When in doubt, hold fire - cant really think of any better way than this to describe this budget: A lot of pre-budget hype, but no real action Perhaps a good strategy under the present circumstances, since I suppose the economic policymakers realise that to truly turn things around some bold and difficult decisions need to be taken for which the political will continues to remain absent. In this case by some stroke of luck, even if priorities in Islamabad change, then surely the budgetary measures can also always be revisited during the course of a fiscal year Regardless of whether there is an overt mention to it or not, there is definitely this mindset in the governments quarters that indicates, given the unusual economic, political and security environment and a unique set of global challenges, there is nothing better on economic policies that can be done. The critics can keep on moaning, but the facts remain that, (a) foreign exchange reserves are stable, (b) Pak Rupee is not sliding, (c) exports have risen, (d) Current Account (monthly) has started posting surpluses after God knows how long, and (e) The rural sector is booming. Under the circumstances the economy will keep on muddling through and with a bit of luck may even show some signs of recovery, so why rock the boat? Prudence demands to avoid risks, minimise changes and maintain the status quo by simply focusing on increasing revenues by 2-3 percent of GDP that not only covers you for inflation, but also provides a bit of extra pocket money for vacations and buying toys Agreed, that the points listed above constitute the positives; however, the problem with such complacency is that it leads to an 'Ostrich syndrome where, (a) the government consciously chooses to ignore challenges it does not want to tackle without realising that they cannot be wished away, and (b more alarmingly, in doing so it disconnects itself with the real underlying issues of the economy. And this is precisely where these budgetary announcements have come up short: in correcting the direction of the economy per se and ensuring the medium and long term issues of an average person. The common man has been struggling for the last four years due to inflation, lack of jobs and rising poverty. It is all very well to talk about growth, but missing was a tangible yet practical (given our national constraints) roadmap that can kickstart the economy (growth, job creation and poverty alleviation). Pakistan has limited options for achieving a growth that is both inclusive and equitable and these are, (a) development of a strong culture of small and medium sized enterprises (SME), and (b) export-led growth. Germany as we know uses the SME sector as its primary engine of growth and economic activity and not only does this provide healthy competition, quality, keen pricing and an international sale outreach, it also takes care of the all important aspect of a fair demographic spread of investment. People by nature, especially in small companies, want to undertake business ventures closer to home and growth in the SME domain means that the fruits of prosperity spread across the country. Time and again countries (China, Thailand, Indonesia, Bangladesh, etc) around the globe have demonstrated that an exports-led growth is a poor mans ticket out of the poverty trap. This route to success has comparatively much less requirement of capital investment. It perhaps also represents the only method where your poverty becomes your strength One was hoping that with so much talk of this being a peoples government, there would be a more serious effort in these areas. The state-owned enterprises (SOE) that are also run by the state have been a subject of great debate and focus in almost the entire pre-budget activity. We all know by now that in their present state they represent a black hole that eats away nearly Rs350 billion of scarce governmental resources every year and this in addition to the loss on the potential of profit-making concerns. Although my take on fixing the situation is significantly different from the policymakers inclination towards outright privatisation, the point is that the issue of the SOE needs to be resolved quickly. Yet, what we witnessed was mere rhetoric and no meaningful planning. Persistent high inflation is a subject or rather a calamity that has been affecting every Pakistani. To address this in the short-term requires some innovative and out-of-the-box thinking and not the stereotyped and clichd response that we saw in the budget. Left to me, I would just worry about the basic food inflation in the short-term (fight a battle at a time) and in my book anything that does not qualify on the anvil of being an absolute kitchen essential consumption item (KE), I would simply not worry about it and let the market forces take care of it in the medium- to long-term. As for the KE, I am afraid it is the governments duty to insure that while the farmers are allowed to maintain a fair profit margin (through a scheme of subsidies and tax relief, if need be), the absolute kitchen essentials should reach the public at affordable prices. A regular check through price control mechanisms is required and these items are exported only when the government can be certain that this will not create shortages or price pressures at home. The mumbo jumbo of laissez-faire and reducing the presence of government may sound very fancy in other areas, but just does not work when it comes to KE, where it can tend to be the difference between life and death. India, China, Brazil, European Union and even the USA are good examples to follow when it comes to capping domestic food prices and at the same time keeping farmers satisfied. Last but not least, one feels that a good way to have approached this budget would have been by looking inwards and that too with some humility. Fully realise that in Pakistan everyone believes that offence is the best defence and hence the governments behaviour in shifting the blame: On people not paying due taxes, global oil prices going up, war on terror, USA, etc. What instead it should have focused upon is that its own perception is its worst enemy If it really intends to promote investment in the country, it first needs to improve its own image by becoming transparent, because only when the confidence returns will the economy start to move. This entails setting targets and devising strategies that may not yield instant dividends, but will provide light at the end of the tunnel. No such initiatives were visible in the budget vis--vis solving the energy quagmire, reviving public sector companies (as already mentioned above), improving wealth creation and savings, documenting areas that have done well in the past two to three years and in creating meaningful partnerships with the private sector to create governance efficiencies. Instead of indulging in a detailed presentation of mere numbers, if the focus could have been on giving people hope and a sense of belief in the competence of their government to deliver, the budgetary exercise could actually have become quite effective and exciting n The writer is an entrepreneur and an economic analyst. Email: kamalmannoo@hotmail.com.