What’s New in Naya Pakistan?

Spearhead Opinion – 20.01.2020

By Farrukh Karamat
Senior Research Coordinator, Spearhead Research

The PTI government is now in its second year and reality is starting to sink in. Much had been promised to the people as the Government embarked on the rocky road towards Naya Pakistan. One has to accept that years of neglect and mis-governance have eroded the very foundations of this country and the PTI inherited a system that was imbued in corruption, tax evasion, nepotism, and malpractices. Yet there were star performers, innovators and philanthropists within this system who are working tirelessly against heavy odds to make a success of themselves and their ventures. It is a fact that Pakistan has been sustained for a very long time on the basis of a thriving parallel economy that has generated enormous profits for a few, while providing employment, business opportunities and livelihood for many. It is the abject failure of successive governments to channelize funds from this segment towards the mainstream industrial and business development in the country. Perhaps one of the factors has been the psyche of the people to focus on the outside for investment and inside for funds generation. As a result, enormous funds from the parallel economy have ultimately been invested abroad, which has been a great loss for Pakistan.

The PTI led government entered the arena as the proverbial ‘Knight in Shining Armour’ to deliver the people from all the evils and to establish a Welfare State on the pattern of Riasat-e-Madina. Lofty ambitions indeed, for a virtually bankrupt country. From the outset it was clear that the high ideals of the PTI government were not backed up by solid planning. A striking example was the inept manner in which the Financial and Economic situation was handled in the initial days. Then came a spate of disastrous decisions such as: the appointment of the Chief Minister Punjab; the departure of several eminent Economists from  the Team; the opening of the Governor House Lawns to a rapacious Public; the announcement of the demolition of the Governor House Lahore Wall; the sale of Prime Minister House automobiles and buffaloes; the conversion of the Prime Minister House into a University; and the travel of the Prime Minister via Helicopter being deemed cheaper than travelling by car. Hardly confidence inspiring moves and in the process the PTI government lost the Ministry of Finance and its control over how the finances and economy were to be managed.

The unprecedented hikes in interest rates, devaluation and ongoing additional surcharges have unleashed a spike in inflation that has severely eroded the purchasing power of the people, and led to the loss of employment opportunities. The dream of generating millions of jobs transitioned into a reality of rampant job losses. At the same time the NAB become overly active arresting all the political opponents and their kin, initiating cases against them, while so far few if any have been convicted and the biggest target – Nawaz Sharif – has managed to wriggle out yet again and is residing in London along with his sons and brother. Others too are now being provided relief through Bail. The combined draconian efforts of the NAB and FBR have dealt a severe blow to a tottering economy as the money has virtually gone underground and the real economy has been left teetering on the very edge. While the focus should have been on gradually expanding the tax net, an overly ambitious tax collection target was set, which appears unachievable and has since been revised downwards. The monster of Circular Debt continues to strangle the system with no apparent solution in sight.

After the Kekra fiasco where the Nation was promised huge oil reserves, we have seen several crises borne out of the ineptitude of the government, such as the recent Flour crisis; appointments of favourites; sparring with the Judiciary; and the media circus – factors which have served to illustrate that at its core the PTI is similar to its predecessors – plagued by incompetence and ineptitude. The problem for the Prime Minister appears to be that he lacks a credible team, which can deliver. It is starting to appear more and more like a horde of tried, tested and failed ex-Ministers who are leading him on a false path, with no clear goal in sight. It was frightening when a Minister said that the economy had stabilized but the growth was impaired. Instead he should have been pointing out that the economy has been stabilized and then charted out a strategy for growth. Merely saying that 2020 will be the year of prosperity and growth is not going to resolve the problem – a way has to be found to realize that promise.

The recent IPSOS survey has portrayed a picture of diminishing hope among the people of Pakistan. Everyday corruption is rampant as bribes are being given and accepted openly. There is hardly any improvement in the workings of the Government departments and the life of the common man is as hard as ever coupled with the added burden of reduced purchasing power and the high cost of living. At the same time those who were accused of inflicting financial damage on the country continue to enjoy the same life-style as before. Pakistan still remains far away from the promised Riasat-e-Madina.

The FATF continues to pose a threat, the Reko Diqq judgment and a fine of close to US$6 Billion still hangs over the head of the Government; there might be stabilization in the economy to please the IMF but it has come at a heavy cost for the people of Pakistan who are struggling to make ends meet.  The cost of utilities, food, fuel, healthcare, and education continues to rise and eat into the meager earnings of the people of Pakistan. Import curtailment has reduced collection of duties and taxes and as a result the Government yet again faces a tax collection shortfall, and has focused on tormenting the existing tax payers with additional scrutiny and harassment tactics.

In a word, nothing has really been resolved. Pakistan continues to languish in the comity of Nations, creating situations where the decision making at times appears almost farcical. There is little that appears to be New in the promised Naya Pakistan. It is alarmingly starting to appear that we are gradually reverting to the past yet again. As Orwell famously wrote, “All animals are equal, but some animals are more equal than others.” The Government continues to rely on the Economists from the past for advice, people who have repeatedly failed to put Pakistan on a corrective course. There was a golden opportunity when fresh blood was brought in to provide a new economic direction to Pakistan, but the forces within prevailed and those Economists left before they too could be dragged down by a system that seems to abhor innovation. It is time to start thinking about what is good for Pakistan and its people, instead of overly focusing on a pat on the back from the international multilateral agencies.