Pakistan in 2023: optimism is hard to find

 

It's hard to be optimistic about Pakistan these days. The country's multiple crises are coming together to bring about a perfect storm. (I can't remember when the country was last in non-crisis mode?)

Credit: Unsplash - The Artist Studio

The two main political parties contending for power - Nawaz Sharif's (now Shehbaz Sharif's?) PML-N and Imran Khan's PTI - are playing a savage game of musical chairs in Islamabad and several provincial capitals. There is even less focus on governance than is usually the case.

And governance is what is required to pull Pakistan's economy back from the precipice. Ordinary Pakistanis are already struggling under the weight of 30 percent plus food price inflation (officially) pushing food insecurity to a level not seen in several decades. Moreover, electricity brownouts and gas shortages have expanded such that Islamabad seeks to implement policies to encourage reduced consumption (increasing suppy to keep pace with demand is much too difficult as it requires strategic planning). Foreign exchange is in such short supply that each day we receive news of more factories suspending production due to lack of imported raw materials. It's a mess even before one mentions the 'circular debt' plaguing the energy sector – which gets worse with each passing day.

All this while the security situation deteriorates alarmingly (let's talk some more with the Taliban?!). Afghanistan's Taliban government has reinvigorated, many would also say supported, the Tehreek-e-Taliban Pakistan (TTP) to carry out a series of high profile attacks especially in the western border province of Khyber Pakhtoonkhwa (KPK). These attacks have laid bare the state's claim that terrorism, particularly the TTP, had been defeated. No, the various groups were simply biding their time while regrouping. This time – and space - was provided to them by the recent attempt to negotiate. Releasing tens of militants from Pakistani jails by the authorities as a confidence building measure preceding the talks was simply icing on the cake.

Credit: Unsplash - Hassan Anwer

But wait, the bad news isn't finished yet. There's another open wound which has been festering for several decades and the infection looks to be spreading, i.e. the Baloch separatist movement. Despite the secular, republican nature of the Baloch insurgent movement there are whispers of collaboration between them and the revitalized religious extremists. The enemy of my enemy is my friend right?

Moreover, a nascent Sindhi nationalist movement has recently turned to violence - with the support of Baloch insurgents. Though it's a tentative, cautious shift at the moment, if a tight Sindhi-Baloch nationalist nexus is formed in future it spell more trouble (and violence) for Pakistan. Such violence, particularly if it emerges in Karachi, the country's commercial hub will further damage economic growth prospects. (Already business confidence within the city has been affected by a post-COVID resurgence in street crime.)

Unfortunately, most of these issues are systemic and cannot be wished away without sustained reform. (To be sure, having six, or was it seven, Finance Ministers in the last 4.5 years across two governments is not conducive to reform efforts!) Nonetheless, Pakistan has to start somewhere in order not to break more promises to its citizens.

Stay tuned (i.e.please follow!) for future posts in which I take a closer look at each of these subjects, including my suggestions for tackling these issues.

NB - I will be traveling to Pakistan in the next few weeks and will get a better understanding of ground realities following my visit.

Military coups just aren’t what they used to be!

In the good old days the military simply had to secure key sites like the radio, television broadcasters, airports, other transport hubs and newspaper offices. Once the sites were under control, then detain the ‘disputed’ head of government along with her key associates. Finally, put some helmeted soldiers decked out in combat gear on the streets of major cities, preferably with some tanks nearby for the ‘wow’ factor. The civil service and judiciary naturally fell into line by taking new oaths of loyalty or were simply fired from their roles. 

(Source: Pexels.com)

All of the above happened in darkness and in typically the space of a few hours between midnight and dawn. Depending on the size of the country a few thousand loyal soldiers were all that was required for a successful coup. If a more detailed playbook were required then ‘Coup D’Etat: a Practical Handbook’ by Edward Luttwak would serve the purpose.

No more. That was the last century. Like many similar handbooks, Luttwak’s book is obsolete. Things are different in the new millennium.

The first sign that something was amiss came in July 2016 with the failed coup attempt in Turkey.

Yes, Turkey. A country where the military is revered and coups are (were) a normal fact of life. Despite these two factors, the coup was neither able to dethrone President Erdogan nor install a military council to run affairs of state.

Today the world is witnessing the ongoing efforts by Myanmar’s military to unseat the civilian government of Aung San Suu Kyi. At the time of writing, it seems unclear if efforts by Min Aung Hlaing, the military commander leading the coup attempt, will succeed. The coup is certainly not ‘done and dusted’ the way it would have been in the past.

What has changed in the last two decades to make successful, naked military coups a rarity?

News Monopoly

Remember the days everyone read newspapers in the morning at breakfast? Then families gathered together in the evening to watch the news on national television. And only the news that was fit to print was printed. 

International newspapers often arrived a few days late and circulation was easy to control. There were no international television broadcasters. Even radio broadcasts by international politically motivated broadcasters such as Voice of America or Radio Free Europe had limited success in shaping opinions in target countries.

In other word, national governments’ had a monopoly on information. Even print publications of the ‘free’ press could be coerced by into reporting with a particular slant or just simply not reporting certain events. A low ranking officer posted at the office of the major newsprint companies and the national radio / television broadcasters was sufficient to manage news flow.

(Source: Pexels.com)

Along came social media and broke the information monopoly paradigm. Not only has information become virtually impossible to control but the proliferation of disinformation, often politically motivated, has also become routine. Moreover, international news broadcasters are regularly watched in living room televisions all around the world.

Consequently, managing negative news – or any news for that matter - associated with a military coup is impossible. No state maintains a monopoly on news anymore. This less controlled movement of information and the immediacy of many social media platforms also allow ordinary citizens to mobilize protest movements in a manner not possible in the past.

Global Superpower Rivalries

The Cold War between the US and its Soviet rival spawned many doctrines. All were expedient for their time but among the most relevant (and loved) doctrine for coup makers was the Kirkpatrick Doctrine. The doctrine was postulated by the former US Ambassador to the United Nations Jeane Kirkpatrick in a 1979 essay.

In her essay, Kirkpatrick made a distinction between Totalitarian and Authoritarian regimes. While totalitarian regimes try and control all aspects of a society and its citizens – including thought, authoritarian regimes try and control only certain behaviours. Additionally, authoritarian regimes are more amenable to gradual reform thus making them easier to move towards democratic norms. 

In essence, the doctrine was Cold War influenced intellectual justification for supporting authoritarian dictatorships from Argentina to the Philippines - as long as these rulers supported free enterprise (read permitted US businesses to operate freely) and sided with the US in its battle against Soviet inspired communism.

In practice, the Kirkpatrick Doctrine gave a blank check to coup makers to overthrow leftist regimes. Once in control, these same coup makers could expect continued support from the Free World until the ‘threat’ from communism was defeated. Support for such right wing authoritarian regimes was only withdrawn if / when the optics of maintaining domestic control became untenable.

Corporate Dollars and the Rise of Social Media

In a bygone era, large multinational corporations often acted as catalysts for coups. Whether it was a left leaning government that needed ‘course correction’ or a privileged monopolistic position in a market was under threat by government policy changes, corporations were in the thick of things – typically on the side of the coup instigators.

Note the origins of the term, Banana Republic, which stemmed from the installation of a military government via a coup in Honduras in the early 1900s. The coup was championed and funded by an American businessman and founder of a fruit company with significant economic interests in the Honduran fruit industry.

Things did not change because multinationals miraculously grew a conscience and stopped supporting dictatorial rulers. That was a slow process and relied largely on consumer pressure. It reached critical mass in the 1980s as campus activists pressured companies doing business in apartheid South Africa to divest their holdings.

Activists held that by doing business with a racist regime in apartheid South Africa, large corporations like Bank of America and General Motors, were helping to prop up the system. Initially, this led to the establishment of the Sullivan Principles, a voluntary code of business ethics devised by a Baptist Minister, for companies involved in South Africa. However, ultimately it forced businesses to rethink their presence in apartheid South Africa.

Over the last several decades, the trend of social activism has entered the mainstream with concepts like ESG – environmental, social and governance, becoming an essential part of the framework used to review and analyze corporations. With the rise of citizen journalism and social media it is virtually impossible for companies to cover up unethical practices, including openly supporting regime change in foreign countries. On the contrary, companies have found it almost essential to implement positive and transparent ESG policies to cater to rising social awareness among contemporary consumers.

(Source:Pexels.com)

The New Normal

The generals in Myanmar are finding out the hard way that coups are an anachronism of the last century. To be sure, the Thai military successfully executed a coup in 2014 under General Prayut likely because the coup was quickly legitimized by a much revered monarch, the late King Bhumibol. The late King’s actions must be considered as a major factor in the success of the 2014 coup. Arguably, Thailand is the exception that proves the rule.  

A new balance in civil-military relations has been precipitated by changing social conditions. While there is no clear rule for ‘new’ civil – military relationships the experience of Turkey, Thailand and Pakistan are illustrative.

In Turkey, the once all powerful Turkish military has had to swallow humble pie. From being able to change a government by issuing a memo, Coup by Memorandum, the Turkish military now plays a less powerful role under a powerful president. In Thailand, the military has so far resisted meaningful change. Though it is hard to predict how events will unfold in the coming years. In Pakistan, the military’s dominance remains a key part of the state power equation. Partly this is due to the military’s relationship with the current Prime Minister Imran Khan and partly because the military establishment has been careful in playing its hand. The possibility of the Pakistani military establishment overplaying its cards a la Myanmar must loom large with senior Pakistani generals.

As for Myanmar, only time will tell how the situation will play out. Even if the generals do survive intact until the next promised elections it is clear the military junta’s operational freedoms have already been circumscribed by domestic protests.

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Imran is a Singapore based Tour Guide with a special interest in arts and history. Imran has lived and worked in several countries during his past career as an international banker. He enjoys traveling, especially by train, as a way to feed his curiosity about the world and nurture his interest in photography. He is available on Instagram (@imranahmedsg); twitter (@grandmoofti) and can be contacted at imran.ahmed.sg@gmail.com.

Singapore's Achilles heel: foreign workers?

Singapore's foreign workforce has been in the news lately. It seems to happen every so often – generally for the wrong reasons.

The last time Singapore's foreign worker presence hit the headlines was in December 2013 with the infamous Little India Riot. (Yes, riots in Singapore and that too within the last decade!)

Today I would like to shed some light on Singapore's foreign worker presence and put forward some ideas for managing the situation in the coming years.

Let's start by putting the situation in context.

Modern Singapore's skyline (Photo: Wikipedia)

Size wise Singapore is about ten percent smaller than New York City at approx. 720 square kilometers versus NY's 780 sq. kms.

Singapore – though small in size – is an economic powerhouse. According to the recent estimates by the IMF, Singapore's GDP per capita on a Purchasing Power Parity (PPP) basis is equivalent to USD 105,700 which makes Singaporeans the third wealthiest people on earth.

In 2019, the World Bank also ranked Singapore at number three with a GDP per capital on a PPP basis of USD 101,500.

In case you are not aware, Purchasing Power Parity is a method which converts a country's local currency using "a theoretical exchange rate that allows you to buy the same amount of goods and services in every country." In other words, PPP allows one to measure and compare a citizen's ability to purchase goods and services across different countries using the same yardstick.

Because of its wealth Singapore has been a magnet for foreign labor – at least in during the last few decades. Consider the island's population.

In 2019, Singapore's population was 5.7 million with 1.7 million people or almost 30 percent being foreigners. By contrast, in 1990, Singapore's total population was three million of which 300,000 or ten percent were foreigners. By 2010, Singapore's total population was 5.1 million with a full one quarter or 1.3 million being foreign residents.

In other words, we've seen Singapore's population grow from 3.0 million (three million) with a ten percent foreign participation rate in 1990 to 5.7 million with a 30 percent foreign participation rate today.

It was in the 1990s that total population and foreigner numbers increased dramatically.

These are staggering numbers and come at a time when Singapore's own fertility rate has been falling from approx. 1.8 in 1990 to 1.14 in 2019. Only 35,300 babies were born in Singapore versus 49,800 in 1990. 

Singapore had more natural deaths than live births in 2019.

Singapore's subway system built with extensive participation of foreign workers (Photo: WIkipedia)

Unlike many other developed countries, Singapore's foreign worker population does not for the most part comprise of illegal immigrants. Foreign workers are tightly controlled by the government based on a complex quota system.

Singapore's system works well because employers of illegal workers face a fine of SGD 5,000 – SGD 30,000, or twelve months imprisonment, or both.

As at 2019, there were a total of 999,000 foreign workers on Work Permits in Singapore. Included in this one million number are 262,000 Foreign Domestic Workers or maids and 293,000 construction workers. Add in approximately 300,000 foreign professionals, management and other higher skilled foreign employees from the Employment and S-Pass permit categories and one gets a clearer picture.

Singapore has approximately 1.3 million foreign residents, including 300,000 foreign construction workers (Photo: Wikipedia)

Foreign workers are not only tightly controlled but also a healthy source of revenue for the government by means of an employment tax called the Foreign Workers Levy (FWL). 

For each foreigner employed in Singapore, employers must pay a Foreign Worker Levy. The amount of the levy varies depending on the skill level and category of the employee but generally ranges between SGD 300 – 700.

While it is not possible to obtain an exact revenue number for the FWL, Singapore's 2017 budget data stated SGD six billion (or USD 4.2 billion at present exchange rates) was raised under the following four heads: Foreign Workers Levy, Annual Tonnage Tax, Water Conservation Tax and (land) Development Surcharge.

Using only the figure of 293,000 construction workers one may guesstimate the amount raised (only for construction workers) to be in the range of SGD 1 – 2.5 billion (or USD 700 million – 1.8 billion); one billion if the levy was to be SGD 300 on each worker or SGD 2.5 billion if the levy was SGD 700 per worker.

Once levies from the other one million foreign workers are included it is safe to conclude the FWL is a nice source of income for the state – possibly SGD 3 billion or more annually (USD 2.1 billion).

By comparison, in the same year (2017) Singapore raised SGD 1.8 billion in liquor and tobacco taxes; SGD 2.7 billion in betting taxes from the local casinos; SGD 4.4 billion in property taxes; and 10.7 billion in personal income taxes.

Singapore's foreign workers are here voluntarily. Most will speak positively of their experiences in Singapore. Nonetheless, low skilled foreign workers are not paid generously.

Based on data collected in 2018 by a Singaporean NGO, Transient Workers Count Too (TWC2), the average monthly starting salary for a Bangladeshi or Indian foreign worker was SGD 400 – 465 (USD 282 – 328) versus the average Singapore monthly salary of SGD 3,100 (USD 2,200). To be sure, foreign workers are provided with basic accommodation and medical coverage by their local employers.

To be sure, one is not suggesting a cleaner be paid the same as bank manager. However, there are dangers to keeping the foreign worker community on the margins of Singapore's society – not marginalized but on the margins.

Presently, foreign workers are seen but not heard. They do but cannot say.

The quality of life of Singaporeans is dependent on the continued stable supply of cheap labor. As the Singapore Minister Minister for Home Affairs recently said, "They clean Singapore, they build our HDB flats ... they handle our waste management... they are helping us build our prosperity."

In other words, Singapore's wealth and competitive advantage are to some degree based on the availability of a steady and uninterrupted supply of cheap labor. For example, high quality public housing -  85 percent of Singaporeans live in owner occupied public housing – are not only constructed but also maintained on an ongoing basis by foreign workers.

Likewise, Singapore's world class public transport subway system is constructed by foreign workers. Additionally, some of those qualities which we tout as being intrinsic to Singapore's identity, e.g. clean public spaces and well maintained green spaces are in reality a result of foreign labor.

The dangers of dependency on foreign workers came to the fore in 2013 during the Little India riot and again during the present Covid-19 pandemic crisis.

Singapore's iconic structures such as the Marina Bay Sands rely heavily on foreign construction workers (Photo: Wikipedia)

During the present crisis, the authorities were so focused on maintaining the health of Singapore citizens and Permanent Residents that the almost one million foreigners on Work Passes were virtually overlooked.

It was a costly oversight which has affected the Singapore brand which prides itself on good governance and typically places the country on the top of most ranking lists. Additionally, it has set back the island's efforts to restart and normalize its economy by at least several weeks.

As an aside, by publicizing Singapore's one of Singapore's not normally talked about open secrets, its large foreign worker community, there is a feeling Singapore's dirty laundry is being aired in public!

Surely, Singapore has at least partly redeemed itself by ensuring there is sufficient testing available for all foreign workers. Additionally, the government has committed and continues to provide quality health care to all foreign workers in need, including world class Intensive Care health facilities all at taxpayer expense.

Singapore's dependence on foreign labor is at best an irritant and at worst a national security risk. Hence, there is ample reason to reduce the country's reliance on this demographic (dare one call labor a commodity?).

Innovation and adoption of new technologies are two ways forward; replacing human activity with robots and / or artificial intelligence makes a difference. For example, consider certain factory production lines where humans have been replaced with robots for many functions.

Simultaneously, Singapore must improve living conditions of foreign workers. Improving living conditions is a social responsibility. It cannot simply be left to the authorities by building new and better dormitories, etc. It requires a broad understanding by Singaporeans of the critical role foreign workers play in keeping the city-state functioning.

Implicit in this understanding is the need to more equitably compensate foreign workers. Surely, higher pay will necessitate a general increase in Singapore's price level as the cost of construction, waste disposal, cleaning, gardening, etc. (the list is long!) is directly linked to foreign workers wage levels. Pay more and Singaporeans must pick up the bill. No escaping that fact.

Singapore's treatment of foreign workers is a reflection of Singapore society and its people's values. Singapore must do better for its foreign worker community in the coming months and years. The country's excuses for not doing so are wearing thin.

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Imran is a Singapore based Tour Guide with a special interest in arts and history. Imran has lived and worked in several countries during his past career as an international banker. He enjoys traveling, especially by train, as a way to feed his curiosity about the world and nurture his interest in photography. He is available on Instagram (@imranahmedsg); twitter (@grandmoofti) and can be contacted at imran.ahmed.sg@gmail.com.

Corona Covid-19 pandemic: death knell for the post-war world order?

Once upon a time the world – or at least the Free World - was led by Reagan, Thatcher and Mitterand. Leaders with presence, standing and most important of all, respect. They were even respected by opponents.

British Prime Minister Thatcher, US President Reagan, French President Mitterrand and
West German Chancellor Schmidt at an international summit meeting (L to R)

During those times the US and its likeminded 'friends,' e.g. Britain and France, ran the world using a combination of bribery and force. They lorded over other lesser nations through a series of interlocking multilateral security arrangements and an economic institutional framework comprising of entities like the International Monetary Fund (IMF) and the World Bank.  

In a nutshell, that was the post World War Two world order.

But those were different times. The developed world had money and delivered on promises. Other countries believed them.

The US, as the undisputed leader of the 'Free World,' provided a security blanket for its satellite states. In return for ceding a part of their national sovereignty to the US, the US provided clear leadership, especially in times of crisis.  

That was the 1980s. Much has changed in the ensuing four decades.

The Berlin Wall - the symbolic Iron Curtain dividing the world's two Superpowers (the US and the Soviet Union) - came down in 1991. That same year the Union of Soviet Socialist Republics (USSR) morphed – nay collapsed – and became the Commonwealth of Independent States (CIS). (The CIS structure was a graceful way for the USSR to exit the Russian Empire's historic obligations and focus on saving Russia itself.)

Socialism all but died with the Soviet Union. Today all countries engage in private enterprise and global trade. Meanwhile Socialism has been discredited though significant parts of socialist philosophy have made their way into mainstream thought, e.g. public healthcare and social safety nets.

China's Belt and Road Initiative reflects China's aspirations as a global trading power

As for the global economy, the US is no longer the undisputed master. To be sure, the US Dollar remains king but its throne is a little shaky.

In the past it was said, "If the US sneezes then the world catches a cold." Today, if the US sneezes, the rest of the world simply says, "Bless You" and moves on. The risk of catching a cold is remote – at least not an intense life threatening cold resulting in mass unemployment.

In 2020 the communist party managed People's Republic of China (PRC) has the world's largest economy. Based on data released by the IMF, World Bank and the CIA, China's economy is significantly larger than its closest rival. Indeed, China's gross domestic product (GDP) surpasses the GDP of the combined European Union (EU) nations.

The deterioration in the US position has not been only in the economic domain.

Extraordinary leaders create and husband prestige. Prestige is an invisible halo which adds to the 'je ne sais quoi' aura of rulers. It is built up over decades but can be lost quickly. 

American prestige reached its peak during the first Iraq war with Operation Desert Storm in 1991 and Powell's 'Shock and Awe' tactics of overwhelming force. Since 1991 a series of events have diminished US global standing.

Militarily, the downtrend started with the 1993 failed US intervention in Somalia, Operation Restore Hope and the casualties suffered in the Battle of Mogadishu. Then came the 9/11 attack, which taking place on US domestic soil was a watershed moment. The subsequent War on Terror, especially the Iraq war and the present scramble to exit Afghanistan, did little to help stem the dissipation of US prestige.

Simultaneously a succession of other minor events, though not as individually significant as the 9/11 attack, cumulatively resulted in tarnishing America's sheen. These include the US federal government shutdown in 2018 – 2019 (35 days) and 1995 – 1996 (26 days) and the 2008 Global Financial Crisis.

Despite the signs of decay, many still placed the mantle of leadership squarely on the US and its small coterie of European friends. However, with recent events surrounding the Covid-19 pandemic it has become increasingly clear the US and its 'friends' no longer rule the roost.

In its management of the Covid-19 pandemic, the world has seen the US's dysfunctional soul. While state governors are at loggerheads with the federal government over steps to contain the crisis the US Covid-19 death toll and infection numbers rise uncontrollably. As of April 2, 2020 US deaths attributed to Covid-19 have surpassed China, the original epicentre of the virus.

Through an unending sea of social media content, the world has witnessed the complete disarray in the US (and most of Western Europe) caused by the pandemic. Most revealing are not the lack of resources available to these governments' in tackling the virus but more so the lack of national leadership and policy implementation through state bureaucracies.

The world is used to headlines decrying poor governance, weak infrastructure; limited resources, etc. Such news headlines are common across large swathes of the world. However, they are more normally reserved for parts of Africa or developing Asia than for the US or Europe.

The Covid-19 pandemic has hastened post war global structural changes. The US and Europe, though still powerful, are less relevant international players. 

Following a steady erosion of economic and military power the irreparable loss of reputational prestige due to the management of the Covid-19 pandemic, neither the US nor Europe are able to provide global leadership. For example, there will be no Group of Seven summit resulting in a Baker Plan or issuance of Brady Bonds to save the world's economy from the ravages of the Covid-19 catastrophe. It's every nation for herself.

Until further notice, the world suffers a leadership vacuum.

China may vie to fill the position but it's not ready yet - perhaps in a few decades. More likely, second tier regional powers like India, Russia and Turkey will temporarily fill the void in their respective neighborhoods until a more stable arrangement is reached. 

No matter what the coming new world order looks like, one fact is clear: Trump, Boris and Macron cannot fill the shoes of Reagan, Thatcher or Mitterrand.

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Imran is a Singapore based Tour Guide with a special interest in arts and history. Imran has lived and worked in several countries during his past career as an international banker. He enjoys traveling, especially by train, as a way to feed his curiosity about the world and nurture his interest in photography. He is available on Instagram (@imranahmedsg); twitter (@grandmoofti) and can be contacted at imran.ahmed.sg@gmail.com.

Occupied: Norwegian television series a review

Occupied is a Norwegian television series which tells the story of a series of political events leading to the Russian military occupation of Norway.

A Russian military occupation of Norway may sound unrealistic but the series plays out in such a manner that it's almost believable. After a few episodes it doesn't really matter as the plot fully draws in the viewer. The intricate plot blends love, political intrigue, action and European politics in a believable fashion.

The military intervention was all about Norway's enormous oil and gas reserves.

Yes, the geopolitics of oil and gas are intense. After all, wasn't the US intervention in Iraq all about oil? So why should one be so surprised something similar could happen in the heart of Europe with Russia as the antagonist?

Occupied is watchable despite the acting. At times, the acting leaves a lot to be desired. It is wooden with characters seeming to simply 'go through the motions.' The depth in characters is therefore missing.

Nonetheless, Occupied is a must watch for anyone interested in political thrillers. It builds a credible story based on plausible situations. The gaps in the plot are forgivable given the entertainment value of the series.

Note: At the the time of writing, two season of Occupied are available on Netflix in many jurisdiction.

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Imran is an adventurer, blogger, consultant, guide, photographer, speaker, traveler and a banker in his previous life. He is available on twitter (@grandmoofti); Instagram (@imranahmedsg) and can be contacted at imran.ahmed.sg@gmail.com.

PTI’s Khan panders to Islamists and Mr Chief Justice I can’t hear you now?

Imran Khan's Pakistan Tehrik-Insaf (PTI) government's recent collapse in facing down Islamist radicals over the appointment of Pakistani Princeton University economist - who happens to be Qadiani - to a government advisory panel, is shameful.

Even more shameful is that Imran Khan did not use even one iota of his considerable political capital to support Atif Mian. There was no public statement from King Khan himself, only official comments by his minions.

Source: Wikipedia

Is this the Naya Pakistan for which Pakistanis voted?

Apart from the fact that the government's behavior is illegal - Pakistan's Constitution is unambiguous on the subject – it sets a dangerous precedent for the State's future. 

PTI's surrender places in doubt Khan's ability to follow through with his ambitious reform program in the face of protest. Economic reform requires tough decisions and if the government is only capable or willing to implement populist policies then whence the reform?

The incident underscores  the recent disintegration of Imran Khan's principles at the altar of political expediency – following on from his decision to appoint 'lotas' (aka electables) in a hitherto principled political party.

Undoubtedly, we cannot bury the notion of Naya Pakistan until the PTI's five year term is complete. However, the PTI has not had an auspicious start and the omens don't look good, especially for women and non-Muslim minorities.

Before one gives up all hope, perhaps one can give a shout out to the otherwise activist 'Suo Moto' Chief Justice? Yes, we appreciate your efforts in building dams Mr Chief Justice but can we request you also focus on your day job and dutifully enforce Pakistan's Constitution in Atif Mian's case?

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[i] No citizen otherwise qualified for appointment in the service of Pakistan shall be discriminated against in respect of any such appointment on the ground only of race, religion, caste, sex, residence or place of birth. Pakistan Constitution, Article 27 (1)

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Imran is a former banker and  has lived and worked in several countries during his international banking career. He enjoys traveling, especially by train, as a way to feed his curiosity about the world and nurture his interest in photography. He is available on twitter (@grandmoofti); Instagram (@imranahmedsg) and can be contacted at imran.ahmed.sg@gmail.com

Note to Pakistan’s economic managers: reforming tax collection techniques

As the euphoria surrounding former cricket star Imran Khan’s election victory begins to fade in Pakistan, the country’s economic managers must deal with the hard tasks ahead. Immediately improving foreign currency reserves is simply a tactical necessity. The real challenges are strategic.

If Pakistan approaches the International Monetary Fund (IMF) for economic support – as is widely predicted by most analysts – then the IMF will remind Pakistan’s new Finance Minister of at least two priorities: increasing revenue and reducing expenses.

In order to achieve these two objectives there is a need to move away from the simple solution of imposing additional withholding taxes on an already excessively used taxation technique. To date, this method has only resulted in mixed success.

Presently, virtually any financial transaction in Pakistan’s organized sector, i.e. a documented transaction and not in cash, requires the collection of withholding tax. For example, registering a car or paying motor vehicle tax; registering a property; cash dividend payments made by listed corporations to individuals; and banking transactions such as preparing a bank draft all require collection / payment of a withholding tax. 

In theory, this tax payment is an advance tax and may be adjusted against future corporate or individual tax liabilities. In practice, few individual taxpayers make the effort to reduce their tax liability by the advance tax amount. For corporations, except maybe for top tier multinational and local institutions, increased bookkeeping coupled with a weak and often corrupt tax collection infrastructure reduce the incentive to claim advance tax. In other words, other than a few large corporations with sufficient resources to devote to copious bookkeeping, few businesses ever see the benefits of any ‘advance tax’ collected on their behalf.

Sure, it will be easy to continue and ‘widen’ Pakistan’s tax base by implementing additional presumptive tax on more transactions – or increasing percentages on existing advance tax payments - especially as these tax collections will likely be booked under the Direct Income Tax category and (falsely) boost the government’s claim of broadening the tax net.  Nevertheless, such taxes will only make Pakistan’s economy more inefficient by pushing up the cost of doing business, especially for Small and Medium Enterprises (SMEs), a backbone of the country’s economy.

Improving Pakistan’s tax collection infrastructure through reforming the operations of Federal Board of Revenue (FBR) is a prerequisite for success. It should be noted that reforming the FBR is a necessary though not sufficient condition for enhancing the country’s tax revenue.

One means of increasing FBR’s operational efficiencies is to reduce unnecessary human touch points. Corporate and individual tax payers should have as little interaction with humans as possible. Basic tax transactions must be simplified. More transactions should be shifted online. Online transactions reduce the possibility of corruption, improve speed and result in simplicity - an all round elegant solution.

To the naysayers who believe serious reform of the FBR is impossible only need look at the successes of NADRA and even the Election Commission. Both these government agencies have adopted new technologies and greatly simplified the lives of many Pakistanis as a result. Transactions which took weeks, months or even longer and were impossible without several unproductive visits to government departments are now routinely completed using a few clicks on a keyboard. Smart solutions are the way forward for the FBR.

Undoubtedly, increasing revenue and reducing expenses lie at the heart of any economic restructuring be it national, corporate or individual. Unfortunately, converting these two principles into effective policy decisions is a complicated process fraught with political minefields. Nonetheless, Imran Khan’s Justice Party (PTI) has a real opportunity to lay the foundation for genuine reform.

In my next post, I will discuss the necessity of approaching the ‘Filer’ and ‘Non-Filer’ distinction with greater finesse. ‘Non-Filers’ are not synonymous with tax evaders. Hence, throwing all ‘Non-Filers’ into a ‘penalize by paying more tax’ bucket is an unfair use of state powers. The policy must be improved to make it more equitable. Stay tuned.

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Imran is a Singapore based Tour Guide with a special interest in arts and history. Imran has lived and worked in several countries during his past career as an international banker. He enjoys traveling, especially by train, as a way to feed his curiosity about the world and nurture his interest in photography. He is available on twitter (@grandmoofti); Instagram (@imranahmedsg) and can be contacted at imran.ahmed.sg@gmail.com