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Pakistan’s economic problems — I


August 2, 2016

National annual budget and the budget session of Parliament have a great significance in a democratic society. This occasion helps a nation to understand the economic condition of the country, its financial resources and their consumption, the economic and financial policies of the government and its priorities. The capacity to face political, defence and other kinds of challenges of the past and present and what is the planning of its usage? The budget sessions also provide us with an opportunity to discuss all these things and to set economic targets of the nation and the country.

The PML-N and its allies have completed three years of their term and this fourth budget is a real opportunity to analyse the three years performance of the government. The first 100 days of a government are regarded sufficient to determine its performance and style in the democratic countries. But the period of three years is sufficient to judge its ability and to give an objective opinion about expecting something for the future. It should be kept in mind that in many countries, the term of a government consists of four years. America is a clear example of it. But, as in our constitution, this period consists of five years, that’s why the beginning of the second half should be considered a right time for analysis and accountability.

As I stated earlier, the national budget is not only a table of government’s financial resources and expenditures and a programme of resources and their usage for the coming year, but in these facts and figures we can see a complete and true picture of the government’s economic destination, vision, policies, strategies, priorities and objectives. An annual economic analysis is presented before the budget, which exhibits the economic conditions of the previous year, achievement of the set targets, or failure in achievement, and presents the economic and financial policies whether they are successful or unsuccessful. We can understand the condition of the previous year in the perspective of the history of our country through it and with the study of the three months, the state of the economy, reports of the State Bank. The budget of the new year and the details of the income and expenditures of the previous year consists of several thousand pages is presented before the Parliament, Senate and the nation. So that the nation, economic, political and educational circles, media and other people can express their opinions. Although Senate does not approve the budget, it has the time of two weeks to present its recommendations. It is a responsibility of the Parliament to give it a final shape in the light of all recommendations. It has three stages. Namely, a general debate on budget after presentation, then accountability to the fixed expenditures (cut motions) and then approval of the budget. The cut motion is an important stage. If the opposition approves a cut motion, the government has to retreat and it becomes necessary to review the budget.

In most of the democratic countries, four to six months are spent to make a budget. So that the financial and economic matters can be reviewed keenly at every level. The relevant committees of assembly and Senate work for whole year in America. This process begins three months before presenting the budget in Britain. In Britain and other democratic countries, Parliament discusses the budget for four to eight weeks after its presentation and then approves it jointly or on the basis of majority. The process of budget requires seriousness, country-wide debate and discussion and a settlement among the elements that are being affected at any level. Unfortunately, such kinds of things do not exist in Pakistan. Parliament has totally failed in playing its role. All the government regard the budget as a tradition only and a source to implement the dictatorship of the government. When the PML-N was in opposition, it was full of aggression. It called the style of the PPP government only a dictatorship. Now, it is in power and has adopted negative attitude without any hesitation. The worse example has been set this year.

The humiliation of the budget

It has been demanded in the recommendations of the Senate for eight years that annual economic analysis of the budget should be issued at least one week before, so that it can be studied deeply. To issue the analysis only 24 hours before is a joke. The present Finance Minister was also an active participant in this demand. But in his government on the occasion of the fourth budget, the analysis has also been presented one day before. Similarly, in his government, a book of extra expenditures has been presented as it was presented in the regimes of the previous governments. It is against the spirit of the constitution and the democratic rules. It is a misuse of a constitutional relaxation for a special need or compulsion. These additional expenditures consist of Rs261 billion. And the purchase of luxury cars is also included in it. The consultation which is required for the preparation of a budget is absolutely ignored. The most unfortunate is the attitude which has been adopted in the Parliament when the budget is presented.

It is for the first time in the history of the Senate that the finance minister has absented himself while the recommendations of the Senate have been approved and the Senate has to send its recommendations without his ending remarks. The budget session has to be adjourned for many times because of lack of the quorum in the National Assembly. The finance minister has remained absent during the budget session most of the time in the Parliament. Even the members of the ruling party have complained that no one is here to listen to them. An MNA of Muslim League-N has torn his written speech into pieces saying that there is neither a minister nor a listener. According to the information of a newspaper, it is for the first time in the history of the assembly that more than 60 members of the ruling party have protested and staged a walkout. How unfortunate. Such example of disgrace of the budget and the budget session cannot be found in the history of our Parliament also. There was a time when only nine members of the government and opposition were present in the assembly. If we consider the debate in the session, hardly two or three speeches can be regarded as satisfactory. Unluckily, the MNAs and ministers do not seem to defend or explain the budget. No speech from the official benches can be regarded as worth mentioning.

If we talk about the media, only four or five ministers and consultants repeat the same statements in the media. And no one has to say anything serious on important issues. The opposition members’ speeches cannot be regarded satisfactory at all, though it was a golden opportunity to hold the government responsible over its performance.

The behaviour of the government is also very shameless. The budget making has become the responsibility of the finance ministry only. Although the planning commission, trade, economic affairs, electricity, gas, petroleum, agriculture, education, health and labour must have a prominent role in it. The present condition shows that these departments do not have any role in the budget making and its defence especially this year. Even the new ministry which was established for the self-sufficiency of food seems disappeared.

I am sorrowful because I can never expect such a visionless, soulless and superficial budget from the finance minister and his team. In the elections of 2013, the PML-N claimed that it has an experience, a programme and a team of efficient people and it will change the destiny of the country only in six months. The reality is that the three years have passed but the situation is not changed. The hardships of the people are increasing. Prosperity is rare. Poverty is everywhere. Unemployment is unimaginable. Debts are increasing day by day. Economy is not flourishing. In 2015-2016, agriculture sector for the first time in previous two decades did not achieve its targets and presenting a picture of total despair. The production level has become low than the previous year. The role of agriculture in the growth of economy has become negative. Similarly the imports that are an important source of income are decreasing continuously and in June 2016 the annual imports are less than the imports in 2013. Same is the case of foreign investment which was $3 billion before but now it is only $1 billion. It is not the case that these circumstances are accidental. Study the economic survey of the previous three years, the three months reports of the State Bank or go through the reports of the World Bank and the IMF. You will note that the decline of the economy, especially agriculture, low level of imports, the damage caused by energy crisis, high inflation rate, reduction in purchasing power, increase in debts, decrease in foreign investment and dissatisfactory trends of savings, deterioration in health and education, undisciplined and unbalanced housing in cities, everything is discussed in these reports, sometime directly and sometime indirectly. But the government always raised the slogan of liberalization and the globalization of the economy. Now it is embarrassed.

The government announces Kisan Package and sometime new incentives for exports. No doubt, immediate steps are badly needed in both sectors. But the issue is the total economic policy, priorities of the strategy, equal distribution of resources and good governance. Crisis does not belong to agriculture and exports only. In fact, it is the crisis of whole economic policy and the failure of all important institutions. Unless the reforms are not maiden the policy, the structural and the institutional weaknesses are not overcome, we cannot expect any change in the circumstances. We can’t find any solution to the problems of our people and the country. More than that there is the problem of the countrywide corruption and to spend the national wealth for personal interests. This problem is destroying the economy and creating remoteness in the relationship of rulers and the people.

(To Be Continued)

The writer is an ex-minister of Gen Zia era, former senator of Jamaat-e-Islami and head of Institute of Policy Studies in Islamabad

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