Articles of the year 2006

Self projection in Pakistan has now reached the levels practiced by Donald Trump. The only difference is that these Projections are built on dubious statistics, and do not hold up to close scrutiny. A careful look will expose the flaws and will provide a savage indictment of those officers laying claims to an Economy which is the best performing in the region. To claim that the hitherto elite have now been checked from their rapacious practices, and have been curbed, makes a mockery of these claims.

The present system having benefited a new elite spawned in the last five years, that have completely overtaken and overshadowed what was left of the 22 Families, and insults the intelligence of those who are watching and suffering the financial woes being heaped upon them. Good Governance means not only the access to Clean water, education , but above all the instruments for safe savings. The basic requirement here is stable Banks, and attractive interest rates. We have over the last 6 years seen the emergence of fairly large and stable Banks, with very substantial profits. This is laudable as the profits have been passed on to the shareholders, giving a clear message that Banking is the best business today. However there is a very sinister downside to this pattern. The banking sector in any Nation has some very clear priorities, namely the encouragement of Savings. In Pakistan we have seen a new prioritization that of profitability, of the Banking sector, mostly by the concentration of developing the Consumer market. This has seen the Automobiles and other items flooding the market with consumer goods, not necessarily cheap and certainly not on cheap credit.

However the cost at which this has been achieved has been horrendous. The Marketing agencies representing the banks are all encouraging the customer to borrow more and spend more ----for the 'good' life. A quick look at the advertising section shows a complete ignoring of the Savings sector. In any Society the priority has been the encouraging of the Savings Culture. In Pre-partition India the main difference between the Hindu and the Muslims was the careful Savings of the Hindu compared to the profligate spending of the Muslims. This led to the Economic dominance of the Hindu over the Muslim., at all levels. In Pakistan spending at exorbitant rates has been encouraged by the Goldmedallist Governor, to the detriment of the Depositors. Surely he should have realized that Savings were and are much more important to the economic health of a people than the number of households who are buying goods to inflate the profits of the Banks, especially, when the housewife or the depositor then turns to other forms of savings--- land/plots/etc.

The touting of the flash figures of number of Cars on the roads or the stock Market Index may make for good presentations to World Bank executives, or Luminaries at Davos, and may also earn more Gold medals for those at the helm of Financial affairs, but have done irreparable damage to the Savings culture. In fact some Bankers have been complaining that the spread between the Depositors yields and the lending rates were unconscionably high—something no Central Bank would have permitted, coupled with the high lending rates he was truly the Bankers Banker, at the cost of the people. The bulk of the affectees are the small depositor and pensioner whose everyday life is caught in the downward spiral of miniscule interest on Savings on the one hand and galloping inflation on the other. Before more Gold medals are handed out, a careful analysis will show the devastating truth, that the profit of the few has come at the expense of the many many poor of this country.

The Newly inducted Governor of the State Bank would do the Nation a service by recognizing the sad and dangerous tactics that had been employed by her predecessor, and correct this imbalance. Being a lady should help in realizing that Savings are far more important to the financial well being at the family level, and translates into a healthier Nation. Hers will be a much more difficult task, for stripping away the Glitz to show the devastation that lies underneath is very unpopular, but I am sure that with her background, in her position as the keeper of the Nations money, she can reprioritize the banking sector, by focusing on the bulk of the Nations depositors who have been ripped off over the last four years.