11- economics - government college university. economics (pages 29... · a survey of literature on...

The Scientific Ravi 2015 Economics

Government College University, Lahore. 29

Takaful: Islamic Insurance

Dr. Shamim Ahmad Siddiqui

Associate ProfessorSchool of BusinessHamdan Bin Mohammed Smart University, Dubai

A survey of literature on Islamic insurance shows that the subject has reached a level of maturity and some of the questions raised against the very concept of insurance by earlier Islamic religious scholars has been successfully answered. The debate on such questions was conducted on the general premise that any institution developed by non- Muslims could be adopted by Muslims if it benefits them in different spheres of life, and does not involve a transaction that is repugnant to the teachings of Islam.

The permissibility of life insurance had remained the only issue on which a noteworthy controversy continued until very recently. Some objections against the practice of life insurance were raised because of the very use of the terminology “life insurance”!

The term seems to imply that the insurance companies are insuring policyholders against their death! This was is indeed never the case and Islamic insurance or takaful companies have rightly replaced the terminology of life insurance with family takaful to remove this wrong perception. There now seems to be an agreement that the basic problem with conventional insurance is that a significant portion of the companies' assets are based on riba or interest

The primary task of the Takaful companies is, therefore, to make sure that they are not involved in riba. The availability of riba-free assets and their suitability for insurance companies is thus a crucial issue for an Islamic insurance system. It is expected that Islamic commercial banks and other Islamic financial institutions could successfully create non-interest bearing transactions which are not controversial.

A somewhat lesser objection against conventional insurance has been its organizational setup. It was asked how an individual or group of individuals could be allowed to insure another set of people under an Islamic system. It was suggested that an

Islamic insurance company must be set up by the very people who need insurance cover against any probable mishaps. This brought the concept of Islamic insurance nearer to that of mutual insurance companies.

These were developed in the west during the nineteenth century in reaction to the excesses of capitalism and were based on the foundation of solidarity and mutual assistance. However, some mutual companies have been lately converted to traditional stock insurance on efficiency ground.

It has been suggested that organization of a Takaful company should not be a major issue as long as the subject of distributive justice is addressed properly.

There could be three different ways to form a Takaful company:

i) Managers could be hired as mudaribs by policyholders or their representatives and be paid fixed salaries and/or a share in the surplus generated through premium and investments.

ii) A group of individuals can establish an Insurance Management Company and offer their services as mudaribs to potential po l icyholders , and could sugges t alternative surplus sharing arrangements.

iii) A group of people could form a stock insurance company, select its managers and provide insurance services to possible policyholders. The goal of the company would be to maximize profits for its shareholders.

All these forms of organization could be allowed to work and compete with each other under a Takafulregulatory authority that makes distributive justice its main concern.

Intergenerational Dynamics of Marriages in Socio-Economic

Perspective

Imtesal WaheedMPhil Scholar and

Dr. Bilal MehmoodAssistant Professor,

Department of Economics(Excerpt from authors' empirical research)



History repeats itself and so does ignorance. Gay marriages are evidence of it, roots of which can be traced back to Prophet Luut's people. The Ancient Egyptians tended to spend lavishly on marriage ceremonies. Even in current times it is repeated as it is said Egyptian weddings are not just an announcemen t o f mar r i age bu t a l so an announcement of the economic positions of the families. In Pakistan, this ignorance is also being repeated. The government, with a view of imposing restriction on costly marriages, dowry and bridal gifts, enacted the Dowry and Bridal Gifts (Restriction) Act 1976. For breach, this law imposes penalty of one-year imprisonment or forfeiture for up to five thousand rupees or both. Its violation is on the rise. Peoplespend huge amounts of their lifetime-earnings as weddingexpenses of their daughters. Francis Bloch (2004) has evaluated that conspicuous consumption on wedding celebrations signals social-status in a society. Specifically, in Asian countries like India and Pakistan, this so called system of extra generous expenditures has become an economic burden for the society. It is a common belief that a daughter's future would be secure if she is given a dowry as it hides the bride's faults.

The authors have conducted an intergenerational survey from various towns of Lahore. According to survey, we have realized that people of current generation are spending more on celebrating the prolonged and extended wedding functions like “Dholki” and “Bridal shower” rather than on dowry as compared to previous generation. Our preliminary results show that people are spending beyond their financial means on bride's look, food-stuff, decorations, music and photoshoots. Our survey shows the change of composition of the dowry. Due to technological advancement, allocation has shifted from furniture and fixtures to electronic automobiles and real estate.

Our intergenerational survey reveals that in both generations, savingsare a major source of financial resources for a girl's marriage. Parents have saved for dowry of their daughters for many years; in some cases, since their birthsin the form of an asset (plot, etc.).In many cases, support from relatives and other people was found actually a major portion of the total amount spent on daughter's wedding. The key finding was that expenditure incurred on a daughter's wedding leads to excessive borrowings because, on average, parents are driven into severe debts. The ruthless craze of spending on marriage

and dowry is such that housemaids working on marginal incomes also spend hundreds of thousands of rupees on marriages.

Although the law on dowry has been passed, yet it has been continuously violated. On social front, one can see that the nightmare of spinsterhood is on the rise, perhaps partly due to rising costs of marriages. One might argue that spending on marriages and dowry is already a well-established convention. There might not be a way back but surely the way ahead is society of restless parents with perhaps an army of spinsters.

Population, Economics, Science andTechnology – Debating the Future

Prof. Dr. Qais AslamUniversity of Central Punjab

The population of the World has exceeded 7 billion people, the technology of the world has superseded our absolute imagination, and science fiction has been transformed into reali ty. What was unthinkable 50 to a 100 years ago has long been transformed into reality, not only in their military usage but also in their civil usage and even has become part of our day life. Our world has been transformed into a commercial wonder with the technology and capacity to enhance our living standards many fold, but still wars exist, poverty exists, many die of curable diseases every day, still many die of terrorism and wars every day when we think we have technology for making heaven on earth, we have made a hell on this planet for many a human and non-human species alike.

The Population Debate:

In 2013 the Population of European Union (EU) was 506.7 million people, with a combined GDP of almost $18.0 trillion and a GDP growth rate of 0.1%. And of Japan another 123.7 million people with a GDP of almost $ 5.0 trillion and a GDP growth rate of 2.0% A total of 630.4million people living in EU and Japan with a combined GDP of $23 trillion, 60 percent of the population of these countries (or 378.24 million people in these countries) would become above 60 years of age and should retire in 2015.

This also means that these industrially and scientifically developed nations needs labour force for its future economic growth or they would not be



able to keep up with their past economic achievements and remain sustainable economically.

Fig 1: Population of the Leading Nations in Billion People in 2013

From Table 1 and Fig 1, it can be seen that, the top nations by population which also have large but relevantly younger population (in 2013) are:

China - 1.3 billion population; with GDP $9.2 trillion, and GDP growth rate of 8.0% (The World Bank - IBRD, IDA, 2015);

India – 1.2 billion population with GDP $1.8 trillion and GDP growth rate of 5.0% (The World Bank - IBRD, IDA, 2015). USA – 316 million people, with GDP $ 16.7 trillion and GDP growth rate of 2.2% (The World Bank - IBRD, IDA, 2015).

Indonesia – 250 million population, with GDP $868.3 billion and GDP growth rate of 5.8% (The World Bank - IBRD, IDA, 2015).

Brazil – 200.4 million people, with GDP $2.2 Trillion and GDP growth rate of 2.5% (The World Bank - IBRD, IDA, 2015).

Pakistan – 188.4 million population, with GDP $232.3 billion and GDP growth rate of 4.4% (The World Bank - IBRD, IDA, 2015).

Nigeria – 173.6 million population, with GDP $521.8 billion and GDP growth Rate of 5.4% (The World Bank - IBRD, IDA, 2015).

Bangladesh – 156.6 million population, with GDP of $150 billion and GDP growth rate of 6.0% (The World Bank - IBRD, IDA, 2015)

Russia – 143.5million population, with GDP $ 2.0 trillion and GDP growth of 1.3% (The World Bank - IBRD, IDA, 2015).

Total Population of the above named countries including EU nations is 4.55 billion people out of a total of 7 billion World population or 65% of the people living on this planet.

Fig: 2 and Table: 2 GDP of these Selected Countries in Trillion US Dollars

The Economics Debate

It can be seen that the combined GDP of all EU member countries in 2013 was $18 trillion, of USA was $16.7 trillion, of China was $9.2 trillion, of Japan was $5.0 trillion, of Brazil was $2.2 trillion, of Russia was $ 2.0 trillion, of India was $ 1.8 trillion, of Indonesia was $1.8 trillion, of Nigeria was $0.52 trillion. Of Pakistan was $0.23 trillion and of Bangladesh $0.15 trillion.

China

India

EU

USA

Indonesia

Brazil

Pakistan

Nigeria

Bangladesh

Russia

Japan

Total(11)

World

Rest of the World

1.3

1.2

0.51

0.32

0.25

0.2

0.18

0.17

0.16

0.14

0.12

4.55

7.0

2.45



Fig: 3 and Table: 3

It should be noted that the GDP growth rate of China is 8% followed by Bangladesh – 6%, Indonesia – 5,8%; Nigeria – 5.4%, India – 5%, Pakistan 4.4%, while the growth rate of the rich nations is below 3%: Brazil 2.5%, USA – 2.2%, Japan – 2%, Russia – 1.3% and combined GDP growth of EU is 0.1%.

What is being said here is that the growth rate of the industrial countries has slowed down because of its aging population The growth rate of less developed economies of Asia have increased because of their relatively younger population. None of these rich or poor nations have looked into enhancing the scientific and productive capacity of a collective world because all these nations have relied more on wars and production of destructive technologies that on spending on eradiating poverty, hunger and enhancing of education, health and environmental protection across the globe.

Fig-4 and Table-4: Trends of Population, GDP and GDP Growth of the Selected Countries in 2013

The Fig:4 shows that China has high population, high GDP and High GDP growth rates; while countries with high GDP have slow growth rates and countries with low GDP have high growth rates.

Now what can be seen from this data is that countries with younger population do not have people to spare for EU and Japan, because they have relevantly high growth rate and need their own people to match their fast growth rate. All Countries like Pakistan, India, Brazil, Nigeria and Bangladesh has to do in give relative scientific education, skills and technological knowhow to its youth and matching their growth rates they have the potential to grow even faster and become the future economic giants.

It has to be noted that apart from Bangladesh, Indonesia and Japan, all other nations under discussion i.e. Russia, USA, China, EU, Nigeria,

2013

EU

USA

China

Jaban

Brazil

Russia

India

Indonesia

Nigeria

Pakistan

Bangladesh

GDP in Trillion US $

18

16.7

9.2

5

2.2

2

1.8

0.87

0.52

0.23

0.15

GDP Growth Rate

in %-age

8

6

5.8

5.4

5

4.4

2.5

2.2

2

1.3

0.1

2013

China

Bangladesh

Indonesia

Nigeria

India

Pakistan

Brazil

USA

Japan

Russia

EU



India, Brazil and Pakistan not only have large population, but also have a large territory and therefore huge natural, water and energy resources to cater for the growth that these nations want to achieve in 2020, 2030 till 2050.

The Science and Technology Debate:

Stretching the imagination towards science, industrially advance nations of Europe, Russia, Japan, China, and USA have the technological knowhow and capacity to transform their economies and industries into less labour intensive and more capital intensive material production or:

1- Having fully automated industrial units using minimum manpower and maximum use of Robo t i c s , compu te r t e chno logy and atomization for production of producer and consumer goods and enhancement of quality value addition without taking into account the aftermath to unemployed human population in these nations and the rest of the world.

2- Cloning humans to substitute its fast aging population by highly efficient, workforce and soldiers who theoretically are more apt to the work needs of the future industrial and technological age which would mean using more of their combined knowhow in biotechnologies, genetic engineering and re la ted technologies , wi thout having consideration to the related moral, cultural and religious issues purely for economic and scientific gains.

3- Transforming the remaining human power of its younger generation into knowledge economies and service providers by giving high skilled and scientific education for innovation into processing, techniques, management and productivity and creating in a short time frame more PhD's in different fields than just crude labour force. This also creates the need to further enhance and upgrade the computer and mobile technology by transforming and combining them into a glove based fibre optical wonder having multiple usages or just simply creating a human friendly microchip that can be inserted in the brain, run on human energy and enable humans to s imply down load information rather than go through the tedious process of 20 plus years of institutionalized education in schools and universities.

4- Another issue that has come up from the data above is how to protect and preserve the knowledge and knowhow of the older generation, which has accumulated the experience and knowledge of a greater part of the dynamic twentieth century and now are above 65 years of age. Traditional ways of preserving their knowledge, experience and skills like books, research papers, video and audio recordings have proved not be enough source encompassing the entire database of the minds and brains of an entire older generation of the planet. More so because only the very well read have the capacity and care of recording their experiences for the future generation and posterity.

Therefore, in the near future, ways would have to be invented or discovered of how to keep the brains and unadulterated knowledge base of these fast dying age group of men and women alive long after their bodies are dead which would mean either transplant the brains into some machine, robot or computer or use biogenet ics to t ransform these aging individuals into rejuvenated human beings with log lives – the implication of this also have moral and social consequence, because the population of the world would swell far beyond its sustainable capacity.

5- Creating Cyborgs – half humans and half machines out of the population of the world for their future sustainability and survival on this planet by combining all or most of the scientific and technological means available to the present generation in the beginning of the 21st century is an important argument towards creating more productive, more innovative and more conducive to this planet and its fast diminishing natural and energy resources.

The Political and Moral Debate:

Many can argue that I have not been humane in my above arguments, but looking at the state of affairs – political, economic and environmental on this plant and particularly between the countries that I have mentioned above, most of whom happen to be nuclear powers, having large conventional armies and having gone through disastrous for this world's population hot and cold conflicts in the timeframe of past 100 years alone and the amount of human life



and blood that has been spilt for economic, political and religious reasons, I believe none of what I have written above comes even remotely closer to the inhuman way this world has been performing its international and even national affairs, not to mention the capacity of modern economies to keep a large part of their population in misery and poverty for the financial and political gains of the rich and powerful.

Conclusion to my Debates:

In conclusion I am only suggesting that technologies exist to divide the human race into (a) the thinkers and the creators, (b) the workers and the producers and (c) all others who would live and die in poverty and deprivation, those who are not part of this fast diverging technological wonders and knowhow in transforming our lives and ways of living into a mono-cultural cogs running the huge productive machine of economics as semi-human machines.

But on the other hand if we still think that we are rational human beings with superior intellect and mind, loving and caring humane people with beating hearts full of love and compassion for ourselves, irrespective of our ethnicity, beliefs, race or culture and religion, for our natural world, for other living species on this lonely planet, than let us stop and think that this planet and its resources, our knowledge and experience as well as all the technology created by us is to serve us in a satisfying productive and sustainable manner for all on the Globe and not for us to become subservient to this technology and transform this earth – our only home into hell for each other because in our blind faiths of some unseen afterlife we have forgotten that we owe to the children of our children creativity and goodness on this earth, transforming it into the heaven that we crave and not the hell that we are creating in the quest for some worldly material pleasures or some heavenly pleasure of our imagination.

The choice is ours to maketechnology heaven or hell on this earth for us!

Working Women, FAFH and Economics of Health and Fitness

Anum Atiq MPhil Scholar and


Department of Economics:(Excerpt from authors' empirical research)

Becker (1965) views households as both producing and consuming unit where food production is driven by household manager's available time, income and preferences. Working wives place a higher marginal value on time available for household work than nonworking wives. In “allocation of time theory”, he observed that consumers receive utility from commodities that require market good and housework time. Hence there is a tradeoff between food away from home (FAFH) and food at home. Using Benjamin Franklin's quotation 'Time is money', one can understand the rising demand for FAFH in current time-pressed era.

USDA (2014) revealed that in USA during 1970, 25.9% of all food spending was on FAFH; its share rose to highest level of 43.1% by 2012. FAFH gives rise to substantial health and fitness costs, in addition to 'bloated' restaurant-bills. The response to these side effects is reflected in Los Angeles City Council's imposition of a ban on new fast-food restaurants to focus on public health and fast food during 2008.

Pakistani society spends 47.7% of household budget on food (Shaikh, 2014). During the last decade, female labor has increased, adding to family income and leading to less time available for home production. Following Becker (1965), one can safely term increasing demand for FAFH as a partial, if not total, outcome of increasing working women. To verify this, we conducted a survey in the city of Lahore. Preliminary results show that FAFH increases with female employment in addition to other factors like faster urbanization, busy lifestyles and rising family income. Environmental factors such as media, extravagant attitude and social changes are also contributing factors.

Youth these days, undoubtedly, has the highest demand for FAFH, consequently high blood pressure, sugar and heart issues etc., are becoming common among them. Contrarily, a decade ago, such fatal diseases were only confined to senior



citizens. Indeed, in the trade-off between taste and nutrition, the inclination is towards taste (FAFH). Fitness is also a challenge of the current generation. Flat belly has become a wish, even for teenagers of current generation. If flat belly is achieved by spending heavily on fitness centers, head-to-toe slenderness still remains rare. Subsequently, spending on expensive clothes has risen to cloud the lack of physical fitness.

Like, Rosenfeld, authors do not see FAFH as a crime, rather as a lifestyle that has taken its toll on people ' s expendi tures by conca tena t ing expenditures on health, fitness and clothing. Above-mentioned are a few symptoms of 'earn more and spend more' syndrome. Results of this survey draws attention of working females towards their actual contribution household savings. FAFH, when looked through lens of cost-effectiveness, seems imperfect substitute of homemade food. One imperfect solution can be 'healthy' FAFH. One must expect this debate to become a mainstream issue in economics under the umbrella of Economics of Health and Fitness.

Pragmatic Usefulness of ERP Systems

M. Mubashir H. Awan Assistant ProfessorManagement Studies Department GC University, Lahore.

The era of most convenient systems emerged with the advent of Enterprise Resource Planning (ERP) Systems, which entails greater degree of multi-tasking, multi-purpose functioning, user-friendliness and above all, customized solution to the diverse problems of Corporate Sector. To put ERP in place, two major software are available to the industry i.e. Oracle and SAP, both providing state-of-the-art solutions to System Development Complications of the Corporate Sector keeping their specific needs and requirements for the opposite management of their respective operations in due consideration.

Before the inception of such contemporary ERP platforms, there has been a lot of problems and challenges posed to the industry for their internal as well as external affairs. And to keep proper and perpetual record of all forms of transactions and events, concerning all functions/operations of an enterprise, affecting an entity was not so expedient and adaptive. These facilities have provided the

Industry with solutions that provide greater degree of user-friendliness, customization, security, re l iabi l i ty, germane repor t ing and cost -effectiveness.

The uses of ERP Systems are multi-functioning in the sense that their ingestion is not confined only to one or two functions of an organization rather they facilitate and support almost all areas operative within and for an organization. Previously, all kinds of software and systems have been focusing upon one or two specializations of an enterprise, and it was a grim task to logically link and tie various depa r tmen t s ca r ry ing d i s t inc t j obs and responsibilities on a singular apparatus due to which the summarization and reporting procedures require ample amount of exertion, energy, resources and time.

All categories of enterprises especially large-scale and multi-nationals (MNCs) have benefited from these platforms the most as their efficiency and productivity, both in financial and non-financial terms, has risen to a notable extent. Now, they are better able not only to perform but to manage and control their numerous activities and diverse locations throughout a country and globe. Technology and Internet Infrastructures have always been adding value to ever-growing and ever-changing ERP Systems through the provision of automation and connectivity all over the world. Steadfast amalgam of ERP, Technology and Internet long with Auxiliary Devices has shrunk this world into a Global Street where everyone can stay connected, and can share or retrieve ample amount of information from anywhere and as per his/her own specifications and form.

Recording from financing to utilization of funds and from acquisition to disposal of an asset, consumption of economic resources, day to day activities and operations of any nature; classifying the transactions and events upon certain logical bases concerning all departments/functions i.e. not only Accounting, Finance, Procurement etc.; summarizing, communicating, drafting and disseminating various reports, both routine and ad hoc; analysing and interpreting the results of all from of processes and operations; customizing, linking and automating the functions, sheets, documents, presentat ion sl ides etc. ; and interpreting the summaries, charts and graphs, tabular presentations, analyses and reports generated or retrieved in order to organize and control the work activities of all people and systems



on feed forward, concurrent and feedback bases are some of the major attractions and uses of the ERP Systems of the day.

Therefore, now-a-days, ERP Systems are considered to be a multi-dimensional idyllic shell for all form of organizations assisting them for their respective all form of operations, functions and activities.

Ambiguous Role of Super Power in the Light of Two Paradigms: Realism and

Liberalism.

Dr. Saima SarwarDepartment of Economics

Government College University, Lahore

Realism and Liberalism are two important school of thoughts in the discipline of International Political economy. Both of these are two extended margins of a single chord. Realists believe in the use of 'power' by States to acquire more of economic gains in the form of 'Wealth' for strengthening their position in the World. In this way a 'World of Conflict' arises without the role of international regimes like United Nations to bring the World on single platform. For realists only 'power' and 'security' matter and these are the only key factor which decides the international order.

According to the modern supporter of realism, John Mearsheimer, “Great powers…are always searching for opportunities to gain power over their rivals, with hegemony as their final goal.” In short it is believed that politics drives economics in realism. While on the other side liberalists do not believe in the use of influence and coercion rather follow the 'strait of co-operation' through the evolvement and involvement of International organizations. The school of liberalism goes little beyond than realism in its philosophical approach that is power, security and cooperation. The non-state actors, or organizations, play a vital role in facilitating cooperation between states. As Immanuel Kant stated, “The spirit of commerce, which is incompatible with war, sooner or later gains the upper hand in every state.”

________________________________1The Tragedy of Great Powers, New York: W.W. Norton, 2001, p. 29

About liberalism it is thought that in this realm economics drives poli t ics . Before WWI, mercantilists followed the doctrine of realism to fortify the economic structures of their native lands. But the aftermath of this War made the World realized that this is not the right mechanism to hold powers for ruling the world. During interwar period, this realism turned into 'idealism; by its critics and gradually took the shape of 'liberalism'.

Realists believe in 'hegemonic powers' of the nation due to their 'security dilemma' while liberalists follow the path of 'interdependence' relying on harmony, peace and cooperation. Hence in the world of liberalism, institutions have their sovereignty to build a consensus among nations. Realists take states as the only rational and principle actors but liberalists take into account the role of non-state actors as well to maintain the system like WTO, EU, IMF, Al-Qiada, Al Jaish etc…

In the light of all these features of both systems, here is an attempt to evaluate the recent policy of Americans in the present world. The role of Americans who claim to be one of the strongest democracies and a capitalist nation is becoming quite complicated due to its choice between 'policy' and 'practice'. Policy is liberal in both economic and political spheres but the practice is coercive through military interference in the economic structures of many suppressed nations using mantra of 'democratic spring' which in other way round can be called the special interest of a hegemon who wants to see the World according to her desire not as the World requires it.

Apparently it is believed that after the collapse of Soviet Union in during 1960s and 1970s, realism ended and liberalism started prevailing in the unipolar world of Americans. But if the events since that time are penned down then it can be found that US has been the only nation who took independent initiatives for many wars in different regions of the world i.e. US-Iraq war, US-Afghan war, wars in MENA regions like in Libya, Egypt etc. All of them were being fought under different bogus themes like war on terror, wave of democracy against dictatorship and security maximization concerns (as in case of proliferation of Nuclear Weapons for Iran) etc.________________________________2Conflict after the cold war: Arguments on causes of w a r a n d p e a c e , 4 t h E d . N e w Yo r k : Pearson Education, Inc, 2013, p. 142



But if we go into deep then it becomes crystal clear that to gain 'economic supremacy' has been the only motive behind all those activities in terms of either to have access over the natural resources of victimized nation or gain regional hegemon status in those nations which are having strategic locations. US-Iran and US-Pak relations are the biggest example in this context. US is playing its role as very much a rational actor through the use of its hegemonic power but its role is getting quite confusing due to its dual track policy structure. Initiatives for both Democracy and Wars are going side by side. Wars are not being taken only in terms of militancy here rather it's covering the complete domain of 'conflict' which can be in the form of 'forced sanctions' as well.

Such type of acts are practiced for interfering the domestic economies of other nations to cater personal interests. Chinese economy can be seen as an example in this context. However the removal of many trade related sanctions from China by American economy paved the way for the former nation to become the part of non-state organizations like WTO.

But at that stage too, Chinese economy had to face rivalry in terms of new context or theme whether to be a part of this institutions as developing or developed nation, again a preventive action by the leading hegemon. Hence the discrepancy or confusion lies here that on the one side, the institutions of liberalism i.e. WTO, IMF etc. are acting as 'facilitator' and on the other hand the Giant supporter of liberalism is making the use of 'military power' to exercise its influence. Now on the basis above discussion few questions arise; which 'ism' is more conducive for bringing economic peace and prosperity? If liberalist's end goal is to make the world 'peaceful' through cooperation then why the followers of this tenet are actually involved in 'destructive activities' in the world? Such destructions due to the use of power is not letting the world to turn into a 'peaceful globe' rather making it more 'violent' in nature which had been actually the resultant outcome of 'realism'.

On the basis of all these contradictions, can it be concluded that liberalism is not fully contrasting the realism or it can be called an 'enlightened form of realism' by focusing that how US as hegemon is making the use of realist's policy instrument i.e. power for economic concerns? In my view the answers to these few questions can be quite helpful in getting rid of many ambiguities about the present

role of this major super power and most importantly to decide at least whether that nation is truly following the doctrine of liberalism or even here paradox does exist!!!

Why we shouldn't Judge a Country By its GDP?

Khawaja Nabeel AshfaqAssociate Editor,The Scientific Ravi

To some, Gross Domestic Product has become the only measure of assessing Country's Success. 3Michael Green on the Other Hand, says “Social Progress Index is the alternative which ascertains Fundamental Human Needs and Opportunity.”

Gross Domestic Product simply, measures Value of the Finished Goods and Services Produced in a Country in One Year, which has always been hot favourite for Critical Analysts to talk about. But there is a crucial problem associated with GDP. Gross Domestic Product only considers Country's Economic Achievements, its Capabilities and Performance but the Citizen Satisfaction or Prosperity which includes their Welfare is left behind in Dark. GDP has a Loop-Hole which can be maneuverer with only 100 Richest People of your Country, rest Majority of people are as deprived as they were before.

The Social Progress Index ascertains three aspects of its scope. First and foremost is the Fundamental Human needs including Food, Clothing, Shelter; underlying principle of Welfare comprising Education, Health and Suitable Environment and Opportunity to have right to choose, freedom of Speech and discrimination etc.

My theory of this new idea is equally justifiable by comparing examples of these 68 countries on The Social Progress Index. SPI (Social Progress Index) is less unpredictable which isn't going to deviate much largely from year to year.

________________________________3Michael Green has created the Social Progress Index, a standard to rank societies based on how they meet the needs of citizens.



These extraordinary results portrays scores from all three dimensions i.e Basic Necessities; Welfare; and

4Opportunities. Norway which is the role model in itself, is rich in its Natural Resources, having more 100,000 USD of GDP Per Capita ranked first in the list. But this isn't always the case. Abundant Resource-Rich Countries like Kuwait have pretty low Social Progress Index as it seems, they do not share benefits of their wealth.

2) Comparing New Zealand and Norway:

Countries of similar level of SPI can have different levels of GDP Per Capita. Taking a glance at New Zealand, it's Social Progress Score is 87.08 which is almost as high as Norway 88.36, But GDP Per Capita of both these two Countries is telling a totally different story. But GDP Per Capita of New Zealand is Approximately Half of Norway: $32,808 versus $62,448.

Chart1: is the graph of New Zealand and Norway for SPI comparison against GDP Per Capita

Chart 1: Comparison: Ghana vs. Nigeria

________________________________4Green, M. (2015) Why we Shouldn't Judge a Country By its GDP. Retrieved from http://ideas.ted.com/why-we-shouldnt-judge-a-country-by-its-gdp/

On the Contrary to Chart 1, Countries can have

different levels of Social Progress Index even when they share similar levels of GDP Per Capita. Taking a brief look at Ghana doing better on Social Progress Index (58.29) than Nigeria (43.31) but quite surprisingly, Ghana has Lower GDP ($3,864) than Nigeria ($5,423).

Chart 2 is the graph of Ghana and Nigeria for SPI comparison against GDP Per Capita

In the conclusion, Health, Well-Being along with Environment Protection issues are most worrying of all which needs to get addressed at Priority levels. As countries get more economically stable and prosper, it starts utilizing more resources are eventually our ecosystem gets worse-off. Similarly, with Good Health it doesn't only mean better Life Expectancy, rather it also means considering Death Rates which remains unaffected even if you get richer.This totally advance measurement of Social wel l -being is t ru ly worth learning both comprehensively and very strictly which encompasses enriched multiple aspects of social development.

Social Capital: A Driver of Business Development in Cattle Market of Lahore

M. Naeem ShahMPhil Scholar and





Lahore has been a significant place for the businesses and their development for hundreds of years. Pakistan's only metropolitan and second biggest city Lahore has the second largest market of cattle (cattle market Lahore) in Pakistan. Origin of cattle market Lahore is as old as that of Lahore and Domestication of cattle was one of the very initial activities, man adopted in the world after hunter-gatherer life style. The location of cattle market is outside the city area in Shahpur Kanjran on Multan road. The boundary of Lahore has expanded many times, likewise cattle market has also widened and became one of the largest livestock markets of south Asia. Now it is associated with the livelihood of more than 20,000 families.

Cattle market Lahore is a mini Pakistan in a sense that people doing business here are from all provinces of Pakistan. There is versatility in culture, language and norms in this market as in whole Pakistan. People have been doing business here for a long time and most of them have this business inherently. There is versatility in business types as well, some people are doing business solely as sole proprietorship while others are doing jointly as partnership. There are also some registered companies working here.

These people are working differently to other markets. Whole of their business relies on trust, social relationships, cooperation and informal associations. All of their transactions are not on any business letter head pages and even their business deeds are not defined on stamp paper but they only do trust on each other. Their social network confines not only to Lahore but they operate in many cities of Pakistan. Many people work for them for collective benefits. Many people make purchases in their local markets and local farms. They send their stock to Lahore cattle market where their partners sell the same to retailers, wholesalers, road side market shops and individuals on comparatively high prices. People living and working here trusts on their customers completely. Even in new cattle market Lahore no one keeps or takes cash but decides payment mode and place in old cattle market Lahore. Most of these transactions are done on credit basis without any written agreement. Generally whole sale businesses relies heavily on Social capital i.e. trust, relationships, cooperation and informal associations. But cattle market business depends entirely on social capital. Here

social capital acts as a driver for business establishment and its development.

Pak-China Economic Corridor

Salman ZakistFA 1 Year (Intermediate)

From an economic view point, Pakistan enjoys an essential position in the south-Asia. Contextualizing the map of Pakistan, on the north-western side, Khyber Pass provides a route to Afghanistan and the Karakorum highway connects to China. Most central Asian countries are landlocked, and needs an access to warm waters. Pakistan occupies a significant strategic location on the map that serves the purpose. Pakistan`s coastline is in a central position for trading with southern and the far-east and the middle-east region as well. Pakistan also has an easy access to the Central Asian States (CAS's) via Afghanistan. There is also a feasibility of natural Gas Pipeline Project from CAS and Iran to India and South East Asian after passing through Pakistan.

Moreover, Pak-China Economic Corridor that stretches from Gwadar to Western china is a milestone achievement in the current international crisis. Through which Pakistan can earn phenomenal transit revenues and improve ties with other trading partners in the region. There would be immense economic development especially in the frontier areas and it may lead Pakistan to the golden era.

Islamabad will accrue lots of benefits in the form of various bilateral and multilateral agreements for the construction of rail networks, building of new airports, and establishing oil refineries. Moreover, it will reduce traffic on other ports as well.

Gwadar has gained immense importance in the priorities of the global powers exclusively China that carries their crude oil from Middle East and pass through Strait of Malacca that incurs huge transportation fee. It is indisputable that Gwadar has a lot of significant depth that can serve the trade purposes and eventually reduce the freight costs.



China is pursuing to developing their western region through economic development that can bring employment and prosperity to the region. This project would eventually create employment opportunity in Baluchistan, where people are afraid to work. Furthermore, there would be growth of industrial estates and export processing zones. The fish industry would also get new market for export. By this project, Pakistan would not only enjoy trade with china, but it would also open the gateway to Iran, Afghanistan, and CAS.

Socio-economic development is a key to many social evils. Insurgency and political turmoil c a n b e c u r t a i l e d t h r o u g h e c o n o m i c development. Besides the economic and social implications, this passage raised the eyebrows on the Eastern side.

There would be great inflow of Chinese industrial products in the economy of Pakistan. In case of this, demand of the local products would fall to dangerous level and there would fall in exchange rate. The entrepreneur of small scale would not able to run the business in order to stand in the economy. The government has to pay a large sum of money in subsidy and may sell its foreign reserves, in this reaction; the money which is use in other projects would be transferred to increase the demand of local goods, which greatly disturbed the balance of payment and planning of budget. There would be increase in unemployment because of the importing goods and would also have to spend more to provide compensation to the unemployed people. There would be hyper increase in inflation which creates unfair redistribution of income. In other words, poor become poorer and rich become richer.

Breadless Sons, Childless Daughters: Muslim Society after 'Western'

Women Empowerment

Sehrish LiaquatMS Scholar and



Zamanay k andaz badlay gayeNya raag hai; saaz badlay gaye

These lyrics by Allama Iqbal are written in optimist context but regretfully here there is quoted for a pessimistic scenario. Globalization has mainly changed the societies of developing countries and most of Muslim societies. Western notions of Gender equality and women empowerment have increased competition in labor markets. Societies where men are considered the bread winner of family, unemployment plays havoc to their dignity and talent. Childlessness is as dangerous a poison for women as is unemployment for men. But due to increasing encouragement for employment of females and ruthless reform of gender equality, priorities of women are changing. There is a rise of careerist women in Muslim societies who are, on general, reluctant to rely on male partner's income and to bear children. Media has actually promulgating 'greed' in place of 'need' and has presented the Western version of feminism to discourage women from eastern family values.

New Home Economics Fertility theories suggest that women employment suppresses fertility in them (Schultz, 1974). Tertiary education gives incentive for preferring career over marriage and childbearing. Recent evidence including Mehmood et al. (2015) and Farooq e t a l . (2015) confirm female underperformance in economic research and banking sector of Pakistan. Moreover, Weber (1908) observes that 'female advantageous' education help females even in her married life, whereas 'male advantageous' education make t h e m c o m p r o m i s e t h e i r d o m e s t i c responsibilities by consuming much of her time in learning skills that do not get applied in their domestic life.

This adverse situation, arising in Muslim



society, was once observed by Allama Iqbal in Western society. Statistical analysis of empirical data verifies that 'men without jobs and women without children' syndrome is increasing. Further statistical analysis depicts the presence of crowding out of male labor due to influx of female labor in labor markets that have preexisting male unemployment. These arguments can be interpreted as 'male chauvinism' or 'misogyny' but the current situation indicates an act of female to deprive their counter parts from employment and hence themselves from employed life partner – '(fe)male chauvinism'.

Indeed, there is a need to create opportunities for and to educate women about 'female advantageous' education and employment, else nightmare of Allama Iqbal shall become worse where there will be a society loaded with 'Breadless sons and Childless daughters'. We s t e r n w o m e n e m p o w e r m e n t h a s economically empowered women at the cost of male employment. Making men “breadless” has made women childless. Empowerment is desired, but empowerment that at least provides bread to men and motherhood to women. To explain this idea, we float the term for an inclusive sort of empowerment, as “Social Empowerment”.

Importance of Human ResourceDevelopment and Pakistan's

Performance

Hamna Zaheer MPhil Student (Session 2014-16)Department of Economics

“Haven't got an Mphill?” Sorry. You are not eligible for this post!

“Haven't got experience?” Sorry. You are not eligible for this post!

“Don't know how to use a computer?” Sorry. You are not eligible for this post!

“Can you undertake multitasking? No?” Sorry. You are not eligible for this post!

“She could not pass the interview as she could not answer even a single question.” “But she

scored quite high in test…!”

These are some of the statements we hear today, in fact every day. These statements clearly show what is missing or we can say what is demanded today in this fast and high-tech world---education, skills and confidence and YES last but not the least I would like to add a fourth factor that is health, as a person having all above three factors but suffering from any kind of health issues affecting his efficiency, will never be demanded by any one at all. Today, efficiency is one of those important factors that determine one's selection at work place and this efficiency heavily depends on one's health and skills. Considering things on a broader scale lets discuss some facts and figures regarding human resource development i.e. production of skilled, educated and healthy workers, in Pakistan.

Education and health sector is vital for g e n e r a t i n g p r o d u c t i v i t y. T h e r e f o r e , government must be active in spreading health and education nationwide for several good reasons that include higher standards of living through increased productivity, better functioning of democratic process because of more informed and active voters, greater access to low income groups, to achieve the goal of income mobility and many more. But the performance of these two sectors is not much impressive, in fact it 's alarming. The Government has completely failed in providing quality education and health facilities to people. As per the Pakistan Social and Living Standards Measurement (PSLM) survey 2012-13, 70.91% of people in Pakistan prefer to consult private hospitals and dispensaries whereas only 18.57% go to the public hospitals. The rest 9.6% prefer “Hakeems” and other health providers. On the other hand, this survey says that net enrolment rate in Government Primary schools is only 37%.

According to Gruber (2007) when government increases its spending on education in form of free education provision, result is crowding out of private sector. But the quality of education provided by the government is not much satisfactory in Pakistan so we have no such fears. I can quote here some of my personal



experiences that will surely leave you amazed just as they did me. A few years back, teaching a fifth grade student of a government school, I was left in shock and worry when he very confidently wrote “dog” as “bog” but pronounced it correctly and when he was unable to add two single numbers. And to my surprise, at the end of that year this student of mine managed to pass all subjects but got no position and the student in his class who got first position was fail in one subject.And yes! How can we forget the famous 33% passing rate! One more worth mentioning thing is a recently taken initiative of government and my sister's experience as a result.

In order to provide subject guidance and counselling all the government lecturers are supposed to go to government schools and give free lectures to metric students on any of the inter level subjects they wish to study or want to know about. My elder sister also visited a government school I the district of ferozwala and she could not turn her back to the sight where students were taking classes sitting on their feet, I mean literally on their feet, trying to focus on lecture. Can you sit in such a posture and “learn” from the lecture being delivered in front of you? Or would you just pray for the clock to somehow work in fast forward mode! AT LEAST ONE CHAIR IS THEIR RIGHT. These are just a few experiences I have shared. Ghost schools, ghost staff, nepotism, hiring without merit are other forms of corruption and inefficiencies in our government education sector that all eventually affect the students.

On the other hand, the private education sector that is expensive and inaccessible to a large part of society, despite the fact that it offers quality education. But it has its own flaws. The most important missing factor is “confidence building” unlike those only seeking 33% to pass most students here in private sector are in race of getting highest marks and GPA, will I get the medal? Will I get the certificate? That's all they are interested in...

They are more bookish than practical so when they enter the job markets they are rejected in

the world of work. Technical and vocational training also has importance in capacity building of skilled labour force. Skill development is also very poor in both government as well as private sector. Skill development has its own importance as skills of any kind can always help you to somehow find your way and earning your livelihood. For example interior designing, event management, computer/electronic repairing, communication skills and handicrafts are some of the skills that can always help you in earning without having any high qualification.

Now I would like to briefly discuss the other component of human resource i.e. Health. Health sector conditions are also as alarming as educat ion sec tor. The unsa t i s fac tory performance of the government sector and the overpriced private sector is creating unrest in public. The distribution of health services is highly unequal both among provinces and within provinces. As per a publication, the highest number of physical as well as human capital of health sector is found in the province of Punjab and least in Baluchistan and Azad Jammu Kashmir. Moreover, Ahmad and Sheikh (2008) claims that “Pakistan spends 80% of its meagre health budget on tertiary care services, utilized by only 15% of the population and 15% on primary healthcare services, used by 80% of the population.” Curative instead of preventive health policies are the hallmark of our health sector. In short I can summarize our health sector in four words: corrupt, inefficient, underfunded and expensive – where the first three are the features of public health sector and the fourth one is that of private.

I would say the basic problem lies in the behaviour and vision of the top authorities. They always just “spend” on education and health, whatsoever that little amount they spend whereas the individuals know that they are “investing” in the education and health of their children. Government should also consider these expenditures as investment, an investment that will definitely lead us to long run positive consequences. Example of Gramene bank of Bangladesh can be quoted



here where their long run planning of human resource development eventually gave birth to doctors and engineers whose parents used to be beggars at a time.

Another problem is that, here in Pakistan the rule of “decision based evidence making process” is always applied instead of the “evidence based decision making process” that is followed by those who are today known as advanced and developed both in terms of human as well as physical capital. For instance, according to the World Bank report (2011), Japan's total wealth consists of around 81% intangible capital (human capital), 12% physical/produced capital, 8% foreign assets and only 1% natural resources. Moreover, in America, from the time period of 1944-1980, the two third of output produced was attributed to human capital, innovation and improvement in science and technology. That is to say that our government must also make health and education top priorities in order to catch up with the rest of the world.

Economic Growth, Poverty and Terrorism in Pakistan

Saddam Ilyas MPhil Scholar, Department of Economics

Since September 11, 2001, the whole world is under threat of terrorism and Pakistan is no exception to it. Due to the hostile neighbors (especially India and Afghanistan), geo-political importance, diverse ethnicity and culture, weak political, economic, religious, and social institutions, Pakistan is the country that is largely affected by terrorism.The past one and half decade has witnessed a significant rise in incidents of terrorism in Pakistan. According to the facts and figures of South Asian Terrorism Portal, more than 33,000 casualties have been recorded during the time period 2003-2011. The war on terror has costed Pakistan a collective loss of around $68 billion (Pakistan Economic Survey, 2010-11).Global Terrorism Index Report (2014), reports that

80% of total lives lost belonged to Iraq, A f g h a n i s t a n , P a k i s t a n , N i g e r i a a n d Syria.Pakistan is ranked 3rd after Iraq and Afghanistan for the risk of terrorism.

Statistical analysis of annual frequency data over the period of 1970-2013 from GTD and WDI reveals long run relationship among economic growth, poverty and terrorism in Pakistan. It is difficult to define either poverty or terrorism due to their subjectivity. Thus for definitions this study relies upon some widely accepted sources. Sen (2000), defined poverty as deprivation of opportunity. Global Terrorism Index defines terrorism as the threatened or actual use of illegal force and violence by a non-state actor to attain a political, economic, religious, or social goal through fear, coercion, or intimidation, (World Terrorism Index Report, 2014). In recent times, poverty and terrorism have become two important bearing on economic growth. Current situation is evident that the poverty in poor countries fuelling terrorism (Meierrieks & Gries, 2013). Poverty and terrorism are considered as limiting factors of growth. These two socio-economic evils are responsible up to much extent, for the economic mess created in Pakistan.

The causality analysis shows that there exists a bidirectional causality between poverty and terrorism i.e. both poverty and terrorism are mutually reinforcing factors. When a terrorist attack happens there occurs a small or large scale massacre. It ruins several people by destroying their business, houses and properties. It leaves people vulnerable or may be destitute. Lipset's law regarding poverty-terrorism nexus is found evident for Pakistan, where poverty is causing terrorism. Just as an incidence it is observed that most of the madrassa students who later become terrorists were from poor backgrounds. There relative deprivation was the factor to induce them towards terrorism.

Scientific inquiry suggests, that government should take steps to improve economic condi t ions . The flow of government



expenditures should be towards the reduction of poverty. Research and development expenditures should be diverted towards societal development projects rather than to finance military operations.

Conservation of Water forSustainable Development

Mahvish MuzaffarM.Phil Student (Session: 2014-2016)Department of Economics

Despite being agricultural economy 1/3rd of agricultural potential of Pakistan remained untapped. While having 70% rural population, farmers are renouncing irrigation. Asia's 3rd largest producer of wheat has to import wheat even from capitalists and industrialist nations because people in deserted areas i.e Thar people are dying due to starvation (Economic Survey of Pakistan). Yes! Rationale for such predicament is water crisis. It's time to confess that Pakistan's name has pierced into the category of ten water scarce nations (WB). This is a gigantic menace to already dwindling economy of Pakistan.

As Pakistan is predominantly an agricultural economy, according to the economic survey of Pakistan, it presently contributes 24% to GDP growth, employs 48% of the country's workforce and 70% of country's exports. But the dearth of water is a great hindrance for sustainability of economy. According to the World Bank (WB) and Asian Development Bank (ADB), Pakistan has declared as “water stressed” country. A World Bank report (2012) probed into the fact stated that per capita water availability has fallen from 5000 cubic meters (cm) to 1000 cm in Pakistan which is alarming. While in US its 6000 cm, in Australia 5500 cm and in China its 2200 cm. This situation has continued to exacerbate since the Indus water treaty (IWT). India is controlling the water flow of Indus, Jhelum and Chenab rivers that surge from India to Pakistan. It is posing a great hazard to the survival of economy.Pakistan is blessed with more than sufficient water

resources. Water streaming down from the world's largest glaciers of Himalayas and Karakoram heights, bestowed Pakistan with the largest irrigation system of the world which hose over 16 million hectors, out of 34 million hectors of cultivable land. Water from rainfalls and floods stored in three major reservoirs Mangla, Tarbela and Chashma utilized for irrigation and hydroelectric power generation which demands whopping 97% of total water, for human consumption which requires 2% water and for industrial usage that needs less than 1% of water. The much needed 38 MAF sweet water has wasted by throwing directly into the Arabian Sea (IRSA).

Scarcity of irrigation water coupled with mismanagement has become the burning issue for Pakistan's agricultural economy. The countries like Pakistan, where small farmers who grow crops for their livelihood & survival, where monsoon rains are the lifeline of Indus water system, which not only endow the national power supply but also meets the requirements of irrigation for seasonal crops, whose economy & exports are overwhelmingly depend on rainfalls for yield of crops, monsoon precipitation could have a catastrophic impact on socioeconomic conditions of the country. Thus, conservation of water is dire need of the hour.

With the reduction in Indus water flows, most of the rural Sindh is in a grip of severe economic downturn. People are unable to cultivate their lands due to lack of water and have started to use ground water resources where feasible. Tube wells have become inoperable and they need to spend more monies to deepen the wells. The situation is so bad that people are quitting cultivation altogether as it is not profitable anymore. Recent surveys have been estimated that about 2.5 million acres of land is close to devastation after remaining uncultivated.

Allocation of insufficient water is highly controversial. Farmers who have first access can take a lion's share of the water. Since water is not priced based on usage, there is nothing to discourage waste and overuse. Load shedding



greatly affects water pumping. Water logging and salinity in Indus Basin River, leaching of salts by excess irrigation is also a setback. This has led to reduction of crop yield overall to 25% but Sind yield has fallen to 40% to 60% (Economic Survey of Pakistan). Overuse of water in agriculture is one of the major problems in Pakistan. But productivity of water in Pakistan is counted as one of the lowest in the world. This is jeopardizing the sustainability of agriculture sector and will have negative economic repercussions.

What aggravates the water crisis is climate change; temperature is anticipated to increase 5 to 6o C at the end of 21st century. The Himalayan glacier ice melt replenishes the Indus River's annual freshwater, approximately 3.3 feet per year due to global warming. Consequently, irrigation will get forfeited; Food insecurity has already risen for a population of more than 180 million that is likely to swell to 250 million by 2050, as per capita availability of wheat will reduce from 198 kg to only 84 kg per annum by 2050. It would ultimately lead towards higher inflation rates and lower real income. Although Pakistan's food production had attained self-sufficiency in food during the 1980s, however, irrigation water shortage proved obstruction for sustainability.

When it comes to water infrastructure negligence is at its climax. Pakistan practices a cycle of “Build/Neglect/Rebuild”. Existing water storage infrastructure built in 1960's and 1970's is aging having storage capacity of only 30 days, against the minimum requirement of 120 days while most of the developed countries have 1-2 years' water storage capability (WB). According to MTDF (2010), the storage loss due to sedimentation in reservoirs would be 6.03 MAF which would be 33 percent of the gross storage capacity. Plan for building new dams have been haunted by provincial tussles. Sindh question the withdrawals and feel that it is either being deprived or will be deprived of its share of water by Punjab. Therefore, every plan is viewed with a sense of scepticism.

Regional impacts are also harming the agro-economy of Pak i s t an th rough wa te r deprivation. As India is controlling the river waters is testimony to strangle the Pakistani agr icul tura l expor ts and increase i t s dependency on food import. Construction of Baglihar dam enticed India to reduce water supply by 0.2 MAF, along with the other projects, having a negative impact on the crop yields.

Repercussions of existing water scarcity could be disastrous as; whole country has major dependency on agriculture and agro-based industry. Concurrently; global warming, depletion of ozone layer making water a rare asset. By raising temperature, evaporation will continue to enhance followed by deforestation, desertification, bio diversity is at risk, loss of marine & wildlife. Scarcity of irrigation water, colossal loss of land due water, desert areas of Punjab such as Cholistan, Thal, hill torrent areas of Punjab and KPK, D.I. Khan, DG Khan, Thar in the Sindh province and Chagi-Kharan in Balochistan, are about to increase by 27.8% as stated by South Asian Conservation Agriculture Network (SACAN).

Undermined quality of drinking water is also leading to health problems. The National Conservation Strategy (NCS) report indicates that about 40% of deaths are related to water-borne diseases. Polluted water offers the spread of diseases; like abdominal pain, hair loss, numbness in hands, loss of appetite, eye infections, irritation on skin and fever. According to UNICEF (2010) estimates, 200,000 children in Pakistan die annually due to diarrheal diseases alone. Meager budget allocation to health sector has worsened the situation as major asset for contributing in development (human capital) is dying due to mere slackness of government officials.

The ominous threat of water scarcity is an issue that is rarely talked about in Pakistani politics; it must be taken as humanitarian crisis. As water is a lifeline, it affects everyone in every aspect of life and its dearth can paralyze agro-economies. Think tank must design water



visions and policies in accordance with the post IWT 1961 and Indus water apportionment accord 1991 scenario. Comprehended laws to endeavour to bring all provinces on same page, resolve disputes with cross border territory to have adequate water.

There is a need to impart awareness about c o n s e r v a t i o n i n m a s s e s a n d e n s u r e transparency in water distribution amongst the provinces. Improve domestic water quality, harness hill torrents, and confine water pollution. Devise regulations for ground water usage to check lowering of water table and water logging. Improve ins t i tu t ional framework and make that highly integrated.

As Pakistan is presently sixth most populous country of the world, its agriculture sector will have to grow more than 4% to ensure the food security of the increased population (ADB). To elevate crop production, and exports, water availability must be ensured to water scarce and desert areas. Desert areas must be developed following the models of Alien (UAE), Ghobi (China) Rajasthan (India) and Dasht-e-Kavir (Iran); where fruits, vegetables and cotton has been grown successfully.

Water availability must be ensured for the farming country. Hence construction of big dams like Kalabagh is inevitable to save water for coming generations of already water scarce nation. Now what politicians are waiting for? These timely measures are crucial to save country from deprivation of water, to attain the full agricultural potential, to absorb the emerging labour and will let the agricultural economy undeviating outshine.

Pursuit of Happiness: A Wild Goose Chase

Zartaj Kamran KhawajaMPhil Scholar and;



Happiness is not something ready-made; it's something to strive for. Various religions and philosophers describe the way to happiness. Buddhists were of the view that the only path to happiness is to reduce the sufferings of the people. According to Aristotle happiness and its constituent parts include friends, family, wealth, bodily excellences etc. Later Epicureans like Aristotelians embraced the concept of Eudaimonia according to which good indwelling spirit is the key to wellbeing; where according to Al Ghazali, “He who knows himself is truly happy.”

In economics utilitarianism refers to the concept of happiness and Jeremy Bentham, founder of modern utilitarianism, elaborated it as, “Greater happiness for greater number of people”. Now happiness is just not a p sycho log i ca l phenomenon , i n s t ead economists are also working on the practices which will help in escalating the levels of happiness of the individuals. Modern economists are more concerned about Gross National Happiness instead of Gross Domestic Product, which according to them is the better measure than GDP for the welfare of people.

Survey has been conducted by us to analyze factors that affect the happiness of individuals living in the city of Lahore. Some results were very startling like aspirations play a dominant role in determining happiness. That is why most of the people are unhappy as compared to others r ega rd ing t he i r i ncome and cu r r en t employment status. Additionally, positional goods are taking individuals to a point that they are not happy with their incomes and jobs.

Set point theory of happiness state that people stay happy because of the genetic disposition where life events play an important role in increasing or decreasing the level of happiness. Our preliminary findings show that those life events include getting married, engaging in religious and recreational activities, bad health due to serious accident or age factor and any terrorist threat or activity.



Though somet imes people don ' t l ike circumstances around them but still they adapt them. On a bitter note analysis showed that people are very unhappy about the rising prices of goods, about the taxes being imposed in every budget and the environmental conditions around. Still people of Lahore adapt to live in these situations.

Surprisingly it has been observed that many people with low socio-economic conditions show greater happiness level as compared to people with high status. Here the concept of absolute and relative happiness plays a significant role. Absolute happiness of individuals with low socio-economic status is seen to be greater than their relative happiness where it is completely opposite in the case of the people with high socio-economic status.

Modern research might be able to elucidate the determinants (economic and non-economic) of happiness but pursuit of happiness might be a limited approach. As Hazrat Ali once said, “Lucky is a man who is happy with his destiny.”Russian novelist, Leo Tolstoy, rephrases these words as “If you want to be happy, be”.In point of fact happiness related to material goods, relationships and worldly affairs is temporary, real McCoy is internal contentment.

An Essay on the Relations ofPakistan with the IMF (2008-2014)

Aisha RehmanMPhil Student (Session 2014-16)Department of Economics

After the global financial crisis in 2008, oil, food and other commodity prices rose rapidly adversely affecting the economies of the world. According to a World Bank report (2011), advanced economies' real GDP fell by 7.5% after the crisis and emerging economies as a whole declined by 4%, and this trend continued till the first quarter of 2009. While low income countries felt less direct impact due to relatively weak linkages to the global economy.

As for decades, Pakistan 's growth is consumption led and debt driven, so it was buffeted by large shocks which worsened the macroeconomic indicators. Growth rate declined to 40%, lowest in South Asia. Due to higher international prices, fiscal deficit rose to 7.4 %, inflation (CPI average) rose to 20% and a sharp decline in the international reserves was observed. Foreign investment faced a huge decline of 32%. All this led Pakistan to the IMF doorstep once again.

PPP Era

On 24th November 2008, Pakistan authorities and IMF staff agreed on a 23 month Stand-By loan worth $7.6 Billion(SDR 5.169 Billion -currency of IMF). The conditions attached with the loan were to tighten the macroeconomic policies (Monetary and Fiscal), phasing out the electricity subsidies, reduction in foreign exchange market intervention by SBP, working towards the elimination of inter-corporate circular debt and adoption of a single Treasury account.

The major goals were:

Ÿ Bring down inflation to 6 percent in 2010.

Ÿ The fiscal deficit, excluding grants, be brought to down from 7.4 percent of GDP in 2007/08 to a more manageable 4.2 percent in 2008/09 and 3.3 percent in 2009/10.

Ÿ Increase spending on social safety nets from 0.6% of GDP to 0.9 pc of GDP.

On August 7, 2009, second review under SBA was completed and financial support was increased to $11.3 Billion (SDR 7.2359 Billion).when programme came to an end, Pakistan requested to IMF to extend the period to September 30, 2011 so that reforms in General Sales Tax, important measures in the course of fiscal policy, and amendment in the legislative framework for the financial sector be done.



At the end of the programme, IMF staff mission released the following comments “Indeed, economic performance has weakened and external pressures are mounting. Real GDP expanded by2.4%—far below the estimated 7% with inflation persistently in double digits. Unemployment is high while poverty incidence is at worrisome levels. Efforts to boost revenue mobilization were once again frustrated by a lack of political support, and the fiscal deficit widened to 6.6%The SBP's foreign exchange reserves have declined by about $2billion in the last six months.

PML-N Era:

To cope with inflation, slow growth, declining reserves, and increasing fiscal deficit, the newly elected government sought help of IMF. On September 4, 2013, a 36-month extended arrangement under the Extended Fund Facility (EFF) worth US$6.68 billion (SDR 4.393 Billion)approved by the Executive Board of the IMF. This programme also came with some conditions such as to liberalize the trade regimes, privatization of public enterprises, Adjustment of electricity tariff (reduction in development spending), increase in taxes, Reorientation of monetary policy to build foreign reserves and sound policies to protect the most vulnerable in the society.

Presently this adjustment programme is continued, 6th review is completed on March 27, 2015. Economic indicators are improved i-e Rupee value is relatively stable, fiscal deficit has reduced to 4.7% of GDP, Growth was 4.14% in 2014 which is highest in the time period being analysed. All this bodes well, but still our economy is at take off stage, with large room for development such as boosting investment, increasing revenue and decreasing debt servicing etc.IMF releases the following statement after 6th review

“Progress has been made in restoring economic stability, improving growth prospects, and reducing crisis risks”.

As we compare the both time periods, we come to know that in PPP era, although the

programme was completed but it didn't restore the macroeconomic stability. Neither of the goals was achieved. IMF staff mission report also highlighted the failure of the programme. While PML-N government seems more serious in structural reforms in order to meet the conditions and to make the economy stable. IMF staff mission report has shown somewhat satisfaction on its 6th review of the programme.

Conclusions:

When we deeply analyse the reasons behind the unsuccessfulness of the programmes, we are known that faults are not on just one side, imperfections exist on both sides. Some of these are highlighted here. The major flaw exists in the conditions which are a major impediment to human development in the member countries, because they emphasize large-scale cuts in development expenditures. On one side, it stresses on increasing the spending on social safety nets, providing employment opportunities and to protect the impoverished while on the other side of the picture are the conditions i-e to cut the subsidies, to increase the taxes, to downsize and rapid privatization of public enterprises even the authorities know these measures have direct impact on the poor segment of the society. They pretend to be sincere with the lending countries, but actually their objectives are very frightening. As American Economist, “John Perkins”, in his book “Confessions of an Economic Hit man”, have veiled out the deceptive nature of aids. “The loans of foreign aid ensure that today's children and their grandchildren will be held hostage. They will have to allow our corporations to ravage their natural resources and will have to forego education, health and other social services merely to pay us back.”

To better the health of world economies in the short term is the objective of IMF, while Pakistan seeks a long term solution to its financial problems. So the contraction policies fail to stabilize our economy in the long term. Other problem lies in our governance which is all time corrupt and poor. So the loan benefits to



rich in lieu poor and the vulnerable.

Miss You! Dr. Philos. Iqbal

Dr. Bilal MehmoodAssistant Professor, Department of Economics

Iqbal Teray Dais Ka Kiya Haal Sunaoon…Iqbal, how deplorable is the situation of your

homeland…

Following imagery is meant for self-correction and to wake up the Dying 'Ravianism'.

“I really miss you in this epoch of 'pseudo intellect' and I want to tell you what happened after you!

You single handedly created a revolution, while your homeland has hundreds of doctors, and not only your homeland rather whole Muslim community suffers with ignorance and is being oppressed.

Your writings are taught as subject in Europe, while in your homeland, doctors replicate researches conducted in Europe.

You were not dependent on the title of doctor, while doctors of your homeland consider themselves valid after doctoring their names only.

Your simple dress was your identity, while doctors of your homeland are recognized by only the dressiness of their attire.

You used to be available to all who needed consultation, while doctors of your homeland cannot be met without a prior appointment.

You took pride in your origin and your name, while doctors of your homeland change spellings of their name in foreign countries to hide their origin.

You were satisfied with a charpoy and hookah while, while doctoral candidates in your homeland become doctors for a 6-digit salary.

You spend years in earning doctorate to contribute to society, while daughters in your homeland complete doctorate in wait to marry

up.

You revolted against the foreigners and invaders for ideological and constitutional freedom, while doctors of your homeland are ideological slaves.

Your thoughts and dreams won us this separate homeland, while doctors of your homeland cannot take guard of it.

Your poetry woke a whole sleeping nation, while doctors of your homeland cannot navigate a stray youth.

You wrote to promote the Muslim community, while doctors of your homeland write to promote themselves in the community.

Your recitation used to make pages of our Holy Book wet with your tears, while doctors of your homeland are oblivious of the richest reservoir of true knowledge.

I wish you were here. That is why, I miss you!”

I am afraid that there has been only one Dr. Philos. Iqbal and there will be no other.

Hazaron saal nargis apni benoori pe roti haibardi mushkil say hota hay chaman mein

deedawar paida

Narcissus laments its blindness for millennia, (because)

Once in a blue moon, one with great vision is born in the garden.

Rather closing on this pessimist note, I see a ray of hope emitting from every soul. It's because, Iqbal is not just an everlasting legend in himself only, rather a Philosophy.

Khudi ko kar buland itna ke har taqder se pehle Khuda bande

se khud pooche bata teri raza kya hai.

Elevate yourself so high that even God, before issuing every decree of destiny, should ask you: Tell me, what is your intent?

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