When the government recently announced federal budget in Pakistan, the Opposition benches dismissed it as being “traditional” and “anti-poor.”
There was hardly anything new in the reaction of political parties or the common man. Burdened by their own socioeconomic worries, the general population barely showed any interest in the official budgetary allocations for the forthcoming year. Like other budgets in recent years, it was a non-event for the common man.
While the government continues to celebrate the much applauded stabilization in Pakistan’s economy, ordinary citizens are yet to benefit from these trumpeted achievements. Even as most macroeconomic indicators present an encouraging outlook, the government has failed to alleviate poverty and create more jobs in the country. This has even forced many to question the credibility of tall claims made by the government — is the economic stability story a lie and result of twisted facts and figures? For Pakistan to become a true Asian tiger and trickle down economic benefits to the masses, the government needs to redefine its priorities.
Budget documents point out that debt-servicing is expected to gobble up about 47 percent of government revenues. A corrupt and inefficient tax collection system means that the country’s own resources are only sufficient to finance defense and civil administration needs, and debt obligations. As a result, the government has been forced to compromise on public sector development programs (PSDPs). Unfortunately, most of the PSDPs are infrastructure-centric and do not allocate sufficient resources to health and education sectors. Pakistan spends only under three percent of its GDP each on education and health, lowest in South Asia. Why has priority been placed on building grand road infrastructure projects like the Lahore Motorway, Rawalpindi Motorway and metro-bus over education and health?
One major criticism of this year’s budget is lack of incentives and support for the agricultural sector, which is mainstay of the country’s economy. With about two-third of the population facing food insecurity, it is imperative that the government focuses on increasing crop production, investment in research and development, improving food supply chain and exploiting export potential of the country’s agricultural produce. Government policy is also required to overcome long load-shedding spells that affect tube well operations and stimulate private investments in the sector. To promote sustainable economic growth, the government should broaden the tax net rather than further pressuring the salaried class. In this case, the politicians should lead from the front and honestly pay their due share of taxes. Rather than doling out larger sums in Benazir Income Support Fund (BISF) program, more efforts should have been dedicated toward building vocational centers and improving the human capital of Pakistan. Although the government has announced new power projects, including renewable energy projects, the cut in subsidies to power sector may spiral inflation and severely impact groups with limited income. Further, there is a need to first reduce transmission losses and upgrade existing infrastructure rather than promising new investments in ill-planned power projects.
To get its priorities straight, Pakistan needs to undertake a drastic reform agenda that is aimed at removing socioeconomic inequalities and putting the stakes of country first. The whole governance system requires a makeover to bring in greater transparency, credibility and rationale decision-making based on the ground realities. This radical change is not possible without a strong political will, which is perhaps missing in the country’s current political scenario.
