Budget Blues

  • And hardships galore

Barring a last minute glitch, around a $7billion IMF (International Monetary Fund) bailout package is virtually clinched. Now begins the hard part of meeting the international lending agency’s tough condtionalites.

The conventional wisdom is that in the end analysis Islamabad completely capitulated in negotiations with the IMF officials. In the backdrop of an unprecedented shuffle in the finance team one unnamed finance ministry official quipped that the IMF is talking to the IMF.

Advisor on finance Dr. Hafeez Sheikh is a former World Bank official while the newly minted governor of State Bank of Pakistan Raza Baqir flew in directly from Washington to take charge. He was serving as resident representative of the IMF in Egypt overseeing implementation of an IMF package for the country.

In the meanwhile the government is sticking to its ad nauseam mantra that the previous PML-N and PPP governments are responsible for the travails of the common man

Shabbar Zaidi the new ‘pro bono’ chairman of the FBR (Federal Bureau of Revenue) belongs to the private sector. He was senior partner in a leading chartered accountancy firm of the country.

Senior officers of the FBR have shown stiff resistance to his appointment, terming it as a clear-cut case of conflict of interest. But Khan bent upon ushering in a fresh economic team steamrolled this appointment despite technical and legal hitches.

The opposition is having a field day criticizing the induction of the new economic team terming it as an extension of IFIs (international financial institutions). According to this logic the PTI government has bartered away Pakistan’s sovereignty by bringing in former or serving World Bank and IMF apparatchiks.

Ironically this is not the first time that the finance ministry or the State Bank is being headed by foreign clones. Shaukat Aziz was directly inducted as finance minister while general Musharraf was ruling the roost. Later he became prime minister. Moeen Qureshi, a retired senior official of the World Bank had previously replaced Nawaz Sharif as the caretaker prime minister.

Various State Bank governors in the past had served in the IMF or the World Bank. The PPP during its last stint in the government had brought in Dr. Hafeez Sheikh as finance minister. So how can it justifiably object to the induction of the same person by the PTI government?

Inevitable further hiking of gas and electricity rates, free float of the rupee against the dollar and exponentially increased taxation is bound to bring enormous hardships for the populace already reeling under the yoke of a historically unprecedented economic downturn. Impending devaluation, withdrawal of exemptions to the tune of Rs700 billion in two years and removal of subsides taking Rs340 billion from consumers will result in more misery for the populace.

Notwithstanding the rhetoric of the PTI that the previous government left everything in a mess, the economic performance of the present government in its first nine months to put it mildly has been dismal. According to official figures the economy has suffered major setbacks during the current financial year.

The economic growth rate is expected to be no more than 3.2 percent significantly short of 6.2 per cent growth target for year 2018-19. According to former finance minister Dr. Hafeez Pasha low growth rate in the agriculture and manufacturing sectors would add 4 million people falling below the poverty line and about one million people will be rendered jobless as per his estimation.

This has come in the beginning of a long hot summer.  Unfortunately despite the prime minister’s morale boosting rhetoric there is hardly any light at the end of the tunnel.

In the meanwhile the government is sticking to its ad nauseam mantra that the previous PML-N and PPP governments are responsible for the travails of the common man.

Being in the government for nine months this logic hardly cuts any ice now. Khan handpicked his economic team.

If his blue-eyed boy Asad Umer let him down only he himself is to be blamed. Similarly Jahanzeb Khan as chairman FBR was appointed by the present government despite the fact that he was a key member of Shahbaz Sharif’s dream team in Punjab.

With the exception of a few favourites the media remains the convenient whipping boy. Firdous Ashiq Awan inducted as special assistant in the recent cabinet reshuffle is singing for her supper. Hectoring the media the other day she wants it to shun negativity and project a positive image of the government.

She served the PPP government with the same zeal as information minister. Instead of lecturing media persons on how to do their job she should be introspecting with her boss about the message that is no longer relevant and needs drastic revision.

It is the media’s job description to report all that it deems fit to be news. Unfortunately right now it is mostly bad news to report.

Khan should be rethinking his style of governance. Running a complex country like Pakistan is neither cricket nor like running a cancer hospital.

The ham-handed impetuous style of decision-making is only adding to the confusion as well as misery of the people. With absence of any modus Vivendi with the opposition and rumblings within his own party the prime minister has a lot on his plate.

Induction of technocrats in the top echelons of the government is being seen as a virtual no confidence on the ability of his own party members of the parliament. Almost all fresh inductees aren’t from the PTI nor are members of the parliament.

The opposition dismissed as a bunch of crooks paying in kind is playing negative politics. The parliament has become like a fish market with hardly any serious business being conducted.

The prime minster like his predecessor is loath to participate in its proceedings. His arrogance knowing no bounds he avoids even to shake hands with the opposition members on the rare occasions he graces the House with his presence.

The budget has reportedly been delayed till the second week of June on the pretext that the FBR needs more time under its new leadership. Unfortunately finalising the IMF package and announcement of the federal budget has become closely interlinked. The IMF frontloading its condtionalites would like to see them inducted in the budget.

After the event it is now being said repeatedly that the government should have gone for an IMF package immediately after assuming power. But at the time Imran Khan and his team naively assumed that overseas Pakistanis would be enthusiastically chipping in large amounts for their love for their leader as well as friendly countries will come to the rescue.

This did not happen. Resultantly Khan is facing a double whammy. On the one hand the PTI has lost a lot of goodwill it had immediately gained after winning the general elections. On the other, the opposition is up in arms against the government.

Hopefully the disgruntled and the dispossessed will not take to the streets. But the possibility of the opposition in order to cash in on the impending disaffection can transition into agitation mode. That can rock not only the government but the fragile democratic project as well.