The unimaginable has happened. Ishaq Dar, the architect of clumsy choices at Pakistan’s finance ministry, has finally been replaced by a new finance minister.
But the removal of Dar who triggered visible strains in ties with the IMF, marks just half a new beginning. To date, the former finance minister repeatedly survived, thanks to his relationship with former prime minister Nawaz Sharif rather than his ability. He publicly made bizarre proclamations such as predicting an impressive rise of the rupee against the US dollar, during a flat economy.
“I know how to deal with the IMF” was Dar’s bravado-laden line that continues to resonate with critics. Obviously, he was off the mark by a wide margin.
In this new era of Pakistan’s economic direction led by the visibly enterprising finance minister, Muhammad Aurangzeb, the country continues to face deeply troubling choices, creating the need for hard and unprecedented action.
For the moment, Pakistan remains proverbially in shackles as it steers the economy through a low growth outlook for the foreseeable future. And, while Prime Minister Shehbaz Sharif has promised to swiftly widen Pakistan’s narrow tax base, the jury is still out on the eventual fate of his words.
For far too long has Pakistan repeatedly tightened the screws on its mainstream population to win favour with the IMF and meet a series of conditions. For far too long has the axe also fallen almost alike across the board on rich, middle-income and poverty-stricken consumers. In recent times, the staggering increase in the cost of fuel, electricity and gas alongside unbridled inflation together became backbreakers for all consumers, notably the poor.
In meeting new IMF conditions, Sharif runs the risk yet again of overseeing a series of ‘indirect’ measures to tax all alike, rather than to finally slap taxes upon those who either remain practically exempt from being taxed or pay far less than their dues.
Tragically too, Pakistan’s ruling order is well stacked with representatives directly or indirectly tied to the country’s criminal tax dodgers.
The case of the sugar barons akin to a mafia highlighted some years ago under former prime minister Imran Khan’s rule eventually became confined to the dustbins of history. It remains a glaring example of the high and mighty remaining beyond the grip of the law.
Some in that sorry tale remain influential enough to dominate the Shehbaz-Sharif-led ruling order. Pakistan’s sorry historic journey is rife with many other examples of the mighty and the rich taking the country repeatedly for a ride.
It is hardly surprising that Pakistan has eventually been left with a minute community of less than two per cent of the population who count as tax filers. And those who pay their taxes worth recognition are even a smaller number.
Going forward, Pakistan must squarely focus on forcing its privileged to pay their taxes in full. The solution to the country’s many ills including economic ones lies in enforcing the long-ignored rule of law, so central to the running of any reasonably functioning state.
Unless such enforcement is applied across the board irrespective of the clout of those targeted, the country’s fate will tragically remain more of the same. Ahead of this uphill future journey, this month’s announcement of Sharif and his cabinet members and President Zardari voluntarily abandoning their salaries was nothing more than mere lip service.
Such symbolism may have impressed mainstream Pakistanis a decade or two ago. But given the scale of the present-day economic crisis, it is virtually unimpressive.
As Pakistanis struggle in their daily lives, the case for revitalizing the agricultural sector has never been more compelling than today. The alarming rise in the cost of food items in recent years has fueled overall inflation in Pakistan, creating the worst economic nightmare for mainstream households in the nation’s history.
Finance Minister Aurangzeb in his previous job as president of Habib Bank oversaw a robust plan to extend credit to small farmers. In return, Habib Bank witnessed poverty-stricken rural peasants deliver sizable jumps in the production of their crops. For him, the challenge is now to replicate that outcome to the length and breadth of Pakistan, reaping similar outcomes.
Meanwhile, former minister Dar remains visibly obsessed with at least part of his previous job. As foreign minister, he recently presided over a high-profile gathering to plan the privatization of Pakistan’s airports at Islamabad, Lahore and Karachi -- an event removed from his new mandate even by a large stretch.
One can also be sceptical regarding the foreign ministry tasks, given the BBC HardTalk interview in 2020.
The writer is an Islamabad-based journalist who writes on political and economic affairs. He can be reached at: farhanbokharigmail.com