Populism: Exchequer is not a cookie jar

EDITORIAL: The virtue of giving has infinite dimensions and Pakistan, in general and its economic capital, Karachi, in particular is blessed with individuals and entities whose conduct is strongly characterized by their commitment to philanthropy.

This spirit of giving deserved to be acknowledged and honoured and K-Electric (KE), did just that when it held an investiture ceremony to give away awards to an impressive number of philanthropic organisations of Karachi (38) for their ‘outstanding contributions to the socio-economic progress of the city.’ Some, including the Lady Dufferin Hospital, pre-date the Partition while some were set up by funds made available by foreign nationals, for example, LRBT (Layton Rahmatulla Benevolent Trust). KE’s acknowledgement of the service to the people by these entities must therefore be appreciated and endorsed.

The Stanford Social Innovation Review has estimated that Pakistanis contribute more than one percent of Gross Domestic Product (GDP) to charity or over 2 billion dollars annually, which may be an underestimation as the Review further noted in 2018 that the majority of donations bypass organisations by going directly to individuals and suggested that “to target this incredible generosity for the most impact, civil society organisations must build trust.” This was endorsed by the Pakistan Centre for Philanthropy.

Prime Minister Imran Khan while setting up the first Shaukat Khanum Cancer Hospital (SKCH) for cancer patients in Lahore where the poor were to be treated free of charge, repeatedly endorsed the view that Pakistanis, resident in or outside the country, are one of the most generous people globally. This is borne out by the fact that the award winning 38 specific philanthropic organisations run by the private sector are not amongst the top 15 charity organisations in Pakistan which indicates that the spirit of giving abounds and thrives within the country.

The top 15 are as follows: Transparent Hands Trust, Edhi Foundation, SKCH, Chhipa Welfare Association, Aurat Foundation, Shahid Afridi Foundation, Ansar Burney Trust, Darul Sukun, Minhaj Welfare Foundation, Aga Khan Foundation, Al Khidmat Foundation, Ehsaas, Fatimid Foundation and Fauji Foundation. It is relevant to note that charitable organisations have been in the forefront to provide assistance in the event of natural disasters (earthquakes and floods); and more recently, during the Covid-19-related lockdown local charities played a pivotal role in stemming the economic burden on low income groups through donating rations and medical assistance.

There is no doubt that these entities have enabled thousands of families to meet their kitchen budgets as well as their health costs and this has been over and above the cash disbursements that began in 2008 under the Benazir Income Support Programme by the then government — a programme which began with a small amount of cash disbursements to a small number of beneficiaries, steadily expanding into more beneficiaries over time, as well as enhancement of the scope of the programme to include education and business loans with 260 billion rupees budgeted under this head in the current year.

The PTI administration has expanded the scope of government largesse, from the taxpayers’ money, even further by setting up panahgahs which can be supported as the food available in these limited number of panahgahs is largely from private donations though one would have hoped that a few of these panahgahs had been dedicated to battered women and children.

However, the cheap to free credit to the poor and vulnerable for housing/business loans, etc., cannot be supported even if one assumes that all the loans translate into output (an unlikely scenario) given the fact that these would initially inject more money into the economy without a commensurate rise in output — a highly inflationary policy which is untenable given the high rate of inflation today.

The envisaged ration card scheme for essentials to minimise the impact of inflation on the general public though helpful but is not the right way to checkmate inflation. The government would be well advised to contain its own massive rise in current expenditure (from around 4.3 trillion rupees it inherited in 2018 to over 7.5 trillion rupees today after the relief package of 28 February), which is having severe inflationary implications.

Not only the government is required to generously acknowledge the significance of the contributions these charities have been making, it should also work in tandem with them instead of going it alone, in order to ensure greater effectiveness and judicious utlisation of funds. The government must not lose sight of the fact that the exchequer is not a cookie jar.

Copyright Business Recorder, 2022