ISLAMABAD, June 3: Two non-productive expenditures — debt- servicing and military spending — have always dominated the budget and until these expenditures are drastically reduced, it will be impossible to meet people’s needs through social sector expenditures and employment generation activities.

These views were expressed at a pre-budget seminar organized by the People’s Rights Movement at a local hotel on Tuesday.

Former finance minister Sartaj Aziz (PML-N), Abid Hasan Minto (National Workers’ Party), PRM representatives Mushtaq Gadi and Aasim Sajjad and others spoke. Members of PRM’s constituent movements, including Anjuman-i-Mazarain Punjab, All-Pakistan Alliance of Kutchi Abadis, Damaan Bachao Tarla and Deharidaar Mazdoor Union, attended the programme.

The speakers pointed out that the burden of revenue collection fell on the poor through indirect taxes such as the general sales tax, which reflected the elitist character of the state.

It was highlighted that the poverty reduction strategy paper (PRSP), which will soon be completed outlining the state’s economic philosophy, was based on the same paradigm of trickle- down growth in vogue over the last two decades, known as structural adjustment.

The international financial institutions (IFIs) have attempted to deflect criticizm of structural adjustment by introducing rhetoric about poverty reduction, but the fact is that liberalisation, privatisation, subsidy cuts and regressive taxation policies are still being emphasized and these policies have clear poverty-enhancing effects, they added.

It was stated that the government and the IFIs had been very vocal about the fact that poverty-related expenditures had increased recently. However, the percentage of the budget devoted to the poverty-related expenditures has not been changed significantly.

Furthermore, real wages have decreased and, therefore, poverty has increased rapidly. It was also pointed out that the government had not followed the populist promises outlined in the PRSP, such as the redistribution of state land to the landless and granting of proprietary rights to kutchi abadi dwellers.

Instead, they added, state repression against tenants in Punjab was going on. “Unless the budget takes account of the fact that over 70 per cent of the population derived livelihoods from agriculture, poverty situation will continue to worsen.”

The speakers highlighted the extreme political pressures that elected governments faced from international finance institutions.

They said it was clear that the PRSP process was a continuation of policies that were implemented by governments throughout the 1990s. The military governments, they said, had no accountability to the people and needed not worry about the impacts of adjustment policies.