Poorly ever after

LAHORE: Economy impacts every citizen and the governments the world over try to make all fractions of society feel good about its economic plan.

In fast growing economies some workers do lose jobs to automation but deprivation from economic boom is minimal. In Pakistan we have seen several periods of jobless growth. Jobless growth means inability of the economy to provide jobs to at least two million (women excluded) people that enter the job market every year.

In periods of recession numerous workers are relieved by their employers. In those times even the corporate sector posts losses and the economy is as bad for them as it is for the workers.

Economy is in good shape when the state is able to collect enough taxes to meet all its obligations, while it is in bad shape when the government has to borrow money for consumption. In a debt ridden economy things look rosy if the need for borrowing starts reducing. The economy is in a precarious state if the debt, particularly consumption based debt, continues increasing year after year. This is happening in Pakistan.

The PPP (Pakistan People’s Party) government in its 2008-13 tenure accumulated more debt than the total debt of the past four decades. The PML-N (Pakistan Muslim League-Nawaz) government continued increasing the debt during its five year tenure from 2013-18. The present regime has added more debt in only three years than the debt accumulated by PML-N in its five years rule.

We are not only accumulating debt but also a large unemployed workforce. The government statistics might show the unemployment rate is 5-7 percent but the reality is this includes part-time workers and all the adult family members in agriculture are considered as employed (there is no proper record of monthly payments to these workers). We cannot hide the facts with this kind of camouflaging.

We must wake up to reality. We are at the brink of disaster. The last three governments managed to run the state on borrowing only. In the private sector the workers are either given marching orders when the enterprise is in regular loss or they reduce the salaries by the same percentage of the entire staff to avoid layoffs. We continue to increase the salaries and perks of the ministers and parliamentarians as well as the government servants. The increased expenses are paid from borrowing. The perks and salaries of even the loss making public sector enterprises continue to increase. The state continues to employ and pay workers and highly paid management staff in even those entities that are not operating anymore.

There was nominal growth in the first two years of this regime. In the first year it was 1.9 percent and in the second –0.4 percent because of Covid-19. Last fiscal the GDP growth was 3.94 percent but it was almost jobless growth as the manufacturing sector (large and small) is mostly operating below the peaks it attained years back. The corporate sector is buoyant as it is earning handsomely. The stock market players have become richer as the share values have increased. The rates of everything from commodities, edibles to the services have sharply increased in the last three years. Incomes of the majority of the population have not increased proportionately to compensate for hefty price increases.

By this standard the economy is not moving in the right direction for the poorer segments of society. Despite improved GDP growth they have no hope of even maintaining the living standards they enjoyed three years ago. The poor though never lived comfortably in the past as well but they are worse off now.

Sadly those that minted money even in recession are not prepared to share their booty with their workers or the society. To add insult to injury, corruption has also multiplied. The corrupt have ensured any spike in prices does not puncture their inflated living standard. Petty bribes have now become a regular expenditure item for the poor.

When the economy goes bad business is as usual for those having 'money muscle'. In the private sector they resort to hoarding, speculation and manipulation, under-filing production and increasing prices and their profit margins through cartels to ensure their vaults are full. At the bureaucratic level the rate of bribe increases in all public service departments including police, utility providers, and even district government officials. The economy thus remains buoyant for them even during recessions. For common citizens life is a nightmare both in recession and boom.