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Wednesday July 24, 2024

Flawed perception

By News Desk
June 22, 2024
Flawed perception

This letter refers to the article ‘How to rein in fiscal deficits’ (Business, June 20, 2024) by Dr Muhammad Nadeem Sarwar. There is a basic flaw in the thinking of our economists and leaders. They always follow the textbook description of twin deficits and think our problems are due to a shortage of foreign exchange and taxes to meet our expenses. The solutions proposed are almost always increasing exports and taxes to reduce the deficits. In reality, our problems are not a shortage of foreign exchange, but our love for imported goods and services.

Similarly, fiscal deficits are not due to shortage of taxes, they are due to the squandering of the country’s resources on the perks and privileges of senior bureaucrats, political leaders and elected representatives. Withdrawing unnecessary perks and privileges and closing multiple duplicate departments would eliminate the fiscal deficit. Reorientation of expenditure towards basic health and education facilities will generate employment, increasing incomes and economic growth.

Abdul Majeed

Islamabad