Profiting from pandemic

LAHORE: With the country’s economy crumbling under the crushing impacts of coronavirus pandemic, the businessmen, who are not even ready to assist the state with crumbs are asking the government to give them the whole cookie box.

More or less, almost every businessman, demanding relief from the government, is sitting on huge assets that can be mortgaged to banks for payment of salaries.

The behavior of the business class looks disgusting when we see the poor, lower middle and middle class liquidating all their assets to sail through the present emergency. And they have limited assets, which the poor have already exhausted in three weeks of lockdown. The lower middle class would be on roads within next three weeks, while the middle class would survive probably to see off the crisis. But this middleclass comprising engineers, architects, doctors, professors, and other white-collar workers are not asking for alms. Nor do they accept any food ration offered to them. They are bearing the trouble with dignity and self-respect. Most of them have sent off their housemaids and servants but are paying them the way they used to in normal times.

Most of the businesses in Pakistan have flourished over time. Their wealth has on average increased by thousand times in last three decades. It is true that some of them have accumulated this wealth legally through hard work and dedication. Then there are others that managed to amass wealth by all means, legal or otherwise.

Whatever the case these businesses besides business assets have assets in real estate, gold or other valuables. Some of them live in the city centers but have huge farmhouses in the outskirts. Some have summer villas in different hill stations. And these include numerous shopkeepers as well.

After the lockdown their businesses have come to a standstill, but they have to bear the monthly recurring expenses. The largest expense in this regard is the salary of the employees. Some have reserves with them but are not prepared to touch them for salaries. Some have no cash available to bear recurring expenses.

They can easily mortgage their real estate or dispose of some ornaments (they have plenty) to sail through the crisis and pay their employees. But they do not have the heart to do so. They see the pandemic as an opportunity to demand concessions from the state.

They are asking for deferment of utility bills or even waiver if possible. They want the condition of CNIC on business transactions waived. Many import consignments are lying on the ports as the importers are not providing their CNICs.

They hope they would be able to pressurise the government to withdraw this condition. As far as shopkeepers are concerned let us look at over one-month shutters down strike they observed during the Musharraf era at the start of this century. None of them lamented that because of over four weeks of shutter down they are in bad shape. In fact, they celebrated the opening of shops when their demands to stop documenting their businesses was accepted. But this time around even three weeks of lockdown has become unbearable for them.

The Federation of Pakistan Chamber of Commerce and Industry is demanding a relief package similar to the one provided by the government of Bangladesh to its businesses. The Bangladeshi government’s $8 billion stimulus package, about 2.5 percent of the country’s gross domestic product (GDP), primarily focuses on industries, particularly export-oriented ones. In doing so, the package, intended to contain and mitigate the economic fallout of novel coronavirus (COVID-19) left out the most vulnerable sections of the society and the sectors which desperately need support.

The package announced by the Pakistani government is also basically tilted towards businesses. One Rs144 billion or less than $1 billion are for distribution among poorest of the poor (not for the workers that are rendered now by the businessmen). The package is not all. They have been given tax amnesty on any amount they invest in construction sector. We will see that hundreds of billions of ill-gotten rupees would be whitened through this process.

The same businessmen that are crying hoarse that they do not have any finances would be availing this opportunity. They do not want to donate to any government fund from the piles of same black money they would be investing in construction. These donations are also tax-free, and no questions are asked. Alternately they could release the salaries of their employees out of book and trusting them that they would not claim the same when things return to normal. Businessmen are hypocrites they want government bailout on the pretext of paying salaries while having billion hidden in their illegal assets and accounts.