Economic reform

In the midst of groans and cries of the public, the government has raised the prices of petroleum products yet again. The raise between Rs 1.80 and Rs 9.32 per litre in prices of various products became effective yesterday. Given our heavy dependence on imported oil in all sectors of the economy, including agricultural and industrial production, electricity generation and transport, it is inevitable that a vast majority of citizens, who do not consume oil and its products directly, will feel the ripples of this hike in the form of rise in prices of all commodities. The already two-digit inflation is likely to gallop further. The burden on the citizens has increased so much that they are having to choose between food and health and education for their children. One can imagine the impact of falling purchasing power of the people on the overall economy. The investors are pulling their chestnuts out of the fire that is fast engulfing the markets and the production side of Pakistan’s economy. Despite its sincerity, the government has remained unsuccessful in stemming this rot whose ill effects are now becoming apparent.

Perhaps it was out of a sense of helplessness that the business community has taken the lead and presented a roadmap to political parties whose representatives gathered in Islamabad under the aegis of Pakistan Business Council (PBC). The purpose was to evolve a plan of economic recovery with the consensus of all the political parties so that it endures changes in government.The council identified five key areas for the revival of the economy: energy, regional trade, macroeconomic stability, social protection and education. At the top is the energy, whose irregular supply has almost pushed the industry to the precipice. In addition to creating a new ministry and a national energy authority, the government has been urged to take various short-, medium- and long-term measures to increase the country’s power generation capacity. The second most important area identified by the business community is regional trade. Unfortunately, political dispute with India over Kashmir has cost Pakistan dearly in terms of economic benefits it could have through trade and commerce with the next-door neighbour, which also has the potential to ultimately erode the pungency of arguments over Kashmir and bring the two nations closer. However, the military establishment, dominated by hawks, has long been resisted any such suggestion.

But the diminishing returns of that approach should compel the policy makers to give a serious thought to implementing the suggestion for normalising trade with India, including giving it the Most Favoured Nation status, on a war footing. The PBC also emphasised on the need to provide social protection to the poor. Another very important area of reform highlighted by the PBC was revamping of madrassa education and providing for teaching of technical skills to the students of madrassas to create a skilled workforce. Although terrorism and law and order situation did not form a separate rubric, this last suggestion encompasses one of the biggest problems Pakistan is facing today and which stands at the root of all other problems. The rise of extremism and intolerance in society is the unsavoury gift of the policy of promoting jihadis through a network of madrassas long pursued by Pakistan. What better way of neutralising this pernicious influence in society than to replace a retrogressive curriculum of religious teaching with training of technical skills? This will not only equip the students with the means to make a living for themselves but also rollback the legacy of Zia period. These are all very good suggestions. The ball is now in the court of the government, which must get down to implementing them. – Dailytimes