KARACHI – Besides the financial constraints, the increasing need for an election and public welfare-oriented budget has compelled the government and other state actors to reopen the NATO supply line, following a six-month blockage which allied forces themselves prompted by attacking military outposts in Salala, killing 24 Pakistani soldiers.“The federal budget 2012-13, which is expected the next month, heavily depends on American financial assistance and aid from international financial institutions. Without their support, Pakistan would not get the foreign exchange exponent required for various ongoing and future projects, including those in the energy sector,” said renowned economist Dr Shahid Hassan Siddiqui in an interview with The Nation. “The federal budget is being presented at a time when the economy is in a serious crisis. The government will not be in a position to repay external debts from its own resources in the next fiscal year. This unfortunate situation has resulted from a strategy the US masterminded in collusion with the IMF and our NRO-infected government, its economic managers and other state and non-state actors, including state institutions,” he said. “Defence Minister Chaudhry Ahmed Mukhtar, while protecting American interests, said that “Pakistan is in a hurry to resume the NATO supplies so that it gets money from the US, and the federal budget could be prepared accordingly”. Indeed, national security is being compromised and sacrificed for US financial support. The minister has plainly conceded that Pakistan’s budget cannot be prepared without aid from the US,” the leading economist said.Dr Siddiqui further said that the seeds of disaster were sown on September 26, 2008, when President Asif Ali Zardari and the Friends of Pakistan issued a communiqué through which Pakistan in-principle agreed to take loans from the IMF to compensate the losses in the war on terror.He said he had repeatedly been saying that Pakistan would not be able to repay $ 7.6 billion loan to the IMF. “Since May 2010, according to a well-designed strategy, the US has, stopped giving monetary assistance to Pakistan, while the IMF has stopped loan installments. Pakistan continues to incur heavy budgetary and trade deficits.Pakistan has to pay around $ 4 billion to the IMF, in addition to the repayment of external loans from other sources. The country’s foreign reserves have already declined by over $ 3 billion,” Dr Siddiqui added.He said due to imprudent economic policies energy crises, political confrontation and by not taking various high profile cases to their logical conclusion by the superior courts and host of other reasons, the rate of growth of economy has slowed down and saving rates and investment rates going down. The government has already taking loans of over Rs1000 billion from the banking sector including the Central Bank only in current fiscal year.The timing of dispute with USA was decided by the USA itself. Pakistan has already suffered a loss of $ 80 billion since Oct 2001, out of which $ 52 billion incurred during last four years of present government”, he said. The government has deliberately not releasing the figures of the aid and assistance received by Pakistan after 9/11.It is, however, estimated that US has provided only about 17 percent of this loss.Indications are that USA has also rejected Pakistan’s bills amounting to billions of rupees submitted on account of expenses on the war on terror. The US is not paying $ 1.5 billion per year on account of aid committed and also $ 1.5 billion per annum under Kerry-Lugar Bill. Even if Pakistan agrees to restore NATO supplies in exchange of part of the reimbursement of coalition support fund and invitation to President Zardari to attend Chicago Summit, the matter will not end here”, he argued.Indications are that in months to come Pakistan will approach US for supporting Pakistan’s case for a new loan package to it.The US will support Pakistan’s case on Pakistan agreeing to enhance military operation in North Waziristan and to blur a blind eye towards drone attack.While the government will be too happy to impose Reformed GST/VAT on the plea that this is the condition on IMF while the tax evaders including those who enjoys exemptions like agricultural income tax, gain tax on stock exchange transaction and property income at the cost of 180 million people and the economy of Pakistan.When asked for suggestions to steer the country from present economic morass, Dr Siddiqui said it’s perceived clearly that Pakistan has only two options to come out of the present crises;- is the approaching to IMF through US support with all possible horrible consequences or to take certain revolutionary decisions which otherwise cannot be taken in normal circumstances.The key to theses alternate lies with the parliament. The following decision need to be taken.Law would be framed by the national assembly, parliament as also four provincial assemblies that all incomes (say presently Rs450,000) all income beyond the prescribed limit must be equitably taxed and taxes recovered accordingly.  Presently there is a potential of additional taxes of Rs1900 billon per year, over and above the amount being presently recovered as tax revenue. The GST should be reduced to 5 percent and all surcharges on POL be withdrawn. All members of parliament, economic managers, politicians and members of civil and military bureaucracy must be directed by law that they should give a declaration that they or their dependent family members are maintaining any account in banks outside Pakistan.Overseas Pakistanis should be offered a interest rate of 4.5 percent per annum on deposits of over one year duration.Pakistan doest not have any thirds option either to go to America and IMF sacrificing national interests and security or take these revolutionary decisions for safeguarding the interest of our motherland”, Dr Shahid Hassan concluded.

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