Budget 2022-23.

A lot has already been written by analysts and even by this author on the 2022-23 budgetary announcement, so I will not go into the nitty gritty of the numbers again and will instead focus on whether or not this budget sets the right direction for the Pakistani economy going forward. We all know that given the policy mismanagement failures over the last few years, some pain was necessary to bring the IMF back on board in order to open doors in general for foreign exchange financing and avoid stalling on our maturing net debt commitments of almost $15 billion (or possibly even more) in the next fiscal year-a situation exacerbated by the rise in global commodities in particular and an ongoing Russian-Ukrainian war in general. So, for the sake of this article, we will assume that the Fund's programme in Pakistan will soon be resumed and therefore try and assess the effects of this budget as if a default on foreign exchange obligations is something that has been successfully avoided. And with this reality in mind, it would be fair to say that what in essence Pakistan required was a budget that carries a vision-and naturally sets a course to achieve it-to restart growing the economy in a way that is both, primarily indigenous, equitable and sustainable.

Pakistan's poverty and unemployment figures have worsened in the last 5 years and with almost 3 million young people entering the job market every year, a GDP growth level consistently below the 7 percent mark is simply not an option. The trouble though is that of late, every time we cross the 5 percent mark, our external account becomes unmanageable, in-turn unleashing a cycle of devaluation, inflation and a deepening debt trap. Fortunately though, in economics the measures required to counter this recurring problem are not unknown and in fact frequently used by the recent South Asian economic success stories of the world, for example of China (in particular in Xinjiang), India and of late, Bangladesh.

Essentially, the story calls for: a) Establishing and incentivising a vast but structured manufacturing base that mainly thrives on exports and discourages imports or even investment per se (domestic or foreign) unless it helps aid even more exports; b) Ensuring an increased flow of capital from the public sector to the private sector to capture the entrepreneurial, intrapreneurial and innovative juices of the private sector and thereby optimising returns on the total available national capital...