Pampering the rich, Exploiting the poor.
July 7, 2023
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July 21, 2023

 A turn around is possible

To run out of dollars is bad.   To run out of ideas, imagination and enthusiasm is worse. To run out of capacity to change and learn  is suicidal.  Pakistan is concurrently faced with all three maladies.  It simply refuses to learn anything from anyone.  It failed to figure out what made India receive an FDI of $85 billion in 2022 as compared to $1.5 billion received by Pakistan.  It failed to learn from Bangladesh on how it reduced  its Total Fertility Rate to 1.9  while Pakistan  stayed frozen at 3.6.  It failed to learn from Taiwan, Korea or Singapore on how to build technology based  industries.

Pakistan too can make a turn around.  But this would call for  undertaking painfully drastic reforms.  Pakistan’s greatest challenge lies in seeking alternates to our existing stock of  clueless,  corrupt and power-hungry politicians, who are themselves the biggest roadblocks in the process of change.   The senate chairmen’s insane retirement benefits and parliamentarians availing a Haj at government’s expense, instead of attending the crucial budget session are just two of the recent examples of their collective decadence.  Pakistan desperately needs  a completely  new  set of  competent and  progressive leaders who can inspire and steer the country on modern lines.

No turnaround is possible without implementing  ruthless economy measures – withdrawing all benefits, perks, privileges,  entitlement,  the 200,000 official vehicles, TV sets, free fuel, security guards and allowances of all  serving and retired government officials and politicians. Every official should simply receive a flat salary without any of the dozen or so allowances that inflate their salaries manifolds.    Forty percent of all government ministries and eighty  percent of all Commissions should be dismantled.  The appointment of 90 ministers and  allocation of discretionary fund of Rs90 billion to MNAs are de facto bribes and must be done away with.

Pakistan’s Rs800 billion pension budget is insane and unsustainable.   A new pension scheme be immediately instituted  where each employee  contributes 10 percent of the salary every month while a matching contribution is made by the employer.  The highest government pension paid to any individual ought to be capped at Rs.150,000.   Pensions should be made taxable and not extended to the second generation. Eliminate ghost pensions,  multiple pensions and payment of pensions  in foreign exchange to pensioners living abroad.

Filing of tax return ought to be mandatory for all citizens. The concept of “non-filers” must come to an end.  All bank accounts, electricity bills, air travel, telephone SIMs, BISP handouts, transactions beyond Rs30,000, car registration, purchase or sale of property etc.  must be  subject to filing of taxes.  FBR should be compelled  to design a simple half page tax return in Urdu, that every class 8 student should be able to fill, without paying Rs20,000 to a tax lawyer.

Recent estimates by the World Bank indicate that Pakistan is exploiting only half of its tax potential, leaving almost two thirds of GST liabilities and more than half of income tax uncollected.  Pakistan ought to apply and enhance progressive taxes on retail, agriculture, real estate, pensions, wealth, inheritance, and capital gains.  Every sale / purchase of property ought to be taxed at a minimum of 5% of its current market value.  Introduction of ‘deemed income tax’ based on the actual market value of unused property could easily generate Rs100 billion per year.

Pakistan’s turn around cannot happen without  promoting modern  governance, digital technology,  innovation, import substitution,  new business ideas and  startups.   Eighty percent Pakistanis have almost no purchasing capacity beyond their immediate needs of food and shelter.  Thus an adequate Universal Basic Income (UBI)  for every citizen is vital to the development of indigenous  industry.  Import substitution of products like  coal,  palm oil, tea,  consumable goods, household electronics and Hot Rolled Steel Coils could save up to $10 billion per year and also boost the indigenous industry.

Pakistan ought to open its mind and frontiers to new ideas, people and technology.  It could shed its pariah status  by ruthlessly curbing religious fanaticism,  “raiding homes of  Ahmadis to ensure they do not sacrifice animals”  or   “lynching of citizens on blasphemy allegations”.  Pakistan must shed  appeasement of its orthodox clergy and pampering of its rotten elite. It must also shed loss making organisations like PIA that lost Rs96 billion in 2022 and Rs38 billion in the first three months of 2023.  Many of the hugely bureaucratic and over-staffed government departments  are ideal candidates for application of the tribal wisdom of Dakota Indians –  “when you discover that you are riding a dead horse, the best strategy is to dismount”.

A turnaround is possible (

 Naeem Sadiq

 Express Tribune 8 July 2023