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The culture of annual country budget

Every year it is the repeat of the last year’s budget – rationalisation and rhetoric abound. This year was no different. The budget speech I am told is of 66 pages and the speech was a marathon one. The public was confused and I have done right while all my predecessors have done wrong was one sentiment that I caught on. This is true for all kinds of governments whether they are from the PPP or from the military side. The taxation system that is devised is for the exploitation of the poor. Pakistan’s budgetary system is inelastic meaning that there is no flexibility in taxation proposals. Ours is never an expanding economy. The only time that happened was during Ayub’s regime when the country could tackle most of its problems through a system of investment.

The last government is always the devils’ government and the current one that of angels. The FM’s speech was also in the same culture although knowing him I thought that there would be better human performance from him. Then came the shattering news from London and all hell broke loose. There is much that can be questioned in the budget and the economic survey. The town where all hell broke loose was Karachi and this hell has been there for a number of years. Karachi is also the hub of all or most of the industrial activity. The other is Faisalabad where textile industry has taken roots. The entrepreneurial root that was taken for industry was based on cronyism. Largesses were given to friends and favourites. The market system did not come into play with the result that the entrepreneurial base has dwindled. Equity was never provided by the new industrialist rather over invoicing was the natural culture of doing things. Since this was virgin area the industrialists’ access to the power base was so well utilised that the cheats that came into the system in the textile industry used the governance system to blackmail the country’s decision-makers. Since the textile industry was in the hands of the rich and powerful a nexus developed between the industry and the policymakers usually politicians. The subject was the basis for intrigue and the players used intrigue against any policy that was for the benefit of the country. What was advocated was that this was the highest employment sector in the economy and therefore any damage to this industry would cripple the economy. With all the massaging of policy in the sector they could earn a measly 12 to 13 million dollars in foreign exchange. This was enhanced this year as the EU had given special privileges to the Pakistani textile sector. Then came the news that the Pakistani textile industry was shifting to Bangladesh and that the loss of this industry was imminent. Fine why not allow it to happen and allow the investors that right to go any where to any country. One of the Deputy State Bank Governor was so fed up with their tactics that in one cabinet meeting he said that the investment to that date had been 270 billion dollars and if this amount had been kept in a foreign bank the amount earned would have been than what they had earned. The crony capitalism that comes in this way is unable to play the domestic and the international market but depend on government handouts.

If this be so then how the industrial output has increased by 5.5 percent? Nothing should surprise any one any for in this country data is fudged. The culture of cheating that goes on is any ones business. If the country is going through a challenge in the energy sector then how has the large industry managed to post this growth? But nothing in Pakistan should be surprising. We Pakistanis can justify anything. Governments and I mean all governments are very frightened of criticism and especially the criticism that comes with the budget. Why cannot we take it as it comes for after all when the situation was reverse we gave it to the others as we are receiving now? The data being what it is it may be better to have some one in the private and NGO sector develop a budget that is outside the government system. The budget could be based on self-generated data. At the moment we really do not know whether the data is based on indicative surveys or whether on random basis or whether on opinions. We have in all governments people who are self-opinionated and rigid as to what is going on for they talk in absolute terms rather than maybes.

The poverty line has dropped to over 50 percent and that means that the budget has to do something about it. That is easier said than done. It requires massive kind of thinking and ideology that could change the circumstances of and for the poor. It does not require any rocket science but if you are going to butt every policy and give benefits of over Rs 500 billion to the rich through SROs and other subsidised schemes then the policies for the poor will not work. Government authority is always fettered with self-censorship system. That unfortunately in Pakistan is not the norm and will never be. Here leaders are vilified after they leave their jobs and when they do not it is stated to be due to supporting democracy. Well democratic traditions ought to be understood. No one has done so and no one has the ability to deal with situations in the public domain. We talk of our neighbours in vilification terms but what are we? We seem to be the midgets in the comity of nations. If Pakistan has to make it to the world of nations then it has to take stock of the situation and do all that is reasonable and well thought out.

The budget is not about number crunching but has a supposition that is not understood by the majority and not in the least by those who are in the media talk show. What kind of attitudes and values are we projecting where the facts and the consequences of economic policies have not been understood? If you want some idea into this then see the works of Kieth Griffith and Rehman Sobhan which was indicative of what could go wrong when economics are not fair. What is happening in Fata, in North and South Waziristan, in Balochistan and in Thar? Pakistan has its hands full but like the proverbial blind person we refuse to open our eyes. Is Pakistan created for the blind leaders and the deaf opposition? Before the rest of the nation suffers the consequences of your political actions it is time to set right the agenda for this country.

The budget to be imaginative has to be carved out in regions that have the same kind of culture and the same kind of natural resources. That means that the ecological zones have to be understood and not have this fetish that Punjab can get away with murder while the other places murder is encouraged. It is a world most foul. Things are going to get much worse as a result of this budget. But then the wise in the government do not see it that way. Karachi and the other towns are giving the impression of Charles Dickens ‘A Tale of Two Cities’ We do not have even the writers to portray our situation to the general public. We can only lament. And if you complain more the Doodh Dahi gawaleys will take care of you for after all what is the Punjab police and the eunuch civil servants for? Budget be damned as long as I can fill my coffers and the law and justice is found wanting. Shall we call the British to teach us law and justice allover again? Think about it for we have not been fair to any of us. The budget could have rectified all this but alas that was not to be. Till the next budget-who will present it depends on the general public.

Dr Zafar Altaf, "The culture of annual country budget," Business recorder. 2014-06-07.
Keywords: Economics , Economic issues , Economic policy , Economic systems , Political issues , Budget 2014-15 , Economy-Pakistan , Textile industry , SBP