A couple of days ago, Pakistan Tehreek-e-Insaf (PTI) presented ‘White Paper’ at a seminar on the economy, which indeed is in perilous situation. A number of policy-makers from PTI’s time in office, and otherwise, spoke on the occasion, including Imran Khan.
The ‘White Paper’ itself, and the speeches that were made, highlighted quite accurately the difficult economic situation when PTI took office back in 2018, its own main achievements to take the economy out of a deep current account crisis to high economic growth rates during the last two fiscal years of its stint in office, the way economic conditions have gone sharply and severely downhill, especially in terms of low foreign exchange reserves situation, high inflation, debt distress and financing needs, and deep stagflationary situation that has built-up since it was ousted out of power in April last year.
Having said that, the ‘White Paper’ itself and the speeches that were made, including that of Imran Khan, seriously lack any deep, profound, and wholesome understanding of firstly, the follies in their own economic policy while in office; secondly, read unjustifiably more than warranted into their own flagship economic successes such as like high exports, increase in agricultural and industrial growth, overall economic growth, and the welfare or ‘Ehsaas’ programme; and thirdly, the way forward presented to deal with the main economic ills, including meaningfully dealing with high- inflation and debt default concerns, is neither cogent in terms of economic linkages, nor does it bring clarity about where PTI actually stands on the neoliberal onslaught for many decades now, through both domestic economic policy, and International Monetary Fund (IMF) programme focus/conditionalities.
It is indeed important to have rule of law as an essential ingredient for a well-functioning economy and overall polity, especially in terms of doing away with the elite capture, and for positively contributing outcomes for democracy in order to strengthen the link between public opinion and public policy. Also, it is necessary to have high and diversified levels of exports, and a significant level of foreign exchange reserves, and the significant role special economic zones (SEZs), tourism and information technology (IT) sectors can play in this regard.
Moreover, it is indeed important that state-owned enterprise (SOEs) or public sector enterprises (PSEs) come out of the loss-making spree. It is also important that small and medium level enterprises have environment and finances to grow meaningfully. Overall, it is of course right that the economy should be put on a green, inclusive, and sustainable path, and which delivers outcomes to reduce inequality and poverty, and for which a strong social welfare programme is also in place.
Yet, the basis for all of the above requires putting in places an institutional, organizational, and market reform strategy that is non-neoliberal, non-austerity, and counter-cyclical in nature. PTI’s ‘White Paper’ and speeches do not address these issues in any wholesome way, nor do they correctly analyze their own economic performance in the light of the above standards or criteria. For instance, PTI talks about economic successes of China and the Scandinavian countries, but does not appreciate the fact that these countries have followed a non-neoliberal framework.
In China, for instance, not all prices were liberalized, and in turn, a ‘dual-track’ pricing policy was followed. In the Scandinavian countries, policies of social democracy – the ‘middle way’ between capitalistic and socialist policies with deep role of the state in running SOEs, providing education, health, and in having well-capacitated public sector to have contracts with private sector that both protect the interests of its citizens against the profit-mindedness and financing priorities of the private sector, and also makes citizens a meaningful partner in the profits earned, in addition to having overall high economic institutional quality, and broad-based progressive taxes to provide a deep welfare programme – were adopted.
It is important that PTI understands the link between neoliberalism and neo-colonization. It is essential that Imran Khan asks his economic team to make clear to public the policy stand of PTI on neoliberal policies. For instance, throughout PTI’s tenure in government, monetary tightening was seen as an important tool to deal with inflation, even when inflation in Pakistan traditionally is at least equality a fiscal/governance/supply driven phenomenon, and a lot more so ever since the assault of global supply chain crisis.
PTI should understand that institutions are the ministries at the federal level, and departments (those with no federal subordination) at the provincial level, since they can take up formulation of laws, rules, procedures in respective parliaments, in terms of providing governance and incentive structures – that in turn see a meaningful role of public sector in a non-neoliberal, non-austerity, and counter-cyclical way – for the organizations (both public and private) and the markets to work under this environment.
There is no clear and cogent strategy on these lines that the ‘White Paper’-related seminar has come up. Similarly, the economic successes of the PTI, when in government, lacked the sound, wholesome, and unified sense of direction to warrant the appreciation they could generate for PTI (which they otherwise wrongly take credit for), or the sustainability and exclusiveness that need to come as a consequence.
Whatever Pakistan’s economy needs, and the warranted and justified objectives PTI takes up – from exports growth, to meaningful ‘Ehsaas’ programme – require a clarity on the direction – neoliberal or social democratic, austerity or non-austerity, pro-cyclical or counter-cyclical – and the quality of economic institutions, the capacity of the public service, the extent of the role of the public sector, and how they deal with the ills of market fundamentalism.
Neither PTI nor any other political party, including overall any military dictatorship – except for some meaningful stints of economic planning in the Ayub era – have or had a meaningful economic policy on the lines indicated above. Real change is hard to see in this context, and frighteningly default risks are looming large, air and water pollution is rampant, and poverty and inequality are rising sharply; with serious negative consequences on the quality of democracy and what it can deliver in terms of bringing economic justice and public welfare. This is also not to say that a ‘technocrats’ government’ is the answer, because as they say there is ‘no taxation without representation’, a popular, well-represented government in parliament can take the decisions that are needed to make a break from the neoliberal ways of the past. But before that any government with all those features would be required to have clarity and strategy on the lines discussed above.Dr Omer Javed, "PTI’s ‘White Paper’ on economy," Business recirder. 2023-01-06.
Keywords: Economics , Monetary fund , Economic growth , Special economic , State Bank , Economy , Imran Khan , Paksitan , PTI , IMF