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Looking for the grey


July 30, 2019

July 25 marked the first anniversary of the July 2018 general elections. While the ruling party celebrated the day as ‘Thanksgiving Day’, the opposition parties, to protest against government policies, marked it as a ‘Black Day.

Living in a politically polarized society, we tend to forget that there are quite a few shades of gray between white and black. Let us try to find that grey through a quick assessment of the performance of both the ruling party and the opposition in the last one year.

Let us begin with assessing the performance of the federal government first. I am using three indicators – ‘diagnosis’, ‘prescription’, and ‘implementation’ to assess how well the PTI dealt with the economic, social sector development and foreign relations fronts in its first year of power.

The economy seems to be the single largest issue under the government’s radar during last year. The government rightly diagnosed that rupee (fiscal) deficit, dollar (current account) deficit, trade imbalance, overvalued exchange rate, energy circular debt, loss-making public-sector enterprises, undocumented economy (which may facilitate money laundering and terrorism financing) and low tax base were some of the challenges facing Pakistan’s economy.

A quick fix was to approach friendly countries for balance of payments support and for investment, which the government managed through its successful economic diplomacy. A sustained solution was carrying out economic structural reforms, without or within an IMF programme. Whether and if ‘yes’, then ‘when’ to go to the IMF remained a huge mystery for most part of the year though. That is where the government seemed lost on its choice of prescription.

Eventually after entering into an IMF programme, the government is giving very clear signals that it wants to use the programme to address the chronic issues of Pakistan’s economy rather than merely securing the loan. How successfully it would implement this programme needs to be seen. For the time being, it can be said that, despite some indecisiveness about the IMF that created economic uncertainty, the government is on the right track to achieve macroeconomic stability.

Here it is pertinent to mention that achieving macroeconomic stability through fiscal consolidation always has some adverse impacts on common people at the micro level. These adverse effects get aggravated in the absence of a parallel strategy that may protect and insulate the populace from the pain of economic structural adjustment.

So how did the government perform on protecting and insulating the people? PM Khan wants to turn Pakistan into a social welfare state where health, education, nutrition, shelter and livelihoods would be accessible to everyone. To achieve his vision, he has created a dedicated ministry of poverty eradication and social protection which would be implementing an umbrella programme for social protection called ‘Ehsaas’ (compassion). This programme, once rolled out and effectively implemented, may prove the federal government’s signature social uplift programme. However, this will happen in the second year of the PTI coming into power.

During their first year in power, neither the federal government nor the provincial governments (including the PPP-led Sindh government) has much to show on social development front which in turn is making the government’s efforts for economic reforms unpopular.

On the foreign policy front, polycentric power centres in Pakistan have seemed to learn (diagnosis) that they must be on one page to earn respect from the international community. The government also realized the potential of economic diplomacy which paid really well in terms of central bank deposits for balance of payments, and provision for supply of energy on deferred payments. Retaining a non-aligned status in the ongoing Gulf dispute, reaffirming ties with China, and the ice-breaker with the US (with the help of a friendly country) are examples of PM Khan’s success on the diplomatic front during the last one year. Neglecting European partners remained a visible deficiency in our foreign policy last year; as reminder, the German chancellor was one of the first to invite PM Khan for an official visit.

Initially, the government started with joint institutionalized follow-up of MOUs that were being signed between the PM and his counterparts. However, regular meetings of those joint working groups, and high-level steering councils are not taking place. This may disappoint our potential foreign partners and the country may not get the full benefit of successful economic diplomacy.

To conclude, one may say that on the economic and foreign relations fronts, the government is on track so far. However, it still needs to do some extra work to materialize its social uplift plans, without which it cannot claim any success on economic front.

Finally, let us talk about the performance of opposition parties in the last one year. In any parliamentary democracy, the opposition is the ‘government in waiting’. Ideally, opposition parties should have their shadow cabinets and come up with alternative doable policies when they disagree with the government. Unfortunately, none of our political parties in their opposition days has ever followed this practice. This means that, like previous parties in opposition (including the PTI), the performance of the current opposition parties is also below the mark.

In this scenario, it is difficult to see a bright white or a pitch black. I think we should try to find the grey and then make a collective effort to brighten it.

The writer heads the Sustainable Development Policy Institute. Twitter: @abidsuleri