INTERVIEW WITH SHER AFGAN MALIK, FORMER MD PIA

KHALIL AHMED
(feedback@pgeconomist.com)

May 2 - 15, 2011

PAGE: TELL US SOMETHING ABOUT YOURSELF.?

SHER AFGAN: I grew up in a village in Pakistan. After completing high school education, I moved to Karachi for further studies. I did graduation from Karachi University in 1965 and then completed the Cost & Management courses offered by Institute of Cost and Management Accountants of Pakistan (ICMAP) in 1967. I became an associate member of ICMAP in 1967 and a Fellow member in 1972. In July 1967, I moved to Saudi Arabia to work with an American company. Thereafter, I was involved managing various commercial, industrial and services sector activities spanning over a period of 30 years. Then I returned to Pakistan and worked with Pakistan International Airlines as Managing Director. Later, I was elected twice to the National Council of ICMAP and served there for a period of six years. During this period, I served as President of ICMAP for five years and also served as chairman of several important committees. Thereafter, I also served on the Board of Karachi Stock Exchange, and am still serving on various other boards of important institutions. I was also instrumental in the formation of Institute of Corporate Governance under the supervision of Securities and Exchange Commission of Pakistan and served as its founding Director.

PAGE: YOUR VIEWS ABOUT ECONOMIC PERFORMANCE OF PAKISTAN.?

SHER AFGAN: Pakistan's economy has been passing through a turbulent period, mainly because of law and order situation due to war in Afghanistan and the resultant unrest in tribal areas. Earthquake of 2005 in the northern areas and devastating floods of 2010 unleashed severe damage to the economy, as well. After many years of military dictatorship, the current democratically elected government is struggling to make both ends meet. Although, there are questions about the performance of this elected setup, but they have managed some major changes in the constitution, devolution of some functions to the provinces and completion of National Finance Award after a gap of many years. The biggest challenges facing the economy are security, inflation, population growth, education, financial corruption, and overall poor performance of the government. These are huge challenges and authorities must make every effort to tackle these problems on a war footing. Long-term plans must be prepared and implemented so that there is a clear vision about the progress to be achieved in a sustained manner.

PAGE: WHAT SHOULD BE DONE TO DOCUMENT THE ECONOMY?

SHER AFGAN: Documentation of the economy is extremely essential and must be completed as soon as possible. However, we must know that it is a major cultural change and will take many years to accomplish. No development plans can be properly made or executed without full knowledge of the economy, which is not fully documented. Without documentation of the economy, every development plan will have to be based on estimates or guesstimates and it will be like shooting in the dark for the planners and results will be disappointing. Tangible incentives in the shape of tax relief and other benefits must also be offered along with penalties in various forms. Government machinery must implement this policy in a transparent and honest manner so that results can be visible. Once government achieves full documentation of the economy, it will greatly help in achieving other goals such as tax collection and in implementing the economic policies.

PAGE: WHAT IS YOUR OPINION ABOUT INCREASE IN EXPORTS?

SHER AFGAN: Pakistan has been experiencing large trade deficits for a very long time. Government policies have created import culture and little efforts were made to promote exports. Export Promotion Authority and Pak missions abroad must work hard to promote Pakistani products and guide business houses in finding new markets and customers. Massive publicity campaigns must be carried out by public institutions as well as private enterprises in the foreign markets for introduction of Pakistani products. Regular export exhibitions must be held in various parts of Pakistan and export promotion authority must make efforts to encourage Pakistani exporters to display their products in foreign exhibitions held around the world. We must have a reasonable trade surplus every year so that we can pay foreign loans in a planned manner.

PAGE: WHAT SHOULD PAKISTAN DO FOR THE PROMOTION OF TAX CULTURE?

SHER AFGAN: Human beings do not want to pay taxes voluntarily and would make every effort to avoid or lessen the burden. History has also taught us that our forefathers were not paying taxes, so why should the current generation be burdened with these bills. Efforts must be made to publicize the importance of paying taxes in the national interest and it must be shown to the people that their tax funds are utilized properly and for the benefit of the country. General feeling among the masses is that federal board of revenue officials are very corrupt and they are easily willing to help people evade taxes so long as they can get some share for their pockets. Tax machinery will have to be made very effective so tax proposals are honestly implemented and defaulters are punished properly. Carrot and stick policies will have to be honestly implemented so that taxpayers are aware of the benefits of paying taxes as well as dangers of tax evasion.