Whither shared austerity?
SHARED austerity, also known as belt tightening demands, has a long history in preach and in practice. During economic recession, governments attempt to economise the use of scarce resources by rationing demands.
No doubt, the world has witnessed enviable economic growth over the decades. But the recent global meltdown has already begun to threaten the socio-economic and political stability. Ipso facto bailing out has begun, demanding huge amount of resources from the exchequer.
Since there is, compellingly, a competing demand from various sectors, the crisis generated has forced governments to clip "unproductive" and "unnecessary" expenses.
We should recollect that shared austerity was also an appeal in our First Five Year Plan document (1973-78): "To accomplish the above objectives (planned development for growth with equality), it is essential that people have confidence in the integrity and the commitment of political leadership to translate word into deeds. Economic development in the context of acute poverty prevailing in Bangladesh requires sacrifices all around. This is particularly true for the elite so that the burden on those at the bottom does not appear to be intolerable."
Finance Minister A.M.A. Muhith has recently disclosed a plan to clip government spending for a while. The reason for the retrenchment is quite understandable: huge requirements of resources in consort with the commitments of electricity generation, infrastructure building, farm subsidy, poverty alleviation, etc.
It is quite logical that a finance minister of a resource-poor country will look for avenues of clipping current or revenue expenditure to transfer the surplus to the productive sectors.
To this end, the plan of the government is to outsource class IV employees under revenue budget in posts falling vacant due to retirement or other reasons; to appoint for the time being any manpower up to 90% of vacant posts at all levels as austerity measures, limiting entertainment expenses and use of luxurious vehicles at all levels, etc.
When I was a student in Australia in the 1980s, I was told that the objective of the then Australian government would be to take all tough measures at the beginning of the tenure and to do just the reverse on the eve of the next election. Perhaps the assumption is that people tend to remember the most recent actions and forget the past sufferings. In a similar way, I would suggest that the government should take all stern measures against unproductive use of resources at the very outset of its tenure.
There is a serious misconception that curtailment of expenses, in terms of reducing new recruitments in government jobs, would have negative impact on public minds. Public services embrace only 20-25 lakhs against the total employment size of about 70 million!
What the government should do is facilitate private sector or self-employment generation by building necessary physical and human infrastructure so that more "green collar jobs" are created in place of white collar jobs.
Let us face a few hard facts: why should some departments of public universities recruit new faces when their existing staff are providing sacrosanct services to the private universities and almost on a full time basis? Till an enquiry is made to this end, recruitment in all the public universities should be banned for six months or so with the proviso that only new departments with low intakes should receive special treatments.
Why should the government brood over increasing the salaries of public servants when prices are falling over time? Why should ministers and MPs crave for nice cars when the public suffers due to poor transport? Shared austerity also means that our ministers and MPs lead the plain life of the commoners.
However, the overall motto of shared austerity is to mop up savings required for investment to create employment. But, besides the steps disclosed by the finance minister, a few more may be on board.
First, the government must ensure that savings emerge from the better targeting of social welfare programs, especially focusing on those who need them most. Second, loan providing agencies must impose a stronger requirement for a return on investment in the private sector to maximise the use of the scarce credit. Third, there should be a shift from universal to targeted benefits. Fourth, the projects in the ADP needs a cut-throat review to see that relatively less necessary projects wait on the wings to get approval later.
By and large, if the pains of adjustments are fairly shared across the private, public, and political sectors, the government would continue to get public support in this regard. That shared pain of the recession is at the pinnacle of the shared austerity package.
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