It seems for every problem the Nawaz Sharif government faces there is an All-Parties Conference. After Karachi and terrorism were given the APC treatment, the prime minister has now invited the political parties to attend a summit on the state of the economy. This APC, unlike the previous two, will only be successful if the government uses it to discuss its own economic agenda and then listens to the dissent on offer. So far, the government has pursued a policy of steep hikes in the price of power and is readying a mass privatisation plan that will also lead to national assets being sold off as well as job losses that may run into the tens of thousands. It has done so without securing the agreement of the political parties, hoping to rely on its own parliamentary majority to ram it through. So far, the only authority the government has accepted over its economic agenda is that of the IMF. Both the power price hikes and privatisation were dictated by the IMF, although the business-friendly PML-N was happy to go along with both.
APCs usually turn out to be little more than public-relations exercises, conducted to show a unity across the political spectrum that doesn’t really exist. The government would be better advised to spend the time tightening our regulatory and taxation regimes and not giving big business a free ride. Private banks are running roughshod over the State Bank of Pakistan and the government, essentially banding together to buy treasury bills at a discount. The government is so in need of liquidity that it is forced to accept these unfavourable terms. Yet, instead of trying to raise more money from wealthy business owners by finally improving our pathetic tax collection efforts, the government is offering all kinds of taxation benefits to traders. At the same time, it is continuing to disproportionately target the poor and the middle class by increasing the power tariff and raising the general sales tax by two percentage points. If the proposed APC turns out to be just a rubber-stamp exercise in endorsing an economic agenda that is radical in its coddling of the rich at the expense of everyone else, then there will not be much in it to offer a ray of hope to the people. Pretending that the present policies reflect the opinion of the political spectrum would be doing a disfavour to the country.
Wednesday, October 16, 2013
Pakistan: Another APC?
It seems for every problem the Nawaz Sharif government faces there is an All-Parties Conference. After Karachi and terrorism were given the APC treatment, the prime minister has now invited the political parties to attend a summit on the state of the economy. This APC, unlike the previous two, will only be successful if the government uses it to discuss its own economic agenda and then listens to the dissent on offer. So far, the government has pursued a policy of steep hikes in the price of power and is readying a mass privatisation plan that will also lead to national assets being sold off as well as job losses that may run into the tens of thousands. It has done so without securing the agreement of the political parties, hoping to rely on its own parliamentary majority to ram it through. So far, the only authority the government has accepted over its economic agenda is that of the IMF. Both the power price hikes and privatisation were dictated by the IMF, although the business-friendly PML-N was happy to go along with both.
APCs usually turn out to be little more than public-relations exercises, conducted to show a unity across the political spectrum that doesn’t really exist. The government would be better advised to spend the time tightening our regulatory and taxation regimes and not giving big business a free ride. Private banks are running roughshod over the State Bank of Pakistan and the government, essentially banding together to buy treasury bills at a discount. The government is so in need of liquidity that it is forced to accept these unfavourable terms. Yet, instead of trying to raise more money from wealthy business owners by finally improving our pathetic tax collection efforts, the government is offering all kinds of taxation benefits to traders. At the same time, it is continuing to disproportionately target the poor and the middle class by increasing the power tariff and raising the general sales tax by two percentage points. If the proposed APC turns out to be just a rubber-stamp exercise in endorsing an economic agenda that is radical in its coddling of the rich at the expense of everyone else, then there will not be much in it to offer a ray of hope to the people. Pretending that the present policies reflect the opinion of the political spectrum would be doing a disfavour to the country.
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