by Imad Zafar
The writer is a columnist and writes for various English and Urdu publications.
The PTI government approved a package of Rs20bn for stock exchange brokers to give confidence to the stock market.
The incumbent government of Pakistan Tehreek-e-Insaf (PTI) has just increased the price of petrol by Rs4.26 per litre and it intends to introduce more indirect taxes in the upcoming budget in order to minimise the deficit in the budget. However, surprisingly, recently the PTI government approved a package of around Rs20 billion for stock exchange brokers and it was termed as a package to end the uncertainty in the Pakistan Stock Exchange and give confidence to the stock market. However, since the package is actually being given to the wealthier stock brokers, it begs the question that at a time when the PTI government is burdening the poor masses with indirect taxes and slashing the development budget, why has it given such a luxurious package to the people who have minted billions from stock purchasing and selling? At the same time, the development budget of Punjab has been slashed and the higher education commission is also suffering from a lack of funds.
Given the current economic turmoil, giving a relief package to the speculators who control the market seems to be a destructive move by the PTI. It is actually an indication that the PTI government is still only vying for the optics and its economic advisory council is repeating the same old formula of General Pervez Musharraf. Musharraf brought about an artificial boom through consumer financing and by pumping money into the stock exchange. Since money was pumped in artificially, the stock market profit was only limited to the bigwigs of the market and it never had any trickle-down effect.
This problem has actually plagued Pakistan since the time of General Ayub Khan. His policy of creating a manufactured boom in the stock market and reliance on nepotism meant that since then, big corporations have always aligned themselves with the party in power in order to further their vested interests. As a result, these well-informed businessmen and stock market brokers always know which way the wind will blow and they smartly always invest in the electoral campaign of the political party which is likely to win the general elections.
Instead of making the stock market free of the influence of a few select individuals, the PTI government is actually working with Ayub’s formula of rewarding the big guns. During Ayub’s era, only his cronies had control of the market and if such policies endure, we will find ourselves back in that era. It is common knowledge that Jahangir Tareen has been heavily involved in the stock market and that he also enjoys cordial relations with many major stock brokers. In fact, many of these individuals funded PTI’s electoral campaign, so it seems like it is payback time for the PTI government. With Tareen acting as a defacto deputy prime minister, PTI seems to have forgotten about the masses that brought the party into power. The country has seen a surge in the prices of everyday commodities, even during the month of Ramazan, and we have not received any relief package to tackle the mounting inflation. The stock market will never be strengthened if only a privileged few keep controlling the market.
To improve the stock market, the PTI government will need to increase business activity in the country through investment. Imran always talked about ending the monopoly of a few influential individuals in every department of Pakistan, but right now he is helping them by bailing them out. Perhaps he thinks that by appeasing the major influencers of the business world, he will win the confidence of the business community. The greater monopoly these individuals will enjoy in the stock market, the less the chances will be for common investors and businessmen to flourish. It appears that a few people in the business community enjoy good relations in the corridors of power and receive lucrative benefits on that basis. The trust of an investor cannot be won by rewarding only a few blue-eyed brokers. PTI was not given the mandate to oblige the already wealthy stock exchange brokers and to tax the already poor masses. Such schemes show that PTI is only interested in rewarding a few influential individuals, just like other political parties do when they come in power. Such special packages are needed in the domain of education and other social sectors. We have recently seen the brutal incident at the Sahiwal hospital where many infants died because the air-conditioning system of the hospital stopped working while the country was suffering from an intense heat wave. Perhaps PTI and Imran both need to realise that these kinds of incidents create a greater sense of deprivation among the masses, especially when they see that wealthy businessmen are getting special relief packages while the rest of the nation is left at the mercy of inflation and price hikes. Through its economic policies, PTI needs to decide whether it is a government for the people or a government for the elite. courtesy
The Express Tribune blogs