KARACHI: Economist Dr Kaiser Bengali said on Wednesday Pakistan has become a rudderless state that cares least about its poor citizens.

Speaking at a panel discussion on business confidence in Sindh, Dr Bengali said provincial and federal governments have done away with long-term development strategy, leaving the vulnerable segments of society at the mercy of the privileged class.

Elaborating on the purpose of taxation, the former adviser to Sindh and Balochistan governments said taxes are levied to ensure the regulation of the economy, redistribution of wealth in society and smooth operation of government.

“The only purpose of taxation in Pakistan seems to be housekeeping as the state has given up on the objectives of wealth distribution and regulation of the economy,” he said.

Regulating the economy through taxation means changing tax rates on an industry to encourage or discourage investment. As an example, he referred to the existing high duties on paper imports in the absence of a tariff on book imports. This is against the time-tested logic of importing raw materials without duties while restricting the imports of value-added products in order to promote local production, he said.

“The result is that we now import Urdu books from Malaysia,” he said.

As for the redistribution of wealth in society by means of taxation, Dr Bengali said the state has long abdicated its responsibility towards the poor. “There has not been a single public housing scheme for the poor since 1977. Compare it with regular newspaper ads promising mansions with swimming pools developed exclusively for the rich,” he said.

Speaking on the occasion, business journalist Afshan Subohi said the business community does not trust the Pakistan Peoples Party government because of its deep-seated bias against the party that nationalised private businesses in the 1970s. The poor quality of governance does not bridge the trust gap. “Lahore feels like another country. For mobilising investment, the Sindh government needs to improve its performance,” she said.

Replying to Ms Subohi’s assertion, Sindh Board of Investment Chairperson Naheed Memon blamed the “lack of homogeneity” in Sindh for the current state of affairs. “The PML-N does not face the kind of political complexity in Punjab that the PPP faces in Sindh,” she said.

Sindh Governor Muhammad Zubair, former provincial finance minister Asad Ali Shah and Overseas Investors Chamber of Commerce and Industry Secretary General Abdul Aleem also participated in the panel discussion, which was jointly organised by the Sustainable Development Policy Institute and Centre for International Private Enterprise.

Published in Dawn, March 23rd, 2017