Spearhead Analysis – 13.07.2017
By Farrukh Karamat
Senior Research Coordinator, Spearhead Research
The Joint Investigation Team (JIT) for Panamagate, endorsed and mandated by the Supreme Court, has completed its work and submitted their findings. Over the past two months, and more, the people of Pakistan have been bombarded by information and disinformation and divergent scenarios and opinions. The exchange of blows between the ruling party and the opposition can at best be described as unfortunately acrimonious, based on emotional outbursts with limited understanding of the issues as opposed to rational and mature debate. It was indeed astounding that while it is the Prime Minister and his immediate family that have been embroiled in Panamagate, the entire PML-N ‘leadership’ was up in arms going hoarse trying to prove themselves to be more loyal than the King. In the process accusations and slander has been hurled against individuals, institutions and organisations, and the process continues to date. There has been immense damage to the reputation and integrity of Pakistan as a country in the wake of Panamagate and the writ of the Government has been considerably weakened. This at a time that Pakistan needs direction and strong leadership is particularly worrisome and could have far-reaching ramifications. The Party has not ended and the Madness is expected to continue.
Amidst all this the JIT plodded along and completed the job it was mandated to do. Now it is up to the Supreme Court of Pakistan to review the findings and plot the future course of action. For the pessimists and sceptics in Pakistan this is just one more chapter that too will end and nothing will come out of it, as the issue would be swept under the carpet like the issues before. For the optimists and those with hope, this is the beginning of a new chapter for Pakistan that will usher in an era of Naya (New) Pakistan. Whatever the outcome, this issue will definitely define and determine the future direction of this country. It will impact how Pakistan will be perceived in the global context and how it will move forward to embrace the future. One hopes that it will be with pride and heads held high. The issue is not just the outcome of Panamgate, for Pakistan faces a crisis of management and credible leadership in almost every facet of life. Corruption has become endemic and part of institutions and organisations.
That the JIT findings have been made public prior to the Supreme Court of Pakistan reviewing or issuing a statement appears to be odd. The media is having a field day discussing and organizing ‘barking’ bouts on the talk shows. If the intent was to convince the Prime Minister to step down based on moral grounds, the strategy has fallen flat as the Prime Minister has decided not to resign. This has now once again placed the onus on the Supreme Court of Pakistan and their review of the JIT findings. These are troubled times for an already beleaguered country.
All through this, there are other happenings which continue to create doubts and misgivings. One was the sudden drop in the value of the Pak Rupee, which by some was attributed to malafide intentions. In fact, this was controlled devaluation managed very badly. There is an expectation that there will be further erosion in the value of the Rupee for once the slide begins, the currency finds its own equilibrium. Plus, there is the added pressure from International lending agencies to devalue an over-valued Rupee. For the common man all this translates into higher prices, and for the country a higher debt burden at the least. Alongside the devaluation the Government appointed a bureaucrat to the post of Governor State Bank of Pakistan. In a recent insightful write-up, A Tale of Central Banks and Governors, Dr. Kamal Monnoo, has aptly pointed out the ‘poor’ quality of people appointed as Governors as opposed to India whose Central Bank has been led by people of caliber, integrity, and stellar qualifications. The glaring gap between fiscal governance among the two countries is there for all to see. The Mad Tea Party continues.
The SECP Chairman who is on bail pending court proceedings against him for tampering the record in the case of Nawaz Sharif related investigations, has refused to resign and the Ministry of Finance has not moved to replace him. The Chairman has immediately announced that he is approving a hefty bonus to SECP employees and that he is not leaving. The Mad Tea Party continues.
In a recent interview one of the key Ministers of the PML-N government kept referring to Calibri as Calibri Phone, till he was corrected by his opponent who pointed out that Calibri is a Font used in typing. And Pakistanis have entrusted these people with their destinies. Their extensive reviews and comments about Panamagate and JIT investigations are based on limited understanding and hearsay, without having actually understood what the issue or the findings are. The Mad Tea Party continues.
As if all this was not enough, it has now emerged that the President of National Bank of Pakistan was managing a Nursing Home for old people in England before he was picked up by the Government to run the largest bank in Pakistan. The Mad Tea Party continues.
Amidst all this the economy continues to suffer. The Pakistan Stock Exchange (PSX), KSE-100 index continues to shed value and is down to the 43,000 level. The Exports continue to decline despite announced incentives, as the exporters continue to be uncompetitive compared to other countries. The imports continue to rise. The FDI is marginally up on CPEC related investments, and the remittances are on a decline. The current account deficit widened by 177% till May 2017 to US$8.93 Billion and the trade deficit widened by 42% to around US$30 Billion. The country’s forex reserves are down to the US$16 Billion mark and declining. To fund the gaps, the country continues to borrow more and more from whatever source funding is available. Social sectors continue to be ignored as high profile projects in transportation and roads take precedence over education, healthcare, water and sanitation. The population continues to expand unchecked placing additional demands on the meagre resources of the country. Pakistan is a ticking time bomb with the fuse having been lit, and yet the mad tea party continues with no urgency to diffuse the situation as personal aspirations and benefits take precedence over national interests.