Missing political will

To better manage debt-to-GDP ratio, economic experts need to adopt a new mindset which is not heavily tilted in favour of the rich. Without the reversal of those policies that are in favour of the well-to-do class, no meaningful improvement can happen. The import bill can be compressed by at least $6 to $7 billion by restricting the import of luxury and unnecessary consumer goods. This measure alone will reduce our dependence on borrowings and avoid the IMF trap. It is also true that the country never uses foreign loans for productive activities.

During the last 12 years, the country has used loans for consumption purposes or for less productive projects that do not generate repayment capacity. The government can overcome the country’s fiscal deficit by implementing strict austerity measures for reducing the government’s expenditure, and taxing the rich. There are only 2.5 million taxpayers in the country. According to the Federal Board of Revenue’s (FBR) estimate, at least five million taxpayers are liable to file tax returns. At present, what is missing is political will. The government needs to make sincere efforts to tackle the country’s debt crisis.

Shoaib A Majeed

Karachi