100 days

A 100-day analysis means two things: Are there policy initiatives in place? How is implementation proceeding? To be certain, policy outcomes will take time. The four policy initiatives that I have studied in detail are: economic, health, education and digital. All the four policy initiatives are quite comprehensive and stand on solid grounds. The PTI’s economic policy stands on three pillars: exports, investments and remittances.

Exports: For the first time in our 71-year chequered financial history, our trade deficit crossed $38 billion. For the first time in our 71-year chequered financial history, our exports declined for four consecutive years. For the first time in our 71-year chequered financial history, our current account deficit crossed $18 billion.

In September, Finance Minister Asad Umar identified five export-sector industries: textile, carpets, leather, sporting goods and surgical goods. The same month, the Economic Coordination Committee (ECC) approved a subsidy worth Rs44 billion on gas tariffs for the five export-sector industries. The textile sector – 60 percent of our exports – was also given a reduction in regulatory duty on 82 import items.

In return, the All Pakistan Textile Mills Association (APTMA) is projecting a doubling of their exports in the next five years (with current exports worth around $13 billion). Plus, the government’s move is expected to bring back around 500,000 jobs (in Faisalabad and Multan). Admittedly, a gas subsidy for the export sector is not a sustainable solution; making it globally competitive is. So, a lot more needs to be done.

Investments: The focus here is on three things – non-debt-creating investments; ease of doing business in Pakistan; and lowering the cost of inputs. ExxonMobil (revenue: $237 billion in 2017), the world’s ninth largest company by revenue, is re-opening its office in Pakistan after a 27-year absence. Suzuki Motors Global Chairman Osamu Suzuki is considering a $450 million expansion in Pakistan. Coca Cola (Turkey) plans to invest $200 million.

In October, Dr Sultan Ahmed Al Jaber, head of the Abu Dhabi National Oil Company (Revenue: $60 billion), was in Pakistan evaluating investment opportunities. In addition, the Abu Dhabi Investment Authority (Assets: $828 billion) has also shown interest. Question: how much of this would actually materialise? Answer: Only time will tell.

Remittances: Pakistani workers aboard send back around $20 billion a year through banking channels. According to the International Organization for Migration (IOM), an amount of more than $20 billion arrives in Pakistan through non-banking channels. In an attempt to divert additional billions through banking channels, the government is going all out to identify feasible alternatives. Admittedly, none has so far been identified. This indeed is a tough one because the government is competing head-on with the speed and superior rates of hundi and hawala dealers.

On the anti-money laundering front, for the first time in the FIA’s 43-year history the agency has unearthed the biggest money laundering scam, not just in the history of Pakistan but in the history of this region. On November 12, Special Assistant to the PM on Accountability Shahzad Akbar announced that the details of money laundering worth Rs700 billion have been traced in 10 countries. Shahzad Akbar also declared that the process to freeze the accounts of big crocodiles has been started.

Alarmingly, based on a random survey, business activity in Islamabad has slowed down by around 30 percent. To be certain, the high volatility in the rupee-dollar parity is bad for business. The State Bank of Pakistan must establish mechanisms to preempt any such incidence. Yes, sector-wise policy initiatives are in place, implementation is in process and policy outcomes will take time. Yes, there is no room for complacency and a lot more needs to be done.

The writer is the government’s spokesperson on economy and energy issues.

Email: farrukh15@hotmail.com. Twitter: @saleemfarrukh