It's strange how this country works

You will hear good reasons from the ruling class why agricultural income, wealth or property cannot be taxed.

Suppose you had the opportunity to have a lengthy conversation with a member of Pakistan's ruling class or one of the people who volunteer to represent their interests. In that case, you'll note how they can always find justifications for why poor policies must continue.

There are compelling reasons why exchange rate interventions are required to avert devaluation. There are also compelling reasons why the government should utilise public funds to subsidise billionaires' corporate interests. Import controls make sense for a variety of reasons. There are also compelling reasons why the country's central bank should print money to provide subsidised credit to these enterprises or to fund the state's fiscal dysfunctions.

Similarly, there are compelling reasons why every ruler who comes to power in Pakistan must beg for assistance from wealthy nations throughout the world. You will hear very good reasons why agricultural income, wealth or property for that matter, cannot be taxed.

All of these are components of the policy package that the country has been employing for decades to either engineer a short-lived growth spurt or to manage the fallout when that growth spurt ultimately leads to a crash.

Import controls, for example, were first implemented in 2016. Since then, their frequency and coverage have increased or decreased depending on the necessity of the hour, but they have not vanished. Exchange rate interventions have been utilised continually throughout this period, with just the strength fluctuating.

The printing of money to stimulate development or compensate for substantial reductions in foreign exchange reserves is an established practice, although it has been occurring in bursts far larger than anything witnessed in previous decades since 2017. Since 2000, every government has begun some type of endeavour to widen the tax base, some bold and coercive, others utilising a carrot-and-stick approach. All of them have failed.

Low-interest rates and stable exchange rates are the most popular tools in our policy toolbox for stimulating growth. This was the recipe used to manufacture Musharraf's growth boom, and it was applied again under the last PML-N administration. It provided the conditions for a crash in both cases. In both cases, the administration celebrated its expansion as proof of its success and blamed the crash on its successor.

All of these good factors together result in the worst set of economic policies.

As this heinous drama was being written and perpetrated on the rest of us, there were numerous good reasons why these things had to happen. There were good reasons for the amnesty policy, as well as the protracted period of low-interest rates and money production via refinancing facilities or open market operations. During the months leading up to the inevitable crash, there were good reasons why import limits and crackdowns were required to stabilise the currency rate.

But there is one thing that stands out among all the rambling 'discussion' that occurs each time this cycle repeats. All of these strong factors combined result in the worst set of economic strategies to deal with an economic catastrophe. It's strange how it works.

Each item in the bundle has compelling reasons why it should, must, or would be disastrous if it did not exist. But when you combine them, you have a policy package that ensures the country sinks deeper rather than climbing out of its hole.

What causes this? In the vast expanse of linguistic intricacies, there exists a term, albeit elusive, that encapsulates the curious phenomenon where a symphony of splendid individual elements amalgamates into a discordant cacophony. Regrettably, the nomenclature for this enigmatic concept eludes me at this precise moment. Yet, my conviction in grasping the underlying rationale remains unwavering. With the audacity to demystify the jest, permit me to elucidate plainly and straightforwardly.

Forsooth, the veracity lies in the stark realisation that none among them can be deemed as meritorious justifications. They just sound fantastic right now. And the problem with things that just sound nice at the moment is that you never know when the moment is through. We've had import limits for seven years, with varied degrees of strength and coverage, and money printing for six. Every year, there are compelling reasons why these things are required. But if you stick with them for years, you'll have a stagnant economy engulfed in inflationary wildfire.

We find ourselves at a juncture where the allure of pleasant-sounding ideas no longer carries the weight of trustworthiness. The pervasive suffering has already descended upon us, and a dire forecast predicts an impending deluge if we fail to rectify the fundamental underpinnings of our predicament. And getting there will require more than a crackdown and likely more than a bailout or two.

Today, we have a country that is striving to compete in the global marketplace of the 21st century on budgetary and productive foundations established in the 1980s. To tax the rich: a strong dose of old-fashioned economic common sense and a massive effort will be required.

Isn't it about time we expanded the proverbial pie, distributing its weight according to each one's capability to shoulder it? So, how do you perceive this intricate issue, and what insights do you have to offer on the subject? We must construct our future with some of the oldest ideas available. It's strange how it works.