Figuring out what’s happening in China

Communist Party cadres have filled meeting halls around China to hear a somber, secretive warning issued by senior leaders. Power could escape their grip, they have been told, unless the party eradicates SEVEN subversive currents coursing through Chinese society.

These SEVEN perils were enumerated in a memo, referred to as Document No. 9, that bears the unmistakable imprimatur of Xi Jinping, China’s new top leader.

Seven Western Perils:

1. Western Constitutional Democracy;

 2. Universal Values of Human Rights;

3. Media Independence;

4. Civic Participation;

5. Pro-Market Neo-Liberalism;

6. Nihilist Criticisms of the Party’s past; . . . 

See the full story, “China memo reveals fears of Western influence,” in the International Herald Tribune – Pakistan print edition of August 21, 2013.

That’s life!

See it negatively or positively! That’s life! 

[The News, August 21, 2013]

Sahafat Ki Taqat Aur Faayeda

Please note: This post has been shifted to the Urdu Blog - Civil Pakistan. To see it, click the link below:

Sahafat Ki Taqat Aur Faayeda

Matiullah Turab - Afghan smith of metal and words

Matiullah Turab is nearly illiterate. He is a metal smith by day and poet by night. He relies on his mind to retain his poems.

“A poet’s job is not to write about love,” he growls, his booming voice blending with the ambient noise of the workshop. “A poet’s job is not to write about flowers. A poet must write about the plight and pain of the people.”

That’s Turab’s choice. He is a people of the poet.

“With his unflinching words, Mr. Turab offers a voice for Afghans grown cynical about the war and its perpetrators: the Americans, the Taliban, the Afghan government, Pakistan.”

Even in translation, his poetry exhibits brilliance:

War has turned into a trade

Heads have been sold

as if they weigh like cotton,

and at the scales sit such judges

who taste the blood, then decide the price

Or:

O flag-beareres of the world,

you have pained us a lot in the name of

security

you cry of peace and security,

and you dispatch guns and ammunition

Or:

O graveyard of skulls and oppression

Rip this earth open and come out

They taunt me with your blood,

and you lie intoxicated with thoughts of virgins.

[From the International Herald Tribune - Pakistan print edition]

See the full story in the New York Times of August 19, or International Herald Tribune of August 20, 2013. Here is the link:

http://www.nytimes.com/2013/08/19/world/asia/an-afghan-poet-shapes-metal-and-hard-words.html?pagewanted=all&gwh=16BD4DB3AB5A50EB1F047B5F4C08DF7A

What about internal sovereignty?

The so-called nationalists maintain Drone attacks are damaging the sovereignty of Pakistan!

These nationalists include Rightists of various hues such as Jamat-e-Islami to Jamiat-e-Ulama-e-Islam (F), and other somewhat liberal elements as well. They know that Pakistan is a declared ally of the US in the war against terror, and in that case, it’s of no significance whose Drones they are and whose territory they are targeting. Also, Bob Woodward’s Obama’s wars and Wikileaks establish Pakistan’s tacit approval of the Drone attacks.

Sure, the nationalists’ anti-American stance and dubbing the present government as US-backed validate their argument. Indeed, by way of inference also, most of these nationalists lean toward the Taliban who are openly attacking the sovereignty of Pakistan. But it seems they have no idea of internal sovereignty, but are concerned only about guarding the external sovereignty of Pakistan which is in no danger by the Drone attacks.

Is a country merely a piece of land whose sovereignty consists only in its territoriality? It could have been so in the olden times when principalities existed. Presently, sovereignty is a function of legality and constitutionality. When a new country emerges, its first urge is to attain legal constitutional status.

In today’s world, territorial sovereignty is just one part of the legal constitutional status of a country that endows it with its real sovereignty. This sovereignty is an internal phenomenon which gives a tract of land and a population of individual persons inhabiting that tract an identity and the status of a country. Internally this sovereignty is a collection of sovereign individuals whose life, property and rights/freedoms are ensured by the legal and constitutional arrangement of that country. Externally this sovereignty embodies in its territorial boundaries defined by the same legal and constitutional arrangement.

Thus, sovereignty requires safeguarding of the physical borders from the external invaders not as an end in-it-self but as a means to protecting life, property and rights/freedoms of the sovereign individuals who live inside those physical borders. Likewise, sovereignty does require protection of life, property and rights/freedoms of the individual persons from the internal invaders also. They may be Taliban, or other individuals, groups, forces, parties, or institutions. That sums up our argument: sovereignty derives from sovereign individuals who bind themselves into a legal and constitutional arrangement, and reverts to them.

Further to this, any such legal and constitutional arrangement creates various institutions to take care of the functions of the sovereignty of a country. In our case, the parliament, provincial assemblies, the courts, the election commission, auditor general, the armed forces, etc., are brought to life but to serve the same purpose. These institutions derive their existence and mandate from the legal and constitutional arrangement the soul objective of which is to help create such an environment where individual citizens are free to live as they wish and where their life, property and rights/freedoms are safe from encroachers like Taliban.

As against this, the nationalist clatter of sovereignty is just hollow. They do not see the writ of government being challenged and damage being done to the sovereignty of the country by these internal invaders and their mentors inside and outside the government. Is not challenging the writ of the government a serious crime? Is not taking up arms against the state a capital crime? Aren’t the Taliban waging an open and declared war against the state of Pakistan? In other words, against the sovereign individuals of Pakistan! Aren’t they inflicting unbearable losses to the life, property and rights/freedoms of the citizens of Pakistan? Isn’t sovereignty of Pakistan at stake at the hands of these insider invaders?

This hollow nationalism directly amounts to supporting the Taliban, a declared enemy of the legal and constitutional sovereignty of its sovereign individuals. These nationalists never raise any voice in favor of the sovereignty of Pakistan’s individual citizens. They never show any concern about the internal sovereignty of this country. Because not only is their campaign part of their misleading politics but they are the potential invaders of the sovereign individuals as well as the legal and constitutional sovereignty of this country.

Ironically, their focus is on the collateral damage of life and property done by Drone attacks, but they are blind to the same damage of far greater magnitude done by the Taliban. By their logic, if some criminals take a family inside their home hostage, and if police come to this family’s rescue, and as a result of police’s action one or two innocent persons lose their life, then it is police which is to be blamed, not the criminals. Common sense defies this nationalism!

Let these nationalists exalt the criminals. It is their right. But it is for the sovereign individuals to realize what their nationalism means and what it has in store for their sovereignty and Pakistan’s as well!

[This article was completed on December 5, 2010.]

14 August Ko Kya Hua!

Please note: This post has been shifted to the Urdu Blog - Civil Pakistan. To see it, click the link below:

14 August Ko Kya Hua!

Riyasati Ashrafiya (State Aristocracy) thriving on taxpayers’ money

Taxes for what
By Huzaima Bukhari & Dr. Ikramul Haq

The government’s yearning for “more and more taxes” has become a point of irritation for the citizens who argue where are the entitlements promised in the Constitution as quid pro quo?

Successive governments — military and civilian alike — have failed to convince the people that payment of taxes is their collective responsibility. The major reason for tax defiant culture in Pakistan is abuse of taxpayers’ money by Riasti Ashrafiya (state oligarchy) — militro-judicial-civil complex and public office holders — for plots, perquisites, personal comforts and luxuries.

People say if the government cannot protect their life and property, it has no right to collect taxes. In a democratic polity, taxes are collected for providing the citizens universal entitlements e.g. health, education, housing, transport, and civic amenities etc. The valid argument against paying taxes in Pakistanis is that it constitutes extortion by the ruling oligarchy for perpetuation of its control over resources.

The government’s yearning for “more and more taxes” has become a point of irritation for the citizens who argue where are the entitlements promised in the Constitution as quid pro quo? Excessive taxation without growth and equity has only compounded our economic ills — look at the number of fiscal deficit, quantum of internal and external debts, rate of inflation etc.

Voicing his concern, Nadeem-Ul-Haque, former Deputy Chairman of Planning Commission, in Reform or face fundamental ascendency, emphasised, “the state must first provide the social contract i.e. good law and order and security of life. It must dismantle the rent seeking that protects the rich….. Rent seeking relies on three main components: state subsidies, licensing and regulation; special perks and privileges for ministers and army and civil service employees and land distribution system that allows the poor man’s land to be acquired for the elite especially the army and civil service”.

An equitable tax system requires payments linked with benefits received from government services — the Scandinavian social democracy model is a good example to quote. In social democracies, the cost of government services are apportioned amongst individuals according to the relative benefits they enjoy. In economic terms, this is called “benefit principle” that presupposes determination of the incidence of public expenditure before deciding distribution of tax burden.

Tax policy should be aimed at achieving the cherished goal of distributive justice. The government should launch programmes financed mainly through taxes, to solve the twin problems of unemployment and poverty. These welfare-oriented schemes may also include free medical and educational facilities, low-cost housing, and drinking water facilities in rural areas, land improvement schemes, and employment guarantee programmes. Once people see the tangible benefits of the taxes paid, there will be better response to tax compliance.

Taxes cannot be collected through harsh measures and irrational policies as has been done recently by Ishaq Dar. The government, by its actions, must demonstrate to the citizens that money collected from them is spent for collective welfare. Presently, the ruling oligarchy is enjoying innumerable tax-free benefits from money collected from the masses, which get nothing in return. This is worst one can think of in any system of government.

It is an irrefutable fact that despite resorting to all kinds of negative tactics, blocking of bona fide refunds, the Federal Board of Revenue (FBR) has failed to improve tax-to-GDP ratio. It declined to 8.2 per cent during the financial year 2012-13 from 9.2 per cent in the immediate preceding year. With failure to collect target of Rs2381 billion, the fiscal deficit jumped to nearly Rs1700 billion proving that irrational tax impositions cannot avert fiscal disaster.

In 2004, the FBR promised 0.2 per cent per annum growth in the tax-to-GDP ratio for the next five years while submitting ‘tax projections’ and ‘revenue-to-GDP ratio’ to the International Monetary Fund (IMF) on the conclusion of 9th review under the Poverty Reduction Growth Facility (PRGF). The FBR informed the IMF that it would increase tax-to-GDP ratio from 9.2 per cent to 10.3 per cent in 2008-09 — in reality there was a decline of 0.4 per cent! Even the funding by World Bank for reforms (sic) of the FBR could not bring desired results as there is perpetual decline in tax-to-GDP ratio.

Economy as a whole in a shambles — growth in real terms is negative, debt burden is increasing monstrously, fiscal deficit has reached 68 per cent of GDP, inflation is again in double digit, taxes are evaded by the rich massively and whatsoever is collected is mercilessly wasted by the state oligarchy — who really matter in this Land of Pure.

Riasti Ashrafiya is thriving on the taxpayers’ money — they are the main beneficiaries of all the state’s resources. The list of tax free perquisites available to them is baffling and shocking — Perils of tax breaks, The News, February 17, 2013. The government’s kitty is empty because of wasteful spending on the perquisites of a handful few, on useless state enterprises and financing the monstrous government machinery that is both inefficient and corrupt.

The colossal wastage of taxpayers’ money on unproductive expenses gets further compounded when there is no will to take advantage of vital natural and human resources on the part of Riasti Ashrafiya. What makes things worse is the fact that many powerful political figures, in government and opposition, and strong men in khaki and mufti have stacked billions of dollars abroad when their fellow countrymen are dying of hunger — Our money, their banks, The News, July 7, 2013. These classes pay miserly tax in Pakistan but enjoy unprecedented tax-free benefits financed by the common people!

The ruling elites, representing militro-judicial-civil complex, industrialists-turned-politicians, absentee landlords and unscrupulous traders, are owners of huge movable and immovable assets created out of untaxed money. The issue of Pakistan is how to make tax incidence equitable and just. It is not possible unless all the generals, judges of higher judiciary, high-ranking civil officials get ‘consolidated pay packages’ and pay tax on that just as other employees do. These packages should be market-oriented but not tax-free.

The government, if sincere in collecting taxes from all, should immediately withdraw all exemptions and tax whitening schemes [section 111(4) of the Income Tax Ordinance, 2001], enforce agricultural income tax on absentee landlords earning net income of more than Rs400,000, reintroduce wealth tax on the super-rich and immediately legislate for asset-seizure law to counter money laundering, tax evasion and rent-seeking.

It is admitted by the FBR that even after “great efforts” (sic) less than 1.5 million filed income tax declarations for tax year 2012. In Pakistan, the total number of mobile users alone is 125 million, out of which 5 million are rich and pay more than Rs40,000 as annual bill — they are potential taxpayers. Why have they not been compelled by the FBR to file returns? It testifies to the FBR’s inefficiency and ineffectiveness.

These days, the FBR is taking undeserved credit for a new initiative (sic) by establishing the post of Commissioner (Headquarters) Broadening of Tax Base given the task of adding a few thousands new taxpayers this year. This Commissioner sitting right in the FBR is completely oblivious of ground reality that how easily we can raise the number of tax filers to 4 million, if not more — presently 50 million plus are paying adjustable income tax for usage of mobile service and selecting from them who earn taxable income, but not filing tax declarations, is not a difficult task. But the FBR wants many new posts to do it! It can be done with a simple software application — Member IT of FBR can ask service providers to identify who are paying Rs40,000 or more per annum.

[The writers, tax lawyers, are Adjunct Professors at the Lahore University of Management Sciences (LUMS).]

[This article first appeared in The News on Sunday, August 18, 2013.]

Note: Reproducing this article in my Blog does not amount to my agreeing with the authors' point of view.