On March 23, 1940, All India Muslim League in its annual session at Lahore passed the Lahore Resolution, which ultimately paved the way for a separate homeland for the Muslims of British India on August 14, 1947 after a long-drawn struggle against colonial rule. This memorable day and adoption of Pakistan’s first constitution is celebrated as ‘Pakistan Day’ every year.
The unprecedented sufferings of Pakistanis, especially the poor and less privileged, will continue unabated no matter how many Pakistan Days we celebrate, unless our society is restructured on the principles of equity, fairness and justice—the fundamental elements of the constitutional democracy enunciated in Article 3 of the 1973 Constitution of Islamic Republic.
Anarchy, terrorism, lawlessness, economic meltdown and chaos in today’s Pakistan is caused by the captivity of the state in the hands of 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 also fails to deliver for what it is being paid. The absentee landowners and industrialists amass more and more wealth by exploiting landless tillers and industrial workers, respectively.
The anti-people alliance of elites is the root cause of our many ills. Through cross marriages, the elites ‘look after’ each other well and manage to perpetuate control over state institutions and economic resources.
The unscrupulous traders create artificial hike in prices of essential items and thrive on the hard-earned incomes of the poor and the fixed-income classes. They even do not spare the hapless citizens during the holy month of Ramadan when prices go beyond the reach of even well-to-do middle-class families. Adding insult to the injury, the government imposes unbearable indirect taxes on the poor and extends benefits to the rich and the mighty. This is the dilemma of today’s Pakistan, where we are celebrating today 84th Pakistan Day commemorating the Lahore Resolution and adoption of country’s first constitution.
The anti-people alliance of elites is the root cause of our many ills. Through cross marriages, the elites ‘look after’ each other well 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. Officers having political clout are requisitioned by federal and provincial ministries. They either are relatives of ministers or are close to them.
Civil servants behave like gora sahibs, believing themselves to be more privileged than colonial masters, and serve the interests of their political masters, rather than people, even if law and regulations do not permit so. This has destroyed the entire structure of civil services, where ‘political connections’ is now the name of the game.
Polarization, favoritism and politicization within state institutions are showing their disastrous results. Law and order on the nation’s streets has totally collapsed and terrorists attack any place they want with impunity. The state, despite demanding the payment of enormous taxes, is asking people to arrange their own security while the government machinery is busy serving the rulers alone.
Shehbaz Sharif, even after taking oath of Prime Minister for the second time, has not learnt any lessons from his past mistakes. He continues to act like “servant” of those who matter in the land, and keeps on promoting nepotism and cronyism. Once again, under his rule, many high-clibre officers would be denied postings and promotions they deserve on merit, and the “loyalists”, though junior, are going to enjoy 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 elites will never be interested in creating an egalitarian Pakistan. This fact became obvious from the mini-budget, the Finance (Supplementary) Act, 2023 presented by the fourth-time Finance Minister, Ishaq Dar, now our 39th foreign minister, wherein not a single tax was levied on the rich and mighty to bridge the burgeoning fiscal deficit. On the contrary, indirect taxes raised, further crushing the poor and overburdening fast-diminishing middle-class.
Borrowings simultaneously from banks and foreign lenders continue to push the nation in the darker abyss of the ‘debt prison’—debt servicing alone is now the largest burden on the economy taking away all the taxes collected by Federal Board of Revenue and even non-tax collections. This year fiscal deficit will be around 9% of the GDP, while debt servicing alone might exceed Rs. 8.5 trillion. In the budget 2023-24, prepared under the guidance of Ishaq Dar, debt servicing allocation was Rs. 7.3 trillion.
The jubilation over the staff-level agreement on March 20, 2024 for release of last tranche of US$ 1.1 billion of 9-month US$3 billion Standby Arrangement (SBA) speaks volume of the moral bankruptcy of our ruling elites. They celebrate being in further indebtedness! Just three days before 84th Pakistan Day, the press release of the International Monetary Fund confirming successful completion of the SBA was treated as an advance gift—this is the height of shameless behavior.
The elites will never be interested in creating an egalitarian Pakistan. This fact became obvious from the mini-budget, the Finance (Supplementary) Act, 2023 presented by the fourth-time Finance Minister, Ishaq Dar, now our 39th foreign minister, wherein not a single tax was levied on the rich and mighty to bridge the burgeoning fiscal deficit.
The elites are, however, still happy as they are enjoying unprecedented benefits and perquisites, free plots, foreign trips, free club facilities, just to mention a few, all funded by 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 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 elite who behave like parasites. 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 hands with the rich and mighty exploit the system for self-aggrandisement. For example, the Federal Board of Revenue (FBR) through SROs (Statutory Regulator Orders) provides “legal” ways and means to the mighty sections of society 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 the control of Ishaq Dar, the FBR in the period from 2013-17 issued many favorable notifications for the benefit of those in power, especially for the sugar and steel industries.
In 2012, when officers of Grade 19-22 were allowed monetized transport allowance, SRO 569(I)/2012 was issued on 26 May 2012, which is still operative, 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.
In the Finance Act 2013, the flying allowance of PIA pilots was clubbed with their salary, but Ishaq Dar did not provide similar treatment for mighty bureaucrats for their transport allowance. This shows how elites protect each other and professionals like PIA pilots get a raw deal just because they are not part of the state oligarchy.
The problem of Pakistan is not a scarcity of resources, but unwillingness in their proper utilizing and managing their equitable distribution, absence of effective administrative and justice systems to check socio-economic injustice.
The state, despite demanding the payment of enormous taxes, is asking people to arrange their own security while the government machinery is busy serving the rulers alone.
It has been mentioned time and again by various 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. 1100 billion in direct taxes and Rs. 900 billion in indirect taxes, if the existing tax gap is bridged.
This level of collection is possible but as a first step, we will have to reform our state machinery. Expensive state property occupied by them as “residences” must be recouped and commercially utilised through long-term lease. Their benefits and perquisites should be monetized. Consolidated pay package for them, fair and adequate, would reduce corruption and remove a strong sense of elitism and improve governance.
For politicians and all state functionaries, an independent and effective accountability apparatus is the need of the hour. Without the fundamental structural reforms, we cannot establish a true democratic polity that extends socio-economic justice for all, rapid growth ensuring job opportunities for millions of young people, whose frustration is on the rise with every passing day as elites are showing apathy towards them and enjoying luxuries at the state’s expense.
Naked exploitation of the have-nots and dehumanization of society are leading to gruesome incidents where people are taking lives of the innocents without any remorse and repentance. We will have to move fast to reverse this trend and make Pakistan a republic for the people and not the elites alone.
The time has come to make a firm resolve on 84th Pakistan 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.”