OTHER AILMENTS ARISING OUT OF HIGH INTEREST RATES
Jan 26 - Feb 01, 2009
Interest rates, all over the world, are showing a downward trend while in Pakistan the Central bank has increased the rate of mark-up up to 15% and banks are charging a little less than 20% markup over credit. Pakistan is among those few countries of the world where there are highest mark-up rates. In USA, the federal interest rate is at its ever-lowest benchmark of 1% while in the United Kingdom the interest rate is recently reduced by 0.5% and it is now at 1.5%.
Increase in interest rate forces economy to slow down while corporate profits are eroded. This also makes inefficient and smaller companies to slash jobs and sometimes collapse, as it becomes even tougher for them to service their debts. Despite ramifications of higher credit cost for the economic growth as well as the corporate profitability and viability, increase in interest rates is considered an effective response to inflation and inflationary expectations in an economy.
According to the Federal Minister for Industries and Production, Mian Manzoor Ahmad Wattoo, the existing high rates are not only increasing the cost of doing business but also affecting the competitiveness of our industrial production in a big way. Both long-term and short-term policies were being evolved to ensure relief to the industry.
The LCCI President Mian Muzaffar Ali is of the view that the high mark up rates and the imposition of 10% withholding tax on industrial electricity bills have increased the problems of businessmen. According to him, high cost of doing business needs to be addressed by lowering Customs Duty and Regulatory Duty on Industrial inputs and by providing energy on low tariff. The prevailing high rates of corporate taxes, especially sales tax need also to be reduced.
Other business leaders including Pervaiz Malik, Ms Shamim Akhter, Mian Faraz Alam described present interest rates as the death knell for the manufacturing sector. This is leaving serious ramifications for the industry and exports. According to them, exporters debt burden and cost of servicing has increased that may spawn defaults, closures, job cuts and poverty. On the other hand, analysts say high interest rates are devastating for Pak businessmen.
"We are facing a foreign exchange crisis. We don't have money to pay our foreign debt obligations. The rate cut in the given circumstances would harm the economy and the industry irreparably," they underscored. The policy-makers need to be "very mindful of not choking economic growth and constantly revise interest rates as we enter the deflationary phase". Moreover, the World Health Organisation warned that the global financial crisis may spark a rise in mental illness and health problems as people turn to alcohol, tobacco and drugs to get through the downturn.
"This has happened in the past," said the UN agency's Director-General Margaret Chan at the launch of a conference on the financial crisis' effects on health.
"In times of economic crisis, people tend to forego private care and make more use of publicly financed services," she said, adding that many countries' public health systems are already "overstretched and under-funded. Chan also warned that periods of economic instability 'increase the risk that people will neglect health care, with prevention falling by the wayside".
Richard Newfarmer, the World Bank's special representative to the UN and World Trade Organisation said nearly 60 million people will be gripped by poverty if economic growth in developing countries halves during 2009.
'FOCUS ON CULPRIT OF VIOLENCE CRIMES IMPORTANT TO ADDRESS THE ISSUE' — SHERRY REHMAN
The Federal Minister for Information and Broadcasting Ms Sherry Rehman has called for a rethink in media's approach to cover issues related to violence with an objective to resist the heinous crimes.
"Violence is a very sensitive issue and just as all those who interact with violence victims need to demonstrate care and sensitivity, media too should ensure that its coverage not only helps the violence victims, but should also address the issue in the larger context," said Ms Sherry Rehman referring to the case of Maria Shah, who is under treatment in Karachi for acid burns.
The Federal Information Minister who visited Maria Shah in Karachi last week to extend the Government's support to the victim said that the Government has stepped up its efforts to nab the culprit Muhammad Arsalan Sanjrani. "An FIR has been lodged, and, his brother and father have been detained by the police to ensure his early arrest."
Ms Sherry Rehman said that Sanjrani's photos will be issued to the media to facilitate his arrest. "As a mark of our commitment to deprive such criminals with impunity, I have. with the permission of the PM, directed the PTV and requested all private media to publicise his photo everywhere so that he is nabbed. We wish to leave no space for criminals to hide."
The Federal Information Minister urged the media to focus on the culprit in its coverage of crimes to discourage such acts of violence in future. "We have seen that the strategy of highlighting the victims alone does not help in the resolution of issues related to violence in the larger context. We need to direct our attention to the culprits, discrediting them for such inhuman acts and mobilizing public opinion against these crimes to help end such practices."
Ms Sherry Rehman said that the Federal Government is in coordination with the Interior Minister Sindh to ensure speedy resolution of the case. "The Interior Ministry Sindh is being extended all help to facilitate early arrest of the culprit. We would also be working together to devise a strategy to curb such crimes in the future."
Ms Sherry Rehman said that the government, the media and the civil society should work in tandem with each other to address the issue of violence. "The Government, civil society and the media all have a unanimous agenda. We all stand against violence directed at women and we must complement each other's efforts to assist the victims and eliminate such crimes from our system."