ARCHIVES 2013:The Budget is an annual drama , full of sound and fury but signifying nothing . Mahfooz ur Rahman

The Budget is an annual drama , full of sound and fury but signifying nothing .

Mahfooz ur Rahman

Islamabad: June 12, 2013  

bretton-woods

 

The Federal Government will announce the budget for 2013-14 this evening. Ishaq Dar, the Finance Minister, will be intoning and juggling figures, incomprehensible to the country’s 180 million deaf and dumb creatures. I laugh heartily at the  regular comments of the super rich that the budget is the ‘poor peoples’ budget . The  common people are not concerned because they have become stoics . They mostly live in villages under oppressive conditions without regular employment opportunities and without education , health care ,  potable drinking water  and without electricity. The Government is not be trusted .

 

In the USA , the budget is discussed for an entire year i.e after its presentation by the President to the next year’s President’s speech . But then USA is the USA while Pakistan is Pakistan . Our Financial Year is July-June . From the 13th ,the budget will be discussed for a fortnight only  upto the 25th.With the majority of members on the Government side , the discussions will be an eyewash only.

 

The only time when the country was not bored stiff  by the high flown language of the budget was when Dr. Mahbub ul Haq was the Finance Minister  in the mid eighties . He skipped over all the rubbish : the rhetoric before the actual budget relating to taxes and duties . He did not blame the previous governments of all wrongdoings under the sun. But he laid  great emphasis on  investment in the people viz. education and health which are taboo for the successive governments before and after him . He went to discuss the changes in taxes and duties . His budget speech was over in less than an hour .

 

Since the creation of the country , the common people whose miseries  are bemoaned by every political worth his salt . While their condition is becoming worse with each passing day, successive governments blame the previous governments or the vagaries of the weather , the poverty line has reached  45 -50 % of the country’s population . The Government is levying taxes more than the capacity of the people to pay under the dictates of the donor agencies .  The GNPs , the GDPs and the Per Capita Incomes are but poor indicators of a nation’s prosperity . The Government’s figures indicate the Per Capita Income is  $ 1380 .  Yet it is not visible on the people faces . The successive governments pride on the number of cars assembled locally and owned by Pakistanis , the number of motor cycles , the number of refrigerators , deep freezers or air conditioners assembled locally   . It never shows the number of children without education and health facilities , the number who are without potable drinking water . The Government figures indicate the number of houses in the country or by cities . They never indicate where they are located in posh localities or in slums .

 

Prosperity and happiness  are written on the faces of the people whereas the Pakistanis  are glum and depressed . Countless people do not know where the next meal is going to come from .  Education and health care is becoming expensive day by day . Even children in Montessoris attend tuition centres whose fees are around Rs 4000/- per month .All this tantamount to the ‘Education Genocide’.    School drop outs are routine : the people inability to pay the expenditure related to education.

 

The fault lies with the interest based economic system. The experts have been trained in educational centres modeled in the West : by modeled by Bretten Woods financial Institutions — the World Bank, the IMF  which are interest based. 

 

Pakistan started borrowing from the World Bank and the International Monetary Fund in 1950 on their terms instead of  the Government exploiting the country’s resources . The Bank’s interest rates  are based on  commercial banks rates prevailing New York .

 

During the military regime of General Musharraf , the Prime Minister and Finance Minister , Shaukat Aziz , liberalized the imports of non essential items . Loans and credit , both foreign and domestic banks (  the latter to the influential few ), were easily available .  Thus the elite lived beyond the country’s means . However , in the  Civil Government  that followed, the donors tightened their purse string in view of the adverse reputation of that Government . Resultantly , it went for bank borrowings and deficit financing both of them were injurious to the country’s financial health . During the past five years , the total , both domestic and external , ballooned to unimaginable proportions . One could visualize  the grim face of Ghulam Ishaq Khan , one of Pakistan’s most stern finance managers .

 

Three recent statements made by prominent people merit attention  :-

 

  1. The new Prime Minister , Mian Nawaz Sharif , has been quoted by the country’s media that every Pakistan , even a new born babe , is under a debt of Rs70,000/ .
  1. The Finance Minister has quoted the total debt at Rs 14 Trillion  . Others quote a higher figure because there is a huge trust deficit between the Government and the people . This figure can be debated . He also indicated that the Government is prepared to go to the IMF  for obtaining a financial bail out.
  1. One of the country’s most eminent  Economists, Dr. Ashfaque H. Khan , has also advised it in his article ( published in yesterday’s ‘The News’ ) ‘Time to go to the IMF’ for a bail out package.  

 

  1. Pakistan is in danger of a debt trap or a meltdown : each more vicious than the other.

 

In the Capitalist system , most countries were in danger of a meltdown . They are  borrowing  from wealthy countries like Germany and France . The USA has to repay the Chinese loan of  $ 16 Trillion . The country’s debt is equal i.e $ 16 Trillion .    

 

Men and women both from the developed world and third countries are working for longer hours or they are working in two or three  jobs a day to enable them to live in comfort but they are not happy . Leisure , like everything ,can be had but at a price . The question that arises in one’s mind “what at cost “ . The world has seen the failure of the Capitalist System . This is the modern version of ‘Slave Trade’.

 

Before the advent of the banking system , interest based income , the paper currency , the floating exchange rate , devaluation or revaluation , recession , stagflation ,the basket of currencies ,  people and nations traded either through barter or metals the most favoured ones were gold and silver . That is Islam advocates : the abolition of interest , the abolition of exploitation , the abolition of the Capitalist System and the abolition of paper currency . Allow the people to be happy and not in ‘human bondage ‘.

 

Muslim Government and Muslim scholars must do their homework   and establish a framework as an alternative economic system based on the Islamic teachings  .

 

To be continued…………

The writer is not a world famous Economist’ 

Mahfooz ur Rahman

Islamabad: June 12 , 2013   

 

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