AMID political mudslinging, of which it is a part, the PML-N has changed course by unveiling parts of its election manifesto to ‘seek feed back from all segments’ of the society.
The move is a relief for many tired of seeing mainstream parties gunning for each other rather than addressing the country’s persisting, multiple crises through mutual cooperation in areas where their ideas converge, (as in the case of the NFC Award and 18th Amendment), while maintaining an independent posture where they differ. In the realm of economics, with few rareexceptions or emphasis, there is a general consensus on major (market-driven) policies.
The PML-N’s major focus will be on three ‘Es’ –energy, economy and education. It promises to try to control load shedding within two years and circular debt in six months. However, Mr Nawaz Sharif says it is difficult to give a definite time framework.
This is a move for firefighting and not long- term fixing of the energy crisis.
No doubt, the author of the manifesto, Mr Ahson Iqbal, a former deputy chairman of the Planning Commission under a former PML-N government, seems to be aware of the constraints in resolving the two deep-rooted problems ranging from poor governance/ institutional decay of utilities( of which circular debt is a product) to changing energy-mix. The energy problem cannot be resolved without strenuous short- and long-terms efforts.
For economic recovery, the PML-N’s strategy focuses on commodity producing sectors, which, one hopes, can end the long phase of de-industrialisation by ‘reviving closed factories, ‘improving agriculture’ and ‘establishing agriculture industry’. As it is, bulk of the workforce is employed in manufacturing and agriculture and may create more jobs as claimed by the PMLN manifesto.
The process of mechanisation and commercial of agriculture, particularly dairy farming, is picking up, though still at a slow pace. The real issue is to speed up the process to provide an impetus to modernisation. of agriculture. For this, the crop-sharing pattern needs to be replaced with cash contract system to provide further impetus to free mobility of labour. And the unbridled transfer of incomes from countrywide to the urban centres needs to be reversed to allow farmers to earn and save enough toinvestment. The increase of support price of wheat has been a move in that direction. Much more needs to be done.
In the past nearly two decades, the financial system has expanded fast with disproportionate gains at the expense of all the rest of the economic agents. The PML-N’s incentive package for industry may bring about a more desirable equilibrium between industry and the financial sector. The current energy crisis shows that growth in all segments of the economy have to be harmonised to scale up GDP growth rate. However, care should be taken to avoid risk of ‘incentives’ (for industries under stress) turning into rent-seeking while the past experience about revising ‘sick units has not much to offer.
In the current phase of economic crisis, it is ideas that count more than capital. Mr Nawaz Sharif rightly points out that ‘nations were not progressing on muscle power but on brain power.’ Thus education is one of the three priorities in the PML-N manifesto. Education has acquired an unprecedented significance in the current phase of high-tech-driven economic development that has also speeded up the dispersal of capital.
But the problem arises in the current model of economic growth which cannot produce enough jobs for the educated youth in particular and the unskilled in general. The PML(N) wants to tackle the situation by providing interest-free loans to the youth, which it says , constitute 60 per cent of the population. Such experiments in the past have not proved and unqualified success.
It is not known if any lesson has been learnt from the past experience.
However, self-employment, helped by promotion of IT, as envisaged by PML-N, can take care of joblessness on the periphery but not in the mainstream at a time when big corporations (PTCL’s latest move) are shedding labour and the cash-strapped government is unable to undertake massive social spending (on health and education) and on upgrading of physical infrastructure that could create jobs and improve efficiency in the economy. Even now, the pace of self-employment is rising, indicating a future trend. To strengthen this emerging trend as well as ensure full employment , the country needs an employment policy. And the mandate of the State Bank of Pakistan should be expanded to encompass inflation, growth and employment as is the case of the US Fed.
The manifesto claims that ‘the state will help the poor’. It is not clear whether the poor will be put to productive work or they will be assisted with doles like the PPP is doing through the Benazir Income Support Programme. There is very little fiscal space for widening the social safety network. The government, with mounting fiscal deficits( the problem will not go away any time soon) can ill-afford this generosity. The poor surviving on doles would be a liability for a cash-strapped government, but if put to work, they would be an asset, earning their livelihood and contributing to productivity and economic growth. It means targeting full employment. It also means reviving district governments and empowering communities, on which the manifesto is (so far) silent. .
Mr Nawaz Sharif says that he ‘would not let the people live in utter disappointment, poverty and darkness’. For this to happen.
It requires a different socio-economic programme, policy , strategy and action plan, and an effective service delivery system.
And no less important, it requires a radical shift from a dominating rent-seeking culture to a strong commitment to ‘common welfare.’ Mere crafting of a manifesto, however, well- meaning and well-intentioned, would not help.
While the PML-N is trying to tackle challenges through traditional approach, the core issue is the basic faultline in the existing model of economic growth. In the absence of an income distribution policy, and an employment policy, neither can poverty be eliminated nor a high growth rate be sustained. There has to be a balance between concentration of wealth (for new investment for producing more goods and services) and distribution of income (for creating affluent consumers and prosperous domestic market). Economic programme and policies should be anchored on full employment.
The PML-N manifesto promises to bring ‘Pakistan at par with the ten leading economies of the world.’ While the objective islaudable, it cannot be assumed that it would inevitably lead to common welfare. For past few decades, to quote Joseph Stiglitz the US economy has ceased to work for the benefit of most Americans. It is time to revisit the current economic model to build a ‘ new Pakistan’ and a new world in which every citizen is a participant and shares equitable benefits. Traditional approaches cannot build a new Pakistan.
One may recall what former President Ayub said towards the end of his ‘development decade’ in his book “ Friend, Not Masters’: “Our present destiny is to move from crisis to crisis.” Economic development and equity are inseparable twins.