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June 28, 2019

Charter of economy


June 28, 2019

The former finance minister of the PML-N government, Ishaq Dar, floated the idea of a Charter of Economy in his speech in the National Assembly a couple of years back. But no initiative was taken to start a debate around this idea.

Now this idea has resurfaced during the current budget session of the National Assembly. Both the treasury and the opposition benches during the budget debate in Parliament have once again stressed the need to develop a consensus among political parties on an economic agenda for the country.

No political party has so far come up with concrete proposals and suggestions to kick start the discussion on a possible charter of economy. There should be wider debate on this charter among political parties, trade unions, economists, social and political experts, social movements and civil society groups. This debate should not be confined to some political leaders and parties representing the interests of the ruling classes.

As I can understand, the main purpose of such a charter is to bring the mainstream political parties on a minimum common agenda and to develop consensus on economic policies and direction to ensure continuity.

If I have understood the purpose of the proposed charter of economy correctly, then I’m afraid such a charter already exists. There is a general unwritten consensus among the ruling classes and the elite on many economic issues. Unfortunately, most of these mainstream parties defend and represent the class interests of the elite. There exists a grand consensus to protect the repressive, colonial and rotten existing state, economic and social structures. The ruling classes resist fiercely any attempt to reform the system.

There is a general consensus not to reform the police, judiciary, tax system, civil service and economic structure. There is a general consensus against any attempt to introduce land reforms or end the feudal land relations and landlordism. There is a consensus that the wages of the working class will be kept low to maximise profits. There is a general consensus to continue super exploitation and all kinds of discrimination in the country.

In my view, such consensus and common ground already exist between the mainstream parties. There are hardly any fundamental differences between the main economic policies and agenda of the mainstream parties including the PPP, PML-N and PTI. In the last 40 years, every government has implemented the same neoliberal and free market economy policies.

Both civilian and military regimes since the 1980s hardly deviated from the general framework of neoliberal capitalist policies. Every government implemented policies of deregulation, structural adjustments, and privatisation, liberalisation of the economy, cuts on social spending, minimisation of the role of the state in the economy, pro-capitalist labour laws and indirect taxes.

The only visible difference between the PPP and the PML-N was that the PPP tried to protect the rights of the workers and reluctantly implement some aspects of these policies; the party tried not to aggressively privatise state enterprises. On the other hand, the PML-N and the PML-Q governments tried to privatise everything. They almost dismantled the public sector. Entire sectors of nationalised industries were privatised. More than 87 percent banking went back into private hands. The PPP never threatened to renationalize the privatised state industries and enterprises. It also dropped the slogan of nationalisation from its manifesto and economic programme to embrace neoliberal free market economic policies.

There are differences of priorities between the PPP, PML-N and PTI. The PPP gives priority to the agriculture sector and agro-based industries. The PML-N usually prioritises big business, development and some industries. The PPP intends to give a generous raise to the wages of public-sector workers and pensioners. So there are differences among the political parties on some aspects but generally they work under the general framework of neoliberal and free market economic policies.

So our ruling classes and elite already have a sort of a charter of economy to defend and protect their interests. What we need now is a different kind of charter of economy. This charter of economy should be focused on human development, radical reforms in the economic and state structures, development of productive forces in both agriculture and industry, reforms in the tax system and reduction of indirect taxes, employment generation and creation of economic opportunities. A real charter of economy should focus on how to end poverty. Such a charter should include a plan to send every child to school.

Pakistan needs to overhaul and radically reform its education system. The education system should be based on skill, latest knowledge, innovation and scientific research. Pakistan needs to increase its investment on human development. Modern technology, innovation and production need an educated, skilled and innovative labour force. We can learn from China in this regard. Without developing a modern, skilled and educated labour force, our dreams to attract foreign investment and modern technology will never be fulfilled.

We cannot change our pattern of borrowing and spending and going repeatedly back to IMF and friendly countries for more money without significant development of our modern productive capacity. The increase in exports is directly linked with the development of productive forces.

We will continue to bridge the gap between our income and expenditure through heavy borrowing until our elite decide to pay taxes. Without widening the tax base and introducing a just, fair and progressive taxation system, efforts to increase revenues are doomed to fail. The government will continue to burden the already impoverished masses and middle class.

Our ruling elite need to conduct a serious evaluation and review of the neoliberal economic policies of last four decades. The ‘Great Recession’ of 2008 was the result of these policies on a global scale. We need to seriously reconsider our economic policies and strategies.

The charter of economy should focus on providing jobs, economic opportunities, basic needs and necessities to all citizens. Its main aim should be to end poverty, inequality, exploitation and repression. The charter of economy should be a charter of economic rights for the poor and downtrodden. This charter should aim to make an economy that should work for the interests and wellbeing of the many instead of the few.

The writer is a freelance journalist.