Uber, Careem exploit their drivers

App-based cab companies Uber and Careem are allegedly exploiting their drivers who are, in fact, the manpower asset for these transportation networks operating in major cities in Pakistan.

It is pity that the drivers, who are called “Captains” by Careem, are hired on attractive terms and the companies often show them green pastures in the advertisements to attract them, but when they enter into the real business, they face a number of issues including meeting fixed targets of trips to earn commission and imposition of unnecessary fines, invisible deductions and taxes.

A video was viral on social media recently showing a Captain of Careem ransacking the Gulistan-e-Jauhar office of the company in protest against a reduction in his payments. He was using foul language (that is why it cannot be shared here) and can be seen trying to sprinkle petrol on his clothes to set him ablaze in the protest. Although there were no further details in the video as it was filmed by an armature user of a mobile phone camera, certainly he was suffering extreme mental stress due to the company’s policies. He was seen saying the company is exploiting the driver and frequently reducing their rates.

A group of drivers of both companies (Uber and Careem) staged a protest demonstration outside Karachi Press Club early this month and they had similar complaints. A news item published in daily Dawn on 3rd December quoted representatives of the driver saying that their management was reducing their share, exploiting their working hours and deducting a certain percentage in the name of tax.

APS massacre: Have we forgotten?

It was a tragic day for the entire humanity when innocent students of Army Public School (APS) in the fully-guarded military area in Peshawar were massacred by the heavily armed and dreadful 7 Taliban terrorists on 16^th December 2014. It was actually more than a tragedy as the helpless students and their teachers (a total of 150 including 132 children) were hit with bullets in their heads and chests by animal-like terrorists of Tahrik Taliban Pakistan and there was no one who can save them. A military operation later killed all seven terrorists and saved the remaining students and teachers present in the school.

The TTP spokesman accepted responsibility for the attack terming is as revenge for the Army Operation “Zarb-e-Azb” in North Waziristan. The TTP spokesman released the names and photos of the terrorists, all of them foreigners.

1. Abu Shamil (also went by Abdur Rehman)— a Chechen fighter and thought to be the ringleader of the group
2. Nouman Shah Helmand — an Afghan citizen from Helmand Province; the U.S. had placed a $500,000 bounty upon Nouman
3. Wazir Alam Herat — an Afghan citizen from Herat
4. Khatib al-Zubaidi — an Egyptian citizen
5. Mohammad Zahedi — a Moroccan citizen
6. Jibran al-Saeedi — a Saudi citizen

The entire Pakistani nation was in deep shock and even other nations were mourning the deaths of the APS students. The Indian government announced national mourning to show solidarity with the Pakistani children. Iranian President Hassan Rouhani condemned the attack and sent condolences to the families of victims and Chinese President Xi Jinping and Premier Li Keqiang both sent separate messages of condolences to the Pakistani leaders. Later Chinese Ambassador Sun presented a cheque for $50,000 to the victims of the attack.

Protests erupted across the country against this gruesome incident. I remember we were holding protests every week in Karachi and then every month on the 16th to mourn the death and arrest of the responsible. Once we held a protest demonstration at Guru Mandar chowk near the Binoria Mosque in New Town. A huge protest demonstration was held in Clifton against Molana Abdul Aziz of Lal Mosque, Islamabad who, in a statement, had supported the Taliban.

Pakistan's government took swift actions including intensifying the military operation against the Taliban in tribal areas, lifting the moratorium on capital punishment and establishment military courts for speedy trial of the terrorists. A 20-point National Action Plan was made with the support of all political parties which contained commitments and measures to curb terrorism, extremism in the society and protection of minorities.

The 21^st Constitutional Amendment was passed by the Parliament unanimously on 6^th January 2015 allowing the trial of terrorists through military courts for the next two years. This period was further extended for the next 2 years in 2017. But the opposition parties in January 2019 refused to give further extension to the Military courts as the ruling party did not have a two-thirds majority to amend Constitution.

Despite the passage of 5 years, there is no progress on the National Action Plan and the government seems to have no intention to even talk about it, leave alone take measures to implement it.

Following were the 20-points of NAP:
1. Implementation of the death sentence for those convicted in cases of terrorism.
2. Special trial courts under the supervision of the Army. The duration of these courts would be two years.
3. Militant outfits and armed gangs will not be allowed to operate in the country.
4. NACTA, the anti-terrorism institution will be strengthened.
5. Strict action against the literature, newspapers and magazines promoting hatred, extremism, sectarianism and intolerance.
6. Choking financing for terrorist and terrorist organizations.
7. Ensuring against re-emergence of proscribed organizations.
8. Establishing and deploying a dedicated counter-terrorism force.
9. Taking effective steps against religious persecution.
10. Registration and regulation of religious seminaries.
11. Ban the glorification of terrorists and terrorist organizations through print and electronic media.
12. Administrative and development reforms in FATA with an immediate focus on the repatriation of IDPs.
13. Communication network of terrorists will be dismantled completely.
14. Measures against abuse of the internet and social media for terrorism.
15. Zero tolerance for militancy in Punjab.
16. Ongoing operations in Karachi will be taken to its logical end.
17. Balochistan government to be fully empowered for political reconciliation with complete ownership by all stakeholders.
18. Dealing firmly with sectarian terrorists.
19. Formulation of a comprehensive policy to deal with the issue of Afghan refugees, beginning with the registration of all refugees.
20. Revamping and reforming the criminal justice system.

Dalit Baghri Woman in Sindh raped on charges of stealing tomatoes

A video is viral on social media today, which shows a number of Baghri (Dalit) community women protesting in Wahi Pandi town in Johi taluka (Dadu district) in Sindh against kidnapping and then torture and rape of a young Dalit girl on charges of stealing tomatoes from an agricultural farm of an influential person.

The Sindhi channel KTN reported the incident in which the victim girl along with other women was narrating the ordeal with the girl. They said unknown miscreants attacked their homes and tortured the male members on alleged stealing of tomatoes from their fields. They later kidnapped the girl and tore apart her shirt as well.

These poor Dalits minority communities are experts in agriculture work and in Sindh, most of their women work on the forms for daily wages.

In Pakistan, tomatoes were becoming costlier in recent months due to short of crop production in Sindh and Balochistan due to heavy rains. After imports from Iran, the prices of tomatoes have come down substantially.

Police were not providing any support or security to the victim's family.

Uncontrollable price hike

Prime Minister Imran Khan at his party’s meeting in Islamabad on November 15 termed the current spell of the price- hike in the country as “artificial” and a “conspiracy” against his government. The economists, however, believe that it is not a conspiracy against any government but , in fact, a mismanagement and bad governance on part of the government machinery especially at the provincial and local governments’ levels that have miserably failed to maintain control over prices.

They have also argued that the present price hike is mainly because of rise in inflation rate because of a number of economic factors: substantial increase in the prices of the utilities like gas and electricity, petroleum products, reduction in agriculture production and devaluation of Pakistan rupee, which caused increase in rates of imported products. Government’s increased borrowings from banks and international lenders because of the low tax recovery and increase in interest rates are other some economic reasons for rising inflation, said a senior economist Dr. Shahid Hasan Siddiqui, Chairman of Research Institute of Islamic Banking and Finance.

He said the hoarders and mafias also play their role in increase in prices of commodities and products. They have official machinery’s support. Increase in sugar and wheat prices are some examples, he added. Indirect taxes have also increased, which has affected the middle and poor classes negatively, said Dr. Siddiqui.

The provincial food departments in both Sindh and Punjab have failed to control smooth supply and demand of the essential commodities like wheat and flour. Flour millers in Sindh have been complaining that the commodity traders are hoarding the wheat to manipulate the prices. Moreover the provincial government’s food department did not procure wheat in Sindh this year on the pretext that the government godowns were full due to last year’s storage. This has resulted in exponentially increase in price of a 100 kg bag of wheat in November against in April, when new wheat crop arrived in the market.

Flour millers say this year wheat crop was not short but due to corruption, mismanagement and inefficiency in the provincial governments the prices have increased and are still rising. This year the government had also allowed export of wheat, which was later banned in September but a lot of the new crop’s products were already sold out abroad. According to the statistics of Department of Plant Protection under the Ministry of National Food Security and Research Pakistan exporters send around 17655 tons of wheat between the period from August 1, 2018 to August 25, 2019.

The millers said when the government had realized that earlier estimates of the supply were not correct it should have allowed wheat imports to fill the gap. But it was not done.

It is a matter of the fact that Sindh’s wheat crop comes early in the market and this year due to provincial food department’s failure in official procurement of the commodity the profiteer traders found an opportunity to make profits, so they purchased the crop at cheaper rates from Sindhi growers and sold the commodity in Punjab markets at higher margins. It is a matter of the fact that increase in wheat price has not benefit ted the growers in any case. Only traders have minted the money.

Interestingly, in Punjab there was an official ban on the movement of wheat from the province so with arrival of new crop this was locally consumed. But earlier supplies from Sindh to Punjab resulted in artificial shortage of wheat in Sindh, thus the price of 100 kg bag of wheat was increased to Rs. 4,400. The federal cabinet’s Economic Coordination Committee (ECC) on hue and cry had to ask the Pakistan Agriculture Storage and Services Corporation (PASSCO) to release 650,000 tonnes of wheat to the three provinces — Khyber Pakhtunkhwa (KP), Sindh and Balochistan. Sindh has reportedly received 100,000 tonnes from PASSCO so far.

The expert term the price hike because of full control of mafias on supply of essential food items like sugar, wheat flour, milk. The district administrations which are responsible for price control have, in practical terms, miserably failed to control the prices. For example, the Commissioner of Karachi has fixed price of a liter of milk at Rs. 94 but nowhere in the city it is available at the official rate. But it is being openly sold at the rate of Rs. 110 to 120/ liter.

“We have been raising our voice at the meetings on price control at Karachi Commissioner office on regular basis, but the administration seems helpless before these profiteers,” said Shakeel Baig, Chairman of Consumers Rights Protection Council of Pakistan.

Similar is the situation of prices of roti or naan. The government has asked the Tandoor owners to sell a 150 gram roti at the rate of Rs. 10, but it is not being sold at official rate anywhere in the city. “We have conducted our own research in the market and we have found that normally Tandoors sell a naan which is of weight of only 110 or 120 grams, which cost them around Rs. 8 after calculating all expenses, but they are not ready to reduce the prices,” he said. Tandoor owners however have their own complaints of increase in flour and gas prices.

In August the Prime Minister after public complaints had asked the gas companies to reduce gas rates for naan/roti makers so they are able to sell roti at reduced prices. But reports from different cities indicated that prices were not reduced anywhere.

Electricity, gas and petroleum prices have increased in Pakistan since early 2018, which has affected every section of the society. The Gross Domestic Product (GDP) growth rate has shrunk this year to 3.1 percent and the growth in large scale manufacturing was reported negative due to financial crisis.

The recent sky-rocketing prices of fruits and vegetables especially tomatoes due to failure of local crops has also made the lives of consumers miserable. Once the prices of a kilogram of tomato crossed Rs. 400, the government found no other solution but to allow imports of tomatoes from neighbouring Iran, which took some time to reach Pakistani markets.

Tomato import from eastern neighbor India is already banned due to technical reasons. Some three years back Pakistani quality managers found infectious germs in Indian tomatoes, so they put a ban, which is continued. However, local production of tomato is quite sufficient to suffice the country’s demand. Sindh is the first province, where crop ripens first followed by Southern Punjab and Balochistan. But this year tomotta tomato crop in Sindh was badly affected due to climate change effects. It was destroyed at its sowing stage due to heavy monsoon rains followed by untimely rains in September and October, which resulted in heavy losses to growers. The local farmers had to re-sow the tomato seeds after end of wet spell, but the crop was 40 percent less, a local farmer said. The local tomato crop from southern Sindh especially from Badin district has started arriving in Karachi’s vegetable market, however it is still insufficient to fulfill local demands.

With the arrival of Iranian supply the prices of tomatoes have substantially dropped to Rs. 200 a kilogram.

Ban on Plastic Bags

By Shujauddin Qureshi

Despite the fact the government of Sindh has imposed a ban on use of plastic bags in the province from October 1, 2019, there seems a gigantic task before the provincial administration to implement the ban. There seems an impact on use of plastic polythene bags in the city as it is openly used by vendors in all parts of Karachi city.

Although the environmentalists have welcomed the campaign and committed to making it successful, there are many strong reasons for others that this campaign is about to fail.

The main reason is the resistance from the manufacturers and traders that said no alternative is provided to them to replace plastic bags. The notification states: "....only Oxo-biodegradable plastic/shopping bags of 30-40 microns or weight from 6 to 28 grams are allowed to be manufactured, sold/purchased and used in Sindh."

A section of the traders has even demanded the provincial government provide them thousands of cotton cloth bags free of cost so they can replace plastic bags. The manufacturers fear widespread unemployment as a result of the closure of the factories. A huge amount of plastic raw material is already imported and stored in godowns, waiting to be processed and converted into plastic bags. Whereas the manufacturers say they have invested millions of rupees in the import of machinery and all would be wasted if they stopped making the plastics.

Although the government seems to be committed to implementing the ban as the spokesman of the provincial government Murtaza Wahab told newsmen at a press conference in Karachi that the Environment Protection Agency has raided many places where the ban was being violated. A wholesaler in Khori Garden wholesale market was raided and EPA confiscated tons of plastic bags and a plastic bags manufacturing factory in Jamshoro was sealed.

In the past similar attempts were made in all four provinces but remained failed. In 1994-95 both Sindh and Punjab governments banned plastic bags, but that remained ineffective. In Islamabad, a ban is recently imposed on the use of plastic bags.

Some critics say the government has not done any homework before launching the campaign and no alternative is provided to the public, traders and manufacturers. "It is just like previous campaigns by the government like compulsory use of helmets by the motorcyclists," a shopkeeper said. 

Forcing to make content on Kashmir

Bloggers/Vloggers being bullied to make content on Pakistani version of "Kashmir" issue

By Shujauddin Qureshi

After Indian Prime Minister Modi's bomb-shell decision regarding Indian-held-Kashmir on August 5  revoking the occupied Kashmir's special autonomy through a rushed presidential decree, the social media zealots have become so active and have started making the lives of the independent social media activists miserable.

The so-called Pakistani Jihadi trollers (who often hide their identities on social media) have started bullying and forcing prominent bloggers and vloggers and personalities to make pro-Kashmir blogs or issue statements. When some ignored their unjustified demands, they started their ugly tactics of abusing and threatening them through social media.

The first such incident I noticed on social when a prominent V-Loger Irfan Junejo with 779,167 subscribers on YouTube and 52.8K followers on Twitter twitted and made a video regarding such intimations by "aliens".

I make it clear here that I did not know the young Video Youtuber Junejo (maybe because I am seldom interested in his topics) and I was not a follower of Junejo previously, but after that incident, I started following him on both Twitter and Youtube.

Junejo has also made a special video on Youtube on this topic and said he will not make any video on Kashmir under any duress. It is a pity that social media platforms are abused by religious zealots and extremist elements as they want to spread their point of view by hook and crook. Otherwise, they use abusive language and adopt immoral and illegal tactics to force the person to do so. It is quite difficult to find who else has been bullied or forced to make their posts or videos on the Pakistani version of the Kashmir issue, but I am confident that their numbers must be in the hundreds.

"It was not a request, but a proper bullying", he states in his video: https://youtu.be/XDfP8Xcf-P4. Interestingly, his following increased after such posts despite the fact the zealots had started unfollowing him. He twitted on August 18 "Cancellation se pehle - 47.4K followers. After cancellation - 47.9K followers."

The second prominent V-Logger and social media activist was Junaid Akram, whom I follow on FaceBook and YouTube because I like the topics he often touches on. I am also fond of libraries and books and he promotes libraries in Karachi. I am also his admirer because of his straightforwardness and candid opinions on the critical issues of society. On his YouTube channel, he has 292,862 subscribers and  820,727 people like his Face Book page "Khalli Kara👦!".

He has also made a video in the Stories on Facebook (which often expires after 24 hours) complaining about bullying by the trollers. According to him they were also compelling him to make videos on Kashmir according to their (former's) opinions. He has given those trollers a befitting reply in the video and I hope they were using Burnol ointment on their scars.

The third victim of this smear campaign by zealots was not other than Malala Yousufzai, the Nobel Peace Award laureate as usual, who has been receiving such types of criticism from those who often doubt his love to Pakistan. I just quote a twit by his father Ziauddin Yousufzai, who replied in a previous twit by TV anchor Irshad Bhatti. The so-called journalist was so uninformed that he asked on Twitter why Malala has not issued a statement in support of Kashmiri people who suffer because of the curfew in the Indian-held Kashmir. This ignorant journalist with his doubtful credentials had received an apt reply by her father asking the former to read Malala's 8th August statement on Kashmir.

Ends

Thirsty Sindh

By Shujauddin Qureshi

A picture of a dead woman with her deceased child is under circulation on social media these days as its caption states that both had died because of thirst in Katchho area in Dadu district. According to reports, they had lost their way in the semi-hilly arid area in Johi Taluka as their water bottles dried up after some time and there was no other source of water around. Their tragic deaths portray the worst situation of water availability in many areas of Sindh.

On daily basis, we receive news about the citizens’ protests in Badin district against water shortage, whereas there are other far-flung areas where people are unable to raise their voices against the shortage of the basic necessities of life – water.

It is pity that the state of Pakistan has never thought about the plight of these people. The government has never seriously considered providing water to the arid areas, despite the fact many projects were initiated in the past.

Except for the areas, which are close to River Indus or its canal system, many areas in Sindh are dry and arid where water is unavailable, and even the subsoil water sources are depleting due to climate and ecological changes. Katcho and Kohistan (in Dadu and Jamshoro districts) and Thar (including Achhro Thar) are the major geographical areas, where people are deprived of water.

Most of the population migrates from these areas in search of water, but those who cannot afford to migrate have to walk for miles to fetch water for daily consumption. I know many areas in Thatta and Badin districts are also facing water shortages despite the fact the irrigation system exists in those areas. That issue is the mismanagement of the water distribution system by the most corrupt provincial Irrigation department, which allows the influential landlords to steal the water of the tail-end users.

But where there is no canal system, no alternate water source is available and the government has never tried to provide water to those areas. The areas along Khirthar's hilly range spread in the right borders of Sindh are the most thirty areas.

Mother Nature has also kept these arid areas deprived of water sources and they mostly rely on rain waters. Rains in Sindh areas are declining due to various reasons including climate change and man-made depletion of forest cover due to the greed of the landlords who have acquired leases of the forest lands and cut the trees to use the land for agricultural purposes.

Katchho is naturally a deprived area of water. Although some natural waterways are available, they have been destroyed due to faulty development. For example, Main Nara Valley (MNV) drain used to flow from the Katchho area but due to the incomplete Right Bank Outfall Drain project, that source of water is unavailable these days. This major artery has been converted into a cesspool of gutter water carrying the most polluted saline water from industries, municipal and agricultural lands in upper parts of Sindh, Balochistan and Southern Punjab. This water is ultimately discharged into Manchhar lake, which is already destroyed.

The Chief Minister of Sindh, Chief Justice of Sindh High Court or any other authority has still not been moved by this sad picture as they have not taken any notice of this double death of a mother and her child in the Katchho area due to thirst. After some time, we would also forget this picture and the plight of the Katchho people would continue forever.

Ends

Repeating the same mistakes

Shujauddin Qureshi  May 26, 2019

Pakistan is facing the worst-ever fiscal deficit with increasing expenditures and declining revenue collection. The fiscal deficit rose to its peak at 5 per cent in nine months of the current fiscal year (2018-19), one of the highest in the decade.

According to official figures released by the Ministry of Finance early this week, the country’s fiscal deficit went up to Rs. 900 billion which is 2.3 per cent of Gross Domestic Product (GDP). Revenue collection, however, remained dismal till March 2019 as the Federal Board of Revenue (FBR) collected just Rs. 3,582 billion which is 9.3 per cent of the GDP as compared to 10.4 per cent during the corresponding period of previous fiscal year. Pakistan is still short of Rs 816 billion in the revenue target, which the government is trying to achieve through a tax amnesty scheme.

Every year the tax collection machinery shows a dismal performance and the federal government has to revise revenue collection targets several times during the year. The present PTI government had projected a tax revenue target of Rs 4,398 billion for the fiscal year 2018-19, which seems to be a gigantic task before this government. It has made many adjustments in various targets after coming into power in August last year as well as recent changes in Finance Bill 2018-19 and its financial team by installing a private-sector income tax expert as head of the FBR, besides importing its Finance Ministry’s head Dr. Hafeez Shaikh and State Bank’s Governor Dr. Reza Baqir.

The total expenditures, however, remained on the higher side as they touched 14.3 per cent of the GDP in the first nine months of the current fiscal year. Last year as well, during the corresponding period the total expenditure remained higher at 14.7 per cent of GDP in nine months.

“Despite less revenue collection, the government expenditure remains almost the same or higher than the targets in the budget as no government department is ready to lower their expenditures,” says Muzammil Islam, a senior economist based in Karachi.

Talking to TNS he says no integrated method is adopted at the time of budget-making to fix the target for income and expenditure. “All estimates, thus, prove to be incorrect when we look at the figures at the end of the fiscal year. Interestingly, the government lowers the revenue targets during the fiscal year, but it has never lowered its expenditures.”

According to estimates by the World Bank and IMF, Pakistan has the potential to collect Rs 8000 billion on account of revenue collection, but despite fixing its targets at a lower side, the FBR has always failed to meet its targets.

Similar is the situation in the four provinces where they have a lot of potentials to raise their revenues through taxation. The provinces also look for their share in the divisible pool under the National Finance Commission (NFC) Award, which last adjusted its formula in 2009. Under the 7th NFC award, the four provinces are collectively entitled to 57.5 per cent from the divisible pool taxes which also included income tax, wealth tax, capital value tax, general sales tax (excluding services), customs duties and federal excise duty.

According to the Constitution of Pakistan, provinces can collect income tax on agriculture income, general sales tax on services and duties on properties, besides other levies like motor vehicle tax and stamp duties, etc.

“Provinces have never bothered to raise their revenues by exploiting their potential and at the end of the day they complain about fewer transfers from the federal government,” adds Muzammil.

The present government, in a bid to save the economy’s downslide, has taken various difficult decisions like allowing drastic devaluation of the Pakistani rupee, an increase in the discount rate by the State Bank to 12.25 per cent and an increase in power and gas prices. This has impacted common people a lot as the inflation rate has touched double digits and prices of almost all essential items have increased exponentially.

Additionally, the PTI government has also announced a tax amnesty scheme to whiten the undeclared assets, expenses and sales in order to generate more revenues. The amnesty scheme 2019 launched through the promulgation of an Ordinance on May 15 provides the facility to declare black money by paying lower taxes for the fiscal year that ended on June 30, 2018. The government expects to generate Rs 200 billion through this scheme.

The tax rate will be 1.5pc for whitening domestic immovable properties like real estate and for foreign assets, the fair market value will be determined at the exchange rate prevalent on the date of declaration.

The tax rate on undisclosed sales or supplies will be 2 per cent, which will also be offered for the first time for bringing undeclared sales into the tax net. This will cover the sales or supplies chargeable to sales tax or federal excise duty, which has not been declared or has been under-declared up to June 30, 2018.

This facility will be available for both individuals and companies and those who had filed, or not filed, their income tax returns for the tax year 2018. The filers are offered an option to revise their returns.

This is the second amnesty scheme in a row as last year former government of PML-N, under the then prime minister Shahid Khaqan Abbasi, had announced a similar amnesty scheme, which was severely criticised by the PTI leaders and present Prime Minister Imran Khan. He had termed the amnesty scheme of April 2018 a shameless attempt by then Prime Minister Abbasi to save criminals.

It may be noted that the PML-N government led by Mian Nawaz Sharif had also given three earlier schemes to bring black money into the mainstream economy in 2013, 2015 and 2016.

“First they steal money and then introduce tax amnesty schemes,” said Khan at a public rally in Hyderabad on April 6, 2018.

The main slogan of the PTI during the July 2018 election was to bring back the looted money and utilise it for the development, education and health sectors of the country. But instead of finding the real defaulters and even those who did not avail of the previous scheme, the present government has provided across-the-board amnesty.

“The tax rate of 1.5 per cent on properties is minimal so why the government cannot easily recover the tax at a normal rate on visible assets on the ground,” asks Dr. Shahid Hasan Siddiqui, Chairman of the Research Institute of Islamic Banking and Finances.

Talking to TNS Dr. Siddiqui says the country is facing a serious external sector crisis and needs foreign exchange, but instead of focusing on increasing exports, the government is providing relief to plunderers.

The government has not taken any serious measures to plug corruption and money laundering. It is doing the same things which the previous government did for years. Corruption is still a norm in government departments and there is no relief to the common people. They have lost their jobs as unemployment is increasing.

Appeared in The News on Sunday, May 26, 2019

Empowered by business

Shujauddin Qureshi

Khadija Bano, a worker living in Musharraf Colony in Karachi, plans to set up her own towel processing system on the first floor of her newly constructed house. Married to a worker with three children, Bano has been working for the last 11 years. She processes towels, including bleaching, dying and packing.

She started learning towel processing in a nearby factory and after mastering the skill in eight months, she started doing the same work at her home, she recalls.

A vendor who has installed the required machines at her home, also provides her with other materials, such as chemicals, powders, etc, for dying towels on a piece-rate basis. He also charges rent for the machines.

Bano says that after deducting all expenses, including utility charges, she can earn Rs15,000 to 16,000 every month.

Sometimes, there is more work which increases her income, but there are times when there is less work. When she has bigger orders, she engages other working ladies in the neighbourhood and shares the compensation with them.

But she complains that the work she does has no job security. Labour laws are not applicable to such work and employers are just interested in the completion of their work.

“We have made our own association, which is affiliated with HomeNet Pakistan, a network of home-based workers’ associations,” informs Bano, adding that she and other home-based workers have got a health insurance card which covers hospital expenses worth Rs200,000 annually for the entire family. This health insurance facility is provided by a private insurance company with financial support from UN Women.

Proud to be a self-employed and empowered woman in a poor locality, Bano says her family went through difficult times as her husband became seriously ill a few years ago. “I managed all the expenses of the hospital,” she says. Now her husband has recovered and is doing job in a factory. Belonging to a Katchi Memon family of Karachi, Bano has a daughter and two school-going sons.

“Currently, I am in the process of completing the construction of my home and when the first floor is ready, I will purchase my own material and start working,” she says.

Published in The News on Sunday, dated: May 12, 2019

May Day 2019

May Day 2019

Today is Labour Day. The day is being observed in memory of the struggle by Chicago's workers for 8-hour work, which is practically not available now anywhere in the world including Pakistan. 

Pakistan is the worst example of labour exploitation. We had inherited the labour laws from the British period including the key Indian Trade Unions Act 1926, which is still enforced in India but dictators scrapped it and the Factories Act 1934 which has never been implemented in factories.

The military dictators Ayoub Khan, Yahya and Ziaul Haq were the worst as far as labour is concerned, leave alone the entire nation. They practically usurped all those labour rights which even the empire had bestowed on its subjects. The Military Dictator Yahya Khan gave a new law for the registration of trade unions, the Industrial Relations Ordinance 1969, which further deteriorated the labour movement in Pakistan. 

Later, the neo-liberal economic policies imposed by Briton Wood in the name of liberalisation completely ruined the labour rights situation in Pakistan.
Privatization of the state-owned corporations completely washed out the trade unions from almost all sectors where earlier there were strong unions. Presently only 1% of workers are organised under trade unions in Pakistan.

Banking is the glaring example, where there is no unions, ghee, cement, and telecommunications sector had strong unions but the situation is the opposite now.

The working conditions in both private and government establishments have deteriorated with the introduction of contract and third-party contract systems in employment, which was first adopted by the private sector but then the government also started using it. This system provides relief to the employers from NOT paying employment benefits to the workers and also free them from the hassle of dealing with trade unions.

Although the Supreme Court of Pakistan has already declared the contract and third-party employment as against the Constitution, no measure has been taken by the government to end this exploitative system.

The export challenge

Shujauddin Qureshi

Although the Pakistan Tehreek-e-Insaf (PTI) government has succeeded in containing the trade deficit by about 13.2 per cent, exports of key products have not increased significantly and it is now clear that the government would not be able to meet the 27 billion dollar export target for the current fiscal year.

The rupee devaluation last year has not played a significant role in increasing exports. Economic experts believe the impact of currency devaluation would be reflected in the coming months. As buyers in the international market are already aware of the currency devaluation in Pakistan, they have demanded reductions in prices as well.

The decline in trade deficit during the eight months of the current fiscal year is mainly attributed to the discouragement of imports as the government had imposed regulatory duties on many non-essential import items, which caused a drop in the import bill by 7.96 per cent during the 9 months of the current fiscal year.

Pakistan’s imports were over $ 40.75 billion dollars till February 2019 against 44.28 billion in the corresponding period of the last fiscal year.

“It is a silver lining for the economy that imports-led trade deficit has been controlled,” says Majyd Aziz, former President Karachi Chamber of Commerce and Industry (KCCI). However, the trade deficit would further decline when exports are increased due to the impact of the rupee devaluation by June.

Aziz believes the government is encouraging exporters to increase their production volume in light of a number of incentives recently announced. Pakistan traditionally exports textiles and its allied products like garments, hosiery and towels, but other export products like rice, surgical equipment and sports goods are also in high demand.

“There is a lot of potentials to increase exports of non-traditional items like Information Technology services and software,” he adds.

Pakistan also enjoys a duty-free Generalised Scheme of Preference (GSP) Plus facility under which Pakistani businessmen can send their products to the European markets without paying any duty. This facility is available since 2014. Traditionally, the US, UK and European Union are the main markets for Pakistani textile and leather products.

According to Aziz, Pakistan has the potential for substitute imports. “For example, import bill for edible oils has significantly reduced in recent years as the local industry is extracting soybean oil from the imported seeds.” Earlier, Pakistan used to import soybean oil for refining and packing, but now soybean seeds are imported from the US and local oil mills are extracting oil and processing it, which has not only reduced the import bill but also created a new market for export of soybean meal from Pakistan.

Soybean meal is a substance left after extracting oil, which is used in the production of chicken feed and there is also a demand for the product abroad, especially in China. Pakistan is using soybean meal in producing chicken feed as the poultry sector has increased.

Exporters have been facing various problems like lack of finances, duty drawbacks and high rates of utility tariffs for many years now, but those problems were further aggravated during the current fiscal year as the export-oriented large-scale manufacturing sector’s production is subdued due to an increase in input costs.

“The cost of production is still much higher in Pakistan than in our competitor countries like Bangladesh and India,” says Javed Bilwani an exporter of fashion apparel and Central Chairman of the Pakistan Hosiery Manufacturers & Exporters Association (PHMA). Utility charges, for instance, are much higher in Pakistan as compared to Bangladesh and India where exporters receive subsidies.

“Closure of an export-oriented factory for one day in Karachi due to load shedding may cause 7 per cent loss in the production of exportable products,” he says. The government must ensure an uninterrupted power supply to the industries in order to meet the export target.

According to Bilwani, recently the federal government has announced cutting power tariffs for five export-oriented industries to provide incentives to the export sector of Pakistan. These are textile, leather, sports, surgical and carpet. These sectors are also zero-rated in duties.

The federal government has offered some incentives to the export industries, including exemption from the recent hike in natural gas prices and reducing the price of imported liquefied natural gas (LNG) to Rs600 per one million British Thermal Units (MMBTU), from Rs1500 per MMBTU. Moreover, import duty on some raw materials used in the processing of export products has also been slashed.

Delay in the implementation of the above incentives is a cause of concern for the exporters as they complained that due to bureaucratic snags these incentives have still not been materialised.

The textile sector is the worst hit. Many industries in Faisalabad, the textile hub, are either closed down or running at losses.

According to the State Bank of Pakistan’s Second Quarterly Report, the performance of the textile sector, which is the largest exporting sector of Pakistan, remained subdued as its production came down by 0.2 per cent in the first quarter of the fiscal year 2018-19 as against the growth of 0.7 per cent during the corresponding period of the last fiscal year. That growth was also not much even though it was supported by the relaxation of duties and other incentives on exports.

Pakistan’s overall exports have increased just by 0.11 per cent to 17.08 billion dollars during the period from July 2018 to March 2019 against the exports worth 17.06 billion dollars in the corresponding period of the last financial year, according to the Federal Bureau of Statistics.

Even though textile and garments exporters are optimistic about growth in exports in the coming months, they are also sceptical of the bureaucratic delays in the implementation of policies and incentives. They also fear that the incentives may be curtailed keeping in view conditionalities under the IMF loan, which Pakistan is currently negotiating to meet its fiscal deficit.

This appeared in The News on Sunday on April 14, 2019 

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Pakistan Exports, Economy

December 27, 2007: Sad day in history of Pakistan

December 27, 2007: Sad day in the history of Pakistan
Exactly 10 years ago on 27th December 2007, I heard the news of the assassination of Mohtarma Benazir Bhutto in Rawalpindi on TV, when I was leaving the office around 5.30 pm. I was also doing a part-time job in Daily Times' desk, whose office was located at I. I. Chundrigar road at that time.
First I took the route of Mai Kolachi towards Keamari bridge, but that road was chocked and traffic was being diverted towards PIDC. That road was also blocked by heavy rush. After great difficulty, I reached PIDC and then turned towards Shaheen Complex, where there was no chance to enter into the thoroughfare because the entire road was full of cars coming from the Tower's side. After waiting for a few minutes only one lane for going towards Tower was created and traffic moved at a snail's pace on that lane. It was really a test of my driving.
I had to reach near New Challi area, which took more than half an hour. There was no chance to take a u-turn to the office of the Daily Times. After spending another 15 minutes on the main road, I found a space to take a turn. As people were pelting stones and damaging vehicles, there was an environment of fear on the roads. Luckily, I found a place inside the building for parking of my car.
That night I left the Daily Times office by around 12 midnight when reports of traffic clearance came. At that time the entire rush on main I. I. Chundrigar road was cleared, but street lights were off and the same environment of fear prevailed.
It took another hour or so to reach at home as most of the roads were barren, but some were closed down, especially the Zamzama DHA area, where people from Gizri had burnt vehicles and damaged banks and shops.
I took a detour from Neelam Colony and reached the Khadda Market (DHA- 5) safely. For the next 2 days, the entire area was closed down and at last, Rangers came into the area and markets were opened. At least two vehicles were burnt in my area and a bank (UBL) was also set ablaze by the angry people.
In those days, I had also travelled to Hyderabad and a big line of burnt vehicles was found at the Hyderabad bypass. According to a Dawn report, Pakistan suffered a loss of 2 billion dollars.

A mysterious rupee-dollar seesaw

A mysterious rupee-dollar seesaw

Shujauddin Qureshi July 16, 2017

When many people in Pakistan were glued to their TV sets to watch Maryam Nawaz appeared before the Joint Investigation Team (JIT) in the Panama case and the main opposition political party, Pakistan People’s Party, was observing a “Black Day” to mark the 1977 Martial Law imposed by General Ziaul Haq on July 5, the currency market silently witnessed a 3.1 per cent slide in the Pakistan rupee’s value against US dollar in an apparent major devaluation after a 9-year cap on the exchange rate.

The rupee, which was being traded a day before at Rs104.9 against the US currency in the inter-bank trade, shed its value to Rs108.25. The devaluation was also endorsed by the regulator's central bank, the State Bank of Pakistan, near the close of the trading hours through a press release.

Simultaneously, there was panic buying in the open currency market, where greenback bills were unavailable even at Rs109 a dollar.

The SBP press release issued in the afternoon said depreciation had become necessary due to the growing deficit in the external account. “The SBP also believes that the current exchange rate is broadly aligned with the economic fundamentals,” said the press release issued by the External Relations Department of the SBP.

But after the end of trading hours, Finance Minister Ishaq Dar held an emergency meeting with his finance team and bankers and later in the evening, at a press conference, blamed the acting governor of the central bank for creating a market panic by announcing “artificial” devaluation.

Dar also announced to the appointment of a permanent SBP governor the same night and said he has ordered an inquiry into the “reasons” behind this sudden devaluation of the Pakistani currency. Although Tariq Bajwa has been named as the new SBP governor on July 6 and an inquiry committee has been formed to probe the reasons, bankers doubt any action would be taken against the people responsible. The finance minister had also indicated that bankers have agreed to keep the exchange rate down between Rs105 and Rs107 in the coming days.

Although Tariq Bajwa has been named as the new SBP governor on July 6 and an inquiry committee has been formed to probe the reasons, bankers doubt any action would be taken against the people responsible.

But here another question arises about the autonomy of the central bank, which emphatically stated that the currency depreciation was justified due to the economic situation of the country.

“It was a mysterious depreciation,” said a senior banker and finance expert Dr Shahid Hasan Siddiqui, who is also the Chairman of the Research Institute of Islamic Banking and Finance. In the past, currency depreciation happened in 2008 and 2013 and the government had announced to take action against the persons responsible for that but nothing happened.

“In November 2013, speculative buying caused devaluation of the rupee and Finance Minister Ishaq Dar had immediately intervened and due to his commitment to bring the dollar back to Rs98 level, it came down actually within weeks,” said Dr Siddiqui. “But at that time also no action was taken against the responsible persons due to a secret deal.”

It is a matter of fact that the State Bank usually intervenes in the market whenever there is a surge in demand for the dollar, but this time the central bank surprisingly did not intervene, which caused a panic and thus rupee lost its value.

Market sources said a major commercial bank had suddenly started buying the US dollar in big volumes to make international payments in order to buy another commercial bank, so there was a surge in the dollar demand in a single day. In such a situation when demand increases, the central bank had to supply foreign currency in the market to keep the exchange rate intact, but it did not happen this time. Even the central bank supported the devaluation through its press release.

Although Tariq Bajwa has been named as the new SBP governor on July 6 and an inquiry committee has been formed to probe the reasons, bankers doubt any action would be taken against the people responsible.

Although it has been an outstanding demand of exporters to devalue rupee as the current exchange rate is quite higher to compete in the international market, the Pakistan Muslim League government has successfully kept the currency rate stable. Experts believe that there are other reasons behind declining Pakistani exports and the over-valuation of currency is a smaller reason.

“I also think the rupee is currently overvalued against the dollar as it should be around Rs112,” said Dr Siddiqui, adding that the soaring imbalance of trade demands to keep the currency exchange rate stable as we have to pay more for imports which are now double than exports.

Pakistani exports are declining gradually and exporters, especially textile manufacturers, have been demanding incentives in the form of relaxation in taxes and utility charges and devaluation of the currency in order to boost their exports. In January 2017, the government announced a package for exporters worth Rs180 billion by providing incentives for taxes and other benefits.

Under the “Prime Minister Trade Enhancement Incentives” package, the government abolished sales tax, and customs duty on the import of textile machinery and cotton. But all these and earlier incentives to exporters have not brought any major improvement in exports. Pakistani exporters decry over-billing, non-availability of electricity and gas and increase in prices of input materials, which have made the Pakistani product uncompetitive in the international market. But it is also a fact that Pakistani manufacturers are investing less in the value-addition of products.

According to the Federal Bureau of Statistics figures, Pakistan’s exports declined by 1.6 per cent from 20.79 billion dollars in 20015-16 to 20.45 billion dollars in the last fiscal year 2016-2017 whereas imports surged by 18.67 per cent to reach 53.03 billion dollars in 2016-17, thus showing a negative balance of trade of 32.56 billion dollars.

Banking sources said the inter-bank currency trade volume is much higher at 300 million dollars a day than the open market trade, which is around 30 million. In inter-bank, mainly imports, exports and remittances are traded through commercial banks, whereas in the open markets, travellers or retailers buy or sell dollars.

“The government’s timely intervention has stabilised the currency as the devaluation was not needed at this time,” said Malik Bostan, President of Forex Association of Pakistan, the apex body of private foreign currency traders.

Devaluation is supposed to be harmful to the economy as it is based on imports and in such a case prices of every item would be increased. “Depreciation is harmful to Pakistan as there are over 75 billion dollar foreign debts on the country, which would further increase in rupee terms,” said Malik Boston.

When asked how long the government would keep the exchange rate at this level, Bostan said if the government wishes, it can keep it at this level for life.

Although with the government’s intervention the exchange rate has started coming to pre-July 5 levels, the credibility of the central bank has come under question as experts believe the SBP’s autonomous status has been tarnished with intervention by the Finance Ministry after the SBP-supported the depreciation.

Appeared in The News on Sunday, July 16, 2017

Link: http://tns.thenews.com.pk/mysterious-rupee-dollar-seesaw/#.WW78_RWGPDc