismanagement of the state via its cronyism, corruption, embezzlements and blatant defiance of the court verdicts. This silence proved beyond doubt that the Western rhetoric about democracy is a cover for what it wants, which is to install a regime that is incompetent and corrupt.How dumb or, perhaps distress-ridden, are the regimes in the US and NATO member states was proved by the fact that they snubbed their trusted rulers of Pakistan at a time when these rulers are under threat of being overthrown. Was this the time to do so? What the Western governments can’t see is that the demand for a US apology–a part of the long list of demands passed by Pakistan’s parliament–must be respected to sustain the Zardari regime since defying it would mortally hurt this regime that claims, almost every day, the supremacy of the parliament even over the highest courts of law.Fulfilling at least this demand (if not the others) would have afforded some credibility to the collapsing Zardari regime; to denigrate this demand of the country’s parliament amounts to strengthening the view that even the staunchest backers of the regime–US and Britain–too have lost faith in its ability to deliver on any promise. It is amazing that the NATO leaders don’t seem to realize where they stand in the context of exit from Afghanistan at a time when almost every one of them is short of resources. Squeezing another yet bad deal purely on the strength of NATO’s muscle is a dumb strategy. If the regime in Pakistan fails to re-open its land routes for NATO supplies, will NATO invade Pakistan? Or, will agreeing to Pakistan’s terms under pressure strengthen NATO’s image? Apparently, leadership is now in the hands of those who lack two key attributes–tact and vision; only ego drives them. It is manifestly wrong to deny the losses suffered by Pakistan in the past, as well as those that it continues to suffer due to the Afghan war. Besides all other losses, damage to

its highways on account of movement of some 35,000 NATO containers a year runs into billions of Rupees. To refuse admit-ting this fact and, in the process, further damage Pakistan’s already shattered physical infrastructure, is hardly a civilized conduct.A classic blunder of the Pakistani regime led by Yusuf Raza Gilani–praised by David Cameron for ‘consolidating’ democ-racy in Pakistan–was the line it took in dealing with NATO over re-opening the supply routes. Over time it should have become obvious to this regime that seeking aid was a dumb policy; Americans don’t believe in it anymore. Seeking higher charges (on cash basis) for transporting NATO’s containers was the non-controversial route to adopt.It is odd of NATO to label Pakistan’s revised transportation charges as ‘extortion’. It reflects how it looks at Pakistan–its ‘strategic ally’. NATO isn’t bothered about Pakistan’s losses, the biggest of them being the ‘image loss’, and its huge cost that Pakistan will go on paying for years, more so if regimes like the present ‘democratic’ regime are thrust on it courtesy its NATO ‘allies’. Pakistanis now believe that the US cares only for its interests no matter what it costs the rest of the world. It is defending Shakeel Afridi because he was serving US interests not Pakistan’s and the demand that he shouldn’t be tried may also have to do with ensuring that he does not tell who really was the fellow killed in the raid–Osama or...... US demand that he shouldn’t be tried since he helped locate an entity considered a common enemy by Pakistan and the US, could have sounded credible if the raid on Abbottabad to kill Osama (or his duplicate) was carried out jointly by the US and Pakistan. But that was not the case. What should the Pakistanis think? Should they believe that the US is the ‘Over Lord’ that can have its agents here to do things without the knowledge of the country’s government, and the agents of the Over Lord can’t be held accountable. Sounds similar to the philosophy being touted by Pakistan’s regime according to which anyone elected to the parliament is beyond accountability even by superior judiciary. Isn’t this the setting for an era of total lawlessness or the supremacy of the powerful no matter how evil? Is this what is being taught at the highly-rated American and European universities? From the look of things, that seems to be the case. Barack Obama, Hillary Clinton, Leon Panetta, David Cameron, Anders Fogh Rasmussen and the others, acquired education in these very universities and based thereon developed their mindsets and abilities that they reflect in their conduct. Besides failing to do what was required on the key issue–NATO-Pak relations–the meeting also didn’t do much to resolve the problems of the Eurozone, the European missile defence system, or the entry of more former Soviet republics into NATO, because exit from Afghanistan took most of the conference’s time.

made, rhetorical chanting is branded as visionary commitments of that political party, but at the end of the day, Parliamentary representatives of these very parties go back to their abodes or offices, unsure about what they had heard or pledged.The hierarchy of various Chambers and Associations lack the critical mass to enforce their proposals and

ideas because of the obvious fact that, although there is continued hobnobbing with the policymakers, the captains of trade and industry are not keen on being on the wrong side of these decision makers. The onus, therefore, lies on the representatives of the small traders, markets, and the small and cottage industries to vociferously build opposi-tion to the steps taken by the FBR. This is not the ideal way to get things done, but more often than not, it propels the leaders of trade and industry to come to terms with the ground reality, and only then do they endeavor to adopt the stand taken by the agitators.Therefore, if the government in power truly desires to bring about an economic revolution, it must, at least few months before the Budget Day, convene an Economic Convention for two days where all heads of political parties along with their economic team must interact and listen to the repre-sentatives of the private sector and agree on a short- and long-term economic agenda that would be binding on all segments of the society. Everyone has to be on the same page. Populist measures, half-baked ideas, heavy reliance on external financing, burdensome non-developmental expen-diture, and corruption at all levels, must be seriously addressed, and policies must be unanimously accepted and agreed to bring the required positive change.Private sector must be fully involved in the economic agenda and it is also the responsibility of private sector to ensure that policies are implemented in letter and spirit. Public and private sector must work together to rid the economic devel-opment process of all the cobwebs, of an ingrained and archaic mindset, of gimmickry and financial shenanigans, of unashamed corruption due to red-tape, inertia, and discre-tionary powers, and of governmental tomfoolery. Pakistan has spent $70 billion on the Global War on Terror and in the process, lost 38,000 civilians and 3,500 brave soldiers. Natural calamities have severely affected the nation’s progress. Unemployment is at an all-time high. The newspapers often come out with stories about Pakistanis transferring capital to foreign countries. US Senators and Congressmen jump over one another to introduce Bills to whack Pakistan and send it to the Stone Age. Good gover-nance is just a buzzword and not an active policy of the governments.Political leaders embellish a regal lifestyle, without any concern for the common man. Law and order situation has

become threatening for the very existence of the country. Private sector is shaken and scared. Private sector doesn’t only include banks or top multinational companies or Pakistan’s mega conglomerates. Private sector is actually the SMEs – the small and micro traders – those who peddle their wares on the streets. They are the most affected, and they are on the high seas without a paddle.Hard-nosed decisions must be undertaken to broaden the tax base. The taxation system must be revamped to be attractive rather than be a deterrent, thus impacting positively on tax collection. Dry Ports must be converted to export-facilitation centers rather than using them to support unscrupulous imports. Billions in revenue are lost due to this decision. Pakistanis based in foreign countries must be provided constitutional protection for their invest-ment in their country of birth. Foreign investors must be freed from the shackles of bureaucratic roadblocks and barriers. It is imperative that domestic industries get an even playing field against imports that are under- invoiced, mis-declared, or smuggled in connivance with concerned officials. Most of these actions are doable and must be done. Time is running out. Sadly, political parties, the establishment, and the feudal are all self-cen- tered, and keep their heads buried in the ground. This is the truth. Only the private sector can goad them out of their ostrich mentality and their dispassionate scorn for the citizens, so as to induce them to open their eyes to the stark realities because the fire of the people’s anger may engulf the whole motherland.

Jo roshnion mein behtay hain wo jantay hi nahinHawa chalay to chiragon ki zindagi kya hai

(The writer is Former President ofKarachi Chamber of Commerce and Industry)

The onus,therefore, lies on the representatives of the smalltraders, markets, or small and cottageindustries tovociferously createopposition to the steps taken by FBR.

It is imperative that domestic industries get an even playing

field against imports that are under-invoiced,

mis-declared, and smuggled in

connivance with concerned officials.

SME’s in Pakistan

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ome of the market observers found it odd that US Secretary of State

chose to pay a quick visit to India precisely when the biggest-ever Indo- Pak business parlays were on in Lahore to begin a process of reconciliation, and increase bi-lateral trade to the level where it ought to be, given the critical advantages afforded by the fact that these neighbours can minimize the impact of transportation cost that has soared because of the rise in oil price. What rendered the Secretary of State’s visit more suspect was the fact that she also chose this visit to announce a discovery – that, like Osama Bin Laden, Ayman Al Zawahiri too was in Pakistan and pressed India to push Pakistan to hand over an alleged terrorist–Hafiz Saeed–who the US has not accused of terrorism in the US but has nevertheless announced a reward on his head. When Pakistan seeks clues about locating a US-identified terrorist, the response is “sorry, that’s secret”. This makes it seem like a well-planned strategy to establish as firmly as possible that Pakistan harbours terrorists and can’t be trusted to catch them. In turn, it also justifies US aerial raids like the one on May 2 last year to ‘kill’ a fellow that we must accept was Osama Bin Laden, though no independent witness was there to confirm the dead man being Osama Bin Laden. Above all, it justifies the drone attacks and now the US firmly believes that its drone strikes are wholly legal and within the parameters of international law. At the end of her visit, the Indian Foreign Minister renewed the call for handing over Hafiz Saeed. Besides, the visit also triggered a big goof. The following day, an Indian TV channel telecast a story in which photographs of two small Lahore- based businessmen, and a security guard of the mall where they have their shops, were flashed labelling them as terrorist hiding in Bombay with the intent of carrying out a terrorist attack. The day the attack was to occur, all three appeared in a TV talk show in Lahore and none appeared a terrorist. The show had its desired effect; the participants were furious and voiced anger at the ongoing Indo-Pak business parlays. Interestingly enough, while the Indian secret services showed their calibre in handling the issue that could have substantial self-damaging fallout, it was exploited as the manifestation of India’s traditional enmity–something least desirable for both India and Pakistan. All this happened on a Lahore-based TV channel that now regularly shows advertisements of USAID. The other purpose of the US Secretary of State’s visit was to convince India not to buy Iranian oil, a sacred cause that she has been pursuing for the past several months. But if you ask her “whether the US can provide oil”, she will look at you in amaze-ment implying what a dumb question it is. Where you buy oil from is not her worry; all she tells you is not to buy from Iran. It is the epitome of diplomacy, American style. In spite of the genius reflected in its diplomacy, the US insists that the world should follow its advice (i.e. command).

Pakistan, Iran’s next door neighbour, is the worst victim of America’s campaign of hatred against Iran because Pakistan is virtually on fire due to energy short-ages that are crippling its business and industry and, the resulting protests all over the country are adding a lethal dimension to its internal security prob-lems, all of them rooted in its tactless partnership (under Gen. Zia-ul-Haq) in American intervention in Afghanistan beginning the 1980s.

During the past four years, the projects that could transmit Iran’s energy to Pakistan (one for transmission of natural gas and the other for transmitting electric power) were opposed tooth and nail by the US escalating Pakistan’s woes, more so under a regime, which is simply incapable of doing anything right, especially plugging the country’s energy gap which calls for, to say the least, focused efforts in conserving energy and tapping the leaks in its transmission system.The US has nothing to offer to remedy this problem–the one that could destabilize Pakistan to the point of no return. This scenario strengthens the view that, destabilizing Pakistan to that point is what the US actually wants. But you can’t blame the US for not being bothered about how nations face their problems, especially resource deficits, because the US is not bothered anymore about helping other countries–including its strategic allies–courtesy its war on terror that it blames on religious extremism.The fact, however, is that what triggers terrorism is poverty thrust on people in the poor Muslim states by the US-backed oil-rich regimes in the Middle East via continuously rising oil price since early 1990s. You can’t ask the US why it couldn’t do something sensible, fair and compassionate to resolve this global mess rather than use the gun. The country that ended WW-II by dropping atom bombs on Hiroshima and Naga-saki, can’t offer a solution other than the use of the gun (thank God, not atom bomb, at least as yet). By all counts, this profile of the US is the biggest tragedy on this planet because, given its massive industrial base and 60 percent of the world’s gold reserves back in 1945, it had the muscle to make the world a prosperous and less volatile place to live. A well orchestrated campaign of US parliamentarians (now joined in by NATO’s Secretary General) wherein Pakistan is being threatened with tough economic sanctions, is aimed at pushing Pakistan into reopening the land route for NATO supplies to Afghanistan. Shortly before the US Secretary of State arrived in India, Pakistan’s Defence Minister too warned at a press talk that if Pakistan does not lift the ban on transport of NATO supplies to Afghanistan via land route, it would be slapped with economic sanctions. He was merely conveying (on behalf of the US and NATO) a warning to the Pakistanis to behave and let the ban be lifted. Helping Pakistan out of its economic mess isn’t a priority of the US and NATO who are Pakistan’s strategic allies; they only ask for “doing more.”

I

Security guards –theirinability to deliver

In several cases, the guards themselves were found involved in colluding with the robbers in committing the crime. Last year, in Karachi alone, the number of bank heists was unprecedentedly high. Over Rs 60 million were looted from 19 branches of nine private banks during the year despite all systems and mechanisms developed by the concerned regula-tory authorities (including the federal interior ministry), being in place. According to police and law enforcement agencies, the robbers had complete information which might have been leaked by the insiders – the guards or bank employees– since the robbers knew where the DVR recording system was placed, how the system would be destroyed, etc., before committing the robbery.An enquiry reveals that majority of private security compa-nies hire non-professionals as guards with no prior experi-ence of using guns or any other weapons provided to them for maintaining security. There are certain rules and regula-tions which have to be followed in order to initiate a private security firm. However, due to the loopholes and absence of checks and balances, these security companies are working without fear of accountability.As a precondition, a security agency must obtain license to operate as a private security company. For this, an application is to be filed with the Securities and Exchange Commission of Pakistan (SECP) for registration. The SECP then sends a request to the Federal Interior Ministry and the concerned provincial Home Department for NOC and license. Initially, a security firm cleared by SECP, Interior Ministry and Provincial Home Department, gets 50 arms licenses (which can be increased in future based on the company’s needs) for pistols and repeaters (i.e. locally manufactured semi-automatic shot-guns). However, in certain cases, like duties for consulates and embassies, and government or non-government VIPs, the guards are also licensed to use automatic rifles and SMGs (Small Machine Guns). According to a weapon expert, small calibre pistols, especially repeaters, are not enough to neutralize the threat from the bank robbers and assassins. These weapons have low range, accuracy, and rate of damage. Usually, bank robbers are found to be armed with assault rifles like AK-47 and others. With their semi-automatic shotguns, the guards are unable to

n the ever-changing environment chocked with adverse law and order situation, terrorism, robberies and crimes of

varied nature, the role and responsibilities of private security guards become onerous and challenging. In majority of the cases, however, this role is not witnessed, much to the disap-pointment of the institutions that employ these guards. As a result, the very purpose for which the security guards are engaged remains unrealized and unfulfilled. Security is the primary right of every individual and organiza-tion, and one of the onerous responsibilities of the state and its security agencies, especially in our terror-torn country, where the need for an effective security arrangement is much greater today than ever before. It is sad, however, that the existing arrangements have not been as successful in countering the ever-increasing incidents of robberies, terrorism and escalating lawlessness despite there being mushroom growth of private security companies all over the country during the last couple of decades, although security agencies are almost entirely run by retired army officers in addition to those run by the ex-servicemen trusts. Private security industry is one of the biggest job providers in the private sector. It is estimated that the total number of private security guards in the country has crossed the 300,000 figure. There are 65,000 private guards in Sindh alone, out of which around 40,000 are in Karachi. In Punjab, there are an estimated 80,000 private guards while the number of security guards in Islamabad is well over 25,000. Close to 40,000 guards operate in Khyber- Pakhtunkhwa, and the rest are in Baluch-istan and Azad Kashmir.

Despite their numbers being that large, the results produced by the security agencies are not as satisfactory. The incidents of robberies and terrorism continue unabated and security personnel are seen simply helpless in countering such attempts. A large number of private security guards are deployed to ensure security in banks, but robbers come, loot and disappear, at times even with the arms and ammunition of the guards themselves. They are either not trained to use the weapons provided to them, or they are not adequately trained to handle the emergencies they are required to handle. As a result, they are simply toothless when exposed to threats they must know how to confront.

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by Syed Asif Ali

n May 26, Mr Yusuf Raza Gilani became Pakistan’s longest serving Prime Minister. That’s not the only

distinction he has earned; he is also the PM during whose term the largest-ever variety of new records was created. It includes the frequency with which the top brass in federal ministries was changed to replace the more principled with the more pliant ministers, chief secretaries, attorney generals, heads of FBR, NAB, FIA, ANF, ABP, etc. Then there is the longest-ever list of acts of mismanagement, corruption, and embezzlement committed during a four year period because key administrative positions in offices of the state and the state-owned enterprises (SOEs) were provided to his regime’s favourites and investigations into their acts of misconduct were thwarted to secure the vested interests. However, the crowning event was Mr Gilani’s conviction on the charge of contempt of Supreme Court and his interpreta-tion of the court verdict was interpreted by majority of legal experts another contempt of the court. Meantime, complying with instruc-tions of the court, its Registrar notified Speaker National Assembly and the Chief Election Commissioner (CEC) the verdict convict-ing Mr. Gilani, asking both to take appropriate action in their respective capacities i.e. Speaker National Assembly should advise the CEC to suspend Mr Gilani’s membership of the parliament.But for very special reasons, the Speaker National Assembly decided not to do so because according to her, Mr Gilani did not commit contempt of court and it was inappropriate on the part of the Supreme Court Registrar to notify her (even though on behalf of the Supreme Court) to take appropriate action because it amounted to portraying the Speaker’s office as a post office. Should the court have suspended the membership of Mr Gilani’s itself or, for the sake of decorum, left this step to be taken by Speaker of the National assembly? Is that not how a responsible court must act in the matter? The Speaker National Assembly did not notice the fact that some parliamentarians too had committed the same error– contempt of the court–while defending Mr Gilani in public meetings and in the media. The PPP now insists that its MPs holding public offices can’t be accused of contempt of court since they have been elevated to their respective positions by ‘public mandate’. The sole logic behind this line of argument is numbers, neither morality, nor principles, and above all, no respect for the law. That’s another ‘first’ in Pakistan’s history. Aitzaz Ahsan–a PPP stalwart–says his party does not accept the short order in the case as well as the June 7 deadline for filing an appeal against the detailed verdict. He said, after the ruling given by Speaker of the National Assembly, the CEC cannot pass a suspension order against Mr Gilani. Endorsing the speaker’s ruling he said in the 1962 Constitution, Speaker had the role of a post office, but not anymore. Impliedly, the Speaker can now overrule even the Supreme Court. That is yet another ‘first’ in Pakistan’s history. The Speaker’s view that Mr Gilani did not defame or ridicule the judiciary denies clear references to the PM’s disregard of the judicial direction to write to Swiss authorities to re-open money laundering cases against President Asif Ali Zardari as stated in

the December 16, 2009 verdict against the National Reconcilia-tion Ordinance, and thus committing contempt of court.Immediately upon his convic-tion, Mr. Gilani had said that he will file an appeal for review of the Supreme Court’s verdict. That appeal was prepared for filing, but only after PPP’s top brass gave its green signal. Accord-ing to Aitzaz Ahsan, that appeal contained 146 objec-tions to the Supreme Court’s ver-dict, and was to be filed on May 25, but at the last minute the PPP leadership decided against filing the appeal. Impliedly, Mr Gilani remains a convict – yet another ‘first’ in Pakistan’s history. But why should the PPP worry about this stigma? Hasn’t Mr Gilani been certified by the British Prime Minister as the man who is ‘consolidating’ democ-racy. That is some certificate! Not surprisingly, Mr Gilani has used that certificate more than once by to establish his credentials as the PM despite being a convict. Former law ministers and legal experts think that Mr Gilani did not file an appeal because he feared that Supreme Court may formally disqualify him in the appeal, rather than leave it to the Speaker National Assembly or the CEC. The last thing the PPP wants is a humiliation of this sort; it finds nothing wrong with Mr Gilani staying a convict because that, at least assures retaining power for a few more months. But these experts claim that there was no legal protection to the ruling of the Speaker National Assembly, and it can be contested in the court, which is what Pakistan Tehreek-e-Isaf and PML-N have done, but what if the Speaker National Assembly again consigns the court verdict to the dustbin?The regime is overjoyed at its backing by Britain and the US, and finds it odd why Pakistanis now question its credentials; what doesn’t occur to the regime is the killing impact of the political and economic mess that it has nourished over the last four years. The people, whose mandate the regime claims as its authority to rule supreme, are now on streets all over Pakistan, and are demanding the regime’s exit. According to the last Gallup poll 79% Pakistanis want just that; oddly, Mr Gilani thinks he has fulfilled 80% of PPP’s election mandate.Even if one sets aside all other deficiencies and distortions of the system the two that are eating away the very roots of the country’s unity and stability are the slide in internal security arrangements, and power load-shedding. In fact, power load- shedding is compounding lawlessness. This scenario did not develop overnight; it was developing but those who couldn’t see it were Pakistan’s ‘democratic’ regime and all its strategic allies who have been using it for their purposes, nothing else. The saga is that they both claim always being right and also being above the law. Some combination, isn’t it?

counter the robbers armed with automatic assault rifles. The 12-bolt gun which the guards carry with them has a spread fire and so it can harm bystanders. Sources in All Pakistan Security Services Association and the owner of a leading security firm in Pakistan have confirmed the logic of weapon experts and stated that they have requested the home department and federal interior ministry on many occasions to issue security agencies licenses for automatic rifles, so that guards can neutralize the threat efficiently. But government regulators are not moved by these requests. Regarding identity of the guards hired, it transpired that while engaging guards the security agency verify their national identity card from NADRA through its ‘Verisys’ system, and other documents as well as the criminal record from respective police stations. On completion of these initial formalities, the guards are provided 1 to 3 days training which includes weapon handling, shoot ing and escort tactics. It is anybody’s guess how effectively a guard, who has never before used a weapon, can perform his duties effectively when exposed to a robbery attempt by professional robbers after being trained along these lines.On the question of fake identity cards and involvement of security personnel in crimes like bank robberies, it came to light that Nadra’s Verisys system takes much more time in verification of guards’ identity. Besides, there are certain “no-go areas” in our country where police has no control, such as Baluchistan, FATA and upper northern areas of Pakistan. Most of the guards involved in bank robberies were found to be belonging to those areas. The guards are also called from rural areas and inducted without any test.Verification is essential but, beyond that, a lot also depends on how clients interact with security guards deployed to protect them. “The problem is with the banks who engage their guards for duties they’re not supposed to do — like handling piles of cash. “If you’re going to wave Rs 500,000 around a man who earns Rs 8,000, you know what’s going to happen; it’s human instinct,” observed the owner of one of the security agencies. He accepted the fact that one to three days training is not sufficient but they have no other choice as there is no training centre for security guards. This is the reason why security firms prefer army retired personnel. "Companies like ours always prefer to employ personnel of the armed forces and believe that they are already trained, but for non-armed personnel, the companies have no training facilities. I think even the ex-army men need some training," he said. He demanded that government should at least allocate land for setting up a training institute for security guards. “We (APSAA) will build the institute and manage it on our own.” Similarly he demanded that govern-ment should facilitate the security firms by simplifying the verification process. The guards should at least be allowed to keep SMG on duty to protect the clients. On the question of cooperation between government regula-tors and security firms, he said that on provincial level, the Sindh government is much cooperative as compared to Punjab and other provinces. Officials from Sindh govern-ment are taking interest in resolving our problems and we

hope that things will be better in future. However, last month, Punjab government revoked operational privileges of 35 private security agencies that failed to provide data on their board of directors, summary of their security guards, their clients, their sanctioned quotas of weapons, security gadgets, and a record of training imparted to staff. The Home Department issued notices to the owners of the defaulting agencies to submit the required details or else their licenses would be revoked. Once the agencies failed to provide information within the deadline the Home Depart-ment revoked the licenses and ‘No Objection Certificate’ of those agencies.To a question on how a client can help the guard and security agencies in the fight against the crime, he replied that a lot of companies, such as banks, don’t update their CCTV systems. “When we provide an assessment of the area and recom-mend the number of guards required, they simply cut down the number, presumably, to cut their expenses. A factory spread on two acres only had one guard — the rest of the area was open. How a guard can secure the client in such a situation? Guards are also humans.” he added.The laws do regulate the security business and stipulate how these companies should be governed, but fall short not only in the implementation of that ordinance but also in securing the rights of the clients and company employees. To maintain the requisite standards, basic qualifications levels commensu-rate with those in developed countries, is required. While it is convenient to blame the private security companies for lapses, what can they do except cut corners because stiff competi-tion forces them to quote low prices to potential clients? Normally, salary of a civilian private guard ranges between Rs 8000 to Rs 14000, depending on experience. The salary of a retired army man ranges between Rs 15000 to Rs 25000. To bring private security guards and the companies under the ambit of federal and provincial regulations, membership of APSAA for both corporations and individuals must be made mandatory. Armed guards in private employment need to be regulated firmly. One of the basic disciplines they must follow is wearing uniforms to appear different from a gun-toting terrorist. Ensuring all these disciplines is the job of the security companies. But besides disciplining profes-sional guards must also be paid a higher minimum wage than that paid to a normal worker to fairly compensate the guards for their high-risk work environment as well as to dissuade them from linking up with criminals.

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Facebook - the world’s dominantsocial network goes publicPhysical assets are important and have their own worth

and value. But no less important are the intangibles as in cases they are more valuable than many tangible assets. Facebook of Mark Zuckerberg is an example in point where the chief assets are user data and details -the intan-gibles - which, in the words of Brian Wieser of Pivotal Research Group, are worth $ 83 billion and that their revenue will grow at least 30 percent for the next five years based on its status as an online directory for a good chunk of human race, with the names, photos, tastes and desires of nearly a billion people. Facebook was recently on a cross-country road show to pitch its highly anticipated initial offering. Already lots of investors scrambled to buy Facebook shares in anticipation that it will become money maker like Google. Mark Zucker-berg, Facebook’s chief, started this network from a Harvard University dormitory room. In 8 years time since its launch-ing, the network has amassed users at breakneck speed, kept them glued to the site for longer stretches of time and turned a profit by using their personal information to customize the advertisements they see. Presently, with over 900 million users, Facebook is considered as the world’s dominant social network especially in large emerging markets like Brazil and India. The Facebook aimed to achieve a valuation of $ 104 billion although, as some skeptics point out, the company’s revenue growth showed signs of slowing in the first quarter of the current year and, as per Bloomberg survey of 1,253 investors, analysts and traders found, a substantial majority was dubious about the valuation Facebook was seeking. The network will have to find out ways to generate revenue so as to meet the target. They can encourage and facilitate people to buy more and more goods and services with Facebook Credits, innovate new features and approaches and provide deeper data.A comparison of Facebook with Google, however, raises optimism for the network’s success in achieving the desired target. When Google went public, it also had many doubt-ers and the company had to lower its offering price to $ 85 a share. It closed at just more than $ 100 per share on the first day of trading. Now it sells for more than $ 600. Face-book has been much ahead of Google in terms of revenue as it brought in nearly $ 4 billion last year compared with Google’s $ 2 billion in 2003.What Facebook already has is a spectacularly rich vault of information about its users who are not likely to stay away from the site. The most pressing issue for Facebook execu-tives may be the mobile challenge. Wall Street had also expressed concern about the company’s ability to generate revenue from mobile users. Facebook’s response to that challenge so far has been to aggressively acquire companies focus on mobile for which it paid $ 1 billion in April. As revealed by the Facebook CEO, transforming its mobile and advertising experience are its top priorities in 2012.

Already, more than half of its over 900 million users access the site through mobile devices. Facebook was one of the most anticipated -- but also disap-pointing -- IPOs in recent history. Contrary to expectations, the breathlessly hyped IPO has turned into a huge Wall Street debacle. With the valuation target of $104 billion and intent to generate additional 10 billion dollars, the IPO was offered on 18th May, with an opening price of $38 per share. Initially it generated a lot of interest as evidenced by the spectacular rise in price at 42.05$ per share. 82 million shares were traded in the first 30 seconds. The number of shares traded rose to 110 million in just after 7 minutes, reaching a high per share price of $45. At the close of the first day, the number of shares traded stood at 458 million. However, as the social media giant edged toward the close of its first week of trading, questions started swirling about the company's valuation, its profitability and allegations that full details of the stock's likely value were shared with only a select group of people.According to reports from Reuters and several other news organizations, regulators are now looking into the possibil-ity that Facebook's Wall Street investment banks may have tipped off some clients that it wasn't necessarily a great buy or worth the hype it was receiving. And now its sharehold-ers have filed a lawsuit against the social network, CEO Mark Zuckerberg and a number of banks, alleging that crucial information was concealed ahead of the network’s IPO. The lawsuit, filed in the U.S District Court in Manhat-tan on May 23, charges the defendants with failing to disclose in the critical days leading up to initial public offer-ing "a severe and pronounced reduction."Facebook defended themselves by saying they "believe the lawsuit is without merit and will defend ourselves vigor-ously." All of the drama around Facebook's IPO may have some investors taking a very close look at the company -- and thinking twice about what its stock is really worth.On May 23, Congress got into the act. Senate Banking Committee started looking into Facebook's IPO. The Financial Industry Regulatory Authority and the state of Massachusetts are also scrutinizing the way the IPO was handled. Good luck for the Facebook.

reserves were expected to decline to $8.2bn from their level of $11.4bn till June 2012 due to a substantial rise in external debt servicing burden. Projections about end-2011-12 indicators and targets set based thereon were considered over-optimistic by the market observers.PSDP–most important given a backdrop of expanding gaps in the country’s physical infrastructure–was considered too little. What made the implementation of the PSDP doubtful was its make-up; federal share Rs 350bn and provincial share Rs 425bn. Could the provinces actually accumulate a surplus of Rs 425bn for investment in the PSDP? Such prudence has been a rarity in the past.What made the official hopes, estimates and predictions even more doubtful was the fact that it was assumed that, besides generating a surplus of Rs 475bn for investing in the PSDP, the provinces will also generate additional revenue surplus of Rs 110bn. Finally, what made the analysts wonder were the repeated promises by the Prime Minister, Finance Minister and Chairman FBR that no new taxes would be levied, and the rates of the existing taxes too will remain un-changed.Pakistan’s current internal and external circumstances, a huge rise in the burden of domestic and external debt servicing, a depressed investment environment due power load-shedding and rampant lawlessness on the streets, and Pakistan’s rising country risk perception doesn’t justify over-optimism. In fact a frightening aspect of this chaos is the slide in law enforcers’ confidence in their abilities and rising public hatred for them. According to Zafar Iqbal Qadri, Chairman National Disaster Management Authority, Pakistan will experience "a terrible" flood in the coming monsoon due adverse climate changes; that flood could affect 29 million people across the country.That, belatedly, the government too realized the importance of paying attention to the ground realities, was proved by the last minute efforts to, at least for once, sound credible on its promises of eliminating unannounced power load-shedding. Besides, the government also took steps to slow the ongoing slide in popularity such as asking Malik Riaz to cough up the amount sought by Somali pirates to free Pakistani mariners. The other publicity gimmick was to send a plane to India to bring back Dr Khalil Chishti–a job that could be done at a far lower cost by asking the Pak High Commission in India to arrange Dr Chishti’s travel by PIA, and ask two officers to accompany him on the flight to take care of him. But such moves only added to the analysts’ doubts about any realism being reflected in the budget 2012-13, because their fore-gone conclusion was that the budget was being twisted to fulfil the publicity needs of the regime in an election year.

n Baluchistan and Khyber Pukhtunkhaw, terrorism goes on as before. After the botched ‘Layari operation’, crime is

again rising on the streets of Karachi. In the rest of Pakistan, on a daily basis, power load-shedding brings thousands of angry citizens on to the streets and, to everyone’s amaze-ment, they damage the power distribution infrastructure, and set on fire public transport vehicles–all self-damaging acts. Surely, they are not the frustrated Pakistanis; in their ranks are those who have been asked to destroy whatever they can. Bank robberies have again picked up. A recent investigative exercise to screen the identity and capabilities of the security guards employed by private security agencies (prompted by the rise in bank robberies) revealed that many of the guards were untrained, and knew nothing about the use of the arms they were carrying; many were laid-off labourers, launderers, plumbers, gardeners, even ex-criminals.During a recent TV interview of Mr Yusuf Raza Gilani (that he gave to the CNN) the anchor had to ask him to look into her eyes. She also informed him that, according to a recent opinion poll, only 20 percent of the Pakistanis consider him a competent Prime Minister and nearly a third are frustrated with governance in Pakistan to the point where they want to leave Pakistan. In response Mr Gilani said “Why don’t they? Who’s stopping them?” His reply stunned the anchorperson. Rumour has it that the banking sector has finally expressed its reluctance to reduce the circular debt of the power sector that is again close to Rs 740bn, by investing in more T-bills or GoP bonds. Consequently, the government is planning to sell these T-bill/bonds to those few state owned enterprises that still have some liquid resources. What will happen once this resource too has been consumed is anybody’s guess. According to the latest statistics released by the State Bank of Pakistan, during the current fiscal year, fresh investment, both domestic and foreign, dropped to about half its level of last year. But in this chaotic environment (to contain which the government has yet to show any credible concerns or its commitment,) it’s officials are coming up, almost every day, with high economic growth promises that are amazing.In the Annual Plan Coordination Committee (APCC) report released in mid-May, the prediction was that, during 2012-13, almost every sector would grow by 4 percent or above, and foreign direct investment (FDI) inflow would be $1.940bn, although FDI in the first ten months of the current financial year amounted only to $590mln. APCC’s 2012-13 estimate of FDI was based on the assumption that by June 30, 2012 FDI inflows would touch $840mln.It was also assumed that exports will touch $26bn implying a growth of 7.3 percent over the 2011-12 target of $24.8bn but exports actually recorded until April 2012 amounted to only $19.4bn and there is no way they could touch the target of $24.8bn. However, assuming that this would happen, it was predicted that the trade deficit would drop to $16.8bn from its projected level of $17.65bn for June 2012. In spite thereof current account deficit was expected to rise to $5.2bn from its level of $4.2bn targeted for June 2012 and official foreign exchange

• Real Investment has declined from 13.1% of GDP last year to 12.5% in 2011-12; fixed investment declined to 10.9% of GDP in 2011-12 from 11.5% last year.

• Private investment also contracted to 7.9% of GDP in 2011-12 as compared to 8.6% of GDP last year.

• Public investment was 3.0% of GDP in 2011-12 vs. 2.9% last year.

• National savings formed 10.7% of GDP in 2011-12 vs. 13.2% in 2010-11.

• Foreign Direct Investment stood at $668mln during July-April 2011-12 vs. $1,293mln last year.

• Workers’ Remittances grew 25.8% in 2011 over their 2010 level. Monthly average during July-April 2011-12 was $1.09bn compared to $0.90bn in the corresponding period last year.

• Overall fiscal deficit was at 5.0 % of GDP in July-April 2012 against 5.5% during the comparable period last year.

• Under PSDP, Rs 304 billion were released that facilitated completion of 200 projects.

• SBP lowered the discount rate by 200 bps to 12%.• Net Domestic Assets during July-May 2011-12 rose to Rs

881bn vs. Rs 482bn during the same period last year; rise in this indicator mainly reflected a rise in public borrowing.

• The weighted average lending rate (including zero mark- up) on loans was 12.8% p.a. while weighted average deposit rate (including zero mark-up) was 6.98% p.a. and in March 2012, the spread stood at 5.8%.

• KSE 100 index was at 12,496 on June 20, 2011; at 14,618 on 7th May, 2012. and closed at 13,877 on June 1, 2012

• During July-March 2011-12, stock markets experienced a net outflow of $176mln.

• Food and non-food inflation averaged 11.1% and 10.7% respectively during July-March 2011-12 vs. 18.8% and 10.8% in the same period last year.

• Exports during July-April 2012 were $20.5 billion compared to $20.46 billion last year.

• Imports grew by 14.5% touching $33.1bn during July-April 2012.

• Current account deficit stood at $3.4bn.• Foreign exchange reserves fell to $16.5bn at the end of

April 2012 vs. $17bn at end-April 2011.• Pak Rupee depreciated by 3.4% during July-April 2011-

12 vs. depreciation of 2.2% in July-April 2010-11.• Public debt stood at Rs 12,024bn on March 31, 2012 and

was 58.2% of the GDP. • At end-March 2012, servicing of public debt amounted to Rs

720.3bn vs. budgeted amount of Rs 1034.2bn for full year. • Total of mobile subscribers reached 118.3mln by end-

March 2012.• During July-March 2012, Rs 8 billion has been disbursed

to 350,485 beneficiaries by EOBI. • The level of access to drinking water is quite “impressive”.

According to Pakistan Bureau of Statistics, Pakistan Social and Living Standards Measurement Survey 2010-11, access to drinking water to urban and rural population of Pakistan is 94% and 84%. The MDG target is a ratio of 93% by 2015.

• GDP growth in 2011-12 is estimated at 3.7% vs. 3.0% last year.

• Remittances are estimated close to $13 billion, a rise of 16%.• FBR’s tax collection target for 2011-12 was Rs 1,952bn.

During July-April, collection stood at Rs 1,445bn against Rs 1,149.8bn in July-April 2010-11, showing a growth of 24%.

• Agriculture recorded a growth of 3.1% vs. 2.4% last year. • The Large Scale Manufacturing (LSM) growth was 1.1%

during July-March 2011-12 against 1.0% last year.• The total flood damages were estimated at Rs 324.5bn

($3.7bn). Rehabilitation and cost of recovery is estimated at Rs 239 billion ($2.8bn).

• Commodity sector grew by 3.3% against 1.5% during 2010-11. • Major Crops registered growth of 3.2% compared to a

drop of 0.2% last year. • Forestry grew by 0.95% compared to contraction of

0.40% last year. • Construction Sector grew by 6.5% compared to a drop

of 7.1% last year. • Mining and quarrying grew by 4.4% during July-March

2011-12 compared to a drop of 1.3% last year. • Electricity and gas distribution witnessed negative growth

of 1.6% against negative growth of 7.3% last year. • Services sector grew by 4.0% during July-March 2011-12

vs. 4.4% last year. • Finance and Insurance grew by 6.5%, Social and Com-

munity Services by 6.8 % and Wholesale and Retail Trade by 3.6%.

• Private consumption grew by 11.6% compared to 3.7% last year and government consumption grew by 8.2% compared to 5.2 % last year.

• Private consumption expenditure reached 75% of GDP and public consumption reached 13% of GDP.

• Per capita real income grew by 2.3% compared to 1.3% last year i.e. from $1,258 in 2010-11 to $1,372 in 2011-12.

Risk aversion in banksThere are no illusions about the way Pakistan’s economy is being ‘managed’. One of the factors crippling it, courtesy the state, is power load-shedding. Lawlessness–fuelled by politi-cal parties via economy crippling strikes, and the violence and destruction of physical assets they entail, is no secret either. What will follow would be depletion of the country’s foreign exchange reserves and resultant depreciation of the Rupee.But it would be irresponsible on the part of the stakehold-ers to accept this as fate acompli. They must try to contain this slide because there simply is no other option. Not taking up this challenge implies becoming bystanders–a conduct that is shameful for those who benefitted from Pakistan’s economy for decades, became billionaires and, sadly, became less and less patriotic. Just one indication thereof is that you no longer see a school, college, or hospital built by a business tycoon or a business group, which used to be the case until 1970s.Most worrisome is the fact that banks–key stakeholders in the economy–have accepted this scenario as fate acompli. This was pointed out by none other than the global credit rating agencies that have warned Pakistan’s banks to cut excessive lending to the state because by doing so they will lower their risk factor down to the risk associated with the state which, in the case of Pakistan, is steadily drifting downwards. Risk-aversion in banks–regularly pointed out by trade bodies and market observers–hasn’t shown any signs that suggest its being overcome–a clear sign thereof being low credit to the private sector. Risk factor of the private sector has certainly gone up but a significant drop in credit to the private sector also indicates that banks feel that their frontlines are not the sort of risk managers that they ought to be reflecting poor management training and development efforts by banks. In 2011, banks’ non-performing loans (NPLs) crossed 14 percent of their loan portfolios. Although the after-effects of the recession that began towards the end of 2007 continue to be blamed for the rise in NPLs, steps to contain NPLs are not as visible as they ought to be, given the experience of ‘soft’ lending practices that, at times, bordered on recklessness. The flaw that hasn’t been addressed effectively is revision of internal risk assessment procedures, but that doesn’t imply making them overly bookish or practically un-enforceable.What banks must accept is the fact that they will have to lend against various collaterals; shunning lending against certain types thereof amounts to risk-aversion–the blame banks now suffer from. What banks need to revise are the checks and balances that can secure lending against such collateral. One such collateral is ‘trade receivables or book debts’. It would be highly unrealistic not to lend against this collateral, which is the asset wherein most businesses block the bulk of their financial resources to stay in business. All the banks need to do is to implement the requisite legal safeguards.

egally, these debts are called ‘choses in action’ meaning that they are a property which a borrower does not

actually possess but which it has the legal right to receive on demand. The bank’s primary concern should be to ensure that the monies due to the borrower from its customers are received directly by the bank for reduction of the finance facility secured by this collateral. The common (and risky) practice is to accept assignment of certain book debts and not the entire lot, but without adequate safeguards. While negotiating with the borrower a finance facility secured by book debts, the bank should include the entire book debts of the borrower and not restrict itself to that portion of the book debts against which the borrower’s credit limit has been calculated. In the event that the borrower has already collateralized part of its book debts the bank must identify the debtors that it considers reason-able risk and extend a financing limit up to a certain percentage of the average outstanding balances in the accounts of the identified debtors. To ensure that book debts are not realized by the customer directly, the bank must require that book debts be assigned to the bank i.e. the borrower’s customers pledge to pay their dues to the borrower’s bank rather than directly to the borrower. It means that the borrower must instruct it’s customers to pay to the bank, and simultaneously relinquish its right to receive those payments directly. This is accom-plished by taking ‘assignment’ over book debts, which means a charge over all or specific existing and future book debts of the borrower. Assignment of the charge is presumed to have been effected even if the borrower makes a verbal commitment to that effect or simply instructs its customers to pay their dues to the bank. But in practice, all necessary documentation must be completed conclusively to establish the bank’s charge on customer’s book debts and a written confirmation by the borrower’s customers that they will pay their dues to the bank.While recommending a finance facility secured by book debts or trade receivables, recommending staff must indicate the age of the existing book debts against which finance facility is to be allowed. The ‘age’ of a book debt means the period wherein it is paid by the debtor. Banks must investigate this by going through book debts of the borrower to verify the age of the book debts. Ideally, it should be based on checking the track record of each invoice issued by the borrower on account of supplies to a customer during the last six months to verify the average time after which the invoices were paid compared to the period for which the borrower had actually extended credit to the debtor. Generally, the bank would not advance against debts that have a track record of remaining overdue for unreasonable periods. However, individual cases could be considered on their merits keeping in view the period of credit normally availed by buyers in the borrower’s business–unfair but

Bank �nance for book debts:how to facilitate itL

BBankin & Financeg

June 201239

n June 1 the federal finance minister announced the federal budget amid angry demonstrations by the

opposition parties. The key aspect of the taxation proposals was many minor tax reliefs whose net impact would be additional tax revenue of Rs 31.77bn but they made the budget truly an ‘election-year’, and hence apparently ‘popu-lar’ budget. But, as this magazine went for printing, the proposals came under harsh scrutiny for their miniscule effect and prospects of even higher public debt given the existing load of unpaid public debt.Budget Highlights • Inflation reduced to 10.8%.• Current expenditure registered 10% decrease.• Total budget volume for 2012-13 is Rs 2,960bn.• Gross revenue receipts in 2012-13 would be Rs 3,234bn.• FBR’s tax collection target for 2012-13 is Rs 2,381bn.• Budget deficit is likely to remain at Rs 1,105bn (net of

surplus of Rs 80bn to be generated by provinces).• Rs 1,459bn would be transferred to provinces under

NFC Award.• Remittances by overseas Pakistan will cross $13bn mark

during 2012-13.• GDP growth rate is expected to be 3.7% as compared to

3.4% during last two years.Major achievements in 2011-12• Industrial growth would be 3.4% against 3.1% last year.• Subsidy of Rs 390bn has already been given to electric-

ity sector during 2012-13.• Govt gave relief of Rs 70bn on petroleum products.• Govt injected 3500MW of electricity to the National Grid.• Total volume of grants reaches 70% of Divisible Pool.Support for education in 2012-13• 100,000 youth to get internships, technical training.• 20,000 graduates will be imparted skilled training to fulfil

domestic and foreign manpower demand.• Federation will finance 11,500 jobs for Baloch youth.• Bachelor and master’s degree holders will get 40,000 intern-

ships each, in public and private sector.• Rs 16bn will be allocated for Higher Education.• Federation will pay fees of students (for PhD and masters

courses) from Baluchistan, Fata, and Gilgit-Baltistan.• 18 raw materials and 9 components used in textbook printing

will be exempted from Customs Duty.Relief to citizens in 2012-13• Rs 70bn will be allocated for BISP.• Utility Stores will offer 10% additional discount to BISP

cardholders.• Federal government employees will get 20% ad hoc relief

in pay and pension.• Income exempted from tax enhanced up to Rs 400,000.

Taxation measures for 2012-13• Minimum gross turnover tax reduced from 1% to 0.5%.• Withholding tax ceiling for cash withdrawal from banks

enhanced from Rs 25,000 to Rs 50,000.• FED abolished on 10 items.• FED on cement cut from Rs750 to 500 per metric

tonne.• Customs duty reduced from 10 to 5% on 88 raw materi-

als of Pharmaceutical Industry. • Sales Tax rate reduced from 17% to 16%.• Subsidy of Rs 50bn will be given on fertilizer.• No withholding tax on profit on intra-group debt. • All manufacturers made withholding agents to collect

1% advance tax. • Excise duty on cigarettes has been increased. • Sales tax on steel sector has been enhanced. • FED on air travel in economy and economy plus classes

has been reduced but raised for business and first classes. • Sales Tax on tea imports has been cut to 5% from 16% • Tax arbitrage enjoyed by banks on money market funds

has been closed; it will now be taxed at 25% for tax year 2013 and at normal rate of 35 % in 2014.

Development• National Economic Coordination Council has approved

Annual Development Plan of Rs 873 bn.• Federation will provide additional Rs 154bn for projects

(recommended by parliamentarians) outside PSDP.• Federation has allocated Rs 360bn under PSDP for 96

ongoing projects.• Rs 69bn earmarked for Electricity sector, and WAPDA

and electric companies will be given Rs115 bn.• Rs 84bn allocated for Transport and Communication

(Rs 51bn for NHA, Rs 23bn for Railways).• Baluchistan share increased to 9.09% in Divisible Pool.• Block Development Allocation enhanced up to Rs 16bn

for Gilgit-Baltistan.• Rs 10bn allocated for mega projects in Gilgit-Baltistan.• Rs 17bn allocated in PSDP for Fata.• Rs 12bn allocated for development projects in Azad

Kashmir, and Rs 16.5bn for current expenditure besides a loan of Rs 8.5 bn.

• Major aims to be achieved in 2012-13: • Inflation would be cut down to single digit.• Government will set up 2,000 new Utility Stores.• Pakistan will get 2bn cubic feet of gas from Pak-Iran gas

pipeline, Turkmenistan-Afghanistan-Pakistan-India gas pipeline.

• 500mln cubic feet of LNG will be made available.• Rs 10 billion will be allocated for Export Development

Fund.

BBankin & Financegaccepted practice. These are the relevant factors to determine the acceptable age of the book debts against which a financing facility may be extended and the extent to which the book debts be financed i.e. fully or partly.A charge over book debts is essentially a short-term security whose quantum fluctuates as maturing debts are realized and fresh credit is extended by the borrower. As such, terms of the facility to be secured by such a security should provide for a drawing power after retaining a margin. Financing facilities secured by book debts may be considered if they represent credit extended to names that have a sound reputation in the market, which should be established by bank’s independent investigations. The other issue of critical importance is the way the borrower lodges its claims against its customers for payment for the goods or services supplied by the borrower. Book debts that are represented by bills of exchange drawn by the borrower and accepted by its customers, are legally more secure claims because customers (or their authorised persons) acknowledge their liabilities to the borrower and accept to retire them on ‘specific’ dates; defaults by such customers render them liable for punishment without a long legal battle.Under this arrangement, banks need to take possession of the accepted bills of exchange by obtaining assignment thereof by their borrowers. This enables the bank to hold the accepted bills (negotiable instruments) that are a better form of security than only taking assignment over borrower’s debts supported by copies of bills and delivery receipts. This also ensures that the debts are received directly by the bank because the bank, not the borrower, presents the bills to the borrower’s custom-ers on the date on which they become due for payment. The practice whereby the borrower supplies goods against its buyer’s acknowledgement of their ‘receipt’ on the transporter’s bill is a weak mechanism because this acknowledgement does not amount to legal ‘acceptance’ of its liability to the borrower i.e. the supplier. As such, it is difficult to bind a buyer because the borrower i.e. supplier must provide all evidence of having supplied the goods or services–a time consuming exercise.Branch Managers must also impress upon the borrowers that they must deposit in their loan account with the lending bank any debt payments received directly from their customers. An assignment can be equitable or registered. For limited liability concerns, a charge must also be registered on the book debts. Assignment of receivable is effected in the following manner:• The borrower executes the bank’s charge forms thereby agreeing

not to receive any payments from its customers directly, deposit-ing with the lending bank all such payments received directly, and making the lending bank it’s legally authorised collecting agent.

• The charge form should then be submitted to the local Registration Office of the SECP for registration of the bank’s charge on the borrower’s total or specific book debts.

• Borrower should also serve written notice to its trade/other debtors to pay the proceeds of the bills drawn on them to the lending bank for credit of the borrower’s account, but these notices should be routed through the lending bank.

• Notices from the borrower should be sent to its customers under the bank’s covering letter addressed to each customer advising that customer the address of the lending bank and the borrower’s account details.

• Borrower’s customers must acknowledge the receipt of the notice and confirm that payment will be made directly to the lending bank. The bank must, as far as possible, ensure that such acknowl-edgements are authentic and signed by the competent person in the buyer’s office. This may require confirmation of the ‘autho-rised person’ status of the person acknowledging this notice.

• Acknowledgements of notices of assignment received from the borrower’s customers should be saved in the bank.

• The borrower must endorse all Accepted Bills of Exchange received from its customers in favour of the lending bank thereby making that bank its legally authorised collecting agent.

The Branch Manager should also obtain from the borrower a monthly statement of all outstanding book debts and reconcile details of debts realized as per borrower’s records with credit entries in customer’s statement of account to establish that no assigned payments were received directly by the customer. Strict supervision should be exercised over the account.While banks are obliged to fund their borrowers’ book debts, it is equally important that businesses wishing to avail a credit facility backed by book debts make it more comforting for the banks to extend financing facilities on this basis. The one important way of going about facilitating such financing is that businesses supplying goods on credit require their buyers to establish local letters of credit (LLC) favouring the suppliers.

Business can reduce banks’ risk-aversionBanks would feel much more at ease while lending against a stock of trade receivables or book debts that are backed by a LLC because of the legal protection this arrangement provides against possible defaults by the LLC openers i.e. the buyers. It is institutionalization of such practices that build the image of markets as professionally managed, more reliable and less risky that eventually improves the risk rating of a country.It is time Pakistan’s trade bodies looked into crucial issues – the ones that build market image if banks’ risk-aversion is to be minimized. Businesses must not overlook the fact that the banking sector provides them peoples’ savings and are bound to lend prudentially–that’s the promise based whereon they get the right to ask people to place their savings in banks. This right comes with the obligation of lending peoples’ savings only for invest-ment in businesses that have ‘reasonable’ and ‘manageable’ risk. Banks decide on what is a reasonable and manageable risk on the basis of their ability to monitor risk at the various stages of the financed transaction/venture, and their ability to recover the amounts lent by them either from the borrower or from entities that have benefitted from it. While banks are blamed for risk-aversion, businesses did little to dilute this tendency.

June 201240

urrency devaluation is not a new phenomenon; it has been around in all times and ages. It is a natural process

in the history of financial markets. One of the biggest devalu-ation wave in history was in 1930s when at least nine of the leading world economies devalued their national currencies. In the recent past, world currencies have passed through a difficult phase of history in terms of devaluation. Indian Rupee is no exception. During the last about a year or so, India’s rupee is in freefall losing value against US dollar. The slump has been quite appreciable. Since July last year, the Indian rupee report-edly fell by more than 27 percent against US dollar—one of the biggest declines among Asian currencies. The rupee hit a record low to the US dollar for the fifth straight session on May 22, weighed down by large dollar demand from oil firms and weak global risk sentiment, especially after Fitch downgraded Japan's ratings. The Reserve Bank of India (RBI) announced a string of measures to curb the rupee's fall. It also intervened aggressively earlier this month. But none of the measures taken by RBI succeeded in yeilding any positive results. The falls came even after the Reserve Bank of India announced measures to target arbitrage and speculation in futures and options markets, with traders saying this market segment was too small to have a big impact. Some traders said the market had become too volatile because of the worsening global environ-ment and the RBI’s presence would only add to that volatility. "There was huge demand from oil firms. Later it turned into complete panic with the Japan downgrade, euro and pound falling and equities also turning negative," said Vikas Chittiprolu, a senior foreign exchange trader with state-run Andhra Bank.On May 23, the rupee fell to an all-time low of 55.47 per dollar, before closing at 55.39/40, compared to its May 22 close of 55.03/04. Experts who, a few weeks ago, predicted that the Indian currency might stabilize at 55 rupees to the dollar, now say this may happen at 60 rupees. Although the rupee is now well below the key psychological level of 55 to the dollar, the RBI has refrained from intervening.

The analysts have identified several reasons for the decline of the Indian rupee. One of the reasons given is balance of trade. Since India’s imports exceed its exports (in value terms) it results in a huge imbalance in trade. In the financial year ending March 2012, the deficit rose to $185bn (£118bn) compared with the original estimate of $160bn. There are expecta-tions, however, that the trade

deficit may be slightly lower in 2012-13, due to falling global crude prices and recent government curbs on gold imports. Although India has become an attractive destination which can attract foreign capital as well as money from non-resident citizens, it is not enough to make up for the trade deficit. In 2011-12,

India received foreign direct investment of more than $30bn, in addition to a net inflow of $18bn from foreign institutional investors in stocks and bonds. But uncertainty about India's commitment to economic reforms, retrospective taxes, and policy paralysis within the government have forced foreigners to either postpone their investment decisions, or take money out of Indian stock markets leading to consequent increase in the country's current account deficit - a broader measure of the trade deficit. In 2011-12, this deficit was more than $74bn, a huge jump from less than $46bn a year ago. As a result India's foreign exchange reserves have dropped from a peak of $320bn in September 2011 to $290bn now. According to estimates, in 2012-13 the trade deficit may be even higher at $77bn. Such a scenario encourages more people to sell rupees to buy dollars (or any other foreign currency that they require). Importers go for dollars to cater for their needs to buy goods abroad while exporters keep their foreign earnings abroad as they expect the rupee to fall further. Meanwhile, foreign inves-tors increase the demand for dollars as they convert their rupee assets into dollars to take their money out. This demand-supply gap between the dollar and the rupee leads to devaluation. This trend was further accentuated by low growth and high inflation in India. According to reports, India’s annual economic growth hovered around 6.5% in 2011-12. The expec-tations for 2012-13 are also not too encouraging. Couple this with high inflation which, according to analysts, may rise this year to double digits, due to high food and fuel prices, if the government is unable to curb its fiscal deficit. In this scenario, most foreigners as well as Indians will tend to take money abroad, or keep it away from India.Global investors are also hesitant about making any investment abroad in countries such as India due to the economic crisis in their respective countries. That has added further selling pressure on the Indian rupee.In the recent past, the Reserve Bank of India's bid to sell dollars in the open market to restrict the rupee slide not only failed to produce any positive results but it complicated the situation further because once the currency traders and speculators realize that India's central bank is unable to manage its exchange rate, and reduce the adverse impact on its currency, they may enter the market in a big way to sell the rupee which may result into further devaluation of the Indian currency.

by A.B. Shahid

There was a time when the Central Bank auditors would inspect (on a selective basis) borrowers’ stocks of goods financed by banks. They had the skills to inspect the goods stored in various types of storage facilities, do sample checking of the stock to deter-mine uniformity of its quality and its aging, as well as stock-conduciveness of the storage facilities, and the fire-fighting arrangements including testing of hydrants. Let alone Central Bankers, commercial bankers too now lack these skills after out-sourcing of this vital function to support services. Instead of improving risk management skills, banks reacted by curtailing credit to the private sector. While the Central Bank pointed to this distortion and its impact on GDP growth, not much was done to push the banks to do their basic job–fund business and industry. Curtailing credit to the private sector is a reflection more of the banks’ loss of confidence in their risk-taking capacities, but should they react in this fashion or should they revitalize their weak capacities for delivering?Another major factor that has scared banks away from lending to the private sector is their limited capacity for tracking a variety of risks that impact borrowers’ ability to generate requisite repayment capacities–volatile interest and exchange rates, commodity prices, banks’ own lack of requisite lines of credit from banks abroad, and lack of reliable hedging tools. While banks need to be pushed into doing what they ought to, the Central Bank should also accept that shunning of market risk by banks clearly indicates that the state is failing in playing its role in containing market risk. Even though it may not have been said as bluntly as did Alan Greenspan, the way things stand give the impression that, in Pakistan too, the Central Bank believes in ‘self-regulation’ by markets. No assumption could be more off the mark than this view.Besides reflecting on the woes of the Central Bank in market stabilization, the unregulated state of Pakistani markets also reflects the concern trade associations have for their image; it is time the trade associations were asked to devise tough self-regulatory codes for all their members violating which would automatically blackball the violator and require other association members to stop dealing with the violator. It is shocking that most trade bodies seem oblivious to the stories about the illegal sale (infact, theft) of the goods pledged to the banks, hoarding-driven price hikes, violation of the supply contract terms – the criminal acts that trade bodies do not take cognizance of, nor take punitive action against their committers. This is a dark spot on the image of these august bodies.What these associations don’t realize is the fact that rise in these crimes is frightening banks to a point where they are avoiding lending to the private sector, especially SMEs – the

ver since the current recession began, questions have been raised about the role Central Banks played in ‘crystallizing’

it, and their preparedness for facing up to the fallout from such an eventuality. Only few Central Banks passed this test on all counts. Not surprisingly, governments everywhere are now agreeable to tougher regulation of their financial system.Earlier this year, the British government passed a legislation whereby, on March 1 next year, Financial Services Authority (FSA) that presently supervises British banks and insurance companies, will hand over this function back to the Bank of England (BoE) restoring BoE’s overall supervisory authority that was curtailed in 1997 after the creation of the FSA. This, according to the Financial Times, makes BoE the most powerful bank in Europe.In Pakistan too we saw the passage of the bill that empowers the Central Bank with greater autonomy (though time alone will prove if the Central Bank can exercise its autonomy) but market observers are of the view that autonomy alone is not enough; what Central Banks need to worry about is the setup that is necessary to deliver on the promise that comes with their being empowered–calibre in the frontlines and experience-based reaction speed, which also implies increased staff strength.The issue being highlighted is that Central Banks’ boards of directors must be far more conversant with the trends in the domestic and foreign financial markets directly impacting the domestic markets, and be assertive in their stand thereby ensur-ing that key decisions of the Central Bank don’t amount to a

mere endorsement of Central Bank Governor’s stand on the subject. It is no more deniable, that Central Bank Governors’ excessive confidence in “self-regulation” by markets–a view the last Federal Reserve Bank Governor evolved and went on believing in, was blamed as the key driver of the subse-quent recession.Politicians nowhere seemed to know (or perhaps cared about

knowing) was the dark side of market de-regulation that they took pride in affording business and industry but the current recession has taught them some pretty harsh lessons. That is why the shadow Chancellor of the Exchequer thinks that an enlarged supervisory role for the BoE is a challenge because the world has changed a lot since 1997. “It cannot be the old BoE where every decision is made under, or in the name of, the governor,” says he, and then advocates a reform of board of directors by saying that unless the board is reconstituted it won’t work. What this implies is reviewing the current profile of governance of the financial services sector. It is manifestly clear that banks’ lending practices need a total overhaul but banks haven’t reacted by augmenting their lending skills, especially in their frontlines, nor sought regulation of the support services to make those service providers pay for their sins so that they realize that they too have a stake in the risks that banks accept.

Central Banking: theemerging challengesE

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Undeniably, Central Bank Governors re-posed excessive faith in markets’ ‘self-regulation’–a view the last Fed Governor evolved and relied on

Banks’ lending practices need an overhaul of

the lending skills, in the

frontlines, and regulation of the support services

to take their share in the credit risk.

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t is hard to recall chaos of a profile matching the one that is now engulfing

the world. Tragically, it is the outcome of the blind exuberance that was encouraged by the democracies pursuing market deregulation and globalization of trade to justify closing their industrial units since importing cheap goods (instead of produc-ing them) made fair economic sense– without any concern for the eventual consequences of opting for this reckless route to governance of the state.In Europe, Greece, Spain, Ireland and Iceland are the classic examples of how living on borrowed money becomes a part of a nation’s faith. To a lesser extent, this is also true of Italy, France and Britain; where they all went wrong was to believe that following the US–promoter of these tendencies–was the sensible strategy to adopt. Sadly, the combined genius of the EU (except Germany) couldn’t visualize where its members were headed. The collective failure of the EU to popularize austerity in its ranks clearly manifests that Europe’s population has become too exuberant to adopt even a basic discipline such as giving up wasteful consumption. The Greek simply refuse to do so, showing zero concern for the nation’s inde- btedness as well as for the fact that no one is ready to lend them anymore, let alone being in a position to do so.They don’t seem to realize that despite being incredibly over-burdened by debt the US can afford to persist with its flawed conduct because of its being an awe-inspiring ‘super’ power. No European country, least of all Greece, has that muscle; to recapture their many former colonies in Asia and Africa– which is now considered the way out for indebted European nations –they need US support, as proved in Libya, and to be proved in Syria, and in the invasions thereafter. China may have the biggest share in this tragedy, but so have the others includ-

ing the Saudis and the Persian Gulf oil-exporting states.In a public address in late March, Congressman Walter Jones from North Carolina referred to “Uncle Chang”; it hit his audience with an awk- ward clang because Walter was admitting a harsh truth whether one liked it or not.He said “We are spending $10 billion a month that we can’t even pay for…..Uncle

Chang is lending us the money to pay what we are spending [on the war] in Afghanistan.” Walter is a Southern Republi-can dove who, very oddly, is blessed with a fair sense of where the US is headed.This isn’t a reflection merely on the mindset of the past and present US administrations, but as much on those countries

that blindly kept their currencies tied to the US dollar and so kept invest hard-earned wealth in the US public debt that indirectly helped the US turn into the monstrosity it has become over time. Bigger a country’s investment in US public debt bigger is its share in nourish-ing a more visionless leadership in the US. Had that not been the case the US

would have been forced to shift its attention on its economy much earlier. Put together, this global scenario paints a shocking picture of the collective leadership of the world; it makes you wonder whether any world leader thinks even about tomorrow, let alone five or ten years ahead; these leaders specialize in glib talking, not in telling their nations the ground realities because they don’t have the guts to push for adopting austerity by their nations. Instead, they come up with dreadful options to remedy resource scarcity. Re-colonizing resource-rich Asia and Africa is an option that Europe and the US can go for via the popular revolt route, and with the UN covertly with them, they could materialize this plan starting with economic sanctions and then invasion, both to restore peace. What make this plan workable are the power- thirsty leaders in Asia and the Middle East–the one in Syria is providing a horrible example thereof. Closely following the footmarks of Syria is Pakistan – a state with insurgencies going on in every one of its provinces, the latest addition to this scenario being the port city of Kara-chi. But the political leadership is not even partly focused on this developing threat to the country’s existence. On the contrary its focus is on defending its wholly illegal actions to the point of defying the highest courts of the country. Parliamentarians claim immunity from accountability, because they have been ‘elected’ by ‘the court of the people’ that is far above any law court. Doesn’t it border on sheer dictatorship? In many other countries things are slightly better in the sense that state officeholders resign after being accused of corrupt conduct; mismanaging the state, cronyism and corruption, all rampant in connivance with business and industry. These trends are particularly deplorable in democracies yet they go on. The most recent example thereof all over the world was the way governments ‘bailed out’ the visibly reckless entities in their private sectors without punishing their owners and managers for initially making these entities what they now call ‘too-big-to-fail’, and then managing them in as reckless a fashion in the pursuit of profit. That all this went on under the noses of parliaments has yet to be dealt with to mend the flawed democracy we all practice.The ‘occupy’ movement that began in New York and spread all over the world manifests people’s loss of confidence in a leadership that is heralded by elections; what the world needs are visionary managers not glib-talking, tactlessly self-centred slogan mongers. This rudderless world needs real leaders.

Prudent State Bank of Pakistan actionIn early May, State Bank of Pakistan acted prudently when it disallowed four big Pakistani banks (Habib Bank Ltd, UnitedBank Ltd, MCB Bank Ltd and Allied Bank Ltd) from acquiring the Pakistan operations of the Hong Kong and Shanghai Banking Corp (HSBC). The logic was based on global experiences that now forbid making big banks ‘too-big-to-fail’ banks; a sure sign of learning, the hard way. Besides, anyone of the ‘big four’ that acquired HSBC would have ended up with a larger expo-sure to many of their big borrowers banking with HSBC and thus wholly inadvisable. Bank of America, Citibank, Barclays, the Royal Bank of Scotland and many others learned this at a huge cost. What triggered their reckless expansion was profit via dominance i.e. zero competition–a tendency that destroyed all empires. The British, French, Dutch and Spanish empires had faded into history, at least visibly, by the 1960s. This should have taught one clear lesson; a tendency for domination is fatal. As it is, the big five banks’ network, which also includes the National Bank of Pakistan, have nearly 50 percent aggre-gate market share of total banking business; in certain sub-sectors i.e. market liquidity, their share exceeds 60 percent, which gives them a clear upper hand. Given this strength, the effort to focus on should be developing the skills and specializations that give them an upper hand in risk management – now the key to earning higher profits by limiting losses to known and manageable levels.This, however, is not prominently visible. Market research is still a low priority, much less its being niche-based to really serve its purpose, which is to guide SMEs that have no way of fathoming the complexities of the volatility in commodity prices and exchange rates – the factors on which hangs their survival and generation of repayment capacity. Nothing that banks do can be more dangerous than relying on the view of the small time traders, given their limited access to critical data about the overall market.If banks with country-wide networks and access to domestic markets could devise an internal data-based system for trend analyses, they will be far better placed for risk-taking, at least in the context of domestic markets. This is the aspect that is now being emphasized, and the outlines of Basle Accord- III are pretty clear on developing internal risk-rating system that is constantly up-dated based on the trends noted by banks internally. While developing this vital skill is impera-tive, it is not as yet getting the importance it deserves.Perhaps, it is time the Central Bank made it mandatory for banks to install a capacity for niche-based real-time research meaning thereby that banks must monitor at least those risks that have an impact on their risk-asset portfo-lios. This is now imperative if banks have to overcome their fears of market risks that are restraining them from lending to the private sector. It is time banks confidently began lending to the private sector; if that doesn’t happen, the ongoing financing of loss-making state-owned enterprise via T-Bills and GoP bonds,will lead to only one outcome; lower GDP and all that it will entail.

sector that forms the back-bone of every economy that includes even the majastic economy of Germany and Japan. The moves to re-regulate the activities of financial sector will be criticised and strongly opposed not just by financial sector but by business and industry, which stand to lose once the financial services

sector is regulated to a point where it is asked to shun its current weak lending practices. The shadow Chancellor of the Exchequer’s view has a great deal of sense; it wasn’t surprising that the markets reacted to it negatively and, courtesy their contacts in the global media, it is now making headlines.Visualizing the changes in the profile of risk manage-ment driven by the exuberance preceding the events of 2008, is not a tough challenge anymore; to forecast them, we must analyze cause-effect relationships, and ask whether they were the result of hurried deregulation and speculative excesses that propelled them or policy failures such as excessively low interest rates, the reckless level that credit multiplier climbed, or was weak market supervision its cause? The fact is that after dismemberment of the Soviet Union and death of communism, capitalism found acceptance in Russia and China and came out in its true colours viz. globalization of trade, export growth epitomizing success regardless of the critical inter-dependencies it gave rise to and competition devoid of ethics and social responsibility. Markets promoted consumption and banks expanded via leverage in the pursuit of profit forgetting the fact that this combination led to a tragic end of all economic cycles. Central banks remained fixated on taming inflation, not on bank supervision to check the build-up of asset bubbles. Macro and financial economists advocated efficiency of the markets, their ability to self-regulate, and benefits of inno-vation, but failed to spot the budding crisis. To Harvard University’s Robert Barro and Princeton University’s Paul Krugman, past 30 years of macroeconomics training at British and American universities was ‘spectacularly useless at best, positively harmful at worst’, and in all cases ‘a costly waste of time’. The effort to hasten a make-believe market revival too is failing and governments are finally getting ready to act. The emerging profile of regulation suggests that governments no longer trust business models that don’t include counter-party and illiquidity risks as the key variables. The state now wants to oversee market risk for timely tightening of screws though doubts about its ability to do so persist. It is time all the stakeholders–Central Banks, financial services, trade bodies and support services regulators–accept their respec-tive roles and responsibilities to revive their economies. It is no longer an option that could be overlooked; doing so is now imperative for the managers of every economy.

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What these bodies don’t realize is the fact that rise in these crimes is frightening banks away from lending to the private sector especially SMEs

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n May 17, Zafar Iqbal Qadri, Chair-man National Disaster Management

Authority (NDMA) had warned that, as in the past two years, in the 2012 monsoon, Pakistan is again likely to experience what he called a "terrible" flood because of the unfavourable climate changes in 2012. These changes could cause heavy rains and consequent over flowing of the Swat and Kabul rivers causing floods that could affect 29 million in Charsada, Peshawar, Nowshera, Muzzafargarh, Rajanpur, Laiyyah, Khushab, Muzz- afarabad and Sargodha, and lower Sindh. Besides, land-sliding was expected in Gilgit-Baltistan. In its March issue, this magazine had warned its readers that this scenario was expected because of the heavy snowfall in the north of the country, and the strong possibility that this could cause both rains and flooding of the rivers when snow starts melting. Also, that a climate-change, whereby rain fall in the Rajasthan, Sindh, Punjab and Baluchistan belt, would continue for years. As per recent research-based assessments by the Intergovernmental Panel on Climate Change, Pakistan is now among the world's most climate-vulnerable countries including Nepal, Bangladesh, Afghanistan, and lower China.The NDMA warning calls for long-term planning–dredging of river beds, complete review of the state of the river banks, their strengthening on lasting bases, and building small dams that could be used to store rain and flood water to assure its year-round availability for the agriculture sector. These steps could increase crop output and employ-ment opportunities in the agriculture sector.Based on the sad experiences of 2010 and 2011, the NDMA forecast warns of another round of devastating floods, unless repairs to canal banks that were not repaired since the 2011 floods, are completed before end-July. In the March issue of Value Chain, we had recommended the commencement of this repair work on an urgent basis by: • assessing the existing damage-types in various areas,• designing technical strategies to repair the various damage-types, • segregating the task into two major categories: - jobs that can be executed by irrigation department, and- those for which private sector participation is required.The last step was floating of tenders to select the lowest bids provided they were offered by contractors with a satisfactory track record of finishing work on a timely basis evidenced by their experience, expertise and resources (requisite hardware) but indications are that the government is not aware of what the future holds in terms of increased water-flow in the river system, and how it would be regulated to forestall chances of overflow and flooding of the towns on river banks. Planning repair work and imple-menting a remedial emergency strategy could spare millions the miseries they were made to confront during floods in 2010 and 2011–miseries that have not been addressed yet in

some towns in interior Sindh despite claims about remedying them. UN estimates of the losses inflicted by the 2010 floods highlighted the fact that this disaster was much more devastating than the tsunami that hit South Asia in 2004, the 2005 earthquake in Pakistan, and the earthquake that hit Haiti in 2010. By the time flood losses were assessed, their figure went up and was revised upwards to over $10bn. But that was just

the start; the massive crop losses later led to food shortages implying tougher days for all. Food grain and sugar import increased the trade deficit that was already high due to expensive oil imports. The tragedy, however, is that on the one hand we continue to have one of the lowest tax-to-GDP ratio and on the other a track record of wasting bulk of the tax revenue, and the habit of slashing budgetary allocations for devel-opment spending which, to begin with, are too little com-pared to the needs–a tendency that resulted in the building-up a huge backlog of inadequacies in the physical infrastructure, which are being compounded by continued high population growth. In 2011-12 too, PSDP allocations were not utilized fully primarily due to scarcity of funds. In 2012-13, that’s what is expected since the fiscal deficit can’t be contained otherwise.That the expanding gap between development requirements and the outlay thereon is impacting economic growth is not a secret anymore; for the fourth consecutive year, Pakistan will register a GDP growth rate below 7%–the minimum needed to contain the escalating, in fact threatening, poverty level as a consequence of contraction in Pakistan’s industrial base.In 2010 and 2011, the uncared for flood affected headed for the big cities where a minority was housed in relief camps but the majority stayed on the pavements. It was no surprise that during that period petty crime rate went up. A repeat thereof is likely when the flood affected people again head for head for the cities.For a regime that calls itself the ‘peoples’ regime, it is politically important, if not for any other reason, that the flood tragedy is contained so that millions of Pakistanis are spared the pain and miseries they suffered in the 2010 and 2011 floods. These Pakistanis, who work hard to produce the food that each and every Pakistani eats, mustn’t suffer; failure to ensure that will show how little the regime cares the ‘people’. What appears more likely though is a repeat of the 2010 and 2011 tragedies because damage caused to canal networks has not been completed. City dwellers must prepare not just for sending relief supplies to the flood affected areas but also for shelter to the flood affected in a manner that doesn’t push them to opt for petty crime. Given their vital contribution to the economy, they deserve much better, even though, as before, the state may fail to fulfil its obliga-tions in this context.

n May 9, at a hastily convened press conference, Jamie Dimon, the CEO of JPMorgan–who was rated as the

most ‘credible’ investment banker until then– announced that JPMorgan had suffered trading losses exceeding $2bn. This was a shocker–the first bombshell after an year of relative peace in the markets.Considering the size of JPMorgan’s trading portfolio ($360 billion) it wasn’t a jolt (unless JPMorgan is being economical with the truth at present, and may eventually disclose much larger losses) but nevertheless embarrassing because this was the first shock in the US financial services sector after nearly a year in which investor confidence was gradually regaining strength. What it had been interpreted by market observers is ‘a refusal to learn lessons’. Dimon condemned his bank’s trading performance “flawed, complex, poorly reviewed and poorly monitored”, and admitted multiple errors, sloppiness, and bad judgments. What he admitted were indeed the factors that led to the loss despite being publicly warned about the rash activities of a London-based trader of the bank–Bruno Iksil–responsible for hedging only balance sheet risk. Iksil, however, went far beyond hedging risks by over-investing in derivatives linked to synthetic credit indices. His trading practices had earned him the title of “the London whale” in financial markets–a fact known to Dimon. Market observers seem right in calling this event mani-festation of ‘a refusal to learn lessons’, which reflects directly on Dimon. Market observers think he should have acted much earlier, and contained Iksil’s rash trading tendencies–a failure that shifts the load of responsibility on Dimon. But, on May 14, Ina Drew, JPMorgan’s chief investment officer was the first to finally quit. Incidentally, she had repeatedly tendered her resignation after the losses booked by Iksil became clearly apparent in April. Whether she had also warned Dimon about rash Iksil’s trading tendencies, is yet unknown. Dimon was once a key executive in Salomon Smith Barney (SSB), a part of the Citibank’s financial empire, but was fired in 1988 by his then mentor Sandy Weill because SSB had suffered $1.3bn loss. Rising from that depth to become the CEO of JPMorgan was no small achievement. The fact that JPMorgan emerged from the current financial crisis as one of the stronger banks boasting of a “fortress balance sheet”, had boosted Dimon’s position, because between 2008 and 2011 JPMorgan’s assets had ballooned from $1.4 to $2.3 trillion. Bonds backed by British housing loans had surged in value largely because of their demand by JPMorgan. Rumour has it that he was even being considered by President Obama for the position of the Treasury Secretary.Dimon was the acceptable face of investment banking in the US. Reason: his credibility and skills to charm the politicians even while voicing “expletive-laden” criticism of the regulations currently being drafted to prohibit proprietary trading in stocks, debt securities and derivatives. In an interview with the Financial Times last year, Dimon had labelled the impending regulations for being “anti-American.”Bankers now worry that none in their ranks has the capacity to play this role. The most credible seeming argument against

JPMorgan’s losses manifesta refusal to learn lessonsO

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the regulations being drafted by the former Federal Reserve Bank Governor Paul Volcker (that had put the regulators on the defensive) was that the draft rules could prevent investment banks from “market making”, clog up market liquidity, and saddle America’s corporate sector with avoidable costs. Re- publican victory at the coming presiden-tial elections could have further weakened the regulators stand and even forced them to scrap the new regulations. That hope too has been shaken by the JPMorgan affair. Now US congressmen too are favouring strong regulation of investment banking. “This kind of hedging is not allowed” said Senator Carl Levin. According to Jeff Merk-ley, portfolio hedging can hide proprietary trading and even the draft rules on proprietary trading are too lax. However, according to Chairman SEC, the incident has refocused regulators on the crucial issue of proprietary trading. Some within the financial services think that the incident could propel the move to break up the biggest banks. JPMorgan’s loss isn’t anything like Barring Brothers’ suicidal $930 million loss (under Nick Leeson and Barring Brothers’ sale for just “one dollar” to Netherland’s ING Bank). But, in spite of all denials, what it manifests is the fact that financial services have still not accepted their true role–investors’ and savers’ agents who must confine them-selves to earning a fair charge for their services, instead of speculating themselves. It was expected that after the horrendous events that unfolded in 2008, bankers’ would check their greed for profit. Banks’ insistence on being allowed to indulge in propri-etary trading, in spite of JPMorgan’s gaffe, once again proves that bankers don’t want to restrict their role to that of guardians of investors’ and savers’ fund; they want to go on speculating on their own placing at risk their investors’ and savers’ funds. This tendency caused disasters in the late 1980s, late 1990s, early 2000, and then again since 2008. Isn’t this track record enough to set a corrective example by tough self-regulation instead of being goaded into behav-ing courtesy the “Volcker rule” that they all hate? What Paul Volcker is trying to do is to correct the flaws in bank-customer relations that escalated after excessive market de-regulation encouraged a lust for limitless profits. That this craving earned banks more shame than profit, is a reality that they all must accept to restore their place in society.

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oday, there are 196 countries

spread around the globe. Various multilateral organizations determine the status of these countries by benchmarking their economic and social development. Some are termed as devel-oped nations, while others are known as developing or least developed countries. In the past, corre-spondingly, these countries were also categorized as First, Second and Third World countries. Pakistan is classified as a developing country, although those harboring deep animosities against this Republic love to hype these feelings by calling it a failed or rogue state.Over the past many decades, Pakistan has experimented with various models to usher in a sustainable economic development status. However, the country has vacillated between a centralized structure, military dictatorship-driven capitalism, pseudo socialism (invariably always a failure as being proved even now), and provincialism. The unfortu-nate mindset prevailing in the corridors of power that policies of the past governments did not reflect their desired manner of governance, has widely affected the progress of the country.The successive governments have all been hampered by the obvious lack of political and moral will to enforce pragmatic legislation, and policies that would have been deciding factors in ensuring economic deliverance. The inability of the governments, as well as officialdom, in broadening the tax base has been a debilitating feature of political will. Tax-to-GDP ratio is pathetic when compared with world standards. It is less than 9% at a time when this nation requires a firm ground to base its economic progress. Revenue collection inches up rather than hopping and jumping. For fiscal year 2011-2012, the Federal Board of Revenue (FBR) has estimated collection of only Rs 1,952 billion whereas the ideal figure should be over Rs 3,000 billion. Relentless efforts should have been initiated by FBR to revamp the rules and regulations to achieve the desirable target. Even Rs 2,500 billion in today’s scenario would have enabled an inflow of an additional half-a-trillion Rupees that would have empowered the government to earmark and disburse the required funds for Public Sector Develop-ment Programs (PSDP) as well as to drastically reduce dependence on bank borrowings.It is to be noted here that whenever governments get caught in the whirlpool of low financial resources, the first

casualty is the PSDP. The Finance Minis-ters blatantly announce on Budget Day that the government is planning to spend the “highest” amount on PSDP but by the time the fiscal year is about to come to a close, the concerned committee quietly announces that, due to financial constraints, planned alloca-tions for the PSDP have been slashed. This is bad economics, because relatively few or

generally casual steps are taken to control the non-developmental expenditures that, invariably always, are allowed to escalate unchecked.The Finance Ministry bases its revenue projections on the assumption that budgetary deficits would be tackled by knocking at the portals of multilateral agencies, harnessing domestic savings and bank borrowings, focusing on the expected revenue through taxes, duties, and levies, and heavily relying on remittances by the Pakistan Diaspora around the globe. A tremor in any of these sources results in the budgetary projections going haywire. Fiscal gimmickry is adopted as a matter of routine to present a rosy picture, ostensibly to shield the government from public outcry or to drape the negative factors from foreign lenders or investors. No matter what methods are used, the outcome becomes a disappointing nightmare. Dependence on IMF does provide much needed financial assistance, but the conditionalities imposed by this organization are back-breaking, and instead of addressing the welfare and quality of life of the borrowing country’s citizens, the net result is increased hardship for them. When the time comes for repay-ment of these loans, the borrowing country is already hard-strapped for mustering the required foreign reserves, and then the Finance Ministers (along with economic managers) make a beeline to hop on a plane to Washington.The key problem in the scenario mentioned above, lies in the fact that the finance managers and policymakers have a penchant for considering themselves “the” experts and, in their self-created arrogance, debase all practical and worth-while proposals, suggestions, and ideas of the private sector. This is the norm, not the exception although private sector organizations assiduously deliberate, discuss, and then formulate budgetary proposals every year. Countless trips are made to Islamabad and intense lobbying is undertaken to bring about positive change. Political parties are invited to private sector organizations to hear the business community’s point of view. Alas, tall promises are

made, rhetorical chanting is branded as visionary commitments of that political party, but at the end of the day, Parliamentary representatives of these very parties go back to their abodes or offices, unsure about what they had heard or pledged.The hierarchy of various Chambers and Associations lack the critical mass to enforce their proposals and

ideas because of the obvious fact that, although there is continued hobnobbing with the policymakers, the captains of trade and industry are not keen on being on the wrong side of these decision makers. The onus, therefore, lies on the representatives of the small traders, markets, and the small and cottage industries to vociferously build opposi-tion to the steps taken by the FBR. This is not the ideal way to get things done, but more often than not, it propels the leaders of trade and industry to come to terms with the ground reality, and only then do they endeavor to adopt the stand taken by the agitators.Therefore, if the government in power truly desires to bring about an economic revolution, it must, at least few months before the Budget Day, convene an Economic Convention for two days where all heads of political parties along with their economic team must interact and listen to the repre-sentatives of the private sector and agree on a short- and long-term economic agenda that would be binding on all segments of the society. Everyone has to be on the same page. Populist measures, half-baked ideas, heavy reliance on external financing, burdensome non-developmental expen-diture, and corruption at all levels, must be seriously addressed, and policies must be unanimously accepted and agreed to bring the required positive change.Private sector must be fully involved in the economic agenda and it is also the responsibility of private sector to ensure that policies are implemented in letter and spirit. Public and private sector must work together to rid the economic devel-opment process of all the cobwebs, of an ingrained and archaic mindset, of gimmickry and financial shenanigans, of unashamed corruption due to red-tape, inertia, and discre-tionary powers, and of governmental tomfoolery. Pakistan has spent $70 billion on the Global War on Terror and in the process, lost 38,000 civilians and 3,500 brave soldiers. Natural calamities have severely affected the nation’s progress. Unemployment is at an all-time high. The newspapers often come out with stories about Pakistanis transferring capital to foreign countries. US Senators and Congressmen jump over one another to introduce Bills to whack Pakistan and send it to the Stone Age. Good gover-nance is just a buzzword and not an active policy of the governments.Political leaders embellish a regal lifestyle, without any concern for the common man. Law and order situation has

become threatening for the very existence of the country. Private sector is shaken and scared. Private sector doesn’t only include banks or top multinational companies or Pakistan’s mega conglomerates. Private sector is actually the SMEs – the small and micro traders – those who peddle their wares on the streets. They are the most affected, and they are on the high seas without a paddle.Hard-nosed decisions must be undertaken to broaden the tax base. The taxation system must be revamped to be attractive rather than be a deterrent, thus impacting positively on tax collection. Dry Ports must be converted to export-facilitation centers rather than using them to support unscrupulous imports. Billions in revenue are lost due to this decision. Pakistanis based in foreign countries must be provided constitutional protection for their invest-ment in their country of birth. Foreign investors must be freed from the shackles of bureaucratic roadblocks and barriers. It is imperative that domestic industries get an even playing field against imports that are under- invoiced, mis-declared, or smuggled in connivance with concerned officials. Most of these actions are doable and must be done. Time is running out. Sadly, political parties, the establishment, and the feudal are all self-cen- tered, and keep their heads buried in the ground. This is the truth. Only the private sector can goad them out of their ostrich mentality and their dispassionate scorn for the citizens, so as to induce them to open their eyes to the stark realities because the fire of the people’s anger may engulf the whole motherland.

Jo roshnion mein behtay hain wo jantay hi nahinHawa chalay to chiragon ki zindagi kya hai

(The writer is Former President ofKarachi Chamber of Commerce and Industry)

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June 2012

1. INTER-CRO ELECTRONIC INSPECTION SERVICE LAUNCHED

The Securities and Exchange Commission of Pakistan (SECP) has launched an inter-Company Registration Office (CRO)—electronic service—which would enable the stake-holders to electronically inspect the record of the compa-nies including scanned/archived version of physical record. In this connection the SECP has issued Circular No. 14 of 2012 which outlines the detailed procedure on the subject.

2. ST ON POWER SUPPLY TO TEXTILE UNITSThe Federal Board of Revenue (FBR) has imposed 16 percent sales tax on supply of electricity to 10 textile units falling within the jurisdiction of KESC for violating sales tax laws. The FBR has issued a Sales Tax General Order (STGO) 22 of 2012 directing KESC to start charging sales tax on the supply of electricity to the said units.

3. REGULATORY REQUIREMENTS FOR EFTS The Securities and Exchange Commission of Pakistan has prescribed detailed requirements for launching Index Tracking Exchange Traded Funds by the Asset Manage-ment Companies in Pakistan. The SECP circular stipulates the regulatory requirements for the authorization of Exchange Traded Funds (EFTs), including investment restrictions, issuance and redemption of creation units, pricing and dealing, additional disclosure requirements, role of authorized participants, and fees and expenses.

4. SBP REVISES STRESS TESTING GUIDE-LINES

Through BSD Circular No. 1 of May 11, 2012, State Bank of Pakistan has revised the guidelines on stress testing in conformity with international standards and improved capacity of banks/DFIs to perform such analysis. The revised guidelines, which aim at further strengthening the risk management capacity of banks and DFIs, have been divided into three sections. Section 1 prescribes standards for designing and implementing the stress-testing frame-work. Section 2 delineates the mandatory set of stress tests for credit, market and liquidity risk factors using sensitivity analysis. Section 3 provides guidance on optional stress tests for operational risk, Islamic banking and advanced approaches, including scenario analysis, and reverse stress tests.

5. CGT-SECP CLARIFICATIONIn a letter sent to all three stock exchanges, the Securities and Exchange Commission of Pakistan (SECP) has announced that the exemption under provisions related to Capital Gains Tax for the stock market investment is not available for income derived from a criminal activity under any other law for the time being in force. The said provisions shall only be applicable under the Income Tax Ordinance 2001 (ITO) and do not bar asking source of income under any other law including Anti Money Laundering Act 2010. The requirements of Anti Money Laundering Act 2010 and the rules and regulations made thereunder are not affected

by these provisions of the ITO and no exemption, in whole or in part, is available for any AML/CFT preventive meas-ures under the AMLA. The KYC/CDD and Suspicious Transaction Report(STR) reporting required vide Stock Exchange Regulations and Guidelines dated February 01, 2012 shall continue regardless of the above amendments. Therefore, brokers shall take reasonable measures for estab-lishing the source of wealth and source of funds for high risk customers and also to obtain sufficient information to determine the expected source of funding for the account.The Financial Monitoring Unit may refer any STR to tax authorities, notwithstanding the provisions of ITO, and tax authorities will continue to cooperate with law enforcement agencies on AML matters.

6. SBP AMENDS PRUDENTIAL REGULATIONSThe State Bank of Pakistan has made amendments in Prudential Regulations for corporate/commercial banking in order to provide flexibility to banks and DFIs. According to amendments (in paragraph 2 of Regulation R-7), the existing limit of US $ 250,000 for issuance of unse-cured guarantees by banks/DFIs in Pakistan against the back-to-back / counter-guarantees of the banks situated in foreign countries not meeting the prescribed rating of at least ‘A’ has been enhanced to US $ 500,000, if tenor of such guarantees is up to one year. For the back-to- back/counter- guarantee issuing banks situated in foreign countries, National Scale Rating of at least ‘A’ or equivalent shall also be accept-able provided the guarantee issuing bank in Pakistan is comfortable with it. (SBP BPRD Circular Letter No. 9 of May 14, 2012).

7. SECP-JSC MOU ON REGULATORY COOP-ERATION

The Securities and Exchange Commission of Pakistan (SECP) and Jordan Securities Commission (JSC) on May 17 signed an MoU to further enhance regulatory cooperation and information sharing between the two regulatory bodies. It reiterates the two regulators’ commitment to work together in ensuring that securities and commodities markets in the two countries are fair, transparent, efficient and regulated to world standards.The scope of document also includes assistance in actions against insider dealings, market manipulation and other fraudulent practices in securities dealings, enforcement of relevant laws, rules and regulations, monitoring the markets for their compliance with laws and regulations, promoting high standards of fair dealing in their conduct or business, and technical assistance among the two regulatory bodies.The MoU seeks to minimize the risk that is usually associated with financial markets transactions and will also help prevent fraud, money laundering, market manipulation and other pro- hibited practices in the securities markets of both countries.

8. ONCE ONLINE FOREVER ONLINEThe Securities and Exchange Commission of Pakistan has implemented the concept of ‘Once online forever online’ to make the most of online filing facility and to evoke the true

45

In several cases, the guards themselves were found involved in colluding with the robbers in committing the crime. Last year, in Karachi alone, the number of bank heists was unprecedentedly high. Over Rs 60 million were looted from 19 branches of nine private banks during the year despite all systems and mechanisms developed by the concerned regula-tory authorities (including the federal interior ministry), being in place. According to police and law enforcement agencies, the robbers had complete information which might have been leaked by the insiders – the guards or bank employees– since the robbers knew where the DVR recording system was placed, how the system would be destroyed, etc., before committing the robbery.An enquiry reveals that majority of private security compa-nies hire non-professionals as guards with no prior experi-ence of using guns or any other weapons provided to them for maintaining security. There are certain rules and regula-tions which have to be followed in order to initiate a private security firm. However, due to the loopholes and absence of checks and balances, these security companies are working without fear of accountability.As a precondition, a security agency must obtain license to operate as a private security company. For this, an application is to be filed with the Securities and Exchange Commission of Pakistan (SECP) for registration. The SECP then sends a request to the Federal Interior Ministry and the concerned provincial Home Department for NOC and license. Initially, a security firm cleared by SECP, Interior Ministry and Provincial Home Department, gets 50 arms licenses (which can be increased in future based on the company’s needs) for pistols and repeaters (i.e. locally manufactured semi-automatic shot-guns). However, in certain cases, like duties for consulates and embassies, and government or non-government VIPs, the guards are also licensed to use automatic rifles and SMGs (Small Machine Guns). According to a weapon expert, small calibre pistols, especially repeaters, are not enough to neutralize the threat from the bank robbers and assassins. These weapons have low range, accuracy, and rate of damage. Usually, bank robbers are found to be armed with assault rifles like AK-47 and others. With their semi-automatic shotguns, the guards are unable to

n the ever-changing environment chocked with adverse law and order situation, terrorism, robberies and crimes of

varied nature, the role and responsibilities of private security guards become onerous and challenging. In majority of the cases, however, this role is not witnessed, much to the disap-pointment of the institutions that employ these guards. As a result, the very purpose for which the security guards are engaged remains unrealized and unfulfilled. Security is the primary right of every individual and organiza-tion, and one of the onerous responsibilities of the state and its security agencies, especially in our terror-torn country, where the need for an effective security arrangement is much greater today than ever before. It is sad, however, that the existing arrangements have not been as successful in countering the ever-increasing incidents of robberies, terrorism and escalating lawlessness despite there being mushroom growth of private security companies all over the country during the last couple of decades, although security agencies are almost entirely run by retired army officers in addition to those run by the ex-servicemen trusts. Private security industry is one of the biggest job providers in the private sector. It is estimated that the total number of private security guards in the country has crossed the 300,000 figure. There are 65,000 private guards in Sindh alone, out of which around 40,000 are in Karachi. In Punjab, there are an estimated 80,000 private guards while the number of security guards in Islamabad is well over 25,000. Close to 40,000 guards operate in Khyber- Pakhtunkhwa, and the rest are in Baluch-istan and Azad Kashmir.

Despite their numbers being that large, the results produced by the security agencies are not as satisfactory. The incidents of robberies and terrorism continue unabated and security personnel are seen simply helpless in countering such attempts. A large number of private security guards are deployed to ensure security in banks, but robbers come, loot and disappear, at times even with the arms and ammunition of the guards themselves. They are either not trained to use the weapons provided to them, or they are not adequately trained to handle the emergencies they are required to handle. As a result, they are simply toothless when exposed to threats they must know how to confront.

RR e ulator om lianceC y pg

June 2012

spirit of eServices regime. SRO No. 266(I)/2012 containing all relevant details are available on the SECP website www.secp.gov.pk

9. CSR GUIDELINESThe Securities and Exchange Commission of Pakistan has approved in principle corporate social responsibility(CSR) guidelines which would help streamline reporting require-ments and corporate accountability of the CSR activities by public companies. They will be notified after consultation with external stakeholders and general public. The draft guidelines, named the ‘Corporate Social Responsibility Vol- untary Guidelines-2012’ have been placed on the website of SECP for public comments. The guidelines shall be applica-ble to all public companies and are expected to be effective from July 1, 2012. In 2009, the SECP issued the Companies (Corporate Social Responsibility) General Order, applicable to all public companies. According to the said order, every company is required to provide descriptive as well as monetary disclo-sures of the CSR activities undertaken during each financial year in the directors’ report to the shareholders annexed to the annual audited accounts.Keeping in view global learning and local market practices, a set of guidelines have been developed by the SECP to encourage adoption of voluntary measures ensuring trans-parency and corporate accountability in implementing the CSR activities. Through the said guidelines, the SECP has exerted upon two aspects—the governance practices and independent assurance. The adoption of these guidelines will be a significant step towards strengthening the policy and implementation pyramid within reporting companies. The proposed CSR framework shall also create favorable environment for sustainable growth, responsible business behavior and corporate accountability.

10. STOCK EXCHANGES DEMUTUALIZATION On May 7, 2012, President Asif Ali Zardari gave assent to Stock Exchanges (Corporatization, Demutualization & Integration) Act, 2012 which will further strengthen the country’s stock markets. The law requires the stock exchanges to be demutualized within 119 days of its prom-ulgation in accordance with timelines specified for comple-tion of various milestones involved in the demutualization exercise.The Demutualization Bill was earlier approved in a joint session of the Parliament on March 27. Before enactment of the Bill, Pakistan stock exchanges have been operating as non-profit companies with mutualized struc-ture wherein members had ownership as well as trading rights.This structure inherently created conflict of interest as members predominantly controlled affairs of stock exchange which resulted in lack of transparency in their operations and compromised investors’ interest. Corporati-zation, demutualization of stock exchanges would entail

converting their structure from non-profit, mutually owned organization to for-profit entities owned by shareholders. Demutualization would result in increased transparency at stock exchanges and greater balance between interests of various stakeholders by clear segregation of commercial, regulatory functions and separation of trading rights and ownership rights. Demutualization is well-established global trend and almost all stock exchanges worldwide operate in demutualized set up.Demutualization is a well-established global trend and almost all stock exchanges worldwide operate in demutual-ized set up . The enactment of this law will bring Pakistan capital market at par with other international jurisdictions like India, Malaysia, Singapore, USA, UK, Germany, Australia, Hong Kong, Turkey among others. It will help expand market outreach, attract new investors, improve liquidity and enable stock exchange to attract international strategic partners. It will also facilitate consolidation of brokers leading to financially strong entities.The development of this law depicts government’s commit-ment to promoting development of Pakistan capital market and its trust reposed in stock market for continued growth of economy. It provides framework for corporatization, demutualization, integration of stock exchanges and drafted after consensus with all stakeholders.

11. FBR SLASHES MINIMUM TAX UNDER SEC. 113

The Federal Board of Revenue (FBR) has reduced mini-mum tax under Section 113 of the Income Tax Ordinance, 2001 for motorcycle dealers, steel melters and steel re-rolling mills and slashed withholding tax payment u/s 153(I) (a) of the Ordinance 2001 for steel melters and steel re-rolling mills. In this connection, the FBR has issued SRO 549(I)/2012 and SRO 550(I)/2012 to amend the Second Schedule of the Income Tax Ordinance 2001. FBR has given deadline of June 30, 2012 to the motorcycle dealers for payment of minimum tax on turnover for availing reduction of 50% minimum tax for Tax Year 2011. The deadline to the steel melters for payment of minimum tax is May 31, 2012.In case of withholding tax payment u/s 153(I)/a of the Ordinance, the steel melters have to deposit the tax by June 30, 2012. For the steel re-rolling mills, minimum tax has to be deposited by May 31, 2012 and withholding tax payment u/s 153(I)(a) has to be deposited by June 30, 2012.

12. SECP REGULATORY ACTIONS AGAINST COMPANIES

The Securities and Exchange Commission of Pakistan took various regulatory and punitive actions during March and April to safeguard the investors’ interest. The action had reportedly become necessary because of adverse audit opin-ions from statutory auditors, unlawful inter-corporate financ-ing, non-cooperative attitude or non-confirmation of the balance of assets and liabilities of concerned companies.

46

counter the robbers armed with automatic assault rifles. The 12-bolt gun which the guards carry with them has a spread fire and so it can harm bystanders. Sources in All Pakistan Security Services Association and the owner of a leading security firm in Pakistan have confirmed the logic of weapon experts and stated that they have requested the home department and federal interior ministry on many occasions to issue security agencies licenses for automatic rifles, so that guards can neutralize the threat efficiently. But government regulators are not moved by these requests. Regarding identity of the guards hired, it transpired that while engaging guards the security agency verify their national identity card from NADRA through its ‘Verisys’ system, and other documents as well as the criminal record from respective police stations. On completion of these initial formalities, the guards are provided 1 to 3 days training which includes weapon handling, shoot ing and escort tactics. It is anybody’s guess how effectively a guard, who has never before used a weapon, can perform his duties effectively when exposed to a robbery attempt by professional robbers after being trained along these lines.On the question of fake identity cards and involvement of security personnel in crimes like bank robberies, it came to light that Nadra’s Verisys system takes much more time in verification of guards’ identity. Besides, there are certain “no-go areas” in our country where police has no control, such as Baluchistan, FATA and upper northern areas of Pakistan. Most of the guards involved in bank robberies were found to be belonging to those areas. The guards are also called from rural areas and inducted without any test.Verification is essential but, beyond that, a lot also depends on how clients interact with security guards deployed to protect them. “The problem is with the banks who engage their guards for duties they’re not supposed to do — like handling piles of cash. “If you’re going to wave Rs 500,000 around a man who earns Rs 8,000, you know what’s going to happen; it’s human instinct,” observed the owner of one of the security agencies. He accepted the fact that one to three days training is not sufficient but they have no other choice as there is no training centre for security guards. This is the reason why security firms prefer army retired personnel. "Companies like ours always prefer to employ personnel of the armed forces and believe that they are already trained, but for non-armed personnel, the companies have no training facilities. I think even the ex-army men need some training," he said. He demanded that government should at least allocate land for setting up a training institute for security guards. “We (APSAA) will build the institute and manage it on our own.” Similarly he demanded that govern-ment should facilitate the security firms by simplifying the verification process. The guards should at least be allowed to keep SMG on duty to protect the clients. On the question of cooperation between government regula-tors and security firms, he said that on provincial level, the Sindh government is much cooperative as compared to Punjab and other provinces. Officials from Sindh govern-ment are taking interest in resolving our problems and we


by Saqib Arif, Qurrat ul Ain, Soha Ahmed,Abid Hasnain, Mubarik Ahmed

RResearch & Develo mentpesearch & Develo mentp

or now I ask no more than the justice of eating". These words were narrated by Nobel Prize Winner and poet,

Pablo Neruda, Chilean. This quote averts the minds to the thematic approach of a science fiction novel, “The Hunger Games" written by Suzanne Collins, in which the people are refered to as those who have to fight for their survival. Only the strongest of them all survive. This is also in line with Darwin’s famous theory of “natural selection and survival of the fittest”. The same game is being played everyday to survive by gaining access to adequate water and food. This situation has led to chronic issue of uneven distribution and availability of food, not only in Pakistan but all over the world, upshot as the 'Global Hunger Crisis'.Hunger is a term that broadly encompasses the urge, need or dearth of food. It involves a sizeable section of the popula-tion of the world that is deprived of some or all nutritional elements required in a steady diet to maintain the normal body functioning and ensure a robust, stable health. The term reflects a continuous lack of nutrients that are required to achieve and maintain optimum health, well-being, and protec-tion from disease. People who live with hunger may simply have too little food to eat, or do not have means to choose nutritious food in accordance with their body requirements. One form of hunger is a "choice they are forced to make" and the other is a "choice they can freely make". Generally it comprises of “Protein-Energy Malnutrition (PEM), Micro-nutrient deficiency and Obesity”. The most lethal form of malnutrition or hunger is PEM. This results in poor availabil-ity of calories and protein, and as a consequence of this, sufficient energy is not converted for the maintenance of key body functions including provision of essential amino acids and development and maintenance of muscles etc.

Facts About HungerAccording to FAO 2010, about 925 million people are hungry in the world (Figure 1). Out of this the highest number of 578 million belong to Asia-Pacific and lowest number of 19 million of hungry people belong to the developed world. Considering the world population to be about 7 billion, the 925 million hungry population figures out to be 13.1% of the total population or, in other words, one person in every group of seven is hungry. At least three fourth of a billion are suffer-ing from some kind of malnutrition. According to some estimates it is the cause of death of about 50,000 people everyday, about fifteen(15) children die every 30 seconds because of this.According to the reports released by World Health Organiza-tion (WHO), World Food Program (WFP), “Bread for the World” rendered the global hunger facts as follow:• About 60% of chronically hungry people are women.• About 17 million children born each year are underweight

due to malnourished mothers.• 178 million children worldwide are short in stature or

stunted because of lack of food, vitamin and mineral deficiencies (VMD) and diseases.

Hunger And Malnutrition

F

June 2012

• More than 16,000 children die each day from hunger-related conditions, almost all of these deaths occur in developing countries. Sub-Saharan Africa and South Asia suffer from the highest rate of hunger and malnutrition.

• The number of chronically hungry people worldwide grows by an average of four million people per year.

According to WFP Hunger Map 2011,Pakistan is ranked in the “moderate hunger” category of the hunger that possess 20-34% of the undernourished population.

Number of hungry people in the worldTotal = 925 Million

Source: FAO.

Figure 1

Developed countries 19Near East and North Africa 37

Sub-Saharan Africa 239

Asia and the Pacific 578

Latin America and the Caribbean 53

Source: WFP 2010

Nearly one in two Pakistanis are at risk

Pakistan suffered from widespread hunger even before the monsoon floods, with about 82.6 million people – a little less than half the population – estimated to be food insecure.

An estimated 36 percent of Pakistanis live below the poverty line and almost half of them are illiterate. Poorer households typically spend over 60 percent of their income on food.

50 percent of all Pakistanis have little or no access to clean toilets and drinking water, a condition that renders them vulnerable to infectious diseases. They have no knowledge about the merits of sanitation.

The biggest killers of children under five in Pakistan are diarrhea and acute respiratory infections. Undernourish-ment is an underlying cause in 38 percent of the cases.

Conflict along Pakistan’s northwestern border with Afghani-stan has forced millions of people to flee their homes. Since 2008, WFP has provided over 2.6 million of them with food assistance

Volatile food prices over the past seven years have pushed the number of people who depend on food assistance in Pakistan from 38 percent of the population in 2003 to 49 percent in 2009

Wheat is Pakistan’s main staple crop and most important source of calories. As a result of the flooding, which submerged around 16 percent of all arable land in Pakistan, the upcoming wheat harvest is expected to be around 15 percent smaller than usual

Widespread poverty

Poor sanitation.

Child mortality

Violent conflict

Rising hunger

Wheat dependency

Summarized Facts About Pakistan Huger

47

hysical assets are important and have their own worth and value. But no less important are the intangibles as in

cases they are more valuable than many tangible assets. Facebook of Mark Zuckerberg is an example in point where the chief assets are user data and details -the intan-gibles - which, in the words of Brian Wieser of Pivotal Research Group, are worth $ 83 billion and that their revenue will grow at least 30 percent for the next five years based on its status as an online directory for a good chunk of human race, with the names, photos, tastes and desires of nearly a billion people. Facebook was recently on a cross-country road show to pitch its highly anticipated initial offering. Already lots of investors scrambled to buy Facebook shares in anticipation that it will become money maker like Google. Mark Zucker-berg, Facebook’s chief, started this network from a Harvard University dormitory room. In 8 years time since its launch-ing, the network has amassed users at breakneck speed, kept them glued to the site for longer stretches of time and turned a profit by using their personal information to customize the advertisements they see. Presently, with over 900 million users, Facebook is considered as the world’s dominant social network especially in large emerging markets like Brazil and India. The Facebook aimed to achieve a valuation of $ 104 billion although, as some skeptics point out, the company’s revenue growth showed signs of slowing in the first quarter of the current year and, as per Bloomberg survey of 1,253 investors, analysts and traders found, a substantial majority was dubious about the valuation Facebook was seeking. The network will have to find out ways to generate revenue so as to meet the target. They can encourage and facilitate people to buy more and more goods and services with Facebook Credits, innovate new features and approaches and provide deeper data.A comparison of Facebook with Google, however, raises optimism for the network’s success in achieving the desired target. When Google went public, it also had many doubt-ers and the company had to lower its offering price to $ 85 a share. It closed at just more than $ 100 per share on the first day of trading. Now it sells for more than $ 600. Face-book has been much ahead of Google in terms of revenue as it brought in nearly $ 4 billion last year compared with Google’s $ 2 billion in 2003.What Facebook already has is a spectacularly rich vault of information about its users who are not likely to stay away from the site. The most pressing issue for Facebook execu-tives may be the mobile challenge. Wall Street had also expressed concern about the company’s ability to generate revenue from mobile users. Facebook’s response to that challenge so far has been to aggressively acquire companies focus on mobile for which it paid $ 1 billion in April. As revealed by the Facebook CEO, transforming its mobile and advertising experience are its top priorities in 2012.

Already, more than half of its over 900 million users access the site through mobile devices. Facebook was one of the most anticipated -- but also disap-pointing -- IPOs in recent history. Contrary to expectations, the breathlessly hyped IPO has turned into a huge Wall Street debacle. With the valuation target of $104 billion and intent to generate additional 10 billion dollars, the IPO was offered on 18th May, with an opening price of $38 per share. Initially it generated a lot of interest as evidenced by the spectacular rise in price at 42.05$ per share. 82 million shares were traded in the first 30 seconds. The number of shares traded rose to 110 million in just after 7 minutes, reaching a high per share price of $45. At the close of the first day, the number of shares traded stood at 458 million. However, as the social media giant edged toward the close of its first week of trading, questions started swirling about the company's valuation, its profitability and allegations that full details of the stock's likely value were shared with only a select group of people.According to reports from Reuters and several other news organizations, regulators are now looking into the possibil-ity that Facebook's Wall Street investment banks may have tipped off some clients that it wasn't necessarily a great buy or worth the hype it was receiving. And now its sharehold-ers have filed a lawsuit against the social network, CEO Mark Zuckerberg and a number of banks, alleging that crucial information was concealed ahead of the network’s IPO. The lawsuit, filed in the U.S District Court in Manhat-tan on May 23, charges the defendants with failing to disclose in the critical days leading up to initial public offer-ing "a severe and pronounced reduction."Facebook defended themselves by saying they "believe the lawsuit is without merit and will defend ourselves vigor-ously." All of the drama around Facebook's IPO may have some investors taking a very close look at the company -- and thinking twice about what its stock is really worth.On May 23, Congress got into the act. Senate Banking Committee started looking into Facebook's IPO. The Financial Industry Regulatory Authority and the state of Massachusetts are also scrutinizing the way the IPO was handled. Good luck for the Facebook.

RResearch & Develo mentpRR

Causes Of Hunger1 - Poverty - The Principal Cause Of HungerPoverty is the main cause of the hunger crisis worldwide. The prime causes of poverty include lack of resources, unequal income distribution, regional, national and local conflicts, and hunger itself. As of 2008 (2005 statistics), the World Bank estimated that there were 1,345 million poor people in developing countries with spending power of $1.25 a day or less. Extreme poverty remains an alarming problem in the world’s developing regions, despite some progress that reduced "dollar--now $1.25-- a day" poverty from (an estimated) 1900 million people in 1981, a reduc-tion of 29 percent over the period. Progress in poverty reduction has been concentrated in Asia, and especially, East Asia, with major improvement occurring in China. In Sub-Saharan Africa, the number of people in extreme poverty has increased.

2 - Hunger Causes poverty and poverty imparts hunger Hunger and poverty are closely interlinked. Hunger reveals poor health that lowers energy level causing mental impair-ment, and thus, affects the ability of people to work which in turn increases the poverty and results in further increase in the hunger level.3 - Harmful economic systems The economic and political systems in the world based on the use of military arsenals, political and economic power to control the resources and income is another cause of poverty and hunger. The economic, political, and social structures that hinder food consumption should become

Region

East Asia and PacificLatin America and the CaribbeanSouth AsiaSub-Saharan AfricaTotal Developing countriesEurope and Central AsiaMiddle East and North AfricaTotal

% in $1.25a day poverty

16.88.2

40.450.928.8

0.04

0.04

Population (millions)

1,884550

1,4767634673

473

305

5451

Pop. in $1 a day poverty (millions)

31645

5963881345

17

11

1372Source: World Bank PovcalNet "Replicate the World Bank's Regional Aggregation"

the target of change in order to assure even distribution of adequate food.

4 - Increasing Internally Displaced Persons (IDPs) or Refugees

According to WFP, by the end of 2008, the total number of refugees under UNHCR’s mandate exceeded 10 million. The number of conflict-induced internally displaced persons (IDPs) reached some 26 million worldwide at the end of the year.

5 - Climate change Increasingly changing climate is also regarded as current and future cause of hunger and poverty. Increasing drought, flooding, and changing climatic patterns requires a shift in crops and farming practices that will be difficult to accomplish. Progress In Combating HungerWorld Food Summit (WFS) 1996, targeted to half the number of undernourished people by 2015 in developing countries from 824 million people. However, this figure rose to 925 millions in 2010, despite some progress in Asia, Latin America and the Caribbean. The millennium goals were though adopted by many of the nations of the world, but the current outcomes suggest that major and effective efforts need to be undertaken to minimize the poverty.

National Zero Hunger Program (NZHP) in PakistanIn order to combat the hunger crisis and addressing the food security situation in Pakistan, the Government of Pakistan has recently launched NZHP. This is a five year program, which will cost $16 billion and aims to reach out to almost 61 million people across the country. The targeted population will be the most food insecure and vulnerable sections of society particularly malnourished children, pregnant women and primary school children. A report revealed by SDPI, 'Food insecurity in Pakistan 2009', desig-nated Forty five (45) extremely food insecure districts of Pakistan. These districts are initial targets of NZHP. 'Zero Hunger Shops’ are planned to be established in these areas. The seven components of the plan include policy reforms, establishment of a National Food Security Council, targeted social safety nets, capacity building of the ministry and partnerships with international agencies.

esearch & Develo mentp

June 201248

by Syeda Areeba Qadri,Syed Shahabuddin Qadri and Mubarik Ahmed

akistan is an agricultural country and is a profound blend of landscapes varying from plains to deserts,

forests, hills and plateaus ranging from the coastal areas of Arabian sea in the south to the mountains of the Karakorum Range in the north. The country has a total area of 796096 sq.km and is nearly four times the size of United Kingdom.

As all the presently arable land is under the plough, there is a need to develop the wastelands. This is all the more important and essen-tial because of increasing population in Pakistan that, according to some estimates, is currently at 224.92 person/sq.km. This is pretty high. Australia has a population density of 2.8 persons/sq.km. Canada has a population density of 3.76 persons/sq.km. Russia has a population density of 8.66 persons/sq.km. USA has a popu-lation density of 33.86 persons/sq.km.

Due to heavy population pressure, the forest land is gradu-ally depleting both for residential and agriculture purposes. This has cost the country heavily as deforestation has resulted in environmental problems adversely affecting the

P fauna and flora of the country. Many of the animal species are gradually disappearing causing an imbalance in animal population. Many plants of medicinal values have become rare.There is a need for effectively utilizing the wastelands in Pakistan that primarily fall into three categories i.e. land under salinity, land under drought and land under un-irrigated conditions or the barani areas.

Utilizing the Land Under Salinity ConditionsSoil salinity is caused by the rise in water table that results in the salt being deposited on the surface of the land. Salinity and water logging are considered serious problems of irrigated agriculture in the Indus plains of Pakistan. This has disturbed the salt and water balance in the arable land. As adequate supply of good quality surface water is scarce in Pakistan, finding ways to use saline water for irrigation has become imperative.Almost 11 million hectares of land in Pakistan has salt deposits, making the land unsuitable for normal agricultural activity. Roughly 16 million people live in regions with salty water or saline soils. Soil salinity in Pakistan has been boggling scientists for years, until the country’s agricultural scientists discovered some ways of making good use of the waste saline wetlands and its salty ground water. A breakthrough technology now exists for growing crops using brackish water. A number of conventional methods using radiation, plant breeding etc. were used widely by the scientists of PARC to introduce salt tolerant crops and HALOPYTIC plants. A sea grass known as Zostera marina is also considered as salt tolerant plant and the grasses and shrubs cultivated can be used as animal feed. Some Fruit Species Eug- enia jambolana (Jaman), Zizphus jujuba (Ber), Pridium guava (Guava), Grevia asiatica (Falsa) and other crops are also considered as relatively salt tolerant and can be grown to utilize the saline wastelands of Pakistan. Similarly, dha- ncha (Sesbania acule-ata) possesses good tolerance to salinity. The plant has multiple uses such as forage, firewood, dry sticks and green manuring. These plants use saline ground water for their growth.Pakistan’s Nuclear Institute of Agriculture and Biology (NIAB) has developed a new “bio-saline” agricultural technology that puts the so-called “saline wastelands” to

ricultureAAgUtilizing the Wastelandsof Pakistan

June 2012

Table 1. Land use Categories of Pakistan (000’ ha) S.No Land use Type Area %age 1. Agriculture 21,733 27.3 2. Rangelands 25,475 32.0 3. Coniferous Forests 1,353 1.7 4. Irrigated Plantations 80 0.1 5. Scrub Forests 796 1.0 6. Riverain Forests 239 0.3 7. Wastelands including areas under Ice & Snow 28,501 35.8 8. Water Bodies (rivers only) 1,274 1.6 9. Others 159 0.2

TOTAL: 79,610 100.0 Source: Soil Survey of Pakistan

Table -2: Area and Population in Pakistan

Total land area (mha)

Cultivated area (mha)

% cultivated Population density (/sq - km)

Pakistan 79.6 19.82 25 225 Punjab 20.6 11.04 54 35 8.5 Sindh 14.1 5.45 39 2 16 Balochistan 34.7 1.4 4 1 8.9 Khyber Pakhtunkhwa 10.2 1.93 10 238 .1

Source: Administrative Units of Pakistan

4749

Risk aversion in banksThere are no illusions about the way Pakistan’s economy is being ‘managed’. One of the factors crippling it, courtesy the state, is power load-shedding. Lawlessness–fuelled by politi-cal parties via economy crippling strikes, and the violence and destruction of physical assets they entail, is no secret either. What will follow would be depletion of the country’s foreign exchange reserves and resultant depreciation of the Rupee.But it would be irresponsible on the part of the stakehold-ers to accept this as fate acompli. They must try to contain this slide because there simply is no other option. Not taking up this challenge implies becoming bystanders–a conduct that is shameful for those who benefitted from Pakistan’s economy for decades, became billionaires and, sadly, became less and less patriotic. Just one indication thereof is that you no longer see a school, college, or hospital built by a business tycoon or a business group, which used to be the case until 1970s.Most worrisome is the fact that banks–key stakeholders in the economy–have accepted this scenario as fate acompli. This was pointed out by none other than the global credit rating agencies that have warned Pakistan’s banks to cut excessive lending to the state because by doing so they will lower their risk factor down to the risk associated with the state which, in the case of Pakistan, is steadily drifting downwards. Risk-aversion in banks–regularly pointed out by trade bodies and market observers–hasn’t shown any signs that suggest its being overcome–a clear sign thereof being low credit to the private sector. Risk factor of the private sector has certainly gone up but a significant drop in credit to the private sector also indicates that banks feel that their frontlines are not the sort of risk managers that they ought to be reflecting poor management training and development efforts by banks. In 2011, banks’ non-performing loans (NPLs) crossed 14 percent of their loan portfolios. Although the after-effects of the recession that began towards the end of 2007 continue to be blamed for the rise in NPLs, steps to contain NPLs are not as visible as they ought to be, given the experience of ‘soft’ lending practices that, at times, bordered on recklessness. The flaw that hasn’t been addressed effectively is revision of internal risk assessment procedures, but that doesn’t imply making them overly bookish or practically un-enforceable.What banks must accept is the fact that they will have to lend against various collaterals; shunning lending against certain types thereof amounts to risk-aversion–the blame banks now suffer from. What banks need to revise are the checks and balances that can secure lending against such collateral. One such collateral is ‘trade receivables or book debts’. It would be highly unrealistic not to lend against this collateral, which is the asset wherein most businesses block the bulk of their financial resources to stay in business. All the banks need to do is to implement the requisite legal safeguards.

egally, these debts are called ‘choses in action’ meaning that they are a property which a borrower does not

actually possess but which it has the legal right to receive on demand. The bank’s primary concern should be to ensure that the monies due to the borrower from its customers are received directly by the bank for reduction of the finance facility secured by this collateral. The common (and risky) practice is to accept assignment of certain book debts and not the entire lot, but without adequate safeguards. While negotiating with the borrower a finance facility secured by book debts, the bank should include the entire book debts of the borrower and not restrict itself to that portion of the book debts against which the borrower’s credit limit has been calculated. In the event that the borrower has already collateralized part of its book debts the bank must identify the debtors that it considers reason-able risk and extend a financing limit up to a certain percentage of the average outstanding balances in the accounts of the identified debtors. To ensure that book debts are not realized by the customer directly, the bank must require that book debts be assigned to the bank i.e. the borrower’s customers pledge to pay their dues to the borrower’s bank rather than directly to the borrower. It means that the borrower must instruct it’s customers to pay to the bank, and simultaneously relinquish its right to receive those payments directly. This is accom-plished by taking ‘assignment’ over book debts, which means a charge over all or specific existing and future book debts of the borrower. Assignment of the charge is presumed to have been effected even if the borrower makes a verbal commitment to that effect or simply instructs its customers to pay their dues to the bank. But in practice, all necessary documentation must be completed conclusively to establish the bank’s charge on customer’s book debts and a written confirmation by the borrower’s customers that they will pay their dues to the bank.While recommending a finance facility secured by book debts or trade receivables, recommending staff must indicate the age of the existing book debts against which finance facility is to be allowed. The ‘age’ of a book debt means the period wherein it is paid by the debtor. Banks must investigate this by going through book debts of the borrower to verify the age of the book debts. Ideally, it should be based on checking the track record of each invoice issued by the borrower on account of supplies to a customer during the last six months to verify the average time after which the invoices were paid compared to the period for which the borrower had actually extended credit to the debtor. Generally, the bank would not advance against debts that have a track record of remaining overdue for unreasonable periods. However, individual cases could be considered on their merits keeping in view the period of credit normally availed by buyers in the borrower’s business–unfair but

Balochistan is the largest province of Pakistan with an area of 347056 sq.km covering over 40% of the country’s land mass. It is indeed a magnificent province with its beautiful mountains and landscapes. Its deserts and mountains have an immense wealth of unique plants, and animals, and are endowed with a unique environment for the production of a great variety of quality fruits. The province is known as the fruit-basket of the country producing 90 % of grapes, cherry and almonds, 60 per cent of peach, pomegranate and apricot, more than 42 % of apple and 44 % of date. Along with these things, the land of Balochistan is also suitable for live stock farming by raising fodder grasses.

Fodder crops don’t require a greater degree of manage-ment practices as is required in case of cereal and other crops. The texture and structure of soil is not suitable for raising cereal crops due to scarcity of proper irrigation water. The scientists have found the ways to utilize these lands by growing drought tolerant crops. The rangeland research is also undertaken at NARC where the scientists have screened some forage grass species on these lands and found that among other grass species the mot and elephant grasses were outstanding. The improved oat and berseem varieties have also become popular to replace the wheat and rice straw.

These varieties are good and well productive even in the cold weather where green forage is scarce, and are replacing the forage brassicas, which were formerly used in the winter lean period. These include some foothill trees like palm, figs, olive and other fruit trees.

good use. The method also calls for introducing salt-tolerant trees, grasses, and other crops through plant succession to improve the soil in the country’s vast saline areas. These soil-tolerant plants, which can have a profound effect on the physical, chemical and biological make-up of the soil, are grown using abundant salty ground water. Soil salinity is carefully monitored so as not to allow salt buildup.

Barren Turns GreenIn Punjab, the research station at Pacca Anna has demon-stration plots that spread across 400 hectares. Pacca Anna residents can’t help but believe what has been as good as a miracle. This land was completely barren about two decades ago but now it has turned completely green using water that is otherwise useless.The soil at Pacca Anna is highly saline and the salinity varies depending on the water table. The scientists test both the soil as well as the salt levels in water before using it for irrigation. The conventional approach in tackling the prob-lem was to pump out the underground water and wash the plant root region with fresh water. However, this technique was good only as long as there was adequate fresh water for flushing the fields. The only other option was to irrigate with saline groundwater.The biotechnologists of NIAB discovered ways to cultivate the land using the same saline water to irrigate the plants. They have also carried out trials with several dozens of species of Eucalyptus, Casurina, Acacia, Brassica, and other plants which can grow even in extreme saline conditions.

Utilizing the Lands Under Drought ConditionsThe country has a generally hot and dry climate, with desert conditions that prevail in most of the areas. Along the western border and in a section of the north are semi-arid steep lands and deserts; a subtropical climate with marked summer rainfall is the norm in a small section of the north-east along the Himalayan foothills; and a mountain climate that varies with altitude is found in the north. The region closely coincides with Sindh and Punjab, is hot and dry and is occupied on its eastern borders by the Thar Desert.Pakistan has suffered from severe drought, causing severe water shortages for humans, livestock, and agriculture. Many areas of Balochistan, Sindh and southern Punjab were badly affected, in turn affecting some 3 million people and 7.2 million livestock heads. Hundreds of lives were lost and thousands of livestock and wild ungulates perished. Importantly, the drought also severely affected local liveli-hoods and forced local people to migrate toward cities in search of work and food. This disrupted traditional land use patterns, resulting in the permanent loss of traditional management practices, exacerbates the trends toward land degradation and desertification.The major causes of land degradation in Pakistan include: poor irrigation and drainage practices, deforestation, over-grazing, water scarcity or simply non availability of water, drought and intensification of agriculture. The main cause of desertification is the non availability of proper water for irrigation. This is the main reason of drought condi-tions in Pakistan.

ricultureAAg

June 201250

accepted practice. These are the relevant factors to determine the acceptable age of the book debts against which a financing facility may be extended and the extent to which the book debts be financed i.e. fully or partly.A charge over book debts is essentially a short-term security whose quantum fluctuates as maturing debts are realized and fresh credit is extended by the borrower. As such, terms of the facility to be secured by such a security should provide for a drawing power after retaining a margin. Financing facilities secured by book debts may be considered if they represent credit extended to names that have a sound reputation in the market, which should be established by bank’s independent investigations. The other issue of critical importance is the way the borrower lodges its claims against its customers for payment for the goods or services supplied by the borrower. Book debts that are represented by bills of exchange drawn by the borrower and accepted by its customers, are legally more secure claims because customers (or their authorised persons) acknowledge their liabilities to the borrower and accept to retire them on ‘specific’ dates; defaults by such customers render them liable for punishment without a long legal battle.Under this arrangement, banks need to take possession of the accepted bills of exchange by obtaining assignment thereof by their borrowers. This enables the bank to hold the accepted bills (negotiable instruments) that are a better form of security than only taking assignment over borrower’s debts supported by copies of bills and delivery receipts. This also ensures that the debts are received directly by the bank because the bank, not the borrower, presents the bills to the borrower’s custom-ers on the date on which they become due for payment. The practice whereby the borrower supplies goods against its buyer’s acknowledgement of their ‘receipt’ on the transporter’s bill is a weak mechanism because this acknowledgement does not amount to legal ‘acceptance’ of its liability to the borrower i.e. the supplier. As such, it is difficult to bind a buyer because the borrower i.e. supplier must provide all evidence of having supplied the goods or services–a time consuming exercise.Branch Managers must also impress upon the borrowers that they must deposit in their loan account with the lending bank any debt payments received directly from their customers. An assignment can be equitable or registered. For limited liability concerns, a charge must also be registered on the book debts. Assignment of receivable is effected in the following manner:• The borrower executes the bank’s charge forms thereby agreeing

not to receive any payments from its customers directly, deposit-ing with the lending bank all such payments received directly, and making the lending bank it’s legally authorised collecting agent.

• The charge form should then be submitted to the local Registration Office of the SECP for registration of the bank’s charge on the borrower’s total or specific book debts.

• Borrower should also serve written notice to its trade/other debtors to pay the proceeds of the bills drawn on them to the lending bank for credit of the borrower’s account, but these notices should be routed through the lending bank.

• Notices from the borrower should be sent to its customers under the bank’s covering letter addressed to each customer advising that customer the address of the lending bank and the borrower’s account details.

• Borrower’s customers must acknowledge the receipt of the notice and confirm that payment will be made directly to the lending bank. The bank must, as far as possible, ensure that such acknowl-edgements are authentic and signed by the competent person in the buyer’s office. This may require confirmation of the ‘autho-rised person’ status of the person acknowledging this notice.

• Acknowledgements of notices of assignment received from the borrower’s customers should be saved in the bank.

• The borrower must endorse all Accepted Bills of Exchange received from its customers in favour of the lending bank thereby making that bank its legally authorised collecting agent.

The Branch Manager should also obtain from the borrower a monthly statement of all outstanding book debts and reconcile details of debts realized as per borrower’s records with credit entries in customer’s statement of account to establish that no assigned payments were received directly by the customer. Strict supervision should be exercised over the account.While banks are obliged to fund their borrowers’ book debts, it is equally important that businesses wishing to avail a credit facility backed by book debts make it more comforting for the banks to extend financing facilities on this basis. The one important way of going about facilitating such financing is that businesses supplying goods on credit require their buyers to establish local letters of credit (LLC) favouring the suppliers.

Business can reduce banks’ risk-aversionBanks would feel much more at ease while lending against a stock of trade receivables or book debts that are backed by a LLC because of the legal protection this arrangement provides against possible defaults by the LLC openers i.e. the buyers. It is institutionalization of such practices that build the image of markets as professionally managed, more reliable and less risky that eventually improves the risk rating of a country.It is time Pakistan’s trade bodies looked into crucial issues – the ones that build market image if banks’ risk-aversion is to be minimized. Businesses must not overlook the fact that the banking sector provides them peoples’ savings and are bound to lend prudentially–that’s the promise based whereon they get the right to ask people to place their savings in banks. This right comes with the obligation of lending peoples’ savings only for invest-ment in businesses that have ‘reasonable’ and ‘manageable’ risk. Banks decide on what is a reasonable and manageable risk on the basis of their ability to monitor risk at the various stages of the financed transaction/venture, and their ability to recover the amounts lent by them either from the borrower or from entities that have benefitted from it. While banks are blamed for risk-aversion, businesses did little to dilute this tendency.

Indiscipline at examination centres:what should be done?

eachers and educational institu-tions are the pillars that support

the future of societies-the nation builders that inculcate moral pre- cepts and, as facilitator of learning, shape the intellectual and moral profile of the state. As such they must be considered the most impor-tant asset of a society. However, in recent times, this concept (of honour and respect for the teachers and the educational institutions) seems to be waning away, taking a U-turn or nose-diving, at least in our society, and becoming seemingly slave to the forces that wield power and pelf and use the same tactics in our academic environment indiscriminately. The misuse of authority thus gives rise to the purchee system and malpractices such as massive use of unfair means at the examination centres, acts of vandalism and other mischief. The few who respond to the call of their conscience and try to check the malpractices are disgraced, insulted, assaulted, and even threatened with dire consequences. Recently, 90 students were caught red-handed using unfair means at two centres of the Secondary School Certificate (SSC) Annual Examination, but were allowed to go unscathed and unpunished. The students of a university in Islamabad boycotted the classes and staged a sit-in outside the administrative block of the university to show solidarity, not with the teachers but, with 11 students whom the university administration had expelled as a punishment for disrupting a conference.In an earlier incident, Prof Bashir Ahmed Channar, Director Students Affairs at the University of Sindh, Jamshoro, was killed in an armed attack by unidentified assailants in the university’s premises on January 2, 2012. This was the first incident in which a professor was made the victim of murderous attack and killed.The Sindh University has been witnessing a wave of protests by groups of students affiliated with different political parties, after the university rusticated 19 students and banned four ex-students from entering the university premises, blaming them for causing law and order situation.The investigation in the murder of Professor Channar is still inconclusive. Regrettably, the students rusticated for their alleged involvement in creating disturbances at the University have reportedly been re-admitted.The instances quoted above and similar others may not sound surprising because this despicable attitude has become a common phenomenon among our students in the ongoing academic environment. The students, our future leaders of this country, have become so intellec-tually and morally emaciated that they tend to follow the rule of agitation and strikes for disruption more often

than they resist it. But that the students should have subjected the examination invigilators to fists of fury, assaulted the College Principal and the Centre Superin-tendent, and vandalized their offices for not relaxing checks against the use of unfair means during unfair means during the examination is shocking and manifests the height of indisci-

pline and the depth of moral turpitude.It happened at an examination centre at one of the local colleges in Karachi where students were appear-ing at the Board of Intermediate Education examina-tion. During the examination, a group of students tried to resort to copying and cheating. On being disal-lowed from indulging in that indiscipline, they started threatening the invigilator and chanted political slogans. The brawl went to an extent that the Sindh Police Rangers posted there to ensure security had to step in so as to restore peace and order. That was not all; when the paper ended, a coterie of students, reportedly activists of a certain students’ organization, caught hold of the invigilator and beat him up. As if this wasn’t enough, another student mob entered the college premises, beat up the princi-pal and ransacked his office thus setting an example of the worst kind of vandalism. Is that the kind of the treatment the teachers deserve? Or is this the kind of the students who could one day be entrusted the management of the state affairs? That is a big question that must be answered by the parents, the teachers and the society at large.It may be unfair to hold any one of them singly responsible for this or similar other incidents; students, their parents, their teachers and their academic institutions carry a part of the blame for this decline in our moral values. Schools are the nurseries that shape the future of our society. They educate the students, build their character and shape their mindset and creative abili-ties. In practice, however, what we generally witness, in most of these institu-tions (at least in the soci-ety we live in) is that there exists a repressive learning environment based on a ‘cane-wielding’ disciplin-ary culture that neither equips the children with the right kind of education

T

ocial IssuesSS

June 2012

Schools are nurseries that

shape the future of our society. They educate the students,

build theircharacter and

shape their mindset and

creative abilities.

51

by Jauhar Ali

There was a time when the Central Bank auditors would inspect (on a selective basis) borrowers’ stocks of goods financed by banks. They had the skills to inspect the goods stored in various types of storage facilities, do sample checking of the stock to deter-mine uniformity of its quality and its aging, as well as stock-conduciveness of the storage facilities, and the fire-fighting arrangements including testing of hydrants. Let alone Central Bankers, commercial bankers too now lack these skills after out-sourcing of this vital function to support services. Instead of improving risk management skills, banks reacted by curtailing credit to the private sector. While the Central Bank pointed to this distortion and its impact on GDP growth, not much was done to push the banks to do their basic job–fund business and industry. Curtailing credit to the private sector is a reflection more of the banks’ loss of confidence in their risk-taking capacities, but should they react in this fashion or should they revitalize their weak capacities for delivering?Another major factor that has scared banks away from lending to the private sector is their limited capacity for tracking a variety of risks that impact borrowers’ ability to generate requisite repayment capacities–volatile interest and exchange rates, commodity prices, banks’ own lack of requisite lines of credit from banks abroad, and lack of reliable hedging tools. While banks need to be pushed into doing what they ought to, the Central Bank should also accept that shunning of market risk by banks clearly indicates that the state is failing in playing its role in containing market risk. Even though it may not have been said as bluntly as did Alan Greenspan, the way things stand give the impression that, in Pakistan too, the Central Bank believes in ‘self-regulation’ by markets. No assumption could be more off the mark than this view.Besides reflecting on the woes of the Central Bank in market stabilization, the unregulated state of Pakistani markets also reflects the concern trade associations have for their image; it is time the trade associations were asked to devise tough self-regulatory codes for all their members violating which would automatically blackball the violator and require other association members to stop dealing with the violator. It is shocking that most trade bodies seem oblivious to the stories about the illegal sale (infact, theft) of the goods pledged to the banks, hoarding-driven price hikes, violation of the supply contract terms – the criminal acts that trade bodies do not take cognizance of, nor take punitive action against their committers. This is a dark spot on the image of these august bodies.What these associations don’t realize is the fact that rise in these crimes is frightening banks to a point where they are avoiding lending to the private sector, especially SMEs – the

ver since the current recession began, questions have been raised about the role Central Banks played in ‘crystallizing’

it, and their preparedness for facing up to the fallout from such an eventuality. Only few Central Banks passed this test on all counts. Not surprisingly, governments everywhere are now agreeable to tougher regulation of their financial system.Earlier this year, the British government passed a legislation whereby, on March 1 next year, Financial Services Authority (FSA) that presently supervises British banks and insurance companies, will hand over this function back to the Bank of England (BoE) restoring BoE’s overall supervisory authority that was curtailed in 1997 after the creation of the FSA. This, according to the Financial Times, makes BoE the most powerful bank in Europe.In Pakistan too we saw the passage of the bill that empowers the Central Bank with greater autonomy (though time alone will prove if the Central Bank can exercise its autonomy) but market observers are of the view that autonomy alone is not enough; what Central Banks need to worry about is the setup that is necessary to deliver on the promise that comes with their being empowered–calibre in the frontlines and experience-based reaction speed, which also implies increased staff strength.The issue being highlighted is that Central Banks’ boards of directors must be far more conversant with the trends in the domestic and foreign financial markets directly impacting the domestic markets, and be assertive in their stand thereby ensur-ing that key decisions of the Central Bank don’t amount to a

mere endorsement of Central Bank Governor’s stand on the subject. It is no more deniable, that Central Bank Governors’ excessive confidence in “self-regulation” by markets–a view the last Federal Reserve Bank Governor evolved and went on believing in, was blamed as the key driver of the subse-quent recession.Politicians nowhere seemed to know (or perhaps cared about

knowing) was the dark side of market de-regulation that they took pride in affording business and industry but the current recession has taught them some pretty harsh lessons. That is why the shadow Chancellor of the Exchequer thinks that an enlarged supervisory role for the BoE is a challenge because the world has changed a lot since 1997. “It cannot be the old BoE where every decision is made under, or in the name of, the governor,” says he, and then advocates a reform of board of directors by saying that unless the board is reconstituted it won’t work. What this implies is reviewing the current profile of governance of the financial services sector. It is manifestly clear that banks’ lending practices need a total overhaul but banks haven’t reacted by augmenting their lending skills, especially in their frontlines, nor sought regulation of the support services to make those service providers pay for their sins so that they realize that they too have a stake in the risks that banks accept.

nor helps to develop their creative instinct. As a result, the youth we nourish and nurture, in majority of the cases, lack the requisite abilities and are, therefore, haunted by the fear of failure. Hence they strive to pass their examinations, by fair or by foul means, to get that piece of paper called the certificate or the degree which in effect are of little use in an environment wherein there is the toughest- ever competition in the race for survival and growth. The ongoing learning environment has tended to discourage and disappoint students to an extent that at times they even commit suicide. Only the other day a 12-year old student in Abbottabad committed suicide reportedly due to the harsh attitude of his teacher and the hostel administration. A 6th-class student in Karachi allegedly committed suicide as he had failed in the school test. In another incident a 18-year old college student in Islamabad shot him-self dead out of dejection, apparently for being scolded by his father for his refusal to take some entry tests. A class 6th student tried to commit a suicide by self immolation after getting dismissed from his school by the headmaster over non-attendance.Students generally ape the authoritarian attitudes they grow up observing in schools, colleges, universities and even in the environment they live in. They imitate their parents, their leaders and elders, and start believing that following in their footsteps, preferably exceeding their examples, is the right thing to do.Besides, there is tragically too much of political interference in schools, colleges and other educational institutions disre-garding merit and moral values. The sidelining of merit and morality misleads, misguides and corrupts the students’ mentality; they begin eulogizing self interest. The influence of Western ideas and culture through cable TV, rapid disin-tegration of families, blatant favouritism and nepotism that

finds its reflection in the conduct of the teachers, have greatly contributed to the mindset of students which is reflected in their acts of indiscipline and agita-tion. Marginalizing of merit dilutes the values the curricu-lum teaches the students. Moral turpitude apart, misuse of technology and finan-cial resources has also tended to encourage intellectual dis- honesty that finds manifesta-tion in the use of unfair

means in completing assignments, project work and giving examinations.Parents’ high status in society, their relationship with teach-ers and examiners, connections with the high ups or the anti-social elements, also en-courage getting things done by hook or by crook.

ocial IssuesSS

June 2012

If the purpose of education is to acquire knowledge, develop creative faculties and grow into useful citizens of the society, the ongoing attitudinal trend of lawless-ness will have to be effectively checked and reversed and sanctity of the teachers and academic institutions revived. Indiscipline in educational institutions must be remedied. In the current contaminated environment the task is challenging but not one that can be postponed. All that is needed is taking multi-pronged steps without any discrimination.Our examination system is defective; it is geared to testing the students’ ability for cramming rather than testing the level of knowledge acquired. Hence they tend to rely on cheap notes and guess papers as the examination dates approach. Except for a month or two, for the rest of the year, their potentials and energies are not properly utilized. It is important, therefore, that the entire examination system is completely overhauled.The curriculum taught is not job-specific. Hence, after passing the examination, by hook or by crook, they find the certificate or the degree so acquired as simply a piece ofpaper that is not related to the requirements of the jobs they aspire to do. The curriculum needs to be revised keeping in view the emerging knowledge needs that are required to enter any profession.No other personality can have an influence more profound than that of a teacher. Students are deeply influenced by the teacher’s love and affection, his char-acter and competence and his moral commitment. Teachers, therefore, need to have a high level of com-mitment to the duties and responsibilities entrusted to them. They must realize that they have to play a cardinal role in building of the character of the next generation.This brings into sharp focus the need for selection and posting of the teachers. This should be done on no other consideration but merit, and merit alone. At the same time, they should be properly rewarded and given perks and salaries commensurate with the expectations reposed in them. Last but not the least important is institutionalizing practices whereby academic institu-tions are obliged to provide the best possible learning environment rather than running these institutions on purely business considerations.

Our examination system isdefective; it is geared totesting thestudents’ ability for cramming rather than testing the level of knowledge acquired.

52

Prudent State Bank of Pakistan actionIn early May, State Bank of Pakistan acted prudently when it disallowed four big Pakistani banks (Habib Bank Ltd, UnitedBank Ltd, MCB Bank Ltd and Allied Bank Ltd) from acquiring the Pakistan operations of the Hong Kong and Shanghai Banking Corp (HSBC). The logic was based on global experiences that now forbid making big banks ‘too-big-to-fail’ banks; a sure sign of learning, the hard way. Besides, anyone of the ‘big four’ that acquired HSBC would have ended up with a larger expo-sure to many of their big borrowers banking with HSBC and thus wholly inadvisable. Bank of America, Citibank, Barclays, the Royal Bank of Scotland and many others learned this at a huge cost. What triggered their reckless expansion was profit via dominance i.e. zero competition–a tendency that destroyed all empires. The British, French, Dutch and Spanish empires had faded into history, at least visibly, by the 1960s. This should have taught one clear lesson; a tendency for domination is fatal. As it is, the big five banks’ network, which also includes the National Bank of Pakistan, have nearly 50 percent aggre-gate market share of total banking business; in certain sub-sectors i.e. market liquidity, their share exceeds 60 percent, which gives them a clear upper hand. Given this strength, the effort to focus on should be developing the skills and specializations that give them an upper hand in risk management – now the key to earning higher profits by limiting losses to known and manageable levels.This, however, is not prominently visible. Market research is still a low priority, much less its being niche-based to really serve its purpose, which is to guide SMEs that have no way of fathoming the complexities of the volatility in commodity prices and exchange rates – the factors on which hangs their survival and generation of repayment capacity. Nothing that banks do can be more dangerous than relying on the view of the small time traders, given their limited access to critical data about the overall market.If banks with country-wide networks and access to domestic markets could devise an internal data-based system for trend analyses, they will be far better placed for risk-taking, at least in the context of domestic markets. This is the aspect that is now being emphasized, and the outlines of Basle Accord- III are pretty clear on developing internal risk-rating system that is constantly up-dated based on the trends noted by banks internally. While developing this vital skill is impera-tive, it is not as yet getting the importance it deserves.Perhaps, it is time the Central Bank made it mandatory for banks to install a capacity for niche-based real-time research meaning thereby that banks must monitor at least those risks that have an impact on their risk-asset portfo-lios. This is now imperative if banks have to overcome their fears of market risks that are restraining them from lending to the private sector. It is time banks confidently began lending to the private sector; if that doesn’t happen, the ongoing financing of loss-making state-owned enterprise via T-Bills and GoP bonds,will lead to only one outcome; lower GDP and all that it will entail.

sector that forms the back-bone of every economy that includes even the majastic economy of Germany and Japan. The moves to re-regulate the activities of financial sector will be criticised and strongly opposed not just by financial sector but by business and industry, which stand to lose once the financial services

sector is regulated to a point where it is asked to shun its current weak lending practices. The shadow Chancellor of the Exchequer’s view has a great deal of sense; it wasn’t surprising that the markets reacted to it negatively and, courtesy their contacts in the global media, it is now making headlines.Visualizing the changes in the profile of risk manage-ment driven by the exuberance preceding the events of 2008, is not a tough challenge anymore; to forecast them, we must analyze cause-effect relationships, and ask whether they were the result of hurried deregulation and speculative excesses that propelled them or policy failures such as excessively low interest rates, the reckless level that credit multiplier climbed, or was weak market supervision its cause? The fact is that after dismemberment of the Soviet Union and death of communism, capitalism found acceptance in Russia and China and came out in its true colours viz. globalization of trade, export growth epitomizing success regardless of the critical inter-dependencies it gave rise to and competition devoid of ethics and social responsibility. Markets promoted consumption and banks expanded via leverage in the pursuit of profit forgetting the fact that this combination led to a tragic end of all economic cycles. Central banks remained fixated on taming inflation, not on bank supervision to check the build-up of asset bubbles. Macro and financial economists advocated efficiency of the markets, their ability to self-regulate, and benefits of inno-vation, but failed to spot the budding crisis. To Harvard University’s Robert Barro and Princeton University’s Paul Krugman, past 30 years of macroeconomics training at British and American universities was ‘spectacularly useless at best, positively harmful at worst’, and in all cases ‘a costly waste of time’. The effort to hasten a make-believe market revival too is failing and governments are finally getting ready to act. The emerging profile of regulation suggests that governments no longer trust business models that don’t include counter-party and illiquidity risks as the key variables. The state now wants to oversee market risk for timely tightening of screws though doubts about its ability to do so persist. It is time all the stakeholders–Central Banks, financial services, trade bodies and support services regulators–accept their respec-tive roles and responsibilities to revive their economies. It is no longer an option that could be overlooked; doing so is now imperative for the managers of every economy.

ocial IssuesSS

June 2012

B

Karachi: an emerging ‘global’ city?Cram people “full of non-combustible data”, the fire captain explains. “Choke them so damned full of ‘facts’ they feel stuffed, but absolutely ‘brilliant’ with information. Then they’ll feel they’re thinking, they’ll get a sense of motion without moving” –– Fahrenheit 451, Ray Bradbury

radbury’s novel no longer seems set in a distant future. Thanks to growth in computer capacity, television and

computers are merging into digital streams of sounds, images and texts that make it possible to become absolutely brilliant with information. Today, information technologies represent the most potent symbol of a new age – the age of globalization.What is globalization? In its broadest sense, the term Global-ization, as understood today, represents a greater integration and linkage of global financial mechanisms, global trade and cultural aspects, to cite only a few examples reflecting the more visible and tangible forms of this phenomenon and the phenomenon itself represents the growing interdependence of the people of the world.People’s lives – their jobs, incomes and health – are affected by events on the other side of the globe, often by events they don’t know about. Borders are opening up in pursuit of economic policy, as multilateral agreements and the pressures of staying competitive in global markets constrain the options for national policy, and as multinational corporations integrate their operations globally. Multinational corporations now dwarf some governments in economic power. What does a Global City Do?• Concentrated command points in the organization of world

economy• Key locations for finance and the specialized sector, that

has over the years replaced the manufacturing sector as the key urban based economic sector

• Sites for productions, that include new forms of produc-tion, like production of financial innovations

• Markets for products and innovations-Saskia Sassen, Professor of Urban and Regional Planning, Columbia University, USA

Global Cities: Representatives of the age of Globalization Some development theorists agree that with the apparent erosion of state power, the centers of power from where are manipulated the levers of control over the globalization process are increasingly being based in a limited number of world cities termed as the Global Cities. It is argued that global cities – where banks, corporate headquarters and other command functions and high level producer service firms are concentrated – have emerged as strategic sites in world economy. Thus more global an economy becomes, higher the agglomeration of central functions in relatively few sites – the global citiesAnthony D. King, a prominent writer on the phenomenon of global cities, traces the historical perspective of the growth of world cities by linking the present scenario with colonial times, and identifies the institutions, networks and

organizations established during that period as having played the key role in facilitating the modern economic system and consequently the formation of global cities. However, critical to understanding the dynamics of global cities is the understanding that such cities within themselves show high levels of economic disparity. While the manufactur-ing sector has contributed to the formation of a middle class, the service sector and growth industry driven economy of the global cities has resulted in polarizing the income distribution and occupational distribution of workers. Thus, the need to create smooth running and pleasant, glamorous up-town areas conflicts in many cases with the interests of the poor.How can, if at all, Karachi be rated in the global city hierarchy, if not in the international or even the regional perspective? Does the city have a valid case to defend, and if so, what are the merits and demerits of the debate. Or, in other words, what political, economic and cultural niche it wants to carve for itself among the urban leaders of the world. These are some of the questions that will be addressed to assess in the following discussion. The historic evolution of Karachi City is rooted in the colonial experience, and during their long rule in the city, the British established many institutions and developed infrastructure and systems that helped mould the urban and cosmopolitan character of Karachi. All through the British period, Karachi retained its urbanized western character and profile, and merchant class identity. Since Karachi did not possess a history of development rooted in any cultural, religious or political experience other than the western British model, the psyche of the city and its people was strongly influenced by the western model of governance and cultural experiences.Karachi was always a multicultural, multiethnic city. At the time of the creation of Pakistan, the population of Karachi was a rich mix of Hindus and Muslims, and there were also a sizable number of Goans, Parsis and Europeans, mostly belonging to the business class. Mosques, Dharamshalas Hindu temples and Churches existed in harmony in the native city and Hindu and Muslim festivals were celebrated with fervor. Owing to a continuing wave of immigrations from upcountry in the post-independence period, Karachi has now become a melting pot of races, ethnicity and related cultural practices, and for this reason, is popularly known as Mini Pakistan. However, it has not been able to extract any positive mileage out of this human

53

by Farhan Anwer

n May 9, at a hastily convened press conference, Jamie Dimon, the CEO of JPMorgan–who was rated as the

most ‘credible’ investment banker until then– announced that JPMorgan had suffered trading losses exceeding $2bn. This was a shocker–the first bombshell after an year of relative peace in the markets.Considering the size of JPMorgan’s trading portfolio ($360 billion) it wasn’t a jolt (unless JPMorgan is being economical with the truth at present, and may eventually disclose much larger losses) but nevertheless embarrassing because this was the first shock in the US financial services sector after nearly a year in which investor confidence was gradually regaining strength. What it had been interpreted by market observers is ‘a refusal to learn lessons’. Dimon condemned his bank’s trading performance “flawed, complex, poorly reviewed and poorly monitored”, and admitted multiple errors, sloppiness, and bad judgments. What he admitted were indeed the factors that led to the loss despite being publicly warned about the rash activities of a London-based trader of the bank–Bruno Iksil–responsible for hedging only balance sheet risk. Iksil, however, went far beyond hedging risks by over-investing in derivatives linked to synthetic credit indices. His trading practices had earned him the title of “the London whale” in financial markets–a fact known to Dimon. Market observers seem right in calling this event mani-festation of ‘a refusal to learn lessons’, which reflects directly on Dimon. Market observers think he should have acted much earlier, and contained Iksil’s rash trading tendencies–a failure that shifts the load of responsibility on Dimon. But, on May 14, Ina Drew, JPMorgan’s chief investment officer was the first to finally quit. Incidentally, she had repeatedly tendered her resignation after the losses booked by Iksil became clearly apparent in April. Whether she had also warned Dimon about rash Iksil’s trading tendencies, is yet unknown. Dimon was once a key executive in Salomon Smith Barney (SSB), a part of the Citibank’s financial empire, but was fired in 1988 by his then mentor Sandy Weill because SSB had suffered $1.3bn loss. Rising from that depth to become the CEO of JPMorgan was no small achievement. The fact that JPMorgan emerged from the current financial crisis as one of the stronger banks boasting of a “fortress balance sheet”, had boosted Dimon’s position, because between 2008 and 2011 JPMorgan’s assets had ballooned from $1.4 to $2.3 trillion. Bonds backed by British housing loans had surged in value largely because of their demand by JPMorgan. Rumour has it that he was even being considered by President Obama for the position of the Treasury Secretary.Dimon was the acceptable face of investment banking in the US. Reason: his credibility and skills to charm the politicians even while voicing “expletive-laden” criticism of the regulations currently being drafted to prohibit proprietary trading in stocks, debt securities and derivatives. In an interview with the Financial Times last year, Dimon had labelled the impending regulations for being “anti-American.”Bankers now worry that none in their ranks has the capacity to play this role. The most credible seeming argument against

ocial IssuesSS

June 2012

mix. Race relations are identified with turf battles over possession of land, access to public services or control of political power rather than in holding cultural events and festivals. Reasons there for are political, social, and economic, require extensive analysis, and can be overcome principally with a show of political will on the part of all concerned. Presently, it is missing.Karachi also presents the classic rich city-poor city scenario. In the British Period, the city had become divided into the native city, consisting of the old pre-British towns and its suburbs, and the European City, consisting of the cantonment, civil lines and Saddar Bazaar. However, it was a city at peace with itself. Today, given the disparity between, say the posh housing areas of Defence/Clifton, and the squatters of Akhtar Colony cannot be starker. Those at the margins and those at the center do co-relate, however, the relationship can hardly be termed as equitable. Where stands Karachi in the Global Cities Hierarchy?Playing the role of a potential global city, Karachi is linked to Pakistan assuming the status of a politically and economically active regional state. Pakistan, even with all its political instabilities, weak financial and social sectors and technological backwardness, could have an important role to play in the evolving political and develop-ment dynamics of the region owing to its geo-strategic status. Due to its colonial background, large population size, port city status, literate and vibrant populace, strong working middle class and a long history of hosting multinational firms and their interests in the country Karachi, does fulfill some of the basic criteria associated with a global city. However, there are severe constraints. Karachi City is plagued with acute crises of governance, both at the political andPotential economic nodal pointEven before British times, Karachi functioned primarily as a trading city. With the coming of the British, Karachi faced its first taste of multinationals in the functioning of the British East India Company. The port was improved. The Sindh Railway, developed in 1861, was subsequently extended into the Punjab and later linked with Northern India. As a result, by 1868, Karachi had become the largest exporter of wheat and cotton in India. Karachi also received a boost with the opening of the Suez Canal in 1869, which made it the nearest port in India to the UK. With the creation of Pakistan, Karachi witnessed rapid indus-trial development. 139 industrial units in 1941 multiplied to 3148 in 1960. Even today, with all the law and order and political complications, Karachi manages to maintain its central importance within the economic growth of Pakistan. One of the most growth oriented employment mode of the city is the services sector. The value addition that takes place here in the banking and insurance sectors, amounts to almost half of that of the entire country. Karachi, now accounts for 95 per cent of Pakistan’s foreign trade and contributes 30 per cent of Pakistan’s industrial production (ADB, 2006a). Nearly 90 per cent of the country’s head offices of banks, financial institu-tions and multinational companies are located in Karachi(ADB, 2005a). The country’s largest stock exchange is Karachi based. The city contributes 20 per cent of the national gross domestic product, accounts for 40 per cent of national employment in large-scale manufacturing and contributes 25 per cent of national and 40 per cent of provincial revenues (ADB, 2005b).

Positive Indicators Negative Indicators

• • Political Instability (both at the city and national level)

• Large population size • Regional tensions (e.g. with Afghanistan, India)

• • Disturbed law and order situation • A literate populace • Poor standards of urban governance • A vibrant working middle class • Weak physical infrastructure • Port City – Busy and strategically

placed transportation no de • Weak social indicators

• Presence of basic financial infrastructure – significant presence of multinational corporate sector, trade, financial services, industry etc.

• Tensions between city and national government

Historical evolution as a colonial city

Significant geo-strategic location

administrative level. Institutions of urban governance are faced with problems of corruption, mismanagement and inefficiency, as manifested by the fact that it produces a level and quality of life for the majority that is not at par with those in other ‘global’ cities.The law and order situation is far from satisfactory. While high levels of urban crime are not uncommon for ‘global’ cities, for Karachi, the nature and form of urban violence is different. Politically motivated crimes and particularly brutal violence rooted in religious, ethnic turf battles tends to destabilize the whole city, not just isolated streets or neighborhoods. There are issues of political and fiscal insta-bility and lack of continuation of policies at the national level. Tensions with neighboring India and Afghanistan do not inspire investor confidence.Karachi: A Future Global City?An important consideration should be the competition Karachi would face from other regional cities vying for the same role. India in particular carries much more political and economic clout in the global arena than Pakistan and its major cities may. Karachi definitely possesses the right kind of historical background, geographical significance and human indica-tors to register a valid claim and a place in the global city hierarchy. However, unless and until the city overcomes the violent nature of its racial, ethnic, religious relations, instills a sense of political stability and substantially improves the systems and standards of urban governance, it would find it difficult to join the ranks of regional or international global cities. However, the prospects of joining the ‘global’ city club can also not be discounted off-hand should events beyond the parameters of national decision- making processes push Karachi within the global city category.

The significance of Karachi assuming the role of a global city could be profound not only for the city itself but for the entire nation. Experience has shown that nations are not always voluntary participants of the globalization process. It is therefore important for the policy makers of the country to attempt to carefully visualize and plan for greater integration in global compacts and systems, whether they like it or not. The prospects for sustainable growth and development of the country in an increasingly destabilized and uni-polar world will depend on the decisions taken now. Steps need to be taken now to prepare the nation for what seems to be an inevitable integration in the globalization juggernaut.

54

IRRI-6 RS/100 kg

3,300

3,350

3,400

3,450

3,500

1-M

ay

4-M

ay

7-M

ay

10-M

ay

13-M

ay

16-M

ay

19-M

ay

22-M

ay

25-M

ay

28-M

ay

31-M

ay

CCommodit Reviewy

June 2012

ommodities fell, capping the biggest monthly slump since 2008, as

Europe’s escalating debt woes dimmed prospects for demand and drove crude oil into a bear market.The European crisis is “sending all those economies into recession, slowing global demand, which is going to impact Chinese demand, which has by far been one of the largest commodity consumers out there,” Dan Denbow, a portfolio manager at the USAA Precious Metals and Minerals Fund (USAGX) in San Antonio, said. Slower economic growth in China also hurt metal and energy prices. The Stand-ard & Poor’s GSCI Spot Index of 24 raw materials dropped 1.2 percent to settle at 596.2 in May while during the month, the traded volumes at the Exchange increased to Rs. 86.73 bn from Rs. 72.99 bn in the corresponding month of the previous year, witnessing a growth of 19%.

PMEX Commodity INDEX

GOLD [USD / t Oz]

Gold ended May with its fourth straight monthly decline of 6 %, the highest in 12 years, where Gold had fallen nearly 20 percent from its peak of $1,920.30 hit last September, 2011. During May-2012, the traded volume at the Exchange increased to Rs. 66.9 bn from Rs. 22.66 bn in the corresponding month of previous year, a significant growth of 195 %.

CRUDE OIL [USD / barrel]

Oil fell around 18.41% from the lowest close in seven months on last trading day of the month, heading for the longest weekly losing streak in five and a half years, after China’s manufacturing index missed estimates, adding to speculation that global demand will falter.More oil output by the Organization of Petroleum Exporting Countries (OPEC) rose to the highest level since 2008 in May as Saudi Arabia pumped crude at the fastest pace in at least 23 years, a Bloomberg survey showed.In May, the traded volumes at the Exchange decreased to Rs. 13.88 bn from Rs. 33.67 bn in the corresponding month of previous year.

SILVER [USD / t Oz]

Silver futures for July delivery fell 0.63 percent to $27.72 an ounce on the PMEX on last trading day of May, raising the month’s

loss to 8.71 percent. The metal’s third monthly loss is the longest slump since 2008.During May-2012, the traded volume at the Exchange decreased to Rs. 5.8 bn from Rs. 16.65 bn in the corresponding month of previous year.

IRRI 6 [Rs. / 100 kg]

In the domestic market a downward trend in prices was witnessed in May. Price movement remained in a slightly narrow band. Maximum price was Rs 3,475 per 100 Kg on opening day of the month while on 29th of May minimum price was Rs 3,375 per 100 kg a decrease of 2.88 %.

PALMOLEIN [Rs./37.324 kg]

Malaysian palm oil futures slipped to near a one-week low on Thursday and notched their biggest monthly loss of around 11 % since September 2009 as they tracked a wide sell-off in commodities due to worries over the effect of the euro zone debt crisis on the global economy.In the domestic markets, a downward trend was witnessed in the first half of the month whereas prices recovered in later part of the month. An overall decline of 2.64 % was witnessed in the month of May, 2012. Maximum price Rs 5,300 was on 1st of May and minimum price was Rs. 4,850 per 37.324 kg on 23rd of the month.

Commodity Market ReviewMay-2012

C

Open: 1,662.40 Low: 1,538.70Close: 1,562.50 High: 1,662.40Change: - 6.01 %

Open: 106.04 Low: 86.52Close: 86.52 High: 106.04Change: - 18.41 %

Open: 3,475 Low: 3,375Close: 3,375 High: 3,475Change: - 2.88 %

Open: 30.78 Low: 27.25Close: 27.72 High: 30.78Change: - 8.71 %

Open: 5,300 Low: 5,160Close: 5,160 High: 5,300Change: - 2.64 %

May, 2012May, 2011June, 2011

Traded Volume Traded Lots (Rs) 86.73 bn 337,383 72.99 bn 195,607 70.20 bn 229,376

Open: 3,087 Low: 2,884 Close: 2,891 High: 3,087 Change: - 6.34 %

GOLD US $/troy Oz

1,525

1,550

1,575

1,600

1,625

1,650

1,675

1-M

ay

4-M

ay

7-M

ay

10-M

ay

13-M

ay

16-M

ay

19-M

ay

22-M

ay

25-M

ay

28-M

ay

31-M

ay

CRUDE OIL US $/Barrel

85

88

91

94

97

100

103

106

1-M

ay

4-M

ay

7-M

ay

10-M

ay

13-M

ay

16-M

ay

19-M

ay

22-M

ay

25-M

ay

28-M

ay

31-M

ay

SILVER US $/troy Oz

27

28

29

30

31

1-M

ay

4-M

ay

7-M

ay

10-M

ay

13-M

ay

16-M

ay

19-M

ay

22-M

ay

25-M

ay

28-M

ay

31-M

ay

PMEX COMMODITY INDEX

2,875

2,925

2,975

3,025

3,075

1-M

ay

4-M

ay

7-M

ay

10-M

ay

13-M

ay

16-M

ay

19-M

ay

22-M

ay

25-M

ay

28-M

ay

31-M

ay

PALM OLEIN RS / 37.324 kg

4,800

4,900

5,000

5,100

5,200

5,300

1-M

ay

4-M

ay

7-M

ay

10-M

ay

13-M

ay

16-M

ay

19-M

ay

22-M

ay

25-M

ay

28-M

ay

31-M

ay

55








by these provisions of the ITO and no exemption, in whole or in part, is available for any AML/CFT preventive meas-ures under the AMLA. The KYC/CDD and Suspicious Transaction Report(STR) reporting required vide Stock Exchange Regulations and Guidelines dated February 01, 2012 shall continue regardless of the above amendments. Therefore, brokers shall take reasonable measures for estab-lishing the source of wealth and source of funds for high risk customers and also to obtain sufficient information to determine the expected source of funding for the account.The Financial Monitoring Unit may refer any STR to tax authorities, notwithstanding the provisions of ITO, and tax authorities will continue to cooperate with law enforcement agencies on AML matters.

6. SBP AMENDS PRUDENTIAL REGULATIONSThe State Bank of Pakistan has made amendments in Prudential Regulations for corporate/commercial banking in order to provide flexibility to banks and DFIs. According to amendments (in paragraph 2 of Regulation R-7), the existing limit of US $ 250,000 for issuance of unse-cured guarantees by banks/DFIs in Pakistan against the back-to-back / counter-guarantees of the banks situated in foreign countries not meeting the prescribed rating of at least ‘A’ has been enhanced to US $ 500,000, if tenor of such guarantees is up to one year. For the back-to- back/counter- guarantee issuing banks situated in foreign countries, National Scale Rating of at least ‘A’ or equivalent shall also be accept-able provided the guarantee issuing bank in Pakistan is comfortable with it. (SBP BPRD Circular Letter No. 9 of May 14, 2012).

7. SECP-JSC MOU ON REGULATORY COOP-ERATION

The Securities and Exchange Commission of Pakistan (SECP) and Jordan Securities Commission (JSC) on May 17 signed an MoU to further enhance regulatory cooperation and information sharing between the two regulatory bodies. It reiterates the two regulators’ commitment to work together in ensuring that securities and commodities markets in the two countries are fair, transparent, efficient and regulated to world standards.The scope of document also includes assistance in actions against insider dealings, market manipulation and other fraudulent practices in securities dealings, enforcement of relevant laws, rules and regulations, monitoring the markets for their compliance with laws and regulations, promoting high standards of fair dealing in their conduct or business, and technical assistance among the two regulatory bodies.The MoU seeks to minimize the risk that is usually associated with financial markets transactions and will also help prevent fraud, money laundering, market manipulation and other pro- hibited practices in the securities markets of both countries.

8. ONCE ONLINE FOREVER ONLINEThe Securities and Exchange Commission of Pakistan has implemented the concept of ‘Once online forever online’ to make the most of online filing facility and to evoke the true

The KSE-100 Index continued with its positive momentum, increasing by an impressive 4.06%WoW to close at 14,612.28 points. Average daily volumes stood at 335.2mn,. At the same time, net foreign inflow at the bourse stood at an impressive US$33.2mn during the week. Major developments during the week included the announcement of infla-tion figures, where CPI for Mar’12 stood at 11.27%, inline with the general consensus. The KSE-100 Index lost 2.61% to close at 14,230.49 points with the bulk of selling pressure coming in the last two days. We attribute this weakness to 1) selloff in int’l markets, including commodities, which saw E&Ps take a breather, 2) pre-Budget jitters with news flow pointing towards higher taxation for Banks, 3) SECP clarifica-tion that the Anti Money Laundering Act is not superseded by recent changes to the CGT regime and 4) a cooling off in Pak-US relations with negative ramifications for foreign inflows. Market remained lackluster during the Third week with shaky investor confi-dence as developments on Pak-US relations in line with resumption of NATO supplies stood in spot lights. Meanwhile, approval for issuance of Rs82bn TFC from Cabinet Commit-tee to bridge circular debt was also prudently welcomed by market participants. However with low technical support, KSE-100 lost 373ptsWoW to close at the level of 13,858pts. The activity remained on lower side as daily average volumes botch down by 45%WoW to 144mn shares compared to 261mn shares witnessed last week. Daily traded value also declined by 46%WoW to USD65mn compared to USD120mn

last week. Foreigner's interest seems to be tamed-off as net outflow of USD6.01mn was witnessed compared to net inflow of USD3.32 last week. In T-bill auction, conducted during the week, yield remained stagnant at previous level as Govt. fetched Rs143bn in the auction while 80% of the interest was seen in 3M bills. On global front., whereas budgetary proposal for providing 100% capacity charge to IPPs also caught investor's interest. On economic side, external account picture seems quite depress-ing as CA deficit reach USD3.3bn during 10MFY12 compared to surplus of USD466mn last year, whereas FDI also dropped by 48%YoY to USD 667mn in 10MFY12.With the onset of budget related rumors and unending ties between Pakistan and US, trading activities at KSE-100 index remain stagnant in fourth week, where average traded volumes increased by 8.4% to 156mn shares, while average traded value surge to USD68mn (Up 3.6% WoW). Regardless of happy ending NATO summit at Chicago , resumption of supplies to Afghanistan remained seal and no development has been inked in this regard. As a result, investor senti-ments looked depress and market remained in a consolidation phase where index closed below psychologi-cal level of 14,000pts and closed at 13,925pts (up 0.49% WoW). Further-more, Fertilizer stock once again came under pressure on account the possi-bility of imposing additional gas infra-structural surcharge on feedstock gas price. However, positivity was seen in cement sector scrips, which followed

another increase of Rs10/bag during the week and expected Rs873bn allocation for PSDP in budget which will further boost cement demand going forward. On economic front, rupee depreciated to its ever high peak (1USD=Rs92.35) against USD due to repayment of IMF of USD394mn on 24th May, 2012, However, workers’ remittances posted a solid YoY increased of 20% to USD10.9bn in 10MFY12. As far as foreign flows are concerned, local equities witnessed net FIPI of USD12.3mn as compared to an outflow of USD6mn.

Stock Market Review - May 2012 by Zeeshan Ahmed Mirza

T-Bills (3mth) 11.8742%T-Bills (6mth) 11.9420%T-Bills (12mth) 11.9522%Discount Rate 12.00%Kibor (1mth) 12.04%Kibor (3mth) 11.94%Kibor (6mth) 12.01%Kibor (9mth) 12.32%Kibor (12mth) 12.37%P.I.B (3 year) 12.6198%P.I.B (5 year) 13.0521%P.I.B (10 year) 13.3218%

Money Market

Gross Buy Gross Sell Rs Rs Rs $

FIPI 13,525,915,552 (10,022,782,958) 3,503,132,591 38,923,695 Local Companies 52,568,252,818 (53,177,935,149) (609,682,325) (6,774,248) Banks/DFI 13,105,803,334 (204,597,668) (2,273,307) Mutual Funds 6,980,673,855

(13,310,401,001) (3,087,351,653) (34,303,907)

NBFC 3,395,826,589 (10,068,025,516) 298,049,085 3,311,656

Local Investor 96,331,687,946 (94,977,510,791) (3,097,777,502)

354,177,149 3,935,302 Other Organization 2,464,752,786 (2,718,479,961) (253,727,173) (2,819,191)

Foreign Portfolio Investment Monthly (April 2012)Net Buy/Sell

SS tock Market

June 2012

Company Open Close Diff High Low Avg.Rate Turnover*PTCL 12.55 14.81 2.26 17.1 12.39 15.60 437,971,474DGKC 39.93 41.14 1.21 47.79 39.7 43.24 367,376,134JSCL 14.93 14.85 -0.08 17.6 14.61 16.35 268,320,386LOTPTA 8.44 8.27 -0.17 10.29 8.21 8.95 184,124,780ENGRO 97.04 107.6 10.56 123.24 96.21 107.16 166,980,156FATIMA 23.25 24.15 0.9 28.23 23.06 24.91 156,133,583EFOODS 57.84 65.19 7.35 81.17 57.5 67.40 129,087,578BIPL 7 11.08 4.08 12.3 6.7 9.18 110,238,842BAFL 17.27 16.75 -0.52 18.65 16.41 17.48 109,794,805FCCL 6.52 6.15 -0.37 6.88 5.76 6.32 104,051,870

Top 10 Traded Companies(May 2012)

Company Open Close Diff High Low Avg.Rate TurnoverULEVER 6,326.29 7,170.57 844.28 7,763.80 6,331.00 7,111.17 5,027UPFL 2,459.99 2,895.13 435.14 3,384.00 2,550.00 3,020.33 876MFFL 174.69 331.93 157.24 331.94 183.42 230.57 400,326CLOG 808.54 959.51 150.97 975 785 921.11 6,922FMPL 2,602.70 2,735.70 133 3,198.00 2,600.00 2,812.40 2,160WYETH 749.23 828.72 79.49 850 736.01 793.94 7,426AWTX 95.35 155.12 59.77 155.12 100.11 147.79 10NATF 140.7 197.06 56.36 206.9 147.73 172.98 361,368SHEZ 164.8 210.18 45.38 226.66 155.01 190.25 813,360MEHT 66.07 104.26 38.19 104.26 69.37 84.81 8,760

Top 10 Gainers(May 2012)

Company Open Close Diff High Low Avg.Rate Turnover*NESTLE 4,155.30 3,858.00 -297.3 4,450.00 3,720.01 4,064.17 16,913DREL 517 440 -77 500 440 483.3 2BATA 664.49 613.1 -51.39 700 605 642.06 2,273ILTM 252.39 203.31 -49.08 246.9 181.01 205.66 3,087PGCL 142.12 119 -23.12 148.69 114 125.93 31,231MTL 509.64 486.68 -22.96 510 482 492.69 242,146POL 386.74 368.06 -18.68 399 360.11 375.58 11,761,283SIEM 709.05 691.67 -17.38 733 670 690.57 4,119FFC 122.56 107.65 -14.91 129 107.5 118.9 91,332,589EFUL 79.42 67 -12.42 85.05 66 75.43 1,811,308

Top 10 Losers (May 2012)

56




converting their structure from non-profit, mutually owned organization to for-profit entities owned by shareholders. Demutualization would result in increased transparency at stock exchanges and greater balance between interests of various stakeholders by clear segregation of commercial, regulatory functions and separation of trading rights and ownership rights. Demutualization is well-established global trend and almost all stock exchanges worldwide operate in demutualized set up.Demutualization is a well-established global trend and almost all stock exchanges worldwide operate in demutual-ized set up . The enactment of this law will bring Pakistan capital market at par with other international jurisdictions like India, Malaysia, Singapore, USA, UK, Germany, Australia, Hong Kong, Turkey among others. It will help expand market outreach, attract new investors, improve liquidity and enable stock exchange to attract international strategic partners. It will also facilitate consolidation of brokers leading to financially strong entities.The development of this law depicts government’s commit-ment to promoting development of Pakistan capital market and its trust reposed in stock market for continued growth of economy. It provides framework for corporatization, demutualization, integration of stock exchanges and drafted after consensus with all stakeholders.

11. FBR SLASHES MINIMUM TAX UNDER SEC. 113

The Federal Board of Revenue (FBR) has reduced mini-mum tax under Section 113 of the Income Tax Ordinance, 2001 for motorcycle dealers, steel melters and steel re-rolling mills and slashed withholding tax payment u/s 153(I) (a) of the Ordinance 2001 for steel melters and steel re-rolling mills. In this connection, the FBR has issued SRO 549(I)/2012 and SRO 550(I)/2012 to amend the Second Schedule of the Income Tax Ordinance 2001. FBR has given deadline of June 30, 2012 to the motorcycle dealers for payment of minimum tax on turnover for availing reduction of 50% minimum tax for Tax Year 2011. The deadline to the steel melters for payment of minimum tax is May 31, 2012.In case of withholding tax payment u/s 153(I)/a of the Ordinance, the steel melters have to deposit the tax by June 30, 2012. For the steel re-rolling mills, minimum tax has to be deposited by May 31, 2012 and withholding tax payment u/s 153(I)(a) has to be deposited by June 30, 2012.

12. SECP REGULATORY ACTIONS AGAINST COMPANIES

The Securities and Exchange Commission of Pakistan took various regulatory and punitive actions during March and April to safeguard the investors’ interest. The action had reportedly become necessary because of adverse audit opin-ions from statutory auditors, unlawful inter-corporate financ-ing, non-cooperative attitude or non-confirmation of the balance of assets and liabilities of concerned companies.


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or now I ask no more than the justice of eating". These words were narrated by Nobel Prize Winner and poet,

Pablo Neruda, Chilean. This quote averts the minds to the thematic approach of a science fiction novel, “The Hunger Games" written by Suzanne Collins, in which the people are refered to as those who have to fight for their survival. Only the strongest of them all survive. This is also in line with Darwin’s famous theory of “natural selection and survival of the fittest”. The same game is being played everyday to survive by gaining access to adequate water and food. This situation has led to chronic issue of uneven distribution and availability of food, not only in Pakistan but all over the world, upshot as the 'Global Hunger Crisis'.Hunger is a term that broadly encompasses the urge, need or dearth of food. It involves a sizeable section of the popula-tion of the world that is deprived of some or all nutritional elements required in a steady diet to maintain the normal body functioning and ensure a robust, stable health. The term reflects a continuous lack of nutrients that are required to achieve and maintain optimum health, well-being, and protec-tion from disease. People who live with hunger may simply have too little food to eat, or do not have means to choose nutritious food in accordance with their body requirements. One form of hunger is a "choice they are forced to make" and the other is a "choice they can freely make". Generally it comprises of “Protein-Energy Malnutrition (PEM), Micro-nutrient deficiency and Obesity”. The most lethal form of malnutrition or hunger is PEM. This results in poor availabil-ity of calories and protein, and as a consequence of this, sufficient energy is not converted for the maintenance of key body functions including provision of essential amino acids and development and maintenance of muscles etc.

Facts About HungerAccording to FAO 2010, about 925 million people are hungry in the world (Figure 1). Out of this the highest number of 578 million belong to Asia-Pacific and lowest number of 19 million of hungry people belong to the developed world. Considering the world population to be about 7 billion, the 925 million hungry population figures out to be 13.1% of the total population or, in other words, one person in every group of seven is hungry. At least three fourth of a billion are suffer-ing from some kind of malnutrition. According to some estimates it is the cause of death of about 50,000 people everyday, about fifteen(15) children die every 30 seconds because of this.According to the reports released by World Health Organiza-tion (WHO), World Food Program (WFP), “Bread for the World” rendered the global hunger facts as follow:• About 60% of chronically hungry people are women.• About 17 million children born each year are underweight

due to malnourished mothers.• 178 million children worldwide are short in stature or

stunted because of lack of food, vitamin and mineral deficiencies (VMD) and diseases.

Glimpses of workshop on Power of Entrepreneurshipheld on May 22-23 at Karachi

Ozair Hanafi, Founder President ‘OHSOL’addressing the audience

Group with Najam Khan, Munawar Suleman & Ozair Hanafi

Najam Khan, Munawar Suleman &Ozair Hanafi

Group Photograph of the Participants with(Sitting L-R) Ozair Hanafi, Munawar Suleman, Najam Khan, Subeika Rizvi & Sadiq of ICCL

Sadiq of Islamic Chamber of Commerce & Industrysharing his perception

Advertorial

2 - Hunger Causes poverty and poverty imparts hunger Hunger and poverty are closely interlinked. Hunger reveals poor health that lowers energy level causing mental impair-ment, and thus, affects the ability of people to work which in turn increases the poverty and results in further increase in the hunger level.3 - Harmful economic systems The economic and political systems in the world based on the use of military arsenals, political and economic power to control the resources and income is another cause of poverty and hunger. The economic, political, and social structures that hinder food consumption should become

the target of change in order to assure even distribution of adequate food.

4 - Increasing Internally Displaced Persons (IDPs) or Refugees

According to WFP, by the end of 2008, the total number of refugees under UNHCR’s mandate exceeded 10 million. The number of conflict-induced internally displaced persons (IDPs) reached some 26 million worldwide at the end of the year.

5 - Climate change Increasingly changing climate is also regarded as current and future cause of hunger and poverty. Increasing drought, flooding, and changing climatic patterns requires a shift in crops and farming practices that will be difficult to accomplish. Progress In Combating HungerWorld Food Summit (WFS) 1996, targeted to half the number of undernourished people by 2015 in developing countries from 824 million people. However, this figure rose to 925 millions in 2010, despite some progress in Asia, Latin America and the Caribbean. The millennium goals were though adopted by many of the nations of the world, but the current outcomes suggest that major and effective efforts need to be undertaken to minimize the poverty.

National Zero Hunger Program (NZHP) in PakistanIn order to combat the hunger crisis and addressing the food security situation in Pakistan, the Government of Pakistan has recently launched NZHP. This is a five year program, which will cost $16 billion and aims to reach out to almost 61 million people across the country. The targeted population will be the most food insecure and vulnerable sections of society particularly malnourished children, pregnant women and primary school children. A report revealed by SDPI, 'Food insecurity in Pakistan 2009', desig-nated Forty five (45) extremely food insecure districts of Pakistan. These districts are initial targets of NZHP. 'Zero Hunger Shops’ are planned to be established in these areas. The seven components of the plan include policy reforms, establishment of a National Food Security Council, targeted social safety nets, capacity building of the ministry and partnerships with international agencies.

ducation & TrainingEE

June 2012

PMEX holds Technical TrainingWorkshops in Lahore and Islamabad

Training Program for WomenEmpowerment Launched

akistan Mercantile Exchange held three-day work-shops in Lahore and Islamabad that concluded on

30th May 2012. These workshops were part of a series of trainings programs designed and delivered with a special focus on imparting professional knowledge to the investors who are interested in trading commodities as well as the brokers who assist people to trade on Pakistan Merchantile Exchange. The participants took keen interest in the exchange of views based on theo-retical discussions as well as technical analysis.The Technical Analysis workshop in Lahore was held at a local hotel whereas the Islamabad session was held at the newly inaugurated Training Facility of the Securities and Exchange Commission of Pakistan. The Workshop was attended by a number of participants from varying backgrounds – ranging from the manufacturing sector and businessmen along with broker staff, traders and research analysts. The workshops covered important topic such as Money Management, Trading based on Technical Analysis, reading charts and signals, Trading Strategies as well as developing the right trading attitude and psychology.PMEX plans to continue with such workshops in an effort to build awareness of the Commodity Trading techniques and methods and to cover the gaps in knowl-edge so that the participants are well equipped to handle

59

usiness Development and Training Centres of the First Women Bank Limited have planned to

hold a series of training programmes for women empowerment and advancement. The first training program under FWBL-GEP (Gender Equity Program) went underway on May 30, 2012 in the areas of fashion designing and food production. The programmes are being held simulta-neously at Karachi and Lahore. In order to ensure quality and effectiveness of the training imparted, the bank has entered into collabo-ration with National Institute of Design Analysis (NIDA), Karachi, and College of Tourism & Hotel Management (COTHOM), Lahore.The training programmes are a part of a two-year pilot project which the First Women Bank Limited has planned for Capacity Building & Skill Develop-ment particularly to women from low income group for which Aurat Foundation has awarded a grant of Rs 13.8 million under the Gender Equity Program

supported by the American people through USAID for a period of 02 years. Gender Equity Programme (GEP) is a 5-year program implemented in Pakistan by Aurat Foundation in collaboration with ‘The Asia Foundation’ to serve the cause of women’s empow-erment and advancement in the country.

their portfolios as well as their investment and trad-ing decisions. These workshops complement PMEX initiatives of providing independent international third party research to brokers on a daily basis.Pakistan Mercantile Exchange Limited is Pakistan’s first and only commodity futures exchange licensed by the Securities and Exchange Commission of Paki-stan. Its shareholders are National Bank of Pakistan, Pak Kuwait Investment Co, Zarai Taraqiati Bank and the three stock exchanges of the country. PMEX currently lists various contracts for trading in Gold, Silver, Crude Oil, IRRI6 Rice, Suagr, Wheat, Palm Olein and Kibor.

P

B

Session on fashion designing in progress

good use. The method also calls for introducing salt-tolerant trees, grasses, and other crops through plant succession to improve the soil in the country’s vast saline areas. These soil-tolerant plants, which can have a profound effect on the physical, chemical and biological make-up of the soil, are grown using abundant salty ground water. Soil salinity is carefully monitored so as not to allow salt buildup.

Barren Turns GreenIn Punjab, the research station at Pacca Anna has demon-stration plots that spread across 400 hectares. Pacca Anna residents can’t help but believe what has been as good as a miracle. This land was completely barren about two decades ago but now it has turned completely green using water that is otherwise useless.The soil at Pacca Anna is highly saline and the salinity varies depending on the water table. The scientists test both the soil as well as the salt levels in water before using it for irrigation. The conventional approach in tackling the prob-lem was to pump out the underground water and wash the plant root region with fresh water. However, this technique was good only as long as there was adequate fresh water for flushing the fields. The only other option was to irrigate with saline groundwater.The biotechnologists of NIAB discovered ways to cultivate the land using the same saline water to irrigate the plants. They have also carried out trials with several dozens of species of Eucalyptus, Casurina, Acacia, Brassica, and other plants which can grow even in extreme saline conditions.

Utilizing the Lands Under Drought ConditionsThe country has a generally hot and dry climate, with desert conditions that prevail in most of the areas. Along the western border and in a section of the north are semi-arid steep lands and deserts; a subtropical climate with marked summer rainfall is the norm in a small section of the north-east along the Himalayan foothills; and a mountain climate that varies with altitude is found in the north. The region closely coincides with Sindh and Punjab, is hot and dry and is occupied on its eastern borders by the Thar Desert.Pakistan has suffered from severe drought, causing severe water shortages for humans, livestock, and agriculture. Many areas of Balochistan, Sindh and southern Punjab were badly affected, in turn affecting some 3 million people and 7.2 million livestock heads. Hundreds of lives were lost and thousands of livestock and wild ungulates perished. Importantly, the drought also severely affected local liveli-hoods and forced local people to migrate toward cities in search of work and food. This disrupted traditional land use patterns, resulting in the permanent loss of traditional management practices, exacerbates the trends toward land degradation and desertification.The major causes of land degradation in Pakistan include: poor irrigation and drainage practices, deforestation, over-grazing, water scarcity or simply non availability of water, drought and intensification of agriculture. The main cause of desertification is the non availability of proper water for irrigation. This is the main reason of drought condi-tions in Pakistan.

ventsEE

June 2012

M

Independence Dayof Jordan

Jordan has multi-party politics. Its continuing structural economic difficulties, burgeoning population, and more open political environment led to the emergence of a variety of political parties. There are over 30 political parties in Jordan from extreme left (Jordanian Communist Party) to extreme right (Islamic Action Front).Jordan, which is a constitutional monarchy, the King and his council members enjoy the executive authority. The king signs and executes all laws, appoints and may dismiss all judges by decree, approves amendments to the constitution, declares war, if required and commands the armed forces. Cabinet decisions, court judgments, and the national currency are issued in his name. The cabinet is accountable to the Chamber of Deputies on matters of general policy and can be forced to resign by a 50% or more votes of "no confidence" by that body. Moving toward greater independence, Jordan's parliament has investigated corruption charges against several regime figures and has become the major forum in which differing political views, including those of political Islamists, are expressed. The parliament plays an important role but the King remains the ultimate authority.During its 66 years of history of existence as an independent kingdom the country has made strides in diverse fields and achieved enviable progress in political, economic, social, cultural and services sectors despite intermittent skirmishes which were of little significance as they were effectively controlled. Although in the recent past there has been a series of protests and demonstrations demanding the transfer of the King’s constitutional authority to select prime minister to the people, wishes of the government and the people of Jordan hope that the ongoing crisis will also pale into insig-nificance and be resolved amicably.Jordan and Pakistan have had deep, strong, historical and cordial relations which have continued to grow over time. Pakistan and Jordan have commonalities in history, culture and religion which serve as strong bonds for brotherly relations between the two countries. They have stood by each other in times of need. When Pakistan suffered due to earth-quake and two devastating floods, Jordan extended financial assistance besides generous help in the process of rehabilita-tion of the calamity-hit internally displaced persons.

ay 25 is a historic day for the people of Jordan. The day marks the freedom of this Great Hashemite Kingdom

from the British dominance and emergence as an indepen-dent, sovereign state in 1946 in the comity of nations around the world.Jordan has a long history. But modern Jordan was founded in 1921, and it was recognized by the League of Nations as a state under the British mandate in 1922 known as The Emir-ate of Transjordan. On May 25, 1946, the United Nations approved the end of the British Mandate and recognized Jordan as an independent sovereign state which then was officially named as the Hashemite Kingdom of Transjordan. The Parliament of Jordan proclaimed King Abdullah I as the first King of Jordan who officially changed the country's name to the Hashemite Kingdom of Jordan in April 1949.Modern Jordan is classified as a country of "medium human development", and an “upper middle income" economy. Being an emerging free market economy, it has more Free Trade Agreements than any other country in the region. It has close relations with the United States and the United Kingdom, and is a major non-NATO ally of the United States. Jordan is a founding member of the Arab League and the Organisation of Islamic Cooperation (OIC). The Jordanian Government is one of the three members of the 22 Arab League states to maintain diplo-matic relations with Israel, the others being the Egyptian and Palestinian governments. On independence from Britain, King Abdullah I ruled Jordan till 1951 when he was assassinated and his son King Talal became the ruling monarch. However, King Talal’s rule did not last long; he was removed from the throne in 1952 due to mental illness. At that time his son, Hussein, was too young to rule, and hence a committee ruled over Jordan.On attaining the age of 18, Hussein was installed as the King of Jordan. His accession to the throne posed a number of challenges which he survived, drawing on the loyalty of his military, and serving as a symbol of unity and stability in Jordan. King Hussein ended martial law in 1991 and legalized political parties in 1992. Earlier in 1989 and later in 1993, Jordan held free and fair parliamentary elections. Controversial changes in the election law led Islamist parties to boycott the 1997 elections. King Hussein ruled the country from 1953 to 1999.King Abdullah II succeeded his father Hussein following the latter's death in February 1999. Abdullah reaffirmed Jordan's peace treaty with Israel and its relations with the United States. During the first year in power, Abdullah refocused the government's agenda on economic reform.Jordan has followed a pro-Western foreign policy and main-tained close relations with the United States and the United Kingdom. These relations were, however, damaged by Jordan's neutrality and maintaining relations with Iraq during the first Gulf War. Jordan has historically been at the forefront of negotiating peace between the Israelis and the Palestinians.

61

eachers and educational institu-tions are the pillars that support

the future of societies-the nation builders that inculcate moral pre- cepts and, as facilitator of learning, shape the intellectual and moral profile of the state. As such they must be considered the most impor-tant asset of a society. However, in recent times, this concept (of honour and respect for the teachers and the educational institutions) seems to be waning away, taking a U-turn or nose-diving, at least in our society, and becoming seemingly slave to the forces that wield power and pelf and use the same tactics in our academic environment indiscriminately. The misuse of authority thus gives rise to the purchee system and malpractices such as massive use of unfair means at the examination centres, acts of vandalism and other mischief. The few who respond to the call of their conscience and try to check the malpractices are disgraced, insulted, assaulted, and even threatened with dire consequences. Recently, 90 students were caught red-handed using unfair means at two centres of the Secondary School Certificate (SSC) Annual Examination, but were allowed to go unscathed and unpunished. The students of a university in Islamabad boycotted the classes and staged a sit-in outside the administrative block of the university to show solidarity, not with the teachers but, with 11 students whom the university administration had expelled as a punishment for disrupting a conference.In an earlier incident, Prof Bashir Ahmed Channar, Director Students Affairs at the University of Sindh, Jamshoro, was killed in an armed attack by unidentified assailants in the university’s premises on January 2, 2012. This was the first incident in which a professor was made the victim of murderous attack and killed.The Sindh University has been witnessing a wave of protests by groups of students affiliated with different political parties, after the university rusticated 19 students and banned four ex-students from entering the university premises, blaming them for causing law and order situation.The investigation in the murder of Professor Channar is still inconclusive. Regrettably, the students rusticated for their alleged involvement in creating disturbances at the University have reportedly been re-admitted.The instances quoted above and similar others may not sound surprising because this despicable attitude has become a common phenomenon among our students in the ongoing academic environment. The students, our future leaders of this country, have become so intellec-tually and morally emaciated that they tend to follow the rule of agitation and strikes for disruption more often

than they resist it. But that the students should have subjected the examination invigilators to fists of fury, assaulted the College Principal and the Centre Superin-tendent, and vandalized their offices for not relaxing checks against the use of unfair means during unfair means during the examination is shocking and manifests the height of indisci-

pline and the depth of moral turpitude.It happened at an examination centre at one of the local colleges in Karachi where students were appear-ing at the Board of Intermediate Education examina-tion. During the examination, a group of students tried to resort to copying and cheating. On being disal-lowed from indulging in that indiscipline, they started threatening the invigilator and chanted political slogans. The brawl went to an extent that the Sindh Police Rangers posted there to ensure security had to step in so as to restore peace and order. That was not all; when the paper ended, a coterie of students, reportedly activists of a certain students’ organization, caught hold of the invigilator and beat him up. As if this wasn’t enough, another student mob entered the college premises, beat up the princi-pal and ransacked his office thus setting an example of the worst kind of vandalism. Is that the kind of the treatment the teachers deserve? Or is this the kind of the students who could one day be entrusted the management of the state affairs? That is a big question that must be answered by the parents, the teachers and the society at large.It may be unfair to hold any one of them singly responsible for this or similar other incidents; students, their parents, their teachers and their academic institutions carry a part of the blame for this decline in our moral values. Schools are the nurseries that shape the future of our society. They educate the students, build their character and shape their mindset and creative abili-ties. In practice, however, what we generally witness, in most of these institu-tions (at least in the soci-ety we live in) is that there exists a repressive learning environment based on a ‘cane-wielding’ disciplin-ary culture that neither equips the children with the right kind of education

Thar Coal Project is an expensive Proposition - Dr. Abdul Qadeer KhanThe Father of Pakistan’s Nuclear Programme, Dr Abdul Qadeer Khan was chief guest at a dinner hosted by Rehnuma-e-Pakistan on May 18. Speaking on the ocassion he said that the country is passing through a very difficult phase

of its history and needs a sincere and honest leadership. He was of the view that the nation is being misguided about power genera-tion through Thar Coal as fake claims are being made that 50,000 mega watts energy could be produced therefrom. He made it clear that projects like Thar Coal and Reko Diq require investment of millions of dollars and state of the

art equipment and technology. He said that China has the technology and skill to extract coal from Thar reserves. Dr Qadeer said that no country can survive without economic sovereignty. Pakistan, he said developed world’s most modern and cheapest nuclear technology as we spent only $250 million on achieving the goal . He informed that people were making mockery of our efforts to enrich uranium through a simple centrifuge machine but the world is now witness that we have achieved our task without any foreign assistance.

View of Dr Samar Mubarakmand about Thar Coal Project

Nuclear scientist Dr. Smar Mubarakmand said that underground gasification (UGC) technology is the cheapest solution to produce electricity, natural gas and diesel. He was expressing his views at POGEE 2012 (Pakistan Oil, Gas and Energy Exhibition) held at Karachi.“Through UGC technology, electricity can be generated at Rs 3 to 4 per unit while diesel can be produced at $ 40 per

barrel”, he said adding that 80,000 mega watts of electricity is being produced through UGC in different countries of the world including South Africa, Australia, China, Russia, Poland, Czech and Uzbekistan. South Africa is producing 160,000 barrels per day from UGC technology while China is providing 1,550 mmcf per day from UGC project to Beijing and adjacent cities he observed. Dr. Samar said that several foreign companies from China, UK, Czech Republic and Australia were interested to start UGC projects in Thar.

Pakistan has potential to generate 2.3 mil-lion MW solar energy annually - Dr NasimVice Chancellor, Hamdard University, Dr Nasim A Khan has said that Pakistan has potential to generate over 2.324 million mega watts of electricity per annum through solar system and industrialists should come into manufacturing in this sector for domestic as well as industrial use in order to overcome prevailing energy crisis in Pakistan.

Giving a presentation at a conference on solar power in Pakistan, organized by Korangi Association of Trade and Industry in collaboration with Engineering Review, Dr Nasim said that solar and wind powers are the real sources of energy and rest of the sources are alternatives. He said that Hamdard University is ready to provide technology of solar power to the industrialists free of charge so that the country could be able to benefit from cheapest sources of energy.Dr Nasim said that though solar panels are expensive presently, commercial manufacturing would make them cheaper and viable for all consumers. He further empha-sized on manufacturing of all components of solar system locally in order to make them viable for the local as well as export market. He informed that many countries such as USA, Germany, Australia, Brazil, UK, Japan, India, China and Thailand are now generating electricity in bulk through solar system. He disclosed that Japan is generating electricity at the cost of only two cents per kilo watt hour (KWH). The Vice Chancellor said that Pakistan needs to put 2,000 MW electricity into the national grid every year and this could only be possible through solar and wind power. He said that UK which has less than half the population than Pakistan was generating 70,000 MW in 1970 whereas Pakistan is generating merely 22,000 MW at present.Chairman KATI, Ehtesham Uddin announced to extend all out support to Hamdard University for the promotion of solar powered technology and offered to coordinate with Dr Nasim and industrialists to manufacture solar panels for domestic and industrial use. He said switching over to the solar system for energy was the need of the hour and more people and scientists like Dr Nasim should come forward for this cause. President All Karachi Indus-trial Alliance, Mian Zahid Hussain said future belongs to cheapest sources of energy. Mian Zahid pointed out none of the government measures were proved to be fruitful for saving energy and there was no respite in load shedding.

Thar Coal Project: Karachi Chamber of Commerce & Industry’s Acting President Younus Muhammad Bashir has strongly reacted over the statement from planning commission terming the Thar Coal project as “unworkable”.

Chairman, Sindh Board of Investment, Muhammad Zubair Motiwala has said that Thar Coal is National Strategic Reserve of Pakistan and it has been duly vetted by international agencies considered as authority on the subject.

A model of Solar thermal energy at Hamdard University.

ventsEE

June 201262

nor helps to develop their creative instinct. As a result, the youth we nourish and nurture, in majority of the cases, lack the requisite abilities and are, therefore, haunted by the fear of failure. Hence they strive to pass their examinations, by fair or by foul means, to get that piece of paper called the certificate or the degree which in effect are of little use in an environment wherein there is the toughest- ever competition in the race for survival and growth. The ongoing learning environment has tended to discourage and disappoint students to an extent that at times they even commit suicide. Only the other day a 12-year old student in Abbottabad committed suicide reportedly due to the harsh attitude of his teacher and the hostel administration. A 6th-class student in Karachi allegedly committed suicide as he had failed in the school test. In another incident a 18-year old college student in Islamabad shot him-self dead out of dejection, apparently for being scolded by his father for his refusal to take some entry tests. A class 6th student tried to commit a suicide by self immolation after getting dismissed from his school by the headmaster over non-attendance.Students generally ape the authoritarian attitudes they grow up observing in schools, colleges, universities and even in the environment they live in. They imitate their parents, their leaders and elders, and start believing that following in their footsteps, preferably exceeding their examples, is the right thing to do.Besides, there is tragically too much of political interference in schools, colleges and other educational institutions disre-garding merit and moral values. The sidelining of merit and morality misleads, misguides and corrupts the students’ mentality; they begin eulogizing self interest. The influence of Western ideas and culture through cable TV, rapid disin-tegration of families, blatant favouritism and nepotism that

finds its reflection in the conduct of the teachers, have greatly contributed to the mindset of students which is reflected in their acts of indiscipline and agita-tion. Marginalizing of merit dilutes the values the curricu-lum teaches the students. Moral turpitude apart, misuse of technology and finan-cial resources has also tended to encourage intellectual dis- honesty that finds manifesta-tion in the use of unfair

means in completing assignments, project work and giving examinations.Parents’ high status in society, their relationship with teach-ers and examiners, connections with the high ups or the anti-social elements, also en-courage getting things done by hook or by crook.

If the purpose of education is to acquire knowledge, develop creative faculties and grow into useful citizens of the society, the ongoing attitudinal trend of lawless-ness will have to be effectively checked and reversed and sanctity of the teachers and academic institutions revived. Indiscipline in educational institutions must be remedied. In the current contaminated environment the task is challenging but not one that can be postponed. All that is needed is taking multi-pronged steps without any discrimination.Our examination system is defective; it is geared to testing the students’ ability for cramming rather than testing the level of knowledge acquired. Hence they tend to rely on cheap notes and guess papers as the examination dates approach. Except for a month or two, for the rest of the year, their potentials and energies are not properly utilized. It is important, therefore, that the entire examination system is completely overhauled.The curriculum taught is not job-specific. Hence, after passing the examination, by hook or by crook, they find the certificate or the degree so acquired as simply a piece ofpaper that is not related to the requirements of the jobs they aspire to do. The curriculum needs to be revised keeping in view the emerging knowledge needs that are required to enter any profession.No other personality can have an influence more profound than that of a teacher. Students are deeply influenced by the teacher’s love and affection, his char-acter and competence and his moral commitment. Teachers, therefore, need to have a high level of com-mitment to the duties and responsibilities entrusted to them. They must realize that they have to play a cardinal role in building of the character of the next generation.This brings into sharp focus the need for selection and posting of the teachers. This should be done on no other consideration but merit, and merit alone. At the same time, they should be properly rewarded and given perks and salaries commensurate with the expectations reposed in them. Last but not the least important is institutionalizing practices whereby academic institu-tions are obliged to provide the best possible learning environment rather than running these institutions on purely business considerations.

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June 201263

radbury’s novel no longer seems set in a distant future. Thanks to growth in computer capacity, television and

computers are merging into digital streams of sounds, images and texts that make it possible to become absolutely brilliant with information. Today, information technologies represent the most potent symbol of a new age – the age of globalization.What is globalization? In its broadest sense, the term Global-ization, as understood today, represents a greater integration and linkage of global financial mechanisms, global trade and cultural aspects, to cite only a few examples reflecting the more visible and tangible forms of this phenomenon and the phenomenon itself represents the growing interdependence of the people of the world.People’s lives – their jobs, incomes and health – are affected by events on the other side of the globe, often by events they don’t know about. Borders are opening up in pursuit of economic policy, as multilateral agreements and the pressures of staying competitive in global markets constrain the options for national policy, and as multinational corporations integrate their operations globally. Multinational corporations now dwarf some governments in economic power. What does a Global City Do?• Concentrated command points in the organization of world

economy• Key locations for finance and the specialized sector, that

has over the years replaced the manufacturing sector as the key urban based economic sector

• Sites for productions, that include new forms of produc-tion, like production of financial innovations

• Markets for products and innovations-Saskia Sassen, Professor of Urban and Regional Planning, Columbia University, USA

Global Cities: Representatives of the age of Globalization Some development theorists agree that with the apparent erosion of state power, the centers of power from where are manipulated the levers of control over the globalization process are increasingly being based in a limited number of world cities termed as the Global Cities. It is argued that global cities – where banks, corporate headquarters and other command functions and high level producer service firms are concentrated – have emerged as strategic sites in world economy. Thus more global an economy becomes, higher the agglomeration of central functions in relatively few sites – the global citiesAnthony D. King, a prominent writer on the phenomenon of global cities, traces the historical perspective of the growth of world cities by linking the present scenario with colonial times, and identifies the institutions, networks and

organizations established during that period as having played the key role in facilitating the modern economic system and consequently the formation of global cities. However, critical to understanding the dynamics of global cities is the understanding that such cities within themselves show high levels of economic disparity. While the manufactur-ing sector has contributed to the formation of a middle class, the service sector and growth industry driven economy of the global cities has resulted in polarizing the income distribution and occupational distribution of workers. Thus, the need to create smooth running and pleasant, glamorous up-town areas conflicts in many cases with the interests of the poor.How can, if at all, Karachi be rated in the global city hierarchy, if not in the international or even the regional perspective? Does the city have a valid case to defend, and if so, what are the merits and demerits of the debate. Or, in other words, what political, economic and cultural niche it wants to carve for itself among the urban leaders of the world. These are some of the questions that will be addressed to assess in the following discussion. The historic evolution of Karachi City is rooted in the colonial experience, and during their long rule in the city, the British established many institutions and developed infrastructure and systems that helped mould the urban and cosmopolitan character of Karachi. All through the British period, Karachi retained its urbanized western character and profile, and merchant class identity. Since Karachi did not possess a history of development rooted in any cultural, religious or political experience other than the western British model, the psyche of the city and its people was strongly influenced by the western model of governance and cultural experiences.Karachi was always a multicultural, multiethnic city. At the time of the creation of Pakistan, the population of Karachi was a rich mix of Hindus and Muslims, and there were also a sizable number of Goans, Parsis and Europeans, mostly belonging to the business class. Mosques, Dharamshalas Hindu temples and Churches existed in harmony in the native city and Hindu and Muslim festivals were celebrated with fervor. Owing to a continuing wave of immigrations from upcountry in the post-independence period, Karachi has now become a melting pot of races, ethnicity and related cultural practices, and for this reason, is popularly known as Mini Pakistan. However, it has not been able to extract any positive mileage out of this human

POGEE 2012 - Pakistan Oil, Gas and Energy ExhibitionTo present various modern technologies in the energy sector in Pakistan, nearly 200 companies from 30 countries partici-pated at the POGEE 2012 (Pakistan Oil, Gas and Energy Exhibition) held from May 8-10, 2012 at Karachi. The exhibition displayed state-of-the-art equipment and machin-ery related to oil, gas and energy sectors. Participating states included China, Germany, Iran, India, Italy, Pakistan, Qatar, Singapore, Turkey, UAE and USA showcased their techno-logical advancements to the high profile trade visitors.Moreover, the show featured exclusive pavilions for China and Germany in which various companies marketed their technological advancements.Inaugurating the Expo, Minister for Overseas Pakistanis Dr Farooq Sattar stated that energy sector should be given priority over fertilizer industry for producing cheaper electricity to reduce power shortage and get rid of load shedding in the country.He said that electricity can be generated at a cost of Rs 4 per unit by using natural gas which in turn can reduce the cost of production in the country and cut import of furnace oil. Expressing his views Mr Muhammad Yasin, Executive Direc-tor, Oil and Gas Regulatory Authority (OGRA) said the current demand for gas was 5.6 billion cubic feet per day while the

Annual Investment Meeting in DubaiThe Crown Prince Sheikh Hamdan bin Al Nahayyan visited the Pakistan and Sindh Pavilion at the Annual Investment Meeting (AIM)-2012, organized by the UAE Ministry of Foreign Trade on May 1-3, 2012 in Dubai. Chairman, Board of Investment, Sindh briefed the visiting guest about immense investment poten-tial of Sindh particularly in agriculture, livestock, Thar Coal & energy, infrastructure development and solid waste management. The Minister for Commerce, Government of Pakistan and the Chief Minister Sindh also attended the Annual Invest-ment Meeting (AIM) which was participated by over 60 countries, 40 ministers and more than 2000 delegates from around the world. The Chief Minister held separate meetings with other important dignitaries attending the conference. H.E. Sheikh Hamdan bin Al Nahayyan showed keen interest in the meeting and stressed upon the need to enhance collabora-tion for intensifying cooperation between two brotherly nations.

ventsEE

June 2012

Malik Usman (Right) Chief Operating Officer, M/s SSGC-LPG Pvt. Ltd. receiving souvenir from Amjad Malik (Left) Director

Exploration, Ministry of Petroleum and Natural Resources after the International conference entitled “Energy Supply Options:

Imported or Indigenous” held on 10 May 2012 at Karachi Expo Centre under the aegis of Pegasus Consultancy.

supply is 3.8 bcf per day, leaving a gap of 1.8 bcf per day. He said that demand for gas would rise to 6.2 bcf per day during 2015-16 while the availability would be 4.5 bcf per day. Pakistan has an installed electricity generation capacity of 21,813 MW, which produced 91,960 GWh of electricity in the last fiscal year. Due to growing population and rapid industri-alization the country is facing shortfall of about 5000 MW. A budget of US$ 1.4 billion has been allocated for the develop-ment of power generation and upgradation of transmission and distribution network to meet the increasing demand.The hydro potential is estimated at 59,773 MW while the existing hydro generation installed capacity stands at 6444 MW. Currently, 26 IPPs are operating in the country with the combined installed generation capacity of 7584 MW; while in the public sector the thermal and nuclear generation capacities stand at 6831 MW and 462MW respectively. To overcome the energy crises the Govern-ment is aiming to add 2110 MW by 2012.With increasing number of power projects, the demand of power generation machinery has also increased and approxi-mately US$ 1.3 billion worth of power generation machinery as well as US$ 805 million worth of electrical machinery and equipment have been imported in 2010 – 11.

Mr. Zubair Motiwala, Chairman, Sindh Board of Investment is giving briefing to H.E Crown Prince - Sheikh Hamdan bin Al

Nahayyan at AIM-2012

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mix. Race relations are identified with turf battles over possession of land, access to public services or control of political power rather than in holding cultural events and festivals. Reasons there for are political, social, and economic, require extensive analysis, and can be overcome principally with a show of political will on the part of all concerned. Presently, it is missing.Karachi also presents the classic rich city-poor city scenario. In the British Period, the city had become divided into the native city, consisting of the old pre-British towns and its suburbs, and the European City, consisting of the cantonment, civil lines and Saddar Bazaar. However, it was a city at peace with itself. Today, given the disparity between, say the posh housing areas of Defence/Clifton, and the squatters of Akhtar Colony cannot be starker. Those at the margins and those at the center do co-relate, however, the relationship can hardly be termed as equitable. Where stands Karachi in the Global Cities Hierarchy?Playing the role of a potential global city, Karachi is linked to Pakistan assuming the status of a politically and economically active regional state. Pakistan, even with all its political instabilities, weak financial and social sectors and technological backwardness, could have an important role to play in the evolving political and develop-ment dynamics of the region owing to its geo-strategic status. Due to its colonial background, large population size, port city status, literate and vibrant populace, strong working middle class and a long history of hosting multinational firms and their interests in the country Karachi, does fulfill some of the basic criteria associated with a global city. However, there are severe constraints. Karachi City is plagued with acute crises of governance, both at the political andPotential economic nodal pointEven before British times, Karachi functioned primarily as a trading city. With the coming of the British, Karachi faced its first taste of multinationals in the functioning of the British East India Company. The port was improved. The Sindh Railway, developed in 1861, was subsequently extended into the Punjab and later linked with Northern India. As a result, by 1868, Karachi had become the largest exporter of wheat and cotton in India. Karachi also received a boost with the opening of the Suez Canal in 1869, which made it the nearest port in India to the UK. With the creation of Pakistan, Karachi witnessed rapid indus-trial development. 139 industrial units in 1941 multiplied to 3148 in 1960. Even today, with all the law and order and political complications, Karachi manages to maintain its central importance within the economic growth of Pakistan. One of the most growth oriented employment mode of the city is the services sector. The value addition that takes place here in the banking and insurance sectors, amounts to almost half of that of the entire country. Karachi, now accounts for 95 per cent of Pakistan’s foreign trade and contributes 30 per cent of Pakistan’s industrial production (ADB, 2006a). Nearly 90 per cent of the country’s head offices of banks, financial institu-tions and multinational companies are located in Karachi(ADB, 2005a). The country’s largest stock exchange is Karachi based. The city contributes 20 per cent of the national gross domestic product, accounts for 40 per cent of national employment in large-scale manufacturing and contributes 25 per cent of national and 40 per cent of provincial revenues (ADB, 2005b).

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June 2012

Dr. Rakhshinda Talat Hussain, Ex-Chairperson, Department of Psychology , Karachi University inaugurating the 21st Annual Eid

Card Competition at Bait al Hikmah Auditorium, Madinat al-Hikmah organized by Hamdard Public School & Hamdard

Village School. Mrs. Sadia Rashid, President, Hamdard Foundation, Ms. Fatema Munir Ahmed and Prof. Dr. Nasim A. Khan, Vice Chancellor, Hamdard University were present on this occasion.

The Chairman distributed share certificates issued by employ-ees empowerment trust under Benazir Employees Stock Option Scheme among employees of NITL fulfilling the criteria laid down in the Trust Deed. NIT employees appreci-ated the initiative of the Government of Pakistan, which gives a sense of participation to the employees in the organizations they are working for.

Wazir Ali Khoja Chairs Benazir Stock Option Units Distribution CeremonyA special meeting was held in Lahore with the branch managers of NIT (North Zone) to evaluate the sales performance of NIT branches, operating in the North Region. The meeting was chaired by Mr Wazir Ali Khoja, Chairman/MD, NITL. Controller of Branches Mr S. Zubair Ahmed was also present in the meeting.Mr Khoja noted that the revised targets had not been acheived. by the branches and hoped the same will be met within the given time frame. He also briefed the participants on Hajj Scheme for NIT employees which has taken the shape of a policy after approval of the board. Now six couples will perform Hajj instead of 3 due to this new policy.

Australian concept IVF hospital’s success-fully launched pre-implantation genetic diagnosis technology at Australian concept’s IVF conference “Art & Beyond” On the occassion of the launching of pgd project speakers of international fame delivered key lectures on pre-embryonic diagnosis (PGD) and stem cell technology.

Pre-implantation genetic diagnosis (PGD) is a reproductive technology used with an IVF cycle. PGD can be used for diagnosis of a genetic disease in early embryos prior to implan-tation and pregnancy. In addition, this technology can be utilized in the field of assisted reproduction for aneuploidy screening and diagnosis of unbalanced inheritance of chromo-some abnormalities, such as translocations or inversions. It can also help couples in Family Balancing.

Nokia Introduces New Range of Mobile PhonesNokia has unveiled two new mobile phone models - Nokia 110 and Nokia 112 - as part of its strategy to connect the next billion consumers to information and the internet.

(L-R Arif Shafique, GM Nokia Pakistan & Afghanistan, Saulo Passos, Nokia Global Director Mobile Phone Communications, Imran Khalid Mahmood, VP Nokia Near East and Calin Turcanu, Head of Mobile Phones Business Unit Nokia Middle East & Africa unveil the latest nokia devices - Nokia 110 and 112 at the 1st ever nokia global launch from Pakistan.

Dr. Syed Sajjad Hussain CEO Australian Concept along with other doctors and dignitories at the launching ceremony

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GOLD [USD / t Oz]




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Dark chocolates found good for heart health

SpaceShip II – commercial spacejet ready to go

Paralyzed rats walk again in Swiss lab

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aily consumption of dark chocolate can reduce cardiovascular events, such as heart attacks and strokes, in people with metabolic syndrome (a cluster of factors that

increases the risk of developing heart disease and diabetes), finds a study published in the British Medical Journal. Cardiovascular disease is the leading cause of death worldwide. Dark chocolate (containing at least 60% cocoa solids) is rich in flavonoids -- known to have heart protecting effects -- but this has only been examined in short term studies.So a team of researchers from Melbourne, Australia used a mathematical model to predict the long-term health effects and cost effectiveness of daily dark chocolate consumption in 2,013 people already at high risk of heart disease.All participants had high blood pressure and met the criteria for metabolic syndrome, but had no history of heart disease or diabetes and were not on blood pressure lowering therapy. With 100% compliance (best case scenario), the researchers show that daily dark chocolate consumption could potentially avert 70 non-fatal and 15 fatal cardiovascular events per 10,000 people treated over 10 years.Also important, they say, is that these protective effects have only been shown for dark chocolate (at least 60-70% cocoa), rather than for milk or white chocolate, probably due to the higher levels of flavonoids found in dark chocolate.Nevertheless, they conclude that the blood pressure and cholesterol lowering effects of plain dark chocolate “could repre-sent an effective and cost effective strategy for people with metabolic syndrome (and no diabetes).”

he U.S. Federal Aviation Administration has cleared “SpaceShipTwo”, a commercial six-passenger spacecraft owned by Virgin Galactic, to begin rocket-powered subor-

bital test flights.SpaceShipTwo manufacturer received a one-year experimental launch permit on May 23 for test flights beyond the atmosphere, FAA spokesman Hank Price said.Virgin Galactic is owned by British billionaire Richard Branson's Virgin Group and Aabar Investments PJS. Virgin Galactic has taken deposits from more than 500 people for rides, which cost $200,000.Participants will experience a few minutes of weightlessness and see the curve of Earth set against the black sky of space. Like SpaceShipOne, Virgin Galactic's SpaceShipTwo will be flown into the air beneath a carrier jet and released. Once separated, the spaceship's rocket engine will fire to blast it into the sky. SpaceShipTwo has completed 16 free flight tests.

cientists in Switzerland have restored full movement to rats paralyzed by spinal cord injuries in a study that might eventually be used in people with similar injuries.

Gregoire Courtine and his team at “Ecole Polytechnique Federale de Lausanne” saw rats with severe paralysis walking and running again after a couple of weeks following a combina-tion of electrical and chemical stimulation of the spinal cord together with robotic support."Our rats are not only voluntarily initiating a walking gait, but they are soon sprinting, climb-ing upstairs and avoiding obstacles," said Courtine, whose results from the five-year study will be published in the journal Science on Friday.Courtine is quick to point out that it remains unclear if a similar technique could help people with spinal cord damage but he adds the technique does hint at new ways of treating paralysis.Courtine's work does demonstrate a way of encouraging and increasing the innate ability of the spinal cord to repair itself, a quality known as neuroplasticity. Other attempts to repair spinal cords have focused on stem cell therapy.The brain and spinal cord can adapt and recover from small injuries but until now that ability was far too limited to overcome severe damage. This new study proves that recovery from severe injury is possible if the dormant spinal column is "woken up".Courtine and his team injected a chemical solution of monoamine agonists into the rats. These chemicals trigger cell responses by binding to specific dopamine, adrenaline, and serotonin receptors located on the spinal neurons. This cocktail replaces neurotrans-mitters released by brainstem pathways in healthy subjects and acts to excite neurons and ready them to coordinate lower body movement when the time is right.Courtine hopes to start human trials in a year or two at Balgrist University Hospital Spinal Cord Injury Centre in Zurich.

SS cience & TechnologySS cience & Technology

June 2012




The most distinct and charming aspect of Malaysia’s tourism is the country’s cultural and natural heritage. It offers a cosmopoli-tan cultural experience with numerous fascinating attractions. Some of the best tourist attractions in Malaysia are the high-tech city of Kuala Lumpur (the de jure capital of Malaysia), soothing Cameron Highlands comprising a series of hill stations, Kelantan, Malacca, Penang Island, Negeri Sembilian, Langkawi Island, Taman Negara National Park, Pulau Tioman Island, Petronas Twin Tower, Perhentian Islands, Sabah, Perlis, Sarawak, Terengganu Marine Park, National Museum and a lot more. As of 2011, Malaysia ranked as 9th among the top most visited countries in the world after Germany.Kuala Lumpur, the capital city and a commercial hub located in the west coast centre of Malaysia, is the seat of the Parliament of Malaysia and is one of the most beautiful cities in the world. With a mix of modernism and cultural heritage, Kuala Lumpur is the majestic access to a fascinating destination. The state-of-the-art Kuala Lumpur Airport is a major gateway into South East Asia. This beautiful global city of Malaysia is home to several historical buildings, mosques, churches, and temples that blend in with the numerous modern developments around the city.This capital city of Malaysia has grown from nothing to a modern, busting metropolitan city of around two million people. With a humble beginning as a mining village at the end of the 18th century, this Asian tiger has developed into a self -contained city which is blessed with colors of modern-ism along with rich heritage and offers all the modern ameni-ties to enjoy. It has beautiful and captivating skylines and is home to some of the most amazing skyscrapers in the world, which has helped put Malaysia prominent on the world map.An interesting part about Kuala Lumpur is that it has contin-ued to maintain equilibrium between its own culture and modernization. While on the one hand the visitors enjoy the world’s tallest twin building of the Petronas Twin Towers, they find its rich Craft Complex on the other hand. The towers represent the Malaysian Muslim art with its unique architecture. Some of the other fascinating attractions in Kuala Lumpur are Aquaria KLCC (aquarium that features over 5000 animals of 150 species of aquatic and land animals from Malaysia and around the world), National Art Gallery, KL Library, KL City Gallery, Galeri Petronas etc.

ourism is a powerful economic force which, over the years, has grown into an activity of world-wide importance and

significance. Today, it is globally regarded as one of the largest industries and a major sector in many economies which are either blessed with natural spots of tourist attractions or have developed the same to attract tourists from around the world. According to estimates, modern tourism contributes over 9 percent of the global GDP, and as such serves as the key driver for socio-economic progress. The global spread of tourism has in turn produced economic and employment benefits in several countries around the world. Malaysia is one of those economies of south-east Asia where tourism has been recognized as a major source of revenue and a catalyst for the country’s economic renaissance. According to estimates, tourist arrivals in Malaysia have steadily grown over time. In 2011 the number of tourists visiting Malaysia recorded a sizable increase of 137,128 touching all time high of 24,714,324 visitors compared to 24,577 in 2010. In terms of income, this South-East Asian country recorded an increase by RM 1.8 billion to RM 58.3 billion compared to RM 56.5 billion in 2010. The tourism sector contributed RM 37.4 billion to the country’s Gross National Income (GNI).The development of tourism in Malaysia has also broadened job opportunities across diverse industries. A total of 55,565 jobs were created in Malaysia in 2011 while the target for the current year is reportedly somewhere around 90,542 jobs. The government’s sustained efforts aimed at expanding tourism facilities and improving the quality of services in a wide range of tourist attractions in the country have played a dominant role in the upsurge of tourist arrivals in Malaysia.

Located partly on a peninsula of the Asian mainland and partly on the northern third of the island of Borneo, Malay-sia is blessed with a diverse mix of tourist spots and destina-tions that offer to the visitors world class attractions. Malay-sia boasts some of the most superb, world-class beaches, mesmerizing coasts, intriguing rainforests, excellent scenery, relaxed atmosphere, mountains and national parks and much more. Today, Malaysia is regarded as one of the most popular tourist destinations in Asia. Tourism has become its third largest source of income from foreign exchange.

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June 2012

Malaysia: A diverse mix oftourist attractions

Petronas Towers

Kuala Lampur City

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the Wind" because it lies below the typhoon belt. Sabah attracts visitors with its scenic beauty, landscape and cultural diversity. For those who prefer culture, nature and adventure tourism there is Sarawak, better known as the land of fabled White Rajahs. The rainforests of Sarawak are home to the richest and most diverse eco-system of the world.

Terengganu is one of the three east coast states in Malaysia. It is the repository of Malaysia's cultural heritage. It is a serene state, with numerous small villages, quiet roads, and secluded islands and beaches. Perlis , the smallest state in Malaysia, is yet another attraction which is famous for its serene un-spoilt beauty, rustic rural scenes and verdant paddy fields the expanse of which makes the landscape appear like a huge canvas of brilliant green or gold, depending on the season.The visit to Malaysia would be incomplete if the tourist misses a trip to Langkawi Islands located at the north west-ern part of Kedah. It is famous for its natural beauty, romantic myths and legends which spin tales of gigantic birds, valiant warriors, tragic romances of princess and maidens. The white sandy beach and crystal clear water provide the visitors a relaxing and refreshing environment. Besides sight-seeing, other activities that attract tourists to Malaysia are shopping with an endless variety of goods at competitive prices, leisure and business related events. The country is a glorious shopping heaven for the tourists.Under an economic transformation programme, Malaysia has targeted to triple its tourism output by the year 2020. To achieve the target, the offerings and services will have to be improved and upgraded. The government of Malaysia seem alive to the importance of tourism as an important contributor to economic growth as it is making continuous and concerted efforts to improve the quality of tourism infrastructure, facilities and services so as to attract the larger number of tourists. Promo-tional campaigns are launched to attract the tourists from all over the world. The series of initiatives undertaken by the country’s official tourism promotion board have created opportunities for the foreign investors to invest in diverse areas for further promo-tion of tourism in Malaysia. Several tax incentives are offered to foreign investors to attract their investment in the tourism indus-try. These and other measures will help in transforming Malay-sia into one of the most pleasant, hassle-free and vibrant tourist attractions in southeast Asia.

ravel & TourismTTKelantan is yet another interesting and absorbing spot of tourist attraction in Malaysia. Located in the northeast corner of the peninsula, this agrarian state has lush paddy fields, fishing villages and beaches. It offers plenty of opportunities for tourists to enjoy such as river cruises, river rafting, bird watching and jungle trekking. The charms of Kelantan are found in the vitality of its culture and its remote, unsullied beauty. To the West Coast of Malaysia, about 147 km from Kuala Lumpur, is a quiet seaside city known as Malacca. It is a wonderful repository of its cultural heritage. Its colonial past is evident in its Portuguese architecture, whereas on the streets, Chinese influence is most visible. Most of the businessmen in Malacca are Chinese. Over the centuries, the Chinese and local Malay cultures in Malacca intertwined, eventually producing a completely unique society-a mosaic of different cultures.On the south-west corner of Malaysia lies the Negeri Sembilian- a federation of nine states - comprising picturesque valleys and plains amidst hills and mountains, lush green villages and forests, splendid waterfalls, cool, crystal clear streams and rivers that make it an ideal site for tourism. The place is also known for architecture reflecting the influence of the state’s inhabitants from Sumatra. Yet another fascinating tourist spot is Penang Island that attracts the visitors because of its natural scenic beauty. Also known as ‘Pearl of Orient’, Penang is one of the premier resort areas in the country. What make the island really tick are its warm seas, golden beaches, lush greenery and delicious cuisine that entice the visitors to come to this place. The presence of Cameron Highlands, consisting of a series of hill stations, and the vibrant city of Georgetown on the north-eastern coast add to the charm and scenic beauty of Penang.

Cameron Highlands, most visited holiday destinations in Malaysia, are famous for their natural beauty. They are known to be home for waterfalls, extensive forests and traits that offer cool, refreshing air providing a pretty good retreat for those who seek a respite from the city’s noise and pollution. Penang is bordered by Kedah in the north and east, and Perak in the south. Another spot that offers a cool break from busy city life is Genting Highland where you find a wide variety of hotels and resorts to retire and relax. The National Museum, situated atop a hill, provides the visitors with a fascinating introduction to the history and culture of Malaysia.Located at the North-East corner of Borneo is Sabah, a tropical paradise which in ancient times was known as the "Land Below

June 2012

Cameron Highlands

Sabah Culture, Malaysia

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K. Hassan Zia recently wrote an article entitled “Signifi-cance of Pakistan” wherein he criticised a tendency among historians for misinterpreting the role the British played in dividing the Hindus and Muslims in the Indian sub-continent to achieve their colonial objectives. Now as Pakistan and India proceed towards reconciliation, this clan is again up to something that must be stopped in its tracks. By recalling history, he makes a strong case for this corrective effort. Zia is also the author of the books ‘Paki-stan: Roots, Perspective and Genesis’, and ‘Muslims and the West: A Muslim Perspective’. Following are extracts from his above-referred article, exposing the real British plan, how Hindus and Muslims fell into its trap, and the conse-quences it had on the people of the sub-continent.

History of the British Empire

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June 2012

uch has been written and spoken of late about parti-tion of the subcontinent in some sections of the media

that question Jinnah’s motives and doubts if a separate coun-try was indeed called for or good for the subcontinent’s Muslims. The claim of the Muslims to a separate identity is widely denounced as obscurantist, retrogressive and a folly. In the process, crucial historical facts are often distorted and misrepresented. The ghosts of many thoroughly discredited politicians rejected by the masses at the time, and whose only claim to fame is that they had opposed the idea of Pakistan, are resurrected and glorified. There is a conscious attempt to re-write history that could potentially undermine the belief and faith of unwary Pakistanis. To put things in proper perspective, after 1857 Muslims were singled out for the worst kind of retribution by the British. The prevailing sentiment was summed up in a letter to his father by A.C. Lyall, a British civil servant who wrote that “If Musalman could, by any means, be entirely exter-minated it could be the greatest possible step towards ‘civilizing’ and Christianizing Hindustan’. Around the same time a decision was made to drive a wedge between Muslims and Hindus. Viceroy Lord Canning advis-ed the Board of Control in London that “men who fought us at Delhi were of both creeds...... As we must rule 150 million people by a (more or less) handful of Englishmen, let us do it in the manner best calculated to leave them divided.” Since Hindus formed the overwhelming majority, they were favoured and patronized. A nexus developed between the two, that resulted in the Muslims becoming (in the words of Sir William Hunter, commissioned to enquire into the effects of the separatist policy) “a race ruined under British rule....... there is now scarcely a government office in Calcutta which a Muhammadan can hope for a post above the rank of filler of inkpots, mender of pens and messen-ger.” (Indian Musalmans: Are They Bound in Conscience to Rebel Against the Queen? p.19). To quote some examples of this discrimination, in Bengal where Muslims were in a majority, out of the 160 Fellows at Calcutta University in 1918, only seven were Muslims. The university Senate andSyndicate didn’t have even one Muslim member. Out of a total

of the 895 examiners only 9 were Muslims and in the Punjab University, in 1933, out of 68 professors, only 9 were Muslim. In 1945, it was 16 out of a total of 82. In the first half century of the university’s existence not one Muslim was appointed to the key Registrar’s position. Muslims were in the same sorry state in every government department and private organization, with the exception of the lower ranks in the Indian Army and police. There were a total of 957 judges and magistrates officiating in the 1901 law courts in Bengal, and out of the judges only 98 were Muslims.In the five major railway companies, EBR, EIR, GIP, NWR and Burma Railways, that operated in India in 1933, out of a total of 1,048 gazetted officers, there were only 45 Muslims. In the Telegraph Department of the Government of India in 1910, there were a total of 40 Divisional Offic-ers; not one of these was a Muslim but among the lower staff there were 12 Muslims in a total of 429. (Do Kaumi Nazria, by Prof. Ahmed Saeed, Nazria-e-Pakistan Founda-tion, Lahore)Hindus regarded and treated the Muslims in social matters as ‘untouchables’. At most official functions, tables for Hindus were laid out separately. Most Hindu shopkeepers would not hand over merchandise directly to a Muslim customer. It was placed at the end of a paddle and dropped into his hands or a sack to avoid any contact with the ‘maleech’. They dressed differently, followed a different calendar and lived in segregated areas, and stayed in separate hotels where Muslims and Christians were not welcome. Separate vendors provided water to Hindus at the railway stations. Their food, social mores and traditions, indeed entire ethos was different. Inter-marriages were taboo. They did not co-exist peacefully either; bloody riots would break out with regular monotony. Given this atmosphere, the claim that Indians constituted a single unified nation can only be described as a ludicrous and delusional myth.Perhaps the most telling contrast in the situation of Muslims and Hindus in India was in the economic field. Under British rule, Hindus dominated commerce, banking and industry. Any Muslim venturing into the commercial arena was denied credit and systematically squeezed out. The areas that (later) comprised Pakistan produced eighty percent of India’s jute and cotton crops but virtually all of the processing plants and facilities were owned by the Hindus.This domination became starkly evident at the time of the partition after Hindus and Sikhs moved out. Cities appeared like ghost towns. In Lahore, all shops in Anarkali and on The Mall were closed. Houses in the more affluent areas too were abandoned. The number of cars left on roads was probably

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usiness Development and Training Centres of the First Women Bank Limited have planned to

hold a series of training programmes for women empowerment and advancement. The first training program under FWBL-GEP (Gender Equity Program) went underway on May 30, 2012 in the areas of fashion designing and food production. The programmes are being held simulta-neously at Karachi and Lahore. In order to ensure quality and effectiveness of the training imparted, the bank has entered into collabo-ration with National Institute of Design Analysis (NIDA), Karachi, and College of Tourism & Hotel Management (COTHOM), Lahore.The training programmes are a part of a two-year pilot project which the First Women Bank Limited has planned for Capacity Building & Skill Develop-ment particularly to women from low income group for which Aurat Foundation has awarded a grant of Rs 13.8 million under the Gender Equity Program

supported by the American people through USAID for a period of 02 years. Gender Equity Programme (GEP) is a 5-year program implemented in Pakistan by Aurat Foundation in collaboration with ‘The Asia Foundation’ to serve the cause of women’s empow-erment and advancement in the country.

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less than half a dozen. Railways ceased to operate, and road transport was minimal. It was the same with the Telegraph & Post and other service departments. Virtually all banks were closed and economic activity was brought to a grinding halt. Compare this with the situation today to grasp the blessing that is Pakistan. We were told that the country would not survive economically. Now, it has a vibrant middle class that constitutes forty percent of the population against twenty- five percent next door. Share of Muslims now comprises about fourteen percent of the population in India now, but no more than one percent thereof is in the white collar jobs and about three percent in the blue collar jobs. In India’s armed forces it is less than half a percent. According to The Sachar Commission, recently set up by the Indian Government to enquire into the state of minorities, Muslims are now worse off than even the untouchables. In effect, this is what the leaders like Abul Kalam Azad, Abdul Ghaffar Khan and their ilk had stood for, and would have achieved. What is a worrisome question is why is it that a significant section of our media today eulogises these figures, and champions their cause while sparing no oppor-tunity to castigate and ridicule Jinnah? What happened at the time of India’s partition can never be forgotten. Close to a million innocent people were brutally murdered–more than ninety-five percent of them Muslims. East Punjab was turned into Dante’s Hell; village after village of the Muslims was burnt to the ground, and unsuspecting inhabitants struck down in the cruellest ways imaginable. Pregnant women had their bellies ripped open; others had their breasts sliced off. Many jumped into wells and killed themselves rather than fall into the hands of the murdering Sikhs. Babies were cut in half, or had their skulls smashed before being thrown back to their dying mothers. Children were burnt alive in fire pits. All this went on for four months without let until there was no Muslim left in the province.Members of a supposedly ‘cohesive’ nation do not go on rampage and commit orgies of slaughter and mayhem against their own. The victims may have had belief in another faith, but like the rest, they too had become citizens of a free and, professedly, secular India. Yet, the State did little to protect them. In many cases it actively participated in the blood-lust. There were numerous instances in which the local officials accompanied the bands of killers only to facili-tate their grisly work. Yet, none was ever put on trial for these horrendous atrocities. We have to ask, would the reaction have been the same if the victims had been Hindus? There are memories that continue to haunt. Each night when the alarm was sounded I, only 13 at the time, would pick up the shotgun and rush to the roof to take position next to my father. As we lay there in the stillness of the night waiting for the attack to materialize, he would remind me that if he died first, not to use up all of the cartridges but save at least one each for my mother and sisters to make sure they would not fall into the hands of the Sikhs alive. Try as one might, it is impossible to get rid of the image of what might have happened had we been overrun. Only Allah saved us from the tragic, sad fate that befell a million others whose luck had run out. He gave us this safe haven for the future. We all are obliged to preserve it.

More colours of British ImperialismOn April 23, writing for daily The

Guardian, George Monbiot quoted from the book ‘Britain's Gulag: the Brutal End of Empire in Kenya’

authored by the reputed Harvard University professor Caroline Elkins.

In this remarkably researched book, that won her the Pulitzer Prize, Elkins revealed that (during the British rule in Kenya) the British detained almost the entire population of one and a half million people, in camps and fortified villages. There, thousands were beaten to death or died from malnutrition, typhoid, tuberculosis and dysentery. The inmates were used as slave labour. Above the gates were edifying slogans, such as ‘Labour and freedom’ and ‘He who helps himself will also be helped’. Loudspeakers broadcast the national anthem and patriotic exhortations. People, deemed to have disobeyed the rules, were killed in front of the others, and their survivors were forced to dig mass graves, which were quickly filled. Interrogation under torture was widespread. Many men were anally raped using knives, broken bottles, rifle barrels, snakes and scorpions. A favourite method was to hold men upside down with their heads in a bucket of water, while sand was rammed into their rectum with a stick. Women were gang-raped by the guards. Men were mauled by dogs and electro-cuted. The British devised a special tool which they used for first crushing and then ripping off testicles. They used pliers to mutilate women's breasts, ears and fingers and gouged out their eyes. They dragged people behind Land Rovers till their bodies disintegrated. The British didn’t do body counts and most victims were buried in unmarked graves but denying that tens of thousands, possibly hundreds of thousands, of Kikuyu died in the camps during the round-ups is impossible. This is a vast, systematic crime for which there has been no reckoning. Doesn’t matter, but even those who acknowledge that something did happen, write as if Elkin’s research work doesn’t exist! Elkins also provides a wealth of evidence to show that all the horrors of the camps were endorsed at the highest level. The Governor of Kenya, Sir Evelyn Baring, regularly intervened to prevent the perpetrators from being brought to justice. The colonial secretary, Alan Lennox-Boyd, repeatedly lied to the House of Commons. Some authors concede that harsh measures were used, but claim that "while the Mau Mau were terrorising the Kikuyu, veterinary surgeons in the Colonial Service, were teaching tribesmen how to deal with the cattle plagues." The theft of the Kikuyu's land and livestock, their starvation and killings, the widespread support among the Kikuyu for the Mau Mau's attempt to reclaim their land and freedom vanish into thin air. Yet these authors maintain that the British government acted to stop any abuses as soon as they were revealed.What Monbiot find’s remarkable is “not that they write such things but that these distortions go almost unchallenged. The myths of the empire are so well-established that we appear to blot out countervailing stories even as they are told.”

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PSF lifts ban on Aamir and YasirThe Pakistan Squash Federation (PSF) has lifted bans imposed on national players Aamir Atlas Khan and Yasir Butt. The decision was taken during the 33rd PSF executive committee meeting that was called to discuss ban issue of Aamir and Yasir and the boycott of Punjab and Sindh players of the recently concluded Junior Squash Championship in Peshawar. The meeting was chaired by PSF senior vice president Air Vice Marshall Syed Razi Nawab. PSF vice presidents Qamar Zaman and Malik Amjed Ali Noon, secretary general Abdul Wahab Marwat and the representatives of Sindh, Punjab, Khyber Pakh- tunkhwa and Balochistan were also present on the occasion. Squash players Aamir and Yasir who tendered their apology via email to the PSF president Air Chief Marshall Tahir Rafiq Butt, were directed to appear before the committee members to explain their point of view both the players accepted their mistake and promised not to repeat such mistakes in future.Aamir Atlas Khan was banned since January 2011 for violating PSF’s code of conduct and misbehaving with coaches and officials while Yasir Butt was banned due to bad performance during the World Mens’ Team Championship, 2011.

After historic entry, Maria Toor exits British OpenWomen’s squash world number one Nicol David had little trouble moving past Pakistan’s Maria Toor Pakay in her first- round match at the British Open played on London at 13 May.The legendary Malaysian beat Pakay, the first Pakistan-born woman ever to reach a British Open main draw after upsetting the seedings in the qualifying competition, in straight sets.Pakay was unable to put much resistence against the world’s leading player and lost the match in 20 minutes, with a 11-2, 11-3, 11-6 scoreline.Earlier, the 21-year-old left-hander from Peshawar overcame Emily Whitlock, the European junior champion, by 11-5, 4-11, 8-11, 11-6, 11-7 in a 46-minute struggle which ended in the English player’s first defeat in any competition since January.Maria Toor Pakay (born November 22, 1990 in South Waziristan) is a Pakistani professional squash player. She is currently ranked 72nd, and is Pakistan No 1. Maria turned pro in 2006. In early August 2007 she was given the Salaam Pakistan Award by the President of Pakistan, alongside tennis player Aisam Ul Haq Qureshi and footballer Muhammad Essa.

Aisam’s ranking slides further Aisam-ul-Haq, Pakistan’s top tennis player,slumped to 14th position in the ATP world tour doubles rankings. With 4,160 points from 28 tournaments, Aisam is struggling to be in the top 10 by June 11 which could improve his chances of getting a berth at this year’s London Olympics.Aisam is trying hard to win as much points as he can by the cut off date, and this is one of the reasons why he has been playing

continuously since April 15. These days he is playing in the ongoing Roma Masters with his make-shift partner Alexan-der Peya of Austria, who is ranked 19th in doubles.Aisam needs 1100 points to get to the 10th position. As per rules Pakistan stands a chance of receiving a wild card entry in Olympics in the format of doubles tennis for the very first time in the history.

Pakistan-Australia series in JeopardySri Lanka has reportedly dropped plans to host a limited overs series between Pakistan and Australia in August as it clashes with the island's Premier League. Pakistan has started negotiations with other countries about hosting the series, including the United Arab Emirates (UAE) and Malaysia.In March, the Sri Lanka board had agreed in principle to host the series. At that time, there had been no decision on the SLPL. The proposed first season of the league had been cancelled last year and it was only earlier in May that a new deal was signed by the Sri Lanka board to hold the SLPL this August.Pakistan is due to play five one-day and three Twenty20 matches against Australia from mid-August, the dates of which are yet to be finalised. After the March 2009 attacks on SriLankan cricket team, Pakistan has been playing its matches with international teams at neutral venues such as the UAE, England and New Zealand.

Mohammad Hafeez appointed T20 captainThe Pakistan Cricket Board has appointed Mohammad Hafeez as the captain for the Twenty 20 (T20) format of the game during the tour of Sri Lanka. Speaking to the media, PCB Chairman Zaka Ashraf announced that the Pakistani all rounder would be leading the team in the shortest format of the game, however Misbah-ul-Haq would remain captain for the One day International and Test formats. Hafeez would serve as the vice captain in these formats.Speaking to the media Hafeez thanked the board and Misbah for giving him the opportunity to lead the T20 team. “I will trymy best to enhance the moral and image of the team.” Hafeez also praised former captains he had played under and said he would implement what he had learnt from them.Pakistan’s last series was in the United Arab Emirates (UAE) against England in February, where they lost the three-match Twenty20 series 2-1. Since then, however, the squad has taken on a new look, with the selectors picking specialist players for each format of the game and appointing Hafeez Twenty20 captain. According to Hafeez, the team was wary of the demanding conditions in Sri Lanka and would not make any decisions on the playing combination beforehand. “Playing in Sri Lanka at home is always tough. We are wary about the conditions there, but we are optimistic about the result.”

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Jordan has multi-party politics. Its continuing structural economic difficulties, burgeoning population, and more open political environment led to the emergence of a variety of political parties. There are over 30 political parties in Jordan from extreme left (Jordanian Communist Party) to extreme right (Islamic Action Front).Jordan, which is a constitutional monarchy, the King and his council members enjoy the executive authority. The king signs and executes all laws, appoints and may dismiss all judges by decree, approves amendments to the constitution, declares war, if required and commands the armed forces. Cabinet decisions, court judgments, and the national currency are issued in his name. The cabinet is accountable to the Chamber of Deputies on matters of general policy and can be forced to resign by a 50% or more votes of "no confidence" by that body. Moving toward greater independence, Jordan's parliament has investigated corruption charges against several regime figures and has become the major forum in which differing political views, including those of political Islamists, are expressed. The parliament plays an important role but the King remains the ultimate authority.During its 66 years of history of existence as an independent kingdom the country has made strides in diverse fields and achieved enviable progress in political, economic, social, cultural and services sectors despite intermittent skirmishes which were of little significance as they were effectively controlled. Although in the recent past there has been a series of protests and demonstrations demanding the transfer of the King’s constitutional authority to select prime minister to the people, wishes of the government and the people of Jordan hope that the ongoing crisis will also pale into insig-nificance and be resolved amicably.Jordan and Pakistan have had deep, strong, historical and cordial relations which have continued to grow over time. Pakistan and Jordan have commonalities in history, culture and religion which serve as strong bonds for brotherly relations between the two countries. They have stood by each other in times of need. When Pakistan suffered due to earth-quake and two devastating floods, Jordan extended financial assistance besides generous help in the process of rehabilita-tion of the calamity-hit internally displaced persons.

ay 25 is a historic day for the people of Jordan. The day marks the freedom of this Great Hashemite Kingdom

from the British dominance and emergence as an indepen-dent, sovereign state in 1946 in the comity of nations around the world.Jordan has a long history. But modern Jordan was founded in 1921, and it was recognized by the League of Nations as a state under the British mandate in 1922 known as The Emir-ate of Transjordan. On May 25, 1946, the United Nations approved the end of the British Mandate and recognized Jordan as an independent sovereign state which then was officially named as the Hashemite Kingdom of Transjordan. The Parliament of Jordan proclaimed King Abdullah I as the first King of Jordan who officially changed the country's name to the Hashemite Kingdom of Jordan in April 1949.Modern Jordan is classified as a country of "medium human development", and an “upper middle income" economy. Being an emerging free market economy, it has more Free Trade Agreements than any other country in the region. It has close relations with the United States and the United Kingdom, and is a major non-NATO ally of the United States. Jordan is a founding member of the Arab League and the Organisation of Islamic Cooperation (OIC). The Jordanian Government is one of the three members of the 22 Arab League states to maintain diplo-matic relations with Israel, the others being the Egyptian and Palestinian governments. On independence from Britain, King Abdullah I ruled Jordan till 1951 when he was assassinated and his son King Talal became the ruling monarch. However, King Talal’s rule did not last long; he was removed from the throne in 1952 due to mental illness. At that time his son, Hussein, was too young to rule, and hence a committee ruled over Jordan.On attaining the age of 18, Hussein was installed as the King of Jordan. His accession to the throne posed a number of challenges which he survived, drawing on the loyalty of his military, and serving as a symbol of unity and stability in Jordan. King Hussein ended martial law in 1991 and legalized political parties in 1992. Earlier in 1989 and later in 1993, Jordan held free and fair parliamentary elections. Controversial changes in the election law led Islamist parties to boycott the 1997 elections. King Hussein ruled the country from 1953 to 1999.King Abdullah II succeeded his father Hussein following the latter's death in February 1999. Abdullah reaffirmed Jordan's peace treaty with Israel and its relations with the United States. During the first year in power, Abdullah refocused the government's agenda on economic reform.Jordan has followed a pro-Western foreign policy and main-tained close relations with the United States and the United Kingdom. These relations were, however, damaged by Jordan's neutrality and maintaining relations with Iraq during the first Gulf War. Jordan has historically been at the forefront of negotiating peace between the Israelis and the Palestinians.

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The Indian Premier League-2The Indian Premier League (IPL) is a profes-sional league for Twenty20 cricket champion-ship in India. IPL-2012 featured nine teams selected from amongst the cricket players around the world. In all---matches were played. The final of the tournament was played between “Kolkata Knight Riders” and “Chennai Super Kings. Kolkata Knight Rider defeated the Chen-nai Super Kings in the final match of IPL at M.A. Chidambaram Stadium in Chennai on May 27, 2012 and lifted the trophy. Chen-nai Super Kings scored 190-3 in 20 overs (S. Raina 73, M. Hussey 54, M. Vijay 42) lost to Kolkata Knight Riders 192-5 in 19.4 overs (M. Bisla 89, J. Kallis 69; B. Hilfenhaus 2-25) by five wickets.Pakistani cricketers were not included in either of the nine teams. However, Pakistan’s former skipper and legendary bowler Wasim Akram played a crucial role in the maiden victory of Kolkata Knight Riders. He was the bowling coach of the KKR and proved his worth by effectively training the bowlers of his team. Cricket relations between India and Pakistan have remained suspended ever since the terrorist attacks in Mumbai in 2008. Keep-ing in view the ongoing initiatives taken for improvement of relations between the two countries, Waseem hopes that the next season of IPL will open the doors for participation of Pakistani cricketers."Pakistani players Shahid Afridi, Umar Gul, Umar Akmal and Mohammad Hafeez are popular in India and Indian fans have realized they can add to the charm of the league," Wasim, said who played 104 Tests and 352 one-day internationals for Pakistan.“I acted as an ambassador for Pakistan as everyone knows me, and during my stay, I have seen that people want Indo-Pak cricket to start and for me the invitation for Sialkot is the first step," Wasim said. He slammed those criticizing the Indian Premier League, saying that they are "jealous" of the cash-rich Twenty20 event's success and should be "ignored". IPL 2012 was Akram’s third stint with the tournament having joined the Kolkata Knight Riders as bowling coach in 2010. Since then he has been instrumental in the training of many fast bowlers not only from the Knight Riders but from other teams as well.

Former coach Waqar Younis has backed Mohammad Hafeez’s appointment as Pakistan’s new captain for Twenty20 format of the game and his elevation to the post of vice captain in the Test and one-day internationals (ODIs). “The Pakistan Cricket Board (PCB) had taken a wise decision by reposing faith in Hafeez. Hafeez is an experienced cricketer and I think it’s a good move to give him the captaincy first in the shortest format. It would have been unwise to throw him into the deep end and give him the captaincy in the longer formats. Mohammad Hafeez (born October 17, 1980 at Sargodha) is a Pakistani cricketer. He is a right-handed batsman and a right- arm slow bowler.

SL name squads for Pak seriesSri Lanka on 25 May announced separate Twenty20 and one-day squads for the home series against Pakistan starting from 1st June 2012. The Sri Lankan squad for the three-Test series, starting on June 22, will be named later.A release from the Sri Lankan cricket board did not name a captain, but veteran Mahela Jayawardene is expected to remain a part of the team.Sri Lnakan ODI squad: Angelo Mathews, Dilhara Fernando, Dinesh Chandimal, Jeevan Mendis, Kumar Sangakkara (wicket-keeper), Lahiru Thirimanne, Lasith Malinga, Mahela Jayawardene (captain), Nuwan Kulasekera, Nuwan Pradeep, Rangana Herath, Sachithra Senanayake, Thisara Perera, Tillakratne Dilshan, Upul Tharanga.Sril Lankan T20 squad: Angelo Mathews, Chamara Kapugedera, Dinesh Chandimal, Isuru Udana, Kaushal Lokuarachchi, Kumar Sangakkara (wicket-keeper), Lahiru Thirimanne, Lasith Malinga, Mahela Jayawardene (captain), Nuwan Kulasekera, Sachithra Senanayake, Thisara Perera, Tillakaratne Dilshan, Upul Tharanga.Pakistan in Sri Lanka 2012 is a bilateral series to be organized by Sri Lanka. Pakistan tour of Sri Lanka 2012 will consist of 3Tests, 5 ODIs and 2 Twenyt20 matches to be hosted by Sri Lanka in June 2012. The series is a part of Future Tour Programs prepared by International Cricket Council (ICC).Pakistan T20 Squad: Khalid Latif, Ahmed Shahzad, Mohammad Hafeez, Shoaib Malik, Umer Akmal, Shakil Ansar, Shahid Afridi, Yasir Arfat, Sohail Tanveer, Saeed Ajmal, Raza Hasan, Umer Gul, Haris Sohaib, Mohammad Sami, Hamad Azam, Nasir Jamshed.Pakistan ODI Squad: Mohammad Hafeez, Nasir Jamshed, Younis Khan, Misbah-ul-Haq, Umer Akmal, Sarfaza Ahmed, Shahid Afridi, Umer Gul, Rahat Ali, Saeed Ajmal, Abdul Rehman, Mohammad Sami, Asad Shafiq, Ijaz Cheema, Azhar Ali, Imran Farhat.Pakistan Test Squad: Mohammad Hafeez, Taufiq Umer, Azhar Ali, Misbah ul Haq, Younis Khan, Asad Shafique, Adnan Akmal, Umer Gul, Saeed Ajmal, Abdul Rehman, Mohammad Sami, Faisal Iqbal, Junaid Khan, Afaq Rahim, Mohammad Dogar, Aizaz Cheema.

Pakistan Tour of Sri Lanka 2012 FixturesFri June-1 1st T20I - Sri Lanka v PakistanMahinda Rajapaksa International Cricket StadiumSooriyawewa, HambantotaSun June-3 2nd T20I - Sri Lanka v PakistanMahinda Rajapaksa International Cricket Stadium, Sooriyawewa, Hambantota Thu June-7 1st ODI - Sri Lanka v Pakistan

Pallekele International Cricket StadiumSat June-9 2nd ODI - Sri Lanka v PakistanPallekele International Cricket StadiumWed June-13 3rd ODI - Sri Lanka v PakistanR Premadasa Stadium, ColomboSat June-16 4th ODI - Sri Lanka v PakistanR Premadasa Stadium, ColomboMon June-18 5th ODI - Sri Lanka v PakistanR Premadasa Stadium, ColomboFri June-22 - Tue June-26 1st Test - Sri Lanka v PakistanGalle International StadiumSat June-30 - Wed July-4 2nd Test - Sri Lanka v PakistanSinhalese Sports Club Ground, ColomboSun July-8 - Thu July-12 3rd Test - Sri Lanka v PakistanPallekele International Cricket Stadium

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Pakistan has potential to generate 2.3 mil-lion MW solar energy annually - Dr NasimVice Chancellor, Hamdard University, Dr Nasim A Khan has said that Pakistan has potential to generate over 2.324 million mega watts of electricity per annum through solar system and industrialists should come into manufacturing in this sector for domestic as well as industrial use in order to overcome prevailing energy crisis in Pakistan.

Giving a presentation at a conference on solar power in Pakistan, organized by Korangi Association of Trade and Industry in collaboration with Engineering Review, Dr Nasim said that solar and wind powers are the real sources of energy and rest of the sources are alternatives. He said that Hamdard University is ready to provide technology of solar power to the industrialists free of charge so that the country could be able to benefit from cheapest sources of energy.Dr Nasim said that though solar panels are expensive presently, commercial manufacturing would make them cheaper and viable for all consumers. He further empha-sized on manufacturing of all components of solar system locally in order to make them viable for the local as well as export market. He informed that many countries such as USA, Germany, Australia, Brazil, UK, Japan, India, China and Thailand are now generating electricity in bulk through solar system. He disclosed that Japan is generating electricity at the cost of only two cents per kilo watt hour (KWH). The Vice Chancellor said that Pakistan needs to put 2,000 MW electricity into the national grid every year and this could only be possible through solar and wind power. He said that UK which has less than half the population than Pakistan was generating 70,000 MW in 1970 whereas Pakistan is generating merely 22,000 MW at present.Chairman KATI, Ehtesham Uddin announced to extend all out support to Hamdard University for the promotion of solar powered technology and offered to coordinate with Dr Nasim and industrialists to manufacture solar panels for domestic and industrial use. He said switching over to the solar system for energy was the need of the hour and more people and scientists like Dr Nasim should come forward for this cause. President All Karachi Indus-trial Alliance, Mian Zahid Hussain said future belongs to cheapest sources of energy. Mian Zahid pointed out none of the government measures were proved to be fruitful for saving energy and there was no respite in load shedding.

Your Horoscope - June 2012ARIES: The presence of your ruling planet Mars in the 6th house of your chart will bring health improvement in your life. Relationship with authori-ties will remain stable. Moon eclipse will occur in the 9th house of your chart on 4th June; under its influence some unavoidable obstacles will hamper your progress in the fields of education and spirituality. On 5th and 6th June, Venus-Mars square will boost up a great deal of confidence in you but be careful while driving. Under the influence of Mercury-Mars sextile on 21st and 22nd June, your technical skills will enhance and your income will increase rapidly. Honesty will bring rewards.

TAURUS: Your ruling planet Venus will stay in the house of money from 1st to 27th June. Pay extra attention to business and financial endeavors. Don't jump into new business projects. Strong position of Venus is going to put brilliant opportunities in your way from 28th to 30th June. On 2nd and 3rd June, Mercury-Venus conjunction will bring good news in terms of personal relation-ship and your performance. Moon eclipse in the 8th house of your chart on 4th June will let you get rid of legal problems. Under the dangerous influence of Venus-Mars square on 5th and 6th of this month, angry and short-tempered people must think before they leap. On 6th and 7th June, Sun-Venus conjunction promises good friendships, cordial relations and better financial avenues. On 21-22 June, Venus-Uranus sextile will polish your communica-tion skills and you will shine like a star suffused with creativity.

GEMINI: Your ruling planet Mercury will be in an exalted position from 1st to 7th June; it’s going to enhance your creative skills. From 8th to 28th June, Mercury will be moving in the house of money and this auspicious aspect will provide you financial benefits. From 27th to30th June, Mercury will occupy a position in the third house; this very aspect will welcome active progress in the field of education. On 2nd June, Mercury-Venus conjunction will eradicate misunderstandings and new business understandings will be initiated. Lunar eclipse on 4th June will affect seventh house of relationships. So be careful. On 4th and 5th June, Mercury-Saturn trine will instil confidence in you while taking decisions. On 11th and 12th June, try solving your problems through proper communication channels. On 21st and 22nd June, Mercury-Mars sextile will create in you a deep sense of pragmatism. On 29th and 30th June, Mercury-Jupiter sextile will bring good news and your interests in the field of education will be rekindled.

CANCER: Your ruling planet Moon ensures escape from mundane and business problems from 15th to 17th of this month. The Moon's entrance in your 11th house on 12th June will help you in teach-ing a lesson to your enemies. Your budget will come under control. On 2nd and 3rd June, Mecury-Venus conjunction will instil happi-ness in the family environment. Siblings will definitely cooperate with you unconditionally during this time period. Lunar eclipse in 6th house is going to improve your health status. On 13th and 14th June, Sun-Saturn trine will bring in financial prosperity. Toler-ance is the key to success! So practice it. On 21st and 22nd June, Mercury-Mars sextile will support you in making a plausible struggle for keeping your expenditure under check.

LEO: Your ruling planet Sun will remain in the 11th house of your chart from 1st to 20th June; you are favoured by your stars. Therefore, a strong air of affinity will provide you internal and emotional sustenance. Be careful from 21st to 30th June; this is the time when Sun will be moving in your 12th house and your temper will rise quickly. Do not argue with your boss and try to overcome nagging sense of loneliness that is putting you in depression. On 4th June, Lunar eclipse is occurring in your fifth house. So, be careful in romantic endeavors. It is also important to keep an eye on your children's activities. On 6th and 7th June, Sun-Venus conjunction will provide you with an opportunity to develop friendly relationship with new people. You will be expressive in the sphere of Love as well. On 8th and 9th June, Sun-Mars sequence may cause you some sudden disease or accident. On 13th and 14th June, Sun-Saturn trine will bring in success in your life. Take care of your health on 24th and 25th June, because of Sun-Neptune trine. On 30th June, you will be attracted towards the opposite sex. Avoid meeting jealous people. Do not hesitate to ask your seniors for advice. At some point, you can be mentally frustrated; so take a little rest.

VIRGO: From 1st to 7th June, your active ruling planet Mercury will bring you fame and good reputa-tion. From 8th to 26th June, Mercury will stay in 11th house, that is why your learning experience will become more exciting and your participation in functions will introduce multiple opportunities into your life. From 27th to 30th of this month, several issues will cause you mental frustration. So make wise plans. On 2nd June, you will be considering different business options. On 4th and 5th June, Mercury-Saturn trine will instil positiv-ity in your mindset. Serious ponderings will be fruitful. On 4th June, Lunar eclipse will demand extraordinary attention in domestic life. Check your vehicle in time. On 11th and 12th of this month, do not jump into conclusions. Avoid short-tempered people. On 21st and 22nd June, practical work will improve. On 29th and 30th June, take decisions after giving second thought to your old plans.

LIBRA: Your ruling planet Venus from 1st to 27th June will put some obstacles in your way. Those who are planning to go abroad will face delays. Students are advised not to decide on anything without consulting their teachers. On 2nd and 3rd June, Mercury-Venus conjunction will help in eradicating misunderstandings. An air of cooperation will develop during this time period. On 4th June, Lunar eclipse will make you melancholic as your hopes from relatives are dashed down to the ground. On 5th June, Venus-Mars square will compli-cate your relations with others. Don't be hypersensitive at all. On 6th and 7th June, Sun-Venus conjunction will invite generosity, love, artistic taste and expressiveness. The influence of Venus and Uranus will encourage a strong desire to be expressive. Good Luck!

SCORPIO: The presence of your ruling planet Mars in the 11th house of your chart will invite goodwill, friendship, work commitments and business opportunities. Your co-ruling star is Pluto that is going to stay in the third house now; this aspect will create a nagging influence. You are advised to be cautious while travelling. On 4th June, Lunar eclipse in your second house can drag you in some financial difficulty. So, think twice before lending money to a seeker. On 5th and 6th of this month, Venus-Mars square will test your patience.

by Dr. Aameer Mianwww.astrohope.com

stroloAA gy

June 201073

SAGITTARIUS: The position of your ruling planet in your 6th house from 1st to 11th June will create for you promotional opportunities. Your health will be in a good position from 12th to 30th June. Jupiter will enter into your seventh house, and this aspect is going to bring good news for unmarried people. Cordial relation-ships among family members are witnessed. On June 4 and 5, Mercury-Saturn trine will support business cooperation. Moreover, Lunar eclipse on 4th June will put you in a state of emotional panic, so give alms to ward off evil. On 13th and 14th June, Sun-Saturn trine will exhibit good fortune for you. Those who are planning to go abroad will be in a good position to fulfil their desires. Students will produce good results during this time period because their interest will be enhanced in academic studies under this influence.

AQUARIUS: Your ruling planet Saturn will stay in a direct position in the 9th house of your birth chart. This disturbing aspect will put certain obstacles for those who are planning to go abroad and in particular those students who are aspiring to acquire higher education. From 26th to 30th June, Saturn’s direct position will help you overcome your current dilemmas. This month, your co-ruling star Uranus will move in your 4th house. During this time period, property and vehicle related issues will come under spotlight. Lunar eclipse in the 11th house on 4th June will be disappointing in terms of cooperation from relatives and friends. Mercury-Uranus square on 11th and 12th June will make you realize the importance of consistency in work. Sun-Saturn trine on 13-14 June is going to instil in you tolerance and wise strategies will be creating good opportunities. Under the influence of Mercury-Saturn square on 20th and 21st June, some unseen problems will surface but still you must keep yourself positive. On 21st and 22nd June, Venus-Uranus sextile will encourage creativity and your creative wisdom will ensure possible remedies for you to get out of the web of problems. On 29th and 30th June, Sun-Uranus square will bring some changes in your life.

PISCES: Your ruing planet Jupiter will be moving in your 3rd house from 1st to 11th June; this exciting aspect will evoke recreational interest. The desire to visit parks and fascinating places will mesmerise you. Jupiter's entrance into the 4th house from 12th to 30th of this month will be very favourable in terms of domestic life, marital relationship and sibling's love. Your co-ruling star Neptune will be moving on in a direct position from 1st to 4th June; this aspect will provide you the opportunity to say, “Home sweet home”. From 5th to 30th June, your attention will be directed towards property and vehicle related issues. Moreover, Lunar eclipse on 4th June will disturb your business and career, so think wisely and take help from experts before finalizing your projects. On 9th and 10th June, Mercury-Neptune trine will polish your creative skills. On 24th and 25th of this month, you are advised to spend wisely and pay extraordinary attention to health issues. Do not make changes in your plans on 25th and 26th June. Under the influence of Mercury-Jupiter sextile, you will be able to develop stability, realism and a great practical approach in your psychological charac-ter that is definitely going to ensure success for you in the coming days.

CAPRICORN: Your birth chart is influenced by Saturn. You are advised to pay heed to your business from 1st to 25th of this month. Some financial problems may crop up causing you disappointment. From 26th to 30th June, Saturn's position will be direct and several problems will be solved. On 4th and 5th June, Mercury-Saturn trine will inject positivity in your soul. Serious consideration will help you decide on some important issues. Lunar eclipse in 12th house will help you control unnecessary expendi-tures. For spiritual sustenance, offer sadqa and pray regularly- this practice will also protect you against negative influence of the eclipse. On 13th and 14th June, Sun-Saturn trine is going to prom-ise healthy relationship between you and your boss. On 20th and 21st June, Mercury-Saturn square will push you towards narrow-mindedness, depression and relationship tussles. Don't be hyper-emotional and think twice before taking any significant decision.

stroloAA gyDo not spend money recklessly. On 8th and 9th June, Sun-Mars square will make you very active but fast driving is something that can endanger your life. So, be watchful. Uranus-Pluto square on 21st and 22nd June will cause you depression but an informed discussion can help you in settling impor-tant issues. Sun-Pluto opposition on 30th June can create in you an element of uncertainty, so be expressive and struggle to prove your guts!

POGEE 2012 - Pakistan Oil, Gas and Energy ExhibitionTo present various modern technologies in the energy sector in Pakistan, nearly 200 companies from 30 countries partici-pated at the POGEE 2012 (Pakistan Oil, Gas and Energy Exhibition) held from May 8-10, 2012 at Karachi. The exhibition displayed state-of-the-art equipment and machin-ery related to oil, gas and energy sectors. Participating states included China, Germany, Iran, India, Italy, Pakistan, Qatar, Singapore, Turkey, UAE and USA showcased their techno-logical advancements to the high profile trade visitors.Moreover, the show featured exclusive pavilions for China and Germany in which various companies marketed their technological advancements.Inaugurating the Expo, Minister for Overseas Pakistanis Dr Farooq Sattar stated that energy sector should be given priority over fertilizer industry for producing cheaper electricity to reduce power shortage and get rid of load shedding in the country.He said that electricity can be generated at a cost of Rs 4 per unit by using natural gas which in turn can reduce the cost of production in the country and cut import of furnace oil. Expressing his views Mr Muhammad Yasin, Executive Direc-tor, Oil and Gas Regulatory Authority (OGRA) said the current demand for gas was 5.6 billion cubic feet per day while the




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