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Analysis Economy

These are the 4 things Imran needs to do to save Pakistan’s economy. But he might not

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Pakistan recently went through its third consecutive democratic power transition. The now ruling party, Pakistan Tehreek-e-Insaf (PTI), and its leader Imran Khan raised their election campaign on some of Pakistan’s most fundamental issues, its ailing economy being one of them. But while we all know that the economy is not stable at the moment, it is pointless to debate who and what should be held responsible for its current state. What we rather need to discuss is the remedial actions that can save it from sinking further.

So here are some of the best things that Imran Khan and the PTI can do for Pakistan that no previous government could have done in the last 40 years (because ‘they were all corrupt’):

  • Increase the tax to GDP ratio to bring it at par with other thriving economies of the region like Bangladesh, India, Thailand, Philippines or Jordan – that is around 22-25% of GDP.

Pakistan’s current tax to GDP ratio is miserably low at about 8%. When General Musharraf took over, this ratio was 13%. When he left it was at 8%. As a result of his desire to stay in power for a long period, General Musharraf and his team implemented policies that helped those who did not pay taxes and hence our documented economy shrunk critically. Additionally, Pakistan has the lowest tax to population ratios in the world. PTI must fix this as well. If it fails to do so, this will only be business as usual.

  • If Imran and PTI do not want Pakistan to be a slave of one super power or the other, they will have to document the economy.
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If PTI and Imran Khan fail to fulfill the promises that he made during his election campaign i.e. to convert the black economy into white, then like every previous head of the government, Imran Khan too will have to be going around the world with a begging bowl and offering his army’s services to other imperialist powers who will exploit us for a few crumbs and in exchange get our bases, land, soldiers, jihadis – just like under General Zia and General Musharraf. That was exactly when we started fighting their war and it eventually became our war, as the Taliban started killing our soldiers and civilians and bombing our mosques and churches. The war criminalized our society and the rest is history.

  • Aid and handouts do not help increase the GDP of a nation and provide its people with jobs, education and healthcare.

It does not increase the manufacturing base. It does not increase exports. It does not increase competitiveness. And, consequently, it cannot provide empowerment and employment to one of the largest and youngest populations in the world today. This is what we have seen in the last 30 years and every economist, from Mehboobul Haq to Atif Mian, and from Asad Sayeed to Hafiz Pasha, will tell you the same story.

  • Sadly, the first budget that the PTI government announced has – in one strike – further reduced the tax to population ratio by allowing the non-filers to buy cars and houses of any size and any value.

This probably was done to please some car dealers and builders in their party or for reasons only known to them. What a missed opportunity! Now PM will have to go to other rich nations to sell off his land and men.

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The agreement that Pakistan and Saudi Arabia signed during Imran Khan’s recent visit to the latter says that Pakistan will be partner in protecting their security. One wonders why is Saudi Arabia insecure especially when it is waging a war on a poor and weaker country. In Yemen thousands of innocent children have been killed and are we now supporting these aggressive policies – in return for some money that we cannot collect from our own traders, non-filers, tax evaders, black marketers and non-tax payers. And this visit by the PM has been sold to the public as a great achievement of the Naya Pakistan.

What a Tabdeeli!

God save our industry,

God save our youth!

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