In a few days Shaukat Aziz will be called upon to cut the cake to celebrate his elevation to the lofty position of Prime Minister of Pakistan. But as he goes through these rituals he must remember that there is another cake which he must cut, and cut it as judiciously and as honestly as he can, the cake of National Wealth.
It is an unfortunate fact of our history that the betterment of the poor has never been an important, let alone the centrepiece of government policy.
Poverty has been AN issue, never THE issue. Elimination of poverty was not point No 1 of the 7-point agenda of President Musharraf in November 1999. The focus of economic planning has always been the enlargement of national wealth.
The rich and powerful have been saying to the poor, "you wait for now, let us first make the size of the 'cake' larger and then we will think of cutting a bigger slice for you." And that time has not come. Is it that it never will? That is the question before Shaukat Aziz.
On an election tour of Tharparkar, he saw the question writ large on the faces of the poor. Reading it rightly, he said that he saw a "ray of hope on their faces."
This ray of hope epitomises the sentiments of all the poor people of Pakistan that a day will soon dawn when "a bigger slice," will be given to them. Unless the present policies are reversed the ray will only remain a ray. It will not break into sunshine.
Pursued and haunted by the ever-growing spectre of poverty, the top-brass is following an ostrich-like policy, by refusing to face or tackle the reality.
The GINI CO-EFFICIENT, a measure of inequality, has been rising in Pakistan.
The trends are so hard to hide that the government in the Economic Survey 2003-04, decided to omit the chapter on income distribution completely and talked about it only cursorily.
It did not want to give the continuing bad news to the people. Similarly the development expenditure reduced from 7.5 % of GDP in 1991-92 to a low 2.2 % of GDP in 2002-03.
The cutback in development expenditure hurt the poor who depend on State-provided services on health education, social welfare and other services. The share of the richest 20 % of the country in the national wealth increased from 44 % in 1988 to 48 % in 2000.
Correspondingly, the share of the poorest 20 % of the population came down from 9 % in 1988 to 7 % in 2000. But to gloss over these harsh and unpalatable realities, those in power, are putting forth the thesis that there has been a 4 % reduction in poverty.
Pakistan Integrated Household Survey conducted by the Federal Bureau of Statistics, which sampled 14536 households, showed a 3% rise in poverty during 1999-2002.
The government did not accept the results and carried out a household survey on sample of 5046 households to support its stand of 4% reduction in poverty. Social Policy and Development Centre is an NGO headed by Kaiser Bengali who is a reputed and respectable economist.
He has called the government's methodology as "questionable and spurious and the results clearly questionable".
Such garbled versions are nothing but a travesty of truth and will satisfy no one. Rather these are making the credibility of the government reports very suspect.
Poverty does not exist by itself as an independent phenomenon. It is a creation of deliberate acts of the powers that be. The cause is the policies of the government and the effect is the poverty of the masses.
Just a few days ago, President Musharraf has formally announced in a policy directive that projects and programmes for reducing poverty must be formulated and implemented.
Credit must be given to him for being the first ruler of Pakistan for at least initiating a call for focused poverty specific programmes.
This Policy Initiative will and should strengthen the hands of Aziz for countering the vested interests who would not want that appreciable resources should be allocated to such projects.
Aziz should have a lot of sympathy for the poor. He is brave and candid to admit that he comes from a middle-class background. Given an opportunity he has risen to dizzying heights of success.
He is known to be a multi-million dollar man, and it is for this reason that he does not draw any salary as Finance Minister. His own case is the best illustration of the principle that when the not-so-privileged are given an opportunity, they can open the floodgates of wealth and do wonders.
Aziz has worked abroad for more than two decades, and he knows more than anyone else, that the leaders of private sector companies are not paragons of virtue, rather the opposite.
Were it not so, the Western countries would not have been affected by successive and recurring waves of corporate scandals. It is the moral bankruptcy, which has led to financial bankruptcies.
In our own country the scandals of defaulted loans and write-offs have been well known for decades.
There is a need, a dire need, for changing the basic presumption, of financial trust-worthiness. It is the poor who are more trust-worthy than the rich. Grameen Bank of Bangladesh was based on this premise, and it proved to be a resounding success. Now they are considering of setting up a Beggars Bank!
Ghulam Mohammad, Chaudhry Mohammad Ali and Ghulam Ishaque Khan, were three bureaucrats, who assumed political power. All three had a background of Finance. Neither did anything so good which has left an indelible mark on the consciousness and psyche of the nation.
In fact, it can be asserted without fear of contradiction, that no leader has done anything for the betterment of the poor, for which he can claim an abiding place in the history of Pakistan.
What about Zulfiqar Ali Bhutto? He gave nothing but slogans. He gave neither 'roti' (other than the failed Roti Corporation) nor 'kapra' nor 'makan'.
Not too long ago Pakistan had Foreign Exchange Reserves for hardly 3 or 4 weeks of imports. Today the Reserves are more than $12 billion, enough for a year's imports.
Pakistan has reduced its Foreign Debt by $2 billion. For the first time Pakistan has 'prepaid' a loan of about $1 billion taken from Asian Development Bank.
For the first time more than Rs 200 billion has been provided in an annual Budget 2004-05 for the Public Sector Development Programme (PSDP). For the first time all the crucial socio-economic factors have come together to create a propitious environment for the initiation of a visible change. What is needed is a catalyst. Will Aziz choose to be it? Without doubt, he stands at the crossroads. He has the option to be a suave member of the team. Flow with the tide, as did his predecessors and have a good time as a Prime Minister?
Or he can be circumspectly assertive, knowing his strength in finance, and the great need and demand for his expertise, at this crucial juncture of our national life, and be an agent of change.
If he chooses the latter path, he can carve out a niche for himself both in the history of Pakistan as well as the hearts of its people.
In order to cut a bigger slice of National Wealth for the poor Aziz must retain the Finance Ministry. He knows finance and the ministry like the back of his hand. He has dealt with it for four years.
There will be no learning process or learning time. Handing it over to another person, no matter how competent or honest will seriously jeopardise the achievement of the goal.
Direct control of finance is the most effective way of ensuring that resources are spent according to his blueprint. As far as the political problems are concerned, most of these in the given scenario will be solved for him and he is not likely to be called upon to exert enormously in this field.
At one time President Musharraf was handling three or four posts. Aziz should easily be able to handle two.
Figures released by the government are perceived by all, including independent economists, to be false. It is considered that the government 'cooks up' the figures to present a rosy picture of the economy and the condition of the people. Whereas the Bureau of Statistics came up with the conclusion that poverty had increased by 3 % between 1999 and 2003, the government is saying that it has decreased by 4 %.
Even the International Agencies have gone public about the falsity of official figures. President Musharraf took serious note of this allegation of "fudging of figures" and gave instructions that this must stop.
Former Finance Ministers Shahid Javed Burki and Dr Hafeez Pasha are credited with taking certain measures to stop the rot.
They tried to make the Bureau of Statistics, autonomous like its counterparts in the West. Over the years this initiative has fallen apart and the Bureau is now in shambles. It has done no worthwhile work for the past many years.
No crucial survey has been undertaken. This is mainly due to the amalgamation of the Bureau in the Ministry of Finance as an attached department, where a second secretary controls the postings and transfers.
The officers can take no independent decisions. Proof of the relegation of this institution to a position of absolute impotence is provided by the fact that ever since the retirement of Dr Noor Mohammad Larik 18 months ago no replacement of Director-General has been made so far.
There are reports that major manufacturing units are not providing vital production statistics to the Bureau. Planning and Budget-making cannot be done without correct information about the size of the GDP.
It is hoped that Aziz will take some drastic and concrete measures to beef up the crumbling credibility of the figures of the government. In this regard, there is need to make the Bureau independent and autonomous and provide it with the most modern, state of the art technology to do its work.
Instead of the CBR and Police the international agencies should be asked to provide funds for reforming and modernising the Bureau.
These funds will give immediate and fruitful benefits to the society. Furthermore, the Bureau should be tasked to carry out specific surveys of various crucial aspects of poverty, and prepare reports and suggestions to alleviate poverty.
According to the well-known economist Kaiser Bengali the minimum development expenditure for a country like Pakistan should be at least 5 % of GDP, which works out to Rs 250 billion, as against Rs 202 billion allocated this year.
In 1991 there was 7% of GDP which declined to 2.2 % in 2002-03. In this perspective there is need to increase the amount.
Apart from the quantum, the biggest problem of PSDP has been its low utilisation. For the first ten months of the year ending June 2004, only an amount of Rs 60 billion was utilised or 53.2 percent of the allocation, even lower than 58 percent fund utilisation during the same period of 2002-03.
The National Assembly was told that an amount of Rs 92 billion was expected to have been spent during the last two months. The figures speak for themselves. The inordinate amounts are shown to have been spent in the last two months. They are not actually spent.
This has been the historical pattern. One reason for the non-utilisation of the money for PSDP has been the slow and delayed release of funds. Consequently, the work on such projects starts very late.
Another reason has been the casual supervision of the progress. This used to be done once a year ie after six months of the budget.
Only last year Aziz decided that this review should be done after every three months. Also, he decided that teams of the Planning Commission would be assigned to specific projects which would visit these projects and submit reports to ECNEC. It was also decided that funds of projects making slow progress would be transferred to the fast moving ones.
These steps were in the right direction but no news regarding their implementation are being reported in the press. It is a known fact that the Asian Development Bank discontinued or reduced its aid to many projects because of low or improper use.
Aziz must give his best attention to the infrastructure of the organisations responsible for utilisation of PSDP funds.
It is an open secret that allocations for the civil administration are far too excessive than the actual needs. And proof of this is found in the mad rush to the A.A.G.'s office to get the bills passed till the last moment of the last month, June, to ensure that funds do not lapse.
Aziz should take good care of this phenomenon and divert such wasteful utilisation of funds by civil authorities on luxuries to PSDP.
The least that he must do is to ensure the sustainability of PSDP at more than Rs 200 billion level in the succeeding 3 years of his tenure as Prime Minister. There should not be any reduction in the allocation as in the past.
Soon after the announcement of the Budget in June this year, Hamayun Akhter in his Trade Policy speech categorically stated that Rs 2 billion out of PSDP would be spent on export-related infrastructure.
This is despite the fact that enormous amounts are available with the Export Promotion Bureau under the head Export Development Fund.
This only proves that the rich do not want substantial amounts to be spent on development. If any money was desperately required it should have been obtained by applying a cut on civil administrative expenditure.
Aziz should stop this chipping away of the scarce PSDP funds. If this is allowed to happen others will follow thereby confirming the deep-seated suspicions, that the only sector whose requirements can be sacrificed is the development sector.
Perhaps, never in the history of Pakistan the Development Expenditure has been fully and properly utilised. It is hoped Aziz will earn the rare distinction of scoring the first in this regard.
It is important to point out that PSDP funds are not spent directly on the poor. It helps them indirectly by creating income-generating activities, which hardly if at all, yield day to day income to survive.
They are not in a position to improve their sanitary conditions. It is for this reason that the social sores, the pockmarks of poverty, like garbage, polluted water etc are increasing.
It is hoped that in compliance to President Musharraf's directive allocation from PSDP or the Zakat Fund would be made to improve the environment of the poor.
In this regard, two issues are being identified, which it is felt are of great urgency, and it is possible to make a visible beginning to improve them. These are garbage disposal, and replacement of leaking water pipes. During the monsoon season these problems become more pronounced and cause untold suffering to the poor in the shape of preventable diseases of the stomach which result in numerous deaths.
In the recent weeks many deaths have been reported from Hyderabad, Sargodha, Lahore etc due to drinking polluted sewerage water. Despite its extensive coverage in the electronic media the government has remained absolutely unmoved.
Similarly, the growing garbage dumping areas are becoming breeding grounds of the most serious diseases. About three or four decades ago Germany pioneered the manufacture of plants to burn garbage, also called Solid Waste Management plants and from this process generated electricity.
Though the issue has been much talked and written about the government has taken no initiative to install these plants. Does sanitation not squarely fall within the ambit of government duties?
It was a highly disgusting experience for this scribe to attend a meeting in LCCI in which a lady Minister was trying to explain the feasibility of such a venture to traders and inviting them to undertake this project.
Are the government's functions limited to maintenance of law and order only? These functions are important for the continuation of government's rule more than the safety of the people.
While the people are sinking in the quagmire of filth and disease the government is busy giving prizes worth crores to the sportsmen. Policemen who die while performing their duties are given a few thousand.
The government is rich to give the prizes, the government is poor to save the dying This tantamount to promoting the selfish, self-centered, streak of capitalism, at the cost of caring for the poor.
Recently, government's Zarai Tarraqiati Bank has announced a reduction in the rate of interest for farmers of "calamity hit areas". The government is satisfied that these farmers were afflicted by a calamity and yet it does not think that they deserve a write-off of their loans?
Those whose loans have been written off by the banks must be much worse off than these "calamity hit" persons isn't it?
Another such calamity is perhaps in the offing. The weather experts are making predictions of severe water shortage all over country. For the coming Rabi crop drought-like conditions may develop.
Given our geography, such calamities are periodic happenings. A Sinking Fund of very substantial amount should be set up.
Similarly a Rapid Deployment Force should be raised which should be fully equipped to meet any eventuality.
The SME Bank, the Khushali Bank, and the Zarai Tarraqiati Bank have been putatively set up for the underdog, but their sizes are too small in relation to the needs.
These institutions need time, attention, and money, to be able to play an effective role in the society. And as luck would have it, it is Shaukat Aziz's home ground.
Being in a much smaller position Shaukat Tareen turned around Habib Bank into a profit making institution. To change the complexion and size of these banks is not a difficult task for Shaukat Aziz, provided he wishes to do so.
At his inauguration ceremonies Shaukat Aziz should remember the other CAKE. The poor are waiting.
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