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A national consensus agenda

IN today’s polarised and charged political environment the idea of national consensus may seem implausible if not impossible. But that doesn’t detract from its importance as key issues consequential to Pakistan’s future are in urgent need of national consensus.

The complex nature of the country’s overlapping challenges and the fact that no single party can tackle these on its own should urge political leaders to rise above partisan interests and consider evolving agreement on core issues even as they continue to compete with each other.

What are these core issues?

Economic revival: First and foremost, economic recovery and a plan to achieve this.

The economy is obviously not out of the woods. Policy actions agreed with the IMF to address Pakistan’s financial crisis should not become a source of contention or be politicised, when both the government and opposition know that without a Fund deal the country will be unable to meet its external obligations, repay debt and access financing from other sources.

But the IMF programme should be a part of, and not a substitute for, a broader homegrown economic strategy. Stabilisation measures are necessary but not sufficient. Pakistan needs a path to growth and a plan to fix structural problems to end the vicious cycle of high budget/ balance-of-payments deficits and chronic foreign exchange crises that have led to repeated IMF bailouts.

Unless underlying structural issues are tackled, the country will not be able to escape from the trap of slow growth, low savings and investment, high deficits, heavy borrowing, growing indebtedness and soaring inflation. A band-aid approach is unsustainable. Consensus is necessary on longer-term, structural measures. As a narrow tax base, reflected in a low and almost stagnant tax-to-GDP ratio, is the source of fiscal problems, serious tax reform is a priority. This should aim at an equitable, simple and nationally enforced regime to give the country a single tax system. Ending exemptions, simplifying the convoluted sales tax structure, and ensuring tax compliance should be part of reform actions. Pakistan also needs to square the circle between over-taxation and under-collection.

Pakistan needs champions of reform, not champions of empty rhetoric.

The energy crisis is taking a heavy toll on the economy and testing people’s patience. That gives urgency to power sector reform which requires tough decisions and the widest political support. Similarly, agreement is essential on privatising loss-making, state-owned enterprises that bloat budget deficits. A single, liberal business regulatory framework for the country and commitments for policy continuity are crucial to build and sustain investor confidence. The State Bank’s operational autonomy with the market deciding the exchange rate should also be agreed. An ailing economy cannot be in anyone’s interest.

Consensual democracy. Political stability, on which economic revival depends, requires consensus between all stakeholders not just on continuance of democracy but its functioning by tolerance and consensus. Democracy shouldn’t be limited to the ballot box. It should determine how the country is governed between elections. The federal nature of the polity makes this imperative. As does the regionalisation of politics and electoral outcomes that leaves different provinces in the hands of political parties distinct from the one controlling the centre.

The federal government has to work with and not against opposition-run provinces to build inter-provincial consensus on major issues. While the central government can enact laws and take reform measures, their enforcement requires the consent of all provinces. The role of the military is another crucial area that needs agreement. A firm popular consensus already exists that elected representatives should be in charge of governance. This indicates the delegitimisation of military intervention in politics and governance in public eyes. But political leaders must also embrace this consensus and not seek to drag the army into politics to fight their battles. The military too should respect the principle of civilian supremacy even though on security policy it will continue to have a significant voice. This civil-military rebalancing of power will help to promote political stability.

Education: No issue is more consequential to a secure and prosperous Pakistan than the coverage and quality of education available to our children. Yet the facts remain grim.

Pakistan has the world’s second highest number of children out of school — 22.8 million. Twelve million are girls. It means 44 per cent of children aged five to 16 years do not go to school. This violates the constitutional obligation set out in Article 25A that enjoins the state to “provide free and compulsory education to all children of the age of five to 16 years”. Of those who go to school drop-out rates are high.

All this is the result of decades of neglect and chronic underspending on education by successive governments. At 2.6pc of GDP, this is among the lowest in South Asia. Just 14 of 195 countries spend less on education than Pakistan.

Given Pakistan’s demographic profile, young people face a jobless and hopeless future unless the scale and quality of education is expanded. This should spur the country’s leaders into treating education as a national emergency. Pakistan needs champions of reform not champions of vacuous rhetoric on education.

Population planning: Pakistan’s population of over 224m makes it the the world’s fifth most populous nation. In 2040, the population is projected to reach 302m. The annual growth rate of 2pc is among the highest in the region. This has far-reaching economic and social consequences. Yet this pivotal issue rarely figures in any government’s priorities. The demographic structure, with youth constituting 64pc of the population under 30, means almost 4m young people join the working age population every year. This in turn requires 1.4m new jobs to be created annually, according to a UNDP report.

The confluence of demographics, economic stagnation and persisting education and gender gaps confronts Pakistan with the spectre of social instability even social breakdown in the decades ahead if consensus is not forged on population control measures.

These fundamental issues among other critical ones, including water scarcity and climate change, will determine Pakistan’s fate and fortunes. They represent tests of leadership for all the country’s political players. Can they rise above their narrow interests and defy the widespread perception that Pakistan is a state bereft of statesmen?

Maleeha Lodhi, "A national consensus agenda," Dawn. 2022-07-04.
Keywords: Economics , Economics development , Economic growth , Economic planning , Economic policy , IMF