The past three or four years have been very challenging for the people of Pakistan. Due to the sharp increase in the price of petroleum products and the value of the dollar, ever-rising inflation has made it impossible for the common man to sustain their livelihood. Prices of essential commodities are skyrocketing. There has been a lot of tinkering with the state and the economy over the past few years, but now there is hope for some improvement. I am using the word “hope” very carefully.
There is hope for improvement because now the focus is on addressing the underlying problems rather than providing temporary relief to the people, as in the past. If the measures taken to address these fundamental issues continue, the country’s economy can be put back on the right track, and the people’s problems can be alleviated.
The smuggling of dollars and its illegal remittance through unofficial channels have caused significant damage to the country’s economy. The open market and reference rates have put interbank transactions in jeopardy due to IMF conditions. People continued to buy and hoard large amounts of dollars in anticipation of their appreciation. Smuggling was also a major contributor to the dollar’s rise in value. The consequences of the increased value of the dollar are felt in the form of rising prices on petroleum products and other essential commodities, including food. The hike in petroleum product prices also affects the costs of other essential items. As some individuals profited from sending dollars through unofficial channels, even overseas Pakistanis, who often talk about patriotism, resorted to these illegal channels instead of the proper banking system. This not only went against Pakistan’s interests but also violated the laws of the countries where they reside. This action puts the people of Pakistan in dire straits.
The second significant problem is the monopoly of the elite, including businessmen, bureaucrats, and politicians, over policy-making institutions. They tend to formulate policies that primarily serve their interests but exclude the common man. A recent example of an elite monopoly is the sugar export policy, where sugar was allowed for export even when there was an insufficient supply to meet local demand. This decision favored the elite’s interests.
Another aspect of elite privilege is the massive entitlements granted to bureaucrats and politicians, including hundreds of acres of land upon retirement. During their service, bureaucrats and ministers often travel in convoys of several vehicles. In which civilized country around the world do bureaucrats enjoy such a lavish protocol with multiple vehicles, plots, and lands? If the protocol extended to bureaucrats and politicians were eliminated, and the plots and lands allotted to them were auctioned at market rates, a significant amount could be generated for the national exchequer.
The existing tax system is highly inefficient, granting relief and subsidies to big industrialists and entrepreneurs while imposing indirect taxes on the poor. Recently, the caretaker finance minister formed a task force to reform the tax system, stating that the business class needs to alter its business models. The country’s economic system cannot afford to provide them with more subsidies. Relief and subsidies should be targeted toward the country’s poor, not the elite. It has become necessary to tax the real estate sector, the agricultural sector, and the aristocracy based on their business consumption and income. Collecting maximum tax revenue and ensuring its proper utilization are crucial. While most citizens understand the importance of taxes and are willing to pay to some extent, it is imperative that government officials also realize this importance and cooperate in this regard.
We also need to divest ourselves of state-owned enterprises that have accumulated losses exceeding their total assets. A prime example is PIA, which was once considered a national asset but has now become a financial burden for the country. PIA has incurred losses of 7 billion dollars in the last 10 years, while our losses have amounted to 3 billion dollars. Trying to meet numerous conditions in return for aid has proven futile.
Privatizing state-owned enterprises is another ray of hope. Establishing a Special Investment Facilitation Council to attract foreign investment is important, but it is equally essential to invest in our own people. Pakistan can greatly benefit from developments in education, information technology, exports, and skilled manpower. Moreover, encouraging new companies and youth entrepreneurship should be included in the Special Investment Facility Council’s manifesto. The government needs to prioritize factors necessary for the country’s economic stability and implement them diligently.
In the face of challenging economic conditions, if there is any hope for recovery, we must not let it slip away.
