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October 20, 2019

What the economy needs


October 20, 2019

The economy is neither a contest of bat and ball nor one of lies or – to be politically correct – ‘U-turns’, which create uncertainty and instability in any economy.

Economic development is a function of sound, stable and consistent policies. But the PTI government has made uncertainty the only certain thing in town by changing its economic policies at regular intervals. The government has flip-flopped on almost every economic policy decision, starting from going to the IMF to the stringent requirement of CNIC to purchase goods. As a result, business confidence has totally eroded.

The economy isn’t just about numbers; what really drives it is sentiment. If confidence is lost, then no policy works. Things have become so fractured; the COAS who is supposed to be attending to the gravest security challenges in the region had to meet trade and business leaders for hours to calm them down. This shows the gravity of the current economic and governance crises.

Pakistan became the centre of world attention after the successful launch of CPEC. However, positive sentiments about the economy in the post-CPEC environment were crushed by blame-games, incompetence, poor governance and the U-turn policies of the Khan government. The blame for that should rest where it belongs – the PM Office. As a result, even the worst critics of the PML-N and most vocal supporters of the PTI are now publicly apologizing for misleading the nation.

The fact that no one can dispute is that Khan was not prepared at all when he was offered the government on a plate. Thus, all the campaign promises of having a team of experts were nothing but empty talk. Economic development and effective governance require taking responsibility rather than outsourcing responsibilities and blaming others. Mr Khan and his group of close friends are good at shaping narratives. Whenever they are asked about their performance on any issue, they have hammered on a single point: ‘how dare you ask us a question, we are ‘honest’, our predecessors were ‘corrupt’ and ‘No NRO’.

In other words, they had a one-size-fits-all strategy for economy, governance and foreign policy. They hoped that maligning the PML-N leadership every day would bring stability and prosperity in Pakistan. The fact is that the PTI is not the first government that had to make difficult choices. The PML-N government did not inherit a booming economy in 2013. In fact, the country was beset with chaos, what with power outages and a terrible law and security situation. Pakistan was listed one of the most dangerous countries in the world in 2013 but the PML-N turned the table with its experience and vision by looking into the future and not playing any blame-games. It neither created panic in the economy nor in politics. It tried to adopt an inclusive approach and create a consensus on all important national issues.

As a result, economic growth steadily rose in 2013-2018 from 3 percent to 5.8 percent, inflation remained historically low, Pakistan’s international credit rating improved, and CPEC brought more than $28.5 billion investment in infrastructure projects in a short span of three years. In January 2018, the World Bank projected that Pakistan’s economy was set to achieve a 6 percent growth rate in 2019 and 2020. But due to Mr Khan’s poor policies and erratic behaviour, Pakistan is now facing one of its worst economic slowdowns in recent years.

According to an SBP report, since the current government came into power economic growth went south while inflation has been moving north. In other words, there is total disarray in terms of the direction of the economy. Debt stock has increased at one of the highest rates in Pakistan’s history under the PTI government. Since the PML-N government ended, debt has increased by $16 billion. Large-scale manufacturing as well as agriculture are experiencing negative growth; the automobile sector is shrinking at an unprecedented rate. As a result, unemployment is rising fast.

Governance too is in total disarray, especially in Punjab. Bureaucrats – including police IGs are replaced frequently, based on the personal likes and dislikes of the PM and his friends. Dengue has spread across many districts of Punjab and the government does not seem to have a clue on how to handle the situation. Cancer patients are deprived of free essential medicines that had been provided by the previous PML-N government. Medicine prices in general have skyrocketed. Education budgets have been cut drastically, jeopardising the future of our youth.

To cover up incompetence, Mr Khan has opted for political victimization of anyone who criticizes his policies. The media is under the worst censorship; and members of the opposition are thrown in jail on flimsy cases. As mentioned earlier, for Mr Khan the solution to every problem is the following: vilification of his political opponents and glorification of every U-turn he takes.

Pakistan’s economy cannot afford such immaturity and incompetence at such high levels. Pakistan and its economy need a fresh start. Confidence needs to be rebuilt and the political crisis has to be withered away. This is not possible under Khan, who has proven to be a most polarizing figure in Pakistani politics. He spews hatred against all his opponents. The time demands bridging the gap and building a broader consensus across all key stakeholders of the country. Mr Khan didn’t even have the courtesy to bring the opposition on board when India attacked Pakistan earlier this year and even after the August 5 Modi action in Kashmir.

Therefore, it is important that new elections are called and the people of Pakistan given a chance to resolve the current crisis through the power of their vote. General MacArthur once said the history of failure in wars can be summed up in two words: ‘too late’; too late in comprehending the deadly danger. If the current capital and brain drain from country continues, there is a good chance that the economy might become irreparable.

Given the challenges Pakistan is facing, we need reforms in line with the approach of Chinese leader Deng Xiaoping. The first and foremost requirement is building political consensus and stability. But political stability can’t be artificially achieved through silencing dissent; that, in fact, generates more instability. Stability has to be organically built from the bottom. This requires developing a minimum consensus on the broader issues faced in the realm of economy, politics, democracy and human rights.

As Pakistanis it is our moral, constitutional and national duty to bring unity among ourselves to address the grave challenges we are facing. When the opposition talks about unity, the PTI misinterprets it as the weakness of the opposition. Imran Khan keeps saying that he will not give an NRO. But no one is seeking any NRO from him – nor can he give one to anyone.

The future of Pakistan is at stake at a time when South Asia is in a development race in which we can’t afford to be left out yet again. It is time to think and act instead of becoming victims of indecision. History is watching us.

The writer is an MNA and former minister for interior, planning, development and reforms.

Email: [email protected]

Twitter: @betterpakistan