Patriots in silence: a note of dissent on our economic mess

Conspicuous by its absence from public discourse on the economic crisis, the country is currently facing, is the voice of the proud patriot — someone who would proclaim publicly that they are willing to shoulder their full burden because dark clouds are hovering over the nation. Also missing is the sentiment of the conscientious citizen who would agree to forego the use of many favourite brands for the sake of the country.

Please don’t get me wrong; I am referring neither to the philanthropic spirit of the members of our elite nor to potential donations. What I wish to point out instead is this: although our economy has constantly been going downhill we have yet to see any group of individuals or associations trying assiduously thus far to avoid paying direct (income) taxes, to finally come forward and agree to pay the same out of their love for the country. This is sadly true even though refusing to make sacrifices even at this critical juncture speaks volumes about our sense of nationalism, or the lack of it.

The silence on the part of such groups is so palpable that one wonders whether all the stakeholders even know that our economy can only be revived if we manage to increase our national income while simultaneously reducing our expenditures? Have they been shouldering their full share of the burden in this regard? That’s the question one wants to put to members of the ‘untaxed’ sectors — those that refuse to pay income tax.

The loan ranger

Instead of doing the needful, such sectors of the economy just stand idly by as the country is forced to borrow dollars from the International Monetary Fund (IMF) after every few years, just to fulfill its obligations on the external accounts front. But when the going gets tough as a consequence, they promptly and conveniently criticise the lender of the last resort for imposing tough conditions on the nation.

Only the salaried pay taxes

A perception that needs to be challenged here is that in our country every breadwinner pays taxes. Well, that perception is only partly true at best. While every Pakistani breadwinner does pay taxes there are millions upon millions of them who don’t pay all the taxes they should. Put differently, while all of them do pay indirect taxes — in the shape of petroleum levy and various duties mentioned in the utility bills — there are several sectors which simply don’t pay direct (or income) taxes.

The salaried class pays both direct and indirect taxes; they regularly and without fail pay income (direct) tax as well as duties and levies (indirect taxes) via their utility and petrol bills. One feels justified in asserting, therefore, that while the salaried class is discharging its obligations towards the nation the classes that are not paying income tax are shirking their responsibilities.

Missing the dream leader

Also absent from the scene is a (civilian) leader who could rally the people around him/ her after speaking plainly to them about the sacrifices they need to make. In other words, badly needed is a leader having the people’s mandate who would wake the nation up from deep slumber. After all, the masses respond to calls and appeals of a strong and determined leader, not to newspapers or television sets filled with news of impending doom and gloom.

During serious crises the masses expect an Abraham Lincoln, who led his people during the great American civil war, or a Mahathir Mohamad, who steered Malaysia out of the Asian financial crisis of 1997-8, to appear on the scene and properly tackle them. (We will return to the issue of national leadership later in this piece).

More ministers, lesser portfolios

What’s even more tragic, no federal or provincial government (which is supposed to be more knowledgeable in such matters than the masses) has come to the fore and declared that it is willing to reduce its size in a meaningful fashion so as to bring about a drastic decrease in our expenditures. A case in point is the previous federal government’s so-called austerity measures.

During his tenure as the prime minister of the country Shehbaz Sharif delivered a number of speeches in which he frequently blamed his arch-rival Imran Khan for the ongoing financial crisis, but he never cut his government’s expenditures in a big enough fashion. He could have abolished a few ministries or at least kept them minister-less but he chose to announce some cosmetic measures instead. (Mr Sharif had some ministers in his cabinet who were not given any portfolio. In other words, he had more ministers than he had portfolios.)

Let’s privatise

Another millstone around our neck are the state-owned and -run organisations like the Pakistan Steel Mills (PSM), which collectively make a loss of nearly Rs1 trillion every year. These loss-generating factories should be privatised as soon as possible to lessen the burden on the federal budget, but there are wiseacres who oppose all such logical moves because they view some of the companies involved as the country’s “family silver”. What such people don’t understand is that if the US of A (the world’s superpower and its top economy) can do without a national airline then the Land of the Pure can also privatise the Pakistan International Airlines (PIA).

The national flag carrier has been lurching from one bailout to another, with its operations being affected frequently as a result. According to a recent report in the Express Tribune newspaper, “Successive Pakistani governments have been doling out billions of rupees from their budgets to keep the loss-making public entity afloat.”

Pray tell me what’s the logic behind insisting that the government should continue to run loss-making institutions like the PIA and nearly dead ones like the PSM at a time when it has to borrow substantial sums from international and domestic lenders just to pay off past debts. Why don’t people realise that Pakistan has already borrowed money from the IMF more than 20 times. If you keep borrowing for a long time, a stage comes when retiring them, or even paying interest on them, becomes next to impossible.

Be Pakistani, buy Pakistani

Any national leader worth their salt would have told the citizenry by now that we have been living beyond our means. He/ she would have made every citizen realise that importing the types of goods that are produced locally is utterly wrong. That’s because wasting dollars on importing goods that can easily be manufactured and marketed in Pakistan unnecessarily drives the country deeper into the debt trap.

Using local shampoo brands is the need of the hour, therefore. No need for imported brands. This way the Pakistani brands will get a much-needed boost and their quality will also improve. This is a vital area because it pertains directly to our foreign exchange reserves, or in layman terms, to the shortage of dollars in the country.

As many of you know already, our total imports (in dollars) outstrip our exports plus remittances (total incoming dollars) to the tune of over $7 billion per year. This more than any other factor is responsible for our governments’ growing dependence on handouts and bailouts from the IMF and friendly countries like Saudi Arabia and the UAE.

It follows then that every Pakistani leader, and not just the prime minister, should exhort all the compatriots to buy and use only the local products. (Banning import of foreign products may attract objections from international bodies like the IMF and World Trade Organisation but frequent appeals and pleas by local leaders may do the trick).

Export more

The country also needs to launch a nationwide initiative to export more and more goods and services each year to bring in the direly needed dollars. The area which has the potential to turn in exceptional performances in this regard is the information technology and telecommunication sector.

The measures advocated above require a campaign that is implemented wholeheartedly and run at full throttle. The results accruing from such a nationwide campaign will have far-reaching consequences. In comparison, the steps being taken by the current military-cum-civilian set-up to arrest the devaluation of the rupee or rein in theft of electricity and/or natural gas seem to be of limited value.

According to media reports, Army Chief Gen Syed Asim Munir recently met members of the business community and assured them of “making all-out efforts to ensure transparency in dollar rates in open and interbank markets, besides bringing money exchanges under the purview of taxation, eliminating smuggling at the borders with Iran and Afghanistan and improving tax collection”.

The COAS also explained the role of the newly established Special Investment Facilitation Council in efforts to attract investments of up to $100 billion from Saudi Arabia, the UAE, Kuwait and other countries. While Gen Munir’s efforts should be lauded at this time, there are certain factors that need to be kept in mind on this score.

Firstly, several army chiefs mounted similar efforts in the past but the results were generally of the limited type. During Gen Pervez Musharraf’s illegal rule, army personnel were inducted especially in Wapda to improve the position of recovery of bills. Although this initiative looked promising initially, when the drive was ultimately wound up things went back to square one.

Secondly, just as Gen Munir recently met members of the business community, Gen Qamar Javed Bajwa had huddles with industrialists and businessmen in October 2019 and June 2021 to allay their concerns over the deteriorating economic situation in the country. It’s clear that those meetings proved to be inconsequential as the economy has since then simply plumbed the depths of ignominy.

The nation urgently needs reforms, serious and far-reaching reforms, not a window dressing. This is why the impermanence of the existing military-cum-civilian set-up poses a major problem. On top of that it doesn’t enjoy the people’s mandate.

So, the best course of action for the country is to ensure that a general election is held as soon as possible and the reins of power are handed over to elected federal and provincial governments. Governments enjoying the requisite mandate will then have to embark on a long-term programme of reform.

In such a scenario, the current army chief will go down in history as someone who set the ball of reform rolling. However, the onus of turning the economy around and plugging the loopholes will be on the next elected governments, which will have their work cut out for them.

Nizamuddin Siddiqui is an author and teaches journalism at the Hamdard University, Karachi

All facts and information are the sole responsibility of the writer