A U turn budget?

By Miftah Ismail

Every year, the government of Pakistan publishes a report called the Economic Survey of Pakistan which details how our economy has performed over the last fiscal year. The survey has reams and reams of data but doesn’t have, thankfully for the PTI government, an overall theme. For if the survey had a theme it would have to be titled ‘Incompetence is costly’. This is both ironic and tragic as Prime Minister Imran Khan has coveted and chased power for 22 years but never learnt how to govern. Once in government, therefore, he knew to take a helicopter ride home but didn’t know what to do about the economy.

If we consider for a moment why Khan has made so many U-turns, we are forced to conclude that his overarching principle in politics has only been his desire for power. For a political party that’s been in politics for over two decades, do we know the PTI’s core beliefs? Is it right of centre? Does it believe in federalism? Does it believe in an independent judiciary?

Does it believe, for instance, in privatisation? Because when the PML-N tried to privatise public-sector enterprises, the PTI blocked that move. When the party came to power, it said it would form a holding company and not privatise. But now it says it will. What does it actually believe in? The PTI used to oppose tax amnesties and Khan last year even threatened people against using an amnesty offered by us, thus trying to make it fail. But today their own government has offered an amnesty.

Yes, the prime minister has changed a lot of ministers so far and blamed them for putting our country in such dire straits. But that doesn’t absolve the top guy from responsibility. People can rightly ask where the prime minister was when medicine prices were raised hundreds percent. Where was the prime minister when gas prices were raised 140 percent? Where was the prime minister when electricity prices were raised by more than 20 percent and yet circular debt kept raising? Where was the prime minister when polio cases in Pakistan more than doubled from last year? The problem is that this government’s ineptitude isn’t just confined to the one area where you can blame a particular minister and move on. The problem is that no matter where you look it has made things worse. So really the blame should not be on any particular minister at all. The problem lies with the prime minister.

This brings me back to the Economic Survey which shows that the PTI government has failed to meet almost every target. The current government has cleverly – but falsely – claimed that these were exaggerated targets set by the outgoing PML-N government. Take for example exports, one of our weakest areas and where the PTI government was supposed to do wonders. Last year we achieved growth, in dollar terms, of 13.5 percent and ended the year on total exports of $23.5 billion. Our target for this year, a target the PTI adopted, was $28 billion. But despite a devaluation of 25 percent up to now from the beginning of this fiscal year, the government has achieved negative growth in exports. Let me restate so there is no confusion. In the first ten months or so this year, Pakistan’s exports are less than they were last year. I could have kept a target of zero growth and the PTI government would still have failed to achieve it. Did they want me to set a negative target?

Another example is the target for large-scale manufacturing. The target for growth this year was 6.8 percent. This is because we achieved a target of 6.6 percent and it was only reasonable to assume we would do slightly better this year. But the current government has achieved a growth of 2.9 percent.

Similarly, take the example of agriculture growth. Here we achieved growth of 3.94 percent last year and kept a target of 3.8 percent this year against which the PTI achieved 0.8 percent. Now consider the fact that our population grows by 2.4 percent every year. So if our agriculture is growing by less than 2.4 percent, we are producing less food per person than the previous year. That’s obviously not acceptable. Given that the growth in agriculture last year was 3.94 percent, was 3.8 percent growth target this year unreasonable?

This also brings me to another other false assertion: that the economy is doing badly because of the PML-N’s policies. Now I ask: what did the PML-N do wrong that last year’s agriculture growth was 3.94 percent and this year it was 0.8 percent? How is the PML-N to blame if the production of cotton, rice, wheat and sugarcane all go down? More ominously, why did yield per hectare of cotton, rice, etc go down? How can you blame the PML-N’s policies if the yield per hectare and production goes down this year? At what point do we accept the obvious: that the current government is incompetent and even in agriculture it has caused production to decline.

With all the failure, the fact is that the government has four long years still left. Therefore, it is imperative that it finally learn how to govern. I am glad the government accepted its failure in the health and economic fields and changed the teams. But it can’t just borrow people from the Musharraf and Zardari regimes to govern. So, if not publicly then at least internally the ruling party must accept its ineptitude, and introspect and try to figure out what it actually believes in. Where does it want to take the nation? Only once you have some core beliefs and principles can you can draw a roadmap that your ministers can follow. Without a core and consistent governing philosophy, we will keep seeing ministers forced to play musical chairs to keep their portfolios, with the nation getting further and further behind.

Finally a word on the new budget announced yesterday with a revenue target of Rs5550 billion, about 39 percent above this year’s achievement. Not just me but everyone who’s had the privilege of serving as this nation’s finance minister, including the current incumbent, knows that this is an unachievable target. Within months we will go to the IMF for waivers.

What the IMF and its directors, who mostly represent the major Western powers, will do remains to be seen. But whereas twice in the recent past our foreign policy – under generals Zia and Musharraf – helped our economy, this time our economic policy will likely become a burden on our foreign policy. Pakistan will have to sail through some choppy waters. Is the hand on the wheel resolute enough?

The writer has served as federal minister for finance, revenue andeconomic affairs.

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