The committee discussed progress on foreign funds and grants for programmes in Health Sector; selections of students under exchange programmes and performance along with expenditure of Economic Affairs Division (EAD) during 1st Quarter of Financial Year 2011-2012. Secretary EAD briefed the committee in detailed on the agenda items regarding the progress of foreign funds and grants for programmes in health sector. He told members that $265 million have been received for 15 health projects by Germany, Japan, UK and IDA under various programmes $216 million for these projects is yet to be received by donor agencies.
Committee directed the ministry for inclusion of Khyber Pakthunkhwa headquarter Peshawar for operations of cataract patients in current project funded by Chinese grant. Secretary told that EAD have finalised project related loan with the Islamic Development Bank (IDB) under country partnership programme for three years.
On the question of distribution of Energy Savers programme for energy conservation, secretary told that ministry of water and power have decided to re-bid for procurement after which ADB will be evaluating it. The bank will provide financial assistance for free distribution of 30 million energy saver bulbs (CFLs) in the country. These energy savers will help reduce peaks hour demand over 1000 MW.
Secretary also briefed the committee on selection criteria of Students Exchange Program with China and Turkey and also apprised the committee for distribution of provincial quota on the basis of Federal Public Service Commission (FPSC) rules. He told that students aged between 18-25, 36 per cent from Punjab, 20 per cent from Sindh, 14 per cent from KP, 10 per cent from Baluchistan, 05 per cent each from Azad Kashmir, Gilgit -Baltistan, Islamabad and from minorities went to visit abroad that includes 35 women from all over the country last year.
While informing on the budget expenditure; Secretary EAD told that out of total Rs421.48 million the ministry consumed Rs46.33 million in first quarter of 2011-12. Committee directed the ministry to provide province wise quota list of youth exchange programme beneficiaries. Committee further directed the ministry to provide the last ten years fund utilisation details of ministries of water and power, interior and petroleum and natural resources.
Three-quarters of schools were closed, hospitals were only ensuring emergency care, local authorities were paralysed and airports and ports were expected to be badly affected.
Striking workers picketed public sector buildings in central London and more than 1,000 demonstrations were expected to take place across Britain in scenes reminiscent of the 1970s.
Passengers arriving at London’s Heathrow airport, one of the world’s busiest air hubs, have been warned to expect delays of up to three hours to have their passports checked as border control officials join the action.
The strike will be the biggest test so far of Prime Minister David Cameron’s Conservative-Liberal coalition government, which sparked the unions’ fury by making public sector workers pay more into their pensions and work longer.
Anger rose further on Tuesday when finance minister George Osborne targeted the pay of teachers, nurses and soldiers and revealed plans to cut an extra 300,000 public sector jobs as he slashed Britain’s growth forecasts.
Osborne also infuriated the unions by announcing a two-year, one-per cent cap on public sector pay rises.
On Wednesday, Osborne said the strike would only harm the economy, and called for unions to return to the negotiating table.
“The strike is not going to achieve anything, it’s not going to change anything,” the Chancellor of the Exchequer told BBC TV.
“It is only going to make our economy weaker and potentially cost jobs.
“So let’s get back round the negotiating table, let’s get a pension deal that is fair to the public sector, that gives decent pensions for many, many decades to come but which this county can also afford and our taxpayers can afford.
“That is what we should be doing today, not seeing these strikes.”
But Brendan Barber, general secretary of the Trades Union Congress (TUC), said the public sector was “under attack” by the government and the strike was fully justified.
“There comes a time when people really have to stand up and make a stand,” he told ITV.
“With the scale of change the government are trying to force through, making people work much, much longer and get much, much less.”
Barber denied that public sector workers’ pensions were “gold-plated” compared to their counterparts in the private sector, and he stressed that the majority were low-paid workers.
At Heathrow Airport, immigration staff were drafted in from other sites to replace striking workers and some airlines cancelled flights in a bid to avoid long queues at immigration.
However, passengers arriving on early morning flights from Australia and the United States reported few problems.
A British Airways spokesman said: “We’ve had a positive start to the day and queues are pretty much as normal.
“There are reports that around two-thirds of the Border Agency staff are working at Heathrow.”
Elsewhere in England, a giant union rally was to take place in the industrial central city of Birmingham.
In Scotland, 300,000 workers were expected to walk out and transport in Northern Ireland faced disruption.
Under the government’s proposals, public sector workers will be asked to work until they are 66 and increase their pension contribution payments.
The government also plans to peg pension payouts to the Retail Price Index rate of inflation rather than the higher Consumer Price Index measure as it seeks to address the dual challenge of increased life expectancy and a depleted public purse.
Staff also face a lower pension payout, based on their average salary as opposed to the final salary schemes to which they are currently tied.
Three bank robberies were committed in October alone.
A single gang is suspected to be involved in the heists, investigators said.
Police said six suspects armed with TT pistols entered the Habib Metropolitan Bank branch at Hasan Square and held the staff and inmates at gunpoint.
“Initially two suspects entered the bank branch posing to be seeking change for a 1,000-rupee note.
They were followed by their accomplices who entered and overpowered the two bank guards with the help of the two
accomplices present inside the branch,” SSP of range crime (east) Niaz Khosa told Dawn.
The two guards were deprived of their weapons: a repeater gun and a pistol.
Subsequently, the suspects collected the cash from the cash counter and went to the strongroom where they stuffed the bags with more currency notes.
The suspects also collected nine cellphones — four from the bank staff and five from the customers present in the bank — said SP Khosa.
The armed suspects also took away the digital video recorder installed in the bank with its footage.
They left the repeater gun snatched from the guard in the strongroom before leaving the bank, police said.
“It was an unusual time for carrying out a bank heist. They entered the bank premises at around 11am and left it in around 10 minutes. Usually bank holdups take place in the initial hours of banking,” remarked SP Niaz Khosa.
The suspects used a Suzuki carry van. In the previous bank heists Hi-roof vans were used by the robbers, police said.
“I am writing to the home department to ask the State Bank of Pakistan to direct the insurance companies to stop honouring claims of banks which don’t have a dual DVR system installed at their head offices,” SP Khosa told Dawn.
“There is a standard operating procedure that banks install a dual DVR system having a recording link at their head offices, but most banks are not following the SOP.
“They are careless since their cash is insured.”
An FIR (705/2011) under Section 395 of the Pakistan Penal Code was registered at the Aziz Bhatti police station on a complaint of Salman Siddiqi, the manager of the bank.
5 billion units unaccounted for
Explaining the phenomenon of circular debt, Secretary Water and Power Imtiaz Qazi said that the power generation companies produced 24 billion units, out of which PEPCO received bill payment against only 19 billion units, whereas 5 billion units / per annum were unaccounted due to line losses and power theft. He said that the government has been giving a subsidy of Rs2 on each unit of electricity but the Finance Division did not release the allocated funds for subsidy to PEPCO, which has exacerbated the already worsening situation of circular debt accumulation. Qazi told the committee that during the three years tenure of the current government, the price of electricity has been increased by 78 per cent, excluding the increase in power tariff due to regular fuel adjustments.
Non payment of bills
Non payment of electricity bills by the government departments, the private sector especially in FATA, and some areas of Sindh have contributed to inflating the circular debt. This coupled with up to 20 per cent line losses and nonpayment of price differential claims by the Finance Division on account of subsidy, are the major factor behind mounting circular debt in the power sector. According to Chairman PEPCO Rasul Masud, PEPCO’s receivables from the government sector are approximately Rs188 billion. It has to receive Rs8 billion from various departments of federal government on account of electricity bills, Rs30.55 billion is outstanding from provincial governments while Rs46 billion has to be received from Karachi Electric Supply Company. Chairman PEPCO informed the committee that currently various projects of power generation were under construction and he claimed that by end of 2012 about 3000 megawatts of electricity will be added to the national grid.
Defending RPPs
During the briefing Masud Khan defended the government’s policy of rental power plants and argued that the rental power plants were the immediate available solution to address the power crises. Committee member Shahid Khaqan Abbasi stormed out from the committee room over the justification given by Chairman PEPCO regarding rental power plants. Shahid Khaqan said that the incumbent power ministry officials should resign as they have failed to resolve the power crises. The power ministry has given Rs16 billion to rental power plants but despite the capital injection, power production of rental power plants remained negligible. He claimed that the rental power plants are producing less than 100 megawatts of electricity. The chairman committee and other members also expressed their dissatisfaction over the performance of the ministry of water and power and asked them to increase production from the hydel sources of electricity generation.
Zero Point, located at the Taftan crossing point, was the main trading point upon which thousands of families relied for their livelihood.
“I had come to Quetta to work as a daily wager and now we are being punished without having committed any crime,” says Hameed. He is not the only one bearing the brunt of the closure. Over 5,000 families in Chaghai, which shares a border with Iran, are dependent on trade at Zero Point to earn a living.
Zero Point was unilaterally shut down by Iran two months ago, claiming that it needed to carry out construction work on its side of the border. However, that work has now been completed. Still, informal trade remains at a standstill, despite being permitted under the Barter Trade Agreement, agreed upon by officials of bordering districts. This is the fourth time this year that Iran has restricted informal trade across the border.
Meanwhile, the residents of Taftan are forced to work in Quetta, Dalbandin, Naushki and other areas of the province to eke out a living.
Abdul Qadir, a resident of Taftan, says, “We have to ask residents of nearby settlements to send us goods for our daily use, like flour and soft drinks.” He adds, “The closure of informal trade is meant to deprive hundreds of people of food and the basic necessities of life.”
Deputy Commissioner Dr Tufail says, “Whenever the border is closed it means over 5,000 people have been made jobless from just a single government action. This is also creating a law and order situation because if there are no jobs it leads to crime. I have personally observed that the closure of the border is pushing people into criminal activities.”
Tufail says that he has written to Iranian officials requesting that the border be reopened and he has a meeting to discuss this with them on November 20.
The debt swap will, however, result in an additional fiscal deficit of 1.8 per cent of GDP (gross domestic product) during the current financial year, over and above the targeted normal budget deficit of 4 per cent of GDP.
Finance secretary Dr Waqar Masood Khan told journalists at a briefing that the additional fiscal deficit would not be treated as normal deficit because this was a one-time measure, although he hinted another round of similar adjustments going forward before resolution of the circular debt and power crisis.
An official said that despite parking of huge circular debt in the public domain, the government will have to increase electricity tariff by about 14 per cent or else another Rs76 billion of additional circular debt would re-emerge during the current financial year over and above the budgeted subsidy.
Dr Waqar said the circular debt taken over by the government comprised Rs313 billion in power sector loans and the Rs78 billion federal debt in commodity operations.
“The debt was already there but was not shown in books,” the finance secretary said, adding that the government had to take this bitter pill because it was a hindrance in fresh lending.
He said the power sector term finance certificates (TFCs) which carried an exorbitant interest cost of 200 basis points above the Karachi Inter Bank Offered Rate (Kibor) had now been brought into the mainstream lending instruments of Pakistan Investment Bonds (PIBs) and T-Bills.
All banks, led by National Bank of Pakistan, will now purchase PIBs and T-Bills on a 50:50 per cent basis.
The 5-year PIBs will be available to the banking consortium at an average interest rate of two previous auctions while one-year T-Bills will be traded at 11.82 per cent interest rate.
The secretary said the transaction had been completed in consultation with the IMF.
He said the economic team would like the IMF to issue a clean health certificate to Pakistan economy that would help Islamabad secure loans in the form of fast disbursing project loans from the World Bank and the Asian Development Bank.
He said the government was already in contact with the two lending institutions to lend about $2 billion ($1 billion each) to Pakistan’s power sector, after clearance of bad debts.
The fresh loans will be available only after Islamabad agreed to a set of power sector reforms because such World Bank loans are based on performance indicators. He clarified that Pakistan neither required a fresh IMF loan nor it had asked for one because of comfortable balance of payment position despite scheduled repayment of $1.2 billion during the current year.
He said the power sector debt was owing to its losses, uncollected bills and non-payments by provincial governments and Karachi Electric Supply Company.
PAKISTAN RAILWAYS: In reply to a question, the finance secretary said there were innumerable challenges in the Pakistan Railways despite its great revenue potential. He said the railway was a commercial entity whose annual revenue stood at Rs28 billion three years ago, but had now dropped to Rs14 billion and its liabilities had accumulated to Rs48 billion because the freight operation, the main source of revenue, was paralysed with operational bogies drastically coming down to 50 from 400.
Federal Board of Revenue (FBR) Chairman Salman Siddique said that the country is facing an unannounced economic emergency as budget deficit has swelled to more than Rs600 billion, reported Express News 24/7 Saturday.
Addressing a meeting in the Lahore Chamber of Commerce, the FBR chairman painted a gloomy picture of Pakistan’s economic condition.
He said that Pakistan is running on loans and everyone will have to pay tax to steer the country out of the current crisis.
Siddique informed the Lahore Chamber that the board is establishing a new system to check tax evasion in future.
He added that tax evasion in Pakistan leaves the state with no option but to borrow money from lenders, such as the International Monetary Fund (IMF).
The chairman warned that Pakistan would have to approach the IMF if the situation persists.
He further informed that the collected amount which stands at Rs15, 058 billion has been spent on defense and other development projects
Addressing a meeting in the Lahore Chamber of Commerce, the FBR chairman painted a gloomy picture of Pakistan’s economic condition.
He said that Pakistan is running on loans and everyone will have to pay tax to steer the country out of the current crisis.
Siddique informed the Lahore Chamber that the board is establishing a new system to check tax evasion in future.
He added that tax evasion in Pakistan leaves the state with no option but to borrow money from lenders, such as the International Monetary Fund (IMF).
The chairman warned that Pakistan would have to approach the IMF if the situation persists.
He further informed that the collected amount which stands at Rs15, 058 billion has been spent on defense and other development projects
Iran closed the trade gate at its border with Pakistan on Thursday because of security concerns in the aftermath of the killing of 26 pilgrims in Mastung on Tuesday.
The Iranian authorities first closed the gate and then informed the Pakistani border officials about their action. They did not indicate how long they planned to keep the gate closed but said that the passengers visiting Iran legally would be allowed to do so.
It is the third time this year that Iran has closed the gate, leading to suspension of all kinds of trade through the border.
Official sources said the decision would render thousands of labourers unemployed.
They also said that Iran had deployed more security personnel at the border after the Mastung incident.
Pakistan has also taken measures to ensure security of people crossing the border legally.
Meanwhile, 20 people were arrested near Mastung on Thursday because they were going to Iran without informing the authorities concerned.
Police sources said the detained men belonged to the Hazara community and they had hidden themselves on the roof of a Taftan-bound bus.
They were brought to Quetta for investigation.
The Balochistan government has restricted the movement of pilgrims to Iran and asked travel and transport companies not to take pilgrims to Taftan without permission and security.
The provincial government has assured transport companies of providing security if they inform authorities about the travel plan in advance.
Official sources said that there was no ban on the movement of pilgrims to Iran, but transporters were bound to inform the administration about their travelling programme.
Chief Minister Nawab Aslam Raisani had taken notice of the Mastung incident that claimed 26 lives and directed law enforcement personnel to take measures for ensuring safety of pilgrims.
Meanwhile, police claimed to have arrested about 250 suspects in connection with the Mastung incident.
The Iranian authorities first closed the gate and then informed the Pakistani border officials about their action. They did not indicate how long they planned to keep the gate closed but said that the passengers visiting Iran legally would be allowed to do so.It is the third time this year that Iran has closed the gate, leading to suspension of all kinds of trade through the border.
Official sources said the decision would render thousands of labourers unemployed.
They also said that Iran had deployed more security personnel at the border after the Mastung incident.
Pakistan has also taken measures to ensure security of people crossing the border legally.
Meanwhile, 20 people were arrested near Mastung on Thursday because they were going to Iran without informing the authorities concerned.
Police sources said the detained men belonged to the Hazara community and they had hidden themselves on the roof of a Taftan-bound bus.
They were brought to Quetta for investigation.
The Balochistan government has restricted the movement of pilgrims to Iran and asked travel and transport companies not to take pilgrims to Taftan without permission and security.
The provincial government has assured transport companies of providing security if they inform authorities about the travel plan in advance.
Official sources said that there was no ban on the movement of pilgrims to Iran, but transporters were bound to inform the administration about their travelling programme.
Chief Minister Nawab Aslam Raisani had taken notice of the Mastung incident that claimed 26 lives and directed law enforcement personnel to take measures for ensuring safety of pilgrims.
Meanwhile, police claimed to have arrested about 250 suspects in connection with the Mastung incident.
said on Thursday.
The reserves are just below an all-time high of $18.25 billion, hit the week ending July 2.
Reserves held by the State Bank of Pakistan (SBP) jumped to $14.71 billion from $14.64 billion a week ago, while those held by commercial banks rose to $3.52 billion from $3.47 billion, said SBP chief spokesman Syed Wasimuddin.
Pakistan's foreign exchange reserves were boosted in June by inflows of $411 million, including a loan of $191.9 million from the World Bank, and another loan of $196.8 million from the Asian Development Bank.
Higher export proceeds and a record inflow of remittances have helped Pakistan's forex reserves grow steadily.
According to official data, remittances rose to a record $11.2 billion in 2010/11 fiscal year, an increase of 25.77 percent compared with the same period last year.
In May 2010, Pakistan received $1.13 billion in the fifth tranche of an $11 billion International Monetary Fund (IMF) bailout programme.
A statement issued by the Prime Minister’s House said the PM had accepted Kardar’s resignation and appointed the senior most deputy governor, Yasin Anwar acting governor with immediate effect. In a letter addressed to the PM on July 15, the governor tendered his resignation saying, “I hereby resign from the position... I am grateful for the privilege and great honour bestowed upon me to serve the country,” the statement said.
According to an official source, Kardar had resigned after differences with the government on key economic issues. He said his first resignation contained harsh language and he was asked to resubmit a simple resignation. He had earlier assumed charge of governor on September 9, 2010.
The previous governor, Saleem Raza, had also resigned from the post citing personal reasons.
The source said the government was considering former National Bank of Pakistan president Ali Raza and incumbent Finance Secretary Waqar Masud for the post. However, he said the chances of the acting governor to be made permanent were more likely.
He said the presidential camp wanted a man of strong nerves who could withstand slippages due to increased borrowing from the central bank and commercial banks during the period before the election. And secondly, they wanted to avoid embarrassment caused by another resignation.
Another shake-up: Meanwhile, in another shake-up in the economic team of the government, Federal Board of Revenue (FBR) Chairman Salman Siddique is likely to be appointed Auditor General of Pakistan (AGP) in place of Tanveer Ali Agha, whose four-year term expires today (Tuesday). Siddique is also to reach the age of superannuation in the near future.
Commerce Secretary Zafar Mehmood is likely to be appointed FBR chairman.
A source told Pakistan Today that the government had taken this decision and a notification in this regard would be issued soon.
“The summary to appoint the FBR chairman AGP and Zafar Mehmood in his place has been approved by the prime minister,” the source said.
However, Siqqique denied the report saying the post of the AGP was constitutional and a serving person could not be appointed against it.
National exchequer faces about Rs10 billion loss per day owing to halt of business activities in the economic hub Karachi,Express News reported.
Traders on Friday closed their business activities to protest against spate of violence and due to MQM’s mourning day. According to analysts closure of business activities in the metropolis for one day bring loss of nearly Rs2 billion tax to national exchequer.
Chairman All Karachi Tajir Itehad Atiq Mir has said that businessmen are unable to continue their trade activities in Karachi owing to this violence.
Traders have demanded of the government to maintain its writ in the city so that they could continue their business.
Traders on Friday closed their business activities to protest against spate of violence and due to MQM’s mourning day. According to analysts closure of business activities in the metropolis for one day bring loss of nearly Rs2 billion tax to national exchequer.
Chairman All Karachi Tajir Itehad Atiq Mir has said that businessmen are unable to continue their trade activities in Karachi owing to this violence.
Traders have demanded of the government to maintain its writ in the city so that they could continue their business.
President Brick Kilns Association Multan Nazar Muhammad Khan and General Secretary Amjad Jagwal made this announcement while addressing a press conference at press club on Saturday. Majority of the brick kiln owners of Multan, Shujabad, Muzaffargarh, Khanewal and Jalalpur pirwala were also present on the occasion.Mr Nazar said that the GST on the bricks was unjustified as it would not only affect their businesses but also jobs of hundreds of labourers would be put at stake.He said that the general public would also suffer a lot as the construction cost of houses and other buildings would go high.He said that brick kiln owners had demanded of the government through media and other means to withdraw the decision to save the brick kiln industry from ruin and hundreds of labourers would become jobless.He said as their appeals fell on deaf ears, they had no other option but to go on a strike till July 18.Meanwhile, in view of the strike announced by the brick kilns association, the rates of bricks have been increased in the market by the suppliers and stockiest, it has been revealed.PML-N senior leader Makhdoom Javed Hashmi said that the government’s tall claims regarding the welfare of the people had been exposed. He added the government had destroyed the infrastructure of society by imposing 16 per cent general sales tax on bricks.He expressed their deep concerns over the imposition of GST. Association's General Secretary said, “We demonstrated before but nothing happened and now if the government will not take his decision back we will surround the Parliament House.
Separately, The Brick Kiln Association Multan has closed all the brick kilns for sale against the imposition of general sales tax on bricks.
The cash-starved government has targetted to borrow Rs800 billion from the risk-averse banks during first quarter of the current fiscal year, July-September FY12.
According to State Bank data, during last fiscal year, July-June 18, FY11, the cash-strapped government budgetary borrowing from the banking system had aggregated to Rs693.504 billion against Rs370.470 billion of corresponding periods in FY10.
Economic observers have long been critical of the government’s borrowing-prone approach which they say not only deepens inflationary pressures in the poverty-hit country but also renders the growth-oriented private sector crowded out in terms of banks’ finances.
“The government seems to have stuck to the past trend of bank borrowing beyond the target because of a widening fiscal deficit and heavy participation from the (risk-averse) banks and financial institutions,” viewed Farhan Mehmood, an analyst at InvestCap Securities.
However, the federal governmentwould be raising the targetted billions by auctioning short- and medium-term risk-free and heavily-weighted government securities to primary dealers, through State Bank of Pakistan (SBP), .
According to the pre-auction target calendars issued by the central bank on Friday, the government had set a target of Rs750 billion to be borrowed from the scheduled banks through selling the Government of Pakistan Market Treasury Bills (MTBs) of 3-, 6- and 12-month maturity periods.
Whereas Rs50 billion would be raised from the banks through the auction of 3-, 5-, 7-, 10-, 15-, 20- and 30-year Pakistan Investment Bonds (PIBs).
The State Bank’s auction target calendar shows that the regulator would hold six auctions on July 13, July 27, August 10, August 24, September 7 and September 21, respectively, to realise Rs90, Rs120, Rs170, Rs90, Rs150 and Rs130 billion from the scheduled banks.
The settlement dates for the above auctions have been set, respectively, on July 14, July 28, August 11, August 25, September 8 and September 22.
The maturity dates for the 3-, 6- and 12-month treasury bills would range, respectively, between October 6 and December 15 (2011), January 12 and March 22 (2012) and July 12 and September 20 (2012), the State Bank calendar says.
Whereas the central bank invited bids on Friday from the designated primary dealers for the auction of the short and long term PIBs worth Rs50 billion. The targetted amount would be raised in two different auctions, Rs30 billion on August 17 and Rs20 billion on September 14.
The settlement dates for the investment bonds have been set on August 18 and September 15.
Economic observers, deeming the heavy borrowing detrimental for the ailing economy, suggest that country’s economic managers should embark on a nationwide plan to recover the “stolen” money amounting to at least Rs700 billion besides keeping its non-developmental expenses in check.
“Much of the borrowed money is being used under non-development expenditures and thus for unproductive purposes,” that provides no impetus to the economy, Farhan said.
The analyst said the democratically-elected government seemed to have focused more on political issues and not on economic ones which are more pressing.
Finance Minister Abdul Hafeez Sheikh and German minister for economic cooperation and development signed a bilateral economic cooperation agreement in a ceremony held here at the Finance Ministry Friday.
Talking to members of German delegation ahead of signing ceremony of agreement, Abdul Hafiz Sheikh said Pakistan attached vital importance to its relations with Germany and added that Germany and EU were playing pivotal role in the economic development of Pakistan.
The International Monetary Fund, the inter-governmental group that oversees the global financial system and brings together 187 member nations, has become the latest known target of a significant cyber attack.
A cyber security expert, who has worked for both the Washington-headquartered IMF and the World Bank, its sister institution, said the intruders' goal had been to install software that would give a nation state a "digital insider presence" on the IMF network. Such a presence could yield a trove of non-public economic data used by the Fund to promote exchange rate stability, support balanced international trade and provide resources to remedy members' balance-of-payments crises.
"It was a targeted attack," said Tom Kellerman, who has worked for both international financial institutions and who serves on the board of a group known as the International Cyber Security Protection Alliance. The code used in the IMF incident was developed specifically for the attack on the institution, said Kellerman, formerly responsible for cyber-intelligence within the World Bank's treasury team and now chief technology officer at Air Patrol, a cyber consultancy.
The attack on the IMF was the latest to become known in a rash of cyber break-ins that have targeted high-profile companies and institutions, often to steal secrets with potentially far-reaching economic implications. The list of victims includes Lockheed Martin Corp, Sony Corp and Citigroup Inc.
IMF spokesman David Hawley said Saturday the Fund was "fully functional," despite the attack. "I can confirm that we are investigating an incident," he said, adding that he was not in a position to elaborate on the extent of it. He declined to respond to requests for comment on Kellerman's conclusion about the intruders' goal.
The U.S. Federal Bureau of Investigation is helping to investigate the attack on the IMF, according to a U.S. Defense Department spokeswoman.
A cyber security expert, who has worked for both the Washington-headquartered IMF and the World Bank, its sister institution, said the intruders' goal had been to install software that would give a nation state a "digital insider presence" on the IMF network. Such a presence could yield a trove of non-public economic data used by the Fund to promote exchange rate stability, support balanced international trade and provide resources to remedy members' balance-of-payments crises.
"It was a targeted attack," said Tom Kellerman, who has worked for both international financial institutions and who serves on the board of a group known as the International Cyber Security Protection Alliance. The code used in the IMF incident was developed specifically for the attack on the institution, said Kellerman, formerly responsible for cyber-intelligence within the World Bank's treasury team and now chief technology officer at Air Patrol, a cyber consultancy.
The attack on the IMF was the latest to become known in a rash of cyber break-ins that have targeted high-profile companies and institutions, often to steal secrets with potentially far-reaching economic implications. The list of victims includes Lockheed Martin Corp, Sony Corp and Citigroup Inc.
IMF spokesman David Hawley said Saturday the Fund was "fully functional," despite the attack. "I can confirm that we are investigating an incident," he said, adding that he was not in a position to elaborate on the extent of it. He declined to respond to requests for comment on Kellerman's conclusion about the intruders' goal.
The U.S. Federal Bureau of Investigation is helping to investigate the attack on the IMF, according to a U.S. Defense Department spokeswoman.
It is difficult to say what more he would have added had he not faced much of the abuse hurled at the government, something which only a full reading of the text will reveal.
Based on what he presented just a day earlier in the form of Pakistan’s Economic Survey for the current financial year, the budget presented by the finance minister yesterday for the fiscal year 2011-12, confirms what many economists have been saying for some time.
There is a huge disconnect between the real problems which afflict Pakistan’s economy and its people, and the government’s response to them. It seems that this government does not have the ability, or perhaps even the desire, to address Pakistan’s key economic problems.
It certainly does not have a plan. What makes matters for worse is that this is the last-but-one budget before elections are held and the budget to be announced next June will have to be a populist election budget which tries to win votes rather than take difficult decisions.
Because of this, the budget presented yesterday was a major disappointment and fails to address Pakistan’s economic problems, and will only make matters worse.
The key problems which were identified in the Economic Survey included persistent and high inflation, persistent and low growth, low revenue collection leading to a high fiscal deficit which continues to add to the overall debt, and a dramatic fall in the investment rate. These are the core issues which affect Pakistan’s economy, and required a major and forthright attack, nothing short of this.
However, the government’s efforts have failed to deal with any of these issues. Blaming floods, the continuing war on terror, or the rise in global petrol prices or the global economic slowdown, does not allow for any excuses.
If anything, these significant constraints on the economy should have provided the impetus for major departures from the past.
The core problem facing Pakistan, which has a bearing on development, on debt and on defence expenditure, as well as on aid and donor dependence, is that of taxation and revenues. Without raising taxes, none of Pakistan’s economic problems can be resolved.
The finance minister in his speech admitted that only 1.5 million people have filed their tax returns this year, only half of those who are registered. By stating that 70,000 people have been given notices with 700,000 more expected, does not constitute a tax policy.
Moreover, by raising the taxable income level to Rs350,000 and saying that this will give relief to ‘lakhs’, i.e., they will no longer be in the tax net, is also at odds with what is required.
The ‘azm’ which he said his government has to expand the tax net, stands contradicted by announcements in the budget. This will also certainly not help achieve the overly optimistic budget deficit target of 4 per cent.
The ‘relief’ announced in the budget was mainly for government employees who will benefit through some measures related to their permissible benefits and, especially, due to the 15 per cent pay rise which builds on the 50 per cent increase in the last budget which, however, came in for particular criticism by most economists.
There have also been some other measures which offer some sectoral relief, such as to the cement sector affecting construction, and some lowering duties on soft drinks.
Since he was not able to read through the full text, one hopes that the measures he skipped were more substantive than these.
The announced development expenditure for 2011-12 has been increased from the announced Rs468 billion last year to Rs730 billion yesterday, or less than 4 per cent of GDP.
The truth behind these figures is that this year development expenditure, which has been cut throughout the year, will probably be one-third of what was announced, or about 1.5 per cent of GDP. One should expect the same the next year, and the rising trends in unemployment and poverty are unlikely to be reversed on account of government initiatives.
One should add in passing that Bangladesh which announced its budget a few days ago has allocated 7 per cent to development, and their economy is doing far better than Pakistan’s.
Moreover, with military and security-related expenditures nearing around Rs800 billion and debt servicing the same amount, we are back to the bad old days of the past, when there was very little left over for development.
The inflation rate of 14 per cent this year is unlikely to fall on account of the one per cent fall in the GST rate, especially since international food prices are expected to rise over the next year and oil prices continue to remain unstable, both important causes of domestic inflation.
The expectations that many of us had from the finance minister, that he would announce far-reaching and bold reforms which affect revenue generation, the deficit, military expenditure, as well as inflation, have not been met.
The huge disconnect which this government has demonstrated in terms of issues of security, ‘sovereignty’, the dominance of the civilian government over the military establishment, over foreign policy, and even in relation to the judiciary, have all been reconfirmed and re-emphasised with regard to economic issues as well.
State Bank of Pakistan (SBP) on the directives of Supreme Court (SC) issued a circular today (Thursday) to investigate into the loans written off over the past 40 years and also pointed out the responsible bankers in this regard, Express News reported.SC bench under the chair of Chief Justice Iftikhar Muhammad Chaudhary heard the case of billions of loans waved off. Earlier SBP presented a draft circular before the bench. The court expressed concern on it, while Chief Justice asked how would the bank take action against the bankers for issuing huge loans on minor surety, adding that it is the job of an independent commission.It is pertinent to mention here that a commission headed by former Justice Jamshed Ali in this regard had already been constituted. The circular to investigate into the loans written off was discussed in the court. The SC also directed SBP to ensure, in the circular, that all the banks must cooperate the commission.The commission will hand over the probe report to the State Bank every month and all the process would be completed within six-month period.
This was revealed by Israr Rauf, Additional Secretary Revenue Division, while talking exclusively to this correspondent on his return from Karachi on Wednesday night. Israr Rauf said that in compliance with the far-sighted policies formulated by Federal Finance Minister Dr Abdul Hafeez Sheikh and Chairman FBR Salman Siddique, Pakistani banks were monitored and a fraud of Rs19 billion was unearthed and proceedings have been initiated against the banks. These banks were found to be making short payments. On being asked, they could not justify their dealings and as such they were indulging in tax evasion. He said that five officials of a Karachi bank have been handed over to FIA.
Talking about their modus operandi Israr Rauf said that if someone deposited Rs100 as road tax, the bank deposited only Rs20 in the government treasury. In one branch of the bank alone a fraud of Rs285 million was detected. The entire amount has been recovered from the accused. He further said that they have detected 700,000 persons who were not even filing tax returns. Out of them 17,000 alone belong to Karachi and notices have been issued to these tax-evaders. So far interim assessment has been made of the tax of 214 individuals and they owe a sum of Rs671 million as tax. This points to the huge amount to be realized as tax when assessment of all the 17,000 individuals is completed. Taking all the 700,000 persons into account, it can be visualized that hundreds of billions in taxes would be recoverable for all times.
Israr Rauf said that FBR’s target of tax collection from 1st July, 2010 to 31st May, 2011 was Rs1,302 billion, whereas by the grace of Allah we will have collected a sum of Rs1,315 billion when final figures are available. In the month of May 2011 alone, we collected 45.6% more tax corresponding to tax collected in May 2010.
The Planning Commission of Pakistan (PCP) has termed the perks being allowed to the government employees in addition to the salaries are a burden on the national kitty, Express News reported Saturday.
The PCP said it would be more wise to raise the salaries of government servants instead of allowing additional facilities vis a vis transport, house, plot and club membership.
According to a report of the Planning Commission that presented before National Economic Council (NEC), more administrative staff has to be hired for managing the matters relating to these additional facilities.
Government spends Rs4.7 billion to provide the additional perks to the government officers of Grade-20 and above. This amount is further increased to Rs6 billion when administrative expenditure is added to it.
The report said if salaries of these government employees are raised by disallowing the additional perks it will help the government reduce the huge spending of Rs6 billion to Rs3.1 billion.
It was proposed in the report that a transparent mechanism be adopted for selection government employees and appraisal of their performance.
The PCP said it would be more wise to raise the salaries of government servants instead of allowing additional facilities vis a vis transport, house, plot and club membership.
According to a report of the Planning Commission that presented before National Economic Council (NEC), more administrative staff has to be hired for managing the matters relating to these additional facilities.
Government spends Rs4.7 billion to provide the additional perks to the government officers of Grade-20 and above. This amount is further increased to Rs6 billion when administrative expenditure is added to it.
The report said if salaries of these government employees are raised by disallowing the additional perks it will help the government reduce the huge spending of Rs6 billion to Rs3.1 billion.
It was proposed in the report that a transparent mechanism be adopted for selection government employees and appraisal of their performance.
