Ad hoc taxation
A SHORTFALL in the revenue target thus far in the fiscal year means a raft of new taxes is about to be introduced in order to ensure that the government will keep its fiscal deficit target for the year. This was decided during the ninth review of the ongoing IMF programme, and the Fund’s mission chief went on to add that these new revenue measures will be classed as “prior actions” to be implemented before the next review. This leaves the government with very little wiggle room, meaning the new taxes will have to be announced soon, and will therefore fall almost entirely on those already within the tax net. Industry representatives now wait with anxiety to discover who will be asked to bear the additional burden. The review overall has been successful, and as expected, the Fund will release the next tranche from the loan programme by December, following approval of the executive board. ‹ The Fund has been shown a revenue generation plan that the government intends to implement to ensure that the shortfall of Rs40bn in the collections target since July will be met by the time of the tenth review. Against this plan, Fund staff has approved the release of the next tranche for Pakistan. Now it is incumbent on the government to reveal what this plan is in all its detail. It is disappointing to witness this sort of ad hocism in the management of government accounts at this stage — by now, it ought to have been a part of our distant past. It hearkens back to the days of minibudgets in the 1990s.
For its part, the Fund owes us a clear and unapologetic explanation of where things have failed in the revenue effort of the government. In addition, since the talks in the ninth review were also part of an Article IV consultation, an annual exercise undertaken to draw up a detailed assessment of where things stand in the economy, a comprehensive explanation ought to be given for the repeated delays in the implementation of a few important structural reform measures, particularly those that are related to the power sector and privatisation. In the past, the Fund has been criticised for soft pedalling its pressure on the government to act on reforms that are vital to reinforcing the underlying sustainability. Whether or not the staff feels this criticism is warranted, they should be more mindful that their professional obligations to the citizenry of Pakistan, the ultimate stakeholders in the enterprise, trump all other considerations. And the citizenry has a right to know how this borrowed money is being utilised, and how much real progress is being made to ensure that the need to live on borrowed money is being reduced. We need a realistic appraisal of how the Fund’s resources, and the window of opportunity they have created, are being put to use.
Detainees abroad
WHEN Pakistani citizens encounter legal problems in foreign countries, it is the obligation of the state to provide the maximum possible assistance to them. Unfortunately, quite often foreign missions are found to be uninterested in the plight of Pakistanis who have had run-ins with the law overseas. In a similar vein, the reaction of federal Interior Minister Nisar Ali Khan to suspend a readmission accord for illegal immigrants with the European Union seems hasty and void of compassion. Chaudhry Nisar said on Friday that “we will not allow any planes carrying deportees” unless the latter’s details have been verified. It is fair to assume that caught between European states that do not want them and Pakistan that refuses to take them back, the migrants will remain in limbo. Suspending the accord is inadvisable; if Islamabad feels the agreement is not being implemented in its true spirit it must take up the issue with the EU and resolve the problem amicably. Kneejerk reactions will not help anyone, least of all the migrants. Looking at the broader picture, a proper and sustained policy is needed which can provide assistance to Pakistanis facing legal issues abroad. For example, the Lahore High Court has recently raised the issue of Pakistanis languishing in foreign jails, while members of the Senate have also been critical of diplomatic missions’ attitudes when dealing with citizens in distress. One figure says over 8,000 Pakistanis are imprisoned abroad; around half of these individuals are incarcerated in the Gulf states. Often in these countries, the legal system is opaque and labyrinthine, and without the help of Pakistani missions able to provide legal aid according to local laws, navigating it can be a nightmare. In fact, there have been reports of some individuals remaining incarcerated in foreign jails despite completing their sentences, as well as indications that women and minors have also been put in jail. Those familiar with the issue say some foreign governments don’t cooperate with Pakistani missions when it comes to giving them access to citizens in detention. In this case, the matter must be taken up at the highest levels as consular access and the provision of legal help are a fundamental right of every Pakistani. For starters, an accurate database of Pakistanis imprisoned or undergoing trial abroad must be formulated; this can help in the creation of an effective policy designed to offer assistance to Pakistanis dealing with foreign legal systems.
Farm politics
HIS opponents are not at all pleased by the sight of Prime Minister Nawaz Sharif distributing cheques among the farmers in Lodhran and Sialkot. And they appear to have got it right when they say that this generous gesture will result in the government gaining some valuable points at a time when polls in the two districts are approaching. The government knows this. The opposition is worried about it. The farmers are happy to get some much-deserved and long-awaited attention. What if it is the search for votes that has brought into focus the one who tills his heart out in the field — the farmer would rather cash in on the moment than sulk over how he has been neglected. Away in the cities, where dwellers matter more, many in the intelligentsia will happily declare that if the party in power was offering relief because of its fear of opposition politics, it is a sign that democracy is working. According to one view, far from taking issue with the package the PML-N was offering to the farmers, the PTI would have been better off claiming credit for forcing the government to address the woes of the agricultural sector. This is a valid argument that the PTI has applied to situations in the past and perhaps it is still using it as it attempts to woo the voters. Yet again, the discussion on when a government scheme can be called a blatant, opportunistic and unfair bid to garner votes is worth it at this juncture of the country’s democratic development. It suits the PTI which, apart from being a party very much interested in contesting power at all tiers, has been running a campaign to improve the electoral system in Pakistan. There is clearly a case for more stringent rules to ensure as fair a contest as possible at all levels. The case is strengthened by the Election Commission of Pakistan’s reservations regarding the launch of development schemes too close to a vote.
Published in Dawn, November 8th, 2015
http://www.dawn.com/newspaper/editorial