Militaristic Approach Of Countering Terrorism

Our history of terrorism is as old as our willingness to use violence to affect politics. We have inherited and are still facing different forms of terrorism since Zia’s era of political Islamisation and the Soviet Afghan war. Currently we are at war with a terrorist movement fueled by a radical ideology of injustice, oppression, and socio-economic disparity.

Countering terrorism has been on the agenda of our civil and military establishment for decades. We have devised multiple strategies to eradicate this menace from our soil. From intelligence gathering to intelligence-based operations and banning militant organizations to military operations, every time our efforts to curb militancy seemed to fail while terrorist attacks continued. From Rah-e-Nijat to Rah-e-Rast and from Zarb-e-Azb to Radd-ul-Fassad, we come up with a new name with the same old ideology.

We do not seem to have learnt anything from past. Those that fail to learn from history are doomed to repeat it; and that is exactly what we are doing. We are still trying to remove the stains of blood with blood – impossible. Gandhi once said, “an eye for eye will make the world blind’.

We will have to change our mindset to address this turmoil. At least now we should realise that defeating terrorism with purely militaristic mindset is not possible. We have been trying this actively for at least four decades but time and again there are instances that expose all the persisting gaps and vulnerabilities in our security infrastructure along with the mindset. We keep on doing the same thing over and over again, hoping for a different result each time.

We should devise a multipronged strategy covering all aspects and reasons of terrorism rather than terrorism itself. We should put all the stakeholders together and ask of the causes and conditions that create a favourable climate for terrorism.

We have often mistakenly associated terrorism with religious fanaticism, or with a particular sect of religion or ethnicity. Terrorists have no religion and ethnicity. Every religion discourages violence practiced in any form and dissociates itself from those who commit their actions under its shelter. It is more of a greed driven phenomenon rather than belief driven.

We should start from the prevailing social and economic injustice – poverty, unequal distribution of wealth and discrimination – the root causes of terrorism. Almost all the resources of this country are being controlled, governed, and invested by a handful of ruling elite according to their priorities and stakes. When the budget of a single train line in Lahore will be several times higher than the developmental budget of the whole of FATA, the obvious result will be monopoly and socio-economic disparity. As this inequality grows, naturally more and more people are becoming desperate. When someone is stripped of his rights, he will be persuaded to look for alternative means of achieving them and when he cannot have his rights through fair legal means, he will be forced to believe that he has no other choice but violence.

If only half of the amount of money wasted on wars was invested in education and healthcare, the results would have been different. Our education system, especially the one in religious seminaries, needs reforms and this is the prime need of the hour. The billions of rupees spent on advertising roads and flyovers, can really make a difference if invested in socio-economic well being of the under privileged.

Government should invest its time and resources to investigate how this militancy is being financed. Without adequate sources of finance, terrorism is simply unsustainable. The arms and ammunition used in terror activities and the paid ‘volunteers’ being hired for training camps and co-ordination – all need money. We will have to trace and eliminate those sources providing financial cover to the militants. Funds channeled to the extremist organisations in the name of charity and religious donations, also need to be traced.

Similarly, corruption facilitates/feeds terrorism and both are proportionately interlinked. The black money generated through bribe, corruption and tax evasion is susceptible to being used for terror financing. Continuous increase in black economy and financial corruption puts a question mark on our fight against terrorism.

FATA, GB, Azad Kashmir and Balochistan need development on equal basis. People of FATA are facing wars and militancy for more than past four decades. They also deserve peace, stability and development. Developmental projects should be initiated in these under-developed areas with special focus on infrastructure, health, and education. Economic zones should be made with special incentives to bring them at par with the rest of Pakistan.

Fighting terrorism requires endurance, special counter terrorism, and countering socio-economic factors along with the intelligence and swift operations. Peace does not mean just to end violence, but also to end oppression, injustice, and hypocrisy. Without controlling the increasing disparity and economic inequality, our dream to fight terrorism will just be a dream.

 

This article was originally published by Dunya News dated June 05, 2017. Can be viewed at: http://blogs.dunyanews.tv/15858/militaristic-approach-countering-terrorism-counterproductive

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Getting PIA Back on Track

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Once upon a time, Pakistan International Airlines (PIA) was among the world’s premier carriers. Having the green national flag painted on every plane, it was a symbol of statehood and pride. Delivering high levels of safety standards, service quality and punctuality, it lived up to its ‘Great people to fly with’ tagline.

Originally founded as Orient Airways in 1946 in the Calcutta city of British India, it was nationalized in January 1955 and renamed to Pakistan International Airlines.

PIA has a history of milestones and was a leader in regional aviation industry. It was the first Asian airline to fly the Lockheed Super Constellation and second to have a jet aircraft, Boeing 707. It also helped establish today’s leading airlines — including Emirates — by leasing its aircrafts and providing technical and administrative services in the mid-1980s.

PIA was a very successful player in the market until early 2000s because of high quality and a mostly empty battlefield until it began to crumble to foreign competition.

Today, the very same airline is facing unprecedented crises and is in an appalling condition. It is sucked into a vortex of burgeoning losses and is paralyzed beyond repair. It has become a real white elephant for the government; too costly to keep up but very lucrative to discard. It is almost impossible for the government to feed this giant organization with billions of rupees every month when there are no hopes for revival.

State-run enterprises (in Pakistan) seldom prosper. Political and bureaucratic interference, debt burden and over staffing, lack of professional staff and poor management often lead to slow yet steady demise of these entities.

PIA also witnessed the same. Increasing expenditure, decreasing revenue, in-efficient utilization of capacity and resources, poor planning and short-sightedness have left the airline with an accumulated loss of over Rs. 300 billions.

According to the latest figures given during a Senate committee hearing last week, the airline’s monthly spending are around Rs. 13.14bn against earnings of around Rs. 7.5bn resulting in an additional loss of over Rs. 5.6bn being added every month.

Lack of innovation and laid back attitude of employees has made the airline non-competitive. Over the period, the operating cost and payroll spending of the airline continued to swell while revenues declined, making it more difficult to manage.

The staff to aircraft ratio in PIA is among the highest in the world and it is listed as one of the worlds least efficient airlines. All these factors have contributed to transform an airline generating billions for the national exchequer to where it is standing today.

Looking forward, PIA needs radical changes in its setup and organizational structure. It can be revived again by entering into a strategic partnership with some competent stakeholder who is well versed in managing airlines.

While in government’s hands, despite all efforts to curb corruption and ensure transparency, the bureaucratic style of management and political interference will always place both government and public at a disadvantage. The government plans to divest 26% of its stake to improve its efficiency. The majority of the stake will remain with the government but the administration will be in private hands.

There exist numerous success stories of airlines after privatization. British Airlines, Sunair Airlines of South Africa, Austrian Airways, Bangladesh’s Biman Airlines, France AOM French Airlines, Canada’s Air and Japan Airlines are some of the examples where inefficient and loss making airlines were converted to profitable and efficient ones after privatization.

These airlines not only improved their service quality and profitability, but most of them are among the world leaders of the industry today.

Privatisation is a bitter pill but is the only option available in this situation. This will save the hefty amount of taxpayers’ money disbursed as subsidies. After-all, why should the poor taxpayers subsidize the government’s businesses? When in private hands, its management will be more concerned about the operational efficiency and profitability of airline. They will have to meet the increased expectations of the stakeholders for the return on their investments. They will come up with logical justifications and scientific reasoning for any happening, rather than the stereotyped ideas of slaughtering black goats to ensure safety of passengers even in the twenty first century.

The privatization procedure in Pakistan is laborious. There will be much resistance and outcry from the airline’s staffers, labor unions, media and opposition’s political parties.

Government should take all these key stakeholders into confidence, otherwise it will compromise the success of overall process and taxpayers’ money might go waste. Some organization of international repute should be hired to assist with this procedure. Proper due diligence should be conducted and transparency ensured. This is the only way we can bring back the glorious past of PIA and help it soar again.

Originally published in ProPakistani.pk dated January 18, 2017.

Can be viewed at: https://propakistani.pk/2017/01/18/getting-pia-back-track-privatization-solution/

Donald Trump and Muslim World: Uncertainties Ahead

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Concluding a very hard-fought campaign, the Republican Trump stunned the America and whole world by defeating his Democratic rival Hillary Clinton in the race to become the 45th President of the United States.

Donald Trump is a 70-years old Manhattan real estate tycoon who has never held any elected office; defeated the former secretary of state in an unbelievable surprise. He has promised to make America great again and repeatedly claimed that change will begin with his first day in office.

A business-giant turned television star turned politician; Donald Trump will be the oldest man ever to be elected for US presidency. His victory has apparently surprised the whole world; many were shocked and horrified, questioning the Americans choice with grief – and Muslim community worldwide – is not an exception.

Trump is a fiery anti-Muslim fascist who repeatedly used racism to rise to power. He believes that immigrants – especially those of third world countries – are the core reasons of America’s problems and he plans to “suspend immigration from terror-prone regions where vetting cannot safely occur”. He has already announced a “total and complete” ban of Muslim immigrants to the United States after the terrorist attack of San Bernardino, California.

Theoretically, it sounds possible but practically he cannot uphold his ideas after coming to power. A significant amount of billionaire’s assets comes from his business ventures in Middle East and the Muslim world. His luxury real estate company, the Trump Organization has significant business stake in Middle East, and Qatar Airways rents space for its New York headquarters in a Trump tower on Fifth Avenue in Manhattan. His state-of-the-art ‘Trump International Golf Club’ is the largest of its kind in Dubai. His hotel collection and luxury home decor and furniture brands are spreading all across Kuwait, the United Arab Emirates, Saudi Arabia and Qatar.

On economic fronts, there is substantial uncertainty about Trump’s policy positions and that was evident from the sudden decline of world markets, immediately after his victory announcement. Trump has long ago promised to withdraw the United States from the Trans-Pacific Partnership (TPP) and renegotiate the North American Free Trade Agreement (NAFTA).

It will be premature to comment about how the US relations with the Muslim world are going to be reshaped under Trump’s presidency but Muslim world share common roots on economic, political, and strategic ends with USA. Trump cannot lead the America in isolation as this world is a symbiosis of the nationalities where – one way or the other – every country in dependent on another.

Donald Trump has done an amazing job during his campaign and a lot more needs to be done. He will have to face the challenge of growing terrorism, extremism and racism, not only in USA but worldwide. Growing influence of IS in the Middle East and bilateral relations with Russia and China will be the key challenges during his presidency. I wish Trump’s victory would be a good omen for America and the whole world and he may accomplish is mission of making America and this world great again.

Indirect taxation is a regressive move affecting the poor – make FBR independent instead

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Taxes are the price paid by civilised societies for the opportunity to remain civilised. PHOTO: REUTERS

Taxes are what make governments work and allow other functions to operate smoothly. It maintains the country’s infrastructure, funds government operations, facilities and the logistics involved in running a country. All across the world, governments’ levy taxes from its citizens to generate revenue to run their affairs and benefit their subjects in ways untold.

Taxes are the price paid by civilised societies for the opportunity to remain civilised. Being the lifeblood of governments, there is no concept of governance and socio-economic development without taxes. Paying taxes is our civic duty, along with a requirement of the law and its non-payment is backed by sanctions.

Is this really happening in Pakistan?

Out of the estimated budgetary spending of government of Rs4,894,879 million for the fiscal year 2016-17 the revenue collection target was estimated at Rs3,621,000 million. This revenue target seems unrealistic and probably will not be achieved; but we have a long history of revising estimates and not achieving budgetary targets.

Why is this so?

Our total documented GDP of almost $300 billion is about 1/3rd of the total economy – not more. The rest is black or illegitimate economy. Our tax-to-GDP ratio of 11.5% is among the lowest in the world, even worse than our developing world peers.

Of the total population of around 200 million, only 1.1 million (0.5%) pay income tax and file a return – one of the lowest in the world. Revenue authorities maximise their focus on indirect taxes, which contribute towards more than 52% of the total revenue. Of the total direct taxes, around 3/4th of collection is from businesses, the rest from individuals. In terms of major segments of economy, industries contribute around 75% of total tax collection whereas the share of agriculture is less than 2%, whose share in the total GDP is more than 21%.

Lack of accountability and an availability of illegitimate tax havens all across the country and abroad are promoting a culture of tax evasion which is one of the core issues behind our economic troubles. In the past few years, informal and illicit incomes earned through crook practices have multiplied manifold whereas the formal economy was either stagnant or declining. The convenience in hiding assets from the eyes of law on one end, and increasing tax rates on the other, are catalysing capital flight from formal to informal/black economy. The recent ‘Panama Papers’ scandal have highlighted the names of around 600 Pakistanisrunning offshore companies in different tax havens to avoid the burden of taxes and accountability.

On the reforms end, Federal Board of Revenue (FBR) seems to be lacking and a lot needs to be done. It’s a part of the problem as opposed to being a part of the solution. A well-defined framework is needed to address the core issues of the turmoil.

Publishing the tax directories of all tax filers – Active Tax Payers List (ATL) and especially of parliamentarians – was a major breakthrough and praiseworthy step. Also, creating a distinction between filers and non-filers and an incremental tax hike for non-filers will increase their cost of doing business; eventually compelling them to be a part of the tax system. All these measures are appreciable but they still fall far short of what needs to be done.

Schemes like tax amnesty for non-filers to declare their hidden assets by paying a nominal amount in taxes are destined to fail due to the inherent element of dishonesty associated with them. These schemes were never successful in past. Instead of widening the tax base and adding more non-filers to the filers list; tax rates are increased resulting in increased burden on the existing tax payers.

Documentation of economy should be the first step in fiscal planning. Banking channels should be promoted for all transactions; from utility bills to payment of raw materials, salaries and wages. This will not only improve the documentation of economy but also reduce the amount going to waste through corruption. Also systematic analysis of data sought from banks and financial institutions can help FBR trace the real/complete trail of income.

Secondly, systematic reforms in FBR need to take place and it should be made an independent and autonomous institution. Following merit and employing properly qualified and trained people will enhance its effectiveness. Whistle blowing should be encouraged; robust audit and transparency will induce confidence in taxpayers. Rewarding honest tax payers will promote a culture of voluntary compliance.

Indirect taxation is a regressive taxation system affecting the poor and deprived segment of society the most – resulting in increased income inequality and wealth disparity. Government should shift its focus from indirect and withholding taxes towards direct taxes and widen the gap between filers and non-filers.

The share of agriculture in total tax collection (being less than 2%) should be increased. Ongoing computerisation of land record in some areas of Punjab should be extended across all of Pakistan to document the entire agricultural area as this will further facilitate collection.

All these steps need a stronger source of commitment from the government and ruling elite to truly meet the objectives. Well documented economic and structural reforms in the FBR will set the stage for a progressive, sustainable and equitable taxation system; resulting in improved revenues. This will reduce the government’s dependence on loans and grants and will boost economic growth and development; paving the path towards real prosperity.

Published in The Express Tribune, October 13, 2016

http://blogs.tribune.com.pk/story/41723/indirect-taxation-is-a-regressive-move-affecting-the-poor-make-fbr-independent-instead/

Capping The Menace Of Circular Debt

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After taking over the rein of this country in May 2013, the largest challenge for PML-N leadership was to fulfill their pre-election promise of solving the prevailing energy crisis at their earliest. More than three years have passed and PML-N is yet to fulfill its promise made to the masses. This is unlikely to happen till the chronic circular debt crisis is resolved. The accumulation of circular debts has made generation of electricity difficult, resulting in increased supply shortages and power outage.

Soon after holding office in 2013, Prime Minister Nawaz Sharif ensured to work on war footings for reforms in energy sector in order to let this sector perform. Soon after, within two months, his government settled all outstanding circular debt of Rs 503 billion through a cash injection of Rs 480 billion.

Circular debt crisis appeared for the first time in 2006 during the dictatorial regime of Pervez Musharraf, when oil prices in the international market were increased. The electricity tariffs were not revised upwards on political grounds, resulting in a debt amounting Rs 111bn. This debt later on reached a historic high of Rs 503bn that was settled by PML-N government after coming into power. This debt kept on increasing, despite huge price rise in last three years, and crossed Rs 684bn in August 2016, pushing the government back to the situation where it was standing three years ago.

Circular debt is said to be rising in the situation where a series of debtors and creditors exists in such a fashion that the net final payable in the thread is the receivable of the first creditor. Every member of the series is a debtor and creditor at the same time. In case of energy sector, this phenomenon reflects the difference between the high power generation cost and low electricity bill charged from customers, resulting in a deficit accumulating over time.

A glance at the energy sector shows that the supply chain consists of power generation (GENCOs) and distribution companies (DISCOs). GENCOs (WAPDA and IPPs) purchase oil from oil marketing companies (OMCs) to produce electricity which in then distributed to consumers via DISCOs at a price.

The problem arises when price charged by DISCOs doesn’t match the actual cost of production (Charged by GENCOs) and is slightly lower. This retards their ability to pay GENCOs, which ultimately are unable to pay OMCs for oil purchase, resulting in accumulation of an inter-corporate debt. This debt impedes production of GENCOs giving rise to supply shortage and load shedding.

Circular debt has paralysed the economy with reduced industrial output, closure of many industries, reduced imports and increased unemployment. This situation requires urgent measures to be taken to prevent further worsening of the situation.

Government can minimize this power sector debt through tariff hike and increasing the allowance of losses in tariff adjustment. There is a need to recover the full cost of power production and distribution from customers and bridge the gap between NEPRA determined price and government notified price. This gap is somehow bridged through surcharges levied in the name of tariff rationalisation.

An alternative plan could be the privatisation of power distribution companies and use its proceeds to retire this debt. The privatisation plan of three distribution companies — Islamabad, Lahore and Faisalabad — is already underway and is expected to be completed within a year or two.

Better management and efficiency of transmission and distribution companies on account of infrastructure, theft control and recovery can further improve the situation by reducing losses up to 20-25 percent.

Utilising alternate sources of fuel including hydel, solar and wind can also help reduce not only cost and debts but these are sustainable and environment friendly as well.

Circular debt and resulting power outage, if left unattended will further affect production activities, industrial output and economic growth. Urgent measures should be taken to remedy the situation and prevent accumulation of further debt. Otherwise this will further threaten the economic survival of the country and paralyze the whole power system.

Published in Dunya News Blogs, September 26, 2016

Capping the menace of circular debt