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April 17, 2019

Time is a bird


April 17, 2019

It’s the economy after all. Let’s begin with the finance minister’s announcement that from now onwards, things will start moving. And that Pakistan has decided to sign a loan facility with the IMF and a staff mission is expected in Islamabad later this month to finalize technical details of the financial programme.

Asad Umar has divided the PTI’s five-year economic plan into three phases. The first few months were of survival, he says. Now is the stabilization phase that “could last for two years and the growth would start from year three”.

Now brace for the hard news. Pakistan has already accepted the IMF’s prescriptions on exchange rate, fiscal deficit, energy, public finance and public-sector entities. All that remains to be done is to conclude various technical tables when the Fund’s team visits Islamabad later this month. The Ogra chief, however, did not wait to throw the real gas bomb. The price of gas will reportedly be raised by 70-80 percent from July 1.

Those who have been critical of PM Khan and Asad Umar for being indecisive on the IMF package can relax. We can even thank the duo for delaying by several months the bitter pill treatment the Fund is so fond of applying. The problem really was with the PTI’s promise to deliver in ninety or hundred days what the constitutional term gave them five years to accomplish. It took the ruling team two hundred days to proceed on international debt management. There remains the other major challenge of configuring how to deliver a credible system of governance.

It appears though that by pursuing a relentless accountability drive, the government is more concerned about downsizing the opposition. It has followed up the ongoing cases with new allegations about the two opposition families having polluted the country’s financial system through massive corruption and money laundering. The PTI wants to deter the opposition from any move to destabilize the coalition arrangements. Offensive defence also helps the government sidestep criticism against its performance having resulted in declining growth, rising inflation and higher unemployment.

Politics is primarily motivated by the pursuit of power and, once achieved, the art of maintaining it. Those in public office must know how to exercise power, without making tall promises. In general, dust awaits those indulging in promising heaven on earth. To his credit, PM Khan has admitted in so many words that his U-turns are a part of the learning curve.

It is normal for the people to observe the ruler’s mien. PM Khan remains undeterred, a little angrier, full of self-belief and prone to expressing views on every subject ranging from the Afghan peace process and elections in India to the auction of lands by the Capital Development Authority – somewhat like hitting the ball all over the field, without scoring runs. Governance is not like smashing a cricket ball. Nor is the economy where every action you take has a reaction. Inaction can lead to worse reaction. As the clock ticks, the required run rate is swelling beyond the economic managers’ reach.

It is also said that the PM is receptive to various ideas and he encourages debate. He probably enjoys in-house battles between the two big ones from southern Punjab, sniping by some against his economic wizard, and the loquacious shaikh. Only he is not always sure which way to go. Pressing issues like an unbearable cost of living, nose-diving share prices or the lack of investments get overlooked.

Time is critical and it flies. If there was a grace period, it has elapsed. The government is under increasing criticism as clamour mounts with each passing month and the opposition parties are getting cocky over the ruling team’s inexperience. Ruling a country is different from two teams playing on equal terms. The government’s job is to hit the ball while the opposition has the right to be in the commentary box.

Among others, the government perhaps needs to recognize that its rhetoric about accountability and preoccupation with recovering stolen billions might have dampened economic activities. PM Khan’s exhortations to dig more dirt on the Sharifs are unlikely to revive investment in the country. Sincerity or honesty can be great assets but retribution per se is not a substitute for sound economic policies. Gen Musharraf understood this quickly and could reap the benefits of his economic realism.

It is depressing to learn about the forecasts of economic growth below three percent. Economists have warned about unemployment numbers resulting from a 50 percent decline in GDP growth. Others have raised alarms over the desperate situation of revenue collection. The PTI government has finally come up with an amnesty scheme to fill state coffers. When it comes to IMF bailouts or tax amnesty schemes, history just keeps repeating itself.

When asked about the poor performance of the government, a supporter of Imran Khan blamed vested interests, including the bureaucracy, being at work to ensure the PTI fails. That sentiment has triggered the big reshuffle of Punjab’s bureaucracy on Monday. The opposition too has amplified its rhetoric by issuing warnings to topple the PTI-led coalition governments. Gossip is rife that the PTI’s mentors are upset with its performance and could bring nuance to their position in the coming months.

As if that were not enough, we come across murmurs about wrapping up the present setup and bring in a presidential system. Those on the opposing side warn that efforts to change the 18th Amendment, or a move away from the parliamentary system, would result in further break-up of the country.

As springs draws to an end, the summer of discontent may not be too far.

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