Budget: Hafeez Sheikh on trial
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Salahuddin Haider
Thursday, May 31, 2012 - FINANCE Minister Hafeez Sheikh has to prove his worth now. The budget he is going to present, probably at the of the week, will be a test for his acumen, both as a politician and as an economist. Hints about relief to people have been coming, more from the prime minister, but with lesser emphasis from Hafiz himself. That can only go to prove that the prime minister and President Asif Zardari both have eyes on elections, just at a hand’s distance. But preparing the budget is the finance minister’s responsibility.
The problem with him is that he too is foreign trained, with world bank and IMF strategies in mind. Both these have been tried for long—since the days late Mohammad Shoaib, down to Shaukat Aziz, and now Hafiz too has fallen in the same line. The world bank and IMF philosophies have’nt worked. Nowhere in the world. They have spelled doom of the country, relying on these western institutions. Pakisatn is no exception. Reliance on imported economic rules, do not work in third world or developing countries.
They must be good for highly developed economies, but in Pakistan, or some Asian and Afr can States, they just helped spill the beans. The finance minister has been to America for talks with the two leading institutions, headquartered there, but whether he has come back with assurances to base his fiscal proposals for the next year, has not been explained. A general impression is that, the finance minister may have received some frail assurances, and began to work on showing his balance sheet to the nation.
Enough has been written in these coloumns that budget reflects the socio-economic aspirations of the nation. It is not an banker’s balance sheet, where earnings and expenditures are given at the end. The country needs a very heavy dose of subsidies to bring back prices of essential commodities, wheat flour, rice, pulses, sugar, tea, salt, spices, cooking oil, bread, all these are fundamentally important for human beings. But subsidies could only be possible if the rulers tighten their belts, and be the role model for their people. Lavish lifestyle, which has been the hall mark of this country, somehow, has led to deprivation and inflationary pressures on market forces.
Money is to be provided and in huge amount to energy sector. Billions of rupees are to be allocated to clear the or atleast narrow down the circular debt liabilities. Unless that is done, private sector power plants, wont be able to contribute their share to the all important field of power generation. The gap in electricity is already widening—over 6000 megawatts now. In Punjab and KPK, as also in Balochistan, its impact on the population is has been beyond description.
Common man’s life has not been affected alone. Industrial sector too has suffered immeasurably. Production has gone below the level, recovery from where will be nothing short of miracle. Health and education sectors too need heavy allocations. The answer lies in reducing the spending. Any attempt to blow it up would mean damages to production and manufacturing sectors, which will be beyond control at a later stage.
The government must cut down its spending drastically. Domestic savings needed to be given incentives to mobilize resources to fund smaller projects. Mere lips which has been the order of the day, will not do any good now. Country has reached critical level of economic slide down. Serious and sincere efforts are needed to help salvage the situation. The MQM has submitted its shadow budget, demanding cutting down sales tax from 16 to 12 percent, and pruning down defence budget by 10 percent. Theirs is a realistic submission, coming to the government well in time to benefit from these suggestions.
The Military must also contribute to national demands of ensuring broader funding for social sectors. Then the government must allow the slashing down of its expenditures drastically to look for the welfare of the common man who votes for them to power. He is suffering and find little courage to raise its voice. He has to be taken care of now. No need for the prime minister to travel to foreign countries in special aircraft and big delegations. The Singapore prime minister,
Lee Kuan yew used commercial airlines to travel from Singapore to New Zealand for the Commonwealth summit, when Benazir as prime minister, sent the then president Farooq Leghari for the moot. He squandered nation’s hard earned money like his own withdrawals from the personal account. Such instances must now be avoided. Times are difficult now, and need to unpopular decisions. Populist measures will not be of any help. Interest rates also needs to be brought down, from the present 12.5 percent which is extremely high by any standard. The world today is working on 3 or 4/5 percent interest rates. How could our factory owners or producers of industrial goods, can compete with the world, with the rapidly emerging new economic powers.
They need to sell goods, and for that they need incentive. If that is done, domestic investors, looking to shift capital to foreign countries, will be re-attracted towards his own country, and this would also help attract foreign investment. The cabinet meeting on the day the budget is due, probably on June2, should give a new guideline to the finance minister. Otherwise, those sent to power through the power of the votes, will have to face music.
It is in their own interest to find quick and effective solutions for the multitude of problems, this country forcibly plunged into, and for no rhyme or reason. The argument that inflation is worldwide, and oil prices, had roughed up the economies of the world, does not hold ground. Turkey, India, and Thailand, have shown tremendous progress. Neither of them are oil producing states. Yet they managed to overcome their problems.
Why cant Pakistan.No point in hiding behind lame excuses email: salluhaider@gmail,com
The problem with him is that he too is foreign trained, with world bank and IMF strategies in mind. Both these have been tried for long—since the days late Mohammad Shoaib, down to Shaukat Aziz, and now Hafiz too has fallen in the same line. The world bank and IMF philosophies have’nt worked. Nowhere in the world. They have spelled doom of the country, relying on these western institutions. Pakisatn is no exception. Reliance on imported economic rules, do not work in third world or developing countries.
They must be good for highly developed economies, but in Pakistan, or some Asian and Afr can States, they just helped spill the beans. The finance minister has been to America for talks with the two leading institutions, headquartered there, but whether he has come back with assurances to base his fiscal proposals for the next year, has not been explained. A general impression is that, the finance minister may have received some frail assurances, and began to work on showing his balance sheet to the nation.
Enough has been written in these coloumns that budget reflects the socio-economic aspirations of the nation. It is not an banker’s balance sheet, where earnings and expenditures are given at the end. The country needs a very heavy dose of subsidies to bring back prices of essential commodities, wheat flour, rice, pulses, sugar, tea, salt, spices, cooking oil, bread, all these are fundamentally important for human beings. But subsidies could only be possible if the rulers tighten their belts, and be the role model for their people. Lavish lifestyle, which has been the hall mark of this country, somehow, has led to deprivation and inflationary pressures on market forces.
Money is to be provided and in huge amount to energy sector. Billions of rupees are to be allocated to clear the or atleast narrow down the circular debt liabilities. Unless that is done, private sector power plants, wont be able to contribute their share to the all important field of power generation. The gap in electricity is already widening—over 6000 megawatts now. In Punjab and KPK, as also in Balochistan, its impact on the population is has been beyond description.
Common man’s life has not been affected alone. Industrial sector too has suffered immeasurably. Production has gone below the level, recovery from where will be nothing short of miracle. Health and education sectors too need heavy allocations. The answer lies in reducing the spending. Any attempt to blow it up would mean damages to production and manufacturing sectors, which will be beyond control at a later stage.
The government must cut down its spending drastically. Domestic savings needed to be given incentives to mobilize resources to fund smaller projects. Mere lips which has been the order of the day, will not do any good now. Country has reached critical level of economic slide down. Serious and sincere efforts are needed to help salvage the situation. The MQM has submitted its shadow budget, demanding cutting down sales tax from 16 to 12 percent, and pruning down defence budget by 10 percent. Theirs is a realistic submission, coming to the government well in time to benefit from these suggestions.
The Military must also contribute to national demands of ensuring broader funding for social sectors. Then the government must allow the slashing down of its expenditures drastically to look for the welfare of the common man who votes for them to power. He is suffering and find little courage to raise its voice. He has to be taken care of now. No need for the prime minister to travel to foreign countries in special aircraft and big delegations. The Singapore prime minister,
Lee Kuan yew used commercial airlines to travel from Singapore to New Zealand for the Commonwealth summit, when Benazir as prime minister, sent the then president Farooq Leghari for the moot. He squandered nation’s hard earned money like his own withdrawals from the personal account. Such instances must now be avoided. Times are difficult now, and need to unpopular decisions. Populist measures will not be of any help. Interest rates also needs to be brought down, from the present 12.5 percent which is extremely high by any standard. The world today is working on 3 or 4/5 percent interest rates. How could our factory owners or producers of industrial goods, can compete with the world, with the rapidly emerging new economic powers.
They need to sell goods, and for that they need incentive. If that is done, domestic investors, looking to shift capital to foreign countries, will be re-attracted towards his own country, and this would also help attract foreign investment. The cabinet meeting on the day the budget is due, probably on June2, should give a new guideline to the finance minister. Otherwise, those sent to power through the power of the votes, will have to face music.
It is in their own interest to find quick and effective solutions for the multitude of problems, this country forcibly plunged into, and for no rhyme or reason. The argument that inflation is worldwide, and oil prices, had roughed up the economies of the world, does not hold ground. Turkey, India, and Thailand, have shown tremendous progress. Neither of them are oil producing states. Yet they managed to overcome their problems.
Why cant Pakistan.No point in hiding behind lame excuses email: salluhaider@gmail,com
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