Daily Times

In one of my previous articles, “choosing to be wise – Pakistan’s quest for financial wisdom” I stressed the importance of national consensus on the financial and economic challenges facing the country. It seems that my words did not fall on deaf ears and a few days ago Prime Minister Mian Muhammad Shehbaz Sharif gathered top industrialists, economists, and representatives from other industries to design a pro-people, business-friendly, and progressive Budget for 2022-23.

The consensus-based economic way forward is a major step towards making an inclusive policy for the country and the best approach to promote the vision under the “Charter of Economy.” Many critics are terming this round table an attempt to ensure that all parties involved take equal responsibility for the decisions taken and that one party may not end up facing the public heat. However, my question is do we truly understand the challenges facing us? Are we equipped or in the position to represent the nation of 220 million to the best of our abilities? Do we have the vision, the financial sensibility, and the strength of character to put political indifferences aside and draft a budget document that truly caters to the need of the country? Maybe not completely but at least up to a certain degree?

As the economic situation unfolds and the IMF further tightens its grip, we now need to realize that certain sacrifices may unavoidable. Pakistan today faces magnanimous challenges such as a current account deficit, fiscal imbalance, a weak rupee, and declining forex reserves. Now that the budget has been announced, one wonders if this budget is the answer we all have been looking for?

For this budget or for any budget to be successful, it must be driven by a unanimous national agenda.

First of all, I would sincerely congratulate the coalition government for going ahead with the tough task of designing and announcing the budget. But I also truly wish that this budget could address the sensitivity of the economic budget. An outlay of Rs. 9.5 trillion is exciting but how are we going to generate the revenues is one must focus on.

The recent budget has pleased the retailers through its fixed tax regime, which is a recipe for disaster. I am a strong advocate for a “documented economy” and this one step will only promote the undocumented economic practice. The economist within me cannot simply fathom the repercussions of the fact that our leaders are trying to control or fix what they do not understand in its true spirit. Anyone with a slight understanding of economics will tell you that for an economic policy to be effective, policymakers must be aware of the size of the economy. And as long as Pakistan’s economy remains largely undocumented, we may never truly achieve economic growth or fix the challenges facing us.

Although I do understand that devising a pro-people or business-friendly budget with the existing economic challenges was not easy and overwhelming expectations by the people or the business community would not have been fair either. However, what the policymakers could have done was avoid making reforms that set us behind.

Without indulging further into the budget, I would rather draw focus on what is truly required to stay afloat amidst this looming economic crisis – which is political stability. For this budget or for any budget to be successful, it must be driven by a unanimous national agenda. With political disruption, long marches, or political point-scoring it will be extremely hard for anyone to perform, which only adds to the nuisance. Therefore, a structured interim government seems to be the most logical solution for the entire predicament.

Also, expecting growth in the FY 2022 -23 is a far cry from what could have been achievable in the past. Now, as the possibility of an interim government becomes a fair likelihood, it must be ensured that technocrats are involved to get the job done. The political pandits must also make a strong case for consistency and the interim setup must be allowed to operate consistently so that we can bring structural changes to the entire system.

There is no denying that we witnessed growth in the previous government, but that was achieved through short-term projects.

The previous government did not focus on white elephants such as the privatization of State-Owned Enterprises, which not only slow the economic progress but also are one of the biggest sources of financial leakage. Secondly, the poor engagement of the International Business Community is a seriously alarming situation. In the past four years, we did not see much success in attracting Foreign Direct Investment. This is despite the fact that we have the Gwadar Port that is set to be an economic gamechanger, we are a critical member of the BRI and the CPEC presents unlimited business benefits to its investors. The major contributor to poor FDIs is the uncertainty that follows our policies and reforms. When the investors see a pattern of policy change as soon as the political power changes hands, it weakens their confidence. Hence an interim government that is allowed to work for a longer period and a National Economic agenda become inevitable options.

Unfortunately, we are stuck in the pro-US or an anti-Us argument, which serves no purpose. People who celebrate that are in the position to take the US head-on, clearly do not understand the sensitivity of the matter. They fail to realize that we must put our economic interests first instead of getting into an unhealthy discussion. Today we see booming economic ties between the US and Vietnam.

There are even talks of US-Iran relationship revival, which will favour the oil-rich Iran in achieving its former glory and economic prosperity. Hence, devising a win-win situation and achieving economic and political clarity is critical to our survival.

Now, I have only scratched the surface with these intangible measures and can assure you all that true economic prosperity will only be achieved, once we, as policymakers, politicians, and technocrats, see, accept and develop consensus on what lies beyond the budget.

The writer is the Foreign Secretary-General for BRI College, China. He tweets @DrHasnain_javed.