Cabinet decisions

Providing details of the Cabinet decisions, the Federal Information Minister Sherry Rehman revealed that a 1.2 billion rupee relief package for the textile sector consisting of an extension of the interest reimbursement facility to 30th June 2009 with the spinning sector to be allowed reimbursement at 3 percent has been approved.
She also mentioned approval of support for research and development for the textile and clothing sector but did not mention the amount that would be earmarked for the purpose. Textile sector by virtue of relying on indigenous raw material as well as being the largest export earner in the country brings in valuable foreign exchange.
Additionally, it is also the single largest employer of industrial labour. In this context the decision to provide relief even at a time when the government is suffering from serious resource constraints, is reflective of the justified importance being placed by the government on this critical sector.
Critics argue that the energy and water crisis that besets the country today will continue to negatively impact on this sector; yet it is to be hoped that the government would ensure that the entire sector from the cotton growers' right up to the value added textile and clothing sub-sector are provided with an environment that is geared towards increasing their productivity as much as is possible.
Sherry Rehman also stated that the Cabinet had decided to reinstate all the workers sacked during 1993-96 with their seniority and backdated financial benefits fully paid up. These were employees that were provided employment by the PPP. Those sacked during 1996 to 1998 are also to be reinstated though it is not clear if they would have their seniority and backdated financial benefits restored.
It is unfortunate that the government has decided to take this step in the current economic environment where two major issues render any such politically motivated decision unwarranted. First, donor agencies as well as bilaterals on whom Pakistan is at present heavily relying, in terms of urgently accessing assistance valued at between 5 to 10 billion dollars, have invariably urged the government to reform the civil service in the interest of good governance and a major component of that is downsizing the workforce.
Second and equally important, there is just not enough money in the federal kitty that would either justify or enable the government to increase non-development expenditure. Sherry did note in her press briefing that the Federal Bureau of Revenue (FBR) had crossed the revenue target collection by 9.48 billion rupees for the month of October but with the new targets being set for the budget deficit by donors it is unlikely that this increase in revenue is significant enough to warrant a rise in the salary bill.
The Federal Minister of Information also stated that the Cabinet has approved the ratification of the Cartagena protocol on bio-safety, which would qualify Pakistan to receive a grant from United Nations Environment Programme/Global Environment Facility. Without realising the contradiction, the Federal Minister added that the Cabinet has approved a plan to meet the energy shortage on a fast track basis that would include development of coal as an energy resource.
In a world increasingly wary of the use of coal as an environmentally challenging source, it is unlikely that the government will be able to generate funds externally to develop our coalfields. Sherry Rehman noted that the price of essentials would be monitored and reduced if considered necessary. She added that the government has scaled down the price of ghee by an average of 12 rupees per kilogram to reflect the declining international price of palm oil.
Wheat and sugar stocks will continue to be monitored and the government will take appropriate measures if prices rise, she promised. Monitoring and manipulating stocks to achieve a desirable market price is a policy that has been used by Pakistani governments, past and present, to ensure that the price of essentials remain affordable.
However the root cause of a price rise of essential commodities remains hoarding or smuggling to neighbouring countries because that is a more lucrative sale. It is the practice of profiteering that needs to be dealt with sternly and strict punishment must be meted out to those guilty of indulging in this activity.