The private sector, the engine of growth, is in deep troubles, but quite surprisingly, the Federal Board of Revenue is happy and obviously it should be because it considers the revenue collection is the only objective of its very existence and the collection is well on way.
To me, it is very unfortunate that the FBR has become a money-making machine for the government and has miserably failed to do any good to this nation. At a time when there is an acute shortage of gas and electricity, cheaper money to the industry is not available. Bad governance is ruling the roost. Law and order situation is alarming. Inflation has jumped up to the unprecedented levels, the FBR's role has raised many an eyebrow.
In my opinion, the situation, we as nation are passing through, is not the making of one day, it is a result the wrong policies we are following blindly since long. Had we been wiser enough, the situation today would have been quite encouraging.
Yes, there are no two opinions about it that the lack of a workable strategic plan has thrown us into the bucket of the most economically and socially-challenged countries.
We, I strongly believe, today hold the utmost responsibility to deliver. We need to stop borrowing a few breaths in the form of interim relief funding from the international donors. We need to start thinking for a long-term, medium-term and short-term solutions to our economic ills. We need to start somewhere and although the ride to economic stability will be long and rough, if determined, we will get there.
We need to start putting an end to our deficits because all I know that consistent and persistent deficits (internal or external) cannot go on forever. The longer they persist, the higher is the probability that the house of cards will fall. The higher is the probability that our borrowed and artificially elevated standard of living as a country will one day need to readjust to economic realities. Question is are we as a nation ready to wake up or do we need to be jolted by external uncontrollable factors to roll over us. I know for sure that we need to reduce the use of commodities that we cannot afford or do not sufficiently have. Let's start with energy. Let's start with oil and let's start with power. And let's think of more creative ways to solve the issues at hand.
If we are really sincere and serious about getting out of present economic logjam, we will have to chalk out an elaborate plan of action, aimed at reducing our dependence on external assistance, and learn to rely on our own meager income, even sacrificing some of the comforts in the process to achieve our long-term goal.
The government should immediately constitute a committee of economic experts and it should be tasked to draw up a comprehensive strategy to deal with the ongoing economic situation. Secondly, the revenue collection department should be completely overhauled and cleansed of corrupt officers to ensure honest collection. The taxation system should be reformed and the element of discretion should be eliminated to minimise the chances of corruption. Wherever possible, the fixed tax system should be adopted so that taxes go into the government treasure and not into the pockets of corrupt officers.
Austerity should be the order of the day and all sort of extravagance be banned to ensure 50% reduction in administrative expenditures. This objective can be achieved by curtailing the liberal perks and other visible and invisible allowances, at the top echelons.
An elaborate plan should be drawn up to push our exports and earn more foreign exchange.
All borrowings, foreign or domestic, should immediately be stopped, even at the cost of postponing some of the development projects for the time being. To overcome, the shortage of electricity in the country, the government should convene an all-party conference without any further delay to get a consensus on Kalabagh Dam. A team of technical experts should be there to assist the government to allay the fears of the people, who are against Kalabagh Dam.
A national policy should also be formed to evaluate and tap huge natural resources available in the country. As a little attention towards this treasure can steer the country out of economic logjam. Economic relations with global players in general and with regional countries should be reviewed on priority basis so the exports could get a boost.
Another important thing is that State Bank of Pakistan should bring down the mark-up rates, which are too high when compared with any of the developed economies. Interest rate in the US is 0.25 percent, in UK 1.5 percent, in Canada 1.5 percent, in Australia 4.25 percent, in Japan 0.1 percent, in China 5.58 percent, in India 5.5 percent and in Bangladesh 7.61 percent. Mark-up rates should be brought down to single digit to support the industry.
These are some of the points that should be made part of a national plan. The time has come to go beyond words and do something practical, to achieve our cherished goal. But one thing is very clear the example has to be set by the ruling elite, the leaders and hierarchy of the bureaucracy. Unless they set an example, progress and prosperity will remain merely a slogan and can never become a reality.
(The writer is the former Senior Vice President of Lahore Chamber of Commerce and former Chairman of Pakistan Poultry Association)