Renowned economist Dr Kaiser Bengali has resigned from the Austerity Committee (High-Powered Committee for Rightsizing the Federal Government) formed by Prime Minister Shehbaz Sharif to reduce government expenditures.
In his resignation letter, Dr Kaiser cited the lack of government commitment to reduce expenditure, read a press statement.
Dr Kaiser said he was “immensely disappointed that of the 70 government organisations reviewed, the committee recommended privatising 17 commercial entities and retaining 52 government organizations, closing down only one.”
Speaking at a media briefing at the Karachi Press Club (KPC) on Monday, he said the foremost priority of the government has “to be to stem the fiscal hemorrhage that threatens to be fatal for the economy and the country”.
“Yet, the focus of the committee has shifted to retaining almost all the government entities but making them more efficient,” read the statement.
Dr Kasier also challenged the committee’s recommendation to abolish 150,000 Basic Pay Scale (BPS) 1 to 16 low- cost positions and privatise Utility Stores Corporation (USC), saying that the entire burden of “right-sizing” was being imposed on the lower income strata of society and that there was no mention of any of the high-cost Secretary, Additional Secretary, Joint Secretary, Director-General, etc. positions that would be eliminated.
He disclosed that in his detailed report to the committee, he had recommended abolishing 17 divisions and nearly 50 government organisations that would have reduced a substantial number of BPS 20 to 22 positions and effected annual savings of over Rs30 billion in non-salary costs.
The economist was of the view that the country’s economy “was in a state of collapse and has been surviving on a debt ventilator”.
“Now, however, even the International Monetary Fund (IMF) as well as friendly countries were reluctant to extend any further loans and the privatization process has stalled as no one was bidding for State-owned Enterprises.
“Moreover, a number of foreign investors are leaving the country - a process of reverse FDI [Foreign Direct Investment] ,” he said.
S M Tanveer Published September 10, 2024
The writer is Patron-in-Chief, United Business Group
A week ago, I was invited by the leadership of the Faisalabad Chamber of Commerce and Industry to their city to stir the conscience of the government authorities being the patron-in-chief of the United Business Group (UBG) regarding the industrial devastation of Pakistan’s Manchester.
I was joined by Dr Gohar Ejaz, leader of the business community and Chairman of the FPCCI’s Think Tank on Pakistan Economy’s Revival and Growth (PERG). Other FPCCI representatives who travelled to Faisalabad for the occasion included Zaki Ejaz and Momin Malik from Lahore, Ahmed Chinoy from Karachi, Daru Khan from Quetta, and Mian Abdul Haque Jatoi from Dadu, Sindh.
A sea of business leaders converged at the Faisalabad Chamber of Commerce and Industry, all anxious to voice their concerns. As Chamber President Dr Khurram Tariq took the stage; he painted a bleak picture of the industrial collapse in Faisalabad, leaving no doubt that the city is in a state of despair.
Following that, every speaker who got the opportunity, described the industrial devastation in the city from their own perspective, and each perspective seemed to be the true one. They said that many large industrial families in the city have closed their industrial units for several months now.
them to take charge of the situation.
After all, why is the government not addressing this issue immediately when it has a significant stake in 52% of the IPPs? Can’t it renegotiate their terms? Can’t they be operated on a ‘Take and Pay’ basis instead of ‘Take or Pay’? What is the government’s thought process, and whose interests is it trying to safeguard?
The shutdown of industries is a stark testament to the government’s policy failure, leaving workers jobless. We urge the government to rectify its approach before the situation escalates, with protests erupting nationwide and control slipping from their grasp. The tipping point is near, and the situation is dire.
