TIOL-DDT 97 · the untouched capture
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<html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body bgcolor="#FFFFFF"> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#0000CC" size="3">TIOL-DDT 97</font><br> 19 04 2005<br> Tuesday</b></font></p> <p align="center"><font color="#006633" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b>India - Pakistan Ties – Potential rewards – Good report from “Standard & Poor’s”</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Standards & Poor’s have yesterday reported that both the countries are to reap the rewards of better relations between them. For Pakistan it would boost its positive credit trajectory. For India it would be more emotional than economic. Lasting peace would bolster its international standing. For Pakistan, it would reduce military spending which would free up funds for social needs which will improve standard of living and economic productivity. It could also reduce Pakistan’s substantial debt. There is enormous potential for cross border trade.<br> <br> For India, the benefits will be less significant because of our sheer size compared to Pakistan but our standing in the world stage would certainly be better. There are more chances of success in the present peace process than earlier attempts because of the economic considerations.<br> <br> <font color="#006633"><b>What about the Iran-India pipeline through Pakistan?</b></font><br> <br> Apparently there was no agreement on this while India is keen to extend the pipeline to China. The oil and gas friendship pipeline that would begin in Iran's natural gas fields; cross Afghanistan, Pakistan, India and Myanmar; and end in China is a great great project that all these countries should vigorously pursue. This project is seen as a threat in US. The “American Thinker” reported yesterday.<br> <br> <b>It seems the terror regime in Iran has found a kindred fascist government in the new world in an attempt to form a new energy alliance. In the mullahs' gambit to split off India and Pakistan from our anti-terror Coalition, the proposed Iran-India pipeline will use the huge natural gas reserves in the Persian Gulf to feed the huge energy demands of not only India, but Pakistan as well.</b><br> <br> Maybe they were not aware of China also joining the project. <br> <br> Energy hungry India and Pakistan need natural gas. India’s gas demand will almost double by 2015 and we will have to import a large quantity. As the world’s second largest gas reserve, Iran is the most geographically convenient supplier of gas to both countries.<br> <br> India has three options.<br> <br> 1. Shipping the gas through the Arabian Sea on tankers.<br> <br> 2. Getting it through a deep sea pipeline.<br> <br> 3. Transporting it through land by a 1700-mile pipeline from Iran’s South Pars field to India. This would mean 475 miles of the pipeline passing through Pakistan. <br> <br> The last option is the cheapest – even taking into consideration the fragile political balance. For Iran it is broader market and India’s political support in the international arena. With menacing US forces in neighbouring Iraq and Afghanistan, gas is the best way for them to befriend India and Pakistan. <br> <br> It seems to be a win-win situation for all concerned and naturally USA is not very happy. But both India and Pakistan face the problem of mindless terrorism. Any mad terrorist can simply blow up the pipeline and with that a very successful economy. Economics is becoming more relevant in international politics and India is lucky we have an economics pundit as our Prime Minister. <br> <br> <font color="#006633"><b>We have the same problems</b></font><br> <br> Both countries face a set of common problems -- the inherited legacy of a control mind-set among the government and rent-seeking private sector, widespread corruption, poor fiscal management, weak financial system and congested and overcrowded urban services – </font></p> <p align="right"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DR. ISHRAT HUSAIN, World Bank Expert and Pakistan commentator.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <font color="#006633"><b>Six tentacles of corruption</b></font><br> <br> 1. Leakage in the assessment and collection of tax revenues. The small tax base, large-scale evasion of taxes and oppression and extortion of honest taxpayers by the unscrupulous tax collectors have not only generated consistent shortfalls in revenues and large budgetary deficits but promoted a buoyant black economy and conspicuous consumption by a small class of tax evaders and corrupt tax collectors. The inequities from this concentration of ill-gotten wealth are leading to serious social fragmentation.<br> <br> 2. The government contracts and purchases of goods and services by different departments and ministries have conferred huge windfall gains to those authorizing these contracts and purchases and those who are building and supplying them. The recent history of commissions, kickbacks and foreign deposits is too well known that it does not need any repetition but it simply illustrates the gravity of the problem. Not only the country is stuck with shoddy and poor quality works and goods and services but the inflated public expenditures are one of the main contributory factors in the financial distress and heavy indebtedness faced by the country. <br> <br> 3. While the managers and employees of PSUs are "making hay while the sun shines" the country is coming to the brink of financial disaster by absorbing the losses (man-made) of these enterprises. The public utility bills are out of reach for a common hard-working honest family while the breakdown in power, water and other services is too frequent. <br> <br> 4. The nationalized commercial banks and development financial institutions have made a few thousand families fabulously rich but made the rest of the population pay the price for their malfeasance.<br> <br> 5. Fifth, the recruitment, postings and transfers in all government ministries, departments and corporations are largely made either in exchange of outright pecuniary favours or on purely political considerations. The result is that the government offices are saddled, barring some honourable exceptions, with incompetent and dishonest functionaries who are always trying to please their bosses or political masters while being completely oblivious to the grievances of the common man whom they are supposed to serve. The culture of sycophancy and catering to the whims of that in power has taken firm roots and the courage to speak out the truth and render professional and objective advice to the politicians has simply died down. While the upper echelons of the bureaucracy remain busy in meeting the demands of those in power, the clerks and lower functionaries harass, extort and misbehave with the poor public who come to their offices for legitimate need. The police officials are perceived as a menace by the ordinary citizen rather than as a protector of their life and property.<br> <br> 6. Another avenue for making a fast buck and becoming rich overnight, particularly in the past, has been to lay your hands on a licence or permit of any kind - construction, import, monopoly enterprise or obtain plots of land at highly subsidized prices and pocket the difference between the acquired price and the market price. The prices of both the commercial and residential property, therefore, soared to levels beyond the affordability of a middle class family.<br> <br> <b>Sounds familiar? Well, these topical comments were made by Dr. Ishrat Hussain six years ago about the situation in Pakistan. Are things different across the border?</b></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Beyond the shores of time,</b><br> <font color="#0000CC">in the valley of death </font><br> <b>On the branch of a tree </b><br> <font color="#0000CC">nurtured by my tears</font><br> <b>In the blue sky </b><br> <font color="#0000CC">lit by the stars</font><br> <b>With a garland made of beads</b> <br> <font color="#0000CC">of my broken dreams </font><br> <b>I wait for my saviour</b><br> <b>With my wings </b><br> <font color="#0000CC">of time clipped, </font><br> <b>I wait for my saviour. </b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#FF6666">Until Tomorrow with more of DDT<br> <br> Have a Nice Time<br> <br> Mail your comments to</font></b> <b>vijaywrite@taxindiaonline.com </b></font></p> </body> </html>