PSEs pushing country to bankruptcy

Islamabad, MTT News Desk: The Pakistan Economy Watch (PEW) on Sunday said mounting losses in the politically managed Public Sector Enterprises (PSEs) are pushing country towards bankruptcy.

Living on hefty bailout packages, not a single PSE has contributed anything but sheer disappointments over the decades, it said.

These companies being run by the non-professional and politically motivated managers have become hub of favouritism and corruption with little hope for revival, said Dr. Murtaza Mughal, President PEW.

Governments use PSEs as a job creation tool to seek political mileage that in turn add to the losses in form of massive loans to pay salaries to an army of incompetent employees, he added.

He said that Pakistan International Airlines, marred with bad governance and misadministration, recently received Rs100 billion as bailout package while it has wasted around Rs 200 billion in last five years.

Estimates suggest that PSEs are wasting around 15 per cent of the total governments revenue which should be tackled immediately as collections have been sliding down since years.

Dr. Murtaza Mughal said that PSEs including PR, PSM, NHA, PEPCO, PASSCO, TCP, USC, receive over Rs300 billion as bailout packages annually with no improvement and continued wastage of fiscal resources which could have been used for bettering public services.

It can help government boost spending on critical sectors like health and education, he added.

Sometimes worst-run PSEs borrow more than what entire private sector of the country borrows from banks but they still make losses to the tune of billions while taxpayers money is used to keep them alive.

All the finance ministers of the incumbent government including Shaukat Tarin, Naveed Qamar, Abdul Hafeez Shaikh and Saleem Mandviwalla have failed to chalk out an effective strategy to turnaround the PSEs, said Dr. Mughal.

He said privatization of some PSEs might improve situation.

SROs great source of discrimination, tax fraud

Islamabad, MTT News Desk: The Pakistan Economy Watch (PEW) on Friday said SRO culture has remained one of the biggest hurdles in ensuring national development by widening the tax net.

SROs are the foremost source of corruption, discrimination, budget subversion and national disgrace, it said.

FBR has become a factory producing SROs (Statutory Regulatory Orders) to favour influential which undermines capability of the government to spend on welfare and development, said Dr. Murtaza Mughal, President PEW.

Pakistan will never be able to break the begging bowl until the SRO culture is totally eliminated, he added.

He said that the infamous instrument called SRO has frequently been employed to provide exemptions worth billions to politically connected business tycoons while it puts unnecessary burden on taxpayers which amounts to punishing them for honesty.

Dr. Murtaza Mughal said that the tax authorities have been using powers of the Parliament by issuing SROs while the politicians have seldom challenged the violation.

The SRO culture has kept Pakistans tax- to-GDP ratio one of the lowest in the world putting brakes on positive initiatives, he said.

Taxation system has developed serious flaws due to special focus of the authorities on issuing SRO with no end in sight, he observed.

Dr. Murtaza Mughal said issuance of 4500 SROs and tax exemption to the tune of Rs 650 billion is tip of the iceberg. Those benefitted from this culture should be taken to the task, he added.

Matters relating to tax exemptions, change in duties etc. should be debated by lawmakers who are not beneficiaries of unjust tax breaks and exemptions, he said.

An amendment in the law disallowing FBR to issue SROs can increase tax collection to boost shabby economy.

He asked to independent think-tanks and superior courts to review in detail the negative impact of misuse SROs which is hurting the society in general and specifically hitting poor.

Petroleum ministry pushing country to dark ages

Islamabad, MTT News Desk: The Pakistan Economy Watch (PEW) on Thursday said Pakistan continues to march towards dark ages in absence of any concrete effort to resolve energy crisis by the authorities concerned that has left millions out of work and brought economy to the brink.

Petroleum ministry continue to keep critical energy issue on the back burner while trying to get approval of controversial projects aimed at personal welfare, said Dr. Murtaza Mughal, President PEW.

By ignoring implementation of viable projects to overcome energy shortages the politicians and advisers have initiated controversial projects that will not provide any relief to masses, he said.

He said that all objectionable activities of politicians and bureaucracy are going unchecked which will leave masses to face the consequences of their actions for decades.

Dr. Murtaza Mughal said that the situation become graver with failure of the authorities to check losses resulted from theft of electricity and gas amounting to Rs 170 billion per annum. Main reason behind pilferage is lack of accountability and appointment of top officials on political bases, he added.

Giving example of questionable decisions, the President of PEW said that a gas block in Dear Bugti containing double gas than Sui was given to OGDCL ignoring merit which failed to extract any gas since last sixteen years.

During harsh winter, gas load management results in suspended or curtailed supply to power stations, fertiliser and industrial sector and CNG stations in the name of ensuring uninterrupted supply to residential consumers which proved a trick, he said.

Dr. Murtaza Mughal said that forcing masses to rely on costly LPG and harmful firewood and coal briquettes for cooking and heating is result of the wrong policies and incompetent management of the gas companies.

Pakistan remains one of the very few countries using clean gas to run power plants, a decision made by Gen (Retd) Musharraf which the incumbent goverenmt failed to reverse.

The failure of the government to secure sustainable, dedicated and affordable energy supplies has resulted in closure of hundreds of units and unemployment of millions which is leading to unrest.

Democracy is useless if it forces masses to commit suicides and put very survival of country at stake, Dr. Mughal noted.

Flexible rules for establishing women’s chamber demanded

Islamabad, MTT News Desk: The Pakistan Economy Watch (PEW) on Tuesday said new rules framed to create chambers for women, small traders and cottage industry should be flexible enough to attract the business community.

Some clauses in the Trade Organisation Bill 2013 approved by the joint committee of National Assembly and Senate Standing Committees on Commerce recently will only benefit the business community if it is widely accepted, it said.

The current set of rules may prove unappealing for majority of businessmen leaving the whole exercise counterproductive, said Dr. Murtaza Mughal, President PEW.

The legislation for setting up business chambers in every district of the country will only benefit millions of small traders and business women if conditions are relaxed, he said.

Dr. Murtaza Mughal said that condition of 150 members for a chamber and 100 members for womens chambers having a valid National Tax Number would be difficult to meet in some small districts.

He said that majority of businesswomen work from homes with no exposure, minimum opportunities and dependence on middlemen. They dont possess NTNs and there is less likelihood that many would get one to secure membership in a chamber.

Similarly, many in the trading community, which are already weary of FBRs highhandedness, will find option to join chambers of small traders on the cost of exposure to tax authorities unpleasant, he said.

Dr. Murtaza Mughal said that existing chambers are commerce are dominated by certain groups serving the interests of some medium and large enterprises with small traders having no voice.

It is an open secret that not a single chamber conducts an election but rely on selection procedure which is a cause of heartburn among many legitimate businessmen.

Free elections give more power to the voters to engage in the decision-making process, while the chambers prefer a system that is based on blatant self-interest.

Government should ensure that the new law is acceptable to small traders who have already expressed reservations over dominance of FPCCI-linked politicians in the concerned NA and Senate bodies otherwise shutter down will remain first option for small traders in case of any disagreement.

SBP yearly report a worthless document

Islamabad, MTT News Desk: Holding the State Bank of Pakistan (SBP) partly responsible for the gloomy economic situation, the Pakistan Economy Watch (PEW) on Sunday said the has failed to show correct picture of economy in its recently released annual report.

Political interference and attitude of the central bankers to please government while misleading masses has left the Apex bank untrustworthy and ineffective, said Dr. Murtaza Mughal, President PEW.

He said that the SBP is no more regarded as a good regulator; rather it has become an efficient machine to print as much currency as required by the politicians to finance their luxuries.

Report based on assumptions, optimism and assurances will not help government, masses and nervous investors in any way but it will further dent the reputation of the bank and country, he added.

Dr. Murtaza Mughal said that the SBP should have admitted its failures and reported that the year 2012 added to the miseries of masses while there is no hope of betterment in the current year as government and opposition have no will to implement reforms.

SBP seems overconfident about certain things including payment of Coalition Support Fund, receiving outstanding money from Etisalat, raising revenue from sale of 3G licences and hike in remittances which can be best described as assumptions.

It remained overoptimistic on many other fronts despite rapidly deteriorating economic indicators and sluggish investment while the government has so far avoided serious effort to negotiate a loan with the IMF which amounts to keeping masses in the dark.

Failure of the SBP to resist or at least express displeasure over violation of borrowing limits by the government has remained a big obstacle in revenue mobilisation and curtailing unnecessary expanses.

Expressing concern over unsustainable fiscal deficit, Dr. Mughal said that all the efforts to revive economy will meet failure as far as governments total expenditures exceed the revenue that it generates which leaves it only with borrowing option.

Govt’s recent steps for economic revival encouraging

Islamabad, MTT News Desk: The Pakistan Economy Watch (PEW) on Thursday said some recent steps taken by the government including ratification of Iran pipeline agreement by the Federal Cabinet and handing over Gwadar port to a Chinese firm are highly promising.

These steps will go a long way in reviving economy which is in tailspin since some time leaving millions jobless and threatening growth, said Dr. Murtaza Mughal, President PEW.

He said that Chinese cooperation in the pipeline project will make it a reality in less than expected time which will be a great service to the country and people of Pakistan reeling under energy crisis.

Dr. Murtaza Mughal lauded the patience of Tehran as the project was delayed for long due to uncalled for US pressure on Islamabad to dump the venture essential for our survival.

Allowing transfer of concession agreement for Gwadar Port from the Port of Singapore Authority to the China Overseas Port Holding will attract further investment, provide opportunities to people of Balochistan and bring Islamabad and Beijing closer which are already like a family, he said.

He noted that announcement of long-awaited three-year Strategic Trade Policy Framework in which an export target of $95 billion has been set backed by steps to support the plan will help improve confidence in the business community.

The government should ensure that the recent Trade Policy does not meet the fate of trade policy framework for 2009-12 which failed due to want of funds.

The plan of the Ministry of Water and Power to generate 3,000MW electricity from sugarcane bagasse on fast track basis is equally encouraging, he observed.

He demanded that all the necessary amendments in the existing policies should be ensured in time to attract investments to make plan of using 10 million tonnes of bagasse for power generation a reality as soon as possible.

Lauding the US assistance for water and power projects and her cooperation for optimum use of hydropower resources, Dr. Murtaza Mughal said that US should stop opposing Iran gas pipeline project otherwise anti-US feeling will run high among masses braving energy crisis.

Funds, powers being misused to ensure victory in elections

Islamabad, MTT News Desk: The Pakistan Economy Watch (PEW) on Sunday said politicians are recklessly spending public funds, misusing powers and robbing massing to ensure victory in upcoming election despite their miserable performance over the years.

It is amazing that tax fraud is a punishable offence while wastage of public funds on controversial projects that benefit few isnt, it said.

Politicians simply don’t give much thought to long-term consequences of their decisions preferring short-term electoral successes, said Dr. Murtaza Mughal, President PEW.

He said that many recent decisions were examples of abuse of position as these steps had nothing to do with welfare of masses but were aimed to support influential business lobbies in return of their support during the elections.

Dr. Murtaza Mughal said that Punjab government has been distributing laptops and yellow cabs while federal government has outshined it by wasting away billions.

The coalition government is spending Rs 50 billion annually on the controversial Benazir Income Support Programme (BISP), while the major chunk of money rose to support flood affected has been plundered, he said.

Similarly, recent 14.3 per cent hike in the wheat support price will not benefit farmers or commoners but the rural politicians; people will have to spend some Rs 360 billion on food alone, he said.

Dr. Murtaza Mughal said that Government which was already spending Rs 436 billion on purchase of food items will have to get more loans from banks to purchase wheat on the new price.

He said that restriction on import of used cars was also a decision to benefit auto mafia which dont want to competition to ensure windfall evident from their balance sheets. Profits of a major automaker increased by 25 pc, while another car assemblers profit climbed almost fourfold.

He also criticised TCP for promoting interests of sugar barons by buying sugar at hefty rates. Provision of gas to textile industry on the cost of masses and economy is also a step to ensure election victory.

The wastage of funds and exploitation continues as government has been appointing scores of incompetent party workers in the bleeding public sector enterprises in backdates due to a ban on new appointments recently imposed by the Election Commission.

In absence of an effective mechanism to check politically motivated spending the politicians will continue to deprive masses to meet their designs.

Country would have defaulted earlier without judicial interventions

Islamabad, MTT News Desk: The Pakistan Economy Watch (PEW) on Wednesday said concrete steps for economic revival seems a far cry during the current year.

Masses will experience three governments in the on-going year, the incumbent coalition will complete term which will be replaced by caretaker setup and after elections another political government will take charge, it said.

It would be unfortunate if the ruling party which claim to believe in continuity of democracy and reconciliation to justify wrongdoing forms government after elections as it will seal the fate of country, said Dr. Murtaza Mughal, President PEW.

The ruling band, which is promoting corruption in the name of democracy on the cost of country will lead Pakistan to total destruction if given another chance, he said.

Dr. Murtaza Mughal said that politicians usually blame courts for obstructing their revolutionary steps but masses know that without judicial interventions the country would have defaulted earlier.

He said that Pakistan only progressed in corruption in the era of incumbent rulers inviting international disgrace and lack of trust on the part of development partners which is emerging as one of the biggest threat to country.

Masses saw two prime ministers tainted with corruption charges, four finance ministers, six finance secretaries, four SBP governors, six chairman of the FBR, and four deputy chairman of the planning commission in last five years which only points towards lack of serious attitude and absence concern, he said.

He said that rulers are sole responsible for pushing government debt to 1300 trillion, forcing millions below the poverty line, promoting nobility, mismanaging energy crisis, delaying projects of national importance, failed revenue collection targets, dwindling rupee and reserves and flight of capital and industries.

They would nail in the coffin of country if voted again to power in the upcoming elections, warned Dr. Mughal. A new government with a comprehensive strategy of economic revival can save Pakistan.

Number of underfed people increasing in Pakistan

Islamabad, MTT News Desk: The Pakistan Economy Watch (PEW) on Monday said that record number of people have become malnourished during the five long years of democratic rule in Pakistan.

The policies of the government have pushed up the cost of food to unprecedented levels leaving majority of the population food insecure, said Dr. Murtaza Mughal, President PEW.

He said that despite increase in the population the consumption of food is going down which is hurting the health of masses and bringing down productivity of the economy.

Dr. Murtaza Mughal said that around 50 per cent of the children in Pakistan and underweight while mothers are worst hit who are compromising on their health to feed their children.

An Oxfam report released in August 2011 said that every third Pakistani is facing food security issues while the situation in countries like Tanzania, Niger and Yemen is better, he said adding that the situation has deteriorated since then as majority have been spending more on food.

Many poor have withdrawn their children from schools while the tendency of marrying young daughters to free themselves from responsibility of providing food is increasing triggering other social and health issues.

More and more people are taking fewer calories while the consumption of grain, around 62 per cent of an average Pakistan meal is decreasing.

Dr. Murtaza Mughal said that intake of wheat, rice, sugar, pulses, vegetables, milk and edible oil is decreasing which is going completely unaddressed.

Majority of the people can only think of eating fish, meat, mutton and fruit considered an essential part of a balanced diet which is a grave threat for the future of the country, he said.

The under-five mortality rate, an important index of health and nutritional status of a country is alarmingly high in Pakistan by international standards.

The government that cannot feed hungry families and struggling communities has not right to remain in power.

Pakistan to enter Stone Age if ruling coalition wins upcoming election

Islamabad, MTT News Desk: The Pakistan Economy Watch (PEW) on Sunday said country will be pushed in the Stone Age if the incumbent ruling coalition wins upcoming elections.

There would be no energy to keep vehicles and economy moving in presence of advisers like Dr. Asim who has done his best to build a negative opinion about the government among masses and business community, said Dr. Murtaza Mughal, President PEW.

Opposition parties are visibly delighted on the outcome of the decisions taken by the adviser to the PM on petroleum which have enraged people to an extent never witnessed before which will benefit them, he added.

It seems that masses will continue to wander in search of CNG and petrol, wait in long queues at filling stations, while it will be impossible to cook food in the households owing to low gas pressure, he said.

Dr. Murtaza Mughal said that after elections Dr. Asim will leave for his country Canada, leaving party behind to face the consequences of his mismanagement.

Appointment of a person dealing with disorders or deformities of the spine and joints to handle critical energy sector will prove to be one of the biggest mistakes of the incompetent government, he observed.

He said that dismal electricity situation is also direct result of the decisions of petroleum ministry as over fifty per cent of power production is satisfied through gas and oil which is not available.

Dr. Murtaza Mughal said that the PSO, biggest oil company of Pakistan, has been left bankrupt due to interference and objectionable practices of failed experts.

PSO, the largest oil marketing company in the country, with last years sales revenue of Rs. 975 billion and after tax earnings of Rs. 14.78 billion has now taken loans amounting to around 200 billion from banks and there is no way it can fulfil obligations diminishing hopes for further financing, he noted.

He said that the future of PSO will not be very different than that of PIA, Railways or Pakistan Steel Mills.

Welcoming the statement of Asim regarding action against CNG stations involved in gas theft, Dr. Mughal asked that if any action will be initiated against CNG outlets owned by the politicians who continued to get gas even in the load shedding despite being defaulters to the tune of tens of millions.

He said that those who have inflicted great pains on over half a million people dependent on CNG sector for personal interests should be brought to book.

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