Fine points about new amnesty scheme

Having failed to honour his word and bring back all the wealth looted from the country and stashed in foreign accounts, perhaps PM Imran Khan has found a novel way of routing that money back into Pakistan. So what’s one more amnesty scheme and a few more disgruntled taxpayers when you can get a whole lot of black money to not only come back home but also build the national industry? Surely whitewashing the loot is a small price to pay when you’re doing something as game-changing as potentially erecting the country’s new industrial elite. And who’s the joke really on when they not only have to help rebuild the motherland but also pay five percent to the government?

Amnesty schemes work in the strangest ways. Now the same people that were having nightmares when Imran Khan was elected, because he promised to go after them and their stolen wealth, have reason to cheer him along, work with him, and even vote for him.

The recent amnesty for the construction sector, which was no doubt meant to stimulate all 40 or so related industries as well, whitened so much black money that the big players alone pushed up prices of real estate by 100-150pc in some cities, leaving middle classers who were promised affordable houses scratching their heads.

But that’s a small price to pay because the sector was revitalised, beyond a doubt, and now a lot more high-net-worth individuals - all legitimate wealth now, mind you - are grateful to the present government. Of course they also used their newly cleansed, and many times multiplied, wealth to buy expensive toys from abroad; but that only means that the current account had to take a hit to make sure that enough people were happy with the administration to give it another chance in the next election.

Not all of the kaptaan’s policies point in the same direction, though. The cut of Rs10/litre in petrol and Rs5/unit in electricity would imply that the people are more important than the economy, even if they have become so important because of their economic problems that could have created political problems for the ruling party all the way to the next election.

But the amnesty indicates that the economy is more important than some people, at least existing taxpayers, and indeed also some rules. Why else would the architect of Naya Pakistan gladly dump his main campaign slogan from last time for a scheme that is only going to benefit individuals with suspect money?

But what about the IMF (International Monetary Fund)? PTI’s latest finance minister, Shaukat Tarin, surprised everybody by floating an election year budget one year short of the election. And then IMF surprised him and the party by picking it apart one expansionary policy provision after another; to the point that a mini-budget was needed, basically to take back all the promises from the original budget. And now the PM himself has done the same thing, more or less float another election year budget even though it’s not nearly budget time, so what the Fund has to say about it is going to be very important.

Broadly, one of three things could happen. One, the Fund will see the wisdom of these steps and green light them immediately. Two, it will have them rolled back, leaving some egg on the government’s face. And three, the government might have no intention of sticking to the EFF (Extended Fund Facility) any longer, even after making so many sacrifices for it, which means that this administration might not present the next annual budget either.

The implications of the last point are pretty ominous; because it would imply that the government has seen the writing on the wall and decided to fall on its own sword instead of letting things like no-confidence motions and long marches send it packing. And then the PM would take to the streets, just like he threatened to not long ago. But this time he’ll be counting on the people he’s tried to bring tax- and tariff-relief to, in defiance of promises made to IMF, and also a lot of “looters and plunderers” he promised to take to the cleaners the last time he campaigned for top office; not a lot of genuine, legitimate taxpayers that he claimed would become the embodiment of Naya Pakistan.

Copyright Business Recorder, 2022