Thinking about a charter of economy

The economy is a means of creating and distributing wealth and opportunity and is closely linked to the well-being of people. The system of how the economy is organized determines whether the result will be a concentration of wealth or a more egalitarian or inclusive system. The state’s responsibility to prevent the concentration of wealth is enshrined in the constitution. This should be the starting point of any economic charter.

History shows that religious leaders, thinkers and philosophers have always promoted the concept of equality/”masawat”. Technological advances have increased the world’s productive capacity to such an extent that there is no excuse for poverty and hunger anywhere in the world. On December 12, 1974, the UNGA passed Resolution 3281, which contains the “Charter of the Economic Rights and Obligations of States”. But it was more of a wish list. So let’s focus on Pakistan.

If Pakistan’s vision is to create an egalitarian society, its goals should be to reduce income and wealth inequality, end poverty, raise living standards, promote human development, end human oppression and exploitation and empower citizens.

Let’s take a look at the key drivers of this agenda:

Industry: Pakistan is lagging far behind in the race to industrialize. In the past, wherever industrialization took place, it was initially a direct involvement of the state. The private sector also rose with state support. In Pakistan, the private sector has neither the will nor the resources to take initiatives. The state must facilitate this sector and control the commanding heights of the economy. The textile sector accounts for 60 percent of our exports, mostly to the US and UK. The country needs to expand its range of products for export and diversify export destinations. Only the state has the resources, capacity and opportunity to engage in riskier ventures.

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Agriculture: It is the second largest sector in Pakistan, contributing 21 percent of GDP and employing 45 percent of the country’s total labor force. By improving this sector, we can uplift a large chunk of the population. According to the Pakistan Business Council, the yield of five basic crops is 50 percent of the world’s best due to outdated methods. Livestock and dairy farming are largely subsistence with low yields. Horticulture needs more attention.

Water scarcity and climate change are looming challenges. Food insecurity is a major problem that can also lead to social unrest. There is an urgent need to invest in technology, modernization techniques, water infrastructure, new seeds and strengthen research in this sector, whose optimal performance not only reduces the need for imports through the production of everyday items, but also increases exports becomes.

Country: It is a strategic asset for each country. However, in Pakistan, it is not only a source of food, shelter, or various public uses, but also a source of oppression, exploitation, and wealth and power inequality, leading to economic, social, and political superiority of landowners. Land ownership has created a class with a feudal mindset that claims a much larger share of the land’s wealth, power, and decision-making. It’s a holdover from the colonial era and it’s time to get rid of it.

Land speculation has driven land prices to levels where homeownership has become a dream even for the middle class, let alone the working class. Private investors prefer to invest in real estate than in technology and industry. The result is the land mafia, ready to take lives over land disputes. There is an urgent need to develop a comprehensive land policy that also keeps future needs in mind.

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Human Development: Over two-thirds of Pakistan’s population is under the age of 30 – most without education, skills or work. University graduates also have a hard time finding suitable jobs; This could be due to poor education. Most of Pakistan’s foreign workforce is unskilled. The education system needs a complete overhaul, with a focus on critical thinking, open-mindedness, and the ability to challenge existing dogma. With two million young people entering the labor market every year, priority must be given to job creation. Without gender parity in education and work, any economic charter will have little value. Directionless, frustrated, and angry youth are a threat to national security and a cause of social unrest rather than a promise of progress.

Environment: In 2018, the Global Climate Risk Index ranked Pakistan as the fifth most vulnerable country to the long-term impacts of climate change. The recent floods are proof of that. Climate change is a global problem, but Pakistan faces two existential threats: water scarcity and deforestation. The most important area that is neglected is public education to raise awareness of citizens’ role in water conservation. We must pay attention to reducing water losses from unlined sewers and wastage, conserving rainwater by building small dams and water reservoirs, and building large water filtration plants to provide clean drinking water. Deforestation is a consequence of poverty as 69 percent of the population depends on wood as a daily energy source; the population explosion has made this worse. The timber mafia has illegally felled trees with impunity and must be controlled.

Labor policy: A major reason for poverty is the minimum wage, which is below the subsistence level. The concept of the living wage has replaced the minimum wage worldwide. Together with state-sponsored education, health and other basic facilities, this is the starting point for more equal opportunities. Strengthening unions will help workers negotiate better wages and other rights for themselves.

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Tax System: Pakistan’s regressive tax system is perhaps one of the most complex systems in the world. The rate of indirect taxes must be lowered to relieve people. The issue of taxing farm income needs to be addressed. Many experts including Dr. Ikramul Haq, have put forward proposals for improvement, but nothing has changed due to a lack of political will.

Banking Sector: It is perhaps the most exploitative system nationally and internationally. However, it is an integral part of the modern global financial system. According to some estimates, for every dollar that poor countries borrow from international financial institutions, they pay $25 in debt service. In order to reduce the negative impact of this sector on the people, strict laws overseeing the banking system in Pakistan are needed. Public and private banks, especially cooperative banks, must be promoted. The focus of these banks should be on community development, not on making a profit.

Research and development: New products, new technologies, new techniques and innovations in all areas of life are closely linked to the economy, especially to a knowledge-based economy.

Before we draft an economic charter, we must decide on the ultimate goals that will determine the type of economic system we want. Also, just writing down one document is not enough. The political will must be present for implementation. And exactly here lies the problem.

The author is Vice Chairman of the Barabri Party Pakistan.

Email: [email protected]

Twitter: @shahnazsk

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