Army and many other such institutions responsible for Pakistan's economic mess
New Delhi, Sep 11: Will the austerity measures initiated by the newly-appointed Prime Minister of Pakistan Imran Khan help the country to deal with the economic crisis that it is in or they will just proved to be symbolic measures as the country needs at least $12 billion to deal with the economic mess. With the lack of steady economic growth of the country and failing to increase income of the country, there is no visible positive sign for the country.
Despite Imran Khan's tough stand on China Pakistan Economic Corridor (CPEC), China sanctioned $2 billion loan to Pakistan and $1 billion was remitted immediately but even $1 billion more will not serve the purpose. A strategic expert Ashish Shukla told One India that these austerity measure are not enough to settle the financial crisis of Pakistan. The country needs to expand its tax net base.
There are many institutions in Pakistan that don't pay tax. Shukla said Army in Pakistan is the biggest business institution that evades tax. It is the biggest business conglomerate that sells gas cylinder, cement, fertilizers and many more things. They have their business interest in every arena. They provide loan to civilians as Askari Bank in Pakistan is run by the Army. They are into real estate, automobiles, software and also running mobile company. Army is deep rooted into the business and economic activities of the country.
This is general nature where there is a dictatorship but the problem arises when they don't pay tax on some or other pretext. Moreover, besides not being in the tax net they are involved in heavy corruption. So reform in Pakistan is not possible due to these reasons.
"So if Pakistan goes to International Monetary Fund (IMF), they will have to officially accept its terms and condition. But unofficially they might not follow it. They need $10-15 billions and Imran Khan taking austerity measure like flying in economy class, not using PM residence, ministers too using economy class will not help," said the expert.
These measures will not help Pakistan to save $15 billion. There are not many transparent deal as China tries to avoid public scrutiny whether it is with Pakistan, Sri Lanka and Vietnam. China does not give grant but it gives loan only so Pakistan might get into trap of China.
"The problem with Pakistan is that it does not have much resources and whatever it has they are not being used properly that can help the country to generate more income. There are some big institutions that are getting bigger and richer but they are not helping the country to make its economy better. There are a select people who are running the economy of the country and not much of a difference has been made with the advent of Imran Khan at the helm," added Shukla.
But one thing is sure that Pakistan will not be allowed to be doomed as it is not in the interest of the world and even India. There is a need to understand that Pakistan is a nuclear state and if it fails its repercussion will spill over to India as well not in terms of economy but as a security concern. Moreover, Pakistan's strategic location will help countries to come forward to bailed it out and Pakistan knows it very well.