Press Releases & Statements
|
|
Pakistan Needs the Khilafah to Save it from Economic Disaster |
|
|
|
Leaflets
|
|
Friday, 19 December 2008 |
Pakistan Needs the Khilafah to Save it from the Economic Disaster Created by an Intellectually Bankrupt Secular Leadership.
For the people of Pakistan, the last sixty years has played out like a recurring nightmare. The dreams of those who sacrificed so much at the time of partition to live under Islamic rule have yet to materialise. The problems of poverty, disease, unemployment, corruption, and inadequate infrastructure have increased and the people have lost all faith in the government.
Past and present governments, whether military dictatorships or secular leaderships have failed miserably in providing basic needs and economic security for its people as well as investing sufficiently in the infrastructure of the country. For those who believed that President Musharraf created a turnaround in Pakistan’s economic fortune, the current economic disaster in which the country stands, only a few months following his removal is proof enough that any economic growth was not based upon a solid foundation. It was not strong economic principles that propelled improved business and reduced debt in the country but rather Western aid and external remittances – money coming into the country from Pakistani’s working abroad. Musharraf’s time in power has been described as “Window dressing” of the economic situation by various economic analysts. Furthermore, these “attractive economic figures” did very little to ease the burden of poverty facing millions in Pakistan. Sakib Sherani, chief economist at the ABN Amro bank in Islamabad commented, “There has been a disconnect between the headline growth numbers and the welfare of the average Pakistani.”
Today, the foreign debt of Pakistan stands at $44.5 billion and domestic and foreign borrowing has increased by 100% in the past 3 months to $2.21 billion. The Pakistan government’s interest payment on its debt even during President Musharraf’s so-called ‘economic good times’ was around ¼ of government revenue. This is money diverted away from investment in education, healthcare and poverty alleviation. The consequence of dependence upon foreign capital has left the country at the mercy of foreign investors and governments who have increasingly withdrawn their money from the country due to the lack of security and uncertainty in the future of the state. This has left the economic status of the country in meltdown.
The country faces shortages of wheat flour used to make roti – the staple food for the country – and that which is available has doubled in price in the last year as have other essential food items such as rice and milk. The poorest 20% spend 50-58% of their income just to buy cereals. Some news reports describe families surviving on mouldy crusts of bread dipped in water. Increasing numbers are turning up at food centres set up by charity organisations. According to Reuters (October 24th, 2008) Abdul Sattar Edhi, head of one of Pakistan's main private aid groups, the Edhi Foundation said, "If we don't tackle the problem, we'll start finding dead bodies. We'll find entire families dead from hunger." Another charity, the Sailani Welfare Trust, says more than 30,000 people come to its 25 free food centres in the city of Karachi every day. Government figures describe 25% of the population living below the poverty line, on $1/day. However, an Oxfam report produced this year states that 77 million face severe poverty - out of a country population of 170 million.
Unemployment is at an all time high and cheap Chinese imports are flooding the market reducing domestic industry. Professionals like engineers or IT specialists settle for work at fast food outlets. Average urban wages are $2/day and 50% of the urban population lives in slums and squatter settlements. Many parents have to decide whether to send their children to school or buy food and pay rent.
Although the current economic crisis facing Pakistan is dire, its cause cannot be placed solely at the doorstep of the current incompetent government but has its roots in decades of incompetent leaderships that structured their economics upon flawed Western principles, relied heavily upon foreign aid, and were plagued with corruption. They failed to see the true economic potential of Pakistan if only organised according to Islamic economic principles implemented by the Islamic ruling system, the Khilafah state as is discussed in part below:
(a) Utilization of Resources:
Pakistan’s resources and therefore its estimated wealth are great. It has the world’s second largest coal reserves, a large natural gas reserve (765 billion cubic metres), and the fifth largest copper and gold reserves. However, instead of investment in exploration, extraction, mining and processing of these assets, previous and current Pakistani governments have chosen to effectively sell off these resources to foreign companies under the banner of privatization. Karachi Electric Supply Company and Sui Gas North and South pipelines have been privatized, the consequence being that revenue from these assets are directed into the pockets of foreign companies and governments rather than used to build the infrastructure of the country and feed and house its people. In addition, rather than becoming “fuel-independent”, Pakistan today is dependent upon oil imports from the international market that consume a large part of the country’s annual revenue, especially when oil prices rise – money that could be spent in investment in education, healthcare, domestic industry and developing the infrastructure of the country.
In contrast, within the Khilafah state, assets such as oil, coal and gas as well as large mineral resources are public property, owned jointly by all citizens of the state. They are prohibited from being privatized or owned by any individual or company. The Prophet(saw) said, “People are partners in three (things): water, pasture and fire.”
Therefore the benefit from these assets is shared and enjoyed by the public as a whole and their revenue spent to build the infrastructure of the state, e.g. schools, universities, hospitals, roads, provision of clean water as well as to cater for the needs of the poor and other public expenses. Furthermore, since the Khilafah state is built upon the premise of being self-reliant and self-sufficient, it would invest appropriate funds to extract and process all resources to achieve this objective. This would be in contrast to relying on foreign imports of fuels that lays the economics and politics of the country open to foreign manipulation and intervention, and the economic welfare of the people at the mercy of global fuel prices.
(b) Land and Agriculture:
Pakistan is one of the most fertile countries in the world, rich in arable land. Prior to partition with India, the area of Punjab was known as the ‘breadbasket of India’ as its produce could feed the whole country. It is the 5th largest rice exporter, the world’s 5th largest producer of milk, the 4th largest producer of sugarcane and the 9th largest producer of wheat. Yet today, millions of Pakistanis are starving. Additionally, it has manpower - Pakistan is a populous nation of approx 170 million – and many millions are skilled in farming and agriculture. Despite this, prices of essential food items such as flour, sugar, rice and milk are soaring and beyond the reach of many. In addition, prices of agricultural products such as seeds, fertilisers and farming utensils are also sky high.
The food crisis facing millions in Pakistan cannot simply be explained by the mismanagement of food production and export of previous and current governments, although undoubtedly this is a large contributing factor. For example, Pakistan is usually self-sufficient in wheat but this year the government over exported its wheat and was then forced to import wheat from the international market at a time when there is a world shortage and therefore at very high prices.
Various non-Islamic agricultural policies and laws implemented over the decades shoulder the main responsibility of creating the regressive agricultural climate that has led to the current situation. For example, in the country’s long-standing feudal system, landowners (zameendaars) possess vast quantities of land, some of which they pay farmers to cultivate for a very small wage, while the rest remains unused. Other vast areas of land simply remain unowned, unfarmed and therefore idle - a wasted potential. In contrast, an Islamic agricultural principle applied within the Khilafah is that land which is unused for 3 years is taken away and given to more deserving cases who are able to cultivate the land. The noble companion and 2nd Khalifah of the Muslims, Umar bin al Khattab (ra) said: “Whoever neglected a land for three years without using it and another person came and used it, it becomes his.” In addition, the Prophet(saw) said, “Whoever cultivated a dead land, it becomes his.” The state would offer grants or interest-free loans to individuals who may want to embrace this opportunity but may lack the funds. Hence the farmer would own the land he cultivates, be able to feed his family and sell his produce in the market, producing an income for himself as well as increasing the agricultural yield and economic revenue of the country.
Furthermore, governments over the years have applied the general sales tax to food items as well as agricultural products, greatly increasing their prices and the burden on the people. In contrast, the taxation system under the Khilafah is specific, fixed and not open to the introduction of new direct or stealth taxes according to the economic situation of the state. There is no concept of income or general sales taxes within Islam. The taxes collected are the Kharaj land tax, the zakat, and the jizya (payed by non-Muslim citizens of the state). The tax is taken from that which exceeds the expenditure of the people. The amount is not evaluated with a specific amount for all the people rather it is estimated for every person according to his standard of living. In the face of emergency situations such as natural disasters or when the central treasury lacks the funds to spend on those issues which are an obligation for the state to spend upon such as the poor and needy, education and healthcare, the wages of public servants such as judges and teachers and the Jihad and building of a strong army, the state is permitted to issue an emergency tax. However, this is taken from the Muslims who have wealth surplus to the satisfaction of their basic needs and luxuries. This is due to the saying of the Prophet(saw), “The best Sadaqah is that given out of richness.” The state is not permitted to impose other taxes upon the people as this is an injustice prohibited by Islam and about which the Prophet(saw) said, “The tax-collector will not enter Paradise.”
(c) Economic Independence:
Rich in resources, rich in people and rich in potential, Pakistan has the potential to become self-sufficient. However, governments past and present have demonstrated a distinct lack of economic vision for the country. They have consistently turned to foreign nations or institutions such as the IMF, the Paris Club or ‘Friends of Pakistan’ either for aid, interest based-loans or for the management and restructuring of their economic system. Such help has naturally come with various political and economic conditions that have caused a dire situation for the country. The US has given Pakistan millions of dollars in exchange for doing its bidding in the ‘War on Terror’ – alias ‘the War on Islam’.
Today, the foreign debt of Pakistan stands at $44.5 billion and domestic and foreign borrowing has increased by 100% in the past 3 months to $2.21 billion. The Pakistan government’s interest payment on its debt even during President Musharraf’s so-called ‘economic good times’ was around ¼ of government revenue. This is money diverted away from investment in education, healthcare and poverty alleviation. The consequence of dependence upon foreign capital has left the country at the mercy of foreign investors and governments who have increasingly withdrawn their money from the country due to the lack of security and uncertainty in the future of the state. This has left the economic status of the country in meltdown.
Rather than breaking free from the hold of these predatory lending countries and institutions, the current Pakistani government illustrates its incompetant and disastrous leadership by continuing to turn to them. The government is now seeking a multi-billion bail-out from the IMF to prevent it defaulting on its debt. Such IMF loans come with high rates of interest and strict political demands. Amongst the demands the IMF is making to Pakistan are the need to redirect expenditure from confronting India with respect to Kashmir, and "refocus its military strategy on fighting the (Islamic) militants". Furthermore this bail-out will be linked to deep government spending cuts and tax increases that will hurt the poor further.
In contrast, the vision of the Khilafah state is to be self-sufficient. Borrowing from foreign countries or international institutions is not allowed within Islam because such loans would not be except with bank interest or with associated conditions. Interest is prohibited by the Shariah laws and the imposition of conditions gives the lending countries and institutions control over Muslims and makes the will of the Muslims subject to the will of the lending countries and institutions, which is also prohibited by Islam. Allah(swt) says, “And Allah will never give the unbelievers any way (of authority) against the believers.” [TMQ 4:141]. Therefore the Khilafah state will reject all foreign intervention and ‘help’ in its finances. It encourages domestic industry, thus reducing imports, promoting exports and creating employment. It has the political will and sound economic principles and laws to utilise all its assets in a visionary and effective manner to become economically independent.
CONCLUSION:
Pakistan does not need new or recycled presidents, primeministers or governments to solve its economic crisis. Both military dictatorships and secular democracies have demonstrated flawed economic principles, corruption and intellectually bankrupt economic visions in managing the affairs and wealth of the people. Pakistan needs a radically new leadership and system to lift it from its current economic disaster and direct it towards a prosperous financial future of economic stability and security for its people. This new leadership and system is the Khilafah, based solely upon the Islamic Shariah laws. It is this system alone that is based upon the ethos of sincerely looking after the interests of Islam and the needs of the people in addition to providing a sound economic structure, able to weather the storm of even global economic crises.
Narrated by Ahmad and Al Bukhari from Abdullah bin ‘Umar who reported that he heard the Messenger of Allah (saw) say:
"The Imam(Khalifah) is a guardian, and he is responsible for his subjects."
Trackback(0)
|
|
|
TrackBack URI for this entry
Subscribe to this comment's feed
Show/hide comment form