It is not happening; now leave it

For economic revival, ground realities and plea of different sectors being ignored

ISLAMABAD:

When the whole economic revival and transformation narrative is dependent upon increasing prices of utilities, interest rates, erratic tax collection measures, unrealistic plans for enhancing exports, shifting blames to lenders and debt servicing, ignoring ground realities and the plea of agriculture and manufacturing sectors, then it is evident that it is not happening.

This is neither economic policy management nor a practical and sustainable modality. Thus, leave it sir; this may be getting out of your hands unfortunately.

Economic policy is a comprehensive domain that creates synergies between finance, fiscal, trade, industrial and planning policies, through finding tradeoffs, optimal linkages, need assessment for relevant actions, and detailed scenario or outcome analysis. Is this being done?

Unfortunately, a lack of vision and accountability of economic governance mechanisms, the ignorant media on economic issues, and apathy of the general public have led us to narrow down this exercise to the annual fiscal budget and prices of basic utilities and tall claims to curb inflation that has never materialised.

Yes, once in a while the State Bank of Pakistan also emerges, mostly to tighten monetary policy and increase base rates.

I tried to find a serious discussion and decisions on a wider, real and interconnected set of issues related to economic policy, in parliament and the cabinet. I failed miserably and would be happy to be proven wrong.

For the last many months, the whole of economic machinery has been busy in so-called negotiations with the IMF. A deal at operation level for a few billions of dollars is drummed as a historic success and then all efforts are deployed to squeeze the already emptied pockets, rather coffins, of the general public through increasing energy prices and imposing taxes through laughable manners, such as restrictions on foreign travel and blockage of mobile phone SIMs for non-filers.

Where are the analyses, steps, measures and policies in monetary policy, except tinkering slightly with the interest rate, that too not for a positive outcome. Where are the steps to check and rationalise credit allocation through commercial banks, particularly for SMEs and agriculture.

In fact, why does anyone bother about such allocations when interest rate of around 20% is hugely benefiting the upper class for deposits and the bankers for lending through money market. Where is the capital for productive resources, and where has the equity capital gone to transform the economy; have you pondered over this, sir?

Where are the measures to practice equity and equality in the taxation system? Yes, we are told every day how generous you are to give the so-called subsidies in electricity and fuel prices. But no, you don’t tell how much loans are written off every year through the publicly owned banks; and it is not for small borrowers.

No, you don’t tell how much tax exemptions and rebates you give to some extremely unproductive industrial sectors, only because of their lobbying power, that a normal citizen does not have. No, you don’t tell the total fiscal outlay to close or run unproductive state-owned enterprises.

Each of the aforementioned items could be easily more than the total tax collection that you may have by squeezing the general public through energy prices. Would you please also share these details, sir?

Where are the analyses and availability of productive capacities, measures to facilitate trade, required capital and target markets for enhancing exports to $60 billion, from a base of $25 billion.

Even if all global markets are open for us, what are we going to export. Textiles? Do you know how many hundreds of textile units have closed recently? Do you know what the trend of cotton production in recent years is?

Rice? Do you know what is happening with the agriculture sector, global markets for agricultural commodities and water availability for agriculture? Would you like to share your views on this, sir?

Where are the economic policy managers who are thinking, anticipating, planning and getting ready for the global economic reset that is happening quietly, yet forcefully. If any of them know what it means.

The world is moving towards a new economic system, monetary system restructuring, parallel systems such as the ones by BRICS, for which Pakistan is aspirant for joining, reconfiguration of regional and global trade and investment flows, and we are fighting on electricity and fuel prices. Would you share your vision with citizens on this, sir?

However, above all, where are the people, citizens and collective voices? Where is the institutional monitoring and governance accountability mechanism? Nowhere! But even then, sir, this is not happening. Would you still like to continue doing the same, sir?

Lastly, an irrelevant point to ponder just for reference. All over the world, economic policy is designed and implemented by economists. Finance, rather public finance, is a sub-domain of economic policy. Public finance experts are also different than private bankers and accountants. Accountants and bankers are sub-domains of finance.

The writer is an international economist