analysis
Negotiations after all
By Aasim Sajjad Akhtar
It is fitting that the latest phase of the New Great Game in Afghanistan and Pakistan unfolded over the past week in the old imperial capital of London. The British Empire is now a distant memory but Western imperialism is not, and it would not be inaccurate to suggest that the pattern of imperialist intervention in Afghanistan and the wider region today bears more than a passing resemblance to the British imperialist interventions that began almost 200 years ago. And just as the British were forced to accept that Afghanistan could not be subdued by force, the high and mighty of today’s world have concluded that Afghanistan warrants a ‘political solution’.

Strategic gamble
The US is taking one critical policy decision on Afghanistan after the other
By Aimal Khan
After failing to secure assurances for intensifying operation in North Waziristan and Islamabad unenthusiastic response to accepting the unarmed drones, Pak-US ties are touching its lowest ebb. The shooting down of drone in Pakistani tribal areas by militants on January 23 has added a new dimension to the drone issue in Pakistan.

remembrance
A scholar that was
By Rafi Ullah
Students of ancient South Asian history often encounter names such as Panini and Kautilya. It was due to the rich culture of learning and research that ancient Pakistan attracted students from all over the world to its centres of scholarship with Taxila being one of the most advanced universities of the time. In modern Pakistan, it abundantly goes to the credit of the late Dr Ahmad Hassan Dani who has in large part dug out the historical roots of the country and its people. To call him the repository of the history, archaeology, anthropology and linguistics of the area would not be an exaggeration.

Prime source
The government should put their political
differences aside and plan to solve water issues
By Raja Mohammad Sultan Mahmood
Water is the main source of sustaining life in a society. Its importance, especially for Pakistan which has arid and semi-arid areas and whose water resources are gradually diminishing, has been stressed upon many a time by experts on the subject.

The real issue
The controversy over banning new minarets in Switzerland needs a deeper review before terming it a war against Islam
By Waqar Gillani
Banning new minarets of mosques in a liberal and democratic country like Switzerland has undoubtedly stunned the whole world. Generally, it has been dubbed a step towards the "clash of civilisations". An insight of the Swiss-minaret controversy shows some signs of fear and threats to the liberal norms of the Swiss society. These fears need a positive debate between the Swiss natives — those who overwhelmingly voted for the ban in the November 2009 referendum — and the Muslim parts. A deeper study to know the background of the issue seems necessary to positively resolve the issue before terming this step an attack on Islam and before reacting to this legal right of the Swiss society.

Planning the future city
The contents of this paper are drawn from my personal experiences of working or being associated with programmes and projects in a number of Asian cities over the last two and a half decades and with their planners, academics, students, politicians and NGO and CBO representatives. Many of these programmes and projects were supported by IFIs and bilateral development agencies and most of the references in the paper are from authors known personally to me.

climate
The forsaken lands
By Mohammad Niaz
Climate change has overtaken other environmental issues in recent decades as a challenge for environmentalists and nations to undo actions contributing to this phenomenon. It is posing a large scale economic, social, and environmental challenge to contemporary world. Its effects have been experienced in various sectors of different degrees. Wetlands are no exception. Over the years, it has been proved the size of wetlands depends on climatic and human factors. Climate change is one of the main contributors affecting wetlands and the flora and fauna.

Tapping the tax potential
Pakistan needs to strive very hard to come at par with many developing countries in achieving a desirable tax-to-GDP ratio
By Huzaima Bukhari and Dr Ikramul Haq
The persistent failure of the Federal Board of Revenue (FBR) in widening the tax base and improving tax-to-GDP ratio - despite having generous foreign funding and advice from IMF and World Bank - proves beyond any doubt the inefficiency of federal apex revenue authority. The so-called average annual growth of 12 to 14 percent in tax revenue collection in real terms, after taking into account inflation, is, in fact, in the negative. We have been repeatedly highlighting in these columns that even this so-called growth was achieved by shifting burden of taxes on the poor relying more and more on indirect taxes, even in the garb of income tax.

The wrong way
Deceptive marketing practices, particularly
deceptive advertising, are a common phenomenon
By Hussain H Zaidi
The Competition Commission of Pakistan (CCP) has recently admonished a few banks for misleading advertisements about higher returns on deposits in violation of Section 10 of the Competition Ordinance, 2009 which prohibits deceptive marketing practices.

 

 

analysis

Negotiations after all

It is fitting that the latest phase of the New Great Game in Afghanistan and Pakistan unfolded over the past week in the old imperial capital of London. The British Empire is now a distant memory but Western imperialism is not, and it would not be inaccurate to suggest that the pattern of imperialist intervention in Afghanistan and the wider region today bears more than a passing resemblance to the British imperialist interventions that began almost 200 years ago. And just as the British were forced to accept that Afghanistan could not be subdued by force, the high and mighty of today’s world have concluded that Afghanistan warrants a ‘political solution’.

Perhaps the common hordes should thank Messrs Obama, Brown, and Sarkozy for deciding to seek a ‘political solution’. In general, the Afghan people (and the Iraqi, Haitian, Palestinian, Pakistani, Sudanese and virtually all other peoples of the world) are supposed to be grateful for the largesse of the United States and its friends. We are all trained to treat the world order as perfectly ‘natural’; that securing the patronage of dominant powers and thereby avoid their wrath is our perennial lot.

The liberal imperialism of the current epoch, built around the concepts of ‘peacekeeping’ and ‘reconstruction’, relies on intense propaganda and particularly on the maintenance of a ‘civilised-uncivilised’ binary. Upon close scrutiny it becomes clear that this imperial ideology is scarcely different from the ideology of Victorian Empire. The world may be different but the rhetoric of the powers-that-be has hardly changed.

And rhetoric can only convince for so long. As the saying goes: “You can fool some people some of the time, but you can’t fool all the people all of the time”. And so after almost a decade of incessant speechifying about the ‘medieval’, ‘barbarian’, ‘uncivilised’ Taliban, we are now being told that the only way forward is to negotiate with the bearded beasts.

Of course, many people never believed the rhetoric. Imperialism may claim to represent superior values, but it only represents the basest instincts of those who rule the world. It is, thus, able to clothe itself in whatever garb is necessary to serve its strategic interests. The Americans and their lackeys were never genuinely concerned with the ideology of the Taliban, and the latest pronouncements are conclusive proof of the cynicism and self-interest that informs Washington’s ‘war on terror’.

Nevertheless, for those who did believe that the burdened white man would sweep down on his proverbial stallion to cleanse the region of the Taliban, the London revelations must be deeply disturbing. The quandary is particularly acute for the liberal brigade in Pakistan given the de facto distinction that has been created between the ‘Afghan Taliban’ and the ‘Pakistani Taliban’. While the latter are still sworn enemies of civilisation, the former clearly have some redeeming qualities that permit the possibility of compromise.

The first lesson that Pakistani liberals should learn from what has transpired over the past week is that imperialism never takes it upon itself to clean up messes that it has helped to create. It doesn’t matter that Hilary Clinton has acknowledged that the US was complicit in nurturing the Taliban (and the menace of radical Islamist politics more generally) for the best part of two decades. Hilary Clinton is neither able nor interested in undoing the social conservatism that has beset Pakistani society.

The second and more implicit lesson that liberals (and all other Taliban haters for that matter) must learn from the London conference is that the majority of those who become rabid and violent ideologues of movements like the Taliban are ordinary people from within our own society. It is true that the state has very consciously cultivated radical Islam but simply ranting and raving about the state or its Arab patrons who are fomenting radicalism is neither here nor there. The fact of the matter is that it is not possible to wipe out all the Talibs in Pakistan (or the world for that matter). A political alternative must be fashioned both to the status quo and to the warped worldview of the Islamists.

Here, again, it is dangerous to look towards the ‘civilised’ beacons of ‘freedom’ and ‘democracy’. With the lawyer’s movement, the term ‘civil society’ has become common currency in Pakistan. On cue, international donors of all kinds — USAID foremost amongst them — are throwing money at ‘civil society’. One of the major claims of the Obama administration has been that it has greatly increased civilian aid to Pakistan; a large chunk of this money is going to ‘civil society’ in the name of ‘democratisation’.

On the face of it the ‘democratisation’ agenda is hardly troubling. But in practice ‘democracy promotion’ has become a catchphrase for Western political interventions, to the point of ‘regime change’. The various coloured revolutions in ex-Soviet states are prime examples. The point is simply that the onus is on us to build a political alternative to the Taliban or even consolidate bourgeois democracy. The United States — or any other foreign power — can not be our saviour, or that of any other nation.

If ever there was evidence of this, it is in Haiti, which has just been stricken down by one of the worst natural disasters in recent memory. The US has been at the forefront of relief efforts, but when one reads between the lines it actually becomes clear that the US has been the single biggest contributor to Haiti’s fate. After the US, Haiti was the second country in the Western hemisphere to gain freedom from European colonial rule. Since 1804 when it gained its independence, Haiti has been subject to the full brunt of US imperialism. The US has sponsored various coups throughout Haiti’s modern history, the last in 2004 when the populist president Jean Aristide was ousted for the second time in little over a decade.

Haiti’s earthquake was not man-made, but the extent of the devastation was far greater than it needed to be, in large part because Haiti’s social and economic infrastructure reflects its long-standing subjugation by Empire. In neighbouring Cuba, hurricanes and earthquakes are just as common, but its fierce anti-imperialism has ensured that it has built its capacity to cope with such natural disasters much better than its banana republic neighbours. If only we in Pakistan were able to muster up the courage to do the right things for the right reasons.

caption Ceasefire? Marines get on a Chinook.

 

Strategic gamble

The US is taking one critical policy decision on Afghanistan after the other

By Aimal Khan

After failing to secure assurances for intensifying operation in North Waziristan and Islamabad unenthusiastic response to accepting the unarmed drones, Pak-US ties are touching its lowest ebb. The shooting down of drone in Pakistani tribal areas by militants on January 23 has added a new dimension to the drone issue in Pakistan.

For quite some time now, the VVIP US Officials’ visits to Islamabad seem to be causing dents in Pak-US ties instead of sorting out differences. The recent visit of US Defense Secretary Robert Gates was no exception. Instead of coming down, the number of irritants spoiling Pak-US ties seems to be on the increase. No doubt, the new US administration is desperately trying to get out of the Afghan quagmire, an honourable exit if possible. The option of talking to the Taliban is gaining currency. Everyone is stressing the need for a negotiated settlement of the Afghan imbroglio.

The UN special representative for Afghanistan, Kai Edie, went a step ahead and called for removal of some senior Taliban leaders’ names from the UN list of terrorists and to speed up the review of Taliban detainees at various US detention camps. These measures will serve as confidence building measures.

Pakistan has been reaching out to Taliban in the past for bringing about reconciliation in Afghanistan but it has not met success. The US had recently announced troop surge and indicated that its forces would begin withdrawing from July 2011. The external actors, particularly the regional ones, are desperately trying to protect their interests in the post-withdrawal scenario in Afghanistan while the internal actors are looking for their allies in the region. The re-alignment of forces at national and regional level cannot be ruled out.

In response to the US troop surge, the Taliban claimed of a matching increase of their fighters. The increased acts of violence are indication of the war preparedness of both the sides and their resolve to take the current phase of conflict to a possible conclusion. As both the sides are using all the available resources to get an upper hand in the war, their external supporters will not hesitate to pump million of dollars in this decisive phase of Afghan conflict.

On the one hand, the new US policy aims to win over militants while on the other, it is causing disappointment and unease among the Afghans shattering their confidence. It will be unfortunate and disastrous if the Afghan people are left at the mercy of militants by the international community. The training of the Afghan National Army (ANA) and Afghan National Police (ANP) for replacing international forces by assuming major responsibilities is another issue of the ongoing debates.

For some, the US and NATO forces’ exit is imminent while for others US will not completely withdraw and will maintain its presence. Some question the viability of ANA and ANP training plan and wonder how this goal could be achieved in a few months.

Most of the observers are not ready to accept the argument that the Taliban could be forced to come to the negotiating table. Strategic debates are underway in prominent capitals of the world for devising contingency plans for tackling the post-withdrawal scenario for gaining maximum leverage in Afghanistan. It seems the civil war-like situation is far from ending in Afghanistan and war clouds still hover over the unfortunate country. The ongoing proxy wars are expected to intensify.

Whether it is a summit involving Pakistan, Turkey, and Afghanistan or Pakistan, Iran, and Afghanistan it looks as if the process lacks substance and sincerity. As far as Pakistan is concerned such a process further created misunderstandings and mistrust between the political and military leadership. In such meetings, commitments are made that a country’s soil will not be allowed to use against another country. Unfortunately, regional efforts are aimed at forcing rivals from the Afghan scene or at least minimize their strategic clout. No wonder, hectic diplomatic activities at regional and international level about Afghanistan are going on.

The Afghan government is expected to unveil a major new plan of reintegration of militants by offering jobs, security, education and other social benefits to those Taliban who are ready to defect. The reintegration plan, which could cost more than US$ I billion, is aimed at luring 25,000 to 30,000 militants. The plan is supposed to be financed through pledges to be made in London Conference.

Whether these activities will bring peace or stability to the region in general and Afghanistan in particular or will further complicate the situation, only time will tell? The next 18 months are very important and the future of Afghan people is at stake. The US and its allies want victory at any cost and the militants are bent upon foiling their plans. It is to be seen how the US and its allies, who repeatedly failed to solve the Afghan conflict in eight years, could do it in eighteen months.

The writer is associated with Sungi Development Foundation, Islamabad and can be reached via email: aimalk@yahoo.com

caption Show me how to do it: An Afghan soldier gets training.

 

remembrance

A scholar that was

By Rafi Ullah

Students of ancient South Asian history often encounter names such as Panini and Kautilya. It was due to the rich culture of learning and research that ancient Pakistan attracted students from all over the world to its centres of scholarship with Taxila being one of the most advanced universities of the time. In modern Pakistan, it abundantly goes to the credit of the late Dr Ahmad Hassan Dani who has in large part dug out the historical roots of the country and its people. To call him the repository of the history, archaeology, anthropology and linguistics of the area would not be an exaggeration.

What makes Professor Dani an intellectual of unmatchable stature is his deep understanding of the local knowledge and conventional wisdom in addition to a hold over modern scientific education. From this vantage point, he interpreted the process of continuity and change in the long history of Pakistan.

Dr Dani’s professional career started in 1945 under the supervision of the famous archaeologist, Sir Mortimer Wheeler. In the wake of partition he migrated to East Pakistan and served there in different capacities such as curator at Dhaka Museum and Assistant Professor at the University of Dhaka. In 1962, he joined the University of Peshawar as professor and founded the Department of Archaeology there. From 1971 till his death in 2009, Professor Dani served in the Quaid-i-Azam University Islamabad. Here he remained associated with the departments of History, Anthropology and the Taxila Institute of Asian Civilisations. It is in recognition of his life-long services that he was honoured with the title of Professor Emeritus.

The Taxila Institute of Asian Civilizations owes a lot to Professor Dani. The establishment of the Institute tells the story of his lofty scholastic ideals. Dr Dani had a dream of founding a university at Taxila, the place which he believed was home to the first ever university of the world, dedicated to scholarship and research in Asian Civilizations. As a first step towards the realisation of his ideal, he established "Centre for the Study of the Civilisations of Central Asia" – which was later renamed as the "Taxila Institute of Asian Civilizations" – at the Quaid-i-Azam University, Islamabad. The institute has been an important centre of study and research and has a research journal entitled "Journal of Asian Civilizations" (formerly Journal of Central Asia).

Dr Dani weaves the social and cultural threads of the people of Pakistan with their long forgotten past. He states, "The geographical locale of Pakistan has determined the movements of peoples along with whom their cultures have followed. It is the inner capacity of the Indus valley which has absorbed both of them and it is out of this ethnic intermixture and cultural intermingling that a new Indus pattern has developed. That pattern is the heritage that belongs to the people of Pakistan." (History of Pakistan: Pakistan through Ages)

Second, Dr. Dani makes generous use of interpretation in respect of his archaeological findings. But it should be remembered that he makes interpretations in the light of all the historical developments that have taken place in Pakistan. His deep familiarity with these events and his speculative reasoning is clearly reflected in the passage below:

"Thus in this long period of history several political changes took place and brought in foreign rulers who exercised outside influences. The period began with the rule of the Achaemenians; followed by that of Alexander the Great, and with a short break of the Mauryan rule, there came about the long period of the Bactrian Greeks, the Scythians, the Parthians, the Kushans, the Huns and finally Turki Shahis and Hindu Shahis. All of them exerted great cultural influences which have left unforgettable legacy to present Pakistan. They helped in the creation of the Golden Age of Gandhara and they gave a new basis to the development of Buddhism into a new type called Mahayana Buddhism. Towards the closing years this was replaced by Hinduism, which has left behind many Hindu temples all over the region. In some parts of Balochistan and Northern Areas of Pakistan Zoroastrianism was followed and it left deep influence behind in the ritual practices, shrines and rock carvings, which all became dormant and gradually forgotten in human memory with the coming of Islam."

Dr Dani was also well-aware of the importance of the movements of the people in history. Thus, he sees the development of civilisation in Pakistan as a process of syncretism, assimilation and amalgamation. In his article, Contribution of Gandhara to World Civilization, he writes: "Human civilisation is a product of human ingenuity. Wherever genius of man has had new ideas and the means to execute these ideas into useful creations, there has been progress towards new goals of civilisation. Such ideas originate from intermixing of humans and exchange of views among them. However, these activities happen when new opportunities open the road of free mixing, collaboration and cooperation. Such opportunities arise both as a result of war or in the development of peace which human beings desire to establish for the betterment of mankind."

"Such an opportunity arose with the conquest of Gandhara by the Achaemenian Iranians when the two civilisations of this subcontinent and of Western Asia met in the land of Gandhara. Whether as a result of this, or in addition to this opportunity, the famous University of Takshasila [Taxila], if not originated, at least received new impetus, and the doors were opened for the common pursuit of human knowledge and towards making new contributions to the progress of human civilisation."

The purpose of this short article in the memory of Professor Dani on the eve of his first death anniversary is to remind all of the legend we had among us. We may follow in his footsteps and imitate his multi- and interdisciplinary approach in the study and research of our histories, cultures and societies.

The writer is lecturer at the Taxila Institute of Asian Civilizations, Quaid-i-Azam University, Islamabad. Email: rafi_ula@yahoo.com

 

Prime source

The government should put their political
differences aside and plan to solve water issues

By Raja Mohammad Sultan Mahmood

Water is the main source of sustaining life in a society. Its importance, especially for Pakistan which has arid and semi-arid areas and whose water resources are gradually diminishing, has been stressed upon many a time by experts on the subject.

Our main sources of water are the three rivers that provide about 140 MAF annually. If the annual flow of these rivers had been constant throughout the year, our water supply problems would have been solved to a very large extent. Constant water supply would have been ideal for timely sowing of rabi and kharif crops and electricity.

Our rivers supply about 84 percent of the total waters in the summer season and the rest 16 percent in the winter season. This results in shortage of water supply in the winter season and abundance of water supply in the summer season — which often turns into floods that make life miserable in the countryside.

God has given us the opportunity to use our skills and resources to combat adverse impacts of nature and regulate the natural resources to our advantage. We, fortunately, did this by building three large storages on the Indus Water System — Tarbela, Mangla, and Chashma — up to 1976 and then stopped due to political differences.

The advantage we gained by increasing water supply for enhancing agricultural yields and industrial uses is gradually being neutralised by increase in population and silting of Tarbela and Mangla dams. If we do not build another storage dam immediately, we are likely to face acute water shortage, especially for agricultural production.

Another aspect of the issue is political. People of the lower riparian complain against people of the upper riparian. This mistrust existed between Sindh and Punjab even before partition in the integrated Indus water distribution system and after partition at the time of signing of Indus Water Treaty. The people of Sindh have been, unfortunately, instigated by politicians making them believe that Punjab is not giving their full share of water and with the construction of the other dam on Indus, the problem will aggravate further.

Let us see what the facts are. The construction of Mangla dam has had no effect on the water supply to Sindh, as it was basically providing the water of Ravi, Sutlej and Beas rivers, retained by India for the existing irrigation system in the territory now in Pakistan. Before the construction of Tarbela Dam, water availability to the Sindh farmers was much less. Hence, with the construction of another dam on Indus water supply to Sindh will increase further and reduce the intensity of floods.

In 1999-2000, water availability to Sindh has already reduced by about 10 percent from that provided in the 1991 water apportionment accord, due to silting of Tarbela Dam. In another 3-5 years, it will decrease by another 10 percent. To cater for the mistrust of the Sindh province, the release of waters from dams and barrages can be monitored by irrigation representatives of Sindh to ensure that they get their due share of water.

Water requirement of the country has been gradually increasing since 1947, mainly due to increase in population and better living standards. Water availability to match this increasing requirement was increased through the construction of water storages of Tarbela, Mangla and Chashma reservoirs and by increasing ground water pumping. However, since 1976 there was no increase in water storage capacity of the country and, since 1995, in the ground water pumping capacity, which has reached its optimum expansion capacity. The result is that water availability in the country has almost stagnated and it is not matching the present requirement. This will gradually increase every year.

To correct this imbalance, the government has to put their political differences aside by taking the required actions on a priority basis. It is a race against time to save Pakistan from turning into a desert eventually. We need to work together, not for Punjab or Sindh, but for Pakistan.

caption

A farmer gets his share of water.

 

The real issue

The controversy over banning new minarets in Switzerland needs a deeper review before terming it a war against Islam

By Waqar Gillani

Banning new minarets of mosques in a liberal and democratic country like Switzerland has undoubtedly stunned the whole world. Generally, it has been dubbed a step towards the "clash of civilisations". An insight of the Swiss-minaret controversy shows some signs of fear and threats to the liberal norms of the Swiss society. These fears need a positive debate between the Swiss natives — those who overwhelmingly voted for the ban in the November 2009 referendum — and the Muslim parts. A deeper study to know the background of the issue seems necessary to positively resolve the issue before terming this step an attack on Islam and before reacting to this legal right of the Swiss society.

The issue seems an attempt to assert values of liberal societies by taking measures that take up radical issues. Minaret is a symbol of fear and political hegemony for the Swiss society. For Muslims minaret is a symbol of grandeur in the shape of an architectural identity of a religion and a democratic right. Collectively speaking, the decision is strange and condemnable but it needs efforts to unfold the hidden reasons and fears of the liberal societies like the Swiss.

On November 29, 2009, the Swiss, through a referendum, decided to ban construction of new minarets of mosques. Switzerland’s system of direct democracy enables citizens and pressure groups to demand change in the constitution if they can collect 100,000 signatures within 18 months. In July 2008, the rightwing Swiss People’s Party handed in an initiative, "Against the Construction of Minarets", to the government with 113,540 valid signatures. The referendum was supported by 57.5 percent participating voters. Only four of the 26 Swiss cantons opposed the initiative.

Supporters of minarets see them as political symbols and as a sign of what they term "Islamisation" of Switzerland. Opponents see the ban as infringing upon human rights and harmful to Switzerland’s image and a possible threat to peaceful co-existence of Christians and Muslims in the country.

The minaret controversy actually refers to the construction of minarets, which has been subject to legal and political controversy in Switzerland during the 2000s. In 2007, a group of politicians mainly from the Swiss People’s Party and the Federal Democratic Union sought a constitutional ban on minarets. The controversy began in a small municipality in the northern part of Switzerland in 2005. The contention involved the Turkish cultural association in Wangen bei Olten, which applied for a construction permit to build a six-metre-high minaret on an Islamic centre. The project faced opposition from surrounding residents. The Federal Supreme Court gave the final permission to build the 20 feet-high minaret. It was built in July 2009. From 2006 until 2008, members of the Swiss People’s Party and the Federal Democratic Union launched several cantonal initiatives against the erection of minarets.

The reason to term the elevated towers on mosques as threat to the Swiss culture, rather a sign of tolerance and democracy in a liberal society, seems more social and internal. Minaret — considered a historic architectural symbol of Islam — has many reasons to build. Primarily, it was built to spread the call for prayers of the Muslim. Minaret’s soaring presence can also be seen from far and Muslims can find their way to the mosque. The top of the minarets have tombs with proper spaces from where security can be maintained. Historically, it has an architectural value.

The issue has spawned a debate of the rights of natives and the immigrants. Oskar Freysinger, member of parliament from Swiss Peoples’ Party — who is elected from the canton from where this controversy began — has reportedly said that these minarets, built with Salfi and Wahabi money, are now becoming "potential threat of islamification" in their society. He said Muslims are always welcome in Switzerland and their belief in Allah is no problem for the Swiss. "The only problem is the political and legal part of Islam where it is confrontation with liberal society and democracy. There are some parts of shariah that are contradictory to the Swiss legal system," he said in an interview on Al-Jazeera. "They want to impose a particular view. Moderate Muslims need no minarets," he added. The MP said it was not a theological problem. The MP also said, "We want equilibrium between different religions to be maintained. We have nothing against Islam but legal problems with some parts of Islam."

Muslims seem disappointed after living for more than 40 years in a democratic Switzerland. They believe that the Swiss are misinformed by certain elements. But they have to respect this democratic vote of the Swiss people. They think this decision would be overruled by the United Nations, International Court of Justice, and higher forums where the matter has already been taken up. The issue has sent a message to other European and Western countries. It can become a trend in other countries too.

This seems to be the issue of multi-culturalism and its integration in the liberal societies. These societies generously allowed other cultures in their counties and now fear a misuse of this freedom realising a parallel conventional Islamic system in the hearts and minds of unchanged fundamental Muslims. An inclusive approach is required to positively debate such issues within the societies, inviting all tiers from the government, natives and immigrants.

vaqargillani@gmail.com

 

Planning the future city

The contents of this paper are drawn from my personal experiences of working or being associated with programmes and projects in a number of Asian cities over the last two and a half decades and with their planners, academics, students, politicians and NGO and CBO representatives. Many of these programmes and projects were supported by IFIs and bilateral development agencies and most of the references in the paper are from authors known personally to me.

Introduction

The welfare state model in Europe was born out of an uneasy reconciliation between capitalism and its opponents. Its principles were adopted by most of the newly independent countries (who did not belong to the Soviet block) in the post-Second World War period. The ethos of the model survived because of the division of the world into socialist and capitalist entities and because of the presence of a revolutionary China and a militarily powerful Soviet Union in the UN's Security Council. In these circumstances a global market economy was simply not possible. The collapse of the Soviet Union and the repercussions of the failure of the Cultural Revolution in China changed all this and in political terms capitalism came to dominate the world.

As a result, we are governed today by three global institutions. They determine global politics, culture, finance and development and as such most national development policies and concepts as well. These institutions are all undemocratic in nature and hence their decisions and policies cannot be changed through existing rules, regulations and procedures that determine their functioning. These institutions are: one, the UN which is controlled by five members of the Security Council who won the Second World War and who can individually veto any decision of the UN General Assembly; two, the International Monitory Fund (IMF) and World Bank, which function on the basis of one dollar one vote; and three, the World Trade Organisation (WTO) which was born out of the G-7 green room negotiations that led to the creation of GATT and is controlled by the G-8.

Collectively, these organisations have promoted what has come to be known as the "free market" economy, the most important aspect of which is the freedom of capital to move across national borders and seek investment wherever it can multiply. The structural adjustment process, which most poor countries had to undergo in the decade of the 90s, facilitated the growth of the free market economy and helped in this process. Structural adjustment demanded from national governments the regulating of then balance of payment and returning loans taken from the IFIs. To make this possible countries undergoing structural adjustment agreed to remove subsidies on health, education and housing; increase taxation on utilities; sell their industrial and real assets to the private, national or international corporate sector; and remove restrictions on imports and exports. The resulting national economic crunch meant that the poorer countries could not invest, and in many cases even subsidise, infrastructure projects and these had to be built by the international or national corporate sector through international tendering. As a result, there has been a big boom of international companies bidding for these projects. The Build-Operate-Transfer (BOT) and the Build-Operate-Own (BOO) processes were invented to make infrastructure development possible through this system. Both systems produce infrastructure at more than twice the cost of government produced infrastructure and in addition national governments have to give sovereign guarantees for the investment made by the investors.

A whole new urban development and planning terminology and concepts have been developed to support the market economy. Concepts such as "it is not the business of the state to do business", "cities are the engines of growth", "direct foreign investment", and the concept of linking economic well being with GDP growth alone have had a major impact on national policies of Asian countries. In search of growth and DFI, they have invested in a big way in the creation of industrial zones (instead of in their people) and accepted the concept of "corporate" farming. India is one of the emerging economic giants who have followed these policies since the mid-1990s. As a result, its economic growth in the last decade has varied between 7 and 9 per cent. However, it is estimated that as a result of the creation of 500 Special Economic Zones (for attracting Direct Foreign Investment (DFI) and corporate farming (both promoted by the World Bank for GDP growth) about 400 million people would willingly or unwillingly be forced to move from rural to urban areas by 2015. (Devinder Sharma; Displacing Farmers: India Will have 400 Million Agricultural Refugees; www.dsharma.org)

This is twice the population of the United Kingdom, France and Germany put together. This process is also being promoted in other Asian counties and is in many cases being resisted by the farmers. It is replacing food crops by cash crops and in the process increasing the cost and shortage of food; creating agricultural refugees; and making the state vulnerable to corporate sector pressures and interests.

To promote DFI, the three undemocratic global institutions have also promoted the decentralisation of governance systems, giving considerable power to local level institutions. Increasingly, this power is being used for accessing DFI and identifying projects independently of the provincial or central governments.

IFI pushed political reforms and deregulations have also had a major impact on property markets and have reshaped the politics of land development. Trading across borders in gold and contraband goods is no longer lucrative. As a result, the gangs and mafias involved in these underworld activities have become involved in the real estate business and linked up with their underworld partners abroad for this purpose. This has skewed the land market and promoted massive speculation. The process has been further facilitated by regional conflicts, increasingly porous borders (both for capital and individuals) and the narcotic trade. All this has introduced an element of violence and targeted killings and kidnappings of opponents, rivals and social activists in the land and real estate sector.

The state in almost all cases has responded to these market pressures and made land available for development through landuse conversions, new development schemes and the bulldozing of informal settlements. (Arif Hasan: Understanding Karachi: Planning and Reform for the Future; City Press, Karachi 2000) NGOs and CBOs who have challenged this process have faced two constraints (apart from their own internal organisational weaknesses and culture); one an unsympathetic international media and the other an absence of laws to prevent environmentally and socially inappropriate land conversions. Even where such laws do exist, rules, regulations and procedures and institutions to implement them are often missing. As a result, courts often deliver judgements that promote inequity, poverty and social fragmentation. Media too is increasing being controlled by the global giants, who promote the new paradigm, and Richard Mindoch has predicted that very soon there will only be three global media grants and his company will be one of them. In 1983 there were over 50 such corporations. By 2002 they had fallen to nine. National media, where journalists and the intellectuals are fighting for reform and justice, are responsive to social and environmental issues but their owners are subject to both state and corporate sector pressures that they cannot resist.

Poverty in the countries who did not have the means to respond positively to the free market, has increased and the rich-poor divide has increased in all cases. The most damaging aspect of this divide is promoted by the privatisation of education. This is introducing two systems of education, private for the rich and public for the poor, and has very serious long term repercussions. To rectify this increasing divide, the IFIs have promoted the concept of safety nets for the poor for which loans are being provided and the role of NGOs in these programmes is being encouraged. Safety nets are serving a very small percentage of the effected population and NGO involvement with big funds available to them is adversely affecting NGO culture and its relationship with development policies and poor communities. Loans for infrastructure projects have also increased, especially for road projects. There is an increasing questioning of these loans and aid programmes and the projects they promote by civil society organisations in the South. There is evidence that shows that most of the projects are either failures or unsustainable, expensive and that much (in some cases most) of the loans go back to the north in the shape of technical assistance, overheads and contractors' profits promoted by the concept of international tenders.

What has been elaborated above has had a profound effect on the shape and politics of our cities. The shape that our cities are taking and the reasons behind them are the result of a powerful nexus of developers and investors (many of dubious origins); compromised government institutions and bureaucrats; and politicians seeking global capital for shaping their cities in the image of the "global city" - an image that is promoted (implicitly or explicitly) by the three global institutions I mentioned in the beginning of this paper. To promote this paradigm, which I call the neo-liberal urban development paradigm, the concept of the world class or global city has also been promoted. It is a powerful concept and has almost universally been accepted by national government policy makers, the newly emerging middle classes and academia, especially in the West.

The World Class City concept and its repercussions

Karachi, Bombay, Hochiminh City, Seoul, Delhi all aspire to become World Class cities. Some wish to become like Shanghai and others like Dubai although the context of Shanghai or Dubai is very far removed from them. According to the World Class city agenda, the city should have iconic architecture by which it should be recognised, such as the highest building or fountain in the world. It should be branded for a particular cultural, industrial or other produce or happening. It should be an international event city (Olympics, sports fairs). It should have high-rise apartments as opposed to upgraded settlements and low-rise neighbourhoods. It should cater to tourism (which is often at the expense of local commerce). It should have malls as opposed to traditional markets. For solving its increasing traffic problem (the result of bank loans for the purchase of cars) it should build flyovers, underpasses and expressways rather than restrict the production and purchase of automobiles and manage traffic better. Doing all this is an expensive agenda and for it the city has to seek DFI and the support of International Financial Institutions (IFIs). For accessing DFI, investment friendly infrastructure has to be developed and the image of the World Class city established. For establishing this image, poverty is pushed out of the city to the periphery and already poor-unfriendly byelaws (which are anti-street, anti-pedestrian, anti-mixed landuse and anti-dissolved space) are made even more unfriendly by permitting environmentally and socially unfriendly landuse conversions. The three most important repercussions of this agenda are that global capital increasing determines the physical and social form of the city and in the process projects have replaced planning and landuse is now determined on the basis of land value alone and not on the basis of social and environmental considerations. Land has unashamedly become a commodity and so the modernist urban planning theory is no longer valid.

The agenda for opting for high-rise redevelopment rather than the upgrading of settlements; relocating old informal settlements to the periphery of the city; and making room for mega projects and mega events has resulted in a massive increase in evictions all over Asia in the last five years. Over 500,000 persons have been evicted in Delhi for the preparation of the 2010 Asian Olympics alone. All studies show that the evicted population was not consulted in the eviction and/or relocation process; that there was always an element of subtle coercion and often of brute force; and that the evicted and/or relocated population became poorer than before and often in debt whereas before they were debt free. Children's education too has always been disrupted as a result; jobs lost and travel time to and from work increased to over five to six hours in many cases, thus effecting families and social life, health, recreation and entertainment activities. The result of the above policies, along with an absence of appropriately subsidised land development and social housing, has seen a phenomenal increase in unserviced informal settlements.

Politicians and government planners justify the high-rise redevelopment approach by insisting that a modern city has to be high-rise with open areas in-between. They also insist that high densities, needed for a well-functioning city, cannot be achieved by upgrading and densifying existing neighbourhoods. The image of a city is governed by the perception of what it should be. One can discuss and disagree on it. However, a recent International Institute for Environment and Development (IIED) supported study by the Urban Research and Design Cell at the Department of Architecture and Planning (DAP), NED University, Karachi, of Karachi settlements and apartment complexes has conclusively established that the same densities as prescribed by the Karachi Building Control Authority (KBCA) for high-rise low income apartments can be achieved by building row houses of ground plus two stories (along with required social infrastructure) without damaging the environment or adversely effecting social life.

The World Class image of the city has no place in it for informal businesses and hawkers except as organised tourist attractions. The link of these hawkers and businesses with low income people (for whom they make life affordable) and with commuters is not recognised and as such large scale evictions of informal businesses and hawkers have taken place without any compensation in all the major cities in the Asia-Pacific region. This has impoverished millions of families.

The free market economy led in the last decade to considerable liquidity in banks and leasing companies. This has been utilised for providing loans for the purchase of cars. Evidence suggests that these loans were provided as a result of an understanding between the automobile industry and global banking and financial sectors. Many billion dollars of loans have increased the population of cars in many Asian mega and secondary cities in the last decade by over 80 to 100 per cent. In Karachi alone banks and leasing companies gave the rupee equivalent of US$ 1.8 billion for the purchase of an average of 506 vehicles per day in the financial year 2006-2007. As a result of this automobile industry-banking sector nexus, traffic in the larger cities of the Asia-Pacific region has become a nightmare. To solve this problem, city planners have initiated a massive programme for the construction of signal-free roads, flyovers, underpasses and expressways which have aggravated the situation and in addition made life difficult for pedestrians and commuters. In addition to these traffic related projects, non-motorised means of transport, used mostly by the poor (such as cyclos, rickshaws, animal drawn carts) have also been banned in many cities or their movement restricted to the periphery or to low income settlements. Mass transit light rail projects meanwhile have failed to provide an adequate or affordable alternative to the poor since they are essentially projects and not part of a larger comprehensive transport plan.

As a result of the above and related processes, the once poor-friendly cities of Asia have become poor-unfriendly, both for the migrants (mainly agricultural refugees) and for communities who have lived in them for decades if not for centuries. Land, construction costs and rentals have multiplied manifold as compared to daily wages for unskilled labour.

The struggle against the negative aspects of the World Class City

I do not know of any city or country in the Asia-Pacific region where the neo-liberal urban development paradigm has been challenged as a paradigm or an alternative vision for the city has been promoted. However, projects promoted by the paradigm have been successfully challenged in those countries who have a populist political culture and strong civil society organisations and networks.

Global capital, as has been said earlier, has desperately been looking for a home. Real estate development for the new rich and for tourism offers the best opportunities for investment especially in countries where regulatory frameworks are weak. Tourist resorts and condominiums along the beaches of Asian cities are prime locations for this development. For commercial plazas, the inner city informal settlements, if evicted, promise lucrative returns. National and the newly empowered city governments have clandestinely sold or arranged to sell these assets to national and/or international companies without the knowledge of the residents of these settlements and without developing any procedures for resettlement of the evicted population. According some reports, (Ardian Levy and Cathy Scott-Clark; Country for Sale; The Guardian, April 26, 2008) almost half of Cambodia has been sold to foreign investors between 2006 and 2008, including seven islands off the coast and a large number of beaches and the homes of residents bulldozed. As a result, there was an increase of over 1,500 per cent in 2007 over the preceding four years in DFI. This investment has impoverished the poor and made them jobless and homeless. It has benefited the investors, their local partners and politicians. Cambodia is a poor country, still recovering from years of devastation, genocide and war and as such with an almost non-existent civil society movement. So this clandestine sale was possible, with little or no organised resistance.

An alternative to the World Class City concept?

There is a desperate need for an alternative vision to the World Class city concept. But what can it be? An inclusive city based on the principles of justice and equity? A pedestrian and commuter friendly city? By what process do you develop a vision? And then there are a number of sub issues. After developing a vision how do you promote it? Or will it be born out the processes that challenge (successfully and unsuccessfully) the projects promoted by the neo-liberal urban development paradigm? Maybe we need to discuss this but in the meantime what should one do?

In the case of Karachi, I see projects replacing planning for the foreseeable future. I have tried to promote some principles on the basis of which projects should be judged and/or modified. These are: one, projects should not damage the ecology of the region in which the city is located. Two, projects should as a priority seek to serve the interests of the majority who in the case of our cities are lower and lower middle income groups. Three, projects should decide landuse on the basis of social and environmental considerations and not on the basis of land values alone. And four, projects should protect the tangible and intangible cultural heritage of the communities that live in them. This would in my opinion produce better projects. But you cannot effectively follow these principles if you do not have affection and respect for the natural environment and for the people who form the majority in your cities. Ultimately, it is really an issue of ethics.

In the past century, academic institutions have played an important role in promoting more just and equitable concepts of development and planning. The Hippocratic oath that doctors take is said to have had a humanising affect on the medial profession. I often think that it might help if graduating architects, planners and engineers should take a similar sort of oath and if they do not follow the terms of the oath, professional organisations should remove their names from the list of practising professionals. In 1983, after evaluating the environmental damage that some of my work had done, I promised in an article. "I will not do projects that will irreparably damage the ecology and environment of the area in which they are located; I will not do projects that increase poverty, dislocate people and destroy the tangible and intangible cultural heritage of communities that live in the city; I will not do projects that destroy multi-class public space and violate building byelaws and zoning regulations; and I will always object to insensitive projects that do all this, provided I can offer viable alternatives." I have tried to keep that promise and I think I have succeeded. If many others make a similar promise and keep it, things might be only marginally better but in the long run a net set of ethics would emerge.

The paper was prepared for the IAPS-CSDE Network Symposia on Culture, Space and Revitalization, Istanbul, Turkey, 12 - 16 October 2009. It was revised for publication on 14 January 2010

Email: arifhasan@cyber.net.pk

caption The World Class City concept and its repercussions on urban planning for cities in the Asia Pacific region

By Arif Hasan

caption2 Karachi (main): Ever expanding; (above) Lahore: In dire need of a facelift.

 

 

climate

The forsaken lands

By Mohammad Niaz

Climate change has overtaken other environmental issues in recent decades as a challenge for environmentalists and nations to undo actions contributing to this phenomenon. It is posing a large scale economic, social, and environmental challenge to contemporary world. Its effects have been experienced in various sectors of different degrees. Wetlands are no exception. Over the years, it has been proved the size of wetlands depends on climatic and human factors. Climate change is one of the main contributors affecting wetlands and the flora and fauna.

Every year World Wetlands Day is observed to focus on effective conservation of wetlands and their resources. Theme for the World Wetlands Day 2010 is, "Wetlands, Biodiversity, and Climate Change" and its focus is on "Caring for our wetlands – an answer to climate change". It is a way of taking into account the impact of climate change on wetland ecosystems and their role in climate change mitigation and adaptation. The international community has also declared 2010 as the International Year of Biodiversity.

Pakistan has a diversity of wetlands which are not only biologically diverse but also stand as a cultural heritage of the country. The country supports more than 780,000 ha of wetlands that cover 9.7 percent of the total land area, with 225 nationally significant wetlands, of which 19 have been recognised as Ramsar sites of global significance.

These wetlands produce large-scale ecological and socio-economic changes that are ecologically and socially desirable, particularly for the wetlands-dependent communities from coastal mangroves and mud flats on the Indus Delta to the glacial lakes of high Himalayas. However, these wetlands would suffer at large because of the current anthropogenic factors contributing to wetlands degradation and from climate change.

The conference on climate change held recently in December last year in Copenhagen shredded hopes of many optimistic conservationists and environmentalists who believed that proactive strategies would be the outcome of the conference to meet the biggest challenge of the 21st century. It seems that economic growth, both in the rich and poor countries in the contemporary world, has more weight than safeguarding environmental resources in the first place.

The Intergovernmental Panel on Climate Change and the Millennium Ecosystem Assessment identified climate change as one of the main drivers of biodiversity loss that would disrupt services of essential ecosystems. Conservation of biodiversity is in itself a solution to climate change while the ravages of economic growth contribute to deplete biodiversity and minimise options for coping with global climate change. The projected climate change scenario, including global temperature increase, sea level rise, capping off of glaciers, increase of extreme climate events, change in distribution and intensity of rainfall will largely influence eco regions of the world and enhance vulnerability of wetlands. This will put at stake the opportunities and functions that wetlands provide for humans and biodiversity.

In arid and semi-arid areas of the country drought and increased use of water for irrigation will not only affect the supply of water for and from wetlands but will also register significant impacts on wetlands. This will tender associated flora and fauna more temperature-sensitive. Given the ecologically restricted and fragmented nature of flora and fauna associated with wetlands, temperature and water level changes will severely affect their status. Similarly, in alpine regions melting glaciers will extremely stress the wetlands biota over time.

The changing climatic panorama will substantially affect wetlands in terms of fish production, staging and wintering grounds of migratory waterfowl, habitat degradation of rare and endangered fauna like Indus dolphin, wetland food chain, water storage and discharge, and carbon storage with socio-economic and ecological implications.

Inland and coastal wetlands communities will bear the bulk of major impacts of climate change that alter ecosystems and water cycle. Therefore, poor people in particular are vulnerable to these impacts. They are often dependant on the food, livestock grazing, fuel wood, fiber and clean drinking water that natural wetlands supply.

In Pakistan, a big portion of the land in the north and west consists of mountainous track while the remaining areas represent alluvial plains of the Indus River and its tributaries. Three mighty mountain ranges of the world, namely Karakoram, Hindukush, and Himalaya range form an extensive watershed of the Indus River which is lifeline of irrigation system in the country. These major areas are affected by climate change. Melting glaciers can change the river and wetlands ecology.

According to available reports, mangrove forests in Sindh and Balochistan along the coastal region support about 48 species of macro fauna that will also be largely affected by climate change. Studies show that by 2030 Pakistan will grow warmer by about 1°C. One of the active contributing factors to climate change is the burning of peat that local people extract from rich peat land and use it for cooking and heating purpose.

According to conservative estimates peat-lands form only 3 percent of the world’s land area while their degradation make up 10 percent of all fossil fuel carbon dioxide (CO2) emissions. Conversion of wetlands, deforestation, drainage, and burning largely contribute to the climate change. Moreover, when drained peat is exposed it comes in contact with air and oxidation of peat occurs that releases huge amounts of CO2 which is released into the atmosphere.

Climate change and biodiversity are interconnected, i.e. climate change has enormous effects on biodiversity and, similarly, changes in biodiversity and ecosystem also contribute to climate change. According to a report of Convention on Biological Diversity, about 10 percent of species assessed so far will be at an increasingly higher risk of extinction for every 1°C rise in global temperature.

World Wetlands Day is observed on February 2 every year.

The writer is Deputy Conservator, NWFP Wildlife Department

caption Local solutions: A man canoes through wetland.

 

Tapping the tax potential

Pakistan needs to strive very hard to come at par with many developing countries in achieving a desirable tax-to-GDP ratio

By Huzaima Bukhari and Dr Ikramul Haq

The persistent failure of the Federal Board of Revenue (FBR) in widening the tax base and improving tax-to-GDP ratio - despite having generous foreign funding and advice from IMF and World Bank - proves beyond any doubt the inefficiency of federal apex revenue authority. The so-called average annual growth of 12 to 14 percent in tax revenue collection in real terms, after taking into account inflation, is, in fact, in the negative. We have been repeatedly highlighting in these columns that even this so-called growth was achieved by shifting burden of taxes on the poor relying more and more on indirect taxes, even in the garb of income tax.

The most disappointing area of FBR's reforms during the last five years is its failure to tap the real tax potential — not bringing the rich and mighty in the tax net. The strong agriculturist lobby — landed aristocracy having 90 percent of landholding - is not paying personal income tax or any kind of progressive tax. This is why FBR has failed to improve tax-to-GDP ratio despite the imposition of all kinds of regressive taxes and resorting to procedural high-handedness.

In financial year 2006-07, FBR surpassed even its revised target by over 10 billion - collecting Rs. 843 billion. It could have easily achieved Rs. three trillion mark in that year if exemption was not extended for another year to capital gains on sales of listed scrips and big absentee landowners were taxed on their wealth and income. During the last two years, collection could not cross the figure of Rs1.5 trillion — actual potential is not less than Rs4 trillion (see our article, FBR: living under delusions, The News, November 1, 2009). It clearly indicates that the existing tax base is not capable of yielding any further - it is already overtaxed. The policy of squeezing the existing taxpayers to the maximum extent and not bringing into tax net at least 25 million potential taxpayers is the real issue (see our article, Taxes and democracy, The News, January 3, 2010).

It is an admitted fact that the so-called "record collections" by the FBR in the past was largely due to higher collection of import-based taxes and withholding of money at source from people who did not even have taxable income. Revenue target of Rs1.380 trillion for current year as we analysed earlier is under-fixed as our revenue potential is not less than Rs4 trillion provided landed aristocracy pays tax on its collossal income and wealth, exemption on capital gains is withdrawn and progressive taxes like wealth tax, gift tax, estate duty, excess profit tax and tax on undistributed reserves are reintroduced - these were withdrawn by military dictators.

The real tax potential can be tapped by broadening tax-base and reintroducing the progressive taxes. There is a consensus between official and independent quarters that Pakistan needs to strive very hard to come at par with many developing countries in achieving a desirable tax-to-GDP ratio of over 15 percent (presently it is dismally low at 8.2 percent). Some radical changes like reduction of exorbitant sales tax rate, equitable tax base and simpler and fairer tax procedures are required to encourage investments and savings. The government needs to re-prioritize its tax goals while preparing budget for fiscal year 2010-11 to improve tax-to-GDP ratio, attain better compliance and collections, coupled with rapid industrial and business growth.

It is tragic that successive governments — military and civilian alike — have shown least concern to tax undocumented economy and benami transactions. The mighty sections of society are engaged in these transactions and FBR being their handmaid has neither will nor ability to tax them. Multinational companies through abusive transfer pricing every year avoid billions of rupees in tax, but FBR instead of recovering it gives them awards for "excellent performance" (sic). It is an undeniable fact that there prevails massive sales tax evasion coupled with non-reporting of income in Pakistan. The elected coalition government must tackle the issue of broadening tax base on priority basis.

The people should be given tax benefit/incentive which will help expanding tax base, improve documentation and better collection of taxes without raising hue and cry from any segment of society. A well-thought-for scheme is required that should not only check leakages in tax collection, but also encourage the people to file their income tax and sales tax returns. The twin goals of expanding tax base and combating tax evasion should be attained simultaneously. Present massive evasion in customs, income tax and sales tax can only be tackled through implementing Tax Intelligence System (TIS) which is capable of recording, storing and cross-matching all inflows and out flows.

Since FBR has now developed an online database and registration mechanism of registered persons, the government in the coming budget, after levying VAT should announce the following scheme:

Anybody who pays VAT in a financial year should be entitled to claim refund of 20 percent of the amount paid. The procedure for claiming refund should be simple i.e. he should send invoices to Central Tax & Refund Depository, which will authorise refund from the nearest branch of National Bank, after verification of genuineness of the invoice (by checking sellers' registration number). In this way FBR can develop data base about sales and services provided by all registered persons and then cross verify the same with the particulars declared by them in their VAT/income tax returns; or alternately

Any person who pays VAT may be allowed to claim credit say 10 percent against his income tax liability by producing all VAT invoices obtained by him throughout the year. Detailed mechanism can be devised to cater for the situation where income tax liability is less than amount of credit of VAT.

In this scheme, the people may choose not to claim full credit of VAT paid by them since they could not justify sources of their full expenses. To overcome this situation the government can announce immunity for 3 years from scrutiny of their expenses declared through VAT invoices. This scheme will encourage people to obtain VAT invoice for each transaction, which is presently not being insisted.

The State must remember that if taxation is viewed as being unfair or favouring some chosen ones, it remains counter productive in the long run. Special efforts and rational policies are needed to restructure the tax system and restore public confidence in the tax officials. Even a good tax system will not work if the prevalent negative mindset of the tax official persists. There is an immediate need to improve both the system and the human fabric that controls it.

At present, the FBR instead of performing its prime duty of collecting revenues where due but avoided is busy in legislating laws - keep on issuing notifications, circulars and what not. On the directions of foreign masters, who have given loans of millions of dollars for tax reforms (sic), FBR has assumed the role of legislator and policymaker, which is highly lamentable.

FBR should be an autonomous body insulated from political, financial and administrative pressures, but in no way it should assume the role of law and policymaker, which under the Constitution is the sole prerogative of people of Pakistan through their elected representatives. The Parliament should devise, through democratic process, a rationale and acceptable tax policy after taking input from all the stakeholders and experts in the field. This alone can help broadening tax base and improving tax-to-GDP ratio in the country.

The writers, tax lawyers and authors of many books, are members of visiting faculty of Lahore University of Management Sciences (LUMS)

 

The wrong way

Deceptive marketing practices, particularly
deceptive advertising, are a common phenomenon

By Hussain H Zaidi

The Competition Commission of Pakistan (CCP) has recently admonished a few banks for misleading advertisements about higher returns on deposits in violation of Section 10 of the Competition Ordinance, 2009 which prohibits deceptive marketing practices.

Under Section 10 of the Competition Ordinance, "No undertaking shall enter into deceptive marketing practices. "Such practices are defined in a comprehensive way to cover either of the following: a) false or misleading information, which may harm the business interest of another enterprise; b) false or misleading information to consumers, including information that lacks reasonable basis, relating to price, character, method, place of production, properties, suitability for use, or quality of goods; c) false or misleading comparison of goods in advertising; and d) fraudulent use of another business’s trademark, firm name, product labeling or packaging. As recently clarified by the Commission, the Section 10 of the Competition Ordinance applies to goods as well as services.

In the case, according to the CCP, the banks did not specify the basis of the calculation of the expected rate of return. Nor were consequences of early withdrawal from the deposits mentioned. Moreover, important information was carried in small print.

A single member bench of the CCP held "the impugned advertisements as deceptive and misleading, in that the characters/features of the product, e.g. the rate of returns offered by the banks are based on simple or nominal rates, and this has not been clarified. The consequences of early withdrawal from the deposit accounts are not specified also. Important information is given in very small prints. Such advertisements are, therefore, misleading to consumers lacking a reasonable basis related to the character of goods/services apart from capable of harming other businesses interests in terms of section 10 (2) (a) & (b) of the Ordinance."

In response, banks gave the undertaking to the Commission that in future their advertisements and promotional material would clearly specify the rate of profit or rate of return along with the relevant terms and conditions and disclaimers if any in a manner understood by an average consumer.

The CCP, formerly the Monopoly Control Authority of Pakistan, is entrusted with enforcing competition among businesses as well as ensuring fair trading practices, which includes curbing deceptive marketing practices. In respect of the latter, the Office of Fair Trading has been established under the Commission.

Deceptive marketing practices, particularly deceptive advertising, are a common phenomenon in Pakistan. Businesses resort to aggressive marketing in order to increase their sales and lure customers away from their competitors. All else being equal, the more aggressive the marketing in an industry, the greater the chances that the firms will resort to deceptive marketing that distorts, misrepresents, or conceals facts. The purpose is to get the potential customer into buying or buying in such quantity, which he will not otherwise. Some examples are:

Faced with stiff price competition, cellular service providers have come up with various ‘inexpensive’ packages and are using aggressive advertising to sell the same. However, the advertisements do not clearly inform the customers about the caveats attached with these packages. For instance, one cellular service provider claims to offer the world’s cheapest call. While the accuracy of the claim is questionable, it is not clear whether the call is the world’s cheapest in terms of being local, national, or international; from network to network or to all networks.

Every mobile company claims that it offers the lowest call or text rates. The claim prima facie is ridiculous, simply because not all service providers can have the lowest call or SMS rate.

Cellular service providers have also come up with ‘cheap’ minute per call rates. However, the advertisements either do not mention at all, or mention in small print, that the next minute starts after every 30 or 45 seconds. Moreover, hidden charges, such as call connecting charges and taxes are not clearly specified. In September last, the CCP reprimanded two cellular companies for indulging in deceptive marketing. For instance, one company’s package lacked reasonable basis as to both price and character of the offer. It was not clearly mentioned whether call rates were inclusive or exclusive of taxes. Moreover, the duration of the call was not specified.

Banks and other financial institutions while encouraging consumers to open savings accounts do not adequately disclose certain crucial facts, such as whether the promised interest is simple or compound, whether interest rate varies with payment period (monthly, six-monthly or annual) and whether there are any compulsory deductions from the promised payment.

Marketing of products relating to beauty and health/fitness industries is in many cases false or misleading. Potential customers are made to believe that the product being offered, and endorsed by some celebrity, can do wonders in reducing weight, accelerating growth or having a fair complexion. Sometimes, a product is claimed to provide a cure for a number of health and beauty related problems. The manufacturers of one cream, for instance, claim that it has multiple uses or advantages ranging from fair complexion to healing of wounds and burns to even treatment of cancer. On which basis do they make such a bold claim remains a mystery.

Evening newspapers in order to swell the size of their readership resort to creating hype and sensationalism. For instance, a newspaper will carry the headline, "The stock market collapsed," in very large fonts followed by a question mark in extremely small print. Such a misleading display is enough to lure a curious commuter at a traffic signal, where such newspapers are generally purchased, into buying a copy of the paper.

Deceptive marketing practices are partly a question of business ethics and partly a question of government regulation of the commercial activity. Do the businesses owe any responsibility to society in general and their customers in particular? Or are they responsible only to their shareholders and concerned primarily with maximising profits by any means? There is a school which maintains that businesses’ responsibility is only to themselves and that corporate social responsibility is a meaningless term. If this view is accepted, then ‘deceptive’ marketing practices become legitimate though they main remain illegal depending upon the legal framework. However, such a view is not widely accepted because businesses being part of society owe responsibility to it. At least they owe responsibility to their customers — both potential and existing.

Corporate social responsibility has to be supplemented with government regulation. In the wake of the recent global financial crisis, few economists now believe in a laissez faire economy, where the government keeps its hands off business activity. Instead, it is almost universally believed that the government has to play an important role in ensuring competition and fair business practices. Economic liberalisation does not mean giving carte blanche to businesses.

E-mail: hussainhzaidi@gmail.com

 

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