PAKISTAN REVIVAL BONDS

MIKE BAXTER

Ref: LETTER TO EDITOR Date: September 29, 2000

PAKISTAN REVIVAL BONDS

The Chief Executive during his recent meeting with traders in Lahore disclosed that the government needed around Rs fifty billion to pay off employees of nationalized corporations under the Golden Handshake Scheme so that the "hemorrhaging of government money" is sealed. Alas, he reported, that the government does not have the money nor has any idea where it would come from. He looked towards the businessmen to be the saviors by paying more and more taxes.

The General is absolutely right that this bleeding must be plugged immediately. He also is correct that money is so short in supply. He also knows that it is very difficult in these hard times to squeeze taxes out of he business community. Thus, there is the imperative need to issue PAKISTAN REVIVAL BONDS. The prime features of these Bonds are:

Would be issued in lieu of cash under the Golden Handshake Scheme to the workers of government corporations and nationalized industries.

Would not be sold by the government thru any banks or savings institutions but only used as payment instead of cash.

Would be bearer bonds and the workers may either keep them for profit in the same manner as the Saving Certificates, or sell them for cash to those who need the PRB as investment.

Would not be time-bound and thus the government could redeem them at anytime it wants. In fact, the government may allow these to be in circulation for as many years as it desires.

Would be profit-based that would be paid once a year at 20% per annum, with no deduction for income tax, Zakat, or other surcharge.

Would be a great saving instrument for widows, senior citizens, retirees, etc.

Would be used to discharge governmental obligations like paying taxes, duties, penalties, etc. The government may save capital cost and remove it from circulation if received in this way.

Would be utilized by businessmen and others as payment for goods and services and would be accepted as a quasi legal tender.

Would be guaranteed by the Government of Pakistan and thus a safe instrument.

The government may want to extend the utility of PRB and issue them for Sales Tax refunds, etc. It may be issued to retire overdue domestic debt. The government must set an initial target of PRB worth Rs 100 billion so that nationalized companies employees are paid immediately and the losses are frozen. Of course, the government would have to pay Rs 20 billion as profit, but the continuous losses, the unnecessary payment of wages, salaries, and perks to idle workers, and the inaction in the privatization process would cease, and the country could forge ahead on the avenue of prosperity. Now, who would convince Sena Ekin of IMF?

Sincerely: MIKE BAXTER

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