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October 19, 2018

Not much lost yet


October 19, 2018

The tremors from the by-polls may have been mild but should have registered on the PTI’s Richter scale. The loss of Imran Khan’s two seats has conveyed a message of sorts – the votes earlier gained there were in the name of Imran Khan and when he was removed from the ballot local dynamics took over and translated into a different preference.

The loss must also point towards another, more serious, connotation: the people of those two constituencies – one in Bannu, and the other in Lahore – think differently about Imran Khan now since he has been in power. Or, of his governance which did not turn out how it was expected to. The latter is what should be most troubling to the party; the former will lull them to sleep.

So what did Imran Khan’s party do wrong? Very little. They just didn’t know the art of selling poison coated in candy. Let me explain. The need for a referral to the IMF must have been a foretold conclusion; Dr Shamshad Akhtar, the interim finance minister, had said as much. There was no other way to bridge the yawning gap between what the state had and what it needed. Regardless of how it got there, and who took it there – that can only make for a riveting political history of Pakistan – the reality beckons to deal with the immediate to keep the nation’s head above the water.

IK’s government couldn’t weave a good story around this imperative. And then there was the promise attached to the charisma of Imran Khan which not only the diaspora but the world was willing to buy and which could have added to the buoyancy. Neither materialised. As one reads the after-shocks, it is apparent that the message or the lack of authenticity in it to woo the commitment of those with real money faltered. Even those sold to the idea of Imran in power needed to see real plans before they would commit their money to it.

So then what is missing? It seems to me that the treatment at the finance HQs of this governmental is still very much incidental and ad hoc – firefighting, if you will. What the investor needs is a clear plan of growth. That isn’t yet ready, or probably still in works. That is keeping investors off – friendly nations, local investors, potential investors and those in love with the idea of Imran in power. Once you get bogged down by figures, you stop being a strategist and become a mechanic. This has been the dilemma of most ministers who have had the finance portfolio. Perhaps the name needs to change from ‘finance’ to ‘economics and finance’ , which will keep the scope detailed to the man-in-charge of his portfolio of responsibilities.

Talk to Asad Umar these days and you will get a lot of these figures which makes a decent guy like him look like an accountant. They say that the epitome of numbers is when they begin to throw out hypotheses and philosophies in thoughts and words. That part in the entire conception of how this economy may recover to growth is missing. For the moment, it is all about balancing numbers.

So what could have been done differently? This must derive from an honest introspection of the results thrown by the by-polls. Because of the distortions that are now structured in the social-economy the lowest strata is the first to be buried deep under when a meltdown begins. Without an escape dragnet, there isn’t any way they will survive. A 46 percent increase to their subsisted existence is a weight too heavy, far more than the 146 percent in comparison for the upper crust which probably doesn’t even look at their monthly bill for gas before paying it off. Those who were most impacted returned the favour to the PTI in the by-polls.

This remains a highly sensitised social milieu where lifeline users must be compensated by nuanced policy choices. Any increase in electric tariffs in the coming days must save this segment from the wrath. Lifeline users aside, the tariff must progressively graduate upwards to make the numbers right. Only the right economics will deliver the right political ends.

But why must there be losses of this order in the first place? This moves us into the till-now unspecified territories of policy and governance under the PTI. This is where most attention is required. A financial policy which will have two routes: one to sustainability, second to growth; one to balancing numbers, other to devising a growth strategy. Both need equal focus but the latter especially is policy-centred. An economy-triggering policy which must include agriculture, industry, water, energy, trade, IT and minerals – all knead together to activate the entire spectrum of economy. An infrastructure policy which can play its enabling role.

Power has been the most popular politico-economic recourse of previous governments to tend to the sensitivity of electricity shortages for both domestic and industrial users. This resulted in an open-season for laissez faire engagement with rental and independent power providers at terms highly profitable to them. We pay them even when they are idle. That there was associated sleaze goes without saying. The nation and its already impoverished people are the ones who end up paying for such graft. Not of the PTI’s doing but the baggage they must resolve to keep us from sinking.

Even when thousands of megawatts were being added, no thought was given to enhance the transmission capacity or institute an incorruptible distribution and revenue collection mechanism. Such incomplete conception of what we undertake ends up being the bane that takes us down. As a result we have unutilised capacity because we cannot either buy it for lack of funds, or transmit it for lack of capacity in the system. A policy to review such terms of engagement must take imminence.

The nine SEZs on CPEC will need water and electricity and gas and we haven’t done anything about it even as we continue to ask for more dollars from China under CPEC – and the IMF – without a possible gainful use for those to return profitability. Soon the mountain of debt will bury us under even as our deficits are bridged. This is a vicious cycle. Let there be a fifteen-year plan approved by parliament on how this country will finally become and remain buoyant without recourse to more borrowing. Without it, the entire exercise is only about firefighting.

The PTI and its leadership are caught in a double bind. The challenges have never been greater and the hopes attached to their induction in power even larger. They have in their years on the political sidelines charted for themselves a code which sets the bar of efficiency far higher than what this make-do political culture and its affiliated consequences can offer. Even as they clean the mess they inherit, the political realities in which they must function hold different standards.

Preference to the underdog in this complex socio-political culture must be their foremost objective. Let those who have plundered pay back the most. Nuance in policy will help them serve long and navigate this minefield better.

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