External debt hits$40.322bn in 4 years

(Dawn, February 06, 2008)

By Shahid Iqbal KARACHI, Feb 5: How much the government added to the external debt is much more important than the build-up of a heap of new record domestic debt, addinga trillion rupees to the total.

The huge external debt, which witnessed an addition of about $7billion to the total of over $40 billion in just four years, is set to start a vicious cycleof borrowing — servicing — borrowing. The rising bill of external debt-servicing gets more importance in the wake of widening current account deficit.

This deficit curtails the government’s ability to pay external bills, forcing it to borrow to meet the requirement or sell the assets it has for yieldingforeign exchange. The government has been paying about $3 billion each year as debt-servicing despite rescheduling of Paris Club consortium debt which has the largest sharein the total debt.

The latest figures issued by the State Bank showed that the total external debt reached $40.322 billion from $33.352 billion since 2003-04. The addition of about $6.9 billion in just four years showed that the government borrowed massively to meet its external payment. This has increased the cost of debt-servicing.

The future government is bound to borrow more to keep itself able to make external payments. This could bethe second biggest task of the future government after de-freezing the petroleum prices. The future government will have to carry out another task to launch Global Depository Receipts (GDRs) to raise dollars for its increasing demand.

The dollar demand has multiplied after record oil prices which hit $100 per barrel. The slow export growth and high import growth is another difficult area which demands more dollars. The country’s foreign exchange reserves have stared depleting but still these are about $15 billion. This will be the toughest task for the future government to maintain reserves and keep the payment system smooth.

The foreign exchange reserves have been a trade mark of success of the previous government. Both the Prime Minister and President referred the forex reserves as one of the biggest successes in numerous speeches they made in last couple of years. The SBP’s data showed that the government of Shaukat Aziz went beyond all records of increasing domestic debt which rose by almost one trillion rupees infive year to make the total as Rs2.7 trillion.

According to the report, the previous government which completed its five-year tenure increased the domestic debt by 58 per cent in five years. The government broke all records of previous governments to add such huge debt on the back of the weak economy. The previous government added both the external and domestic debt on such a scale which never happened before.

The caretaker government has followed the same path and has been borrowing at the fastest speed. The State Bank in its monetary policy criticised huge borrowing from the State Bank. The SBP accused the government of accelerating inflation through huge borrowing and destroying all efforts of the SBP to control inflation. The governmentborrowed about Rs237 billion from SBP in six months.

Myth Busters: Researchers Needed

Project Editor: Syed Saad Rizvi
Contact info: saadmustafa.rizvi@gmail.com

Serious researchers needed.
Educate yourself and the people of Pakistan.
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Parliament Watch

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Parliament Watch is an objectively based political candidate review project. It is meant to promote an "informed" voting behavior by creating transparency of the election process. The goal of this project is to help voters choose the right candidates to avoid corruption, nepotism, and undemocratic ideals. It serves as a medium for the public to voice their opinions and help portray the candidates. This project offers objective reviews on candidates based on documentation of the Election Commission of Pakistan, Pakistani media, and publicly available documents and research material. This project contains surveys, polls, and indices that provide statistical data on the candidates.

This project is one of the projects of the Future Leaders of Pakistan (FLP) by which members have collaborated to provide the people of Pakistan a tool for deciding who to vote for. It is with this project, that the members hope to induce the civil society to create a stronger polity for informed decision making. Parliament Watch focuses on Members of National Assembly and the Senate of Pakistan and with further funding will provide more information and reviews of other assemblies that make up the polity of our country.

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Politicians commit to spend more on education

By Iftikhar A. Khan

ISLAMABAD, Feb 5: Mainstream political parties Tuesday committed themselves to enhance the education budget from 2.4 per cent to 4 per cent of the GDP within the next three years with an increased focus on areas lagging behind in education and literacy indicators.They signed a declaration to the effect at the conclusion of a multi-party conference on ‘Education for All in Pakistan’ organised by the United Nations Educational, Scientific and Cultural Organisation (UNESCO) and the Pakistan Institute of Legislative Development and Transparency (PILDAT), a foreign- funded NGO.

The parties committed to allocate 10 per cent of the annual education budget to literacy programmes, arrange free and compulsory primary education, and ensure 100 per cent primary enrolment, and 85 per cent adult literacy by the year 2015.In a bid to impress that they mean it, the parties promised to abolish political favouritism and interference in education departments, to modernise and introduce a uniform core curriculum in schools across the country and to effectively utilise the allocated education budget each year.Though the political parties pledged to enhance the education budget, the commitment by almost half of them does not mean anything at this stage due to their decision to boycott the polls.

The three major political parties including PML, PML-N and PPP remained in government, but took no practical steps in this direction. These parties, however, have made promises in their election manifestoes to focus on the education sector.The 16 political parties which signed the Joint Declaration were represented by Senator Mushahid Hussain (PML), Raja Zafarul Haq (PML-N), Shah Mahmood Qureshi (PPP), Prof Ibrahim (JI), Senator Tahir Mashhadi (MQM), Senator Anisa Zeb Tahirkheli (PPP- Sherpao) and Dr Arif Alvi (PTI), Haji Mohammad Adeel (ANP), Takri M. Mengal (BNP-Awami), Dr Jehanzeb Jamaldini (BNP-Mengal), Senator Shahid Bugti (JWP), Maulana Amjad Khan (JUI-F), Pir Nasir Jamil Hashmi (JUP-Noorani), Prof Sajid Mir (JAH), Dr Abdul Hayee Baloch (NP), Senator Abdur Rahim Mandokhel (PMAP).Some of the participants of the moot called for a proper system of check and balance to ensure proper utilisation of funds, alleging that a huge chunk of funds for education was siphoned off by the bureaucracy.

Speaking on the occasion, Senator Mushahid Hussain announced that his party had the plans to initiate mass literacy programmes across the country, increase teacher retirement age from 60 to 65 years, modernisation of curriculum and to ensure transparency in scholarship awards.He emphasized the need to ease visa restrictions on Pakistani students seeking to undertake advanced studies in physics and engineering due to a negative perception of Pakistan’s nuclear state status.

Shah Mehmood Qureshi, Punjab PPP chief pointed out the sustained lack of political will in developing the education sector citing over 22 policy action plans introduced by various governments and their inability to foster any change in basic education and literacy indicators.While endorsing the Joint Declaration commitment of increasing education budget to 4 per cent of the GDP, he stressed on removing institutional weaknesses that hinder effective use of education funds and building of institutions’ capacity to enable them properly utilise funding.

Raja Zafarul Haq highlighted the potential of youth and pointed out that when given the right opportunities and access to education they can exceed internationally set standards of high learning achievement. He observed that mere increase in the education budget would not make any improvement, but an overall change in the strategy was required for it.

Senator Anisa Zeb Tahirkheli termed education as the key to success. She said under the constitution free primary education has to be ensured in minimum possible time. Advocating for allocating more resources for public sector education, she pointed out that Malaysia spends 26 per cent of GDP on education.Dr Abdul Hayee Baloch and Haji Adeel elaborated stressed the need for teaching mother language at primary level. Endorsing this view, Senator Shahid Bugti compared the bleak education and literacy scenario in Pakistan with the much poorer countries of Africa with better adult literacy rates including Rwanda, Malawi and Nigeria.Senator Abdur Rahim Mandokhel underlined the need to make political parties accountable to the masses and not to the perceived power bases of the country as witnessed over the years. He said education budget should be increased, but there must be a system of accountability in place to ensure proper utilisation of the funds.Dr Jehanzeb Jamaldini and Nasir Jamil Hashmi pointed out the problem of political interference at the district level and proposed more accountability and transparency in the system.

Yasin Zafar called for encouragement and improvement in religious educational institutions bringing them at par with the mainstream educational institutions.Senator Mashadi endorsed the mainstreaming of religious institutions with a focus on modernising their curricula and to abolish the existing multi-class education systems in the country.

(Coutresy Dawn, Feb 6, 2008)

People's Resistance Street Theatre in Karachi

Faris

Yesterday (Feb.5th, Tuesday), the street theatre group of PR did three chilling performances on sea view. It was an 8 minutes long theatre which highlighted the plight of a poor household, where a 'chowkidaar' takes absolute control by promising 'khushhaali' to its inhabitants. Instead of their situation getting any better, the family is fed-up by the chowkidaar's demands for security measures in their home. Finally, complete chaos takes place as the situation of the family and of society in general goes from bad to worst. During the pandemonium, the narrator stops everyone and interacts with the crowd.

A lot of different and interesting views were exchanged with people on the beach. However, probably because of my green army cap and crude punjabi-accented portrayal of the 'chowkidaar', people immediately answered Musharaff as the main culprit for the family's plight. When asked what could be the solution for the household's problems, many people simply suggested the removal of the army from civilian affairs, while others stated that all of us have to work together for the nation's betterment.

The theatre ended with the actors and people from the crowd moving in a tight circle and shoving off the 'chowkidaar', who tries to break into them shouting 'main khushhaali lay kar hi aaon ga!' 'main ghar ki behtari karon ga!' People who joined us in this circle in all three performances were really happy to be a part of the solution.

We would like to thank the handful of PR people who showed up. It was disheartening to see that they were less in number than my own personal friends.

We must all thank Abira for providing her house for the past whole week for our theatre training. I would personally like to thank Mr. Shahid Shafaat, our theatre guru, without whose dedication and training none of this would be possible. Please if everyone can send him a thank you note on his email address: shahidshafaat@hotmail.com, its the least we can do to appreciate his commitment. Finally, PR theatre group would not have even gathered if it wasn't for Ambreen's efforts. She has done a great job of coordinating and motivating everyone interested to participate. Great work Ambreen!

We have tentatively planned to perform again on Sunday Feb.9th, obviously keeping in mind everyone's availability and the current political situation.