A seminar on the economy held at the National Defence University (NDU) on the day the National Assembly voted on this year’s budget has raised more questions than it answered.
There is no doubt that the dismal economic situation is deeply worrying and that there is a need for national debate on this issue. The Economic Survey has admitted steep downward spiralling of key economic indicators, ranging from ballooning debt to rising inflation estimated around 13 percent over next year to the falling value of the rupee.
Formalising the military’s role in economic decision making through the National Development Council, with the unprecedented inclusion of the army chief in it, is bound to have consequences for the thrust and direction of economic policies and development. The setting up of a commission to investigate debts by two civilian governments, but not the military government of General Musharraf, indicates this thrust and direction. All these issues call for a rational national debate across the political spectrum. But was the military’s debate on the economy rational or national?
No representatives of the accused civilian governments of the past decade were invited and participants of the seminar lost no time in pronouncing guilty verdict.
The conference discussed a new constitutional NFC formula and finding ways to meet federal financial obligations. All this was discussed without any representatives of the provinces being present. Why were they not invited? Is it because of their objections to the past practice of some federal institutions dipping their hands in the kitty and drawing as much as they wanted without any questions asked?
The seminar served as an exercise in shoring up support for the PTI government on the eve of the budget. A few days earlier, when Akhtar Mengal threatened to vote against the budget, he was wooed with the promise of relief to some disappeared Baloch citizens. Nearly 50 missing persons subsequently resurfaced also. It is no secret who was the helping hand in this situation.
Some opposition members also allowed themselves to be manipulated. Despite a firm decision taken by the combined opposition to reject the budget, its members were short by more than 20 on the voting day. Whether these abstaining opposition members were threatened or lured away, and by who, is hard to tell but the next day, reports said that 15 opposition MNAs met the PM and assured him of their support.
At the seminar, the army chief talked about the need for taking difficult economic decisions. But he shied from discussing a major economic decision, namely regional trade - particularly with neighbouring India and Afghanistan.
Regional trade may be a low-hanging fruit because of the geographical proximity, but there was deafening silence on opening new trading routes between Pakistan and Afghanistan and between Pakistan and India.
One of the chief proponents of regional trade is Dr Ishrat Hussain, a former governor of the State Bank and who is now an advisor to the prime minister. Although he is no longer so vocal, he also appeared missing from the discourse.
The participants were thus left no wiser on whether trading with India was really against the paramount interests of local consumers and producers. Nor on the Chinese model of separating political disputes from trade. Nor on the aborted efforts at regional trade made by the two previous civilian governments and why they failed.
An informed discussion may have revealed that there were mechanisms in the WTO to protect local consumers and producers. It would have also revealed that countervailing laws, national tariff laws, anti-dumping laws and duties were effective tools to ban certain imports hurting our producers, and that such tools have actually been employed by Turkey against Pakistan. But that perhaps was not the purpose of the seminar.
An informed debate on economy would have also revealed how linking trade with politics, starting with the war in 1965, gave leverage to the security establishment to oppose trade - a leverage it is still loath to give up. In 1995, India abolished the positive list and gave Pakistan MFN status but Pakistan did not reciprocate. Advocates of regional trade have maintained that thousands of new jobs will be created, regularising unofficial trade via Dubai will earn huge tax revenues and a liberalised visa regime reducing the costs of business will spur a process enhancing peace and security. But such inanities were not on the agenda of the conference.
A non-partisan intellectual discussion is needed to find out why the December 2012 cabinet decision to ultimately abolish the negative list in trading with India could not be implemented. We should also ask why a cabinet meeting scheduled in March 2014 to approve the MFN status for India was called off at the last minute.
The notion that Pakistan cannot compete while trading with India needs to be re-examined. If cheaper Chinese goods are already entering our markets, how does importing goods from India, which are neither better in quality nor cheaper than the Chinese goods, adversely impact Pakistan?
A debate on economic issues might have elicited other opinions on whether trade should be predicated on India first agreeing to resume composite dialogue. Or, on whether refusal to provide transit access to goods from Afghanistan to Indian markets served or undermined our interests in accessing Central Asian markets. Or, on penultimate consequences for Pakistan if Kabul diverted its trade through Chabahar port.
The seminar seemed intended to lend support to a faltering federal dispensation, not to find solutions to economic woes.
The writer is a former senator
There is no doubt that the dismal economic situation is deeply worrying and that there is a need for national debate on this issue. The Economic Survey has admitted steep downward spiralling of key economic indicators, ranging from ballooning debt to rising inflation estimated around 13 percent over next year to the falling value of the rupee.
Formalising the military’s role in economic decision making through the National Development Council, with the unprecedented inclusion of the army chief in it, is bound to have consequences for the thrust and direction of economic policies and development. The setting up of a commission to investigate debts by two civilian governments, but not the military government of General Musharraf, indicates this thrust and direction. All these issues call for a rational national debate across the political spectrum. But was the military’s debate on the economy rational or national?
No representatives of the accused civilian governments of the past decade were invited and participants of the seminar lost no time in pronouncing guilty verdict.
The conference discussed a new constitutional NFC formula and finding ways to meet federal financial obligations. All this was discussed without any representatives of the provinces being present. Why were they not invited? Is it because of their objections to the past practice of some federal institutions dipping their hands in the kitty and drawing as much as they wanted without any questions asked?
The seminar served as an exercise in shoring up support for the PTI government on the eve of the budget. A few days earlier, when Akhtar Mengal threatened to vote against the budget, he was wooed with the promise of relief to some disappeared Baloch citizens. Nearly 50 missing persons subsequently resurfaced also. It is no secret who was the helping hand in this situation.
Some opposition members also allowed themselves to be manipulated. Despite a firm decision taken by the combined opposition to reject the budget, its members were short by more than 20 on the voting day. Whether these abstaining opposition members were threatened or lured away, and by who, is hard to tell but the next day, reports said that 15 opposition MNAs met the PM and assured him of their support.
At the seminar, the army chief talked about the need for taking difficult economic decisions. But he shied from discussing a major economic decision, namely regional trade - particularly with neighbouring India and Afghanistan.
Regional trade may be a low-hanging fruit because of the geographical proximity, but there was deafening silence on opening new trading routes between Pakistan and Afghanistan and between Pakistan and India.
One of the chief proponents of regional trade is Dr Ishrat Hussain, a former governor of the State Bank and who is now an advisor to the prime minister. Although he is no longer so vocal, he also appeared missing from the discourse.
The participants were thus left no wiser on whether trading with India was really against the paramount interests of local consumers and producers. Nor on the Chinese model of separating political disputes from trade. Nor on the aborted efforts at regional trade made by the two previous civilian governments and why they failed.
An informed discussion may have revealed that there were mechanisms in the WTO to protect local consumers and producers. It would have also revealed that countervailing laws, national tariff laws, anti-dumping laws and duties were effective tools to ban certain imports hurting our producers, and that such tools have actually been employed by Turkey against Pakistan. But that perhaps was not the purpose of the seminar.
An informed debate on economy would have also revealed how linking trade with politics, starting with the war in 1965, gave leverage to the security establishment to oppose trade - a leverage it is still loath to give up. In 1995, India abolished the positive list and gave Pakistan MFN status but Pakistan did not reciprocate. Advocates of regional trade have maintained that thousands of new jobs will be created, regularising unofficial trade via Dubai will earn huge tax revenues and a liberalised visa regime reducing the costs of business will spur a process enhancing peace and security. But such inanities were not on the agenda of the conference.
A non-partisan intellectual discussion is needed to find out why the December 2012 cabinet decision to ultimately abolish the negative list in trading with India could not be implemented. We should also ask why a cabinet meeting scheduled in March 2014 to approve the MFN status for India was called off at the last minute.
The notion that Pakistan cannot compete while trading with India needs to be re-examined. If cheaper Chinese goods are already entering our markets, how does importing goods from India, which are neither better in quality nor cheaper than the Chinese goods, adversely impact Pakistan?
A debate on economic issues might have elicited other opinions on whether trade should be predicated on India first agreeing to resume composite dialogue. Or, on whether refusal to provide transit access to goods from Afghanistan to Indian markets served or undermined our interests in accessing Central Asian markets. Or, on penultimate consequences for Pakistan if Kabul diverted its trade through Chabahar port.
The seminar seemed intended to lend support to a faltering federal dispensation, not to find solutions to economic woes.
The writer is a former senator