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Asian Development Blog: Five Ways to Strengthen Public Financial Management Systems and Drive Reform

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Development Asia: Designing a Comprehensive Public Financial Management Reform Plan for the Philippines





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Rice Contract Farming in Lao PDR: Moving from Subsistence to Commercial Agriculture

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Finance and Development: Financing Township and Village Enterprises in the People's Republic of China

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Trumped again

DONKEYS are reputed to be stubborn beasts. That possible misinterpretation of their instinct for self-preservation characterises a party that has utilised Equus asinusas a symbol since Andrew Jackson embraced a hostile description of himself as a jackass back in 1828.

The Democrats’ election symbol might be an insult to a species whose intelligence has been underrated since donkeys were domesticated 6,000 years ago, but its traditional implications accurately reflect the party hierarchy’s mindset after last week’s devastating defeat.

The post-mortems began pouring in as soon as it became obvious that Kamala Harris had been trounced by Donald Trump. Yesterday, the president-elect was due to be hosted in the Oval Office by a man who had described him as a dire threat to democracy.

Joe Biden’s claim wasn’t exactly inaccurate, but it ignored his own party’s contribution to the promotion of plutocracy. It may not have been initiated by the Democrats, but they ran with the neoliberal trend exe­mplified by the Reagan administration.

The Democrats have enabled him once more.

Bill Clinton and Barack Obama lent their imagined heft to the Harris campaign, and both ignored the issues whereby their presidencies led, respectively, to George W. Bush and Trump. The Clinton presidency did not deviate all that much from the Reagan era, and Obama effectively pursued both the neoconservatism and neoliberalism of his Republican predecessor.

No one can claim with any certainty that the 2024 result would have been different had Biden butted out after the 2022 midterm elections, in which the Democrats did not fare quite as badly as the polls and the mainstream media projected, but they might have made amends that bolstered their support two years later. No such luck. Biden did propose some healthy measures on the economic and renewable energy fronts, but they made no immediate difference to most of those who were suffering from the consequences of the Covid pandemic and its inflationary aftermath.

The Democrats offered no alternative to the status quo beyond gradual improvement over the years, bolstered by pundits who proclaimed that the economy was going gangbusters, with rising employment and declining inflation. Too many voters did not feel the joy that Harris sought to project, recalling that their grocery bills were lower before Biden took over. Among the many promises Trump is unlikely to fulfil, he vowed to bring down grocery bills, cut taxes and end all wars.

Back in 2016, he emerged as a potential disruptor of a status quo that wasn’t working for most Americans. He could not reclaim the perch in 2020, after four years in power. That he was able to achieve a far more convincing victory than eight years ago is a testament to the decrepitude of the Democrats.

That does not only mean that Biden ought to have ruled himself out a couple of years ago on the basis of his senescence, but also that his successor should have diverged from a self-defeating formula by offering viable alternatives to both an economy whose supposedly thriving aspects are not trickling down to most voters, and to a foreign policy that involves prolonging a nasty war in Europe and promoting a genocide in the Middle East.

Harris focused, instead, on slamming Trump and saying that she wasn’t Biden — the latter of which was obvious given her gender and ethnicity, but less so when it came to her ideology. Much of the Democratic elite that has ridiculed Bernie Sanders for accurately claiming that the working class was only returning the favour when it deserted the De­­mocrats have also claimed that Har­ris ran a wonderful campaign but was der­ailed by unavoidable obstacles. That’s nonsense. It’s true she had only 100 days to stake her claim, thanks to her geriatric chieftain’s obduracy and his party’s inexplicable obeisance, but her rallying cries consisted of little more than hollow platitudes, and her oratorical skills don’t match those of Barack Obama.

Sanders consistently reminds the electorate that real wages haven’t increased since the 1970s, the minimum wage is far too low, and it’s a travesty that so many citizens of the world’s richest nation live in poverty despite full-time jobs, and struggle to pay their medical bills and education debts. While the Republicans’ ridiculous response is to privatise everything, the Democrats are petrified by the prospect of proposing anything more than a bit of tinkering on the edges of neoliberalism.

It’s easy to empathise with the likeliest victims of Trump’s non-consecutive second term, an achievement previously pulled off only by Grover Cleveland in the 19th century. And he was a Democrat back when the Republican Party was relatively progressive.

Trump’s unpredictability means we can only wait and see how far he will go in carrying out his threatened atrocities at home and his promised peacemaking abroad.

mahir.dawn@gmail.com

Published in Dawn, November 13th, 2024




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Minimum retail price at import stage to make ‘cuppa’ costlier

KARACHI: The Federal Board of Revenue’s (FBR) decision to fix the minimum retail price (MRP) of tea at Rs1,200 per kg for levying sales tax would make the commodity more expensive, warned traders on Tuesday.

Pakistan Tea Association (PTA) Chairman Mohammad Altaf said the MRP at the import stage would have an adverse impact of Rs150-300 per kg on imported tea prices.

The flat MRP also ignores global tea prices hovering between 0.50 cents to over $3 per kg. Tea is imported in different packaging, with bulk shipments typically weighing more than 5kgs and around/approximately 80kgs. An 18 per cent general sales tax is already charged based on the imported tea.

He said before fixing the MRP for sales tax purposes, it is crucial to consider that the definition of “manufacturer” in Section 2(16) of the Sales Tax Act 1990, includes activities such as blending, mixing, processing, and packaging, as clarified in Circular No. 3(11) ST-L&P/2013-94433-R dated July 17, 2019. Based on this, tea imported for these processes qualifies as “raw material”.

Tea sellers warn FBR move will incentivise arrival of low-quality product via illegal channels

“According to judicial interpretations (e.g., CTO v. Rajasthan Taxchem Ltd., 2007) and definitions in Advanced Law Lexicon, “raw material” includes ingredients necessary for manufacturing. Tea used in blending and packaging clearly falls under this category, he added.

Accordingly, sales tax should be based on the import value, as per Subsection 46(f) of Section 2 of the Sales Tax Act, 1990, rather than the minimum retail price, Altaf said.

Tea retail prices vary significantly due to numerous factors, including the company, method of sale (open or packaged), product quality, and regional differences. The PTA chief said that the flat MRP rate per kg also does not reflect the prices charged by most traders, manufacturers, and sellers.

The imposition of a flat rate per kg would have severe negative consequences for a large portion of the tea trade, which may result in reduced business activity and ultimately lead to a loss of revenue for the national exchequer via misusing several exemptions.

Two-thirds of Pakista­nis purchase tea at Rs700-950 per kg, reflecting socio-economic and regional price variations.

He said that MRP cannot be applied at the import stage as the tea has to follow various value-addition procedures before it is made shelf-ready. “This MRP disrupts the supply chain and eradicates the role of wholesalers and distributors who play a vital role in the business, while MRP at the import stage also eradicates the basic right of commercial imports,” the PTA chief observed.

Tea is a part of our daily diet, a staple food item, not a drink.

Most people in rural and urban areas consume tea as per their earnings. Further fixing of MRP will incentivise unscrupulous elements to exploit the situation, and thus, import of low-priced teas will find its way through illegal channels, Altaf feared.

Published in Dawn, November 13th, 2024




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Tremors felt in KP, Islamabad as 5.1-magnitude quake jolts Afghanistan

Tremors were felt in various cities of Khyber Pakhtunkhwa as well as Islamabad on Wednesday after a quake jolted Afghanistan’s Badakhshan region.

According to the United States Geological Survey (USGS), the earthquake had a magnitude of 5.1, while the Pakistan Meteorological Department (PMD) reported it as having a 5.3 magnitude.

The USGS said the quake’s centre was located 37 kilometres west-southwest of Afghanistan’s Ishkashim town and had a 220.7km depth.

The earthquake struck at 10:13am (Pakistan time), both the USGS and PMD confirmed.

No casualties have been reported so far.

DawnNewsTV reported that the tremors were felt in Peshawar and its adjoining areas, as well as Islamabad.

Speaking to DawnNewsTV, two correspondents based in the cities said the quake caused people to evacuate buildings.


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