Bravo: What a Beautiful Budget!

One must applaud our government's inherent ability to pull off the absolutely fantastical; Miraculously that uneducated lot (or the IMF) have constructed a budget worthy of our great nation. What a feat! Victory to Democracy! Revenge Rocks and all that!

Here are some of the salient features that I’m particularly impressed by:

Weed-Cigarette price equivalence policies: One may infer that the massive increase in tobacco taxation is completely in line with the Governments long standing desire to bring Drugs and Cigarettes to an equal price parity. However, I’d like to suggest that next time (assuming this government is around for a next time, future is rather uncertain), just legalize and tax Weed and say the IMF made you do it....or the Zionists. Trust me, you’ll make a lot more than the Rs. 30bn increase you have slated now. (Note: The Pakistani Youth may get around the tax increase by smoking their tobacco without filter rods: We do not wish to theorize how they gained their joint rolling skills). The 5% cut in imported drugs (pharmaceuticals) is truly broad minded as well. Bravo you Liberal Lot!

Go VAT!: Nope...um soon...like October 1st...ish. We'll see…(That’ll teach the IMF from telling us what to do), notably the last Prime Minister that implemented a comprehensive sales tax was ahem…relieved of Office by the “Military Protectorate”.

Capital Gains Tax: Terrific, let's drive out our local small investors and the foreign investors that were attracted to our market in the first place because of our relative cheapness. Say good bye to the Brokerage business. So, where are you going to make up their Tax Revenue shortfall....and all this for an expected Rs. 5bn in Tax revenue? Short sighted much?

Minimum Wage Increase: Brilliant move by the Government, bravo. I expect all government workers are excited by these proposed increases. Now if the government were able to do something like 'enforcement' this may have some impact on the wider economy. Oh, and by the way, when you increase the minimum wage....you tend to increase unemployment. Aren't we lucky that the government doesn't collect Unemployment data? It could be potentially embarrassing you know. 

Income Tax Exemption Increases: Sweet. Now how about growing the economy and ensuring that people actually have an income in the first place. That would be incredibly sweet of you.  

Turnover Tax on Loss Making Companies increase from 0.5% to 1%: Yeah, let's bankrupt our Fuel providers....it's not like they are important. And hey, I'm fairly ambivalent towards my cell phone usage too....

Withholding tax of 5% on Air Travel: Why are we putting a Tax on domestic travel versus International? Is there a vendetta against moving around in Pakistan? Is the government trying to encourage people to use Pakistan Railways....

9.5% Inflation Target: With the 1% increase in GST, new taxes, further tariff increases due to cuts in subsidies and downward sticky nature of prices.....wishful thinking much? Fingers crossed we can….adjust the numbers.

442bn for Defense: The wonderful 17% increase in our defense budget is an inspired idea. We’ll bomb our country to shreds and have the international aid agencies ‘rebuild’ it because ‘they made us do it’. At the very least they’ll ask us less about how we’re spending out PSDP funds….

Taxing Cold Air: 10% FED increase on Air Conditioners and Deep Freezers. An inspired choice I must say; so much more original than regulating the load of hot air emanating from our parliament. 

Circular Debt Crisis Resolved!: Err...how about not. still evaluating options.... Details to follow…eventually. Basically the current idea being thrown around are placing the financing burden on the big 5 Banks....because they've been sooo open to lending recently. Private Sector lending can be expected to crash even further. Good luck in meeting your growth target without ensuring sufficient credit to the Private Sector. 

All in all, this is truly a remarkable budget, encapsulating all of our hopes and dreams and providing genuine relief to the common man by…by….well, that’s in next years budget….or the one after that. 

10 Things I Hate About Democracy

There are some things I love about democracy, the ideal that everyone is born equal, that everyone ought to have a say in the running of their nation. However, when I left my text book idealism and looked at the Pakistan around me, I felt compelled to write this post

1. Stupidity Measurement Index: We get to really ascertain how stupid the general populace really is. Whether it's re-electing perpetually corrupt or the unbelievably incompetent, our general populace prefers electing the same old corrupt faces. It’s not even that these are folks with any modicum of class…just look at the way they treat each other.

2. The government is expected to always step in because they are ‘democratically’ elected and ‘serve the people’; to be fair they do service the people….their own people as it turns out……which turns out to be a very limited number.  It sickens me to see imported land cruisers and VIP service all paid for by tax payer money, I’m almost glad I don’t have access to view their Swiss Bank Accounts. 

3. Democracy Complex: We justify bad governance by saying 'at least it's a democratically elected government'. Our Democratic idealist love to admonish from their pulpits about some mythical time hundred of years into the future where a few bad teething years of democracy served the greater good. For starters that is insane. If we keep repeating the same cycles of democratically elected ahem re-appropriators of budget resources, things will never change. And secondly, it is hardly any relief to the common man who can’t afford two square meals a day that he has a democratic government. As our honorable Finance Minister stated ‘Starving amongst plenty’ indeed.

4. We elect idiots and feel justified in ranting about how incompetent they are. If you lect a fool with a track record for being a corrupt fool, you don't have the right to be pissed when he acts like a corrupt fool. Particularly when the venerable representative is forced to resign on account of holding a fake degree and then gets re-elected to Parliament on the back of the sitting Prime Minister’s conditional offer of a mega project if the electorate sees fit to re-instate the said official back into office. And you know what…he was re-lected…by a handy margin.

5. Corruption Personified: Our democratically elected MNA's have a god complex and feel perfectly justified in even the most common place thievery. I’m not saying military rule is much better in this regard, but my perception is that the army has a sense of honor that arises from a largely meritocratic organization. The meritocracy of our democratic system stems from accidents of birth. Even the competent are removed on grounds of ….ahem…transitional favoritism.

6. Hypocrisy: Only in Pakistani democracy would an elected official admonish others about energy savings but then be stealing electricity him self. The also feel justified in loading up PSE’s with political appointees and friends in order to ‘reduce’ unemployment, and then blame the PSE for being a burden on the economy. politicians blame each other for the lack of getting anything done due to the desire to build consensus. More like splitting the pie amongst themselves to see who can get the biggest piece. There are no checks and balances: The Checks and balances our democratically elected politicians are familiar with refer to the checks politicians expect written out to augment their bank balances.

7. Democracy is the mob, and in Pakistan the mob is surprisingly easy to manipulate. Oppression of the majority on the minority. Democracy is divisive. Democracy is all about controlling the Mob. That’s it. It is Politicians gaming what they think 51% believe over the remaining 49%, and even in that context they consider which segments actually vote. Religion and Morality are well received segments. Democracy, where even the stupid have as much voting power as the brilliant.

8. Religious Infusion: Islam was built on the basis of democracy....bullshit.... nothing about Islamic governance is predicated on democratic inclination. Prophet (PBUH) wasn't elected by the general populace neither were the Caliphs or the Imams. You get the ability to elect barely literate 'leaders' to run the largest organization in Pakistan. It ought to be left to professionals, not the politicians (Hire the Singapore Government; before anyone suggests, no I have no desire to move there, just pointing out what works). The closest thing to an Islamic Democracy is Islam, where the elected members have wonderful 'advisory' roles with lots of checks and balances by religious institutions.

9. Democracy is a punishment for not having popular enough western leaning leaders. The motto seems like 'Be nice to America or we'll bring democracy to you'. Saudi Arabia, friendly pro-Americans. Kim Jong Il elected leader of North Korea, Axis of evil. So, you better have the right democracy appears to be the order of the day.

10. But what I hate about democracy the most is that best, most stable, economically prosperous years I’ve known have been when we had a military dictatorship (GDP output grew from USD 40bn to USD 160bn), when our economy was deemed to potentially be the next China or at the very least India. Under democracy, now we look like the Nigeria’s oil less, religious, drug addled cousin.

Democracy has disappointed me. It’s not the silver bullet, and for a country like our that is so blessed with natural resources our lack of progress is an embarrassment to God’s good graces. According to news reports, the country has the second largest salt mine in the world, fifth largest gold mine, seventh largest copper mine, fifth largest coal reserves, seventh largest wheat and rice production capacity, is eighth in the rankings of fresh water availability and to add to our embarrassment of riches we possess 185 billion tonnes of Thar coal. And even with all those blessed resources we have a fiscal, energy and international trade deficit.

The primary root of my angst is the lack of education. An uneducated stupid electorate will elect similar leaders. However, the government has no incentive to invest in education, and hence budget after budget, election after election all we are feted to is the customary lip service to education. What’s the point of a democracy if your people starve?

Maybe, I'm just out of line (not exactly outlandish) Is Democracy a dish best served cold? Or in our case….space frozen.