While Islamic banking services are fast penetrating in Pakistan composed of 97 percent Muslim population-second only to Indonesia-that has been a real charm for bankers and financial institutions and slightly denting the conventional financial system global share-thereby least affected with the loud global banking industry crisis-its operational base over the foundation of conventional regulatory framework is restricting it in optimizing market share; in Pakistan which is little over 4 percent. The regulator of banking industry in Pakistan is facilitating the operation of Islamic banking through policy blends meanwhile it is working on plan to realign regulations in line with religious guided tenets as well as market dynamics to extend outreach of Islamic banking services.
With successful re-launch of Islamic banking in 2002 based on market driven economic principles instead of just legal or religious enunciations State Bank of Pakistan has designed a strategy paper recently especially keeping prospects of Islamic banking under considerations within local and international contexts and envisaged 12 percent market share of Islamic banking industry for 2012. Supporting two main objectives: to design flexible and locally as well as internationally acceptable regulatory framework; and to establish Shariah compliance mechanism in conformity with global best financial practices extension of outreach, Shariah compliance mechanism, strengthening of regulatory framework, and capacity building and internal and external relations were strategies formulated by the central bank.
It says unlike past the re-launch gets further reinforcement to role out Shariah-compliance system from the market demands without disturbing the present time tested and effective regulatory framework until new system withstands recurrent trial and error exercises and following system be entirely meritorious and ‘market-led rather than solely through legal means or religious dictates’. Islamic finance explicitly prohibiting riba (interest) based transactions, permitting only trade based contracts requires certain changes in current institutional framework that has its inclination towards conventional financial system that follows contrast methodology to execute banking contracts.
There is similarity of objective and distinction of methodology in conventional and Shariah compliance banking according to the regulator. ‘To dispense economic efficiency and justice through efficient and equitable banking system is a shared objective.’ However, it safely consents with the prohibitive method of conventional financing. Catering to needs of particular segments of the society, the new approach has assimilated previous experiences of Islamic banking and imitated role models Malaysia and Bahrain which are leading Islamic finance economies. This will also aim at to attract investments from the world over in Islamic financial sector.
At present, although Islamic banking industry is providing financial solutions competitive to conventional system to a set of customers it has not achieved the position to complement the structure as presently it has in stock only 75 percent of total products being offered in conventional banking and despite potential not or limitedly reached in agriculture (0.0% borrowers), SME (1.5%), consumer sectors (especially housing loan 1.2%), and commodity financing (1.2%). Therefore, SBP is trying to broaden the horizon in which full potential of Islamic banking or financing is realized. Islamic finance seeks conversion to more risk sharing financial and equity based instruments and subscribes to variety of liability and asset management approaches. Changes it seeks in financial structure would not only lead wide range of diversification in solutions but also apparently bring into financial sector network underserved and inaccessible market.
A strategy concentrates on to extend reach of Shariah compliance financial products in urban areas as well rural and underserved regions through nurturing Islamic micro, agriculture, and SME finances. It is expected that these modes of financing will acquire 23.3 percent share of overall Islamic financing by 2012. Since all past attempts to remove interest banking were rigid and nonflexible to dynamic needs of the market, they failed to record considerable growth in Islamic financial sector despite that Pakistan was among three countries in the world which introduced non-interest banking transactions at national level in 60s. The Banking Companies Ordinance 1962 was amended to accommodate such transactions.
Proponents of need-based IBIs believe that it is an element of flexibility in terms of products, instruments, and Shariah compliance methodology that has enabled Islamic finance sector to get hold of substantial space within a short span of time. From end 2003 when first full fledged Islamic banking license was granted and three conventional banks were running Islamic window operations from branches to closure of FY08, a significant growth was recorded in deposit and asset base. Till end of FY08 six banks completely involved in Islamic banking with entire industry network of 330 branches spreading across 50 various cities and towns nationwide and total assets of Islamic banking industry was over Rs. 255 billion, equivalent to 4.5 percent of total banking assets.
The performance of deposits, assets, and investment in IBIs of Pakistan has been remarkable and rapid as compared to other nations. For instance, Malaysia Islamic banking captured 13 percent market share in 25 years. First Islamic bank started operation in Malaysia in 1983. Similarly, IBIs in Indonesia has 1.7 percent share in banking industry even though Islamic banking was embarked on in earlier 90s. The deposits in IBIs of Pakistan constitute highest portion in maintaining capital adequacy and seldom fall below 60 to 70 percent. Besides, over a period of time increasing level of saving and fixed deposits shows rising trust of clientele.
Among other essential line of actions the SBP strategy would strengthen coordination with other policy making institutions to underpin foundation of consolidated regulatory framework across the broad spectrum of all sectors of Islamic financial industry. Capacity building of Shariah Board issuing rulings about business by inclusion of Islamic economics experts will help formulation of regulations and its implementation. Importantly, this may be instrumental in establishment of Islamic benchmarks for pricing liquidity instruments.
Thursday, January 22, 2009
Prospects of Pakistan getting EU GSP+ status
While Pakistan’s prime minister Yusuf Raza Gillani has appealed European Union to assign Generalized System of Preferences plus (GSP+) status to Pakistan in order to provide the country’s products greater access in EU market, the request seemed to be fruitless and probably partially entertained given the finalization of list of GSP plus beneficiaries; yet opportunity of inclusion of Pakistan in the midway of three year period (2009-11) is open. In addition, the commission is still investigating the eligibility of Sri Lanka and El Salvador for the tariff preferences.
Last week in a meeting with visiting Swedish foreign minister Carl Bildt prime minister has formally sought support of Sweden that will assume the EU presidency by July 2009 in underpinning Pakistan’s entry in to the list of beneficiaries of GSP plus regulations effective from January 2009, application date for which was expired in October this year. But, consideration to application will be undertaken in mid 2010. While Swedish foreign minister who has also been premier of this western European country from 1991-94 did not respond to the request, he assured him of Swedish support in the EU to help Pakistan cope up with present economic difficulties, emphasizing issues related to terrorism and law and order and Sweden assistance to equip law enforcement agencies for meeting security challenges and prop up Pakistan’s stance against terrorism.
The focus point of his talk is quite comprehensible as EU GSP system grants tariff benefits to those economies which are obliging certain conventions of ILO, UN, guidelines of global environment protection, and other predefined rules. It has not included arrangements for countries affected with militancy or social crimes.
Generalized system of preferences introduced in 1970s provides developing and least developed nations with tariff preferences so that they enhance revenue in international trade through imports. Factoring in as more as 100 percent preferential margins for non-sensitive products that do not afflict material injury to EU industry these trade preferences unfold on the bases of extent of vulnerability of countries. Briefly, different special incentive arrangements in shape of reduction and concession of import duties help beneficiaries to improve governance, eradicate poverty and promote sustainable development. It is said that abiding by the rules of WTO preferences ensure that nation’s common trade policy be consistent with the common development policy.
Recently, EU has assigned duty free access to products from 16 countries vetting and implementing certain ILO and UN conventions. With extension in tariff advantages available in GSP, the GSP plus system has provided these developing nations with benefits across 6400 tariff lines.
After the enlargement of EU block with entry of 10 new members in May 2004, the block has become a huge, lucrative market for large numbers of exporting countries across the world. Generalized plan regulations are rolling out tremendous opportunities for developing nations with manageable resources and productive manufacturing and agriculture industries to expand volume of their exportation and product line and range across 25 destinations of EU that observes suspension of common custom duties in general arrangement of GSP plus depending on the sensitivity of community products to importing products. Wide range of products is totally or partially exempted from import duties, thereby leveraging optimal price competitiveness in EU market. Despite that few agriculture components do not enjoy heavy tariff benefits, the block is still the world's biggest importer of agricultural products from developing countries, importing more than the United States, Canada and Japan.
While benefits are enormous, beneficiaries equally face temporary withdrawal in case of infringement of rules governing external trade of the block. The embargo on Pakistan fisheries in EU market was in line with contravention of rules, causing heavy loss to country’s sea food export revenue. Normally, withdrawal of GSP status takes seriously in account adherence of beneficiaries to rules regarding fisheries and fisheries resources. In past, Pakistan was dispossessed of GSP insignia because of its alleged violation of regulation and owing substantially to lobbying of India which raised hue and cry over the granting of GSP to 12 countries including Pakistan.
The EU was apprised of its inadvertent overriding of rules inscribed in the constitution of world trade organization through the conferment. The complaint was that Pakistan and Guatemala were dumping ethyl alcohol which according to Committee of Industrial Ethanol Producers was afflicting material injury to EU industry. The lost to Pakistan’s ethanol exports heightened following the withdrawal as it was reported that two out of seven distillers were closed down due to drawdown in output demands and its uncompetitive price following restoration of duty levies. Pakistan has been a largest exporter of ethanol (50 million liters), second after Brazil (55 million liters), to EU. Excluding special arrangement for combating drug trafficking replacement of anti drug regulations with new GSP plus system has not Pakistan gotten entry afterwards.
European countries account for 20 percent of world import and export and have highest portion in total exports from Pakistan. Both eastern and western European countries imported $5.5 billion worth of products from Pakistan in FY08. And, in last seven years 10 percent CAGR has been recorded in the export volume. The export growth rate may be dampened by contraction in buying of products exported from Pakistan, but the intensity will not likely to eat away major share. In spite of that, export to EU needs to increase further.
As regulations determine the selection of beneficiary qualification of Pakistan in EU GSP plus regime depends on amendments or induction of parameters covering the vulnerability of Pakistan to bouts of terrorism. Given the present criteria, otherwise, it is too difficult to foresee minus import duties export to EU. Apart from this, trade volume and economic situation in the country is not as worst as to attract special incentives or trade supports. The current list of GSP plus beneficiaries comprises of far more economically deprived least developed countries of the world.
Last week in a meeting with visiting Swedish foreign minister Carl Bildt prime minister has formally sought support of Sweden that will assume the EU presidency by July 2009 in underpinning Pakistan’s entry in to the list of beneficiaries of GSP plus regulations effective from January 2009, application date for which was expired in October this year. But, consideration to application will be undertaken in mid 2010. While Swedish foreign minister who has also been premier of this western European country from 1991-94 did not respond to the request, he assured him of Swedish support in the EU to help Pakistan cope up with present economic difficulties, emphasizing issues related to terrorism and law and order and Sweden assistance to equip law enforcement agencies for meeting security challenges and prop up Pakistan’s stance against terrorism.
The focus point of his talk is quite comprehensible as EU GSP system grants tariff benefits to those economies which are obliging certain conventions of ILO, UN, guidelines of global environment protection, and other predefined rules. It has not included arrangements for countries affected with militancy or social crimes.
Generalized system of preferences introduced in 1970s provides developing and least developed nations with tariff preferences so that they enhance revenue in international trade through imports. Factoring in as more as 100 percent preferential margins for non-sensitive products that do not afflict material injury to EU industry these trade preferences unfold on the bases of extent of vulnerability of countries. Briefly, different special incentive arrangements in shape of reduction and concession of import duties help beneficiaries to improve governance, eradicate poverty and promote sustainable development. It is said that abiding by the rules of WTO preferences ensure that nation’s common trade policy be consistent with the common development policy.
Recently, EU has assigned duty free access to products from 16 countries vetting and implementing certain ILO and UN conventions. With extension in tariff advantages available in GSP, the GSP plus system has provided these developing nations with benefits across 6400 tariff lines.
After the enlargement of EU block with entry of 10 new members in May 2004, the block has become a huge, lucrative market for large numbers of exporting countries across the world. Generalized plan regulations are rolling out tremendous opportunities for developing nations with manageable resources and productive manufacturing and agriculture industries to expand volume of their exportation and product line and range across 25 destinations of EU that observes suspension of common custom duties in general arrangement of GSP plus depending on the sensitivity of community products to importing products. Wide range of products is totally or partially exempted from import duties, thereby leveraging optimal price competitiveness in EU market. Despite that few agriculture components do not enjoy heavy tariff benefits, the block is still the world's biggest importer of agricultural products from developing countries, importing more than the United States, Canada and Japan.
While benefits are enormous, beneficiaries equally face temporary withdrawal in case of infringement of rules governing external trade of the block. The embargo on Pakistan fisheries in EU market was in line with contravention of rules, causing heavy loss to country’s sea food export revenue. Normally, withdrawal of GSP status takes seriously in account adherence of beneficiaries to rules regarding fisheries and fisheries resources. In past, Pakistan was dispossessed of GSP insignia because of its alleged violation of regulation and owing substantially to lobbying of India which raised hue and cry over the granting of GSP to 12 countries including Pakistan.
The EU was apprised of its inadvertent overriding of rules inscribed in the constitution of world trade organization through the conferment. The complaint was that Pakistan and Guatemala were dumping ethyl alcohol which according to Committee of Industrial Ethanol Producers was afflicting material injury to EU industry. The lost to Pakistan’s ethanol exports heightened following the withdrawal as it was reported that two out of seven distillers were closed down due to drawdown in output demands and its uncompetitive price following restoration of duty levies. Pakistan has been a largest exporter of ethanol (50 million liters), second after Brazil (55 million liters), to EU. Excluding special arrangement for combating drug trafficking replacement of anti drug regulations with new GSP plus system has not Pakistan gotten entry afterwards.
European countries account for 20 percent of world import and export and have highest portion in total exports from Pakistan. Both eastern and western European countries imported $5.5 billion worth of products from Pakistan in FY08. And, in last seven years 10 percent CAGR has been recorded in the export volume. The export growth rate may be dampened by contraction in buying of products exported from Pakistan, but the intensity will not likely to eat away major share. In spite of that, export to EU needs to increase further.
As regulations determine the selection of beneficiary qualification of Pakistan in EU GSP plus regime depends on amendments or induction of parameters covering the vulnerability of Pakistan to bouts of terrorism. Given the present criteria, otherwise, it is too difficult to foresee minus import duties export to EU. Apart from this, trade volume and economic situation in the country is not as worst as to attract special incentives or trade supports. The current list of GSP plus beneficiaries comprises of far more economically deprived least developed countries of the world.
Bolstering IT for city district affairs management
Since its birth governing system of Pakistan has been highly dependent over the workmanship of men and files and despite convenient and timesaving substitute given by the electronic revolution to expedite manual works slow or uninspiring efforts have been taken to minimize the dependence level. The reasons are many ranging from lack of technical savvy workforce which could adapt to information technology enabled environment to laggardness which hindered the thrust to become upgradeable with the changing demands of society.
There is no official record available which can present accurate percentage of utilization of latest telecom and IT technologies in running government affairs, it can safely presume by observing the clerical procedures in various government departments that there are numerous activities still dealt with age-old, tedious approaches. Federal government has started several projects to promote information technology at federal and provincial levels but all-out efforts are missing to bolster blessing of technology for the betterment of society and economy. The sluggish admissibility of government workforce to new technologies has been one of the prime causes behind low progress of electronic age in governing system. At district levels, the situation is not entirely dissimilar.
However, city district government Karachi under the leadership of former Sindh IT minister and present City Nazim Mustapha Kamal is focused to promote information technology in all 16 departments of the district government, 18 towns, and 178 union councils, said Syed Mumtaz-ul-Haque Executive District Officer Information Technology, CDGK. City Nazim is giving special attention to technological advancement in government workings and to enhance IT usage in district departmental affairs.
His department is computerizing records of various departments, he said while talking to PAGE. The volume of data is huge, but he says “through IT cells in district governed departments it is consistently gathering data on computers”. IT cells are linked with the main computer in IT department which also undertakes online process and computerization of land record of daily transactions known as current affairs of primarily three schemes including North Nazimabad, North Karachi, and Gulistan-e-Jauhar out of total 22 in Karachi. From allotment, possession, transfer, to mutation orders are all processed through computers, he says.
Heading district office IT since two years, Mumtaz-ul-Haq believed that the pace of technological advancement in district governing system is satisfactory. He said, “IT is being extensively harnessed to provide maximum public amenities and to redress civic problems”. “Within Civic Centre 700 plug and points are ready to give internet access to officials in various departments. They are provided with fibre optics connection”, underscored Mumtaz. Running personal information system, the department maintains pay rolls and information of 27,000 to 28,000 employees directly employed by city government Karachi.
The advent of electronic age has opened a new window to the world. On one hand fast development in telecommunication has shortened global distance and computerization has encapsulated tons of information in microchip on the other. “Since we realize the essentiality of IT in governance and facilitation of citizens, we conduct training workshops for capacity building of our officials to make them aware of technology and upgrade them technically in accordance with contemporaneous developments. All towns are interconnected and exchange updates with master computers in IT head office”, he said.
‘Our motto is to serve people and to this account we have installed 50 close circuit cameras on two main corridors in the city. The purpose is to monitor ongoing activities. Command control system is also keeping surveillance on traffic movement through these video cameras’. The project has been awarded ISO 9001.
When asked about availability of resources for IT infrastructure deployment, he answered human resource was a constraint but financially the IT projects were safe.
Information technology group of offices receive daily 300 to 400 complaints and suggestions of citizens about civic problems and issues from within Pakistan and outside the country because of the convenient recording mechanism via telephone and website. “IT department has 50-seats call centre to collect citizen queries which can be posted through universal access number 1339 while city government website has a Performa to gather feedbacks/complaints about the various departments including KW&SB working under the district government”, he explained. The call agents afterwards forward these responses to departments for resolution. The easy-to-post mechanism requires complainer just to submit names of his/her town, union council, and any landmark of the area in order for us to resolve the issue.
Talking about the future plans, he said induction of IT and IT enabled services to perform works in various departments in CDGK would be a prime objective. “Each employee should be taking assistance of computer to execute his or her job. Every person should be efficient, dedicatedly involved in improving quality of working”, he added. Recognition of incumbent duties has utmost importance in giving quality performance as well. “We will keep working to upgrade customer facilitation services,” he said.
The future plans include construction of multi storied IT Tower having 10,000-seats call centers, parking space for 2500 cars, commercial offices, auditorium with 3,000 heads capacity, conference halls, restaurants, etc.; computerization of district governed hospitals, revenue land records, remaining schemes of land management; establishment of IT cells in all departments and state of the art data warehouse.
It is however difficult to predict how long it would take to scramble manual data interned in pile of files since decades, “I surmise upon the determined seriousness of city government IT department in computerization of records that computer assistance in affairs would substantially be expanded”, he concluded.
There is no official record available which can present accurate percentage of utilization of latest telecom and IT technologies in running government affairs, it can safely presume by observing the clerical procedures in various government departments that there are numerous activities still dealt with age-old, tedious approaches. Federal government has started several projects to promote information technology at federal and provincial levels but all-out efforts are missing to bolster blessing of technology for the betterment of society and economy. The sluggish admissibility of government workforce to new technologies has been one of the prime causes behind low progress of electronic age in governing system. At district levels, the situation is not entirely dissimilar.
However, city district government Karachi under the leadership of former Sindh IT minister and present City Nazim Mustapha Kamal is focused to promote information technology in all 16 departments of the district government, 18 towns, and 178 union councils, said Syed Mumtaz-ul-Haque Executive District Officer Information Technology, CDGK. City Nazim is giving special attention to technological advancement in government workings and to enhance IT usage in district departmental affairs.
His department is computerizing records of various departments, he said while talking to PAGE. The volume of data is huge, but he says “through IT cells in district governed departments it is consistently gathering data on computers”. IT cells are linked with the main computer in IT department which also undertakes online process and computerization of land record of daily transactions known as current affairs of primarily three schemes including North Nazimabad, North Karachi, and Gulistan-e-Jauhar out of total 22 in Karachi. From allotment, possession, transfer, to mutation orders are all processed through computers, he says.
Heading district office IT since two years, Mumtaz-ul-Haq believed that the pace of technological advancement in district governing system is satisfactory. He said, “IT is being extensively harnessed to provide maximum public amenities and to redress civic problems”. “Within Civic Centre 700 plug and points are ready to give internet access to officials in various departments. They are provided with fibre optics connection”, underscored Mumtaz. Running personal information system, the department maintains pay rolls and information of 27,000 to 28,000 employees directly employed by city government Karachi.
The advent of electronic age has opened a new window to the world. On one hand fast development in telecommunication has shortened global distance and computerization has encapsulated tons of information in microchip on the other. “Since we realize the essentiality of IT in governance and facilitation of citizens, we conduct training workshops for capacity building of our officials to make them aware of technology and upgrade them technically in accordance with contemporaneous developments. All towns are interconnected and exchange updates with master computers in IT head office”, he said.
‘Our motto is to serve people and to this account we have installed 50 close circuit cameras on two main corridors in the city. The purpose is to monitor ongoing activities. Command control system is also keeping surveillance on traffic movement through these video cameras’. The project has been awarded ISO 9001.
When asked about availability of resources for IT infrastructure deployment, he answered human resource was a constraint but financially the IT projects were safe.
Information technology group of offices receive daily 300 to 400 complaints and suggestions of citizens about civic problems and issues from within Pakistan and outside the country because of the convenient recording mechanism via telephone and website. “IT department has 50-seats call centre to collect citizen queries which can be posted through universal access number 1339 while city government website has a Performa to gather feedbacks/complaints about the various departments including KW&SB working under the district government”, he explained. The call agents afterwards forward these responses to departments for resolution. The easy-to-post mechanism requires complainer just to submit names of his/her town, union council, and any landmark of the area in order for us to resolve the issue.
Talking about the future plans, he said induction of IT and IT enabled services to perform works in various departments in CDGK would be a prime objective. “Each employee should be taking assistance of computer to execute his or her job. Every person should be efficient, dedicatedly involved in improving quality of working”, he added. Recognition of incumbent duties has utmost importance in giving quality performance as well. “We will keep working to upgrade customer facilitation services,” he said.
The future plans include construction of multi storied IT Tower having 10,000-seats call centers, parking space for 2500 cars, commercial offices, auditorium with 3,000 heads capacity, conference halls, restaurants, etc.; computerization of district governed hospitals, revenue land records, remaining schemes of land management; establishment of IT cells in all departments and state of the art data warehouse.
It is however difficult to predict how long it would take to scramble manual data interned in pile of files since decades, “I surmise upon the determined seriousness of city government IT department in computerization of records that computer assistance in affairs would substantially be expanded”, he concluded.
Review of July-Nov imports 2008
First five months of current fiscal year witnessed flight of $15.23 billion from the country in lieu of payments made against classified importation as opposed to $12.52 billion in the corresponding period of last fiscal year.
Followed by food, agriculture and chemical goods, textile, transport and allied items, different financial and other services, and petroleum products and machinery have mainly escalated import bill July-Nov FY09. While in aggregate $5.68 billion was paid for importing crude and petroleum products, $2.27 billion was transferred across border for purchase of power generating, textile, construction and mining, electrical, and agriculture machineries and for importing telecom apparatuses including mobile phones.
During the period under review mobile phone import declined sharply to $84 million from $185 million in the same period of last fiscal year. Overall import in telecom sector was decelerated which is evident from the fact that in contrast to its earlier import bill of $584 million July-Nov FY09 import for telecom amounted $319 million. Similarly, a slight decrease was registered in agriculture machineries import which came down to $49 million from $65 million. Alternatively, in machinery group cumulative importation of all other heads tended to increase import payment, such as power generating machinery to $483 million from $356 million; textile machinery to $193 million from $166 million; construction and mining machinery to $45 million in July-Nov FY09 from $28 million in the similar period FY08.
According to provisional statistics compiled by the State bank, food group caused drawdown of $1.85 billion from foreign reserves during the initial five months of current financial year as opposed to $1.13 billion in corresponding months of last fiscal year. A staggering rise was recorded in import payment against raw wheat which worth $678 million was imported in five months whereas only $16 million was spent on its import previously. Except pulses, soyabean oil, sugar, and milk all other food items depicted rise in import bill in July-Nov FY09 over July-Nov FY08. Pulses payment was cut down to $58 million from $75 million, soyabean oil to $16 million from $36 million, sugar to $3 million from $7 million, and milk and cream to $29 million from $33 million. Specifically dry fruits soared import bill to $23 million from $21 million, tea to $92 million from $68 million, spices to $22.8 million from $22.6 million, and palm oil to $708 million from $517 million.
Agriculture products were important stimulants to outflow of reserves in first five months of the current fiscal year. In this side, total import amounted to $2.33 billion little up from $2.10 billion earlier. Although fertilizer bill declined more than double to $157 million from $377 million insecticides, plastic materials, medicinal and other products caused surge in import payment to $39 million from $37 million, to $541 million from $507 million, to $183 million from $140 million, and to $1.41 billion from $1.03 billion, respectively.
Some of textile items continued to come from foreign markets and their inclination towards importation in the period under review was relatively high. As compared to previous bill of $555 million textile items imported from outside the country raised the bill to $593 million in July-Nov FY09. Mainly, synthetic fibre and worn clothing pushed up textile group import bill in the period. Of that, import payment against synthetic fibre was precipitously raised to $137 million from an earlier $94 million. More in percentage wise worn clothing soared bill to $7 million from $2 million. Apart from them, raw cotton and synthetic and artificial silk yarn mitigated dollars outflow to $275 million from $279 million and to $95 million from $104 million respectively.
In addition, reduction in import payment was also registered in transport and allied products. During July-Nov FY09 import of such products aggregately cost government $473 million considerable decrease from $507 million in the similar period FY08. Separately, complete knocked down kits of buses, trucks, heavy vehicles, motor cycles and cars increased burden of payments to $271 million from $251 million. Aircraft, ships and boats also jacked up the bill to $90 million from an earlier $59 million. Drastic fallout in import of complete built units trimmed the load of import payments to $60 million from $138 million.
Significant hop in insurance and freight services pulled up the payment to $1.2 billion in the first five months of this fiscal year from $997 million in a comparable interval of preceding fiscal year. While zero data was calculated for gold import in metal group cumulative $856 million was spent in comparison to $904 million last fro imports. Apparently, in duality iron and steel were metals creating hike in import payment to $508 million from $473 million. Import bill of iron and steel scrap plunged to $182 million from $194 million. Payment against aluminum and wrought went flipping down to $47 million from $74 million. Likely, bill of all other metals and artificial dropped to $117 million from $162 million.
The lowest impact exerted on July-Nov FY09 import payment was of $285 million by rubber crude, rubber tyres and tubes, wood and cork, jute, and paper and paper board. Jute import was almost doubled during the period as its payments showed jump to $26 million from an earlier $14 million. A drop in import payment of rubber tyres and tubes to $39 million from $56 million was catalogued in the statistics.
Petroleum products and food items were the real stirrer behind arousal of import payments albeit cost cutting measures brooded over inputs essential for manufacturing industry throughout the period.
Followed by food, agriculture and chemical goods, textile, transport and allied items, different financial and other services, and petroleum products and machinery have mainly escalated import bill July-Nov FY09. While in aggregate $5.68 billion was paid for importing crude and petroleum products, $2.27 billion was transferred across border for purchase of power generating, textile, construction and mining, electrical, and agriculture machineries and for importing telecom apparatuses including mobile phones.
During the period under review mobile phone import declined sharply to $84 million from $185 million in the same period of last fiscal year. Overall import in telecom sector was decelerated which is evident from the fact that in contrast to its earlier import bill of $584 million July-Nov FY09 import for telecom amounted $319 million. Similarly, a slight decrease was registered in agriculture machineries import which came down to $49 million from $65 million. Alternatively, in machinery group cumulative importation of all other heads tended to increase import payment, such as power generating machinery to $483 million from $356 million; textile machinery to $193 million from $166 million; construction and mining machinery to $45 million in July-Nov FY09 from $28 million in the similar period FY08.
According to provisional statistics compiled by the State bank, food group caused drawdown of $1.85 billion from foreign reserves during the initial five months of current financial year as opposed to $1.13 billion in corresponding months of last fiscal year. A staggering rise was recorded in import payment against raw wheat which worth $678 million was imported in five months whereas only $16 million was spent on its import previously. Except pulses, soyabean oil, sugar, and milk all other food items depicted rise in import bill in July-Nov FY09 over July-Nov FY08. Pulses payment was cut down to $58 million from $75 million, soyabean oil to $16 million from $36 million, sugar to $3 million from $7 million, and milk and cream to $29 million from $33 million. Specifically dry fruits soared import bill to $23 million from $21 million, tea to $92 million from $68 million, spices to $22.8 million from $22.6 million, and palm oil to $708 million from $517 million.
Agriculture products were important stimulants to outflow of reserves in first five months of the current fiscal year. In this side, total import amounted to $2.33 billion little up from $2.10 billion earlier. Although fertilizer bill declined more than double to $157 million from $377 million insecticides, plastic materials, medicinal and other products caused surge in import payment to $39 million from $37 million, to $541 million from $507 million, to $183 million from $140 million, and to $1.41 billion from $1.03 billion, respectively.
Some of textile items continued to come from foreign markets and their inclination towards importation in the period under review was relatively high. As compared to previous bill of $555 million textile items imported from outside the country raised the bill to $593 million in July-Nov FY09. Mainly, synthetic fibre and worn clothing pushed up textile group import bill in the period. Of that, import payment against synthetic fibre was precipitously raised to $137 million from an earlier $94 million. More in percentage wise worn clothing soared bill to $7 million from $2 million. Apart from them, raw cotton and synthetic and artificial silk yarn mitigated dollars outflow to $275 million from $279 million and to $95 million from $104 million respectively.
In addition, reduction in import payment was also registered in transport and allied products. During July-Nov FY09 import of such products aggregately cost government $473 million considerable decrease from $507 million in the similar period FY08. Separately, complete knocked down kits of buses, trucks, heavy vehicles, motor cycles and cars increased burden of payments to $271 million from $251 million. Aircraft, ships and boats also jacked up the bill to $90 million from an earlier $59 million. Drastic fallout in import of complete built units trimmed the load of import payments to $60 million from $138 million.
Significant hop in insurance and freight services pulled up the payment to $1.2 billion in the first five months of this fiscal year from $997 million in a comparable interval of preceding fiscal year. While zero data was calculated for gold import in metal group cumulative $856 million was spent in comparison to $904 million last fro imports. Apparently, in duality iron and steel were metals creating hike in import payment to $508 million from $473 million. Import bill of iron and steel scrap plunged to $182 million from $194 million. Payment against aluminum and wrought went flipping down to $47 million from $74 million. Likely, bill of all other metals and artificial dropped to $117 million from $162 million.
The lowest impact exerted on July-Nov FY09 import payment was of $285 million by rubber crude, rubber tyres and tubes, wood and cork, jute, and paper and paper board. Jute import was almost doubled during the period as its payments showed jump to $26 million from an earlier $14 million. A drop in import payment of rubber tyres and tubes to $39 million from $56 million was catalogued in the statistics.
Petroleum products and food items were the real stirrer behind arousal of import payments albeit cost cutting measures brooded over inputs essential for manufacturing industry throughout the period.
Cellular mobile service industry in focus
The driving agent behind the phenomenal rise in rate of subscriptions of cellular services to four billion worldwide has presence in the developing markets that in recent years have witnessed stellar growth in wireless modes of communication. To this figure Pakistan’s latest share is insignificant however the country is among those markets which are potential target markets for telecom service providers seeking to expand their operations across region that has rapid growing population. Pakistan’s cellular sector remains a prioritized option for telecom operators for years who initially concentrated in urban localities to expand their services because of infrastructure availability.
Wireless local loop is considered as a suitable mode to them when they plan to step up in the underserved far flung areas around the country. The reason is simple and that is unavailability of basic network support system needed to mobile coverage. While operators invested in mobile infrastructure in rural areas, penetration ratio of cellular services there is not equivalent to that of urban areas.
Total cellular subscribers base in Pakistan has been emboldened with 89.5 million which is significant-note that it does not imply persons but SIMs one can have in possession maximum 10 at a time-despite decline in subscription over a last couple of months pushed by hike in regulatory duties on mobile phones and different taxes on cellular services. Telecom experts believe that additional levies have greatly dampened the growth of telecom sector in Pakistan as sale is in low-key.
The cellular subscription in July and September, 2008 has witnessed decline year on year. Few telecom stakeholders estimate zero growth in cellular industry during the period of July-October, 2008. While in July 1.3 million new connections were added, in the same month last year 1.8 million started using cellular services of different operators. Similarly, cellular subscription has declined by 69 percent in September year on year. According to Pakistan Telecommunication Authority (PTA) data, by July 2008, Mobilink was leading the market with 32 million subscribers, followed by Ufone with 18.36 million, denting gently behind Telenor that had 18.32 million subscriptions. Al Warid followed the suit by securing 15.77 million. The new entrant from China Zong became able to be recognized in the market soon after its appearance and choice of 4.4 million subscribers.
Despite low reach of cellular services in small villages and distanced areas, it is commonly believed that the market is on maturity stage because of negative growth in subscriptions. However, the trend is for shorter period of time as interconnection circuits and other supportive infrastructure in rural areas will expose cellular operators to overwhelming demands. Pakistan’s cellular mobile users are yet to use range of technologies e.g. 3G being in use in developed countries. The cost factor alienating customers of cellular services has to be analyzed in order to make widespread coverage.
Relatively the cost of making calls through cellular phones has increased following the imposition of levies and taxes. A prepaid card for cellular service bears general sales tax not only upon activation but tax also on each call. According to an estimate, government charges in total Rs. 31 on Rs. 100 prepaid card.
Registration of SIMs
Law enforcement agencies are worried about the detection of unknown calls and tracing of calls that are hoax-provoking miscommunication-and facilitating criminal activities by making covert conversations among or identities of miscreants. The issue was resolved slightly when PTA ordered all cellular service providers to scramble data of users and ensure issuance of SIMs upon production of computerized identity card. It was easier to say than to be done as there were umpteen of unidentified cellular service users, across Pakistan, who got hold of SIMs from roadside stalls.
Extending dates several times of notice asking CNICs of users, PTA might have been pushed by service providers which could not see impulse drawdown of market share once after suspension of connections by PTA. The authority has claimed recently that 10.5 million cellular connections have been blocked. As disconnection clearly implies minus in sales of services, presumably the act of PTA is softened and circumventing over minor peccadillo committed by roadside sellers of SIMs who still are not seeking identification of buyers.
Undefined license restrictions
Although PTCL has not been effective in landline service provision its subsidiary and second in lead in cellular market Ufone clasps a major share in cellular market and has been exhibiting competition to rivalries in number of specialized mobile services till the dropout of one of its services targeting niche. In Blackberry offers, probably Mobilink was a pioneer and single choice to customers, but after the entry of Ufone in this peculiar segment the Egyptian based company started receiving parted revenues from the market. It, however, again succeeded wriggle out the temporary intervention by substitution after the suspension of Ufone license in Blackberry segment by the PTA.
According to PTA which blocked the operation of Ufone blackberry services the company was into the operation without prior obtaining no-objection-certificate thereto. Many subscribers especially businesspersons suffered due to the sudden service halt either caused by intrepidity of the service provider that dared to embark into the business in absence of license in first place or ignorance of the regulator that knowingly circumvented ‘illegitimate’ product diversification of a known operator or didn’t clarify restricted class in the license agreement. In both cases time and money loses afflicted on users are incorrigible at least for the time being and incomprehensible is the negligence of apex regulator of telecommunication in the country.
Cellular industry in Pakistan has benefits for both telecom operators and subscribers if telecom operation is carried along with the fair market practices.
Wireless local loop is considered as a suitable mode to them when they plan to step up in the underserved far flung areas around the country. The reason is simple and that is unavailability of basic network support system needed to mobile coverage. While operators invested in mobile infrastructure in rural areas, penetration ratio of cellular services there is not equivalent to that of urban areas.
Total cellular subscribers base in Pakistan has been emboldened with 89.5 million which is significant-note that it does not imply persons but SIMs one can have in possession maximum 10 at a time-despite decline in subscription over a last couple of months pushed by hike in regulatory duties on mobile phones and different taxes on cellular services. Telecom experts believe that additional levies have greatly dampened the growth of telecom sector in Pakistan as sale is in low-key.
The cellular subscription in July and September, 2008 has witnessed decline year on year. Few telecom stakeholders estimate zero growth in cellular industry during the period of July-October, 2008. While in July 1.3 million new connections were added, in the same month last year 1.8 million started using cellular services of different operators. Similarly, cellular subscription has declined by 69 percent in September year on year. According to Pakistan Telecommunication Authority (PTA) data, by July 2008, Mobilink was leading the market with 32 million subscribers, followed by Ufone with 18.36 million, denting gently behind Telenor that had 18.32 million subscriptions. Al Warid followed the suit by securing 15.77 million. The new entrant from China Zong became able to be recognized in the market soon after its appearance and choice of 4.4 million subscribers.
Despite low reach of cellular services in small villages and distanced areas, it is commonly believed that the market is on maturity stage because of negative growth in subscriptions. However, the trend is for shorter period of time as interconnection circuits and other supportive infrastructure in rural areas will expose cellular operators to overwhelming demands. Pakistan’s cellular mobile users are yet to use range of technologies e.g. 3G being in use in developed countries. The cost factor alienating customers of cellular services has to be analyzed in order to make widespread coverage.
Relatively the cost of making calls through cellular phones has increased following the imposition of levies and taxes. A prepaid card for cellular service bears general sales tax not only upon activation but tax also on each call. According to an estimate, government charges in total Rs. 31 on Rs. 100 prepaid card.
Registration of SIMs
Law enforcement agencies are worried about the detection of unknown calls and tracing of calls that are hoax-provoking miscommunication-and facilitating criminal activities by making covert conversations among or identities of miscreants. The issue was resolved slightly when PTA ordered all cellular service providers to scramble data of users and ensure issuance of SIMs upon production of computerized identity card. It was easier to say than to be done as there were umpteen of unidentified cellular service users, across Pakistan, who got hold of SIMs from roadside stalls.
Extending dates several times of notice asking CNICs of users, PTA might have been pushed by service providers which could not see impulse drawdown of market share once after suspension of connections by PTA. The authority has claimed recently that 10.5 million cellular connections have been blocked. As disconnection clearly implies minus in sales of services, presumably the act of PTA is softened and circumventing over minor peccadillo committed by roadside sellers of SIMs who still are not seeking identification of buyers.
Undefined license restrictions
Although PTCL has not been effective in landline service provision its subsidiary and second in lead in cellular market Ufone clasps a major share in cellular market and has been exhibiting competition to rivalries in number of specialized mobile services till the dropout of one of its services targeting niche. In Blackberry offers, probably Mobilink was a pioneer and single choice to customers, but after the entry of Ufone in this peculiar segment the Egyptian based company started receiving parted revenues from the market. It, however, again succeeded wriggle out the temporary intervention by substitution after the suspension of Ufone license in Blackberry segment by the PTA.
According to PTA which blocked the operation of Ufone blackberry services the company was into the operation without prior obtaining no-objection-certificate thereto. Many subscribers especially businesspersons suffered due to the sudden service halt either caused by intrepidity of the service provider that dared to embark into the business in absence of license in first place or ignorance of the regulator that knowingly circumvented ‘illegitimate’ product diversification of a known operator or didn’t clarify restricted class in the license agreement. In both cases time and money loses afflicted on users are incorrigible at least for the time being and incomprehensible is the negligence of apex regulator of telecommunication in the country.
Cellular industry in Pakistan has benefits for both telecom operators and subscribers if telecom operation is carried along with the fair market practices.
Arresting spiraling inflation
Inflation or popularly known as price inflation-consumer price index-has assumed high proportions after the misbalance appeared in endogenous and exogenous causative factors and monetary management. Variable from country to country internal motivation occurs in Pakistan when money supply crosses over the target fixed at the time of annual budget designing, that’s why often monetary tightening is used by the State Bank of Pakistan as an anchor to tam the inflation as if it weaned on such a stance since long; while price rise of importing commodities in conjunction with exchange rate disparity pushes external pressure on domestic inflation.
One still can long for effectiveness of tool activated to control broad money supply despite that past attempt of change in rate has abysmally failed to yield any desirable result. The high inflation is somehow justified at the time when unanticipated fluctuation (upward trend) in prices of [importing] commodities dilutes the impact of interest rate surge-what was earlier excused by the central bank-but the current downward move in prices of non-food i.e. oil and food items like edible oil in international market has question mark hanging over the non-transmission of price decline on domestic rate of inflation which remained throughout July-November 2008 average 24.7 percent-a level startling to many who would think that downward trend in prices of commodities in international market should have reflected on the consumer and sensitive price indices. Rupee devaluation against basket of currencies made import cost dearly nonetheless.
Also this rate is unprecedented when compared to historical periods and exposing likelihood that annual target for FY09 of 11 percent will be unachievable. During the first five month of current fiscal year food inflation alone reached to 31.9 percent in a wide contrast to 11.5 percent in the similar duration of the last fiscal year. With almost same proportion non-food inflation in this period soared to 19.1 percent as opposed to 5.2 percent earlier in which overall inflation was recorded 7.8 percent.
Adviser to Prime Minister on Finance Shaukat Tarin has reassured in a press report that government is conversant of inflation spike and taking compatible courses of actions accordingly. Whatever actions that may be inexorable is a fact that government has no other option to arrest inflation than to increase interest rate-given the inherent structural weaknesses in Pakistan according to SBP-that brings alongside fear of growth slowdown and unemployment as repercussions and that in recurrence didn’t succeed to control spiraling inflation as well previously.
Governor State bank in a paper said that historical evidence showed Pakistan been high interest and high inflation economy and conceded ineffectiveness of policy rate for inflation control, attributing government borrowing as one of the causative factors offsetting impact of monetary measure over inflation. “Borrowing from central bank injects liquidity in the system through increased currency in circulation and deposits of the government with the banks without notice,” she noted and thus impact of tight monetary stance is weakened.
Interest rate rise discourages advances from banks by private and public sector borrowers, but is ensued a spell of slowdown in economic productivity, decelerating growth in industrial outputs. The affects vary industry to industry howsoever. Government has not other option also because of the IMF structural adjustment program that dictates inter alia removal of subsidies, trade-off to price instability; tax network expansion that government already did by increasing GST and PDL; and removal of energy subsidies. With synergy these all have stimulated CPI graph and deteriorated poverty situation in the country. According to Planning Commission poverty peaked to 40 percent, though Tarin calculated it around 28 percent.
Before civil war in America, inflation was popularly defined as excessive supply of currency in the market, but later on it was equally ascribed to rise in prices as currency devaluation or fluctuations in purchasing power of money caused by higher money supply directly raised shelf price of products.
Assuming the updated version that befits the prevailing nature of skyrocketing headline and core inflations in the country since foreign wave has gotten composure following the decline in prices of commodities and apparent restriction on government for taking administrative steps money supply management may have pacified intrusive inflation. Monetary tightening is inevitable for regaining macro economic and price stability, said governor in the paper and added it also has propensity towards pro-growth. Therefore, State bank has increased policy rate from 13.5 to 15 percent to restore macro economic stability and suppress demand pressure.
She said central bank required coordination with other policy making institutions as it didn’t operate in vacuum and sought amendments in fiscal responsibility and debt limitation act 2005. After 2005, external debts and liabilities and stress on fiscal position had State bank started nudging monetary policy rate. The debt service obligations, budgetary deficit and fiscal gap, and trade deficit triggered needs of government borrowing from banks, which is believed highly inflationary. Recording 20 percent change over the July-Nov FY08, trade deficit has swelled to $8.7 billion in the same period FY09 from $7.2 billion.
During the aforementioned period net government sector borrowing for budgetary support, commodity operations, and others was around 2.70 trillion rupees. From SBP only, it was Rs. 3.56 trillion. Out of that Rs. 2.63 trillion was alone for budgetary support whereas in whole 1HFY08 this support acquired Rs.1.81 trillion. There a significant difference between revenue collection and expenditures was evident in the period. Total revenue to GDP ratio was 2.9 percent as opposed to 3.9 percent total expenditures. This difference musters prudence of government in targeting expenditures. Non development expenditures should be reduced to cut short fiscal gap and avoid bank borrowing. One can accept government’s incapacity to hold back freefall of currency value, but can not overlook its authority over expenditures. So, administratively government can rein in inflation by rationalizing them. It must remove flaws from food supply system.
One still can long for effectiveness of tool activated to control broad money supply despite that past attempt of change in rate has abysmally failed to yield any desirable result. The high inflation is somehow justified at the time when unanticipated fluctuation (upward trend) in prices of [importing] commodities dilutes the impact of interest rate surge-what was earlier excused by the central bank-but the current downward move in prices of non-food i.e. oil and food items like edible oil in international market has question mark hanging over the non-transmission of price decline on domestic rate of inflation which remained throughout July-November 2008 average 24.7 percent-a level startling to many who would think that downward trend in prices of commodities in international market should have reflected on the consumer and sensitive price indices. Rupee devaluation against basket of currencies made import cost dearly nonetheless.
Also this rate is unprecedented when compared to historical periods and exposing likelihood that annual target for FY09 of 11 percent will be unachievable. During the first five month of current fiscal year food inflation alone reached to 31.9 percent in a wide contrast to 11.5 percent in the similar duration of the last fiscal year. With almost same proportion non-food inflation in this period soared to 19.1 percent as opposed to 5.2 percent earlier in which overall inflation was recorded 7.8 percent.
Adviser to Prime Minister on Finance Shaukat Tarin has reassured in a press report that government is conversant of inflation spike and taking compatible courses of actions accordingly. Whatever actions that may be inexorable is a fact that government has no other option to arrest inflation than to increase interest rate-given the inherent structural weaknesses in Pakistan according to SBP-that brings alongside fear of growth slowdown and unemployment as repercussions and that in recurrence didn’t succeed to control spiraling inflation as well previously.
Governor State bank in a paper said that historical evidence showed Pakistan been high interest and high inflation economy and conceded ineffectiveness of policy rate for inflation control, attributing government borrowing as one of the causative factors offsetting impact of monetary measure over inflation. “Borrowing from central bank injects liquidity in the system through increased currency in circulation and deposits of the government with the banks without notice,” she noted and thus impact of tight monetary stance is weakened.
Interest rate rise discourages advances from banks by private and public sector borrowers, but is ensued a spell of slowdown in economic productivity, decelerating growth in industrial outputs. The affects vary industry to industry howsoever. Government has not other option also because of the IMF structural adjustment program that dictates inter alia removal of subsidies, trade-off to price instability; tax network expansion that government already did by increasing GST and PDL; and removal of energy subsidies. With synergy these all have stimulated CPI graph and deteriorated poverty situation in the country. According to Planning Commission poverty peaked to 40 percent, though Tarin calculated it around 28 percent.
Before civil war in America, inflation was popularly defined as excessive supply of currency in the market, but later on it was equally ascribed to rise in prices as currency devaluation or fluctuations in purchasing power of money caused by higher money supply directly raised shelf price of products.
Assuming the updated version that befits the prevailing nature of skyrocketing headline and core inflations in the country since foreign wave has gotten composure following the decline in prices of commodities and apparent restriction on government for taking administrative steps money supply management may have pacified intrusive inflation. Monetary tightening is inevitable for regaining macro economic and price stability, said governor in the paper and added it also has propensity towards pro-growth. Therefore, State bank has increased policy rate from 13.5 to 15 percent to restore macro economic stability and suppress demand pressure.
She said central bank required coordination with other policy making institutions as it didn’t operate in vacuum and sought amendments in fiscal responsibility and debt limitation act 2005. After 2005, external debts and liabilities and stress on fiscal position had State bank started nudging monetary policy rate. The debt service obligations, budgetary deficit and fiscal gap, and trade deficit triggered needs of government borrowing from banks, which is believed highly inflationary. Recording 20 percent change over the July-Nov FY08, trade deficit has swelled to $8.7 billion in the same period FY09 from $7.2 billion.
During the aforementioned period net government sector borrowing for budgetary support, commodity operations, and others was around 2.70 trillion rupees. From SBP only, it was Rs. 3.56 trillion. Out of that Rs. 2.63 trillion was alone for budgetary support whereas in whole 1HFY08 this support acquired Rs.1.81 trillion. There a significant difference between revenue collection and expenditures was evident in the period. Total revenue to GDP ratio was 2.9 percent as opposed to 3.9 percent total expenditures. This difference musters prudence of government in targeting expenditures. Non development expenditures should be reduced to cut short fiscal gap and avoid bank borrowing. One can accept government’s incapacity to hold back freefall of currency value, but can not overlook its authority over expenditures. So, administratively government can rein in inflation by rationalizing them. It must remove flaws from food supply system.
Cyber crimes invoking harsh penalties
Email inbox what was once a hot source of information has been giving a deserted and emptied look ever since the imposition of dreaded cyber crime ordinance a section of which warns against occupation and dissemination of photo and information electronically without consent of a person, proving itself a hard bash on the freedom of information protracted illness in Pakistan.
Consent of a person to whom materials are linked is required before transmission. Emails and short messages derogatory to government officials and politicians are disallowed in order to protect the sanctity of a person. Interestingly, the ordinance came into force four days before the arrest of two prime suspects of foreign scam that allegedly caused flight of million of dollars foreign reserves from the country. November 06 was the date of promulgation of the ordinance and four days later on November 10 first arrest was made public. The charges on them were imposed also under a section of Prevention of Electronic Crimes ordinance, 2007. Sections 7, 8 and 20 of this ordinance are activated upon electronic fraud, forgery, and other offences committed with the help of electronic devise, computer, or any other electronic means.
Cyber crime investigation team of Federal Investigation Agency has found complementary role played by the electronic means in this money laundering case. It has identified circumstantial evidences from the main working stations of the money changers and substantiated occurrences of electronic fraud and forgery. Perhaps it barged into the systems by decrypting safe codes and hit upon transactions pertaining to money laundering.
Usually, physical transfer of foreign exchange or money transactions taking assistance of intermediaries that exclude formal conduits of banks are enumerated as illegal or Hawala/Hundi. Along with making loss to public monies, this type of money transportation causes evasion of huge foreign exchange from formal documentation of economic activities. Forged record of actual electronic transactions also wriggles out of economic statistics. Keeping in mind banking experts perplexed about the overriding legal invokes restricting limited foreign exchange transfer the offences of manipulation of electronic data or concealment of real statistics to government are no more avoiding reactions of the law and certain penalties.
The ordinance promulgated by the president is strictly dealing with electronic crimes that also include cyber stalking which means provocation electronically to vilify about a person and to fan propaganda against political leaders, government officials. Causing death of a person, cyber terrorism will reportedly be handled with an iron hand. Cyber terrorism is a unique epithet defining e-criminal activities that can become harmful or cost one life. The death is a maximum penalty for cyber terrorism. Imprisonment for a certain period of time and financial penalties can be effected following the prosecution. Spoofing also is declared punishable.
Often emails, blogs, and mobile massaging are considered as media to bottle up one’s opinion about a thing or a person freely without panic and people through them express their likes and dislikes with conviction. Seldom is the content based on fact. Yet sometimes the factual interpretation and revelation is rare in genre that turns out to be a never-before disclosure.
For journalists whose starter point to delve into a scramble for writing a story is piqued by hinting emails besides other sources. Anew legalities have likened to end of info age as now internet users and SMS maniacs have become more cautious in exchanging emails or messages, they fear, containing any material repugnant to cyber stalking section of the ordinance.
Hacking is no more a new term for computer generation. With the passage of time the definition of it is evolving. Generally, it is an attempt of a web user to sneak in to the private, prohibited premises of counterparts with or without ulterior motives. This is, of course, illegal according to all international canons. But, in some cases some nations use it as an effective weapon against their rivals. Genius minds are involved in hacking which exacts extra ordinary expertise of computer operators who have full comprehension of scripts inside software developments.
In many developed countries, using unregistered software is illegitimate and equivalent to damaging of patent rights of software designer. They are careful about intellectual proprietorship. At the other front in developing countries where cracking of software is commonly practiced and resorted to maneuver extension in license term, people are unwary of services values packed in software. They make pirated software in use to run the computer. Practically, we can not afford to pay hefty, regular cost incurred on purchase and renewal of software usage license. Pervious government realized this fact and tacitly permitted sale of pirated software despite hue and cry of a leading software developer.
For commercial point of view and in global arena where impartial application of rules is demanded this practice is somehow discouraging, but in societal and economic development, until market based price of software is determined, cracking is no longer a bane. At this evolutionary stage in IT progress, supporting approach can be instrumental in portioning space in the world cyber space. Pressurizing will only result into subjugation of natural positive implosion.
Prevention of cyber crime laws should be effective to nab malfunctions that are undermining the economy. People who are indulged in electronic crimes and misrepresenting their wealth should be brought before the court. It is sensible that the government should also show restraints in effectuating any principle that may wreak havoc to freedom of expression in the country. If not directly, the ordinance is inadvertently denting the freedom of information rights, guaranteed in the Article 19 of the constitution of Islamic Republic of Pakistan.
Consent of a person to whom materials are linked is required before transmission. Emails and short messages derogatory to government officials and politicians are disallowed in order to protect the sanctity of a person. Interestingly, the ordinance came into force four days before the arrest of two prime suspects of foreign scam that allegedly caused flight of million of dollars foreign reserves from the country. November 06 was the date of promulgation of the ordinance and four days later on November 10 first arrest was made public. The charges on them were imposed also under a section of Prevention of Electronic Crimes ordinance, 2007. Sections 7, 8 and 20 of this ordinance are activated upon electronic fraud, forgery, and other offences committed with the help of electronic devise, computer, or any other electronic means.
Cyber crime investigation team of Federal Investigation Agency has found complementary role played by the electronic means in this money laundering case. It has identified circumstantial evidences from the main working stations of the money changers and substantiated occurrences of electronic fraud and forgery. Perhaps it barged into the systems by decrypting safe codes and hit upon transactions pertaining to money laundering.
Usually, physical transfer of foreign exchange or money transactions taking assistance of intermediaries that exclude formal conduits of banks are enumerated as illegal or Hawala/Hundi. Along with making loss to public monies, this type of money transportation causes evasion of huge foreign exchange from formal documentation of economic activities. Forged record of actual electronic transactions also wriggles out of economic statistics. Keeping in mind banking experts perplexed about the overriding legal invokes restricting limited foreign exchange transfer the offences of manipulation of electronic data or concealment of real statistics to government are no more avoiding reactions of the law and certain penalties.
The ordinance promulgated by the president is strictly dealing with electronic crimes that also include cyber stalking which means provocation electronically to vilify about a person and to fan propaganda against political leaders, government officials. Causing death of a person, cyber terrorism will reportedly be handled with an iron hand. Cyber terrorism is a unique epithet defining e-criminal activities that can become harmful or cost one life. The death is a maximum penalty for cyber terrorism. Imprisonment for a certain period of time and financial penalties can be effected following the prosecution. Spoofing also is declared punishable.
Often emails, blogs, and mobile massaging are considered as media to bottle up one’s opinion about a thing or a person freely without panic and people through them express their likes and dislikes with conviction. Seldom is the content based on fact. Yet sometimes the factual interpretation and revelation is rare in genre that turns out to be a never-before disclosure.
For journalists whose starter point to delve into a scramble for writing a story is piqued by hinting emails besides other sources. Anew legalities have likened to end of info age as now internet users and SMS maniacs have become more cautious in exchanging emails or messages, they fear, containing any material repugnant to cyber stalking section of the ordinance.
Hacking is no more a new term for computer generation. With the passage of time the definition of it is evolving. Generally, it is an attempt of a web user to sneak in to the private, prohibited premises of counterparts with or without ulterior motives. This is, of course, illegal according to all international canons. But, in some cases some nations use it as an effective weapon against their rivals. Genius minds are involved in hacking which exacts extra ordinary expertise of computer operators who have full comprehension of scripts inside software developments.
In many developed countries, using unregistered software is illegitimate and equivalent to damaging of patent rights of software designer. They are careful about intellectual proprietorship. At the other front in developing countries where cracking of software is commonly practiced and resorted to maneuver extension in license term, people are unwary of services values packed in software. They make pirated software in use to run the computer. Practically, we can not afford to pay hefty, regular cost incurred on purchase and renewal of software usage license. Pervious government realized this fact and tacitly permitted sale of pirated software despite hue and cry of a leading software developer.
For commercial point of view and in global arena where impartial application of rules is demanded this practice is somehow discouraging, but in societal and economic development, until market based price of software is determined, cracking is no longer a bane. At this evolutionary stage in IT progress, supporting approach can be instrumental in portioning space in the world cyber space. Pressurizing will only result into subjugation of natural positive implosion.
Prevention of cyber crime laws should be effective to nab malfunctions that are undermining the economy. People who are indulged in electronic crimes and misrepresenting their wealth should be brought before the court. It is sensible that the government should also show restraints in effectuating any principle that may wreak havoc to freedom of expression in the country. If not directly, the ordinance is inadvertently denting the freedom of information rights, guaranteed in the Article 19 of the constitution of Islamic Republic of Pakistan.
Monday, January 19, 2009
GAZA CITY monday
Al-Qassam brigade says it captured two Israeli soldiersUpdated at: 1536 PST,
Monday, January 19, 2009
GAZA CITY: Hamas's armed wing said on Monday it lost only 48 fighters during Israel's 22-day operation in Gaza and vowed to fight on unless the Jewish state withdrew its forces from the Palestinian enclave. The group also claimed to capture two Israeli soldiers. "We announce to our people the martyrdom of 48 Qassam fighters," Abu Obeida, spokesman for the Ezzedine Al-Qassam Brigades, said in a televised press conference.
Monday, January 19, 2009
GAZA CITY: Hamas's armed wing said on Monday it lost only 48 fighters during Israel's 22-day operation in Gaza and vowed to fight on unless the Jewish state withdrew its forces from the Palestinian enclave. The group also claimed to capture two Israeli soldiers. "We announce to our people the martyrdom of 48 Qassam fighters," Abu Obeida, spokesman for the Ezzedine Al-Qassam Brigades, said in a televised press conference.
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