Another package

The Rs120 billion subsidy package that Prime Minister Imran Khan announced on Wednesday is all music to our ears. In his address to the nation the PM appeared sanguine about mitigating the hardships of the people who have been hit hard by an ever-surging inflation. The subsidy programme promises to offer eligible families thirty percent discount rates for the next six months on some essential items such as ghee, pulses, and wheat flour. The claim by the PM that it is “the biggest welfare programme in Pakistan’s history” may have a grain of truth in it, if you assess it by the sheer numbers. The PM also asserted that the package would take the country towards becoming a welfare state. We have no reason to doubt the PM’s intentions, but there are factors that deserve some analysis and comments so that a more comprehensive picture emerges of the current situation.

While announcing the package the PM also alerted the nation about yet another petrol price hike. He reiterated his usual refrain about the “two big families” that according to him have taken ‘looted money’ from the country abroad. Per the PM, he would slash the prices of all food items if these ‘two families’ bring their ‘looted’ money back to Pakistan. One wonders what has prevented him and his team -- supported by NAB and myriad other bodies and departments -- from showing some results in the nearly 40 months they have been in power. The PM also sounded an alarm about the impending gas problem in the winter -- something we have been writing about extensively.

All in all, it all sounded strong in rhetoric but lacking in substance. It appears that the government has been collecting endless data on the financial status of families across the country. The revamped Ehsaas programme, which is a modification of the Benazir Income Support Programme (BISP), has been collecting and compiling information for the past couple of years. Apart from the data collection, the government has been focusing more on borrowing money from countries such as China, Saudi Arabia, and the UAE. Pakistan has been on the verge of defaulting since 2018 and there is no strategy in sight to enable the government to escape that fate. Announcing such packages is a good idea but if the country’s economy remains on shaky grounds such promises remain hollow.

We remember the Karachi package worth hundreds of billions of rupees that the PM announced but which failed to materialize. Then there was another huge package promised for South Punjab which was supposed to become a province per PTI’s election promise. Keeping in view the relatively mild onslaught of the covid-19 pandemic on Pakistan, and the help and relief it received from international donors, the country’s economy should have been in a much better position than it is now. In the final analysis, such packages are beneficial for the people but there is much more that the government needs to do. Doles and discounts are not the best ways to run a country’s economy. There is rampant inflation and unemployment in the country that the economy cannot rectify if the focus remains just on real estate business. Similarly, blaming the international market is not going to help the poor of this country. The people need a better deal in terms of lower inflation, affordable electricity and fuel prices, and more livelihood opportunities. Lastly, while making comparisons with Bangladesh and India one should also be talking about other indicators in which these countries have performed much better than Pakistan.