A large part of the population of the country lives below the poverty level, which is on the increase every month due to mismanagement by our fiscal policy and economic managers
The recent government claims that the poverty level has gone down from 32.1% to 31.8% are far from the truth, and the announcement to bring it down to 25% in the next five years by reducing the utility and allied cost of inputs and stabilizing the end product prices and boosting their exports. The ongoing trend in policy-making speaks otherwise; hence this is a tall claim that is disturbing every thinking Pakistani who is a concerned citizen and can decipher the real macro- and microeconomic upsets. The economy of the country has to be looked at as with a microscope.
Our multinational companies have made remittance of profits during the first eight months of the current fiscal year amounting to US$332 million as compared to US$79.9 million in 2001-02 and US$90.8 million in 2000-01.
No mention has so far been made about the payments made to foreign experts against technical fees and royalties; these figures also do not include the remittance made by food chains and other franchises operating in Pakistan. After all, the brunt of the burden falls on the common man who pays heavily and lives below the poverty level. Is this what we call good economic management in the 21st century? The middle class, which is always the backbone of a strong economic system, is not available in Pakistan; the middle class person has also become a part of the society living below the poverty level, and there are only affluent people and poor people. Most of Pakistan's wealth gets flooded out through different methods of exploitation and corruption, which our government functionaries are unable to control.
The Prime Minister made a laudable and meaningful address to the Pakistani Developmental Forum meeting in Islamabad, but the need of the hour is practical steps to put economic mismanagement on the right path after a threadbare discussion and interaction with economic managers, trade and industry leaders and cross-section of society to achieve self reliance. A lack of vision for the development of government and society level is the root cause; we do not take into consideration what our people are thinking and doing and what methods and strategies they are using. We call ourselves an agrarian economy but follow a corruption-oriented industrial policy and try to emulate the West without any reference to the historical process that has landed us in subjugation and we have developed an attitude of servitude and dependency.
Our privileged segment should stop thinking fatalistically of Pakistan as a poor and economically rogue country; we have ample resources, land, water and mineral wealth and strong manpower. Our country in fact is surviving because of the ingenuity, hard work and creativity of seventy-five percent of the population, who lack formal education but are greatly endowed with natural talent and inborn ability to grasp skills.
There is a great hullabaloo about the government having a foreign exchange reserve of around US$11 billion in the kitty. What are all these dollars worth, if they are only there to strengthen the American dollar, or one day we may hear that those have also been consumed by a stroke of a pen, which is very likely to happen. My advice is to utilize these dollars to build the required national infrastructure of our agrarian economy. Non-productive dollars kept in banks are only a source of mental consolation and have no purpose unless employed usefully.
Pakistan's problem is not inside but outside Pakistan. The advice or for that matter the diktats elites receive from donor agencies is more in their interest than in the interest of Pakistan. So far as pressure for widening of the tax net is concerned, there is enough scope beyond the limits of GST, our Jagirdars and Zamindars who thrive on agricultural land, but do not pay a rupee out of it, should play their role like a Pakistani, and pay their mite to the coffers of the nation to make it more and more prosperous and live without the beggars bowl. Let agriculture be developed on industrial lines to eliminate the commission agents and the money Mafia, who have exploited the small and medium size cultivators and eat the cake themselves. Our country is rich in mineral and agricultural wealth, what is required is only if we can manage it properly and make our ends meet by earning more than sufficient amount of foreign exchange through export of value-added agricultural products.
When we go out in the markets we see price list of items on sale, but the sad part is the items are not sold on the prices listed therein. If we could control prices and ensure availability on the market, a strong middle class will emerge, which is the backbone of every society, as this class has always been the major balancing factor protecting the common man's interests. The New World Order and WTO regime only leads to self-annihilation of the poverty-stricken Afro-Asian developing nations. All these announcements and meetings like the one recently held in a Bhurbun summer resort to reduce poverty growth are meaningless, as no report of the meeting or its resolutions have appeared in the print media, mainly because of the political expediency of the sponsoring governments and the NGOs attending it.
The participants in the Pakistani Development Forum have again given a wrong prescription for our economic ailment and have advised further lowering profit rates on national saving schemes from 10.5% to around 5% and developing a strong rental economy to give a boost to imported consumer goods in Pakistan through totally secured consumer banking and leasing networks, which will again effect our society adversely. One thing that it is of interest to note is that all these foreign banks are paying 4% to 5% as profit on deposits even on term deposits in Pakistan, while they are charging more than 11% to 13% on borrowings, while the standard banking practice use to be a difference of 1% to borrowers against depositors. This is the main way heavy profits are earned and remitted by foreign banks from Pakistan now.
Agriculture, which is the backbone of our country, has been adversely affected by application of sub standard inputs and technology not suited to our environment, so much so that Afghanistan not only imports sugar from Pakistan at a special rate of Rs. 14.32 per kilo and then smuggles it back to Pakistan, because the price of sugar in open market is more than Rs. 19 a kilo. Earlier also during Mian Nawaz Sharif's regime, his family entered into a sale agreement for sugar with India at an open market rate, but also manipulated an increase rebate SRO by 200% to benefit their own business, price of sugar increased accordingly in the local market and the same sugar was re-imported through Dubai to mint more profits. This resulted in further burdening the common man. The rule of law should be that anything surplus to the requirement of the nation should be exported at the best available price, the prices should not be manipulated inside Pakistan to benefit the domestic trading Mafia.
Our surplus in sugar is estimated to go over 9 Lac tons due to previous stocks in hand and
Potato is yet another item, which is required 1.42 million ton for domestic usage, while we have produced 1.69 million tons, so we have a surplus of 27 Lac tons, which can also earn handsome exchange.
Let us attend to the task of building our economy through development of agriculture-based industrial infrastructure and smoke-emitting chimneys by harnessing our own resources, because following the Western agenda of conventional concepts of development and under development, which is the root cause of neglecting human behavior in its widest sense, is not pro-development. Let us live like a nation, bold, straight and upright.
Ali Ashraf Khan
The author is the chairman of the PAKISTAN, UK & Ireland Business Council of the FPCC&I