Capital suggestion - Dr Farrukh Saleem - Sunday, February 13, 2011

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The Government of Pakistan (GOP) is relevant to no more than 17 lakh Pakistanis. It is as if the state does not exist for the other 17 crore. It is the 17 lakh that control most of Pakistan’s resources and thus dominate Pakistan’s political as well as economic life. For the other 17 crore, the governments in Islamabad, Peshawar, Lahore, Quetta or Karachi have little or no bearing.

For the 17 lakh, GOP becomes a source of physical comfort, pleasure and financial well being. For the other 17 crore, GOP can only be a source of distress, aggravation and annoyance. Public policy is to benefit the 17 lakh, while the 17 crore bear the full brunt of indirect taxation. Additional taxation becomes no more than theft rationalised while there is underinvestment in human capital as well as infrastructure.

The entire government apparatus is out to keep the 17 lakh from harm. The other 17 crore have neither physical nor economic security; you loose your job there’s no unemployment protection and in case your mother is sick the state could care less.

For the 17 lakh the GOP perpetuates cartels and monopolies – sugar cartel, cement cartel, banking cartel, private power cartel – to facilitate further concentration of wealth. For the other 17 crore, there’s RGST and all other forms of regressive taxes (regressive taxation is the form of taxation where the burden of taxes increases as one’s income decreases).

According to the Centre for Research on Poverty and Income Distribution, of the 17 crore Pakistanis some 63 percent, or 10 crore, are ‘transitory poor’ (those Pakistanis who live below the line of poverty most of the time). Of the 17 crore, 32 percent, or five crore, are ‘chronically poor’ (those Pakistanis who live in poverty for ever and their poverty is often inherited by their children). Imagine; 15 crore Pakistanis are either transitory or chronically poor.

On 25 March 2008, Makhdoom Syed Yousaf Raza Gillani took oath of office. That fateful day, tomatoes were selling for Rs28.50 per kilo, onions Rs16.25 per kilo and sugar Rs33 per kilo. Over the past 34 months, tomatoes have shot up by nearly 200 percent, onions 330 percent and sugar 150 percent. Imagine; purchasing power of 15 crore Pakistanis is down by at least 25 percent while the allocation for PM’s foreign tours is up to Rs33 lakh per day, every single day of the fiscal year. Is Pakistan now on its way to becoming the ‘half percent society’?

Tunisia was known as the ‘1 percent society’ where the ‘first family’ reportedly controlled 50 percent of national resources. Egypt was also known as the ‘1 percent society’ where the ‘first family’ has reportedly accumulated assets worth $40 billion. We now have two choices: seriously learn lessons from Egypt or do roundtables. Remember, in ‘doing roundtables men learn to do evil’.

The writer is a columnist based in Islamabad. Email:

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