Does it matter?

Published June 3, 2016
The writer teaches at Quaid-i-Azam University, Islamabad.
The writer teaches at Quaid-i-Azam University, Islamabad.

THE federal budget should be presented in the National Assembly today, after which it will become the subject of grand polemic for the next couple of days. One side will talk up ‘development’ and ‘investor-friendly’ policies while the other will decry the whole exercise as ‘anti-poor’. And then all will be forgotten when the next piece of ‘breaking news’ erupts onto our TV screens.

Make no mistake — we live in an era in which our attention spans are so short that every day heralds a new drawing-room conversation. Certainly some themes never seem to go out of fashion — corruption, the venality of politics and politicians, the never-ending threat of terror and the heroism of the men in khaki most prominent of all. But the superficial nature of the ‘debate’ around even these themes confirms our preference for the whimsical rather than the substantial.

Usually there is some interrogation of the state of the economy in the lead-up to the budget announcement. This year even this convention has been sacrificed at the altar of the Panama leaks and the prime minister’s ailing heart. Having said this, the ‘experts’ mobilised by the media to comment on economic affairs always depict Pakistan’s economic problems in textbook terms, even though the reality of our socioeconomic life defies bookish conceptions.


‘Experts’ depict our economic problems in textbook terms.


I have written before about the so-called ‘informal’ economy and the growing body of scholarship on the phenomenon of informalisation. Unfortunately, academic scholarship in Pakistan is a microcosm of the wider political and intellectual mainstream, and so there is still very little empirical information available on the size of the informal economy as well as the nature of activities therein.

Four years ago, at exactly this time of year on these very pages I questioned the efficacy of the budget exercise (and the Economic Survey that is released alongside it) in the absence of accurate, stylised facts about the ‘real’ (informal) economy. I have no reason to believe that we are today any closer to a more meaningful analysis of economic affairs.

Even if one is to ignore this rather large elephant in the room, formulation of policy vis-à-vis the documented economy has become a virtual formality given the country’s acute dependence on foreign donors.

Generally in Pakistan, there is a blanket tendency to attribute our lack of autonomy on policy matters to the World Bank, IMF and other multilateral donor institutions that are perceived to represent the interests of the imperialist West. Yet over the past few years the Chinese juggernaut has started to make its presence felt in Pakistani markets. CPEC will change our patterns of dependence entirely.

The clerks, teachers and other white-collar government servants currently on the streets demanding pay increases commensurate with the cost of living know enough about the workings of the capitalist world system to cry themselves hoarse over our rulers’ pandering to the World Bank and IMF, as do the workers of privatisation-bound state enterprises such as Wapda and PIA.

But the murmurings of our (admittedly weak) local industrialist against the influx of cheap Chinese consumer durables into Pakistan are not nearly as loud, and therefore the myth of economic hegemony being exercised only by the ‘West’ — including multilateral financial institutions centred in Western countries — continues to be sustained.

It is, of course, too early to be concluding exactly what the long-term impacts of CPEC-related investments will be. But there should be little doubt that the Chinese economic (and ecological) footprint will be at least as large as anything that Western governments and institutions have ever left on Pakistani soil. And the controversy over the CPEC route suggests that regional and ethnic tensions within the country are likely to intensify as the project proceeds, especially if and when our debt to China starts to pile up and the question of its repayment raises its head.

For their part, the Chinese are painting an extremely rosy picture, even insisting that Indian-Iranian plans to develop a deep-sea port at Chabahar should be seen as complementary to CPEC and Gwadar. Pakistani hawks see Chabahar as a grand conspiracy, alongside any activity within Pakistan that is not unconditionally welcoming of CPEC. One way or the other, Pakistan’s political economy is undergoing a not-insignificant makeover which requires interrogation, not slogans.

In the final analysis, the budget announcement is meaningful only because it will be a virtual copy-paste job from years past. We will be reminded of how little our ruling class is willing and able to think outside the box, both in terms of identifying the problem and then devising solutions. A large chunk of expenditures will continue to be dedicated to defence and debt-servicing, the informal economy will be ignored, and there will be much talk of how China’s investments promise to be a game changer. And one cannot help but ask: does any of it matter?

The writer teaches at Quaid-i-Azam University, Islamabad.

Published in Dawn, June 3rd, 2016

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