Austerity begins at home: PM orders ministries to cut spending by 30%

At maiden cabinet session, Nawaz says all options open to salvage Steel Mills, PIA, etc.

ISLAMABAD:

The Nawaz Sharif administration has promised to prune wasteful spending and scrimp together some badly-needed cash for the exchequer. And it appears the government is doing just that.

On Monday, the premier directed his ministers to immediately curtail the expenditures of their respective ministries by up to 30%. Even the close friends of the premier would not be exempt. Not satisfied with that, Nawaz said he wanted the ministries to cut back their expenditures by 60% to 70%.



“I advise the cabinet members to study the party’s manifesto. We have to reduce all non-development expenditures by at least 30% or even by more than half,” he told the maiden session of the federal cabinet.

The premier spelled out guidelines for his ministers, directing them to adopt austerity, avoid extravagant lifestyle and work dedicatedly for the public good. The performance of ministers would be evaluated every three months to ensure good governance, he added. “Strict and indiscriminate action will be taken against ministers who slack off.”

To prove that he means what he says, the prime minister ordered the immediate cancellation of a tender issued by the Capital Development Authority (CDA), Islamabad, during the previous government’s tenure, for the expansion of roads leading to the Prime Minister House.

Nawaz also talked about the national economy, which is caught up in a time warp. He noted with concern that public sector institutions, Pakistan Steel Mills and Pakistan International Airlines in particular, were incurring massive annual losses. He said that his administration would study all possibilities – including privatisation, public-private partnership and change of CEOs – to salvage such loss-making institutions.



Coming to the debilitating energy crisis, the premier said that it has paralysed the economy, including the agriculture and industrial sectors. “The government cannot remain a silent spectator,” he told his cabinet members. The new administration is working out short-, medium- and long-term plans to reduce the frequency and duration of power outages.

Nawaz noted that circular debt had gone up to a whopping Rs503 billion. “Even if we retire this debt, there is no guarantee that this will not reappear unless we put in place a comprehensive plan,” he added. “We have to see whether we can set up new plants as thermal power is very expensive. We shall try to eliminate line losses and power theft. We shall punish all those responsible for this crisis.”

He reiterated that his administration was committed to overcoming the power crisis which has been triggering rampant protests, especially in sultry summers, since 2008.

About a problem which had dogged the previous government throughout its five-year rule, the prime minister vowed ‘zero-tolerance’ for corruption. Nawaz said he expected high level of transparency from his cabinet ministers.

“The people have given us an overwhelming mandate and it was God’s will that whoever comes to power should have the backing of a majority of the electorate,” he said. “Governments with fractured mandates cannot solve problems. Such governments have to compromise on principles and ideologies and the current state of affairs has no room for making such compromises.”

The US drone strikes inside Pakistan pose another daunting challenge to the Nawaz administration. The premier reiterated that his government would go beyond rhetoric and take practical steps to get the controversial campaign called off.

He added that his government would not follow a dual policy: publicly condemning drone attacks while tacitly condoning America’s unmanned war in the tribal belt. “The US administration will have to respect the sovereignty and territorial integrity of Pakistan. A comprehensive policy will be devised after seeking input from all stakeholders against drone strikes,” he added.

Published in The Express Tribune, June 11^th, 2013.