Oppositional economics?

By S. Akbar Zaidi

Dawn, July 2, 2010

NOW that Nawaz Sharif and his party, the PML-N, have decided to play the role of a ‘genuine’ opposition to the incumbent government after having played the role of a rather docile and complicit opposition for two years, is one going to see a different perspective on the economy by this party?

Will the new stance taken by the party leader, who has criticized the government’s financial, legal and administrative policies, make a difference to economic development and progress in this country? The role played by the PML-N since 2008 in Islamabad, and in Punjab, suggests that it will not. Just like the PPP government in power, the PML-N is also responsible for many of the grave problems which continue to afflict the country’s economy and its people.

Nawaz Sharif made his critical remarks two days before the beginning of the new financial year beginning July 1, 2010. Having supported the two previous budgets of the PPP government, in June 2008 and 2009, the PML-N also supported and helped pass the budget for this financial year. What struck one as odd then, was Nawaz Sharif’s criticism coming just a couple of days before the budget was to come into effect with his party in parliament having already supported the government’s budget for 2010-11. Having supported three PPP budgets, Nawaz Sharif really has no business now to criticize the government’s economic or financial policies.

Nawaz Sharif’s party in parliament, has been as much a culprit in failing to address Pakistan’s economic problems, as have the MQM and the ANP. In fact, at times, some of the parties that are part of the coalition have been severe critics, but because they have also been active partners, they have conceded to the government’s requirements.

However, the PML-N has been in opposition and one would have accepted a far more active role in amending and influencing government policies, as well as in finding solutions to the problems which face the economy. The successes achieved at the unanimous passage of the 18th Amendment and the National Finance Commission Award, speak highly of the ability of the government and the opposition to unite and find a consensus on critical issues which affect all Pakistanis. Nevertheless, where alternative policies were required, the opposition should have played a far more active role.

The two points about the economy which Nawaz Sharif raised in his criticism of the government’s financial and economic policies, confirm the view that there is no real opposition in parliament today, and the party ostensibly in opposition, has no clear alternate economic roadmap.

Stating that the interest rate in Pakistan at around 16 or 17 per cent is too high and hampers investment, and that state-owned enterprises are conduits for corruption, is hardly criticism and, in fact, shows how out of touch with reality the leader of the PML-N has become. A high interest rate in times of high inflation is not of much consequence, given that the real rate of interest in Pakistan is probably only three to four per cent. Moreover, the finance minister in his budget speech had also said that he did not want to bail out state-owned enterprises, and Nawaz Sharif was merely repeating the government’s own policy.

Given the fact that the PML-N governs the Punjab province, and with greater fiscal decentralisation following the NFC Award and the 18th Amendment, one should have expected the provincial government to have undertaken a number of creative and novel measures to meet its goals when it announced its own budget, but this did not happen. With so much made of the agricultural income tax being a provincial subject, the richest and most fertile province, ruled not by the government in power in Islamabad, but apparently by the party of opposition, the PML-N could have put the other provinces and the federal government to shame by imposing a substantive tax on agricultural incomes, but it failed to do so. There is little which distinguishes the economic policy of the party in opposition from the parties in government.

Having been too much of a docile opposition for too long, perhaps it is a little too late to heap criticism on policies which the opposition has helped implement. Sadly, it seems clear, that even the PML-N has little to offer in terms of alternative strategies. And this, at a time, when the government’s economic policy is indeed, limited to merely following broad guidelines from the International Monetary Fund (IMF), and nothing else.

With the current IMF standby agreement coming to an end, and with the finance minister already having indicated that the government will go back to the IMF, resulting in further inflation, cuts in subsidies, the lowering of growth and rising unemployment and poverty, one wonders if this docile opposition will really transform itself into a genuine opposition and begin to offer genuine alternatives. ¦

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