Austerity measures | Pakistan Today

Austerity measures

Icing on the otherwise inedible cake

Prime minister Imran Khan has kept his word in implementing a top-down austerity drive to reduce public expenditure. After moving to a smaller residence within the compound of the prime minister house that would require much less staff than the PM house and deciding to auction off some very expensive vehicles recently delivered for the PM, he has taken the lead which his ministers will have no option but to follow. First class air travel has been banned for some key offices while ‘discretionary powers’ used by past PMs to distribute taxpayer’s money willy-nilly to MNAs have been removed and will require parliamentary approval before being released. These are all welcome measures that are easily implementable to reduce public sector spending but more importantly they are good for optics – it resonates with the common man as it a rare sight to see a Pakistani PM reject the lavish perks associated with his office.

But all this is merely icing on the cake; the filling largely inedible at the moment as key challenges – chief among them economic – remain. Foreign exchange reserves have largely been supported by Chinese largesse of $4 billion in order to avoid a crisis while the real test remains securing the biggest IMF bailout in our history. There are no two ways about it as the IMF will ask for an arm and a leg to approve it while attaching political conditions such as the opposition also signing off on it not to mention pacifying the US on the security front first.

The promised social sector reforms won’t come cheap either and will require cuts in other areas – areas not use to cuts or questions about their spending. Increasing revenue by reforming the tax system and boosting exports in combination with expenditure cuts is essential given our economic predicament. These are tough long-term goals that are not achievable unless far reaching reforms within institutions are carried out through adoption of new best practices that are instilled and followed without exception. How ‘new’ or different this government really is will become clear once detailed policy and action on these key issues becomes apparent.