As the sun dawns on another clear morning, the old walled city of Lahore, the second largest urban centre in Pakistan, slowly comes to life. Vendors selling everything from made-in-China remote controls, safety pins and herbal hair oils to fresh fruits and vegetables, make their way into the mass of tightly woven residential streets, calling out to customers.
On a busy main road near the GPO, dozens of shops selling everything from bakery items to motor oil are starting to open up and will remain open late into the night. Business is good in these parts of the city.
Aided by heavy foot traffic, and the fact that he does not pay any rent except the occasional money he pays to an anti-encroachment official, Javed, who runs a small kiosk nearby -selling paan, cigarettes and chilled coke - has finally scraped together enough to buy a Honda 125, which will save him the Rs15 that he spends on his commute to work every day.
Although they come from different places and different economic backgrounds, Javed, and the hundreds of thousands of street vendors and small business owners working across Lahore and Pakistan all have one thing in common.
They do not exist on any paper, and are a part of a thriving underground economy that is driving the steady hike in consumerism in an economy which on paper, is a failure.
Running on chronic budget deficits, Pakistan's economy presents a dichotomy that seemingly defies explanation. While the figures say something else, international restaurants and clothing brands keep propping up all over the country; people keep buying new cars and motorbikes and spending more than ever on clothes and food.
One explanation of this gap stems from the fact that the discretionary income of the Pakistani population is on a consistent hike.
Bushra Kamal, a beautician who owns a trendy salon in the upscale DHA H-block area, is amongst those who are doing better than ever. "On weekends and in the wedding seasons, we sometimes have a two-week waiting list, but otherwise, even during slow days, there is a steady flow of customers in and out, even if its for a simple mani-pedi" she recounts proudly.
Charging Rs700 for a hair trim and Rs1,500 for a facial, Bushra earns in the thousands every day, but does not pay a rupee in taxes. When asked if she had her business registered and paid her taxes, she was adamant that she "paid more than enough in rent for her parlor".
In a report prepared by FBR, research has claimed that this nameless facet of Pakistan's underground economy has grown consistently at the rate of nine percent from 1977-2000 and constitutes some 30-50 percent of the country's formal economy.
And making up a sizable portion of the informal economy which evades taxes, cuts corners and saves up money without any accountability is the middle and lower middle class who have been driving up the governments dependence on foreign aid and on printing more money to set right the balance.
On one level, the fact that the country's middle class is consistently growing translates into good news; namely that while the rich are still getting richer, the poor are doing slightly better as well.
But the question of progress is a comprehensive one, and since inclusive and comprehensive progress can never be achieved through cutting corners, it is essential to remember that any and all taxes that the underground economy does not pay continue to leach away all hope of revival from the stagnant industrial and service sectors of Pakistan, which still continues to pay the biggest chunk of taxes.
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