Strong economy must for survival
Mohammad Jamil
3/14/2011

 

It is an irrefutable fact that given a visionary and capable leadership, Pakistan being a resourceful country could become economically strong, which in turn can make it militarily strong.

This is the only way to guard its independence and sovereignty, especially when there is a hostile neighbour next door. Today the position is that Pakistan faces economic challenges; Pakistanís economy is in dire straits because of fiscal deficit, trade deficit and current account deficit. Our tax to GDP ratio of 9 per cent is the lowest in the region, firstly because of tax evasion and secondly because agriculture sector, which is contributing about 24 per cent to Gross Domestic Product (GDP), but is not being taxed on the grounds that it is a provincial subject. There are also threats to its internal and external security. It is therefore imperative to take measures to strengthen the economy so that adequate resources could be allocated for the welfare of the people and defence of the motherland. Care should be taken that the fruits of development reach the broad masses through socio-economic justice in order to bridge the gap between the rich and the poor, which will help create unity between the people of all federating units.

But there are also social malaises. Rampant corruption, inflation and unemployment have made the life of poor masses miserable. The entire land from one end to another is echoing with the public cries of gloom, dejection and distress. But there are no listeners either in the ruling hierarchies or the opposition camps. Just turn over the pages of any newspaper, its inside pages make doleful read on a screaming public being crushed by a cruel juggernaut of poverty, want, disease, joblessness, inflation, lawlessness and criminality. It is indeed the primary responsibility of rulers to ensure protection of life and property of citizens; create employment opportunities; keep the prices of essential commodities within the reach of the common man and allocate a reasonable amount for health and education sectors in the budget. But the ruling elite seem to be oblivious to those genuine demands of the people. Instead of addressing these problems, the rulers are engrossed in settling scores with their opponents. The ruling elite in Pakistan have failed to demonstrate futuristic vision and skills to handle the economic affairs of the country. Disproportionate rise in the prices of almost all agriculture products, scarcity of energy for industry, global increase in oil prices, and lavish spending by political leader have adversely impacted the economy.

In order to extricate from this situation, the political leadership must demonstrate a firm resolve to exercise strict financial discipline, avoid wastage of resources, bring about effective tax reforms, uproot corruption, improve law and order situation with a view to attracting foreign investment. Our political leadership on both sides of the divide must unite against the terrorism and give a sense of optimism to the masses by providing them economic relief and hope for a better life. Our economic managers also have failed to address the imbalances and distortions in the economy because of their flawed perceptions and ineptness. Instead of taxing the rich, they find it convenient to frequently increase prices of petroleum products and electricity tariff, knowing full well that the cost of transportation and cost of production also increases, placing additional burden on the consumers. In order to fight cost-push inflation, measures should be adopted to reduce the cost of production by lowering the interest rate and rationalization of electricity and gas tariffs. The problem is that the rich and powerful do not pay due taxes, it is therefore imperative for the government to increase its revenues by directly taxing the income of the rich and powerful, and at the same time check tax evasion.

Losses to the public sector organizations due to mismanagement and corruption are other reasons for the present dismal situation. It is in this backdrop that the government has to fall back on the IMF. But conditionalities of the IMF like enhancing electricity tariff, and higher bank interest rate are a recipe for disaster. On one hand, our industry is becoming uncompetitive in the world market, while on the other hand, together with food inflation, it is eroding the incomes of salaried class and fixed income groups. It is desirable that the government comes out with the plan to get rid of the IMF. There is a perception that if tax evasion is checked and the government shows zero-tolerance to corruption, the budgetary gap can be bridged. Similarly, if the government puts restrictions on import of luxury items, the trade deficit can be controlled, and Pakistan could come out of clutches of the IMF within a short time. The problem is that our leaders neither have the time to address real issues nor they have the vision, wisdom and expertise to meet the challenges facing the nation.

The PPP-led federal government has indeed failed to deliver on many counts; but so have all the provincial governments, because controlling the law and order situation and maintaining a check on prices fall within the domain of the provinces. And they have also utterly failed in keeping a check on prices and providing any relief to the masses. They have been trying to amuse the people through the Charter of Democracy and with the 10-point programme, on which confabulations between the PML-N and the PPP have led to nowhere. In fact, there was nothing to alleviate the sufferings of the people either in the Charter of Democracy, in the 18th amendment or for that matter in PML-Nís 10-points. What people are interested in is the consensus on the ways to generate job opportunities and to bring the prices of essential commodities within the reach of common man. Meanwhile, PML-N has ended its coalition with the PPP in Punjab and got rid of the PPP ministers and parliamentary secretaries. In fact, the present crop of the political class continues with the blame game against each other to divert the attention of the people from the real issues.

This way they try to cover up their intellectual bankruptcy, shady political deals, political expediencies and dirty political tricks. These eminences do not realize that the people are fed up with this churlish circus show and do not consider them as real leaders. There is still time that instead of indulging in the politics of power and pelf, they get down to the serious business of governance of state that has been neglected banefully so far. For how long have the people to keep putting up with the ploys of self-perpetuation and self-aggrandizement of these elites who are the worst type in the world for their greed, avarice, exploitation and sleaze?

The question is why the filthy rich and jagirdars are not being taxed on the spurious pretext that it is a provincial subject? With the scions of landed aristocracy occupying the positions of strength in both the government and opposition camps, only an incorrigible optimist or a fool can imagine if such tax will ever be introduced. They will have to change otherwise the tiny islands of opulence will be swamped and washed away in the vast ocean of poverty.