Planners fail to curb corruption, show apathy to human suffering

LAHORE: Masses in general are deeply disappointed as the party that came into power by creating awareness about corruption and bad governance has failed to transform Pakistan into a vibrant economy through transparency and merit.

What they see practically is that the level of corruption is the same, but the rate of bribe has increased. The past practice of appointing individuals at important posts even in regulatory institutions still lacks transparency.

Instead of moving up, the economy is constantly going down. There is no job creation in the economy while job destruction is constant.

Apathy of the economic planners towards human suffering has increased poverty to unprecedented heights. This government announced to create two million jobs a year for the next five years and construct five million housing units for the poor.

Fifteen months on, the government has announced numerous public appeasing programmes, none of which has been able to arrest the ever increasing poverty.

The government did nothing to boost and facilitate the manufacturing sector, particularly the small and medium enterprises that generate huge employment opportunities.

Power and gas subsidy was granted to five exporting sectors only, but 80 percent of that subsidy was consumed by spinning mills that hardly provide 10 percent of the total employment in textiles. The domestic industry and remaining export sectors were deprived of this subsidy.

This resulted in negative growth of large scale manufacturing sector in past fifteen months. It has been accompanied with even higher decline in SME productivity.

High power and energy tariffs are more crippling for SMEs that lack resources to go for alternate sources. This is the reason that there have been more retrenchments than jobs created in the industry.

High inflation had already eroded the purchasing power of poor families sharply. Low paid workers from poor families lost more jobs than the high paid white collar workers.

High cost of doing business has arrested productivity growth. Increasing productivity is the only answer to resolve the current crisis.

The planners would have to decide whether they want Pakistan to be a trading, manufacturing or an agricultural nation. The current policies do not support any of these concepts.

Trading nations like Singapore, Hong Kong or Dubai allow imports at a fixed low duty and allow the export of all imported items to any destination in the world.

These countries are able to ensure full employment for their small population through services. This may not be a feasible option for a country like Pakistan, where two years population growth is equivalent to the total population of some of these countries.

The other option of supporting manufacturing sector requires an altogether different approach.

The government would have to improve transparency, governance and infrastructure to facilitate manufacturers.

At the same time the high cost of doing business would have to be tackled by bringing the mark-up to single digit and arresting high inflation in the country.

Agriculture cannot be promoted in the country if the government continued to encourage import of agricultural commodities as it discourages farmers to increase productivity. The farmers would increase productivity if they are assured that their efforts would not be compromised by importing agricultural produce.

Some poverty experts opine that the best way to reduce poverty is to increase the expenses of the poor so that they are motivated to work hard. In Pakistan’s case, that condition has been fulfilled but the government is depressing the incentive of the poor to work by disbursing monthly cash subsidies to the heads of poor families.

Industry has been left alone to struggle for survival and even the infrastructure has been allowed to deteriorate because of lack of funds. The looming global recession demands a prudent pro industry approach by the government that has not come as yet.

This government can still address the major issues faced by the manufacturing sector that required change in the mindset of the ruling elite which suspects every businessman as corrupt.

It should restore the confidence of the businesses so they start investing again in their country. The economic managers should announce enough measures to spur industrial growth so the nation does not feel humiliated when its leaders beg for aid.