Public spending and inequality

UNDP's country director has said that public spending in the country is concentrated in a few developed districts

In a rather disappointing, but expected, development, the outgoing UNDP country director in Pakistan has said that public spending in the country is concentrated in a few developed districts and is mostly politically-driven. Marc Andre was speaking at a seminar organised to highlight growing inequality in the country, and said that governments tended to spend money on districts where they would gain maximum political mileage, which eventually led to greater disparity among different cities of the country. His comments highlight a massive issue in the country’s public spending pattern where projects of infrastructure, if any, are mostly shown as achievements of the ruling political party with benefits of these projects rarely reaching those living in under-developed areas.

There is no doubt that Pakistan continues to stay under-developed with basic necessities — sanitation, access to education and healthcare — remaining out of reach of most. A recent UNDP-funded report also found that Pakistan’s richest 20 per cent now consumed seven times more than the poorest 20 per cent of the population, highlighting the rising inequality. The report also stated that close to 40 per cent of the country’s population lives in poverty, with the ratio going up substantially in the case of the rural areas. So why has Pakistan, after having identified these issues, not been able to address them? The answer is simple, and shameful, to say the least. Spending is concentrated in areas where there is greater return to be had in the form of a vote bank. Despite the increase in tax rates and unprecedented levels of indirect taxation, coupled with a complex system that could take the ordinary citizen years to understand, governments continue to ignore the rural areas. The state of living conditions is appalling and basic infrastructure is unheard of. Concentrated spending patterns, around election time, act as short-term handouts that disappear as soon as elections are over. The thinking of policy makers is limited to five years or less and individual benefit is prioritised. Hence, whatever funds are left are spent on areas that are more visible to the outside world and on projects that have greater visibility. There is a reason why Lahore and other areas of central Punjab get the maximum amount of spending — these are the ruling party’s strongholds. 

Published in The Express Tribune, August 11^th, 2016.

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