THE ‘100-day programme’ announced last week was seen by the business community as a social gesture of the Gilani government that did exactly what it was intended to achieve: sustain the public goodwill for the new government.

The announcement on the floor of the Parliament by the PM regarding wheat procurement price, minimum wage, employment package, low cost housing scheme, electricity generation and water management might not be music to all ears but was hailed generally as being people’s friendly. The decision to increase wheat procurement price by Rs115 was considered apt as it eased somewhat anxiety in the wheat-growing belt.

The gap between the international market and the domestic wheat procurement price is still too wide and the price difference may not be enough to curb hoarding and smuggling completely. It will, however, allow some benefit of higher international prices to trickle down to domestic wheat growers. The government would be required to exercise strict vigilance and administrative controls to keep market manipulators from cashing on the price differential.

The increase in the minimum wage-- fixed at Rs6,000--was termed by labour and experts as a step in the right direction. They, however, considered it much less than what is required to sustain a family of a typical unskilled worker at current prices. The real inflation feared to be double the official rate has eroded the buying power of the currency like never before. Even at the level of a dollar a day for a family of five, the income needs to be $150 or Rs9,450 a month. The minimum wage announced is less than two- thirds of dollar-a-day rate.

By announcing water, electricity, housing and employment plans the government has expressed its wish to provide a decent living to the people and an enabling environment for development of agriculture and industry. How it intends to achieve that would only be clear when details of these programmes are laid out before the public.

At this point of time when both agriculture and industry are underperforming, depressing the economic growth by over one per cent and fiscal trade and current account deficits eat up fiscal space, prospects of making much headway on these fronts look difficult.

Tanvir Sheikh, President Federation of Pakistan Chamber of Commerce and Industry, termed the programme a good starting point. He told Dawn that investment in infrastructure (electricity and water) were absolutely necessary as the last government failed in projecting the increasing needs of an expanding economy that led to creation of energy bottleneck, compounding the problems for citizens and the economy.

“Privately, the leaders of the last government accepted their failure on this count”, Mr Tanvir said. He expressed his fears about the decision to encourage trade unions had disappointed employers. Going by past practices, it would lead to production and productivity losses.

He said that the business community was looking forward to a meeting promised by the PM with leaders of the corporate sector to inform the country’s new leadership of the problems the industry is faced with, leading to contraction in industrial and export growth.

Zubyr Soomro, ex-president Overseas Chamber of Commerce and Industry, felt it would not be appropriate to comment on the efficacy of the policy direction on the basis of promises made in the inaugural speech by the elected prime minister. He would like to wait for the complete economic programme that he expected would be unfurled in next few months.

“It would not be fair to draw conclusions on the basis of a few initial gestures. The new government announced some decisions out of political compulsions. Let them come up with their programme to deal with deficits, etc. and then one can form an opinion on the direction in which the elected coalition government wishes to take the country”.

Mr Majyd Aziz, a senior business leader of Karachi, found the PM speech populist. The announcement regarding the minimum wage increase was made unilaterally without taking the minimum wage board into confidence. The move could actually prove to be counter productive, as businessmen, trying to cope with increasing cost of doing business, would shed all petty workers to keep the wage bill in check, he added.

“Any increase in wages of unskilled manpower would build pressure on management to increase the wages of semi-skilled and skilled workers also by the same percentage which in the current difficult phase for the industry, could render the whole operation uneconomical”, he said.

“The wages need to be linked with productivity which is on the lower side as two people have to be employed in place of one elsewhere for the same work”, he said and informed that employment in the textile sector was already dropping for a variety of reasons. Many analysts say that neither the government nor the private sector has done enough to improve trade skills of the workers and enhance their productivity and efficiency.

He agreed that Rs6,000 is too meagre an amount to support a family, but suggested that new threshold needs to be developed in collaboration with the representatives of industry at the right forum. He suggested strengthening of the skill development council to address the labour productivity issues.

In the week ending April 23, the Sensitive Price Index (SPI) surged to an all time high of 19.83 per cent. SPI indicates the cost of living of the low income group.

Mr Majyd Aziz felt that alternate energy options should be considered seriously and the government might save money by closing down the alternative energy board that has just been granting licences and had failed to contribute to develop alternatives on the ground. He told Dawn that the last government had drafted an employment policy that was worth trying and advised the minister for manpower Khursheed Shah to implement it.

The fact is that there are no quick fix solution for the economy that despite high growth rate it seems to be heading nowhere like a rudderless ship. The revival of democracy has broadened the base of decision-making process in which rights and responsibilities are much more widely shared.

However, the complexities of economic problems demand an ever broadening decision-making. The representatives of the civil society should also be associated in the exercise to evolve sustainable macro economic policies.