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‘Thorough surgery’ of economy required: economists

22 Nov, 2021
Pakistan's economy has been in crisis most of this year. Reuters
Pakistan's economy has been in crisis most of this year. Reuters

By Abdullah Mughal

LAHORE: Renowned economists at a session on “State of the Economy: Inequality in Income and Wealth in Pakistan” at the Asma Jahangir Conference 2021 on Sunday expressed that a thorough surgery of the economy is required to be done to pull the country out of current financial crisis besides making it ‘people serving’ instead of ‘elite serving’.

Opening up the debate, senior economist and former federal finance minister Dr Hafeez Pasha threw light on the (current) state of the economy and the inequality-related issues being faced by the people, especially women and children.

According to statistics, he said, the wealth distribution in the country was more distorted than ever; the top one percent elite has access to income of about 20 percent of the total population; one percent of feudal elites own 22 percent of farm income, mainly irrigated land.

Terming inequality a structural problem, Dr Pasha claimed that there had been no growth in per capita income in the last 15 years or so despite 7th NFC award.

Dr Kaiser Bengali, economist and director Engro Energy, said that nationalisation could help save the economy as it did back in the 70s, even though the country was breaking down. He said that corruption in military period was cumulative, but distributive in civilian.

According to Bengali, when we talk about civil and military, the inequality does exist amongst civilians but within military there is a huge gap between lower ranks and officers. Politicians may be corrupt but they still have to return something to the public, but the generals do not, he added. “(Developmental) figures shared in the Musharraf’s era were fraudulent and fudged.”

“In civilian eras, there was a better income distribution and people have had more access, he said, adding that since there is no infrastructure in Balochistan, there is also no other option.

The economic wizard also criticized the defence budget saying that there were problems regarding the expenditures, not the resources. “The rich must bear higher burdens, until the system is changed,” he said. Speaking about the International Monetary Fund’s Extended Fund Facility programme, Dr Bengali said the package would further burden the already inflation-hit people with taxes. He said the economy needs a thorough surgery to make it ‘people serving’ instead of ‘elite serving’.

He said that there are two parallel countries in Pakistan – one is for the poor while the other is for the elite. He also outlined the plights of the poor and how the elite have captured facilities with “effective lobbying”. Former provincial finance minister Dr Shahid Kardar said that Pakistan has become a ‘very difficult’ country to govern and the government was taking the situation lightly.

This article was first published in Business Recorder on Nov 22, 2021