Standard and Poor’s has lowered Pakistan’s credit rating by one notch from B to B negative. Rating agencies do not share the reasons for these changes. However, it is certain that these are based on multiple factors and reasonably reflect a country’s economic vulnerabilities.
An average reader of the newspaper knows what is happening around. The people at the helm of affairs also know how to fix the issues. It is not due to a lack of expertise, governments all around the world have the best minds and experts to diagnose and cure economic ills.
But it is not all about the economy. In reality economy has a spouse called politics. At times they enjoy their moments of togetherness and produce the best of results, and many a time frequent miscarriages and ordeals are carried out. Voters do not want to pay taxes and politicians do not want to levy the same. Fiscal deficits, burgeoning debts, falling ratings, trade imbalance, weakening purchasing power parity, rising prices, contracting growth, unemployment and much more constitute the economics part.
Pakistan has fragile politics and a weak economy. There are more than the usual definite stakeholders in politics. Since 2007, after the transition to democracy, we have seen how successive governments have been fighting for survival. A political regime not sure of tomorrow cannot think of the day after tomorrow. Economic stability and sustainability is rooted in long term policy initiatives.
With all the right policies in place, Pakistan still needs more than a decade to take off. Education policy cannot yield results in five years’ term nor is it possible to create an ideal business enabling environment in a couple of years. Twenty million out of school children and 30 percent unemployment rate are not small numbers.
To its credit, the government has taken up a number of positive initiatives to overhaul the economy, but it is not all about the economy. Economy and Politics go in tandem. Political temperature is still not subsiding. If the government does not take a leaf from the past, it will move one step forward and two steps backward
Our problems have matured over years. They will go away in years. Desperation and rhetoric will only delay their resolution. Hence, if we intend to move forward, we need to lower the political temperature in the country and prioritize economic issues.
It is not possible that the government imprisons or coerces the opposition ,and then materializes its development agenda. Recently coming into power, they have a fully charged political support battery and an untainted past. They should utilize that base and repute, for policy decisions which require sizeable political will. Presently, it certainly matters who delivers, but in history, it will matter even more who tried their best. Now is the time to put the best solutions to use.
Six months have passed. Time flies. If the government banks upon its economic and other policy agendas, it pretty much has the chance of having favorable outcomes. However, if it goes off track, then there will be competition among the rhetoric of different stakeholders.
Similarly, there is no need to declare success too early. Fundamental economic woes are either same or worsening. What need is there to declare the success of policy initiatives introduced just a month ago. Elections are almost four and half years away, however, government representatives are in the mood for another campaign.
Minister for Railways has launched around two dozen trains, despite the fact that we have not imported a single locomotive or added new coaches to the system in the last year. In a rush to appear a success, on average he has been inaugurating one train every week and certainly suspending the same number on some other route. If railway revenues do not improve, if it continues to eat up huge sums of subsidies, will these political gimmicks stand anywhere?
To conclude, one of the primary factors these ratings depend on is political instability. To its credit, the government has taken up a number of positive initiatives to overhaul the economy, but it is not all about the economy. Economy and Politics go in tandem. Political temperature is still not subsiding. If the government does not take a leaf from the past, it will move one step forward and two steps backward.
The author is a freelance writer
Published in Daily Times, February 8th 2019.