Daily Times

In a country where 78 percent of the population lives below the poverty line, 66 percent faces food insecurity, almost 100 million do not have access to safe water and 93.9 million do not have access to adequate sanitation, the 2015-2016 budget will only multiply miseries for generations to come. Yet the ruling classes and the upper strata of the bourgeoisie rejoiced, thumping desks in parliament when the budget of the rich, by the rich and for the rich was being presented. The upper stratum of the military and civilian elite flaunt their obscene wealth accumulated through crime and corruption by erecting palatial houses in posh areas and shopping sprees in Dubai, Europe and super rich malls in metropolitan centres. However, the serious bourgeois are worried about the impending catastrophe due to the disastrous economic situation and the rising anger of the oppressed against the bloodthirsty and callous elite.

The naked economic offensive led by the present PML-N regime against the toiling classes is starkly evident even from the official figures presented by the Pakistan Bureau of Statistics. However, these statistics from a faltering state like Pakistan, which has failed to carry out a national census since the early 1990s, should be read with a health warning. The exploitative class nature of this regime is evident from the fact that in a country where the tax-to-GDP ratio and percentage of income taxpayers is one of the lowest in the world, we have yet again seen indirect taxation hiked up on the deprived masses and massive tax incentives to the imperialist and domestic corporate vultures. Despite the withdrawal of SROs worth Rs 103 billion in 2014-2015, the powerful ruling classes still managed to extract from the national exchequer Rs 665 billion in the outgoing fiscal year, an increase of Rs 187.9 billion over 2013-2014.

To cover up deficits the state is recklessly bent upon amassing colossal borrowing, a burgeoning burden on the toiling masses. Public debt has reached Rs 16.94 trillion, an increase of a staggering Rs 940 billion in the first nine months of this fiscal year, according to the Pakistan Economic Survey. As of March 2015, the total debt liabilities of the country stood at Rs 19.3 trillion. The debt liability of each person in Pakistan has increased from Rs 37,170 in 2008 to Rs 101,338 in 2015. External debt servicing reached close to $ seven billion in fiscal year (FY) 2014, which is almost 50 percent of the current reserves of the State Bank of Pakistan. The country paid $ 6.82 billion in debt servicing in FY15, including $ 5.91 billion as principal amount and $ 915 million in interest payments. Worryingly, 47 percent of whatever the government generates in revenue is going to pay off debt against 44 percent in the previous year.

The impact of the mounting debt burden and ever-increasing defence expenditure on the people is horrific. Fiscal space for social spending is now drastically squeezed. Pakistan spends just two percent of its GDP on education and 2.6 percent on health, making it the lowest in South Asia. This explains why Pakistan accounts for one out of every 10 children of primary school age globally who are not in school.

The unemployment rate has risen to 8.3 percent during FY 2015, the highest level in 13 years. It has risen for each of the Nawaz administration’s two years in office and the number of unemployed people is now 1.5 million higher than when the PML-N was eased into power in 2013.

According to new official estimates by the Pakistan Bureau of Statistics, a major reason behind growing unemployment in the country is insufficient economic growth. The same report says that unemployment is expected to rise by another 400,000 in FY 2016, taking the additional number of unemployed people under the watch of the Nawaz administration to 1.9 million. The unemployment rate is expected to jump up to 8.6 percent, a number that could be even higher if the government’s target growth rate of 5.5 percent for FY 2016 is missed. This is very likely to happen as it has struggled to produce a 0.24 percent rise in the current fiscal year. The pool of unemployed people had already increased to 4.6 million by June 2014. In the current fiscal year, another 700,000 people were added to the unemployed. And remember, these are ‘state’ figures!

The pool of unemployed people has grown to 5.3 million people, as the government again missed its economic growth rate target of 5.1 percent. Pakistan needs an annual growth rate of at least seven percent to create enough jobs to absorb new entrants into the labour market, according to independent bourgeois and NGO economic experts and institutions. At a press conference after the budget even the federal minister for planning and development, Ahsan Iqbal, has disputed an assessment by the finance ministry that the country’s unemployment rate had fallen to six percent. In his opinion, the finance ministry’s projections of creation of 2.5 million jobs during the next financial year are unrealistic. The finance ministry had earlier reported in the Economic Survey that the unemployment rate had decreased from 6.24 percent in 2012-2013 to six percent in 2013-2014.

Even from the point of view of capitalist macroeconomics, the prospects of higher and sustainable growth are bleak, to say the least. All players and parties in the incumbent political circus think the recipe for economic growth and employment generation is foreign direct investment (FDI). How ignorant these masters of our destiny are! This notion reflects their deception, betrayal and a blatant confession of failure to build a modern industrial nation state. For more than a decade the mode of this FDI has radically altered from labour intensive to capital intensive. Instead of creating jobs these imperialist and national corporate capitalists are destroying them in their hunt for more profits. Since the financial crash of 2008, the world capitalist economy has failed to recover and investment rates have nosedived across the world. It is the rate of the fall of profit that has constricted investment in manufacturing and now even in services.

The regime is carrying out privatisation plans with disastrous blows and losses to the exchequer due to the loot sale of national assets. The government generated a pathetic Rs 170 billion from privatisation in the outgoing FY, missing its own lowly priced target of Rs 198 billion. The state and the system are lurching towards disintegration and decay with society in the throes of pulverisation. Under rotten Pakistani capitalism there is no light at the end of this dark and harrowing tunnel. With rapidly rising poverty and deprivation, life for the masses is becoming hellish and agonising. The display of filthy riches by these reactionary upstarts and crooks, the so-called bourgeois class, is instilling hatred and seething revolt amongst the oppressed. They have no choice but to overthrow this system for survival.

The writer is the editor of Asian Marxist Review and international secretary of Pakistan Trade Union Defence Campaign. He can be reached at lalkhan1956@gmail.com