Spearhead Opinion – 09.11.2018

By Farrukh Karamat
Senior Research Coordinator, Spearhead Research

Things appear to happen magically in Pakistan, at times with no logic, process or explanation. There appears to be a complete lack of planning in the thought process and the resulting emotionally-charged decisions are taken on the spur of the moment often creating complications. Information is distorted to the Nth level and flawed viewpoints justified through a convoluted thought process, to the extent that it appears ‘Fair is Foul, and Foul is Fair’. The systematic fault lines are embedded within the broader framework of almost all individuals and institutions, with a few brave sane heads trying to raise their voices against the magical madness. The key word in the affairs of the State is “Abracadabra”.

Based on inherent vulnerabilities and handicaps people in almost all walks of life tend to rely on an external power to help them navigate through adversity, rather than relying on their own abilities and seeking support from God – whether it is a belief in the miraculous powers of a Seer or Peer to grant wishes and desires, or the influence of a manipulative individual or institution. Repeatedly leaders and governments have fallen prey to this magical malady believing in a surreal reality and in the process ending up destroying not just themselves, but inflicting enormous damage on the State.

The PTI-led government came to power on high hopes and promises of turning the tide and creating a ‘Naya’ Pakistan. Promises need to be delivered, and the people having experienced years of neglect were hoping for an instant magical turnaround. Partly, due to the strong rhetoric used by the PTI leadership in building up the hype around their ability to transform Pakistan into an Islamic Welfare State on the lines of Madina. For now, we are being convinced of the magical ability of the government to deliver five million house or resolve the water crisis. There is a need for thorough planning and a delivery structure, which to date is not in place and the slogans are but empty promises.

Unfortunately, the professional team and the planning that was expected from the PTI-led government has failed to materialize so far. The instant overt emphasis on optics might have appeased the ignorant masses, but it did not contribute towards the State exchequer to help alleviate the economic and social woes of a country mired in deficits and debts. It did not help when the PTI-leadership could not change gears to move out of their opposition role into a governance mode and irresponsible statements did more harm than good. The State Ministers openly stating in an almost farcical manner that the economy is on life support or undergoing a by-pass operation did not exactly inspire confidence amongst investors.

Certain recent actions have reinforced the view that the PTI government lacks the experience to govern and is not learning from their mistakes. One of the recent headlines making the rounds was the dismissal of the Inspector General of Police Islamabad on the directives of the Prime Minister. A gross error in judgement based on personal whims that ultimately led to the involvement of the Supreme Court of Pakistan in the matter. An unnecessary action that could have been managed much better, had saner heads prevailed.

The Managing Director of Pakistan Television Network was removed after PTV ran a clip in which due to a typographical error Beijing was replaced by Begging. While there is an ironic truth in the Begging saga, it was an issue that was grossly mismanaged and blown out proportion. Perhaps the error touched a raw nerve of the Prime Minister who had categorically stated that he would not be seen begging for funds from other countries or institutions. Again a decision that was based purely on a personal whim.

The Finance Minister, after the China visit, has stated that the Balance of Payments crisis has been averted. Truly magical that this happened on the eve of the International Monetary Funds (IMF) visit to Pakistan. The Balance of Payments crisis is not a one-off event that can be averted through placement of a Saudi deposit of US$3 Billion for a year or the provision of a deferred oil facility. It is symptomatic of a wider malaise infecting the economy, where the inflows are less than the outflows. Statements about doubling of exports to overcome the issue will remain statements till such time that the exports actually exceed imports. For this the infrastructure, manpower, competence levels, skills and market access have to be in place to capitalize on such strengths. The delay in approaching the IMF and finalizing a bailout package has cost the economy, as the government was again trying to find a magical solution where there was none. For now, objective decision making is lacking – exports will not double through chanting “Abracadabra”, nor will funds materialize from thin air.   

After the address to the nation by the Prime Minister over the Asiya Bibi decision, it appeared that the government was firm in its resolve to tackle the miscreants with the use of force. Sad, that the resolve magically fizzled out while the Prime Minister was trying to garner financial and economic support from China. This could prove to be a turning point in terms of the direction that Pakistan takes in the future in dealing with the right wing religious zealots.

After having been placed on the Financial Action Task Force (FATF) Grey List, it was imperative that the financial system and transactions were brought into compliance with International regulations. Unfortunately, the financial system has been inflicted by money laundering on a massive scale and subsequently cyber-crime. The Banks in Pakistan have exhibited their vulnerability both in terms of detection and prevention of dubious transactions as a result of weak internal controls and lack of proper training in Compliance. While much hype is being created by the media on the money-laundering transactions, actual remedial groundwork is lacking. Similarly, while red flags had been raised about a potential cyber-crime hitting Pakistani Banks, no action was taken to remedy the situation and protect the customers. Perhaps the financial sector was waiting for a magical divine intervention to ensure that they would somehow be in compliance and protected. The Central bank has failed miserably in the task of ensuring Compliance on repeated occasions despite numerous audits and checks of the Banking system.    

It is high time that the Government and the institutions realize and discharge their responsibilities for the protection and benefit of the State and its people. There will be no magical solution, as the solution has to come from within through concerted action. Less talk and reliance on magic and manipulation and more objective decision making is what is required to navigate through these difficult times.