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Ending hopium—I

Is it time to implement manifestos, return to the drawing board under the shadow of a national government, maintain status quo or take prioritized measures to prepare Pakistan of 2047 having 355 million able citizens? Thankfully, new Finance Minister and Prime Minister believe business as usual cannot continue.

Proposition of Pakistan 2047 being a nation of skilled 23-year-olds being paid liveable wages in a competitive and deregulated economy with conducive legal culture, meritocracy, empowered local government, no SNC (Single National Curriculum) or PECA (the Prevention of Electronic Crime Act) but with strong defamation laws, needs proof of concept and is a tall order but very much time to wake up and smell the coffee!

There is no dearth of opinionated thinking on solutions built on 75 years of hindsight, causes of collapsing structure, missed opportunities, country loosing relevance to its region, continued inability to reform even with death in the face require a new vision 2047 as 115 million citizens (50% of current population) get added.

Undoubtedly, road of governance starts with tarbiat at home, it continues with adherence to merit and a constitution that safeguards rights under a process that timely dispenses justice.

Our Constitution needs cleaning up and drafted with roles redefined, changes to it made in the future through a referendum where the will of citizens has a significant influence and financial and legislative accountability defined.

Restructuring of Ministries, Departments through mergers and closure of those redundant has been evaluated and debated many a time but results have not been forthcoming nor visible steps on reducing expenditures or progress on measures SIFC (Special Investment Facilitation Council) had initiated. Who will bell the cat?

Presumably, a 7-member committee (missing PIDE, Prime Institute) notified under Deputy Planning Commission will by some miracle present report in 1 week!

Furthermore, encouraging citizens of foreign countries to work in government, SOEs, regulator, autonomous bodies, court officers, security institutions, etc., is to be only upon declaration stated on Pakistani Passport, CNIC (treated also as NICOP) and on submitting each joining report during their career; same is to apply to family as well?

Parliamentarians, local bodies members cannot be dual citizens and right to vote for expatriates is to be granted only if worldwide income is reported in Pakistan and individual is resident per tax law?

Provincial Financial Commissions, an operational Local Government (lower house) with no provincial assembly, evolution of a federation structure, merger of Senate and National Assembly as a Senate with minimum degree of postgraduate qualification are hypothesized as well as revisiting selection process of judges and overhauling system for timely justice deliverance.

Thus governance debate needs to conclude and execution initiated by a 7-member committee led by Senator Mian Raza Rabbani with constitutional lawyers, experienced jurists with impeccable credentials, Mahmood Khan Achakzai and Aftab Sultan is to complete task in 6 months with secretarial/financial facilitation by SJC. Or the 8-member legal reforms committee constituted by the PM covers across the divide?

Report in either case should be presented to joint parliament subcommittee and action plan including legislative changes placed in a joint house session for approval by a simple majority.

Should empowered Public Service Commission at Federal and Provincial need to have responsibility for recruitment, selection, development, performance evaluation, promotion and accountability; professionals in all functions be assigned to their sector for first 10 years or till promotion into Grade 19 be the norm, and lateral entry based on a rigid evaluation process be the order of the day?

Ending quota system by 2030 is achievable by defining Urdu and English as national languages, instituting two education systems till secondary level that does not encourage rote learning and builds analytical thinking with higher and vocational education system inducting students based on a testing mechanism with a high barrier. Financial need is not to be an impediment. Or, are SNC and Maddressahs our solution?

Education is a Provincial responsibility and should regulatory role be exercised through curriculum, syllabus or only guidelines for each level? Are schools to be operated under local government through 3P (production, preparation, and process) by private sector and “cottage industry schools” replaced with public schools offering education and sport facilities at their premises? Are GORs and District Administration premises not best served as schools of excellence?

The debate needs to conclude and execution initiated by a 5-member team of educationists with impeccable record led by Pervez Hoodbhoy; secretarial and financial facilitation by HEC with completion within six months. A report is presented to a joint parliament subcommittee and action plan including legislative changes placed in joint house session for approval by a simple majority.

Next parallel focus has to be revenue generation and based on “no representation without taxation” principle with registration of all adults as taxpayers and voters upon being issued CNICs with mandatory requirement to file tax return each year and to cast vote.

Unfortunately solutions being repeatedly advocated are to lower taxes, expand incentives and amnesty schemes without matching revenue increases. Then we dream of a reduction in expenses and self-reliance.

This immaturity at a time when Pakistan is struggling with a burgeoning fiscal deficit, stagflation, rising unemployment and increasing circular debt in the energy and food sector with funding of inefficient and loss-bearing (Rs700bn per annum) state-owned enterprises (SOEs) bleeding the country is motivated by self first, hopium and realism sacrificed at altar of popularity ratings.

Setting the economy on the path towards prosperity for the common citizen required systemic reforms yesterday and will be real test of the new economic team as it rolls out prudent policies in conjunction with the IMF (International Monetary Fund). The Caretaker Finance team’s approach to tax base broadening needs to continue.

Neither Pakistan’s salaried class nor indirect taxes be the primary source; it has to be expanded to tax the untaxed: agriculture and property rental (Rs1500bn and Rs4000bn income, respectively), retailers and wholesalers, doctors, hospitals and lawyers, perk rich government employees monetised, nuptial arrangers, etc., need to be brought into the net in next budget.

Focus on documenting economy with there being no tax-exempt categories. SECP (Securities and Exchange Commission of Pakistan) and other institutions issuing business registration documents are to be authorized to also simultaneously issue NTN.

A weak state writ, courts issuing stays on budget and revenue matters and lack of will in increasing tax to GDP ratio to 15-20% are barriers. Any subsidies (Rs700bn) provided for in annual budget are only to be made available directly to the entity or person. Grants (Rs1200bn) need to be done away with.

How will this all occur given the implementation of POS (point of sale) programme, sales tax refunds delays and ‘flying’ invoices in vogue? No one has ownership other than the Finance Minister.

Sheikh Imran Ul Haque, "Ending hopium—I," Business recorder. 2024-04-17.
Keywords: Economics , Economic challenges , Economic diplomacy , Circular debt , GDP growth , IMF programmes , TDCP , DISCOS , HEC , SEZs , PIDE

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