How to Rescue Pakistan?

Paying for Pakistan By Mohsin Hamid
Dawn, 07 May, 2010

Here’s the great secret about Pakistan: we aren’t as poor as we like to think. Over the years I’ve travelled a fair bit around our country. I’ve ridden on the back of a motorbike in Gwadar, walked down streets in Karachi, explored bazaars in Peshawar.

I’ve hiked in Skardu, fished (unsuccessfully) in Naran, sat down to a meal in a village outside Multan. I’m no expert, but I believe what my eyes tell me. And there’s no doubt about it: times are incredibly tough.

For most Pakistanis, meat is a luxury. Drinking water is contaminated with urine, faeces or industrial chemicals. School is a building that exists only on paper or otherwise employs a teacher who is barely literate. Electricity is so intermittent as to be almost a force of nature, like rain or a breeze.

The budget says our government plans to raise in taxes about Rs1.5tr this year. There are some 170 million people in our country. So that comes to roughly Rs9,000 each per year. Which is a little over Rs700 for each of us every month.

That isn’t much. Yes, we get money from other sources. We borrow, and sell off state assets, and ask for aid from anyone willing to give it to us. But still, what we can raise ourselves in taxes accounts for most of what our government can spend. And when you’re looking at getting enough power plants and teacher training and low-income support and (since we seem intent on buying them) F-16s for the world’s sixth most populous country, the equivalent of a large Pizza Hut pizza in taxes for each of us every month doesn’t go very far.
Why isn’t Pakistan delivering what we hope for? Because of dictatorships, or India, or the Americans? Well, maybe. But these days a large part of the reason is this: we citizens aren’t paying enough for Pakistan to flourish.

On my travels around our country I haven’t just seen malnourished children and exhausted farmers and hardworking 40-year-old women who look like they’re 80. I’ve also seen huge ancestral landholdings and giant textile factories and Mobilink offices with lines of customers stretching out the door. I’ve seen shopkeepers turn up to buy Honda Civics with cash. I’ve seen armies of private security guards, fleets of private electricity generators. I’ve seen more handwritten non-official receipts than I can possibly count.

Many of our rich have tens of millions of dollars in assets. And our middle class numbers tens of millions of people. The resources of our country are enormous. We’ve just made a collective decision not to use them.

We pay only about 10 per cent of our GDP in taxes. (Our GDP is our total economy, what all of us together earn in a year.) Meanwhile, Sri Lankans pay 15 per cent of their GDP in taxes, Indians pay 17 per cent, Turks pay 24 per cent, Americans pay 28 per cent and Swedes pay a fat 50 per cent. We Pakistanis pay a pittance in comparison.

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