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July 15, 2020

Visionless governance breeds economic malaise


July 15, 2020

LAHORE: Covering the economy of the country is a tough job for economic reporters, particularly when things are moving in a positive direction, but under this regime when the economy is directionless it is much easier to pick any topic and write a book.

The cost of living is going up not because of a single factor, but multiple factors. Rupee depreciation is one factor, hoarding and cartelisation another, while bad governance is also contributing to the increase in prices.

Ruling party’s concentration on maligning the opposition through engineered accountability also has loosened the government’s grip on other important state affairs.

Abnormally frequent transfers and postings in the bureaucracy particularly in economic ministries also hampered sustainable economic planning. All these factors combined have increased the rate of corruption.

Power inefficiencies have increased despite massive increase in power tariff. The gas distribution companies are increasing their losses with every passing day.

All this is impacting the lives of the poor. This regime lacked vision. Poor should have been its top priority. Poor simply need food at affordable rates.

But food inflation has skyrocketed during the almost two-year misrule of this regime. It is for the first time in our history that we have harvested good wheat crop to fulfil year-long needs of the population; however, prices skyrocketed immediately after harvest.

Provincial governments are releasing their wheat stocks at lower than market rates to keep prices low. The government lacks the will to confront the hoarders who have more stocks than the state.

Sugar rates despite tall talks on accountability are as high as they were when sugar enquiry was ordered. Pulses rates have increased much above the impact of devalued rupee. Fruit and vegetable rates in the markets are much higher than the rates notified by the district governments.

The media regularly warned the rules of pitfalls of food inflation, but the advice was considered as opposition to government policies. Media was gagged in numerous ways, including withholding of advertisements, pressurising private sector not to advertise in some media outlets, and even by closure of some channels that were restored by the courts.

After failing on all fronts, Mir Shakilur Rehman, the head of the largest media group of the country was arrested and implicated in a 34-year old case. The government must realise that media is the mirror of public sentiments.

The crony media supported by the government might portray a rosy picture, but public at large does not believe them. Viewership and readership of gagged media is increasing regularly.

This government does not tolerate media criticism or criticism in the parliament. It does not believe in dialogue. The culture of intolerance is evident even during media talks of the ruling party ministers.

Things got out of hand because the institutions were weakened.

Current Federal Board of Revenue (FBR) chairman is the fourth one appointed by this government. Newly appointed chairperson of the Competition Commission of Pakistan is the third in last 23 months.

Securities Exchange Commission of Pakistan has seen three chairmen during PTI rule. The State Bank governor was forced to resign from his constitutionally protected tenure to pave way for an imported governor.

Change of guard at secretary level in the Ministry of Finance has been too frequent. Bureaucrats who tend to differ with the government policies are shown the door.

These bureaucrats are trained to put forward pros and cons of each policy and record their dissenting note. However, they are also trained to act as per policy of the ruling party if it is within limits of the law.

But mere dissent is not tolerated. Now the bureaucrats do not give their honest opinion about any policy because they know that the policy that comes from above would have to be implemented in total.

Bad governance has taken its toll on jobs. The government cannot hide under the havoc caused by Covid-19. We were in a precarious state even before the pandemic.

This government has taken record loans both domestic and foreign, but unfortunately almost 90 percent of the loans were taken for consumption.

Is it not ironical that the GDP of the country has declined by $51 billion in two years, while government expenditure has increased by over 25 percent?

Our fiscal deficit is increasing to unmanageable limits. Without adequate development expenditure you can never service your loans that have been wasted on consumption.