Daily Times

Budget 2017-18, based on market-driven economic model and lacking redistributive fiscal policies, is bound to widen already terrifying rich-poor divide in Pakistan. Obviously, our budget-makers have never bothered to study the economic models of the countries that deplore the very idea of seeing people mired in poverty. Our budgets are ritualistic ones, lacking any welfare programmes to help those lagging behind, enabling them to move up economically and socially. Budgets of welfare states ensure redistribution of wealth and income so that everyone gets the fundamental needs. On the contrary, our successive governments through their pro-rich tax policies and elitist structure of economy have been giving unprecedented opportunities to the rich to amass more wealth, and this year budget is no exception.

Budget is not just a book-keeping exercise. It is an exposure of socio-politico-economic policies of a government. Since coming into power for the third time in 2013, Prime Minister Nawaz Sharif and his economic team, led by a close relative, has paid no attention whatsoever for structural reforms for overhauling dysfunctional judicial and administrative apparatuses, and dismantling elitist structures. Unless we do this, Pakistan cannot become member of G20 as predicted by Mr Ishaq Dar by 2030 (sic)!

Pakistan needs meaningful redistribution policies that can uplift the downtrodden. There is nothing in this budget towards this goal — like all previous ones, it is an utterly disappointing document

How a Finance Minister in Pakistan, while making budget, can ignore that 80 million women are illiterate, condemned to domestic slavery,  22 million children are out of school, 40 million are undernourished, 60 million plus live below the poverty line — just to mention a few.

Everybody loves to quote figures about burgeoning fiscal deficit, unsustainable public debt, monstrous government expenditure, declining exports, rising export, record trade deficit, immense pressure on foreign reserves, widening current account gap, injudicious indirect taxes etc. But nobody is interested to talk about equitable growth, jobs and decent wages for all. There is no debate on any TV channel about Article 3 of the Constitution as cornerstone of our economic policy. It says: “The State shall ensure the elimination of all forms of exploitation and the gradual fulfilment of the fundamental principle, from each according to his ability to each according to his work”.

Budget 2016-17 has nothing to fulfil the promises made in Article 3 of the Constitution. It is not possible as today’s Pakistan is captive in the hands of militro-judicial-civil complex, landed aristocracy sitting in assemblies and industrialist-turned politicians — they have an unholy alliance against the common people. These elites openly indulge in vulgar ostentation of money and power and flout the rule of law. The poor even do not get the promised minimum (shamelessly-fixed) low wage and judiciary keeps mum.

Knowing my disgust about writing a routine analysis of budget, a friend presented a challenge, “then outline as to what should be an ideal budget for Pakistan”. My answer was simple: “the one that have short and long term goals to deal justly with all economic classes within the society and having emphasis on social mobility”. We should not waste precious man-hours on quoting and analysing meaningless figures and indices presented every year as “budget documents” — when mostly fudged and tinkered? We need a new policy framework for budget that can ensure prosperity for all and not for the privileged classes alone. My friend readily agreed.  There is no occasion to debunk Ishaq Dar et al for what they presented. Let us discuss what they did not present — their main sin is omission of what they should do.

Pakistan’s economy serves the privileged classes — representing less than one percent of entire population but enjoys unprecedented perks, perquisites and benefits at the expense of taxpayers’ money. The mighty landowners exploit labour of landless tillers and unscrupulous industrialists and traders exploit poor urban workers to amass more and more wealth. Additionally, they create artificial hike in prices of essential items to snatch back whatever little is earned by the poor and the fixed-income classes.

Way back in 2006, The Economist (May 27-June 2, 2006) published two studies showing how the Nordic countries achieved social mobility and economic justice by taxing the rich to raise money for a welfare state. These countries “help the children of the poor to do better than their parents”. Of course, redistributive fiscal policies alone cannot bring such results. If they could, Nordic countries would not do as well as they do (their welfare states are not appreciably more generous than Britain’s). One explanation is their superior education systems. Education has long been recognised as the most important single trigger of social mobility — and all four Nordic countries do unusually well in the school-appraisal system.

Our budget makers, both at federal and provincial level, after insertion of Article 25A in the Constitution, have failed to establish education systems that can uplift those at the bottom. In a State where the Constitution guarantees fundamental right of “free and compulsory education to all children of the age of five to sixteen years”, there unfortunately exists exploitative “education industry” — expensive, pathetically poor in quality and class-ridden. If we judge economic policies of federal and provincial governments in the perspective of Article 3 and Article 25A of the Constitution, these are simply loathsome.

Our governments are totally oblivious of redistributive fiscal policies and social welfare programmes for social mobility. The poor are given so-called “economic relief package” by way of mercy. The relief (sic) is only of cosmetic nature and there is nothing in the policies or budget that aims at helping the poor to move upwards. The federal and provincial governments must realise that it is not only spending more money on education that matters but how to use the entire system as an effective tool for social mobility. There is a complete lack of understanding of this perception on their part and the result is that poor segments of society are condemned to remain mired in abject poverty and their children will have no chance to move up as education is either not available to them or is of no practical use.

Budget 2017-18 is yet another routine exercise of balancing the books (that too by window dressing). Pakistan needs meaningful redistribution policies that can uplift the downtrodden. There is nothing in this budget towards this goal — like all previous ones, it is an utterly disappointing document.

The writer is Advocate Supreme Court and Adjunct Faculty at Lahore University of Management Sciences (LUMS). Email: ikram@huzaimaikram.com; Twitter: @drikramulhaq