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Editorial And Opinion 19 February 2021
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FATF looming

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Editorial

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February 19, 2021

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Yet again, Pakistan will be facing a three-day virtual meeting of the Financial Action Task
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Force (FATF) from February 22. The meeting is likely to decide whether Pakistan continues
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to remain on the grey list. Though Pakistan has prepared and submitted a report of its
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progress on regulations to curb money-laundering and terrorism financing, it is up to the

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global financial watchdog to make a final decision in this regard. Pakistan’s finance ministry
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has been asserting its position that the country has implemented 21 out of 27 regulations, but
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the rest of the points have remained a contentious issue and the FATF has repeatedly
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extended Pakistan’s stay on the grey list. Being on the grey list means there is a sword of
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Damocles that may throw Pakistan to the much dreaded black list. A removal from the grey
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list would mean that Pakistan has cleared the threat and at least for the time being can heave a
sigh of relief.

The FATF expects Pakistan to implement 100 percent of the remaining points. Pakistan has
been successful in making amendments to its FATF laws and has also seized the assets of
banned organizations; the country now needs to make its case convincing and plausible at the
FATF forum, failing which there may be dire consequences in store for us. Though Pakistan
has made progress on some other points in addition to the 27 in the FATF action plan, we
need to realize that essentially it is the action plan against which our performance, or a lack
thereof, will be judged by the FATF. The inter-governmental composition of the FATF is

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also a challenge and the forum has made it clear that it is looking at the action plan with the
utmost seriousness. That is one reason why a potential downgrade to the black list will have
serious implications for Pakistan, as our banking system will be regarded as one with poor
controls over anti-money laundering and countering financing of terrorism.

A majority of global financial institutions take the guidelines from the FATF seriously, and a
move into the black list would significantly hamper remittances to the country from overseas
Pakistanis. Such a scenario means even harsher and minute scrutiny on transactions. With a
lackluster performance on the economic front by the current government, we cannot throw
our traders who deal in exports and imports to starker straits. The making and receiving of

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payments would become crippling for them in the international banking sector if that were to

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happen. Similarly, Pakistani banks would also likely suffer. For all this and more, the

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government of Pakistan needs to make sure that capital inflows and investment to Pakistan do

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not suffer any further, as we are already under pressure from the IMF.

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Vaccines for the rich

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Editorial
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February 19, 2021

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According to the chief of the UN, so far 186.5 million doses of the vaccine against Covid-19
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have been delivered in 102 countries. But 75 percent of these vaccines have been given out
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and in only 10 nations, while there are 130 countries which have had no vaccines at all. This
simply shows the inequity of the global vaccine programme and the vast difference between
delivery to rich and poor countries. The UN chief has pointed out that richer countries have
bought up a huge percentage of the vaccines available, leaving few for the poor. He has
stressed the need to make things more even and ensure the vaccine is available globally. The
UN suggests that richer countries of the world, such as those making up the G-20 bloc, come
forward and assist in an effort to ensure that all persons around the world, whether they live
in a wealthy country or a poor one, are able to receive the vaccine. The return of the US to
WHO should also help the organisation speed up its efforts to deliver vaccines with the US,

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the previous largest donor to the WHO, bringing in $200 million for the organisation.
Trump's withdrawal from the WHO had cut off a large supply of funding for the global health
group.

Apart from the power of money and the ability of the rich to acquire more, a problem that
exists both at the global level and within countries themselves, there has to be an effort to
ensure that the poor can also receive the vaccine without major hassle. Political problems add
to the complications in vaccine delivery. There are allegations that China blocked a deal
between Taiwan and Pfizer to ensure the country could not receive the vaccine. Politics and
economic situations should not be permitted to deny people the vaccine. Richer countries

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have to assume a role of responsibility and understand that they themselves will be saved

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only if the rest of the world is safe as well. This means a vaccine for most people over 18

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presently on Earth, no matter what their status and no matter where they live. The UN is

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making its efforts for this. Other countries and other groups of nations need to join in.

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OPINION
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Holding up half the sky

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Opinion
Dr Ayesha Razzaque
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February 19, 2021

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The writer is an independent education researcher and consultant. She has a PhD in
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Education from Michigan State University.

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In the global fight against illiteracy, there is some good news. Enrollment rates are rising
worldwide. Here, in Pakistan, enrollment rates in primary schools have broken through 95
percent. But there is a caveat – learning levels have stagnated.

The Centre for Economic Research in Pakistan (CERP) conducted the Learning and
Educational Achievements in Pakistan Schools (LEAPS) study in 2008 and surveyed student
achievement levels in Math, English and Urdu of third graders. The results were both
disappointing and eye-opening. In Math, only 47 percent students could answer simple
counting questions, only 32 percent could subtract 3-digit numbers and only 19 percent could
divide a 3-digit by a 1-digit number.

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In English, only 11 percent could form a coherent and grammatically correct sentence using
the word ‘school’ and only 20 percent could spell the word ‘girl.’

In Urdu, only 31 percent could form a coherent and grammatically correct sentence using the
word ‘school’; 30 percent could answer basic questions after reading a short paragraph; and
only 12 percent were able to pluralize a given word.

If you think 2008 was too far back in the past, consider the ASER study conducted in 2016
which surveyed learning achievement in the same three subjects. Less than 30 percent of
students could do 2-digit subtraction, less than 15 percent could read a sentence in English
and less than 42 percent could read a sentence in either Urdu, Pashto or Sindhi. What this

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means is that a student that drops out of Grade 3 is functionally illiterate.

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Between 2000 and 2015, 69 policy reforms were passed nationally and in Punjab – covering

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everything from teachers, basic inputs, school finance, school autonomy & accountability,

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student assessments, private sector engagement, early childhood development and school

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health and school meals.
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Despite that, data shows that from 2004, to 2006, to 2011, the performance of public school
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students in Math, English and Urdu assessments has not budged. The same analysis on
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private schools between 2004 and 2014 shows very small improvements.
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Nevertheless, LEAPS data shows that private school children perform better than their public
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school peers. The median percentage of correct answers given by public school children in
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Math, English and Urdu range between 25 and 35 percent. For private school children the
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range of median scores for the same subjects is between 40 and 50 percent. Another study
showed that the gap in learning outcomes between private and public schools is between 8
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and 18 times larger than the gap between students from rich and poor socioeconomic
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backgrounds. As a qualifier, let me add that this does not mean that every private school
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outperforms every public school. We are looking at aggregate statistics here. The bottom line
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is that, on average, private schools are outperforming public schools by significant margins.
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If you go by the noises coming out of the ministry and departments of education lately, you
might think that greedy private schools are the culprits and stand to blame for many of
society’s ills. The concerns of private schools – all private schools – are swept aside as the
interests of a small elite. How much truth is in these statements?

Let us consider some big numbers from a 2016 LEAPS survey. Of all the 47.5 million school
going children, 42 percent (nearly half!) attend private schools. Of the 303,446 schools in the
country, 37 percent (more than a third) are private. Of the poorest households in Punjab, one
in five pays for (low-cost) private school education where the option exists.

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A survey of rural areas in the Faisalabad-Gujranwala-Sialkot region shows that 40 percent

schools charge a monthly tuition fee of less than Rs400, 34 percent charge between Rs400
and Rs600, only 15 percent between Rs600 and Rs800 and only 11 percent more than Rs800.
So much for the private school-going elite. If we draw the line for low-cost at a tuition fee of
Rs800 per month, that means 89 percent of private schools, in that area at least, are low-cost.

The myth that private school goers are ‘the elite’ must be put to rest. If it was not for private
schools, almost half the school children in this country would not have a school to go to.
Private schools are providing a vital service that the state has failed to provide for the last 75
years, and generally of better quality too. To borrow part of Mao Zedong’s phrase, private

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schools hold up half the sky in Pakistan.

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Left to the federal and provincial governments, the rate at which new public schools are being

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set up – and given our population growth rate of around two percent – it would take many

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decades for public schools to bridge the supply-demand gap, if at all. The good news is that

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the private sector is willing and able to assist in meeting that demand. According to the 2016

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LEAPS, Punjab alone saw the establishment of 66,000 new private schools, which is 66,000
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schools that the government of Punjab now need not establish.
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In recent months, government officials have been happily pointing at figures that show an
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increase in enrollment in public schools. It is worth investigating the reason behind these
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rising enrollment numbers, because a more than likely cause is private schools going out of
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business during the pandemic. There is already some anecdotal evidence of that happening.
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Some schools that received threats during the darkest days of Pakistan’s fight against the TTP
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but made it through those days have succumbed to Covid school closings. According to a
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news report that appeared in this paper on January 17, some 300 low-fee private schools had
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to shut their doors due to pandemic-induced financial constraints in Karachi alone.

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It is less disruptive and less expensive in the long run to keep existing schools afloat
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financially than to let them close, and raise new ones again later. Private schools have been
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asking for state support in the form of low-interest or interest-free loans – but none came.
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Such support would have trickled down to schoolteachers and staff salaries and served the
dual purpose of providing economic stimulus.

In addition to leaving private schools to their own devices, there are parts also where federal
and provincial governments are overregulating. For example, in Punjab the rollout of the
Single National Curriculum (SNC) is disruptive and is forcing all schools, public and private,
to use SNC model textbooks for the coming school year.

The landscape I presented above is stitched together from a handful of credible sources,
including CERP’s LEAPS study. The reason I must rely on independent studies for such
basic figures is that the government lacks basic data about private schools operating

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nationwide, similar to the lack of madressah registration data. Sindh recently began a census
to document the education landscape in the province. However, when it comes to a lot of
essential data, the rest of the country is flying blind. It ought to document and map the
private-school sector before coming down on it with constrictive regulations.

Contrary to how some government departments and politicians have been characterizing
private schools as the root cause of social class differences – even treating them with disdain
in some cases – they ought to show them some gratitude. For decades, private schools have
been picking up the slack public schools could not, and been doing a better job at it too. That
makes private schools partners in the government's efforts to provide schooling for all, not

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rivals.

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I would like to conclude my argument by recounting a conversation I had with the

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headteacher of a public primary school. The headteacher was complaining to me about a

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newly opened NGO-run community school in their vicinity. It had the effect of siphoning off

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their students to the point where they were left with an overall enrollment of only 42 students.

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Their solution was that the NGO’s community school move out to some remote, underserved
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location away from them. Private schools do not exist to fill in for state schools – the opposite
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should be the case. Private schools, nonprofit and for-profit, will operate where it is feasible
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and/or profitable for them.

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Instead of wishing away or handicapping private school competition by over-regulation (for

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example, by forcing its own textbooks on them), the state ought to be thankful to the private
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sector for easing its burden. It would do well to get its own schools in order and become
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competitive.
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Extractive tourism
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Opinion
Vijay Kolinjivadi

February 19, 2021

The tourism industry, and the governments that welcome foreign revenue, thrive on the
argument that local livelihoods depend on tourism and insinuate that millions of people will

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be reduced to abject poverty without it. But a closer examination of how large-scale tourism
clusters function reveals who the true winners and losers of mass tourism are.

Like a gold rush to the latest discovery of untapped ores, a panoply of hotel chains, foreign
tour operators, online booking agencies, airlines, real estate speculators and multinational
construction companies quickly rush to capitalise on any curiosity that a visitor might have
towards any site of historical or natural value.

Examples of attraction sites becoming mining pits for an extractive tourism industry abound.
The historical centres of cities like Amsterdam, Marrakech, Barcelona, Krakow, Yogyakarta,
Cusco and Kyoto have turned into giant open-air museums, overwhelmed by crowds of

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tourists flocking to kitsch souvenir shops, cheap hotels and fast-food restaurants. Many long-

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time residents of these cities have been forced out of their homes and urban communities due

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to rising property values and tourism-induced gentrification. Those who remain suffer from

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the enormous strain that the crowds of tourists put on the local infrastructure.

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Elsewhere, rare and beautiful landscapes of natural or cultural heritage like the beaches of
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Thailand, wildlife hotspots like the Maasai Mara in Kenya, or the historical site of Machu
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Picchu in Peru are depopulated, fenced off through preservation laws, and repopulated with a
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globalised architecture of tour agencies, airline companies, and agribusiness-controlled

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supply chains and their local subsidiaries required to funnel people to the valued sites as
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quickly and as comfortably as possible.

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Government officials acquiesce to mega-tourism projects due to large kickbacks and pass
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regulations to facilitate them under the promises of economic growth. These actions all too
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often supersede the sovereignty of communities in terms of their traditions and historical
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relations to sites of historical or natural significance. As a result, local people often lose
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control of their land and community development and see little benefit from employment in
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exploitative low-paying jobs with long hours and minimal or no provision of social benefits.
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Instead, most of the wealth extracted from the tourist “mine site” flows into multinational
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conglomerates which own travel agencies, hotels, airlines, cruise ships and even local
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commercial retail shops and whose tentacles extend to major tourist hotspots across the
world.

The more wealth and power large multinationals amass, the less accountability they face not
only for labour exploitation, but also for the massive environmental damage they cause in the
form of a high carbon footprint, water contamination and overuse, deforestation and coastal
destruction. Tourism accounts for eight percent of global greenhouse gas emissions or around
4.5 gigatonnes of carbon dioxide.

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The pandemic has already triggered wide-ranging public conversation about Green New
Deals, divestment from fossil fuels and just green transitions. It offers a rare and profound
opportunity for rethinking whole sectors of the economy.

Excerpted: ‘It is time to end extractive tourism’

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Resource planning for SMEs

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Opinion
Dr Imran Batada

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February 19, 2021

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Enterprise Resource Planning (ERP) systems are integrated systems for managing all phases
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of production and service-based businesses. These systems align human resources

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management, supply chain management, financial management, manufacturing, and

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distribution with fundamental and core accounting functions. These are real-time systems that
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make use of software technology to integrate the management of business processes.

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An ERP system helps synergize the resources of the organization – it essentially creates a
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synergy of materials, money, machine, and human resources. To put this in context, an ERP
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system works to integrate the processes and data of an organization into a unified system
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accessible in real-time. A typical ERP system would achieve this integration by utilizing a
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combination of computer hardware and software components. A common feature in most

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ERP systems is a unified database where data is stored for and accessed by the various
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modules of the ERP system.

There has been a realization across the global business environment that, despite the dynamic
nature of the business ecosystem, it is possible to develop and maintain a customized
business solution that can cater to the day-to-day business requirement and can still be
updated. This is a good fit for SMEs as the automated business processes, and data
management can ensure that the SMEs don’t overstaff. Generally, ERP systems can help
SMEs in a number of ways.

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A big problem for most SMEs is finding the balance between overstaffing and understaffing.
By implementing an integrated system like the ERP systems, the business manages human
resources to perform optimally without necessarily overworking staff or have redundant staff.
In line with optimizing tasks by creating trackable milestones that help individuals perform
efficiently, the ERP systems are vital in helping SMEs optimize their processes. From lead
generation, lead management, and conversion to customer relationship management, SMEs
can track processes and information and ensure that there is a resource person to manage the
relationship as well as the customer.

One of the challenging tasks for most SMEs is data storage, administration and management.

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By its simple usage, an ERP system helps create a database that can be managed for further

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optimization solutions and business intelligence. One of the first processes executed when

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setting up an ERP system is setting up the firm’s general ledger. Every task, process or

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person on the system has dealt with money and is automatically tied to the GL.

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As of 2018, the global ERP software market was valued at $35.81 billion. The market had a

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projected growth of $78.40 billion by 2026, which translates to a compounded annual growth
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rate (CAGR) of 10.2 percent. As of 2019, the top ten ERP software manufacturers accounted
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for about 32.1 percent of the global ERP applications market. The ERP applications market
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has two major arms – ERP Financial Management and the ERP Services and Operations
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applications.
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Setting up ERP systems for SMEs can take three forms. The first option is to buy a
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readymade ERP system from global ERP suppliers like SAP, Oracle, and Microsoft. The
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second is to get an ERP system vendor to custom build the ERP system to the business
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requirements of the SME. The third option is to use open-source ERP providers that allow
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users to change the software source code and make modifications that tune the software to the
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user’s requirements.
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Depending on the mode of operation of the SME, the ERP solution deployed can be any –
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Discrete, Process, Engineering-to-order, Mixed-mode manufacturing, Distribution,

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Professional Services Automation Software, and Multi-Industry ERPs. Discrete ERP systems
are for manufacturing SMEs, as they combine parts and components to develop finished
products. SMEs must define the types of components and the quantities required for
manufacturing the finished products. This is called the Bill of Materials (BOM). The process
ERP systems combine ingredients and raw materials and create different batches of similar
product units. Process manufacturers use formulae and recipes and a definition to mix these
to achieve the finished products.

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ERP systems are important to SMEs. From discussions, it is apparent that an ERP system is a
premium product as you will get maximal utility for the cost, irrespective of how much the
product cost.

An ERP solution helps create the environment for compiling and storing data, making it easy
to generate robust reports that can show you areas of efficiency and opportunities for
improvement. When implemented effectively, ERP systems always reduce administrative
costs. With fewer manual processes weighing down employees, they can focus on profitable
and innovative projects.

An ERP system needs to take the data once, and periodic processing is automated. This

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eradicates problems like missed orders, communication breakdown, and inventory mishaps.

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In the end, the business can guarantee reliability to customers and employees are more

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productive, which translates to growth for the business. With an ERP system in place, the

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staff can handle order management with increased production volume. Automation can take

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the workflow burden off your employee, freeing up more hands for your other processes.

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Despite the benefits of ERP systems, there also are problems associated with the deployment
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of ERP systems in SMEs. First, ERP systems are expensive. The sources for developing ERP
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systems are imported with a devalued currency. The second challenge is resources. Local
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developers must comply with the requirements of global practices which require a specific
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level of qualification. Third, personalization became a complicated process to explain to

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companies and technical consultants, which makes deploying ERP solutions difficult. Last
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but not the least, small business behaviour is also a challenge which normally is not
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considered favourable with the ERP implementation.

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In Pakistan, there are locally produced ERP systems and imported pre-packaged ERP
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systems. However, SMEs must determine needs and expenditures before choosing the ERP
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system to deploy. According to analysts, deploying an ERP system takes about four to eight
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months but can extend to a year, depending on the market analyst, staff, engineers, and
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support personnel. It is easier to tailor the customers’ requirements to local ERPs, and
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implementation time is shorter. However, a high degree of customization creates problems

for context-specific procedures and some requirements.

To sum it all up, deployment of ERP systems has become the need of the hour for SMEs. The
sooner the SMEs of Pakistan realize this, the better it is for them. Further to this, the
operational efficiency of the SMEs powered by ERP systems will eventually impact the
overall economy of the country in a positive way.

The writer is director of the Centre for Information and Communication Technology at IBA.

Email: imran.batada@gmail.com Twitter: @imranbatada

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The nouveau-riche factor

Opinion
Raoof Hasan

February 19, 2021

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“They were new money, without a doubt, so new it shrieked. Their clothes looked as if they

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had covered themselves in glue, then rolled around in hundred-dollar bills.” – Margaret

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Atwood at
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Times of transition enhance the prospect of discordant voices that create a stir to stymie the
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progress towards what could potentially change the fate of a country. It becomes even more
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worrisome when these voices wear a deceptive apparel to hide their spots.
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There is general consensus that Pakistan has suffered at the hands of bad governance through
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the decades, but not a shred of thought is given to either evaluating the damage done or
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seeking a way of rectifying it. Instead, the environment is vitiated with views dictated by
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respective political considerations and conveniences which hardly suit the requirements of
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the existing situation. There is also agreement that Pakistan needs serious reforms across
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multiple sectors, including altering the electoral systems and processes. But when it comes to
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implementing them, some parties are quick to start talking politics.

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Take the case of the Senate polls and the government’s drive to induct a level of transparency
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in conducting them. Every party has made statements in the past that bags of silver exchange
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hands for the sale of votes. Such gruesome transactions have been caught on camera and are
now part of the archives of national shame. The PML-N and the PPP have even inked the
need for open balloting as part of the Charter of Democracy.

Yet, instead of concentrating on the substantive part, the political parties seem caught up in
technicalities driven by their respective expediencies. Thus, a step which could initiate a
process for cultivating transparency is rendered controversial and the government,
determined to eliminate the scourge, is forced to take steps including referring the matter to
the Supreme Court for advice and introducing a presidential ordinance for open ballot linked

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to a positive input from the apex court. A hue and cry is raised that the government is
resorting to ‘non-democratic’ means to force its way through.

Such attitudes reflect the inherent flaws in the way we think of politics and how we use it to
serve our vested interests. No importance is attached to turning this change into a means for
serving the needs of democracy and improving the laws and service delivery systems. This
malady emanates from the gulf that separates our pompous claims from our below-par
actions.

The very same political parties that are opposing the government’s attempt today to hold the
Senate elections through open balloting had protested the dismantling of the Balochistan

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government, the PPP winning two Senate seats in Khyber Pakhtunkhwa with only three

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members in the assembly, and the defeat of the vote of no-confidence against the Senate

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chairman. This is also why some political parties are opposed to tabling a vote of no-

41
confidence against the sitting government.

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If all that be so, why do the parties remain unwilling to extend their support to changing a law
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that is a source of massive electoral malpractices? Is this outrage only a ploy to destabilise the
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government which remains unwilling to extend them the reprieve they have been desperately
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seeking? Or is it that these parties want to keep the status-quo intact with an intention to
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exploit it to their advantage when they get an opportunity? This practice, incidentally, has
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been rampant through their tenures in power when despotic methods were used ruthlessly to
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smother the opposition. Whatever be the drivers, the net result is that the system as it exists
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today will continue to breed corruption, thus helping people gain power by using the lure of
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money.
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I call this the nouveau-riche factor in our politics. Just like the newly rich without a moral
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code destroy the fabric of society, this breed of politicians, by remaining bereft of the
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essential requisites, turn politics into a trade of profit by resorting to buying and selling votes
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for personalised agendas. In the process, they cultivate a whole new generation of people who
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espouse everything that is rotten. The temptation lingers for others also to join the bands of
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unprincipled and dishonourable people.

A successive variety of such leaders has been hoisted to rule the country. Consequently, they
have reduced it to a virtual skeleton which finds it difficult to even hide its shame. It is
scoffed at as the begging bowl of the world. This cannot last. Either the people who have
been in seats of power and those dreaming to be there have to change the way they think of
things, or some drastic measures will have to be undertaken to alter the system so that the
entry of corrupt people is effectively blocked. It is imperative to implement this if we are
interested in keeping the country breathing. This is the only choice the vile political gamblers
have left us.

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For the opposition, this is no occasion to exploit as a supplement to their politics of agitation.
It is time to converge to eliminate the spectre of corruption from our midst.

The writer is the special assistant to the PM on information, a political and security strategist,
and the founder of the Regional Peace Institute.

Twitter: @RaoofHasan

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Back to serve

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Opinion

02
Dr Ramesh Kumar Vankwani

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February 19, 2021

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The US has finally decided to rejoin the UN Human Rights Council, one of the most
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important and significant international forums under the United Nations. According to US
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Secretary of State Antony Blinken, the recent move is part of the new US administration’s
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recommitment “to a foreign policy centered on democracy, human rights, and equality.”
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Three years ago, Donald Trump, during his tenure as president of the US, was pulled out of
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the Human Rights Council. Therefore, the recent decision is seen as having reversed yet
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another key policy of the previous administration. “We know that the Council has the
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potential to be an important forum for those fighting tyranny and injustice around the world,”
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a US State Department official expressed.

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The current status of the US is as an observer with no voting rights. However, the Biden
Administration is interested to play a pivotal role in the decision-making process by securing
a full member seat in the upcoming elections this year. The withdrawal of the world's only
superpower from the global institution had resulted in damaging America's reputation in the
eyes of the international community. It was also very disappointing for many countries which
believe that the US is supposed to protect human rights, especially in third-world countries.
On the other hand, some countries, in order to achieve their goals, also tried to take advantage
of the absence of the US from the Human Rights Council.

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Today, human rights organizations around the world are welcoming the return of the United
States. In my view, the US, being a champion of human rights and democracy, is once again
in a better position to support oppressed communities. Its active presence will also ensure an
abatement of human rights violations, and some sense of justice.

It is on record that every Democratic elected president used to play a pivotal role in
protecting human rights globally. During Obama’s tenure, Joe Biden has been seen to have
been actively contributing in protecting human rights. Now, after taking charge as president
of the United States, he has considered it important to contact leaders of various countries,
including India, involved in human rights abuses.

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Former US president Trump used to ignore India's controversial state policies towards

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minorities and the people of Occupied Kashmir. However, Biden has expressed

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disappointment on India's move to impose a lockdown in the occupied valley as well as over

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its controversial citizenship act.

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Similarly, Indian-origin US Vice President Kamala Harris is also a renowned human rights
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activist who raised a voice for the oppressed people of Indian-held Kashmir. In this regard,
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the British media has already hinted in a report that the new US administration can pressurize
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Modi’s government over certain issues including human rights. According to BBC, a number
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of other Democratic party leaders also have reservations over the undemocratic conduct of
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the Modi regime.

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The current Indian government is also directly responsible for the mysterious deaths of 11
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Pakistani Hindu migrants, who went there in hope of a bright future. In this regard, the
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patriotic Hindu community, on the call of the Pakistan Hindu Council, is continuously
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recording peaceful protests to seek the attention of the international community.

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Unfortunately, the Indian government is not accepting our just demand to hand over the ashes
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of their dead bodies for performing last rituals. Previous days, during the meeting of the
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National Assembly Committee on Foreign Affairs, I vowed that the blood of innocent
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Pakistani Hindu nationals should not go in vain. Pakistan should raise this issue at every
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international forum available, including the Human Rights Council.

Biden's commitment to empower the UN Human Rights Council is indeed a very positive
sign which reflects that the protection of human rights is a top priority of the current US
leadership. However, there is also a dire need for the government of Pakistan to present our
case before the US and the international community in an effective and efficient manner.

The writer is a member of the National Assembly and patron-in-chief of the Pakistan Hindu
Council.

Twitter: @RVankwani

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search

Fata: the NFC correction

Opinion

February 19, 2021

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Part - II

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By Musharraf Rasool Cyan
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With the merger of Khyber Pakhtunkhwa and Fata, KP has assumed a very large fiscal
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burden of a very important function – the mainstreaming and development of former Fata.
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But, constitutionally this is not just KP’s burden to bear because the NFC award is meant to
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create transfers for the equalization of services for people across the country.
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Our nation, our constitution is predicated on equality, and this equality extends to being
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provided the same level of access to education and health no matter where you live. Your
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address should not determine your fate. Nor does the district of your origin seal the extent of
life opportunities you enjoy. If this 10th NFC does not address Fata so to speak, it will be – in
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the language of real estate – a file transfer for an undeveloped plot. While this is an imperfect
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analogy because a lot of good work is being done in Fata, it does underscore the need to do
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much, much more. Seventy years of underdevelopment cannot be addressed in increments.

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But even a tough situation is not shorn of opportunities. This unprecedented step of assigning
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Fata responsibilities to KP can be converted into development outcomes for the people of
Fata. A clear and formula-based share mandated by the NFC is the necessary step in this
direction. The KP government is already geared to continue special focus on Fata and create
systems, design solutions and continue the salience to life and development outcomes in Fata.
For this national priority to continue receiving attention, NFC share of Fata will be the right
thing to do.

Pakistan’s national development is best served if all regions converge in development, with
their resources and factors best employed to the highest levels of productivity. A necessary
condition for such convergence is that the variation in available fiscal resources to provinces

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are within a comparable range. For the year 2017, for example, the per student non-salary
expenditures in Punjab and Sindh reached Rs5,089 and Rs7,376, respectively. For Fata, these
could only attain a level of Rs259 per student only, indicating the persisting gaps in a basic
service. Similarly, in health, Punjab and Sindh spent Rs1,718,479 and Rs1,861,148 per
hospital bed while the level of non-salary expenditure was only Rs62,872 in Fata for the same
year. When we account for the variance in population per bed across provinces and Fata, it
further shows a depleted service level.

Another way to assess this variation is by computing coefficients of variation. The economic
concept embodied in the coefficient variation can simply be felt by everyone as they walk out

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of their homes and see the difference in the neighbourhood roads, schools, health facilities

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and whether the street outside your house is paved or with dark outflowing drains. The higher

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the coefficient the worse is the equity and wider the differences in the life spaces around the

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people.

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Under the 7th NFC, the NFC transfers added resources on top of the own source revenues of

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the provinces. The coefficient of variation came down from 0.71 to 0.32, achieving
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improvement in equalization. But with the 25th Amendment and with the NFC neglecting
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Fata, the coefficient of variation for the available transfers rises back one-fourth of the
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correction, eliminating the effects of equalization. This means the fiscal equalization
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attempted by the 7th NFC in its horizontal sharing of resources has gone awry. KP comes
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under unequal fiscal pressure.

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Equalizing resources for public expenditure is by no means the end all to attain comparable
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services. It only corrects the intolerable variations that arise from historical factors as well as
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tax base endowments, the latter to some extent arising from long-term disparities in
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development. Equalizing revenue or equalizing expenditures is the only necessary condition.

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For sufficiency, in addition to resource equalization, functional systems, implementation

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capacities and improved governance is also required.

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The NFC mechanism has an important opportunity and a national obligation to correct the
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situation for Fata. There is an immediate-term decision to be made and then there would be
the longstanding decision. The former decision is assigning a share to Fata using the 7th NFC
Award formula. This will restore the current award to constitutional compliance. The
longstanding solutions would be for the 10th NFC to make and see how to assign resources to
Fata as a continued national obligation.

A correction of the 7th Award will address the immediate term issue. The 7th NFC
distribution of resources now needs an immediate recalculation – calculation of the share of
Fata from the distributable resources under the NFC. If we apply the 7th Award formula
variables to Fata and compute it on the divisible pool determined for the year 2018-2019, as

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an entity Fata’s share would come to Rs.16 billion per annum. This perpetuating annual loss
of more than a hundred billion rupees is unconstitutional.

And finally what would you do to assuage the aspirations of the five million residents of the
region? Treat them as a special entity and achieve a fiscal embrace to shore up the public
services. As we determine an NFC share for Fata, we will only be treating all the residents of
the much neglected region as equal citizens of Pakistan.

Pakistan has not suffered that much from bad policies or weak pronouncements. But it has
faltered many times because of timid decisions. The 10th NFC needs to beware of policy
timidity. The citizens of Pakistan resident in Fata should have equal access to public services,

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comparable to other areas of the country. We just can’t subsume the development lag of Fata

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in national averages of indicators.

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Path dependency is not a well-adorned way to a developed future for the nation. There is no

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obligation upon us to remain in a disequilibrium of unbridgeable regional disparity. As they

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mature, states reveal themselves through higher-order policy decisions. How we assign
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resources to Fata and integrate into a developed Pakistan is a test case. It will show to what
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extent we correct the past to reach the right future for all of Pakistan. Its time to do the right
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Concluded
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The writer has a doctorate in economics and has three decades of experience in public policy
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and management. He represents KP in the 10th NFC.

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Email: cyanm777@gmail.com
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