LAHORE: Pakistanis would have to adopt a middle path to plug the growing gap between what should be done, logically and bureaucratically, and what can be done politically. Technocracy/bureaucracy is policy without politics – and populism is politics without policy.
Meaningful reforms are opposed tooth and nail by the bureaucrats, who in times of economic distress propose austerity that essentially means asking for money back from the people. Politicians propose reforms that hurt the poor and spare the rich.
When trying to build a consensus on economic policy, one is surprised to note that all leading political parties have almost the same economic agenda at least on paper. On paper all of them are committed to good governance, eradication of corruption, and increase in revenues through fair taxation and so on. All these commitments are the best recipe for an excellent economic policy.
Still what we observe in our country is economic chaos, nepotism and extreme opposition by any party that is in opposition to these principles for economic growth. In the same way, the party in power also shows reluctance to do away with the discretion and undue powers that the system has bestowed on them.
This brings us to the painful fact that despite being clear on economic way forward, the political forces are forced by political rivalry to oppose even the good economic policies of the ruling party and similarly the ruling party gives deaf ear to excellent economic proposals of the opposition.
There is a need to change this mindset of the politicians. It may also be pointed out that no government in the last 35 years has initiated any long-term infrastructure project that could not be completed in its tenure. The short-term projects leave much to be desired, and in many instances are a drain on the economy.
The party in power fears that if a long-term project is completed after their tenure ends, the next government in power will take the credit.
Experts say to ensure sustainable growth in Pakistan there should be a minimum political consensus on economic agenda on six counts which include, governance, resource mobilisation, education and health, sate owned enterprises, agriculture, manufacturing and service sector.
Economic reforms without political consensus in Pakistan are not possible because in the absence of consensus, the pains brought by reforms would be blamed by the opposition on the sitting government.
This has been proved during the 1990s when every government that assumed power felt the need to impose value-added tax, but each time the traders opposing this tax were supported by that very party in opposition that tried to impose it while in power.
It is regrettable that in the absence of a consensus the traders now are exempted from VAT and pay paltry turnover tax of less than one percent as their final tax liability. This includes both income and sales tax.
Moreover, the annual turnover declared by the traders is accepted and no documentary proof in this regard is required. Tax compliance in Pakistan is very low a fact known to all. Less than one million people are registered under the tax regime which is only 0.5 percent of the population.
The tendency to oppose any economic sector reform is playing havoc with the economy. Parties across the political spectrum agreed on many political and autonomy issues by bringing in 18th amendment, but although they principally agree on many economic issues they are poles apart on their implementation.
If we look at the economic agenda of all political parties there is a consensus that revenues should be increased, all of them want to improve governance, eliminate corruption and reduce poverty.
However, they are not on one page on the transparent and fair measures needed to achieve these aims. There is lack of consensus on accountability law, as a fair and transparent law would hurt corrupt elements on both sides of the political divide. It has always been difficult to introduce reforms in multicultural, multilingual societies like Pakistan.