As the budget session draws near there is a flood of articles on the economy in newspapers, the subject is discussed at length on television and remains the main topic of webinars. There is nothing unusual about it as individuals, various segments of society and power centres would be deeply interested in the impact of the budget on their businesses, professions and quality of life. For the ordinary citizen keeping the inflation low and not making their life more difficult that matters the most. But in certain cases, external factors determine inflation in which the government has limited control.
For the finance minister, presenting a budget of a country whose economy has remained mostly anaemic and where there are conflicting interests is no easy task. Besides, being under the IMF programme, the government has to comply with their broad and specific parameters and of other international donor agencies restricting the scope for manoeuver.
The question that our leaders need to ask is: how long are we going to remain jacketed by these external forces? Clearly, it is time that we earnestly resolved as a nation to liberate ourselves from this heavy economic dependence on outside sources. A dependency that dwarfs our national achievements and constrains our freedom of policymaking. Even it undermines the strategic and political significance of our conventional and nuclear capability. And above all, hurts the national ego and self-esteem. All the big talk of our leaders sounds shallow when we have to stretch the nation’s hand to borrow year after year.
It is not that it is unusual for nations to borrow or seek assistance from the IMF for they are meant to assist developing nations specifically those facing serious financial crunch. But not as a prolonged or frequent source of call.
At times one wonders given the scale and enormity of problems that have piled up over the years whether PTI or any future government can solve them. Especially if our politics remains as confrontational and polarised that building consensus in parliament on major national issues becomes very difficult. Besides, there is the increasing liability of pensions and loans and the defence budget in which there is hardly any flexibility unless the threat scenario changes on the eastern and western borders.
It is however encouraging that the present finance minister is planning towards achieving self-reliance. Merely blaming the previous governments for their follies is neither a solution of our financial challenges nor gives the country freedom of action or boosts its self-image in the comity of nations.
Similarly, if the opposition fails to give viable alternatives for improving the economy and moving toward self-reliance then its criticism of government economic policies has no value. In the past PPP, PML-N and military-led governments have all been financially rescued by the IMF and their performance generally remained at par or marginally better. So, the question is: what alternate course of action are the opposition parties offering that is new and workable that the government should seriously consider? The best course for the opposition would be to support the programmes or areas that will boost the growth trajectory. Broadly these have been identified to include — textiles, tourism, information technology, power sector, agriculture, etc. Modernising and upgrading these sectors would require introduction of new technologies and replacement of outdated plant and machinery. This would require substantial capital and astute management but the returns would be rewarding provided the transition is well planned and executed. It would have to be spread over a few years and this is more the reason why there has to be bipartisan consensus on the economic programme.
Bangladesh focused primarily on improving the quality of its products thereby considerably expanding its export base. The BD government has given about 20 subsidies to export oriented industries in the form of tax exemption for five years so that its products become globally competitive. A similar approach of assisting the export sector by our government would inject new vigour in these industries. Even within our country, business enterprises that have been forward looking, technology savvy and pursued correct management practices have become globally competitive. Our defense industry has been able to export certain military products like JS-17 aircraft, small arms, military vehicles and other products despite serious competition. Our civilian industry with the right products, good management and supportive government policies can become internationally competitive. Recently, Getz Pharma Pakistan made environmental history when its manufacturing facility won a prestigious international award. Similarly, certain engineering and IT companies are successfully competing and expanding their presence in the global market. All those companies that are keeping pace with technological developments and adhere to international quality standards win in the short and long term.
For Pakistan, the increasing income differences within the region can have serious geopolitical implications. As with lower income Pakistan is finding it more difficult to balance its budget as resources for defense expenditure and development have to be curtailed. Moreover, Balochistan, Northern areas and the recently integrated FATA region has to be given priority. A strong democratic culture would ensure fairer resource distribution within different parts of the country.
Our past and recent experience demonstrates that without a functional political framework and a general consensus on broad economic issues it is not possible to improve the economy on a sustainable track.
Politicians are expected to abide by democratic norms in dealing with matters of the state and in relation with each other. This will pull the nation out of many of its political and economic woes and restore confidence in the democratic process. At present our democracy is fragile and that has serious consequences for the economy as well.
Personal attacks on the character of his rivals by the prime minister and the response of the opposition leaders toward him has vitiated the political environment and made it difficult for them to cooperate on major national issues. Not realising that governance is directly related to civic peace, working relationship with the opposition and the capacity and legitimacy of the government.
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ