Presently, Pakistan is undoubtedly wading through the worst ever period in its seventy-five years’ history. Politics has become an industry where people belonging to the elitist classes invest to multiply their fortunes while the poor bear the brunt of their devious machinations. As a consequence, the country is actually ruled by different mafias enjoying unchallenged influence in manipulating markets and having strong clout in running the state affairs.
Hereditary politics, a culture of vendetta, questionable decisions and detestable machinations of the politicians that warranted repeated military interventions have also immensely contributed to where Pakistan stands at the moment. The economy is in complete shambles making the lives of the people extremely miserable.
The situation can be saved by credible and immediate measures to revive the economy and mitigate the sufferings of the people. However, the country would need political stability for the success of said measures in the economic domain. Therefore the people must understand that creating chaos and crisis in the country through agitation on the streets will further aggravate the situation.
There is no quick fix solution to their woes at the moment. The interim government cannot be blamed for sending the economy in a nosedive. It also does not have the mandate to take revolutionary decisions to stem the rot in the economy. It is only there to hold free and fair elections. What is happening at the moment is a cumulative effect of the wrong, unjust and exploitative economic policies of the successive regimes. It will take some time to reverse the situation provided an honest effort is made to identify and rectify the maladies afflicting our social fiber.
Under the circumstances it is encouraging to note that Pakistan Army has taken a centre stage in reviving the economy on war footings and also eliminating mafias and corruption where ever it exists. The establishment of Special Investment Facilitation Council to attract direct foreign investment from the Arab countries including Saudi Arabia, UAE and Qatar in IT, minerals, agriculture and defence is an auspicious development. Positive signals have already started emerging in this regard.
The Army chief in his interaction with the Business community a few days ago revealed that an investment of $25 billion has been discussed with Saudi Arabia and Muhammad Bin Salman has agreed that out of this, $10 billion will be kept in the State Bank of Pakistan which will be returned in the form of Pakistani rupee or goods so as to boost the foreign exchange reserves. He also revealed that similar amounts would be coming from UAE, Qatar and Kuwait. That indeed is a great success and indicates the trust and confidence of these countries in the leadership of Pakistan Army and its ability to deliver on the made pledges.
The Army chief not only talked about attracting foreign investment but he also expressed his determination to sternly deal with the land mafia and extortionists to weed out corruption. He further said that four task forces are being constituted on FBR, border control, smuggling and social media. The COAS was right on money to identify the areas where action is needed to bolster the economy.
Bringing reforms in the working and mandate of FBR is a long due initiative. The country cannot be run only on foreign aid or investments. According to World Bank tax-to-GDP ratio of 15% and above ensures economic growth and poverty reduction in the long term. Taxes are a critical measure of a nation’s development and governance. The tax-to-GDP ratio is used to determine how well government directs its economic resources. Higher tax revenues mean a country is able to spend more on improving infrastructure, health, and education—keys to the long-term prospects for a country’s economy and people. As per available date tax-GDP ratio in Pakistan is 10.3 below the Asia Pacific average of 19.8% by 9.4 percent. So there is a considerable room for improvement in this regard.
Smuggling is a pervasive issue that undermines both the economy and society of a country. It results in the loss of revenue for the government and has been estimated to cause an annual loss of over Rs.400 billion to the national economy of Pakistan. It can be adequately curbed by strict border controls as rightly observed by the COAS.
People need to show patience and support the initiatives taken by the Army leadership to rectify the maladies afflicting the economy and the social fiber. There are no two opinions about the fact that they are under lot of stress at the moment but creating political unrest and chaos is not going to help. It would instead aggravate the situation further. Miracles do not happen in the economic domain. Improvement in the economy surely has a time-lag.
My long term view in regards to sustained economic growth and perennial political stability is that we urgently need a change in the system of governance and the way we elect our representatives. Keeping in view our social milieu and cultural diversity the system of proportional representation provides the best solution to our political and economic problems as it would eliminate the dominance of the elitist classes on the political power and also neutralise the non-democratic forces to have any role in the make and break of the governments. The resultant political stability would act as a catalyst to economic growth.