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Islamabad

August 5, 2016

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Pakistan’s economic problems-IV

It was decided that Ishaq Dar will announce 4.7% temporary growth rate along with the economic survey of Pakistan 2015-2016 on June 2. It is an example of a game with facts and figures. It has become the style of our government to present the facts according to its wishes instead of reality. It is no more trustable in the country and outside the country. Economic planning has lost its solid foundation. He said that same was the situation in the governments of Musharraf and Shaukat Aziz. They also played this game and never told the truth. The present situation, that the government has given figures of two types, firstly growth rate and secondly taxes and deficit, both are the continuity of the regimes of Musharraf and Shaukat Aziz. In the government of PML-N, the figures have also been distorted so that high growth rate could be shown in the previous years. In fact, it is totally unprofessional by the Statistical Department of Pakistan to change the figures. The change has been made in production sector but not in the parallel expenditures. That’s why there is no balance between the expenditures and the production. As a result, the national facts and figures show the 1.23 marginal trends that are not possible. Another trick was played in the matter of finance. Tax collection was shown more than reality and the tax and revenues that were collected before 2013 were also included in it. Similarly, the reduction in the deficit from 2013 to 2016 was presented with exaggeration and cannot be compared.

Economic planning and budget making is always based on the population, geographical division, educational and economic conditions of a country. Last counting of population was held in 1998. It is the demand of the constitution to hold it after every 10 years. It should be held in 2008. But the governments of PPP and PML-N did not fulfil their responsibility. It was assured that in April 2016 it must be held. But an excuse was made that the army is not available. It was delayed then. Now this fourth budget is also based on the estimations of population only instead of authentic information.

It is a great failure on behalf of the government. It is also the demand of the constitution that NFC Award should be given after every five years. Revenue should be distributed among the federal government and provinces according to settled bench marks. 7th Award was approved in December 2009. It was ended in 2014. 8th Award should be approved in 2015. But neither the Commission was established nor the Award was given. The revenues are being distributed in accordance with the previous Award that is not only the violation of the constitution but also injustice.

The government is not taking it seriously but it will have long-term effects. There should be provincial commissions also so that resources can be divided equally. The 18th Amendment was approved in 2010. But six years have passed and it is not being implemented. It can leave harmful effects on national integrity.

Deviation from the constitutional demand:

There is another very important constitutional demand that is being continuously ignored. Our country is heading for economic destruction and we are annoying Allah Almighty. It has been clearly stated in the Holy Quran that to take interest on money is as if we have a war against Allah and the Prophet (PBUH) and Allah destroys that economy which is based on interest. We are deviating from the constitutional demand of a strong and interest-free economy. Consequently, we have to pay huge loans and interest on it.

Unfortunately, the government of Nawaz Sharif exhibits the attitude that is against the constitution and Shariah. In the first regime of the PML-N in the 1990s, the Federal Shariah Court gave a decision in favour of an economy which is interest free. The MCB, an independent bank, filed an appeal in the Supreme Court against this decision. This process had been suspended for 11 years because of this appeal. Then in the government of Musharraf, the Supreme Court gave its historical decision. Then Musharraf not only changed the Shariah Court but also the Shariah Bench of the Supreme Court.

The case was sent to Federal Shariah Court again, where it is pending till today. The present government kept silence on this issue on the occasion of the first budget. A protest was held and as a result the finance minister established a committee, headed by the State Bank deputy governor. It was given the task to work out the procedure of change in one year. The deputy governor assured me that he would take this responsibility seriously.

According to my opinion, this committee should have presented its report in the mid of 2015. But the nation does not know what happened to the committee and its report. The prime minister and the finance minister are responsible for it and there negligence is not pardonable. Although this committee was regarded as an achievement of the government in the past. Should I have to remind the prime minister that in 1990s his father had advised him to perform this task with great responsibility? According to my information, when he was living in exile, he vowed in the Mosque of the Prophet (PBUH) before some people that if he would have a chance in future, he would surely free the economy from interest. Allah has given him an opportunity to keep his promise. He should not miss it. But, three years have already been wasted.

The economic challenges: 

There is no real awareness of the economic problems in the budget. That’s why the reforms that have been suggested before to face the crisis in agriculture and exports are at initial stage. The paradigm of economic development should be reviewed. An exact planning is required to determine aims, priorities and for the provision of the resources. The matter is not related to the temporary or partial reforms but of policy, priorities, exact vision, improvement of institutions, research and consultancy in policymaking, decision making, its imposition, capacity building and merit in the improvement of social and economic infrastructure. Every aspect is important but it appears that the government does not have a vision, capacity and power.

According to information, more than 40 institutions are working without their heads. Two most important ministries do not have their ministers. There is no research work in universities and institutions about the problems of the country. No attention is being paid to the research about the crops that what types should be grown in the environmental changes. According to information, the cotton crop is in crisis because the seeds and pesticides are ineffective and also not in harmony with each other. The seed that has been imported from China is not suitable in our conditions. But only for economic purposes, whole community is being punished. But the government is not interested in these affairs.

The example of the Central Cotton Research Institute Multan can be given in this regard. This institution does not have a permanent officer. An in-charge, who does not have the skill and knowledge of this department, is running it. In the Centre, research on cotton has been handed over to the Ministry of Textile instead of Ministry of Agriculture. Where nothing is being done in this regard. The problems whether they belong to exports or agriculture can be solved only through a complete change. Research and the use of modern technology are necessary. The problem is structural and cannot be solved by subsidies and zero rating.

Of course honest and hardworking people, along with resources, are needed for this purpose. There is no deficiency of resources. There is lack of honesty, skill, capacity and acquisition of resources and their correct usage. A lot of resources can be achieved by the correct mobilisation of the resources of the country and by including oversees Pakistanis in economic development. Corruption and smuggling should be controlled. Tax system should be reformed. There is a lot of talent in our country. It should be used effectively. New mindset, new team and new incentives are needed for it. Honest and capable government should be there. Whose primary concern should be the interests of the people and the country. It can make the fate of the nation in few years. The change that is needed is the same that is mentioned above. Unfortunately, our government and its budget is a sign of total failure. It is our real problem.

(Concluded)

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

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