PRIME MINISTER ZAFARULLAH Jamali’s “relief” package of Rs 5 billion for 2.5 million families amounts to Rs 200 per family or about Rs 22 per person. If this is to be the sole such “relief” package this year, Mr Jamali’s largesse is less than 75 paisas per day per lucky person. A beggar makes ten times as much in less than one tenth of the day. But Mr Jamali is a politician. He has his hand on the pulse of the wretched people. Thus he wonders whether wheat and sugar prices can be reduced to alleviate their hardship.
“No,” explains Shaukat Aziz, his clever finance advisor. “The struggling farmer wants higher prices for wheat and sugar and the government doesn’t have the money to subsidise the urban consumer by forking over the difference between the high price demanded by the farmer and the low price to be charged from the consumer.”
“Can we do something about the crippling power rates”, asks Mr Jamali. “No,” says Mr Aziz, “WAPDA and KESC would then pile up greater losses and become bigger burdens on the cash-strapped treasury.”
“What about a reduction in the price of petrol,” asks Mr Jamali exasperatedly. “Alas,” sighs the finance advisor, “the price of petrol has risen markedly in international markets, a disruption is feared on account of the impending war in Iraq, we have only stocks to tide us over for one month, and last but not least, a consumption tax on petrol is an important source of revenue for the government which is desperately trying to enlarge the kitty so that it can cover its administrative costs, defense outlays and debt payments without having to borrow too much money from the banks.”
“OK, I understand,” says Mr Jamali, “I’ll settle for a pocketful of the huge amounts of money remitted home by Pakistanis abroad in recent times.”
“You’re joking, sir, that money was intended for the relatives of Pakistanis abroad and has gone straight to them”, explains Mr Aziz.
“Is there anything I can do for the poor?” asks Mr Jamali, “What about that big pile of forex reserves that President Musharraf keeps talking about, can I take a slice of that, please?”
“No,” snaps the finance advisor, “that money is to be invested in a safe haven abroad by the State Bank in order to establish the credit worthiness of the country.”
“But what’s the point of being credit worthy when you keep saying we want to pay off our debts and not borrow any more money,” Mr Jamali wants to know.
“You just don’t understand, do you, sir,” hisses Mr Aziz, “we need to borrow low interest money in the short term so that we can pay off high interest debt in the long term.”
“No, I really don’t understand,” admits Mr Jamali. “President Musharraf says he’s worked wonders in three years. The IMF confirms Pakistan is moving in the right direction. You claim that GDP is poised for take-off. Yet there are more poor people in the country today than ever before and unemployment is rising. So what’s the solution?”
“I’m afraid there’s no quick fix,” confirms Mr Aziz. “We need to encourage domestic and foreign businessmen to invest in the country so that industries are set up, jobs are created and poverty is alleviated.”
“But isn’t reducing the interest rate from 20% to 10% a sufficient incentive for businessmen to borrow and invest,” queries Mr Jamali.
“Apparently not,” admits Mr Aziz, “the domestic investor has adopted a wait-and-see approach.”
“But what is he waiting for,” asks Mr Jamali.
“He’s waiting to see if your government survives, sir, and whether its economic policies will not just be a continuation of earlier policies but will survive long after its gone.”
“That’s a tall order,” frowns Mr Jamali. “What about the foreign investor? Why isn’t he rushing to Pakistan now that we are front-line allies of the USA and democracy is back in the country?”
“Well, sir, the foreign businessman is waiting for the domestic businessman to take the plunge first. Also, foreign investors are a bit shy of front-line states inhabited by jehadists and al-Qaeda terrorists and mad mullahs whose leaders hurl threats of nuclear war between Pakistan and India every now and then.”
“Ah ha,” says Mr Jamali, “so that’s the real issue. Have you told President Musharraf about this?”
“No sir, I haven’t,” explains Mr Aziz, “It’s all related to national security issues of which only he knows best.”
“OK, OK,” nods Mr Jamali. “Meanwhile, can’t you cut some unnecessary expenditures and divert funds to me for poverty alleviation?”
“No sir, I can’t cut military expenditures because the army won’t like it and General Musharraf will get angry at me; I can’t cut back on debt payments because the donor countries won’t like it and the IMF will get angry at me; and I can’t cut back on administrative costs because the horde of ministers, and ministers of state, and parliamentary secretaries and MNAs and MPAs and Nazims and civil servants won’t like it and then you will get angry at me.”
“Good God man,” exclaimed Mr Jamali, “I never knew it was so simple. It’s a relief to have you onboard. Can you spare Rs 5 billion please?”