Reformed GST

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Governments are inefficient. Specially ours. This is not to talk about the incumbent political government but the very machinery of the state itself. Though it is fashionable to attribute a lot of our woes on the lack of political will to solve them, one also has to factor in the limited capacity of the state in not just responding to challenges but also just performing a normal routine duty. Delays and lack of insight blights not just the inability of the state to evacuate a village before it is flooded but also a simple act of getting a telephone line installed at ones home. But whereas the hapless citizens of the country have no choice, the IMF will have none of it. The Funds insistence on a reformed GST was not met with the kind of follow up it had expected. The federation and the provinces have not been able to solve a dispute on the tax on services. The labyrinthine bureaus that deal with the matter are at it, working in Pakistan Standard Time. Well, the IMF has refused the sixth tranche of our loan program till we deliver.

IMF loans are the gift that keeps on taking. They dont have a particularly stellar record in the developing world. But instead of using reactionary rhetoric against them all the time, it would do us good to realize that we approached the Fund, not the other way around. That other horseman of the apocalypse, the World Bank, has also turned the heat up in demanding that power tariffs be raised to get out of the whole circular debt issue. The government insists in raising tariffs by over two percent every month for eight months; the WB says do it at once or two steps. To paraphrase Machiavelli mercilessly, give the people all miseries at once and the benefits piecemeal.

Whereas the WBs demand is going to be unpopular, the IMFs demand is not being met simply because of incompetence. It is high time we get our priorities right and get our act in order.