EDITORIAL: World Economic Forum (WEF) an annual event in Davos, Switzerland, where world leaders in government, business, civil society and science gather to exchange views on key issues facing the global economy held a virtual moot in January 2022 unsurprisingly titled how the world will look post-Covd-19. Klaus Schwabe commented that “we must continue to fight against the global pandemic, we must revitalize the global economy and accelerate its transition to net zero.”
Chinese President, Xi Jinping, urged that “countries around the world should uphold true multilateralism. We should remove barriers, not erect walls,” and Modi of India stated that the question that arises “is whether multilateral organisations are able to address the new world order and new challenges.”
In the context of these global issues/questions raised at the WEF annual meeting, Pakistan’s Finance Minister, Shaukat Tarin, tweeted that Mishal Pakistan, a country partner of Institute of New Economic and Societies Platform and WEF, endorsed economic progress in Pakistan as the country has shown “global leadership in initiating programmes for poverty alleviation, universal health delivery services, improving human capital and curbing corruption.”
While this report has not yet been uploaded on the WEF website, yet, one must appreciate the efforts of the PTI administration to provide for the poor and the vulnerable through the Ehsaas programme, which is not yet on paper as that would require an act of parliament and therefore it remains subsumed in the Benazir Income Support Programme (BISP), the universal health care system across the country except in province of Sindh, which rivals the National Health Service in the UK perennially strapped for government injections, and attempts to curb corruption, though evidence of improving human capital remains secondary to dealing with the continuing fall out of Covid-19.
Analysts point out that BISP has been allocated 260 billion rupees in the current year against 110 billion rupees disbursed in 2017-18 (out of a total current expenditure allocation of 7.5 trillion rupees against the 4.3 trillion rupees in 2017-18), universal health delivery services are greatly appreciated though one would hope that the government undertakes an actuarial study this year as recommended by the German development agency to ensure it remains financially viable, and while Transparency International has downgraded Pakistan below 16 countries down the line, yet one must appreciate the government’s insistence on not abandoning this objective even though political pressures are mounting.
The Mishal report maintains that National Accountability Bureau “under the present management, has taken various steps in curbing corruption which has started yielding results. Due to NAB’s (National Accountability Bureau’s) effective communication strategy people are now more aware about the ill effects of corruption and corrupt practices,” though Business Recorder would willingly give this credit to Prime Minister Imran Khan for ensuring a rising public awareness of the ill effects of corruption.
However, while one can appreciate the government’s achievements in this regard wholeheartedly and attribute this policy thrust to the Prime Minister’s overarching objective; however, one would hope that the Prime Minister and his Finance Minister begin to focus on the inordinate rise in borrowing that made this expenditure possible.
Domestic debt according to government data has risen from 16.5 trillion rupees in 2018 to over 27 trillion rupees today — a rise of over 75 percent while foreign debt has risen from 95.5 billion dollars in 2018 to over 130 billion dollars today — a rise of 36 percent in three years out of which 10 billion dollars has been used for budget support — money that fuelled inflation and, explicably from an economic perspective, money that would partly be used to subsidise the rise in prices of three items notably sugar, wheat and cooking oil, through the issuance of yet to be launched ration cards. Among the three causes of inflation, namely: Demand/Pull, Cost–Push and Monetary, the latter is the most difficult to tackle and get out of. Unfortunately, however, by increasing the money supply to fund these schemes through borrowing without a corresponding increase in GDP growth; this is exactly what we are doing.
Copyright Business Recorder, 2022
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