The countrys top economic advisory body consisting of eminent economists, former finance ministers and other prominent personages has slammed the governments budget strategy, terming it anti-poor and claiming that it cannot boost growth due to squeezing fiscal space. It has expressed concern that due to the power crisis and non-serious governance attitude of the government, loss of jobs will continue next year as well. This is bad news for the economy. The comments were made in response to a thin paper produced by the Ministry of Finance, outlining the priorities of the government in the wake of a dwindling economy. The opposition in the National Assembly has already termed the document a pack of lies. The Economic Advisory Council that met under the Chairmanship of Dr Abdul Hafeez Shaikh, Pakistans Finance Minister, prior to the finalisation and presentation of the budget in Parliament criticised the government for not taking difficult economic decisions that were necessary to come out of the crisis. They said that the biggest concern for the next year was double-digit inflation. The government has targeted an inflation rate of 12 percent for fiscal year 2011-12. This is bound to rise if the fiscal deficit is not contained and revenue collection falters. However, it is disturbing to note that the recommendations made by this forum were ignored by the federal government. Asset tax has not been imposed. Similarly, no proposal was incorporated in the budget to tax agriculture incomes or capital gains. Todays global headlines of conflict and insecurity in the region overshadow another struggle being fought in every corner of Pakistan, which is just as crucial to the nations future: Poverty. The current global recession, hard on the heels of food, commodity, oil price shocks and an ongoing array of domestic and security challenges, now clouds Pakistans economic future and is severely straining poverty reduction efforts. The economic downturn has cut Pakistans growth by slowing the gross domestic product (GDP) to 2.4 percent in 2010. With the population increasing at the same or higher rate, there has been no real increase in GDP. No steps have been taken to overcome structural weaknesses in the economy to avoid boom-bust cycles and reduce dependence on external inflows. A responsive fiscal stance that addresses the need for building critical infrastructure and investing in health and education is also needed. That does not appear to be forthcoming. Industrial slowdown is leading to loss of production and shortages in the domestic market. Exporters are unable to meet export deadlines. Workers are losing jobs and every day there is an increase in the figure of total unemployment in the country. The crisis is due to the shortage of energy. Despite half-hearted power sector reforms, Pakistan still has one of the lowest levels of per capita power consumption and energy efficiency in the world. For each dollar of gross domestic product (GDP), Pakistan uses 15 percent more energy than India and 25 percent more than the Philippines. Energy wastage and acute shortage carry a high economic and social cost; this is evident from the growing power riots and increasing street crimes. The faith of the people in the governments ability to deliver has been completely shaken, if not destroyed altogether. The government itself is responsible for the mess, as it is shying away from taking difficult decisions, which will affect the ruling class the most, said former Finance Minister Shaukat Tarin. He urged the government to strike a balance between growth and economic sustainability and added that if tax on agricultural income was not levied, urban political parties would be justified in resisting collection of general sales tax from the poor, who were already burdened with several other taxes. Former Finance Minister Dr Hafiz A. Pasha has observed that the government did not have enough fiscal space, without which it would be difficult to present a growth-oriented budget. Ironically, the Ministry of Finance has been selling two budget deficit targets. At one point, the budget strategy paper puts the deficit estimate for the upcoming fiscal year at 4.5 percent (Rs950 billion). However, another page shows the figure at 5 percent of GDP (Rs1 trillion). For the outgoing fiscal year, economic managers have estimated a 2.8 percent increase in national income. For the upcoming fiscal year, GDP growth is estimated at 4.2 percent, according to the Budget Strategy Paper. It seems that the government will continue to follow a tight monetary policy in the name of macroeconomic stability, which will result in slower growth. According to Pakistani economists, the country needs a growth rate of around 8 percent to create jobs for three million young people entering the market every year. Delays in implementing policy measures and fiscal management practices that are necessary for macroeconomic stability have undermined investment in infrastructure and production capacity. There is an evident and pressing need to increase the tax-to-GDP ratio by at least one percent every year in a bid to increase the lowest ratio in the world, which currently stands at 9.1 percent. However, the government has planned to add only half a percentage point this year. The affluent classes many of whom are seated in Parliament get away once again by not paying the state a share of the income, which could be used for the benefit of the countrys deprived segments. Without an economic vision, which spans a period of 20 years and carries consensus of all state institutions and political parties, Pakistan cannot hope to get out of the clutches of the IMF and perform according to its potential. All the political parties have their manifestos containing social, economic and political programmes. But these manifestos lack the required long-term vision. Also, the needed consensus is absent. In the absolute mess in which we find ourselves, politics must not be mixed with the economic vision of Pakistans economic development irrespective of which party comes to power. The other issue relates to law and order. We have mixed up terrorism with the need for maintenance of law and order. Instead of strengthening our police force, we have decided that Rangers, the Balochistan and Khyber Pakhtunkhwa Constabulary will be responsible for combating crime. Investigation and prosecution still remains the responsibility of the police. Badly investigated cases almost invariably end in acquittal. The Police Order, 2002 needs to see the waste paper basket. It was designed by crafty policemen and self-serving politicians out to elect the commando President General (retd) Pervez Musharraf for the next 10 years in uniform. A new law is urgently needed. A properly recruited, psychologically screened, trained and functional police should be able to return the country to normalcy. Indeed, we are running out of time. Old clichs, half-truths and falsehood will no longer work. n The writer is a member of the former Civil Service of Pakistan. Email: