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AT one point during the budget speech, the difference between Ishaq Dar and his predecessors became fairly apparent. The finance minister was in the middle of a somewhat unnecessary tribute to Pakistan’s water resources, when he paused and coughed. At that moment, the microphones amassed in front caught a giggle from the legislator next to him, followed by a rhetorical ‘ki ho gaya ae tainu’. It’s impossible to imagine this kind of banter with someone like Hafeez Sheikh or Shaukat Aziz.
The key difference is that Dar is politically and culturally rooted in the party. It doesn’t matter whether it’s by association, by marriage or by a combination of other factors. In contrast to the technocratic, sterile appendages of the past, he, proverbially put, speaks the same language, and appears to occupy significant centrality as far as the party’s political calculus is concerned — a fact quite clearly reflected in this year’s budget document.
The basics first: there’s no denying that the budgetary goalposts were defined by conditions frontloaded in last September’s $6.6 billion IMF stabilisation programme. This much is reflected in the stated commitment to reducing the fiscal deficit by another 1pc (from a reported 5.8 to 4.9pc), by a Rs10bn reduction in the energy subsidy allocation, a reduction in the corporate tax rate, and an increase in the overall BISP allocation. Most, if not all, of these measures were agreed upon in the IMF-Pakistan budgetary framework meeting held on May 9.
Within the broader parameters, set by an external commitment to the IMF, lie the many domestic calculations carried out by the party, specifically by the finance minister. Textile exporters miffed at the exchange rate appreciation have been placated through a continuation of the Drawback of Local Taxes and Levies facility, a reduction in the refinancing rate, and continuation of duty-free imports for machinery. Similarly, automobile manufacturers, who’ve lobbied against the existing import and tariff structure, have been granted a reduction in the excise duty on cars above 1800cc.
What is even more telling is the reaction to the budget from organised business associations. The All Pakistan Textile Mills Association, which enjoys generous access to the finance minister and is Pakistan’s most pampered lobby, has hailed the budget as ‘pro-business’ and hence ‘pro-common man’. The Pakistan Apparel Forum calls it a ‘sensible’, ‘growth-oriented’ budget.
The Pakistan Automotive Manufacturers Association has exhibited pleasure at ‘finally’ having a mutually beneficial relationship with a committed government. The Federation of Pakistan Chambers of Commerce and Industry is pleased that nearly all its recommendations, drafted two months ago at a gathering where Ishaq Dar gave the keynote address, have been incorporated in the budget.
Even those who’ve received a much smaller share of the concessionary pie (and a new sales tax burden), such as retail and wholesale traders, have largely offered their support to the government’s plan.
At a political economy level, these reactions, while unsurprising given the budget itself, reflect the conversational, Dar-managed ties between the party and what it deems its most important constituencies.
As a sub-plot in Pakistan’s democratic transition, this is probably the first time in our history that a coherent logic is visible between party politics and the messy business of economic administration. With the right kind of relationship management, and provision of adequate concessions and significant amounts of patronage, the PML-N is strengthening its image as a party that can keep a support base both shored up and mostly content.
What does this all mean for opposition politics? For starters, it leaves the PTI in an uncomfortable position as a distant second option in Punjab. Given that they share largely the same economic vision as the PML-N (pro-growth with ancillary support to welfare), there’s nothing that would make dominant societal segments build ties with a party on the opposition benches over one that’s actively working for them in government.
Secondly, it produces all sorts of incoherent positions driven by a skewed sense of populism and moral righteousness. This was best, and most ironically, captured in a budget analysis talk-show where Asad Umar of all people was railing against the government for subsidising big businesses at a heavy cost to the common man.
While the budget debate will continue for a couple of weeks, there appears to be no indication that any mainstream opposition party has a substantive critique of the budget or the concessionary logic it appears to follow.
The most we can expect to see is some nitpicking over a particular tax instrument or a tariff change, and perhaps some PPP-induced pressure to direct greater attention towards the agriculture sector. Simply put, being armed with a finance minister who carries political clout has helped the government win the dual battle of ensuring another year of support from whoever’s deemed important, and making the opposition look fairly toothless for now.
Basically, it doesn’t matter if the party is run like a small-time shop, as a writer so brilliantly put it the other day, or that there’s no time frame or vision beyond today and the immediate tomorrow. The fact is — if one runs with the shop analogy — they know who their consumers are, what products they like to buy, and how to strike a mutually acceptable bargain. Therein lies the PML-N’s greatest political victory during this past year.
The writer is a freelance columnist.
Published in Dawn, June 9th, 2014
