What most people do not realise is that although there is a new finance minister in place, the government essentially remains the same. So really, for things to meaningfully change it has to be a conscious effort, both on part of the new finance minister himself and the PDM-led government functionaries to do some collective thinking on what their clear objectives are vis-à-vis the economy. The irony of our economic downfall is that while the solutions have been quite straightforward all along, we have consistently suffered on accounts of intent and (management) competency or rather an incompetency. Time and again the incoming managers have focused on the short-term or the easy way out by repeatedly flogging rural to urban migration and banking on consumption/demand-led growth with a total disregard for how and where it comes from. The solutions on the contrary lie instead in some simple supply-side economic policies.

Complete rationalisation of the tax system: There should be a few taxes with low tax rates on broader tax bases. While doing away with exemptions, subsidies, etc. is a good idea, then distancing the collector from the taxpayer to check prevalent corruption, the use of private sector money to fund government operations, and outrightly crowding out the private sector will need to be done away with to ensure operational competitiveness. For example, today Pakistani exporters do not enjoy a zero-rating facility, whereas their regional competitors do; refunds in a very high-interest rate environment are a lengthy, cumbersome and long-drawn-out corrupt process and only account for around 85-90 percent of the sales tax paid; bonded facilities are either deliberately delayed or renewals are used as a trap to fleece businesses from their due right to adjustment; the sales tax slab itself in comparison to other economies is very high; and last but not least, the power consumers pay for the state’s operational inefficiencies, which by itself is a tax that renders them uncompetitive in the global markets. The need of the hour is to lure people back into the tax net at a time when the faith in the tax collector is low and almost 55 percent of the economy functions in the undocumented sector.

A major repositioning of SOEs: This group of state-owned enterprises also include businesses that are so heavily regulated that they effectively are owned by the government—for example, privately operated public utilities. A comprehensive plan for wholesale privatisation of these businesses needs to be quickly developed and implemented and/or other options like long-term management leases with a 10 percent equity stake with possibilities of more, placing them under private control on market principles and running them private-public partnership can also be selectively exercised.

Freer Trade: The revenues from the tariffs and fees on imports, exports, and other cross-border transactions pale in comparison to the economic dislocations those trade impediments engender and the culture of corruption that results. Regional trade remains abysmal, something that always tends to be crucial to mitigate risks from supply-chain issues, operational inefficiencies where present, inflation and retarded growth.

A stable currency: Perhaps one can think of nothing that has had a more pervasive and insidious impact on prosperity than Pakistan’s unstable and weak currency. Without a widely accepted stable national currency, markets as we know them, tend to dissolve and transactions on a much wider basis move towards a rather inefficient barter system. The Pakistani Rupee’s volatility and depreciation has been the single most significant factor in what can be termed as an assault on market efficiency and the country’s economic progress. Fortunately, the incoming finance minister’s track record on lending support to currency stabilisation is quite good.

Excess spending by successive governments: Spending other people’s money rarely leads to financial parsimony, economic efficiency, or economic growth. Excessive or un-budgeted or even poorly-budgeted spending outrightly leads to underperformance at federal and local levels. Insider dealings, corruption and the simple placement of capital in inefficient hands replace market mechanisms in turn leading to corruption and an undermining of trust in the government. Time and again we have seen politicians and political parties make the same mistake over and over again without realising that they are actually shooting the economy—and with it themselves—in the foot. With this uncontrollable desire of political leaders to somehow buy votes/popularity through disastrous spending, since one is at a loss on how to control it by any kind of behavioural change therapy, the only way to perhaps guard against is by placing direct and irrevocable regulatory limits on government spending and more specifically the nature of government spending—Bangladesh saw similar firewalls placed during the tenure of its technocratic rule.

Regulatory reviews and reforms: Rules need to be framed to rationalise and productively coordinate public behaviour. For example, we cannot allow every driver to choose on which side of the road to drive on. However, at the same time, it is imperative to ensure that legislation does not hinder economic activity, growth and development, and its equitable distribution. Pakistan’s economic environment remains highly constrained owing to over-regulation, excessive governmental outreach and oversight, a colonial mindset that breeds corruption and curtails antitrust functions and a system that aids the unfair distribution of wealth. To get to a truly development-oriented economic model in Pakistan, both a comprehensive review and correction of all such damaging legislations and a broad-based reform drive to inculcate market principles, are now essential prerequisites. For the limited tenure that this government has, to even start the process of real economic change in the country would be a big achievement—short-term measures will just not help anymore!