Majyd Aziz
Today, there are 196 countries spread around the globe. Various multilateral organizations determine the status of these countries by benchmarking their economic and social development. Some are termed as developed nations while others are known as developing or least developed countries. In the past, countries were also categorized into First World or correspondingly as Third World countries. Pakistan is classified as a developing country, although those harboring deep animosities against this Republic love to hype these feelings by calling it a failed or rogue state.
Pakistan has, over the past many decades, experimented with various models to usher in a sustainable economic development status. However, the country has vacillated between a centralized structure, military intervention, pseudo socialism, political dispensation, and unplanned provincialism. The unfortunate mindset prevailing in the corridors of power that policies of the past governments do not reflect their desired manner of governance has widely affected the progress of the country.
The successive governments have all been hampered by the obvious lack of political and moral will to enforce pragmatic legislation and policies that would have been deciding factors in ensuring economic deliverance. The inability of the governments, as well as officialdom, in broadening the tax base has been a debilitating feature of political will. Tax to GDP ratio is pathetic when compared with world standards. It is less than 9% at a time when this nation requires a firm ground to base its economic progress. Revenue collection inches up rather than hopping and jumping. For fiscal year 2011-2012, the Federal Board of Revenue has estimated collection of only Rs 1952 billion whereas the ideal figure should be over Rs 3000 billion. Relentless efforts should have been initiated by FBR to revamp the rules and regulations to achieve the desirable target. Even Rs 2500 billion in today’s scenario would have enabled an inflow of an additional half a trillion Rupees that would have empowered the government to earmark and disburse formidable funds for Public Sector Development Programs as well as to drastically reduce dependence on bank borrowings.
It is to be noted here that whenever the governments get caught in the whirlpool of low financial resources, the first casualty becomes the PSDP. The Finance Ministers blatantly announce on Budget Day that the government is planning to spend the “highest” amount on PSDP but by the time the fiscal year is about to come to a close, the concerned committee quietly announces that due to financial constraints, the allocations for PSDP is planned to nosedive. This is bad economics, because there are relatively fewer or generally casual steps undertaken to control and reduce the non-developmental expenditures that, invariably, are allowed to escalate unbridled.
The Finance Ministry bases its revenue projections on the assumption that budgetary deficits would be tackled by knocking at the portals of multilateral agencies, harnessing domestic savings and bank borrowings, focusing on the expected revenue through taxes, duties, and levies, and heavily relying on remittances by the Pakistan Diaspora around the globe. A tremor in any of these sources results in the budgetary projections going haywire. Fiscal gimmickry is adopted as a matter of routine to present a rosy picture, ostensibly to shield the government from public outcry or to drape the negative factors from foreign lenders or investors. No matter what methods are used, the outcome becomes a disappointing nightmare.
The dependence on IMF does provide much needed financial assistance but the conditionalities imposed by this organization are back-breaking, and instead of addressing the welfare and quality of life of the denizens, the net result is increased hardship for the citizens. When the time comes for repayment of these loans, the country is already hard-strapped for foreign reserves and then the Finance Ministers alongwith economic managers make a beeline to hop on the plane to Washington.
The prime problem in the scenario mentioned above lies in the fact that the finance managers and policymakers have this penchant for considering themselves top grade experts and, in their self-created arrogance, debase the practical and worthwhile proposals, suggestions, and ideas of the private sector. This is the norm, not the exception. Private sector organizations assiduously deliberate, discuss, and then formulate budgetary proposals every year. Countless trips are made to Islamabad and intense lobbying is undertaken to bring about positive change. Political parties are invited to private sector organizations to hear out the business community. Alas, tall promises are made, rhetorical chanting is branded as visionary commitments of that political party, and at the end of the day, Parliamentary representatives of these parties go back to their abodes or offices unsure what they had heard or pledged.
The hierarchy of various Chambers and Associations lack the critical mass to enforce their proposals and ideas because of the very obvious fact that although there is continued hobnobbing with the policymakers, the captains of trade and industry are not keen on being on the wrong side of these decision makers. The onus, therefore, lies on the representatives of the small traders, markets, or small and cottage industries to vociferously create opposition to the steps taken by FBR. This is not the ideal way to get things done, but more often than not, it propels the leaders of trade and industry to come to terms with the ground reality and then they endeavor to adopt the stand taken by the agitators.
Therefore, if the government in power truly desires to bring about an economic revolution, it must, atleast few months before Budget Day, convene an Economic Convention for two days where all heads of political parties alongwith their economic team must interact and listen to the representatives of the private sector and agree on a short-term and long-term economic agenda that would be binding on all segments of society. Everyone has to be on the same page. Populist measures, half-baked ideas, heavy reliance on external financing, burdensome non-developmental expenditure, and universal corruption at all levels must be seriously addressed and policies must be unanimously accepted and agreed to bring the required positive change. Private sector must be fully involved in the economic agenda and it is also the responsibility of private sector to ensure that policies are implemented. Public and private sector must work together to rid the country’s economic development of all the cobwebs, of an ingrained and archaic mindset, of gimmickry and financial shenanigans, of unashamed corruption due to red-tape, inertia, and discretionary powers, and of governmental tomfoolery.
Pakistan has spent $ 70 billion on the Global War on Terror, and in the process lost 38,000 civilians and 3,500 brave soldiers. Natural calamities have severely affected the nation’s progress. Unemployment is at an all-time high. The newspapers often come out with items that Pakistanis are transferring capital to foreign countries. US Senators and Congressmen jump over one another to introduce Bills to whack Pakistan and send it to the Stone Age. Good governance is just a buzzword and not an active policy of the governments. Political leaders embellish a regal lifestyle without any concern for the common man. Law and order situation has become threatening for the very existence of the country. Private sector is shaken and scared. Private sector does not only mean the banks or top multinational companies or Pakistani mega conglomerates. Private sector is actually the SMEs, the small and micro traders, and those who peddle their wares on the streets. They are the most affected and they are on the high seas without a paddle.
Hard-nosed decisions must be undertaken to broaden the tax base. The taxation system must be revamped to be attractive rather than being a deterrent thus impacting positively on tax collection. Dry Ports must be converted to export-facilitation centers rather than using these to support unscrupulous imports. Billions in revenue are lost due to this decision. Pakistanis based in foreign countries must be provided constitutional protection for their investment in their country of birth. Foreign investors must be freed from the shackles of bureaucratic roadblocks and barriers. It is imperative that domestic industries get an even playing field against imports that are under-invoiced, mis-declared, and smuggled in connivance with concerned officials. Most of these actions are doable and must be done. Time is running out. Sadly, political parties, the establishment, and the feudal are all self-centered and keep their heads underground. This is the fact and only the private sector can kick them out of their contaminated mentality and dispassionate scorn for the citizens and induce them to open their eyes to the stark reality because the fire of people’s anger may engulf the whole motherland.
Jo roshnion mein behtay hain wo jantay hi nahin
Hawa chalay to chiragon ki zindagi kya hai
