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June 14, 2019

Fighting fear

Opinion

June 14, 2019

At a recent deliberation of a group of opinion-makers and thought-leaders – many with experience in governance and policy formulation – there emerged a consensus that the PTI government had ceded significant space to influence outside the democratic process. That the direction the government took on most issues of import carried dominant input from the un-elected and the non-political. That it was an aberration even if premised on obvious inadequacies in the government which must be rectified to restore trust of the larger segments of society in the political process and in the PTI’s ability to lead the nation.

There shouldn’t be a reason why the PTI must fail the test. Like most other political parties and their leaderships, there is always a first time that a party will come in power and learn the ropes on governance and policy formulation. But also there will be present in its midst practitioners who will have had previous experience from other political platforms. In that sense, the PTI wasn’t unique but some critical decisions in the initial days and some crucial appointments in key areas left a lot to desire and complicated its subsequent performance in power. This has tended to weigh heavy on the PTI’s conscience.

In governance, in policy direction or lack of it, and on the economic front, many decisions of the government were misplaced and based on incomplete deliberation and had to be withdrawn as soon as those were announced. With the government unable to move on any front except pursuing the allegedly corrupt, governance met an impasse. The systems stood paralysed and the economy tanked in no time. This translated into an incompetent government which, save few areas in foreign policy, betrayed a lack of understanding to work the system. Foreign policy too has levelled to a point of inconsequence.

As storms gathered both inside and outside the country, it became a harrowing concern whether the state may be irreparable damaged. These fears by the stakeholders in the power equation and the larger society urged a review. It resulted in a wholesale replacement of the economic team some of whom had antecedents relating them to previous governments. This cast even greater aspersions on this government’s authority and indeed if it was making its own decisions. And even though such discursive argument is presented by vested interests opposed to the government, there is sufficient cause to worry at the political and economic consequences for its lack of purpose and objectivity.

Economics is already a hard-core subject of technicalities with little heart. When out of political hands it becomes more so because the need for empathy even as an electoral compulsion doesn’t exist. Hence the politics of the economy begins to take a backseat. Resort to the IMF further hardens the canvas on which it shall play out; under a team which is already being touted as henchmen of sorts. That dulls any prospects of miraculous relief to the common man. Instead the relief only goes out as lifeline subsistence against the need for employment opportunities and better wages in a growing economy. Conversely, regressive taxation, higher cost of money and a lack of imagination in restarting economy only means most will bide time for better days even as the economy continues to shrink around them. The IMF will happily subscribe to such sedate strategy which can keep macroeconomic indicators manageable, hence stable.

It is thus that this government has bound itself under heavy restraints for the foreseeable future. Yet there must lie opportunity in every adversity. Restructuring and reforming could be one such recourse. The IMF imposes a review periodically when an economy is under its care and deems such resort essential. The government could actually use the opportunity for some real-time review to restructure. To begin with PSEs like the Steel Mills, PIA, and the Railways are a known hole bleeding some Rs1200-1300 billion per annum. It’s time to plug this hole. It may be time for Imran Khan and his ‘apolitical’ economic team to finally call an end to such profuse waste of precious resource on these sick units.

One, it isn’t a strategic necessity to keep such gaping holes in the economy under governmental control because of their envisioned use in moving men and material in war – that can be arrogated with slight contractual tweaking when handing them into more sensitive care. Two, we need to turn those into productive units so that they can contribute to the economy. PIA needs to be either fully privatized or turned into a public-private enterprise in private hands so that it can turn productive. Any claims of recovery are a chimera meant to keep managements in place. It is a sick unit and cannot be recovered till restructured. Weighed down by its own load it will only keep grounded.

Political parties like the PPP and the MQM have turned these industrial units into parking spots for their loyalists. They are the first to the fore in striking against any such attempt at privatizing, despite the cost to the nation. It is time to call this bluff and do what is right – shed them. As a principle, governments don’t run businesses. It might need special courage but at a political cost. It is time to test those waters and fight the fear of losing the next election and some attendant unpopularity. The IMF years are a good ruse for such recourse.

Next is the energy sector. No one will wince if the energy sector is reviewed for eschewing what’s non-productive, overpriced or has run the course of its contract and needs to be shed. Most projects were negotiated from a position of desperation and are heavily skewed in favour of the businesses. Some may be renegotiated or short-closed even at a cost if long-term savings can be made. Tax regimes and reform must be sewed into the amnesty scheme on offer, and kept on till the final date of filing tax returns for the current financial year. However, it will need a greatly more positive pulse to goad more people to avail of the flexibility.

The people are already taxed out of any holdings to offer more. Some balancing may be in order for those on the line. Others who can and must contribute have the means to keep the state at bay. They will need to be personally approached for cooperation in this hour of need; a la Shaukat Khanum and NAMAL. Greater humaneness and comfort woven into the process will appeal to the public. Without these nuances, it will remain a losing cause. Documentation and revenue generation go hand-in-hand but it must be a friendlier and forgiving process. Moralising money is anathematic. It is best to work it with care and pull it out of its fears.

The PTI’s latest budget recognizes some of those entrenched distortions. That’s encouraging. But reforming, restructuring and documenting are the real change, if effected. The IMF years provide that necessary pause where these can be rung in with some bold initiatives and political will. If this is all that IK will do over most of his tenure he would have done this country a far greater favour than winning it the ICC World Cup.

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