Advertisement
Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

Opinion

March 20, 2015
Advertisement

Trampling people’s basic needs

Opinion

March 20, 2015

Share

During the last four decades, every government that came to power pretended that it was there to serve the people of Pakistan. Every finance minister boasted of introducing a people friendly budget in the National Assembly each year and every chief executive claimed to have managed the economy better than the others for the welfare of the people. But in reality they all pursued their own economic agenda of self-enrichment relegating people’s basic needs to a secondary place with the result that their sufferings continued to multiply.
Beneath every policy move, there was a hidden motive of making money for personal gain or giving opportunity for ‘rental income’ to near and dear ones. While pretending to serve the people, they indeed engaged in the enrichment of themselves, their friends and families. All governments framed fiscal, monetary, exchange rate and other policies that made the rich richer and the poor poorer. The PML-N government is engaged in a similar exercise and its economic priorities are not in sync with the basic needs of the majority of the people.
Prime Minister Nawaz Sharif is busy inaugurating mega prestige projects of the type that were favoured by the Mughal emperors. He unfortunately equates economic development with multi-lane highways, bullet trains and modern airports. It seems that either our economic management team does not have the ability to identify and articulate the real policy issues before him or he does not have the capacity to understand the ailments of the economy that must be addressed on a priority basis to be helpful for the poor.
There is also the probability that the top leadership of the PML-N government is consciously driven by its desire to promote the economic interests of only the rich and powerful, who constitute its political backbone. Whatever the reason, the PML-N government is taking the economy in a downward direction without leaving any hope for the ordinary people of the land.
From the

perspective of the majority of the people, it should be obvious that they are being crushed under the wheels of unemployment, inflation and poverty. These are man-made and not natural problems and they reflect the impact of imprudent and anti-poor economic policies being pursued by the government.
Every child born in Pakistan carries the burden of government debt of close to Rs100, 000. He/she faces a high rate of child mortality and those among them who survive are mostly underfed and undernourished and are unable to get good education and gainful employment when they grow up. Most of them have no access to clean water, sanitation and medical facilities and some of them work in the palatial houses of the rich more or less like slave labour.
The educational system is broken, underfunded and poorly managed. There are inadequate medical facilities for the poor for lack of budgetary allocations and proper planning. There is lawlessness in the streets and people are deprived of fair play and justice. The human rights of the poor and the laws of the land are violated by the ruling elite to promote and protect their own interests.
The government is not paying any attention to its fundamental responsibilities towards citizens to meet their basic needs by creating equal opportunities for every child for education, medical treatment, employment, security and economic advancement. The shrinking domestic employment opportunities in the formal economy forces them to go underground or leave their country by hook or by crook in search of means of livelihood necessary to provide for those they leave behind. Human resource, a valuable asset, is being wasted and brain drain from the country is in full swing.
The agricultural sector is threatened with acute water shortage that will hamper its production. The industrial sector is faced with bottlenecks like shortage of electricity and gas that impede fuller utilisation of installed capacity and its further development.
The defence and debt-serving expenditure accounts for almost all the tax revenue. The rest of the government’s expenditure is being financed by internal and external borrowing. There is a huge amount of floating debt that the government is unable to clear. Public sector enterprises are incurring a large quasi-fiscal deficit that is being financed by borrowing.
Exports are stagnating and despite a sharp fall in the dollar cost of oil imports, a large trade deficit continuously eats away the entire home remittances and still necessitates net additional foreign borrowing. The rich are engaged in minting money and tucking it away in Swiss bank accounts and real estate in Dubai, London, Paris and New York. On the other end, the poor labourers working abroad are remitting their hard-earned income to the country to feed their families.
On the taxation side, direct taxes are collected from only those who are honest or weak; tax is not really imposed on income and wealth. Its withholding method of collection makes it regressive and discriminatory in its impact. There is a heavy reliance on indirect taxes which fall on the poor and lower income classes. The government borrows massively from the domestic banking system which fuels inflation. Inflation is the cruellest form of taxation that is collected from those who have the least ability to pay.
Instead of reforming the tax system to increase tax-to-GDP ratio, curtailing wasteful expenditure, and lowering of government borrowing, the finance minister is engaged in massaging fiscal data to make it look good. Instead of moving towards self-reliance, he is borrowing heavily from the international capital markets in addition to from bilateral and international sources. Instead of developing water resources and building up of electricity generation capacity and funding health, education and other social sectors, he is setting aside meagre resources to finance mega prestige projects favoured by his prime minister.
Instead of freeing the banking system from the burden of financing the public sector he is engaged in pre-empting banks’ resources to meet fiscal deficits. Instead of respecting autonomy of the State Bank of Pakistan, he is treating it as a housewife of the Ministry of Finance. Instead of taking steps to promote financial intermediation and channel bank credit to productive uses in the private sector, the State Bank is slavishly busy in printing notes on the instructions of the government.
While inaugurating mega prestige projects, the prime minister parades them as symbols of prosperity for Pakistan without ever mentioning how he plans to finance them. He plans to connect Karachi to Peshawar, Gwadar to China and Quetta to Afghanistan through a network of highways unmindful of both the lack of resources and the economic misery of the majority of the people who will be living at a subsistence level around those roads.
This country was created for the ordinary people of the Subcontinent. It has been taken over by a tiny minority of the rich elite and is being managed by it for the rich. The civilian ‘dictators’ emerging from rigged elections and political manipulations are doing no better than the military rulers. The basic needs of the people appear nowhere in the agenda of those who have taken over the country.
The only way to get rid of the indigenous colonists is through an awakening of the proletariat at a large scale. In its absence, the basic needs of the majority of the people will continue to be trampled by the greed of a tiny minority of the rich and powerful that has taken control of the country and its resources.
The writer is a former governor of the State Bank of Pakistan.
Email: [email protected]

Advertisement

Comments

Advertisement

Topstory

Opinion

Newspost

Editorial

National

World

Sports

Business

Karachi

Lahore

Islamabad

Peshawar