Pakistan’s economy, complex but soluble | By Brigadier Tariq Khalil (R)

0

Pakistan’s economy, complex but solvable

The other day the World Bank said in its report that Pakistan is on the brink of micro-economic collapse.

The IMF, despite taking over from the incumbent government, although the finalized agreement at the staff level has not been published.

The rupiah fell to the lowest level with some gains. Political instability has brought current affairs to a standstill.

Yet the question is that Pakistan is so weak that it could default. The answer is no. There are two reasons, Pakistan’s top economy is 40% documented and the remaining 60% is undocumented.

The remittances sent by expatriates amount to approximately 3 billion dollars in the banking circuits.

It is estimated that about 3 billion still pass through Hundi. There is massive subversive propaganda at home and abroad (especially in India) that Pakistan is on the brink of economic collapse.

There is no doubt that the economic situation is weak but manageable. First of all, Pakistan is a country full of resources and not at all economically weak.

We fail in the use of resources. Our governance is the heritage of the British. The decision-making process is extremely complex and slow.

The relationship between bureaucracy and economy is like twin brothers. There is no doubt that at the time of the creation of Pakistan, the civil bureaucracy played a vital role in establishing a stable government in Pakistan.

During the years of fermentation, Pakistan has made good progress both in governance and in the establishment of industry and commerce.

IPDC and other development corporations have played a vital role in both East and West Pakistan.

The malaise began in 1973, the experience of industrial recovery cost the country dearly.

This has led to the flight of capital from Pakistan to other countries. Until today, Pakistan has never recovered from this shock.

Corruption in every segment is like cancer. He created; First, the scarcity of resources. Second, the country has failed to grasp technological advances in both agriculture and industry.

A quick return or quick profit is the norm. Manufacturers have never hesitated to resort to unfair means. Agriculture has also declined. Third, Pakistan has never seriously implemented population control measures.

The growing population ate away the gains. The growing population becomes a ticking time bomb. No one will give you food and money forever.

Finally, climate change has had a very serious impact on Pakistan’s economy. Universities have failed to come up with scientific research to improve crop productivity with the global change in climate and seasons.

Heavy rains and disasters accompanied by climate change have also impacted the resource situation in Pakistan.

In addition, governance and political instability have a direct impact on economic development.

This has an impact on other elements of power such as defense and foreign affairs. A way out? Pakistan is not poor in resources but badly managed (comments of a foreign expert).

People have money but the government is poor. First, study the Chinese, Korean or Singaporean models.

These are akin to Islamic principles. Corruption is the major obstacle to the development of the country, vertically and horizontally.

There should be zero tolerance for corruption, however, to achieve this goal, Pakistan needs to undergo two fundamental changes.

The first structural changes in legal and bureaucratic governance and the second, not only make day-to-day business easier, but also make doing business easier.

For example, in Bangladesh, a checklist is provided in industrial areas, fill it out and hand it to one stop shop.

NOC is given in one day. Technology can be an engine of growth. We have seen the past three years with the use of technology improving FBR’s revenue.

The more we remove the human aspect from governance by replacing technology, the more the risks of corruption will be reduced, if not eliminated.

Lateral movements within the services would therefore be immediately halted, a major avenue of corruption.

Penalties for bribery should include penalties and confiscation of assets. Second, the culture of simple living should be promoted among rich and poor alike.

You cannot have two systems or two ways of life prevalent in society where the rich benefit from everything and the poor suffer.

No society is completely balanced, but a system can be designed to provide a level playing field for people.

No socialism but closer to Islamic principles. Like China; it’s hard but we should at least embrace 10 years of austerity.

The Liberals will make it loud and clear, but it will be imposed by law and beliefs. Personal example of leadership is the key.

The poor should receive basic commodities at subsidized rates and the rest of the burden should fall on the rich.

It will reduce the heavy expenditure of importing luxury items and a balance will be created in the balance of payments and also in the current account.

Third, taxes must be low and balanced between direct and indirect taxes and exports.

Domestic industries that can compensate for imported goods are provided; firstly electricity, secondly petroleum products and thirdly gas in these industries, and for this Pakistan needs to completely restructure its economic framework making sure not to depend on the IMF.

Generally, it is believed that the IMF is necessary to guarantee the solvency of the State. Rarely have we seen a country that has made progress take advantage of the IMF facility.

It is now a geopolitical tool. At present, Pakistan’s debt is the highest among its neighbors and many other countries in the world.

It’s time we looked at our own stuff and tried to stand on our own without outside support.

Outside help always pays off. It means living within the means. To stop the flight of the dollar, the economic emergency must be imposed. There is merit in that.

From my personal experience dealing with strategic due cases and getting rid of them, I have no doubt that the dollar is being sucked up by our enemies across Afghanistan, Iran and Dubai in addition to local hoarding.

Banks and exchange offices are partners. In my opinion, the dollar against the rupee, the dollar is overvalued. We need to check this to make sure the true value of the rupee is established.

Punitive measures and persuasion to be used to stop this theft, failing which strict legal action will be taken.

—The author is a decorated veteran of the wars of 1965 and 1971 with 26 years of business experience. A senior television opinion analyst. He is a member of Karachi Editors Club.

Share.

Comments are closed.