Arab News
Muhammad Waqas
Contrary to general expectations, the 2016-17 Pakistan budget presentation turned out to be a non-event. It was perhaps the absence of currently ill Prime Minister Sharif or lack of visionary policies that made the mood within the Parliament rather dull and lethargic.
While the opposition parties showed apathy, there was little desk thumping even from the Treasury benches but lots of self-congratulations by Finance Minister Ishaq Dar. In their post-budget rhetoric, opposition dismissed the “anti-poor” budget as pure jugglery of words that would fail to meet the challenges of unemployment, tax revenue collection and reforms, foreign debt, and boosting the GDP. In many ways, they are right as hardly any proposals promise real change. As a rural economy, Pakistan remains heavily dependent on the performance of its agriculture sector that employs about 44 percent of he labor force and makes up about 21 percent of the GDP. Over a period of time, Pakistan has been struggling to remain competitive against cheaper, higher quality agricultural imports and failed to provide relief to the farmer community. Discouraged by losses and drop in productivity, the farmers have grown weary of cultivating traditional cash crops. This dangerous trend has threatened Pakistan’s food security and adversely impacted economic progress.
In its budgetary proposals, the government has wisely placed its focus on the revival of agriculture sector by announcing several incentives for farmers, reduction in the prices of key inputs and expansion of credit facilities. However, these superficial measures will only have a limited impact on making Pakistan’s agricultural sector globally competitive. Instead, the government should have allocated funds for agricultural research, value-creation ability and supply chain infrastructure to improve farmer output. While the government pompously shared healthy performance of the industrial sector, it skipped the mention of billions spent in different subsidies, cartelization and protectionist policies to support the manufacturing base. Sustainable progress of the economy is largely dependent on power sector reforms and development of the small-and medium-sized enterprises to generate employment. There has been little exciting news on both these fronts. To support these industries, Pakistan unfortunately lacks vocational centers and training centers to equip workforce with employable skills. The primary and secondary education system is already in shambles, and the situation is not likely to change in the future as allocations for education have been kept the same as outgoing fiscal year.
Like every year, Pakistan’s defense anxieties have continued and an increase of about 11 percent has been proposed for the next financial year. It is often argued that the government is forced to make high defense expenditures keeping in mind the country’s security challenges. There is no doubt that Pakistan has bravely confronted grave security threats over the past two decades and is now looking to consolidate the gains made in war against terrorism. What becomes questionable is the constant increase in defense budget as a percentage of GDP. As a matter of fact, the defense spending is projected to be higher than the country’s development budget. In view of the budgetary proposals, the Sharif government has lost another chance to make a real impact and undertake the much-promised reforms to strengthen the economy. It seems to have run out of ideas on how to fix Pakistan’s economic problems for the long-term and pass on the benefits of economic progress to the people.
