The finance minister, this past Friday, announced the budgetary policies of the government for the Fiscal Year (FY) 2015-2016 with his lengthy but tight-knit speech in the National Assembly. Trying to steer clear of the critics in the house, the minister could not help invoking self-congratulatory overtures by dedicating a good portion of his talking time to the supposed valour of the current regime in saving Pakistan from the brink of economic disaster, which seemingly was required to soften the blow of what was about to come.
It is true that managing Pakistan’s fiscal matters is no easy feat but the claims of inclusive growth and sustainable development, as they appeared in the economic outlook for the next 12 months, surely deserve some analysis. The newly unveiled financial roadmap, in fact, had little in the way of long-term growth and sustainable, socio-economic policies, and, in more ways than one, was really just some good old wine in a shiny new bottle.
The pattern of taxing consumption through indirect taxes has been continued in this year’s budget through the inclusion of more items in the consumer basket, such as mineral water, a commodity that will surely see sharp increases in consumption in the near future. Similarly, the military budget has been given a nice little bump, along with provisions for seed money for infrastructure and energy projects that are crucial for the China-Pakistan Economic Corridor (CPEC).
Analysing the intricacies of budgetary policies is a task better left to analysts qualified to do so but there are important concerns left unaddressed in the budget that need to be brought to the fore. The latest Economic Survey, released a day prior to the budget announcement, revealed much in the way of stagnancy in important indicators like health, education and gender disparity. The overall situation of Pakistan compared to other South Asian countries was found to be wanting. With the second highest rate of school-age children not attending school, the forecasts for education indeed look bleak. Furthermore, Pakistan seems to be in a rut as far as the overall expenditures on health relative to Gross Domestic Product (GDP) are concerned. Additionally, an estimated 1.5 million workers remain unemployed and thus fail to contribute anything towards the national economy. Keeping in mind such trends, there seems to be no hope for the vicious cycles of poverty and misfortune to end anytime soon.
However, let us step even further back for a minute and analyse a fundamental aspect of the budget debate. Preparing a balanced budget with low deficits and targeted spending is a difficult task but even more crucial is to agree on the fundamental priorities of what ought to be the role of the government. The decision makers need to question if helping the lower income strata is going to be part of the economic plan or not. Similar questions that must be swirling around in the heads of policymakers would be something along the lines of: should the government provide inexpensive healthcare and good education to all those who need it? What are the responsibilities of those who earn a significant lot more than the rest? Does the state need to intervene in regards to making society more equal in terms of opportunity? Such are the basic questions that need to be asked and addressed before outlining any plans for the future.
Of course, politicians will have us believe that they have thought long and hard about such queries and have decided in favour of the ordinary folk. But the reality could not be any further from such deceit. A consensus on the fundamental, basic responsibilities of the state has been non-existent for quite some time in our country and the powerful are in no hurry to induct the less fortunate into the corridors of decision-making power.
Furthermore, observing the number of times the word “basic” is thrown around in discourse these days, one could be forgiven for thinking that the term’s meaning would be cast in stone, especially in budget season when the hue and cry for meeting basic needs and providing basic necessities is in full flow. However, this does not seem to be the case. When unemployment is at a record high and social disenchantment is reaching peak levels, is providing mass transit facilities a basic duty of the government? When socio-economic disparities are rearing their ugly heads through multiple avenues in an individual’s life, is paving roads with more concrete going to solve the basic issues of the ordinary citizen?
The truth is that a lot needs to be done in rethinking the priorities that we have taken for granted for far too long. The panaceas to our ailments are obvious but difficult to implement. For instance, there are direct, almost causal links between improvements in the health and education sectors to the amount of money spent developing basic facilities for the masses but no one is interested in pursuing such initiatives. Furthermore, progressive taxation with more taxes for those who can afford to pay more, along with widening the tax net, should be of primary concern but it is something that has yet to materialise. This is especially important because the patterns of consumption in Pakistan are taking a nasty turn for the worse and all segments of society now have to spend more just to stay afloat. In such a scenario, when indirect taxes are applied on basic commodities, the poor turn out to be disproportionately worse off.
The measures required to balance the scales in favour of the disadvantaged notwithstanding, the bigger issue of reform is that of political will. Who in the corridors of power would favour more taxation for the rich when, most of the time, the rich are directly represented in all crucial places. Moreover, the short electoral terms of the elected representatives force them to make skewed, myopic decisions that serve only the purpose of re-election at the cost of actual, long-term growth.
Since long-term reform takes time — often a lot longer than five years — no one is interested in the actual good of the masses, since doing so would entail selflessly fighting for a larger cause. In such a situation, when the bonds that tie communities together are already becoming loose at the edges, it is imperative to rethink the consequences of any and all economic policies. Alienating more and more people every year from the national mainstream through policies that serve to appease the few over the many will only serve to expand the disillusionment of the masses, which over time could manifest itself through furious violence and vengeful rage.
The author is a freelance columnist with degrees in political science and international relations