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Chaos and revolution

29 October, 2010

By Roedad Khan


Chaos and revolution

On the final day of the US-Pakistan strategic dialogue, Secretary Clinton once again urged Pakistan to reform its tax system to yield more funds for flood relief and other needs from its wealthy. "Now, reforming Pakistan`s tax system is one area in which tough decisions will have to be made, because it will serve a broad double-purpose. A broader tax base will mean more funding for roads, bridges, power plants and airports, all essential elements of a growing economy." Expanding the tax base, she added, "would demonstrate to the international community that all segments of Pakistani society were willing to do their own part to rebuild their own country."

"A fair, equitable and corruption-free tax system is a primary objective of the government." Dr Abdul Hafeez Shaikh, Minister for Finance, Revenue and Economic Affairs, made this statement, while chairing a meeting of the tax-reform coordination group (RCG) formed in July 2010. The finance minister is aware of the necessity of finding money to carry on the affairs of the state. The end of the old regime in France in 1789 was brought about, in the first instance, by a cash-flow crisis. Fiscal exhaustion precipitated the French Revolution.

The finance minister knows that he has to take money from where it is. Indeed, one might ask, from where else? It seems obvious even to a layman like myself that taxes would have to be raised and sacrifices made by those best able to afford them. But this does not seem obvious to the parliament or to the government. They stubbornly oppose all efforts to clear up the rotten tax structures which weigh so much more heavily on the poor than on the rich. And in their fanatical regard for their capital and profit which is matched only by their disregard for the salvation of the country, they transfer their capital abroad to such a massive extent as to make inevitable the impending fate of the currency and the bankruptcy of the treasury.

Like the finance ministers of Louis XVI, Hafeez Shaikh faces an unenviable task, an ocean of public debt, a monstrous deficit, immense fiscal havoc, a bankrupt economy, glaring inequalities and political resistance to raising taxes from the merciless enemies of fiscal reform and defenders of upper-class privileges, a thoroughly corrupt government aptly described as a vacuum presiding over a chaos. He is also no doubt aware that the state cannot subordinate its irreducible military interest to the consideration of a balanced budget.

The very idea of asking those who have the money to shoulder the main burden of internal taxation is anathema to them. It frightens them to death resulting in the exodus of capital to safer, foreign havens. The selfishness of the moneyed class in avoiding any financial sacrifice to help pull the country back up on its feet is shocking. The possessors and manipulators of most of the country`s wealth will simply contrive to escape shouldering a fair share of the burden which will therefore fall hardest on the poor.

The power of a small elite which possesses most of the wealth appears to be greater than the power of the government elected by the people, presumably to run the country in the interest of all the citizens. This group is determined to preserve its privileged position and thus, its money. In effect, there is a virtual alliance between the possessor-class and the government, which it manipulates through its control of the parliament, the press, the financing of political parties, and the handling of its vast funds to influence the fiscal policies of government.

Faced with specific obligations to the country if the state were not to flounder in a financial morass, the moneyed class would shrink from meeting them. The Republic might go under but their wealth would be preserved. In the meantime they would not help keep it afloat by paying even their fair share of the taxes. The tax burden is for others to shoulder. If that were understood by the government, the Republic could continue. If not ... were there not other forms of government possible which promised more security for entrenched wealth? In the back of the minds of some of them the idea is beginning to sprout that perhaps the nation could be saved – and with it their class and its privileges – by returning to an autocratic regime, even a dictatorship.

The aversion of the rich to paying an equitable portion of taxes is notorious. Evasion of taxes, of course, is not peculiar to Pakistan. It prevails in all other Third World countries. In Pakistan the practice goes back a long way. The landed aristocracy, whose wealth is based mostly on vast landed estates, dodge most of the taxes the state attempts to impose. And all the time the peasants in the countryside, the workers living in urban ghettos, the poor, and the lower middle class, groan under an unbearable taxation burden. The aristocracy of money, having amassed its pile wants to stop the clock and stand still, forgetting that to stand still is to begin to die. It fiercely opposes change and reform and social agitation. The immunity of the landed aristocracy to direct taxes most obviously denies desperately needed funds to the treasury.

Pakistan realised long ago that its coffers were empty; that it had exhausted its resources so completely that it could no longer fulfil its basic function, the protection of its sovereignty. But however grave their financial predicament, countries like Pakistan never go into receivership. However dreadful a financial situation they may get into, there will always be moneymen lurking in the wings prepared to set them on their feet – for a price. The price, in our case, is the abdication of our sovereignty to America. Financial rescue is contingent on loss of sovereignty. It is as simple as that. Not surprisingly, Pakistan today is neither sovereign nor independent, nor democratic. It is a "rentier state", an American lackey, ill-led, ill-governed by a corrupt, power-hungry junta supported by Washington.

One of the lessons of history is that when hunger and anger come together, people sooner or later, come onto the streets. This demonstrates Lenin`s maxim that in such situations voting with citizen`s feet is more effective than voting in elections. The bringing together of anger with hunger is like the meeting of two livewires. At their slightest touch a brilliant incandescence of light and heat occurs. Just what and who would be consumed by the illumination is hard to tell. Well, hunger and anger did come together in the wake of the unprecedented floods which wrought havoc and displaced millions of poor people. I see blood in their eyes. I dread their determination.

Revolution comes of its own accord, un-engineered by anyone, and is born in the chaos of the collapse of the state. Today all the symptoms one had ever come across in history previous to great changes and revolutions exist in Pakistan. The country appears to be adrift. Pakistan is sliding into anarchy. One of the earliest and most spectacular acts of the great uprising in Paris in July 1789 was to pursue the economic vampires who were widely rumoured to have secreted away their booty. "Tremble, you who sucked the blood of poor unhappy wretches," warned Marat. "These blood suckers either give an account of their larceny and restore to the nation what they have stolen or else, be delivered to the blade of law."

The least we can do is to ensure that the Supreme Court judgement in the NRO case is fully implemented in letter and spirit. We must be ready to join in actions which ensure that thieves and robbers never again take the destiny of the nation into their hands. They must atone, they must be cast aside, they must not be allowed to enjoy the tainted wealth they have acquired.

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