Cash economy helping illicit trade thrive
Pakistan’s massive informal economy continues provide illicit trade an environment to thrive in, experts highlighted at a two-day media workshop in Bhurban.
The event, hosted by Positive Media Communications in collaboration with Stop Illegal Trade, delved deep into the economic aspects of the menace and various challenges that it poses to Pakistan.
Speaking at the workshop, independent macroeconomist Ammar Habib Khan said that the size of the informal economy in Pakistan has swelled to an estimated 56% of the country’s GDP. He highlighted that enforcement measures on the other hand were too little and that it was surprising how law enforcement agencies had been able to seize only 5% of the amount of goods smuggled into Pakistan.
Khan stressed that effective border management was the key to deal a blow to the shadow economy and increase tax revenues for Pakistan. He disclosed that Pakistan currently has one of the highest consumption of illicit cigarettes in Asia. It has left behind countries such as Taiwan, Philippines, Brunei, Singapore and others when it comes to the volume of illicit cigarettes consumed per annum.
The macroeconomist emphasised the need for providing ease of business to investors instead of creating impediments and complications in their paths. People in Pakistan choose to conduct their businesses in cash as it is easier to do so and avoid the hassles that come with a digital method of doing business.
Published in The Express Tribune, December 16th, 2020.