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In 1520, a young man undertook a desperate and grueling 90-kilometer cross-country ski trek in northern Sweden to secure his nation's future. Three years later on June 6, 1523, that same man, Gustav Vasa, was elected king of the Scandinavian country. Five hundred years on, Sweden still celebrates June 6 as its national day. While Vasa's steadfast rule increased the country's independence through greater control of the Baltic Sea trade and liberation from the Vatican, the centerpiece of his nation-building lay elsewhere. He succeeded in banding together Sweden's disparate regions to form a nation-state by introducing a simple and standardized taxation system.

Ascending the throne at age 27, Vasa faced a difficult choice. On the one hand, he could keep the country's administration decentralized, allowing for the independent management of provinces. This would keep the masses calm and the aristocrats happy but risk the country's disintegration by diluting state's powers. On the other hand, he could centralize control by implementing uniform laws and taxation policies. This would afford him a critically important military advantage in fighting invaders and keeping the regions aligned, while primarily promoting the integration of Sweden's peoples into a sustainable nation-state. However, if not handled properly, this approach could spur dangerous popular rebellions. Swedes today thank Vasa for not taking the easy way out.

Through decades of tough reforms, diplomacy, opinion building, and occasional measures of force, Vasa simplified, centralized, and standardized Sweden's tax system. The new, more efficient, and less corrupt system was enforced uniformly, without leniency or discrimination and significantly increased not only the political clout of the central state vis-a-vis the provinces but also the strength of its coffers.

However, farmers and aristocrats alike were angry and rose up to challenge the king's policies. Some felt that the monarch owed them a reward for their support for his bid to the throne, some wanted to escape taxation, while others didn't believe they should be asked to finance the country's obligations. Indeed, their anger was largely understandable. Due to the absence of public healthcare and education it is unlikely that the farmers who suffered the brunt of the tax burden ever got anything in return during their lifetime.

However, the farmers' suffering and sacrifice in the name of their country in combination with Vasa's vision for a financially stable nation-state achieved something fundamental for the establishment of modern Sweden. It laid down the foundation for a social contract between citizens and the state. Over the following five hundred years, this foundation was strengthened by various movements to form a fully-fledged social contract. Today, Swedish citizens take public services like free education and healthcare as a given in return for their prompt and diligent tax payments. This system has helped Sweden reach a seventh place in the Human Development Index (2018), a ranking of 189 countries using measures such as life expectancy, education and per capita income.

Pakistan's leadership today stands at a crossroads similar to the one faced by Vasa. On the one hand, they can maintain the current false stability and choose the easy option so eloquently reflected at a recent small gathering of the CEO100 group in Karachi. "Pakistanis want to get ahead instantly, and nobody wants to pay taxes." However, adopting this approach will inevitably perpetuate systematic imbalances that will weaken the state through deterioration of public services. In turn, this will further undermine the already fraught relationship between citizens and the state.

On the other hand, Pakistan's leadership can ensure country's long-term financial sustainability by adopting a nation-state building mindset. Introducing a centralized, simplified and standardized taxation system for all will no doubt entail sacrifices and cause a stir amongst business-owners, agriculturists and private citizens. However, if the gradual introduction of said system is accompanied by uniform and indiscriminate enforcement, and tangible improvements in service delivery for the average Pakistani, this strategy could put the country on a path toward economic progress and renewed social cohesion. Like the agreement Vasa forged between the state and the belligerent tribes, this partnership could provide Pakistan with the stability to prosper.

With one year in power, Prime Minister Khan's government is in a unique position to take the high, though difficult road, but time may be running out. In the words of Ingrid Johansson, Sweden's Ambassador to Pakistan, "the current government needs to create strong, long term economic and fiscal policies to establish trust nationally and internationally. Lack of consistency makes the necessary changes more difficult."

While historians still debate if Vasa actually undertook that 90-kilometer ski trek before ascending the throne, we can say with certainty that he had almost 40 years in power to transform Sweden. With a mere four years left in office PM Khan must make haste if he is to change Pakistan for the better. By using his time to start the introduction of a simple and standardized tax system, PM Khan could lay down the foundations for a social contract between state and citizens that matches the aspirations of the latter and the capabilities of the former. It will not be an easy process, but perhaps with some inspiration from Vasa, another sportsman-turned-statesman, Prime Minister Khan can find the strength he needs to prevail in creating a sustainable Pakistan for the next 100 years.

(The writer is a social entrepreneur, an Adviser to CEO of Cordoba Ventures and Board Member of Rahgeer)

Copyright Business Recorder, 2019


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