Rs500 billion

Rs500 billion divided by 360 days comes close to Rs1.5 billion a day every day of the year. Rs500 billion divided among each and every Pakistani family comes to Rs17,000 per family per year. Rs500 billion is the collective loss incurred by government-run entities that we euphemistically refer to as public sector enterprises (PSEs).

Yes, a small part of the Rs500 billion loss represents the gross inefficiencies that are part-and-parcel of whenever a government – any government – decides to indulge in the productive sector of the economy. But a very large chunk of the Rs500 billion loss represents public money finding its way into private pockets; public money, private greed.

It is true that the prime minister took over a mere 25 days ago. What is also true is that the PML-N is not being wary of special interest groups, a group of people working on behalf of or strongly supporting particular business interests (and advocating specific policy prescriptions in order to enrich their businesses). Secondly, the PML-N would have to do better on issues relating to conflict of interest whereby an “individual or an organisation is involved in multiple interests, one of which could possibly corrupt the motivation for an act in another.”

The real reality of the budget is that after five consecutive years of serious haemorrhaging the government is now left with zero fiscal space (read: the government is literally bankrupt). And the urgent restructuring of PSEs is now the only-lonely saviour.

To be certain, military dictatorships retard a society’s political evolution and economic dictatorships impede economic growth. Unfortunately, military dictatorships have ruled Pakistan for half of its existence and economic dictatorship has been at the helm since the 2nd day of January 1972 – the day PM Bhutto nationalised major industries. Pakistan’s economic dictatorship is all about prime minister after prime minister and minister after minister dictatorially appointing CEOs of PSEs. And the PSEs then going wild and gulping down an ever-expanding stream of public money.

Of the 200 PSEs up to one-half lack any raison d’être whatsoever. The other half comprises operating entities that need to be auctioned off right away and the remaining need to be nurtured till there is market appetite for them.

Imagine; a government with an extra Rs500 billion to build schools, hospitals, motorways and electricity grids. Imagine; 10,000 new hospitals every year for five years. Imagine; 20,000 new schools every year for five years. Imagine; 5,000MW of additional electricity every year for five years. But before that could happen, the economic dictatorship model must be made to breathe its last breath.

To be sure, economic success is highly dependent on law. The theory of economic analysis of law has it that ‘judgements have serious economic implications’. Law and economics has it that ‘markets are more efficient than courts’. What that means is that the PML-N on its own cannot eradicate the Rs500 billion loss; the courts must also assess the economic impact of their judgements. And the judges must assess the economic efficiency of their rulings.

Remember, a ‘judge is a law student who marks his own examination papers.’

The writer is a columnist based in Islamabad. Email: farrukh15@hotmail.com.
Twitter: @saleemfarrukh