Spreading tax relief unevenly

Pime Minister Zafarullah Jamali wants to convert the macro-economic progress made by Pakistan during the last three years into micro-economic gains for its people. He wants to bring relief to the low income groups and the middle class who have been under an economic squeeze for long.

Even in the current year, Pakistanis are looking at a rise in the Sensitive Price Index by 11.6 per cent, spiralling other consumer price indices. But the PM wants to better the lot of the people at a cautious pace and at a minimum cost to the government.

President Pervez Musharraf, on the other hand, would prefer to use the fiscal space available to give a substantial pay increase to government employees, his third increase in four years. And he is supported in this by his information minister, Shaikh Rashid, who wants a 50 per cent rise in salaries of government employees through the budget.

The prime minister proposes to begin his do-good act with real relief to the farmers who, he says, form 65 per cent of the labour population in the country. He wants to give them agricultural loans of Rs 80 billion, along with fertilisers and pesticides at lower rates.

He also proposes to spend a great deal of money on lining the canals in the rural areas to make more water available to the farmers and far more land cultivable.

At a time when the prime minister is facing problems within his government and with the ruling coalition, he thinks it is prudent to make fiscal concessions to the masses wherever possible and provide financial assistance to the people facing acute hardship. When talking of helping the farmers, Jamali says the recent Indian elections are "an eye opener" for his government.

But in an effort to do maximum good with the minimum amount, he may be spreading his dough too thin and leaving too many persons dissatisfied. But that is the kind of risk he prefers in a country where a third of the 145 million people are living below the poverty line.

He wants to give relief to the salaried class as well as charge low or no tax on the National Savings Certificate income of widows and pensioners. He also wants to raise the salaries of government employees and lower the tax on them. He proposes to lower the high power rates without being specific about the amount.

Jamali is not getting any external assistance in this area except that the world oil prices, which alarmingly hit record levels of 42 dollars per barrel in New York, have come down by over 10 per cent.

And there is hope the OPEC will produce more oil following the insistence of Saudi Arabia, the world's largest oil producer and Indonesia at the other end. In addition, following the visit of Mr. Jamali to Saudi Arabia, the Saudi oil subsidy which began in 1998 may continue, but in the form of payment assured through deferred payment.

While the employed are interested in lower prices and tax relief in the forthcoming budget, the unemployed and under-employed are more interested in proper employment. It appears the PM's Task Force on Poverty Reduction and Employment has recommended the setting up of a permanent employment commission.

The personnel who will man this body have not been named. But the commission has been given another six weeks to come up with the right recommendations. The Commission's work should be made less burdensome by the vast increase in the development outlay for next year which will be Rs. 202 billion against Rs. 160 billion earmarked for the current year, while the actual expenditure is likely to be far less.

The Rs. 80 billion agricultural loans should also help create large scale employment on one side and increase agriculture production on the other. It will also help lower high food prices.

But the banks and the government have to ensure the loans are spent for the purpose for which they are given and not to acquire more Pajeros or other luxuries or for more elaborate marriages and other ceremonies, for which the feudal lords are famous for.

There will be no new taxes during the budget, says Mr Jamali. This is an old official gimmick given during each budget season for long now. The fashion of the times is not to levy new taxes but withdraw some hefty tax exemptions. The chairman of the Central Board of Revenue, Abdullah Yousuf, now talks of withdrawing ten of the exemptions. But the revenue from that would not be much, he says.

Finance Minister Shaukat Aziz says poverty was reduced by two per cent in two years from 32.5 per cent in 2000-02 which means that absolute poverty is now around 30.5 per cent.

There is a difference between the official rate of poverty and the expert's rate as the official rate is based on a low rupee income, while the researcher talk of the people living below the poverty line of a dollar a day.

But the fact is that the other 30 per cent, living above the poverty line is not too well off either and is perpetually engaged in the struggle of making both ends meet.

This finance minister says poverty spending in 2004-05 would be Rs. 278 billion, while that figure in the current year is Rs. 238 billion - an increase of Rs. 40 billion.

He came up with another surprise at a seminar in Islamabad. He said per capita income of Pakistan has risen to 650 dollars during the current year, ending June 30, while that was 460 dollars prior to that. Only a couple of weeks back the finance minister said per capita income by the end of the financial year would be 600 dollars.

And the official economic survey shows per capita income for 2002-03 was 492 dollars. Has the big jump of 158 dollars in per capita in two years been made by the fallen dollar or the high economic growth or both? Are our indicators truly leaping, or sky-diving.

At the same seminar, Mr Aziz spoke of eight future challenges which Pakistan would face. And, surprisingly, he was frank. Among them were improving the future global image of the country, the quality of governance, higher GDP growth and creating jobs, improving the tough law and order situation, maintaining fiscal stability, correcting social sector indicators and developing better infrastructure. The eighth challenge was "implementation, implementation and implementation" - the Achilles heel of all policies.

Whether for the student who goes to a school or college, the common man who seeks the help of the policeman or moves the court for justice or approaches the administration for a fair deal, what matters is not the rule or law or the Constitution but its implementation in letter and spirit.

Various figures are being rolled out day after day as the tax revenue target for next year. It was earlier said to be Rs 570 billion in place of the target of Rs. 510 billion for the current year, then Rs. 576 billion and finally Rs. 580 billion.

The actual collectible figure may be set after the chairman of the Central Board of Revenue and his colleagues have had a formal meeting with the finance minister this week.

The focus at the moment is on tax relief all around. It begins with an investor-friendly or a business-friendly budget and ends as a common man's budget. Mr Abdullah Yousuf laments that when all the emphasis has been on tax relief and from too many quarters, how can Rs. 70 billion more revenues be raised next year?

In fact, collecting Rs. 510 billion before the end of June 30 is an uphill task and a strenuous exercise. The CBR has now to collect Rs. 70 billion to Rs. 75.3 billion in June to complete the current year's target of Rs. 510 billion.

It may achieve this figure by holding back the payment of withholding (GST) tax, by collecting more advance tax or by taxing the larger tax paying units more with the promise of returning it later. That is the kind of hectic exercise the CBR takes to every June to square up their collection figures.

For next fiscal year, far too many interests have been promised too much. It is one thing to give larger loans to agriculturists through banks and quite another to forgo the taxes to be paid by trade and industry.

And yet Investment minister Dr. Abdul Hafeez Shaikh and industries minister Liaquat Jatoi have been pressing the Prime Minister to come up with an investor-friendly budget through extensive tax relief.

Such tax relief is essential to promote investment, particularly foreign investment. Mr Liaquat Jatoi says foreign investment will come despite violence at home but the Adviser to the Sindh Chief Minister on law and order, Aftab Shaikh, says let alone foreign investors, even overseas Pakistanis are now avoiding investment because of the exploding violence in the country.

The fact remains that while some Arab investment has been coming in to replace Pakistani investment in banks and other financial institutions, and some IT institutions are also coming up, there is little of Pakistani investment, except in textiles.

That makes the finance minister say investment to GDP ratio would reach 18 per cent in 2003-04 from 16.5 per cent the year before, while the need is for over 20 per cent.

We are being bombarded by financial facts and figures before the budget. Most of them come from the finance minister, his ministry or advisers. How true or accurate are they and now much of them are guessestimates, we do now know. Around the world, finance ministers and their assistants are known to get out of tricky situations or awkward corners through guessestimates, spoken as facts.

That is all the more likely when there is only one source for facts and figures, and they are usually well guarded by the ministry of finance and there is no alternative authoritative source to challenge or verify them.

In democratic countries, major well funded research institutions provide alternative source of information. In Germany, the inflation figures of six government-financed but truly independent institutes serve as the alternative source of information on inflation and perfection of economic trends. The US Congress has its own research service.

But in Pakistan, autonomous official institutions like the Planning Commission and The Pakistan Institute of Development Economics, rely on official sources for data.

Non-official institutions like the Federation of Pakistan Chambers of Commerce and Industry and All Pakistan Textile Mills Association also blindly rely on official figures.

Where parliaments function regularly, a great deal of data is placed on the table of the house and then kept in the library of the house to which the public has access. We do not have such facilities. The parliament of Pakistan should have its own research service.

And when the parliament is in abeyance, that institution should function under the Auditor General of Pakistan.And the private sector should be encouraged to have its research service. Even if the basis facts come from the Federal Bureau of Statistics, their interpretation and verification can be done by other institutes.

One kind of dictators

Tony blair's latest musing about Iraq shows how far he has come since the glory days of weapons of mass destruction. He now has only one justification for the invasion of Iraq. It "rid the world" of the dictator Saddam Hussein.

This justification has serious consequences for British foreign policy. For if it is Britain's aim to rid the world of dictators, where do we go next? Here's a suggestion. Twenty-six million people live in beleaguered Uzbekistan, almost exactly the same number of people who live in Iraq.

President Islam Karimov of Uzbekistan is a dictator who has perfected many of the techniques of repression developed by Saddam. There are at least 5,000 people unjustly imprisoned in Uzbekistan, many of them for their political or religious views. They are systematically tortured and murdered. There is in Uzbekistan nothing remotely resembling a free press or free speech.

Obviously Uzbekistan should be next in line for liberation by Tony Blair and his armed forces. A sure sign of the impending British invasion of Uzbekistan is the attitude of the British ambassador there, a feisty Scotsman called Craig Murray. He shocked the Uzbeks last year with a series of speeches complaining about, among other things, the rather un-British habit of boiling dissidents to death.

He even incited the Uzbek people to "fight for democracy". That is how you would expect a representative of Tony Blair's government to behave. But wait. Mr Murray has been recalled and scolded by the Foreign Office, who reminded him (as if he didn't know) that the Uzbek dictator provided airfields and bases from which the US air force could carry out their bombing raids on Afghanistan.

Surely Mr Murray could understand that this generosity put Mr Karimov's dictatorship firmly on the side of the good guys, the democrats and the freedom fighters, and that Murray's speeches had caused nothing but embarrassment in the lands of the free.

Dictators, in other words, can have their uses, and Mr Murray should shut up. To his credit, he didn't. He went back to Tashkent and continued to denounce the government there.

Indeed, he committed the shocking sin of comparing the treatment of prisoners in Uzbekistan to what happened in Iraq under Saddam (and is still happening under the auspices of the country's liberators). Before long, I predict, Mr Murray will be packed off somewhere safer.

But where? What about another country with roughly the same population: Saudi Arabia? If Mr Murray goes there he might be asked about the terrorist atrocities that continue to plague that country. He would have to pay respectful attention to the views of Crown Prince Abdullah, the country's de facto (and unelected) ruler.

Responding to the latest terrorist attack in the oil city of Khobar last week, the crown prince went public. He made a solemn vow "to crush this corrupt and deviant group" which had carried out the terrorism.

Corrupt and deviant group! That is the most accurate definition I have yet come across of the feudal monarchy that governs Saudi Arabia. Nowhere on Earth is the gap between the quite disgustingly rich and the even more disgustingly poor more flagrantly flaunted than in Saudi Arabia. Nowhere is dissent or divergence more ruthlessly punished. No more appropriate target exists for the grand democratic crusade of New Labour.

But wait. What is this statement slithering out of the Foreign Office and its secretary of Straw? In its hour of need, he assures us, Britain stands solidly behind the corrupt and deviant group that rules Saudi Arabia.

Crown Prince Abdullah, in other words, is as secure from British invasion as is Karimov and scores of other dictators across the world who, by providing air bases or cheap oil or helpful UN votes, have proved themselves true friends of the West.

Almost exactly 10 years ago, I wrote a column in some dismay at the eulogies for the dead former US president (and crook), Richard Nixon. Instead of the day of mourning called for by President Clinton, I suggested a day of rejoicing. I feel very much the same about the oceans of drivel pouring out in honour of the dead former president, Ronald Reagan.

Reagan was as corrupt as Nixon, if not more so. The Iran-Contra scandal, which he and his gang orchestrated from the White House, was far worse than Watergate.

It caused chaos in Central America, as Nixon's war did in south-east Asia. Reagan specialised in folksy rightwing jokes. He (or his speech writer) once cracked that the difference between democracy and people's democracy was the difference between a jacket and a straitjacket. He loved democracy, in other words, provided it has nothing to do with people. - Dawn/The Guardian Service

In response to allegations

This article is in response to "Allegations most unbecoming" by Mr Javed Jabbar, and published in this newspaper on June 3. Political opponents and Pakistani governments have always relied on unfounded allegations against the Jamaat-i-Islami and the Muttahida Majlis-i-Amal (MMA) whenever the latter have questioned distasteful happenings in the contemporary political scene.

Lately, this grand religious alliance apprehended a well-orchestrated drive against the changes made at the behest of western powers in the syllabi, and frustrated a global conspiracy aimed at hitting the country's ideological foundation.

In a related move, the leadership of the MMA also warned against a plot which was hatched in connivance with a religious minority against the education system of our country.

This well thought out plan, translated into action through democratic and peaceful criticism led the propaganda machine of a religious minority to portray the MMA in general and the Jamaat-i-Islami in particular as a religious group persecuting Ismailis merely on religious grounds.

Regrettably, the propagandists of a respectable religious minority totally misunderstood the motive of the MMA's criticism of the Aga Khan Foundation (AKF) for taking over the country's education boards at a time when colonial powers were bent upon changing Pakistan's syllabi to alienate its youth from the country's Islamic ideology.

Everybody in Pakistan, including the religious parties, respects the AKF's services in education and health. The JI has no personal agenda or grudge against the foundation and has every respect for the foundation as one of the many organizations offering social services in a developing country like Pakistan where the social sector is most neglected.

The party understands that the AKF is among the leaders, in social services, due to its vast network and huge financial backing from within the country and abroad.

It has been proved beyond doubt that recent attempts to remove chapters on holy Muslim personalities and the teachings about jihad from the syllabi werea western conspiracy since the people who have been condemning the Islamic values of modesty and jihad were involved in it.

Besides, many western countries have pumped in huge amounts in aid for the cause of 'modernizing' Pakistan's education system as if it was the biggest problem facing the world, while totally ignoring all catastrophes: hunger and poverty elsewhere and particularly the human cost of the US-led aggression in Afghanistan and Iraq.

The JI feels that the AKF was unknowingly or deliberately used by the colonial powers to implement their agenda of scrapping Islamic ideology and principles from the minds of the new generations under the cover of liberty and development.

The party is of the view that organizations like the AKF, which believe in homework and research, could not have overlooked the real agenda of western donors behind their prompt and over-generous aid to Pakistan.

The JI has no objection if the AKF runs schools as it has been doing, but controlling educational boards will allow it powers that interfere with the syllabi and to make arbitrary changes in this, which is wrong in principle.

Why a religious minority should not control the education system in a country founded on religious ideology is because education is important for the mental orientation of young generations, and the preservation or degeneration of ideology in the minds of children depends mainly on the kind of education they receive.

Any religious minority, no matter how sincerely it tries, will naturally not fulfil these requirements for the majority, and its own religious concepts and prejudices will automatically be reflected in all educational services, bringing about a clash of interests with the majority.

For this reason, nowhere in the world is a religious minority enjoying a key role in controlling the education system of the majority. The handing over of a Lahore college back to a Christian missionary is a glaring example.

It has been proved that western powers have always had their nefarious agenda in Pakistan materialized through minority religious groups acting as "front man" in the past.

In order to warn the masses about the "plans" of foreign powers, the MMA leadership is augmenting its vision and point of view in the light of proven historical notions like the exploitation of the Qadiyanis for eroding the concept of jihad and the finality of prophethood.

The nation is a witness to the fact what service was done to the country by those who now claim to be its "founders" and of those who were dubbed as its "opponents". The JI always defended the ideological and geographical borders of the country through every available means.

Those who have been following the protests can vividly recall that mobs in Pakistan always resorted to violence when countered by the police. The burning down of AKF centres when the police roughed up an angry mob protesting against the cold-blooded assassination of their spiritual father did not ensue from the political connotations of the MMA leadership.

The AKF centres were among dozens of banks, petrol stations, restaurants and vehicles set on fire when the police prevented protesters from giving vent to their anger by raising slogans, and used teargas and batons to disperse them.

The JI has been the victim of police highhandedness of police many times in the past. Potential beneficiaries of the party's strife with respective regimes in the past have always used such occasions to settle their scores.

Such mischief mongers infested violence in the peaceful and democratically organized rallies and protest demonstrations. The JI has always condemned violence of every kind.

It is on record and the footage of many satellite TV channels that MMA leaders kept appealing to their workers and the students of Mufti Shamzai to exercise patience and maximum possible restraint, and tried to channel their anger and the emerging response by peaceful means.

But mishandling of the situation by the administration caused the mob to turn violent, and properties, including AKF centres, were made its victim owing to their location and not because of any religious affiliations.

The writer claims that a secular state can have more truly religious values than a religious state applying non-Islamic methods of dictatorship, monarchy, persecution of minorities and torture in police stations.

True, the persecution of minorities and the torture of prisoners is unIslamic, but again the writer has simply ignored the fact that leaving aside dictatorship and monarchies, no Muslim state is known for persecuting minorities and torturing prisoners more than the US which calls itself the champion of civil, human, women and all kinds of rights which it denies to the Muslims.

Can the worthy writer cite any example of a Muslim country to match the outrageous genocide of Muslims in Afghanistan and Iraq by the US forces using sophisticated bombs and depleted nukes to kill unarmed men, women and children?

Can he bring another example from a Muslim country to match the torture and rape of the Iraqi Muslims by the US troops? Before stating that speeches by Pakistani religious leaders should not be printed in the media, it should not be forgotten that the US and its allies have been invading Muslim countries over the last three decades without substantial reason, but no writer calling himself "enlightened" and "secular" has dared to condemn it openly and publicly.

I would like to urge the intelligentsia and the common people who cherish civil liberties not to turn a blind eye to the massacre of the Muslims at the hands of so-called progressive nations.

They should abstain from promoting a sense of deprivation among the minorities in Pakistan because this incites the westerners to use these minorities for furthering an anti-Islam agenda in violation of the Constitution and the law.

The writer is chief of the Jamaat-i-Islami, Pakistan.

Allies, then and now

Coming in the middle of the war in Iraq, it is inevitable that the 60th anniversary of D-Day will be used by both sides - pro-war and anti-war - to support their respective arguments.

Comparisons between Normandy on June 6, 1944, and Baghdad on June 6, 2004, do indeed reveal a great deal. Primarily - sadly - what stands out is the evolution of concepts such as "coalition", "liberation" and "justice" from genuine positive values to mere words. Sixty years on, we speak the same language - but it doesn't have the same meaning.

"The Allies" was the term used to refer to those fighting the forces of fascism. Everyone knew who it referred to: Britain, the United States, France, Russia and their partners like Australia and New Zealand battling on more distant fronts.

The force that landed on the beaches of Normandy in 1944, and that eventually inflicted defeat on the Axis Powers (Germany, Italy, Japan) was a genuinely multinational one, including not just a large number of countries but - crucially - all the major non-Axis powers. It was an alliance of quality, not just quantity.

"The Coalition" is the term commonly used to refer to those fighting Ba'athism and terrorism in Iraq. It too is a multinational force, with soldiers from many countries.

Everyone knows, though, that this coalition really has only two (or rather, one and a quarter) countries in it: the United States and, many notches behind, Great Britain. All the other partners - Poland, Australia, Italy - are merely window dressing.

Crucially, major global powers like Russia and China are missing. Even the major European powers, France and Germany, are not in it. This is a coalition simply of quantity - it has no quality, no depth.

Fascism was the foe in 1944, an internationally acknowledged force of evil. Guilty of innumerable conquests and abuses (the full scale of which only became apparent later), Hitler's Germany clearly posed a threat to global peace and security and had to be stopped.

In the Second World War the moral dilemma was not whether a country should go to war against the Nazis, but how it could justify not doing so. The Normandy landings were made in a just cause.

Today, we are told the enemy is the evil Saddam Hussein and terrorism. The case for war is presented as equally unavoidable, a necessity for global peace and security. But the evidence to prove the case keeps being shown up as weak, false, utterly lacking in credibility. The mythical weapons of mass destruction are something only Tony Blair still has hope of finding.

No connection has been established between Saddam's Iraq and Al Qaeda, though there are plenty between post-Saddam Iraq and Islamic terrorism. In sharp contrast to the Second World War the question in Iraq's case has from day one been of how to justify war. The lack of moral clarity that characterized it when it started over a year ago is infinitely more marked today.

The Allies landed on Normandy to liberate Europe from Nazi rule. It was a genuine liberation: a change that removed an oppressive and cruel regime and replaced it, eventually, with a democratically elected local government. (The exception of course was Eastern Europe which swapped the shackles of Nazism for the marginally less tight shackle! s of communism.) France, the Netherlands, Belgium.. and even (West) Germany all went on to become strong, self-ruling democracies.

"Liberation" is the word being bandied about in Iraq too. But this is a very different kind of liberation. It entails the replacement of an undoubtedly cruel and repressive regime with, first, rule by the Coalition Provisional Authority (i.e. direct US rule) and then, after June 30, with rule by the Iraqi Interim Government (i.e. indirect US rule).

Genuine democracy and Iraqi self-empowerment are nowhere to be seen. Proof, if any were needed, lies in the huge incongruity of Iraqi "liberatees" fighting their American and British "liberators".

The Nazis were guilty of massive abuses of human rights - arguably, of the most systematic and organized abuse of human rights ever seen. In Western Europe, at least, much has been done to uncover, to punish and to record for posterity, exactly what the Nazis did. The objective was to ensure that such abuses were never forgotten so that they would never be repeated. To date, that goal has been achieved.

Saddam's regime also committed gross violations of human rights. (Indeed, they provided yet another justification for the US and Britain to attack Iraq). But since victory, the efforts by the CPA to uncover and investigate the crimes of the Saddam regime have been negligible.

Mass graves are recorded only by journalists; victims remembered only by their families. And prisons like Abu Ghraib, synonymous under Saddam with blood-curdling screams, torture and killing, have been given new leases of life as American torture centres. "Human rights" in Bush's Iraq is a term associated with the shame of the guilty.

The genuine liberation of Europe in 1945 was followed by genuine reconstruction. The Allies helped rebuild not just the victims of Nazi occupation, but also the perpetrator - (West) Germany. Post-war reconstruction was done to benefit the people of Europe; the only return sought by the US was long-term peace.

The results of that reconstruction are obvious for all to see: a prosperous Europe, with a prosperous Germany shorn of the aggression that springs from hardship. Reconstruction is also being carried out in post-Saddam Iraq. But while the promises of a better life for the Iraqi people are thick and plentiful, delivery is not.

The little "reconstruction" there has been comprises mostly of the award of lucrative contracts to those filling Bush's Republican coffers: Halliburton and co. To date, such firms have been shown not only to be not delivering to Iraq, but even to be ripping off US taxpayers - Halliburton was exposed as overcharging the US government for its services.

As American dreams of owning their personal Iraqi oil pump disappear in the rising US body toll, Washington is focused on getting out of the Iraq quagmire. Reconstruction for the Iraqi people is fast disappearing off the American radar screen.

But the biggest difference between the Second World War and the Iraq war lies in the perceptions of the future. The D-Day landings at Normandy heralded the end of one era and the beginning of another of freedom and democracy for Europe. The feelings pervading Europe were hope and optimism. Europeans and Americans alike looked forward to a better future.

Globally, too, there was a feeling of freshness, renewed vigour. The sentiment that followed the Second World War was a determination never to forget and never to let the horror of that war be repeated. Multilateralism and reconciliation, the United Nations - these were the post-war buzzwords.

Where is the hope and optimism in Iraq? American troops on the ground, battling Iraqi "terrorists" and "Saddam supporters", certainly do not feel it: many are just praying to get home in one piece.

For Iraqis, there is even less to feel optimistic about. US occupation has become just that - a foreign power ruling by the might of the gun, suppressing local opposition, indulging in abuses against the civilian population, furthering its own ends.

A foreign power, moreover, presiding over a situation of deteriorating control and stability - of escalating violence. Iraqis are pushing for the Americans to go home.

But even if Washington tomorrow decides to cut and run (which, given the presidential elections in November, is quite possible), that will not necessarily hail immediate salvation for the Iraqi people. US occupation has aggravated the problems caused by years of Saddam's misrule and international sanctions: Iraq will remain a mess for a long time to come.

What is the global sentiment provoked by the Iraq war? Hostility, anger, unilateralism, Europe and America attacking each other, Europe split internally between those supporting Bush (Britain, Italy) and those opposed, the former split into pliant pro-US leaders (Blair, Berlusconi) and anti-war populations, a world divided between Islam and the West - in which Muslims are seen as 'the other', people to be feared and fought.

The world today does indeed present a gloomy, depressing picture. Three simple words capture perfectly the difference between D-Day 60 years ago and June 2004 - "absence of hope".

E-mail: iffatidris2000@yahoo.co.uk.