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Looking for help! - Lahore_Real_Estate - 01-29-2011 02:22 PM
It is simply pathetic that Pakistan should fail to see the red line of disaster in continued reliance on institutions like the IMF to meet its expenses even after having suffered at its hands in the past. It is in this light that one should view the help that the Prime Minister sought from Senior Advisor to the US President David Lipton when the latter met Mr Gilani. Mr Lipton was asked for American intercession with the IMF for the release of its tranche next March on the assurance that Pakistan would adhere to its conditionality of levying the much-maligned RGST. He also told him that the Senate had cleared the bill about the tax, while after the various political parties had evolved consensus on its imposition it would be passed by the National Assembly to become law. At the same time, Mr Gilani assured the US delegation that despite the economic challenges, Pakistan was determined to eliminate the curse of terrorism.
It is quite strange that Mr Gilani should be blithely ignoring the public outrage against the government when the idea of the imposition of RGST was first mooted, and the opposition parties’ repeated assertions that they would have none of it. Their basic reason was: a fresh spiral of inflation that the RGST would set off, when the people already find it hard to make both ends meet. In fact, they are cutting corners, and have no choice but to deprive themselves of some of the bare essentials of life. It seems certain that RGST’s forced application would ignite countrywide protests and boycotts. Thus, it is not something that would serve the national interest, as Mr Gilani misguidedly claimed.
The government should consult those economists who forcefully argue that given the political will and end to the endemic corruption, Islamabad can survive on self-help rather than rely on those who do not have the capacity to make an out-of-the-box plan and are inclined to rush to IMF’s lap. The solution lies in taxing those sectors that are outside the tax net, the agricultural income and other big earners, for instance.