An ideal fiscal regime - II

To create an ideal society requires a very special mind-set, which unfortunately does not exist in Pakistan. Our planners and administrators carry a hangover of their colonial past, and are still not cognisant that we are an independent sovereign state, whose future is in our own hands, and that outsiders have no right to dictate to us or meddle in our affairs.
In the global village of today, it is argued, it is not possible for any country to live in isolation. While true, it must be noted that globalisation does not mean sacrificing national sovereignty, and economic, social or political co-operation does not entail a master-servant relationship, but a partnership on equal status for all concerned. I make this point, because a large number of countries in the developing world are at a disadvantage financially and look up to the developed nations or international financial institutions to bail them out of their predicament.
This support comes with lots of strings attached and at a price - the loss of dignity, if nothing else to the recipient. In actual practice it involves much else. The arrogance and greed of the so called 'donors' has no bounds and instead helping to alleviate the sufferings of the poor nations, only adds to their miseries, besides holding them in perpetual bondage or a vicious circle of 'debt-trap'.
Held in thrall or the ever-tightening noose of spiralling debt, losing value of national currency, hyper-inflation, rising unemployment, they are doomed to an existence of starvation, mal-nutrition, disease and lingering death - individually and collectively. This also gives rise to violence and crime, plus the phenomenon called "terrorism" to which these unfortunate, desperate and desolate people - particularly the young, are driven to. Perversely this also provides an excuse for the world's dominant powers to intervene and grab control of the resources of the hapless countries - in the name of "war against terror".
The lure of intrinsic resources of the under developed countries - be they water, oil, minerals or agricultural produce - has historically led to wars of conquest in the past. Now it is economic domination instead of forceful military occupation, even though the latter is also very much in evidence even today.
It is these and associated evils that have to be erased to achieve an ideal fiscal regime around the third world, and in Pakistan in particular.
How to go about it, and what are the means to achieve these objectives in a pragmatic and 'do-able' manner? It is not easy or simple, and involves lots of hard work and painstaking endurance over a period, to reach the desired status. For optimum results, we have to set our standards high, and exemplary.
The goals will not be reached in one go, and nobody is suggesting that it can be done in a short space of time, but a start has to be made and sustained at a steady pace till we reach a pinnacle of success for ourselves and the future generations.
Let us first define the objectives and the phases to attain them, before going into the 'how'. To do so, we have to set a bench-mark as a role model, and then outperform and raise the bar after each stage. As mentioned earlier, let us take Sweden as a model welfare state where citizens enjoy an enviable standard of living in peace and liberty.
Bearing in mind that the Nordic countries do not conform to our ideas of religiosity or moral behaviour, despite their conscious efforts for a fair deal to all, we have to modify our goals to an 'Islamic welfare state', taking inspiration from the society in Madineh during the early caliphate (Khulafa-e-Rashideen) where freedom from want, but simple living for all was the norm.
To define this in tangible terms, these can be enumerated as follows:
a) A decent living (food, clothing, shelter, education, medical care and equal opportunities) for all, at a comfortable level.
b) Provision of a pollution free and amicable environment for everybody without discrimination, for work, rest and leisure.
c) Freedom of expression, association and faith, without any force or intimidation.
d) A state free of foreign debt or obligations, and having a surplus for all eventualities.
e) Peaceful and friendly relations with neighbours, other Muslim nations, the third world countries and rest of the world, in that order.
f) Ability and willingness to help others in distress, without discrimination.
g) A society free of corruption, and other social stigmas.
h) A society with high moral standards, to lead others to similar goals and objectives.
All these require financial resources and an elite workforce of honest, dedicated individuals. To achieve that we have to start with elimination of corruption, favouritism, (nepotism or cronyism) and other immoral or unjust practices. That brings the first hurdle. How to get people to resist the temptations, is the question?
It is to be realised that the root-cause of corruption is 'want' or 'need'. Once started, it becomes a habit and the norm. To overcome this, a broad assessment is to be made of the cost of living for an average family at a modest, comfortable level, for all their needs and requirements, including savings for emergencies and provisions for advanced age.
That would be minimum wage for a wage earner to care for his family and that should be the minimum wages to be guaranteed by the state for all employees in the public or private sectors. Once that is done, and only then, strict enforcement of anti-corruption laws will be possible and effective. It will be an egalitarian society with no privileged classes, but no destitutes either.
What happens then to other people who are not in the salaried class category, or rank higher than the minimum wage earners (if employed)? There are also the old, the very young, the feeble and disabled and others with no visible means of support. The state has to take care of them. For the higher grades of salaried people, suitable gradations have to be made to make their employment terms attractive, consonant with their status and qualifications.
This will raise a hue and cry from establishments and employers in private sectors, as it will raise their costs of doing business, or force them to increase prices of their products, creating inflation and nullifying the increase in wages.
A two-fold measure is necessary to combat that situation. Wages have to be indexed to prices, so any raise in prices of essential commodities is compensated automatically. In time this will stabilise prices as an equilibrium is achieved, and laws of diminishing returns apply.
Second measure is state provision of basic services like health, education, transport, utilities etc, free or at a minimum and fixed cost, so that a volatile market does not affect the wage-earners to a great extent.
For those out of a job, safety nets should be provided like social security, unemployment benefits, food stamps, free housing and medical care, free education, even free food and clothes, to assure them of a decent life during their period of joblessness. Vocational training should be imparted to enable them to enter the job market, instead of living on doles for any length of time.
The burden on exchequer caused by these outlays, can be relieved by contributions made by employers and employees, as well as general taxation, as the government undertaking to provide such cases gratis or at a nominal cost relieves the populace at large a part of an otherwise onerous burden on themselves. This will be elaborated further in a later stage when we discuss state finances.
(To be continued)