Things being what they are, politicians often find themselves at the receiving end of popular discontent. Senior leaders of mainstream political parties were approached to have their input about the lack of positive impact of an otherwise improving economy on the common man.
Pakistan People’s Party (PPP) Co-Chairman Asif Ali Zardari, Pakistan Tehreek-i-Insaaf (PTI) Chairman Imran Khan and Muttahida Qaumi Movement (MQM) Chief Altaf Hussain sent in their views through emails.
Mr Zardari admitted that there was a huge difference between the haves and have-nots and between the lowest wage and the highest wage, saying this inequitable distribution of both resources and opportunities lies at the root of the social and economic disconnect.
The minimum wage, he said, should be tied to the cost of living and inflation, but the fundamental issue was of providing basic necessities of life and reducing fiscal disparity. The PPP government’s initiative to make workers shareholders in state-run enterprises was a step in this direction, he said.
By its very nature, a totally free market, Mr Zardari said, was not a social equaliser; the market’s profit motive promotes exploitation and fuels disequilibrium. The government has a role to nudge free market towards social responsibility.
“Democracy relying solely for its legitimacy on periodic elections and voting with little regard to peoples’ welfare and deliverance is fragile, to say the least. Democracy cannot take roots if elected governments fail to deliver and usher positive change in the living conditions of the people,” Mr Zardari said.
On his part, Imran Khan thought the pressure on household budgets was a direct result of the downward spiral of the economy since the 1990s. Rising cost of living, high unemployment and lack of new job creation were due to bad policies and governance failures, he said, adding that these failures manifested in the form of the energy crisis, record debts and the inability of the government to provide even basic education, health and clean drinking water to the citizens.
“Situation has become particularly bad over the last seven years. In 2014 the economy recorded the lowest ever investment in the country’s history at 12.4 per cent of GDP.”
The PTI chief deplored that the record fall in international oil prices provided the government a remarkable opportunity, but instead of undertaking long-term positive growth reforms, Prime Minister Nawaz Sharif passed numerous regressive anti-growth taxes — hike in GST to 37pc on diesel, a new 5pc regulatory duty on import of furnace oil to produce electricity and five new duties on electricity bills — “all these hit the household budgets and make life miserable,” he said.
“This is also our fundamental objection to the IMF programme, which encourages such short-sighted regressive measures that disproportionately hurt the poor and middle income households instead of real reforms that would shield the vulnerable segments and target the wealthier segments.”
Mr Khan said the KP government raised minimum wage in 2014 to Rs15,000 per month (50pc raise from the preceding year) compared to Rs12,000 in Punjab and federal government (20pc raise), Rs11,000 in Sindh (10pc raise) and Rs9,000 in Balochistan (no increase).
“We believe increase in wages should be linked to the overall increase in cost of living. We are also concerned with the plight of the senior citizens and retired officials who depend entirely on pensions to meet household budgets. Currently pensioners receive as low as Rs4,000 per month. We have put recommendation forward to the KP government to ensure that no pensioner receives amount less than the minimum wage.”
Further, under the Rs7.3bn KP subsidy package for over 870,000 households, each family would get a relief of Rs600 a month, including Rs400 on flour and Rs200 on ghee, the PTI chief added.
“All these pro-poor spending plans are being financed through progressive tax measures that only target the wealthiest segments. KP was the first provincial government to introduce the agriculture income tax, increasing taxes on the largest landholders by 300pc in 2014.
“Unfortunately, the PML-N government has doled out record tax breaks to the rich and powerful to the tune of Rs477bn (2pc of GDP) in FY14 from Rs239bn in FY13 and introduced a host of regressive tax measures that burden the poor and middle income households.”
Mr Khan said farmers were on the roads protesting, nurses, doctors, teachers and even visually impaired citizens were out on the streets protesting against regressive measures of the government, for improvement in salary structures and new jobs.
Government has a big responsibility in ensuring an enabling investment climate for business to grow and create new jobs. It also has a role in ensuring a regulatory environment to foster competition and increase welfare of citizens through lower cost of goods for consumers and improved services.
“There is no democracy in these ruling parties; they are all family limited companies protecting their business interests. We in KP are pushing ahead with the local bodies elections to devolve power to the citizens and engage the masses in public policy-making to strengthen democracy. The ruling elite is doing everything to ensure that power remains concentrated within its hands and doing everything to delay holding of local bodies elections.”
For the citizens it is imperative that the system delivers, otherwise what good is democracy for the poor and vulnerable households? Quoting Hazrat Ali’s saying, Mr Khan warned that if the ruling elite did not mend its ways, “the people will be on the streets to fight for their rights.”
Altaf Hussain thinks there is no participatory democracy which has resulted in steep disparity in income and opportunity and the gap between urban and rural dwellers is also rising, and “there is no documentation of informal sector profits and wealth that fill the coffers of feudal lords, the big industrialists and trading houses”.
He believed that even a minimum wage of Rs17,000 per month was not sufficient given the ever increasing prices of basic commodities.
Picking up the bigger equaliser between the market and the government, the MQM chief went for the former, but added that for a developing economy like Pakistan, it should be a “combination of both (market 70pc and government 30pc), subject to the condition that government is based on the principle of participatory democracy where the disadvantaged can also participate in decision making at local, provincial and national levels. The present one is a sham democracy,” he said.
“The example of Arab Spring is before us. The governments are created to ensure security of life, three square meals, shelter, education, and healthcare to the people. We do not live for the past glories, nor for yesteryear, but for a bright tomorrow. So if the present elected governments fail to deliver, they will tumble down,” said Mr Hussain.
Published in Dawn March 22nd , 2015
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