Sovereignty over servitude — I

Pakistanis are outraged by US Ambassador Cameron Munter’s recent reported assertion that the US government is entitled to influence Pakistan’s internal affairs in exchange for US assistance. The US is Pakistan’s largest source of economic support, either directly or through international financial institutions. These funds enable the government of Pakistan — if not the state — to survive.

Pakistanis naturally resent this situation because they have no leverage in its relationship with Washington and, thus, are beholden to Washington’s diktat. They are right: This funding renders Pakistan answerable to the US taxpayer rather than to Pakistanis. But this anger towards Washington is misplaced. Pakistanis should ask why it is that their state — including its massive, nuclear-armed military — requires outside assistance on the scale it does when Pakistan, in fact, has considerable national wealth.

Pakistan is not a Somalia. Why is it that neighbouring India can pay its way, having transformed itself from an aid-receiving to an aid-granting state, while Pakistan must grovel at the table of the IMF and other multilateral and bilateral donors? Indeed, it is India’s financial success that has drawn global capitals to its doorstep, seeking to sell to India’s state and central governments weapon systems, surveillance technology, power plants, and other needed infrastructure and commodities demanded by the growing country and its minions. It is India’s growing economic heft that gives it leverage in the strategic partnerships it forges — including those with the US and Israel.

There is no reason why Pakistan cannot step out of the shadow of its servitude and into the light of sovereignty. After all, Pakistanis are hard-working and proud patriots.

What does it mean for a state to be sovereign? Apart from exercising monopoly of force and writ of law, more or less homogenously over the state territory, one of the most important elements of state sovereignty is the ability to pay its own bills. While Pakistan is making strides in the former, it has made no progress in the latter.

To free it of international meddling, Pakistan’s political leaders need only to subject themselves and their patronage networks to an agricultural and industrial tax, a move which Pakistan’s leadership has steadfastly avoided throughout the state’s entire history. Of course, it must improve income tax compliance too.

Given this refusal to expand its tax net, the state relies upon an admixture of international assistance and punitive and regressive domestic sales and income taxes to pay its bills. Sales taxes are especially regressive because they affect the poor far more than the wealthy. Government servants — whose income tax is deducted from their wages — and other honest income tax payers pay their way, while the wealthy agriculturalists and business elite abscond. Bangladesh has a better tax compliance record than Pakistan.

The sad truth is that Pakistan’s elite — many of whom sit and have sat and will sit in parliament — have chosen to subjugate their country for their own personal accumulation and preservation of wealth. This should be the focus of public outrage: Not Washington’s expectation that its massive investment in Pakistan yield some return for the interests of its taxpayers.

Some may counter that China and Saudi Arabia help Pakistan without such expectations. These cherished myths are rubbish.

What has China done for Pakistan? It did not help Pakistan in any of its wars with India in 1965, 1971 or the Kargil crisis of 1999, when it took the same line as the US and even India. It did little to help Pakistan in the 2001-2002 crisis with India and it even voted in the United Nations Security Council to declare Jamaat-ud-Dawa a terrorist organisation in 2009, in the wake of the Mumbai terror outrage.

Published in The Express Tribune, February 9^th, 2011.