PTI’s economic policy
Much of the PTI’s economic blueprint is aspirational rather than realistic. It is to say that the cost of producing electricity will be reduced, even though not a single politician in Pakistan has any control over the international price of oil. The same goes for the promise to bring an end to the circular debt issue although the PTI is unable to explain where the money will come from in order for this to happen. The party has also focused on the symbolic rather than the practical. It is politically popular to say that the state will save money by slashing the budgets of the president, prime minister, chief minister and governors’ houses by 50 per cent but these savings will barely make a dent in our deficit. The PTI also wants Pakistan to make do without foreign loans although how this will not lead to instant bankruptcy is again left unexplained.
Many of the proposals also betray an inexcusable ignorance about politics and economics. It is well and good to say that the education and health budgets will be substantially increased but these are subjects that were devolved to the provinces under the Eighteenth Amendment and so will not be under the purview of the centre. The PTI also wants to increase government spending in many sectors, reduce unemployment substantially while bringing down inflation at the same time, which is something that would break all laws of economics if it ever happened. That ultimately is the problem with the PTI: it ignores reality for rhetoric.
Published in The Express Tribune, August 27th, 2012.
COMMENTS (51)
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This article is somewhat a depiction of ignorance and no doubts there is a mushroom growth of such ignorant writers. It seems far easy to submitt and say that ''it will break many rules of economics'' because in our lives genearlizations prevail much more than realities however the truth is to understand the economic rules and put forth the comments based on strong arguments and analysis backed by examples.
Contrary to this I do agree that some elements of the Imran's/Asad's policies are not do-able in due course of time yet it does not prove to be un-achieveable.
Where there is a will there is a way. The bottom line in all Imran's policies is that the willingness to change Pakistan exists and if the leadership would determine a perfect course of action to steer and sail the boat all the structural flaws would abolish.
It is quite obvious from ET script that the author never bothered to listen to the press conference. All questions / concerns about his critique are there in PTI's presentation. It may not be perfect but was indeed the best economic plan presentation that I have seen from any Pakistani political party (including the yearly budget presentations over the years). One can safely say that even if 50% of what is being planned by PTI is achieved in the next five years Pakistan would be well on its way to be standing in the ranks of countries like Malaysia, Indonesia and Turkey and will be ahead of other regional countries in its endeavor to end poverty and provision of basic social services to its citizens. Congratulations PTI for providing the people of Pakistan the much needed "hope", an economic vision and well done Umer in presenting the vision in a nationalistic, patriotic and eloquent style. This is the first time in many years that I am seeing hope for the future of Pakistan and I am proud to be a Pakistani who will Inshallah be lead by God fearing, honest, competent and public serving politicians / professionals. Thank you PTI and may Allah bless you all and the state of Pakistan.
PTI should stop pitching Umar and Tareen as Economist. They are businessmen, not economist. At the very end of it, par the We are Honest Talks, they are going to create one more mess as Musharraf did. For Allah Mian sakes take some economist on board.
So in summay, the editorial failed to find a single piece of useful policy.
Criticism just for the sake of criticism, the author did not seem to have payed particular attention to the policy presentation. The prime example being when he mentions - "cost of producing electricity will be reduced, even though not a single politician in Pakistan has any control over the international price of oil"
The proposal was to move away from oil and rely on coal, which is sourced locally from within pakistan.
That ultimately is the problem with this editorial : it ignores reality for pure criticism.
Well, this piece is certainly correct in essence but overall it is not a thorough critique of PTI's sham of an economic plan. There is a lot more that can be criticized int their so called "Economic Strategy" and it should be rightly done so. There is No Strategy, not one, in their entire presentation. They have a list of goals (very very unrealistic) and they state very positively these goals as the expected results of their economic strategy. There is absolutely no explanation about how these goals were originally set by PTI chiefs.
Next there is a list of randomly identified "areas" that need to be improved upon or invested in. There is nothing new about this random list that shows an advanced understanding of Pakistan's economic structure or its current state. This is just the list of areas that seem to have been "most talked" about in the last 5 years demanding serious attention. And there is no mention of how the targets or set goals will be achieved in these areas. Such arbitrariness is idiotic at best.
There is no mention of monetary policy, except stating that inflation will be brought down to single digit from double digit level. How that will be done is beyond me!
Similarly there is no mention of fiscal policy, except saying that some anonymous tax rates will be reduced and the tax net to be broadened. Again, there is no explanation of HOW that will be done!
You call this an "Economic Strategy" to rescue the country's economy from one of its worst crisis?, Mr Khan?
@Z: lol! Exactly my thoughts
Corruption in Pakistan is indeed structural rather than personal phenomena , for PTI to bring drastic change whole administrative structure would have to be replaced by sending home old lot with new dedicated and committed ones. How PTI will deal with civil and military bureaucracy enjoying certain privileges, not mentioned in PTI policy.
Congrats
Given that I have yet to read an editorial but ET on the incumbent government's economic policy (or lack thereof) yet, their hawkish take on PTI's propositions certainly makes for an interesting read. It's very strange that the ET couldn't find a single praiseworthy feature in PTI's plan of action. But then again, over the course of the years that I have followed ET, it has hardly made an effort to hide its allegiances.
Biased.....The author needs to properly do his homework before delving into this issue....
Irony is that the tribune editorial is not a financial analyst to begin with for criticizing their economic policy; and for those of you want to view that presentation - Asad Umar answered every single one of this editorials questions...
https://www.youtube.com/watch?v=IpFbpuQPabY
ET and the rest of the media are more comfortable with a Pakistan led by Zardari-Nawaz! Because the media doesn't want a better Pakistan, they want the way things are, that makes for better stories and more ratings!
Just a small observation about Pakistan's inflation problem. It is more STRUCTURAL in nature rather CYCLICAL so yes, even if not to completely disentangle the two as per economic theory but in Pakistan's case its possible to reduce unemployment along with inflation without breaking economic laws.
If corruption is systematic issue, why did it grow with zardari coming into power? Corruption is mainly a personal issue and systematic corruption is nothing in comparison with personal one.
I'm absolutely sick of hearing comments like "hurrr y we only criticize wen we shud MAKE A DIFFERNCE!!!!11!"
Criticism is the perfect way to make a difference so long as it makes sense and has a premise on taking the facts and putting them into perspective. It's absolutely imperative that we change our opinion on critical thinking.
Here's a thing to consider for my Muslim brothers and sisters. In Islam, there is such a thing called 'Ijtihad' which was most commonly practiced in Iraq's golden era (amongst philosophers, physicists, thinkers, scientists and other intellectuals). Great emphasis is on critical thinking in your own religion which is something you guys clearly 'love' in nominal terms, but when it actually comes to putting it in practice, the only response I see from the majority of you lot is 'UGH STOP BEING SO NEGATIVE'.
I absolutely agree with the article in terms of Imran Khan's policies being more idealistic than pragmatic and a few IK supporters have agreed with me on this. If Imran Khan wants to prove his policies rational than just a case of khwaab faroushi (dream selling), then he should respond accordingly to his criticisms and perhaps lighten up his stances on certain things.
If he does in accordance to the criticism he receives I'd be more than happy to jump on the bandwagon.
People should send the PTI supporters to the drought hit areas while they read this to put their tears to effective use. er... I suppose a lot of tears wouldn't help in reality, but since when do they require a plan that will actually result in some type of progress? If Imran Khan is sincere enough, the tears will become purified and grow fields spanning the entire length of the country.
Compare their economic policy with that of PPP or PMLn. The others don't have any, and even if they have they haven't been able to implement it after staying in power for years and years. I think I will trust a team of professionals like Asad Umer and Jehangir Tareen more rather than the editor of this newspaper.
Basic function of State is to " Provide," physical security, capable administration plus administrators, efficient institutions, and a platform to address public needs. The state administrators must have the abilities to " Deliver," essential functions to its citizen. How hard it is to deliver good " Democratic," governance Now. Lets create easy opportunities for every " Citizen," of Pakistan and not Deny Future. The citizen of Pakistan wants the Government in Power to do its Duties.
Policy? More like pie-in-the-sky wish-list. But I suppose they made an effort at least, and maybe it will start a culture of debating policy. Now it is for the other parties to point out the wrongs in it and offer a better policy. And then we would enter the world of more mature political debate in this country.
And PTI supporters: please don't be like jiyalas. Criticize where it is needed so that PTI is turned to the right direction.
Sir IK please take advice from sheikh rashid
I think this article was written by Dr Hafiz Sheikh
The critical analysis of the editorial is not bearable for the over-enthused supporters of PTI. Besides economics they need to learn tolerance and parameters of learned debate. So far they are keeping their pride by avoiding participation in any electoral process and living with the rhetoric of their leaders who seem more prone to dictatorship than to the democratic process. The proof of their pudding, like any other pudding, would of course be in its eating, so lets wait for the elections and if they come to power, the feasibility of their economic policy would be revealed, not just to the people but to themselves as well.
@Lahori
Better yet --- how about IK explaining how he's going to get rid of corruption. The promise to end corruption within 90 days with no explanation on how he's going to do that is absurd. The Editor is spot on when he says that corruption is institutional in Pakistan and he's not running for office with bogus promises to fix it.
@Faheem. God forbid the day comes when unit of electricity costs 25 cents and that too on coal
what rubbish editorial....this seems yo be more like of column from Pervaiz Rashild PMLN spokesperson rather than some senior journs views..... Plz be fair with your point of view....you are not a economic analyst nor you have knowldege in all spectrums...
Excellent article..PTI's economic policy is what every economist would say these days, Reduce inflation, collect more taxes, spend less on government and more on education and health..Blah..Blah...Blah.. The fact is that there is no business environment in the country and without peace and security, economy will never grow and without economic growth, taking more taxes is foolish. Telling Tax Payers that you will be squeezed for another Rs.2000 Billion in taxes is an idea only those could think who don't want to face voters in general elections.
Please ET, I'm no PTI supporter, but this is awful. 'Not realistic' is not a critique of a detailed policy platform. This is pure and simple cynicism based on partisan considerations.
This is a balanced critique of the PTI's presentation: http://gulbadan.wordpress.com/2012/08/26/my-humble-evaluation-of-pti-economic-policy-2/ It critiques it with substantive evidence-based propositions rather than rhetorical admonitions.
What you've written up here is silly and damages the paper's credibility.
the whole gang of PTI needs reality test
Agree with the editor's view.I will use here the analogy of our current court systems. Since the reinstatement of current SC judges we may all agree that there is no corruption in SC or HC level.However, has it improved performance in terms of corruption or justice of lower judiciary I doubted. Also we can take example of PMLN govt in punjab not many scandals as compared to Federal govt.Still corruption is pretty much at same levels in all departments or no respite to ordinary peoples.
Will the ignorant writer of this editorial, "PLEASE STAND UP" "PLEASE STAND UP"
What do you know about power sector and oil sector ? Do you know the oil pricing structure? Do you a thing about power tarrif structure? Do you know we don't have an integrated energy policy? Do you know that Hydel electricity is the most expensive means of power generation? Do you know recovery % age of receivables of power distribution companies like KESC, HESC, QESC, PESC, WAPDA?? Do you know how Politicians, Chaudharys, Wadairas, Sardars pay actual utility bills for their estates, farms and properties? What do you know? I know what you know, you KNOW HOW TO CRITICIZEWELL DONE!
One more thing, your comment on how employment and inflation can be handled at the same time in terms of basic laws of economics, this is true but applies to ideal economic environments (such as US). In Pakistan, major cause of inflation is fiscal deficit financing. On the other hand, our unemployment is high because of four reasons: security, energy, high cost capital, and under developed skill set. The last one will take decades to solve while the first three will provide quickest bang for the buck and can be solved through improvement of business infrastructure, again through better revenue collection and austerity. As you can figure out, better taxation is the linchpin of PTI's economic policy (which I feel sorry to say you have been unable to highlight or appreciate).
@blithe: I agree with your point that we need systems and structures, but rather then trusting the editorial words, you should check the actual policy seminar, and the policy report. There is clear mentioning of tackling corruption both on personal and structural levels. Recently some of the major chunk of corruption in terms of both numbers and percentage has happened in the State owned enterprises and they clearly stated how that would be tackled by introduction of independent governing boards rather then appointments approved by the political high ups. Another major structural change for avoiding corruption that was proposed earlier was the local body system down to the village council level.
Institutions are all that Imran khan has believed in and developed previously, and that is what has been emphasized throughout the seminar as major means of implementing all policies.
The tribune should maybe come up with criticism or points on what could be difficulties and hindrances in carrying out these policies, but identifying points already mentioned as missing is totally unacceptable.
ET never ceases to surprise me. So this is rebuttal to your analysis: For corruption, not only personal but devolution, autonomy of corruption containment structures such as NAB, and civil sector reforms are the structural solutions that have been proposed by PTI. As for your comment on PTI’s inability to control commodity prices, you fail to understand the concept of risk management through diversification. Other much bigger economies than Pakistan are much less sensitive to commodity price movements because of their reliance on other energy sources such as hydel, nuclear, and coal. PTI has already proposed moving to cheaper energy sources in the medium to long term. Furthermore, on education and health, NFC award was designed inefficiently and that’s why it needs re-evaluation. The fiscal space to spend more on education and health comes from increased tax-to-GDP ratio and controlled economic bleeding of GSEs. Lastly, as much as we love aid, most of it has been traditionally used for nourishing military than public. So, the less we have of it, the better. There is already enough literature being published on how aid has not achieved desired benefits in Pakistan, rather it has worsened matters.
Dear fellow readers,
The economic 'policy' put forward by PTI was no more than a 'want-to-do-....' kind of thing. Policies include implementation procedures too. However i dont blame them as other political parties who have not put forward their manifesto would try to copy this to attract voters. SO when this situation arises (i.e.no party proposes is complete policy) in this case you need to see who is 'lesser evil' which sure is PTI.
For once , agree with ET editorial .
The following is pertinent :
"One of the fundamental mistakes the PTI makes is to treat corruption as a personal rather than structural issue. "
I'd like to educate the PTI followers . None of us our saints ( certainly not IK); we are all mortals . We need systems and structures to regulate us. For example , Pakistanis on the motorway follow rules because they a regulated by s policing system ,
I don't want to sound patronizing ... but PTI followers need to develop critical thinking abilities .
This is called criticism for the sake of criticism. Can the writer plz suggest how to get rid of corruption. I m sure he will dip in a philosophical debate
some of the comments are pretty harsh
Slashing the budgets of the President/PM house is more a symbolic thing rather than supporting crippling economy, for instance while the country faces economic draught, the only relief that the last budget provided was for the Presidency and Prime Minister House, the budgetary allocation of which jumped by Rs134 million and Rs156 million respectively for the new fiscal year.
similarly, IK pledged to first eliminate the corruption from the federal cabinet which is not a hard nut if you see that the PPP govt has launched new ministries (or just ministers) for Food Security and Research, National regulation and service, capital development, climate change, vice Prime minister etc etc.
So someone sitting on the editorial board of this paper knows more about economics than proven businessmen such as Asad Umar and Jahangir Tareen? I'll take my chances with with those who've been there and done it.
It's quite obvious anything PTI proposes will be unacceptable to this paper's board until the party starts 'sloganeering' of killing as many Taliban as possible.
excellent analysis.i agree that corruption is structural issue not personal issue.
hmmmmm. What else is expected of ET than to bash anything PTI?
as usual extremely biased article,, please advise the name of the author? who thinks nothing z doable in Pakistan,, If IK brings a good team, even the credibility of that team can force Internationl stakeholders to make situation flexible, F.exmp debt rescheduling, so we have capital to invest within, administrative control interms of regulating businesses, tax collection and there can be many more..
Que to comments which will try and explain the limitations of PTIs "economic policy" as some sort of political master-stroke.