Budget season is here. Everyone is presenting their two cents on the way out of the IMF’s vicious trap (with the latest iteration imposing 105 compliance requirements, including 75 ‘structural conditionalities’), solutions to kill all tax ills, a panacea for the power sector miscarriages, a lethal shovel for the trade deficit serpent, development-centric economic prescriptions to counter pro-cyclical meandering, and whatnot.
And thanks to ChatGPT and Google NotebookLM, Facebook and LinkedIn are brimming with macroeconomic commentaries and infographics. Resplendent seminars are being organised, with the same slides but for the new fiscal year, to gauge the impending behemoth.
Newspapers, especially oped sections, are the sweet spot for policymakers and even ex-ministers. One may wonder where the magical healing potion was when they were orchestrating the national financial (mis)management. Maybe it is only after defenestration that one gets hold of the knowledge that the job required in the first place.
The typical approach in the prevailing discourse is to perform horizontal and vertical analyses. The former is a trend analysis; for instance, since 2007-08, current and development expenditures of our governments have increased by 1007% and 937%, respectively.
The latter works by dividing a certain expenditure, let’s say military expense, by the total budget; this works as a classifier, with ideological baggage, either accepting or rejecting the line item. And then, the cliche sermon ends with ‘the way forward’, presenting obvious things: cut tax rates, grow the tax base, cut current expenditure, boost development expenditure, rationalise subsidies, produce more, import less, and so on.
At the moment, I am sick and tired of these mantras. And it’s not that I am a sadist who wants Pakistan to fail economically. Rather, what irks is simple: if we know the deliverance already, why are we not implementing it? Either those in power don’t read newspapers or the roadmaps, which are often presented by think tanks to incumbent ministers by hand, or don’t scroll through social media, which of course is almost impossible in this day and age — or they are well versed in all this, but they don’t want to follow it due to the absence of incentives for such tiring endeavours.
Then, what we should focus on, rather than debating constantly sans dialogue, is to, somehow, cure the infamous phenomena of elite capture, which, according to PIDE, works both as a situation in which the elites shape development processes according to their own priorities and as a process in which the powerful elites skim resources intended for the bottom and define policies in a way that protects their own interests.
This translates into the financial morass reflected in our budgets and reports, and a development deficit that is borne with excruciating pain by paupers.
Our economy revolves around rents and rent-seekers; this is a colonial way of governance, institutionalised through bureaucratic controls, legal frameworks and economic policies designed to serve colonial interests. Unfortunately, even today, this remains the modus operandi of our governments.
Some features of the prevailing economic edifice include: regulatory capture and political control: policy configured by powerful groups who sustain discretionary influence over institutions and economic rules; rent-seeking and distorted incentives: access-based gains dominate, making lobbying and connections more rewarding than productivity; selective taxation: offering exemptions, evasions, and ineffective rates; trade protection and favourable prices: subsidies that do not promote efficiency and instead sustain protected sectors through repeated support.
This involves, on the one hand, favourable pricing formulas, strong protective barriers and conditions that allow cartels and monopolies to operate easily, and, on the other hand, convenient access to cheaper inputs; and debt dependence and property-led accumulation: external financing smooths the BOP crises while domestic wealth concentrates in land and low-productivity assets rather than productive investment.
Now, one may assess exactly how the hackneyed roadmaps fix this, ad capite ad calcem. In the short run, because of lender-imposed fiscal austerity, numbers may improve, but the very economic structure — the incentive structure that promotes the capture of capital (economic, political, cultural) by those in positions of authority — remains the same. And so, this status quo will inevitably lead to social inequity, laggard governance, widespread corruption, the proliferation of patronage networks and the limitation of mobility of the marginalised, again and again.
Lastly, considering the foregoing, some reflections are indispensable: what exactly is the point of fudging the figures, visualising infographics, commencing dazzling seminars and writing all these commentaries, opeds and reports without questioning the very fundamental axis of the political economy? Is there any foundational rethinking of economics year on year, apart from the updated numbers? Does it make sense to exude analyses to those who have permanent employees, graduated from top economic schools, and who, unequivocally, don’t care?
Are we really that stupid to assume that a leopard will change its spots while we continue to feed it?
Disclaimer: The viewpoints expressed in this piece are the writer’s own and don’t necessarily reflect Geo.tv’s editorial policy.
The writer is a Peshawar-based researcher who works in the financial sector. He can be reached at: [email protected]
Originally published in The News
2026-06-06 13:38:00
