KARACHI: “It is wrong to tout the China-Pakistan Economic Corridor as a game-changer,” said economist and chairman of the Islamic Banking Institute Dr Shahid Hasan Siddiqui on Tuesday. “No doubt it’d be great in terms of improving the infrastructure of Pakistan. But this project can only be a game-changer if we use it as an opportunity to invest in our own industries and make use of our existing resources.”

Dr Siddiqui was speaking at the department of international relations of the University of Karachi. His talk was based on understanding and examining the “vicious cycle of debt” Pakistan is mired in and its impact on the country’s economy. The event was organised by the Department of International Relations, Karachi University.

Dealing with multiple issues linked with financial debt, Dr Siddiqui explained how Pakistan continued to fall prey to tax amnesty schemes which impacted its financial future. He mentioned the tax amnesty scheme passed by the National Assembly in 2016, allowing defaulters to keep 97 per cent of black money. “According to the Income Tax Amendment Act 2016, people will be allowed to pay three to four per cent of tax and keep the remaining money. This is like a financial ‘Non-Reconciliation Order’,” he added. Compared to that, he said, India introduced 45pc tax deduction and earned $4 billion in tax returns.

He said that in order to move forward, Pakistan needed to enhance tax revenues which would in turn enhance national revenues. This would help in generating our own resources, which could be used for economic growth and enhance self-reliance to an extent. Dr Siddiqui said that if we only looked at some of the major issues pertaining to finances at the moment, including properties, bank deposits, stock exchange investments and compared it to tax returns, we’d instantly know where we stood.

“It is well within our control but by providing tax amnesty bolstered by the government, we are providing a platform for further tax evasion,” he added.

Speaking about CPEC, he said the project could be a game-changer for Pakistan only if it used the opportunity to “strategically invest in resources already available in the country”. He said allocating funds in the education sector and skill training could produce excellent results. He said reliance on loans and bills such as the Kerry-Lugar law should be avoided. “I called it a disaster back when it (Kerry-Lugar law) was introduced in 2009, but it was hailed by some parliamentarians, which is unfortunate. If we invest in our own industries, we’d reap a lot of benefits,” he added.

Published in Dawn, March 29th, 2017