By usman karim
The Holy Prophet (PBUH) has specifically underlined the sanctity of debt. He would not lead the funeral prayer of a person who died in debt unless some one else undertook to discharge the liability.
A man said to him, “Tell me, if I am to be killed in the cause of Allah, would all my sins be removed from me?” The Holy Prophet (PBUH) said, “Yes, if you are killed while you are steadfast, looking forward to your reward, marching forth and not turning away, but if you owe any debt that will not be remitted. Gabriel just told me this
With a clincher of a quote:” It is beautiful to be rich.
”Pakistan also has been trying to come out of its poverty since the day it came into being. Every annual budget that it has prepared for its nation and every medium term plan that has been launched since, had just one objective: to become a rich welfare state where no one will go to sleep hungry, no one will go without a roof over his/her head and no one will go around in tatters. PAKISTAN seems to have entered into a new phase of economic activity where the privatisation deals have become the in-thing. The sweetest of them all was that of the PTCL sell-off. After the deal was done, the terms were sweetened to keep the buyer from walking away. The KESC deal also carries a lot of sweeteners. The Supreme Court has annulled the candy-coated steel mills deal.
The sweet import deals of the Black Cab, Tractors, Renault, Daimler Chrysler and Railway coaches are on the front pages of most newspapers. Favourites are also being allowed to make big killings by hoarding essentials like sugar and not so essentials like cement. Half a dozen of stock- brokers have been allowed to make money at the cost of small savers. The oil marketers as long as they were allowed to fix prices had turned the whole exercise into a lucrative cartel. The real estate deals that the defence housing authorities have been able to obtain in the prime areas have no parallels. The list is very long and the details of all these deals are being discussed in the media minutely on daily basis but without in any way causing the decision- makers even a little bit of embarrassment.
And the strategy to achieve this objective has remained the same all these years: capital formation; and the tactics: make the rich richer; the trickle down would take care of the poor. Yes, it is indeed, ugly to be poor. Nobody takes any notice of you, nobody listens to you and you live and die in squalor without enjoying the rich bounties that God has bestowed on mankind.
Yes, of course, no poor man wants to spend his lifetime in perpetual poverty and no poor nation likes to live at the bottom of the ladder all its life.
So every person, every nation, every society spends their waking hours sweating to become rich and once they attain a modicum of prosperity they sweat further to protect their prosperity from the vagaries of nature and man. So, from the very beginning the successive governments in Pakistan motivated not by any callous intent but driven by the higher ideals of a social welfare philosophy designed their economic policies in such a way that the rich kept on becoming richer with a generous helping hand from the public sector. By using the taxpayer’s money, the government put up factories and then divested them among a handful of rich. They kept two rates of exchange, one for the rich and the other for the common man by introducing the bonus voucher scheme.
Through the import substitution policies, they allowed the industrialists to market low quality goods and rob the consumer white without the fear of competition and in the hope that eventually this would lead to industrial development. They allowed creation of horizontal and vertical monopolies. And they allowed these rich people to borrow from banks the resources mobilized from the nation at large for industrial ventures at 15:85 to 30:70 equity-debt ratios. The banks contributed the bulk of the funds while the sponsors would got back their investments of 15 to 30 per cent, mostly on paper, even before the factory would come on stream through over invoicing machinery imports.
Both those who under-invoiced their exports and those who over invoiced their imports stashed away their millions in foreign banks. They never paid their utilities bills, evaded and avoided their tax dues. And by the end of 1960s, handful families, estimated at that time to number 22, had become filthy rich. The top civil bureaucrats who implemented these policies shared the bounties with these rich families and later even the top generals that had become politically very powerful after the 1958 military takeovers also started sharing the loot. It was all being done in the name of achieving the objective of social welfare by creating a rich class. But in the process the rich were becoming richer and the poor, poorer. The decade of development that was celebrated in 1969 turned into a decade of dismemberment by 1971.
And by 1972 the pendulum had swung to the other extreme. Now it was the turn of the public sector to become the main vehicle of capital accumulation with the complete exclusion of the private sector. It was the time when even Western Europe led by France and Italy were taking to socialism to avert domestic upheavals in response to knocking on the doors by the East European socialists.
The UK and West Germany had become more social welfare countries than any socialist country, with their social welfare budgets accounting for more than 50 per cent of their GDPs. But even before Mrs. Thatcher of the UK and Mr. Reagan of the US came on the scene to change all this, Pakistan’s Army had taken care of Mr Z.A. Bhutto and the pubic sector which Mr. Bhutto had used to launch so many huge infrastructure and industrial undertakings had by early 1980s become in the hands of the then finance minister Ghulam Ishaque Khan a hand maiden of the civil and military bureaucracy.
Used the parable of an animal farm to highlight what I saw as the government’s view of the economic situation and people’s reaction to what was happening to them. The people of the country were like so many cattle tethered to their posts in a cattle farm. The farm manager and the farm owner were pleased with what they were doing.
They used the best animal husbandry practices known to mankind. The cattle continued to provide milk in increasing amounts; they produced their offspring on a regular basis; some of the offspring went to the slaughter house and some, when fully grown, came to the cattle pen to produce more milk.
The owner and the manager grew rich and all seemed well with the farmland. It seemed well when viewed from the perspective of the owner and the manager.
But what about the animals’ perspective? That too was worth at least a passing thought. The animals spent their entire lives in the cattle pen; they provided milk when they were milked; they ate when the fodder was placed before them; they yielded offspring when they were crossed with the males kept separately for that purpose; their children were separated from them the moment they were born; their own milk was not served to them; instead, it went to the kitchens of the affluent in some distant place.
When they were not capable of producing milk they were slaughtered and appeared as meat on someone’s table. The cattle were clearly serving the owner and the manager but what was in for them? Exactly how i would use the parable to recommend some changes in public policy was not clear. It was obvious that he wanted more to be given to those who were labouring hard to produce for those who were getting a great deal from the way the economy was being made to perform. And by 1972 the pendulum had swung to the other extreme. Now it was the turn of the public sector to become the main vehicle of capital accumulation with the complete exclusion of the private sector. It was the time when even Western Europe led by France and Italy were taking to socialism to avert domestic upheavals in response to knocking on the doors by the East European socialists.
The UK and West Germany had become more social welfare countries than any socialist country, with their social welfare budgets accounting for more than 50 per cent of their GDPs. But even before Mrs. Thatcher of the UK and Mr. Reagan of the US came on the scene to change all this, Pakistan’s Army had taken care of Mr Z.A. Bhutto and the pubic sector which Mr. Bhutto had used to launch so many huge infrastructure and industrial undertakings had by early 1980s become in the hands of the then finance minister Ghulam Ishaque Khan a hand maiden of the civil and military bureaucracy.
In the name of accumulating capital and establishing a social welfare state, the public sector minions were looting the nation with both hands and distributed this loot among themselves and at the same time brought the private sector back into the game of making money for themselves as well for the civil and military bureaucracy by investing the resources of the nation while the declared objective of the then military government had also remained the same: making the country rich so that it could become a genuine social welfare state. The country’s economic managers have used the massive fiscal room that has been created over the last three years due to the macroeconomic stability achieved as a result of massive international assistance following our willing participation in the war against world terrorism to design such a rich man friendly budget. But even when we had nothing to make our two ends meet, we had been pampering these very sectors in the hope that as they become rich they would lift the nation as well up out of its poverty. But nothing like this happened.
Those who own these sectors today virtually own Pakistan. Most of them have now expanded horizontally and vertically. Many even have their own banks. But since none of them have been true entrepreneurs who take risks and since all of them with the exception of a few, have acquired their riches by rent seeking, they have never shown any inclination to fulfill their responsibilities towards the society they live in.
Most of the companies listed on the stock exchange except the government owned are almost 100 per cent family properties. They do not believe in spreading their risks. They believe in cutting all kinds of corners to protect the basket from being invaded by the vagaries of market.
Most who have bought privatized industrial units have sold off the land and diverted their assets and closed down these factories or have downsized the workers’ population creating massive unemployment. Many don’t even feel responsible for the well being and future (education, food and shelter) of the families of their own household servants what to talk of establishing schools, hospitals and economic housing colonies for the under privileged at large. They do own costly hospitals and educational institutions, which cater to the needs of only the rich.
So, the bottom line is to make economic policies, which are growth oriented, and investment friendly while at the same time designed so as to create enabling circumstances for the poor to climb out of the bottomless pit of poverty. I’m wondering why this allowance to make decisions out of ‘good faith’ was not available to politicians and civilians who are languishing in jails for misusing an official car while others get away for causing losses in millions?The CJ of pakistan is faching the reference in SJC for misusing the protocol cars. just imagine how pakistani serving and retired army gernals great(pious) man are doing their job for good faith. The NAB law in Pakistan is applicable only to political leaders and civilians accused of corruption. Serving military officers are exempt from it because, it is claimed, the military has its own internal accountability mechanism. "We live in sweet prison because of the manual of the Pakistan Military Law. The new methodology put the estimates of people living below the poverty line in 2000-2001 at 34 per cent as against the earlier estimates of 32 per cent. This figure, the survey states, had been reduced to 23.9 per cent in 2004-2005. Thus, in the four year period from 2000-2001 to 2004-2005, around 10 per cent of the population has been lifted out of poverty. Impressive figures! Habib Bank Limited’s acknowledgment that loans worth several billions rupees owed to more than 11,000 influential people were written off during the last three years,” The bank has claimed that all write-offs comply strictly with its policy, meaning that the theft and plunder of public funds comply strictly with the policy of netting only the people’s representatives, allowing the powerful to break the law.” He added: “The bank’s claim that the names of defaulters have been put on the web is wrong. There are no more than 350 names on the HBL website out of the 11,000 defaulters Development Bank of Pakistan some time last year Balochistan chief minister Jam Mohammad Yousuf had a loan of Rs8million written off by the Industrial earlier year. It has been mentioned that the write offs/waivers by 11 public sector banks\DFIs during the last three years have amounted to Rs23.5 billion, of which the amount of write-offs\waivers granted between January 1 and October 11, 1999 accounted for Rs3.36 billion. The principal amount in these write-offs during the last three years was only Rs 7.6 billion, the balance of Rs 16 billion was accrued mark-up. Most of these loans were very old (10 to 25 years), which were stuck up for at least five years. It has also been mentioned that the names of all the borrowers, whose loans of Rs0.5 million and above were written off have already been published in the annual accounts of the banks for the years 1999, 2000, 2001, and 2002 with complete details.
It is expected be worth about That write-off/waivers of NPLs, according to the State Bank of Pakistan (SBP) criterion, may s 25-30 billion by end-August 2006
Whatever the methodology and whatever the figures, one thing is clear, different methodologies can lead to very different conclusions. In any event, these indicators give us an idea of the direction that the economy is moving in. It would have been useful, if the estimation of current poverty level based on the previously used methodology, even if flawed, had been indicated in the Economic Survey. Since the details of the new methodology are not spelt out in the Survey either, some other facts make the analysis pretty easy. According to the government figures, per capita income has risen from $429 to $736 during the same period i.e. 2000-2001 to 2004-2005. Since dollar to rupee ratio remained almost stable during these four years, one could conclude that per capita income has increased from Rs25, 740 in 2000-2001 to Rs44, 160 in 2004-2005.
Taking into account the official figures of inflation (21.45 per cent), the buying power of Rs25, 740 of 2000-2001 equals that of Rs31, 261 four years later. In other words, the finance ministry says that net increase in the average buying power over these four years has been around 41 per cent. On the face of it, the economy is doing very well. In the last five years the GDP has doubled from a mere $60 billion to $120 billion. Exports have soared to nearly $17 billion from less than $9 billion.
Imports have jumped to $24 billion from about $13 billion. Foreign exchange reserves have maintained a steady level of $12-13 billion from being around a billion or so. And to top it all, the government claims that it has brought poverty down statistically by about 10 per cent. But then why is it that despite the doubling of the GDP and per capita income, the number of income tax payers not gone beyond 1.2 million in all these five years? Why is the economy still largely undocumented? And why despite all the so-called reforms in the CBR, tax evasion is still so rampant? Why has the income inequality increased so much in the last five years? Why has the trade balance gone up to around $10 billion from a mere $1.4 billion in the year 2000? Why has the foreign exchange reserves gone down to the less than six month’s import bill from being equivalent of more than 11 months’ import bill in 2003? The decade of 1990s was the decade of paucity. The leakages from this shrunken cake were also too small. The current decade seems to be the decade of plenty. And the way the economy is being managed, it seems, as if, tomorrow would never come. So the amount being siphoned off also seems to be plentiful. The parliament is too weak to make the government accountable. The celebrated NAB seems to have been assigned just one job-hound the politicians in the opposition who can be a potential threat to the regime. According to WB vice president recently speaking at Punjab development forum April 2007 said rural poverty increased in Pakistan. Poverty become abuse in Pakistan so every one want to become rich likes army gernals. If you need to get permission to visit the BASHTHI DOOR (DHA). Day is coming when civil war will broke out in Pakistan due to population bomb just think how Pakistan people can avert such blood bath
ABOUT WRITER
Usman karim BASED IN LAHORE Pakistan [email protected]
Re: Life of a poor person in PAKISTAN?
In the good old days debt used to be on personal basis and guarantee and one was totally responsible for that. In today's complex, manipulative, greedy and capitalistic economic system how do you expect people to pay their debts when most of the time they never even had the opportunity to use what they borrowed. Just poor decision making on personal and business level giving rise to defaults on loans and personal bankruptcies.
Re: Life of a poor person in PAKISTAN?
Usman Karim/Imno250,
You were asked to explain your position regarding the material you post on this forum.
http://www.paklinks.com/gs/showthread.php?t=253246
You have been found plagiarizing openly and and that is highly unacceptable.
If you continue like this and dont clarify your position before posting further material without any head or tail or proving your authenticity, you may end up losing rights to post as this behavior is strictly against rules. You have also been issued warnings. Consider this a last reminder.
Either contact the Mods and explain or furnish any further articles/posts/threads containing such material with proper details and references.