August 13, 2010

The Plight of Pakistanis

It appears as if the government of Pakistan is just not interested in the affairs that have befallen the country that they rule. For instance, King Zardari has planned a one week trip to Russia next week while the country is trying to overcome insurmountable obstacles. The ministers are nowhere to be found, and the Prime Minister is busy visiting areas to win back the “public support” that has been captured by the Sharifs. Even in this time of crisis, politics is not holding the individuals in the ruling cadre back.

An extremely rough estimate of about Rs. 250 billion losses has come to the fore. This is equal to 2.9 billion USD. However these losses will no doubt increase manifold once the government can spare time for an audit. While our President is making profound transcontinental visits, it appears that Hillary Clinton has donned on the shoes of Zardari by saying that Pakistan will pull through this disaster. This is not the first time she has impressed me; last time she was here, she ensured that all those who cared to listen should know that she knew more about Pakistan, its policies, its grievances, its problems and its solutions better than our self professed professional analysts, and media men. The fact remains that the US has already stepped in to provide $71 million in aid money while our government hasn’t even yet begun to grapple with the full scale of the problem.

Which leads me to question: why this callous attitude on the part of this government? One of the reasons maybe the disconnect that is in place between the ruling and the ruled. The disparity between the two in about every sphere of life puts a profound strain on the ability of the rulers to comprehend and understand the problems that the common people face. Of course it would be sheer stupidity on the part of the masses to expect the government to act as the promised Messiah and guide us out of our troubles but here’s the catch: who to depend on if not even on our own government?

The government is thinking about jacking up the GST to 20% and the income tax is also expected to be raised for this financial year. This has the potential to lead to hyper inflation in the coming months because already food shortage in the affected areas has touched epic proportions and rations are in extremely short supply already leading to super inflation in the flood hit areas; and there are areas where the government has not even yet made an appearance, to apprise the rulers of the tangibility of taking such harsh economic measures. Already the axe had fallen on the development budget this year but the floods have rendered the little bit of development funding quite useless.

 The economic structure has completely collapsed in the flood hit areas and large swathes of agricultural land have been rendered absolutely useless depriving a large number of people in rural areas from their only source of income. The government will no doubt turn to the IMF for immediate relief and the WB for long term support but as history tells its tales, the help from IMF has always come with a heavy price. The decade of 90s doesn’t seem to have passed too long ago. The public sector funding will probably be slashed by more than 90% and only then so that the government can gloat about how it “saved” some money for development and the IMF’s quick fix will also include jacking up tax rates and cutting down on expenditure. This in addition to the fact that, 5 years down the line all the money borrowed will have to be paid back with ridiculous amounts of interest. But that is not the PPP’s concern because 5 years from today its key power holders will be found enjoying crisp mornings and exotic sounds and smells in foreign lands while the people they claimed to have worked for will once again be left to grind the axe.

Once again my appeal is the same: We have got to help us ourselves. All the aid that we can get from abroad is well and good, but to solely rely on it is living in a fool’s paradise. And it would be prudent to have our economists study the impact that the aid and the government’s decision to increase tax rates will have on our economy in the short term and in the long run.

Joining the army doesn’t sound much like a bad career option anymore considering the economy has been blasted back about 25 years.