Cracks surface in Pakistan’s government amid failing economy

New Delhi, June 12 (IANS) Cracks have started appearing in the edifice that is the hybrid plus regime running Pakistan these days, as per an article in the local media.

The hunger for revenues and foreign exchange is rising while the economy remains stuck in a low-growth phase. And now that hunger has reached the halls of politics and tested the coalition upon which the government’s majority in parliament stands, the article in the Dawn said.

The run-up to this budget now sees peak stability rubbing up against its political limits, and the delays in the holding of the National Economic Council meeting — critical to finalising the budget before it is tabled before parliament — show that the edifice is cracking under the strains of operating within its limits, it pointed out.

It also laments that Pakistan’s political class has never been so out of ideas to run the government as is the case at present. The article points out that even the ideas the political leadership is talking about are either not ideas or are recycled from the earliest days of Pakistan’s struggles to try to broaden the tax base. It cites the idea to reverse the NFC allocations, which is not an idea but a strong-arm tactic.

The resultant agreement between the federal government and two provinces, to pare back provincial development spending and return a larger share of the NFC transfers, is a stopgap measure to accommodate the demand for more resources coming from the military without setting into motion a politics that has always led towards confrontation.

Today, they are talking about fixed taxes for retailers, based on turnover, and clawing back some resources from the provinces, the article said. “One is among the oldest and most tried and failed ideas in our tax toolkit, and the other is some kind of an elaborate political settlement to distribute the growing expenditure burden of the federal government onto the provincial governments. Both efforts testify to failure. The budget, when it is tabled, will be little more than a ceremonial exercise,” it added.

–IANS

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