Major failures for which the coalition government is criticised are: corruption, energy, increased unemployment, high inflation, low tax revenue collection, public sector hemorrhaging impact on economy; depreciation of rupee against dollar by 58 percent in five years; falling foreign direct investment; and low GDP growth. The burden of checking corruption, which has affected the development work and delivery in the social sector, has to be borne by the coalition government. There was no attempt to check it in spite of howling rage by media. The level of corruption increased manifold during the last five years compared to the last military regime.
Energy crisis was not the doing of the coalition government, as it was very clear as early as late 2004. Top government bosses had realised that by 2010 we would have a 5,000 MW shortage during peak hours. They started on a mission to attract foreign investors. But the approval process was slow and the bureaucracy was too afraid to approve projects as the private sector was asking for eight-nine cents a unit. That delayed investment in the power sector. But this does not absolve the coalition government from the blame that they failed to manage electricity resources. The major causes of electricity shortage are running inefficient public sector power generation plants, high electricity theft, non-payment of dues by government and politically influential people and subsidised tariff, which is also enjoyed by the rich.
Another issue is that of the shortage of natural gas; this was also clear during the previous government that the CNG splurging of gas was not sustainable. There are only three options to meet the gas shortage: import through pipeline, which is a long term solution; import of LNG can ease some pressure in a shorter time frame; and raise the gas price to attract more investment in the exploration and production of oil and gas resources of Pakistan. As a matter of fact, all these are not either and or options, all these measures will have to be taken simultaneously. The stand taken by government so far to import gas from Iran is daring. But too much interference of the judiciary in the commercial deals of government has also slowed down the LNG import project.
Unemployment is increasing because of a number of factors. The population growth rate is still unsustainable and this is our chronic problem. The fragmentation of agricultural land by natural course inheritance and mechanisation of farming is pushing the rural surplus labour to the cities. In the cities, the security situation, and constant efforts to destablise the democratic system has slowed down investment in new projects so not enough jobs are being created. At the same time, we should keep in mind the global perspective. The developed economies have a larger unemployment ratio than Pakistan.
Similarly, inflation is also a global phenomenon. The world food and oil prices also rose in the same period. Yes, this is hurting the poor but the answer is not demanding lower commodity prices because it also hurts the agriculture producers who employ 42 percent of the workforce. The coalition government followed policies that lead to transfer of money from urban to the rural areas. The policy has paid in terms of higher cash crops production. As a result, purchasing power in rural areas has increased. Don’t forget the burden of the ongoing war against terrorism, rehabilitation of internally displaced people and two major floods in a row.
Government had failed to impose the Regulatory General Sales Tax because of resistance from the MQM and PML-N. Both are parties with a strong support from the bazaar. But it has to be remembered that even General Ziaul Haq and General Musharraf governments failed to tame the tax evaders. So democracy cannot be blamed for this; weak resolve of the successive governments is the real cause. Fiscal deficit has remained high and government failed to pull it down. However, though official economy has not performed well because of bad management and number of external factors beyond any government’s control, the parallel economy flourished by leaps and bound to almost 100 percent of the official GDP. This has increased purchasing power of the people and is leading the growth of consumer goods industry.
Biggest failure on the economic front is that the landless peasants and wage workers are still being exploited but this issue is not debated in the drawing rooms and talk show studios. To bring change, to begin with, our attack should be against the growing inequality and non-implementation of labour laws for the agriculture workers. Unfortunately, democracy-busters do not join the struggle against inequality and exploitation. All they do is blame democracy and politicians from their air-conditioned offices, waiting for a benevolent dictator, a messiah.
(Concluded)
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