Why is it that every time there is a need for reform, especially the ones that are likely to be unpopular, the government insists that it is being forced down our throat by the international financial institutions (IFIs) - the IMF, World Bank and Asian Development Bank being the usual suspects.
Doesn't it show how little political capital the government has with the people it is supposed to be representing and through whose votes it has come to power? Doesn't it also demonstrate the weak bond of trust between the people and the government?
The key issue is simple: is a reform worth doing for Pakistan or not? Is it in the interest of the people of Pakistan or not? If it is, then shouldn't the government do it irrespective of who supports it or not, and should there not be an effort on the part of the government to explain the importance of the reform to the countrymen regardless of its natal pains.
If it is not in the interest of the country, shouldn't the sovereign government of the Islamic Republic of Pakistan resist the reform, irrespective, again, of who advocates or tries to ram it down our throats? Either way, if the government were sincere with the people, it would try to explain its position and try to take the people along. Disagreements will remain, but, at the very least, some people would understand the position of the government and what it believes is in the interest of the country.
Look at the issue of the 2 percent increase in electricity price every month that is supposed to happen and has been reported in the papers. The question is why is it necessary to raise tariffs when, given the levels of poverty and the overall state of the economy, it is going to hurt a lot of people significantly.
The government circles have said, as usual, that it is one of the conditions of the IFIs for their continued support. But the question is, it is good for us or not? Why are the IFIs saying this and why is the government agreeing to it?
If the government really thinks this is important, and the right thing to do, because otherwise the electricity sector will not remain viable, or because otherwise we cannot increase supply and get rid of loadshedding, it should make the relevant case and take the people into confidence.
By not making the effort, the government just increases the distrust levels that people have: that rather than following the right policies, the government officials and politicians are just in the game for making money for themselves and so on.
If the government seriously believed that we have to take these painful steps in the interest of the country, it could have not only tried to explain the same to the people, but could have also looked at alternate ways of achieving the results while minimising the load on the ordinary citizen.
Then, people would have had more trust in the final choice that the government would have come up with. Right now, most people feel, and rightly, that the government might just have taken the most convenient way forward while hurting the ordinary citizen the most.
Staying with the above example of increasing electricity revenue, the government could have stipulated that it is going to demand all distribution companies (Discos) to reduce their line losses, say by X percent per year.
It could have said that it was going to raise tariffs on domestic usage above a certain minimum (to allow baseline consumers reasonable priced access) by Y percent (to make the rich and/or users of air conditioners pay more).
It could have said that it was asking all government departments to clear electricity dues in a month. It could have said that it was imposing a ban on heater or air conditioner usage in all state-owned, managed, or operated buildings, other than hospitals, immediately. The state could have announced that if the people of the country are going to live with 4 hours of loadshedding a day, all government officials, including the governors, ministers, generals, the President and the Prime Minister would face 6 hours of loadshedding a day. The state could have announced that it was removing all subsidies, military included, on usage of electricity from government departments. But it did not do any of the above.
Not only did it not make a case for reform, it did not even show that it had taken the trouble of looking for alternatives that could have raised revenue while sparing the ordinary citizen and putting the burden on the currently privileged. Why should any citizen believe that the government is sincere in reform and/or is looking after their interest? And why should they take the announcement of increases without protest, and why should they not look for ways of avoiding payments? Are sacrifices only for ordinary citizens?
There is a possibility that the reason the government has not looked at alternatives that would have been 'fairer' or based on 'fairness' is not just government corruption and/or self-interest on the part of government functionaries, but sheer incompetence. But if that is the case, the situation is not even worse.
Now the government has announced the Reformed GST, as well as jacked up income tax, one time, for those who are in the tax net already. But the problem still remains the same. The arguments are again the same -, it is good for us and it is required by the IFIs. This government has been in power almost 3 years. What credible steps has it taken to increase the tax net? Has wealth tax, inheritance or gift tax - ways of taxing the rich - been brought back? What has been done to increase the net for income tax? Have any of the provinces done anything on agricultural tax?
And even more pertinently, have the top 'leadership', across political parties, bureaucracy, military leadership and business elite done anything to address the charge that they do not disclose their full incomes, continue to store and hide their wealth outside of Pakistan, continue to make money on the side, and continue to avoid the accountability processes in the country? How can an ordinary citizen have any confidence in these people, in their sincerity of intentions or in their competence?
It is ironic, though missed by the people who make the case, that ministers keep saying that the international community does not trust the Pakistan government and is using corruption and incompetence of the government as an 'excuse' for not contributing to the post-flood reconstruction costs.
But even the people of Pakistan do not have any trust in the government and its policies. How then can the outsiders? It is true that Pakistanis have to live with what the government forces down their throat in most cases, but that does not mean there is any trust or confidence. If that was the case, we would not be facing the situation we face today - where the government justifies everything as being forced from outside and is unable to give a plan of action of its own for any major policy area.
(The writer is an Associate Professor of Economics at LUMS (currently on leave) and a Senior Advisor at Open Society Foundation (OSF)
(fbari@sorosny.org)