Development hijacked by political expediency

EDITORIAL: If there were any hopes that the PML-N-led coalition government would break from tradition and adopt a more considered, strategic approach to development spending, they remain unfulfilled. As recently released data by the Planning Commission shows, in the first eight months of the fiscal year, funds allocated for core Public Sector Development Programme (PSDP) projects remained largely under-utilised, with spending stagnating at just 26 percent of the total Rs1.1 trillion allocation – amounting to Rs277 billion.

Meanwhile, as in previous years, a significant portion of the development budget continued to be redirected towards the Sustainable Development Achievement Programme (SAP), better known as the discretionary funds allocated to parliamentarians to be spent on schemes in their constituencies.

In stark contrast to the sluggish spending on crucial national development projects, 96 percent of the funds allocated for parliamentarians’ schemes – approximately Rs48.3 billion – were released within weeks after the allocation for this category was doubled in January from Rs25 billion to a little over Rs50 billion.

By the end of February, 72 percent of these funds had already been utilised. It is worth noting that the funds disbursed for the SAP far exceeded the finance ministry’s prescribed limits for the first three quarters of the fiscal year, raising serious concerns about compliance with financial protocols and the government’s ability to maintain fiscal discipline in an already strained economic environment.

This blatant disregard for fiscal responsibility reflects a long-standing pattern among successive governments, which have routinely relied on discretionary allocations to secure the loyalty of legislators and coalition partners, often with minimal oversight or scrutiny of how these funds are utilised.

Unlike core PSDP projects, which must undergo rigorous approval and allocation processes, SAP projects face no such requirements, inevitably raising apprehensions regarding misuse of funds, potential for corruption and inefficiency. As a result, the country’s limited resources are funneled into politically motivated projects, sidelining essential development priorities and weakening the foundations of sustainable growth and efficient public service delivery.

Any analysis of Pakistan’s development trajectory would reveal not only a stark decline in the PSDP – from 1.7 percent of the GDP in 2013-14 to a mere 0.6 percent in 2024-25 – it also tells a story of a failing development agenda that has struggled to fuel economic growth.

Incomplete projects, dwindling allocations across various sectors, persistent cost and time overruns, and a lack of accountability and transparency in budget utilisation have become entrenched issues. As detailed in an IMF report last year, Pakistan requires Rs10.7 trillion just to complete schemes left unfinished for decades. Yet despite this alarming reality, political expediency continues to take precedence over the country’s overarching development goals.

While the substantial disbursal of funds for parliamentarians’ schemes may lead to short-term benefits in selected constituencies, the broader picture will remain bleak, with another year passing without achieving key development targets, and depriving the economy of the long-term advantages that a well-planned development agenda brings: increased productivity, enhanced trade, and improved investment opportunities.

The fact of the matter is that at a time of deep economic crunch when the economy is facing a massive revenue shortfall of Rs600 billion so far this fiscal year, every development initiative must clearly align with and demonstrably contribute to the country’s broader economic goals.

This focus on highly localised development, mainly financed by debt and primarily driven by political considerations, results in gross misallocation of scarce resources that could otherwise be directed towards strategic, growth-oriented investments.

Our rulers must realise that this style of governance, where political appeasement trumps economic pragmatism, is unsustainable, especially since dependence on foreign bailouts can no longer be relied upon as a solution.

Copyright Business Recorder, 2025