Turn Around of Failing Economy

Today, on 9^th of Jun 2022; Pakistan is well set on the path of being a failed state, if no concrete corrective actions are taken.  Pakistan’s total external debt stands at PKR 53.3 trillion circa.  As per Monthly Economic Update & Outlook May 2022 by Government of Pakistan Finance Division Economic Adviser’s Wing, current account deficit stands at US$13.8 Billion with Total Forex reserve being US$16.1.  and Inflation touching 13.4%.  In same report following has been concluded under the heading of way forward.

“Pakistan is currently facing several severe challenges: accelerating inflation, high external deficits, exchange rate depreciation, declining foreign exchange reserves and mounting uncertainty. On the other hand, economic growth remains relatively high, but in the presence of macroeconomic imbalances may not be sustainable.

The primary contributors of increasing inflation are the surge in international commodity prices and the massive exchange rate depreciation. In fact, the depreciation of the rupee both against the USD and on a trade weighted basis against the currencies of Pakistan’s main trading partners is primarily reflection of inflation differential between Pakistan and its main trading partners. Further relatively high domestic inflation is compensated by Rupee depreciation. However, currency depreciation itself feeds into higher domestic inflation. In this sense, Pakistan is caught into a vicious inflation/currency depreciation spiral. In the short run a predicament to stop this cycle is to pursue restrictive fiscal and monetary policies, coupled with policies and announcements that restore market agent’s confidence.

In the longer run, Pakistan’s main problems can be solved by designing a credible sustainable future economic trajectory that inspires consumers and investors’ confidence. Economic decisions are based on expectations about the future economic path as well as on the degree of certainty/confidence of development prospects. An important component of such process is supply oriented policies. Pakistan’s propensity to invest is much lower compared to high growing emerging market and developing countries. Accelerating the share of Gross Fixed Capital Formation in GDP would create additional production capacity to meet the increasing demand of consumers and producers. Such supply-oriented framework designed to reallocate the use of national income from consumption to investment expenditures, may be accompanied by suitable demand management policies.”

It is disappointing to see this conclusion or way forward, from government experts and economic gurus. First para starts with a paradoxical statement. In solution it is just jugglery of jargons and rhetoric.   In current situation experts are expected to give specific line of action which would translate into positive economic growth. 

All the wizards of subject and media are criticizing governments act but are not proposing anything subtle solution to get this country out of this financial whirlpool.  Government is adamant to take political millage through budget expense, ahead of upcoming elections. Therefore, no good is expected from them.  In such conditions what is the solution?

On one hand economy is not crumbling but melting.  On the other hand, government has proposed a deficit budget of more than PKR 4 trillion. It plans hundreds of official free Hajj, upgrade of camp offices and list goes on.  In such frail economic conditions, it is planning to allocate a large sum towards free laptop schemes and likes.  They appear to be in no mood of reducing expenses. 

Mere reading of financial summary indicates that the country is virtually in a deficit of 100%.  Total reliance is on borrowing which 14% more then the amount allocated for interest repayment.

There is no simple solution to this.  It is essential that both government and public work, in unison to pull the country out of such dire situation; before people are on the streets and total lawlessness engulfs the country.  Where LEAs loses their worth and 220 million are pitched against a few hundred thousand, out of which most are guarding the elite.  Most important of all is avoiding bank run, which can only be avoided through sensible and patient approach by all the citizens.  It has already been observed that people are withdrawing cash and converting it into USD and Gold.  This practice is devaluing PKR by the day.

Focus  of government in this “Operation Resurrection of Economy” should be on reducing budget deficit and increasing tax net. To start with they should look into the aspect of pay and perks cuts for President, Prime Minister, Ministers, Senators, MNAs, MPAs, Judges, Star officers of Armed Forces and Grade 20 & above civil officers.  Reduction of 10% in all heads of expenditure.  Stop all unnecessary international travels and where necessary bare minimum participants should travel and that too in an economy manner.  No HiFi hotels and motorcades at destinations, enjoy local cheaper food. 

Referring to taxing high salaried individuals mentioned in monthly report; it is quite deceptive as against the actual budget.   Irrespective of high salary threshold, increased fuel and utility charges and devaluation of PKR has effected each salaried individual adversely.  They have lost buying power by almost 30-35%.  Further taxation will be a killer effect whereby their take away home will reduce, while inflation still stands at 13%+ or above.  Contrary to monthly report by Finance division, which proposes budget also, a reduction in taxes for individuals can be observed.  This change of mind appears to be politically motivated in anticipation of any forthcoming elections.

Solution to gather more tax is not taxing those who are willingly or unwillingly paying full tax on their income.  Idea is to increase the tax net.  Let’s take example of “Chai Khanas”.  Most of those are owned and operated by people from a neighbouring country which has been very ungrateful to Pakistan.  They are using infrastructure of this country without contributing a single penny in terms of income tax.  Yes, our police and local civil administration does get a subsistence on regular basis.  Clad in rags and torn shoes operating these chai khanas 24/7; these individuals are paying rents as high as 200,000 per month and almost same or more amount as gratification; yet encroaching footpaths and roads. Many won’t believe but their income is estimated 250,000 to 300,000 per day per establishment, much higher then any of so called high salaried individuals.  Such establishments need to be taxed, which in common terms known as grey economy.

To increase tax net, all transactions above PKR5000 (limit can be set at lower level) be made through banking channel, compulsorily.  In order to make physical transaction more difficult, currency notes worth PKR 500, 1000 and 5000 be removed from circulation.  Bank accounts of all citizens above 18 years should be opened, National Bank can play a vital role, if private banks face difficulty in doing that.  Heavy turnover tax for non-filers be imposed. 

Controlling inflation by increasing interest rates has never been able to deliver desired results.  It only ends up pushing up inflationary pressures.  At the end, effect of interest is always passed on to the end consumer. Instead, interest rates should be reduced and criterion for offering loans for industrial setup should be made more stringent and followed strictly.  Controls should be placed in to negate any advantage taken by people in power corridors, thus ensuring no write off takes place.

The concept of supply and demand is one of the main driving factors in price hike. Measures to curtail price hike due to this particular reason is extremely necessary to keep inflation low. Likewise, capitalistic approach of maximizing margins is another factor in price hike.  Both these factors play vital role in increasing Gini coefficient.  Glaring example is of banks which declare

Currently, government price control mechanism is very primitive and imprudent.  It is restricted to basic food commodity items and subsidy through utility stores at retail level or imposing government defined rates for daily commodity.  This methodology is unsustainable and irrational.  It is a burden for the government in shape of subsidy and loss for the retailer, provided they follow government rate list.  Price control should be done at source to ensure inflation remains under control. This control is not possible unless industrialist/producers are made to comply with bookkeeping laws and restricting profit margins When prices are controlled at source level inflationary pressure can be reduced. Concrete efforts can even take the country into negative inflation.  This in no way indicates a communist or socialist approach, but Islamic approach of fair profit and payments. Capitalistic approach is to hoard money, by few, as the system allows investors to earn unrestricted profits.  Failure of capitalist system started since 2008 and has been fluctuating since then.  World economy will not gain sustainability unless capitalist approach is rationalized and channelized.  As far as Pakistan is concerned everyone has to develop content and adopt austerity.  Each business must lower their profit margins in order to counter inflation.  It is matter of survival which takes priority on saving for future. Inflation is a vicious circle, increase in price of one commodity increases dependent products prices multifold.  Fuel is the ideal example increase in fuel prices increases price of everything and with higher ratio.  It is because product or service provider increases the margin to ensure higher profits and cater for increased expenses in associated area.  This cycle can only be reversed if ALL involved restrict their margin.  They have to convince themselves to adopt survival mode.  A prudent approach indicates increase in crime and lawlessness when have nots are pushed against the wall.  One should not forget French and Russian revolutions.  Peeping back in history reveals that an Estates Generals and Monarchy exists in our political system which is the reason for  economic disaster of this country too.  Seed of antidisestablismentarianism has already been sown, in no time crop will be ready to harvest.

These are some measures which can be taken in short term.  In long term government should look into the aspects of delinking PKR from USD and linking it to Gold. SBP has to build a gold reserve and declare PKR value against Gold.  Excess currency note printing has to be halted and PKR – Gold parity to be maintained at all cost when issuing additional currency notes.  Incentives should be offered for people who bring in Gold for selling to SBP without making international remittances. Share from Reko Diq should be taken in terms of Gold rather then PKR.  This will help increase State Bank gold reserves making PKR stronger progressively.  In not more than two years’ PKR will compete with any of the strong currencies of the world.  This improvement will always be resisted by exporters, but in long run their production cost will reduce and their market competitiveness will be maintained.

Facilitation of taxpayers by offering them incentive like post-retirement medical facilities in commensuration of their past status held and tax amount contributed.  Systems in place at Canada, Germany, Norway, etc can be explored to develop a viable solution for Pakistan. Reducing human interaction while filing and assessing tax returns.  Government has invested heavily in IRIS and yet tax officials want people to personally visit rather than taking advantage of technology to save time and money.

This generation must suffer either way.  It is our choice between IMF or self-reliance. IMF slavery will be for all future generations too, other option will give our future generations a free and prosperous country. Cost is sacrifice of our never-ending race for the seven sins.

 

 

 

Organised Political Fraternity And Supportive Administrative Reforms

 

Strong political system is the essence of any country’s progress and development.  A weak political system leaves the country at the mercy of predators and looters.  In a weak political system, it is easy to manipulate legislature and public office holders, through gratification in shape of kinds, cash or blackmail.  This has happened with Pakistan. Pakistan’s political system has corrupted itself to the core because of vested interests of individuals.   Election are manipulated through influence, power and money.  It is essential to understand underlying reasons for such manipulation.  Is it the desire to be in power corridors or accumulating more wealth through unfair practices? 

 One of the main reasons for ancestral politics and oligarchy in Pakistan’s politics is allocation of development funds and administrative authorities to members of legislative assemblies.  At times, it provides underprivileged, who are elevated to assemblies, an opportunity to change their status of have nots.  Such members not only accumulate wealth for their own self but also for their human deities, who provided them an opportunity reach high offices through party influence. 

Those who are already rich and considered among the elite class, join National and Provincial Assemblies to multiply their wealth.  Use state resources to flaunt  their authorities and power.  To achieve this objective, they allow people under their direct command to indulge into malpractices.

Through bureaucracy’s support politicians bring their dreams to reality.  Thus, all the ends of power, join hands in the business of loot and plunder.

If Pakistan must change its status from developing country to developed country it has to bring major and ruthless reforms in its political, judicial and managerial system. It must remove financial and administrative authorities from the jurisdiction of legislators and devolve it to lower echelons.   An effort by General Pervaiz Musharraf delivered some results; but local governments remained under the influence of political parties.

Political Reforms

To allow full and accountable functioning of local government it is essential to remove sway of political parties in affairs of local government.  This can only be achieved through development of organised political fraternity. An organised political guild will develop an institution like armed forces where training is at the core.  

It is easy to criticise any system; which has been done to the perfection by so called journalist through lip service.   Unless a solution is suggested, all criticism is rather otiose.

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Election of President and Governors

President and Provincial Governors to be elected through direct vote of citizens, respectively.

Criterion

1.       1. Should hold a verified college degree.

2.       2. Should be mentally and physically fit to advice the President. (Medical should be conducted against pre-defined criterion)

3.       3. Should not hold dual nationality or at least three years should have lapsed after surrendering foreign nationality.

4.       4. Should be residing in Pakistan for 7 years.

5.       5. Should be an active taxpayer, if not crossed superannuation age in case of non-businessperson.

A Framework to Organise Political Fraternity.  

1.       1. Emergency be declared.

2.       2. Army be called in to provide support under Article 245 of the constitution to ensure free and fair referendum.

3.       3. President to take charge as caretaker President of Pakistan anticipating envisaged change in political system. Existing Governors to take charge of existing 4 provinces, 5 incase of GB. 

4.       4. President/Governor should select a small council of 6 Technocrats as advisor to run affairs of country for a defined period (One Year).  After completion of one year Presidential/Governor election be conducted and subsequent President/Governor holds the office for 4 years along with selected 6 advisors.  This ends an army of federal ministers, minister of states and provincial minsters.

5.       5. People selected to remain disqualified for life to hold any public office.

a.       Foreign Affairs

b.       Finance

c.       Media Affairs

d.       Commerce and Trade

e.       Election Commissioner

f.        Law

Pre-requisite for Advisors

1.       1. Should hold a verified college degree.

2.       2. Should be mentally and physically fit to advice the President. (Medical should be conducted against pre-defined criterion)

3.       3. Should not hold dual nationality or at least three years should have lapsed after surrendering foreign nationality.

4.       4. Should be residing in Pakistan for 7 years.

5.       5. Should be an active taxpayer.

Qualification for members of UC, DC, PA, NA & Senate

1.  Should be residing in the constituency from where elections are contested for at least preceding three years.

2.  Should be residing in respective province for at least 5 years and in Pakistan for last 7 years.

3.  Should be resident of ward for at least one year and have permanent or temporary address, registered in the same ward.

4.  Should be Mentally and Physically fit to hold seat of respective conclave. (Medical should be conducted against pre-defined criterion).

5.  Should hold minimum of graduate degree duly attested by HEC. (May be waived for UC level)

6.  Should not hold nationality of any other country; if dual nationality previously held, should have been surrendered at least 3 years before contesting elections.

7.   Should be an active taxpayer in Pakistan.

Delimitation

Delimitation of constituencies to be done based on 2017 census results, though controversial. New provinces be made depending upon increase in population whereby keeping maximum population of a province to be between 1-1.5 million.  In the beginning for cities like Karachi and Lahore a one-time waiver can solve the problem; later these cities can also be bifurcated in further provinces. 

A pseudo structure of Provinces can be drawn from existing divisional administrative structure, based on Census 2017.  Each province to have maximum population of 11-15 million. To simplify the process initial demarcation of provinces can be done based on current divisional population

 

1.  Re-delimitation of Union Council, District and Province should be done for better administrative purposes.

2.    Delimitation be done based on 1000-1250 people per ward. Administrative units having thin per Km² population may comprise of 10 villages per Ward. 

3.   One representative from each ward be elected through direct vote i.e. one representative per 1000-1250 people, in other words 1 person per 100 -125 people will make access of public office representative easier for the people of constituency. No democracy can be perfect, nevertheless this system will reduce margin of error to minimum. Such type of system also provides an opportunity to representative of each Mohlla to participate in country’s politics.

4.   Each Union Council to have 10 wards.

5.   Each district to have 30 UCs

6.     Each UC to elect one member among elected candidates to act as UC representative in District Council. Thus, District Council to have 30 members.

7.    Each Province should comprise of 40 districts represented by two members from each district council in Provincial Assembly.  These two members be elected by members of DC from within. These representatives of DC will act as direct link of district in Provincial Assembly.

8    Each Province to elect 5 members from within to represent the province in National Assembly. National Assembly be responsible for accountability of President and appropriate legislation.      

All provinces to have equal representation in NA. 

This will ensure that each decision taken in NA or PA is fully supported by the lowest level of political hierarchy, as NA or PA members would be required to vote after approval of respective lower.

Note: Each institution to elect a chairperson/Speaker and Deputy Chairperson/Deputy Speaker from among the group members.

Electoral Reforms

1.       President and Governors to have maximum of two terms.  After two terms, becomes ineligible for contesting the election.  Governors may contest election for President after completion of two terms.

2.       Candidate for UCs should be allowed to contest election from only one constituency.

3.       Should be residing in the constituency for last three years and will should continue to live in same constituency for the term in public office.

4.       Term for public office in NA/PA should be 4 years.  Thus, paving grounds for fresh blood to re-energise the system.

5.       Consistency in national policies can only be attained by avoiding not changing PA/NA in totality. Therefore, first NA/PA should have 25% members retiring after each year. Subsequent replacements to have full four years, unless impeached by their own electoral college, demise, voluntary retirement or medically unfit.

6.       Maximum of two tenures be allowed to holder of public office, unless an elevation to higher house takes place; whereby another two terms be allowed.  If no elevation to upper house within two tenures would qualify the candidate to retire from politics.

7.       Any seat falling vacant to be filled as fresh tenure of 4 years. Process of filling the seat remains bottom up.  Thus, no requirement of conducting general elections.

8.       Institutional reforms should be done to make each institution independent of political influence.

9.       Civil servants to provide administrative support for municipal services to Union councils.

10.   Reserved seats be abolished.  Women and minorities to enter political fraternity through normal channel.

Tenure and Terms of First NA/PA

First National Assembly to be Constitutional Assembly having a tenure of 4 years. Its sole duty should be to rewrite a constitution free of bias, nepotism, elite pack syndrome and obstruction to justice. 

Reforms in Bureaucracy

State institutions like armed forces and civil services were considered among upright and honourable jobs.  Unfortunately, over eons the reputation has tarnished, many citizens do not hold a very positive image of these institutions. Between the two, armed forces, still holds better respect, relatively. Bureaucracy has turned into total disappointment. Though, Armed forces are still maintaining some stature.

Reason for civil servants going astray, point towards our political system.  Postings, promotions and benefits are being controlled by politicians or at least under their influence, has made bureaucracy subservient to political elite.  Due to plurality of command bureaucracy is involved in scratching each other’s back.  Thus, whole system gets effected adversely.

To keep bureaucracy on track it needs a personnel management system like armed forces.  Where check and balance remain under supervision of one single commander rather than politicians.  Bureaucracy should be kept independent like armed forces with clearly defined duties, yet under strict departmental scrutiny.   Civil servants’ protection law needs to be amended and brought inline with the laws of armed forces.  Court protection against dismissal through departmental action is one of the reasons of impunity in behaviour of civil servants.  Authorities needs check and balance, through strict accountability against any misuse. A robust and fair internal accountability system can ensure efficient and right deliverables by civil services.  It is civil services duty to look after day to day affairs, take decisions in the interest of country, administration, maintaining law & order and ensure all civic facilities are available to common man.

Judicial Reforms

Law has been viewed as a noble profession, where bar and bench together endeavour to dispense justice.   World history is witness of great men and legends like M A Jinnah, Allama Mohd Iqbal, Gandhi, Nelson Mandela, Abraham Lincoln and many more, who changed the course of history; these were all officers of law.  For them dispensation of justice was essence of life.  Unfortunately, this profession has turned itself into a fraternity which protects delinquents in lieu of monetary benefits. Misleading of evidence has become hallmark of success.  Judges sell conscious and prove that justice is blind.  Justitia is blindfolded to ensure justice across the board, but now adays it seems that this blindfold is towards commoners with inclination towards elite and powerful.   Power which is mustered through partnering with criminals.

Most of the career judges in Pakistan are those who were average and could not make their place among successful lawyers.  Though, induction goes through a process of testing and interview by senior judges, but quota system, political appointments and nepotism has provided an opportunity to average lawyers making their way into the most important pillar of state. Have nots get the unchecked power, which is subsequently used to improve lifestyle. This serves objectives of corrupt elite; thus, complete system of justice is plagued and justice to commoners is denied or delayed.  A very common saying “Justice delayed is also justice denied”.  It is depressing to see innocent people spending their lifetime in prison, until their exoneration is announced after their death. Malpractices in Pakistan’s judicial system is keeping it among tail enders in international ranking.

Judicial reforms are essential for correct and fair dispensation of justice.  And the buck stops at correct induction with continuous professional training. A system like armed forces is needed to induct, train and retain judicial officers. The worst enemy of justice, the Quota system, needs to be abolished completely and lateral induction of judges should end forever. A systematic career growth for competent judges will help in improving deteriorating judicial practices.  It goes without saying power corrupts and absolute power corrupts absolutely; robust accountability is imperative to keep a check on unbridled power.  Sanctity of courts can only be established by accountability of judges.  They should be questioned, interrogated and held accountable for any incorrect or unfair orders passed.  Unless, judges are made accountable for their wrong judgements, system will not deliver desired results.

Economic Impact of COVID-19

Human race is a resilient specie with a  strong survival instinct,having gone through many wars, pandemics and disasters.  Following the nature’s rule of survival of the fittest, humans have not only survived in all situations but also ensured lesser space for other living beings eventually causing  many species to extinction.

COVID-19 has provided human beings yet another opportunity  of survival.  Following  Maslow’s theory, in all this panic and chaos, only thing which went short on supply was the basic necessity that is the  food.  People do not seem worried about closure of airports, luxury brands, cars and fine dining.  Prices of non-essentials have plunged while trillions of dollars have just been wiped off global economy. So far, it is  only the basic food commodities that maintains its importance; as it can allow long periods of isolation without starving.  Governments’ main concern today is health care for the sick and food for all.

Outcome of this outbreak is yet not known, neither a cure has been found.  Even the most developed countries are unable to give a timeline whereby their own country can be pulled out from the whirlpool of this mutated virus. Apparently, human’s own immune system is initiating the healing process and doctors are supporting by managing the patient. 

Since the virus  first detection in December 2019, more than 800,000 people have been infected with this virus and the number continues to grow.  Deaths have crossed more than 50,000 and counting is still on. It is still difficult to fathom the extent of morbidity and mortality in in coming days but one thing appears to be more certain that it will take a few months to recover out of this health crisis  However, economic effects of this fiasco will take a much longer time to recover.

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World is already witnessing crash of stock exchanges, intangible money in the stocks have simply been wiped off the books.   Likewise, many businesses addressing luxurious needs have come tumbling down.  Economist are predicting joblessness to touch 25 million figure, just in USA. As COVID-19 is  spreading fast and unleashing its influence to immobilise the smartest living creatures on earth,  estimates given earlier seem to  be obsolete.  Leading airlines of the world are shedding staff to the tune of thousands.  Revenue losses only in this segment are touching US$1 trillion mark.  Some airlines have already announced pay cuts or sent staff on unpaid leave.

When a person´s health and livelihood are the most important factors in one’s day to day life, need of luxurious apparels holds lesser importance .This will eventually lead to lifestyle cuts and reduced consumer preference in spending on these items.  Thus, a recession in apparel industry is eminent,  which is likely to affect countries like India, Bangladesh, Sri Lanka, Pakistan etc., as export orders will reduce and it will become unsustainable for small manufacturing concerns, resulting in reduction in manpower or total closure of the units. Industries supporting apparel industry will have ripple effect.  Many brands have already announced online sale for their new arrivals and put a cap on further orders. Likewise Energy sector will face serious challenges owing to falling oil prices. It will have to take concrete measures to reduce production cost, which may involve review of human resource cost.  

With increasing unemployment and pay cuts, disposable income for extravagances and frills will reduce considerably.  Governments will be more concerned with food security leading to promotion of agricultural produce. Strategic food stock levels will be increased, exports for value addition will reduce.  In overall terms economy of those countries capable to produce their own food will revive earlier than those dependents on others.   Companies involved in production of value-added food and consumer products will take longer, to recover from this economic crisis.  Luxury industry will be the tail ender in the game of revival.  

If this ordeal continues for another 6 months , the world may witness grave consequences; eventualities that we are  not prepared for. A financial crisis occurred in 2008 resulting in fall in oil prices and cities like Dubai became city of empty skyscrapers. To date many high rise, remain without occupants, though not publicly admitted.  The domino effect was halted by pumping money into the system from different corners and lowering interest rates, etc.  It was all because of a single factor of high mortgage risks. This time situation is altogether different, it is not primarily  a financial crisis, yet has brought the world to a standstill, well almost!. It has brought down oil prices all the way down to US$20 per barrel and the journey further downhill will not be a surprise.

In the developing scenario, have nots may develop criminal mob psyche.  Some isolated incidents that have taken place across the globe, indicates that if something is not done soon to provide basics for under privileged, an irreversible chain mob psyche is likely to begin. Economists are forecasting losses, rich are less worried at present due to accumulated wealth, whereas media is creating chaos to save its own jobs, but and but with all capitals.  NO ONE WILL BE SAFE.

Question arises as to what the solution can save millions of jobs and prevent a total damage to wheel of global economy?

Take a break and slow down!

Adopting simpler lifestyle will be the key to ensure minimum unemployment and sustain maximum businesses. A cut in earning must be taken by all individuals and trades to help people survive.   Businesses will have to re-think their pricing and profit strategy. While People will have to re-consider reduction in their monthly incomes.  The world will have to take measures to immediately bring down costs matching a decade ago and so the remunerations.  These steps may not be very lucrative, to start with, but will help avoid anarchy of civil wars and lawlessness.  It may cause discomfort to  the privileged class but will keep the doors open to silver lining. 

This is the time each and everyone should rise above own self and think selflessly.  Otherwise if banks start filing bankruptcies, whatever is accumulated will vanish in few seconds.

A time to re-think!

Sustainability

Introduction

Sustainability has two definitions “the ability to be maintained at a certain rate or level.” and “avoidance of the depletion of natural resources in order to maintain an ecological balance.”  Though a single word, yet engulfs a world of aspects and factors, when it comes to global issues and concerns.  In the modern world sustainability has become a very important subject; companies are concentrating on different aspects of sustainability, including but not limited to Asset, Financial, People & Culture, Security, Compliance, Communication, Risk and Environment. Responsible companies are diverting efforts to ensure sustainability, with major focus on environment.  Recyclability has become paramount. Many international brands have already incorporated in their 2020 goal, to procure from sustainability compliant vendors.  This poses great threat to countries like Pakistan, which needs growth of exports, to cater trade deficit.

Electricity Lifeline for Developing Countries

Pakistan is a developing country and has ever growing appetite for electricity.  Despite high electricity prices electricity is not available, even in big cities, for long periods of time.  It is estimated that tens of thousands of villages in Pakistan will not have electricity for decades.  In order to allow Pakistan a progress at galloping pace and reduce urban migration it is important that modern facilities are extended to smaller towns and villages. Currently, Pakistan’s 79% of electricity comes from most expensive source of Oil and Natural Gas.  11% from hydro, 7% from Coal and 2% nuclear source. Pakistan’s NG resources are already depleting; thus the country is resorting to import LNG. Another drain on forex reserves.

Waste a Threat to Environment

It is estimated that about 48.5 million tons of solid waste per year, is generated in Pakistan.  It is increasing at the rate of more than 2 percent per annum. Like other developing countries, Pakistan lacks waste management infrastructure, creating serious environmental problems. Most municipal waste is either burned, dumped or buried on vacant lots, threatening the health and welfare of inhabitants. Thus, a serious threat to sustainability. According to the Government of Pakistan, it is estimated that 87,000 tons of solid waste is generated per day, mostly from major metropolitan areas. Karachi, Pakistan’s largest city, generates more than 13,500 tons of municipal waste every day. Similar challenges are being faced by all major cities on how to manage urban waste. Bureaucratic hurdles, lack of urban planning, inadequate waste management equipment, and low public awareness contribute to the problem. Incinerators being operated by local governments are of old technology and are seriously damaging surrounding vegetation and trees. Consequently, adding to the agony of people, environment and businesses.

Waste to Energy

Waste to Energy (WET) is a tested concept of utilizing solid & municipal waste for contributing to country’s economy and developing bioeconomy.  Pakistan can effectively use its waste to reduce certain imports, supplement energy production, improve environmental conditions and safely get rid of daily waste produced.

Though garbage transportation to landfill should not cost more than US$6-7 per ton; however, Sindh government is spending to the tune of US$25 per ton of garbage removal, which is dumped at landfills.  Only 40% of the garbage is being transported to landfill costing PKR54 million a day, almost PKR20 billion a year. Undoubtedly garbage heaps continue to increase at the rate of 7000MT per day on streets of a city once known for its sophistication, lights and lifestyle.

Likewise, sewage waste is being dumped in sea and rivers effecting marine life and water quality of rivers.  Adding to environmental damage and negative effect on economic activities.

Waste is a Goldmine

It is need of the hour to deliberate on solutions to such gigantic issues.  Despite lot of water having passed under the bridge, much can be done to mitigate the situation. Its time, instead of paying for garbage removal, revenue for picking up the garbage should be generated.

It is estimated that 1MT of solid waste can generated 500KWh of electricity.  Considering 50% of solid waste generated daily from Karachi, a potential exists to generate 3500MWh of electricity, with zero toxic emissions.   Such type of power generation is already being done in countries like Sweden and Singapore, since long. Applying same model to other cities of Pakistan can provide substantial amount of electricity each day.  Pakistan has an estimated Municipal waste of 87,000MT per day, means a potential of 33,000MWh.

Sewage waste for Karachi only, is to the tune of 450Mgd liters approximately 1.7 billion liters a day.  This waste can be used to produce fertilizer, methane and clean water.  Similar models in other cities can help to supplement rivers with clean water or can be used for irrigation.

How to Achieve the Objective

Currently most of the waste in country is being handled by government department. No need to mention their efficiency, corrupt practices and exorbitant expenditures.  Therefore, tasking government officials to establish such units would be creating more parasites to government exchequer. Furthermore, government exchequer is already under heavy pressures, thus cannot afford to invest in such ventures.  Only solution is to involve private sector, facilitating them to establish such units and run it on commercial basis.   Unfortunately, private sector comprises of influential and nobles, who grab such opportunities and indulge in exorbitant profiteering.  At the end money is siphoned into few pockets and common man bears the brunt.

Solution to this problem is making a listed corporation.  Pakistan’s history is witness to such state-owned corporate having succumbed to political interference, became hostage to employees, suffered red tapism at the hands of bureaucracy and became burden on government exchequer. 

There is no problem for which a workable solution cannot be developed; provided there is a will.  In order to achieve desired objectives such projects need to be free from bureaucrats, profiteers and politicians. It can be achieved through floating IPOs to public; let people of this country invest in the country and reap the benefit of dividends.  Now the question of controlling shares will crop up.  It can be resolved through an independent board of governors through PICG enlisted directors.  Board of governors control the organization through CEO, having smart objectives. Such models are being run by many companies listed on different stock exchanges of world.  This means no single person or family owns majority share, to control the company.  Government will only have to fund for a team of two to three people, who can develop a bankable feasibility for the projects and land for said projects, which may be leased to power generation company and cost apportioned to P&L of individual projects.  Amount spent to develop such feasibility would be a fraction of what government (Federal & Provincial) are paying for removal of garbage each year.

Well defined rules of business can help in reducing the risk of such corporate being hijacked by opportunists and from becoming a parasite on public resources. Likewise, members of board can be restricted to have any stake in the organization and may also be restricted for being concurrently on multiple board of governors of such organisation. The concept can be evolved, refined and implemented to negate bureaucracy, politicians and profiteers to take advantage of their positions; even the workers. 

Conclusion

World has moved ahead, those who did not remain with fast pace of global development have lagged.  And those countries are still developing or underdeveloped.  Out of the box solutions should be explored to revive economy of the country and pick up momentum to compete in highly competitive global environment.  Reliance on local production and jobs generation is the only way to sustain sovereignty.

Plight of Megacities

Plight of Mega cities

Mega cities of the world are source of tourist and business attraction. People all around the world frequent it not only for business purposes but also for leisure.  There are 35 megacities in the world out of these two are in Pakistan, namely Karachi and Lahore. Karachi being 11^th and Lahore at 29^th position.  Though this is an accepted list for 2015 as per Wikipedia, but fact cannot be ignored that Pakistan had last reliable census in 1998.  Therefore, it can be safely assumed that population considered for megacities of 2015 is an assumption.  As per general perspective Karachi has a population of more than 25million and Lahore is touching 17.5 million.  In consideration with these figures Karachi should be within first 5 of the world and Lahore would stand above 20^th position.

What is a megacity? As per the dictionary a metropolitan having a population of 10 million.  Is population the only factor which qualifies a city to be megacity? Most of the people would certainly respond in negative.  In today’s world a megacity is the city which not only has population of more than 10 million but also has the infrastructure to support this population.  A look at Karachi and Lahore from perspective of infrastructure among the top 35 megacities of world would certainly depict these in last five of the world.

Globally infrastructure of megacities are reinforced and upgraded continuously to support population; their need to commute and right to healthy living conditions. When a city becomes unmanageable, new city is developed and connected to the megacity through high speed mass transits.  Islam also advocates development of new cities with increase in population.

Both these megacities are facing constantly increasing population which in turn is increasing burden on limited resources and infrastructure. Unfortunately, government is charging large amounts under the name of commercialization fee, which in fact should be spent on boosting underground infrastructure of the city. Instead of addressing these issues ruling parties take care of their political objectives of plundering. 

Everyday hundreds of people move to these two cities, never to return back.  This influx of internal migration should be stopped to save these cities.  Not by force but by choice and to activate this option it is essential that smaller cities are developed.  Development in smaller cities and towns will attract these people back to their hometowns.  A developed city will automatically generate job opportunities, which will in turn help to improve GDP.  

Budget Review 2010

Budget 210 Review

Pakistan if facing a budget deficit of 163497 Trilllion for which it has its begging bowl extended to IMF and banks.  How many times does a common man look into the figures of budget and analyses what is written in between the lines. Media talks about corruption, but is unable to pin point exactly where money is being bungled. People talk about kickbacks, but no one has been able to identify the real source where these concocted figures brewed.  Let’s take a look into some demands submitted by different government department for budget 2009-10.  No wonder Pakistan is progressing so fast on the ladder of corruption in Transparency International Ratings.

Liver Transplant Centre Project Shaikh Zayed Hospital has been allocated a grant of PKR65.25 billion.  An amount of 20 billion has already been spent in year 2008-09.  Construction of second floor on current Shaikh Zaid Hospital building has already consumed PKR218,8 billion and an amount of PKR300 billion has been allocated in 2009-2010. This means a total of PKR604 trillion has been allocated to civil works.  An A class construction costs not more than 2000-3000 per square foot. Giving margin of some imported fixture, even if double cost is considered equates to covered area of 100 million square feet. Indicated covered area can be constructed on a plot size of 3345 X 3345(yards) or 3.1X3.1 (km)

National Reconstruction Bureau under the head of good governance support has demanded an amount of PKR 5.8billion for purchase of transport this amount is equivalent to 1160 vehicles having price tag of PKR5 million each.  It also needs computer equipment worth PKR460 million equaling to 3067, HP top of the line laptops with 15” LCD, camera, biometric security, etc.

Following figures are eye openers and makes us think about efficiency, sincerity, patriotism of politicians and bureaucrats. These figures tell us as to how pubic money is looted and plundered in broad day light.  Figures given below are just a few examples.  These are mainly restricted to purchases and civil works; maintenance civil works, operational expense and HR cost are other than these amount.  Those interested in knowing further details may consult original document which is 1000 pages long. Another document comprising 2000 pages further enriches the knowledge about how justice is done to public exchequer.

Don’t miss the last portion. It has something which everyone has been looking for.

Project	Item	Amount	Remarks
Construction of 36 Cat IV apartments for customs officers at kemari	Building and Structure	5 billion	If custom considers buying their officers 300 yards bungalow in defence they will save 4.6 billion
Construction of 50 Cat V flats for customs sepoys at kharadar	Building and Structure	6 billion in addition	They should buy one of the new buildings with 50 apartments covered area more than 1600 ft with lift generator and still they will be able to save 5.7 billion
Building of 18 H type quarters MM Qureshi Complex Karachi	Building and Structure	3 billion	They should consider buying 500 yards signature villa in defence and save 2.95 billion
Restructuring of Pakistan Institute of Trade and Development M/o Commerce Islamabad	Computers 041207-A092	PKR70 million	560 top of the line lap tops
	Purchase of Transport 041207-A095	PKR200 million	Equal to 111 Honda Civics
Trade and Transportation Facilitation Project	Computer 041214-A092	PKR600million	Equal to 4800 top of the line laptop computers
	Purchase of Transport041214-A095	PKR1.5billion	Equal to 835 Honda Civics
Creation of Domestic Commerce Wing MoC	Computer Equipment	PKR718million in addition to 180million	Equal to 5744 top of the line laptops
	Plant and Machinery	1.16billion in addition to last year 340 million	Fail to understand what plant and machinery is needed in office except for A/C and telephones.
	Furniture and fixtures	1.5 billion in addition to 100 million last year	Equal to 12000 top of the line laptops
Exhibition Hall Lahore	Computer Equipment	1,5 billion	Equal to 12000 top of the line laptops
School of Fashion Design	Consultancy and Contractual Work	5billion	Are we making something better than Parish
	Building and Structure	119 billion in addition to 62 billion last year	50 million sq ft of covered area
	Purchase of Computer Equipment	5.5 billion	Equal to 44000 top of the line laptops/ server class machines
	Purchase of transport	1 billion	Equal to 555 Honda Civics
	Plant and Machinary	16.5 billion in addition to 2.5 billion last year	????
	Purchase of furniture and fixtures	15 billion in addition to 3 billion last year
Enhancement of Training Capability of CMTI Phase IV Isb	Building and Structure	50 billion	8,333,333 sq ft of covered area just for enhancement of existing facility
Ministry of Culture	Subsidiary Services to Education	326 billion in addition ot 152 billion last year	Now we know where our educational funds are going. In cultural shows.
	Civil Works	144 billion	24,000,000 sq ft of covered area
Establishment of NCC performing arts	Building and Structure	3 billion
Pak China Friendship center	Building and Structure	55 billion
Benazir Monument	General Expense	16 Billion	EXCUSE ME
Conservation of Hiran Minar	Building and Structure	30 billion in addition to 10 billion last year	I guess we can construct more than one Hiran Minar in this amount.
Renovation of Iqbal Manzil	Building and Structure	14 billion	Allama Iqbal must be cursing the day he dreamt about Pakistan
Master plan for preservation, upgradation and rehabilitation of  Quaids birth place	Building and Structure	3 billion	Just for master plan.  Has anyone seen the size of Wazir Mansion.
Institutional Strengthening and efficiency enhacement of economic affairs div total 15.8 billion	Computers Purchase	342 million in addition to 834 billion last year	Project should be renamed Institutional Strengthening and corruption enhancement
	Purchase of Transport	950 million in addition to 1.795 billion last year	Equal to 1575 Honda Civics
	Furniture and fixtures	220 million in addition to 450 million last year	No comments. Some designer furniture maker must be having a good time
Establishment of Fed Govt Model School for girls PM staff colony Isb	Building and Structure	18 billion in addition to last year 10 billion	Lets hope that school furniture is as good and lavish as PM secretariat is.
	Plant and Machinery	1.225 billion
	Furniture and Fixture	1.8 billion
Establishment of Cadet College in Pasroor	Consultancy and Contractual work	3 billion	Do you think it will come up.
	Purchase of Transport	10 billion	Each cadet will be issued with a Suzuki Mehran
Cadet College Jafarabad	Consultancy	5 billion in addition to 1 billion last year	Having institutions like PAF College, Aitcheson, Hasanabdal, Petaro and we still need consultants to plan a Cadet college in Jafarabad
	Purchase of Transport	5 billion	Again cadets will be lucky to get one Suzuki mehran on kit book.
	Civil Works	40 billion
Cadet College Noshki	Purchase of Transport	5 billion in addition to 5.57 billion last year	There are a couple of more cadet colleges planed in the budget
	Civil Works	71 billion	There are a number of cadet colleges budget for 2010
Additional Transport Facilities in Fed College of Education H-9 Isb	Purchase of transport	9.865 billion	This is an excellent government which is planning to issue individual motorcycles to each college student. May be they consider mobile phone next year
Upgradation of Knowledge Resources of National Library of Pakistan	Purchase of Computer Equipment	2.250 billion last year	They can issue 90,000 atom notebooks in this amount
	Furniture and Fixture	500 million in addition to 750 million last year	Probably the facility was not having any furniture in the past
Facilitation Coordination and Monitoring Mechanism for implementation of education Sector Reforms	Purchase of Computer Equipment	100 million in addition to 25 million last year	To monitor they need 2000 desktop computers.
	Gifts and Entertainment	100 million	EXCUSE ME how does giving gifts and entertainment improve monitoring.  Column of entertainment and gifts with high numbers is in every sub-demand
Education for all provision for missing facilities to primary and elementary schools	Purchase of Transport	16.8 billion	Lucky students
	Building and Construction	1.934 trillion Oops!!!
Capacity building of teaches (Quetta)	Purchase of transport	21.9 billion	Are they issuing them one Honda Civic each
	Purchase of Computers	5.7 billion	225,000 Acer Atom notebooks will be issued to all the teachers attending the capacity building classes and one complimentary for their spouse.
Expansion of Customs Guest House H #43/B Lalazar Karachi	Building and Structure	31 billion	They should consider abandoning the idea as they can buy 125 houses of 500 yards in defence for their guests.
NAPHIS strengthening of quality and inspection services	Purchase of computer	700 million in addition to 215 million last year	They have decided to issue computers to inspection companies as well.  This way their capabilities will further enhance.
	Purchase of transport	3 billion in addition to 3.2 billion last year	One Honda Accord each for CEOs and GMs of inspection companies
	Purchase of plant and machinery	36.545 billion in addition to 54.39 billion last year	They must be planning to establish some high class nuclear lab.  A high end analytical lab cost between 0.5 -1 billion.
Establishment of Fed Program Mgt Unit	Purchase of transport	1.6 billion in addition to 1.318 billion last year	Crazy !!!
National Agricultural Land Use Plan	Purchase of Computer Eqt	1.5 billion in addition to 550 million last year
	Purchase of Plant and Machine	1.5 billion in addition to 150 million last year
	Furniture and fix	400 million in addition to 270 million last year
Improvement of Nutrition through primary health care	Purchase of transport	1.5 billion
Access to Justice Program	Computer Equipment	300 million in addition to 1.31 billion last year	We have wasted a loan of 350 million dollar in buying computers and accommodation for judges.  Yet 80% of the judges do not know how to operate computer.  Court has to give them an extra hand to us that.  They are authorized one computer in office one laptop at home and a free dsl connection.
Pilot Project Electronic Govt	Computer Equipment	4.6 billion in addition to 2.1 billion last year	This is in addition to a whole lot of budget demanded for e-govt. and separate demands by each department for e-govt
Upgradation of PPMI Phase II	Building and Construction	234.61 billion in addition to 178.702 last year	No comments
	Purchase of Computer Equipment	604 million in addition to 304 million last year
	Plant and Machinery	600 million in addition to 350 million last year
Establishment of Environment Section in Planning & Development Div	Purchase of Transport	2.7 billion in addition to 2.7 billion last year	This amount is just to establish a section in P&D Div
	Purchase of computers	102 million in addition to 52 million last year
Social Service Medical Project Agency HQ Bajor	Purchase of Transport	645 million in addition to 470 million last year	Bajor will have a whole brigade of ambulances
	Plant and Machine	155 million in addition to 20 million last year	Probably a full fledged by pass capable operation theater
SSM HQ Landiikotal	Purchase of Transport	645 million in addition to 470 million last year	There are a number of more such HQs in the plan.