THE government may be getting ready to announce an ‘austerity’ budget but it seems that there is plenty of money to spare for bailing out billionaires. The prime minister’s adviser on finance had earlier approved a bailout package, euphemistically referred to as a ‘market support fund’. On Thursday, he got the Economic Coordination Committee to approve a Rs20bn sovereign guarantee to be given to the National Investment Trust, which will now use the money to invest in select stocks to help reverse the declines seen on the trade floor. The fund has been set up at the insistence of the stock market brokers, and it seems that the relevant approvals were acquired for it very quickly indeed. While it may be heartening to see the government working so fast and coming up with the resources for an important objective it has identified, it would have been better had this objective not been to bail out billionaires.

If anybody thought that the stock market should be what its name suggests — a market — they should now be disabused of that notion. In a market, buyers and sellers meet to generate a price with the government acting only as a referee to ensure that covenants are honoured. Second, if anybody thought that a cash-strapped government, which inherited a broken economy, would carefully utilise its scarce public resources — whether fiscal or credit — and spend judiciously in the public interest, they must think again. This government wasted no time in finding billions to bail out a handful of troubled super wealthy individuals, which seems to be the main objective of this so-called stock market support fund. Such actions contradict the government’s claims of taking austerity measures and make it difficult for the public to entertain any entreaties for austerity. Every call for sacrifice that is made to the general population will beg a simple question in return: why weren’t the wealthy asked to sacrifice first? The government’s move sends out the wrong message to those people who pay their taxes; besides it is certainly not the best way of utilising the country’s scarce savings. In these times of economic hardship, the finance adviser must publicly explain his decision about the fund if people are to be convinced of the effectiveness of the government’s overall economic agenda. Bailing out the rich is surely not a good way to start one’s tenure, especially when ordinary folk are finding it difficult to make ends meet.

Published in Dawn, May 31st, 2019