There is a growing demand from all quarters for a charter of economy. Among others, Finance Minister Ishaq Dar has repeatedly supported the idea. The logic behind the proposal is that all political parties, despite their differences on the issues of the day, should sign a charter and agree on a minimum programme of policy measures to put the economy on a course of sustainable development.

No doubt, there is a great need for a charter of economy among political parties because this will send a strong message to investors both here and abroad that despite political instability and confrontation they are united on the imperative of giving a strong push to the economy.

A common charter of economy will be a safeguard against violent policy reversals and changes which we have seen in the past and which has driven away foreign investment. Successive political parties have made major reversals in policies, causing lack of trust among investors. One can quote the examples of CPEC, independent power producers (IPPs), fiscal and monetary policies on which political parties have different points of view.

Economic experts agree that the present approach to policy making needs to be changed if Pakistan wishes to improve its prospects of economic development. To this end, firm principles of economic policies and strategies should be developed and agreed upon so as to minimise the discretionary powers of the government of the day and obviate the possibility of arbitrary and politically motivated decision making. The major subjects to be covered by the charter should include foreign investment incentives, fiscal and monetary policies, tax holidays and exchange rate. We have seen in the past how the construction of motorways, building of power plants and CPEC projects fell victim to policy changes by PML-N, PPP, PTI governments resulting in delays and cost escalation.

All political parties have their interests to watch and they play around with the massive patronage powers they have to benefit their supporters and favourites. For instance a party in which the feudal lords dominate will try to benefit them through changes in taxation laws and a system of untargeted subsidies to the agriculture sector. It is no secret how over the past decades agriculture has largely remained out of the tax net because the assemblies are dominated by the feudal aristocracy. The PML-N has the support of the business and trading community and it tries to win their favour through various measures, including amnesty schemes and hidden tax incentives. During its tenure, the PTI is said to have favoured the construction lobby.

One reason why Pakistan’s economy has remained underdeveloped and suffers from serious distortions is that governments in the past have taken economic decisions to serve their partisan interests, and not on the basis of larger national considerations. Corruption is also an outcome of such an approach. Corrupt practices have destroyed the national economy and benefited a few. The result is that some individuals and groups have become billionaires while the vast majority of the people are deprived of the basic needs of life. A resource rich country like Pakistan is on the brink of bankruptcy and begging for a few billion dollars, while Bangladesh has gone ahead of us and has over 40 billion dollars in reserve.

The time has come to put the national economy on the right course and this is not possible without a charter of economy signed by the major political parties of the country. It is also important to take the Establishment on board. A national consensus should be hammered out on the basic rules of the game including sectoral allocation of national resources, rules of public spending, taxation rates for various sectors, parallel development of agriculture and industry energy and export policies.

The development of a comprehensive charter of economy should not be a closed-door affair. It should be publicly debated and its pros and cons should be thoroughly discussed and analysed. In going about the task, apart from the political leaders, the cooperation of renowned economists and financial experts, think tanks and academia should be enlisted.

Let us not forget that in framing a charter of economy there may also be a need for constitutional adjustments to redefine the powers of the federal and provincial governments bearing on money matters. An example is the NFC award which needs to be reviewed in the light of changing circumstances. It has been observed by experts that under the NFC award, provinces have got more resources, whereas the federation lacks the necessary funds to carry out its manifold responsibilities relating to national level development programmes.

A consensus is imperative to sort out issues relating to fiscal and current account deficit as well as monetary policies which affect the life of the common man on a day to day basis. An agreement is also needed on ways to tackle macroeconomic problems which lie at the root of high inflation.