The writer is a political economist with a PhD from Berkeley.
OUR long desire to emulate the Asian Tigers’ progress remains unsuccessful so far, reflecting an inability to craft a viable development strategy. So our budgets too, like the new PTI one, don’t reflect an underpinning grand strategy to upgrade the economy, but are more collections of small ideas to reward key political and economic allies for short-term gains. They fail to give sustainable progress and often cause fiscal and current account deficits.
East Asian development strategies targeted higher-end industries, especially export-oriented ones. States supported local entrepreneurs on R&D, marketing and technical issues to penetrate these industries. But support was tied to technical upgrading and exports growth by firms. This not only helped companies grow, it also ensured rapid national progress. Such measures are missing from the budget. As with the ones over the decades, it provides no clarity on likely progress on the key criteria that budget measures should be rigorously tested against: upping tax and exports revenues, upgrading the economy technically and upping social equity.