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Letter from Pakistan: taxing the poor

Pakistan’s finance minister, Abdul Hafeez Shaikh, has an international reputation as a privatiser, writes Shehzad Arshad of the RSL. He has headed World Bank and International Monetary Fund teams charged with forcing the sell-off of telecoms, electricity supply, transport, aviation, banking and manufacturing in some 18 countries, including Argentina.

Now he is presenting a “reformed” General Sales Tax (RGST) as well as a Flood Tax Bill to parliament. He claims the old system is out of date and his proposals will mean increases only for the rich landowners and industrialists. But a sales tax, which includes 15 per cent charges on many basic food items, will ensure the working class and poor pay the price. In last 20 years, as Pakistan has become ever more integrated into the global economy with nakedly pro capitalist government polices, the working class and the urban and rural poor have been hit massively by sky-rocketing prices, unemployment and corruption.

The opposition – the Pakistan Muslim League (Narwaz) – is making some noise in opposing the RGST but has no real interest in blocking it. Rather they just want to get a share of the spoils.

The overall situation in Pakistan is worsening. Not only is the government imposing the RGST but they have also announced that electricity tariffs will be increased every two months. They are planning to privatise a number of state own companies. Whilst the federal government claims they have no money for higher education they have plenty for the so-called “war on terror” that is killing poor people in the tribal areas.

The Punjab government is planning to privatise the colleges. Over the last months thousand of students and teachers have been protesting against it. On December 10 and 11 student demonstrations in Faisalabad and other cities testified that – as in Europe – student militancy is on the rise.

The RSM is helping build this student movement, linking it with the resistance by working class and poor people to the growing economic hardship, despite the difficulties in squaring to right-wing forces that currently try to dominate it.

We need to convince students that the working class is their strongest potential ally, and we are arguing that radical students should join with the militants from the working class and the rural poor to build a revolutionary socialist party in Pakistan

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