As for as economy of Pakistan
is concerned, it is in sever crisis since 1998 right after the nuclear tests
carried out by Pakistan. This country had faced enormous economic and political
sanctions at that time. After 9/11, situation became worse due to involvement in
“War on Terror”. Economic imbalances always remain nuisance for the nation.
Since 1998, Pakistan is facing budget deficit, which is also called as “Secular
Decline” of a country. Countries if do not overcome this deficit, then they face
gradual decline and until they fell down in the list of failed states.
This secular decline can be controlled by two ways, either with reduction of
governmental spending and increase in taxes or second option is to get loans
from IMF. First option is always a very intricate one, in which political
governments can’t bear public pressure, so they choose second option, which is
augmentation of loans by IMF. But this is not a solution, it is itself a
problem, it only gives a short term relief to the economy of the country.
Political decisions always become the reason of budget deficit. In last five
years, we had witnessed that PPP augmented extensive loans from IMF and World
Bank. But they didn’t tried to increase the income of the country. They misused
those loans in unproductive projects. They put more burden on Pakistan’s economy
by recruiting thousand of new people in those public departments which are in
loss for many years. They also increased the wages with almost 150% ratio. They
launched Benazir Income Support Program and spent almost 75 billion rupees.
Their main objective was to make votes rather strengthening of economy.
At a glance this budget is definitely hampering the aspirations of the common
people. But for the macro economy of the country it would be more suitable
budget. Government tried to reduce the spending and enhanced the income of the
country. But after public pressure, Finance minister overturned the decision of
the enhancement of wages, and according to him it was a hard decision, that is
why he took back this decision. Now the question is who will take such kind of
hard decisions? If new government having clear mandate and still being
blackmailed by some of employees, than who will be responsible of the turmoil of
macro economy in the long run.
Circular debt cannot be controlled until hard decisions taken by political
governments. Nawaz Sharif, the leader of the PML-N has shown by this decision
that he is politician only, not a leader and he only wants time for ruling this
country rather leading the nation. Leaders always take hard decisions; they do
not think about the present situation, they think about the future of the
country. Leaders always have clear vision for decades ahead for public, and
ordinary politicians only think about the present situation as present
government is doing the same.
This budget has also allocated billions of funds to those sectors which are not
lucrative. They are spending on the metro bus service, lap top scheme. But they
are not generating the means of the income. Rather generating the means of
income they are allocating more budgets for Income support program. There is a
comprehensive industrial policy needed at government’s end. This industrial
policy will be multifold beneficial for macro as well as micro economy of the
country. First it will generate more taxes for government and will also enhance
the exports of the country. It will also reduce the unemployment ratio in the
country. Industrial policy will give rise technical education, which would be
helpful for enhancement of literacy rate in Pakistan. These all things are
possible, if government establish industrial zones, impose less taxes over
infant industries. If they start to facilitate the investor, it would be highly
in the favor of Pakistan’s macro economy.
There are certain other reasons behind this economic crisis. But political
mismanagement is on its zenith. It needs only political determination and proper
management to overcome over this crisis. Government should have to re-allocate
funds to those sectors which are profitable. They have to give them jobs in
private sector and this private sector must remain under the supervision of the
government. Policies have deep effects over psychology of the nations,
government should not create beggars by giving them short term assistance,
rather they should make them more productive citizens of the country.
By Khurram Abbas
[email protected]