Recent floods in Pakistan are considered to be the worst natural disaster of modern history which has affected more than 20 million people in Pakistan, costing billions of dollars of losses and taking lives of thousands. Economic loss is estimated to be around 15 billion dollars by non-government sources but according to Prime Minister Gillani the loss is over 40 billion dollars.
People mainly affected by the floods belong to poor agricultural background. It will be a big but not impossible task to get them back on their feet.
Rescue and relief efforts are being done with major contribution from local and international charities. Government and its institutions again seem to be lagging behind the required pace of effort. Though the response by civil society is not as good and quick as it was in 2005 Earthquake but still despite economic turmoil and war against terrorism it is not that bad.
The situation is so severe that options to impose new flood taxes are being considered. This will not only result in making the current economic situation worse but it will also affect the charity efforts for flood relief. Also the given purpose of using the tax money for flood relief and re-building efforts will not be achieved due to corruption, mismanagement and lack of capacity in government institutions.
Already 15 percent GST, unjustified income tax burden on salary class, high energy prices and other surcharges have broken the back of middle and lower income classes of Pakistan, so the imposition of new taxes in the name of floods will further make life difficult for them. Government is also planning to impose VAT and other taxes to fulfill the requirements of IMF which will not only affect the lower and middle income classes but will also damage the business environment of Pakistan.
Business sector in Pakistan has already suffered a lot due to electricity crisis, war on terror and bureaucratic corruption and now these taxes will further the miseries of this sector. One such recent example reported in the media is the closing of operations by three leading software companies in Pakistan. Already textile and other manufacturing sectors are facing real tough time. This economic slowdown due to unnecessary taxes and duties will add to our troubles and if policies are made to let the business flourish then it can help in recovering from current crisis quickly.
The first thing government needs to do is to cut its expenses and first step is to reduce the size of federal and provincial cabinets. According to media reports, government allied parties have shown their willingness and agreement for reducing the size of cabinet. Government needs to set its priorities and see in what areas funds are being wasted and what areas don’t need funds at all.
There are many ministries with duplication of work and multiple office bearers in the form of federal minister, state minister and multiple secretaries. Most of these posts are awarded on political bases so the ratio of corruption and wastage of tax money is high in these departments. It is estimated that around 500-600 billion rupees per year gets wasted due to corruption and even if government is able to save 25-40 percent of this amount then government will not only be able to create fiscal space for itself but it can help in giving tax relief for common man.
We also need to revise defense budget and see where non-operational expenses are resulting in illicit expenditures. We also need to revise our security policy including our involvement in the so called war on terror as it has already damaged our economy and national integrity. With current flood situation we cannot afford the burden of this war.
Instead of putting new taxes on people who are already paying huge amount of taxes, government needs to look into areas where there are no taxes which mainly include agriculture. Here the problem is that most of our parliamentarians and politicians belong to feudal class who consider themselves above any law and obligations. It is now time for them to give their share in national interest. If proper land reforms are made and “Aushur” system is properly used then government can collect billions of rupees alone from the big land-lords who until now are only consuming the national resources and not giving back any. Also heavy fines and punishments are needed to be given to those who changed the natural flow of water to save their lands and damaged the lives and properties of poor people.
Also the spending by government needs to be transparent as it is already suffering from credibility crisis resulting in lack of foreign and local funding to the government. Politically motivated programs like Benazir Income Support Program are needed to be replaced by much meaningful transparent and non-politically motivated programs which will ensure trust on the government.
Other thing government should do is to let the private sector and charities do their work with freedom. Instead of banning people including religious groups from performing relief and re-building efforts they should focus on doing their job properly.
It will be acceptable or better if government plays the role of a facilitator and not a regulator in charity work. Accountability and Audit is necessary to ensure transparency but it should be done with fair intent by independent mechanism and not under any political motive.
We also need to see that people affected by the areas shouldn’t be made beggars and for that their man power needs to be utilized for re-building and rehabilitation process. They should also be assisted by private charities and government which is utilizing tax money for this purpose, to have a respectable earning by their hard work. This utilization of manpower backed by promoting equal economic opportunity for private sector organizations and individuals can help in making this disaster into an opportunity to speed up slowed economic activity.
Hard times come on nations and nations which rise above their petty greed and narrow minded approaches can overcome them to become great nations. Hard times have come on us and now this is the time to decide whether we are a great nation or just a selfish mob.