Interview with Mr Hamad Rasool Bhullar – a researcher, trainer in finance, corporate governance and Shariah-compliant management
PAGE: Tell me something about yourself, please:
Hamad Rasool Bhullar: I am currently working in a large public sector organization. With respect to the financial sector, I have been involved in research and training for over 27 years and so far conducted over 300 trainings on different aspects of finance, business ethics, audit and corporate governance from basic concepts to professional applications in Projects Finance, Shariah compliant risk management, investment management and corporate governance etc.
PAGE: What are your views on the saving culture in Pakistan?
Hamad Rasool Bhullar: As a matter of fact, our nation is not trained for such culture causing huge wastage in general. Sometimes I feel we need to work not only for financial savings but also on many aspects of other sectors of savings, which is only possible with quality education and learning. A huge amount of wastage is not only occurring in the form of food and vegetables sectors but it is also causing opportunity cost to the nation. Financial saving culture can bring a huge impact on the GDP of our society, only if we compare it with our regional countries like India, Sri Lanka and Bangladesh. We are lagging far behind which is also one of the causes of losing international competitiveness. The problem is that, a major part of our economy is undocumented. We have the dilemma that we are even not able to collect the right data on savings and investments.
PAGE: What must the government do to enhance the saving to GDP ratio?
Hamad Rasool Bhullar: There are lots of actions and programs, which should be started and possible only if the documentation of economy is ensured. A low level of education is the major cause. Further, we need to add certain topics like economics and finance as compulsory courses, in the school education which would motivate savings.
PAGE: How could the financial institutions play a vital role for personal finance and the saving culture at the same time?
Hamad Rasool Bhullar: Financial institutions can play an important role for the development of savings and personal finance culture. Again the undocumented nature of economy leads to certain hidden transactions and non-disclosure of information, which causes limitations. Personal finance requires an accurate documentation, otherwise even the credit information of the individuals will not be available. This gap causes the cost of financing to rise to a major extent.
PAGE: Does our economy need higher savings to take off and achieve 7% growth?
Hamad Rasool Bhullar: The question is not just the 7 percent growth, it is the trade-off between the cost of financing and growth. Financial institutions will never make a loss but if their cost of operations rises since they will charge it from the available focus groups. The interesting steps are being taken by the Chairman FBR on this aspect by collecting data from different sources and making the CNIC as the “National Tax Number”. This is the main cause that some of the traders have refused to give their CNIC into transactions. If their volume of transactions is recorded, their income will be disclosed. The real picture of the economy will then become disclosed, making the financial planning at macro level become effective.
PAGE: What is your opinion on the consumption-oriented approach?
Hamad Rasool Bhullar: We as nation have always been a consumption-oriented people in general, but undocumented. The process of documentation will make the people realize the nature of consumption being undertaken. The consumption approach is good for growth if its fruits are rightly directed towards the taxation system. Where a huge number of wealthy people do not pay their taxes, the entire burden of the cost of law and order and government functions concentrates upon lesser number of tax payers who are either the salaried class or in a way cannot avoid documentation. This trend has caused a huge disbalance in the society in the past, which has to stop now leaving us with the only option if we want to grow as a nation.