"We are going through difficult economic situation due to fiscal mismanagement. We have been shying away from taking difficult decisions. Armed Forces played their part by voluntarily foregoing annual increase in defence budget and this is not the only step we are taking for improvement of economy," the Army Chief said while addressing a national seminar titled "Pakistan's Economy: Challenges and Way Forward." The seminar was organised by Institute of Strategic Studies, Research and Analysis (ISSRA) at National Defence University (NDU) on Thursday and some of its contents were released to media by Inter-Services Public Relations (ISPR) through a press release on Friday.
"We understand that the government has gone for difficult but quintessential decisions for long-term benefits and what we are doing is playing our part. We all need to fulfill our responsibilities in this regard so that these difficult initiatives may succeed," the ISPR quoted the Army Chief as saying.
Gen Bajwa further said that there are examples in recent past when other countries also confronted similar challenges and they came out successfully after taking difficult decisions. "We shall also IA [Insha Allah] wade through these challenges...In difficult times, no individual alone can succeed unless nation comes together unitedly. It's time to be a nation," the CoAS further stated.
The Army Chief endorsed undeniable linkage between security and economy as both directly complement each other. "There cannot be any sovereignty in the absence of economic sovereignty," the CoAS said. He also highlighted Pakistan's efforts for restoring regional peace that will lead to better trade connectivity.
Talking about regional connectivity, the Army Chief reiterated his vision that countries cannot develop individually and "it is a region which develops. For our region to develop, we need to have greater regional connectivity amongst all neighbours," he added.
The Army Chief said interactions are important to enable both government and other stakeholders to exchange views on issues of national importance.
In the context of ease of doing business, a participant told Business Recorder that General Bajwa shared an incident with the audience about a US-based friend who wanted to set up a fish processing plant in Pakistan.
Gen Bajwa took the investor for a meeting with the then Prime Minister Nawaz Sharif who summoned his principal secretary Fawad Hassan Fawad to provide assistance in facilitating the establishment of the plant. After a couple of weeks Gen Bajwa received a call from his friend informing him that he had abandoned his investment plans as he had been asked for a share from the then federal minister Kamran Michael. "If a man who was recommended by the prime minister and me can be asked to give a cut then you can imagine what other investors have to go through," he said.
The panel of speakers of the seminar included Dr Salman Shah, Advisor to the Chief Minister of Punjab on Economic Affairs and Planning, Dr Farrukh Iqbal, Dean and Director IBA, Dr Abid Qaiyum Suleri, Executive Director Sustainable Development Policy Institute (SDPI), Almas Haider, and President Lahore Chamber of Commerce and Industry, Syed Muhammad Shabbar Zaidi, Chairman FBR, besides others. Dr Ashfaque Hasan Khan, Principal and Dean, School of Social Sciences & Humanities (NUST) chaired and moderated the seminar. A large number of economic experts, think tanks and representatives of business community attended the seminar.
Dr Abdul Hafeez Shaikh, Advisor to Prime Minister on Finance, Revenue and Economic Affairs in his address highlighted the reasons for the persistence of economic challenges facing the country including security threats, inconsistent economic policies, poor economic discipline and lack of will to take difficult decisions in the past. Hafeez Shaikh further said that Pakistan's economy was the fastest growing economy before 70s.
The adviser on finance also told the seminar that Pakistan's economy had shown a better performance under military regimes, said a participant.
Chairman FBR Shabbar Zaidi informed the audience about the benefits of the Assets Declaration Scheme-2019.
He said that the Assets Declaration Scheme-2019 is different from the past amnesty schemes because it is not for revenue generation but for documentation of economy. The Assets Declaration Scheme-2019 provides an opportunity to the general public to regularize both domestic and foreign assets/expenditures, including Benami assets/accounts, at the rate of 4 percent and declaration of foreign assets, if not repatriated back into Pakistan, at 6 percent, he added.
He said that a major difference between the old scheme and the new one is that now it would be mandatory for the declarant to become a tax filer.
"We have tried to make this scheme very easy to understand and implement. The basic purpose of the scheme is not to generate revenue but to document the economy and to bring dead assets into the economy and make them functional," Shabbar Zaidi said.
The FBR chairman referred to the agriculture and services sectors, which are not paying their due amount of taxes as per actual potential. On the other hand, the industry is paying higher taxes as compared to other sectors.
The FBR chairman appreciated the goodwill gesture of the Army Chief to voluntarily forego the annual increase in defence budget.
Dr Ashfaque Hasan Khan, while chairing the session, highlighted the linkage of economy and security. He quoted Paul Kennedy, a British historian: "A nation's military strength rests on its economic strength." He also quoted Robert McNamara, former president of World Bank: "Security means development and without development there is no security. Therefore, economy matters for security. If economy is weakened, the country's national security will weaken."
Dr Khan not too enamoured of the current economic policies to deal with the current economic impasse was reportedly interrupted by General Bajwa who asked: "so what solution do you have?"
The seminar dilated on ways of overcoming budget deficit, low tax collection base, circular debt, loss ridden public sector enterprises, fiscal indiscipline, undocumented economy, weak institutional capacity, low exports, meeting federal obligations within existing NFC arrangements and the perceptions surrounding the prevailing economic environment.