The economic picture

Even many African economies have out-performed us in recent years, according to the Economic Survey for 2010-11 released on Thursday. - Illustration by Dawn.com

THE outgoing fiscal was yet another year of uphill economic struggle for the vast majority of Pakistanis due to decelerating growth and rising prices. Investment dried up, unemployment escalated and poverty increased.

Ranked as the third-fastest expanding Asian economy after China and India in the middle of the last decade, Pakistan is now among the slowest growing South Asian countries. India, Sri Lanka and Bangladesh are forging ahead. Pakistan`s economy is expected to expand by 2.4 per cent this year as the region is projected to grow by 8.7 per cent and the world`s developing nations by 6.5 per cent. Even many African economies have out-performed us in recent years, according to the Economic Survey for 2010-11 released on Thursday. This officially sums up the economic dilemma Pakistan has been facing for the last three years.

The Survey blames the country`s poor economic performance on a number of persisting factors. Deteriorating security conditions, flood losses, rising global oil prices, stalled external capital flows and delays in fiscal and tax reforms are the main culprits that have slowed growth and strained the government`s resources, leading to a huge build-up in domestic and foreign public debt for financing the budget. Investment has contracted to 13.4 per cent of the size of the economy from 22.5 per cent in 2007. Domestic savings are down to 9.5 per cent from 16.3 per cent in 2006. Growing energy shortages and a higher cost of borrowing continue to haunt private investors and affect industrial output. Public-sector enterprises continue to eat into meagre resources at the cost of public services like education; development expenditure formed only 3.4 per cent of GDP.
Still, there are some positives. Exports have increased on the back of higher commodity prices. An additional income of Rs342bn has been transferred to the rural economy during one year alone, compared to Rs329bn during 2001-08. The exchange rate remains stable and inflation is down to 13 per cent from 25 per cent in October 2008. The current account is also in surplus. The government has taken several tough and politically unpopular decisions like reducing untargeted food and energy subsidies. Though it has dithered on implementing many crucial fiscal and economic reforms under pressure from its allies and the opposition, it has pledged to move ahead with its plans to eliminate subsidies, bring the powerful into the tax net, prudently manage its debt, revamp public-sector companies and limit its inflationary borrowings. Recovery remains fragile, but it can give space to launch the country on the path of growth. If the reform agenda is implemented honestly and boldly, we can move faster in our race with other South Asian economies.

US military cuts in Pakistan 'significant'

Adm Mullen said it would be dangerous to abandon Islamabad

The top US military officer has acknowledged "very significant" cuts to US military numbers in Pakistan, saying US-Pakistan ties need time to heal.

Adm Mike Mullen, head of the Joint Chiefs of Staff, said some of the US troops, mostly trainers, would remain.
Pakistan asked the US to reduce its troop presence after US special forces killed Osama Bin Laden last month.
The raid sparked deep anger in Pakistan, further damaging already strained ties with the US.
The US has provided Pakistan with billions of dollars of aid in recent years, much of it military assistance.
Washington sees its relations with Pakistan as vital in the fight against al-Qaeda and against Taliban militants in Afghanistan who use safe havens in Pakistan's tribal regions on the border.
But with al-Qaeda leader Bin Laden now known to have been living undetected almost next door to a major Pakistani military academy, many in the US Congress have questioned the value of the US aid.
'Introspection'
Before Bin Laden was killed on 2 May in a raid on his compound in northern Pakistan, the US had about 200 troops in Pakistan. Most of them were helping to train the Pakistani army.
"There clearly is an ongoing contraction of that support... and it is tied to the difficult time we are going through," Adm Mullen told reporters in Washington after a visit to Pakistan.

There have been protests across Pakistan over the US raid to kill Osama Bin Laden

Adm Mullen said the raid to kill Bin Laden had triggered "a great deal of introspection" in Pakistan.
"They're going to have to finish that before we get back to a point where we are doing any kind of significant training with them," he said.
For now, he said, that meant "a very significant cutback in trainers".
"I think we need to give them a little time and space to do that [introspection]," he said. "And that makes all the sense in the world to me."
But he said it would be dangerous to abandon Islamabad.
"I think the worst thing we could do would be cut them off," he said. If that happened, he said, "10 years from now, 20 years from now, we go back and it's much more intense and it's much more dangerous".
Adm Mullen steps down as chairman of the Joint Chiefs of Staff later this year.

China rejects Gmail spying claims

Google said the cyber-spying campaign targeted Gmail accounts of US officials and journalists

China has rejected allegations of involvement in a cyber-spying campaign targeting the Google e-mail accounts of top US officials, military personnel and journalists.

A foreign ministry spokesman said it was "unacceptable" to blame China.
Google has not blamed the Chinese government directly, but says the hacking campaign originated in Jinan.
The US company said its security was not breached but indicated individuals' passwords were obtained through fraud.
Google said Chinese political activists and officials in other Asian countries were also targeted from the Shandong city, which is 400 km (250 miles) south of Beijing.
The White House said it was investigating the reports but did not believe official US government e-mail accounts had been breached.
Safety tips
It is extremely difficult for analysts to determine whether governments or individuals are responsible for such attacks, says the BBC's Adam Brookes in Washington.
But the fact that the victims were people with access to sensitive - even secret - information raises the possibility that this was cyber-espionage rather than cyber-crime, adds our correspondent.

However, Chinese foreign ministry spokesman Hong Lei told a news briefing: "Blaming these misdeeds on China is unacceptable.

"Hacking is an international problem and China is also a victim. The claims of so-called support for hacking are completely unfounded and have ulterior motives."
On Wednesday, Google said it had "detected and has disrupted" a campaign to take users' passwords and monitor their emails.
"We have notified victims and secured their accounts," said the company. "In addition, we have notified relevant government authorities."
The e-mail scam uses a practice known as "spear phishing" in which specific e-mail users are tricked into divulging their login credentials to a web page that resembles Google's Gmail web service (or which appears related to the target's work) but is in fact run by hackers.
Having obtained the user's e-mail login and password, the hackers then tell Gmail's service to forward incoming e-mail to another account set up by the hacker.
In an advisory message released on Wednesday, Google recommends several steps for users to take to improve the security of Google products:

1. Enable two-step verification, such as using a mobile phone to which Google sends a second password to enter on sign-in
2. Use a strong password (mix of letters and numbers, avoiding family names, birth dates etc) for Google that you do not use elsewhere. Here's a video to help.
3. Enter your password only into a proper sign-in prompt on a https://www.google.com domain.
4. Check your Gmail settings for suspicious forwarding addresses or delegated accounts

Analysis

Maggie Shiels Technology reporter, BBC News, Silicon Valley

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Security experts say they are seeing an increase in these so-called spear phishing incidents in which attackers go after specific information or assets and aim at "high value individuals".
One consultant described it as an "epidemic", while another said such attacks are all too easy to perpetrate given the amount of information that lives on the internet about people - from their Twitter stream to their Facebook pages to sites that trace your family tree.
A smart attacker can assemble enough information to "influence and convince" a target that they are receiving a genuine email from someone they know.

Facebook rejects NY man's claim of half-ownership

Mr Zuckerberg started Facebook in 2004

Facebook founder Mark Zuckerberg has said that an alleged contract and e-mails that a New York man claims entitle him to a 50% stake in the social networking site are "forgeries".

Paul Ceglia says that Mr Zuckerberg signed a contract in 2003 which gave Mr Ceglia half-ownership of Facebook.
In a court filing, Facebook and Mr Zuckerberg demand that Mr Ceglia turn over the alleged contract and e-mails.
Lawyers representing Mr Ceglia disputed Facebook's claims.
"Those so-called expert opinions have been provided without examining the actual contract which is at issue in the case," said Dennis C. Vacco, who is one of Mr Ceglia's attorneys.
'Cut-and-paste job'
In a filing made at the US District Court in Buffalo, Mr Zuckerberg said he provided web development services in 2003 for StreetFax, a business Mr Ceglia was trying to start at the time.
He said he signed a contract drafted by Mr Ceglia, a wood pellet salesman, which referred only to the work he did for StreetFax.
"Zuckerberg and Ceglia never discussed Facebook and they never signed a contract concerning Facebook," the filing said.
"The contract is a cut-and-paste job, the e-mails are complete fabrications, and this entire lawsuit is a fraud."
Facebook and Mr Zuckerberg hope to use forensic testing to show that the documents are fakes.
Facebook is privately-owned but estimates of its worth range between $50bn (£30bn) and $76.4bn (£46.7bn).
Twins Cameron and Tyler Winklevoss also claimed that Mr Zuckerberg stole their website idea while they were all students at Harvard.
In 2008 they reached a settlement which gave them $20m in cash and $45m of stock valued at $36 a share.
They have since unsuccessfully tried to reopen their case against Facebook, claiming that the company concealed information and they should have received more shares.

Toshiba prices its new tablet to undercut Apple's ipad2

The growing popularity of tablets has seen many new players enter the market

Toshiba has announced its foray into the fast-growing tablet market with its latest gadget called Thrive.

The Japanese electronics maker has priced its entry level model at $429 (£262), which is cheaper than the base model of Apple's ipad2.
The company said its base model comes with wi-fi ability and is targeted at consumers who use tablets at home.
The tablet will go on sale in the US on 10 July.
'Non-Apple products'
The success of Apple's ipad has encouraged many computer and electronics companies to enter the segment.
Samsung has launched its Galaxy tab, while Sony has also announced its entry with two new models.
While none of them have been able to make a significant dent in Apple's market share, Toshiba said demand for other products was increasing gradually.
"There is a market out there of folks who want to buy non-Apple products," said Jeff Barney of Toshiba America.