A people’s economic manifesto

As the general elections approach in around one-and-a-half month, focus is just starting to shift to bringing centre-stage economic manifestos of political parties.

A country which is facing high levels of inflation and policy rate, and low economic growth, not to mention acute debt distress, and increasing levels of poverty and income inequality, this delayed and lukewarm concern by political parties to present and disseminate their economic manifestos together with lack of focus of media to highlight this lackluster behaviour of political parties is quite reflective of the low level of political discourse, and overall political inclusiveness.

What do the voters want? What kind of economic manifesto do people at large expect from candidates vying to hold public office? For one, there are goals like low and stable inflation, especially checking ‘greedflation’, low cost of capital, meaningfully high, inclusive and green economic growth, greater economic certainty, low burden of indirect taxes, and subsidies that lower the cost of living for instance. Then, there are pathways in terms of philosophical underpinnings of attaining these goals, whereby there could be a choice between neoliberal, austerity-based policies, or social democratic, counter-cyclical/non-austerity-based policies, including more of the type of non-shock therapy, strategic price controls.

Most likely the majority of electorate thinks in terms of goals, while the philosophical part – with least knowledge expected in terms of terminology indicate above – is a secondary concern taken up in very broad terms in political discourse. It is important for people to know overall where the focus of a particular political party will be, that is, whether there will be more inclination on privatization, cutting subsidies, taxing the retail or the agriculture sector, investing more in fossil fuel or in renewable energy, increasing welfare benefits, or controlling inflation through governance and policy rate in a balanced way, or continuing with the otherwise underperforming way of relying too much on policy rate to control inflation.

That shows intellectual poverty, and perhaps lack of honesty, from political parties to not come prepared for the election race, and then for public office to sensitize to people the philosophical direction they will take in trying to attain the goals. Even more importantly, lack of clarity by political parties about which philosophical route to take – as quite evidently it appears by clinging on to neoliberal and austerity policies; for instance, by governments overall – and which to avoid given its misfiring in terms of reaching desired economic goals in a very sub-optimal way – and one which produced deep negative externalities, for instance, in terms of consequence for environment, income inequality, poverty, and even weakening the influence of demos on public policy. Perhaps, it is not even a question of lack of clarity, but intentional designing of policy to allow perpetuation of elite capture over political power, and economic capital.

How then should be the peoples’ economic manifesto be served, which requires detailed and timely dissemination of economic manifestos of political parties, and its wide dissemination? But, if the intention is to primarily optimize elite capture, and whatever room is left after that in policy domain, only that residue forms some sort of a hotchpotch set of targets centre-staged by political parties in vague terms – like providing a set number of housing, and employment, formation of network of roads and bridges, lessening taxes, increasing subsidies, providing quality education, among similar others – then economic manifesto of the people have very little chance of getting fulfilled.

Yet, economic manifestos in the tradition sense cannot be afforded as the country grapples with a severe climate change crisis, is highly debt distressed, has been having very high inflation and very low economic growth, and is still continuing with otherwise unjustified monetary and fiscal austerity policies – where austerity policies are aggregate demand squeeze policies, and hence different from efficiency enhancing public expenditure policies – which unnecessarily take away from spending on boosting domestic production and exports, and for making needed welfare spending.

What is needed is greater clarity provided by political parties through their economic manifestos. They need to clarify that how the country by continuing to follow neoliberal policies, the results will be any different than in the past. For instance, how following neoliberal, and austerity policies there will still be inclusive growth, that how by limiting the public sector – rather than right-sizing it – will public goods be provided by private sector that basically follows short-term price signals, and profit oriented mindset. That is, for instance, will private sector be interested in working in areas having low profit margins, given it is the responsibility of the state to have basic services like health, education, and public infrastructure, for example, provided at least profit margins, or even at subsidized rates? Moreover, how under massive involvement of the private sector, the rights of the demos in terms of rational pricing be ensured, given an overall weak regulatory environment for private sector in a developing country like Pakistan.

The political parties need to clearly indicate how continuing with the neoliberal policy of liberalizing foreign portfolio investment inflows will stability in terms of build-up of foreign exchange reserves be reached, and how for instance, under the neoliberal mindset central bank can continue to have over-board independence given inflation is at least equally a fiscal/governance-related phenomenon in developing countries, and therefore, requires a balanced say of government and central bank in controlling inflation. Having said, in case this is not achievable under neoliberal policy framework, political parties should reflect breadth and depth of acumen to have seen better achievement of these goals, for instance, through adopting social democratic policies, or adopting strategic price controls on the lines of ‘dual pricing’ as for instance done by China to control inflation, and create a more stable environment for sustainable economic growth prospects.

Even when terminology like Neoliberalism, or social democracy, or strategic price control is not used by political parties, their policies should identify clearly that their direction is not self-contradictory, and in turn becomes a zero-sum game for serving the economic manifesto of people. Such elite capture approach, or as the case may be intellectually weak approach in economic manifestos of political parties has no place in a world of polycrisis, especially the existential threats of climate change, and its close with causing the ‘Pandemicene’ phenomenon.

Copyright Business Recorder, 2023