PTI’s Economic Policy Plan

Mr Asad Umar spelling out PTI's Economic Policy

Friday 24 th August 2012, Pakistan Tehrik-e-Insaf announced its Economic Policy. At the seminar which was held in an Islamabad hotel, it was largely attended by dignitaries, civil society, media people, party supporters and concerned citizens. It is a matter of deep concern to people in Pakistan on how things have been going since the past almost five years of this democratic government. Many ills have occurred during this tenure, mostly lows rather than high indicators as far as Economics of the country are concerned. Mr. Jehangir Tareen started while Mr. Asad Umar steered the seminar where audience were thwarted with the current statistics of zero growth, spiraling fiscal deficits and record built up of debt in the country’s 65 year old history.

PTI came out with a unique way of informing the masses of their intended program for the coming years in which they will be in power. Previously we had seen political parties usually just concentrate on their electoral expenditure, their seats, once in assembly grasp in their portfolios, lastly, they would look into the problems of the state, PTI has done reverse of what was being done. A good encouraging move: By this party to let people think on whom they should entrust their future votes in the coming elections.For a common Pakistani to understand the figures, facts and numbers may be difficult. For this we first must identify where we stand today with what kind of problems. Secondly, Knowing the resources of the country, thirdly, having experts to resolve the situation and fourth the most vital, will, honesty, dedication and faith in God to resolve the problems. PTI’s testament that they will revamp the economy with a policy that is owned by policy makers and party hierarchy: A political economic vision committed to achieve its dynamic heights. Current Government’s lethargic approach towards collection of taxes, built up of debt, eroding value of PKR, negative balance of trade, economic bailing out by International politics related external capital flows (One such example is the prized institution Pakistan Steel against whom every six months Billions of dollars worth bail is asked for, where political gallows chums are appointed who are dishonest, illiterate, this bail money is distributed from top till bottom) and decades of underinvestment in Education/Health/Skills the demographic dividend turning into a liability.

A crumbling state with raised corruption graphs is now unable to meet the challenges of the modern era, weak institutions with Civil Servants and politicians deeply suspicious of each other. The country’s economic decline accelerated sharply under the status quo Government which has in these almost five years been the weakest in GDP growth of only 3%,  a record deficit of 8.4% (PKR 1,720 Billion) according to the State Bank of Pakistan the worst by far in the history of this country. Investment collapsed to only 12.5% in FY12 from 22.5% in FY07. Sub-Saharan Africa today is at 60% of growth, which is much faster than Pakistan. Every fiscal year that ends here takes India six years ahead of us. Nigeria, Rwanda, Liberia now have higher literacy rate than Pakistan. In the same 5 year period India, Srilanka, and Bangladesh have had an average GDP growth 7.8%, 6.1% and 6.8% respectively. Investment to GDP ratio 35%, 28% and 25% for India, Srilanka and Bangladesh. India’s per capita growth rate of 6% will double its per capita income in 12 years whereas Pakistan’s 1% per capita growth rate will take an average Pakistani 70 years to double their income. Today, PKR stands weaker than the Bangladesh Taka. 

A child born in Pakistan has less chance of survival than in countries like; Ethiopia, Sudan, Zimbabwe, India and Bangladesh. According to the World Bank, only 55% of Pakistani’s above 15 years of age can read or write their names (the highest who score here are Vietnam, Turkey, Zimbabwe and Kenya). Government itself has been eating up the reserves with the provincial governments also following the suit which stand at PKR 35 Arab over draft by the State Bank of Pakistan. The country is fast becoming “The Poor man of Asia.”One should ask oneself; what could be the aim in life of Mr. Zardari or Mr. Nawaz Shareef? Words engraved in my mind are those of Mr. Abdul Hafeez Peerzada who (in the past was blue-eyed boy of late Mr. Bhutto whom he fondly used to refer to him in Punjabi as “Sohna Munda”: Handsome Guy) at a talk show on a private channel commented on the former as, “Zardari has the animal instinct to survive.” People who don’t understand this quote of Peerzada sb should watch a program on Nat-Geo. Poor masses of Pakistan at large and Punjab in particular count their days earnings or Taka’s on their fingertips whereas Shareef family count their mills and flats in Europe on their fingertips; their aim in life is to keep on increasing the numbers of family investments (to become the richest men on Earth) over the cost of the future of Pakistani youngsters.

Asad Umar, senior vice president of PTI while giving an insight into the current situation of Pakistan, said that the country's solution is not administrative, it is political. He added that the cost of economic failure in Pakistan is of human life. He reiterated that all is still not lost, that they have the vision and faith of bringing Pakistan back on the developing front & for that, deep institutionalized reforms would be done on five fronts:
1).Institution Reform Emergency;
Ministry of Railway will be abolished, it will only work independent, fully autonomous and without Government interference. This will bring the Railway back on track in 12 months time.  PIA will be removed from the control of Ministry of Defense. Strategic Government Institution to manage SOE’s much similar to Malaysia’s Khazanah which will be a fully autonomous board, with mandate to revitalize in two years & CEO’s will be appointed by boards and not the PM.
Declare Reform Emergency as frontal attack on;
OGRA, SECP, CCP,NAPRA will be strengthened and empowered against Cartels, Speculators, Hoarders and Gas/Electricity thieves. Protect land & property owners from exploitation of real estate mafia & Qabza groups. Eliminate culture of specific SRO’s.
Accountability Emergency;
An independent, empowered accountability mechanism will be adopted so that NAB does its own investigation and prosecution outside the purview of the Executive. It will take up all mega scandals of previous and present where teams of motivated honest empowered investigators to grapple mega scandals and bring justice. Special task force will be formulated to recover looted national wealth which is kept safe off shore. The recovered corruption assets will be used to educate the youth of this country.
Governance Reform Emergency;
Implement Civil Service reforms with result based management. Encourage functional specialization; monetize all Civil Service benefits/perks.
Give incentives to high performing CS’s, enable professionals to work for the Govt.

Stressing the need for a local government system in Pakistan current governance in the country is very centralized and weak. "Imran Khan, as the prime minister, will devolve all powers from his hands down to the grass-root, village level to decentralize power," he added.  A few other points for governance reforms include implementation of civil service reforms and direct funding for every district to ensure equal distribution of funds to districts and villages. 

2). Expenditure Reform Emergency;
All Governor houses, PM House, and all those buildings that give pomp & show will be shut down and will be for public use only. Expense of the President house will be cut by half. Punjab CM today has 6 Camp houses those would be reduced to one. Federal Ministries will be reduced from 37 today to 17. Limit perks of MNA’s, MPA’s, Military and Civil Bureaucrats, finish policy of free and subsidized plots. All State Institutions will have to reduce their expenditure and that includes Defense as well. Zero development funds to Parliamentarians and eliminate all discretionary funds.
3). Energy Reform Emergency;
To make Pakistan an energy secure state Circular Debt would be resolved through moving to lower cost of production. Divert all resources to maximizing Energy Production. Bring Load Shedding or power cuts urgently to manageable proportions. Initiate PTI medium term Energy Plan: To reduce cost of generation & line losses etc in which provinces will play their part in resolving the energy situation. Electricity and Gas shortages will be eliminated within the first term of PTI’s Government.
4). Revenue Collection Emergency;
Federal Board would be made autonomous, so that there is no political influence on it. This will eliminate the pressure of lucrative postings in FBR. The tax policy of Government will be independently implemented by the FBR. Advance technology will be introduced so that there is increase of transparency to tackle any leakages. Citizens will be empowered to join the fight against corruption by empowering them the access to information (Independent estimates reveal that around 900 billion PKR escapes the tax net every year). To raise revenue by ensuring tax collection without raising tax rates. Minimum Assets tax will be adjustable against Income tax. All income in the land will be taxable which will include; Agriculture, Real Estate, Stock Market, etc. Soft Amnesty on tax will be ended. The taxes will be reduced and an abbreviation of tax burden on the citizens & business will be visible once the Reform Measures kick in. In this regard each Provincial Government will play a pivotal role in the collection of the following; there will be an end to Benami transactions, the state will take over under-declared property. Agriculture Taxes from Large landowners and GST on services. Tax evaders will be given time to mend their ways and declare correctly or otherwise a force of law would be applied on them.
5). Human Capital Development (Health/Education/Skill);
Health care is vital for the poor of Pakistan, for that PTI will increase spending from 0.86% of GDP to 2.6% in five years. Provide the masses Primary Health Care (PHC) which will give a boost to the rural health centers, focus on Mother/Child care, all DHQ/THQ Units will be modernized, all RHC’s, BHU’s will be revitalized with staff/nurses and medicines. New jobs in Health care for Nurses, Doctors (with special focus on Eye and Dental Doctors), Paramedics, LHW’s, LHV’s will be created.
Education Reforms;
One Education system will be followed all over Pakistan with increase in its spending from 2% of GDP to 5% of GDP in five years. Community will be empowered to help manage schools; Decentralize Service Delivery to District, all hiring will be done within the district. Double the number of girls schools, special program to modernize and upgrade Govt Colleges. Sports and extra Curricular activities will be specially emphasized so that development of potentials in youth is possible.
Skill Development;
Leverage private/public/NGO’s for mega skill development program which will target 2 million youth in skill development centers at the end of Year 2. It will remove barriers to poor students for entry, provide stipends to poor/deserving students, students who deserve shall be funded while schools will NOT be funded, and special focus will be on the employable skills & placement service to match student requirements in jobs, focus on social service delivery providers and develop manpower skills for exports. Give a boost to the export strategy, fix flawed energy policy, give confidence to overseas Pakistani’s to invest home. Non-resident bonds to be floated & to ensure legal protection of overseas Pakistani’s investment.


As the above reforms will be adopted, the following results will be evident:
There will be an increase spending on poor and middle income households. Government budget for the welfare state in FY14 TO FY18 would be; 5% GDP increase in tax to GDP, 2% reduction of GDP in wasteful expenditure, 2% improvement by elimination of PSE’s losses, with a fiscal space of 9% of GDP there will be 5.5% of GDP increase in Education, Health & Income support spending and 3.5% reduction of fiscal deficit.Until the jaw dropping scandals of the status quo lot emerge to the world, Pakistani’s have ample time to analyze, ponder and seriously consider whether they want a change or not. Their decision will either bring prosperity or more downfalls. They need to cerebrate; they must understand problems which have been pinpointed by the Economic Policy of PTI. Any simple Pakistani who is not an economist can empathize this; one day Pakistan will be on the road to success, serving and nurturing this nation like Shaukat Khanum and Namal University are already doing.
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