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July 6, 2020

An opportunity

Opinion

July 6, 2020

The current National Assembly and Senate sessions on the Finance Bill 2020-21 provide a rare chance to the flimsy democratic history of Pakistan and its top political leadership to manifest acumen not only to steer the ship away from the whirlwind but with collective wisdom turn the Covid-19 crisis into an opportunity and change the very nature of Pakistan’s nation-state.

The Covid-19 pandemic and similar other events marked remarkable changes in every aspect of human lives – the way societies, economics and politics were organized. Events like Covid shake up societies, national consciousness and force people to think beyond limits and find innovative solutions. The post-Covid world of course will look different at the global level. Will it bring any significant changes in Pakistan?

The question is whether the Pakistani leadership can turn this crisis into an opportunity and transform the very nature of the nation-state, its ideological basis, political system, economic and social priorities. Or will we wait for an even worse crisis than this to shake us up. Whatever the political differences, can the leadership come out of its personal grudges, expediencies, petty issues and put up a progressive vision. Time will tell, but here are a few submissions that may help in our thinking.

Certain policy actions have been promptly acted upon and are promising – such as: one-time cash transfer to vulnerable people who lost their jobs due to the lockdown and economic slowdown. Social protection – though new to Pakistan with less public resource allocation – has been a strong social policy adopted by many countries prior to the Covid-19 crisis to address poverty and disparity.

Similarly, a surge in health expenditure by all the provinces and the federal government is also a very progressive step. This is not a new idea; investing in public health – not leaving essential health services to the private sector – where most of the poor people benefit has been talked about for a few decades. But the current health crisis has pushed governments all around the world to invest more in public health and strengthen its capacity.

Despite fiscal constraints, the government of Pakistan’s step for strengthening the country's health by boosting investment and protecting vulnerable people is a commendable action and truly depicts the progressive vision of the country and much-needed action. These policy interventions have a great equalizing effect if continued as a key feature of social policy for a long period of time.

In addition to the social protection and investment in public health, the third best leveler is education. The current low level of investment in education, multiple curriculums, unequal and class-based education systems with disharmonized policy, unscientific and pathetic research base must change. Decades of negligence and segmentation of education where some costly and expensive private schools are fulfilling the needs of the rich, while the majority of the country’s children are left with underfunded public schools. Millions do not have access to basic schooling, creating inequality of opportunity with a massive future cost on society.

Now is an opportunity to augment the existing efforts and keep investing in public health and social protection for a longer period along with education to lay the solid foundation of human capabilities with irreversible skills, knowledge and competency so the country can gain from the long-term sustainable benefits of its abundant human resources.

How to sustain the increased level of expenditure in universal education, ramping up health facilities and social protection? There is no option to discontinue the progressive steps taken during the Covid-19 response. Reversal from these social policy objectives which are the bedrock of any progressive society will further widen the gap among different areas, people and groups and weaken the social cohesion necessary to achieve political and economic stability. With the current fiscal constraints, resources have to be generated through revamping the taxation system; debt is no option.

There are tested progressive taxation mechanisms to mobilize domestic revenue. Pakistan needs to introduce a one-off solidarity tax on excess profits for all companies and rich people. For the rich, a tax on accumulated wealth and capital will have minor effects but the funds gained by governments will go a long way to finance rescue and recovery plans. Reduction of taxes on incomes and essential products consumed by the poor will help increase virtual income and the ability to support themselves and their families to recover from the crisis.

Simultaneously shifting tax policy to obtain more revenue by taxing capital and wealth rather labour income. The government must immediately eliminate unfair and profit-based tax incentives to national and foreign companies which are not only a drain on essential revenue but which also distort the tax system to mobilize additional revenue. Pakistan must work with the global community to close loopholes in global taxation which allows companies to avoid and evade taxes. Lastly, implement a Financial Transaction Tax (FTT) for international transactions, a small tax on every financial transaction that could raise a lot of revenue and curb financial speculation.

It will be a miracle in Pakistan’s social policy if the federal and provincial governments keep increasing the level of investment in the health system – more hospitals, doctors, paramedical staff, medicines and diagnostics facilities along with strict regulation on private health providers to bring them within reasonable cost and ensure quality. More efforts might be needed to fix the education problem in the public sector with additional investment, training, strict monitoring and better curriculum but also break the monopoly of the few profiteering private school chains.

Listening to and responding to citizens' voices is critical so as to improve public performance. Expanding rather than closing avenues where citizens can raise their concerns without fear, engage in discussions, participate in public affairs etc are all steps that are critical for good governance.

A responsible citizenry, broad-minded state and a government that does not curb but welcomes all critical voices can provide a fearless space where fertilization of ideas and innovations can take place. Ideas have the power to shape nations and take us to prosperity; but don’t forget that ideas never sprout in fear and suffocation.

The writer is an Islamabad-based environmental and human rights activist.