A little to be desired
The Sharifs have had their share of luck, economically at least. Their finance minister got friends to shore up the rupee when the exchange rate was under strain. The GSP Plus concession allowed export inroads into the European Union. And international Brent crude fell through the floor just when the dharna pressure began to choke the government. Through the last fiscal, Dar sb scored another novelty. He got the Fund to agree to downward revision of all major targets. That ensured the donors’ pat on the back and future tranches. And, not to the government’s surprise at least, it subsequently got rating agencies to upgrade Pakistan. There’s even talk of being granted emerging market status soon, even though the country fell short on all important targets, including growth, deficit, exports, tax, etc.
That hasn’t got PML-N to rethink its policy though. The focus is still on an expansionist fiscal policy – large scale government spending, but mostly on infrastructural projects – aided, surprisingly, by an equally accommodative monetary position. That was the gist of the federal budget recently. And that is again at the centre of the Punjab budget. There are two basic types of economic policies that are opted between in the modern day. One focuses on identifying areas that need long term investment, and a multi tiered development policy is pursued that delivers dividends over the long term. And there’s the sudden knee-jerk policy that invests in glitter and glamour of expansionism but one that ignores the real faults of the working economy.
It is instructive that an amount of Rs603 billion have been set aside for energy projects that are still under completion. Another Rs180 billion are meant for coal based energy projects. Typical of the N-league, such investments fail to answer crucial questions. For example, we have the necessary infrastructure to meet our energy needs. The problem is resolving the circular debt that is making people and institutions and governments pay for their power. But the budget keeps missing such imperatives. There are appreciated investments in education and health, but they government has not placed these sectors at the centre of its policy concerns. Such change of direction need to be incorporated, otherwise the economy will always be under strain.
