Budget Speech
by Leader of the Opposition, Mohtarma Benazir Bhutto
June 15, 1998
Ladies and gentlemen,
As I address the National Assembly in the first budget session after Pakistan joined the nuclear club, I recall the words of our founder. Fifty years ago Quaid-e-Azam had prophesied “Pakistan has come to stay”. Quaid-e-Awam Zulfikar Ali Bhutto gave us the nuclear technology to fulfill that prophecy in the face of Indian intransigence.
The facility at Kahuta where Pakistan developed its nuclear capability was established by Prime Minister Shaheed Zulfikar Ali Bhutto who was warned of being made a “horrible example” and finally assassinated. Dr. Abdul Qadeer Khan and the Pakistan Atomic Energy Commission working under Prime Minister Bhutto’s instructions with their teams fulfilled the mission given to them. We always hoped that India and Pakistan would make the sub-continent a nuclear free zone. Those dreams were shattered by the Indian explosion. We must ask: “Why”?
For more than 20 years, when the Kahuta Laboratories were established in 1976 and the five Indian nuclear tests of May 11, 1998, India was restrained from testing nuclear weapons by a vigilant Pakistan. We ask what were the circumstances emboldening the Indian government to defy world opinion.
The answer lies in the policy of APPEASEMENT, adopted by Nawaz Sharif towards India so that he could concentrate on his internal enemies. Benazir replaced Kashmir as Pakistan’s foreign Policy. Principles were abandoned. People of Kashmir were abandoned. All morals were abandoned.
India had larger markets to offer the Ittefaq regime, which had already cornered the sugar, textile, fertilizer, cement, and banking sector of Pakistan. So the son was sent as a special envoy. The Indians sensed the weakness of the new Pakistani leadership. They tasted its commercial flavour. And they took Pakistan and the world by surprise.
The Indians calculated they had nothing to lose. The Americans had brought the Soviet Union to the point of disintegration by upping the ante. India decided to up the ante. If they detonated, Pakistan would be forced to detonate. They calculated that if Pakistan did not detonate, they could attack Azad Kashmir. If Pakistan did detonate Pakistan’s weak industrial base and mismanagement of the economy dominated by Motorway kickbacks would lead to an internal explosion.
The policy of appeasement led to its logical conclusion.
Today Pakistan is facing the gravest threat to its security since the fall of Dacca.
I had been warning of this internal, economic threat time and again.
The budget speech gave an impression of Business As Usual in stark contrast to the speech by Nawaz Sharif a day earlier. The reality is that since the dismissal of the PPP government on November 4, 1996, Pakistan has slipped into anarchy and chaos. Today we stand internationally isolated, politically divided and economically bankrupt.
The Finance Minister failed to tell the Nation why:
- The Nawaz regime had rolled back the frontiers of the free market economy;
- What the effects of sanctions would be;
- How these would be met,
- How much aid flow was affected;
- Whether Pakistan would default and declare a moratorium on further debt repayment;
- How the de-dollarisation of the economy would affect money supply, the value of the rupee and inflation;
The Budget for 98-99 did not indicate how we would reduce debt and become self-sufficient.
Instead of building up a climate of confidence and understanding, the regime has willfully created panic, fear and disharmony. The measures taken by the regime to destabilize Pakistan include:
- The declaration of Emergency suspending all human rights;
- The confiscation of foreign currency;
- The declaration to build a controversial Dam alienating three of the four federating units;
- Misappropriation of public money to pursue a political vendetta
Mr. Nawaz Sharif came on TV to announce a so-called “National Agenda”.
He came across as desperate man making wild and unrealistic empty promises. He had nothing to offer the Nation. He talked of:
- Land Reforms of 1977 which have already been implemented except by the collaborators of the Martial Law regime. He refused to give up the 1700 acres in the heart of Raiwand, which he and his family have grabbed in violation of the land reforms of 1977. They have robbed Rs. 70 crores to build a canal of water there and rupees 2 billion from WAPDA to import and build an uninterrupted water supply. This is a gross abuse of power and the resources of the state for which he will have to account;
- He promised to give loans of Rs. 3 – 50 lacs to the un-employed knowing the money was not there;
- He promised to build Kalabagh Dam without disclosing where the money was to come from;
- He asked the nation to drink half a cup of tea and use one spoon of ghee while his regime relaxed rules for the import of luxury items such as air conditioners and expensive cars for Redco’s benefit;
- His personal agenda came to the fore when he said the former Prime Minister had caused him losses by refusing to give railway wagons to the ship “Jonathan” carrying scarp. He hid the fact that he had abused his position under General Zia to construct a dry port at Ittefaq Foundries and got Pakistan Railways to transport scrap at concessional fees, causing Pakistan Railways a loss of Rs. 2 lacs per train (see Annex I of “The Dawn” July 22, 1989)
- He hid the fact that he made money out of the “Jonathan” incident when he got compensation of about 8 crores of public money by a court process where the defence and state had colluded;
- He declined to tell the Nation that he had taken Ittefaq Foundries for free under a Martial Law Regulation with the assets in tact and the liabilities written off. He failed to mention that it was an iron mongery before nationalization.
- He failed to tell the nation he had plundered billions of rupees to build himself scores of factories in three years, of how he had sold 600 plots in one evening to make a packet, of how he had bought up land at Raiwand at throwaway prices and then declared it an industrial estate;
- He failed to tell the nation that he has embezzled about Rs. 1 billion to malign the Leader of Opposition for exposing his fraud, corruption, misconduct and abuse of office.
- He failed to tell the people that he was scandalizing the pre-shipment firms because they had discovered $650 million of uncollected customs dues. (see Annex 2)
The people want Nawaz Sharif to return the 1000 crores that he has plundered. Returning 2 or 3 debt ridden assets with a view to plunder the rest will not do. The people know that there were no engineered defaults. These are engineered excuses to hang on to ill-gotten wealth. The people cannot be expected to make sacrifices when the rulers are bent upon keeping ill-gotten assets even at a time of national crisis.
The combined expenditure of the Prime Minister’s Secretariat, the President’s Secretariat, the National Assembly, the Senate and the Supreme Court of Pakistan doesn’t come to the amount that defaulter Nawaz Sharif and his gang of defaulters is lavishly spending in its criminal conspiracy internationally to malign the leader of the Opposition who happens to be the twice elected Prime Minister of Pakistan and the architect of its Missile Technology.
The Pakistan Peoples Party demands that:
- A judicial commission inquire into the corruption allegations against Nawaz Sharif, his family and his cronies.
- A judicial commission identify all state funds usurped, embezzled and unlawfully taken for the personal vendetta against the leader of opposition.
This money belongs to Pakistan. Our people will take it back, every paisa from Nawaz Sharif and his henchmen. How dare he take money from the pockets of the poor people of Pakistan to squander on detectives, propaganda and forgery against his political opponents?
Suitcases of dollars are given to members of Ehtesab Bureau.
A chain of information centres have been set up world wide for the propaganda war against the champion of democracy and rule of law to leave the Nation leaderless in its hour of crisis. The people for the forces of truth will defeat this sinister campaign by savage tyrants for justice can not be for ever denied.
While our people drink a half-cup of tea, the Ministry of Information eats barrels of cash in its propaganda war. These include:
( 98-99)
Demand No. 64 for information of Ministry of Information
Rs. 76,779,000 Last year Rs. 73,674,000 was spent on “Publicity”
( 98-99)
Demand No. 65 for documentaries of Information Ministry
Rs. 31,799,000 Last year Rs. 37,896,000 was spent on “Publicity”
( 98-99)
Demand No. 66 for information Department of Information Ministry
Rs. 85,522,000 Last year Rs. 94,423,000 was spent on “Publicity” and “Recreation”
( 98-99)
Demand No. 67 for information abroad of Information Ministry
Rs. 87,405,000 Last year Rs. 116,927,000 was spent
( 98-99)
Demand No. 68 for other expenditure of information Ministry
Rs. 588,683,000 Last year Rs. 105,065,000 was spent on “Publicity”
( 98-99)
Demand No. 129 for development of information Ministry
Rs. 25,400,000 The whole amount was allocated for “Publicity” TOTAL Rs. 895,588,000/-
This comes to a staggering sum of nearly one billion rupees.
The expenditure on the entire state machinery comes to half that :
Prime Minister’s Secretariat Rs. 98,457,000
The Supreme Court Rs. 69,559,000
The President Rs. 74,666,000
The National Assembly Rs. 250,439,000
The Senate Rs. 111,240,000
TOTAL Rs. 604,361,000
It is nothing but a cruel joke for defaulter Nawaz Sharif to come on TV and say that he will leave the Prime Minister Secretariat. The cost of all the main institutions, including the Presidency, the Prime Minister Secretariat, the Supreme Court, the National Assembly and the Senate is less than the ill-gotten expenditure on the propaganda war against the Leader of Opposition.
This cost excludes the ill-gotten money spent on:
- Ehtesab Bureau and its secret expenditure;
- Law Ministry’s expenditure on lawyers and accountants;
- Intelligence Bureau’s expenditure through secret services funds;
- Prime Minister Secretariat expenditure through secret services funds;
The divisive policies of the regime are sabotaging the progress and prosperity of the Nation.
The poor grow poorer. The middle class cannot make ends meet. Government employees lack job security. Labour can hardly make ends meet. Shops are starved for customers. Foreign investors have been threatened and scandalized. Bureaucrats and Bankers vilified. No institution has been left with respect or sanctity. There is discontent and disillusionment. The people feel cheated and angry. Hunger stalks the land. Young people commit suicide because they cannot make ends meet.
And we spend one billion rupees on propaganda.
Considering the grave crisis threatening the very existence of Pakistan, we expected the Finance Minister to announce austerity measures. This was not done.
The Federal government has grown too large. The time has come for us to live within our means. The Peoples Party calls for a real cut in federal expenditure. This means doing away with unnecessary ministries, divisions and buildings. This means transferring government to the provinces and to the districts. This means devolution. It means trusting the people.
The Peoples Party began the process of district government by creating Social Action Boards consisting of elected members at the district level. The Social Action Boards did remarkable work building 30,000 primary schools in 3 years, launching a campaign to iodize salt, eliminate polio, reduce the population growth rate and grow trees to protect the environment.
It is not enough to transfer resources to the provinces alone which have become bloated. We call upon the Federal government to transfer social and local issues to the provincial governments who ought to be mandated to re-distribute 50 to 60% of their resources, according to population to the districts. Each district should have a board of elected members to run programmes of poverty alleviation as a prelude to district government.
The Universities and Hospitals on Federal government grants must be directed to come up with self-sufficiency plans while maintaining a safety net for the poor and the children of the poor. The Universities, Hospitals and institutions must be allowed to keep the money they charge as fees and not send it to the Center.
The Supreme Court and High Courts must be allowed to keep court fees so that they can provide justice freely and expeditiously.
The proceeds of General Sales Tax must go to the provinces as originally envisioned in the Constitution. A percentage may be donated by the provinces to the Center earmarked for Balochistan, Northern Areas, FATA and Azad Kashmir.
Debt incurred on different provinces must be assumed by those provinces for repayment. We cannot expect Balochistan to bear the cost of the extravagant Motorway.
We cannot expect people of one area to subsidize the electricity charges of other area.
The fall in oil prices should be passed on to Wapda and the Thermal Power Plants. This will make Wapda solvent and reduce the charges of electricity.
Each Area Board should have a different rate of electricity charges based on cost of production. This will lead to greater efficiency and better rates for better customers who pay their bills. Wapda’s old thermal plants are oil guzzlers producing expensive electricity. These should be shut down and cheaper power obtained from the private power projects.
Our Country is calling out for drastic Reforms. The old ways will not do. This regime has squandered the massive engineered majority given to it by President Farooq Leghari in a deal brokered by Governor of the Punjab. It has miserably failed to chart out a course of self-reliance and reform. Women’s seats have not been restored. Minorities have not been given joint electorate. Blasphemy Law has not been amended.
The projects pertaining to Water logging and salinity have been abandoned which has slowed down growth. Growth figures are constantly adjusted. Last years (for 96-97), We were told growth rate was 3.1%. This has now been revised to 1.1%. This year and next years growth target will be re-adjusted too, as there is simply no growth, except in the population sector.
It is incorrect to state that industry has grown by 6%. Ironically, only good crops in the agriculture sector helped industries dealing with primary commodities. For example sugar due to a good sugar cane crop and jute bags due to a good rice crop.
However, steel, fertilizer, chemicals all went down exposing the so-called growth rate of 6% as a fraud. Investment has gone down too as admitted by the finance minister. Only the ICI, Engro and other projects of PPP, including power sector, continue towards completion. Otherwise the regime has returned with IOUs and not MOUs, despite an expenditure of nearly rupees one billion on the Prime Minister’s fruitless and barren travels.
Cement production, steel production and import of machinery has all gone down exposing a stagnant economy.
Debt servicing is likely to hit Rs 300 billion as compared to the figure of Rs 276 billion reflected in the Budget.
Prosperous public sector corporations have lost Rs 50 billion during the current year.
External loans of Rs 142 billion promised by the Budget are going to be impossible to raise.
The provinces are starved for funds having received Rs. 19 billion less than promised last year in the federal Budget as their share. Next year looks no more promising.
To dupe the IMF, Rs. 9 billion excess tax has been collected from Habib Bank and National Bank. The Chairman FPCCI has claimed that Rs 15 billion of refunds etc have been withheld by the CBR presumably to doctor figures.
The regime has decided to buy dollars at 9% premium by announcing that any Pakistani remitting $100,000 legally will receive relief of Rs 4 lacs . This will further erode the value of the rupee.
The Stock exchange whose main aim is to mobilize capital has crashed. In the PPP days. There would be 10-15 new issues annually. The Bad – Kismet Nawaz era has produce only one issue in the Karachi Stock Exchange in the last one year.
Poverty alleviation programs have been badly affected. The public sector programme is meant for the down trodden segment of the society and the backward area of Pakistan. The expenditure on PSDP i.e. poverty alleviation has gone down from 5% of GDP to 3% GDP.
Dark omens indeed for the dark days ushered in by a dark regime.
Tax revenues have fallen drastically from 14.1% to 11.5% of GDP.
Non bank borrowings broke all record coming to Rs. 69 billion thus ballooning the internal debt.
We reject the claim that inflation has fallen to 8%. With a massive increase in price of lentils and a 30% increase in price of wheat, inflation has climbed to new heights.
The deficit has risen to nearly 7% if not more. The rupee has been devalued by 10% with more to come in the following months.
Exports have increased by a miserable 5% and that too, due to agriculture and good weather.
Bank default and bad debt has risen from Rs. 121 billion to Rs. 150 billion despite giving bank managers discretion to write off the bad loans of the Ittefaq family and friends.
Privatization has come to a grinding halt. Share prices of public sector corporations have fallen drastically. PIA does not have money to pay salaries. Share price of PSO has fallen from nearly Rs. 500 to a paltry Rs. 75. Sui Gas and OGDC are bankrupt.
Debt repayment has increased tremendously as the figures below show:
95-96 $22.275 billion
96-97 $25.00 billion
97-98 $25.00 billion
Yet not a single measure for austerity
Not a single measure for self reliance
Not a single measure for poverty alleviation
Not a single measure for debt reduction
Contrary to breaking the begging bowl, the Nawaz regime has expanded the begging bowls that go around. We beg from friendly countries, from overseas Pakistani in Manchester, Birmingham and else where. We beg even from our school children who can not afford a glass of milk a day.
Sir,
It gives me no pleasure to throw back at the finance minister his pious promises of one year ago. The treasury benches have failed to :
- ensure a society free from provincialism
- improve the lives of common man
- reduce dependence on others;
- generate health, education and employment facilities,
- modernize our industrial sector;
- create stability and confidence;
- promote growth;
- eradicate corruption and mismanagement;
- build forex reserves;
- allow stock exchanges index to increase;
- encourage foreign investment;
- increase revenues;
- control government expenditure;
- take stern action against defaulters;
- ensure better law and order;
- expand exports to 15%;
- create job opportunities;
- provide green tractors and green tube-wells;
- reduce tax rates;
- drop custom duty to 45%;
Never before in the history of Pakistan has so much damage been done to the national economy in such a short time.
The PPP had:
- Given the country the lowest deficit – 5%,
- Reduced debt for first time in Nation’s history by repaying principal amount through privatization proceeds;
- Brought in massive, unprecedented foreign investment creating jobs and a new private sector class;
- Tripled growth rate from 2% to 6%;
- Invested heavily in human resource development.
It is all very well to shed crocodile tears but sacrifices, like charity, begins at home. May I ask how much income tax the Prime Minister paid during 1997-98? Or his cronies? His Cabinet?
Instead the government pounced upon the unsuspecting middle class holders of foreign exchange deposit. Freezing eleven billion dollars was a criminal breach of trust, which amounted to confiscation of property. Earlier the Nawaz regime had subjugated the economy to its partisan political purposes by scandalizing the Independent Power Producers (IPP’s) asking them to admit paying bribes or else face contract cancellations. And when the Nawaz regime sought to enter the Energy market, the staff of Hubco, one of the leading shares on the Karachi Stock Exchange were arrested so that share prices should fall and be picked up by the economic vultures in the regime. The crash of the Hubco shares led to a slump in the Karachi Stock Exchange, which crashed below the 1000 index.
What a fine way, to drive away foreign investors and destroy one’s own economy.
There is more to come. The annual Japanese assistance of about 500 million dollars the World Bank assistance of 750 million dollars and the remaining tranches of 1.6 billion dollars committed by IMF will dry up.
Public confidence in the regime is so low that I demand on behalf of the people that the detail of the remittances of $ 500 million made by the cronies of Mian Nawaz Sharif be published. Let the people of Pakistan know the names of the rats which jumped the ship before the State Bank freezing order.
The unkindest cut of all has been the day light robbery of the fundamental rights of the citizens. There is no constitutional nexus between the provisions of article 232 and the proclamation of emergency. In one nuclear strike the peasants and workers, the intellectuals and businessman, the minority and women have been deprived of their inalienable right to life, liberty, property, freedom of expression, association and all the rights associated with a civilized democracy. The power of Supreme Court of Pakistan for the enforcement of fundamental rights under article 184 has been curtailed. The power of the High Courts under article 199 for the enforcement of the fundamental rights enshrined under article 8 to 28 of the constitution suspended. In short we are living in a police state under civilian martial law.
A state where the regime is involved in a criminal conspiracy against its own people.
Where the cream of the political clan has been branded in one sweep of the pen as drug suspects.
Mr. Speaker, Sir,
I had warned last year that there are hard times ahead. Only a national government can deliver the goods. It is quite evident from the track record of this myopic, selfish, brutish and vindictive regime that it has neither the will nor the vision to respond to the challenge that lies ahead. At a time like this when England was in the grip of economic recession, the only way out was the formation of a national government in 1931.
Let us remember that a nuclear power has greater responsibilities. Having achieved nuclear parity with India, let us now free ourselves of the Indian Chain. For 50 years we have remained chained to what India did. For 50 years, our only goal was to react to India. Nuclear parity frees us from such ties.
We should begin negotiations to sign the CTBT. Let us take the initiative, let us act and not just react if we are to overcome the danger that face us.
Now that aid has dried up. We can no longer afford the old lifestyle. People are angry because hospitals do not have medicines, schools do not have books, streets are broken and water is not available.
We tell the people that this is due to the extravagant lifestyle of the Rulers. Or that it is due to corrupt politicians and bureaucrats. We don’t tell them aid has stopped.
We should have the courage to say:
- That we borrowed too much in 50 years believing there was no tomorrow.
- That we produce too many people and have one of the highest population rates in the world.
- That three wars over Kashmir have forced us to spend significant amounts on defence.
Whatever Pakistan earns, it goes on debt and defence. There is nothing left.
As long as we borrow for Motorways and refuse to spend on water logging and salinity, on Health, Education and Population, we cannot prosper.
Nuclear parity has forced issues into the open. Either we have the vision and maturity to deal with these issues or else a sea of people seething with hate will erupt in our country sooner than later.
And this House bears the Responsibility for what will happen.
——————————————
Annexures
ANNEX – I ‘PR not to yield to Ittefaq’s blackmail’
“The DAWN”,
Karachi, 22-7-1989
Lahore: July 21: A spokesman for Pakistan Railways, commenting on the transportation of Messrs Ittefaq Foundries’ steel scrap from Karachi to Lahore; disclosed here on Friday morning that Pakistan Railways has a capacity of running an average of 12 goods trains from Karachi to other parts of the country every day.
The PR, he said, was bound to give priority to essential commodities and perishables for the national good.
The spokesman, giving the break-up said four trains of imported wheat, five of kerosene, furnace, diesel oil, petrol and edible (vegetable) oil, one train of cement from Hyderabd, one of other miscellaneous essential items and one of bonded containers for Lahore Dry Port were running from Karachi every day.
He said railways were providing one train daily for the transportation of imported phosphate fertilizer by withdrawing it from one of the above stated break-up because the fertilizer is essentially required for the sowing/planting of the Kharif crops. Delay in transportation of fertilizer would badly affect the small farmers who can not afford to store it.
He further said that railways had to give top priority to the movement of imported wheat from Karachi Port before the setting in of the monsoon because the wheat would be badly damaged if moved in the season, causing huge losses to the national exchequer.
He said that previously railways was bound to transport Ittefaq’s scrap because it was bonded cargo and used to be customs-cleared at Ittefaq’s own premises which was declared a “bonded ware-house” as a part of Lahore Dry Port, a privilege not extended to any other importer. Now, however, the customs producers of the scarp imported by Ittefaq have to be completed in Karachi like all the other importers. Railways, this have no obligation to transport Ittefaq’s scarp and they could use other modes of transport like every body else.
The spokesman said that railways had to bear a loss of approximately Rs. 200,000 per train (of about 60 wagons) for the transportation of Ittefaq’s scrap because of the special concessional fare allowed to them.
He said that railways was national service and no one company or group had any right to use it for their personal gain.
Concluding, he said that the present pressure tactics of the Ittefaq management amounted to blackmail and a threat to security. Trying to block the railway track was subversion in law and the railway would deal with it according to Law. There was no question of submitting to blackmail, he added, – PPI
ANNEX-II Cotecna denies violating any law
DAWN
June 11, 1998
Islamabad, June 10: Cotecna Inspection S.A denied that any of its employees had violated any law of Pakistan.
“We wish to categorically state that no company employee has ever, directly or indirectly, committed any action which does not scrupulously respect national and international laws, as well as recognized practice in international trade and industry”, it further stated.
According to a Press release faxed to Dawn by Cotecna from Geneva here, it said events that had occurred during these last days concerning the case of Cotecna inspection S.A., needed clarification.
“Our company, Cotecna Inspection S.A., has recently been implicated in proceedings initiated in Switzerland upon the request of the Pakistani Government. In this context, the management of Cotecna Inspection S.A. has seen itself blamed for deeds linked to the legitimate payment of commissions to its agent. our company deplores being the victim today of Pakistan’s internal political rivalries, which overflow onto the international scene”, it said.
In Sept. 1994 Cotecna Inspection S.A., the clarification said, was awarded a five year contract for the assessment of customs values of Pakistan’s imports.
“This contract was unilaterally and illegally terminated after two years when the new government took over”.
Those two years of operation brought to light uncollected customs dues identified by ourselves in the course of our mandate and amounting to over 650 million dollars”, the Press release said. It added that this result had been audited and confirmed by international auditors, Price Waterhouse.
“To the best of our knowledge, the new Pakistani government has, to date, taken no measure whatsoever to correct this apparent fraud”, it claimed.
Cotecna Inspection S.A said it confirmed its determination to vigorously defend its interests and maintain its commercial policy, which fully respects all ethical rules which are in conformity with national and international laws.