First step of the PTI government should be to attract foreign investment and get rid of losses in over 200 loss making government organizations. They have to do this without further investment because they are already managing tough financial situation. If government gets trapped in IMF loan then it might get limited with options due to harsh conditions.
PTI has to keep in mind following quote : " You can't keep doing the same thing and expect a different result"
Most of the loans that Pakistan has taken have gone into loss making PIA, Railway, Steel and Wapda. It is not the job of the government to run an airline, railway company, electricity companies etc. Job of the government is to manage these sectors for growth of the economy. So government should create infrastructure, attract investment for private sector to run railway companies, airlines, steel companies, electricity companies etc. Government should partner with private sector for business and industry growth, and employment creation. If private sector can run quality transport services for passengers and goods that is trusted more than corrupt government then government should help private sector to invest and grow in railway sector for passenger transport and goods transport. So sell railway, and lay down dual lines, build new stations etc.
Same is true for Wapda, all Wapda billing should be privatized. There should be zero losses of Wapda in billing and recovery.
Create a private company for building dams, attract private sector investment and facilitate them to build, operate and transfer the dam to Pakistan after earning their profit.
PTI government should work on principle, "No loans, where possible. Loan for building infrastructure is failure of government to attract investment for building and running infrastructure in a profitable way. Government loans are gateway for corruption, loot and plunder."
PTI government under any circumstances should not invest a single penny of government money into running PIA, Railway and loss making government enterprises. Strategy should be to reduce/eliminate losses to zero.
1). Investment Not Loans
PTI government has to attract foreign and domestic investment for all key projects as key ingredient rather than loans. Imran Khan has always boosted about his ability to attract foreign investment. Imran Khan should now attract foreign investment for building dams, turning around railways, PIA, and Pakistan steel.
a). PTI Attracts Saudi Investment for Gwadar Oil City
https://dunyanews.tv/en/Pakistan/458021-Pakistan-Saudi-Arabia-US$10bn-Economic-Package-PM-Imran-UAE-China-CPEC
2). Eliminating losses worth over 1 trillion rupees from state owned enterprises
Most important step is to get rid of state owned enterprises who are making over 1 trillion rupees loss annually. So control of PIA, Railways , Pakistan steel has to be transferred to private investors who would bring in investment and expertise to turn these enterprises around. This would create more jobs, much needed economic activity, bring FDI, save foreign exchange and energize economy. Pakistan steel alone can save billions of dollars.
Progress : None in first month
a). Manage Railway sector and Do Not Use Loans to Run Pakistan Railway
Shaikh Rasheed is moving in the right direction, attract FDI to run and develop all railway services.
Attract foreign investment for developing food services, including fast food giants, sell tickets through travel agents etc. Goal should be to make railway major revenue sources for government and people of Pakistan. If this does not happen, then railway has failed.
Railway to Overcome Deficit and Seek Private Investment
https://tribune.com.pk/story/1787702/2-railways-overcome-deficit-year-sheikh-rasheed/
3). Renegotiating LNG and other contracts
Billions of dollars worth of corruption has been committed in major government contracts in energy sectors, these have to be renegotiated saving billions of dollars.
Progress : None in first month
4). Crackdown on Black Money
Government should form a task force for crackdown on black money, and take comprehensive, aggressive approach to force black money to come into national mainstream.
"No Government in the world can collect taxes, if it is not able to control/curb black money."
"FBR will never be able to collect taxes without crackdown on black money."
Progress : None in first month
Rich Pakistanis including politicians and bureaucracy have stashed abroad over 200 billion dollars in cash and property. This money has to be brought back.
b). Crackdown on Money Laundering
In Pakistan, there has been no money laundering convictions. Nawaz Sharif and Zardari both are involved in massive money laundering, along with key members of establishment. Pakistan foreign exchange reserves can not stablize without controlling money laundering. Also FATF restrictions will only be removed, once we have effective AML checks in place.
Habib Bank Money Laundering Case in New York
Progress : None in first month
Progress : Work started in first month
c). Ban Rs. 5000 Note to Force People to Whiten Black Money
Government should ban Rs. 5000 note in the first stage, forcing people to make payments through banks thus bringing black money hidden in homes, cellars, safes into banks. People should be forced to deposit this money in bank accounts only, and then withdraw from bank accounts forcing them to keep money in banks.
Government should ban Rs. 5000 note in the first stage, forcing people to make payments through banks thus bringing black money hidden in homes, cellars, safes into banks. People should be forced to deposit this money in bank accounts only, and then withdraw from bank accounts forcing them to keep money in banks.
d). Crackdown on Tax Evasion
In Pakistan, tax is being paid by mostly government and non-government employees. Most of the businesses are not even registered with FBR. Most of the property dealers, stores, workshops etc pay no tax at all. By bringing all these people into tax net, government can easily increase tax collection by 2x-3x i.e. to Rs. 8 trillion to 12 trillion. If Pakistan government can do this, then there will be no need for IMF and other loans.
PTI government supported tax evasion by removing ban on non-filers and came up with no major steps for increasing number of filers, and tax payers. At the same time, they increased burden on salaried class and tax payers :-
https://www.dawn.com/news/1434056
Progress : Progress is negative, as PTI supported tax in the first budget
In Pakistan, tax is being paid by mostly government and non-government employees. Most of the businesses are not even registered with FBR. Most of the property dealers, stores, workshops etc pay no tax at all. By bringing all these people into tax net, government can easily increase tax collection by 2x-3x i.e. to Rs. 8 trillion to 12 trillion. If Pakistan government can do this, then there will be no need for IMF and other loans.
PTI government supported tax evasion by removing ban on non-filers and came up with no major steps for increasing number of filers, and tax payers. At the same time, they increased burden on salaried class and tax payers :-
https://www.dawn.com/news/1434056
Progress : Progress is negative, as PTI supported tax in the first budget
e). Ban or Change Prize Bond Scheme
Government needs to change prize bond scheme so that prize bond owners are recognized/registered using NIC's. This is especially important for large bonds of 25k etc.
Progress : None in first month
g). Crack down on Cash Hoardings in Bank Safe's and at Home
Government should announce crack down on cash/valuable hoards and implement it vigorously. This will force the concerned to legalize their money and pay taxes according to their real income.
Progress : None in first month
There are thousands of fake accounts in Pakistani banks, these have been created by almost all businesses to save tax, and facilitate money laundering. Banks are supporting this culture of fake accounts and tax evasion, and state bank is silent over this under political pressure.
Reference:-
https://dunyanews.tv/en/Pakistan/447292-Supreme-Court-Summit-Bank-fake-accounts-case-SBP
4). Investment in Health, Education, Police and Infrastructure
Once, we have controlled money laundering, reformed FBR and started to achieve tax collection targets, attracted major investments then we can start to put some serious money into health, education, police and infrastructure.
5). Reforming Bureaucracy
Pakistan's bureaucracy lacks expertise in key areas including health, education, finance, accounting, economics, IT, governance, law because of how they are hired, trained and promoted. Bureaucracy lacks proper HR processes. There are no proper job roles, and emphasis on improving skills, knowledge, performance measurement; this results in poorly trained and focused civil servants lacking competitiveness as per world standards and expectations.
Government needs to establish proper HR department, develop job roles emphasizing job requirement, and totally change hiring and promotion processes as per job requirement.
Progress : None in first month
6). Key changes in Top Financial Team
These include change state bank governor, national bank governor, SECP chairman, PSX chairman and members of economic planning team.
7). CPEC Revenue
Governement has to take steps to increase CPEC related trade, and increase revenue from CPEC. If CPEC is not generating any trade activity, oil and raw material transportation to China then we should look into reasons, resolve issues and focus on getting revenue. Getting early revenue from CPEC is key to success of CPEC, and very important for government of Pakistan.
There should be quarterly and yearly targets for CPEC trade and revenue.
Progress : None in first month
8). Purge and Cleanse Civil Service from Dual Nationality Holders, Corrupt and Touts
Government has to start an operation to purge and clean civil services in federal government and provinces of all the dual nationality holders, corrupt officers and touts of previous political governments. Government can only start to function properly once it has cleansed the civil service and installed competent, clean officers at key positions.
Progress : None in first month
9). Dealing with Wapda and Circular Debt
Major failure and corruption is in recovery, government can not control theft and can not manage sales. They should first privatize power distribution, and then let the distribution companies buy cheapest power from whatever sources they can. Once this is done, then government should focus on generating power from hydel electricity, and other cheap sources and start selling these to distribution companies. Once this strategy is in place, then two things are achieved. One government does not have to bear distribution losses, second government has taken responsibility to produce cheap electricity. You always control bleeding first and then start treating root causes. If you don't control bleeding, then you die even before root cause can be treated.
No bail out has been given to KSE, plus privately owned KEL has done lot of good work without using public funds. It is much better than public sector KEL. Additionally, we have the option of selling it again Chinese are ready to invest 1 billion dollars in KEL; government should quickly avail the opportunity and kick out current KSE owners while bringing in significant FDI. Government ownership of PSE's is the root cause of corruption, this must be treated to minimize corruption.
https://www.dawn.com/news/1397806
Progress : None in first month
10). Model Town Massacre
Progress : None in first month
11). Building Small and Large Dams
It is stupid to expect that we can build major dams like Basha dam requiring over 15 billion dollars worth of investment with charity. We need major investment, government should take steps to attract investment from within and abroad for these projects.
Progress : PM Imran Khan launches drive to collect donation, so some progress made.
Now a firm commitment to collect funds through investment vehicles, and attract major foreign investment is needed. Goal is to complete dams in next 5 years.
Progress status is Getting Started.
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