UN General Assembly declares Crimea secession vote invalid

Russian soldiers (R) and local civilians are seen at a train station where Ukrainian tanks are being loaded onto a train in northern Crimea on Thursday. PHOTO: REUTERS

UNITED NATIONS: The UN General Assembly on Thursday passed a non-binding resolution declaring Crimea’s Moscow-backed referendum invalid earlier this month on seceding from Ukraine, in a vote those Western nations said highlighted Russia’s isolation.

There were 100 votes in favour, 11 against and 58 abstentions in the 193-nation assembly. A number of countries did not participate in the vote. Western diplomats said the number of yes votes was higher than expected despite what they said was Moscow’s aggressive lobbying efforts against the resolution.

Before the vote, one senior Western diplomat had described a result with 80-90 yes votes as successful for Ukraine. Other Western diplomats agreed, saying the result showed how few active supporters Moscow has around the world.

The General Assembly resolution echoes a text Moscow vetoed earlier this month in the Security Council. The approved declaration dismisses Crimea’s vote as “having no validity, (and) cannot form the basis for any alteration of the status of the Autonomous Republic of Crimea or of the City of Sevastopol.”

The resolution, which does not mention Russia by name, says the General Assembly “calls upon all states, international organisations and specialised agencies not to recognize any alteration of the status” of Crimea and Sevastopol.

Although the resolution is non-binding, Western diplomats said it sends a strong political message about Russia’s lack of broad support on the Crimean issue. They said the fact that Russia lobbied so hard to persuade UN member states not to vote for it was proof that Moscow took it seriously.

Ukrainian Foreign Minister Andriy Deshchytsia introduced the draft resolution, which had the overwhelming support of Western nations. “The purpose of this document is to reinforce core United Nations principles at a moment when they are experiencing a major challenge,” he said.

“This text is also about respect of territorial integrity and non use of force to settle disputes,” he added.

“It sends an essential message that the international community will not allow what has happened in Crimea to set a precedent for further challenges to our rules based international framework.”

Russian UN Ambassador Vitaly Churkin had urged countries to support what he said was Crimea’s right of self-determination and to respect the Crimeans’ choice to place themselves under the authority of Moscow.

Ukraine’s former Russian-backed president, Viktor Yanukovich, was ousted last month after a deadly crackdown on demonstrations in Kiev that left dozens dead.

US Ambassador Samantha Power said all countries supported the idea of self-determination but that Russia had used its military to forcibly annex Crimea. “Coercion cannot be the means by which a self determines,” she said.

“The chaos that would ensue is not a world that any of us can afford. It is a dangerous world.”

Power added that the resolution showed “that borders are not mere suggestions.”

Only 10 other countries stood with Russia in voting against the resolution. The group of 11 states, which the senior Western diplomat described as the “dirty dozen”, included critics of Western nations like Belarus, Bolivia, Cuba, North Korea, Nicaragua, Sudan and Syria.

China, which since 2011 joined Russia in vetoing three Security Council resolutions that condemned Syria and threatened it with sanctions, abstained, as it did in the Security Council vote on Ukraine earlier this month.

Neelum Jhelum project: PAC sets aside audit objection to Rs72 million payment

Rs72 million was paid for financial years 2010 and 2011 and payments would continue until the project is completed. PHOTO: FILE

ISLAMABAD: The Public Accounts Com­mittee (PAC) on Wednesday conditionally set aside an audit objection pertaining to irregular payment of Rs72 million to a contractor of Neelum Jhelum hydropower project, continuing its soft approach and setting a precedent that will have far-reaching implications for development projects.

The Water and Power Development Authority (Wapda) had made the payment to a Chinese contractor on account of increase in insurance and performance guarantees, which are never counted in price escalation.

A day earlier, PAC had deferred a decision on irregular payments to contractors of the project following stiff resistance from the auditors, who pointed out that the previous PAC had called for recovery of the money in a similar case.

The Rs72 million was paid for financial years 2010 and 2011 and payments would continue until the project is completed in 2016-17.

“The increased charges are paid only on the cost of labour, maintenance of contractor’s equipment, materials and other inputs,” said the director general of audit. His views were endorsed by some PAC members associated with both the PML-N and the PPP.

But despite that, PAC Chairman Syed Khursheed Shah conditionally settled the audit objection. He asked the representative of the Ministry of Law to review the contract documents and give his opinion whether the payment was lawful or not.

Audit officials fiercely opposed the PAC move but they could not stop the committee chairman from settling the audit objection. It was the second consecutive day when the PAC chairman showed leniency while reviewing the accounts for the period when his Pakistan Peoples Party (PPP) was in power.

On Tuesday, PAC settled about Rs6 billion in audit objections including procurement of dozens of luxury vehicles in the name of the project which were used in the presidency, Prime Minister’s Office and by federal ministers.

“The audit para should not be settled as it will set a precedent for future contracts,” suggested Malik Khadim Hussain, the Additional Auditor General of Pakistan.

He said there was no previous example where the price escalation was allowed in relation to the items that had nothing to do with the inflation rate.

“I have not heard anything like increase in insurance guarantees,” said PAC member Dr Azara Fazal, who was a sister of former president Asif Ali Zardari. She endorsed the auditors’ view that the payment was irregular.

However, Wapda Chairman Syed Raghib Shah misled the committee, saying a clause relating to allowing an increase in insurance and performance guarantees was part of the contract. But the audit revealed that the contract did not carry any such clause.

Wapda was interpreting the definition of base price in such a manner that insurance was added as a component of the base value, said the auditors.

Raghib Shah told PAC that he would not deduct the amount from the contract value as the contractor would go to the international court of arbitration. He expressed the fear that the contractor would stop work on the strategically important project.

While settling the audit objection, the PAC chairman directed that in future the contractors should not enjoy the clause that made it binding for the government to pay escalation in insurance guarantees.

Expo: Role of CIOs in business transformation stressed

Cloud Computing, Enterprise Mobility and Cloud Security were the topics discussed on the final day of the summit.

KARACHI: “Chief Information Officers (CIOs) play a critical role in successful business transformations,” Principal and Chief Innovative Officer, Intelligent Systems United States (US), Dr Frank Harper said while addressing the final session of the 2nd CIO Summit and Expo that concluded at Marriot Hotel on Wednesday.

An expert on transformation leadership, Dr Harper – who flew in from the US to speak at the summit – highlighted seven different roles played by highly effective CIOs and the challenges they face.

“One of the most important roles of CIOs is that of educators,” Dr Harper said in his presentation titled, ‘CIOs Role in Business Transformation: Twenty-first Century Transformational Leadership’. “The more you can educate your business community, the better the results,” he said.

Dr Harper’s presentation – which gave a detailed picture of CIOs’ role in business transformation; the challenges they face and barriers to strategy execution – remained the highlight of the day.

The IT expert, who brings with him 35 years of work experience in big corporations across five continents, shared his leadership recipe with audience. His detailed talk on strategies that helped him achieve a project success rate of 96% provided a perfect ending to the two-day summit and expo – an amalgamation of top CIOs, IT heads, IT professionals and experts who get together every year to discuss the issues that matter to them the most.

“The CIOs should seek to understand rather than expecting to be understood,” Dr Harper said. “They should ask the right questions. If they don’t ask strategic questions, they will not have the information required for successful business transformation,” he added.

Cloud Computing, Enterprise Mobility and Cloud Security were the topics discussed on the final day of the summit, Summit Director and CEO, Solutions Inc. Kamran Saeed said.

The first session focused on key considerations in developing a comprehensive Enterprise Mobility while Nadeem Malik, Director Enterprise at Huawei Technologies, informed the audience on how to adapt their organisations to the new environment where the employees could bring their own devices for enterprise productivity, Saeed said.

Auto sector gains after rupee appreciation, data shows

Indus Motor and Honda Atlas cars have already reduced prices by 0.5%-3.0%, mitigating the currency benefit by 15%. PHOTO: FILE

KARACHI: With the Japanese yen weakening and Pakistani rupee appreciating, the auto sector at the Karachi Stock Exchange (KSE) gained 5.5% over the past 13 trading sessions, outperforming the broader market by 6.2%, according to a report published by BMA Research on Wednesday.

For the local auto industry, calendar year 2013 (CY13) was characterised by weak performance of the yen against the dollar and its consequent trickle-down impact against the rupee.

In this regard, the yen depreciated by 12% year-on-year (YoY) against the rupee in CY13. While looking into CY14, we expect persistent yen’s weakness on the back of continued monetary stimulus by the Bank of Japan (BoJ) to revive its economy, the report added.

The depreciation of the yen combined with the strengthening rupee is the likely theme to play out for the local auto industry this year (CY14). In this regard, the recent currency movements are estimated to have an astounding 87% incremental impact on industry earnings (pass-through benefits aside). In response to the price movements, however, two players (Indus Motor and Honda Atlas cars) have already reduced prices by 0.5%-3.0%, mitigating the currency benefit by 15%. These positive developments within the auto industry have already been priced in by the market to an extent.

Price cut: just a feel-good factor

Industry officials say that the recent price cuts will just have a feel-good effect on the market, and that it is not going to give any substantial push to car sales in coming months.

“However, considering the very small size of the auto industry in Pakistan, it is not going to bring any big change in the car sales,” said an official of Honda Atlas Cars.

Though the recent rupee appreciation has forced carmakers to reduce their prices, company officials are quick to remind the market that any substantial future depreciation of the rupee may again result in the increase in car prices.

“Rupee stability in the coming months will be the single most important factor that determines the stability of car prices in the country,” the Honda official added.

While Honda is still buoyant owing to its new models of ‘Civic’ and ‘City’ that it launched in 2012 and 2013, Indus Motor is banking on its upcoming Toyota Corolla model that it may launch in the next couple of months.

Auto sector gains after rupee appreciation, data shows

Indus Motor and Honda Atlas cars have already reduced prices by 0.5%-3.0%, mitigating the currency benefit by 15%. PHOTO: FILE

KARACHI: With the Japanese yen weakening and Pakistani rupee appreciating, the auto sector at the Karachi Stock Exchange (KSE) gained 5.5% over the past 13 trading sessions, outperforming the broader market by 6.2%, according to a report published by BMA Research on Wednesday.

For the local auto industry, calendar year 2013 (CY13) was characterised by weak performance of the yen against the dollar and its consequent trickle-down impact against the rupee.

In this regard, the yen depreciated by 12% year-on-year (YoY) against the rupee in CY13. While looking into CY14, we expect persistent yen’s weakness on the back of continued monetary stimulus by the Bank of Japan (BoJ) to revive its economy, the report added.

The depreciation of the yen combined with the strengthening rupee is the likely theme to play out for the local auto industry this year (CY14). In this regard, the recent currency movements are estimated to have an astounding 87% incremental impact on industry earnings (pass-through benefits aside). In response to the price movements, however, two players (Indus Motor and Honda Atlas cars) have already reduced prices by 0.5%-3.0%, mitigating the currency benefit by 15%. These positive developments within the auto industry have already been priced in by the market to an extent.

Price cut: just a feel-good factor

Industry officials say that the recent price cuts will just have a feel-good effect on the market, and that it is not going to give any substantial push to car sales in coming months.

“However, considering the very small size of the auto industry in Pakistan, it is not going to bring any big change in the car sales,” said an official of Honda Atlas Cars.

Though the recent rupee appreciation has forced carmakers to reduce their prices, company officials are quick to remind the market that any substantial future depreciation of the rupee may again result in the increase in car prices.

“Rupee stability in the coming months will be the single most important factor that determines the stability of car prices in the country,” the Honda official added.

While Honda is still buoyant owing to its new models of ‘Civic’ and ‘City’ that it launched in 2012 and 2013, Indus Motor is banking on its upcoming Toyota Corolla model that it may launch in the next couple of months.

Power generation: Tajikistan plans production boost to increase exports

Tajikistan is already working on a plan to export 1,000 megawatts of electricity to Pakistan under the Central Asia-South Asia (CASA) power supply project. PHOTO: FILE

ISLAMABAD: 

Tajikistan is planning to increase power generation by 40% annually by 2016 in an effort to increase exports to neighbouring and regional countries including Pakistan, says an official of the Tajik embassy.

The country is already working on a plan to export 1,000 megawatts of electricity to Pakistan under the Central Asia-South Asia (CASA) power supply project. It has offered another 1,000MW by laying a transmission line in northern areas of Pakistan.

Pakistan has been facing acute power shortages, especially in the summer, and is finalising a commercial electricity import deal with Tajikistan to minimise outages. Apart from this, the government is also looking for electricity purchase from India.

“The increase in power generation is aimed at meeting maximum export needs,” the embassy official said.

Tajikistan produces about 17 billion kilowatt hours (kWh) of electricity in a year and is making efforts to step up generation to 25 billion kWh in the next two years.

According to the official, a specified volume of electricity will be produced through completion of construction work and commissioning of a reservoir, regulating the flow of water and paving the way for new power facilities.

“Implementation of these plans will ensure energy independence and increase the export potential up to 8 billion kWh per year during summer,” he said.

At present, small, medium and large power projects, which are under construction, include Rogun and Sangtuda-2 hydroelectric power plants, Dushanbe-2 thermal power station as well as high-voltage 500-kilovolt transmission line named Obi Garm-Dushanbe.

In terms of potential hydropower resources, Tajikistan is ranked eighth in the world, after China, Russia, USA, Brazil, Zaire, India and Canada. Its current use of hydropower resources leads to production of about 17 billion kWh per year, which constitutes about 3% of existing capacity.

Move backfires: FBR under scrutiny for tax collection

Revenue collection body lost taxpayers instead of recruiting more. CREATIVE COMMONS

ISLAMABAD: 

Contrary to claims of bringing 3 million people in the tax net, the federal government has instead failed to even retain the already registered 2.7 million, highlighting the inefficiency of the tax machinery.

Out of 3.544 million people who have valid National Tax Numbers (NTN), only 890,000 or 25% of total registered persons filed income tax returns on incomes earned in the last financial year ended on June 30, according to fresh data compiled by the Federal Board of Revenue (FBR).

These persons were assigned the NTN by the FBR only after getting their complete biodata and can be easily tracked and asked to obey the law, provided the FBR has the will to chase them.

The 890,000 taxpayers, who chose to obey the law, paid an amount of Rs433 billion in income tax, with the corporate sector alone contributing almost three-fourths of the total income tax collected from these 890,000 taxpayers.

The Rs433 billion in income taxes was just 22.2% of the total tax collected in the last fiscal year. The FBR had claimed that it collected Rs747 billion income tax last year but the rest of the collection was on account of withholding taxes, generated through charges on phone calls, electricity consumption, contracts, imports and exports.

Out of the registered 53,744 companies, as many as 23,179 firms or 43% filed income tax returns and paid a sum of Rs315 billion in income taxes, according to FBR documents. The FBR has not taken any action against the rest of the companies that did not file returns.

Pakistan has one of the lowest tax-to-Gross Domestic Product ratios of 8.5% in the world, due to weak compliance of tax laws, massive evasions in connivance of corrupt FBR officials and tax exemptions, according to tax experts.

The governments in donor countries like the United Kingdom and United States have been facing pressure from their elected representatives to suspend aid to Pakistan, according to sources in the diplomatic circles.

The International Monetary Fund has also imposed a condition of bringing 100,000 new people into the tax net in the current financial year. Finance Minister Ishaq Dar too had championed the cause of broadening the tax base while delivering his first budget speech in the National Assembly.

“In order to expand the tax base, it is decided to utilise data collected by the FBR and NADRA in a systematic manner. In this regard profiling of 500,000 persons identified on the basis of financial transactions traced shall be carried out”, said Dar in his speech.

The majority numbers of registered persons having NTNs were in the category of private individuals and salaried persons. There are 3.34 million registered persons in both categories. The FBR did not provide a breakup between the registered salaried persons and individual businessmen. However, it did provide the figures who filed income tax returns.

Only 313,005 salaried persons filed income tax on income earned in the last fiscal year. They paid a sum of Rs50 billion in income taxes. The average income tax paid by the salaried class was Rs159,741 per person.

As many as 513,979 individual businessmen paid an income tax of Rs56 billion in the last fiscal year.

In the category of Association of Persons, out of registered 157,287 AOPs only 39,837 filed income tax returns and paid Rs28 billion.

According to sources in the FBR, incomes and assets declared in the income tax returns were understated. They added the FBR did not have the capacity to go after each individual and company. Even the external audit wing was too weak to carry out the audit and check the returns on risk parameters basis, they added.

Spokesman for the FBR Shahid Hussain Asad was not available for comments.