Country of the elite, by the elite, for the elite

ISLAMABAD: UNDP had issued a damning report on Pakistan in April 2021 revealing that the economic privileges accorded to the Pakistani elite consume $17.4 billion of the country’s economy but no corrective measures have been taken as yet to divert this amount to the poor and needy of the country.

The UN Development Programme’s (UNDP) National Human Development Report (NHDR) for Pakistan had focused on issues of inequality in the country of over 220 million people. It had found that economic privileges accorded to Pakistan’s elite groups, including the corporate sector, feudal landlords, the political class and the country’s civil and powerful military bureaucracy, add up to an estimated $17.4 billion, or roughly 6 percent of the country’s economy.

The report had used the prism of “Power, People and Policy” to examine the stark income and economic opportunity disparities in Pakistan. Within a few weeks of the release of the report, the UNDP’s Kanni Wignaraja had told Al Jazeera that the report was discussed with the Pakistani leaders, who had promised action over the UN report.

“Powerful groups use their privilege to capture more than their fair share, people perpetuate structural discrimination through prejudice against others based on social characteristics, and policies are often unsuccessful at addressing the resulting inequity, or may even contribute to it,” says the report.

Kanni Wignaraja, assistant secretary-general and regional chief of the UNDP had been on a two-week “virtual tour” of Pakistan to discuss the report’s findings, holding talks with the then prime minister Imran Khan and other top members of his cabinet, including the ministers of foreign affairs and planning.

She had said that Pakistani leaders have taken the findings of the report “right on” and pledged to focus on prescriptive action. Finance ministry sources said that the UNDP report was issued during the Imran Khan government but neither the PTI regime nor the present one had taken the kind of measures that are required to withdraw the privileges of the country’s elite.

The present government recently set up a National Austerity Committee, which has already submitted its report to the prime minister but there is no decision taken as yet regarding the implementation of the committee’s recommendations.

In view of the country’s serious economic situation, there is a growing demand from the country’s elite including the rulers, parliamentarians, judges and civil and military bureaucracy to drastically cut their perks and privileges to lead the campaign for saving taxpayer money. However, so far except a few cabinet members who have announced not to take salaries while one of the ministers- Ahsan Iqbal- has returned the official SUV allotted to him, nothing significant has been done by any segment of the ruling elite to contribute in direly needed saving.

Of late, no less than defence minister Khawaja Asif pointed out that there are over 200 golf courses, created on government lands, for the selected few, and if these lands are recovered and auctioned Pakistan could repay substantial part of its foreign debts. He also disclosed that rent for the setup created on 1,500 kanals government land for the elite in Lahore is only Rs5,000.

For the much embarrassment of Pakistan, different foreign governments and their representatives have pointed out that Islamabad needs to reform its economic systems and tax its rich and affluent class instead of begging from other countries. The IMF chief, in her latest statement, has also asked Pakistan to tax the rich, withdraw subsidies from the affluent class and spend taxpayers’ money on the poor.

Interestingly, the UNDP’s regional chief had also the same expectations in April 2021 when she said, “My hope is that there is strong intent to review things like the current tax and subsidy policies, to look at land and capital access. However, it was never done. “

The UNDP had pointed out that the biggest beneficiary of the privileges – which may take the form of tax breaks, cheap input prices, higher output prices or preferential access to capital, land and services – was found to be the country’s corporate sector, which accrued an estimated $4.7 billion in privileges.

The second and third highest recipients of privileges were found to be the country’s richest 1 percent, who collectively own 9 percent of the country’s overall income, and the feudal land owning class, which constitutes 1.1 percent of the population but owns 22 percent of all arable farmland.

Both classes, according to the UNDP report, have strong representation in the Pakistani Parliament, with most major political parties’ candidates drawn from either the feudal landowning class or the country’s business-owning elite.

The UNDP’s Wignaraja had noted that this creates a paradox where those responsible for doling out the privileges were also those who were receiving them. It was also pointed out that the country’s powerful military, which has directly ruled Pakistan for roughly half of its 74-year history, was found to receive $1.7 billion in privileges, mainly in the form of preferential access to land, capital and infrastructure, as well as tax exemptions.