Pakistan Shinning I - Propoganda or Reality

#17 by bulleya,

This was anticipated for some time. It had been known that this year the decision will be made whether Pakistan will be governed for all times by the Military formally, or by civilians. I think that decision has been made today.

Many key issues will go before the courts soon, the first being whether the same assembly can elect the president twice or not. The CJ could not be relied upon after the steel mills, basant, disappeared persons etc as well as several suo-moto actions. On top of all that he said that the ``Judiciary should be free`` in a recent speech thereby implying it is not at the moment. So ...

If the Supreme Judicial Council exonerates him, there`ll be martial law and the constitution either suspended or abrogated. If it doesn`t, all will be fine but Rana Bhagwan Das will not be CJ. This timing was obviously picked to avoid making him acting-CJ, travelling out of the country.

As for the charges against him, these remind me of the charge against Ghulam Safdar Shah (one of the dissenting justices in ZABs appeal) of a forged matriculation certificate. CJs son was already a section officer in Quetta and was moved to the Police on deputation. As for demanding protocol, it was his right and fully in line with the dignity of the office he held which is second only to the president, which he had wanted to make sufficiently clear.

A sad day indeed. I think perhaps the darkest day in Pakistan`s history. The Superior Judiciary has today been trampled underfoot.

capt clueless: wasn`t shahid javed burki one of your favorite writers? apparently the man whose opinion you hold in high regard thinks Pakiland`s economy only seems to do well when it`s being someone`s female-of-the-canine-species....

Difficult times ahead

By Shahid Javed Burki

EVER since its birth almost 60 years ago, Pakistan’s economy has been on a roller-coaster. It does well when foreign capital flows become available to the country. This happened in the first seven years of President Ayub Khan’s tenure when America poured in economic and military assistance into the country. The consequence was a pick up in growth with the rate of increase in GDP improving to more than 6.5 per cent a year.

In the first post-independence decade, the GDP had increased by only 2.7 per cent a year. The American flow of money was in return for Pakistan’s participation in the defence pacts sponsored by the US to contain the spread of communism to Asia. America’s help stopped after Pakistan went to war with India. It resumed again but at a much reduced level.

In the 1970s, Pakistan isolated itself from the West first by initiating military action against the secessionist forces in East Pakistan and then by opting for an independent foreign policy. Under Prime Minister Zulfikar Ali Bhutto, Pakistan built strong relations with China, a country that was out of favour with the United States.

Accordingly, Bhutto’s Pakistan was not a favoured destination for foreign assistance. His socialist policies which led to the nationalisation of large scale industries and commercial banks were not popular with such development institutions as the World Bank and Asian Development Bank. They also reduced the amount of assistance provided to the country. There were other reasons for the economy’s poor performance during the Bhutto period, but fall in foreign flows played an important role. The rate of growth in GDP declined to only 3.9 per cent in 1971-77.

Pakistan did not immediately return to favour following the demise of Bhutto’s regime. That happened in 1980 following the invasion of Afghanistan by the Soviet Union. Once Pakistan signed on as a very active partner in the American effort to force Moscow out of Afghanistan, foreign flows started in large quantities once again. That led to a pick-up in GDP growth; it increased to 6.5 per cent a year. But the flow of American money began to dry up again once Pakistan’s job was done and the Soviet Union vacated Afghanistan. In 1989, President George H.W. Bush failed to certify that Pakistan was not engaged in developing a nuclear bomb. That certificate was a condition of continuous American support. In its absence, US aid stopped flowing.

In terms of foreign capital flows, the 1990s were a difficult period. The decision by the government of Prime Minister Nawaz Sharif to follow India and carry out nuclear tests in May 1998 resulted in western sanctions being imposed on both countries. Once again, there were other reasons for the slowdown in economic growth but a decline in the availability of foreign capital was an important contributing factor. The rate of GDP increase declined to 4.7 per cent a year in 1988-99.

The military government that took office in October 1999 had to wait for two years before Pakistan gained favour once again with the West, in particular with the United States. That happened immediately after the terrorist attacks of September 11, 2001, on the United States. Large amounts of foreign assistance began to flow into the country after General Pervez Musharraf pledged his full support for the American war against terrorism.The economy benefited from the opening up of the aid tap. America also helped by easing Pakistan’s debt burden. The rate of GDP increase began to pick up in 2003. For the 1999-2006 period, I estimate GDP growth at 5.7 per cent a year. The conclusion from this quick overview of the performance of the economy over the last 60 years is obvious: there is a direct relationship between Pakistan’s economic performance and its foreign policy.

#17 by bulleya on March 9, 2007 6:41am PT


the musharraf govt. has picked up quite a few people - mostly in its efforts to please the usa in its GWOT


So you have mushy picking up pakis and US forces picking up pakis from paki soil...

you have US jets bombing the tribals on paki soil and the PAF jets bombing the tribals on paki soil...

it`s even funnier...the dems are threatening to withhold the F-16s unless mushy bends over even more...and mushy is having to beg for the F-16s that, because of some special provisions, can only be used to bomb the tribals...

Re: # 12
Sir, in most cases you don`t need a degree to get a call-center job as long as you can speak decent English and have some confidence, and 15,000rs a month is not much hardly enough to support 1 person and definitely not enough for a family (that is if you want to enjoy a middle class lifestyle)

#12 madaniji, things are not this rosy in india. in india, an MBA is a minimum qualification for a job on which you can live outside your parents house. bcom can get a call center 15000 job but most bcoms dont and are found peddling credit cards outside big-bazaar for a paltry commission. even an engineer from one of the zillion engg colleges unless first-class (preferably distinction) will be happy to grab a IRS 5000 job selling auto-parts in dusty towns travelling on a 2-wheeler. so while anyone with any competative talent is finding jobs, a bcom second class with a minor in gujrati still has to work in his uncles saree shop.

Re # 17
Bulleya,
you forgot to mention the corruption cases against this judge. You also forgot to mention the abuse of power in getting his son in the poilice. What do you want Musharaf to do. Sit there and let the dacoits lot your country like Bibi and Nawaz did. Grow up - dude and make a valid point by staying neutral.

Large increases in common stock and real estate valuations occured in most emerging markets during the period 2003-2007. These valuation increases were a function of global liquidity spurred by low real interest rates in the US and Japan, lower risk premiums on all risky asset classes (including risky asset classes in the US), and capital flows to developing countries.

interesting news.......

musharraf just had the chief justice of pakistan put under confinement....a case has been raised against the chief justice by musharraf.........and now the cj`s colleagues are going to hear the case......

another defining moment for pakistan`s judiciary.....usually when judges are asked to hear a case against their own colleagues, they break ranks and side with the executive (traditionally it is the punjabi judges who are reputed to do that, while the non-punjabi ones tend to take a stance).......nawaz sharif vs. sajjad shah being an example........

......this cj has been taking on the executive for a while......his last stance being the release of individuals that have been picked up the musharraf govt., without trial.......the musharraf govt. has picked up quite a few people - mostly in its efforts to please the usa in its GWOT.......these individuals do not get a trial.....they are taken to the military`s torture cells and tortured..........in one case, the journalist who reported that the americans had fired a missile on a house in the tribal areas, disappeared........a few months later his dead body was found........more than likely tortured to death, either by the americans or musharraf.........

..........this is going to be interesting..........one would hope that the cj`s colleagues will find hiim not guilty and restore him to his position again.......if not, then this will be another incidence where a divided and opportunistic set of justices was defeated by a united set of generals........lets see if the judges stick together and defend their own......or if they are lured by the opportunities of grabbing the position of the cj for themselves.........

if the judges restore their cj, then i assume the cj is going to be quite pissed at musharraf.....he is not going to give any decision in favor of the president.........

.......by the way, the next guy in line to becocme the cj, if this cj is found guilty, is a hindu......maybe he will take a stance, where the muslim judges have never taken one........

#5 khurram,

Actually one can either use one`s own savings or invite/borrow someone else`s from where these are in excess. Pakistan did the latter.

For example, USAs domestic savings is around 2% of GDP. It borrows and uses everyone else`s savings.

But the author is being unduly stingy. Many good things have occured in the Pakistani economy. You`ll find an earlier post directly relevant:

You know, one lives and learns. And, I have learnt lately that regardless of how strongly one believes he may be right, he may actually be wrong. I have lately come to realize that the `consumerism` driver and the liquidity boom let loose by this economic team in Pakistan (for whom I have now developed some respect after watching results) was the only `real` workable option under Pakistan`s politico-economic as well as it`s foreign relations stance post 9/11.

Let me elaborate as suggested:

I have been on record as voiceforously criticising Pakistan`s decision not to mop-up the post 9/11 influx of some $ 18 billion by issuance of fresh Government bonds for infrastructure development, and instead to let it remain in the money market. This would have been perfect in any other scenario, but the Debt/GDP ratio at that time was close to 100%, and the Government taking on further debt would have driven the ratio through the roof, plus multiplying the fiscal deficit, both reflecting negatively in Pakistan`s sovereign ratings. Instead, the excess liquidity did the following (much in the same order):

1) Drove commercial borrowing interest rates down from 21% to 2.25%, boosting corporate profits, re-investment and capacity utilization.

2) Stock market boom and foreign portfolio investment resulting from (1).

3) Real Estate market escalation and influx of high-quality foreign builders/developers, cement and allied 200 (+) tertiary industries growth.

4) Consumer finance and auto-manufacturing /household appliances boom resulting in huge capacity additions and entry of manufacturers/assemblers.

5) Banking sector profits tripling due to all of above strengthening their balance sheets and entry of large foreign players/take-overs/mergers.

6) Reduction of direct borrowing from central bank, fiscal deficit, and budget deficit and sufficient fiscal space for increase in Public Sector Development Programmes (PSDP).

7) Reduction in debt/GDP from 100% to 56% and improvement in sovereign ratings.

8) Entry and bench-marking in international sovereign as well as corporate bond/GDR markets with over $ 4 billion hugely oversubscribed issues due to (7).

9) Reduction of cost in foreign borrowing due to reduction of country-risk premiums, and in domestic borrowing through lowering of rates in National Savings Schemes.

10) Overall FDI conducive atmosphere beginning to attract serious long-term foreign flows.

In short, although myself personally have always favoured a domestically/internally driven growth, but Pakistan did the opposite i.e. taking the externally driven path. At the end of the day, I guess whatever works is the best. The above is working very well.

The risks, are (a) the savings/investment to GDP is very low. This must improve with increase in wealth and dis-incentivizing capital flight by residents and; (b) the current account deficit. This was inevitable given the above route. However, in the words of the Resident Director of World Bank based in Islamabad - ``It is fixable ``.

Cheers!

(P.S. Thoroughly enjoyed your exchange with Dr.Sohail on the other board .. have some mercy ... !!!)

Re: # 13
thanks madani sahab
growth is the function of investment, in pakistan`s case billions have poured in AID,FDI and FOREIGN BORROWING. which the author of the article fails to mention.

you can cry about the bias of the author or whatever..the point is that in a country of 166 million peole you cannot find leadership that can develop sectors of growth for an enterprising people and you cannot survivie without handouts from US gov`t or foreign remittances. it is a sad flucking situation and istead of shooting the messenger you should, as a pakistani, try to recognize this disease and try to find a cure. ullu kay pathays..

Re: # 7 I agree with you regarding saving.
Poor people save and rich people spend and make business grow up. I think at least 20% of economic growth is due to borrowing( Credit cards) and not saving. Poor people save is not virtue but necessity. American save -0.5% on average and so rich every man in world wants to go there even people opposed to them go and settle there and bitch all time. Saving keeps you and society poor and is bad habit, borrowing and buying proper stocks is better way to become well to do..

Re: # 6
Are you sure just that degree you can 180,000 rs/ year.
May I should start thinking joing college.
Degree in IT or management(Lahore) can make that magic not with commerce degree. But I can be totaly wrong as have no much connection. All young people are getting too much inflated salaries and burdening people over 35 years as they never made such start salaries even in dream. How indian commerce grad do ? can they get such jumbo salaries at start ?

Re: # 10
Graph is other way of cheating. If you use logarithmic scale on one of axis nothing looks much different. Same thing with Bar charts. Its all sofesticated cheating at ultimate analysis

Re: # 8
I heard something moa and stalin use to feel and say.
If one is killed its news but if millions killed then its statistics.
Stastics is just humbo jumbo cheating artifical syatem of numbers made to cheat people and impress them ,with big name like standard , bionomial, standard, poission dist, mean, median, standard deviation, permutation, combinatin, markov chains etc its bogus. I never believed in statistics. When I did not knew much it use to impress me more I studied and began to understand reasonably then understood is all bogus and for cheating people.
I agree with your attitude about this number crunching.
Incidently I read your contribution and learn few things. Continue posting.

This very partisan article and more politics oriented attacking army ruler than economy etc.
Also he wants to advocate use of coal, no body should be forced. If good cheap coal is available people will use otherwise not. It appears this propaganda by coal Industry.
All this goes hidden. Europe wants pakistan to buy europe made air bus. Now they do not want to say directly but play game of saying aircraft are unsafe and bans entry. Its racism in purest way also forcing PIA to by european made airmachine. They should be taught lesson by banning all european flights till PIA returns to Europe fully.
Present situation demands till elections present ruler should continue. Time has come to usa to shut up and tell them were are not going to find their wars. Clinton had given assurance at Kargil time after withdrawal he will personally give attention to Kashmir. Nothing is still done. We should tell usa if you want go after Talibs go ahead. Neither we support or resit their fighting in Vaziristan. Let them face enemy and we should keep army prepared for eventual american departure .