The idea of `Pakistan Monetary Fund`

Published January 4, 2010

DURING the previous regime a Pakistani economist (I forget his name) had come up with a very novel idea to revive our country's sinking economy.

The idea was so very simple and could have led to enormous uplift of the economy of the country and created millions of new jobs, but the then regime, with its myopic vision, didn't have the economic sense to implement it.

The same idea can be taken up by our present finance ministry to breathe life into our sagging economy. It envisaged the formation of a Pakistan Monetary Fund (PMF) through an open bidding, the top bidder getting a chance to establish PMF and run it, and the number two highest bidder automatically becoming the auditor of PMF, thus ensuring transparency and fair play.

The PMF's main role would be to sell and buy coupons, which would have the same value and importance as the rupee and would be interchangeable.

Coupons would be sold by the PMF for three months running, each year, i.e in February, March and April, in order to raise billions of rupees before the budget presentation in June.

These coupons could be sold from branches of the PMF or by young educated and unemployed youth at one's doorstep. This would create millions of jobs for the educated, unemployed youth, who could be paid in coupons or on a percentage basis on each coupon sold.

In the first month of the sale, one rupee would get you four coupons, in the second month three coupons to a rupee and in the final month two coupons per rupee.

In the remaining nine months, the coupons would be available in the open market, at one rupee per coupon, thereby raising the purchasing power of those who had the foresight to buy the coupons in the designated three months of sale of these coupons.

The government would have to allow the consumer to buy various commodities against both rupees and coupons, i.e. they would have the same value and would be interchangeable. For example, a litre of petroleum (market value Rs60) could be purchased with Rs40 in cash and 20 coupons.

Anyone, who would have purchased the coupons directly from the PMF in the first month of sale would hence get petrol cheaper than the one who had purchased the same coupons in the third month of sale.

This would encourage people to buy coupons in February, March, and April and would raise the funds in the national rupee reserves to mind-boggling figures. This way the black money market, which is being run as a parallel economy, could easily be brought into the real economy.

As it is, the government has so far failed to force hoarders of black money to bring it into the main stream, and there is no other way of doing the same in the foreseeable future.

This would encourage those people who are sitting on heaps of black money to whiten this money without any fear of getting caught, as coupons would be available at par with the rupee in the open market and sold without any questions asked.

Many would think that this would encourage crooks to earn more illegal money, but then what has stopped these crooks from amassing black money so far?

The government would finally have billions and trillions of rupees to finance its budget and to undertake mega projects in all spheres of life, creating more jobs and revitalising the extant

industries and encouraging new enterprises without having to borrow from the IMF, WB, ADB, etc.

We could finally be in a position to repay our existing internal and external debts and be on our way to becoming an Asian tiger.

DR JAMAL NASIR MEMON
Islamabad

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