Pakistan collects far less tax (as a percentage of GDP) than most countries. So far the PML(N) government has not been able to significantly increase the tax ratio. (Chart: Dawn)
The Pakistan Muslim League (Nawaz) (PML (N)) government is completing its second year in power on May 11, 2015. It is astonishing to observe that the accountability process for democratically elected government has improved significantly.
Under a CIPE grant, the first such public accountability process was initiated by Policy Research Institute for Market Economy (PRIME), an independent think tank based in Islamabad. PRIME started a simple exercise by taking concrete promises from PMLN’s economic platform and, through a scientifically designed scoring process, monitoring the government’s performance under three key sections: Economic Revival, Energy Security, and Social Protection. These sections were further divided into 82 sub-categories.
The report is widely accepted as an unbiased measure of the government’s performance. The report received significant coverage in local media, both print and television. PRIME Executive Director Ali Salman suggests that “IMF Staff Mission assessment of Pakistan’s economic situation and reforms have many agreements with PRIME’s Tracking Report.”
The accountability process has recently moved to the next level, as the government’s Standing Committee on Finance publically accused the PML (N) government of making decisions on taxation measures in isolation, without taking the Standing Committee in confidence.
Trucks wait at the India-Pakistan border. (Photo: Wikimedia Commons)
Huma Sattar is a CIPE-Atlas Corps Think Tank LINKS Fellow at the Heritage Foundation
Pakistan and India share a long, unyielding history. The past is marred with political and territorial conflict, militarization, and a general sense of mistrust on both sides.
Since 2003, trade between the two countries has grown seven-fold, with Indian imports into Pakistan taking 80 percent of the share, according to data reported by International Trade Centre. While formal figures report bilateral trade of U.S $2.3 billion for 2013, some estimates contend that a larger share of bilateral trade between Pakistan and India comes through indirect or informal routes. Trade is estimated to be double what statistics report with significant Indian imports coming through Dubai into Pakistan.
Many studies which have aimed to estimate potential bilateral trade between Pakistan and India have concluded consistently that there are enormous economic synergies that can exist between the two economies given their trade complementarity and geographic proximity. Mutually preferential cooperation would benefit both Pakistan and India.
However, Pakistan has still not granted Most Favored Nation status (MFN) to India despite talks that seemed to have made progress in the past few years. Judging by the recent statements made by officials from Pakistan, it seems the country will remain flummoxed by the idea of granting MFN to India, contending one or more of the following as reason for their reservations:
- India gave MFN to Pakistan in 1996. For Pakistan, however, the trade deficit has only increased.
- MFN to India will hurt the local economy of Pakistan.
- Increasing trade with India has hardened India’s stance on Kashmir.
Unfortunately for Pakistan, the merits of these arguments are wearing thin. In fact, putting the Kashmir issue and trade on the same table ensures that neither side relents and both issues remain unaddressed.
A recent World Bank report suggests that the country will not meet the Millennium Development Goals of universal primary education by 2015. The report ranks Pakistan 113th out of 120 countries in the “Education for All Index.” With seven million out-of-school kids, the challenge is snowballing with each passing year.
Watch an interview with Tasneem Ahmar conducted by CIPE Program Officer Jennifer Anderson.
It is widely accepted by development experts that women are a largely untapped source of potential around the world. Women constitute approximately 50 percent of the human population and whether talking about political, economic, or social development, they have the ability to contribute vast advancements. However, in many countries around the world, women are excluded from participating in meaningful ways. In Pakistan, CIPE friend and partner Tasneem Ahmar is working through the media to change the perception of women in order to increase their ability to contribute to the nation’s development.
Having been raised in a family of media professionals, Tasneem discovered early on that women were not portrayed the same as men in print and broadcast media, leading to an undervaluing of women as a whole. Using Pakistan’s recent elections as an example, she has described how women candidates were only portrayed as objects with the main topics of discussion focusing around their wardrobe, hairstyles, and accessories rather than meaningful conversation about their stance on the issues. In an effort to change this pattern and change Pakistani perceptions, Tasneem established the Uks Research Center in 1997.
Entrepreneurship has become a major phenomenon in Pakistan. Among the highlights of Global Entrepreneurship Week 2014, local startup “TalLee” was selected for the GEW 50 2014 as one of the top 50 startup ventures from around the world — chosen from among 600 startups from 38 countries.
TalLee sells door bells; the innovation that makes these door bells so special is that they have GSM capability, so that the owner of the house gets a phone call (irrespective of location) and connects with the person who has pressed the doorbell. The idea was conceived by Rafi, who founded TalLee in April 2014 and was offered incubation space at NUST Technology Incubation Center (TIC).
A seminar on Entrepreneurship for Economic Growth was also held in Karachi on November 21, 2014, jointly organized by the Karachi School for Business and Leadership and the National Entrepreneurship Working Group. Various factors that inhibit the growth of entrepreneurship were discussed. Among these, the lack of focus on critical creative thinking in the country’s education system was identified to be a key reason why graduates prefer joining the rank of job-seekers and not creators.
This inspired me to visualize my job hunting days and also to further investigate why critical creative thinking is absent from our education system. In 2004, when I graduated from an engineering university, seeking a job was written on my forehead. Dropping CVs to company after company was foremost on my to-do list, and after several interviews, one company hit me with an unusual question: why don’t you become an entrepreneur?
Pakistan is charged up to celebrate Global Entrepreneurship Week (GEW) 2014. GEW has become a yearly phenomenon, with universities, GEW-Pakistan partners, chambers of commerce, and companies all sponsoring events during the week of November 17-23.
On October 28, Pakistan’s Prime Minister Nawaz Sharif announced that the performance of each of his ministries will be evaluated in what the government describes as the country’s first-ever such accountability exercise. Planning and Development Minister Ahsan Iqbal of the ruling Pakistan Muslim League-Nawaz party (PML-N) has said that four benchmarks will be used assess each minister: implementation of the PML-N campaign platform from the 2013 election; internal department and ministry reforms; public service delivery and public welfare; and whether the ministry has a strategic plan, or a “future agenda.”
This development is particularly notable because for the past year, CIPE and one of its key partners in Pakistan – the Policy Research Institute on Market Economy (PRIME), an Islamabad-based think tank – have spearheaded a program to track the government’s implementation of its economic policy platform. PRIME issues a quarterly performance scorecard, tracking key macro- and microeconomic indicators, as well as legislative and policy initiatives, to measure whether the government is following through on its 2013 pledge to overhaul the economy.
The idea of such monitoring follows, in turn, on CIPE’s earlier work to engage the business community in policy advocacy and encourage the parties to campaign on specific economic platforms – at the time a first for Pakistan. This program by PRIME and CIPE continues that innovation, and also set the tone for the government’s own accountability push.