Budget imperative

We have run the country without a new budget for the last four months. This has already cost the economy dearly, but failure to introduce a new budget will now raise questions about the legitimacy of our political parties and their leaders. The Finance Ministry has already warned that it will not be in a position to pay for the salaries of civil servants and for essential services after another month unless new expenses are sanctioned through a new budget. It will be a grave mistake to treat the ministry´s warnings as a bluff.



The ministry is critically strained as it has already spent the money it was authorized to by the Special Budget introduced in July for lack of the full budget. The Special Budget allows the ministry to spend only an amount equal to one-third of the actual expenses of last year.



That civil servants may not get their salaries for next month sounds alarming, as it truly is, but no less perilous is the fact that the government has not been able to spend money meant for development activities. Under the Special Budget, the government cannot award annual contracts for development projects, and this has virtually halted public works construction and other development activities. In a country marred by dearth of infrastructure and public services, halt in development activities is nothing less than a crime.



There is now growing evidence that the absence of a full budget is beginning to have a much wider impact than earlier thought. Many businesses are postponing key decisions because they are not sure about the tax structure the new budget will propose. The government could have changed tax rates and influenced the pattern of imports, consumption and even production. However, this tool now remains simply unavailable in the absence of a new budget.



Politicians must understand the wider ramifications of the lack of a full budget and should realize how this is gradually eroding their own legitimacy. Their differences over introducing a full budget, even if they are legitimate, will be seen by the public as nothing more than petty politics. People will forgive, or at least tolerate, their meaningless squabbles on almost everything so long as they don´t affect day-to-day life.



But when civil servants don´t get paid after a month’s hard work, when development work in remote villages stalls or gets frozen altogether for months, and businesses lose confidence about the future, the situation becomes pretty serious and sooner or later people are going to hold the politicians to account for their collective failure. If the political parties cannot agree to give the country a new government, they must at least agree to give the country a proper budget so that the economy does not become hostage to their endless bickering.

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