The entire nation is once again glued to the national political drama. Political leaders are again playing with – or pretending to represent – the life of the common man. Every six months or so, there’s another Pandora’s box people have to worry about. Whether it’s a motion of no confidence, Senate elections, IMF or no IMF, mini-budgets, National Accountability Bureau (NAB) business, or “absolutely not.”
Politicians kept the 3.5 year test match upside down. These have real costs. For people in assemblies or bureaucratic offices, it might be more content for TV shows, social media, and newspaper discussions. However, for the common man, this only adds misery upon misery. Naturally, the role of the strong opposition, the media and the judiciary is to push, assess and guide the attention of policy makers to people’s issues.
Nevertheless, uncertainty retards prosperity or the hope of it. Before spending a penny, investors (try to) chart the future. While trying to navigate the clouds of economic variables, they take a leap of faith. It is precisely this leap of faith that is driving economic gains across the country. These risk takers need assumptions about the macroeconomic outlook. Given Pakistan’s fragile economic framework, the depreciation of the rupee, tax culture, changing policies, interest rates and the perpetual reshuffling of policy-making bureaucrats aggravate delayed decision-making.
Eventually, the money stays in the unproductive real estate sector, in the bank or under the carpet, if it cannot escape abroad. While an independent foreign policy is something to sell to the masses, diplomatic change of course can also be timed in subtle ways, instead of being publicly aired.
Statements such as “absolutely not” or a rejection of the EU ambassadors’ letter on Ukraine, despite their merits, should be carefully uttered. Unless it’s a deliberate ploy to change public opinion or public shifts in foreign policy, these times create anxiety among investors.
We must first repair our house before chartering a bold geopolitical gesture. The game of strategic domination requires economic independence. China’s economy grew at an enviable 8-10% for decades before it got on with it and tried to create a new world order. The focus has been on the interior for years. Pakistan must also learn from this miracle of the Chinese. It requires tough, bold and urgent decisions. First you need to put a Band-Aid on the economic leaks.
READ 70,000 people apply for housing loans in Naya Pakistan
The massive losses of Pakistan International Airlines (PIA), Pakistan steel mills, Pakistan railways and power distribution companies are a matter of national security. Every day of delay costs billions of rupees, which could be diverted to development, debt repayment and social security. In the private sector, these have a much better chance of being effective than in any political arrangement. Likewise, policy makers should be working around the clock engaging stakeholders to develop new policies for the future. There must be a realization – and panic – that with the current setup, we would never become a middle-income country.
This requires training the young population in exportable skills, improving food security to feed citizens, integrating value addition in all areas, and diverting resources to economic well-being. By the way, politicians’ television time should be limited. In conclusion, the point for readers to ponder is what would improve the lives of people at the bottom of the pyramid? From 2017 to 2018, the Pakistani rupee depreciated by 70% and taxes rose amid decades-high global inflation.
Some things are beyond our control. But what should be in our hands, should be grasped firmly. If effective decision-making requires an equivalent private sector bounty for bureaucrats, so be it. There should also be a carrot with the NAB stick. If the politicians were on the brink with the four-year term, so be it. Leaders should come to terms with the fact that a majority in Pakistan only watches TV talk shows for entertainment.
Purchasing power has been declining for years.
Pakistan must triple its efforts to avoid falling into another frying pan of low growth and debt trap. Naya or Purana Pakistan, it’s time to fix the house.
THE WRITER IS AN INVESTMENT SPECIALIST WITH A STRONG INTEREST IN POLITICAL ECONOMY