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Epilogue

For several years, the people and govt of Pakistan are living at two opposite horns of an economic dilemma. While the people are groaning under the heavy burden of taxes, mostly paid indirectly in the form of sales tax, excise tax, developmental surcharge and above all, by way of graft and corruption, the govt and CBR keep bemoaning that in Pakistan nobody pays taxes. Both are right because only a fraction of the amount paid by the people reaches the govt coffers.

Like development, corruption trickles down and bubbles up, and Pakistan excels in corruption at the top and the grassroots, in public sector and private, in corporations big and small. The federal govt in Pakistan employs 950,000 people, four provincial govts 1.8 million, Sindh alone is believed to have ten percent ghost employees. Army was helping the Punjab govt in identifying ghost schools in the province.

WAPDA is Pakistan's biggest employer, Pakistan Railways second biggest, CBR is at number three. They have same ranking on the scale of corruption.

Ministry of Petroleum and Natural Resources award contracts worth dollars one billion per annum for import of crude and petroleum products and is responsible for the utilization of development surcharge worth Rs 30-35 billion collected on petroleum products and natural gas. It was no coincidence that the largest cases of corruption found by the caretaker govt of Meraj Khalid related to the Ministry of Petroleum and Natural Resources.

The increasing number of fraud cases in rebates and duty drawbacks amounting to Rs 20 billion per annum and large-scale smuggling of goods through the custom check posts at Torkam, Susst, Wagah and Tuftan only give a measure of the graft that greases the palm of the people in CBR and its subordinate departments.

There are literally thousands of exemptions incorporated in the system for the rich and the privileged. There are 180 exemptions from payment of income tax alone. The exemption to capital gain first announced in 1975 has been extended five times and will now expire in 2002. Tax holiday for industry was first announced for a period of 2 years in 1959 and is now available in 49 industrial estates.

Both Benazir and Nawaz Sharif championed transparency in privatization and at least 90 industrial units and several financial institutions have been privatized. Starting with Muslim Commercial Bank, the first unit to be privatized till Kot Addu Power privatized by Bhutto at the fag end of her govt, there are very few units whose privatization is scandal-free. Yet privatization continues to be the Achilles heel of the present govt's economic policies.

While the ordinary tax payer is required, or was required till recently to disclose the amount he was spending on education of his children, electricity, telephone, there is no law requiring the super-rich to reveal how many textile mills, sugar mills, industrial units they own. In 1970 Pakistan had 22 families. There number seems to have increased to 220 or 2200 but only 50-60 of them are identifiable. Nameless, faceless billionaires in Pakistan have made fortune in drugs (1.5 million dollars per annum, according to a United Nations International Drug Control Programme Report in 1992), smuggling (1.5 billion dollars through Afghanistan and India alone), graft, kickbacks and commissions (Rs 40-50 billion according to Dr Mahboob ul Haq). These billionaires include businessmen and industrialists, corrupt politicians, ever-corrupt and over-promoted bureaucrats, retired generals and their offsprings.

How Herculean is the task to reform the state apparatus comprising nearly a thousand state entities employing 2.7 million people can be illusterated by a simple exemple.

Benazir Bhutto so accustomed to inaugurating bridges over rivers and roads, after performing one such ceremony inquired about the manner in which toll was levied over traffic passing over the new bridge. She did not receive a satisfactory answer and therefore decided to set up a committee head by Deputy Chairman Planning Commission Kazi Aleem Ullah to examine how toll should be levied on bridges and roads in Pakistan.

That a political government did not know how to levy toll on bridges and highways was the height of incompetence and Planning Commission needed to set up a committee to examine the issue was the height of intellectual dishonesty. To add salt to injury, the committee that was constituted to study the issue was nothing but "brotherhood of thieves" , comprising same people and organizations that were benefitting from the lawlessness in the collection of toll-tax. Not a single meeting of the committee was held and the business is as usual.

For three months, I unsuccessfully tried to find out from the National Highway Authority how and who impose toll on bridges and highways in Pakistan. It was only through my own rudimentary methods that I found out that there was no uniform or laid down rules about who and how toll was collected. Presently, toll on 25-30 bridges was being collected by the National Highway Authority, provincial govts and local bodies. A very big portion of the toll line the pockets of the contractors and those who award the contract.

One wonders how a government that can not efficiently perform a task as simple as collecting toll and octroi can reform a system that is corrupted to the last core and up to the hilt?
 
 

Robber Barons of Pakistan

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Money and Politics