The Sugar Coated Shaft

Following is the report from the World Bank site:

``Pakistan has made significant development progress since its independence, 57 years ago, as measured by some key social indicators. Health and education services have expanded and improved, and life expectancy has increased from 59 years in 1990 to 64 in 2003. Infant and maternal mortality rates have dropped, as have illiteracy rates.

In the late-1990s, Pakistan was in a position of extreme vulnerability, and, after a decade of inward-looking policies, in November 1999 the country embarked on a significant economic reform program and has since achieved considerable improvements.

Pakistan has turned around a deteriorating macroeconomic situation to a rapidly improving one. In 2004, GDP grew by an estimated 6.4 percent while inflation remained relatively low at 4.6 percent. These macroeconomic achievements have allowed the country to keep on track towards fiscal consolidation while enabling the government to increase spending on health and education. The government has also launched far-reaching structural reforms to privatize public sector enterprises, strengthen public and corporate governance, liberalize external trade, and reform the banking sector.``

http://www.worldbank.org.pk/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/PAKISTANEXTN/0,,contentMDK:20131431~menuPK:293057~pagePK:141137~piPK:217854~theSitePK:293052,00.html

Shahid Javed Burki is a Rhodes Scholar, a VP of the World Bank, an ex-Civil Servant, an author, an ex-Finance Minister of Pakistan, and heads a Venture firm now.......He also has a degree in Physics.. He has been writing an article in Dawn for years, on every Tuesday, regarding the state of Pakistan`s economy..........I read him regularly, and have found his analyses to be very solid.......Here is what he writes:

- Pakistan is now the third fastest growing economy in Asia after China and Singapore.
- After a decade and a half, Pakistan’s GDP growth rate has overtaken that of India’s
- Pakistan’s per capita income is now, once again, more than that of India’s
- At an estimated $736, income per head of the population Pakistan is approaching the threshold that separates poor countries from middle income nations
- Since 2002-2003, the size of the economy has grown by 21.2 per cent.
- the income per head of the population grew by more than 15 per cent.
- the incidence of poverty may have declined by 10 per cent
- Some analysts believe that this is a repeat of the past when Pakistan did well .....My own view is that, this time around, there are significant changes in some of the economic fundamentals to warrant greater optimism about the future

http://www.dawn.com/2005/06/14/op.htm

Another ten years of the above, and we should be set...........After that, we will have the power to purchase the shoes that are needed to start crawling, and walking towards some sort of an ethical electoral and democratic system........At the moment, the only negative will occur if Benazir, Nawaz Sharif or maulvis take control......They`ll bring the growth rate down to the 90s levels........

Hey, if they can look good while stumbling down to hell, i dont see what the problem is......

Can anyone from Pak explain why the much ballyhooed KSE index that went over 10000 a few months ago lost almost 3500 points and is now at 7345 odd??.And, if the scribe who wrote an entire article on this very same site, were to be believed, the KSE ``is the fastest growing stock market in the world``.

Also, if the telecom industry is ``booming``, why are there troops in the PAk telecom offices as we speak??.Or, is ``bombing``, as evrything in Pak is wont to do?.

Some coherent answers, please.Thank you.

Re: # 41

Mukhlis, thank you for providing a detailed explanation on how the civil liberities regarding freedom of speech have been evolving in Pakistan since Gen. Zia`s time. However, my point was that they have never been better and they are seeing a true golden age in current government`s respective tenure.

Re: Netizen# 39

“India didn`t progress much from 47 to 90, not because it was democratic foundations but because of socialist economic policies. The progress seen in the last decade (whatever worth it is) is due to the much needed reforms rather than allowing a dictator to rule it.”

India did do well in the 80’s. Average GDP growth was 5.4%. Its just been 6.4% in the 90’s. Here is a link that you might want to read.
http://www.economywatch.com/indianeconomy/indian-economy-overview.html


I agree with the rest of your statement.

Regards,

Faruk

As Far as I have understood is....
its all based on the Primises of `` Trickle Down Effect ``.....

But I think.... the sponge at the Top is too thick....and has already absorbed...all the benefits ...to leave anything to trickle down to common Man




the Official Poverty Line is 34%
That is 34 per 100 persons live below the miminum subistance line...

The other statistics of interest is...


31% population get less than 1 $ daily..
and
84.7 % gets less than $ 2 daily...


source...

http://64.233.161.104/search?q=cache:3Lo5IltsgMIJ:earthtrends.wri.org/pdf_library/country_profiles/Eco_cou_586.pdf+Income+distribution+in+Pakistan&hl=en&start=15%20target=nw

Taxes are the key to progress of Pakistan and I say the ``right sized`` taxes. It is pathetic to see that only salaried employees have to file the income taxes. It is time to introduce a nation wide Tax filing day where everyone whether they owe any taxes or not, have to file a simple 2 page income declaration form.

Re#38

``Look at the press, I`ve been around since 1987 and during my years, the press has had the most liberities in the current era. Gen. Zia, Nawaz Shareef, and Benazir Bhutto, their treatment of Najam Sethi is just one of the fine examples of censorship during their respective tenures.``

If you`ve been around since 1987, then I guess you`ll also remember the time when BB came to power.

Pakistani public`s jaws dropped when one fine day back in 1989, they saw PTV showing actual footage of Nawaz Sharif and other opposition leaders. This was a few days after BB had been sworn in as Prime Minister in 1989. People could not believe what they were seeing. For the last 11 years they had been so attuned to listening to the opening lines of PTV News which would usually start with “Sadr-e-Mumlikat Janab Zia Ul Haq neh aaj yeh kaha, Sadr-e-Mumlikat Janab Zia Ul Haq nay aj woh kaha etc. etc”.

And then it became more or less a regular feature. Opposition news and opposition TV footage (no matter for how short a time) being aired on PTV became somewhat of a norm. Heck, they even showed a few clips from the first death anniversary of Zia Ul Haq. This was the guy who hanged BB’s father.

At the same time newspaper reporting became much more open and bold.

After BB’s government was overthrown, Nawaz (a full-fledged Army/ISI man at that time), could not just completely stop what BB had started. He cut down on the footage, but he did not totally curtail it. Why? People had gotten used to the freedom, and even though most of Nawaz’s power as PM in initial days came from army’s backing & support, he still had to cater somewhat to the sentiments of the people. During Nawaz`s tenure, whenever PTV ``missed`` a major opposition news or ``forgot`` to give any coverage to opposition leaders for a few days, the newspaper articles would start screaming and people in the streets would start talking. The pressure would be on & PTV would start showing the stuff again.

So there are at least two points of time in the last two decades when there has been a shift change in the freedom of press. The first was when BB came to power & the second in Musharraf’s times. Once BB started the momentum, there was no turning back. Nawaz slowed it down but did not completely stop it. And Gen. Musharraf needs to be commended for his freedom of press policy.

Just like Najam Sethi, Shaheen Sehbai is also just one of the fine examples. Najam Sethi at least got back home after a few days. Shaheen Sehbai had to flee from his homeland to escape persecution.

``Those who disagree, need to provide some examples in Asia of countries, who have gotten out of the third-world by mere elections alone.”

Nobody’s saying that mere elections alone are the panacea for all ills. Elections are albeit one part in the larger context of democracy and a reasonable democracy takes time to set up and function.

But as Netizen has put it in #39, neither does dictatorship mean manna will start falling from heaven.

What people who want democracy in Pakistan argue is that based on our history, and the vested interests of the Military in Pakistan, the interests of Pakistan in the long run will be better served in the hands of elected civilians than in the hands of non-elected generals. This conclusion is based on our understanding of the history & politics of Pakistan & the psychology of the army.

There are all types of examples in Asia of generals as well as civilian dictators, as well as democratic civilians turning the fortunes of their countries for the better. And there are also examples of generals and civilians ruining the economies of their countries. So why would Musharraf or Pakistan Army fit into the mould of let’s say South Korea’s Chun Doo-Hwan, instead of Philippines’ Marcos or Indonesia’s Suharto.

Both Ferdinand Marcos-(Dictator-Philippines) & Suharto (Dictator-Indonesia) showed economic prosperity for a few years (just like Musharraf has), but later everything went topsy-turvy, people became disillusioned because of the massive corruption that these guys engaged in and both of them were kicked out. Now their countries have been running under elected civilians for quite some time now (without a “ghairat-mand” army taking over their TV stations).

Both Philippines & Indonesia have gone through massive & severe political crises after the removal of Marcos & Soharto. Those crises would have been more than enough reason for an army like Pakistan’s to jump right in to “bring political stability and law & order”, but the Philippines & Indonesian Army did not. And the result? These two countries have been learning to stand & stumble & will be walking & running in no time.

Japan developed through democracy, South Korea developed through dictatorship, North Korea got screwed under dictatorship, Burma under army is screwed, Bangladesh rejected the army and has been nudging along with democracy, Indonesia & Philippines got screwed under dictatorship, Singapore (no matter what you believe in), has elected civilian leadership. So there are all types of examples.

“Most of all, the case is the fact that everyone on this site is economically well-off, hence is concerned about other issues...........If they were not well-off, they would be worrying about the economy and jobs also...........And many of them don`t want the status-quo to change, which is what rapid economic growth tends to do.....”

Let me try to explain something. Everyone has their own way of drawing conclusions from history and politics and based upon that analysis- to the best of one’s understanding & abilities- one comes up with the best way to understand how Pakistan’s interests can be served better in the long run.

My analysis of how to achieve stability & prosperity for Pakistan can and is different from yours. But basically the goal is the same i.e. to find the best way that will lead to economic prosperity for the people of Pakistan.

You believe Pakistan’s interests are best served through Musharraf. I believe this will not be sustainable in the future and some crazy general can reverse everything in a flash. Our goal is the same. We only disagree on what is the best method to achieve it. We both want the status-quo to change. Only to you Musharraf is changing the status quo, whereas to me, the more time army spends in politics the more it preserves the status quo. I agree with Temporal’s assessment of: “let the child stand, stumble, walk, run through trial and error”

So this “many of them don’t want status-quo to change” is simply not true. We all want the status quo to change, but we disagree on which route should be taken for the status quo to be changed. But believe what you want to.

Re: # 34

I would like to disagree with you for these reasons:

``In any third-world or even second-world country, the answer would be clearly in favor of quality of governance. There is no argument there. And it is backed by the following:

- Take a look at the immigration patterns from third world countries. They are based on only one factor. An increase in the economic standard of the migrating individuals. People from democratic countries, like India, quickly migrate to non-democratic kingdoms like Dubai and Oman. But never vice-versa. People from non-secular govts. like Pakistan quickly migrate to secular countries like Canada. But never vice-versa. People from secular govts. like India, migrate quickly to shariah-based countries like Saudi Arabia (where the govt. doesn`t even allow them to practice Christianity or Hinduism, etc.). But never vice-versa. ``

People migrating to Gulf nations is not because of quality of governance, but because of employment oppurtunites and petro-dollars ( increase in economic standard, as stated by you) I am quite sure when the oil evaporates and jobs dwindle and dinar is be equal to Rs. no one will bother to go there. As no one bothers to go to Egypt/Jordan.
You will see some Western/Chinese engineers working in India/Pak too, just for the moolah.

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``Even the Pakistani expats on this site arguing about type of governance, qucikly gave up their rights to vote in Pakistan, and migrated to the USA etc., where they were not citizens and had not rights to vote, because their economic standard was going up...... ``

thats true. Personal economic prosperity will always be the first goal. But again the same can be argued about Chinese expats enjoying wanting to enjoy more civil liberties after becoming american citizens rather than be mute spectator in front of CCP.

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``The only economies in Asia that have gotten out of the third-world are the ones that have concentrated on the quality of governance (economics over democracy). Can anyone name one, in Asia, that has gotten out of the third world that has concentrated on the type of governance (democracy over economics). One would think this would be a good enough stastic. ``

I think you are mixing up the concept of democracy with economics. There are examples of democratic countries doing good as well as bad economically. Taiwan/Japan doing good. Same with the authoritative regimes too, due you think if nepal comes under Gyanendras rule permanently its economy would start booming without fundamental changes in the policies?

Being democratic won`t guarantee economic freedom nor being authoritative will lead to a bullish market. India didn`t progress much from 47 to 90, not because it was democratic foundations but because of socialist economic policies. The progress seen in the last decade (whatever worth it is) is due to the much needed reforms rather than allowing a dictator to rule it.
Within democractic countries too you will observe vast differences in their economic policies and investment atmosphere. It would take months for someone to start a business in india whereas just a couple of days in Australia.

Regarding Singapore, I don`t understand why you are classifying it as a one party system. Its true that out of 84 seats, 82 are held by one party. But these people were elected by the populace. I read Lee Kwan Yew autobiography where he mentioned the pains he had to go through to get elected, and once elected to perform brilliantly so that the next time people will have faith in his governance. The present scenario is a reflection of the capability of PAP and the faith Singaporeans have in the party. Regarding LKYew getting his son elected as the PM, this guy is not idiot, unlike most sons of indian politicans, he is quite competent. Also if he/PAP doesn`t perform as per the expectations, people would have a choice to vote his party out.

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``Other countries like Pakistan, India, Bangladesh, Sri Lanka etc. who have tried to concentrate on type of governance, are nowhere. ``

One common difference b/t these countries and the rest of the developed countries in Asia is the internal/external wars faced by them. India/Pak are/were always at each others throat, sri lanka for a decade or more has civil war going on. BD which went through a cataclysmic change in 71 with some period of military dictatoship cannot control its population growth. Hence there are many more factors other than being democratic or not. Look at N. Korea, it should have been far ahead of S. Korea as Jong family have been ruling it since 45. elsewhere, teh different trajectories of GDR and FRG.

``Those who disagree, need to provide some examples in Asia of countries, who have gotten out of the third-world by mere elections alone. ``

Elections are not the cure for economic malaise, in the same token being ruled by one person is also not going to herald an era of economic prosperity.
Regarding Pakistan as mulkhis stated, the problem is how far the military establishment will go without upsetting the applecart? If the threat of war diminishes it will cut down the importance of army itself.

Romair, the reason why I spoke highly of Musharraf right now is because we don`t have any other leader in Pakistan in my opinion who may effectively lead the nation. I feel that this fellow has understood that the wheels of business and industry need to be oiled and that the government should make all efforts to allow different industries to have a proper workable environment.

Romair, I think that your comment regarding how most of us are not concerned about the state of the economy and about jobs is not correct. I for one can safely say, that I am highly concerned about the state of the Pakistani economy and about issues related to jobs in the country.

Regarding the financial and telecom sectors, the government has increased spending into those sectors by geometric propotions. India is a bustling IT industry and FOREIGN companies come to India in order to produce their products cheaply and then sell them at lavish prices in the West! Whenever Pakistanis need computers, software, or other related materials, we operate via dealers primarily from the West, Dubai, SIngapore, and Hong Kong to a lesser extent. So many jobs can be created if trade policies between India and Pakistan could be relaxed.

The only fear I have is that not enough money has gone into the ginning sector of the country however I am of the opinion that within the next 4-5 years the ginning sector will be at par if not ahead of India and China`s ginning qualities. So many looms, weaving, and spinning machinery has been imported that the demand for high quality ginned cotton is surging withing the nation and only a stable domestic production would be able to meet the requirements.

Also, this budget has increased spending on health alot as well.

The fact of the matter is that there might just be a golden age at the end of the tunnel if we stay strong in the face of adversity and manage to beat all odds.

Look at the press, I`ve been around since 1987 and during my years, the press has had the most liberities in the current era. Gen. Zia, Nawaz Shareef, and Benazir Bhutto, their treatment of Najam Sethi is just one of the fine examples of censorship during their respective tenures.

This budget is actually the first budget I have seen that has not increased taxes on the middle class. In fact, it has reduced taxes, which maybe unique in Pakistan`s history:

-Personal tax rates for salaried persons proposed to be reduced to range between 3.5% to 30%

-Annual statement filed by the employer proposed to be considered as sufficient discharge of liability to file a return on the part of the employee.

-Enhancement of exemption limit from Rs. 300,000 to 400,000 proposed for senior citizen

-Tax rebate proposed to be increased from 50% to 75% in the case of teachers and researchers

In addition, the salaries of govt. servants - the one group that actually pays taxes, since it is cut directly from their paychecks - have been raised, quite a bit...........

Job creation is the name of the game, in any third-world country............And I don`t know of any way to create, ``real`` jobs, without economic growth.............

haroonellahi #35: ``So, whats the case by the anti-Musharraf group?``

What is pwned?

The case is a misguided romanticism for elections with the assumption that all elections result in a Western styled democracy. It is also a very poor understanding of how economics is and is not related to politics. It is also a complete lack of understanding of Pakistan, beyond the cushy borders of upper-middle class and upper-class Lahore, Islamabad and Karachi. It is a lack of understanding of the pre-requisites of democracy. It is also a dislike of the Army`s previous interventions in politics.

Out of the above, only the last one is legitimate. The way to success in not the Army in politics. But economic growth, with or without the Army.

What the people need to look at is why individuals, including expat Pakistanis (who themselves chose economics over elections, when they migrated) is how other countries have gotten out of poverty, in Asia.........

Most of all, the case is the fact that everyone on this site is economically well-off, hence is concerned about other issues...........If they were not well-off, they would be worrying about the economy and jobs also...........And many of them don`t want the status-quo to change, which is what rapid economic growth tends to do.....

``Ginning machinery was so expensive to import prior to this budget, we had to buy domestically made ginning machinery, which had no concept of `precision enginerring`.``

The Financial and Telecom sector has gone through a boom also. I am looking into that area and hopefully if all goes well, I should be expanding into Pakistan, soon.............I would have never dreamt of doing that, five years ago.........And if this whole peace stuff with India keeps going, I could grow my business exponentially........Another thing that I would not have thought of five years ago.........

Shaukut Aziz, Ishrat Hussain et al, need another five to ten years. After that, even BB and Nawaz Sharif will not be able to come back and screw things up again.......

Romair, have you ever heard the term `pwned`? Dude, your reply was truly lucid and extremely coherent. I think the Musharraf regime has realized that as long as the government serves as an agency who oils the wheels of economic development, prosperity for Pakistan will be possible.

Ginning machinery was so expensive to import prior to this budget, we had to buy domestically made ginning machinery, which had no concept of `precision enginerring`. Pakistan NEEDS to make sure that her textile industry flourishes, and that is happening now!

So, whats the case by the anti-Musharraf group?

haroonelahi #32: ``So the question of the day to the Pakistanis, does the quality of governance hold higher priority for you or the type of governance?``

In any third-world or even second-world country, the answer would be clearly in favor of quality of governance. There is no argument there. And it is backed by the following:

- Take a look at surveys done by international groups in Pakistan, on the most pressing issues. They are employment. Not religion, democracy, Kashmir, secularism, army, elections etc.

- Take a look at the immigration patterns from third world countries. They are based on only one factor. An increase in the economic standard of the migrating individuals. People from democratic countries, like India, quickly migrate to non-democratic kingdoms like Dubai and Oman. But never vice-versa. People from non-secular govts. like Pakistan quickly migrate to secular countries like Canada. But never vice-versa. People from secular govts. like India, migrate quickly to shariah-based countries like Saudi Arabia (where the govt. doesn`t even allow them to practice Christianity or Hinduism, etc.). But never vice-versa.

Even the Pakistani expats on this site arguing about type of governance, qucikly gave up their rights to vote in Pakistan, and migrated to the USA etc., where they were not citizens and had not rights to vote, because their economic standard was going up......

- The only economies in Asia that have gotten out of the third-world are the ones that have concentrated on the quality of governance (economics over democracy). Can anyone name one, in Asia, that has gotten out of the third world that has concentrated on the type of governance (democracy over economics). One would think this would be a good enough stastic.

Singapore basically has been a country ruled by a family, under a one-party system. Lee Kuan Yu ruled it for a generation and now his son runs it. Even now, and throughout its history, out of the 84 or so seats of its assembly, around 80 go to their party.

China is being ruled by literally one party. Either you join the Communist Party or you are political dissident. Those are your only two poltical options. Malaysia had the longest serving, ``Prime Minsiter`` in the world. The guy ran the country, single-handedly for a generation. Korea, Taiwan etc. You name it.........

Other countries like Pakistan, India, Bangladesh, Sri Lanka etc. who have tried to concentrate on type of governance, are nowhere. The results are right in front of you. South Asia is the most backwards area in the world, in HDI, other than Sub-Saharan Africa.........

This, in no way, suggests that one should not have democracy. Of course one should. Ideally one should have both. But, for third world countries, if the choices are a democracy which lead to poverty and a non-democracy which is leading to economic growth, then
the later should win out.

People practice the above in their personal decisions, but for some strange reason, some argue against it in the public decisions. If Pakistan has ten years of elections, I don`t know where it will be, since its electoral system is so messed up. It had 10 years in the 90s, and we all saw what happened. If it has 10 years of 6-8% growth rates, it will be a changed country. And it doesn`t matter who is running the country, as long as the growth is occuring........

Those who disagree, need to provide some examples in Asia of countries, who have gotten out of the third-world by mere elections alone. The only ones I can see are the ones who have gotten out through sound economic policy..........