Zarb-e-Azb for reviving Pakistan’s economy..!

 

Now our economic malaise has reached such a stage that business as usual, is going to jeopardise our statehood, not in years, but in months.

This situation can be gauged from the following facts, derived from the State Bank of Pakistan report of September, 2014:

a). Interest payments on domestic debt grew by 80.5 per cent to Rs188 billion in July 2014 from Rs104bn in the same month last year.

b). The debt servicing on permanent debt jumped by 306.7pc in July 2014.

c). The government had to pay Rs147bn in July this year as debt servicing on permanent debts compared to just 36bn a year earlier, a rise of 306.7pc. The permanent debt rose to Rs3.999 trillion in June 2014 while it was Rs2.174tr in June 2013.

d). The debt servicing as percentage of GDP in FY14 was 4.1pc, which was 40.7pc of tax revenue.

e). Debt servicing was 27.5pc of current expenditure in FY14 compared to 24.7pc in FY13.

When we take fresh loans (on very harsh conditions and extremely high interest rates) to payback the old loans, it is a straight forward admittance of the fact that we have gone bankrupt.

However, instead of stemming the rot, by re-building the economy of the country with prudent internal financial management, detailed as below, the government is pursuing a disastrous policy of running the economy, on loans and increasing the rates of taxes and utility bills:

– Adoption of strict financial discipline, under the guide lines of stringent austerity measures.

– Implimentation of strict administrative and legal steps for reduction in world’s highest rate of corruption (which was estimated few years ago by the chairman NAB to be more than Rs.12 billion per day or Rs.4380 trillion or $43.8 billion per year, compared with FY15’s entire budget of Pakistan, which was equal to Rs.4 trillion or $40 billion).

– Enforcement of very strong administrative and legal measures, for drastic reduction in huge theft of taxes and utilities.

In this connection, it may not be a wrong indicator that this nuclear power nation called Pakistan, was being mortgaged with the foreign powers, by design.

In this regard, the following excerpts from the book titled “Confessions of an economic hit man” by John Perkins, are very relevant to the prevailing situation in Pakistan:

i). Economic hit men {EHMs) are highly paid professionals who cheat countries around the globe out of trillions of dollars. They funnel money from the World Bank, the U.S. Agency for International Development (USAID), and other foreign “aid” organizations into the coffers of huge corporations and the pockets of a few wealthy families who control the planet’s natural resources. Their tools include fraudulent financial reports, RIGGED ELECTIONS, payoffs, extortion, sex, and murder. They play a game as old as empire, but one that has taken on new and terrifying dimensions during this time of globalization.”

ii). “Claudine pulled no punches when describing what I would be called upon to do. My job, she said, was “to encourage world leaders to become part of a vast network that promotes U.S. commercial interests. In the end, those leaders become ensnared in a web of debt that ensures their loyalty. We can draw on them whenever we desire — to satisfy our political, economic, or military needs. In turn, they bolster their political positions by bringing industrial parks, power plants, and airports to their people. The owners of U.S. engineering/construction companies become fabulously wealthy.”

Hence, there is no need to emphasise upon the fact that the degree of the sovereignty of a country, is directly proportional to the state of the economy of that nation.

Actually, in constant growth and development, lies our salvation. Secondly, we Pakistanis must know, that without any doubt, the easiest and surest way of moving ahead, is to stand on our own feet.

Foreign aid, can keep us afloat, but won’t allow us to swim.

Now, the time has come to separate the issues of growth, development, health, education, eradication of poverty & security of Pakistan, from the politics; forever.

It has been a shrewd political tactics in the past, by the all and sundry, particularly by those at the helm of the affairs of the country, to divert the attention of the masses, from the real issues being faced by the teeming millions of Pakistan, by mud slinging on opponent politicians, civil and military servants, judges etc. etc.

However, now we must put a full stop to this non-sense, which has wasted the entire life of Pakistan, spread well over nearing seven decades.

Since, its a matter of impending economic collapse of the country, for which almost all of us are responsible, in one way or the other; and almost no one is exempt from the charge of damaging the cause of the country; we must decide to look forward and forgive and forget each other’s sins of the past, and take each and every segment and political force of the society in confidence, for a very transparent scheme of our future development.

In this connection, Mr. Steve Maraboli has very appropriately said that “Make a pact with yourself today to not be defined by your past. Sometimes the greatest thing to come out of all your hard work isn’t what you get for it, but what you become for it. Shake things up today! Be You… Be Free… Share.”
Nothing can match the benefits of the collective wisdom.

Let us build a new economically strong and politically stable Pakistan, by our collective, prudent and wise decisions: knowing very well that no political party, group or institution is so strong, to run this country single handedly, for a sustainable period, without the help and cooperation of each other. We must also realise that our personal safety and better future, lies in accommodating and cooperating with each other, with the sole aim of building a STRONG Pakistan, under the slogan “Re-born Pakistan”.

In this regard, it is suggested that, we should AIM to bring Pakistan by the year 2035, to the level where Singapore was in the year 2015. All politics & other considerations should be made subservient to this TARGET for the year 2030; even if we have to abolish weekly holidays for the next 16 years & reduce our daily sleeping time to 6 hours.

Moreover, just like the Germans did for their re-building after the Second World War, EVERY Pakistani (residing within and outside Pakistan) must pay for the next five years,10% of its salary, business and other earnings, into the newly established “Pakistan rebuilding fund”.

All stake holders, particularly, from the deprived sections of the society in Pakistan, must immediately come forward, for deciding about the direction of the future of the nation.

Biggest factor in any victory is self-confidence. Anti-thesis of terrorism is education, coupled with economic emancipation.

As such, the nation must embark upon the following agenda, to resurrect our economy without any further loss of time.

1. Pakistan should make a solid case for convincing and requesting to all its foreign donors for a 5 years moratorium, on all debt repayments by Pakistan, which is a frontline state of the world’s war on terror (WOT). Here, don’t forget that the world powers have totally written off loans of many countries, for much lesser cooperation than Pakistan, which didn’t even demand a single penny from the NATO, for use of its airspace, since WOT started in Afghanistan.

2. 20% per annum reduction in all non-developmental government expenditures, plus total freeze in all perks paid from the national exchequer, involving foreign currency.

3. Maximum tax rate on each and every type of income in Pakistan should be fixed at 10%. This will not only bring huge revenues to the government, but will also discourage the tax evasion tendencies.

4. Increase in productivity & exports with liberal tax relief to industry, commerce & trade.

5. Set a target for 20% per annum increase in foreign remittances, by offering innovative incentives to expatriate Pakistanis.

6. Either ABOLISH, PRIVATISE or OUTSOURCE FBR (which will alone increase income by Rs.500 billion) or PRIVATISE or OUTSOURCE FBR & IMPOSE FLAT 10% tax (already being applied on dividend payments etc) on ALL & EVERY TYPE OF INCOME (as already mentioned at 3. above), without any exemption (except for the security forces personnel, whose salaries may be doubled with expected receipt of un-precedented increase in revenue, due to this formula). This will not only reduce income tax burden on salaried class (with max. tax rate of 10%, here don’t forget consultants are ONLY paying 6.5% tax) but will also result in so much increase in revenues, to the extent that government will not require any fresh tax imposition, in the budget. Plus, the government will be able to give tax free salaries to all the armed forces, rangers, police and other security agencies personnel, who are shedding their blood, in fighting the menace of terrorism, for our and our children’s safe TOMORROW.

7. Pakistan’s Foreign policy is excellent in theory, perhaps the best in the world. However, this policy should be implemented in its true letter and spirit with core emphasis on PEACE particularly with its neighbours; and FP thrust and theme should be that any and every action, must result in the economic benefit of the country.

8. Initiate steps (by imposing economic emergency) to bring each and every economic activity under document.

I am more than confident that by the dint of sheer hard work, sincerity & honesty, which is imbibed in the bones of the Pakistani work force, we can surely bring Pakistan, into the comity of 20 developed nations of the world, in the next 15-20 years.

9. The leaders of Pakistan holding the destiny of this great nation, with highest manpower potential and material resources in the world, must remember the following two adages.

– NOT FAILURE BUT SETTING LOW AIM IS A CRIME.
– IN ORDER TO ACHIEVE THE IMPOSSIBLE IT IS PRECISELY THE UNTHINKABLE WHICH MUST BE THOUGHT.

10. To motivate and instil confidence in the entire ordinary citizens of the country (which consists of an overwhelming chunk of the 200 million population of Pakistan), all necessary steps should be initiated to immediately eliminate, entire set of rules and regulations, favouring the VIP culture in the country.

11. Immediate and top most priority must be accorded (equal to the priority given to Zarb-e-Azb) to bring back Pakistani wealth (estimated to be above $500 billion) stashed in the banks of many foreign countries. In this regard, an amnesty and incentive scheme may be offered to all those Pakistanis, who want to bring their money from abroad voluntarily.

PAKISTAN PAINDABAD