Category Archives: Economy

Larger allocations to help education and health sectors

By Zubeida Mustafa

AN UNUSUAL feature of the Federal Finance Minister’s budget speech on Thursday was the emphasis he placed on the need to develop the social sector in Pakistan, especially education.

His professed concern at the poor state of this sector was expressed in the shape of enormous increases in allocations for some of the social sector items in the Budget.

This is significant, given the poor performance of the Government in the fields of health and education — none of the Sixth Plan targets in these fields could be met in the first two years.

It has been clear that the major factor responsible for this state of affairs has been the paucity of resources made available to the social sector. In terms of budgetary allocations, the pace of implementation of the Sixth Plan has also been painfully slow. Only 23 per cent of the planned amount was spent on education and 27 per cent on health in the first two years of the Sixth Plan period. Continue reading Larger allocations to help education and health sectors

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Saving habits: cultural factors are decisive

By Zubeida Mustafa

Pakistan’s saving rate betrays its people’s weakness for spending. The nation manages to save only five per cent of its gross domestic product — a figure much lower than in most other Third World countries. The saving rate in India is 20 per cent. It’s 30 per cent in Indonesia and 28 per cent in China and Nigeria.

But in spite of their notoriety for ostentatious living and wasteful habits, it is wrong to think that people in this country do not set aside any of their earnings for the proverbial rainy day. And those who do not manage to save despite their best efforts worry about their inability to save. Continue reading Saving habits: cultural factors are decisive

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Education sector: shortfall on development side alarming

By Zubeida M ustaf a

THE Sixth Five-Year Plan describes education as “a vital investment in human resources development.” It concedes that the performance of the education sector in Pakistan has remained “utterly deficient.”

In a bid to correct this deficiency, the government has adopted a strategy which seeks to increase the funds allocated to education, to change the distribution of available resources among various subsectors — so that there is greater expansion of primary and technical education while spending on higher education is kept down — and to place greater emphasis on female education.

Now that the first year of the Sixth Plan is over, it should be an instructive exercise to evaluate the government’s education policy especially with a view to ascertaining as to what extent its professed guidelines have been adhered to. Continue reading Education sector: shortfall on development side alarming

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Population planning suffers due to poor efforts

By Zubeida Mustafa

IT IS to state the obvious that Pakistan‘s population could do with some planning. According to the 1981 census the annual population growth rate of the country is 3.1 per cent which gives Pakistan the dubious distinction of having one of the fastest multiplying population in the world.

Mercifully, it is now being noted in official quarters that without an effective programme to control the galloping population growth rate, economic development can be reduced to a farce. Thus Dr. Mahbubul Haq, Federal Minister for Planning and Development, recently observed, that during the next 16 years an estimated increase of 60 million in the population was expected.

To meet the need of these extra people alone, the country would have to produce goods worth Rs. 12 billion, generate 150 MW of electricity, set up 120,000 additional primary and 5,000 secondary schools, train 300 additional doctors and 5,000 nurses. Continue reading Population planning suffers due to poor efforts

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PQLI: A new yardstick to replace ‘per capita income’

By Zubeida Mustafa

THERE was a time when the sole yardstick to measure the level of development of a country was the conventional economic indicator, namely, the per capita income. But economists have now discovered the fallacy of this approach. A country can have a high per capita GNP and yet be severely underdeveloped in terms of the quality of life it can provide to its people.

Very often the national wealth happens to be concentrated in the hands of a few people and the Government’s priorities are such that the social sectors are totally neglected. In such cases the GNP can be quite misleading for it hardly reflects the level of development of the people. Hence economists have come to adopt the basic needs approach and now more emphasis is placed on the social sectors, especially education and health. Thus the conventional economic indicators are no longer the only measure of national development. Continue reading PQLI: A new yardstick to replace ‘per capita income’

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What the ’81 census reveals

By Zubeida Mustafa

THE situation of women in Pakistan as it emerges from the findings of the 1981 census is still rather bleak. True, the sex ratio, female literacy rate and female labour participation level have registered some improvement over what was recorded in the previous census in 1972. But progress has been so slow in terms of percentages, and the population growth rate so high, that in absolute numbers there are more illiterate women and more women out of the labour force today than there were in 1972. When compared with other countries the position of women in Pakistan emerges as even more dismal.

Continue reading What the ’81 census reveals

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The story of high targets, low performance

By Zubeida Mustafa

EDUCATION planning in Pakistan has traditionally been lopsided, with the priorities misplaced. There has been too much emphasis on higher education, while the primary sector has, by and large, been neglected. Consequently, education has been like an inverted pyramid balanced on a narrow base.

The basic weakness in the government’s education policy lies in its reluctance or inability to allocate sufficient funds to this sector. Hence resources have had to be spread thin. Thus in 1982-83 Pakistan spent only 1.5 per cent of its GNP on education. Continue reading The story of high targets, low performance

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Population growth: Official programmes misdirected

By Zubeida Mustafa

THE KEY factor which will, in the final analysis, determine Pakistan’s economic and social progress in the coming years is the size of the country’s population and the rate at which it grows. In view of the present population explosion in the country, it is difficult to hold out much promise on this count.

The official population planning programme, which will complete two decades of its existence in 1985, has so far made not much of an impact on the demographic scene. The rate of population growth in this country is one of the highest in the world. In 1901 the area now comprising Pakistan had a population of 16 million. This doubled itself in 50 years, the 1951 census recording a population of 33 million. Continue reading Population growth: Official programmes misdirected

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Woes of the printing industry: Need for duty cuts, cheap newsprint, incentives

By Zubeida Mustafa

THE TWO major problems facing the printing industry in Pakistan are the high cost of production and the poor quality of service provided. Identifying these two factors which determine the state of the industry today, Mr Ahmad Mirza Jamil, the outgoing Chairman of the Pakistan Association of Printing and Graphic Arts Industry (PAPGAI), points out that if the industry is surviving in the country it is because printers are operating in a seller’s market. The dismally low literacy rate, the poor reading habits of the people and the scarcity of low-priced books and literature are key indicators of the state of the publishing and printing industries in Pakistan.It is not surprising to find these industries in a poor state.

In a society where education is at a discount, the elements which go into the making of education also tend to be ignored. As compared with the publishing sector, printing is better off because it caters to multifarious needs other than those of the publishers and stationers. The printer gets a substantial part of his business from the orders he receives for the printing of labels, cartons, pharmaceutical literature (which the majority of consumers cannot read), invitation and greeting cards and calendars. There is urgent need to look into the problems of the printing industry not only to promote the cause of education and literacy. But also because printing is one of the major industries in the country.

According to Mr Jamil, it employs nearly 300,000 people and is the second largest industry in terms of manpower employment after textiles. In Karachi alone there are some 3,000 printing units. If nothing else, the size of the industry itself warrants that it be given due attention.

 A service industry

Printing is essentially a service industry, says Mr Mirza Jamil. But unlike other services, nearly 70 to 85 per cent of the sales proceed go towards meeting the cost of raw material. Hence it is difficult for a printer to reduce costs unless he is provided paper, ink, box board, graphic films and other such items at lower prices.

Mr Jamil feels that the government’s policies have not been very helpful in this respect. Import duties and sales tax on the raw material used in printing are exorbitantly high and, with the gradual appreciation of foreign currencies vis-a-vis the Pakistani rupee after its delinking from the dollar, the landed cost of imported machinery, paper and other raw material, as also the duties and taxes levied have shot up immensely.

Giving a few instances, Mr Jamil points out that in June 1981, the import duty on printer’s ink was 40 per cent on the c&f value. Over and above this there was a sales tax of 10 per cent which meant an actual tax of 54 per cent on the c&f value. In January 1982 the sales tax stood at 20 per cent and an import surcharge of 5 per cent had also been imposed. As a result the actual taxes went up to 73 per cent on the c&f value.

Tax burden

 In January 1983 a year after the delinking of the rupee when a dollar was valued at Rs 13, the duties and taxes on ink in effect amounted to 95 per cent on the c&f value as it was in January 1982 — an increase of 76 per cent over the June 1981 rates. Board grey on which there is an import duty of 50 per cent, a sales tax of 10 per cent and a surcharge of 5 per cent, now yields revenues amounting to 91 per cent of its cost in June 1981. The taxes on machinery and spare parts amount to 76.7 per cent, on graphic films to 58.5 per cent on printing plates to 76.7 per cent and on paper board to 46- 120 per cent depending on the c&f price of paper. In view of the fact that the cost of paper alone makes up a substantial part of the cost of the finished product (70 per cent in the case of books), the heavy imports on this item used in printing has not helped the cause of the industry.

We have been retrogressing. In the early fifties, printing machines could be imported free of import duties. Today they carry an import duty of 40 per cent, a sales tax of 10 per cent and a surcharge of 5 per cent. Under present conditions, the local manufacture of raw material for the printing industry also has not helped. Thus 75 per cent of the printing ink used in the country is locally manufactured and it is given preference because it is readily available. But it is more expensive than the imported stuff because the import duty, sales tax and excise duty on the ingredients of the locally manufactured ink are so high that it costs more than the imported ink.

Similarly, the locally produced paper is unsatisfactory in quality and in spite of the heavy duty on imported paper, the local paper cannot really compete in price with the imported one.

 A damaging device

A damaging move taken by the Government was the imposition of sales tax on some d products in June 1981. This was done through the device of rescinding the Government notification of June 1951 which dealt with sales tax exemption. A new notification was issued which listed a few items such as account books, exercise books, maps, charts, stationery, cartons and calendars on which exemption was to be granted. All other goods were subject to sales tax. Since all the raw material used by the industry is already subjected to sales tax, such tax on the finished product virtually amounts to double taxation.

Mr Jamil notes that it is next to impossible for the printing industry to claim refund of sales tax, since the evidence of the sales tax paid on the raw material cannot be produced. Few printers import their own raw material. On a representation made by PAPGAI in October 1982, however, the government agreed to maintain the status quo in the matter of sales tax on finished products until a final decision is taken.

Mr Jamil hopes that the 1981 notification will be withdrawn. The other problem faced by the industry is the absence of quality. This Mr Mirza Jamil feels is to be attributed primarily to the scarcity of trained personnel and the absence of competition. Although services account for barely 15 to 30 per cent of the cost of printing, it is the key factor in determining the quality of the finished product.

Training in skills

 Mr Jamil compares the printing technician to the artist. Just as the quality of an artist’s drawing can either enhance the worth of a piece of paper or reduce it to scrap, similarly the printer’s skill determines the worth of a printed piece of paper. And yet Pakistan has no up-to-date training school for printers. The only facility available is at Lahore, but here Mr Jamil complains obsolete machinery is used to train students in outdated techniques.

Repeated representation by PAPGAI to the government to open training centres in up-to-date methods have produced no response. As a result, most big presses provide on-the-job training to their technicians. But according to the outgoing Chairman of PAPGAI, this has proved to be a costly process. The trainees initially lack the knowledge and skill to handle the machinery so that breakage and wear and tear are much more than normal. Moreover, the “Dubai Chalo” trend has hit the printing industry as much as other sectors and the most slcilled and best trained technicians tend to migrate to the Middle East.

How to improve quality?

 How can quality be improved? Mirza Jamil suggests that the Government should help to establish training schools for printers. The import of printing plants should be allowed free of duty so that those who wish to train technicians are not discouraged by the high cost of the machinery. PAPGAI itself has started a free correspondence course to train technicians. This will certainly help but will not suffice. Increasing competition can help to improve quality says Mr Mirza Jamil.

Although many printers would not agree, he insists that operating in a seller’s market the printing industry can get away with shoddy work. If the cost of machinery and raw material were to be considerably reduced, it would provide the incentive to new entrepreneurs to enter the field, thus giving rise to the much needed competition necessary for efficiency and quality. This would also create the compulsion for those in the printing industry to introduce modern management techniques and use the appropriate equipment for a particular job, which is not the case at present.


 The outgoing Chairman of PAPGAI has specific recommendations to make. A commission should be set up to investigate the state of the printing industry and to fix standards of production. The levies on printing machinery and raw material be reduced or eliminated altogether. Facilities be organised for the training o{ technical hands. And finally, to encourage educational publishing, newsprint be imported duty-free for books and special printing machine be imported for the printing of textbooks.

Unless the printing industry is promoted as a low-cost concern, inexpensive books and reading material cannot be made available to the people. And when the tools of learning are beyond the reach of the common man, literacy and education tend to become the privilege of a few. The case for promoting the cause of low-cost and quality printing is a strong one.

If PAPGAI has failed to make an impression on the government it is not surprising. It does not constitute a powerful lobby since its present membership is just a fraction of the total number of printing • plants in the country. Since many of the printing presses are small concerns, they tend to be so occupied with their own management and operation that they have no inclination to participate in PAPGAI activities.

Source: Dawn, February 27, 1983


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Publishing industry’s travail : Book production a high risk business

By Zubeida Mustafa

 BOOK PUBLISHING is a high risk business in Pakistan, says Mr Shams Quraeshi of Mackwin & Co. who has been in the book trade since 1947. Returns are slow in coming, hence not many people with capital to spare wish to invest in it. They would rather opt for an industry with quicker and guaranteed returns.

Even banks regard books as poor risk. Thus one can get a bank loan of Rs 80,000. against paper reams worth Rs 100,000. But as soon as the paper is converted into a book, no bank is prepared to accept it as security to advance a loan.

Malik Noorani, whose Maktabe-i- Daniyal has published the works of Faiz, Mushtaq Yusufi and Josh, considers himself to be lucky if he breaks even. “You have to be an entrepreneur, gambler and philanthropist to be a publisher. You also need a Qarun ka khazana and Ayub ka sabr,” sums up Mr Noorani, “I do not have the first, though I have the second.”

He admits that he manages to sell off all the books he publishes because he prices them abnormally low, which would not be feasible were he not subsidising his publications from his income from the sale of law books through the Pakistan Law House, which he runs at the Pakistan Chowk. In law books it is a seller’s market, Continue reading Publishing industry’s travail : Book production a high risk business

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