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January 22, 2020

Growth rhetoric unlikely to become reality under present regime


January 22, 2020

LAHORE: After much heel-dragging the documentation process is back to square one. In fact the turnover tax for small traders has reduced from 1.5 to 0.5 percent. The traders would have accepted 1 percent but o.5 percent appeased them.

We cannot document the economy through annual turnover, where no record is provided to prove the actual turnover. It seems that documentation exercise started in 1987 has finally been shelved and we will be living with grey economy for a long time to come.

This government is hero in rhetoric and zero in deeds. Governments gain strength with the passage of time; but this one that assumed power giving an impression of strong and honest regime has turned out to be a tame and vindictive establishment. It has gradually lost its writ, if there was any in the first place.

It took harsh measures to increase revenues but increased its expenditures much beyond the additional resources it generated. It tried to reduce the current account deficit by giving the impression that it was curbing luxury imports.

However the measures it took curbed the essential imports of raw materials that effectively plunged the productivity in the country. The Prime Minister ordered two months back to take measures to control the prices of daily use items.

The inflation in the last months touched its peak as the prices continued to rise. The government allowed the export of wheat without realising it may create shortages at home. It allowed sugar exports and now we are seeing a surge in rates.

We saw the historic high prices of wheat, sugar, tomato, edible oil, and many other essential items during the tenure of this government.

The solution to our problems lies in better governance. The governance is at its lowest ebb in Pakistan. Now even the ruling party lawmakers concede that the rate of bribe has increased in Pakistan to new heights.

We have no proper plans to something about it. We listen to rhetoric that 2020 would be a year of growth and job creation but the local economists and now all global institutions insist that 2020 would be another year of growth compression for Pakistan.

The latest being IMF (International Monetary Fund) the patron of our ‘stabilisation’ plan that put the 2019-2020 GDP (gross domestic product) growth to be 2.4 percent.

We achieved a growth of 5.5 percent in 2017-18 and that growth rate according to the IMF would remain elusive for Pakistan during the entire tenure of this regime.

The nation must brace for more poverty, more pain and more hardship. The rulers would go on increasing the non-development expenses and tax rates and non-tax levies.

The development agenda would remain at the back burner. Inflation is not going to come down in the coming months. The increase in wheat and sugar rates would take the food inflation to new heights.

The expected increase in petroleum products and natural gas rates would provide fodder for inflation. We do not know whether the government has learnt its lesson or the incompetence has finally peaked.

The accountability mantra still remains one-sided. The resources lost due to corruption and incompetence during past one year remained out of the accountability ambit.

This government lacks the expertise in all fields and is trying to invent the wheel all over again. We are in a mess.

The government that came on the promise of lifting the lot of poor has made them poorer. This government promised to take the exports to new heights but the measures it keeps taking are keeping the exporters on their knees.

The exports are not increasing but the export industries are in the process of closing down. We have marginalised the domestic industry. We have lost our economic sovereignty to the IMF and political independence to the Middle East countries. Yet we boast that Pakistan is heading in right direction.