Daily Times

Pakistan’s national assembly has a tradition of hosting the most interesting budget sessions. Similar political antics are replayed every year; providing one with the impression that the theatrics performed by the members are not spontaneous but rehearsed and orchestrated, even when they are not. The house erupts into a ruckus soon after the Finance Minister presents the budget. The opposition breaks into slogans and desk-thumping to express its disapproval of the budgetary proposals. The opposition’s clamour often achieves such heights (and with nearly zero resistance by the custodians of the house), that it doesn’t perhaps come across as a practice anymore but a parliamentary procedure. This year’s show in June was no different. Finance Minister presented a deficit budget that drove the house into a disorder of sorts. Opposition members stood up on their benches and vented out their frustration over the government approaching the IMF for a bailout package. The opposition members carried placards that read “No to IMF Budget.” The government’s response, however, was nothing less than interesting. It seemed part of a larger counter-strategy.

Seemingly, the government had this realisation that anything they’d propose would face bitter criticism by the opposition. And, hence, it proceeded as planned; ignoring whatever the opposition had to comment on its dealings with the IMF. It never seemed during the budget speech that the government would later consult the opposition to chart out a roadmap for the future of Pakistan’s economy. Later, however, in much-unexpected circumstances, the government hinted at including the opposition in its decisions to revamp to the economy. They started talking about unanimously reaching for something called the “charter of the economy.”

Whether a consensus charter can be developed and if it does, how different it would be from the macroeconomic advice of the IMF are questions that must be deeply considered by the government before it makes its move of engaging the opposition and other stakeholders, most notably, IMF itself. For now, the governor of the State Bank of Pakistan, finance minister and bailout packages, all have the IMF name on them; implying that there is little that the chartering political parties can influence in how things will and need to be done about the resuscitation of the economy.

A charter, especially if divergent from the macroeconomic commands of the IMF, may not carry the implementation strength that one would like for it to have to become effective

A charter, especially if divergent from the macroeconomic commands of the IMF, may not carry the implementation strength that one would like it to have to become effective. But then the question arises why do we need a charter in the first place. Do we not know what our economic problems are and what and where do the solutions lie? Of course, we do.

We know what needs to be done but what we may not know is when what needs to be done and how. And the government’s usual means of getting to know the answer to the “how” question is by contracting research projects out to consultants that figure out how the economy needs to be put on a sustainable path to recovery. Quite often, this research that the the government arranges results in the form of plans, policies and reports that diagnose the problems we already know and provide solutions that are (i) very similar to solutions that have been proposed in the past and have failed to produce results, (ii) fairly obvious but difficult to implement, for instance, proposals like increasing revenue collection by expanding the tax base, and (iii)not directly actionable or implementable.

The direction of Pakistan’s economy is pointed towards the brink of collapse. Leading economists of the country concur the country has vacillated between periods of abnormally high and low growth because of the policy and planning inconsistencies. External political factors also impacted growth and the economy albeit doing extremely well for short periods hasn’t been put on a sustainable growth path, which is being envisioned quite regularly since the first economic plan implemented for five years between 1955 and 1960. The economic history of Pakistan is ripe with analysis on what went wrong, who did what and what should’ve been done at times when the country fell into recessions or periods of slow economic growth. And while some of those lessons were learnt, the planners haven’t been able to prevent future crisis based on their learnings from the past. It could well be a result of how rapidly Pakistan has changed and how often it pushes itself into troubles that are completely different from what it has seen and faced in the past. And since the challenges are new and disconnecting from the past, the country hasn’t been able to develop a forward-looking economic policy that can be applied with consistency across political regimes and eras. However, that economic policy must not manifest in the form of a charter of the economy.

What Pakistan needs is not a charter of the economy. It needs a development strategy. A charter may include broad ideas, promises and agreements between political parties to adhere with and stay hooked to a certain economic roadmap. That is essential in providing a direction and purpose to an economy that has a history of going completely haywire. It can also resolve the questions of inconsistency and volatility as succeeding governments may also adhere to the agreed guidelines of the charter in dealing with the economy. And the entire state apparatus including the institutions and the resources to their disposal may be channelised towards the achievement of one or a set of goals agreed upon in the charter. But isn’t that greater vision already available? The Vision 2025 that the previous government framed to provide a certain direction to the Pakistan economy to me is a document complete in every sense as far as providing a purpose, vision or direction is concerned. It is not a policy, of course, but several sectoral policies could emanate out of it. And not to forget the SDGs that the government has adopted as its national development goals. Why thus would Pakistan require a charter is beyond imagination.

A development strategy, on the other hand, should be a document comprising actionable items that the ministries need to perform including any institutional reform agenda in the next few years. What this means is that instead of the ministries telling the approving authorities in the planning commission what projects they plan to do and what quantum of funds would they require to roll them out, the planning commission instead advises them on what project each ministry/division in the federal and each department in the province should do to align itself with the larger development strategy. This is not to be confused with the Medium Term Development Framework (MTDF). That is a development strategy of the government, but it does not contain advice on the actual projects that the ministries should do. Rather, it provides KPIs and outcomes to ministries linking them with the resources that each ministry or division possesses. Not only will it provide direction to the economy, but it would also send the entire system towards a focus on productivity, as opposed to the current focus on presence.

The writer is a development economist and the former director of the Burki Institute of Public Policy (BIPP)