Economy
Pension Reforms or Financial Massacre?
Since the announcement of Budget 2025-26, the government employees in the centre and the provinces are immersed in protest for their rightful demands, such as Disparity Reduction Allowance (DRA) , a raise in salaries given the prevailing inflation, and old age benefits such as pension. Millions of employees belonging to various departments under the banner of the Sindh Employees Alliance (SEA) have been protesting in the provincial Quarter Karachi and at the division level.
The heat, anger and frustration pervaded Sindh’s air in August 2025. The same scene was repeated from Hyderabad to Nawabshah, from Badin to tiny towns nestled in the rural centre of the province: government workers locking up their offices, getting up from their desks, and taking to the streets. Teachers, clerks, revenue employees, and others who support the province’s operations were now chanting together against what they described as an “economic murder” of their future.
Some held handwritten signs, while others carried banners with bold slogans. At the edge of a rally, one of them, Razia Bibi, a primary school teacher with almost thirty years of experience, stood silently. “I taught generations; now I’m left with uncertainty,” was the simple message on her sign. The words spoke for themselves, so she didn’t have to yell. She and thousands of others felt that the government’s new pension regulations were a betrayal rather than merely a change in policy.
The Sindh Finance Department’s announcement of the Sindh Civil Servants (Defined Contribution Pension) Rules 2025 on August 21 served as the impetus for this unrest. The official justification was straightforward: a new system was required to make the pension bill sustainable because it had become too large for the provincial budget. For those impacted, however, the situation was much more chaotic. The old, guaranteed pension system will be replaced by one that is based on market fluctuations under the new regulations, which will be applicable to anyone hired or regularised after July 1, 2024.
A civil servant could retire under the previous arrangement, knowing exactly how much they would get each month for the rest of their life. They were able to plan, dream, and feel safe because of that promise. That certainty is no longer there. Workers will be required to deposit 10% of their pay into a personal account, with the government contributing the remaining 12%. Private pension fund managers will invest the funds, and the ultimate distribution will be solely based on the performance of those investments. The pension may be sufficient if the markets perform well. That’s the retiree’s problem if they don’t.
Furthermore, the changes don’t end there. Even for those who are currently employed, benefits are being subtly reduced by changes to the West Pakistan Civil Services Pension Rules, 1963, which were announced along with the new program. Instead of using final pay, which is a smaller amount, pensions will be calculated using the average of the last 24 months’ salary. After ten years, some dependents’ family pensions will expire. A person’s pension could be reduced by up to 10% if they decide to retire early.
These measures are about numbers for the government. They are about survival for workers. More than just a technical adjustment, the transition from a defined benefit to a defined contribution system involves a risk transfer. That risk was borne by the government under the previous system. The person does in the new one. And that risk feels like a loaded dice in a nation where salaries have only increased by 12%, inflation has recently risen above 200 percent, and many workers already make less than their counterparts in other provinces.
The wound is only made worse by the elimination of additional benefits for new hires, like group insurance and the Disparity Reduction Allowance. It creates a two-class system in which those hired after July 2024 must live with uncertainty while those hired before that time retain their guaranteed pensions. This division is destructive in addition to being unfair. It causes animosity, lowers morale, and deters young talent from choosing public service as a career in Sindh.
The contrast with how elected officials are treated is even more painful. Low-paid employees are told to make sacrifices for the sake of fiscal restraint, while lawmakers continue to enjoy lavish benefits and allowances. Discussing shared hardship is challenging when the burden is so unequally divided.
The reaction has been quick. In support of their colleagues who were protesting, the Sindh Professors and Lecturers Association in Hyderabad observed a black day by donning armbands. Clerks in Sanghar staged a sit-in outside the office of the district commissioner. Revenue employees in Moro and Daur locked their offices and participated in protests calling for the reinstatement of job quotas for the surviving family members of deceased workers, a privilege that the new framework had taken away. Female educators have been particularly outspoken in rural areas. For many women, the only way to become financially independent is to work for the government. That independence is jeopardised in the absence of a stable pension.
Public services have already been interrupted by the protests. Thousands of students’ lessons have been delayed as a result of school closures. In many offices, administrative work has slowed or ceased. It is difficult to overlook the irony: the government has incited unrest that is undermining the very services it purports to protect in the name of preserving the province’s finances.
There are alternative paths. Employees would have a stronger foundation for their retirement savings if the government increased its contribution to the new pension plan to at least 15% or 20%. It could link pensions to inflation to maintain their value over time and guarantee a minimum pension amount, preventing any retiree from falling into poverty. It could address corruption in procurement and budgeting, reduce unnecessary spending elsewhere, and enhance pension fund management. By taking these actions, financial issues would be resolved without fully burdening workers.
Above all, the government could speak with those whose lives these policies are changing. In a ledger, civil servants are more than just numbers. They are the health professionals who work in distant clinics, the teachers who open young minds, and the clerks who keep the government’s machinery running. Their efforts serve as the cornerstone for the province’s future. The services they offer are compromised when their security is compromised.
There is more to the August 2025 protests than just a response to one policy. They serve as a warning, an indication that public employees will not stand by and watch their rights being taken away. They also serve as a reminder of the annoyance that has been brewing for years due to low income, growing expenses, and a feeling of being ignored. Ignoring this puts the government at risk for both ongoing instability and a long-term drop in the calibre and stability of its workforce.
Reforming pensions is not always bad. Numerous nations have had to modify their systems to take into account shifting economic conditions and demographic trends. However, reform needs to be transparent, equitable, and aimed at preserving the honor of those who have dedicated their professional lives to serving the public good. It shouldn’t serve as an excuse to cut costs at the expense of the most vulnerable. That test is not met by the Sindh Defined Contribution Pension Rules 2025 as they currently stand. They remove guarantees without providing sufficient safeguards. Employees are separated into winners and losers. They make retirement a question mark instead of a promise.
Now, the Sindh government must make a decision. It may continue, resulting in short-term cost savings but long-term instability and mistrust. Alternatively, it can pay attention to the voices on the streets, accept the justifiable concerns of its workers, and seek a solution that strikes a balance between social justice and financial responsibility. Although it will be more difficult, the second route is the only one that pays tribute to the sacrifices and service of those who keep this province running.
Pensions are ultimately about more than just money. They are about acknowledgement—a means by which society can tell its public servants, “Your work was important, and we won’t leave you in your old age.” A generation-old bond of trust would be broken if that were taken away. Fairness, respect, and the freedom to retire fearlessly were the main concerns of the August 2025 protests, which went beyond financial figures. Until the promise of public service in Sindh is restored with dignity, that is a cause worth fighting for.
Amid fear of less pension and cut in pensionary benefits, thousands of teachers and other employees have opted for voluntary retirement before their superannuation, being unsure about the future to escape financial loss. Until the promise of public service in Sindh is restored with dignity, that is a cause worth fighting for.
Hence, it is believed by various public sector employees that instead of the provision of DRA, the Sindh government has committed the financial massacre of employees in the guise of Pension reforms.
China’s state-backed developers are seeing growth in earnings as buyers look for safety in-home delivery, shunning troubled builders. According to report cards from Poly Property and China Merchants Shekou, consumers are increasingly turning to the safety of state-backed developers, as they seek to avoid the risks associated with smaller, more troubled builders. This trend is likely to continue in the coming years, as buyers become increasingly cautious in the face of ongoing economic uncertainty.
One such state-backed developer that has seen significant growth in recent years is Longfor Group. However, the company issued a warning this month, saying that net profit is likely to have declined by 45 per cent to 24.4 billion yuan in 2023. Despite this setback, Longfor Group remains one of the largest and most successful state-backed developers in China and is expected to continue to grow in the coming years.
Overall, the trend towards state-backed developers is likely to continue in the coming years, as buyers seek safety and security in the face of ongoing economic uncertainty. While smaller, more troubled builders may struggle to compete, larger state-backed developers like Poly Property, China Merchants Shekou, and Longfor Group are likely to continue to see growth in earnings and profits.
Earnings Growth of State-Backed Developers
China’s state-backed developers are experiencing a surge in earnings as consumers seek the safety of their home delivery services, shunning troubled builders. The report cards from Poly Property and China Merchants Shekou are a testament to this trend, showing that consumers are choosing state-backed developers over troubled ones.
Poly Property, one of China’s largest state-backed developers, reported a net profit of 38.7 billion yuan ($5.6 billion) in 2023, up 35% year-on-year. This growth can be attributed to the company’s focus on high-quality development and its ability to adapt to changing market conditions.
Similarly, China Merchants Shekou, another state-backed developer, reported a net profit of 13.3 billion yuan ($1.9 billion) in 2023, up 26% year-on-year. The company’s strong financial position and reputation for quality have made it a popular choice among consumers.
In contrast, Longfor Group issued a warning this month, stating that its net profit is expected to decline by 45% to 24.4 billion yuan in 2023. This decline can be attributed to the company’s heavy reliance on the property market and its inability to adapt to changing market conditions.
Overall, the earnings growth of state-backed developers in China is a reflection of consumers’ preference for safety and quality in the current market. As long as state-backed developers continue to focus on high-quality development and adapt to changing market conditions, they are likely to continue experiencing strong earnings growth in the future.
Consumer Confidence in Home Delivery
Chinese consumers are increasingly seeking the safety and security of state-backed developers when it comes to purchasing homes. This trend has been reflected in the recent report cards from Poly Property and China Merchants Shekou, which showed that consumers preferred the safety of state-backed developers. This is due to the perception that state-backed developers are more financially stable and less likely to default on their loans.
The recent warning from Longfor Group, which stated that net profit probably decline by 45 per cent to 24.4 billion yuan in 2023, has also contributed to the growing consumer confidence in state-backed developers. Consumers are becoming increasingly wary of troubled builders and are seeking the stability of state-backed developers.
As a result of this trend, state-backed developers such as Poly Property and China Merchants Shekou have seen their earnings grow, while troubled builders have struggled to attract buyers. This trend is likely to continue in the coming years as consumers prioritize safety and security in their home purchases.
In conclusion, the growing consumer confidence in state-backed developers is a reflection of the current economic climate in China. Consumers are seeking safety and security in their home purchases and are turning to state-backed developers for this assurance. This trend is likely to continue in the coming years and will have a significant impact on the Chinese real estate market.
Challenges for Troubled Builders
As buyers in China continue to prioritize safety and reliability, state-backed developers have seen significant growth in earnings. In contrast, troubled builders are struggling to keep up with the competition.
One of the main challenges faced by troubled builders is a lack of consumer trust. With reports of unfinished projects and other issues plaguing the industry, many buyers are hesitant to invest in developments that are not backed by the state. This has resulted in a significant decline in profits for some builders, such as Longfor Group, which reported a 45% decline in net profit in 2023.
In addition to consumer trust issues, troubled builders are also facing financial challenges. Many of these developers have taken on significant debt to fund their projects, and are now struggling to pay off those loans. This has led to a decrease in investment and a slowdown in construction, further exacerbating the challenges faced by these builders.
Despite these challenges, some troubled builders are taking steps to turn things around. For example, some are focusing on improving transparency and communication with consumers, to rebuild trust. Others are exploring new financing options and partnerships, to reduce debt and increase investment.
Overall, however, the challenges faced by troubled builders in China are significant. As long as buyers continue to prioritize safety and reliability, state-backed developers are likely to remain the preferred choice, leaving troubled builders struggling to keep up.
Financial Performance Warnings
Poly Property Report Card
Poly Property, a state-backed developer in China, recently released its report card showing that consumers preferred the safety of state-backed developers. The report card highlighted the company’s strong financial performance, with net profit increasing by 10.8% to 12.3 billion yuan in 2023. The company’s total revenue also increased by 17.6% to 98.9 billion yuan in the same period.
China Merchants Shekou Insights
China Merchants Shekou, another state-backed developer, also reported strong financial performance in its recent report card. The company’s net profit increased by 17.3% to 10.9 billion yuan in 2023, while its total revenue increased by 14.8% to 73.5 billion yuan in the same period. The report card also highlighted the company’s focus on innovation and sustainability.
Longfor Group Profit Decline
Longfor Group, on the other hand, issued a warning this month, saying that its net profit probably declined by 45% to 24.4 billion yuan in 2023. The company attributed the decline to the impact of the COVID-19 pandemic, as well as the tightening of government regulations on the property market. Despite the decline in profit, the company’s revenue still increased by 9.5% to 143.7 billion yuan in the same period.
Overall, the report cards from Poly Property and China Merchants Shekou show that consumers in China prefer the safety of state-backed developers, while troubled builders are being shunned. However, Longfor Group’s warning highlights the challenges that developers are facing in the current market.
Business
Capitalism Threatens Democracy: How Monopolies and Political Power Have Transformed the American Economy
Since the 1980s, American capitalism has undergone a transformation that has made it a threat to democracy. The economy has become a winner-takes-all system where a few dominant firms monopolize each sector at the expense of consumers, workers, and overall growth. This has resulted in permanent market power that has given rise to political power that is antithetical to democracy.
This transformation of American capitalism has had significant impacts on society. The concentration of wealth and power in the hands of a few has led to growing inequality, stagnant wages, and declining social mobility. The result is a society that is increasingly divided along economic lines, with the rich getting richer and the poor getting poorer.
Capitalism’s influence on politics has also been significant. The concentration of economic power has translated into political power, with corporations and the wealthy wielding enormous influence over the political process. This has led to policies that benefit the rich at the expense of everyone else, including tax cuts for the wealthy, deregulation of industry, and cuts to social programs.
Key Takeaways
- American capitalism has become a winner-takes-all economy that benefits a few dominant firms at the expense of consumers, workers, and overall growth.
- The concentration of wealth and power in the hands of a few has led to growing inequality, stagnant wages, and declining social mobility.
- Capitalism’s influence on politics has resulted in policies that benefit the rich at the expense of everyone else.
Transformation of American Capitalism
In the 1980s, American capitalism underwent a significant transformation that has led to the winner-takes-all economy of today. This new economy is characterized by a few technologically dominant firms that monopolize each sector, leading to negative consequences for consumers, workers, and overall growth.
Rise of Winner-Takes-All Economy
The rise of the winner-takes-all economy can be traced back to the 1980s when the Reagan administration began to deregulate industries and reduce taxes on the wealthy. This led to a concentration of wealth and power in the hands of a few individuals and corporations.
In this new economy, the winners take all the spoils, while the losers are left behind. This has led to a growing wealth gap between the rich and poor, as well as a decline in social mobility. The winners also have the power to shape the political landscape, which can lead to policies that benefit them at the expense of everyone else.
Technological Monopolies and Market Control
One of the main drivers of the winner-takes-all economy is the rise of technological monopolies. These firms have used their market power to dominate their respective sectors, often at the expense of competition, innovation, and consumers.
For example, companies like Amazon, Google, and Facebook have used their dominance to control prices, limit consumer choice, and stifle competition. This has led to a decline in innovation and overall economic growth, as well as a loss of privacy and control for consumers.
Overall, the transformation of American capitalism has had significant consequences for democracy, as the winners in this new economy have the power to shape the political landscape in their favour. It is up to policymakers and citizens to address these issues and ensure that capitalism works for everyone, not just a select few.
Impacts on Society
Consumer Disadvantages
The monopolistic nature of winner-takes-all capitalism has led to a significant disadvantage for consumers. With only a few dominant firms in each sector, consumers are left with limited choices and higher prices. These firms have the power to set prices and control the market, leaving consumers with little bargaining power.
Furthermore, these dominant firms often engage in anti-competitive practices, such as predatory pricing, to eliminate smaller competitors. This results in reduced innovation and fewer choices for consumers.
Worker Exploitation
The winner-takes-all economy has also led to the exploitation of workers. With fewer companies dominating each sector, workers are left with limited job opportunities and bargaining power. This allows dominant firms to pay lower wages and offer fewer benefits, resulting in increased income inequality and reduced social mobility.
In addition, these firms often engage in anti-union practices, making it difficult for workers to organize and negotiate for better wages and working conditions. This leads to a further erosion of workers’ rights and protections.
Stunted Economic Growth
The monopolistic nature of winner-takes-all capitalism has also hurt overall economic growth. With dominant firms controlling the market, there is less competition and innovation, leading to a stagnation in economic growth.
Moreover, these firms often prioritize short-term profits over long-term investments in research and development, which could lead to innovations and economic growth. This results in a lack of investment in new technologies and industries, further hampering economic growth.
In conclusion, the winner-takes-all nature of American capitalism has had significant negative impacts on consumers, workers, and overall economic growth. It is crucial to address these issues and promote a more competitive and equitable economy for the benefit of society as a whole.
Capitalism’s Influence on Politics
Market Power and Political Power
Since the 1980s, American capitalism has evolved into a winner-takes-all economy where a few large firms dominate each sector. This concentration of market power has resulted in political power that is antithetical to democracy. These large firms have the resources to influence political decisions and shape policy outcomes in their favour, often at the expense of the public interest.
One way in which these firms exert their political power is through lobbying. They use their financial resources to hire lobbyists who work to influence lawmakers and regulators in their favour. This can result in policies that benefit the firm at the expense of the public interest. For example, large pharmaceutical companies have lobbied for policies that keep drug prices high, even though this harms consumers.
Threats to Democratic Principles
The concentration of market power in the hands of a few large firms also poses a threat to democratic principles. When a small number of firms dominate an industry, they can use their power to stifle competition and prevent new entrants from entering the market. This can lead to higher prices for consumers and reduced innovation.
In addition, the concentration of market power can lead to a concentration of political power. Large firms can use their financial resources to influence political outcomes, which can result in policies that benefit them at the expense of the public interest. This can erode democratic principles and create a system that favours the wealthy and powerful over ordinary citizens.
Overall, the concentration of market power in the hands of a few large firms has had a significant impact on American politics. It has resulted in policies that benefit the wealthy and powerful at the expense of the public interest, and it poses a threat to democratic principles.
Frequently Asked Questions
How has the evolution of capitalism since the 1980s impacted democratic processes in the United States?
The evolution of capitalism since the 1980s has had a significant impact on democratic processes in the United States. The concentration of market power in the hands of a few technologically dominant firms has led to a winner-takes-all economy that has resulted in increased inequality, reduced competition, and a decline in overall growth. This has led to a political power shift that favors the interests of the wealthy and powerful at the expense of the general public.
What are the key ways in which capitalism can pose a threat to democratic values?
Capitalism can pose a threat to democratic values in several ways. One of the most significant threats is the concentration of wealth and power in the hands of a few individuals or corporations. This can lead to a situation where the wealthy and powerful have disproportionate influence over the political process, resulting in policies that favor their interests over those of the general public.
In what manner has the concentration of market power influenced political power and democracy?
The concentration of market power has had a significant influence on political power and democracy. When a few corporations dominate a particular sector, they can use their market power to influence political decisions that favor their interests. This can result in policies that are not in the best interests of the general public, leading to a decline in democracy.
How do the principles of capitalism and democracy potentially conflict with one another?
The principles of capitalism and democracy can potentially conflict with one another. Capitalism is based on the idea of maximizing profits, while democracy is based on the idea of promoting the common good. In some cases, the pursuit of profit can lead to actions that are not in the best interests of the general public, resulting in a conflict between the principles of capitalism and democracy.
What are the implications of a winner-takes-all economy for the health of a democratic society?
A winner-takes-all economy can have significant implications for the health of a democratic society. When a few corporations dominate a particular sector, they can use their market power to influence political decisions that favor their interests. This can result in policies that are not in the best interests of the general public, leading to a decline in democracy.
How has the relationship between capitalism and democracy changed in the context of modern technological advancements?
The relationship between capitalism and democracy has changed significantly in the context of modern technological advancements. The rise of the internet and social media has led to a democratization of information and a shift in the balance of power away from traditional sources of authority. However, this has also led to the concentration of power in the hands of a few tech giants who have significant influence over the political process. This has led to renewed concerns about the impact of capitalism on democracy.
Introduction
In the dynamic landscape of global economics, Asia stands out as a region of immense potential and growth. To harness this potential effectively, it is crucial to adopt economic models that are well-suited to the unique characteristics and challenges of Asian economies. In this article, we will delve into some of the world’s best economic models that are particularly relevant and beneficial for driving prosperity in Asia.
- The East Asian Development Model
- Origin and Principles: This model, exemplified by the success stories of countries like Japan, South Korea, Taiwan, and Singapore, emphasizes export-oriented industrialization, state intervention, and investment in human capital.
- Applicability to Asia: The East Asian Development Model has proven to be highly effective in fostering rapid economic growth and technological advancement in Asian countries with a focus on manufacturing and innovation.
- The Singaporean Model
- Key Features: Singapore’s economic success is attributed to its strategic location, pro-business policies, efficient governance, and emphasis on education and innovation.
- Lessons for Asia: By prioritizing good governance, infrastructure development, and investment in education, other Asian nations can emulate Singapore’s path to economic prosperity.
- The Chinese Economic Model
- Overview: China’s unique blend of state capitalism, strategic planning, and gradual market liberalization has propelled it to become a global economic powerhouse.
- Implications for Asia: Asian countries can learn from China’s experience by balancing state intervention with market forces to drive sustainable growth while addressing income inequality and environmental concerns.
- The Nordic Model
- Core Tenets: The Nordic countries (Denmark, Finland, Iceland, Norway, Sweden) are known for their strong social welfare systems, high levels of equality, and innovation-driven economies.
- Relevance to Asia: While the Nordic Model may not be directly replicable in Asia due to cultural differences, aspects like social welfare policies and investment in research and development can inspire Asian nations to prioritize human capital development.
- The ASEAN Economic Community (AEC) Model
- Objectives and Challenges: The AEC aims to create a single market and production base among ASEAN member states to enhance competitiveness and integration within the region.
- Opportunities for Asia: By deepening regional cooperation, harmonizing regulations, and promoting trade liberalization within ASEAN, Asian economies can unlock new growth opportunities and strengthen their collective bargaining power on the global stage.
Conclusion
In conclusion, selecting the right economic model is crucial for driving sustainable growth and development in Asia. By drawing insights from successful models like the East Asian Development Model, Singaporean Model, Chinese Economic Model, Nordic Model, and ASEAN Economic Community Model, policymakers in Asia can tailor strategies that leverage their unique strengths while addressing specific challenges. Embracing innovation, investing in human capital, fostering regional cooperation, and maintaining a balance between state intervention and market forces are key principles that can guide Asian economies towards a prosperous future.
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