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Dawn Editorial 8 February 2021

Bonded labour

LAST week, Islamabad High Court Chief Justice Athar Minallah called attention to the evil of debt bondage in brick kilns — which is also prevalent in agriculture and the tanning and carpet-making industries. This scourge traps scores of workers and their families in a cycle of debt. The small loans taken by labourers are deceptively charged interest upon interest, and the curse outlives them, as future generations are forced to pick up the burden. At a hearing on juvenile brick-kiln workers, Chief Justice Minallah reiterated that nobody could force brick kiln labourers to work against their will, and underscored the illegality of employing anyone under the age of 16 years. Meanwhile, a report submitted to the high court by a commission tasked to look into the issue outlined the exploitation that labourers faced at the hands of land and factory owners, which is akin to slavery. It noted that the practice was in complete violation of the Bonded Labour System (Abolition) Act, 1992.
Besides local legislation, Pakistan is signatory to several international agreements, including ILO Convention 29 on bonded labour. And yet millions remain trapped in this form of modern-day slavery, since their servitude benefits those in power. Women and children informally work alongside the men in their families. Of the over 4m workers in brick kilns across the country, many belong to already marginalised religious minority communities. Under the scorching sun and unforgiving conditions, the labourers make brick after brick for what may feel like an eternity. They have no social security net, are vulnerable to ‘accidents’ and illnesses, and their numbers include small children. The Human Rights Commission of Pakistan reports that children working in brick kilns have a higher rate of mortality, while one in 20 children loses his eyesight. And yet brick-kiln workers cannot escape their life of bondage, as the threat of violence and intimidation constantly hovers above them. The recommendations made by the commission must be implemented, which include ensuring the execution of employment contracts for those who can legally work.

 

 

Course correction

A FEW weeks after taking office, Joe Biden has made a welcome pronouncement where the brutal war in Yemen is concerned. The US president has said “this war has to end” while observing that Washington was ending support for “offensive operations”. The US has been a key supporter of the Saudi-led coalition battling the Iran-allied Houthis over control of the impoverished Arab nation ever since Riyadh launched the war in 2015 in support of the Yemeni government, after the Houthis took Sana’a.
In fact, if the Americans were to fully pull back their support for the Saudis, many feel this war — described as a human catastrophe by the UN — would be over very soon. All sides involved in the conflict have welcomed Mr Biden’s decision; the Yemeni government has called for “diplomatic efforts to resolve the crisis” while the Houthis have said that “real proof” would come with “an end to aggression and a lifting of the blockade”. Indeed, the US president’s words will have to be backed by solid actions. His declared intention to reverse the ‘terrorist’ tag the Houthis have been slapped with by the Trump administration is a good first step. Moreover, all sides must cease fire and support the political process to ensure all tribes and sects in Yemen are heard.
Beyond Yemen, Mr Biden can also review US policy in other parts of the Middle East, particularly after the adventurism his predecessor indulged in. Amongst the major conflicts in the region that springs to mind is the Arab-Israeli dispute. While the US leader has said he will not reverse Donald Trump’s controversial step of shifting the American embassy to the disputed city of Jerusalem, Joe Biden can definitely call out Israel for its atrocious behaviour towards the Palestinians, especially under Benjamin Netanyahu’s rule. Expecting the Americans to give the Palestinians a fair hearing is naive, considering the power the pro-Israel lobby wields over Washington’s political players of all persuasions. However, the least Mr Biden can do is prevent Israel from launching more murderous forays into Palestinian areas, and stop Tel Aviv from devouring more and more Arab land.
Another hotspot in the region is Iran. While Donald Trump brought the US and Iran to war due to his reckless policies, President Biden has indicated that he wants to return to the nuclear deal, which his predecessor pulled America out of. If he were to succeed in doing this, it would be a major diplomatic achievement and would bring down temperatures in the Middle East. Again powerful actors — Israel, some in the Gulf — will not be too happy about this; yet the new American administration must work to re-engage with Tehran if it is serious about regional peace. Joe Biden seems to have many good intentions for the Middle East. The months ahead will reveal if he has the determination to transform intentions into actions.

 

 

Petroleum levy

WHEN in opposition, Prime Minister Imran Khan would often censure the government for burdening fuel consumers with heavy taxation on petroleum products. The party leadership often spoke about how damaging it was to use the petroleum levy for revenue to make up for the tax shortfall. So when the PTI came to power, many thought it would do away with the levy to provide relief to consumers stricken by elevated price inflation. Instead, the rates were raised to get more revenue as plans to fix the corrupt and inefficient tax system fell apart. The revenues generated by the government in the first half of the present fiscal from petroleum levy have spiked by 3.4 times to Rs275.3bn from Rs81.9bn two years ago and almost doubled from Rs137.95bn a year ago. The collection accounts for a little over 61pc of the budget projection of Rs450bn for the entire fiscal under this head.
Successive governments have used this levy to increase revenues in the face of their failings to widen the tax net and boost collection to meet their ever-increasing expenditure. Under the previous PML-N administration, which amended the Petroleum Products (Petroleum Levy) Ordinance, 1961, through the Finance Act, 2018, in order to secure parliamentary approval for increasing the levy by up to Rs30 a litre, the six-month collection had peaked to Rs93.84bn although it never charged more than Rs6-Rs14 per litre on different products. Experts argue that a non-tax levy cannot be imposed or its rate increased through a money bill. The PTI government had indicated previously that the amendment would be withdrawn. But now it is uncertain whether it will do so. With petroleum levy becoming the single largest non-tax revenue source for the finance ministry after the profit of Rs375.50bn shown by the State Bank, it’s hard to imagine the cash-strapped administration slashing its rate let alone withdrawing it. The levy not only allows the centre to recoup the massive losses in tax collection but also to retain the entire collection for its own use to the chagrin of the provinces because it does not form part of the divisible pool under the NFC award. The fuel levy may have become an important source of revenue for the government but it is a big burden on people and adversely impacts economic growth. Stronger revenue collection should come from an efficient tax system, which creates incentives for the growth drivers, rather than from non-tax levies.

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