A Corona Budget - News Analysis

ISLAMABAD: As Prime Minister Imran Khan prepares to unveil his government’s third budget on Friday, he needs more than just a few crunched numbers to carry Pakistan forward. The brutal shock from the Corona Virus which added to a rare contraction of Pakistan’s economy during the financial year that ends this month, has only fuelled a collapsing policy framework all around.

The last budget presented about a year ago was anchored on a series of unrealistic ambitions, hooked centrally on the target of collecting roughly R5,500 billion in taxes over the next twelve months. A year later, the collections are likely to fall by just below 30 percent – a staggering failure for the ruling structure.

Meanwhile, the 13th loan programme to Pakistan from the International Monetary Fund (IMF) is yet to become any more impressive than the previous twelve. To date, none of the IMF loan programs have helped pave the way for Pakistan’s economy to embark on a long term road to sustainable recovery. For average households across Pakistan, there is much evidence of IMF inflicted economic pain without any relief in sight.

Even if the coronavirus pandemic was taken out of the configuration, Pakistan’s economic outlook was already lackluster and surrounded by mounting challenges earlier this year. Since his election in 2018, Khan’s promises to create a new Pakistan have largely collapsed.

The commitment to clean up Pakistan and create a relatively corruption free country has largely failed. Across Pakistan, graft remains a very visible reality in daily lives with ordinary households far from witnessing a visible change on this front. And while the ruling structure appears determined to target the so called moneyed barons on different fronts, the credibility of the accountability exercise lies in tatters.

Across the world, lessons from some of the more prosperous economies have vividly illustrated the centrality of one powerful lesson – that economies just don’t thrive without some assurance of the rule of law. In sharp contrast, the blatant targeting of opposition leaders in the anti graft exercise has drawn out two equally vital lessons.

On the one hand, the anecdotal evidence from this exercise suggests that the trail of corruption has only led to the doorsteps of opposition figures, leaving out multiple other vested interests across the country. On the other hand, the politicization of Pakistan’s anti corruption drive has virtually led to an abdication of long term institutional reforms and long overdue deregulation to create a relatively graft free context.

Locked in this baffling environment, the future appears to be far from promising. Early reports on expectations from the budget suggest that Khan and his team may be looking to set a revenue collection target of more than 25 percent over collections for the present fiscal year. If true, nothing could be more absurd in a contracting economy with the jury still out on the scale of losses from the Corona virus along with the fallout from a global economic slowdown.

Meanwhile, other aspects of Pakistan’s policy framework remain in shreds with little prospect in close sight for a bold turnaround. The handling of the coronavirus with the prime minister trailing behind a consistent aggravation on the ground has only reinforced the impression of ‘a too little, too late’ trend.

While the world’s best more successful countries on this front moved early and decisively to combat the Corona virus, prime minister Khan remained ambivalent. Relying on the message of a ‘smart lockdown’ to protect an already sinking economy, Khan’s choices trailed behind fast mounting challenges.

Eventually, the spiking numbers of Corona virus victims in Pakistan today have exposed the rapid rise of this scourge while the economy is far from protected. In the process, gaps in Pakistan’s already overstretched healthcare framework have been further exposed.

At the same time, an ill conceived focus on the construction sector backed by a ‘no questions asked’ policy for investors under Khan’s watch, has swiftly returned Pakistan to its legacy of money laundering. Clearly, opening the doors to facilitate money laundering was nowhere even remotely on the agenda of the Pakistan Tehreek-e-Insaf (PTI) as it scored its maiden victory in 2018 to form the federal government.

Going forward, Pakistan remains ridden with a growth gap where the most promising sector of the economy – agriculture, has been badly neglected. In the past year while key crops fully or partially failed, the government also failed in tandem to appreciate the urgency of combating the latest and fast spreading locust attack. First reported in June 2019, it took the federal authorities just over six months to finally declare a national locust emergency. And its only in recent weeks that the arrival of widely respected Minister for Food Security Syed Fakhr Imam has been followed by a decisive push to address this calamity.

Together, the outlook for Pakistan based on events of the past year only suggests a dismal future. For many, its time to consider a new ruling dispensation in the name of a national government.

That may be an unpalatable conclusion for the PTI but it’s the one writing on the wall driven by real life trends. Given the scale of the challenge confronting Pakistan today, the paramount question is just one – is it within the capacity of a single political party albeit with a large

performance deficit to meet the challenge.