Looking at the horizon

There is an opportunity at the time of announcing an ‘annual budget’ of making use of lessons learned hard during the previous year. The end of the fiscal year is also a time to formulate fresh new policies to tune oneself to the pulse and heartbeat of the needs of the people, the industry, the labour-force and the rural community. Never in the economic history of this country, has fiscal and budgetary policy been so far removed from the ground realities.
The ups and downs of world economy and the economic thought around these undulations have developed far in the last hundred years or so. A sincere but focused attention and effort can help to comprehend the actual market sensitivities at a particular time and thus propose real-life solutions to the problems.
It is indeed heartening to know that the per capita income has crossed the twelve hundred dollar ($1254) mark. This, when translated to purchasing power parity (PPP) figures is likely to give even a very rosy picture of a consumer to an economist living outside Pakistan. But this is not so.
Sadly, the income distribution data is not given out by the economic survey. It would incorrectly help anyone speculate by suggesting harsher measures to be imposed on sectors of economy that are already under strain and crumbling under their weight. To pursue unrealistic policies is most likely to result in creating dichotomy, schism and mistrust between different sectors of economies. This is exactly how the scenario has developed in this country.
The divide between the rural and the urban communities is ever widening at an alarming rate. Investment and project development is largely concentrated in the urban sectors. This has contributed in pushing further away the rural sector to the margins of the economy, thus depriving them of their basic needs of health care and education. The rural area and the supporting small towns are the real backbone of the economy. The agriculture sector, despite heavy and unprecedented floods, still managed a growth rate of 1.2 percent in 2020-11 (in 2009-10, the growth rate was even below one per cent).
Pakistan ought to have been knocking at the threshold of fulfilling social and similar aspirations of its people. The PSDP allocations of 290 billion rupees for 2010-11, could barely be utilised. Its utilisation remained below 70 % of the target. This year allocation of 290 billion rupees should expect no better results unless managerial efficiency is effectively improved. The economic planners of the budget 2011-12 do not read the signs of an economy in real flux.
In the first 10 months of the fiscal year, exports registered a growth of 28 percent and crossed 20 billion dollars. They are projected to exceed 24 billion dollars mark in the current fiscal year, despite problems of the energy sector. Foreign remittances stood at 9.1 billion dollars in the July-April period and expected to cross 11 billion by the end of the year.
To put reliance on remittances and again to wait for international donors and agencies to help fill the deficit by injecting large amounts is not a very healthy prospect for an economy to develop. This is especially so, when any mega-project in the energy sector ($115 billion is not enough) or any infrastructural development is not envisaged. To borrow and thus to cater to fulfill the hourly needs of a day is like mortgaging the very future of an independent nation.
To borrow internally or externally without commensurate and sound policy to plan assiduously, to help revive a sluggish economy with such a plan, to remove the unnecessary roadblocks for the market economy to develop in a free and competitive environment, is a sine qua non for such policies to yield results.
The beauty of any democracy is to take on board all the players, the farmers and the industrialists, the labourers and the students, the academicians and the managers, so as to cater to each one’s needs and interest. It is an ongoing effort and a continuous struggle to find ways and means to search for common ground or space between different competing groups or individuals. “God has given us a grand opportunity to prove our worth as architects of a new nation.” So we were aptly advised by the father of the nation. Let not the historians say that we could not “come up to the task”.
In a recent Gallup poll, a small minority answers negatively about things getting any better. But a good majority is of the view that solution lies in looking for and following strains of collective thinking. They see strength in a collective effort to take economic and other matters out of a morass. No effort in this direction is visible in the planning process.

The writer has served as a consultant to the United Nations and other developing economies on issues of trade and development.