Pakistan: Budgeting a crumbling economy

Gone are the days when on Budget Day almost everything came to a halt on the streets, with people glued to the TV screens or radio sets in anticipation of some major concession for the working masses. After all in those days the budgets did matter. Now that is a bygone era and the masses having little interest in what is being said or are in no mood to be continuously duped by the sermons of these false prophets. Ironically what interest them more than the monotonous theatrics of a budget speech are ‘fixed’ cricket matches. Despite the working masses being written off by the ruling elite, analysts and the intelligentsia, do their instincts not hit upon the brutal reality behind these political facades?

There have been two significant factors affecting the situation before and now. In times gone by the economy was, relatively speaking, in a more stable condition and the rulers did have some capacity to plan ahead and maintain some control over inflation and spiralling of prices. Secondly, back then the traditional leadership had not betrayed the masses so ferociously and the pressure simmering from below was so palpable that the ruling elites had to pay some heed to it and reflect it in the budget proposals. The present ruling elite has completely shed its predecessors’ anxieties and sensitivities. This is the result of a catastrophic economic condition and extreme instability it has caused along with the failings of capitalist economic models.

Today all the mainstream political entities are thoroughly entrenched in the system, representing different sections of the corporate capital whose survival and rate of profit depends on crushing the masses. The only solution to the social and the economic crisis under capitalism is further loans, tax exemptions, havens etc. to attract direct foreign investment under this punishing market economy. It is no wonder that every budget these days is pro-rich, with tax havens and concessions to big business, and anti-poor.

Capitalism, not only in Pakistan but also in advanced capitalist countries, is going through a relentless crisis and there is no room for any reforms. On the contrary, the hard won welfare state is under unprecedented attack. Pakistan’s capitalism, which has never experienced any healthy phase in its entire history, has now become rotten to the core. Instead of improving the lot of the unfortunate inhabitants of this land it is lowering the living standards, plunging more and more people into the abyss of misery and poverty and rapidly increasing the already bulging sea of the unemployed. The society is in a constant decline and there is not a single ray of hope with the present economic system and the political horizon for a prosperous future.

If the previous regimes were imposing capitalism and increasing burdens on the working classes in a deceptive manner, the present staunchly capitalist government comprising of the capitalists, entrepreneurs and the industrial tycoons have unleashed an aggressive onslaught upon the already exploited masses. On the other hand the imperialists in their crisis have increased their leaching off the masses with exorbitant interests rates set by the IMF, World Bank and other institutions. The biggest chunk of the budgetary allocation goes to servicing debt and paying off interest on the imperialist loans in this budget, as was the case with the previous regimes. The second largest allocation is for ‘defence’ spending, which has actually increased by 11%. It’s not an accident that throughout history, military spending has increased more during so-called civil democratic regimes than during military dictatorships.

Just compare the meagre twenty six billion allocation for the health sector and a paltry 64 billion on education with that of 1,370 billion on debt-servicing and 700 billion on the military. These figures not only reflect the contemptuous attitude of the rulers towards the woes of the masses but there is also a method in this madness. In their almost insane lust for privatisation and profits, these essential and basic sectors are being forced into the private sector, as they are prodigiously profitable due to their indispensability. The provision by charity of Rs. 1500 per month for the most deprived families is appalling. Meanwhile expenses of the Prime Minister’s house are a scandalous Rs. 1500 per minute. As inflation soars, the most charitable donations are pitiful by comparison. It is so nauseating and repulsive when at the same time one considers those plunged into poverty struggling to survive.

But when it comes to the class which has placed the government in power, these vultures cannot wait for the budget. A week before the budget was to be presented these bourgeois rulers increased exemptions for corporate capitalists from taxes and customs duties to a staggering Rs. 477 billion. Billions have been stashed in the black hole of imperialist and local corporate IPPs and yet their insatiable thirst for higher and higher profits is never quenched. They keep on demanding - and getting - more and more from the rulers of their own class. No one is allowed even to question the price at which they are supplying electricity to the national grid and the agreements signed ensuring the continuum of their boundless profits. The holy cows of foreign debt repayment, military spending and the lucrative deals leave very little for anything else. The announcements of a rise in basic wages and salaries are pathetic compared with the high inflation, and these announcements will largely remain just that, with little chance of any real implementation. The spontaneous eruption of protests by the clerks in Islamabad is an indication of what the workers’ response will be.  That has been the experience endured by the successive regimes in the past four decades.

With astronomical indebtedness and record deficits there is hardly any room for developing society and alleviating poverty. Rather opposite will be the practice. In spite of the media’s vociferous budget haranguing, this whole joyless ritual is a meaningless exercise. The profits of the ruling class are the first and foremost sacred task of the state and every capitalist regime. And this budget represents only one third of the economy, something which has been conveniently ignored by the media. The other two thirds are the parallel of the black economy, which is not only a cushion for the formal economy but also provides 73 percent of jobs with harrowing conditions and excruciating exploitation of the workers. To consider and nourish illusions of any improvement for the lot of the oppressed masses in this system is a deceit and sabotage of the toiling classes. The only future capitalism offers to the people is one of more devastation, misery, deprivation and torment. The masses generally lag behind the economic events and processes. But it seems that they are fast catching up. Once they are at par with the economic changes then they will develop a collective consciousness and enter into a decisive class struggle to conquer this economy, society and its politics.