The present regime has confirmed, time and again, that elections will be held in October 2002. Electoral reforms have been announced. The registration of voters and delimitation of constituencies are already in hand. This election is very important and it will be the first in the new millennium, setting forth the future direction and pattern of democratic trends in Pakistan.
Despite these, political parties have adopted an attitude of wait and see. Mojor political parties like PPP, PML, ANP, JI and MQM have yet to announce their respective manifestoes and launch election compaigns. However, we can look forward to hectic electioneering activities in a few month’s time, once the exercises for delimitation of constituencies and finalization of voters’ lists are completed by the Election Commission and the relevant objections of major political parties like PPP and PML (N) are met.
The people of Pakistan have a fairly good idea what sort of rosy promises will be forthcoming as usually have been the case in the past, by both the democratic and the military governments which occupied the corridor of power rotating like musical chairs. They are tired of wishy washy developments which did not reduce the income inequality but widened the economic and social gap. They are no more fascinated by the promises of attaining high economic growth.
In the past, economic growth made the rich richer and the poor poorer because “it was not growth with equity”. They are also not interested in promises of foreign aid as it was not beneficial for the common people. They look with disdain at the so-called economic reforms and strategic macro economic policies which in fact worsened their economic condition instead of improving it.
Pakistan’s record of formulation and implementation of public economic policies has been dismally poor.An attempt was made in the first half of the seventies, when people-oriented policies were adopted but not implemented because of the callous indifference of the bureaucracy and the sinister interference of the vested interest groups.
The people of Pakistan are fully aware of the fact that the economic nose-dive started after 1996. Since then, the actual performance of the economy continues to be dismally poor. Wrong economic priorities, mughal style projects, misconceived economic policies, freezing of FCAs resulting in loss of investors’ confidence are some of the examples which contributed to the economic nose-dive. Half-baked policies of the present government further contributed to the economic and social deterioration. Despite the big claims of the present government, the economy continues to be in a bad shape. The overall economic growth rate was 3.5 and 2.5 per cent in 1999-2000 and 2000-2001 respectively, the lowest since 1990. The incidence of poverty did increase after 1996 because of four primary reasons: (i) low and falling GDP growth rate, (ii) increasing unemployment, (iii) crushing raise in utities’tariff, and (iv) the imposition of 15 per cent GST whose impact on the middle and low income groups has been severe. It would be interesting to note that increase in the price of gasoline, was 12 times during 1995 and 1999 and 20 times since October 1999 to date. From the point of view of the lower middle and lower classes which constitute the largest segment of the population, the most crucial issues in the forthcoming election are set out below.
The electorate will support a political party whose key economic agenda will be to solve the deteriorating economic condition and lay the foundation of a resurgent economy. They undoubtedly like the emergence of a vibrant Pakistan economy but it must be least regulated and most decentralized. The strategy for economic development should be based on “growth with equity”, reducing social and income inequality and control the rise of unfettered capitalism. With this end in view, a political party must formulate and effectively implement a thorough and comprehensive policy package based on economic pragmatism with appropriate delivery mechanisms and realistic implementation arrangements. The slogan of “Roti, Kapra aur Makan” has a higher degree of relevance to the existing economic conditions in Pakistan. Because of the gravity of situation, a political party must give priority to speedy economic reconstruction and provide quickest relief to the suffering people.
In so doing, it should be guided by three internationally prevalent criteria: (i) increase in people’s income, (ii) increase in employment level and (iii) increase in the overall quality of people’s life giving them good education, medicare, water supply and electricity at affordable prices. Proverty “elimination” and “not alleviation” must be the corner-stone of its economic policy. For this purposes, requisite investments must be sought both from domestic and foreign investors. The government must create and provide the necessary operational environment, friendly to their success.
In addition, effective social action programme like micro credit, self-employment schemes, rural works programme and a host of other activities must be generated in rural and urban areas through people’s participation and not through bureaucrats. There is need to intensify, formulate and implement projects which would employ at least half of the total adults numbering about 0.8 million which are added every year to our labour market. In other words, each year it must create job opportunities for 400,000 people, the balance will be taken care of by the market forces.
People believe that the economic well-being of the people can not be ensured unless the country is taken out of the debt trap. The current per capita debt in Pakistan exceeds Rs29000. Breaking the debt trap and bringing fiscal balance must be given top priority. In the industrial field, the policy of private sector-led industrialization, selective privatization and expansion of service sector industries should continue. Similarly, agro-processing industries should also be given priority to ensure better return to agriculturists.To make economic reforms successful, complementary steps will need to be undertaken to increase the efficiency and effectiveness of delivery mechanisms by reforming and strengthening them, particularly the general administration system, law enforcement system and revenue and tax collection system.
Based on people’s perception a six-point programme is suggested for adoption and implementation. These points are:
(i) Immediate relief: All adjustments, charges, surcharges, additional surcharges currently being paid by the consumers of electricity, petrol, diesel, gas, water and other utilities must be thoroughly reviewed and rationalized in such a manner as to give substantial relief to their consumers. In future, the prices of utilities should be indexed to the price of inputs. Input-output pricing studies of all utilities must be undertaken, keeping in view paramount interest of the consumers.
(ii) Review and rationalize the salary and wage structures:
There is need to introduce a social insurance and security system to ensure pension payment and economic relief after retirement. Income tax threshold level for small businessmen and salaried personal should be increased to Rs150,000.
(iii) Make “Rozi, Rozgar aur Mulazmat” the hallmark of the economic policy:
Additional employment and income should be generated through sustained investments by both private and public sectors for which special “guarantees” and “incentives” must be offered to the investors. All cases of those, who were victimized and thrown out of jobs in the name of downsizing, golden handshake or other pretext should be quickly reviewed, with the exception of those who were found guilty of mis-conduct or corruption. All staff thrown out of jobs on political or other grounds should be re-employed.
(iv) Tax less, collect more: This motto is in consonance with the international trend . All taxes should be levied and collected on the fundamental principles of public finance i.e “quid pro quo”, and “no taxation without representation”. Pakistan is one of the most heavily taxed countries where a person is subjected to 40 kinds of taxes and levies. After rationalization of taxes and levies, the number should be reduced to less than 10. There should be no misgiving that reduction in the number of taxes will lower revenue collection. Experiences of many countries show that the reverse has happened. Pakistan is a unique country where the cost of collecting a large number of taxes and levies is more than the amount collected. This also gives rise to the culture of “bhatta” collection. (v) Review all cases of dis-investment and privatization:
This is necessary to confirm that those activities were carried out with due diligence and transparency and in the best public interest. Similarly, merger or dismantling of several corporations, DFIs and other entities should be reviewed from economic and financial viewpoints to justify their efficacy and their need, to determine the best way they can serve the financial interest of various groups, particularly the common people and small depositors.
(vi) Introduce the concept of zero-budgeting in all ministries and government departments:
Each expenditure has to be justified on the basis of public interests. In this connection, all government expenditures should be reviewed and rationalized according to the principles of financial propriety and must be brought under rigorous audit. This will effectuate considerable savings by economizing expenditures and preventing corruption.
Political parties are fully cognizant of the fact that there are several constraining factors which would inhabit their economic performance when in power. There is the danger of lack of cooperation from the bureaucracy. They know that the support of the armed forces, international financial agencies, business and industrial groups, law enforcing agencies and the legitimate cooperation of the bilateral donors will play a crucial role. The voters also know it full well that the victorious political party will inherit not a bed of roses and will face stupendous difficulties in view of poor economic predicament of the country. However, they will be willing, without hesitation, in wishing well and pray for its successful performance.
The present regime has confirmed, time and again, that elections will be held in October 2002. Electoral reforms have been announced. The registration of voters and delimitation of constituencies are already in hand. This election is very important and it will be the first in the new millennium, setting forth the future direction and pattern of democratic trends in Pakistan.
