Summary of Mutual Benefit Coupon System (MBCS) by Dr Niaz Ahmed-The Ultimate Solution For World Economic Crisis
Dr Niaz Ahmed Khan FRCS, PhD has developed a new financial instrument which will be much more valuable than the bonds or the treasury bills government sells in the open market to raise much needed funds to run the country. These are all interest-based instruments and can only be used by institutions. The instrument I am proposing is without interest and will be used by everybody to purchase goods and services in the government and private sector resulting in up to 66% discounts. This is why these will be massively bought up front in large amounts in the shortest period of time of one month to run the country for at least a year and much more by the end of the year.
Introduction to MBC System
The world is facing many challenges with no solution in sight. The main cause of all these ills is the poverty. Float bonds which can be used by everybody rich or poor and are not debt to the state so there is no question of interest.
How: We take the example of Pakistan.
Pakistan borrows money by selling treasury bills and the interest-based bonds. The suggestion is to sell these bonds on non interest basis.
Buy all goods and services under Government control with these bonds and these bonds will replace Rupees with bonds.
10 million duties waved off.
RS.1 billion prize draw from the bonds held by the public every day.
Summary of MBC System by Dr Niaz Ahmad Khan-Economic Revolution of 21st Century
One rupee will buy 6 bonds on the condition that the amount should be RS.100000 or multiple of it paid to the government and the government will issue 600000 bonds. Fewer amounts will get the rate of five, four and three. This MASSIVE discount period is only for first month at the start of the implementation of this system. In the second month the rate will be 5 and in the third month the rate will be 4 but the rate of 3 will apply to subsequent months for the same amount.
Where These Bonds Will Be Used of MBC System by Dr Niaz Ahmed Khan?
All state-controlled services and commodities.
Example: A bill of (any service or commodity) RS.100 can be paid with 200 bonds and there will be no exception to this rule. A net discount of 66%. A simple formula will apply: Total bill in Rupees x2 is the number of bonds surrendered. Price in bonds will not be less than the cost price but without the direct indirect taxes and the duties which are added to the present cost to make it very expensive.
It will attract at least 30 to 40 million people to take this opportunity as early as possible. And if one is sure of making 100% profit within 30 days there will be many more that will help themselves.
Result: Government gets at least Rs. 3 to 4 trillion Within a very short period of time of few days and much more in the rest of the year. This is not a debt as state has sold bonds (Commodity) which is an alternative currency and do not carry any interest.
One immediately thinks who will bear the loss and this loss to the state will not be more than total year budget which it collects in one year with all the taxes and the duties but the bond price is simply a cost price without any kind of tax or duty. So, there is a net gain of approximately 3 to 4 trillion Rupees within a short period of time. First floodgate of money has been opened.
Who Will Sell These Bonds of MBCS?
State will float tenders to select a private agency (PMA) Pakistan Monitory Fund, Just a name given to this organization with the lowest bid where as second, third and fourth bidders will be auditors of PMA. This agency will employ at least 10 million unemployed on 10% commission basis and without any salary. These agents will have to pay Rs. 5000 as an annual fee to PMA in order to build the infrastructure for the sale of bonds. Agents’ quota will be Rs. 300,000 per month or they will be allowed to sell their whole year quota in one day or in a month. This will only materialize if the agent shares his commission with the buyer.
The Greater the share of commission, the quicker the sale. The investor or a buyer will sell these bonds at the same rate of 6 per Rupees and his bonds will sell like hot cakes every day as there is no condition of the amount of money to purchase the bonds. In this way even the poorest person will get the same or near the same rate as the investor earns a profit from the commission which he takes from the agent and makes almost 100% profit by only investing Rs. 100,000. He will sell these bonds repeatedly and will keep almost 6% profit every day till the demand lasts. Now think how much funds state has accumulated. Much more than few years budget in matter of only one month.
Flood Gates of Money and Turning Point
This is the second flood gate of money and there are still four more floodgates of money yet to open. So, at the end of 30 days or even much earlier the government declares tax free country forever. With the removal of all kinds of direct and indirect taxes and duties the price of oil electricity telephone and of all other services under government control is now almost 66% less than before as these are being purchased by bonds (which is the cost price) and not with Rupees. The production cost of everything has come down tremendously.
State also offers 10 million duty free if one deposits 1000 Euro non refundable. In the first month of the financial year this option will be Rs. 10 million, in the second month Rs. 5 Million, and in the third month it will become 2.5 Million. This brings out all the black and spare money which state was not able to get before and as there is no tax and hence no tax evasion so all the money is white as it is being given to government. This is the third flood gate of money and the amount will much bigger than the first two flood gates.
This was the third floodgate of money which is even bigger than the first one and the exact amount is impossible to asses unless the system is implemented.
In order to provide cheap bonds throughout the year government offers three types of registration fees.
Pay Rs. 10,000 in the start of the year and get the rate of 6 for the rest of the year and this will suit the professional’s and salaried person.
Pay RS.10,000 yearly and get 20,000 new bonds at the rate 6 every month but one has to collect 10,000 bonds (equal to fee) to get this cheap rate throughout the year. Higher the registration fee more the entitlement of cheap bonds. This registration will suit any small-time business who will sell his product cheaper provided 15% bonds are also paid with rest of cash money by the customer. See the next registration for further explanation of 15% bonds. This will apply to all goods in private sector and does not apply to the government sector. This is a big incentive to accept bonds in the private sector as the business accepting more bonds will have more business than the trader not accepting the bonds so the bonds market will multiply and there will be a constant need for bonds in the open market.
Third type of registration will be of Rs. 100,000 which will entitle the business to sell its products through PMA. The value of merchandise sold through this source will help the business to get the 6 bond per Rupees rate or opt for the duty-free option equal the amount sold. But with one condition of surrendering 15% bonds at each transaction.
Merchandised sold through PMS Rs.1000. Bonds surrendered 150 (15%) are deposited in state account to be sold again so the cycle of bonds is established. A receipt of bonds surrendered is obtained from PMA for evidence of sale of merchandise and this receipt will entitle the traders to get cheap bonds or the duty-free option throughout the year but the same receipt can be used once only.
What is the Benefit of Business?
Cheap bonds through out the year
Duty free option will help industry
The quota which can be sold is ten times the amount of Registration but not more unless the registration fee is increased. Now all the business will opt for this registration in order to reduce the cost of production. These 15% bonds the business will get back through a chain of dealers sub dealers and ultimately the customer will pay this bond portion as he will get the end product very cheap because of tremendous cut in the cost of production by the factors already mentioned.
This will replace the GST or the VAT or the two-price system seen all over PAKISTAN. Almost everybody will sell their product through this channel as it will be much costlier to sell the product outside this system as cheap bonds are not available otherwise.
According to rough estimate at least RS.10 trillion transactions are carried out every day in Pakistan and at each transaction 15% bonds are being surrendered, the price of 15 bonds is Rs. 2.5. So, 2.5% of 10 trillion will be Rs. 250 billion which goes into government account without any compulsion every day (Unbelievable). This is the Fourth floodgate of money and is called the gold mine.
Now the state is sitting in the driving seat and all the money in banks of private sector has been transferred into government account and banks are no more the lenders but are borrower from the state which is the only source left and will invest in business with sound feasibility study checked by the state bank. The state will offer to invest 80% and the bank will bring investor who is willing to pool rest 20%.
This 20% will be deposited in the bank and the bank will oversee the running the business, running expenses will be given to the investor from its share of 20%. There will be no collateral and share of the profit and loss will be shared in the ratio of 60 and 40. The bank will share the 60% with the investor and 40% will go to state funds and the state will provide everything under its control below cost which will farther reduce the cost of production and at the same time will markedly improve the profit margins of all the businesses.
No major business can refuse this offer. Any bank showing repeated loss will go out of business as there will be no more funds available from the government source and all other interest-based sources are not available any more. Interest based banking is gone forever or it may be at a very small scale and the state will not offer loans on interest as these are not any more profitable and risk free as there is no collateral. The amount of profit government will share will be unimaginable and this is the 5th flood gate opened.
Then Why not Invest on Profit & Loss Sharing Basis
Last but not the least government will acquire all the land on lease without any force and will provide all the needs to the farmers through corporate farming sector hired by the state below cost and will become the shareholder according to the mutual contract with the land owner this is the 6th flood gate of money opened.
Drug Abuse Eliminated
When all the possible land is being cultivated by best agriculture engineers there will be much better yield and much more profit to land owner then who will not join hands with the government. The obvious benefit will be no more poppy cultivation in countries which are poor and largely depend on the poppy crop. Now there is no more poppy and no more drugs. All the above claims have been proved to be true except the terrorism.
How Terrorism will be Eliminated with MBC System By Dr Niaz Ahmad Khan?
We have to look at root cause and it is poverty and not the religion which is being falsely blamed. The going rate for a suicide bomber is US $1,000 in Pakistan, Iraq and in Afghanistan. Can one believe that anyone having at least two meals a day will blow himself? Never the areas of the countries where these attacks are happening are extremely poor and the extremist elements who themselves are or were poor exploit these very poor people to carry out attacks for money to save their families dying from hunger and this is an open secret.
Extreme elements has large force that is recruited from poor areas as there in no job anywhere and they provide these raw recruits with only food and shelter and at same time brainwash them and train some of them to carry out these attacks by giving them enough money in their lives to support their dependents. You might mention few isolated cases of being well to do and still carried out these attacks. Once the poverty is removed in these areas by implementing this system these attacks will come to an end immediately. This system is not only meant for Pakistan but will be easily applicable to every country.
Flood Gates of Foreign Exchange Opened
All the surrounding countries will be eligible to apply and will be most welcomed on priority bases without any restriction.
Pakistan total earning on import duty is not more than 5 billion dollars in whole one year. This is not equal to even peanut once Govt. offers the duty-free option of Rs.10 million (5 &2.5 million for the second and third month) if anybody of any nationality remits at least 1000 euro or multiple of it to state bank of Pakistan. This option is also applicable to merchandise purchase in Pakistan made goods. This option is only available for 3 months. A conservative estimate is that at least 300 billion Dollars of smuggling is carried out every year but on this smuggling effort at least 5 % kick back is paid. These smuggled items not only are sold in Pakistan but reach Afghanistan and the surrounding land locked countries (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan Uzbekistan) the country will not hesitate to remit as much money as they could because this option is only available for 90 days and the Govt.
Income lost in 3 months will be zero as nobody will import anything unless one has purchased the minimum required duty option. As a result, all the smuggling will come to a standstill because the goods imported will be much cheaper with the warrantee from the original production house than the smuggled goods without any warrantee. People will not only import high tech machinery but also luxury items like every kind of car truck buses motor cycle and corporate jets including helicopters and this will give a quick start to the ailing economy of Pakistan. The main attraction of duty-free option will be to sell this option in the open market at even double the price and make 100 % profit but still the duty part will be only.0 2 % still cheapest in the world. All the cars imported and made inside Pakistan will be more than 150 % cheaper than today because of 60 % reduced in cost of production and hardly any duty and NO tax. More people will buy these cars because they can afford it. The duty-free items should be imported within one year as the shelf life for this option is not more than one year and the next year the offer will be repeated. But the million-dollar Question who will check the duty-free goods as this cannot be left to FBR who will do the same trick as before and for this reason there will be four independent auditors Once this option is given a flood gate of euro will open and the amount remitted will be an imaginable within a month.
Govt. loses only 3 to 5 billion $ of duty not received in one whole year. Now Pakistan has become the hub of re export market as all imported items are cheaper than rest of the places even where these products are manufactured because of heavy taxes and duties. Once Pakistan has accumulated more than enough foreign exchange (at least 300 billion euro) it will PAY off all the debts and will kick in the back of IMF and USA. Because US and IMF are bent on destabilizing and destroying Pakistan in order to capture its nuclear assets and throw the head less Pakistan in front of India. These are the ultimate aims and objects of a country that has always sabotage Pakistan.