Ill-conceived policy

Published April 6, 2020

PRIME MINISTER Imran Khan has announced a major list of incentives for the construction industry aimed at boosting the economy at a time when the adverse impact of the coronavirus is wreaking havoc across all sectors. The prime minister vowed to open allied industries to strike a balance between economic activities and efforts to contain the pandemic. On the face of it, the logic of incentivising the construction industry is a sound one. It will spur activity across a wide spectrum of sectors, attract investment, generate jobs and provide economic sustenance to those who need it most. The prime minister has been speaking of the benefits of a growing construction industry, and the government’s Naya Pakistan Housing Programme is also aimed at producing such a beneficial effect for the economy. Yet there is a problem.

The announcement is fraught with risks. At a time when the entire world is prioritising lockdowns so that people can stay indoors and away from each other in order to suppress the spread of the coronavirus, the prime minister’s policy will have the opposite effect. By incentivising the construction industry and encouraging it to start its activity, the government is getting people out to work. It is not just a question of those who will be working at construction sites but also all those citizens who work in allied industries who will now be forced back to work. In essence then, the federal government is diluting the concept of a lockdown and asking thousands of Pakistanis to run the risk of either getting infected with the virus or infecting others. This is not just bad policy, it is outright dangerous.

Similarly, giving tax breaks to investors makes sense in certain circumstances, but here the government has essentially allowed people to whiten their black money by investing it in the construction sectors. By all standards this amounts to giving holders of black money an amnesty scheme without the government gaining anything from penalties. This goes against everything that Prime Minister Khan has stood for and it negates his principal argument that the corrupt should not be rewarded for their corruption. The no-questions-asked decision has to make sense within a larger policy construct whereby there is sound economic, political and ethical justification for allowing the black deeds of people to be whitened without any cost at the altar of ill-conceived policies. The prime minister should be cognisant of the fact that, by going ahead with this policy of reviving the construction industry on the terms and conditions specified, he runs a real risk of undermining his own standing as a crusader against corruption. He may want to rethink the move before it starts to take a toll on his politics and on the health of Pakistanis at large.

Published in Dawn, April 6th, 2020

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