LAHORE: Politicians with very low understanding of economy are either ‘guided’ by their businessmen supporters or fall prey to bureaucracy that advice them on ways to manage economic crisis through short-term measures instead of long-term planning.
The politicians lacking economic knowledge had always shown their interest in evolving business policies. Consultation is meaningful only when you know about the issue. Every head of the economy, even before assuming the power, knows that the country is facing grim economic situation, from shortage of finances to lack of measures to enhance the tax net.
They don’t even have the knowledge of the problems being faced by the trade and industry and wonder why some sectors are not performing well.
After assuming the power, these politicians tried to gain knowledge through interaction with all the stakeholders, but to no avail. The policies suggested by one set of stakeholders are in conflict with points asserted by the other stakeholders.
The naive economic managers get confused, which led to poor economic decisions.
Some act on the issues in haste and some delays decisions till they are clear about the way forward. The present regime acted both ways. The economic managers promised several measures of the top five exporting sectors, but after second thoughts, they backed out of a few of its pledges. This creates uncertainty in business circles.
The economic managers fail to realise that the stakeholders with vested interests come up with skewed policies that are more injurious for the economy.
Even these policy decisions are not implemented fully because of non-coordination between different economic ministries. Most of the time, the Ministry of Finance is the stumbling block towards development as in the case of shortage of funds, its first priority is to cut the development budget; then health and education spending instead of strictly ensuring austerity in the current expenditures and revisiting unnecessary subsidies that were always allowed to overshoot.
If we look at all the supplementary budgets in the previous three decades, it would be found that development budgets were reduced drastically during each year and requests for all supplementary grants were for the non-development expenditures.
The Ministry of Finance releases funds for projects approved by the prime minister or influential on political grounds. The economically naive economic managers put plug on the development projects of the previous government that resulted in wastage of huge amount and cost overrun.
The PML-N government in Punjab did not start the completed cardiac center in Gujrat during its five-year tenure.
The present regime is unduly delaying Orange Train project by withholding funds. This is maintaining difficulties for the citizen because a mess created around its route spread across the city.
The Benazir government in 1994 reduced the Lahore-Islamabad Motorway from four to three lanes. These delays of approved sanctioned public welfare, trade or industry projects impact the economy badly.
No prudent economic manager would tolerate such delays in public welfare projects or investments needed to improve the competitiveness or viability of trade and industry.
The political appointees in economic field have no idea whether it would be possible to fulfill the promises they made or not.
They just pass that moment to get huge applause from the businessmen and then forget the matter. This creates an atmosphere of mistrust and uncertainty in the economy.
The planning of the private sector suffers, as they do not know whether to expand the manufacturing facilities or not because they are not sure about inflation, rupee value or the availability of power and energy for the expanded project.
There is a dire need to have competent economic teams in the political parties, which would enable the ruling party to adopt a crystal-clear economic plan, while the economic division of the shadow cabinets in opposition could guide the government where they go wrong. This is being practiced not only in developed countries, but in India, as well.