Amir Mateen

ISLAMABAD: Ishaq Dar takes the lead in presenting at least five national budgets, which should perhaps be a record for any finance minister.
We are not sure whether it was his bravery or naiveté to take the credit, or discredit if things go wrong, for the budget exercise in which he got involved only recently. But he was definitely smart to explain the mess that he inherited from the PPP government—highest inflation, fiscal deficit, local and foreign loans, Rs500 circular debt that keep the energy generation choked, taxes worth only 8 percent of GDP, you name it.
Interestingly, the persons who were largely the mastermind of this mess are also the major architect of the present budget. They can be easily credited for most economic mess that we confront now. So how do we know that the result of this flowery budget will be different from his earlier endeavours?
They are also among those named by the auditor general of Pakistan in a Rs317 billion scam, the report of which is likely to be presented to the Supreme Court on the very day he will be explaining the fine points of the budget sitting with Ishaq Dar. This means today.
The AGP report recommends that the case, in the light of its findings, be referred to the National Accountability Bureau (NAB) for gross violation of rules, fraud and forgery of documents that caused the pilferage of Rs317 billion.
The report points accusing finger at a minimum of four former federal ministers, half a dozen former petroleum secretaries.Some of them have been accused of oversight, others for negligence, but largely for fraud and kickbacks.
One of them is accused of advising the State Bank to pay most of the price differential claims worth Rs290 billion to major oil companies. He did that on the basis of questionable third party audit instead of the mandatory pre-audit by the AGPR.
The AGP has now found the payments made not just in violation of the rules but based on forged and non-existent documents .
This may be the first mega scam that has hit the government, which will test its resolve about, in the words of Nawaz Sharif: “Zero tolerance for corruption.” We are told that Ishaq Dar was told about the allegations against his budgetary team and yet he went ahead with this exercise. So, we do not know how to trust the people who have made this budget. Who knows if somebody may have taken kickbacks for giving concessions to the corporate lobby in, let’s say, reducing the corporate tax from 33 percent to 30 percent. We don’t want to question many of the big concession given to the super rich, but this official audit report puts the integrity of Dar’s team in jeopardy.
In fact, Dar deserves credit for Rs40 billion cut on government expense. We just hope he gets it implemented, particularly, hold those officials accountable who are using government cars for personal use and also drawing monetization allowance.
Credit must also be given for doing away with discretionary funds. We just hope the lead taken by Balochistan Chief Minister Dr Malik is followed by other provinces also.Basically, the whole direction of the budget about belt tightening and fiscal management is positive. Many of the targets about revenues and growth are highly ambition but worth commending, particularly the goal for bringing down the budget deficit by 2.5 percent of GDP.
We wait for the biggest issue that was missing from the budget—the energy policy. This is what will define the Nawaz Sharif government—make it or break it. The power riots in Faisalabad and elsewhere clearly indicate that the PML-N government may not have much time. If they did not deliver on loadshedding, the people will be out on the streets sooner than they realize—may be in six months. No wonder Nawaz Sharif remains so grim these days.
We also have an issue about involving Parliamentarians in development schemes. No matter what you do, the corrupt one always finds ways for kickbacks. The very nature of this scheme is negative—just another form of a bribery. Legislators should just legislate and leave development to the local bodies—if ever the PML-N will allow that as simple as that.
The Sharifs seem overly impressed by the Turkish model. After the Metro Bus, the construction of 1,000 housing colonies with 500 houses each also gets its inspiration from Istanbul. Well, Turkey got into mega construction schemes once they had their economy stabilized and made peace with their neighbours.

The News

June 13, 2013