Friday, July 30, 2010

Why Pakistan Railways is collapsing?

We keep hearing these days of a large number of trains being shut off by PR.The ostensible reason,probably,is losing money on certain uneconomic passages.Will PR come into profit after such a massive closure and pruning of service coverage and level? It is doubtful that it will.I am no expert on Railways,but it is widely known that massive corruption and leakages are mostly responsible for its predicament.

PR is not expected to run into profit.Instead of earning a profit,the excess revenue of such service organisations should bring down the fares? But PR is in massive RED and has to be bailed out through subsidies.Indian Railways ,some eight times bigger than PR in almost all respects,suffered from similar and comparable problems.Lalloo Parsad,the same former flamboyant and corrupt Chief Minister of the poor Indian State of Bihar, and now the minister of Indian Railways for some years,has transformed IR into a profitable entity without increasing the fares and service level.Honesty is not his strength, to say the least.But probably Efficiency is.IR is full of bureaucracy,perhaps even more than PR is.Lalloo utilised the same people and turned IR around.

This brings some hope.Lalloo's Pakistani counterpart could do the same.It is worth going to India and learn a few lessons from the turn around of IR.Ther is a big market and need for the poor and highly densely populated countries like India and Pakistan , where massive urbanisation has occurred , creating massive markets for cheaper travel services.Air Travel ,at least in Pakistan,has become awfully expensive.Not only the poor ,but higher economic classes and businessmen and their executive would find it appropriate to travel by cheaper Trains.

There does not appear to be a basic unsolvable problem.The concerned minister has to apply his mind and energy.You donot have to be a Railway genius.If Lalloo can do it ,our lesser lalloos can do it as well.

Haq's Musings: In Memory of Farooq Nadeem and Naseem Aftab

I knw mr farooq nadeem through my dad as they both wer in the same uni of NED and the day this thing happnd me n my mom wer with annie aunty at their home any way may GOD bless thm

Thursday, July 29, 2010

Is Land Reform off the Menu?

Pakistan made two attempts at Land Reforms, once by General Ayub Khan and the other by Z.A.Bhutto.Not much was achieved, hence no further attempts were made in this respect,even by PPP governments.Presently a modest Kutcha land distribution programme is being implemented in the province of Sindh.The rationale for land reforms would remain as long as there is grinding poverty,millions of Landless peasants and under-utilisation of the land possessed by the big and super landlords.
In Pakistan,28% of the total landmass is being under cultivation, and huge chunks of land remains unutilised.About 6.6 million households own 6.6 million farms over a total Farm area of50 million acres.Only some 80% of this farm area is actually cultivated.The remaining 20% of the farm area remains uncultivated.Small farms utilise upto 95% of the available farm land, while larege farms owned by big and powerful landlords remain uncultivated to the extent of almost 50%.A total of 2.66 million acres of farm area remains uncultivated in the large farm category(100 acres plus). This is more than 25% of the total unutilised farm area and is potentially distributable.Some 30,000 landlord families could benefit one million landless families,if uncultivated land is given away to the latter under some Land Distribution Scheme ,if not land reforms exactly.In Land Reforms, usually land is forcibly taken away under legislation or revolution without any compensation.
There is also a case for bringing more land under agriculture.Perhaps ten million more acres should be added by new land expansion and development activity probably in the next ten years.This would mean one million acres per year of new land to be transferred to the landless.One would argue,where would the water come from? We are already short of water.We are currently wasting water under existing flood irrigation practices.The new land under the landless families would be from the very beginning on more efficient Drip Irrigation(D.I.),which may be cheap as well as efficient. The landless poor beneficiary would be more inclined and capable to introduce bucket and pipe drip irrigation.He would not have much choice.He does not have many choices in life either.
Thus about 14 million acres of land(10 million new and 4 million existing unutilised) could be distributed among the landless over a period of some ten years, benefitting 5-6 million families, with a farm of 2.5 acres each,practically solving the issue of landlessness,if not of poverty totally.Even after getting 2.5 acres ,he would not be totally out of the clutch of the grinding povert.But he would get hope and the tools,to handle the economic problems of his family.

Pakistan would need more land under cultivation to feed its ever increasing population,as productivity increases are too far and few.Th dis-economy of scale,if any, of the small farms should be taken care of by an organised Cooperative movement that should take care of the credit and inputs.Land is the only thing that governments can afford to give free,may be charge some development cost in the long run under a concessionary credit scheme.Land remains on earth.It does not evaporate and does not disappear.It is an excellent collateral for the poor.After all if a country belongs to its people,they should all own some piece of land,however,small it may be.

Land has been distributed in Pakistan among the rich and powerful, and literally given away at dirt prices.Some effort would have to be made to include the poor in this largesse.There is a mass appeal and appetite for land confiscation by the state without compensation.Hence the two attempts at lad reforms,even though unsuccessful.Any new land distribution scheme should be careful and respect the federalism requirements and the local and regional rights.It should not import people from the outside ,unless in special cases, where demand and supply gaps may exist.

Islam may be respecting and even protecting private property ,but perhaps not an oppressive feudalism.Perhaps absentee ownership of uncultivated land does not come under the Islamic provision and protection of private property.Many Islamic Jurists have argued and quoted Quran as affirming that" Land belongs to Allah". Revisiting of the earlier Fatwas is in order and Ijtehad and a new consesus required ,especially now that the threat of Godless Communism is gone

On the other hand the big landlords may be induced by the State to do away with their excess unutilised land by imposing a variety of taxes including the much dreaded and opposed Income Tax .Excess land can be acquired by provincial governments under a land bond scheme carrying a reasonable interest rate.The poor land allotee may also be required to pay off a part of the land price under a concessionary credit scheme.Similar schemes have been implemented in Japan,Korea and Germany immediately after the second World War of 1945.