NOTE: This article includes suggestions about dealing in interest bearing instruments. Interest is Haram in Islam and the author abides by this Islamic teaching. Unfortunately, a discussion on the problems of Pakistan's interest based economy necessarily needs to include interest based solutions. The discussion on how to convert the economy to a non-interest one is out of the scope of this article, and beyond the capabilities of this author. More knowledgeable people and actual religious scholars are encouraged to inform everyone on this very important topic.
I have on many occasions criticized the Bajwa-Khan duopoly that has ensnared Pakistan within its heinous tentacles. I have maintained that this regime is taking Pakistan towards complete Western takeover and eventual secession into multiple independent countries. One important component of this heinous crime is financial subjugation of Pakistan. I feel the BKT (Bajwa-Khan Traitorship) has shown its true nature by perpetrating terrorist policies, and the time is now ripe to bare these policies in front of Pakistan.
First let us review the high level roadmap of BKT's malicious plan:
1. Circa April 2019 - Imran Khan accepts the existence of terrorists in Pakistan during visit to Iran, thus going against Gen Raheel's policy to deny the existence of terrorists within Pakistan.
https://www.dawn.com/news/1477837
2. Circa May 2019 - Influence China to stop blocking the declaration of Maulana Masood Azhar as a global terrorist.
https://www.thenews.com.pk/print/465278-un-to-declare-masood-azhar-a-global-terrorist-today
3. Circa June 2019 - Pakistan is put into the FATF gray list.
https://www.dawn.com/news/1418143
So far, everyone can understand the anti-Pakistan machinations of these traitors. In this article, we shall discuss at length the more obscure parts of this plan:
4. Circa June 2019 - Pakistan agrees to IMF conditions that go against its national interests. The relevant program can be accessed here:
https://www.imf.org/en/Publications...he-Extended-Fund-Facility-Press-Release-47092
5. Under the IMF program, a huge focus is given to increasing government revenue through tax collection. This has been a multi-year odyssey of the PTI government.
6. Under the IMF program, key financial positions are given to IMF agents. The Governor State Bank Raza Baqir, FBR Chairman Shabbar Zaidi, and Adviser later to be Finance Minister Hafeez Shaikh have all served in IMF or World Bank.
7. A superfluous strengthening of the Rupee is seen which is followed by a sudden drop.
8. A superfluous improvement in Current Account Deficit is seen which is followed by a sharp increase.
9. The agenda of privatizing key government entities is pushed.
10. No attention to flight/loss of capital in the name of 'exports'.
All the while, no one amongst Pakistan's intelligentsia and political elite has the motivation or capability to speak truthfully about the country's troubles and how to fix them. This gives a free hand to BKT to shamelessly tout their treason as economic growth and improvement.
In what follows, I will first explain the real problem being faced by Pakistan, and the actual solutions needed to fix them. It will be abundantly clear how BKT's policies amount to financial terrorism.
Dollars - Pakistan's biggest problem
Pakistan's biggest problem today is the dollar denominated debt that needs to be paid to the tune of approximately 10 billion dollars every year. Any sensible person would argue that Pakistan needs to generate dollars to pay back this debt. Instead, under IMF dictation, the sole focus is on revenue collection in Rupees. These need to be converted into dollars, thus weakening the rupee even further just by paying back debt. The practical outcome of this insidious policy is the strengthening of PKR when debt was temporarily suspended due to COVID. As soon as the COVID crises ended, the PKR lost that strength. This is exactly the IMF plan to keep a country forever indebted: by focusing on revenue collection in the vernacular currency, subjecting the country to exchange rate shocks when it is converted into dollars on the international market.
Instead of highlighting this fundamental problem and discussing solutions for it, BKT has built and controlled a false narrative around CAD (Current Account Deficit) and revenue generation.
So this is Pakistan's question to BKT terrorists: why are you forwarding IMF's agenda to keep Pakistan under ever increasing debt?
Earning dollars - The fix for Pakistan's problems
Let us discuss the means through which Government of Pakistan can earn dollars.
Holding US Treasuries
Economically powerful nations keep a part of their dollar reserves in the form of US Treasuries. Japan and China are two of the biggest holders of such bonds. The key benefit of holding T-Bills is that they are interest bearing. Instead of money sitting idle in the reserve, treasures generate more dollars, albeit the inflation adjusted outcome my still be negative. A sound economic policy must include treasuries within the reserve basket.
Investment through Sovereign Wealth Fund
The IMF supports the formation of 'Sovereign Wealth Fund' and has done a lot of work in the recent past to define acceptable practices around the management of such funds. This is one case where at least some Pakistanis have tried activism to raise awareness. Googling for 'Pakistan Sovereign Wealth Fund' brings up the page for an advocacy group that aims to free Pakistan from its current financial shackles. But under BKT leadership, no work has been done on this very important front.
The management of an SWF cannot be left simply in the hands of foreign managers. Pakistan needs professionals of highest caliber, who are also patriotic Pakistanis, to manage such a fund. But again, we find complete absence of policy and direction from BKT in creating the required human resource for this.
Careful investment by an SWF can be a powerful tool to earn dollars that can be used to pay off Pakistan's debts. The complete absence of Treasuries and SWF from BKT's economic plan shows either incompetence or subversion. In either case, this presents an extremely poor picture of BKT's three year tenure.
Government enterprises for exporting goods and services
This is a sordid chapter of BKT's reign. Imran Khan seems take an almost fetishistic interest in selling off PIA and Steel Mills. Thankfully, there is a PAF general heading PIA which has been the saving grace. Otherwise, Imran Khan's own minister has gone out of his way to ensure the demise of the national carrier:
Pakistan's aviation minister said a large number of pilots cheated in exams or have fake qualifications.
www.bbc.com
The saga of the licenses of Pakistani pilots was a direct attack on Pakistan's economic well-being. Most people have been fed the propaganda of state run enterprises being inefficient. Be that as it may, there is nothing to suggest that
state owned enterprises should also be inefficient. Unfortunately, in an environment of misgovernance, the past experiment with a German CEO has not borne any fruit. But this is misgovernance. PIA can earn valuable foreign exchange for the government if managed properly. And given its potential and the state of Pakistan's economy, this should have been one of the highest priority projects.
Similarly for Steel Mills. Export of high quality steel or finished products can become a big source of dollars, but again the enemies of Pakistan are making every single effort to make sure that dollar revenues are denied to Government of Pakistan.
The current crisis is the perfect case for creating government owned enterprises that lead to both domestic job creation and exports earnings. Why is no attention being paid to this important aspect? And why is BKT taking a completely 180 degrees approach?
Dollar denominated excise and customs
Yet another source of dollars can be duties and taxes on imports that are denominated in dollars. This author does not have the necessary data regarding dollarization of the tax regime, but had this been implemented properly, we would see a generous revenue stream.
A regime focused on destruction
The reader should now have a fairly good idea of what good economic management would look like. Which immediately shows BKT's economic management as not just disastrous, but outright anti-Pakistan. Let us now discuss another false narrative - rising exports.
It is true that Pakistani exports are doing much better than before. But what is not being discussed is the loss of revenue. This is how the export model of many Pakistani companies is structured. They have sister companies in Western countries that finalize business deals. These sister companies then proceed to buy goods and services at cost from their local operations and sell them at a profit. Pakistan only receives the cost in dollars whereas the real profit is kept overseas. This author is not aware of any studies into the size of this revenue loss, but just this component can easily run into billions of dollars.
Similarly, Foreign Direct Investment, or FDI is pushed as a silver bullet, especially by IMF. But FDI can be a double edged sword. Without proper government oversight, FDI can lead to dollar outflows. It is for this reason that well managed countries have mechanisms for deep government oversight. Take a look at how the Australian government reviews foreign investment:
Australia’s foreign investment review framework strikes a balance between facilitating investment and protecting Australia’s national interest.
treasury.gov.au
Conclusion
It should be abundantly clear to the reader that the Bajwa-Khan Traitorship has been installed by the enemies of Pakistan to further their agenda of economic and financial terrorism. Until and unless this nation learns to take its leaders to task and make them pay for their crimes, Pakistan will remain a joke in the eyes of the world. The common man will continue to suffer under exorbitant prices and lack of services. When will Pakistan wake up and rise?
