As the country was already going through the economic crisis but the sudden outbreak of pandemic has further added insult to the injury and it has caused economic despair among all segments of society. All the countries across the globe are facing similar economic crisis, but this current situation can truly prove to be a testing times for the global governments, for how they pull out their nations of these crises. Consequently, Pakistani government has failed to devise pragmatic approach for handling situation during the crisis; however, there is no plan for how would country comes out of these crises in foreseeable future. When the United States was reeling through the Great Depression (1930), president Franklin Delano Roosevelt proposed New Deal which proved to be highly instrumental in not only in pulling US out of Great Depression era but also led country on the unparalleled economic growth, setting country on new heights of developments. On the contrary, present government in Pakistan has no such kind of economic reforms program since economic indicators have seen consistent downturn.
Although, recently published Economic Survey of Pakistan 2020 has projected poor picture of economy for the previous year, most importantly GDP growth rate has sharply declined to negative 0.38 pc primarily due to decline in the agriculture, services and industrial sector respectively. Furthermore, inflation rate has remained more than 11 pc that has crippled capacity of poor people to even afford hearty meal. However, coronavirus is held responsible for failing to achieve economic targets.
Nevertheless, F.D Roosevelt New Deal was chiefly consisted of social welfare programs in which major focus was to uplift lower class hit by great depression. Social Security act was passed to provide assistance to the aged individuals, unemployment insurance, child care, Federal Reserve Account, public health any much more. Consequently, such program proved to be highly effective in expediting economic growth and alleviating poverty. On the contrary, in Khan Administration social security and welfare programs are almost invisible.
In contrast, F.D Roosevelt assumed office when public debt of US was $40.44 billion (equivalent to $673 billion in today’s dollar comparison) and public debt was increased by 150% from the 1933 to 1939 which is fraction of what Pakistan owes today even though Pakistan’s economy is far less vulnerable when compared to the US era of Great Depression of 1930’s and today world is more advanced and more peaceful to achieve economic targets smoothly. Furthermore, we have plenty of successful economic models to embark upon.
Accordingly, US highest office was preceded by president Hoover and economy of US in the end of his presidency was hit by the unprecedented depression. What is more important to note here is F.D Roosevelt’s soon after assumption of US highest office, followed by these circumstances, never blamed previous administration for the economic disaster even though they were from the antagonist party, but his visionary leadership had road map of how US would be made great again. Therefore, he brought in outstanding New Deal Program. However, Roosevelt’s succeeded to bring in positive change within first hundred days.
Nonetheless, F.D Roosevelt followed Keynesian concept of economy which is still highly effective in bringing economy back on the right track. In contrast, PTI led government follows pure capitalistic approach. Keynesian concept emphasizes certain regulation of government in private ownership, increased government spending and maximum reliance on progressive taxation which has proved to be effective in overwhelming poor and rich class gap.
Quite the opposite, current government has very little regulation on the private ownership as it can be witnessed from previous oil and wheat crisis in the country where government was seemed quite incapable to overcome those crises; however, business cartels have shown far more potential to influence government’s decision and they have maintain their monopoly throughout the history. How would be regulation made strong as most of the businesses either explicitly or implicitly owned by sitting members of parliament. Similarly, beside resorting for high government spending, present government has opted for austerity approach-keeping in view burgeoning external debt-but for the long term approach high federal spending is quite effective. Likewise, due to government’s inability to spot wealthy class, hence business tycoons are pampered with tax exemption. Therefore, since long, affluent class either evaded from tax or posed with fractional tax on few declared assets against massive informal assets. Thus, proportional taxation is highly regarded as promising way to invade taxes, but proletariat class has to bear the brunt of this form of taxation.
