Vows for a progressive Pakistan

Despite being the 4th largest producer of cotton, Pakistan lags behind Bangladesh and Vietnam in textile exports

Looking back at the past few years of Pakistan, it is unfortunate to have witnessed a weakened democratic paradigm in the country primarily being a consequence of evading the parliamentary system creating space for judicial activism in tandem with a failure to devolve powers to the grass-roots level as envisaged in the 18^th amendment.

Our nascent democracy also endured burdens of increased economic vulnerability, an increase in social injustice and inequality, a lack of structural reform coupled with isolation on the international front which led to our sacrifices being termed as ‘nothing but lies and deceit’ and inclusion in the FATF’s grey list.

At times like this, political parties ought to feel the fiduciary responsibility of steering the nation out of the vulnerabilities being faced via a vision that translates into sustainable policies. Having worked with the PPP’s manifesto committee on the document’s preparation process, I can claim that the party has envisaged to address the country’s vulnerabilities keeping economic justice, freedom from helplessness, strengthening democracy, ensuring rights and peace, and focus on youth as the cornerstones of the its policies for Pakistan.

The manifesto begins with a promise to address a broad area of food insecurity aimed at improving food security and economic empowerment vis-à-vis wealth redistributive policies via a Bhook Mitao (hunger eradication) Program. These objectives are planned to be achieved via a rigorous focus on all nodes of agricultural sector that currently employs 40 per cent of the country’s workforce under an envisioned Zarai Inqilab Program.

Addressing all nodes of the agricultural value chain, the Benazir Kissan Card scheme will ensure subsidy on credit financing, provision of subsidised fertiliser and electricity, crop insurance for small farmers, targeted provision of subsidised drip irrigation technology, policies for improving market access and subsidised access to farming technologies and tools among other envisaged interventions. PPP further plans to carry out an extensive overhaul of the price support system and envisages to ensure price security to farmers for each crop. Successful implementation in these policy areas will enable growth in the agriculture sector led by the marginalised segments of the populace leading to improvement in food security metrics.

With regard to food provision precisely, the PPP plans to introduce a ‘food card’ system at the union council level and link it with the Benazir Income Support Programme for targeted provision of subsidised food products to those most in need. The party further seeks to address inequality and social injustice by expanding the Peoples Poverty Reduction Programme which will provide interest-free loans and carry out capacity-building of marginalised segments to make them financially stable.

On the economic front, the nation saw an increase of $33 billion in external debt mostly for populist projects that seldom alleviated the nation’s socioeconomic deprivations and focused on infrastructure mostly. Based on this, the IMF has projected Pakistan’s external liabilities to rise to $144 billion in the next five years and believes that the debt repayment capacity of the economy has significantly lagged behind in comparison with the increase in loans. The manifesto seeks to rationalise infrastructure spending and aims to devise principles for resource allocation via a policy framework which will also address bottlenecks in project financing to avoid cost escalations. PPP also aims to build consensus on economic issues in Parliament.

A focus on the revival of state-owned enterprises revival is a key concern for the party. Debt of state-owned enterprises has reached Rs1.2 trillion as compared to Rs400 billion in 2013. PIA’s accumulated losses alone, as of December 2016, amounted to Rs316.7 billion. It is interesting to note that the only year when PIA booked an operating profit (Rs720 million) and highest revenue (Rs116.5 billion) was in 2008 which was during PPP’s tenure. The primary reason of dismal performance of state-owned enterprises continues to be lack of independence of boards and management. With a pragmatic policy reform, the manifesto seeks to enhance the independence of boards and to engage private sector partnerships to improve performance.

Despite being the 4^th largest producer of cotton in the world, Pakistan lags behind Bangladesh and Vietnam in textile exports. This is primarily due to the government’s inability to attract FDI in export-oriented sectors. The PPP manifesto seeks to rationalise surcharges for five export oriented sectors, will review all free trade agreements and will establish exclusive economic zones on the condition of export of 50% of the produce.

Astoundingly, Pakistan’s direct tax-to-GDP ratio during the last decade has declined from 1.8 per cent to 1.3 per cent, whereas the ratio of indirect tax-to-GDP has increased from 8.5 per cent to 10.3 per cent which clearly have benefitted the elite and unfortunately not the poor masses. Pakistan’s efficiency of taxation mechanisms was ranked 172nd in the world by PwC and World Bank in 2017-18 while in terms of health and education, the country ranked 129th out of 137 in 2018 according to World Economic Forum. The manifesto seeks to restructure the FBR and will spin off three separate entities namely the Direct Tax Authority, Sales Tax Authority and Customs Authority from it.

During the previous regime, a sole focus on generation without any structural reforms has choked the sector with a circular debt close to Rs1 trillion. The manifesto plans to address structural issues in the sector to ease the sector’s fiscal burden on budgets. By diagnostically addressing the drivers of circular debt as defined in the National Power Tariff and Subsidy Guidelines 2014, it aims to eliminate circular debt from the sector for good. In addition, there are plans to revamp transmission and distribution systems, diversification of the energy mix towards sustainable and cheaper energy sources and promotion of energy efficiency and conservation by strengthening the National Energy Conservation Centre.

The list of PPP’s plans as envisaged in the manifesto is exhaustive. To foster a democratic culture, an understanding of the country’s issues and the PPP’s vision to resolve them, every citizen must read and analyse the impact the PPP is trying to create as envisaged in the 2018 manifesto.

The writer is a chartered accountancy professional and graduate of Oxford Brookes University. He tweets at @Shahzad_91