The article is authored by Engineer Sharique Naeem
The speech on the budget leaves one dumbfounded as to the utter and hypocritical oblivion of the rulers to the plight of the masses. With a smile on the ending note, the only benefit announced for the masses was a reduction of FED on soft drinks to 6 percent.
The finance minister managed to state the loss due to floods, however not a single word was uttered on the loss of $68 billion, that Pakistan has suffered as a result of cheer-leading America’s war of terror. Moreover, the minister’s claim of boosting of exports, failed to take account the depreciation of the rupee against dollar.
Apart from the cheaper soft-drinks, the only other relief for the masses at large was just a promise, ‘we will try to control the price hike’, ‘and provide relief through utility stores’. Even a below average student of economics knows that price hikes cannot be controlled only through utility stores.
The salary increases for only a segment of the society, i.e government servants, too is of little worth, as this increase is equally cancelled by the ever-growing inflation.
The rulers have not only failed to give any economic solutions, but what is worse is that they have even failed to recognize the real root economic problems.
Pakistan at present has all the ingredients to be a vibrant economy. It is rich in mineral resources, including copper, iron and gold which can serve as a fodder for industries. Being a nuclear power, and having vast reserves of coal, it has the ability to not just solve its own energy problems, but also export energy. The fact that wind corridor passes through Pakistan, coupled with the country’s geographic location that provides ample sunlight, it has potential to tap into renewable energy sources. Also, it has a lot of fertile land, presently unused that can be cultivated to potentially feed a population double its current size.
It doesn’t takes much to realize that Pakistan is potentially an economic giant, which has been deliberately kept to its knees. At the heart of Pakistan’s failure, is the flawed capitalist economic system, which needs to be uprooted.
Pakistan can break free from the shackles which keep it on its knees, by replacing the present capitalist system and replacing it with the comprehensive Islamic system, embodied in the Caliphate.
However, this prerogative due to certain misconceptions makes one think, that a Caliphate would be a naive entity, which will isolate itself from the world, and hence lose on the economic front right from its initiation. This however is a myth, rooted in certain misconceptions.
A brief look into the economic policies incorporated by the Caliphate, makes one appreciate the economic depth of its unique laws. A Caliphate, once established, will immediately take the following steps.
It will boldly and straightforwardly nullify interest-based contracts with imperial tools, such as the IMF and the World Bank. A clear message will be sent, that the state will no longer pay the interest on the loans which these institutes gave – knowingly – to corrupt politicians, who never utilized it on the masses in the first place. The state will expose the exploitative nature of these institutes, this will encourage other countries, already grinding under the pressure of IMF and WB, to consider replicating the steps of the Islamic state, hence this will diffuse the focus of any possible backlash from these institutes.
The state, will immediately unplug its currency from the FIAT model, and peg it with gold and silver. And it will quickly initiate projects to extract its gold reserves. This step too will put dollar on the back step and predispose it to a position of weakness, for fear that other countries, especially the Arabs, may too seek to abandon the FIAT model in favor of the gold model.
Further, the state will not just develop but deploy – by importing if required – technology and expertise to solve its energy crisis. Pakistan’s potential for wind energy according to AEDB is 50,000 MW (In contrast USA’s installed wind capacity is 25,000+ MW and India has 9,600+ MW as of 2008). Moreover it will seek to fully move forward with hydro-power projects by constructing dams and utilize the Thar coal on a comprehensive level, and not just an experimental level, as currently being pursued by the government. All this is swiftly possible only in a Caliphate, because the ruler of an Islamic state seeks advice on these issues from technical experts, and the Caliph makes decision, without being locked in by having the need of approval from the general elected representatives. This stands in stark contrast with the present system of democracy, where swift decisions are stalled by the bureaucratic procedure.
Also, amongst the economic steps, would be to put an end to the concept of fractional-reserve banking. The state will put an end to the parallel model of economy, i.e. one real and one artificial, and hence shift the investment from artificial economy (stock exchange etc) to real economy. A zero-interest in financial institutes would also imply that investors look towards business, trade, and industrialization instead of simply investing in banks for the sake of earning interest.
Moreover, the state will put an end to the shallow and flawed policies of privatization. Islam’s economic system designates resources such as gas, oil, electricity as public property. Hence the state cannot privatize them, nor profit from them. In fact the state is obliged to manage these resources and provide them to the masses on cost basis. This will result in steep dip of the energy costs to end users, and hence it will act as a catalyst for our industries.
It is also imperative to note that, the Caliphate’s economic system will put an end to oppressive taxes such as GST, VAT, income tax etc; and implement its own revenue-generation system, given by Islam e.g. Ushr, Khiraj, Zakat etc. The agriculture tax of Islam alone will generate sizable revenue.
It is also of utmost importance to note here, that these economic policies are not executed in isolation. In fact they are implemented as part of the comprehensive systems of Islam, which includes: Ruling system, Judiciary system, Social system, Economic system, Education policy and Foreign policy, all tightly knit together in the system of governance, called Caliphate. Today, to save Pakistan from the quagmire of problems that surrounds it; it’s the need of the hour that our intelligentsia – Journalists, Generals and other intellectuals – seriously look into this alternative that Islam has to offer.