Wednesday, October 22, 2008

Gen. Musharraf's Economic Policies - 3

Irtiza Ali wrote:

Mr Aamir with all due respect before saying it do some research. The things which were done by Aziz in a matter of 3-4 years we would have been like USA/UK. Pakistanis were also going that way. And all this is not the fault of President Musharraf. Because he choosed the best person which is a graduate of IBA a prestigious Institute of Pakistan. Musharraf only appointed him. He didn't knew what is this Economic Terrorism. He thought Mr Aziz would take care of the country which he did!


Dear Sir,

Lets just assume that Hamid Mir of Jang and Geo Group is Anti Pakistan then how would you define the Ex Chairman of Pakistan Steel Mill who was also a Retired General of Pakistan Army? By the way since last 3 months Mr Parvez Musharraf have been requesting Mr Shaukat Aziz to came back to Pakistan [Read Daily Dawn, Jang and The News International] to answer the allegations which are being levelled against him by the people but I fail to understand as to why Shaukat Aziz is not paying any heed to Mr Musharraf's request. Do read the news after the Steel Mill News that several PML-Q [They are not Anti Pakistan obviously because they are Musharraf Supporters] leading members held Shaukat Aziz responsible for Wheat Crisis in the Country.

1 - Ex-chief of Steel Mills spills the beans BY News Desk

Sunday, May 25, 2008

RAWALPINDI: Former chief of the Steel Mills Lt Gen (retd) Abdul Qayyum has advised President General Pervez Musharraf not to exercise his powers under Article 58-2(b) to dissolve parliament or change the Army leadership, adding it would plunge the country into serious crises that too would not augur well for him.

General Qayyum said the best choice for General (retd) Pervez Musharraf is to quit power as, in his view, he (president) did not enjoy the support of any faction of the society.

Qayyum, who served in the Pakistan Army for 40 years with Pervez Musharraf, was responding to questions by Dr Shahid Masood in the popular Geo programme “Meray Mutabiq”.

He disclosed that differences between General (retd) Pervez Musharraf and deposed Chief Justice Iftikhar Muhammad Chaudhry cropped up over the privatisation of the Steel Mills.

The ex-Steel Mills chief said when the case was being heard by a full court of the Supreme Court, President Musharraf called him (Justice Iftikhar) and asked as to what kind of remarks he (Musharraf) was hearing from him, adding the case should be decided in a manner that it does not cause any loss to the country. To this, Justice Iftikhar said, “You shouldn’t worry. I will decide the case in the best interest of the country.”

The next day when the Supreme Court judgment in the case came, it was totally against the expectations of the president. It was then that a row between the president and the then chief justice ensued.

General (retd) Abdul Qayyum said all the judges on the full court were very honest and competent. They thoroughly did their homework before presiding the court and would make queries to dig into the truth.

To a question, Qayyum said once the then prime minister Shaukat Aziz summoned him and asked him to record a statement in favour of privatisation of the Steel Mills before the Supreme Court. “In response we will accommodate you on a very lucrative post. I told him, Sir, by making me such an offer you have disgraced me,” General Qayyum said.

Lt Gen (retd) Abdul Qayyum further disclosed that once Shaukat Aziz called him on phone and asked him to engage Wasim Sajjad, Sharifuddin Pirzada and Abdul Hafiz Pirzada for the case. But I told him that I have engaged Kamal Azfar. They (Aziz) asked about the fee and I told him that he has engaged him for Rs 700,000 to which the then prime minister said that the Mills should pay Rs 6,200,000 to Wasim Sajjad, Rs 3,500,000 to Abdul Hafiz Pirzada and Sharifuddin Pirzada to be paid even above them.

The former chairman of the Steel Mills said he told Shaukat Aziz that the price of only land of the Steel Mills was Rs 40 billion whereas he was fixing the price of whole the project at Rs 21 billion. This is too low, he further informed the prime minister. He said the prime minister turned a deaf ear to his view and insisted to wrap up the deal before long.

Gen Qayyum said, “I then sent my written objections in a letter. He sent me an insulting answer saying that it falls under their purview.”

Gen Qayyum said painfully that he did not know the reserved price. Some people participating in the bidding did know it, he said.

Gen Qayyum expressed the view that Shaukat Aziz’s bad intention was involved in this matter and an FIR should be registered against him.

Replying to a question, Gen Qayyum said he had tried thrice to meet the president to discuss this matter but he was not granted time. “Then one day I received a phone call saying that I should consider myself out of the job.”

2 - Corruption in Privatization Monday 23 June 2008

by Anti-Privatization Alliance (Lahore)

There has been a massive corruption during the eight years of Musharaf Shoukat power period from 1999 until 2007. It will be very clear that privatization process has not been proved as a key to economic development as was claimed by the government, but a total disaster for the economy.

On 12 November 2007, the former Prime Minister Shoukat Aziz claimed that we have earned 417 billion Rupees ($6.41 billions) through privatization, a record amount according to him. While, only 57 Billion Rupees ($.870million) were fetched altogether from 1991 until 1999 by the civilian governments. He said the corner stone of our economic growth has been liberalization, deregulation and privatization.

Today, in June 2008, it is clear to every one in Pakistan that there has been massive economic decline during the period of military led civilian government of Shoukat Aziz. According to conservative estimate of Anti privatization Alliance Pakistan, a massive 1550 Billion Rupees ($23.84 billions) corruption has taken place during 8 years of Musharaf Shoukat Aziz privatization push. This is a record during any time of 61 years of independence of Pakistan by a government in loot and plunder of the state assets.

A record 700 billion Rupees ($10.76 billions) corruption has taken place during the privatization of financial institutions. When Habib Bank Limited (HBL) 51 percent shares were sold out to Agha Khan Fund For Economic Development in December 2004 for only 22 Billions Rupees, its total assets were more than 570 billion Rupees ($8.76 billions). While another large bank, United Bank Limited (UBL) was sold out only for 13 billion Rupees. HBL had 1437 branches and another 40 braches abroad in 26 countries with ownership of the buildings that the branches are functioning. The sale of these two banks on a very throw away prices is the largest financial scandal in Pakistan history.

The 26 percent shares privatization of Pakistan Tele Communication Limited (PTCL to Dubai based Aitsalat with management rights for only 157 Billions Rupees ($2.59 billion) is another gross violation of the rules set up even by Privatization Commission Pakistan. The Aitsalat bought PTCL after a 10 days strike against privatization by workers was crushed by the military regime in June 2005. The company then refused to take over and wanted more concessions. At the demand of the private company, it was agreed by the PC that another $370 million be reduced from the original price and the rest of the amount to be paid in installments.

Aitsalat announced at the time of privatization in 2005, that none of the 70,000 workers would loose their jobs. However, in 2007, the company has kicked out 30,000 workers on the name of so-called voluntary scheme.

Karachi Electrical Supply Corporation (KESC) was sold out for only 16 billion Rupees. It failed to improve any electricity supply, on the contrary, there has been regular load shedding and most of the political parties have demanded to renationalize the KESC.

There has been a sever crises of agriculture due to the privatization of fertilizer public companies. Pak Saudi Fertilizer in Mir Pur Mathelo wan handed of to Fauji (military) Foundation in 2002 for just 8 billion Rupees. At the time, it annual profit was more than 4 billion Rupees. At Multan, Pak Arab Fertilizer was handed over to Arif Habib Group for only 13 billion Rupees. The price of the land of this factory was over 40 billion Rupees at the time of sale in 2006. On 15 July 2006, the largest Public sector factory Pak American Fertilizer was handed over for just 16 billion Rupees.

After the privatization of these factories, the price of a pack of fertilizer has gone up from Rupees 1300 to 3700 Rupees. This has put a massive extra burden on the peasants and all agricultural inputs have gone up.

Lahore historic Fallaties hotel is sold out for only 1.21 billion Rupees. It is located in the heart of Lahore with over 50 canal of precious land.

A large-scale corruption is witnessed in almost every deal done by the PC. There has been improvement of the quality of the good produced by these companies according to one independent research. There has been a massive price hike of the product produced by these privatized companies. The economy is in consistence decline. As a result, the trends of monopolizations have increased and the multi national companies have further monopolized the economy. These all facts negate the very justification of privatization.

Unfortunately, the present Pakistan Peoples Party government has continued the policies of the former Musharaf Shoukat regime. The former government proudly declared that three main pillars of the Pakistan so called economic growth rest on liberalization, deregulation and privatization. The PPP government has no different options than these three.

The new finance minister of PPP has been the chairperson of Privatization Commission and minister privatization during the previous two periods of Benazir Bhutto government (1988-90, 1994-1996). He declared on 30 April 2008 that we have learned a lot from our previous experiences and we will do a “clean” privatization. He also tried to justified privatization as “pro worker and pro people”.

The issue is not of clean or corrupt privatization. The process it self is anti worker and anti people as has the experience shown in Pakistan and internationally. The result has been that it has promoted unemployment, price hike, monopolization, low quality, inefficiency and huge profits for the rich.

Under Nawaz Sharif power period from 1990-1993, it was declared that proceeds of privatization will be distributed equally for defense, repayment of the foreign loans and social welfare. The Nawaz Sharif government did not practice this formula but at least that was the declared purpose. Under Musharaf Shoukat Aziz, this formula was changed and it was made clear that 90 percent of the income will go for the repayments of the foreign debts. The rest of 10 percent would be used for expenditures Privatization Commission and social welfare.

The Musharaf Shaukat regime earned 2.5 billion Dollars during 2006-2007. The target for the next year was around 3.5 billion Dollars. If the chief justice of Supreme Court of Pakistan had not stopped the privatization of Pakistan Steel Mills Karachi in 2006, the former regime would have sold most of the public institutions on throwaway prices. This would have been like selling Pakistan.

Still, the website of Privatization Commission updated in March 2008 announces the planned privatization of Pakistan Railways, Pakistan International Airlines (PIA), State Life Insurance Corporation, Oil and Gas Development Corporation, Sui Northern and Sui Southern Gas Companies, Faisalabad Electric Supply Corporation, Peshawar Electric Supply Corporation, National Fertilizer Corporation, Port Qasim Authority, Civila Aviation Authority, Karachi Port Trust, Printing Corporation of Pakistan, All Utility Stores and Corporation, Rice Export Corporation, Cotton Export Corporation and Convention Center Islamabad.

We demand from PPP government that it stop the process of privatization. An independent commission should be established to investigate the corruption involved in the previous privatizations. Abolish the Privatization Commission and Privatization Ministry. The Protection of Economic Reform Ordinance should be withdrawn. The Ordinance gives constitutional protection to the process of privatization.

Here are some facts

According to the Privatisation Ordinenece 2000, the purpose of privatization is Pakistan poverty alleviation and repayments of foreign debts. During 15 years of privatization in Pakistan, these two purposes have not been accomplished. When privatization started in 1991, the foreign debt was 23.323 billion Dollars. Now, in 2008, it has gone up to 45 billion Dollars. While internal debts are on ever increase. Poverty has increased according to all the surveys by government and independent organizations. It is estimated that over 45 percent of Pakistan population lives under poverty line. The national growth of economy during the previous decade (1981-1991) has been on everage 6.7 perecent. However, during the decade of privatization (1991-2001), it has been reduced to 4.4 percent.

The direct negative impact of privatization has been seen on working class. 600.000 workers has lost their jobs during the 15 years of privatization from the institutions that has been privatized. Most of privatized factories work on contract system. There are no permanent jobs in these factories. Labour patron have been changed the privatization has pushed flood of informal sector. A swear exploitation of workers particularly women workers is taking place in informal sector. No labour laws has been imposed in informal sector. According to the report of Public Inquiry Committee of National parliament 2002, there is no clue of 80 billion Rupees earned by Privatization Commission.

The Privatization process help create cartels. 5 large cartels has been established during the last 10 years which has looted the masses on unprecedented level. They are

* Oil cartel based on 10 oil companies,

* Brokerage cartel based on 4 groups,

* Auto mobile cartel based on 3 companies,

* Sugar cartel based on 24 companies,

* Cement cartel based on 10 companies.

The creation and effective functioning of these cartel has resulted an unprecedented price hike and an incredible profits of the companies associated with these cartel. The privatization process in Pakistan has weakened the trade union movement as well. The membership is on ever decline. The membership of the registered trade unions was 870000 in the early eighties, now in 2007, it has declined to 296250.

Privatization is a political weapon in the hands of the capitalists. It is not just an economic attack but a political attack as well. It stop the growth of social, political and class based consciousness. It reduces the social capital and increase the private capital. Instead of social need, it creats and increase the private greed.

The World Bank, Transparency International and other international institution talks of state corruption but never speak about the corruption involved in privatization process. The stories of corruption during the privatization process are in abundance in every country. But are ignored for political reasons. We are happy to hear the stories of re-nationalization of privatization companies in several Latin American countries. That is the only answer to be followed by all countries.

Privatization in Pakistan must stop otherwise the PPP government will also see the same results of price hike, unemployment and monopolization of economy in Pakistan thus loosing its remaining social basis among the working class of Pakistan. The Anti Privatization Alliance will do its best to stop the path of privatization by launching the movement and exposing the corruption and other irregularities in the process.

3 - Atta crisis Monday January 28, 2008 (1312 PST)

Chaudhry Pervaiz Elahi, has held the previous federal government responsible for the current wheat and power crises in the country. He said that the then industries minister Jehangir Tareen exported 600,000 tons of wheat at $200 per ton and then invited tenders for its import at $450 per ton.

4 - Accountability now in hands of PM’s buddies By Ansar Abbasi

Wednesday, July 18, 2007

ISLAMABAD: The country’s two topmost accountability apparatuses are all set to go into the hands of the prime minister’s buddies, who have been the financial wizards of the regime during the last several years.

The Secretary-General Finance, Nawid Ahsan, has recently taken over as the National Accountability Bureau (NAB) chairman, while his deputy in the Finance Ministry and incumbent Finance Secretary Tanvir Ali Agha is expected to take over as the Auditor-General of Pakistan. The government has already approved Agha’s appointment and he is expected to take oath of his office on 20 July.

The NAB and the Audit Department of Pakistan are the two prime accountability institutions in the country with the former enjoying extensive authority even to arrest and file a reference against an accused, while the latter is supposed to highlight irregularities, corruption etc in the government accounts through regular audits. The auditor-general’s reports are presented before the Public Accounts Committee of the National Assembly for scrutiny. The audit reports, at times, also provide the basis for NAB cases.

The catch in the key appointments in the NAB and PAD is that both the officers have been part and parcel of the present government’s financial policies and decision-making, including the Pakistan Steels privatization, for the last several years, but now they have been assigned the jobs where they are supposed to do the scrutiny of what they have been doing in the past.

A source wondered if these two officers would go for their own accountability. Many in the bureaucracy, however, believe that through these appointments, the government has subtly protected itself from being held accountable.

A source in the Presidency confided to this correspondent that there was a consideration to appoint a retired Supreme Court judge as the NAB chairman. But it was finally decided to appoint the time-tested Nawid Ahsan against this key post that in the past has always been held by serving or retired generals.

Ahsan, who had retired almost three years back, was enjoying post-retirement re-employment on contract. It should be mentioned here that the respected former NAB chairman Lt-Gen (retd) Shahid Aziz had resigned out of his frustration after he was barred by the government from probing matters that could have embarrassed the rulers.

At one point of time, he got so perturbed due to the government’s growing interference and media’s bashing that he held a background meeting with a selected group of journalists to explain his position and share his frustration.

The NAB was probing the sugar scam and wanted to explore the multi-billion dollar Karachi Stock Exchange crash but the bureau was directed by the government to take its hands off these cases. The sources said that the bureau had some concrete evidence about the involvement of some of the rulers, including the federal ministers, in these scams but it was helpless to proceed against the powerful and mighty.

A NAB source recently told this correspondent that every major scandal, involving any government player, was being capped by the top authorities. The source said that the bureau also conducted a probe in the oil price issue. “During the course of the probe, we were told by the government that we are interfering in the policy issues whereas we were actually focusing on the grey areas of policy implementations,” the source said, disclosing that the bureau had submitted its report before the prime minister in the mid of the last year but it was shelved there.

Generally, the NAB officials have very high opinion about the former chairman Shahid Aziz. It was during Aziz’s tenure that the policy of arresting the accused at preliminary stages of the probe was amended. Aziz had also de-linked the promotion of civil servants from the NAB probe. Many in the Bureau are not sure if the new chairman could make the bureau an impartial and neutral entity that, instead of being used by the government for arm-twisting of its opponents, should serve as a true accountability body.

The incumbent re-employed Finance Secretary Tanvir Ali Agha is replacing Muhammad Younis Khan, who is completing his five-year term on July 18, 2007. Before his appointment as the AGP, Khan had also worked as secretary finance under Shaukat Aziz.

The appointment of the finance secretary as the AGP, as reported earlier, is generally seen as a clear conflict of interest for the reason that the AGP is supposed to do the scrutiny of the Finance Ministry-led government’s financial spending. It is being asked how could the secretary finance-turned-auditor general justifiably do the audit of the government’s financial spending of the recent years when he himself was the secretary finance?

The outgoing AGP was appointed on July 18, 2002 after serving as finance secretary for over two years under Shaukat Aziz. Agha is a college friend of the premier and has seen new heights during Shaukat Aziz’s tenure as finance minister and the Prime Minister of Pakistan. He was initially sent to Washington as the country’s economic minister during Aziz days in the Finance Ministry. Later, Agha was nominated for a World Bank job.

He was lucky to have been promoted while being in the World Bank, and when returned to Islamabad, was appointed as special secretary finance. Nawid Ahsan, who was secretary finance when Agha came back from Washington, was later made secretary general finance that led to the appointment of Agha as full fledged secretary finance. Agha celebrated his 60th birthday last year but he was allowed to continue by the prime minister as a re-employed secretary.

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