Pre-election generosity?

If the incumbents continue to weather the ongoing challenges, they will soon have to begin getting ready for general elections, which are now approximately a year away. In fact, the current government has just prepared its last budget before it goes back to the public to try and win another term.

If there is any time for large heartedness in a politician’s playbook, it is the year before general elections. It thus comes as no surprise to see the government has announced a ‘Public Sector Development Programme’ of over Rs1 trillion, which is a significant increase since the last year.

Despite increasing its development spending, however, the government is not planning to curb its defence budget, which too is supposed to see a hike by around seven per cent.

One does not need to be an economist to understand that increasing military spending, while at the same time incurring more public spending, means that either our government has significantly increased its revenues by taxation, or else it will be financing this increased expenditure through further borrowing.

Despite claims of improved tax collection, we still have a long way to go before our tax revenue can become a reliable source of financing government spending. As things stand, the government primarily is relying on incoming loans to win over the mind of voters. Such a gamble to win power is based on the hope that incoming investments such as CPEC will help spur more impressive economic growth in the future, and enable Pakistan to take off its currently unsustainable debt burden.

The idea of government’s borrowing money in the hope of achieving economic growth can be reasonable assertion, particularly if a country uses its loans to directly invest in its people, especially the marginalised, so that they too can become productive members of society.

In a country like ours, however, the idea of growth primarily remains a top-down concept where growth is supposed to be spearheaded by the elite, and facilitated by the middle class, while poorer segments of society remain exploited and largely marginalised. Despite the rhetoric, public spending is often spent on infrastructure projects, and subsidies, which will mostly serve to benefit the powerful or mid-level entrepreneurs and farmers. Politicians still rely on vote bank capture by the elite and the middle class, and thus the hopes and needs of the poor seem less relevant. Or at best, they provide temporary and tokenistic dole-outs to the poor, without addressing the underlying causes of inequality.

Our latest PDSP also offers little to the poorest of the poor, expect temporary relief through schemes like the Benazir Income Support Programme. The infrastructure projects and the subsidies promised by it will be of much more relevance to those who are already well-off or are at least better-off than the poor and neglected masses. No significant means of production will become available to bulk of the rural and urban poor.

The latest PSDP also offers no significant hope to address the dismal health and education situation in the country, which in fact has taken a turn for the worse during the tenure of the current government, even if it has managed to bring our economic growth rate back on track. The ability of the existing allocations made within the development budget to address the plight of the deprived and neglected therefore remains questionable.

Moreover, if history is anything to go by, it is entirely possible that having showcased to the country its plans to spend an unprecedented amount of money on the public, there will now be many adhoc course corrections to deflect the announced PDSP allocations towards other expenditures.

Published in The Express Tribune, June 2^nd, 2017.

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