Treatment of the Blog.

Treatment Of Blog

Political Economy

Politeconomy.blogspot.com

Overview: The blog political economy strives to look deep into the relationship between politics and economy. Politics and economy are two separate phenomena string bound to each other. In this blog we’ll try to explore the eco-political problems of our country Pakistan and International community. We’ll also try to establish connection between the international scenarios and their effects on our local economy. Finally we’ll try to find multilateral solutions to these problems through extensive research.

Outline:

Beginning: The blog will see local and international programs entertained in blog posts alternatively on different political economic issues.

Middle: In the posts leading to the first two blogs more international and local problems will be entertained with their background of origination and their current status.

End:  In the end we’ll try to seek multilateral solutions to all the problems that we’re facing internationally and locally and their inter-relationship

Logline:  A deep look into the background of international and local political economic problems and a presentation of their multidimensional solutions.

Scope: The blog will cater the audience who want to understand the reasons of different issues that have an amalgamation of politics and economy.

Length, Distribution and Media:

Length: The blog will continue to serve the audience for times to come.

Distribution: Blogspot.com is being used to distribute the ideas to the audience.

Media:

Videos will be made to give to the audience an extensive and elaborated view of the problem.

Pictures will be used to add interactivity in the text of the blog.

Production Elements:

Text can be produced using research material and internet.

Pictures will be taken from Google for international and local topics because while explaining the history of events one cannot take fresh snaps using camera.

Videos will be made using Windows Movie Maker.

Subjects:

Many political and economic connoisseurs can be interviewed to take extensive details and insightos on topics both local and international.

“Treatments of all Blog Posts” (Fizza Kamal)

Treatment of Article 1

Largest Loan, to the Country of the Future IMF

Overview

The article “IMF largest loan to the country of the future Brazil” as the title says it all that it is regarding the issue which took place in 2002 when in the history of world’s largest lender IMF, announced the largest loan of 30.4 billion to Brazil. It was given to overcome Brazil’s fear of economic decline and being unstable due to the elections which were to take place in Brazil. This standby arrangement by IMF helped restore confidence, calmed the financial markets and stabilized the Brazilian economy.

Scope of work

The article basically caters the audiences that are interested in political and economic affairs of the world. It makes the reader aware of the international issue regarding the economic conditions of Brazil and its relation with IMF.

Treatment of Article 2

Culture and Politics

Overview

Culture and politics is designed in such a way that it offers profound analysis of the role of culture in shaping our political, economic and social lives. The article discusses some social movements regarding culture one of which is the clash of the civilizations by Samuel P. Huntington. Later the article explains culture and identity in comparative political analysis which helps in creating an understanding of how culture can be used as a framework for organizing the world, for grounding an analysis of interests, for linking collective identities to political actions.

Scope of work

The article helps the audience to understand the true meaning of culture and its surreptitious relation with politics and economy. It tells the reader how culture can improve the economic performance of a country and how it helps in motivating people and groups toward some actions and always from others.

Treatment of Article 3

Fighting Terrorism with Foreign Aid

Overview

The topic “Fighting Terrorism with Foreign Aid” is one of the most talked about issues nowadays in the international arena. The article discusses the role of foreign aid in countering terrorism and what kinds of effects it has on it. The article also tells us that how US is only concerned about protecting its own interests and showing that how US has dramatically increased foreign aid to a handful of countries which play an important role in the war on terror. Later the article will tell the reader if aid can reduce poverty and some don’ts and do’s of fighting terrorism with foreign aid.

Scope of work

Fighting terrorism with foreign aid will help the audience of international affairs in understanding the true motives of US and its foreign aid in fighting terrorism. The article gives the audience a clear picture of what foreign aid is, how it is used for a country’s own interest and what are its consequences. The article shows a link between foreign aid with economic growth and development which ultimately reduces the level of grievances, mobilization and willingness of individuals to join terrorist organizations.

Treatment of Article 4

Political Impact on Economy

Overview

The article revolves around the idea that how a country’s political environment can affect its economic stability and development. The article highlights some of the important issues regarding the development and progress of Pakistan’s economy. It tells the reader about how our government is using the resources we have and also how our economy is deteriorating day by day.

Scope of Production

The audience is being given a clear picture of our corrupt political system through the article. It tells the reader about our government and its leader’s actions which are dragging us all towards a living hell. The article in way helps us in opening our eyes and mind and make us think from a new point of view regarding our political and economic situation.

Treatment of article 5

Non-development Expenditure

Overview

The article throws a light on the true meaning of development and how Pakistani government has failed to understand the meaning of development and progress. It explains how Pakistan is caught up in a war commonly referred to as war on terror which was never for us in the first place. Further it discusses some of the key issues which explain non-development expenditure of Pakistan. In the end the power of politics and its relation with the progress and betterment of the country is discussed which our country has failed to understand.

Scope of Treatment

The article keeps the audience reading by making them believe and understand the meaning of development and where Pakistan stands when it comes to the betterment, progress and prosperity of a country. It provides the reader the information about how poor our political system is in developing the nation.

Treatment of Article 6

European Debt Crisis

Overview

The article throws light on the European debt crisis which started in late 2009 and there was fear of sovereign debt crisis which developed among investors concerning among European states, intensifying in early 2010. The article discusses some of the key factors regarding the issue and it also discusses some of the controversies and provides us with solutions.

Scope of work

The article gives the audience brief information about the European crisis, its impacts and solutions. It makes the reader aware of the latest crisis in Europe which is affecting the international market and changing the world cause of the recession.

“Treatments of all Blog Posts” (Abdul Majid Awan)

1. The shift… Blunder or Loyalty to the state?

Over view: The transition from Centrally Planned economy to Free-Market Economy is very time consuming. The process of transition also has loopholes that can be used for satisfying the greed of corruption. The blog-post shows some of the efforts of the Pakistani Governments to move to privatization; some of them proved fruitful while other went down the drain because of corrupting factors.

Scope: This post will help people to understand that the shift from a centralized economy to a free-market economy is a healthy step but it has some infirmities that come in the path. It is not a one-go process, it has a lot of factors which contribute to a healthy shift.

2. Military Expenditure… a necessary evil

Over view: Military is supposedly an institution that is required to safeguard the nation-state from any internal and external threats of assault. In Pakistan the military is playing its role very efficiently but our economic conditions do not allow such high expenditures on military equipments and training. The budget deficit is growing every year but military expenditures never crawl down instead they are always on the rise. The blog-post addresses the role of military in politics and the solutions to cut down military budget to facilitate the process of economic development.

Scope: Readers can get a clear picture of the scenario that excessive military expenditure is causing to our economy. And together with that a subservient part of the blog also shows the role of military in causing political instabilities through the manifestation of military dictators.

3. Corruption… a contagious disease

Over view: Corruption has been an influential part of Pakistan’s political economic history. From the very birth date of Pakistan we’ve been facing the manifestations of corruption in many different forms. The blog-post searches the biggest corruption cases, their history and their after-effects and the jurisdictions against these cases.

Scope: The readers can understand the factors and notions that sum up to facilitate the people to carry out corruption. The role of people, law enforcing agencies and judiciary to question the cases is highlighted.

4. Recycling industry… Takeover by the Afghanis

Over view: Pakistan is one of the biggest consumers of polythene bags and plastics products. The recycling industry in Pakistan is yet not on the most efficient paths. But the basic control has been taken by the Afghan refugees and their young children. The children collect recyclable materials from the garbage disposal places and then the masters sell this stuff at high prices for lucrative profits. The blog-post addresses this problem with seriousness and also focuses on the steps that government should take to legalize the process of collection of recyclable material.

Scope: The blog tries to explicate the importance of recycling industry and it also focuses on the revenue that can be generated thorough this potential industry. It directly questions the role of government which is not showing any special interest in this potential industry which can generate substantial revenue.

5. Unemployment… Political instability is the major problem.

Over view: The clash of ideologies, stance, mandates and race forces the political parties to stay in a state of war. Time span of one hour is enough to turn any city of Pakistan into a battle field. The notable cities of Lahore, Karachi and somewhat less but also exposed to such conditions Islamabad have faced this scenario several times. This condition of fluctuation of circumstances in no time leads the foreign investors to flee away from Pakistan. The impending investors also seek a refuge in other countries because of the wavy conditions of our major capital producing cities. This creates mass unemployment which leads to the menaces of street crimes and robberies. The blog-post seeks to find solutions to this problem of political instability which leads to a very big economic problem.

Scope: The blog post will serve the readers with a dose of the medicine to cure the illness of unemployment and it will question the role of political parties in the production of this problem.

6. Tax Collection… Justly done, billions we’ll earn.

Over view: The problem of tax collection has been evident from the day Nawaz Sharif announced that he pays Rs. 5000 as income tax even after being the owner of big sugar mills and many other enterprises. The blog posts will try to explore the history of tax systems in Pakistan. It will focus on how big fishes of our sea escape easily using their resources. It will also propose a tax system which can be used as an efficient tool for collection of tax.

Scope: This post basically deals with fact that collection of income tax and other taxes leads to an accumulation of capital which can then be used to pay off our debts and can also be applied for development projects in the budgets. The main benefit for the audience will be that they’ll know that if everyone pays his part of tax loyally, we can generate a huge amount of revenue just from tax collection.

IMF's largest loan to the country of the future, Brazil.

South America’s largest country with maximum population, Brazil has been hit by a number of internal and economic crisis, but it did not collapse.

“For so long, Brazil was a nation brimming with potential but held back by politics, both at home and abroad. For so long, it was called a country of the future, told to wait for a better day that was always just around the corner. My friends, that day has finally come. And this is a country of the future no more. The people of Brazil should know that the future has arrived. It is here now. And it’s time to seize it.” Those were the strong and inspiring words of US President Obama during a speech in Rio de Janeiro in March 2011, and rousing applause that followed was proof that Brazilians agreed. Brazil is the country of the future. But when it comes to books, is the situation the same? Are their indeed opportunities for international publishing companies to participate in this gigantic nation’s booming economy?

We are aware of the fact that Brazil is one of the most powerful country in South America in economic terms and thus is leading the other countries in South America. In the global economy Brazil has acquired a strong position as it has large and growing agricultural, mining, manufacturing and service sectors. According to the World Economic Forum, Brazil was the top country in upward evolution of competitiveness in 2009, gaining eight positions among other countries, overcoming Russia for the first time, and partially closing the competitiveness gap with India and China among the BRIC economies. Important steps taken since the 1990s toward fiscal sustainability, as well as measures taken to liberalize and open the economy, have significantly boosted the country’s competitiveness fundamentals, providing a better environment for private-sector development.

Those who have watched financial crises in emerging economies over the past few years would have noticed that there has been a high concentration of financial crises in Latin America. In mid 2002 Brazil’s economy was suffering from persistent fiscal and current account problems due to which the Brazilian economy  was on the verge of a crisis and feared that the economic policies would be significantly altered after the elections. The presidential elections in Brazil in October 2002 had put a great pressure on Brazil’s economy as the left – leaning  candidate would win the elections. The likelihood that Luis Inácio Lula da Silva might win the election caused substantial capital outflows, as markets worried that existing market-friendly economic policies could be overturned. To over come Brazil’s fear of economic decline and being unstable, a stand-by arrangement by International Monetary Fund helped restore confidence, calmed the financial markets and stabilized the Brazilian economy. The loan given by International Monetary Fund to Brazil is the largest ever made by the institution. 

The loan announced by IMF to support the Brazil’s economic and financial program was about $ 30.4 billion. The $30 billion that the IMF lend to Brazil over the next 15 months was in addition to $15 billion that the country received a year ago that was supposed to help prevent its economy from being infected by financial "contagion" from Argentina. Most of the $15 billion loan was already drawn down. The IMF managing director Horst Kohler while making the announcement noted that "the new program will contribute toward ensuring the maintenance of sound economic policies. In this regard, the commitment that the leading presidential candidates has given to the core elements of the program already appears to have helped market confidence. As the next government builds on progress achieved with this macroeconomic policy framework, Brazil could be expected to progressively regain market access."

Lula da Silva’s election victory improved Brazil’s economic and financial situation. The country's new government pursued policies that were both prudent and courageous, combining fiscal and monetary discipline with critical initiatives to relieve poverty. The contribution given  by IMF was basically to restore the confidence so that the new government would have time to put in place its policy framework. Brazil overcame all the challenges coming it’s way in 2002 only through good policymaking and sound choices. This shows that a good political system is one of the most crucial elements to make a claim and important status on the international front as well as bringing one country from rag to riches.

Other countries have received packages that are bigger if bilateral aid from the United States and other wealthy countries is included. But none of them got as much from the IMF as Brazil, and financial markets have often treated pledges of bilateral aid as suspect. Under normal circumstances, Brazil is entitled to borrow only up to about $12 billion from the IMF. Today, the Brazilian economy is reaping the benefits of the continued implementation of strong stabilization and social policies, in the context of a favorable external environment. Real GDP growth is projected to rise from 3¾ percent in 2006 to 4½ percent in 2007. Strong social policies have recently helped place Brazil among the high ranking countries in the UN Human Development Index.


Fizza Kamal (BSS-7)

The Shift...Blunder or Loyalty to the state?

When Pakistan emerged on the world map, Quaid-e-Azam laid stress on the creation of a State Bank in 1948 and it became operational on 1st July 1948; because he knew the importance of a strong and prosperous economy for an impending affluent state of Pakistan.

Pakistan was born with a centrally planned economy where state directs the economy. It is an economic system in which the central government controls industry such that it makes major decisions regarding the production and distribution of goods and services. Privatization is the conception of Free Market Economy in which the prices of goods and services are determined in a free price system which offers prices in accordance with the demand and supply of products. It was introduced in Pakistan in the late 1980’s to increase efficiency of the industries and create a competitive market in Pakistan so as to improve quality at a reduced price through innovative cost-efficient methods.

What we observe in the world as free market economy today it is thought of being used by our politicians for widening their circle of greed. There is a general perception that Privatization for the sake of expanding the scale of corruption was the motive of many governments. But if we analyze the performance of Privatized institutions we see a very contrasting picture. Some institutions have rendered marvelous results while other carried on to the path of demise.

During 2002 and 2003, government started preparation for KESC’s (Karachi Electric Supply Corporation) privatization, which eventually finalized on November 29, 2005 with a 71% transfer of ownership to a consortium of the Saudi Al-Jomaih Group of Companies and Kuwait’s National Industries Group (NIG), with the government still retaining a 26% stake. The privatized consortium was unable to improve the Company’s financial and operational crisis. The privatization of KESC has left us into fits. Since the privatization of KESC we have had an increase of nearly 200% in the price of per unit of electricity and it keeps on increasing till today without any betterment in the quality of delivery.

But if we observe the privatization of PTCL, we observe that since privatization PTCL has emerged as a comparatively stronger product in the market as its graph was going down day by day before the manifestation of ETISILAT (which is an Abu Dhabi based company).

It has developed itself as a strong competitor in the Telecommunication and Broadband industry. The experience of ETISILAT played an important role in this accession of quality.

Now if we observe the Privatization of Pakistan Steel Mills we see clear and evident indications of corruption in the whole process. The consortium involving Saudi Arabia-based Al Tuwairqi Group of Companies submitted a winning bid of $362 million for a 75% stake in Pakistan Steel Mills Corporation (PSMC) at an open auction held in Islamabad. the consortium of Saudi Arabia-based Al Tuwairqi Group of Companies, Russia's Magnitogorsk Iron & Steel Works and local firm Arif Habib Securities paid a total Rs21.6 billion ($362 million), or Rs16.8 per share, to take control of Pakistan's largest steel manufacturing plant..Lowering the costs of a share from Rs. 17.43 to Rs. 16.18 without assigning any reason was a reason that forced Supreme Court to take “Suo Moto” action against its privatization. And it stated in its verdict that “A constitutional court would be failing in its duty if it does not interfere to rectify the wrong, more so when valuable assets of the nation are at stake,”

Likewise the privatization of our banking sector also yielded some good results that have raised the standards of our economy. Banking sector turned profitable in 2002. Their profits continued to rise for the next five years and peaked to Rs 84.1 billion ($1.1 billion) in 2006. Pakistan's banking sector has remained remarkably strong and resilient during the world financial crisis in 2008–09.The credit card market continued its strong growth with sales crossing the 1 million mark in mid-2005. The Federal Bureau of Statistics provisionally valued this sector at Rs. 311.741 million in 2005 thus registering over 166% growth since 2000.

In Pakistan, the shift from a command economy to a market economy is proving to be so fluctuating because the shift is very ambiguous. There are many factors that play an important role in strengthening the roots of Free Market Economy in state. In a society like Pakistan’s, with substantial corruption, privatization allows the government currently in power and its backers to siphon a large portion of the entire net present value of state assets away from the public and into the accounts of their favored power brokers. Without privatization, corrupt officials would have to slowly harvest their corrupt earnings over time. Efficient privatization depends on their being on a very low level of corruption. Also corrupt governments borrow extensively to engage in spending on overly favorable contracts with their backers (or on subsidies or other giveaways). In the end, the public is left with a government that taxes them heavily, and gives them nothing in return. Debt repayment is enforced by international agreements and agencies such as the IMF. Infrastructure and upkeep is sacrificed - leading to a further decay in the economic efficiency of the country over time.

On the concluding note, the shift is very perplexing for a country like Pakistan. Corrupt governments use it to fill their bags of interest, while if a state’s welfare oriented government is brought into power it will still face the problems of transition. What we need to do is go for the second option as it gives us a flicker of hope that a strong economy is a dream that can come to reality for Pakistan.


Abdul Majid Awan (BSS-3)