Daily Times

I had the opportunity of meeting Mr Shaukat Tarin recently. Pondering upon our discussion and listening to his interviews lately, I could see a pattern emerging. It seemed that Mr Tarin has been sharing the formula for financial stability and growth for Pakistan – Inclusivity and Sustainability.

However, is it truly the antidote to the country’s deteriorating economic health? With two years left in the elections and a trail of unpopular decisions by the PTI government, are we finally on the right track?

For the nay-sayers, let me quote the figures they support the argument with, the debt-to-GDP ratio stands at 87 per cent in the FY 2020, but most will not quote that the global debt-to-GDP ratio has increased by 13 per cent. Not to mention the mounting external debt of $122 billion and the rising import bills, sceptics have broken all hell on the PTI leadership for putting Pakistan in a grave position. But these sceptics will never admit that what truly led to this humongous debt profile or the outrageous import bill is the deliberate efforts by the leaders in the last 30 years to gain personal profits. The agricultural sector was slowly put on the backburner with cotton crop replaced by sugar for personal gains. There was no strategic alternative to the evident food shortages and food imports left to soar out of control. Now that the economy is badly dented and dependent, criticism seems more convenient.

If one is a person of true economic calibre, they will realise the structural changes brought to ensure that the economy survives and thrives in the long run. My most considerable criticism of the previous economist is their deliberate efforts to squeeze the economy when there was no actual need and their sheer inability to leverage Pakistan’s position of strength when the country was a partner in the orchestrated war on terror.

Mr Tarin has put his foot down on the profit mentality of the banks.

With all his financial wit, Shaukat Tarin has successfully dissected the economic challenges facing Pakistan. Despite harsher IMF conditions, Prime Minister Imran Khan’s team was able to meet 26 requirements and has shown tremendous character in fighting for the masses on the issue of increasing tariffs. In his own words, Mr Tarin clarified that “after 1972 PTI is the only government that has formally strategized every aspect of the financial economy.” Due to the deep understanding of financial and economic instruments, Pakistan’s economy only had a negative impact of 0.5 per cent on growth during the pandemic. In fact, our economy was hailed as one of the most resilient globally.

The critics often find it convenient only to depict a part of the picture when it comes to criticizing the sudden spike in the dollar and the out-of-control inflation. When talking about the dollar hike, most will not tell you that Pakistan is currently operating according to the mechanic of a free market, where the dollar price and the exchange rates are left to react to the market dynamics. Covid-19 has driven food inflation across the globe, with the US at 8.5 per cent, the UK is experiencing a 31 per cent increase, while the Global Food Price Index is showing a rise of 33.9 per cent compared to last year. Also, Pakistan is amongst the 45 countries identified by the UN in dire need of external food assistance. Therefore, my question to the nay-sayers is what led to Pakistan being a net importer of food? Who will they hold responsible for pushing our textiles on the brink of closure by replacing cotton with sugar? Who should we hold accountable when the selected few enjoyed the perks of low commodity prices while the interests of poor farmers and the country.

The masses must now understand the initiatives taken by Mr Tarin. In the darkest hours of this pandemic-stricken economy, the government focussed on the underprivileged in society. Construction, Agriculture and Export Industries were focused on driving employment opportunities for the labourer class and strengthening the economy. After decades of being ignored, agriculture has become the prime focus for driving inclusive and sustainable growth. The following initiatives by Mr Shaukat Tarin are a true testament to his statesmanship.

Kamiyab Pakistan Programme: Aimed at the revival of the agriculture sector, this holistic programme will focus on the economic independence of farmers through high-quality seeds, mechanization, interest-free loans, elimination of Arti, and more.

Banking Reformation: As one of the veterans of the Banking Sector, Mr Tarin has put his foot down on the profit mentality of the banks and called for reformations in the interest of the state. Currently, the banking sector supports 33 per cent of the GDP with a 45 per cent share of lending of out the total. This indicates that only 15 per cent support is provided by the formal sector. Also, 85 per cent of the credit is consumed by nine cities, with the corporate sector being the largest consumer at 75 per cent. While agriculture and SMEs only consume about six per cent each. With little or no money going to the deserving Pakistanis and the huge disparity in the bank’s loan-to-deposit ratio, the system needs reforms. Mr Tarin and the State Bank of Pakistan are devising a strategy to put the banking sector in order.

Fixing the Money Leakages: One of the most absurd sources of financial drainage in the governmental system is the “White Elephants” operating under the façade of Public Sector institutes with no benefit to the public. Organisations such as PITAC, PIM, PILDAT, SMEDA are causing losses up to Rs 286 billion. In his discussion with me, Mr Tarin confirmed the need to privatize these institutions much similar to Sarmaya-e-Pakistan. The institutions will govern under a private body equipping them with an appropriate governance structure keeping in view the best international practices led by a team of technocrats and industrial experts.

Targeted Growth Sectors: With the identification of 14 critical growth sectors complete, the government will move ahead with full throttle to boost the performance in these areas through incentivisation, investment, and enhancement opportunities. Sectors like tourism, Information Technology, SME, Micro Enterprises, Construction, and more will be prepared to contribute to the government’s export target of $50 billion.

With all that being said, I genuinely believe in Shaukat Tarin’s vision of Inclusive and Sustainable growth. As Mr Tarin said, harsh lessons learned from Ishaq’s melodrama and free-market economy cannot operate freely, calling for balanced and intelligent intervention to achieve stability and growth targets.

The writer is Special Advisor (Pakistan Institute of Management) and Foreign Research Associate (Centre of Excellence, China Pakistan Economic Corridor). He can be reached at hassnain.javedhotmail.com