It may still not be too late

We may be in a steep inflation cycle but can control money and commodities supply through administrative measures

What ails us? We are debt laden. We don’t have dollars. No one is lending us more; not even friends — thankfully. There are crimes in governance we are now accustomed to: we fritter (and steal) money; we are extravagant in our lifestyles, and we are used to freebies. Most of our personal money is stuck in real estate which is the only performing sector where people still hope to make money and invest willingly. It is essentially dead money because it produces nothing and adds nothing to the formal GDP but for those investing, it is sure to return a handsome profit even if the real value of money is seriously depreciated by the time returns come. The profits are untaxed and unregulated. If you find people wealthier than what the state of the national economy reflects, that is why. The state never gets to tap into such earned wealth.

Only those who cannot escape, pay taxes — at best 2% of the 220 million. Tax to GDP ratio stands at 9% — a healthier number should be between 15 to 25%. We create a special category of non-filers who may be slapped a slightly higher rate as a disincentive, but most are happy to be outside of the taxpayers list even if it constrains them from a freer economic activity. Why is that? The Federal Board of Revenue (FBR) just happens to be one such entity, corrupted and corroded, that people prefer to keep out than be under their scrutiny. This culture has found root over decades. If indeed the tax culture among the populace must change it shall have to first begin with a change of culture at the FBR. And if they are disinclined to change their ways because that is how they turn state money into personal asset they shall need to be entirely disconnected in person from the potential taxpayers. Technology, turned simpler, and easier processes can enable this. We may then reduce the size of this wasteful behemoth and redirect tax money into the treasury.

Most importantly, monstrous government expenditure shall have to be seriously curtailed. You can’t have 77 ministers in a country that is looking for alms. Imagine someone gets off a Land Cruiser to beg or wear Gucci to seek donations. Even if they are rightfully rich it is important to act poor when begging. I mean, at the recent Donors’ Conference in Geneva one wondered what made were the suits our beggar-leaders were wearing. So, with the civil and military bureaucracy and those in positions of power. When I neared my first independent command and would have been authorised a rather lavish Toyota Corona in that position PM Junejo ordered austerity and we were binned in 1000CC Suzuki Jeeps. Without as much as a squeak we were cut down to size. As soon as the replacement order came our successors were back into their old glory, all paid for by public money of course.

How these embellishments have only increased over the years baffles us. It is time to review what is reasonable and just and what is not. Eliminate what is not and save this poor nation some extreme embarrassment. Ban the Land Cruisers. Period. And the government should know how it can impose frugality if it isn’t prudently chosen. Tie every government functionary who is authorised a car to a Maruti. You know what I mean. Ban any car above 2000CC for the next ten years in the country. Government purchased cars must never be above 1600CC, locally manufactured, even for the senior most positions in government and civilian and military bureaucracy. No importation of cars from abroad should be permitted. We don’t have money to waste on useless pursuits. Match your perks, privileges, pays and salaries to the revenue collected by the state. Live within your means, and no freebies.

Control the availability of dollar through sensible economic and administrative measures. Those needing dollars for productive utilisation must have an easy access through Banks. Tax reliefs, duty-drawbacks and subsidies for all trading and industrial units must be tied to earning foreign exchange and returning it to country’s banking system. Create a matrix of verifiable FE earned and returned to the economy to claim a corresponding relief or tax break. Without it the freebie must end. It is time for the industrialists and traders to stand up for the country. Remittances and foreign exchange earned through exports will be the only dollars coming in for the next ten years. No one wants to invest in a sinking ship. Private users of foreign exchange may be facilitated through Forex companies for restricted amounts only for travel, education or medical needs. This will need to be closely monitored and controlled. Remittances may be handsomely rewarded. The good Samaritan work for Afghanistan shall have to stop forthwith.

We may be in a steep inflation cycle but can control money supply as well as the commodities supply through administrative measures. The poor and the destitute can still be assisted with government led relief programmes but lavish hand-outs to gain political allegiance will need to end. For the next ten years PSDP hand-outs to MPs too must end. The government may undertake only those development plans which will assist in resource enhancement and optimal utilisation. A resort to IMF is essential but will need a hands-on government to curtail its hyper-inflationary consequence.

We will need a ten-year debt holiday from three bilateral donors, Saudi Arabia, China and UAE. Qatar needs to be added to this list even if it means we mortgage some of our fixed assets to them for these number of years. The initiative to hand over some of the power units for an amount for a fixed period where the fuel to run the plants is the responsibility of the partnering nation is one such idea. We must know that rather than an economic revolution in the next ten years or so, merely keeping our head above the water shall be an achievement. Everything else shall have to wait. Work to sustain what we have and with some luck grow to where we can return what is due to the world. Growth can come in agriculture and IT. Self-sustenance should be the primary objective.

There are numerous mutations of these that the more informed can proffer. But what I essentially reinforce is acknowledging the fact that we are at the tail-end of this global economic chain and will need to slowly work our way up. A government with an honest intent and steeled resolve can do it even at this late hour only if it can stop playing politics with the people and the economy. Where politics will stop, economy will start. To the elites: precipice is here; lose some or lose all.