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Monday, 18 June, 2012
WAll STREET WEEk AHEAD
Greek elections to keep tensions high NEW YORK AGENCIES
WHATEVER EURO’S FATE, EUROPE’S REPUTATION SAVAGED LONDON
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AGENCIES
ith an apparently neverending series of last-minute summits and telephone calls, Europe’s leaders and finance ministers have held the bloc together in the face of growing strains between states, a rising political backlash and market alarm. But with hindsight, outsiders say each measure proved too little, too late. US officials in particular complain European leaders have either failed to grasp the scale of the problem or proved unwilling to countenance the awkward political decisions necessary to fix it. As a result, they say, what should have been one of the most stable parts of the world has now become one of the most unpredictable. At one extreme, the euro area might be about to embark on a journey towards further fiscal and political union as an almost totally unitary “super state”. At the other, it could unravel and collapse into an unstable mess of regional rivalry. “From almost every conversation i’ve had in the last year - with Chinese, with indians, with just about anybody - the message is always the same,” says Fiona hill, a former senior officer for the US National intelligence Council and now head of the Europe program at Washington think tank the Brookings institute. “Europe can no longer be trusted. it seems to be moving from being a source of stability to a driver of instability.” Long-held certainties were being challenged, she said. Even non-euro member Britain suddenly appeared at risk of breaking up, with Scotland due to hold a referendum on independence that experts say could yet go either way. the slow burning euro zone debt and banking crisis is accelerating. Last weekend brought a decision by euro zone political leaders to bail out Spain’s banks. this weekend Greece holds a parliamentary election which many observers fear could spell the end of its euro membership. Some argue it is too soon to write Europe or the EU institutions - off altogether. Under foreign policy chief Catherine Ashton, some credit Europe with making real progress in talks with iran and other powers over the future of its disputed nuclear program. But their energy for anything beyond their immediate problems is seen decidedly limited. “the Europeans are completely consumed with a battle to save the euro zone,” says ian Bremmer, president of political risk consultancy Eurasia Group. “it’s a deep and ongoing crisis bigger than any they’ve experienced in decades... it’s an environment where European leaders could hardly be expected to prioritize anything else.” that could leave the continent being increasingly sidelined as emerging powers - not just the
Whether the euro lives or dies, the chaotic way Europe has tackled the crisis could undermine the region’s geopolitical clout for years to come and leave it at a distinct disadvantage in a rapidly changing world BRiC powers of Brazil, Russia, india and China but other states such as turkey, indonesia and South Africa - grow in importance. At the very least, it could undermine the ability of the continent’s leaders to persuade the rest of the world to take them seriously on a range of issues, from trade to the importance of democracy and human rights. “Europe probably isn’t going to stop preaching to the rest of the world,” says Nikolas Gvosdev, professor of national security studies at the US Naval War College. “But it’s much less likely that others are going to be inclined to listen.” EUROPE AT CROSSROADS: At the Copenhagen climate summit in 2009, European states suffered the indignity of being outside the room when the final deal was struck between the United States and emerging powers. in the aftermath of the euro zone crisis, it’s a position European leaders may simply have to get used to. But for the rest of the world, it’s not just the continent itself that is rapidly losing its shine. the whole European political model - generous welfare systems, democratic decision-making, closer regional integration and the idea of a currency union as a stabilizing factor - no longer seems nearly as appealing to other, still growing regions. “Europe is at a crossroads, with the very future of the EU at stake,” says Brahma Chellaney, professor of strategic studies at New Delhi think tank the Centre for Policy Research. “if the euro dies, it will mark the end of the European experiment in forging closer financial and political integration. But it will also have wider international implications.” Not everyone agrees what those will be, however. Chellaney argues the demise of the euro might help secure the primacy of the dollar - and therefore perhaps of the United States itself - for years to come. But others believe a European collapse
would be a sign of things to come for the US as well. Bharat Karnad, a colleague of Chellaney at the Centre for Policy Research, argues that whatever happens powers such as China are on the rise and that the West will be increasingly challenged regardless of what happens to the euro. “the health of the euro or the EU, for that matter, will have a marginal impact on gold and power that is tending any way towards Asia, especially China,” he said. Washington takes the potential threat of Europe’s unraveling very seriously. in the short-term, the Obama administration is clearly concerned over the electoral fallout should the crisis in Europe cross the Atlantic before November’s presidential election. But in the longer term, whether the euro survives or not US planners are beginning to face up to the fact that the continent will likely be poorer and rather more self-centered than Washington had hoped. Washington has long been pushing European powers to take more responsibility for their own immediate neighborhood. While Britain and France took the political lead in Libya last year, US Defense Secretary Robert Gates complained European NAtO forces were in fact almost entirely dependent on US munitions, logistics and other backup. But the change in European thinking and the additional defense spending Washington called for now looks all but impossible in this time of austerity. WASHINGTON WORRIED: “it’s doubtful any future US Defense Secretary is even going to bother to make that kind of pitch,” says Gvosdev at the US Naval War College. “We’d hoped Europe could take the lead in some parts of North Africa as well as the Balkans and Eastern Europe. that now looks very unlikely.” US planners were also waking up to the fact that European states were no longer likely to match US donor pledges when it came to humanitarian or financial aid for war zones and troublespots, he said. then, there were longer term strategic concerns. Washington’s military “pivot “ towards Asia, he said, had been based in part on the assumption that Europe would remain stable and wealthy and the US now had little or nothing to worry about on its North Atlantic flank.
the Greek election, that is. One thing is almost certain to come from the Sunday event, and that is more volatility for U.S. stocks, according to analysts and investors. “i think the S&P futures will see their high or low depending on the outcome within one hour of the futures’ opening on Sunday night at 6 p.m. Eastern time,” said Elliot Spar, option market strategist at Stifel Nicolaus & Co. Analysts have viewed the Greek election as a potential turning point for Greece, with all eyes on whether voters will favor the leftist Syriza party opposed to the austerity measures that are part and parcel of Greece’s international bailout package, or the conservative New Democracy, which is committed to upholding terms of that agreement. the election, which could result in Greece’s eventual departure from the euro zone, is also seen as another hurdle for the wider euro zone, which has been embroiled in a debt crisis for well over a year. the rest of the week is not likely to be any quieter. the Federal Reserve is due to release a policy statement on Wednesday at the end of its two-day meeting, and the steady flow of sovereign debt warnings and downgrades is likely to continue. Central banks from major economies are ready to take steps to calm financial markets should the outcome of the Greek elections create a market storm. in yet another sign of investor nervousness, the CBOE Volatility index .ViX, Wall Street’s fear gauge, was up for much of Friday, even as stocks rose, although the ViX finally closed lower. Stocks and the ViX typically have an inverse relationship. One likely outcome of the Greek election is the failure of any party to form a coalition government, said Gregory Peterson, director of investment research at Ballentine Partners LLC in Waltham, Massachusetts, which manages $3.5 billon. “i think that’s a fairly high probability outcome,” he said. “it’s going to leave a lot of heads scratching, and that’s probably not going to be good for the market.” A more bearish outcome would be one that presages an unraveling of the euro zone, said Peterson, whose firm starting reducing its exposure to European assets “over a year and a half ago.” Many investors have been trying to prepare for the worst. “People have been hedging their positions aggressively over the past two weeks heading into this weekend,” said Alec Levine, derivatives strategist at Newedge Group SA in New York. “No matter what happens next week, we will return to a massive game of chicken between the newly elected Greek government, whoever that may be, and the EU, specifically Germany.” THE FED AHEAD: Despite the fears, stocks ended the week on a positive note, marking a second straight week of gains. the benchmark Standard & Poor’s index .SPX is now up 6.8 percent for 2012, though still well off its highest levels of the year. Part of what has spurred optimism for stock investors in recent weeks has been the hope that the Fed and other central banks would act to provide more economic stimulus. there has been continuing speculation over whether the Fed will engage in a third round of quantitative easing. “We do think that expectations of QE3 will drive the market one way or the other,” said Omar Aguilar, chief investment officer for
equities at Charles Schwab Corp, in San Francisco. But the fact that the Fed has made no recent changes to policy could mean the economic data policymakers are seeing is “not as bad as everyone thinks,” said Aguilar. Weeks of worries over potential outcomes of the Greek election have prompted a number of central banks to prepare for market problems.
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ICCI calls for boosting LSM growth for economic revival ISLAMABAD INP
Significant growth of Large Scale Manufacturing (LSM) is essential for economic development. therefore, Government should devise an economic revival plan for boosting growth of LSM sector. LSM has shown minor growth of 1.02 percent in the first ten months of the ongoing financial year 2011-12 over the corresponding period last year, reflecting overall weak performance of the economy, growth oriented measures were required to be taken to pull the ailing industrial sector out of crisis, Asad Farid, Acting President islamabad Chamber of Commerce and industry (iCCi) has said in a statement. he was responding to the reports that the growth of LSM sector has drastically reduced by 12 percent in April 2012 as compared to the month of March 2012 which has showed that LSM has performed below its potential.
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SEATTLE AGENCIES
hE world’s largest software company says millions of people are already using a downloaded pre-release version of Windows 8 on PCs, laptops and touch-devices ahead of its full introduction this autumn. At a media event in Los Angeles on Monday, the company is expected to discuss its plans to take on Apple inc’s all-conquering iPad this holiday shopping season. So far, most reviewers have praised the look and feel of the touch-friendly “Metro” style of Windows 8, which is based on colorful squares, or “tiles,” that depict applications such as email, and update in real time. But they have also stressed how difficult it will be for users to move away from what they know and trust. “it’s a bit of a struggle for people who are deliberately oriented on a PC, that are used to a mouse feel,” said former Microsoft strategist Al hilwa. Now an analyst at tech research firm iDC, hilwa has been trying out the latest demo release for two weeks. “Without a touchscreen, i struggled with a mouse to do certain things,” he said. the new Metro interface only runs programs written for it, so users have to switch back to the traditional desktop to do certain tasks, like listening to music on Apple’s itunes. “the thing that really infuriates me is that it seems like Metro apps, and apps running in the normal desktop don’t have any knowledge of each other, “ said Forrester Research analyst David Johnson. “there’s no easy
way to navigate between them, and i’m not quite sure why that is.” the latest test version is not yet finished software. And outside of a few industry testers, no one has tried out Windows 8 on a tablet powered by ultra-efficient ARM holdings chips, which is the closest Microsoft will come to challenging the iPad. Microsoft is expected to say more about that on Monday, and there is talk that it might introduce a tablet under its own brand name. the company declined to comment on the reaction to the new system and its plans for the Monday event. Nevertheless, Microsoft has not persuaded some of its most loyal users just yet. “Right now, i’m not sold,” said analyst Michael Cherry of Directions on Microsoft, an independent research firm that focuses on the tech giant. Cherry said he had persevered with Windows 8 for a few days, but had problems setting up email on his test machine. “i can’t rely on it as a production tool,” he said. “i can’t switch over yet. At this point, i should be able to leave Windows 7 behind.” A former Microsoft program manager, Cherry worries that the initial complexity of the new system will prevent it from being an instant hit, like its predecessor, Windows 7. “if a guy who has used Windows since Windows 1.0 can’t figure it out, then i’m going to guess there are other people out there who aren’t going to figure it out,” he said. “We won’t see line-ups at Best Buy at midnight. i’d love to see that, but it’s just not there.” JURY DOUBTFUl: Mainstream tech reviewers like the Wall Street Journal’s Walt Mossberg or the New York times’
David Pogue have not yet weighed in on the third and latest “preview” of Windows 8, which became publicly available online on May 31. the smattering of reviews on tech-centric blogs have generally praised the new look of Windows 8, but almost everyone has stressed how difficult users will find the switch. “i’ve felt almost totally at sea — confused, paralyzed, angry, and ultimately resigned to the pain of having to alter the way i do most of my work,” wrote Farhad Manjoo, technology columnist at online journal Slate, even as he acknowledged that there is a lot to love about Windows 8. GeekWire — Microsoft’s hometown technology news website in Seattle — was no kinder, featuring a video of one reader’s father, completely stumped by how to get back to the Start menu. ( ) “Bottom line, i’ve spent the past day feeling lost, and a little grumpy,” wrote GeekWire’s todd Bishop, who has followed the software company as a reporter for more than a decade. “Microsoft likes to use the words ‘fast and fluid’ to describe Windows 8, but two other words keep popping to my mind: ‘New Coke,’” wrote Bishop, referring to Coca-Cola Co’s short-lived attempt to reinvent its core product in the 1980s. Gizmodo reviewer Mat honan praised Windows 8’s “subtle elegance” and said the Metro apps were better and easier to navigate than the last test version, but added there was nothing that “bowls you over.” ZDNet reviewer Ed Bott, a previous skeptic of Windows 8, liked the “rich and polished collection of Metro-style apps,” and was the only high-profile reviewer with a wholly positive reaction.
As Microsoft Corp prepares to show the world what its new Windows 8 can do on the next generation of high-powered tablets, initial reviews of the new operating system on existing hardware underscore the challenges the company faces with the radical redesign of its flagship product
KCCI feels UN doesn’t care about them KARACHI ZAIN ALI
Karachi Chamber of Commerce & industry’s (KCCi) President, Mian Abrar Ahmad has urged the United Nations for positive consideration and registration of KCCi members and Pakistani companies to extend trade opportunities. in his welcome address at joint seminar on brainstorming for registration of Pakistani Companies with United Nations being organized by KCCi and United Nations Procurement Division at KCCi today to capture the Pakistan’s share and to further explore trade opportunities, he apprised that Pakistan being member of United Nations, an emerging economy and developing Nation and strong ally on War against terror truly needs specialized international assistance with regards to trade and business. he voiced that in view of the cost with which Pakistan is fighting War against terror as frontline State is much high with regards to Pakistan’s own resources whereas the benefits are being enjoyed all over the World especially by the West, therefore, the West and UN should treat Pakistan as a privileged nation in extending trade opportunities, free market access and duty concessions to enhance Pakistan’s trade and so the National GDP.
The european Banking union? HANS-WERNER SINN in blatant violation of the Maastricht treaty, the European Commission has come forward with one bailout plan after another for Europe’s distressed economies. Now it wants to socialize not only government debt by introducing Eurobonds, but also banking debt by proclaiming a “banking union.” Socializing bank debt is both unjust and will result in a future misallocation of resources. Socialization of bank debt across borders implies that a country’s private borrowing costs are artificially reduced below market rates, as insurance (in the form of credit-default swaps) is provided free of charge by other countries. thus, capital flows from the core to the periphery would continue to exceed the optimal amount, undermining growth for Europe as a whole. history offers countless examples of the misallocation of resources that can result from socialization of bank debt. One is the 1980’s savings and loan crisis in the
United States, which cost US taxpayers more than $100 billion. Under the umbrella of common deposit insurance, US savings banks made a “gamble for resurrection” – borrowing excessively from their depositors and lending the money out to risky enterprises, knowing that potential profits could be paid out as dividends to shareholders while potential losses would be socialized. in other words, private profits were generated out of socially wasteful activities. And essentially the same happened with US subprime mortgage lending and with the Spanish banking system in the 2000’s. in both cases, banks took excessive risks in the expectation – eventually vindicated – that governments would bail them out. Spanish banks speculated on a continuing increase in real-estate prices, which would bring large capital gains to their customers. indeed, they often lent homeowners more than 100% of the underlying property’s value. to compensate for the damage that their reckless behavior caused, they received €303 billion ($378
billion) in extra credit through target, the European Central Bank’s interbank payment settlement system, and can now expect a further €100 billion in help from the European Financial Stability Facility. Much of this money will never return. Debt-equity swaps would be a much better way to recapitalize the banks. Rather than imposing the costs of the ECB’s and EFSF’s losses on European taxpayers, the banks’ creditors could give up some of their claims in exchange for receiving shares from the banks’ owners. Debt-equity swaps rescue the banks without rescuing their shareholders. ideally, bank creditors would not lose money, because their fixed-interest claims would be converted into bank shares of similar value. this would be the case as long as the banks’ losses remained smaller than their equity capital. A true loss would be inflicted on a bank’s creditors only if the write-off losses on toxic mortgage loans exceeded the bank’s equity. But, even then, it would be better for creditors to bear the loss than for taxpayers to do so,
because this would encourage more cautious lending in the future. Socializing public debt is already posing a risk to the still-stable eurozone countries. to do the same thing with bank debt could pull hitherto sound economies into the abyss, because bank’s balance sheets are much larger than the volume of government debt. in Spain, the public debt-to-GDP ratio is 69%, but the debt of the Spanish banking system totals 305% of GDP, or about €3.3 trillion – about as much as the combined public debt of all five crisisstricken eurozone countries. While the enormous volume of the bank debt implies that governments should shy away from socializing banking risks, it also suggests that only the banks’ creditors could reasonably be asked to foot the bill without being overburdened. indeed, if, as some believe, only a fraction of the banks’ equity is at risk, the potential debt-equity swaps would be minuscule. Spanish banks have 7% equity capital on average on their balance sheets. thus, a debt-equity swap of less than 7.5% of the
creditors’ investment would be enough to compensate for the banks’ losses. And, even if the banks’ private depositors, whose claims are 39% of the aggregate balance sheet, were excluded, the debt-equity swap necessary to compensate for a loss of up to 100% of the equity would be less than 12% of the creditors’ investment volume. Debt-equity swaps have been used successfully in many cases, and they follow from normal bankruptcy procedures. Apart from avoiding the excess burden and injustice of taxation, they also have the benefit of inducing banks’ owners to choose a prudent investment strategy, while persuading creditors to scrutinize and select carefully the banks to which they want to lend. the care taken in augmenting and preserving the wealth that current generations inherited from their ancestors is the ultimate reason for economic growth and capitalism’s success. Massive government interventions during the crisis have undermined this principle, and have probably already destroyed much of the inherited wealth.
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Balanced, tax-free and reflective of people’s inspirations ATHAR ALI KHAN it is a government’s basic responsibility to provide people with facilities and make the right planning for it. the budget is a window to the government’s development and welfare preferences for the masses. Only the budget shows to what extent a government is serious in providing people the rudimentary necessities of everyday life. the Punjab government presented its fifth budget in the Punjab Assembly. Being pro-people, balanced and tax-free, the total outlay of the budget i s
Rs782.8 billion. Presenting the budget, Finance Minister Punjab, Mujtaba Shuja-ur-Rehman, announced the Development Policy for the next fiscal year. the budget includes policies and projects that ensure welfare of the masses, greatly improving their standard of life. Execution of these development policies in the new budget will usher in an entirely new era of prosperity in the province. the common man has not been burdened by the budget in any way, rather measures have been taken for providing him relief. A record-breaking development plan of Rs 250 billion has been earmarked. Substantial amounts of funds have been allocated for less developed areas. Sound steps have been taken for the progress and welfare of women and employment generation for the youth. Projects have been proposed in the budget for the betterment of the downtrodden in the society. Projects to give relief to the common man, such as Ashiana housing Scheme, Educational Endowment Fund, interest-free loans for the jobless youth, and Daanish School will continue to help the common man. Adequate funds have been allocated for these projects. By presenting the welfare-oriented, balanced, and tax-free budget, the Punjab government has proved that PML-N’s sole aim is welfare of the masses. Punjab Chief Minister Shahbaz Sharif deserves accolades for presenting this budget. An example has been set for the federal government and other provinces by cutting salaries of provincial ministers and members of the Punjab Assembly. By appropriating Rs80 billion for South Punjab, the government has shifted its focus towards less-developed areas. this is enough to silence those critics that indulge in the baseless propaganda that funds are not spent in South Punjab. the amount set aside for South Punjab is 32 percent of the total budget. About Rs14 billion have been set aside for women’s welfare in the new budget. Under the Laptop Scheme, promising students will be provided another batch of one lakh 25 thousand laptops worth Rs4 billion. Eight Danish Schools are being constructed in Vihari, Layyah, Lodhran, and Bhakkar districts with an amount of Rs 2 billion. All educational institutions charging fee exceeding Rs. 5000/- will reserve 10% seats for the poor but promising students. the budget proposes Rs 34 billion for implementing pro-poor schemes. the completion of education, health, and infrastructure projects will enable speedy progress in this field. A number of welfare projects for the youth have also been started under this budget. the internship Programme of Rs 10 thousand per month for 50 thousand graduates is a revolutionary step through which the youth will get the chance of getting professional training. the announcement of 80 thousand new jobs will also benefit the youth of the province and decrease the level of unemployment. the plan to end loadshedding presented by the Chief Minister Punjab Shahbaz Sharif is a big step towards industrial development and prosperity of the common man. the Punjab government has presented a sound programme and projects to get rid of loadshedding. A sum of Rs 10 billion has been allocated for tackling
A GLobAL perfeCt StorM NOURIEL ROUBINI Dark, lowering financial and economic clouds are, it seems, rolling in from every direction: the eurozone, the United States, China, and elsewhere. indeed, the global economy in 2013 could be a very difficult environment in which to find shelter. For starters, the eurozone crisis is worsening, as the euro remains too strong, front-loaded fiscal austerity deepens recession in many member countries, and a credit crunch in the periphery and high oil prices undermine prospects of recovery. the eurozone banking system is becoming balkanized, as cross-border and interbank credit lines are cut off, and capital flight could turn into a full run on periphery banks if, as is likely, Greece stages a disorderly euro exit in the next few months. Moreover, fiscal and sovereign-debt strains are becoming worse as interest-rate spreads for Spain and italy have returned to their unsustainable peak levels. indeed, the eurozone may require not just an international bailout of banks (as recently in Spain), but also a full sovereign bailout at a time when eurozone and international firewalls are insufficient to the task of backstopping
both Spain and italy. As a result, disorderly breakup of the eurozone remains possible. Farther to the west, US economic performance is weakening, with first-quarter growth a miserly 1.9% – well below potential. And job creation faltered in April and May, so the US may reach stall speed by year end. Worse, the risk of a double-dip recession next year is rising: even if what looks like a looming US fiscal cliff turns out to be only a smaller source of drag, the likely increase in some taxes and reduction of some transfer payments will reduce growth in disposable income and consumption. Moreover, political gridlock over fiscal adjustment is likely to persist, regardless of whether Barack Obama or Mitt Romney wins November’s presidential election. thus, new fights on the debt ceiling, risks of a government shutdown, and rating downgrades could further depress consumer and business confidence, reducing spending and accelerating a flight to safety that would exacerbate the fall in stock markets. in the east, China, its growth model unsustainable, could be underwater by 2013, as its investment bust continues and reforms intended to boost consumption are too little too late. A new Chinese lead-
ership must accelerate structural reforms to reduce national savings and increase consumption’s share of GDP; but divisions within the leadership about the pace of reform, together with the likelihood of a bumpy political transition, suggest that reform will occur at a pace that simply is not fast enough. the economic slowdown in the US, the eurozone, and China already implies a massive drag on growth in other emerging markets, owing to their trade and financial links with the US and the European Union (that is, no “decoupling” has occurred). At the same time, the lack of structural reforms in emerging markets, together with their move towards greater state capitalism, is hampering growth and will reduce their resiliency. Finally, long-simmering tensions in the Middle East between israel and the US on one side and iran on the other on the issue of nuclear proliferation could reach a boil by 2013. COURTESY: PROJECT SYNDICATE
the energy crisis in the new budget. the Punjab government has devised a comprehensive and effective plan of setting up coal-fired power stations of upto 500MW at six locations to give uninterrupted power supply to the industries located in the industrial Estates. the private sector will be given ample incentives to construct power plants. An energy fund is being set up under which prompt payments will be possible to power plants built in the private sector. the Punjab government is also working on the alternative and renewable forms of energy. A special department for this purpose will be established in the University of Engineering and technology. the Punjab government had earlier set aside Rs 9 billion but the amount could not increase energy output considerably due to negative approach of the federal government. Another important characteristic of the Punjab budget is the announcement of the Chief Minister to increase the pay cut in the salary of the Punjab cabinet from 25 percent to 30 percent. it has been decided to continue the tradition of the chief minister paying from his own pocket for his entourage on foreign visits. this practice will further promote the culture of simplicity. the government of Punjab has proposed revolutionary steps in the budget for ensuring availability of comfortable and quality commuting. For this purpose, it has set aside Rs 11 billion. the government will import 1200 new buses during the next year. the Punjab government has continued the pro-people policy by allocating Rs 5 billion for providing them free medicines in government hospitals. Rs 84 billion have been allocated in the new budget for the health sector as compared with 72 billion in the previous budget. that will further improve conditions in the health sector. the Punjab Chief Minister has not ignored the agony of the kidney patients in the new budget. in the next year, another Rs30 crore will be spent for free dialysis, which is a great relief to the kidney patients. the Punjab Budget 2012-2013 can be regarded as balanced under the current circumstances because it gives concessions to people with limited resources while employees’ salaries and retired people’s pensions have been increased. Funds have been allocated in the social sector so that the common man has access to safe drinking water, gas, electricity, and other basic necessities of life. Development projects will be completed this year under the new budget and poor people will be provided important facilities. the Punjab government deserves ample praise for presenting a pro-people budget of Rs 782 billion and this has been made possible by the untiring efforts of the Punjab Chief Minister Muhammad Shahbaz Sharif. if the federal government brings the looted money from Swiss Banks back into Pakistan, it will not only improve the budget but will also result in more development work, employment generation, and bigger allocations for improving standard of life of the common man. it is the objective of the budget to strike a balance between earning and spending so that the common man gets the much talked about relief. By allocating sufficient amounts in health and education sectors the government has proved that it believes in the service to the people. the Punjab budget 20122013 is a true reflection of the people’s desires. to keep the price of flour stable, Rs27 billion and 50 crore have been allocated while Rs 4 billion have been spared as subsidy during the holy month of Ramazan. these steps are surely good news for the common man.