We know that the economic indicators are very alarming, and Pakistan has grappled with extreme inflation. The country’s consumer price index rose to 13 percent—the highest in two years, according to the Pakistan Bureau of Statistics. The sensitive price index, which includes the prices of essential food items, was recorded at 15.1 percent. Are we heading towards bankruptcy?
There was a time I remember in 2004 when on the export of every 100 dollars we had an import for services and goods of around 130 dollars. which simply means that there was a deficit almost 30% but we had some remittances, some capital income and some debts we would borrow to offset the deficit then, but now for every export of 100 dollars our imports are around 230 dollars so in-short, the current account deficit of 25% has risen to 130% almost. This deficit can now neither be offset by the remittances nor can any other capital influence do wonders for us, it’s now a compulsion for us to seek debts.
The other day I was in a nearby supermarket to my home where I saw a separate section for cat and dog food in which you can even find a shampoo for your pet, just imagine we import all this stuff when almost one-third of the Pakistani children are malnourished but we are importing dog and Cat food and shampoo from the dollars we borrow from the lenders.
I think the first thing we should do as a nation is that we should ban on all unnecessary imports levying duties or increasing them will not work. Just simply ban all that. We don’t need food products. We don’t need apple import from New-Zeeland or some stupid chocolate import from Switzerland only the 5% of the population can afford such luxuries, the rest hardly get by with the three modest meals a day.
The second most important thing is that the 17% GST on industry is a big no for the betterment of our industrial sector. It has to be not more than 5% only this step can breed more industry in the country, and can catalyze employment and will help to increase exports to generate genuine surplus. However, these measures will cause revenue to drop how will we cover for it. For that we have to cut down on non-development spending by taking some serious steps.
For instance, we have around 42 divisions in the government in Islamabad such as National Harmony, National Regulation & National heritage etc. I fail to understand the use of all these, let’s take an example Pakistan post it has one director general and nine additional director generals I. When I am talking about the non-development spending, I can take in non-combat expenditure in defense budget as well, big chunk of defense budget goes into it. The same way we have a coast guard for some historical reason it is under army where as it is navy’s dominion instead of giving it to navy, we have created another agency named maritime security agency now there are two forces doing the same work. So, there’s a lot of room to lessen non-combat defense budget as well.
Why am I stressing so much on cutting spendings is because if I have more spending but my income doesn’t reconcile with it and there is no hope for the income to increase, I must cut my spending I have no choice! But unfortunately, we don’t focus much on decreasing the non-development expenditure. whenever we cut the budget, we slash development budget. In result we can’t build power houses, roads, schools or dispensaries but non-development budget never see decrease. They, in fact only increase. We have to sincerely adopt now to cut the non-development budget to avoid deficit because deficits can crash the economy which in fact, is already near to be collapsed and we are figuratively on the ventilator. The day we stop taking loans, we’ll go bankrupt.
No country can win wars only by singing patriotic songs for that you need tanks, warships, armored cars, and fighter planes and they all run on petrol and petrol is bought with dollars and dollars are earned via exports and exports are only possible with industrial development. Where there is no industry there is no exports thus no dollars. This results in our inability to buy petrol which means our war machines are useless in order to fight war both against our enemy on borders and against bankruptcy we have to have a strong economy first.
The writer is the Director of the editorial board at ‘The Dayspring’. He can be reached at [email protected]