The government has claimed that the new 10-year bond of $500 million, which the finance ministry has introduced in London, Los Angeles, Boston and New York at coupon rate of 8.25 percent, is twice over subscribed than it was expected. However, the ministry has restricted the bond level at $500 million to cover the maturity of bond in March 2016 which was issued in 2006. The issuance of bonds is not against the norms of economics as even the developed economies opt for this arrangement to generate real-time finances. However, the country like Pakistan is already overburdened with shedload of domestic and foreign loans and the burden is piling up with every passing day. What the government needs to do is to take sold steps to improve trade and industry. The example of Dubai is before us where there is little oil but more business with strong law and order. The writ of the government is visible in every field of life and business is growing despite tax exemptions. That means tax is the source of income, but should not be applied as axe. The nations which are squeezing their people to get more and more taxes are still reeling under poverty and hunger. The government should take such steps which generate business and trade activities and the government will automatically collect huge taxes as dividends at the end of the day.
The main problem with the government is the law and order which could not be an issue if large tax-free industrial zones are established under heavy security blanket. Pakistan can offer cheap and skilled labour to foreign investors but the government will have to prove its sincerity and management skills. A campaign “make in Pakistan” is the need of the hour. If security, infrastructure and protection of foreign capital are ensured, the country can enter the economic tigers club in five years. But instead of taking concrete measures, the policymakers find an easy refuge in ad hoc policies and cosmetic steps which not only disturbs tax collection, but also discourage industrial growth.
The “make in Pakistan” campaign can attract large scale as well as small scale industries, including automobile and textile sectors. On programming side, Pakistan can build its own silicon valley and can provide economic and management solutions to developing economies at competitive rates. The provinces are now independent with large development funds, but none of the province is able to show outstanding performance in the economic field. It is yet to be seen how long the government relies on funding from the International Monetary Fund.
