Daily Times

Most political analysts before the election were of the view that political engineers of the 2018 elections wanted a hung Parliament. It is always easier to control a coalition government than the majority party government as that of Nawaz Sharif. Now that they’ve had their desired result, Pakistan Tehreek-e-Insaf (PTI) which was the establishment’s favourite, is busy in cobbling a majority not only in the Centre but also in Punjab — the citadel of power. This has forced Imran Khan, who used to loathe the independent candidates referring to them as always up for sale, to woo the very same lot.

Not surprisingly, the job to negotiate with the successful independent candidates and smaller parties has been assigned to Jehangir Tareen and Aleem Khan — the two alleged bankers of PTI. The reports are that some of the independents want upfront payment, at least of the amount they have spent on the elections. In some cases, this election expenditure amount is inflated to make a little profit on the side. Smaller parties, like that of PML-Q want some public office. The PTI has even approached Muttahida Qaumi Movement-Pakistan (MQM-P). Although Imran Khan used to call it the party of criminals, here his supporters say that after MQM-P parted its ways with Altaf Hussain, it was acceptable to both, the establishment and the party, for the purpose of supporting the coalition government.

There are also moves by PML-Q to win over the support of what is being called the forward bloc of the PML-N. If this happens, the Chaudhry’s of Gujrat may ask for a bigger pound of flesh from Imran Khan. While in the opposition, Imran Khan had to only compromise his principles with the establishment to get their support to come to power. Now that he is in the better position to form the government at the Centre and in Punjab, pragmatism will have the better of him. Alas, such is the dynamics of realpolitik.

The actual test of Imran Khan and perhaps his designated Finance Minister, my friend, Asad Umar, would be to arrest the decline in the economy. The major challenge as everybody knows is to control the current account deficit. According to the last government, the current account deficit swelled to $80 billion. We are told that the import bill had soared mainly because of two factors — a hump in the machinery import because of CPEC projects and the rise in oil, gas and palm oil imports. The puzzling question here is, wasn’t China supposed to fund the machinery as a part of the CPEC investment? If that is the case, then how come it is said that we have to pay the amount for the machinery upfront like regular imports? The machinery imported under CPEC had to be financed by the projects they are meant for and that too, over the course of some years. These questions should be asked by the PTI team.

There are also chances of the Chinese companies over-capitalising their projects and particularly, the imported machinery which is going to come from their country. This can only be checked by a vigilant economic team which is not mesmerised by the promise of a $62 billion investment.

Imran Khan had often criticised that the Sharif family was taking commission on these projects, which may not be proved but it can also be exposed by telling the people how much each project has been over-capitalised.

Imran Khan’s team should keep in mind that if anything is privatised, it should not be more than 51 percent so that the profit can be kept within the country, adding to its capital receipts. At present, the remittances of profit by foreign countries and these privatised entities is repatriated, adding to the current account dis-balance

The next important economic challenge before the Imran Khan government is to stop the hemorrhaging of public sector organizations. The PTI manifesto does not talk about the privatisation of these public sector organisations. It promises to first turn around these companies by employing professional management which is not swayed by political demands. This is also an old unsuccessful mantra which we heard in the Ziaul Haq era.

Imran Khan’s team should keep in mind that if anything is privatised, it should not be more than 51 percent so that the profit can be kept within the country, adding to its capital receipts. At present, the remittances of profit by foreign countries and these privatised entities is repatriated, adding to the current account dis-balance.

As stated above, the current challenge is to bridge the current account deficit without going to the IMF. If Imran Khan’s team will be tempted to turn to them, it would have to compromise on many of the subsidies and economic reforms as dictated by the IMF. Not only that, but as the Americans clearly stated that they would not like to bail out Pakistan through the IMF to finance Chinese imports. This means that Imran Khan’s hands will be tied on financial reforms and in trying to bring some equity in the US-Pakistan relations. In any case, Imran Khan has been supported by the establishment with a clear understanding that he will not try to interfere in foreign and national security policy like Nawaz Sharif. And if he does, his fate may not me that different from that of his predecessors.

Here I am tempted to share an anecdote from when Musharraf took over and there was much talk about reforms. In the presence of many oil and gas industry executives, I had told him, “Sir, all governments talk about reforms when they come. While their foot is on the accelerator for quick implementation, there is a heavier bureaucratic foot on the brake so if you think you are going anywhere you are not.”

In the interest of the people of Pakistan, I hope Imran Khan would not let these brakes hold him back.

The writer is the author of What’s wrong with Pakistan? And can be reached at ayazbabar@gmail.com

Published in Daily Times, August 5^th 2018.