Dr Hasnain Javed<\/p>\n
By now, we are well aware of the criticism that the IMF team has raised over budget 2023-24. The amnesty scheme, the unrealistic tax net to a growth target, that is far from reality, budget 2023-24 has all the wrong ingredients to ensure that the IMF tranche does not get approved in time. Therefore, as the name of this piece suggests, \u201cDar should listen to Esther.\u201d Here is why I think so.
\nThe targets quoted in the budget for FY 2023-24 are berserk. Let\u2019s look at the export target of 7.2 per cent, achievable or not, in my opinion, this number is far from reality and how it was calculated will remain a mystery. There are two reasons for this. Firstly, Pakistan has no export strategy, let alone any measures that would help us expand our export outreach. Secondly, the global recession is a reality, and as the global demand shrinks, it further increases the competition among exporting countries. Therefore, exporting items will go through stiff international scrutiny where \u201csurvival of the cheapest and highest in quality\u201d is strictly adhered to.
\nA 33-billion-dollar projection of remittances amidst mistrust by overseas Pakistanis and a continuous decline in the actual figures clearly shows this delusional mindset with which the budget was represented. Remittances have already nose-dived a staggering 12.8 per cent since July 2022 which means a decline of $3.68 billion during the fiscal year compared to the previous year\u2019s $28.48 billion inflows. The broad difference of 25 per cent in the grey market versus the interbank rate is ludicrous. The government must own up to its mistake that led to this huge difference that further promotes informal financial channels and over-regulated ones. Why would anyone let go of the opportunity to gain 25 per cent over the remit they send through informal financial channels? Perhaps the financial gurus forgot to factor in common sense. Honestly, the way this economy is being operated, I would rather open certain segments of the economy to the black market to attract growth and activity, but remittance would be far from it.
\nMoving on to the Benazir Income Support Program (BISP) which has been tremendous in enabling the poorest of the poor to survive. But doesn\u2019t that mean that with economic catalysts like BISP, only poverty will thrive, adding unnecessary burden on the cash-strapped economy? I am not saying that we should discontinue these efforts but why can\u2019t we design support programs that teach people to \u201ccatch fish.\u201d Cash disbursement initiatives were widely popular during COVID-19 and many countries relied upon them to ease the masses. However, according to a study published by the International Labour Organization (ILO) in 2021, welfare programs like Ehsaas and BISP fail to add \u201cnew poor\u201d to its pole since they are not inclusive, agile and shock responsive. One of the biggest hurdles mentioned in the execution of these programs is the need for investment in operations that will improve integration across the board nationwide and make disbursement transparent and fair. On the other hand, with a transparent and effective mechanism, lending bodies like the IMF or the World Bank see cash disbursement initiatives like these as an age-old popularity stunt to retain voters rather than true agents of change. So, what are we truly socially protecting is the voters\u2019 inability to vote against the system of dependency.
\nMr Dar accurately pointed out that Pakistan was the 24th largest economy in 2017 but declined to 47th place in 2022. My question is with a \u201cmissed opportunity\u201d as IMF coined the term, how is budget 2023-24 to improve any of that especially when the entire document is based on fiction and wishful thinking? Pakistan\u2019s efforts to gain access to the already-agreed-upon USD 6.5 billion loan package are mired in a quagmire, as the budget must satisfy the international lender for the cash-strapped nation to receive additional relief funds. The ninth review of the program is in limbo just weeks before its expiration, and the tenth review, which was initially part of the plan, is all but impossible.
\nPakistan\u2019s borrowing patterns, coupled with an unfavourable increase in gross government debt and its unwillingness to reduce spending on subsidized electricity, have dissuaded the IMF and its allies from providing new loans or restructuring existing ones. Moreover, successive governments in Pakistan have ignored the negative long-term effects of implementing subsidy programs and the budget deficits resulting from excessive government expenditure. The new budget brings all of this together once again in the face of now an inevitable financial crisis.
\nThe IMF objection called the budget 2023-24 \u201cnot progressive,\u201d and those who have witnessed Dar\u2019s previous way of working know all too well that you can\u2019t teach an old dog a new trick. Perhaps Dar should listen to Esther and devise a few quick fixes instead of relying upon his accountancy skills, as each day brings us closer to default.<\/p>\n","protected":false},"excerpt":{"rendered":"
Dr Hasnain Javed By now, we are well aware of the criticism that the IMF team has raised over budget 2023-24. The amnesty scheme, the unrealistic tax net to a growth target, that is far from reality, budget 2023-24 has all the wrong ingredients to ensure that the IMF tranche does not get approved in […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[1555],"class_list":{"0":"post-339611","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-article","7":"tag-dr-hasnain-javed"},"yoast_head":"\n