Pakistan's economy serves the privileged classes. The militro-judicial-civil complex not only enjoys unprecedented perks and benefits at the cost of taxpayers' money but is also not delivering for what it is being paid. The ruthless landowners and industrialists amass more and more wealth by exploiting landless tillers and industrial workers, respectively. The unscrupulous traders create artificial hike in prices of essential items and thrive on the hard-earned incomes of the poor and the fixed-income classes. The government imposes unbearable indirect taxes on the poor and extends benefits to the rich and the mighty. This is the dilemma of today's Pakistan that is celebrating 77th Pakistan Day commemorating the Lahore Resolution and adoption of Pakistan's first constitution.
The anti-people alliance of elites is the root cause of our many ills. Through cross marriages, the elites 'look after' each other well and manage to perpetuate control over State institutions and economic resources. For civil bureaucrats, life revolves around good postings, lucrative benefits, foreign tours and promotions. Officers having political clout are requisitioned by federal and provincial ministries. They are either relatives of ministers or are close to them. They serve their interests even if law and regulations do not permit so. This has destroyed the entire structure of civil services, where 'political connections' is now the name of the game.
Polarisation, favouritism and politicisation within state institutions are showing their disastrous results. The law and order has collapsed and terrorists attack any place they want with impunity. The State despite taking enormous taxes is asking people to arrange their own security while the State machinery is busy serving the rulers alone. Nawaz Sharif during his third stint as Prime Minister has not learnt any lessons from his past mistakes. He continues to promote cronyism. Many high-calibre officers have been denied promotions many times though recommended by the Central Selection Board and "loyalists" some of whom are much junior, are enjoying lucrative posts. There seems no end to such brazen acts on the part of elites that keep on humming the mantra of democracy but act in an authoritarian manner. The reprimands by Supreme Court and High Courts have failed to produce any desired results as Nawaz considers him like a king.
Elites will never be interested in creating an egalitarian Pakistan. This fact is obvious from the last four budgets presented by the Finance Minister, Ishaq Dar. He has made no efforts to bridge the burgeoning fiscal deficit of nearly Rs 2 trillion by raising taxes in a just manner. On the contrary, he resorted to borrowings from banks and foreign lenders. Due to his faulty policies, the nation is in the darker abyss of the 'debt prison'. Debt servicing is now the largest burden on the economy taking away nearly 60% of taxes collected by Federal Board of Revenue (FBR). The elites are happy as they are enjoying unprecedented benefits and perks, free plots, free club facilities, all financed by the poor taxpayers. On the other hand, there is no political will to provide free health and education to the ordinary people, what to speak of fulfilling other obligations mentioned in the Constitution.
Dr Ishrat Husain in his book, Pakistan: The Economy of an Elitist State, has observed that in sharp contrast to the East Asian model of 'shared growth', based on rapid economic development coupled with a rapid reduction in poverty and more equitable distribution of the benefits of development in Pakistan, the elitist model confers political and economic powers to a small coterie of elite (parasites). While quoting Dr Ishrat's work, Dr Khalil Ahmad of Alternate Solutions Institute, in his book, Pakistan mein Riasti Ashrafiya ka a'roj (Rise of State Oligarchy in Pakistan), has also concluded that Pakistan is presently owned and exploited by elites whereas it should belong to the people of Pakistan.
Supported by the rich and mighty the powerful state officials exploit the system for self-aggrandisement. For example, FBR through SROs [Statutory Regulator Orders] has been providing "legal" (sic) ways and means to the mighty sections of society to amass huge wealth. It was admitted in the House that exemptions and concessions given to the rich and mighty were of Rs 1500 billion in the last 5 years alone. It is worth mentioning that the present government even before presenting its first budget in 2013, issued many favourable notifications for the benefit of those in power, especially for sugar and steel industry. In 2012 when officers of Grade 19-22 were allowed monetized transport allowance, SRO 569(I)/2012 was issued on 26 May 2012 providing that government officials in Grade 20-22 would pay just 5% tax on this allowance. In the Finance Act 2013, the flying allowance of PIA pilots was clubbed with salary, but Ishaq Dar did not provide similar treatment for mighty bureaucrats for their transport allowance. This shows how elites protect each other and professionals get a raw deal just because they are not part of state oligarchy.
The problem of Pakistan is not scarcity of resources, but unwillingness in their proper utilising and managing their equitable distribution, absence of effective administrative and justice systems to check socio-economic injustice. It has been mentioned time and again in these columns that without imposing any new tax or raising the rates of the existing ones, the total revenue collection at federal level alone can be Rs 7 trillion (Rs 4500 billion direct taxes and Rs 2500 billion indirect taxes) if existing tax gap is bridged. This level of collection is possible but as a first step, we will have to reform our State machinery. Expensive State property occupied by them as "residences" should be recouped and sold. Their perks and perquisites should be monetized. Consolidated Pay Package for them, fair and adequate, would reduce corruption and remove a strong sense of elitism and improve governance.
For politicians and all state functionaries, an independent and effective accountability apparatus is the need of the hour. Without the fundamental reforms (Fundamental reforms, Business Recorder, March 13, 2015) we cannot establish a true democratic polity extending socio-economic justice for all, rapid growth ensuring job opportunities for millions of young people, whose frustration is on the rise with every passing day as elites are showing apathy towards them and enjoying luxuries at the State's expense. Dehumanisation of society is leading to gruesome incidents where people are taking lives of the innocents without any remorse and repentance. We will have to move fast to reverse this trend and make Pakistan a republic for the people and not the elites alone. The time has come to take definitive actions suggested time and again in these columns, lest it is too late.
(The writers, authors of many books and partners in HUZAIMA IKRAM & IJAZ, are Adjunct Faculty Members at Lahore University of Management Sciences)
Copyright Business Recorder, 2017