Something has to Give

Spearhead Analysis-14.02.2020

By Farrukh Karamat
Senior Research Coordinator, Spearhead Research

At a point when the Auto Industry in Pakistan is experiencing a severe sales downturn,  in his address to the Parliament, the Advisor to the Prime Minister on Finance Abdul Hafeez Sheikh “rejected the impression that auto sales is on the decline”.  This is a follow up statement of the not too distant Tomato price debacle, when he said that Tomatoes are available at Rs.17 per Kg. Seems like a serious disconnect from reality. The Government has been in power for a considerable time period now and still seems to be groping in the dark, putting the blame for every evil that plagues Pakistan at the door-step of the previous regime. It is time to accept responsibility for their actions and start on the new course to revive Pakistan and its economy.

After over a year and a half in power, the Government is still seeking advice from others to come out of the economic meltdown. It is ironic that the Advisors and advice is being sought from the stalwarts of the past Governments both PPP and PML-N, which the PTI continues to vehemently accuse for the decline of Pakistan. These advisors were part of the team(s) of the previous governments and if the PTI rhetoric is to be accepted then they are in part responsible for where we are. How can the PTI leadership expect these individuals to devise new routes for the progress and prosperity of Pakistan?

Shabbar Zaidi, the Chairman of the Federal Board of Revenue (FBR), is the latest casualty from among the new faces that were brought in to restructure and revitalize the economy. Earlier, we lost three international Economists within the very first week of the new Government. This was followed by the unceremonious exit of Asad Umar from the Finance Ministry. Then we had the Chairman Board of Investment leaving, having been frustrated by the lack of resolve exhibited by the Government. These were all individuals who were “new” to the game and were expected to create the economic miracle dreamed by the Prime Minister. The fact that all are now out and the ghosts from the past are back reinforces the fact that Pakistan keeps reverting back to the past trying to find solutions for the future. There is a complete lack of innovative or transformative thinking at the Government level.

The lack of resolve exhibited by the Government is also evident from the fact that the Supreme Court of Pakistan has been forced into taking Executive level decisions that should have been within the ambit of the Government. This again demonstrates that the Government has accepted its inability to enforce its writ and as a result a vacuum has been created that is being filled by another State Institution. The fact that the Government capitulated to Maualana Abdul Aziz of the Lal Masjid fame has been able to extract 20 Kanals of land from the Government after a stand-off at Lal Masjid. In addition, while inflation runs sky high the Government has provided a Rs.10 Billion subsidy out of tax payers’ money to reduce the inflationary impact created by them. In a word no long-term solutions, but more of the same.

The derogatory level of debate in the Parliament can at best be termed as shameful. Accusations and counter accusations are hurled during the sessions with nothing constructive discussed at any point. Decisions are on the basis of Executive orders and then these decisions are often overturned as was the case of the PMDC revocation which has been reversed by the Courts. The IMF has continually revised its targets downwards for Pakistan with the latest being the reduction in the revenue target. The faint glimmer of hope created by the PTI Government seems to be fading fast, as businesses gradually come to a grinding halt burdened by inefficiencies of a lethargic system and the high real costs of doing business. Things are coming back to where they started from and nothing has been really resolved whether we look at corruption, taxation, bribery,  debt or false promises; what has happened is that we are burdened with additional costs which have raised the cost of living, lesser opportunities for employment and reduced purchasing power. How long can we continue like this, where the Government continues to extract from the people for those in power, remains to be seen. Something has to give at some point.