OVER time, the country’s socio-economic progress has generated and nurtured pluralism that has unfortunately found expression in political polarisation for want of required efforts to seek unity in diversity that can be forged by widely sharing rights, responsibilities and prosperity.

On a positive note, the socio-economic progress has unleashed a (assertive) middle class whose presence can only be ignored by forces of the status quo at their own risk and cost.

Looking at the big picture, Pakistan’s current economic model is not working, says World Bank Country Director Naiy Benhassine, adding ‘ significant progress in poverty reduction has now started to reverse, and benefits of growth have accrued to a narrow elite.

Enormous challenges facing the country are also creating conditions for a bottom-up approach in areas where the failure of a top-down approach is glaringly visible. There is a growing demand to hold local bodies polls before the general elections to strengthen their political clout.

The socio-economic progress has unleashed a middle class whose presence can only be ignored by forces of the status quo at their own risk

Highlighting the importance of the local government system for involving the youth in the democratic process and providing them with training, PML-N leader Ahsan Iqbal says his party will pass a constitutional amendment through the next parliament (if it comes into power) to ensure that local governmental bodies do not rely on the mercy of the provincial governments and have a constitutional cover.

Smaller middle-class political parties, such as Jamaat-i-Islami (JI) and MQM-P, focused on local issues, are finding space to operate in the political mainstream.

The issue of democratising and empowering local bodies has become an important national issue. PML-N has also reached an agreement with MQM-P for their empowerment. Ahsan Iqbal says his party is completely satisfied with the gist of the draft bill presented to its leaders by MQM-P, seeking constitutional amendments to politically, financially and administratively empower local bodies.

The proposed bill stipulates that the powers and authorities of the provincial government departments will shift to local governments, covering socio-economic development, urban planning, education, health, infrastructure, environment protection, agriculture, (required) taxation etc.

In the preface to his book titled ‘Pakistan: Economic Challenges and Solutions’, former advisor to ex-prime minister Imran Khan on governmental reforms, Dr Ishrat Husain writes: “national and provincial legislators have so far resisted the devolution of power and decentralisation of resources to the local governments during all the regimes.”

Putting things in historical perspective, the local taxes — octroi and zila tax — were abolished by former president Pervez Musharraf and the loss of revenue was compensated by the provision of funds in the sixth National Finance Commission award.

Large funds are currently provided in the national and provincial budgets to finance schemes initiated by parliamentarians for their constituencies to improve the chances of so-called electable(s) in re-election. The scheme was started by former president Zia ul Haq.

Politicians and wielders of power have to realise, says Dr Ishrat, that “they and their parties are getting a bad name because of the large-scale dissatisfaction of the citizens when they cannot provide essential public services such as education, health care, drinking water sewerage etc.”

Article 140-A of the constitution provides fiscal, administrative, and legislative empowerment of the third tier of the government and remains unimplemented despite the Supreme Court orders.

Amidst crisis following the crisis in rapid escalation, Zulfikar Ali Bhutto wrote decades ago that ‘trying to defend the status quo as if it is immutable is to hasten the collapse of status quo’. We have seen how the 1973 Constitution, 18th Amendment, and 7th NFC award have emerged from failed arbitrary rule. Sooner or later, resistance to much-needed change crumbles.

Gohar Mustafa Chaudhry
Owner of Gohar Textile Mill, Faisalabad

THE outgoing year of 2023 hasn’t been a good year for the economy, businesses, investment and exports because of a variety of reasons, including but not limited to currency volatility, high energy prices, record high interest rates, and so on.

As we enter 2024, we should be mindful of these challenges and start tackling them urgently if we want to take advantage of vast opportunities for our exports in the international market. With the elections scheduled to be held next month, the new government, in my opinion, will have its work cut out for it.

I think the new government should focus on four areas — policy consistency, currency stability, energy price stability and ease of doing business — on war footings. The years of bad policy choices have already made our export industries, including textiles, uncompetitive in the world markets.

We should revamp our policies to push investment, bring the focus back on exports, restrict non-essential imports to save dollars and cut our unnecessary public expenditure on the beautification of a few cities, which can be done later when we have enough money for such projects.

As far as 2024 is concerned, I remain cautiously optimistic about the economic outlook. We will not come out of the present crisis unless our governments prioritise the economy over their short-term political goals.

Dr Khurram Tariq
President Faisalabad Chamber of Commerce and industry

WE live in a vulnerable country in an uncertain world. While the future cannot be predicted, I can make a few observations.

Political stability is not in sight. While the country may experience economic stability by the last quarter of 2024, political certainty cannot be expected. Actual economic growth will remain subdued, flat at best, because no fundamental change has been realised in 2023.

The fixed cost (capacity payment) component of electricity prices will rise further. Even if there is a drop in generation costs or we have a favourable energy mix, the price of electricity will continue on an upward trajectory, similar to gas and oil prices. Houthis’ behaviour in the Red Sea could be another detrimental factor.

My expectations for the FY25 budget include an increase in unfair taxation on the existing taxpayers without broadening the tax net. It will not translate into substantially higher tax collection.

Despite improving external factors and lower inflation in our exporting markets, I do not expect an increase in exports, mostly because of endogenous issues such as policy changes. Exports are the easiest and most effective way of improving the trade balance but lack ownership by all concerned quarters. Exports are a child everyone wants, but no one fathers!

Malik Tahir Javed
Director, MGA Industries

I AM not sure whether our political system will ever improve for the better; it has not done so for a long time. I expect inflation to continue surging in the foreseeable future. Exports will not fare better either, unless and until the red tape around business diminishes significantly. In that, the State Bank of Pakistan has to be supportive, which it has not been so far. I am not optimistic about the overall situation in Pakistan as the basic things have not changed.

Published in Dawn, The Business and Finance Weekly, January 1st, 2024