Daily Times

Pakistan is a country in turmoil, plagued by numerous social and economic issues. The economic policies pursued by the previous government left the country in a balance- of-payments crisis, a record high debt, and a currency at one of it’s highest levels of devaluation.

Such dismal performance led to much criticism of the fairly new government from various corners of the society, which resulted in an ongoing debate between pro- and anti- government factions of whether the government had rightly delivered as to what it had promised. More than the criticism, the argument is flawed. Is it possible for the leadership of a country as turbulent as ours, to realistically deliver result-oriented outcomes in as little as hundred days? Yet, to expect results, and demonize them for failing to uphold the promise of delivering a ‘Naya’ Pakistan, does not.

However, what does justify criticism is the very fact of promising to deliver within the first hundred days. Given the milieu of Pakistan’s socio-economic condition, rendering the claim to project visible difference is as absurd as the measures that have been taken to solve Pakistan’s balance-of-payments crisis. The issues of Pakistan are deep-rooted and go well beyond economic mismanagement. The challenges arise from an intricate mix of social, institutional, political and economic shortcomings, whose repercussions are felt starkly in the form of a degenerating economy, transcending into a relapsing society. Though Pakistan is still far off from the scenario equivalent to what triggered the Arab Spring in the Middle East, yet we are well on our way there.

In the case of PTI-led government, we have both an inexperienced Prime Minister and an inexperienced core team at the helm of affairs. While there is no doubting their intent to sincerely deliver, the competence to do so does leave a question mark given the approach that is being employed

Thereby, in order for the government to initiate a reversal of the trajectory we have embarked upon, it is pertinent to not only enact macro-economic measures but explore causes which benefit from micro-level policies. The current fiasco that we are in arises from the gap between the government’s earning – primarily reflected by the GDP, – and their spending. Growth happens with enterprise. Based on in-depth reports by leading global think tanks, up to 90 percent of growth in GDP is spurred by decision making at the enterprise level, not at the state level. And this is where we have failed, and are perpetually failing, more rapidly than ever before. While the Prime Minister and his team may feel that they can strong-arm the economy into rectifying itself, the mechanisms employed have led to further aggravation of the economic situation by the loss of investor confidence, leading not just to a decline in the influx of foreign direct investment, but also an increase in the shift of local investment to overseas platforms.

If we revisit history, we can witness that Bhutto’s nationalization broke some of the 22 families, not just financially, but also in body and spirit. While there are numerous arguments that can rightly demonstrate as to why the policy of nationalization failed economically, one of the major setback was the loss of urge to invest in Pakistan by many of Pakistan’s top industrialists. Many shiftedd productions to other countries, or self-imposed a moratorium on new projects. Today, Imran Khan may not be undertaking the policy of nationalization, but his mechanisms to counter corruption has again instilled caution and anxiety in the business community.

There is no denying that the presence of widespread corruption, and rent-seeking behavior has hampered efforts aimed at promoting sustainable and inclusive growth, but the National Accountability Bureau (NAB), by operating brashly, rather than working in the backdrop, has created an environment of terror and hostility. When closely observed, there are numerous flaws in its ordinance, which warrant abusive and unsupervised authority. And of course, there is the presence of politicization which renders it a tool of employing political victimization by those in power. Such practices only tend to dissuade businesses, and create mistrust between political factions. The government needs to address the systematic gaps which have allowed delinquents the liberty to indulge in malpractices, for even the application of a corrective mechanism needs a proper system in order to assist these changes, and support them to effectuate a result.

What we need today is a business enabling environment, which signals trust and confidence, and creates avenues for growth and participation. While the Finance Minister deliberates with his team of economic advisors, the Prime Minister needs to invest in systemic development, which employs an objective yet humanist approach. Our country’s economic downturn is manifested due to lack of development on numerous institutional and organizational fronts that encompass trade and investment mechanisms, excessive informality, financial sector development and inclusivity, enterprise growth, taxation, commercial law, and infrastructure.

While a hundred days may not be enough to demonstrate, but in this day and age of rapidly evolving economies, a year of ill-enacted policies can have disastrous effects which may take years to undo. With the turn of the year the government needs to efficiently, and effectively re-evaluate its policies, and the Prime Minister needs to restructure the core team surrounding him. When the leader is inexperienced, it is pertinent for those surrounding him not to be, or vice versa. In the case of PTI-led government, we have both an inexperienced Prime Minister and an inexperienced core team at the helm of affairs. While there is no doubting their intent to sincerely deliver, the competence to do so does leave a question mark given the approach that is being employed.

The writer has worked as an Economic Advisor for the Ministry of Economic Development in Canada, and for the United Nations Development Programme in Jordan

Published in Daily Times, January 10^th 2019.