Austerity yes but. . .



FACED with the daunting task of preventing an economic meltdown of the country, the Government is reported to be contemplating a number of austerity measures to overcome the financial crisis.

The National Austerity Committee (NAC), formed by Prime Minister Shehbaz Sharif, has suggested a cut in the salaries of government employees by 10 per cent across-the-board, reduce expenditure of ministries/divisions by 15 per cent, bring down the number of federal ministers, ministers of state, advisers from 78 to 30 only while the remaining should work on pro bono basis.

The committee considered slapping a ban on buying vehicles, freezing all perks and privileges locally and abroad and reducing the number of redundant posts in different ministries and divisions.

There are many ifs and buts about the final outcome of the concrete recommendations by the austerity committee, which are, no doubt, need of the hour because of the financial and economic problems the country is facing but their implementation has far-reaching political consequences for a Government, which stands destabilized by the hostile environment.

A reduction in expenditure seems to be the most appropriate strategy in the backdrop of continued pressure from the International Monetary Fund (IMF) as some of the demands being made by the Fund would add to the misery of the people, who are already weary of the non-stop inflationary trends.

However, addressing the launch of ‘PM Youth Loan Scheme for Business and Agriculture’ in Islamabad on Tuesday, the Prime Minister dropped a hint that the coalition government was ready to swallow the bitter pill of the IMF’s stringent conditions notwithstanding the political cost of such recourse.

The reluctance of the Government to accept more harsh conditions of the IMF led to uncertainty about revival of the programme with attendant consequences for the foreign exchange reserves of the country and inflow of foreign aid from multiple sources but now the Government is poised to accept some of the conditions in a bid to avert a default.

The remarks of the premier indicated that a decision has ultimately been taken to move forward on the issue for the sake of the country.

The decision reflects the Government is more concerned about the economic future of the country than its political capital which was already sacrificed by the ruling coalition.

However, the Government alone is not expected to take up the challenge effectively until and unless other pillars of the state also extend their sincere and whole-hearted cooperation in securing national interests.

Some of the steps being proposed to the Government are logical as there was absolutely no justification for having a large cabinet and continuation of undue perks and privileges of the elite.

With a few exceptions, members of the federal and provincial cabinets are resourceful people and they can definitely serve on a pro bono basis.

It is time the cabinet members should themselves announce to work on an honorary basis to send a right signal to the masses.

There is also no justification for some of the ministries at the federal level after devolution of powers in the wake of the 18th Constitutional Amendment.

Some recommendations were also made by Dr Ishrat Hussain but not implemented due to political considerations but it is time to jettison the undue burden.

Rationality demands the Government should demonstrate its commitment to do so before asking people to offer more sacrifices in view of the prevailing financial crisis.

A reduction in expenditure of the ministries and divisions (15% has been proposed) is possible if misuse of power and resources is effectively checked like free for all misuse of official vehicles and telephones besides abuse of medical facility and diversions of funds for purposes other than those envisaged in the budget.

The recommendation of the committee to reduce salaries by 15% is highly flawed as it doesn’t take into account the impact of the high inflation on families and their household budget.

In fact, the rising prices of almost all goods and services demand further compensation in the shape of an increase in salaries and pensions; otherwise we would be pushing millions more below the poverty line.

However, some of the ministries and departments are getting allowances and perks over and above the mainstream ministries and departments which can and should be discontinued forthwith as these have been a source of heart-burning among employees of non-privileged ministries and departments.

It is also known to all that senior government officials are receiving hefty car allowance but continue to misuse official vehicles.

This allowance must be abolished to save expenditure.