Ramshackle policies and compromises
By DR ZAFAR ALTAF
is Pakistan under siege? If this siege is to be done away
with what is likely to be the outcome for the population.
Has the political system
any role in mystifying economic systems? Should the neo
liberalism rule the waves of this country? What vanguard and
what rearguard policies should be followed? The global reach
is now towards neo liberalism or the Washington Consensus.
This is the dominant ideas
these days and it was due to his desire to find a viable
alternative and the art of the possible to remove the
stagnation in any economy developed or less developed.
Its form needs to be
examined for there is a considerable amount of confusion in
the institutions of the country. Tongue wagers have
increased this confusion.
Neo-colonialism is committed
to orthodox macroeconomic stabilisation, especially through
fiscal balance, achieved more by containment of public
spending than by increases in tax take. Federal Bureau of
Revenue [FBR] has been reorganised to do just the opposite.
The FBR has to escalate its
take and meet an ever growing revenue requirement of the
government. To integrate with world trade even if there is
no iota of comparative advantage. The case with India is
different. Indian farmers enjoy subsidies on water, energy
and chemical Fertilizers. WTO was also a part of the same
Whether that was beneficial
or not to the weaker economy was different matter. The
integration that we have been able to achieve in what we
consider ourselves to have some degree of comparative
advantage is to do with agriculture and agro-based industry.
In horticultural we have gone from 0.03 percent to 0.09
percent of world trade.
If that is good performance I
will have to shoot myself in the foot. Words and verbal
garbage abound in making statement that our mango has no
equivalent and that our citrus [Kinnoo] is world class. Well
the go and sell.
Our textiles have been a
major export earner but that is also with massive help by
the government[s]. Every new government succumbs to their
demands. Their demands are notorious and are dysfunctional
in nature. The WTO's established rules are not even
available in the country.
There is no need for we like
to be told by international agencies what is good for us.
Privatisation is sound principle of neo-liberal polices.
Pakistan has taken upon itself to privatise without
consideration as to consequences.
In any case the order is not
to encourage concentration of industry and economy in a few
hands but to have dispersal of entrepreneurs. It requires
the government to remove itself from production and
commercial activity but not as dogma and a doctrinaire.
The public domain of
economics in Pakistan is studded with what should never be
done. Recruitment is to be based on merit. Merit
determination is not by a set of procedures but by the
integrity of the selection process. Scouting is very much a
part of that selection process.
The only problem that we as
Pakistanis have that we choose to pick our near and dear
ones for the job. When labour becomes surplus there is need
for social safety nets. The labour is not to blame for their
The inequalities remain as
the social safety nets are not compensatory enough. In any
case the unemployable skills remain with the poverty levels
that we have.
The society at large has a
number of other planks that give rise to inequality and
hence poverty. The imagination for effective compensatory
policies is just not there; morons roaming around in the
corridors of power.
There are normally two themes
that are always in contention-the theme of adherence to
market-based arrangements [though what these are and how
these are to be implemented are not known to the majority of
the policy makers.
The second is through a
redistributive correction of tax and transfer as the social
activities of the government in power. Tax regime is not
only with the FBR but with such actions as will make life
for the poor more difficult. Thus each traffic warden has a
target for fining the cars on frivolous grounds and he must
deliver this to the institution every day.
The other example that comes
to mind is the enhancement of bus adda which has gone up by
three hundred percent from Rs 35000 per month to Rs one lac
per month. Other poor taxations are available cash and in
There is financial repression
that is going on for the pet ego projects of the powerful
politicians. The language of market efficiency joins the
language of social conscience. Are we then not expecting too
much from our politicians.
Three tenets form a part of the operative version of the
neo-liberalism policies. For savings being low the
government has to rely on Foreign Direct Investment. Given
our war on terror we have failed to attract investment.
Given Pakistan's low saving
rate we now have to garnish our saving rate by an interest
rate that may well be astronomical; a result of low interest
rate in the past. Financial repression can be of many kinds.
And in the case of Pakistan these repressive policies will
keep on emerging as hydras.
In one case the government
managed to stifle a rural economy that was generating 43
billion rupees per day and that too because there is no
respect for private property. The textile city in which the
poor farmers land will be taken at token price hit the
The second tenet is renunciation by the state of any
affirmative strategy of national development. We still hold
onto the Planning commission of the 1960s.
And I can go on. No
agriculture market can be developed by the private sector
and the closed shop of the middleman still exists. Only an
arhti's son can be an arhti; primogeniture at its best.
The third tenet has to do with monetary stabilisation with
very high interest rate and anchored on exchange rate
The issue really is that can
we disable the government from its egoistic spending? Can
the policies by themselves create a sense of sensitive
action? Or are they isolated within their own country? I
have not spoken off intangibles and the outcomes when the
intangibles of honesty and truth are not fulfilled.
Think a while at the many
times that you and I have taken the cheat route to save our
skins. Courage and conviction are lacking.
Shall the poor only inherit
the kingdom of heaven while the liars and the rich inherit
all the comforts? There is something wrong in us and we have
not x-rayed ourselves to determine what we have done wrong
for the last six decades.