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Posts tagged with: Economy

How we got into the IMF Trap

imf-trapping-countries-in-debtI was shocked to read a status message of a fellow bloggers on facebook. “IMF approves another $3.2Billion for #Pakistan bringing the total to $11.3Billion > with all the relief we are still no better > I think we are Royally Screwed for life“, it reads. Another fellow claims it as Zardair’s fault! This was a shock for me as the gentleman is very well educated, an online activist and very much familiar about economic and social issues.

Many of us get in to trap of slogans of political leaders who try to sell every thing for sake of some public support, some times we get confused and ignore the facts. Some of these leaders are disillusioned or unaware of economic and social parameters and others dishonestly exploit the public which is not supposed to be expert on every subject, the illiteracy adds the confusion. The simple rule, if you can not fight them, confuse them! The so called ‘leader’ earns popularity by cheating people, ‘intellectually’.

Let us began with basics. National economy is not different from household budget. We are a global village and trade in international community as a town or village do. If income of a household is Rs. 100 but spending is 150, then the family has to borrow to meet additional spending in shape of credit card or bank loan or even credit from community. The alternate is to increase the household income by working hard or producing more and spending less.
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Shumaila Rana Resigns but what about the Bigger Crooks

Shumaila Rana has resigned from her Parliamentary seat amidst a short bit of drama after she was caught using a stolen Credit Card for approximately Rs. 60,000. To be honest its great to see her cough up her seat, but one wonders that in comparison to her colleagues which are bigger looters and plunders she is in comparison a petty thief. I wonder when the real crooks start coming out of the closet


Bhagwandas Report – Oil companies given free-hand to fix Oil Prices

Many in Pakistan may have already glanced through this front page story in Dawn, I feel this is a very valuable piece of information to keep in mind when we try to understand the oil-scam in Pakistan.

In 2001 an Oil Companies Advisory Commission comprising of all oil companies in Pakistan under the watchful eye of DG (Oil) showed up only three times of the 114 meetings held from 2001-2006. The DG (Oil) was entrusted with the responsibility to manage, ensure and monitor the demand and supply of petroleum products throughout the country but due to negligence the ministry used to faithfully accept and notify whatever calculations were done by OCAC. The 74-page Bhangwandas report noted that since members of the OCAC were direct beneficiaries of oil business and, therefore, could not be expected to perform their functions in isolation of their self-interest. “It would be highly inconceivable to expect that persons having direct interest in the outcome of an exercise would be oblivious of their personal interest and act freely and independently in the larger consumer interest’
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The Myth of Independence – Economic Imperialism

IMF WorldBank feeding Pakistan“The notion that Pakistan controls the reigns to the economic resources of the country is incorrect—she doesn’t. The G-7 does. They are the ones who make all the economic decisions for us, for our country, through their institutions like IMF, World Bank, and WTO through the policies of SAP, TRIPS, and TRIMS. The idea is to expropriate our land, our labor, our raw materials, and our markets for their own profits. This is what economic imperialism is all about.”

Pakistan stands in debt of in excess of $38.8 billion 1 (2005 est.) to IMF and World Bank (WB), a debt perpetually increasing 2 (courtesy of Interest), a debt impossibly repayable (?), and yet, this scarcely bothers our lenders! So why do the IMF and WB continue to lend? And equally more important to know is from where do they find all this extra money to lend, especially when they are never repaid in full? (this is in itself a separate chapter of discussion altogether) The answer to first question however is straight-forward and obvious: they want to see us and keep us in debt forever, for debt is a kind of slavery, and a tool, a means, for them, to achieve their own economic agenda, the economic agenda being expropriation of our land, labor, raw materials, and markets, for owns profits. (Michael Parenti) This is what is known by Economic Imperialism.

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The Carbon Tax Fiasco

oil tankers in pakistanCyril Almeida a columnist in Dawn has penned an excellent article on the recent controversy regarding the petroleum carbon tax. It is a fact that in March 2009 the government had imposed a Petroleum Developmental Levy which resulted in an increase in the price of petroleum goods by a few rupees. The then, newly restored Chief Justice Iftikhar Chaudhry took matters into his own hands and reversed this developmental levy and rightly said “the welfare state had the authority to recover tax on petroleum but not to make profit”.

Having been forced to undo a lucrative indirect petroleum taxation by the Supreme Court the government returned with a new Carbon Tax piggy-backed onto the Finance Bill of 2009 which went through unanimous approval across the parliament with practically not a single politician objecting to this steep rise in petroleum prices in the debate. Interestingly once the Carbon Tax came into effect the Supreme Court knee-jerked to issue an immediate order to stop this implementation of the carbon tax which was actually going to result in atleast a Rs. 10 hike in all petroleum goods across the board.
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People’s Republic of United States

The United States comprises approximately 4.5% of the world’s population and consumes 25% of the world resources. According to the US department of Commerce, the 2008 deficit on international trade in goods and services was $677.1 billion. This is down from $700.3 billion in 2007 but still 4.7 percent of GDP. In order to cover the deficit of past years US has borrowed $ 11.338 Trillion from international sources. According to IMF report US Per Capita income for 2008 was estimated to be $ 47,000 compared to Congo with $328.

In an ideal world, with 4.5% of world’s population US should be consuming same amount or at the most 5% of world resources. Higher consumption of world’s resources was justified because of higher GDP and Per Capita income. In fact it was not the real wealth which pushed the US Per Capita income and GDP. It was result of manipulation by creating money which does not involve production of goods or provision of services and still adds up the GDP and Per Capita figures. The very basis of a capitalist economy!
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Redefining Democracy

By Omar Javaid, Sr. Editor, Critic Magazine

The crippling economy, hostile neighbors, devastated judiciary, shamelessly stubborn and confused government, and a shattering socio-cultural fabric is fueling an outcry that ‘enough is enough’. The Question of “how to bring the change”, how to steer away from the pitfall very much visible ahead? Was never before so hot as it is today. However Despite all the discussions, debates, conferences, and seminars so far any practical and feasible solution seems more utopian then realistic. Some talk about revolution to be the ultimate solution, some talk about strengthen of democracy, few even back the idea of dictatorship on an assumption that we were better off during the Musharaf regime, some also talk about Islamization and Implementation of Khalifat, or independence of judiciary etc. however all these discussion and supposed solutions starts and end around the question of ‘what the change should be’ instead of the a bigger issues of ‘how, who and when’, even if there is an agreement on ‘What’.

It’s always a dead end, always because the constituents of ‘What’ are so global, so farfetched, that the whole proposition seems more theoretical, even utopian, and the results never seems guaranteed. It’s more of a clarification, recommendation, suggestion rather than a confession, and that’s exactly why most discussions are mere discussion never inspiring any action or inaction (evil triumphs).

Gandhi was right when he said “Be the change you want to see the world”, and our approach stands contrast. We blame every other person or institution and hold them responsible, even feel good and assume our job done, only by pointing fingers at the supposed evil. Saying of Edmund Burke goes “It is necessary only for the good man to do nothing for evil to triumph”.
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Judiciary is restored! What’s next?

Guest Blog by Naeem ur Rehman

Iftikhar Chaudhry Pakistan restored judgesLawyers have achieved their historic objective after the restoration of the Judiciary on March 16, 2009 and now they can get on with their lives and profession. The question is what lies ahead of PML-N, PPP and us as a nation. As we are quite aware that this is not the end but actually the start of an other venture. The primary objective of PML-N should be to dismantle PPP and get the power as soon as possible, which most of us would agree with. Being a Pakistani and politically neutral, I would rather like to see Mr. Sharif behave more maturely and look at the long term gains for both the country and his party. There are grave concerns about the very existence of the country and all of them need to be addressed simultaneously and with great urgency and meticulousness.
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Pakistan, Forex and Musharraf

Guest post by A.H.Kalwar of Pakistion Blog

With the current account deficit widening, inflation boiling at over 24% and foreign reserves dieing out at the rate of $1 billion a month. Pakistan’s economic indicators seem to have taken a nose dive. Where did it start and when will it end?

The dollar today stands at over Rs.80 in the open market. Citigroup calls weak rupee ‘a legacy of flawed economic policies’. Economic policies put in place by a generous gift to Pakistan, from Citigroup itself, the MBA-cum-economist Mr.Shaukat Aziz. The other Shaukat, Tareen our latest in the line of Finance ministers boldly throws all the blame on the previous government and it’s “Short-term” aimed policies.

So how the hell did we land up here?, is Zardari secretly stealing all those billions from our foreign reserves? no. I mean I’m sure he’s tempted to, but well that’s not how it works. People frequently ask me how everything went wrong after the PPP-led government took office. The answer to that is, it didn’t go wrong after the new government took office. It went wrong a year before that. When it was obvious to the Chuadries of Gujrat that they’d soon have to vacant government offices they didn’t like it.
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Come Tuesday a Victory of Hope Over Rovesque Fear

Will the US be ever the same again?

Since life is all about flux, we continuously change, therefore any questions of change can be rhetorical in nature.

Yes, caution is advised and one must never underestimate the shenanigans of the neconzix, but the looming victory of Barack Hussein Obama (according to these pundits and this study of polls by Nat Silver) to come November 4, 2009 will be a global watershed event.

The last time the US was this polarized was in 1960 over Kennedy’s Catholicism. And the next time would perhaps be over a woman or a Jew candidate.

The Bush Presidency has managed to drag the US popularity downward throughout the world. He lied and misled the US – a Mass Deception over WMD and led an offensive against Saddam Hussain’s Iraq without a credible exit strategy.
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[MiniLinks] Sony recalls PS3 game Little Big Planet because of ‘Arabic’ words

Sony Entertainment has announced that it is recalling the Playstation 3 video game, LittleBigPlanet, from retailers after it learned that the soundtrack featured some Arabic-language lines which were also in the Quran and backed with music Sony said that “one of the background music tracks licensed from a record label for use in the game contains two expressions that can be found in the Koran.” the two phrases are (literally translated from the original Arabic): “Every soul shall have the taste of death” and “All that is on earth will perish.”.

I’m shocked and irritated, not at the Sony company, but more so at us Muslims who have brought this type of paranoia upon ourselves over the past years. It is a natural reaction for companies to steer away from these hyper sensitive issues staying clear of the extremist element in the religion of Islam simply for the fear of being caught in a blood bath of some awkward religious controversy. I must now worriedly ask can we coax our own people to be a little more understanding or has the time for reconciliation passed us by. [Post edited fractionally just to clarify the confusion that was seen within the comments section]

[MiniLinks] Humvees being built in Taxila

Saleem Shahzad of Asia Times Online reports that an order has been placed by the US Army for about 1000 military grade high mobility multipurpose wheeled vehicles Humvees at Heavy Industries Unit in Taxilla, Pakistan. The report does voice a concern to say that this new influx of military business is a worrisome understanding between America and Pakistan of a “a new and dangerous level“, but in all honesty I see it as a much needed influx of investment into our failing economy which might actually help bolster the foreign reserves and have an important side benefit of the much coveted ‘transfer of technology’. It must be noted that the report has not been fully confirmed by the ISPR spokesperson Major General Athar Abbass, but whatever be the situation it should be important to keep an eye on this development

The debt we owe Pakistan

Guest Post by Faisal K

Its very very hard to live in Pakistan these days. Not because everyone who has any resources is threatening to leave or at least thinking about it. Not because of the violence and the chaos that surrounds this country. When one lives here one gets immune to these things even though they have become much more of a threat in recent times than they were earlier.

Its hard because if one loves their country and I do love Pakistan it is torturous to see it being ripped apart in the name of the very religion it was founded on. That being said I do understand the people leaving in droves but do they not realize that aside from the security situation there is nothing welcoming them out there more than their own country. Most of the people I know for instance are talking about moving to Dubai. Why well because it is sort of like Karachi but totally safe. Well newsflash there is no place like Karachi, sorry. Each city has its own history and character and although immigrants try to build replicas of their home it is never home.
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[MiniLinks] Bristol-Myers Squibb shutting down Pakistan operations

According to the latest Economist Intelligence Unit report Bristol-Myers Squibb is planning to shut down its subsidiary in Pakistan due to inflationary effects. The news comes just a few months after Merck Sharp & Dohme (MSD), a subsidiary of Merck & Co, shut up shop in Pakistan. The decision is likely to have been driven by worsening economic conditions, a weak local currency, inflationary pressures, and the consequential rise in production costs. This news amongst other news reports are worrisome as it appears that with the surmounting economic pressures upon Pakistan, the political confidence is also not helping stop this flight of capital, we naturally cannot stop this flight of capital but at least we can persuade our politicians to think beyond their own pockets and more about Pakistan

Kashmiri Freedom Fighters are “Terrorists” – Zardari

In what appears to be yet another blooper on the international stage our President Asif Ali Zardari has yet again dropped a bombshell on our nation. If the security threat in the North West arena was not enough to handle he has just awoken a sleeping giant when he labeled Kashmiri freedom fighters as terrorist in an interview with WSJ a few days back.

WSJ: When I [Bret Stephens] ask whether he would consider a free-trade agreement with traditional archenemy India, Mr. Zardari responds with a string of welcome, perhaps even historic, surprises. “India has never been a threat to Pakistan,” he says, adding that “I, for one, and our democratic government is not scared of Indian influence abroad.” He speaks of the militant Islamic groups operating in Kashmir as “terrorists” — former President Musharraf would more likely have called them “freedom fighters” — and allows that he has no objection to the India-U.S. nuclear cooperation pact, so long as Pakistan is treated “at par.” “Why would we begrudge the largest democracy in the world getting friendly with one of the oldest democracies in the world?”

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