Greece and Pakistan: mirroring fiscal failure

Greece and Pakistan: mirroring fiscal failure
A glance at the fiscal crisis that Greece is going through might find parallels with the fiscal situation at home.
Except that being a part of the EU gives the country added saviours in the EU Commission and the European Central Bank besides the IMF. But if the "troika" of the IMF, ECB and EU Commission is not pleased with the progress of the countrys austerity measures, it may even lose the prestigious membership which allows it the blocs assistance in the first place.
In May last year, Greece was granted a €110 billion bailout package to be released under condition of strict austerity measures. Only after a review of economic reforms will the troika team decide if the fifth tranche of €12 billion should be given to the country as part of a bailout package. Tranches and approval from the Fund; sounds familiar, eh?
Greeces austerity measures focus on pension reforms and pay cuts for public employees, as well as on tax reforms and privatisation - the latter particularly being areas that Pakistans economic managers have had to struggle with as well.
Not unlike Pakistan, tax evasion is a huge problem in Greece, and one that the country intends to clamp down on to bring some fiscal discipline. At the same time, the country is also looking to increase VAT rates, as well as raise indirect taxes to pump up their fiscal position.
Unsurprisingly, antagonistic reactions from the Greek conservative opposition party and angry public protests ensued against the tough measures. Trust the populist agenda to surface in such circumstances regardless of a countrys long-term interests, whether the country is Greece or Pakistan.
The Greek government is also eyeing another option which Pakistani policymakers have thought through as well - privatisation of state owned enterprises.
With the intent of bringing down the budget deficit from a hefty 10.5 percent of GDP, the government is banking on raising €50 billion from privatisation proceeds from the sale of stakes in some state organisations, including a telecom company, water and sewerage company and a power company.
Dubbed a yard sale by some in the international media, the privatisation has become a point of controversy, particularly because of skepticism regarding the countrys ability to conduct the procedure. Talks about the possibility of an international agency running the divestments are doing the rounds in the international media.
The Greeks appear to be as much in troubled waters as policymakers here at home. Whether either one will ultimately learn from the other the ways of acting with fiscal resolve, or whether both will be protagonists in a story of fiscal woes remains to be seen.