Dr Khalil's Intellectual Space

Pak Political Economy +

Dr Khalil's Intellectual Space

Pak Political Economy +

Miftah Ismail’s politics and economics

Note: A version of this article was published in The Friday Times.

Miftah Ismail’s Economics Far Cry From His Party’s Record

This is merely a cursory review/critique of politics and economics Miftah Ismail has lately been doing.

Miftah Ismail is expressing his differences with the PMLN top leadership openly and in a challenging manner, and as he was fired from the ministership of finance about four months ago unceremoniously, he is rightly in the news. (His defiance must be appreciated unconditionally.) On 15 January in two sessions of the ThinkFest in Lahore, his talk clearly represents his views.

In the first session, the question under discussion was: Are Politicians the Real Problem of Pakistan? He said, leave out the years there had been martial laws. Also, whenever politicians were in the government, they were not allowed to rule peacefully and there were Dharnas (large sit-ins) by Tahir-ul-Qadri, Imran Khan, and who orchestrate those Dharnas you know. Or, other devices were employed to destabilize their governments. That’s why politicians did not deliver in the manner they should have delivered.

His conclusion was: ‘It would be grossly wrong to only blame the politicians for where Pakistan is today. It would be unjust to only blame politicians for where Pakistan is today.’ For him, it was something settled. Though he admitted, ‘Pakistan is not working.’ He said, when MPs move among the people, their pockets are filled with job applications (naukrion ki parchian). He wanted local governments’ representatives to share the burden of these job applications. Sort of the thing, he said. As far as politicians’ corruption is concerned, he said, NAB exists only for the politicians and bureaucrats. Only they could be dishonest and corrupt? Seriously! Others couldn’t?

The topic of the second session he participated in was: Pakistan’s Political Economy: Is there a way forward. S. Akbar Zaidi from the IBA Karachi was in conversation with him. All the talk Miftah Ismail did there was but a repetition of what the state economists of Pakistan has long been uttering and writing without an end to it. That’s why it needs no detailing here. What’s the gist of the state economics are taxes and taxes! Miftah Ismail said, he wanted to tax the retail. There are 22 lac shopkeepers in Pakistan, and they pay Rs.30,000 in income tax. He wanted them to pay Rs.3000 per month, a paltry Rs.100 per day. But he was not allowed to do that. ‘If that’s a difficult reform, then the situation will remain the same,’ he said desperately.

He defended what economic measures he took during his short tenure as the finance minister. That is, his increases of petroleum prices, etc; his going to the IMF and restoring of its program. Etc.

First his politics. Given that there were martial laws, who collaborated with the martial law governments; who supported them; who joined them; who strengthened them; who cooperated with them in amending the constitution; who made the amendments brought in by them part of the constitution; who did not try them in a court of law for violating the constitution? The politicians and the political parties. None other.

That’s fine there were movements against the martial laws and martial law governments, but again that’s a fact that they were not forceful enough to shake the martial law regimes and were isolated and short-lived. Rarely politicians dared to challenge the military dictatorships. Nawaz Sharif did try. But such acts of him proved more of an adventurism and less of a strike backed by the power of the people. The fault lies in his complicit politics.

Re the NAB. Who instituted it? Miftah Ismail’s party (PMLN). Who formulated its rules, laws and procedures? Politicians. And who has the constitutional mandate and authority to make the judiciary, military, bureaucracy, etc, accountable? None else, but the politicians.

As for the issue of job applications, it is also one of the outcomes of the politics his own party and other parties, as well, have been doing, i.e., making people dependent on them for jobs, for so many things, for anything. And because the politicians killed all the merit. Had there been any traces of meritocracy remaining in Pakistan, people would never have gone to them asking for jobs?

And his economics. Quite like all the state economists Miftah Ismail has no other solution to a ‘Pakistan not working.’ Or the same solution all the state economists and state politicos propose. Go to the IMF. Borrow from friendly states and as well from the local banks. Print more and more currency. Levy new taxes. Raise rates of the taxes. Increase prices of petroleum products, electricity, gas, and raise various levies and taxes on them. That’s all they have in their tool-box: Extract more and more money from the pockets of the citizens. It is these things they call “difficult decisions” and Miftah Ismail takes pride in.

No state economist and state politico ever suggest to cutting the size of the government and spending by the government. Reduction in the number and rate of taxes. That’s not taught in their standard text books.

In the midst of the same economic crisis, created by the government/s, on the one hand, the government increased its spending by 15% in the budget, and on the other, shifted all the burden on the shoulders of the people. In short, it is always the same recipe they use. Transfer the failures of the state economy on to the civil economy.

Miftah Ismail wanted to tax the retailers. Why? Why should they pay a tax of Rs.3000 per mensem? (Aren’t they already paying a number of taxes?) For that matter, why should anyone pay any tax? Did Miftah Ismail ever think, there should be limit to the size of a bloating government and ever-increasing spending by it. Did he try to decrease the government spending? Did he try to reduce the size of the government? Why he didn’t? Is cutting the size of the government and spending by it not reform? Mind it that would be the greatest reform!

Also, it needs to be asked, and no state economist ever asks what’s there that the government is providing to the citizens in return for the taxes it collects from them. Security of life, property, dignity, and income? Justice, prompt justice? Law and order? Quality social services? Or the citizens are there only to pay for the Riyasati Ashrafiya (state aristocracy) to live off of their taxes?

Miftah Ismail and others ought to consider these things! Why does he and all other state economists and state politicos think and act unilaterally, only from their own point of view, i.e., Riyasati Ashrafiya’s (in fact, state’s) point of view? That’s the narrative of the Riyasati Ashrafiya. To them, only they exist; none other.

But that’s not the only narrative available in the town. The other narrative bases itself on the principle: The state exists for the citizens; citizens do not exist for the state. Dear Miftah Ismail, bring your politics and economics in consonance with this narrative.

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