A budget looking beyond economic growth

  • Pakisan can learn from the New Zealand example

The PTI government came on the agenda of change towards a radically different Pakistan– a new Pakistan– and soon it will be presenting its first budget. One of the main steps to deliver this new Pakistan is to change the way governments have previously thought about budgets. Traditionally, budgets have focussed on economic growth being the main goal– whether it be the increase in the level of output at the national level, or at the disaggregated sectoral level. This approach has not taken into much consideration the distributional or equity concerns, which in a country of high-level poverty and inequality are important objectives, along with the budget addressing the environment-related concerns, as climate change looms large on the very future of existence of life.

New Zealand has recently presented instead a wellness-based or ‘wellbeing budget’, which looks beyond the economic growth target to ‘…considering social, environmental, and economic implications together’, to quote their ‘budget at a glance’ document. In the words of Professor Richard Layard, an expert on life satisfaction across populations, of the London School of Economics, ‘this budget is a game-changing event.’ Moreover, he indicated that there is ‘no other major country that has so explicitly adopted well-being as its objective’, in turn, making New Zealand the only country rethinking GDP (gross domestic product or national output) as the best measure of a nation’s success.

Pakistan needs that economic consensus and unity of purpose. It is only then that the government can deliver on its promises right through from the federal to the provincial, and all the way to the local level

The wellbeing budget of New Zealand intends to achieve these objectives by allocating resources for planning and executing in three directions. Firstly, the budget intends to improve the coordination among ministries/ departments so that the current situation of ‘agency silos’ could be dismantled. It is important to understand, plan, and implement the wellbeing policies in a holistic manner– as life is– in a harmonized way. This situation is a chronic one in Pakistan, where there are even problems resulting from lack of coordination within government authorities, and not just among ministries. The upcoming budget should allocate resources and identify some sort of line of action regarding this significant issue. No political slogans will work without the presence of well-coordinated effort of institutions or ministries.

Secondly, the budget should allocate resources in a way that the economic development it generates is both humane and sustainable. While the projects and programmes being undertaken must not only meet the needs of the present generations, but also the long-terms impact of these allocations for future generations must also internalized.

Take, say, in Pakistan, there was a lot of focus on flooding money into building numerous infrastructural works of a nature whereby a lot of natural habitat– trees, natural green belts, flora and fauna– were destroyed to accommodate the growing traffic needs of big metropoles. Instead the budget did not take a futuristic view and invest resources in promoting alternative ways of travelling like cycling or making available more buses, or underground trains, among others. Similarly, efforts were not highlighted in the budget to avoid putting too much focus on exploiting fossil fuels, and instead more resources were not allocated to, or planning carried out for, making use of alternative/renewable energy sources.

Thirdly, the budget should take a broader view of ‘success’, whereby not judging it in terms of jut putting allocations for stand-alone infrastructural projects and programmes in the social sector, but rather also allocating for improving the quality of life that people are living in their daily lives. For example, it is not just the number of schools that matters, but the quality of syllabi and teachers, the way the examinations and overall job screening mechanisms are designed. Similarly, the experience of the workplace is also targeted for improvement, and not just mostly focussing on the level of wages. Hence, there are indeed numerous aspects that determine the quality of life that need to be focussed on. For this to happen, the government will have to also allocate resources for improving the status of research and innovation in the country.

This needs to be corrected under the new government’s slogan that things will be done differently in Pakistan from the past. The time has come for this slogan to be reflected in the upcoming budget. No IMF (International Monetary Fund) programme stops the government from taking these much needed steps. Also, the lack-of-public-funds argument should not stand in the way, since the government can allocate meagre resources to start with, but at least it can put in place these new directions.

The layout of the budget itself has a lot to be asked for. There is long run-down of steps and allocations of projects that are highlighted in the budget speech in Parliament, presented by a minister of finance. This needs to be augmented with the introduction of a ‘budget policy statement’ delivered by the PM in Parliament, to make sense of it all. He should make his arguments in Parliament loud and clear, so that the people can receive much needed clarity on economic objectives and the path being taken to achieve them; and it is best if this path is based on wellness based policies. It is important that in addition to the allocations for the ehsaas (care or welfare) programme, the budget should augment this further in a broad-based way, for example addressing child poverty.

So rather than budget documents just giving a long list of tables indicating budgetary details of expenditures/allocations, there should be a narration to connect the dots to present the overall picture of the government’s way forward. This should indicate how the government plans to achieve the broader wellbeing objectives; for example, of the nature indicated above. This will also indicate how the successive budgets are linked over time, so that there is consistency of policy.

Overall, just like New Zealand, and on the lines of the ‘happiness over growth’ idea first floated by Bhutan in early 1970s and which introduced a Gross National Happiness Index in 2008, Pakistan should also evolve its budget into one that address wellbeing factors, for example, air quality, life expectancy, a sense of belonging among community and individuals؎ mainly by allocating resources and planning for designing inclusive institutions, among other steps in this regard– and education levels.

Hence, going forward, it should also make sense for the Pakistani Finance Ministry to establish some sort of technical aid programme with its New Zealand counterpart, so as to learn from its thought process and implementation strategies in formulating a wellbeing budget, which not just focuses on improving social and environmental aspects in a progressive way but rather brings in a new budgetary mindset to push for cooperation between ministries/departments, in turn allowing goals being met more efficiently at the back of this collaboration. Pakistan needs that economic consensus and unity of purpose. It is only then that the government can deliver on its promises right through from the federal to the provincial, and all the way to the local level.