Economic Solutions' Framework: Laying the Foundation for a Sustainable Economy
All economies and their performace is the refelction of politics.
Dollar dominance is the result of politics.
Yuan management and slow, controlled trading is result of politics. Japanese property boom and bust was result of politics. ASEAN 'miracle' boom/bust/boom...politics. Buying T-bills is result of political decision.
Euro is purely a political decision. Had no underlying economic need other than trans-atlantic decision making and tightly nitting mainland Europe into a political entity. Ask PIGS the price they are paying for this. Greece, let us not forget.
The point is all economies mean political expression i.e. political economy. Just have a look at resource rich countries and their political make-up and their related economic performace.
If we look at the Pak economic history... apart from mere 7-9 years period of 1960s... primarily Pak economy has been a rentnier economy living off loans and aid packages. This is evident at both macro and micro level. The industrial, banking and export sector has the same behaviour. Just enough investment to keep things going.
No business or tech innovation. Getting the money out of the country or creating foreign shell (trading) companies to either under or over invoice. In any case just looking at the conoutry, consciously or unconsciouly, as a colony. The elite has all its assets abroad. An estimated $200 to $300 Bln is total net capital or assets abroad. Not all of it belongs to politicos.
In other words, if only Paks can invest in Pak then no foreign investment is needed. BD export boom in textile is Pak investor driven. Malaysia another destination. Again not all of it criminal produce but rather escaped capital due to 20 years of WOT and Karachi Burning.
We could indulge deeper about money sent back form Overseas Paks... through
hundi... but the picture is there.
The Point!?: Pak is NOT a poor country.
What is a Developed Economy:
We can go into standard, known, features such as ease of doing business and all that jazz... however, let us focus on the quint essence of a developed or developing economy with solid foundations.
In essence a strong economy is a Giant Rules Engine with strong Exception Management System. Everything designed for Flow in the Process. Nothing else.
Without this there cann't be any innovation or business growth. Even in a communist political system of China one can easily find this fact.
A passing look at Pak's economy or general taxation system will show that the entire legislation is designed to retard economy activity. Or in other words a system designed to squeeze as much as possible from citizens and Pak State.
This in nutshell is the current Political Economy of Pakistan.
What Could be the Pak Political Economy?
Socialism? No!
Neo-liberal Capitalism? No!
Humanism? Yes
The very Idea of Pak was driven by a sense of this. To have a place where Paks could become Free Humans according to their unique Civilisational Heritage. Why else swim through ocean of blood?
Do the laws, regulations enable the advancement of Human Condition in Pak at the moment? Or do these enable the oppositie? Be it courts, civil services or daily life?
Except for 5 years under Ayyub Khan... Pak has been primarily a parlimentary system with British laws. These laws were designed to govern a Colony not a Free State. Yet Pak is still under the same laws. The entire legal framework is geared towards Control rather than progress.
This, however, is a separate discussion. Nevertheless, extremely relevant. But not now....
Creating a Humanist Economy:
With more than 50% living under the poverty line and 64% youth buldge redical steps need to be taken to Save The Social Fabric.
As an Artificial Intelligence dominated world is here... creating jobs for all these young population is a tremedous challenge.
Given the scope of this Framework I am forced to briefly highlight areas of focus and reform. Each element requires a Whitepaper in its own right.
1) Land Reforms:
Serfs living in Sindh or South Punjab are good to vote for Never Dying Bhutto but to elevate them from sub-human levels it is necessary that the landless farmers be given land from the Unionists who opposed the very Idea of Pak i.e. today's electables
2) Population Act:
A two child policy needs to be implemented under National Emergency Act. Easy said than done... but it must.
3) Education Act
A unified, standardised educational system from GB to Gawadar. In order to create ease of mobility in the job market later this is essential. Salaries of the teachers be the highest of any government employee. Only the best and highly educated should be hired through qualification exames. Only for 5 years. For renewal qualificaiton exame.
Free food and books. Any mismangement or theft means life in prison. You can forgive murders but not those who steal from educational instituitions. Compulsary education till 18 with focus on science, tech and paractial industrial skills. Urdu as medium. English as second.
4) Public Services Act
No more permanent government jobs. An AI based performance management system for all government employees. Except for Foreign Office.
Dismantle CSS. Direct hiring based on experience in business.
Create a country wide Rules Engine based on open source Enterprise Architecture spread across the country on Blockchain.
5) One Tax Act
Paks, poor ones, are criminally taxed through indirect taxes. On the other end corporate sector has the worlds highest tax ratio. This again is the reflection of rentnier mentality/system.
No sales or wealth tax.
A single Tax % for everyone living above the poverty line. This % has to be the same i.e. propotional to the income. If some earns a million he/she pays same % relative to income to someone who earns less. Justice in taxation.
Dismental tax office. Bring in AI solutions. Custom duties also be governed by unmanned systems. Pak State will have more revenues this way than any other schemes.
6) Agriculture Revolution
Per hectre yield of Pak farming lands is horribly low. This needs to become threefold at least. This is far easier way to reduce poverty than anything else.
The entire value chain related to Agri i.e. irrigation, machinery, fertilizers, storage, farm-to-market needs to be Pak made. Herein Value Addtion and Food processing/packaging is critical. Easily done. Just take out the parasites and redtape.
Biotechnology parks for Pak tech firms be established with 10 year tax break... provided there is complete tech transfer and skills development of Young Pak techies... Also essential that these have to be JVs only. No foreign firm be given this. Ban GMO except for cotton seeds.
Genetic Sciences and Tech centres of excellence and related business spin-off with subsidy and tax breaks for ten years.
7) Industrial Revolution
There is no luxury of time... from pure mannual labour intensive to high tech Pak must establish SEZs in all areas. Higher tax breaks for high tech. The key policy is to make Everything in Pak. Period.
Electronics, manufacturing and processing industries must be the focus in the first phase. Focus on transportation i.e. cars, buses, truck, high PK tractors etc. More competition the better. #BanSuzuki
8) IT Cities
There is a scope for at least four IT cities in Pakistan. Same as 7 policy should be to part of each step of the IT value chain. With Social Responsibility Act required of all IT companies to train young Paks through Skill Centres and Internships.
9) Banking Sector Reform
Pak banking sector is lazy. It has been fattening up by lending to government. Pak must allow competition by creating a Credit Issuing Agency.
Banking sector is owned by the same #CriminalEnterprise which own IPPs. Go figure!
10) Energy Act
IPPs be opened and tried under Economic Terrorism Act by special courts. Furthermore, renewable must form at least 50% of the energy mix. Dams. Dams and more dams.
Also, the need for Intelligent National Grid is critical. Nobody has paid any attention to transmission for last 30 years.
11) 10 New Cities
Firstly, Master Plan for Gwadar needs to be revisited with an eye on making it a second Karachi. Apart from this 10 small and medium seized cities needs to be planned using best practices available, in accordance to geography.
The cities must have a long term perspective to make them viable i.e miroc economically viable centres. Time to look at cities a different lens.
12) Free Karachi Act
Pass law to declare Karachi a Federal City or Second Capital of the State. Free Karachi from all political mafias.
Make Karachi go up. Must also be done for Lahore as well.
13) Tourism Yes, Disneyland No
There is no country like Pak. From GB to Gwadar... However, it is equally important that the 10000 years old Civilisation does everything possible to retain a distinct cultural and social hue.
The very distinct Pak Hospitality... the essence of Pak culture... is a Brand like no other. It is not just the landscape but the Pak People. It needs to be markted wisely.
Welcome to the Land of Dancing Horse
Welcome to the Oldest Living Cities
Welcome to the Oldest Civilisation
Paks are NOT whites... so trying to become would be useless. Then neither would be white nor Pak. Something which requires deep meditation!
14) Free Internet
With 5G coming this should enable in economic transformation. Fintech and Alibaba... can help women and young to have their goods /handicrafts sold worldwide.
Pak must also lauch statelites in this regard to provide free highspeed internet to all Paks.
15) Trains, trains and more trains
At the moment the entire train infrastructure is in shambles. Pak must plan for longterm and high speed trains... electric transmission. In this regard apart form track agreement... local manufacturing agreement with China needs to be signed.
Here blindly follow Chinese strategy.
16) China Model Yes, China Model No
China could do all those things because China is China. China doesn't have #DieselMullahs or ZAB or NS or #CriminalEnterprise
So following Chinese Model is not that easy. However, the elments of the Chinese Model can be implemented in Pak development.
A Thinktank of Sino-Pak Socio-Economists can become part of Sino-Pak Strategic Cooperation Framework.
17) MIC Pak & Co.
The expansion in Pak MIC and vertical integeration of private enterprises is needed. Not just lipservice. The export potential in product and services is huge and needs to become part of Military and Economic Diplomacy.
18) CPEC... to be a Road or a Bridge
CPEC can only deliver fruits for Paks if there is actualisation of SEZs, financial/trading centres and related services industry boom in Pak for China, MENA and Africa.
If Pak becomes just a road for China then the loss will be immense. Something to ponder.
And finally....
19) Financial System
At the moment Paks hold more gold privately than the State. Not bad for the people but bad for economy. RekoDig needs to be given protection under National Security Act. And all that gold must go straight to the State. PKR must have some underpinning of gold. It is miserably exposed.
#PetroPKR ??? Well it can be done but nobody has the guts to do it. Besides... too early in the game... so no flying horse just yet
Pak needs to plan today if and how it wants to escape the middle income trap...... the only solutions is spending equally on education as defence... perhaps double.
#2047PakAt100
@Reddington @zulu @Dubious @Khafee @niaz well gents, first attempt. Obviously, requires more detail in each facet. But then it becomes a book on Transformation!