Pakistanis have endured 77 years of a painful journey comprised of unprecedented suffering. The misery of the poor and less privileged will continue unabated, no matter how many Independence Days we celebrate, unless our state and society is restructured on the principles of equity, fairness and justice—fundamental elements enunciated in Article 3 of the 1973 Constitution of Islamic Republic of Pakistan.
The open and blatant defiance of the latest majority 9-member judgement of the Supreme Court of Pakistan for rectifying the mistake of Election Commission of Pakistan (ECP) in allocating reserve seats through enacting Elections (Second Amendment) Act, 2024 by the Senate & National Assembly—just a week before the 77th Independence Day—is highly lamentable. It amounts to a shameless violation of Article 189 of the Constitution that is bound to push the country towards further anarchy and constitutional breakdown. It is highly deplorable, when the nation is already weary of unabated terrorism, lawlessness, economic meltdown, unprecedented tax burden and high food inflation.
The prevalent political instability and grim economic crisis is not a sudden isolated phenomenon. It is caused entirely by the state being held captive in the hands of the militro-judicial-civil complex, absentee landowners, pirs (spiritual leaders), industrialist-turned politicians and traders. Pakistan’s economy serves these privileged classes. The militro-judicial-civil complex not only enjoys unprecedented tax-free benefits at the cost of taxpayers’ money but has failed to deliver for what it is paid. Absentee landowners and industrialists continuously amass wealth by exploiting landless tillers and industrial workers, respectively.
Unscrupulous traders create artificial hike in prices of essential items and thrive on hard-earned incomes of the poor and fixed-income classes without even sparing hapless citizens during auspicious occasions like Eid when prices go beyond the reach of even middle-class families. Adding insult to injury, successive governments keep on imposing and increasing oppressive, unbearable indirect taxes on the poor, while extending unprecedented benefits to the rich and mighty. This is the dilemma of today’s Pakistan, where we are going to celebrate our 77th Independence Day on August 14, 2024!
The anti-people alliance of militro-judicial-civil complex is the root cause of our major ills. Through cross marriages, they ‘look after’ each other and manage to perpetuate control over state institutions and economic resources. For civil bureaucrats, life revolves around good postings, lucrative benefits, foreign tours and promotions.
The prevalent political instability and grim economic crisis is not a sudden isolated phenomenon. It is caused entirely by the state being held captive in the hands of the militro-judicial-civil complex, absentee landowners, pirs (spiritual leaders), industrialist-turned politicians and traders. Pakistan’s economy serves these privileged classes.
Officers having political clout are requisitioned by federal and provincial ministries for lucrative posts with unbelievable perks and benefits. The civil servants serve their political masters’ interests rather than the people, sometimes in defiance of established regulations, thus destroying the entire structure of the civil services, where ‘political connections’ is now the name of the game.
Polarization, nepotism and politicization within state institutions are yielding disastrous results. While law and order has totally collapsed, terrorists freely attack any place with impunity. Despite taking enormous taxes, people are forced to arrange their own security while the government machinery serves the rulers alone.
Even after taking oath for the second time, Prime Minister Shehbaz Sharif has not learnt any lessons from his past mistakes as he continues to act like the “servant” of those who matter in the land, and keeps on promoting nepotism and cronyism. Once again, under his rule, many high-caliber officers are denied postings and promotions they deserve on merit or placed in surplus pool on flimsy grounds, while “loyalists,” though junior and incompetent, are enjoying lucrative posts and benefits. There seems no end to such brazen acts on the part of elites that keep on humming the mantra of democracy, but act in an authoritarian and irresponsible manner.
The militro-judicial-civil complex and their cronies will never be interested in creating an egalitarian Pakistan—as demonstrated repeatedly by them. The latest evidence was the mini-budget [Finance (Supplementary) Act, 2023], presented by Finance Minister Muhammad Ishaq Dar, who is now our 39th foreign minister. He did not impose a single tax on the rich and mighty to bridge the burgeoning fiscal deficit. On the contrary, indirect taxes were raised, further crushing the poor and overburdening fast-squeezing middle-class. The same pro-rich approach was adopted in federal budget for FY 2024-25, which not only imposes unbearable tax burden of the lower and middle class salaried persons, but is highly inflationary.
Mindless borrowing simultaneously from banks and foreign lenders continue to push the nation in darker abyss of ‘debt prison’— debt servicing alone is now the largest burden on the economy absorbing all taxes collected by Federal Board of Revenue (FBR) and even non-tax revenue — all happening due to ruthless spending to fund luxuries of the state oligarchy. This year’s fiscal deficit, projected in Budget 2024-25 is Rs. 8.5 trillion and debt servicing will consume Rs. 9,755 billion. In the budget 2023-24, prepared under the guidance of Ishaq Dar, allocation for debt servicing was Rs 7.3 trillion, but it ultimately overran to Rs. 8,160 billion.
The jubilation and merriment over a staff-level agreement with International Monetary Fund (IMF) on July 12, 2024 for 37-month Extended Fund Facility (EFF) program of about US$7 billion speaks volume of the moral bankruptcy of our ruling elites. What a pity that that they celebrate further indebtedness! Just three days before the 84th Pakistan Day, March 23, 2024, a press release of IMF confirming successful completion of SBA was treated as an advance gift—height of shameless behaviour!
The militro-judicial-civil complex and their cronies will never be interested in creating an egalitarian Pakistan.
The elites are, however, still happy as they enjoy unprecedented benefits and perquisites, free plots, foreign trips, free club facilities, just to mention a few, all funded by the poor taxpayers. On the other hand, there is no political will to provide free health and education to the ordinary people, what to speak of fulfilling other obligations mentioned in the Constitution.
Dr. Ishrat Husain, in his book, Pakistan: The Economy of an Elitist State, has aptly observed that in sharp contrast to the East Asian model of ‘shared growth’, based on rapid economic development, coupled with a rapid reduction in poverty and more equitable distribution of the benefits of development, in Pakistan, the elitist model confers political and economic powers to a small coterie of parasitic elites. While quoting Dr. Ishrat’s work, Dr. Khalil Ahmad, in his book, Pakistan Mein Riasti Ashrafiya Ka A’rooj (Rise of State Oligarchy in Pakistan), has also concluded: “Pakistan is presently owned and exploited by elites whereas it should belong to the people of Pakistan.”
Powerful state officials, in hand with the rich and mighty men in khaki and corrupt politicians, exploit the system for self-aggrandisement. For example, Federal Board of Revenue (FBR) through SROs (Statutory Regulator Orders) provides “legal” ways and means to society’s powerful sections to amass huge wealth—exemptions and concessions given to them by acts of Parliament are worth billions of rupees. It is worth mentioning that under Muhammad Ishaq Dar during 2013-17, FBR issued many favourable notifications, especially for the sugar and steel industry.
In 2012 when officers of Grade 19-22 were allowed compulsory monetized transport allowance, SRO 569(I)/2012 was issued on 26 May 2012, providing that government officials in Grade 20-22 would pay just 5% tax on this allowance. The powerful bureaucrats use official cars, get monetized allowance, and pay meagre tax. On the contrary, their counterparts in private sector pay tax on this perquisite at the normal rate! This injustice was highlighted in a previous column. With the new Chairman of FBR, Rashid Mahmood Langrial, personal choice and confidant of Prime Minister Shehbaz Sharif, it will be interesting to see whether he ends this discrimination or continues to enjoy it personally as well.
The problem of Pakistan is not a scarcity of resources, but a deep unwillingness in properly utilizing and managing their equitable distribution, absence of effective administrative and justice systems to check the propagation of socioeconomic injustice.
It is worth mentioning that in Finance Act 2013, the flying allowance of airline pilots was clubbed with their salary, but Ishaq Dar did not extend similar treatment to mighty bureaucrats for their transport allowance, showing how elites protect each other and professionals like pilots get raw deals just because they are not part of the state oligarchy.
The problem of Pakistan is not a scarcity of resources, but a deep unwillingness in properly utilizing and managing their equitable distribution, absence of effective administrative and justice systems to check the propagation of socioeconomic injustice. It has been repeatedly highlighted by different writers that without imposing any new tax or raising the rates of the existing ones, the total revenue collection at federal level alone can be Rs 20 trillion (Rs. 1,100 billion direct taxes and Rs. 900 billion indirect taxes) if existing tax gap is bridged.
This level of collection is possible but as a first step, we will have to reform our administrative machinery and judiciary. Expensive state property occupied by them as “residences” must be utilized commercially through long-term lease. Their benefits and perquisites should be monetized. Consolidated pay packages for state employees, fair and adequate, would reduce corruption, remove a strong sense of elitism and improve governance.
The brutal exploitation of the have-nots in the Islamic Republic of Pakistan and dehumanization of society are leading to gruesome incidents where people are committing suicides or killing innocents without any remorse and repentance.
For politicians and all state functionaries, an independent and effective accountability apparatus is necessary. Without fundamental structural reforms, we cannot establish a true democratic polity extend socioeconomic justice for all, ensure rapid growth with job opportunities for millions of young people, whose frustration is on the rise with every passing day as elites are showing apathy towards them while enjoying luxuries at the state’s expense.
The brutal exploitation of the have-nots in the Islamic Republic of Pakistan and dehumanization of society are leading to gruesome incidents where people are committing suicides or killing innocents without any remorse and repentance. We will have to move fast to reverse this trend and make Pakistan a true democratic republic for the people, not merely a fiefdom of the elites.
The time has come to commit to a firm resolve on the nation’s 77th Independence Day, and take definitive actions to implement in letter and spirit Article 3 of the Constitution which says: “The State shall ensure the elimination of all forms of exploitation and the gradual fulfillment of the fundamental principle, from each according to his ability to each according to his work.”