Daily Times

The dissolution and reconstitution of the federal cabinet is an exercise in both political manoeuvring and introducing economies. Reshuffling the existing cabinet would have displeased one or the other sitting ministers for not being retained in the process. Therefore, it was thought best to wipe the slate clean and start from scratch. The 18th Amendment to the constitution has given a figure of 11 percent of parliament’s strength for the federal cabinet; this should be read as an upper ceiling, not a mandatory number of ministers/advisors. In any case the current economic circumstances do not allow for a large cabinet. Moreover, 18 departments/ministries have to be devolved to the provinces; therefore a small cabinet would make perfect sense. The speculations are that PPP stalwarts will form the core of the new cabinet, while coalition partners will be rewarded for their support to the government. ANP is likely to benefit most because it has stood by the government through thick and thin, unlike MQM and JUI-F. Although the government is desirous to woo back both these alienated partners into its fold, the MQM has openly refused to join the cabinet till the government implements its nine-point agenda. The JUI-F too does not seem very keen to join.

At the same time, the government is working with PML-N to bring down expenses in other areas and reduce the budget deficit. One of the proposals by the PPP is withdrawing half of the 50 percent salary raise for government employees announced in the last budget. PML-N chief Mian Nawaz Sharif has agreed to the suggestion on the condition that this cut would be implemented across the board on the salaries of all state employees, including elected officials. This would reduce the budget deficit to 5.4 percent of the GDP, but still not meet the target of 4.7 percent. In return for the implementation of the 10-point agenda, the PML-N is expected to support the Reformed General Sales Tax (RGST) in parliament. Contrary to perceptions, RGST is not a new tax, but a reformed face of the existing General Sales Tax (GST). It will benefit certain sectors, while bringing others into the tax net, and gradually bring the undocumented part of the economy into the tax net. Its implementation has been long overdue, which could not be done because of resistance from political parties whose support base would be affected by the reform. While some of our economic problems can be traced directly to official mismanagement and bad decision-making, one must not ignore the context in which we exist. Even the developed countries are trying to recover from the economic recession that hit the world hard in 2009. In addition, the effects of climate change like droughts, floods and other unusual phenomena have seriously marred the capacity of major food crop producing countries, and Pakistan has been one of the worst affected nations owing to devastating floods last year. Hence food inflation is part of the global phenomenon. But this does not absolve the government of its responsibility.

Although the elected government returned after the 2008 elections was expected to introduce reforms to the economy and strengthen the norms of good governance, it remained mired in the struggle for political survival. The government is taking its current steps too as an imperative of political survival. The jury is still out whether the proposed reforms will go as planned since the implementation capacity of the government and the state has been steadily declining over time. However, there is still time to seriously address the issues confronting the country. It is hoped that the new cabinet will realise the seriousness of this task and deliver to the nation.*