Volume 23 Issue 5, June 2019


By Dr. Moonis Ahmar

Following the July 2018 general elections, the party which promised a ‘New Pakistan’ based on the ‘Madina’ type of welfare state, came to power. Founded 23 years ago in April 1996 by the former captain of the Pakistan Cricket Team Imran Khan, Pakistan Tehrik-e-Insaf (PTI) was not taken seriously by many political analysts as they considered the program and manifesto of PTI, which called for reforming the society and state institutions of the country, to be too idealistic. From gaining a single seat in the National Assembly during the October 2002 general elections to 35 seats in the May 2013 elections, PTI emerged as the single largest party in the July 2018 elections. Imran Khan’s vision to transform Pakistan as an Islamic welfare state was tested when his party came to power in August 2018.

Ten months down the road, expectations and aspirations of the majority of people of Pakistan from PTI and Prime Minister Imran Khan seem to have been shattered. Enormous increase in the prices of essential commodities, namely fuel and electricity, along with a sharp decline in the value of the Pakistani rupee, will not only augment inflation and unemployment but will also deepen the level of anger, antagonism, frustration, chaos and disorder in society. Perhaps, the high-ups are unable to redeem the ramifications of the impending economic meltdown and crisis in governance but those who have an insight in Pakistan’s political, economic, societal and security dynamics are mindful of the looming disaster if the situation is not brought under control soon. And the situation cannot be regulated or managed by change of guard at the Finance Ministry or the Governor of the State Bank and Chairman of the Federal Board of Revenue (FBR) but wise and prudent policies of the government to enforce strict financial discipline and order, along with accountability, can salvage the country from a predictable economic collapse.

PTI’s uphill road to reforms needs to be examined from three angles. First, the loss of control of the PTI government to manage the economy and governance is a stark reality. Reforming the society along the lines of a Madina-style Islamic welfare state is not possible when contradictions mark the approach and act of the PTI leadership. Saying one thing and doing another reflects the inconsistent mindset of the Prime Minister which is taking a toll on the country’s economy, politics and governance. The loss of credibility because of ineptness, incompetence and inefficiency of the PTI-led government because of poor performance in the last ten months is augmenting domestic crises and external challenges. Reforming the society and state institutions requires political will, determination, enormous sacrifices, perseverance, prudence, courage, planning and vision on the part of those who are responsible for governing the country. Despite tall claims made by Imran Khan, there is no dent in the VVIP culture, corruption, nepotism and incompetence which reflects confusion and poor decision-making by the so-called decision-makers.

Pakistan’s economic predicament is deepening with each passing day because of the huge foreign and domestic debt which is now around 100% of the country’s Gross Domestic Product (GDP). Major state institutions like the PIA, Steel Mills, Railways and Pakistan Post have an accumulated debt of 1 trillion rupees. Excessive external and internal borrowing to run the country along with a sharp increase in the prices of fuel, electricity and gas will further overburden the purchasing power of the common man.

Second, 80% of the income generated by the FBR is consumed to pay the interest on debts and meet defence expenditures while only 20 percent is left to run the country’s administration and carry out developmental programs. Furthermore, since the 18th amendment, the federal government needs to provide every year around 2 trillion rupees to the provinces as royalty of resources generated. The trade gap has marginally reduced to 25 billion dollars. The pressure on foreign exchange reserves is mounting with each passing day as the government needs to make necessary payments to international and domestic lending agencies. The IMF has warned that in the coming two years, Pakistan will have to make debt repayments to the tune of $27 billion. Alternate arrangements to provide some space to the dwindling foreign exchange reserves by borrowing 5 billion dollars from Saudi Arabia, U.A.E and China are unable to make a difference as the reserves are artificially kept and are not even sufficient to meet imports for three months. Desperate measures to enhance foreign exchange reserves, tax collection, reduce imports and increase remittances require coordinated efforts of the Federal Ministries of Finance and Commerce and the FBR.

With more than 200 million people and existential conflicts with India and Afghanistan, Pakistan since its inception till today is vulnerable to external threats and domestic challenges originating from foreign involvement. The PTI Chairman, before coming to power, had claimed that he will ensure doubling of taxes from 4 to 8 trillion rupees but in the ten year, there has been no qualitative difference in tax collection.

Third, the actual vision and program of Imran Khan for reforming state and societal institutions doesn’t match with ground realities. Most of the people around the Prime Minister possess little commitment about what the Prime Minister is talking about. They are with him for their own interests, perks and positions and their lifestyle is not short of any VVIP culture. How can one expect them to adopt a simple way of life as was done in the ‘Madina’-type state when they are unable to change and to create an example of simplicity?

Were the PTI and its Chairman not aware of the grave economic situation and, if they were, why did they claimed that a qualitative change will take place in the first 100 days? The former Finance Minister Asad Umer, who was tipped to take over that portfolio even before the PTI government was formed, was confident that he will surely manage the economic predicament of Pakistan as he was well-prepared to take up such a gigantic task. And then what happened? Within eight months, Asad Umer was shown the door and the blame of devaluation of the rupee versus dollar was placed on the State Bank. The PTI’s policy of not accepting its responsibilities and putting the blame on the previous regimes is the most unwise and unprofessional way of doing things. As a result, one can observe total chaos and crisis in the economy and governance.

The way out for the PTI government to prevent further deterioration in the country’s economy is not that easy and can only be done by taking immediate damage control measures. First, 100% austerity needs to be implemented by those who possess wealth, authority and power. And austerity means their lifestyle needs to be simple as was the case of the last Prophet (PBUH) that when he died, his family did not have enough money to arrange his funeral. Living beyond means creates a situation for the country to live on the dole with its infrastructure mortgaged by the IMF, the World Bank, the Asian Development Bank and other multilateral agencies - a sure recipe for disaster. Second, paying of taxes on income which is earned by those who are doing business, consultancy, educational business and so forth, is the need of the hour. According to estimates, tax evasion in Pakistan hits several hundred billion rupees and, as stated by the Prime Minister, powerful ‘mafias’ sitting in the bureaucracy are in connivance with those who don’t want to pay taxes.

If the new Chairman of the FBR can cause a ‘miracle’ and double the tax collection in the coming financial year, one can expect some improvement in the country’s economy. Conserving resources particularly financial, water and food, will also go a long way in creating some economic space along with eradicating corruption the culture of this country which gives least priority to proper work ethics, integrity, merit and accountability. If Prime Minister Imran Khan wants his country to be a ‘Madina’ type welfare state, he will have to create an example by relinquishing his mansion in Bani Gala and shifting to some lower or lower middle-class locality so that he can have a proper idea about how the majority of the people of his country live.

The writer is former Meritorious Professor and Dean, Faculty of Social Sciences, University of Karachi. He can be reached at amoonis@hotmail.com

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