The country has to import every little thing to meet its basic need, including cooking oil, while in terms of export, it only has some raw materials. The local production Industry is limited to raw materials alone. On top of that, this sector is heavily subsidized, as well as subject to over-invoicing of imports and under-invoicing of exports. This is the reason why the trade deficit continues to increase, and this year it has already reached a whopping USD 50 billion. Pakistan is the only agricultural country in the world which also imports wheat, onions and tomatoes.
The country survives on the money it receives through loans and aid. Every year, loans are taken from international financial institutions to meet trade payments and fulfill foreign exchange needs, and then more loans are taken to repay these loans and the interest on them. Over time, these external debts have reached 117 billion dollars, which is more than one-third of the total national income. Additionally, more financial aid is taken from America, Britain and Saudi Arabia under various pretexts.
More than 80 percent of small and medium businesses and property owners of the country are not registered in the tax net. The country levies indirect taxes on businesses instead of taxing people based on their income or wealth. In other words, both an elephant and a cat bear the same burden business taxes. The aim is to reduce the tax burden on the elite, while the poor is killed during the process.
Pakistan spend twice the amount of its revenue and income on its own government expenditure. While its budget deficit reaches 50%, the perks received by government ministers, advisers, bureaucrats, judges, generals, military and government officials amount to a sum larger than the amount set aside for the health, education and development needs of its 22 crore people. Billions of losses are incurred by the steel mills, PIA and railways, but it is considered a sin to privatize these institutions. One should not forget, that Pakistan's budget deficit for the current year is PKR 6 trillion (USD 25 Billion).
In terms of population growth rate, Pakistan ranks third in the world. On the other hand, it also features very high in the list of the poorest countries in the world in terms of per capita income. The daily income of a common man is not enough for him to feed himself and his children. The burden on the already limited resources and income is increasing on yearly basis, but no one seems to be concerned about this problem.
The army of Pakistan is running different of big business in the name of welfare institutions. It controls sixty percent of the economy, yet under the presence of being Welfare institutions, these organizations are exempted from all federal taxes and income tax. Despite all this, the Pakistan Armed Forces walk away with one third of the country's annual budget in the name of defense and employee pensions.
Ease of business for an ordinary citizen is non existent. Despite wanting to invest their own capital to run an entrepreneurship, set up a factory, become a service provider or an exporter with a view to bringing foreign exchange, these well meaning citizens face a large number of bureaucratic hurdles and pay bribes to multiple people. Despite being the investors, they have to face this humiliating procedure which may run over months or even years. On the other hand, the Army gets all the business license permits effortlessly, within a matter of days, without paying bribes, and without visiting government offices.
Pakistan Army has the unique position in the world where it is heavily involved in Real Estate business. Not only this, the institute takes land for their project fee of cost from the government, then builds and manages housing societies on this land. Pakistan is the only country in the world where the real estate sector is monopolized by the army. The overseas Pakistanis prefer to invest in property rather than in industry or business. Most of this investment is done in military-run housing societies. This is why businesses and trades here are going bankrupt, common citizen are going bankrupt, the country's economy is sinking, but the property market is on the incline.
In Pakistan, it is very easy to run illicit activities like drug trades, smuggling, theft, looting, kidnapping for ransom or land grabbing. But forming an NGO to work in the fields of science and technology, education, human resource management or public welfare requires clearance at multiple levels from military agencies, which seldom works out as the under the table transactions fall through.
Pakistan is one of those few countries, where the Ministry of Finance has the authority to print currency through the central bank. Currency can be printed freely for any government project. The Ministry is also eligible to print treasury bills of any amount and they can take loans against these. This is the reason why the circular debt has reached eighty percent of the total volume of the national economy.
The world's most unique economy exists in Pakistan, where bankers are declared as technocrats, and then appointed as finance ministers. In reality, these people have no contact with the business market and, at the best they can do is run economic affairs of the country just like they would run a bank. This is a place where there exists an organization called Economic Coordination Committee, but there is a serious lack of communication between the Ministry of Finance and the Ministry of Commerce. In other words, there is no parity between the economic policy and the business market. The business market is running in the form of a shadow economy, which has nothing to do with the national economy.
The above economic cases and figures clearly point to the fact, that the Pakistani economy is devoid of the laws and principles of economics taught in universities or applied in developed countries. Rather, after what has happened to this country in the last four years, the Pakistani economy has been deprived of all principles of finance and economics as well as Chemistry, Biology, Physics and Mathematics.
DISCLAIMER: The author is solely responsible for the views expressed in this article. The author carries the responsibility for citing and/or licensing of images utilized within the text.