Round and round we go

As the PPP government stumbles and cries foul, the vultures circle overhead, waiting for the lions to pounce. The army has ruled the country for 33 of its 63 years. Since the country’s trajectory has never righted, logic would indicate that all our governments, democratic and otherwise, deserve equal blame for our current state.

Malfeasance is an epidemic in Pakistan and isn’t restricted to elected officials. However, let us put a figure on some of what politicians have stolen from the exchequer. According to a news item last year, leading financial institutions of the country wrote off loans worth Rs153.5 billion between 1999 and 2007. Lending rates during this time fluctuated between 5 to 13 per cent, but let’s assume a rate of 15 per cent; we can then estimate a figure of around Rs120 billion as interest income lost to creditors. With a tax rate of 35 per cent on banking companies, we reach a figure of Rs40 billion or so in lost tax revenue.

Now let’s place this within a fresh paradigm. Over the same period, our state spent over Rs1.5 trillion on defence. Malaysia gained independence in 1963 and had a rough start, with Singapore seceding in 1965 and facing major race riots in 1969 — even now it has uneasy relationships with its neighbours and territorial disputes with Indonesia. Yet it has spent not more than two per cent of GDP on defence and boasts high literacy and life expectancy. What could a similar ratio of defence expenditure have gained for us? Over the period 1999 to 2007, it would have meant an extra Rs700 billion. That’s 17 times the revenue lost to our loan defaulting politicians. The figure of Rs40 billion does not cover the entire amount lost to the state as result of political corruption but it does provide some perspective.

As a nation we are a strange lot. We give generously to charity yet feel no compulsion to pay our taxes. We protest against the expenditure of our elected government and its legion of ministers, yet we say little about the expensive military our state maintains. Neither private philanthropy nor a strong military can compensate for a bankrupt state. If Pakistan’s perennial deficit could be converted into a sustainable surplus, there would be steady economic growth and a dramatic reduction in poverty, far greater than anything achievable through individual charity. A stronger Pakistan could then easily afford a strong defence.

So rail against political leaders and their aversion to paying their taxes. But accept that there is no alternative to elected government. The only thing the military should be called upon to do is to give up its fixation on India and focus its resources towards combating militant extremists within our borders. Corruption must be addressed, but not by throwing out the constitutional order once again. We have been on this disastrous merry-go-round once too often.

Published in The Express Tribune , October 11^th, 2010.