Freedom vs economy

Pakistan celebrated its 76th independence day on Monday amidst nationwide fanfare, coinciding with a change of government in Islamabad and a discernible gap surrounding the country’s economy.

While the clamour of freedom resonated all across the country, Pakistan’s economic trajectory remained unusually stressed. In the months preceding Monday’s change of government in Islamabad, Pakistan’s average income and below average income households have suffered from a deepening pinch of a widening economic malaise.

In sharp contrast to the former government’s oft-repeated claim of all is well, the opposite is true for a vast number of homes across Pakistan. In brief, the legacy left by the outgoing government is hardly worth celebrating.

Notwithstanding the former government’s oft-repeated claim of successfully averting a default on Pakistan’s foreign debt payments, the same can just not be said for the multiple stakeholders ranging from mid-to-small businesses and numerous households across the country. The latter have suffered a variety of defaults that have not been acknowledged by key members of the former government, notably former prime minister Shehbaz Sharif and former finance minister Ishaq Dar.

That Dar could have been considered a candidate to take charge as the caretaker prime minister in a widely reported move during the former government’s closing days was just beyond comprehension. This is especially given the former finance minister’s failures, notably ranging from a failure to secure an appreciation of the rupee as he spelt out initially upon taking charge to securing a closure of a crucial IMF loan agreement are all writ large on Pakistan’s recent historical timeline.

Eventually, the IMF loan of $3 billion left behind by the former government was secured only after former prime minister Sharif reached out directly at least thrice to the managing director of the IMF, desperately seeking a top level intervention. Consequently, Dar’s departure from the finance ministry on a one way ticket is best for Pakistan as newly appointed prime minister Anwarul Haq Kakar now steers the country through difficult terrain.

Beyond taking charge, the Kakar government faces one of the toughest challenges encountered by any chief executive in Pakistan’s history. Aside from the political noise that is set to continue loudly across the length and breadth of Pakistan, tackling the multiple economic woes is by far the most formidable obstacle in the country’s history. In brief, the many economic pitfalls are broadly two-tiered – raising far more revenue than what the state presently collects while reducing Pakistan’s gap on its external front to make foreign debt payments more manageable.

In the closing days of the Sharif government, the reckless push to announce a series of cost-driven initiatives irrespective of budgetary constraints, has saddled Pakistan with a larger future financial burden. For Prime Minister Kakar who must appreciate the vast gaps between central Pakistan and his home province of Balochistan, reversing large recent financial commitments is a must. Can any ruling structure justify new motorways, urban developments and distribution of free laptops while Pakistan suffers from increasing food insecurity? This is a compelling question.

Besides, any reformist government must demonstrate its commitment to Pakistan through clamping down exceptionally hard on wastage of financial resources, as the country can well benefit from every saved rupee spent on where it matters the most. A refocus on the economy must target the many public-sector companies that have only become white elephants over time. Repeatedly cited cases such as that of PIA or Pakistan Railways or the power transmissions networks to name just a few, pose serious risks for Pakistan’s stability and future.

At the same time, a refocus must squarely dedicate the new government to oversee a comprehensive push towards revitalizing Pakistan’s agriculture sector. Many of Pakistan’s current economic challenges stem from the insecurity surrounding falling production of key crops. For instance, Pakistan is well endowed with the resources to remain not just self-sufficient in the production of wheat. The management of those resources can also lead to surpluses that can provide added income from exports. Similarly, the decline in the production of cotton is another case of a crop whose output can well be lifted. Surpluses from crops will not only add to the income of Pakistan’s farmers who have lost their incomes over time. Such surpluses can also help to stabilize prices of key commodities and create space for income from their exports. Tackling the challenges surrounding Pakistan’s agriculture however requires a vigorous attack on the challenges of governance that beset this sector.

Clamping down hard on the supply of adulterated pesticides, chemical fertilizers and poor quality seeds will be central to any reform that will require a brutal clampdown on powerful interest groups across Pakistan. Other areas of central importance in the industrial sector ranging from those which substitute imports to the export oriented ones must figure centrally for support in any national economic policy. Ultimately, independence without economic revival is simply an unfulfilled objective.

The writer is an Islamabad-based journalist who writes on political and economic affairs. He can be reached at: farhanbokhari@gmail.com