Spurring growth

THE budget for the next fiscal year is rightly changing gear and going from stabilisation to growth. The situation inherited by the government in 2013 was veering towards a large-scale crisis, although the latter was not exactly imminent at the time and the state of affairs was nowhere near as dire as the one that the previous PPP government inherited in 2008. Nevertheless, macroeconomic stability has indeed been restored, and with reserves at a record high, inflation falling, signs of a revival in industrial activity under way and the fiscal deficit coming down year after year, the government is right to claim that the macroeconomic fundamentals have been brought under control. For now anyway.

Now comes the hard part. Achieving macroeconomic stability on the back of an IMF programme is usually achieved by most countries in a couple of years. Transiting to growth is then a relatively simpler job because it means a return to a fiscal policy aimed at boosting industry through a combination of incentives and reforms. In Pakistan’s case, that transition is complicated by a number of factors. First is the growing role of informal-sector activities, evidenced in the centre of gravity of the present growth in areas such as construction and services. Second is the rigid base of our industrial sector, dominated by textiles and other low-tech products that are less responsive to government inducements than other industries. And third is the prospect of the return of political instability.

The growing informality in the economy can be seen in the government’s failed attempts to broaden the base of taxation and bring sectors such as retail and wholesale trade into the net. More than 80pc of the new money created in the current fiscal year has stayed in circulation as cash, rather than entering the banking system, showing the clout wielded by unregistered players and their resistance to government efforts at formalisation. Transiting towards growth in the face of large-scale and growing informality can be difficult if the inducements given to economic players have a way of landing up in informal activities such as property speculation. The government is aware of this, which is why it has introduced taxation measures to try and capture some of the transactions taking place in the booming property market and construction sector. But it is highly probable that the measures could backfire, like last year’s bank transaction tax, and lead to people understating the value of property transactions even further. These must shift though, and informality must be tamed. The right objective has been set for this year in the budget. But given the weak measures with which to pursue it, as well as the presence of a volatile opposition, the government will have to walk a tightrope to keep to its path — and walk it firmly.

RIP Muhammad Ali

IT is impossible to define the legacy of Muhammad Ali — ‘The Greatest’ — in a few lines. He was an athlete par excellence and a fine human being who transcended the status afforded by the boxing ring to be known the world over as a symbol of resistance. His style of play was reflective of a man who wanted to stand his ground, applying aggression only as a last resort. He was no dry disapprover imprisoning himself in a cocoon away from the world he had problems with. He loved life and knew that, with a spirited fight, it could be drastically improved. He loved the fun, the jokes, the poetry including the verses he came up with about boxing legend and his chief rival Joe Frazier. Muhammad Ali had a natural understanding of how to exploit the popular sentiment to achieve the goal he set himself. He was an icon whose example was cited to pursue all kinds of challenges. Not least amongst the latter was a drive aimed at deriding boxing as a non-sport by citing how Ali suffered from Parkinson’s — because of the barrage of punches he faced during a long career shaped after the famous fight with Sony Liston in the 1960s.

The greatest of entertainers usually got his deals right, except maybe for the bout with Antonio Inoki in June 1976. This very forgettable, unabashedly forced attempt at fusion had the Japanese wrestler ‘facing’ Muhammad Ali lying down, literally, for the entire duration of the contest. It was clear that time was finally approaching the man who teased his opponents with his ‘catch me if you can’ chant. One of the most glittering careers inside the ropes was heading towards a close. This was a sign of the changing world, and though Muhammad Ali continued to influence causes for the next 40 years of his life, he had already made a great impact. The 15 years from 1960 to 1975 belonged to him. He emerged as a champion of the less heard with his powerful dissent against the American war on Vietnam. It was not just what he said but the down-to-earth manner in which he said it which endeared him to those pursuing civil liberties. And even when he could not speak as frequently in the latter years because of his illness, his nod was most sought after to give movement and sting to any campaign he chose to support.

Violence against nurses

THERE are numerous recent examples of the police using brute force to stifle legitimate protest. Lady health workers, teachers, blind people, etc have all suffered violence of this kind. This time, the courts added another dimension to the disproportionate force meted out by the state against ordinary citizens. On Thursday in Peshawar, police beat up dozens of protesting nurses gathered in front of the Khyber Pakhtunkhwa Assembly to demand improvement in their working conditions. They also took into custody around 20 male and two female nurses. While the women were soon released, the men were detained overnight after which a local court ordered that they be sent to jail on judicial remand for 14 days. While they were subsequently released on bail, the FIR filed against them lists rather exaggerated charges — including, among others, criminal intimidation, rioting and the misuse of loudspeakers.

When a state comes down so hard on peaceful protesters, it betrays its contempt for a means of democratic expression provided for in a system that is supposed to be of the people, by the people and for the people. The charges are also farcical: speaking against the government is part and parcel of a democracy, whether on loudspeaker or otherwise. And shouting slogans or causing a traffic jam does not constitute a riot. Moreover, when seen in the context of the kid-glove treatment reserved for religious extremists and self-appointed keepers of the nation’s morality who on numerous occasions have rampaged through the streets virtually unimpeded, this wanton aggression smacks of a state in retreat. The law should be applied to regulate the actions of citizens, rather than brandished as a weapon to silence weaker segments of society or else held in abeyance when it comes to those perceived as being powerful for various reasons. Admittedly, the provincial government had already announced some concessions for the nursing sector, but it should continue talking to the protesters so as to arrive at an equitable solution.

Source: Editorials
Published in Dawn, June 5th, 2016