Economy is too serious a business to be left to judges
Supreme Court has suspended the imposition of Carbon tax on petroleum products. This move has been hailed by many sections of a society as a relief given to the ordinary man by country's apex court. To counter that the President has issued an ordinance reimposing tariff on petroleum products.
I am someone who will be benefiting from this relief directly. However, I think this is a very dangerous precedence and has far reaching impacts not only for country's economy but its stability as well.
In purely economic terms, the move is likely to increase the twin deficit of Pakistan. On one hand, it leaves a revenue gap of PKR 122 billion and thus increases the budget deficit by the same amount which will need to be filled through borrowing. Secondly, and even more so, oil imports are 25% of Pakistan's total imports. With lower prices, the demand is going to be higher, thus leading to more imports and thus greater trade imbalance which a country like Pakistan with weak export base and fragile currency cannot sustain. More so, because of heavy reliance on international aid (in US$s) and volatility surrounding US$, at this juncture country can hardly afford any increase in trade imbalance. The choice for us is simple. Either we suffer some now, or we suffer even greater later. Should we once again go for the shortcut route or should we do some sound planning for future? This is an issue for us to think about.
This decision also sets a dangerous precedence on another front. It violates the principle of separation of state institutions. People elect Parliament which elects the Government. Government makes policies for its term (in this case 5 years) and then goes back to people for approval/ disapproval of its policies. Govt. announced the budget and Parliament unanimously approved it. This Carbon surcharge was part of that budget which Parliament endorsed. Judiciary has not right to intervene in day to day policy making and through his action Justice Chaudhary has crossed that sacred line.
It seems Justice Chaudhary has learnt nothing from last 2 years. He is adamant on getting the headline coverage and personal projection through populace decisions rather than the ones based on strict interpretation of letter and spirit of the law. It is not a business of Supreme Court to meddle with financial policy issues and it should remain this way. In their love for Justice Chaudhary or their hatred for the present Government, coupled with cheap fuel to burn, urban educated classes of Pakistan are treading a road that is dangerous and can be disastrous for the country and its economy.
I am someone who will be benefiting from this relief directly. However, I think this is a very dangerous precedence and has far reaching impacts not only for country's economy but its stability as well.
In purely economic terms, the move is likely to increase the twin deficit of Pakistan. On one hand, it leaves a revenue gap of PKR 122 billion and thus increases the budget deficit by the same amount which will need to be filled through borrowing. Secondly, and even more so, oil imports are 25% of Pakistan's total imports. With lower prices, the demand is going to be higher, thus leading to more imports and thus greater trade imbalance which a country like Pakistan with weak export base and fragile currency cannot sustain. More so, because of heavy reliance on international aid (in US$s) and volatility surrounding US$, at this juncture country can hardly afford any increase in trade imbalance. The choice for us is simple. Either we suffer some now, or we suffer even greater later. Should we once again go for the shortcut route or should we do some sound planning for future? This is an issue for us to think about.
This decision also sets a dangerous precedence on another front. It violates the principle of separation of state institutions. People elect Parliament which elects the Government. Government makes policies for its term (in this case 5 years) and then goes back to people for approval/ disapproval of its policies. Govt. announced the budget and Parliament unanimously approved it. This Carbon surcharge was part of that budget which Parliament endorsed. Judiciary has not right to intervene in day to day policy making and through his action Justice Chaudhary has crossed that sacred line.
It seems Justice Chaudhary has learnt nothing from last 2 years. He is adamant on getting the headline coverage and personal projection through populace decisions rather than the ones based on strict interpretation of letter and spirit of the law. It is not a business of Supreme Court to meddle with financial policy issues and it should remain this way. In their love for Justice Chaudhary or their hatred for the present Government, coupled with cheap fuel to burn, urban educated classes of Pakistan are treading a road that is dangerous and can be disastrous for the country and its economy.
Comments
These judges are just juggling the ball before the govt drops the catch... and it's only a matter of time till the rest of the batting order collapses too. Let's hope it's not TeamPakistan again :D
I would also support this tax if it is based on utilitarian grounds, for example in order to preserve the planet for then this is a progressive tax.
This said, I disagree with the argument that the common man must suffer for the greater good of the country or the government. Common people don't really understand or even care about a budget deficit or economical jargon like "trade imbalance"...They want a free market and view taxation as a conflict of interest with the government. An uprising against such a tax is sure to happen if people do not benefit from it in a utilitarian way. I will rebel and resort to stealth if I am pressed too hard!
I don't know much about the politics of Pakistan but on a purely humanistic ground, this money that they pay as tax can buy milk for their little ones and why should they embrace a legislation that is stealing the harmony of their children?