Is there no other way but to levy general sales tax on items of daily use because donors want us to do so? Will it not hurt poverty-stricken citizens the most if rates or spread of the indirect taxes are increased in the forthcoming budget?

In our situation, where the per capita income is as low as US dollars 429 and the rate of national savings to GNP is an abysmal 13 per cent, will it not serve as a disincentive if national saving scheme is rendered even more unattractive?

There is little wisdom in waiting for the nature to intervene to put right the stark imbalances in the country, that are getting worse over time. Better fiscal management and a positive current account balance provides little consolation when all major indicators such as large scale manufacturing, agriculture, investment and growth, are offering little cause for cheer.

The ultimate aim of good economic management is supposed to be the advancement of collective interests of all stakeholders in an economy.

Nobel laureate Amrita Sen describes growth as a phenomenon that involves improvement in basic standard of living of the majority of people, something that in his view could only be accomplished with a relatively equitable distribution of income and broad participation in decision-making in regard to political, social and economic affairs.

It is the responsibility of the government as that of all other stakeholders to look deeper and beyond their narrow immediate demands and work jointly to evolve a better suited economic strategy for the country. A strategy that may lead to progress without compromising the interests of the underprivileged who happen to be in majority and living below the poverty line of $2 a day.

The emergence of Pakistan on diplomatic radar of influential-donor Western nations after 9/11, translated into marked change in the attitude of donors— at least at first. Suddenly they became lot more understanding.

They could now appreciate the effort instead of insisting on results. Economic managers of the country deserve credit for negotiating debt rescheduling and for successfully persuading them to offer fresh loans on concessionary softer terms.

All of which, together with the giant leap in home remittances, has allowed the country to emerge with a current account surplus of $3 billion for the first time, after lingering for years, under the shadow of dismal current account deficits.

But is it just the fiscal space that this country needs to reverse the downslide of the economy? With increasing unemployment, pathetic state of social sector, dwindling rate of investment in manufacturing and infrastructure— all of which leads to more poverty and frustration—can the economic strategy adopted thus far deliver?

In these columns several learned economic writers have often defined the macro economic strategy of the country. In nutshell neo-liberal economic vision is the guiding principle of this strategy.

Its hallmarks are: deregulation, denationalization, downsizing—now cloaked in a more acceptable term— right-sizing, disinvestments and gradual withdrawals of the state from the social sector, liberal tariff structure and encouragement of free market operations. On IMF’s directions, transparency and documentation of the economy are also in focus.

The country’s economic gurus maintain that the policy is home grown. Some others argue that it is imported— rather dictated. The fact is that the thrust of our economic policies is very much the same as the one advocated by the IMF in almost all of the less developed loan recipient countries.

That leads us to a 64-million dollar question: Who supports this set of policies? For obvious reasons the majority of people cannot be expected to approve of it, as they are the ones who bear the brunt in the short term, with vague promises that they would reap benefits in the future. Argument goes that it is absolutely necessary to axe jobs in public entities and projects to make them viable. For a worker who is already under the burdens of living, loss of job is a personal tragedy specially in an stagnant economy, there is little hope that he would find a new one.

Can such a citizen be expected to understand the economic wisdom unless the economic regulators arrange for his employment elsewhere? With the rising incidence of poverty, need we stay unconditionally wedded to the IMF/ World Bank policy of user charges even in services that were thus far subsidized for those who cannot afford those services in the private sector. Introduction of fee in government hospitals and dispensaries is a case in point. Introduction of indirect taxes with different names in utility bills, allowing unilateral increase in rates of oil, introduction of GST on medicines and fertilizers, etc, all burden the society’s dispossessed even further. It is not difficult to understand how a policy that hurts the majority in individual capacity, can promote their collective well being!

So tangled is the situation that even the private sector which is to be the beneficiary of this policy and as ‘an engine of development’, it is primarily entrusted with the task of pulling the country out of underdevelopment trap, does not look satisfied with official treatment of economic ailments.

This scribe asked many business leaders over phone to comment on the content of the macro policies of the Government. They were reluctant to express their views. But some articulating ones said they found particularly tariff liberalization disturbing. They were critical of the successive governments that blindly follow the path laid out for them by donors especially the IMF, even when it hurts local industry.

As for analysis and critical evaluation of IMF policies in loan recipient countries, an economist of repute, an ex World Bank-IMF man, Nobel laureate Joseph Stigliz in his latest book “Globalization and its discontents” attacked IMF for its handling of economic challenges in post Soviet Union era of 1990s. He termed its attempts to address economic calls of this age, ‘big-time embarrassment’. For countries that tried to follow its advise, he writes that ‘Structurally adjusted countries proved resistant to treatment, with dismal growth performance and uneven reforms leaving behind a trail of globalization protesters, disillusioned politicians and angry citizens’.

Is it then absolutely essential to beat the beaten, on the advice of IMF, in the budget that is to be announced latter this month? It is a fact that poverty alleviation fund can, if at all, provide a temporary relief without correcting major distortions in the economy.

But what else is possible? Is there an alternate to given set of policy framework? There definitely is. It is high time that economic wizards put their heads together and carve out an economic strategy that is more responsive to Pakistan’s ground reality.

The one that eases the pressure on the general public and expands the local market. The one that creates a more conducive environment for industry and investment. The one that is not only workable but also looks so. The one that is not prepared in close boardroom of some ministry and imposed on people but that is debated and made in consultation with all stakeholders in the country.

Only a viable democratic alternative economic strategy will be able to pull the economy out of the quick sands of underdevelopment. Time is ripe for making such an effort also because donors whom country cannot afford to ignore are comparatively more approachable these days.