Th e Government of Pakistan’s Role in MBCS
MBCS requires the wholehearted endorsement of the Government of Pakistan, and people must recognize its role as the sponsor of MBCS. Laws must be put in place to establish MBCS and a system for distributing coupons, collecting revenue, and overseeing and administering the scheme. Th e government would also play a key role in setting policy.
Each year, the Finance Ministry would determine the total coupon value and the denominations and terms and conditions for coupon use, and it would take into account the number of coupons already in circulation. Th e coupons would have a face value representing rupees, and it would be necessary to exercise monetary controls to prevent infl ation and keep the supply within reasonable limits that neither hinder activity nor cause a reduction in a coupon’s face value. Th is is already a common part of fi scal policy.
In essence, the government would authorize the issue of coupons at a value approximating the needs of the state budget and the anticipated level of economic activity. As prediction is an art and not a science, budget surpluses and defi cits arising from windfalls and shortfalls would have to be managed in the medium- to long-term (i.e., through the next year’s budget or through emergency mid-term budgets). Th e government would have to control MBCS policy and strategy because it is a state revenue system. It would also need to ensure that MBCS remains relevant in concept, objectives, and implementation.
Th e following criteria will ensure the ongoing success of MBCS:
• MBCS must be accessible in all parts of the country and for Pakistani expatriates abroad.
• It is necessary for the system to continually make goods and services available at realistic prices.
• Th ere must be real discounts for using coupons.
If these issues are always addressed, the system will take care of itself because demand for coupons will always exist.
Th e Implementation Strategy
Th e following is not intended as an exhaustive description of implementing the system. Instead, only the basic features of implementation are discussed.
Prior to the launch of the scheme, the Government of Pakistan must tender contracts that cover the following tasks essential to the launch and administration of MBCS:
• A card/coupon design, security, and manufacturing contract.
• An audit contract.
Th ese contracts will form the structure for MBCS in Pakistan.
Th ere are certain activities that must be performed in order to make the scheme a success:
• Publicizing and marketing the system throughout Pakistan.
• Setting up the coupon infrastructure (i.e., logistics) so the card/coupon system is available throughout the marketing area.
• Printing and manufacturing coupons.
• Entering into contracts with coupon vendors.
• Gathering, consolidating, controlling, and accounting for the revenue received from the sale of MBCS card/coupons.
It will be necessary to simplify the administration and revenue-gathering functions in order to ensure MBCS is a success. Th erefore, it may be best to assign all of the roles set out above to one particular organization. However, there are also benefi ts to awarding the above contracts to diff erent, competent organizations in Pakistan.
It is assumed that a major Pakistani bank or banks can play management/administrative roles in the nationwide structure gathering revenues from card/coupon sales and consolidating them into a national interest account made available to the government. A bank that administers MBCS will be given a percentage of the net proceeds. Th is involves no cash outlay by the government.
It may be considered prudent to hand the administration of the coupon system to the same bank, provided it has a network of branches with access to the anticipated source of revenues. Th is will ease administration costs and enhance accountability.
In order to make coupons available to the largest number of people, it will be necessary to recruit coupon vendors. In order to cover the entire population of Pakistan, it may be necessary to employ as many as 2 million coupon vendors in cities, towns, and, in some cases, villages. Th is would improve the employment situation among the many educated Pakistanis who are currently unemployed.
Each coupon agent will be employed on 10% commission bases, so PKR100 worth of coupons will be sold for PKR90. Th ese agents will be registered with PMF and pay PKR5,000 a year, which will be used by PMF to establish a network of offi ces and modern communications throughout the country. It is estimated that at least 10,000 offi ces will be needed to serve the coupon agents. Each coupon agent will be required to sell PKR300,000 a month, and this can be increased according to demand. An agent who cannot pay the PKR5,000 fee will be required to sell PKR150,000 until he/she is able to pay the registration fee.