08-03-2003, 08:45 AM
<b>Dear Ehrar!</b>
Let us go to second stage of the debate. I will shed some light on each one of the main points u raised.
<font color=red>Retirees' Problems</font id=red>
So according to ur analysis, we have two types of retirees one that has reached their natural retirement lives and the others who r forced to take early retirment. Remind u that some of them may still be willing and able to work if they can find something. Now this problem of people having to let go becuase the company is privatized or down sized is not exactly current regime's fault. These people should not be there in the first place. Most of them were hired due to political pressures. I know many towns and even cities that depend on Railways. Railways hire a lot of unemployed people just becuase it is a way to sustain the economies of these small places. But my problem is that this practice is not economically viable neither sustainable.
How do u think we brought the country to the brink of bankruptcy? The govt just spent what it never had. It had to borrow beyond its means, and one day the lenders came knocking on the doors. So i am not against giving tax breaks to retirees. If they have no source of income other than their retirement funds, than tax thershold should be higher for these people. But for the govt. to gurantee them a certain rate of interest make no sense. Ok if a fund manager cann't generate a good return for his clients, where do u think the govt. is going to get that return? U guessed it right IMF and the begging bowl.
<font color=red>Why the privatization and downsizing and what govt can do</font id=red>
I can assure u there is not a single well-known economist in the free world, who will disagree with this process. Govts are not meant to be in the business of running companies. Capitalist society is run by private sector and any other experience has failed. We went on this foolish path of nationalizing private enterprises in 70s and lost 30 years of opportunities. Look Korea become independent with us and they borrowed our first five year plan(courtesy late Dr. Mehboobul Haq). Today compare Korea with Pakistan.I don't have to say any more in this respect.
Some of the companies u named UBL,ABL,PIA,KESE. These used to be thriving businesses once upon a time. Then Govt. put its nose where it didnot belong. These companies were left with bare bones. I am even surpised that private sector is still interested in them. If the executives and management of these firms have any dignity they should resign and hide themselves from shame.
Privatization would result in temporary displacement for workers. But believe me those who are capable and were hired on merit will find an alternate. But those who were brought in on quota system my suggestion to them is either change with the times or go back and start farming what is wrong with that.
<font color=red>State of investment management industry</font id=red>
We need standards in this industry just as in other professional fields in our country. But look it has only been a few years since we are out of those dark ages of Bibi and Baba. The private sector is beginning to breath again. If we can reduce our debt burden faster, probably, we can devote some resources on regulation of investment industry. So long as we are on the right path that is what matters. U know how long it took to build ROME?
<font color=red>Other matters</font id=red>
Your refernce to US govt's help after 9/11 is not accurate. The only changes they made are in taxation of dividends and reduction of tax rates for high income individuals. In fact most states are in very poor financial shape and Fed Govt. has not given them any support.
If u have any other information then i will be glad to share it with you.
Regards and we will meet again.
Edited by - Pervez on Aug 03 2003 040303 AM
Let us go to second stage of the debate. I will shed some light on each one of the main points u raised.
<font color=red>Retirees' Problems</font id=red>
So according to ur analysis, we have two types of retirees one that has reached their natural retirement lives and the others who r forced to take early retirment. Remind u that some of them may still be willing and able to work if they can find something. Now this problem of people having to let go becuase the company is privatized or down sized is not exactly current regime's fault. These people should not be there in the first place. Most of them were hired due to political pressures. I know many towns and even cities that depend on Railways. Railways hire a lot of unemployed people just becuase it is a way to sustain the economies of these small places. But my problem is that this practice is not economically viable neither sustainable.
How do u think we brought the country to the brink of bankruptcy? The govt just spent what it never had. It had to borrow beyond its means, and one day the lenders came knocking on the doors. So i am not against giving tax breaks to retirees. If they have no source of income other than their retirement funds, than tax thershold should be higher for these people. But for the govt. to gurantee them a certain rate of interest make no sense. Ok if a fund manager cann't generate a good return for his clients, where do u think the govt. is going to get that return? U guessed it right IMF and the begging bowl.
<font color=red>Why the privatization and downsizing and what govt can do</font id=red>
I can assure u there is not a single well-known economist in the free world, who will disagree with this process. Govts are not meant to be in the business of running companies. Capitalist society is run by private sector and any other experience has failed. We went on this foolish path of nationalizing private enterprises in 70s and lost 30 years of opportunities. Look Korea become independent with us and they borrowed our first five year plan(courtesy late Dr. Mehboobul Haq). Today compare Korea with Pakistan.I don't have to say any more in this respect.
Some of the companies u named UBL,ABL,PIA,KESE. These used to be thriving businesses once upon a time. Then Govt. put its nose where it didnot belong. These companies were left with bare bones. I am even surpised that private sector is still interested in them. If the executives and management of these firms have any dignity they should resign and hide themselves from shame.
Privatization would result in temporary displacement for workers. But believe me those who are capable and were hired on merit will find an alternate. But those who were brought in on quota system my suggestion to them is either change with the times or go back and start farming what is wrong with that.
<font color=red>State of investment management industry</font id=red>
We need standards in this industry just as in other professional fields in our country. But look it has only been a few years since we are out of those dark ages of Bibi and Baba. The private sector is beginning to breath again. If we can reduce our debt burden faster, probably, we can devote some resources on regulation of investment industry. So long as we are on the right path that is what matters. U know how long it took to build ROME?
<font color=red>Other matters</font id=red>
Your refernce to US govt's help after 9/11 is not accurate. The only changes they made are in taxation of dividends and reduction of tax rates for high income individuals. In fact most states are in very poor financial shape and Fed Govt. has not given them any support.
If u have any other information then i will be glad to share it with you.
Regards and we will meet again.
Edited by - Pervez on Aug 03 2003 040303 AM