South Koreans came to attribute much of their success to traditional values. By this, they mean hard work, discipline, respect for learning, frugality, and the importance of family, the emphasis on education, the high esteem in which civil servants were held that attracted talented technocrats to serve the state, and even to the willingness to delay gratification that resulted in the high savings rate that characterized the period of rapid economic growth.
Many scholars found it necessary to look at specific development policies and historical contingencies to explain the economic transformation of South Korea, including the roles played by land reform, by educational development, and by the ways the country achieved technical transfers.
On the other side, almost all financial indicators in Pakistan have seen a downward trend. The growth rate fell by almost 50 percent from 6.2 percent to 3.3 percent. It is expected to go down even further to 2.4 percent next year, which will be the country’s lowest in the past 10 years.
The Pakistani rupee has lost a fifth of its value against the dollar since the beginning of this fiscal year. Inflation is expected to hover around 13 percent over the next 12 months, reaching a 10-year-high as well.
Then there is the issue of the ever-increasing debt, which eats up some 30 percent of the budget every year. Pakistan continues to take out loans to be able to cover repayments of past borrowing. It recently signed yet another deal with the International Monetary Fund (IMF) for a bailout package worth $6bn.
The country has low sources of revenues and high non-development expenditures, which is a recipe for a financial disaster. For decades, the Pakistani authorities have been unable to establish effective tax collection practices. Currently, only one percent of Pakistanis pay their taxes and the country has one of the lowest tax-to-GDP ratios in the world.
Successive governments have avoided imposing stricter controls because of widespread corruption. In fact, it is cheaper for them to bribe than to pay their dues. Thus, the tax burden in Pakistan falls overwhelmingly on the poor who pay in various indirect ways and who already struggle to make ends meet. Currently, a third of the nation is living below the poverty line. Pakistan May follow the footsteps of South Korea in technology and industrialisation.
Now, those in power and those who enjoy economic privileges must realise that this status quo is unsustainable. The only way out is to implement a just easy tax system alongcancellation of large currency notes like thousand and five thousand.
If Pakistan is to avoid the looming economic disaster, it must revise current spending and prioritise expenditures that will actually generate social and economic development and uplift the poor, not just the civilian and military elites.