Monday, November 22, 2010

Pakistan, a borrowed economy; heading to economic failure

Pakistan, a borrowed economy; heading to economic failure

Pakistan Development Fund having dilated upon the economy of the country finds it well satisfied including the Prime Minister Gilani as if the rescue would penetrate deep in to the national economy and pace would be accelerated. It is not true.

As an economist I believe that the borrowed economies never click. Indigenous resosurces have to be mobilised first and stimulant efforts are needed to be injected in micro as well as macro scenario. Nothing of that kind has been done by the present team of economic managers. In fact there is no team only the players of their own directions. The Honourable Finance Minister Dr. Hafeez having his limitation believes strongly that all sectors of economy have to play a role in receiving benefits and paying their dues in time. The discrimination is there in our economy and that too the landlord and feudal having sizeable influence in legislation, political and governance affairs could be seen that they even opposed the Produce Index Unit system for levy of tax on agriculture income. The PIU based system could not work and proved to be rhetoric.

The subsequent governments too found them limited to have such a step like the question of Kalabagh Dam or Tax on Agriculture. The two are more related to political equation than merit. This philosphy has a taxing implication and Pakistan continues suffering at the hands of those counterfeited and bogus degree holders who never wanted to run Pakistan on economic merits. How long the US and friendly countries would continue lending support. IMF and the international lending agencies have their own agenda and they follow strictly a prescription for all uniformed economies. Pakistan is no exception to this. With an average growth rate at over 6 per cent per annum the gross domestic product has witnessed a very low pace and this may not even exceed 2.5 to 3 per cent. These are alarming signals and economy has reached to a total bankruptcy.

As the economy is tending to move to an international bracket of HIPC (heavily indebted poor countries) Pakistan will have to suffer more in the days to come. Mere a one-time flood tax or a socalled reormed general sales tax lacking direction. One could see that the overall macro economy has no proper direction and this lack of a proper policy and direction would lead to deep crisis-ridden proposition. Pakistan is being led to a corner where any forthcoming government even after the general elections could not give a kick start. The deadhorse is being made to run having no proper intake. The recent floods and post catastrophe conditions have proven that the government demands a waiver of 50 billion dollar from the international community as well as addition to aid from US and allies to "war on terror". The combination of economic tools too have failed to alleviate poverty. The extreme poverty is gradually accelerated to critical poverty while the minimum poverty level have seen the question of food insecurity. Who would be held responsible with this high inflationary trend where three-time a day food is not easily available. This insecurity has forced society to have any kind of corruption at lowest level as they know well that the highest offices of Paksitan, ministries and powerful bureaucrats and military officials are found involved in corruption. The examples could be inumerable the bottom-line conclusion is that the discriminatory policies have never worked for any economy and this time too Pakistan is passing through extreme economic pressures, most of them are built up by the government and the parliamentarians who have miserably failed to even devise a good governance commission of the parliament.

An estimated expenditure is stated to be Rs.140 billion per annum on war against terror, however one has a limitation in proper estimates as the premier of Pakistan on record asserted that the floods had caused a loss of 40 billion dollar while the ADB and WB estimates are roughly around ten billion. Pakistan has to prepare a proper financial and economic inference and that too with the help and assistance of international economists and public finance experts. Only the computation and imaginery figures do not work and are rather counter productive.

An indifferent attitude towards national issues and an incompetence has a price that the nation is paying off. The tendency would not continue any more and the toll would have to be taken in course of time. Saviours of pakistan, the parliamentarians allegedly involved in most of the cases having all corrupt practices are destined to their benefits, perks and priveleges at the cost of poor who is not secured from hunger. The food insecurity, hunger and lawlessness are known indicators to be declared a failed state. However one could find the only potent sector, the armed forces of Pakistan, which are a deterrance to such a declartion.

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